Oregon Public Broadcasting

Northwest farmers are expected to harvest a half million more acres of wheat this year than last. They’re hoping for continued record high prices brought on by a world-wide shortage of the grain. Richland correspondent Anna King reports.

The global wheat shortage is a classic supply and demand story.

The demand: India and China’s growing economies mean more people there can afford to gobble up increasing amounts of grain and meat.

The supply shortage: A nearly decade-long drought in Australia. And in the U.S., high demand for bio-fuel has pushed food crops aside. It’s all contributed to a wheat boom in the Pacific Northwest.

Jeffrey LaFrance, is a professor of economics at Washington State University. He says with more farmers growing wheat, less corn, barley, beans and hay will be harvested. But that’s not necessarily bad news.
 
Jeffrey LaFrance: "What it means for other crops is that their prices will probably go up too. There’s going to be some adjustment take place. Other crop prices will respond as demand and supply move in and out of balance."

Higher prices for wheat, barley and other crops won’t necessarily mean a hike in prices at the grocery store. LaFrance says wheat only counts for 10 to 20 cents of a loaf of bread that sells for a dollar.