Market Updates for June 15, 2018

Section Type

Dairy | Cheese

The CME Block and Barrel markets have continued the mild roller coaster ride we have been on.  Speculators feel this will continue to focus on whether milk production will be effected this summer.

Last week:

Block - Down

Barrel - Down

This Week:

Block - Up

Barrel - Up

Dairy | Eggs

Market Tone:  Retail demand fairly good to good. Larger sizes close & held confidently. Market firm here.

Last week:

Large - Up

Medium - Down

Small - No change

This Week:

Large - Up

Medium - No change

Small - No change

Dairy | Butter

Butter production continues to be active throughout the Nation as manufacturers build inventories for later in the year. Exports are up a bit and keeping prices at elevated levels.  Expectations are still higher than normal pricing as we move in to the back half of the year.

Last week:

Butter - Down

This Week:

Butter - Down

Grocery & Bakery | Wheat

The wheat market has been in an uptrend in 2018 as crop problems developed in the Southern Plains and then, more recently, in the former Soviet Union. Winter wheat prices (bread flour) are up much more than spring wheat (pizza and pasta).

Grocery & Bakery | Soybean Oil

The balance between large supply and good demand will keep moving prices around the the USDA projected $0.30-$0.34/lb price range.

Grocery & Bakery | Sugar

This years sugar beet crop is off to a good start; prices are steady.

Meat | Beef

Year-to-date beef output is up 4% but prices have remained high enough to keep all segments of the industry profitable. Better demand, both domestic and foreign, is credited for this success.

Ground Beef:

Prices have dropped since Memorial Day but we could see a little bounce by mid month as July 4th approaches.

Ribs:

Retailers started looking for July 4th feature prices last week and they were able to book bone-in ribeyes for future delivery at a 15% discount to the current market.

Briskets:

June has been a peak demand month in each of the last three years and prices are tracking higher again this year.

Rounds:

Inside round forward sales have virtually shut off since April, which does not bode well for prices in June.

Strips:

Large volumes of both T-bones and strips were sold forward at sharp discounts to the current market. Prices should still trend lower, but could find some support from ongoing features.

Tenders:

We often see the summer downtrend start by mid-June as production ramps up and demand falls off.

Thin Meats:

​Ball tips and flank steak prices may adjust lower as more production hits mid-month. Outside skirts prices seem to be trending a little lower as summer production ramps up.

Meat | Pork

The seasonal slowdown in hog numbers hit right on script. Packers are scrambling to find enough hogs to fill production schedules. Tighter supplies appear to have launched pork meat prices onto an uptrend.

Butts:

Butt prices adjusted lower following Memorial Day and appear to have leveled off. Demand for Father’s Day and July 4th are usually price positive.

Hams:

Ham prices often trend higher into July, but the uncertainty created by Mexican tariffs casts a shadow of uncertainty on future price trends. Mexico is a HUGE buyer of US hams.

Bacon/Bellies:

Belly prices are up 50% from early May lows. April’s price break gave retailers ample time to lock in summer features. As pork production slows down and retail sales pick up we are seeing prices trend higher.

Ribs:

Rib prices dipped after Memorial Day, but are now recovering as we approach the next round of grilling holidays.

Loins:

​Bone-in and boneless loin prices have increased, but remain below previous years. There is more product available domestically and it has to compete with low-priced chicken breast and ground beef.

Poultry | Chicken

Small-sized whole bird/cut-up chicken prices are at record highs while jumbo chicken prices probe record lows.

Breast and Tenders:

The expansion of large-bird chicken processing capacity has driven  jumbo breast meat prices to 10-year lows Meanwhile small sized breast meat prices are near 10-year highs. If chicken executives ran General Motors they would be building mostly Cadillac Escalades and selling them at discounts to Chevy Cobalts!

Wings:

Prices dropped until recently as processors struggled to find homes for jumbo wings. U.S. prices are at parity with world prices, stimulating new sales into Canada. Prices should bottom out this summer as exports and more domestic wing specials increase demand.

Dark Meat:

Exports have slowed pushing jumbo leg quarter prices down 20%. Processors are trying to increase thigh and leg meat production where labor situations allow.

Poultry | Turkey

Whole turkey prices are higher for forward months, but spot pricing is mostly steady. Bone-in breast prices are also unchanged with adequate supply available. I

Seafood | Finfish

Cod, Alaskan 1x:

Alaskan A season opened in January but supply remains tight and costs have firmed, this is partly due to decreased quota in other regions of the world. Costs have remained elevated even after Lent and are expected to remain this way through the end of the year.

Cod, Atlantic 1x:

The 1x frozen cod loins are firming on costs with the recent  announcement of a 25% reduction on quota compared to 2017 out of the Newfoundland and Labrador regions in Canada.   As the season just resumed we expect to have ample supply of all sizes by the end of June including the 4 oz size.   

Cod, Atlantic 2x:

Fishing in Northern Europe has concluded.  Total catch this season is poor and raw material is in short supply for 2018 until early 2019 when fishing resumes.

Cod, Pacific 2x:

Heavy restrictions on total allowable catch in certain Alaskan fishing grounds. Raw material is now more expensive than Atlantic cod and expected to firm continuously for all of 2018.

Pollock, Atlantic 1x:

Expect cost to firm on the 1x frozen pollock as we start to move into the summer season. With cod costs rising and the overall lack of supply of that commodity, many are switching to the cheaper priced pollock. While pollock still is at a cost savings and a value this added pressure on supply has resulted in increased costs for this species as well.

Pollock, Pacific 2x:

Slight firming of pricing. Starting to see substitution demand from cod users.

Haddock:

Raw material prices firming due to the cheapest ground fish compared to Pacific and Atlantic cod. Continued substitutions from cod consumers driving up demand and cost.  Available raw material is in short supply.

Domestic Lake Fish:

The Lake Erie commercial fishery is well underway and costs have softened as supply is readily available.    Expect prices to level out over the next few weeks as the lakeshore business ramps up for the summer.  

Euro Lake Fish & Zander:

Supply is good and costs have been stable with only minor adjustments to market .   This is a more cost effective substitute for the higher priced domestic lake fish items where applicable.

Mahi Mahi:

The S American Mahi Mahi  season began last fall and costs have softened compared to the same time last year.   Prices have adjusted downward and are expected to stabilize for most of the summer grilling season where current supply is plentiful.  Typically the spring season brings added containers from Taiwan, but reports now indicate that they are having a poor start with reduced catches yielding less overall supply available to enter the market.  

Frozen Tuna, Swordfish :

Frozen tuna harvests out of Vietnam are considered stable for this year with supply listed as normal. Product out of Indonesia has been slow to materialize and therefore has put added pressure on the product out of Vietnam.  The Thailand season has ended.  Expect prices to continue to be stable for the summer grilling season with no anticipated interruptions in supply.  Swordfish however is tight and costs are firming.  

Swai:

Cost fingerlings increased after Chinese New Year instead when market expected a drop. US trade commission assesses preliminary higher duty rates in Swai. Prices firm with short supply until end of 2018/early 2019.

Tilapia:

Low production during this time of the year. Prices recently firmed.

Seafood | Shrimp

Imported Black Tiger:

Black Tiger shrimp prices are stable and supply is improving on smaller sizes. There are shortages of large sizes due to limited production (2-4 through 8-12).

Imported White:

White shrimp prices are at a great value due to their recent declines as we head into spring. Demand has been steady and is expected to increase into the warmer months. Raw material minimums are being implemented overseas to protect the market from going to an unstable level but demand will drive market prices.

Latin White:

Latin White shrimp are mostly stable in pricing however buying interest has been high on shrimp smaller than 41/50 HLSO which could lead to markets firming.

Domestic White & Brown:

Domestic Brown shrimp continue to move upward due to limited availability and good demand. There is a lack of inventory to carry from last season to next, which puts pressure on prices to move up in an attempt to stretch inventory. Boats are currently working White shrimp and have had most landings in smaller sizes for peeling. Larger White headless relief is in sight once landings increase.

Domestic PUD:

Domestic PUD shrimp prices have weakened to match new season production. Landings are good on mostly small sizes (90 count/lb and smaller). We will see landings of larger shrimp as the season progresses and shrimp grow.

Domestic Rock & Pink:

Rock & Pink shrimp are both in good supply. Pink shrimp, in particular, have had very good catch rates in the late winter months.

Seafood | Lobster

North Atlantic:

The season for N Atl.  Lobsters formally began May 1st out of Canada.  Initially the expectation was for costs to soften as supply became more readily available but the harvest to date has yielded the predominately smaller sizes of 3/4 and 4/5 with limited offerings of the 5/6 tails  and larger.  This in addition to less than favorable weather and the recent announcement of 10 fishing zones being closed to preserve the right whale,  has now put pressure on supply as the Canadian fishing season wraps up on June 30.   As a result of the closures impacting fishermen for both crab and lobster, the Canadian Dept of Fisheries is considering extensions beyond the June 30th closure but a final ruling  has not been issued to date.  Once closed we will need to wait at best 4-6 weeks before the Maine season resumes in the US.    

Warm Water:

Costs have adjusted slightly as the new season out of Brazil resumes this month.  To date supply is good for a adequate demand.

Seafood | Crab

Snow Crab:

The global shortage of snow crab will continue in 2018 for the Canadian season.    Prices continue to rise daily/ weekly and it does not look like there will be any relief in sight at least for the larger 8 up and 10 up sizes.     For now, costs remain elevated and supply tight especially on the larger sizes.  In addition the Canadian Department of Fisheries also announced closures  of 10 zones in the crab and lobster fishing areas due to the presence of right whales.  This will impact availability of supply as they are mandatorily closed for 15 days. It is hard to predict this year if there will be any settling down or concessions on cost. Some feel there could be a correction on the smaller 5/8 but that is uncertain as well.   

 

Seafood | Scallops

The scallop season has begun one month later in April for the 2018 season and boats have made a mad dash to get started. With the announcement of newly opened restricted areas and an overall increase in quota, costs are adjusting lower.  Supply is currently adequate on all sizes. 

Seafood | Finfish

Cod, Alaskan 1x:

Alaskan A season opened in January but supply remains tight and costs have firmed, this is partly due to decreased quota in other regions of the world. Costs have remained elevated even after Lent and are expected to remain this way through the end of the year.

Cod, Atlantic 1x:

The 1x frozen cod loins are firming on costs with the recent  announcement of a 25% reduction on quota compared to 2017 out of the Newfoundland and Labrador regions in Canada.   As the season just resumed we expect to have ample supply of all sizes by the end of June including the 4 oz size.   

Cod, Atlantic 2x:

Fishing in Northern Europe has concluded.  Total catch this season is poor and raw material is in short supply for 2018 until early 2019 when fishing resumes.

Cod, Pacific 2x:

Heavy restrictions on total allowable catch in certain Alaskan fishing grounds. Raw material is now more expensive than Atlantic cod and expected to firm continuously for all of 2018.

Pollock, Atlantic 1x:

Expect cost to firm on the 1x frozen pollock as we start to move into the summer season. With cod costs rising and the overall lack of supply of that commodity, many are switching to the cheaper priced pollock. While pollock still is at a cost savings and a value this added pressure on supply has resulted in increased costs for this species as well.

Pollock, Pacific 2x:

Slight firming of pricing. Starting to see substitution demand from cod users.

Haddock:

Raw material prices firming due to the cheapest ground fish compared to Pacific and Atlantic cod. Continued substitutions from cod consumers driving up demand and cost.  Available raw material is in short supply.

Domestic Lake Fish:

The Lake Erie commercial fishery is well underway and costs have softened as supply is readily available.    Expect prices to level out over the next few weeks as the lakeshore business ramps up for the summer.  

Euro Lake Fish & Zander:

Supply is good and costs have been stable with only minor adjustments to market .   This is a more cost effective substitute for the higher priced domestic lake fish items where applicable.

Mahi Mahi:

The S American Mahi Mahi  season began last fall and costs have softened compared to the same time last year.   Prices have adjusted downward and are expected to stabilize for most of the summer grilling season where current supply is plentiful.  Typically the spring season brings added containers from Taiwan, but reports now indicate that they are having a poor start with reduced catches yielding less overall supply available to enter the market.  

Frozen Tuna, Swordfish :

Frozen tuna harvests out of Vietnam are considered stable for this year with supply listed as normal. Product out of Indonesia has been slow to materialize and therefore has put added pressure on the product out of Vietnam.  The Thailand season has ended.  Expect prices to continue to be stable for the summer grilling season with no anticipated interruptions in supply.  Swordfish however is tight and costs are firming.  

Swai:

Cost fingerlings increased after Chinese New Year instead when market expected a drop. US trade commission assesses preliminary higher duty rates in Swai. Prices firm with short supply until end of 2018/early 2019.

Tilapia:

Low production during this time of the year. Prices recently firmed.

Seafood | Shrimp

Imported Black Tiger:

Black Tiger shrimp prices are stable and supply is improving on smaller sizes. There are shortages of large sizes due to limited production (2-4 through 13-15).

Imported White:

White shrimp prices are at a great value due to their recent declines as we head into summer. Demand has been good and replacement offers overseas are being limited.

Latin White:

Latin White shrimp are mostly stable in pricing however buying interest has been high on shrimp smaller than 41/50 HLSO which could lead to markets firming.

Domestic White & Brown:

Domestic Brown shrimp continue to move upward due to limited availability and good demand. There is a lack of inventory to carry from last season to next, which puts pressure on prices to move up in an attempt to stretch inventory. Boats are currently working White shrimp and have had most landings in smaller sizes for peeling. Larger White headless relief is in sight once landings increase.

Domestic PUD:

Domestic PUD shrimp prices have weakened to match new season production. Landings are good on mostly small sizes (90 count/lb and smaller). We will see landings of larger shrimp as the season progresses and shrimp grow.

Domestic Rock & Pink:

Rock & Pink shrimp are both in good supply. Pink shrimp, in particular, have had very good catch rates in the late winter months.

Seafood | Lobster

North Atlantic:

The season for N Atl.  Lobsters formally began May 1st out of Canada.  Initially the expectation was for costs to soften as supply became more readily available but the harvest to date has yielded the predominately smaller sizes of 3/4 and 4/5 with limited offerings of the 5/6 tails  and larger.  This in addition to less than favorable weather and the recent announcement of 10 fishing zones being closed to preserve the right whale,  has now put pressure on supply as the Canadian fishing season wraps up on June 30.   As a result of the closures impacting fishermen for both crab and lobster, the Canadian Dept of Fisheries is considering extensions beyond the June 30th closure but a final ruling  has not been issued to date.  Once closed we will need to wait at best 4-6 weeks before the Maine season resumes in the US.    

Warm Water:

Costs have adjusted slightly as the new season out of Brazil resumes this month.  To date supply is good for a adequate demand.

Seafood | Crab

Snow Crab:

The global shortage of snow crab will continue in 2018 for the Canadian season.    Prices continue to rise daily/ weekly and it does not look like there will be any relief in sight at least for the larger 8 up and 10 up sizes.     For now, costs remain elevated and supply tight especially on the larger sizes.  In addition the Canadian Department of Fisheries also announced closures  of 10 zones in the crab and lobster fishing areas due to the presence of right whales.  This will impact availability of supply as they are mandatorily closed for 15 days. It is hard to predict this year if there will be any settling down or concessions on cost. Some feel there could be a correction on the smaller 5/8 but that is uncertain as well.   

 

Seafood | Scallops

The scallop season has begun one month later in April for the 2018 season and boats have made a mad dash to get started. With the announcement of newly opened restricted areas and an overall increase in quota, costs are adjusting lower.  Supply is currently adequate on all sizes.