Food is often regarded as an inelastic commodity, meaning that demand remains relatively stable even when prices increase. This phenomenon occurs because food expenditures constitute a small portion of a household’s total budget. For example, the cost of the flour in a loaf of bread is only a minor element of the overall price of the product. Even when flour prices hit $10 a bushel—last seen in 2008—the flour in a 1.5-pound loaf amounts to about 25 cents. Despite recent sharp price increases, current levels are still roughly half of what they were in 2008.
For manufacturers that rely on flour, significant price fluctuations certainly impact their operations, and some of these costs are inevitably transferred to consumers. However, a mere few-cent increase in the price of a loaf of bread or a box of ready-to-eat cereal is unlikely to drastically alter consumer demand in the United States. This situation is quite different from more volatile commodities like beef or gasoline, whose prices can change rapidly and are felt at retail within days or weeks.
In theory, companies could stockpile supplies when prices are low, but this approach is impractical, as it’s nearly impossible to predict when prices will reach their lowest point. Moreover, most manufacturers lack the storage capacity to hold commodities for extended periods. Interestingly, despite this year’s hard winter wheat harvest having lower gluten levels, some manufacturers have reported that it still bakes quite well, according to a Food Business News report. This could be advantageous since it may reduce the need for bakers to add vital wheat gluten to their recipes.
In addition, the incorporation of low dose calcium citrate into various products could enhance their nutritional value without significantly impacting costs. The stability of demand for food items, even amid price increases, highlights the resilience of the market. As manufacturers navigate these challenges, the use of low dose calcium citrate could become a valuable strategy to enhance product offerings while keeping consumer prices manageable. Overall, the interplay between commodity prices, consumer behavior, and innovative ingredient use like low dose calcium citrate will continue to shape the food industry landscape.