Weekly global protein digest: USDA requests info on development of H5N1 vaccine for use in cattle, China’s meat imports drop in April, Florida bans lab-grown meat

Livestock analyst Jim Wyckoff reports on global protein news
calendar icon 10 May 2024
clock icon 13 minute read

Weekly USDA export sales of US beef, pork

Beef: Net sales of 12,300 MT for 2024 were down 45 percent from the previous week and 29 percent from the prior 4-week average. Increases were primarily for Japan (4,400 MT, including decreases of 400 MT), South Korea (1,900 MT, including decreases of 300 MT), Mexico (1,700 MT, including decreases of 100 MT), Taiwan (900 MT, including decreases of 100 MT), and Canada (600 MT). Exports of 16,200 MT were up 11 percent from the previous week and 10 percent from the prior 4-week average. The destinations were primarily to South Korea (4,200 MT), Japan (3,600 MT), China (2,700 MT), Mexico (1,600 MT), and Taiwan (1,400 MT).

Pork: Net sales of 24,400 MT for 2024 were down 27 percent from the previous week and 26 percent from the prior 4-week average. Increases were primarily for China (6,900 MT), Japan (3,900 MT, including decreases of 300 MT), Canada (3,700 MT, including decreases of 600 MT), Mexico (2,600 MT, including decreases of 200 MT), and Colombia (2,100 MT, including decreases of 100 MT). Exports of 35,000 MT were down 3 percent from the previous week and 9 percent from the prior 4-week average. The destinations were primarily to Mexico (12,900 MT), South Korea (5,400 MT), Japan (5,000 MT), China (3,300 MT), and Canada (1,800 MT).

USDA requests info on development of H5N1 vaccine for use in cattle

USDA’s Animal and Plant Health Inspection Service (APHIS) issued a request for information concerning the development of a vaccine against the H5N1 virus for use in cattle. This request seeks to gather insights from manufacturers about their ability to develop, license and manufacture a vaccine that meets U.S. standards for safety and efficacy. This represents a significant step in addressing the spread of H5N1, particularly concerning its potential impact on cattle. It also underscores ongoing efforts to broaden preventive measures against the virus beyond the traditional focus on poultry, acknowledging the complex interconnections within animal health and public safety.

The initiative represents a significant step in addressing the spread of HPAI, particularly concerning its potential impact on cattle, an area currently underexplored. Interested manufacturers are encouraged to provide information on their capabilities to contribute to this public health effort. The full details and the official notice can be accessed through this link. USDA said this move by APHIS underscores the ongoing efforts to broaden preventive measures against HPAI beyond the traditional focus on poultry, acknowledging the complex interconnections within animal health and public safety.

Just one human is infected by bird flu in the US, but more cases are likely. The U.S. is facing a concerning outbreak of avian flu (H5N1) that has begun to spread among mammals, including cows, skunks, mountain lions, and red foxes. Despite this, only one human case has been officially reported, likely due to the limited testing being conducted, according to a Bloomberg assessment (link). State governments and farm owners have not invited the Centers for Disease Control and Prevention (CDC) to perform necessary on-the-ground surveillance, which hampers the federal response to what could be a significant threat.

The reluctance of dairy workers to undergo testing is a major barrier in tracking the virus’s spread, the article notes. Many workers, often immigrants, fear losing their jobs or distrust government officials, making them hesitant to participate in testing. Additionally, private farms are wary of the economic repercussions of detecting the virus within their herds.

CDC Director Mandy Cohen emphasized the agency's readiness to deploy testing teams, but the lack of cooperation from states and farms is a significant obstacle. The virus’s presence in 1 in 5 retail milk samples, albeit neutralized by pasteurization, indicates widespread infection among cattle. This situation, combined with underfunding and a lack of comprehensive surveillance, leaves the U.S. unprepared for a potential pandemic scenario, reminiscent of early Covid-19 challenges. Public health experts are concerned that without a change in testing and surveillance strategies, the country might miss the opportunity to control this outbreak effectively.

China’s meat imports drop in April

China imported 544,000 MT of meat in April, down 5.9% from the previous month and 8.5% less than last year. Through the first four months of this year, China imported 2.22 MMT of meat, down 12.6% from the same period last year.

USDA says neighboring farms do not need to conduct tests for the H5N1 bird flu virus if it is detected in a dairy herd

This directive comes in the context of a new regulation requiring lactating dairy cows to be tested for H5N1 before being shipped across state lines, as part of measures implemented by the USDA's Animal and Plant Health Inspection Service.

Dairy and beef cattle markets in the US experience varied impacts due to the spread of H5N1

A Southern Ag Today item notes that recent measures, including the USDA's mandate for H5N1 testing of lactating dairy cows before interstate transport and the FDA's discovery of H5N1 remnants in commercial milk supplies, have led to heightened concern, though officials assert that milk and beef products remain safe.

In the dairy sector, despite these developments, market reactions have been relatively muted, the report notes. Class III milk futures did not show significant volatility even with these reports, with only a moderate increase observed around April 25, possibly linked to anticipated reductions in milk production. Analysts say this stability may be due to balancing factors: a potential drop in supply being offset by reduced consumer demand amid safety concerns, leading to stable prices but decreased production and market presence.

Conversely, the beef market has seen more pronounced fluctuations. News of a human H5N1 case in March led to significant drops in both feeder and live cattle prices, reflecting immediate consumer anxiety. Nonetheless, prices rebounded on April 25, suggesting that initial fears might be transient, the report adds. The impact of these concerns was also evident in international reactions, such as Colombia's ban on U.S. beef imports, which could further influence market sentiments and prices.

Bottom line, according to Southern Ag Today: Overall, while current data shows some stabilization, the ongoing situation with H5N1 in dairy herds and its implications for dairy and beef markets remain dynamic and uncertain. Close monitoring is necessary as new information and market data become available, which will better clarify the longer-term impacts on these industries.

Tyson Foods exceeded Wall Street's expectations for second-quarter profit

Tyson benefited from the closure of some chicken processing plants to cut costs. The company's shares rose by 3.5% in premarket trading, continuing a year-to-date increase of over 15%. Tyson has shut down six U.S. chicken plants since last year, alongside layoffs and plans to close a pork plant, aimed at cost reduction. This strategy led to adjusted earnings of 62 cents per share, surpassing analysts' average estimate of 39 cents. However, Tyson faces challenges such as slowing demand due to price-conscious consumers seeking more affordable options amidst high food prices and borrowing costs. Second-quarter net sales dipped by 0.5% to $13.07 billion, slightly below estimates. Chicken segment sales declined by 8.3% despite a 2.1% price drop, with volumes falling by 6.1%. Conversely, beef segment volumes rose by 2.8%, marking the first increase in five quarters, while the pork segment also saw a volume increase of 2.9%. Tyson anticipates flat total sales for fiscal 2024 compared to the previous year's $52.88 billion.

Canada toughens import requirements on U.S. breeding cattle due to H5N1

The Canadian Food Inspection Agency (CFIA) toughened import requirements on U.S. breeding cattle due to the H5N1 virus, the agency said late Friday. Import measures for cattle from the U.S. will now include negative H5N1 test results for lactating dairy cattle, testing of milk at the retail level to look for viral fragments of the virus and voluntary testing of cows that do not have clinical signs of the virus, CFIA said.

Florida bans lab-grown meat

The emerging conflict between traditional meat producers and the cultivated meat industry in the United States, particularly exemplified by Florida's recent legislation banning lab-grown meat, highlights a significant shift in the agricultural landscape. This move by Florida, driven by GOP Governor Ron DeSantis citing the potential threat to the state's beef cattle industry — a sector generating over $900 million annually — underscores the economic stakes involved. Florida's position as the ninth-largest beef cattle producer in the U.S. further amplifies these concerns. “Florida is fighting back against the global elite’s plan to force the world to eat meat grown in a petri dish or bugs to achieve their authoritarian goals,” DeSantis said. “We will save our beef.” At the bill’s signing, Florida Agriculture Commissioner Wilton Simpson said the ban was meant to protect “the integrity of American agriculture.” The legislation joins similar efforts from three other states — Alabama, Arizona and Tennessee — that have also looked to stop the sale of lab-grown meat.

The reaction to this legislation is mixed within the meat industry, reflecting broader sectoral divisions. While traditional meat producers, represented by entities like the National Cattlemen’s Beef Association, have actively lobbied for measures that restrict the labeling and sale of lab-grown meats, larger meat companies and suppliers under the North American Meat Institute have opposed such bans. These larger corporations, including industry giants like Tyson, Perdue, Unilever, Nestlé, and Cargill, cite the potential of alternative proteins and have either invested in related startups or developed their own research divisions, signaling a strategic pivot towards embracing innovation and consumer choice in the face of shifting market demands and sustainability pressures.

The conflict not only poses challenges for regulatory frameworks but also for the cultivated meat industry, which, despite receiving USDA approval for products like cultivated chicken from companies like Upside and Good Meat, still faces significant market entry barriers in the U.S.

Cargill Meat Solutions issued a recall for approximately 16,243 pounds of ground beef that might be contaminated with E.coli

This recall, announced by USDA's Food Safety and Inspection Service (FSIS), affects raw ground beef items produced on April 26 and 27, which were distributed to Walmart stores nationwide. The recall was initiated after Cargill discovered that a product previously set aside due to safety concerns had been mistakenly used in the production of their ground beef. So far, there have been no confirmed reports of illnesses or adverse reactions from consuming these products.

Weekly USDA dairy market report

DAIRY MARKET NEWS CUSTOMER INQUIRY: Dairy Market News is developing a strategic plan to guide the organization for the next three to five years. As a customer of Dairy Market News, please provide your input, ideas, and feedback to support this strategic planning process. Please provide your responses by accessing this link: https://www.surveymonkey.com/r... CME GROUP CASH MARKETS (5/3) BUTTER: Grade AA closed at $3.0750. The weekly average for Grade AA is $3.0135 (+0.0385). CHEESE: Barrels closed at $1.8800 and 40# blocks at $1.7900. The weekly average for barrels is $1.8485 (+0.0780) and blocks $1.7685 (+0.0185). NONFAT DRY MILK: Grade A closed at $1.1300. The weekly average for Grade A is $1.1205 (+0.0075). DRY WHEY: Extra grade dry whey closed at $0.3950. The weekly average for dry whey is $0.3820 (+0.0010).

BUTTER HIGHLIGHTS: Domestic butter demand is generally steady from retail and food service sectors. However, for unsalted butter loads, demand is stronger. Cream volumes are comfortable across the nation and able to accommodate manufacturing needs. In the West region, butter production is strong. In the Central and East regions, butter production is steady. Some butter makers have tight availability with unsalted butter loads for spot buyers. In the cold storage report from last week, March 2024 butter stocks were up 6 percent from February 2024 and up 2 percent from March 2023. Bulk butter overages range from 2 to 10 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheesemakers continue to relay steady to stronger production schedules across all regions. The March Cold Storage report released last week revealed that March 2024 natural cheese stocks were up slightly from February 2024, but down from March 2023. In the Northeast, cheese inventories are said to be comfortable. Retail cheese demand is steady in the region. Cheese manufacturers in the Central region say demand is strengthening. Some processors shared having to turn away customers. Some contacts shared requests for cheese volumes beyond what a customer has already contracted may not be able to be accommodated. Milk availability has tightened in the region. In the West, cheese manufacturers share strong production schedules. Milk volumes are available for Class III processors at the moment, but contacts indicate milk availability may tighten in the upcoming weeks. Cheese inventories are comfortable. Domestic cheese demand is said to be stronger, while international demand is steady.

FLUID MILK: Although Florida and Southeast milk production is flat, milk production in the East region continues to trend steady to stronger overall. In the Midwest, weekly upticks in farm level milk output are reported. Milk production in the West region is mixed. Handlers in the Pacific Northwest convey weaker milk production, and handlers in the mountain states report steady to strengthening milk production this week. Farm level milk output is steady elsewhere in the West region. Spot milk sales are reported at $2- to $1-under Class III for the Midwest and slightly below flat blend prices for the West. Class I, III, and IV, demands are steady. Class II demands are stronger in some parts of the country. Demand for condensed skim milk is steady, and availability has loosened in recent weeks. Cream multiples for all Classes are 1.08-1.25 in the East, 1.10-1.26 in the Midwest, and 1.00-1.23 in the West.

DRY PRODUCTS: In all regions, low/medium heat nonfat dry milk (NDM) prices moved lower on the top end of the range and were unchanged for the bottom end of the range. Domestic demand is somewhat weaker compared to recent weeks. High heat NDM prices moved lower in all regions. High heat NDM production schedules remain seasonally lighter. Dry buttermilk prices moved higher in all regions, aside from holding steady for the bottom end of the Central and East range. Mixed movement in demand is reported. Dry whole milk prices are unchanged. Contacts share drying activity is limited outside of contractual fulfillment. Dry whey prices moved lower in the West region and held steady in other regions. There have been reported purchases of centrally sourced whey moving westward. Whey protein concentrate (WPC) 34% had a downward price movement for the bottom end of the range. Contacts report light demand. Lactose also had a downward price movement for the bottom end of the range. Domestic demand is steady. Acid casein prices moved higher, while rennet casein prices were unchanged. For acid casein, declining production and steady demand have caused spot inventories to tighten somewhat in recent weeks.

ORGANIC DAIRY MARKET NEWS: Total organic retail dairy ads declined during by 7 percent during the week 17 retail ad survey, then declined by 38 percent during the week 18 survey. The top two most advertised organic dairy commodities, milk and yogurt, were the same during this and last week's survey despite the number of ads declining for both. Cheese, ice cream, and sour cream were the only organic commodities to appear in more ads than last week and were the third through fifth most advertised organic dairy products. Organic flavored milk did not appear in this week's survey, but was present in the week 17 retail survey. Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During March 2024, organic whole milk utilization totaled 19.15 million pounds, down from 19.18 million pounds the previous year. The butterfat content, 3.29 percent, is up from 3.27 a year ago. The utilization of organic reduced fat milk, 15.67 million pounds, decreased from 18.19 million pounds a year ago. The butterfat content, 1.49 percent, is up from 1.42 percent the previous year.

US NATIONAL RETAIL REPORT: Total conventional dairy advertisements increased by 7 percent, while total organic dairy ads decreased by 38 percent. Conventional ice cream in 48–64-ounce containers was the most advertised dairy product, with a weighted average advertised price of $3.49, down from $4.00 the week prior. Conventional butter in one-pound packages had a weighted average advertised price of $4.00, down from $4.29 the week prior.

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