Wheat prices have surged to a record, breaking through the $9 a bushel mark for the first time, fanning fears that the cost of bread will also increase.
The price of staple foods, such as bread and milk, may be going up
Prices have been driven higher because droughts in key crop regions including Australia have led to smaller harvests.
Demand, meanwhile, has grown, fuelled by new markets such as China and India.
As a result, the price of wheat rose as high as $9.1125 a bushel on US commodity markets. One bushel can make about 73 loaves of bread.
The surge in demand has seen the price of wheat double in value since April. There also is a danger that milk and meat price may rise as animal feed prices climb because of higher grain costs, analysts said.
Last month the US Department of Agriculture forecast global wheat supplies dropping to 26-year lows, and this forecast was expected to be revised lower later on Wednesday.
The gloomy outlook has been exacerbated by the Grains Council of Australia slashing production forecasts in the third-largest wheat exporter to 15 million tonnes after late summer droughts ruined the country's harvest.
Meanwhile, official figures from Canada warned that its stockpiles as of 31 July were 29% lower than a year ago at 6.8 million tonnes.
Analysts have warned that Canada's harvest could be the smallest ever by July next year.
As well as growing demand and weather problems, an increase in production of biofuels, which are made from crops such as wheat, has also helped amplify shortages.
US baker Sara Lee has warned that it would have to raise the price of its bread if wheat costs remained "north of" $8 a bushel.
This comes a week after a similar announcement from the owner of British bread brand Hovis Premier.