The tiny storefront of Tacqueria Casa Real looks out onto a bustling stretch of Dorchester Avenue, but in another way, the restaurant's counter provides a view on the world.
It’s a view, more specifically, of rising food costs, and an interconnected food chain where a shortage of feed in the Midwest, a drought along the Malabar Coast of India, or growing appetite for cheese in South Korea can drive up prices for a small Dorchester shop.
Food prices over the past year have increased at four times the rate of overall inflation, with fresh products, such as meat, vegetables, and dairy, soaring even faster.
Ground beef prices, for example, are up about 20 percent from a year ago; lettuce, 12 percent; and fresh tomatoes, almost 27 percent, according to the US Labor Department. Dairy products, including cheese and sour cream, have climbed more than 5 percent.
Shoppers at local grocery stores have felt the sharp rise in prices, but for Ricky Reyes, owner of the taqueria on Dorchester Avenue, costlier ingredients mean it is getting harder to keep the price of his signature product, a $1.95 beef taco, under $2.
“Everything’s going up, and we end up eating the increases,” he said.
No prices have gone up faster than for beef, as almost any family shopping for dinner can attest. It’s especially costly when you shop in bulk, as Reyes does, and a week’s supply of ground beef is 70 pounds purchased at Restaurant Depot, a wholesale market in Everett. A year ago, that cost him about $190; this week, he paid nearly $225.
Short supplies and strong demand are to blame for costlier beef, according to the US Department of Agriculture. A drought in 2012 sent soybean and corn feed prices soaring, which in turn led ranchers in beef-raising states such as Texas and Oklahoma to cull their herds.
With feed prices stabilizing, ranchers again are adding cattle, said Annemarie Kuhns, a USDA economist, but herd sizes remain about the same as in the 1950s, when the nation’s population was about half of today’s. Meanwhile, US beef exports are growing to meet demand in Canada, Mexico, Japan, South Korea, and other countries. More than $6 billion in beef was exported in 2013, compared to about $1 billion in 2005, according to the National Cattlemen’s Beef Association, a trade group.
As a result, steak that cost an average of $6.30 a pound in 2012 cost more than $7.50 at the end of 2014, a 20 percent increase; chuck roast that cost about $4.50 a pound rose to nearly $5.70; and a pound of ground beef costing about $3 in 2012 climbed to more than $4, a 35 percent jump, according to the Labor Department.
Record global demand for cheese is also putting pressure on prices, and on Reyes. Cheese exports surged 20 percent between 2012 and 2014, as American farmers and processors found new markets in Asia, according to the US Dairy Export Council.
Exports to South Korea are up by 40 percent in the last five years as the nation increasingly adopts Western dietary habits, said Robert Chesler, a vice president at FC Stone, a commodities trading firm in Chicago. US cheese sold in China has jumped more than 30 percent in the past two years after toxins were found in milk produced there, leading the government to take actions that closed small dairies.
Reyes’s beef taco contains just a sprinkling of cheese, and the optional squirt of sour cream, but it can add up when you prepare more than 500 a week.
His restaurant typically uses about three cases of shredded cheddar jack a week at a cost of more than $120 and a case of Cabot sour cream that costs $30. He said cheese prices have moved higher and lower all year without warning, but mostly higher.
Even the price of pepper, used to season the meat, has jumped: Reyes said the price of a five-pound jug of black pepper more than doubled recently to $42.
The International Pepper Community, an intergovernmental organization of pepper-producing countries, said prices have risen for the last five years due to “high demand and stagnant supply.” Production of pepper on India’s Malabar Coast, a central producer for centuries, has fallen due to infestations, aging gardens, and drought.
A multiyear drought is also largely responsible for poor harvests in California and the jump in the prices of lettuce, tomatoes, and other vegetables. California, for example produces more than 70 percent of the nation’s lettuce. On average, head of iceberg cost about $1.10 at the end of last year, up from 87 cents in 2012, a 28 percent increase.
“Part of the issue is that a number of commodities, especially the fresh ones like lettuce and tomato, are prone to problems caused by weather,” said Michael Montgomery, an economist at IHS Global Insight, a Lexington forecasting firm.
Reyes goes through 36 heads of lettuce and about 25 pounds of fresh tomatoes a week. In Dorchester, he and his mother, Elena, who are from Ecuador, said their customers expect fresh food, but part of the appeal of a taco is its bargain price. So in recent months, he has considered adding a $1 surcharge for extras, like lettuce and tomato, much the same way the fast-food chain Chipotle charges an extra 30 cents for items with beef.
But Reyes wonders how the day laborers, construction workers, police, writers, and other customers who line up at his Dorchester counter daily for lunch would respond.
Reyes, who works behind the counter six-days a week, said increased prices have squeezed his profit margins so much that he has indefinitely postponed plans to open another location. For the time being, he expects to break even, at best, on a mainstay product.
“We want to be affordable,” Reyes said of his tacos, “but sometimes it’s probably not worth it.”