Hey all. I have a few things in my mind about what the new year hods in stock for us, but I was wondering what the rest of you though. If enough people give their input we can actually do a good job of predicting the future and it’s effects on the pizza industry. If you keep up on your blogs, you will see a lot of dooms day predictions, but I don’t think it really is that bad. Some things we can expect are:
-Gas prices will rise - They are low as hell today, but they wont reach the peaks of last year.
-Cheese prices will rise - China is eating more and more cheese, drinking more milk…
-Flour will blow through the roof - Anyone and everyone who made wheat last year planted semolina this year to capitalize on the price difference.
I also blogged about some of the failure predictions on my blog, but that post really wasn’t appropriate for these forums (feel free to read those as well, just click the link below).
Anyone else?
I try to keep a pretty close watch on the wheat fields to get a handle on the upcoming crop year. Last years flour issues were due mostly to failure of wheat harvests world wide. Much of this has corrected for the time being, so much of the world supply issue is diminished, but there is still a very tight carry over (world surplus). Also, due to a shortage of rice, much of the world’s rice eating cultures had changed over, to some extent, to consuming wheat, putting further demand on a strained crop, and you all know the story about bio-fuel crops and bio-fuel crop production. The reduction in wheat/flour prices this past 6-months has been due to the overall improvement in world wheat stocks (still very tight), and a very good harvest both here in the U.S. and Canada of both spring and winter wheat. Durham wheat (what semolina flour is typically made from) has been in high demand for pasta production due to the state of the economy. It is well recognized that when the economy is good, pasta production goes down, but when the economy sours, the demand for pasta rises significantly. Semolina flour can also be made from spring wheat, not a durham a variety, you may see this at the supermarket where it is identified by a darker, more gray like color. So, as long as we have a decent supply of spring wheats to draw from, we should continue to have a supply of durham flour to make our pastas. So, where are we right now? Winter wheat fields right now are pretty well devoid of snow cover and as such, they are highly prone to bare rooting caused by high winds and dessication. As you can imagine, this is not good for the crop, but it is still very early in the game, the winter wheat that we’re talking about will not be harvested until early this summer. Wheat is a highly durable plant and it can rebound to produce a bumper crop after being declared “brain dead”. Our past president once said of winter wheat that it must be killed at least four times during it’s growing season before it produces a bumper crop. So don’t count it out just yet. As for the spring wheat and durham crops, well, they won’t even be in the ground until late spring.
Tom Lehmann/The Dough Doctor
So… what exactly did that mean Tom? I based my prediction off the prices of semolina compared wheat and the knowledge (probably from one of your earlier posts) that they are both grown in the same fields. Then made the next not so difficult logical jump of thinking that since pizza guys (and gals) are having a hard time, farmers are having a worse time and would go for the $$ and plant durham.
I think you hinted the price would rise. How much? The price of my flour went up 6% last month.
Your flour price might have gone up 6% but overall, it should be significantly lower than it was in the late spring/early summer. Heck! Wheat prices right now, even after their modest gains over the past few weeks, are still just 40 to 50% of what they were back then. Flour prices should not vary too much for the next 6 to 8 weeks, but after that, speculation will rear it’s ugly head, and who knows what will happen. As for the semolina issue, the amount of spring wheat planted and the amount of semolina planted are to some extent controlled by forces greater than that of the farmer. It is controlled by release of seed for planting. You can’t plant seeds that you can’t buy. Also, as a credit to the American wheat farmer, most of them are just trying to make an honest living and pay their bills like the rest of us. I know many farmers here who could have planted corn (subsidized price) but instead opted to go for wheat (nothing subsidized or guaranteed) just because that’s what they have always done. I’m also seeing them releasing their stored wheat right now for $5.00 and change per bushel when they could have gotten $3.00 a bushel more for it (and not have had to store it) back in the late summer. The farmer looks at his stored wheat like the rest of us look at our 401K, sometimes we make money, sometimes we lose money, it’s all just a part of the game.
Tom Lehmann/The Dough Doctor