MARKET TRENDS | 2.17.2017
This notice is subject to change. Information printed is based on last received market data. Subject to change without notification. © 2017 US Foods, Inc. 02-2017. All rights reserved.
Cash cattle traded at $120 last week, up $1 from the previous week. Market-ready
cattle available this week are slightly higher, but we will continue to be in the tightest
fed cattle supplies of the year. Even so, cash cattle are trading slightly lower.
Steer and heifer slaughter for January was 4.8% higher when 1%-2% was expected.
February and March fed slaughter is expected to be 5%-6% higher year-over-year.
Board (futures) economics continue to dictate active marketings with feeders pulling
ahead market-ready animals. Total slaughter last week was 577K head, down 16K
head from the previous week, but 30K head higher year-over-year. However, feed
kills remained the same week over week. Placements this last fall suggest larger fed
supplies starting late March/early April with fed slaughter levels expected to be 4%
higher than last year, increasing 5%-7% moving into June.
With the greater supply during the most lackluster demand period of the year, packers
were forced to discount many cuts to alleviate inventories. With packers firmly
entrenched in the red, further reductions in kill are anticipated, but it has yet to really
be seen if they can remain disciplined.
Carcass weights continue to drop…22 lbs lower since the beginning of January. That
is curbing overall beef production. Weights will continue to decline seasonally into the
spring and are expected to range below last year’s levels. With more heifers in the
slaughter mix, weighted product availability is expected to increase slightly into the
Overall Box Situation
Spot market box volumes are running slightly higher than last week, with most of the
increases being in the Rib and Loin sections along with Briskets at the expense of the
End Cuts. Select and ungraded product continue to be in short supply due to continued
excellent cattle grading. Choice pricing to Select on several items such as Briskets,
Teres Majors muscle, Chuck Rolls, Peeled Knuckles, and Insides are all inverted not due
to increased demand, but simply lack of supply with pricing determined on what the
market will bear. This is expected to continue into spring and afford the opportunity to
Sub Choice for lesser grades at a lower cost.
81/19 FINE GRIND: Knuckles were discounted to move inventories. There is
slight upside potential in March with inventories in better position, but the market is
expected to drift off into May.
PEELED KNUCKLES: All grades of Peeled Knuckles moved lower on a lack of
demand from both the primary and grind processing sectors. They are expected to
remain weak into April.
INSIDE ROUNDS: Insides were discounted to move inventories. However, there
were large forward orders shipping for retail features, which is expected to support this
market with modest advances into and through most of March.
BOTTOM ROUND FLATS: Bottom Round Flats continue to be weak with only a
slight possibility of a limited rebound in March.
EYE OF ROUNDS: Eyes of Rounds moved lower and are subject to more
downside risk moving into spring.
STRIPS: Large volumes of Choice Strip Loins sold last week at a discount. Select
pricing was supported by good cattle grading. Seasonal lows most likely have occurred
with moderate advances expected through mid- to late May.
TOP BUTTS: Top Butts continue to find support from good spot demand; Select
more so due to grading. There is little risk to the downside. Modest increases are
expected into late May.
TENDERLOINS: Tenders traded steady last week with large volumes of Choice on
spot and forward orders. Downside is now limited. Modest advance are expected from
now till May.
RIBEYES: Light Ribs reported lower. More product was available due to falling
carcass weights and dull demand. There is some downside risk moving into March,
but it is now considered limited. Modest advances are expected into May. Heavy Ribs
continued to be discounted to move inventories. Some downside risk remains, but
limited. Modest to moderate gains are anticipated moving into late May.
CHUCK ROLLS: All grades of Chuck Rolls moved lower on good spot demand at a
lower cost. They are expected to hold their value for the next several weeks and trade
mostly sideways before drifting lower from early May into summer.
TERES MAJORS: Teres Majors continue to move higher on good demand from
all sectors and seasonally small slaughter levels. There is some downside risk, but
Teres Majors are expected to rise modestly into late May.
BRISKETS: Briskets were discounted last week to move inventories. With packers
in better inventory positions, and large forward orders posted as well, the market is
expected to be supported with slight gains moving into April.
BALL TIPS: Ball Tips were mixed last week on decent volume. They are finding
support on good interest, and are expected to advance modestly into mid- to late April.
FLAP MEAT: Flap declined much greater than expected, but was needed to move
inventory. There is more upside potential than down, and they are expected to drift
higher into March with more seasonal advances peaking in April.
FLANK: All grades of Flank moved higher on good demand. Flank is expected to
move moderately higher, peaking in late May.
SKIRT STEAK: Outside Skirt moved slightly higher last week but jumped
considerably this week. Seasonal lows are at hand with modest advances expected into
April, and more moderate increases expected moving into mid- to late May.
Weekly hog slaughter last week reported a kill of 2.327 MM hogs, up almost 7% over
a year ago. This week’s slaughter is forecast higher at 2.36 MM hogs, up counterseasonally,
signifying an underlying tone of strong wholesale pork demand. As we
move toward March, slaughter levels should gradually decrease as packers react to
On the hog front, interior cash hog prices continue to increase, as packers are paying
higher money to accommodate seasonally strong wholesale pork demand from a
tighter supply of hogs. Due to the strength of the rising interior markets, the futures
market is also increasing on the basis of a continued positive hog outlook.
On the meat side, the pork cutout continues to increase due to increases in product
values. The increasing cutout would normally drive up packer margins, but any gains
are being eroded by the rising cost of hogs.
Last week, the final export numbers for 2016 were released, indicating an extremely
strong year for U.S. pork exports at 5.23 billion pounds, just shy of the 5.37 billion
pound record. Total U.S. exports were 25% of domestic production, with Mexico being
the largest importer of U.S. pork.
After trading down for three consecutive weeks, Bone-in Loins became enough of a
value to find support and bottom out last week, resulting in a flat trade for the week.
The forecast for Bone-in Loin pricing is to slowly increase through the end of March,
as spring retail demand kicks in. Boneless Loins have been on a nearly identical path
to their Bone-in counterparts. Boneless fell slightly last week, but are forecast to
slowly move higher for the next six weeks as retail spring demand is expected to kick
in on the entire Loin complex.
Pork Tenderloins prices were up slightly last week due to stronger demand. Demand
is expected to be strong for the balance of the month due consumers’ trading up to
more expensive Pork cuts due to tax returns and also Valentine’s Day. Once March
rolls around, typically tenderloin prices will slowly decrease until April when summer
demand kicks back in.
Pork Butts started their seasonal move upward last week, trading up moderately, with supply
very tight for the next few weeks as export bookings for March are being allocated. In addition,
Pork Butts are being featured at retail in March, and cold storage continues to pressure the
fresh market as freezer stocks are replenished. Consider Pork Butts to trade higher each
consecutive week through May.
Rib prices continue to trade higher, with Back Ribs moving up steadily and Spareribs
increasing marginally. Packers are officially in high gear for Rib production, allocating a
majority of their fresh Rib capacity to large retail frozen Rib packages for summer months.
Thus, fresh availability is squeezed and buyers will need to pay higher money for their needs.
In addition, smaller sized Ribs including both Back Ribs and St. Louis Ribs, are extremely
tight in the primary market.
While Belly prices continued to move higher last week, trading up $0.09/lb, all signs are
pointing that this market should peak any day now. Load counts have decreased and
prices have toggled within a narrow range for the last seven days, which further suggest
a slowdown in Belly demand. Analysts are hinting that wholesale prices got too high for
retail, and so they are backing off on demand, both on feature activity and price increases,
which should help drive the market lower. The big question is: How fast will the market fall?
Analysts are forecasting a gradual decline instead of a free fall as basis demand is still very
strong from other channels, including foodservice and cold storage.
Ham prices increased slightly last week. For the next 30-days, expect Hams to slightly
increase due to modest support for Easter Ham bookings as well as steady demand
from export and cold storage buyers.
Pork Trimmings were active last week, with 42% Trimming trading up due to their
seasonal increase in demand from Hot Dog and Sausage makers. Now is the time
when processors start buying Trim for their freezers in anticipation of ramped up
summer production. Lean 72% Trimming continued their move down last week,
trading down in what could be their bottom. Just like the 42s, expect lean Trimming to
kick into gear any day now as processors ramp up for summer.
Boneless Picnic prices traded flat last week, but will soon begin their seasonal move upward
as Sausage makers ramp up for summer production. In addition, the Boneless Picnic will see
increased demand over the next 30 days as some processors utilize Picnics for Easter Hams,
which are sold into the retail market.
BONELESS, SKINLESS TURKEY BREASTS
The Turkey Breast market was down slightly this week as demand will not return until later
in the year. The market should remain flat to slightly down for the near-term.
FOR INFORMATION ON THE BIRD FLU, PLEASE REFER TO
US FOODS ® "YOU NEED TO KNOW" - AVIAN INFLUENZA UPDATES.
WHOLE FROZEN TURKEYS
Whole Turkeys were flat this week and should remain flat to slightly down for the
Broiler-Type Eggs Set in the United States Up 2%
Hatcheries in the United States weekly program set 221 million eggs in incubators during
the week ending February 11, 2017, up 2% from a year ago. Hatcheries in the 19 State
weekly program set 212 million eggs in incubators during the week ending February 11,
2017, up 2% from the year earlier. Average hatchability for chicks hatched during the
week in the United States was 83%. 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 Up 1%
Broiler growers in the United States weekly program placed 179 million chicks for meat
production during the week ending February 11, 2017, up 1% from a year ago. Broiler
growers in the 19 State weekly program placed 172 million chicks for meat production
during the week ending February 11, 2017, up 1% from the year earlier. Cumulative
placements from the week ending January 7, 2017, through February 11, 2017, for the
United States were 1.07 billion. Cumulative placements were up 1% from the same
period a year earlier.
WHOLE CHICKENS AND CUT-UP PARTS
The demand for small birds continues to be strong and looks to continue on this path.
The Georgia Dock is still suspended and will have a new reporting format to review.
The new reporting index was scheduled to begin in February, but we have not heard
anything yet. Expect this market to continue trending sideways.
BONELESS, SKINLESS BREASTS AND
The entire Breast market– fresh and frozen, sized and random– was up strong this
week and looks to continue this way for the near term.
The Tenderloin markets was up again this week and should continue on this path for
the near term.
The Jumbo Wing market was down slightly this week even though demand continues
to be strong. Supply is still tight and will get tighter. Demand will continue to be
strong as we approach March Madness.
The Small Wing market was also down slightly this week. Supply for this size is still
very tight, and we believe this will continue to be the trend through March Madness.
BONELESS, SKINLESS THIGHS
The market was up this week as domestic demand has begun to pick up.
SOY AND CANOLA OIL
Seasonal indicators continue to point to solid underlying support over the next few
months, but some caution is warranted as the Soybean and Soybean Meal markets look to
be carrying excessive risk premiums at this time. The Soybean complex was able to close
higher this week despite a lack of any fresh bullish fundamental inputs and continued
poor meal demand. Technical indicators continue to point higher for the Soybeans and
Soybean Meal and sideways for the Soybean Oil.
• The $1 per gallon biodiesel blender’s tax credit expired at the end of 2016,
effectively taking margins below the break-even level for smaller, stand-alone
operators. Traders remain concerned about a potential overhaul of the RFS.
• The USDA raised its 2016/2017 Soybean Oil ending stocks estimate by 25 million
pounds on their February report
• Current price ratios continue to favor planting Soybeans instead of Xorn in
the U.S. next spring. As much as 4 to 5 million additional Soybean acres are
• The combined Soybean production of Brazil and Argentina is likely to be at a
record level again this year. The early Brazilian harvest is progressing nicely.
• A noted Palm Oil industry analyst is projecting that global Palm Oil production
will increase by as much as 20% in 2017. The Malaysian Palm Oil Board
estimated end of January Palm Oil stocks at 1.54 million metric tons. Although
the number represented a 7.6% drop from February and was at a five-month
low, it was still considered price negative as traders had been expecting an even
bigger month over month decline.
• U.S. Soybean Oil exports continue to outpace the levels needed to meet current
USDA projections for the 2016/2017 crop year.
• Seasonal pattern considerations are still in play as the Soybean Oil futures have
rallied between 2/12 and 4/10 for 13 of the last 15 years.
Butter pricing continues to trend down this week to the lowest level we have seen since
mid-December. Plentiful Cream supplies have increased Butter churning across all regions.
Cold storage numbers are building, and we are likely adjusting to a new normal where peak
cold storage inventories still result in prices over the $2.00/lb mark.
Production levels vary across the country. Block inventories are steady to growing, while
barrel inventories remain long. Some manufacturers are operating full production schedules
to keep up with the available Milk supply. While others are curtailing production to keep
inventory levels in check. Overall demand is down, and many in the industry expect to see
orders pick up in March when spring holiday orders begin. Interest from international buyers
is increasing, but export orders are not expected to increase until the U.S. price becomes
more attractive. The market pricing undertone is uncertain as production varies.
Retail demand patterns are reported as fair this week. Shell Egg inventories are flat from the
week prior and are up 22% compared with the five-year average for the period. Supplies are
readily available and the market is weak. Pricing is down this week due to excess supply.
MILK AND CREAM
Fluid Milk production is seasonally active for this time of year throughout the majority of the
country. Class I sales are steady and supplies have filled most of the school pipelines. For
February, FMO Class I Skim markets were down, while Butterfat was up. All Class II markets
were up. California markets were mixed but Butterfat was up for both Class I and II. Pricing
will be higher for Heavy Cream across the country in February.
(WHITES AND BROWNS): We are starting to see lower inventory on large size shell-on
Shrimp, both Browns and Whites. Prices will continue to inch up as inventory becomes an issue.
DOMESTIC PUDS: Pricing is stable and inventory on all sizes seem to be in good shape. If we
have good weather on the East Coast and demand picks up, we could see inventory on large and midsize
Puds to decrease and prices should rise.
(BLACK TIGER AND WHITES): Black Tiger Shrimp has turned higher as expected. The
tiger market is expected to stay strong through the winter. Production on Tigers is very low and the
difference in price between Whites and Tigers makes the switch to White Shrimp an easy move. Large
Latin White movement has been slower than expected. We may see lower pricing in this category in the
(MEXICAN BROWNS AND WHITES): Mexican Farmed Shrimp are seeing a decrease
in production, which will have an effect on Asian and Latin American Whites. Wild White Mexican Shrimp
season produced very few Shrimp. Weather patterns in the Pacific are being blamed for the lack
CATFISH, DOMESTIC & IMPORTED
DOMESTIC: Production of Farmed Domestic Catfish is now seeing some good
numbers. Production is good and the number of fish coming out of the pond are good.
The next few months should determine how the spring season will be. We are starting to
see shortages on smaller fish this should cause prices to rise on smaller sizes. We could
see shortages on Raw Fillets between April and June.
IMPORTED: There was a small downturn in price on Imported Catfish. New season
fish is starting to hit the US. Long-term outlook is still uncertain.
ATLANTIC FARMED SALMON: The Salmon market is unstable on fresh and frozen
product. There is still a shortage of frozen product causing pricing to remain high.
The Mahi season so far has been very disappointing. Lack of fish in Central and South America
is causing shortages. Processors are reporting that we may see 50% less fish than last year. It
is reported that the industry will suffer and we need to look for other options.
SEA: A fair amount of inventory is keeping Scallop pricing in check. Normally this time of
year we will start to see higher pricing. We do feel we will see higher pricing in the
BAY: Pricing is now steady, but we feel there is some more upside to this market.
Inventory is tight.
Inventory in the U.S. seems to be good and replacement cost seem to be trending lower. We
could start to see a shortage in 7-9 oz fillets.
Pricing overseas has moved up, and the outlook now is for higher pricing through Lent.
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. Product is becoming tight coming into the Lent
POLLOCK: 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 Fllets - 4-6 oz and 6-8 oz - are very tight.
HADDOCK: Pricing on Skin-on Fillets and Skinless Loins look to be steady. We will
see a price increase on Skinless Fillets. Inventory does not seem to be an issue. H&G
market has turned upward, but inventory levels are keeping pricing in check.
(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. Six-ounce portions are in good supply.
Ask your sales representative about this size fish as the yield is better than industry standard.
(RED & GOLDEN): King Crab is seeing shortages in all sizes and pricing is getting
stronger. The need for Crab worldwide is causing pricing to increase.
(BLUE & RED, PASTEURIZED): Blue Swimming Crab has moved up and we expect
the price to remain strong through the rest of the year. We expect to see shortages for the next
30-45 days. Jumbo Lump and Claw Meat seem to be the hardest hit by the shortages.
Red Crab season has opened and prices are now stable. With the increases in pricing with Blue
Swimming Crab, we could see processors raise the price of Red Crab.
ALASKAN: Fishing has started with reports of slow fishing. They have cancelled the Baridi
season for 2017. Larger Crab will now have to come from Canada, Norway and Russia.
CANADIAN: Pricing moved up again this week. Inventory is still unclear in the U.S. Prices
could rise more with a shortage of Alaskan Crab. Crab is becoming short and we are starting
to see vendors put case limits on orders. The lack of ice in Canada will help fishermen get out
crabbing on time.
NORTH AMERICAN LOBSTER: The general opinion on Cold Water Tails is that
market has to go up. We have not seen any increases on Lobster Tails but we feel where
there is talk there is fire! Large Tails are very tight on supply. The live market has turned
lower on both Hard and New Shell product.
LOBSTER TAILS WARM-WATER: A good harvest of Warm-Water Tails is
being reported out of the Bahamas. The recent storm has pushed prices higher. We
expect prices to increase through Valentine’s Day.
LOBSTER MEAT: Pricing has turned to a more steady tune over the last week.
Inventory reports are fair and the fall season has produced good quality meat. It is still
too early to predict where this market will go after the first of the year. Beware of lower
cost product, make sure you compare quality.
Extended rain is in the forecast for all California growing
regions on Strawberries starting the February 16 and through
early next week. Harvest disruptions are expected for Citrus
and Strawberries as we go through these weather events.
Cauliflower supplies are still low and may decrease going into
next week. Chinese New Year has led to supply shortages
on Garlic as China stops producing/shipping product during
Chinese New Year. Expect prices to remain high into next
week. Broccoli supply is light this week, but showing signs of
improvement as the market is down this week.
Russet: Markets are steady on all sizes. Quality is very good.
The Norkotah supply is slowly winding down. Most sheds will
have this variety wrapped up by mid-March. We expect some
market strength by the end of March as the sheds transition
to the more costly Burbank variety.
Reds: Quality is good with good volume.
Yellows: Quality is good with good volume.
Cabbage is down this week with good supply and moderate
Red and Green Leaf: Green Leaf market is up this week. Supplies
are very light with demand that exceeds supply. Supplies are
expected to remain light into next week. Quality of available product
Romaine: Romaine market is up this week with very light supplies
and demand that exceeds supply. Supplies are expected to remain
light for the next several weeks.
Iceberg Lettuce is down this week. Supplies continue to be light
and are expected to remain light. Sizing and quality are fair.
Chinese Peeled Gralic pricing remains high this week and is
expected to remain high into next week. There is a steady
supply of Chinese Garlic coming into the East and West Coasts.
California Garlic is expected to be in good supply this year.
Domestic oversupply and increases in import volume from
Mexico continue to drive prices down. It is likely we will see
this market remain with a sluggish feel until demand picks up.
Chile Pepper market is flat this week.
Cilantro market is up this week with light supply and
moderate-to-good demand. Expect to see some yellowing
Volume continues to be light for off-shore East supplies. Quality
remains variable. For the West, Nogales crossings continue
with good quality.
Yellow Squash: Supplies have greatly improved after the
weather issues that drove the market up the previous weeks.
Current supply is strong with good quality out of the West, but
variable quality out of the East.
Zucchini: Similar to yellow squash, supply and quality have
improved causing the market to increase.
Green Bean market is mixed this week. Machine-picked and
handpicked Round Green Beans out of Central/South Florida
are flat. Handpicked Round Green Beans out of Mexico through
Arizona are up. Haricot Verts are down.
Steady market out of the East with good quality. Nogales
crossings continue and quality is good.
Green: Green Bell Pepper pricing jumped significantly late last
week. Mexico scrapped most of its crop due to cheap prices
and an overabundance of supplies. Now the majority of the
Peppers will have to be supplied out of the East. Florida had
poor weather come through about six weeks ago and is now
starting to feel the effects, reducing the supplies in the East.
Expect a tight market for the next few weeks.
Red: The Red Pepper market has increased, but not as
significantly. Expect an up market for the next few weeks.
Rounds: Demand continues to remain weak while
supplies and quality remain very good for both East and
West supplies. Barring a weather event, we expect the
Round market to remain relatively stable into March.
Mexico continues to dictate low market prices.
Cherry and Grape: Cherry Tomatoes from Mexico still
have quality issues which have caused repackers to
pull product from Florida. Quality remains good. Grape
quality continues to be very good from the East and
variable from the West. Quality continues to be very
Romas: Like Rounds, Mexico continues to dictate market
prices, which is expected to continue into March.
Quality continues to be very good.
Carrot market is flat this week with good supply and
demand. Sizing and quality are also looking good.
Celery market is down this week with supplies that are
improving and fairly light demand. Quality is good.
Green Onion market is flat this week with moderate supply
and fairly light demand. Good supplies are expected into
Cauliflower market is down this week with fairly light supply
and fairly light demand. Quality is fair.
The heavy harvest in Q4 2016 is impacting the supply for the
Q1 harvest. Supplies will continue to be tight over the next
several weeks, with expectations of better supplies early to
mid-March. Quality is good.
Banana markets overall are good, however there have been
some issues with import quantities causing the market to
rise. This is short-lived and import cycles are expected to
catch up with demand. Overall quality is strong.
Supplies are good, quality is good. Prices are rising slightly.
The Avocado market has jumped up significantly from last
week. We are seeing a shortage in Mexico and California.
Mexico growers are controlling the crop and holding fruit.
Quality is rough with more #2s than typical. This market is
expected to continue rising for a few more weeks.
CANTALOUPE & HONEYDEW
The import market is steady. Both Cantaloupe and
Honeydew still remain light on the smaller sizes. Quality
remains good for both.
Asparagus market is down this week. Supplies are
improving, demand is moderate.
Broccoli market is down this week. Supplies are improving
and demand is moderate. Due to recent rain and high
temperatures, expect to see some quality issues.
Production has slowed and supply has begun to
decrease. Expect lighter availability for the next few
Weather in California has affected production late last
week and is expected to disrupt production again late
this week. Florida and Mexico have steady production.
Markets are beginning to level off after the influx of
fruit from Chile. Fruit quality is good and sizing is
expected to improve on both Red and Greens.
Supplies are steady, but there has been a slight
decrease in availability from offshore and a seasonal
decline in production. Quality has been good overall.
Supplies are limited and demand is very good. Weather
has slowed production and fruit maturation over recent
weeks. Decreased volume is industrywide and will
remain in light supply for a couple of weeks.
APPLES & PEARS
Little change with the Apple market. The record cold January
is behind us, so look for increased movement the next few
weeks as the industry is behind. Bartletts are winding down.
Anjous and Bosc remain steady.
Market is strong with excellent demand, growers are still
trying to get caught up on supplies from the past storms. The
fruit size will continue to get larger with all the rain. Expect
some of the smaller size supplies to get tight.
The market is steady to strong as the rains have stopped,
but the ground is still very saturated. Expect supplies to
remain tight. Overall quality is very good.
Limes are fairly stable. The market is expected to remain at
this level for the next few weeks due to a lower supply.