Wheat and Wheat Flour Prices Surge

Wheat prices at the farm level rose substantially in 2021, but the changes did not result in correspondingly higher prices for consumer products made from wheat. USDA’s Economic Research Service Monday reported cash wheat prices in Kansas City, Missouri—the market price that most closely reflects the prices mills pay for wheat—were up by more than 30 percent in 2021, from the same time in 2020. The Producer Price Index for flour milling—a measure of how wholesale flour prices change over time—also rose, registering an 18 percent year-on-year increase in 2021. In contrast, prices U.S. consumers paid for wheat-containing products, as measured by the Consumer Price Index, for cereal and bakery products, is projected up two percent. The year-to-year increase is below the overall inflation rate for 2021 and similar to the previous year’s gains. The data is in line with historical precedent in which commodity prices usually represent a small share of the consumer food dollar.