COVID-19 has transformed the way people eat food and that is having wide-ranging impacts on what farm products are hot sellers and what are flops, says a food industry analyst.
Canadian consumers used to spend about one-third of their food budget on meals prepared outside their homes.
In the United States, it was closer to half, said Mike von Massow, associate professor of food, agriculture and resource economics at the University of Guelph.
He has read reports that 80 to 90 percent of that food service business has evaporated due to the global pandemic.
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Restaurants Canada estimates the foodservice sector has lost 800,000 of its 1.2 million jobs or two-thirds of its workforce.
Half of the restaurants in the country are temporarily closed and nearly one in 10 permanently. People are instead choosing to eat at home, avoiding the risk of coming into contact with somebody infected with the virus.
That seismic shift in where we are chowing down is having a profound impact on meat, dairy and grain consumption, said Massow.
People eat more chicken at restaurants than they do at home and restaurants want bigger chickens, while grocery stores sell smaller birds for roasting.
But it is the component part of the bird that poses the biggest dilemma.
“We’ll probably end up wondering what the heck to do with all these wings because no one is going to the pub,” said Massow.
In general, people will be buying cheaper cuts of meat at the grocery store because many are feeling the financial pinch of wage rollbacks or layoffs.
That means there could be fewer steaks and more hamburgers on the grill during barbecue season.
That will force prices down for the more expensive cuts of meat. However, ground beef prices could also be under pressure because fast food burger sales have been hammered.
Pork might be somewhat immune from the shift from restaurant to home meals because there isn’t a lot of pork served in quick service restaurants, said Massow.
“Although, the demand for bacon is probably going to take a real kicking because we eat a lot more bacon in restaurants than we do at home,” he said.
Egg consumption will falter because people gobble up more eggs in restaurants and hotels than they do at home.
“If I’m travelling, I eat eggs for breakfast every day. They’re quick, they’re easy and they’re available,” said Massow.
The food service industry tends to purchase cartons of liquid eggs, which means farmers could have trouble finding a new home for their off-spec eggs.
Andrew Campbell, who operates Bellson Farms, a dairy operation in Strathroy, Ont., said the initial response to the pandemic was a sharp rise in fluid milk consumption as consumers stockpiled the product.
But that surge has subsided and a big challenge has emerged on the cream side of the business as major customers like Tim Hortons and Starbucks are buying a fraction of what they used to consume.
“Those two together make up an enormous market for cream,” he said.
His wife used to buy Tim Hortons’ coffee with 18 percent fat. She is now making her own cup at home with cream containing five percent fat.
“If everybody is doing that or they’re drinking one less double-double in a day, obviously that turns into a big impact,” said Campbell.
The first response was to turn the cream into butter, which has a longer shelf life, but the butter market is now at maximum capacity.
Ontario dairy growers are being forced to dump 48 hours of production on a rotating basis and many operations are being forced to cull a cow or two.
That means more ground beef on the market and less feed grain consumption.
“There will be a bit of a ripple effect through other sectors,” he said.
Massow said it is more difficult to assess the impact on the grain sector because most of what farmers grow is exported to markets where the restaurant business is not as big as it is in North America.
Perhaps the biggest impact might be on high oleic canola oil sales. The product has displaced partially hydrogenated soybean oil as the preferred frying oil used in the restaurant business.
There has been a temporary surge in milling wheat demand due to the run on flour in grocery stores but that is being offset by slumping demand from bakers and food processors making products for the restaurant business.
Massow believes that is a temporary shift.
“(People) will bake enthusiastically for a week or two and then realize they’re still able to get bread and other things at the grocery store,” he said.
He figures pulse demand may increase slightly because people have more time at home to cook dishes like lentils and beans and are starting to experiment more with their meals.
