Both LLDPE and PVC film prices are increasing.   Analysts report that multiple producers of PE stretch-films have implemented price increases in the 5% - 8% range beginning in January 2010.  Several major producers of PVC food-films have also published increases in the 4% - 6% range, with others expected to follow suit.   Aluminum foil prices continue to edge upwards globally amid concerns about various supply issues.  At least two major foil manufacturers in the USA announced 8% price increases effective February 1, 2010, following others who implemented similar increases in January.

 

Of the higher volume canned goods, beets and potatoes are the domestic canned goods of the most concern in terms of supply and price. Canners were not able to achieve their anticipated packs due to weather and size issues. For this pack year, like last year’s pack, there will be a very tight supply. This means that pricing should remain firm. For these items there is a great chance of allocations resuming as the year progresses. Other vegetables seem to be in good supply. Tomatoes seem to have none of the supply issues of a year ago. Whole peeled tomatoes, diced tomatoes, and paste were extremely difficult to source. This year the opposite seems to be true, so much that prices are hinting at softening. While this year’s whole peeled tomatoes are more abundant and pricing is lower than last year, value added items like diced tomatoes are also at lower price levels than last year, accentuating the value to the operator versus whole peeled tomatoes.

 

Tuna is now the hot item in the import world. Prices are firming and rapidly as supply issues have come geyser-like into the picture.  Fish waters are being closed; some canners who have been operating at capacity are now short on supply, and the price of the raw product has jumped in a short period of time. Those who bought in October and November are going to enjoy an advantage as replacement costs will be significantly higher. Product that is in the country now can still be bought at a bargain relative to its replacement costs, but buying for arrival will be at higher levels. 

 

The large US and world soybean supply situation and the pending harvest of a record large South American soybean crop, has led to the bearish position in both canola and soybean oil.  Also contributing to the price weakness were lower calls for CBOT soybean and soyoil futures. Soybeans  opened mostly lower, and the weakness in canola oil was amplified when the declines in both CBOT soybeans and soyoil expanded toward midmorning on Thursday.

Corn and wheat were lower overnight with pressure coming from outside markets.   The recent action in corn could be  hinting at a set of somewhat higher weekly reporting conditions in the coming days.

 

The markets continue firm this week,  same as what we’ve seen the last few weeks as well.  Short production  verses overall demand, continues to keep product short, although retail ads did pick up late this week. 

Canadian demand coupled with the pick-up in retail needs has kept whole breasts on more solid ground with markets moving upward.  Breast fronts are sourced in some cases more for the wings, which continue to be strong and full steady.  Chunk and trim meat are full steady.Tenders are steady.Dark meat is mostly steady.  Leg and leg quarters rated as steady.

Wholesale trades on larger sizes are at premium to existing quotations. Supply on larger sizes are well balanced to close. Medium demand is mixed across the country with the Midwest reporting premiums on both medium and small sizes.

Eggs for breaking are being acquired above current ranges. In the egg products segment demand for liquid product has increased markedly and with fixed supplies available, certified whole egg, whites and yolks as well as non certified whole egg are moving upward. The frozen and dried segments are quiet.

The northeast Urner Barry for Thursday was at $1.31 on large which was up $.07 per dozen from last Thursday. Mediums were at $1.00 on Thursday in the same market which was up $.05 per dozen from the previous Thursday.

The market is full steady.

 

The live hog market moved down this week as availability improved. Hams showed limited movement and prices held steady. Trimmings were steady to firmer with little or no movement reported, availability is thin here. Bellies moved up as a test of the market.

Movement on fresh pork slowed probably as a result of limited availability. Packers were reporting a positive margin of $8.42 per head on Wednesday. Exports are tracking upward with Japan and Taiwan leading the way. Packers will most likely rev up production some as they are able to get hogs in more consistently and they are in the black. This will continue until the pipe line fills up again.

 

The storms and the holidays are crushing fill rates across the country from the major packers, especially on grinds. 2 major packers filled 81/19 fine ground beef orders with ground chuck this week after cutting this product last week. There are some confirmations out there for next week with chuck subbed again.  Several major packers and re-distributors are unable to locate any fresh 81/19 fine ground beef.

 

Thin meats and grinds advanced in price on Wednesday along with some end cuts. Outsides are expected to come off. Sellers are continuing to get a strong call on spot market inventory. There has been some interest in forward buys at discount to the existing market.

The choice/select ratio is at $5.60 cwt. Packers are reporting a positive margin of $40.00 per head at midweek. This will incent them to produce as much as possible as long as they are making this kind of money. This will fill the pipeline up and availability on grinds will improve as this happens. There is some increased Saturday production scheduled.

Some trade developed on live in Texas at $85.50 cwt.. No trade was established in the north as of Wednesday.

 

During the past month the 40# block market ranged between $1.72  lb. on 12-3-09 to $1.45 on 12-31-09. The average for December was $1.65. As anticipated, the wide block/barrel spread corrected with blocks taking a plunge to close the gap. The spread peaked on Dec., 21 at $.27 lb. favoring the block. By the end of the year the spread had narrowed to $.02 lb.. In the New Year we have actually established an inverted market with the barrel above the block.

Looking forward into the year cheese prices will struggle in  the short term with the end of holiday demand, adequate milk supplies and strong cheese inventories. As we look further out prices will strengthen, driven by a number of key demand factors: