Wheat Prices Soar. Are Bread Prices Next?

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Aug 9, 2010, 8:30:44 PM8/9/10

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Wheat Prices Soar. Are Bread Prices Next?
With wheat futures soaring to their highest level in two years, you could soon find yourself paying more for a loaf of bread at the local grocery store. The price of wheat has surged more than 80% from its seven-month low in June, rallying to its highest level since August 2008 this week, as Russia said it would ban grain exports until Dec. 1 due to a drought that has destroyed more than 20% of its wheat crop. Prices retreated Friday but still remain up 10% for the week. If prices resume their upward trajectory, you could wind up paying 25% to 30% more for a loaf of bread and at least 10% more for a pizza by the end of August or early September, said Darin Newsom, a senior analyst at Telvent DTN, an agriculture and commodities information company. That would translate into a price hike of as much as 90 cents more for a $3 loaf of bread, and a bump of $1.40 for a $14 pizza."Wheat is moving up so much, there's going to be a ripple affect on what we're seeing at stores and restaurants," said Newsom. "We haven't seen it play out yet, but we certainly will."