Wednesday, June 27, 2007

Pizza To Take Bigger Slice Out Of Budget

Expect pizza to take a bigger slice out of your budget.

In a strange side effect of the food chain, the increased demand for ethanol fuel appears to be driving up the cost of a pizza.

Family-owned pizzerias and the big national chains are getting hit with higher cheese prices.

Observers said the demand for ethanol has increased the cost of corn, a staple food for dairy cows. That drives up milk prices, which pushes up the cost of cheese.

There are other factors at play, including increased demand for dairy products. But the result is clear: block cheddar cheese is almost twice as expensive as it was a year ago.

In response, major pizza chains, such as Pizza Hut and Papa John's have increased the price of their cheese-only pizzas. Smaller vendors are feeling the cheese pinch as well.

A Papa John's spokesman complains the higher cheese prices are hurting companies already losing profits to higher wages and fuel costs.

At Fat Jimmy's pizzeria in Louisville, Ky., Larry Lewis said they are having to pass some of the higher costs on to customers.

But prices won't be flying as high as a hand-tossed pizza. The pizza makers note that while cheese is costing more, flour and tomato sauce have stayed stable.

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