Weekly global protein digest: product bans, Prop 12, NMPF policy

Livestock analyst Jim Wyckoff shares this week's protein highlights.
calendar icon 6 August 2021
clock icon 9 minute read
Jim Wyckoff Commentary -  TheCropSite

China suspends meat imports from a Brazil processing plant

China has reportedly banned meat imports from the food processor BRF SA’s Lucas Rio Verde plant located in central Brazil, the company said in a statement yesterday. The plant processes pork and chicken. The company said it would take steps to reverse the ban, working in conjunction with Chinese and Brazilian authorities, but it did not disclose what the holdup was. BRF did say that it was not officially notified of the ban and only learned of the suspension when it appeared on China’s customs website.

Tyson Foods to require Covid vaccinations for its US workers

Tyson said it would offer a $200 bonus to its front-line workers as an incentive, though some union leaders pushed back, saying U.S. regulators hadn’t yet fully approved the vaccines. Tyson announced Tuesday it will require its workforce to be vaccinated for Covid but is getting pushback from the United Food and Commercial Workers International (UFCWI) union.

"We did not take this decision lightly," Tyson Chief Executive Donnie King said. "We have spent months encouraging our team members to get vaccinated — today, under half of our team members are."

Tyson said it was negotiating with unions on the action. While UFCWI President Marc Perrone said the union has encouraged members to get vaccinated, they are concerned Tyson is implementing the mandate “before the FDA has fully approved the vaccine.” The union is calling on food companies to negotiate directly with front-line workers on any vaccination order and they want companies to provide “paid vaccine leave.” Tyson said that union workers make up about one-third of their hourly workforce.

Mexico bans pork imports from Dominican Republic

Mexico’s agriculture ministry has banned pork and derived products from the Dominican Republic and other countries dealing with African swine fever. The country is also increasing its scans of baggage coming into the country from the Dominican Republic for “product risk,” the ag ministry said in a statement. The U.S. already had bans in place against pork from the Dominican Republic.

New animal welfare rules could cause a bacon shortage in California

At the beginning of next year, California will begin enforcing an animal welfare proposition approved overwhelmingly by voters in 2018 that requires more space for breeding pigs, egg-laying chickens and veal calves. According to the Associated Press, while national veal and egg producers are optimistic they can meet the new standards, only 4% of hog operations now comply with the new rules.

“That means that unless the courts intervene or the state temporarily allows non-compliant meat to be sold in the state, California will lose almost all of its pork supply, much of which comes from Iowa, and pork producers will face higher costs to regain a key market,” the AP item said.

National Milk Producers Federation details policy “cliffhangers”

The US dairy sector is still waiting for action on by Congress and the Biden administration, including final approval of a dairy donation program and detail on Covid-19 producer aid. “Cliffhangers are great in movies, but they’re frustrating in public policy,” said National Milk Producers Federation (NMPF) President and CEO Jim Mulhern in his August 3 CEO’s Corner newsletter. “Congress is entering its traditional August recess with a big not-yet-done list on topics ranging from infrastructure to immigration. For the sake of dairy farmers, we’d like to see faster movement.”

Mulhern detailed four policy issues of elevated importance to the dairy sector that are still pending action: USDA’s Dairy Donation Program and Covid-19 aid payments to producers, new climate smart ag legislative measures, and ag labor reform.

On the donation program, Mulhern notes that the $400 million effort was enacted under the December 2020 omnibus spending/Covid-19 relief package and is “largely ready to go, thanks to USDA’s diligence.” The program will reimburse dairy producers for the donation of surplus milk supplies to food banks and other anti-hunger organizations, including retroactive reimbursement for any donations made after Dec. 27, 2020 — when the omnibus package was signed into law.

Regulations implementing the program were submitted for review to the White House Office of Management and Budget (OMB) on June 9 and are still listed as pending. “Final details are expected to be worked out soon, encouraging dairy community efforts to aid needy families through food banks and other distributors,” Mulhern wrote.

Separately, dairy producers are still awaiting initial details from USDA on its plans for direct Covid-19 relief payments to producers. The department aims to reimburse producers for uncompensated losses related to market impacts from the pandemic and deliver a supplemental Dairy Margin Coverage (DMC) program payment. The DMC effort would allow smaller producers who had annual production of less than five million pounds of milk in 2014, but which subsequently grew, to receive payments. “This not only aids small producers; it increases the amount of money available to dairy in the next farm bill,” Mulhern said of the supplemental DMC effort.

Another aid-related issue on NMPF’s radar pertains to the issue of payment caps and USDA’s Coronavirus Food Assistance Program (CFAP). The group has pressed to have the limits adjusted, saying they were set too low to allow some producers adequate compensation for their losses. “NMPF has spearheaded efforts to remedy this imbalance with USDA,” Mulhern said, referring to pressure from the group over the issue.

On the legislative front, Mulhern said dairy sector plans to achieve net-zero greenhouse gas (GHG) emissions by 2050 would receive a much-needed boost from several policies making their way through Congress. First, the group is awaiting House action on the Senate-passed Growing Climate Solutions Act (GCSA) — which would provide technical assistance and USDA certification of third-party verifiers for carbon credit-related on farm efforts. A House companion bill was introduced by House Ag Committee members Abigail Spanberger (D-Va.) and Don Bacon (R-Neb.) in April but has yet to move forward in the chamber.

Besides action on the GCSA, NMPF is also watching an investment tax-credit bill for GHG-reducing technologies. The tax measure “is making headway on Capitol Hill,” Mulhern said, while lawmakers are also “considering enhancing conservation policy to encourage climate-friendly agricultural practices and markets that compensate farmers for being stewardship leaders.”

In a June 19 NMPF podcast, NMPF Senior Vice President for Government Relations Paul Bleiberg explained that NMPF is supportive of efforts by Senate Ag Committee Chair Debbie Stabenow (D-Mich.) to “plus up different conservation programs and opportunities as well that may reward essentially climate smart ag practices.” He noted that feed management and manure management “are a couple of areas that the programs today don’t quite emphasize,” which NMPF hopes might be included in climate smart ag-oriented program expansions.

Finally, Mulhern said NMPF is hoping for action on the twice House-passed Farm Workforce Modernization Act (FWMA). The bill died last year in the Senate — while Republicans still controlled the chamber — but the House approved it again this year. The measure was discussed during a recent Senate Judiciary Committee hearing, where views appeared to be divided along party lines. “Senate discussions remain behind-the-scenes, but we have positioned dairy prominently in this debate via the many opportunities we’ve had to spotlight dairy’s labor needs,” Mulhern wrote, pointing to NMPF’s participation in the Senate Judiciary hearing.

In a related development, Mulhern welcomed House appropriations bill language that would expand the current H-2A ag guestworker visa program to include year-round labor needs — such as positions in the dairy industry. “These are the types of smaller actions that lead to larger ones, and we will continue this drumbeat to prod Congress to get the job done,” Mulhern concluded.

USDA’s weekly US dairy market report

FLUID MILK: Milk production is decreasing across most of the United States. In the Pacific Northwest and in Florida, milk production is holding steady. While milk production has decreased, most processors are finding supplies available to run active operating schedules. Class I sales are steady to higher across the East and Central regions. In the Pacific Northwest demand for Class I milk is lower. Bottling demand destined for school lunch programs is mixed, as school districts in some parts of the country are purchasing more to prepare for the beginning of the K-12 school year. Class III milk prices in the Midwest were, reportedly, lower this week. Condensed skim sales have held steady in both the East and West regions. Cream availability is tightening in the West, though cream is available to meet production needs across the country. Cream multiples for all classes: 1.23 – 1.35 in the East, 1.23 – 1.35 in the Midwest, and 1.12 – 1.33 in the West.

DRY PRODUCTS: Prices for low/medium heat nonfat dry milk (NDM) held steady in the Central and East this week. In the West, the bottom of the range fell, while the top held steady. Demand for low/ medium heat NDM is mixed. Steady demand is reported in the West, while demand has softened in the Central and East. Production of low/ medium heat NDM is steady as condensed skim milk continues to be available for producers across the country. Prices for high heat NDM are unchanged this week. Dry buttermilk prices are mixed in the Central and West regions. Production of dry buttermilk powder is limited, while availability is mixed. The price range for dry whole milk tightened for a second week in a row. Dry whole milk markets are steady. Dry whey prices are mixed, while inventories are available across all regions. Prices for animal feed dry whey are holding steady, amid limited trading. Prices for whey protein concentrate 34% are higher at the top of the range, while holding steady at the bottom. Supplies are limited for loads that meet specific end user requirements, while loads that are interchangeable for with other protein sources are available. Weaker demand for lactose has led to a decrease in prices at the bottom of the range and the mostly price series. Demand and prices for both acid casein and rennet casein have held steady this week. $6.24 in Pittsburg, PA. The U.S. simple average price, $4.12, is up a penny from June 2021. Retail prices of organic whole milk, in half gallon containers were unchanged in twenty U.S. cities in comparison to the previous month.

US Retail Report

Conventional 48- to 64-ounce containers of ice cream are the most advertised dairy item this week. Up one penny from last week, the weighted average advertised price is $2.86. There are no ads for organic 48 to 64-ounce ice cream. Conventional 16-ounce sour cream ads increased 40 percent. The weighted average advertised price is $1.86, up $0.05 from last week. Ads for organic 16-ounce containers of sour cream decreased 62 percent. The weighted average advertised price, $2.49, is unchanged from last week and has an organic premium of $0.63.

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