Drought leads restaurants to raise prices, cut portions

http://www.latimes.com/news/nationworld/nation/la-fi-drought-restaurants-20121014,0,3803482.story

Drought leads restaurants to raise prices, cut portions
The effects of the Midwest drought on prices for corn, meat and poultry are showing up on restaurant menus. Small eateries are being hit hardest.
By Tiffany Hsu, Los Angeles Times
October 14, 2012

...Commodity prices were increasing even before the dry spell. Economists say even bigger hikes are ahead as the poor U.S. harvest ripples through the food chain.

Now fast-food giants, fancy eateries and even corner coffee shops are scrambling to adjust. The cost of food rivals labor as the top expense for most restaurants. Restaurateurs are revamping menus, reducing portion sizes and even considering staff cuts. In the months to come, they say, watch for smaller steaks, fewer tortillas per entree and maybe even menu-wide price increases...

The price of corn — a key component in livestock feed and an ingredient in powdered sugar, salad dressing, soda and more — catapulted 60% in early summer. A British trade group recently predicted "a world shortage of pork and bacon next year," which most analysts interpreted to mean that higher prices are ahead.

In the meantime, chickens and turkeys are getting more expensive just in time for the holidays. Already, chicken prices are up 5.3% from a year earlier, while the cost of turkey and other poultry is up 6.9%. Eggs cost 18% more in September than they did a year earlier. ...