Gordon Food Service Market Updates for May 18, 2018

Transcription

1 Gordon Food Service Market Updates for May 18, 2018 Dairy Cheese CME Block and Barrel markets have started to retract a from its recent push to the high side. Speculators see that milk production is up, cheese stocks are up and sales are steady. There is a traditional push to the upside through out the summer, which is being projected. But the weather will dictate how high the increase will be. Last week: Block- Up Barrel - Up This Week: Block-Down Barrel-Down Dairy Eggs

2 Traditionally May is the slowest month of the year for eggs. Egg movement is very slow and supply is plentiful nationally.market Tone: Retail demand poor to fair. Supplies available. Market attempting to settle. Last week: Large - No Change Medium - No Change Small - No change This Week: Large - Down Medium - Down Small - Down Dairy Butter Butter demand continues to be strong both domestically and internationally as domestic pricing is still attractive to the international community.production remains strong as retailers continue to buy. Expectations are thatprices will continue tofurther increasethroughout the remainder of this year. Last week: Butter - Down This Week: Butter - Up Grocery & Bakery Wheat Wheat futures prices peaked the first week of May and have adjusted lower since.

3 Prices are above last year, but large world supplies will keep a lid on how high U.S. prices can go. Grocery & Bakery Soybean Oil Prices bottomed last week and are a little higher this week. Soybean planting is catching up to its normal pace this week. Grocery & Bakery Sugar The USDA adjusted 2017/18 sugar supplies up a little, very much in line with the current sideways price trend. Meat Beef Beef and cattle prices have leveled out at higher-than-expected levels. Fed cattle slaughter has been large for two weeks and steer weights have dropped sharply pounds in four weeks -- suggesting feedlots are selling cattle as soon as they are ready for market. With very large forward sales and widespread features going into Memorial and Father's Day, beef prices may not decline as fast as cattle futures suggest. Ground Beef: Ground beef prices are trending up with widespread retail features noted. Prices often strengthen until we get close to Memorial Day. Ribs: Ribeye prices are still edging higher with lighter weights trading at a discount to heavy. With slaughter weights falling sharply in recent weeks, light ribeyes could continue to trade at a small discount. Briskets:

4 Brisket prices are edging higher this week as Memorial Day demand kicks in. Rounds: As fed slaughter continues at an elevated rate, round prices are starting to come under a little pressure. Summer is often a slower demand period for round cuts, but ground round prices provide a floor. Strips: Retail feature activity is very similar to last year and so are strip prices. We peaked prices out next week last year, so we will see if we follow that pattern again this year. Tenders: Tender prices keep bumping against the highs set earlier this year, and then back off. Last year prices peaked about this time in May; peaks came later in May/early June in the previous two years. Thin Meats: Ball tips and flank steak prices are flattening out as more supply becomes available. Outside skirts prices continue at high levels with aggressive buying of any price breaks. Meat Pork Pork output is declining at the normal seasonal pace and most pork prices are advancing. Butts: Smaller supplies and strong seasonal demand are pushing prices higher. There are fewer pork butts in freezer inventories, so reductions in fresh supply quickly translate into higher prices. Hams:

5 Prices are pressing to new lows. Mexican buyers may have loaded up earlier this year due to concerns over trade disruptions; they are certainly not buying heavily now. Lower pork trim prices may also be a contributing factor. Bacon/Bellies: Smaller supplies and breaking features have tightened up spot supplies. Prices are trending up.. Ribs: As we get closer to Memorial Day prices are getting strong. Many retailers have specified fresh-only, which creates more demand during holiday time frames. Loins: Pork loin prices are trending higher led by bone-in loins which are now at similar levels to the last couple of years. Boneless loin prices are recovering, butare still cheap relative to history,. Poultry Chicken Fresh whole and cut-up chicken prices arenearing 5-year highs as buyers search for product. Smaller sizes are very hard to find. Breast and Tenders: Jumbo breast meat prices are lower as sellers compete for orders; jumbo tenders are a little pushy. Demand for whole fryers and cut up chicken has diverted supply away from boning. Supplies of small and medium breast are tight and prices are firm. Wings: Jumbo wings prices are still weak. Medium and small wings are in better balance. Dark Meat: Improved restaurant demand has steadied out prices for thigh and leg meat. Leg

6 quarter prices are lower as exports remain slow. 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 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 Pollock, Atlantic 1x:

7 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: 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.

8 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 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

9 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, 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 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

10 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