Egg-News National Egg Day

Editorial


APHIS Celebrates 50th Anniversary- Future Challenges

The USDA-Animal Plant and Health Inspection Service (APHIS) celebrates 50 years of service having been founded during April 1972.  In a recent edition of the American Veterinarian Medical Association weekly newsletter,  Kevin Shea, Director of APHIS, was interviewed regarding past achievements, the current status of the Agency and future prospects. The primary missions of APHIS are to interdict foreign animal diseases at our borders and to control and eliminate exotic infections as and where they occur.

 

 Shea noted the eradication of bovine brucellosis and Cochliomyia (screwworm) infestation in cattle as two major achievements of the Agency. Advances have been made in suppressing tuberculosis through cooperative federal and state programs.  APHIS was instrumental in establishing a surveillance program for bovine spongiform encephalopathy that maitained the export volume of U.S. beef.

 

It was ironic that that when APHIS was developed from the then USDA Bureau of Animal Management, it was involved in eradication of exotic Newcastle disease (END) then referred to as VVND.  Fifty years later, APHIS is dealing with the tail of the third serious epornitic of Highly Pathogenic Avian Influenza (HPAI) since inception of the Agency.  Effectively, control and eradication of catastrophic poultry diseases is unchanged over 50 for a half-century. The approach comprises rapid diagnosis, flock depletion and disposal, creating areas of zone surveillance with quarantine and restrictions of movement. Diagnostic technology has improved from the dependence on hemagglutination serology and viral isolation with identification in SPF embryos. The current approach applies immuno-based techniques including lateral flow immunodiffusion for rapid screening of suspect flocks, followed by PCR in regional laboratories to confirm a diagnosis, accelerating the process of flock depletion and concurrent control measures.

 

With each succeeding HPAI epornitic, APHIS has demonstrated a faster response due to preemptive contingency planning and organization.  More resources in the form of qualified and trained personnel are available for field deployment. With respect to floor-housed flocks, mass euthanasia using carbon dioxide foam has expedited flock depletion.  To date APHIS has not developed a simple, rapid method of depleting cage and aviary-housed flocks other than enhanced VSD. This deficiency represents the greatest challenge with respect to numbers of birds on affected large complexes with the potential to disseminate virus to adjacent complexes and farms.

 

Administrator Shea pointed to the change in training of professional personnel over 50 years.  He noted that the Agency has moved from recruiting veterinarians from private practice in mid-career to more recent graduates with training in infectious disease epidemiology.  This is evident from webinars presented by APHIS, but it is questioned as to whether their role could become more proactive.  The 2022 outbreak of HPAI is the issue in contention.  Highly Pathogenic Avian Influenza in commercial flocks in the U.S. was preceded by isolation of the predominant H5N1 strain in free-living birds in the Maritime Provinces at the turn of the year and followed by an extension southward from Maine to Florida over succeeding weeks.

 

The initial outbreaks in large-egg production complexes occurred at the end of February in Delaware along the Atlantic Flyway.  In mid-March, outbreaks occurred in Iowa and Wisconsin presumably from migratory birds transitioning the Mississippi Flyway and prevailing through the beginning of April with a case requiring extensive depletion in Nebraska.  A cluster of cases then occurred in mid-April in Lancaster County, Pennsylvania.  The Central Flyway was involved in late April and again, in early June in Colorado.  As of June 6th, 31.4 million laying hens have been depleted in 24 locations in nine states.

 

The fact that the 2022 strain of H5N1 carried Eurasian genes suggested transfer of the virus from Northern Europe through the island nations of the North Atlantic to the Canadian Province of Newfoundland and Labrador.  Given that HPAI is transmitted by free-living birds, most of which are clinically unaffected, requires a radical change in APHIS strategy. It is now no longer possible to exclude this disease at our borders an approach that is appropriate for exotic diseases of hogs including ASF or foot and mouth infection in cattle.

 

It is a matter of record that as early as late March EGG-NEWS suggested that APHIS provide a preliminary review of epidemiologic factors relating to outbreaks among the initial cases in large-egg production complexes.  As of mid-April, almost 20 million hens had been depleted in seven complexes.  Surely, results of an initial evaluation, including whole genome sequencing of isolates and a preliminary case-controlled study could have been performed with interim results available to the industry. Any obvious findings could have been applied to possibly prevent subsequent outbreaks based on identified deficiencies in biosecurity.  It was clearly stated at the time that an interim report would be of more value in mid-April 2022 than a comprehensive study in 2024.  Even as the 2022 epornitic appears to be at an end corresponding to the same week of the year as the previous 2015 event, there is still reliance on the same basic biosecurity measures based on traditional and heuristic principles.  Obvious questions relating to future control and prevention include:-

  • Infectivity of the H5N1 strain of the virus for various commercial poultry species and molecular characteristics of the 2020 strain carrying Eurasian genes,
  • Routes of introduction into a specific area,
  • Methods of introduction onto complexes and farms for diverse poultry species,
  • Why many at-risk complexes were unaffected despite high risk of exposure
  •  The range and role of airborne transmission,
  •  Persistence of virus in the environment,
  • Possibility of endemic wild birds and mammals serving as future reservoir populations.

 

Guidance from the APHIS based on value judgment opinions derived from preliminary field and laboratory epidemiology, may have provided practical suggestions to prevent additional outbreaks during late April through early June. Although the poultry industry recognizes the achievements of APHIS over the past, it must be recognized that the approach of the Agency to any catastrophic disease of poultry including END and HPAI has not altered since 1972.

 

Given the development and application of DNA vaccines, currently being evaluated in France and vector vaccines deployed in Egypt and Mexico, APHIS, in collaboration with USDA-ARS, the biopharmaceutical industry, the World Organization for Animal Health (WOAH=OIE) and academia should prepare for the next HPAI epornitic involving the uapplication of immunization.  The poultry industry and specifically the egg production segment, requires a rapid and comprehensive epidemiologic study in order to correct any defects in biosecurity or industry practices in advance of the next outbreak. Although we were relatively unaffected between 2015 and 2022, there is no assurance, given changes in the virus and the pattern of distribution by migratory waterfowl and seabirds, that we will not be facing additional epornitics in 2023 and succeeding years.

 

The sentiments expressed by Administrator Shea indicate a future for APHIS characterized by the introduction of a higher level of technology.  This will be welcome to the poultry sector, given the immense cost of controlling and eradicating HPAI.  The infection can no longer be regarded as exotic but is now seasonally endemic following introduction by migratory birds in the E.U and North America.  Given the changed epidemiology of the disease, APHIS should adapt and make use of all available resources to respond to future challenges.  The past 50-years is now history. We look to APHIS for innovation as the challenges of exotic diseases intensify and the financial and supply-chain consequences of infection become more apparent.


 

Egg Industry News


Egg Projection June 2022

Updated June USDA Projection for 2022 U.S. Egg Production.

 

The USDA Economic Research Service issued an updated forecast of egg production for 2022 on June 16th 2022, unchanged from the previous May 18th 2022 report that took into account the impact of the HPAI epornitic. The latest revision of production for 2022 was unaltered at 7,688 million dozen, 3.6 percent lower than in 2021. The per capita consumption of shell eggs and liquids combined for 2022 will be 274.8, down 4.5 eggs (2.0 percent) from 2021. The average 2022 benchmark New York bulk unit price was held at 194 cents per dozen. This was 63.1 percent higher than in 2021 attributed to unseasonal high prices during the first quarter and again reflecting losses of 31.5 million hens from the end of February through the first week in June.

 

Subsequent USDA projections will provide greater clarity on the effect of HPAI together with the recovery of the post-COVID economy that is impacted by an 8.6 percent rate of inflation. Egg-liquid consumption will be influenced by reduced availability and higher cost that will once more drive demand for alternatives to ‘real eggs’ as in 2015. Flock size may be limited by the availability of pullet chicks for replacement, rate of conversion to alternative housing systems and the cost of ingredients that will influence margins. Unknown factors such as the eventual extent of the avian influenza epornitic that appears to be ending, the supply and cost of ingredients as influenced by events in Ukraine, export volume of eggs and persistence in demand will all influence production and marketing of shell eggs and products.

 

USDA projected egg production in 2023 will attain 8,170 million dozen with a per capita consumption of 289 eggs.

June 2022 data is shown in the table below:-

 

Parameter

2018

(actual)

2019

(actual)

2020

(actual)

2021

(forecast)

2022

(projection)

% Difference

2021-2022

Production (m. dozen)

8,042

8,265

8,066

7,971

7,688

-3.6

Consumption (eggs per capita)

287.8

293.6

285.5

280.5

274.8

-2.0

New York price (c/doz.)

138

 94

112

119

194

+63.1

Source: Livestock, Dairy and Poultry Outlook released June 16th 2022

 

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices, exports and related industry statistics.


 

Egg Exports

Export of Shell Eggs and Products, January-April 2022.

 

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first four months of 2021 with 2022:-

 

PRODUCT

Jan.-April 2021

Jan.-April 2022

Difference

Shell Eggs

Volume (m. dozen)

61.9

32.0

-29.9 (-48.3%)

Value ($ million)

62.6

49.2

-13.4 (-21.4%)

Unit Value ($/dozen)

1.01

1.54

+0.53 (+52.5%)

Egg Products

Volume (metric tons)

12,389

10,097

-2,292 (-18.5%)

Value ($ million)

35.4

43.8

+8.4 (+23.7%)

Unit Value ($/metric ton)

2,857

4,338

+1,481 (+51.8%)

 

U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

JANUARY-APRIL 2022 COMPARED WITH 2021

 

SHELL EGGS

Shell egg exports from the U.S. during the first four months of 2022 decreased by 48.3 percent in volume and 21.4 percent in total value compared to 2021. Unit value was 53.0 cents higher to $1.54 per dozen in 2022 compared to January-April 2021. The top two importers, Hong Kong and Canada combined, represented 67.8 percent of volume and 50.7 percent of total value.

 

Canada was the leading importer of U.S. shell eggs during the first four months of 2022. The 11.5 million dozen shipped represented 35.9 percent of volume and 20.3 percent of value with a unit price of $1.87 per dozen. During April 2022 imports of shell eggs were up 125 percent in volume with Canada ranked first in volume and value for the month.

 

Hong Kong was the second-ranked importer of shell eggs in January-April 2022, with 10.2 million dozen representing 31.9 percent of volume and 23.6 percent of the $49.2 million total value of U.S. shipments of shell eggs. Average unit value was $1.13 per dozen, below the average prevailing nest-run USDA benchmark price of $1.59 during the first four months of 2022*. In 2021 Hong Kong imported 53.8 million dozen valued at $48.2 million. During April, Hong Kong imported 1.2 million dozen shell eggs valued at $1.5 million down 70.7 percent in volume from April 2021 at a unit price of $0.93 per dozen.

 

* USDA Benchmark unit prices per dozen: January, $1.05 per dozen; February, $1.35, March $1.58 and April $2.36.

 

Mexico was the third-ranked importer of shell eggs during January-April 2022 with 3.2 million dozen representing 10.0 percent of volume and 6.7 percent of total value corresponding to a unit value of $1.13 per dozen 40.7 percent below the U.S. benchmark average of $1.59 per dozen for the four months. During April 2022 imports of shell eggs by Mexico decreased by 83.7 percent in volume and 79.2 percent in value compared to April 2021. During 2021 Mexico was second-ranked in shell egg exports receiving 52.2 million dozen valued at $41.9 million.

 

For January-April 2022 the remaining nations of importance were the E.U., the Caribbean and the Middle East that collectively received million dozen valued at $ million with a unit price of $1.67 cents per dozen. During April 2022 the Caribbean, the E.U. and the Middle East collectively received 0.9 million dozen valued at $1.5 million with a unit price of $1.67 cents per dozen.

 

EGG PRODUCTS

The total volume of exported egg products during January-April 2022 decreased by 18.5 percent to 10,097 metric tons compared to the corresponding months in 2021. Total value of $43.8 million was higher by 23.7 percent compared to the first four months of 2021. Unit value increased by 51.8 percent to $4,338 per ton, up from the $2,857 received during January-April 2021.

 

In April 2022 the U.S. exported 2,040 metric tons, down 34.3 percent in volume but up 21.1 percent in value compared to April 2021. The difference in unit price reflects composition of exports and the relationship between World supply and demand with Ukraine now restrained in production and India as a significant exporter during the month. Through 2021 the U.S. exported 35,068 metric tons of egg products valued at $109.1 million with a unit price of $3,108 per metric ton.

 

 Japan was the leading importer for January-April 2022 based on a value of $13.8 million and a volume of 2,976 metric tons that represented 25.2 percent of the total U.S. exports of egg products, a decrease of 29.5 percent compared with January-April 2021. The high unit value of $4,469 per metric ton compares with the average value for all U.S. exports of egg products with a unit value of $4,339 or $4,283 excluding Japan. The discrepancy in unit price reflects the product mix. With conclusion of a bilateral trade agreement the U.S. is no longer at a competitive disadvantage with respect to the E.U. In 2021 Japan imported 11,796 metric tons of egg products from the U.S., 31.6 percent more than in 2020.

 

Canada was the first in rank by volume among importers, purchasing 3,009 metric tons in January-April 2022 comprising 29.8 percent of volume and 20.3 percent of value with a unit price of $2,958 per metric ton. During April 2022 Canada was the leading importer by volume receiving 746 metric tons representing 36.6 percent of volume and 24.3 percent of value. Volume and value were respectively 27.9 percent and value was 108 percent higher than in April 2021. This reflected restoration of the institutional and food service sectors in our northern neighbor coupled with underproduction.

 

Mexico was 3rd ranked as an importer of egg products over the first four months of 2022 receiving 996 tons from the U.S. representing 9.9 percent of volume and 8.7 percent of value with a unit price of $3,815 per metric ton. Volume and value for the first quarter of 2022 were down respectively 63.2 percent and 32.1 percent. During April 2022 imported a negligible quantity of egg products.

 

For the first four months of 2022 South Korea ranked 4th among importers with 1,463 metric tons of egg products down 14.1 percent from January-April 2021 due to domestic supply increasing from replacement flocks after HPAI depletion. During April, South Korea imported 84 metric tons representing 4.1 percent of total volume and 2.9 percent of value, respectively 57.8 percent lower in volume and 83.3 percent lower in value than in April 2021. In 2021 South Korea imported 5,140 metric tons valued at $513.3 million up 133.3 percent from 2020.

 

COMMENTS

Exports of shell eggs and egg products to our USMCA neighbors were valued at $80.8 million in 2019 and $76.9 million in 2020. During 2021 the value of shell eggs and egg products attained $101.8 million or 32.7 percent of combined export value. January-April 2022 exports attained $37.5 million in value.

 

In addition to landed cost, logistics and availability, prospects for long-term exports of shell eggs will be limited by disease considerations. Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (OIE) principle of regionalization in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), irrespective of pathogenicity from commercial flocks. Most importing nations are now applying regionalization and permitting imports on a zonal, county or state-exclusion basis following H5 or H7 AI infection. Canada and the U.S. operate according to a 2018 bilateral agreement to maintain trade in the event of outbreaks of catastrophic exotic diseases including HPAI and END.

 

With the ongoing and intensifying conflict in Ukraine, egg liquid exports from that Nation will decline sharply in the intermediate term and subsequent availability will constrain exports.

 

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.


 

Egg Week

USDA Weekly Egg Price and Inventory Report, June 22nd 2022.

Market Overview

  • Average wholesale unit revenue for Midwest Extra-large and Large sizes was higher by 8.5 percent from the past week reversing a slow four-week downward trend. Mediums were up by 4.8 percent. This follows depletion of more than 31.4 million hens including 13 large complexes in nine states from the last week in February through the first week in June. The increase in price for all sizes and for breaking stock this past week occurred concurrently with a 3.4 percent decrease in industry shell-egg inventory following a 2.2 percent decrease last week. This suggests larger orders by chains to replenish the retail pipeline in the face of sustained demand as consumers seek value. Retail sales are projected to be stable or slightly higher over the short term. In the unlikely event of additional cases of HPAI, availability will be more severely impacted especially in the breaking sector. Industry inventory decreased overall this past week to 1.71 million cases following the 3.4 percent decrease in shell eggs concurrently with a 2.4 percent decrease in breaking stock. Retailers are expected to maximize shelf prices in relation to demand. Wholesale unit prices during the first quarter of 2022 and the subsequent two months contrasted favorably with the corresponding periods in both 2020 and 2021 that were characterized by low ex-plant unit revenue. Wholesale Midwest prices are still yielding unusually high positive margins, despite the higher combined costs of nest-run, (feed, chicks, labor and fuel), grading, packaging and delivery amounting to approximately 50 cents per dozen according to the EIC.

 

  • Total shell inventory was 3.4 percent lower after a 2.2 percent decrease during the previous week. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the USDA regional inventory figures published weekly, especially over the short term. The seasonal strategy of retailers is to adjust purchases only in response to retail demand and to hold down inventories in their DCs and stores while marking up shelf margins and pressuring suppliers for rapid replenishment of stocks to DCs and through DSD. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

  • Due to the depletion of more than 31.4 million hens through June 6th due to HPAI, unseasonal unit revenue will now be a reality through June and into summer, even without the extension of HPAI to additional complexes.

 

  • The current relationship between producers and chain buyers based on a single price discovery system constitutes an impediment to a free market. The benchmark price amplifies both downward and upward swings as at present and functions to the detriment of the industry over the long term. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

 

  • According to the USDA the U.S. flock in production was re-estimated to 290.3 million hens during the week ending June 22nd. This figure presumably reflects the loss of 31.4 million hens to date depleted as a result of confirmed HPAI in thirteen large egg-production complexes and additional losses on eight smaller farms. The producing flock includes about 2.0 million molted hens that resumed production during the past week. Wholesale margins declined over the past three weeks despite attaining the highest levels for the corresponding weeks in May and June since the 2015 epornitic. The current price for all sizes and categories is a response to flock depletion coupled with sustained demand. The USDA reports include recent diagnoses in Pennsylvania, Utah and Colorado flocks through early June.

 

  • There is some prospect of a return in the food service sector and with frozen and dried egg prices moderately higher over the past two weeks. The ex-farm price for breaking stock on average was up 13.1 percent this past week at 181.5 cents per dozen. Checks delivered to Midwest plants were up 14.2 percent to 168.0 cents per dozen. Prices for breaking stock will remain high in relation to season for the duration of the recovery period from the epornitic as replacement flocks are reared, reminiscent of 2015-2016. The U.S. economy is clearly reopening.

 

Week in Review

 

Prices

According to the USDA Egg Market News Reports released on June 20th, the Midwest wholesale price for Extra-large was up 8.4 percent to 204.5 cents per dozen; Large size was up 8.5 percent to 202.5 cents per dozen; Mediums were up 4.8 percent to 172.5 cents per dozen as delivered to DCs. Prices should be compared to the USDA benchmark average 6-Region blended nest-run cost (excluding provisions for packing, packaging materials and transport) of 83.3 cents per dozen during May 2022. The progression of prices during 2022 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The June 20th 2022 edition of the USDA Egg Market News Report documented a USDA Combined Region value rounded to the nearest cent, of $1.98 per dozen delivered to warehouses for the week ending June 16th 2022. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.87 per dozen. At the high end of the range, price in the South Central Region attained $2.05 per dozen. The USDA Combined Price last week was approximately $1.22 above the 3-year average. This past week Midwest Large was approximately $1.15 above the corresponding week in 2021. Prices rose this week due to increased demand and the realization by chain buyers of the effect on supply following the depletion of 31.4 million hens due to HPAI. Future cases of avian influenza in egg-production complexes are unlikely but diagnoses in backyard flocks denote continued shedding by migratory waterfowl in segments of the Central and Pacific Flyways and sectors of the Mississippi Flyway. Spillover to commercial egg, turkey and broiler flocks may continue as isolated sporadic infections that hopefully will be contained. Prices appear to be following the trend of the 2015 epornitic although for a relatively longer period and at a higher level.

 

Flock Size 

The USDA has adjusted the estimate of flock size this week to reflect the reality of depletion of more than 31.4 million hens through June 6th due to HPAI. According to the USDA the number of producing hens reflecting June 22nd (rounded to 0.1 million) was 289.9 million as adjusted by USDA. The total U.S. flock includes molted hens due to come back into production with approximately 4.0 million new pullets reaching maturity during the week, offset by routine flock depletion in addition to losses over the past three months due to HPAI. Based on inventory level the hen population producing eggs should now be slightly lower than late-Spring consumer demand. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Imbalance between supply and demand has driven prices upwards to 2015 epornitic levels as recorded during April and May. During June prices will continue to fluctuate from week to week but will enter a shallow decline into the third quarter. Prices of shell eggs and products will however depend on the incidence rate of HPAI and level of inventory although the prospect of incident cases in large complexes is less likely moving into July.

 

According to the USDA the total U.S. egg-flock on June 22nd was adjusted to 292.5 million hens including second-cycle birds and those in molt. The nominal difference of 2.6 million between hens in production and total hens is an approximate figure but denotes fewer molted hens due to resume production. At present there are at least 31.4 million fewer hens in both the total and producing flocks with the difference equivalent to 10.7 percent of the pre-HPAI national flock.


 

COMMODITY REPORT

WEEKLY COMMODITY REPORT: June 23rd 2022.

Over the past five trading days prices for corn and soybeans again fluctuated with a consistent downward trend for soybeans and corn. A higher intensity compared to the previous week was evident with an inter-day range of three percent in value for corn and soybeans between Wednesday and Thursday. The market is still dominated by the consequences of the invasion of Ukraine and reinforced by the effects of drought in Brazil and neighboring producer nations. Prices were also influenced by fluctuations in the Dollar index and by orders placed by China coupled with increasing domestic U.S. demand for biofuels.

 

Factors influencing commodity prices in either direction included:-

  • Geopolitical tensions threatening wheat, corn, oilseeds and oil exports from Ukraine following the invasion together with evident restriction on Black Sea shipping. Russia has allegedly stolen in excess of 400,000 metric tons of grain from the Eastern occupied regions and is destroying agricultural infrastructure including elevators and crushing plants and placing landmines in fields. (upward pressure on corn and wheat and an indirect effect on soybeans)
  • A minimal effect from the June WASDE #625 that retained planting area and yields from the previous month but revised ending stocks for corn up by 2.9 percent and soybeans down by 9.7 percent. (slight upward pressure on soybeans)
  • Drought affecting Argentina, Paraguay and Brazil especially in that nation’s Southern states due to a prolonged La Nina The USDA-FAS projects that collectively the three Southern hemisphere nations will be short 8.7 million metric tons of soybeans in 2022. (upward pressure of intermediate intensity).
  • Decreased orders from China for soybeans although consistent with projections of reduced domestic demand due to COVID restrictions and economic slowdown. (transitory upward pressure on soybeans)
  • Demand for soy oil to be diverted to biodiesel, exacerbated by concerns over shortages of sunflower oil from Ukraine but some easing with lifting of restrictions on export of palm oil by Indonesia (variable upward pressure on soybeans and meal)
  • Release of a higher RFS for 2022 and higher weekly ethanol demand coupled with successive weekly increases in production. Year-round E-15 has been authorized but with minimal incremental uptake. (upward pressure on corn)
  • Planting although initially slower than in 2021, has attained 4-year average values. Delay was due to inclement weather and non-availability of fertilizer in some regions. (diminishing effect on corn but neutral on soybeans).
  • Volatility of the Dollar Index (DXY) that declined from 105 on May 12th to 101 on June 2nd but back to 104 on June 23rd influencing timing and volume of export orders (fluctuation in corn and soybean prices)
  • Purchases of commodities by hedge funds is declining amid fluctuating equity, concerns over a recession and a rise in the 10-year Treasury bond rate (downward pressure)

 

Based on CME quotations on June 23rd U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $7.40 per bushel for corn delivered in July, down 5.6 percent from the June 16th quotation for July delivery. Crushers will pay $15.90 per bushel for soybeans plus transport and basis for July delivery, down 7.0 percent from the June 16th quotation for July delivery. Soybean meal was down 0.9 percent percent or $4 per ton, for July delivery, continuing the trend of the previous week but lagging soybean price and responding to both domestic and export demand for soy oil.

 

The FAS Export Report released on June 24th for the week ending June 16th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 10.12 million metric tons (398.8 million bushels) with 50.2 million metric tons (1,977 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 0.67 million metric tons (26.4 million bushels) with 1.15 million metric tons (45.1 million bushels) shipped. For the current market year shipments of corn to date are 10.7 percent lower than at the corresponding week a year ago. For market year 2022-2023 outstanding sales this week amounted to 6.3 million metric tons (242.7 million bushels), with 0.36 million metric tons (14.4 million bushels) ordered for the following market year.

 (Conversion 39.36 bushels per metric ton)

 

The FAS Export Report released on June 24th 2022 for the week ending June 16th reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 9.03 million metric tons (331.7million bushels) with 51.2 million metric tons (1,881 million bushels) actually shipped. Weekly soybean orders attained 0.29 million metric tons (10.7 million bushels) with 0.49 million metric tons (18.0 million bushels) shipped. For the current market year to date shipments of soybeans are 11.0 percent lower than for the corresponding week a year ago. For market year 2022-2023 outstanding sales amounted to 13.4 million metric tons (491.2 million bushels), with 0.27 million metric tons (9.7 million bushels) ordered this past week.

(Conversion 36.74 bushels per metric ton)

 

For the week ending June 16th 2022 net orders amounted to cancellation of 8,200 metric tons of soybean meal and cake for the market year 2021-2022, compared to 286,300 tons from the previous week. During the past week 214,000 metric tons of meal and cake combined was shipped, down 4.7 percent from the previous week and representing 2.5 percent of the total 8,676,300 metric tons shipped during the current marketing year to date. This quantity is 2.5 percent lower than the previous market year.

 

Projected harvests and ending stocks were documented in the June 10thWASDE #625,retrievable under the Statistics TAB. The anticipated WASDE #626 will be reviewed in ta mid-July edition of EGG-NEWS with projections on quantities harvested and the effect of trade and domestic consumption on ending stocks of corn updated from the June report. Data should take into account the late planting of corn in the U.S. that may affect yield and the predicted consequences of the invasion of Ukraine by Russia. These events will affect world trade and the negative effect on spring planting in the Ukraine currently in progress.

 

The following quotations for the months of delivery as indicated were posted by the CME at close of trading on June 23rd 2022, compared with values posted at close of trading on June 16th 2022 (in parentheses):-

 

COMMODITY

Corn (cents per bushel)

July 744 (788).

Sept. 666 (742)

Soybeans (cents per bushel)

July 1,592 (1,711).

Sept. 1,506 (1,565)

Soybean meal ($ per ton)

July 425 (429). 

Sept. 4095 (404)

 

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: July quotation down 44 cents per bushel (-5.6 percent)

Soybeans: July quotation down 119 cents per bushel (-7.0 percent)

Soybean Meal: July quotation down $4 per ton (-0.9 percent)

 

The NASDQ spot prices for feedstuffs per short ton for June 22nd 2022 with prices for the previous week were:-

  • Corn (ZC): $274 was $261. 52-week range $177 to $292
  • Soybean Meal (ZM): $402 was $412. 52-week range $311 to $488

 

Values for other common ingredients per short ton:-

  • Meat and Bone Meal (ruminant, Central U.S.): $500 to $550 (wide range for this ingredient according to source and location)
  • DDGS, (MO.): $280 to $300 (was $285) Price varies according to plant and location
  • Wheat Middlings (MO): $260 to $280 (was $235 in early June, reflecting surge in wheat price due to invasion of Ukraine and U.S. drought)
  • Bakery Meal (MO): $225 ($180)
  • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen
  • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

 

The respective changes in the prices of corn and soybean meal for June 22nd spot prices compared with June 16th would lower nest-run production cost for eggs by 1.8 cents per dozen.

*(rounded to 0.1cent)

 

According to the June 11th WASDE #625, corn harvested in calendar 2022 will attain 14,460 million bushels with ending stocks projected at 1,400 million bushels down 2.9 percent from the May 2022 WASDE Report. Total corn stocks on December 1st 2021 amounted to 11.6 billion bushels up 3 percent from December 1st 2020.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being eased, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2022 requirement, accepting a nominal ten percent addition (E-10) to gasoline. This past week 93.2* percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported.

 

According to the U.S. EIA, for the week ending June 10th 2022* the industry produced on average 1,060,000 barrels of ethanol per day. This was up 2.0 percent from the week ending June 3rd 2022, rising above the one-million gallon per day benchmark for the fourth consecutive week. On June 10th ethanol stock was down 1.7 percent from the previous week to 23.2 million barrels, representing an approximately 20-day reserve and confirming increased demand given a decrease in stock relative to increased production. The White House has allowed all-year round 15 percent addition to gasoline. Given that many light vehicles cannot use more than E-10 and drivers are curtailing mileage due to high fuel cost and with restraints imposed on fuel station storage and dispensing, the short-term prospects for increased domestic consumption are unfavorable. 

*Updated figures delayed due to Federal holiday.

 

Ethanol quoted on the CBOT (EH) at close of trading on June 23rd was priced at $2.14 per gallon down 2 cents from the previous week and compared to a 52-week range of $2.13 to $2.48 per gallon. Concurrently RBOB gasoline traded on NASDQ (RB) at $3.73 per gallon on June 23rd down 18 cents per gallon from the previous week. The 52-week range for RBOB gasoline is $1.90 to $4.04. The CME WTI crude price of $104 per barrel at close of trading on June 23rd was 12.6 percent lower than the previous week easing inflation. Gasoline is now $1.59 per gallon more expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1st 2021 now functioning, DDGS is freely available but commands a price consistent with corn. A Missouri plant priced a branded DDGS at $280 per ton on June 16th down $5 per ton from the previous week. Wide price variation exists depending on supplier and location. A plant in central Ohio offered DDGS at $250 per ton this past week. It is axiomatic that the cost of DDGS will reflect changes in the price of corn. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on price relative to the nutrient contribution of corn and other ingredients. This may change as corn and hence DDGS fluctuates in price

 

 Soybeans continue to be the beneficiary of export demand by China although lower than the previous market year. Exports are maintained by supplying other nations in addition to domestic livestock production and demand for soy oil. The USDA projected a harvest of 4,640 million bushels in the June WASDE #625. Ending stocks were decreased 9.6 percent from 310 to 280 million bushels. Total soybean stock on December 1st 2021 amounted to 3.15 billion bushels down 14 percent from December 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for July delivery at close of trading on June 23rd was lower by 119 cents per bushel to 1,592 cents compared to 1,711 cents per bushel for July delivery quoted last week. The decrease in the price of soybeans denotes a decreasing trend from the previous week and is attributed to reduced export demand despite the invasion of Ukraine with disruption of the winter harvest and spring planting in that Nation. Predictions of lower yields in Argentina, Paraguay and Brazil vary but a conservative USDA estimate of a reduction of 0.66 billion bushels (24 million metric tons) was provided. Prices are obviously influenced by projections of yield in the three major producing nations in South America.

 

According to a release on June 15th by the National Oilseed Processors Association 171.1 million bushels of soybeans were crushed in May 2022. This crush value was up 0.7 percent from April 2022 at 169.8 million bushels.

 

 Soybean oil fell 12.5 percent to 63.7 cents per lb. on June 23rd from 72.8 cents per lb. last week. This follows the decision by Indonesia to lift a disruptive short-term moratorium on the export of some palm oil products. Lower prices this past week are despite the realization that world oilseed supply will be limited by a sharply diminished crop and availability of sunflower from Ukraine, the world’s largest exporter with barriers to exports imposed by Russia. During calendar 2022, it is anticipated that 43 percent of U.S. soy oil will be diverted from fuel to biodiesel.

 

On June 22nd 2022 soybean meal was quoted on NASDAQ at $402 per ton, $13 per ton lower than the spot price last week and compared to a 52-week range of $312 to $500 per ton.

 

On June 22nd 2022 Ruminant Meat and Bone meal was priced over a range of $500 to $550 per ton quoted from Central U.S. plants but with a wide range of prices based on composition, source and location. Price fluctuation reflects changes in soybean meal and other oilseed meals.

 

On June 22nd the conversion of the CNY to the BRL was 0.78 BRL, down CNY 0.03 from the previous week. The conversion of the US$ to the CNY was CNY 6.70, unchanged from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

For 2021 the U.S. exported corn to the value of $17,473 million, 112 percent more than in 2020 and comprising 10 percent of the value of all U.S. agricultural exports.

 

For 2021 the U.S. exported soybeans to the value of $26,476 million 48 percent more than in 2020 and 15 percent of the value all U.S. agricultural exports.

 

COMMENT

Subscribers are referred to the June 10th 2021 WASDE # 625 and the USDA quarterly Grain Stocks Report available under the STATISTICS tab. To be revised when Grain Stocks are updated at the end of June and WASDE # 626 for July are released.


 

Labor Advocacy Group Cites Twelve Major U.S. Employers

Egg-NewsThe National Council for Occupational Safety and Health (NCOSH), an independent labor advocacy group unaffiliated to OSHA, has issued a list of twelve employers cited for accidents that have taken lives during the past year. These include:-

 

  • Amazon with fatalities at a Bessemer, AL warehouse destroyed by a tornado
  • Dollar General stores with a list of employees who were victims of robberies resulting in injuries.
  • Foundation Food Group with six workers died following a nitrogen leak
  • Starbucks that recorded a high incidence rate of COVID among workers

 

The NCOSH claims that employers cited were negligent and allowed workers to be exposed to risks.  In reviewing the list, it is evident that tornadoes are not necessarily the responsibility of employers. However investigations revealed deficiencies in preparedness training, failure to provide adequate shelter in tornado-prone areas or substandard construction not conforming to established engineering codes.

 

Egg-News

 The organization could have recognized companies, especially in the food industry, that have been proactive in introducing measures to control and prevent COVID, reduce ergonomic injuries and who are providing preventive health services.  More progress will be made through dialogue and mutual respect between workers and employers than condemning companies for presumed or alleged negligence.


 

USPOULTRY Funds Research on Salmonella Control

Chick-NewsIn a May 12th press release, USPOULTRY announced a grant of $119,000 to the University of Illinois to review control of Salmonella in raw poultry. The action is prompted by concerns that FSIS will introduce new regulatory measures including intervention at the live bird level to reduce contamination with bacterial pathogens.

 

Chick-News

A range of modalities will be considered with input from the U.S. poultry meat industry through a representative Advisory Council. Result of investigations will be applicable to control of Salmonella in egg-production flocks despite the reality that SE is now controlled in commercial farms by a combination of biosecurity, vaccination and suppy-chain refrigeration.

 

Research was made possible by donations to the USPOULTRY Foundation including a gift from Cooper Farms.


 

Demise Of Australia’s “Big Birds”

Fifty thousand years ago, the Mihirunga (Genyornis newtoni) ‘Thunderbird’ roamed Australia in large numbers.  This bird, weighing as much as 500 pounds and standing six-foot at the back, became extinct 45,000 years ago.  Scientists from Flinders University attribute the demise of the giant bird over a period of 5,000 years to humans gathering and consuming their eggs, reducing the rate of reproduction.  This conclusion was based on shell remnants that had obviously been treated by heat among remains of human settlements.

 

To date, it has not been possible to isolate DNA from bones of the Mihirunga.  Not that any Jurassic Park reintroduction of the bird would be possible.  From a commercial perspective, the Mihirunga had little breast meat was effectively wingless as with all ratites, but very large thighs and gigantic drumsticks. As with all heavy birds, egg production was a limiting factor to sustaining the population, especially after the arrival of human predators.


 

Walmart To Establish Fulfillment Centers

Following the lead of Kroger with their partner, Ocada, Walmart has announced that it will erect four fulfillment centers using robotics and advanced computer technology to achieve a high level of efficiency. Walmart will use Knapp technology that has been tested in a fulfillment center in NJ.   The aim is to offer same-day shipping of a wide range of groceries, clothing and household items that will be available to in excess of three quarters of the U.S. population.

 

According to Dave Guggina, V.P. of Innovation at Walmart, the fulfillment centers will perform the following sequence:-

  • unloading delivered merchandise,
  • distribution of products within the center using an automated storage system,
  • retrieval of products to fill orders using shuttle transports
  • Packing orders followed by shipping

 

Planned fulfillment centers will range from 1.1 to 2.2 million square feet in extent and will be located in Joliet, IL., McCordsville, IN. and Greencastle, PA. scheduled to commence production over the third quarter of 2022 through to mid-2024.  It is anticipated that the four centers, collectively, will provide employment for 4,000 workers, many of whom will have high-paying jobs requiring training and technology.  Ultimately, Walmart intends establishing automated fulfillment centers that will serve 4,700 stores in the U.S. and receive items from 210 distribution centers.

 

Walmart will also upgrade existing distribution centers to deploy robotics from Symbotic Inc. with the first 25 installations scheduled for immediate implementation.


 

Target Lowers Revenue and Profit Forecasts

Following release of Q1 results that impacted the shares of the Company as well as other retailers, Target announced on June 6th that Q2 results would be affected by current market conditions and possibly compounded by inappropriate decisions.  Target has announced plans to “right size” inventory and to be more nimble and will fine-tune pricing.  Target is also upgrading warehousing near ports following the lead of Walmart. The company, along with competitors is experiencing high transportation and fuel costs.  Negative guidance reduced Target (TGT) share price by close to four percent at the market open on Tuesday June 7th

 

Despite the profit warning, Brian Cornell, Chairman and CEO of Target noted that, “Business continues to generate a healthy increase in traffic and sales despite sustained volatility in the macro environment.”  He indicated that short-term remedial action would impose additional costs but the company is confident that this will place the company in a more competitive position and will contribute to intermediate-term profitability.

 

Results for Target covering Q1 of fiscal 2022 can be retrieved by entering “Target” in the Search block.


 

Lidl Donates To Long Island Cares Food Bank

To mark opening their 23rd re-purposed store on Long Island, NY, Lidl will donate $1 to the Long Island Cares Food Bank for every new loyalty member signing up during the grand opening weekend. 

 

Lidl has experienced a difficult entry to the U.S. and initial projections for expansion have not materialized, resulting in changes in top management and strategy.

 

Globally, Lidl operates 11,000 stores in 32 nations and employs 310,000 worldwide.  As of June 2022, Lidl operates 170 stores in the U.S. and competes directly with deep discounter Aldi, offering low prices but also with a narrow range of products, the majority of which are private label.


 

ASPCA Offers Grants on Welfare

The American Society for the Prevention of Cruelty to Animals (ASPCA) is offering up to $100,000 in funding to organizations and institutions through the ASPCA Fund to End Factory Farming.  Grants ranging from $15,000 to $25,000 will support projects "bringing attention to the need to shift toward more humane healthy and sustainable on-farm practices".  A secondary objective is to reduce consumption of animal protein. 

 

In announcing the grants, Daisy Freund, Vice President of Farm Animal Welfare at the ASPCA stated, "the lack of transparency around industrial animal agriculture's harms has allowed this cruel form of animal production to dominate our food system".  She added, "the ASPCA Fund to End Factory Farming will support the broad community of researchers, advocates and businesses that are proving that there is a better way forward for animals, people and the environment".

 

ASPCA specifically anticipates grant request quantifying the alleged financial burden of factory farming and adverse effects on the environment and public health. The grants are essentially support for those who wish to "dig up dirt" on our highly efficient food system and to advance the unstated but evident vegan orientation of the ASPCA.


 

HSUS Settles HPAI Lawsuit

The Humane Society of the United States, Farm Sanctuary and Mercy for Animals have jointly settled a lawsuit against the USDA over control of HPAI.

Never reticent to waste an opportunity to intrude where their presence is not needed, the welfare advocacy organization brought suit against the USDA over flock depletion.

 

The risks of exposure of large complexes to avian influenza are no different to small farms or backyard flocks. The probabilities of infection are in fact lower with large complexes given the high standards of biosecurity as evidenced by the 2022 epornitic.


 

Backyard Chickens Continuing Source Of Salmonellosis

The Centers for Disease Control and Prevention (CDC) has reported an on-going multistate investigation of salmonellosis among families in contact with backyard chickens. The survey documented 219 cases with 27 hospitalizations and one fatality in 38 states. Of those infected, 26 percent were children under five years of age and the median age of the cohort was 29 years. Serotypes isolated included Salmonella Enteritidis, Hadar, Infantis and Typhimurium.

 

It is recognized that the actual number of infections may be as much as ten-fold higher than the diagnosed cases.  Among 87 patients interviewed, 70 percent reported contact with backyard poultry before onset of illness.  Approximately 30 percent of those who provided information reported eating eggs from backyard chickens.

 

PulseNet identifies individual cases over a multistate region.  In addition to surveillance, the CDC conducts antibiotic resistance surveys on available samples.  Of 219 isolates evaluated, one third were resistant to one or more of human-use antibiotics, including streptomycin (31 percent), tetracycline (32 percent) with lesser percentages for ampicillin and trimethoprim-sulfamethoxazole.

 

Recommendations to prevent salmonellosis as provided by the CDC, include washing hands after contact with backyard poultry, avoiding close contact with live birds and their environment and supervision of children in the vicinity of flocks. While theoretically reducing the risk of infection these precautions are generally ineffective as demonstrated by the incident rate.


 

Dereliction Of Responsibility By FDA Over Inspection of Baby Formula Plants

It was recently disclosed that during 2020, U.S. FDA inspectors failed to visit any of the major manufacturers of baby formula.  Their justification was based on restrictions associated with COVID.

 

The Abbott Nutrition  plant in Sturgis, MI was not reviewed for over two years.  When inspected, a number of deficiencies were observed in both structure and operations.  Notwithstanding this situation, the plant was not reinspected until after outbreaks of Cronobacter sakazaki infection were diagnosed and attributed to contaminated formula produced by the facility.  The FDA was tardy in responding to a detailed whistleblower complaint regarding deficiencies in the Sturgis plant and the activities of management to obstruct FDA inspectors.  Following a detailed evaluation of the plant, a recall was issued in February 2022 and the plant was closed for decontamination and retraining of personnel.  This action resulted in a widespread shortage of formula, given that the plant was responsible for a significant proportion of baby formula manufactured in the U.S.

 

Following Congressional involvement, the Food and Drug Administration is now obliged to inspect all plants manufacturing infant formula at six-month intervals.

 

Deficiencies in both the organization and activities of the FDA as disclosed in hearings should result in radical changes.  Establishing a separate food safety agency would be justified given the appalling record of insensitivity and non-awareness of problems leading to this and previous foodborne infections.  The fact that food safety is fragmented among various federal departments, including the USDA for red meat and poultry and the FDA for virtually all other foods including imported products, is an obvious organizational defect and should be rectified.


 

SCOTUS Review of Glyphosate Appeal in Question

There is uncertainty whether SCOTUS will hear the appeal by Bayer AG holding company of Monsanto to set aside lower court decisions on glyphosate claims. Plaintiffs were awarded damages in jury trials alleging a cause-and- effect relationship between non-Hodgkin lymphoma and contact with glyphosate-based herbicides marketed under the RoundUp™ brand. Bayer faces extensive payouts following the three adverse verdicts in three cases with the assumption of responsibility and damages upheld by the Ninth U.S. Circuit Court of Appeals.

 

The basis of the Bayer appeal is that the Monsanto-Bayer product was not responsible for non-Hodgkin lymphoma based on the fact that the U.S. Environmental Protection Agency had approved the product and would not allow a California label warning concerning the potential for cancer, which has yet to be scientifically established.

 

Two Plaintiffs alleged that they acquired cancer from exposure to glyphosate as applied in their gardens and the third was a groundsman in a sports complex. It is a matter of record that the EPA was unable to establish any association between the compound and lymphoma among agricultural workers in California following a retrospective study.

 


 

Ferrero Plant Resumes Production After Decontamination

The Federal Agency for the Safety of the Food Chain in Belgium has authorized the Arlon plant owned by Ferrero in Belgium to resume production.  The plant was closed after traceback confirmed that the production facility was responsible for an outbreak of Salmonella Typhimurium accounting for 450 confirmed cases among children in the E.U. in addition to four in Canada and one in the U.S.  Between December 2021 and January 2022, 10 out of 81 samples from the plant that produced the Kinder™ brand of chocolates yielded the pathogen.

 

Permission to resume production is provisional and will be subject to intensive surveillance of product and the environment of the plant. This case illustrates the capacity of public health authorities in the E.U and the U.S to recognize outbreaks due to a common pathogen and identify the vehicle of infection and source. This is attributed to databases including FoodNet in the U.S. and the extensive application of whole genome sequencing of isolates from patients, implicated foods and plant environments.


 

Ethan Giroux Named NSAC Fellow

The National Sustainable Agriculture Coalition (NSAC) has awarded a Jeannette K. Watson Summer Fellowship to Ethan Giroux. He is a member of the Giroux family of Chazy, NY. and is enrolled in a BA program with business and social entrepreneurship as majors.

 

In recognition of his strong agricultural connection, he anticipates a career in food production with an emphasis on environmental enhancement.


 

The University of Maine Develops Recyclable Nanocellulose Food Containers

According to the Bangor Daily News, a research team led by Dr. Mehdi Tajvidi has developed a substitute for single-use plastic containers for food.  The product is based on pulp derived from recycled wood composites with a coating composed of cellulose nanofibrils derived from lignin, a component of trees.

 

Dr. Tajvidi stated, “Research in my lab has focused on two main topics, using cellulose nano- materials as binders in composites for building and automotive applications and producing renewable packaging materials with barrier properties against oxygen, water, oil and grease.  The containers fabricated using this technology are fully recyclable maintaining their grease-resistant properties.”

 

It is estimated that 80 percent of marine waste comprises plastic materials and that a high proportion is represented by single-use plastic items, including fruit containers, disposable tableware and bottles.


 

East Coast Ports Handle Increased Volume

The Georgia Ports Authority reported handling a record volume of 519,390 twenty-foot equivalent (TEU) containers in May.  This was an 8.5 percent increase over the corresponding month in 2021.  The Port of Virginia processed more than 314,000 TEUs in May also a record.  The Port of Charleston, S.C. handled 255,104 TEUs an 11.0 percent increase over May 2021.

 

Increased traffic was due to diversion of vessels from the West Coast that are encountering problems of congestion and delays in moving containers away from port facilities. During the past year, most East Coast ports have improved efficiency by creating off-site staging areas for containers. A recent report by an international agency confirmed that major East Coast ports were ranked highly in efficiency compared to the ports of Long Beach and Los Angeles in California.


 

La Nina Weather Pattern to Persist

According to the National Weather Service, mean surface temperature in the littoral Pacific Ocean along the coasts of Chile and Equador suggest a third year of La Nina.  The current cycle of two years has produced hot summer temperatures in the U.S. corn-producing states.  Only two instances of a three-year La Nina have been recorded since 1950.

 

A description of the El Nino/La Nina oscillation can be retrieved from the SEARCH block by entering ‘El Nino’.

 


 

2022 Renewable Fuels Standard

According to a release from the Environmental Protection Agency on June 3rd, the following volume requirements were determined for 2022: -

 

  • Cellulosic biofuel: 0.69 billion gallons
  • Biomass-based diesel: 2.76 million gallons
  • Advanced biofuel: 5.63 billion gallons
  • Total renewable fuel:  20.63 billion gallons

 

Stated values represent ethanol-equivalents on an energy basis with the exception of biomass-based diesel which represents a biodiesel-equivalent. The conventional ethanol component will be 15.0 billion gallons as previously suggested.

 

Michael Regan, EPA Administrator, stated “Today’s actions will help to reduce our reliance on oil and put the RFS program back on track after years of challenges and mismanagement.”

 

Previously in December 2021, EPA denied 69 pending Small Refinery Exemptions petitions, but allowed three small refineries to meet blending obligations under RFS of previous years.

 


 

Congress Finalizes Ocean Shipping Reform Act of 2022

With wide bipartisan support, the U.S. House of Representatives passed the Senate version of the Ocean Shipping Reform Act of 2022 by a 369-42 margin.  The bill was widely supported by agricultural associations, port authorities, the National Retail Federation, and the American Trucking Association, among others.  The Act will widen the powers of the Federal Maritime Commission, specifically with respect to enforcing equitable rates that have soared to the detriment of both the agricultural sector and consumers.

 

The Bill is intended to:-

  • Make ocean carriers responsible for justifying demurrage charges
  • Prevent unreasonable rejection of U.S. export cargoes
  • Enable the Federal Maritime Commission to register overseas shipping exchanges
  • Provide the Federal Maritime Commission with a higher level of funding to carry out their additional responsibilities
  • Ensure best practices with regard to the supply and location of chassis to move containers

 

Predictably, the World Shipping Council and organizations representing ocean carriers, objected to comments from the President regarding lack of competition among resulting in inflation, high costs and disruption in supply chains.  The World Shipping Council is aggrieved at the apparent mischaracterization of their industry and maintains that high rates resulted from an imbalance between available vessels, increased demand for goods all exacerbated by West Coast port congestion.


 

Euthanasia Statistics Dispute PETA Claims

PETA, an animal rights advocacy organization constantly criticizes the animal livestock sector of agriculture over housing, treatment and processing of cattle, hogs and poultry. In an article by John M. Simpson of the law firm Duane Morris LLP, data was presented to show that the Norfolk, VA. shelter operated by PETA has an inordinately high euthanasia rate compared to other shelters in the state of Virginia. Ingrid Newkirk founder of PETA, contends that criticism of the organization over euthanasia is unwarranted based on the fact that the Norfolk shelter takes in all animals irrespective of condition. 

 

Data derived from public records of the Commonwealth of Virginia as presented by Attorney Simpson shows that the proportion of animals reclaimed by owners attained 0.5 percent from the PETA shelter in 2021. The adoption rate of un-reclaimed animals ranged from 53 percent for Chesapeake Animal Services to 89 percent for the Norfolk SPCA.  The proportion of euthanized un-reclaimed animals for the PETA Norfolk shelter attained 64 percent.  In contrast the Norfolk SPCA euthanized 4.0 percent of animals, Virginia Beach Animal Control 6.8 percent and the Virginia Beach SPCA 4.9 percent.  The Chesapeake Animal Services shelter did however euthanize 27.9 percent of animals received but still less than half of the PETA total. 

 

The justification advanced by Ms. Newkirk that PETA receives “animals that are on their last legs” is questionable given the number of animals entering the various shelters in Virginia.  Net receipts for the PETA Norfolk shelter amounted to 827 animals compared to 797 for the Norfolk SPCA and over 1,100 for each of the Virginia Beach Animal Control and Virginia Beach SPCA shelters.  There is some credence to the assertion that PETA is a “dumping ground” for animals since only four of 831 that were received were reclaimed.  The Norfolk SPCA presumably drawing from the same geographic area also recorded only two animals reclaimed out of 799 received.  Chesapeake Animal Services managed to restore 41 percent of animals to their owners and Virginia Beach Animal Control service attained a reclaim rate of 52 percent.

 

The statistics clearly show that PETA is running a euthanasia mill at their Norfolk shelter based on the difference in their adoption and euthanasia rates directly compared to the Norfolk SPCA.

 

Given that PETA apparently received $60.6 million in revenue during fiscal 2020 suggest that this organization as with many other allegedly welfare-oriented charities are less concern over animal wellbeing that raising funds for the benefits of directors and staff and pursuing policies demonizing livestock production in order to promote a vegan agenda.


 

USPOULTRY Hatchery-Breeder Clinic

The 2022 USPOULTRY hatchery-breeder clinic will take place July 20th to 21st at the DoubleTree Hilton in downtown Nashville, TN.

 

Agenda items include bird handling during vaccination and movement, welfare during rearing, controlling coccidiosis, chick transport, data collection and disinfection.

 

For information on registration access <www.uspoultry.org>


 

Survey Confirms Increased Supermarket Sales and Eat-at-Home Trends

The Supermarket News 2022 Survey conducted from mid-March through mid-April confirmed a trend towards increased sales of fresh foods. Among the respondents, 70 percent noted increased sales in the perimeter categories during the twelve months preceding the survey with only four percent recording decreased sales.  The magnitude of sales growth was also striking ranging from one percent to 15 percent. More than a quarter of responding stores experiencing a 4 percent to 6 percent increase in same-store sales among fresh categories with an emphasis on meat, dairy and produce. Retailers expect perimeter sales to continue increasing with growth rates ranging from one to nine percent.

 

Conventional supermarkets consider large stores including Walmart as their major competitors with 38 percent of respondents citing the “big-box” category.  Approximately one-quarter of the retailers recognize online sales as competition with an equal weighting of 6 percent assigned to club stores, convenience stores, farmers, markets and natural and organic retailers.

 

Margins were generally higher according to half of the respondents with dairy including eggs eliciting a positive response from 44 percent of those providing data. Only a quarter of the respondents experienced a decline in either bakery or dairy categories.

 

Availability of trained personnel in deli, meat and dairy sections was regarded as the most important challenge for retailers.  This factor was followed by supply-chain disruption with concerns over the invasion of Ukraine by the Russian Federation with resulting effects on trade and shipping and the consequential contribution to inflation.

 

Retailers are aware of both the overhang from COVID and current high inflation as drivers of continued perimeter sales.  Despite sensitivity to price, consumers are still seeking quality, freshness but not necessarily variety.  Shifts in purchases of dairy, bakery and meat were ascribed to a preference for home cooking although fast casual restaurants and QSRs are regarded as the major competitors with respect to perimeter sales. 

 

Respondents indicated that future strategies to increase sales and to become more competitive included introduction of grab-and-go items, store promotions, increasing space for prepared foods and providing products with fewer additives.  It was interesting that promoting plant-based  alternatives to meat was noted by only 17 percent of respondents as a competitive strategy in response to competition. Alternatives to meat ranked behind COVID safety measures and slightly ahead of internationally inspired recipes.


 

Kroger Installs DSD Software

The Kroger Company is collaborating with Itasca Consulting Group of Minneapolis, a software developer to develop and install systems in almost all Kroger stores including twenty banners in 35 states.  The system will facilitate and monitor direct-store delivery by vendors, specifically for dairy, bread and beverages.

 

Chris Harris Director of Asset Protection and Safety for Kroger stated, “Itasca software will be essential to provide improved function and simplify processes.”  As quoted in Supermarket News Jeff Kennedy president of Itasca Retail stated, “Our system creates a closed-loop process from order creation through receiving allowing retailers to measure vendor service levels.”

 

Itasca has gained considerable support from the retail segment including SpartanNash, Sobeys, Weis Markets, IGA and HAC Inc. the operator of Piggly Wiggly, Food World and other banners.


 

Retail Egg Prices in Berlin Supermarket

Most consumers in cities in Germany buy their food requirements daily, patronizing specialty dairy, bakery or produce stores and from 3,000 to 5,000 square foot local mini-supermarkets. Eggs displayed in an Edeka store in Central Berlin are provided for comparison with the U.S.  Eggs are imprinted with a code at the farm of production or at a packing plant. Eggs are packed unwashed. Shell-eggs are predominantly brown although white eggs are available. Yolk color is more intense and orange- tinted from inclusion of synthetic carotenoids in diets. Fiber packs that are biodegradable or can be recycled are the standard based on strong environmental consciousness among consumers. In conformity with legislation in Germany pullet chicks are derived from hatches where male embryos were removed early in incubation obviating euthanasia of cockerel chicks. Nutritionally enriched eggs are uncommon.

 

 

Prices of eggs in U.S. currency per dozen in the Edeka store were:-

Organic free-range $7.60
Organic barn $4.15
Conventional barn $3.77
Conventional free-range $4.02

10-pack of organic (‘Bio’) eggs. All packaging is biodegradable or recyclable

Detail of pack showing “Ohne Kukentoten” logo denoting that producing flock was
derived from a pullet chick hatch applying embryo selection

 

Commentary


Senators Encouraged Solicitor General To Advocate Before The U.S. Supreme Court Over Proposition #12.

The United States Supreme Court will hear an appeal based on California Proposition #12 at some time in Ocober.  Lower courts have ruled that Proposition #12 is constitutional, despite the fact that there is concern that it conflicts with the Dormant Commerce Clause. Proposition #12 is opposed by twenty state governments and the majority of associations representing agriculture.

 

Senators Diane Feinstein (D-CA); Alex Padilla (D-CA) and Corey Booker (D-NJ) with 13 other members of the Senate requested that Solicitor General Elizabeth Prelogar support California Proposition #12 by submitting a brief and presenting oral testimony. Other senators supporting the request for the Solicitor General to advance the constitutionality of Proposition #12 represent states that have enacted laws paralleling California statutes, including Michigan, Illinois, and New England states.

 

The senators urged the Solicitor General in their communication “to support California Proposition #12 that is intended to prevent animal cruelty, protect the health and safety of California consumers and decrease the risk of foodborne illness”.  The letter continued, “We believe that the previous Administration’s position on Proposition #12 was based on a misconception of the law.” In the event the Solicitor General will present  the Government case supporting Proposition #12.

 

The Supreme Court will not consider the justification for the ballot initiative and should exclude any considerations of welfare or foodborne disease.  Their consideration will be confined to constitutional issues.  The overriding question is whether California can impose state standards of management on producers in other states thereby impeding interstate commerce.

 

The claims regarding stocking density for poultry, breeding sows and veal calves have no direct or scientifically supportable association with foodborne infection. The Proposition and subsequent legislation can be regarded as a contrived justification to protect producers in California from competition. California consumes 13 percent of the nation’s domestic pork but houses 0.2 percent of breeding sows, suggesting an extremely one-sided approach to imposing welfare standards.

 

 Proponents of Proposition #12 and the resulting restrictive legislation are relying on the original invalid contention by the HSUS, advanced to sway voters in 2008 that confined herds or flocks are more liable to be infected with foodborne pathogens than animals allowed space requirements consistent with Propositions #2 and #12.

 

The restrictions imposed by Proposition #12 when enacted will obviously impact the hog industry, since the practice of confining sows to relatively small crates, hardly larger than the animal, during gestation will require investment in alternative facilities to allow 24 square feet of floor area. At the present time, approximately 25 percent of sows are managed under group housing, demonstrating that it is possible, albeit with greater care and capital expenditure to operate the system. 

 

With respect to egg production, the requirements for California are currently satisfied by domestic producers who have invested in non-confinement following Proposition #2 in 2008.  If the Supreme Court rules that Proposition #12 is unconstitutional, further conversion to other than conventional cages or enriched modules will cease and laws similar to Proposition #12 in the New England states will also be invalid wsith respect to eggs introduced from other states.  In specific states where confinement laws were enacted producers will be obliged to conform but will be vulnerable to the introduction of eggs from non-compliant states. It is doubtful whether revocation of confinement laws will take place in states where legislation has been passed banning conventional cages.

 

There is concern that if Proposition #12 is declared unconstitutional, there will be unintended consequences affecting interstate trade and the ability of states to effectively control interstate transmission of the diseases of plants and animals.

 

Irrespective of the outcome, Proposition #2 and its successor, Proposition #12 represented an indirect tax on consumers based on the higher price of eggs and animal protein.


 
Dr. Simon M. Shane
Simon M. Shane
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