Sunday, March 9, 2008

Wheat Prices Pinch City's Restaurants by Will James _ NY Daily News

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Hamlyn Seebaran and his wife, Santee, have endured higher prices for raw ingredients at their Ozone Park, Queens "D" Original A & A Restaurant On Liberty Avenue.

The price of a slice of pizza or a bagel is about to rise, but don't blame the poor guy behind the counter — point the finger toward far-away farms in Australia and Russia.

Lousy crop yields across the planet and growing consumption have made the price of flour rise like a loaf of bread with too much yeast, and New York restaurants, bakeries and pizzerias are reeling. Many have already begun to pass on the cost to customers, and it could get a lot worse, according to people in the industry.

"You're going to be paying four bucks for a slice of pizza soon," said Sal Casella, vice president of Howard Gordy Bakery Supplies in East New York, Brooklyn.

Hamlyn Seebaran, who owns "D" Original A & A Restaurant, a Caribbean eatery in Ozone Park, Queens, said he saw the price of a 50-pound bag of flour jump to $26 from $16 in a matter of two weeks. When he tried a new distributor a few days later, the best he could do was $36.

"I'm confused, just like the customers are confused," Seebaran said.

Back in 2006, when Seebaran opened his Liberty Ave. restaurant, a 50-pound bag of flour cost $9, and the price remained steady until recently. Now, he wonders how much longer he can stay open.

At Smiling Pizzeria, in Park Slope, Brooklyn, manager Steve Zito said he paid $10 for a bag of flour about a year ago. Last week, it was $30.

"I just talked to a distributor," said Zito, who's been in the business for 34 years. "He's been around just as long, and he's never seen anything like this."

Reluctantly, Zito said the store is considering raising the price of a slice by as much as 50 cents from $2.

Experts said much of the blame is due to bad weather around the globe. Major wheat exporting regions, including Australia, the European Union and Russia, have endured many poor harvests in recent years, said Joseph Sowers of U.S. Wheat Associates, a Washington-based industry group.

"Every major exporting country had problems," Sowers said.

Global wheat output dropped to 593 million metric tons from 621 million over the last two years, according to the U.S. Department of Agriculture. The price for a bushel of wheat in the U.S. rose to $4.26 from $3.42 over the same period. The current crop, goes for a record $6.25 a bushel, according to USDA economist Larry Salathe.

"We've seen quite a considerable dropoff in inventories, and that has pushed the price up," Salathe said.

The latest price spike may pause. The current wheat season ends in spring, and Sowers said demand always tightens as the harvest period winds down. A new crop begins to come available in June, and Sowers said it appears to be "huge."

"We've just to get through this last quarter," he said.

In the meantime, Seebaran, who goes through 10 to 12 bags of flour a week, each weighing 50 pounds, to run his small restaurant, is going to try to keep from raising his prices.

"I'm trying to hold out until the summer and see if something might break, you know?" he said.