Drought conditions raise food costs

FRESNO, California

The cost of getting beef on the grill is higher now than it's been over the past five years. And it's rising sharply this year. "We are very reluctant about raising our prices, but we're going to have to edge them up, there's no way," said restaurant owner David Fansler.

Fansler opened Westwood's BBQ in north Fresno four months ago. He also owns Pismo's Coastal Grill and Yosemite Ranch. He says he opened Westwood's to sell lower priced meat because of rising prices on higher quality cuts.

He hasn't raised his menu prices, but says it's on the table as everything food-related continues to cost more.

"People are going to really see a big bump in prices," Fansler said. "We're already seeing it on our end, whether it's in produce, protein, chicken, beef, huge price increases like I've never seen before in my entire career."

The grocery store is where many will feel the impact. Jimmy Maxey is a beef distributor with JD Food in Fresno. He says recent drought conditions in the mid-west have thinned cattle herds, lowering supply to levels not seen in 60 years.

Beef costs are up about 25 percent since 2009. But California drought conditions will likely force high prices, especially on lower-cost ground beef.

"You're going to see an increase in that because the raw materials that go into ground beef are definitely in shorter supply than the ones that go into steaks and roasts," Maxey said. "So percentage-wise you might see a bigger increase there."

When you combine the bleak drought conditions with rising health care costs and a mid-summer minimum wage increase independent restaurant owners say there's no way to avoid raising menu prices.

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