Increased wheat prices and the cost of bread. (Off the Wire).

Bakeries and retailers have recently announced that increased wheat prices will result in rises in the price of bread and other bakery products. The Agricultural Producers Association of Saskatchewan (APAS) has done an analysis to determine what effect increased wheat prices will have on the price of bread.

The September 26, 2002, Pool Return Outlook (PRO) published by the Canadian Wheat Board provides the price projections for Western Canadian milling wheat. For example. The price for No. 2, 13.5 per cent protein is projected to be 29 per cent or $2.34 per bushel higher than last year. This projected increase in wheat prices will result in a three-cent increase in the cost of the wheat in an average one-pound loaf of bread.

Consumers should be prepared to ask millers, bakers, and retailers what other factors resulted in any increase over and above the three cents per loaf.

Terry Hildebrandt, president of APAS, also points out that farmers have been producing milling wheat at a loss for the past several years. "The projected 2002 - 2003 prices will provide a marginal profit, only if normal grades and yields are obtained," says Hildebrandt. "Increased grain prices are bittersweet to those farmers who lost their crops this year due to drought and frost. In addition," reminds Hildebrandt, "because of the market price option cut to crop insurance in last spring's provincial budget, producers' claims will be paid based on last year's prices."

Comparison of the price of 2CWRS wheat going into a
one-pound loaf of bread

                                     2001         2002

Numbers of bushels in a loaf   0.01369863   0.01369863

Price of a bushel of wheat          $5.72        $8.06

Cost of wheat in a loaf of
 bread                              $0.08        $0.11

Please note: These prices reflect prices at port, which
is approximately the price millers pay for Canadian
milling wheat.