Market Updates for February 8, 2019
Meat | Beef
Extreme cold weather is slowed cattle sales as feedlots struggle to get cattle to market weight. Prices are inching higher.
Seasonally slow demand is putting downward pressure on prices.
Rib prices are inching higher with small premiums noted on forward sales.
Prices often drift lower in early February but this year the trend has been more sideways.
Round prices have firmed as consumers cook roasts at home
Prices are adjusting lower after last week's restaurant closures backed up supply. It may take a week or two before the spring uptrend resumes.
Tender prices have adjusted lower but are still high for this time of year.
Seasonally-declining beef production is lifting prices for ball tips, flank and skirt meat.
Meat | Pork
With hog slaughter running 5-7% above last year cold-weather plant closures reduced price pressure only briefly. It will be hard to get any price recovery going until we see an extended period of smaller output.
Butt prices are at extreme lows yet large production is keeping prices on the defensive.
Ham prices are under pressure as processors take their time builing inventory for a late Easter.
Belly prices are trending lower much the way they did in each of the last two years. Lows were reached in April in both 2017 and 2018.
Rib prices have started to firm up, but big production is muting the uptrend.
Bome-in and boneless loin prices are moving higher as retail features lift demand. Prices are now close to where they were in February 2018.
Meat | Beef
Cattle and beef prices are steady this week although there is some expectation that unfavorable weather has slowed fed cattle marketings and will support prices.
Ground beef prices continue to ease as we transition into a typically-slow mid winter period. Prices may continue to adjust lower as ground beef competes with pork and chicken at retail.
Rib prices are stioo inching higher but demand seems to be slowing down a little.Forward sales are still at a small premium to cash prices.
Prices often drift lower in January but this year they have been trading sideways.
Round prices have firmed as consumers cook roasts at home.
Prices have drooped a little after Polar Vortex restaurant closures backed up supply. It may be a week or two before the seasonal uptrend resumes.
Tender prices are adjusting lower following a slow week in food service. Prices are still well above last year.
Seasonally-declining beef production has ball-tips, flank and skirt meat trending higher.
Meat | Pork
Hog and pork prices often strengthen in January as production shrinks seasonally. This year, however, production has only inched lower, leaving markets oversupplied and prices on the defensive. Weather interruptions could provide some temporary support, but plenty of hogs are still out there.
Butt prices are 20% lower than last year which offsets Mexico's retaliatory tariff. Export interest should begin to provide support.
Ham prices are flat as export interest is offset by large production.
Belly prices are retreating as QSR features end. The last look we had before the Government shutdown showed healthy freezer inventories. Prices may need to work lower to attract interest for freezer programs.
Rib prices have started to firm up, but big production is muting the uptrend.
Bome-in and boneless loin prices are moving higher as retail features lift demand. The latest weather episode should help by driving at-home consumption..
Poultry | Chicken
Demand for whole chickens is a little better, but prices are still on the defensive.
Jumbo breast meat is available; medium breast and tenders are balanced. Prices for both tenders and medium breast are steady, jumbo breast prices are a little weak.
Wing prices are steady as restocking occurs following Super Bowl. Game action allowed plenty of time for eating so consumption appears to have been good.
Strong export demand supporting leg quarter prices. Leg meat and thigh meat prices are about steady.
Poultry | Turkey
Hens and smaller sized toms are in great shape; larger toms are no longer under pressure. Bone-in breast prices are at least steady.
Seafood | Finfish
Supply remains tight and costs are firm as we head into Lent . The Alaskan cod quota has been reduced by 18,000 tons and with reductions in quota on other white fish species as well. Poor environmental conditions, lack of incoming recruitment are just two of the reasons for the lowered quota. The end result will be increased costs on cod overall.
The 1x frozen Atl. cod loins are firm on cost and could increase further. Recent adverse weather and reduced quota have resulted in limited catches for the fishermen at this time. The smaller 4 oz size has been the most effected as the current harvest has yielded larger fish and therefore larger loins. We hope to minimize any out of stocks on this item but it could be hit or miss. Expect this trend to continue at least through Lent and possibly through June.
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.
The overall Pollock quota has remained fairly stable. Reduction in quota out of the Gulf of Alaska has been offset by increases out of the Eastern Bering Sea for the most part. However it has also been noted that there are limited holdover inventories for the start of 2019 that could push up costs pre-lent. For now costs are stable.
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.
Supply of Yellow Lake Perch, Walleye, Whitefish and Smelt has been plentiful on all sizes and is expected to remain so through Lent. Costs have softened some as of late on the larger walleye sizes and perch, just in time for Lent. Canadian bluegill continues to be a problem as the resource has experienced limited catches and is awaiting the start of the new season after the first of the year. The sub for this item is the Chinese offering of bluegill. This is the same species as the Canadian just grown out in Asia and is a great option to the current.
Supply is good and costs have softened some but are expected to remain stable for Lent This is a more cost effective substitute for the higher priced domestic lake fish items where applicable. Currently there is stock on all sizes of pike perch and European perch for Lent.
Mahi Mahi costs have continued to soften as the season has resumed out of Peru and Ecuador down to 2013 and 2014 levels. Reports indicate there is left over product from the 2018 season both domestically and over seas, leaving the market in flux. Current harvests now have yielded larger fish in the 6 and 8 oz portion levels where there has been limited production of the 4 oz size at this time. This could flip as they move closer to the closure of the fishery and in more southern fishing areas specifically out of Peru. Expect the market to be unstable at least through the spring where we can gauge if the excess inventories have been flushed out of the market.
VIETNAM– Is going into the Chinese New Year. So, for the month of January production will be cut in half, with it totally closing down for 2 weeks. Because of the production slow down, raw material prices will be high. In March they will resume to full production and prices will be reviewed at that time for late spring arrivals. . INDONESIA – There are only a few regions in Indonesia landing raw material and those are minimal. With the lack of raw material, prices are firm and high from this region. Their season will start in late March/early April. Prices may find relief at that time, depending on the strength of those landings. Thailand – Landings are very minimal. . For Swordfisn, in Ecuador – all the boats have been fishing for Mahi, so there has been virtually no production. They will retool for Sword in March/April. Pricing will be reviewed at that time. In Asia (Vietnam & Indonesia) – European demand continues to be much higher than usual, putting pressure on supply and pricing. Landings are tied directly to Tuna, so the notes above also apply to Sword.Thailand – Only processing frozen on-board product at this time. As a general rule, all of it is untreated. Landings are low. Prices are high and creeping up. Overall Limson has supply on all sizes with stable costs at this time and for Lent
Reports of more consistent swai supply from producing countries.
The tariff war has increased costs of product by 10% . The potential for another 15% increase has now been delayed until the beginning of March by the Trump administration.
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
Landings were initially reported to be down 30-40% in early December. It is assumed a 2 million lb + shortfall of meat, as well as 4 million lb + shortfall of tails is expected. Most sizes from the processors are on allocations with limited to no inventory on sizes larger than 5-6oz. Some indications that landings have improved, but the damage had been done when the shore price reached extreme highs before the holidays and many processors closed for the winter. Spring season starts in early May, but initially a lot of this goes to live or whole lobster production in order to avoid a bottle neck from tail and meat production. Realistically look at improved availability in early June. For now prices are high with limited supply on 6/7 oz tails. Meat has bottomed out and is expected to firm on cost soon.
Supply has been short on warm water tails after a late start to the season this summer. Poor catches, increased demand out of Asia and retailers taking a stronger position on the market have resulted in a firm undertone. This trend continued through the holidays and is expected to remain firm until new season supplies start to arrive in July. The WW tails in the 6 and 8 oz sizes might be a viable option to the lack of larger N Atl tails but costs are a trade off as both species report a firm market and overall lack of supply.
Seafood | Crab
The global shortage of snow crab continued 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 in zone 3L. This will out weigh any increase out of Alaska and in the end, snow crab is still expected to be short and at it's lowest level since 2011. As of late the 8-10 and 10 ups have bounced back up in cost due to limited supply. 5/8 have remained stable as the best cost option on snow crab at the moment. Many predict another high priced market for 2019 but movement will depend on what the market wil bear and if buyers move to other more cost efficient species.
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 firm. 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. Note however due to the lack of overall supply for reds the costs of golds are starting to increase as well.
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 is expected to start to soften as we enter into the spring season in time for harvest . Strong demand has impacted cost on some of the larger sizes currently but that will change over time as well. Supply is good on all sizes.
10% tariff duty has been applied. The possible added 15% has now been pushed back to the beginning of March when the Trump administration will decide on a final ruling.