Supply chain pressures are easing

The commodity markets remained ever-changing last week with chicken breast prices continuing to rise while the wing markets surprisingly moved downward. And don't look now but the table egg markets are on the increase once again climbing to their most expensive level last week since early February.

For those keeping score, need I say more, the USDA large table egg market has risen 32 (think: Franco Harris...RIP) percent since bottoming six weeks ago. As we have discussed, table egg output is still recovering from last year's avian flu impact on the industry. But also playing a part here is the typical seasonal increase in demand for Easter. History suggests that egg prices should head lower in April. That said, the USDA reduced their 2023 egg production forecast once again earlier this month. Yes, table egg output this year is still projected to rise rather nicely at 3.6 percent. But check out how the USDA's forecast for 2023 compares to 2019-2021 levels below. The chart suggests that egg output this year will still be insufficient. It may be 2024 before egg production fully recovers.

As far as other cool stuff this week, let me introduce to you the Datum FS Foodservice Supply Chain Stress Index. This index is made up of five categories, including commodity inflation, labor inflation in the chain, domestic freight rates, foodservice sales and other world supply chain pressures captured in the New York Fed’s overall Supply Chain Pressure Index. Readers will notice that?the pressure increased substantially over the last few years (cue Gomer, “Surprise, surprise, surprise”), but note the trend over the last several months: The pressure is easing. Look for me to expound more on this index in further issues. Yes, the excitement you're feeling is real!

Datum FS now has forecasts for over 50 commodities comprising various beef, dairy, grains, pork and chicken markets. If you would like to learn more about a complimentary trial to the forecasts and commentary or about Datum FS services direct message me. Thanks for reading.