The price of milk rose by 25% in April from the pre-pandemic period, and that of bacon rose 35%, according to the specialist publication ocregister.com.
According to experts, consumers have so far been protected from the sheer burden of rising costs faced by producers, distributors and small businesses, such as restaurants.
About 18 months ago, a kilogram of chicken wings cost $ 4.7. Now it can cost up to $ 8.3 per kg. (For comparison, the price of a kilogram of chicken wings in Romania is 3 times lower, about 13 lei / kg, compared to over 39 lei, the equivalent of the US price, calculated at an exchange rate of 4.7 lei / dollar, according to BNR data).
Expenditures on cooking oil and flour have almost doubled in the last five months. But it’s not just about rising ingredient prices. Service costs have also risen. To cover expenses, restaurants have increased menu prices.
15 chicken wings cost $ 34
An order for 15 pieces of chicken wings, a dish at Sal and Mookie’s pizzeria, cost $ 13.95 before Covid appeared. Now, the cost of wings can vary so much that they are labeled “market price,” as some lobster restaurants do. At peak times, the menu price can be around $ 27.95, and Good estimates that the “real price” is closer to about $ 34. He is trying to decide whether to keep raising prices or to reduce the number of wings on the menu.
“I’ve never seen anything like what we see now,” said Good, who opened his own restaurant nearly 30 years ago.
The difference between the prices received by producers for their goods and those paid by regular customers at cash registers can be seen by comparing the indices of producer and consumer prices.
The CPI, a benchmark for measuring inflation, has risen. Consumer prices for food rose 9.4% in April from a year earlier, the highest increase since 1981, government figures show this month.
Record increases for chickens, fresh seafood and baby food.
But many food costs measured in PPI have accelerated faster than the CPI rate. In April, average wholesale food prices in the index rose 18% from a year earlier, according to government data released on May 12th. It was the largest 12-month increase in nearly five decades. Eggs increased by 220%, butter by 51%, fats and oils by 41% and flour by 40%, the National Restaurant Association said.
As early as April, the US Department of Agriculture raised its 2022 forecast for producer price inflation for most staple foods. Farm – level cooking oils and wheat are expected to grow by about 40% this year, compared with December forecasts of upwards of up to 5% and 4%, respectively.
“Inflation is higher than the US Government announces”
The outlook for higher food prices reflects a broader trend for the US economy.
“We can expect high inflation to be more persistent,” said Fernando Martin, assistant vice president of the Federal Reserve Bank of St. Louis. Louis.
In terms of food prices, the impact of the accumulated inflation will also come from the middle of the supply chain: distributors who store and deliver food to restaurants and other food service groups.
Independent distribution companies have higher costs for everything from fuel to equipment to labor, said Mark Allen, executive director of the International Association of Food Distributors.
“It’s higher than the government announces,” Allen said, adding that more distributors are likely to increase their rates because their margins are just 1% to 2%.
To cope with the rising costs, restaurants have already shifted some costs. Average menu prices in April rose 7.2 percent from a year earlier, the highest increase since 1981, according to the National Restaurant Association. Restaurants have had to reduce their portions.
And things could get worse as many restaurant chains and food retailers sign long-term supply contracts.
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