 "Photo: Jon Huang")
 "Photo: Stock photo")
 "Photo: Jon Huang")
 "Photo: Jon Huang")
A note posted behind the counter at the Drag's Slices & Ices warns customers that the business has had to increase its prices. Written by owner Gene Meshbane, the note attributes the hike to the nationwide increase in prices of flour.
"I'm glad I don't make bagels or own a bakery. They're really screwed," the note reads. "A new menu is coming. Sorry, we have to survive."
In the last six months, the price of wheat - a main ingredient in wheat beer and pizza dough - has increased so drastically that it's forcing some Austin businesses to raise their prices. The U.S. Department of Agriculture said it projects the price of a bushel to increase 46 percent from 1996's record high of $4.55 per bushel, according to a report released by the Congressional Research Service. Weather conditions and demand for the crop could even put some restaurants out of business.
"Over the past number of months, wheat prices have gone up in a way we have never seen before," said Michelle Kessler, spokeswoman for the National Association of Wheat Growers.
Meshbane said the wheat he buys at Slices & Ices has gone up $24 per bushel in the last seven months, which is triple the increase over the last 30 years. This increase has forced him to raise his pizza prices.
Being forced to increase prices by 15 cents, he said he's been able to afford the extra $300 a week for wheat.
The increased demand in wheat for ethanol and international trade, mixed with the historically low global wheat stocks, have contributed to the wheat price increase, Kessler said.
"I have gotten a lot of calls from people that say this is an issue," Kessler said. "Bakers are especially concerned with this if they have seen an impact. There is reason to be concerned."
Murph Willcott, who owns Texas French Bread on Rio Grande Street, said he's written to Democratic Rep. Lloyd Doggett, from Texas, "saying we have to stop selling wheat overseas, or we will have $22 ham sandwiches, and people like me are going to be out of business." Texas French Bread has increased its prices by
15 percent.
The U.S.'s late-spring freeze and heavy rains in 2007 have reduced the output and quality of wheat, according to the congressional report. Severe droughts in Australia, Eastern Europe and Canada have contributed to the wheat shortage.
UT economics professor James Galbraith said the rise in oil prices and the falling U.S. dollar have also affected the wheat price increase. Austin's North by Northwest Restaurant and Brewery has raised its happy-hour beer prices as a result.
This rise in agricultural and oil prices has contributed to overall high food inflation rates in the U.S. and around the world, Kessler said. She said the high wheat prices may start to entice farmers to produce more, which could offset the increase.
"Even though prices are high right now, they are not necessarily bad," Kessler said. "We need wheat and are willing to pay for it, so people will go out and make it."
Galbraith said farmers cannot simply produce more wheat, because there is a limited amount of land where it can grow, but the USDA reported that by 2009, it expects planted acreage to expand for wheat by up to 6 percent.
According to a 2006 study by Texas A&M University, wheat production contributes about $658 million annually to the Texas economy, the fourth largest wheat production state in the nation.
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