KANSAS CITY, Mo. — As the economy works its way back toward pre-pandemic activity, certain sectors are seeing concerning price spikes so far in 2021.
The most recent Midwest Consumer Price Index report for March 2021 from the U.S. Bureau of Labor Statistics shows steady increases in certain commodities, ranging from energy to food to housing.
41 Action News spoke to one restaurant owner about the rising cost of meat, poultry, fish and eggs, which broadly has risen 3% since March 2020 and 0.8% since February 2021. But for certain items, the price inflation is much higher.
"We’re looking at a 20-to-30% increase possibly in center-of-the-plate items — chicken, beef, on and on," Charles d’Ablaing, of Brookside Poultry, said. "Right now, we’re seeing chicken obviously go up, beef starting to creep up. I think the biggest problem we’ll have is explaining that to our guests, what’s going on with the price increase."
D'Ablaing cited a supply-and-demand imbalance as driving up prices, and it's affecting most restaurant owners.
"(A) couple hundred-thousand restaurants open at full capacity all of a sudden, where does that food come from?" he said. "So, it’s going to come down, but I think we’ll be stuck in this situation for I don’t know how many months of having to increased prices. That’ll have a ripple effect of people asking, 'Why are you charging so much? I’m not going there anymore to spend $2 more; I’ll go here and spend $1 more.' We’ll see a ripple effect across the board of what people are willing to spend."
D'Ablaing also said he's seen increased foot traffic at his restaurant, which makes the current pricing situation frustrating.
"Having a great rebound and resurgence, and the bottom drops out," he said.
The lumber market is another experiencing unprecedented volatility.
Stinson Dean, a Blue Springs graduate and the owner of Deacon Lumber, said the price of lumber futures are more than double the previous record, sitting near $1,600 per thousand board feet on Tuesday afternoon.
The spike in do-it-yourself projects and retail demand is affecting home-building companies.
"There’s less wood on the open market for the rest of us to buy, particularly to get to the production home builders, because big home builders don’t go to Lowe's and Home Depot, not yet at least," Dean said. "So, that wood that they reserved for the DIY person has now reduced the supply for everyone else on the open market, so that is a huge and significant factor in how we got this high this fast."
The lumber shortage could also cause a new housing shortage.
"They’re the capping the amount of homes that they’re going to sell each month because of supply-chain issues from lumber to OSB to drywall, so it affects the biggest wealth builder for the middle-class American," Dean said. "The American Dream flows right through home ownership, and lumber prices along with demand for new homes and all the other building products that go into a home haven’t allowed the supply side to meet demand. When that happens, prices skyrocket from home prices to lumber."
The futures markets show lumber pricing may not come down soon. According to the National Association of Home Builders, more than $35,000 has been added to the average price of a new single-family home as a result of the rising lumber prices.