First cheese...now flour!!!

When I received my food order from Roma today there was a nice little letter attached letting me know that flour will now be going up also due to the ethanol/corn situation. IT seems that more farmers are planting corn and less are planting wheat so now flour will be jumping at least $1 a bag in the very near future. Since I have only been in business a year I would like to here from the long timers…how much more can this industry take before it implodes! I’m trying hard to not raise my prices because of cheese but with the continued increases and now with the flour situation I am finding it hard but am afraid to raise my prices because I don’t want to lose any customers to Dominos and their 5-5-5 deals. Most of my customers won’t ditch but I’m afraid that some that ordered from D’s before I came along may go back if my pricing gets higher.

NY Charlie

Just wait to your four goes up 42% in one hit like ours did.

US excuse = ethanol/corn. Australia’s excuse = worst drought in history.

Everything that uses flour has gone up but not pizzas. I’m currently working on my new menu/prices.

It’s time customers accept and realise that we can’t absorb all these price increases. PJ, PH. Domino’s can’t afford to absorb them either so prices have to and will go up.

Dave

I just recieved an email telling me my flour will increase by $2 a bag. At first I was stunned, but then I realized it amounted to less than 4 cents per pizza. That 4 pennies plus the 37 pennies my cost increase for cheese per pizza was offset by the 50 cent increase that I just instituted on my menu. Percentages are a bit off, but overall profit is still the same.

I’m trying hard to not raise my prices because of cheese but with the continued increases and now with the flour situation I am finding it hard but am afraid to raise my prices because I don’t want to lose any customers to Dominos and their 5-5-5 deals. Most of my customers won’t ditch but I’m afraid that some that ordered from D’s before I came along may go back if my pricing gets higher.

FEAR…hmmm not a reason to raise prices. We took the plunge last Monday. Not a word has been spoken negatively about it.

Some of our regulars who eat everyday noticed and we told them “cheese is up 78% over last year, we held off as long as we could.” They really couldn’t care. Most don’t even notice.

I was afraid Sunday night, actually having anxiety about it and come Monday it wasn’t a big deal at all. We added some new items and most were real excited about them. Some menu items were so off target I was going to take them off the menu because I feared the huge price jump, after having a meeting with our staff they said put it on, if people want it they will pay… and you know what they were right.

I was worried the past few weeks about the increasing costs of cheese and now to hear about flour…I sit back thankful I am going to sail through and be fine.

Fear is a wierd thing…be confident in what you sell, the service you offer and raise your prices. People have lives outside our pizza places and really don’t care.

I’m afraid that everybody is in the same boat. The Kansas wheat harvest is well…lets just say it ain’t good. This puts pressure on the other wheat producing states to pick up the slack, in view of the record low carryover from last year, I really don’t thing this will happen, so hard red winter wheat will be/is in tight supply. Spring wheat won’t be ready to be harvested for some time yet, but the pressure is on it too. If there is any shortfall in spring wheat production (this is where we get our high protein flour from) prices will soar. World wide, it is beginning to look like there might be a shortage of wheat for the 2007 - 2008 year. With all of this, there is a lot of speculation in wheat prices and that means higher prices, but consider that a typical crust, 12-ounces of dough, contains only about 10-ounces of flour, so the actual cost per pizza crust will be on the order of 1.25 cents. A 5 or 10 cents increase in your pizza cost will be sufficient to cover youe actual costs even if the cost of flour doubles. The same might be said for cheese. If we look at a cheese price of $1.85 per pound, the cost for a 7-ounce portion is about $0.81 and with that same cheese now selling for $2.50 per pound the same 7-ounce portion would cost about $1.09, an increase in cost of $0.28 per pizza. I guess the point I’m trying to make is that if flour and cheese prices are getting the best of you it looks like a $0.35 price hike might be in order.
Tom Lehmann/The Dough Doctor

We have been warned that our typical food cost will rise by at least 10% as a whole by the end of the year . Cheese, flour and all protein, and various veg due to drought/flood.

Exactly right, and since so much of the corn production is going into ethanol production the cost of corn is way up as is the cost of feed stocks which go into the cattle producing the milk from which our cheese is made, as well as the cattle and hogs from which our meat toppings are made, so, if they already haven’t gone up for you, get ready for the next round of price increases in the form of our meat toppings. This whole thing is a vicious cycle and I don’t know where it will stop.
Tom Lehmann/The Dough Doctor