Weekly global protein digest: avian influenza spreads, China's Covid policy threatens ag, food supply

calendar icon 8 April 2022
clock icon 9 minute read

Avian influenza continues to spread in the US, threatening chicken exports

A deadly strain of bird flu that’s been raising egg prices ahead of Easter was discovered in five new U.S. states Wednesday, and the virus increasingly is threatening American poultry exports. Highly pathogenic avian influenza (HPAI) was discovered at a commercial poultry farm in Johnston County, North Carolina, and in backyard flocks in Massachusetts, North Dakota, Ohio and Wyoming, USDA said. Since mid-January, it’s been found in 23 states in flocks totaling nearly 17 million birds. Countries have been temporarily banning imports from U.S. states where bird flu is present as a result, according to USDA. Top buyers such as Mexico, China and Cuba could bring in less poultry following the discovery in North Carolina, a major producer of chicken and turkeys, said Jim Sumner, president of the USA Poultry & Egg Export Council. Bird flu will also make eggs relatively scarce for the Easter holiday, with production still below levels seen prior to the Covid-19 pandemic. Under Organization for Animal Health (OIE), member countries are called on to not impose bans on international trade of poultry commodities in response to notifications in non-poultry or backyard flocks. However, some have opted to make such restrictions.

USDA’s Animal and Plant Health Inspection Service (APHIS) has relaunched their site which tracks highly pathogenic avian influenza (HPAI) cases. APHIS said the new page uses the same data previously made available, “but in a more visual and easy-to-navigate format.” The 118 flocks in 24 states now affected include 72 commercial flocks and 46 backyard flocks totaling 22,851,071 birds. The new data also includes an entry for when locations with cases have been released from the control area and movement control restrictions. The 10-kilometer control area and movement control restrictions are in place until at least 14 days have elapsed since the initial virus elimination of the last infected premises and negative results of all surveillance activities. New cases in commercial poultry operations April 3 confirmations in North Dakota (86,000 commercial turkey meat birds in Dickey County).

China’s zero-Covid policy risks causing agricultural crisis and food shortages

China’s strict Covid lockdowns are exacerbating serious shortages of fertilizer, labor and seeds, just as many of the country’s biggest agricultural provinces prepare for their crucial spring planting season, reports the Financial Times. According to official data, as many as a third of farmers in northeastern Jilin, Liaoning and Heilongjiang provinces have insufficient agricultural inputs after authorities sealed off villages to fight the pandemic. The three provinces account for more than 20% of China’s grain production. According to the Jilin provincial government, about one-third of farmers did not have enough fertilizer at the end of March — only about three weeks before they were supposed to begin planting. Farmers and factory managers have blamed the disruption on China’s uncompromising zero-Covid policy, under which authorities have adopted tough controls ranging from traffic bans to local business shutdowns. An executive at Genliduo, a leading fertilizer producer in Hebei province, said his firm was having “lots of difficulty” shipping to customers and securing raw materials. The executive added that the problem was industry-wide and many smaller producers had suspended operations.

US pork sales post solid gains; beef slips again

USDA Thursday reported US beef net sales of 14,000 MT for 2022 were down 39 percent from the previous week and 43 percent from the prior 4-week average. Increases were primarily for Japan (6,500 MT, including decreases of 400 MT), South Korea (3,900 MT, including decreases of 800 MT), Mexico (800 MT), Taiwan (700 MT, including decreases of 100 MT), and Hong Kong (500 MT). Exports of 19,300 MT were down 5 percent from the previous week and 18 percent from the prior 4-week average. The destinations were primarily to Japan (5,400 MT), South Korea (5,400 MT), China (3,400 MT), Taiwan (1,500 MT), and Mexico (900 MT).

US pork net sales of 41,200 MT for 2022 were up 49 percent from the previous week and 44 percent from the prior 4-week average. Increases primarily for Mexico (13,200 MT, including decreases of 300 MT), China (13,000 MT, including decreases of 400 MT), Japan (5,100 MT, including decreases of 600 MT), Colombia (2,300 MT), and South Korea (2,300 MT, including decreases of 1,000 MT), were offset by reductions for Chile (100 MT). Exports of 29,000 MT were down 5 percent from the previous week, but up 2 percent from the prior 4-week average. The destinations were primarily to Mexico (13,500 MT), Japan (3,800 MT), China (3,600 MT), South Korea (2,300 MT), and Canada (1,400 MT).

USDA grants funds for meatpacking industry study

A professor at the University of Nebraska-Lincoln (UNL) received funding from USDA to study various factors that have affected the meat supply chain since the Covid-19 pandemic began. Azzeddine Azzam at UNL received the USDA funding via the National Institute of Food and Agriculture to study industry conduct during the Covid-19 plant shutdowns and evaluate the economic developments from expanding local meat processing through the start of small packing operations.

“When we add more regional or local capacity to the industry, either through opening new plants or expanding the capacity of existing plants, that is going to restructure the industry,” Azzam said. “The questions that I will address are: Will the restructuring make the industry more resilient to capacity disruptions in the event of another pandemic? What are the short-term and long-term consequences for the cattle feeding industry?”

U.S. pork producers to press lawmakers on public policies

Preparing for and preventing foreign animal diseases, addressing an agricultural labor shortage, and increasing pork exports are the top public policy issues pork producers will lobby their congressional lawmakers on over the next two days. During the spring Capitol Hill fly-in of the National Pork Producers Council (NPPC), nearly 100 producers from across the country are expected to participate — in person for the first time in two years — in NPPC’s Legislative Action Conference.

Producers will urge lawmakers to support additional funding for foreign animal disease prevention and preparedness efforts, particularly around African swine fever (ASF). Last July, ASF was detected in the Western Hemisphere for the first time in more than 40 years. NPPC is requesting funding for fiscal 2023 for additional U.S. Customs and Border Protection agricultural inspectors; for the National Animal Health Laboratory Network, which provides disease surveillance and diagnostic support in cases of large-scale animal disease outbreaks; and for additional staff for the USDA Animal and Plant Health Inspection Service’s Veterinary Services.

To address an ongoing labor shortage, producers will ask Senate and House members to expand the H-2A visa program to year-round agricultural workers, including packing plant employees. Currently, the visa only allows for temporary, seasonal farm laborers. The pork industry also supports providing a pathway to legal status for foreign-born agricultural workers already in the United States.

Pork producers also will lobby lawmakers on the importance of trade to the industry, urging the Biden administration to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The 11-country CPTPP has almost 500 million consumers and $13.5 trillion of GDP. The United States was part of a previous agreement, the Trans-Pacific Partnership (TPP), but President Trump withdrew from the TPP before it became effective. Producers also will request that the administration negotiate a more ambitious Indo-Pacific Economic Framework deal, one that includes agriculture and addresses nontariff barriers to U.S. products, including pork.

Canada beef herd contraction to continue

USDA reports the ongoing contraction of the Canadian cattle herd is expected to continue in 2022. Canadian live cattle exports are forecast to decline on a smaller calf crop. High feed costs and limited availability will see live exports outpace 2021 through the first half of 2022. Imports of US feeder cattle will decline in 2022 following five years of record imports. Feed availability in Western Canada and competition for feeder animals due to contraction in the US cattle herd will drive this trend. Following significant processing disruptions due to labor issues in 2021, the Canadian swine sector will see slaughter levels recover somewhat in 2022. However, closure of the slaughter line at a Quebec facility will result in increased exports to the United States as market ready hogs in Ontario and Quebec are displaced. Disease impacts will see a slightly smaller pig crop in 2022 amidst higher losses. The United States will remain the top trade partner for both imports and exports of beef and pork.

USDA formally publishes final rule of origins of livestock relative to organic dairy

On April 5, USDA published in the Federal Register a final rule on the origins of livestock under the National Organic Program relative to dairy animals. USDA said the action is based on public input to a proposed rule the agency previously released. Under the final rule, “organic milk and milk products must be from animals that have been under continuous organic management from the last third of gestation onward, with an exception for newly certified organic livestock operations.”

The rule becomes effective June 6, 2022, and all certified organic operations have to comply with its provisions by April 5, 2023.

Upshot: USDA acted via the final rule to address what it said were “inconsistencies” in how the transition of animals from conventional dairy production to organic production was being handled.

Restaurant groups pushing for aid extension

The US congress should pass an extension of the Restaurant Revitalization Fund (RRF) this week, according to the National Restaurant Association (NRA). The House may consider legislation this week that would replenish the fund designed to help restaurants slammed by Covid-19. Some $28 billion of economic relief was provided to more than 101,000 restaurants but another 177,000 establishments have not been able to receive any funding.

USDA formally launches ELRP effort

USDA on this week published a notice of funding availability on the Emergency Livestock Relief Program (ELRP) in the Federal Register, formally launching the effort which will automatically generate payments to livestock producers who have faced increased supplemental feed costs from forage losses due to a qualifying drought or wildfire in calendar 2021. Phase 1 of the program will use data already provided by affected producers under the Livestock Forage Program (LFP). ELRP payments will be based on the number of animal units, limited by available grazing acreage, in eligible drought counties. USDA said it was using LFP data to make the payments quickly even though there is not a “direct correlation to the increased feed costs incurred.” LFP payments were calculated as being $18.71 per month per animal unit for drought while there was not a single rate calculated for fire.

ELRP will pay 90% of that amount ($16.84) per animal unit per month for “historically underserved farmers and ranchers” while all others will receive 75% of that amount ($14.03) per animal unit per month. There is a $125,000 payment limit for a person if their average farm adjusted gross income (AGI) is less than 75% of their average AGI for tax years 2017, 2018 and 2019; if 75% of more of their average AGI is from farming, then the limit per person is $250,000. FSA will issue ELRP Phase 1 payments as 2021 LFP applications are processed and approved and are expected to total $577 million; any additional payments under ELRP will be covered under a Phase 2 effort.

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