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Soaring Vanilla Prices Creating Struggle For Ice Cream Shops

PITTSBURGH (KDKA) -- Vanilla beans and vanilla extract are essential in many baking products, and it's a key ingredient in ice cream.

"May is usually one of the biggest months in ice cream," ice cream maker Kelley Costa told KDKA money editor Jon Delano on Monday afternoon.

But just when demand goes up for ice cream comes a shortage in the supply of vanilla because of a cyclone in Madagascar where 80 percent of vanilla beans are grown.

"Yes, a cyclone hit in March of this year that kind of compounded an already unfortunate situation," said Dan Hinkle, president of National Flavors LLC.

"Prices for vanilla beans are up, depending on who you ask, anywhere from four to eight times."

That's exactly what Costa is experiencing at her Gibsonia ice cream parlor, Churn, where she makes her own ice cream.

"Probably about five years ago we used to pay about $11 to get our vanilla beans which would probably yield us a few gallons of that.," she noted.

"And now, honestly, we pay about $150."

That's for the beans.

Vanilla extract has skyrocketed as well.

"Going back three years for a single fold gallon of extract was anywhere from $35 to $45 dollars," noted Hinkle. "Current market conditions would be $220 or more."

That is likely to impact prices in the weeks ahead -- perhaps 10 to 20 percent higher for ice cream.

For an individual cone, predicts Costa, "I definitely think prices could increase 25 to 50 cents."

It's not just vanilla ice cream using vanilla beans that will go up in price.

All forms of ice cream that use vanilla extract could also go up in price, and that's especially true of soft serve ice cream.

"A lot of the soft serve places are going to be affected a lot more."

The search is on for alternatives.

"We're trying to find substitutes for it, maybe flavorings and extracts, rather than just using the bean. But it definitely changes the taste of the product," said Costa.

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