Market analyst Jim Wyckoff reports on global protein markets
US cattle inventory report neutral compared to expectations but underlying data bullish
USDA estimated there were 87.157 million head of cattle in the U.S. as of Jan. 1, down 1.684 million head (1.9%) from last year. The beef cow herd dropped 716,000 head (2.0%) to 28.233 million head. The 2023 calf crop was estimated at 33.593 million head, down 847,000 head (2.5%) from the previous year. The total cattle herd was the smallest since 1951 and last year’s calf crop was the smallest in 82 years. While the data was neutral compared to pre-report expectations, the underlying data was bullish as the U.S. cattle herd contracted further — and will continue to do so.
Weekly US beef, pork export sales
Beef: Net US sales of 16,700 MT for 2024 were primarily for Japan (5,200 MT, including decreases of 1,100 MT), China (3,300 MT, including decreases of 300 MT), Mexico (2,500 MT, including decreases of 100 MT), South Korea (1,400 MT, including decreases of 400 MT), and Taiwan (1,200 MT, including decreases of 100 MT). Exports of 15,400 MT were primarily to South Korea (4,200 MT), Japan (4,200 MT), China (2,300 MT), Mexico (1,700 MT), and Taiwan (700 MT).
Pork: Net US sales of 42,900 MT for 2024 primarily for Mexico (13,400 MT, including decreases of 1,300 MT and 3,000 MT – late), China (12,600 MT, including decreases of 100 MT), Canada (4,200 MT, including decreases of 700 MT), Japan (3,100 MT, including decreases of 1,200 MT and 100 MT – late), and Colombia (2,600 MT), were offset by reductions for Costa Rica (100 MT). Exports of 30,100 MT were primarily to Mexico (10,700 MT), Japan (3,600 MT), South Korea (3,500 MT, including 100 MT – late), China (3,000 MT, including 200 MT – late), and Colombia (2,800 MT, including 300 MT – late).
China reports human death from avian influenza
China on Wednesday reported the death of a 63-year-old woman due to an infection of mixed H3N2 and H10N5 avian influenza. The woman from Anhui province died on Dec. 16 due to the severity of the disease. “The outbreak is an episodic cross-species transmission from bird to humans,” the National Disease Control and Prevention Administration said. The risk of the virus infecting people is low, and no human-to-human transmission has occurred, it added.
Review of USDA ‘product of USA’ labeling plan continues at OMB
The National Meat Institute (NMI) has already had a session with the Office of Management and Budget (OMB) on USDA’s final rule for putting in place a voluntary Product of USA label. Their session involved officials from USDA and the Office of the U.S. Trade Representative (USTR) and likely focused on issues raised by NMI in the comments they filed during the request for public comment on the proposed rule released in 2023. A session today will have Canada detailing their position on the final rule via Edward Farrell, a lawyer with the OFW law firm in Washington, DC, who advised Canadian cattlemen in their challenge at the WTO over the U.S. Country of Origin Labeling program. Another meeting is currently scheduled for Feb. 6 with the National Turkey Federation. It is unclear how much USDA’s final rule will have differed from the proposed rule released in 2023 but several U.S. meat industry stakeholders raised concerns about the rule and the potential impacts it could have on trade and other areas.
Bipartisan bill introduces new labeling rules for plant-based and cell-cultured meat products
A bipartisan bill introduced in both the House and Senate, known as the Fair and Accurate Ingredient Representation (FAIR) on Labels Act of 2024, aims to establish new labeling requirements for plant-based and cell-cultured meat alternative products. The bill, introduced by Sen. Roger Marshall (R-Kan.) in the Senate and Rep. Mark Alford (R-Mo.) in the House, seeks to ensure clear labeling for consumers, including terms like “imitation” and “cell-cultured” on product labels. It addresses concerns about transparency in food labeling, especially for products designed to resemble traditional meat and poultry.
The FAIR Labels Act introduces specific definitions for “imitation meat” and “imitation poultry” for plant-based meat alternatives. These definitions would apply to products that resemble meat but do not contain actual meat. The bill requires the use of “imitation” or similar terms on labels and mandates a disclaimer stating that these products do not contain meat or poultry.
For cell-cultured meat and poultry products, the bill establishes definitions and grants the USDA authority over their labeling. It requires the use of terms like “cell-cultured” or “lab-grown” on labels to clearly differentiate these products from traditionally farmed meat.
The bill has received support from various agricultural and livestock trade groups, who believe it will help prevent consumer confusion and protect the reputation of traditional meat products in the marketplace.
Plant-based meats accounted for 2.5% of retail packaged meat sales in 2022, according to the Good Food Institute.
USDA concludes national milk marketing order pricing hearing
USDA has concluded its National Federal Milk Marketing Order pricing formula hearing, marking the first update to the system regulating minimum milk prices for farmers in nearly two decades. This hearing has highlighted the divisions within the dairy industry, leading some dairy cooperatives to exit a major dairy trade group. The next step involves putting the proposed changes to a vote among farmers, potentially bringing significant alterations to how dairy farmers are compensated. The hearing took place over several months in Carmel, Indiana, where various stakeholders, including dairy groups, farmers and dairy processors, testified on 21 different proposals. USDA spokesperson Allan Rodriguez mentioned the department is currently working through the necessary steps before the decision is voted on by dairy farmers.
China’s hog herd declines notably
China’s pig herd at the end of 2023 fell 1.8% from the previous quarter and 4.1% from a year ago to 434.22 million head, the ag ministry said. The sow herd dropped 2.3% from the previous quarter and 5.7% from last year to 41.42 million head.
USDA sends animal ID plan to OMB
USDA has sent a final rule to the Office of Management and Budget (OMB) on updating animal disease traceability regulations to require the Animal and Plant Health Inspection Service (APHIS) to only recognize identification devices as official identification for cattle and bison if the devices have both visual and electronic readability (EID). USDA has targeted finalizing the rule in April.
China allows qualified pork imports from Russia
China’s customs administration began allowing the import of pork from qualified regions of Russia last week. Pork imports from regions of Russia without African swine fever are now allowed.
Weekly USDA dairy report
CME GROUP CASH MARKETS (1/26) BUTTER: Grade AA closed at $2.7600. The weekly average for Grade AA is $2.6230 (+0.0586). CHEESE: Barrels closed at $1.4700 and 40# blocks at $1.5375. The weekly average for barrels is $1.4590 (-0.0023) and blocks, $1.5120 (+0.0295). NONFAT DRY MILK: Grade A closed at $1.2200. The weekly average for Grade A is $1.1960 (+0.0091). DRY WHEY: Extra grade dry whey closed at $0.4425. The weekly average for dry whey is $0.4380 (+0.0249).
BUTTER HIGHLIGHTS: Retail demand is steady, aside from winter storm activity negatively impacting demand in some northwestern parts of the West region. Food service demand across the nation is mixed. Harsh snow and ice storms in the West have lightened buyer activity in the region. Food service demand is reported as increasing slightly in the East region. Bulk butter demand is steady. Cream loads are readily available. However, butter production is mixed throughout the country. Some butter makers in the Pacific Northwest have contended with power losses and transportation difficulties from harsh winter weather. Some stakeholders note tight unsalted butter availability. That said, current salted and unsalted inventory levels are sufficient to meet most immediate buyer needs. Bulk butter overages range from 1 to 8 cents above market, across all regions.
CHEESE HIGHLIGHTS: Strong milk volumes continue to be available for Class III manufacturing in the East where plant managers note steady production schedules. Cheddar and mozzarella inventories are noted to be comfortable. Foodservice demand is higher than in recent weeks. Retail cheese demand is steady to stronger. In the Central region, some cheese plants have come back online after scheduled downtime. Cheese processors relay spot milk availability has tightened, and prices were reported above Class III for the first time since before the winter holidays. Cheese demand is stronger, but on par with this time in previous years. Foodservice and retail contacts note American-style cheese orders are stronger than normal for late January. Winter weather interrupted some retail and foodservice cheese demands in some western states. Spot milk availability is mixed as some contacts note transportation delays. Other contacts note spot loads of milk being offered below Class III prices. Cheese inventories are readily available for spot purchasers. Export demand is noted to be steady.
FLUID MILK: Milk production is trending in seasonal patterns, steady to slightly higher week over week, throughout the country. Component levels, according to East and West contacts, have reached their peak. Milk loads are available for all Classes. Cheesemakers in the West and Central regions continue to find some spot loads at below -Class prices, although Midwestern cheesemakers also reported spot prices above Class for the first time this year. Reported Midwestern Class III spot loads ranged from $1-under to $1-over Class. Western milk contacts reported Class III spot milk as low as $7-under Class III. Cream is widely available. Butter plant managers across the country are fielding plentiful offers on cream. Condensed skim availability is generally steady, as loads are not difficult to find for processors. F.O.B. cream multiples are 1.00-1.20 in the East, .90-1.25 in the Midwest, and 1.00-1.20 in the West.
DRY PRODUCTS: A number of Market News contacts attended industry events this week, and dairy powder market tones, on the whole, are viewed as steady to slightly bullish moving further into the winter months. Low/medium and high heat nonfat dry milk (NDM) prices were mixed in the Central/East regions, while steady to slightly higher in the West. Condensed skim supplies are available, and low/ medium heat NDM manufacturing remains the focus of processors in the country. Dry buttermilk prices were steady in all regions. Demand remains somewhat quiet, although inventories are not concerning. Dry whole milk prices held steady, as well. Dry whey prices moved higher in most facets this week. Demand for high protein concentrations, such as whey protein concentrate 80%, has pushed more solids into those processing channels, keeping sweet whey powder volumes somewhat firm. Whey protein concentrate 34% prices were steady to higher this week. Lactose prices were mixed. Domestic demand for both whey protein concentrate 34% and lactose is somewhat hearty in the U.S. Casein prices were unchanged on steady demand.
ORGANIC DAIRY MARKET NEWS: In the week 4 retail dairy survey, the number of organic ads increased by 37 percent, after declining in week 3. The most advertised organic dairy category is milk in this week’s survey, despite a decline in ad numbers. Organic cheese and yogurt were the second and third most advertised commodities found in this week’s survey. Organic cottage cheese and sour cream appeared in this week’s survey, after not appearing in week 3. Meanwhile, total ads declined for two dairy commodities this week. One of these, organic ice cream, appeared in last week’s survey, but was not present in any surveyed ads this week. Organic milk ad numbers declined by 1 percent this week. Ads for organic gallons of milk increased by 6 percent, while ads for organic half gallons declined by 6 percent. Despite a decline in the total number of ads, organic half gallon milk remained the most advertised organic item in the survey this week. The weighted average advertised price for organic half gallon milk this week was $4.09, down 26 cents from last week. Conventional half gallon milk had a weighted average advertised price of $2.21. The organic premium for milk in half gallon containers was $1.88 this week.
NATIONAL RETAIL REPORT: Total conventional dairy advertisements decreased by 15 percent, while total organic dairy ads increased by 37 percent. Ice cream in 48-64 ounce containers was the most advertised dairy product, with a weighted average advertised price of $4.45, up from $4.27 the week prior. Conventional butter in one-pound packages had a weighted average advertised price of $4.80, down from $4.88 the week prior.