Livestock

Consumers want “natural” meat—and the biggest meat companies want to sell it to them. American shoppers are reaching for healthier, more environmentally and animal-friendly meat products, with 39 percent saying “all-natural” is the most important claim when purchasing red meat, according to a recent survey by Mintel. But there’s one problem: The U.S. Department of Agriculture says that when it comes to meat and poultry, the term “natural” means only that the product has no artificial ingredients and has been minimally processed. It doesn’t mean anything when it comes to antibiotics, hormones or preservatives. Companies such as Tyson Foods Inc., Pilgrim’s Pride Corp. and Hormel Foods Corp. have been snapping up smaller, outwardly progressive competitors in the burgeoning organic food space, seeking to capitalize on changing consumer tastes. At the same time, however, some of the major meat companies have been offering their own products as “natural,” replete with labels featuring blue skies and green fields. On April 8, the Superior Court of the District of Columbia—a jurisdiction with stringent consumer protection laws—dismissed a lawsuit by the Animal Legal Defense Fund (ALDF) alleging Hormel was misleading consumers. The court held that as long as manufacturer labels are approved by the USDA, the advertising can use the “natural” claims. “[I]f a producer can accurately use a term in a label,” the court wrote, “the producer should be able to use the same term in its advertising.” Hormel said in its most recent quarterly filing that its “Natural Choice” line of meats “showed excellent growth.” But in a 600-plus-page court filing in January, in which Hormel responded to the ALDF lawsuit, the company disclosed how it makes some of its Natural Choice products, as well as its perception of what consumers think they’re buying. In statements disclosed in the filing, a company executive said the same pigs it uses to make its famous Spam brand meat product are also used in Natural Choice pork products. Those pigs are often given antibiotics and are rarely allowed outdoors. “It’s a massive attempt to manipulate and dupe the consumer to purchase something they have no intention to purchase,” said David Muraskin, a food project attorney at Public Justice and lead lawyer for ALDF. The group said it plans to appeal the April 8 ruling. “Our position has always been that Hormel Natural Choice products are produced, labeled, and marketed in conformance with all applicable laws and regulations,” Hormel said in a statement. “The USDA’s Food Safety and Inspection Service has specifically reviewed and approved the labels for Hormel Natural Choice branded products, including scrutinizing and approving the ‘Natural’ and ‘Preservative’-related language.” Internally, Hormel employees questioned whether they were meeting consumer expectations, specifically around antibiotics, according to the court filing. The company’s director of marketing said in an email quoted in the document that “many consumer[s] assume Natural=RWOA [Raised Without Antibiotics].” Hormel stated in the filing that she was “simply making an observation.” Consumer comments cited in the court filing often focused on the “no preservatives” claims, with one stating, for example, “We love your [Natural Choice] meats, my husband is allergic to nitrates, so thankful for your products …” Hormel stated that, at most, “the commenter purchased Natural Choice products because of the taste and because the commenter’s husband had no allergic reaction.” Some of the natural ingredients used as preservatives in Natural Choice products are high in nitrates. “There’s a difference between what’s legal and what’s ethical,” Nikolas Contis, a senior partner at brand consultant PS212, said of the Natural Choice marketing. “I think it’s unethical. They know the words are misleading.” Hormel on Wednesday rejected Contis’s assertion, saying it disagrees with “any implication that the advertising or labeling for the Hormel Natural Choice brand is misleading.” Many animals raised for meat in the U.S. spend their lives in conventional indoor agricultural systems, receiving antibiotics and sometimes growth promoters. While this isn’t what most consumers likely envision as “natural,” it’s a system that allows them to eat as much beef, pork, turkey and chicken as they want—no matter where they live or the time of year. According to the court filing, Hormel executives said that these practices are deployed at the independent farms raising their animals, and that there is no difference between those raised for Spam and those destined for Natural Choice. (Hormel’s Applegate brand, a small organic label it purchased in 2015, was not at issue in the lawsuit.) There is “no separate manner in which the pigs raised for Hormel Natural Choice products are versus any other of Hormel’s products, so Spam or any lunchmeat or bacon product,” Corwyn Bollum, Hormel’s director of pork procurement, said in a deposition cited in the court filing. That means only a “fairly small percent” of the pigs slaughtered for Natural Choice had any outdoor access, he said. Some pigs used in Natural Choice products received antibiotics and/or the growth promoter, ractopamine, according to other statements cited in the filing. And it’s not just the pigs: “Hormel Foods acknowledges that some cattle that [sic] used in Natural Choice beef products receive hormones,” the company wrote in the filing. It also stated that turkeys used in Natural Choice products may receive antibiotics. Antibiotics are administered to livestock to prevent disease, though the practice has been linked to a growing public-health crisis of antibiotic resistance in humans. Producers are supposed to allow enough time between the administration of antibiotics and the slaughter of the animal, such that the drugs have been flushed from its system, said Colin Johnson, a swine specialist with the Iowa Pork Industry Center in Ames, Iowa. He added, though, that trace amounts of some antibiotics remain legal. Then there’s ractopamine, a drug that changes animal metabolism to make the meat leaner and heavier. The drug is banned in China, Russia and the European Union, and tests of its safety for humans are limited. In the U.S. and dozens of other countries, however, the drug is legal to use. American pork producers reduced their usage after China’s ban in 2011, since they look to that market for significant exports. “I’d assume ‘natural’ wouldn’t have ractopamine,” Johnson said, though he added that the substance isn’t harmful to humans. “Antibiotic residues are very uncommon,” Hormel said in a statement. “If our testing indicates a positive, that raw material is not used in our food production and does not enter the food chain.” The advertising claims about preservatives, like “no preservatives or artificial ingredients” and “no nitrates or nitrites added,” are also misleading, ALDF alleged in its original complaint in 2016. On its website, after its “no preservatives” claim, Hormel adds the statement “except for those naturally occurring in cultured celery and cherry powder.” Celery juice powder is naturally high in nitrates. Additionally, many Natural Choice items also contain lactic acid starter, a bacterial culture. The Center for Science in the Public Interest said bacterial cultures convert the nitrates into sodium nitrite, a meat preservative it warns should be avoided because studies link its consumption by children and pregnant women to cancer. (CSPI for this reason specifically advises consumers to be wary of “natural” hot dogs and cured meats boasting of “no added nitrite.”) “We continue to stand behind Hormel Natural Choice products,” Hormel said in its statement. “Hormel Natural Choice products are minimally processed and contain no artificial ingredients or chemical preservatives, and that’s clearly stated on the package.”

From fiber and oil to clothing and makeup, hemp products are hot. And now some are exploring whether hemp could be a useful ingredient in animal feed. So what’s the Secretary of Agriculture’s take? “Hemp in animal feed? I’m not aware of any uses of hemp in animal feed. I know there are other uses,” Sonny Perdue says with a chuckle. “But we're trying to determine really what those individual uses are.” While hemp currently isn’t an approved ingredient in animal feed, the Association of Association Feed Control Officials has invited the hemp industry to present information about hemp’s value in feed for scientific review. A high sign agriculture is moving on scientific research is Colorado Senate Bill 17-109, signed by Governor Hickenlooper, that establishes a study group to look at hemp’s possibilities for commercial feed. Perdue, who worked as a veterinarian and small businessman before entering politics, says he has seen signs that hemp is a hot topic in ag this year—in part because of its new crop status outlined in the 2018 farm bill, which labels hemp with less than 0.3% tetrahydrocannabinol (THC) as a commercial crop. “You know, there's a good bit of hysteria about hemp, and our marketing regulatory program, Under Secretary (Greg) Ibach, fields more questions about hemp than probably anything in the farm bill,” Perdue says. He concedes that feed could be a potential use. “Feed, it possibly could be involved in there. That has not been one of the primary uses we’ve heard of. We hear a lot of industrial uses for it, but I think it remains to be seen if part of the product could be used in animal agriculture. Happy cows,” he jokes.

Trade issues with China can’t be resolved fast enough, said Dave Herring, North Carolina pork producer and president of the National Pork Producers Council, on AgriTalk with Chip Flory on April 4. “The indications we're seeing right now looks like we're getting closer,” Herring said. “If we could get the trade dispute settled with China, it would really open up some doors and create tremendous opportunities. And we need those opportunities.” U.S. pork is at the “tip of the spear” when it comes to China and Mexico trade issues, Flory said. “You can look at it two ways,” Herring said. “It’s fortunate. It’s unfortunate. When you're really good and efficient at what you do, like U.S. pork and grain farmers, you have a large demand for your product. But when you get in these trade disputes, unfortunately, you're at the tip of the spear and you get retaliated against first.” Flory asked Herring what he would say if he had a chance to sit down for coffee with the president. “Last year we exported a little over a billion and a half dollars worth of pork to Mexico last year, almost 20% percent of total exports, and probably 40% of the hams from the U.S., Canada, Mexico,” Herring said. “We’ve got to keep those doors open and keep the trade flowing.” He noted that U.S. producers ship a lot of hams to Mexico, and China buys a large amount of U.S. pork offal product, which adds about $8 in value to every hog produced in the U.S. In addition, it’s on products China desires and the U.S. does not, so it’s a win for both parties. With a little momentum in the markets these days, expansion talk is ramping up, Flory said. Is now the right time to expand? “I think the future is bright,” Herring said. “There's one thing about it, when we have an opportunity in agriculture – especially livestock agriculture – to grow, our farm families innovate, they get more efficient, and it just makes it a better situation in rural America.” Herring will be in Washington, D.C., this week at the spring Legislative Action Conference, along with producers from all over the country, meeting with congressmen and legislators. “We cannot get an agreement with Japan fast enough,” Herring said. “We need to get the trade disputes with China and Mexico finished. We need to get USMCA ratified – I would love to see that happen. I think our future in the livestock industry, especially pork, is going to look up.”

Aichi Prefectural Government officials began vaccinating wild boars on Sunday in an effort to prevent the spread of Classical swine fever (CSF). Officials placed feed containing a vaccine on the ground at select locations in Aichi Prefecture, including a forest in Komaki. This is Japan’s first attempt at vaccinating wild animals in the country, according to an article in The Japan Times. Japan’s CSF outbreaks have occurred mostly at pig farms in central Japan since last year. They believe wild boars are to blame for the spread of this deadly virus. An article in The Japan Times said Aichi Prefecture will conduct the work at a total of 60 locations in the cities of Komaki, Kasugai and Inuyama. Their plan is to complete five more rounds of vaccination work by February 2020. On Monday, the Gifu Prefectural Government also began placing vaccine-containing feed on the ground for wild boars. Officials plan to distribute the “vaccinated” feed at 900 locations in mountainous areas in 18 municipalities by Friday. How will the know if the vaccine gets to its intended recipients? The Japan Times said the prefectural government will monitor whether the feed is eaten by wild boars using security cameras. It will also capture some of the hogs to check whether they test positive for an antibody. A new case of CSF was confirmed at a pig farm in Yamagata, Gifu Prefecture, on Saturday, officials said. The prefecture will slaughter approximately 2,000 pigs raised at that farm. This marks the 12th case of CSF in Japan since September, when the first instance of the disease in 26 years was confirmed in the prefecture. CSF is a contagious, often fatal, disease of pigs. According to the Merck Manual Veterinary Manual, vaccination is allowed only under emergency circumstances. Awareness and vigilance are essential, so that outbreaks are detected early and control measures instituted rapidly to prevent further spread of CSF.

China’s pork imports are set to double from last year to 2 million metric tons in 2019, a Rabobank analyst said on Thursday, as African swine fever (ASF) sweeps through China. Industry insiders say the 113 reported outbreaks in China are grossly underreported. Chinese pork production is expected to fall by up to 20% in 2019, said Oscar Tjakra, a director of food and agribusiness research at Rabobank. China typically accounts for around half the world’s output of pork. The U.S. agriculture department’s attache in Beijing has forecast pork production at 51.4 million metric tons this year, down 5% from 2018, with imports seen at 2 million metric tons, according to Reuters. Pork production was on the increase for the first three quarters of 2018, said Zhu Zengyong, associate professor at the Agricultural Information Institute of the Chinese Academy of Agricultural Sciences (CAAS), but declined significantly in the fourth quarter after the disease began spreading rapidly. Zengyong said the number of slaughtered hogs fell 1.2% in 2018 to 693.8 million head. Not only has the disease totally disrupted the production plans of many major companies, Zhu said, but it also has halted some expansion. In addition, China’s demand for pig feed is projected to drop 12% in the 2018-19 crop year that runs from October to September. Soymeal demand is expected to drop 5.5% during that same period, said Li Ning, general manager of commodity trader Living Water Trade (Shanghai) Co Ltd. A consultant with Shanghai JC Intelligence Co Ltd said he sees pig feed consumption down 25% to 30% in 2019, and overall feed demand down from 12% to 15%.

The returning to normal of U.S. federal government reports and data sources are revealing the impact of the cold and wet winter on the fed cattle production. As pointed out in last week’s In The Cattle Markets, cattle on feed inventories are very high: 11,678 thousand head in the seven major states. This is above last year’s 11,630 thousand head and average of the prior five years for February 1 of 10,781 thousand head. The inventory of long-fed cattle – cattle calculated to have been on feed over 120 days – is also substantial. This inventory is 3,993 thousand head, is well above last year’s 3,558 thousand head, and the average of the prior five years for February 1 of 3,500 thousand head. There are a lot of cattle to be marketed through the end of March and into April and May. Slaughter volumes reported in the weekly Livestock Slaughter report do not communicate that this is happening. Total cattle slaughter is up modestly. Within total cattle, cow slaughter is higher some weeks by 10 thousand head, fed heifer slaughter is up some weeks 10-20 thousand head, and the largest portion – that being fed steer slaughter – is even with the prior year or softer. April marketings will be an important indicator of the potential strength of the cattle markets through the summer. Weak marketings will suggest a backlog of animals. The Livestock Slaughter reports are also revealing the lower fed animal carcass weights. Fed steer weights for 2019 are all lower than the same week in 2018. Carcass weights are one to 13 pounds lighter each week of this year. Fed heifers, which are a larger portion of the slaughter mix this year, are almost always more than 10 pounds lighter than the week of the prior year. Clearly, the cold wet winter has slowed marketings, extended days on feed, decreased feed conversion, held down slaughter weights, and increased costs of gain. Information provided by Kansas State University and other sources indicates costs of gain are 5-7 cents per pounds higher than the same month this time last year with very similar feed input costs. There is a large volume of animals coming but at lighter weights. Winter weather and general conditions appeared to slow the feeder cattle market down through the end of last year and early this year. In January and February, I worked cattle feeding budgets with fall fed cattle futures, spring feeder cattle futures – both basis-adjusted, and with reasonable projected spring and summer cost of gains. There were close to $100 per head profits that could be hedged in this window for heavier calves. Needless to say, feeder cattle prices have improved since then. The Markets What do the technical say? April through October live cattle futures show strong upward trends with resistance levels repeatedly broken and the trend holding when tested. The more deferred contracts are sitting closer to resistance levels whereas nearby contracts have moved through and into higher prices. Live cattle contracts remain a strong bullish market. I continue to watch the trend lines closely. Hold long positions and wait for uptrends to be broken. These would be sell signals. The spring and fall groups of feeder cattle contracts have begun to show similar strength. There is not enough trading history in the fall contracts be comfortable with technicals. But I anticipate them to more closely mirror the live cattle contracts. Opportunities to hedge feeder cattle should be based on technicals from live cattle contracts. Watch the live cattle trends and the feeder support and resistance levels. And the spring weather conditions. By: Stephen R. Koontz, Colorado State University

Animal health officials in Texas have confirmed the presence of bovine tuberculosis (TB) at a dairy located in the Panhandle region of the state. Texas Animal Health Commission (TAHC) put out a press release on March 14 to announce that a case was confirmed on a Sherman County dairy farm. The investigation has revealed that the Sherman County case is related to a confirmed bovine TB case on a Dallam County calf ranch. The two farms that have bovine TB are currently under quarantine or hold and will remain so until they meet all requirements for release through testing and removal of infected animals. Epidemiological investigations will continue at both farms. There will also be further testing performed at dairy, calf raising and dairy heifer raising operations in Texas and other states that have epidemiological links to the infected herd in an effort to determine a possible origin or prevent the potential spread of the disease. “TAHC is working closely with the dairy involved, United States Department of Agriculture (USDA), the Texas dairy industry and other states to ensure the disease is quickly contained, and the affected dairies can return to normal business practices as soon as possible,” says Dr. Andy Schwartz, State Veterinarian. “Texas’ current TB-free status is not expected to be affected by the new cases.” Bovine TB is a respiratory disease that can cause weight loss and chronic coughing. There are a number of species that are susceptible to the zoonotic disease including elk, deer, bison, goats, swine, cats and humans. Pasteurization of milk removes the risk of transmission to people and meat from infected animals does not enter the food chain. The disease can be spread amongst livestock from TB bacteria being expelled by infected animals into the air to be inhaled or even in contaminated feed. In 2000, Texas was deemed as TB-free by USDA. Then in 2002, the status was temporarily removed when two infected herds were found. Following further testing, Texas regained TB-free status from USDA in October 2006.

It’s finally come. China made its largest purchase of U.S. pork in nearly two years last week, according to USDA data released Thursday, reports Reuters. Chinese hog prices continue to climb as the country deals with an ongoing outbreak of African swine fever (ASF). The sale of 23,846 tons of U.S. pork in the week ending March 7 comes with a 62% import tariff imposed by China on U.S. pork, as part of the recent trade war between the two countries. China has made large purchases of U.S. soybeans earlier this year and rumors of corn sales just this week, leaving hog farmers wondering if or when the giant would return to the meat case. A main staple in the Chinese diet, pork is also in high demand in the country from recent celebrations of the Chinese New Year, or the “Year of the Pig.” China’s ASF problem has grown to 111 confirmed cases in 28 provinces and regions, since August 2018. Click here to read in-depth coverage of the ASF outbreaks in China, biosecurity tips for U.S. producers and more. There is no cure for ASF and U.S. leaders say a vaccine could still take 10 to 20 years to develop. The disease does not affect humans but is highly contagious and fatal to pigs. About 1 million pigs have been reportedly culled in China so far in an effort to try to contain the disease. What else could China be purchasing in the next few weeks? Wheat, ethanol, DDGs, beef and poultry are also likely to be on the list.

A court-appointed investigator reports a South Dakota man involved in a foreclosure case sold the same cattle to as many as four different parties, leaving 27,800 cattle unaccounted for. The multi-million dollar case began unfolding last month when First Dakota National Bank filed a foreclosure against Robert and Becky Blom, Corsica, S.D. At a hearing in Armour, S.D. on Feb. 14, nine law firms filed notices of appearances in the case representing 17 additional parties. Lew Dirks, an investigator from Sioux Falls, was named the court-appointed receiver. Now, nearly a month after the first hearing, 53 interested parties have been identified, and an interim report filed by Dirks on March 5 indicated that as of Feb. 14, only 15% of the cattle were in Blom’s four feedlots, and some parties had received checks that bounced. "At the time of the hearing on February 14, 2019, I had not determined a reason for being short so many head of cattle," Dirks wrote in his interim report as reported by the Mitchell Republic. Dirks said he had originally planned to start sorting out which cattle belonged to whom by looking for brands. A day after the hearing, however, Dirks said he was approached by someone who said he had seen the same invoice in both his own and another party's paperwork. "Investigation revealed that Robert Blom had collected money on the same group of cattle from multiple individuals," Dirks wrote. "I now have some groups of cattle being sold to as many as four different individuals." Dirks’ interim report also stated that while he was at the Blom feedlot on Feb. 8, he was told that up to 35 truckloads of cattle had been removed from the feedlots the previous day, although he has not seen paperwork to verify how many head of cattle that might have included. The Mitchell Republic reported that Dirks had documentation that cattle had been moved back and forth between Robert and Becky Blom's feedlot and the feedlot run by their son, Taylor Blom. "At this time, I have no explanation as to why cattle were moved back and forth," Dirks wrote. The owners of two feedlots have filed liens on the cattle in their lots and told Dirks they had not been paid for feed and yardage for December and January, resulting in outstanding bills totaling $416,795.78. Dirks told the court he estimates the cost of keeping the cattle in those feedlots and caring for them, every additional week cattle are not sold will incur $84,000 in expenses. Also identified in the interim report are claims from two people who said they paid Robert Blom a total of $526,000 to cover the purchase of corn to feed their cattle.