Market Updates for February 12, 2021

Section Type

Dairy | Eggs

Large - Lower

Medium - Lower

Small - Lower

Retail demand mixed. Supplies of extra large and large well balanced and held confidently. Market steady to full steady.

 

 

Dairy | Butter

Butter-Higher

Cream inventories are continuing to tighten as ice cream production starts to compete for raw material and hits it's production stride. Retail sales show signs of decline, but overall are still healthy. With restaurants reopening food service distributors are still coming back to the buying table, but orders are still below expectations. 

Dairy | Cheese

Barrel - Higher

Block - Higher

The CME Block market responded to the governments release of another billion dollars in the USDA Box program.  Speculators feel this will have an effect on the markets for the short term but will not be sustainable for the long term.

 

 

Grocery & Bakery | Soybean Oil

The USDA released their updated WASDE (World Ag Supply and Demand Estimates) this week. While the report did not reflect any major changes from their January estimates, it did reduce the overall soybean carryout projection due to increased export demand forecasts. Even though this was expected, it has set the tone that we will run into the next harvest this fall with one of the lowest % supply on record. It stresses the importance of seeing a good South American crop and seeing an increase in planted acres this spring. Any delays in getting the South American crop to market will spur more buying of US beans and likely drive prices higher.

Grocery & Bakery | Flour

So the saying goes, "if corn sneezes, wheat gets a cold." Hence, the impact we are seeing on wheat values after corn has approached its highest value in seven years. While world stocks for wheat continue to be ample, in comparison to the other grain commodities, it is starting the dwindle - further evidence that we are seeing animal feed trade from corn to wheat. With the U.S. planting intentions looming, wheat values need to remain strong enough to fight for acreage so it does not get displaced by corn and soybeans. We expect to see milling quality wheat remain in good supply given current values.

Grocery & Bakery | Sugar

Cane sugar production forecasts for 20-21' have been raised to record-high quantity. The challenge that the growers are going to face amid this surplus is that many manufacturers have taken coverage for the year, especially after getting stung by the high costs in 2020 due to the force majeure spawning from the lost sugar beet crop. This is going to leave many sellers scrambling near-term to get sales. 

Meat | Pork

Harvest levels are consistent with last week, winter storms and employee call ins have created issues for some plants as they attempt to maintain these kill levels. . 

Prices for spare ribs and loins are trading within a few cents of last week, butts are being to show signs of life up 2-3 cents this week. As demand ramps up from food service and export, prices could increase for the remainder of the month. 

Belly prices are steady to modestly higher this week, producers have less product to offer as manufactures are relying on fresh product for current production. The cold storage report indicated fewer bellies in the freezer, forcing the use of fresh. 

 

 

 

Meat | Beef

Production numbers continue to be large, plenty of cattle available, and demand for boxed beef seems to be great at retail and better than expected with foodservice. Retail features continue to lead the pack as people are willing to spend up on proteins when shopping due to extra money in the food budget each month. Most items are moving higher this week. Middles such as ribeyes, tenders, and loin cuts are all taking a step higher in response to interest levels and bookings. This could be attributed to more inside dining opening or prepping for opening over the next week or so. End cuts are stable to higher. Thin meats such as skirts along with foodservice cuts such as clod tenders are starting to moving higher. Briskets have shown strength over the past two weeks. Both from the foodservice and retail level the brisket price points have been a good value. Grinds continue to move higher, however, they have slowed to just small increases each week.

Poultry | Chicken

The poultry industry has remained strong on all fronts once again.  The industry has many challenges that are going on at this time, but continues to move forward.  The plant labor still brings challenges, increasing freight rates, high feed prices and now in some regions also dealing with weather challenges.  The weights did shift a little more in favor or heavier birds this week with heavier birds around 56% of total production.  The total number of birds being processed was just under 168 million head.  This is running around 3 million head below last years numbers, but a slight increase from the previous week.  The jumbo breast meat market has been staying strong due to retail demand as well as demand from further processors.  The medium market and the select breast markets have been in good balance and remained flat once again this week. The Jumbo wing market continues to remain tight even after the strong demand from Superbowl.  The feeling is that it will remain tight as we approach the March Madness College Basketball tournament.  Tenders have picked up some this week and some feel that they are seeing strong demand as an alternative to the high wing costs.  The dark meat continues to find strength with continued interest for exports.       

Breast and Tenders:

The Jumbo Breast Meat market strengthened due to retail and further processing demand and increased $.08/lb this week to $.1.39/lb.  The select  and medium markets remained unchanged and the select market remains at $2.23/lb and medium market is still trading at $1.68/lb.  Even with the weight shift to some heavier birds and additional supply the market increased.  Line run Breast Tenders found strength once  again and increased $.04/lb to $1.83/lb.      

Wings:

Wings continue to be in short supply and processors are not able to fill all of the demand that is out there for fresh orders.  There does not seem to be anything happening that is softening the demand even with record high prices.  The Jumbo whole wings and medium whole wings have both climbed to new record highs again of  $2.56/lb.  This is up $.01/lb from last weeks record high.  The small wings are also at a new record high of $2.65/lb which was a $.02/lb climb from the previous record.  March Maddness brings with it demand for wings and that is expected to be the case again this year even with the high costs.  While there has been some talk of some alternative items for wings it does not appear that any of them have been successful enough to bring the demand down.                 

Seafood | Finfish

Cod, Alaskan 1x:

Per Undercurrent News:  The US North Pacific Fishery Management Council ( NPFMC) has reduced the 2021 total allowable catch (TAC) for 2021 in for the Eastern Bering sea Pacific cod by 21% year over year to 111,380 MT.  This year , according to stock assessments there are fewer Pacific cod in the Eastern Bering Sea compared to previous years.  The 2021 TAC for the Gulf of Alaska was increased to 17,321   This will allow for a small directed fishery after no directed fishery was allowed in 2020 due to the small TAC of 3980 MT.  For  now Limson has supply through Lent.  

Cod, Atlantic 1x:

For Russian and Norwegian Cod Per Undercurrent News:  The International Council for exploration of the Sea (ICES)  has recommended that the cod catches in the Berents Seas are set at 885,600 MT in 2021. ICES advised the cod quota in the Berent's Sea for 2021 be set at a level 28% higher than the level that was advised last June for 2020 of 689, 672, MT .  Prices for headed and gutted cod are currently firming, but this looks to be short lived.  Finn Arne Egeness, a seafood analyst forecasts an 11% increase in global cod supply to 1.27 MMT for 2021.   In 2022 Egeness predicted output would drop 8% to 1.17MMT.  This likely increase in supply comes as prices have softened in 2020, due to the impact of the Coronavirus pandemic .  Prices are expected to drop in 2021 and return to pre-corona levels in 2022. Currently prices seem to be more supply driven than demand driven. Landing prices drive the market and changes in supply will impact retail price rather than changes in the market will impact landing prices.   It is also predicted with the increase in retail due to the pandemic would see fillet production overtake H&G in 2021, which is the first time this has happened.   Currently we expect the price level to remain stable for the balance of the year .  The 1x frozen Atl. cod loins from Canada are now being offered from the new 2020 season.  Costs have been confirmed to be close to the same as last season.  Canadian Cod is harvested in three general areas in northeast Canada that impact our supply.   2J 3KL (Northeast Coast).2020 total removals were recently announced at 12,350mt - same level as in 2019.  However only 10,000mt was caught  in 2019 which effectively means the fishermen have access to an additional 2,350mt in 2020.   3Ps (Southcoast). 2020 TAC was cut 55% from 2019.  Limson's processor left 1,350mt of Canadian* fish in the water last year so the effective cut is more like 30% for Canada.* the cod quota in this area is shared between Canada (84.4%) and France (15.6%).  4RS 3Pn (West Coast) 2020 TAC is 1,000mt - same level as 2019.  

Cod, Atlantic 2x:

Pricing has started to rise as raw material has become tight, causing production facilities to have to wait which has caused order delays. To further amplify this problem we have continued to see increased port congestion once orders arrive in the US causing an additional 2-6 week delay on getting product received. 

Cod, Pacific 2x:

Pricing has started to rise as raw material has become tight, causing production facilities to have to wait which has caused order delays. To further amplify this problem we have continued to see increased port congestion once orders arrive in the US causing an additional 2-6 week delay on getting product received. 

Pollock, Atlantic 1x:

Recent reports from the NFI whitefish seminar this fall stated that the B season was down 127.000 MT from 2019 due to Covid issues as they were trying to keep the virus our of vessels and plants.  Over the last 2-3 years the B season has had great fishing conditions.  For 2020 there was  a change in fishing patterns and a younger fish class was noted , yielding smaller fish of more variation in  size that resulted in a lower yield. The fleet has had to travel farther out to find the fish resulting in more days at sea  and they have not schooled up this season making them much harder to catch.  As a result production had decreased and they are behind overall.  As the season wrapped up at midnight Oct 31 there were fish left in the water.   Our supplier could not achieve all  of their catch quota and left over 6.Million LBS in the water as they struggled with poor fishing and smaller sizes.  However please note.... they do have Limson / GFS  covered for product thought Lent and well into the Alaskan A season for 2021.  In addition per Undercurrent News: The US North Pacific Fishery Management Council has set the 2021 (TAC) for Pollock in the Eastern Bering sea at 1.375 MMT and a decrease of 3.5% year over year.  In the Gulf of Alaska the TAC for Pollock was reduced to 113,227 MT and a decrease of 2.4% year over year.  

Pollock, Pacific 2x:

We have seen delays on pollock being shipped as raw material on the larges sizes has become tight which has caused pricing to rise by 10%-15% since early September. Raw material will most likely remain short until after CNY. Limsons inventory levels remain healthy. 

Haddock:

Have seen an increase in pricing and delay on orders as large quantities of haddock have been detained in bonded warehouses. Resulting in large scale varieties (8-10, 10-12, 12-16) being short. The next batch of larger raw material is not expected to arrive until after CNY. This has affected many different packers and their ability to ship product. Effective Dec 31st at midnight 10 seafood items including frozen Haddock are set to lose their exemptions to the 25% tariff charge by the USTR. This is a cost that inevitably that will need to be passed onto consumers. Pricing is expected to remain elevated until after Chinese New year pending on what happens with COVID-19 / demand during lent and when more raw material will become readily available for packers to process. 

Domestic Lake Fish:

The fall fishery has wrapped up on Lake Erie and most fishing will not start back up until the spring.  Walleye, yellow perch, and white perch  fishing will begin mid march.  Supply on yellow perch is limited and will continue to be limited especially on the Ohio sizes.  The quota will be announced at the end of March and is predicted to 20% reduction for yellow perch while the Walleye quota is expected to increase.  Smelt will continue to be short and fishing will begin again in April. Fishing for White fish will begin in June however we do not foresee issues on supply getting through to the new season. Blue gill out of China is currently the only option to domestic and Limson has supply on these as well to get our customers through Lent. 

Euro Lake Fish & Zander:

Limson is covered on all sizes at this time but there is less inventory available overseas on the smaller 20-40 zander. We expect prices to level off as we approach the Lenten season.  

Mahi Mahi:

The late 2020 / 2021 fall season of mahi is off to a very slow start.  While most fishing began in October the landings were minimal and what was processed has gone mainly to the fresh market.  Larger fish have been harder to come by and complete orders have been harder to fill as landings out of both Peru and Ecuador have been slow with reduced catches and landings.  Costs are elevated over 2019/20 and expect these levels to increase just to secure supply as the cost for the raw material is already on a rapid rise.  

Frozen Tuna, Swordfish :

Vietnam – We’re fully into the slow season combined with poor weather out of VN.  As a result here is very little raw material, making availability extremely low and prices high. The new season should start in January, so it will be 3-4 weeks until we see any relief . Also note that Chinese New Year affects Vietnamese output and that will be happening in February.  Indonesia –Prices and availability are steady, so most production is currently coming from Indo. Be aware that they will be giving their people a week off in December to compensate for the absence of proper Ramadan due to COVID disruption. SWORDFISH Asia – Being a bycatch of Tuna, Sword is the same story as Asian Tuna. Ecuador – Most of the boats retool for the Mahi, so production will be off until around March.

Swai:

Total pangasius exports are expected to be lower than 2019 by around 25%-30% due to COVID-19. Q2 was the hardest hit on global markets due to the nationwide lockdowns. China is the number one importer of Vietnamese swai followed by the US. China is a big drive of where the market levels sit as they accounted for 40-45% of the volume out of Vietnam. China resumed pangasius purchases after re-opening in late April.  Q3.2020, the U.S. and ASEAN showed recovery signs as export values increased by 47% and 19% respectively compared to previous quarter as these countries lifted the nationwide lockdown orders and stocked up for the holidays. Raw Material price has increased by 20-25% since late Q3 due to the surge of global demand while supply shrank slightly due to COVID-19. The price is expected to remain elevated through the end of the year. Raw material is expected to recover and become stable in early 2021.

Tilapia:

Generally prices have remained stable most of the year so far. However raw material pricing/cost was also stable up until about June. Since then pricing has increased competition for raw material. The reasons for this are due to high demand for many months at retail. Where they prefer 2-5 oz or 3-5 oz traditionally over the larger sizes. Larger sizes tending to be preferred by restaurants. Focus by some customers and plants on producing 4 oz and below due to the tariff exclusion.This means that plants are having to pay an ever-increasing premium to secure enough raw material from the farms to meet orders. Farmers do not make much profit on smaller sizes. So they prefer to wait until the fish grow bigger before harvest. Now packers and customers need the farmers to harvest sooner to get more smaller sizes. Farmers must be incentivized to do that. Packers are competing for the farm supply. At the same time that would of course mean there’s less available of the larger sizes if farmers are having to harvest sooner. Overall import volume reports from January through October saw a 25% increase over 2019. This was mainly driven by the retail demand for frozen seafood. Due to the overall demand in retail and slight pick up in food service you will see elevated pricing until demand Stabilizes. Growth is expected to return to pre pandemic levels in 2021.  

Seafood | Shrimp

India, Indonesia, and Vietnam have all struggled with the availability of workers and raw material on different sizes. Earlier this fall we saw some good pricing in the market as people are trying to move off old or excess inventory. Over the last month we have seen the larger impact as there is limited inventory availability which has caused increased pricing. Current shortages in the market are easy peel, cooked shrimp and smaller sizes on raw PD and PD tail-on as we have seen an uptick in retail and delayed shipments from overseas. Experts expect to see a drop in overall production output out of India by 30-35% for 2020. The freight market is currently short on the availability of empty containers. Out of India you have suppliers / packers that are all moving product from the west to the east as the East Coast has more availability on containers. This have created logistical issues as certain borders between states are closed within India. If we continue to see container delays you will see production facilities start to short down as they will have no where to go with the product. This will will further impact inventory availability around the world. 

 

 

Imported Black Tiger:

Production out of Indonesia has been slow and steady without any major shut downs. The packers are backed up with excessive orders(for over 6 months in most cases) and most buyers have experienced extensive shipment delays causing current shrimp shortages in the US. Indonesia will continue to struggle through late 2020 when their season starts in Dec. However, they are expected to continue shipping at a steady pace. Vietnam has been able to help take the pressure off some but is also starting to see raw material shortages on certain sizes. 

Imported White:

The 8 largest suppliers to the US have had split results in 2020. Ecuador, Indonesia, Argentina, and Vietnam all saw an increase over last year, while India, Thailand, Mexico, and China all saw a decrease compared to 2019. India has seen the largest decline but they still hold the largest market share in the US of about 36%. Currently, 2020 import numbers are about 7.5% ahead of last year which bags the question where is all of the product going. We continue to see the numbers of restaurant closure on the rise across the country. We have also seen other food service outlets reduce their purchases due to the lack of demand / business. While we are aware that retail has stepped up their purchase during the pandemic, it cannot entirely make up for the losses in foodservice. We have continued to see order delays due to raw material availability, worker availability and available containers. This has caused pricing to increase and is estimated to remain high until we head into the spring / summer harvest. On top of these issues we are seeing large delays on getting product received due to port and warehouse congestion. 

Latin White:

Prices have firmed due to limited supply with in the market. 

Domestic White & Brown:

October's landings out of the Gulf were released and were only 7.5 million pounds. These are the lowest for any October since recorded started being kept. The previous low was 10.4 millions pounds in October of 2018. The volume was 47.6% lower than the historical average of 14.3 million pounds. This brought the total for the year to 58 million pounds, which is far less than 2019's total of 69.2 million pounds for the same time period. The biggest impact has been Louisiana which has only landed 17.5 million pounds for the year, which is 632% below the prior 18 year average of 46 million pounds. This has put a lot of pressure on the domestic shrimp causing the pricing to continue to rise. Overall this puts the domestic shrimp at a disadvantage with farm raised imports. 

Domestic PUD:

At the moment peeled production is very light on all sizes, and no inventories seem to exist on 110/130 and smaller. As cold fronts continue to move down from the north the shrimp get smaller, we should see more production of 110/130-150/200 puds from late January into February. 

Domestic Rock & Pink:

At the moment there is no concentrated effort on rock, only small incidental catches of a few rock shrimp along with brown shrimp.   It takes a long time right now to accumulate enough rock raw material to process. Targeted Domestic rock production typically runs from Late July through December.  Mexican rock production in the southern gulf starts later in the year (typically November)  and runs through the following spring. At the moment there is really no existing inventory of shell on or P&D rock.  It will be late January before we see some availability.

Seafood | Lobster

Per Seafood News:  NOAA announced its proposed modifications to the Atlantic Large Whale Take Reduction Plan on December 30.NOAA said it is looking to “further reduce the impacts of entanglement in fishing gear on right whales in U.S. waters.” The modifications are focused on the Northeast Jonah crab and lobster trap/pot fisheries, which are responsible for roughly 93 percent of the buoy lines fished in areas where right whales appear. According to NOAA, the Atlantic Large Whale Take Reduction Team will be asked to recommend risk reduction measures for other Atlantic trap/pot and gillnet fisheries in 2021.

 

 

North Atlantic:

Due to the late start of the season and poor weather, the catch from the Nova Scotia season was limited. Fishing has wrapped up and most processors are limiting production until the spring season in May.  Demand for lobsters has increased with restaurant openings and the market is extremely tight and expected to remain firm until spring.  There is expected to be a limited supply on all sizes of tails and meat going forward, especially the CK Broken and CKL.  

Warm Water:

The market for prime size tails continues to exhibit some strength as of late. Market values at the season open fell to multi-year lows; reaching a point that seems to have created demand in the pandemic environment. Since then, the addition of tropical activity in some producing countries, and residual damage, have yielded a bit firmer market.  As of today Limson has supply on all sizes.   

Seafood | Crab

The Alaska Dept. of Fish and Game announced the 2020/2021 crab quotas .  Mostly the results confirmed industry expectations, although snow crab increases were lower than hoped.For red king crab, the precarious nature of the stock has led to a cut of 1.15 million lbs, which is 30% below the 3.8 million pounds quota set in 2019.The stock has been on a long term decline, and earlier management strategies would have completely closed the fishery.  However, in recent years ADF&G has revised some of the thresholds, so that a weak recruitment leads to lower harvest levels, but not a shut down of the entire fishery.With conservative management, the stock is neither overfished nor subject to overfishing. The allowable biological catch has declined from 6 million lbs in 2019 to 3.54 million lbs in 2020, with the TAC set well below this level at 2.648 million lbs.Russian catches of red king crab are stable, and the loss of 1.15 million pounds in Alaska quota should continue the trend of high king crab demand and pricing.For snow crab, the 2019 Alaska harvest was 34 million lbs., with a biomass projected at 368 million lbs.  Snow crab recruitment is very strong, and the projection biomass for 2020 was to grow to 610.2 million lbs, a 66% increase.However, due to the pandemic no crab trawl surveys were conducted this summer, so the TAC was set based on a continuation of trends identified in 2019. For this reason, ADF&G was more conservative increasing the TAC than the projected biomass might call for, with a 32% increase to 45 million lbs. in 2020.There will also be a small Bairdi or tanner crab fishery this year west of longitude 166 of 2.348 million lbs.  Again, there was no survey, but there has been considerable revisions to the Bairdi crab models in the last few years, and the current ABC matches that of 2017-18, when the fishery was last opened.The snow crab announcement is generally looked upon as an important market indicator for the coming year.This year, snow crab has been one of the top selling seafood products, so much so that unlike many fisheries which have seen lower values in the pandemic due to the cutback in foodservice demand, snow  crab is currently oversold, and back up to record price levels.

Snow Crab:

The Canadian snow crab currently is almost non existent on the market.  There are offers out of Norway or Russian and or deepwater snow crab which can be a suitable solution for the lack of Canadian product.   In general any supply that is found on the Canadian product is at elevated costs.  

King Crab:

As we move into fall we  find some of the most important  king  crab fisheries.  The Russian Far East, Barents Sea, and then the Alaska Red king crab seasons.  Russia will be harvesting over 26,000 M/t and supplying the Asia live market as well as the processed markets in Japan, Asia, and the U.S. With the closure or curtailment of most food service operations and on line ordering, seafood marketers this year have been challenged to find other ways to move the product.  Not many carryout restaurants serve king crab or snow crab so retail is the market of choice. The level of support at retail supermarkets and club stores for king crab and snow crab has been remarkable.  Product flew through the system and we found that 69,268,393 lbs of Canadian snow crab alone was imported during the three month period of May through July!  King crab volumes of course are much lower but also gained significant support from retail. For now costs on all sizes (Reds and Golds) have been firm and are expected to remain so through the holiday season.  Russian King Crab: The market for both red and golden Russian crab remains full steady; supplies are light for a moderate to active demand. Some still higher offers are noted. Inventories remain thin and higher priced replacement product is reported to be putting upward pricing on the market.

Red Swimming Crab:
Blue Swimming Crab:

Seafood | Scallops

Per Undercurrent News:  The price of scallops as of late have been skyrocketing in the US as frozen inventories have been depleted before the holidays and many are bidding on the same landings at the New Bedford Auction that accounts for at best half of the landings in the Northeast US.  First reports this spring during the heat of the pandemic and FS business crashing had the dock prices extremely low for key sizes as sales fell.  Harvesters responded by slowing their approach in the first few months leaving a shortage of landings.   As soon as retailers caught up the entire demand shifted.   Also contributing this year was the 17% reduction to the total allowable catch.  Based on what NMFS allowed,  harvesters were working with 46.6 million pounds in annual projected landings during the 20/21 season compared to the 19/20 seasons annual projected landings of 56.7 million pounds.   Next year's market might be even tighter as the NEFMC recommended another 23% reduction in the TAC limit for the 21/22 season 

Chinese Flounder and Ocean Perch:

China production plants are still running at reduced volume (70%) as there is still a lack of demand around the world because of the Covid-19 impact. Pricing will most likely remain soft into the fall until suppliers have placed orders for the Holidays / Lent. Once this happen we may face an upward pressure on pricing.

Seafood | Salmon

Imports of frozen Atlantic fillets increased when compared to the previous month 1.4 percent. In addition, on a YTD basis, imports are 25.3 percent higher. Imports from Chile increased 32.8 percent from the previous month and remains now 20.2 percent higher on a YTD basis. Imports from Norway decreased 38 percent compared to the previous month but continues to see a 20.8 percent increase on a YTD basis. We must mention that we assume this HS code includes frozen portions.

Norwegian Salmon:

The Norwegian Salmon industry has been operating during the pandemic, and although volume is down the pricing affected the large fish (6+ Kg) the most as this was for Asian markets. The food service industry has been heavily impacted as we know, but retail business picked up a lot of this volume and as such kept harvesting and production moving.   With a mild winter, less harvesting in  early spring we would think that we will see more volume pushed towards late summer and/or fall which normally will lead to pressure on prices, and more than the usual fall pressure. Prices are supposed to move up a bit based on FishPool, but we are not sure this will be the case as there is a large number of fish still in the water. Sea lice is becoming a bigger issue with warmer water and faster growth, so that could mean more small fish being harvested which again can affect future harvesting this fall.    But the biggest question remains  the exchange rate into the fall as the USD is getting weaker and weaker.  Note per Undercurrent News :  Norwegian salmon spot prices are likely to be volatile from week to week over the next month or so as harvest volumes are expected to rise year over year.  Many expect the harvest profile for 2021 to be similar to 2020 with little growth the first half of the year with more fish during the second half.  However supply growth next year is supposed to be negative for Chile during the second half of the year.  Smolt released for harvest during the latter part of 2021 is down 26% y o y with only two more months left in the release period.    Per Undercurrent News:  Norwegian growth is expected to pick up next year, expecting Norway's Atlantic Salmon production volumes to rise by 4.2% in 2021, exceeding a national production of 1.4 million MT.  As pf late spot prices for Norwegian farmed salmon climbed to their highest levels since the fall in week 52 of 2020 according to the NASDAQ Salmon index.  The index has prices rising by 7.7% week on week in NOK terms.  This is a 9.1% increase over the past four weeks in NOK terms. 

Chilean Salmon:

As supply has become more available  a massive drop in foodservice demand as the COVID-19 pandemic widens,  has prompted mass closings of bars and restaurants and caused US salmon prices to fall, not rise.  While US foodservice demand for salmon had diminished some, the picture is not all gloomy, as the retail sector has been booming and has taken up some of the slack.    Note however even with the issues being reported government officials do not feel that this will affect production in Chile as they have been monitoring this closely at the plant level for some time and this industry is considered to be essential.   Per Undercurrent News:  Chilean salmon production is expected to drop by nearly 10% in 2021, according to the results of the Global Outlook on Aquaculture Leadership survey (GOAL) while other countries beside the traditional giants , look set to play a more prominent roll in the sector's growth in the coming years. The data painted a bleak picture  for Chilean salmon production next year with volumes dropping by 9.4% to close to 650,000 MT in 2021.  This comes after 2020's  6.6% volume growth , contributed to a steep oversupply and resultant price fall.   2020 is actually still a strong year by volume for the Chileans so that leads to a pretty serious price correction for 2021.  Although production growth of 5.7% is then forecast for 2022, this would still mean that the country is not anticipating to return to 2020 production levels until 2023 at the earliest.  The frozen fillet and portion markets out of Chile have been stable this month. Pricing levels for both frozen fillets and portions are very far below the three-year averages. The market undertone is currently steady to full steady with higher offers noted. In the market to this point, many participants reported a greater desire to see the fish sell fresh rather than go into the frozen market, again we will see how this begins to change over the next several weeks.