Give Us This Day Our Daily Bread
So you go to your local market because you need to pick up a loaf of bread to make sandwiches for your child’s lunch. You also pick up some crackers, buns for the hamburgers for your cookout and a box or two of cereal for breakfast. What would you do when you get up to the checkout, unload your cart, look up and see you just paid $9.00 for that loaf of bread!
Yes, I said $9.00 a loaf! I could be wrong; it could be only $7.00.
Well, that’s what is going to happen by next fall. Better load up the freezer or else dig out and dust off the old bread maker down in the basement. Hope you didn’t sell it at last summer’s garage sale.
I’ll let you in on some of the things being said at the Minneapolis Grain Exchange and yes, it’s boring, but better read this and you better know what’s going on.
As of this Tuesday, February 26, 2008 the most versatile of all-purpose flour, red winter wheat, used in cakes, crackers, breads and pastries, jumped to an all-time high of $10.50 a bushel. Spring wheat also rose by the daily limit to $14.93 a bushel, the highest price for any U.S. wheat futures contract.
Just today February 29,2008 the farm news said that the bushel of wheat, that the farmers were paid for last year at somewhere around $3.00 is already costing more than $10.00. These are not exact amounts; actually they are higher and going up fast. I’m not a commodities expert, but you get the picture. Check out the Chicago Board of Trade for yourself.
We basically have three classes of wheat that we are in danger of running out. They are red spring wheat, durum and soft white. The prices are affecting consumer bakers, who have to pass the hike on to their customers, you and me.
I don’t know if you noticed this either, but since November 2007, the wholesale price of flour has risen 25 to 90 percent, pushing up the price of pasta, bread, and you’re your doughnuts! Spaghetti noodles made with wheat cost 18% more today than a year ago and if you’ve notice whole-wheat bread is 12%.
I also learned this rise in, per bushel price is not going into the farmer’s pockets. As a matter of fact, for each bushel of wheat now being sold for, lets say.. $10.00, the farmer is only getting $.25. Yes, you are reading that right tootwenty-five cents, but that’s another story.
What I didn’t know, but learned about, is traditional grain exporters such as Russia, Kazakhstan and Argentina restricted foreign access to their wheat, hoping it would ward off inflation in their countries. The foreign buyers then flocked to America’s markets and routinely placed large orders. Iraq alone (this Tuesday 02/26/2008 bought more than 550,000 tons of hard red wheat. (Per. Chicago Tribune)
The Tribune also quoted, Joe Sowers, an analyst for U.S. Wheat Associates; an industry organization based in Washington, Sowers said, “A Nigerian can buy wheat the same way as a Japanese trader or a miller in Iowa, because it’s an open-access market.”
Everything was fine until bad things started to happen. Poor weather in 2006 hurt yields in the U.S. and overseas. All commodity prices are up, in part due to the push to raise corn for ethanol, which took over the fields used for other crops, specifically wheat. Then wheat shortages started with the Easter freeze in the midsection of the country, which ruined winter wheat across Tennessee where 95% of the counties were declared an agricultural disaster. The freeze was followed by rain in May and June during the wheat harvest in Texas and Oklahoma.
Some of the companies heard from this week were; Premier Goods Pic, the U.K’s biggest producer of cakes and instant soup, on Sept. 4th said it may further increase prices for its Hovis bread brand and other of their products.
Indofoods Sukses Makmur, based in Jakarta, will increase flour prices in each of the next four months to pass on costs.
Nisshin Seifun Group of Japan, a miller, is considering raising flour prices for the second time in six months, after an increase in May 2007, that was the first in 24 years!
Downers Grove, Illinois-based Sara Lee, maker of the bread of the same name and Jimmy Dean sausages, said yesterday it will keep increasing prices to cover higher commodity costs. Everybody Loves Sara Lee! This is serious if we can’t afford to feed our sweet tooth.
Tuesday, Domino’s fourth-quarter net income fell nearly 48% to $16.2 million, or 26 cents per share, from $31 million, or 49 cents per share, a year earlier. The company said it was hurt by high cheese and wheat costs and rising interest expense. What does this mean; my pizza will cost $50.00 instead of $25.00? Now they’ve gone too far!
If you think this isn’t going to happen or think the $9.00 loaf of bread story, is just a scare, then when your done reading this, go check your gas prices, then take a look at what you just paid for that gallon of milk in your refrigerator.
Thank goodness we can believe President Bush when he says, “We are not in a recession.”
If all this doesn’t scare you, then stop and think what beer is made from? Now have I got your attention?