Markets On The Move A detailed look at economic implications
Crude Oil
Labor
Emerging Concerns
• Labor shortages will continue to impact our supply, resulting in allocations, OOS, etc. These shortages are also driving wage increases, increasing costs for suppliers. Federal aid is declining, so we might see long term relief, however the shortages will continue in the short term
• Droughts in western USA have been a concern and it could last for a long period of time, this could lead to high price increases on crop commodities with direct impact on, corn, soybeans and wheat.
WOGS
Proteins and Grains
• WOG prices rose again in P8, just past their previous 2022 peak from P7. Several suppliers have expressed that they are seeing decreased demand for WOGs, and supply appears to have loosened considerably. We have filled the Hannaford supply gap left by George’s as part of a larger strategic partnership with Tyson, and currently have no impending supply gaps in WOGs for any of our great local brands. • We are seeing significant declines on wings which is the biggest decline we have seen since pre- pandemic. • Egg prices dropped from their P7 peak but are still far above historical prices from the past 2 years. Prices are projected to remain stable at this level before returning to normal historical levels near the beginning of Q1 2023. • Grain prices remained relatively low after their drop in P7, though still higher than historical averages for Wheat, Soybeans, and Corn. The export agreement between Ukraine, Russia, Turkey, and the UN appears to be holding; 27 ships so far have left Ukraine. If the agreement holds (or, in a perfect world, expands to additional shipments and products) we could start using the resulting market shift as leverage to push for price relief.
Wings
Freight, Fuel, & Resin
• Cost of transportation and freight continues to stay high, driven by labor shortage. However, the Crude Oil market has dropped below $100 a barrel. Diesel fuel is now below $4.00 a gallon for national average. • Packaging prices continue to increase. Natural gas price is a key contributor as it is a common ingredient for resin production. Natural gas prices remained high throughout P8.
Eggs
Sources: PDL Economic Insights Team, gasworld.com
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