Where's the Beef 2023- A Sequel!

Where's the Beef 2023- A Sequel!

Just a reminder that I'll be hosting a 2023 outlook for the foodservice supply chain webinar on December 6th. You can learn more and register here- ZOOM.

The commodity markets remained somewhat erratic last week with CME cheese blocks continuing to move counter seasonally higher. The chicken markets moved downward last week which is not unusual for this time of the year. However, the steepness of the seasonal declines in chicken has been nothing short of remarkable.

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Note that the beef markets continue to track below year ago levels.

Most of the restaurant industry has benefited from wholesale beef markets tracking below year ago levels this fall. However, this market trend could pivot like Ross Geller next year. Check out the expectations for the size of the 2023 U.S. cattle herd and how it compares historically.

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Cattle herd next year near the smallest since I Love Lucy was the hit sitcom

For those keeping score, and you know someone's got to, the U.S. cattle herd next year is expected to be the smallest since 2015 and the third smallest in 71 (think Larry Allen) years. Beef output is expected to be down more than 6%. At times supplies could be extremely limited which could have us searching for beef like....

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This came out when I was a kid, now I look like Clara Peller

How will tighter beef supplies impact the supply chain? In the Datum FS Cost of Goods models, which include commodity as well as distribution and transportation inputs, burger concepts could be leading the pack like Ricky Bobby as far as inflation is concerned. By the way, Datum FS now has indexes for eight restaurant concepts so subscribers can benchmark and forecast their supply chain costs. Please direct message me to learn more.

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Cost of goods volatilty for concepts with notable beef exposure could be intense at times next year

As far as other cool stuff this week, what's cooler than a train? The tracks run across the street from my Grandma's house growing up. Anytime, and I mean anytime, I hear a train whistle it brings me back to my grandma and those tracks. As most of you know, trains are a vital part of our foodservice supply chain particularly at the grain farm level. If there is a strike, and obviously we all hope there isn't one, it could be incredibly disruptive. More to come.

I remain thankful for all of the reads, subscribes, likes and forwards. And I hope your Thanksgiving includes precious time with your loved ones and maybe even a train whistle. Thanks for reading!

John A. Gordon MAFF

Principal at Pacific Management Consulting Group, Restaurant Analyst and Management Consultant

2 年

Thank you David! Vitally good intel for planning!

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