Growing pains

Wheat prices have surged to record highs as global supply has shrunk, and analysts are predicting that prices will remain high after smaller-than-expected harvests. Have farmers and milling companies altered their hedging strategies? By Ryan Davidson

Shoppers may well have noticed the cost of food has risen this year. After a long period of benign food price inflation, prices are on the way up, and that's largely down to wheat. Drought in some parts of the world and floods in others have blighted wheat harvests, even as global demand has soared due to increased consumption from developing countries and its use in the manufacture of biofuels.

While all this adds up to only a small amount extra on the cost of a loaf of bread, it is potentially