MARKET TRENDS | 8.19.2016

This notice is subject to change. Information printed is based on last received market data. Subject to change without notification. © 2016 US Foods, Inc. 08 - 2016. All rights reserved.


Trading and price movement with last week’s spot market was fairly mundane, with

only a few quotes deviating from levels earlier in the week to the end. Buyers’ interest

for adding inventory was muted, as they chose to wait until this week to analyze

weekend clearance. Very hot and humid weather in many areas of the country may

have played a role with restocking this week. Live cattle had sold between $116/cwt

to $118/cwt, prices that are steady to softer from week prior levels. Last week’s cash

cattle market saw the live animal trade in a range between $117/cwt to $120/cwt;

dressed carcass sales at $186/cwt to $190/cwt.


81/19 FINE GRIND: We did see a slight increase over the previous week and

we are calling the market firm over the next few weeks. We should see a moderate

increase as we get closer to the Labor Day holiday.


PEELED KNUCKLES: Slight decreases were reported this week, but we do

expect the knuckles to hold steady to slightly softening until the seasonal demand kicks in.

INSIDE ROUNDS: The market was mixed this week, with choice product off just

a bit and select and ungraded picking up a few pennies. They are expected to hold

fairly steady at this time.

BOTTOM ROUND FLATS: Although this market went slightly backward this

past week, we are still calling the market steady this week across the majority of the

grades. Look for increased costs out front as retail ad features will drive up costs based

on heavy demand.

EYE OF ROUNDS: A slight decrease was reported this week, but we still expect

the market out front to report moderate increases going forward with heavy demand

from retail and exports.


STRIPS: Strip loins continues to be under pressure as the packers continue to

discount this item to keep product moving. We believe we will continue to see lower

pricing well past August.

TOP BUTTS: With top sirloins we saw modest upward pricing on all grades last

week, and we are still projecting the market to remain unstable through August. We

should see higher prices as we get closer to the Labor Day holiday.

TENDERLOINS: The tenderloin market was flat on the choice grade and only up

slightly on the select grade but we all know that it will continue to go higher as we

move into the fall and winter months.


RIBEYES: Both light and heavy choice product took large gains last week and

continue to show strength going into the Labor Day holiday, while select product only

showed a moderate move up. We may see a slight downturn once we get beyond the

holiday before the fall and winter rallies occur.


CHUCK ROLLS: All grades reported flat this week, however, with the roasting

season and schools starting we do expect continued increases going forward well into

the fall months.

TERES MAJORS: Continues to be unstable across all grades as we saw a

minimal increase on the choice grade and a modest decrease on the select grade this

past week. This market looks as if it will remain unstable going forward.

BRISKETS: This week we saw a modest increase on all grades; however the

market indicators are showing brisket falling off once we get beyond the Labor Day



BALL TIPS: With Ball Tips, the market continues to rebound, and we believe we

could see moderate increases out front as the retail sector is actively featuring this

item on their ads. Look for increases to occur well into the fall.

FLAP MEAT: Despite the market indicators showing this as coming off, flap meat

took a moderate gain this past week. We still expect the market to lose value well into

the remainder of the year.

FLANK: All grades reported a modest increase in cost this week, and it is expected

to continue going forward until mid-to late-September.

SKIRT MEAT: The skirt steak market remains very unstable with declining pricing

reported last week. It is not out of the question we could see increased costs until

Labor Day, but after that we think we will see more downward price adjustments.



Base hog prices traded mixed in terminal and regional markets. Buyers are actively looking

to fill next week’s schedule, which is supportive for live hog prices. Last week harvest

numbers came in above year ago levels and this week’s slaughter is also expected to come

in above year ago levels. Looking ahead, supply estimates for August are expected to come

in about 3% above year ago levels. From the supply perspective, this means more pork in

the pipeline during August and growing uncertainty about the large supplies of pork during

the last half of the year.

Hog weights continued to move lower week over week. Warm temperatures and high

humidity continue to impact live weights, but producers may be moving hogs to market

early to avoid declining live hog prices. Hog weights are expected to continue their seasonal

decline through the August time frame. Producer margins are expected to remain steady to

slightly profitable through mid-September.

On the demand side, week over week demand for commodity pork cuts remains lackluster

for the majority of the cuts. On the processed meat side, demand for hams has started

to slowly gain momentum while demand for bellies remains steady. The outlook for the

month of August indicates ample pork supplies with varying levels of domestic demand and

uncertainty for export demand. This may result in a volatile pricing for pork items during



Prices for bone-in loins moved lower week over week, while boneless loins found price

support and moved slightly higher. Ample product supplies, slowing retail demand and

increased availability of competing meats is expected to put downward pressure on

prices through early/mid-September.


Pork tenderloin prices posted significant declines week over week due to a lack of demand

and ample supplies. Tenders are expected to trade lower through late month and may firm

mid-September. Concerns regarding ample product supplies may put additional downward

pressure on prices.


Pork Butt prices moved lower week over week with additional declines posted this week. Prices

are expected to gradually move lower during August, but may firm late month due to retail

interest for Labor Day promotions. Increased export demand may support current price levels

over the next few weeks.


Spareribs and St. Louis Rib prices traded steady to slightly higher week over week due improved

retail demand for Labor Day promotions. Prices for Spareribs and St.. Louis Ribs are

expected to move lower after Labor Day. Back Rib prices moved lower week over week and

are expected to trade steady to slightly lower through August. Overall spareribs and back rib

prices are expected to continue their seasonal move lower during September.


Bacon/Belly prices continued their move lower week over week pressured by ample

supplies of fresh product. While bacon demand is expected to remain strong during August,

belly prices are expected to remain volatile as supplies of fresh product remain plentiful

and packers attempt to clear their inventory. The long-term outlook for bellies indicates that

prices are expected to move lower through September.


Ham prices firmed last week and traded slightly higher. Prices are expected to trade steady

to slightly higher through August supported by improving export demand. Long-term price

outlook for hams indicates a risk of increased price volatility during August/mid-September

due to the changing level of export demand.


The following market dynamics will impact hot dog and breakfast sausage pricing during

the September time frame. Pork trimming prices traded slightly lower during the late July/

early August time frame; thus prices for breakfast sausage are projected slightly lower for

September price lists. On the other hand, sow prices moved higher during the late July/

early August time frame; thus Whole Hog Sausage prices are expected to be higher for

September price lists. On the beef and all meat hot dog side, lower beef trimming prices

during August will result in higher prices for All Beef Hot Dogs during September.


The following market dynamics will impact Dinner Sausage prices during the September

time frame. Pork picnics prices traded higher during late July/early August supported

by increased seasonal demand. Thus Dinner Sausage prices will be slightly higher for

September price lists.




The turkey breast market was flat as demand will not return until later in the year




Whole turkeys should remain flat to slightly up for the next three to four months.



Customers should remember that although there has not been any recent news of Avian

Influenza outbreaks, the supply pipeline is still recovering from last year’s extreme effect.

Barring any further setbacks, the earliest can we expect to see a return to normalcy in

supply would be at the end of August.

As a reminder, this issue is not a food safety issue. There have been no human infections

associated with avian influenza viruses of this particular subtype (i.e., H7N8). If there is

any further concern, customers should know that the proper handling and cooking of

poultry and eggs is to cook to an internal temperature of 165°F – which kills bacteria and

viruses, including Avian Influenza. (Updated March 11, 2016)


The National Chicken Council released new findings indicating that U.S. chicken

consumption remains high, showing that 2016 levels have exceeded those levels for

2014 and 2015. According to new research in the two weeks leading up to the survey,

87% of consumers ate a chicken meal or snack purchased from a supermarket and 72%

ate a chicken meal or snack from a foodservice establishment. Supermarket numbers

increased 2.4% and are now at parity with those seen in 2015, while foodservice

establishment consumption shows a 7.5% increase from 2015.

Broiler-Type Eggs Set in the United States Up 1 Percent

Hatcheries in the United States weekly program set 217 million eggs in incubators during

the week ending August 6, 2016, up 1 percent from a year ago. Hatcheries in the 19

State weekly program set 209 million eggs in incubators during the week ending August

6, 2016, up 1 percent from the year earlier. Average hatchability for chicks hatched

during the week in the United States was 84 percent. Average hatchability is calculated

by dividing chicks hatched during the week by eggs set three weeks earlier.

Broiler-Type Chicks Placed in the United States Down Slightly

Broiler growers in the United States weekly program placed 179 million chicks for meat

production during the week ending August 6, 2016, up 1 percent from a year ago. Broiler

growers in the 19 State weekly program placed 172 million chicks for meat production

during the week ending August 6, 2016, up 1 percent from the year earlier. Cumulative

placements from the week ending January 9, 2016, through August 6, 2016, for the

United States were 5.52 billion. Cumulative placements were up 1 percent from the same

period a year earlier.


The demand for small birds is still extremely strong. Expect this market to continue trending

sideways to slightly up.



The entire breast market was up this week as was the tenderloin market. This trend should

continue over the next few weeks. The breast market is being affected by the intense heat

and bird weights.


The wing market was up this week as demand has started to pick up even more. Supply

is tight and will get tighter as demand is still exceeding supply. Unfortunately, there are no

extra wings to go into the freezer to cover the shorts during wing season. We will continue

to look for opportunities.


The market was up this week and it looks like there may be a little more upside in the next

couple of weeks due to the labor issues they are experiencing.




In a strong counter-seasonal move, the soybean oil futures and basis markets have posted

significant gains since late July. The primary drivers behind this rally are: strength in the

global palm oil market on lower stocks and stronger Chinese demand; continued solid

pace of the U.S. soybean oil exports - U.S. dollar still headed lower; record use of soybean

oil for biodiesel production in the U.S. ahead of elections; large drop from June to July

on NOPA domestic bean oil stocks despite high yields; and commodity fund (speculative)

traders have flipped from net short to net long positions. We’ll be looking for a pullback

late August/September to push pricing closer to $0.31. Current market at $0.34


• The U.S. soybean crop is currently rated at 72% good to excellent. That is the

fourth highest level of the past 30 years for this point in the growing season.

Record yields are expected at this point.

• The USDA’s August supply/demand report raised the soybean ending stocks

estimate by 40 million bushels for the 2016/2017 crop year. However, the

USDA lowered its soybean oil ending stock estimates significantly in August,

recognizing a record pace of soybean oil used for U.S. biodiesel production ahead

of elections and increased export business – U.S. dollar still headed lower.

• Soybean oil’s share of product value has rallied over 4% since early July at the

behest of a sharp drop in soybean meal values. Current fundamentals suggest a

move to 36% in the spot position is likely.


• Palm oil prices made two-month highs this week on lower than expected July

stocks in Malaysia and stepped up buying from China. Seasonal production

increases have started out at a lower than expected pace.


• Crude oil has been able to stay above the $40 per barrel level (profitable bio

margins), contributing to posted gains.


• The USDA lowered its soybean oil ending stock estimates significantly in August,

recognizing increasing export business and a record pace of soybean oil used for

biodiesel production.


• Soybean oil prices have a strong seasonal tendency to move lower in the months

of August and September.



Butter production is mixed across the country as cream supplies are uneven. We are nearing

the time frame when prices skyrocketed the past two years. The market fundamentals are

not supporting another $3.00/lb high as stocks are higher than year ago levels, production is

up and retail holiday bookings were active earlier this year. There is still some risk with the

skyrocketing prices, but we could also see a significant decrease as sellers look to unload

heavy supplies.


Bottle milk sales are up, as is demand. Production remains steady across the country except

in the West where high temperatures have been disrupting the cows. With back to school

upon us we will continue to see a rise in demand and pricing. FMO commodities for August

were all up except for class II butterfat. California commodities were all up.


Cheese prices have continued to climb each week since May. It seems as though lower than

expected production and higher than forecasted demand continue to be the drivers of the

higher markets. Markets were not expected to be trading this high and until demand lets off

we will continue to see the higher market. Expect markets to continue to trade within the

current range with upside expected in Q4.


Retail demand patterns are good with more promotional activity and schools coming back in

session. Wholesale buying interest has been active this week, with bids to buy now exceeding

current offerings. Prices have increased due to the increased demand and tightening supply.

This trend should continue for the near term.




(WHITES AND BROWNS): New season opened as scheduled on Monday,

August 15. The fleet is out shrimping and we expect to see shrimp to the dock this weekend.

Prices continue to rise as we leave the spring catch and inventory is low.

DOMESTIC PUDS: New season opened Monday, August 15. There is a shortage of

mid-sized PUDS.


(BLACK TIGER AND WHITES): Black Tiger Shrimp 26/30 and smaller are starting

to firm up in price. Tiger inventory is low and we feel pricing will continue to rise as we get

closer to the holiday season. Farmed whites, both Asian and Latin America, are seeing price

increases. This market is unstable with pricing and product.

(MEXICAN BROWNS AND WHITES): Mexican farmed shrimp are seeing a

decrease in production. This will have an effect on Asian and Latin American Whites. Wild

Mexican shrimp should get in full harvest swing by the end of August.


DOMESTIC: With this warm weather pattern in the South, farmers are now able

to feed fish daily. Fish are growing fast but the warm weather has caused algae

blooms that have caused off flavors, so harvest has been slow. Outlook is for a good

season, late but good.

IMPORTED: New season produced a fair amount of fish. Prices remain high due

to USDA bill and uncertain costs associated with inspections. We are going to see

higher pricing next week. Long-term outlook for the summer is higher pricing.


CHILEAN FARMED SALMON: The fresh market is now firm on fish from Chile.

Fish from Europe and Canada are seeing higher prices. However, frozen portions remain at a

premium as those fish were priced during the strike and continuing algae bloom. Wild fresh

Salmon catch is now reported to be lower than expected.


The Mahi season for the most part is over in Peru and Ecuador. Fishing was subpar

on larger fish, causing high prices and low inventory. Most feel the Central and South

American product is the best quality. Make sure you are comparing “apples to apples” on

Country of Origin.


SEA: Pricing is starting to see signs of weakening 10/20, and 20/30 Dry Scallops could

be at or near the bottom.

BAY: Pricing is now steady, but we feel there is some more upside to this market.

Inventory is tight.


Pricing is unstable with reports of a drought and salt water entering the ponds. Inventory in

the US seems to be good; replacement cost seem to be trending lower.



We are seeing an uptick in prices that will happen as new product starts to hit the US. We

expect to see unstable to higher pricing as the USDA starts to take over inspection of Imported

Catfish. There have been some Vietnam producers shut down due to lack of profits. Shortages

of small fillets (3-5 oz) are causing this price rise.


COD: The market for Atlantic and Pacific Cod continues to see stronger pricing. It is expected

to see cod pricing higher than haddock this year. Pacific Cod fishing was a good catch.

POLLOCK: The fishery for Pacific Pollock has produced just smaller fish

(2-4 oz ) fillets. This could cause an inventory issue for once frozen loins if they

don’t start catching larger fish.

HADDOCK: Production seems to be in good shape with continued fishing.

Additional fish from the Bering Sea are keeping pricing down. Some suppliers feel we

can see these lower prices through Lent 2017. Summer fish are being harvested. This

will be softer flesh fish and we may see this fish at a discount



(FROZEN STEAKS & LOINS): Tuna is fairly stable in pricing and inventories are good.


The catch in Central and South America has been slow, with mostly smaller fish being caught.

We could see higher pricing as this fish hits the market.


(RED & GOLDEN): King Crab pricing is unsteady at this time. Inventories are

getting low and we could see higher prices throughout the summer.


(BLUE & RED, PASTEURIZED): Imports on Blue and Red Swimming crab are

stable and pricing seems to be steady at this point. Mexico is now on conservation on the

West Coast.


ALASKAN: Vendors are reporting they are out of product and will not have any more until

the new season. The new quota should be out by the end of October.

CANADIAN: Pricing moved up a little this week but many think that we are at or near the

top. We are seeing retail step into the market in these summer months, keeping pressure on

the 5-8 market both in price and inventory.


NORTH AMERICAN LOBSTER: Production is picking up and we could see

more inventory soon. With any luck this will lead to lower pricing.

LOBSTER TAILS WARM-WATER: Warm-water tails are now steady on all


LOBSTER MEAT: Pricing remains firm, and inventory is tight.




Russet: Burbanks are done with Norkotahs in full

production. Current market is flat with exception to 80s

and smaller. Non-Idaho russets from Washington are down

again on all sizes, while Wisconsin is starting up.

Reds: A lot of reds are available in Wisconsin and

Washington. Current market is down over last week as

supplies improve.

Yellows: Yellow potatoes are tighter which caused

the market to go up over last week from Washington.

Wisconsin just started and should have more volume

next week.


Chinese Peeled Garlic pricing continues to be high this

week and supplies continue to be limited. The process of

peeling the new California Garlic crop remains slow due to

lack of curing. Skins hold tighter on the cloves which slows

the peeling process.


Cabbage market is mixed this week. Cabbage out of

Oxnard District California and Western/Central New York

are down. Cabbage out of Michigan is up. Cabbage out of

Central Coast California is flat. Supply is light and demand

is moderate.


Red and Green Leaf: Quality and supplies are good with

good demand, but the market is slightly up over last week.

Current concerns continue to be insect damage, fringe burn,

brittle, light dehydration, frog skin, occasional seeder and

leggy. Weights are generally 20 to 24 lbs in both red and

green leaf.

Romaine: Unlike the Red and Green Leaf, market is slightly

down over last week with more volume. Current quality

issues include insect damage, fringe burn, brittle, light

dehydration, frog skin, occasional seeder and leggy. Weights

are around low 30s to low 40s.


Sizing has become more consistent but peaking still

on jumbos and mediums. Washington has increased its

volume, which has forced the market to go down again

on all sizes. Idaho and Oregon also have good volume

and the overlap is causing the market to go down. New

Mexico and California are winding down and should be

done soon.


Chile pepper market is mixed this week. Jalapeño and

Serrano markets are up. Poblano peppers are down.

Supply and demand are moderate.


Supplies are mainly coming out of Michigan. Demand

continues to be sluggish. There are quality issues with

the product, which is causing lower volume. The current

market is flat over last week. Western cucumbers are

out of Baja and quality is extremely variable. Market

is generally steady as demand is weak. Supplies are

expected to remain tight for the next 10 days to two

weeks when new fields will come into production.


Yellow Squash: Supplies are mainly coming out of

Michigan. Demand continues to be sluggish. Quality

issues are appearing due to weather. Market is slightly

up over last week.

Zucchini: Michigan is the main sourcing region. Current

market is slightly up over last week. Supplies in the West

are coming out of Santa Maria and Washington. Quality

is good but becoming variable.


Green bean market is mixed this week. Round Green

Type are up. Haricot Verts are down. Supply is light and

demand is light.


Supplies and demand are good, which is keeping the

market flat over last week. Common issues include

brittle, insect damage, misshapen, big vein, mildew and

mechanical. Solidity has been irregular and ranges from

fairly firm to firm. Head size is generally medium to

medium plus. Weights are ranging from high 30s to

mid 40s.




Michigan is the main sourcing region. Current market is

flat over last week. Quality is good.


Green: Growing regions out of Tennessee, North Carolina

and Michigan have reached a lot of rain this week. Market

is slightly lower this week. Quality is generally good but is

becoming variable due to the weather. Western supplies

continue to be weak but demand is even weaker. Market

is slightly down on all sizes compared to last week.

Red: Supplies are improving which is causing the flat over

last week. Quality is variable.


Rounds: Supplies continue to be fragmented and light

in Alabama, Virginia, South Carolina and North Carolina.

Demand is picking up which is causing the market to

go up over last week. Hot and rainy weather has caused

volume and quality to be spotty. Vine ripes continue to

cross at Baja and McAllen. Some vine ripes are crossing

through Nogales. Supplies are light, paired with increasing

demand, has caused the market to go up over last week.

Quality is variable.

Romas: Like the rounds, Roma supplies are light and

fragmented in the East. Market is down on all sizes over

last week due to light demand. Quality is variable due to

heat and storms. Western supplies continue out of Baja

and California. Supplies for larger romas are becoming

short, which caused the market to go up on large.

Excessive heat is causing some quality issues.

Cherry and Grape: Cherry supplies and demand are light.

Market is slightly up over last week. Grape supplies continue

out of North Carolina and Virginia Eastern Shore fields.

Current market is slightly down over last week. Western

grapes continue out of Baja but supplies are lighter, which is

causing the market to go up. Quality is variable.


Carrot market is mixed this week. Carrots out of Kern

District, California are flat. Carrots out of Mexico crossing

through Texas are down. Supply is good and demand is

moderate. Quality is good.


Celery market is mixed this week. Celery out of Michigan

is down. Celery out of Salinas-Watsonville, California

is down. Celery out of Santa Maria, California is down.

Supply and demand are good. Quality is good.



Green onion market is up this week with light supply and

moderate demand. Light supply is due to lighter supplies

out of Northern Mexico. High temperatures and humidity

have the slowed growth. Expect lighter supplies to

continue through the month of August.


Cauliflower market is up this week with moderate supply

and good demand. Quality is good.


Asparagus market is mixed this week. Standard, large and

jumbo asparagus out of Peru is down while extra large

and small asparagus is up. Asparagus out of Mexico is

up on both standard and large. Supply is fairly light and

demand is good.


Broccoli market is mixed this week. Broccoli out of

Salinas-Watsonville, California is down. Broccoli out

of Santa Maria, California is up. Supply is steady and

demand is light. Expect supplies to be steady over the

next few weeks. Quality is good.



Import volumes on Gold Pineapples continue to be up every

week as expected. We are in the “pre-fall” push where size

profile is larger and overall availability is strong in support of

the coming holiday ads. Quality is excellent with high sugar



The banana market has improved as volume picks up.

Plantings and harvest are aligned for full production with

school starting. Volumes are good and fruit quality is strong


Supply is abundant with good volume.

Quality is good and prices are reasonable.


The ever-changing avocado market continues to make

headlines as this weekend brought another change to the

Mexican harvest. Floor inventories at shipping point and the

border cleaned up and harvest halted. The size profile has

shifted from a smaller profile to a larger pack, where 48s and

60s are now more abundant. Markets are not softening, as

demand has picked up too.




Cantaloupe: The market is mixed as some growers

are peaking on small fruit. 9s and larger are keeping

strong demand. The overall quality is excellent with a

nice clean, tight net occasional green cast, but mostly

straw cast.

Honeydew: The market is steady with good supplies

across the board peaking on 6s. The overall quality is

excellent with nice, clean fruit



Steady volume with consistent good quality. California

volume trending higher.


We are seeing this market start to tighten up. Prices

are slightly up and supplies are getting tighter. Due to

recent weather conditions, it slowed production and

resulted in smaller size fruit. Production is good while

quality is average to good. We are seeing a decline in



Dark sweet cherries out of Washington continue to be

steady in supply. Mid-July volume is expected to drop

off quickly, and harvest will finish by month’s end.

Market prices remain steady.


The grape market is steady with good to fair demand.

Growers are harvesting all throughout the San Joaquin

Valley and will continue through November. The overall

quality of the fruit has been very good with excellent

color on the reds.



Galas from the Northwest have opened up with reasonable

pricing and good quality. There is a slight push on large Fujis.

Movement on most apples remains steady. California pears

are stable with movement and quality remaining unchanged.



The market is steady to strong as growers are trying to finish

up the coastal regions. Mexico has started in a light way and

volume will increase more in the coming weeks. The overall

quality of California fruit is fair, with a wide range in maturity

and some clear rot is showing up across the board. The first

Mexican fruit looks very good.


Market is very strong on 113s and smaller as growers are

peaking on some bigger fruit. The 138s are in a demandexceeds-supply

situation until California navels start around

the first of November. The overall quality of the fruit is good,

with some fruit showing heavier green color due to our hot

temperatures and the natural reaction of a later season

Valencia. There are some Chilean navels that have some very

nice deep orange color that have arrived on both coasts.

California navels will start around the first of November and

go through about June.


The lime market continues to rise and is expected to

continue upward and stay strong. The rain in Mexico is

hurting the volume of fruit being harvested, but good yields

are expected when the rain subsides. Quality remains good

and all sizes are available.


Blueberry season is at its peak. Steady production and

supply. Quality is good.


Supply is steady. Some growers are gapping in

between varieties. Demand has increased slightly with

much smaller volume.


08 2016 SPE-2016080101

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