California fast-food restaurants hiking prices as drought persists

California fast-food restaurants hiking prices as drought persists

Fast-food restaurants like In-N-Out Burger are increasing the prices of hamburgers and other products as California's persistent drought is pushing the prices of raw materials up.

According to the U. S. Department of Agriculture, beef prices will likely increase 5.5 to 6.5 per cent this year, while poultry prices are expected to rise 3 to 4 per cent. Prices of eggs, vegetables, fruits will also rise by 3 to 4 per cent.

Separately, a study by U. C. Davis Center for Watershed Sciences suggested that the ongoing drought could cost the Golden State's agricultural & farm communities $1.7 billion. It is also expected to cut 14,500 full-time and seasonal jobs.

Increasing prices of raw products are forcing restaurants and other to increase prices of the products to maintain margins.

In-N-Out's executive VP at Carl Van Fleet, said, "We make every effort to keep our menu prices as low as possible. Unfortunately, we have seen some pretty significant cost increases over the last year, and we had to take a small price increase in order to maintain our quality standards."

In-N-Out is not the only fast-food chain that has increased prices. Starbucks and Chipotle Mexican Grill are also hiking prices of their products by 4 per cent to 10 per cent.

California is facing the draught for the third year in a row, which forced the state's water distribution authorities to cut supplies to all sectors, including agriculture. As nearly 500,000 acres of farmland in the state remains uncultivated, and given the fact that the state grows half of the country's fruits and vegetables, consumers throughout the country will likely see an increase in prices of products.

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