4A
NEWS
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BUSINESS
THE UNIVERSITY DAILY KANSAN
THURSDAY, NOVEMBER 6,2008
Rising cost of wheat forces local businesses to raise prices
BY RYAN ELDER editor@kansan.com
Doug White never thought being a bread enthusiast would have an effect on how he budgeted for food.
Food prices have been on a steep rise for the last year, but bakery items such as a loaf of bread have risen even more drastically.
"It's not a real big deal, but sometimes I don't let myself
"Our prices should be higher, but we have continually stayed behind the average price of a loaf of bread."
our product," Garrett said.
buy that cup of coffee on the way to work, or stuff like that," he said.
The bakery has raised its menu prices three times in the past nine months to keep up with the rising cost of wheat. A $5.50 loaf of honey whole wheat bread cost $3.75
White, a Lawrence resident, isn't buying less bread than he has for the past 15 years, but his favorite food is costing him more. The prices at local bakeries and pizza shops have skyrocketed by as much as 46 percent in the past year and a half.
Garrett said it had become increasingly difficult to make a profit, but his business was constantly thinking of new ways to cut costs. He said the store had scheduled labor tighter and started shopping more competitively for the cheapest Hard Red Spring Wheat, the type of wheat used to make almost every type of bread.
BOB GARETT
Owner of Great Harvest Bread Co.
Bob Garrett, owner of Great Harvest Bread Co., 807 Vermont St., said his business had taken a financial hit from high wheat prices. His store produces 6,000 to 7,000 loaves of bread per month at a cost of about $1 per loaf. Garrett said that a year ago, a loaf of bread cost about $.80 to make. That means Garrett spends about $1,400 extra per month on making bread.
"We decided months ago that we would not reduce the quality of
last December.
That 46 percent increase in menu prices has changed the way Garrett operates his bakery.
"Our prices should be higher, but we have continually stayed
behind the average price of a loaf
of bread, Garrard, said.
Terry Kastens, professor of agriculture economics at Kansas State University, said wheat prices 15 months ago were less than $5 per bushel. He said this month prices had been floating between $8 and $9. Three months ago, one bushel of wheat went for more than $1.2
Kastens said the price of every crop had risen because of the soaring cost of energy, especially crude oil. The increased production of ethanol in 2006 and a massive world demand on limited supplies have caused wheat prices to rise more than other crops.
"When ethanol became more popular, a lot of the acreage for wheat was converted into corn fields and soy bean fields," Kastens said.
Although the rise in grain prices has severely affected businesses and consumers, the agriculture industry has benefited.
"Generally, anybody connected to agriculture is making a pretty good profit," kastens said. "It has really provided an economic boom for all the rural areas."
According to the Kansas Wheat
Commission, wheat will have a $2 billion economic effect on Kansas in 2008. Farmers, mill operators and farm implement businesses will see the biggest profit.
Not everybody has been positively affected. At Muncher's Bakery, 92.5 Iowa St., owner Mike Tennyson has been forced to raise the price of every item on the menu by 20 percent. The price change was made in April, but there hasn't been a dropoff in business since then. Tennyson said that he believed most customers understood that increasing prices were necessary.
"it's something you just have to do," he said. "We had no choice. Once red flour went from $8.95 per bag to $29 per bag in one month, we had no option but to raise the prices. It would have devastated us."
Pizza restaurants have also been affected by wheat prices. Papa Keno's Pizzeria employee Emma Golden, said that Papa Keno's, 1035 Massachusetts St., had a staff meeting a month ago about the rising cost of wheat. To save money, employees have been instructed to put fewer toppings on the pizzas.
Kastens said that wheat prices had started to decrease during the past few weeks, but that prices would never return to $5 per bushel. He said he didn't expect prices to reach $12 per bushel again anytime soon.
White said he would still buy two to three loaves of fresh-baked bread a week, just as he had for the past 15 years.
"It's very tough to predict because the market is extremely volatile right now," Kastens said. "My guess is that the prices will rebound and start to go back up sooner than later."
"Since I love the fresh bread, I try to cut out other expenses that aren't necessary." White said.
- Edited by Jennifer Torline
Nina Dahm prepares sourdough starter, which will be used to make sourdough bread, at Great Harvest Bread Co. on Wednesday afternoon. Dahem said sourdough starter is aged and passed down from generation to generation. "Sourdough bread tastes better the more it ages," she said. "We got this starter from a 100-year-old lady. It was in her family since the Alaskan gold rush."
Jessica Sain-Baird/KANSAN
INTERNATIONAL
Six Hamas militants dead in brief clashes with Israeli army
GAZA CITY, Gaza Strip — Israel and Gaza's Hamas rulers scrambled Wednesday to contain fallout from the deadliest outbreak of violence since a truce brought an uneasy peace to the area five months ago.
BY DIAAHADID
ASSOCIATED PRESS
Gaza militants pounded southern Israel with dozens of rockets to avenge raids that left six militants dead, but the guns quickly fell silent with neither side appearing to have much to gain from renewed hostilities.
"We have no intention of violating the quiet." Israeli Defense Minister Ehud Barak said on a tour
of areas bordering Gaza. "But in any place where we need to thwart an action against Israeli soldiers and civilians, we will act."
Hamas spokesman Fawzi Barhoum said the group fired deep into Israel to demonstrate the price of continued aggression. At the same time, he said, Hamas had contacted Egyptian mediators
to find ways of keeping the truce intact.
Before the Egyptian-mediated truce in June, near-daily rocket barraces played havoc with southern border towns and Israel has not found a military solution to stop them. Retaliatory Israeli airstrikes killed scores of Palestinians in Gaza.
Hamas, on the other hand, needs the calm to strengthen its hold on Gaza, where it seized control in June 2007, and restore its military capabilities ahead of a potential future battle with Israel.
804 Massachusetts St.
Downtown Lawrence
(785) 843-5000
www.sunflowerdoorandhike.com
was killed, prompting a wave of mortar fire at nearby Israeli targets.
Clashes began late Tuesday after the Israeli army burst into Gaza to destroy what it said was a tunnel being dug near the border to abduct Israeli troops. During the incursion, Hamas gunmen battled Israeli forces. One Hamas fighter
An Israeli airstrike then killed five Hamas militants preparing to fire mortar shells. Hamas responded with the barrage of rockets, including one that landed in an empty area in the city of Ashkelon, some 10 miles north of Gaza.
passage was to be used for a kidnapping. Hamas already is holding an Israel soldier that militants captured in a cross-border raid more than two years ago.
There were no reports of injuries or property damage. The army said four soldiers were wounded, two moderately, in the fighting.
Thousands of Palestinian mourners rushed slain militants through the streets of the southern Gaza town of Khan Younis, waving green Hamas flags and vowing revenge.
Defense officials said they knew the raid could jeopardize the ceasefire, but concluded Hamas would have an interest in restoring the calm.
Israeli defense officials said they had discovered a 300-yard long tunnel days ago, and concluded the
Sporadic rocket attacks on southern Israel have persisted since the truce, but the attacks were carried out by smaller groups seeking to embarrass Hamas for preserving a truce with the leishuv state.
Continued attacks have prompted Israel to close its crossings into the coastal strip of 1.4 million Palestinians. Israel and Egypt lead a blockade on the Gaza Strip, imposed since Hamas seized power of the territory a year ago.
2008 Internship, Summer Camp & Non-Profit Career Fair
November 13,2008 3:30 p.m.to 6:30 p.m. Kansas Union 5th Floor
Open to ALL students, faculty and staff.
Presented by:
University Career Center
Burge Union, Room 110
1601 Irving Hill Road
Lawrence, KS 66045
www.KUCareerHawk.com
Phone: (785) 864-3624
E-mail: ucc@ku.edu