Food loadings up 0.2% in May
July 16, 2012
April loadings were revised significantly higher and that has noticeably improved our outlook for 2012. Despite that good news we still expect food loadings to remain negative for the year as we see very limited growth for the remainder of 2012. Food loadings in May rose just 0.2%, after jumping 1.2% in April, to 8.589 million loadings. Year-over-year growth remains negative but has become less negative of late, down 0.9% in May.
This is a more non-cyclical market segment and generally stays within a narrow band. People always have to eat. The food cycle is now at the point where we will see growth well below industry averages. We anticipate that volume levels will be essentially flat for the next year before starting to move higher once we get to the end of 2013.
As stated above, food movements tend to be less cyclical than other markets. On an annual basis volumes grew between 1% and 2% from 2008 to 2011.Food freight was relatively stable from 2006 to 2008. Volumes were surprisingly strong throughout 2008. During the downturn volumes only had 2 quarters of significant quarter-over-quarter declines. This was during the middle of 2009. It was also the only truck segment to show growth in 2009, up 2.1%. Volumes rebounded solidly during 2010, but only recorded growth of 1.4% for the full year. Volumes slowed throughout 2011 but started the year at a high level so annual growth improved to 1.9%. The revised surge in April has improved the likelihood that we have finally bottomed out of this slump.
We don’t expect to see significant quarter-over-quarter increases in loadings until late 2013, and year-over-year growth will not return to solidly positive territory until we are into 2013. After several years of growth, food loadings are looking to fall 0.6% in 2012 (previously -1.7%) before turning (slightly) positive and growing 0.8% in 2013 and 1.6% in 2014.
Food Products are movements of processed foods. This includes such items as cut meats, dairy products, canned goods, milled grain products, sugars, and beverages. It does not include farmed crops or livestock. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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