Market Update June 2, 2017

Transcription

1 Center of the Plate Beef Packers slowed May beef production back to 2016 levels, which elevated prices. We expect beef production will increase in June, which should push prices lower. Cattle have been coming in at lighter weights and, as a result, with much less fat than usual. This has left 50% trim supplies very short, and pushed prices to a record $2/lb. High trim prices and tight supplies have supported all ground beef prices, but especially 73% lean. Briskets have been supported by retail features, especially in the Southwest. Choice rib prices went to new record highs due to Memorial Day features and tight supplies. With choice ribs trading at a $3/lb premium to select ribs, there is plenty of room for them to adjust lower this summer. Almost all loin prices have peaked and are trending lower. As production picks up this summer, loin prices will remain under pressure. Ground Beef 81% Brisket Inside Round Ribeye Strips Ball Tips Tenders Flank Steak Current Week Up Up Down Up down Down Down Down Next Week s Projections Flat Up Flat Flat Down Down Down Down Pork Pork production has been a little less than expected in May, mainly due to lighter slaughter weights. Butts surprised many with additional price strength as retailers chased fill-in product to support features. Butt prices normally level out for a few weeks after Memorial Day. Ham is steady as Mexican buyers wait for better prices. Ham processors should begin ramping up for summer deli demand soon, so prices could firm later in June. Rib prices are trending up, partly due to major retailers requiring fresh/never frozen product. Loin prices have improved, but are still below 2016 levels. Boneless loins are cheaper than chicken 2017 Gordon Food Service 1

2 breast, which is unusual for this time of year. Bacon price increases are slowing down a little, but prices should generally be flat-to-up until we reach seasonal peaks in July. Butts Hams Spareribs Loins Bacon Current Week Up Flat Up Up Up Next Week s Projections Up Flat Up Flat Up Chicken Chicken output remains virtually unchanged from last year, so when you factor in a larger U.S. population and bigger exports, per-capita chicken supply is lower than last year. The number retail stores with Memorial Day chicken breast and tender features was up 20% this year, the result of cheap prices in the first quarter when features were planned. Now that prices have jumped and holiday buying is behind us, prices could relax. There is an ample supply of chicken leg quarters, which would normally translate into lower prices for all dark meat. This year, however, there hasn't been enough labor available to convert bone-in leg meat into thigh meat and that is supporting prices. Food service demand for wings continues to outpace supply, with wings topping $2/lb. Jumbo BNLS/SKNLS Breast Clipped Tenderloins BNLS/SKNLS Thigh Meat Jumbo Wings Medium Wings Current Week Up Up Flat Up Up Next Week s Projections Flat Flat Flat Flat Flat Turkey Frozen turkey inventory builds are about a month ahead of last year, making processors more willing to negotiate. Prices are mostly flat to lower. UB Hens, East, 12 lb. Frozen UB Toms, East, 22 lb. Frozen UB Turkey Breast, East, 8-10 lb Gordon Food Service 2

3 Current Week Flat Flat Down Next Week s Projections Flat Flat Down Seafood Cod - Alaskan (1x Fzn) 1x Alaskans and Russian has been stable for both cost and supply. Cod - Atlantic (1x Fzn) Limited supply on the 1x cod loins. The new season begins in June and we expect first arrivals the latter part of the month. Cod - Atlantic (2x Fzn) Low fish landing numbers reported. Raw material trading at historical high and supply will be tight until Jan 2018 when new season begins. Cod - Pacific (2x Fzn) Demand strong due to high Atlantic cod raw material price out stripping supply. Raw material price is trading at almost the same price as Atlantic cod. Crab - King Market has softened since last fall but is still pricy. Crab - Snow The Canadian snow crab season is still in flux. There have been reports of heavy ice in the Newfoundland area impacting harvest. Some indicate they are also purchasing gulf product to process. The Gulf season opened up with a bang but was also subject to adverse weather conditions that made fishing tough As a result costs have been increasing every week, sometimes daily. There has been a strong Japanese presence to date as they are looking to fill their needs and orders as well. Many feel this will level off on cost and available supply by the middle of June early July. Last reports indicate that there is a larger part of the gulf quota to be caught than has been landed thus far. Crab Meat - Pasteurized Prices have moved up as supplies have tightened late in Prices remain firm and supplies limited in the US as production overseas has been slow and demand has been good. Expect supplies to remain tight and prices moving higher on all types. Euro Fish & Zander Supply has been plentiful and costs competitive and steady for some time. This is a lower cost option to the domestic lake fish market. Flounder & Sole 2017 Gordon Food Service 3

4 Raw material tightening. We are seeing cost of raw material trading higher. Haddock Raw material appears to be stable and trading at current levels after a brief run up. Lobster - Brazil The new Brazil season will resume in June with first shipment arrivals in July. Supply and cost have been average and stable for some time. To date there has been no indication of new season costing. Lobster - North Atlantic The season has just begun in Canada. To date there have been few offerings as the bulk of the focus is currently on snow crab. Many expect prices to be firm to start and will readdress once landings become more adequate. Lobster - South African Costs still firm compared to other lobster offerings. Supply adequate for a lackluster demand Mahi Mahi The mahi market is very strong at this time. Supply is not adequate for the current heightened demand. Some report s indicate the S American season was down by as much as 50% on catches which has been heavily impacted by the worst El Nino since Reports out of Taiwan indicate their catches down by as much as %. Prices are very firm and it looks as though it could stay this way through the start of the fall season in Oct. Mussels Costs have softened slightly and are expected to maintain at this level through the fall. Demand has been strong Oysters Oysters at the moment are short. Some say they are finally seeing some adverse results of the BP oil spill some time ago. That along with the salinity of the water have affected reseeding. We are hopeful to increase supply to keep up with demand. Perch & Walleye Both the walleye season and the perch season for 2017 have begun in May. There was an increase in the perch quota so there has been some softening of cost overall. The walleye quota has remained stable and costs should be stable. Overall supply should be adequate on both for the balance of the year. Pollock - Pacific (2x Fzn) Rumors of past season raw material in the market is depressing the market. Salmon-Keta Inventory is tight. Expect portion prices to continue to increase. Salmon-Pink Demand continues to be steady. Year to date pricing has remained relatively stable Gordon Food Service 4

5 Salmon-Sockeye Demand continues to increase. All salmon species report high prices relative to historical terms. Prices are projected to increase 15%-20%. Salmon-Coho Demand has exceeded supply in the market. Many producers report sales doubling in the last 10 months. prices are now up to historical highs along with other salmon species. Scallops Since the start of the scallop season this spring we have seen softening on costs which is normal to begin the season. However there has been an increase on the quota for the 2107 fishing season as well which will continue to impact supply and cost for the summer. Sea Bass Product is still short on the market overall and costs have remained firm.. There is a significant amount of pressure for sea bass to ship to Asia and the US is forced to pay for a higher cost of goods due to this demand. We do not expect much relief on this commodity for some time. Shrimp - Asian Black Tiger Black Tiger shrimp remain in short supply globally. Limited raw material availability paired with strong demand from Japan has resulted in shortages across most sizes and an ongoing increase in prices overseas. Shrimp - Asian White The white shrimp market has been on the rise for the last month and a half. Production has been good, but demand has been very strong. This is likely because of the limited availability on black tiger shrimp as well as currency movement globally. Larger sizes are the shortest (specifically 13/15 PDTO) with limited raw material available with good demand. Shrimp - Domestic Peeled (PUD) Domestic shrimp landings have started out good and as such pricing has softened. Most sizes are readily available and good values are out there on raw material. Shrimp - Domestic Rock & Pink Rock shrimp remains short. There is potential for more to be caught in the fall, but fisherman will only target the species if they are having success. Pink shrimp remains a very good alternative to rock shrimp and is readily available. Shrimp - Domestic White & Brown Headless Domestic white shrimp prices have softened on larger and smaller shrimp, while pricing on middle sizes (21/25, 26/30, 31/35) have stacked up due to limited catches year to date. We will continue to see downward pressure on these prices because of the value found in larger shrimp. Swai Raw material tight and prices expected to continue upwards. Tilapia Raw material tight and prices expected to continue upwards Gordon Food Service 5

6 Tuna - Frozen Tuna prices are expected to soften going into the summer season. Supply has been adequate with good demand Tuna - Canned Low catch numbers reported for skipjack and yellowfin. Challenges in providing traceability for raw material is also driving tongol and albacore prices up. Whitefish Steady supply, stable cost. Dairy Dairy Category Last Week Current Week Block Cheese Up Up Barrel Cheese Down Up Butter Up Up Large Eggs Up No Change Medium Eggs Up No Change Small Eggs No Change No Change Cheese The CME Block and Barrel have been very active with the amount of trades this week and has not fluctuated as much as it could. Speculators feel the markets are at a good value and that in the short term there is more pressure on the downside then the upside.. Eggs Retail demand fair to fairly good. Supplies of extra large available. Large & mediums adequate. Market steady. Butter Butter production is still active across most of the U.S. over the past few weeks. Some manufacturers are slowing to better manage inventories as demand becomes mixed and pricing continues to rise slightly Gordon Food Service 6

7 Grocery & Bakery Wheat Canadian wheat plantings are likely to be reduced by wet, cool weather in Alberta. Winter wheat harvest is underway, with early reports suggesting protein levels are lower. Supplies of the high protein (gluten) wheat needed for pizza flour are relatively tight, which is supporting prices. High-Gluten Flour Semolina Pasta Flour Current Week Up Flat Next Week s Projections Flat Flat Soybean Oil The latest USDA survey shows soybean planted acres are on track. Soybean oil futures followed petroleum prices down reflecting lower breakeven prices for biodiesel. Current Week Next Week s Projections Soybean Oil Down Down Sugar The market is waiting for the outcome of trade talks with Mexico. If an agreement is reached and Mexican imports resume, cane sugar prices will go down. Failure to reach an agreement may reactivate anti-dumping duties and push prices higher. Current Week Next Week s Projections Sugar Flat Flat 2017 Gordon Food Service 7