- COMMODITY OIL
- TRADE & TARIFFS
Produce Trends - November 30, 2018
The market on russets is mixed this week. Product out of Washington/Oregon and Colorado is steady. Norkotahs and Burbanks out of Idaho are up. 6 oz. minimum size out of Idaho is steady on Norkotahs and up on Burbanks.
The red potato market is steady this week. Product out of Minnesota and Wisconsin is steady, with moderate supply and demand.
The markets out of both Florida and California are steady. Quality is good, with moderate supply and demand.
The cabbage market is down, with supplies close to normal this week. Demand is steady, and quality is good.
The green leaf market is up this week, with limited supplies. Quality is good, but weights are light. Product is small, due to colder weather in the Imperial Valley. The market is up, due to customers buying green leaf in place of romaine.
The romaine lettuce market is up. Romaine and Romaine Heart supplies will be light this week. Orders for romaine began November 28. Vendors will be required to adhere to updated labeling requirements in order to have their product accepted into our DCs. Please note that it will take some time for our vendors and markets to ramp up romaine volume.
The iceberg lettuce market is up. Supplies will be lighter this week due to higher demand.
No changes in the California garlic market, as there are good supplies, and vendors can take on additional business.
The jumbo yellow onion market is steady this week out of Washington/Oregon and Idaho. Moderate supplies and good demand are being reported out of both growing regions.
The cilantro market is up this week. Product out of Oxnard is up on 30's and 60's. Product out of Imperial/Coachella Valley California and Arizona is also up on 30's and 60's. There are moderate supplies and demand out of all growing regions.
Cucumbers are steady to up this week. Florida harvests are finishing up production, and Honduras imports have started to arrive to supply the East region. Mexico is reporting flat prices this week, as production is meeting demand. Quality is fair to good this week.
SQUASH AND Zucchini
Squash prices are dropping this week, due to an increase in supply. Both regions have seen a slight increase in supply as weather improves. Quality remains fair to poor, due to heavy wind scarring on the skin of the squash.
Zucchini prices look to be steady to down this week. Supply across all regions is good. Quality is good as well. There is more of an abundant supply of zucchini than there is of yellow squash.
The green bean market is down this week. Machine-picked product out of Florida is down, with light to moderate supplies and a wide range in quality. Imported haricot verts are down, with lighter supplies and moderate demand. Hand-picked product out of Mexico is down, too.
Green bell peppers are steady to down this week in both growing regions. Price changes will vary according to growing region, as well as size and grade. The cooler weather has stunted the growth of the peppers, causing a tighter supply on larger sizes. There is plenty of choice product on the market. Quality is fair to good this week.
Red bell peppers are flat for this week. As supply on green peppers remains tight, farmers are picking greens before letting them mature to red. As the Green Bell supply increases, we will start to see an increase in Red Bells. Most of the product is coming out of Mexico, with little volume coming out of the Florida region.
Eggplant prices are flat this week. East Coast production remains steady as the West begins the transition from California to Mexico. Quality looks to be fair to good.
Round tomatoes are mixed this week. Overall demand on tomatoes is sluggish following Thanksgiving. Product out of Florida is steady to slightly up, due to the transition from the Palmetto/Ruskin area over to Immokalee. Product out of Mexico is showing a slight drop, due to the sluggish demand. Sizing is still tight on XLG and L sizes. Quality overall is trending good to great for now.
Cherry tomato prices are mixed this week. The East is reporting steady prices out of Florida as they transition to new fields. The West, however, is seeing a price drop, due to sluggish demand and a slight supply increase. Quality in both regions is trending fair to good.
Grape tomato prices have dropped significantly this week. Demand is overall sluggish overall after the Thanksgiving holiday. Production is slightly up in both regions, but lack of demand is really driving the supply increase. Quality in both regions is trending up.
Roma tomatoes are slightly down in price this week. Both the East and West regions are reporting down due to sluggish demand. Florida is transitioning to new fields, while Mexico battles cooler weather conditions than normal. Quality, however, is trending good even with the colder-than-normal weather.
The jumbo carrot market is steady this week, including product out of California and Mexico. There are moderate supplies and demand out of both growing regions. There are reports of a wide range in quality out of Mexico.
The celery market is up this week. With the Salinas growing season finished, Oxnard supplies are very light.
The green onion market is down this week. Product out of South Carolina and medium size product out of Mexico is down. There are moderate supplies and good demand, with reports of a wide range in quality.
The cauliflower market is up, with supplies expected to be very light this week. Short supplies are expected to last for the next 2-3 weeks. Demand and quality are good.
The asparagus market is down this week. Product out of Mexico is down with lighter supplies, while product out of Peru is down with moderate supplies and a wide range in quality.
The broccoli market is up, with supplies expected to be very light this week. Short supplies are expected to last for the next 2-3 weeks. Demand and quality are good.
Mushrooms are showing good supplies and quality this week.
Pineapple prices look to be steady for now. Sizing and supply remain stable, with most fruit trending in the 5 to 6 size range. Quality is good.
Banana supplies are meeting current demand. There have been reported issues due to adverse growing conditions. This should be cleared up in the next week or two as weather improves.
Avocados have now been crossing for two weeks and vendors are finally getting caught up. Prices still remain high for the time being, but should improve in the upcoming weeks. No. 2 supply is light, and most fruit is trending to 48’s and smaller sizes.
Lemon prices are flat for this week. Supply remains steady out of all three growing regions in California. The majority of product is coming out of District 3 for the time being. Quality for the most part is trending up, with some minor issues being reported sporadically.
Navels are now in full production in California. Quality is trending between good and great, with only minor issues being reported. The majority of pack sizes trending are 88’s, 113’s and 72’s. There are decent supplies on other pack sizes, with no shortages expected. Organic navels are picking up some speed, with harvests in central California and Riverside. Cara Caras have started to harvest, with limited availability until the harvest ramps up. Blood Oranges will start to harvest next week, with limited supplies to start, but will ramp up over the upcoming weeks.
Lime prices are seeing a slight drop in price this week. Supplies remain good out of Mexico, which is allowing the price drop. Quality has been fair to good as Mexico battles some colder-than-normal weather.
Gala and Golden Delicious markets are steady to slightly down this week, depending on the growing region. All other varieties are stable. Demand is moderate and quality is good.
The pear market remains stable. Green and red D’Anjou and Bosc are available. The small end of pears remains tight, while 90 ct. and larger remain constant.
The cantaloupe market is up this week. Cantaloupes are increasingly difficult to come by, due to the poor weather this year resulting in a shortened season. Fruit will be increasingly difficult to come by until offshore volumes start going up this week.
The honeydew market is up this week. There are plentiful volumes of honeydews, with volumes beginning to lessen this week. Fruit will be increasingly difficult to come by until offshore volumes start going up this week.
Raspberries have downsized a bit, but they still have good quality, and firm and consistent coloring.
The strawberry market is up this week. Rain in the California growing region has affected quality, and supplies are expected to be limited. Mexico and Florida are slowly ramping up. Supplies are expected to improve next week.
The grape market is steady this week, including Autumn King, Autumn Royal, Crimson Seedless, Red Globe, Red Seedless, Scarlett Royal and White Seedless out of Kern District and San Joaquin Valley California. There are moderate supplies and quality is fair. Red Globes out of Peru are steady. There are reports of quality issues on imported grapes.
Blueberries favored last week, as crops started to ripen in the South-Central zone, with high temperatures.
Blackberry quality is good and stable; chilly nights have helped quality.
Beef Trends - November 30, 2018
Live cattle prices came in higher as expected, closing at $1.16/lb., compared to last week at $1.14/lb. It is not out of the question that we could see the live cattle prices top $1.20/lb. before the year’s end.
With one day out of production last week for Thanksgiving, production levels were reported at 570,000 head, with a projection of 640,000 head for this week. As we head further into December, industry expectations are that we could see the production levels start to decrease into the low-600,000 head range, as seasonal demand starts to decrease.
USDA grading continues to be very strong, especially for Prime, which is reporting at 9.58%. Choice is reporting at 71.08%, Select is at 16.52%, and Ungraded is the toughest to find, at 2.81%.
GROUND BEEF 81/19:
Grinds reported a moderate decrease. So far for the week we are seeing a similar trend to lower costs. The market will likely remain soft through mid-December.
Ground chuck reported a modest increase, based on last week’s lower production levels. So far for the week we are seeing the market under some pressure, with slight decreases in place. Look for the ground chuck to follow the same trends as the regular ground beef; we do expect lower costs through mid-December.
All grades reported modestly lower, with the same trend as last week. Currently, for this week we are seeing a modest increase on the Select grade, while the Choice grade continues to struggle to find value, and is reporting a modest decrease. Looking forward, beef knuckles are projected to get a lift in price, as demand will be a factor, as the industry moves to roasting items.
Choice grades saw another setback, with modest decreases reported, while the Select grade rebounded from last week’s lows. An unstable market is in place for inside rounds through the middle to end of December, as seasonal demand will be a factor during this time.
BOTTOM ROUND FLATS:
All grades of bottom round flats reported another retracement to lower costs compared to the previous week. Same as the insides and knuckles, we will continue to see an unstable market, and project a rebound to start around the middle to end of December, as focus will be on the roasting items with winter approaching.
EYES OF ROUND:
All grades of eyes of round ended the week modestly lower. The market remains on the defensive, and is expected to be so until seasonally rebounding in December.
Choice grade strips reported another week of modest increases, while the Select grade took a back seat with a modest decline. There is still a risk of retracement for lower costs for both grades, but we should see a rebound as we go into December.
Choice grade sirloin continues to show positive cost increases, with a moderate increase reported so far this week, while the Select grade only reported up modestly. The sirloin market will remain somewhat unstable. Modest seasonal advances are expected toward the middle to end of December.
Choice tenders saw a pause to higher costs and only reported up modestly, while the Select and Ungraded tenderloins reported moderate increases. The tenderloin market continues to show strong interest, but it will quickly run out of steam, with healthy price declines projected starting mid-to-late December.
Choice and Select graded light ribs continued to report modest increases, while the Ungraded light ribeyes reported up moderately. For the Choice and Ungraded heavy ribs, we saw an improved market from last week’s lows, being reported up modestly, while the Select heavy ribs saw some minor adjustments downward. The market will continue to be unstable, and we do expect that we will see more moderate downside in costs on both light and heavy ribeyes with all grades as we go further into December.
The Choice grade of chuck rolls reported modestly higher, based on last week’s low production levels, while the Select grade was reported steady at best. The market will continue to be soft, and is expected to retreat slightly into early December before seasonally rebounding in mid-December.
TERES MAJOR MUSCLE:
We saw the Choice and Select grades of Teres Majors rebound from the previous week’s lows, with modest increases reported, while the Ungraded Teres Majors reported steady. The market should continue rebounding as slaughter levels decline and demand for raw material seasonally increases.
Demand for briskets continues to be brisk, with another week of modest increases on all grades. There is a risk of retracement as we move into the end of November and the first part of December, as demand is expected to slow down, before it is off to the races with increased demand and costs in preparation for St. Patrick’s Day.
All grades of ball tips reported a retracement, with modest to moderate declines compared to last week’s increases. There is still some risk to retracement moving into late November before seasonally rebounding in December.
All grades of flap meat rebounded from the previous week’s lows, with a modest increase reported. There is still a risk to retracement as the month ticks away, followed by seasonal rebounding in December.
All grades of flank steaks reported up modestly. The market is expected to bottom in the next couple of weeks, with modest seasonal advances in December.
Skirt steak continues to show signs of counter-seasonal increases, as indications report export business is moving in to lock down large beef skirt packages. The market will remain unstable, with pricing being dictated by week-to-week demand.
Pork Trends - November 30, 2018
Last week was a short week for packers, who went dark on Thursday, but they added to production last Saturday. USDA hog harvest numbers came in at 2.258 MM head last week, about 3% over year-ago levels. This week, slaughter numbers are expected to reach record levels, with forecasts at 3.5% above year-ago levels. Post-Thanksgiving harvest levels are expected to remain near the 2.6 MM head levels through mid-December. Hog weights are trending higher. This is a seasonal move, and thus expected. In general, hog weights are expected to remain heavy through January and February, adding to the overall increase in available production.
On the demand side, retail features are focused on multiple proteins for post-Thanksgiving promotions. The pork cutout remains well below year-ago levels, and the expectation is that overall commodity prices may be reaching their seasonal lows. The hope is that export demand will continue to improve and come in higher than a year ago. This may provide some support for pork prices for the balance of 2018 and early 2019. Keep in mind that holiday weeks often result in increased price volatility, as packers work to balance supply and demand.
African Swine Fever Monitor: ASF outbreaks continue to increase, with over 70 cases reported. The disease continues to spread throughout China, and has now been reported in Beijing. Chinese pork prices are rising, as supplies of Chinese pork continue to decline. With upcoming holidays in China, particularly the Lunar New Year, pork consumption is expected to be seasonally high. It is still unknown how global trade may be affected, but China is working on covering their needs by aligning with pork suppliers in the EU, Denmark, and Brazil.
The loin complex was mixed last week, trading steady to lower as retail promotions are spread across all proteins. Prices for bone-in loins remain in decline, as ample supplies continue to put downward pressure on the market. Boneless loins held fairly steady last week, and are trending slightly higher in early-week trade. The December outlook shows ample supplies of loins, but retail features are not expected to start until mid-to-late December. In addition, packer commitments for back rib orders continue to put additional downward pressure on boneless loin prices. The loin complex is expected to trade steady to lower through mid-December.
Pork tenderloin prices turned lower last week, pressured by ample supplies and a general lack of demand. Prices are trending higher early-week, as retailers plan to feature product in early December promotions. Tenderloin prices are expected to trade in a sideways pattern through December; however, ample supplies may create volatile price scenarios.
Pork butt prices held steady last week, as improving export demand for the Korean Lunar Holiday (in February) is consuming ample supplies. Prices are trending higher in early-week trades, and packers are not offering much product out front. Pork butt prices are expected to move higher in December and January. Additionally, concern surrounding the spread of African Swine Fever in China and Eastern Europe may support higher-than-expected prices during Q1/Q2 2019.
Pricing on the rib complex traded lower last week, as ample supplies, coupled with a short production week, had packers discounting product. Prices for both back ribs and spareribs are higher in early-week trade, and are expected to trend higher during December. Packers continue to allocate a majority of their production to large frozen rib packages for next spring and summer.
The belly market continued to decline for the fifth week in a row, indicating that the current focus is off bacon and onto holiday promotions. Prices are trending lower early-week, but the rate of decline seems a bit more controlled than in the past. Bacon demand is not as strong, but foodservice is featuring bacon on many specialty sandwiches. Belly prices are forecasted lower through late December, but as a key commodity, various factors could create volatility.
Ham prices traded slightly lower last week, as current demand continues to consume available supplies. Retailers promoted spiral hams for Thanksgiving and are expected to refill orders for December holiday promotions, which could support ham prices during December. Prices are trading slightly higher early-week, and are expected to trade slightly higher through mid-December. Improved export demand will support higher ham prices during December and January.
Trimming prices continued to trade within a narrow range and are approaching their seasonal low points, as demand remains lackluster. From a seasonal perspective, 42% fat trimmings are expected to move slightly higher during December and show additional increases through Q1 2019. Similarly, 72% lean trimmings are near their seasonal low point, and are expected to move higher during December through Q1 2019.
The picnic complex traded lower last week, with trades on both bone-in and boneless moving lower. Both bone-in and boneless picnic are expected to trade slightly higher during December, but further declines are expected during January. Increased export demand may support higher prices during December and Q1 2019.
Turkey Trends - November 30, 2018
BONELESS, SKINLESS TURKEY BREASTS
Boneless, skinless turkey breasts were flat this week. In the near term, we should expect this market to trend flat to upward, as seasonal demand increases.
WHOLE FROZEN TURKEYS
Whole turkeys were flat this week as we came out of the Thanksgiving holiday. Near-term, we expect the market to remain steady to upward, with regular seasonal demand.
Chicken Trends - November 30, 2018
Jumbo wings were flat this week. With the Thanksgiving holiday behind us, the jumbo wing supply has tightened, with spot pricing trending upward. We expect this to be a short-lived scenario going into next week. The small and medium wing pricing remained unchanged for this week. Jumbo tender and boneless breast supplies are steady, with processors still entertaining slightly lower bids to keep product moving. The select/small boneless breast and tender markets remain short of supply, are well-supported by the ongoing lack of supply and the YTD headcount deficit in the small bird arena.
Export demand on items such as boneless breast and leg quarters is at better-than-normal levels. Thigh meat demand is showing an increase, which could move the market slightly upward. Leg meat is in a balanced position. Domestic sales of leg quarters are showing signs of slowing, as retail focus changes due to the holiday season. Whole birds/WOG demand has increased, and we should expect a flat to upward trend for the near term.
BROILER-TYPE EGGS SET IN THE UNITED STATES UP 1%
Hatcheries in the United States weekly program set 228 million eggs in incubators during the week ending November 24, 2018, up 1% from a year ago. Average hatchability for chicks hatched during the week in the United States was 82.2 percent. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier.
Note: Starting in 2018, the 19-State totals have been discontinued.
BROILER-TYPE CHICKS PLACED IN THE UNITED STATES DOWN 1%
Broiler growers in the United States weekly program placed 173 million chicks for meat production during the week ending November 24, 2018, down 1% from one year ago. Cumulative placements from the weeks ending January 6, 2018 through November 24, 2018 for the United States were 8.55 billion, up 1 percent from the same period a year earlier.
Note: Starting in 2018, the 19-State totals have been discontinued.
WHOLE CHICKEN & CUT-UP PARTS
Small bird demand continues to be strong, and supply is still tight. We can expect this trend to continue through 2018 and into 2019. The demand for whole chickens supports the expectation of increased pricing in the near term.
BONELESS, SKINLESS BREASTS & CHICKEN TENDERLOINS
The select/small boneless breast market was flat this week. This market continues to be supported by the YTD headcount deficit in the small bird category. We can expect the select/small market to trend flat to upward in the near term. The jumbo boneless breast market was flat this week, also. In the near term, we can expect this market to trend flat to downward, as it is very close to the bottom. The medium boneless breast market was flat this week, and we can expect this market to trend flat to downward in the near term too, following the same direction as the jumbo product. Long-term expectations are still calling for an oversupply situation in the jumbo and medium boneless breast category through the end of 2018 and into 2019.
The select/small tenderloin market was flat this week. However, with renewed interest from further processors in the small poultry category, we expect this market may trend flat to upward in the near term. The jumbo tenderloin market was flat this week. As competing proteins take market share and further processors have satisfied their immediate inventory requirements, we expect spot offerings to increase. We can expect this market to trend flat to downward in the near term.
The small wing market was flat this week. Recently product has been placed at normal trading levels and supported by the YTD headcount deficit in the category. As we are in full swing of the holidays, we could see the small wing demand loosen up. We should expect this market to trend flat to downward in the near term. The jumbo wing market was flat this week and continues to be under pressure, due to oversupply in the jumbo broiler arena. Supply has tightened up post-holiday week, mainly due to having to replenish the pipeline in normal channels. The near-term expectation is that after the pipeline is filled, we will begin to see this oversupply hit the markets, with additional spot load offerings. This is mainly due to seasonal bird weight gains and a slump in bone-in demand. We can expect this market to trend flat to downward in the near term, too.
BONELESS, SKINLESS THIGHS
The boneless, skinless thigh market was flat this week, and we can expect this market to trend flat to upward in the near term. As seasonal and export demand ramp up, labor shortages will come heavily into play.
SOY, CANOLA & PALM OIL Trends
November 30, 2018
The U.S. soybean harvest was reported at 91% complete as of last Sunday, up from 88% the prior week, but still below the five-year average of 96%. The Brazilian soybean planting progress was reported at 80% complete, up from 69% last week and well ahead of the five-year average of 70%. Brazilian plantings are expected to be up 2.3 million acres.
The soybean complex closed mixed last week, as soybeans closed modestly lower, while the soybean oil market was able to post solid gains against the meal. News was mostly light during the holiday-shortened week, but we expect the volatility to return in earnest, as traders position themselves ahead of the U.S./China meetings at the G-20 summit.
China trade war rhetoric went both ways, as President Trump and Chinese President XI Jinping prepared for their meeting at the G-20 summit in Argentina, starting on November 30. Trying to get a solid read on how this will turn out, with comments coming from every direction at just about all levels of government, has been a futile task.
While there was some more hopeful rhetoric around the U.S./China trade war last week, the fact remains that the U.S. said it is still planning to raise tariffs from 10 to 25% in January, and the window for any new U.S. soybean export business to China is closing quickly.
- The December soybean oil futures held just above the 2018 low at $.2713 last Wednesday, and were able to hold onto a small gain for the week. The minor rally looked to be nothing more than some short covering, as the market did fall back down this week, as a reaction to external market factors. Most of that drop has clawed its way back, so overall, a very insignificant long-term impact, just in-week volatility.
- Crude oil prices took another big hit, helping to keep a lid on the soybean oil market, as biodiesel margins continued to contract. At its low on Friday, the spot crude oil futures had declined nearly 35% from the early October high, at $76.90 per barrel.
Canola basis offers were finally a bit softer, with offers now at +950 through Q4 and +925 for Q1, 2019
Palm oil prices stabilized last week on some bottom-picking after the extended break. Total palm oil stocks in Malaysia and Indonesia combined are now approaching the 8 million metric ton level, putting the sustainability of any rally efforts in question until demand picks up.
Weekly soybean oil export sales for 2018/2019 were reported at 40,100 tons. The number was well above the upper end of the range of trade expectations, between 15,000 and 25,000 tons. This helped to keep soybean oil prices from falling further on Friday, given the ongoing break in the crude oil market and a stronger U.S. dollar.
Dairy Trends - November 30, 2018
MILK & CREAM
Milk production remains steady, as supply is plentiful with the decrease in exports. Prices are decreasing slightly for December.
Overall, milk supplies coming into cheese facilities are still active, as output improves across the country. Inventories are still expanding, and the recent strength was more geared towards some incremental buying, as block prices dropped. Seasonally, sustained rallies should be difficult to come by into the end of the year.
Cream supplies are still considered tight in the East and Midwest, but production rates have remained strong enough to meet demand. Expectations for less seasonal cream demand should limit price rallies into the end of the year. We are seeing the CME butter market showing signs of a decline this week.
Demand was relatively unchanged, and remains in line with the seasonal expectations. From a promotional standpoint, nothing has changed to make us adjust our expectations for prices to struggle above the recent highs. Overall, supplies are still adequate and helping to limit the extreme moves we saw last year.
Seafood Trends - November 30, 2018
(WHITES AND BROWNS):
Fishing continues; however, we do expect to see shortages on larger sizes. It is looking like as we enter the winter months and Q1 of 2019, we could see some prices begin to firm.
With the weather change, we are seeing a lot of action in the in-shore fishery. This should provide a good amount of smaller shrimp.
(BLACK TIGER AND WHITES):
Production of black tigers is still not at the level of the 80’s and 90’s, but we are seeing product in the country and some discounting to price due to lack of movement.
Farmed Asian and Latin American white shrimp are unstable, with lack of movement.
(MEXICAN BROWNS AND WHITES):
Production is getting underway. So far, fishing has been decent, with good catches on large sizes. There is still a concern on browns.
Inventory of frozen fillets is in very good shape, as well as fish in the ponds. Supply was good going into the fall season, with the exception of 5-7 oz. portions.
We are seeing stable pricing on imported catfish. 3-5 oz. fillets are tight, but there is plenty of supply of larger fillets.
ATLANTIC FARMED SALMON:
We are now seeing the growth of fish in Chile becoming too large for small-size portions. This could have a direct impact on 4 oz. portions through the end of the year. Reports are now starting to come out that we could see record high prices in 2019. In the short term, fresh sides out of Chile are flat to slightly down. Fresh whole fish have really firmed behind strong demand coming out of China.
Pricing continues to trend lower, as inventory levels are in very good shape.
Pricing has turned upward, as is the norm for this time of the year. They have caught about 75% of the quota for the year. We continue to see higher pricing on all natural non-processed product.
Pricing is on the rise due to tariffs. Overall demand is steady.
Inventory domestically is starting to catch up to the impact of tariffs, as many packers are now having to pass those increases along. Demand continues to be strong, as tilapia is a lower-cost option to other species such as cod, haddock, flounder and pangasius, all of which continue to move up.
Pricing remains firm. Inventory is starting to shift to where 3-5’s have dried up with inventory, and the shift to more inventory on 5-7’s and 7-9’s has happened.
We expect the overall market to remain very firm, with short inventory and high prices. Q4 will bring much higher prices, due to low supply on raw material, in addition to the tariffs. Quota cuts will put additional pressure on supply and pricing.
The fishery for Pacific pollock has produced only smaller fish, just 2-4 oz. fillets. This could cause an inventory issue for frozen loins if they don’t start catching larger fish. Larger fillets of 4-6 and 6-8 oz. are very tight.
Pricing on skin-on fillets and skinless loins is starting to see increases. Q4 will bring much higher prices, due to low supply on raw material, in addition to the tariffs. Quota cuts will put additional pressure on supply and pricing.
Inventory domestically is starting to catch up to the impact of tariffs, as many packers are now having to pass those increases along.
(FROZEN STEAKS & LOINS):
Tuna pricing is starting to firm up, and we anticipate increases in the near future.
Swordfish pricing is very stable. Inventory levels are in very good shape.
(RED & GOLDEN):
Product is very short in the marketplace across all sizes, as the quota was cut again. Gold king crab to this point had been the best alternative, but pricing there is now starting to firm up as we approach the holiday season.
(BLUE & RED, PASTEURIZED):
Demand is slowing on the larger sizes, and as a result, we are seeing a slight decrease in price.
Red swimming crab pricing will be moving up for next week. Inventory is becoming nonexistent, and we expect to see this continue for the rest of the year. Tariffs will cause higher pricing.
Mexico blue crab season is in full production, and pricing is starting to weaken, as production is very good.
All vendors are currently off the market. The 2018/2019 quota was announced last week. There will be a 50% increase in the quota. The outlook for the future also looks good, as the biomass for younger crab looks very positive.
Inventory on 5-8 clusters seems to be plentiful. Pricing is very unstable. However, larger-sized 10-up and 12-up clusters are tight in supply.
NORTH AMERICAN LOBSTER:
Overall, the catch in the North Atlantic is a bust. We are seeing very little production, and we expect to see shortages during the holiday season.
LOBSTER TAILS WARM WATER:
Supply on warm water tails is in a decent place. The new fishing season is underway, and there is a solid expectation for the fishery to produce this year. Due to high demand, pricing is firming. We now have MSC product in our Harbor Banks brand.
We are seeing some poor-quality meat on the market. Markets are still uncertain. Buyer beware on something that seems “too good to be true.”
Import & product price trends - November 16, 2018
- President Donald Trump announced early this year he would impose tariffs on imports to shrink the trade deficit.
- Three rounds of tariffs on Chinese products have been implemented so far:
- 1. March 23, ~$3 billion of products: imported steel (25%) and aluminum (10%).
- 2. The next round of ~$50 billion in products from China – mostly machinery and parts – was put on in two stages:
- July 6, ~$34 billion of imported products (25%).
- August 23, ~$16 billion (also 25%).
- 3. September 24, an additional ~$200 billion in products from China (10%).
- The administration plans to increase the tariffs to 25% on January 1, 2019 if no agreement is met.
- China has retaliated against the US tariffs, initially matching the first $50 billion, and now an additional $60 billion against the latest round ($200 billion).
- With China’s retaliation, President Trump announced the possibility of tariffs on an additional $267 billion of imported products from China.
- Price increases on affected products are industry-wide, and vendors will see the impacts of these tariffs on raw materials at different stages, depending on multiple factors.
- As vendors increase their prices due to tariffs, we pass them on to customers. Below is the up-to-date list of products experiencing price increases by category.
Products with Price Increases Through 11/15/18
USF Product Group Impacted
PIM Categories Impacted
Metals - Iron, Steel, Aluminum
Foil Bags, Foil Carryout Containers, Foil Roll, Trays and Pans, Foil Wraps and Sheets, Basket Liners
|Metals - Iron, Steel, Aluminum
Heavy Equipment, Smallwares
|Metals - Iron, Steel, Aluminum
|Metals - Iron, Steel, Aluminum
PC Savory Condiments
|Metals - Iron, Steel, Aluminum
Canned Tomatoes, Dry Pack Beans, EB Canned Fruit, Ketchup, Shelf-Stable Entrées, Canned Pasta, Oil, Dessert Toppings, Cocoa
|Metals - Iron, Steel, Aluminum
Value Added Shelf-Stable
Sauces, Shelf-Stable: Gelatin, Pudding & Pie Filling, Shelf-Stable
|Metals - Iron, Steel, Aluminum
Canned Fruit and Veg., Pudding & Custard, Cheese, Sauces, Beans
Straws and Stirrers
Straws, Drinking, Plastic/PLA - Straws, Stirrers, Plastic/PLA
|Metals - Iron, Steel, Aluminum
Value Added Shelf-Stable
EB Gelatin, Pudding & Pie Filling, Shelf-Stable & EB Sauces, Shelf-Stable
Bags, Food Storage (PE) and (PP), Bags, T–shirt, Buckets, Can Liners, Cups, Dust Pans, Food Containers, Lids, Pastry Bags, Urinal Deodorizer
Bags, Cups, Drinking Straws, Facial Tissue, Food Containers, Lids, Napkins, Paper Towels, Pizza Boxes & Circles, Toilet Seat Covers, Toilet Tissue
Fibers / Molded Fiber
100% Cotton Fabrics, Cups & Bowls, Food Containers, Plates, Platters, Lids
Latex, Nitrile, PE, Vinyl/Synthetic
Finfish & Shellfish
Catfish, Flounder, Haddock, Tilapia, Pasteurized Crabmeat, Scallops, Squid, Crawfish
Canned Fruit & Veg.
Mandarins, Nuts, Other Fruits & Veg.