Editorial


Impact of Covid-19 - Now and in the Future

Momentous events have a way of changing perceptions and altering personal and business routines and activities. The unprecedented demand for eggs is a case in point. Over the past three weeks, national egg inventory has declined successively over a range of 9.7 to 12.6 percent, reducing stock in some cases to the bare floors of coolers. Demand has risen by 40 percent and Midwest wholesale prices have vaulted by over 150 percent.

 

Consumers are depleting supermarkets shelves with their transition to an “eat-at-home” lifestyle. Supermarkets are pressured to replenish tray-pack chicken, eggs, shelf-stable milk substitutes, paper goods, and toiletries. Demand for eggs has transcended all categories, although some price sensitivity is evidenced by the fact that “pasture reared” and similar products, priced upwards of $6 per dozen remain unsold. Nationally-branded specialty eggs, house brands and generics are whisked off shelves to consumers’ refrigerators throughout the nation. In accordance with the laws of supply and demand, price has risen in response to availability with an average national price now exceeding the three year average, following a very depressed 2019.

 

There are a number of observations and lessons from the increased demand for eggs since the advent of COVID-19:

  • The distribution system from packing plants through to supermarket shelves cannot respond adequately to surges in demand. Out-of-stock represents a lost sale and in turn revenue to a retailer and ultimately a reduction in the potential increase in per capita consumption.
  • In visiting supermarkets over the past few weeks, it is evident that stores receiving direct delivery are more able to keep shelves stocked. In contrast, there appears to be a delay interposed by distribution centers that have not reacted to the surge.
  • As with manufacturing industries, the obvious risks and costs associated with “just-in-time” management are becoming apparent. What works under an optimal situation has proven to be inefficient when challenged by increased demand.
  • Retailers will have to maintain more stock and motivate their deli personnel to transfer eggs from coolers to shelves as necessitated by volume of sales.
  • More frequent deliveries from DCs to stores are obviously necessary with an emphasis on critical items. This may result in a deterioration in cost per ton-mile, but may well be justified in terms of enhanced store revenue and consumer satisfaction. Evidently, chains must become more flexible with regard to sourcing supplementary deliveries direct from packers, especially if they are unable to receive deliveries through company DCs.

 

A situation such as Covid-19, which has resulted in a profound shift in dining from QSRs and restaurants to the home, has highlighted the versatility of eggs. Not only due to the reality that most consumers can cook an egg, be it boiled, fried, or scrambled, consumers have now extended from breakfast to lunches and even dinners. A stay-at-home lifestyle mandated by COVID-19 restrictions is probably bringing more families together to eat and the industry should experience an increase in demand after the present crisis is resolved. Publicity generated by the American Egg Board emphasizing eggs as a source of protein and other nutrients and their excellent use of social media to promote diversity of meals that can be prepared with eggs should reinforce an obvious consumer trend.

 

Since shopping at large supermarkets may be regarded as a risk of acquiring COVID-19, smaller stores including Dollar and convenience units are now regarded as locations to buy eggs, milk, bread, and other necessities. This trend may persist when normal conditions return. Accordingly, distributors involved in restocking these stores may play an important role in maintaining an anticipated increase in egg consumption.

 

Pack size may well be influenced by demand, favoring 18 and 24-egg presentations. Fewer visits to supermarkets require larger packs to maintain volume of sales. More eggs in the refrigerator will probably translate to greater consumption.

 

The final lesson relates to willingness to pay. It is possible that this episode of high demand and concurrent escalation in price will create a greater appreciation of the value of eggs and an inclination to pay for their inherent nutrients. Not only are we retraining a cohort of consumers, but we may in fact be recalibrating chain buyers who are essentially the arbiters of price.

 

There are probably many lessons to be learned from the current situation, as stressful and unfortunate as it may be. Again, EGG-NEWS stresses the need for a professional study on egg pricing under unusual marketing conditions. Previously, it was suggested that the AEB fund studies by agricultural economists to examine price and supply relationships in the shell egg and liquid masrkets and their interaction during and following the 2015 avian influenza epornitic. The COVID-19 demand is yet another opportunity for the industry to take advantage of market perturbation to learn more about how demand and supply influence price in the short and intermediate term. This will allow more rational decisions on allocation of capital for expansion and cage-free transition, flock placement and marketing programs to capitalize from both normal and abnormal situations.


 

Egg Industry News


Statement on COVID-19

The EGG-NEWS team extends to our Sponsors and Subscribers peace of mind, security and freedom from COVID-19 infection at this difficult time. We wish a speedy and uncomplicated recovery to all who have contracted the SARS-CoV-2 virus.

 

We acknowledge the selfless contribution of first responders, hospital staff, researchers and field epidemiologic personnel involved in treating patients under difficult circumstances, administering diagnostic tests, evaluating vaccines and therapeutic compounds and performing logistic functions.

 

We look forward to a resolution of the pandemic 

 

Barbara and Simon


 

COMMODITY REPORT: March 20th 2020.

Corn futures for May declined 16.1 percent this past week compared with the quotation on March 13th. Soybeans increased by 2.1 percent comparing the March 13th quotation for current month delivery with the March 20th value for May. Anticipated increases in price have not occurred after signing the Phase-One trade agreement with China and ratification of the USMCA. Prospects for commodity exports to China are currently restrained by the logistic restrictions imposed by the ongoing COVID-19 outbreak.

 

Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S - China Phase-One agreement signed in mid-January incorporating U.S. tariff rescissions, promised purchases of agricultural commodities, concessions on some structural issues by China and strengthened enforcement provisions
  • The market is now less optimistic that future shipments of soybeans to China will take place according to the quantities promised by the Administration after signing the Phase-One agreement. Total soybean shipments YTD have amounted to 1.13 million tons, (41.5 million bushels), approximately 22 percent of the quantity consigned during the corresponding period in 2019.
  • Justifiable uncertainty regarding the spread of COVID-19 to other Asian nations, Europe and North America with the potential to create a worldwide recession.

 

Questions still exist:-

  • Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019 and planting intentions for 2020. The volume of exports of soybeans to China is still uncertain.
  • Brexit is now a reality following legal departure of the U.K. from the E.U. on January 31st 2020 and a final customs break scheduled at the end of January 2021.
  • A U.S. trade agreement with the U.K. should be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation. A bilateral agreement appears in jeopardy over disagreements over the use of Huawei communications equipment by the U.K. and chlorination used in processing of U.S. chicken.
  • The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.

Compared with the March 13th 2020 close, the CME quotation for May corn posted near close of trading on March 20th was down 30 cents per bushel to 343 cents, continuing the trend in losses. May soybeans, expected to be the beneficiary of the Phase-One agreement, were up 17 cents per bushel to 863 cents.

 

For consecutive 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.

 

China placed orders for one million metric tons of soybeans from Brazil during the first week of February 2020. A total of 20.5 million metric tons has been ordered for delivery through May 2020. This quantity is equivalent to 754 million bushels or 42 percent of the projected total U.S. export of soybeans in 2020 as documented in the March 2020 WASDE #598. The purchases by China from Brazil are ascribed to competitive prices compared to the U.S. The USDA recorded exports of previously- ordered consignments amounting to132,000 tons (two shiploads) of U.S. soybeans during the week ending February 27th.

 

The following extracts from the January 10th 2020 edition of the USDA Grain Stocks Report indicate the levels of storage on farms and in fields and off-farm for corn and soybeans in early December 2019.

  • Corn stored in all positions on December 1, 2019 totaled 11.4 billion bushels, down five percent from December 1 st 2018. Of the total stocks, 7.18 billion bushels are stored on farms, down four percent from a year earlier. Off-farm stocks, at 4.21 billion bushels, are down six percent from a year ago. The September through November 2019 data indicated disappearance at 4.52 billion bushels, compared with 4.54 billion bushels during the same period last year.
  • Soybeans stored in all positions on December 1 st 2019 totaled 3.25 billion bushels, down 13 percent from December 1st 2018. Soybean stocks stored on farms totaled 1.53 billion bushels, down 21 percent from a year ago. Off-farm stocks, at 1.73 billion bushels, are down five percent from December 2018. Indicated disappearance for September through November 2019 totaled 1.22 billion bushels, up eight percent from the same period a year earlier.

The following quotations for May were posted by the CME near close of trading on March 120th 2020 compared with values for March 13 th 2020 (in parentheses) reflecting specified months for delivery.

COMMODITY

 

Corn (cents per bushel)

May 343 (373 March)

July 349 (366 May)

Soybeans (cents per bushel)

May 863 (846 March)

July 866 (848 May)

Soybean meal ($ per ton)

May 323 (299 March)

July 313 (300 May)

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

 

COMMODITY CHANGE FROM PAST WEEK

Corn: May quotation down 30 cents per bushel from March     (-16.1 percent)

Soybeans: May quotation up 17 cents per Bushel from March  (+2.1 percent)

Soybean Meal: May quotation up $24 per ton from March        (+8.0 percent)

  • For each 10 cent per bushel change in corn:-
    • The cost of egg production would change by 0.45 cent per dozen
    • The cost of broiler production would change by 0.25 cent per pound live weight
  • For each $10 per ton change in the price of soybean meal:-
    • The cost of egg production would change by 0.44 cent per dozen
    • The cost of broiler production would change by 0.25 cent per pound live weight

 

COMMENTS

The USDA Farm Futures Survey of 728 respondents suggests that 97.3 million acres of corn and 80.6 million acres of soybeans will be planted in 2020.

 

Subscribers are referred to the March 11th WASDE #598 under the STATISTICS tab.

 

Prices of commodities are influenced by projections of ending stocks from the 2019 harvest, 2020 exports and domestic use.

 

USDA Chief Economist Robert Johansen speaking at the 96th Agricultural Outlook Forum indicated that U.S. agricultural commodities to the value of $14 billion would be imported by China in 2020, far short of the $40 to $50 billion per year promised by the White House in terms of the Phase-One Agreement. In the light of decreased demand in China due to COVID-19, purchases from Brazil and port congestion, now easing, the volumes suggested by Dr. Johansen may be optimistic.

 

During 2018 and 2019 a total of $28 billion was disbursed to the agricultural sector in Market Facilitation Program (MFP) payments. Additional requests are being made by industry groups for 2020 MFP relief and these may be justified by delayed or possibly lower imports by China. President Donald Trump stated that the Federal Government would “provide additional aid to U.S. farmers as needed until recently negotiated trade deals with China, Mexico, Canada and other countries fully kick in”. MFP payments would be funded by tariff revenue representing a transfer of money from consumers to the agricultural sector.


 

Egg Week

USDA Weekly Egg Price and Inventory Report, March 25th 2020.

  • The U.S. flock in production was 524.9 million .
  • Shell inventory down by 12.6 percent after two successive weekly declines reflecting unseasonal, COVID-19 driven demand and limited increase in flock size.
  • USDA Midwest benchmark generic prices for Extra large and Large were up by 53.5 percent on average to 225.5 and 223.5 cents per dozen respectively. Mediums were up 53.9 percent to an average of 187.0 cents per dozen. The market advanced this past week after two successive weekly declines in inventory responding to exceptional COVID-19 buying. This trend should persist at the current or a higher level until Easter unless demand falls off due to consumers satisfying heightened but transitory demand. This will be indicated by a rise in inventory.
  • Price of breaking stock in the Midwest was 4.5 percent higher to 69.0 cents per dozen on average. Checks were up 6.6 percent to 56.5 cents per dozen. Checks are still below the USDA February 2020 benchmark nest-run production cost of 60.4 cents per dozen.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on March 20 th 2020 the Midwest wholesale prices for Extra Large and Large as delivered to DCs were higher by 53.9 and 54.7 percent to averages of 225.5 and 223.5 cents per dozen respectively. Mediums were up 53.9 percent to 187.0 cents per dozen reflecting a restoration in balance among sizes as young flocks increase in age and heightened demand increased the value of this size. Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 60.4 cents per dozen in February 2020, (excluding provisions for packing and transport). The progression of prices during 2018-2020 is depicted in the USDA chart reflecting three years of data, updated weekly.


 

U.S. Power Generation Moves to Natural Gas

The U.S. Energy Information Administration (EIA) predicts that in 2020, natural gas used to generate electricity will increase by 4 percent to 1.53 trillion kilowatt hours compared to 2019.  In contrast coal-generation will decrease 16 percent and will average 0.8 trillion kilowatt hours. Attempts to prop up the coal industry by subsidies and other artificial measures fly in the face of economic reality.  Abundant natural gas is less expensive than coal and has fewer environmental impacts.

 

The EIA predict that U.S. oil production will average 13.0 million barrels per day in 2020 falling to 12.7 million barrels in 2021.  On March 9th crude oil price fell below $35 per barrel but with an annual forecast of $43 per barrel for Brent reflecting higher supply by OPEC during 2020.  This has implications for lower fuel and transport costs benefiting the industry.


 

Supermarket Chains Adapting Hours to the Realities of COVID-19

In addition to reducing total store hours to allow decontamination of stores and restocking of shelves, operators are now designating time periods to accommodate senior citizens.  The elderly are at higher risk of complications from COVID-19 and the concession to allow a dedicated period for those at risk will be beneficial in terms of both “flattening the curve” and reducing possible complications following infection.

 

Target has reserved the first hour of shopping on Wednesday at stores nationwide for vulnerable guests.  Local chains in Anaheim, CA, Los Angeles, CA, Houston, TX, Phoenix, AZ and Minneapolis, MN have all introduced programs mostly from 06H00 to 07H00 for senior citizens and those with predisposing health conditions to shop with greater security.

 


 

Sad State of Shelf Replenishment

If eggs are not on the shelf they can’t be sold. Producers are working hard to pack and deliver eggs to distribution centers and are expediting direct store delivery. It is up to the chains to place eggs on the shelf to satisfy high but transitory demand fueled by COVID-19 concerns.

 

Supermarkets have reduced operating hours and have presumably increased their staff complements for decontamination and re-stocking.  That last 50 yards from the dairy cold-room to the shelf is becoming more important. It would also help if at regular intervals, dairy personnel could clear away packs with leakers that have been picked over by consumers. 


Wednesday 18th Feb


Thursday 10th March

 

Sharp Fall in the Value of the Mexican Peso May Impact Exports

A precipitous decline in the value of oil and the advent of COVID-19 has resulted in a 30 percent devaluation of the Mexican peso compared to the U.S. dollar.  During the present week, the exchange rate is expected to attain 25 pesos to the U.S. $ with implications for pricing shell eggs and egg products.

 

In 2019 Mexico imported 27.1 million dozen shell-eggs valued at $19 million and 6,397 metric tons of egg products with a value of $13.8 billion. Although the U.S. now benefits from the USMCA tariff-free exports to Mexico will depend on the willingness of consumers to pay for relatively higher priced commodities from the U.S. in competition with alternative supplying nations.


 

UEP Establishes Database for COVID-19 Publications

In a practical measure to provide balanced and reliable information on COVID-19, United Egg Producers has established a website <unitedegg.com/covid-19-resources/>.  The website currently includes releases by the Centers for Disease Control and Prevention, contingency planning for human resources, guidance on critical infrastructure, work force and daily updates. 

 

In accordance with the Guidance on the Essential Critical Infrastructure Work Force, workers at human and animal food and feed sectors are considered part of the Essential Critical Infrastructure Work Force. 


Chad Gregory CEO of UEP

 

The database includes a March 19th memorandum under signature Jeff Hendricks, USDA-AMS National Supervisor-Shell Eggs, relating to in-person quarterly shell egg plant surveillance inspections.  Supervisors can now suspend physical visits to plants and allow the resident USDA graders to provide information relating to compliance.


 

Darden Restaurants: A Bellwether for the Casual Dining Sector

In a March 20th statement, Ricardo Cardenas, CFO of Darden Restaurants noted that same-store sales were down 60 percent following imposition of regulations aimed at reducing transmission of COVID-19.  Over half the 1,800 locations operated by the Company are now only  “to-go” and the remainder operate under mandated capacity or other restraints.

Cardenas noted that for the first week of the fourth quarter, same-restaurant sales were 3 percent above the corresponding week in fiscal 2018 followed by a static second week and a 21 percent decline during the third week for the fourth quarter.  All restaurants within the group were affected with Olive Garden down 19 percent, Longhorn Steakhouse down 16 percent and fine dining restaurants down 28 percent.

 

The management of Darden is developing contingency plans aimed at preserving the jobs of workers based on a strong balance sheet but their plan ultimately will require government assistance.

 

For the third quarter ending February 23rd, Darden posted net income of $232 million on sales of $2.4 billion with an EPS of $1.92.  Corresponding values for fiscal 2018 were net revenue of $224 million on sales of $2.3 billion with an EPS of $1.81.  Business segments during the quarter posed increases of 3.5 percent for Olive Garden to 8 percent for fine dining.


 

Deliveries to Supermarkets Will Satisfy Demand

Both government and industry commentators have confirmed that there is no shortage of food in the U.S.  Empty shelves are a result of unprecedented panic buying by consumers concerned over lockdowns caused by COVID-19.

 

Noel White, CEO of Tyson Foods, stated “Once we are able to replenish supplies, which is probably going to take another week or so, I think we will be back in better equilibrium between supply and demand.”  White pointed to “imbalances” affecting supermarkets as a result of significantly higher purchases of eggs, beef, pork, and poultry.

 

To a large extent, the demand for animal protein at the supermarket level has been balanced by decreased supply to the food-service sector with virtual shutdown of restaurants, university dining facilities, and QSRs without drive-through installations.

 

The chicken industry has been quick to respond, moving from restaurant packs to tray packs.  Adding additional shifts and, in the case of one company, changing product mix at plants previously dedicated to food service presentations.


 

Amazon to Bid for Fairway Market Stores

Supermarket News reported that Amazon will bid for four Fairway Market stores located in New York and New Jersey.

Amazon is experimenting with various supermarket formats incorporating high levels of technology including Just Walk Out installations as used in a prototype store in Seattle, WA.

Fairway stores filed for Chapter 12 bankruptcy and curators are disposing of assets in metropolitan areas of the North East.


 

GI-OVO Resumes Production of EggsCargo® System

After suspending production to prevent dissemination of COVID-19 infection, GI-OVO has announced resumption of production with effect on Monday, March 23rd.


 

Target to Spend $300 Millon on Personnel

According to an article in the Minneapolis Star Tribune on March 20th, Target will increase base pay by $2.00 per hour for 300,000 workers restocking shelves and assembling on-line orders.  Special previsions have been made for workers over 65 years old, those who are pregnant or have predisposing health risks.  Wage increases will last until May 2nd for full-time and part-time workers who currently receive a minimum wage of $13 per hour. 

Target will donate $10 million towards relief efforts for COVID-19 and CEO Brian Cornell will personally donate $1 million to a fund assisting victims of COVID-19.


 

Additional hiring by Dollar and Convenience Stores

Amid reports of layoffs due to COVID-19 infection, Dollar Tree has announced an intention to hire 25,000 full and part-time workers. Dollar Tree with subsidiary Family Dollar stores operates 15,000 locations and 24 distribution centers. Betty Click, Chief HR Officer stated, "during this unprecedented time our Company is seeking motivated individuals to support our stores and distribution centers as we provide essential products at great values to the communities we serve." 

Concurrently 7-Eleven will make 20, 000 new positions available to meet increased demand.  The CEO of 7-Eleven, Joe DePinto noted "this will provide job opportunities and ensure that     7-Eleven stores remain clean and in-stock with the goods our customers need during this critical time."  7-Eleven operates close to 12,000 stores in North America either under license or franchise.


 

Think Tank Urges Escalation in SNAP Benefits

The Center on Budget and Policy Priorities has suggested that increasing SNAP payments could provide benefits under anticipated conditions including widespread unemployment and disruption of the economy caused by COVID-19.

According to a study conducted by the Center in 2019, each $1expended in SNAP benefits generates $1.50 in gross domestic product.

The Center recommends a 15 percent increase in food stamps corresponding to $25 per person or $100 for a family of four each month.  Restrictions on eligibility should also be relaxed.

The recommendations by the Center are under consideration for inclusion in the relief economic package under negotiation. Chairman of the Senate Finance Committee, Sen. Chuck Grassley (R-IA) noted "these recommendations would blunt the impact for most Americans and limit the damage to the U.S. economy."

Previously during the great recession, SNAP benefits were increased by 17 percent, at that time amounting to $80 per month for a family of four.

The Coronavirus Relief Bill signed on Wednesday18th March includes additional funding for the WIC Nutrition Program and would suspend the 90-day limit on SNAP benefits.


 

Dean Foods Acquistion by Dairy Farmers of American Appears to be Unraveling

Following the declaration of Chapter 11 bankruptcy by Dean Foods Company, a cooperative, Dairy Farmers of American Inc. (DFA) offered to purchase assets and to continue operation of the company to the benefit of their shareholders.

 

In papers filed last week with the U.S. Bankruptcy Court in Houston, the parties agreed to terminate the original asset purchase agreement involving a transaction of $425 million covering 44 plants and installations.

 

Dean Foods has now requested a different bid procedure to maximize the value of assets for the benefit of creditors, but also to preserve markets that will ultimately benefit shareholders of DFA.

 

Anne Divjak, Vice President, Government Relations and External Communications for Dean Foods Company stated "we believe that by avoiding unnecessary litigation regarding procedures and bid protections for DFA, all parties involved including DFA will focus on developing competitive and value-maximizing bids."

 

Monica Massey, Executive Vice President and Chief of Staff for Dean Foods stated "DFA is re-evaluating our options given current circumstances, to bid.  We believe any bid we submit will benefit all dairy farmers as no one has greater interest in preserving milk markets then we do."


 

McDonald's Corporation Closing All Restaurants in the U.K. and Ireland

McDonald's Corporation announced that all stores were closed in the U.K. and Ireland on Monday, March 23rd consistent with Government policy.  In contrast, McDonald's has re-opened almost all restaurants in China as the incidence rate of COVID-19 has fallen sharply even in Wuhan the epicenter of infection.

 

In the U.S. and other nations, McDonald's and other QSRs are operating take out, drive-through and home delivery to maintain operations to retain employees and maintain cash flow.


 

Alltech to Host Webinar on Impacts of Mycotoxins

On Tuesday, March 31st., 2020, at 15H00 EDT., Dr. Max Hawkins, a member of the Alltech® Mycotoxin Management team, will host a webinar focused on the results of the 2019 Alltech Harvest Analysis, including a discussion on mycotoxin risks and their impact on monogastric and ruminant animals.

 

In 2019, the United States experienced excessive moisture during the growing season, resulting in increased mold growth, primarily Fusarium  producing a variety of mycotoxins.

 

 The 2019 Alltech Harvest Analysis of 219 corn samples from across the U.S. conducted by the Alltech 37+® laboratory, showed that the samples contained eight mycotoxins per sample, on average, with a range of 0–18. The number of mycotoxins present is crucial, as feeds that contain multiple mycotoxins pose a greater risk to livestock performance and health than feeds containing only one or two since there is synergy among mycotoxins.

 

Type B trichothecenes (DON) (at 90.9%) and emerging mycotoxins (at 96.3%) were the two most commonly occurring mycotoxin groups in all samples, while fusaric acid and zearalenone were present in 85 and and 55 percent of the samples respectively. The average values of the mycotoxins analyzed showed that DON (at 1,294 ppb) and zearalenone (at 156 ppb) were the major mycotoxins of concern. Maximum levels for type B trichothecenes (33,230 ppb), type A trichothecenes (162 ppb), zearalenone (2,894 ppb), fusaric acid (6,792 ppb), Penicillium (1,689 ppb) and fumonisin (19,614 ppb) all present a significant risk when fed to livestock and poultry.

 

 The risk of contaminated corn to poultry is higher for layers and immature flocks, while broilers generally face moderate risk.

 

The first half of the webinar will focus on ruminants, register via this link, starting at 3:00 p.m. EDT. The monogastric presentation will follow at 3:30 p.m. EDT, register via this link. For more information on mycotoxin management, visit knowmycotoxins.com


 

Dairy Industry Faces Losses as a Result of COVID-19

A prominent dairy industry analyst noted that dairy product sales in grocery stores soared during mid-March concurrently with eggs attributed to panic buying stimulated by fear of COVID-19.  Sales of fluid milk were up 32 percent, cheese 45 percent and yogurt up 29 percent compared to the corresponding week in 2019. 

 

Sales of milk to schools representing 9 percent of all fluid milk volume have declined sharply with closures in many metropolitan areas. This factor together with decreased sales to restaurants and into food service will depress sales of all dairy products.  The National Milk Producers Federation estimates direct losses as a result of COVID-19 could attain $3 billion necessitating Federal support.  The NMPF has requested additional dairy product purchases by the USDA for food banks and is encouraging re-enrollment of farmers in the Dairy Margin Coverage Program.

 

Contrast the support programs extended to milk producers and to the absence of market stabilization for eggs. Our industry just has to battle through oversupply situations

 


 

FSNS Courier and FedEx options

 

FSNS is committed to being your trusted and responsive food safety partner. In doing so, we are offering various options for sample pick-up. With many delivery systems offering ‘contact-less’ pick-up, FSNS would like to offer our customers the following as options or alternatives:

If you are currently receiving courier service, we can offer:

  •  Switching to shipping via FedEx* vs. courier pick-up
  • Moving to ‘contact-less’ pick-up. Couriers would be notified of non-contact area to pick-up samples keeping face-to-face contact minimized. We stress that sample temperatures must be adhered to and will be checked prior to delivery to the lab. 
  • Aligning with FedEx no longer requiring signatures for deliveries, FSNS couriers will no longer require customer log or supply log signatures 
  • If you currently ship samples via UPS/FedEx – there are no changes needed. 

*at applicable rate

If you are interested in either of these options, please contact your existing FSNS testing laboratory and arrangements can be made expeditiously or contact our Customer Service Department at customerservice@fsns.com.

These are extraordinary times and we will continue to monitor developments and further adapt our policies and practices as new information becomes available. We are committed to serving our customers and thank you for your ongoing partnership.


 

Position Announcement: Technical Director, Eggland’s Best

Eggland’s Best LLC., the leading U.S. specialty egg producer with national production and distribution, is recruiting for the newly-created position of Technical Director. The incumbent will report to the president and will be responsible for food safety, quality assurance, production compliance and product development as a member of a professional team.

 

Qualifications include graduation as a Veterinarian with ACPV certification preferred and relevant field experience an advantage. Residence within commuting distance of the corporate office in Malvern, PA is required. Relocation is available.  Approximately 25 percent travel is anticipated.

 

The position offers a competitive salary and fringe benefits. Applications attaching a CV should be addressed to Ellen Shea, Eggland’s Best LLC, at eshea@eggland.com.  Eggland’s Best is an equal opportunity employer.

 


 

Pizza and Food Delivery Companies Modifying Home Delivery Procedures

Pizza delivery companies including Papa John’s, Pizza Hut and Domino’s together with Uber Eats, DoorDash and services operated by grocery chains are now applying non-contact delivery procedures to avoid transmission of COVID-19.  The increased demand for home delivery has created opportunities for Gig workers with Papa John’s offering employment to 20,000 drivers and for cyclists in urban areas.


 

Surveillance Reveals Additional Turkey Flocks with LPAI in NC

According to a statutory submission to the World Organization for Animal Health (OIE), Dr. Mark Davidson, Associate Administrator of the USDA-APHIS reported additional cases of H7N3 low pathogenicity avian influenza in asymptomatic turkey flocks on March 24th. The diagnoses were obtained as a result of surveillance implemented in the infected zone following recognition of the initial cases involving a parent flock and two grow-out flocks in Anson and Union Counties in North Carolina on March 13th.

 

The provisional diagnoses were confirmed by the National Veterinary Service Laboratory in Ames, IA. applying RRT-PCR followed by sequencing on samples processed on March 17th, 21st and 23rd.

 

As of March 24th eight flocks totaling 186,000 turkeys have been depleted with a range in farm population of 11,000 to 45,000. In addition to the two North Carolina counties a single flock of 36,000 turkeys in Chesterfield County, South Carolina was identified as being infected.

 

It is presumed that epidemiologic studies are in progress to determine the source of the H7N3 LPAI infection. The most likely presumption is introduction by migratory waterfowl with inter-farm dissemination attributed to possible defects in biosecurity. If this is the case to be determined by wildlife surveys then it may be assumed that the virus is being shed by birds transiting the Atlantic Flyway. This corridor has not been previously involved in outbreaks among commercial flocks. If proven the presence of either an H5 or H7 AIV, irrespective of current pathogenicity has implications for egg production, broiler breeder, broiler and turkey flocks extending from Georgia to the Eastern Shore. It remains to be seen whether this episode is a replay of the contained 2014 outbreak among turkey flocks in Northern California and the 2016 outbreak among turkey flocks in Indiana or assumes the proportions of a more serious outbreak as in Minnesota and the Dakotas in 2015. Given sufficient time and a large commercial population exposed, H5 and H7 AI viruses invariably mutate to high pathogenicity.

According to the USAPEEC exports should not be adversely affected by this as yet isolated and controlled cluster since importing nations are applying regionalization, restricting embargos to counties.


 

USDA Offers Regulatory Response to Shift From Food Service to Retail Demand

To support an adequate supply of high quality table eggs, USDA’s Agricultural Marketing Service (AMS) is immediately waiving the provision which prohibits official grading for eggs over 21 days in age or for eggs that have previously shipped for sale (7 CFR 70.3). This temporary deviation from the voluntary grading regulations will help meet consumer demand by allowing eggs recently shipped to foodservice to be returned to the packing plant of origin for reprocessing, repackaging and grading for retail distribution.

 

In addition, AMS will allow a temporary extension of the age restriction for eggs bearing the USDA grade shield from 21 days to 30 days including the date of lay.


 

Walmart Foundation Donates To COVID-19 Defense

The Walmart Foundation has committed $25 million to support communities impacted by COVID-19.  The donation will be distributed among international efforts to help countries prevent, detect and manage coronavirus infection ($5 million); food donations to food banks school meal programs serving impoverished communities ($10 million) and to local communities in both the U.S. and internationally to respond to COVID-19($10 million).

 

Kathleen McLaughlin, Chief Sustainability Officer stated, "in times of need we see communities come together to do extraordinary things".  She added "this pandemic is no different, we are humbled by the efforts of our store associates, non-profit partners and citizens across the globe who are coming together to support those in need." 

Walmart is joined by a number of food retailers in providing resources to alleviate suffering caused by the COVID-19 pandemic.  These include H-E-B and the Kroger Company Zero Hunger Program that have donated $3 million.


 

Commentary


Stefan Pohlmann Sentenced in Germany over Salmonella Outbreaks

Stefan Pohlmann, son of Anton Pohlmann was found guilty as the responsible manager of an egg production enterprise responsible for a serious Salmonella Enteritidis (SE) outbreak in 2014. He was sentenced to one year and nine months, suspended, after being detained for eight months awaiting trial.  He was found guilty in190 cases of commercial fraud relating to distribution of eggs known to have been infected with SE and negligent bodily harm in 26 cases.  He was fined $375,000 and his company Bayern-Ei (‘Bavarian Egg’) was ordered to pay $1.27 million in compensation.  The 2014 SE outbreak occurred in 2014 and involved cases in Austria, France, Germany and the U.K.  In a subsequent outbreak of salmonellosis during the summer of 2019 Salmonella was traced back to the Aiterhofen Farm operated by the Pohlmann family.  In these cases, Salmonella was detected on the surface of eggs that were not washed as is the practice in most nations in the EU.

 


Anton Pohlmann (left) and his son Stefan (right)

Prison for the Animal torturer

As part of his plea bargain, Pohlmann will no longer be eligible to manage commercial livestock in Germany.  This penalty was imposed on his father Anton in 1996 when evidence of gross deviations from welfare standards was documented on farms he operated.

 

For perspective relating to the U.S., Anton Pohlmann established egg production operations in Ohio in 1980 when he purchased land near Croton. By 1984 his operations had 56 layer houses, 21 pullet houses, four egg packing plants, a hatchery, feed mill and support facilities for five million hens.  Eventually his Buckeye holdings included complexes in Marseilles, Goshen and Mt.Victory, OH. with a combined total of 11 million hens.

 

In September 2000, a tornado ripped through the Croton complex destroying 12 barns housing about one million hens.  The cleanup program was delayed and both Buckeye Egg Farm and the industry were subject to adverse publicity as hens trapped in cages died of starvation and dehydration. Depopulation was impeded by the danger of removing hens from damaged cages in unstable buildings.

 

The Pohlmann operations were characterized by a series of complaints, lawsuits and citations relating to contamination of streams and groundwater with manure in addition to odor and fly nuisance. These problems resulted in increasing intervention by the Ohio Department of Agriculture and the Ohio Environmental Protection Agency.  A major contamination episode occurred in April 1999 from the LaRue Complex causing an extensive fish kill.

 

Facing punitive action by the State of Ohio involving revocation of permits and adverse judgments on numerous nuisance lawsuits, Pohlmann sold his interest in the Ohio operations to a company with Orland Bethel as a front man for Jack DeCoster in 2003.  Following the revelation that DeCoster was the de facto owner and taking into account the problems experienced over ten years the Director of the Ohio Department of Agriculture recommended closure of the entire enterprise. Following a series of contempt of court charges and noncompliance with environmental regulations, Buckeye was ordered to implement a shutdown program involving two barns each week followed by divestment.

 

The Ohio complexes originally established by Pohlmann have been extensively reconstructed and now function in compliance with environmental and welfare regulations under family management as Versova Holdings LLC. This company formed in 2016 involves equity participation among the Dean, Henning and Boomsma families with farms in Iowa and Ohio. Their origins extend back to 1978 with the establishment of the Center Fresh Group with Central Valley Farms and Trillium Farms combining to form Versova.


 

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Dr. Simon M. Shane
Simon M. Shane
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