US broiler market at a glance

US whole broiler/fryer prices are trending steady for all sizes, USDA said in its latest weekly report. Offerings of all sizes are moderate for current trade needs. Retail and foodservice demand is light to moderate entering the weekend. Processing schedules are normal to reduced. Floor stocks are adequate. Market activity is slow to moderate. In the parts structure, prices for wings and tenders are trending steady. Breast meat items and dark meat cuts are steady at best, and the remainder of parts are steady. Supplies of dark meat cuts, tenders, and boneless skinless breasts are moderate to heavy with legs and drums slow to clear. Wings and all other parts are mostly moderate. Market activity for parts is slow to moderate. In production areas, live supplies are moderate to heavy. Weights are mixed, but mostly desirable.

China suspends imports from another US poultry plant

China suspended imports from an OK Foods poultry plant in Fort Smith, Arkansas due to an outbreak of Covid-19 among its employees. This marks the second U.S. poultry facility China has banned shipments from due to the coronavirus. The plant is owned by Mexico's Industrias Bachoco. According to the Arkansas Department of Health, 234 plant workers tested positive for the virus as of Aug. 31, but the facility no longer has more than five active cases.

USDA annual report on European Union poultry and products: contraction in chicken sector

USDA in its annual European Union poultry report said after years of growth, the EU-27 chicken meat production is expected to decline by 1.6 percent in 2020 due to the impact of the COVID-19 outbreak that led to a lockdown in most EU-27 countries and the temporary closure of hotels, restaurants and institutional cafeterias (HRI).

While chicken meat demand was less affected than other meats, the loss of sales from meals normally consumed in restaurants was not fully replaced by products purchased for at-home consumption. Outbreaks of COVID among workers in chicken meat slaughterhouses were limited to a few cases and did not lead to major production disruptions in EU-27 countries. Most EU-27 countries had decreases in production.

The post-COVID-19 economic challenges throughout most of Europe will favor cheap protein sources. Combined with the ease of preparation of chicken meat, we project a resumption in growth in chicken meat demand and production in 2021, although at a slower growth rate than pre-COVID estimates. However, the short two-month production cycle of the chicken industry makes it very reactive to outside events, both on the upside and downside, making accurate forecasts difficult.

US pork exports continue at solid pace

USDA on Thursday morning reported US pork net sales of 50,600 metric tons (MT) for 2020 were up 68 percent from the previous week and 41 percent from the prior 4-week average. Increases primarily for China (35,900 MT, including decreases of 200 MT), Mexico (5,900 MT, including decreases of 400 MT), Japan (3,200 MT, including decreases of 400 MT), Canada (1,500 MT, including decreases of 400 MT), and Australia (1,300MT, including decreases of 100 MT), were offset by reductions primarily for Nicaragua (100 MT). For 2021, total net sales of 100 MT were for Australia. Exports of 28,600 MT were down 15 percent from the previous week and 12 percent from the prior 4-week average. The destinations were primarily to Mexico (9,200 MT), China (8,300 MT), Japan (3,700 MT), Canada (1,900 MT), and South Korea (1,400 MT).

US beef net sales of 14,300 MT reported for 2020 were down 8 percent from the previous week and 2 percent from the prior 4-week average. Increases were primarily for South Korea (4,400 MT, including decreases of 300 MT), Japan (4,000 MT, including decreases of 200 MT), China (1,800 MT), Mexico (1,400 MT), and Canada (900 MT, including decreases of 100 MT). For 2021, net sales of 500 MT were primarily for Japan. Exports of 14,100 MT were down 12 percent from the previous week and 19 percent from the prior 4-week average. The destinations were primarily to Japan (4,000 MT), South Korea (3,900 MT), Hong Kong (1,400 MT), Taiwan (1,200 MT), and Mexico (1,000 MT).

USDA: Covid-related shifts could limit South Korea’s pork and beef imports

A US attaché in South Korea recently said Covid-19 pandemic has had a major impact on meat consumption patterns in that country. The post notes, “Domestic pork, mostly eaten at home, benefited while imports are down as restaurants, primary users of imported pork, are seeing reduced traffic,” adding that a similar pattern is playing out for the beef complex. Cattle producers are expanding production in response, which should moderate prices into 2021, “reducing the scope for imports.” The report expects South Korea to import 530,000 MT of beef in 2020 and 520,000 MT of the meat in 2021, which compares to imports of 550,000 MT in 2019. Swine meat imports are expected to slide from 694,000 MT in 2019 to 580,000 MT in 2020 and 600,000 MT in 2021.

USDA’s Canada livestock and products annual report sees herd contraction in 2021

USDA said in its annual report on Canadian livestock that the Canadian cattle herd and swine herds are both expected to contract in 2021. Cattle exports are forecast to grow, beef exports are projected to increase, and Canada will continue to import US feeder cattle. Canadian pork exports are expected to be steady and the United States will remain as the dominant import/export market for Canadian beef and pork products. Both sectors are vulnerable to COVID-19 pandemic impacts.

Overall the Canadian cattle herd is forecast to further decline in 2021. Despite signals for expansion in recent years, poor pasture conditions in some regions have led to increased cow culling and a lack of heifer retention. However, some growth in the 2021 beef cow herd and calf crop is expected due to reduced cow slaughter, increased heifer retention, and improved pasture conditions. Additionally,

improved pasture conditions, combined with lower fed cattle prices in early 2020, should support heifer retention.

Canada will continue to import U.S. feeder cattle to supplement the Canadian supply. Increased beef exports are expected assuming market conditions continue to improve as COVID-19 related disruptions, especially in food service globally, are assuaged. Beef imports are forecast down as consumption drops slightly and assuming domestic processing disruptions experienced in 2020 are not repeated.

The Canadian swine herd is expected to decline once again in 2021, however there is discussion of some finishing space expansion which should slow the decline. If space materializes, the 2021 pig crop will grow slightly, following growth in 2020 led by fertility improvements. Canadian exports of feeder swine to the United States will grow following reductions in 2020 but will remain below recent years as more finishing space is available in Canada.

Pork exports will remain steady on 2020 gains as African swine fever (ASF) continues to impact pork availability in certain regions. Imports will also remain steady in 2020 as Canada supplements the domestic supply of highly valued cuts with imported products.

However, Canadian pork consumption is expected to continue to decline as other animal proteins and plant proteins compete for limited space on consumer plates.

USDA weekly milk report

FLUID MILK: Milk production across the US is mostly steady and manufacturers are getting the milk needed for processing. But contacts note a slight decrease in milk output in California and in the Southeast. In the West, heat, drought and wildfires are challenging farmers to maintain milk production. And milk loads are moving from the Mid-Atlantic region into the Southeast to fill immediate needs.

Condensed skim offers are increasing. Cream is still widely available following the holiday weekend. Expectations for Q4 cream availability are mixed, with cream suppliers and customers grappling with a myriad of factors as they begin their 2021 contract talks. F.O.B. cream multiples for all Classes are 1.30-1.41 in the East, 1.22-1.36 in the Midwest, and 1.05-1.25 in the West.

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices shifted higher on somewhat steady, if not busier, market activity. High heat NDM prices are unchanged. Although low heat NDM production remains a focus for producers, the fall season has introduced more whole milk and buttermilk production. Dry buttermilk prices and dry whole milk prices are steady. The fall baking demand has begun. Dry whey prices are mixed, with ranges narrowing. Producers report having availability, with current production in good balance with demand. Whey production is active and in line with hearty cheese production. Prices for whey protein concentrate 34% are steady to higher. Some contacts think market activity has picked up, but it is hard to be overly optimistic given the weakness in higher whey protein concentrate markets. The market tone for lactose is stable, but prices are steady to lower. A few lower-priced spot sales appeared briefly on limited volumes.