When baker Anthony “Sonny” Orza was told recently by his flour source that it would cost $50 for a 100-pound bag of flour, he knew there would be tough times ahead for the industry.
The same amount of flour cost only $13.80 as recently as last summer, said Orza, the owner of The Bread Factory in New Rochelle.
It”™s a bottom-line commodity surge being felt from bread to bagels, with a Suffern and Monroe bagel maker now stockpiling poppy seeds because the price just keeps going up.
Orza, whose family has owned the bakery for nearly 100 years, said there is no telling when or if flour prices will stabilize.
“This is what we”™re up against,” he said. “A lot of the smaller guys will go out of business if this keeps up.”
Prices for flour and other grains and crops have increased sharply in recent months. There have been many possible reasons cited for this, including farmers in the Midwest not being able to grow on large swaths of conservation land. Several groups that lobby on behalf of various commodities industry have asked the U.S. Department of Agriculture to release farmers from some aspects of a federal conservation program that compensates growers for not farming on certain land.
To that end, the baking industry”™s lobbying group plans to organize a march on Capitol Hill this month to alert the federal government of the problem bakers are facing due to high-rising commodities costs and to ask the government to intervene.
The march is expected to draw participants ranging from small bakery owners to giants of the industry such as Sarah Lee and Kellogg.
“I am going to that march, it”™s important to get this issue out,” said Orza.
Others have cited America”™s shift of grains toward fuel production as another inflationary culprit.
In addition to the pinch consumers will face as retail bakers are forced to raise their prices on items such as bagels and bread to compensate, wholesalers and restaurants will also be facing touch decision, said Orza.
About 15 percent of his revenue comes from his retail store, but the rest is wholesale to restaurants, country clubs, and even sporting venues like Yankee Stadium.
“A lot of these places might stop buying if prices continue to go up,” he said. “They”™ll drop you like a hot potato.”
Also, regular shipments wholesalers like Orza make to mom-and-pop retail stores may start to decline, as those shops buy less or even go out of business.
“This whole industry could be in dire straits in a couple of months,” he said.
Steve Rapillo, owner of Tufo”™s Wholesale Foods on the Bronx side of the New Rochelle/Bronx border, said this is a “killer situation” for businesses right now.
“No one could ever anticipate a raw material quadrupling like this,” he said.
For Rapillo, it means making tough decisions on how much to charge for products. For his customers, it means deciding how much they want to buy.
“If I mark prices up, we lose sales because people will buy less and then volumes go down,” he said.
For Rapillo and others in his situation, this means careful thought goes into planning ahead and storing commodity.
“There”™s much less (crops) being planted so you want to stock up and store, but at the same time you don”™t want to overbuy,” he said.
Mark Fried, owner of c which has locations in Suffern and Monroe, is strictly a retailer, but has similar decisions to make.
As with many crops, the price of poppy seeds has risen dramatically, about one dollar per pound in six months, by Fried”™s estimation.
For that reason, he has bought a bulk amount and is storing it, since poppy seeds don”™t go bad.
“I”™ve got a two months supply put away,” he said.
He said bakery products “are still the best buy to have an enjoyable meal” but that could change if prices continue to rise.
“The little guys aren”™t going to be able to pay the bills if this keeps up,” he said.
