It will be cost effective to consider adding shrimp to the “barbie” at your restaurant this summer, as a new forecast says a big price drop will prove to be good for diners and restaurateurs alike.
The cost of shrimp 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 and holidays, according to the mid-year purchasing update from supply chain management firm SpenDifference. The lower shrimp cost is due to a rebound in supply. 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, said Andy Beaty, the firm’s director of seafood procurement. Now, the cost is approximately $4.25 a pound. Historically, shrimp production increases in summer and prices are at their lowest, he said, adding that 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.
Also encouraging for margin-concerned restaurant owners, costs for other commodities are also 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. 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 include:
Beef: Down 12-14 percent
Pork: Up 5-20 percent, but coming off 2015 record lows
Poultry: Chicken breast is down about three percent, however 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 six percent this year
Soy oil: Cost remains volatile due to demand
“Commodities can be very volatile,” Dove told MRM magazine. “There are multiple factors that could affect the supply chain. While we monitor on a daily basis to offer advice on being prepared to implement and adjust strategies, it is crucial for all restaurateurs to have a viable risk management plan in place and stay informed. Any trigger such as Avian Flu will influence what happens in commodities.”