Shrimp:  Big topic continues to be the oil spill in the Gulf and its impact on the domestic supply but by all indications, there is enough product to cover short term needs.  The biggest unknown, is what supplies will look like in 2011. Shrimp seasons start in waves each year and due to the unseasonably cold winter we had, most areas have been delayed a couple weeks.  Texas and Florida seasons are open and they are shrimping at full capacity.  Most packers still have unprocessed shrimp in the freezer from last season so short term supply looks favorable.

Snow Crab: The Canadian season is off to a slow start and with reduced quotas and the parity in the Canadian currency, expect continued tight supply and higher prices this summer.

Pollock: Fishing for the A season shut down April 17^th which left some processors short on 4-6s forcing them to go on allocation.  2-4s are sufficient but not abundant.  The market is expected to strengthen over the next few months.

Tilapia:  Pricing on product of China is experiencing downward pressure due to increasing supply on smaller size fillets. Non-Chinese options are available but expect higher prices.

This week’s markets are rated for the most part full steady with some items firm.  Inventory levels are limited across most lines.  Retail ads and foodservice needs are picking up, therefore putting some items in a rather tight supply. This is especially true with WOGs and whole birds.  These markets have advanced all week.  We could possibly see this trend continue as fast food is driving this market. Whole breasts and breast fronts are well supported. Dark meat overall is steady.  Drums, thighs and leg quarters are receiving the most attention.  Wings appear to be in balance overall and are about steady.

 

Demand remains fair.  Supplies on whites appear to be good.  Browns appear to be longer on inventory and thus helping ease pricing pressures on that category.  Total egg inventories started the week off at 3% higher than previous week. Whole egg and yolks are listed as steady.

 

The Block market continues to hold steady.

The Barrel market is keeping pace with the block market this week and remains relatively unchanged.

The Butter market has inched slightly higher the past few weeks but has recently showed signs of easing pressures as the market eased off slightly on Wednesday.

Non Fat Dry Milk is holding steady.

Live hogs are in short supply. Processors that covered their needs for this week held firm but the ones that had to cover this week’s production schedules were forced to pay up money. This forced a wide range in the market this week from $1.10 below last week to $1.39 above last week. Suppliers have cut back on production in an attempt to counter the high price of hogs.   

Ham values declined. Present price levels have blunted the export demand that was propping up this market. Bellies are steady. Buyers had been buying fresh bellies and freezing them. This has allowed them to now run off this inventory and pass on the high fresh market we presently see. Trimmings have weakened also but this is felt to be short lived. The Memorial Day demand for hot dogs will soon kick in. Bone in loins are steady. Boneless loins brought small premiums early this week. Butts dipped a little early in the week but then recovered by midweek. Spareribs also reflect the forward purchasing strategy of many buyers. Many heeded all the talk of allocation in May last month and have their freezers full. Retail adds on spareribs are plentiful for late May so this will last only as long as inventory does.

Suppliers were reporting a +$2.60 per head margin at mid-week. Reduced production is working to force down the live hog price and is also working to strengthen the suppliers hand against the high inventory, “wait and see” attitude of many pork buyers. The market fundamentals are still strong so this lull will only last until demand depletes the stock pile of product currently in freezers.

 

Live cattle traded between $98.50- $100.00 this week. The kill is grading 63% choice right now. The 5 year average is 55% for this time of year. The choice/select spread was at $3.96 cwt.  Cattle continue to run light.

There was strong demand for end cuts this week fueled by a 23% increase in exports compared to this time last year. Chuck rolls and flats garnered a lot of attention here. Middle Meats have softened a little. Grinds and trimmings continue with a firm call. Briskets have slowed down in their descent and may be approaching the bottom. We could see a little more down side potential but the free fall is over. Packers were reporting a +$63.95 margin per head at midweek so we shouldn’t see a lot of production cuts as long as the margins are in the black like this.

 

Tomatoes are in the early planting stage in California. Early expectations are for another strong crop year with weather willing.  Reports from canners are that the raw product price to farmers has not yet been contracted which is a little late. Canners are leaning toward the possibility of a lower contract price for raw material versus last year. Expectations are for pricing for finished product to hold steady with the possibility of some declines around August.

 

Vegetable canners are leaning toward decreases in price with the arrival of this year’s crop. While it is still very early and planting has only just begun there are hints from canners that carryover is possible. The last few years there has been little to no carryover on the vast majority of items. Fuel costs and weather will play a significant role but there are hints at a few products having carryover inventory this year.  This year, prices will not be as effected by acreage issues as in recent years. This could result in price decreases during the August canning period.  Weather will play a major part in the determining the price.  Potatoes and beets are not expected to see decreases in price anytime soon. These products are in short supply now and are expected to continue this trend.

 

There is still a tremendous amount of price activity for imports for arrival.  Pineapple and tuna, two of the biggest movers of imports, are already seeing higher prices for arrival and that is influencing greatly the price of product already here. It is not in a crisis mode but we haven’t seen upward pricing pressure in imports in awhile. Again, it should be said that with new packs coming in and pricing pressure for these new packs a vigilance in quality standards should be maintained.

 

Wood pulp paper board markets continue to be strong, up 30% over same time last year.  Exports and earthquake in Chile continue to be driving factors.

 

Resin prices are up .28 cents per pound over same period last year.  This is keeping all cups, containers, utensils, can liners, and film products pricing strong.  There are some indicators that the market my soften in the fall.  Strong forces behind the continued high resin market are exports and oil prices.

 

CBOT soybean futures are on the defensive, with active contracts sliding to three-week lows. The combination of bearish outside market influences, a pickup in South American sales and a good U.S. planting pace is weighing on prices.  However, the uncertainties of a long growing season and solid underlying demand serve as supportive features limiting downside momentum.