2 September 2022

9 minute read

FDA to hold listening session Oct. 18 on animal feed claims

The virtual public listening session is on FDA’s regulation of animal foods that make certain environmental and production claims, including reduced greenhouse gas emissions, growth promotion and feed efficiency. The session is part of FDA’s review of the Center for Veterinary Medicine’s policy and procedures manual for the regulation of animal foods with drug claims. FDA wants feedback on how the existing policy could be updated to reflect evolving scientific knowledge and to promote innovation.

USDA awards grants to shore up poultry, meat supply chains

USDA’s Agricultural Marketing Service (AMS) today announced an additional $21.9 million of funding is being awarded to 111 grant projects through the Meat and Poultry Inspection Readiness Grant Program (MPIRG), bringing total funding to $54.6 million. This year’s awards will fund projects in 37 states. The funding will help strengthen and develop new market opportunities for meat and poultry processors throughout the United States. To further these efforts, AMS is also encouraging MPIRG awardees and eligible participants in USDA’s Meat and Poultry Supply Chain initiatives to request assistance through the Meat and Poultry Processing Capacity Technical Assistance Program (MPPTA). Launched in March 2022, MPPTA connects participants to a nationwide network of resources and expertise.

“The Meat and Poultry Inspection Readiness Grants will help meat and poultry processors make necessary facility improvements, expand their businesses, and strengthen the nation’s food supply chain,” said Secretary of Agriculture Tom Vilsack. “These grants are one part of USDA’s Meat and Poultry Supply Chain initiatives and will contribute to our efforts to transform our food system.”

“USDA continues to build capacity and increase economic opportunity for small and midsized meat and poultry producers across the country,” added Under Secretary for Marketing and Regulatory Programs Jenny Lester Moffitt.

Examples of projects funded this round include:

• Homegrown LG OK, a small processing plant in Locust Grove, Okla., will use MPIRG funding to modernize, expand, and comply with Food Safety and Inspection Service (FSIS) protocols. The funding will allow the plant to purchase new machines to increase weekly production in a rural and low access area.
• The Fork Food Lab, a shared-use kitchen incubator in Portland, Maine, will utilize MPIRG funding to expand into a 42,000-sq-ft facility that meets the requirements for a Federal Grant of Inspection (GOI). The project is helping Fork Food Lab procure specialized equipment, assist five processors obtain Federal GOIs for wholesale distribution, support startup operations, and provide ongoing training and technical assistance to processors positioned for wholesale.
• The Wall Meat Processing plant in Wall, S.D, has been awarded MPIRG funding to purchase equipment to improve humane handling and enhance food safety measures and efficiencies. The project will help the plant seamlessly deliver service operations in protein manufacturing to their producers and customers under the Cooperative Interstate Shipping program (CIS). Participating in the CIS program will open the plant to larger markets and add another resource to the food supply chain.
• Facility improvements and expansions funded through MPIRG will help processors obtain a Federal Grant of Inspection or qualify for a state’s Cooperative Interstate Shipment program. Achieving a Federal Grant of Inspection or operating under a Cooperative Interstate Shipment program allows meat and poultry processors to ship products across state lines, develop new markets, increase capacity, and better meet consumer and producer demand along the supply chain.

China halts some meat imports from U.S. processor Tyson Foods

The halt affects products from a plant owned by Tyson Fresh Meats Inc., the beef and pork subsidiary, for shipments from Aug. 29, after some products from the producer failed inspection, according to a notice published on the customs website. USDA confirmed on its website that the Logansport, Indiana, facility was ineligible for exports to China. The move follows Beijing’s halt on shipments of meat products from two other U.S. plants in the past month or so, citing the presence of ractopamine, a feed additive used in the U.S. but banned by China. The Tyson suspension shouldn’t have much impact on the meat trade between the two countries as there are still a lot of U.S. plants eligible to export to China.

China to sell state pork reserves

China’s state planner said it will release pork reserves from September to ensure meat supply during upcoming holidays when demand typically increases. Pork prices have risen rapidly in recent months amid tighter supplies. Meantime, China’s sow herd at the end of July totaled 42.98 million head, according to the country’s ag ministry, up 0.5% from June but down 5.3% from last year.

First time in six months USDA does not increase food price inflation outlook

USDA held its forecasts for all food, food at home, and food away from home steady with its July outlooks. The pause came despite higher forecasts for some commodities. But food price inflation is still expected to be at its at highest level in more than 40 years.

U.S. consumers are expected to see the Consumer Price Index (CPI) for all food to be up 8.5% to 9.5% in 2022, with food at home (grocery store) prices seen up 10% to 11% and food away from home (restaurant) prices to be up 6.5% to 7.5%. Those marks are unchanged from the agency’s outlook in July and ends a string of six straight months where the agency increased their outlooks in those three categories. However, USDA did upwardly adjust price forecasts for several individual commodities or categories.

“Prices for many agricultural commodities fell sharply,” with USDA detailing that corn prices fell by 8.5%, soybeans by 11.4% and wheat by 22.7%. Upward changes to some individual grocery items continue. USDA now sees price inflation for meats, poultry and fish at 9.5% to 10.5% in 2022, up from 9% to 10% in June, with increases in the rate for pork to 8% to 9% (7% to 8% prior) and other meats at 13% to 14% (12% to 12% prior). Price forecasts for beef and veal, poultry, and fish and seafood were kept unchanged from the July outlook.

Egg prices, one of the most-volatile items, are seen up 24.5% to 25.5% in 2022, up from 19.5% to 20.5% in the July forecast. Other upward adjustments came in fruits and vegetables, now seen up 7% to 8% (6.5% to 7.5% prior), sugar and sweets are expected to rise 8.5% to 9.5% (7.5% to 8.5% prior), nonalcoholic beverages are expected up 8.5% to 9.5% (7.5% to 8.5% prior) and other foods are forecast to rise 12.5% to 13.5% (12% to 13% prior).

Weekly USDA dairy report

CME GROUP CASH MARKETS (8/26) BUTTER: Grade AA closed at $3.0825. The weekly average for Grade AA is $3.0385 (+0.0720). CHEESE: Barrels closed at $1.8825 and 40# blocks at $1.7400. The weekly average for barrels is $1.8790 (-0.0580) and blocks, $1.7700 (-0.1010). NONFAT DRY MILK: Grade A closed at $1.5600. The weekly average for Grade A is $1.5445 (+0.0205). DRY WHEY: Extra grade dry whey closed at $0.4700. The weekly average for dry whey is $0.4610 (+0.0120).

CHEESE HIGHLIGHTS: Cheesemakers are running busy production schedules in the Northeast and West. In the Midwest, production is mixed as downtime at some plants is contributing to increased milk availability for others. Cheese inventories are available for spot purchasing in the Northeast and West, but some producers in the Midwest say orders are starting to outpace availability. On August 22, NASS released the Cold Storage report showing inventories at the end of July. This report showed that total natural cheese inventories in cold storage were at a record monthly high. In the Northeast, retail demand for cheese is steady to lower and food service purchasing is steady. Midwest contacts say retail sales of cheese are steady, but food service orders are mixed as some restaurants facing staffing issues have reduced operating hours. In the West, domestic demand is steady to lower. Some stakeholders in the region expect the upcoming football season to contribute to increased pizza sales and demand for mozzarella cheese.

BUTTER HIGHLIGHTS: In the Northeast and Central regions, cream volumes are tight. Some stakeholders in the West are paying premiums for additional loads of cream, as availability is tightening in the region. Demand for cream is strong from butter and ice cream makers in the West. High cream multiples have enticed some butter makers in the Northeast into selling into Class II markets, reducing availability for butter makers. Some butter makers in the West say limited cream availability is impacting their ability to run full production schedules. In the Northeast, tight butter inventories have caused some purchasers to look to the West for loads. Western contacts say inventories are tightening, amid strengthening bulk butter demand. Butter producers in the Central region report sales are relatively stable week-to-week. Domestic butter prices are higher than some international values; due to this some, Central region contacts expect an increase in import trading to meet seasonal baking needs.

FLUID MILK: Hot and humid weather has pushed Eastern milk output lower for the most part, while cooler late summer temperatures have given Midwestern farmers more level milk output. Western reports range from lower to steady week to week, depending on the area. Class I milk sales are strong, seasonally. In fact, they are likely near their peak as schools have begun or are prepping to begin within the next few weeks. Other processing needs are generally being met, but a number of contacts say processors are not at capacity. Cheesemakers are clearing spot milk loads at discounts of up to $3 under Class, but there were some premiums of $1 reported, also. Condensed skim remains at premiums, according to contacts, but it is still accessible. Cream is tighter in recent weeks. Some butter producers reported churning in the Midwest, but $3 butter market prices may be the catalyst for churning versus selling cream loads on the spot market.

DRY PRODUCTS: Following a downtrend in pricing for consecutive weeks, nonfat dry milk (NDM) prices shifted higher in every region this week. Inventories remain available, but there have been some increased interests from Mexican importers. Dry buttermilk prices were steady in the Central/East, while Western prices moved lower on the bottom of the range. Demand is quiet, but inventories are sparse, as well, which has created a somewhat quiet market. Dry whole milk prices moved up four cents on the bottom of the range, although some secondary trading activity is reportedly taking place above the top of the range. Dry whey price ranges contracted in the Central and West, while Eastern prices held steady. Lactose prices also remained stable, as infant formula and 200 mesh lactose availability is scarce, but interchangeable loads remain accessible. Whey protein concentrate 34% prices moved higher on the bottom of the range, while holding steady elsewhere. Rennet and acid casein markets remain snug, as contacts wait out Q4 developments to assess what is expected to be another firm quarter.

ORGANIC DAIRY MARKET NEWS: According to the June 2022 estimated fluid product sales report, the U.S. sale of total organic milk products was 234 million pounds, down 0.5 percent from June 2021 and down 2.3 percent year-to-date. Organic whole milk sales, 109 million pounds, were up 0.9 percent compared to a year earlier and up 1.0 percent year-to-date. Reduced fat milk (2%) sales were 78 million pounds, falling 2.1 percent from the previous year and down 3.7 percent year-to-date. Organic flavored whole milk sales, 2 million pounds, increased 133.6 percent from the previous year and increased 16.6 percent year-to-date.

US RETAIL REPORT: The total number of conventional dairy ads increased by 2 percent, while organic ads were down 23 percent. Conventional ice cream in 48–64-ounce containers was the most advertised dairy item this week and had a weighted average advertised price of $3.35, 4 cents lower than last week.

TheCattleSite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.