In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
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Going into 2014, it looked like it would be a relatively benign year for commodity prices, aside from beef. However, prolonged droughts in California and Brazil, porcine epidemic diarrhea virus outbreaks, and instability in Ukraine have all conspired to make 2014 a food buyer’s nightmare.
California’s drought is driving up cattle, dairy and produce prices. Brazil’s drought has lit a fire under coffee, sugar and soybeans. Both corn and wheat have been affected by Russia’s meddling in Ukraine.
As a result, cattle futures hit record highs of $151.95/cwt on Feb. 28, rising 18.7 percent from a year ago. Hog futures set a record of $112.40/cwt on March 6, 42 percent above a year ago. Coffee futures hit $2.00 per pound on March 5, nearly doubling the November 2013 low of $1.01. And, after setting lows in January, soy oil, wheat and corn have risen 19.0 percent, 17.2 percent and 16.7 percent, respectively.
It’s shaping up to be another tough year.
Contact John T. Barone at [email protected].
