Gordon Food Service Market Updates for May 4, 2018 Dairy Cheese The CME Block and Barrel Markets could have some uptick opportunities as reports show increased exports for dairy products out of the country. Speculators still feel there is plenty of fluid milk to supply the demand domestically that will keep the market in check. Last week: Block - No Change Barrel - Up This Week: Block - Up Barrel - Up Dairy Eggs The market has began to lower and should continue over the next several weeks. Market tone: Retail demand fair. Extra large thru mediums available. Market adjusting. Last week: Large - Down
Medium - Up Small - No change This Week: Large - Down Medium - Down Small - No change Dairy Butter Butter production is still steady and sales are strong both domestically and internationally. Ice cream manufacturers are pulling cream away from butter producers which is contributing to driving spot pricing in an upward trajectory. Last week: Butter - Up This Week: Butter - Up Grocery & Bakery Wheat The Kansas Wheat Quality tour -- nearly 250 carloads agronomists and other wheat industry professionals that walk farm fields throughout Kansas -- completed day 2 of their tour with estimates that yields will be down 25%. Prices have rallied $1/bushel since crop problems started to develop last winter. Grocery & Bakery Soybean Oil U.S. and world vegetable oil supplies are ample which prompted the USDA to adjust soybean oil price projections lower to a $.30-$.33/lb range. Prices are trending to the low end of that range.
Grocery & Bakery Sugar Spot prices for beet and cane sugar are steady, volumes are light. Prices for the 2018/2019 crop year are quoted 2 cents/pound lower for both beet and cane sugar. Forward booking volumes are well behind last year, but are close to long-term averages. Meat Beef Cattle prices are a little lower this week and forward sales are at even lower levels. This would suggest that the seasonal downtrend in cattle prices has begun. Ground Beef:?After drifting lower for much of April ground beef prices are firming up again. We often see uptrending prices in May. Ribs: Retailers took advantage of April's price break to book bone-in and boneless ribeyes for summer grilling features. Warmer weather is prompting consumers to take advantage of breaking retail ads pushing ribeye prices higher. Briskets: Grilling features lifted prices higher in May in each of the last two years. Prices have been trending higher this week. Rounds: Retail features are also breaking for round cuts and prices are trading higher. Strips: Strip prices jumped this week as weather warmed and shoppers prepared for the first good grilling weekend of the year. Tenders: Tender prices have also jumped as we approach Mother's Day and Memorial Day. Thin Meats:?Ball tips and flank steak prices are also bouncing back this week. Outside skirts prices continue near record high with no sign of breaking.
Meat Pork Last Saturday was the smallest kill for any Saturday this year. That may be the first sign of the normal summer pork production slowdown. Butts:?Butt prices hit a low and are now trending higher. As we enter BBQ season, the trend is up. Hams: Mexican buyers are out of the market which has called prices to drift lower. Hams are backing up and prices won't improve until exports pick up. Bacon/Bellies: Most freezer programs are wrapping up pushing more bellies onto the fresh market. Demand is strong enough to clear output, but only at mostly steady prices. Ribs: Prices continue to inch higher, with bigger gains likely as we get into grilling season. Loins:?Pork loin prices are trending higher, but are still well below where they were in previous years. There is lots of competition from ground beef and chicken breast which will limit the price potential for all three items. Poultry Chicken Fresh whole and cut-up chicken prices are higher as buyers build inventories for Mother's Day and Memorial Day. Smaller sizes are hard to find. Breast and Tenders: Medium and jumbo breast meat are clearing but demand is uninspiring; select breasts are tight. Tenders are in good balance with prices unchanged. We could see prices firm when we get closer to Memorial Day. Wings: While still pushy, most sizes are finding a home. Some discounted sales to Canada are noted. Dark Meat:
Improved restaurant demand has steadied out prices for thigh and leg meat. 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 is poor and raw material is in short supply for 2018 until early 2019 when fishing resumes. Cod, Pacific 2x: 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 2018. 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 declining as we enter the month of May. Prices are expected to be more stable this season and lower than 2017 in general with no anticipated interruption in 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: The S American Mahi season began last fall and costs have softened compared to last season. Prices have adjusted downward 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 2019. 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: 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. Boats have also moved off these species where they can to target pink shrimp. Domestic PUD:?Domestic PUD shrimp are following the same trend as White & Brown Headless. Prices are stable at listed levels as early spring production has not been substantial. Additional fishing will be had as we run into May/June, which hopefully yield cost reductions. Domestic Rock & Pink:?Rock & Pink shrimp are both in good supply. Pink shrimp in particular have had very good catch rates in the last few weeks as boats have moved away from browns and whites to target them specifically. Seafood Lobster North Atlantic: The lobster season began May 1st, but to date there have been limited offers. Expect product to really start arriving to the states for sale in the next 10 days to two weeks There is still a heavy pull on whole cooks and whole raw going to Asia so the cost of new season tail and meat prices has yet to be determined. Note that the market has been short prior to the start of the season especially on the smaller 3/4 and 4/5 oz tails and it might take a few added weeks before costs stabilize. The larger tails are predominately harvested in the fall so expect prices to be firm on the 6/7 oz and larger tails. Meat prices this winter have been very sloppy but started to stabilize late spring. 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: The global shortage of snow crab will continue in 2018. The Canadian quotas have been announced by Fisheries and Oceans Canada with the overall quota down by 27% for all of Canada. The Alaskan quota has already announced a smaller total allowable catch (TAC) as well. For now, costs remain elevated and supply tight especially on the larger sizes 8 and 10 ups. Full straight loads of dedicated sizes have been harder to come by as crab landings have been low to date. The Japanese continue to buy mostly Newfoundland crab at the moment but will buy from the Gulf as well to fulfill their needs. As zone 12 has opened this week we hope to see more offerings as they start to come down to the states. Note of product that has been harvested 60% are 5/8 and 35-30% are 8 ups. 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. 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. To date costs have adjusted downward monthly