Beef prices continue to be well supported by declining slaughter weights & strong domestic demand for product. The USDA’s National Comprehensive Cattle report has shown weekly YOY weights declines for twenty consecutive weeks. U.S. demand has been supported by a resilient University of Michigan Consumer Sentiment Index as well as a strong YTD gains in the S&P 500. The most recent USDA Cold Storage report showed Bone-in beef inventories as of 12/31/2018 at 33.5 million lbs., a decrease of 17.9% from last year. Packers have been reported to be holding firm on middle meat prices given lower-than-expected supplies.
Ribeyes: Ribeyes prices continue to carry a strong tone into March. Any signs of moderating weather will provide additional support to ribeye prices in March. Short Term: Firm pricing.
Strips: Strip prices will be well supported by normal seasonal increases in March further helped by increased competition for supplies. Short Term: Firm pricing.
Tenderloins: Prices have a more neutral tone as expected seasonal price increases have yet to materialize but we should see firming prices soon. Short Term: Steady pricing.
Tri-Tips: Sideways market as supply & demand appear to be in good balance. Short Term: Steady pricing.
Top Butts: Prices should remain in a narrow range in the near term. However seasonal prices increases can be expected into March-April. Short Term: Steady pricing.
Briskets: Buying interest ahead of St. Patrick’s day along with increased demand should keep prices supported over the next week. Short Term: Firm pricing.
Flap Meat: Prices have been trading near their 5-year average for this time of year and will continue to be rangebound in the next few weeks until seasonal demand from Foodservice picks up later in the month. Short Term: Steady pricing.
Skirt Meat: Featuring decisions made by retailers may provide seasonal support later in March. Short Term: Steady pricing.
Inside Rounds: Prices have taken on a more bullish tone this week and are expected to follow their normal seasonal increase in March. Lower than expected production will also be supportive. Short Term: Firm pricing.
Ground Chuck: Ground Chuck prices will be supported by increased demand for grinding meats in the face of lighter cattle slaughter weights. Short Term: Firm pricing.
81/19 Ground Beef: Prices for grinding meats have take on a bullish tone this week due to stronger Foodservice demand and more moderate supplies due to lower dressed cattle weights. Short Term: Firm pricing.
Chick placements continue to remain slightly (1.3%) above last year. Average live weights of processing chickens continues to lag year ago mostly due to weather as growers are leaving birds on the ground longer in the hope of bringing up processing weights. Manufacturers have experienced downtimes due to weather and supply of birds to process.
WOG’s: This week WOGs are beginning to see some slight strength as processors are getting a bit bold in their asks. Short term: Firm pricing.
Breasts / Tenderloins: The boneless breast market is starting to show some strength after a brief pause. This is in line with historical trends and will likely continue. Tenderloins are showing a tightness of supply as fast food demand is increasing. Short term: Firm pricing.
Wings: After several days of weakness, the wing market took a slight jump upward. It appears the supply is tight and is reflecting the slight increase. Short term: Firm pricing.
Thighs: Dark meat markets are moving up as there is a tight supply and buyers both domestic and export are looking for product. The back half of the bird has shown energy to move the past couple of weeks. Short term: Firm pricing.
Turkey Whole Birds: There was little change this week with whole bird prices looking to be slightly higher in 2019 but may moderate after the major retailers come into play with holiday bookings. Short term: Steady pricing.
Turkey Breast: Fresh turkey breast meat moved slightly lower for the first time in several weeks. This looks to be driven more by a mediocre market demand than supply and demand trends. Short term: Steady pricing.
While U.S. pork production has moderated over the last week, YTD production is still running at an estimated 2.4% ahead of last year’s pace. Declining prices over recent weeks appear to have finally been met with buying interest both domestically and overseas. The trade will also be closely monitoring US/China trade progress. Recent packer trading has been described as “unsettled,” potentially leading to supportive bids from buyers of hams and bellies. African Swine Fever Update: China has reported an additional outbreak of the fever effecting over 3,000 animals, We will continue to monitor the effects of the disease on domestic markets.
Bellies: While March is normally a period of weak demand for bellies, the market has been steadily stronger as menu placements and mentions continue strong. Short term: Firm pricing.
Loins: Prices have taken on a more neutral tone this week as disappointing export demand is offset by normal seasonal increases in demand for the month of March. Short term: Steady pricing.
Ribs: Prices will continue soft due to burdensome supplies: the most recent USDA Cold Storage Report had supplies at 12/31/2018 coming in at 15% higher than the previous month and 19% higher than prior year’s level. Short term: Lower pricing.
Butts: Prices have strengthened over the past several days as recent lows have sparked buying interest. The recent Cold Storage reports supplies have dropped from the prior month as well as the previous year. Short term: Firm pricing.
Hams: Stronger pricing over the last several days should continue as historically weak prices have sparked increased demand from both Mexico and overseas export destinations. Hams in Cold Storage as of 12/31/2018 were 24% lower than the previous month and 10% lower than the same time one year prior. Short term: Firm pricing.
Warm Water Lobster: The market is strong and prices remain firm and will remain in short supply until the new season begins this fall. Demand remains active and there is a shortfall in supply. Short Term: Prices firming.
Cold Water Lobster: No changes were recorded from last week. Market remains firm and demand is active. Supplies remain limited, especially on the larger sized tails. Short Term: Steady pricing.
Live Lobster: No change was reported from last week but the undertone is full steady to firm; inventories are short for an active demand. Short Term: Steady pricing.
Canadian Snow Crab: 5-8 market prices (Newfoundland and the Gulf) have adjusted higher and are barely adequate supplies for a moderate to active demand. 8/up and larger are almost non-existent. Short Term: Firming Pricing.
King Crab Legs: The market remains firm and prices are strong on both Red and Gold King Crab. Supplies are light for an active demand. Short Term: Firming Pricing.
Ahi/Yellow Fin Tuna: Domestic market is stable and product is available. Demand has increased specifically on poke cubes and blocks as popularity grows. Short Term: Stable pricing.
Pangasius / Swai / Basa: Market has shown some softening as more inventory becomes available. Supplies are fully adequate for a lackluster demand. Short Term: Stable pricing.
Atlantic Salmon: The fillet market remains steady. Inventories are available to supply the Lenten demand. Short Term: Stable pricing.
Mahi Mahi: Market prices have reversed and trended higher as demand has increased.
Catfish Fillets: Import prices are slightly up but much of the 10% tariff was absorbed into the market. No change has been reported. Demand remains stable to flat. Inventory is available. Short Term: Stable Pricing.
Blue Swimming Crab: Supply is fully adequate for seasonally quiet demand. The market is barely steady to weak.
Farmed White Shrimp: The market on raw shell on and peeled is steady to firm as we move into lower supply period in SE Asia.
Farmed Black Tiger Shrimp: Black tiger shrimp 13/15 and Larger are firm in price. 21/25 & smaller show some softening as demand is less than supply.
Wild Gulf of Mexico Shrimp: Very large HLSO shrimp are in short supply, and smaller sizes in normal balance. There’s not much changing in the region amid the seasonally slow effort. Market conditions remain the same.
Atlantic Cod: Once frozen Iceland- Overall the cod stock is good but fishing so far has been slow for frozen portions to the U.S. market. 8 oz cod loins are tight but sizes below this are ok. Pricing has firmed to get production. A-cod twice frozen from China- Fishing has been good with prices holding firm or slightly increasing. Challenge for loin cuts is the fish being caught are large and this expected to continue.
Pacific Cod: Fishing has been steady. Prices are holding firm or slightly declining. Expect this to continue in the short term. All size loins are available.
Pollock: Single frozen pollock fishing has been good in the A season. Prices are up 8-10% over prior year, this is due to strong demand globally and expected to continue in the short term. Twice frozen China – pricing pressure is upward due to the single frozen market being up. Supply on 4/6s is on the tighter side.
The macro theme of large inventories in the dairy market has not changed as production rates are elevated across most products and milk/cream availability is more than adequate. However, expectations for the slowest YOY increases in U.S. milk output since 2009 helping to underpin prices somewhat. Given cheaper milk prices, feed costs will be crucial to farmer margins (further consolidation) as we head into the key planting season.
Milk / Cream: Prices are steady across milk and cream as production has remained strong despite some colder weather in the northern U.S. Ice cream production has started to pick up some, but cream availability is sill plentiful in all regions.
Butter: Butter prices were firm early in the week before the high prices shut off incremental demand and prices set back. With elevated churn rates and plenty of butter going into cold storage, expect prices to pull back slightly this week.
Cheese: Block prices are in consolidation mode near the recent highs while barrel prices are slightly stronger. Production remains at or near capacity throughout the country due to excess milk availability, and inventories are still large.
Shell Eggs: Prices have been grinding lower in all regions as production has ramped up for the spring holidays but demand has yet to respond given it’s still too early for stockpiling. Should start to stabilize/reverse in the next week or 2 as seasonal demand kicks in.
Grain & Crop
Grain markets have been on the defensive over the past few weeks as the trade attempts to digest a potential U.S. – China trade deal this month, limited wheat export demand, and the upcoming planting intentions report on March 29th. Currently there is very little risk premium built into prices with the whole growing season still ahead.
Soybean Oil: Prices have been leaking lower the past few weeks, but strong demand from biodiesel, uncertainty around U.S. – China trade, and seasonality should limit further downside moves.
Canola: Canola seed prices made new contract lows again last week on the outlook for increased global production and stocks. This has helped to keep pressure on canola oil prices as the crush margin structure has improved.
Palm Oil: Prices are consolidating neat the recent lows as Malaysian exports were down 15.3% in February and the market as a whole continues to struggle with burdensome stocks.
- Rain continues to impact the major California strawberry growing regions
- The Florida season is past peak production; most Mexican suppliers have ended harvesting for the season
- Supplies will remain limited over the next two weeks
- Prices are rising
- Temperatures have risen in the Arizona/California desert growing region, increasing yields
- While demand is slightly down this week, inventories are snug
- Elevated markets are forecast through the transition north to the Salinas Valley
Green Leaf, Iceberg, and Romaine
- Temperatures are inching up in the Arizona/California desert growing region, promoting crop growth and increasing supplies
- Expect prices to fluctuate as suppliers transition north to the growing regions of Huron and Salinas, California over the next four to six weeks
- Markon anticipates quality to improve and weights to increase in late April
- Prices are easing
- Mexican lime shipments into the U.S. are down significantly; supplies are extremely limited
- Rain slowed production in the growing region of Veracruz, Mexico earlier this week, further depleting volume
- Prices are escalating
- Mexican production is below-normal due to cold weather and transitioning crops
- Florida supplies are low this time of year due to strong Mexican presence on the tomato market
- Tight stocks are expected for the next two weeks
- Roma and round tomato prices are climbing for all sizes
White Russet Potatoes
- The crop profile is comparable to the conventional Burbank crop
- Size is dominated by 80- through 120-count potatoes; ordering 40- through 70-count stocks requires more lead-time
- Production is limited; for consolidation in Idaho Falls, orders must be placed 48 hours in advance
- Supplies will be shipped through July without any further gaps
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