Soaring prices of food hurt struggling eateries
DAYTON, Ohio — Restaurants, already hit hard by shutdowns due to the coronavirus, have had to battle with fluctuating commodity prices making some items difficult to find.
Paul Lee, who manages Flyboy’s Deli and whose mother and stepfather own the restaurant, said meat prices went up considerably in 2020.
“It was already pretty hard, because we were hit pretty hard by the shutdowns and all that,” Lee said. “Some beef prices went from $4 to $11 per pound. We were already experiencing about 40 percent to 50 percent less sales and at the same time meat prices went up like crazy ... it was one of the most difficult times.”
Overall food prices were up around 3.3 percent in 2020, compared to less than 2 percent in 2019 and 2018, according to the United States Department of Agriculture.
Meat prices rose by nearly 10 percent. Retail meat prices have been slow to decline following the highs reached at the onset of COVID-19, the USDA said.
Some categories of meat have continued to see monthly declines in prices; like beef and veal, which decreased 1.4 percent from August to September, 0.3 percent from September to October and 0.1 percent from October to November. Other meat categories have had both decreases and increases in price, like pork, which increased 0.9 percent from September to October and decreased 1.6 percent from October to November, according to the USDA.
“Some items were nearly impossible to get with the high price of everything,” Lee said.
Lee said the deli found different suppliers for out-of-stock items because they didn’t want to increase the prices of their menu and put the increased meat prices onto their customers.
Lee said along with meat prices, the prices for cleaning supplies and vinyl gloves went up. The price for a case of vinyl gloves that the restaurant uses daily climbed to $120 at one point, he said. That is nearly four times the normal price he paid for the gloves before the pandemic.
To-go boxes, hand sanitizer, masks and wipes were also hard to find in 2020.
Mark Jacobs, a supply management professor at the University of Dayton, said food prices are always volatile, but there was a unique mix of factors in 2020 that caused them to fluctuate like they did.
“Food prices are volatile all the time; the pandemic has exacerbated that to some degree,” Jacobs said.
At the beginning of the pandemic, when the large majority of restaurant dining was shut down, Jacobs said there was a shift from dining in restaurants to dining at home. This caused some restaurants to buy fewer items. Large suppliers, like Gordon Food Service and Cisco, had food “stuck” in the pipeline so prices dropped.
Then there was panic buying
of what Jacobs called seemingly random things that drove up prices of items like meat, toilet paper and cleaning supplies.
Meat packing plants closed because of coronavirus outbreaks in the plants, and the California wildfires and drought had an impact on the number of animals available for slaughter. There was a trade war with China, which had a major impact on soybeans and ripple effects across the food supply chain.
“We are interconnected from a commerce standpoint, but we’re also interconnected from an individual standpoint,” Jacobs said. “And we all need each other. That restaurant operator, it does them no good unless they can have customers. And the customers can’t patronize the restaurant unless they have jobs. And it just goes on and on and on.”
Lee at Flyboy’s said the deli is experiencing about a quarter fewer sales than before the pandemic started. Flyboy’s has set up DoorDash and other online pickup services, which Lee said has helped the restaurant.
“Right now we’re very fortunate to be staying alive and staying open,” Lee said. “If you’re OK supporting local, please do it. Hopefully more restaurants and bars can survive if we do that.”
Jacobs expects food prices to continue to fluctuate in 2021, but not so dramatically.
“There is volatility all the time; the coronavirus just amplified it the past nine months,” Jacobs said. “The volatility will continue (in 2021), but the swings are likely to be less extreme.”