15 November 2024

8 minute read

By: Jim Wyckoff

North America

Asia

Bankrupt poultry supplier highlights challenges in Biden’s meatpacking initiative

The Biden administration's effort to boost competition in the meatpacking industry faces significant challenges, exemplified by the bankruptcy of Pure Prairie Poultry, a recipient of USDA support. As the Wall Street Journal reports, the USDA-backed startup, intended to disrupt industry giants like Tyson and Cargill, declared bankruptcy, leaving 1.3 million chickens unfed. USDA Secretary Tom Vilsack defended the broader initiative, while critics like Iowa’s Agriculture Secretary Mike Naig and Senator Chuck Grassley (R-Iowa) have questioned oversight and effectiveness. The program’s delays and market challenges have raised doubts about its potential impact.

Costco issues voluntary recall for nearly 80,000 pounds of Kirkland Signature butter due to a labeling error

Details:

• Continental Dairy Facilities Southwest LLC initiated the recall in October 2024.
• The recall affects approximately 79,200 pounds of Kirkland Signature butter.
• The issue is that the packaging may not include the required "Contains Milk" allergen statement, even though cream is listed as an ingredient.

Affected products:

• 46,800 pounds of Kirkland Signature Unsalted Sweet Cream Butter
• 32,400 pounds of Kirkland Signature Salted Sweet Cream Butter
• The butter was distributed in Texas
• Best-by dates range from February 22, 2025, to March 29, 2025
  
  

FDA classification: On Nov. 7, the FDA classified this as a Class II recall. This classification indicates potential for "temporary or medically reversible adverse health consequences" and the probability of serious adverse health consequences is considered remote.

Customers with milk allergies or sensitivities who purchased the affected butter should discard it or return it to Costco for a refund. For those without milk allergies, the butter is safe to consume as the recall is not related to any foodborne illness concerns.

The recall has sparked some amusement online, with many people pointing out the irony of needing to label butter as containing milk. However, it also underscores the seriousness with which food safety regulations treat allergen labeling to protect consumers with severe allergies.

Canada detects first presumptive human H5N1 bird flu case

The Public Health Agency of Canada (PHAC) confirmed a human case of avian influenza (also known as bird flu) caused by influenza A (H5N1) virus in Canada. This is the first domestically acquired human case of H5N1 avian influenza in Canada.

On Saturday, November 9, the Office of the Provincial Health Officer for British Columbia reported that a teenager in the western province of British Columbia was hospitalized and tested presumptive positive for H5 avian influenza. Local reports indicate that the teen is in critical condition.

On November 13, the Public Health Agency of Canada's National Microbiology Laboratory (NML) in Winnipeg confirmed that the individual has avian influenza H5N1 and the genomic sequencing result indicates that the virus is related to the avian influenza H5N1 viruses from the ongoing outbreak in poultry in British Columbia (Influenza A (H5N1), clade 2.3.4.4b, genotype D.1.1). The teen has not had direct contact with poultry or wild birds, but an investigation in underway. 

Global food commodity prices surged to an 18-month high in October

The UN FAO Food Price Index rising 2% from September to 127.4, marking a 5.5% increase from a year earlier but still 20.5% below the March 2022 peak. Key drivers included a 7.3% rise in vegetable oil prices, attributed to production concerns for palm, soybean, sunflower, and rapeseed oils. Cereal prices rose 0.9% due to higher wheat and corn costs, while sugar prices jumped 2.6% amid a challenging 2024/25 production outlook. Dairy prices also climbed 1.9%, contributing to the index’s three-month upward trend since its February low.

Beyond Meat cuts revenue outlook amid reduced demand for costly meat alternatives

Beyond Meat lowered its annual revenue forecast to a range of $320 million to $330 million, down from a previous upper range of $340 million. The company attributed the cut to reduced consumer spending on more expensive plant-based products as shoppers opt for cheaper alternatives. Quarterly sales volumes dropped by 7.1% compared to a 3.5% increase in the same period last year. Beyond Meat plans to restructure its balance sheet in 2025 and boost cash reserves, reflecting challenges in the alternative protein market amid changing consumer spending habits.

CAFO (concentrated animal feeding operation) ban defeated in California

By a nearly 6-to-1 margin, voters in California’s Sonoma County defeated an effort to limit the size of livestock farms and phase out operations that exceeded the limits.

China's gov’t officials have been actively encouraging large hog producers to reduce their reliance on soybean imports

Particularly soybean meal used in animal feed. This initiative is part of a broader strategy to decrease China's dependence on imported soybeans and improve food security.

China’s meat imports continue to slow

China imported 535,000 MT of meat during October, down 1.1% from September and 3.1% less than year-ago. Through the first 10 months of this year, China imported 5.475 MMT of meat, down 12.5% from the same period last year.

Weekly USDA dairy report

CME GROUP CASH MARKETS (11/8) BUTTER: Grade AA closed at $2.6500. The weekly average for Grade AA is $2.6675 (-0.0220). CHEESE: Barrels closed at $1.7675 and 40# blocks at $1.7200. The weekly average for barrels is $1.8135 (-0.0690) and blocks $1.7680 (-0.1045). NONFAT DRY MILK: Grade A closed at $1.3875. The weekly average for Grade A is $1.3880 (+0.0075). DRY WHEY: Extra grade dry whey closed at $0.6300. The weekly average for dry whey is $0.6200 (+0.0150).

BUTTER HIGHLIGHTS: East and Central region stakeholders indicate retail butter demand is steady, while food service butter demand is lighter. West region stakeholders indicate retail demand varies from steady to stronger, while food service demand varies from steady to lighter. Cream volumes are widely available throughout the country. In some cases, butter plant managers note spot loads have been turned away despite 2024 early November cream multiples being lower than 2023 early November cream multiples. Butter production paces are mixed. Although loads are generally readily available, a few manufacturers convey a two-week lead time for delivery of orders. Bulk butter overages range from 1 to 8 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production is mixed throughout the U.S. In the East, cheese plant managers relay steady production schedules. Milk availability remains somewhat tight. Regional cheese inventories are steady to lighter. Cheesemakers in the Central region relay spot milk prices ranging from $0.50 to $3.00 above Class III. Some cheesemakers relay seasonally slower production schedules, while others relay active production. Spot milk availability remains tight in the West, but plant managers say milk volumes are adequate to match current steady to stronger cheese manufacturing.

FLUID MILK HIGHLIGHTS: Farm level milk output varies across the country. Volumes in the Northeast are steady in recent weeks, but weather conditions have limited milk production growth in the southern parts of the East region. Stable milk production is supported by mild weather conditions over the Central region. Recent rains in the Upper Midwest have slowed field work, but corn and soybean harvests are ahead of previous years’ rates. Meanwhile, Western milk producers are seeing stronger production levels week to week. Class I demand is still strong across the country, well into the school year. Class III demand for milk is strong, and processors are pointing to snug supplies as a result. Cheesemakers are paying between $.50-over to $3-over Class III for spot milk. Cream spot loads are highly available across the country. Some butter producers are turning away spot loads in efforts to not overbuild inventories. In the East, cream is moving into other classes as packaged heavy cream, cream cheese, and aerated cream production increases ahead of the holidays. However, cream cheese production has yet to take off in the Central and West regions. Cream multiples for All Classes range 1.20-1.36 in the East, 1.00-1.28 in the Midwest, and 1.00 1.26 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk prices edged up throughout the country. Contacts say demand tones are not robust, but supplies have become somewhat limited, and current buyers are typically getting recently produced volumes. High heat NDM prices shifted higher in the West. Dry buttermilk prices were steady across all regions. Similarly to NDM, contacts’ notes on dry buttermilk is that supplies have become lighter in recent weeks. Dry whey prices are steady to higher in the Midwest and unchanged in the East and West regions. Dry whey supplies are notably tight, and some contacts relay having bullish expectations for the rest of the year. Lactose prices were mixed. Whey protein concentrate 34% prices moved higher, as the entirety of the whey complex is continuing to firm. Dry whole milk prices ticked higher on limited availability, but steady demand. Acid and rennet casein prices were unchanged on generally quiet market activity outside of contracts.

INTERNATIONAL DAIRY MARKET NEWS

WEST EUROPE: Milk production remains variable throughout West Europe. In Germany, milk deliveries are still down slightly year over year. Both Ireland and the United Kingdom are seeing year over year increases in milk production. Contacts continue to share overall milk supplies have been tight for an extended period, which continues to affect production and, therefore, availability and pricing of various dairy commodities. Similarly to the United States, herd sizes in West Europe are smaller than in previous years.

EAST EUROPE: The European Commission reports the Combined Drought Indicator (CDI) shows warning drought conditions in eastern Poland, Belarus, central-eastern Ukraine, and southern Russia. Drought watch conditions have improved somewhat in pockets of eastern Europe. The Ministry of Agrarian Policy and Food of Ukraine reported wheat and barley harvesting has ended. Russian butter prices have risen sharply since December 2023. Butter imports from Belarus are not enough to sustain current demand, and the Russian government reportedly is slated to import butter from Turkey, the United Arab Emirates, Iran, and India.

OCEANIA: AUSTRALIA: According to Dairy Australia, September 2024 milk production, 812.5 million liters, was up 1.4 percent from September 2023. September 2024 milk production was up from the prior year in New South Wales, Victoria, and South Australia. Meanwhile, milk production was down in Queensland, Western Australia, and Tasmania. Milk production from the start of the season in July 2024 through September 2024, 2,073.5 million liters, increased 1.9 percent compared to the same time frame a year earlier.

NEW ZEALAND: Standards for herd testing in New Zealand, which provided data on milk production, animal health, and genetic traits, have recently been updated. In New Zealand roughly 80 percent of dairy cows are tested annually. The herd testing standards were recently updated to provide more accurate animal evaluations by introducing changes to animal recording and production data. A spokesperson for DairyNZ's New Zealand Animal Evaluation Limited stated the standards, which were last updated in 2015, provide good guidance for testers, but updates were necessary to include new technology and provide high-quality data for animal evaluation.