USDA Chief discusses US drought impact on meat prices

USDA Sec. Tom Vilsack said Wednesday he is concerned about the effect of drought on US meat prices that are already rising. Vilsack at the White House said that meat prices are already on the rise and could go higher due to a prolonged drought in western states. That is why USDA is expanding its help for producers in drought-stricken areas to cover feed transportation costs for livestock that rely on grazing. USDA is updating its Emergency Assistance for Livestock Honey Bees and Farm-raised fish Program (ELAP) to cover those costs for drought impacted ranchers. Vilsack said the move should provide some relief soon as ranchers make their herd management decisions for fall and winter. Producers will be able to apply for the feed transportation assistance later this month through their local Farm Service Agency offices.

“USDA is currently determining how our disaster assistance programs can best help alleviate the significant economic, physical and emotional strain agriculture producers are experiencing due to drought conditions,” said Vilsack. “The duration and intensity of current drought conditions are merciless, and the impacts of this summer’s drought will be felt by producers for months to come. Today’s announcement is to provide relief as ranchers make fall and winter herd management decisions.”

White House: Meatpacker consolidation raising grocery bills

The Biden administration is taking aim at major meat packers, saying they’ve squeezed consumers and farmers while recording record profits. In a blog post published Wednesday, three senior economic aides to President Joe Biden said consolidation in beef, pork, and poultry processing has raised prices and hurt consumers. “The meat-processors are generating record profits during the pandemic, at the expense of consumers, farmers, and ranchers,” the blog authors, including National Economic Council Director Brian Deese. “Absent this corporate consolidation, prices would be lower for consumers and fairer for farmers and ranchers.”

Price increases for those meats make up half of the rise in food prices since late 2020, they said, fueling inflation that has generated political pressure on Biden. The administration is pressing Congress to make cattle markets more transparent.

The Justice Department is investigating big meatpacking companies to determine whether they are violating antitrust laws. The probe started in the last year of the Trump administration, and the Biden administration is pushing forward, with plans to issue additional civil investigative demands, according to a person familiar with the matter.

South Korea chicken production to rise

USDA this week said production In 2022, Korea’s chicken production is projected to increase by 3.2 percent to 965,000 MT due to the following factors: 1) Parent stock (PS) broiler numbers increased by 6.3 percent during the first six months of 2021 which will increase chicken production over the next 12 months; 2) Strong farm gate chicken prices throughout 2021 due to reduced chicken supply following an HPAI outbreak during the last winter and spring season (2020 – 2021) and it will increase the chicken supply during the first half of 2022. In 2021, the average farm gate chicken price during the first six months increased by 32 percent from the previous year; 3) As the Covid-19 vaccination rate increases, chicken demand will be rise with resumption of more normal economic activity including various outdoor events, with fewer restrictive social distancing rules at restaurants; 4) A series of major sports events that will drive extra demand such as 2022 Winter Olympic Games, 2022 Summer Asian Games, and the World Cup in November and; 5) Continued competition between vertically integrated chicken companies to increase market share by building new slaughtering facilities.

Brazil poultry output seen up slightly

USDA has forecast poultry production in Brazil at 14.72 million tons in 2022, growing three percent due to strong external demand and increased domestic consumption, both of which reached historical records this year. Consumption for 2022 is forecast at 10.54 million tons, growing three percent. Brazil is the world’s largest exporter of chicken meat and Post forecasts a three percent increase for 2022, with total exports at 4.17 million tons. In 2021, chicken exports rose five percent. Overall, exports are expected to remain at just over a quarter of total production, with China being the top destination for Brazil’s poultry. Poultry prices were affected by the rapidly rising input costs, which increased close to 40 percent in the past 12 months.

China meat imports slow in August

China imported 758,000 MT of meat (including offal) in August. That was down 11.2% from July and 8.9% compared with August 2020. In the first eight months of this year, Chinese meat imports totaled nearly 6.7 MMT, up 1.7% versus the same period last year.

US beef group calls on Biden administration to remain vigilant on Brazilian beef

The discovery of two positive atypical BSE cases in Brazil prompted the US National Cattlemen’s Beef Association (NCBA) to issue a statement calling on USDA and the Office of the US Trade Representative (USTR) to “remain vigilant in enforcing our standards,” said NCBA CEO Colin Woodhall, pointing out that it was key to hold Brazil “accountable.” Emphasizing the cases in Brazil pose no threat to the US or to US beef, Woodhall said it was key for USDA to “to examine Brazil and to continue implementing science-based safeguards that ensure all imported beef meets the same rigorous science-based food safety and animal health standards as American beef.”

USDA: Canada chicken production seen up in 2022

USDA estimates 2021 chicken meat production at 1.36 MMT, up over 4 percent from 2020, and above the 2019 production level. In addition to strong chicken sales at retail, the quick-service restaurant channel has shown a robust recovery and became the driver behind growth in food service activity following the significant decline due to the COVID-19 pandemic lockdowns and restrictions.

Australia beef industry seen recovering next year

USDA reports Australian beef supply is forecast to begin to recover in 2022 after falling to the lowest level in decades in 2021. Low female slaughter rates in 2021 marked the onset of a herd rebuild following a severe multi-year drought and this herd rebuild is set to continue into the forecast year. Cattle slaughter, beef production and beef exports are also expected to rise in 2022, although remain below pre-drought levels (and far below peaks reached during the drought). Most cattle producers have experienced great pasture conditions since the onset of drought-breaking rains in early 2020 and also benefited from record cattle prices, which has boosted confidence to forge ahead with a strong herd rebuild.

New Zealand beef production expected down a bit

USDA has forecast New Zealand beef production to fall slightly in 2022, following two straight years of record production. This is a result of less anticipated slaughter, especially of heifers and steers. In addition, lower carcass weights are also expected. As a result of smaller beef production, exports are also forecast to fall from the records set in 2021 and 2020.

USDA: Ukraine livestock numbers down

USDA reports that while the total number of Ukrainian livestock remained on its downward trend in 2021, the swine herd exhibited some signs of recovery after low prices and low production in 2020. Both trends are expected to continue in 2022. African swine fever remains a threat, although the number of registered outbreaks decreased significantly. The consumption of pork is recovering, while the consumption of beef continues to decrease as Ukraine’s export markets offer better prices for both live cattle for slaughter and beef. However, both exports are forecast to decline in 2021-22 due to lower livestock inventory. Pork imports are expected to grow, inspired by increased demand due to growing incomes and the slow reaction of domestic producers.