Knowledge Pantry, News

June 9, 2015

Price Hikes In The Future For Food Ingredients?

food-pricesThere’s been a lot of bad news on the ingredient front these days and most of it, unfortunately, seems to be pointing towards an increase in food costs.  As food entrepreneurs, that’s obviously key to our businesses so here are some of the things that has analysts nervous these days:

  • There seems to be no end in sight for the California drought and, given California’s contribution to the overall food market, could result in raised prices across the board.  This New York Times infographic does a great job of showing what some of the key crops and/or products coming out of California and how much water is used in their growth and/or production.
  • Folks have been buzzing about bees for some time but colony collapse is still happening and scientists haven’t yet figured out how to stop it.  This great graphic from the National Geographic Society helps explain the important role bees have in pollinating crops which is a keystone to American agriculture.  As just one example, without bees basically the entire $2.7B almond industry could be lost.
  • And then lastly, there’s now news that avian flu is hitting the US hard and has impacted more than 36 million birds in the US (which accounts for 12% of the industry).  This is leading to egg shortages and an increase of egg prices which are crucial for any baker and breakfast makers.  What’s not yet known is whether avian flu will also have an impact on chicken prices too which could dramatically increase costs for restaurants, food trucks, and fast food chains too.

Unfortunately, as a small food business there’s not much you can really do about these potential price increases when macro forces like this are at play.  But being aware of what’s happening now gives you time to look at your recipes and determine if you might need to revise your recipes or product offerings and, if so, how you might achieve that.

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