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Rising wheat price hurts Omaha bakery, community at large

Posted at 5:47 AM, Mar 11, 2022

OMAHA, Neb. (KMTV) — The conflict in Europe is making already-high wheat prices even higher, impacting local businesses and potentially leaving more people in a position of food insecurity in our community.

At Orsi’s Italian Bakery and Pizzeria, they use 75 bags of flour a week. Lately, that comes with a hefty price tag.

"What we were paying for $10 and $12 a bag back in July are now $18.60 a bag, and the other is $19.55 a bag," said owner Jim Hall.

Wheat prices have been on the rise for several years according to Erkut Sönmez, an associate professor of supply chain management and analytics at UNL.

"We have been seeing significant disruptions on the production side, because of the availability of fresh water, and there’s a big scarcity now on fresh water," Sönmez said. "And drought has been a big problem in the last several years. We are seeing the effects of climate change.”

Sönmez says both climate change and COVID hurt the market, and now between Ukraine and Russia , the world is losing around 30% of its exported wheat.

"Losing these two sources together at the same time is creating a supply deficit that we can not really recover with the production of other countries," Sönmez said.

He says the United States grows enough wheat to supply domestically, but we will still see price increases.

“Other countries will be seeking to import from U.S., so that will increase prices in U.S.," Sönmez said. "So we are self-sufficient, but losing the global supplies increases the prices globally.”

Orsi’s has had to raise its prices to keep up. In its 103 years, that’s usually pennies or nickles: this time, it's half of a dollar.

"I was thinking, 'okay what do I do? I’ve never done this before this high,' " Hall said. "But I started looking and I said, 'I have to do it. The numbers are there.' ”

The rising price of wheat and other grains go beyond business, impacting food prices everywhere. Higher prices could leave more people unable to put food on their tables.

"We have a significant portion of the population food insecure; these are the households that may not have enough food to feed their entire family at times," Sömez said. "With COVID, with increasing prices, with food insecurity going up - there will be more and more families relying on food assistance programs.”

Food Bank of the Heartland estimates that 200,000 people in Nebraska and Eastern Iowa are food insecure. Last year they helped 10,418 Nebraska households and 13,061 Iowa households apply for SNAP benefits.

Sönmez says one thing consumers can do to help is not stockpile food.

"This kind of stockpiling behavior will create more waste of a resource that we are already not having much," Sönmez said.

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