Leo Bucaro, the owner of Perfect Pasta Inc., hired 5 more workers last year, as he expanded the business, opening a new product line that features gluten-free pasta.
The Illinois-based Italian pasta manufacturer said he expects further expansion soon of his 20-year-old family business, which employees about 80 workers.
“The demand is high,” he said. “Probably we will hire more people.”
Slowly but steadily, the employment in food manufacturing has finally climbed back to its pre-recession level. This year, hiring in food factories is likely to accelerate as the economy is shaking off uncertainties such as weather.
The U.S. lost more than two million manufacturing jobs between 2007 and 2010. Only 20 percent of the lost jobs have come back so far. Machinery, motor vehicles and other durable goods industries took the hardest hit during the recession, as consumers tend to postpone purchases of these products during difficult economic times. About 1.8 million jobs in durable goods manufacturing were lost.
Food manufacturing, on the other hand, has proved less vulnerable to economic downturns and offshoring. Although the sector also suffered from consumer cutbacks, it has been recovering since 2010. There were 1.49 million food-manufacturing jobs in March, the highest level for the same month since 2004.
“It does appear that employment in the food manufacturing sector is rebounding,” said Brian Todd, President of the Food Institute, a New Jersey-based research organization. As the economy continues to improve, the gain in food manufacturing job will pick up more speed.
“With the rise in demand and production for more locally produced foods,” Todd said, “we will see an increase in employment on the food manufacturing side.”
About 20,000 more jobs will be created in the food manufacturing sector this year, said Daniel Meckstroth, chief economist at Manufacturers Alliance for Productivity and Innovation, an increase from 4,000 in 2013.
“It’s a moderate level of growth,” he said. “Last year, a combination of all the uncertainties created an environment where firms don’t want to expand the labor force. But normally, growth in production will result in a similar growth in employment.”
The rise in commodity prices, caused by droughts in the U.S. and around the world, is one of the uncertainties, which has taken its toll on some food manufacturers, who relies heavily on basic commodities. Corn prices, for example, grew to over $8 a bushel in 2012, compared with less than $4 in 2010. Wheat prices have also increased significantly over the past two years.
Meat and poultry processing, the largest sector by employment in food manufacturing, was impacted by these price increases, said Jeremy Russell, a spokesman at the North American Meat Association, which represents meat processors.
“There have been some environmental factors, like droughts, that hit the herd size,” he said. “So plants are not able to operate at full capacity, which means they are not employing all of the people that they can possibly employ.”
Food processing jobs account for 13% of all manufacturing jobs and tend to be more stable than durable goods manufacturing such as auto-parts and appliances, which have the greater potential to make a larger and faster rebound, as the economy improves.
“We see a lot more growth in the durable goods sector than in the non-durable goods,” said Chad Moutray, the chief economist for the National Association of Manufacturers.
Nevertheless, the market size for food is always increasing. The population continues to grow, and export demand for U.S. food products remains strong. The U.S. processed food industry exported $68.5 billion of products in 2013, a 5.9% increase from 2012, after adjusted for inflation.
In addition to the population growth, people are spending more on food. According to Department of Agriculture, the percentage of disposable personal income spent on food increased from 9.5% in 2008 to 10% in 2012.
“People will upgrade the kind of food they will purchase at the grocery stores as we gradually move away from recession,” said John Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago-based consumer research firm. “They will buy more food.”