Weekly global protein digest — Bovine Influenza A Virus outbreak in US, USDA livestock report changes

USDA finalizes rule updating the types of foods that can be purchased through WIC; dairy groups are not happy

USDA finalized a rule that updates the types of foods eligible for purchase through the WIC program, a federal initiative supporting low-income women and young children. The aim is to provide more flexibility at grocery stores and promote fruit and vegetable consumption, but it also reduces the monthly allowance for certain foods, particularly dairy products. This reduction has drawn criticism from dairy industry groups such as the International Dairy Foods Association (IDFA) and the National Dairy Producers Federation (NMPF), who argue that it contradicts the goal of ensuring consistent and equitable access to healthy foods. NMPF’s president Gregg Doud expressed concern over the reduction in access to essential dairy nutrients. IDFA president Michael Dykes, while critical of the reduction in dairy allowances, acknowledged the rule’s authorization of lactose-free milk purchases and new flexibilities for yogurt and cheese. Conversely, nutrition advocacy groups like the National WIC Association welcomed the rule, praising USDA’s adherence to science-based standards and urging prompt implementation.

USDA confirms BIAV in New Mexico dairy cattle

USDA’s Animal and Plant Health Inspection Service website shows the H5N1 virus, Bovine Influenza A Virus (BIAV) as we now refer to it, was detected at two dairy farms in New Mexico. That brings the total number of confirmed BIAV cases to 20 in six states – Texas (9), New Mexico (4), Kansas (3), Michigan (2), Ohio (1) and Idaho (1). 

US beef tariff quota filled; limit reached two months earlier than last year as Brazil steps up exports

In the United States, the quota for low-tariff beef imports for this year was filled by the end of February, marking the quickest fill-up since 2020. Brazil and Japan were swift in claiming their shares as suppliers.

With the import quota filled, imports for the remainder of the year will now face significantly higher tariffs. This could pose challenges for Japan in increasing exports of its premium wagyu beef, according to Nikkei Asia. The import quota, which resets annually on Jan. 1, reached its 65,005-tonne limit and closed on Feb. 27. Japanese trade statistics indicated that beef exports to the US in January and February totaled 324 tonnes, showing a 24% increase compared to the previous year. This growth was consistent and supported by the devaluation of the yen.

Background: The US imposes limits on the volume of goods it imports from other countries at low tariffs to safeguard domestic industries. Until 2019, Japan had its own beef quota of 200 tonnes. However, since 2020, Japan, along with several other countries, has had access to a system where they can export up to a collective limit of 65,005 tonnes at a tariff rate of 4.4 cents per kilogram. This shared quota lacks specific caps for individual countries or regions, operating on a first-come, first-served basis, resulting in intense competition.

What happened, according to Nikkei Asia. To secure a position early in line, a company in Japan’s Kansai region shipped wagyu beef to the US in early December, arriving just before the new year. Brazil also shipped beef to the US before the turn of the year, capitalizing on the US’ rising inflation by marketing its low-priced beef aggressively. Consequently, Japan and Brazil utilized the tariff quota within the first two months of the year, earlier than in 2023.

While Brazilian beef is commonly found in American supermarkets, Japanese wagyu is typically sold in high-end restaurants. Despite differing markets and consumer bases, both fall under the same “beef” category according to US import regulations.

Outlook: The filling of the quota means that beef imports will now be subjected to a 26.4% tariff. For instance, the tariff on 1 kilogram of wagyu loin with a 10,000-yen ($66) export price will increase from 6.6 yen to 2,640 yen. The high-priced Japanese wagyu is expected to encounter difficulties in the US market, even with a weakened yen. After the quota was filled last year on May 2, exports rapidly declined, suggesting a potential decrease in Japanese beef exports from March this year. Japanese exporters have plans to enhance efforts in areas such as Taiwan and Hong Kong.

National Pork Producers Council lobbying Congress to address state animal welfare laws within US farm bill

The NPPC emphasizes the negative impacts of California’s Prop 12 law, including higher prices and reduced availability of pork. NPPC is seeking bipartisan support for federal legislation to preempt state laws and ensure consistency across states. While standalone legislation like the EATS Act hasn’t passed, NPPC remains hopeful for a solution in the next farm bill. 

“We are looking forward to the farm bill as finding a federal solution for Prop 12,” said NPPC President Lori Stevermer, regarding a legislative fix. “That’s what the Supreme Court said — it’s an issue and it said that Congress needs to fix it — so we’re looking to Congress to fix it. Stevermer said some of the negative impacts of the law warned about by NPPC and other opponents have come to pass. “We’re seeing prices of select pork products [that are] 20% higher in California now that Prop 12 is in effect, versus before Prop 12. We’re also seeing consumption of fresh pork declining 8% to 10%,” she noted, citing reduced availability and higher prices for the decline.

NPPC CEO Bryan Humphreys added that those impacts are “exactly what [USDA Secretary Tom Vilsack] was referring to when he testified before Congress about the chaos that would ensue, partially in California for consumers, but also with a patchwork across the country, making it almost impossible for producers to comply.”

AABP renames emerging cattle influenza to Bovine Influenza A Virus (BIAV)

Much discussion has been going on about the emerging cattle influenza situation. “Because this infection in cattle is not the same as highly pathogenic avian influenza (HPAI), after thoughtful consideration and discussion with many experts,” the American Association of Bovine Practitioners (AABP) will now refer to this as Bovine Influenza A Virus (BIAV) which it says more accurately depicts it. AABP says using BIAV is “consistent with our messaging and better distinguish the disease syndrome in cattle from the pathogenesis observed in birds.” The group said their reasoning is that while the virus causes HPAI in birds, it does not cause deaths in cattle as it does in birds and said that they believe it is “important for the public to understand the difference to maintain confidence in the safety and accessibility of beef and dairy products for consumers.” USDA’s Animal and Plant Health Inspection Service (APHIS) links to details of the virus in mammals and now dairy cattle from their site which tracks HPAI infections and lists the situation in dairy cows as being “Confirmed Cases of HPAI in Domestic Livestock.” Link for details.

CDC issues health alert for BIAV

The Centers for Disease Control and Prevention (CDC) on Friday issued a health alert to inform clinicians, state health departments and the public of a case of BIAV in a person who had contact with dairy cows infected with the virus. The human infection was reported on April 1. To prevent infection from the virus, the CDC recommends the use of personal protective equipment, testing, antiviral treatment, patient investigations, and monitoring of persons exposed to sick or dead, wild and domesticated animals and livestock that may have been infected with the virus.

USDA’s NASS unveils changes to livestock reports based on five-year review

USDA’s National Agricultural Statistics Service (NASS) announced it plans to make several changes in the number of states where it will report data in the January Cattle Inventory, December Hogs & Pigs, quarterly Milk Production, monthly Cattle on Feed, weekly Broiler Hatchery, and monthly Chickens and Eggs reports. Summary of those changes:

• January Cattle Inventory: Reduce the number of published states to 31 from the current 50. NASS will still publish all cattle and calves inventory, all cows inventory, and calf crop for the 19 states (Alaska, Connecticut, Delaware, Hawaii, Indiana, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Nevada, New Hampshire, New Jersey, North Carolina, Rhode Island, South Carolina, Utah, Vermont, and West Virginia).
• December Hogs & Pigs: Reduce the number of published states from 50 to 16. The 16 states are Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Dakota, and Texas. The 34 non-published states will be accounted for in Other States.
• Quarterly Milk Production: Reduce the published states from 50 to 33. The 17 non-published states will be Alabama, Alaska, Arkansas, Connecticut, Delaware, Hawaii, Louisiana, Massachusetts, Mississippi, Montana, New Hampshire, New Jersey, North Dakota, Rhode Island, South Carolina, West Virginia, Wyoming. Those states will be accounted for in Other States.
• Cattle on Feed: Minnesota will be removed as a published state and will be accounted for in Other States. 
• Broiler Hatchery: Florida and Louisiana are to be removed from the published states in the weekly report, accounting for them in Other States.
• Chickens & Eggs: Maryland, South Dakota, and Virginia would be removed from the monthly report, and they will be accounted for in Other States. Louisiana, Maryland, Massachusetts, Montana, South Dakota, Virginia, and West Virginia would be removed from a published state in the annual Chickens and Eggs report and accounted for with Other States. 

New cases of Highly Pathogenic Avian Influenza (HPAI) confirmed in Ohio

That brings the total number of states affected to six. USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed the presence of HPAI in a herd in Ohio that received cattle from a dairy herd in Texas on March 8. Additional cases have also been reported in New Mexico and Kansas. USDA lists the confirmation dates for Ohio as April 2 and for Kansas, New Mexico, and Idaho as April 1. Unlike its reporting on poultry, USDA has not provided specific numbers of affected animals. Meanwhile, APHIS has officially confirmed new cases of HPAI in poultry, including layer flocks in Michigan and Texas. The Michigan case involves 1.93 million birds, while the Texas case involves 1.89 million birds. This brings the total number of affected birds to 3.85 million over the past three days, spanning three commercial flocks and seven backyard flocks.

Beef feedlot should not be disrupted by BIAV

Of note: Texas Agriculture Commissioner Sid Miller said in an AgriTalk interview that he did not expect HPAI to disrupt beef production. Texas is the No. 1 cattle state, with 12 million head, or roughly one of every seven head in the nation. “The cattle that get it are the older lactating cows, and we don’t have those in the feedlot,” said Miller. “I think we’re OK, but we’re certainly going to research that.”

Controversy over Iowa food labeling legislation 

Iowa House passes food labeling bill amid controversy over egg substitute purchase restrictions. The Iowa House recently passed a bipartisan food labeling bill aimed at preventing imitation meat products from being misleadingly labeled as meat. However, controversy arose when an amendment was added to the bill restricting the purchase of egg substitutes through food assistance programs. The bill, Senate File 2391, passed with a 60-34 vote and imposes fines on businesses mislabeling non-meat products. It specifically targets substitute meat products made from insects, lab-grown meat, and plants, requiring labels to include terms like “fake” or “vegetarian” if they don’t contain traditional meat.

The amendment caused opposition from Democrats. It not only added labeling requirements and fines for misbranding fabricated egg products as eggs but also imposed purchasing restrictions on egg substitutes for those using Supplemental Nutrition Assistance Program (SNAP) or Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) benefits.

The bill, with the amendment, now returns to the Senate for further consideration.

Weekly USDA dairy report

CME GROUP CASH MARKETS (4/5) BUTTER: Grade AA closed at $2.9400. The weekly average for Grade AA is $2.9160 (+0.0722). CHEESE: Barrels closed at $1.5300 and 40# blocks at $1.5150. The weekly average for barrels is $1.4635 (+0.0347) and blocks $1.4555 (+0.0361). NONFAT DRY MILK: Grade A closed at $1.1325. The weekly average for Grade A is $1.1335 (+0.0122). DRY WHEY: Extra grade dry whey closed at $0.3900. The weekly average for dry whey is $0.3910 (-0.0090). 

BUTTER HIGHLIGHTS: Domestic butter demand varies some region to region. Industry participants convey domestic demand is strong to steady in the West, steady in the Midwest, and steady to lighter in the East. Cream volumes are reported as widely available and at comfortable amounts. Butter manufacturers continue to run busy production schedules overall while cream volumes are seasonally larger. However, whether butter makers indicate churning is focused on immediate retail needs or building bulk butter stocks varies. Planned summer churn maintenance is noted by some butter manufacturers. Stakeholders, in the West region particularly, relay unsalted butter spot load availability is tight. Bulk butter overages range from 3 to 12 cents above market, across all regions. 

CHEESE HIGHLIGHTS: Eastern contacts share milk production continues to trend steady to higher. Cheese plant contacts note steady to lighter production schedules, citing weak block cheese demand as a reason to scale back cheese processing. Block cheese inventories remain comfortable in the region, namely of American-type cheese varieties. Cheesemakers in the Central region share ample milk availability has kept production schedules in line with recent weeks. Contacts note plant downtime and the recent holiday weekend have loosened already abundant milk volumes. Spot milk prices were reported at $5 to $3-under Class III. Cheese manufacturers in the West share robust cheese production schedules. Contacts share that contracted cheese demand is steady. Spot demand is steady to stronger, as is demand from international purchasers. 

FLUID MILK: Milk production is steady or strengthening throughout the country. For some parts of the country, milk production is in seasonal spring flush conditions, and plants are at, or near, full capacities. In several states, cases of Highly Pathogenic Avian Influenza (HPAI) have been confirmed in dairy cows. Contacts convey it has minimally impacted milk output, and volumes remain readily available to meet processors manufacturing needs. Stakeholders note spot milk offers at below Class III prices in the Central and West regions. In the Central region, spot milk prices ranged from $5-under to $1.50-under Class III. Nationally, Class I demand is stronger as many educational institutions have finished spring break sessions. Class II, III, and IV demands are mixed across the country. Condensed skim milk demand is lighter, and availability remains loose. Cream multiples for all Classes are 1.08-1.27 in the East, 1.12-1.24 in the Midwest, and 1.00-1.21 in the West. 

DRY PRODUCTS: Low/medium nonfat dry milk (NDM) prices moved lower in all regions, aside from holding steady for the bottom end of the Central and East range. Production varies amongst manufacturers. High heat NDM prices moved lower in all regions, aside from holding steady for the top end of the Central and East range. NDM drying schedules are largely focused on low/medium heat NDM. Dry buttermilk prices are unchanged, except for downward price movement on the top end of the West range. Domestic demand is moderate. Dry whole milk prices are unchanged. Dry whole milk inventory remains limited. Nationally, dry whey prices are steady to lower. Spot load availability varies across the country. Whey protein concentrate (WPC) 34% had downward price movement for the bottom end of the range. WPC 34% interest has slowed in recent weeks. Lactose prices moved higher. Domestic demand for lactose is strong. Both acid and rennet casein prices held steady this week. 

ORGANIC DAIRY MARKETS NEWS: The Organic Insider released on April 1 included a link to and information about the recently released 2024 NOP Program Handbook Update. Updates were made to the handbook following the implementation of the Strengthening Organic Enforcement rule. The USDA – Economic Research Service (ERS) recently released an article discussing programs created by the USDA from 2021-2023 in response to disruptions to organic markets contributing to a recent decrease in organic certified organic land. The Foreign Agricultural Service (FAS) export data showed February 2024 organic milk exports were 116,554 liters, up the month prior, and up from 2023. Exports of organic milk from the start of the year through February are up, compared to the same time one year ago. The January 2024 European organic milk average pay price increased in Germany and Bavaria compared to December 2023 average pay prices, but decreased in Austria and France. During the last two retail ad surveys, the number or organic dairy ads fluctuated. Total organic dairy ads grew from week 12 to week, but the number of organic dairy commodity in the week 14 retail ad survey was organic yogurt. Cheese ads grew more than any other organic dairy product this week and was the third most advertised organic dairy product. 

NATIONAL RETAIL REPORT: Following the spring holiday weekend, grocers’ total dairy retail advertisement numbers slid lower. Conventional dairy ad totals decreased 32 percent from week 13, while organic retail ads were 64 percent lower. Conventional six -to-eight-ounce shred cheese was the most advertised single item this week, while conventional ice cream ads, in both reported size options, held the next two spots on the list. Half-gallon organic milk ad totals, despite moving lower from last week, were the most advertised organic item.