Why The US May Continue To Face Issues With Its Wheat Supply

New data about the state of the American wheat crop suggests consumers should expect to keep seeing prices increase at the supermarket, especially in the bread aisle. According to a report from Reuters, a combination of a drought in Kansas and floods in North Dakota will impact both the winter and spring crops for a grain which is already in short supply world wide.

Reuters reported that Kansas, the U.S.'s number one wheat producing state, has had its winter crop diminished by at least 25% after a dry season left some fields scorched so badly that many farmers are considering not bothering to put the time and effort into harvesting portions of their land. A report from Time illustrated the point, noting that crop insurers were estimating some fields in Kansas would produce five or less bushels per acre, as opposed to their usual output of 35 to 40 bushels.

Meanwhile, farmers in Minnesota and North Dakota who had planned on increasing their spring wheat crops to fill the heightened demand, are struggling to get crops planted in fields which were flooded by an unusually wet winter and spring (via Reuters). Heavy rains and three feet of snowmelt after an unexpected blizzard in April have left farmers in North Dakota unable to plant even 10% of their summer crop by the end of May, when they usually have up to two-thirds of the seed in the ground, leading to plans to hopefully plant on more land in fall.

Global shortage looms

Unfortunately, the U.S. is not alone in its wheat problem. As Time notes, wheat is a hardy, versatile crop which grows around the world, so usually when one country has a shortage, others can help fill in. The past year, however, has seen difficulties for most of the world's major wheat producers. Canada is seeing the same issues as the U.S., while the EU is concerned about droughts and China saw massive flooding destroy crops in fall. Meanwhile, India saw a major heat wave damage crops this winter and has issued a ban on the export of most of its wheat through the end of 2022, even after pledging to help use its crops to help make up the deficit created by the war in Ukraine (per CNBC).

While Ukraine and Russia, who make up 30% of the world's wheat supply, are some of the only major wheat producers to not be impacted by severe weather, the ongoing war between the two nations has derailed most of the grain trade from the region, as Russia's markets are being sanctioned by much of the world and a Russian blockade and active conflict has slowed both exports and production within Ukraine (via BBC).

According to Reuters, prices for the staple commodity — which is needed for everything from bread, to pasta, to cake — have been at record highs since Russia's invasion of Ukraine in February, with Quartz reporting that prices have risen 48% since this time in 2021.