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Bread, baked goods prices surge as wheat shortage bites

·2-min read
Money and sourdough bread for sale
High wheat costs are pushing up the price of bakery items. (Source: Getty)

Shoppers may be seeing the price of bread and pies surge as sky-high wheat prices continue to drive up the cost of making wheat-based products.

National Baking Industry Association president Mark Dennien told ABC Radio manufacturers were battling the rising price of raw materials as well as rising energy costs and a boost to the minimum wage.

Dennien said small independent stores would be forced to increase their prices under the current conditions.

Victorian farmer and chair of GrainGrowers Brett Hosking said increased wheat prices were “absolutely” having an impact on Australian consumers.

Even before Russia invaded Ukraine, he said wheat supplies were tight due to tough seasons in America, Europe and Canada.

He said it wasn't “panic stations”, but prices were definitely elevated.

“Then [Russian President] Vladimir [Putin] sent his tanks over the border,” Hosking said.

“And that changed everything.”

This took out production from Ukraine and Russia, which together made up 25 per cent of the global trade in wheat, as well as large quantities of other commodities such as barley and oil seeds.

“This had a massive impact straight away,” Hosking said.

The conflict injected “a whole lot of volatility” into the marketplace, and pushed up wheat prices to as high as $100 a tonne.

He said Australian farmers were getting paid a little bit more for their wheat, with the amount farmers make out of a loaf of bread increasing to around 20 cents per 500g loaf of bread, from around 12-15 cents.

However, he said inflationary pressures were also eating into farm profits, with the cost of fuel, staff and energy all jacking up the cost of production.

“It's just compounding, so by the time we get to the actual loaf of bread, I'd imagine the increase would be more like 8-10 cents that the farmer is receiving,” Hosking said.

In good news for customers, Hosking said America's harvest had just started, which was already putting the brakes on global wheat prices.

He said prices were already dropping a bit, which “will provide a small amount of relief for that loaf of bread for consumers”.

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