Bagels on the rise - Brooklyn, N.Y.

Ravi Agarwall, who owns A.R.E.A. Bagels & Bialys, taped an arrangement of news articles to the wall of his bright, cozy establishment on 5th Avenue in Park Slope, Brooklyn. The articles’ headlines scream about the rising cost of flour. Agarwall put them there to remind his customers the reason why he has to raise the price of his bagels.

Since Agarwall opened his shop, the price of a 100-pound bag of flour has gone from $19 to a whopping $56, and he has had to raise his price per bagel from 60 cents to 75 cents. The 15-cent increase is barely making a dent in the amount of profit he’s losing.

“I was thinking to go higher, but this is a new place,” said Agarwall, who opened A.R.E.A. last July. “The prices keep going up, we just try to make up whatever we can.”

With the price of flour tripling over the past three months, bagel owners are feeling a big profit pinch. Wheat prices have more than doubled to a record in the past year as global demand rose faster than production, which will send inventories by May 31 to their lowest since 1978, according to the U.S. Department of Agriculture. Wheat was the fourth-biggest U.S. crop in 2007, valued at 13.7 billion, behind corn, soybeans and hay, government data show.

Across town in Cobble Hill, Brownstone Bagel & Bread Company owner Michael Vinciguerra said he feels bad passing along the wheat price hike to his customers but fortunately, his clientele are aware of the current economic conditions.

Vinciguerra has had to raise the price of a bagel in 10-cent increments, from $.75 to $ .90 cents, since opening last September. He said he might have to charge $1.40 a bagel in the near future to make up costs but that would put him at prices unheard of on this side of East River.

“I think Manhattan’s up to $1.20 [per bagel]... I really won’t like to see that here in Brooklyn,” Vinciguerra said. “Before you know it, a bagel with cream cheese and coffee will be like $4.”

Back at A.R.E.A Bagels, Agarwall said his customers haven’t vocalized their complaints about increased prices, though he can see their frustration because they are buying a lot less. To help defray costs, Agarwall has had to lay off three workers. He and his wife now work more hours to make up the labor.

Agarwall owns two other bagel shops--one in Queens and one in Long Island. He said had he known prices would jump like they have he never would have opened another bagel shop.

“I think it’s the biggest mistake I did, to have opened a bagel store now,” he said.