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GAILLAC, FRANCE - JULY 11: Wheat grows in a farmer's field July 11, 2007 near Gaillac, France. Wheat is one the main crops in the region. - 


Kai Ryssdal: Eight dollars 86 cents for a bushel of wheat might not sound like much, but when you're buying it by the ton, it adds up pretty fast.

Wheat prices hit a record high at the Chicago Board of Trade today. Ditto for futures contracts in other global markets. The immediate reason is bad weather for wheat growing now in western Europe, Australia and parts of the U.S.

But Marketplace's John Dimsdale reports there are longer-term trends that're going to keep wheat expensive for a while.

John Dimsdale: Just in the last couple days, India, Egypt and Iraq -- which normally grow their own wheat -- have placed big orders for imports. Meanwhile, hot winds in western Australia this week damaged that country's already dry fields.

The southern U.S. has suffered from two years of drought. And this year, there was too much rain in the southern plains states and western Europe. And with the growing use of corn and soybeans for transportation fuel, farmers are shifting cropland away from wheat.

Kansas State University's Mark Fowler says the scarcity of wheat is attracting speculators.

Mark Fowler: Investment funds are entering the grain commodity market as another vehicle to invest into. An influx of cash into the commodity markets is increasing the trading of grain.

The price of some pastas in Italy has risen 50 percent. German bread is up 20 percent.

Joe Sowers with the Wheat Growers Trade Association says right now, the wheat shortage is most acute in Europe.

Joe Sowers: You'll have to look at some of that happening here in the U.S. But I don't know if you've been to the grocery store -- you're just not seeing any price reaction as of yet, despite this literally year, almost going on two years of price increases, right?

One reason, Sowers says, the price of wheat is only a fraction of the total cost of bread or cereal. Eventually, he says, the high return for growing wheat will pull more farmers away from corn for ethanol.

He's predicting a good harvest of winter wheat next spring. In the meantime, brace yourself for some sticker shock in the bread aisle.

In Washington, I'm John Dimsdale for Marketplace.