REPORT FARMER S. market trends

Transcription

1 FARMER S REPORT market trends This notice is subject to change. Information printed is based on last received market data. Subject to change without notification US Foods. All rights reserved.

2 BEEF Live cattle traded at $146, up $1.00. Supply and demand are finding a better balance as product availability improves. Slaughter continues to be ramped up and should continue up for the near future. Rounds Insides: Supply appears to be out-pacing demand which could lead to some slight downturn starting to show up in the market in the next few weeks. Flats: Supply appears to be out-pacing demand which could lead to some slight downturn starting to show up in the market in the next few weeks. LOINS Strips: Choice strips are called steady to higher as we move towards the grilling season with retail Memorial Day ads. This pattern will likely continue through May. Top Butts: Week over week the choice market is holding fairly steady - up slightly one week and down slightly the next. We don`t see that changing in the near term. Ball Tips: As we see production levels increase, we are seeing a moderate decline. This trend should continue at least for the short term. Tenderloins: All grades of tenderloins have seen some sporadic price fluctuations, up one week and down the next. Prices are up this week but we do expect all grades to have some overall downside for the longer haul. ribs RibEyes: Rib meat is still seeing some moderate strength as we move into peak grilling season and holiday demand. This trend of more upside than down should continue through May. Chucks Chuck Rolls: The market is starting to show signs of weakness typical for this time of year and should continue this trend for the next several weeks or longer. thin meats & grinds Flap Meat: The market is called steady to slight downside as production levels start to increase. Briskets: Briskets are at all time highs, but are in better supply. We are starting to see signs of downside in the next week or two. Grinds: Grinds are showing up as seasonal demand is starting and will accelerate as we move further into May. Skirt Meat: Outside skirts are starting to show early signs of downside as the production levels start to increase. 2

3 pork Base hog prices traded steady to slightly higher across major markets as packers have adequate supplies for this week and have turned their eye on needs for next week. Currently, weekly slaughter estimates are holding steady at the 2.0 million head level. While this is 3.5% lower than year ago levels, it is higher than expected and has added more pork to the market. As we move into peak demand season, packers remain concerned about the supply of hogs during the summer and fall timeframe. Hog weights have finally started trending lower as warmer temperatures negatively impact weight gain. Hog weights are expected to continue moving lower, but remain above year ago levels. Producers are feeding animals longer to compensate for disruptions in their supply pipeline due to the PED virus. Overall, pork prices traded lower last week on continued weak demand and unanticipated higher supplies. Bellies, hams, ribs and the loin complex moved lower due to increased supplies, while pork butts moved higher supported by improved retail demand for Memorial Day promotions. Pork prices are expected to firm up and begin moving higher through Memorial Day. Loins The markets for bone in and boneless loins traded steady to slightly lower last week on weaker than expected retail demand and additional supplies. Both bone-in loins and boneless loin prices are expected to trade steady to slightly lower in early May, then begin moving higher as product demand is expected to increase due to retail features for Memorial Day promotions (as a low cost alternative to beef). tenders Pork tenders continued higher last week on stronger retail demand. Prices are expected to gradually move higher during May supported by retail features for Memorial Day and early June. Butts Prices for bone in and boneless pork butts traded higher last week but have moved lower on early week trades as packers find themselves with additional product. Prices are expected to hold steady then move higher through late May/early June. Ribs Spare RibS: Spare Rib and Back Rib prices held steady to lower last week but started the week on a higher note. Both back rib and spare rib prices are expected to gradually trend higher as demand improves and buyers add to their summer needs. Warmer temperatures are expected to support higher prices. Lighter Spareribs, St. Louis ribs and Back ribs, are expected to remain in limited supply through late June due to heavier hog weights. Bellies/Bacon Bacon/Belly prices continued lower on weak processor demand and unexpected supplies of fresh bellies on the market. Belly prices are expected to trade steady to slightly lower through this week then begin gradually moving higher during May as processors add to their freezer positions and retailers add promotional features later in the month. Prices are expected to continue trending higher through mid June. Supply constraints may create increased volatility and support higher prices. Hams Ham prices continued lower last week on weaker demand, but started trending higher this week on rumors of improved exports to Mexico. Ham prices are expected to trade steady to slightly higher through May. Increased export demand is expected to support higher prices. Trim The following market dynamics will impact finished goods pricing during June. Pork trimmings continue trending higher, reaching record levels due to increased product demand from processors. Heavier hog weights will pressure fat trim markets while limited availability of sows will support higher prices for lean pork trim. Trimmings prices are expected to trend higher through Q2. Picnics Pork Picnics continued lower last week with additional declines early this week. Processors began utilizing frozen inventories which left fresh product on the market. Picnics are expected to trade steady to lower through May then hold steady in early June. Demand for exports and unanticipated supply constraints could support higher prices. 3

4 turkey Boneless SKInless BreastS The fresh boneless Tom turkey market increased once again this week, though the frozen market was flat. Both markets are setting Urner Barry all-time-high record prices. Market analysts insist that this market has hit its price ceiling. However, speaking to representatives in the industry, we find that supplies remain extremely tight on all white meat offering, not just the breast. The industry feels that the market has not topped out as yet, and they don t quite know where or when the ceiling will be reached. I mention the fresh market highs as it has already affected our further processed frozen turkey products and will continue to do so. poultry The poultry market remained fairly quiet all week. The anticipated increase in demand due to the grilling season has not begun. Mother Nature has kept over 60 percent of the country in unseasonably cold weather. The retail segment is trying to promote chicken, as it continues to offer the best value over the other proteins. However, sales remain in a post-holiday lull. Egg sets were up between 1 and 2 percent. The major driver for the increase is that breeders are finally able to add young hens to the breeder stock, culling out the older, less productive ones. It takes 17 to 18 weeks for a hen to mature into a productive egg laying bird. Normally the industry keeps these birds in the hatchery until the age of 57 weeks. After the hens reach that advanced age, their egg production drops dramatically. Due to the unusually cold winter season and the propane shortage, the breeders were not able to replace the older hens due to the cold stressed young pullets. These non-productive stressed pullets forced the breeders to keep hens as old as 72 weeks, thus egg production was down. This situation is finally cycling out. A similar situation that created chicken supply issues was with bird weights. During the cold winter and the propane availability situation, the broilers while growing used their food energy to stay warm and survive. This hindered the mature broilers from reaching their optimum weight for processing, thus the supply of meat has been limited. These birds have also been cycled out of the system, allowing the jumbo birds to reach their proper processing weights. Due to the two situations described above, the supply on most poultry products has pulled even with the demand, thus keeping the markets in a very steady trend. As for the storms last week, the tornadoes hit the poultry industry very hard. According to the Urner Barry, the storms destroyed approximately 75 poultry houses, including 4 breeder houses. Though the reported damage pales in comparison to the April 2011 storms that destroyed hundreds of poultry houses, it does come after a winter that has already left the industry with a seasonally low number of birds. While we do not know how much these lost houses will hurt the industry, we are certain it will have some level of negative impact in the coming months. Chicken Tenderloins The chicken tender market also maintained a steady sideways trend. The availability of tenderloins is still very tight. The post holiday lull in the retail segment has kept this market in check. However, look for this market to climb in the next couple of weeks as demand picks up. Boneless SKInless BreastS The boneless breast market remained in a sideways trend. As mentioned above, the improved weights of the jumbo broilers have increased the supply of boneless breasts. The retail segment is featuring this item for $1.99 per pound throughout the country, and when the grilling season finally arrives, the market should start an upward swing in prices. The market is expected to peak sometime in June. Wings The wing market continued to drop slightly this week. The demand for wings seems to be diminishing in some parts of the country. This trend may continue until the QSR segment realizes the relative value of this offering verses the chicken tender and breast. Market should gain momentum as we head into the summer months. Boneless Skinless Thighs The boneless breast markets remain flat to consistent with most of the rest of the poultry offerings. The increased supply has caught up with demand. Retailers are starting to promote this product for Mother s Day, making boneless thighs the most affordable meat protein on the market. As the weather warms, this market will heat up as well. commodity grocery Oil Markets shifted downward this week. Part of the move lower was based on the market s opinion of imports. Imports are now being seen as the solution to the balance sheet issues of the old crop. Recent purchases are helping supply in the short term. In addition to this short term supply solution, there was a lack of data and news this week. 4

5 dairy Butter The butter market continues to rise. Butter production in March came in 9% below expectations which is fueling more concerns regarding tight inventories. Expectations for April and May production levels are lower than forecast. Shell Eggs Egg markets are up slightly this week. Historically, May is the low point for the year, but we may have already hit bottom. Supplies are considered well-balanced. Cheese Even with some recent weakness in the market, prices continue to be higher than year ago levels. Block and barrel markets are up over 20% vs last year. Lower than expected year over year milk production in certain regions, is keeping the cheese prices within the current range. Prices will continue to trade within this range through Q2. Milk May dairy pricing is up from April and continuing to see pressures from the market. Markets are continuing to experience unprecedented high prices due to increased demand internationally and seasonally. Forecasts are predicting some relief in the next few months, but overall prices are predicted to stay flat for the near future. seafood Shrimp, Domestic (Whites and Browns) The Domestic brown and white shell on shrimp complex was relatively quiet this week. Domestic shrimp brown or white has rapidly dwindling supplies and very little prospect of meaningful replacement in the near term. The Domestic P&D market was also quiet. The exception to this trend is the larger sizes of U 10 and 12 browns and whites these seem to be slightly weakening due to dull demand The Domestic PUD Market was mostly quiet with some weakening on sizes smaller than 131/150 ct. This continued weakening is in anticipation of the opening of the Gulf season with smallest sizes being caught first processors are clearing out any product that may still remain before the season starts. However, the opening has been delayed due to colder weather. Louisiana has delayed their opening a week to 10 days causing some concern that the smallest sizes will not be caught as a result. Shrimp, Latin Central AmerICa (Whites) HLSO white Latin shrimp complex continues to show weakness across the board. Supplies are more than adequate for a very dull demand. Importers are reluctant to buy replacement product based on current demand, which in turn is starting to bring the replacement market down. 31/35-41/50 Latin white shrimp are currently the better buy than same size Asian shrimp. Shrimp, Imported (Black Tiger and Whites) The HLSO Asian Tiger market weakened this week on very large sizes (6/8 and larger) and those sizes that compete with Asian white shrimp (16/20-26/30). It will be July/ August before any large volume of tigers is harvested. The HLSO Asian White market continues to weaken especially sizes 21/25 and 26/30 sizes. The value added Asian White & Tiger shrimp complex for cooked shrimp was quiet this week. The Asian White P&D tail on and off complexes saw weakening across the board. Importers are anticipating offerings from overseas will be lower with the seasonal increase in supply come May. CatFIsh, Domestic & Imported DOMESTIC: Some suppliers raised pricing again this week based on tight supplies and no relief until late June. This will more than likely have the rest of the suppliers following with raising their pricing but that is yet to be seen. IMPORTED: The market rose again this week based on little to no new product coming from China and dwindling inventories in the US. Next harvest will be late Summer/early Fall and that will be limited based on the amount of fish in the water at this time. Less fish were placed in the ponds by the Chinese in anticipation of the US Farm Bill passing and effectively banning Chinese catfish from being imported into the US. 5

6 seafood (Cont d) Scallops SEA: The market continues to adjust downward slowly as the scallop boats are starting to bring good volume to the auction. Prices are still at historical highs and based on 2014 quota limits prices will remain high throughout 2014, especially on U10 based on allowable areas for fishing. BAY: The market was quiet this week. Tilapia The tilapia market saw pricing adjust upward on 7/9 fillets as they remain very tight in the market place and harvesting on this size will not be until August/September. Many of the Chinese harvesters are looking to expand their domestic business versus export. The Chinese Aquatic Product Marketing Assoc. has released a review of China tilapia markets in 2014 showing a shift away from the US market. As seafood becomes more and more affordable with in China, this will continue to have an adverse impact on pricing to the US and the rest of the world. We will not see increased harvest in China until July which means that product will not be to the US until late August. Salmon Chilean Farmed Salmon: Frozen portion prices rose this week as supplies remain light for a moderate to active demand. The fresh fillet market continues to trend higher on all fillet sizes except 1-2# size. Supplies are barely adequate for a moderate to active demand. Mahi Mahi The market rose again this week on all sizes of portions. Currently, portions and fillets are running 20-25% higher than the same time LY. Mahi demand in the US has increased again after the item was priced out of the market at the end of 2011/ early 2012 when prices hit record levels due to poor fishing. For the last 2 seasons, imports have returned to more normal volumes and the market has adjusted accordingly. As a well priced item, Mahi is once again an attractive menu item and demand as increased. With imports balanced better against demand particularly on portions the price has ticked up. This price increase to more traditional levels should bring some stabilization to the market. Whitefish Complex (Cod, Pollock, Haddock) Cod: The cod markets both Pacific and Atlantic were quiet this week. Pollock: The market remains stable on both domestic and imported pollock fillets. Haddock: The market was steady this week. King Crab The market for red and golden crab saw weakening across the board this week. The market place is unsettled, with demand dull and supplies more than adequate. Tuna, Yellowfin (CO treated) Pricing for tuna is starting to firm up as supply has started to decline, especially out of the prime fishing area of Indonesia. While we won t see the kind of run up in pricing we saw several years ago, we can anticipate seeing higher prices than Although there may still be production out of Vietnam, we should expect them to increase their pricing as there is less and less being exported out of Indonesia. As for Philippines, we won t see much from this country either as they fish mostly in Indonesia waters. As for Saku, strips and center cut loins, they are still reasonably priced but these items will also become tight as fishing, or the lack thereof, starts to hit these varieties as well. Crabmeat (Blue & Red, Pasteurized) The market took a major upward adjustment this week on all forms of canned crab meat. The supply is very short on Blue Swimming crab and Red is starting to show signs of tightness as customers flip to red from blue when they cannot get the proper product form in blue. The tight supply will continue through the Summer as demand increases and replacement will not be able to keep up with demand. Snow Crab Canada & Alaska: Canada The Japanese stepped in last week and some retailers took small positions to cover Memorial Day promotions. The result is that the market has somewhat stabilized for the near term. Alaska The market weakened slightly in response to the prices now coming out of Canada on 8+. The majority of 8+ out of Canada right now is still 2013 production that suppliers are eager to move off. LOBster TAIls Warm & Cold water: The market was quiet this week on all sizes of warm and cold water tails. AmerICan Tails: The market continues very firm with a tight supply situation. The Canada Season has opened but is still very much hampered by ice in the Gulf and areas of Newfoundland. Oysters The Gulf has been picked clean and will officially close the end of May reopening in October. Galveston Bay has been closed for red tide for the last 6-8 weeks and will officially close the end of April. If/When the red tide clears, those with leases within Galveston Bay can harvest again- but that will be a limited supply. Fresh Oysters will be tight throughout the Summer as a result. 6

7 produce vegetables potatoes Russets: Idaho Russets have gotten slightly stronger over the past two weeks. Quality shipping out of Idaho has been challenging with reports of pressure bruise and internal black. Early crop russet potatoes are up and growing and growers are expected to finish planting their standard russet Burbank crop this week. Regional russets are seeing overall steady business, however there is a bit more demand for the largersized russets. New crop russets are being planted across the country at this time. Reds: Red potatoes continue to see strong demand which is using the majority of the available supplies. The current size profile is on the larger A size, which is keeping the B size market stronger. North Dakota is expected to finish supplies this month. Supplies from Hastings Florida and Texas area will not be available until next week. Despite a late start planting, growers in the south east are anticipating a mid to late June start date. Minnesota and Wisconsin have fallen behind planting due to the cold we weather. White, Yellow and Fingerling: Available white supply is becoming very limited. Quality round whites are driving a premium price. We anticipate a strong round white market as we transition through the remainder of the storage crop and into new crop Florida. Florida is expected to have a smaller size profile. Quality and supply for the yellows coming out of Colorado has been very good. Market has been stable with no signs of changing in the upcoming weeks. leaf lettuce Romaine supplies are good with steady demand. There are some light fringe burn reported, but overall quality is good out of Salinas and Santa Maria. Green leaf and Butter supplies will be very short this week, but Red leaf supply will remain normal. Green and Red leaf are 24-25lbs per case with head at long. GarlIC Garlic demand continues to be steady. California supplies are being reported as light and Chinese supplies seem to be steady. There is some older products available at a low price so be aware of possible quality issues. Suppliers are not looking to take on any additional business at this time and prices are expected to go up. CABBage Cabbage markets remain strong due to supply issues. Florida is finished and Georgia has started with moderate supply. Quality is good on all varieties. Iceberg Lettuce This market is expected to be steady with light supplies available this week in Salinas. Quality is starting to show some internal decay due to rain and heats from a few weeks ago. Carton weights are being reported at lbs. Onions The onion market has softened over the past two weeks with the start of Texas and California s new crop seasons. Pricing is expected to stay at this level. Quality has been fair to good. New crop onions will begin shipping from New Mexico and Northern California at the beginning of June. Growers in Georgia have begun the Vidalia sweet onion shipping season and will be pushing hard over the next couple of months. ChilE Peppers The Chile market is steady with good supply and quality available out of Mexico. Look for some local Chili peppers available in Coachella, CA this week. Squash Squash supplies are extremely tight this week with growers selling out daily. This market is very active and quality varies between growers with prices reflecting the quality. The main quality concerns are scarring from the high winds and rain. In the west, the markets are tight as supplies from Nogales are transitioning to Coachella. 7

8 produce Green Beans Green Beans market is strong with limited supply coming out of Florida. Coachella production is finishing up and Fresno should start by mid May. Quality remains good in all regions. Tomatoes Rounds: The Florida rounds are flourishing. The new fields have been yielding strong healthy fruit and should continue for the next ten days. Demand has been strong but pricing is still low due to the heavy volume. Next week is expected to be more of the same in terms of pricing and availability. Many Mexican shippers are winding down production for the season on round tomatoes. Demand for Mexican fruit is waning as Florida s market is gaining popularity. One can expect that Mexican rounds will be done very quickly and quality will be suspect for the rest of their run. Cherry and Grape: Grape and cherry tomatoes are remaining relatively flat this week in Florida. The Palmetto-Ruskin crop has proven to produce steady volume of both items and demand has been quite strong with Mexico slowing down. The quality has remained unaffected by the recent rain storms. The supply of cherry and grape tomatoes in Mexico has been hit or miss. In general, cherry tomatoes have become almost exclusively a Florida operation as the quality and availably out of Mexico are too sporadic. Grapes out of Nogales are winding down quickly. San Diego as started their season. Sizing for these first pickings has been large, however that is expected to fall back into place as the plant comes into a more normal harvest. Romas: The Florida Roma s are still and afterthought in Florida when it comes to tomatoes. Mexico still has an overabundance of quality fruit Romas and Florida will start to slowly wind down as the spring weather continues and summer comes around the corner. Market conditions in Mexico are expected to remain the same; abundant supply and minimum pricing. Cucumbers Supplies out of Florida and Mexico remain moderate this week. Quality varies from grower to grower due to last week s rain. Prices will reflect on quality so be wary of any deals that seem too good to be true. 8 Eggplant Eggplant market is stable with steady supplies being harvested in Florida. Quality is being reported as only fair at best due to wind scarring. Bell Peppers Green Bell peppers quality and supply are starting to improve out in Central Florida. Large size peppers remain tight with high prices to reflect. This market is steady but is expect to get stronger by the end of the week. Western supplies out of Coachella & Thermal are steady with steady to strong market. Quality is nice with dark green color. The Red Bell market is higher and some growers are experiencing a minor gap in supply. Carrots Jumbo Carrots supply continues to be steady due to good growing conditions in Bakersfield. Markets are steady and quality is good. Celery Celery market is steady with moderate demand. Supplies are steady with seeders* still evident in the Oxnard fields. Quality is good with good green color. *Seeder occurs when the middle of the plant grows faster than the outside causing fewer stalks to grow per plant. Green Onions Growing conditions continue to be excellent and supplies are steady. Expect this market to remain steady with no changes in demand. CaulIFlower Supply continues to remain light this week. With the demand for Mother s Day over, this market is relatively steady this week but is expected to get stronger in the upcoming weeks due to supply availability. Quality is good. Asparagus California and Washington Asparagus is tighter this week. Look for the market to stay strong in the upcoming weeks. Quality is nice out of all growing areas. Michigan is projected to start this weekend with light supply.

9 produce Broccoli The Broccoli market is starting to show some strength due to product availability. Quality is good with no major concerns. With weather being back to normal, hopefully this will help bring on more volume. Expect this market to trend downward if supply increases while demand remains moderate. tropical Pineapples The pineapple industry is strong which is a result of the Mother s Day pull, but the market should recover next week. Quality is very good. Bananas The banana industry is seeing some strong demand and we are expecting this for the next two weeks. Organic banana market continues to struggle with lack of supplies. Avocados The avocado industry remains stable. California product is excellent quality with sizes peaking at 48 and 60 counts. Mexican product will start winding down but the quality is excellent with high oils. The crop is heavy with the 48 and 60 counts. Fruit from Peru will be on the market at the end of May. We are expecting the crop to be heavy on the larger sizes, 40 and 36 counts. With most of the product on the market being a mix of fruit from California and Mexico, it is important to note that the color of the skin is not a sign of ripeness. Melons Cantaloupes The cantaloupe market is very unsettled. We are seeing product from Guatemala, Honduras, Mexico, California, Arizona, and Florida. Mexico, California and Arizona have excellent quality and the volumes are increasing weekly. Product from Florida is running very small in size. HONEYDEWS The honeydew demand is increasing as offshore volume decreases. Mexican crop is running small in size. California volume is increasing. Quality is good with nice color and good sugar content. 9 Watermelon The watermelon market is very active with the demand for Memorial Day approaching. Quality is very good with nice internal color. Berries Blackberries The blackberry industry has larger then expected volumes coming from Mexico and this is leading to better prices. We are expecting this to last for a few weeks and possibly drop further. Quality is good. Strawberries The strawberry market is holding steady after the Mother s day pull. California has been experiencing some warmer than normal temperature. This will bring color to the berries faster so it will lead to smaller sizes. The Salinas/ Watsonville area are still not at peak volumes yet. Raspberries The raspberry industry is struggling with the warmer temperatures in California. The volume is increasing but the temperatures are resulting in production issues. As more product comes available from California the market prices will continue to decrease. Mexico is wrapping up its production. Blueberries The Blueberry industry in Florida has great volume but is struggling to find the labor to pick the crop. Georgia and California have yet to hit peak production but also has good volume of product available. As both of these States hit peak production we will see the markets decrease. Grapes The grape industry is unstable with the markets all over the boards. Chilean green grapes are basically done and Chilean Crimsons are expected to be around for the next week. We are expecting the markets to be more stable next week as Coachella and Mexican volumes to increase. Both regions are two weeks ahead of schedule which is helping with the price points. Quality is good with California and Mexican product, but can be questionable with what is left on the import deals.

10 produce HANGIng FRUIT Apples The apple trees in Washington are in bloom with about 90% of the flower pollinated and the weather has been great. This year s crop continues to have strong market demand from the export and domestic markets. Quality is very good. Pears The pear market is similar to last week with Bosc variety finishing and Red Anjous wrapping up in June. Quality is very good and pricing remains stable. citrus Lemons The lemon industry is still seeing strong demand on all sizes and we expect this strong demand to continue until the middle of June. Chilean fruit will start to be on the market in volume come the middle of June, which will lead to the decreased market pressure. Most of the product is coming from district 2 (costal area). Overall the quality, color and juice content is good. Oranges The orange industry now has Valencia s and Navels and there is a market gap between them. Valencia s are very limited on 113 and 138 counts but this should not be an issue in a few weeks as more product is harvested. Overall, the quality is good on both varieties. Limes The lime industry continues to see large drops in prices on the smaller fruit and smaller drops on the large fruit. The industry was expecting strong demand for Cinco de Mayo but the market prices hindered demand. This is why the market dropped more than expected this week; however the markets are still not at normal levels. There is a very large range of quality on the market. 10