Market Updates for August 30, 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 - Down

This Week:

Block - Down

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. We are getting close to the cheapest flour prices in ten years.

Grocery & Bakery | Soybean Oil

Soybean oil prices are also near ten-year lows as the Chinese trade dispute shrinks export demand.

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

Harvest data shows that other packers have picked up most of the slack from Tyson's closed plant with beef production running near pre-fire levels. Beef prices have started to come down from the panic-buying levels of two weeks ago.

Ground Beef:

Prices for ground beef spiked to one of the highest pre-Labor Day levels ever seen before backing down as buying subsides.

Ribs:

Choice rib prices have peaked at an all-time Labor Day high and are now drifting lower as buying slows. Product availability is limited, however, as distributors refill depleted inventories.

Briskets:

Brisket prices are trending higher.

Rounds:

Round prices climbed higher than anyone expected and are now adjusting lower. Distributors were cleaned out for the holiday, so there may be enough replenishment buying keep the price decline gradual.

Strips:

Like ribs, strip prices got to a new Labor Day high. Now that the last grilling holiday has ended "look out below"!

Tenders:

Tender prices went far above where anyone was expecting and inventories are depleted. It may take a few weeks before prices adjust back to normal.

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 production is up 7% and prices are down 18% -- an abrupt end to the summer price rally. Production should keep rising, albeit more gradually, with prices adjusting lower into fall.

Butts:

Butt prices are holding in the upper range of where they usually trade this time of year. Supply is big so it must be improved demand (probably export demand) supporting prices.

Hams:

Ham prices have dropped a long way. They are now getting into the range of prices which often attracts retailer and processor interest for Christmas holiday builds.

Bacon/Bellies:

Belly prices are so fun to watch -- down 55% in the last ten days! We should see a period of softness allowing buyers to reload for the next retail feature or "Baconator" ad.

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.

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 the new season for CAN is now underway so expect costs to soften some compared to the Icelandic and then level out for the balance of the year.    

Cod, Atlantic 2x:

2X Frozen Cod remains firm in cost with adequate supply.  

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

New B season Pollock is now in our inventory   There is ample supply for stable costs. 

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 and into the fall.    Expect perch to remain very 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  softer costs with the increase in quota for the majority of the summer.  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  tightened on supply as costs firm.  This resource in general is under stress and some are not sure if this will be a viable offering in the future.  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:

Zander and pike perch are a better valued option compared to the domestic walleye at this time.  Costs on this species have been stable with adequate supply.  Euro perch however is starting to feel the pressure from the lack of domestice yellow lake perch .  Supply is short and costs on the 20-40 and the 40-60 g euro perch have firmed up recently and are expected to remain at this level through the fall at least until fishing resumes and supply becomes more readily available.  

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 increased slightly.  Note the fishing season for 2018-2019 is over and will  not reopen until October in S America.  Taiwan product started out at a slightly higher cost but has softened some as there appears to be more supply available overseas.    Currently we have adequate inventory for a steady demand on all sizes with added opportunity to move the 2-4 oz size at a competiitve cost of goods  

  

Frozen Tuna, Swordfish :

Harvesting and production of tuna out of Indonesia and Vietnam  has slowed as we move into the off season.  Demand has also slowed as we wrap up the summer grilling season.  Currently costs are stable and are expected to remain so until after the first of the year.  Swordfish also mirrors the market on tuna for availability and cost.  

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.  There are adeed opportunities to move load quantities if needed.  

Tilapia:

Tilapia remains firm in cost with adequate supply.  

Seafood | Shrimp

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

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 through the summer on tails .  To date poor weather and a late  summer with cooler temperatures have resulted in very poor landings out of Maine where tails are reported to be down as much as 20-30%.    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 overall.  Imports from Canada were reported to be down 8.7 % through June.  The market for many sizes of North American tails is currently sitting at recorded highs, and those that are not at those levels are quite close. Supplies of tail products is limited, and similar to warm water tails, there’s pent-up demand. The trade was similarly active, and along with altered trade flows, prices were fully supported. Meat prices have also strengthened, but modestly, as seasonal buying interest presented.  

Warm Water:

The market for Brazil origin lobster tails has been reestablished since the season opening, and the first few containers have arrived out of Honduras.  The market for prime size Brazil tails opened  below the April price, but at its highest July level since 2007. There’s pent-up demand for all types of lobster and reports indicate that arrivals are easily moving through the supply chain and that stock-outs are occurring in the most sought prime sizes for some.  Costs have remain elevated with limited demand.  The hope is that once all regions start to produce tails that the market might stabilize, but that has yet to be seen to date.  Current costs are firming for an overall lack of supply.  

Seafood | Crab

Snow Crab:

The 2019 Canadian snow crab season has finally wrapped up in all regions.    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

Scallop costs have leveled off some for the summer as costs were low in June on the smaller 10-20 and 20-30  but spiked back up for the holiday in July with August seeing another drop in price for these sizes.  The larger U-10's and 10-12 have declined in cost since the spring.  To date there is no expectation of shortages going into the fall and winter.  Typically as the bulk of the season and fishing declines in the fall costs stabilize and start to increase for the winter months. 

Chinese Flounder and Ocean Perch: