Local restaurants and on-campus eateries are feeling the crunch from growing grain prices and, as a result, many are being forced to pass the cost onto consumers.
In the past four months, many agricultural commodities, including wheat, corn, rice and soybeans, have seen dramatic price increases worldwide. Unfavorable growing weather, among other reasons, has led many countries to increase limits and taxes on wheat exports to keep domestic prices down. According to the New York Times, the world’s wheat stocks have fallen to the lowest levels in 30 years.
Following this trend, the global elevation of wheat cost has trickled down to local restaurants like Bagel Café, McMaster’s Steak & Hoagie and Nicoletti’s, where owners were forced to consider price hikes.
According to Bagel Café partner and manager Wes Hensley, the restaurant has had to raise prices in order to keep even with wheat price hikes. Hensley said the flour particularly suited for his bagels was most directly affected – a concept he tried to explain to hungry customers through a small, apologetic sign taped onto his bagel display.
“The kind of flour that people use to make bagels has actually gone up the most,” Hensley said. “It went up about 70 percent in a really short period. We’ve had to raise prices because of the rising prices of wheat.”
Hensley also said that if the cost continues to rise, his prices would likely increase yet again.
“If wheat keeps going up, we’ll have to raise prices again,” Hensley said.
On campus, the price of bagels at Nicoletti’s have risen from $.99 to $1.15 – a small change employee Michelle Rodriguez said customers have been vocal about.
“A lot of regular customers have complained about increased price,” Rodriguez said. “We have to go through the ordeal and explain about the shortage of food and the rising cost of transportation, and I guess they comprehend that it’s out of our control and it’s the economy.”
Rodriguez, a second-year chemistry major, said some people are more bothered than others. One regular, fretting over the economy in general to Rodriguez, told her “even my morning bagel is ruined.”
Still, some vendors were less reactive to the rising costs. George McMaster, owner of McMaster’s Steak & Hoagie, said that while his restaurant has seen a dramatic rise in its wheat cost, he has kept prices the same in order to keep his customers happy.
“We haven’t raised prices,” McMaster said. “We’re trying to hold the line and keep the prices the same until the end of the quarter.”
According to Colin Carter, a UC Davis agricultural & resource economics professor, corn’s subsidized use for ethanol fuel has lured farmers out of the wheat and soy markets and into more lucrative corn farming. As wheat supplies become scarcer, Carter said, prices begin to rise.
“Ethanol subsidies have had a significant impact on the corn industry,” Carter said. “Farmers shift acres to corn and out of wheat and soybeans. There have been no significant yield improvements.”
Furthermore, Carter said the moratorium against genetically modified crops has kept wheat supply and production low. Genetic modifications increase crop yield by building herbicide tolerance and helping repel harmful insects. However, according to Carter, public opinion is stacked against modifying the grain because of its ubiquity in the food market.
“There is quite a bit of opposition to genetically modified wheat because it’s a food,” Carter said.
Despite recent price spikes, Carter said that because the cost of a commodity is linked to so many factors, its future remains mostly uncertain.
“It’s very risky to predict,” Carter said.