Demand for beef is rising
According to Farm Bureau, the May Cattle on Feed report estimated lower placements of cattle on feed – normal for this time of the year – but with higher marketings. In addition, much-needed moisture is helping improve pasture conditions across the country, giving farmers a reason to retain heifers for breeding purposes. While this would be the first step to expanding the U.S. beef herd again, a smaller 2024 calf crop projected by USDA means the first opportunity for expansion of the cattle inventory will not occur until 2025 as cattle feeders continue to add weight to what they already have in feedlots rather than adding more cattle. Domestic demand for beef is still strong but tight supplies will continue to drive up grocery store prices through 2025, which will drive down consumer demand for beef, according to USDA forecasts.
USDA proposes next steps to promote fairer poultry markets, protect producers, and enhance transparency
The U.S. Department of Agriculture announced the next steps it is proposing to address the many, complex competition issues in agricultural markets and create a fairer playing field for poultry growers and farmers. USDA is proposing the rule Poultry Grower Payment Systems and Capital Improvement Systems, to address a range of abuses that have occurred in relation to grower ranking (commonly known as “tournament”) payment systems and additional capital investment requirements that poultry companies commonly ask of their contract growers for broiler chicken. This rule is the third in a suite of Packers and Stockyards Act rules that USDA has undertaken to create fairer markets, which ultimately can lead to lower grocery prices for hardworking families.
USDA is also announcing new publicly available cattle market transparency tools. These and previous actions are intended to enhance transparency, stop retaliation and discrimination, reduce costs, and support market fairness in a range of circumstances, furthering the Department’s efforts as part of President Biden’s historic Executive Order on Promoting Competition in the American Economy.
If finalized, the proposed rule would prohibit deductions from the base price in contracts for broiler chicken growers, permitting only bonuses for performance. It would also provide critical tools to enable growers to better identify risks that may arise on capital improvement practices and enhance the ability for USDA to enforce existing prohibitions on unfair capital improvement practices. The rule would also establish a duty of fair comparison to ensure grower comparisons (aka tournaments) are conducted in a reasonable and equitable way that does not disadvantage specific growers.
USDA is also finalizing a series of rules under the Packers and Stockyards Act as part of President Biden’s Executive Order on Promoting Competition in America’s Economy. These rules complement a series of other all-encompassing actions by USDA to increase competition in agricultural markets, create a fairer playing field for farmers, lower grocery costs for consumers, and strengthen local and regional food systems.
Actions include enhancing independent meat and poultry and other diversified food processing capacity, expanding domestic, innovative fertilizer production, creating a fairer market for seeds and other agriculture inputs, investing in State Attorney General enforcement capacity to crack down on practices including unfair pricing, and supporting more robust and resilient supply chains. These investments will create better economic opportunities, which will result in more affordable prices and choices for consumers at the grocery store, in addition to more opportunities and revenue for producers.
To complement these regulatory actions, USDA is launching a new data visualization tool known as the Livestock Mandatory Reporting (LMR) Live Cattle Data Dashboard which will provide users the ability to view and access LMR live cattle market information in a manner that is easy to use and understand. AMS also will begin publishing additional information on the actual net premiums and discounts paid to cattle producers by packers under formula marketing arrangements and detailed quality grade price distribution information in hopes of placing producers on a more equal footing with large volume data users and to foster a fairer and more competitive marketplace.
AMS is currently conducting demos and testing with interested stakeholders with public access to this dashboard becoming available later this summer.
Third farmworker ill from bird flu, USDA increases farm aid
According to the Hagstrom Report, U.S. government officials announced that the USDA will use $824 million from the Commodity Credit Corporation to bolster its current efforts to mitigate H5N1 in dairy cattle, and to launch a new Voluntary H5N1 Dairy Herd Status Pilot Program to give dairy producers more options to monitor the health of their herds and move cows more quickly while providing ongoing testing and expanding USDA’s understanding of bird flu after a third dairy worker contracted the disease.
The first two farmworkers who were infected with bird flu, one in Texas and one in Michigan, developed conjunctivitis, better known as pink eye. But the third infected farmworker, who is in Michigan and had direct exposure to an infected cow, has respiratory symptoms, which are potentially more serious.
USDA noted in a news release that the new funding is in addition to the previously approved use of $1.3 billion in emergency funding to address nationwide detections in wild birds and commercial poultry operations.
The Voluntary H5N1 Dairy Herd Status Pilot Program aims to create additional testing options for producers with herds that have tested negative for three weeks in a row, further reduce H5N1 virus dissemination, provide for further opportunities to test herds that are not known to be affected with H5N1, increase surveillance and knowledge of the disease, and to support an overall national program to reduce the risk of H5N1 in dairy herds.
Participating producers who test negative for three consecutive weeks will be able to move animals without additional pre-movement testing currently required under the Federal Order, but they must comply with continued regular weekly monitoring and testing of the herd.
USDA strongly encourages dairy producers to enroll in this new program. Beyond the benefits for their own operations, increased producer participation may help USDA to establish state and/or regional disease-free statuses that could further ease compliance with the current federal order.
To further help mitigate the spread of H5N1 on American soil, APHIS announced that it is restricting the importation of poultry, commercial birds, ratites, avian hatching eggs, unprocessed avian products and byproducts, and certain fresh poultry products from the state of Victoria, Australia while they consider all other states in Australia to be unaffected by HPAI and not subject to restriction.
Over 900 ag groups advocate for ‘federal fix’ against Prop 12
According to Meat + Poultry online, over 900 agricultural groups joined a coalition to ask Congress to implement a “federal fix” to California’s Proposition 12.
Led by the National Pork Producers Council (NPPC) and the American Farm Bureau Federation (AFBF), the letter sent on May 21 to House Agriculture Committee Chairman G.T. Thompson (R-Pa.) and Ranking Member David Scott (D-Ga.) laid out several arguments for damaging consequences of Prop 12.
The groups urged Congress to include a provision in the 2024 Farm Bill to prevent the possibility of conflicting state laws throughout the country that could complicate interstate commerce, and stated that without action taken to address the Prop 12 decision, the agriculture community fears massive compliance costs and forced consolidation throughout the industry.
According to studies conducted by economists at North Carolina State University and Iowa State University, constructing new, Prop-12-compliant barns can cost 40% more than traditional barns and 25% more than conventional group housing, not including the estimated 15% higher operating costs caused by reduced productivity.
Other concerns brought up in the letter include the negative impact legislation like Prop 12 could have on relationships with longstanding trade partners as “it undermines the ability of the United States to negotiate trade agreements across the globe” and “puts the United States at risk of retaliatory action on American agricultural products.”
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