Farmers should brace for best year ever: Analysts
Ben Lemphers/for metro edmonton
Prepare to be shelling out more dough at the bakery this year — and next year — while sweeping demand for wheat sends prices on a rocketing Prairie-style boom.
While grain growers will be basking in a demand for feed not seen in years, consumers will be paying the price on store shelves and bakeries.
Eric Haak, co-owner of the Sunrise and Bee Bell Bakery, says prices for cereal commodities have tended to rise seasonally, not on a steady rising trend.
"I’ve been in the industry for close to 30 years now and I’ve never seen anything like this happen," he said. "It’s not only wheat, but even shortenings have gone up by 60 per cent as well."
The price of wheat has soared over the past six months from roughly $9 to nearly $20 for a 20-kilogram bag, he said, causing bakeries to raise their prices.
"We’re having to totally review all of our pricing with our customers at least every three months now because of this," he said.
Even agricultural products like poppy seeds have become so expensive this year that his bakers have stopped making poppy seed muffins.
Analysts cite a growing middle class in Asia and China that has added more meat to their diets for creating a new demand for feed.
Meanwhile, an ongoing drought in Australian production areas has diminished supply while rising demand for biofuel crops like corn has limited the amount of land devoted to wheat production.
The rising demand and declining supply have created the perfect mix for a boom in prices, and some experts are predicting that Canadian wheat farmers are going to have the biggest year in their history — barring natural disasters that could wipe out their crops.
"And it takes about two years for the prices to recover, so I expect these prices to remain quite high for some time," Haak said.