Market Updates for November 9, 2018
Dairy | Cheese
The CME Barrel market has found some strength as of late moving closer to the Block market. Speculators feel there is currently some weakness in the market and large gains are not in the short term forecast. The supply over demand environment will keep both markets in check over the coming weeks.
Block - Up
Barrel - Up
Block - Down
Barrel - Up
Dairy | Eggs
Retail demand fairly good to good. Supplies well balanced and held with confidence. Market steady to full steady.
Large - Up
Medium - Up
Small - Up
Large - Up
Medium - Up
Small - No Change
Dairy | Butter
Butter production has increased over the past few weeks to meet current needs and fulfill Holiday needs while maintaining inventory levels. Overall spot pricing is flat and futures are steady with expectations that pricing is going to remain at current levels for remainder of the year.
Butter - Up
Butter - Down
Grocery & Bakery | Wheat
Abundant supply of high quality wheat has pressured cash prices lower allowing millers to shave a penny or so off flour prices. Until exports pick up cash wheat prices will remain soft.
Grocery & Bakery | Soybean Oil
Soybean oil prices are at the low end of the USDA's $0.28-$0.32/lb projected range. Falling crude oil prices have lowered bio-diesel breakevens which reduces the value of soybean oil.
Grocery & Bakery | Sugar
Harvest is wrapping up. Pricing has been flat for both beet and cane sugar.
Meat | Beef
Packers bid cattle up after 3 items -- ribs, tenders and briskets -- spiked higher.
Cow kills remain large but are closer to 2017 levels; prices are rising back up to where they were last year at this time.
Ribeye prices reached an all-time fourth quarter high three weeks ahead of schedule. We will see how much upside remains.
Brisket prices seem to be leveling out as we approach Thanksgiving.
Round prices also appear to be have leveling out.
Packers have strips and short loins on their "push list" this week. Prices often make their seasonal low in November.
Tender prices have now reached the 2017 high -- three weeks earlier than usual.
Ball tip prices are trending higher, but are still near average price levels for this time of year. Flank and skirt prices are somewhat higher than normal for this time of year.
Meat | Pork
Pork production has been running at record levels for four weeks now; most prices are under pressure.
Butt prices are settling back to pre-hurricane price levels; export sales are brisk.
Ham prices have leveled out, but big production seems to be keeping them flat despite the upcoming holidays.
Belly prices are adjusting lower, but are still well above where they were at this time last year.
Rib prices are where they were last year. Demand for freezer programs is good.
Boneless loin prices are falling as retail features end, bone-in loins are below 2017 levels.
Poultry | Chicken
Smaller sized cut-up chicken and WOGs are well-cleared.
Jumbo breast meat prices dropped to another new low and are at a 20% discount to thigh meat. Hard to imagine what happens when more jumbo chicken plants open next year. Tenders have drifted a little lower but are benefiting from boneless wing features.
Jumbo and medium wing prices adjusted lower but appear to be more balanced.
Dark meat sales have been a mixed bag, with drumsticks and leg quarters widely discounted. Thighs meat is in balance and seems to be finding good demand despite its premium to jumbo breast meat.
Poultry | Turkey
Frozen whole turkey prices are flat. The USDA reports Thanksgiving features are much more widespread than last year, which could reduce inventories. Frozen bone-in breast prices are up - frozen inventories are down 14% from last year.
Seafood | Finfish
Supply remains tight and costs are firm as we head into the end of the year. The Alaskan cod quota has been reduced by 18,000 tons and with reductions in quota on other white fish species as well the end result will be increased costs on cod overall.
The 1x frozen Atl. cod loins are firm and could increase further. Current adverse weather and reduced quota have limited the availability of product. The smaller 4 oz size has been the most effected as the current harvest has yielded larger fish and loins. Expect this trend to continue at least through Lent.
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 are currently stable with adequate supply as we prep for Lent.
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.
To date there is 2.4 Million pounds of walleye quota left in Lake Erie and the expectation is that all will be caught before the fall fishery wraps up. For perch the estimate is 1.4 million pounds still in the lake and it is doubtful all will be caught. As a result many expect the perch quota to be reduced overall come Spring 2019. Costs will firm slightly as we approach the end of the season and supply will be adequate into May. For whitefish the fall season has closed and the catch has yielded larger fish for the bulk of the inventory, hence larger fillets. Expect costs to firm slightly and level off for the winter until fishing resumes in June of next year.
Supply is good and costs have been stable. We expect this to maintain itself into the Spring and through Lent. This is a more cost effective substitute for the higher priced domestic lake fish items where applicable.
Mahi Mahi costs have continued to soften as the season has resumed out of Peru. Reports indicate there is left over product from the 2018 season both domestically and over seas. To date the harvest has yielded predominately small fish (65-70 % in this size) of the 4 oz portion size. Currently supply is adequate on all sizes.
As we move into the end of the year there is minimal harvest of tuna out of most regions. In January Viet Nam catches typically improve and fish becomes more readily available for spring arrivals. For now costs are stable and supply is adequate for a relatively active demand. Costs have firmed on Swordfish from Indonesia, with high demand from the European market and stricter regulations overseas. Demand remains strong from both retail and food service 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 firmed as the landings from Maine were not stellar this season and demand has been strong. Expect this trend to continue. The fall Nova Scotia season is on the cusp of beginning but there is no way to determine catches at this time as it can be weather dependent. Note this fishery typically yields larger lobster and tails, with minimal catches of the smaller 3/4 and 4/5 oz sizes. Meat has been softening over time and has started to level off. Supply is currently adequate on all sizes of tails and offerings of meat.
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. This trend continues as we start to enter the holiday season.
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. However ..many are predicting a large reduction in the snow crab quota out of Newfoundland come spring. This will out weigh any increase out of Alaska and in the end snow crab is still expected to be short. 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 slightly as processors and brokers look at moving off the balance of their inventory.
This market has remained unchanged in regard to supply All king crab sizes remain 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 this will wrap up soon as most is moving through the Asian market causing some delays on containers. We do not expect any relief on supply for months, possibly even through summer 2019 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
The scallop market as of late has taken some significant increases. Strong demand has impacted cost and these are expected to remain elevated at least until after the first of the year especially on the larger sizes (U-10, U-12 and 10-20 ct sizes). With 75 % of the quota caught they are hoping the weather will cooperate and the balance will be landed. For now expect firming prices and adequate supply.