The Rising Cost of Food: Just How Much Has it Risen?

The Rising Cost of Food: Just How Much Has it Risen?

This week, I’d like to share another informative article from our Marketing Director, Leann Hastings. Food prices are on the rise, but did you realize the extent to which they had risen?

“As most of you know, 2015 has seen its fair share of inflation and rising prices, but this year has been especially rough in terms of the costs associated with purchasing food. Producers,retailers, and consumers have equally felt the blow. The USDA Economic Research Service reported a 2015 Consumer Price Index (CPI) for food, which represents economic inflation, 1.8% greater than last year. Different food industries have experienced mixed inflation rates. Grocery stores, which fall under the food-at-home category, have experienced a 1% increase in CPI since 2014. Restaurants, which fall under the food-away-from-home category, have experienced a greater CPI annual growth rate of 3%.

So, why exactly are food prices increasing as such a steadily alarming rate?

Beef and Veal

It’s no surprise that beef prices are on the rise, but just how much have prices elevated in the last year? Between June 2014 and June 2015, beef prices increased a whopping 10.9%, with both farm-level beef and wholesale beef breaking record highs. As the U.S. cattle industry recovers from a historically low yielding year in 2014, our pockets are feeling less than deep. Due to a severe drought and unfavorable weather conditions last year in the Southern Plains, specifically Texas and Oklahoma, the beef supply was drastically impacted. Unlike other livestock, cattle production is not a swift process, taking cattle almost one year to mature, another year to reproduce, and months to prepare for slaughter. This long production process explains why consumers are still feeling the burden of a yearlong shortage.

On a more positive note, those southern states responsible for the majority of American beef production have recently received much needed seasonal rains and improved pastures for more ideal production conditions.


While pork prices have seen a 7% decrease since last summer, they have begun to rise slightly, showing a .3% increase in price from May 2015-June 2015. Last year, the pork industry was hit with an outbreak of PED v, a deadly porcine virus, which harmed a large amount of stock. This year, the pork industry has recovered immensely, and there is a greater supply to meet consumer demand, resulting in the price decrease.


Eggs, which have experienced a major shortage due to unfortunate seasonal changes and a widespread outbreak of Highly Pathogenic Avian Influenza (HPAI), have in turn seen the highest price spike of any other food product. On average, eggs prices are 21.8% above what they were this time last year. Farm raised eggs have seen an even more drastic price increase of 105.3% from June 2014.

Egg prices are expected to continue rising with a 10-11% growth rate in 2016.


U.S. poultry prices are 1% higher than those of 2014. This relatively small price increase can be attributed to an increase in broiler production. The HPAI outbreak also negatively affected the turkey stock in Minnesota, resulting in bans on exportation and a reduction in the number of eligible consumers with buying power.

Olive Oil

Olive oil prices are beginning to surge due to very poor 2014 harvests in key olive producing countries in Europe and Northern Africa. Spain and Italy, who together account for 70% of olive production worldwide, have reported one of the worst yielding seasons on record. Bacterial disease, undesirable weather conditions, and uncontrollable insects significantly harmed crops in 2014, spawning a shortage unlike we’ve ever seen.

What can you do?

With the rising cost of food, restaurant managers are left with the question “What do I do now?” Logically, managers should increase the price of their menu items to help cover their increased costs, but how much should menu items be increased? There unfortunately is no ‘one size fits all’ answer to this question. Each restaurant is different. Each market is different. Each concept it different. To best answer this question, you will need to conduct some research of your own. Determine your highest selling menu items, your competitors’ prices, and your desired profit margin. If your restaurant belongs to a price sensitive market, perhaps raising your menu prices isn’t the most desirable solution. If this is the case, consider adjusting your recipes or portions. Serving a hamburger with one tomato slice instead of three cuts your cost by 66% but still meets the customer’s request for tomato on their burger. There are a number of ways to cut costs. You just need to determine which route is best for your business.

What to expect in 2016

The USDA Economic Research Service predicts supermarket prices increase of 2-3% for 2016, a rate of inflation that remains constant with historical averages. Of course, this is merely a prediction that is subject to change. Who knows what 2016 will bring?

Source: United States Department of Agriculture ERS. (2015, July 24). Food Price Outlook, 2015-2016. Retrieved August 4, 2015 from

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Alexis Hesseltine

Alexis Hesseltine

Marketing & Media Relations Coordinator at
Alexis is the Marketing and Media Relations Coordinator at QSROnline. She’s responsible for content strategy, obtaining partnerships with industry leaders, and offering restaurateurs an excellent back-office system. Her passions are helping restaurants succeed and spending time with her French Bulldog, Winnie.
Alexis Hesseltine