By MARSHA ANDER and JOSEPH KELLARD
Wheat stockpiles in the U.S. have hit a 30-year low, following seven years of worldwide consumption that has exceeded production. Federal projections show America's supply at its lowest levels since the 1940s.
While consumers can reduce their expenses by steering clear of wheat-related products, that's no consolation for local bagel shop and pizzeria owners, who must deal with skyrocketing expenses. Ana Martinez, owner of Life's A Bagel on West Park Avenue, said that about three months ago she paid $28 for 100 pounds of flour, and now the same amount costs her $58. She previously charged 60 cents a bagel, but now Martinez charges 85 cents.
"If I were to raise the prices according to what the prices have gone up for me," Martinez said, "I would have to charge $1.50 a bagel. I could charge more, but then people might not come in and buy anything."
Steve Perticone, owner of both East End Pizza and West End Pizza, said he buys flour in 50-pound bags that cost about $10.50 six months ago, but now go for a sobering $32.50. A slice of pizza that once went for $1.90 now costs $2.10 at the restaurants. "Pastas are up, too," Perticone added. "Anything that has to do with wheat, they just get you across the board with it."
Peter Rappa, owner of Broadway Gourmet Pizza and Pasta in Hewlett, said that he has raised the price of a slice by 15 cents and been forced to shop around for better wholesale prices. Small store owners like Rappa are having to pinch pennies to stay profitable. "Our business is flour, cheese and sauce," Rappa said, explaining that 50 pounds of cheese cost him less than $80 last year, but these days the price has climbed over $100.
Despite raising the price of his bagels 10 cents apiece and $1 per dozen, Mahmood Elsayed, owner of More than a Bagel in Hewlett, says he doubts he will make up the shortfall, and is considering increasing the price of the butter and cream cheese his customers spread on their bagels. He estimated that the rise in flour prices is responsible for his losing about $10,000 this year alone. Elsayed, who buys the dough for his bagels already formed, said it used to cost him 14 cents per bagel, but now he is paying 22 cents.
Making matters worse for some shop owners, the price of the natural gas they use to heat their ovens has nearly doubled over the past year. Rappa said he was paying about $500 per month, but is now receiving KeySpan bills for more than $800. That means 80 pizzas per month just to cover his gas bill. Perticone acknowledged that gas is one commodity with which there's little room to cut corners. "The ovens are always on, so there's no way to cut or save on that," he said. But like other shop owners, he also pays a gas surcharge for its delivery. "What gets us now is that all the companies charge you a delivery fee," he said. "They tack on $7 or $8 every time you get a delivery." Perticone noted that these costs factor into the price he pays for items such as oils, which have risen from $23.95 a case to $46.95, he said.
Richard Byrnes, who owns Bagels Plus in East Rockaway, said that the additional $5 per delivery may not seem like a huge burden, but shops that get two deliveries per week are spending an additional $520 yearly. That means that Byrnes, who sells a plain bagel for 90 cents, must produce 578 bagels just to cover those charges alone.
Anthony Vicari, owner of C&F Foods Company Inc. in Syosset, one of Rappa's suppliers, said that during his 50 years in business he has never seen wheat prices this high. "It's not just the wheat, it's everything," Vicari said, describing what is happening in the food industry as "a perfect storm." "All the wrong things happened at the same time," he explained, pointing to the devalued dollar, the high cost of dairy products, packaging and petroleum, and a drought in Australia.
Perticone said that his supplier tells him that farmers have been producing too much corn for ethanol and not enough wheat, causing its price to shoot up. "And supposedly they have contracts to sell wheat to Australia and other countries, so they're also exporting a lot of wheat," he said.
Vicari's company gets its wheat directly from General Mills, and he said that he recently received notice that there is a possibility of flour rationing, but that has not materialized. His advice to pizzerias and bagel stores is to raise prices aggressively now. "Their food prices have increased 40 percent in the last year," Vicari said.
Byrnes said that while his flour prices have tripled in a year, he won't cut back on quality and use cheaper products. "People aren't buying a dozen bagels, they're buying six or eight," he said, theorizing that his customers are holding on to their money these days.
Byrnes said that he and other shop owners hope the price spikes are just temporary. But he acknowledged that prices for raw products are fast to go up and slow to come down. "We'll never see $10 for a bag of flour again," said Byrnes, who now pays about $30.
He added that his steady customers initially had sticker shock. "They understand that we can't absorb the cost," Byrnes said. "They hear this on the news. It's not a secret."
Comments about this story? JKellard@liherald.com or (516) 569-4000 ext. 213.
