Gordon Food Service Market Updates for October 26, 2018

Transcription

1 Gordon Food Service Market Updates for October 26, 2018 Dairy Cheese The CME Block and Barrel markets have been soft due to supply over demand.speculators feel this soft market will be around due to the current environment and does not look like it will change drastically in the short term. Last week: Block- Down Barrel-Down This Week: Block- Down Barrel-Down Dairy Eggs Retail demand improving. Supplies held confidently. Market steady to at times full

2 steady. Last week: Large - Down Medium - Down Small - No Change This Week: Large - Up Medium - Up Small - No Change Dairy Butter The Holiday pull on butter appears to have begun and inventories are beginning to dwindlea bit.manufacturers are working to match orders against production to keep the balance.spot and futures pricing are down slightly indicating that there should be ample inventories to meet Holiday demand. Last week: Butter - Down This Week: Butter - Down Grocery & Bakery Wheat Abundant supply of high quality wheat pressured cash prices lower, allowing millers to shave a pennyor so off flour prices. Until exports pick upcash wheat prices will remain soft.

3 Grocery & Bakery Soybean Oil Soybean oil prices arenear the middle of the USDA's $0.28-$0.32/lb projected range. Canola oil prices are commanding unusually high premiums as China switches imports from US soybeans to Canadian canola seed. Grocery & Bakery Sugar Open weather has allowed harvest to resume. Pricing has been flat for both beet and cane sugar. Meat Beef The latest USDA survey of cattle on feed surprised the trade with lower-thanexpected placements. It appears that lighter weight calves were placed on feed this summer when pastures dried up, leaving fewer to place this fall. This could be an indication that once the crop of cattle in feedlots is marketedfed beef supplies could tighten up in Ground Beef: Ground beef prices hit 5-year lows and bounced. Cow kills are still large, but have moved closer to last years levels. Packers are asking higher prices for forward sales. Ribs: Ribeye prices jumped earlier than normal and have reached the highs of the last three years five weeks ahead of schedule.. Briskets: Brisket prices have strengthened with both spot and forward prices up from last week. Rounds:

4 Prices have leveled outfor now. Retail features should wind down in the next few weeks, which could allow prices to ease back. Strips: Prices have leveled out with larger volumes trading at steady money. Tenders: Tender prices are now at their high for 2018, but are still $1/lb under the 2017 high. Thin Meats: Ball tip prices are back down to average price levels; flank and skirt prices are trending to normal levels for this time of year. Meat Pork Pork production hit a new all-time record last week refilling the pipeline and pressuring prices lower. Butts: Butt prices are getting close to summer lows as additional production looks for a home. Hams: Ham prices are at thelows that triggered Mexican buying in early September. Supplies appear to be cleaning up. Bacon/Bellies: Belly prices seem to be stalling as greater availability turns buyers cautious. Ribs: Rib prices are back to where they were this time last year. Demand for freezer programs is good.

5 Loins: Boneless loin prices remain high as retailers pull product for ongoing features, bonein loins are drifting back to 2017 levels. Poultry Chicken Frozen inventory increased another 4% in September and is now 17% above last year. Local freezers are often out of space leaving processors with few options other than selling production fresh. Discounts are accepted to get the order. Breast and Tenders: Breast meat and tenders are selling at deeper discounts than last week. Wings: Jumbo and medium wing prices are mostlysteady; small wings are getting harder to find. Dark Meat: Dark meat sales have been a mixed bag, with drumsticks and leg meat widely discounted. Thighs and thigh meat are in better balance. Leg quarters are backing up. Poultry Turkey Frozen whole turkey prices are flat as we approach Thanksgiving - frozen inventories are even with last year. Frozen bone-in breast prices are up - frozen inventories are down 14% from last year. Seafood Finfish Cod, Alaskan 1x:

6 Supply remains tight and costs are firm, this is partly due to decreased quota in other regions of the world. Expect this toremain this way through the end of the year and going into Lent No major changes to report from previousmonths Cod, Atlantic 1x: The 1x frozen Atl. cod loins are firmon costs withthe announcement of a 25% reduction on quota compared to2017 out of the Newfoundland and Labradorregions in Canada. Inventoryhas been ramped up to cover increaseddemand on all sizes but the smaller sized4 oz have been harder to comeby due to larger fishbeing processed. Supply on all sizes is expectedto remaintight and costsfirm potentially through Lent. N Atlantic shatter-pack cod isfirming as well with limited supply expected at least untilfebruary when the Russian and Norwegian seasons resume. 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: Costs on 1x fzpollock currently are stable and supply is plentiful as we are working throughtheb Pollockseason this fall. Many anticipated with the rising cost of Cod that Pollock would be the next lower cost option.for the most part that "switch" has not materialized to the degree first thought. Pollock, Pacific 2x: Slight firming of pricing. Starting to see substitution demand from cod users. Haddock:

7 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: As we enter the fall fishing season the bulk of the walleye comes out of the water over the next few weeks. Depending on the size of fish harvested we should be in stock on all sizes as the fall fishery gets rolling. Todate prices on both perch and walleye have been steady. Expect slight increase as we begin to wrap up supply for the winter months.quotareports from the end of Augustindicatethat 65 % of the perch quotahadbeen caughtand 55% of the walleye lake wide. The whitefish harvestresumed in September and then will wrap up with the extended Native American fishing season to mid November. As supply becomes more readily available we should be in stock on all sizes. Note however, whitefish costs are firming due to shorter supply overall. Euro Lake Fish & Zander: Supply is good and costs have been stable with only minoradjustments to market.this is a more cost effective substitute for the higher priced domestic lake fish items where applicable. Mahi Mahi: Mahi Mahi costs are softening as we enter the fall and the Peruvian fishing season is just getting underway. To date there is no indicationof whatthe new 2019 seasonprices will be. Many report extra inventoryin both the states and processors overseas so it will take a few weeks to determine where the market will end up based on supply and demand. Frozen Tuna, Swordfish : The peak season in Vietnam for tuna ended in July. As landingsdropped offcosts have startedto increase. This hasbeen attributed in part to the newiuu fishing regulations forcing more plants to compete over limited amounts of local raw material. The Indonesianseason is at its end. Combined with soft Vietnamese production, prices remain elevated out of this region as well.thailand has yielded limited supply as most long-line boats are fishing in Sri Lanka now that they are

8 green listed with the EU. Prices have substantially increased on Swordfish from Indonesia, high demand from the European market and stricter regulations are the main cause. Demand remains strong from both retail and foodservice customers 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 good on small and middle sizes. There are shortages of large sizes due to limited production (2-4 through 13-15) and heavy demand. Imported White: White shrimp supply is somewhat sporadic with shipments being late due to heavy demand overseas. Market values are good and offer great opportunities to menu shrimp this summer. Expect supply to be better as we roll into the late summer months as production catches up. Latin White: Latin White shrimp are firm with replacement prices firming. Supply is good for the time being. Domestic White & Brown: Domestic Brown shrimp are steady in price as we roll into the new season for Texas. Larger sizes of white and brown headless shrimp should begin to land over the next few months.

9 Domestic PUD: Domestic PUD production has slowed on smaller shrimp. While boats begin to target larger whites and browns where available, we should see better production in larger and middle size peeled shrimp. Domestic Rock & Pink: Rock & Pink shrimp are both in good supply. Seafood Lobster North Atlantic: Lobster tail costs have started to firm as of late as the Maine season was not as productive as first anticipated due to poor landings. Meat prices have been soft overall but many feel the bottomof this market has been met and expect the meat pricesto start to increase soon as well.there is no indication that the new 10 % tariff has impactedoverall supply as a goodportionof lobsters are already sold intocanada to be furtherprocessed and the bulk sold to China is whole live. For now supply is adequate with a firm undertone on cost. Warm Water: Supply has been short on warm water tails with inventoryjust startingto rampup slightly after a late start to the season. Poor catches, increased demand out of Asia and retailers taking a stronger positionon the markethave resulted in a firm undertone. Seafood Crab Snow Crab: The global shortage of snow crab will continue throughthe fall. Alaska did announce their recent findings on their biomass survey of the Bering sea and the resultsare favorable for more quotafor this regioncome this winter.the survey showed a 60 percent boost in market sized males and nearly the same for females. To date prices have leveled off on Canadian crabon the larger 8 and 10 up products

10 withlimited offerings. However the5/8 size hascontinued to soften. King Crab: This market has remained unchanged in regardto supply Smallerking crab sizes remain very tight, especially on 14/17 ct, 16/20 ct and 20/+ ct. Thesethree sizes haveseen the biggest issue with availability and as a result costs are firming.they are still fishing for Russian crab but most is movingthroughtheasian market causing somedelays on containers. We do not expect any relief on supply for months to come as the recentannouncement outof Alaska was not positive. For red king crab at the eastern portion of the Bering Sea more commonly called Bristol Bay, numbers of mature males dropped more than 40 percent from last year and mature females were down 54 percent. Buyers need to consider gold king crab as a viable optionfor the 2019 season. Red Swimming Crab: A new 10% tariff on all seafood items should go into effect in August. The market is still uncertain however, between high market prices, and limited supply, cost might go up. This coupled with the void in the market on red swimming crab only strengthens this possibility. We are still expected to start receiving shipments on red crab in October. The main crab harvest is October December. Blue Swimming Crab: Prices are still high with great inventory. There has been a slight decrease in pricing from Indonesia while Philippines and India move up to be more in line with Indo. For the next days prices will stay level to a possible dip however, Q4 is expected to pick back up. With the red swimming still high with limited supply, this too drives the price up. Overall prices will come down a bit. Seafood Scallops

11 With increasedquotathis season and more open areas to fish...costs have decreased for the first time in several years. Supplyhas been more readily availablein the larger sizes. As we enter the fall and the season starts to wrap up, expect costs to start to firm for the winter months.