The poultry market has taken a dramatic turn for the worse since our market update in July. The Delta variant of the Covid-19 virus is having a significant impact on the labor pool at chicken processing plants across the country.

All the major packers/processors are struggling to maintain a regular work shift and production schedules. The shortage of labor means processors must select which products will be on their production schedule and that ultimately leads to a shortage of other products.

Higher transportation and packaging costs remain, and shipping delays continue to disrupt the supply chain. There is no item we can say with confidence that there is a good supply as the situation can change so quickly.

• The most pressing issue today is the availability of Tray Pack Chicken Thighs as supply is almost non-existent.
• The supply on Boneless Skin on Thigh, Boneless Skinless Thigh and Boneless Skin on Legmeat is also affected as the processors do not have the labor to bone out the leg quarters. We’re trying to keep ahead of this with orders far in advance, but ongoing delays may have an impact on our ability to keep it in stock.
• Wings remain a sought-after item, especially jumbo sized, and any decrease in prices we were hopeful for has not materialized.

It is now more challenging to purchase chicken parts than last year, and any improvement is dependent on getting workers back in the plants.

Like the poultry market, the pork market has also taken a turn from last month. Although not as dramatic, we are seeing an uptick in prices as labor continues to affect every aspect of the supply chain. Shipping delays are also affecting the supply chain.

• Butts Boneless & Bone-In were expected to decrease in August but now we foresee an increase of $.10-$.25/lbs.
• Loin Back Rib prices have stabilized but availability remains a challenge and will continue until at least Labor Day.

Both the poultry and pork industries are grappling with the labor shortages, but it is having a more drastic impact on the poultry group. The result is supply and prices have reverted to last year’s volatility where they change weekly or even daily. Most important is we supply our regular customers and not take on any new business unless we are certain we have the extra product.

Overall beef prices will be increasing significantly going forward for all cuts with consumer demand surging. Labor availability remains the most significant issue facing meat processors as plants are not able to operate at full capacity. The shortage of workers has also affected manufacturer’s product mixes resulting in product shortages and in some cases, item rationalization.

• Prime and premium (Sterling Silver, PSA, CAB, etc.) graded beef is in short supply with cattle being harvested sooner to meet consumer demand.
• Pricing for beef trimmings which are used to produce ground beef, beef patties, sausages, etc. softened earlier this month due to strong pushback from retailers. However, over the past few weeks pricing has been climbing with retailers stocking up in anticipation of increased consumer demand resulting from the Delta variant affecting dine in traffic at restaurants.
• Rib prices which decreased for the past month are unfortunately returning to the unprecedented levels that we were just at. Just securing product will be the biggest challenge as both the retail and foodservice segments compete for inventory.
• Striploin pricing has decreased substantially since the beginning of July but has started to increase as we exit the summer months. Additionally, with rib prices returning to staggering levels there is an expectation that retailers may turn to striploins, putting additional pressure on future availability and pricing.
• Flap meat prices have been on the decline for the past 2 months but are trending upward moving forward due to increased bookings in the retail sector.
• Chuck roll prices are at an all-time high and have increased by $.90/lbs. since the beginning of July.
• Chuck flat pricing will remain steady through September. Availability continues to be a challenge as demand has not waned despite the record high prices.
• Short Rib prices show no signs of declining with demand continuing to remain strong even at the extraordinary levels that we are already at. Prices have increased $1.52/lbs. since January as raw material costs continue to rise and will be increasing by another $1.25/lbs. by the end of the month.
• Oxtail prices have remained stable for the past month but are poised to increase as we enter the colder winter months.

Even with the record high prices across all segments of seafood products, demand continues to be robust both domestically and internationally. International suppliers are experiencing labor shortages due to rising cases of Covid-19 reducing their output.

The more impactful issue right now for most of the imported seafood market is. Delays are on both ends, at the international supplier end and delays at United States ports due to:

• Lack of shipping containers.
• Delay at the ports loading the containers onto ships.
• Delay at the ports unloading the containers off the ships.
• Lack of chassis to haul the containers out of the ports.
• Delay unloading the containers and getting the product into cold storage.

These “Choke” points are causing delays of between two weeks to two months, and that is not considering supplier delays.

• Crab items are still in short supply:
  • King Crab – Remains short as most are going to the live market at higher prices and they require less labor.
  • Blue Swimming Crabmeat – It is not anticipated to improve until the fall and we are currently on allocation.
• Warm Water Lobster Tails are being offered at prices are approximately $3.00-$4.00/lbs. higher than North Atlantic Tails.
• Black Tiger Shrimp supply continues to trend down and finding product remains difficult and prices are high.
• White Shrimp is in a better position, but shipping delays are causing disruptions throughout the world.
• Mahimahi supply remains tight, especially fillets, and prices are continuing to increase. The South American season is poised to open in October, but speculation is that prices will start at a higher level that what it is now.
• Squid is a huge challenge as supply is short and the catch continues to be poor.

The labor shortage continues to plague seafood producing countries. Combined with prolonged shipping delays, supply remains unpredictable. We have confirmed orders with our vendors weeks and months out, but they are either in transit or being produced so nothing is guaranteed to be on time.