Weekly global protein digest: Perdue's petition to define "free-range", US considers Paraguay beef, Japanese egg prices soar

Analyst Jim Wyckoff shares an update on global protein news
calendar icon 1 April 2023
clock icon 10 minute read

Weekly USDA US beef, pork export sales

Beef: Net sales of 11,300 MT for 2023 were down 40 percent from the previous week and 10 percent from the prior 4-week average. Increases were primarily for Japan (2,700 MT, including decreases of 900 MT), China (2,500 MT, including decreases of 100 MT), Taiwan (1,700 MT, including decreases of 100 MT), South Korea (1,600 MT, including decreases of 400 MT), and Canada (700 MT). Exports of 16,600 MT were up 23 percent from the previous week and 13 percent from the prior 4-week average. The destinations were primarily to South Korea (5,100 MT), Japan (3,800 MT), China (2,200 MT), Mexico (1,300 MT), and Taiwan (1,100 MT).

Pork: Net sales of 30,400 MT for 2023 were down 20 percent from the previous week and 4 percent from the prior 4-week average. Increases were primarily for Mexico (14,600 MT, including decreases of 300 MT), Japan (4,100 MT, including decreases of 300 MT), Australia (2,200 MT), Canada (1,600 MT, including decreases of 500 MT), and South Korea (1,500 MT, including decreases of 600 MT). Exports of 32,400 MT were up 6 percent from the previous week and 7 percent from the prior 4-week average. The destinations were primarily to Mexico (12,800 MT), China (4,600 MT), Japan (4,600 MT), South Korea (3,300 MT), and Canada (1,700 MT).

An Australian company produced a woolly mammoth meatball to demonstrate the potential of lab-grown meat

The team used a mixture of mammoth and elephant DNA. (They originally wanted to make a dodo dish, but the necessary DNA sequences do not exist.) No one has yet eaten the prehistoric meatball, but the taste would be hard to verify: mammoths went extinct 4,000 years ago.

US beef group: APHIS risk analysis is dated

USDA’s Animal and Plant Health Inspection Service (APHIS) is proposing to amend its regulations to allow the importation of fresh (chilled or frozen) beef from Paraguay. APHIS said: “Based on the evidence from a risk analysis, we have determined that fresh beef can safely be imported from Paraguay, provided certain conditions are met. This action would provide for the importation of fresh beef from Paraguay into the United States while continuing to protect the United States against the introduction of foot-and-mouth disease.” But NCBA Executive Director of Government Affairs Kent Bacus said, “Paraguay has a history of outbreaks of foot-and-mouth disease, and we cannot jeopardize the safety of U.S. consumers and the health of our U.S. cattle herd with outdated information.” Comments are due by May 26.

USDA considering petition on ‘free range,’ ‘pasture-raised’ claims for meat, poultry

USDA’s Food Safety and Inspection Service (FSIS) is considering a petition from Perdue Farms that the agency “conduct rulemaking to define separate ‘free range’ and ‘pasture raised’ claims for meat and poultry products,” the agency said. Perdue is also asking FSIS to update guidance on claims related to living/raising conditions to ensure that they align with consumer expectations. The company submitted the petition March 16, which specifically calls on FSIS to “promulgate labeling regulations under the Poultry Products Inspection Act (PPIA) that remove ‘pasture-raised’ from claims considered synonymous with ‘free range’ and further amends its current Compliance Guideline such that ‘pasture-raised’ is separately and specifically defined.” Perdue argues that the two phrases need to have separate definitions as there is “substantial confusion” relative to what constitutes pasture raised. The company based its petition on consumer research, which it detailed in the petition for the rulemaking request.

Japan lifts long-standing ban on Canadian beef

Japan removed restrictions on Canadian processed beef imports that have been in place since a 2003 case of bovine spongiform encephalopathy. The deal lifts age limits on Canadian beef that can be shipped to Japan and removes restrictions on processed items like beef patties. Canada still exported $379.29 million in beef to Japan in 2022 despite the restrictions, making it the second largest export destination for Canadian beef. Japan’s lifting of restrictions comes as it is scheduled to reduce tariffs on beef imports starting April 1 under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade pact of which Canada is a member.

Canada opens consultations on proposed changes to Livestock Identification and Traceability

Canada announced a consultation on proposed changes to the Health of Animals Regulations (Identification and Traceability), which will run from March 18, 2023 until June 16, 2023. The consultation will seek feedback on proposed amendments to the Regulations which would add goats and cervids to the regulated species due to shared diseases with already regulated species, reduce the time period for reporting a disease incidence or outbreak event, add requirements for information about geographical location of sites where animals are located, and require domestic movement reporting for livestock.

China’s sow herd higher than target

China’s sow herd increased 1.7% in February compared with a year earlier to 43.4 million head, 5% more than the targeted capacity, state media reported. However, that was down 0.6% from January.

Egg prices in Japan are soaring

The ongoing avian flu outbreak increases the number of chickens and other birds culled across the country, affecting the restaurant sector and households struggling with inflation. Egg prices jumped 20% in February from a year earlier, the fastest pace since May 2005, according to the statistics bureau of Japan. Concerns about shortages also are growing, with an increasing number of restaurants and companies opting to suspend their offerings of egg-based dishes, including McDonald’s Corp., 7-Eleven and mayonnaise-maker Kewpie Corp.

China to resume some Brazilian beef imports

China resumed imports of Brazilian boneless beef aged under 30 months starting today, China’s customs authority announced. Sales of Brazilian beef to China were voluntarily halted by Brazilian authorities on Feb. 23, following the discovery of an atypical case of bovine spongiform encephalopathy (BSE).

Latest weekly USDA dairy report

CME GROUP CASH MARKETS (3/24) BUTTER: Grade AA closed at $2.3450. The weekly average for Grade AA is $2.3780 (-0.0100). CHEESE: Barrels closed at $1.9625 and 40# blocks at $2.1000. The weekly average for barrels is $1.9535 (+0.0795) and blocks, $2.0290 (+0.1000). NONFAT DRY MILK: Grade A closed at $1.1500. The weekly average for Grade A is $1.1545 (-0.0260). DRY WHEY: Extra grade dry whey closed at $0.4450. The weekly average for dry whey is $0.4450 (-0.0060).

BUTTER HIGHLIGHTS: In the East, cream cheese and ice cream makers are drawing on cream supplies, and availability for butter making is tightening. Contacts in the region anticipate greater cream availability as spring flush begins. Central region stakeholders say cream offers are quieter this week, and some butter makers are sourcing loads from the West to meet their current churning needs. Organic cream volumes are more available in the Central region than conventional cream. Cream volumes are plentiful in the West, and stakeholders say demand is steady to light. Butter makers are running active production schedules across all regions. Some processors in the East are, reportedly, running seven days a week and freezing some bulk butter. In the West, some butter makers are operating at reduced capacity as equipment is undergoing repair. Contacts in the region note steady demand for butter. Eastern butter contacts note steady to higher demand, while contacts in the Central region say sales are on par to busy. Bulk butter overages range from 0 to 10 cents above the market, across all regions.

CHEESE HIGHLIGHTS: Milk is available for processing throughout the country. Contacts in the Northeast say regional dryer challenges have freed some milk volumes intended for nonfat dry milk production. In the Midwest, loads of milk continue to move as low as $11 under Class III, but some cheesemakers say they are not receiving offers quite as low this week. Cheesemakers in the Northeast and West are operating strong production schedules. In the Midwest, some cheesemakers say their output is lagging demand, despite strong regional milk availability. Strong cheese production in the Northeast is contributing to growing cheese inventories, while retail and food service demands are steady in the region. Spot loads of cheese are available to meet market demands in the West. Contacts report steady demand from domestic spot purchasers in the West. Exports of cheese from the West are mixed. Some stakeholders note strong demand from purchasers in Asian markets, while lighter demand is present for loads to ship to other regions.

FLUID MILK: Milk output is strong to steady, aside from areas of California having regionally steady to lighter milk production. Flooding and overflowing rivers are creating differences regionally in California. Industry sources report some relocating of cows to drier dairies, causing decreased milkings per day. Across the country, available milk volumes are heavier to balanced compared to current production needs. Class I demand is lighter in some areas as educational facilities cycle through spring break schedules. Spot load sales and purchases of Class III milk in the Midwest ranged from $11 to $4 below Class III. Ice cream, cream cheese and soft serve manufacturing have increased as spring holidays approach, making cream supplies regionally tighter in some parts of the country. Stakeholders expect this tightness to loosen when spring flush conditions are reached. Overall, cream is plentiful to ample for production needs throughout the country. Condensed skim milk volumes are regionally tighter in parts of California due to some unplanned downtime at processing facilities. Elsewhere, condensed skim milk supplies are increasing to steady. Cream multiplies for all Classes are 1.24 – 1.30 in the East, 1.22 – 1.30 in the Midwest, and 1.00 – 1.21 in the West.

DRY PRODUCTS: Low/medium nonfat dry milk (NDM) prices moved lower. Demand is light, and loads are available. High heat NDM prices moved lower in the West and are steady to lower in the Central and East region. Some contacts report strengthening demand ahead of spring holidays. Inventories are tight, and market tones are somewhat bearish. Dry buttermilk prices moved lower. Demand is light to quiet outside of contracted loads. Market tones are bearish. Some contacts reported condensed buttermilk volumes being shifted into the manufacturing of ice cream and soft serve mix. Dry whole milk prices held their ground this week. Like prices, buyer interests stayed the same despite increased availability. Although dry whole milk processing is active, condensed skim milk continues to take the bulk of drying time. Dry whey prices are mixed. Higher to balanced inventories remain reported by stakeholders. Dry whey production has increased due to bearish whey protein concentrate markets and widely available Class III milk. Top end whey protein concentrate 34% prices decreased. Some loads are being offered at prices similar to or below low/medium heat NDM. Top end lactose prices lost some ground. Domestic and international markets are light. Rennet and acid casein prices moved lower. Contacts note the $6+/lb mark for both rennet and acid casein will be unsustainable as Q2 negotiations continue.

ORGANIC DAIRY MARKET NEWS: The Agricultural Marketing Service (AMS) reported January 2023 estimated fluid product sales. The U.S. sale of total organic milk products was 258 million pounds, up 4.8 percent from January 2022 and up 4.8 percent year-to-date. Organic whole milk sales, 125 million pounds, were up 10.2 percent compared to a year earlier and up 10.2 percent year-to[1]date. Reduced fat milk (2%) sales were 85 million pounds, up 1.1 percent from the previous year and up 1.1 percent year-to-date. The March 2023 retail surveys of selected supermarkets in 30 U.S. cities identifies the retail prices of organic whole milk in the half gallon container. The prices ranged from $3.99 in multiple cities to $6.49 in Pittsburgh, PA. The simple average price, $4.79, for March 2023 is lower than the previous month. This week, total organic ads declined 12 percent from last week's survey. Milk in the gallon containers is the most advertised organic dairy item, followed by regular yogurt in the 32 -ounce package size. Meanwhile, organic dairy retail markets in the Midwest saw a jump in ads this week, up 79 percent compared to the previous retail survey.

NATIONAL RETAIL REPORT: Total conventional dairy advertisements decreased by 10 percent this week, and total organic dairy ads decreased by 12 percent. Ice cream in 48-64 ounce containers was the most advertised dairy product, with a weighted average advertised price of $3.72, down 23 cents from last week. Gallons of organic milk was the most advertised organic dairy item, with a weighted average advertised price of $5.37, up 8 cents from last week. Conventional butter in one-pound packages appeared in 175 percent more ads this week, with a weighted average advertised price of $3.41, down 81 cents from last week.

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