Food establishments are used to rising food costs, but 2014 and 2015 have been particularly challenging.
A series of events — the nation’s worst avian flu outbreak, a spike in diesel prices that drove up transportation costs, droughts in California, Texas and Oklahoma — have affected the prices of everything from eggs to beef.
According to figures from the U.S. Department of Agriculture, egg prices increased 9.2 percent from July to August and are now 35.3 percent higher than August 2014 levels.
At a restaurant like The Aviary, which serves crepes, makes French pastries and does a bustling brunch business, the hike hurts.
“Across the board, eggs and dairy are skyrocketing. Eggs have almost doubled. Milk-based products have gone up 18 to 30 percent in the past year. Bacon has been through the roof,” said John Allen, executive chef.
The effects are being felt from big chain restaurants to mom-and-pop businesses to food trucks as they try to cope. Food establishments have responded from raising prices to revamping menus to offering more daily specials on lower-priced items.
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Prices of dairy products and eggs, which are key ingredients in pastries made at The Aviary, have reached all-time highs in some cases. (Photo: Juliana Goodwin/for the News-Leader)

“Rising costs are always an issue to restaurants; all businesses have many challenges. It has been particularly tough the last five years,” said Bob Luke, president of the Missouri Restaurant Association and regional manager for Rib Crib restaurants.
According to the National Restaurant Association, wholesale food prices are up 25 percent in the past five years.
Beef prices have affected how Rib Crib does business, as it tries to feature more chicken, he said, and put less emphasis on beef.
“It forces us to get creative. We have options from raising prices to re-engineering menus to re-engineering plates and portion size,” he said.
Consumers respond negatively to all those measures, so they try to strike a balance, he said.
Garbo’s Pizzeria, which has been in business and family owned for 25 years, raised its prices for the first time in five years, said Laine Scholz, who owns the restaurant with her mom.
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Garbo’s Pizzeria was forced to raise its prices for the first time in five years to combat rising food costs. Dairy, pork, lettuce and beef have all increased and hurt the bottom line, said one owner. (Photo: File Photo)

“Food has been going up for years and we kept our prices the same, but this year we were forced to do it because we noticed a difference in our bottom line,” she said. “Cheese and lettuce went up and we go through so many salads.”
Customers have been understanding because they see their own prices at the grocery store rise, she said.
To combat prices, Scholz said they try not to depend on one vendor, but it’s challenging because they’ve been in business so long so they must have consistency in their product brands.
Zach Smallwood co-owns The Wheelhouse, a family-owned food truck and said the rising prices have forced him to shop around before he buys from a vendor.
But that is very time-consuming for him.
Smallwood serves homemade Asian and Mexican fusion food; rising beef and avocado prices have taken the biggest bite out of his profits.
He’s considering raising the prices of the guacamole because of the price of avocados. This would be the first price increase since the food truck opened two and a half years ago.
Chipotle, a national chain, raised its prices last year, he noted.
Other national chains have been affected.
Texas Roadhouse’s second quarter net income was down 8 percent, despite a 15 percent increase in revenues, according to a news release from the company, in which it said rising food costs were to blame for the decrease in profits.
Beef and veal prices decreased 0.6 percent from July to August but are still 5 percent higher year-over-year, according to the USDA.
Darlene Collins has owned Taylor's Drive-In downtown since 1978 and said she was going to have to increase prices.
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The cost of beef has increased, causing restaurants to feature more chicken specials or raise prices. Taylor’s Drive-In has not raised prices yet, but the owner said she’s going to have to. (Photo: File Photo)

“I’m at the point where I am going to have to raise prices. I have probably the lowest prices downtown. I don’t like to do it, but beef has gone up. Everything has gone up. I am going to have to do it,” she said.
Jennifer Smith, owner of The Traveling Chef, a catering business, said she’s always hesitant to raise prices because this market will only support so much and it seems like $10, which is what she charges for many catering lunches now, is the cap of what many consumers will pay.
Instead she’s trying to do more work herself, serve chicken instead of beef, grow her own herbs, and get longer life out of her catering equipment.
In the past, she’d leave a catering dish with a customer, but now she takes it back, cleans it and reuses it.
The catering arm of the Aviary, which is made up of two restaurants and an event center, has been less affected by rising food costs because it’s easier to raise prices on a catering menu, said Allen.
“I might have a repeat catering job once a year, so they won’t notice a price increase as much as someone who comes into the restaurant four times a month … and is used to paying $8 for an omelet. If you start charging $10 for the same omelet, they get upset,” said Allen.
Catering menus change regularly anyway, he noted.
The Aviary has taken measures to shore up its budget by offering more daily specials with ingredients that provide a higher profit margin for the restaurant.
“We try to get in items we can get a higher margin to offset some of the cost of eggs and dairy,” he said.
It has replaced more expensive vegetable sides with less expensive ones, like succotash.
And its new menu features items like hummus, which provide a higher profit margin for the restaurant.
Smith plans to do the same with her menu and feature some items that are less expensive, like spring rolls.
The Aviary cut its labor, too.
“When you’re combating food costs you have to be real careful with labor. We have held on to all key employees that really earn their money and whittled away people who weren’t doing as good of a job,” he said.
One restaurant that hasn’t been affected is Farmers Gastropub, said owner Bill Griffiths.
He credits this to the fact that he sources locally and changes his menu seasonally.
Griffiths buys from about 30 area farmers and says Missouri meat producers had a good year because all the rain resulted in more grass and hay to feed animals.
“The people growing tomatoes have had a difficult year because of the rain, lack of sunlight and lower temperatures,” he said. “That has had an impact. We cook with what’s available so we’ve been able to change things around, change menus and adapt to the season and that is really what the farm-to-table restaurant is about; it is being able to adapt to what’s available.”
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Beef prices have affected how Rib Crib does business, as it tries to feature more chicken, he said, and put less emphasis on beef. (Photo: AP)

Why the rising food costs?
A variety of events in 2014 and 2015 have pushed up food prices in the United States. Some notable ones:
•The nation experienced its worst avian flu outbreak last spring affecting table-egg-laying flocks. This resulted in the slaughter of more than 48 million birds and affected egg supplies, sending the cost of eggs way up. Eggs are up more than 35 percent from this time last year.
•Droughts in Oklahoma and Texas have driven up beef prices as it affected feed and pasture, resulting in smaller herds. While beef prices are starting to decline — they decreased 0.6 percent from July to August — prices are still 5 percent higher year-over-year. Beef and veal prices are predicted to increase 5.5 to 6.5 percent in 2015 and 2 to 3 percent in 2016.
•In 2013 and into 2014, the porcine epidemic diarrhea virus in the hog industry resulted in the deaths of millions of pigs, limiting supply and increasing prices. The cost of bacon and pork chops were up 12 to 15 percent. The good news is prices are subsiding, and the hog industry has started to expand in 2015.
•Dairy products hit an all-time high in 2014 but have been coming down slightly this year. Prices are 2.5 percent lower than they were in August 2014.
•However, butter hit a new record high on Sept. 24, reaching $3.135 per pound. One of the reasons for the surge is McDonald’s announced it will switch from margarine to butter in all of its U.S. restaurants, which is expected to increase butter demand by around 25 million pounds per year.
•The ongoing drought in California has already affected food prices, and it’s predicted to drive up produce prices this year and next.
Sources: USDA, National Hog Farmer, National Restaurant Association; Economic Policy Journal; New York Times