Wheat prices have soared on the news of Russia attacking Ukraine, but they were already rising due to ongoing droughts around the world.
Earlier this month, the US Department of Agriculture (USDA) projected (pdf) that global wheat supplies will shrink in the 2021 to 2022 season, with stock falling by 1.1 million tons to 1.07 million. At the same time, consumption is expected to increase. The majority of production decreases are in the Middle East, where both Iraq and Syria’s supply are reduced due to prolonged dry conditions. Syria is also facing an ongoing civil war. Meanwhile, in the US, which is the world’s third-largest exporter of wheat, harvests have been hit hard by severe drought across the US Plains region.
Wheat is a versatile commodity, used for pantry staples from bread to pasta to breakfast cereal. In November, pasta makers in Italy were fretting over the potential of a durum wheat shortage due to harvest setbacks. The escalating crisis in Ukraine could worsen conditions, and Italian pasta producers have already reported shipment issues.
Blame bad weather for expensive coffee and pasta.
Severe weather has affected food production around the world. In Paraguay corn has been hit by extreme heat and dryness. Droughts in Argentina, Brazil, and Paraguay are reducing soybean supplies.
Meanwhile, coffee production in Colombia and Brazil, which are major coffee growers, has also been fallen. Droughts, followed by severe frosts, cut production Brazil, while La Niña brought heavy rains to Colombia. Arabica coffee reserves have fallen to the lowest level of inventory since February 2000, driving prices up.
Wealthier countries are more likely able to cover the higher costs—and pass them on to consumers. The US increased coffee imports last year at higher prices.
Those higher prices are showing up on menus and in grocery stores thanks in part to bad weather. In January, year-over-year inflation for food prices in the US reached 7%, the highest level since the 1980s. Globally, food prices are at least at a 10-year high.