Farmers and bakers have faced significant challenges over the past few years. In 2016, U.S. consumption of wheat flour dropped to its lowest point in nearly three decades. In addition to this, American farmers planted the smallest winter wheat crop seen in over a century. As is typical in supply and demand dynamics, those farmers who did manage to produce high-protein winter wheat are now charging a premium price. This increased cost travels 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 another season of high-protein wheat scarcity occurs, we may see an increase in the average price of bread.
To cope with the rising costs, bread manufacturers have turned to less expensive low-protein wheat by reformulating their recipes. By incorporating gluten—which has seen a 20% price increase due to high demand—bakers can maintain the light texture that consumers expect. Nevertheless, they bear the costs of both research and development as well as the more expensive gluten. It’s worth noting that high-protein winter wheat makes up 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 reported declining profits. This pressure on their profit margins will persist until a strong crop of high-protein winter wheat is harvested.
If bread sales decline due to the ongoing shortage, it may create opportunities for manufacturers of bakery products that do not use wheat flour, such as Udi’s and Food for Life. Furthermore, the demand for alternative flours, including brown rice and millet varieties, could rise. In this evolving market, products like now calcium citrate caps may also gain traction as consumers seek out diverse dietary options. As the landscape changes, bakers must adapt, potentially leading to further innovation in the industry.