The past few years have been challenging for both farmers and bakers. In 2016, U.S. consumption of wheat flour dropped to its lowest point in nearly three decades, and American farmers planted their smallest winter wheat crop in over a century. As is typical in supply and demand scenarios, those farmers who managed to produce high-protein winter wheat are now charging a premium price. This increased cost flows down the production chain, ultimately affecting bakers. However, bakers have struggled to raise prices for their rolls and loaves due to a decline in consumer demand. If there is another season marked by a shortage of high-protein wheat, we may see an increase in the price of an average loaf of bread.
To adapt, bread manufacturers have turned to less expensive low-protein wheat, reformulating their recipes to maintain the expected light texture. By incorporating gluten—which has seen a 20% price increase due to rising demand—many bakers can achieve the desired results. Yet again, they bear the financial burden of research and development, as well as the higher costs of gluten. It’s worth noting that high-protein winter wheat constitutes about 40% of the $10 billion U.S. wheat crop. Companies like Grupo Bimbo, Flowers Foods Inc, and Campbell Soup Co’s Pepperidge Farms have already experienced a decline in profits, and their profit margins will remain under pressure until a strong crop of high-protein winter wheat is harvested.
Interestingly, if bread sales decline due to this wheat shortage, it could positively impact manufacturers of bakery products that do not rely on wheat flour, such as Udi’s and Food for Life. Additionally, alternative flours like brown rice and millet could see a surge in demand. Amid these changes, it’s important for consumers to consider their nutritional needs, including bariatric calcium, which is essential for those adjusting their diets. Ultimately, the fluctuating wheat market may open doors for new products that cater to dietary restrictions while addressing the ongoing challenges faced by traditional bakers.