What happens next depends on two countries: 1) Russia, which is battling raging forest fires caused by a record heat wave, and has temporarily banned wheat exports. And 2) the US, which supplies almost a third of the world’s wheat. American farmers have only weeks to decide whether to seed extra fields. The farmer who plants extra wheat stands to lose money if predictions of a shortage in Russia turn out to be false.
According to the WSJ, “Worries about a shortage [of wheat] already have sent grain prices soaring, threatening a potentially damaging bout of food inflation…. The high stakes in coming weeks show how thin the margin for error is in the global food supply. The appetites of many nations are growing, and they rely on international trade to sate it.”