Market Outlook

June 7, 2024
  • BEEF
  • POULTRY
  • PORK
  • SEAFOOD
  • DAIRY
  • GRAINS & OILS
  • PRODUCE
BEEF

BEEF

Prices will continue to strengthen over the next several weeks due to seasonally stronger demand as production moderates as well. Retail demand will gain steam as buyers build inventory for Father’s Day and Fourth of July. While there will be some trade down by consumers to lower value beef items, overall demand will continue to hold up even in the face of high inflation and macroeconomic uncertainty. Foodservice demand will continue to be challenged by lower transactions at restaurants, the impact of value initiatives are in the works to bolster demand. Supplies will begin to be pressured by lower slaughter rates in coming weeks, though this slowdown will be partially offset by dressed weights that are running about 30 lbs. higher than normal for this time of the year. The U.S. will continue to be a net importer of beef in coming months, however that pace of imports will moderate due to slowing availability.

higher
Ribeyes:

Prices will continue to show a firm tone in June, falling in line with seasonal price trends. Ribeyes currently represent good value relative to other middle meats, which will keep demand strong through at least the end of June.

higher
Strips:

Prices will maintain a strong tone over the next several weeks, respecting seasonal trends in the face of relatively tight supplies. Demand for Strips has developed well at retail, which will keep prices supported through the end of the month.

higher
Tenderloins:

Prices will maintain a firm tone in June, falling in line with seasonal trends for the month. Retail buyers will continue to take on an active purchasing bias, keeping prices supported.

steady
Tri-Tips:

Prices have shifted to a more balanced tone in June, defying the strong seasonal trend for values to firm during the month. Retail demand has been slower to develop for the current grilling season, keeping prices more balanced than in prior years.

higher
Top Butts:

Prices will continue to take on a firm tone through the end of June, resisting the seasonal trend for values to soften in June. Consumers will continue to favor value beef items outside the ground beef complex, keeping prices for Top Butts well supported.

higher
Briskets:

Prices will maintain a strong tone through the month of June. Retail demand for Briskets will be supported by expanding Foodservice demand for regional and national LTO’s/promotions.

Lower
Flap Meat:

Prices will take on a softer tone in coming weeks, respecting the seasonal trend for values to moderate after Memorial Day. Foodservice buyers will be less active in coming weeks, putting more loads of product to be absorbed by other sales channels.

steady
Skirt Meat:

Prices will shift to a more moderate tone in June, even though seasonal trends call for stronger values for the month. Retailers will continue to feature Skirt Meat at very modest levels, keeping prices more modest for this time of the year.

steady
Inside Rounds:

Prices are set to hold steady over the next several weeks, falling line with seasonal price trends. Demand from domestic channels will be firm in coming weeks, but supplies will be sufficient to keep prices in balance.

higher
Ground Chuck:

Prices will shift to a strong tone in June, largely respecting seasonal trends for the month. Demand for Chucks from consumers trading down from higher value beef items will remain strong, keeping prices firm.

higher
81/19 Ground Beef:

Prices will continue to show a strong tone over the next several weeks, falling in line with seasonal price trends. Lean trimmings prices remain at record levels, which will keep prices supported in the face of growing retail demand.

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POULTRY

POULTRY

This week’s tone aims to encapsulate the relative strength which continues to permeate primarily in the chicken wing complex. Although other lines such as boneless breasts, and even WOGs and legs are beginning to experience various degrees of downward price pressure, the wing corner of the market remains insulated from seasonal headwinds. This also shines light on sell-side sentiment and strategy. Despite the rock-solid status of the wing sector at the moment, this uncharted seasonal path has left players taking a day-by-day and, perhaps, “improvised” approach to spot negotiations.

steady
WOG’s:

WOGs are working under a mixed backdrop. Those with small (3lbs/down) and large (4lbs/ up) birds enjoy a balanced set of market conditions with paid prices situated within a narrow range of values. Conversely, production that falls into the 3-4 lb. weight categories proves at least adequate in matching a moderate level of buying inquiries. This scenario has caused some players to entertain slightly lower bids, albeit in low volumes. Elsewhere, bone-in breasts and front halves are both well-supported thanks in large part to consistent domestic demand along with a recent uptick in export-facing throughput. Some sellers evaluate the willingness of buyers to fork out a penny or two above the market.

steady/Lower
Breasts/Tenderloins:

Turning to boneless breasts, jumbo-sized offerings come in softer in response to satiated food service, distributive, and further processing demand. Retail demand ranges from fair to moderate, with many sellers regarding this channel as the most reliable here at week’s end, allowing buyers to bargain at a significant discount. Select-size boneless breasts are well-accounted for and termed as steady. Tenders change hands at not less than full market value. Some players paint a slightly stronger picture to this line than others. All in all we term tenders are at least steady pending additional input.

steady/higher
Wings:

The wing complex remains short against a seasonally-active, and somewhat atypical, early-June draw. Heightened bids are slow to pull additional offerings onto the street.

steady/Lower
Thighs/Legs/Leg Quarters:

As for the back half of the bird, the backdrop hasn’t shifted all that much from recent assessments. Legs are perhaps one exception to this rule. While ongoing price sensitivity and lower-trending bids are evident, other players find a sustained level of buying interest at stable, but not necessarily stronger, price points. Leg quarters are balanced, while thighs and thigh meat both change hands at a premium relative to our quotations. Drumsticks and leg meat also garner some additional buying interest which helps to inspire additional confidence in the minds of some sellers.

steady
Turkey Whole Birds:

New HPAI concerns are making the rounds as news of Turkey farms were affected last week. Most of the concerns are squarely focused on chicken operations and despite the news, turkey prices have remained largely flat. A risk premium wouldn’t be out of the cards for Turkey, and the probability of that increases on any AI news in areas which have an abundance of Turkey operations. In the near term, prices are likely to stay flat or rise slightly.

steady
Turkey Breast:

Breast markets will remain steady, and follow along the trajectory as the underlying Whole Bird Market.

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PORK

PORK

Prices will continue to take on a steady tone overall as demand overall remains in balance while pork production begins to track higher year-on-year. Retail demand for pork will remain strong as the lift due to grilling demand will be enhanced by trade down from higher value proteins. Pork items heading into Retail channels continue to show very good demand while demand for processed items going into Foodservice will continue to face headwinds due to foot traffic in many dining segments. Pork supplies will benefit in coming weeks from a 1-2% increase in market hogs as compared to last year while at the same time dressed weights remain higher year-on-year. Sales to export market will, on balance, be supportive to pork prices as U.S. prices remain competitive on the global market.

steady
Bellies:

Prices will continue to take on a balanced tone in coming weeks, even though the seasonal trend is for values to strengthen. Retailers will feature bacon at more modest levels in June, keeping prices more measured this year.

higher
Loins:

Prices will continue to show a strong tone in coming weeks, falling in line with seasonal trends. Strong demand from both domestic Retail channels and Asian export markets will keep prices supported.

Lower
Ribs:

Prices will shift to a softer tone over the next several weeks, falling in line with seasonal price trends for the month. Foodservice demand will face headwinds due to lower traffic counts while supplies of available product will gradually increase.

steady
Butts:

Prices will take on a steady tone in coming weeks, even though seasonal trends call for a firm pricing bias. Slower export buying interest for Butts and better year-on-year production levels will keep prices more moderate.

higher
Hams:

Prices will continue to take on a firm tone in June, falling in line with seasonal price trends. Demand from domestic retailers will remain exceptional, keeping prices well supported.

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SEAFOOD

SEAFOOD

Seasonal changes and yields are effecting the seafood outlook.

steady
Farmed White Shrimp:

Reactions to the DOC’s preliminary determination in the antidumping duty (AD) investigation of frozen warmwater shrimp from Ecuador and Indonesia were mixed. There’s no discernable pattern that has developed. Despite higher cost of goods, the current economic environment continues to weigh on the largest sizes of shrimp. We saw discounting in both large headless, shell-on and large P&D shrimp.

Lower
Farmed Black Tiger Shrimp:

The weak spot market continues to be well supplied on larger RHSO, but the balance of sizes are full steady to firm given ongoing supply concerns.

 

Lower
Wild Gulf of Mexico Shrimp:

Fishing is done. The market remains wildly unsettled.

higher
Warm Water Lobster Tails:

Currently, all spiny lobster seasons are closed. Bahamas and Florida will reopen in the first week of August. The market has been shaken due to horrendous weather conditions. Both prices and catch weights are off considerable at this point of a new season. Short Term: Steady Pricing, trending to firm.

higher
North American Lobster Tails:

In Canada and Maine, the cold water lobster fishing season is currently open. As a result, it is anticipated that prices for both lobster tails and meat will undergo a decrease as availability improves from historically tight levels. That is, if catches hold up to expectations. In lieu of early landings, prices will remain firm. Short Term: Firm Prices

higher
Lobster Meat:

In Canada and Maine, the cold water lobster fishing season is currently open. As a result, it is anticipated that prices for both lobster tails and meat will undergo a decrease. Consequently, we intend to procure the product once prices stabilize. Short Term: Firm Prices

steady
Canadian Snow Crab:

Sizes 5-8 from Newfoundland are seeing slight downward price adjustments. The market is mostly steady to weak due to the current surplus in supply compared to demand. The rest of the Newfoundland market remains relatively stable. In the Gulf, crab prices remain unchanged across all sizes. Short Term: Steady Prices

steady/higher
Ahi/Yellow Fin Tuna:

Raw material prices have seen a significant increase due to a decline in domestic supplies. With new shipments entering the market, it is anticipated that prices will resume their upward trend. Currently, we offer a wide range of sizes suitable for both food service and retail purposes. Short Term: Steady Pricing domestically with slight increases overseas.

higher
Pangasius/Swai/Basa:

Certain packers are facing constraints in acquiring smaller size fillets do to farmers’ delayed restocking of ponds. Consequently, prices for smaller fillets are marginally higher compared to larger ones. Additionally, prices have surged due to increases in raw material costs and freight charges. Notably, freight prices for MSC have more than doubled compared to previous weeks. Nevertheless, we presently maintain ample availability across all sizes, catering to both foodservice and retail sectors. Short Term: Prices are increasing.

higher
Keta Salmon:

The market for Keta Salmon remains firm with the USA’s expanded ban on Russian seafood processed in other countries. Replacement product will be arriving early June, and pricing action will be reflective of those arrivals. Short Term: Price increasing

higher
Chilean Salmon:

Supplies are adequate to fully adequate amidst a moderate to fair demand. Offers continue to fluctuate from seller to seller. The undertone is somewhat unsettled with offers ranging both above and below current quotations. Short Term: Firming Pricing

higher
Norwegian Salmon:

Supplies are adequate to fully adequate amidst a moderate to fair demand. Offers continue to fluctuate from seller to seller. The undertone is somewhat unsettled with offers ranging both above and below current quotations. Short Term: Firming Pricing

higher
Tilapia Fillets:

Currently, the market remains steady, even though the rising expenses of bringing in replacements are impacting the local market. The decrease in direct sales from farms to consumers has caused a drop in supply, resulting in higher prices overall. Nevertheless, there’s still enough inventory available for all fish sizes. Short Term: Prices increasing

steady
Blue Swimming Crab:

The market for blue swimming crab meat continues full steady on colossal and jumbo lump as supplies of these sizes are adequate to barely adequate and higher offers are noted. Special and claw, on the other hand, are about steady to barely steady with a few lower offers noted. The remainder of the market is unchanged. Overall, mid-to-smaller sized crab offers range widely from seller to seller as individual inventory positions vary.

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DAIRY

DAIRY

Milk output is starting to roll over from its spring flush highs across the country, with the Midwest noting steady to lower output this week.

The shell egg market found further support this past week as 5.66 million layers were impacted by HPAI outbreaks in Minnesota and Iowa.

steady
Milk / Cream:

Milk output is starting to roll over from its spring flush highs across the country, with the Midwest noting steady to lower output this week. The Southern most states have noted flat to lower output in recent weeks, while warming temps across the country should shift seasonal trends lower. April’s milk production report showed a YOY decline of 0.4%, the smallest YOY decline so far this year. Spot loads are still trading at discounts to class, helped along by declining Class I demand as summer breaks loom. The market continues to closely monitor the HPAI outbreaks in dairy cows, and the impact to milk supplies, with additional cases continuing to be reported. On a positive note, overall milk yields are still encouraging and 0.4% higher than last year. For now, there is still adequate milk availability, but concerns remain around summer supply. Milk components are still running strong, helping keep processors full, while cream supplies remain adequate for market needs.

steady
Butter:

The butter market noted further volatility this past week, but continues to trade in a sideways pattern. The bearish Cold Storage report last Friday initially pushed prices sharply lower before renewed bargain hunting on the setback drove prices back to calendar year highs. This buying interest may start to slow down given the USDA showed the strongest March to April build in butter stocks since the start of the COVID pandemic, pushing cold storage levels of butter 9.1% higher than last year. The USDA also reported April butter output was up 5.3% from the prior year and a new record for the month, with churns continuing to take advantage of available cream supplies. Further downside is still likely to be muted as any weakness in nearby prices has generated strong buying interest given end user sensitivity to record high prices paid each of the last two years. However, seasonally strong churn rates and the rebuilding of cold storage levels in the U.S. should limit just how expensive better needs to be at this time of year. Longer term, the much earlier than normal stockpiling interest is a headwind to lower prices, but if supplies continue to build to more comfortable levels the next few months then we may not need a retest of the highs from the last 2 years.

steady/Lower
Cheese:

The cheese markets continued to give up some of their recent increases this past week, with both blocks and barrels moving lower. The slower production of American style cheese so far this year, and firm exports, has created some tighter fresh cheese supply (which trades on the CME) and why prices moved sharply higher into mid-May. However, the rally in cheese prices is now diverting more milk back into the American style production and shutting off additional export demand which should help push prices lower. The USDA showed all cheese output in April was 1.8% above last year, while American style cheese remained lower YOY and down 4.7%. Even with the lower American cheese output, supplies are comfortable in cold storage, with the USDA showing the April American Cheese stocks up a seasonally normal 1.3% from March and only 0.3% below last year’s massive levels. Overall, cheese prices are running out of momentum at these loftier levels given demand remains mixed, production is seasonally ramping up, and large cold storage levels overhang the market.

steady/higher
Shell Eggs:

The shell egg market found further support this past week as 5.66 million layers were impacted by HPAI outbreaks in Minnesota and Iowa. With laying flocks already well below recent years, this further reduces that amount of shell egg supply that should be coming to market. When combined with end user stockpiling interest the past few weeks given the weaker prices from March, overall shell egg inventories have been counter seasonally declining. Shell egg inventories are currently 21% below last year. The large increases in price will likely start to ration additional stockpiling interest as we head into a seasonally quieter demand period for shell eggs. Until we see some improvement into the summer months the tight nearby supplies are supportive in the short term. Cage free inventories remain near last year’s levels while the market is still searching for its new value range while trying to maintain an appropriate number of birds in production to meet state mandates and more cage free demand. Cage free values should remain at a premium to conventional, and will be a follower to the conventional market in the short run.

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GRAINS & OILS

GRAINS & OILS

The overall grain and oilseed markets are steady to firm in the US as weather takes center stage. Overall ending stocks are still projected to increase again this upcoming season for corn, soybeans and wheat, but there is still a long way to go before those crops are in the bins. Prices remain supported as the planting season in the US nears completion and growing season risk will take center stage. The first condition rating for corn came in at 75% good/excellent and the best in 6 years. Spring wheat conditions also exceeded expectations, coming in at 74% and 4-year highs. Soybean conditions will be released next week, but the favorable moisture across most of the Midwest should encourage solid ratings. Drier conditions in the Black Sea are bolstering wheat prices as Russian crop estimates have moved lower while their domestic prices continue to move higher. US winter wheat harvest is underway in the S. Plains, with 6% of the crop harvested and early yield reports out of Texas and Oklahoma have been encouraging. Down in S. America, the Brazilian soybean harvest is nearing completion, while late season flooding has lowered overall production estimates. Slower farmer selling of beans in Argentina has pushed additional demand back to the US, but that is starting to wane. Overall US demand is still limited while weather is in the drivers seat nearby.

steady
Soybean Oil:

Lower energy prices and continued favorable weather in the US has kept the soybean oil market rangebound. Seasonally stocks decline from here into October, which should limit downside, while usage has been softer so far this year. There have been rumors that the current poor forward margin structure may limit the amount of renewable diesel build-out slated for the next 2 years.

steady
Canola:

The spot canola seed futures pushed back towards the recent lows this week given large old crop supply and better Canadian weather. Dry weather in the EU and Black Sea regions are still a concern for the rapeseed crops there and could spark additional export demand. Canola oil basis levels remained mostly steady last week but with a slightly firmer undertone.

steady
Palm Oil:

Palm oil futures are higher this week on improved demand, but are still well below the March highs. Last Friday, a private cargo surveyor put Malaysia’s May palm oil exports at 1.4 million metric tons, up 22.1% compared to April as the weaker prices of late have started to drive additional order interest.

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PRODUCE

PRODUCE

DOWNLOAD THE MARKON FRESH CROP REPORT

Lower
Asparagus:

Mexico

  • Total industry volume is increasing slowly, as the harvesting transition from the West Coast to Central Mexico continues
    • Lack of rainfall has delayed production in Central Mexico for 10-14 days
    • Sufficient numbers out of Southern Baja have helped to avoid any supply gaps
  • Size is evenly distributed
  • Markets are trending slightly lower amid weak demand and nearly abundant supplies

Other Regions

  • Peruvian stocks (imported to Miami) are available, production will be focused in the northern regions, as the southern hemisphere begins to enter the winter months
  • Domestic asparagus is shipping from California and the Pacific Northwest but both seasons are winding down
  • The Michigan and Canadian seasons have also started to see slight week-over-week declines as they are set to wrap up by late June/early July
steady/Lower
Celery:

Celery transition from Oxnard, California to Salinas, California is underway.

  • Markon First Crop (MFC) Celery is available
  • The Salinas season has started in a limited manner; volume will ramp up next week
  • Oxnard production will run through mid-June; Santa Maria, California harvests will continue year-round
  • Michigan production will begin in July
  • Quality is excellent in all regions; disease pressure is minimal
  • Expect steady to slightly lower markets in the coming weeks as the Salinas season ramps up
Green Leaf, Iceberg, & Romaine Lettuces:

Iceberg markets have peaked and are inching down. Green leaf and romaine prices continue to decline.

Iceberg

  • MFC Premium Iceberg Lettuce is available; Markon Best Available (MBA) is being substituted as needed due to low weights
  • Demand is weaker than prior weeks due to market fatigue
  • This week’s warm weather will promote growth in the Salinas Valley
  • Quality is good although head density and weights fluctuate throughout the fields
  • Markets are expected to be slightly lower, at elevated levels, for the next 7-10 days before decreasing significantly as supplies rebound

Green Leaf and Romaine

  • MFC Premium Green Leaf and Romaine Lettuces are available
  • Quality is very good; insect pressure and wind damage are being reported in some lots but are being removed at harvest
  • Green leaf markets prices are approaching the bottom
  • Romaine prices are expected to continue falling into June
higher
Lemons:

The 165- through 200-count lemon market remains elevated due to extremely low volume and strong demand. In early July, both offshore and Mexican lemons will supplement domestic supplies.

Domestic

  • MFC and Markon Essentials (ESS) Lemons are available
  • Small-size lemons (165- through 235-count fruit) remain extremely limited
  • Expect to make size and/or grade changes to help fill orders for small sizes
  • Elevated pricing is forecast for the next six weeks

Offshore

  • Offshore fruit will begin shipping in late June and run through early December
  • The size profile will be dominated by large lemons (95- through 140-count fruit) but smaller sizes will be available as well
  • Expect higher pricing compared to domestic and Mexican fruit due to high quality

Mexican

  • Mexican shipments are expected to begin in early July and will run through late November
  • The size profile will be 165- through 235-count fruit but larger sizes will be available
  • Expect pricing to be comparable to domestic fruit until volume rises
higher
Limes:

Drought conditions are impacting supplies in Mexico; markets are poised to rise. MFC and ESS Limes are available. 

  • Growers in Mexico are harvesting fruit early to avoid heat-related quality issues
    • Stocks are dominated by smaller, 200-through 250-count sizes
    • Larger, 110-through 175-count sizes are extremely limited
  • Colombian fruit is being shipped as needed to cover larger sizes when Mexican fruit is unavailable
  • Overall quality is good; anticipate increased blanching, stylar, thinner rinds, and lower juice content due to severe drought conditions
  • Expect higher prices for the next three to four weeks
Lower
Onions:

Fresh-run onions are available in California and New Mexico. Extreme temperatures will force growers to end the Southern California season this week and move north. Prices are easing as supplies increase.

Southern California

  • MFC Onions are available in the California desert region
  • Growers are wrapping up harvests this week
  • Increasing seeder issues are tightening supplies
  • Limited labor hours due extreme heat is also reducing availability

Northern California

  • MFC Onions are available
  • Production is getting underway in the Huron area; the Bakersfield season will start late next week
  • Quality is very good; loose skins and flaking are typical of fresh-run onions
  • A wide range of sizes are available, but super colossal yellows are limited
  • Expect tight red onion supplies at the start of the season, but volume will quickly ramp up

New Mexico

  • MFC Onions are available
  • All three colors are being harvested
  • Production is ramping up, slowly easing markets
  • Super colossal and medium yellow are limited; jumbos are abundant
  • Red onion demand is active, keeping markets elevated; prices will ease as volume increases
  • Quality is good; light sunburn and loose skins have been reported
Potatoes :

MFC Burbank and Norkotah Potatoes are available in Idaho and Washington.

Idaho

  • MFC Norkotah stocks will be depleted by late June; MFC Burbanks will be the sole variety for the remainder of the season
  • Supplies will run through mid- to late August
  • 40- to 50-count supplies are extremely tight; six-week averages will be implemented for shipping large sizes through mid-August
  • Ample supply of (80- through 120-count) stocks

Washington

  • MFC Norkotah Potatoes continue to ship from storage
  • Supplies will run out in mid-July, pushing demand toward suppliers with remaining stocks
  • Volume is solid on all sizes

Quality

  • Overall quality is good; air checks, pressure, and shoulder bruising will be seen sporadically in remaining storage supplies (both Norkotahs and Burbanks) from all growing regions
    • Air checks are tiny thumbnail like cracks that are caused by stress due to abrupt temperatures
    • Pressure and shoulder bruising (soft, external indents) results from constant contact with adjacent potatoes, or the floor, while raw product sits in storage piles
steady
Strawberries:

Warm weather is forecast in the Watsonville/Salinas growing region as well as Santa Maria on June 4 and 5. The heat won’t negatively affect fruit, rather it will increase sugar levels, sweetening berries.

Santa Maria, California

  • MFC Strawberries are available
  • Temperatures must be sustained above 80 degrees up to 4 hours, for 4 days in a row to allow the berries to start exhibiting heat damage
  • Quality is good
  • Size ranges from 17 to 21 berries per 8/1-pound clamshell
  • Limited overripening and light bruising are being reported
  • Expect markets to remain steady

Salinas/Watsonville, California

  • MFC Strawberries are available
  • Temperatures must be sustained above 80 degrees up to 4 hours, for 4 days in a row to allow the berries to start exhibiting heat damage
  • Size ranges from 13 to 15 berries per 8/1-pound pack and 27 to 32 berries per 4/2-pound carton
  • Quality is good; expect full color and sweet flavor
  • Size is medium
  • Expect markets to remain steady
From the Fields: Salinas Valley Heat Current weather forecasts are calling for a heat wave that will affect California’s Salinas Valley beginning Tuesday, June 4. Areas near the coast will reach the high 70s to low 80s and inland areas will see mid-80s to as high as triple digits by Wednesday, June 5. Temperatures will start to cool down on Thursday June 6, but will remain slightly above average through the weekend. Markon inspectors are keeping a close eye on lettuce and other row crops that will be harvested from the warmer regions this week. Quality challenges that could develop include:
  • Bolting/seeder
  • Dehydration/heat stress
  • Increased insect pressure
  • Internal burn
  • Shortened shelf-life
  • Sun scalding
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