market trends | 3.20.2015

FARMER’SREPORT

This notice is subject to change. Information printed is based on last received market data. Subject to change without notification. © 2015 US Foods. All rights reserved.

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BeeF

Live cattle were higher last week and the packers are only discounting with reluctance. There is some resistance for middles with the exception of tenders. End meats have been moving lower and thin meats continue to fluctuate in price with the continued reduction in beef production.

roundsInsIdes: Inside rounds are moving lower and are expected to gradually move lower into the spring.

Flats: Flats followed the rest of the round complex. They are a little bit oversold, but are also expected to drift slowly into the spring.

loIns

strIps: Strip loins are starting their upward climb as we enter the grilling season. Select will be more vulnerable to price fluctuations. Overall, this market will continue to move forward into the summer.

top Butts: Top butts have firmed and are expected to remain steady into the spring. They are still a value relative to the other steak cuts.

Ball tIps: They are in good demand and the shortened production weeks will only help them continue to move higher, but hopefully at a more moderate rate.

tenderloIns: Tenders are higher like all middle meats, but this is strictly supply driven. The supply constraint will quickly flip to higher demand as spring weather improves.

rIBsrIBeyes: All of the ribeyes moved much higher, but more moderately. Select is more vulnerable with the reduced production. There may be some downside risk the next couple of weeks, but it is expected to be short lived and ribeyes should move upward between now and the end of May.

ChuCksChuCk rolls: Chucks moved higher as expected with the exception of select. Lack of demand and increased supply should put a damper on pricing soon. The seasonal price decline may be hampered by lack of lean boneless beef available to the market and packers may use them for grinds to fulfill future needs.

thIn meats & grIndsFlap meat: Flap meat continues to fluctuate, but this product will eventually rise moving into spring and summer and is expected to peak midsummer. They are vulnerable to price fluctuations like all thin meats with the reduced beef production.

Flank: Flank continues to be the beef “over achiever”. They are overvalued when compared to last year, but they just continue to march higher. Flank is expected to move more moderately into spring

BrIskets: Briskets are firm to steady and are expected to be so until we move into late spring/early summer. They are expected to move higher from there based on summer demand. .

grInds: Grinds are barely higher, but they are actually moving into a more temperate environment. They are considered steady to firm for the next several weeks moving into April when we are expecting more seasonal price increases in the summer.

skIrt meat: Same as last week…this needs no adjustment in words! Welcome to the roller coaster. Up, down, up, down. For this week, it is up moderately. We are forecasting a steady to lower market as demand has fallen off, but it should rebound as we approach the end of March.

pork

Base hog prices traded steady to weaker as most plants are well supplied for this week and adding to their inventories for next week. Packers continue reducing or eliminating their Saturday schedules due to declining packer margins. Hog prices are expected to firm during the April timeframe.

Last week slaughter numbers were reported at almost 2.23 million head which is approximately 10% above year ago levels. This week slaughter numbers are expected to come in at 2.23 million head, which is almost 9% above 2014 levels. If you recall last March (2014), hog supplies were very tight due to the PED virus. This year slaughter numbers could average 7-9% above 2014 levels during the April-May timeframe. Also worth noting, as packer margins move lower, slaughter numbers may move lower (but remain above year ago levels). Hog weights were moved lower last week but still remain heavier than last year. Weights continue to gradually move lower as producers thin out their larger animals and become more “current”. As hog prices moving lower, producers are expected to sell their animals sooner and hog weights should gradually move lower. Weights are expected to trend lower through Q2.

On the demand side, weaker domestic and export demand continue to pressure overall pork prices. Prices for commodity cuts and bellies are expected to firm and move higher as retail and foodservice demand improve. Warmer weather, hopefully in the upcoming weeks, is also expected to boost product demand and support higher prices.

loInsThe market for bone in and boneless loins are starting to firm and trend higher due to improved product demand. Prices for both bone in and boneless loins are expected to gradually move higher during April/early May as domestic and export demand pick up. Loin prices are expected to remain below year ago levels through May.

tendersPork tenders moved lower last week due to lackluster demand; however, prices are trending higher this week on improved retail demand for April features. Prices are expected to continue gradually moving higher through the April timeframe.

ButtsPork Butts continue to gradually move higher on increased domestic and export demand. Prices are expected to trade steady to slightly higher through April as retail promotions are expected to increase product movement.

rIBsSpareribs and St Louis Ribs moved higher on improved product demand. Prices are expected to continue moving higher through mid April then hold steady as buyers pause to assess their additional rib needs for the upcoming season. Back Ribs moved slightly higher due to strong demand from foodservice. Prices for Back Ribs are expected to gradually trend higher in response to retail and foodservice Spring promotions. Lighter St. Louis ribs and Back ribs may be in tight supply through early Q2, however lighter ribs are expected to become available early Q3.

BellIes/BaConBacon/Belly prices continued lower last week on excess supplies of fresh bellies and weaker demand from second stage processors. Prices are expected to firm in the upcoming weeks then gradually move higher as retail and foodservice demand improves. Unanticipated supplies of fresh bellies in the market may put downward pressure on belly prices through mid April. Markets remain volatile.

hamsHam prices moved lower last week due to excess supplies and decreased domestic and export demand. Prices are expected to trade steady to slightly lower through March then hold steady through mid April. Unanticipated supplies of fresh product could put downward pressure on ham prices during the April timeframe.

trIm The following market dynamics will impact finished goods pricing during the March timeframe. Pork trimmings have traded lower due to excess supplies of product in the market. The unexpected increase in trimming supplies, during a seasonally weak demand period, resulted in lower prices for hot dogs and breakfast sausage for the March timeframe. Prices are currently trading steady to slightly lower during March which may negatively impact April prices. .

pICnICsPork Picnics traded lower last week due to increased supplies and weaker domestic and export demand. Picnics are expected to remain volatile week over week through late March. This has resulted in lower prices for dinner sausage items during the March/April timeframe. Prices are expected to firm and move higher through Q2.

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With the spring weather, the poultry industry has been able to properly gauge the supply and demand aspects of the marketplace. Thus, this past week the market adjusted itself. Chicken tenderloins remain the most scare offering in this market, thus showing accelerated inflation. QSR is promoting breaded tenderloins at notable establishments as McDonalds, KFC, Sonic and Popeyes. This market will continue to be strong until after spring break. The breast market was also extremely active as the prices escalated. Most analysts feel this large move in the market by the boneless breast was a market adjustment from three weeks of uncertain weather. The wing market, with March Madness upon us is beginning to get very tight. Expect this market to slowly inflate the next few weeks.

Hatcheries in the United States weekly program set 213 million eggs in incubators during the week ending March 7, 2015, up 1 percent from a year ago. Hatcheries in the 19 State weekly program set 205 million eggs in incubators during the week ending March 7, 2015, up 1 percent from the year earlier. Average hatchability for chicks hatched during the week in the United States was 83 percent. Average hatchability is calculated by dividing chicks hatched during the week by eggs set three weeks earlier.

Broiler growers in the United States weekly program placed 176 million chicks for meat production during the week ending March 7, 2015, up 4 percent from a year ago. Broiler growers in the 19 State weekly program placed 170 million chicks for meat production during the week ending March 7, 2015, up 4 percent from the year earlier. Cumulative placements from the week ending January 10, 2015 through March 7, 2015 for the United States were 1.58 billion. Cumulative placements were up 3 percent from the same period a year earlier.

Boneless skInless BreastsAs was discussed last week, many felt the market should have climbed due to supply shortage. This week the market corrected itself by taking a large inflationary jump in value. Spot loads can be found in the market place; however it will demand a premium to the market. Look for the market to settle in the weeks to come.

ChICken tenderloInsThe supply of tenderloins remains extremely tight as, as five of the top ten QSR giants are promoting tenders. There are no spot loads available on the market unless one wants to pay as much as 10% over the market.

WIngsThe medium wing market remained flat this week, though the supplies of extra loads are non-existent. Further processors are still ramping up for March Madness, thus the demand for this size wings remains brisk. Many vendors are changing their formula base from jumbo to small wings to increase revenue without making the market jump. The jumbo wings market has started its yearly climb in anticipation of March Madness and one major distributor is heavily promoting this offering. Spot loads can be found but the value is a large premium to the market. This market will continue to slowly inflate for the next few weeks.

Boneless skInless thIghsDespite the fact that exports are slowly grinding to a halt, the boneless thigh meat market continue to slowly gain strength. With further processors looking to finish school lunch obligations, the market will remain strong.

poultry

turkey

Boneless skInless turkey BreastsThe frozen turkey market stayed flat this week as the producers continue to put product in the freezer.

Whole Frozen turkey The whole turkey market remained flat as eyes have turned to looking to the supply conditions that may be turned upside down due to grow out problems.

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soyBean oIl usda report:: • This week’s USDA supply/demand report offered little in the way of fresh news for the

soybean complex.• Soybean ending stocks for 2014/2015 were left unchanged at 385 million bushel as were

soybean oil ending stocks at 1.505 billion pounds

domestIC Crop & produCtIon: • U.S. soybean acreage will be higher this next planting season, but not as much as

originally expected.• Soybean oil basis levels were lowered again this week as were the canola basis levels.• New crop U.S. soybean oil yield saw a mild uptick to 11.25 lbs./bushel

InternatIonal Crop: • The trade is expecting a Brazil soybean crop of 95+ million. • Weather in Brazil is mostly dry with scattered showers in Mato Grasso

• Things are not going perfectly in Brazil regarding harvest progress and port logistics.

• Harvesting continues and is about 50% complete; fears about disruptions from the truckers strike have abated.

• The current crop is too big, while the impediments to harvest and logistics are minor in comparison with regard to supply based on current demand.

• Chinese demand is covered for the months of Apr & May so that next bean cargo for sale is not seeing robust demand.

• Argentina’s 2014 soybean production is forecast at 58.0 million tonnes

BIodIesel: • The recent sharp break in crude oil prices has lead to reduced soy bean oil demand

for biodiesel production as margins in that industry are low. • EIA (Energy Administration) came out with its biodiesel production numbers and

it was higher than many expected on soy oil - coming in at 5.011 bln pounds - so USDA will probably have to increase their number up from the 4.95bln. Will have to lower inventory by by 5B Lbs. • Trade is waiting for a mandate to be set for 2015/2016 – so that baselines can

be set.• ADM says it has shifted production of biodiesel to other products at its North Dakota

plant and will continue to evaluate market conditions and resume production when conditions improve.

daIryButterMarkets are showing some weakness. Overall domestic demand continues to be strong 2 weeks in front of the Easter and Passover holidays. Export demand in January came in 82% lower than last year and continues to be weak. Production is running strong and inventories are expected to build as we get further into spring.

CheeseFor the second week in a row cheese markets ticked upward last week, and now we are trading over the expected range. While a bit higher than markets expected, cheese has traded within this range for the past seven weeks. With domestic and international markets stabilized; milk production strong, and storage levels healthy, we expect markets to continue to trade within the current range through March.

seaFood

shrImp, domestIC (WhItes and BroWns)Shell on Domestic Brown and White shrimp are still in steady supply and prices have remained stable. Supplies of this size shrimp are becoming tight.

domestIC puds: Pricing is stable as the production has slowed down. Packers continue to evaluate inventory levels. There seems to be good supply of medium size PUDS 70/90 to 110/130’s.

CommodIty groCery

shell eggsWith the Easter holiday only 2 weeks away, shell egg markets are climbing for all areas of the country. Supplies are considered tight on the larger sizes. Markets are now higher than last year’s peak Easter pricing on eggs.

mIlk & CreamFor the month of March, fluid milk prices saw slight declines while creams, half & half, and sour cream all saw increases due to higher butterfat pricing. Pricing may increase next month across all items. Production and demand across the country is steady to slightly higher.

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shrImp, Imported (BlaCk tIger and WhItes)The imported shrimp market is still very sloppy! Shell on Tigers continue to fall as do Value Added Whites and Tigers. The outlook is not clear as inventory remains strong and packers continue to look for cash.

CatFIsh, domestIC & Imported domestIC: This market took a turn upward this week as inventories are starting to become tight. History tells us as fish growth slows down product will become tight and prices will rise. Imported: The market is starting to see some upward movement this week as product is getting tighter. Inventories in the US are getting tighter, and in some cases not available.

salmonChIlean Farmed salmon: The Chilean frozen fillet market is seeing some weakening in price due to a good catch year. The Chilean fresh market saw lower pricing due to low demand. This market is becoming sloppy, outlook does not seem clear. Salmon farmers could react by letting fish stay longer in the pond to get the price back up. WIld alaskan salmon: The net king market trended lower and a few still lower offerings are noted. Supplies of net kings are fully adequate for a lackluster demand. The troll king market is unchanged along with the Sockeye, Chum, and Coho markets.

mahI mahI Fishing in the South and Central is almost over with very little catch now. Pricing is stable but overall outlook for late Spring and Summer is higher pricing as the Winter catch did not live up to its projections.

sCallops sea: Pricing saw some weakening this week as the new season kicked off on March 1st. Outlook is still unclear but all signs point to a lower year for Scallop pricing. Bay: Pricing unchanged this week.

tIlapIaPricing and supply are now stable and the outlook is stronger prices after the Chinese New Year as producers and growers have said they will slow down production to get the price up. Inventories are currently in good shape.

WhIteFIsh Complex (Cod, polloCk, haddoCk)Cod: The market for Atlantic Cod is on the rise. Pacific Cod is showing signs of higher prices with the new season 3-4 months away and Atantic Cod being high. polloCk: The market remains stable to lower. Inventories are good and the Alaska Seafood Marketing Association is looking to promote heavy in the US. Look for bargains in the near future on Alaskan Pollock filets and imported Pollock fillets. haddoCk: Inventories have rebounded and we will see lower prices in April and May coming out of the Lenten season. Current outlook for the summer is good, with higher inventory and lower pricing.

kIng CraBred & golden: The new quota with a 25% increase has caused prices to weaken. Look for lower prices on the smaller sizes of Red and Golden King Crab. Only time will tell as boats and product starts to hit the US Mainland. Cost of money in China and Japan may deter them from buying heavy. This will leave more product for the US and if predictions are correct we should see lower prices.

tuna, yelloWFIn (Frozen steaks & loIns)The market rallied due to higher replacement costs and thinning inventories in the U.S. Outlook for the end of 2015 is higher cost and a shortage in the market.

CraBmeat (Blue & red, pasteurIzed)Imports on Blue Swimming continues to be good and prices are starting to trend down. Red Swimming crab imports have slowed down and movement is strong. Prices look to be headed up but everyone is watching movement.

snoW CraB(Canada & alaska)Alaskan crab is now starting to get into the lower 48’s. Production up to this week has been good; however, fishing was poor last week which is keeping this market unsettled at this time. Canadian Crab still has inventory from the 2014 season, and most producers feel the season will kick off the 1st or 2nd week in April. Pricing on Canadian is still up in the air at this time. loBster taIls Warm Water: This market has become stable after Valentines Day. north amerICan loBster: Pricing is now stable at high levels. Inventories are tight on most sizes. Market outlook continues to be expensive until after the New Year. Live lobster market is steady to strong. Lobster meat is also firm

seaFood (Cont’d)

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vegetaBlespotatoesRussets: The Idaho Russet potato market remains unchanged this week with steady pricing and larger sizes going for a premium. Growers continue to report good quality for both Burbanks and Norkotahs. The market and demand for non-Idaho remains steady.

Reds and Gold’s : Currently, the red potato market is seeing slight downward pressure for both A and B-size potatoes. Storage crop is currently available from North Dakota. New red potatoes crop are now available from Washington and Florida. It is reported that the quality is good and A size yields are above average.

White/Yellow Potatoes: The yellow potato market remains steady for product shipping out of Colorado, Michigan and Canada. Supplies are starting to get tighter as growers finishing up on their storage supplies.

garlIC The market is down this week for garlic. West Coast pricing has come down on the Chinese Peeled Garlic. There is a good supply of garlic moving into the West Coast markets, and for now, the Port issues have been resolved Argentine Garlic is still in the market. Mexico will start harvesting garlic this week (Mexican Purple Garlic), and we could see that move into US Markets in about 5 to 6 weeks once the product is cured, packed, and ready for shipping.

CaBBage The market on cabbage is slightly down this week with moderate supply and demand. Quality continues to be good.

leaF lettuCe Romaine market is up slightly this week. Romaine, green leaf and red leaf lettuce supplies are stable this week. With the warmer temperatures and increased humidity, there are some quality concerns. Many are reporting mildew as well as seeders. Huron production started with light supply this week with Yuma finishing up next week.

ICeBerg lettuCe Lettuce supplies are going to be light for the next few weeks as shippers transitioning from Yuma to Huron. Prices continue to increase. There are some concerns with quality as many growers are reporting issues with mildew.

onIonsThe yellow and red jumbo onion market is showing an increase as several growers decided to pull the plug and finish their Idaho production early due to quality. As we get later in the season, we will begin to see quality starting to get worse and shelf life get shorter. Look for this market to be more active as demands outpace supplies.

ChIle peppersThe market is up this week on Chile peppers with lighter supply and increased demand on mostly Jalapeno and Serrano. There have been reports of lost production in growing regions caused by plaque.

CuCumBersThe Florida spring crop has started with light volume while Honduras supply continues to winding down. Select cucumber continues to remain active as supplies are still 2 weeks away from meaningful volume. Nogales continues to be the major sourcing point for the West coast. Prices are higher on all grades as rains have affected both quantity and quality from this region.

squashThe markets for both green and yellow squash are active as price continues to increase in all growing areas. Supplies remain tight and recent weather has caused scarring and shorter shelf life due to decay. Quality continues to be variable from all regions.

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tomatoesRounds: The markets are mixed for round tomatoes depending on size out of both Florida and Mexico growing regions. Look for prices to continue to go up the next few weeks as a result from the cold front in Florida a few weeks ago. Quality continues to be very good.

Romas: Eastern and Western supplies continue to be extremely tight, which is causing the markets to be active on all size. At this point the quality is good, but the weather may cause issues in the near future.

Cherry and Grape: East coast growers are reporting good quality for both grape and cherry tomatoes. Supplies on grapes tomatoes remain steady while cherries are lighter this week. Supplies from Mexico are now crossing at Baja in addition to Nogales. Prices are steady to down and quality is variable green BeansThe market is up this week on green beans with lighter supply and good demand. Mostly weather related issues are being reported.

eggplantSupplies continue to be tight while the market remains steady with weaker demand this week. Quality is variable due to rains and wind.

Bell peppersEast coast supplies continue to be strong and quality is reported to be good. Prices are up due to strong demand. West coast supply remains light. Rains are causing virus issue which have lowered yields and caused FOB prices to be stronger than last week. CarrotsThe market is steady this week on carrots. Both supply and demand are steady as well. Jumbo sizing is better and the quality is good.

CeleryThe market on celery is steady this week with moderate supply and lighter demand. Quality and sizing continue to be good.

green onIonsThe green onion market is slightly down this week. Supplies are lighter with moderate demand. Quality is good.

CaulIFloWerThe market on cauliflower is steady this week with lighter supply and good demand. Most shippers are finished in the desert growing region and the new growing areas have yet to kick in. Some smaller sizing is being reported.

asparagusThe asparagus market is up this week with lighter supply and moderate demand. Quality is good. Mexico is the main growing area right now.

BroCColIThe market is steady this week on broccoli with lighter supply due to the desert ending sooner than scheduled and the cooler temperatures in California growing regions.

produCe

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tropICalpIneapplesThe pineapple market is steady at higher levels. Expect limited stocks until mid-April. Quality is good.

BananasFruit is becoming more readily available now that the ports are open again, but the market is still higher than normal due to weather related issues that affected Central American crop production.

avoCadosThe California crop is starting to produce good volume, but not enough to meet demand on larger fruit. 48’s and larger seem to be the most sought after sizes, while 60’s seem to be the most popular substitute. Mexican Avocado crop production is still going strong and will continue to do so until about April, when the season ends. More fruit has been making it across the border; prices are steady, except for 60 ct where the market is up.

melonsCantaloupesThe cantaloupe market is very strong and tight on both coasts, but will start to ease up by middle to end of next week as more product starts arriving from Guatemala and then the following weeks more volume arriving from Honduras. The overall quality is very good on the Honduras fruit with nice clean net and a mostly green to straw cast and excellent internal color and sugar. The market is down, but should keep steady until around the middle of April and strengthen until California and Arizona start in the first week of May.

honeydeWsThe honeydew market is up slightly as we are seeing offshore fruit as well as Mexican honeydews on the market. The overall quality is very good with excellent green to cream cast and great internal color and sugar. Expect the market to keep steady and possible ease a bit as we see more offshore arrivals in the next few weeks.

BerrIesBlaCkBerrIesThe blackberry market is very tight. Blackberries are in very short supply after the rain and hail in Mexico, demand exceeds supply. This item is subject to prorate or cancelation

straWBerrIesThe demand is light and the market is down with regional variability in quality. The market continues to be oversupplied. The recent extreme heat will cause a surge in production, although there might be some quality affected. Product is currently being sourced from Southern California, Baja and Central Mexico.

raspBerrIesThe raspberry market continues to be tight and will continue to be for the foreseeable future, even with production slowly increasing as we transition into spring. Quality is ranging from good to excellent. The next few months will be sourcing more and more from Central Mexico.

grapesThe market is split on reds as we are seeing the end of the Chilean flames and will see more crimsons and other red varieties through April until we start California and Mexico fruit around the first week of May. There is a wide range in quality and prices for the flames. The greens are fairly steady other than some amber fruit that will be priced much lower than clean green fruit. The overall quality is good with fruit eating very well and sugar content excellent.

BlueBerrIesThe blueberry market is still in a demand exceeds supply situation, more and more production will be coming in as we move into the spring. Chile is done for the season. Quality varies from average to excellent with some very high quality coming out of Mexico. Quality is the main factor in price.a small way with both FL and CA reporting small volumes. Quality reported as good with domestic fruit.

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hangIng FruItapplesThe apple market remains unchanged. Even with the high demand from the export trade, there still remain plenty of supplies. The red delicious prices are at an all time low on large sizes and remain to be the cheapest deal out there.

pearsThe pear market remains basically unchanged. The last of the varietals are dwindling, but the quality remains good. Imported Bartlett pears have good supply and the prices should start to come down.

CItruslemonsLemons are still peaking on 95’s, 115’s and 75’s out of District 1. District 2 is peaking on 140’s, 165’s and 115’s. District 3 is pretty much done for the season except for a few sizes, 75’s and 95’s. The fancy to choice ratio is 85/15 in D-1 and 60/40 in D-2. With the warmer weather hitting the San Joaquin Valley/CA Coast, look for the lemon crop in D-1 and D-2 to color up quickly and grow in size structure. There will be plenty of big fruit for the months to come.

orangesThe size profile out of the San Joaquin Valley is peaking on 72’s and 56’s. Smaller fruit (88’s – 138’s) firm up in price due to lower availability. Some packers have started harvesting late lanes, which is very early for this time of year. The cara cara variety is winding down towards the end of March/early April. The size and eating quality remain good.

lImesLimes are in very short supply due to rainy weather and few arrivals coupled with increased demand for the holidays. This market is expected to be a high and very strong market until possibly mid April.

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