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Entegra Cost Outlook Fall 2026/Winter 2027

TABLE OF CONTENTS A message from CEO Paul McArdle

Introduction by Chief Procurement Officer David Kourie

Understanding inflation indices

Executive summary

High-level inflation overview by category

Soft commodities

Produce outlook

Service, equipment, and supplies outlook

Solutions from Entegra

The contents of this publication are provided by AES (unless otherwise noted). AES provides market data analysis across agricultural commodities (focusing on proteins and grains; includes historical view and future projections), macro-economic highlights, packaging information, and freight and transportation at weekly and monthly intervals with a monthly call to review the market. On a quarterly basis we also receive a specialty commodity price update which includes information on an additional 50 items including fruits, vegetables, nuts, and major spices.

A message from CEO Paul McArdle

At Entegra, our focus goes beyond helping clients manage costs. Our role is to help hospitality-driven businesses make smarter decisions through stronger supplier partnerships, procurement expertise, culinary insights, and data-driven tools. The Cost Outlook is one of the ways we support that goal. In the pages that follow, you'll find market intelligence designed to help you better understand the forces shaping your business in the months ahead. From commodities and transportation to labor, packaging, and broader economic conditions ― this report brings together the market data and insights that matter most to operators today. Whether you're evaluating purchasing strategies, managing margins, or considering new approaches to your business overall, we hope this report provides valuable perspective as you navigate the road ahead. Join us for the live Cost Outlook webinar, where our experts will share additional perspectives and answer your questions based on the analysis in this report. When you register, be sure to add a question for us to answer at the event. I also encourage you to explore the broader range of solutions available through Entegra, including: • Entegra PurchasingIQ: Use this one-stop GPO client platform for timely purchasing insights and reporting to support informed business decisions.

Paul McArdle

Chief Executive Officer, North America Entegra

• Entegra Culinary Consulting: Leverage practical culinary expertise to improve kitchen efficiencies and manage costs, all while creating exceptional guest experiences. • Entegra Shopping Assistant: Identify Entegra-contracted items while you shop in real time, and with premium options, receive AI-powered alternative recommendations. Thank you for your continued trust in Entegra. We remain committed to helping you achieve stronger business results. Please reach out to an Entegra representative with your questions or comments – we love hearing from you.

Welcome to the

Entegra Cost Outlook The foodservice industry continues to navigate a changing cost environment. While inflation has eased from the highs of the past few years, many costs remain elevated. Labor, food, packaging, utilities, and transportation continue to put pressure on operating budgets, while customers remain focused on value. The good news is that many commodity markets have become more stable. However, some categories are still experiencing price swings due to weather, global supply chain challenges, and geopolitical events. Labor costs also remain a key consideration as employers continue to compete for talent. As we prepare for 2027, now is the time to make informed, strategic decisions that help drive results. As we like to say, facts are friendly! Use the insights in Entegra’s Cost Outlook to identify opportunities, adjust where needed, and make decisions that support your bottom line. Our Supply Management team continuously monitors market trends and analyzes a wide range of data to provide the most accurate forecasts and insights possible. While no one can predict every market movement, our goal is to equip you with timely, reliable information to help you plan with confidence. Thank you for your continued partnership and trust in the Supply Management team.

David Kourie

Chief Procurement Officer, Sodexo & SVP, Supply Management Entegra

Understanding inflation indices

There are multiple indices used to measure and report on inflation. CPI – Consumer Price Index Consumer Price Index for Urban Consumers

Food at Home / Food Away from Home

The Consumer Price Index for All Urban Consumers (CPI-U) measures changes in U.S. consumer prices based on a representative basket of goods and services.

The Consumer Price Index (CPI) can be further broken down into Food at Home (FAH) and Food Away from Home (FAFH).

• CPI-U covers 93% of the U.S. population based on location and population size. This index only measures inflation as experienced by consumers, not producers. • This basket of goods and services is compiled by the Bureau of Labor Statistics, which tracks 94,000 prices monthly to assess inflation for more than 200 categories of products and services. • Broad consumer spending categories like food, energy, apparel, and services include subcategories tracking inflation for everything from apples and premium unleaded gasoline to men's underwear and funerals.

• The CPI for Food at Home (FAH) includes categories such as cereals and bakery products, meats, poultry, fish, eggs, dairy, fruits and vegetables, and beverages that are designed for home consumption. It also includes products that are obtained through traditional food shopping outlets such as grocery stores, convenience stores, and supercenters. • This index covers the “sale of food meant for home or off-site consumption” – food at home. • The CPI Food Away from Home (FAFH) covers much of Entegra's business. This includes full-service restaurants, limited-service restaurants, drinking places, hotels, motels, retail stores, vending machines, recreational places, schools, and colleges. • This index covers the “sale of food meant for immediate consumption” – generally onsite and away from home.

PPI – Producer Price Index This index resembles the CPI and reflects changes over time. However, instead of retail prices, the PPI provides a measure of the average prices paid to domestic producers for their output. • Think…“industry,” “farm,” and “wholesale,” instead of individual consumer. • PPIs are reported for nearly every industry in the goods-producing sector of the economy. • The PPI is typically more volatile than the CPI as price volatility decreases as products move from farm, to wholesale, to retail. • Additionally, the CPI typically lags movements in the PPI. When reporting on inflation, Entegra uses a blended approach from all indices designed to cover all various Entegra contract types and segment-specific requirements.

Executive summary Tariffs Following the Supreme Court’s decision to limit the use of the International Economic Emergency Powers Act to impose tariff policy, the administration has pivoted toward other authorities to impose tariff policy. Section 122 authority was used to impose a broad based 10% tariff, but these tariffs expired July 24th, 2026. Following the expiration of the Section 122 tariffs, Section 301 authority (related to unfair trade practices) has been used to impose a 10-12.5% tariff on 60 countries and a 25% tariff on Brazil. Notably, most agricultural and food goods remain exempt from these tariffs and are expected to remain exempt from future tariffs as well. It is possible that additional Section 301 tariffs will be applied in the future as well. Section 338 authority (related to discrimination against U.S. commerce) has also been used to impose a 50% tariff on select goods from Canada, of which the impact on agricultural and food goods is fairly limited. The tariff situation is fluid, and tariff policy uncertainty is expected to persist, though recent court rulings will likely constrain the magnitude of future tariff actions. The July 1 deadline to renew the United States-Mexico-Canada Agreement (USMCA) passed without an extension or signed agreement after President Trump announced that he would not renew the deal, despite Canada and Mexico expressing support for its renewal. Without an agreement to extend USMCA, it remains in place as is and enters a cycle of annual reviews during which all parties can either agree to extend USMCA past the current expiration date of 2036 or continue with a cycle of annual reviews. While USMCA is here to stay (at least for now), this is likely not the end of trade talks, with future trade negotiations expected to be primarily bilateral discussions.

Macroeconomic outlook • The U.S. economy is forecast to continue to grow during both 2026 (+1.5%) and 2027 (+2.2%). • Strong spending is expected to lead consumer demand, while investment spending (read: build-out of data centers) will remain robust.

• The key unknown risk relates to the potential continued closure of the Strait of Hormuz and consequent increases in the price of crude oil and other energy products. • Uncertainty around tariffs and immigration policy also remains at risk.

• Inflation has edged higher during 2026, supported by economic growth and higher crude oil prices. Inflation should remain in check during 2027 (+2-3%) but is at risk of rising significantly (+4-6%) if crude oil prices surge to over $120/barrel.

• Consumer spending is expected to support economic growth, with higher-income households continuing to drive the gains (“K-shaped” recovery).

Inflation drivers beyond tariffs Energy

Currency

Labor Market

Other Risks/Opportunities

Weekly crude oil futures

Crude oil prices during the remainder of 2026 and through 2027 will be dependent upon how much crude oil (and other energy products) are able to move through the Strait of Hormuz. However, through the end of 2027, it is more likely that there will be disruptions that lead to greater volatility and higher prices. U.S. consumers spend over $400M/ year on gasoline, making energy costs a key inflation factor. Given this vagueness in the price outlook for crude oil, it is difficult to confidently predict prospects for inflation.

Energy

Weekly Prices: On Road diesel

• Continued volatility, with nearby NYMEX crude oil futures potentially ranging from an annual average of $60 to over $90 per barrel. • 2027 point forecasts:

› Crude oil: $75/barrel (vs. $80.70 last year) › Gasoline: $3.58/gallon (vs. $3.80 last year) › On-road diesel: $4.36/gallon (vs. $4.66 last year)

Energy CONTINUED

Weekly Prices: Retail Gasoline

Natural gas demand is rising due to increased electricity use, but inventories remain adequate. Futures during 2027 are expected to average $3.49, about unchanged from a year ago.

Weekly Prices: Natural gas

Currency

The U.S. dollar has recovered from 2025 lows but remains largely range-bound. Despite the headwinds of widening U.S. deficits, a strong U.S. economy and on-going tariff drama, the U.S. Dollar Index has been in a narrow 98-102 range over the past year. With interest rates likely to rise during the next 12-18 months, the dollar should trend modestly higher.

US Dollar Index (DXY)

Labor market

• Labor availability — driven by demographic trends — will remain a long-term challenge.

› Job growth slowed to 82K/month during the first half of 2026. • Unemployment remains in check, holding steady in a 4.0-4.5% range. • Wage rates have held steady over the past year, near 4.0%.

Civilian unemployment rate

Unemployment Rate (%) as of : June-26 4.2

Other risks & opportunities

• Stricter immigration policies are reducing labor availability in food/agricultural sectors and dampening immigrant spending. • The “Make America Healthy Again” (MAHA) movement continues to drive changes in food manufacturing, distribution and product offerings — this is likely to continue to create opportunities and challenges in the U.S. food system. • Rising geopolitical tensions are difficult to predict but are expected to remain front and center over the next 18 months. This includes the U.S.-Iran war as well as the Ukraine-Russia conflict. • To date, Federal payments to farmers have had minimal impact on commodity markets and food prices. However, the key risk would be an effort by the current administration to tie farm payments to supply restrictions.

U.S. Economic Policy Uncertainty Index (6-month average, January 2022 = 100)

High-level inflation

overview by category

CORN

• Corn stocks are projected to decline modestly over the next year, from the surplus levels of the past year, due to stronger demand and reduced corn plantings. • Corn prices are important due to the size of the U.S. crop (relative to other crops) as well as the large-scale use of corn to feed livestock. • Outlook into 2027: Nearby corn futures are expected to rebound into a $4.30-4.70 range (near the pre-2020 levels).

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SOY

• Biofuel demand for soyoil is set to rise again during 2026/27 due to increased EPA biofuel mandates. • Soyoil prices have risen to $.60-.70, more than double the long-term average. • Outlook into 2027: The soyoil futures market is expected to be volatile through 2027 – futures are forecast to average $.71/lb. but could range from $.58 to $.90 over the course of the year.

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WHEAT

• The 2026 U.S. wheat crop is expected to finish 23% down from last year due to extreme drought in the southern plains. U.S. wheat stocks are forecast to decline from a 6-year high, but world wheat supplies are expected to remain adequate. • The sharp reduction in the U.S. HRW crop led wheat futures from $5.50-7.00 in early 2026. Further price upside is limited due to competition from foreign supplies.

• Outlook into 2027: KC wheat prices will average $6.16 (-4% vs. YA), while Chicago wheat futures are forecast to average $5.95 (-3%). Mpls wheat futures are forecast to trade mostly at a discount to KC, averaging $6.07 (-4%). North American durum wheat supplies are projected to tighten slightly, with prices recovering from lows over the next year, averaging $8.87 during 2027.

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RICE

• Long grain white rice prices have been trending downwards, now at $31/cwt. However, lower production is expected to drive higher prices over the next year. • Farm prices are expected to increase from $10/cwt to $12/cwt, also supporting higher wholesale prices. • Outlook into 2027: U.S. rice production is expected to decline by 20% and ending stocks are expected to decrease by 28%; this will drive prices slightly higher into the remainder of 2026 and 2027.

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Protein & dairy Cross-commodity themes • Consumer demand has consistently outperformed expectations despite historically high protein prices. Combined with supply constraints across multiple sectors, that resilience has been a primary factor supporting elevated prices and will remain one of the most important themes to watch into 2027. • Supply constraints remain the defining feature across protein markets, although the drivers differ by sector. Beef remains constrained by biological lags in herd rebuilding, dairy by historically tight replacement heifer supplies, pork by producer discipline and disease pressure, while chicken, turkey, and eggs continue recovering through productivity gains and lower HPAI losses. • Animal health remains the largest source of supply uncertainty. HPAI continues to pose risks for poultry and eggs, the PRRS and PEDv viruses may impact pork, and New World Screwworm continues to create uncertainty for the cattle industry. • Lower feed costs continue to support producer margins. Favorable corn and soybean meal prices have encouraged poultry expansion, supported profitability in pork, and reduced production costs for dairy. While current feed costs remain supportive, they are ultimately dependent on weather, the U.S. and South American growing seasons, and global grain demand, all of which could influence feed prices into 2027. • Consumer sentiment and spending remain sensitive to geopolitical risk — currently centered on the Middle East, where a brief ceasefire drove a temporary fuel price break and June's sentiment improvement, only for crude to move back higher once it lapsed. Expect sentiment to stay volatile with whatever geopolitical flashpoint is active through the outlook period, rather than settle into a clear trend. • Away-from-home food inflation continues to outpace at-home inflation, keeping foodservice traffic soft. This is a headwind for protein demand as sentiment and spending could see volatility.

Protein & dairy CONTINUED

Dairy production & herd • The replacement heifer pipeline is at its weakest level in more than 40 years.

› S exed semen and strong beef-on-dairy returns continue to limit dairy replacement growth, with elevated beef prices reinforcing this trend.

• Herd expansion has been driven more by retaining older cows than by replacement heifer growth. • Dairy cow slaughter has increased modestly in 2026, suggesting older cows may be starting to exit the herd. Combined with limited replacements, herd growth could slow into 2027.

Dairy protein demand • Domestic demand for yogurt, cottage cheese, ultrafiltered milk, and other high-protein dairy products continues to expand, increasing competition for milk solids. • Whey remains a bright spot for the industry, with production and exports recovering after years of decline and supporting stronger prices into 2027. • Outlook into 2027: Replacement heifer supplies are expected to remain historically tight, slowing dairy herd growth as beef-on-dairy crossbreeding and elevated beef prices continue to favor beef production over herd expansion. While strong domestic demand and tight butter and cheese inventories support the market, a weaker U.S. export advantage or lower beef prices could gradually increase dairy replacements and add more dairy products to the domestic market over time.

BUTTER/CLASS IV

• Strong butter production has been matched by equally strong demand, keeping inventories below last year and five-year-average levels. • Competitive U.S. pricing has supported strong export demand. • Into 2027, export demand will depend on whether the U.S. maintains its pricing advantage over global competitors.

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CHEESE/CLASS III

• Cheese production continues to grow, but inventories remain historically tight as domestic and export demand absorb additional supply. • Production growth is concentrated in mozzarella and Italian-style cheeses, while cheddar output continues to decline. Lower cheddar output for a significant amount of time would take prices higher. • The key risk moving into 2027 is a narrowing U.S. price advantage versus the EU and Oceania, which could slow export growth.

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BEEF

• The cattle cycle has shifted from liquidation to stabilization, but meaningful herd expansion has yet to begin as heifer retention remains modest. • Even if retention improves, biological lags mean meaningful production growth is unlikely before 2029, with cow herd rebuilding extending into the next decade. • New World Screwworm is now present in the U.S. with market focus shifting from detection to containment; the greatest risk remains cattle movement disruptions rather than disease losses. • The Mexican cattle imports resumed on August 24th through Douglas, AZ, as USDA began a phased reopening

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of the southern border. Imports are starting at roughly 700 head/day and are expected to ramp toward 1,300/day, with the Santa Teresa and Columbus, New Mexico, potentially reopening next. • Beef demand has remained resilient despite record prices. • Outlook into 2027: Cattle supplies are expected to remain historically tight through at least 2027, as slow herd rebuilding, biological production lags, and potential New World screwworm disruptions continue to constrain beef production. However, record beef imports, heavier carcass weights, and the risk of weaker consumer spending could partially offset supply tightness and temper price support.

CONTINUED

BEEF

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PORK

• Producer discipline continues to limit expansion despite favorable margins keeping supply growth in check. • The breeding herd remains at its lowest level since 2014, with farrowing intentions pointing to only flat to modest production growth into 2027. • Record pigs per litter continue to offset a smaller breeding herd, allowing production to remain relatively stable. • PRRS and elevated PEDv activity continue to pressure productivity, with production impacts often emerging months after infection. Disease pressure also discourages herd expansion, reinforcing producer caution despite positive margins.

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• Supply fundamentals remain supportive, but the typical summer price rally has yet to materialize, suggesting softer demand may be offsetting tighter supplies. The key question into late summer is whether pricing strength is delayed or demand has weakened enough to limit seasonal gains. • Outlook into 2027: Pork supplies are expected to remain relatively balanced through 2027, as disciplined herd expansion and a smaller breeding herd offset gains in productivity. Strong export demand, disease-related production risks, and pork’s price advantage over beef could support the market, while record productivity and weaker food service demand may limit price gains.

CHICKEN

• Broiler production growth continues to be driven by productivity gains, including heavier birds, improved hatchability, livability, and feed conversion. • Leading indicators — including egg sets, chick placements, and pullet placements — point to continued production growth into 2027. Favorable feed costs continue to support positive producer margins and expansion. • Producer margins have recovered from 2023 lows but could come under pressure if continued supply growth weighs on prices. • Chicken continues to benefit from its value advantage over beef as consumers increasingly prioritize affordability. Strong demand could absorb additional

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production more quickly than expected, helping support prices. • HPAI has had minimal impact on the broiler industry, though seasonal migration continues to present recurring risk. • Outlook into 2027: Broiler supply is expected to continue growing through 2027, supported by productivity improvements, favorable feed costs, and strong consumer demand driven by chicken's affordability relative to beef. However, sustained production growth could pressure prices and margins, while hatchery capacity constraints and producers' ability to quickly reduce output may temper longerterm expansion if profitability declines.

TURKEY

• Turkey production has shifted from contraction to recovery as HPAI losses have eased significantly from 2024/2025; strong producer margins continue to support production growth into 2027. • Limited hatchery capacity will keep supply recovery gradual rather than rapid. • HPAI remains the primary market risk. While 2026 losses have been relatively light, fall migration will reset disease risk heading into 2027.

• Outlook into 2027: Turkey supplies are expected to continue recovering in 2027, although hatchery capacity constraints should limit the pace of expansion and help prevent a rapid return to oversupply. Strong producer margins and favorable feed costs support production growth, but ongoing HPAI risk and the pace of disease containment will be key factors influencing supply and pricing.

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EGGS

• The egg industry continues to recover as lower HPAI losses support flock rebuilding and higher production. The laying flock remains well above year-ago levels, driving egg production back toward historical norms. • Egg product manufacturing has recovered across most categories, with dried egg production showing the strongest gains. • HPAI remains the largest risk to the egg outlook despite significantly fewer losses than in 2025.

›O ne recent outbreak, which

impacted the 1.2 million layers in Utah, is a reminder that recovery remains vulnerable to new cases.

› C ontinued flock rebuilding should support production into 2027 if HPAI remains relatively contained.

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EGGS

CONTINUED • Higher production has increased product availability while inventories remain relatively manageable. • Recent increases in shell and breaking stock inventories suggest the post-spring drawdown may be ending as supply improves. • The market has shifted from shortage toward better balance, placing downward pressure on wholesale and retail egg prices. • Outlook into 2027: Egg supplies are expected to continue improving into 2027 as flock rebuilding boosts production and inventories recover, supporting a gradual return to more normal market conditions. However, HPAI remains the primary supply risk, with potential outbreaks capable of quickly tightening supplies and disrupting seasonal demand and cage-free market segments.

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SEAFOOD

The market remains supply-led, not demandled. Groundfish is structurally constrained and unlikely to deliver meaningful price relief over the next 12 months. Aquaculture provides selective tactical opportunities, but not enough to reset the broader seafood cost curve. Looming Section 301 tariffs replacing the current Section 122 will keep market direction tentative with new volatility and uncertainty.

Key Risks: • Whitefish scarcity • Tariff and freight volatility on imports • Elevated replacement costs across species • Delayed frozen-market corrections (60–90-daylag) • Geopolitical disruption to supply routes

Key Opportunities: • Tactical buying windows in salmon and shrimp • Selective substitution from cod into haddock or flounder, and other whitefish • Origin diversification in tilapia sourcing • Early coverage for core whitefish programs

[Source: Slade Gorton]

SEAFOOD

CONTINUED •

Outlook into 2027: Whitefish is the primary risk — cod will be structurally tight for the foreseeable future and substitution supports alternative species. Selective near-term buying for salmon and shrimp as fresh salmon supply builds and shrimp demand softens in summer. Tilapia is stable now but exposed to later-year tightening and landed-cost volatility.

Top: Expana market price index for client blended basket — actuals to 2026 Q2, then forecast range. Pricing reflects market commodity, not client specs.

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Soft commodities

COCOA

• Cocoa prices have continued trending downwards this year, down to $3,836 in Q2-2026. Prices have likely already hit their lows and are expected to rebound to $5,000-$5,500 in 2026/27.

• Outlook into 2027: A surplus is still expected for 2026/27 but it will be a much smaller surplus than in 2025/26, and a much smaller surplus than was expected earlier in the year.

• Ghana and Cote d’Ivoire had strong crops in 2025/26, which, combined with soft demand, led to significant price relief. Demand is expected to remain soft but not decline further while supplies are expected to get tighter in 2026/27 as weather impacts from El Nino, less fertilizer use, and lower prices driving less investment in the cocoa crops all lead to lower cocoa production in West Africa.

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COFFEE

• Relief from tariffs and expectations of a large arabica crop from Brazil have provided price relief for most of 2026 with prices falling from above $3.50 in January to below $2.50 in early June. Prices have been extremely volatile and elevated in July following a delay in the Brazil harvest due to rainfall and movement driven by spec funds. Prices are expected to remain volatile in the short term but overall trend back towards $3.00. • Tight arabica stocks, rain delays in Brazil and El Nino uncertainty are providing price support while expectations of

Brazil’s arabica production increasing 20-25% vs. last year are providing downward pressure. • Outlook into 2027: While uncertainty and volatility may persist in this market, the overall fundamentals and expectations of ample arabica supplies are expected to keep prices averaging around $3.00 for the remainder of 2026. If the weather impacts from El Nino are mild, prices will likely stay flat going into 2027; but if impacts are more pronounced prices could increase later in 2027.

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SUGAR

• Beet sugar prices rose this year to .48 cents/lb. while cane sugar price remained flat at .52 cents/lb., despite record supply levels. • Sugar production is expected to decrease around 2% in 2026/27, while demand is expected to remain mostly flat. • There has also been a policy push to increase the tariff rate on high tier tariff sugar which would lead to tighter supplies domestically if implemented.

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SUGAR

CONTINUED • World sugar prices remain low; without a substantial increase in the high tier tariff rate the high tier tariff sugar will continue to be imported. • Outlook into 2027: With domestic supplies tight and sellers retaining pricing power, prices are expected to remain mostly flat to slightly higher this year — with additional upside potential if high tier imports are limited.

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Produce outlook

AVOCADOS

• The 2026 avocado market is expected to firm compared to late 2025, with lighter Loca and Aventajada crops supporting higher averages through midyear. California’s smaller alternate-bearing crop will provide less supply between May and August, creating a window for pricing strength. Peru and Colombia will add fruit in the summer months, but their impact remains secondary to Mexico’s dominance. Demand is expected to stay strong across both retail and foodservice, particularly around holiday and sports related consumption peaks. Prices are likely to mirror the stronger tone seen in 2024, with seasonal volatility peaking in Q2 and Q3 before easing in Q4.

Source: Fresh Concepts | freshconceptsinc.com

BELL PEPPERS

• Bell pepper supplies in 2026 should remain broadly adequate, with Mexico and Florida anchoring the winter and spring before Georgia and local deals come in during summer. Pricing will fluctuate around transitions, but fewer winter storm risks under La Nina conditions could allow steadier output in the early season. Quality differentiation will matter, as fewer premium-grade #1 Large peppers are expected compared to Choice fruit. Demand is projected to be stable, suggesting pricing will hover near historical averages with modest firmness during tighter windows.

Source: Fresh Concepts | freshconceptsinc.com

ICEBERG LETTUCE

• Iceberg lettuce in 2026 is projected to follow its classic seasonal rhythm, with Yuma driving Q1 supplies and a volatile transition into Huron and Salinas in Q2. That spring handoff will be the riskiest period, as heat and wind events could cut weights and shelf life, creating sharp short-term rallies. By Q4, as production shifts back to Yuma, the market typically firms again. Overall, the bias is toward stability with only transitional volatility expected, rather than extreme spikes.

Source: Fresh Concepts | freshconceptsinc.com

ONIONS

• Onions should maintain balance into 2026, anchored by strong storage crops out of the Pacific Northwest and smooth seasonal transitions into California and New Mexico. The market will likely see its most notable volatility in the spring, when storage onions taper and fresh crops come on, as even minor timing mismatches can briefly firm pricing. Summer supplies are expected to be plentiful, keeping Q3 prices in check. As new PNW onions return in Q4, growers are likely to pace storage movement, supporting a modest firming into year-end. Without significant weather or quality disruptions, the market should stay within historical ranges, avoiding the extreme swings seen in other produce categories.

Source: Fresh Concepts | freshconceptsinc.com

POTATOES

• Idaho russet acreage is projected to decline modestly heading into 2027, though favorable growing conditions in the Northwest could still produce solid yields and maintain overall volume. With fewer planted acres, supplies will be somewhat tighter, but high yields could offset much of that reduction depending on weather and harvest outcomes. The fresh russet market is likely to see softer pricing pressure during the fall harvest and early storage season, when availability is at its peak. Through the year, quality, storage longevity, and shipping demand will determine how quickly supplies move and whether prices firm into late spring and summer. Overall, the 2026 Idaho russet market should be relatively balanced, with prices trending softer in the immediate post-harvest window and gradually firming into Q2 and Q3 before stabilizing again in late 2026.

Source: Fresh Concepts | freshconceptsinc.com

TOMATOES

• The tomato market in 2026 faces a structurally higher price environment after the end of the U.S.-Mexico Suspension Agreement and the introduction of tariffs on imports. Mexico will remain the dominant supplier but is contending with water shortages that may constrain exportable volume, limiting supply flexibility. Florida and Georgia will provide solid coverage in the spring, and Baja and California will continue to support Western supply, though none can fully replace Mexico’s role. The higher import cost base will make promotional activity more expensive, reinforcing a firmer floor across all quarters. Seasonal transitions will still bring short bursts of volatility, but the overarching trend is a market that operates at a higher plateau than in recent years.

Source: Fresh Concepts | freshconceptsinc.com

Service, equipment, and supplies outlook

PAPER PACKAGING RESINS

• Containerboard pricing has increased $100/ton year-to-date, driven primarily by structural capacity reductions rather than stronger demand.

• Higher input costs, including OCC, diesel, and manufacturing expenses continue to support additional pricing pressure into 2027.

• Approximately 10% of U.S. containerboard capacity has been permanently removed since early 2025, tightening market balances and increasing producer pricing power.

• Outlook into 2027: Packaging markets are expected to remain supported by disciplined supply rather than robust demand. Structural capacity reductions in containerboard, combined with higher production costs and ongoing energy volatility, suggest pricing should remain relatively firm into 2027. The greatest downside risk would come from a broader economic slowdown that materially weakens manufacturing and packaging demand.

• Corrugated box demand remains modest, with shipment growth near 0.5% YoY, well below historical trends, suggesting supply — not demand — is driving the market.

• Feedstock costs and global energy markets remain the primary drivers of resin pricing. • Geopolitical developments and global trade flows continue to create periodic price volatility. • Outlook into 2027: Pricing risk remains modestly skewed to the upside, although lower crude oil prices with the ceasefire did ease near-term pressure. However, now that the ceasefire is over, risk of moving higher is back to the forefront. Source: AES & Novolex

ALUMINUM AND STEEL

• Energy costs and trade policy continue to influence aluminum pricing. Prices have continued to rise and increased more than 29% since Jan. 2025. • Changes in tariffs or energy markets remain the largest sources of price volatility. • Stainless steel pricing has seen an increase of 13.3% since Jan. 2025; this is largely due to tariff increases. • The U.S. market is seeing restrictions of some steel purchases due to restrictions and imports. Geopolitical disruptions also drive higher energy costs and tighten availability. Source: AES, Vollrath, Cambro

Source: U.S. Bureau of Labor Statistics/FRED®

LINENS & TEXTILES MRO

(MAINTENANCE, REPAIR, AND OPERATIONS)

• The U.S. trade policy continues to create uncertainty. Many suppliers are maintaining flexible sourcing strategies and closely monitoring developments before making long-term pricing decisions. • Cotton prices have increased approximately 15–20% over the past six months, while polyester prices have risen more than 14% year-over-year as petroleum prices strengthened. • Textile mills have implemented 8–10% price increases due primarily to rising petroleum costs. • Ocean freight rates have moved higher in recent weeks as geopolitical tensions in the Middle East increased fuel costs; transportation providers have also experienced 8–10% cost increases.

• Compliance - Sustainability, traceability, and certification requirements – will continue to expand. • Outlook into 2027: Trade policy and geopolitical events remain the largest variables influencing transportation costs and raw material pricing. Manufacturing capacity remains healthy, but companies continue diversifying sourcing locations to improve resilience and reduce regional risk. Rising fuel prices will continue to put upward pressure on domestic and international transportation costs, with freight expenses also expected to continue by approximately 8–10% should petroleum prices remain elevated. Specialty and custom textile products are expected to experience continued upward pricing pressure driven by labor, energy, and material costs.

Source: ChefWorks, Cintas Design Collective, BBJ Linens, American Dawn

• Market price inflation in the MRO market has slowed over the past few months but remains elevated relative to prior norms. • Factors contributing to the elevated rate of market price inflation include 2025's trade policy changes and commodity price disruptions stemming from the conflict in the Middle East. • While changes to trade policy are increasingly fading into the rearview as a driver of MRO market price inflation, commodity price disruptions are moving to center stage, as prices for Source: Grainger

many impacted commodities remain higher than they were at year start and normal transmission delays from upstream stages of the value chain to end users increasingly translate the commodity price disruptions into inflationary effects in the MRO market. • Outlook into 2027: For the balance of 2026, expectations are for products with close ties to commodities impacted by the conflict in the Middle East to experience outsized inflation relative to other product categories, including those derived from petrochemicals.

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