Flour Prices Rise as Wheat Costs Increase

The price of flour and bread at U.S. grocery stores is rising, pushed higher in part by wheat prices nearing a 10-year high, bakers and industry sources said.

“It’s been a slow rise since the beginning of the year, but the last month to six weeks is when it’s really escalated,” said Michael Marcucci, chief executive of Alpha Baking Co. in Chicago. “We’re raising prices where we can.”

A winter drought in the Plains and a warm spring have caused wheat prices to skyrocket on fears that farmers will harvest a smaller-than-normal crop of the primary wheat used to make bread and rolls.

Combines have just started to harvest fields, but already bulk bakers’ flour has hit a 10-year high at 14.3 cents a pound, up from 13.1 cents earlier this month and 10.9 cents a year ago, according to weekly industry publication Milling & Baking News.

Flour prices at grocery stores have not risen nearly as much because of competition and retailer sales and promotions, industry sources said.

The average grocery store price for flour was 38 cents a pound for the first three months of the year, compared with 36 cents a year earlier, according to Information Resources Inc., a Chicago data firm.

A loaf of bread at the grocery store costs on average $1.85, compared with $1.76 a year earlier, the firm said.

The rise in flour prices may be a matter of pennies, but the 30% increase in the last year is costing Alpha Baking an extra $65,000 a week, Marcucci said.

“It’s a huge amount of money and prices don’t appear to be decreasing any time soon,” he said.