Wheat prices likely to remain at high levels

An unfortunate series of events has led to historically high prices for wheat. The combination of geopolitics, impacting both the supply of wheat and its inputs, as well as increasing occurrences of extreme weather, have created the perfect storm. These headwinds are not likely to weaken in 2023. As a consequence, wheat prices likely will remain high in the coming months.

In March 2022, wheat prices rose to an unprecedented price level of more than 12 US dollars per bushel (Trading Economics, 2022). The re-emergence of war in Europe had given rise to uncertainty within many supply chains, food and agriculture included. Suddenly, 28 percent of worldwide wheat exports were at risk (FAO, 2022). This potential drop in supply constituted a major challenge to a wheat supply chain that was already under stress. Rising fuel and fertilizer prices and a…