18 October 2024

15 minute read

By: Jim Wyckoff

North America

HPAI cases rise in US dairy and poultry, impacting 2.76 million birds past 30 days

Highly pathogenic avian influenza (HPAI) continues to spread, with 97 dairy herd cases reported in California and Idaho over the past 30 days. On the poultry side, 2.76 million birds across three western states have been affected, including major outbreaks in Utah and Washington. Since the outbreak began in February 2022, HPAI has hit 1,180 flocks across 48 states, affecting 103.47 million birds.

U.S. Labor Dept. probes underage worker claims at Tyson plants in Arkansas

The U.S. Department of Labor is conducting an ongoing investigation into claims of underage workers at two Tyson Foods plants in Arkansas. This comes after court documents unsealed in the Western District of Arkansas revealed accusations of child labor violations at Tyson processing facilities.

Specific allegations. A teacher at a school near the Rogers, Arkansas plant reported that a 14-year-old student discussed working at the Tyson facility for the summer. For the Green Forest, Arkansas plant, a mother overheard children between 11-13 years old discussing working night shifts from 11 PM to 7-8 AM. Investigators observed "multiple individuals whose appearance and body language indicated were potentially minor employees below the age of 16 at both locations.

California reports five more possible human H5N1 cases

California is investigating five possible human cases of the H5N1 virus among dairy farm workers, in addition to the six cases previously confirmed in the state. The possible and confirmed cases originated on nine different dairy farms and the individuals had mild symptoms and were not hospitalized, the state said.

China’s meat imports remain weak

China imported 541,000 MT of meat during September, down 24,000 MT (4.2%) from August and 54,000 MT (9.1%) less than last year. Through the first nine months of the year, China imported 4.94 MMT of meat products, down 770,000 MT (13.5%) from the same period last year.

FDA: Livestock antimicrobial sales drop to second lowest in a decade

Sales of antimicrobials for livestock use reached 24 million pounds in 2023, marking the second-lowest total in a decade, according to the FDA). The decline follows regulatory efforts to reduce the use of these drugs to promote animal growth, aiming to preserve their effectiveness for treating human diseases. Sales of medically important antimicrobials, such as tetracyclines and penicillins, fell by 2% last year and have dropped 37% since their peak in 2015. Global efforts to combat antimicrobial resistance (AMR) are intensifying, with the UN calling for a significant reduction in agricultural antimicrobial use by 2030.

USDA annual report on world livestock and trade

Beef and veal

Global production in 2025 is forecast down 1 percent to 60.9 million tons as declines in Brazil, the EU, and the United States more than offset increases in Argentina, Australia, India, and Mexico. Australia production is expected to rise 2 percent to a record 2.6 million tons as increased global demand, particularly from the United States, supports higher slaughter. Carcass weights are expected to decline as female cattle slaughter increases to meet export demands. Increased Argentina production is driven by higher international demand and newly implemented domestic policies, which seek to incentivize shipments by reducing export taxes on certain beef products. Production in Brazil is forecast to decline 1 percent to 11.8 million tons as herd contraction continues for a second consecutive year. EU production is expected to decline 2 percent as the combination of economic headwinds and an uncertain regulatory environment continues to disincentivize investment in an already constrained cattle sector. Global exports in 2025 are forecast virtually unchanged to 12.9 million tons as lower exports from Canada, the EU, and the United States offset greater shipments from Argentina, Australia, and India. Excluding the United States, global exports are anticipated to increase 1 percent. Brazil and Australia, the world’s two leading exporters, will capture increased market share at the expense of the United States and the EU, where beef production is expected to decline. Australia exports are expected to rise 2 percent to a record 1.9 million tons as tight U.S. supplies and lower production will increase the demand for beef imports, of which Australia is a significant supplier. Global demand in 2025 is also supported by a 1-percent increase in China imports as well as small gains by South Korea, Taiwan, and the United Kingdom. U.S. production and exports: U.S. beef production is forecast down 4 percent on tighter cattle inventories. The decline in production, especially lean processing beef, coupled with ample exportable supplies in key markets – such as Argentina, Australia, and Brazil – will spur import growth. Imports are forecast to rise 1 percent to a record of 2.0 million tons. Exports are forecast 12 percent lower to 1.2 million tons on tight domestic supplies and competition from Australia, particularly in East Asia.

Pork

Global production in 2025 is forecast down 1 percent to 115.1 million tons as lower production in China and the European Union more than offsets production growth in the United States, Vietnam, and Brazil. Vietnam pork production is forecast 3 percent higher to 3.8 million tons on expected herd expansion as the swine sector consolidates and improves management of African swine fever (ASF). Brazil production is forecast 1 percent higher to 4.6 million tons on strong export demand and easing input costs. Despite improved sector profitability in 2024, China pork production is forecast 2 percent lower in 2025 to 55.5 million tons. Reduced sow inventories in 2024 are expected to yield fewer animals available for slaughter in 2025. Additionally, China consumer demand for pork is expected to remain weak given continued economic uncertainty and the growing consumer preference for poultry. European Union production is forecast 2 percent lower to 20.9 million tons due to expected lower hog prices. Global exports are forecast to increase 1 percent to 10.4 million tons in 2025 as export growth from the United States and Canada offsets lower exports from the EU. Canada exports are forecast 1 percent higher to 1.5 million tons with stable demand from the United States and continued growth to several Asian markets, including Japan and South Korea. EU exports are forecast 2 percent lower to 2.95 million tons given expected lower available supplies for export and ongoing ASF-related trade restrictions. U.S. production and exports: U.S. production is forecast 2 percent higher in 2025 to 12.9 million tons on growth in slaughter and pigs per litter. Improved sector profitability in 2024 and reduced feed costs are expected to continue to support heavier hog weights. U.S. exports are forecast to increase 3 percent in 2025 to 3.4 million tons given ample domestic supplies and strong export price competitiveness. Despite increased competition from Brazil, Mexico will remain a core market for U.S. exports. Additionally, U.S. exports are expected gain market share from the EU in South Korea and Australia.

Chicken meat

Global production is forecast nearly 2 percent higher in 2025 to a record 104.9 million tons. Production gains are forecast for most countries with the largest increases expected for China, the United States, Turkey, the EU, Brazil, and Mexico. Expansion is supported by a modest improvement in feed prices and on consumer demand spurred by economic growth. A significant production increase in China will enable its return to being the world’s largest producer. China demand will be generated primarily from white broilers as producers respond to demand drivers and as consumers may substitute broiler meat in place of pork. China yellow broiler production, mainly sold in wet markets, will remain stagnant. Turkish production is forecast to rise on stable domestic demand and increased shipments as government exports restrictions are lifted. Brazil’s record high forecast is supported by strong foreign demand and lower expected production costs. Global exports are forecast 2 percent higher in 2025 to a record 13.8 million tons following relatively stagnant trade in 2023 and 2024. Economic growth is expected to drive moderate consumption growth as chicken remains a lower-cost animal protein which appeals to middle-income consumers. While all major exporters (Brazil, the United States, the EU, and Thailand) will post gains, Brazil will capture the largest share of growth as it is able to service and be price-competitive in the largest growth markets (Mexico, Saudi Arabia, Singapore, the UAE, and the UK). Reductions in highly pathogenic avian influenza (HPAI)-related restrictions will support increased EU exports to various markets although the UK will remain the largest market for the EU. Thailand exports will be supported by growth in cooked chicken, particularly to the EU, Japan, and the UK. U.S. production and exports: U.S. production is expected to rise 2 percent to a record 21.7 million tons in 2025 as feed prices continue modest declines along with the assumption of no significant disease outbreaks. Increased production will support a slight boost in exports which are forecast 1 percent higher to 3.1 million tons on growth in shipments to Mexico and Canada. However, U.S. shipments to smaller, non[1]traditional, and price-sensitive markets may decline on increased competition from Brazil. Despite the increase, U.S. export volumes will continue to remain below pre-HPAI levels.

August pork exports surpass previous year; beef exports decline

US pork exports in August showed an increase compared to the previous year, driven by strong demand from Mexico. According to data from USDA and compiled by the U.S. Meat Export Federation (USMEF), beef exports experienced a decline, while lamb exports saw an uptick, reaching their highest volume since January.

Pork exports. August pork exports totaled 238,989 metric tons (mt), marking a 6% increase from the previous year. The export value rose by 8% to $702.9 million. Key highlights include:
• Strong performance in Western Hemisphere: Exports to Central and South America, the Caribbean, and the ASEAN region showed positive trends.
• Record-breaking shipments: Malaysia received record-high shipments, while exports to Colombia achieved a value record.
• Year-to-date figures: From January through August, pork exports reached nearly 2 million mt, up 4% from the previous year, with a 7% increase in value to $5.68 billion.

USMEF President and CEO Dan Halstrom noted the importance of defending market share and expanding consumption in increasingly competitive markets.

Beef exports. Beef exports in August showed a downward trend:
• Total volume: 102,682 mt, down 6% from the previous year and the lowest since January.
• Export value: $845.9 million, a 4% decrease.
• Mixed performance: While exports to Mexico, Taiwan, the Middle East, and the ASEAN region increased, lower shipments to Japan, South Korea, and China/Hong Kong offset these gains.
• Year-to-date figures: Through August, beef exports were 3% below the previous year at 856,834 mt, but 4% higher in value at just under $7 billion.

Halstrom acknowledged the challenges in Asian markets but expressed optimism about the ongoing tourism rebound in the region.

Lamb exports. Lamb exports showed a positive trend, reaching their highest volume since January. Exports of U.S. lamb reached 288 mt in August, up 170% from last year’s low volume. Export value was $1.16 million, up 70%. These results drove January-August exports 20% above last year’s pace in volume (1,946 MT) and 23% higher in value ($10.2 million). While larger shipments to the Caribbean and Mexico accounted for most of this growth, exports also trended higher year-over-year to the Philippines, Canada, Guatemala and Taiwan.

USDA weekly dairy report

CME GROUP CASH MARKETS (10/11) BUTTER: Grade AA closed at $2.6250 The weekly average for Grade AA is $2.6610 (-0.0595). CHEESE: Barrels closed at $1.8875 and 40# blocks at $1.8875. The weekly average for barrels is $1.8890 (-0.2150) and blocks $1.9240 (-0.1125). NONFAT DRY MILK: Grade A closed at $1.3525. The weekly average for Grade A is $1.3540 (-0.0005). DRY WHEY: Extra grade dry whey closed at $0.5950. The weekly average for dry whey is $0.6000 (-0.0030).

BUTTER HIGHLIGHTS: In the East region, domestic demand for butter is steady. In the Central region, domestic butter demand is stronger. In the West region, domestic butter demand varies from steady to lighter. Stakeholders throughout the country convey some buyers are holding back from purchasing, waiting to see if butter prices might adjust lower. Cream volumes are readily available across the nation. In some cases, butter makers are turning down spot cream offers due to being at processing capacity. Some parts of Eastern U.S. continue to face transportation challenges. Butter manufactures note strong or steady production paces. Bulk butter overages range from 1 to 8 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production remains varied throughout the U.S. In the East, contacts share cheese production remains seasonally steady to lighter. Cheese inventories are adequate to meet demand. Foodservice demand has picked up slightly. Cheesemakers in the Central region relay steady to active production schedules. Milk availability remains somewhat tight, and spot milk prices were reported at $0.50 to $3.50 above Class III. Contacts share demands for cheddar and Italian style cheeses are steady. In the West, contacts relay milk volumes are readily available for Class III processors. Production schedules range from steady to stronger. Cheese demand is varied. Some buyers share hesitancy over purchasing additional spot loads.

FLUID MILK HIGHLIGHTS: Milk volumes are mixed throughout the country. The Central region is experiencing seasonally stable milk output at the farm level, and component levels (protein and fat) are being reported as strong. Class I milk demand is stable at current levels. Spot milk prices are steady to strong. This week’s spot milk price range was $0.50 - $3.50 over Class. Cream is abundantly available in the Central region. Butter makers are suggesting they are now booking cream at flat multiples for fall and winter. Milk volumes in the West are varied. California is seeing lower volumes but convey component levels are higher than the previous year. Demand for all Classes is steady. Arizona and New Mexico are seeing steady milk production at the farm level. Spot loads of milk are available, and demand for all Classes continues to be steady. Milk output is stronger in the mountain states and the Pacific Northwest, where cooler temperatures are contributing to cow comfort. Milk volumes are meeting the needs of manufacturing, and there is strong Class I and II demand for milk. Class III and IV demand is steady. Cream is widely available throughout the region. In the East, milk production is mixed. Steady output is coming from Northeast farms. There is strong demand for Class I and steady demand from Class II and III. Cream volumes are said to be comfortable. Spot loads of condensed skim are becoming more available across the United States, and demand is steady. Contacts in the Southeast and Mid-Atlantic relay interruptions in production and operations, but robust cream volumes continue to occupy their churns. Some Florida processing plant operators planned for temporary closures before the landfall of Hurricane Milton. FOB cream multiples for all Classes are 1.25-1.37 in the East, 1.19-1.34 in the Midwest, and 1.08-1.27 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk (NDM) prices were steady to higher in the Central/East regions, while moving lower in the West. Availability has ticked higher in the West but is noted as balanced to even tight in the Central region. Dry buttermilk prices were steady in the Central and East, while pushing higher in the West. Interest for dry buttermilk in Q4 is somewhat expected to pick up as baking season moves into higher gears. Dry whey prices were steady in the Central and West, while ticking higher in the East. Dry whey is generally viewed as tight, some contacts are beginning to suggest volumes are being offered more regularly in recent weeks. Lactose prices were steady to slightly higher. Whey protein concentrate 34% prices received another bullish bump this week, as processors say processing is limited, and more whey solids continue to move into higher protein concentrations. Dry whole milk prices moved lower, despite generally limited production activity. Rennet and acid casein prices were unchanged on steady/quiet market activity.

INTERNATIONAL DAIRY MARKET NEWS: 

WEST EUROPE: Milk production is variable throughout West Europe. Countries like Germany and Ireland are still witnessing seasonally lighter milk production, while others like France and the United Kingdom are seeing increases in weekly milk deliveries. The European Commission released the biannual Short-Term Outlook for EU Agricultural Markets in 2024 report on October 8. The report outlines predicted milk deliveries are set to increase 0.5 percent overall in 2024 despite a 0.3 percent decrease in dairy herds. A large multinational dairy company announced plans to cut milk purchases in France to temper exposure to international commodity prices. The company plans to cut milk collections by 450 million liters, roughly 9 percent of its annual milk intake. This cut in milk purchases is slated to start at the end of the year and progress through 2030.

EAST EUROPE: Although milk production in East Europe continues along seasonal declines, industry sources suggest that milk collections in August 2024 exceeded those of August 2023 in much of East Europe. The July 2024 milk collection volumes across East Europe were largely below those of July 2023. As of mid[1]September, drought warning conditions extended across much of southern parts of East Europe and southeastern Poland into the Baltic States. Persistent drought conditions in the Balkans and Black Sea region have significantly impacted pasture and crop production.

OCEANIA: AUSTRALIA: According to Dairy Australia, August 2024 milk production was up from August 2023. August 2024 milk production was up from the prior year in New South Wales, Victoria, and South Australia. Meanwhile, milk production was down in Queensland, Western Australia, and Tasmania. In Australia, a few supermarket chains, which account for the majority of retail supermarket sales in the country, have reduced prices for store brand milk by 5 cents per liter. A dairy farming group's spokesperson stated farmgate milk prices are currently near the cost of production and the lower price will add deflationary pressure to farmgate milk prices. An Australian dairy company recently announced a partnership with a U.S. cheese company to build a processing facility in Victoria. NEW ZEALAND: A New Zealand dairy cooperative recently announced their forecasted farmgate milk price for the 2024/2025 season increased amid strong GDT results and tighter global milk supplies. A group in New Zealand, which forecasts dairy prices, increased the forecasted milk price for the 2024/2025 season, following GDT event 365. The New Zealand government recently announced they have finished negotiations with the United Arab Emirates (UAE) for a free trade agreement that will remove tariffs on a portion of exports from New Zealand. Recently released data from New Zealand for August showed the number of dairy cows sent to slaughter during the month declined from August 2023. The previously released slaughter numbers from March to May were revised downwards. From the start of 2024 through August, cow slaughter numbers are down from the same time in 2023.

SOUTH AMERICA: Some contacts say cooler than seasonal weather is providing improvements in cow comfort levels in Uruguay, but those reports pale in comparison to the broader milk outlook throughout most of the South American region, including Uruguay. Rains in autumn and winter months have been replaced by prolonged dryness. Contacts in Brazil are reporting very dry conditions, including wildfire threats, and reports suggest crop and milk output growth are dependent on near-term rainfall in all of the region's dairy producing areas.

US NATIONAL RETAIL REPORT: Advertisement totals decreased by 25 percent for organic dairy ads, while conventional ad numbers slid by 18 percent compared to last week. Prices for conventional cheese in 6-8 ounce packages varied this week as shredded and block cheese increased while slices dipped in price. Adds for conventional ice cream in 48- 64 ounce containers doubled those of ice cream in 14-16 ounce containers. The weighted average advertised price for the 48-64 ounce container was $4.28, which represents a 63 cent increase compared to last week. Milk leads the way in advertised organic dairy commodities. Half gallon containers of organic milk still command an organic premium of $3.45 over half gallon containers of conventional milk.