COMMODITY BREAD
Welcome to Commodity Bread — a newsletter about the food system, the economics behind it, and what it quietly tells us about so much else. This is a publication that’s data-forward, occasionally opinionated, and interested in the gap between how food is talked about and how it actually works.
So let’s get into it. And, naturally, we’ll start with bread.
CRUST ISSUES
🍞 The Bread Index as crystal ball
Bread is one of those things that sits at the exact center of what this newsletter is about. It is ancient and industrial, staple and symbol, made from commodities you can track on an exchange and sold in a category that has quietly become one of the better gauges of how much pressure the food system is under at any given moment.
A loaf of white bread cost about 50 cents a pound in 1980. By 2010 it was a closer to $1.40. It crossed two dollars for the first time in 2023. Those numbers don't move randomly. They move with shifting wheat harvest performance, energy price fluctuation, and interest rate changes made in Washington DC.
So it’s interesting to ask: what's in a loaf of bread? What does it cost to make one? And what do the last four decades of price data tell us about the system that produces it?
It helps you to know that the 2000 baseline was an unusually cheap moment.
Commodity markets had been in a long deflationary stretch, wheat prices were flat, the low-fat era had dinged butter demand, and US sugar policy was quietly keeping a price floor that most consumers never noticed. Then, in the mid-2000s, surging demand from a rapidly industrializing China helped trigger a commodity supercycle that repriced agricultural inputs across the board. None of the three ever fully retreated.
Each ingredient has its own specific story on top of that.
Bombs and bread. Flour tracks wheat, which spiked in 2007-08 on poor harvests and energy costs, then spiked again in 2021-22 on Ukraine war disruption.
Sweet ride. Sugar in the US is insulated from world markets by import quotas and price supports, so domestic prices were already elevated and stayed that way as transportation and energy costs rose.
Slipping away. Butter had the most dramatic arc. Its demand took a dip during the low-fat years, leaving prices near historic lows in 2000, and then the low-fat consensus fell apart. Global appetite for dairy fats grew, US butter went from surplus commodity to tight market, and it has never really come back down.
What the hell was happening in the 2010s? The answer is that it was the impact of a few converging forces.
Wheat commodity prices collapsed after a 2008 spike. The financial crisis dampened global demand, and a run of good harvests followed. That pushed wheat futures down sharply through 2009 and into the early 2010s. The raw ingredient cost that had driven bread prices up in 2008 unwound almost as fast as it arrived.
Easier days at the pump. Something to know about bread production is that it’s energy-intensive. It involves milling, baking, refrigerated distribution, all of which played right into tumbling oil prices around 2014 (thanks in part to a US shale boom). That alone cut input costs across the whole supply chain.
The retail wars heated up. Grocery retail was also under intense competitive pressure throughout the decade. There was Amazon and Walmart's expansion into groceries, the rise of Aldi and Lidl in certain US markets, and the general squeeze on food retail margins. Taken together, retailers and manufacturers had limited room to pass through even modest cost increases.
These conditions generally reversed after 2021, which is why the spike was so sharp.
A fifty-cent loaf is now a two-dollar loaf, and the distance between those two numbers contains more economic history than most people realize. It contains commodity cycles and geopolitical shocks, retail consolidation and dietary fashions, farm policy and central bank decisions. It contains the slow erosion of the food budget for households that were already stretched.
And it contains a question that this newsletter is going to keep asking: when the most basic thing on the table gets harder to afford, what does that tell us about everything else?
WELL STOCKED
The latest from Commodity Bread
Also on the site this week:
🛎️ A new food paradigm was coined — A professor in Spain in making the case for a new evolution in food: Post Digital Integrative Cuisine. (That’s a mouthful!)
🌽 The voters paying for this trade war — China's retaliation landed on soybeans, beef, sorghum, and corn. The map of who grows those things looks a lot like the 2024 electoral map.
🚜 OnlyFarms.gov is real, and it's not helping — The White House named its agriculture bailout site after a porn platform. The internet noticed. The farmers, less amused.
👴 America got older. The food industry didn't notice. — Adults over 50 control 53.5% of U.S. food spending. The industry stops targeting them at 49. Someone's math is off.
🛳️ The Strait of Hormuz isn't just an oil story — The energy coverage is wall-to-wall. The agricultural shock — fertilizer, packaging, shipping — is quieter and may be harder to unwind.
🍫 One market, many prices — Mondelēz got fined €337 million for charging different prices for the same chocolate bar in different EU countries. A useful window into how food markets actually work.
⚖️ The laws that were supposed to protect farmers are protecting something else — Right-to-farm laws were designed to keep suburban sprawl from suing farmers out of existence. They've been quietly repurposed.
🌳 The forests nobody is watching — Beef and soy get the headlines. Maize, rice, and cassava are clearing forests that no regulation is designed to see.
🥦 The organic question, 20 years later — Two new papers, twenty years of data, and an argument that still hasn't fully resolved itself.
Okay! That’s a wrap. Thanks for being here! If something in this issue made you think differently about what's in your grocery cart, that's exactly what this is about. Forward it to someone who'd appreciate it — and I’ll see you next time.