by
Lok_Foodprices
April 4, 2008
INTRO: Earlier this week the USDA reported that farmers plan to grow more wheat next year. That may help stabilize wheat prices, which have shot up in the past year. And that means bakers in New York City are paying more for flour. Annie Lok reports on the impact the escalating wheat prices are having on local businesses.
NARR: Lou SerRONE works for his brother at the Napoli Bakery in Brooklyn. Every morning, he bakes loaves of Italian bread, ciabatta rolls, and frisellini. Serrone stands in front of a giant metal bowl and watches as metal beaters turn his dough.
[Ambi: MIXER fade up to full through short dialogue, fade down]
NARR: Serrone pours flour from huge paper bags that look like oversize pillows. They used to go through a hundred bags a week. In the last few months, they have gone down to seventy bags. That means they're baking less bread each day.
[Ambi: NAPOLI ROOMTONE fade up till actuality starts.]
ACT: [Lou Serrone] It's not the way you want to do business. You want to make more, make more profit.
NARR: Each bag of flour makes about 150 loaves of the bakery's signature bread—a sourdough shaped like a baguette. He is putting fewer loaves on the shelves because the bakery is now paying almost three times more for flour than it did last year. Serrone says he was accustomed to 25 or 50 cent increases each year.
ACT: Then all of a sudden it was a dollar a week. Which is tremendous for us. Now it's going up seven dollars, 8 dollars, 10 dollars every week. [0:11]
NARR: To offset the climbing cost of baking bread, Lou Serrone's brother Nunzio, the owner of the bakery, raised prices. He used to charge a dollar for one of the sourdough loaves, now he charges a dollar 25. Even the small increase didn't cover the new price of flour, and some customers are buying less now.
A small elderly woman comes into the bakery and speaks to Nunzio in Italian.
[Fade up ITALIAN TRANSACTION1 at "but Nunzio" - full up by end of sentence.]
Nunzio shoves a loaf of bread into a paper bag. [AMBI: more paper bag]
She walks out of the bakery, and Nunzio seems worried.
ACT: [Nunzio Serrone] She used to buy always three loaves. Now she buy one.
NARR: Nunzio says this customer isn't the only one who is buying less. Since December, Nunzio has been taking home $500 dollars less a week than he was before flour prices spiked.
Owners of bagel shops and pizzerias have had to deal with an increase in their main ingredient.
ACT: [Charles Soule] everyone's always predicting higher prices, but no one would have ever, ever envisioned seeing where we went his year.
NARR: That's Charles SOLE, a market analyst at Country Hedging, a commodities brokerage company. He has been observing the wheat market for years. Hard spring wheat is the high-protein grain that goes into the Serrones' bread. It's the best quality wheat for milling and baking.
For the last several years, spring wheat has hovered around five dollars a bushel in the commodities market. Then this year, SOLE saw a bushel go for more than 20 dollars. SOLE sees a variety of factors are contributing to the increase. Failed crops in Australia two years straight. So Asian countries bought their wheat from the United States. And in the last decade, there's less land available in the U.S. for growing wheat. The land is often used to grow other commodities.
ACT: [Charles Soule] the demand for vegetable oil, ethanol and biodiesel has put a stress on some of the spring wheat acres.
NARR: Spring wheat acres is no longer the choice of many farmers. SOLE says an acre of corn brings in more than an acre of wheat.
ACT: [Charles Soule] you look at where corn prices are, and really there's no reason for the grower to go out and increase his wheat plantings.
NARR: That is not good news for the Serrone's Brooklyn bakery.
[Ambi: [Napoli cash register]
Nunzio rings up another customer and says they may have to raise prices again. His wife Michelle says customers resented the last price hikes.
ACT: [Michelle Serrone] for a few weeks they were complaining. Then they got used to the quarter, the dime, that's how much we raised it. But now to do it again, I'm scared. They're going to throw the bread at us.
NARR: Farmers will be planting spring wheat for the next few weeks in the Dakotas and other plains states. It will be harvested in late summer. The Serrones are hoping for lower prices then. Until then, they'll try to keep the price of their frisellini stable.
Annie Lok, Columbia Radio News.