DENVER--(BUSINESS WIRE)--The cost of shrimp commonly used in restaurants has continued to come off of the record highs that were seen in recent years, making this the ideal time for chains to lock in prices as they prepare for late 2016 promotions, according to the mid-year purchasing update from supply chain management firm SpenDifference.
Costs of other commodities are forecast to maintain current levels through the end of year, with some projected to decrease in 2017.
The lower shrimp cost is due to a rebound in supply, said Andy Beaty, the firm’s director of seafood procurement. Harvests fell dramatically in 2013, when a disease caused large scale die-offs of farm-raised shrimp and forced prices up to nearly $7 a pound for medium-sized peeled and deveined shrimp, a size found on many menus. Now, the cost is approximately $4.25 a pound. Historically, shrimp production increases in summer and prices are at their lowest, Beaty said.
“This is the time to stock up for year-end holiday menus and promotions geared to college football playoffs and the Super Bowl,” he said. “Prices could begin to rise after summer when supply falls.”
Other seafood items are favorably priced now, especially cod and pollock, which Beaty said are “extremely affordable” for chains that want to expand their menus with fish entrees. Costs for other commodities are in “great shape,” said DeWayne Dove, vice president of procurement for SpenDifference.
“Prices for beef, pork and poultry are all at levels where restaurant chains can add protein offerings at lower menu prices to generate more traffic,” he said. “This is a tremendous year for commodity purchases.” He added that in light of lower costs, chains are adding both limited-time and permanent menu items.
Other forecast highlights:
- Beef: Down 12-14 percent
- Pork: Up 5-20 percent, but it is coming off 2015’s record low prices
- Poultry: Chicken breast is down about 3 percent; heavy demand later this year for chicken wings could force an increase. Turkey has returned to levels seen before the 2015 avian flu outbreak.
- Corn: Still priced below $4 a bushel, well below last year
- Cheese: Down 6 percent this year
- Soy oil: Cost remains volatile due to demand
Based in Denver, SpenDifference, LLC, is a supply chain management firm that partners with restaurant companies of varying sizes, providing a wide array of supply chain support services that manage costs and support growth. It currently works with approximately two dozen regional, national and international brands that represent more than $1.3 billion annually in purchasing. Visit www.spendifference.com for more information.