The Rising Price of Bread in the US - Essay Example

The price of white bread in the U.S continuously keeps recording increases with much of the reasons behind the growth attributed to changes in climatic change. For over the last century, changes in climatic changes globally continue to affect the production of wheat that in return affects the price of bread. The rise in climatic change recorded over the past one century signifies an increase of more than 0.6 degrees Celsius with new predictions by the intergovernmental panel that deals with climate predictions signifying presenting a prediction of an additional rise in a climatic change of around two to four degrees Celsius by the year 2100. The continuous climatic challenge impacts the food industry with the bread and other food products receiving the impact of the challenge. A current study further shows the validity of the concern signifying that the increasing temperatures will mostly lead to a decline in global wheat crop production (Covello, 2011). The specifics provided by the study indicate for a single degree Celsius increase in climatic change, the percentage of wheat crop lost stands at six percent. The increased temperature change serves as the cause of the increased price of bread in the U.S and signs of a further increase in the near future remain evident.

The increased price in bread possesses a significant impact on the demand of the commodity with the demand decreasing over time as prices increase. An assessment of the effects of increased temperature rise on the impact on wheat production remains ongoing for the past two decades with wheat comprising a significant twenty percent of the total calories consumed globally. The decrease in wheat production holds a negative impact on bread consumption and overall food production (Mill, 2012). In general economics, it is expected that whenever the price of a commodity increases, the demand for that commodity declines especially in situations where there exist substitute goods. The continuously increased price of wheat, therefore, affects the price of bread considering that the sale occurs in a perfectly competitive market with different competitors offering the same product. The significance of increased prices is evident with players in the market already quoting the challenges they experience in terms of reduced profits as a result of increased production costs and reduced purchase of the commodity. The graphical representation below shows the price changes of bread from 1981 to 2011in terms of dollars with the current price of white bread in the U.S averaging around $1.41 indicating continuous increment (Steve. (2012).

Addressing the issue will require the utilization of effective measures that will ensure the challenge of draught is put to an end. A study conducted by Nebraksha-Lincoln University found out that there is a need to change the processes of growing grain crops with wheat among the crops (Kiessel, 2015).