`Trucker Shortage, Pay Increases Hit U.S. Olive Oil Market - Olive Oil Times

Trucker Shortage, Pay Increases Hit U.S. Olive Oil Market

Jul. 29, 2021
Lisa Anderson

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Olive oil prices in the United States report­edly have risen by 30 per­cent due to steep wage increases for – and a short­age of – truck dri­vers.

This shock­ing sta­tis­tic was recently revealed in the New York Post by Christopher Pappas, CEO of Chefs’ Warehouse, a sup­plier for food busi­nesses across the coun­try.

The major­ity of the increase is absorbed by the con­sumers due to esca­lat­ing ship­ping costs and sup­ply costs.- Cathy Bernell, pres­i­dent, Texas Association of Olive Oil

Before the onset of the Covid-19 pan­demic, there was already a short­age of dri­vers, and around 88,300 trucker jobs were shed in April 2020 dur­ing the early stages of the pan­demic.

However, a sharp rise in online shop­ping result­ing from the coro­n­avirus out­break drove up the demand for truck dri­vers, caus­ing a con­cern­ing short­age of these work­ers. In April this year, there were 63,000 vacant posi­tions for truck­ers.

According to Business Insider, the increased demand resulted in a sharp pay hike for dri­vers, incen­tiviz­ing them to spend less time on the road and more time at home. This com­pounded the trucker short­age.

In addi­tion to being faced with pay­ing recent wage increases, food dis­trib­u­tors had to start pay­ing inter­me­di­aries to recruit dri­vers, push­ing their expenses up even more. This has left both con­sumers and pro­duc­ers left to foot the bill.

The major­ity of the increase is absorbed by the con­sumers due to esca­lat­ing ship­ping costs and sup­ply costs,” Cathy Bernell, the Texas Association of Olive Oil pres­i­dent, told Olive Oil Times. Retail and whole­sale pur­chasers are incur­ring these addi­tional costs as well, but they are ulti­mately passed onto the con­sumer.”

An infor­mal poll of Texas olive pro­duc­ers shows that the pro­duc­ers do not add a sur­charge to their ship­ping costs, but charge the con­sumer the same rate that the ship­ping com­pa­nies are charg­ing, so the feed­back has been one of under­stand­ing albeit frus­tra­tion,” she added.

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From an indus­try per­spec­tive, we will con­tinue to gauge the impact of these price increases along with feed­back and input from our Texas olive grow­ers,” Bernell con­tin­ued.

However, accord­ing to Bernell, the price hike has not slowed down the sales of olive oil in Texas.

Given the cur­rent cir­cum­stances of the chang­ing food mar­kets and con­sumer pur­chas­ing pref­er­ences, Texas olive oil has remained a dynamic and sought-after food,” she said.

Joseph R. Profaci, the exec­u­tive direc­tor of the North American Olive Oil Association (NAOOA), told Olive Oil Times that many NAOOA mem­bers have expressed con­cern about trans­porta­tion costs.

However, unlike Bernell, he said feed­back from his association’s mem­bers revealed pro­duc­ers and dis­trib­u­tors were left to cover the price hike.

My mem­bers report that accord­ing to national syn­di­cated data for the last 24 weeks, con­sumer prices for olive oils are actu­ally lower by about four per­cent, rep­re­sent­ing in part increased lev­els of pro­mo­tional activ­ity over last year,” Profaci said.

So despite all these addi­tional costs, olive oil pro­duc­ers and dis­trib­u­tors have been con­strained to absorb most if not all of the increased costs,” he added.

Profaci said one rea­son for this is that many retail­ers won’t accept increases greater than 10 per­cent under these con­di­tions for fear of being charged with price goug­ing.”

Profaci added that a more sig­nif­i­cant con­cern than increased trans­porta­tion costs for NAOOA mem­bers was the mar­ket con­di­tions of sup­ply and demand,” which have led to increases of 30 per­cent or more in the costs of olive oil raw mate­ri­als.”

He said the domes­tic and global demand for olive oil spiked last year with con­sumers cook­ing at home at lev­els not seen in decades, and their gro­cery choices were strongly influ­enced by an inter­est in health.”

However, he added that global olive oil pro­duc­tion has been rel­a­tively flat.”

While con­sump­tion has dropped nine per­cent com­pared to the same period last year at the height of the pan­demic, it is still up dou­ble dig­its over the same period the year before that,” Profaci said.





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