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LOOK AHEAD: NAVIGATING US BAKERY COMMODITY MARKETS IN 2026 – FOCUS ON BREADS AND SWEET GOODS
Sugar – Relief for Sweet Goods After Years of Highs
The US sugar program continues to shield domestic users from the global surplus. November WASDE holds 2025/26 US production at 9.47 million short tons raw value (STRV):
• Beet sugar: 5.211 million STRV • Florida cane: record 4.108 million STRV
• Imports: only 2.313 million STRV due to tight Mexico quotas and high Tier-2 tariffs
Look Ahead: Navigating US Bakery Commodity Markets in 2026 – Focus on Breads and Sweet Goods
Jeff Gholson, EVP Procurement, Rise Baking Company, LLC
The US bakery industry remains a cornerstone of the food sector, with breads (loaves, rolls, buns, bagels, and tortillas) and sweet goods (cakes, donuts, cookies, muffins, and pastries) together accounting for more than 85% of total bakery sales. Beneath what is expected to be steady growth, commodity costs will remain the primary profit driver for US bakers.
This outlook draws on the November 2025 USDA WASDE, ERS Food Price Outlook, and the latest industry forecasts to highlight what US bakers can expect in 2026 for the key ingredients that matter most to breads and sweet goods: wheat/flour, sugar, butter, eggs, and vegetable oils.
The US Economic & Policy Context
The USDA Economic Research Service projects US real GDP growth of 2.0% in 2026, with food-at-home inflation at 2.3% (range -0.5% to +5.2%). Foodservice inflation is expected to run slightly hotter at 3.8%, continuing to pull volume away from retail breads and toward foodservice sweet goods. Potential new tariffs and the ongoing USMCA review remain the biggest policy wildcards; even modest 10–25% tariffs on non-USMCA imports would have limited direct impact on bakery inputs (since most are domestically produced or sourced from Canada/Mexico) but could raise freight and packaging costs.
Wheat & Flour – The Backbone of US Breads
The November 2025 WASDE increased the 2025/26 US all-wheat crop estimate to 1.985 billion bushels — one of the largest on record — on record yields per acre. Ending stocks are expected to rise to around 900 million bushels, keeping farm-gate wheat prices subdued through most of 2026.
Total supply at 14.121 million STRV with a comfortable 15% stocks- to-use ratio. Midwest refined beet prices are currently quoted mid-40’s¢/lb and are expected to stay in that band through 2026 unless policy changes.
For makers of cookies, donuts, cakes, and sweet rolls, this is the first multi-year period of genuine price relief since 2020–2021.
Butter & Eggs – Mostly Downward Pressure
Butter: Record US milk production of 234.3 billion pounds in 2026 and growing cream supplies drive the 2026 wholesale block price forecast down another 2-5% from already-soft 2025 levels. This is welcome news for laminated doughs, buttercreams, and rich sweet goods.
Eggs: After the 2025 HPAI outbreaks, shell-egg and breaking-stock supplies are rebuilding. USDA projects a 2–3% increase in table- egg production in 2026, keeping large Midwest breaker prices in the $1.60–$2.00/dozen range most of the year, with the usual seasonal spikes possible if new outbreaks occur.
Vegetable Oils: Soybean and Palm – Stable Supply for Shortenings
Frying oils and shortenings in donuts, pie crusts, and laminated breads rely on soybean and palm oils. November WASDE projects 2025/26 US soybean oil production steady at 30.15 billion pounds, with supply at 32.28 billion pounds and domestic food/feed use at 14.15 billion pounds (up slightly on biofuel competition easing). Ending stocks build to 1.73 billion pounds, supporting prices at a flat 53 cents per pound—down from 2025 averages.
Palm oil, used for cost-effective shortenings, faces upward pressure from Indonesian biofuel mandates. Prices are forecast to rise in early 2026 to $1,100+/MT, from 2025 averages around $1,000/MT, before stabilizing at $980–$1,050 through mid-year. US importers will see cost hikes, nudging shortening blends higher.
WHAT’S IN STORE | 2026 © 2026 International Dairy Deli Bakery Association
Industry Landscape
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