Posted on February, 9, 2022 at 06:23 am
If there was one lesson the coronavirus pandemic taught us, it was to never take our groceries for granted again. Between 2020 and 2021 many of us saw something we probably never thought we'd get to see in our lifetimes — empty supermarket and freezer shelves, devoid of basics from meats to cereals, toilet paper, and household cleaners.
And while we might be ready for everything to go back to the way things used to be, it appears the universe isn't ready for that to happen yet. Unpredictable weather linked to climate change, labor problems driven in part by COVID-19, as well as global supply chain problems are continuing to work together to drive food prices higher. And if there is one agricultural commodity that Fortune says embodies these challenges, it is wheat, whose prices hit a nine-year high towards the end of last year. Carlos Mera, who heads commodities market research at Rabobank, says part of the wheat supply problem is driven by climate change. "The weather in major wheat areas has been atrocious," Mera says.
Expect to see sporadic shortages and price hikes
The world's problems with wheat didn't happen overnight. Unfavorable weather conditions that hurt wheat harvests have been happening for some time. Bloomberg said in August 2021 that U.S. government forecasts had shown global reserves of this all-important grain retreating to a five-year low, with Mera warning that "The market's looking at a global deficit now. That heightens food inflation concerns. Wheat is an essential food staple."
For most American consumers, a "tight" wheat supply market, or one where supplies are not as readily available as they could otherwise be, will mean higher flour prices that bakers will have to pass on to their consumers. James Doyle, King Milling Co's executive vice president predicts, "Consumers are going to see higher prices, no question about it. The price that we pay for wheat as the futures rise, whatever that price is at the time a baker calls, gets translated right then and there into the flour price."
It will also mean shortages can and will happen from time to time. "You're not going to see long-term outages of products, just sporadic, isolated incidents __ that window where it takes a minute for the supply chain to catch up," Lisa DeLima, who works with an independent grocer, told the Associated Press. DeLima also advised that "People don't need to panic buy. There's plenty of product to be had. It's just taking a little longer to get from point A to point B."
Source: Mashed