Global wheat prices have soared to multiyear highs as a heat wave sweeping across Europe and Asia slashes forecasts for this year’s harvest.
Chicago wheat futures hit three-year highs Thursday, while a key European benchmark topped a four-year high. The price of Paris-traded milling wheat has leapt 33% so far this year. That is already translating into more expensive animal feed in some regions and could eventually mean more expensive bread.
Hot temperatures and drought typically stunt the growth of cereals and reduce their quality. With this in mind, the U.S. Department of Agriculture has forecast that global wheat stockpiles will fall for the first time since 2013.
So far, most agricultural analysts say this wheat-stunting summer is an aberration. But the prospect of global warming has led some observers to predict an eventual shakeup for farming in parts of the world.
After years of over-supply, this year’s heat is hitting wheat yields in key growing areas like Russia, Ukraine, France and Britain, while also affecting the crop in Australia, China and other parts of Asia.
The U.K. has had its hottest summer in four decades, while parts of southern Europe are expected to break record temperatures this weekend and Beijing in June sweltered in the hottest weather in half a century.
