food prices

What can I say? We went through this in '98 I think. Same thing happened with butter the next year, or was it the same year? I don't know. You need to have enough cash to ride this through. I don't think the market can sustain these prices. Ask for different terms from your purveyor, and bid out your big items.

Good news this year is the extra tax break on equipment. I'd have a talk with your accountant and banker to see what you can come up with. Your diminished tax burden may offset your food cost.

Good luck

Kuan

In the last 5-6 months beef prices, here in Wisconsin have skyrocketed. I was paying $4.50 a pound for whole ribeyes, lip-on. Now it is over $8.50 a pound. My tenderloins, portion-controlled & cyrovacced where at about $17.50 per pound for CAB. Now it is almost $30.00. With jumps like these I have no choice but to raise my prices somewhat. I can't fully recuperate my loses but at least I can lessen the blow each time I sell a steak.

Beef Prices are Crazy!

I feel your pain, Pete.

Here in Louisiana our meat prices are similar to what you described. The hotel's restaurant increased prices, but we can't charge what we really need to. I do a lot of large banquets, and during the holiday season usually tons of steak parties, such as filet mignon for 300, 500, up to about 1200 people. Groups booking parties with us just don't seem to believe me when I tell them how much more their steak party will cost than years previous. During the summer and holidays meat always goes up, but this year is just insane. I tell them there are tons of cheaper options such as fresh fish, rack of pork, duck, etc., but everyone is sooooooo scared of not serving beef.

The cheap parties want chicken, the expensive parties want beef. Period. I wish people would let us help them expand their horizons a bit, especially in this time of beef crisis.

mike :rolleyes:

the high beef prices will continue for the near future. A couple of yrs ago, the meat market bottomed out so, ranchers cut back their stock to drive prices upwards. Not only is there a diminished supply but the animals going to slaughter are smaller so you need more ribeyes for example to do the job. We are also starting to feel the annual price rise on the cuts that get used alot during the holidays.

Personally, I'm pretty frustrated with food prices at this point! When I opened my business over 3 years ago, sales reps were always telling me how prices "fluctuate". Every time I would complain about something going up in price, they would say, "prices fluctuate because of market conditions." They never seemed to "fluctuate" to my benefit, though. "Fluctuate" always seemed to mean "rising prices". Finally, one of my reps (my best one) said if I exclusively used the company he worked for, he would lock me into a percentage and that would help my costs. I did, and it seemed to help for a little while. But then prices seemed to go up, up, up again. I have raised my prices a couple of times - always to the irrititation of my customers. And also disproportionately to inflation. I'm in trouble again with food cost, but I don't know what to do either at this point. If I raise prices again, I'm going to start losing customers - if I haven't already. If I don't, food cost will eventually sink me. How long should one expect to weather this storm?
RF

From Mary Ellen Burris at Wegmans Markets:


Stampeding Beef Prices

( 11-02-2003 )


Beef prices are soaring. The supply of cattle is not enough to meet the strong demand, and prices have hit records within the last month. Our Meat Group Manager, Kevin Magliato, describes it as 'the perfect storm.' Although the cattle industry is prone to boom-and-bust cycles that I remember well, this is different because demand is so strong, coupled with unusually tight supplies.

Supply: The cattle population has shrunk 7% since 1996, as low cattle prices forced ranchers to reduce herds. Then stubborn droughts for three years spread across the Plains states, making it hard to find grass for grazing, and driving feed costs up for the final stage when cattle are fattened on grain. Beef supplies tightened even more in May when the U.S. Department of Agriculture closed the border to Canadian cattle imports after a cow tested positive for mad cow disease; last year 8% of the beef consumed in the U.S. originated in Canada. Higher prices prompt ranchers to send lighter weight cattle to market and only 40% of them are grading out as USDA Choice vs the normal 60%. Ranchers are enjoying profitability they've never seen before, allowing them to recover from very lean years.

Demand: Beef on the menu is back in favor, with credit going to low carbohydrate, high protein diets and an improving economy that is apparently leading people to treat themselves to steaks. Also, with the Canadian border closed, other countries like Japan and South Korea switched their business to the U.S.

The outlook? Thanks to the long reproductive cycle of cattle, it will probably take two years before ranchers can expand their herds significantly. At Wegmans, our commitment to Consistent Low Prices has made us very reluctant to raise prices. Within the last month though, we've had to pass on some increases such as 30 cents/pound on ground beef, and costs are still going up. What can meat eaters do? Take a look at alternatives like pork and chicken that aren't increasing too much yet. And check out our 'perfect portions' in Keeps Fresh packaging. Smaller quantities cost less per package....could be good for you too, as you strive for healthy eating.

Are we screwing the Canucks? Aw! Shucks!!

Closing the border to Canadian beef is wrong for everybody except the cattle ranchers. Because of ONE cow, we all will pay millions, if not billions more in higher prices. Our current regime must owe a favor to cattle producers....or is it just punishing Canada for being too liberal?

hi chef

I´ve ben faceing the same thing here ...
but the most costlee thing ring now in fresh veg and fruit

lettes has gone frome 20 $ to 50 in mich
that just to name one that I can think of ....

P.S beef in hight right now but egg´s are cheap and so is seafood
:eek:

Here in NC we have noted the dramatic rise in food costs as well. In fact, pork is very popular here and we produce a lot of it, but we seem to pay about 20% more than people in other states do. The farmers tell me that they aren't getting any more. The sellers tell me that their profit has dropped.
The only solution that works for us is to watch the local grocer ad inserts and stock up on things we use a lot. Example: bought whole fryers the other day at the grocery store for .29/lb. From the food service, it is .80/lb. I have learned to cut up a chicken in about 25 seconds.
We do the same for ALL our meat. We are now buying as much at grocers as we do from vendors. The vendor reps shake their heads and ask me why I am not more loyal. I told them as long as I can get it from a grocer (who doesn't know me and doesn't care)at a better price who is being disloyal? They want my business then get your prices in line.

At the last local chefs associations dinner I heard rustelling of cattle mentioned a couple of times . I know for a fact that out here in the west that used to be a hanging offense but does anyone know if it is still used as a detrement to discourage us from obtaining pilfered beef ?
Just an option for those with nothing better to do late at night that is . :D

You're sure right about prices going thru the roof--produce prices are at least 30% higher on average, med eggs up from less than $15 a year ago to $32 last week, and don't even mention that @#$&* beef. Only bright spot is pork--$1.55 for boneless loins--but my customers will only eat so many pork chops.

I have to work from a set menu, so it's hard to compensate for high prices on certain items.

BubbaGourmet, I really liked your post! I found some cheese at a grocer one day (and several times later) that was cheaper than what my rep offered, and he was like, "well, it must be worse quality than ours". When I showed it to him and he could see it was the same quality, he looked sheepish. Then, he just seemed to be iritated at me for bringing it to his attention.

I've been looking at some of the more non-essential items on my invoices as well - stuff I don't order as often, anyway - and it's sad what I am being charged on some of it. Bleach is a good example. I could buy name brand bleach in the grocery store for less than I pay case price from my distributor! I'm not talking about Sam's Club prices, either (or as I like to call the Walmart empire, "Satanmart"). These are regular grocery store prices that can often beat my rep's prices.

RF

Rita;
Just went through it again yesterday. Wanted some bone- in pork loin roasts to turn into crown roast of pork. Food service rep wanted $4.99 lb. Showed him a grocery ad...1.77/lb. Had to spend a precious half hour explaining keeping food costs down. His response "so if another company comes in here and they are cheaper on everything...you'll buy from them?"
My response "Yes!"

Duh! The guy needs to tell a lie the size of Moby Dick to justify that one. $4.99 vs. $1.79.

Kuan

The truly saqd part is...HE doesn't get it!

well, like anybody I like to save money, but that doesn't mean that I'm willing to run all over town to do it. I'm also not willing to lug around a case of bleach in my car. Grocery stores have things called lost leaders a great price on something to get you in the store and who gets just that one thing? Hardly anybody thats who. Yes our suppliers prices are sometimes higher but they deliver. I'm assured of my pork loin coming in at the right temp. or it goes back. If there is a serious problem with the product who can I make a claim with? Not the grocery store, because there is no proff that I handled it right when I left the store. Now I'm not saying that It's not smart to shop but shop smartly. Buy from the professionals out there if your sales people aren't then maybe you should call the company and ask for another salesperson. Inquire about going on a buying program If your volume is enough all of the majors will jump through the hoops to make that happen so they get a bigger piece of your business. Even if you are a small operation there are things you can do. Alot has to do with being upfront with your salesman and asking for what you want. You will not always get the lowest price but hopefully you will get a fair price. remember your salesman is trying to make a living! One thing I tell all of my sales people is to make money on me - just don't make your mortgage. You have to pay for service and one way or another you do. One comment was about thing not used lot like bleach, if you don't use alot of it then what does it matter. My time is the most valuable thing I can control. My time has a value attached to it and i know that it isn't best used running all over town looking for the best price. Use your time wisely, spend some time with your sales people allow them to "partner" with you on the problem. If they are true salesman they may have a solution to your problem. Remember, they see probably 50 -60 different customers a week. Pick their brains they may have an answer. We all come to Cheftalk for different reasons - I come for the resources available to me here. Use your salesperson the same as a tool to be more efficiant in your jobs.

This is all verrrrry interesting, as I'm thinking of gearing up my catering biz!

Question for you, Bubba - what kind of quantity do you buy in at the grocery store - does it freak 'em out when you go in and clear the counter of chickens? Or do you let them know in advance you'll be coming in?

Actually, Marmalade, I DO generally check with them before going. Our store gets a truck 5 days a week so I can get them pretty readily. In point of fact...the distributor is more likely to be out things I want than the grocer.

I really get what fodigger is saying, and I have certainly gone with the convenience/efficiency thing many times - for the most part. It's hard to find time to shop around. Frankly, I don't have time to do it a lot of the time. And I have felt for the most part that my rep has been fair to me. He has to make a living, too, afterall. I certainly don't blame him for that.

But.... while I feel my rep is being fair to me, I'm still not entirely convinced that the company he works with is -or that all the people his co. buys from are. Possibly they are, but there is so much info that I don't have ready access to (it's just as hard to keep up with futures as it is grocery store prices, for example) - what they know or how they are choosing to price items, when they buy them, what they pay, etc. The company I use is listed on the stock market, afterall. Isn't it relatively safe to assume that they also trade in futures as well? It's a win-win situation for them. I mean, if you sell food you also bet on, how can you lose? Buy low, sell high, right?

I understand loss leaders, too, and how retail works. In fact, I understand that more than I do how big distributors do on many levels. Why is it that distributors never seem to have loss leaders?

And why is it that I can buy a perfectly good 5# ground beef tube at "last shelf day" prices (and use it in about 3 hours) from the grocery store at half the cost my distributor tries to send me an entire 40# case that expired last week? Don't even get me started on green onions - not where I come from.

I guess what I am trying to say is that I am not totally trusting of the products I receive from my distributor. Many times, I have to rifle through entire cases to make sure my product is acceptable. In my reps defense, I will say that he always replaces products that I am not happy with - no questions asked. But is it automatically good, just because it comes from a distributor? What about the stuff I can't see?

I dunno. Ask O'Charley's.

RF

Is there a distributor with a warehouse close enough to where you could pick stuff up at customer service if you can't meet minimums for delivery?

I don't remember how many eggs come in a case - I haven't used eggs in a while. I'm surprised no one would deliver such a large amount, though, or give you a decent price for using so much of one product.

Still, though, $1.35 a dozen is still just 11 cents an egg. Again, I don't use eggs in my business. Your place sounds like the kind of restaurant I want to go to and enjoy when I'm OFF work :) 11 cents doesn't seem that bad to me for food cost on a particular item, though. Is it possible that you need eggs to be so cheap because you are paying too much for something else? Is it possible that you could offset the increase in the price of eggs with a discount in some other item?

Just Thinkin'
RF

The problem is we're getting nickle and dimed on everything. That nickle on every egg is costing Chef Bob $90 a week. The extra I'm paying for hamburger patties only amounts to .23 per plate but $70 at the end of the week. Sysco lettuce was $40 today--where do I get the extra $50 the 2 cases I'll use this week will cost me? I'm holding my menu prices till spring, but if I see produce,beef and egg prices where they are right now, I'm looking at menu increases above 10%. In blue collar places like mine that's going to hurt big time!!!!!!!

robwill, you make a great point! Now how can we educate the public?

I MAY have one potential suggestion. Reality is that at some point in time, EVERY business has to raise prices. One advantage in the restaraunt biz is that you typically know it is coming in advance. Perhaps about 30 days before such an increase, you could put a notice in your menu explaining the need for such an increase, eg:
"Our Valued Customer;
Here at -restaurant name- it is our sincere wish to provide you with quality food products at affordable prices. To this end we have absorbed many price increases over the past year. Food costs have continued to climb with no end in sight and we are now forced to a decision. We can either lower the quality of our offering or implement a small price increase on all of our menu items. As we are committed to quality product, we are forced to raise prices a modest 5%. This increase will take effect on (date 30-60 days out).
We value your patronage and apologize for the necessity of this action"
Just a thought.