2012, another year of major food price hikes?

Monday, January 23, 2012 by: Ethan A. Huff, staff writer
Tags: 2012, food prices, inflation

(NaturalNews) Food commodity prices have been on the rise over the past two years, which means food retailers, vendors, and restauranteurs have had to figure out creative ways to absorb these added costs while still offering quality products that their customers can afford. But it looks like 2012 will be a definitive year where these costs are directly passed on to consumers, as a new survey indicates that most restaurants will be raising their menu prices this year.

Nation's Restaurant News (NRN) recently released its 2012 Restaurant Operators Survey, which includes data on pricing strategies from more than 150 restaurant respondents. The report explains that 67 percent of restauranteurs plan to raise their menu prices this year, while 64 percent say they will specifically raise their prices between one and three percent.

Of those who said they would raise their prices, 31 percent said they would raise them as high as six percent. And six percent of those who said they would raise their prices indicated that they would do so by more than six percent. Only two percent of respondents said they planned to lower their menu prices.

The United Nations Food and Agriculture Organization (FAO) reported recently that 2011 marked the highest global food prices on record, topping even the 2008 price spikes that led to shortages in rice and various other food items. So based on the time it takes for the 2011 price hikes to absorb into the economy, 2012 is shaping up to be an expensive year for food, no matter how you crunch the numbers.

According to the US Department of Agriculture (USDA), the overall inflation rate for food in most categories will not be as high as last year. However, an inflation rate is not the same as inflation itself, which means that prices for fruits, vegetables, cereals, and baked goods are all still expected to rise in 2012 by anywhere from three to four percent, even if this rate is less than last year's rate.

In response to the rising costs of food, restaurants' primary focus into the new year will be to improve "value pricing" options for customers, according to the NRN report. Restaurants will also work to improve food quality, use more local and seasonal food items, obtain lower-cost food items, and spice up their dishes with more flavor.

Sources for this article include:

http://nrn.com/article/outlook-2012-menu-prices-will-rise

http://www.un.org/apps/news/story.asp?NewsID=40925&Cr=food&Cr1=prices