The U. S. Food and Drug Administration (FDA) has submitted requests for enhancements and activities that will add $7.2 billion to the Fiscal Year 2024 budget. In supporting the request, the Commissioner, Dr. Robert M. Califf, stated that the funding is required for vital oversight of tobacco products, to strengthen medical product safety and to ensure that programs have the highest success for the good of public health.

The FDA release notes, “Building on lessons learned from the infinite supply chain response, the budget includes funding to modernize infant formula oversight and to respond to shortages of critical foods and to reduce exposure to toxic chemicals in food.”  It is evident that the FDA intends to expand oversight of the animal feed industry including ingredients that are combined, packaged and sold as animal food.  It is however unclear whether the FDA is referring to animal feed or food derived from animals in their request for funding since the USDA-FSIS is responsible for red meat and poultry.

Among the components of the budget, FDA has requested: -

• $130 million for food safety and nutrition modernization.  This activity would include food labeling and the oversight of animal feed.  It is evident that the request relates to the widely criticized reorganization implementing a matrix structure.
• $10 million is requested for improvements in information technology including emerging threats, and allowing real-time continuously access, analysis and aggregation of information.
• $16 million is requested for “mission support functions within the Office of the Commissioner”.  This is intended to provide strategic direction, policy coordination and business services to enhance the efficiency of FDA programs.

The FDA intends to require animal drug sponsors to make post-approval safety-related label changes based on information that becomes available after approval.  FDA will request the authority to exclude products or classes of products that either the FDA or the Environmental  Protection Agency consider deleterious.  The FDA intends to assume regulatory authority for animal-use pesticides to be regulated as animal drugs.

The FDA intends requiring industry to test food products to be consumed by infants and children for the presence of toxic elements and make available the results of assays.  This requirement relates to the revelation that juices marketed for children were and are contaminated with heavy metals.

The FDA will apply funding to effect mandatory recall covering all human and animal drugs medical devices, tobacco products, cosmetics and foods that are currently under the jurisdiction of the FDA and are subject to recall.

While it is recognized that a government agency should be responsible for maintaining the safety and efficacy of drugs and medical devices, the question of divided jurisdiction among the FDA, USDA-FSIS and EPA among other Federal agencies raises the issue, now openly discussed,  whether the U. S. public would be better served by an independent Food Safety Agency.

Dr. Califf is asking for a lot of money to achieve what is necessary but should have been incorporated in the mission of the agency.  Dr. Califf is attempting to pour money into an agency with an inappropriate organizational structure and a culture indifferent to food safety. Recent history confirms that the FDA has underperformed with respect to food safety, resulting in a number of significant outbreaks of foodborne disease, potential toxicities and obvious failures in oversight of the mission to protect consumers.

The FDA press release on March 9^th is replete with jargon and lofty promises. Implicit in the release will be the imposition of inappropriate restraints and regulations with respect to animal production and on the compounds required to maintain profitability in the agricultural and livestock sectors.

Without demonstrating that he can run the FDA to accomplish the basic missions of the Agency, Dr. Califf appears intent on mission creep and acquiring jurisdiction over aspects of animal production for which the FDA is ill-suited.

EGG-NEWS supports the reasoned recommendations of prominent experts including attorney William Marler to create a separate food agency split from the FDA. Egg-News goes a step further in suggesting that any new agency should incorporate the functions of the USDA-FSIS. Pathogens are unresponsive to Washington turf bureaucracy. Oversight of food safety should be a seamless activity devoid of jurisdictional disputes such as the responsibility for pizzas with either cheese or pepperoni toppings.

REVIEW OF FEBRUARY 2023 EGG PRODUCTION COSTS AND STATISTICS.

FEBRUARY HIGHLIGHTS

• February 2023 USDA ex-farm blended USDA nest-run benchmark price was 213.8 cents per dozen, down 34.5 percent from the January 2023 value of 326.4 cents per dozen. For comparison average USDA benchmark price for 2022 was 236.1 cents per dozen with a range of 191.1 cents per dozen in June to a high of 439.1 cents in December. Stock levels and prices prior to the onset of flock depletion due to HPAI indicated a relative seasonal balance between supply and demand. Prevailing wholesale prices will be largely dependent on future consumer demand in an inflationary environment. Other considerations include diversion to shell sales from the egg-breaking sector and fluctuation attributed to the amplification of changes in unit wholesale price due to the price discovery system. A significant decline from unseasonal current levels is anticipated into mid- 2023 unless additional depletion of flocks occurs due to HPAI.
• February 2023 USDA average nest-run production cost was up 1.4 cents per dozen (1.7 percent) compared to January 2023 attaining 85.3 cents per dozen, mainly attributable to a 2.4 percent higher average feed cost per dozen.
• February 2023 USDA benchmark nest-run margin attained a positive value of 125.5 cents per dozen compared to a margin of 242.5 cents per dozen for January 2023. Average nest-run monthly margin for 2022 was 155 cents per dozen.
• January 2023 national flock in production (over 30,000 hens/farm) was up 0.14 percent or 0.4 million hens to 291.4 from the December 2022 value of 291.0 million. Approximately 2.5 million hens returned to production from molt in January together with projected maturation of 24.0 million pullets, with this number offset by depletion of spent flocks. From February through mid-December 2022, approximately 44 million hens were depopulated to control HPAI.
• January 2023 pullet chick hatch was down 7.8 percent or 1.9 million from December 2022 to 22.3 million.
• January 2023 exports of shell eggs and products combined were down 23.5 percent from a low volume in December 2022 to 323,700 case equivalents representing the theoretical production of 4.6 million hens.

TABLES SHOWING KEY PARAMETERS FOR FEBRUARY 2023.

Summary tables for the latest USDA February 2023 prices and flock statistics made available by the EIC on March 10^th 2023 are arranged, summarized, tabulated and compared with values from the previous February 10^th 2023 posting reflecting January 2023 costs and production data.

COSTS & REVENUE

Components of USDA 6-Region 1^stCycle nest-run Cost of Production:-

Note: 1. Rounded to decimal of a cent

* Adjusted January 2022 and used as a rounding factor

Export of Shell Eggs and Products, January 2023.

Exports of shell eggs since March 2022 have been constrained by availability due to progressive and cumulative depletion of 44 million hens over 11 months as a result of HPAI with the national flock about 20 million hens constantly lower than the pre-HPAI complement. Sharp rises in price as a result of supply-demand disequilibrium have made U.S. export prices uncompetitive as denoted by lower volumes over successive months. Egg products have also been impacted but to a lesser extent than shell eggs.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January 2022 with January 2023:-

U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING JANUARY 2022 COMPARED WITH JANUARY 2023

SHELL EGGS

Shell egg exports from the U.S. during January 2023 decreased by 18.6 percent in volume but gained 107 percent in total value compared to pre-HPAI January 2022. Unit value was $1.54 per dozen higher to $2.98 per dozen compared to January 2022.

Canada was the leading importer of shell eggs in January 2023, with 3.5 million dozen representing 66.7 percent of volume and 82.6 percent of the $17 million total value of U.S. shipments of shell eggs. Unit price in January 2023 was $3.23 per dozen compared to $1.00 per dozen for 0.1 million dozen in January 2022. The sharp increase in imports by Canada is attributed to higher consumer demand and depletion of some domestic flocks due to HPAI. The controlled supply situation in Canada inhibits flexibility necessitating imports from the U.S.

Hong Kong a traditional large-scale importer responsible for 21 percent of imports in 2022 was a distant 5^th-ranked importer of U.S. shell eggs during January 2023. Only 0.1 million dozen were shipped represented 1.8 percent of volume and 1.2 percent of value. Unit price at $2.00 per dozen was $0.54 per dozen below the average prevailing 12-month trailing average nest-run USDA benchmark price of $2.54*. This indicates a loss in revenue experienced by shippers presumably operating under contract. During 2022 Hong Kong imported 14.8 million dozen from the U.S. valued at $18.3 million compared to 2021 with a volume of 53.8 million dozen valued at $48.1 million

During January 2023 five nations with individual volumes of 0.1 to 0.6 million dozen contributed to a collective 2.1 million dozen representing 36.8 percent of U.S. exports. This compares with 4.4 million dozen in January 2022. Value of exports for the five nations amounted to $2.8 million in January 2023 compared to $5.1 million for the first month of 2022. Unit price was $1.33 per dozen, $1.93 below the January nest-run benchmark price of $3.26* per dozen and did not take into account processing, inland transport and packaging

* USDA Benchmark nest-run unit prices: January, $1.05 per dozen; February, $1.35; March, $1.58; April, $2.36; May, $2.09; June, $1.91; July, $2.71, August, $1.91; September $2.70; October $2.84; November, $3.40; December $4.39 and January 2023, $3.26.

EGG PRODUCTS

The total volume of exported egg products during January 2023 decreased by 31.2 percent to 1,652 metric tons compared to January 2022. Total value of $10.7 million was higher by 8.0 percent compared to January 2022. Unit value increased by 57.0 percent to $6,476 per ton, up from the $4,125 received in January 2022. During 2022 the U.S. exported 25,306 metric tons of egg products valued at $115 million with a unit price of $4,572 per metric ton. Escalation in unit price reflects the composition of exports and the relationship between World supply and demand. Ukraine is now restrained in production but India was a significant exporter during the month.

Mexico was the leading importer of egg products in January 2023 based on value receiving 457 metric tons from the U.S. representing 27.7 percent of volume and 27.0 percent of value with a unit price of $6,345 per metric ton. Volume for January 2023 was up by 25.8 percent and value was higher by 123 percent compared to January 2022.

On March 14^th the USDA Economic Research Service issued updated values for egg production during 2022 with a projection for 2023. Production, consumption and prices were revised from the previous February 14^th 2022 report.

Projected egg production for 2022 was revised upward by 0.8 percent from from the February Report to 7,781 million dozen This will be 3.1 percent lower than in 2021 due to depopulation of approximately 44 million hens infected with HPAI from early spring extending through mid-December. The per capita consumption of shell eggs and liquids combined for 2022 was increased by 0.9 percent despite higher prices, to 279.0 eggs but down 3.5 eggs (1.2 percent) from 2021. The average 2022 benchmark New York bulk unit price was retained at 282 cents per dozen. This was 138 percent higher than in 2021 attributed to unseasonal high prices from the end of March through the 4^th Quarter of 2022.

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 now moderating inflation with a 0.4 percent increase in the Consumer Price Index in February and 6.0 percent compared to the corresponding month in 2021. Groceries were up 10.2 percent from February 2022. Eggs represented a standout among foods with retail price for conventional shell eggs up 55.4 percent from (pre-HPAI) February 2022. Price declined 6.7 percent in February compared to the preceding month. Flock size may be limited by the availability of pullet chicks for replacement, the rate of conversion to alternative housing systems and the cost of ingredients that will influence margins and result in cessation of production by some small-scale producers. Unpredictable factors affecting price will include the extent of losses in the ongoing avian influenza epornitic that may undergo a resurgence late during the 2^nd quarter of 2023 or thereafter; the supply and cost of ingredients as influenced by events in Ukraine; limited export volume of eggs and the duration of current high domestic consumer demand.

The USDA projected egg production in 2023 to be down 0.7 percent from the February Report to 8,035 million dozen with a per capita consumption of 285.9 eggs, down 1.5 eggs or 0.5 percent from the February projection. 

In 2022 egg exports as shell and products combined attained 226.5 million dozen shell-equivalents, or 4.3 percent of production, down 42.2 percent from 392 million dozen or 4.9 percent of production in 2021. During 2022 egg imports, some in shell form but predominantly products attained 25.9 million dozen shell-equivalents, up 42.8 percent from 14.9 million dozen in 2021. The forecast for 2023 is 26.0 million dozen almost unchanged from 2022.

March 2023 data is shown in the table below:-

Source: Livestock, Dairy and Poultry Outlook released March 14^th 2023

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.

USDA Weekly Egg Price and Inventory Report, March 15^th 2023.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were higher this week by 10.6 percent on average, representing a continuation of the upward move for three weeks after seven previous consecutive weeks of decline. Mediums were up 4.6 percent narrowing the gap with Large and indicating restoration in the balance between supply and demand in this size despite many pullets commencing production. This past week shell egg inventory was down 4.6 percent consistent with increased seasonal demand and also attributed to presumably lower shelf prices. Retail price has stabilized but will be influenced by eventual restoration of the national flock. Over the coming month the volume of retail purchases will be influenced by seasonal pre-Easter demand. If chains reduce margins consistent with prevailing wholesale prices, higher demand can be anticipated. Eggs are still competitive in price against the comparable costs for other protein foods. Availability and hence prices have been influenced by depletion of close to 44 million hens in 22 large complexes in eleven states extending from the last week in February through mid-December 2022 with the producing flock down on average by 20 million hens during 2022 and continuing into 2023 compared with the pre-HPAI complement.
• Total industry inventory was down by 4.3 percent overall this past week to 1.55 million cases with a concurrent 3.5 percent decrease in breaking stock attributed to lower food service and industrial demand. Wholesale unit prices during early 2023 although on a downward trajectory during January and early February have trended upwards and contrast favorably with the two previous years that were characterized by low ex-plant unit revenue.
• It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term to establishing wholesale price than the USDA regional inventory figures published weekly.
• Due to the depletion of flocks as a result of HPAI, comparable high unit revenue will now be a reality through the remainder of March and through April 2023. Sporadic outbreaks of HPAI are likely given the seasonal migration of waterfowl. The number and extent of outbreaks cannot be assessed until more information is available concerning the molecular and field epidemiology relating to cases. The USDA has yet to identify modes of transmission for the 2022 epornitic including airborne spread. There have been no case-control studies released on possible deficiencies in biosecurity on affected complexes that presumably demonstrated specific risk factors. APHIS has been remiss in evaluating available data and providing timely practical guidance on prevention as evidenced by releasing a backdated report during the first week of March that contained no recommendations to prevent HPAI infection of flocks.
• 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 evidenced over the past three months. The benchmark possibly functions to the detriment of the industry over the long term. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
• According to the USDA the U.S. flock in production was down 0.4 percent or 1.1 million hens to 300.3 million hens during the week ending March 15^th. The flock in production includes about 3.0 million molted hens that resumed lay during the past week plus 4.0 million pullets attaining production.
• The ex-farm price for breaking stock was up 21.1 percent this past week to 269.5 cents per dozen.Checks delivered to Midwest plants were up 18.4 percent to 238.0 cents per dozen. Prices for breaking stock will remain high over the period of recovery from HPAI until replacement flocks reach maturity.

The Week in Review

Prices

According to the USDA Egg Market News Reports released on March 13^th the Midwest wholesale price (rounded to one cent) for Extra-large was up 10.6 percent to $2.93 per dozen. Large size was up 10.7 percent to $2.91 per dozen; the Medium price was up 4.6 percent to $2.71 per dozen as delivered to DCs. Prices should be compared to the USDA benchmark average 6-Region blended nest-run cost of 85.3 cents per dozen in February 2023. This excludes provisions for packing, packaging materials and transport, amounting to 50 cents per dozen in mid-2022, according to the EIC but now probably closer to 55 cents per dozen. The progression of prices during 2023 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The March 13^th 2023 edition of the USDA Egg Market News Report documented a USDA Combined Region value rounded to the nearest cent, of $2.73 per dozen delivered to warehouses for the week ending March 7^th 2023. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $2.63 per dozen. At the high end of the range, the price in the South Central region attained $2.82 per dozen. The USDA Combined Price last week was approximately $1.50 above the 3-year average. This past week Midwest Large was approximately $1.35 above the corresponding week in 2022.

Flock Size 

The USDA adjusted the estimate of flock size to reflect depopulation of more than 31.1 million hens through June 6^th as a result of the spring wave of HPAI with subsequent depopulation of approximately 14 million additional hens in Ohio, Colorado, Iowa, Oregon and South Dakota in the fall wave by late-December. According to the USDA the number of producing hens reflecting March 15^th (rounded to 0.1 million) was down 1.1 million (0.4 percent) to 300.3 million. The total U.S. flock includes about 3.0 million molted hens due to come back into production with approximately 4.0 million new pullets reaching maturity each week based on USDA chick hatch data. The increase is offset by routine flock depletion in addition to past losses during 2022 due to the HPAI epornitic. Based on inventory level and prices the hen population producing eggs should now be in mild undersupply relative to consumer demand. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Prices will continue to fluctuate, trending mildly upward during the remainder of March and into April 2023. Prices of shell eggs and products will also depend on any future incident outbreaks of HPAI offset by the contribution of new pullets and of molted hens to supply.

Weekly Commodity and Energy Report: March 16^th 2023.

OVERVIEW

At 14H00 on March 16^th CME corn was up 3.4 percent to 633 cents per bushel compared to the previous week. Corn price was influenced by static ethanol production and a projected higher ending stock in the March WASDE despite higher export orders for two successive past week. Soybeans were down 1.5 percent from last week to 1,489 cents per bushel for May delivery. Soybean meal was 2.8 percent lower to 473 per ton for May delivery. The market has now accepted projections of crop size and higher stocks as documented in the February 23^rd USDA Grains and Oilseeds Outlook and confirmed in the March 8^th WASDE Report. Commodity exports that rose this past week were not  materially influenced by a moderate fall in the Dollar Index to 104.6.

WTI fell 10.5 percent to $68.20 per barrel from $76.52 per barrel on Wednesday 15^th at close of trading due to recession-related World fall in demand.

Factors influencing commodity prices in either direction over the past four

 weeks included:-

• A mild U.S. recession in 2023 appears more likely following turbulence in the bank sector in the U.S. and Europe. The Federal Reserve increased the benchmark interest rate by 25 basis points at the February FOMC Meeting. In Congressional testimony on March 7^th and 8^th Chairman Powell opined that higher raises in rates may be applied if inflation is not reduced. This hawkish sentiment drove down equity markets by two percent on March 7^th.  The Federal Reserve determination to raise rates on March 22^nd will be tempered by data indicating a gradual decline in inflation. More significantly evidence that progressively higher rates are indirectly stressing banks with two failures, albeit mismanaged institutions, this week gives rise to an anticipation of a pause at the March FOMC Meeting. The GDP for the fourth quarter of 2022 attained 2.9 percent. The February 2023 CPI (6.0 percent) and WPI (3.9 percent) were lower than forecast (Transitory downward pressure on markets)

• It is evident that polarization in closely divided both houses of Congress will result in conflict over raising the debt ceiling and agricultural legislation including the 2023 Farm Bill that includes SNAP and other entitlements. (Ultimately, downward pressure).

• Geopolitical tensions that impact wheat, corn, oilseeds and vegetable oil exports from Ukraine persist. Limited restoration of Black Sea shipping was accomplished following security guarantees by Ukraine to the Russian Federation in November 2022. Extension of the Black Sea Grain Initiative into April is most probable, especially if the Russian Federation receives concessions on sanctions. The invader has inflicted extensive and deliberate damage on the agricultural and energy infrastructure of Ukraine including elevators and crushing plants. (Upward pressure on corn and wheat and an indirect effect on soybeans if Black Sea shipping is interrupted.)

• The March 8^th WASDE documented lower soybean and grain production and reduced exports from Argentine due to drought. The U.S. will export less corn resulting in higher ending stocks. Soybean exports will be higher, reducing ending stocks with resulting changes in price.

• There is an expectation that Brazil will attain a record soybean harvest of 153 million metric tons with export of 93 million metric tons. Corn harvests from Brazil for the 2022-2023 season will be higher than the previous season although recent dry weather will reduce yields. Corn exports will attain 50 million metric tons (Lower prices in the future subject to favorable reports on crop progress and actual harvests)

• The Dollar Index (DXY) has ranged from 95 to 116 over 52 weeks but has recently shown less volatility. The DXY was at 101 on June 2^nd 202 peaking at 116 in late October 2022 but declining to a range of 103 to 105 during February through mid-March 2023 and attaining 104.6 on March 15^th. The dollar index influences timing and volume of export orders. (Fluctuation in corn and soybean prices, high value depresses U.S. sales)

EXPORTS

The restored and functional ‘legacy’ FAS Export Report released on March 16^th for the week ending March 9^th reflecting market year 2022-2023, confirmed that outstanding export orders for corn amounted to 14.64 million metric tons (576.3 million bushels) with 17.3 million metric tons (678.8 million bushels) actually shipped. Net orders for the past week covering the 2022-2023 market year attained 1.2 million metric tons (48.6 million bushels) with 1.2 million metric tons (45.8 million bushels) shipped over the past working week. For the current market year outstanding sales of corn to date are 40.1 percent lower than for the corresponding week a year ago. For market year 2023-2024 outstanding sales this week amounted to 1.86 million metric tons (73.2 million bushels), with 0.18 million metric tons (7.2 million bushels) ordered for the 2023-2024-market year.

(Conversion 39.36 bushels per metric ton)

The FAS Export Report for the week ending March 9^th reflecting market year 2022-2023, recorded outstanding export orders for soybeans amounting to 6.5 million metric tons (238.6 million bushels) with 42.9 million metric tons (1,574 million bushels) actually shipped. Net weekly soybean orders attained 0.67 million metric tons (24.7 million bushels) with 0.8 million metric tons (28.4 million bushels) shipped for the past week. For the current market year to date outstanding sales of soybeans are 1.2 percent higher than for the corresponding week a year ago. Sales recorded for market year 2023-2024 amounted to 1.5 million metric tons (56.8 million bushels) with sales of 66,000 metric tons (2.4 million bushels) this past week.   (Conversion 36.74 bushels per metric ton)

For the week ending March 9^th 2022 net orders of soybean meal and cake amounted to 220,100 metric tons for the market year 2022-2023. During the past week 337,600 metric tons of meal and cake combined was shipped, representing 6.2 percent of the total 5,451,200 metric tons shipped during the current marketing year. This quantity is 95.7 percent of the volume shipped through the corresponding weeks of the previous market year. For the next market year outstanding sales attained 264,000 million metric tons with sales of 35,000 metric tons this past week.

The USDA Grains and Oilseeds Outlook released on February 23^rd documented initial 2023 planting intentions, ending stocks and prices for the major agricultural commodities.

• Corn will be harvested from 83.1 million acres with a projected yield of 181.5 bushels per acre. Ending stocks will be up 48.9 percent to 1,887 million bushels, depressing price from the previous season by 16.4 percent to $5.60 per bushel.
• Soybeans will be harvested from 86.7 million acres with a projected yield of 52 bushels per acre. Ending stocks will be up 28.9 percent to 290 million bushels tons, depressing price from the previous season by 9.8 percent to $12.90 per bushel.
• Crushers will produce 54,475 million tons of soybean meal. Ending stocks will be up 35.0 percent to 450,000 tons depressing price from the previous season by 8.8 percent to $410 per ton.

Actual 2022 corn and soybean harvests and projected ending stocks were documented in the March 8^th WASDE #634, posted under the STATISTICS Tab.  Corn yield attained 173.3 bushels per acre with a crop of 13,730 million bushels. Ending stock will increase by 5.9 percent to 1,342 million bushels. Soybean yield was 49.5 bushels per acre with a crop of 4,276 million bushels. Ending stocks were projected down by 6.7 percent to 210 million bushels. The March WASDE report was based on actual harvest data and incorporated amended domestic use and export categories. The WASDE presumably considered the predicted impact on world prices following disruption of the 2022 Ukraine crop by the invasion from the Russian Federation.  Values will be updated when WASDE #635 is released incorporating planting intentions, harvests in South America and trade.

COMMODITY PRICES

The following quotations for the months of delivery as indicated were posted by the CME at 14H00 on March 16^th 2023, compared with values at 14H00 on March 9^th 2023  (in parentheses): -

House File 377 introduced by Representative Jeff Shipley intended to ban foods containing GM products, lab-grown protein and insect protein in school feeding.  The bill also incorporated provisions for labeling plant-based protein. The bill was rejected by a subcommittee of the Iowa House of Representatives based on the basis of impracticality.

Legislators at state level frequently propose and sponsor bills that favor agricultural products despite obvious conflicts with constitutional requirements.  These "feel good" bills are intended to generate support among constituents and are intended to burnish the "pro-farm” credentials of incumbents.

In a March 6^th 2023 Statement issued by the White House, the President will veto H.J. Resolution 27 to disapprove the “Revised Definition of Waters of the United States-Final Rule” if passed.

The Administration pointed to the benefits of the revised WOTUS definition that reverts largely to 1986 regulations with appropriate updates and exclusions. The White House maintains that reversion to a pre-2015 definition will be beneficial and will prevent uncertainty if disapproved.

During the past week, in defiance of the White House a bill was passed by a margin of  227 to 198 with the support of Democratic Party members of the Agricultural Committee and House.  The Bill expressed Congressional disapproval of the revised definitions of WOTUS citing Chapter 8 of Title 5 of the United States Code.

The issue in any event is subject to review by SCOTUS with a ruling on the legality of the revised definition to be handed down during the 2023 session.

According to Keith Dailey, Group Vice-President of Corporate Affairs and Chief Sustainability Officer, Kroger is advancing goals initiated in 2006 by investment in energy efficiency. Projects include adoption of renewable energy and installation of refrigerant technology to mitigate emissions from stores and warehouses.

Progress to date includes:-

• Compared to 2018, the company has achieved a 9.1 percent cumulative reduction in greenhouse gas emissions.
• Installed refrigerant leak detection in 2,000 of the company’s retail stores.
• Reduced food waste in retail stores by 19 percent since 2017.
• Initiated a baseline product packaging evaluation in 2022.
• Reduced water consumption by 10 percent by 2021.

Kroger is replacing older vehicles with more fuel-efficient models, improving efficiency by 18 percent.  The company is installing solar arrays at 15 locations and is evaluating anaerobic digestion technology to dispose of waste.

In cooperation with suppliers, Kroger intends extending the program of sustainability.  This will include:-

• A 30 percent reduction in greenhouse gas emissions by 2030 over a 2018 baseline.
• Attaining zero waste.
• Introducing sustainable packaging, including a 100-percent recyclable, compostable or reusable material for Our Brands by 2030.
• Establishing reusable packaging platforms in conjunction with Loop.
• Elimination of single-use plastic grocery shopping bags by 2025.

It is evident that Kroger will require suppliers to parallel their investment and activities in sustainability and enhanced packaging.  Given that Kroger will ultimately acquire the Albertson’s banners, the combined enterprise will represent a significant volume of 5,000 stores nationwide.  The implication of the move by Kroger and paralleled by Walmart, Target and other major retailers is that commensurate investment in power generation and adoption of policies and procedures that reduce greenhouse gas emission will be necessary to continue supplying to Kroger and other chains.  It is questionable whether retail chains will offer a premium for meeting sustainability goals. They are however all intent on burnishing their environmental credentials, inevitably at the expense of suppliers.

The March 10^th edition of USPOULTRY Wire featured Kuhl Corporation, a long-term exhibitor, for their Daily Spotlight.

Kuhl Corporation, a sponsor of EGG-NEWS, is a manufacturer of automated cleaning equipment and a range of egg washers compatible with Moba grader installations.  Kuhl Corporation, a third-generation company enjoys the confidence of the egg-production industry through quality, fair pricing and efficiency of equipment.  For further information click on to the Company logo on the right side of the Welcome page. 

Conventionally off-line plants record egg deliveries by pallet.  In response to market requests and to improve efficiency, OVO-Vision has upgraded their software. The enhancements allow plant management to pack from houses with an in-line configuration allowing the blending of age groups without sacrificing traceability and accuracy of egg counts. With the new OVO-Vision Software, the number of eggs as recorded by egg-counters can be correlated with grade-out data. Results can be used to plan packing schedules and to compare data with predetermined standards.

The new OVO-Vision Software accumulates grading data for a specific shift or day of operation and can allocate production to individual houses.  Data can be integrated with financial and quality reports.

The OVO-Vision software upgrade allows packers to alternate between in-line and off-line while retaining records of stock inventory and location of product irrespective of the respective stages in the production cycles of supply flocks.

The new OVO-Vision software has been extensively tested and is available as an upgrade to users of OVO-Vision systems.

For additional information, E-mail J.Jenniskens@OVO-Vision.com or call 1-(31) 475 343180.

EGG-NEWS previously reported on a Salmonella Enteritidis (SE) outbreak at the CA Cedergren complex in Smaland, Sweden during December 2022 that resulted in an extensive national recall of shell eggs.  The outbreak, traced back to the farm, included 80 confirmed cases in 16 regions of the Nation. The Department of Agriculture in Sweden supervised the depopulation of the flock, comprising 165,000 hens in production.

It now appears that following repopulation, SE is still present on the farm and accordingly, additional depopulation will be carried out.  It is evident that this action followed surveillance for SE, although no cases among consumers have been diagnosed.

It would be of interest to determine whether the flocks on the CA Cedergren complex were vaccinated against Salmonella and if so, the type of vaccines and the ages of administration.  Sweden imposes non-conventional restraints on vaccination including a ban on immunizing flocks against Newcastle disease, resulting in a number of outbreaks  of this viral infection in recent years.

Bioceres Crop Solutions of Argentine will market GM wheat, tolerant to drought for the 2023 planting season.  This action follows approval in Brazil and will certainly advance the adoption of GM wheat and other crops worldwide.

Approval of GM drought-tolerant wheat is justified by the impact of dry weather on the 2022-2023 crop in Argentine and the reality of global warming that will impact future harvests.

Consumption of GM corn or products derived from GM soybeans has not evidenced any deleterious effect including allergies or toxicities for over two generations since introduction.  Growing concerns over feeding burgeoning populations and the reality of climatic extremes serve as motivators for adoption of GM cultivars.

Naysayers including Greenpeace and recently, the president of Mexico, can neither provide scientific evidence of undesirable effects from GM crops nor provide an alternative to enhance yields.

Michael Foods is offering a paid summer internship for a student interested in poultry health.  Mentors will provide guidance on necropsy, diagnostic specimen sampling, biosecurity and will provide a perspective on the veterinary specialty of poultry health.  Preceptorships will extend over three weeks and the summer internship for eight weeks.

For additional information contact Dr. Julie Kelly Julie.kelly@michaelfoods.com

Ag Property Solutions based in Emmetsburg, IA. supplies innovative and customized solutions including planning, design, construction and equipping livestock facilities.  The Company was founded by producers and is proud of their record of integrity and efficiency.  Ag Property Solutions undertakes complete turnkey hog, dairy and poultry projects for a range of production capacities including expansion and remodeling.

The website www.agpropertysolutions.com describes the capabilities of the company and provides examples of completed projects. 

For further information contact Michelle Kubat, Marketing Manager mkubat@agpropertysolutions.com (855) 345-6333 ext. 103

Negotiations to resolve the unjustified ban on GMO corn proposed by the president of Mexico Andres Manuel Lopez Obrador in 2020 is inexorably progressing towards an USCMA dispute process. Negotiations by the USDA and the Office of the U.S. Trade Representative (USTR) meeting with their counterparts in Mexico have failed to resolve the issue.

On Monday, the USTR initiated a formal consultation that requires a meeting within 30 days.  If consultations do not result in an amicable resolution, a Dispute Panel will be appointed with nominees suggested by both the U.S. and Mexico.  The elected panel will review scientific evidence, and gather oral and written testimony from both parties.  Following the decision of the Dispute Panel, the party violating obligations under the USMCA will be obligated to settle, failing which tariffs could be imposed on trade.

Legislators view the decision by Mexico to ban imported GM corn as a potentially serious barrier to exports, even if only confined to Mexico, our largest single customer.  Accepting a ban would be acknowledge that GM corn was in some way deleterious to conventional cultivars.

Over 90 percent of U.S. corn is derived from GM varieties and bans on GM commodities if they were to spread to other importing nations would impact the balance of trade and sharply reduce revenue obtained by farmers. Lower exports would reduce the input cost of feed for U.S.  livestock production. This makes the dispute with Mexico more than of academic or legal interest.

Despite the Packers Sanitation Services scandal and an ongoing investigation of the possibility of trafficking of minors, the Iowa legislature is considering a series of bills that would legalize employment of minors.  Children under the age of 18 would be ineligible for employment in meat-packing or rendering plants or be placed in locations where they would be required to operate potentially dangerous machinery.

Employment of minors is viewed as a partial solution to availability of labor but provisions of proposed laws could lead to exploitation.  Bills under consideration would exempt employers from civil liability if a child is injured or undergoes harm attributed to negligence on the part of the employer.  Penalties for noncompliance would be capped at $10,000 per infringement.

Arkansas has enacted the Youth hiring Act of 2023 that generally weakens protection for underage workers. Those under 16 years of age no longer require permission from the State Department of Labor following certification of age, parental permission and a description of intended work. Relaxation of oversight could lead to exploitation and trafficking.

The proposed child labor bills have engendered criticism and opposition from parent groups and predictably unions.

If Charles Dickens were still alive he would be able to write on the consequences of recent child labor bills.

According to a March 7^th posting by James Brugges on Inside Climate News, PureCycle Technologies has informed the U.S. Security and Exchange Commission (SEC) that the Annual Report for 2022 will be delayed.  The company is potentially in default on revenue bonds amounting to $250 million issued by public agencies to finance their recycling plant.

The completion of the facility scheduled for December 1^st, 2022, has been delayed. If completed and functional, the plant should eventually be able to recycle polypropylene applying a process developed by Procter & Gamble.

PureCycle intends to operate the initial plant in Ironton, OH. and then to expand operations to South Korea.

Construction of a plant within budget and on schedule is only part of the success for a recycling operation.  It is hoped that PureCycle has established a supply chain extending through collection, consolidation and transport to ensure a sufficient quantity of discarded plastic containers to allow viability of the proposed plant that will market post-user recycled plastic.

As the current debate proceeds in the U. S. concerning proposed “Made in the USA” or “Product of the USA” labels to be applied to animals or poultry born or hatched and then reared and processed in the U.S., other nations are experiencing similar concerns.  According to a posting in Just Food by journalist Dean Best, the U. K. National Food Crime Unit is investigating allegations of mislabeling.  A grocery chain was advised by the National Food Crime Unit that it was under investigation for selling pre-packed sliced meat sourced from South America as a “Product of Britain”.

A spokesperson for the Agency notified the retailer after an investigation and all product was removed from shelves, based on the evidence presented.  The retail chain in question is cooperating with the National Food Crime Unit and regards the incident as an unintentional food fraud without food safety implications.

The incident in the U. K. raises the question of how the proposed U. S. label will be enforced with respect to beef.  There is no concern over chicken, given that 99 percent of both whole birds and parts labeled “hatched, reared and processed in the U. S.” with obvious supporting documentation and confirmation of source.

Whether the proposed label will become a reality is now in doubt, given the response of Canada. Our USMCA partner correctly recognizes the interconnectivity between U.S. and Canadian production.   Canada has advised that it will oppose the label considered to be contrary to the USMCA.  Mandatory country of origin labeling (COOL) was ruled contrary to the World Trade Organization rules and was withdrawn with the U.S. paying a tariff penalty following an adverse ruling by a WTO Dispute Panel.

On Tuesday, March 28^th, Paul Kruse, former CEO of Blue Bell Creamery, will plead guilty to a food safety misdemeanor.  It is understood that the Court will impose a fine of $100,000.  An August 2022 trial of United States v. Paul Kruse ended in a hung jury (10 to 2) with the Department of Justice readying for retrial.

The charge relates to outbreaks of listeriosis acquired from contaminated Blue Bell ice cream. The charge, to which Kruse will plead guilty, included “introduction and delivery into interstate commerce, ice cream that was adulterated, rendering the product injurious to health”.

According to court testimony in the 2022 trial, Paul Kruse in his capacity of CEO was aware of contamination in Blue Bell production facilities and failed to take appropriate action to resolve the problem to avoid illness among consumers.  The Centers for Disease Control and Prevention conducted a retrospective investigation linking Blue Bell Creamery plants to sporadic Listeria outbreaks extending from 2010 to 2015.

Admittedly, the fraud committed by the Parnell brothers, responsible for extensive outbreaks of salmonellosis through shipping contaminated products from their Peanut Corporation of America plant, was far more egregious and resulted in extended prison terms for the owners of the enterprise.  Kruse can consider himself fortunate that although he is now a slightly less rich individual responsible for the loss of his family enterprise, he is free to live the rest of his life in retirement, unlike those who died from listeriosis.

The Black Sea Grain Initiative to allow Ukraine to export agricultural commodities from Black Sea ports negotiated in July 2022 will hopefully be extended after the March 18^th expiration by an additional 60 days.

The United Nations and Turkey are, once again, involved in discussions.

Russia through Deputy Foreign Minister Alexander Grushko, is bargaining for the lifting of restrictions on specified products including fertilizer.  Sanctions are obviously impacting the economy of the Russian Federation.

Continuing the shipment of wheat, corn, oil seeds and vegetable oils from Ukraine will restore balance between world supply and demand and ultimately depress prices for U. S. commodities.  This will especially be the case if major importers including China reduce orders and if Brazil and Argentine have sufficient surplus from a bountiful season to supply markets in Asia and Africa.

In an March 9^th release, BJ’s Wholesale Club Holdings (BJ) announced fourth quarter and FY 2022 results for the period ending January 28^th 2023.  The company posted net income of $129.8 million on total revenue of $4,930 million with an EPS of $0.95  Comparable values for the fourth quarter of FY 2021 were net income of $107.6 million on revenue of $4,358 million with an EPS $0.78. During the  fourth quarter BJ’s attained a gross margin of 18.3 percent (18.3 percent in Q4 FY 2021) and an operating margin of 4.2 percent (3.6 percent Q4 FY 2021). For the fourth quarter, comparable club sales, excluding fuel, increased by 8.7 percent. Digital sales increased by 22 percent.

For FY 2022 net income was $513.2 million on revenue of $19,315 million with an EPS of $3.76. During the fourth quarter of FY 2021 net income was $426.7 million on revenue of $16,667 million with an EPS of $3.09.

In commenting on results, Bob Eddy, president and CEO stated, 2022 was a record year, having surpassed $1 billion in Adjusted EBITDA for the first time in the Company’s history,” Eddy, added “Our membership base is stronger than ever with our tenured renewal rate reaching an all-time high of 90 percent. Our continued focus on value has driven traffic and market share gains all year. Our digital business is growing and we’re successfully expanding our footprint. The investments we continue to make in our Company position us well for long-term growth and sustainable value creation.”

Guidance for FY 2023 included a 4 to 5 percent increase in comparable store sales; a 40 basis point improvement in gross margin but with a flat EPS. BJ’s will spend $450 million on capital expenditure.

Effective Janury 28^th 2023, BJ’s posted total assets of $6,350 million including $1,124 goodwill and intangibles and carried long-term debt and lease obligations of $2,701 million.  BJ’s had a market capitalization of $9,900 million on March 14^th. The share has traded over the past 52 weeks from $51.45 to $80.41 with a 50-day moving average of $71.61.  BJ’s closed at $74.34 on Wednesday 8^th March, pre-release, opening on Thursday 9^th March at $78.48.  BJ’s trades with a forward P/E of 19.7.  For the trailing-12 months the company posted an operating margin of 3.8 percent and a profit margin of 2.7 percent.  The company returned 7.7 percent on assets and 60.7 percent on equity over the past twelve months.

BJ’s has contracted with Simbe Inc. to deploy Tally robots with a complementary integrated inventory control system in all stores.

The company operates 237 warehouse stores with 165 fuel centers in 18 states.

According to press reports, Chick-fil-A is developing a long-term plan to expand into Europe and Asia.  The Chick-fil-A brand has apparently benefited from increased sales reported to have quadrupled over ten years, although the family-held company does not release sales or financial data.

Chick-fil-A operates eight stores in Canada but has little experience in overseas international markets. An initial entry to the U.K with a trial location in university city, Reading, Berks. was a disaster and the location was forced to close after three months. Any foray into either Europe or Asia would compete directly with established chains including Yum Brands’ KFC, Burger King and McDonald’s Corporation. Expansion into Asia would even be more complicated and would require a substantial partner in each nation selected.

According to Technomic, Chick-fil-A has expanded to approximately 3,000 U. S locations with sales per unit far in excess of competitors’ locations.

Under the leadership of Andrew Cathy, CEO and third-generation executive, it is possible that Chick-fil-A could develop an appropriate culture conducive to international operation and attract managers with relevant experience.  The question arises as to whether Chick-fil-A has sufficient flexibility to adapt to different business models and consumer tastes in markets to which they aspire.

According to a March 14^th posting on ProMED Mail, the Government of India reported an outbreak of H5N1 Highly Pathogenic Avian Influenza on a state poultry farm in Jharkhand.  It is considered interesting that the although the outbreak commenced on February 2^nd, it was confirmed only two weeks later on February 17^th  and was reported to the WOAH on March 9^th.

Previous cases of HPAI in commercial flocks caused by H5N1 and H5N2 were reported India during 2021 and 2022. Extensive losses in migratory cranes and in domestic wild birds were reported in 2022.

The outbreak may have implications for export of shell eggs to the Middle East but should not affect shipments of pasteurized egg products and dried eggs that would be free of virus following heat treatment. 

The presence of H5N1 in commercial poultry in India is generally underreported, being deliberately or unintentionally misdiagnosed as Newcastle disease.  Given the high level of vaccination against Newcastle disease applied to commercial flocks, any significant elevation in mortality accompanied by cessation of egg production should be regarded as HPAI unless appropriate laboratory diagnostic procedures, including PCR, eliminate this most probable diagnosis.

The U. S. Environmental Protection Agency (EPA) has proposed a national drinking water standard covering six per-polyfluoroalkyl compounds generally referred to as PFAS (“forever chemicals”).  The proposal would require regulation of two of the chemicals in the group to four parts per trillion with a limit over the mix of four others in the group. In 2016, based on available information at the time, the recommended PFAS concentration in drinking water was set at 70 parts per trillion. Operators of water systems will be required to determine levels and take corrective measures to reduce contamination.

This action follows emerging evidence that PFAS compounds are deleterious to health and that imposing stricter upper limits would eliminate health hazards. Accumulation of PFAS in liver and kidney tissues can predispose to cancer, obesity, elevated blood cholesterol and decreased fertility.

Since 1940, PFAS compounds have been incorporated in water repellant clothing, furniture, carpets, non-stick pans, paints, cosmetics and fire-fighting foam.  Two of the most toxic compounds were phased out of production a decade ago, according to the American Chemistry.  Council.  Predictably, this industry questions the scientific justification used by the EPA to set levels.

Currently ten U. S. states in the Northeast and in Michigan and Wisconsin have limits on PFAS in drinking water.  Despite reduced use of these compounds, their persistence in the environment, including soil and water, will represent a problem for centuries to come.

The EPA proposal will be subject to public comment and if adopted, public water systems will have three years from the date of the regulation to comply. There will be considerable expense to comply with the proposed standard. Extesive litigation is expected that will delay resolution of an accepted level.

The February Consumer Price Index (CPI) attained 6.0 percent compared to February 2022 and was down from the January value of 6.4 percent.  This was the eighth consecutive month of lower inflation.  For February, the CPI increased 0.4 percent compared to the corresponding month in 2021 and conformed to consensus estimates.  The January CPI was 0.5 percent higher than in January 2022. Core CPI excluding energy and food prices attained 5.5 percent year-over-year and 0.5 percent for February.

The inflation rate for Food was 9.5 percent with the food-at-home category reflecting grocery prices, up 10.2 percent year-over-year.  In contrast, inflation in the Services category was up by 0.8 percent in February and 8.1 percent year-over-year.

The lower inflation figures corresponding to estimates, will be considered by the U. S. Federal Reserve Open Markets Committee that will decide on whether to increase rates at the March meeting and if so to select a level ranging from 25 to 50 basis points.  Apart from the CPI and other data, two recent bank failures will influence the Committee decision with a consensus of a pause or an increase of only 25 basis points.    

The February Department of Labor jobs report indicated 311,000 additional positions added during the month including workers in the hospitality and restaurant sector.  The Bureau of Labor Statistics reported 70,000 new jobs for bars and restaurants and 14,000 in accommodation.

For January, 99,000 additional positions in food and drink establishments were added with 15,000 in accommodation. In contrast, technology and retail sectors recorded fewer positions.

Leisure and accommodation are still approximately 400,000 positions down from the beginning of 2020, pre-COVID representing a loss of three percent of the previous workforce.

A National Restaurant Association survey revealed that 90 percent of restaurant operators are facing challenges in recruitment and retention with two-thirds of the respondents operating at 10 percent below acceptable levels of employment.  It is projected that 15.5 million will be employed in the restaurant industry by the end of 2023 compared to 12.2 million in December 2020, reflecting layoffs and restaurant closures during the COVID pandemic. Many employees in leisure and entertainment found new positions outside the industry during and after COVID restrictions, necessitating recruitment and hiring of new entrants to the sector.

According to a posting by Mark Hamstra in Supermarket News on March 13^th, total digital grocery sales attained $128 billion in 2021.  Data was assembled by Incisiv with an expectation that sales might attain $150 billion in 2023.

During the past year, 14 percent of grocery sales were through a digital channel expanding to an anticipated 15 percent in the current year.  It is estimated that the proportion of grocery shoppers using digital channels will increase from 63 percent in 2022 to 87 percent in 2023. 

Although convenient for shoppers, digital sales incur incremental expenses that reduce margins for chains.  Grocery pickup is the least costly for retailers but incurs additional labor to select and assemble orders and to deliver packages to customers.  Third-party service has declined sharply from 31 percent of sales in January of 2022 to 19 percent in December of that year.

EGG-NEWS

This special edition of EGG-NEWS is circulated following the belated release by APHIS of an epidemiologic report on the 2022 HPAI epornitic. The Report  is both unsatisfying in scientific content and devoid of practical recommendations to prevent infection of commercial poultry farms and complexes. Failure of APHIS to adopt a proactive approach to HPAI since the U.S. 2015 epornitic and the progress of the H5N1 strain in Europe, Asia and Africa since 2021 is evident  in the Report. The Commentary below evaluates the backdated report and identifies deficiencies in conceptual planning and abrogation of responsibility by administrators of the USDA-APHIS

For many months, EGG-WEEK has urged the USDA-APHIS to release an evaluation of epidemiologic questionnaires prepared following outbreaks of HPAI that commenced in February 2022. During the first week of March 2023, the USDA released a backdated report entitled, Epidemiologic and Other Analyses of HPAI Affected Poultry Flocks, July 2022, Interim Report. 

At the outset USDA-APHIS Administrators should explain why an obviously incomplete, uncoordinated and fragmented report dealing with the data collected through May 2022 and involving various related epidemiologic studies, was released only at the beginning of March 2023.

EGG-NEWS and industry associations have urged USDA-APHIS to release preliminary guidance on preventive measures based on an analysis of the epidemiologic investigations they conducted. The industry required recommendations based on completion of phylogenetic analysis and field studies including case-control comparisons. These were necessary to establish relative risk factors relating to infection among the initial twelve large egg-production complexes that were infected. These farms required depopulation of 24.8 million hens with diagnoses extending from February 22^nd through April 25^th and spread over seven states incorporating the Atlantic (DE, MD, PA); Mississippi, (IA, WI, NE) and Central, (UT), Flyways. A report by mid-2022 was not an unrealistic request. An initial interim report by July 2022 would have been more valuable than the anticipated comprehensive document scheduled for mid-2023 or later. 

The most recent APHIS Report deals with the Spring wave of infection extending through May 31^st.  Information relating to the modes of transmission of HPAI and possible deficiencies in biosecurity would have been valuable in potentially preventing subsequent cases. Large egg complexes in Nebraska and Colorado involving 5.0 million hens were infected through mid-2022.  The Fall wave involved depopulation of an additional 14.2 million hens in ten large complexes in six states extending from September through December 2022

In the event, the belated USDA-APHIS Report simply catalogued the epornitic involving cases in 35 states affecting 130 turkey farms, 55 chicken complexes, 11 duck production units and 137 backyard flocks through the end of May 2022. Total losses to date amount to approximately 44 million egg production hens, of which 95 percent were affected on 22 large complexes each holding from 0.5 million to 5.0 million hens; 9.8 million turkeys on 229 farms in seven states and 3.2 million broilers on 18 farms in seven states with 0.3 million broiler parents on 11 farms in six states. The simple listing of cases by species failed to differentiate among “chicken” cases involving a range of diverse production types and systems.

In reviewing the report, including the “Initial Contact EPI Report Form”, there is not a single fact that is not generally known by poultry health professionals.  There are no constructive recommendations that can be applied by a table egg producer to reduce the probability of introducing HPAI onto a complex.

The take-away messages from the report include:-

• Highly Pathogenic Avian Influenza virus strain H5N1 clade 2.3.4.4b, expressing Eurasian genes was introduced to the U.S. as a single major introduction via the trans-Atlantic route. It is presumed but not stated in the report that diverse migratory bird species transported the virus by inter- and intra-species contact successively westward from northern Europe through Iceland, Greenland and then to Labrador with subsequent transit of the Atlantic flyway southward to Florida.
• The virus responsible for the 2022 cases and the ongoing epornitic differed from the 2015 H5N1 strain characterized as clade 2.3.4.4c.
• Of individual outbreaks investigated, 84 percent were associated with wild bird introductions based on phylogenetic analysis, an original and valuable component of the Report. This finding indicates the possibility that obvious deficiencies in biosecurity as disclosed in the 2015 U.S. epornitic were not primarily responsible for introduction of HPAI onto large in-line complexes in 2022. This presumption is based on the intensive application of structural and operational biosecurity since 2015. Required case control studies on selected in-line egg production complexes were not performed in 2022 depriving producers of counsel concerning risk factors. The Initial Contact EPI Report forms were reproductions of those used for turkey farms during the 2015 epornitic. This one-size-fits-all approach failed to consider specific routes of infection relevant to high capacity complexes essential to have identified pertinent risk factors. The questionnaires excluded metrological data preceding outbreaks that may have indicated aerogenous transmission.
• In contrast to the 2015 epornitic, more backyard farms were infected in 2022 suggesting widespread dissemination of virus by migratory birds and possible infection of domestic bird species and small mammals.
• Backyard flocks that were infected, effectively served as sentinels and were not associated with lateral transmission of HPAI to commercial farms.
• Incubation periods extending from introduction of infection to confirmation of a diagnosis were quantified denoting differences among species. This was not of direct benefit to preventing infection but could be valuable information for additional epidemiologic investigations.

It is evident that field sampling of free-living birds concentrated on migratory anseriforms.  Sampling of relatively low number of birds other than waterfowl was based on the availability of clinically affected and dead free-living birds submitted to diagnostic laboratories. Raptors were in all probability infected by predation or consumption of dead anseriforms.  Structured field survey of passeriformes and other families that may have been involved in dissemination of H5N1 virus were apparently not conducted since there is little mention of this aspect in the report.  Although the APHIS document makes mention of infection in mammalian species, this aspect of the epidemiology of HPAI was not subjected to any structured evaluation.

The section on risk factors merely listed a series of events prior to the recognition of outbreaks.  There was no attempt to determine the relative risk associated with specific activities for the large egg-production complexes that represented the bulk of losses and expediture. The Report is abysmally deficient in its failure to differentiate among commercial operations that were affected.  It is obvious that risk factors relating to contract turkey-growing farms in the Dakotas are vastly different to the structural and operational factors that may predispose to infection in-line egg production complexes with over a million hens in Iowa or Colorado. For example, 53 of the 88 responses noted feed delivery within 21-days prior to detection. Why did 35 farms apparently not receive feed for 21 days? Large complexes are essentially self-sufficient with respect to feed with on-site mills. Did these units represent the non-recipients of delivered feed? Combining available data into a table that listed 46 activities was effectively a meaningless exercise. How possibly could a list of proportions be of any value in assessing risk for widely different poultry enterprises and specifically address the need to develop appropriate preventive measures?

Concentration on the first twelve large egg production complexes and the first twelve turkey growing farms, applying a case-control approach would have been productive.  This would have required more specific and relevant Initial Contact EPI Report forms allowing the collection of data to be subjected to subsequent statistical analysis. A one-size-fits-all EPI Report questionnaire represents an oversimplification and denotes a lack of familiarity with the operations under investigation. An approach that neglects differentiation of types of poultry operation predicates failure to identify applicable risk factors.

Poultry health professionals are aware of outbreaks in farms with superlative structural and operational biosecurity.  There is a gathering presumption based on informed anecdotal reports and observations that HPAI may have been introduced into large egg production complexes by the aerogenous route. This especially the case in Weld County, CO. and Buena Vista County IA. Newcastle disease most certainly can be transmitted over at least a mile as demonstrated in the Essex 1972 outbreaks in the U.K.  Accepting that the infection can be acquired from the local environment including introduction on dust and soil entrained by high winds appears to be beyond the current perception of APHIS and contrary to their playbook. From the onset of the initial outbreaks, APHIS should have investigated the probability of aerogenous transmission. 

The report does not address the possibility of infection of passeriform birds and their potential role in disseminating virus.  The possible involvement of both domestic birds and aerogenous infection were raised during the 2015 epornitic and APHIS should have been prepared to evaluate these routes of infection from March 2022 onwards.

The modeling of avian influenza transmission and the analysis of eBird and BirdCast migration data are interesting but heuristically academic. There are neither conclusions nor recommendations advanced in the report arising from these studies that could be applied to reduce the probability of infecting commercial flocks. It is self-evident that the risk of infection in commercial and backyard farms relates to the quantum of migratory waterfowl that are shedding virus. What is required is an indication of the mechanisms by which virus passes from wild birds to farms in order to implement preventive action.

As a practicing poultry health professional, this commentator is deeply disappointed in the inability of APHIS to plan and execute a series of relevant epidemiologic studies of an infection attaining catastrophic proportions. The 2022 epornitic has cost the public and private sectors in excess of $2 billion to date without achieving control and with eradication an unattainable aspiration.  Based on the consumption of 288 eggs per capita and a price differential due to HPAI of $2 per dozen, the incremental cost to consumers for table eggs and liquids was close to $15 billion during 2022.  The magnitude of losses associated with HPAI should be reflected in a commensurate effort to understand the epidemiology of the infection and develop appropriate, preventive measures. Little appears to have been achieved in this respect since 2015.

What is not included in the backdated report is the reality that HPAI is now seasonally and regionally endemic in the U.S.  Recognition that the infection may be transmitted by the aerogenous route negates a great deal of the accepted structural and operational biosecurity procedures promoted by APHIS and exercised by most segments of the poultry industry with varying efficiency. The 2022 epornitic highlights the vulnerability relating to conceptual biosecurity. Large egg-production complexes with two to six million hens are concentrated in areas along flyways that attract migratory waterfowl. The heightened risk has now become evident as migratory birds are disseminating a novel strain of avian influenza virus of extreme pathogenicity and wide species infectivity. Given these realities limited application of effective vaccines should be considered and evaluated for long-lived breeding and egg-production flocks at risk by virtue of location or probability of infection.  

The APHIS Report confirms an obvious lack of involvement and deficiencies in conceptual planning and imagination by APHIS administrators. It is evident that they have concentrated on reacting to HPAI requiring rapid diagnosis followed by depopulation and disposal, both essential activities. Reading into the report suggests failures in proactive activities including motivation of USDA scientists, providing funding for molecular and field epidemiologic studies and cooperation with academia and industry. Basically APHIS has failed the U.S. poultry industry by neglecting to address the critical questions of what risk factors are contributing to infection of diverse commercial operations and what practical cost-effective and appropriate measures can be applied to reduce the probability of exposure of flocks.

The virus has changed, the epidemiology has changed but APHIS has not adapted to realities.  The Agency is slavishly following a pre-1984 approach that would probably have been effective in stamping out an exotic infection in a limited area introduced by a single illegal importation of a contaminated product.  Circumstances change but administrative mindsets are refractory to realities that are discordant with their established doctrine. 

The backdated July 2022 Interim Report apparently rapidly assembled in response to industry pressure reflects an inability by APHIS to appreciate the magnitude of the 2022 (and ongoing) HPAI epornitic and its impact on the poultry industry and consumers. It is questioned as to what planning and forward thinking emerged from the 2015 epornitic? Obviously APHIS is just better at diagnosing outbreaks due to advances in PCR technology and more efficient in depopulating farms and disposing of dead birds. As an industry we deserve better!

As with all editorials USDA-APHIS Administrators, poultry health colleagues and producers are welcome to respond. Constructive responses and suggestions will be posted for the benefit of subscribers.

Independent international manufacturer and distributor of natural animal feed additives, Anpario plc, recently conducted a meta-analysis study on their oregano essential oil (OEO) additive, Orego-Stim. Collating results from layer trials conducted across the globe over a seven-year period, the results show than Orego-Stim consistently supports layer performance with more saleable eggs, as well as an improved feed efficiency and liveability.

Highlights from the analysis include an average of 8 extra eggs per hen and a 2 percent average improvement in layer liveability. As a result of the economic gain, associated with greater production and improved bird health, producers benefitted from a profitable average return on investment (ROI), with a potential ROI of 6:1.

Hens fed Orego-Stim showed consistent evidence of greater egg production, including improved persistency of lay and higher peak production, irrespective of geography, management systems or breed. In addition, hens demonstrated a clear improvement in feed efficiency when supplemented with Orego-Stim, with 11 percent less feed required on average for each egg produced. For 100,000 hens with an average feed consumption of 100g/head/day (22 lb/100 hens per day) for 62 weeks, this could equate to feed savings of 478MT.

Laura Corbett, Anpario’s Poultry Product Manager, commented, “These impressive feed efficiency results could result in truckloads of savings for layer producers. Supplementation of natural phytogenics, such as those developed from oregano essential oil (OEO), are a sustainable tool for success, and 100 percent natural OEO provides a multitude of well-documented properties and benefits. These include antimicrobial, anti-inflammatory, immunomodulatory and antioxidant functions, all of which have a role in supporting optimal gut health, layer performance and quality egg production.”

“It’s exciting to see the results from all these trials come together, as it demonstrates the consistency of Orego-Stim across different countries, systems and breeds. Consistent results come from consistent ingredients and Orego-Stim is a prime example of this. Developed from a unique oregano species, with frequent quality control checks from crop harvest to finished product production, high quality is guaranteed batch after batch, which is vital for producers to ensure superior product performance every time”, concludes Laura Corbett.

For more information on Anpario’s 100% natural oregano essential oil product, Orego-Stim, please visit www.anpario.com/orego-stim.