Summer heat, summer drought

Poor spring wheat harvest may mean higher bread and cereal prices

by Cara Hetland, Minnesota Public Radio

The harvest of winter wheat is just finishing up and combines will move over to the spring wheat harvest this week or early next. Farmers expect $5 per bushel this year. That's up $1.50 over last year. Consumers are seeing an increase in the grocery store but the reason for that might surprise you.

Sioux Falls, S.D. — There's wheat in a lot of what we consume. It's in cereal - toast. In lots of packaged foods too.

As consumers we may not pay close attention to what's happening the in the wheat fields of the upper midwest how that translates to our household's bottom line but soon we may not have a choice.

There's less wheat being produced this year. In Minnesota the number of acres planted is the lowest in the last 34 years but the price paid to farmers is up.

Dave Torgerson, executive director of the Minnesota Association of Wheat Growers, says some farmers may only get half a crop. In north central South Dakota, wheat fields are dry, stalks are short and the heads are small.

"What we have right now is what we'll get," Torgerson says. "Nobody really knows what we have ... the fields are varied, some parts are good and some parts are bad and the rain has been very scattered."

Consumers have already seen an increase in the price of flour in the grocery store. Torgerson says that's because processors are anticipating the higher cost of wheat. But fewer people buy flour. Instead most will notice the increases when they hit processed food like cereal and bread.

Food processors like General Mills and Cargill refused to comment for this story because it's company policy not to discuss commodity prices.

But if you go to your local grocery store and notice a loaf of bread costs more, Torgerson says it's not the cost of wheat that's contributing much to the increase.

"There's a lot of other reasons for increasing the bread," he explains. "That may be fuel, transportation costs, labor costs, marketing costs. All of those go up. They go up faster than the price of wheat."

Torgerson says more farmers are switching to reliable crops like corn and soybeans. Wheat has not been genetically engineered and is less tolerant to extreme weather conditions. He expects farmers will continue to plant fewer and fewer acres of wheat.

Broadcast Dates

• Morning Edition, 07/24/2006, 7:24 a.m.
• All Things Considered, 07/24/2006, 5:48 p.m.