Market Updates for November 30, 2018
Dairy | Cheese
The CME Block and Barrel Markets continue to be bearish in the current environment. Speculators point out an abundance of stock of cheese being stored even with a strong demand. The current dairy herd has been strong in numbers, we are currently watching the cull numbers to see if this strength will have some weakening.
Block - Up
Barrel - Down
Block - Down
Barrel - Down
Dairy | Eggs
Retail demand ranges only fair to fairly good. Supplies fully adequate to available. Market adjusting.
Large - No Change
Medium - No Change
Small - No Change
Large - Down
Medium - Down
Small - Down
Dairy | Butter
Butter production is starting to slow for the holiday season now that most if not all orders have been filled and inventory is ready to go; inventories continue to be high when comparing to last year and expectation is to go in to the New Year with elevated levels. Pricing is softening and expectations are that they will remain soft through the remainder of the year.
Butter - Up
Butter - Down
Grocery & Bakery | Wheat
Lower prices discouraged farmer selling which has tightened supply. Millers are paying premiums to shake wheat loose and passing this on with higher flour prices.
Grocery & Bakery | Soybean Oil
Soybean oil prices are at the low end of the USDA's $0.28-$0.32/lb range. Falling crude oil prices have pressured bio-diesel values.
Grocery & Bakery | Sugar
Now that most processors have forward sold a significant part of their output, they have tightened up the lower end of their offers. Cane remains at a 2-3% premium to beet sugar.
Meat | Beef
Cattle prices were up after the USDA survey showed fewer-than-expected cattle in feedlots. Beef prices have not increased, but packers are still making pretty good margins so production is steady.
Ground beef prices dropped following slow sales during Thanksgiving week. Prices could remain under pressure until reduced production schedules tighten supply in late December.
Ribeye prices have topped out with select ribeyes already adjusting 12% lower. Choice ribeyes usually have a few more weeks before big price adjustments kick in.
Holiday sales of BBQ brisket sandwiches are keeping product moving and prices well supported.
Retailers are actively booking rounds for post-holiday features. Prices may remain soft until after Christmas.
Packers are keeping strips and short loins on their "push list" this week. Prices often make their seasonal low in November.
Tender prices may be topping out. We are starting to see cheaper product coming in from Canada.
Prices for most thin meats are weaker as we enter a slow demand time of the year. Skirt meat prices remain higher than in previous years.
Meat | Pork
Pork production will peak out in the next few weeks pushing prices to seasonal lows. Processors and end users often put cheap pork in freezers to use during the spring price rally.
Butt prices are below previous 2018 lows. Extra production should move into freezer programs or exports,
Ham prices have are also at 2018 lows, another good candidate for freezer programs.
Belly prices have leveled out for now, but there is still downside risk until January..
Rib prices are below where they were last year. Demand for freezer programs is good.
Loin prices are at a 5-year low as packers struggled to keep product moving during Thanksgiving. We often see prices increase as we move into the winter months.
Poultry | Chicken
Cut-up chicken sales are picking up as holiday shopping boosts QSR demand.
Most breast meat items are steady with the usual level of discounting. Food service demand for tenders used in boneless wings is good.
Wing prices are steady due to stronger food service demand.
Export demand for leg quarters has slowed down again. Thighs meat is in balance; leg meat is pushy.
Poultry | Turkey
Early reports suggest holiday whole turkey movement was better than last. Processors are holding prices steady and are starting to ask premiums for bone-in breasts.
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.
2019 Total Allowable Catch is announced at 6.5% lower than 2018. Prices will remain firm.
Due to lower catch announced from Atlantic cod. Pacific cod raw material price remains high.
Costs on 1x fz Pollock are currently stable with adequate supply as we prep for Lent.
Firming of pricing as expectation of drop in pollock biomass. Starting to see substitution demand from cod and haddock users.
15% decrease of Total Allowable Catch announced for haddock. Price is still cheaper than cod. Expectation of cod substitution to continue.
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
Reports of more consistent swai supply from producing countries.
Tariff war will increase cost by 10% and potentially an additional 15% January 1, 2019.
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.
10% tariff duty has been applied. An additional 15% may be applied January 1, 2019.