Analyst Jim Wyckoff shares this week’s world protein information
1 September 2023
11 minute learn
Weekly USDA export gross sales for US beef, pork
Beef: Internet US gross sales of 18,200 MT for 2023 have been up 59 p.c from the earlier week and 35 p.c from the prior 4-week common. Will increase have been primarily for China (6,100 MT, together with decreases of 300 MT), Japan (3,400 MT, together with decreases of 900 MT), South Korea (2,400 MT, together with decreases of 500 MT), Taiwan (1,500 MT, together with decreases of 100 MT), and Mexico (1,500 MT, together with decreases of 200 MT). Internet gross sales reductions of 500 MT for 2024 resulted in will increase for Mexico (200 MT), have been greater than offset by reductions for Japan (600 MT). Exports of 19,900 MT–a marketing-year high–were up 69 p.c from the earlier week and 31 p.c from the prior 4-week common. The locations have been primarily to China (4,900 MT), Japan (4,600 MT), South Korea (4,100 MT), Mexico (1,900 MT), and Taiwan (1,300 MT).
Pork: Internet US gross sales of 36,900 MT for 2023 have been up 12 p.c from the earlier week and 45 p.c from the prior 4-week common. Will increase have been primarily for Mexico (12,000 MT, together with decreases of 500 MT), China (7,800 MT), South Korea (5,500 MT, together with decreases of 600 MT), Japan (4,200 MT, together with decreases of 300 MT), and Canada (1,900 MT, together with decreases of 1,200 MT). Whole internet gross sales of 400 MT for 2024 have been for Japan. Exports of 31,300 MT have been up 24 p.c from the earlier week and 16 p.c from the prior 4-week common. The locations have been primarily to Mexico (13,000 MT), Japan (4,400 MT), China (3,000 MT), South Korea (2,700 MT), and Canada (2,700 MT).
USDA: United States and Canadian Hog Stock Down Barely
USDA reviews United States and Canadian stock of all hogs and pigs for June 2023 was 86.2 million head. This was barely decrease than June 2022 and down 2 p.c from June 2021. The breeding stock, at 7.39 million head, was barely decrease than final yr and down 1 p.c from 2021. Market hog stock, at 78.8 million head, was barely decrease than final yr and down 2 p.c from 2021. The semi-annual pig crop, at 80.0 million head, was up 1 p.c from 2022 however down 1 p.c from 2021. Sows farrowing throughout this era totaled 7.06 million head, down 1 p.c from final yr and down 2 p.c from 2021.
United States stock of all hogs and pigs on June 1, 2023 was 72.4 million head. This was up barely from June 1, 2022 however down 1 p.c from March 1, 2023. The breeding stock, at 6.15 million head, was down barely from final yr, however up 1 p.c from the earlier quarter. Market hog stock, at 66.2 million head, was up barely from final yr, however down 1 p.c from final quarter. The pig crop, at 32.9 million head, was up 1 p.c from 2022 however down 1 p.c from 2021. Sows farrowing throughout this era totaled 2.90 million head, down 2 p.c from 2022 and down 5 p.c from 2021.
Canadian stock of all hogs and pigs on July 1, 2023 was 13.8 million head. This was down 1 p.c from July 1, 2022 and down 4 p.c from July 1, 2021. The breeding stock, at 1.24 million head, was down barely from final yr and down 2 p.c from 2021. Market hog stock, at 12.5 million head, was down 1 p.c from final yr and down 4 p.c from 2021. The semi-annual pig crop, at 15.0 million head, was up 1 p.c from 2022, however down 2 p.c from 2021. Sows farrowing throughout this era totaled 1.25 million head, up 1 p.c from final yr, however down 2 p.c from 2021.
USDA: United States and Canadian Cattle Stock Down 3 P.c
USDA reviews all cattle and calves in the USA and Canada mixed totaled 108 million head on July 1, 2023, down 3 p.c from the 111 million head on July 1, 2022. All cows and heifers which have calved, at 43.4 million head, have been down 2 p.c from a yr in the past. All cattle and calves in the USA as of July 1, 2023, totaled 95.9 million head, down 3 p.c from July 1, 2022. All cows and heifers which have calved, at 38.8 million head, have been down 2 p.c from a yr in the past. All cattle and calves in Canada as of July 1, 2023, totaled 12.2 million head, down 1 p.c from the 12.3 million head on July 1, 2022. All cows and heifers which have calved, at 4.62 million head, have been down 1 p.c from a yr in the past.
FSA updates LIP fee fee for Midwest livestock producers
USDA’s Farm Service Company (FSA) is updating the Livestock Indemnity Program (LIP) fee fee to assist livestock producers within the Midwest who’ve misplaced cattle to the intense warmth and humidity skilled this summer season. To assist indemnify ranchers to replicate a pattern in direction of increased cattle weights in feedlots, the 2023 LIP fee fee for beef calves over 800 lbs. will enhance from $1244 per head to $1618. LIP gives advantages to livestock house owners and a few contract growers for livestock deaths exceeding regular mortality from eligible antagonistic climate occasions, sure predation losses and decreased gross sales costs as a consequence of harm from an eligible loss. Indemnity funds are made at a fee of 75% of the prior yr’s common truthful market worth of the livestock. The up to date LIP fee fee is efficient instantly and might be utilized retroactively beginning Jan.1, 2023, for all eligible causes of loss together with extreme warmth, twister, winter storms and different qualifying antagonistic climate. Producers who’ve already obtained LIP funds for 2023 losses will obtain an extra fee, if relevant, commensurate with this up to date fee.
China’s sow herd inches decrease in July
China’s sow herd in July fell 0.6% towards the prior month to 42.71 million head, ag ministry information confirmed. The sow herd was additionally 0.6% smaller than final yr. Hog slaughter in July jumped 26.7% from final yr.
USDA reviews on China’s poultry business
Manufacturing: China rooster meat manufacturing is forecast decrease for from each white broiler and yellow broiler in 2024. White broiler manufacturing is anticipated to say no due to HPAI-related import restrictions that influence avian genetics and associated merchandise. Yellow broiler manufacturing is anticipated to say no as officers shut dwell poultry markets. In 2024, rooster manufacturing from 817 broilers (i.e., a hybrid rooster selection) may witness additional development off a comparatively small base.
Consumption: Each white and yellow rooster consumption is forecast to say no in 2024. Consumption of white broiler rooster merchandise is forecast to say no due to home provide constraints and HPAI-related restrictions on rooster meat imports. Consumption of yellow broiler rooster merchandise is forecast to say no primarily as a consequence of closures of dwell poultry markets. Commerce: In 2024, rooster imports are forecast to develop by 3 p.c to 770 thousand metric tons (MT) with the intention to partially meet the provision hole of home rooster manufacturing.
Hen exports are anticipated to remain at comparable ranges in 2024
USDA initiates public listening to to debate reforms in US dairy pricing
The listening to will embody the presentation of twenty-two competing proposals and goals to handle pricing reform within the dairy sector. Notable proposals come from the Nationwide Milk Producers Federation (NMPF) and the Worldwide Dairy Meals Affiliation (IDFA), each of which initially sought to collaborate on reforms however differed within the scope of their proposals.
NMPF’s proposal goals to revert to a pre-2018 Farm Invoice system for the Class I mover, figuring out milk costs based mostly on charges for Class III (utilized in cheese) and Class IV (together with butter and milk powder). It additionally suggests updates to make allowances and different system parts.
IDFA’s proposal, initially targeted on make allowances, has been revised to incorporate modifications to the Class I mover as effectively. It seeks a hybrid strategy, combining facets of the present mover with the pre-2018 strategy to make sure a assured ground for Class I costs.
The proposals tackle key components like system changes, part elements, and differential pricing. Throughout the listening to, these proposals might be introduced to USDA officers, with testimony anticipated to final a number of weeks.
Following the listening to, USDA will create a draft advice for reform and collect extra feedback earlier than issuing a last choice. Dairy producers will then vote on these modifications in a nationwide referendum anticipated for the second half of 2024.
Each NMPF and IDFA welcome the listening to as an opportunity to handle outdated pricing constructions and advance reforms that go well with the dairy business’s wants. The reform course of goals to stability threat administration and pricing equity throughout completely different courses of milk, reflecting the broader pursuits of dairy stakeholders.
Weekly USDA dairy report
CME GROUP CASH MARKETS (8/25) BUTTER: Grade AA closed at $2.6700. The weekly common for Grade AA is $2.7020 (-0.0185). CHEESE: Barrels closed at $1.8000 and 40# blocks at $1.9450. The weekly common for barrels is $1.8045 (-0.0090) and blocks, $1.9450 (-0.0680). NONFAT DRY MILK: Grade A closed at $1.1050. The weekly common for Grade A is $1.1000 (+0.0020). DRY WHEY: Additional grade dry whey closed at $0.2800. The weekly common for dry whey is $0.2630 (-0.0015).
BUTTER HIGHLIGHTS: Within the West, cream volumes are tightening, and a few processors say availability is on the quick aspect. In the meantime within the Central area, cream has grow to be extra accessible amid college milk cream spin off and softening Class II orders. Some butter makers within the area are sourcing cream from the West area and from domestically sourced suppliers. Within the East some contacts anticipate cream availability will enhance within the close to time period. In the meantime, regional butter makers are micro-fixing frozen bulk butter, and counting on contracted a great deal of cream for churning. Contacts within the Central area say butter churning is rising. Butter makers within the West report combined schedules as some say they’re working regular or decreased manufacturing schedules, whereas others have stopped churning. Demand for butter is powerful within the Central area, whereas contacts within the East say retail and meals service gross sales are regular. Within the West, demand for butter from retail and meals service purchasers is powerful to regular. Bulk butter overages vary from 2.0 to 10.0 cents over market worth.
CHEESE HIGHLIGHTS: Within the Northeast, Class I milk processors are ordering elevated, volumes lowering availability into cheese processing. Plant managers within the area recommend this, and chronic labor points, are contributing to lighter cheese manufacturing. Spot milk costs vary from at Class III to $.50 over Class within the Midwest, although some stakeholders say spot load gives have dried up in latest weeks. Some cheesemakers within the Midwest relay downtime for a day or two at vegetation to finish updates. Within the West, cheese manufacturing is regular, and cheese inventories can be found within the area. Cheese inventories are regular within the Northeast, whereas Midwest contacts report balanced inventories. Cheese sellers within the Midwest say demand in mid/late August is akin to earlier years. Within the Northeast, contacts report stronger demand for cheddar than different American-type cheeses. Meals service demand for mozzarella cheese is powerful within the area. Within the West, home demand is powerful to regular. In the meantime, stakeholders say export demand is quieter total.
FLUID MILK: Cow consolation within the Northeast has improved as a consequence of cool nights and decrease humidity. That space is an exception to the rule this week, although, as a number of the nation is experiencing intense and constant warmth and dryness. Southwestern states are nonetheless sizzling, however after a protracted stretch of triple digit temperatures, present highs within the mid-90s have introduced some aid to locals there, however these highs should not essentially transferring the milk output needle upward. Class I demand has been bolstered in most areas by faculties reopening for the yr. Cream availability, on account of cream spinoff, has elevated for Midwestern and Japanese cream finish customers. Multiples eased within the Central and East. Class III spot milk costs ranged from Class to $.50 over Class within the higher Midwest. Condensed skim availability has mirrored fluid milk, which has seasonally tightened in latest weeks. F.O.B. cream multiples are 1.36-1.45 within the East, 1.24-1.44 within the Midwest, and 1.19-1.39 within the West.
DRY PRODUCTS: Dried dairy elements, in most areas, stay underneath some sideways to bearish tones, on the entire. Costs have been regular to decrease for low/medium warmth dry milk (NDM) within the Central/ East areas, whereas they shifted decrease within the West. Worldwide demand for NDM stays gentle. Costs for dry buttermilk have been regular within the Central/East, whereas transferring decrease within the West. Dry buttermilk tones are comfortable, as demand stays considerably tepid throughout the nation. Dry entire milk costs have been unchanged, as processing foci stay on contractual wants. Dry whey costs have been regular to increased throughout all areas. Seasonal milk output limitations and shifts into excessive protein mix processing has given the whey powder markets some indications of potential buoyance. Whey protein focus 34% costs moved decrease, as demand continues to be reported as quiet. Lactose costs moved increased, as home demand is no less than barely extra energetic. Rennet casein costs have been regular, whereas acid casein costs shifted down. Export demand from Oceania for acid casein has been quieter in latest weeks.
ORGANIC DAIRY MARKET NEWS: The Agricultural Advertising Service (AMS) reported that the June 2023 U.S. sale of whole natural milk merchandise was 224 million kilos, down 4.5 p.c from the earlier yr, however up 2.0 p.c year-to-date. Natural entire milk gross sales, 112 million kilos, rose 2.9 p.c in comparison with a yr earlier whereas rising 3.0 p.c year-to-date. Lowered fats milk (2%) gross sales have been 72 million kilos, down 7.4 p.c from the earlier yr and down 4.9 p.c year-to-date. Natural flavored entire milk gross sales, 1 million kilos, decreased 66.1 p.c from the earlier yr, whereas declining 59.4 p.c year-to-date. In the meantime, the August 2023 survey of chosen retail supermarkets in 30 U.S. cities cited the retail costs of natural entire milk within the half gallon container. Costs ranged from $3.99 in a number of cities to $6.44 in St. Louis, MO. The July 2023 easy common worth of $4.86, displayed a small enhance in comparison with $4.85 final month.
NATIONAL RETAIL REPORT: Whole typical dairy adverts decreased by 7 p.c, whereas natural dairy adverts elevated by 41 p.c. Cheese was essentially the most marketed dairy commodity regardless of a 15 p.c lower in adverts for typical cheese. Typical sliced, shredded, and block cheese in 6–8-ounce packages have been closely marketed. The sliced kind had a weighted common marketed worth of $2.19, down 26 cents. The shredded kind had a weighted common marketed worth of $2.44, down 1 cent. The block kind had a weighted common marketed worth of $2.72, up 14 cents.
