Weekly international protein digest – Colorado ramps up H5N1 dairy testing, US cattle on feed report: placements lower than anticipated

26 July 2024

17 minute learn

Weekly international protein digest—7-25-24

Weekly US beef, pork export gross sales

Beef:  Web US gross sales of 13,400 MT for 2024 had been down 13 % from the earlier week and 4 % from the prior 4-week common. Will increase had been primarily for South Korea (4,400 MT, together with decreases of 300 MT), Japan (2,200 MT, together with decreases of 400 MT), China (1,800 MT, together with decreases of 100 MT), Mexico (1,200 MT, together with decreases of 100 MT), and Hong Kong (1,200 MT, together with decreases of 100 MT). Exports of 16,300 MT had been up 5 % from the earlier week and from the prior 4-week common. The locations had been primarily to Japan (4,300 MT), South Korea (3,500 MT), China (2,500 MT), Mexico (1,600 MT), and Taiwan (1,300 MT).

Pork:  Web US gross sales of 30,200 MT for 2024 had been up 28 % from the earlier week, however down 19 % from the prior 4-week common. Will increase had been primarily for Mexico (7,700 MT, together with decreases of 800 MT), South Korea (6,400 MT, together with decreases of 300 MT), Japan (4,500 MT, together with decreases of 400 MT), Colombia (3,600 MT, together with decreases of 100 MT), and China (2,100 MT, together with decreases of 100 MT). Exports of 32,900 MT had been up 3 % from the earlier week and seven % from the prior 4-week common. The locations had been primarily to Mexico (13,200 MT), Japan (5,000 MT), China (3,900 MT), South Korea (2,700 MT), and Canada (2,100 MT).

Colorado ramps up H5N1 dairy testing

Colorado started requiring dairies to check milk provides for the H5N1 virus each week, the state’s lead veterinarian advised Reuters. The state’s new mandate goals to determine extra farms that may very well be contaminated and unfold the illness to different dairies or poultry flocks. Colorado has confirmed infections in 47 dairy herds because the U.S. outbreak in dairy cows started in late March, with about 60% of its circumstances detected previously month. A USDA epidemiological “strike group” arrived in Colorado this week to evaluate how the virus could also be spreading amongst dairies.

China goals to regulate dairy, beef output as weak gross sales hit costs

China plans to implement measures to assist dairy and beef producers restrict manufacturing to forestall costs from falling additional, an ag ministry official stated. Earlier this yr, China issued laws to cut back its breeding sow inhabitants. Costs of beef and dairy, together with pork and poultry are falling in China as customers, grappling with a slowing financial system, cut back purchases. “The costs of beef and uncooked milk within the first half of the yr fell by 12.1% and 12.5%, respectively, and beef cattle and dairy cow breeders are making losses,” stated Wang Lejun, the ag ministry’s Chief Animal Husbandry Officer. “For beef and dairy cows, we wish to information farms to optimize and modify the herd construction, reasonably get rid of previous and low-yielding cows, and higher match manufacturing growth with market demand,” he stated.

USDA experiences on dairy world markets and commerce

Ongoing Financial Disaster in Argentina Impacts Dairy

The Argentine dairy {industry} is grappling with important challenges this yr caused by the nation’s financial disaster. The mixture of inflation in home inputs and authorities instituted international change controls (restrictions on capital outflows, controls on international debt funds, and so forth.) have wide-ranging impacts on milk manufacturing, export competitiveness, and home consumption, and is reshaping the {industry}’s panorama within the quick run.

Argentine dairy farmers rely closely on largely domestically produced inputs, together with feed, equipment, and gas. The elevated monetary burden has compelled many to chop manufacturing or search extra capital, with many working at a loss. Consequently, year-to-date milk manufacturing in Argentina has declined precipitously. From January by way of June 2024, Argentina milk manufacturing fell 13 % from the identical interval in 2023. In 2023, milk manufacturing totaled 11.7 million tons, however this determine is forecast to fall 7 % to 10.8 million tons. The abrupt drop in manufacturing in early 2024 led to a fast restoration in milk costs, which helps enlargement in manufacturing through the second half of the yr. The constant lower in manufacturing over the previous 5 years highlights the sector’s battle to keep up output ranges amidst rising prices and financial instability.

Conversely, the forex devaluation has made Argentine dairy merchandise extra aggressive within the international market. A weaker peso interprets to decrease costs for international patrons. Alternate charges and inflation had been so disadvantageous to home producers that it raised important uncertainty as as to whether merchants would sit on inventories or if there could be a rush to safe international forex, notably in U.S. {dollars}. Dairy export volumes elevated 10 % within the first 5 months of 2024 in comparison with the identical interval in 2023. Notably, cheese exports are forecast to rise from 85,000 tons in 2023 to 100,000 tons in 2024. Domestically, the financial state of affairs stays difficult. The rise in manufacturing prices has led to increased costs for dairy merchandise on the home market.

In 2024, milk manufacturing within the European Union (EU) stays comparatively unchanged. Enhancements in output per cow are largely offset by declines within the dairy herd. The dairy cow inhabitants has dropped under 20 million, persevering with a pattern of declining herd measurement. This drop is pushed by numerous components together with decrease milk costs and elevated manufacturing prices. These financial challenges have led to the exit of smaller, much less environment friendly farms from the market, which has diminished total milk manufacturing capability. Moreover, environmental laws and insurance policies are impacting milk manufacturing. Initiatives to cut back nitrogen emissions in nations just like the Netherlands and Eire are anticipated to end in additional reductions in herd sizes. These environmental restrictions, mixed with challenges in generational renewal—the place youthful potential farmers are disinclined to take over as a result of demanding nature and tight profitability of dairy farming—are contributing to the consolidation of the market. Consequently, bigger farms are more likely to preserve their herd sizes higher than smaller farms, which may assist regulate the discount in cow numbers.

The profitability of milk manufacturing has been declining since early 2023, with farm-gate milk costs dropping whereas manufacturing prices for inputs remaining excessive. This squeeze on margins is affecting farmers’ choices to proceed milk manufacturing, additional accelerating the decline in cow numbers. There was a brief improve in milk deliveries in early 2024, however these positive factors will not be anticipated to maintain all year long as farmers who postponed exiting the {industry} in 2023 are probably to take action in 2024. In 2024, the spring season noticed favorable climate in most elements of Europe, with heat temperatures and ample rainfall, which benefited pasture situations and inexperienced feed availability. Nonetheless, some areas like northwestern Europe skilled extreme rainfall that hindered discipline entry and grassland re-growth, significantly in nations like Eire the place pasture-based programs predominate.

New Zealand’s fluid milk manufacturing is forecast to say no by 0.7 % to 21.1 million tons in 2024. This decline is primarily attributed to the shrinking nationwide herd and the short-term results of the El Niño climate sample, which introduced each elevated rainfall and difficult dry situations at completely different instances of the yr. Moreover, the sector faces softening income and excessive prices of debt servicing, which have put strain on many dairy farmers. The macroeconomic atmosphere in New Zealand stays difficult for a lot of dairy producers. Excessive rates of interest set by the Reserve Financial institution of New Zealand (RBNZ) have elevated the price of debt servicing, comprising practically 19 % of the breakeven milk worth per kilogram of milk solids (KgMS). This monetary pressure is compounded by rising enter prices, significantly for feed and fertilizer, that are essential for sustaining excessive milk yields. Regardless of challenges for farmers, processors proceed to spend money on upgrading processing capabilities, shifting from milk powder manufacturing to extra value-added merchandise reminiscent of butter, cheese, and cream. Commerce stays a significant driver of New Zealand’s dairy {industry}, with 95 % of milk manufacturing exported in some type. The nation’s commerce agreements, significantly with China, guarantee regular demand for its dairy merchandise.

Australia’s cheese manufacturing in 2024 is projected at 435,000 tons, supported by increased milk provides and comparatively sturdy profitability. Regardless of going through rising enter prices, Australian dairy farmers have maintained important manufacturing ranges by way of technological funding and environment friendly administration practices. Cheese consumption inside Australia stays substantial, with an estimated 380,000 tons consumed domestically. Australian customers have a robust choice for domestically produced cheese. The excess manufacturing is forecast to be exported, with roughly 165,000 tons of cheese anticipated to be despatched to worldwide markets in 2024. Main export locations embrace Japan, China, and numerous Southeast Asian nations. • In 2024, EU cheese manufacturing is about to rise by practically 1 %, reaching roughly 10.5 million tons. This improve is pushed by strong home consumption and constant export demand. The first producers – Germany, France, Italy, the Netherlands, and Poland – contribute practically three quarters of the EU’s whole cheese output. Cheese manufacturing stays a key precedence for the European dairy sector because of its reliable returns and excessive market demand. EU cheese exports are projected to develop by 1 % to 1.4 million tons in 2024.

Home consumption of cheese throughout the EU is predicted to speed up, supported by financial restoration and the resurgence of the hospitality and tourism sectors. Germany, France, Italy, Poland, and Spain are the main cheese-consuming nations. Following a dip in 2022 because of diminished client buying energy, cheese consumption stabilized in 2023, however is anticipated to comply with an upward trajectory in 2024. Components reminiscent of rising incomes and the return to pre-COVID ranges of tourism and eating out are key contributors to this progress in home cheese consumption.

In 2024, New Zealand’s cheese manufacturing is projected at 375,000 tons. Current investments in processing amenities have enabled New Zealand to diversify its cheese portfolio, catering to each native and worldwide markets. This consists of enlargement into comfortable cheese varieties like brie, blue cheese and gouda. Home cheese consumption in New Zealand stays modest at round 40,000 tons, reflecting its smaller inhabitants. Consequently, the vast majority of cheese produced is destined for export markets. This yr, New Zealand is anticipated to export roughly 350,000 tons of cheese and reflective of decrease forecast manufacturing. Key locations for these exports embrace China, Japan, and Australia. • The outlook for U.S. cheese exports in 2024 is promising, with exports by way of Might already 28 % increased than the identical interval in 2023, bolstered by international financial restoration and a major worth benefit towards rivals within the first quarter of the yr.

Canada is a prime 5 vacation spot for each US beef and pork exports

Nonetheless, shipments are typically slowed by regulatory points. The current transition to the Public Well being Info System (PHIS) Export Module was meant to cut back paperwork and simplify the export course of. However Courtney Heller, U.S. Meat Export Federation (USMEF) director of export providers, says some documentation obstacles persist for U.S. exporters. Heller provides that as a result of the meals security and inspection programs within the U.S. and Canada are so related, crimson meat commerce between the 2 nations may very well be additional streamlined. USMEF is working with {industry} companions such because the Meat Institute to develop suggestions that might simplify regulatory processes and assist bolster U.S. exports to Canada.

Final yr US pork exports to Canada totaled practically 220,000 metric tons

That makes Canada the fourth largest marketplace for U.S. pork, with export worth topping $875 million. By means of Might of this yr, pork exports are barely under final yr’s tempo in quantity (85,500 MT) and regular in worth ($338 million). U.S. beef exports to Canada totaled 103,500 metric tons in 2023, rating fifth amongst U.S. export markets, with export worth additionally totaling about $875 million. By means of Might of this yr, beef exports are up 8% in worth ($353 million) regardless of a 5% decline in quantity (slightly below 40,000 metric tons).

Massachusetts’ Q3 pork legislation survives {industry} courtroom problem

A federal choose on Monday rejected an industry-backed bid to dam enforcement of a Massachusetts legislation banning the sale of pork from pigs stored in tightly confined areas, saying a federal legislation governing slaughterhouses doesn’t preempt it. U.S. District Decide William Younger in Boston rejected arguments by Missouri-based pork producer Triumph Meals and out-of-state hogs farmers that the state legislation conflicted with a federal legislation regulating slaughterhouse inspections. The pork producers argued the Federal Meat Inspection Act preempted the state’s legislation as a result of it created extra, completely different necessities on how pigs are to be dealt with than the federal legislation supplied. However Younger stated Massachusetts’ legislation does not more than ban the sale of non-compliant pork meat and doesn’t regulate how a slaughterhouse itself operates. This ruling represents a major victory for animal welfare advocates and supporters of the Massachusetts legislation. Nonetheless, it additionally highlights the continuing authorized challenges confronted by state-level animal welfare laws within the context of interstate commerce and federal laws.

US cattle on feed report: placements lower than anticipated

USDA estimated the big feedlot (1,000-plus head) stock at 11.304 million head as of July 1, up 61,000 head (0.5%) from year-ago, although 23,000 head lower than the typical pre-report estimate implied. June placements declined 6.8%, whereas marketings dropped 8.7% – each falling greater than anticipated – particularly placements. The information is comparatively impartial, although the placements quantity could appeal to some shopping for in deferred reside cattle futures.

China to probe EU pork for anti-dumping utilizing sampling technique

China has put three firms from the European Union on the heart of its anti-dumping investigation into pork merchandise from the bloc. Beijing has chosen Danish Crown A/S, Vion Boxtel BV, and Litera Meat S.L.U. — the highest three exporters of pork merchandise within the area to China — to find out if dumping has occurred and assess the harm to the home sector, the commerce ministry stated. The investigation, which started June 17, will look into pork and its by-products imported from the EU after the bloc determined to impose anti-subsidy duties on Chinese language electrical automobiles.

China’s June pork imports proceed to lag sharply from year-ago

China imported 90,000 MT of pork in June, up 12.5% from Might however 33.5% lower than final yr. By means of the primary half of 2024, China’s pork imports totaled 520,000 MT, down 45.3% from the identical interval final yr.

Weekly USDA dairy report

CME GROUP CASH MARKETS (7/19) BUTTER: Grade AA closed at $3.0750. The weekly common for Grade AA is $3.1140 (-0.0010). CHEESE: Barrels closed at $1.9125 and 40# blocks at $1.8650. The weekly common for barrels is $1.8980 (-0.0140) and blocks $1.8630 (-0.0855). NONFAT DRY MILK: Grade A closed at $1.1975. The weekly common for Grade A is $1.1795 (-0.0010). DRY WHEY: Additional grade dry whey closed at $0.5175. The weekly common for dry whey is $0.5055 (+0.0085).

BUTTER HIGHLIGHTS: Within the West, home butter demand varies from regular to lighter. For the Central area, home butter demand is barely down. Within the East, home butter demand is regular for retail and regular to lighter for meals service. Cream volumes are usually tighter all through the nation. Within the Southwest, handlers indicated fats elements in milk output are lowering. Nonetheless, some week-over-week will increase in cream availability for the Central area had been famous. Within the Northeast, roads and bridges broken by Hurricane Beryl created some transportation difficulties. Butter manufacturing schedules are blended. Bulk butter overages vary from minus 4 to 10 cents above market, throughout all areas.

CHEESE HIGHLIGHTS: Cheese manufacturing schedules range from regular to lighter all through the U.S. Contacts within the East observe cheese manufacturing varies from space to space. Bridge and highway harm sustained throughout Hurricane Beryl affected some milk deliveries, and cheese manufacturing in sure locales was quieter than in current weeks. Cheese producers within the Central area relay regular manufacturing schedules. Milk suppliers say cheesemakers are actively in search of out spot milk masses. Spot milk costs had been reported at $1-under to $1.50- over Class III. Cheese demand is regular to lighter, as some contacts say prospects are ready for a possible dip in cheese costs. Cheese availability ranges from balanced to tighter. Cheese processors within the West additionally share regular to lighter manufacturing. Milk availability is waning seasonally, however producers have shared they’re able to discover spot a great deal of milk to satisfy manufacturing wants. Cheese inventories are broadly accessible all through the area.

FLUID MILK: Milk output is trending seasonally decrease all through many of the nation. Class I demand can be in a seasonal lull, as college districts are within the midst of their summer time hiatus. Hurricane Beryl created some setbacks for milk haulers within the East area, as flooding and highway closures had been reported in Vermont and New Hampshire. Cheesemakers within the Midwest reported a slight atypical uptick in availability transferring deeper into the summer time months, however solely barely. Central Cheesemakers reported spot milk costs from $1.00-under to $1.50-over Class III. Condensed skim availability has tightened in current weeks, significantly within the East. Cream multiples, for essentially the most half, had been regular to increased, though Central area butter processors stated they acquired barely extra spot market volumes from throughout the area this week in comparison with week 28. Ice cream manufacturing continues to be considerably energetic transferring later into the height manufacturing season. Cream multiples vary from 1.30 – 1.50 within the East, 1.21 – 1.38 within the Midwest, and 1.12– 1.39 within the West.

DRY PRODUCTS: Low/medium warmth nonfat dry milk (NDM) costs had been blended this week, as they moved decrease within the Central/East areas, whereas they had been regular to increased within the West. As condensed skim availability decreases, manufacturing/availability are anticipated to proceed their seasonal downturns. Excessive warmth NDM costs had been regular within the Central and East, whereas transferring decrease within the West. Dry buttermilk costs held regular in all areas. Drying exercise is usually restricted, as butter churning charges, regardless of some slight upticks within the Central area, are transferring decrease on the entire. Dry entire milk costs had been unchanged from week 28, as inventories are famous as very tight. Dry whey costs had been regular to increased in all areas. Demand is considerably sluggish, however inventories are famous as regular to tight relying on the tip utilization aim. Model most popular volumes of dry whey are noticeably comfortable, whereas interchangeable masses are nonetheless accessible. Whey protein focus 34% costs are regular to increased, as processors proceed channeling whey solids into manufacturing of excessive[1]protein concentrates. Lactose costs had been blended. Home demand for lactose is considerably hearty, significantly for higher-mesh varieties. Acid casein costs had been regular to increased, whereas rennet casein costs had been unchanged. Spot demand for rennet casein is quieter within the European Union.

INTERNATIONAL DAIRY MARKET NEWS: WEST EUROPE: As anticipated, seasonal milk declines are happening throughout West Europe. That stated, milk manufacturing ranges are usually above that of final yr. In keeping with CLAL information made accessible to USDA, Might 2024 EU cows’ milk delivered to dairies is up in comparison with final yr. Yr-to-date EU cows’ milk delivered to dairies by way of Might 2024 is up when in comparison with January-Might 2023 EU milk manufacturing. Poor climate resulted in a weak begin to the milk manufacturing season in Eire and the UK. Milk volumes through the regular peak of spring flush had been under these of final yr. Extra just lately, enhancements in climate and grass progress charges have helped bolster milk output. First cuttings of hay are considered at good ranges, and relying on future climate patterns, hay harvest and milk output ought to match extra carefully to typical output ranges.

EAST EUROPE: Milk manufacturing throughout East Europe continues to point out sturdy output progress. The January – Might 2024 provisional milk manufacturing in Belarus is up from January – Might 2023. The European Fee experiences the Mixed Drought Indicator (CDI) for late June 2024 alerts warning drought situations for elements of East Europe, together with Poland, the Balkans, and elements of Romania and the Baltic States. Warning situations recommend that drought situations exist which can be negatively affecting crops and vegetation.

AUSTRALIA: Dairy Australia just lately launched export information displaying milk export volumes from July 2023 – Might 2024 had been down % from the identical time interval a yr earlier. April 2024 milk gross sales had been up from April 2023. Milk gross sales from the beginning of the season in July by way of April 2024 had been up in comparison with the identical time interval a yr earlier. The June 2024 Manufacturing Inputs Monitor from Dairy Australia acknowledged drier than regular climate was current throughout lots of the dairy areas throughout June, contributing to stronger demand for supplementary feed.

NEW ZEALAND: A gaggle in New Zealand, which forecasts dairy costs, decreased the forecasted milk worth for the 2024/2025 season, following GDT occasion 360. The group defined that the outcomes of GDT occasion 360 had been bearish total for milk costs. Just lately launched information from New Zealand for Might confirmed the variety of dairy cows despatched to slaughter through the month was up from Might 2023. From the beginning of 2024 by way of Might, cow slaughter numbers are up from the identical time in 2023.

SOUTH AMERICA: Contacts recommend seasonal milk upticks are but to be notable. An intensely moist fall season, which introduced flooding and rainfall to key dairy areas all through the continent, has turn into a hotter/dryer winter. One optimistic observe, in line with analysts, is that dryness is permitting for a well timed corn harvest. As operational prices have been a looming concern for dairy farmers and the dairy {industry}, on the entire, a rise in high quality forage/silage is predicted to assist stabilize some dairy farm prices within the near-term.

NATIONAL RETAIL REPORT: Standard and natural dairy adverts elevated. Apart from cream cheese, whole adverts for all reported typical commodities elevated this week in comparison with the prior week. Cheese remained within the prime spot as essentially the most marketed dairy commodity. Standard ice cream was additionally closely represented in dairy adverts. Standard ice cream adverts elevated this week. Yogurt was the third most marketed typical diary commodity and prime marketed natural dairy commodity. When it comes to advert numbers, bitter cream was extra prevalent than milk this week.