5 August 2022

8 minute read

US beef exports slide but pork up

USDA’s weekly export sales report showed US beef Net sales of 12,000 MT for 2022 were down 52 percent from the previous week and 30 percent from the prior 4-week average. Increases were primarily for South Korea (2,900 MT, including decreases of 600 MT), Japan (2,400 MT, including decreases of 1,000 MT), Canada (1,800 MT, including decreases of 100 MT), Taiwan (1,100 MT, including decreases of 100 MT), and the Philippines (900 MT). Total net sales of 200 MT for 2023 were for Japan. Exports of 18,500 MT were down 9 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Japan (5,600 MT), South Korea (4,900 MT), China (2,600 MT), Mexico (1,200 MT), and Taiwan (1,100 MT).

US pork net sales of 31,000 MT for 2022 were up 43 percent from the previous week and 35 percent from the prior 4-week average. Increases were primarily for China (16,800 MT, including decreases of 300 MT), Mexico (8,600 MT, including decreases of 200 MT), Japan (1,800 MT, including decreases of 100 MT), South Korea (1,700 MT, including decreases of 400 MT), and Canada (600 MT, including decreases of 400 MT). Exports of 26,000 MT were down 4 percent from the previous week and 5 percent from the prior 4-week average. The destinations were primarily to Mexico (12,600 MT), China (4,200 MT), Japan (3,300 MT), Colombia (1,600 MT), and South Korea (1,400 MT).

Chicken sandwich becomes profitable meal for big chain restaurants

Panera Bread, Popeyes Louisiana Kitchen and other chains have added new chicken sandwiches to their menus in recent months to attract consumers. Meanwhile, KFC, Wendy’s and Burger King have each spent tens of millions of dollars advertising their chicken sandwiches on national television this year. Restaurant owners say they can often make more profit per order on white meat than beef. It’s 678 million chicken-sandwich servings fast-food chains dished up in the June quarter, up 3% from the previous three months, according to research.

USDA says salmonella to be declared adulterant in certain chicken products

USDA’s Food Safety and Inspection Service (FSIS) Monday (Aug. 1) said it is declaring salmonella an adulterant in breaded and stuffed raw chicken products, a move aimed at making sure that contaminated products are not sold to consumers. FSIS said it will set the limit at one colony forming unit of salmonella per gram for these products. They will also issue a notice seeking comment on whether a different standard for adulteration would be more appropriate such as zero tolerance or one based on specific serotypes. The proposal is expected to come this fall.

European Union: High quality beef quota year 2021-2022 ends positively for US beef exports

USDA reports US beef exports into the EU’s High Quality Beef (HQB) quota seem to finally have emerged from the impact of COVID-19 restrictions in the last quarter of the 2021/2022 quota year. In the quota year 2022-2023, U.S. beef exporters can at last start benefitting from the 2019 agreement with the EU about reserving a U.S. specific part of the HQB quota, which was negotiated between the United States and the European Union in 2009. However, with 12,923 MT used out of 24,200 MT available in 2021/2022, U.S. beef exporters must build from a low export basis.

US Democrats urge update on alleged market manipulation by big packers

Six US House of Representatives Democrats sent a letter (link) to the DOJ calling on the agency to update Congress on “allegations of market manipulation” by the Big Four packers: Tyson, JBS, Cargill, and National Beef. These four control more than 80% of the market for processed beef.

Weekly USDA dairy report

CME GROUP CASH MARKETS (7/29) BUTTER: Grade AA closed at $2.9900. The weekly average for Grade AA is $2.9650 (+0.0345). CHEESE: Barrels closed at $1.8875 and 40# blocks at $1.8800. The weekly average for barrels is $1.9235 (-0.0665) and blocks, $1.9240 (-0.0250). NONFAT DRY MILK: Grade A closed at $1.6400. The weekly average for Grade A is $1.6620 (-0.0115). DRY WHEY: Extra grade dry whey closed at $0.4450. The weekly average for dry whey is $0.4515 (-0.0115).

CHEESE HIGHLIGHTS: Milk is available for active cheese production throughout the country. Some contacts in the Northeast and Midwest are wary of taking on additional milk loads and potentially building inventories. Retail demand for cheese continues to soften in the Northeast, as weaker consumer demand is causing some grocers to reduce cheese orders and/or limit the number of products offered. Food service demand is also declining in the Northeast; some restaurants in the region are reducing their menu offerings and limiting their operating hours. In the Midwest and West, domestic demand for cheese is steady this week. Some contacts in the West note that domestic sales are below forecasted levels and cite higher prices as contributing to reduced consumer purchasing. Contacts in the West say that international demand for cheese remains strong. Cheese inventories are available in both the Northeast and West.

BUTTER HIGHLIGHTS: Cream availability is tightening throughout the country. Contacts in the West say milk output and cream production are decreasing due to seasonally higher temperatures in parts of the region. New butter production is limited in the Central region. In the Northeast and West regions, butter output is declining as labor shortages are curtailing some production facilities’ operating capacity. Butter inventories are tight in the Northeast and Central regions. Some Central region contacts say they are sourcing loads of butter from the West. Retail demand for butter is softening in all regions, and food service sales are slowing in the Northeast and West. Meanwhile, contacts in the Central region have reported a spike in food service sales this week. Stakeholders say bulk butter sales are strong in the West, as some purchasers are concerned that inventories will tighten in the coming months. Bulk butter overages range from 2 to 15 cents above market, across all regions.

FLUID MILK: Aside from a few parts of the Pacific Northwest, milk production is trending steady to lower. Hot, dry weather is reducing cow comfort and pushing farm output and milk components downward. That said, milk loads are generally available for most processing needs, and, where it may be tighter, manufacturers can get a few loads shipped in from nearby regions. Class I milk demand is mixed. Some handlers report cuts from bottlers, but there are a few regions of the country where educational institutions are preparing for the start of school and making requests to refill the school milk pipelines. There is strong demand for condensed skim milk in the West. As milk output and components have withered in the summer heat, cream availability has become tighter. However, cream demand has picked up and cream prices are supported. Cream multiples for all Classes are 1.36 – 1.44 in the East, 1.31 – 1.44 in the Midwest, and 1.08 – 1.36 in the West.

DRY PRODUCTS: Prices for low/medium heat nonfat dry milk are lower this week. Contacts report quiet spot market demand. High heat nonfat dry milk prices are down in the West but held steady in the Central and East on limited spot trading. Dry buttermilk prices are steady to lower, and demand is softening. Dry whole milk tones are quiet, and prices are unchanged. Dry whey prices are largely lower, aside from the top of the Western whey price range that moved higher. Animal feed whey prices are steady to lower. The overall market tone for dry whey is bearish. Prices for whey protein concentrate 34% are steady to lower. Availability, demand, and prices vary widely based on brand and application. Lactose prices are unchanged amid steady demand. Rennet and acid casein prices are unchanged, with quiet summertime trading.

ORGANIC DAIRY MARKET NEWS: Federal Milk Market Order 1, in New England, reports utilization of types of organic milk by pool plants. During June 2022, organic whole milk utilization totaled 15.3 million pounds, down from 16.6 million pounds the prior year. Meanwhile, June 2022 butterfat content, 3.28 percent, declined .01 percent from last year. Utilization of organic reduced fat milk, 16.2 million pounds, declined from 18.9 million pounds a year ago, and the butterfat content, 1.39 percent, declined .01 percent over last year. The July 2022 in-store retail surveys of selected supermarkets in twenty-nine U.S. cities show the retail prices of organic whole milk in the half gallon container. The prices ranged from $3.59 in Detroit, MI, to $6.49 in Pittsburg, PA. The July 2022 simple average price increased to $4.66, up 3 cents from the simple average price the previous month.

USDA US dairy retail report

Total conventional dairy ads jumped 163 percent this week, and organic dairy ads are up 84 percent. The most advertised dairy item is conventional butter in a one-pound package. Conventional yogurt ad numbers increased 173 percent. Conventional yogurt in 4 to 6-ounce containers is the most advertised conventional yogurt item. Conventional cheese advertisements are up 88 percent. This week’s most advertised cheese item is conventional 8- ounce shred cheese. Total conventional milk ads surged 607 percent. Milk in gallon containers is the most advertised conventional milk item this week, with 657 percent more ads than last week. The national weighted average advertised price for conventional milk half gallons is $2.66, compared to $5.38 for organic milk half gallons, providing an organic price premium of $2.72. Organic half gallon milk is the most advertised organic item.

TheCattleSite News Desk

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