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Kai Ryssdal: The weather this summer has been extremely unkind to the Russian wheat crop. It's been badly damaged by a brutal heatwave and those wildfires. A couple of weeks ago, the government announced a ban on wheat exports -- giving up the cash in favor of keeping its people fed. The ban went into effect yesterday. Neighboring Ukraine has said it may follow suit. All of which has helped to push wheat prices up 50 percent so far this year. Same thing happened a couple of ago with the rice crop. But analysts are hoping things might turn out differently this time around.
April Dembosky reports.
April Dembosky: Rice crops were threatened by bad weather across Asia beginning in the fall of 2007. One country after another responded by effectively banning exports through hefty price hikes. Thailand, Vietnam and India all refused to sell rice for less than $1,000 a ton. What ensued was a world rice shortage, one the World Food Program called "the silent tsunami."
Analyst Jack Scoville watched the crisis from his desk at the Chicago Mercantile Exchange.
Jack Scoville: Everybody got panicky, especially the bureaucrats. So once one started to go, all of a sudden, everybody else got scared that they were going to have trouble feeding their people, and that's not really good when you're trying to run a country. Having people with full stomachs is usually a little better.
Scoville says politicians and traders learned a lesson watching the Asian crisis. He says big wheat exporters like the U.S., Australia and Canada are not likely to ban exports. And that will spur less panic buying.
Scoville: I think people are realizing that just because one major exporter is out for a year, that doesn't mean that I won't be able to get some wheat somewhere when I need it.
Global wheat supplies are much more plentiful now than all grains were a few years ago. Back then rice, wheat, corn and soybeans were all trading at record highs. But its a different economy today. Agricultural economist Daniel Sumner says speculators are tempered by a recession mindset.
Daniel Sumner: I don't foresee us having widespread commodity price increases going on like we had for the whole set of feed commodities a few years ago.
Even if wheat prices were to double, Sumner says he doesn't expect those costs to trickle down to products like bagels and pizza. That's because the cost of wheat is minimal compared to labor and transportation.
I'm April Dembosky for Marketplace.