Bread Prices to Remain the Same – Despite Poor Harvest

National news outlets have reported wheat prices will drive up the price of bread. With the economic impact of the Covid-19 crisis, consumers are likely to be more vigilant with their income.

But David Eudall, the AHDB head of market specialists for arable claims in the Farmers guardian that the price of wheat does not translate to the price of bread. In the interview he claims:

“Wheat prices have a much more direct and pronounced impact on flour, but the subsequent bakery production processes, ingredients, packaging, marketing and transportation mean that wheat isn’t directly related to the price of bread. We estimate that the value of wheat in an 800 gram loaf of bread stands at only 11 per cent.” 

Bread prices reduced in 2020 and while there has been much volatility in the wheat price, bread has not followed suit.

The increase from 10p to 12p of flour used in a loaf will make a big difference for the milling industry yet bakeries and supermarkets are expected to absorb the cost. 

The core cost drivers in wholesale bread are in production and transport. A rise in ingredient cost is unlikely to cause retailers to increase prices in a recession.

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