Wet Weather Buffaloes Bakers

June 2, 2011
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With the rainy weather preventing farmers from planting the wheat crop this spring and growers in the southern Plains and Western Europe dealing with drought that has cut output, bakers face soaring prices and must focus on cheaper items.

According to a recent article in the Wall Street Journal, some bakers may pay nearly 40% more than a year ago for a 50-lb. bag of flour. For some bakers, depending on their location, the specialty breads they made with cheese and fruit typically sold at farmers' markets are no more. Instead, they are baking more buns and putting off plans to hire more employees or buy new equipment.

The damp weather is keeping farmers from planting hard red spring wheat in Minnesota, North Dakota and parts of Canada. That is fueling specific concerns about global supplies of high-quality wheat that can be milled into bread flour.

Futures prices in late May heard red spring wheat hit the highest point in more than two and a half years at the MGEX in Minneapolis, where that variety of the grain is traded.

Conditions for planting spring wheat look weak heading into June, as rains are keeping fields soggy, according to meteorologists. Farmers in North Dakota, the biggest spring wheat-growing state, only planted 34% of the crop as of May 22, behind the five-year average of 85%.

The high prices give farmers plenty of reason to sow as much land as they can. But few think that the number of planted acres will expand 5% from last year to 14.4 million acres, as projected by the U.S. Department of Agriculture in March.

Source: www.online.wsj.com, ABA News Digest

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