The highest wheat price in U.S. history - more than $15 a bushel - was reached Thursday in Minneapolis as a trading frenzy inflames the grain markets, fans fears of spiking food costs and revives worries about food shortages.
With wheat stockpiles dwindling, a worldwide scramble is under way for bushels of high-protein spring wheat, the variety grown in Minnesota and the Dakotas and traded at the Minneapolis Grain Exchange. Already, spring wheat prices have tripled in the past year and are poised to move even higher.
"In my wildest dreams, six months ago I didn't see $15 wheat," said Ed Usset, grain-marketing specialist at the University of Minnesota.
Thursday's closing price of $15.23 a bushel may be jubilant news for wheat farmers and the rural Midwest, as the historic rally pushes corn and soybean prices near records, too. But it could mean new price shocks for consumers, and it already alarms food companies that need wheat for such consumer staples as bread, cereal, crackers and pasta.
In 2007, the rate of U.S. food inflation more than doubled to a 17-year high of 4.8 percent. Some expect that pace to nearly double again this year.
"We're projecting that food inflation in the U.S. is going to be 8 percent," said Mark Palmquist, executive vice president for the ag businesses of CHS, a farmer-owned cooperative based in Inver Grove Heights.
I'll say once again--buy storage food NOW. It is better than money in the bank in this situation.