Yesterday, wheat futures prices rose to $8.51 per bushel, the highest level in about nine years after reports of rain in Australia intensified concerns about wet conditions damaging what was forecast as a bumper wheat crop that was expected to replenish the shrinking world supply of the grain. While we often connect the price of wheat with the cost of bread, in reality, a bushel of wheat makes 42 one and a half pound loaves of bread, so it takes a considerable increase in the price of a bushel of wheat to significantly raise price of a loaf. For example, the average price of wheat for 2020 was $5.50 per bushel. So far this year, the average has been $6.91, so if this higher price of wheat holds through the end of the year, we might expect the price of a loaf of bread increasing by a cent and a half. The largest costs associated with bread come from flour and other ingredients, labor, transportation and grocery store markups.
The Creighton University Rural Main Street Index is compiled by Creighton University monthly by surveying bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. In November, the survey found that “Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the rural main street economy,” according to Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. He also pointed out that “USDA data shows that 2021 year-to-date agriculture exports are more than 23% above that for the same period in 2020. In addition, the survey found that farmland prices have increased for 15 straight months, which is positive for owners of farmland who depend on robust land values to support operating loans, but these increasing land values makes it tough for beginning farmers to purchase land. Another negative statistic the survey found is that rural main street has lost 2.5% of its non-farm employment, and that bank CEO expectations for the economy six months out sank for the fifth straight month to its lowest level since August of last year.
It’s time for an assessment of the cost of a traditional Thanksgiving meal. The American Farm Bureau Federation’s annual survey found that a classic Thanksgiving feast featuring turkey, side dishes and dessert for 10 people will cost $53.31. That’s less than $6.00 per person. This is an increase of $6.41 or 14% over last year’s average of $46.90. The part of the dinner with the largest increase in cost is the main event, the turkey, which up 24% over 2020. Other menu items that are significantly higher are frozen pie crusts and dinner rolls, cranberries and veggie tray items. Now if you’re a last minute shopper, as am I, you may be in luck, because according to the Farm Bureau, the average per-pound feature price for whole frozen turkeys was $1.07 for the week of Nov. 5-11 and 88 cents in the following week, ending November 18th. So procrastinators arise. Maybe grocery stores will have fire sales on turkeys this week. Anyway, have a great Thanksgiving.
Roman statesman, scholar and philosopher Marcus Tullius Cicero wrote, “A thankful heart is not only the greatest virtue, but the parent of all other virtues.”
