19 April 2024

19 minute read

By: Sarah Mikesell

North America

Asia

Weekly USDA US pork, beef export sales report

Beef: Net US sales of 17,700 MT for 2024 were up 30 percent from the previous week and 27 percent from the prior 4-week average. Increases were primarily for South Korea (5,400 MT, including decreases of 400 MT), China (3,600 MT, including decreases of 100 MT), Japan (2,800 MT, including decreases of 300 MT), Taiwan (2,100 MT, including decreases of 100 MT), and Mexico (1,800 MT, including decreases of 100 MT). Exports of 16,700 MT--a marketing-year high--were up 21 percent from the previous week and 20 percent from the prior 4-week average. The destinations were primarily to Japan (4,700 MT), South Korea (4,600 MT), China (2,800 MT), Mexico (1,400 MT), and Taiwan (900 MT).

Pork: Net US sales of 21,800 MT for 2024--a marketing-year low--were down 54 percent from the previous week and 47 percent from the prior 4-week average. Increases were primarily for Mexico (8,500 MT, including decreases of 300 MT), China (3,000 MT, including decreases of 100 MT), Japan (2,900 MT, including decreases of 200 MT), Colombia (1,400 MT, including decreases of 100 MT), and South Korea (1,200 MT, including decreases of 400 MT). Exports of 41,700 MT were up 18 percent from the previous week and 22 percent from the prior 4-week average. The destinations were primarily to Mexico (16,200 MT), Japan (6,500 MT), South Korea (5,600 MT), China (3,600 MT), and Canada (1,900 MT).

China’s Q1 pork production declines

China produced 15.83 MMT of pork during the first quarter of 2024, down 0.4% from the same period last year. That was the first annual decline in quarterly production since the second quarter of 2020. China slaughtered 194.6 million hogs during the first three months of the year, down 2.2% from last year. China’s hog herd declined 5.2% from last year to 408.5 million head at the end of March, while the sow herd fell 6.9% to 40.42 million head.

FSIS sets webinars on voluntary U.S.-origin labeling

The Food Safety and Inspection Service (FSIS), a branch of USDA, has scheduled two webinars regarding the implementation of the "Voluntary Labeling of FSIS-Regulated Products with U.S.-Origin Claims" final rule, which was issued in March. These webinars are set to take place on April 30 and May 15, and they will be conducted using the Teams platform. The purpose of these webinars is likely to provide guidance and information to stakeholders about the requirements and procedures associated with the voluntary labeling program. It's noteworthy that compliance with this voluntary program is slated to begin on Jan. 1, 2026, indicating a future timeline for when companies must adhere to the regulations outlined in the final rule.

USDA’s NASS’ proposal to cut ag data sparks concerns

USDA's National Agricultural Statistics Service (NASS) has proposed discontinuing several data reports, affecting both the livestock and crop sectors. This proposal has raised concerns among livestock and meat economists, as some of the reports slated for elimination are deemed crucial for market efficiency. Among these reports, the July Cattle Inventory report, while smaller in scope compared to the January report, provides valuable supply information that is vital for understanding the dynamics of the cattle market, especially regarding herd expansion and calf prices. A Southern Ag Today article (link) says “This report will be very valuable over the next several years. If this report had to be discontinued, now is the worst time to do it.”

The proposal also includes dropping certain state-level data, such as beef cow inventory in states like Louisiana, Mississippi, and others in the South, which are significant in supplying feeder cattle to feedlots. Additionally, the elimination of annual county estimates of beef cows and cattle would hinder the analysis of natural disaster impacts on agriculture, such as wildfires and hurricanes.

Furthermore, proposed changes extend to other livestock data, like dropping Virginia and Maryland from state-level estimates in the Chickens and Eggs report, which could affect research on animal diseases and disease control effectiveness.

The article says that while recognizing USDA's budget constraints, there's a concern that reducing available information could negatively impact market efficiency. The reports highlighted in the article offer tangible benefits to farmers and ranchers, prompting the argument for their retention.

China’s pork imports plunge in March

China imported 90,000 MT of pork in March, down 39.3% from last year. Through the first three months of this year, China imported 260,000 MT of pork, down 51.7% from the same period last year.

American Farm Bureau Federation President Zippy Duvall criticizes USDA decision to cut some reports

In a letter to USDA, Duvall says the decision to cancel the July cattle report “runs counter to previous commitments to improve fair, competitive and transparent markets.” By canceling the July Cattle report, “NASS cancelled one of the very tentpoles of cattle market transparency,” Duvall stressed, adding the decision could stymie Land Grant universities from conducting crop and livestock research. He urged NASS to “reconsider the decision to discontinue this critical reporting.”

USDA assures minimal dairy trade disruptions amid HPAI concerns

USDA Secretary Tom Vilsack reassured that there haven't been significant disruptions in dairy trade despite the discovery of highly pathogenic avian influenza (HPAI) in U.S. dairy cattle. Vilsack stated that most trading partners haven't halted imports of U.S. dairy products, with only a few expressing concerns. He emphasized proactive outreach to assure partners of safety measures and low risks associated with U.S. milk. USDA plans extensive research to understand virus transmission and potential biosecurity measures needed.

Lawmakers demand oversight of U.S.-funded bird flu gain-of-function research in China lab

In February, a White Coat Waste Project (WCW) investigation exposed how USDA wasted at least $1 million of taxpayers’ money on an ongoing collaboration with the Chinese Communist Party-controlled Chinese Academy of Sciences (the Wuhan animal lab’s parent organization) and a Wuhan lab white coat on dangerous bird flu gain-of-function experiments.

Now, 18 Republican and Democratic Congress members are demanding answers in a letter to USDA Secretary Tom Vilsack. The lawmakers cite WCW’s recent investigation and write, “We are disturbed by recent reports about USDA collaboration with the Chinese Communist Party (CCP)-linked Chinese Academy of Sciences (CAS) on bird flu research. This research, funded by American taxpayers, could potentially generate dangerous new lab-created virus strains that threaten our national security and public health.”

USDA’s Vilsack responds to dairy reduction criticism in WIC program

USDA Secretary Tom Vilsack has been questioned about the perceived reduction in dairy coverage under the WIC program, particularly in the recently released final rule for the program. Critics have pointed out a decrease in the level of milk provided. However, Vilsack clarified during a Senate Appropriations Ag subcommittee hearing that the reduction in fluid milk coverage was not accurate. He explained that while they did reduce the commitment to fluid milk, it was done to align with the supplemental nature of the WIC program. Under the previous rule, the program was providing 120% of the average daily milk consumption, which was deemed excessive. The new rule adjusts this down to around 78%, reflecting the supplemental nature of WIC.

Additionally, Vilsack emphasized that they have made it easier to include other dairy products like yogurt in the program, with the expectation that overall dairy consumption would increase. He projected an increase in milk sales by approximately 130 million quarts compared to the previous year, despite the decrease in the percentage of milk provided.

Bottom line: The final rule also increases the level of whole grains available and introduces new flexibilities for yogurt and cheese purchases. However, the allocation for milk is reduced from the current four to six gallons per month to three to four gallons per month.

In Michigan, three more dairy herds have been infected with the H5N1 (BIAV) avian influenza virus

This has prompted concerns about its spread across state lines. USDA has advised farmers to test their herds before moving them to prevent further transmission. The outbreak in Michigan adds to a total of 29 infected dairy herds in eight states, including Texas, New Mexico, and North Carolina. Tim Boring, Michigan's agriculture director, emphasized the importance of vigilance, noting that the virus disregards geographical boundaries.

Voluntary testing urged. While a mandatory testing program for the 26,000 U.S. dairy herds isn't feasible, the USDA's Animal and Plant Health Inspection Service (APHIS) urges voluntary testing to gather more information and prevent interstate spread.

Unlike its devastating impact on poultry, HPAI's effects on dairy cows vary. With proper veterinary care, infected cows can recover within weeks, though they may experience reduced appetite and milk production, especially older cows.

HPAI primarily spreads through wild birds, posing a heightened risk during migratory seasons. Biosecurity measures, such as restricting barn access to outsiders, are encouraged to prevent transmission through contaminated equipment or materials.

The recent detection of HPAI in livestock has prompted concerns about potential risks to swine herds. The Swine Health Information Center and the American Association of Swine Veterinarians are hosting a webinar Friday to address these concerns and provide updates on influenza A virus, which includes strains found in animals.

Of note: APHIS says to continue using HAPI relative to the current situation in dairy, despite an aborted attempt by the American Association of Bovine Practioners (AABP) to change it to Bovine Influenza A Virus (BIAV). According to APHIS: “From USDA’s perspective, highly pathogenic avian influenza or H5N1 are the most scientifically accurate terms to describe this virus. This is also consistent with what the scientific community has continued to call the virus after it has affected other mammals.  Since the virus is not highly pathogenic in mammals, H5N1 is the most fitting of the two scientifically correct options.  As a reminder, genomic sequencing indicates there is no change to this virus that would make it more transmissible to humans, and the CDC considers risk to the public to be low.”

Chinese meat imports slow dramatically in Q1

China imported 578,000 MT of meat during March, down 11.5% from last year. For the first quarter of this year, China imported 1.68 MMT of meat, down 270,000 MT (13.8%) from the same period last year. China doesn’t break down meat imports by category in the preliminary data, but the decline is due to reduced pork arrivals.

USDA Livestock and Poultry: World Markets and Trade

Beef and Veal

Global production in 2024 is forecast virtually unchanged from 2023 at 60.4 million tons as falling production in the United States is offset by increases in Australia, Brazil, China, and India. Outside the United States, beef production is forecast to increase 1 percent as higher cattle supplies and competitive prices induce more slaughter. In Australia, total slaughter is forecast to increase 9 percent, boosting beef production by 8 percent. Weights are expected to decrease marginally as the proportion of feedlot cattle slaughtered relative to total slaughter is anticipated to decline in 2024. Brazil production is forecast to increase 2 percent as strong export demand and sluggish calf prices incentivize higher slaughter. China production is forecast to increase 2 percent, driven by the large number of slaughter[1]ready cattle. India production is forecast up 2 percent on increased export demand. Global exports are forecast marginally higher in 2024 to 12.3 million tons as increases in Argentina, Australia, Brazil, and India offset lower U.S. exports. Outside the United States, global exports are anticipated to increase 2 percent. China imports are forecast down 4 percent as domestic consumption is anticipated to remain flat year over year, and production is forecast to increase 2 percent. As a result, countries with ample exportable supplies will be looking to other export destinations in 2024. Australia exports are forecast 9 percent higher as ample supply and competitive prices will propel shipments to East Asia and North America.

Strong U.S. import demand will support increases in Australia exports, as will the anticipated reduction in U.S. exports to key markets in East Asia. Brazil is forecast to remain the world’s largest exporter, but 2024 exports are forecast to increase just 1 percent to 2.9 million tons. Firm demand from key trading partners such as the United States, United Arab Emirates, and the Philippines will likely offset weaker demand from China. India exports are forecast to increase 3 percent on strong demand from key Southeast Asia and Middle East markets, especially Vietnam, Malaysia, and Saudi Arabia. U.S. production and exports are forecast at 12.1 million tons and 1.3 million tons – down 2 percent and 8 percent, respectively. The U.S. cattle herd entered 2024 at the lowest inventory level since 1951 and is anticipated to decline further during the year. Cow slaughter is likely to decline during the year due to lower inventories, but stronger calf prices and assumed favorable forage conditions are expected to support the retention of breeding animals. Lower production will drive reduced U.S. exports. Furthermore, increased production in Australia, Argentina, Brazil, and New Zealand is likely to increase pressure on U.S. exports, as competitive prices in key markets may reduce demand for U.S. beef, particularly in East Asia.

Pork

Global production in 2024 is forecast 1 percent lower year over year to 115.6 million tons as lower production in China more than offsets increased production in the European Union, the United States, and Brazil. China pork production is forecast 3 percent lower to 56.0 million tons as persistently low prices in 2023 triggered industry consolidation. EU pork production is forecast 2 percent higher year over year to 21.2 million tons. High piglet and carcass prices incentivized producers to begin rebuilding the sow herd at the end of 2023 and will lead to a 2-percent higher pig crop in 2024. Additionally, cheaper feed prices are expected to improve sector profitability and increase hog weights. Brazil production is forecast to increase 4 percent to 4.6 million tons as producers continue to benefit from lower production costs. Brazil production is also expected to be supported by improving domestic demand and robust export demand as Brazil remains the lowest-cost supplier. Global exports are expected at 10.5 million tons in 2024, 4 percent higher year over year as increased shipments are expected for all major exporters including the United States, the EU, Brazil, and Canada.

EU exports are forecast to rise 3 percent as higher production and increased price competitiveness in the second half of the year are expected to provide opportunities for growth. EU exports are anticipated to make significant gains to the United States. Brazil shipments in 2024 are forecast 5 percent higher year over year, with particularly strong competitiveness to the Philippines, Chile, and Hong Kong. Canada exports are forecast up 1 percent, with modest export gains expected in Japan and South Korea, where Canada will compete with the United States for market share.

U.S. production and exports: U.S. pork production is forecast 3 percent higher year over year to 12.7 million tons as larger-than previously expected hog supplies are reflected in increased hog slaughter. U.S. exports are forecast almost 8 percent higher in 2024 with meaningful gains to core markets, especially Mexico and Japan, as abundant supplies and strong export competitiveness position the United States for export growth. U.S. exports will also look to build off of strong 2023 market share gains in South Korea and Australia

Chicken meat

Global production is forecast nearly 1 percent higher in 2024 to 104.2 million tons as gains by Brazil, the United States, Egypt, Mexico, and Argentina more than offset a significant decline in China. Brazil production is forecast 1 percent higher at 15.1 million tons. This record high is based on strong external demand, an improving domestic economy, and lower costs of production. Although corn and soybean prices remain elevated, lower expected feed prices in 2024 will bolster production in many countries. China production is forecast 6 percent lower on declines in both white and yellow broiler production. Highly pathogenic avian influenza (HPAI)-related import restrictions on avian genetics by China constrain white broiler production, and closures of live poultry markets negatively impact yellow broiler chicken production. Global exports are forecast 2 percent higher in 2024 to 13.8 million tons driven by significant gains by Brazil. Brazil is expected to remain the world’s largest exporter at nearly 5.0 million tons.

With a strong, 4-percent increase in shipments, exports will account for a record one-third of Brazil production. Brazil’s commercial plants continue to be free from HPAI which allow shipments to flow unhindered by trade restrictions. By continuing to focus on halal markets and increasing product diversity, Brazil will be able to make gains across a wide swath of markets. Global demand remains relatively firm with no major shifts expected in key import markets. U.S. production and exports: U.S. production is forecast 1 percent higher in 2024 to 21.4 million tons on lower feed costs and firm domestic demand. Exports are forecast to fall 3 percent to 3.2 million tons accounting for 16 percent of production. U.S. price competitiveness vis-à-vis other major competitors, particularly Brazil, will erode market share in many key markets. While HPAI-related restrictions have generally abated and are usually limited in geographic scope, a few lingering restrictions remain in markets such as China and South Africa.

BIAV detected in North Carolina

Bovine Influenza A Virus (BIAV) was detected in a dairy herd in North Carolina, the state’s Agriculture Commissioner Steve Troxler said. This is the 21st case of BIAV and North Carolina is the seventh state with an outbreak of the virus, joining Texas (9), New Mexico (4), Kansas (3), Michigan (2), Ohio (1) and Idaho (1).

States are taking measures to prevent the spread of BIAV by blocking cattle movement from areas where it has been detected in dairy cattle. A total of 17 states are now enforcing bans on the entry of dairy cattle from states where BIAV cases have been confirmed, following the initial cases identified in late March. These states include Alabama, Arizona, Arkansas, California, Delaware, Florida, Hawaii, Idaho, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Pennsylvania, Tennessee, Utah, and West Virginia.

Of note: Despite these state-level actions, the federal Animal and Plant Health Inspection Service (APHIS) has stated in its April 2 guidance that it will not issue federal quarantine orders, nor is it recommending any state regulatory quarantines or official hold orders on cattle. Instead, APHIS strongly advises minimizing cattle movement as much as possible and discourages the transportation of sick or exposed animals. For those instances where cattle movement is unavoidable, APHIS recommends practicing "due diligence" by producers, veterinarians, and animal health officials. Additionally, APHIS suggests conducting premovement testing of milk samples from lactating cows and nasal swabs for non-lactating cattle.

Weekly USDA dairy report

CME GROUP CASH MARKETS (4/12) BUTTER: Grade AA closed at $2.9200. The weekly average for Grade AA is $2.9365 (+0.0205). CHEESE: Barrels closed at $1.5725 and 40# blocks at $1.5350. The weekly average for barrels is $1.5620 (+0.0985) and blocks $1.5470 (+0.0915). NONFAT DRY MILK: Grade A closed at $1.1425. The weekly average for Grade A is $1.1420 (+0.0085). DRY WHEY: Extra grade dry whey closed at $0.3600. The weekly average for dry whey is $0.3665 (-0.0245).

BUTTER HIGHLIGHTS: Domestic butter demand varies across the nation. Industry participants note domestic demand is strong to steady in the West, and steady in the Central and East regions. Cream volumes are widely available throughout most of the country. Butter manufacturers continue busy churning schedules overall, while cream volumes are readily available. Some butter makers convey non[1]contracted unsalted butter loads are tight and more actively sought by spot buyers. Although many manufactures are working to build inventories, some processors in the Central region convey an expectation of lighter churning over the next few weeks. Bulk butter overages range from 3 to 13 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production schedules are trending steady to stronger throughout the U.S. Milk production continues to trend higher in the East. Cheese plant contacts report steady to stronger production schedules as well as increases in demand. Inventories are comfortable. Contacts share foodservice demand remains light. In the Upper Midwest, farm level milk production is increasing. Spot milk prices were reported as low as $6-under Class III. Contacts say cheese plant downtime has kept milk volumes loose. Barrel inventories are comfortable. Retail demand for cheddar and Italian-type cheeses is steady. In the West, cheese production schedules are strong. Farm level milk outputs are increasing, and cheese inventories are ample. Spot cheese demand is light. Some contacts share production continued to be outpace cheese demand.

FLUID MILK: The topic du jour in the dairy industry is spring flush. Contacts say milk levels are nearing their acmes in parts of the Western United States. Milk output in the East and Midwest are trending seasonally higher, as well. Fluid milk is generally accessible nationwide. Class I demand has picked up in the Central region, as most schools are back for the final months of the academic year. Class I demand is steady in most other areas. Cheesemakers in the Midwest reported spot milk loads as low as $6-under Class III this week, as plant downtime is a catalyst for the growth in recent milk availability. In California, reported loads ranged from $3- to $2-under Class III. Still, given last year’s precedent, milk availability is less abundant. During week 15 of 2023, Midwestern spot milk prices ranged from $11 -under to $4-under Class. Cream is widely available for all uses. Ice cream manufacturers’ demand is inching up, but not to the degree some contacts expect. Some butter plant managers relay a potential slowdown in churning/cream usage in upcoming weeks. F.O.B. cream multiples are 1.08-1.26 in the East, .95-1.26 in the Midwest, and 1.00- 1.20 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk prices were steady to lower nationwide this week. Mexican demand has yet to materialize, but a number of contacts relay somewhat stable, albeit quietly stable, markets. Dry buttermilk prices were steady in the Central/East regions, while prices were mixed in the West. Some manufacturers say recently produced loads are tight, but production from early 2024 trading has kept the market tone anchored. Dry whole milk prices moved higher this week. Dry whey prices were mixed across the regions, but most facets moved lower, rather than steady or higher. Dry whey demand has been somewhat sluggish, and international prices have been competitive with domestic prices in recent months. Lactose prices are unchanged, but demand and tones have firmed in recent weeks. Whey protein concentrate 34% prices were steady, on stable trading activity. Both rennet and acid casein prices remained steady.

INTERNATIONAL DAIRY MARKETS NEWS: 

WESTERN EUROPE: After a slow start to the year, EU milk production has picked up, and weekly milk intakes are above 2023 levels within some countries. According to some European publications, week 13 milk collections in Germany were 0.7 percent above those of week 13 in 2023, and milk collections in France were 1.3 percent higher for the same period. EASTERN EUROPE: The march to spring flush is continuing across much of Eastern Europe. However, while milk production is still growing in some Eastern European countries, Ukrainian milk production is still well below the levels of milk produced in the country prior to the Russian invasion. Online information services report February 2024 Ukrainian milk production was 460,000 tons, compared to 525,000 tons in February 2021. February 2023 Ukrainian milk production was 458,000 tons.

AUSTRALIA: According to Dairy Australia, February 2024 milk production, 601.8 million liters, was up 8.7 percent from February 2023. Milk production was higher in February 2024 compared to a year earlier in every state, with the largest percentage increase, 10.3 percent, seen in Victoria. Milk production from the start of the season in July 2023 through February 2024, 5,949.0 million liters, increased 3.1 percent compared to the same time frame a year earlier. From the start of the season in July 2023 through February 2024 the cumulative volume of milk produced was higher in every state compared to the prior season.

NEW ZEALAND: During GDT event 353 last week, prices rose for most products traded, with the all contracts prices only falling for buttermilk powder and lactose. Meanwhile, the volume of products traded during this event was down from the previous event and was the least sold at a GDT event since May of 2020. In New Zealand, a group which forecasts dairy prices increased their forecasted milk price by 10 cents, to $7.72/kgMS, following the most recent GDT event. The group stated milk powders had the largest impact on increasing the forecasted milk price as whole milk powder and skim milk powder prices both increased during GDT event 353. For the 2024-2025 season, the forecasted farmgate milk price was raised by 18 cent to $8.49/kgMS.

SOUTH AMERICA: In late 2023, USDA's Foreign Agricultural Service estimated a two percent decrease in Argentinian milk output for calendar year 2024. After the first quarter, contacts suggest two percent may have been a conservative estimate. Argentina's recent milk output woes are being brought into the discussion from contacts throughout the Southern Cone. That being said, Brazilian demand for dairy and dairy powder commodities has been quieter in recent weeks. Contacts in Uruguay and Argentina say milk powder loads are staying within their borders, and more loads are going into processing plants within the respective country of origin.

NATIONAL RETAIL REPORT: Conventional dairy advertisement totals continued to slide lower this week by 19 percent, while organic ad tallies eclipsed last week, increasing 58 percent week[1]over-week. The planets realigned, as the most consistent title holder returned this week; the most advertised single dairy item was conventional ice cream in 48-to-64-ounce containers. In the organic sphere, half-gallon milk ad totals kept their top spot.