Amid severe weather wreaking havoc in Texas, a positive was widespread snow cover blanketing the 2021 crop across most of the winter wheat states. The snow was especially welcome in the hard winter states, where the crop entered the winter months in sub-par condition and was considered more vulnerable than usual to severe cold. While the snow blanket across the Southwest was thin in certain spots, virtually the entire growing area had at least some protection from the cold.
Even absent crop damage, US Department of Agriculture forecasts increasingly were pointing to higher prices and tighter supplies ahead. In its February supply and demand forecasts, the USDA left its 2021 wheat carryover forecast unchanged from January at 836 million bus but raised its forecast for the average farm wheat price in 2020-21 by 15¢ a bu to $5, up 9% from 2019-20. At 836 million bus, the 2021 carryover would be 19% smaller than in 2020. At its Agricultural Outlook Forum Feb. 19, the Department said wheat supplies were likely to tighten more in 2021-22. Its initial forecast for the 2022 carryover was 698 million bus, down 17% from the 2021 forecast and the smallest since 590 million in 2014. The Department projected the average farm wheat price in 2021-22 at $5.50. In 2013-2014, the farm price was $6.87.
Ingredient prices have been climbing in recent months, and bakers are bracing for further cost headwinds as 2021 progresses. Bakers are anxious to find ways to sustain elevated levels of sales generated in 2020, but the risk of escalating input costs places extra importance on maintaining pricing discipline for baked foods in coming weeks and months.