13 September 2024

12 minute read

By: Jim Wyckoff

North America

Asia

Weekly USDA US beef, pork export sales

Beef: Net US sales of 11,400 MT for 2024 were down 31 percent from the previous week and 41 percent from the prior 4-week average. Increases were primarily for South Korea (3,200 MT, including decreases of 300 MT), Mexico (1,900 MT, including decreases of 100 MT), Japan (1,500 MT, including decreases of 200 MT), Canada (1,100 MT), and Taiwan (1,000 MT, including decreases of 100 MT). Exports of 11,800 MT were down 21 percent from the previous week and 16 percent from the prior 4-week average. The destinations were primarily to South Korea (3,100 MT), Japan (2,600 MT), China (1,800 MT), Mexico (1,200 MT), and Taiwan (600 MT).

Pork: Net US sales of 29,700 MT for 2024 were up 43 percent from the previous week and 15 percent from the prior 4-week average. Increases were primarily for Mexico (14,200 MT, including decreases of 200 MT), Japan (4,300 MT), Colombia (2,400 MT, including decreases of 100 MT), China (2,000 MT, including decreases of 200 MT), and Canada (1,400 MT, including decreases of 700 MT). Total net sales of 100 MT for 2025 were for the Dominican Republic. Exports of 25,700 MT were down 8 percent from the previous week and 10 percent from the prior 4-week average. The destinations were primarily to Mexico (10,700 MT), Japan (3,800 MT), China (3,200 MT), Colombia (1,700 MT), and South Korea (1,600 MT).

Chinese meat imports have declined significantly compared to previous years

Through the first eight months of 2024, China imported 4.40 million metric tons (MMT) of meat products, down 13.9% from the same period in 2023. In August 2024, China imported 565,000 MT of meat, which was 9.9% lower than August 2023. Beef imports have been particularly affected, with volumes down 27% year-over-year in July 2024.

Several factors are contributing to lower Chinese meat imports in 2024:

• Economic headwinds are impacting consumption of both pork and beef.
• China has ample domestic meat supplies after building up stocks in 2023.
• Pork production in China remains high, reducing import needs.
• Chinese consumers are seeking cheaper protein options due to economic slowdown.

Import bans on some U.S. meat facilities have restricted supply.

Pork

• Pork imports may grow marginally to offset a forecasted 3% decline in domestic production.
• China's pork output fell 0.4% year-over-year in Q1 2024, the first quarterly decline in nearly 4 years.

Beef

• Beef imports are expected to decline in 2024 due to high year-end inventory and flat demand.
• China's share of global beef imports is forecast to be 5% below 2023 levels.

Poultry

• Poultry meat imports accounted for $282 million in July 2024, resulting in a negative trade balance.
  

Impact on global trade

• The U.S. has seen a fall in meat exports as China scales back imports.
• Brazil has increased beef exports to China, up 10.2% in the first half of 2024.
• Australia has shifted more beef exports to the U.S. and Japan as Chinese demand weakens.

Bottom line: While there have been some month-to-month fluctuations, overall Chinese meat imports remain well below 2023 levels as domestic production remains high and economic factors dampen demand. This has led to shifts in global meat trade flows, with exporters like the U.S., Brazil and Australia adjusting to changing Chinese import patterns.

Highlights of US pork group virtual briefing on key challenges

Bottom line issues for National Pork Producers Council:

Brian Humphreys, CEO of the National Pork Producers Council, said: We’re here to find solutions, not just discuss challenges. We need a 2024 Farm Bill — not an extension. We need a legislative fix to California's Prop 12, resolutions to the labor shortage, and an active trade agenda. NPPC says moving a new farm bill this year with language restricting state animal welfare rules is the group’s top priority.

• Need for new farm bill: “With all the stress on farmers now, it's important that we get this moved now while we've got the opportunity," Duane Stateler, president-elect of NPPC, said in the virtual briefing. "If the farm bill goes into next year, it starts all over. We have many good things in this farm bill which makes it imperative we get it done in 2024," Lori Stevermer, NPPC president, said in the briefing.
  

• Proposition 12: "The 2024 Farm Bill is a golden opportunity to address a top issue for pork producers across the country – California Prop 12," Stevermer said. Proposition 12, a 2018 California ballot initiative, prohibits the sale of uncooked whole pork meat not produced according to the state’s arbitrary housing dimensions. The initiative places the cost and compliance burden on pork producers, who are nearly all located outside of California, and puts the industry at risk of significant consolidation, NPPC argues. The Supreme Court of the United States said this is an issue for Congress to solve, and NPPC has been urging passage of the farm bill which includes a federal solution to Prop 12. "We cannot continue down a path of unscientific rules and regulations," Humphreys said on the call. "It's not a question about what has happened, but it's a question of how do we move forward and protect the U.S. from this patchwork of regulations? We appreciate the bipartisan solution in the farm bill to make that happen." Stevermer said Prop 12 impacts extend beyond producers as it has also resulted in higher prices for consumers. “Pork prices are up on average 20% since Prop 12 went into place, and the supply is down about 20% so that's not good for consumers, and it's not good for farmers either,” she said.

• Labor issues remain a concern, with the group presses for improvements to the TN skilled guestworker visa program. NPPC said policy concerns include addressing the persistent ag labor shortage and contending with inflationary impacts on production costs. While ag labor discussions often focus on the H-2A ag guestworker program for low-skilled farm laborers, pork industry officials said they also face difficulty using the TN visa program, which allows businesses to procure skilled workers from Mexico and Canada. The State Department recently made changes to the program aimed at streamlining it, but NPPC officials said they have effectively closed off the ability to use TN visas by the pork sector. “It just seems like every day there's less and less TNs approved,” said NPPC Vice President Rob Brenneman. He explained that the program has become more important in helping producers secure the workers skilled in utilizing new production technologies that are difficult to find in the domestic labor market. “I think it's absolutely absurd that we just keep getting TNs denied … we've been to the State Department, and we've been to the White House and had conversations, and it just seems like they're doing everything in their power to do the opposite of what we're asking because nothing's changed,” Brenneman said.

• Cost of production. NPPC officials said that besides labor shortages, producers also continue to grapple with higher production costs, though the growth in costs has slowed in areas like feed. Other fixed costs like transport, labor and utility bills mean overall production costs remain roughly 25% higher than they were three years ago, officials stressed. “While we're getting a little relief on the feed side, we're still seeing elevated costs of production,” said NPPC board member Scott Hays.
  
  
• CAFOs: Officials were asked to weigh in on a lawsuit from environmental groups seeking to compel EPA to act on their petition seeking an overhaul of how the agency regulates concentrated animal feeding operations (CAFOs). NPPC and other livestock and poultry interests are backing EPA’s decision to deny the petition, as the question heads to federal court later this week. Calling the CAFO lawsuit “an attack on ag by activist groups,” NPPC’s Statler said, noting EPA was right to deny the petition. “What they've asked EPA to do was illegal.” Stateler praised EPA for engaging with stakeholders including NPPC on the issue to gather information before considering any additional action. “They decided to take a look and look at the facts, and they turned it over to explore the issues that are really involving all CAFOs and the ag groups, including NPPC, are participating in that process,” he added, saying the group looks forward to finding a solution that works for all involved.
  
  
• Trade policy: NPPC continues to urge new trade agreements, but acknowledges new FTAs are unlikely. “We know that's not how things are being done — in the manner that maybe they were, you know, 10 or 15 years ago,” Stevermer said regarding new FTAs, but she added that such agreements are not an end all be all for trade. Trade programs like the Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA), both pending renewal, are also important for the sector, she said.

US confirms first H5N1 case with no known animal exposure

A Missouri resident has been confirmed as the first case of the H5N1 virus with no known exposure to sick animals, according to the CDC. The individual, who was hospitalized and has since recovered, had no work-related contact with animals. The infection was identified through routine flu surveillance, rather than the targeted H5N1 program typically used for farm workers. This marks a shift in how the virus is being monitored and may indicate new patterns of transmission.

FAO food price index slips again in August

The UN Food and Agriculture Organization global food price index slipped 0.5% in August, the second straight small monthly decline, as decreases in sugar, meat and cereal grains outweighed increases for vegoils and dairy products. The August index was down 1.1% from last year. Compared to year-ago, prices declined 12.0% for cereal grains and 23.1% for sugar, while they rose 3.6% for meats, 14.3% for dairy and 8.1% for vegoils.

Weekly USDA dairy report

CME GROUP CASH MARKETS (9/06) BUTTER: Grade AA closed at $3.1750. The weekly average for Grade AA is $3.1594 (-0.0226). CHEESE: Barrels closed at $2.2750 and 40# blocks at $2.2700. The weekly average for barrels is $2.2588 (+0.0473) and blocks $2.2363 (+0.1083). NONFAT DRY MILK: Grade A closed at $1.3650. The weekly average for Grade A is $1.3550 (+0.0435). DRY WHEY: Extra grade dry whey closed at $0.5875. The weekly average for dry whey is $0.5725 (+0.0120).

BUTTER HIGHLIGHTS: In the West, butter demand varies from steady to stronger for the retail and food service sectors. In the Central region, butter demand is stronger for both as well with seasonal strength gathering. For the East, retail demand is stronger, and food service demand is steady. Cream supplies are looser with the holiday weekend contributing to market availability of loads. However, not enough to make cream volumes abundantly available throughout the country. Stakeholders convey cream availability remains relatively tight in the East. Butter production paces mostly vary from steady to stronger. Bulk butter overages range from minus 7 to 10 cents above market, across all regions.

CHEESE HIGHLIGHTS: Contacts relay cheese production schedules vary from steady to lighter throughout the U.S. In the East, milk availability for Class III processors is tempered by strong Class I bottling demand. Labor Day weekend freed up some spot milk temporarily, but contacts continue to share seasonally steady to lighter cheese manufacturing activity. In the Central region, contacts report spot milk prices ranging from $1/cwt to $2.50/cwt over Class III. That said, some cheesemakers relay getting no spot milk offers, and cheese production remains seasonally lighter. Some processors share they are shifting production focus away from blocks and back into barrels. Contacts in the West are running steady cheese production schedules despite tight spot milk availability. Some manufacturers share there are limited cheese inventories available for interested spot purchasers.

FLUID MILK: The unceasing milk production carried on across the country despite the holiday weekend. Farm level milk production proceeds to weaken over much of the East and Midwest. Processors there are feeling the pinch in production. Reported spot milk prices in the Midwest ranged from $1-over to $2.50 over Class III. Cooler temperatures are being seen over some parts of both regions, and farmers are anticipating the effects in the coming weeks. Arizona and the Pacific Northwest are also experiencing a dip in milk levels. Most of the mountain states have generally steady production. Increased levels of milk are being seen in California and New Mexico. Nationwide, school schedules have pushed Class I demand for bottling to its peak. Class II and III production is mixed as Class I draws on available milk supplies. Demands for cream and condensed skim are steady to strong. Spot loads of condensed skim are a rarity in most of the country. Cream supplies remain tight, but a small gain in cream availability was seen over the holiday weekend. It is not expected to last long, but Class IV manufacturers are making the most of it. Cream multiples range from 1.15 – 1.50 in the East, 1.16 – 1.34 in the Midwest, and 1.10 – 1.30 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices moved up at every facet in all regions this week. Clearly, markets have found some bullish tailwinds with stronger demand and tightening supplies. Dry buttermilk prices were steady in the Central/East regions, while moving higher in the West. Dry buttermilk Q4 demand has begun to stir potential market bulls. Central and West whey prices were steady to higher, while East whey prices held steady. Whey supplies are noted as very tight according to a number of processors. Lactose prices were steady to slightly lower, as international demand has been less consistent recently. Whey protein concentrate (WPC) 34% prices edged higher at every point this week on renewed interest from end users, particularly those who can alternate between WPC 34% and NDM. Dry whole milk prices were higher this week, as interest remains steady, but inventories are, and have been, noticeably tight. Rennet and acid casein prices were steady on quiet trading activity.

ORGANIC DAIRY MARKET NEWS: The first publication of the Pennsylvania Monthly Organic Dairy Report was released on September 6, 2024. The Vermont Monthly Organic Dairy Report covering June 2024 showed the weighted average price for fluid milk decreased from May, while the total volume and average daily production per cow also decreased. The USDA AMS National Organic Program (NOP) Organic Insider sent out on August 30th discussed an upcoming meeting of the National Organic Standards Board (NOSB) in Portland, Oregon in October 2024. Monthly export volumes for organic milk during July 2024 were up from the month prior, and up from July 2023. Total organic dairy ads increased in the week 36 retail ad survey. Every organic commodity present in last week's survey, except sour cream, appeared in more ads this week. This week's most advertised organic dairy product was milk. Organic cottage cheese, cream cheese, and ice cream appeared in this week's retail ad survey after not being present last week.

US RETAIL REPORT: Conventional dairy advertisement totals slid 11 percent lower, while organic retail dairy ad totals increased 42 percent during week 36. Conventional ice cream, in 48-to-64-ounce containers, for the second consecutive week was not the most advertised dairy item, as that item’s ad totals decreased 43 percent from last week. Conventional sliced cheese in six-to-eight-ounce packages was the most advertised item this week, while half-gallon milk returned to its normal top spot among organic dairy items, after a 65 percent increase from last week’s ad totals.