WICHITA, Kan. - A paltry winter wheat harvest in the nation's breadbasket has driven up the cost of flour for consumers, with more price hikes feared as drought takes a growing toll on the nation's spring wheat crop as well.
Among those noticing the rising flour prices at the grocery store is Dale Eustace, a professor of grain science at Kansas State University. Eustace, who retired as the college's flour mill superintendent, said 25-pound bags of flour that had been running $9 or $10 before the winter wheat harvest are now $2 to $3 higher in price.
Not only is the raw ingredient more costly because of this season's short wheat crop and low stock carry-over from last year, but flour mills across the nation are having to scramble to find the classes of wheat their customers want to buy. The only bright spot is crop quality: Test weights and protein levels for winter wheat are both exceptionally good this year.
"It is kind of like the price of gas: It just keeps going up. … It is the same problem with flour. You got to have it, so people are going to keep buying it," Eustace said. "There is no substitute for it. They are going to have to tighten their belt a little bit or quit eating bread - and I don't know anybody who is going to do that."
Hard red winter wheat flour - the type of flour most commonly grown in Kansas, the nation's largest wheat producer - is used for making flour for breads. Kansas is also the nation's biggest flour milling state. Texas and Oklahoma, both major winter wheat growers, had dismal harvests this season. Winter wheat is planted in the fall and harvested in early summer.
Spring wheat types - grown primarily in more northern states where summers are not as harsh - are used to mill flour used to make pasta, cakes and other baked goods.
Eustace said he was buying winter wheat for the university's flour mill for $3.45 a bushel in November. The price has gone up at least $1.50 a bushel or more since, about a 40 percent rise in the cost of the mill's raw material.
At the Stafford County Flour Mills Co. in Hudson, Kan., President Alvin Brensing said harvest in the area was down about a third than what is normal. But the quality of the wheat - such as protein levels and test weights - was good. He was more worried about the price his mill was paying for it this season.
"Naturally flour is made out of wheat," Brensing said. "Whatever the price of wheat has an influence on the price of flour that you make - definitely."
He said consumers will notice the increase in flour prices, but he was not sure yet how much higher his company will price their own products.
"We haven't got it settled down yet," Brensing said. "We have to see what the competition is doing too."
Last month, the Agriculture Department forecast the Kansas wheat crop would come in at 291.4 million bushels. That would make the crop 23 percent smaller than last year's harvest. Nationwide, the agency predicted the winter wheat harvest would be 1.26 billion bushels, 16 percent below last year. The agency will revise those estimates Wednesday.
With the winter wheat harvest so poor, people in the industry were initially buoyed by the greater numbers of acres planted into spring wheat. The all-wheat planted acreage was up 1 percent from last year, with spring wheat acreage up 4 percent from a year ago, according to the latest count from the National Agricultural Statistics Service.
"The thing about the spring wheat crop is it continues to deteriorate because of the dry weather," said Mike Woolverton, a grain marketing economist at Kansas State University.
The majority of those declines have been in North Dakota and South Dakota.
"We have to watch the spring crop. It is at a critical place now," he said. "Even if some of these places get rain … they are going through what Kansas did in the early spring when it was so dry some parts of the state could never recover."
That is having an impact on wheat prices, which have recovered from harvest-time lows in the past 10 days and have broken through the $5 per bushel mark for July futures contracts, he said.
At grain elevators across Kansas, the shorter crop means fewer bushels to store and fewer bushels to market - hurting the bottom line of Kansas grain elevators, said Tom Tunnell, executive director of the Kansas Grain and Feed Association, the trade group representing elevators.
But recent moisture in some dry areas of Kansas have boosted prospects for fall crops such as corn, sorghum and soybeans, which will help grain elevators survive the short wheat crop.
That industry is also in better economic shape to withstand short crops because it has downsized and consolidated so much in the last 25 years.
"We have lived with shorter crops," tunnell said. "We will live with this one."
Posted in State-and-regional on Saturday, July 8, 2006 7:00 pm Updated: 9:57 am.
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