Meat prices rose sharply toward the end of 2013 as a result of a hit on the supply side. According to the U.S. Department of Agriculture, lower numbers of cattle herds and a dry spell in Texas resulted in a shortage in beef supplies. The department expects these prices to remain high because of the time it takes for cattle to be ready for slaughter. The increase in the cost of a key food item such as beef will affect restaurant stocks such as McDonald’s Corporation, Burger King Worldwide, Inc., Wendy’s Company, and Chipotle Mexican Grill, Inc.

Key Takeaways:

• While the latest Consumer Price Index (CPI) figures indicate prices more than 2 per cent lower than last year, Prestige Purchasing and CGA Strategy’s own Foodservice Price Index (FPI) has found that the foodservice sector is actually being faced with a 2 per cent rise.
• Restaurant, pub and hotel owners have already been warned to expect price rises for certain types of produce where supplies have not been able to meet demand, such as avocados, salmon, chocolate and coffee.
• Prestige Purchasing advises caterers to check contracts with suppliers and review any clauses that benchmark budgets to CPI to help counteract the price rises.

“Last month purchasing company Beacon also warned operators to expect prices rises of 15 per cent for prawns due to increased pressure on supply and extreme global weather conditions.”

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