Market Matters

Bread and Flour Demand Rises as Consumers Clear Grocery Store Shelves

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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For the past few weeks, I have noticed a more prevalent absence of flour at big-box and organic food stores. I am amazed at how many U.S. consumers have now became bread makers, when that has been a lost art for years. Even the bread machine craze had died down, as consumers wanted the convenience of buying a loaf of bread without all the mess and time it takes to bake it.

Speaking for myself, and likely other consumers, I normally buy flour mainly to bake cookies, maybe a pie or cake and very rarely to make bread. While I love the smell of fresh bread baking, I like the convenience of buying it from my grocer, where I also have a choice of different bread flavors.

I was chatting with a woman at my local organic store, and she pointed to the box of yeast packets next to the empty flour shelf. She smiled and said, "It appears some shoppers forgot the main ingredient. I wonder how many people buying up all the flour actually have ever made scratch bread."

Another way to look at this is that many consumers are simply going back to basics in this time of crisis, and the milling industry is scrambling to give them a hand.

Mike O'Dea, risk management consultant at INTL-FCStone, said one thing about the current strength in the winter wheat market is still this simple fact: "People are buying bread and flour products due to the lockdowns and eating at home."

O'Dea noted that hard red winter and soft red winter wheat are seeing a jump in spot demand. Hard red spring wheat, other than for blending or for pizza, is lagging behind. This fresh demand has caused the cash price to rise since the beginning of this month. As of March 25, the DTN National Hard Red Winter Wheat Index has gone up 45 cents since March 2, the DTN National Soft Red Winter Wheat Index has gone up 28 cents and the DTN National Spring Wheat Index has gone up 22 cents.

"Bread is a product that does not have a long shelf life, and the millers and bakers are running full time to meet that demand, as it is likely everyone will be eating sandwiches for the next few weeks," O'Dea said. "Talking to one of my flour mills, a baker they supply was making 14 kinds of bread a month ago, and now they are making three. Cheap pan bread and buns/rolls are what the market is looking for and also crackers."

If you are wondering what pan bread is, I can tell you that when I started trading wheat to flour mills earlier in my career, I understood it to be a basic bread of flour, yeast, water and salt. I say that because I was told by one of my milling customers to buy the book "Bakers' Bread" by Paul Richards. The customer told me it would enlighten me to the world of flour and every kind of bread there was and help me understand what he did with the wheat I sold him. That book is where I was introduced to the meaning of pan bread.

Another interesting fact about pan bread, according to Richards, is that "Pan-baked breads lack the flavor of hearth-baked breads, and that is why the addition of lard and sugar was resorted to to give it flavor." I no longer have my ragged hard copy of the book, but a copy of it is safely tucked away on my Kindle.

MILLING INDUSTRY REPRESENTATIVE RESPONDS

North American Millers' Association (NAMA), which represents millers of wheat, corn, oats and rye in the U.S. and Canada, said in a news release that it is actively monitoring the growing spread of the coronavirus, both internationally and domestically, and the impacts it will have on consumers and the food supply industry.

"We want you to know that our nation's food supply and supply chain, including the flour milling industry, is very strong and grain-millers will continue to work to supply our retail customers and consumers," NAMA stated in its news release. "The NAMA members, along with other food companies, and in collaboration with the White House Coronavirus Task Force, are working to ensure a consistent and reliable flow of safe, nutritious and affordable food, such as flour, to food manufacturers and retail locations throughout the country."

James McCarthy, NAMA president and CEO said: "Flour and other grain-based foods are staples and are essential, nutritious parts of the American diet, and millers are taking a comprehensive approach to ensure the consistent delivery of safe, nutritious and affordable flour and flour-based food products to consumers in the U.S. and throughout North America. The milling industry has faced emergencies and natural disasters before, and the milling industry will continue serving our communities each and every day."

NAMA made it clear that, even during this pandemic, the U.S. food system continues to adhere to the highest food safety and regulatory standards, which include high levels of sanitation, food safety testing and monitoring in food processing and handling environments.

"According to multiple public health agencies around the world, including the CDC, FDA, WHO and EFSA, coronaviruses are primarily spread from person-to-person, NOT via food," NAMA noted in the news release. "NAMA continues to work closely with food safety experts, public health officials, the White House Coronavirus Task Force and the U.S. Food and Drug Administration (FDA) to ensure the food production system remains safe and consistent."

"The health and safety of our member company employees is also a top priority," said NAMA. "Because of the nature of duties performed, most milling production workers do not work in continuous close proximity to one another. The milling industry is following CDC government guidance and taking additional steps to maximize the health and safety of our employees, including, employing social distancing procedures where applicable, providing additional health screening of employees, using additional safety gear and products, including masks, respirators and sanitizers, and increasing in the frequency of cleaning, deep cleaning and the use of anti-viral cleansers."

Like me, I am sure you are grateful for the entire food industry keeping our food safe and our grocery store shelves stocked in this time of crisis. In my opinion, that is one thing that can help ease the panic so many people may be feeling right now.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BE/AG)

Mary Kennedy

Mary Kennedy
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