Glacier FarmMedia COVID-19 & the Farm

Burnett on Markets: Home flour use soars during pandemic

chocolate chip cookies
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It is hard to miss the lack of flour in the grocery aisles lately as consumers stock up on the “essentials.” A number of stores are just rolling out the pallets of flour into the store and they are picked clean by the end of the day. The increased domestic use of flour does not necessarily mean that the increase is permanent, but it is a good sign for demand over the next few months.

The flour grind (wheat used to make flour) in Canada has averaged about three million tonnes over the past five years. There is a slight increase in flour production over time as population growth moves flour demand higher. In Canada, the primary wheat used to make flour is CWRS (Canada Western Red Spring), so the increase in flour production means CWRS use will follow suit. Mill demand for flour is somewhat seasonal with two peaks during the year. The first peak occurs during the summer — the hot dog and hamburger season. It is difficult to tell whether the epidemic will impact the June-to-August grilling/baseball season but it is likely safe to say that it will likely be off to a slower start than in previous years. The second season is the Christmas season, with mill runs peaking in November to supply the needs for all the baking consumed during Christmas.

What does this mean for wheat demand this crop year? Using the actual data to January of this crop year, domestic flour grind was 1.63 million tonnes, almost exactly the same as in the 2018-19 crop year. If we estimate that February grind was close to average and then put in an increase for the March through July period, the wheat total this marketing year will hit close to 3.4 million tonnes. This is an increase of 200,000 tonnes from last year. Increased mill demand is also being reported in the U.S., which should also help boost Canadian wheat exports south of the border.

One important question to be determined is if this current situation will result in long-term changes to customer demand. Will people continue to bake at home after this pandemic is over? It would be nice to see long-term demand from increased in-home use, but it is more likely that people will return to the world of convenience after this crisis is over. I hope not, but this is the most likely outcome.

— Bruce Burnett is director of weather and markets information for Glacier FarmMedia and for MarketsFarm, its premium subscription service.

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