There have been times in recent years when it seemed the word “tailwind” had simply been eliminated from the baking industry’s dictionary. Between lagging consumer demand, volatile and inflated ingredient markets and severe transportation challenges, the woes facing bakers at times appeared endless.
Against this background, it is worthwhile pausing to note how positively this same operating environment for bakers continues to turn. Prices of soybean oil fell 6% last week alone, pressured by a decision to allow biodiesel from Argentina to qualify under the Renewable Fuel Standard. Wheat futures prices tumbled to new recent lows, helping leave the standard patent flour price late in the week below $15 per hundredweight. This price, the lowest in about five years, was down 13% from the year’s start, down 19% from a year earlier and 37% under the 2011 peak. Meanwhile, consumer confidence has been bolstered by economic growth and the lowest gasoline prices in years. Transportation glitches to date this winter have been less severe than feared.
Wonderful as this ingredient market picture has turned, bakers face no shortage of challenges ranging from regulatory burdens to continued difficulties associated with consumer perceptions of grain-based foods. Chances for success in facing these headwinds, though, surely are enhanced in the more benign market environment currently being enjoyed.
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