Figure 1. DecisionNext White Bread Index, February to June 2023
Figure 2. February and June 2023 Ingredients Cost for 1,000 lb Dough Batch
The DN White Bread Index is 108 (fig. 1) meaning that the aggregated input costs for a 1,000 lb batch of white bread is expected to be 8% higher in June ‘23 than in February ‘23, for a cost of $139.50 per batch (fig. 2).
The DecisionNext Transaction tool collects forecasts and fixed costs for each input into a fully customizable 1,000 lb bread dough batch. This box and whisker plot illustrates the forecasted aggregated input costs for this recipe for each month from February through June (fig. 3).
Figure 3. Box and Whiskers Plot Depicting a 1,000 lb Dough Batch Cost February – June
A box and whiskers plot can be used to measure the certainty (or more aptly, measure the uncertainty) associated with a forecast. After running over a million simulations, the DecisionNext system determines that 50% of those simulations fall within the box while 90% of the simulations fall between the whiskers for each given month.
June’s price is forecasted to be $139.50 per batch, and we are 90% certain that pricing level will fall within $5.65 above, or below that number (fig. 3).
The rising costs of wheat and oil inputs are the main contributors to the increasing costs of bread dough projected through the first half of 2023, tapering off in June. Note that in this example, we are only taking into account ingredient costs but labor, storage, margin, etc. can also be added to the system to track fully-loaded finished goods pricing.
To see more details around the raw material forecasts, hit the button below to schedule time with our industry experts who can walk your through our whole suite of commodity series
