Weekly global protein digest: U.S. nears deal to fund Moderna’s H5N1 vaccine trial, APHIS reports H5N1 in mammals, wild birds

U.S. nears deal to fund Moderna’s H5N1 vaccine trial

The U.S. government is nearing an agreement to fund a late-stage trial of Moderna’s mRNA H5N1 vaccine, the Financial Timesreported, as the outbreak spreads. Federal funding from the Biomedical Advanced Research and Development Authority (BARDA) could come as soon as next month and would include a promise to procure doses if late-stage trials are successful, the report said, citing people close to the discussions. As we previously reported, the U.S., Canada and Europe have been in active talks with CSL Seqirus and GSK to acquire or manufacture H5N1 vaccines, which could be used to protect at-risk poultry and dairy workers, veterinarians and lab technicians. The U.S. government is also in “active conversations” with mRNA vaccine makers Pfizer and Moderna on a potential H5N1 vaccine for humans.

APHIS reports H5N1 in mammals, wild birds

USDA’s Animal and Plant Health Inspection Service (APHIS) reported 15 new H5N1 virus detections in mammals across six states, with sample dates from mid-April to mid-May. This includes outbreaks in dairy cattle counties. Mammal detections were noted in New Mexico, Michigan, Montana and South Dakota in domestic cats (eight detections), red fox and a raccoon. A reassortant between the Eurasian and North American wild bird lineages was found in all cat samples and one red fox sample. Wild bird detections were noted in East Coast states including New Hampshire, Maine, Rhode Island and Virginia. All were Eurasian H5N1.

China lifts ban on more Aussie beef exporters, allows some Russian beef imports

China lifted bans on imports from five major Australian beef processing facilities, the Australian government said. China has removed restrictions for eight Australian beef plants, while two are still banned from making shipments. China was Australia’s second biggest beef export market last year, receiving 240,000 MT worth around $1.6 billion, according to Australian trade data. China will also allow imports of Russian beef from cattle under 30 months of age, while permitting shipments of by-products including frozen beef tendons and hoofs, stomach and cartilage.

USDA confirms first H5N1 detection in alpacas at Idaho farm; virus also found in New Mexico feral cats and Michigan dairy herd

USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed that highly pathogenic H5N1 avian influenza has been detected in alpacas at an Idaho farm. This is the first time the virus has been found in alpacas, which belong to the camelid family. The virus was previously identified in a poultry flock on the same farm, and the environment’s high viral load likely led to its transmission to alpacas. Genetic sequencing revealed that the virus strain infecting the alpacas is the same B3.13 H5N1 genotype found in dairy cows and the infected poultry at the farm. Four out of 18 alpacas on the farm tested positive for H5N1. The affected poultry flock was depopulated earlier this month.

Additionally, H5N1 was detected in two feral cats found dead in Curry County, New Mexico, not directly linked to any known outbreak farms. Detections of H5N1 in cats at dairy farms have been reported in multiple states.

In Michigan, the Michigan Department of Agriculture and Rural Development (MDARD) reported another H5N1 outbreak in a dairy herd in Clinton County, marking the third outbreak in that county and the 22nd in the state. Nationally, H5N1 has been detected in 67 dairy herds across nine states, with recent detections in Idaho, Texas, and Michigan.

Bird flu strikes flock of 4.2 million chickens in Sioux County, Iowa

Avian influenza that is very transmissible and lethal for domestic birds has been detected in a flock of 4.2 million egg-laying chickens in Sioux County, according to the Iowa Department of Agriculture and Land Stewardship (IDFALS). It is the first confirmation of highly pathogenic avian influenza in a commercial or backyard poultry flock this year in Iowa. IDALS reported it Tuesday.

Agri Stats fails to dismiss DOJ meat price-fixing case

Agri Stats, an agricultural data company, lost its bid to dismiss a Justice Department lawsuit accusing it of facilitating price-fixing among major meat companies. This development marks a significant step towards trial.

The DOJ claims Agri Stats used data from chicken, turkey, and pork companies to aid price-fixing. While Agri Stats is the only defendant, nearly a dozen meat companies, including Tyson Foods, Cargill, Sanderson Farms, and Pilgrim’s Pride, are alleged co-conspirators. Agri Stats argues its data is anonymized, but the DOJ alleges it enables collective price increases affecting buyers like restaurants and consumers.

The case is crucial for the Biden administration’s efforts to combat high food prices, attributed to market consolidation and “greedflation.”

USDA’s semi-annual report on Australian dairy industry

Milk production in Australia for 2024 is estimated to increase, for the first time since 2020, by 3.3 percent to 8.75 million metric tons (MMT). Industry confidence is elevated by high milk prices for dairy farmers over recent years and, also lower feed and fertilizer prices and broadly good seasonal conditions in 2024. However, the estimate for 2024 is tempered by dry conditions experienced in some dairy-producing regions. Domestic fluid milk consumption in 2024 is estimated to rise for the first time in six years. This is due to rapid population growth, now at a rate of 2.5 percent per annum. Factory use milk consumption is also estimated to increase by 5.6 percent, due mainly to increased milk production but also a fall in fluid milk exports. With this in mind, there is an expectation that production and exports of cheese, skim milk powder (SMP), and whole milk powder (WMP) will rise. For butter, production is estimated to fall but exports rise in 2024.

China’s sow herd shrinks

China’s sow herd totaled 39.86 million head at the end of April, down 0.1% from March and 6.9% below year-ago, the ag ministry reported.

Neutral USDA Cattle on Feed Report

USDA estimated there were 11.554 million head of cattle in large feedlots (1,000-plus head) as of May 1, down 100,000 head (0.9%) from year-ago. That was the first year-over-year decline in feedlot inventories in eight months. April placements dropped 5.8%, while marketings jumped 10.1% from year-ago levels. The data is virtually right in line with pre-report expectations and there should have no market impact. 

US beef stocks declined less than average, pork inventories built more than normal in April

USDA’s Cold Storage Report showed beef stocks totaled 430.7 million lbs. at the end of April, down 3.8 million lbs. from March, whereas the five-year average was a 21.6-million-lb. decline. Still, beef stocks stood 21.4 million lbs. (4.7%) below year-ago and 37.9 million lbs. (8.1%) under the five-year average. Pork inventories rose to 501.3 million lbs., up 38.2 million lbs. from March versus the five-year average increase of 18.8 million lbs. during the month. But pork stocks were still down 66.2 million lbs. (11.7%) from April 2023 and 56.8 million lbs. (10.2%) below the five-year average.

USDA: Favorable Spring Conditions in Spain Promise a Sizeable Grain Crop 

Following three consecutive seasons of tight supply, favorable fall and winter conditions have been followed by abundant spring precipitation across Spain, with the notable exception of the eastern part of the country. The combination of farmers’ decisions to maximize their more drought-resilient winter grains plantings, improved soil moisture, and mild spring temperatures are expected to result in an upward revision of the Spanish total grain crop, currently estimated at 21 million MT.

USDA launching new initiative to compensate US dairy farmers for milk losses caused by bird flu

This is potentially the largest economic aid for the US dairy industry to date.

  • Compensation details: Dairy farmers with bird flu-infected cows will be compensated for their milk losses. Payments will be retroactive and calculated on a per-cow basis, considering the loss of milk production and prices in the preceding month.
  • Program design and application: USDA will spend a few weeks designing the program before accepting applications. 
  • Impact of bird flu: The avian flu outbreak, which began in March, has affected multiple states and raised health concerns as the disease spreads among cattle. Bird flu has been found in over 50 herds across nine states, with potential underreporting of the disease’s prevalence.
  • Economic aid: The compensation is significant for dairy farmers, potentially up to $250,000 a week for a farm with 5,000 cows, equating to about $50 per cow. Bird flu can lead to a 20% drop in milk production for two to three weeks, impacting about 10% of cattle in affected herds.
  • Indemnity program: Like programs for poultry farms, this indemnity initiative aims to encourage farmers to report cases and take samples for government tracking. USDA’s emergency assistance program will fund the reimbursements, covering losses from weather events and diseases.
  • Additional funding: USDA is also extending funding to dairy farmers whose herds have not tested positive for bird flu. This includes reimbursements for veterinary and shipping costs for testing and up to $1,500 for developing and implementing biosecurity plans.

USMEF conference focuses on differentiation and long-term investment

The US Meat Export Federation (USMEF) Spring Conference in Kansas City which ends today put a strong emphasis on the quality and consistency of U.S. red meat as key factors for expanding the international customer base.

Randy Spronk, USMEF Chair, highlighted the importance of free trade agreements (FTAs) in creating global opportunities for U.S. red meat. He praised the market access gains from the U.S./China Phase One Economic and Trade Agreement and the U.S.-Japan Agreement. “Would we have found success in South Korea if U.S. beef was still tariffed at 40% and U.S. pork at 25%?” Spronk asked. “Would we have been able to develop Central and South America, or the Dominican Republic, into reliable destinations for U.S. red meat?” While they are not full-blown FTAs, Spronk also praised the market access gains achieved in the U.S./China Phase One Economic and Trade Agreement and the U.S./Japan Agreement. “With the weak yen and other headwinds in Japan, imagine trying to compete effectively there if U.S. beef and pork were still at a tariff disadvantage,” Spronk noted.

Dan Halstrom, USMEF President and CEO: Provided updates on export results, noting significant growth in pork shipments to Mexico and high export values for U.S. beef.

Randy Blach, CEO of CattleFax, emphasized the improvements in the quality of U.S. beef and the importance of long-term market development. He provided an update on the U.S. cattle industry’s herd rebuilding efforts and stressed the need for patience in expanding exports.

Daniel Whitley, USDA Foreign Agricultural Service Administrator, discussed USDA’s Regional Agricultural Promotion Program(RAPP), which aims to help U.S. exporters expand into new markets, particularly in Africa, Latin America, and Southeast Asia.

Kip Tom, former U.S. Ambassador, stressed the link between national security and food security, emphasizing the need for innovation and technology in agriculture to meet the global food production challenge projected by 2050.

Speakers, including Blach and Tom, emphasized that U.S. beef and pork are high-value products that stand out in the global market due to their quality, unlike the commodity-focused exports from countries like Brazil.

Rising costs of cheeseburgers amid post-pandemic economic challenges

The cost of a cheeseburger, a staple of American cuisine, has significantly increased, making it a luxury item for many. This price surge is particularly evident at both fast-food chains and gourmet burger joints, largely due to rising beef prices and other associated costs, according to an article in the Philadelphia Inquirer. It says many consumers are now more cautious with their spending on burgers, with some refusing to pay more than $15 unless it’s for premium beef like Kobe or Wagyu. At McDonald’s, a quarter-pounder with cheese meal now costs $12, double the price from a decade ago. 

Reasons for rising costs:

  • Beef price surge: Beef prices have surged due to a cattle shortage, contributing to a 7% increase over the past year.
  • Inflation and supply chain issues: Since the pandemic, food prices have risen more than 20%, exacerbated by inflation and supply chain disruptions.

— The burger wars are intensifying as Restaurant Brands’ Burger King reintroduces its $5 value meal, which typically includes a sandwich, chicken nuggets, fries, and a drink. This follows reports of McDonald’s launching a $5 value meal in the U.S. on June 25, and Wendy’s announcing a $3 breakfast meal deal that includes a sandwich and seasoned potatoes. Many Americans, impacted by higher food costs, are visiting restaurants less frequently, making deals and discounts more important in their decision-making. These value meals aim to attract cost-conscious consumers who are looking for affordable options. Burger Kingplans to offer its new meal for several months, while McDonald’s promotion is expected to last four weeks, which may not be sustainable. The goal of these promotions is to boost customer traffic and convert it into steady sales despite the temporary nature of the discounts.

European Union: Dairy and Products Semi-annual

EU milk production in 2024 is forecast to fall slightly to 148.9 million metric tons (MMT), from an estimated 149.3 MMT in 2023 as a result of declining cow numbers and lower milk production profitability. With lower milk production, which will only be partially offset by lower expected fluid milk consumption, factory use consumption is also forecast to minimally decrease in 2024. This is requiring dairy processors to carefully decide for which products they will use the available milk. Cheese production is forecast to remain the primary output goal of the EU dairy processing industry, supported by solid domestic consumption and continued strong export demand. EU27 cheese production in 2024 is forecast to reach 10.62 MMT, up by 0.6 percent from 2023. This comes at the expense of the production of butter, non-fat dry milk (NFDM), and whole milk powder (WMP).

Weekly USDA dairy report

DAIRY MARKET NEWS CUSTOMER INQUIRY: Dairy Market News is developing a strategic plan to guide the organization for the next three to five years. As a customer of Dairy Market News, please provide input, ideas, and feedback to support this strategic planning process. Please provide responses by accessing the link: https://www.surveymonkey.com/r… CME GROUP CASH MARKETS (5/24) BUTTER: Grade AA closed at $3.1225. The weekly average for Grade AA is $3.1125 (+0.0720). CHEESE: Barrels closed at $1.9800 and 40# blocks at $1.8700. The weekly average for barrels is $2.0355 (-0.0320) and blocks $1.8700 (-0.0660). NONFAT DRY MILK: Grade A closed at $1.1750. The weekly average for Grade A is $1.1740 (+0.0095). DRY WHEY: Extra grade dry whey closed at $0.4000. The weekly average for dry whey is $0.4010 (+0.0020). 

BUTTER HIGHLIGHTS: Domestic butter demand continues to vary from steady to strong across the country for both the retail and food service sectors as we approach the upcoming holiday weekend. Industry participants note cream volumes are comfortable and generally available. That said, some stakeholders anticipate cream to begin seasonally tightening by mid-June. Butter production is mixed with some plant managers conveying scheduled downtime in connection with the holiday weekend right around the corner. Stakeholders indicate unsalted bulk butter is tight for spot load buyers. 

CHEESE HIGHLIGHTS: Cheese production schedules are steady to stronger throughout the U.S. In the East, cheese production schedules have held steady despite flattening milk production at the farm level. Contacts relay high domestic cheese prices have hindered export demand. Cheesemakers in the Central region say milk availability is in line with recent weeks, with spot prices settling at $6-under Class III to $0.50 under. Cheese demand remains strong. Contacts relay some barrel cheesemakers in the region have also started producing curds and other seasonal cheese varieties. In the West, cheese production remains strong. Milk volumes available to Class III processors are tightening, but contacts anticipate school breaks to free additional milk supplies in the near term. 

FLUID MILK: The spring flush has stabilized or subsided in most areas in the country. Some contacts say this year’s flush was generally subdued. Component levels, though, remain somewhat strong and have been since prior to the spring. Midwest cheesemakers reported spot milk loads from $6- to $.50- under Class III. The combination of storms/inclement weather and the impending holiday weekend are adding to spot milk availability regionally. Class I demand is stable in the East and parts of the West, but Central and Southeastern region contacts, particularly those in the South Central, relay a slowdown from bottlers as school districts have begun their summer hiatuses. Condensed skim availability is wide open throughout the country. Contacts relay expectations of condensed skim stocks to be ample until deeper into the spring, if not summer months. Cream remains generally available for all end users, as well. Despite the holiday weekend, though, cream levels at midweek were somewhat in line with previous weeks. Ice cream manufacturing demand is starting to tick higher week to week. F.O.B. cream multiples are 1.05-1.29 in the East, 1.08-1.26 in the Midwest, and 1.05-1.23 in the West. 

DRY PRODUCTS: Low/medium heat nonfat dry milk (NDM) prices firmed across the nation this week. Export demand has strengthened, and domestic end users are active on the spot market. Dry buttermilk prices were mixed, decreasing in the Central/East, while pushing up in the West. Western processors are pushing ahead with Q3-based production schedules. Dry whole milk prices moved up this week, as some processors are behind with processing/delivery schedules. Dry whey prices were steady in the East and West, while Central prices moved in bullish fashion. Brand-preferred loads in the Central region are noted as tight. Whey protein concentrate 34% (WPC 34%) prices moved lower on lighter demand tones, with the exception of WPC 34% that meets infant formula specifications. Lactose prices were steady to higher, as contacts on both sides of the buy/sell coin are working through Q3 commitments. Casein prices are unchanged, on steady demand in international markets. 

INTERNATIONAL DAIRY MARKET NEWS: WESTERN EUROPE: As European weather patterns transition from spring to summer, industry sources suggest the seasonal milk peak may have been summitted. Weekly milk collections vary only slightly within Germany and France, but milk collections recently turned lower in Great Britain. Analysts have mixed views of the milk season so far but seem to lean toward the feeling that milk production and availability may be below expectations. While there is currently enough milk for most processing needs, processors are watching availability closely to see how summertime heat and economics impact milk supplies in the months to come. 

EASTERN EUROPE: EU milk production has largely been above previous year levels to start the year, and Eastern European countries continue to have above average milk production increases. According to CLAL data made available to USDA, some of the top Eastern EU milk producers, the year-to-date milk deliveries from January-March 2023 are Poland, Czech Republic, and Hungary. In addition, the provisional March 2024 cows’ milk production in Belarus was up from March 2023. January – March 2024 provisional milk production in Belarus is up percent from January – March 2023. 

AUSTRALIA: Dairy Australia’s Situation and Outlook report for May 2024 stated milk production for the 2023/2024 season is expected to be higher than previously forecasted. For the 2024/2025 season, the organization is forecasting milk production to decline, as processors have indicated milk prices may be lower in the upcoming season. In Australia, the deadline for setting minimum milk pricing, established by the government’s mandatory code of conduct, for the 2024/2025 season is June 1st. Leadership of a dairy farming group in Australia recently voiced opposition to lower farmgate milk prices for the 2024/2025 season. A spokesperson for a dairy processing policy group recently stated milk prices should be lower in the upcoming season to remain competitive globally. NEW ZEALAND: Milk production data from New Zealand for April 2024 was recently released. This data showed total April 2024 production was down on a tonnage basis compared to a year earlier. During April 2024, the total kg of milk solids decreased from the previous year. A dairy cooperative in New Zealand recently announced changes to their strategy going forward, which includes the sale of their consumer business and integrated businesses. A group in New Zealand, which forecasts dairy prices, increased the forecasted milk price for the 2024/2025 season, following GDT event 356. 

SOUTH AMERICA: The 2024 calendar year has brought catastrophes, in the form of floods, to all the key dairy producing/trading countries in the region. Contacts throughout South America, and their U.S. counterparts, say dairy markets are currently facing a growing number of questions, from immediate aid needs to simply stocking/restocking grocery store and restaurant spaces. Contacts in lesser-affected areas say milk output is on par with seasonal trends. Argentine and Uruguayan contacts say that the upcoming months are likely to bring on stronger milk yields in line with seasonally cooler temperatures. Traders say Brazil’s internal stocks have subdued intakes to a certain extent. International bullishness on dairy powders has also kept both Brazilian and other net-import countries interested. 

NATIONAL RETAIL REPORT: Conventional dairy organic ads increased this week. Cheese was easily the most advertised dairy commodity. Total conventional cheese ads increased, but total organic cheese ads decreased. When comparing with prior week prices, all three conventional 6-8 ounce package cheeses had price decreases. Conventional ice cream was well represented in dairy ads. Total conventional ice cream ad numbers grew slightly from the prior week. Total organic milk ad numbers topped total conventional milk ad numbers this week. 

APRIL MILK PRODUCTION (NASS): Milk production in the 24 major States during April totaled 18.3 billion pounds, down 0.2 percent from April 2023. March revised production, at 18.9 billion pounds, was down 0.5 percent from March 2023. The March revision represented an increase of 78 million pounds or 0.4 percent from last month’s preliminary production estimate. Production per cow in the 24 major States averaged 2,064 pounds for April, 8 pounds above April 2023. The number of milk cows on farms in the 24 major States was 8.89 million head, 55,000 head less than April 2023, and 6,000 head less than March 2024. MARCH 2024 MILK SALES: Total Fluid Products Sales 3.6 billion pounds of packaged fluid milk products were shipped by milk handlers in March 2024. This was 4.1 percent lower than a year earlier. Estimated sales of total conventional fluid milk products decreased 4.5 percent from March 2023, and estimated sales of total organic fluid milk products increased 0.5 percent from a year earlier.