Market Updates for July 26, 2019

Section Type

Dairy | Cheese

Due to the cheese inventories report coming out bearish, the CME Block and Barrel Markets grew strength.  Speculators still feel there is enough cheese available to keep the market from falling to the bulls.  Focus will continue on crop reports and weather reports as we go through the coming months.  

Last week:

Block - Down

Barrel - Down

This Week:

Block - Up

Barrel - Up

 

Dairy | Eggs

 Retail demand fair to at times fairly good. Supplies generally available. Market soft and adjusting.

Last week:

Large -Down

Medium -No change

Small -Down

This Week:

Large -No change

Medium -No change

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'. 

Last week:

Butter -Up

This Week:

Butter -Down

Grocery & Bakery | Wheat

After trading higher due to hot/dry weather in Europe wheat prices have settled back to where they were in mid-May. Corn prices continue to provide a floor.

Grocery & Bakery | Soybean Oil

Soybean oil prices have been trading in a 27-29 cents-per-pounds range since the growing season started. New input on the potential crop size will be available in a few weeks; until then we may be range-bound.

Grocery & Bakery | Sugar

2019's sugar beet crop is off to a good start with some price softness seen. Processors still have a big part of next year output available for booking.

Meat | Beef

Beef production is running 1% higher than last year -- consistent with 2% more cattle on feed and slightly lower cattle weights. Cattle prices dipped a little below last years levels and beef prices could follow in the next couple of weeks.

Ground Beef:

The number of retail features tapered off after July 4th but are still above last year.  Ground beef prices remain well above last year with forward booking for Labor Day features kicking into high gear. Cash prices should begin to firm in August.

Ribs:

Rib prices are holding at the same levels that they peaked at in previous few Labor Days. This could mean that prices trade sideways through much of August.

Briskets:

Packers were able to get a large quantity of briskets sold forward so spot supplies are very manageable. Prices are firming.

Rounds:

Prices seem to have found a level which is keeping product moving; most sales are at steady money. The one exception are inside rounds, where East Coast features have tightened supplies; prices are edging higher.

Strips:

Prices are steady as retail grill features provide some support.

Tenders:

Choice tender prices adjusted lower last week, narrowing the premium to Select grade.

Thin Meats:

Thin meat prices remain high, but are acting a little "toppy". We could see a gradual adjustment lower.

Meat | Pork

Hog marketings got "bunched up" in June, which pushed pork production 9% above last year. Predictably this slug of output crushed hog prices. Summer heat hit hard in July, slowing weight gain and shrinking production. Last week's output was below year-ago, yet another surprise for the market.  Pork prices did and "about face" last week and are now 10% higher.

Butts:

While it is probably too early to start a Labor Day price rally, shrinking supplies are providing some support to butt prices.

Hams:

Ham prices got close to 2018 levels in early July and, with the 20% tariff ending, Mexican buyers were back in a big way. Now that supply is shrinking, prices are heading straight up.

Bacon/Bellies:

While other pork cuts got a lift from lower output, belly prices went ballistic -- up almost 30% in two weeks.

Ribs:

Once prices got cheap, club stores and retailers booked heavy for grilling features. Back ribs and St. Louis ribs were the first to firm up and commodity spareribs should not be too far behind.

Loins:

​Bone-in and boneless loin prices are now only a dime apart. Grilling demand for bone-in chops and backribs (from which boneless loins are the "byproduct") have boosted demand for those items while cheap chicken breast is setting a low competitive bar for boneless loin prices. Shrinking supplies are likely to benefit bone-in chop prices much more than boneless.

Poultry | Chicken

Chicken output has averaged 6% larger in the last 6 weeks -- 2% heavier weights and 3.7% more slaughter. Whole chicken prices continue to slip.

Breast and Tenders:

Medium chicken breast and tenders are oversupplied and prices are adjusting lower. Jumbo breast is getting some support from QSR portion processors.

Wings:

Medium wings are tight with premiums paid. Jumbo prices are steady, small wings are discounted.

Dark Meat:

With prices near all-time highs, leg quarter exports have slowed. Leg meat prices are steady but thigh meat, which is trading at a 15% premium to leg meat, is subject to discounting.

Poultry | Turkey

Whole turkeys prices are gradually trending higher.

Seafood | Finfish

Cod, Alaskan 1x:

Alaskan cod remains firm in cost with adequate supply as we await the start of the B season.  

Cod, Atlantic 1x:

The 1x frozen Atl. cod loins came up short for the season this winter,however we were able to supplement with Icelandic product of the same spec and qualilty to cover demand.  The new season for CAN has started but to date we are awaiting our first orders.  Note costs have firmed over last season  on all offerings and are expected to remain elevated at least through the end of the year. For now Limson has supply on all sizes.  

Cod, Atlantic 2x:
Cod, Pacific 2x:
Pollock, Atlantic 1x:

New B season Pollock is being processed at this time as we await the first of many shipments out of Alaska.  For now expect costs to remain firm for most of the season.  Currently supply is adequate for solid demand.  

Pollock, Pacific 2x:
Haddock:

Haddock costs  are firm on product out of Russia, Iceland and Canada.  Note the fishing quota is also down by 25% compared to last year at 15,000 MT  for 2019 out of Canada. Currently fishing is good in CAN so they do expect to catch the qouta.  Overall supply has been adequate but at firm costs for all COO's 

 

Domestic Lake Fish:

At the end of March the  Lake Erie Committee (LEC), set a total allowable catch (TAC) for 2019 of 8.552 million pounds of yellow perch and 8.531 million walleye. Yellow perch are allocated in pounds and walleye are allocated by number of fish. This TAC represents a decrease for yellow perch from 10.498 million pounds of fish over  last year, (about a 20% decrease overall) and an increase in walleye from 7.109 million fish (about a 20 % increase overall).     As a result perch prices have risen quickly and product has been short especially on the smaller Mi sizes but specifically the Mi splits. For now product is hand to mouth on this size as we progress through the summer.  Expect perch to remain short until next year and the start of the 2020 season overall, with a potential for another qouta cut at that time.  Walleye has experienced  softening on costs with the increase in quota.  Supply is plentiful at this time on all sizes     Whitefish currently has ample supply with the new season that resumed in June.  Smelt for both battered and dressed has started to tighten slightly on supply so expect costs to firm as well.  The Canadian blue gill continues to be a struggle as catches and supply have come up short.  What is being offered is minimal but firm on cost .  The next best option is the same species but produced out of China.    Supply is available but another increase will follow as all imports now out of China are impacted by the tariff.                       

 

 

Euro Lake Fish & Zander:

Supply is ample and costs have softened over time on the zander and pike perch as a better valued option compared to the walleye.       As of late and due to the increased demand from the US and lack of raw material overseas euro perch costs have started to increase.  They are still a value to the domestic perch but costs are firming as demand ticks up.

Mahi Mahi:

Mahi Mahi costs for this season softened closer to 2013 and 2014 levels earlier in the year but as we moved through Lent and as the S American season has wrapped up costs have increased slightly.  Note the fishing season for 2018-2019 is over and will  not reopen until October in S America.   The next available resource is Taiwan and that season has been underway since May  at slightly firmer costs.  Currently we have adequate supply for steady demand on all sizes with some added opportunity to move the 2-4 oz size at a competiitve cost of goods  

  

Frozen Tuna, Swordfish :

Vietnam : The new regulation about health certificates required for all imported frozen raw material has impacted on prices of local fresh raw material, seeing more demand and higher price level since it became effective. Demand (June) was strong because of Ramadan holidays in Indonesia, where plants are just going back to work after several days out. Indonesia : Several importers increased their sourcing in Indonesia on the previous months because of new Vietnam regulation, this impacted on product availability & prices. There are also more strict regulations from the local government towards their MSC certification. This will have a positive impact on the long term sustainability, but has also increased some prices. May & June production decreased because of Ramadhan holidays. They’ll go into their peak season soon, so product availability should improve on the incoming months.

 

 

Swai:

Due to sales being slow for the bulk of 2019, there is now an overabundance of supply in the US.  As a result costs have softened and general sales have been  flat.  

Tilapia:

Seafood | Shrimp

Imported Black Tiger:
Imported White:

I

Latin White:
Domestic White & Brown:
Domestic PUD:
Domestic Rock & Pink:

Seafood | Lobster

North Atlantic:

Landings were initially reported to be down 30-40% in early December out of Nova Scotia.  It was assumed a 2 million lb + shortfall of meat, as well as 4 million lb + shortfall of tails .  As a result costs remained firm through the spring and have continued to do so going into the summer on tails .  We do not expect much relief on availability or cost until the Maine season resumes the latter part of July.    To date poor weather had resulted in poor landings and supply is lacking  .   Large sizes in the 6/7 and 8/10 oz range are very short with very few cases being offered to keep up with demand and  costs are firm.  Meat costs are more stable and are a better lobster option as  they softened earlier this season but as of late have taken a slight uptick.   

 

 

 

Warm Water:

New season Brazil tails have arrived this week but with a firmer undertone compared to 2018 supply.  The hope is that once Brazil gets in full production and the Bahamas,  and other regions start to harvest that costs will adjust.    Until imports bulk up on supply,  costs will be firm.    

 

Seafood | Crab

Snow Crab:

Following up on Canadian Snow Crab.  The 2019 Canadian snow crab season is nearly finished now.  Most of the major fishing areas have already stopped at this point.  The remaining 5% of the Canadian quota that has not been caught yet will trickle into the plants over the next month or so.  We have seen consistent demand from all segments compared to last year and overall size breakdowns appear to be slightly smaller  as well. We certainly saw less 10+ oz and 12+ oz produced in Canada.  As a result, we have a historically large price gap between 5-8 oz and 8-10 oz this year, which is likely to persist.  Large volumes of 5-8 oz clusters were purchased in May by retail and Japanese buyers, followed by some large foodservice contracts.  This put a firm bottom in the market and it has been pushing higher as plants have been trying to fill commitments and keep up with demand. However, the snow crab biomass in Alaska has been growing and indications are there will be a large quota increase announced this fall.  This should be good news for buyers that have struggled with shrinking supplies and higher prices over the last few years.  The new Alaskan snow crab will likely begin to arrive in Seattle in February 2020. 

 

 

Red Swimming Crab:

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. 

Blue Swimming Crab:

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

For domestic scallops, the expectation was that costs would soften this summer, however  the demand as of late has dictated an increase on the 10-20 and 20-30 items as there was a lot of trading at the auction  as they entered the holiday weekend.  Heavy  fresh buys at this time also increased demand.   The U10- and U 12 actually softened as they pulled a good portion of these out of the Georges 1, Channel and other regions.  There is still a significant amout of the qouta left to be cuaght, so will need to see how July plays out and impacts the rest of the summer.  

 

Chinese Flounder and Ocean Perch: