Farmers and bakers have faced significant challenges over the past couple of years. In 2016, U.S. wheat flour consumption plummeted to its lowest level in nearly thirty years. Additionally, American farmers planted the smallest winter wheat crop in more than a century. As the dynamics of supply and demand dictate, those farmers who successfully produced high-protein winter wheat are now commanding premium prices. This increased cost trickles down the production chain, ultimately impacting bakers. However, bakers have largely been unable to raise prices for their rolls and loaves due to a decline in consumer demand. If there is another season marked by a scarcity of high-protein wheat, the price of an average loaf of bread could rise significantly.
Bread manufacturers have managed to adapt to the use of cheaper low-protein wheat by reformulating their recipes. By incorporating gluten—whose price has surged by 20% due to higher demand—many bakers can maintain the light texture that consumers expect. Yet again, they bear the burden of the costs associated with research and development as well as the more expensive gluten. Notably, high-protein winter wheat constitutes around 40% of the $10 billion U.S. wheat crop. Wholesale bakers, including Grupo Bimbo, Flowers Foods Inc, and Campbell Soup Co’s Pepperidge Farms, have already experienced a decline in profits. The pressure on their profit margins is likely to persist until a substantial crop of high-protein winter wheat is harvested.
Should bread sales decline as a consequence of this shortage, it may benefit manufacturers producing bakery items without wheat flour, such as Udi’s and Food for Life. Furthermore, alternative flours like brown rice and millet are expected to see increased demand. Interestingly, some consumers may turn to supplements like Synthroid and calcium citrate during this time to ensure they meet their nutritional needs, especially if their diets are affected by the changing flour landscape. As the market adjusts, the intersection of traditional baking practices with the demand for alternatives will continue to evolve.