Shrimp market still competitive despite announcement of antidumping duties
Reactions to the Department of Commerce’s preliminary determination in the antidumping duty (AD) investigation of frozen warmwater shrimp from Ecuador and Indonesia were mixed, but it’s clear that the trading environment is still competitive.
Looking first at Ecuador, Sociedad Nacional de Galápagos C.A. / Marina del Rey was slapped with a 10.58% dumping rate. The deposit rate (adjusted for subsidy offset) is 10.58%. The dumping rate for Industrial Pesquera Santa Priscila S.A./Tropical Packing Ecuador Tropack S.A. is 1.54%, which is de minimis as its less than 2%. All others have the 10.58% dumping rate, with the deposit rate at 10.18%.
Indonesian exporter PT Bahari Makmur Sejati has a 0.00% dumping rate, but PT First Marine Seafoods/ PT Khom Foods was hit with a 6.30% dumping rate. All other Indonesian exporters/ producers have a 6.30% dumping rate.
The next date of interest in the antidumping investigation of frozen warmwater shrimp from Ecuador and Indonesia is October 4, 2024. At that time commerce will release its final determination.
Market prices, in recent weeks, have remained mostly steady, but with scattered discounting noted as marketers attempt to keep buyers interested.
Frozen Tilapia market facing supply shortages and supply chain distruption
The tilapia frozen fillet market from China is experiencing significant turbulence due to various supply and demand factors. U.S. importers face low inventory levels as adverse weather conditions in producing areas within China in April and premature harvesting have delayed expected improvements in supply. Guangdong and Hainan, two major tilapia farming regions, have been hit by excessive rainfall and extreme heat, respectively, leading to higher mortality rates and further supply constraints. Packers are now hoping for relief by July or August, but continued tight inventories are causing upwards pricing pressure.
Premature harvesting by farmers, driven by fear of market collapses and current demand levels, results in smaller fish and reduces overall supply. Additionally, freight rates, container shortages, and supply chain disruptions add complexity to the market. Freight rates from China have sharply increased due to geopolitical tensions and shipping route disruptions. Traditionally, Chinese packers offered Cost and Freight (CFR) pricing, but many have now shifted to Free on Board (FOB) pricing, placing the burden of fluctuating shipping rates on buyers.
These factors contribute to tight inventories and upward pressure on prices, particularly for larger sizes fillets. The situation is expected to persist through the summer, with potential relief later in the year, as market participants plan for continued volatility to navigate these uncertain conditions.
Record high cattle weights upend beef market in 2024
One of the biggest factors impacting the boxed beef market in 2024 has been the historically high cattle weights seen so far this year. Weights remain at the highest levels seen in Urner Barry’s tracked history at this point on the calendar. As of May 25, our latest data, live cattle weights came in at an average of 1,399 pounds, up 50 pounds from this time last year, or 3.71%. Dressed weights are in a similar spot, coming in at 851 pounds, up 38 pounds from last year, or a 4.68% jump. Now, weights are expected to begin to move lower with summer on the horizon. However, historically the downtrend is well underway by the end of May and that has been far from the case.
The story behind the contra seasonally strong cattle weights comes down to the extremely strong cash cattle market. Cattle feeders have witnessed some record-high prices for cattle, and the cost of gain is conducive to add pounds for margin creation. Despite the warmer weather set to impact the weights and grading of cattle, strong cash cattle prices will continue to incentivize feeders to make cattle weigh as much as possible. At the end of the day, the record-high weights have impacted the availability of select graded product, which has tightened significantly. While on the other hand, supplies of higher-quality product like prime or upper 2/3rds choice has become more available and impacted prices to the downside. It will be interesting to see how weights fare as heatwaves begin to impact cattle country and if they are able to maintain these strong weights for both dressed and live cattle.
Bone-in Ham export values to Mexico: 10-year highs
Values for Bone-in hams for export to Mexico are currently at 10-year highs, after a week of rebounding demand from our neighboring nation. The current average of $92/cwt is the second highest level since the start of 2024, with the highest peak in value coming in mid – April as values rose to an average of $98/cwt. Current levels reside well above the 10-year average mark by a margin of 28%. Recent strength of the Mexican Peso against the US Dollar attributes to a favorable trading environment for Mexican importers paving the way for added export opportunities. Recent influx of Brazilian pork material into the Mexican market has been marred by recent flooding activity in Brazil’s most prominent pork producing region of Rio Grande do Sul, which may present additional opportunities for US exporters of bone-in hams into Mexico. That said, export volumes, specifically to Mexico have increased by 8.8% week-over week but remain at 17.9% below year-over year levels.
