Market Updates for September 3, 2021
Dairy | Eggs
Small - No change
Retail demand mixed. Supplies of extra large and large well balanced and held confidently. Market steady to full steady.
Dairy | Butter
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
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 | Frying Oil
The harvest is upon us so early yield indications will also begin to weigh on the market. Futures prices have dipped and are offering an opportunity for those with budgets to take an extended position, assuming their targets are realistic. Challenges from Hurricane Ida will create some delays in the gulf port, but there should be enough time to recover before any new crop shipments make their way down to the port.
Grocery & Bakery | Sugar
The domestic market has tightened up as many industrial users have stepped into their positions. Prices were relatively stable compared to other grain commodities this year, but higher overall commodity costs are pulling prices higher. Rising transportation costs are also underpinning the sugar market, and next month concludes the last of the Mexican shipments into the U.S. The sugar beet harvest is close to beginning and early indications are for a similar size crop to last year. 2022 demand is projected to be stronger than 2021.
Meat | Pork
This week's harvest is forecast to be similar to last week at 2.45 million head.
Bone in butt prices are consistent with last week, with the possibility of slight declines after the the holiday. Boneless pork butt prices are increasing as labor constraints are limiting product availability. Boneless loin prices continue to decline as buying for the holiday has wrapped up.
Spare ribs prices are steady this week, with St Louis prices higher. Back ribs prices are stable. Low inventory in cold storage is also holding prices up as we head into the holiday.
Belly prices are lower again this week, prices will continue lower as demand declines with travel season coming to an end.
Meat | Beef
Harvest numbers are slightly higher than previous year's numbers as smaller cattle have dropped the production pounders per head slightly. Choice grading is starting to slip and currently running a bit below previous years’ percentage. Prime has continued to drop percentage-wise making it even more difficult to come by. Expect to see the choice/select spread to increase as we move closer to September. Logistical issues with both container ships and port warehouses have slowed the processing of imports and exports. Late August and into September should show good numbers of exports as ports and warehouses work on catching up on the backlog of orders.
The choice cutout has started to move higher, up $0.50 bouncing off the dip we had in mid-July. Demand is picking up again as prices became more realistic. Most middle meat items have started to trend higher as retail took interest and took positions in late July. Ribeyes are higher, expect to see these prices for the next few weeks with retailers booking for deep chill programs to support the holidays. Striploin and short loins have captured some retail attention and should keep support under these cuts through most of September. Briskets have been booked up by retail on forward bookings to help cover Labor Day ads with a cheap BBQ beef option, prices have shot back up. End cuts are steady to higher, holding well above historical prices for this time of year. Thin meats and labor-intensive items are steady to slightly higher across the category as labor is an issue across all beef packers and specialty cutters. Grinds have started moving already, retail has already stepped in on ground beef packages for the upcoming holiday.
Poultry | Chicken
The markets have remained fairly stable this week with the exception of Jumbo boneless breast meat. The was sought after and continue to climb up at a time when we are typically seeing flat to decreasing markets. The demand for breast meat continues to be driven by the fast food places all offering chicken sandwiches as well as seeing many casual foodservice restaurants offering their variations on chicken sandwiches. The production levels are also staying unchanged and the expectation is that they will remain at these levels. As we enter into the Holiday weekend you would typically see some discounting to make sure product is cleared, but that really was not being offered with the supply where it is at today. Last week there were 167.7 million head processed compared to 167.5 million the week before. We experienced a 50/50 split on the birds in the heavier and light weight ranges. This drop in the heavier birds reduced the total supply of product on the market as well. The Jumbo wing market has continued to hold at a record high and well cleared once again. The medium market did tend to come off a little this week and small wings remained flat. There just does not seem to be any signs that we are going to see much softening on wings with season. The tenders remained fairly flat at the record high levels they have been trading at.
The Jumbo Breast Meat market picked up some strength and increased from $2.08/lb up to $2.15/lb. The medium market remained flat at $2.16/lb and the select market also was flat at $2.88/lb. Line run Breast Tenders picked up $.01/lb to new record high $2.96/lb and the select tenders also picked up $.01/lb to end the week at $3.04/lb.
The wing markets remained flat for the most part. Jumbo wings remained at the record high of $3.22/lb. The medium whole wings slide down to $2.75/lb from $2.79/lb and small wings remained flat at $2.92/lb. There were a few offerings on some wings for future deliveries, but not at any discount to the current trading values.
Seafood | Imported Seafood - High Level Summary
Overall-all imported seafood categories are being heavily affected by shortages of shipping containers, warehouse delays, domestic trucking/driver shortages and processing plant delays due to Covid outbreaks in other countries around the world. Countries with outbreaks are using quarantine methods restricting workers to barracks and closing plants to help control the spread of the virus causing a collapse of production stability. Newest shutdowns are in Indonesia and Vietnam. In late August the largest port in China was closed due to a worker testing positive. This will have an eventual impact on imported cod, pollock, haddock and other fin fish from China processing plants.
2x Frozen products from Asia are short due to Covid restrictions in the supply chain. Expect price increases and supply disruptions.
Cod is extremely short for a number of reasons.
1. The main cold storage in China is still barely open due to Covid restrictions. One packer reported they have over 30 containers of raw materials there that they can’t even access!
2. The freight changes every day on shipping.
3. Raw materials are short due to vessels not being allowed into port in China.
4. Bookings on containers are being bumped off vessels every day by other high ticket items buying away the container.
North Atlantic 1x product from Russian fishing vessels is working to regain availability with raw material arriving into the US hampered only by shipping and port delays. We have seen prices on the rise. This is mostly due to limited production workers, container shortages, and clogs at the ports into the USA.
The current catch is yielding extremely small fish. The finished fillet sizes are below the typical 2-4 ounce size. IQF will be the primary production since it is less labor intensive than the 1x Shatterpack. Labor challenges due to Covid continue to effect Alaska. The current catch has only been 20% of the previous years. Look to the GFS IQF items as options for customers using shatter pack. IQF is tight but available.
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 last year. Raw material will remain short due to Covid port and production issues.
Supply challenges with limited availability. The 10-12z size is not available at all at this time. Reaching out to source locally but none to be found in 10-12z. Working on 6 months coverage.
Yellow Lake Perch: Michigan Sizes are available, but costs are crazy. Ohio sizes pretty non existent. Michigan Splits very small amounts available but Butterfly most abundant in Perch category. Overall category is still short.
Walleye: 8-10z are short with more expected. The fish when water is warm move deeper into areas that commercial boats are not allowed to fish. Customers who are flexible on the size will have ample availability.
Struggle to source with most of the supply coming from Poland and Kazakhstan which are dealing with Covid restrictions and overfishing issues. Limson is working with other suppliers to source more. Sizes 20-40 and 40-60 are still a challenge.
Similar to tuna, Mahi is extremely short and the US GFS sales is double the typical forecast. Costs are elevated over 2019/20 and expect these levels to increase just to secure supply as the cost for the raw material has risen sharply. We are trying to supplement - but we are very picky with quality. Usage increased significantly this year. Mahi-pre booked import orders are delayed due to lack of containers, shipping and ports causing shortages. Limson has 3-4 more containers coming. Costs rising.
Really hard to come by with poor fishing in Vietnam at about 40% of last years catch at this time. Situation is getting worse, not better. This item is an example of the container delays, decreased fishing boats, & decreased production workers that we have been seeing from many overseas commodities due to the pandemic. The US supply chain has attempted to start back up to full speed, while other countries are still feeling the impact much more than we are. We will see impact from the pandemic until at least 2022 from what our partners are telling us. For this particular commodity, our partners at Sea-Delight gave us the below breakdown:
The countries catching and producing Tuna are all second and third world countries which are very slow in getting access to vaccinations. Because of that, they are still in full COVID mode, meaning:
When the boats come back from fishing, the fishermen have to quarantine for 2 weeks, meaning: Few fishermen want to go out at all because of the added danger of Covid and having to quarantine. Very few workers want to come in to work to process the fish that is brought in due to danger of Covid.
With no raw material being caught, processing plants being idled our suppliers are not able to take or confirm the orders we place with them for set shipping dates. They are also not able to confirm or guarantee pricing.
Vietnam is experiencing it highest outbreak of Covid with the Delta varient so far. The government has closed manufacturing, ports and locked down cities to control the virus. This is having a major impact on supply and will also push prices to higher levels. Demand continues to stay at all time highs and many suppliers do not have product causing customers to look for inventory. Do not be afraid to price accordingly. Limson has booked inventory coming in and targeting to receive more from other importers in the US to fill in to meet the high demand. Swai-booked out ahead is taking longer to get to the US due to Vietnam's issues. Note, Swai is USDA inspected which is causing a delay of 3-5 weeks with the backlog and slow down with Government inspections.
Tilapia frozen fillets are also going up in price to market due to logistical issues, freight, costs, tariffs and a strong U.S. demand.
Seafood | Shrimp
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 SHRIMP: Usage is at record levels. Continued shortages but India is starting to rebound after their struggles with Covid shutting down their country. Limson is looking at other countries (Indonesia, Vietnam and Ecuador) for supplementing but each country has issues with Covid restrictions. Container delays continue providing a lot of challenges. Pricing continues to rise weekly as demand shows no sign of slowing. Larger sizes 8-12 nonexistent. Limson is sourcing product from other importers to supplement into GFS DC's. Please be aware you will witness other brands in the GFS item slots.
Prices have firmed due to limited supply with in the market.
We are seeing some supply of Gulf product being available, mostly with 26/30 and smaller. This is due to unsettled users in the Gulf states. Larger white production for headless has stalled with supplies available but limited. Expect pricing to stay stable while demand stays consistent.
For right now these pack outs will be hit and miss. Producers are reporting higher pricing, as the demand is higher and product is getting bid up at the docks.
Rock-No production, no boats targeting, no existing inventory. We may see a couple of small pack outs from the incidental catch in the spring, but the real season starts in July. Last year was poor for rock; hopefully this year will be the opposite. We encourage the use of 70/90 PINK P&D 10/5 Key Treasure as a good alternative. Very good eating, cheaper, more consistent supply. Key West Pink HDLS: production just ok, and prices sky-high: (.75-1.50 over gulf browns).*
Seafood | Lobster
North Atlantic inventories continue to improve and we have inventory of all the typical sizes. Hurricane Henri did limit some fishing last week but the boats are back out. Prices remain at all time highs for tails and meat. Tails 3-4z and 4-5z are plentiful and available. We are receiving more inventories of 5-6z sizes and there is some trickling in the large 6-7z, and 8-10z but these remain limited. Lobster meats are available but the high cost has stabilized demand. Expect pricing to stay elevated and there still remains the potential for shortages later in the year.
Limson has a significant amount of warm water Lobster on-order but arrivals are slow. Product arriving from Brazil. There is inventory available but there may be small gaps in supply by size as the containers arrive with new harvest.
Starting to arrive with small gaps in supply based on shipping delays.
Seafood | Crab
Pricing remains extremely high for SNOW CRAB: Supply is matching demand is rated moderate in comparison to prior years. There is availability of 5/8, 8-ups and a few suppliers have 10-ups at higher pricing. Limson is currently stocked with 5/8, 8 ups and 10 ups.
US crab sales in 2021 continue on a year over year growth of over 60%. For now the product remains very short and costs are firm. 20-24's are difficult to find, larger sizes and available and we have some supply.
Seafood | Scallops
Supply of all-natural U10s has been constrained since last season and continues to demand record high premiums week after week. Landings of these larger sizes are being harvested, however, the volumes are not yet adequate enough to allow prices to soften. Sea Scallops-20% fewer landings. A decrease in overall supply mainly 20-30 sizes. Overall scallop supply is low, and pricing is high behind the reduced quota, according to analysts. U-10 scallops are very tight.
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.
Limson has secured inventory from other importers to fill in due to higher sales. Demand continues to be very strong. Good Supply in the market right now. Squid-Booked ahead for next year hopefully will arrive on time. Many suppliers are out of stock and with the higher cost of shipping from overseas expect to see prices climb.
Seafood | Salmon
Limson and our Norwegian / Chilian suppliers have secured supplies of raw material to meet our needs into 2022. There may be some supply gaps due to shipping containers but the raw material is secured. This along with the elevated cost of feed and freight have the pricing up to a new 5 year average high. US salmon sales have exceeded usage well above pre-pandemic levels in the early part of 2021. Note; Worker shortages are due to migrant workers not being allowed into EU production countries due to Covid restrictions.
Prices are up but supply is available!
Pricing is higher that 2020 but available.
Short in supply!