Weekly global protein digest: Russia may restrict poultry imports, Prop 12, Argentina discounts 20 essentials in supermarkets

Livestock analyst Jim Wyckoff shares protein news from around the globe
calendar icon 6 January 2024
clock icon 8 minute read

California's Proposition 12 has officially become law

The law marks the culmination of over six years of political efforts by animal activists. Proposition 12, which was passed by California voters in 2018, imposes strict regulations on the sale of food products derived from farm animals that are not raised according to specific standards. While the egg and veal requirements of Prop 12 had already gone into effect, the pork provisions were initially delayed to allow non-compliant pork to clear the supply chain. As of Jan. 1, 2024, only compliant animal products can be sold in California.

The pork industry opposed Proposition 12 and took the legal battle to the Supreme Court, which ultimately ruled that states have the authority to restrict meat sales. USDA modified a weekly report on hog marketings to show the premium that was being paid for hogs raised in compliance with “animal confinement legislation,” such as Prop 12. In late December, the premium was an average $4.92 per 100 pounds. Since the passage of Proposition 12 in California, 14 other states have enacted similar laws.

Argentine supermarkets offer 20 essential products at discounted prices to counter recent price increases

Supermarkets in Argentina will introduce a basket of 20 essential consumer products at discounted prices, available nationwide for two months. This initiative aims to mitigate the impact of recent significant price increases, which have created tension between producers and marketers. The Ministry of Commerce, led by Javier Milei, will not directly intervene in pricing agreements but has encouraged private parties to establish a list of items at "very convenient prices." The Argentine Supers Network is voluntarily and temporarily offering a 20% discount on the prices of these 20 products in the basic basket for 60 days, starting on Dec. 27. The product selection includes food items like sugar, rice, noodles, flour, oil, crackers, eggs, milk, bread, legumes, tomato puree, dulce de leche (sweet milk), soda, tea, and mate (a traditional South American drink). Additionally, personal care products such as toilet paper and soap, as well as household cleaning products like bleach, paper towels, and detergent, will also be part of the discounted offerings. The government is avoiding direct price controls but is seeking to promote this list of essential products with attractive pricing, aiming to support consumers' purchasing power without resorting to extensive state intervention.

AI-based system predicts cow illnesses before symptoms, revolutionizes dairy farming

SmaXtec, an agricultural technology (agtech) company, has introduced an AI-based disease-detection system that can predict when cows will become sick, specifically detecting illnesses like mastitis, days before any clinical symptoms appear. Farmers have reacted with happy disbelief, amazed that technology can provide such early warnings. SmaXtec's system combines real-time monitoring of livestock health indicators with AI-powered data analysis to promote better dairy operations. Alisa Gusterer, a representative from the company, emphasizes that this technology aligns sustainability, animal welfare, and profitability, demonstrating that these factors can work together rather than being in conflict.

Cal-Maine Foods to acquire a Tyson Foods chicken broiler processing plant, hatchery and feed mill in Dexter, Missouri

This Tyson facility had been shut down in 2023. Initially, Cal-Maine intends to convert this plant into an egg-grading facility, and they plan to make further investments in the future. Additionally, the company plans to enter into agreements with contract farmers previously associated with Tyson, aiming to repurpose their facilities to support egg production.

HPAI confirmed in Ohio poultry flock; Russia considers poultry import restrictions

USDA's Animal and Plant Health Inspection Service (APHIS) confirmed cases of highly pathogenic avian influenza (HPAI) in several commercial poultry operations. These include a commercial table egg layer flock in Hardin County, Ohio, with 1,363,900 birds, as well as locations in Todd County, Minnesota (78,900 commercial turkey breeding hens), and Muskegon, Michigan (31,000 commercial turkey meat birds). Over the past month, there have been a total of 89 confirmed HPAI cases, affecting 52 commercial flocks and 37 backyard flocks, totaling approximately 13.22 million birds.

Meanwhile, reports suggest that Russia may be considering blocking imports of US poultry passing through Russia on their way to Kazakhstan due to concerns about bird flu. This potential restriction comes as Kazakhstan's imports of US broilers have declined significantly, from 101.487 million pounds in the January-October period of the previous year to around 49.986 million pounds in the same period this year.

USDA to resume milk market order hearing in January

USDA's Agricultural Marketing Service (AMS) is scheduled to resume a hearing on proposed changes to federal milk marketing orders (FMMOs) on Jan.15 in Carmel, Indiana. The hearing will take place from 8 am ET to 5 pm ET each day. If the proceedings are not concluded by Jan. 19, the hearing will reconvene again on Jan. 29, with that session potentially recessing on Feb. 2 if necessary. Virtual testimony will not be accepted, and dairy farmers who wish to appear and testify do not need to pre-submit their testimony or exhibits. This hearing is a continuation of a previous session that recessed on Dec. 8, which aimed to consider and gather evidence on proposals to modify pricing formulas in the 11 FMMOs.

USDA confirms HPAI in 709,000 bird California egg layer flock

USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed highly pathogenic avian influenza (HPAI) in a Merced County, California, commercial table egg layer flock with 709,000 birds. APHIS shows 16 commercial flocks and two backyard flocks being infected in California totaling nearly 4.4 million birds.

Weekly USDA dairy report

CME GROUP CASH MARKETS (12/29) BUTTER: Grade AA closed at $2.6650. The weekly average for Grade AA is $2.6225 (+0.0430). CHEESE: Barrels closed at $1.4000 and 40# blocks at $1.4700. The weekly average for barrels is $1.4313 (+0.0333) and blocks, $1.4263 (-0.0017). NONFAT DRY MILK: Grade A closed at $1.1700. The weekly average for Grade A is $1.1650 (+0.0045). DRY WHEY: Extra grade dry whey closed at $0.3850. The weekly average for dry whey is $0.3838 (+0.0003).

BUTTER HIGHLIGHTS: Retail butter demand is strong to steady for the finishing stretch of 2023. Food service demand reportedly remains light in the east region. Stakeholders indicate inventories are more balanced in the west region than the central or eastern regions of the US. Unsalted and salted butter inventories are comfortable to lighter in the east region. Cream supplies are plentiful to ample throughout the country. Furthermore, some western contacts share finding homes for spot loads of cream has been difficult, and some midwestern butter plant managers say they have been forced to turn offers away due to being at or near capacity. Some manufacturers relay lighter production schedules with end-of-year holidays at hand. Bulk butter overages range from 1 to 9 cents above market, across all regions.

CHEESE HIGHLIGHTS: Despite end-of-year holidays, cheese production schedules remained strong in the West and East but were lighter in the Central region. Due to the fact that Class I orders were largely stalled because of school closures, processors in the Northeast reported robust production schedules. Block cheese inventories are growing week over week. In the Midwest, contacts relay cheese demand is seasonally quieter than anticipated, and some cheese plants ran lighter production schedules as a result. Light cheese manufacturing caused spot milk prices to plummet to -$8 to -$2 under Class. In the West, contacts noted cheese production kept milk supplies somewhat balanced during the holiday week. Cheese inventories continue to grow week over week. Contacts predict both foodservice and retail demand will increase as football season comes to a close in the near term.

FLUID MILK: The holiday season has brought ample fluid milk, cream and condensed skim availability throughout the nation. Mild winter weather has continued to keep milk and milk component levels increasing. Bottling orders lightened earlier than contacts had expected this year. Spot milk prices reported by cheesemakers in the Midwest reached a recent low of $8-under Class III as $2-under Class was the top end of the range. Cheesemakers say they are having to turn away offers. Cream end users are in a similar scenario. Class II and Class III manufacturers are on lighter schedules and have been throughout the holiday season. Therefore, butter makers are receiving offers and, in cases, taking in cream loads at decreasing multiples. Condensed skim stores are noted as ample nationwide, and contacts say more condensed skim is moving into cheese plants for fortification. F.O.B. cream multiples are .65-1.10 in the East, .50-1.06 in the Midwest, and .80-1.10 in the West.

DRY PRODUCTS: Low, medium and high heat nonfat dry milk (NDM) prices held steady throughout the regions. Mexican demand has slowed for the holidays, as processors say trading activity was quiet on the whole. Dry buttermilk prices were steady to higher. Buttermilk solids have been somewhat snug in recent weeks. Dry whey prices were steady in the West and Central, while slipping slightly in the East. Dry whey markets were generally quiet, as processors say they are tight, particularly in the West. Lactose prices were steady to lower. Interchangeable lactose stocks remain readily available. Whey protein concentrate (WPC) 34% prices were steady to higher. Market tones for WPC 34% are steadily firming. Dry whole milk prices and acid/rennet casein prices went unchanged on slow trading activity.

ORGANIC DAIRY MARKET NEWS: One of the largest farmer[1]owned organic cooperatives in the United States recently announced they have grown their number of dairy farms by 84 in 2023. During November 2023, organic whole milk utilization totaled 16.9 million pounds, up from 15.3 million pounds the previous year. The October 2023 estimated U.S. sale of total organic milk products was 242 million pounds, up 2.1 percent from the previous year, and down 1.1 percent year-to-date. The October 2023 European organic milk average pay price increased in Germany, Bavaria and France compared to September 2023 average pay prices. Total organic ads increased by 22 percent, during the final retail ad survey of 2023. During this week's survey, the majority of organic ads were for organic milk. Organic milk ads also had the largest percentage increase of organic ads from last week.

NATIONAL RETAIL REPORT: The number of conventional dairy ads grew by 7 percent this week, while the number of organic dairy ads increased by 22 percent. Conventional ice cream in 48-to-64- ounce containers was the most advertised dairy product in this week’s survey, despite appearing in 22 percent fewer ads than last week. The weighted average advertised price for conventional ice cream in 48-to[1]64-ounce containers declined 2 cents to $4.13 this week. Conventional milk ads increased by 43 percent this week, while organic milk ads grew by 171 percent. Total ads for both conventional and organic cheese increased in this week’s survey. Conventional yogurt ads increased from last week’s survey by 116 percent.

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