Editorial


Support for an Independent Food Safety Agency Gathers Momentum

Representative Rosa DeLauro (D-CT) and Senator Dick Durbin (D-IL) have sponsored the Food Safety Administration Act with additional co-sponsers including Senator Richard Blumenthal (D-CT) and five Representatives.  This legislation is endorsed by the Center for Food Safety, the Consumer Federation of America, Consumer Reports, the Environmental Working Group, STOP Foodborne Illness, and the Center for Environmental Health, all of which can be regarded as moderate and mission-focused.

 

The motivation for the Act recognizes numerous deficiencies in the FDA despite liberal funding, suggesting that lack of money is not the basic deficiency.  Recent problems include:-

  • Failure to recognize and respond proactively and aggressively to the prescription opioid crisis,
  • Tardiness in developing regulations to limit use and abuse of E-cigarette products by minors,
  • Failure to detect and respond to heavy metal contamination of baby food and juices
  • The inadequate development of the Final Rule to prevent Salmonella in Eggs with subsequent field implementation that proved to be unprofessional, inappropriate and uduly expensive. 
  • Delay in implementing the Food Safety Modernization Act
  • Failure to identify the long-term contamination of infant formula with Cronobacter resulting in illnesses, wide-scale inconvenience and political embarrassment for the Administration.
  • Failure to address the sequence of foodborne infections attributed to leafy greens and produce
  • Delay in addressing and regulating antibiotic use in livestock production

 

The proposed legislation would establish a single food agency separate from the current FDA with leadership appointments requiring Senate confirmation. The intent is to move the Center for Food Safety and Applied Nutrition, the Center for Veterinary Medicine and the Office of Regulatory Affairs to a separate entity apart from the FDA within the Department of Health and Human Services. This will be analogous to moving deck chairs from the port side of the Titanic to the starboard side.  The deficiency in the proposed legislation is that it fails to recognize the dual jurisdictions of the current Food and Drug Administration and the USDA Food Safety and Inspection service, responsible for red meat and poultry.  Foodborne episodes caused by either pathogens or contaminants should be prevented by a single entity. The proposed food safety agency should have complete jurisdiction as recommended by a panel of the National Academy of Sciences and by numerous commentators including EGG-NEWS and CHICK-NEWS that have advocated a single U.S. dedicated entity for over five years analagous to agencies in the E.U. and the U.K.

 

Establishing a U.S. food safety agency would allow for an appropriate organizational structure with staffing by competent administrators and scientists free from the current restraints in FDA that emphasize pharmaceuticals and biologics over food. Rep. DeLauro commented, “Food safety is currently a second class citizen of the Food and Drug Administration.”  Her additional statement that, “Right now there are no food policy experts in charge of food safety at the FDA” is only partly correct.  The FDA appointed Frank Yiannas to the position of Deputy Commissioner for Food Policy and Responsibility. He is an acknowledged expert in the field and has considerable commercial experience. His is a staff position without defined authority and arcording to reports is sequestered by line administrators to the detriment of the Agency.  Investigation of the Center for Food Safety and Applied Nutrition demonstrated profound deficiencies in leadership, organization and staffing, impacting effectiveness.

 

Admittedly, separating food safety from the existing FDA would be a step forward, but the intended action will fall short of the ultimate objective of seamless oversight of food safety. Washington abhors major jurisdictional changes.  Following the September 11th attack, the Department of Homeland Security came into existence, incorporating the functions of related agencies to the benefit of our national wellbeing.  By the same token the U.S. is facing a slow motion disaster through deterioration in food safety that could be addressed by a radical reorganization. To be other than “more of the same” would require merger of the food safety responsibilities of the current FSIS and the FDA.  Salmonella adulteration whether in ice cream,  eggs or on broiler meat is still Salmonella.  Although sources may be different, the implications for consumers are similar.  The appropriate disciplines including epidemiology, food science, analytical chemistry and microbiology are common to developing meaningful rules and guidance documents, conducting field investigations and regulating manufacturing and distribution of food irrespective of vehicles of infection.  If an administrative change is considered desirable, then a single and comprehensive restructuring of the FDA and FSIS and their merger to create an independent  agency analagous to the EPA will be required to correct existing deficiencies and establish a more secure future. But Naah, we have lobbyists!


 

Egg Industry News


New presentation format

This edition continues the change in presentation for the long statistical articles including the Egg Weekly and Commodity Reports. These can be accessed by clicking on to the button/link at the bottom of the article to bring up the entire article with images. This change should limit diversion of EGG-NEWS to spam folders by reducing the length of the primary page.



 

Egg Week

USDA Weekly Egg Price and Inventory Report, August 5st  2022.

 

The comprehensive Weekly review of prices and production data comprises:-

  • Current Market overview
  • Inventory levels
  • Wholesale and consumer prices
  • HPAI update
  • USDA Statistics for the week including egg processing


To access the report click here.


 

Cage-Free Report

USDA Data On Cage-Free Production For July 2022

 

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, correlating and interpreting the data posted weekly on the EGG-NEWS Egg Weekly Price and Inventory Report.

 

The USDA Cage-Free Report for July 2022, released on August 1st documented a 0.6 percent reduction in the complement of hens producing under the Certified Organic Program from June to 17.9 million (rounded to 0.1 million). The number of hens classified as cage-free (but excluding Certified Organic) including aviary, barn and other systems of housing were 1.6 percent higher than in June to 87.0 million. The increase was attributed to new placements despite depletion of a single complex of 1.8 million hens due to HPAI in early June. The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. It is evident that a proportion of organic and cage-free eggs are down-priced to the generic category when comparing Nielsen retail sales data with potential production based on apparent hen numbers as posted by the USDA.

 

Average weekly egg production for Certified Organic in July was down 0.6 percent from June 2022 attaining a questionably high average of 83.6 percent on a hen-week basis (last two months 84.1 percent). Average weekly flock production for cage free flocks other than Certified Organic in July was down by 0.6 percent from June 2022 attaining a questionable average of 82.5 percent on a hen-week basis (last two months 83.0 percent). Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements in anticipation of pre-Easter and pre-Christmas demand. Average flock production in July 2022 represented a balance between older flocks some of which were molted and the relatively higher production from pullet chicks placed during January 2022.

 

Flock Size Average

(million hens)

July

2022

June

2022

Average

Q2 - 2022

Average

Q1 - 2022

Average

Q4 - 2021

Average

Q3 - 2021

Certified Organic

17.9

18.0

18.1

18.2

17.7

17.6

Cage-Free Hens

87.0

85.6

88.2

92.9

81.7

72.3

Total Non-Caged

104.9

103.6

106.3

111.1

99.4

89.9

Average Weekly Production (cases)

June

2022

June

2022

Certified Organic @ 84.5% hen/day

294,235 

292,460 -0.6

Cage-Free @ 83.4% hen/day

1,381,256

1,396,222 +1.1

Total Non-Caged

1,675,491

1,688,682 +0.8

 

Average Nest Run Contract Price Cage-Free Brown

$1.64/doz. May/June $1.64

Range:

$1.15 to $2.79/doz. (unchanged since Sept. ‘21).

FOB Negotiated July price, grade quality, nest-run. Loose.

Price range $2.40 to $3.10 per dozen

Average July Value of $2.76/doz. $2.46/doz. June 2022

Average Advertised National Retail Price C-F, L, Brown

$3.12/doz. July (was $2.75 June 2022)

USDA 6-Regions

*High: SW $3.49/doz. $3.99 (SW)

*Low: MW $2.99/doz. $2.04 (NW)

*Excludes HI and AK.

 

Negotiated nest-run cage-free price for July 2022 averaged $2.76 per dozen up from $2.46 per dozen in June 2022 reflecting unseasonal Q2 demand. Average July 2022 U.S. retail prices for cage-free eggs were 13.5 percent higher than in June 2022 consistent with demand. In reality a proportion of both cage free and organic production is still downgraded and sold as commodity brown eggs.

 

The disparity between wholesale and retail prices indicates that chains are maximizing margins especially on Certified Organic and pastured categories. This strategy restricts volume of sales and is to the disadvantage of producers.

 

Based on the importance of cage-free production, the USDA-AMS issues the report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is obvious doubt as to the accuracy of individual monthly flock numbers especially when reports show a marked change for the last month in a quarter or no change in the cage-free flock for intervening or sequential months. It is suggested that USDA should consider a quarterly report with more accurate and consistent hen data. This would be more useful to the industry for planning and marketing decisions.

 

Subscribers are referred to weekly USDA wholesale and retail prices posted in the EGG-NEWS Egg Price and Inventory Report E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.


 

COMMODITY REPORT

WEEKLY COMMODITY REPORT: August 4th 2022.

 

OVERVIEW

Over the past five trading days the price trends for corn and soybeans diverged. Corn was lower and soybeans and soybean meal higher but with pronounced inter-day fluctuation. Corn on the CME was down 2.3 percent for September delivery to $6.02 per bushel. Soybeans were up 2.0 percent to $16.18 per bushel for August delivery. The market is still dominated by concerns over drought in some Midwest states, the domestic economy, apparent restoration of shipping in the Black Sea and the consequences of the invasion of Ukraine. Uncertainty is reinforced by the ultimate impact on yields due to the La Nina-induced drought in Brazil and neighboring producer nations. Prices were also influenced by a high but stable Dollar index and only minimal orders placed by China, offset by increasing domestic U.S. demand for biofuels.



To access the report click here.


 

Clock Running out on Needed Labor Legislation

Despite passage by the House of the Farm Work Force Modernization Act (FWFMA), realization of the objectives will depend on Senate action given the calendar, it is unlikely that a bi-partisan compromise will be achieved despite overwhelming support from the agricultural sector.  Senator Michael Bennet (D-CO) and Senator Mike Crapo (R-ID) have worked on a companion bill to the House version with the hope of adoption before the August recess.  When Congress returns, passage of appropriations bills and campaigning will take priority over needed legislation. The Senate bill includes an expansion in the number of visas for farm workers, rights of illegal aliens and wage policy, a core issue. The FWFMA is an extension of the Migrant and Seasonal Agricultural Worker Protection Act that applies to workers holding H-2A visas.

 

Economists have confirmed that granting more visas would be beneficial to agriculture and to consumers and would be deflationary, lowering food costs.

 

Senators on the Republican side of the House have expressed concern over illegal immigration and are demanding resolution of this problem before addressing the Farm Work Force Modernization Act.  This stipulation will doom the bill in the Senate since the bill will require 60 supporting votes to avoid a filibuster.  Given that the composition of both the House and Senate will change after the mid-term election, passage of the FWFMA will be necessary in the current Congress for enactment before mid 2023.

 


 

YUM! Brands Reports on Q2 of FY 2022

In a press release dated August 3rd Yum! Brands Inc. announced results for the second quarter ending June 30th.

 

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

 

2nd Quarter Ending June 30th

2022

2021

Difference (%)

Revenue:

$1,636,000

$1,602,000

+2.1

Gross profit company units:

$84,000

$103,000

-18.5

Operating income:

$554,000

$567,000

-2.3

Pre-tax Income

Net Income

$390,000

$224,000

$407,000

$391,000

-4.2

-42.7

Diluted earnings per share:

$0.77

$1.29

-40.3

Gross Margin company units (%)

16.8

19.8

-15.2

Operating Margin (%)

33.9

35.4

-4.2

Profit Margin (%)

13.7

24.4

-43.9

Long-term Debt and lease obligations:1

$11,540,000

$11,178,000

+3.2

12 Months Trailing:

 

 

 

Return on Assets (%)

23.1

 

 

Return on Equity (%)

N/A

 

 

Operating Margin (%)

31.5

 

 

Profit Margin (%)

24.8

 

 

Total Assets1

$5,790,000

$5,966,000

-3.0

Intraday Market Capitalization

$34,940,000

 

 

1. June 30th 2022  /  December 31st 2021

 

For Q2 2022:-

 System wide: Sales growth +3.0% (excl. foreign exchange). Same store sales growth 1%. Unit growth 4% (excl. Russia)

 

 KFC Division: Sales $677 million; Operating margin 44.6%; Operating profit $293 million; 26,521 units. Same store sales growth: International, 1%; U.S. (7)%.

 

Pizza Hut Division: Sales $235 million; Operating margin 39.2%; Operating profit $93 million; 18,591 units. Same store sales growth: International, 3%; U.S. (3)%.

 

Taco Bell Division: Sales $586 million; Operating margin 36.7%; Operating profit $215 million; 7,900 units.  Same store sales growth: International, 8%; U.S. 9%.

 

52-Week Range in Share Price:  $108.37  to  $139.85   50-day Moving average  $116.76

Market close pre-release August 2nd $122.36

Market open post-release August 3rd  $120.39

Forward P/E  26.0                  Beta 1.0

 

In commenting on Q3 results, David Gibbs, CEO stated “Our second quarter system sales grew 5 percent excluding Russia, driven by sustained development momentum. Despite a complex operating environment and lapping the strongest same-store sales growth in our history, our global business continues to perform well, led by industry- leading results at Taco Bell U.S. including 8 percent same-store sales growth and in-line margins year-over-year. We are pleased with the continued growth of our digital business with digital sales of nearly $6 billion, fueled by the adoption of our global platforms and capabilities. Our second quarter results demonstrate the resilience and power of our unmatched global scale, unrivaled talent and world-class franchise partners that are the driving force behind the success of our iconic brands.”


 

Walmart Pre-announcement Impacts Retail Sector

Stung by criticism that there was no advance warning of the decline in Q1 earnings released on May 17th, Walmart Stores issued a pre-announcement projection cutting Q2 and FY 2023 profit in a release on July 25th after close of trading.

 

Doug McMillon, CEO stated  "The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars." He added, "We’re now anticipating more pressure on general merchandise in the back half."

 

Guidance for FY 2023 was lowered for revenue growth that was reduced to 4.5 percent; Same-store sales increase restated to 3.0 percent, operating income down by 12 percent and EPS 8.5 percent lower.

 

Predictably shares dropped sharply in after-hours trading. WMT was down 8.5 percent from the Tuesday 26th open to $120.70 at 10H30. The sharp decline affected Amazon (down 3.7 percent) and Target (down 3.9 percent) that fell in sympathy.

 

The question of importance is whether the Walmart pre-announcement reflects the economy or whether this is a self-inflicted wound. The consensus is that the Company overstocked in anticipation of ongoing supply-chain disruption and inflation. A company-specific problem is that their demographic is heavily impacted by inflation in fuel and utilities. Their customers have shifted to essentials including groceries, away from discretionary expenditure on clothing, toys and electronics.


 

Introduction Of Thermal Dehydration For Routine Dead Bird Disposal

Phoenix-Sentry, located in Texas, has supplied a number of thermal dehydration installations to broiler growers to dispose of routine daily mortality.  Given the risks of introducing avian influenza to egg complexes using contractors to transport dead birds to rendering or landfills has stimulated interest in alternative methods of on-farm disposal.  Composting requires labor and the purchase of cellulose substrates.  Incinerators use high-price diesel or gas and require careful management and frequent maintenance.  Rotary drum composters are expensive and share the drawbacks of pit composting.

 

The principle of thermal dehydration involves heating of a batch of dead hens to 195F over a 12-hour cycle while undergoing rotation.  The product resembles poultry by-product meal with a yield of 40 percent of the dead bird input.  The nutritional value of the product compares to poultry by-product meal with a crude protein exceeding 70 percent, lysine at 6 percent and methionine of 1.5 percent.  Based on nutrient assay, value is estimated at $475 per ton.  The system has been evaluated and approved by the Texas Commission on Environmental Quality on the basis of total particulate and volatile organic compound emissions each of 0.007 lb. per operating hour.

 

A financial feasibility study was conducted on a model TDS 2000 installation, capable of processing the routine mortality of 0.3 percent per week from a one million hen complex.  Batches of 1,720 pounds of raw material would be transferred to the thermal dehydrator each day, yielding 680 pounds of hen meal each twelve-hour cycle.

 

The capital cost of complete installation would include the TDS2000 at $75,000 together with a suitable shed, concrete pad, handling equipment, storage bins and three-phase power connection for a total of $137,000. 

 

Annual cost of operation would include a fixed cost of $31,700, including depreciation on buildings and installations at 7.5 percent per annum and on the TDS 2000 and other mechanical components carrying a 20 percent per annum rate.  Fixed costs include interest at 5.0 percent and provisions for maintenance and overhead.

 

Variable costs include power at approximately $9,000 per year and maintenance and labor amounting to $27,032.   The value of product attains $59,500 annually plus savings associated with a transport contract to remove dead birds.  Over the first five years of operation during which depreciation on mechanical components would amount to $17,000, operation of the TDS 2000 would provide a positive cash flow of $3,100.  After depreciation of the equipment, annual cash flow would be $20,100.

 

The Phoenix-Sentry thermal disposal system provides a practical solution to disposal of routine mortality, reduces the risk of introducing avian influenza and provides positive cash flow.


 

EPA Issues Biological Evaluation of Sulfoxaflor After Lawsuit

A biological evaluation released in draft form by the Environmental Protection Agency on Tuesday, July 19th confirmed that sulfoxaflor represents a danger to a wide range of insect species including bees that are required to pollinate crops.  In 2015, a Federal court effectively removed sulfoxaflor from the market, since the EPA did not have adequate evidence to demonstrate safety for bees.  Notwithstanding the scientific justification for registration, EPA allowed sulfoxaflor on post-blooming crops in 2019.  This action was challenged by the Center for Food Safety and the Center for Biological Diversity.

 

The approval by FDA in 2019 allowed the compound to be used on soybeans, alfalfa, cotton, corn, fruit and plants and vegetables after blooming and for the pre-blooming stage for peaches, cherries and almonds.

 

The Center for Food Safety noted that sulfoxaflor would otherwise have been applied to blooming crops without the lawsuit, resulting in damage to bee and other beneficial insect populations.


 

Publix Releases Q2 Results

Supermarket chain, Publix, that is not public-traded, released limited Q2 financial data on August 1st for the period ending June 25th.  Sales attained $13,035 million compared to $11,927 million for the 2nd Quarter of 2021.  Net earnings were $628 million compared to $1,009 million in Q2 of 2021. Earnings per share attained $0.18 compared to $0.29 in Q2 2021. Gross margin declined from 28.0 percent in Q2 2021 to 26.7 percent for the most recent quarter.

 

According to the Publix SEC Q10 submission total assets were $30,375 million with long-term debt and lease obligations of $3,017 million.

 

Share price was adjusted downward from $14.91 to $13.84 on August 1st.

 

In commenting on results Todd Jones, CEO stated, “Unfortunately, our results were not enough to offset challenges in the stock market”

 


 

Welfare Activists Intensifying Pressure on Customers

Irrespective of the outcome of the appeal by the National Pork Producers Council and the Farm Bureau on California Proposition #12 to be heard by SCOTUS in October, welfare activists are preparing campaigns to force conversion from conventional cages. This will be a response to a perception that major egg customers are wavering in their 2020 commitments to source eggs from other than conventional cages by 2025.

 

Mercy for Animals is a leader in the coercion of retailers and restaurants.  In coming months, it can be expected that resolutions will be advanced at annual meetings of public-traded companies. Social media will be used to force customers to reconfirm commitments and to specify progress in conversion to alternative housing systems.  It can be expected that companies that have complied or have made substantial progress in conversion will receive complimentary publicity compared to non-conforming vulnerable vulnerable companies that will targeted.


 

Efficacy of Administration of Priming Vaccination Against IB Questioned

Dr. Maggie Thompson of the PDRC, University of Georgia recently presented data on evaluation of the efficacy of administration of live attenuated infectious bronchitis vaccines to prime immunity.  Advances in technology now allow rapid PCR-detection of the DNA of specific variants including Massachusetts, Arkansas, Connecticut, Delaware and Georgia strains.  Sampling choanal clefts after vaccination and correlation with ELISA serology showed that, vaccination “takes” were suboptimal in half the flocks evaluated, subsequently correlated with low and variable serum antibody response. 

 

Adequate levels of immunity were achieved in trials involving careful administration of live attenuated IBV and ND vaccines applied by coarse spray. This is consistent with the It is axiom that “many birds are vaccinated but not all of them are immunized” a frequently quoted reality coined by Dr. James Beard.

 

Flocks require effective administration of vaccines to achieve their genetic potential in the face of challenge with multiple strains of IBV. Available vaccines are effective but only if diligently administered.


 

International Meeting on Avian Influenza Vaccination

The commentary in this edition of EGG-NEWS highlights the persistence of H5N1 highly pathogenic avian influenza in Europe.

 

On October 25th, the International Alliance for Biological Standardization (IABS) has organized a conference entitled High Pathogenicity Avian Influenza Vaccination Strategies to Prevent and Control HPAI: Removing Unnecessary Barrier to Usage.  The meeting will be held in Paris over two consecutive days with an international scientific committee responsible for the program.  The members include Dr. David Swayne as chair with representatives of FAO, WOAH and the IBAS.  The program will consider the current status of vaccination against HPAI; factors inhibiting preventive vaccination; constraints to vaccination from trade restrictions; available vaccines; surveillance of vaccinated flocks and public health considerations. The program will include panel discussions and breakout groups with a review of case studies.

 

The October meeting confirms mounting pressure for vaccination as a preventive measure to limit the financial and logistic costs associated with traditional depopulation appropriate for exotic diseases in nations with intensive livestock populations.


 

Farmer Charged with Extensive GMO Grain Fraud

James C. Wolf appeared in the U.S. District Court for the District of Minnesota on July 22nd to answer charges of wire fraud. He was indicted for knowingly selling conventional corn and soybeans as GMO and organic.  The value of transactions over a number of years amounted to $47 million.

 

According to news reports, the organic certification for his farm was revoked in 2020, but he continued selling product misrepresented as GMO and organic.  If found guilty, the Court may force forfeiture on property derived from the illegal scheme in addition to criminal penalties.

 

The magnitude of the fraud and the duration suggest serious deficiencies in the current system of auditing by third-party commercial entities. The USDA-AMS needs to initiate an enquiry to ascertain how the fraud was conducted and to take appropriate action to prevent a repetition. The question arises as to whether similar frauds involving either domestic or imported commodities have or are currently ocurring. To preserve the integrity of the USDA Cerified Organic Seal the AMS should intensify oversight of audits and initiate a parallel laboratory assay program concurrently with the “paper trail” to detect possible herbicide or pesticide residues and initiate  DNA tests to confirm authenticity.


 

AB5 Protests Affecting California Ports

Governor Gavin Newsom is standing firm over the implementation of California Assembly Bill 5 (‘AB5’) that defines and regulates the status of independent drivers.  As an unintended consequence of legislation directed to rideshare operators, independent truckers would be reclassified as employees, adding expense to both companies and their current operators.

 

Although the legality of AB5 was questioned by the California Trucking Association, implementation of the law during appeal is impacting the income of  independent drivers.  Protests resulted in blockage of transport of containers into and out of the Port of Oakland over a three-day period impeding handling of cargo. 

 

The protests came at a difficult time for the U.S. economy that relies on rapid and efficient West Coast port operation to maintain supply chains and to reduce inflationary pressures 


 

Hope For Resolution of Embargo on Black Sea Shipping

On Friday, July 21st. an agreement was reached between Ukraine and the Russian Federation with the involvement of the United Nations and Turkey.  Grain ships will be able to navigate through a corridor in the Black Sea passing through the Bosphorus to deliver consignments to markets in need of wheat and other commodities from Ukraine.  According to the agreement, empty vessels destined for Ukraine would be certified as free of weapons and safe passage would be assured by the joint coordination center JCC located in Istanbul.

 

The Agreement would have more credibility if Russia had not attacked port facilities in Odessa on the second day after signging representing the first violation. It will be a number of weeks before ports damaged by the Russian Federation are able to load vessels. The winter crop stored in silos is awaiting export as the summer harvest approaches maturity.

 

The agreement is valid for three month periods with extensions subject to mutual agreement by Ukraine and the Russian Federation. One vessel has left Odessa with more to follow.

 

News of the agreement reduced pressure on wheat and indirectly on corn, since approximately 20 million tons of commodities will be released from silos for export before the summer harvest commences.


 

Dr. Janet Remus Receives Poultry Science Association Distinguished Career Award

The U.S. Poultry and Egg Association awarded the 2022 Distinguished Poultry Industry Career Award to Dr. Janet Remus, Technical Director of Danisco Animal Nutrition and Health. 

 

The award recognizes contributions by an industry leader over an extended career.  In commenting on the award, John Starkey, President of USPOULTRY stated, “Dr. Remus has dedicated her career to conducting applied research to problems facing the poultry industry.  She inspires and motivates and has provided guidance to many undergraduate and graduate students.”  He concluded, “We believe that Dr. Remus’ efforts have truly helped to grow our industry.”

 

From 1998 to 2000, Dr. Remus was the Research and Development Manager for Finnfeeds, subsequently acquired by Danisco where she continued research and technical service activities.

 

Dr. Remus has served on a number of Poultry Science Association committees and has authored more than 80 papers, abstracts and proceedings. She earned the B.S. in Agriculture from the University of Nebraska, and her Masters and Doctoral degrees, with an emphasis on poultry nutrition from the University of Missouri.


 

Larry Brown Receives American Poultry Historical Society Award

Larry Brown, retired USPOULTRY Vice-president for Education was the 2022 Poultry Historical Society Award recipient in 2022.  John Starkey, President of USPOULTRY, stated, “We are grateful to both the PSA and the American Poultry Historical Society for recognizing Larry in this manner.”  He added, “This award highlights the dedication, professionalism and integrity he has always exhibited in service to the poultry industry.”

 

 Larry earned the Baccalaureate and Master’s degrees in journalism from the University of Georgia.  He subsequently served in the United States Air Force followed by the U.S. Veterans Administration, managing aspects of benefits and education programs.

 

In 1997, Brown joined the Southeastern Poultry and Egg Association, the precursor of USPOULTRY as Communications Director. In 2007 on his retirement, he was the recipient of the Workhorse of the Year Award from USPOULTRY continuing a consulting relationship.


 

Merck Animal Health Q2 Sales

Egg-NewsIn the July 28th release covering the second quarter of Fiscal 2020, Merck provided sales data for the Animal Health segment. For the second quarter of FY 2022 ending June 30th sales amounted to $1,467 million. This corresponded to $1,472 million during the first quarter of FY 2021 but was apparently five percent higher excluding the effect of foreign exchange. Animal Health sales for Q2 2022 represented 10.1 percent of total company revenue down from 12.9 percent for the corresponding second quarter of FY 2021.

 

Sales of animal health products for livestock during the most recent quarter attained 56 percent of the segment total with the proportion unchanged from 2021.


 

Albertson’s Posts Q1 Financial Results

In a July 26th release, Albertson’s Companies (ACI) posted financial results for the first quarter of fiscal 2022 ending June 18th 2021. This Company can be regarded as a bellwether for the retail food industry subject to increased costs of ingredients, labor, packaging and transport in a competitive consumer environment impacted by inflation.

 

Albertsons operates 21 banners including Albertson’s, Safeway, Von’s, Acme, Jewel-Osco and Shaw’s. Albertson’s Companies posted a 6.8 percent increase in same-store sales with a 28 percent increase in digital sales over the first quarter of 2021.

 

For the period, net revenue was $484.2 million on total revenue of $23,310 million.  Comparable figures for the first quarter of fiscal 2021 ending June 19th 2020 were net income of $448.8 million on total revenue of $21,269 million. Diluted EPS rose from $0.78 for the first quarter of fiscal 2021 to $0.84 for the most recent quarter. Gross margin declined from 29.1 percent to 28.1 percent denoting escalation in cost of goods sold due to inflation. During the most recent quarter Albertsons recorded a $79 million gain on property disposition and $6 million in the ‘other income’ category. During the first quarter of 2021 ‘other income’ attained $43 million.

 

In commenting on results CEO Vivek Sankaran stated, "In the first quarter, our teams continued to deliver strong operating and financial performance across all key metrics, and we continued to gain market share," He continued "As we look forward to the balance of the year, while we are thoughtful about the macro environment and the possible implications on consumer behavior, our teams have consistently demonstrated their ability to adapt to a changing back drop in real time. This puts us in a strong position to continue to execute against our Customers for Life strategy, including more deeply engaging our customers both digitally and in-store and delivering against our productivity agenda. We are so proud of the resilience, agility and passion of our teams and their ongoing service to our customers and communities."

 

Albertson’s Companies posted assets of $28,228 million, against long-term debt and lease obligations of $12,618 million ($15,880 million in Q1 2021). The Company had an intraday market capitalization of $14,340 million on January 14th. ACI trades with a forward P/E of 12.0 and has ranged over a 52-week period from $15.97 to $37.85 with a 50-day moving average of $37.44.  Twelve-month trailing operating margin was 3.2 percent and profit margin 1.5 percent.  Return on assets over the past twelve months was 5.1 percent and the return on equity 29.6 percent.


 

Trader Joe’s Store Unionizes

The employees at the Hadley, MA Trader Joe’s store voted 45 to 31 in favor of forming a union under the independent Trader Joe’s United Organization.  This action follows a trend with Starbuck’s, Amazon, Apple and REI workers voting to unionize in specific facilities.  Observers note the enigma of companies facing unionization having a record of generous benefits and competitive wage rates.

 

It is understood that the United Food and Commercial Workers Union is filing a petition for a union election for a Trader Joe’s store in Boulder, CO and employees at a Minneapolis store have petitioned to form their union.

 

In response to the request to unionize, chairman and CEO of Trader Joe’s Dan Bane promised, “If 30 percent of the Crew Members in any store that want to have a union vote, we will proceed.”

 

Workers have cited wages, health benefits and risk associated with COVID as motivation to form unions to allow collective bargaining on these issues.

 


 

Study on Family Meals Shows Potential for Increased Egg Sales for Home Consumption

A study sponsored by the Honey Baked Ham company on meals consumed at home shows that there is considerable potential to increase the number of home meals.  The study was conducted in mid-July by market research group One Poll surveying 2,000 U.S. residents over 18 years of age.

 

Jim Dinkins, CEO of the sponsoring company, stated “Our research shows that people today are only spending three dinners a week with their families, down from sharing four dinners in their youth.  Preparing a family dinner is often viewed as a stressful event.”  Restraints to family meals include difficulty in planning a menu and time required for preparation and clean up.

 

The results of the survey imply that providing convenience products could reduce the restraints of planning and preparation.  Companies preparing and marketing food kits gained market penetration during the COVID period but the cost of meals and disposal of packaging appear to have limited the growth in this segment in 2022. Leading companies are posting losses and falling short of volume projections.  It is anticipated that with escalation in restaurant prices and the costs of fuel, more families will eat at home, providing market demand for egg-based convenience products and prepared meals offered by supermarkets and for home delivery.


 

JUST Egg Substitute Product Recalled

The Food and Drug Administration has recalled JUST Egg Chopped Spring Greens due to potential contamination with Listeria for which there is a zero tolerance by the FDA.  The Company has voluntarily recalled all lots as a precaution although no reports of illness have been reported.  The incubation period for listeriosis may exceed three weeks and concerning clinical signs may only be apparent in the elderly, the immunosuppressed and in pregnant woman. 

 

Contamination of the packaged product may have been derived from the vegetable additive or may be present in the environment of the processing plant. After identifying the source of contamination the manufacturer will have to conduct extensive cleaning followed by a structured program of testing of both the environment and product.


 

Why the U.S. Needs the “Beagle Brigade”

A traveler recently was fined $1,800 on entry to the airport at Darwin, capital of the Northern Territories, Australia, on return from a holiday in Bali.  The passenger had undeclared McDonald’s McMuffins and a ham croissant in his luggage.  Currently, Australia is concerned over the possibility of introduction of African swine fever that is present on the Indonesian island of Bali.  The illegal importation was detected at the airport by a dog trained to screen hand-luggage and cases on carousels.

 

In demonstrating the efficiency of detector dogs, the USDA intends expanding the “Beagle Brigade” from the current 180 dogs and their handlers at major, international airports.  Press reports indicated that at Dulles Airport, trained beagles have each detected as many as 12 illegal importations each day.  With concern over foot and mouth disease, African swine fever and avian influenza, among other exotic diseases, USDA has available a sensitive and cost-effective detection system. Funds expended on expanding the “Beagle Brigade” is justified and should be assigned a priority over frivolous social engineering and projects without any prospect of a return introduced by the USDA.  The fact that close to 100,000 illegal importations will be detected by beagles at U.S airports in 2022, suggests that in locations where beagles are not deployed, extensive albeit unintentional illegal importation is taking place at high risk to the livestock industry.


 

Belgium Reports H5N1 In Foxes

According to a ProMED report on July 28th, authorities in Belgium reported isolation of H5N1 strain Avian Influenza Virus from dead, red foxes (Vulpes vulpes) consistent with concurrent reports in migratory waterfowl and shore birds.  Recent reports have been posted on isolation of the 2022 epornitic H5N1 strain with Eurasian genes from skunks (Mephitidae), raccoons (Procyonidae) and harbor seals (Pinnipedia).

 

The occurrence of H5N1 HPAI in mammals in Europe and North America suggests adaptation to mammalian hosts, which is a concerning reality.   In addition, the presence of the virus that can produce clinical signs in mammalian hosts may contribute to reservoir populations capable of maintaining infection.  Most official reports warn against handling sick or dead mammals, since infection of humans from mammals would appear to be more likely than from birds.

 

Authorities in Belgium are monitoring the Avian Influenza situation in wildlife through the Ostend Bird and Wild Animal Rehabilitation Center.


 

Sanovo OptiLoader for Sale

Prime Foods has a Sanovo OptiLoader Model SL 6/12 for sale. The unit is equipped with CIP. Purchased in 2012.

 

Contact: Richard Lasher  richardlasher@primefoods.us or (812) 897 3783 for price and details.

 


 

Outbreak Of STEC In The U.K. Attributed To Defective Pasteurization Of Milk

A cluster of E.coli O157 infections in in South Yorkshire in the U.K. during 2019 was attributed to consumption of inadequately pasteurized from milk processed by a local dairy.  Twenty cases were diagnosed of whom three developed hemolytic uremic syndrome.  Traceback investigations identified the dairy as the source of infection. Assay of milk demonstrated showed defective pasteurization applying the phosphatase test.

 

Examination of the plant revealed a damaged rubber seal on a flow-diverter valve, allowing unpasteurized milk to contaminate effectively pasteurized product. The owners of the dairy were charged with an offense under existing food safety legislation and pleaded guilty to a series of offenses.

 

The outbreak strain of Siga-toxin producing E.coli (STEC) was isolated from fecal samples from cattle on the farm was supplying raw milk, although the causal organism as derived from patients was not recovered from available product.

 

Public health authorities noted, “Failure to detect the organism in a food vehicle does not provide evidence that the implicated vehicle is not the source of an infection. Detection of a pathogen in food samples should not be considered necessary to prove a link when the epidemiologic data provides good evidence of an association.”

 

Obviously, regulations in the U.K. provide more latitude for regulatory intervention than in the U.S. where demonstration of a pathogen in a product is generally required to order a recall and to substantiate either criminal action or civil claims.

 

In 1985 the Hillfarm Dairy in Melrose Park, IL., was implicated in an outbreak of Salmonella Typhimurium infection involving close to 3,000 confirmed cases and two fatalities. Although the specific cause was not identified it was suspected that contamination of post-pasteurized milk had occurred.

 

The failure of pasteurization in this dairy demonstrates the danger of raw milk that invariably contains pathogens derived from dairy cows, including STEC, Listeria, Campylobacter and Salmonella.


 

Hy-Line North America Position Available

Are you looking to have a key role in an essential organizatioh that feeds the world? Consider joini9ng our team!

 

We are looking for someone who matches our vision and values AND can offer skills as a key player in our organization.  In this crucial role, you will work alongside genuine, hard-working colleagues to fulfill our mission.  We are a successful privately held company who offers meaningful career experiences, excellent benefits, and recognizes team members' hard work with great, creative rewards.

 

Hy-Line North America is looking to have someone join our team as the Souteast Sales Manager.  In this role, you will be responsible for selling day-old chicks to customers in Alabama, Georgia, kentucky, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, and parts of Ohio and Indiana. You will work closely with production and technical services to provide the best quality chicks and service to commercial egg farms. This role involves being on the road 80-120 nights per year and travel throughout the region.

 

Candidates with a bachelor's degree are preferred.  A minimum of five years experience working in the layer industry is required.  Candidatges must have knowledge of teh territory's main layer farms and people.  Candidates must also ave excellent interpersonal skills and proficient computer skills with Microsoft Office programs (Word, Excel, and Outlook).  COVID-19 vaccine required. Reasonable accommodations will be considered.

 

Apply today by emailing your cover letter and resume to HR@hyline.com. We look forward to learning more about you and sharing the Hy-Line story!

 

 

 

Commentary


Persistence of H5N1 in Europe

ProMed reported on outbreaks of H5N1 highly pathogenic avian influenza in Poland and Germany during mid-July. The first recent outbreak was confirmed on a farm on Gizyce in the Province of Wielkopolskie in Central Poland.  Close to 40,000 birds (type not specified) were depopulated.  The case in Germany involved 13,000 geese on a farm in Beverstedt near Cuxhaven in the State of Lower Saxony.

 

The 2021-2022 epornitic now includes 2,398 confirmed outbreaks in commercial poultry resulting in the depopulation of 46 million birds.  Diagnostic laboratories have confirmed H5N1 in 2,733 cases involving wild birds in 36 European nations. 

 

It was determined that 86 percent of the outbreaks in commercial poultry were due to farm-to-farm spread. This was especially evident in France that recorded 68 percent of outbreaks and also  in Hungary with 24 percent of cases in commercial poultry.  Wild bird isolations were most frequently reported by Germany, the Netherlands and the United Kingdom.  The fact that there was a negative correlation between the number of wild bird isolates and commercial outbreaks in the same region may relate to selection bias or the intensity of surveillance of wild birds compared to the protective effect of high levels of biosecurity applied to confined commercial flocks.  All E.U. H5N1 isolates examined belong to clade 2.3.4.4b and were identical to isolates from wild mammals including foxes in Canada, the U.S. and Japan.

 

The persistence of H5 avian influenza in Europe and the most recent cases in turkeys in Utah during mid-July suggest dissemination of the virus by  domestic wild birds since there is minimal movement of migratory waterfowl at this time.  This reality presupposes an alternative to traditional methods of control given that H5 avian influenza is no longer an exotic infection in many countries with intensive poultry populations.  Persistence of infection requires a high level of biosecurity guided by evaluations of outbreaks. The application of both classical epidemiology and molecular analysis could identify routes of introduction of virus onto commercial farms.  Surveillance of wild birds should now be an ongoing exercise no longer restricted to seasonal evaluation of migratory waterfowl.  A range of birds under surveillance should be extended to domestic species.  It is evident that highly pathogenic avian influenza and specifically the H5 clade now prevalent on four continents has become the Newcastle disease of 2020’s requiring a different approach to prevention.


 
Dr. Simon M. Shane
Simon M. Shane
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