Weekly global protein digest: US dairy update, 1st human avian influenza case

Analyst Jim Wyckoff shares an update on global protein news.
calendar icon 6 May 2022
clock icon 7 minute read
Jim Wyckoff Commentary -  TheCropSite

US pork exports sales down, beef up in latest week

USDA Thursday morning reported US pork net sales of 23,800 MT for 2022 were down 24 percent from the previous week and 13 percent from the prior 4-week average. Increases primarily for Mexico (11,300 MT, including decreases of 300 MT), South Korea
(3,700 MT, including decreases of 1,000 MT), Japan (3,400 MT, including decreases of 100 MT), Colombia (1,300 MT, including decreases of 200 MT), and Canada (900 MT, including decreases of 500 MT), were offset by reductions for Nicaragua (600 MT) and New Zealand (100 MT). Exports of 32,200 MT were up 8 percent from the previous week and from the prior 4-week average. The destinations were primarily to Mexico (15,600 MT), Japan (4,100 MT), China (3,600 MT), South Korea (2,600 MT), and Canada (1,500 MT).

US beef net sales of 14,600 MT for 2022 were up 28 percent from the previous week and 1 percent from the prior 4-week average. Increases were primarily for Japan (4,100 MT, including decreases of 600 MT), South Korea (3,200 MT, including decreases of 600 MT), Taiwan (1,800 MT, including decreases of 100 MT), China (1,600 MT, including decreases of 100 MT), and Canada (1,200 MT, including decreases of 100 MT). Total net sales of 100 MT for 2023 were reported for Japan. Exports of 20,300 MT were up 16 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Japan (6,600 MT), South Korea (5,000 MT), China (3,200 MT), Taiwan (1,300 MT), and Mexico (1,100 MT).

China’s sow herd declines

China’s sow herd declined 3.3% in March to 41.9 million head, down 3.1% from last year. China had 422.5 million head of hogs at the end of March, down 5.9% from the previous month but up 1.6% from last year, according to the country’s ag ministry.

US records the first human infection of the highly contagious H5 bird flu virus

State officials and the Centers for Disease Control and Prevention (CDC) said the first known human case of H5 bird flu in the US was detected in a person in Colorado. The person that tested positive for avian influenza A(H5) virus was involved in the culling of poultry presumed to have had H5N1 bird flu, CDC said. The Colorado Department of Public Health and Environment (CDPHE) said the man is incarcerated at a state correctional facility and was exposed to infected poultry while working at a commercial farm in Montrose County. The man tested positive for an avian influenza A(H5) virus earlier this week and the CDC confirmed the result on Wednesday, the CDPHE said, though repeat testing was negative for influenza. It’s possible the person may not have actually been infected with the virus, the CDPHE noted, suggesting the virus may have been present in his nose due to close contact with infected poultry but did not cause an infection. The man—described as younger than 40, “largely asymptomatic” and reporting only fatigue—is now isolating and taking the antiviral drug oseltamivir, also known as tamiflu, the CDPHE said. No other cases have been confirmed in humans in Colorado or the U.S., the CDPHE said. “We want to reassure Coloradans that the risk to them is low,” said Dr. Rachel Herlihy, a state epidemiologist at the Colorado Department of Public Health and Environment.

USDA pays $146 million in US bird flu indemnities

As bird flu losses topped 35 million fowl, USDA Secretary Tom Vilsack said on Thursday that the USDA has paid about $146 million in indemnities to poultry owners, with an additional $263 million available. “That’s about half of where we were in 2014-2015 with the last outbreak,” he said, referring to the epidemic of highly pathogenic avian influenza (HPAI) that killed more than 50 million egg-laying chickens and turkeys. “Hopefully, with warming temperatures, we will see abatement of this virus,” Vilsack said at a House hearing. “We’re going to continue to focus on rapid detection, quick quarantine, and depopulation and disposal” of infected flocks.

USDA’s dairy market news at a glance

CME GROUP CASH MARKETS (4/29) BUTTER: Grade AA closed at $2.6750. The weekly average for Grade AA is $2.6465 (-0.0605). CHEESE: Barrels closed at $2.3400 and 40# blocks at $2.3700. The weekly average for barrels is $2.3540 (-0.0245) and blocks, $2.3695 (N.C.). NONFAT DRY MILK: Grade A closed at $1.7550. The weekly average for Grade A is $1.7370 (-0.0520). DRY WHEY: Extra grade dry whey closed at $0.6050. The weekly average for dry whey is $0.5890 (-0.0480).

CHEESE HIGHLIGHTS: United States milk supplies are growing, thus becoming more available and moving into cheese production. Spot milk prices in the upper Midwest ranged from $2.50 to $1.50 under Class III this week. Comparing this year’s prices to last year’s, spot milk topped out at level last year during week 17, while the low end was $5.00 under Class. Lighter COVID restrictions and spring weather have increased food service demand, according to contacts in the West. Midwestern cheesemakers continue to relay steady to strong demand notes, as well. Eastern cheese stocks are aplenty, but steady demand has allayed much consternation regarding oversupply. Despite some ups and downs on the CME, general market tones are healthy.

BUTTER HIGHLIGHTS: Cream availability ranges from steady to available for butter processors nationwide. That said, Eastern butter plant contacts relay a snugness on the cream market following the past few weeks. Western cream continues to move eastbound, as some Midwestern butter plant managers report clearing cream from both local and Western sources. There are growing and vocal concerns regarding the domestic butter inventory come late summer/fall, as domestic demand is expected to seasonally intensify, while export interests continue to keep churners churning. Butter market tones remain on solid ground, despite moving into the low $2.60s on the CME from the previous range in the $2.70s over the past few weeks.

FLUID MILK: Milk production is generally expanding seasonally, except for Arizona, where warm temperatures have subdued milk outputs. Overall national production is mixed regarding yearly comparisons. Some regions report output is down year over year. Class I demand is steady to higher on the coasts but slowing somewhat in the Midwest, as some schools begin to wind down for their summer hiatuses. Class III demand remains active. Spot milk prices in the Midwest are -$2.50 to -$1.00 below Class III. Condensed skim supplies range from available to tighter. Some western contacts say that overall condensed skim demand has been strong the last few weeks. Cream supplies are slowly tightening as ice cream manufacturers increase activity. Cream multiples for all Classes are 1.32 to 1.40 in the East, 1.24 to 1.31 in the Midwest, and 1.00 to 1.30 in the West.

DRY PRODUCTS: Nationwide, prices for low/medium heat nonfat dry milk slid lower, even as supplies remain relatively snug. Prices for high heat nonfat dry milk are steady to lower in the Central and East regions and generally lower in the West. High heat NDM trading remains quiet on limited availability. Dry buttermilk prices are steady to higher. Inventories are tight and production sporadic. Dry whole milk powder supplies remain tight, and prices are unchanged. Dry whey prices are mixed but retracted at the top of the range for each region. Dry whey production and inventories are steady to higher. Animal feed whey prices are moving lower at the bottom of the range but held steady at the top. Prices for whey protein concentrate 34% and for lactose are unchanged with many market participants attending a major dairy industry meeting this week. Acid and rennet casein prices remained on steady ground on slowed trading activity.

INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPEAN OVERVIEW: Milk production in Western Europe is growing seasonally, but still behind year-to-date levels from last year for many of the larger milk production nations in the EU. Industry sources report weekly milk deliveries in Germany are slightly higher than last week but lower than milk deliveries in the same week from a year ago. In other parts or Western Europe, sources suggest April milk production is lagging. High costs for labor, feed, replacement heifers and the building materials for physical expansions all weigh heavily on farmers' decisions to produce more milk. With so much uncertainty in dairy markets and the global landscape, industry contacts think that it may take some time before farmers feel comfortable to invest and actively expand milk production.

EASTERN EUROPEAN OVERVIEW: In Eastern Europe, milk production continues to grow seasonally and year over year. The increase in the eastern parts of the continent has pushed EU milk production into positive milk growth for the year to date through February.

OCEANIA OVERVIEW: AUSTRALIA: According to some reports, Australia is seeing an increase in the farmgate milk price for dairy producers. Compared to the previous year, producers' payouts would improve as much as 16 percent.


TheCattleSite News Desk

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