Poor harvest and price spike for durum wheat threaten pasta supply

Dive Brief:

  • Poor harvests of durum wheat in Canada and Europe, along with increasing freight costs, have triggered a 90% price spike for the raw ingredient, according to data from Eurostar Commodities reported by Bakery and Snacks. Canada, which is the largest producer of durum wheat, is expected to only produce two-thirds, or 3.4 million tons, of its previously anticipated 5 million ton 2021 harvest.
  • This drop in production means there may not be enough to meet global demand for durum wheat, which is a main ingredient in pasta. Eurostar Commodities, a U.K.-based ingredients supplier, warned these increased costs will likely affect retail prices for finished products.
  • Durum wheat is used in pasta, polenta, pizza, couscous, breads and some bakery items. It is the second most cultivated variety of wheat after common wheat, and the latest crop to face price and supply constraints even as consumer demand grows thanks to an increase of at-home cooking during the pandemic.

Dive Insight:

Eurostar Commodities called the smaller harvest a “dire situation” for anyone that is reliant on durum wheat, saying consumers should expect shortages on supermarket shelves as well as potential substitutions of other flour varieties in pasta, such as soft wheat flour.

A range of manufacturers rely on durum wheat, including Italian pasta maker Barilla; Buitoni, for which private equity group Brynwood Partners owns the North American pasta business; Unilever, which owns Knorr; as well as TreeHouse Foods, which owns Skinner pasta and San Giorgio. Durum wheat is also used in bread and bakery applications. Regardless, manufacturers will need to consider whether to adapt recipes or pay higher prices for an ingredient that is scarce.

While substitution of durum wheat is a theoretical possibility, it may not be a practical one as other wheat varieties are also facing shortages. Red spring wheat is suffering the effects of an unpredictable climate. Widespread drought across the northern and western regions of the United States has resulted in the USDA predicting a 41% drop in production from 2020, the lowest level in more than 30 years, according to its 2021 Wheat Outlook. The agency projects a 22% drop in U.S. production of white wheat in 2021 and 2022.

Wheat is not the only crop to face shortages and price pressures due to pandemic-related supply chain issues and weather-related difficulties. Prices for corn and soybeans recently hit their highest level in eight years, The Wall Street Journal reported. In July, prices for Arabica coffee increased more than 30% over one week, according to Forbes. Overall, food prices rose 3.4% in July compared to the previous year, according to the U.S. Bureau of Labor Statistics.

Poor harvests for crops ranging from coffee to vegetables and the resulting supply issues and price increases have left manufacturers with choices including artificially limiting inventory to stretch stockpiles, and passing along price increases. Manufacturers choosing to push these inflationary pressures down the supply chain include Coca-Cola, Unilever, Nestlé, Mondelēz International and General Mills.

The price increases are happening as cooking and eating at home remain a popular choice. While passing along price increases has yet to substantially curtail demand, rising commodity and other costs remain a top concern among food and beverage industry executives, according to a recent survey by tax, audit and advisory firm Mazars USA. These higher costs are also on consumers’ radars, as more than four in five consumers said they had noticed price increases over the past month in a July study from Numerator.

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