From Deseret News archives:

Buying wheat now takes lot more 'bread'

Published: Saturday, March 15, 2008 1:44 a.m. MDT
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And that's on top of overall food price increases of 4 percent last year and an additional 3.5 to 4.5 percent expected this year, according to federal data. Most years see 2.5 percent increases.

During the past few months, the price of cereals and baked goods has risen nearly 6 percent over the same time last year, federal officials reported.

Consumers can try to minimize costs by buying fewer wheat products, but the nation's bakers, pizzerias and other flour-dependent industries don't have that luxury.

Panera Bread Company is paying more than double what it paid for wheat in 2007 — an additional $26.5 million this year, according to its latest earnings report.

At Kraft Foods Inc., producer of Ritz crackers and Chips Ahoy cookies, the cost of commodities including wheat were up 9 percent last year, or about $1.3 billion. Spokeswoman Lisa Gibbons called that unprecedented and said the company doesn't expect prices to ease anytime soon.

The company has offset most of those costs by finding savings elsewhere, such as switching its Miracle Whip sandwich spread from glass to cheaper plastic bottles.

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At the online baked goods retailer 1-800-Bakery.com, the price of wheat has meant a hiring freeze and curbing low-profit products. So far, those measures have been enough to avoid price increases. But Stephen Pazyra, the company's chief executive, said prices will go up unless there is relief soon.

Sometimes the only option is to bake less.

Four months ago, Tony's Old Fashioned Bakery in Midland, Texas, was paying $7.50 for a 25-pound bag of flour. This week the cost was $23 a bag — for a company that uses 25 to 30 bags a week.

To stretch their dollar and flour, Carmina Aguilar said her family's bakery is making fewer pastries for display and stopped taking many last-minute orders.

Meanwhile, some consumers are taking the opposite path — baking more. King Arthur's Bittel said that while store-bought bread is running between $3 and $5, a home baked loaf will cost about 60 cents.

That's up from 40 cents from a year ago, but Bittel said his company nevertheless has seen growing sales of bread-making machines.

Some experts said wheat prices may be close to topping out. But whether prices come down, and when, is a guessing game.

Global wheat stocks have hit a 30-year low following seven of eight years in which world consumption exceeded production. Federal projections show America's supplies at their lowest levels since the late 1940s.

Earlier this week, representatives of the U.S. baking industry went to Washington to ask the Bush administration and Congress to address the record wheat prices.

Lee Sanders, senior vice president of the American Bakers Association, said her group isn't asking for a wheat export moratorium, which countries such as Ukraine, Russia and Argentina have enacted. But the industry does want export policies reviewed to ensure domestic bakers have enough affordable flour.

Recent comments

A bushel of wheat make 73 loves of bread so, at $12.50 a bushel there...

David | March 16, 2008 at 11:21 a.m.

Americans need to comeof their wheat consumption anyway. All the...

Anonymous | March 16, 2008 at 1:25 a.m.

We are in a recession.

It is already here | March 15, 2008 at 11:27 p.m.

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