ArrowStream Foodservice Blog

In a recent post, David Maloni, ArrowStream's commodity expert, noted that June retail sales for foodservice and drinking establishments (restaurants) were 4 percent higher than the previous year. Even though that is considerable, it remains the smallest annual gain in the last 15 months. Further, the year-over-year gain in June restaurant traffic at just .9 percent was the smallest since January 2018.

"Perhaps this is due to higher menu prices," said Maloni. "During the month, menu prices were 3.1 percent higher vs. 2018, matching the biggest gain in nearly 11 years. Now part of this is due to higher labor costs and the rise in delivery for the industry. But the lackluster traffic growth raises concerns about the industry’s ability to continue to raise menu prices with this intensity."

David Maloni, ArrowStream's EVP of Analytics and commodities expert, reported that May's chicken production was 2.2 percent better than 2018 with a year-to-date output higher by 1.2 percent. 

"Despite this year’s lackluster chicken production growth and inflated prices, chicken wing consumption has remained resilient," said Maloni. "In May, U.S. chicken wing disappearance was 5.3 percent bigger than the prior year and the second largest for any month on record. And as the chart shows, the 12-month average of wing disappearance stands north of 2.5 percent for the first time in 15 months. We still expect better year-over-year gains in output to weigh on wing prices in the coming months. But the downside will be tempered if consumption remains strong, particularly if retailers step up take-out wing feature activity like they did in May and early June."

ArrowStream commodities expert, David Maloni, continues to have concerns about domestic pork supplies in the coming months due to China’s protein supply gap. Discussed in today's Weekly Commodity Report, Maloni believes this may also include pork bellies.

"There is no indication that this is curbing domestic bacon demand," said Maloni. "In April, U.S. pork-belly disappearance (think: consumption) was 6.9 percent bigger than the previous year, marking the seventh consecutive month of annual gains. And as the chart shows, the 12-month sum of pork-belly disappearance stands near 4 percent above 2018 near trend line growth. The risk in belly prices in the next several months is to the upside."