A poor harvest of spring wheat and concern over the winter crop have pushed prices for the grain to their highest levels in years and signal more food inflation ahead.
Drought across the Northern Hemisphere is the main culprit. Strong demand around the world, snarled supply lines and rising costs of farm inputs, like fertilizer and fuel, are contributing.
Futures prices for hard-red spring wheat, which grows over summer on the northern Plains and is favored by bakers and pizza makers, this week hit their highest price on the Minneapolis Grain Exchange since the 2008 planting season. At $10.44 a bushel, spring wheat costs roughly twice what it did the past two autumns.
Prices for lower-quality but more widely grown winter varieties have also climbed. Soft-red winter wheat, priced in Chicago and used to feed animals and in processed foods, is up 28% from a year ago. The benchmark rose above $8 a bushel to its highest level since late 2012. Hard-red winter wheat, known as Kansas City wheat and used for flour, has added more than 40% since last November to a six-year high. In Paris, wheat prices made a record this week.
Further gains are likely in store, said Carsten Fritsch, a commodities analyst at Commerzbank AG . Wheat importers like Japan, Egypt and Saudi Arabia have been stocking up on the global staple with big orders. Meanwhile, poor growing conditions have reduced inventories among exporters—mainly the U.S., Canada and Russia—and diminished expectations for the next crop.
“There’s no sign yet that high prices are deterring buying,” Mr. Fritsch said.
The U.S. Agriculture Department says that domestic wheat stockpiles are down 18% from a year ago and at the lowest level since 2007. On-farm inventories have fallen to their lowest level in more than 50 years, which means much of this year’s crop has already been delivered to market. Production this year is expected to fall 10% below last year despite an uptick in the number of acres planted with wheat.
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Originally Posted by Dave Grubb
No toys in the toy box can make for unrequited farmers 
