Market Updates for March 22, 2019
Dairy | Cheese
The CME Block and Barrel pricing has found a range where speculators feel will continue in the short term. With the spring flush approaching the highs will be minimized, but second half of the year strength is still being projected.
Block - Down
Barrel - Down
Block - Up
Barrel - Up
Dairy | Eggs
Retail demand fair. Supplies fully adequate. Market mixed.
Large - No Change
Medium - No Change
Small - No Change
Large - No Change
Medium - Down
Small - No Change
Dairy | Butter
Butter production continues to be active and inventories continue to grow; expectations are for butter pricing to stay relatively stagnant on the spot market over the next few weeks prior to the butter inventory is reset with current levels and previous inventory is ‘wiped out'.
Butter - Up
Butter - Up
Grocery & Bakery | Wheat
Flour prices have dropped below most expectations; we may not get price strength until we get into the spring growing season.
Grocery & Bakery | Soybean Oil
Soybean oil prices are back to the lower third of the USDA's $0.285-$0.315/lb range. Production is outstripping demand despite record biofuel usage.
Grocery & Bakery | Sugar
Refined sugar.prices are steady; raw sugar prices are firming up.
Meat | Beef
Beef production has been close to last year as cold, wet feedlot conditions slow weight gain. Beef prices have leveled out as Lent takes a toll on demand.
Ground beef prices have jumped above where they were last year and above forward sales prices. We may be topping out for the neat term.
Rib prices jumped in early 2019 which may have limited the extent of Easter features. Prices have only been inching higher recently and could stall as we get close to Easter.
Prices are a little weaker now that corned beef processing for St. Patrick's Day is over.
Beef roast features are winding down causing round prices to ease.
Strip prices are a little softer as get further in Lent; it is not unusual to see a sideways/lower market until we get closer to grilling season.
Like strips, tender prices are a little soft as we move closer to Easter.
Prices for most thin meats trending higher; supplies are tight.
Meat | Pork
We are seeing processed pork prices recover -- both belly and ham prices have moved above last years levels. The balance of pork items are starting to see support from improving export and domestic demand.
Butt prices are getting a little traction as we get closer to the time for a typical spring uptrend.
Ham prices have recovered to where they were at this time last year. Prices will reset lower after the processing window for Easter hams closes in early April.
When belly prices hit $1/lb. booking for features and freezer programs kicked in. With much of current production presold, spot availability is tight and prices are rising.
For anyone who didn't get their ribs booked last fall the latest price break is giving them a second chance. Prices seem to be bottoming out.
Bone-in and boneless loins are getting more retail attention; prices are edging higher.
Poultry | Chicken
Deli demand for whole chickens is building. Overall chicken production has been virtually unchanged from last year which is keeping supplies tight.
With production unchanged from last year, it should be no surprise that we are on the same upward price path as we were last March. Medium and jumbo breast meat prices are a little below 2018 levels, perhaps due to impact of competition from cheap pork. Tenderloin and small boneless breast meat prices are both above last year.
Wing prices are above last year due to expanding demand from sports spectators.
Leg and thigh meat demand is average; prices are steady.
Poultry | Turkey
Lower turkey production levels are supporting prices for both whole turkeys and bone-in breasts.
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. 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 walleye especially the smaller sizes. There is an expectaion that the qouta on walleye will be increased this spring, and many expect the yellow perch quota to decrease . Note the formal announcement is not publicized until the Lake Erie Committie convenes to discuss the biomass results on the lake and ths state of the fishery. This typically comes out at the end of March. However...as a result of the anticipated cuts... replacment perch costs have increased over the last two weeks. Limson is already discussing opportunities on product post Lent and will advise the direction after the qouta announcememts. Canadian bluegill continues to be a problem as the resource has experienced limited catches. This still persists at this time. The Chinese offering on bluegill is a great substitute for the Canadian option. This is the same species as the Canadian just grown and processed out of Asia.
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.