FARMER S REPORT market trends 7.10.2015 This notice is subject to change. Information printed is based on last received market data. Subject to change without notification. 2015 US Foods. All rights reserved.
BEEF Buyer reluctance persists despite the minimal increase in slaughter numbers is pressuring box beef prices lower; and is evident in this week s pricing. Rounds Insides: nside rounds are lower on lower demand. They are expected to move lower for a couple more weeks before they seasonally advance in late summer. Flats: Bottom round flats are lower and will be again next week. They are close to their seasonal lows and then should move higher into late fall. LOINS Strips: Strip loins and short loins continue to move lower. A slight rebound in pricing is expected before Labor Day, but modestly so. They are expected to move modestly downward into the fall. Top Butts: Top butts are steady with a decent demand from several sectors. They are weakening and expected to move modestly lower into the fall. thin meats & grinds Flap Meat: All grades of flap are priced lower. This should continue into the fall. There is a possibility of a slight rebound before Labor Day, but limited. Flank: Choice flank is lower and expected to slowly drift lower into the fall. Again, with other items, there could be a slight increase in front of Labor Day before moving seasonally lower into the fall. Briskets: Briskets moved lower on lack of interests. There is some upside potential before Labor Day before moving higher into the fall. Grinds: Grinds were stable and lower prices are expected for the next several weeks until Labor Day with only modest increases anticipated. Skirt Meat: Skirt is moving lower and will most likely be next week as well. A possible increase in price may occur before Labor Day, but skirt should move lower into the fall as well. Ball Tips: Ball tips are higher on good demand and lower cattle slaughter. They will be higher next week, but should finally follow the path of the middle meats and move only modestly downward till fall. Tenderloins: Tenderloins barely moved higher, and they should maintain their value with the seasonal low expected in the next few weeks. ribs RibEyes: All grades and weights of ribeyes have moved lower and are anticipated to do so for several weeks before the expected seasonal low late July/early August. Chucks Chuck Rolls: Choice chuck rolls are lower this week and will be next week as well. They are getting close to their anticipated lows and will move modestly higher into late summer. 2
pork Base hog prices traded steady to firm this week as a few plants look for additional loads to fill their weekend schedule. Hog prices are expected to firm and trade steady through mid July then move higher late month. Both producer and packer margins remain in the black. Last week slaughter numbers were about 14% above year ago levels while this week s numbers are running about 14% higher than 2014. While hog supplies typically move lower during the summer timeframe, the week over week reduction in hog numbers has yet to occur. This implies there is an increased supply of pork in the pipeline. Hog weights were slightly lower last week, which is an indication that producers are more current in their hog marketings. Hog weights are forecast to trend sideways to slightly lower through the summer months and remain well below year ago levels. On the demand side, retailers and foodservice operators continue to use more pork than last year. Demand for commodity cuts, hams, and bellies are expected to remain strong through July, however excess supplies will put pressure on prices. Loins Bone in and boneless pork loin prices moved higher due to improved domestic and export demand. Prices for both bone in and boneless pork loins are expected to trade steady then gradually move higher as retailers promote both items for grilling season. Increased export demand may support higher price points during the month of July. tenders Pork tenders moved higher still supported by strong retail and foodservice demand. Prices are expected to continue increasing through mid July as retailers are expected to feature the item for holiday promotions. Strong demand from foodservice may support higher price points through late July. Butts Pork Butt prices continued lower due to pressure from excess supplies. Prices are expected to trade steady through July. Increased export demand may support higher price points during the summer timeframe. Markets will be volatile during July. Ribs Spareribs and St Louis Ribs continued their seasonal move lower due to excess supplies and weaker demand. Spareribs and St. Louis Ribs are expected to move lower through mid August while firming in anticipation of Labor Day promotions. Back Ribs also traded lower and are expected to decline through mid August. Bellies/Bacon Bacon/Belly prices moved higher in week over week trade supported by strong retail and foodservice demand. Bellies are expected to continue their gradual increase through mid August supported by retail and foodservice promotions. Hams Ham prices moved lower last week as packers found themselves with excess inventory during a holiday weekend. Prices are expected to trade steady to lower through mid July then gradually move higher late July through August and into the holiday months. Increased availability of Canadian Hams may result in lower than anticipated ham prices during July. Trim The following market dynamics will impact finished goods pricing during the July timeframe. Pork trimmings prices moved higher during the month of June. Prices are expected to continue their seasonal move higher through July. Thus, prices for all meat hot dogs in the July/August time frame are expected to be higher. Conversely ample supplies of beef trimmings may result in lower prices for beef hot dogs during the July timeframe. Picnics Pork Picnics moved lower due to excess supplies and weak processor demand during a holiday week. Picnics are expected to firm and gradually move higher late July through early August. This could result in higher prices for dinner sausage items during the July timeframe. 3
Turkey For information on the bird flu, please refer to us Foods "You Need To Know"- Avian influenza Updates. Whole Frozen Turkey The whole turkey market continues to inflate slowly as the uncertain state of the turkey industry due to AI continues. This market should continue inching up over the next few weeks. Boneless SKInless turkey BreastS This boneless, skinless market s inflationary trend continued this week, but at a slower pace. The supply of boneless turkey breasts is still critically tight. This market reached the $5.00 mark for the first time in history. poultry Hatcheries in the United States weekly program set 217 million eggs in incubators during the week ending June 27, 2015, up 2 percent from a year ago. Hatcheries in the 19 State weekly program set 209 million eggs in incubators during the week ending June 27, 2015, up 2 percent from the year earlier. Average hatchability for chicks hatched during the week in the United States was 84 percent. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier. Broiler growers in the United States weekly program placed 181 million chicks for meat production during the week ending June 27, 2015, up 3 percent from a year ago. Broiler growers in the 19 State weekly program placed 175 million chicks for meat production during the week ending June 27, 2015, up 4 percent from the year earlier. Cumulative placements from the week ending January 10, 2015 through June 27, 2015 for the United States were 4.42 billion. Cumulative placements were up 3 percent from the same period a year earlier. Whole ChICken & Cut-Up Parts: With the holiday behind us, the demand for Wogs faced some pressure, with the larger birds being discounted and the fast food size bird supply being tight. Maintaining the proper weight of the live chicken will determine if this market moves up or down, but right now it will trend sideways to down. Boneless Skinless Breasts As is the case with tenderloin market, the jumbo random breast market is starting to loosen up slightly. There has been a slight deflationary movement in this market which should continue next week. Even with the industry using more medium boneless breasts to cut down for sizing, this market has not been able to gather enough demand to meet supply. We should see slight deflationary movement next week. The demand for sized boneless breasts eased off over the holiday. The market slid slightly and should continue this trend into next week. Chicken Tenderloins Reports are starting to surface that the tender supply, on all sizes, is starting to back up slightly, as further processors demand is waning slightly. Look for the market to start deflating slightly in the weeks to come. Wings The smaller wing market slide slightly again this week as post holiday demand has been weaker. This market may see continued softening through the next few weeks. The situation with jumbo wings remains the same as last week. The demand for jumbo wings continues to be strong. With the heat related decrease in bird weights, the market has adjusted up slightly. There are numerous reports that the major wing chains are pushing the market up by signing contracts at a 3-5 cent premium to insure supply. This market will continue to be strong, though costs should trend sideways. Boneless Skinless Thighs The supply of boneless thigh meat has finally outgrown the demand as the market slide in the last few days. The processors continue to maximize their deboning capacity due to the relative value is still better than the bone-in leg quarters. 4
commodity grocery SOYBean Oil Domestic Crop & Production: Stocks reports for corn and soybeans added fuel to the bullish fire that has been burning the last half of June on concern that excessive rainfall across much of the Corn Belt will reduce corn and soybean acres and yields. Soybeans are about 96% planted this year, about 3m left to go (1/2 of which are in MO) The recent rains in Kansas and Missouri will limit the amount of additional soybean acreage that many had been expecting. The May NOPA crush report showed an unexpected increase in US soybean oil inventory to 1.578 B LBS, while yield was also raised from 11.3 to 11.34 pounds per bushel. A bullish bias should be maintained in the soybean oil market through at least Q3, 2015, especially considering that we still have the entire soybean growing season ahead of us and have run into some soybean planting problems in Missouri and Kansas due to wet conditions. international crop: The drought situation for the canola crop has intensified. There has been an outbreak of wildfires in northern Saskatchewan. This compounded with the lower planted acreage this year of -2.4%, may have an adverse affect on harvesting inventory levels. Biodiesel: Recent strength in energy markets has made bio-diesel production profitable in the U.S Biodiesel production numbers came in as expected @ around 5B LBs. for 2014-2016 dairy Butter Market is steady again this week. May butter production came in about 10% above forecast while sales have slowed slightly. These could be a sign of a price drop in the coming weeks. Cheese Cheese markets have continued to show some downward movement as higher cold storage numbers and decreased demand put some pressure on the market. Expect markets to trade within the current range for the next several weeks unless there are unexpected exports, which will drive markets higher. Shell Eggs Shell egg markets are less volatile recently. Shell egg suppliers, for the most part, are managing through this ongoing situation while processed egg suppliers continue to struggle to meet pre-bird flu demand. Milk & Cream For the month of July pricing is mixed with an increase to Class I and a slight decrease to Class II. This translates into flat to higher pricing on most items. Pricing is expected to remain flat to higher across most items next month. 5
seafood Shrimp, Domestic (Whites and Browns) The Louisiana Inshore fishery is now closed. This is the earliest closure in years. Offshore fishing is still going on and with small shrimp moving off shore time will tell on large shell on shrimp as it pertains to inventory and price. Brown season should start up July 15th. Prices turned stable after the Forth of July Holiday. Domestic PUDS: Inshore shrimp closing will cause a rise in price. 31 days of fishing may not have been long enough to fill all the inventory needs. We are looking for higher prices if inventory becomes short. Shrimp, Imported (Black Tiger and Whites) The Shell on Tiger market did turn lower, looks to be a reaction to the Domestic market. The White market has remained steady. CatFIsh, Domestic & Imported DOMESTIC: we are starting to see some good harvest on Domestic Catfish. As inventory builds we hope to see some lower pricing. IMPORTED: The market is starting to see some upward movement this week as product is getting tighter. Inventories in the US are getting tighter, and in some cases not available. Salmon Chilean Farmed Salmon: Fish remains in good supply and prices are stable. Norwegian Salmon: With the current exchange rate Salmon from Norway may be a fish you see promoted this year. Inventories look good and many suppliers are looking to move fish Domestic Wild Salmon: Supplies are good and steady to low prices. Mahi Mahi Look for stronger prices as the summer season continues. Be aware of origin of fish. Scallops SEA: Market is now steady. We are looking seeing the lowest price of the season and good inventory. BAY: Pricing unchanged this week. Tilapia This could be a good summer for tilapia pricing. Pricing has become steady as processors are looking at inventory around the country. We think we could see some upward pressure in the next 45-50 days. Whitefish Complex (Cod, Pollock, Haddock) Cod: The market for Atlantic Cod is on the rise. Pacific Cod is showing signs of lower prices. Pollock: The market remains stable to lower. Inventories are good and the Alaska Seafood Marketing Association is looking to promote heavy in the US. Look for bargains in the near future on Alaskan Pollock filets and imported Pollock fillets. Haddock: Current inventory is good and pricing is stable to weak. Fishery is in good shape and long term outlook is abundant inventory. Tuna, Yellowfin (Frozen Steaks & Loins) The portion business is seeing a rise in price due to new fishing rules being put in place. Outlook for the next few months is higher prices. King Crab RED & golden: Smaller King Crab is starting to tighten up with supply. We can expect higher prices on smaller crab. Large crab seems to be in good supply and pricing is stable. Crabmeat (Blue & Red, Pasteurized) Imports on Blue Swimming continues to be good and pricing is lower. Red Swimming crab imports have slowed down and movement is strong. Prices are going to rise in the next week. Projections of movement are being down with most packers talking about putting suppliers on allocation. Snow Crab (Canada & Alaska) Alaskan catch is done for the 2015 season and 8ups are very tight. There are some 5-8 s still in the market but crab is getting tight and now is the time to buy. Canadian The price of 5-8 s had an increase this week as Japan and retail stepped in to buy more product. Now is a good time to make some commitments. Looks like there will be about 10 million pounds left in the water. This could cause an increase in price as supply gets short. LOBster TAIls Warm water and north american lobster: Cold water tails both Maine and Canadian are in short supply with higher prices. Once we get past the shed prices could drop- time will tell. Warm water tails are steady in price waiting new season is under way in Brazil we expect this market to weaken in the next few weeks. Lobster meat has stayed firm in pricing and inventory is tight. 6
produce vegetables potatoes Russets: Storage season is winding down in Idaho. New crop is available this week with steady FOB pricing. Majority of the non-idaho Russet supplies are coming out of Colorado and Washington. Premium prices on larger size russets until the end of the storage season, which is expected to end in the beginning of August. Reds and Golds: Red potatoes are in full production out of Texas and California with excellent quality. Florida is done for the season. Supply is limited which is driving the FOB prices up until additional supply becomes available at the end of July from Minnesota. White/Yellow Potatoes: Yellow potatoes market continues to be strong with majority of the crop coming out of North Carolina and a few coming out of California. Limited availability will keep the market strong until more potatoes become available. GarlIC Chinese Peeled Garlic prices have moved down again this week; prices are expected to trend downward. The new California crop has no noticeable quality issues but yields are starting to look low. Based on how the harvest is progress, and the current drought situation in California, it is expected that the California Garlic supply will be very tight. CABBage Cabbage market is steady this week with light supply and moderate demand. The quality in Salinas, California is good. Leaf lettuce Green leaf supplies continue to improve this week which is causing a slightly lower FOB price. Romaine and Romaine hearts will be light this week. Quality is generally good with only occasional wind burn on Romaine lettuce. Heart supplies are light due to fringe burn. Red Leaf and butter lettuce supply and quality are good. Iceberg Lettuce Supplies will be light this week. Quality is generally good with some insect and Sclerotinia pressure. Prices will remain steady for the week. Onions Heavy rains this past weekend has caused supply issues in New Mexico. FOB price increase is due to the weather. Normal production is expected to come back next week. ChilE Peppers Chile Pepper market is down this week on Jalapeños out of Mexico crossing through Texas with good supply and moderate demand. Peppers out of Georgia are up with light supply and moderate demand. Cucumbers Heat has prematurely ended the North Carolina season. The weather in Michigan has been cool and wet, which caused the quality and supply issues to be down compared to where they normally are at this time of the year. Higher FOB prices on all sizes and grades due to tight supplies in the east and west. Quality on the west is generally good. Squash Both Eastern and Western squash markets remain active due to the weather as supplies continue to be tight. Quality continues to be variable in both markets. Large zucchinis are extremely tight in the east due to the cool weather in Michigan, which has slowed the growth down. Southern region is experiencing extreme heat which is causing the crops to end earlier than normal. FOB prices are pushing upwards as supplies get tighter. Green Beans The Green Bean market is steady this week with fairly light supply and good demand. There are good supplies coming in from Coastal California and Baja California. Eggplant Georgia crop has ended and most supplies are now coming out of South Carolina. Supplies are tight with strong FOB prices. Bell Peppers Market remains active as supplies continue to be tight in both the east and west. Quality continues to be variable due to heat and rains in the east. Market conditions should improve sometime next week when better volume starts up out of new fields. 7
produce Tomatoes Rounds: Quincy and Costal South Carolina crops are done for the season. Virginia should start producing within the next 7-10 days. There are still some eastern tomatoes out there coming out of North Carolina and Inland South Carolina but very light in volume. Due to weak supplies, expect stronger prices. Overall quality is good. California continues to be the main sourcing region for the west. Quality has been improving but still fair at best with higher quality fruit demanding a premium price Romas: Supplies are extremely tight in the east which is causing prices to go up on all sizes. Quality is variable. Western romas are still experiencing a gap between fields, which is causing supplies to be tighter again this week with a wide variance in quality. Good quality demands higher prices. Do not expect any relief for the next 10-14 days which is when new field should be in production. Cherry and Grape: Eastern grape and cherry tomatoes have tightened again this week which is causing FOB prices to be stronger than last week. Quality is good. FOB prices are up on western grape and cherry tomatoes with variable quality on grape and fair quality on cherry. Carrots Carrot market is flat this week out of Kern District California with good supply and moderate demand. The Carrot market is up out of Mexico crossing through Texas with light supply and fairly good demand. The availability and quality of the jumbos out of California continues to be good. Celery Celery market is up this week with good supply and moderate demand. The quality continues to be good; very large and meaty shanks, dark green in color. Sizing is leaning towards the larger size. Harvesting is taking place in Salinas and Santa Maria. Oxford has finished for the season and Canada and Mexico are expected to begin harvesting soon. Green Onions The Iced Green Onion market remains depressed due to good supplies still crossing daily from Mexico. The market will remain depressed until Mexico growers reduce production. The Iceless Green Onion market has good movement and good supply. CaulIFlower Cauliflower market is up this week in Salinas-Watsonville California with good supply and light to moderate demand. The Cauliflower market in Santa Maria California is down this week with good supply and fairly light to moderate demand. Quality continues to be good. Asparagus Asparagus market is down this week on jumbos with light supply and fairly light demand. The asparagus market is steady this week on large, small and standard sizes with light supply and moderate demand. Broccoli Broccoli market is up this week out of Salinas-Watsonville California with good supply and light demand. The warmer weather over the past few weeks has improved supply and quality is improving. tropical Pineapples & Bananas The pineapple and banana production have been seriously affected by continued rains and extensive flooding in Costa Rica, they are estimating a 20m-box loss for 2015. This will affect supplies and quality for the short term. Avocados California: This crop is past peak season and lower volumes are beginning to come out of the fields. The harvest is expected to dip this week and next. Then hold steady through July before declining after that. Sizing is peaking on 60s / 48 s. Very good demand is keeping supplies on all sizes tight. Quality and flavor are both excellent. Mexican: Production was down last week due to rains in growing areas, and this has caused a shortage this week. Old crop is winding down and look for supplies to tighten again this week. The Flor Loca crop from Mexico will begin this week. Smaller fruit is tight coming out of Mexico and we are seeing upward market pressure on 48 s, 60 s, and 70 s. 8
produce Melons Cantaloupes The west side has started and is where a vast majority of orders are now loading. Some growers in the desert continue to ship melons and they look to be completely finished this week. Overall supplies are not as heavy as they were during their peak production several weeks ago. This has caused the market to move up this week. All the growing regions are reporting very good quality. Honeydews The west side has started and is supporting the current demand. The desert supplies are winding down and have light supplies of 5 s. The new crop has excellent quality and sugar levels. The peak size from the west side is 6ct right now. Supplies out of Mexico remain at low levels and should finish this week. Watermelon Light supplies of melons are coming from Southern California, Southern Texas, and Georgia. The market continues to be demand exceeds supplies. Berries Blackberries There have been interruptions in the California supply over the past few weeks. Supply should begin to increasing all the way through August. Availability has been day to day, shipper to shipper in CA. Although, the recent heat we ve experienced has actually helped to bring on some better volumes of ripe fruit. Georgia season is winding down and with lower volumes harvested; availability will now continue to decrease. Oregon volumes have been limited as they experience a short gap in between varieties. Strawberries The strawberry market is flat this week. The recent warm weather coupled with humidity is raising the occurrence of quality issues being reported, industry wide and affecting all labels. The warm weather has brought on ripe red fruit which increases the amount of bruises and soft spots when this fruit is being picked and packed. The sunshine and heat have also colored up the fruit before it could reach mature sizing so you will notice smaller berries than normal in the clamshells. Due to the humidity and the heat, we may also see increased presence of mildew. Some of the issues being reported are bruising, white/soft shoulders, overripe, soft, mildew, and misshapen. It will be important to maintain the cold chain to avoid the chances of mold popping up when the fruit is exposed to warm temperatures. Grapes The market on red seedless grapes is about steady. We expect this market to soften as harvest volumes increase this week with little demand to help move the fruit. Quality overall is reported as excellent. The green grape market continues to be firm and short supplied as recent high temperatures have stalled maturity on the vine. With the cooler temperatures (highs in the 90 degree range) in the growing region this week we should see this situation improve. Quality overall is reported as good and should be excellent as the berries sugar up. blueberries There have been interruptions in the California supply over the past few weeks. Supply should begin to increasing all the way through August. Availability has been day to day, shipper to shipper in CA. Although, the recent heat we ve experienced has actually helped to bring on some better volumes of ripe fruit. Georgia season is winding down and with lower volumes harvested; availability will now continue to decrease. Oregon volumes have been limited as they experience a short gap in between varieties. Raspberries Raspberries are limited out of CA. The crop started early out of CA due to the unseasonable warm winter and lack of rainfall. The growth then slowed down due to cooler temps in May and June. Additionally, the current harvest to pruning cycles are keeping us in a demand exceeds supply situation. While the volumes should typically increase as we move through the summer, the current supply gap looks to be an issue all the way through July and even limiting availability possibly into early August. Crop should be at peak volume by mid-august. 9
produce HANGIng FRUIT APPLES & pears Washington Red Delicious is still being quoted steady but the price-flex for 88s and larger is still there. Most shippers are still peaking on 88s and larger in the premium and Washington extra #1 grades. Golden Delicious is mostly steady on all sizes. 125 & 138 Golds are more limited than the other sizes. Granny-Smith is mostly steady and is still peaking on 72s and larger. Supplies of Granny 100s and smaller remain short. Fuji s are steady and continue to peak on the larger sizes but Fuji volume is very light. Galas are steady and are still peaking on 88/100s. The Gala volume is low as the end of the season is getting close. We still have light supplies imported Cripps-Pink (Pink Lady) but they are almost finished for the season. Michigan is packing Red Delicious and could pack through July. They are still peaking on 100s and larger and supplies of small fruit remains light. The quality has been fair due to lighter pressures. California crop is starting to pack gala apples and they expect to peak on 100/113 s with only light supplies of 80 s and larger. This early fruit is high in color. California has started packing Bartlett pears. They also have Stark Crimson pears. Washington has D anjou pear peaking on 80-100s and limited supplies on anything smaller than 110 ct. Washington will have D anjou pears through July. citrus Lemons Lemon crop is peaking on 140s and smaller sizes. Demand is exceeding supplies on all sizes and grades of fruit. With the demand and the drought conditions in the growing areas this is producing less fruit with less time to size up. Oranges California Valencia oranges are going with good volume on 72s, 88s, 113s, 138 s. Quality on Valencia s is very good. Limes The lime market continues to be steady on all sizes. Growers continue harvesting less due to low market conditions. Lower prices have helped demand on all sizes. The overall quality is very good on the crop that is being harvested. Growers are starting to get into old crop limes now. We should start seeing thinner skin with lighter color in some lots coming up. STONE FruIT The peach and nectarine markets continue to be steady with excellent quality. Apricots are finishing this week and the market is strong. Quality on the late season fruit is reported as good. Plums are available with good volume in the smaller 60 to 80 ct. Demand is steady on generally excellent quality. Red cherries peaked in volume last week and are moving into the last 14 days of harvest with substantially lower volume. Demand is about steady. Rainier cherries are demand exceeds supply as most shippers have finished or are finishing harvest this week. 10