KETV.com, NE
10-10-07
Pricier Pies Blamed On Rising Dairy Costs
OMAHA, Neb. -- Pizza has been a little pricier lately as the cost of a key ingredient rises.
Prices of dairy products, including cheese, have been creeping up. At Mama's
Pizza on Saddle Creek Road, management is holing the line on raising consumer prices, but some Godfather's, Papa John's and Valentino's locations have raised prices.
Margaret Berg, of Mama's, said cheese prices have fallen back some in the past month, but is still more than 60 cents per block higher than this time last year.
"We go through about 700 to 800 pounds in a week," Berg said. "We go through a lot of cheese."
Dairy industry experts attributed the increase to demand and higher milk prices.
At Mama's, Berg said she hasn't raised prices in two years and wants to keep it that way. Instead, managers will focus on marketing and do what they can to sell more pizzas.
"We're really trying to just generate more sales in other areas instead of turning that cost over to customers as long as we're able to," she said.
Economists said Americans have yet to feel the full impact of ethanol on food prices. Iowa State University agricultural economist Robert Wisner said a huge ethanol expansion is under way and that grain supplies will tighten further.
Corn prices rose sharply in September 2006 as the demand for ethanol grew and prices of meat and dairy have increased since then.
Wisner said that ethanol-driven corn demand is only one reason for the rise in food prices. He said that consumers in prosperous Asian economies are buying more meat than ever before and a weak dollar adds to that effect, making
American food more affordable for overseas customers.
Wisner said more food-price increases more directly linked to ethanol are ahead but how big those increases are is unknown.
Copyright 2007 by KETV.com. The Associated Press contributed to this report.
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