DELCO FOODS
FEBRUARY 2022
VOL. 27, NO. 2
TOP RESTAURANT COMPLAINTS IN 2021 By Peter Thor, BFC
In the “new normal” of successive covid variants, labor and product shortages are demanding a lot of our time. With employee turnover and other issues to be concerned with, it’s easy to forget that successful businesses pay attention to the little things. Food quality and consistency counts for a lot, but not everything.
COMMODITIES STEPPING BACK By Peter Thor, BFC
The frustration is palpable! Consumers and producers alike are worn-out from the on-again and off-again nature of the Covid pandemic. Everyone is ready to get on with life as they remember it, but WAIT, the virus is back and infecting even vaccinated people. At this writing, record number of people are either getting sick or getting exposed, causing massive testing and sick-out issues across industries. The net effect is that commodities will be stepping back, with the effect that products and logistics will again be restricted throughout the supply chain. Don’t believe it? Witness record numbers of commercial flights being cancelled. You can bet without statistics that the trucking industry is having similar issues. Similar to the beginnings of Covid, processors are reporting large scale employees sick or in quarantine. According to the Urner Barry commodity reports, “Covid related plant worker absenteeism is trending in an upward direction, plant managers are once again forced to pick and choose what lines to focus their efforts on producing …”. The report further goes on to “underscore the ongoing challenges that most processors contend with when satisfying the call for (worker) labor-intensive lines”. To put this in perspective, the recent absenteeism is in addition to the estimated 20,000 open positions in foodservice distribution and 80,000 in trucking/logistics. Restaurant worker shortages nationally exceed a million. The near-term implications of the most recent Covid variant will be ingredient shortages, followed by upward cost basis. Our opinion is that the supplydemand imbalance will continue to fuel a seller’s market and price advances across a broad spectrum of industries. Details about inflation are beginning to emerge, with the greatest CPI change in energy. Overall consumer price inflation is reported to be 7%, a 40-year high. Wholesale prices are publicly reported to be 9.5% up year-over-year. Cost increases are real and most probably long term if not permanent in the protein and dairy industries. Pork cost basis is largely stable versus a year ago, albeit at higher levels, while (continued on page 2) A PROUD DISTRIBUTOR OF BELLISSIMO
According to Technomic Inc., which surveyed pizza restaurant customers across the country, 49% of customers typically order the same type of pizza every time so consistency of ingredients and preparation are key. Interestingly, (continued on page 3)
MARKET UPDATE Dairy
PRICE
LAST MONTH
DIFF
Cheese Blocks
$1.923
$1.923
$0.00
The cheese markets have been supported by active exports and expensive milk prices. CME spot butter market continues to surge higher on strong demand and unimpressive production rates.
Beef
PRICE
LAST MONTH
DIFF
50% Trimmings
$1.009
$1.014
($0.005)
Cattle weights are back below year-ago levels, and beef production may be further impacted by exceptionally tight cattle supplies and now lighter carcasses.
Poultry
PRICE
LAST MONTH
DIFF
Wings (Jumbo)
$2.705
$2.826
($0.121)
Elevated wing prices have the tender-wing spread historically narrow, which may leave buyers less than enthusiastic about boosting wing prices heading into late winter to early spring. As of 1/14/22
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