Weekly global protein digest – HPAI, Spain exports, USDA Cattle on Feed Report

USDA hogs and pigs report bearish

USDA’s Hogs & Pigs Report last Friday estimated the U.S. hog herd at 74.971 million head as of Dec. 1, up 15,000 head from year-ago, whereas traders expected a 481,000-head decline based on the average pre-report estimate. The market hog inventory increased 221,000 head (0.3%) from year-ago, while the breeding herd declined 205,000 head (3.3%). The data was negative compared to pre-report expectations, though it wasn’t overly bearish. However, the sharp revisions to past data will increase trader skepticism toward these numbers and may cause them to believe USDA’s sampling methodology is consistently undercounting hog numbers.

USDA cattle-on-feed report mildly bearish

USDA’s Cattle on Feed Report estimated the Dec. 1 large feedlot (1,000-plus) head inventory increased 313,000 head (2.7%) from year-ago. Traders expected feedlot supplies to rise 257,000 head (2.2%). November placements of cattle into feedlots declined 1.9%, though traders anticipated a 3.8% decline. November marketings fell 7.4% compared with the expected 6.7% drop. The data is mildly negative compared to pre-report expectations, though we doubt it will have much of lasting market impact.

USDA cold storage report: US pork stocks decline less than normal

USDA’s Cold Storage Report showed pork inventories totaled 416.1 million lbs. at the end of November, down 21.8 million lbs. (5.0%) from October. The five-year average was a 45.2-million-lb. decline during the month. Pork stocks dropped 35.5 million lbs. (7.9%) from year-ago and were 55.1 million lbs. (11.7%) under the five-year average. Beef stocks totaled 454.7 million lbs., up 9.0 million lbs. (2.0%) from October. The five-year average was a 10.4-million-lb. increase during the month. Beef stocks fell 68.6 million lbs. (13.1%) from year-ago and were 49.0 million lbs. (9.7%) less than the five-year average.

Massachusetts seeks dismissal of Q3 animal welfare law challenge

The state of Massachusetts has requested the dismissal of a lawsuit challenging its Question 3 (Q3) animal welfare law. They argue that Triumph Foods’ complaint lacks merit as the company cannot demonstrate harm resulting from the related regulations. The Q3 standards, which regulate pork sold in Massachusetts, came into effect on Aug. 24. Triumph Foods claims that Q3 violates the Commerce Clause and other provisions of the U.S. Constitution.

U.S. District Judge William Young previously rejected most of the complaint in October but maintained a claim that the law discriminates against out-of-state producers. Massachusetts, in its motion to dismiss on Dec. 18, pointed out that all Triumph products are sold through Seaboard Foods under a 2004 agreement. State officials argued that Triumph has not proven that Seaboard cannot continue to meet its obligations under the agreement despite Massachusetts’ policies. Therefore, they contend that the entire amended complaint should be dismissed for lack of jurisdiction.

USDA reports on Spain’s exports

In 2022, Spain imported $2.2 billion of agricultural and related products from the United States, said USDA in a report. Outside the European Union Member States, the United States was the fifth largest origin of agricultural and related imports. Spain received 74.7 million international tourists in the first ten months of 2023, and it is forecast to reach a record-breaking 86.5 million tourists by the end of the year. This positive situation, along with lower unemployment rates, is boosting consumer incomes. This is partly offset by ongoing price increases, forcing some consumers to tighten their budgets. However, the medium-term income growth is predicted to be reasonable, which will continue to create opportunities for certain consumer-oriented food items, as well as enhance long-term prospects for other products. This report provides guidance to U.S. companies interested in exporting consumer-ready food products to Spain and includes an overview of Spain’s economic situation, market structure, and export requirements.

More HPAI finds in Kansas, California, South Dakota

USDA’s Animal and Plant Health Inspection Service (APHIS) has confirmed highly pathogenic avian influenza (HPAI) in additional commercial operations in several states that have already reported cases. Cases confirmed Dec. 18 included Sonoma County, California (497,700 commercial table egg layer birds) and Edmunds County, South Dakota (1,000 birds at a commercial upland game producer). Dec. 19 confirmations announced by APHIS include Muskegon County, Michigan (47,900 commercial turkey meat birds); Rice County, Kansas (800,000 commercial table egg layer birds); and Sonoma County, California (3,500 commercial duck meat birds).

USDA sees food price inflation at just 1.2% in 2024 for all foods, down from 2.9% in November

That is the smallest rise in food prices since they increased 0.9% in 2017, according to USDA’s Economic Research Service (ERS). Food at home (grocery) prices are now seen falling 0.6% in 2024, down from an outlook for an increase 1.6% in November, and would be the steepest decline in grocery prices since they fell 1.3% in 2016. Prices also decreased in 2017 by 0.2%. Restaurant prices, however, are now expected to increase 4.9%, up from 4.3% in November and the highest forecast since USDA started releasing their 2024 outlook in July.