Weekly global protein digest - Companies working to find H5N1 vaccine for cattle, European Union orders over 40 million bird flu vaccines

Livestock analyst Jim Wyckoff reports on global protein news
calendar icon 14 June 2024
clock icon 14 minute read

China could target EU pork, dairy in retaliation for EV tariffs

Food companies from dairy producers to pork exporters are on high alert for potential retaliatory tariffs from China after the European Union’s decision on Wednesday to impose anti-subsidy duties on Chinese-made electric vehicles (EVs). China’s state media reported domestic companies are preparing to request investigations into some EU dairy and pork imports over anti-subsidy or anti-dumping concerns. As trade tensions between the EU and China intensify, some European officials have warned against imposing import duties on food products.

Companies working to find H5N1 vaccine for cattle

Twenty-four companies are working to develop an H5N1 vaccine for cattle, as the virus spreads among U.S. dairy herds, USDA Secretary Tom Vilsack told Reuters. In addition to the two dozen companies working at varying stages of vaccine development, USDA is conducting its own preliminary research into a vaccine at its laboratory in Ames, Iowa, Vilsack said. The agency is looking for a vaccine candidate to test for efficacy, he said, noting “that could happen tomorrow, or it could take six months or it could take a year.”

Iowa reports third H5N1 dairy outbreak

Iowa reported a case of H5N1 in a dairy herd in Sioux County, the second in the county and third in the state. Infections have been found within the past week in Sioux County dairy herds of 1,700 and 250 cows, following an earlier case in an O’Brien County herd of 4,500 cows. The virus had been confirmed in two Iowa poultry flocks prior to the recent cattle infections: a Sioux County flock with 4.2 million egg-laying chickens and a Cherokee County flock with 103,000 turkeys.

European Union orders over 40 million bird flu vaccines

The move from CSL Ltd. Is to prevent the potential spread of the virus to humans. This four-year contract comes in response to the rapid spread of avian influenza at U.S. dairy farms, where the virus has recently begun infecting dairy cattle after previously affecting millions of birds. There are concerns that the disease could spread further.

WHO confirms human case of bird flu in India

The World Health Organization (WHO) said a case of human infection of the H9N2 virus was detected in a four-year-old child in the eastern Indian state of West Bengal. The patient had exposure to poultry at home and in his surroundings. This is the second human infection of H9N2 bird flu in India, with the first in 2019, the agency said.

NMPF highlights mounting losses from milk pricing formula

The National Milk Producers Federation (NMPF) raised concerns about the growing financial losses dairy producers are facing due to the current milk pricing formula. This issue is being discussed in an ongoing public hearing by USDA, which is considering potential reforms.

Current formula and losses: The "Class I mover" formula, introduced by the 2018 Farm Bill to set the price for fluid milk, has resulted in cumulative losses of approximately $1.2 billion for dairy producers since its implementation in 2019.

Call for reforms: NMPF hopes that the USDA will revert to the pre-2018 Farm Bill formula. They are pushing for this change to be fast-tracked, separate from other potential reforms.

Legislative developments: The House Ag Committee has approved a farm bill that includes language to revert the Class I mover to its previous form, indicating legislative support for this change.

Sonoma County, California, ballot measure would ban large poultry and livestock operations

This move comes as animal rights activists push for greater oversight in an area known for its vineyards, dairies, and organic farms.

The proposed measure, known as Measure J, seeks to prohibit large poultry and livestock operations, claiming they pollute the environment and mistreat animals through close confinement. If passed, Sonoma would be the first county in the U.S. to implement such a ban. Supporters argue that residents should have a say in local agricultural practices, and they have gathered enough signatures to place the measure on the ballot.

Farmers, however, view this measure as an attack on their livelihood. They argue that it would force many to either downsize or shut down, leading to significant economic repercussions. Mike Weber, whose family has been producing eggs since 1912, believes the initiative is an attempt to eliminate animal farming entirely. The Sonoma County Farm Bureau estimates that the measure would impact at least 60 poultry and livestock operations.

The debate highlights the changing demographics and attitudes in Sonoma County, where urbanization is increasingly encroaching on rural areas. While some see the measure as a necessary step towards animal welfare, others worry about its economic impact and the potential for misinformation to influence voters. Past statewide initiatives in California, such as Proposition 2 and Proposition 12, have shown voter support for animal welfare measures, suggesting that similar sentiments might influence the upcoming vote.

Bottom line: The outcome of Measure J could set a precedent for other regions and influence future legislative actions on animal farming practices both within and beyond Sonoma County.

Iowa Ag secretary urges USDA to compensate farmers for culling cattle due to H5N1 flu

Iowa's Agriculture Secretary Mike Naig is urging USDA to compensate dairy farmers who cull cattle due to the H5N1 avian flu virus. This call follows the state's second outbreak of the virus. Since its detection in Texas in March, at least 90 herds across 12 states have been affected. Naig emphasizes the significant threat posed by the virus to livestock and farmers' livelihoods.

The current outbreak, ongoing since February 2022, is the largest animal disease event in U.S. history, having killed nearly 97 million birds, primarily egg-laying hens and turkeys. Iowa, the top egg-producing state, has suffered one-fourth of these losses. The virus is believed to have spread to dairy cattle in the Texas panhandle in late 2023 or early 2024.

Naig proposes that USDA should compensate farmers for the fair market value of culled cattle and 90% of lost milk production. A dairy cow typically costs between $1,500 and $3,000, with the national average price being $2,254 for a fresh Holstein cow.

Currently, dairy farmers can receive up to $28,000 over three months from USDA to implement biosecurity measures, provide protective equipment, cover veterinary testing costs, and safely dispose of milk from infected cows.

Bird flu typically affects older cows, causing fever, loss of appetite, and reduced milk production. Recovery usually takes a couple of weeks, though some symptoms may persist for four to six weeks.

To improve understanding and response, Iowa's Agriculture Department will expand testing to include dairy farms near poultry farms with outbreaks.

Naig also advocates for increased USDA indemnity rates for birds and egg production losses.

China’s sow herd shrinks, slaughter rises

China’s sow herd totaled 39.86 million head at the end of April, down 6.9% from last year, according to the ag ministry. Hog slaughter during the first four months of this year rose 2.3% from the same period last year to 108.38 million head.

Vilsack on Supreme Court decision and Proposition 12

USDA Secretary Tom Vilsack expressed concerns that the Supreme Court "didn’t understand" the pork market when it upheld California's animal welfare law, Proposition 12. Speaking in Asheville, North Carolina, Vilsack highlighted the tension between states' rights to regulate farming within their borders and the implications of extending these regulations to farmers in other states.

California’s Proposition 12 has faced backlash from major pork-producing states. The House farm bill aims to overturn Prop 12 and similar state animal welfare laws affecting dairy, beef, and pork products, while still allowing states to enforce their laws within their own borders.

Vilsack suggested that Congress has the opportunity to clarify that states can regulate farming practices within their borders but should not impose those regulations on farmers in other states. However, he also pointed out the political challenges, noting potential opposition in the Democratic-controlled Senate and the difficulty in passing the farm bill.

Vilsack concluded by acknowledging the complexity of the issue and the need to carefully consider the political costs involved.

Minnesota reports first H5N1 outbreak in dairy herd

Minnesota reported the state’s first outbreak of the H5N1 virus in dairy cattle in a herd in Benton County. This marks the 11th state to discover the virus in dairy herds. This was not the first Minnesota dairy farm tested for H5N1 due to cattle showing signs of illness, but it was the first to confirm positive results.

U.S dairy farms decline, but raw milk business thrives

While dairy farms have been declining for decades, Mark McAfee's Raw Farm in Fresno, California, is an exception, according to an account in the Wall Street Journal. Since 2020, his business has grown significantly and is expected to reach $30 million in sales this year. Raw Farm is California's largest supplier of unpasteurized milk, popularized by endorsements from Gwyneth Paltrow and availability at specialty grocers like Erewhon and Sprouts.

Influencers and social-media personalities have boosted demand by promoting raw milk as creamier, more nutritious, and easier to digest than pasteurized milk. "Influencers have really driven us in the last four years to new levels we never imagined," McAfee said.

However, the FDA warns against consuming unpasteurized milk due to the risks of salmonella, listeria, and E. coli, which can cause severe illnesses and even death. Despite these risks, selling raw milk is legal in California and over half of U.S. states, though interstate sales are banned. The FDA highlights particular dangers for children, the elderly, immunocompromised individuals, and pregnant women and has issued warnings about bird-flu contamination in dairy cows. Twenty states have laws restricting raw milk sales in some form.

China’s meat imports increase in May

China imported 557,000 MT of meat in May, up 2.4% from April but down 6.7% from last year. Through the first five months of this year, China imported 2.78 MMT of meat, down 11.5% from the same period last year.

Germany confirms case of ASF

A case of African swine fever (ASF) has been confirmed on a pig breeding farm in Greifswald in the eastern state of Mecklenburg-Vorpommern, the state’s ag ministry said. China and other countries banned imports of German pork in 2020 after an ASF outbreak in the country. China’s import ban remains in place.

Weekly USDA dairy report

CME GROUP CASH MARKETS (6/7) BUTTER: Grade AA closed at $3.0925. The weekly average for Grade AA is $3.1040 (+0.0796). CHEESE: Barrels closed at $1.9550 and 40# blocks at $1.8450. The weekly average for barrels is $1.9550 (N.C.) and blocks $1.8660 (+0.0429). NONFAT DRY MILK: Grade A closed at $1.1950. The weekly average for Grade A is $1.1895 (+0.0232). DRY WHEY: Extra grade dry whey closed at $0.4700. The weekly average for dry whey is $0.4445 (+0.0414).

BUTTER HIGHLIGHTS: Retail butter demand continues to be strong or steady throughout the nation. Food service demand varies from strong to steady in the West region, but food service demand is unchanged in the East and Central regions. Cream loads are generally available across the country to meet most needs. However, industry participants indicate cream volumes are tightening. Butter manufacturers convey strong to steady production schedules in reference to retail lines. Regarding bulk lines, some manufacturers convey production is lighter. Unsalted bulk butter loads are somewhat tight. Bulk butter overages range from 1 to 10 cents above market, across all regions.

CHEESE HIGHLIGHTS: Contacts in the East relay steady milk volumes are clearing into Class III processing. Cheese production schedules are steady. Some manufacturers have shared they are seeing increased interest in aged cheeses. Retail cheese demand is expected to increase through June. In the Central region, cheese manufacturers share milk is available for processing, but spot milk offers are decreasing. Spot milk prices were reported at $2- to $1-under Class III. Some cheesemakers share they have oversold, and any spot loads that become available are spoken for by contracted customers. Cheese production is steady in the West. Educational breaks have caused some milk volumes to be reallocated to Class III cheese processors. Export cheese demand ranges from steady to moderate.

FLUID MILK: Milk production is easing down across the board. Producers experiencing storms and heavy rainfall say it has put a damper on production. The rest of the country is watching their production numbers evaporate as rising temperatures start to slow milk volumes. In the East, spot loads are generally available as demand for all Classes runs steady. In the Midwest, the decreases in production have translated to higher spot load prices. That is coupled with higher demand and tightening availability. Reported spot milk prices ranged from $2- to $1- under Class III. The Pacific Northwest is hanging onto lower temperatures, and production numbers and demand are holding steady. Other states in the West are experiencing higher temperatures. Some are feeling the heat more than others. New Mexico, Idaho, Utah, and Colorado are all reporting lighter production than previous weeks, however, no shortages are noted by processors. California and Arizona are feeling the heat more than the rest. Spot milk availability is tightening. Securing needed milk volumes is more challenging as Class II, III, and IV demands are steady. Condensed skim milk demand is strong, and spot loads are generally available. Cream multiples are trending higher. Cream multiples for all Classes are 1.10 - 1.31 in the East, 1.15 - 1.38 in the Midwest and 1.05 - 1.30 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices were mixed throughout the nation this week. Demand tones are holding steady for NDM. Although condensed skim availability has not wavered in recent months, contacts expect stocks to tighten in the near-term. Dry buttermilk prices held in the Central region, while West markets were steady to bullish. Q3 demand for buttermilk powder is expected to be stronger than it has been during Q2. Seasonal declines in milk availability have kept dry whole milk production in check, while prices were unchanged due to limited spot availability. Dry whey prices were steady to higher in the West, while moving up in all other region

Whey drying is beginning to ebb in areas where milk availability has become seasonally tighter. Whey protein concentrate (WPC) 34% prices were steady to lower, as domestic demand is noted as lackluster. Lactose prices were also steady to lower, as sellers are trying to remain competitive with international marketers. Rennet and acid casein prices were unchanged on steady demand tones.

INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPE: In many parts of Western Europe, dairy industry contacts suggest the peak of milk production may be just past. Although European milk deliveries are generally thought to be at levels higher than previous years, in some countries like France and the UK, it is being compared to weak production years. As a result, some market observers report milk prices have been supported. The monthly weighted average price for farm milk in the EU-27 has held steady between 46 and 46.5 euros per 100 kg for the first five months of the year. Manufacturers are seeking additional milk and looking to hold on to their farmer patrons. A large European dairy cooperative recently announced the June guaranteed milk price will increase by 0.5 euros to 47.75 euros per 100 kg. In addition, current weekly spot milk prices in some locations have risen to the low/mid 50 euros per 100 kg range.

EASTERN EUROPEAN OVERVIEW: In parts of Eastern Europe, milk production is at or near peak production. Typically, milk production peaks in May for Poland and Ukraine, July for Belarus, and August for some Baltic States. Online information services report March 2024 Ukrainian milk production was 573,000 tons, compared to 585,000 tons in March 2023. Prior to the Russian invasion, March 2021 Ukrainian milk production was 696,000 tons. The average March milk price in Ukraine was approximately 32.7 euros per 100kg, well below the average March milk price of 46.38 euros per 100 kg in the EU-27 and 47.84 euros per 100 kg in Poland.

AUSTRALIA: According to Dairy Australia, April 2024 milk production, 591.8 million liters, was up 2.5 percent from April 2023. Milk production was higher in April 2024 compared to a year earlier in most states, with decreases seen in Queensland and Tasmania. The largest increase from March of 2023 was, 4.2 percent, in Victoria. Milk production from the start of the season in July 2023 through April 2024, 7,134.6 million liters, increased 3.0 percent compared to the same time frame a year earlier. From the start of the season in July 2023 through April 2024 the cumulative volume of milk produced was higher in every state compared to the prior season.

NEW ZEALAND: Export data for April 2024 was recently released for New Zealand. This data showed a 12 percent decrease in value for milk powder, butter, and cheese exported in April 2024 compared to April 2023. Fresh milk and cream export values were 28 percent higher in April 2024, when compared to a year earlier.

SOUTH AMERICA: The effects of the catastrophic flood in Brazil's Rio Grande do Sul, along with heavy rainfall in the other key milk producing areas in the region, have contacts saying milk output expectations this fall/winter are less than robust continent-wide. Argentina's dairy output, according to reports, continues to contend with myriad roadblocks, as trends continue to be bearish for current and expected milk yields in the country. Dairy farms and herd numbers are on a less-than-gradual year-over-year decrease. Heavy rainfall in the country has analysts reporting conditions are below ideal for cow comfort. Early year trends for Brazil were somewhat bullish in regard to milk production. That said, the toll of the aforementioned flooding in a notable dairy state is far from being tallied, and analysts expect it will have a clear and resounding impact on milk output there. Another hit to dairy output is the recently strong production numbers from Uruguayan farms have begun to waver. Echoing the other major dairy producing/trading countries in South America, heavy rainfall in Uruguay is a key factor in reversing the until recently bullish milk output trends in that nation.

US NATIONAL RETAIL REPORT: Pint sized ice cream carried the most weight when it comes to the volume of total dairy advertisements during week 23. Conventional ice cream in 14-to-16-ounce containers was the most advertised item, taking top spot from last week's pole position holder, conventional ice cream in 48-to-64-ounce containers. Half gallon milk advertisement totals were the highest in the organic sector.

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