Raw Salmon on butcher board

The Dish Market Report – June 28, 2018

Top of Mind News

The Dish Tips

Avocados: Out of Mexico, Avocado Supplies have been severely impacted due to the immense rainfall Mexico has received the past week. The Rainfall has caused harvest delays, and reports indicate that smaller sized fruit is in demand and exceeds supply.
DA Tip: Store Ripe Avocados in the warmest part of the cooler to hinder their continued ripening. Firm or Unripe fruit should be stored at 65 to 70 degrees to ripen and then transferred into the cooler.

Iceberg Lettuce: Iceberg lettuce is currently experiencing lower supplies which have caused pricing to escalate. Supplies are expected to increase over the week which should provide relief in pricing.
DA Tip: Store Iceberg Lettuce in the coldest part of the cooler and out of the drafts, ideally between 32 and 35 degrees. 

The Farm


Chicken production for the week ending June 16th rose .1% from the prior week but was 1.9% less than a year ago. The six-week running total of chicken output is 1% smaller than last year. Yet, lower feed costs for chicken producers have materialized, improving margins. This should encourage better year-over-year gains in output. The USDA is calling for July through December chicken production to be 2% better than last year. Chicken producers may be trying to grow output longer term as well. The number of broiler layers as of June 1st was 3.8% larger than last year. Chicken wing prices are the cheapest for this time of year since 2014. May 31st chicken wing stocks were the highest in 18 months. Still, wing prices usually rise in the summer.



Beef production last week rose 1.7% and was 3.2% bigger than the same week last year. The June 1st cattle on feed inventory was 4.1% larger than the prior year with May placements into feedlots up .2% from 2017. Slaughter ready cattle supplies will be readily available this summer, but there is some concern that a brief supply gap may occur this fall. Strong year-over-year beef output gains this summer should push prices downward into July. May 31st boneless beef stocks were 13.3% larger than the prior year. The 50% beef trim market is usually choppy in July but moves lower thereafter. Since 2013, the average move for 50% beef trim prices from August through mid-October was down 37.1%.



Pork output last week fell 2.7% but was 2.5% better than the same week in 2017. Hog slaughter was the smallest for any non-holiday week since July 2016. Per the USDA, pork production this summer is likely to be 4.2% more than last year. This should keep pork prices at bay. May 31st U.S. pork stocks were 6% more than 2017 with picnics (30%), bellies (94%), trim (49%) and rib (4%) holdings all higher. It was the first monthly decline for bellies since July. History hints that many of the pork markets could seasonally peak this week or next.


The Sea


The Atlantic salmon filet market continues to track at or below year ago levels. This, despite lackluster imports. During April the U.S. imported 8.6% less salmon than the previous year. The value of the U.S. dollar has risen rather sharply since April which makes the U.S. a favorable destination for imports. This could temper salmon prices this summer.



The Garden


The tomato markets have firmed during the last week as the chief harvest areas in both the east and the west transition northward. The warm late spring has caused the tomato crops in the Southeast to recover from the slow start. Tomato supplies typically improve in July. During the last five-years, the larger mature green tomato market has averaged 10.8% below June during July. Lettuce supplies are somewhat limited which is underpinning prices. However, better lettuce supplies are anticipated in the coming weeks.



The Kitchen Sink


Butter supplies in the U.S. have been adequate despite strong exports. As of May 31st, U.S. butter holdings were 8% larger than last year. Further, the stock build during May was the 2nd biggest in 36 years. Solid exports and rising demand for cream could temper the downside in butter prices this summer, though. May 31st cheese stocks were 5.9% larger than 2017 and a record for any month. Further, the May cheese build was the biggest since 1999. The Mexican tariff on cheese imports from the U.S. could keep a bearish bias over cheese barrel prices during the next several months.



The recent tariffs being applied on U.S. grain imports are influencing the grain markets downward. Furthermore, the U.S. corn and soybean crops are off to a great start which is also weighing on prices. But, forecasts are now calling for above normal temperatures for the Midwest. The gain markets are due for a correction higher.




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Nearby WTI crude oil futures have risen 10% in the last week. The U.S. State Department reported that all U.S. companies must eliminate all Iranian crude oil imports before early November. Higher crude oil price is still likely in the near-term.