FARMER S REPORT market trends 5.02.2014 This notice is subject to change. Information printed is based on last received market data. Subject to change without notification. 2014 US Foods. All rights reserved.
BEEF Live cattle traded at $145, down $1.00. Supply and demand are finding a better balance as product availability improves. Slaughter continues to be under both year ago-levels as well as the week prior, however we will be trending much closer to year ago levels soon. Rounds Insides: Supply and demand has found a better balance at least for the short term, resulting in a little more upside in the market. We should see more stability at these levels for the next few weeks. Flats: Bottom round flats are rebounding as prices reached interest levels for buyers to fill the pipeline. We will likely see prices at these slightly higher levels, at least for the short term. LOINS Strips: Strips worked their way down to a level that jump started buying interest for the early spring grilling season. The demand is pushing this market higher and will likely continue through May. Chucks Chuck Rolls: The market has found a bottom at least for the next few weeks and is expected to move up for the short term. thin meats & grinds Flap Meat: The market should have little downside moving forward into the spring time period. Briskets: Briskets are at all time highs but are in better supply. We could see another week or two of high prices but the expectation is for a declining market starting to show up later this month, but still ahead of year ago levels. Grinds: Grinds are moving up as seasonal demand is starting and will accelerate as we move further into May. Skirt Meat: Outside skirts are starting to show some stability after a strong early rise. 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. The select has started to indicate signs of downside in the future. 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 showing some rapid strength with sharp price increases, and will likely continue up well into the late spring. 2
pork Base hog prices traded steady to slightly lower across major markets as packers adjust their slaughter levels lower due to poor margins and weaker demand. Currently, weekly slaughter estimates are running 6% below year ago levels. As we move into the late spring/early summer timeframe, packers remain concerned about the supply of hogs during the peak summer demand season and into the fall months. Hog weights continue to hold steady, posting record levels. Packers are not discounting for heavier animals and producers are holding animals on feed longer to compensate for disruptions in their supply pipeline due to the PED virus. Hog weights are expected to trend lower but remain well above year ago levels through summer. Overall pork prices traded mixed last week. Bellies and hams moved lower along with back ribs and spare ribs. Pork butts continued higher on strong demand, supported by anticipated Memorial Day promotions and the loin complex held steady. Pork prices are expected to firm up in early May, then 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. 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 moved higher last week due to increased retail demand. Prices are expected to gradually move higher during May supported by retail features for Memorial Day. Butts Prices for bone in and boneless pork butts traded higher last week on improved demand for early May and Memorial Day features. Prices are expected to gradually move higher through May. Expect steady pricing for early June. Ribs Spare RibS: Spare rib and back rib prices held steady last week but began this week moving higher. Both back rib and spare rib prices are expected to gradually trend higher as demand improves and buyers add to their summer needs. Lighter spare ribs, 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. 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. Ham prices are expected to trend lower through May then hold steady through mid June. 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 moved 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 early June. Demand for exports and unanticipated supply constraints could support higher prices. 3
turkey Boneless SKInless BreastS This market was steady and fully supported. It appears the market ceiling that experts have predicted may have been reached. poultry Once again, the weather is the major topic when you talk about the poultry complex. Tornadoes ravished Arkansas, Mississippi and Alabama the first part of this week. These devastating storms caused millions of dollars of damage, which included poultry houses and processing facilities. We have confirmed reports from our vendors of one chicken processing plant being hit by a tornado and 40 poultry houses being destroyed. The loss of these houses means that approximately 7 million lbs. of processed meat will not make it to market. Ray Hilburn, membership director for the Alabama Poultry and Egg Association was quoted We lost over 3 million birds, but we process over 4 million birds a day Though the loss of birds is small in relation to the total broiler production, until these houses are rebuilt, the loss of birds will continue and the cost of rebuilding will be passed on to the market. The one piece of good news is that the weight of broilers is finally reaching it optimum processing range. The effects of winter on bird weights have finally cycled through. Most items throughout the chicken complex were found to be well-balanced and fully supported. Some buyers have decided to play the watch and wait game to see what type of impact, if any, theses increased bird weights might have on the near-term markets. Chicken Tenderloins The chicken tender market increased slightly this week. The availability of tenderloins is still very tight. Further processors are still short on tender obligations. This market will continue to inflate over the next few weeks. Boneless SKInless BreastS The market stayed flat this week for the first time in a couple of months. The supply has been bolstered by the increase in bird weights. The market is expected to peek near the end of May or first of June. The storm damage and breeder stock depletion may support an up market further into the summer. Wings The wing market actually slipped slightly this week. Market analysts expect this market to stay on a sideways track until the grilling season starts. Time will tell if the winter storm affects the supply of wings in the summer. The availability of wings this summer will be directly related to the condition of the breeder stock. Boneless Skinless Thighs Exports supported this market as the domestic market was down due to post holiday low demand. The demand will start to increase, peaking out in the first of June. The retail segment plans on promoting boneless thighs for Mother s Day week, so supplies may be tight the next two weeks. commodity grocery Oil The market has been trading in a tighter range than what we have seen over the last few weeks. Still seeking answers, traders have been focused on the July/November soybean spread for clues if the rationing job for old crop beans is getting done. The balance sheet remains tight and US traders continue to look towards imports from South America and Canada to make up the domestic soybean shortfall. We are now in the middle of the seasonal trend where oil prices typically gain strength, and now with the unresolved issue of the tightening bean supply, we would expect the complex to follow historical trends. 4
dairy Butter The butter market is again on the rise. Overall domestic and export demand is steady, but butter stocks are 30% lower than last year. Typically, butter inventories are building at this time of year, but inventories remain tight. Cheese Prices continue to trade within the same range for the past three weeks. Lower than expected year over year milk production in certain regions, is keeping the cheese prices within the current range. Forecasts do not have markets dropping until Q3. Buyers are tending to buy to fill current needs only. Milk April dairy pricing is up and continuing to see pressures from the market. The market is still experiencing unprecedented high prices due to the increased demand and decrease in China s supply of milk due to disease affecting their herds. This is resulting in an increase in exports and no change in supply here in the US. Forecasts are predicting some relief in the next few months, but overall prices are predicted to stay flat for the near future. Shell Eggs Egg market is steady this week. May is the traditional low point for the year on shell eggs. We may have reached the bottom sooner than expected. Supplies are adequate. 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, which is causing prices to push up slightly. The Domestic P&D market was also quiet. The exception to this trend is the larger sizes of U 10 and 12 these seem to be slightly weakening, more than likely due to dull demand. The Domestic PUD Market was mostly quiet with some weakening on sizes smaller than 111/130 ct. This slight 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. 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 shrimp are currently the better buy than same size Asian shrimp. Shrimp, Imported (Black Tiger and Whites) The HLSO Asian Tiger market was unchanged this week. It will be July/August before any large volume of tigers is harvested. The HLSO Asian White market continues to weaken on most sizes, especially 21/25 and 26/30 sizes. The value added Asian White shrimp complex for cooked shrimp saw weakening on the mid to lower sizes this week. The Asian White P&D tail off and cooked complex 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: The domestic market was quiet this week. Raw material remains in tight supply with no foreseeable increase in supply for another 6-8 weeks. IMPORTED: The market continues to rise 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
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 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 salmon prices are firm. Frozen portions supplies remain light for a moderate to active demand. The fresh fillet market continues to trend higher on all fillet sizes. Supplies are barely adequate for a moderate to active demand. Mahi Mahi The market is seeing a cautious rise in pricing by the importer/processing community. Currently, portions and fillets are running 15-20% 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 very few changes this week. The market place is unsettled, with demand moderate to active depending on sizes and inventory scattered again depending on size. 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 2013. 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 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 two of the larger Japanese companies have settled on a price with processors the feeling is the rest will not be far behind. Traditionally, once the Japanese step in, the majority of production flips to the 4/8 ocean run pack the Japanese specify and little makes its way down to the US. Hampered by the fact that ice still remains a problem in the Gulf and parts of Newfoundland, don t expect any great amount of crab down to the US any time soon. The Japanese stepping in should stabilize pricing for awhile. The market continues to soften on 2013 harvested 8+ crab due to dull demand for this size. Alaska the market remains unchanged with a firm undertone to that product that has not been committed on long term contracts. LOBster TAIls Warm & Cold water: The market for Caribbean tails rose this week and the market is running full steady to firm due to inventory levels during the closed season. Brazil tails are stable this week with no changes. AmerICan Tails: The market continues very firm with a tight supply situation. Canada Season will open within the next few weeks ice permitting. 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
produce vegetables potatoes Russets: Idaho Russets have gotten slightly stronger over the past two weeks. Quality has been challenging over the last few weeks with some reports of internal black and pressure bruise. Look for the final three months of the storage crop to continue to have strong demand and pricing. The market for russet potatoes is very steady as the volume is at a comfortable level in every major shipping state. Reds: There will be a supply gap of red potatoes in the first week of May that will last around 10 days. Growers in the Northeast have all but finished shipping their crops. The Red River Valley will continue through May. The desert crop in California continues to be harvested and the yields have been light but the quality is excellent. The Texas growing region will have red potatoes available until the week of May 5th. White, Yellow and Fingerling: Storage crop yellow potatoes are almost all sold in every major shipping area. The new crop potatoes are available in Florida and California. Although supplies of yellow potatoes are tightening, growers have enough supply to get through the transition without a gap. The new crop round whites are now shipping out of Florida as well as California. The demand for both of those is mostly local. The storage crop of fingerlings in Wisconsin and Colorado are finishing up and new crop fingerlings from California and Florida are now available. leaf lettuce Volumes on romaine and green leaf continue to be strong. The market continues to be weaker and quality is being reported as good. Weights are being reported at 36-38 lbs for romaine and 22-25 lbs on green leaf. We are anticipating the quality and availability will continue at current levels for at least another 2-3 weeks at this time. GarlIC Garlic demand continues to be steady. California supplies are being reported as light due to strong demand and the Chinese garlic market is also getting stronger. Suppliers are not looking to take on any additional business at this time. CABBage Cabbage markets are being reported as stronger this week. Florida plantings are coming to an end and cooler weather in Georgia has slowed the start of strong volume. Quality is good on all varieties. Iceberg Lettuce Quality is being reported as good out of Salinas and weights are being reported at 46-48 lbs. Warmer than normal temperatures for this time of year are continuing to drive fields forward, reports are for temperatures in the high-80s and low-90s for the rest of this week. Concerns are that the excessive sun will cause some quality struggles over the coming weeks. Expected yields also look to be lighter over the next 2 weeks. Onions The onion market is beginning to soften. Quality has been hit or miss out of Texas and Mexico. The new crop onions from Texas have a smaller size profile, while the new cop onions form California have a heavy to jumbo or colossal size profile. The Vidalia sweet onions from Georgia have started shipping but wont be at full force until May 1st. ChilE Peppers The chile market is going through a transition, from Sonora and Baja, to other growing regions of Mexico. Weather is cool and production is active on Jalapeños, Anaheims, and Pasillas. Squash Squash supply is steady but demand is strong. This market remains steady, and quality varies between growers with prices reflected in quality. The main quality concerns are scarring from the high winds. Supplies from Nogales are lighter with only 2-3 more solid weeks of crossings. 7
produce Green Beans Green beans markets continue to be steady with good supply and quality out of Florida. Demand continues to be light. Tomatoes Rounds: The Florida crop in Palmetto-Ruskin area is in full swing. Demand for this is slightly lower than expected which has lowered pricing on the larger sizes. Quality has been reported as very strong. In Mexico, rounds are still at minimum pricing in virtually all varieties of rounds. Quality is generally fair to poor. Crossings continue at Nogales but harvest in this area of Mexico is ending. The season currently has four to five weeks left before it would come to an end. Cherry and Grape: Grape and cherry supplies in Florida are meeting demand and quality has been very strong. Demand could rise quickly for this product in the next two weeks in preparation from Mothers Day. In Mexico, both cherry and grape tomatoes continue to run light this week. San Diego has begun to ship grape tomatoes in a small way, but should increase volume week after week for the next month. Romas: In Florida quality has been taking a slight hit but the demand has not been enough of a factor to push pricing down, therefore pricing is remaining steady. Pricing in Mexico has remained unchanged as well. The quality seems to be steady with new fields rendering stronger product. Cucumbers Cucumbers supplies out of Florida are continuing at a steady volume. Quality continues to be mixed with some scarring from the rain. Western markets are stronger with quality reports varying from one extreme to another. Premium product will command a premium price, be wary of any deals that seem too good to be true. 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 supplies are steady in the East this week but we are still seeing mixed quality out of Florida due to the recent rains. Western supplies are lower as the Nogales season comes to an end. Markets are stronger and quality is poor. The Red Bell market is higher and some growers are experiencing a minor gap in supply for the next couple of weeks. Carrots Jumbo carrots supply continues to be steady due to good growing conditions in Bakersfield. Markets are steady and quality is good. Celery Celery markets are firm this week. Oxnard is showing some seeder* in the fields, which is normal for this time of the year. *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 as we move into May. CaulIFlower Similar to broccoli, cauliflower fields are about 2 weeks ahead of harvesting schedule and the gap continues. This market is very active again this week but we feel that supplies will improve over the next 2-3 weeks. Asparagus The asparagus market is steady this week with all product coming out of California and Washington. California asparagus sizing is still peaking on large with a few standards available. Quality is reported to be good. Washington asparagus is showing nice quality. Broccoli The broccoli market is steady but supplies are tight. Quality is good with no major concerns. With broccoli fields about 2 weeks ahead of the normal harvesting schedule we are expecting a gap in the next 2-3 weeks that will cause product to be extremely tight. 8
produce tropical Pineapples The pineapple industry remains stable with good supplies and good quality product. Bananas The banana industry remains the same as last week, stable with both supplies and demand. Organic banana continue to be short in supplies due to the crop failure that Peru experienced and also the increased for organic bananas in Europe. Avocados The avocado industry remains stable, which is somewhat surprising with the demand increases from Cinco de Mayo. Product from Mexico is coming in at a darker color skin and the supplies are stable with sizes peaking on the 48 count. Chilean avocado volumes are winding down. Peru avocadoes will start arriving in early May. California crops estimates are around 260-300 million pounds. Inventory continues to grow and volumes have spiked with growers being proactive and picking more fruit, the recent wind and heat causing a drop of additional fruit. Melons Cantaloupes The cantaloupe imports continue with fruit on both coasts but more product on in the East. Quality remains very high with good sugar content and color. Crops in California and Arizona are starting to be harvested but volumes remain low but will improve over the next few weeks. HONEYDEWS The honeydew industry is stable as product is being harvested in California and Arizona along with imports from Mexico and offshore. The domestic crops will increase in volumes going forward. Both domestic and import crops have good quality. Berries Blackberries The blackberry industry continues to see a range of pricing and quality from Mexico. We are heading into peak blackberry time so the markets will stabilize over the next few weeks. Strawberries The strawberry market is moving upwards as Oxnard is finishing and Salinas/Watsonville is not in full product yet. Santa Maria does have good volumes to be harvested. The quality is good in all areas but will expect the market to continue to increase for the pressure of Mother s Day demand. Raspberries The raspberry industry is increasing in volumes out of California which has helped bring down the market slightly. Mexico also has a fair amount of volume crossing the border. Blueberries The Blueberry industry is stabilizing as Florida has now recovered from the weather and is at peak production. Georgia has some volume on the market but is still not in peak production. California has also started with good volumes. We will continue to see the markets decrease as volumes increase. Grapes The grape industry remains very limited on green grapes and limited on red grapes. Green grapes imports are finished and a few more red grape containers will be imported. Mexico and Coachella (Southern California) have just started harvesting both red (flames) and green (perlettes) grapes, but the volume is still limited. Significant volumes will be on the market by mid May. Currently the markets remain high on green grapes due to lack of product and stable on reds with more product being imported from Chile. Watermelon The watermelon industry is improving as supplies from Mexico continue to increase. The quality remains very good. 9
produce HANGIng FRUIT Apples The apple trees in Washington are in bloom so in 150 days from now next year s crop will be on the trees. This year s crop is finishing strong with export and domestic markets continuing to pull heavier than expected. As certain varieties finish, such as Honeycrisp, the demand will transfer to other varieties and we will start seeing market increase. Pears The pear market is increasing as the Bosc variety is finishing and Red Anjous are expected to finish in June. Green Anjou should be on the market until August. Quality is very good and pricing is stable for now. citrus Lemons The lemon industry is seeing strong demand on all sizes which is leading to price increases. We expect this to continue throughout the summer. In mid June product from Chile will start arriving so that might help with the prices. Additionally when the lime market recovers it will reduce more pressure that the lemon market has been experiencing. Overall the quality, color and juice content is good with the crops generally running large on size. Oranges The orange industry continues to see strong demand. Smaller oranges still remain limited and are demanding a higher price point. Navels will continue through the middle of May but then Valencia s will be shipped in volume. The quality on the Navels is good with excellent juice content. Limes The lime industry continues to improve. We are seeing the markets consistently decrease prices with more dramatic drops on the smaller sizes than the larger sizes. Larger limes are still very limited but this will improve in a few weeks. Quality is still fair but improving as well. 10