Gordon Food Service Market Updates for April 27, 2018

Transcription

1 Gordon Food Service Market Updates for April 27, 2018 Dairy Cheese The CME Block and Barrel markets have moved again into an untraditional spread as we saw earlier this year. Speculators feel the current movements in the Block and Barrel Markets will soon move back to more traditional spreads. Block look to be pushing the ceiling and could have some retraction in the coming days. Last week: Block- No Change Barrel - Up This Week: Block-No Change Barrel-Up Dairy Eggs The market has began to lower and should continue over the next several weeks.

2 Market tone: Retail demand poor to fair. Supplies of extra large & large long. Market weak. Last week: Large - No Change Medium - Up Small - No change This Week: Large - Down Medium - Up Small - No change Dairy Butter Cold Storage report was announced earlier in the week and the news is a bit bearish.expectation is to see some upward mobility on already elevated markets. Butter production continues to remain strong as the build continues for immediate and future needs. Last week: Butter - Down This Week: Butter - Up Grocery & Bakery Wheat

3 While the world has plenty of wheat the outlook for the U.S. winter wheat crop is not getting any better. Reports of frost damage add to drought and wildfire losses. U.S. prices remain well above world levels. 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 Warmer weather and retail features are boosting demand for middle meats (steak items). Packers were able to push beef production up 3% and beef prices up 2% suggesting demand is good. Feedlots seem to have enough market-ready cattle to support expanded output, so everything is in balance. Ground Beef: Increased beef output has left regular ground beef prices on the defensive. Ground chuck, however, is holding up due to ongoing retail features. Prices for all ground beef normally strengthen as we approach Memorial Day. Ribs:

4 Features of bone-in and boneless ribs are noted with some fill-in buying starting to emerge. We could see stronger prices develop in May if grilling demand picks up. Briskets: Grilling features lifted prices higher in May in each of the last two years. Large forward sales suggest brisket prices could firm again this year. Rounds: All boats float higher on a rising tide -- round prices often firm up in May. Strips: Strip prices are higher as we get into grilling season. We expect to see a steady uptrend in May, but fewer forward sales and larger production may keep prices from getting as high as they did last year. Tenders: As expected prices appear to have bottomed and should trend higher into Mother's Day and Memorial Day. Thin Meats: Ball tips and flank steak prices have been low and should benefit from increased interest for page 2 ads. Outside skirts are record high so expanded production should allow prices to ease. Meat Pork Record pork production has swamped most markets. Prices have trended lower in April, much like they did in 2015 and In each of those years prices rebounded by 30% or more as we hit summer highs. Current futures suggest a similar increase this summer. Butts: Butt prices hit a low and are now trending higher. As we enter BBQ season, the

5 trend is up. Hams: Mexican buyers areout of the market which has called prices to stall. We normally expect to see prices trend up as deli demand improves, but we will also need strong export pulls. Bacon/Bellies: Frozen belly inventories grew in March and are now at the 5-year average. With expanded supply we may not needto run prices sharply higher like we did last summer. Ribs: Pices dipped mid-month presenting buyers with an opportunity to add inventory. Prices are now trending higher. Loins: Boneless pork loins were at a discount to jumbo chicken breast for the last few weeks, triggering retail features. Meanwhile foreign buyers have ramped up buying. Prices are trending higher. Poultry Chicken Fresh whole and cut-up chicken prices are a little 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 demand seem to have found a bottom; select breasts are tight. We could see prices firm when we get closer to Memorial Day. Tenders are well-cleared but seem to be leveling out for now. Wings: March freezer stocks of wings were down from February and only 5% above last year. While wings are still pushy, we may not need to go down to world price levels

6 (10-15% lower) as long as inventories don't build significantly. Dark Meat: Leg quarter exports have slowed and prices are dropping. Additional supply is adding pressure to thigh and leg meat prices. Poultry Turkey Whole turkey prices are inching up with suppliers asking premiums for forward sales. The most recent March freezer inventory shows we still have ample supply. Produce Brussels Sprouts The market is steadily increasing as seasonal harvests in Mexico are winding down. Expect an elevated market to develop by late April and persist through May. Produce Onions Fresh-run, Texas-grown onions are expected on the market soon. The crop will be dominated by medium and jumbo sizes. Fresh-run onions will have feathery skins and light color/exterior skins compared to Northwest storage onions' darker, more cured skins. Produce Strawberries California strawberry supplies are increasing; warmer weather has promoted growth. More rain is expected. Produce Grapes

7 Grape prices are slightly higher; green seedless stocks are transitioning into storage. 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 as that fishery has started to rebound. 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 expect costs to increase with the arrival of spring supply. 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. Cod, Atlantic 2x: Fishing is poor and prices are expected to firm continuously for all of Cod, Pacific 2x: Heavy Restrictions on total allowable catch in certain Alaskan fishing grounds. Raw material is more expensive than Atlantic cod and expected to firm continuously for all of 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:

8 Typical slight firming of pricing during this time of the year. Starting to see substitution demand from cod users. Haddock: Raw material prices firming due to the cheapest groundfish compared to Pacific and Atlantic cod. Continued substitutions from cod consumers driving up demand and cost. 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 anticipate the start of the new season in May. Euro Lake Fish & Zander: Supply is good and costs are expected to decline now after Lent. 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. Expect these prices to continue to trend downward and stabilize over the next few weeks. Supply is good. 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 Tilapia:

9 Low production during this time of the year. Prices recently firm. 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:

10 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: Tail prices have been firm as there has been a big draw for product in various forms to Asia. (whole cooks, whole raw etc) Product is very short at the moment as we go into new season supply come May. We do not expect costs to decrease til after Mothers Day and this will be predominantly in the smaller sizes. The meat market for most of the year has been very sloppy coming off historical highs. Most predict this to level out this year to reasonable levels below the cost of tails. Warm Water: Replacement cost of goods has increased as of late where the larger sizes are reported to be shorter on the market. Do not expect much relief on supply until the new season arrivals in July. Seafood Crab Snow Crab: The global shortage of snow crab will continue in 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. We are expecting our first formal offers this week, but first indications are that they will start above last seasons initial prices as most processors/vendors have little available from last season as the cupboards are bare. King Crab: King crab supply is very short to none of the USA production. Most at the moment is

11 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.