I wanted to take a moment to give you another glimpse of the commodity and canned good market and where it continues to head. Unfortunately, I do not believe that I have any good news about prices stabilizing or coming down any time soon. I have been in purchasing for 23 years and I don't believe that I have ever seen commodities moving up dramatically almost week after week.
The commodity categories like oil, sugar, and flour are moving up steadily due to a few important factors. First, the weak dollar is not helping as other countries can come in and buy readily with the exchange rate in their favor. Second, weak crops in other countries are pushing up the demand in the U. S. Weather and its effects on the crop yields have put shortages in play. The big player is the crop shift as growers stop planting beans, vegetables, sugar beets, tomatoes, etc. and move to higher profit crops like corn (for ethanol) and soybeans. This shift is being felt throughout the food supply chain. Anything made with winter wheat, soybean oil, canola oil, corn syrup, sugar, etc. is moving up at a rapid rate.
Packaging, aluminum cans, and fuel are also pushing the prices up.
So, with that in mind, here is the news.
Pasta-the price per bushel for semolina flour is on the move. A dollar increase per bushel results in an increase of .025/lb increase in finished product. The cost per bushel is going up $7.00. This is approximately $3.50 per case on a 20# product.
Sugar will be moving up $2.00/cwt which is $1.00/bag on a 50# or .50/bag on a 25# beginning in April. Refinery explosion, fields being converted, and a processor shutting down is pushing prices up.
Flour has moved dramatically and continues to move up. No relief in sight until the winter wheat crops come in and that may not even be enough to offer relief. Prices have risen between 8-35% depending on the item. Items made from flour (crackers, bread, tortillas, etc.) are along for the ride up!
Rice is moving up 7-22% on parboiled, 4% broken and blends. Imported rice such as jasmine and basmati will be moving the same direction (if we can even procure the product as supplies are limited due to the farmers held back on production to follow worldwide rice market increases).
Oils continue to escalate. In a few short months soy has risen 48%, canola 43%, palm 29%, and cottonseed 71%. Again, any products made with these oils (mayo) will be going up as well.
Canned fruits and vegetables in general are experiencing shortages due to crop conditions from last year and fields being turned over to grow more profitable crops. Green beans are experiencing shortages in different cuts and varieties. Beets will experience outages across the board by midsummer. New crops don't come in until late summer, early fall. Corn is moving up anywhere from .50-$1.50 per case due to a less than budget crop last year. Sweet potatoes will be on allocation from canners as well as white potatoes as there is not enough product to meet demands. Canned (dry pack ) beans, especially kidneys, will be moving up $2.64 a case as raw product has seen a $20.00 per hundred weight increase. There has been a 20% reduction in crop size due to more profitable crops taking over bean acreage. Apples are tight as well as apricots and dark sweet pitted cherries. Marachino cherries will be going up approx. 3% due to corn syrup increases. Carrots also on allocation as the pack was below budget causing shortages across the board and increases as well. Corp. is encouraging us to not take on any new business in these areas as we do not have enough product to meet our U. S. Foodservice booking as it stands. Canners are enforcing allocations to help keep product in stock to make it to new pack. Make sure you do not get picked off and price accordingly.
Starkist tuna is on allocation and some varieties are not available. We have discontinued 2245348 pouch pack chunk light and will sub to 2377315 and 9038407 6/66.5z chunk light tuna will sub to 3333770. Yellowfin tuna continues to be in short supply. Pineapple continues to increase due to the weak dollar and raw material shortages worldwide. Any import item will be increasing due to the weakened U. S. dollar.
Other suppliers taking increases are Kraft (8-13%) on dressings and mayo. Heinz (5-8%) on all items due to corn syrup and packaging. Thirster juices as well as others due to shortages of apple and cranberry concentrates.
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