Analyst Jim Wyckoff shares protein information from all over the world
29 December 2023
10 minute learn
USDA hogs and pigs report bearish
USDA’s Hogs & Pigs Report final Friday estimated the U.S. hog herd at 74.971 million head as of Dec. 1, up 15,000 head from year-ago, whereas merchants anticipated a 481,000-head decline based mostly on the common pre-report estimate. The market hog stock elevated 221,000 head (0.3%) from year-ago, whereas the breeding herd declined 205,000 head (3.3%). The info was unfavourable in comparison with pre-report expectations, although it wasn’t overly bearish. Nonetheless, the sharp revisions to previous information will enhance dealer skepticism towards these numbers and will trigger them to consider USDA’s sampling methodology is constantly undercounting hog numbers.
USDA cattle-on-feed report mildly bearish
USDA’s Cattle on Feed Report estimated the Dec. 1 giant feedlot (1,000-plus) head stock elevated 313,000 head (2.7%) from year-ago. Merchants anticipated feedlot provides to rise 257,000 head (2.2%). November placements of cattle into feedlots declined 1.9%, although merchants anticipated a 3.8% decline. November marketings fell 7.4% in contrast with the anticipated 6.7% drop. The info is mildly unfavourable in comparison with pre-report expectations, although we doubt it should have a lot of lasting market impression.
USDA chilly storage report: US pork shares decline lower than regular
USDA’s Chilly Storage Report confirmed pork inventories totaled 416.1 million lbs. on the finish of November, down 21.8 million lbs. (5.0%) from October. The five-year common was a forty five.2-million-lb. decline throughout the month. Pork shares dropped 35.5 million lbs. (7.9%) from year-ago and have been 55.1 million lbs. (11.7%) below the five-year common. Beef shares totaled 454.7 million lbs., up 9.0 million lbs. (2.0%) from October. The five-year common was a ten.4-million-lb. enhance throughout the month. Beef shares fell 68.6 million lbs. (13.1%) from year-ago and have been 49.0 million lbs. (9.7%) lower than the five-year common.
Massachusetts seeks dismissal of Q3 animal welfare legislation problem
The state of Massachusetts has requested the dismissal of a lawsuit difficult its Query 3 (Q3) animal welfare legislation. They argue that Triumph Meals’ grievance lacks advantage as the corporate can’t reveal hurt ensuing from the associated laws. The Q3 requirements, which regulate pork offered in Massachusetts, got here into impact on Aug. 24. Triumph Meals claims that Q3 violates the Commerce Clause and different provisions of the U.S. Structure.
U.S. District Decide William Younger beforehand rejected a lot of the grievance in October however maintained a declare that the legislation discriminates in opposition to out-of-state producers. Massachusetts, in its movement to dismiss on Dec. 18, identified that every one Triumph merchandise are offered by way of Seaboard Meals below a 2004 settlement. State officers argued that Triumph has not confirmed that Seaboard can’t proceed to fulfill its obligations below the settlement regardless of Massachusetts’ insurance policies. Due to this fact, they contend that your complete amended grievance must be dismissed for lack of jurisdiction.
USDA reviews on Spain’s exports
In 2022, Spain imported $2.2 billion of agricultural and associated merchandise from the USA, stated USDA in a report. Outdoors the European Union Member States, the USA was the fifth largest origin of agricultural and associated imports. Spain acquired 74.7 million worldwide vacationers within the first ten months of 2023, and it’s forecast to achieve a record-breaking 86.5 million vacationers by the tip of the yr. This optimistic state of affairs, together with decrease unemployment charges, is boosting shopper incomes. That is partly offset by ongoing worth will increase, forcing some customers to tighten their budgets. Nonetheless, the medium-term revenue development is predicted to be affordable, which is able to proceed to create alternatives for sure consumer-oriented meals objects, in addition to improve long-term prospects for different merchandise. This report supplies steering to U.S. firms curious about exporting consumer-ready meals merchandise to Spain and contains an outline of Spain’s financial state of affairs, market construction, and export necessities.
Extra HPAI finds in Kansas, California, South Dakota
USDA’s Animal and Plant Well being Inspection Service (APHIS) has confirmed extremely pathogenic avian influenza (HPAI) in extra industrial operations in a number of states which have already reported instances. Circumstances confirmed Dec. 18 included Sonoma County, California (497,700 industrial desk egg layer birds) and Edmunds County, South Dakota (1,000 birds at a industrial upland recreation producer). Dec. 19 confirmations introduced by APHIS embody Muskegon County, Michigan (47,900 industrial turkey meat birds); Rice County, Kansas (800,000 industrial desk egg layer birds); and Sonoma County, California (3,500 industrial duck meat birds).
USDA sees meals worth inflation at simply 1.2% in 2024 for all meals, down from 2.9% in November
That’s the smallest rise in meals costs since they elevated 0.9% in 2017, based on USDA’s Financial Analysis Service (ERS). Meals at dwelling (grocery) costs are actually seen falling 0.6% in 2024, down from an outlook for a rise 1.6% in November, and can be the steepest decline in grocery costs since they fell 1.3% in 2016. Costs additionally decreased in 2017 by 0.2%. Restaurant costs, nonetheless, are actually anticipated to extend 4.9%, up from 4.3% in November and the best forecast since USDA began releasing their 2024 outlook in July.
Weekly USDA dairy report
CME GROUP CASH MARKETS (12/22) BUTTER: Grade AA closed at $2.5400. The weekly common for Grade AA is $2.5795 (+0.0825). CHEESE: Barrels closed at $1.3925 and 40# blocks at $1.3900. The weekly common for barrels is $1.3980 (-0.1030) and blocks, $1.4280 (-0.1460). NONFAT DRY MILK: Grade A closed at $1.1600. The weekly common for Grade A is $1.1605 (-0.0045). DRY WHEY: Additional grade dry whey closed at $0.3800. The weekly common for dry whey is $0.3835 (-0.0105).
BUTTER HIGHLIGHTS: Retail butter demand is combined, with some stakeholders reporting vacation ordering is essentially fulfilled and different stakeholders reporting patrons eagerly looking for to fill remaining vacation wants. Meals service demand is stable. Cream provides for churning are available all through the nation. Cream demand is combined. Butter producers within the western and central areas point out cream demand is robust to regular, whereas contacts within the japanese area report regular to lighter cream demand. Butter makers are working lively manufacturing schedules using elevated spot load availability of cream. Producers within the west area point out availability of bulk and unsalted butter is considerably looser.
CHEESE HIGHLIGHTS: Milk volumes obtainable for cheese manufacturing stay robust within the Northeast. Plant downtime scheduled for end-of-year holidays will sluggish manufacturing within the coming weeks. Cream cheese demand has been robust for vacation baking, and each cheddar and mozzarella calls for are regular. Within the Central area, milk is obtainable for cheese processing, however not in as robust provide as in years previous. Contacts report some beneath Class spot milk costs, however recommend flat market and above Class costs are additionally current. Cheese inventories are balanced within the Midwestern states. Western cheese inventories are snug, although spot a great deal of cheese differ from producer to producer. Contacts share there are robust milk portions obtainable for manufacturing. Retail demand is regular. Foodservice demand is famous to be weaker within the West.
FLUID MILK: Farm degree milk manufacturing is regular to larger throughout the nation. Within the Northeast, milk outputs are larger. Feed high quality stays excessive and has contributed to stronger milk elements. Cream is changing into extra obtainable within the area, although contacts word demand has softened forward of end-of-year holidays. Class I demand is lighter as instructional establishments shut by way of the tip of the yr. Within the Central area, fluid milk volumes proceed to develop. Farmers share milkfat contents proceed to enhance because of hearty feed high quality. Cheese processors report some costs as little as $5-under Class to $0.25-over Class III. Western milk manufacturing is mostly regular. Cream is changing into extra obtainable on the shut of the yr. FOB cream multiples for all Lessons are 1.00-1.28 within the East, 1.00-1.08 within the Midwest, and 0.80-1.18 within the West.
DRY PRODUCTS: Central and East low/medium warmth nonfat dry milk (NDM) costs moved larger on the backside of the vary. Provides are comfortable, although mild demand has not positioned additional pressure on inventories. NDM markets proceed to hover across the $1.20 per pound mark. Plant managers relay some dryers have been down for upkeep, whereas others are planning extra in depth downtime by way of the tip of the yr. Excessive warmth NDM buying and selling was quiet. Within the West, low/medium warmth NDM demand is regular, and processors relay various spot availability. Some contacts share manufacturing has been paused till the New 12 months. Dry buttermilk costs inched larger within the Central and Jap areas. Churning exercise is rising, and condensed buttermilk inventories are rising. Dry buttermilk costs inched larger on the high quality within the West, as spot availability stays tight. Drying schedules are reportedly regular. Dry entire milk costs moved larger. Dry whey costs shifted decrease within the Central area. Processors word inventories are tight, whereas brokers relay having dry whey available. Dry whey buying and selling exercise was sluggish within the East. Many Class III crops have scheduled downtime for the remainder of the yr, and liquid whey provides will wane because of this. Within the West, liquid whey volumes are capable of match regular to stronger drying schedules. Whey protein focus 34% (WPC 34%) costs pushed larger. Demand is robust forward of finish of yr holidays. WPC 34% manufacturing is lighter, and plenty of processors are specializing in whey protein focus 80% and whey protein isolate manufacturing. Lactose demand from spot purchasers is robust. Contacts share inventories are tightening, although spot masses are simpler to seek out. Rennet casein costs moved larger, whereas the acid casein worth vary was unchanged. Rennet casein manufacturing is regular to lighter, although demand is famous to be robust. Acid casein manufacturing is reportedly robust in Oceania. I
NTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPE: As anticipated, weekly European milk deliveries have taken their seasonal flip upwards. Nonetheless, relying on the view, milk output in Europe in 2023 has been in need of expectations. Summer time warmth and dry situations have tampered milk manufacturing in France and Italy. Month-to-month milk manufacturing numbers in Germany and the Netherlands have just lately fallen beneath earlier yr ranges. Equally, month-to-month EU milk output can be beneath ranges from final yr. Based on CLAL information made obtainable to USDA, October 2023 EU cows’ milk delivered to dairies is estimated at 11,505,000 MT, down 1.6 p.c in comparison with final yr. 12 months-to-date EU cows’ milk delivered to dairies by way of October 2023 is estimated at 122,332,000 MT, a rise of 0.3 p.c when in comparison with January-October 2022 EU milk manufacturing. Amongst among the prime Western EU milk producers, the year-to -date milk deliveries and share adjustments from January-October 2022 are Germany, 27,269,000 MT, +2.0 p.c; France, 19,647,000 MT, -2.7 p.c; and Netherlands, 11,679,000 MT, +1.7 p.c. The provisional October 2023 cows’ milk delivered to dairies within the UK was 1,221,600 MT, down 2.6 p.c from October 2022. 12 months-to-date cows’ milk deliveries within the UK for January-October 2023, 12,862,000 MT, was 0.3 p.c greater than whole milk deliveries in January-October 2022.
EASTERN EUROPE: Components of Jap Europe proceed to have regular milk manufacturing development. Trade sources recommend that other than Ukraine, which is more likely to have had decrease milk manufacturing output due to the battle, the Commonwealth of Impartial States (CIS) have steadily elevated milk manufacturing by way of the course of 2023. Based on CLAL information made obtainable to USDA, amongst among the prime Jap EU milk producers, the year-to-date milk deliveries and share adjustments from January-October 2022 are Poland, 10,895,000 MT, +1.5 p.c; Czech Republic, 2,700,000 MT, +1.6 p.c; and Hungary, 1,373,000 MT, -4.1 p.c.
OCEANIA OVERVIEW: AUSTRALIA: Lately launched export information for Australia, displaying information by way of October of 2023 reveals exports of butter, butter oil, milk, SMP, WMP, and mixtures have been decrease from the beginning of the season in July by way of October, in comparison with final yr. In the meantime, exports of cheese, whey merchandise, and different dairy merchandise have been larger from July by way of October of this yr, in comparison with one yr in the past. NEW ZEALAND: October 2023 New Zealand milk solids reported by DCANZ and NZX are 254.432 million kg, in comparison with 252.061 million kg one yr prior. Based on CLAL, New Zealand season-to-date milk manufacturing by way of October 2023 is 7.330 million MT, in comparison with 7.383 million MT June by way of October 2023, down 0.72 p.c.
SOUTH AMERICA OVERVIEW: Excessive storms in Uruguay and Argentina halted port exercise in areas final weekend/early this week. Some Brazilian states proceed to take care of excessive drought situations. All stated, farmers within the Southern Cone are going through regionally difficult climate occasions. As Brazil tries to increase its inner milk manufacturing and dairy manufacturing, crop yield expectations proceed to slide, as feed prices for dairy farmers are anticipated to do the alternative shifting nearer to the summer season season.
US NATIONAL RETAIL REPORT: Regardless of a late-year surge for standard one-pound butter commercial totals, standard 48-to-64- ounce ice cream was essentially the most marketed of all dairy this week. Half gallon natural milk was essentially the most marketed natural merchandise, per normal. Whole standard and natural advert numbers decreased the penultimate week of 2023 by 20 p.c and 32 p.c, respectively.
