Year:

Meat

UK Pig Meat Production and Trade Overview (Jan-Apr 2024)

Production and Domestic Market:

• The UK produced 306,400 tonnes of pig meat from January to April 2024, a 0.6% increase from last year due to higher average carcase weights despite lower slaughter rates.
• Domestic pig meat consumption has weakened, with global demand subdued due to high inflation and geopolitical uncertainties.

Imports:

• UK pig meat imports rose by 3% to 251,500 tonnes, primarily sourced from the EU27.
• Fresh/frozen pork imports from the EU27 increased by 4%, with Denmark and Germany as key suppliers.
• Sausage imports grew by 7%, driven by shipments from Germany and Poland.
• Processed pig meat imports declined, while Poland and Ireland maintained significant shares.
• Bacon imports continued to decline, with major supplies from the Netherlands and Denmark.

Exports:

• UK pig meat exports decreased by 3% to nearly 100,500 tonnes, with fresh/frozen pork and bacon shipments falling.
• The EU27, China, Philippines, and USA remained top destinations, with South Africa rising in the rankings.
• Offal exports increased, particularly to China and the Philippines, with China holding a 53% market share.
• Fresh/frozen pork exports fell by 7% to 41,600 tonnes, mainly shipped to the EU27 and China.
• Smaller export volumes for processed pig meat, bacon, and sausage, with Ireland and Spain being key markets.

New Zealand’s Red Meat Industry Faces Continued Challenges

Market Conditions and Outlook:

• Beef + Lamb New Zealand (B+LNZ) reports no significant short-term improvement in Chinese demand for red meat.
• Sheepmeat prices are at multi-year lows due to competition from Australian exports and abundant domestic pork in China, alongside a weak Chinese economy.
• China is New Zealand’s largest market for sheepmeat, deeply influencing domestic lamb and mutton prices.

Economic Factors:

• Chinese sheepmeat prices are lower than during the 2016-17 season.
• China’s economic recovery is uncertain due to property sector issues and low consumer sentiment.
• Official economic indicators from China have decreased, making predictions difficult.
• Medium-term projections suggest a potential recovery in China’s economy and increased disposable incomes.

Industry Perspectives:

• Sam McIvor, B+LNZ CEO, acknowledges tough times for farmers, predicting no short-term relief, especially for sheepmeat farmers.
• Market recovery is seen as a matter of “when” rather than “if.”

Geopolitical Influences:

• Trade tensions, such as US tariffs on Chinese imports and EU-China trade relations, add to market unpredictability.

Long-term Opportunities:

• Despite challenges, China remains a vital market for New Zealand red meat, with nearly half of lamb exports going to China in 2022-23.
• The report underscores opportunities and the importance of safe, nutritious products from New Zealand.

South Korea Opens Beef Imports from France and Ireland, Slowly Removing Trade Restrictions

Recent Developments:

• South Korea has officially opened market access for beef from France and Ireland, ending an import ban in place since 2001 due to BSE (mad cow disease).
• This move comes after South Korea began lifting the beef ban in September 2019, starting with producers from the Netherlands and Denmark.
• The import ban was a source of tension during negotiations for the EU-South Korea free trade agreement, which was eventually ratified in 2015.

Current Status:

• South Korea has now normalized beef trade with Ireland and France, but restrictions remain in place for eight other large beef-exporting countries, including Italy and Poland.
• European producers are hopeful that the remaining restrictions will be lifted soon, allowing all EU member states to export beef to South Korea.

Future Outlook:

• The EU expects that the trust in beef from the EU will lead to market access for beef from the remaining EU member states that have pending applications.
• While there is no clear timeline, there is confidence that all countries will benefit from accessing the Korean market in the near future.

Broader Impact:

• Last year, the EU lifted a ban on imports of ginseng chicken soup from South Korea, which had been in place since 1996.
• Trade in food between the EU and South Korea has increased since the FTA entered into force, from a 5.4% share of the EU’s total food exports to 7.6% in just ten years.

Brazil: Poultry Genetics Exports Grow 10.9% in May

Export Performance:

• Brazilian poultry genetics exports, including 1-day-old chicks and fertile eggs, reached 2,650 thousand tons in May, up 10.9% from last year’s 2,389 thousand tons.
• Revenue from these exports fell 10.6% to US$18.934 million, down from US$21.185 million in the same period in 2023.

Year-to-Date Figures:

• From January to May, poultry genetics exports totaled 12,855 thousand tons, a 2.2% increase from 12,577 thousand tons last year.
• Revenue for the period was US$98.587 million, 12.8% lower than the US$113.053 million recorded last year.

Key Markets:

• Mexico, the main destination, imported 4,750 thousand tons, a 40.6% decrease from the previous year.
• South Africa, a new market, imported 2,955 thousand tons, becoming the second main destination.
• Senegal imported 2,157 thousand tons, a 54.9% increase from last year.

Market Analysis:

• The shift in export destinations towards African nations is attributed to Brazil’s robust health status amid global Avian Influenza impacts.
• Ricardo Santin, president of ABPA, highlights the importance of health status in sustaining high-value-added segment sales.

China Continues to Buy Large Volumes of Beef at Low Prices

Import Trends:

• In the first four months of the year, China imported one million tons of beef, a 22% increase from last year.
• The average price for boneless frozen meat in April was US$4,950, down 35% from the US$7,600 peak two years ago.

Market Dynamics:

• At the recent Sial fair in Shanghai, importers cited weak meat consumption, ongoing bovine herd liquidation, yuan devaluation, post-Covid consumer confidence issues, pork overproduction, and large warehouse stocks as reasons for lower prices.
• China has enabled new supplier countries and authorized new supplier plants in Brazil, increasing competition and supply.

Economic Context:

• Livestock and beef prices have fallen 12-15% in recent months.
• Pork production reached a record 56 million tons this year, adding to the meat supply.

Future Outlook:

• Despite high meat stocks, more recent production dates for imported meat indicate that accumulated stocks are being sold off.
• There is improvement in the retail and food service markets, with potential increases in volumes and prices expected.

Avian Influenza Update: South Africa Calls for Vaccination as Virus Returns to Gabon

South Africa’s Situation:

• South Africa has seen a considerable easing of the highly pathogenic avian influenza (HPAI) situation in poultry flocks in recent weeks.
• However, concerns remain about potential future outbreaks as the country enters the winter months.
• During the last disease season, 10 million poultry were lost to the disease, impacting many small farmers.

Vaccination Challenges in South Africa:

• South Africa’s poultry producers are vulnerable to future outbreaks due to a gap in vaccine development, particularly against H7 variants.
• While vaccines exist for the H5 virus “family,” there is no vaccine for H7 variants.
• The national government has set stringent biosecurity standards for producers to meet before commencing a vaccination program, which are challenging for smaller producers.
• Difficulty in obtaining compensation for culled poultry makes owners reluctant to report ill-health in their birds.

HPAI Returns to Gabon:

• Surveillance samples collected at a market in Libreville, Gabon, have revealed the presence of the H5N1 HPAI virus serotype.
• The source of the virus is unknown, and tracing the farm of origin was not possible.
• This represents the return of the virus to Gabon after a hiatus of more than two years, with the last HPAI outbreak in April 2022.

ABPA & ApexBrasil Promote Seminar to Support Dominican Food Security

Event Overview:

• The Brazilian Animal Protein Association (ABPA), in partnership with ApexBrasil and the Dominican Embassy in Brazil, concluded a successful seminar on food security in Santo Domingo.
• The seminar, named the Dominico Brasileiro Agricultural Meeting, featured local press coverage and attendance by Dominican and Brazilian authorities, including the Dominican Minister of Agriculture, Limber Cruz Lopez, and Brazilian Deputy Secretary of Commerce and International Relations, Julio Ramos.

Attendance and Goals:

• Over 80 importers and local stakeholders attended alongside Brazilian representatives to strengthen ties between Brazil and the Dominican Republic, focusing on food security.
• The event was organized by ABPA’s marketing and commercial promotion team, with key presentations by ABPA’s markets director, Luís Rua.

Key Highlights:

• Luís Rua emphasized Brazil’s sustainable production practices, high sanitary standards, and the diverse range of high-quality poultry and pork products exported to over 150 countries.
• The seminar reinforced Brazil’s commitment to supporting the Dominican Republic’s food security through strong bilateral cooperation.

Statements:

• Luís Rua highlighted the successful interaction with Dominican leaders and society, reiterating Brazil’s partnership in ensuring Dominican food security and its role as a global leader in protein production.

CHILECARNE: Advancing Economic Relations with Indonesia

Event Overview:

• A Chilean delegation, led by the Undersecretary of International Economic Relations, Claudia Sanhueza, successfully concluded its visit to Jakarta as part of a public-private mission to Indonesia and Vietnam.
• Among the participants was the President of ChileCarne, Juan Carlos Domínguez, aiming to open the Indonesian market for Chilean pork and poultry exports.

Meetings and Participants:

• The mission included meetings with the Deputy Minister of Commerce of Indonesia, Dr. Jerry Sambuaga, the Indonesian Quarantine Authority (IQA), and the Deputy Secretary General of ASEAN, Satvinder Singh.
• A day was organized with heads of the ASEAN and Pacific Alliance missions and an information session at the Chilean residence in Jakarta, attended by businesspeople interested in links with Chilean counterparts.
• The leadership of the Indonesian Chamber of Commerce and Industry (KADIN), headed by Shinta W. Kamdani, highlighted the mission’s relevance.

Key Discussions:

• The Chilean Ambassador to Indonesia, Mario Ignacio Artaza, emphasized the commitment to strengthen economic and commercial ties, advancing the negotiation of an investment chapter within the Comprehensive Economic Partnership Agreement (CEPA) and exploring Chile’s potential membership in the Regional Comprehensive Economic Partnership (RCEP).
• Juan Carlos Domínguez highlighted the delegation’s meetings with Indonesian and ASEAN authorities to expand Chile’s export offer in the region and foster new business opportunities.

Economic Context:

• Indonesia, the fourth most populous country, ranks 34th among Chile’s trading partners, with a trade exchange reaching $490 million.
• The mission underscored the need to explore and develop markets in food, mining services, and renewable energy, emphasizing the importance of authorizing meat and dairy exports to leverage the market’s potential.

Statements:

• Juan Carlos Domínguez expressed optimism about the mission’s outcomes and the potential to strengthen mutual knowledge and business possibilities between Chile and Indonesia.
• The mission marked a significant step toward bolstering trade and economic relations, promoting new business opportunities across various sectors in both nations.

Underlying Trends Point to Greater Stability in Beef Market

Market Overview:

• The beef market is anticipated to achieve greater stability in 2025, following the easing of short-term economic and supply impacts.
• Analysis by Hybu Cig Cymru-Meat Promotion Wales’ (HCC) suggests that the longer-term outlook for beef prices could improve despite current small, week-on-week declines.

Current Price Trends:

• Prime cattle prices have been experiencing marginally lower adjustments due to increased domestic supply, higher imports of Irish cattle, and sluggish retail demand.
• Farmgate prices have risen significantly since 2020, but the benefits have been offset by rising key input costs due to high inflation.

Price Movements:

• Deadweight prices for steers started the year near £4.90/kg, peaked at £4.95 in early March, but have since declined to around £4.77/kg. Heifers and young bulls have also seen declines, with heifers at £4.74/kg (-7p yoy) and young bulls at £4.68/kg (-9p yoy).
• The cull cow market has seen positive price movements, standing at around £3.59/kg, 45p higher than the average in early January.

Supply Insights:

• Prime beef cattle and dairy males aged 12-30 months are projected to see a slight increase in numbers, with potential supply up 2% year-on-year at around 1.8 million head as of April 1, 2024.
• However, breeding herd trends over the past decade show a decline due to economic, policy, technological, and environmental pressures.

Future Outlook:

• Domestic supplies are expected to be impacted by the reduction in youngstock numbers, with the potential supply of prime beef cattle and dairy males aged 0-12 months down 3% year-on-year at 1.9 million head.
• This trend, coupled with fewer calf birth registrations, suggests tighter supply further down the line, contributing to greater market stability by the end of 2024 and into 2025.

Statements:

• Glesni Phillips, HCC’s Intelligence, Analysis & Business Insight Executive, noted that these factors are expected to result in a more stable beef market as they take effect towards the end of 2024.

Extreme Weather Threatens Crop Output in Black Sea and US Midwest

Impact on Crop Yields:

• Forecast dryness in the Black Sea region, including Russia and Ukraine, threatens sunflower and corn yields.
• Heavy rain in the US Midwest after near-record temperatures also threatens crops, squeezing world supplies and pushing prices higher.

Weather Conditions:

• Dryness and below-normal rains are expected for July and August in the Black Sea region, potentially crimping corn and sunflower crops.
• Record temperatures in major global growing regions have delayed planting and hurt developing crops.
• Hot weather in southern Russia and parts of Ukraine is expected to impact crops due to lack of soil moisture.
• Excessive rains in the US Midwest and forecasts for more wet weather have raised fears of floods, impacting corn and soybean crops.

Global Implications:

• Global wheat prices jumped to a 10-month high in May due to adverse weather conditions in Russia.
• In Asia, ample rains are expected to alleviate severe dryness in parts of China, while India’s monsoon is likely to recover, boosting agriculture.

Other Regions:

• Weather in Australia is expected to be normal, with some areas receiving higher than average rains, boosting the wheat crop outlook.
• Mainly normal weather is forecast in coming months in Argentina and Brazil.

Impact on Markets:

• The weather forecast has led to concerns about crop damage, which could affect global food supplies and prices.

US Pork Market

In April, US pork exports to Southeast Asia, particularly to the Philippines, Malaysia, and Vietnam, increased by 15% compared to the previous year, reaching 7,669 metric tons and valued at $16.3 million (up 7%). From January to April, exports to the region grew by 9% to 22,480 metric tons, although the value fell by 5% to just under $50 million.

Most US pork entering the Philippines is subject to a 25% duty, lower than the normal out-of-quota rate of 40%. This reduced rate is set to expire at the end of 2024, but there is a proposal to extend it through 2028, currently being considered by Philippine President Ferdinand Marcos Jr.

Seafood

New Poll Shows Strong Voter Support for Sustainable Open Ocean Aquaculture in the U.S.

The Environmental Defense Fund (EDF) has released a new poll showing that 76% of U.S. voters support expanding open ocean aquaculture in a sustainable, environmentally responsible way. The poll also found that 82% of voters believe research can help ensure the safety of the seafood consumed, and there is deep concern over the economy and the cost of living, which respondents believe could be alleviated by aquaculture.

EDF Vice President of Climate Resilient Fisheries and Oceans, Kate Bonzon, emphasized the importance of following science and investing in research to ensure that open ocean aquaculture is done right from the start. The poll, conducted by Global Strategy Group with 800 registered voters, indicates strong support for aquaculture sustainability standards and the role of research in achieving these standards.

The poll results are seen as supporting the aims of the Science-based Equitable Aquaculture Food (SEAfood) Act, a proposed legislation endorsed by EDF. The SEAfood Act would establish an offshore aquaculture assessment program, require government reports on offshore aquaculture regulation, and create a grant program supporting minority-serving educational institutions in building aquaculture centers of excellence.

However, the SEAfood Act has faced opposition from groups like Don’t Cage Our Oceans, who argue that offshore finfish aquaculture poses risks to the environment and local businesses. They claim that the SEAfood Act would encourage big corporations to construct risky trial facilities without proper oversight, potentially leading to environmental disasters.

Chilean seafood exports experienced a sharp decline in May, totaling $648 million, which is a 17.4% decrease compared to the previous year. The decline was led by decreases in exports of fish oil, algae, and salmonids.

Dairy

Understanding and Addressing the Impact of Zoonotic Diseases on Agriculture: Key Takeaways for Farmers

The recent outbreak of highly pathogenic avian influenza (HPAI) among dairy cows serves as a reminder of the risks of zoonotic diseases and their impact on agriculture. Here are some key takeaways for farmers:

1. Zoonotic Disease Transmission: Zoonotic diseases are infectious diseases that can spread from animals to humans. Transmission can occur through direct or indirect contact, vector-borne routes, foodborne or waterborne routes, and through infectious agents like bacteria, viruses, or parasites.
2. History and Increase of Zoonotic Diseases: Zoonotic diseases have been present for centuries, but their prevalence has increased over time. Factors contributing to this increase include urbanization, deforestation, tourism, wildlife trade, and climate change, all of which impact the interactions between humans and animals.
3. Impact on Agriculture: Zoonotic diseases can have a significant impact on agriculture, affecting animal health, productivity, and farm economics. The recent HPAI outbreak in dairy cows led to a reduction in milk production and financial losses for affected farmers.
4. Prevention and Mitigation Strategies: Farmers can take steps to reduce the risk of zoonotic disease transmission on their farms. These include practicing good hygiene, using personal protective equipment, disinfecting workspaces, and being aware of zoonotic diseases in animals and humans.
5. Education and Communication: Educating farm workers about zoonotic diseases and effective communication within the farm team are crucial for preventing disease spread. Understanding disease transmission processes and implementing appropriate measures can help reduce the risk of infection.
6. Continued Vigilance: Zoonotic diseases will continue to be a challenge in agriculture. Farmers should remain vigilant, stay informed about disease outbreaks, and implement best practices to protect themselves, their animals, and their livelihoods.

Overall, the recent bird flu outbreak in dairy cows highlights the importance of proactive measures to prevent and mitigate the impact of zoonotic diseases on agriculture.

The U.S. Dairy Economy in 2024: Promising Trends Amidst Challenges

The U.S. dairy economy is experiencing promising trends in 2024, driven by record exports and increased domestic demand, particularly in cheese. However, several factors, including market unpredictability and production challenges, could impact the sector’s outlook for the remainder of the year.

Key points:

1. Export Growth: Cheese exports have surged in 2024, helping to alleviate a saturated domestic market. Mexico has been a significant buyer, purchasing a large portion of U.S. cheese exports.
2. Market Uncertainty: While exports to Mexico have been strong, exports to China have declined unexpectedly. This shift could be attributed to China potentially looking to export its own dairy products, leading to increased competition in export markets.
3. Domestic Demand: Despite economic challenges faced by consumers, domestic demand for dairy products, including cheese, has increased. This has been supported by promotions from major brands.
4. Production Challenges: Dairy production is steady but slightly lower than in previous years. Bovine influenza A, affecting cows, has led to temporary production declines in infected herds, adding to the overall tightness in the market.
5. Market Projections: For the rest of 2024, projections suggest that class III futures could range between $18 and $20 per hundredweight, with class IV between $20 and $22. However, market volatility remains a significant factor that could impact these projections.

Overall, while the U.S. dairy economy is currently on a positive trajectory, market uncertainties and production challenges underscore the need for continued vigilance and adaptability within the sector.

Read the previous market report: Weekly Animal Protein Market Report

Product Launch:

• Beyond Meat Inc. expands its Beyond IV product line with the fourth generation Beyond Sausage, following the launch of its fourth generation Beyond Burger and Beyond Beef products in February.

Product Features:

• The reformulated Beyond Sausage offers enhanced flavor and a texture that closely resembles animal-sourced meat.
• Made with avocado oil, the new Beyond Sausage boasts a 66% reduction in saturated fat compared to its previous version and provides 17 grams of protein per serving.

Variants:

• Beyond Sausage is available in two flavors: Beyond Sausage Brat Original and Hot Italian. The Hot Italian variant is set to launch later this summer.

Usage and Recommendation:

• According to Diana Stavaridis, senior culinary manager at Beyond Meat, the new Beyond Sausage is versatile and perfect for summer gatherings. It can be used in classic dishes like sausage, peppers, and onions, or as a protein topping for pastas, salads, and more. The sausages grill and sear well due to the addition of avocado oil.

Financial Performance:

• In its most recent quarterly earnings report, Beyond Meat reported a loss of $54.4 million, slightly better than the previous year’s loss of $59 million.
• Quarterly sales fell 18% to $75.6 million from $92.2 million the year before.

Related: Choosing Between Beyond Meat & Hormel Foods

The FAO’s recent report on food product outlooks for 2024 highlights a diverse landscape in the livestock sector, with varying production trends across different regions. Here are the key findings:

Overall Meat Production Trends:

• Global animal protein production is expected to reach 371 million tons by next year.
• Most regions are expected to see positive growth, except Asia, where a decline is projected due to reduced pork processing in China.

Poultry Leading the Way:

• The poultry sector, specifically chicken meat, is expected to see the most significant increase.
• The FAO predicts a 0.8% year-on-year growth, adding 1.1 million tons to reach a total of 146 million tons.
• This growth is driven by strong consumer demand, affordability of chicken meat, and challenges such as outbreaks of Highly Pathogenic Avian Influenza.

Beef Production on the Rise:

• Beef production is set to rise by 0.7% in 2024, adding 0.5 million tons.
• This growth is attributed to the availability of cattle for processing, but economic gains are not expected to be significant due to high beef prices.

Pork Prospects in China:

• Global pork production is projected to decrease by 0.9%, primarily due to China’s efforts to control oversupply and stabilize prices.
• This decline is expected to be approximately 1.2 million tons compared to 2023.

Conclusion:

• Poultry meat consumption is expected to remain strong, with total consumption reaching 91 million tons by 2032.
• The top 3 producers of poultry meat, China, Brazil, and the USA, are expected to continue being key players in the international market.
• The FAO’s report provides valuable insights for policymakers, producers, and consumers as they navigate the evolving landscape of meat production.

Read: Report on the World’s Largest Animal Feed Companies

China’s Retaliatory Move
China’s recent anti-dumping investigation into pork imports from the EU marks a significant escalation in trade tensions. This move is seen as a response to the EU’s tariffs on Chinese electric vehicles. While the EU denies accusations of unfair subsidies, the probe is expected to particularly affect major pork suppliers like Denmark, the Netherlands, and Spain.

Limited Impact on China’s Meat Market
Despite being the world’s largest pork producer, consumer, and importer, EU pork imports account for just 5% of China’s total consumption. However, China is already grappling with oversupply issues in its domestic pork market, leading to deflationary pressures. The oversupply is a result of a recovery in pig numbers following the devastation caused by African swine fever between 2018 and 2021.

Oversupply and Weak Consumption
China’s pig population rebounded to 434 million last year, up from a low of 310 million in 2019, despite labor shortages during the pandemic. This recovery has led to falling pork prices, exacerbating deflationary concerns. Weak domestic consumption, influenced by factors such as disposable income growth and changing dietary habits, has contributed to the oversupply issue.

EU’s Response and Potential Impact
The EU is compelled to participate in the investigation, which could lead to a loss of market share in China. Any restrictions on EU exports could benefit suppliers from the Americas, and Russia, a close trading partner of China, could increase its meat shipments. A full suspension of EU pork exports to China would have significant implications for the pork supply chain across the EU.

Conclusion
China’s anti-dumping investigation into EU pork imports comes at a critical juncture for both parties. While the immediate impact on China’s meat market may be limited, the investigation could have far-reaching consequences for EU pork exports. The outcome of this probe will not only affect the pork industry but also highlight the broader implications of escalating trade tensions between the EU and China.

Recent: China Approves Imports of Danish Crown Processed Pork

Industry Updates: A Recap of Recent Developments

China Lifts Embargo on Five Australian Beef Plants: China’s decision to lift import bans on five major Australian beef processing facilities is expected to significantly boost Australian beef shipments to China, marking a positive turn in bilateral trade relations. This move follows years of strained relations between the two countries, with China imposing various trade restrictions on Australian goods. The lifting of the embargo is seen as a step towards normalizing trade ties and reopening access to one of Australia’s most important export markets for beef.

Provisional Anti-Dumping Measures Considered for EU Pork Imports: China is contemplating provisional anti-dumping measures on pork imports from the European Union following a year-long probe, citing concerns about dumping causing harm to domestic industry. The Chinese commerce ministry’s statement indicates that if dumping is confirmed to have occurred and caused injury to domestic producers, provisional anti-dumping measures may be imposed. This development adds to the ongoing trade tensions between China and the EU, particularly in the agricultural sector.

Dr. Robert Redfield Predicts Bird Flu Pandemic: Former CDC Director Dr. Robert Redfield warns of an impending bird flu pandemic, emphasizing the virus’s significant mortality rate in humans and the complexity of addressing such an outbreak. Redfield’s prediction underscores the importance of global preparedness efforts and the need for increased surveillance and monitoring of avian influenza strains. The potential for a bird flu pandemic highlights the ongoing threat posed by zoonotic diseases and the challenges of preventing their spread across species barriers.

Decline in China’s Pork Imports Continues: China’s pork imports have continued to decline, with May imports down 11.1% from the previous month and 41.1% lower than a year ago, reflecting shifting market dynamics and supply shocks. The significant drop in imports highlights China’s efforts to stabilize its domestic pork market, which has been affected by factors such as African swine fever and changes in consumer preferences. The decline in imports may have implications for global pork markets, impacting producers and exporters around the world.

Avian Influenza Outbreak in Iowa Dairy Farm: The Iowa Department of Agriculture reports another outbreak of highly pathogenic avian influenza (H5N1) in a Sioux County dairy herd, marking the seventh outbreak in Iowa since June and highlighting ongoing challenges in managing the virus. The outbreak underscores the continued threat posed by avian influenza to the poultry industry and the importance of biosecurity measures to prevent its spread. The impact of the outbreak on the affected dairy farm and the broader industry is yet to be fully determined, but it is likely to result in significant economic losses.

Low Immunity to H5N1 in US Population: The CDC’s findings of low immunity to the H5N1 avian flu virus in the US population raise concerns about susceptibility if the virus becomes more transmissible among humans, despite the low current risk to the general public. The findings highlight the importance of surveillance and monitoring of avian influenza strains to detect any changes that could increase their threat to human health. The implications of low immunity underscore the need for continued vigilance and preparedness for potential pandemics.

Cheese Reporter Acquisition: Cheese Reporter, a prominent dairy trade publication, has been acquired by Meliora Group, LLC. The publication, known for its extensive coverage of the dairy industry, will continue under new ownership with the current editor remaining in place. The acquisition is expected to bring new opportunities for growth and innovation to Cheese Reporter, enhancing its position as a leading source of news and information for the dairy industry. The move reflects Meliora Group’s commitment to investing in quality journalism and supporting the dairy sector’s information needs.

Indiana Refrains from Mandatory Dairy Cattle Testing: Indiana’s decision not to mandate testing for dairy herds amid the spread of bird flu in neighboring states reflects a balanced approach to managing the disease while minimizing disruptions to the dairy industry. The decision is likely influenced by considerations of cost, feasibility, and the need to avoid unnecessary burdens on dairy farmers. Indiana’s stance contrasts with other states that have implemented mandatory testing requirements, highlighting the complexity of managing disease outbreaks in the agriculture sector.

Norwegian Seafood Council Unveils Top Consumer Trends Report: The Norwegian Seafood Council’s fourth annual Top Seafood Consumer Trends report highlights the adoption of technology and innovation as key trends in the seafood industry, unveiled at THAIFEX – Anuga Asia 2024. The report provides insights into changing consumer preferences, buying behavior, and industry developments, offering valuable information for seafood producers, retailers, and policymakers. The focus on technology and innovation underscores the seafood industry’s efforts to adapt to evolving consumer demands and market dynamics, reflecting a broader trend towards sustainability and responsible sourcing.

Squid Market Faces Supply Fluctuations and Rising Freight Costs: The squid market is navigating a complex landscape, with conditions varying based on species and origin. In the US, the supply of Chinese Loligo squid is ample, but prices have decreased due to lackluster demand. The market is also facing increasing freight costs, adding to the challenges for suppliers and buyers. These dynamics highlight the need for careful market analysis and strategic planning to navigate the complexities of the global squid trade.

These updates reflect the dynamic nature of the food industry, highlighting key trends and challenges faced by various sectors.

Smithfield Foods Denies Diversity Hiring Targets White Males Amid Allegations from Trump-Aligned Law Firm

Smithfield Foods’ global headquarters, situated on the banks of the Pagan River, has recently come under scrutiny by America First Legal (AFL), a law firm established by former Trump administration officials. The firm has called on the U.S. Equal Employment Opportunity Commission (EEOC) and Virginia Attorney General Jason Miyares to investigate Smithfield Foods, claiming the company’s diversity hiring initiatives discriminate against white males.

Allegations and Response

In letters dated June 13, AFL accused Smithfield of using race, color, and sex as motivating factors in its employment practices. The allegations are rooted in Smithfield’s 2023 sustainability report, which outlines the company’s goals to increase racial and gender diversity in leadership positions and enhance production facility spending with minority-owned businesses.

Ray Atkinson, Smithfield’s senior director of external communications, dismissed the allegations as “logistically and legally flawed.” He emphasized that providing opportunities for underrepresented minorities does not equate to discrimination against white males.

“The fact that we are providing opportunities for previously underrepresented minorities to advance their careers does not mean we are discriminating against anyone,” Atkinson said. “Smithfield is committed to a culture in which every employee is engaged and in which merit is the ultimate criteria for all employment decisions.”

Details of the Allegations

The contentious language in Smithfield’s sustainability report pledges to increase racial diversity in leadership by promoting and hiring qualified Black, Hispanic, and other underrepresented individuals to positions of supervisor and above, aiming for 30% representation by 2030. Additionally, the company aims to increase female leaders in supervisory roles to 35% and boost spending with minority-owned businesses by 14% by 2025 to create a more inclusive supply chain.

AFL’s letter to the EEOC characterized these goals as “targeting white males based on their skin color,” while the letter to Miyares alleged that Smithfield is “working hard to intentionally reduce the number of white men in Smithfield’s workforce.”

Legal and Community Reactions

The EEOC and Miyares’ office have both declined to comment on the letters. Meanwhile, Isle of Wight County’s NAACP chapter deferred to the statewide branch, which has not yet responded to requests for comment.

America First Legal, led by ex-Trump adviser Stephen Miller, has actively challenged diversity-focused hiring practices, filing at least 35 complaints and requests for investigation with the EEOC since 2022. Previous targets include prominent organizations such as Disney, the National Football League, and NASCAR.

Gene Hamilton, AFL’s Executive Director and former counselor to ex-Attorney General Bill Barr, expressed strong opposition to corporate diversity goals in a news release. “All Americans deserve equal treatment under the law, and none should ever face discrimination because of the color of their skin,” Hamilton said. “When Corporations adopt arbitrary goals related to the demographics of their workforce, they essentially provide both a license and a mandate to their HR departments to discriminate against certain people because of a characteristic completely outside of their control. It is wrong, it is illegal, and it must end.”

Smithfield’s Defense

Smithfield Foods stands by its diversity initiatives, arguing that these efforts are crucial for fostering an inclusive and equitable workplace. Atkinson reiterated that merit remains the cornerstone of all employment decisions at Smithfield.

“Our goal is to create opportunities for all qualified individuals, regardless of their background,” Atkinson stated. “Our commitment to diversity and inclusion is about recognizing the value that different perspectives bring to our organization and ensuring that every employee has the chance to succeed based on their abilities and contributions.”

Broader Implications

The controversy surrounding Smithfield Foods is part of a larger national debate over diversity and inclusion efforts within corporate America. AFL’s aggressive stance against such initiatives reflects a growing backlash among some conservative groups, who argue that diversity policies can lead to reverse discrimination.

In 2021, AFL represented Texas Department of Agriculture Commissioner Sid Miller in a lawsuit against a USDA loan forgiveness program for minority farmers, claiming it was discriminatory against whites. A federal judge’s injunction on the program led to the passage of the 2022 Inflation Reduction Act, which included $3.1 billion in loans for financially troubled farmers of any race and $2.2 billion for demographics that experienced past discrimination by the USDA’s farm lending program.

AFL is also involved in Project 2025, a strategic plan by the Heritage Foundation aiming to prepare conservative officials for dismantling the administrative state if a Republican wins the 2024 presidential election. Additionally, the firm filed an amicus brief with the U.S. Supreme Court supporting Trump’s claim of “presidential immunity” from prosecution related to his efforts to overturn the 2020 election results.

Conclusion

As Smithfield Foods navigates these legal challenges, the case underscores the complexities and contentious nature of diversity initiatives in corporate America. The outcome of this investigation could have significant implications for how companies implement and defend their diversity and inclusion policies. Smithfield Foods maintains that its practices are fair and inclusive, aiming to reflect the diverse communities it serves while ensuring merit-based advancement for all employees.

More company news: EEOC Lawsuit Against Smithfield Foods

In a significant legal victory, Cargill Inc. has been cleared of paying approximately $20 million in damages for its early response to the COVID-19 pandemic. The ruling, delivered by Canadian arbitrator James Casey, underscores the complexities and challenges faced by companies during the initial outbreak of the virus.

Background of the Case

The case centered around Cargill’s High River beef processing plant, which became a COVID-19 hotspot in the early months of the pandemic. According to a report from the Calgary Herald, the outbreak at the plant was linked to three deaths and 951 confirmed cases of COVID-19. The individuals who lost their lives included two employees, Hiep Bui and Benito Quesada, and Armando Sallegue, the father of a Cargill employee.

For the past four years, the United Food and Commercial Workers Local (UFCW) No. 401 union had been advocating for the victims and their families, seeking justice and compensation for what they argued was a failure on Cargill’s part to provide a safe working environment.

Arbitrator’s Decision

In his June decision, arbitrator James Casey highlighted the rapidly evolving nature of the pandemic response in early 2020. He noted that public health authorities, governments, employers, and unions were all grappling with how best to manage the unprecedented public health crisis.

“Public health authorities, governments, employers and unions were all struggling with determining the best way to respond to this public health crisis,” Casey wrote. “Advice from public health authorities and governments was rapidly changing and evolving sometimes on a daily basis.”

Casey further elaborated on the arbitration process that began in April 2023, acknowledging that the understanding of safety measures such as masking, physical and social distancing, and isolation had evolved significantly since the early days of the pandemic. This evolution in understanding continued to influence the arbitration discussions.

Cargill’s Critical Role

At the onset of the pandemic, Cargill, along with other food processors, was designated as critical infrastructure in both Canada and the United States. This designation meant that despite the rising health risks, these facilities were ordered to remain operational to ensure the continuity of food supply chains.

The union argued that Cargill had failed to maintain a safe working environment during this critical period. However, Casey’s decision emphasized that Cargill’s actions were based on the knowledge available from late February to April 2020.

“The conclusions that Cargill took appropriate action to protect the safety of employees during this period are based on what Cargill knew and should have known during the relevant time frame,” Casey wrote. “It is not appropriate to second-guess Cargill’s decision based on current scientific knowledge about COVID and current regulatory advice.”

Union’s Response

The UFCW Local 401 expressed disappointment with the arbitrator’s ruling but acknowledged the complexities highlighted in the decision. The union emphasized that their fight was driven by a commitment to ensuring worker safety and holding employers accountable during unprecedented crises.

“We fought for justice for our members who suffered and lost their lives during this outbreak,” a union spokesperson said. “While we are disappointed with the outcome, we recognize the challenges faced by all parties during the early days of the pandemic.”

Cargill’s Commitment to Safety

In response to the ruling, Cargill reiterated its commitment to employee safety and highlighted the measures it implemented during the pandemic. The company stated that it had followed guidance from public health authorities and had taken significant steps to protect its workforce.

“We are relieved by the arbitrator’s decision, which recognizes the efforts we made to safeguard our employees during an incredibly challenging time,” a Cargill representative said. “We remain committed to the health and safety of our team members and will continue to follow best practices and guidance from health authorities.”

Implications of the Ruling

The ruling sets a precedent for how companies’ responses to the COVID-19 pandemic may be evaluated in future legal contexts. It underscores the importance of considering the knowledge and circumstances at the time of decision-making rather than applying hindsight based on current understandings.

Legal experts note that this decision could influence other cases where companies are being scrutinized for their pandemic responses. The emphasis on rapidly changing public health guidance and the challenges faced by essential industries during the pandemic will likely be critical factors in such evaluations.

Conclusion

The arbitrator’s decision to clear Cargill of liability for its early pandemic response highlights the complexities of managing a public health crisis with limited and rapidly changing information. While the union’s efforts to seek justice for the affected workers and their families are commendable, the ruling recognizes the constraints and challenges faced by companies designated as critical infrastructure during unprecedented times.

As the world continues to navigate the ongoing impacts of the COVID-19 pandemic, this case serves as a reminder of the importance of adaptability, collaboration, and informed decision-making in the face of evolving threats.

Related company news: Cargill Strikes: Far-Reaching Industry Impact

Cargill Strikes: A Potential Industry Backfire with Far-Reaching Impacts

At the time of writing, the strikes at Cargill meat plants may have concluded at the Guelph, Ontario facility, but the ramifications could be just beginning. This particular plant, which has been on strike for over two weeks, processes 80% of Ontario’s beef cattle. Simultaneously, the Cargill meat fabrication plant in Calgary has voted to strike, although the exact timing remains undetermined. It’s crucial to note that the Calgary facility is distinct from the Cargill High River slaughter plant, which operates under a different labor agreement with the same union, the United Food and Commercial Workers International Union (UFCW).

High Stakes for Cargill and the Industry

The existing labor agreement at the Cargill High River plant, established two years ago, has already made it the costliest Cargill slaughter plant in North America. Should the settlements at both Guelph and Calgary lead to even higher operational costs, these Canadian plants could become Cargill’s most expensive facilities. This financial pressure puts Cargill in a precarious position, potentially incentivizing the company to relocate its meat processing operations to less costly U.S. plants.

Given the significant capital investment required in the meat packing and processing industry, companies like Cargill continually seek to reduce costs. High labor costs at Canadian plants could prompt Cargill to shift production to new, high-tech, automated facilities closer to the Canadian border. This strategic move would reduce dependence on the more expensive Canadian operations, leaving Canadian workers at risk of job loss due to their high UFCW labor contracts.

The Human Element: Worker Rights vs. Economic Realities

The desire for higher wages, improved working conditions, and additional benefits among meat plant workers is understandable. The work is strenuous and monotonous, with high turnover rates underscoring the challenging nature of the job. However, despite Cargill’s contract offers, UFCW negotiators have rejected these proposals, prolonging the strikes. This situation is costly for out-of-work union members, as wage losses during strikes are often not fully recouped.

Historically, strikes have been a necessary tool for workers to achieve economic progress. However, there is a critical juncture where continuing a strike becomes financially unviable. Unfortunately, this is seldom communicated to striking workers by union leaders, leading to extended strikes that may not yield proportional financial benefits for the workers.

Market Impact: From Cattle Producers to Consumers

Increased costs in meat packing and fabrication inevitably lead to higher retail meat prices. With consumers already facing sticker shock at grocery stores, the sight of $40 steaks and $80 roasts only exacerbates the issue. As prices soar, consumer demand tends to drop, creating a ripple effect throughout the supply chain. Meat processors will place pricing pressure on their suppliers, which includes feedlots and, ultimately, cow/calf producers. This downward pricing pressure can have severe consequences for primary producers, who are already struggling with thin margins.

The cattle industry, particularly in Alberta, has been facing a steady decline. This decline is not solely due to price cycles but also because many primary producers are retiring or quitting due to unprofitability. The sustainability of Alberta’s cattle industry is further jeopardized by these strikes, which could exacerbate the economic challenges faced by primary producers.

Grocers’ Code of Conduct: A Double-Edged Sword

Adding another layer of complexity is the potential implementation of a grocers’ code of conduct. This code aims to curtail the dubious buying practices of major grocery retailers, which often disadvantage wholesale suppliers. While the code’s intention is to protect suppliers, the reality is that major retailers could sidestep these regulations and continue to exert downward pricing pressure on meat suppliers. This would trickle down to feedlots and primary producers, further squeezing their already tight profit margins.

A Grim Outlook for the Meat and Livestock Industry

The current situation paints a bleak picture for the meat and livestock industry. Strikes at Cargill plants, while aimed at improving worker conditions, could backfire, leading to significant job losses and higher operational costs that may force Cargill to relocate production to the U.S. The resultant increase in meat prices will likely reduce consumer demand, creating a domino effect that pressures all levels of the supply chain, from feedlots to cow/calf producers.

Additionally, the potential implementation of a grocers’ code of conduct could inadvertently harm primary producers further by reducing their returns. The cumulative impact of these factors could accelerate the decline of the cattle industry in Alberta and beyond, making it increasingly difficult for producers to sustain their operations.

Conclusion

The ongoing Cargill strikes, while a fight for fair labor practices, highlight the delicate balance between worker rights and economic sustainability. The potential for these strikes to drive up costs and disrupt the meat supply chain underscores the need for strategic decision-making and compromise. Without careful consideration, the repercussions could extend far beyond Cargill, affecting the entire meat industry and the livelihoods of those who depend on it. As the industry navigates these challenges, it must strive to find solutions that support both workers and producers, ensuring long-term viability and stability.

Related: More Labour Disruptions Loom at Cargill

Pilgrim’s Pride Set for Significant Growth Amid Rising Demand for Chicken

Shares of Pilgrim’s Pride Corp (NASDAQ) have demonstrated significant volatility in early trading on Tuesday. However, this volatility masks a promising future as the company is set to benefit from rising chicken demand across both full-service restaurants and fast-food chains, according to a recent report by Argus Research.

Analyst’s Optimistic Outlook

John Staszak, an analyst from Argus Research, initiated coverage of Pilgrim’s Pride with a Buy rating and a price target of $41. Staszak’s optimism is rooted in the company’s ability to generate low single-digit supply growth over the next five years, driven by a surge in demand for chicken.

Drivers of Growth: Health and Income Trends

Health-Conscious Consumers in Mature Markets

One of the primary drivers behind Pilgrim’s Pride’s anticipated growth is the shifting consumer preference toward healthier protein options. In mature markets such as the U.S. and Europe, chicken is increasingly favored over other proteins like beef, pork, and turkey. This trend is largely due to the health-conscious decisions of consumers who perceive chicken as a leaner and healthier option. The growing awareness of health and wellness continues to steer consumers towards making more nutritious dietary choices, positioning chicken as a preferred protein source.

Rising Incomes in Emerging Markets

In addition to health trends in mature markets, emerging markets present a robust growth opportunity for Pilgrim’s Pride. As incomes rise in these regions, the demand for affordable and accessible protein sources like chicken is expected to increase. Staszak highlights that income growth in emerging markets will significantly boost chicken sales, complementing the health-driven demand in developed countries.

Strategic Initiatives and Financial Position

Overcoming Supply Chain Challenges

Pilgrim’s Pride faced considerable supply chain headwinds in early 2023, but the company is now poised for margin expansion. This turnaround is attributed to strategic adjustments and resilience in navigating supply chain disruptions. As the company stabilizes its operations, it is well-positioned to capitalize on the growing demand for chicken.

Investment in Growth Initiatives

Pilgrim’s Pride plans to leverage its strong cash flow to fuel growth initiatives. The company is expected to exceed its capital expenditures guidance, indicating a proactive approach to expanding its production capabilities and market reach. By investing in infrastructure and technology, Pilgrim’s Pride aims to enhance its operational efficiency and meet the increasing market demand effectively.

Competitive Advantage in the Protein Market

Pilgrim’s Pride’s strategic focus on chicken aligns with broader market trends favoring poultry over other proteins. This alignment offers a competitive advantage as the company can tap into the growing preference for chicken, driven by both health trends and economic factors.

Meeting Full-Service and Fast-Food Demand

The ongoing beef shortages have further catalyzed the demand for chicken, particularly in the foodservice sector. Both full-service restaurants and fast-food chains are turning to chicken as a reliable and cost-effective alternative. Pilgrim’s Pride’s ability to supply high-quality chicken products positions it as a key player in addressing this demand.

Financial Performance and Market Position

Stock Performance

Despite the early trading volatility, shares of Pilgrim’s Pride rose by 1.6% to $35.30 at the time of publication on Tuesday. This uptick reflects investor confidence in the company’s growth prospects and strategic direction. Staszak’s Buy rating and $41 price target underscore the positive sentiment surrounding Pilgrim’s Pride’s future performance.

Robust Financial Health

Pilgrim’s Pride’s strong financial position enables it to invest in growth initiatives without compromising its stability. The company’s robust cash flow and prudent financial management provide a solid foundation for sustained growth and expansion in both mature and emerging markets.

Future Outlook

The combination of health-conscious consumer trends, rising incomes in emerging markets, and strategic investments positions Pilgrim’s Pride for substantial growth in the coming years. The company’s proactive approach to overcoming supply chain challenges and expanding its production capabilities further strengthens its market position.

Embracing Technological Advancements

Pilgrim’s Pride’s focus on leveraging technology to enhance operational efficiency is a crucial aspect of its growth strategy. By embracing advancements in production and supply chain management, the company can streamline its processes, reduce costs, and improve product quality. This technological edge will be instrumental in meeting the rising demand for chicken while maintaining competitive pricing.

Sustainability and Ethical Practices

As consumer awareness of sustainability and ethical practices grows, Pilgrim’s Pride’s commitment to responsible sourcing and production methods will play a vital role in its market appeal. The company’s efforts to implement sustainable practices throughout its supply chain will not only meet consumer expectations but also contribute to long-term growth and brand loyalty.

Conclusion

Pilgrim’s Pride is on the cusp of significant growth, driven by rising demand for chicken, health-conscious consumer trends, and strategic investments in emerging markets. Analyst John Staszak’s optimistic outlook, reflected in his Buy rating and $41 price target, highlights the company’s potential to achieve low single-digit supply growth over the next five years. By capitalizing on its strong financial position, overcoming supply chain challenges, and investing in growth initiatives, Pilgrim’s Pride is well-positioned to become a leading player in the global protein market.

Related: Pilgrims Pride Factory Closure – 270 Jobs at Risk

Introduction

Brazil’s BRF SA, the world’s largest poultry exporter, found itself embroiled in a significant scandal that shook its foundations. The arrest of former CEO Pedro Faria and other top executives marked a critical point in the ‘Weak Flesh’ investigation, which unveiled widespread fraud to circumvent food safety regulations.

Operation Weak Flesh: The Unraveling

‘Operation Weak Flesh’ was a police investigation that exposed the depths of corruption within Brazil’s food processing industry. Launched in response to allegations of bribery of food-sanitation inspectors at BRF and other food processors across the country, the operation uncovered a network of deceit that extended to the highest levels of the company.

The Allegations

The investigation alleged that BRF executives, including Pedro Faria, were aware of and involved in fraudulent activities aimed at evading food safety checks. These activities included bribing inspectors, falsifying export documents, and manipulating test results to allow the sale of tainted meat products.

Fallout and Repercussions

The revelations had far-reaching consequences for BRF. The company’s stock plummeted by 19 percent on the Sao Paulo stock exchange following the arrests, reflecting investor concerns about the company’s leadership and integrity. The scandal also led to a 1.1 billion reais loss for BRF, its worst ever, due in part to the fallout from the investigation.

Legal and Regulatory Response

In response to the scandal, Brazilian authorities took swift action. Former CEO Pedro Faria was arrested in Curitiba, Paraná, along with Hélio dos Santos Júnior, BRF’s former vice president of global operations. The arrests were part of a broader crackdown on corruption in the food industry, with scores of people, mostly inspectors, accused of accepting bribes.

Company Response and Future Outlook

BRF, for its part, has stated that it is cooperating with the investigation to clarify the facts of the case. The company has also faced pressure from major shareholders to overhaul its board of directors and replace Chairman Abilio Diniz.

Conclusion

The ‘Weak Flesh’ scandal has had a profound impact on BRF and the wider food industry in Brazil. It has exposed the vulnerabilities in the food safety system and highlighted the need for greater transparency and accountability. The arrests of top executives, including the former CEO, signal a turning point in the fight against corruption in the industry, but also serve as a stark reminder of the consequences of unethical behavior.

Source: BRF Signs Strategic Agreement with SALIC for Food Emergency Supply