Shares of Wendy's and Jack in the Box fell sharply in afternoon trading after a USDA forecast warned that rising farm production costs could soon pressure ingredient prices. The USDA projects total production costs for major crops will continue to rise, potentially reaching record highs, driven by significantly higher costs for fuel, lube, electricity, and fertilizer, with some fertilizer cost estimates revised up by as much as 13%. Wendy's stock fell 8.9% and Jack in the Box fell 11.4% on the news. The forecast suggests restaurant operators may not see relief from elevated expenses in the near future, with rising input costs for agricultural products like wheat, tomatoes, and dairy directly translating into higher food expenses and pressuring profit margins.
Jack in the Box Inc.USDA forecast warns rising farm production costs will pressure ingredient prices, directly increasing Jack in the Box's food expenses and squeezing margins.
The Wendy’s CoUSDA forecast warns rising farm production costs will pressure ingredient prices, directly increasing Wendy's food expenses and squeezing margins.