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.

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