Gordon Food Service Market Updates for May 25, 2018

Transcription

1 Gordon Food Service Market Updates for May 25, 2018 Dairy Cheese CME Block and Barrel markets have started to retract a from its recent push to the high side. Speculators see that milk production is up, cheese stocks are up and sales are steady. There is a traditional push to the upside through out the summer, which is being projected. But the weather will dictate how high the increase will be. Last week: Block-Down Barrel-Down This Week: Block-Up Barrel-Down Dairy Eggs

2 Traditionally May is the slowest month of the year for eggs. Egg movement is very slow and supply is plentiful nationally.retail demand fair. Supplies fully adequate. Market testing. Last week: Large - Down Medium - Down Small - Down This Week: Large - No Change Medium - No Change Small - No change Dairy Butter Butter production is still strong asinterest remains strong on both domestic and export markets. The current inventory is meeting needs andpricing is elevated. Expectation is for this slow rise to continue throughout the year. Last week: Butter - Up This Week: Butter - Up Grocery & Bakery Wheat Wheat futures prices have headed back up to the upper end of their 2018 trading range over concerns about dryness in both the southernand northern Great Plains.

3 Prices are higher enough to limit exports until we get a better fix on 2018 U.S. supply. Grocery & Bakery Soybean Oil Prices are trending higher as rising crude oil prices raise breakevens for vegetable oil going into biofuel. Grocery & Bakery Sugar The USDA adjusted 2017/18 sugar supplies up a little, very much in line with the current sideways price trend. Meat Beef Beef production has averaged 8% larger for the last three weeks, allowing retailers to load up for Memorial Day. Now that the holiday build is overhigh levels of production will likely require lower beef prices to keep boxed beef moving. Ground Beef: Prices have probably peaked and should trend lower as production stays high. Forward sales are made at discounted prices. Ribs: Strong holiday pulls have kept ribeyes, especially choice heavy ribeyes, tight. We should see production catch up with demand in the next few weeks. Retail features associated with forward sales commitments should be ending by mid-june, pushing more volume into spot markets. Prices may head lower once more volume is offered in late June. Briskets: Brisket prices are drifting lower as extra output looks for a home. Forward sales are

4 made at slight discounts to current prices. Rounds: As cattle slaughter continues at an elevated rate round prices are under a little pressure. Forward sales of Insides and flats are made at small discounts to spot prices. Strips: Both strips and short loins (t-bones) are moving well with some forward sales at steady prices. Prices could stay high for a few more weeks. Tenders: Tender prices keep bumping against the highs set earlier this year, and then back off. Last year prices peaked in mid-may; peaks came later in May/early June in the previous two years. Thin Meats: Ball tips and flank steak prices are inching lower as more supply becomes available. Outside skirts prices continue at high levels with aggressive buying of any price breaks. Meat Pork Pork output turned higher last week keeping pipelines full. The long Memorial Day weekend should abbreviate pork production in each of the next two weeks. Butts: Last weeks production surge put a lid on prices, but demand is still robust. Prices often top out this time of the year. Hams:

5 Prices have leveled out with some pickup in foreign buying. Prices are very cheap for this time of year, but lower output in the next few weeks may bring balance back with some lift to prices Bacon/Bellies: The latest Cold Storage report shows belly inventories are back up to 2015 & 2016 levels. Prices are trending higher as they normally do this time of year, but should not to go to the crazy-high levels of last year given the supply buffer provided by frozen inventory. Ribs: Prices strengthened prior Memorial Day,but should begin to level out after the initial inventory load is complete. Backrib and St. Louis sparerib prices often trend sideways for much of the summer grilling season. Loins: Pork loin prices a little stronger, but remain far below previous years summer-time prices. Competition from chicken and ground beef is weighing on prices. Poultry Chicken Fresh whole and cut-up chicken prices hit 10-year highs as buyers scramble to find product. Deli and food service features are driving strong pulls for rotisserie and cutup chicken. Breast and Tenders: Memorial Day is typically not a chicken holiday and this year is no exception. Jumbo breast meat prices are at 10-year lows for this time of year.medium and select breast prices are still relatively high, but demand is nothing special. Line run tenders have also fallen victim to the general oversupply of jumbo bird products, with prices adjusting lower. Wings: While jumbo wings prices have not hit 5-year lows, they are thinking about it.

6 Unsold product continues to move into the freezer. Small and medium wings are only a little better, with discounts noted. Dark Meat: Leg quarters continue to move into the freezer as supply exceeds demand.thigh and leg meat prices are steady so far. Poultry Turkey Whole turkey prices are inching up with suppliers asking premiums for forward sales. Bone-in breasts are readily available. Seafood Finfish Cod, Alaskan 1x: Alaskan A season opened in January but supply remains tight and costs have firmed, this is partly due to decreased quota in other regions of the world. Costs have remained elevated even after Lent and are expected to remain this way through the end of the year. Cod, Atlantic 1x: The 1x frozen cod loins have been firm but steady on cost.sales were strong for Lent as we await new season arrival in late May early June. 1x frozen fillets out of Russia have been steady but costs have increased this spring. A total allowable catch reduction out of the Barents Sea by as much as 13% has put considerable pressure on cod supply and cost world wide. In the end a lot will depend on how much the market and customer is willing to bear. Cod, Atlantic 2x: Fishing in Northern Europe has concluded. Total catch this season ispoor and raw material is in short supply for2018 until early 2019 when fishing resumes. Cod, Pacific 2x:

7 Heavy restrictions on total allowable catch in certain Alaskan fishing grounds. Raw material is now more expensive than Atlantic cod and expected to firm continuously for all of Pollock, Atlantic 1x: Expect cost to firm on the 1x frozen pollock as we start to move into the summer season. With cod costs rising and the overall lack of supply of that commodity, many are switching to the cheaper priced pollock. While pollock still is at a cost savings and a value this added pressure on supply has resulted in increased costs for this species as well. Pollock, Pacific 2x: Slight firming of pricing. Starting to see substitution demand from cod users. Haddock: Raw material prices firming due to the cheapest ground fish compared to Pacific and Atlantic cod. Continued substitutions from cod consumers driving up demand and cost. Available raw material is in short supply. Domestic Lake Fish: The Lake Erie Committee recently announced the quotas for the 2018 fishing season. Perch total allowable catches / quota is to remain relatively the same while the walleye quota has increased by approx 8 % lake wide. Supply currently is adequate and costs are leveling out as we enter new season availability and marketcorrection. Prices are expected to be more stable this season and lower than 2017 in generalwith no anticipated interruptionin supply. Euro Lake Fish & Zander: Supply is good and costs have declined after Lent on key sizes.this is a more cost effective substitute for the higher priced domestic lake fish items where applicable. Mahi Mahi:

8 The S American Mahi season began last fall and costs have softened compared to last season. Prices have adjusteddownward and should stabilize for most of the summer grilling season. Supply is plentiful. Frozen Tuna: Frozen tuna has been very steady on supply and cost out of Asia for all cuts and sizes. Expect this to continue to be stable for the next few months. Swai: Cost fingerlings increased after Chinese New Year instead when market expected a drop. US trade commission assesses preliminary higher duty rates in Swai. Prices firm with short supply until end of 2018/early Tilapia: Low production during this time of the year. Prices recently firmed. Seafood Shrimp Imported Black Tiger: Black Tiger shrimp prices are stable and supply is improving on smaller sizes. There are shortages of large sizes due to limited production (2-4 through 8-12). Imported White: White shrimp prices are at a great value due to their recent declines as we head into spring. Demand has been steady and is expected to increase into the warmer months. Raw material minimums are being implemented overseas to protect the market from going to an unstable level but demand will drive market prices. Latin White: Latin White shrimp are mostly stable in pricing however buying interest has been high on shrimp smaller than 41/50 HLSO which could lead to markets firming. Domestic White & Brown:

9 Domestic Brown shrimp continue to move upward due to limited availability and good demand. There is a lack of inventory to carry from last season to next, which puts pressure on prices to move up in an attempt to stretch inventory. Boats are currently working White shrimp and have had most landings in smaller sizes for peeling. Larger White headless reliefis in sight once landings increase. Domestic PUD: Domestic PUD shrimp prices have weakened to match new season production. Landings are good on mostly small sizes (90 count/lb and smaller). We will see landings of larger shrimp as the season progresses and shrimp grow. Domestic Rock & Pink: Rock & Pink shrimp are both in good supply. Pink shrimp, in particular, have had very good catch rates in the late winter months. Seafood Lobster North Atlantic: The lobster season began May 1st, and productis just startingto arrive to the states this week out of Canada. Costs are expected to soften as we get further intothe season andsupply rampsup. Note the spring seasonis typically heavier in the smaller sizedtails and meat where the bulk of the larger tails 6/7 and up are produced late fall. To date there continues to be heavy pulls to Asia on whole cooks and whole raw lobsters and no duty to import to the EU from Canada whichwill impact the availability of supply. Warm Water: Costs have softened some on the smaller sizes but supply remains adequate. Expect new season arrivals in late June early July. Seafood Crab Snow Crab:

10 The global shortage of snow crab will continue in To date reports indicatethat fishing in the gulf region has been slow and boats are returning to the docks only 1/4 to 1/2 full. Prices continue to rise daily and it does not look like there will be any relief in sight at least for the larger 8 up and 10 up sizes. It is reported that the Japanese are still present at the plants in both Newfoundland and the gulf and also are concerned with record high prices.for now, costs remain elevated and supply tight especially on the larger sizes.in addition there were reports of a right whale sightingthis weekaround the CapeBreton area. If this is validated it couldresult in additionalshut downs for fishing in that region. It is hard to predict this year if there will be any settlingdown or concessionson cost. Some feel there could be a correction on the smaller 5/8 but that is uncertainas well.note of product that has been harvested 60% are 5/8 and 35-30% are 8 ups with 10 up harvests being minimal. King Crab: King crab supply is very short to none of the USA production. Most at the moment is being imported from Russia. The live trade from Russia to China is impacting the Russian cost. For now costs remain elevated overall with supply adequate. Expect prices to increase for the summer on the smaller sized crab as supplies on these are reported to be tight. Seafood Scallops The scallop season has begun one month later in April for the 2018 season and boats have made a mad dash to get started. With the announcement of newly opened restricted areas and an overall increase in quota, we expect costs to lower and stabilize to more reasonable levels by late May into June.Todate costs have adjusted downward monthly