Executive Briefings

Despite Avian Flu, Chicken Cost Expected to Decrease, But Increase Seen for Cost of Eggs

While operators need to closely monitor the avian flu, which has caused the destruction of more than 30 million chickens and turkeys, chicken production is up 3.1 percent compared to last year, says DeWayne Dove, vice president of risk management for SpenDifference. This increase in production, coupled with a decrease in exports, has industry experts forecasting a 6 percent decrease in cost versus a year ago. Eggs, however, are in short supply, with prices up more than 10 percent. Tom Turkey breast is up approximately 10 percent.

Despite Avian Flu, Chicken Cost Expected to Decrease, But Increase Seen for Cost of Eggs

Soy oil is 10 percent lower in cost compared to 2014. The cost of cheese is 22 percent lower, and butter is 18 percent less than last year. As a result, SpenDifference has taken positions and purchased raw materials on the majority of its clients' needs for 2015.

Beef costs jumped over 20 percent in 2014 and have held at those levels through 2015 with modest increases projected for the rest of the year. Relief is possible in 2016 as the industry rebuilds herds.

The greatest opportunity for center-of-the-plate items is pork. Production of pork is forecasted to be up 6 percent compared with this time last year, and the costs of pork bellies and pork for sausage are both lower by double digits, Dove said. "This is an opportune time, even for operators who are heavy users of beef, to add more pork entrees to the menu and apply sound risk management strategies to other key commodities that are offering optimal buying levels," he added.

Source: SpenDifference

Soy oil is 10 percent lower in cost compared to 2014. The cost of cheese is 22 percent lower, and butter is 18 percent less than last year. As a result, SpenDifference has taken positions and purchased raw materials on the majority of its clients' needs for 2015.

Beef costs jumped over 20 percent in 2014 and have held at those levels through 2015 with modest increases projected for the rest of the year. Relief is possible in 2016 as the industry rebuilds herds.

The greatest opportunity for center-of-the-plate items is pork. Production of pork is forecasted to be up 6 percent compared with this time last year, and the costs of pork bellies and pork for sausage are both lower by double digits, Dove said. "This is an opportune time, even for operators who are heavy users of beef, to add more pork entrees to the menu and apply sound risk management strategies to other key commodities that are offering optimal buying levels," he added.

Source: SpenDifference

Despite Avian Flu, Chicken Cost Expected to Decrease, But Increase Seen for Cost of Eggs