Sacramento’s Mad Butcher Meat Company is a family-owned supplier for restaurants and even for food outlets at casinos throughout the region. And manager Kelly Shum knows firsthand the impact of inflation on the food scene.
She says there are large fluctuations in prices at the wholesale level, caused by a variety of factors, and in ways that are less-reliable than the baseline of estimated costs as her company knew them pre-pandemic.
“Now, it’s changing every week,” Shum said of food costs. “It’s so hard to keep up with it.”
The latest numbers from the U.S. Department of Agriculture echoed Shum’s experience: Food prices this summer are up as much as 12 percent over last year.
And for Sacramento-area restaurants, inflation issues are just the latest challenge in a series of recent set-backs. Shum says compounding COVID issues from the past couple of years have taken a major toll on the region’s smaller eateries.
“Our client list has gone down to half when it comes to the restaurants,” Shum said. “It got so overwhelming between pricing increases and labor shortages and increasing rents, as well, they’ve completely shut down.
“It’s just so hard to watch that.”
A taste of chicken inflation
Of all the variety of eateries in Sacramento, Shum says fried chicken restaurants — a popular niche within the scene, most notably the “Nashville hot” trend — are getting hit the hardest by inflation.
Chef Greg Desmangles is the culinary director for a group of three Sacramento restaurants that have made it through the pandemic, including one restaurant that features fried chicken: Bawk!
This hotspot on downtown’s R Street has had to deal with rising food prices, but Desmangles says his supplier, Mary’s Chicken in Fresno County, has been able to avoid some of the major price spikes seen in the industry.
“You can only do what you can do,” Desmangels said. “If you’re a chicken place, you gotta buy chicken.”
Ingredient inflation is just one of the issues hitting restaurants and driving up the cost of menu items. Rising rents, wages and energy prices also play a role.
Desmangles says his top concerns recently, even above inflation, are supply-chain shortages and the tight staffing market.
“People don’t want to pay for a 20-dollar burger, but then also want to complain that people aren’t being paid a living wage,” Desmangels said. “And it’s like, in this industry, we have to take in more so that we can pay more.”
A recent report from the California Restaurant Association indicates that food and labor costs are the main inflationary factors when it comes to restaurant menus. June saw a statewide jump of nearly 9% at full-service restaurants over the previous year.
Rising rice, but some encouraging news
One expert who tracks food cost trends is Daniel Sumner, a professor of agricultural economics at UC Davis. He says the recent spike in chicken prices is in-part caused by a labor shortage and also the rising price of feed.
But there is news that could be encouraging to restaurant owners. Sumner says two components of chicken feed might get cheaper in the coming months.
“It does look like we’re going to have a fairly big corn crop and a fairly big soybean crop this year,” Sumner said. “If that holds up, we would expect prices to sort of come back to normal.”
Also, a recent jump seen in egg prices, which was the result of an avian flu, is now leveling out.
Sumner says he’s seen rounds of food inflation multiple times, so this is nothing new. Despite having a sense of where individual commodities are headed, he hesitates to make too many predictions. However, he does see higher prices for at least one Sacramento-area crop: rice.
“I can tell you the price of rice is going to be higher throughout the year, that’s sort of baked into the fact they had to leave half the land idle here in the Sacramento Valley, so that’s a real problem,” Sumner said.
On the bargain side, California almonds are a good deal because of an oversupply issue.
Relief of any kind would be welcome news for restaurants still surviving on the brink. Energy costs are down from earlier this summer, and the same USDA report that details the recent inflationary pressures does hint there could be an easing of prices in the coming year.
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