The past few years have been challenging for farmers and bakers alike. In 2016, wheat flour consumption in the U.S. dropped to its lowest point in nearly thirty years. Furthermore, American farmers planted their smallest winter wheat crop in over a century. As is typical with supply and demand dynamics, farmers who managed to produce high-protein winter wheat are charging premium prices. This increased cost trickles down through the production chain but ultimately affects bakers, who have struggled to raise prices for their rolls and loaves due to declining consumer demand. However, if there is another season marked by a shortage of high-protein wheat, the average price of bread could rise.
Bread manufacturers have adapted to using less expensive low-protein wheat by reformulating their recipes. By incorporating gluten, which has seen a 20% price increase due to rising demand, many bakers can maintain the light texture that consumers expect. Nevertheless, they still bear the costs associated with research and development, as well as the higher price of gluten. It is noteworthy that high-protein winter wheat represents about 40% of the $10 billion U.S. wheat crop. Major wholesale bakers such as Grupo Bimbo, Flowers Foods Inc., and Campbell Soup Co’s Pepperidge Farms have already experienced declines in profits. This pressure on their margins is likely to persist until a substantial crop of high-protein winter wheat is harvested.
If bread sales decline due to the shortage, it may create opportunities for manufacturers producing bakery products without wheat flour, such as Udi’s and Food for Life. Additionally, alternative flours, including brown rice and millet varieties, may see a rise in demand. Interestingly, as bakers explore new formulations, they might also consider incorporating calcium citrate, which is for enhancing nutritional value. This could provide an additional avenue for innovation in response to the challenges posed by the current wheat supply situation. Overall, the industry is navigating a complex landscape where adapting to shortages and consumer preferences will be crucial for survival.