Shares of CAVA and Papa John's fell sharply after a USDA forecast indicated that rising farm production costs could soon impact ingredient prices. CAVA dropped 7.9% and Papa John's fell 5.8% in afternoon trading. 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%. For restaurant chains reliant on agricultural products like wheat, tomatoes, and dairy, these rising input costs could translate directly into higher food expenses and pressure profit margins.
CAVA Group, Inc.USDA forecasts rising farm production costs, increasing ingredient prices for CAVA.
Papa John's International IncUSDA forecasts rising farm production costs, increasing ingredient prices for Papa John's.