Market Updates for January 24, 2020
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. 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.
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 for sale. This will continue through the spring and possibly into next year’s season as well. Walleye costs saw some softening at the end of 2019 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. The fall Whitefish season did not materialize as expected either. High winds and poor weather overall hampered fishermen's efforts and supply came up short. Dressed smelt is short as the domestic raw material product was extremely limited on supply , so much so there is a shortage of the battered as well. Limson is working on securing more product but the resource is limited and costs are firm. This fish 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 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. Swordfish landings in Vietnam are limited and there are no offers on Swordfish from Ecuador yet due to the mahi season being in full effect.
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.
Seafood | Salmon
Current prices in Norway have continued to stay very high after the holidays. The usual plant closing, reduced harvesting and increased demand is the normal cause of the price increase. The last few weeks have also been impacted by unusually bad weather limiting harvesting in many areas in Norway. During 1H a large quantity of fish were lost during algae bloom and some areas had to harvest heavy because sea lice. As for 2H there is hope to see good supply, especially if water temperatures follow usual patterns.
There will be good volume this year on Chilean salmon, however, there is concern due to sea lice which was already at record levels when heading into the summer season. Stronger government regulations are being implemented and will lead to higher production cost. Also, with the focus on new farming areas there are higher logistical costs.
Dairy | Cheese
The CME Block and Barrel Markets has had an upward trajectory as of late. Speculators feel this is due to the reduced inventory levels released by the USDA. The bears should return soon to the block market.
Block - Up
Barrel - Down
Block - Up
Barrel - Up
Dairy | Eggs
Retail demand good to very good. Supplies tight to short. Market firm.
Large -No Change
Medium -No Change
Small- 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'.
Meat | Beef
Beef production has been averaging 2% higher with wholesale prices unchanged from last year. Retailers have pushed prices 4% above last year and are reducing feature activity. While demand is good enough to keep most prices steady, prices may remain flat overall.
Ground beef prices have stayed pretty close to the average for the last three years. Retail featuring is down from last year so prices could drift a little lower.
Rib prices remain at the top end of 5-year averages, just like they have since summer 2019. High employment and rising incomes are driving demand for this premium beef cut.
Forward sales of briskets are made at higher prices suggesting we could see some price strength as we approach St Patrick's Day.
Last year we saw big forward sales of flats in January; this year there were big sales of insides. Insides prices may get more lift than flats as a result.
Forward sales of strips and short loins have not been exceptional, but they have been strong enough to suggest a gradual price uptrend.
Big volumes of tenders traded just under $10/pound in the last few weeks as steak cutters and retailers get positioned for Valentines Day.
Beef slaughter declines seasonally as we get into winter, tightening supplies of thin meats. Prices have started trending higher.
Meat | Pork
Pork output continues to run 5-7% higher exerting pressure on pork prices. Retail featuring and strong exports have offset the impact of big supplies on certain cuts.
Butt prices are drifting lower as they often do this time of year.
Ham prices have come down from their pre-holiday peaks but remain at the high end of historical ranges for this time of year. Excellent demand from Mexico continues to be a supporting factor.
Retail features of branded bacon are widespread now, lifting belly prices up 40% from first-of-month lows.
Spare and back rib prices are in the middle of historical ranges; big supply is balanced with good seasonal demand.
Bone-in loins are getting a little support from pork chop features but boneless loin prices are being held down by cheap chicken breast.
Grocery & Bakery | Wheat
Spring wheat (pizza flour) prices seem to be leveling out temporarily at prices 5-10% below last year. Smaller North American supplies have pushed pasta flour prices 15-20% above last year.
Grocery & Bakery | Soybean Oil
We saw prices surge higher in December but, with little new news, prices have drifted below the USDA 34 cent-per-pound forecast.
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 more likely in the south and eastern coastal areas versus the interior of the U.S.
Poultry | Chicken
New capacity has added 5-6% more chicken output, but almost all of it is large birds destined for deboning. Smaller-sized whole bird prices are mostly steady.
With production of jumbo breast meat at record levels, prices are at all-time lows with few signs that things will improve soon. Medium and small-sized breast meat are in good shape. Tenders have experienced a strong run as demand for boneless wings remains strong.
Wing prices have leveled out as we get close to Super Bowl time.
Expectations of a Chinese export bonanza have given way to the reality that it may take time for these exports to get going. Leg quarter, thigh meat and leg meat prices are all drifting lower.
Poultry | Turkey
Whole turkey prices came down a little after the holidays, but are now mostly steady at the upper end of historical price ranges for this time of year.