Inflation forces Garden City Acme Bakeshop to raise prices

Acme Bakeshop sells bread to over 50 local restaurants, cafes and food trucks.

GARDEN CITY, Idaho – Nestled in an old industrial building sits Acme Bakery and its 15 employees, who work during the hours that many spend sleeping.

“Our schedule is based on a restaurant’s lunch hour,” said Acme founder Michael Runsvold. “If they don’t have bread before lunch, they are stressed.”

There is no logo to attract attention. There are no advertisements on billboards. Just a red note-card sized sticker on the front door.

Inside this door is a world that Runsvold has been constructing for himself since 2012.

“I don’t know if I could describe it to you,” Runsvold said. “You start with a bag of flour and a bucket of water and end the day with a stack of beautiful bread. You turn things around. It’s amazing.”

To pay the bills, Runsvold sells bread for more than 50 local restaurants and businesses. Acme sells bread at farmers’ markets just for fun, according to Runsvold.

However, the cost of fun now comes at a higher price. Runsvold increased the cost of its bread to meet rising ingredient costs.

“It’s just a question of inputs. Everything we use to make bread costs more – right down to the employees,” Runsvold said. “Everything has gone through a phase where it’s harder to find. It’s just more work to do that job.”

Acme’s prices increase by 50 cents to $1 more per product, Runsvold said. It was a decision he didn’t want to make, but it was a decision he had to make to stay in business.

Runsvold buys its flour from a cooperative located on the Palouse. The company is called shepherd’s grain.

Flour costs $17 per bag, according to Runsvold. It’s not the cheapest price Runsvold can find, but it’s the most stable price.

This is because the cooperative buys directly from the farmers and sells directly to the customer. The key is to avoid the commodity market where prices are set at a macro level.

“Wheat farmers are price takers, not price makers. They do not set their selling price. That’s what we offer them.” Idaho Wheat Board said executive director Casey Chumrau.

The world economy – and world events – have a significant impact on the cost of wheat in the commodity market, including the war in Ukraine. Russia and Ukraine export 30% of the world’s wheat, according to Chumrau.

This creates great uncertainty in the market. However, prices have been unstable for years.

“Over the last 10 to 20 years, we’ve seen a lot more volatility in grain markets,” Chumrau said. “If you talk to people whose grandparents grew wheat, it was a lot if it changed 20 cents in a year. Now you can change 20 to 40 cents in a day.”

Most farmers bet that the market price of raw materials will cover the cost of production with the money left over for a profit. It’s an increasingly dangerous bet as diesel fuel, fertilizers and other overhead costs increase.

“60 to 300 percent increases depending on input,” Chumrau said. “The cost of production for producers has increased significantly this year.”

The local cooperative that Acme sources from, Shepherd’s Grain, avoids all that. The cooperative sets its prices according to the cost of production. This ensures that the farmers make a profit and the customer enjoys a stable and reliable price.

“I don’t think anyone has had it easy. Everyone is trying to find their bearings,” Runsvold said.

As the cost of production continually rises, the prices of cooperatives also rise. This is a cost that Runsvold must pass on to its customers.

While Runsvold loves what he does for a living, he navigates uncharted territory amid rapid inflation.

“Everything has changed so much recently. It’s hard to know if you’re making the right choice for what’s possible in the future,” Runsvold said.

The US Bureau of Labor Statistics (BLS) tracks inflation through a variety of numbers and numbers. The Consumer Price Index (CPI) has risen 8.6% over the past 12 months.

It’s the biggest CPI increase over a 12-month period since late 1981, according to the BLS.

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