Fats, Oils, & Fuels Webinar 3/2/21: Customer Q&A
Video shorts from the Fats, Oils, & Fuels Webinar Report Our team of Senior Analysts break down questions from the live Webinar audience during the call on Tuesday, March...
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U.S. retail sales declined by 1.4% in December. Despite the lack of discretionary spending during the holiday season, consumers continued to purchase food at supermarkets at record rates. In December, grocery store spending increase by nearly 8% year over year, which was the smallest monthly increase since February. For the year, grocery store spending hit a record 757.3 billion, up 74-billion year over year, or 10.8%. The increase in grocery store sales came at the expense of restaurant sales, which were down as much as 49% year over year in April and 6% year over year in October. On average, retail restaurant sales were down approximately 15% year over year, according to The Jacobsen.
As the Biden Administration takes over in January, there is likely to be a further uptick in grocery store sales. This scenario should unfold as governments in blue states conform to the new administration’s guidelines to rid the United States of the virus. Spending should also increase as the government looks to provide $1,400 in stimulus checks directly to consumers.
As consumers shop at grocery stores, they might find that conventional animal proteins are more expensive do the rising cost of feed (corn and soybean meal). This increase has not spilled over into organic feed but has increased the flat price of non-GMO feed. Recall, most consumers of non-GMO feed lock in a flat price, which is a non-GMO premium plus the underlying conventional flat-price. While most broiler, layer, pork, beef, and dairy operations likely hedged their exposure, the rise in corn and soybeans’ price will eventually spill over into the price of non-GMO and conventional animal proteins.
The demand reflected by sales of animal proteins at supermarkets and big-box stores surged in December. According to The Jacobsen, organic animal protein sales rose to the highest levels seen since March of 2020. Non-GMO animal protein sales also increased sharply, nearly matching September levels. Organic animal protein sales increased 15% year over year, according to The Jacobsen. The Jacobsen is forecasting animal protein sales will rise approximately 7% year over year in 2021.