Wild sockeye and king salmon market update
Sockeye pricing fell slightly this past week due to supply outpacing demand. Bristol Bay started slowly, but landings increased to levels similar to 2023 in week 27. However, week 28 saw another decline, with 9.9 million fish landed, down from 12.5 million in the same week last year.
Copper River sockeye prices also retreated due to strong landings. In Week 22 of 2023, Copper River saw a catch of 265,000 fish. In week 27 of this year, the catch surpassed that total with 285,000 fish. Overall, Prince William Sound is up approximately 35% year-over-year for sockeye, having one of the most robust years in recent history.
Strong landings from Copper River and lighter landings elsewhere have narrowed price differences, with Copper River fish still commanding a slight premium. In early July, Copper River sockeye prices showed a reduced premium compared to last year.
Market participants are also monitoring sockeye sizing in Bristol Bay, as reports indicate smaller and younger fish, which could affect fillet yields in the coming weeks.
King salmon pricing weakened this week for both net and troll– caught fish, attributed mainly to poor demand rather than supply issues. The perception of king salmon as a high-end item may be deterring consumers in the current economic climate, leading some processors to freeze higher– quality fish in hopes of better future value.
Frozen tuna demand is flat while rising freight costs loom
According to the latest U.S. Census import data, year-to-date (Jan-May) 2024 frozen tuna imports from all countries total 31 million pounds, marking a 6.1% increase compared to the same period last year and trending 6.31% higher than their 10-year year-to-date average of 29.1 million pounds. Import trends turned positive for the first time in March 2024, following a slowdown in 2023.
The significant slowdown in food service demand, coupled with questionable, low-priced inventory, pressured the market throughout 2023 and into 2024. Most participants report that the surplus inventory has been reduced, but foodservice sales continue to be sluggish, with summer grilling demand falling flat. In this scenario of subdued demand, overseas replacement costs have adjusted accordingly, with costs from Indonesia and Vietnam trailing their YTD 5-year average by 6.21% and 13.15%, respectively.
Market prices for frozen tuna products including loins, steaks, saku and poke are all currently trading at their lowest levels in the past 52 weeks. While frozen tuna loin prices are trading 2.8% higher than their 20-year average price of $4.96, 6 oz steaks are trailing their 17-year average price by 4.17%.
The stability in the frozen tuna market, marked by consistent raw materials and generally stable prices, has been a constant factor for many years, excluding the COVID-19 years. Market participants are optimistic that equilibrium is returning, bringing renewed stability. However, rising costs such as freight, delays, FDA holds, and storage expenses remain significant concerns. Participants note that freight costs have risen notably since January, now ranging from $10,000 to $12,000 out of Asia. Factors contributing to this increase include port congestion, container shortages, ongoing conflicts in the Red Sea, and a rush of Chinese exports ahead of new US tariffs.
Pork prices sizzle: Bone-in ham in hot demand from Mexico
The rising cost of bone-in ham is a prominent topic in the pork market lately, driven by surging demand from Mexico. This trend, however, is fueled by a few mitigating factors which have supported interest from Mexican importers. While Mexican consumers typically increase their pork consumption during the summer, recently elevated beef prices in Mexico, have produced opportunities for retail features providing consumers with some cost-effective alternatives.
On the production side, some challenges include increased live hog prices due in part to higher cultivations costs and logistical issues surfacing for transporting animals for production. Secondly, concerns surrounding disease impacting herds northern Mexico threaten overall availability.
Despite these factors, US bone-in hams remain a compelling option for Mexican importers due to the current market dynamics. The average price of $110/ cwt as of July 18th, 2024, is slightly above last year’s peak of $108/cwt achieved on July 17th,2023. The current level places this item as the second highest price in the last 5 years. The coming days will be crucial in determining if this trend will surpass the highest peak achieved in 2022, when post pandemic labor issues posed challenges for numerous cuts in the complex.
Australia’s beef sector navigates surge in US exports in 1H 2024
Australia’s beef industry navigated a dynamic landscape in the first half of 2024. Despite being a relatively small cattle-producing country, Australian beef is among the world’s most traded this year. Australia’s beef and veal exports reached 601,408 mt in the first half of 2024, according to the Department of Agriculture, Fisheries, and Forestry (DAFF). This represented a substantial 25.7% increase compared to the same period last year.
The industry saw significant export expansions, particularly to the US, driven by declining US cattle herd sizes and increased demand for imported beef. In the first half of 2024, Australia’s beef exports to the US surged 74.6% compared to the same period last year, reaching 155,430 mt.
The US has now surpassed China to be Australia’s largest customer. In the first half of 2024, China imported 3.29 million mt of meat valued at USD 11.53 billion, marking a 13.4% decline compared to January-June 2023 volumes. Due to broader economic worries, many consumers are cutting back on dining out and meat consumption.
Despite challenges in Asian markets due to weak consumer demand and increased competition from Brazil, Australia continued to position itself as a key player in the global beef trade. Rising output trends since late Q4 last year have bolstered Australia’s export capacity, with year-to-date slaughter figures nearly reaching 3.35 million head. However, concerns are mounting about managing the US export quota. As of early July, Australia had already utilized 40.41% of its allocated quota, raising the need for a cautious approach in the remaining months.
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