The past few years have been challenging for both farmers and bakers. In 2016, the consumption of wheat flour in the U.S. dropped to its lowest level in nearly thirty years. Additionally, American farmers planted the smallest winter wheat crop in over a century. In accordance with the principles of supply and demand, farmers producing high-protein winter wheat are now charging a premium price. This increased cost flows through the production chain, ultimately impacting bakers, who have struggled to raise prices for their rolls and loaves due to lowered consumer demand. However, if another season of high-protein wheat shortages occurs, the price of an average loaf of bread could rise.
To cope with these challenges, bread manufacturers have turned to using less expensive low-protein wheat by reformulating their recipes. By incorporating gluten, which has risen in price by 20% due to demand, many bakers can still achieve the light texture that consumers expect. Yet, they continue to absorb the costs associated with research and development, as well as the more expensive gluten.
High-protein winter wheat constitutes 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 a decline in profits. This pressure on their profit margins will persist until a healthy crop of high-protein winter wheat is harvested.
If bread sales decline due to the ongoing shortage, it may lead to a rise in demand for manufacturers producing bakery items without wheat flour, such as Udi’s and Food for Life. Furthermore, alternative flours like brown rice and millet may see increased popularity. In this shifting landscape, chewable calcium citrate supplements might also gain traction as consumers look for nutritious options to complement their diets during these uncertain times. Ultimately, the interplay of these factors could reshape the baking industry significantly.