Market Updates for August 23, 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 - Up

Barrel - Up

This Week:

Block - Up

Barrel -Down

 

Dairy | Eggs

 The national flock size is down. This is for the most part due to summer flock rotation. Retail demand has also increased.

Last week:

Large -Up

Medium -Up

Small -No Change

This Week:

Large -Up

Medium -Up

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 -Down

This Week:

Butter -Down

Grocery & Bakery | Wheat

With plenty of wheat available, prices are trading just above their feed value versus corn. The USDA raised its corn production estimate this week sending corn and wheat  prices 10% lower.

Grocery & Bakery | Soybean Oil

Soybean oil prices have firmed up to the 29-30 cent-per-pound area; the USDA reduced their estimate of 2019 soybean production.

Grocery & Bakery | Sugar

2019's beet sugar crop is 70% sold and processors are starting to increase their offering prices. Larger cane sugar crops are expected which should narrow the premium to beet.

Meat | Beef

Cattle futures dipped 7% and beef prices jumped 10% following Tyson's plant closure. As we get closer to Labor Day the panic buying by displaced Tyson customers has ended and beef markets are settling down.

Ground Beef:

Prices for the most popular Labor Day grill item spiked 23% higher, but have fallen back to where they started a couple of weeks ago as Labor Day buying winds up.

Ribs:

Rib prices have peaked and will likely adjust lower as Labor Day buying ends.

Briskets:

Brisket prices have been high which has discouraged forward bookings. Prices will likely move lower to rekindle retail and foodservice feature interest.

Rounds:

Round prices are higher as retailers chase scarce spot supply. This rally is starting to sputter this week as buying winds up.

Strips:

Prices were already trending higher when the Tyson fire hit; we are now up $2/lb. from mid-July lows.

Tenders:

Tender prices went far above where anyone was expecting them to, but the party should be over this week.

Thin Meats:

Thin meat prices got a little lift from the Tyson event, but it would not be surprising to see them resume their downtrend in the next week or so.

Meat | Pork

Pork prices crested last week and started the usual seasonal process of adjusting lower as hog supplies increase into the fall.

Butts:

Butt prices are finding a little support from Labor Day and Mexican buying.

Hams:

Mexican buying was the catalyst of July's rally but domestic processors took prices to 2019 highs last week. Now the window for Labor Day processing has closed and prices have come tumbling down.

Bacon/Bellies:

Bacon features are very widespread for Labor Day, but we are not seeing much on the horizon after that. Belly prices have started to retreat as bacon processors wind down volumes.

Ribs:

Sparerib and backrib prices were a little firmer into Labor Day, but are starting to slip now that grilling season is over.

Loins:

​Bone-in and boneless loin prices are steady due to consistent retail interest. We expect to see improved demand for boneless loins as home-prepared meals increase following back-to-school.

Poultry | Chicken

Chicken output remains high which is keeping pressure on prices. So far smaller whole birds have been sold at mostly steady money, but there is some concern about Costco's small-bird chicken plant opening next month.

Breast and Tenders:

Chicken breast is more available across most lines; discounting is becoming more widespread. Tender prices continue to slide lower.

Wings:

Medium and jumbo prices are steady, small wings have firmed up with some sales at price premiums.

Dark Meat:

Leg quarters are slow and prices have backed off a little. Leg and thigh meat prices are steady at lower levels.

Poultry | Turkey

Whole turkeys and bone-in breasts are held with confidence; larger weight-ranges are relatively tight.

Seafood | Finfish

Cod, Alaskan 1x:

Alaskan cod remains firm in cost with adequate supply.  

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 is now underway so expect costs to soften some compares to the Iclandic and then level out for the balance of the year.    

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

New B season Pollock has started to arrive into our inventory over the last week. In anticipation of new season arrivals costs have softened.    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:

The seafood industry reports seeing pressure on inventory and higher pricing on black tigers. Large-sizes 26-30 count and larger are under a lot of pressure due to seasonal demand and lower raw material availability.

Imported White:

The seafood industry reports seeing pressure on inventory and higher pricing on vannamei (white) shrimp. Large-sizes 26-30 count and larger are under a lot of pressure due to seasonal demand and lower raw material availability.

Latin White:
Domestic White & Brown:

The current catch is producing larger shrimp in the 16/20, 21/25 and 26/30 range. This goes along with the reports that all the fresh water coming out of the Mississippi has pushed the smaller shrimp out into the Gulf of Mexico. Smaller shrimp will have a lot of pressure on availability and price. The brown season is now open. Inventory on larger sizes is starting to improve which has brought some price relief.

Domestic PUD:

Smaller PUDs are becoming tight and driving up prices, as they have been pushed into the Gulf of Mexico with the influx of water coming out of the Mississippi River. 

Domestic Rock & Pink:

Inventory and pricing are stable. 

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: