USDA: Avian influenza returns to Hungary

Hungary regained its avian influenza free status on June 10, 2021, but the disease is now back in the country. On November 16, 2021, animal health authorities confirmed the outbreaks of the H5N1 strain of the highly pathogenic avian influenza (HPAI) at two commercial duck and goose operations in south central Hungary. Control measures are currently in place. However, further cases are expected around the affected localities and in the neighboring counties.

US pork, beef export sales improve in latest week

On Thursday USDA reported US pork net sales of 41,400 MT for 2021 were up noticeably from the previous week and up 48 percent from the prior 4-week average. Increases were primarily for Mexico (19,600 MT, including decreases of 600 MT), China (12,400 MT, including decreases of 300 MT), Japan (3,700 MT, including decreases of 100 MT), South Korea (1,600 MT, including decreases of 200 MT), and Colombia (1,100 MT, including decreases of 100 MT). Net sales of 4,100 MT for 2022 were primarily for South Korea (1,500 MT), Canada (1,300 MT), Chile (400 MT), Colombia (300 MT), and Mexico (200 MT). Exports of 36,500 MT were up 26 percent from the previous week and 13 percent from the prior 4-week average. The destinations were primarily to Mexico (19,800 MT), Japan (4,700 MT), South Korea (3,200 MT), China (3,100 MT), and Colombia (1,900 MT).

US beef net sales of 21,600 MT for 2021 were up 12 percent from the previous week and 5 percent from the prior 4- week average. Increases primarily for South Korea (10,700 MT, including decreases of 3,100 MT), China (3,300 MT, including decreases of 300 MT), Japan (2,900 MT, including decreases of 800 MT), Mexico (2,000 MT), and Chile (900 MT), were offset by reductions for Italy (100 MT) and Thailand (100 MT). Net sales of 10,400 MT for 2022 primarily for South Korea (7,000 MT), Japan (2,200 MT), Vietnam (300 MT), Taiwan (300 MT), and Hong Kong (200 MT), were offset by reductions for China (100 MT). Exports of 16,500 MT were down 9 percent from the previous week and 6 percent from the prior 4-week average. The destinations were primarily to South Korea (4,500 MT), Japan (4,000 MT), China (3,000 MT), Taiwan (1,500 MT), and Mexico (1,200 MT).

UN: World food prices on the rise

The food price index from the UN Food and Agriculture Organization (FAO) climbed another 1.2% in November and was 27.3% above year. This marked the fourth consecutive monthly rise in the index, pushing it to the highest level since June 2011. Among the sub-indices, prices for cereals (up 3.1%) and dairy (up 3.4%) rose most significantly, followed by sugar (up 1.4%), while meat (down 0.9%) and vegoils (down 0.3%) prices declined slightly from October.

Potential lock out at Canada beef processing plant

Cargill last week issued a lockout notice to workers at one of Canada’s largest meat-packing plants last week after unionized workers at the High River facility voted overwhelmingly against the company’s latest contract offer, putting them in a position to strike as early as Dec. 6. The plant accounts for roughly 40% of Canada’s beef processing capacity, processing about 4,500 head of cattle daily.

US pork exports to Mexico show promise

USDA reports Mexico is the third-largest pork importer in the world and traditionally the largest U.S. market for pork exports by volume. Over the past few years, shipments to this important market have faced headwinds. First, retaliatory tariffs related to Section 232 actions disadvantaged U.S. product. Then the coronavirus pandemic and a weak Mexican economy weighed on demand.

With retaliatory tariffs on pork resolved and economic recovery underway, U.S. pork shipments to Mexico recovered in 2021 and are expected to improve further next year. In the second quarter of 2021, Mexico was the top international destination for U.S. pork, with shipments reaching a record high in August and again in September. With Mexican exports elevated and high feed prices keeping production growth moderate, Mexico has looked to the United States for product and will likely continue to do so. This comes at a critical juncture for the U.S. pork industry as Chinese demand is expected to remain below the record levels of 2020, renewing emphasis on traditional markets.

US Senator wants milk pricing reforms

Reforms to US milk pricing formula in federal marketing orders is the thrust behind a proposal being introduced by Sen. Kirsten Gillibrand (D-N.Y.) It would require USDA to hold hearings on reforms. Gillibrand scheduled a news conference on the issue today and has support from Vermont Democratic Sen. Pat Leahy and Maine Republican Susan Collins. But contacts note there is no consensus within the industry on this topic and leadership will be reluctant to move a measure in this Congress without widespread support. Also, a hefty amount of pandemic aid to dairy producers and a recent uptick in prices have tempered any push for policy changes.

Concentration in China’s pork production

Only 108 companies have 25% of China's swine production capacity, according to a list prepared for a recent swine industry forum. The list of companies with at least 10,000 sows was compiled for the 7th China swine industry summit based on company financial reports, industry news, and unpublished sources. The combined sow inventory of the 108 companies as of October-November 2021 was 11.79 million head. That's about a fourth of the 44.79-million-head national sow inventory reported by the China National Bureau of Statistics' as of the end of September.

Says Dims Sums: “Unpredictable gyrations in China's hog market continue with the influx of big pig farmers, contrary to the expectations of agricultural officials. Pigs have historically been scattered across millions of backyard pens, sheds, and living rooms in Chinese villages. At the peak of backyard pig-farming, China's 1997 agricultural census counted over 130 million rural households raising pigs — usually one or two at a time — and those small family holdings accounted for 95 percent of the swine inventory. In recent years a handful of companies have been on a hog-farm construction binge. Their expansion accelerated during a 2014-17 environmental regulatory push that shut down hundreds of thousands of small farms. Then the African swine fever epidemic wiped out millions more of small farms, biosecurity requirements and a new round of subsidies favored big companies, and ‘pig concept’ stocks became fashionable, attracting billions of dollars of capital investment.”