(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.
The building block for most cookies, cakes, breads and pastries has spiked 10.3% in the past year, the biggest jump since 2011, U.S. government data released Thursday show. That’s among the highest inflation rates for any category of food outside of meat, eggs and oils.
The cost of basic ingredients has been climbing amid supply chain woes and labor shortfalls, and wheat is no exception. This week, the U.S. Department of Agriculture in its widely followed global supply and demand report pared back its estimate for world wheat supplies, signaling some tightness ahead. Meanwhile, “with higher wheat prices, we are seeing some pushback” from retail consumers with sticker shock, said Farm Futures analyst Jacqueline Holland.
Rising prices have already started to hit U.S. bakeries, which buy much larger quantities than your average 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.
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The bakery used to sell cakes every day of the week, but since last month, it only sells limited quantities 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. Cocoa prices in New York neared a two-year high Thursday amid dry weather that has curbed harvest yields.
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