High Wheat Prices: What Are the Issues? (CRS Report for Congress)
| Release Date |
Feb. 29, 2008 |
| Report Number |
RS22824 |
| Report Type |
Report |
| Authors |
Randy Schnepf, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
Summary:
The U.S. Department of Agriculture (USDA) projects the U.S. season-average farm price (SAFP) received for all wheat in the 2007/08 marketing year (June to May) to be in the $6.45 to $6.85 per bushel range. The range midpoint exceeds the previous U.S. record of $4.55 (in 1995/96) by 46%. During the past 30 years, the all-wheat SAFP has stayed within a range of $2.42 to $4.55, while averaging $3.33 per bushel. USDA projects a replenishment of U.S. and global supplies in 2008 (assuming normal weather conditions) to moderate market prices in the latter half of 2008. However, prices are likely to exhibit substantial variability until global stock levels can be rebuilt.
The initial impetus for rising prices over the past year has been a 30-year low in global stocks following seven out of eight years in which global consumption exceeded production. However, in recent months several other factorsâincluding reluctance of traditional exporters to make further supplies available to international markets, strong international demand, the rapid growth in the demand for grains and oilseeds as feedstock for biofuels production, and USDA's announcement that last fall's winter-wheat plantings were less than expectedâhave contributed to a sharp rise in cash and futures contract prices, particularly for higher-protein wheat varieties. This report will be updated as events warrant.
