You’ve probably have heard about California’s drought crisis. Even if you don’t live in California, as a restaurant operator, you will feel its effects.
The USDA has recently reported its Food Price Outlook for 2015 and 2016 and there are some important findings. It’s no surprise that many foods have increased in response to the Southwest drought as well as rainfall issues affecting Texas and Oklahoma. Notable price increases have appeared in beef and veal, which are now 10.9 percent higher year-over-year and 0.9 percent from May to June. The prices of pork, poultry, fats and oils have all increased, as well. The most volatile and significant price jump happens to be from the humble egg, partially due to the Avian Influenza outbreak, jumping from a whopping 17.8 percent from May to June.
At the same time, fresh fruits and vegetable prices showed a decrease in price in June.
With such volatility, it’s important to have a good strategy in supply chain management to help control your restaurant’s costs.
- Go Veggie-Heavy: Abundant portions of vegetables can help to increase perceived value (and add great color) in a plate, while contributing to favorable plate costs.
- Maintain Accurate Food Costs: With fluctuating commodity pricing, it’s important to keep and eye on actual food costs. Armed with this information, you can then decide if it’s necessary to increase prices.
- Watch Your Inventory: Pilferage is a common problem in restaurants. In addition to ensuring that team members take inventory in pairs (for accuracy and speed), meat-heavy concepts should invest in a meat cage to keep high-cost items—such as steaks—out of reach of hourly employees.
For full information on changes to food prices as well as CPI forecasts, visit the USDA website.
Cow photo credit: Tony Fischer CC by 2.0