Food wheat may become more expensive relative to feed wheat due to a protein shortage

The global market could face a shortage of high-protein wheat suitable for breadmaking in MY 2026/27. Lower nitrogen fertilizer use and early crop quality results in parts of Europe and Ukraine could limit the availability of such wheat, according to Commonwealth Bank of Australia economist Dennis Voznesenski.

Protein content is one of the key indicators determining how wheat is used: grain with sufficiently high quality and protein levels is classified as milling wheat and used for breadmaking, while wheat with lower quality parameters is generally used as feed wheat for livestock. A decline in high-protein wheat supplies could therefore widen milling wheat premiums over feed wheat.

One factor behind the potential shortage is reduced nitrogen fertilizer application due to high costs. StoneX estimates that US farmers may have cut nitrogen use by at least 5–10% this year. At the same time, narrow premiums for higher protein are reducing farmers’ incentive to produce high-protein wheat, encouraging them to switch to higher-yielding varieties with lower protein levels.

The trend is particularly evident in Canada. Market participants say price spreads between wheat containing 14.5%, 13.5% and 13% protein have narrowed in recent years, making it more profitable for growers to focus on yield. However, final crop quality in North America is still uncertain, while heat in the US could result in a smaller spring wheat crop but with higher protein content.

Analysts also note that millers are increasingly blending high-protein Canadian wheat with lower-protein grain, including supplies from Ukraine and Russia. However, if global high-protein wheat availability does decline, the price spread between milling and feed wheat could widen in MY 2026/27.

Tags: Bread, wheat, protein, global market, feed wheat