August 20, 2012

Kosher Consumers Face Price Increases in US and Israel

NEW YORK — Although many retailers are denying it, industry sources say that kosher consumers will definitely face price increases this holiday season. KosherToday last month broke the story of a possible shortage of poultry due to the sudden closure of the Mehadrin poultry plant (which included the Vineland brand). The plant is said to have produced 140,000 birds a week. But the key reason for the potential price increases is not necessarily shortage but soaring commodity prices for ingredients that go into such products as baked goods and the feed for poultry. 

Several retailers told KosherToday that they do not expect any significant price increases come Rosh Hashanah because their prices were fixed in orders placed months ago. Nor is anyone exactly sure whether there will be any shortages at all, including poultry. With the summer season winding down, many in the industry say they will not feel true consumer demand until after Labor Day. 

But in Israel, it is virtually certain that there will price increases. According to the Center for International Agricultural Development Corporation, “the prices of basic food products are expected to rise significantly by the end of the year, with prices of dairy products soaring by 6-13%, eggs prices increasing by 8-17% and poultry being subjected to 6-14% price hikes.” The CINADCO report reviews the rising prices of corn, soy and sorghum, which are key components in animal and human nutrition. 

Due to droughts in the Midwestern US, France, Russia, Ukraine, Kazakhstan and India, most commodities are becoming more expensive. One supplier of bakery ingredients said: “This isn’t exclusively a kosher story, but kosher consumers are probably more sensitive because they already pay a premium for the kosher products they buy.”