Wheat prices soar, Analyst say grain shortage is possible
Wheat is a very important grain used for healthy eating throughout the entire world. It is a highly demanded commodity, which can sometimes produce a shortage. In this article it becomes evident that because of such high demand for wheat grain, the price of the farmed good is also increasing.
Although other commodities such as energy, metals, and other agricultural crops have mostly declined in both demand and price, the Boston Globe states that wheat prices have begun to rise above $10 a bushel for the first time ever. This sharp rise in price is a definite area of concern for the United States. It could result in a grain shortage next year, which in turn would worsen the inflating food price altogether.
The dwindling wheat supply this year was directly linked to poor weather and climate conditions, mostly in Australia and Argentina. (Graph 3, second graph)Because of this, buyers are very concerned with accumulating and storing as much of the crop as possible at any cost. This enormous shortage can be seen through US exports. The United States wheat exports has already sold more than 90 percent of the 1.175 billion bushels the Department of Agriculture expects will be exported during the entire marketing year, which ends in June of 2008. (Graph 1, graph B)
Despite the $10 a bushel brink, consumers are not expected to see a sharp spike in grain products price just yet. Big supplying companies such as Kellogg Co., General Mills Inc., ConAgra Foods Inc., and Kraft Foods Inc., have all protected themselves from price precariousness with long-term supply contracts. With that being s ...