Beef A robust world economy and a weaker dollar is fueling export growth and keeping beef supplies tight. Prices are generally higher than last year.

Transcription

1 Feb. 16, 2018

2 Beef A robust world economy and a weaker dollar is fueling export growth and keeping beef supplies tight. Prices are generally higher than last year. Ground Beef: Large cow slaughter and beef imports are keeping ground beef supplies large. Prices have slipped and could remain low until we get closer to spring. Ribs: Retailers are promoting bone-in ribs, keeping supplies moving. Overall the trend is up into spring. Briskets: With St Patrick s Day four weeks out corned beef processors are finishing up the last of their buying which is supporting brisket prices. Prices often ease back a little by late February. Rounds: Prices are lower to keep product moving. Demand for flats will likely diminish as corned beef processing winds down. Big forward sales of insides suggest upcoming features which could firm prices. Strips: Prices are steady, but forward sales are being made at higher levels. This suggests market participants expect to see the usual seasonal price uptrend begin soon. Tenders: We are starting to see prices move higher. Now that we are within 60 days of Mother s Day steak cutters can begin to buy inventory that they can age and still hit shelf life requirements. Thin Meats: Prices for ball-tips, flanks and skirt meat are higher due to reduced supply. Steer and heifer slaughter is lowest in February with numbers often 10% lower than summer. Thin meat prices often start trending higher due to tight February supplies and then continue to rise as spring demand kicks in. Pork Much like beef pork exports continue to grow keeping domestic supply/demand in good balance. Pork prices overall have held close to last years levels. Butts: Butts continue to hold above last year due to steady foreign buying. Hams: Once buying for the upcoming Easter holiday wound down prices adjusted lower. We often see a choppy sideways price trend in the upcoming weeks. Bacon/Bellies: Prices peaked a couple of weeks back and then adjusted lower. We are now at prices which are below the 5-year average and should generate interest for future retail features. We could see steady prices over the next few weeks as a result.

3 Ribs: Rib prices are mostly flat as we enter Lent. The spread between St Louis and back rib prices is lower than last year as retailer increasingly feature St Louis ribs. Loins: Loins are facing stiff competition from chicken and ground beef features. Prices are flat.

4 Chicken Export growth for chicken has been slow making it less of a supply shock absorber than it has been for beef and pork. Now that we are seeing production up 2-3% on a weekly basis chicken supply is ample overall. Breast and Tenders: Breast meat demand is dull as we enter Lent. Chicken breast is slugging it out at retail with cheap ground beef and pork loins. Tenders are balanced but prices have stopped going up. Wings: Prices have dropped to the lowest levels of the year and deep discounts are still being shown. We will see if March Madness demand helps stabilize prices. Dark Meat: Leg quarter prices continue to inch higher as exports chug along. Thigh meat prices are well supported but cheaper breast meat may be shifting demand away from dark meat. Turkey With whole turkey prices at the lowest levels since 2010, retailers will be able to offer some of the best holiday turkey specials in memory. Retailers are buying aggressively and could run turkeys as an Easter loss leader. Prices could start to edge higher later this winter.. Bone-in breast purchases are a no-brainer with prices at 10-year lows.

5 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. Expect costs to remain elevated through Lent and beyond. Cod, Atlantic 1x: The 1x frozen cod loins have been firm but steady on cost as that fishery has started to rebound. Supply is adequate for Lent with no anticipated interruptions in supply. Cod, Atlantic 2x: Fishing is poor and prices are expected to firm continuously for all of Cod, Pacific 2x: Heavy Restrictions on total allowable catch in certain Alaskan fishing grounds. Raw material is more expensive than Atlantic cod and expected to firm continuously for all of Pollock, Atlantic 1x: Costs are stable at this time for Lent as preparation for Lent begins late summer. As the A Alaskan Pollock season has begun costs for new season supply are elevated. Pollock, Pacific 2x: Typical slight firming of pricing during this time of the year. Supply is not an issue Haddock: Raw material prices firming due to the cheapest groundfish compared to Pacific and Atlantic cod. Substitutions from consumers driving up demand and cost. Whitefish: Whitefish costs have firmed as of late as the fall fishery wrapped up in November. Perch & Walleye: Supply is adequate and costs have declined on a few items. New season begins in May and the hope is for a favorable exchange that impacts costs positively. Euro Lake Fish & Zander: Supply is good and costs have decreased this week in preparation for Lent. Euro lake perch and zander are good substitutes for the higher priced domestic lake fish. Grouper: Cost and supply has been stable for some time and is expected to remain so through Lent for product out of Asia. Mexican grouper is very short and costs firm almost weekly Fishermen choose to fish for octopus over grouper as it it a more lucrative product therefore product remains in short supply. Mahi Mahi: The S American mahi season began last fall and costs have softened compared to last season. Expect these prices to continue to trend downward and stabilize over the next few weeks. Supply is good. Seabass: Consistent supply and cost.

6 Snapper: Consistent supply and cost. Tuna: Frozen tuna has been very steady on supply and cost out of Vietnam for all cuts and sizes. Swai: Very short supply and high cost fingerlings. Prices are expected to remain at this level with short supply until end of Tilapia: Low production during this time of the year. Prices remain stable. Ocean Perch: The Canadian ocean perch remains steady for now on costs but expect this to firm later in Lent. Orange Roughy: Costs and supply are stable. Flounder & Sole: Argentinian Flounder is short to non existent at the moment. With the lack of domestic supply as well there is added stress on the supply. To date there is little to offer. Cape Haddie/Whiting: Haddie as adequate with limited demand. Costs are stable. Whiting out of Argentina for Lent is in great demand for foreign countries. Expect costs to take an increase if needed domestically at this time. Shellfish 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). Shrimp, Imported White: White shrimp markets are stable following their recent dip. Supply availability has slowed while buying interest has increased. Shrimp, Latin White: Latin White shrimp are stable in pricing and availability. Shrimp, Domestic White & Brown: Domestic White & 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. Shrimp, Domestic PUD: Domestic PUD shrimp are following the same trend as White & Brown Headless. Prices will continue to creep upwards until new production due to limited availability. Shrimp, Domestic Rock & Pink: Rock & Pink shrimp are both in good supply. This is a good year to use either species. Lobster Tails, Brazilian: Replacement cost of goods has increased as of late where the larger sizes are reported to be shorter on the market. Do not expect much relief on supply until the new season arrivals in July. Lobster Tails, North Atlantic: Tail prices have been firm as there has been a big draw for product in various forms to Asia. (whole cooks, whole raw etc) Product is short overall and expect costs to continue to increase at least until the new season in May.

7 Lobster Tails, South African: Stable with some slight softening on the smaller H and G tails. Crab, King: 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. Crab, Snow: The global shortage of snow crab is expected to continue in The anticipated available crab will be down as much as 10% from 2017 from recent reports. The Alaskan quota has already announced a smaller total allowable catch (TAC) as well. Canada will announce its TAC in the spring but the supply outlook is not expected to be much better overall. For now costs remain elevated and supply tight especially on the larger sizes 8 and 10 ups. Scallops: The scallop season is set to begin one month later this year in April. With increased quotas all expect this market to soften to a more reasonable levels come spring. For now costs reflect winter supply and that supply is adequate. Clams: Stable on cost and supply. Mussels: Stable on cost and supply. Oysters: The 2017 Hurricane season in the gulf has affected the production and the seeding of the oysters. The raw material is routinely traded out of the gulf and along the east coast but the volatile seas have resulted in fewer oysters overall. Expect cost to increase over time for the lack of adequate supply. Specialty Seafood Frog: Frogs continue to be short and costs have firmed quickly. FDA continues to detain frogs for testing of antibiotics etc and in turn has increased rejections. As a result many exporters from Asia now decline to export. That, and increased Asian domestic consumption have dramatically affected supply and cost. Gator: Costs have firmed lately for both farmed and wild gator. Many expect product to be short until the new season harvest in September.

8 Cheese The CME Block and Barrel Markets has become bearish once again after a run on the upside. Speculators feel this will continue in the coming weeks with runs towards the ceiling and a retraction back to the floor. Current supply and demand ratio has supply outweighing demand. Eggs We are projecting the market s downward trend is nearly over and should be steady until the buildup for Easter begins. Retail demand mixed. Supplies held with increasing confidence. Market attempting to test. Butter Production remains strong, inventories continue to grow and demand is picking up for the Spring Holidays. Long term as consumers continue to add butter to their diets, the expectations are for pricing to remain relatively calm for the short term but futures are showing higher prices. Pricing Trend Block Cheese Barrel Cheese Butter Large Eggs Medium Eggs Small Eggs Last Week Current Week Up Up Down Down Down No Change Up Up Down Down Down No Change

9 Wheat Concern over expanding drought conditions in the Southern Plains has pushed flour prices higher. Since the wheat crop is dormant and spring rains could quickly improve crop conditions, the current price rally may not be a lasting trend. Soybean Oil There is some uncertainty about 2018 biofuel demand and plenty of vegetable oil supply worldwide. Prices continue to ease lower. Sugar Cash sugar prices are firm with most beet processors are sold out for the current year. Mexico exports remained low into the US. High domestic sugar prices in Mexico have kept sugar from early cane harvest mostly in the country, although exports are expected to increase as the cane harvest gains momentum

10 Markon First Crop (MFC) Premium Romaine Lettuce weights are higher on average than the rest of the industry (38 to 41 pounds compared with 36 to 39 pounds). Last week s hot weather further pushed crops ahead of harvesting schedules and may bring about a premature end to the season. Some growers will make the short transition to Huron, California in mid-march before making the final move to Salinas in April. Expect higher potato prices through this month, as February is Potato Lover s month. Blackberries Prices have inched up slightly. Poor weather has reduced stocks in Mexico. Green Bell Peppers Florida prices have fallen; the crop is at its peak. The Mexican market is also low; supplies are ample (into Nogales, Arizona). Strawberries Prices are stabilizing. New crop Santa Maria, California supplies are increasing; weather in Oxnard is returning to normal temperatures. Florida volume is low due to rain. Mexican stocks (into South Texas) are ample, but demand is strong.