26 October 2024

14 minute read

By: Jim Wyckoff

North America

Weekly USDA US beef, pork export sales

Beef: Net US sales of 16,700 MT for 2024 were up 19 percent from the previous week and 11 percent from the prior 4-week average. Increases were primarily for South Korea (6,500 MT, including decreases of 400 MT), China (4,600 MT, including decreases of 100 MT), Taiwan (1,800 MT, including decreases of 100 MT), Mexico (1,100 MT, including decreases of 100 MT), and Japan (800 MT, including decreases of 1,800 MT). Net sales of 2,100 MT for 2025 were reported for South Korea (1,400 MT), Mexico (300 MT), Japan (200 MT), Canada (100 MT), and Hong Kong (100 MT). Exports of 16,100 MT were up 5 percent from the previous week and 4 percent from the prior 4-week average. The destinations were primarily to South Korea (4,400 MT), Japan (3,200 MT), China (2,800 MT), Mexico (1,400 MT), and Canada (800 MT).

Pork: Net US sales of 22,200 MT for 2024 were down 42 percent from the previous week and 45 percent from the prior 4-week average. Increases primarily for Mexico (17,000 MT, including decreases of 7,400 MT), China (8,800 MT, including decreases of 200 MT), Australia (4,700 MT, including decreases of 100 MT), South Korea (3,200 MT, including decreases of 4,900 MT), and Canada (1,300 MT, including decreases of 1,200 MT), were offset by reductions primarily for Japan (6,900 MT), Malaysia (2,300 MT), Colombia (1,800 MT), the Dominican Republic (1,600 MT), and Hong Kong (700 MT). Net sales of 1,000 MT for 2025 were reported for South Korea (700 MT) and Australia (300 MT). Exports of 32,100 MT were down 6 percent from the previous week, but up 16 percent from the prior 4-week average. The destinations were primarily to Mexico (11,900 MT), Japan (4,500 MT), China (4,100 MT), South Korea (2,600 MT), and Canada (2,100 MT).

McDonald’s E. coli outbreak investigation continues

McDonald’s has taken Quarter Pounders off the menu in about a fifth of its stores as a precautionary measure as an investigation into the cause of the E. coli outbreak continues. The company has stopped using the slivered onions as well as quarter-pound beef patties in several states – Colorado, Kansas, Utah and Wyoming, as well as portions of Idaho, Iowa, Missouri, Montana, Nebraska, Nevada, New Mexico and Oklahoma – while the investigation continues. According to The U.S. Centers for Disease Control and Prevention (CDC), the beef patties are used only for Quarter Pounders, and the slivered onions are used primarily for the Quarter Pounder and not other items. USDA said it is continuing to verify the safety of ground beef used in Quarter Pounders, indicating a state partner has collected samples from the chain’s ground beef patties for testing. However, USDA echoed the indications from CDC and FDA that slivered onions on the tainted burgers are suspected as the likely source of illnesses.

Brazil to fight deforestation with new cattle-tracking system

Brazil is pressing ahead with plans to track its cattle herds as the world’s largest beef producer contends with international pressure to prevent deforestation caused by commodity production. The Brazilian government is working with the private sector to launch a data platform that will allow meat packers to fully trace their supplies starting in 2027, Agriculture Minister Carlos Fávaro said in an interview at the Bloomberg B20 event in Sao Paulo. That will allow Brazilian beef to be completely traceable by 2032, he said. While companies including JBS SA, Marfrig SA and Minerva SA say they have advanced in monitoring direct suppliers, a government-backed program would allow a more robust tracing of indirect suppliers as well.

USDA’s annual report on EU dairy industry

Note: Effective January 1, 2021, the United Kingdom (UK) completed its exit from the European Union (EU), including trade between both entities. If not indicated otherwise, in this report, the EU refers to the current EU27 and excludes the UK.

In 2025, EU all milk deliveries are forecast to amount to 149.4 million metric tons (MMT), 0.2 percent below the revised 2024 estimate, with a marginal decline in cows’ milk production and stable “other” milk production (primarily from sheep and goats). Low farmer margins combined with environmental restrictions and disease outbreaks among the major producers continue to push some smaller farmers out of production. This trend is expected to result in declining cow numbers in 2025, which will not be fully compensated by increased productivity, leading to marginally lower cows’ milk deliveries in 2025 at 145.3 MMT. In 2024, cows’ milk deliveries are estimated to amount to 145.6 MMT, 0.3 percent above 2023 levels.

EU average farm gate milk prices partially recovered in early 2024 and then stabilized. Fluid milk domestic consumption is expected to continue a declining trend and amount to 23.5 MMT in 2025, down by 0.3 percent. With lower milk production in 2025, factory use consumption is also forecast to minimally decrease by 0.2 percent in 2025. This will require dairy processors to carefully decide for which products they will use the available milk. Cheese production continues to be the primary output goal of the EU dairy processing industry, supported by solid domestic cheese consumption and continued export demand. Despite less milk available, EU27 cheese production in 2025 is still forecast to increase by 0.6 percent over 2024 levels, reaching 10.8 MMT.

Both cheese exports and domestic consumption are forecast to rise in 2025. Increasing consumption could be boosted by growing incomes and economic recovery, paired with recovered hospitality sector and tourism, while exports are benefitting from increasing demand for specialty cheeses. In 2025 cheese exports from the EU are expected to reach 1.4 MMT, an increase of a moderate 0.4 percent, as export growth is expected to be slightly constrained by improved domestic demand in the European Union. EU27 butter production in 2025 is forecast to amount to 2.1 MMT, one percent below the estimated 2024 level, as a smaller milk supply will favor cheese production over butter and non-fat dry milk (NFDM).

Declining butter consumption is expected to support lower production. The trend of consumer health concerns negatively weighing on the demand for butter is expected to continue. In 2024, EU27 butter production is estimated to decrease by 1.4 percent due to an increase of cheese production. However, strong butter prices have arrested some of the shift out of butter to cheese. 2025 EU27 butter exports are forecast to rebound slightly by four percent from 2024, with falling domestic consumption levels allowing for a small export increase. EU27 NFDM production in 2025 is forecast at 1.4 MMT, down by four percent from 2024, as a result of lower milk availability, and expectations that weaker Chinese demand will continue to weigh on global markets.

In 2025 EU27 exports of NFDM are forecast to decrease by 6.8 percent. This follows an estimated six percent export decline in 2024. Domestic consumption in 2025 is estimated at 0.68 MMT, down by 1.4 percent from 2024 level, as a result of slightly lower milk deliveries and cheese production being favored over other dairy products. This should also be prompted by weakening demand from the feed sector, due to an expected reduction in animal numbers. 3 EU27 whole milk powder (WMP) production in 2025 is forecast to amount to 580,000 MT, a decline of five percent from 2024 levels, with lower milk supplies favoring cheese production over other products.

In 2025, EU27 WMP exports are expected to decrease further from 2024 levels, with less demand from China and strong competition from New Zealand in other markets. Simultaneously, the domestic market in 2025 is forecast to decline marginally, with higher prices benefiting the use of WMP alternatives in food processing. From a policy perspective, the EU dairy sector continues to have concerns connected to the implementation of the new Common Agricultural Policy (CAP) and the EU Green Deal initiatives, which the industry feels are negatively weighing on farmers’ decisions to continue production. Strengthening EU environmental and climate mitigation policies could require additional, non productive investments and further erode dairy farming profitability. However, due in part to farmers’ concerns, new provisions are being watered down or their implementation delayed.

In 2025, the impact of the war in Ukraine on production costs is forecast to further weaken. However, the EU continues to support Ukraine, with tariff and quota-free access for Ukrainian agricultural products to the EU market extended until June 5, 2025, but this is having no significant impact on the EU dairy sector.

USDA weakened order to prevent spread of H5N1 in dairy cattle after industry pushback

USDA weakened an emergency order last spring designed to prevent the spread of the H5N1 virus among the nation’s dairy cattle after pushback from state and industry officials, according to state and federal records seen by Reuters. USDA’s order, released in April after H5N1 cases were discovered in cows in eight states, requires milk-producing dairy cattle moving across state lines to secure a negative test no more than seven days prior to travel. It also allows non-producing cattle headed to slaughter to cross state lines without a veterinarian’s clean bill of health. USDA had initially contemplated more stringent requirements, including a three-day time frame for testing, but responded to industry feedback urging leniency before releasing the order, according to documents contained in the records request. Relaxing the order may have enabled more spread of the virus, two veterinarians and one dairy industry representative told Reuters. They noted logistical constraints to testing animals in the shorter window.

Advisory panel's draft dietary guidelines for 2025-2030: plant-focused, limit red meat; industry pushback. The Dietary Guidelines Advisory Committee (DGAC) is responsible for reviewing current nutrition science and providing recommendations for the Dietary Guidelines for Americans, which are updated every five years. The draft report for the 2025-2030 guidelines emphasizes several key dietary recommendations:

•  Emphasize consumption of certain foods: The committee recommends increasing the intake of fruits, vegetables, legumes, whole grains, nuts, and seafood. These foods are associated with numerous health benefits, including reduced risk of chronic diseases such as heart disease and diabetes.
•  Limit certain foods: The draft guidelines suggest limiting the consumption of red and processed meats, refined grains, foods high in saturated fats, and salty snacks. These dietary components are linked to negative health outcomes when consumed in excess.
  
  The committee's approach involves systematic reviews and food pattern modeling to assess the relationship between diet and health across different life stages. Additionally, a focus on health equity ensures that the guidelines are relevant to diverse populations, considering factors like socioeconomic status, race, ethnicity, and culture.
  
  Julie Anna Potts, the president and CEO of the Meat Institute, expressed concerns about the draft recommendations. She described these recommendations as "alarming" and "disappointing," arguing that they contradict some of the Committee's other findings regarding nutritional deficiencies. Potts' criticism likely stems from the guidelines' emphasis on reducing the consumption of red and processed meats, which she believes could lead to nutritional gaps if not properly addressed. The Meat Institute has historically advocated for the role of meat in a balanced diet, emphasizing its nutritional benefits. Potts' comments reflect a broader industry concern that reducing meat consumption could overlook the importance of meat as a source of essential nutrients, such as protein, iron, and B vitamins. The guidelines' focus on plant-based foods and limiting red meat may be seen by industry representatives as potentially neglecting these nutritional aspects.

Bird flu suspected in four Washington farm workers

The Centers for Disease Control and Prevention deployed a team to Washington state to assess the health of farm workers who culled poultry suffering from bird flu after four workers are presumed to have been infected by the virus, U.S. and state health officials said on Monday. The infections would make Washington the sixth state to identify human cases this year. The four tested presumptively positive after working at an infected egg farm, Washington's health department said. The workers suffered mild respiratory symptoms and conjunctivitis (pink eye).

USDA’s new poultry payment rule sent to OMB for review

USDA has submitted a final rule on poultry grower payment systems and capital improvements to the Office of Management and Budget (OMB) for review, with release expected in November. The rule aims to address payment disparities and transparency concerns in poultry production. The final rule would propose amendments to address what USDA labels “certain problematic practices related to poultry grower payment systems and capital improvement programs” including “payment disparities and reductions that are unconnected to commoditized flock performance, and transparency concerns related to additional capital investments in poultry production facilities and equipment.” However, with the presidential election nearing, a potential Republican administration could alter or halt its implementation.

China’s pork imports plunge in September amid falling consumer demand

China imported 100,000 MT of pork during September, half of the volume from August and 1.4% less than last year. Through the first nine months of this year, China imported 800,000 MT of pork, 37.3% less than the same period last year. Meanwhile, China’s pork production slipped 0.8% in the third quarter to 12.59 MMT, falling on an annual basis for a third consecutive quarter as poor meat consumption hampered slaughter rates. For the first nine months of the year, pork production fell 1.4% to 42.4 MMT. Meat demand has slowed in China, with shoppers tightening their belts to cope with a sluggish economy. Farmers slaughtered 520.3 million hogs during the first nine months of the year, down 3.2% from a year earlier. China’s pig herd at the end of September was down 3.5% from the previous year to 426.94 million head.

Weekly USDA dairy report

CME GROUP CASH MARKETS (10/18) BUTTER: Grade AA closed at $2.6600. The weekly average for Grade AA is $2.6410 (-0.0200). **Updated** CHEESE: Barrels closed at $2.0100 and 40# blocks at $1.9250. The weekly average for barrels is $1.9370 (+0.0480) and blocks $1.9220 (-0.0020). NONFAT DRY MILK: Grade A closed at $1.3800. The weekly average for Grade A is $1.3590 (+0.0050). DRY WHEY: Extra grade dry whey closed at $0.6025. The weekly average for dry whey is $0.5970 (-0.0030).

BUTTER HIGHLIGHTS: In the East region, retail butter demand is steady, while food service demand is lighter. In the Central region, busy retail demand is meeting expectations, and food service demand is comparatively lighter. In the West, butter demand varies from steady to lighter for both sectors. Export demand is stronger. Cream volumes are widely available throughout the country. For the Central region, flat market cream multiples were reported. Butter churning paces are noted as strong or steady across the nation. Bulk butter overages range from 1 to 8 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese production remains variable throughout the U.S. Cheese production is noted to be steady in the East. Spot milk loads have become more available than in recent weeks. Demand from both food service and retail customers is steady. Cheesemakers in the Midwest report mixed production schedules and mixed demand. Some contacts say retail orders are strong, while others relay seasonally quiet demand. Spot milk prices range from at Class to $2.50 above Class. Contacts in the West say cheese production is trending steady to stronger. Some cheesemakers say they are requesting additional spot milk loads from handlers. Mozzarella demand remains strong in the region.

FLUID MILK HIGHLIGHTS: Milk production varies throughout the country. In the Northeast, farm level milk production is seasonally steady. Even with interruptions, steady milk levels are being reported in the Mid-Atlantic and Southeastern states. Cooler temperatures are improving cow comfort in the Central region where farm level milk output is rising slightly. Steady to stronger numbers are being seen in Southwest, Pacific Northwest, and the mountain states. Higher temperatures and issues with heard health are reported as the main contributors to weaker output in California. Class I demand for milk continues to be strong far into the school year. Spot milk prices ranged from Class III to $2.50 over-Class this week. Class II and III demand is steady, and cheese makers say they are pleased with current milk availability. Demand for cream is weaker, and multiples are moving lower in all regions as abundant spot loads find available end users for processing. Condensed skim milk loads are widely available. Condensed skim milk demand is steady. Cream multiples are 1.25 – 1.35 in the East, 1.00 – 1.32 in the Midwest, and 1.08 – 1.26 in the West.

DRY PRODUCTS HIGHLIGHTS: Low/medium heat nonfat dry milk (NDM) prices were steady to lower in all regions. Lighter Mexican demand is being reported from Western contacts, while Central/East region contacts suggest rangebound tones. Dry buttermilk prices were unchanged in the Central/East, as production is focused on contractual need. Dry buttermilk prices were mixed in the West, where production is steady. Dry whole milk prices were steady to lower this week following light demand outside of contracts. Dry whey prices were steady to higher nationwide. Dry whey remains in tight supply as processors continue to focus resources on high protein concentrations. Lactose prices moved higher on continued strengthening carbohydrate markets. Whey protein concentrate 34% prices also continued their recent and noticeably bullish run. Rennet and acid casein prices held steady on quiet trading activity outside of contractual exchanges.

ORGANIC DAIRY MARKET NEWS: The USDA's National Organic Standard Board (NOSB) is meeting in Portland Oregon October 20 - 22. The USDA AMS NOP Organic Insider sent out on November 15 discussed the upcoming NOSB meeting and noted the NOP Fall 2024 NOSB update presentation is available in the Organic Integrity Learning Center. The USDA recently announced $11.04 million in funds have been provided through the DBI to support dairy businesses and producers. The Department of Energy's Argonne National Laboratory recently published a report regarding new technology which can convert dairy wastewater into biofuel and greatly reduce carbon emissions in jets. The number of organic retail dairy ads declined in this week's survey. The most advertised organic dairy commodity was milk, despite appearing in fewer ads than in week 41. Cheese was the 2nd most advertised organic dairy commodity this week, jumping from 4th place last week. Cream cheese and flavored milk were the only organic dairy commodities not present in this week's survey, despite appearing in the week 41 survey.

US NATIONAL RETAIL REPORT: Total dairy advertisements decreased for conventional and organic items in the week 42 retail ad survey. The most advertised conventional dairy commodity this week was cheese, despite appearing in fewer ads than in week 41. Meanwhile, the number of organic cheese ads grew from last week. The conventional dairy commodity which had the largest percentage increase of ad appearances from the previous survey was eggnog. Conventional yogurt overtook ice cream as the 2nd most advertised conventional dairy commodity in week 42. Total conventional and organic ice cream ads declined in this week’s survey.