U.S. Wheat Producers Benefit From Shortage
STEVE INSKEEP, host:
Global wheat prices hit a two-year high this week. Prices jumped mostly due to concerns that crops in Russia and Ukraine are getting scorched by the hot summer sun.
J. Schafer of Kansas Public Radio takes a look at what impact those high wheat prices might have in your local grocery store.
J. SCHAFER: A drought in Russia, Ukraine and other parts of Europe and Asia is taking a toll on the overseas wheat crop. In Canada, too much wet weather kept farmers from planting as much wheat as they wanted in the spring. And there's uncertainty about the quality and quantity of crops in other wheat exporting countries like Australia. All of this bad news is good news for U.S. wheat growers. The U.S. is the world's biggest wheat exporter.
Dan O'Brien is an agriculture economist at Kansas State University in Manhattan.
Mr. DAN O'BRIEN (Agriculture Economist, Kansas State University, Manhattan): Prior to this run-up in wheat prices, we were expecting an extremely poor price year for wheat. And the surprise has come in the form of major production problems off of these key wheat exporting countries around the world.
SCHAFER: During the past decade, wheat has typically traded in the range of $3 to 3.50 a bushel. Now, it's bringing about $6 a bushel - even more on the futures markets - and that's good news for the nation's exporters. But higher prices won't have that much of an effect on consumers, according to Bob Freeze, grain manager for Ag Partners Co-op in Hiawatha, Kansas.
Mr. BOB FREEZE (Grain Manager, Ag Partners Co-op): I think you could double the price of wheat, and it would raise the cost of a loaf of bread by two or three cents. There's more cost in packaging the loaf of bread than there is the wheat that's in the bread.
SCHAFER: Freeze says the cost of pasta, cereal and bread may inch upward at the supermarket, but only marginally.
For NPR News, I'm J. Schafer, in Lawrence, Kansas.