Hold The Bagel:Skyrocketing Flour Prices Force Price Increases

Okay, so you are thinking twice before you get in your car to run errands. The days of no fat grande lattes are behind you. Now, you learn you may have to give up your morning bagel. Orthonomics shares the sticker shock of seeing how fast the prices are rising from just two weeks ago.

My husband asked me to picked up frozen bagels. I went to Store 2 because they regularly price their store brand, kosher certified, frozen bagels at $1.00 a package. It isn't a great value, but keeping the husband happy is priceless. The new price, $1.50. That is a 50% price increase!

This is not fun. The Washington Post has a comprehensive article on why wheat prices have gone from cheap to "you gotta be kiddin."  In Emptying The Breadbasket, Dan Morgan reports :

...many farmers are cutting back on growing wheat in favor of more profitable, less disease-prone corn and soybeans for ethanol refineries and Asian consumers.

U.S. wheat yields per acre have increased little in two decades, partly because commercial seed companies have all but abandoned investments in improved varieties, preferring to focus on the more profitable corn and soybeans. Subtle warming changes in the climate and the recent availability of new plant varieties that thrive in cold, dry conditions have pushed the corn belt north and west.

In 1996, Congress gave a strong nudge to these changes by passing legislation allowing wheat growers for the first time to switch to other crops and still collect government subsidies. The result is that farmers received federal wheat payments last year on 15 million acres more than were planted.

Not only are these increased costs hitting consumers, they are hitting the restaurant industry and  they are hitting them hard. Most restaurants can't increase the costs of a meal to cover their increased costs and so they are doing what health experts wished they had done years ago, they are removing the iconoclastic super sized American Meal and replacing it with a normal portion.

Restaurants have been cutting back because of the higher prices that they have to pay. So ,the really huge portion that you may have received at a restaurant a few months ago may not be as large and the price may be the same or higher. This is not due to some altruistic health program for the customers. This is because restaurant suppliers and shippers have higher costs which means that the restaurants have higher costs and that means that when the food gets to you, it costs more as well.