Wheat prices skyrocket 25% this week

IDAHO FALLS - The price of your bread could soon be going up. Prices on wheat have gone up 25% this week as drought and fires have devastated crops in eastern Europe and led to Russia banning the export of grain for the rest of the year. But local crops are better than average, so our farmers could gain from the situation.

A heatwave and drought in Russia have allowed fires to decimate Russia's wheat crop which accounts for a fourth of the world's wheat exports.

"The forecast based on this Russia situation right now... There's a potential for a lot of these crops to be burned," said University of Idaho Extension Educator Wayne Jones.

That forecast combined with Russia's decision to ban wheat exports until the end of the year have sky-rocketed wheat prices. Other countries have struggling crops too. Canadian wheat harvest will be down by about one third this year due to heavy rain during planting season. Low crop output globally means local farmers benefit.

"It would be great news for our local green growers, it would be wonderful news," said Jones.

That's a prediction based upon a recent scenario.

"Couple years ago we did see very high prices. Crops were a little poor in the southern hemisphere and we had good crops here, and prices went up," said Jones.

And even if prices don't go up, farmers appear to be in good shape.

"I think things will be a little better than average. Things were set back with the cool weather... The grain seemed to respond, wheat better than the barley. Barley took a hit it seems. It looks like we'll have a pretty crop of wheat and barley," said Jones.

But at this point nothing is set in stone, farmers are constantly dealing with unpredictable variables. Jones says Argentina's crop outlook is another factor which has yet to be determined.

Experts say wheat prices could also tumble quickly because the latest price hikes are largely due to hedge fund bets.

So if the fires in Russia burn less wheat than currently predicated, we may see prices drop quicker than they rose.

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• soar
• skyrocket
• russia
• canada
• argentina
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