Weekly global protein digest: HPAI in US, Australian beef & pork supply rising, beef rice created in S. Korea

Livestock analyst Jim Wyckoff reports on protein news from around the globe
calendar icon 22 March 2024
clock icon 14 minute read

Weekly USDA US beef, pork export sales

Beef: Net US sales of 11,000 MT for 2024--a marketing-year low--were down 2 percent from the previous week and 12 percent from the prior 4-week average. Increases were primarily for South Korea (4,300 MT, including decreases of 400 MT), China (2,100 MT, including decreases of 200 MT), Japan (2,000 MT, including decreases of 200 MT), Taiwan (700 MT, including decreases of 100 MT), and Mexico (400 MT, including decreases of 100 MT). Exports of 14,400 MT were down 10 percent from the previous week and 9 percent from the prior 4-week average. The destinations were primarily to South Korea (3,900 MT), Japan (3,700 MT), China (2,700 MT), Mexico (1,500 MT), and Taiwan (900 MT).

Pork: Net US sales of 33,800 MT for 2024 were up 36 percent from the previous week and 10 percent from the prior 4-week average. Increases were primarily for Mexico (9,200 MT, including decreases of 500 MT), Canada (8,900 MT, including decreases of 600 MT), Japan (5,500 MT, including decreases of 400 MT), South Korea (1,900 MT, including decreases of 700 MT), and Vietnam (1,600 MT). Exports of 32,100 MT were down 7 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to Mexico (11,200 MT), South Korea (5,000 MT), Japan (4,700 MT), China (3,000 MT), and Canada (1,900 MT).

USDA report on Australian livestock sector

Australian beef supply is forecast to grow after reaching the end of the herd rebuild period. This follows a multi-year drought from 2017 to 2019 which resulted in a large decline in the national cattle herd. The marked slowdown in the growth of the national herd is expected to be driven by a higher female slaughter in 2024, particularly with a young breeder age profile reducing breeder replacement rates in the short term. The increased supply of cattle for slaughter in 2024 is forecast to boost live cattle and beef exports. Live export volumes are set for a 36 percent boost in 2024, albeit from a modest level in 2023.

With a greater supply of livestock, after reaching the end of the herd rebuild phase, along with moderate live export cattle prices, live cattle exports are set for a big boost in 2024. With the growth in the supply of beef cattle for 2024, beef exports are expected to reach the fourth highest on record. The three more considerable past export results are associated with cattle liquidation due to drought, and as such, the 2024 forecast, if realized, would be a substantial milestone for the Australian beef industry. The boost in beef exports correlates with the anticipated decline in beef production in the United States as the industry begins to enter its herd rebuild phase in 2024. The expected rise in Australian beef exports supports a likely rise in demand for beef imports by the United States, and creates an opportunity to regain the market share it lost in recent years during the herd rebuild to its key markets, China, Japan, and South Korea.

The Australian pork industry is forecast to continue its momentum of rising production in 2024. The prospect of softening feed grain prices during 2024, along with firm pork prices, is anticipated to encourage a further production boost. Much of the increased production is forecast to boost domestic consumption, while imports and exports are expected to remain relatively flat in 2024. The living cost pressures experienced in Australia over recent years show signs of moderating after wage growth matched a declining inflation rate at the end of 2023. With this, the per capita consumption of pork is anticipated to remain stable, and the growth in overall consumption is driven by the rising Australian population

US cash cattle prices nearing record high

Cash cattle averaged $187.47 last week, up $2.35 from the previous week and the second highest ever behind $188.75 for the week ended June 9, 2023. While packers purchased a strong 83,000 head last week, including 16,000 head “with time,” most cash sources expect steady/firmer prices again this week. But with USDA’s Cattle on Feed Report out Friday afternoon, cash negotiations will be slow to develop and active trade isn’t likely until late in the week.

USDA: Spain’s food processing industry report

In 2023, Spain imported $2.2 billion worth of agricultural, seafood and forest products from the United States, up 3 percent compared to the previous year. Even though inflation rates declined in 2023 as compared to the record highs registered in 2022, they remained higher compared to pre-pandemic levels. The high energy cost of raw materials and labor, as well as the effects of the drought, have increased the inflationary situation with repercussions for the productivity of companies and their margins, as well as for household consumption. Despite the economic and political uncertainties, Spain’s food and beverage sector continues to show a constant and positive performance. With one of the most competitive food processing industries in Europe, Spain’s demand for ingredients continues to increase, as well as its demand for distilled spirits, beef and beef products, seafood, pulses, and tree nuts.

China’s pork imports slump to start 2024

China imported 160,000 MT of pork during the first two months of this year, down 56.7% from the same period last year. The sharp drop in imports comes as China’s pork production reached the highest level since 2014 last year.

‘Beef rice’ the next challenge for beef

South Korean researchers have grown beef cells in rice grains in what they say is a major step towards achieving a sustainable, affordable and environmentally friendly source of protein that could replace farmed cattle for meat. “Beef rice” uses grain particles as the base for cultivating animal muscle and fat cells. In the research, rice grains were treated with enzymes to create an optimal environment for cell growth, then infused with bovine cells that are cultivated to achieve the final hybrid product, which resembles a pinkish grain of rice.

Recovery continues for US egg layer flocks affected by HPAI

The recovery from highly pathogenic avian influenza (HPAI) in egg layer flocks is progressing as two major commercial egg sector mega-flock farms were released from quarantine this week. These farms, located in Hardin County, Ohio (2.6 million head), and Merced County, California (1.4 million head), were among the last remaining under quarantine. Currently, only one small commercial egg layer operation in Dallas County, Missouri (20,000 head), remains under quarantine. In total, the HPAI outbreak that began in the fall of 2023 affected flocks totaling 12.9 million birds, along with an additional 2.8 million egg layer pullets.

USDA Livestock, Dairy, and Poultry Outlook: March 2024

Anticipated percent changes in 2024 red meat, poultry, and dairy exports compared with 2023 U.S. export forecasts for red meat, poultry, and dairy for 2024 compared to actual export data from 2023 are presented below in a percent-change format.

In 2024, beef exports are expected to be about 8.3 percent lower than those of 2023 due to lower 2024 beef production from tightening cattle supplies, as well as from tougher global competition from such beef exporting countries as Australia. Pork exports are forecast to increase almost 4.6 percent over 2023 due to higher domestic production and less global competition from the European Union. Broiler exports in 2024 are expected to decline about 1.4 percent compared with last year, due to higher domestic prices and weak demand from China. Turkey is expected to be competitively priced in 2024, with exports forecast to be up 6.4 percent compared with 2023. Compared with 2023, dairy exports on a skim-solids milk-equivalent basis should increase slightly this year—about 0.2 percent. Relatively strong domestic demand for dairy products and limited growth in milk production will likely limit export growth.


Beef/Cattle: Based on slaughter data through early March 2024, the projection for cow slaughter is raised in the first half of the year and fed cattle marketings are shifted out of the first quarter and into the outlying quarters at a more rapid pace. As a result, the forecast is raised by 140 million pounds to 26.325 billion pounds. Cattle prices are raised on firm demand and recent price data. The forecast for beef imports in the first quarter is raised 50 million pounds to 1.200 billion pounds. Projections for beef exports are unchanged from last month. 

Dairy: The forecasts for dairy herd size, milk per cow, and total milk production in 2024 have been lowered relative to the last month’s forecast to 9.335 million head, 24,345 pounds, and 227.3 billion pounds, respectively. With expectations of firm domestic demand and based on recent trade data, the 2024 dairy import forecasts have been revised upward, while U.S. dairy export forecasts have been revised downward. The 2024 average price forecasts for butter and Cheddar cheese have been revised upward, while the price forecasts for dry whey and nonfat dry milk have been revised downward. The 2024 forecast for the all-milk price has been increased to $21.25 per hundredweight, $0.30 higher than last month’s forecast.

Pork/Hogs: The first-quarter commercial pork production is raised 30 million pounds to 7.2 billion pounds on higher-than-expected February production. Total 2024 commercial pork production is expected to be 27.9 billion pounds, up 2.2 percent from a year ago. Live equivalent prices of 51-52 percent lean hogs are forecast to average about $61 per cwt, 3.7 percent above prices in 2023. Pork exports for 2024 are raised 50 million pounds on strong demand from major importing countries and weakening competitiveness of EU pork due to lower production and higher prices. Total 2024 pork exports are expected to be 7.1 billion pounds, 4.6 percent above year-ago shipments.

Poultry/Eggs: This month, projected broiler production for 2024 is increased on widening margins between feed costs and wholesale prices. Projected broiler prices are unchanged, but exports are adjusted down on a more competitive international market. Egg production is adjusted down in the first quarter of 2024 on a smaller laying flock. Egg prices are adjusted down on recent data, and projected imports and exports for eggs and egg products are unchanged from last month. Projected turkey production is adjusted down in the first half of 2024 on recent placement data, and projected exports are adjusted up slightly on recent trade data. Turkey prices are adjusted up in the first quarter on recent price data.

Weekly USDA dairy report

CME GROUP CASH MARKETS (3/15) BUTTER: Grade AA closed at $2.8225 The weekly average for Grade AA is $2.8290 (+$0.0175). CHEESE: Barrels closed at $1.4425 and 40# blocks at $1.4700. The weekly average for barrels is $1.4370, (-$0.1490) and blocks, $1.4495 (-$0.0425). NONFAT DRY MILK: Grade A closed at $1.1625. The weekly average for Grade A is $1.1650 (-$0.0020). DRY WHEY: Extra grade dry whey closed at $0.4450. The weekly average for dry whey is $0.4300 (+$0.0160).

BUTTER HIGHLIGHTS: Retail demand is strong to steady across the country. However, demand to secure loads for upcoming spring holidays vary. For the West, contacts note earlier spring holidays are encouraging more consistent Q1 activity. For the Central, contacts note customer interest has been slower to pick up ahead of the spring holiday season. Some stakeholders say food service is weakening in the West region. Some distributors indicate buying interest is stronger from Canadian purchasers. Cream remains readily available for most of the nation. Butter makers are running strong to steady production schedules. However, tight unsalted spot load availability through Q2 is noted by some manufacturers. Bulk butter overages range from 3 to 12 cents above market, across all regions.

CHEESE HIGHLIGHTS: Farm level milk production continues to grow in the East region. Contacts share Class III spot milk demand is growing as spring holidays inch closer. Contacts share cheese inventories are ample. Barrel demand has dropped, and the block/barrel inversion on industry cash exchanges resolved as a result. Retail demand is steady to stronger. Demand for cheese in the Central region is growing. Contacts suggest increased demand is due to both bearish cheese prices as well as seasonal holiday demand. Milk availability is growing, and cheese production schedules are steady. Spot milk prices range from $3.50-under to $.50-over Class III. Cheese inventories are noted to be generally available. Retail demand in the west is noted to be weaker to trending flat. Class III milk is readily available for cheesemakers in the region. Processors are running steady production schedules, and inventories are noted to be ample.

FLUID MILK: Throughout much of the country, milk production is strong or strengthening. In the South Central portion of the Midwest, contacts notes milk production has been under pressure due to air quality concerns. Educational institutions preparing for spring break have contributed to lighter Class I demand to varying degress in each region. Contacts in the Mid- Atlantic and Southeast report strong demand for Class II milk as spring draws near. Contacts in the Midwest relayed spot milk trading at similar prices to last week, with prices generally ranging from $3.50-under to $0.50-over Class, but some have relayed offers as low as $6 under Class III. Condensed skim milk is becoming more available in the East and West, and supplies are ample in the Midwest. Cream volumes are available in all three regions. Cream multiple ranges for all Classes are: 1.05 – 1.27 in the East, 1.14 – 1.27 in the Midwest, and 1.00 – 1.21 in the West.

DRY PRODUCTS: Prices for low/medium heat nonfat dry milk (NDM) moved higher at the bottom of the range in the Central and East regions, while the range contracted in the West. Contacts in the Central and East regions note increased interest from purchases in Mexico, but say those demands are being met by processors in the West. High heat NDM prices moved lower in the West, as spot inventories remain available for purchasing. Dry buttermilk prices held steady in the Central and East regions but moved lower at the top of the range in the West. Dry buttermilk demand is moderate in the Central and East regions and is moderate to light in the West. Dry whole milk price moved higher across the range this week, amid steady demand, tightening inventories, and limited production. Prices for dry whey held steady in the West, declined in the East, and narrowed in the Central region this week. Contacts in the East report softening demand and growing spot inventories. Animal feed whey prices have held steady this week, as contacts have reported slower markets than edible whey in recent weeks. Prices for whey protein concentrate 34% held steady this week. Contacts note demand is softening but say inventories remain somewhat tight. The price range for lactose shifted higher this week, amid an uptick in export demand. Acid and rennet casein prices were unchanged this week.


WESTERN EUROPEAN OVERVIEW: Western European milk production has, in general, continued to trend seasonally upwards. However, less-than[1]favorable weather conditions have slowed the increase in some countries. Industry analysts expect European milk production to be at or slightly below previous year production levels for the year of 2024. Without considerable growth expected for European milk production, nor significant expansion of dairy market demand, market observers expect some stability in milk pay prices at least for the early part of the year.

EASTERN EUROPEAN OVERVIEW: As Eastern European milk production seasonally increases, market analysts are studying the longer-term health of the dairy industry in some countries. With greater milk availability, Polish milk prices ranged between 41 to 52 euros per 100kg in 2023. The analysts are concerned about the potential for increased production costs for dairy manufacturers as costs for energy, labor, and logistics remain high.

OCEANIA: AUSTRALIA: The Food and Agricultural Organization (FAO) of the United Nations released the February Dairy Price Index which was 120.0 points, up 1.1 percent from January. This is down 13.4 percent from February 2023 Dairy Australia recently released the Situation and Outlook report for March 2024. In the report the organization stated they are now forecasting growth in Australian milk production during the 2023/2024 season, compared to the prior season. January export and import data from Australia were recently released, illustrating a 17.1 percent increase in export dairy volumes during the month, compared to January 2023.

NEW ZEALAND: At GDT event 351 the overall index saw the largest drop since August of 2023, with milk powders leading the decline in downward momentum during the event. A group in New Zealand which forecasts dairy prices lowered the forecasted milk price following GDT event 351. This group cited the decline in milk powder prices during the most recent GDT event as contributing to the decreased forecast in prices. The New Zealand infant formula sector is looking for new markets, as their main export market, China, is increasing domestic production of infant formula.

SOUTH AMERICA: Milk production and milk output expectations have reportedly taken a bullish turn in the past few weeks, even more bullish in the past ten days. Weather has been cooperative to dairy farmers in Uruguay, Argentina and Brazil, according to contacts in those three countries. Commodity markets have quieted some in the region. Brazil, the region's largest importer, has slowed its intakes of dairy commodities from neighboring partners, according to traders in those countries.

NATIONAL RETAIL REPORT: Conventional dairy ads increased 7 percent, and organic dairy ads decreased 62 percent this week. Cheese finished ahead of ice cream as the most advertised dairy commodity. Conventional 6-8 ounce packages of shredded, block, and sliced cheese have weighted average advertised prices of $2.41, $2.45, and $2.51, respectively. Half gallon containers of conventional milk had a weighted average advertised price of $1.78. Half gallon containers of organic milk had a weighted average advertised price of $4.92. This represents an organic premium of $3.14.

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