April 12th, 2018

Alerts & What’s Trending


      The Florida Growing Regions continue to experience optimal growing conditions and increased acreage for production, supply and quality should be excellent for the foreseeable future on Bell Peppers and Squash. Florida Tomatoes are expected to finish their transition from winter to their spring crops next week and supplies should be plentiful. Elsewhere, the Lemon Market is beginning its transition from the D1 Growing Region (Central Valley) to the D2 Growing Region (Coastal/Ventura). Historically, pricing usually escalates during the first few weeks. There continues to be a size curve trending towards the Larger sized fruit 95-140. Smaller sized Oranges and Lemons are expected to remain tight throughout April. Strawberry production is expected to spike over the next few weeks due to warmer weather in the growing regions, and current quality is excellent. Raspberry and Blackberry supplies remain limited and minimal quantities are expected to last for the next two weeks. Avocado supplies are expected to increase week over week as the industry begins to prepare for the Cinco de Mayo push. There continues to be a size curve trending towards smaller-sized fruit.



The cold, wet spring in the Midwest has delayed the 2018-19 planting season. Just 2% of corn and spring wheat had been sowed as of April 8th which is behind historical levels. Concerns are building that less corn, soybean, and spring wheat acreage could be harvested this year which would be supportive of those markets.  The sugar markets continue to track below year-ago levels. Sugar supplies abroad, particularly in Brazil and India, are at least adequate for the demand. This, and a deflated value of the Brazilian Real, is weighing on sugar prices. However, the greater risk in prices is to the upside.


The butter market is firming due in a large part to rising world butter prices. This is fueling export interest. U.S. butter exports during February were 19.8% greater than the previous year, while imports were down 2.5%. Domestic butter output was 4.7% better than 2017 which caused the available supply to be 2.3% bigger. Butter prices could remain firm in the near term until the international markets turn downward. U.S. cheese exports in February were up 6.4% from a year ago and the largest for the month since 2015. Export demand may underpin cheese prices this fall.



Beef output last week increased 3.2% and was a whopping 8.8% larger than the same week last year. Cattle slaughter was the strongest since mid-December. Slaughter-ready cattle numbers are anticipated to be big in the coming months which should encourage strong year-over-year gains in beef production. Beef demand has risen and there is indication that retailers will feature steak cuts in the coming weeks. Forward pricing on ribeyes and tenderloins are at a 10% and 11% premium over the spot markets. This should provide modest support the beef middle meat markets in the coming weeks. February beef imports were up 9% from 2017 which may temper lean beef trim seasonal price gains this spring.


Pork production last week fell 2.4% but was 1.3% better than the same week a year ago. Hog slaughter is expected to seasonally decline over the next few weeks. Still, solid year-over-year gains in pork output are forecasted during the next several months. The USDA pork cutout index recently priced at its lowest level for this time since 2015. Yet, solid export demand could support pork prices this spring. February U.S. pork exports were 8.4% better than the prior year and a record. Exports to China were up 11.1% and the best for the month since 2014.


Chicken production for the week ending March 31st rose .8% from the prior week and was up .2% from the same week in 2017. The six week moving average for chicken output is just .9% more than last year. This is due in a large part to disappointing hatchery rates from broiler layers. Chicken producer margins have weakened which could temper year-over-year output expansion later this summer. Recently, the chicken tender price premium over chicken breasts was the smallest since December 2015. The chicken wing price premium over breasts was the tightest since October 2014. This price spread hints that the rising chicken breast markets may take a pause. And, that the downside risk for chicken wings could be limited.


Salmon prices continue to generally track below the previous year levels. During February, the average Atlantic salmon import price was 12.8% less expensive than 2017. Total U.S. salmon imports during the month were bigger by 13.7%, while trade from Canada was up by 18.9%. Salmon prices could generally remain below prior year levels this spring.



The EIA’s most recent retail national average diesel fuel price was $3.043 per gallon, the highest in eight weeks.