By Denise Richardson
A 50-pound bag of flour 18 months ago cost $12, according to Elena Doyle, owner of Elena's Sweet Indulgence at 281 Main St. in Oneonta.
But a bag last week cost $36, she said Monday, and the supplier has warned her to expect to pay $50 a bag by summertime.
``It's in scary mode,'' she said. ``The rising costs _ it's one of the biggest topics of our kitchen conversation.''
The cost of cereals and bakery products climbed at an annual rate of more than 9 percent last month, according to the Bureau of Labor Statistics, compared to a 4 percent rise in the overall Consumer Price Index during the past 12 months.
Doyle is among area business owners wrestling with rising costs of flour, which are pinching the profit margin. The increases nationally are tied to the cost of wheat, which affects the prices of baked goods such as bread, cookies and pizza.
Vincenzo Avanzato, owner of Italian Kitchen, said last week he raised pizza prices by between $2 and $3 because of the cost of flour. The least-expensive pizza now is $9 for a small, he said.
Avanzato said he paid about $35 last week for a 50-pound bag of flour, up from $11 a year ago. His supplier cautioned that the price could be $50 to $55 by the end of May, he said.
``It's increased the cost of doing business _ I can't absorb it,'' Avanzato said.
A business that does absorb such increases risks closing its doors in six months, he said.
Avanzato, who has been in business 35 years, said his last price increase was 11/2-to-two years ago. The price of pasta also has risen, he said, but that increase doesn't have as big an impact.
The higher pizza prices will cost Italian Kitchen a few customers, Avanzato said, but most understand the need to raise prices and that ``the whole country is changing.''
The costs of olive oil, fuel and electricity have gone up, he said, and some suppliers are adding drop-off charges,.
``We can't just blame it on flour,'' Avanzato said.
On the Chicago Board of Trade, wheat this year traded at a record high of $13.495 a bushel Feb. 27, and the costs of baked goods increased. In trading Monday, wheat for May delivery surged 32.5 cents to settle at $10.20 a bushel. Wheat fell below $10 a bushel last week for the first time since Feb. 13.
Demand for ethanol has farmers planting more corn to produce the fuel when they could be growing wheat, an Associated Press report said, and poor growing conditions last year affected the global wheat crop.
On Main Street in Oneonta, an increase last week of 25 cents or 50 cents on many items at Elena's Sweet Indulgence reflects higher costs in general, Doyle said, but it may not have been enough to stop the shrinking profit margin and continue producing the goods customers expect.
``We are a true, true scratch bakery,'' Doyle said.
The price for a pound of Italian cookies _ a handmade specialty made of flour, butter and almond paste _ increased last week from $12.95 to $13.95, she said. A 6-inch cake costing $18 brings a profit of $3.75.
Doyle said she hesitates to continue increasing prices, but since September, her weekly supply bill has gone up $500.
Two other area restaurant owners said they have been holding menu prices but won't be able too for long.
Louis Pesout, owner of the Delhi Diner at 95 Main St. in Delhi, said an average lunch check is about $7. Freihofer's supplies bread, and the cost of a loaf has been going up, though he didn't have figures immediately available.
``It's to the point where we're going to have to consider raising prices,'' Pesout said. ``It's cutting into the bottom line ... we can only absorb the cost for so long.''
Tina Cole, co-owner of T&T Country Kitchen at 139 Main St. in Jefferson, said higher bread and flour costs are part of higher prices for its menu, which advertises affordable breakfasts and lunch specials. Menu prices will be increased, she said, probably before summer, when tourists visit.
``We do rely on the local people,'' she said. ``And we really don't want to chase anyone away.''
