Weekly protein digest: beef exports from US decline while the dairy industry gains ground

Jim Wyckoff's latest beef and dairy update tracks decreasing beef exports from the United States and the impacts of Spain's recent COVID-19 spike.
calendar icon 9 October 2020
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Jim Wyckoff Commentary -  TheCropSite

United States beef export update

US beef net sales of 20,700 metric tonnes reported for 2020 were down 16 percent from the previous week, but up 14 percent from the prior 4-week average.

Increases were primarily for South Korea (5,800 MT, including decreases of 500 MT), China (4,100 MT), Japan (3,700 MT, including decreases of 1,400 MT), Hong Kong (3,100 MT, including decreases of 200 MT), and Taiwan (1,100 MT, including decreases of 100 MT).

For 2021, net sales of 2,200 MT were primarily for Japan (1,400 MT) and Canada (500 MT). Exports of 16,900 MT were up 2 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Japan (4,500 MT), South Korea (3,800 MT), Hong Kong (1,600 MT), China (1,500 MT), and Taiwan (1,400 MT).

US beef exports decline in August

The US exported 109,752 MT of beef during August, a 4.5 percent slide from year-ago, with the value of that meat at $673.8 million, down 2 percent from year-ago but the highest since March, according to USDA data compiled by the US Meat Export Federation (USMEF).

USMEF also points out that record-setting demand in South Korea and Taiwan helped push beef muscle cut exports to 89,148 MT, a 3.5 percent gain from last year and the highest figure in more than a year. Eight months into the year, overall beef exports stand at 808,659 MT valued at $4.95 billion, down 8 percent and 9 percent, respectively, from year-ago.

Global beef industry updates

World food prices continue to rise

World food prices rose for a fourth month running in September, led by strong increases for cereals and vegetable oils, the United Nations food agency said on Thursday 8 October.

The Food and Agriculture Organisation's food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 97.9 points last month versus a downwardly revised 95.9 in August.

The Rome-based FAO also said in a statement that worldwide cereal harvests remained on track to hit an annual record in 2020, even though it slightly trimmed its previous forecasts.

German meatpacking plant forced to close amid COVID-19 outbreak

A German abattoir hit with an outbreak of COVID-19 has been ordered to close. The Weidemark plant in northern Germany that is owned by Toennies has had 112 of its roughly 2,000 workers test positive for the virus. The plant will end slaughter on Friday 9 October and packing on Sunday 11 October and then close for 22 days, according to a regional authority.

The news reminds of fears about another wave of problems at US packing plants, though industry executives say new safeguards should prevent that from happening.

Spain livestock analysis from USDA

USDA this week reported the temporary closure of hotels and restaurants in response to COVID-19 lowered domestic demand for high-end meats and slashed prices for meat products such as suckling piglets, Iberico products, high-valued beef cuts, and chicken.

In 2020, the availability of domestic meat supplies and lower tourism will likely lower Spain's overall imports of meat. This year, Spanish exports of pork and live cattle may be the driver to alleviate the loss in sales to the hospitality sector. Spanish exports of live cattle for slaughter grew 52 percent mainly to other EU countries and the Middle East. 

USDA weekly US dairy report

Fluid milk and cream

Milk is plentiful in the Northeast. Mid-Atlantic milk is balanced. Southeast milk production is slightly picking up. Florida milk production is climbing a bit. Class I sales are moderately steady. The Midwest narrative on milk production remains similar to previous weeks, but contacts expect some stronger upticks in the upcoming weeks with cooler weather in all parts of the region. Milkfats are up, while protein levels have slipped, according to some farmers and that has been a continuation for most of this year.

In general, Class I perked up as more kids are in school or are expected to be in school soon. Spot milk trading into cheese plants was quiet. Spot milk prices ran from Class to $1.50 over, which is the same range as the last two years during week 40.

A large majority of cheesemakers are getting their production needs met via contracted supplies. A few more plants have started production after a week, or more, offline, due to updates and/or maintenance. California milk outputs are steady to up compared to the prior week.

Class I sales remain steady. Class II sales have declined. Processing plants are being run a bit below full capacity. The market tone is steady. Arizona milk outputs are within seasonal norms. Milk supplies and sales are in good equilibrium. Milk holdovers are higher in New Mexico because a few large dairy processing plants are working on annual maintenance projects and couldn't take as many loads of milk as they usually do.

Manufacturing facilities are being run at full capacities. Milk production has increased. Pacific Northwest milk production continues at a steady pace. Manufacturers report milk and cream supplies are adequate for most processing needs without any surprises.

Strong and steady describes milk production in the mountain states of Idaho, Utah, and Colorado. Warm days and cool nights are setting up almost perfect cow comfort weather. While fires are still a concern along the West Coast, air quality in the mountain states has improved from several weeks ago. Milk volumes are plentiful, and manufacturers are running at capacity.

Cream demands are growing in the East and Midwest but declining in the West. F.O.B. cream multiples are 1.3000 - 1.4000 in the East, 1.2800 - 1.3500 in the Midwest, and 1.0500 - 1.2600 in the West.

Dry products

Low/medium heat non-fat dry milk (NDM) shifted noticeably higher on firmer markets in all regions. Central and East dry buttermilk powder prices inched up on the top of the range. Western free on board spot prices for dry buttermilk are higher on the range, but mixed on the mostly series.

This week, the national free on board spot prices for dry whole milk are mixed as a few trades pulled down the bottom price of the range, but the top remained unchanged. Dry whey prices shifted up in most facets in the Central region. Dry whey prices are higher on the top of the range. In the West, fob prices for dry whey are trending up on both ends of the range and at the bottom of the mostly series. The whey protein concentrate 34 percent price range is unchanged, but the mostly price series narrowed.

Lactose prices are steady to lower. The top of the price range and the bottom of the mostly price series moved down slightly this week. Acid and rennet casein prices are steady.

Organic dairy market news

Federal Milk Market Order 1, in New England, reports utilisation of types of organic milk by pool plants. During August 2020, organic whole milk utilisation totalled 12.1 million pounds, sinking from 16.2 million -pounds in 2019.

The August 2020 butterfat content was 3.29 percent, up from 3.27 in August 2019. The utilisation of organic reduced fat milk in August this year, 12.6 million pounds, decreased from 15.6 million pounds a year earlier. The August 2020 butterfat content for organic reduced fat milk, 1.41 percent, declined from 1.42 percent the previous year.

September 2020 in-store surveys of supermarkets in selected US cities show that prices for organic whole milk in the half gallon container ranges from $3.13 in Atlanta, GA, to $5.84 in Pittsburg, PA.

Surveyed cities that experienced noteworthy changes in prices from August 2020, included Atlanta, GA, down 14 cents; Minneapolis, MN, down 25 cents; and New Orleans, LA, down 70 cents. Denver, CO was the only city to post an increase in the organic whole milk half gallon price, up 10 cents. The

US September 2020 simple average price was $4.09, down 4 cents from last month. Overall, organic milk retail prices trend steady to lower.

National retail report (DMN)

Conventional retail advertisements, on the whole, increased by 21 percent from last week. Organic ads decreased by 43 percent. Conventional shred cheese, in eight ounce packages, was the most advertised item. Milk, in gallon containers, was the most advertised organic item this week.

Conventional milk advertisement numbers jumped by 234 percent week to week, while organic bottled milk ads decreased 29 percent. The weighted average price for conventional half gallon milk containers is $2.65, compared to $4.01 for organic half gallons. This equates to an organic premium of $1.36.

Conventional cheese advertisements grew 15 percent week to week. There were no organic cheese advertisements reported this week. Cheese, in eight ounce blocks, held a weighted average price of $2.41, two cents below last week's price.

Yogurt advertisements, on the conventional aisle, increased by six percent, while organic yogurt ads grew 1 percentage point. Conventional Greek yogurt, in four to six ounce containers, was the most advertised yogurt item this week, with an average price of $.92.

Read Jim Wyckoff's analysis of the poultry market on The Poultry Site and his update on the global pig industry on The Pig Site

TheCattleSite News Desk

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