Livestock analyst Jim Wyckoff stories on poultry, pork, beef and dairy information from across the globe
5 July 2024
11 minute learn
China’s beef costs plunge
Chinese language wholesale beef costs have dropped 18% from final yr’s peak to round 62 yuan ($8.53) a kilogram as provides outpace demand. Beijing pushed farmers to extend home beef manufacturing and in addition inspired extra imports. However the slowing economic system has dragged native costs to a five-year low as provides pile up in frozen storage.
Butter costs have reached a report excessive of $7,350 per metric ton
That surpassed the earlier peak of $7,086 in 2022, attributable to restricted international provide forward of the vacation baking season. The newest World Dairy Commerce public sale, which helps set dairy costs, confirmed this sharp improve as demand for cheese has led dairy processors to allocate extra milk for cheese manufacturing. Butter has seen elevated demand because the Covid-19 pandemic, with customers stockpiling at house. U.S. producers haven’t expanded butter manufacturing capability, focusing as a substitute on cheese. The tight provide can also be pressured by the extremely virulent chook flu virus affecting dairy cows. Meals and confectionery makers are feeling the pinch as in addition they face excessive cocoa costs and inflation in different commodities like orange juice and robusta espresso. World consumers are paying premiums for quick supply as a result of tight provide, particularly in the course of the Northern Hemisphere summer time. Nonetheless, there could also be some short-term aid as butter costs have traditionally slumped at early July auctions.
USDA plans to amend Federal Milk Advertising Orders (FMMOs)
Key adjustments embody:
· Updating Milk Consumption Elements to three.3% true protein, 6.0% different solids, and 9.3% nonfat solids.
· Eradicating 500-pound barrel cheddar cheese costs from the Dairy Product Necessary Reporting Program survey, utilizing solely 40-pound block cheddar cheese costs for month-to-month common cheese value dedication.
· Updating manufacturing allowances to Cheese: $0.2504; Butter: $0.2257; NFDM: $0.2268; and Dry Whey: $0.2653.
· Proposing a butterfat restoration issue replace to 91%.
· Setting Base Class I Skim Milk costs on the larger of the superior Class III or Class IV skim milk costs for the month.
· Adopting a rolling month-to-month Class I prolonged shelf life (ESL) adjustment for higher value fairness for ESL merchandise.
· Updating Class I differential values to mirror elevated servicing prices, with county-specific Class I differentials specified.
A 60-day remark interval will observe the plan’s publication within the Federal Register in early July.
NMPF President & CEO Gregg Doud stated: “Primarily based on our preliminary studying, NMPF is heartened that a lot of what we proposed after greater than two years of coverage improvement, and one other yr of testimony and clarification, is mirrored in USDA’s beneficial Federal Milk Advertising Order modernization plan. Crafting an efficient milk-pricing system for farmers is advanced and requires a cautious stability. USDA’s plan acknowledges that complexity and, whereas not matching our proposal in each element, appears to be like largely in step with the great strategy painstakingly decided by the work of dairy farmers and their cooperatives over the previous three years.”
“Our dairy farmers need to be pretty compensated for his or her merchandise and for too lengthy they’ve felt the financial ramifications of the 2018 farm invoice pricing change,” stated Sen Kirsten Gillibrand (D-N.Y.). “I look ahead to working with USDA to finalize these amendments to help our New York dairy farmers.”
Influence: USDA analysts stated if the “larger of” method had been in use from 2019-23, farmers would have obtained $4 billion, or 10%, extra for fluid milk than they really had been paid. When all of the amendments are weighed, the overall pool worth of milk over the 5 years would have been $2 billion, or 1.6%, larger than it was. The pool is the mixed worth of the 4 courses of milk.
Tyson pulls again on antibiotic-free beef
Tyson Meals Inc. is downsizing its antibiotic-free beef choices after backing away from hen raised with out antibiotics final yr. In strikes pointing to a broader shift, the corporate advised a serious buyer late in 2023 that it wouldn’t have the ability to hold supplying it with beef raised with out antibiotics, based on Bloomberg citing an individual acquainted with the choice. Tyson additionally stated antibiotic-free beef from its Open Prairie Pure Meats model can be restricted beginning in January, based on a doc seen by Bloomberg.
FDA research: Pasteurization kills H5N1 virus in milk
Generally used pasteurization time and temperature necessities are efficient at inactivating the H5N1 virus in milk merchandise, an FDA research launched Friday confirmed. These outcomes complement FDA’s preliminary retail sampling research through which all 297 samples of dairy merchandise collected at retail areas had been discovered to be damaging for viable H5N1 virus.
USDA hogs and pigs report: hog herd expands greater than anticipated
USDA’s Hogs & Pigs Report estimated the June 1 U.S. hog herd at 74.486 million head, up 935,000 head (1.3%) from year-ago and 347,000 head than the common pre-report estimate implied. The breeding herd declined 198,000 head (3.2%) to six.008 million head, however the market hog stock elevated 1.134 million head (1.7%) to 68.479 million head. The information implies slaughter will run round 2% above year-ago via summer time after which barely greater than 1% larger via the fourth quarter and early 2025.
USDA formally proclaims further help for dairy herds affected by extremely pathogenic avian influenza (HPAI)
The data echoes what we reported on Thursday. Dairy producers who’ve skilled a loss in milk manufacturing attributable to HPAI can now apply for funds beneath the up to date Emergency Help for Livestock, Honeybees, and Farm-raised Fish Program (ELAP). The help is on the market to these with dairy herds confirmed to have HPAI via constructive take a look at outcomes from USDA’s Animal and Plant Well being Inspection Service (APHIS) Nationwide Veterinary Companies Laboratories (NVSL).
The help covers a 21-day interval of no milk manufacturing when a cow is faraway from the milking herd and a further seven days when the cow returns to milking however produces solely 50% of the traditional quantity. Funds are primarily based on the month-to-month all-milk value, nationwide milk manufacturing statistics, and a normal variety of days with lowered or no manufacturing. The deadline to file a discover of loss and utility for cost is Jan. 30, 30 days after the top of the prior calendar yr.
USDA’s Agricultural Advertising Service (AMS) revealed a proposed rule on Honest and Aggressive Livestock and Poultry Markets
The rule within the Federal Register initiates a 60-day remark interval ending on August 27. The rule has garnered each criticism and reward throughout the US agriculture trade. In the course of the Workplace of Administration and Funds (OMB) assessment, there have been 4 conferences held—two with teams opposing the rule and two with teams supporting it. The forthcoming feedback are anticipated to mirror the problems raised throughout these conferences.
Weekly USDA dairy report
CME GROUP CASH MARKETS (6/28) BUTTER: Grade AA closed at $3.1250. The weekly common for Grade AA is $3.0840 (-0.0123). CHEESE: Barrels closed at $1.8800 and 40# blocks at $1.9100. The weekly common for barrels is $1.8970 (-0.0505) and blocks $1.8925 (+0.0244). NONFAT DRY MILK: Grade A closed at $1.1825. The weekly common for Grade A is $1.1855 (-0.0133). DRY WHEY: Additional grade dry whey closed at $0.4900. The weekly common for dry whey is $0.4830 (+0.0055).
BUTTER HIGHLIGHTS: Contacts within the East and West say excessive temperatures at the beginning of summer time have had a damaging affect on milk manufacturing. This has contributed to cream volumes tightening all through the nation. Within the Central area, contacts say spot a great deal of cream stay inside fiscal attain for butter makers. Contacts within the East say butter manufacturing is slowing, however butter manufacturing is regular within the West. Within the Central area, contacts relay butter demand is barely higher than in prior years. Within the West, contacts report softening demand for retail and meals service butter. Salted butter is on the market within the West, however contacts say unsalted inventories are tight. Bulk butter overages vary from 3.0 to 10.0 cents over market worth.
CHEESE HIGHLIGHTS: Cheese manufacturing schedules are combined all through the U.S. Within the East, contacts relay regular cheese manufacturing schedules and regular demand from each retail and foodservice prospects. Cheese producers within the Central area share regular manufacturing schedules. Some contacts have shared they’re refraining from buying further spot a great deal of milk as a result of upcoming Independence Day vacation as some cheese manufacturing traces could also be down for a four-day weekend. Some contacts share continued robust demand for cheese and restricted spot stock, whereas others have shared demand is regular however has slowed down from latest weeks and months. Lighter milk manufacturing via many of the West has contributed to lighter cheese manufacturing schedules. Cheese is on the market for spot purchasers, however inventories will not be free. Retail demand is robust forward of the vacation subsequent week. The NASS Chilly Storage report launched earlier this week revealed complete pure cheese shares on Might thirty first had been down barely from April however had been up 4 p.c from a yr in the past.
FLUID MILK: Farm degree milk manufacturing is combined. Milk manufacturing within the Northeast and higher mountain states is holding regular, whereas the Southeast, Central, and West areas have had weaker milk output ranges in latest weeks. Summer season temperatures are reaching the 100-degree mark throughout the southern tier of states, and storm methods with excessive humidity moved throughout the Higher Midwest and Northeast. That mixture of warmth and humidity has put the squeeze on milk manufacturing. Cheesemakers have seen spot milk provides are much less frequent prior to now two weeks. Nonetheless, they anticipate subsequent week will deliver comparatively extra accessible milk and cream choices, adopted by a return of tightening milk provides within the week following the vacation. Midwest spot milk costs ranged from $1.50-under to Class III this week. Bottling for Class I has eased right into a slower summer time tempo. Demand for all different Lessons is holding regular as some processors are slowing manufacturing for the approaching midweek vacation in July. Condensed skim spot masses are typically accessible within the East for finish customers. Nonetheless, the West has tighter market provides, and demand has remained regular. Cream provides are tightening for butter makers, as ice cream makers, who’re close to peak manufacturing, are taking up extra of the decreasingly accessible cream. Cream multiples for all Lessons are 1.20 – 1.40 within the East; 1.21 – 1.35 within the Midwest; and 1.05 – 1.30 within the West.
DRY PRODUCTS: Low/medium warmth nonfat dry milk (NDM) costs had been combined this week. Condensed skim availability elevated based on some suppliers, however NDM manufacturing schedules are regular this week and anticipated to be restricted subsequent week with the Thursday vacation. Dry buttermilk costs had been regular within the Central/ East areas, whereas shifting larger within the West. Condensed buttermilk availability is seasonally lowering. Dry complete milk costs moved larger attributable to restricted manufacturing time and seasonal milk drawdowns. Dry whey costs had been regular to larger nationally. Some processors of brand-specific whey say volumes are tight shifting into Q3, whereas interchangeable masses are considerably accessible. Whey protein focus (WPC) 34% costs had been unchanged, as restricted demand and lighter manufacturing are protecting markets from both bullish or bearish developments. Lactose costs had been combined, as some producers relay volumes are tightening. Acid and rennet casein costs rebounded after a drop throughout report week 25.
ORGANIC DAIRY MARKET NEWS: Federal Milk Market Order 1 reported utilization of natural complete milk by pool vegetation in Might 2024 was up from the earlier yr. The AMS reported April 2024 estimated U.S. sale of complete natural milk merchandise was up from the earlier yr and is up year-to-date. The April 2024 European natural milk common pay value elevated in Austria in comparison with March, however decreased in France, Germany, and Bavaria. A big Dutch natural milk processor introduced that the assured value for natural farm milk in July 2024 is up from June. Lately launched knowledge within the UK confirmed natural milk manufacturing declined in Might from the identical month a yr in the past, whereas 2023/2024 milk yr manufacturing of natural milk is down from 2022/2023. Within the week 26 retail advert survey, the overall variety of natural dairy adverts elevated from the earlier survey. Essentially the most marketed natural dairy commodity this week was milk. The second most marketed natural dairy commodity was bitter cream, which additionally noticed the biggest proportion development this week.
MAY MILK PRODUCTION (NASS): Milk manufacturing within the 24 main States throughout Might totaled 18.9 billion kilos, down 0.7 p.c from Might 2023. April revised manufacturing, at 18.3 billion kilos, was down 0.4 p.c from April 2023. The April revision represented a lower of 27 million kilos or 0.1 p.c from final month’s preliminary manufacturing estimate. Manufacturing per cow within the 24 main States averaged 2,122 kilos for Might, 3 kilos under Might 2023. The variety of milk cows on farms within the 24 main States was 8.89 million head, 52,000 head lower than Might 2023, however 5,000 head greater than April 2024.
MAY COLD STORAGE (NASS): Complete pure cheese shares in refrigerated warehouses on Might 31, 2024, had been down barely from April 2024 and down 4 p.c from Might 31, 2023. Butter shares had been up 5 p.c from April 2024 and up 3 p.c from Might 31, 2023.
MARCH MAILBOX MILK PRICES (FMMO): In March 2024, mailbox milk costs for chosen reporting areas in Federal milk orders averaged $19.98 per cwt, up $0.35 from the February 2024 common and down $0.34 per cwt from the March 2023 common. The element exams of producer milk in March 2024 had been: butterfat, 4.25%; protein, 3.32%; and different solids, 5.78%.
MAY MARKET SUMMARY AND UTILIZATION (FMMO): Throughout Might, 12.9 billion kilos of milk had been obtained from Federally pooled producers. This quantity of milk is 4.5 p.c decrease than the Might 2023 quantity. Regulated handlers pooled 3.4 billion kilos of producer milk as Class I merchandise, up 0.1 p.c when in comparison with the earlier yr. The all-market common Class utilization percentages had been: Class I = 26%, Class II = 8%, Class III = 59%, and Class IV = 7%. The weighted common statistical uniform value was $19.78 per cwt, $1.54 larger than final month and $1.53 larger than final yr.
JUNE RETAIL PRICES (FMMO): U.S. easy common costs are: $4.37 per gallon for standard complete milk, $4.31 per gallon for standard lowered fats 2% milk, $4.82 per half gallon natural complete milk, and $4.82 per half gallon natural lowered fats 2% milk.
NATIONAL RETAIL REPORT: Complete standard dairy adverts elevated 13 p.c, whereas natural dairy adverts elevated by 11 p.c. Standard cheese was essentially the most marketed dairy commodity. Standard ice cream in 48–64-ounce containers was essentially the most marketed single merchandise. Natural milk in half-gallon containers was essentially the most marketed single natural dairy merchandise this week. As a commodity, standard butter adverts elevated 61 p.c from the earlier week.
