2 January 2025

8 minute read

By: Jim Wyckoff

South America

North America

Asia

HPAI outbreaks hit poultry operations in five US states and Ontario

Highly pathogenic avian influenza (HPAI) has been confirmed in commercial broiler and turkey flocks across multiple U.S. states and Ontario, Canada. Broiler flocks affected: 227,500 chickens in Clay County, Arkansas (state’s first 2024 case); 210,000 chickens in Copiah County, Mississippi (second 2024 case); and 217,600 chickens in Johnson County, Nebraska (third 2024 case). Turkey flocks affected: 18,600 turkeys in Burnett County, Wisconsin (third 2024 case); and 14,900 turkeys in Cooper County, Missouri (fifth 2024 case). In Canada, HPAI was detected in a commercial flock in Oxford County, Ontario, marking the province’s seventh flock infection of the year.

USDA updates indemnity rules for poultry farms amid ongoing avian influenza outbreak

USDA’s Animal and Plant Health Inspection Service (APHIS) has introduced an interim final rule updating indemnity requirements for poultry facilities affected by Highly Pathogenic Avian Influenza (HPAI). Moving forward, farmers must pass a biosecurity audit before restocking their poultry and receiving future indemnity payments, aiming to curb the spread of HPAI through stricter biosecurity measures.

The rule follows data from the 2022-2024 HPAI outbreak showing the effectiveness of strong biosecurity in preventing reinfections, which have cost over $365 million in indemnity payments for repeat cases. APHIS will also require audits for farms in buffer zones and limit indemnity for flocks introduced into active infection areas.

The interim rule takes effect upon publication in the Federal Register, with public comments open until March 3, 2025.

China launches probe into beef imports, sending Brazilian meat stocks tumbling

Shares of JBS SA, the world’s largest meat producer, and other Brazilian beef companies plunged following China’s announcement of an investigation into surging beef imports. The probe, initiated at the request of Chinese industry associations, will determine if increased imports have harmed domestic producers. China's Ministry of Commerce stated the investigation could conclude within eight months but may be extended if necessary.

China, the world’s largest beef importer, has seen beef imports rise over 70% since 2019, pressuring its local producers amid oversupply and weak demand. Brazil, the top supplier to China, sends nearly half of its beef exports there, making this development critical for its meat industry. Shares of Brazilian firms like Minerva SA and Marfrig Global Foods SA also dropped sharply, alongside JBS.

Brazil’s government and industry leaders are seeking to demonstrate that exports complement Chinese production rather than harm it. Simultaneously, they aim to diversify markets, targeting countries like Japan, Vietnam, and South Korea.

The investigation could also impact other major beef exporters, including Argentina, Australia, and the U.S. Past Chinese probes have resulted in steep tariffs, raising concerns among global producers. While Argentina is less reliant on beef exports to China, officials are closely monitoring the situation, given China’s significance to its industry. Similarly, U.S. beef exporters, who have seen mixed trade figures with China in 2024, are watching the developments.

FDA weighs ban on controversial red dye No. 3

The FDA is nearing a decision on banning red dye No. 3, a synthetic additive linked to cancer in animals and used in various foods like candy, drinks, and fruit cocktails. While banned in cosmetics since 1990, the dye remains approved for food use, prompting criticism from food safety advocates. They argue it poses potential health risks and violates federal law prohibiting carcinogenic substances in food.

Despite manufacturers defending its safety and economic value, growing pressure from lawmakers, consumer groups, and new state bans — such as California's recent legislation — has intensified calls for action.

Of note: The FDA plans to announce its decision in the coming weeks, which could significantly impact food manufacturing standards.

HPAI virus shows mutations in first US severe human case

The US Centers for Disease Control and Prevention (CDC) said its analysis of samples from the first severe case of highly pathogenic avian influenza (HPAI) in the country last week showed mutations not seen in samples from an infected backyard flock on the patient’s property. CDC said the patient’s sample showed mutations in the hemagglutinin (HA) gene, the part of the virus that plays a key role in it attaching to host cells. It noted the risk to the general public from the outbreak has not changed and remains low.

China’s sow herd, hog slaughter continue to decline

China’s sow herd totaled 40.80 million head at the end of November, according to its ag ministry, down 1.9% from last year. For the first 11 months of this year, China slaughtered 296.11 million head of hogs, down 2.6% from the same period last year.

Weekly USDA dairy report

CME GROUP CASH MARKETS (12/27) BUTTER: Grade AA closed at $2.5750. The weekly average for Grade AA is $2.5694 (+0.0504). CHEESE: Barrels closed at $1.7675 and 40# blocks at $1.8725. The weekly average for barrels is $1.7500 (-0.0140) and blocks $1.8613 (+0.0113). NONFAT DRY MILK: Grade A closed at $1.3875. The weekly average for Grade A is $1.3888 (+0.0093). DRY WHEY: Extra grade dry whey closed at $0.7500. The weekly average for dry whey is $0.7425 (-0.0015).

BUTTER HIGHLIGHTS: For the West region, demand varies from lighter to stronger. For the Central region, demand is steady. For the East region, retail demand is steady, while food service demand varies from light to steady. Cream volumes are plentiful throughout most of the country. However, butter churning schedules are mixed as production facilities managers convey varying amounts of downtime for the holiday week. Stakeholders note healthy butter inventories that are keeping up with or ahead of demand going into end of the year holidays. Bulk butter overages range from minus 6 to 6 cents above market, across all regions.

CHEESE HIGHLIGHTS: Cheese manufacturing schedules are mixed throughout the U.S. due to the midweek holiday. In the East region, processors share some slight interruptions in manufacturing due to the holiday. Milk handlers are working to find manufacturing uses for available milk supplies. Cheesemakers in the Central region share variable production schedules for this week and next. Spot milk prices were reported at $7 under Class III to $0.50 above. Some manufacturers are planning to take advantage of holiday week milk availability and run production schedules in line with recent weeks. In the West region, processors relay varying degrees of plant downtime. Some manufacturers relay spot cheese availability for some varieties remains tight.

FLUID MILK HIGHLIGHTS: Nationwide, dairy farmers are reporting increasingly stronger milk production volumes. Favorable temperatures are aiding cow comfort over much of the southeast, south central and southwestern states. Farmers are managing cow comfort across much of the north and many mountain states this week as temperatures drop along with a mix of rain and snow. Cows are continuing to produce milk with strong component levels. Fluid milk availability is growing in the East and Central regions. Many processing plant operators across the nation have paused production during the holiday week bringing loosened milk availability. Class I and Class III demand is steady in the East and seasonally slower in the Central region. Central spot milk prices this week were reported as low as $7-under Class III up to $.50-over Class. Farm level milk is strengthening in the West, but contacts report milk availability is still tight. In the West, Class I demand is lighter with holiday breaks at educational institutions, while demands from all other Classes are steady. Condensed skim supplies are loose across the country, and demand continues to be light going into the end of the year. Cream is widely available through the end of the year. End users expect plentiful volumes to continue into early 2025. Demand for cream is mostly steady. Cream multiples for all Classes range 1.10-1.28 in the East, 0.95-1.24 in the Midwest, and 0.85-1.25 in the West.

DRY PRODUCTS HIGHLIGHTS: Due to the shortened trading week, there were few changes regarding pricing for dry dairy ingredients this week. The price ranges for low/medium heat nonfat dry milk (NDM) in all regions were unchanged, but there was a slight tick lower for high heat NDM in the West. Dry buttermilk prices were unchanged. Dry whey market tones are firm as Q1 nears, but no price changes were reported this week. Lactose markets were quiet this week, as prices remain unchanged. Whey protein concentrate 34% prices were static, but market tones are also somewhat bullish. Dry whole milk markets were quiet during the final full week of the year, and rennet and acid casein prices also held steady.

ORGANIC DAIRY MARKET NEWS: The USDA's Farm Service Agency (FSA) recently announced a second round of payments through the Organic Dairy Marketing Assistance Program (ODMAP) 2024. The second round of ODMAP 2024 payments provide an additional $8.7 million to dairy producers. The USDA Natural Resource Conservation Service recently announced funding is available for producers in Oregon through the Organic Transition Initiative (OTI) who apply by the January 17, 2025 deadline. Federal Milk Market Order 1 reported November 2024 utilization of organic whole milk and reduced fat milk by pool plants was down from a year ago, while butterfat content was up for organic whole milk and reduced fat milk. Total organic retail ads declined this week. Milk remained the most advertised organic dairy commodity despite appearing in fewer ads than last week. Organic cream cheese overtook yogurt as the second most advertised organic dairy product in this week’s survey. Organic eggnog and ice cream were not present in the week 52 retail ad survey, after appearing in surveyed ads last week.

NATIONAL RETAIL REPORT: Total conventional dairy advertisements decreased by 29 percent while total organic dairy ads decreased by 4 percent. Conventional ice cream in 48–64-ounce containers was the most advertised dairy product, with a weighted average advertised price of $4.10, down from $4.32 the week before. Half gallons of organic milk were the most advertised organic item overall and had a weighted average advertised price of $4.95, up from $4.92 last week. Conventional butter in one-pound packages had a weighted average advertised price of $4.24, up from $3.96 the week prior.