There’s both good news and bad news in the US food economy even as inflation drops. Here are a few tidbits.
A UC study says $20 fast food wage did not increase prices much nor reduce employment
Despite fears that increasing the minimum wage to $20 for fast food workers in California would hurt business, a UC Institute for Research on Labor and Employment study
says the new standard has raised average pay of fast food workers by nearly 18 percent, but did not affect employment adversely. It did increase fast food prices, on a one-time basis only, by about 3.7 percent, or about 15 cents for a $4 item.
Assembly Bill 1228, in effect as of April 1, raised wages for hundreds of thousands of employees who had been earning an average of $16.21 per hour.
As of July, the state had around 750,000 fast food jobs 11,000 more than when the law took effect, according to the U.S. Bureau of Labor Statistics.
Many fast-food chains including McDonald’s, Wendy’s and Popeyes, have recently launched new lower priced value meals to attract customers.
Too many french fries
Lamb Weston, the largest producer of french fries in North America and a major supplier to fast-food chains, restaurants and grocery stores, is closing a production plant in Washington state. The company announced last week that it would lay off nearly 400 employees, or 4% of its workforce, and temporarily cut production lines in response to slowing customer demand.Demand for french fries has declined as consumers dine out less due to inflation
A recent survey found that 68% of consumers are trading down from restaurant meals to food from grocery stores to avoid rising costs. The survey found restaurant food prices rose 5.1% annually, versus 1.2% for grocery prices.
But this month potato prices are down.That could lower french fry prices going forward. Since midsummer, wholesale potatoe prices are down about 25%.
Fall baking prices trend lower
Whipping up those holiday cookies and cakes could catch a break this fall as wholesale prices for both butter and eggs moderate.
CME market butter prices are down to $2.67 a pound this week and egg prices in California have declined to around three dollars a dozen from five dollars a dozen earlier this summer. Add in the sugar where the price is down about 18% in the past year.
Grape farmers face a mixed picture
Shipments of table grapes are up this fall. Good news for farmers, but wine growers are facing what is called a brutal harvest.
USDA shipment numbers for the week of Aug. 25-31 showed total U.S. grape shipments of 4.52 million 19-pound cartons (85.87 million pounds), up 15% from the same week a year ago. California provided more than 99% of all fresh grape shipments, according to the USDA, with very light volume provided by Canada, Mexico, Italy and South Korea.
Through the end of August, season-to-date domestic shipments of central California table grapes totaled 25.4 million containers (482.6 million pounds), up 20% from the same time a year ago.
California Farm Bureau reports wine grape growers are not having a good season with low prices in part due to reduced demand for wine.
A downturn in wine sales worldwide has shaken California’s winegrape sector. After years of growth, U.S. sales have declined for three straight years, with experts forecasting the downward trend to continue.
There are plenty of culprits: a shift in messaging from health experts about how safe it is to consume low levels of alcohol; the industry’s failure to win over younger demographics; market share lost to seltzers and ready-to-drink cocktails; and home inventory left over from pandemic-time “pantry loading.”
The shrinking market has left wineries oversupplied and California’s vineyard acreage out of step with demand.
“It’s not going to be a favorable year for winegrape growers, particularly those who didn’t have contracts going into harvest,” said Jeff Bitter, president of Allied Grape Growers, a grower-owned marketing group that sells winegrapes for 400 growers across California.
Growers typically sign contracts with wineries before planting a vineyard. The contracts provide reliable sales and pricing for their grapes. When they expire, often after five or 10 years, growers negotiate new contracts or sell uncommitted grapes on the spot market.
But this year, with wineries needing to shed inventory, few are buying uncontracted grapes.
“They’re either not buying,” Bitter said, “or they’re setting a very low price and saying, ‘Take it or leave it.’”
Out-of-contract grapes may account for more than a third of the state’s crop,it is estimated. This year, most of those grapes—especially red varieties grown in the Central Valley—could end up on the ground.
Wine drinking is down but so is beer consumption -Oktoberfest feature non alcoholic beer
At this year’s Munich Oktoberfest event some of the booths are featuring alcohol free beer brands.
One report notes that the head brewmaster for Weihenstephan, the world’s oldest brewery, has a secret: He really likes alcohol-free beer.
” Even though he’s quick to say he obviously enjoys real beer more, Tobias Zollo says he savors alcohol-free beer when he’s working or eating lunch. It has the same taste but fewer calories than a soft drink, he said, thanks to the brewery’s process of evaporating the alcohol.
“You can’t drink beer every day — unfortunately,” he joked last week at the Bavarian state brewery in the German town of Freising, about 30 kilometers north of Munich.
Zollo isn’t alone in his appreciation for the sober beverage. Alcohol-free beer has been gaining popularity in recent years as beer consumption shrinks.
At Weihenstephan, which was founded as a brewery in 1040 by Benedictine monks, non-alcoholic wheat beer and lager now make up 10% of the volume. The increase over the last few years, since they started making alcohol-free drinks in the 1990s, mirrors the statistics for the rest of Germany’s beer industry.”
Bird flu continues to spread in Central Valley dairies and some cows die
The count this week is up to 81 California dairies that have been impacted by bird flu to date. The virus does not affect the milk that cows produce that is made safe by pasteurization.
This week,the California Department of Public Health reports that a third possible human case of bird flu has been identified in California. The case was identified in a Tulare County individual who had contact with infected dairy cattle. Specimens are being sent to the CDC to undergo confirmatory testing.
There is no known link or contact between this and the first two cases reported yesterday, suggesting only animal-to-human spread of the virus in California. All three individuals had contact with animals at three different farms. Like the first two cases, this individual also experienced mild symptoms, including eye redness or discharge (conjunctivitis). None of the dairy workers have been hospitalized. The risk to the general public remains low, but people who interact with infected animals, like dairy or poultry farm workers, are at higher risk of getting bird flu.
Experts are still not certain how the virus is spreading, but have settled on the fact that it all started with one animal. While the infected cows typically get better in a few weeks there is evidence that the cows may produce less milk afterwards.Further, dairy farms in California are reporting that the virus is infecting 50% to 60% of their herds, and 10% to 15% of the cows are dying from their infections,according to the California Dairy Quality Assurance Program(CDQAP).
A CDQAP report says at least half of new herd infections have not involved movement of live cows, but the spread happens presumably through contaminated equipment such as trailers or potentially visitors. How much risk is associated with movement of younger and nonlactating cows is under investigation. Sharing of employees with other dairy herds or poultry flocks appears to be a major risk factor. Sampling of wild migratory waterfowl (ducks, geese etc.) throughout the U.S. suggest that these birds are not spreading the disease.
It appears that the lactation curve is being “reset” in recovered cows. A typical example discussed was a cow producing roughly 100 lbs./day, dropping to about 20 lbs. a week later. Production climbed as the cow recovered, plateauing at about 70 to 80 lbs. Whether this approximate 20 to 30% decrease in production represents a permanent change due to scarring of the udder and will persist in the next lactation is unknown. Losses in total herd production varies greatly. The 3-day rolling average in two herds fell by 6% and 16% during the infection period.
Florida citrus industry faces devastation
Hurricane Milton threatens to inflict wind damage in the northern two-thirds of Florida’s citrus belt this week, according to Commodity Weather Group. Orange juice futures rose up to 4.3% on Monday due to the threat to Florida’s citrus industry.
Natural disasters and disease have cut Florida orange production an estimated 92 percent since 2003/04 says USDA.