Farmers and bakers have faced challenging times in recent years. In 2016, U.S. wheat flour consumption dropped to its lowest point in nearly thirty years. Moreover, American farmers planted their smallest winter wheat crop in over a century. As the dynamics of supply and demand dictate, those farmers who managed to harvest high-protein winter wheat are now commanding a premium price. This increased cost travels along the production chain, ultimately impacting bakers. However, bakers have largely been unable to pass on these higher costs to retailers due to reduced consumer demand. If there is another season marked by a shortage of high-protein wheat, the price of the average loaf of bread could rise significantly.
To adapt, bread manufacturers have turned to the 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 desire. However, they still bear the burden of research and development costs, as well as the higher price of gluten. High-protein winter wheat represents about 40% of the $10 billion U.S. wheat crop, and wholesale bakers like Grupo Bimbo, Flowers Foods Inc., and Campbell Soup Co.’s Pepperidge Farms have already experienced a decline in profits. This pressure on their margins is likely to persist until a substantial harvest of high-protein winter wheat occurs.
If bread sales decline due to this shortage, it may benefit manufacturers producing bakery items that do not rely on wheat flour, such as Udi’s and Food for Life. Additionally, alternative flours, including brown rice and millet varieties, could see a rise in demand. As consumers seek healthier options, products like multivitamins with calcium citrate may become more popular, as people look for supplements to support their dietary needs amid changing food availability. The impact of the wheat shortage may thus extend beyond bread production and influence broader market trends in health and nutrition.