Food makers are heading into the wheat fields of Kansas this week to get an early read on the U.S. crop -- and possibly commodity costs in the months ahead, according to a report from CME Group.
In its latest newsletter, CME reports that General Mills Inc., Sara Lee Corp. and Nestle SA are expected to send employees to the nation's breadbasket as part of the state's annual crop tour. "They will join government officials, millers and members of the media in assessing the impact dry conditions have had on the Kansas wheat crop."
CME reports that "a record number of people are expected to join the tour as worries grow about the impact a poor harvest could have on wheat prices". That was according to Ben Handcock, executive vice president of the Wheat Quality Council, an industry group that sponsors the tour.
Kansas last year grew 16% of the country's wheat and is the top U.S. producer of hard red winter wheat, the variety milled into flour for bread. Prices for hard red winter wheat have nearly doubled since last summer on concerns about low supplies. Costs could surge further for food makers and restaurants alike if the Kansas crop looks worse than expected, says the CME report.
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