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Food Inflation Is Coming for Your Valentine’s Day Cupcakes -Breaking

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© Reuters. Food Inflation Is Coming for Your Valentine’s Day Cupcakes

(Bloomberg) — If surging cocoa prices have you planning to gift cupcakes instead of chocolates this Valentine’s Day, you’re still out of luck: Even flour is getting too pricey thanks to red-hot inflation.

U.S. government data Thursday showed that 10.3% has been recorded in the rise of the basic building block used to make most cookies, cakes breads, and pastries. It is the highest increase since 2011. That’s among the highest inflation rates for any category of food outside of meat, eggs and oils.

Due to supply chain problems and shortfalls in labor, the cost of basic ingredients is on the rise. Wheat is not an exception. In its highly-followed global demand and supply report, the U.S. Department of Agriculture reduced its estimates for world wheat supplies this week. This signals that there will be some tightening. Meanwhile, “with higher wheat prices, we are seeing some pushback” from retail consumers with sticker shock, said Farm Futures analyst Jacqueline Holland.

U.S. bakeries have seen rising prices, as they buy more than the average American household. At Baked and Wired in Washington D.C., menu prices have already gone up “at least twice” since the pandemic started, said representative Ryan Henson. Now, it’s been forced to scale back cake production, too, thanks to skyrocketing prices of flour, along with milk and eggs.

Related: U.S. inflation charges rise with greater-than-forecast gains

The bakery once sold cakes on every day of the work week. But, since last month it has only been selling limited amounts on Saturdays. Before the pandemic, a 50-pound bag of flour cost $8; now it’s roughly $17.

“It’s crazy,” said Henson. “We can’t offer as many things as we normally do.”

Price-sensitive Valentine’s Day shoppers won’t be able to turn to chocolate for help, either. New York’s cocoa market reached a new two-year peak Thursday due to dry weather, which has reduced harvest yields.

©2022 Bloomberg L.P.

 

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