Midwest drought hurting restaurants
Posted at: 10/18/2012 6:36 AM
Restaurants are getting a taste of the Midwest drought.
It's driving up prices for corn, chicken and meat and restaurants are struggling to keep menu prices the same.
"Costs have gone up as far as corn and meat products. We're maintaining the same prices on our menu," said Daniel Kearns, with Ford's Garage in Fort Myers, Florida.
Restaurants are eating those costs. Some have seen inventory costs rise more than 10-percent.
The bad news is that officials with the food industry say the worst is yet to come.
"The problems are going to start next year maybe in the spring or early summer," Tim Mankin, owner of BurgerQue in Fort Myers.
It's those smaller restaurants that are getting hit the hardest.
"Everything has been affected. It's like a domino effect. Corn goes up, shrimp and grits - it's made from corn and the price would go up on that," said Cristof Danzi, owner of Cristof's.
Restaurants are doing everything they can to keep customers happy. Some of them are even revamping menus.
"I have raised prices selectively on a few items that I've had to. But we've tried to keep out basic prices the same so we can keep business coming in," Mankin said.
Other restaurant owners are reducing portions and considering downsizing staff.
But most owners we spoke with in Fort Myers said they are searching for more cost effective suppliers.
"We're going through our providers - seeing where we can get the best cost and trying to maintain same quality," said Kearns.
Analysts expect overall food costs to rise by as much as 20-percent by year's end - a price, restaurant owners say, will force them to change the menus.
"My biggest fear is other products will increase," Danzi said. "Then we have to take some action but so far we've been maintaining our budget."