19 July 2024

14 minute read

By: Jim Wyckoff

North America

Asia

China to probe EU pork for anti-dumping

China has put three companies from the European Union at the center of its anti-dumping investigation into pork products from the bloc. Beijing has chosen Danish Crown A/S, Vion Boxtel BV, and Litera Meat S.L.U. — the top three exporters of pork products in the region to China — to determine if dumping has occurred and assess the damage to the domestic sector, the commerce ministry said. The investigation, which began June 17, will look into pork and its by-products imported from the EU after the bloc decided to impose anti-subsidy duties on Chinese electric vehicles.

China’s June pork imports continue to lag

China imported 90,000 MT of pork in June, up 12.5% from May but 33.5% less than last year. Through the first half of 2024, China’s pork imports totaled 520,000 MT, down 45.3% from the same period last year.

Weekly USDA US beef, pork export sales

Beef: Net US sales of 15,400 MT for 2024 were up 85 percent from the previous week and 11 percent from the prior 4-week average. Increases were primarily for China (4,700 MT, including decreases of 100 MT), Mexico (2,700 MT, including decreases of 900 MT), Japan (2,700 MT, including decreases of 500 MT), South Korea (1,300 MT, including decreases of 500 MT), and Indonesia (1,200 MT). Total net sales of 100 MT for 2025 were for South Korea. Exports of 15,600 MT were up 9 percent from the previous week, but down 2 percent from the prior 4-week average. The destinations were primarily to South Korea (4,100 MT), Japan (3,700 MT), China (2,300 MT), Taiwan (1,400 MT), and Mexico (1,400 MT).

Pork: Net US sales of 23,700 MT for 2024 were down 11 percent from the previous week and 35 percent from the prior 4-week average. Increases were primarily for Mexico (8,500 MT, including decreases of 600 MT), Japan (3,000 MT, including decreases of 300 MT), China (2,800 MT, including decreases of 100 MT), Colombia (2,100 MT, including decreases of 100 MT), and South Korea (1,900 MT, including decreases of 200 MT). Exports of 31,900 MT were down 2 percent from the previous week, but up 7 percent from the prior 4-week average. The destinations were primarily to Mexico (14,100 MT), Japan (4,600 MT), China (3,100 MT), South Korea (2,200 MT), and Canada (1,800 MT).

Investigation into the human cases of bird flu (H5N1) in Colorado is ongoing

Federal and state authorities are working together to assess the situation. Here are the key details:

• Confirmed cases: The Centers for Disease Control and Prevention (CDC) has confirmed four human cases of highly pathogenic avian influenza (HPAI) A(H5) virus infection in Colorado. A fifth presumptive positive case is pending confirmation.
• Affected individuals: All cases were in farm workers involved in the depopulation of poultry at a commercial egg layer operation experiencing an H5N1 outbreak.
• Symptoms: The workers reported mild symptoms, including conjunctivitis (pink eye), fever, chills, coughing, and sore throat/runny nose.
• CDC response: A multidisciplinary team of nine experts from the CDC has been deployed to Colorado to support the public health response. This team includes epidemiologists, veterinarians, clinicians, and an industrial hygienist.
• Ongoing monitoring: There is continued monitoring of workers, and additional specimens are being tested as part of the assessment.
• Risk assessment: The CDC currently believes that the risk to the public remains low. However, these cases underscore the potential risk of exposure to infected animals.
• Genetic sequencing: Attempts to sequence the virus from clinical specimens are underway at the CDC. This analysis will help determine if there are any genetic changes that could alter the agency's risk assessment.
• Historical context: These are the first cases of H5 virus infection in poultry workers in the United States since 2022.
• Precautions: The CDC recommends avoiding close, long, or unprotected exposures to sick or dead animals, including wild birds, poultry, and other domesticated animals.

Missouri Attorney General Andrew Bailey will intervene in an antitrust lawsuit against Tyson Foods

Bailey will support poultry producers who claim that Tyson improperly sold a chicken processing plant in Dexter, southeastern Missouri, for conversion to an egg handling facility. The lawsuit, led by Grandview Farms on behalf of similarly situated chicken farms, alleges that Tyson Foods engaged in an "anticompetitive and fraudulent scheme to eliminate competition" when it closed its Dexter plant. The closure, which occurred in 2023, affected 683 employees and a broad network of chicken farmers who had contracts with Tyson.

The core of the complaint is that Tyson sold the Dexter plant to Cal-Maine Foods, a company that produces table eggs rather than processing broiler chickens. This move allegedly left many farmers who had built their operations specifically for chicken production "out in the cold," as they were unable to continue their existing business relationships.

The lawsuit also claims that Tyson misled both US Sen. Josh Hawley (R-Mo.) and Rep. Jason Smith (R-Mo.) about their intentions for the Dexter plant. Sen. Hawley had previously secured a commitment from Tyson's CEO, Donnie King, pledging that Tyson would sell its Missouri plant to any interested party, including competitors, to support the more than 2,000 Missourians who lost their jobs.

Attorney General Bailey's decision to intervene in the lawsuit demonstrates the state's support for the affected poultry producers and its concern over potential anticompetitive practices in the industry. This move aligns with broader efforts to scrutinize and challenge potentially monopolistic behaviors in the meatpacking and poultry sectors, as evidenced by Senator Hawley's introduction of the Strengthening Antitrust Enforcement for Meatpacking Act last September.

Bottom line: The case highlights the complex relationships between large food processing companies, local farmers, and state economies, as well as the potential impact of plant closures and sales on rural communities and agricultural supply chains.

USDA proposes amendments to federal milk marketing orders after national hearing

USDA issued a recommended decision proposing amendments to the uniform pricing formulas applicable in all 11 Federal milk marketing orders (FMMOs). This decision follows a national hearing that took place from Aug. 23, 2023, to Jan. 30, 2024, in Carmel, Indiana, where USDA heard testimony and received evidence on 21 proposals from the dairy industry.

Key points of the recommended decision include:

• Updating milk composition factors to 3.3% true protein, 6.0% other solids, and 9.3% nonfat solids.
• Removing 500-pound barrel cheddar cheese prices from the survey and using only the 40-pound block cheddar cheese price for determining monthly average cheese prices.
• Updating manufacturing allowances for cheese, butter, NFDM, and dry whey, as well as the butterfat recovery factor.
• Revising the base Class I skim milk price formula and adopting a rolling monthly Class I extended shelf life (ESL) adjustment.
• Updating Class I differential values to reflect increased costs of servicing the Class I market.

After the comment period closes, USDA will review all submitted comments before making a final decision on the proposed amendments to the Federal milk marketing orders.

US beef group discusses implementation of USDA’s new disease traceability rule

The National Cattlemen’s Beef Association (NCBA) recently held its Summer Business Meeting where members discussed the implementation of USDA's new animal disease traceability rule, which is set to take effect on Nov. 5, 2024. This new rule is a significant update to the existing traceability requirements for cattle in the United States.

Key points about the new traceability rule and its implementation include:

• Electronic ID (EID) requirement: The rule mandates the use of electronic identification tags for certain classes of cattle moving interstate, replacing the previous system that relied solely on visual tags.
• Scope of application: The rule affects approximately 11% of the U.S. cattle herd, specifically targeting sexually intact cattle 18 months of age or older, rodeo and exhibition cattle, and dairy cattle moving across state lines.
• Transition period: There will be a six-month period before the rule takes effect, allowing producers time to prepare and adapt to the new requirements.
• Funding support: NCBA has secured $15 million in funding to help offset the costs for producers implementing this change.
• Data protection: NCBA remains committed to safeguarding producers' private data as part of the traceability system.
• Disease outbreak prevention: The primary goal of this rule is to enhance the industry's ability to respond quickly and efficiently to potential foreign animal disease outbreaks, which could have devastating economic impacts.
• Economic implications: It is estimated that a foot-and-mouth disease outbreak in the U.S. could lead to $221 billion in economic losses, underscoring the importance of an effective traceability system.

NCBA comments. “The USDA rule moves the cattle business forward allowing more efficient and accurate means of tracing animal movement in the event of a disease outbreak,” said NCBA President Mark Eisele. “USDA has made the decision to switch from visually readable to both visually and electronically readable tags for certain classes of cattle moving interstate. NCBA has already secured funding to help defray the cost of making this change and we will continue pushing for additional funding and privacy for producer data,” he added.

China’s Q2 pork output declines

China’s pork production fell 3% from year-ago in the second quarter to 13.98 MMT, following a 0.4% decline in the first quarter. That marked the first consecutive quarterly declines on an annual basis in output since 2020. During the first half of the year, China’s pork output totaled 29.81 MMT, down 1.7% from the same period last year. China slaughtered 363.95 million hogs during the first half of this year, down 3.1% from last year.

Colorado confirms four human H5N1 infections, fifth suspected

Colorado reported four confirmed infections of the H5N1 virus in poultry workers and is checking on the status of a fifth suspected case, health authorities said on Sunday. The workers showed mild symptoms, from conjunctivitis (pink eye) to respiratory signs, though none were hospitalized.

USDA monthly livestock report: world pork markets and trade

Decline of China Pork Imports Continues in 2024

The revised 2024 forecast for China pork imports anticipates a 21 percent decline year on year to 1.5 million tons, the lowest since 2019. If realized, 2024 imports will return to similar levels to before China’s outbreaks of African swine fever (ASF), which began to impact China production at the end of 2018. Despite forecast lower imports, China is expected to remain the largest global pork importer. At the peak of ASF outbreaks in 2020, imports accounted for 13 percent of China pork consumption. The import share of consumption has steadily declined since then as domestic production recovered from ASF and returned to pre-ASF levels in 2022. For 2024,

China pork production is forecast 56 percent higher than 2020 and 2024 imports are projected to account for only 3 percent of consumption. Due in part to abundant domestic supplies, stubbornly low pork prices in China since early 2023 have weakened demand for imports. Average reported pork prices were 10 percent lower during the first quarter of 2024 compared to the same period in 2023 and 56 percent lower than the first quarter of 20201.

For many major foreign suppliers, it is difficult for their exports to remain competitive in the China market given low domestic prices. Major global pork suppliers to China – including the European Union, Brazil, and the United States – are expected to seek alternative markets. However, these markets will only partially offset lower China demand. As a result, competition is expected to increase in other large import markets including Japan, South Korea, and the Philippines.

China’s meat imports slump in June

China imported 515,000 MT of meat during June, down 42,000 MT (7.5%) from May and 150,000 MT (22.6%) from year-ago. Through the first half of this year, China imported 3.3 MMT of meat, down 13.4% from the same period last year.

USDA awards $110 million to expand independent meat processing

USDA Secretary Tom Vilsack announced nearly $100 million in new grants to enhance local and regional meat and poultry processing capacity. This funding, part of two initiatives, includes over $83 million for 24 projects in 15 states under the Meat and Poultry Processing Expansion Program (MPPEP) and $26.9 million through the Local Meat Capacity (Local MCap) grant program for 33 projects in 23 states. These efforts align with the Biden administration's goals for fairer, more competitive, and resilient markets. Responding to concerns from House Ag Chair GT Thompson (R-Pa.) about new EPA regulations, Vilsack noted that USDA has collaborated with EPA to minimize any impact on processing capacity, suggesting that concerns about the regulations are exaggerated.

Weekly USDA dairy report

CME GROUP CASH MARKETS (7/12) BUTTER: Grade AA closed at $3.1000. The weekly average for Grade AA is $3.1150 (-0.0206). CHEESE: Barrels closed at $1.8500 and 40# blocks at $1.8900. The weekly average for barrels is $1.9120 (+0.0276) and blocks $1.9485 (+0.0485). NONFAT DRY MILK: Grade A closed at $1.1800. The weekly average for Grade A is $1.1805 (+0.0030). DRY WHEY: Extra grade dry whey closed at $0.5100. The weekly average for dry whey is $0.4970 (+0.0064).

BUTTER HIGHLIGHTS: In the West, domestic butter demand varies from steady to lighter. For the Central region, domestic butter demand is steady. In the East, domestic retail butter demand is slightly up. Cream is generally tightening across the country. Some butter producers convey cream is starting to price itself out of its use in churning. Some cream sellers note current and forecasted temperatures are negatively impacting willingness to accommodate spot load requests requiring lengthy transportation distances. Butter production is generally lightening to various degrees throughout the nation. Stakeholders indicate salted butter is widely available, but unsalted butter is tight.

CHEESE HIGHLIGHTS: Cheese production schedules are mixed throughout the U.S. Contacts in the East say spot loads of milk available for Class III processing are tightening, but cheese production schedules have largely held steady. Cheese inventories in cold storage remain balanced with demand. In the Central region, cheesemakers relay steady production schedules. Milk volumes continue to tighten, as evidenced by spot milk prices ranging from Class III to $1-over Class. Cheese demand remains strong. Cheese manufacturers in the West share steady production schedules. Like in much of the U.S., though, milk availability is tightening week over week. Contacts note cheese inventories are available for spot buyers. Export activity varies from steady to lighter due to current domestic cheese price points.

FLUID MILK: Across much of the country, milk volumes are seasonally decreasing. While milk production volumes are trending flat to lower through much of the East, relatively cooler temperatures in the Northeast have kept milk output levels more stable. Persistent heat and humidity continue to affect both farm level milk outputs and milk components across the West and Central regions. The East is experiencing steady to robust demand for all Classes, keeping availability tight on components. Demand in the Central region has processors searching out spot milk or cream loads that may be available. Some butter makers in the Upper Midwest are finding that their regular sources for spot cream do not have extra loads of cream available. Availability of spot milk loads are mixed in the West. The unplanned downtime of some manufacturers has made spot milk loads more widely available in California. Elsewhere in the West, milk volumes are tighter but meeting processing needs. Condensed skim availability is following suit with milk. The availability of condensed skim has tightened, and demand is steady. Likewise, cream supplies are tighter, with steady demand. Cream multiples are 1.25 – 1.50 in the East, 1.24 – 1.38 in the Midwest, and 1.08– 1.32 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices were mixed between regions. Central and East prices inched higher, while Western prices moved down based on lighter demand both domestically and from exporters. Dry buttermilk prices were steady in the Central/East regions, but they moved lower in the West. Dry buttermilk processing activity is decreasing with tighter cream available for butter churning in most of the country. Dry whole milk prices were steady, as contacts say domestic price levels have brought on reticence from global importers. Dry whey prices were mixed throughout the regions. Availability is noted as tight to tightening in most areas of the country, falling in line with seasonal milk output decreases. Central region exporters say globally competitive prices are keeping dry whey volumes stateside. Whey protein concentrate 34% prices were steady to slightly lower, as processing activity is noted as quieter week over week. Lactose prices were steady to higher. Lactose supplies, like most dairy powder commodities, are decreasing along with seasonal milk availability. Acid and rennet casein prices were steady, but European contacts say rennet casein demand is quieting.

ORGANIC DAIRY MARKET NEWS: The Organic Insider sent out on July 10th warned readers of phishing scams using the USDA logo and/or the INTEGRITY Database Banner, the newsletter noted that all emails from the USDA, AMS, or the NOP will come from "usda.gov" domains. The Farmers.gov home page includes important dates for farmers including the deadline to apply for the National Organic Program's Organic Certification Cost Share Program on October 31,2024. The USDA recently announce expanded crop insurance options for specialty and organic growers for the 2025 crop year. Foreign Agricultural Service (FAS) monthly export data for organic milk (HS-10 code 0401201000) showed export volumes in May 2024 were up from the month prior from 2023. Organic retail ad totals increased from the prior week, in the week 28 retail ad survey. The most advertised organic dairy product this week was yogurt, after the number of ads increased from the week 27 survey.

NATIONAL RETAIL REPORT: Conventional dairy ads decreased 38 percent, whereas organic dairy ads increased 44 percent. Total ads for all reported conventional commodities decreased this week compared to the prior week. Conventional 6-8 ounce packages of shredded, sliced and block cheese have weighted average advertised prices of $2.49, $2.47, and $2.57, respectively. Yogurt was the third most represented conventional dairy commodity. The weighted average advertised price for 4-6 ounce containers of conventional Greek yogurt was $1.12. The weighted average advertised price for 4-6 ounce containers of conventional regular yogurt was $0.61. The weighted average advertised price for gallon containers of conventional milk was $3.53