Man dies of avian influenza in China

A 70-year-old man from China’s Anhui province has died after contracting H7N9 avian influenza. The fatal case is one of six cases of human avian influenza infections in China that have been recently reported to the World Health Organization (WHO).
The man became ill on March 21 and was admitted to a hospital on March 21. He died on April 14, according to RTT News.
Three of the other human avian influenza cases occurred in the Jiangsu province, while one struck in the Hunan province and the other occurred in the Guangdong province.
WHO stated that the Chinese government is continuing to conduct surveillance and take measures to try to control the spread of avian influenza in China.

China denies US dried distillers grains shipments

China has denied about 2,000 metric tons of U.S. dried distillers grains (DDG), and more rejections are expected in coming weeks as Beijing imposes strict checks over an unapproved genetically-modified (GMO) strain, traders said on December 26, 2013.
According to a Reuters report, the move follows the rejection of more than a half-million metric tons of U.S. corn when authorities detected the presence of MIR 162, a GMO variety developed by Syngenta AG but not approved for import by China's agriculture ministry.
"The containers, which were sealed for a while, have been rejected at a port in Shanghai," said one trader with a domestic trading house.
Quarantine authorities in Shanghai declined immediate comment.
According to the report, more rejections were likely after the General Administration of Quality Supervision, Inspection and Quarantine (CIQ) issued a notice to local authorities asking them to step up checks for MIR 162 in DDG cargoes.
"Quarantine authorities at major ports have been notified and will be strict in testing," said another trader, with a major state-owned trading house. "Before, authorities were just checking on selective shipments, but now all shipments will have to be tested and a large volume may be turned away."
The U.S. has urged China to act promptly to approve the strain.

New human infections of avian influenza signal new wave in China

Five new human cases of avian influenza in eastern China signal the potential for a new epidemic wave in the upcoming winter months, scientists said. The high-pathogenic H7N9 avian influenza earlier in 2013 first infected around 135 people and killed 45, but until five new cases emerged in October, health officials had thought human infections were on the decline.
The new cases indicate "a possible risk of a larger outbreak of H7N9 this winter," according to Chinese researchers writing in the online journal Eurosurveillance.
Ab Osterhaus, a leading virologist based at the Erasmus Medical Centre in the Netherlands who has been tracking the virus, told Reuters: "We're bracing for what's going to happen next."
The new cases also suggest the virus "has apparently continued to circulate in an animal reservoir during the summer," the researchers said.

Lower soybean prices will test China’s appetite

Already known as the world's largest buyer of U.S. soybeans, China's true appetite for soybeans is likely to be tested as soybean production is anticipated to increase worldwide in 2014 and 2015. Chip Flory, editor of Pro Farmer, offered insights into soybean production and use on October 15 during the Grain & Meat Outlook Webinar, hosted by WATTAgNet and Farm Journal.
The webinar is the third in a series and was sponsored by Nutriad. An archived version of the Grain & Meat Outlook Webinar can be found online.
Flory's projections for soybean production for the 2013-14 marketing year called for U.S. soybean production to be at 77 million acres, a slight decrease from the 2012-13 season where 77.2 million acres were planted. However, with projected yields increasing by a bushel per acre in 2013-14, that difference is offset. Likewise, production in Brazil and Argentina is also projected higher, with Brazilian soybean production jumping from 82 million metric tons to 88 million metric tons, and Argentinian soybean production leaping from 49.5 million metric tons to 55 million metric tons.
U.S. soybean production is expected to see a significant increase for the 2014-15 marketing year, with 81.2 million acres planted and yields projected higher at 44 bushels per acre.
If those projections are realized, prices will continue to substantially drop. The average price per bushel for the 2012-13 year was $14.40 per acre, but estimated at $12.75 per acre for the 2013-14 year. Further price decline is anticipated for 2014-15, as Flory estimates the soybean price to be around $9 per acre.
"That's going to be awfully tempting to China to really get aggressive with their bean buying under a pricing scenario like that," said Flory. "With a good 2014 bean crop, China's appetite for soybeans will be tested."
Tom Elam, president of FarmEcon LLC, also participated in the webinar.

McDonald’s drop in sales partially blamed on avian influenza fears

Fears over avian influenza in China are being cited as one of the reasons McDonald's sales figures slipped 0.6 percent in April.
The global quick service restaurant chain reported that in the region encompassing Asia, the Middle East and Africa, sales were down 2.9 percent amid those fears of food safety. In the U.S., sales improved by 0.7 percent, with the company citing the introduction of Chicken McWraps as a positive move that attracts more customers in their 20s and 30s.
The company also reported a 2.4 percent decline in sales in Europe. McDonald's said it hopes to improve those numbers by pursuing customer-focused strategies around menu choice, everyday affordability and enhancing brand presence by adding new restaurants and increasing hours of operation. 

China plan will make Tyson poultry preferred choice, managers say

Tyson Foods is looking to China as a key area to grow its revenue after the company reported a decline in earnings for the second quarter.
By stepping up its efforts to assure a safe food supply, Tyson officials said they believe their chicken products will set a standard that will win over reluctant Chinese poultry consumers.

Chinese, international markets show promise
Tyson Foods' international business units are presently performing well, according to Tyson CEO Donnie Smith. The markets in Mexico and Brazil have grown significantly when compared to 2012 numbers.
But Tyson managers are also optimistic about the company's future in China, despite the present avian influenza scare. "Although our production has not been directly affected by avian influenza in China, demand has softened for the entire Chinese poultry industry," said Tyson Foods Chief Operating Officer Jim Lochner. "Concerns with avian influenza have caused Chinese consumers to question their food safety."
Tyson Foods has implemented strong biosecurity measures to help quell these concerns. Tyson is continuing plans to develop its own growout houses in China, rather than buying birds from outside sources. Construction of poultry houses is underway, said Smith, but progress has been slower than anticipated because of land-use rights issues.
"We believe our modern methods and processes will make our chicken the preferred product and we'll be in a position to benefit in the long-term." said Lochner.
Smith said he expects the Chinese markets to pick up for Tyson in 2014. He also said their success in Mexico and Brazil will "more than make up the gap" during the interim.

Company continues development of value-added products
Since sales seem to be flat for many of Tyson's grocery and foodservice customers, said Smith, Tyson Foods also hopes to grow by placing a heavy focus on value-added products. "In addition to the quality and service Tyson is known for, we must continue to provide product innovation to drive traffic and sales for our customers, whether they are a quick service restaurant, a mid-scale restaurant, a big box retailer, a small grocery chain, a convenience store or a school district," said Smith. "Because of the weak demand, operators are more interested than ever in our new product ideas and business-building opportunities."
Gluten-free products are in heavy demand today, said Smith. Because of that, Tyson is marketing gluten-free chicken nuggets and other gluten-free breaded products.
Antibiotic-free meats are also in high demand. Tyson's Nature Raised Farms brand of fresh antibiotic-free chicken was launched successfully in February, and Smith said he expects that line to grow in popularity.
Tyson Foods is developing other value-added foods, as Smith is expecting "well over 100" new products to be introduced in fiscal 2013.

Second quarter results
Tyson's net income dropped 42 percent for the quarter ending March 30. It struggled with additional feed costs in its chicken and pork units, as well as reduced margins in its beef and pork divisions.
For the three-month period, Tyson's earnings were at $95 million, compared to $166 million the same time in 2012. Its revenues were at $8.42 billion, which was up from the $8.3 billion in 2012 but fell short of expectations of around $8.58 billion.
The chicken segment proved to be the most profitable for the company, said Smith, as prices were raised to help offset high feed costs. Tyson's chicken segment also benefited from consumers purchasing less beef amid high prices.
The company is now one month into its third quarter, and Smith said he is already seeing a turnaround. "Our third quarter is off to a really good start, and I believe we'll finish the back half strong and take a lot of momentum into Fiscal Year 2014," said Smith.
Smith and Lochner discussed the quarterly results and plans to improve revenues during a March 6 conference call with shareholders.

China avian influenza woes have little impact on Zoetis

The recent outbreak of avian influenza in China may be hurting the poultry industry there, but it is having a minimal impact on the revenues for animal health company Zoetis.
Juan Ramon Alaix, chief executive officer of Zoetis, said during a April 30 conference call with shareholders that the poultry business in China only accounts for a small portion of the company's revenues. The swine sector accounts for a larger portion of revenues from China, he added.
"The poultry business is definitely a future growing opportunity, but that is really having a minimal impact in revenues," said Alaix. "Where we are concerned is how we can really provide support to our customers in China, and also how we can minimize the impact of the avian flu on many people in China." 
Alaix, also during the conference call, reported revenues of $1.09 billion for the first quarter, an increase of 4 percent from the first quarter of 2012. A separate story on the company's quarterly financial report can be found on WATTAgNet.com.

Global dairy market tightened by Chinese buying, supply contraction

The global dairy market tightened considerably in mid-March and is predicted to remain tight over the next six months, according to Rabobank’s latest dairy quarterly report.
While dairy market demand remained weak in the EU and U.S., importers continued to seek increased quantities, led by a surge in Chinese buying. Strong buying from China and a sharp drop in New Zealand created a large premium for whole milk powder over other product prices and for international market prices over domestic U.S. wholesale prices. The end of the season in the Southern Hemisphere has been poor, exacerbated by extreme weather in several regions, particularly New Zealand.
The weak end of the Southern Hemisphere season is expected to overlap with a weak supply peak in May in the Northern Hemisphere, which will cause total milk production in export regions to fall below prior-year levels in 1H 2013. According to Rabobank's projections, lower milk production will not be much of a problem in surplus regions with weak demand; but, it will reduce supply availability for the international market, even after accounting for stock sales from the U.S. Moreover, Chinese buying will slow somewhat in coming months, while buyers in other import regions will look for additional supply to meet local market requirements.
“The quest for additional supply should ensure a tight global market environment through Q2 and Q3, before a new Southern Hemisphere season and an easing of global feed prices enables the market to balance at somewhat lower prices in Q4,” said Tim Hunt, Rabobank global strategist. “The sharp divergences in prices evident between different product lines and regional markets should slowly abate as 2013 progresses. In particular, U.S. wholesale market prices, significantly discounted in early 2013, should move back to lower discounts by mid-year as the global market tightens and U.S. stocks are cleared. But, regional market rigidities will likely ensure that normal relativities are not fully restored until late in the year.”
Rabobank remains pessimistic on EU and U.S. consumption prospects, factoring in net growth of zero in consumption from these two markets in the first half of 2013. If either outperforms expectations, less product will be available for export, contributing to more market upside. The bank also assumes a better Northern Hemisphere crop year will allow for the potential of widespread planting of grains and oilseeds, driving down global feed costs in Q4. Another poor crop would generate further market upside, the report says. 

Swine genetics company joins with sow breeder

PIC, a division of Genus and the world's leading swine genetics company, announces agreement with the Shennong Agricultural Group to jointly invest in the operation of a 1,000-sow nucleus farm in China's Yunnan province. Located in the southwest of the country, Yunnan is home to some 2.5 million sows.
Shennong Agricultural Group is the leading pig integrator in Yunnan province, employing more than 2,000 people. Since beginning operations as a commercial feed mill in 1999, the privately held firm has established pig production farms and value-added slaughtering, meat processing and retailing businesses. There are currently four multiplication units supplying over 10,000 breeding gilts a year to commercial sow farms, and 26 contract finishing sites for 300,000 market hogs produced annually. Downstream, the company operates two slaughter plants with combined capacity of three million pigs. Its facility in Kunming is the largest in Yunnan.
Shennong aims to expand its feed-to-fork integration by growing the production base to 80,000 sows with output of two million slaughter pigs a year by 2018. The collaboration with PIC builds on the relationship forged between the two companies based on the operation of in-house PIC multiplication. This successful track record convinced the companies to scale up their cooperation and work together to realize a sustainable platform to support their respective targets for growth.
Zuxun He, founder and chairman of Shennong, said, "Shennong has worked with PIC in China over the last nine years as we have developed our farming operations. We now have aggressive targets for expanding our pig production system as we develop an integrated supply chain to provide safe, healthy pork products to our customers. We are very pleased to have sealed this partnership with PIC to strengthen further our relationship and to provide a dedicated supply of PIC's world class genetics to meet the needs of our expansion plans."
Nancy Jiang, General Manager of Genus China, noted, "This is the latest in a series of announcements from PIC testifying to the company's commitment and drive to expand its footprint in the world's largest pork market. The country's industry is in transition from its historically volatile small farm base, a move which is supported by government policy to improve the security and hygiene of the pork supply chain. PIC is becoming the partner of choice for the large integrated projects that are proliferating as China continues to scale up its production."
The new farm will be stocked with great-grandparents from PIC's High Health Global Supply Chain later in the year. The joint venture, which will be managed by PIC, will produce grandparent females to drive Shennong's expansion and enhance PIC's capacity to supply its signature genetics to other leading players that are emerging in the rapid consolidation of China's pig industry.

China feed mills to buy US corn on supply concerns

China's feed mills may turn to the U.S. for corn imports due to concerns that the country's domestic supply might not be able to meet demand before the next harvest, according to researcher Yigu Information Consulting Ltd.
Snow and rain in northern China have left grains susceptible to mold and potentially unsuitable for animal feed, and some mills are locking in U.S imports for later in 2013, taking advantage of lowered corn prices and newly issued permits from the Chinese government. “China’s corn shortage this year may widen to 5 million tons from a previous projection of 2 million tons,” said Feng Lichen, general manager of Yigu. “The crops are just too wet, so as soon as the weather warms up next month, mold will grow."
China’s purchases could help curb an 18 percent decline in Chicago corn prices from a record in August 2012. The U.S. crop will be an all-time high following the 2012 drought, according to the U.S. Department of Agriculture. Chinese mills bought at least 120,000 metric tons from the U.S. the week of February 18, the first purchases in 2013.

China announces additional testing for all US pork March 1

China has announced that beginning on March 1, 2013 all U.S. pork products will be tested for ractopamine, a feed additive used to promote lean muscle growth by a third-party testing firm, according to the U.S. Meat Export Federation. The feed additive has been found to be safe and certain levels are deemed acceptable by the United Nations.
China is the world's biggest producer and consumer of pig meat and the third-largest market for U.S. pork. The announcement is odd considering that no pork products from the US have tested positive for the feed additive, recently. U.S. pork exports to China and Hong Kong, totaled $886 million in 2012.
Some industry insiders see the move as a way to protect its domestic pig production, and earlier in February, Russia barred any U.S. meat products that contain ractopamine. If China were to ban pork imports from the United States, it would boost pig production in Canada, Brazil and the European Union.

KFC launches campaign to improve brand in China

KFC has launched a campaign to rebuild its brand in China, promising tighter quality control after an incident over misuse of drugs by its suppliers.
The company, a unit of Yum! Brands Inc., promised to test meat for banned drugs, strengthen oversight of farmers and encourage them to improve their technology. More than 1,000 small producers used by its 25 poultry suppliers have been eliminated from the Yum! Network, the company said.
KFC, which has more than 4,000 outlets in China, was hit hard when state television reported in December 2012 that some suppliers violated rules on the use of drugs. The company estimates January sales plunged 37 percent. "Starting now, we will stress strict management and the principle of zero tolerance in food safety," said Sam Sun, the chairman of Yum! Restaurants China. "We will immediately drop any supplier that lacks the determination or the ability to manage breeding well."
Yum, based in Louisville, Ky., said it expects sales in China to fall by up to 25 percent in the current quarter. The company also owns Pizza Hut and Taco Bell. The company plans to maintain its pace of new restaurant openings in China. Another 700 new sites are planned for 2013, with Yum! focusing more on cities outside Beijing, Shanghai, Guangzhou and Shenzhen where it sees greater potential for growth.

China turns to Monsanto, others to boost corn yields

With China's corn demand growing steadily, the country's government has approved the use of more hybrid seed varieties like those from Monsanto Co., DuPont Pioneer and Syngenta AG to boost yields, according to reports.
China imported a record 5.5 million metric tons of corn in 2011–2012, but with the new hybrid seeds some domestic farmers are already reporting yields at double the average five metric tons per hectare. China's corn crop is forecast at a record 200 million metric tons for the current year, according to the U.S. Department of Agriculture. "My view is that within the next 7–10 years the gap in terms of demand and supply will probably be reduced to close to zero if the technology can reach the farmer," said Diego Diz, China corn marketing lead for Monsanto.
China is under significant pressure to meet the growing demand for meat, and the corn to feed the animals that supply it. "Over the next 15 years, China needs 80–100 million metric tons of corn, additional corn, a year," said Hardeep Grewal, Syngenta's head of corn marketing for the Asia-Pacific. "It means yields have to go up 50–60 percent." Hybrids have modernized planting as some seed firms guarantee 95 percent germination. Crop density, which has a direct impact on production, is up by around half to 60,000 plants per hectare from five years ago, though still lagging behind the U.S. level of around 80,000. New varieties also mean reduced fertilizer use and improved water efficiency — a critical factor in the increasingly water-stressed northeast.
By 2025, much of China's northeast will become either severely or extremely water stressed, according to the Aqueduct Water Risk Atlas managed by the World Resources Institute in Washington. Water shortage was one factor cited by China's agriculture minister as a threat to the country's ability to feed itself, along with growing land and labor shortages. "To ensure grain security ... We will breed a new type of agricultural player and develop proper-scale mechanized farming," said Han Changfu at a session of the ruling Communist Party congress.

China animal feed producers looking to sell back corn

Several Chinese animal feed producers are negotiating with their suppliers to sell back U.S. corn cargoes for shipment in 2012–2013 in order to profit from record-high prices, according to reports.
The producers originally bought the corn at prices below $6 per bushel, and current prices are well above that. "We are still talking about washing out the cargoes," said a trade source. "It is good for both sides." The worst U.S. drought in 56 years is hampering potential yields and causing prices to continue climbing.

First shipment of British pork exported to China

The first shipment of British pork under the country's new export deal with China made its way from Tulip's cold store in the West Midlands on June 21, according to reports.
China is the largest market for pork in the world, and negotiations for direct trade between the two countries have been underway for years. "This is an important step, not only for Tulip but also for the British pig industry," said Tulip Sales and Export Manager Martin Sauer. "The Chinese market is huge — the biggest in the world — and there will be scope to expand it in years to come."
British Pig Executive chairman Stewart Houston, who was involved in the negotiations to open the market, said the new deal is very important to British trade. "[China] is a market that could easily be worth £50 million a year in the not too far distant future,” said Houston.

UK gains access to China fresh pig meat market

The UK pig industry has gained direct access to the Chinese fresh pig meat market after several years of negotiations, opening the way for a potential £50-million-a-year deal over the next few years, according to British Pig Executive International Manager Peter Hardwick.
Much of the exported pork will be offal, trotters, ears and other parts of the “fifth quarter” which British diners do not eat, but the Chinese do. However, Hardwick said he believes a growing demand for higher quality cuts in China will lead to more exports of this nature, as well. “This is a great shot in the arm for producers and processors here,” said Hardwick, who has been involved in the talks over the past six or seven years and has made several visits to China to meet industry leaders and health officials there.
The first consignment of British pig meat is already waiting to be dispatched by Tulip, the UK’s biggest producer. “China is the most lucrative grocery market in the world, and from fashion to food its rapidly expanding middle class has an appetite for Western goods," said UK agriculture minister Jim Paice. “In particular, they are eating more meat, and our top-quality producers have got huge opportunities to meet that demand and help our economic recovery.”
According to Hardwick, at least five British pig meat plants, or “establishments,” have been approved to export directly to business in China, and he said he expects trade to start within weeks. A representative of the British Pig Association is already in China to do business with the Chinese importers. The UK currently exports 27,000 metric tons of pig meat to Hong Kong every year, and while much of this meat is thought to end up in China, demand grew by 54 percent in 2011.
“This is a wonderful achievement and something we have been working towards for several years in close cooperation with Defra and the British embassy in Beijing," said British Pig Executive Chairman Stewart Houston. "The process has been a long one, but I know it will prove to be extremely worthwhile."

Argentina seeing strong soy demand from China

Argentina is still seeing strong demand for soy from China, in spite of China's economic slowdown, according to reports — a situation not likely to change, said Argentine Agriculture Minister Norberto Yauhar.
"Over the years ahead, the market will continue to be driven by China," said Yauhar. "We have a very good trading system with China. They will keep importing Argentine soy and derivatives." Argentina is expecting a 2011–2012 soy crop of 44 million metric tons, after a December 2011–January 2012 dry spell ruined original expectations of a 53 million metric ton harvest.

China corn purchases from US increase to 4 million metric tons

China has purchased 120,000 metric tons of U.S. corn for shipment by the end of August, bringing the country's total confirmed purchases this season to nearly 4 million metric tons, according to reports.
Another 120,000 metric tons were sold to an unknown purchaser for delivery in the next September-to-August marketing year, and is believed to be to China, as well, said analysts and traders. China has bought 1 million metric tons of corn from the U.S. in the last two marketing years as the country's demand has outpaced its domestic production, and the U.S. Department of Agriculture predicted that it would import a 17-year high of 4 million metric tons in the 2011–2012 marketing year. That number may now be revised, to 4.287 million metric tons, said analysts.
Confirmed sales to China for the 2011–2012 year currently stand at 3.92 million metric tons, but the number could be higher if any of the "unknown" sales are to China.

China to destroy 6.7 metric tons ractopamine-fed US beef

The Taipei City government's Department of Environmental Protection will burn 6.771 metric tons of U.S. beef containing the feed additive ractopamine to ensure that the contaminated meat does not reach Chinese consumers, according to reports.
The beef, confiscated from Taipei-based beef importer Shusen Corp., is the first batch of U.S. beef containing the banned feed additive to be destroyed in wake of recent inspections. Shusen has been fined NT$60,000 (US$2,030) for importing and selling meat products containing ractopamine, and the Department of Health will continue to conduct spot checks on the company and others while the government finalizes its decision on the additive's ban.
Currently, there is a zero-tolerance policy in place on beef containing ractopamine, with imports testing positive for the additive subject to fines of between NT$60,000 and NT$6 million (US$203,031). There is a current dispute, however, over the administration of President Ma Ying-jeou’s plan to partially lift the ban on ractopamine in U.S. beef products.

China to produce country's first genetically modified corn in 2013

Origin Agritech Ltd. said it expects to commercially produce China's first genetically modified corn strain in 2013, pending government approval, according to company chairman Han Gengchen. Once approved, the U.S.-listed, Beijing-based company expects the acreage for the corn to account for 10 percent of China's total corn acreage within 10 years. "We have bred the gene on local hybrid seeds which are popularly used and generate high yields," said Gengchen. "The safety approval process (for seed use) would be faster and likely be this year and we will start production next year." The genetically modified corn can help pigs digest more phosphorus, enhancing growth and reducing pollution from animal waste. China is already the world's largest importer of genetically modified soybeans, with annual imports accounting for roughly 60 percent of globally traded soybeans.