Market Updates for January 17, 2020
Meat | Beef
Retail sales have been slow as mild weather encourages dining out. Prices have been a little soft on end meats and grinds as a result. Packers are likely to reduce Saturday schedules to firm up prices.
Ground beef prices are at typical price levels for this time of year, with occasional discounting noted.
Rib prices have recovered after last weeks catharsis cleaned up extra supplies. Prices should be steady/higher as long as packers shrink output.
Forward sales of briskets are made at steady prices suggesting more of a sideways market.
Mild weather has reduced retail demand; prices are no better than steady.
Strip prices are also trending sideways which is typical for January.
Tender prices are perking up now that we are only 30 days away from Valentines Day.
Beef slaughter declines seasonally as we get into winter, tightening supplies of thin meats. Prices usually trend higher as a result.
Meat | Pork
Pork output ran 6% higher in December but is expected to moderate in coming weeks. Pork prices are mostly on the defensive except when exports lend a helping hand.
Butt prices are drifting lower as both retail and export interest gets more sporadic.
Ham prices are a little firmer as good export and domestic demand keep supplies well cleared.
Belly prices are finally perking up as feature interest cleans up surplus supplies.
Spare and back rib prices are approaching grill-season price levels in the middle of winter. Both mild weather and features for spectator sports season are helping demand.
Loin prices are struggling as they compete with record-low chicken breast prices.
Poultry | Chicken
New capacity has added 5-6% more chicken output, but almost all of it is large birds for deboning. Smaller-sized whole bird prices are mostly steady.
With production of jumbo breast meat at record levels, prices have dropped back to all-time record lows. Medium and small-sized breast are both balanced. Tenders are benefiting from Super Bowl demand for boneless wings.
Wing prices are increasing going into peak demand around the Super Bowl. So far prices are tracking pretty close to last year.
Frozen leg quarter prices and thigh meat prices are steady. We will have to wait until after Phase I of the China-U.S. trade accord is signed to see what happens next.
Poultry | Turkey
Whole turkey prices are steady with retail orders starting to pick up.
Grocery & Bakery | Wheat
Spring wheat (pizza flour) prices are firming as tight supplies of high-gluten wheat push protein premiums to 5-year records. Smaller North American supplies have pushed pasta flour prices 15-20% above last year.
Grocery & Bakery | Soybean Oil
Prices have backed off of recent highs but are still in an elevated trading range.
Grocery & Bakery | Sugar
Beet and cane sugar prices remain firm as processors have little uncommitted sugar to offer. It is expected that imports from Mexico will nearly double to fill the U.S. supply shortfall. This will change shipping patterns with cheaper prices actually more likely in the south and eastern coastal areas versus the interior of the U.S.
Seafood | Finfish
The supply of the big stocks of wild whitefish are set to remain stable for 2020, lifting by less than 1% according to the forecast from the Groundfish Forum. For Pacific cod the forum forecast has the total supply at 365,000 t in 2020 down from 387,000t. This has driven a decline in Canadian and US landings from 185,000t to 158,000t. For now costs are stable with good supply for the 2020 Lenten season.
The 1x frozen Atl. cod loins from Canada are now available with plenty of supply. We recommend that you start to plan accordingly for Lent . Costs remain elevated over last year but are still a good value compared to other Countries of Origin for both quality and cost. In general the total supply of A cod is forecast to rise slightly form 1.131 m tons in 2019 to 1.132 m t . In June ICES (Exploration of the Sea) advised the cod quota in the Berents Sea for 2020 to be set at a level 2% higher than it's advised level for 2019 of 674,678 t. At 689,672 t, in 2020 advise comes in at 5% lower than the total allowable catch for 2019 set by the Norwegians and Russians of 725,000 t.
2X Frozen Cod remains firm in cost with adequate supply.
2X Frozen Cod remains firm in cost with adequate supply.
New B season Pollock is now in our inventory . Note Lenten needs have already been secured for 2020. Supply has been tight overall . The forecast at the forum for the US supply of Alaskan pollock for 2020 is 1.528 million metric tons, down from 1.552 m t in 2019. Undercurrent News recently reported the science on pollock points to possible cuts in the next couple of years.
Pollock raw material is short, prices will increase as we head into year end and beginning of 2020. Will also see tariffs increase in 2020.
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
Yellow Lake perch on all sizes remains under pressure at this time with limited to no supply. Most sizes are hand to mouth and will be allocated out based on inventory. The fall fishery did not produce the fish as was hoped for . so to date we are struggling to get small amounts of fish weekly. This will continue through the spring and possibly into next years season as well. Walleye costs saw some softening at the end of 2020 but a few items have started to increase on cost as of late. Supply is plentiful at this time on the prime sizes while the 2/4 and 14 ups (outliers) have been harder to come buy with firming costs. To date the Whitefish season has not materialized as expected. High winds and poor weather overall have hampered fishermen's efforts and supply suddenly come up short after the fall fishery especially on the 6/8 and 8/10 oz sizes. . 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. Limson has now run out of the dressed option and only has supply of the battered. With increased pressure on this item we will be unsure if the inventory will make it to next summer. Please plan accordingly for Lent and beyond. 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 tariffs
Zander and pike perch are a better valued option compared to the domestic walleye at this time. Costs on this species have been increased slightly as of late but there is adequate supply. Euro perch however is starting to feel the pressure from the lack of domestic yellow lake perch. Supply is short and costs on the 20-40 and the 40-60 g euro perch have firmed up and are expected to remain at this level through the spring at least until fishing resumes and supply becomes more readily available.
The Mahi Mahi season out of S America resumed in October / Nov with the prominent sizes being the 4oz. As of today supply for GFS has been secured on all sizes and costs will adjust to new season values once the orders are in house.
Vietnam - Peak season is starting now in Vietnam, but it is also typhoon season. Weather conditions in late December caused boats to stay at port resulting in poor landings. There will also be less than normal production in January and February due to the Holiday, Chinese New Year. Prices are stable, but possible shortages could occur in the market especially for the bi-cut products.Indonesia- There are regular Tuna landings now throughout all of Indonesia. There is still a glut in the market on Saku Tuna Blocks which affects production on other product forms.
Swai prices peaked in November of 2018 but have since dropped quite dramatically by about 40 percent, resulting in losses for farmers and producers. There is ample product available in the market today as many importers are trying to push through older product before it expires.
Farmgate prices for Chinese tilapia have been relatively steady so far this year. Supply will remain adequate for the remainder of the year.
Seafood | Shrimp
Pond stocking in India / Indonesia during the main farming season of May–Aug has been much lower this year, suggesting a continuation of supply shortage for the rest of the year. Heavy rainfall in July affected aquaculture belts. Indian industry sources indicate a 30–40 percent production drop in 2019 compared with 2018.
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.
During the season’s first harvest in April–June, vannamei production declined considerably in Asia as low price persisted in the international market. Farmers have reduced pond density, delayed seeding and even delayed harvests. This cause a lot of pressure due to seasonal demand and lower raw material availability on larger size shrimp.
Prices have firmed due to limited supply.
The current catch is coming up short on the large-size shrimp which is putting a lot of pressure on availability and price.
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.
Inventory and pricing are stable.
Seafood | Lobster
To date poor weather and a late summer with cooler temperatures have resulted in very poor landings out of Maine and this issue persists where tails are reported to be down as much as 20-30%. Nova Scotia offered minimal relief as well and due to lack of supply on tails costs have risen sharply in a short period of time. Meat is also very short with limited offerings overall for CK, CK broken, CKL and leg body meat . Since the bulk of meat products are produced in the spring Canadian season, inventory is expected to be tight through the spring as well . Lobster meat is sitting at 52-week highs, recently crossing 2017 levels, and only sitting below prices during the record-high 2016.
The WW tail market continues to be firm. Costs have been increasing since the hurricane in the Bahamas. With elevated costs on N Atlantic's the WW tails although high on cost, are still a better value in comparison. We expect to be able to meet all of the WW tails needs from other countries but the unknown is at what price level this might be.
Seafood | Crab
The market out of Canada for snow crab has been firm since the end of August on all sizes. For most of the season, larger snow crab, in particular, was seeing thinning supplies, but market participants report that all sizes are moving quickly and supplies are growing tighter. New season crab out of Canada will not be around until the end of April, beginning of May 2020. Alaska just announced a 24 percent quota increase for snow crab. However, product will not reach the lower 48 until sometime into the new year where the 5/8 size is expected to be the prominent offering. 5-8s also are at a 52-week high on cost out of both Newfoundland and the Gulf and 10-up crab is at an all-time high. Imports of Russian snow crab through August are down 7.6 percent; thus adding to a lack of available snow crab in the current U.S. market. For now supply is short overall and costs are firming.
Both Russian red and golden king crab is seeing upward pricing pressure on all sizes, in particular on reds on the larger count sizes. This pricing pressure is coming about even with imports out of Russia, specifically on red and blue king crab, which are higher year-to-date (YTD). Red king crab out of Russia is up 13.5 percent through August and Blue king crab (which is typically sold in the U.S. as a red king crab equivalent) is up 144.6 percent out of Russia. Imports of golden king crab out of Russia are actually down 12.5 percent. However, Alaska’s Western Aleutian Islands Golden king crab fishery has a quota of almost 2.6 million pounds, with roughly 1.6 million pounds harvested so far, the need and demand for king crab in the U.S. had some assistance.In general costs are firm and supply has been guarded.
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
Scallop costs started to uptick at the end of the year. Costs typically increase month over month until the season resumes come spring. . Preliminary review of the 2020/2021 scallop biomass shows good juvenile population with total quota amounts expected to be similar to this years expected 60m pound range.
Ocean Perch raw material was coming up short delaying shipments and firming up costs.
Dairy | Cheese
The CME Block and Barrel markets have seen some untraditional moves in recent weeks. Speculators feel this is not due specifically to a demand element or supply element but a combination of both. Current run-up we have seen is a combination of holiday buying and no extra product available to be taken to the market that fits the specific spec, but there is plenty of cheese to fill orders. Traders feel there is a light at the end of the tunnel, but the length of the tunnel is still being defined.
Block - Up
Barrel - Down
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.
Small- No Change
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'.