Gordon Food Service Market Updates for June 8, 2018

Transcription

1 Gordon Food Service Market Updates for June 8, 2018 Dairy Cheese The CME Block and Barrel Markets are continuing a mild roller coaster ride. Speculators feel this will continue for the short term. Last week: Block-Down Barrel-Down This Week: Block-Down Barrel-Down Dairy Eggs Egg movement is very slow and supply is plentiful nationally.market Tone: Retail demand slightly improved. Supplies of large sizes in good to close balance. Market

2 steady. Mediums available. Last week: Large - No Change Medium - No Change Small - No change This Week: Large - Up Medium - Down Small - No change Dairy Butter The heavy holiday pull has producers in full production trying to meet needs and maintain butter inventories.demand overall is solid but not excessive. Last week: Butter - No Change This Week: Butter - Down Grocery & Bakery Wheat Dryness in China, Ukraine, Russia and Australia have wheat markets on edge. U.S. winter wheat harvest is underway, but farmer selling has not pushed prices much lower so far.

3 Grocery & Bakery Soybean Oil Record production by US processors has outstripped demand and resulted in the largest soybean oil inventory levels since Meanwhile crude oil prices have dropped putting additional downward pressure on soybean oil prices. Grocery & Bakery Sugar This years sugar beet crop is off to a good start; prices are steady. Meat Beef Beef prices have held up well so far but we are starting to see discounting on a number of items as overall production remains large. Cattle prices have increased as healthy profit margins encourage packers run hard and pay more for the cattle needed to keep schedules full. Ground Beef: July 4th features should keep prices supported through mid-june. Ribs: We should see production catch up with demand in the next few weeks. Retail features associated with forward sales commitments should be ending by mid-june, pushing more volume onto spot markets. Prices may head lower once more volume is offered in late June. Briskets: Brisket prices have started to trend higher, much like they did last year. In 2016 and 2017 prices peaked in the second or third week of June. Rounds:

4 Rounds have been circulating on packers "push" lists. The price of flats has gotten historically cheap relative to ground beef, which could signal a price bottom. Insides may have some downside left. Strips: Packers booked some large forward commitments at very aggressive prices. This should support widespread T-bone and strip retail features. Prices should start their normal summer downtrend by late June, but fill-in buying could support prices until then. Tenders: Prices may remain steady until we see full production schedules later this month. Thin Meats: Ball tips and flank steak prices may adjust lower as more production hits midmonth. Outside skirts prices continue at high levels with aggressive foreign buying of any price breaks. Meat Pork As we turn the calendar to June we should see more retail features and a seasonal slowdown in supplies. Pork prices normally work higher in June. Butts: Butt prices adjusted lower following Memorial Day and appear to have leveled out. Demand for Fathers Day and July 4th are usually a short-term positive. Hams: Prices have bounced back to the low-end of what is typical for this time of year. Mexico announced a 10% tariff this month which ratchets up to 20% next month. Short-term, Mexico may increase buying to avoid paying the higher July import duty. Bacon/Bellies:

5 Retail will be increasing bacon features over the next 90 days, which may trend higher through the first half of the summer. Ribs: Prices are coming off a little from Memorial Day peaks. We should start to see some price lift as July 4th approaches. Loins: Pork loin prices are a little stronger, but remain far below previous years summertime prices. Competition from ground beef and chicken breast has kept boneless loin prices very depressed. Poultry Chicken Fresh whole and cut-up chicken prices are steady at10-year highs but buyers are finding product more available. With Father's Day and July 4th just around the corner demand may be strong enough to keep prices steady for the next few weeks. Breast and Tenders: Two big bird plants that started operation last year will be approaching full capacity this summer. One other jumbo chicken plant was closed by fire, but will come back on-stream in late summer. Additional output of jumbo and even medium size breast meat and tenders is hard to place; jumbo prices have dropped to all-time lows for this time of the year. Medium breast meat andtenders are not that bad yet, but prices are slipping. Wings: While jumbo wings prices have dropped to world price levels to encourage exports. Prices are getting more competitive with boneless wings, which may encourage featuring later this summer. Dark Meat:

6 Leg quarters continue to move into the freezer as supply exceeds demand.thigh and leg meat prices are steady so far, but availability continues to increase. Poultry Turkey Whole turkey prices are inching up with suppliers getting 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 ispoor and raw material is in short supply for2018 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.

7 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 leveling out as we enter new season availability and marketcorrection. Prices are expected to be more stable this season and lower than 2017 in generalwith no anticipated interruptionin 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 adjusteddownward and should stabilize for most of the summer grilling season. Supply is plentiful. Frozen Tuna:

8 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 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 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 are currently working White shrimp and have had most landings in smaller sizes for peeling. Larger White headless reliefis in sight once landings increase.

9 Domestic PUD: Domestic PUD shrimp prices have weakened to match new season production. Landings are good on mostly small sizes (90 count/lb and smaller). We will see landings of larger shrimp as the season progresses and shrimp grow. Domestic Rock & Pink: Rock & Pink shrimp are both in good supply. Pink shrimp, in particular, have had very good catch rates in the late winter months. Seafood Lobster North Atlantic: The lobster season began May 1st, and productis just startingto arrive to the states this week out of Canada. Costs are expected to soften as we get further intothe season andsupply rampsup. Note the spring seasonis typically heavier in the smaller sizedtails and meat where the bulk of the larger tails 6/7 and up are produced late fall. To date there continues to be heavy pulls to Asia on whole cooks and whole raw lobsters and no duty to import to the EU from Canada whichwill impact the availability of supply. 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 To date reports indicatethat fishing in the gulf region has been slow and boats are returning to the docks only 1/4 to 1/2 full. Prices continue to rise daily and it does not look like there will be any relief in sight at least for the larger 8 up and 10 up sizes. It is reported that the Japanese are still present at the plants in both Newfoundland and the gulf and also are concerned with record high prices.for now, costs remain elevated and supply

10 tight especially on the larger sizes.in addition there were reports of a right whale sightingthis weekaround the CapeBreton area. If this is validated it couldresult in additionalshut downs for fishing in that region. It is hard to predict this year if there will be any settlingdown or concessionson cost. Some feel there could be a correction on the smaller 5/8 but that is uncertainas well.note of product that has been harvested 60% are 5/8 and 35-30% are 8 ups with 10 up harvests being minimal. 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. Expect prices to increase for the summer on the smaller sized crab as supplies on these are reported to be tight. 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.Todate costs have adjusted downward monthly