Market Trends / Ingredients

Wheat farmers harvest record crop

Wheat farmers are harvesting a record crop for the fourth time in six years, adding to a global grain glut and cutting costs for food makers from Panera Bread Co. to Domino’s Pizza Inc.

Production will jump 7.7% to 711 million metric tons in the year ending May 30, the biggest expansion since 2009, the World Trade Organization said on Dec. 5. Reserves before next year’s harvest will increase 4%, implying a surplus, the U.S. Department of Agriculture says, raising its outlook by 2.4% from last month’s estimate. Societe Generale SA predicts that Chicago futures will drop 4.6%, to $6.10 a bushel by the second quarter.

Canada, Australia and Russia, the largest exporters after the U.S., increased their estimates for harvests this month. Wheat will join an expanding global agricultural glut as farmers reap record corn, soybean and rice crops. The International Grains Council said last week that output will keep rising through 2019. Cereal costs tracked by the United Nations fell 24% in the past year, more than any food group.

“Supply security is much improved,” reports Dan Basse, the Chicago-based president of AgResource Co., a research company. “There is plenty of supply, and world food prices should remain subdued for the next three to five years with normal weather.”

Wheat tumbled 18%, to $6.395 on the Chicago Board of Trade this year. It’s the third-worst performer after corn and coffee among the eight commodities in the Standard & Poor’s Agriculture Index, which fell 20%, and is heading for the biggest annual drop since 1998. The MSCI All-Country World Index of equities advanced 17% and the Bloomberg Treasury Bond Index lost 2.7%.

Inventories of wheat and feed grains, including corn, will climb to a four-year high of 379 million tons before the start of the 2014 harvest, 12% more than this year, according to the International Grains Council.

Yet even as global supplies increase, stockpiles are dropping in the U.S., where fields are still recovering from the 2012 drought, which was the worst since the 1930s. Inventories before next year’s harvest will drop to 547 million bushels (14.9 million tons), 2% less than a year earlier, according to a Bloomberg survey of 29 analysts.

Source: www.washpost.bloomberg.com

Did you enjoy this article? Click here to subscribe to Snack Food & Wholesale Bakery Magazine 

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

2014 Bakery of the Year: Capistrano's Wholesale Bakery, Phoenix AZ

Here’s a look at Capistrano’s Bakery, our 2014 Bakery of the Year.

11/7/13 2:00 pm EST

Food Plant of the Future: The Future of Wastewater Management

Available On-Demand Effective management of wastewater is becoming increasingly critical to food and beverage processors as the cost for incoming water increases...

Snack Food & Wholesale Bakery Magazine

Cover Image

2014 September

September's Snack Food & Wholesale Bakery publication features on defining whole -grain foods, as well as a special feature on the 2014 Bakery of the Year: Capistrano's Wholesale Bakery!

Table Of Contents Subscribe

Favorite Birthday Cake Flavor

September is the most popular birthday month, according to flavor expert McCormick & Co., which celebrates its 125th birthday this year. What’s your favorite birthday cake flavor?
View Results Poll Archive

THE SNACK AND BAKERY STORE

organic-production-&-food-q.gif
Organic Production and Food Quality: A Down to Earth Analysis

Effects of Organic Production on Food Quality is the first comprehensive book on how organic production methods influence the safety and quality of foods, based on an unbiased assessment of the latest scientific findings.  The title is a 'must-have' for everyone working within the food industry.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

The Weekly Mix

Operations Weekly Logo

Written by Snack Food & Wholesale Bakery editors, our Operations Weekly weekly enewsletter provides bakers and snack food manufacturers with up-to-the-minute news, ideas and industry trends.

Sign up today!

STAY CONNECTED

Facebook IconTwitter IconYoutube IconLinkedIn Icon