Market Updates for October 12, 2018
Dairy | Cheese
The CME Block and Barrel Markets have continued in the same range recently. Speculators feel the barrel market will keep the block market from going to high and they are projecting the barrel market to move closer to the block in the short term.
Block - Up
Barrel - Up
Block - Down
Barrel - Down
Dairy | Eggs
Retail demand fair to at times fairly good. Supplies becoming more available. Market adjusting.
Large - Up
Medium - Up
Small - No Change
Large - Down
Medium - Down
Small - No Change
Dairy | Butter
Butter inventory levels are well above a year ago and should remain that way through the year due to strong production. Many are looking at this ample inventory as a sign that will drive pricing down towards the end of the year.
Butter - Up
Butter - Down
Grocery & Bakery | Wheat
Flour prices are below last year as ample domestic supply of high protein wheat more than offsets tighter world supplies. Harvest delays in Western Canada have raised concerns about loss of quality in that crop.
Grocery & Bakery | Soybean Oil
Soybean oil prices are now in the middle of the USDA's $0.28-$0.32/lb projected trading range. Prices are being supported by higher petroleum prices (bio-diesel demand).
Grocery & Bakery | Sugar
Harvest has been slowed by wet weather. Based on early harvest results Michigan Sugar believes they have 80% of their 2018/2019 production sold. They announced a price increase effective immediately on the remainder of their output.
Meat | Beef
Overall beef prices have been mostly sideways in the last 30 days. Seasonal price strength for some cuts has been offset by weakness in others.
Ground beef prices are at 5-year lows as bigger supplies compete with cheap chicken and pork.
Ribeye prices jumped earlier than normal and are now nearing the fall highs achieved in each of the last three years.
Brisket prices appear to be leveling out; forward sales are at small discounts to spot.
Prices have leveled out for most round cuts. Packers are selling out front at even money, which shows they don't expect prices to change much.
Prices are back to normal levels for this time of year. Packers are selling forward at steady money.
Similar to ribeyes, tender prices started trending higher earlier than normal. Prices still have a way to go before they hit the holiday peak reached in the last three years.
Ball tip prices are back down to average price levels; flank and skirt prices have inched lower but are still on the high side of normal for this time of year.
Meat | Pork
We lost 10% of national production following Hurricane Florence which left pork pipeline empty and prices higher. We are still not producing as much as we were prior to the hurricane, so prices are only inching lower.
Butt prices are easing lower as we finally have a little extra product available.
Ham prices have peaked with packers starting to discount to keep supplies moving.
Belly prices are still well supported as supply catches up with retail pulls.
Sparerib prices never went up much following the hurricane. Prices are steady.
Boneless loin prices remain high as retailers buy to support ongoing features.
Poultry | Chicken
Processors remain focused on "finding a home" for all the production coming at them, with price a secondary issue.
Breast meat prices are on the defensive again, with medium breast under the most pressure. Tenders are "pushy" at steady prices.
Jumbo and medium wing prices are flat with increasing availability.
Leg and thigh meat are steady.
Poultry | Turkey
Frozen whole turkey prices are flat as we approach Thanksgiving. Hens are harder to find than toms.
Seafood | Finfish
Supply remains tight and costs are firm, this is partly due to decreased quota in other regions of the world. Expect this to remain this way through the end of the year and going into Lent 2019 . No major changes to report from previous months
The 1x frozen Atl. cod loins are firm on costs with the announcement of a 25% reduction on quota compared to 2017 out of the Newfoundland and Labrador regions in Canada. Inventory has been ramped up to cover increased demand on all sizes but the smaller sized 4 oz have been harder to come by due to larger fish being processed. Supply on all sizes is expected to remain tight and costs firm potentially through Lent. N Atlantic shatter-pack cod is firming as well with limited supply expected at least until February when the Russian and Norwegian seasons resume.
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.
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.
Costs on 1x fz Pollock currently are stable and supply is plentiful as we are working through the B Pollock season this fall . Many anticipated with the rising cost of Cod that Pollock would be the next lower cost option. For the most part that "switch" has not materialized to the degree first thought.
Slight firming of pricing. Starting to see substitution demand from cod users.
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.
As we enter the fall fishing season the bulk of the walleye comes out of the water over the next few weeks. Depending on the size of fish harvested we should be in stock on all sizes as the fall fishery gets rolling. To date prices on both perch and walleye have been steady. Expect slight increase as we begin to wrap up supply for the winter months. Quota reports from the end of August indicate that 65 % of the perch quota had been caught and 55% of the walleye lake wide. The whitefish harvest resumed in September and then will wrap up with the extended Native American fishing season to mid November. As supply becomes more readily available we should be in stock on all sizes. Note however, whitefish costs are firming due to shorter supply overall.
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 costs are softening as we enter the fall and the Peruvian fishing season is just getting underway. To date there is no indication of what the new 2019 season prices will be. Many report extra inventory in both the states and processors overseas so it will take a few weeks to determine where the market will end up based on supply and demand.
The peak season in Vietnam for tuna ended in July. As landings dropped off costs have started to increase. This has been attributed in part to the new IUU fishing regulations forcing more plants to compete over limited amounts of local raw material. The Indonesian season is at its end . Combined with soft Vietnamese production, prices remain elevated out of this region as well. Thailand has yielded limited supply as most long-line boats are fishing in Sri Lanka now that they are green listed with the EU. Prices have substantially increased on Swordfish from Indonesia, high demand from the European market and stricter regulations are the main cause. Demand remains strong from both retail and foodservice customers
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.
Low production during this time of the year. Prices recently firmed.
Seafood | Shrimp
Black Tiger shrimp prices are stable and supply is good on small and middle sizes. There are shortages of large sizes due to limited production (2-4 through 13-15) and heavy demand.
White shrimp supply is somewhat sporadic with shipments being late due to heavy demand overseas. Market values are good and offer great opportunities to menu shrimp this summer. Expect supply to be better as we roll into the late summer months as production catches up.
Latin White shrimp are firm with replacement prices firming. Supply is good for the time being.
Domestic Brown shrimp are steady in price as we roll into the new season for Texas. Larger sizes of white and brown headless shrimp should begin to land over the next few months.
Domestic PUD production has slowed on smaller shrimp. While boats begin to target larger whites and browns where available, we should see better production in larger and middle size peeled shrimp.
Rock & Pink shrimp are both in good supply.
Seafood | Lobster
Lobster tail costs have started to firm as of late as the Maine season was not as productive as first anticipated due to poor landings. Meat prices have been soft overall but many feel the bottom of this market has been met and expect the meat prices to start to increase soon as well. There is no indication that the new 10 % tariff has impacted overall supply as a good portion of lobsters are already sold into Canada to be further processed and the bulk sold to China is whole live. For now supply is adequate with a firm undertone on cost.
Supply has been short on warm water tails with inventory just starting to ramp up slightly after a late start to the season. Poor catches, increased demand out of Asia and retailers taking a stronger position on the market have resulted in a firm undertone.
Seafood | Crab
The global shortage of snow crab will continue through the fall. Alaska did announce their recent findings on their biomass survey of the Bering sea and the results are favorable for more quota for this region come this winter. The survey showed a 60 percent boost in market sized males and nearly the same for females. To date prices have leveled off on Canadian crab on the larger 8 and 10 up products with limited offerings. However the 5/8 size has continued to soften.
This market has remained unchanged in regard to supply Smaller king crab sizes remain very tight, especially on 14/17 ct, 16/20 ct and 20/+ ct. These three sizes have seen the biggest issue with availability and as a result costs are firming. They are still fishing for Russian crab but most is moving through the Asian market causing some delays on containers. We do not expect any relief on supply for months to come as the recent announcement out of Alaska was not positive. For red king crab at the eastern portion of the Bering Sea more commonly called Bristol Bay, numbers of mature males dropped more than 40 percent from last year and mature females were down 54 percent. Buyers need to consider gold king crab as a viable option for the 2019 season.
A new 10% tariff on all seafood items should go into effect in August. The market is still uncertain however, between high market prices, and limited supply, cost might go up. This coupled with the void in the market on red swimming crab only strengthens this possibility. We are still expected to start receiving shipments on red crab in October. The main crab harvest is October – December.
Prices are still high with great inventory. There has been a slight decrease in pricing from Indonesia while Philippines and India move up to be more in line with Indo. For the next 60-90 days prices will stay level to a possible dip however, Q4 is expected to pick back up. With the red swimming still high with limited supply, this too drives the price up. Overall prices will come down a bit.
Seafood | Scallops
With increased quota this season and more open areas to fish...costs have decreased for the first time in several years. Supply has been more readily available in the larger sizes. As we enter the fall and the season starts to wrap up, expect costs to start to firm for the winter months.