Are cheese prices dragging you down?

mozzarella cheeseA reader recently sent us this question:

“Cheese prices are up 25% for us, and my broker offered a lesser-quality cheese instead … What do I do?”

The answer, of course, is very simple: don’t compromise quality. Ever.

So, with that out of the way, what exactly do you do when costs are up? The reader has already been given some good advice in a lengthy thread on the Pizza Today Facebook page. His peers have discussed raising prices, enacting portion control methods and the importance of basing menu prices not on current costs, but on projected future costs. All good advice.

Have you been paying attention to your cheese prices? Have you seen today’s current prices? Are you aware that block prices on the Chicago Mercantile Exchange have not been under $2 at all in 2014? Or that the highest yearly average block price in the last decade came in 2008 ($1.85) — and so far in 2014 the average is well above that? Are you aware that the average block price in January was $2.22. If so, did you know that that is the highest average monthly price in at least the last 13 years?

Consultant Big Dave Ostrander sheds some light on how and why cheese prices fluctuate so much in this article. Meanwhile, consultant and pizzeria operator Michael Shepherd makes a case for portion control here. And operator and International Pizza Expo speaker, John Gutekanst, asks how well you maintain your food costs in this article.

Whether you raise prices or “grin and bear it” is up to you. But if you learn to plan for fluctuations and spikes in commodity prices the next time you plan your menu, you’ll be much better prepared to handle the roller coaster ride.