USDA- APHIS Response to Bovine Influenza Outbreaks

USDA-APHIS has responded aggressively with a detailed, preliminary epidemiologic investigation of the expanding incidence rate of bovine influenza-H5N1 outbreaks among dairy cattle in Michigan with spillover to egg production complexes.  At the outset, the Agency is to be complemented by deploying highly qualified personnel from the Strategy and Policy and the Field Operations units to Michigan together with participation and support by the National Veterinary Services Laboratories. The team of seven APHIS veterinarians with collectively ten post graduate degrees or board certifications was assisted by a colleague at the Colorado State University College of Veterinary Medicine and with resources and support from the Michigan State Veterinarian.


Bovine influenza-H5N1 virus characterized as genotype B3.13 was diagnosed during late March in a dairy herd in Texas.  Subsequent genomic assay suggests that the infection was circulating in dairy herds since late December 2023. Clinically the disease in cows presents as an acute decline in milk production, anorexia and depression in habitus. 


Cattle shipped from the index farm were received by a herd in Michigan on March 8th.    Clinical signs were detected on March 20th. This was followed by an episode of high mortality in an in-line egg production complex near Saranac, MI. confirmed as HPAI on April 2nd.  Whole genome sequencing of virus isolates from the Michigan dairy and poultry operations were identified as Eurasian lineage goose/Guangdong, clade, genotype B3.13 with homology among isolates from both the dairy herd and layer complexes.


The USDA team published their preliminary findings on June 9th and circulated the manuscript in the form of a report that encapsulated epidemiologic findings including recommendations for prevention*.  The report comprised observations made on 15 dairy herds and 8 poultry flocks covering the period March 29th through May 16th.


The principal epidemiologic findings included: -

  • Almost a third of dairies employed workers who owned livestock or poultry at their personal residences.
  • There was extensive commonality of employment among dairy herd workers.  Twenty percent of those employed and 7 percent of their family members worked with dairy herds other than their principal location.
  • Of considerable significance to interspecies transmission, seven percent of workers on the affected dairies also worked on poultry farms and 13 percent of workers on affected dairy farms had family members working on poultry complexes.
  • With respect to the dairy operations, 62 percent used shared vehicles to transport live cattle but only 12 percent of responders recorded decontamination after delivery.
  •  All dairy farms had regular visits by veterinarians, consultants and contract haulers with evident direct contact among herds.  Almost half of the dairy herds used a contractor to dispose of dead animals with a history of removal within 30 days of the emergence of clinical signs in 40 percent of the affected herds.
  • As with all dairy operations, milk haulers visited operations at least daily.


The epidemiologic evaluation based on a questionnaire requiring participation of up to two hours by a responsible reporter and follow-up investigations and an environmental sampling form the basis of the publication.


The major conclusions of relevance to the outbreak included: -

  • Introduction of the virus into Michigan herds by infected but apparently asymptomatic cattle originating in Texas.
  • Evident inter-herd and inter-flock dissemination of H5N1 by movement of personnel, lactating cows and vehicles, without appropriate operational biosecurity.
  • HPAI H5N1 genotype B3.13 was detected in pigeons, a starling, cats, raccoons, opossums and foxes at five of the dairy farms surveyed and on one participating poultry farm.  The question arises as to whether the free-living resident passerine birds introduced the infection by viral shedding or whether they became infected by contact with a contaminated environment.  Cats are highly susceptible to infection and demonstrate clinical signs and death. They may be involved as a ptential link between wild birds and cattle.  Cats could also have become infected by consuming discarded raw milk from infected cows.
  • Movement of personnel and their families among dairy and poultry farms was considered to be significant in the context of the extension from the initial cases in dairy herds to the catastrophic loss involving 4.8 million hens among six farms under common ownership.  It is understood that workers were not required to disrobe and shower before donning company-provided outer clothing.  The investigation confirmed that at least 20 employees of three poultry flocks worked weekend shifts at two dairy farms.  The report also confirmed that shared housing could have contributed to dissemination of infection in the case of three poultry farms and two dairy herds.


Recommendations to prevent infection included: -

  • Maintaining closed herds although 9 out of 15 farms that were evaluated did not receive animals within 30 days of their respective outbreaks.
  • Surveillance of both individual animals by PCR assay of respiratory swabs and pooled samples of milk is now mandated before interstate movement of lactating cows.  Clearly, this is inadequate since heifers could transmit infection and individual states should be required to impose a similar restriction on intra-state movement.  Recommendations in the Secure Milk Supply Enhanced Biosecurity Plan should be followed. 
  • The Michigan Department of Agriculture and Rural Development issued a Determination of Extraordinary Emergency-HPAI Risk Reduction Response Order on May 1st requiring adherence to acceptable operational biosecurity.  It is noted that procedures to limit transmission of infection require structural biosecurity including facilities to decontaminate personnel vehicles and equipment which, if absent, invalidates operational biosecurity.
  • It is a longstanding practice within the poultry industry to require personnel to avoid visiting other poultry farms or maintaining poultry at their homes.  The industry has, however, not considered swine or dairy operations as a possible source of infection.  Even in the absence of a prohibition of contact with other farms, introduction onto egg production complexes may have been avoided by decontamination of personnel using available showers.
  • Since the early April outbreak in the Michigan egg production complex, virtually all poultry producers have amended their personnel requirements to include a ban on working on any other livestock operation with some companies extending this restriction to family members.  Since declarations are voluntary and impossible to verify, disrobing, showering and donning company-provided outer clothing and PPE is considered to be an essential preventive measure.



The report prepared and published by USDA-APHIS illustrates how a field investigation with appropriate laboratory support can be implemented within a short period, given resources but more important with motivation and direction by senior administrators. Since the onset of the current epornitic in 2022, APHIS has functioned to diagnose outbreaks of avian influenza and to depopulate flocks. The APHIS concentration has been an attempt to eradicate a seasonally and regionally endemic infection introduced and disseminated by migratory waterfowl that constitute reservoirs and shedders. The Agency has neglected epidemiologic studies that could have contributed to recommendations for prevention. Only two superficial and flawed reports were belatedly published, based on telephone-administered surveys one year after the 2022 outbreaks in diverse egg production and turkey grow-out farms respectively. Information including the critical determination of whether HPAI can be transmitted, albeit it over short distances, by the aerogenous route would have been helpful along with other recommendations based on logical assumptions and more structured and focused investigations. 


The rapid response by APHIS, with real-time recommendations relating to H5N1 outbreaks in Michigan demonstrate that the Agency is capable of responding to a disease emergency.  Why was a similar approach not adopted in 2022 following the emergence of HPAI collectively responsible for subsequent depopulation of close to 90 million commercial poultry? Does APHIS operate according to the Animal Farm ethos of Four legs good-two legs bad? There is a lot that the poultry industry needed to know 50 million or so birds ago!


*Nguyen, T-Q., et al.  2024 Highly Pathogenic Avian Influenza (H5N1)-Michigan Dairy Herd and Poultry Flock Summary



Egg Industry News

Egg Week

USDA Weekly Egg Price and Inventory Report, June 20th 2024.

Market Overview

  • The average wholesale unit revenue values for Midwest Extra-large and Large sizes were up 1.6 percent on average this past week. Medium size was up 9.4 percent. National wholesale price for graded loose on June 14th at $2.20 per dozen was approximately $1.30 per dozen above the 3-year average of $0.90 per dozen and up $1.45 from the corresponding week in 2023 at $0.75 per dozen. This past week shell egg inventory was down 0.9 percent, reversing the rise of 5.2 percent in stock during the previous week.
  • Although there are weekly transfers of mature pullet flocks to laying houses, hen numbers are constrained by depletion due to HPAI. Close to 13 million hens were lost during the 4th Quarter of 2023 that have not yet been completely replaced. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May.
  • This past week, chains apparently narrowed the spread between delivered cost and shelf price. This could result in a continued fall in generic stock given reduced supply despite softening demand. Stock level will depend on constant re-ordering to fill the pipeline through late June. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
  • Total industry inventory was up by 0.1 percent overall this past week at 1.57 million cases with a concurrent 4.0 percent decrease in breaking stock, following a 0.1 percent decrease during the preceding processing week. Demand for egg products fell through late May attributed to less home-baking and entertaining. Egg products are required for the food service and manufacturing sectors and for exports that have shown marked monthly fluctuation year-to-date.
  • It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to 4 percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
  • The number and extent of future possible HPAI outbreaks during the fall months of 2024 cannot be projected but sporadic cases in backyard poultry, isolation from wild migratory and predatory birds and close to 100 dairy herds in twelve widely diverse states is a cause for concern. More surveillance information should be released by USDA-APHIS as it becomes available concerning the prevalence rate of avian carriers of H5N1 among resident domestic free-living birds together with a review of molecular and field epidemiology for the current spring and future fall waves of HPAI. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances.
  • The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past two years. 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.
  • The USDA belatedly adjusted the U.S. flock in production by 9.0 million hens to a new level of 296.4 million for the week ending May 29th On June 20th the stated total flock of 302.2 million included about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production. Given the latest figures it is estimated that the total flock is at least 20 to 22 million hens lower than the 326 million before the onset of HPAI in 2022. In January 2024 the USDA adjusted figures to account for depopulation of 13 million hens spread over the last quarter of 2023. There were evident discrepancies between published figures and the theoretical number of hens over successive weeks taking into account known losses and predetermined pullet replacements. The April loss of 8.4 million followed by 5.7 million in May does not appear to be reflected in the latest release of data. It is hoped that the USDA agency responsible for publication of flock size will coordinate with APHIS to record the number of depleted flocks and promptly provide accurate data. Figures released on June 20th overestimate flock size especially if the 4.3 million hens in Iowa confirmed on May 28th are not accounted for.
  • The ex-farm price for breaking stock (rounded to one cent) was up 5.0 percent to $1.68 per dozen.Checks delivered to Midwest plants were up 12.1 percent to $1.57 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs usually with a lag of one to two weeks.


Egg Projection

Updated June 2024 USDA Projection for U.S. Egg Production and Consumption. 


On June 18th 2024 the USDA Economic Research Service (ERS) issued actual values for egg production during 2023 with a projection for 2024 and a forecast for 2025. Production, consumption and prices were slightly revised from the previous May 2024 report.


Projected egg production for 2024 was lowered to 7,787 million dozen This will be 1.0 percent lower than in 2023 despite progressive replacement of the 44 million hens depleted due to HPAI over the period extending from early spring through mid-December 2022. Losses caused by HPAI depletion during the last quarter of 2023 reduced the annual total. The per capita consumption of shell eggs and liquids combined for 2024 will be 275.6 eggs down 1.3 percent from 2023. The projected average 2024 benchmark New York bulk unit price was raised to 230.9 cents per dozen.


Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is undergoing deflation. The 2023 Midwest in-carton national wholesale price peaked at $5.17 per dozen on January 3rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8th 2023. Price was restored during late February 2024 and settled at $2.15 per dozen Midwest graded Large on May 31st 2024, higher than normal for the post-Easter period. This was above the USDA/EIC projection of the combined nest-run May 2024 cost of 77.9 cents per dozen for caged white Large, plus a provision for processing, packaging and transport of 60 cents per dozen amounting to $1.38 cents per dozen delivered to a distribution center.


Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but placements were limited by the availability of pullet chicks and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4th quarter of 2023 representing 4.0 percent of the nominal producing flock of 325 million hens, mainly on complexes averaging over one million hens. Unpredictable factors affecting price will include the extent of losses during the remainder of 2024 due to a reemergence of avian influenza. Approximately 8.5 million hens were lost to HPAI during April and 5.7 million in May. Exports of eggs and products at approximately two percent of total production will not materially affect the domestic price.


The USDA forecast for 2025 includes production of 8,150 million dozen, up 4.7 percent from 2023. Consumption of 286.6 per capita, would be a speculative 11.0 egg increase over 2024 (4.0 percent) and presumably relating to a 70.9 cent per dozen reduction in the NY-Large benchmark price to $1.60 per dozen from the 2024 average for packed eggs of $2.31 per dozen.


During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022. For the first quarter of 2024 shell egg exports were up 7.8 percent in volume to 21.8 million dozen, but down 28.3 percent in value to $43.4 million compared to the corresponding months in 2023. Unit value was down 31.1 percent to $1.99 per dozen.


June 2024 USDA data is shown in the table below:-












% Difference



Production (million dozen)







Consumption (eggs per capita)







New York price (c/doz.)







*Data influenced by HPAI losses


Source: Livestock, Dairy and Poultry Outlook released June 18th 2024

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.


Commodity Report





Prices for corn and soybeans fell substantially this past week. Prices were influenced by technical selling arising from geopolitical concerns, estimates of  high domestic U.S. availability and the revised projections for harvests in Brazil and Argentine. Contributory factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans for the 2024 crop.  The June WASDE Report contained essentially unchanged values from the extensively revised May Report. Planting is complete and with the transition to a neutral phase a La Nina event is expected during the third quarter. The July WASDE should provide projections on yields and prices.


At 13H00 EDT on June 20th the CME price for corn was down 3.3 percent compared to the previous week to 444 cents per bushel for July delivery. Corn price was influenced by ethanol demand and the proportionally high ending stock from the 2023 crop. Export orders for the current market year have increased in response to lower prices.  Volumes and price are indirectly influenced by wheat availability as influenced by weather and events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through June despite a moderately higher Dollar Index and increased ocean freight but offset by a low FOB prices. Total exports for the current market year are 25.1 percent higher than for the corresponding week during the 2022-2023 year.


Soybeans traded at 1,125 cents per bushel for July 2024 delivery, down 5.4 percent over the week. Higher prices were attributed to trading, less farm selling and projections of availability from the 2024 Brazil and Argentine harvests. Total exports for the current market year are 17.1 percent lower than for the corresponding week in the 2022-2023 year.



Soybean meal traded at $358 per ton for July delivery, down 2.4 percent. Price was influenced by demand coupled with high crush volumes for consecutive months from December 2023 through May 2024. Price will fluctuate to reflect the CME price for soybeans and the demand for biodiesel despite the adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the extensively revised May WASDE Report  essentially unchanged in June.


 WTI was $2.05 (+2.6 percent) higher from last week to $80.55 on June 19th. Price is up on the balance between supply and demand and geopolitical uncertainties. Tensions persist in the Middle East. The reduction in attacks on shipping in the Red Sea is due mostly to fewer vessels transiting the waterway to and from the Suez Canal.  It is evident that U.S. production is a moderating influence on price, attaining an average of 13.2 million barrels per day in March with ample reserves. An upward trajectory in price may occur if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was an upward movement in price during the week (range $73.05 up to $80.56). Crude oil inventory in the U.S., other than the Strategic Reserve, was up 0.9 percent to 34.1 million barrels last week. High U.S. production is constraining domestic and international prices and the recent decline in energy cost during past month is reflected in deflation possibly influencing the FOMC in their eventual lowering the benchmark interest rate.


Economic data released during the recent month (Q1 GDP; PCE, Confidence, Productivity, Employment) confirmed slow growth of the economy but with a downward trajectory in inflation The data-driven Federal Reserve FOMC passed on lowering the benchmark rate on June 12th and Federal Reserve Chair Jerome Powell indicated one reduction in the 10-year rate during fall. Economists are now suggesting that the Fed is “behind the curve” again on adjusting rates.


Factors influencing commodity prices in either direction over the past four

 weeks included:-


  • Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong El Nino event that has now officially ended. The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover and lower exports of soybeans. (Downward pressure on prices).  Harvesting in South America was advanced for the “new” crop of 2024 but was disrupted by flooding in the southern production states mainly affecting Rio Grande do Sul where up to 25 percent of crops may have been lost.


  • Geopolitical considerations continue to move markets, especially in the Mideast and Baltic regions. Ongoing attacks on Ukraine port facilities have impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deployment of airborne missiles.  Exports from Ukraine are approaching 1.5 million metric tons per week with a total of 26 million metric tons market year through February, down 11 percent from the equivalent period for 2022-2023 year. Grain production in Ukraine during the current year will be lower than 2022/2023 (Downward pressure on corn and wheat and an indirect effect on soybeans)

  • Macroeconomic U.S. factors:-
  • Most economists in academia and the private sector are still confident of a “soft landing” for the economy despite the release of the Q1 2024 GDP and recent economic parameters including the ECI, CPI and PPI and with fluctuation in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.5 percent in March 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Recent lower energy prices are contributing to deflation.
  • The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on June 12th, the seventh sequential pause.  The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly less than two reductions of 25 basis points each in 2024, after the September meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on demonstrated progress in reducing inflation as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 was evidently premature.
  • The June 12th Bureau of Labor Statistics release of the May 2024 CPI confirmed that there was no increase from April, 0.1 percent below forecast. The annual increase of 3.3 percent was lower than the 3.4 percent projection. The increase in the core value (excluding food and energy) was up 0.2 percent from April and 3.4 percent for the 12-month period, both down 0.1 percent from estimates. Food at home was unchanged from the previous month. The category of ‘meat, fish and poultry’ was up collectively on a seasonally adjusted basis by 0.2 percent from the previous month and 2.4 percent for the year. Food away from home was up 0.4 percent from April.  On an annual basis all food was up 2.1 percent with food at home up 1.0 percent and food away from home up 4.0 percent. Energy was down 2.0 percent due to gasoline (-3.6), electricity (unchanged) and natural gas (-0.8 percent) in May. The shelter category was up 0.4 percent for the month and 5.4 percent over the past year. The macro trend is inclining towards reduced inflation but constrained by the shelter category that is detracting from deflation. The CPI heavily influences FOMC rate decisions.
  • The May 30th release by the Bureau of Economic Affairs documented the second estimate of Q1 2024 GDP at 1.3 percent, below the April advanced estimate of 1.6 percent. The Q1 GDP value was influenced by spending by both consumer and government-sectors and with higher investment in housing. By comparison Q4 2023 GDP growth was 3.4 percent. Growth in GDP attained 2.5 percent in 2023 up from 1.9 percent in 2022. The Personal Consumption and Expenditure Index For Q1 (excluding food and energy) was up 2.0 percent. The May 24th advanced estimate of Q2 GDP was 3.5 Percent.
  • The May 31st Bureau of Economic Analysis released the April Personal Consumption and Expenditure Price Index. The core index (excluding food and energy) was up 0.2 percent from the previous month and 2.8 percent year-over-year. This was in line with estimates. The Headline PCE Index was up 0.3 percent over the previous month and 2.7 percent year-over-year. On a monthly basis the price of goods was up 0.2 percent, services were up by 0.3 percent, food down by 0.2 percent and energy up by 1.2 percent. The headline PCE is closely followed by the Federal Reserve and confirms persistent inflation holding above an annual target of 2.0 percent.
  • The May Producer Price Index for Final Demand (PPI) released on June 13th was down 0.2 percent from April compared to an expectation of  a 0.1 percent increase. The PPI was up 2.2 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was unchanged from April and up 3.2 percent for the 12-month period. Food was down 0.1 and energy down 4.8 percent respectively from the previous month.
  • A Federal Reserve release on June 18th confirmed that industrial production rose 0.9 percent in May. Capacity utilization was slightly higher at 78.7 percent, 0.9 percent below the long run 1972-2020 average.
  • The May 24th report by the Census Bureau on Durable Goods Ordered during April 2024 was higher by 0.7 percent to $284 Billion compared to a revised value of 0.8 percent or $282 Billion in March. Transportation and specifically aircraft orders were up 1.2 percent. Excluding the Transportation component, new orders increased by 0.4 percent in April compared to March. Shipments of durable goods up 2.4 percent from March that registered a 1.5 percent decline.
  • The June 18th release of retail and food sales data showed a monthly rise of 0.1 percent in May down from a revised 0.2 percent in March mainly due to lower gas prices. Retail sales in May 2024 were up 2.3 percent from the corresponding month in 2023. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
  • The June 3rd release by the Institute for Supply Management (ISM®) recorded a fall in the Manufacturing Index for May at 48.7 down from 49.2 in April and further below the bifurcation point between contraction and expansion of 50.0. New Orders fell to 45.4 (49.1, April) and Production attained 50.2 (51.3 April).  The Prices Index fell to 57 in may, down from 60.9 in April denoting lower costs for production. U.S manufacturing continues to contract responding to prolonged high benchmark interest rates.
  • On April 30th the U.S. Bureau of Labor Statistics reported a 1.2 percent increase in the Employment Cost Index (ECI) over the 1st quarter of 2024 against a consensus estimate of 0.9 percent.  The year-over-year increase was 4.4 percent compared to an estimate of 4.0 percent and with benefit costs up by 3.7 percent. The March ECI of 1.2 percent compares with a value of 0.9 percent for the 4th quarter of 2023. The ECI is closely followed by the Federal Reserve FOMC and further reduces the possibility of a rate cut before September at the earliest.
  • The May 24th release of the S&P Global Composite U.S. Manufacturing PMI for May rose to 54.4 compared to revised 51.3 in April. This was the highest rise since April 2022.
  • The Conference Board Consumer Confidence Index released on May 28th for April through May, rose unexpectedly to 102.0 points from a revised 97.5 for the preceding four-week period. The index was higher than a Reuters consensus estimate of 95.9. The Present Situation Index was higher to 143.1 in May compared to 142.9 in April. The Expectations Index gained 8.4 percent to 74.6 from a revised 68.8 in April. Values below 80.0 suggest a future recession. Confidence improved over the past four weeks after three successive monthly declines.
  • The June 14th University of Michigan Preliminary Index of Consumer Sentiment for June was not statistically lower by 3.5 points to 65.6, down from a forecast value of 77.1.  The Index was up 2.2 percent from the corresponding period in 2023. Both the Current Economic Index (62.5 down from 69.6 in May) and the Index of Consumer Expectations (67.6 down from 68.6 in May) denote a decline in consumer sentiment influenced by stable but high interest rates and inflation despite geopolitical concerns. Inflation expectations 12-months hence moved higher from 3.2 to 3.3 percent among the 500 surveyed.
  • Non-farm payrolls added 175,000 in April, as documented by the Bureau of Labor Statistics in a May 3rd release. This was less than the anticipated 240,000, and should be compared to the revised March value of 315,000. The moderate increase was attributed to workers hired in the health care and government sectors. The unemployment rate rose to 3.9 percent with 6.5 million unemployed and with 1.3 million in the long-term category. Real average hourly earnings during April showed a 0.2 percent increase over March to $34.75 .  Average hours worked fell 0.1 percent to 34.7 per week in April. Labor participation was unchanged at 62.7 percent in April. Wage rates increased 3.9 percent over 12-months, the lowest gain since June 2021. Wage rates are closely followed by the Federal Reserve FOMC.
  • The Bureau of Labor Statistics Job Openings and Labor Survey report released on June 4th estimated 8.06 million job openings at the end of April, compared with the revised March value of 8.35. The April job openings number was the lowest value since February 2021 and compares with the March 2022 value of 12.2 million job openings during COVID. The hiring rate was 3.6 percent (5.6 million hires) with an April quit rate of 2.2 percent both values unchanged from March.
  • The seasonally adjusted initial jobless claims figure of 238,000 released on June 20th for the week ending June 15th declined by 5,000 from the previous week that represented a 10-month high. The weekly value was higher than the Reuter’s estimate of 235,000. The four-week moving average was 232,750. The Bureau of Labor Statistics estimated 1.83 million, (1.82 last week), continuing claims for the week ending June 8th, up 15,000, and a year-to-date high. There is evidence from data over the past three months that the labor market is cooling, although still tight, despite sporadic weekly fluctuation in new claims.
  • The June 6th Bureau of Labor Statistics report recorded a revised 0.2 percent increase in non-Farm Productivity for Q1 2024 down from 0.7 percent in Q4 2023. Labor cost increased 4.0 percent annualized, down from an initial estimate of 4.7 percent.
  • The ADP® reported on June 4th that private payrolls increased by 152,000 in May, down 36,000 from the revised 188,000 in April and compared to the Dow Jones estimate of 175,000 jobs. The increase in employment was mostly in the health, services and hospitality sectors with 149,000 positions while manufacturing lost 20,000 slots. Annual pay was up 5.0 percent year-over-year, for the third successive month and the lowest value since August 2021. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report.



  • The June 12th WASDE projected acreage to be planted, yields, crop size and ending stocks for the 2024 crop.
  • It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and within both sides of the aisle in the House delayed adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. After four Continuing Resolutions the House and Senate passed six appropriations bills including the FDA and USDA, avoiding a March 8th partial shutdown of the Federal Government. Agreement was concluded on the remaining appropriations bills on March 23rd maintaining Federal funding through October 2024. Currently the position of the Speaker of the House is more secure suggesting progress in passing needed legislation in the succeeding weeks of the 118th Congress.
  • The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. Despite the markup of the House and Senate version. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility, allocation of funds for climate remediation and requested price supports for crops. The Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation even if the Farm Bill is delayed through to the 119th Congress. There is no confirmation that funding will be available for crop support payments as included in the House version.  
  • The June 12th WASDE #649 Projected both corn and soybean production parameters with a potential record soybean harvest for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 38.0 percent of the 2024 U.S. crop with a 2.2 percent increase in ending stock to 455 million bushels as compared to the May WASDE Report.  The projection of corn exports suggests that exports will amount to 13 percent of the 2024 crop with ending stocks unchanged from May at 2,102 million bushels.
  •  Rabobank projected the soybean crop in Brazil at 153 million metric tons on April 4th albeit before flooding. This value is higher than the projection by CONAB (the Soy production association in Brazil) at the midpoint of the soybean harvest, of 147 million metric tons  (5,401 million bushels) down from a previous estimate of 155 million metric tons (5,695 million bushels). Exports of 100 million metric tons (3,674 million bushels). It is anticipated that Brazil will crush 56 million metric tons (2,057 million bushels). If CONAB is correct the harvest will be 7 million metric tons (269 million bushels) lower than the 2023 record crop. Brazil exported 7.0 million metric tons (257 million bushels) of soybeans to China over the first two months of 2024, double the quantity shipped to this nation over the corresponding two months in 2023.
  • Corn production in Brazil for the 2023-2024 market year will attain 124 million metric tons (4,801 million bushels) from all three sequential harvests. But down seven percent from the previous year. Brazil is projected to export of 54 million metric tons (2,125 million bushels). Argentine will produce 50 million metric tons of corn (1,968 million bushels), double compared to the previous year impacted by drought. (Lower prices in the future subject to favorable reports on crop progress and actual harvests)


  • The 2024 wheat crop from Russia will be down 11.8 percent from 2023 to 80.7 million metric tons. This is due to severe weather during winter followed by drought. The deficit will place upward pressure on coarse grains


  • The Dollar Index (DXY) was 105.3 at close on June 19th, up 0.7 point from last week based on recent U.S. economic data suggesting a delay in lowering benchmark interest rates until the fall with persistent high bond rates. The DXY has ranged from 99.0 to 107.0 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.



The FAS Export Report for corn, released on June 21st for the week ending  June 13th confirmed that outstanding export orders for corn amounted to 10.92 million metric tons (422.06 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 0.51 million metric tons (20.11 million bushels) consistent with lower price. Shipments recorded during the past working week amounted to 1.48 million metric tons (58.33 million bushels). For the current market year to date cumulative export of 42.11 million metric tons (1,657 million bushels) is 25.1 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 3.08 million metric tons (126.03 million bushels) with 93,600 metric tons (3.68 million bushels) ordered this past week

(Conversion 39.36 bushels per metric ton.  Quantities in metric tons rounded to 0.1 million)


Increasing Incidence of Bovine Influenza-H5N1 Raises Questions

With the 12h state reporting bovine influenza-H5N1, and with almost 100 confirmed herds as of June18th, USDA is faced with a problem of transparency.  Daily updates of incident cases on websites should be achievable.  Release of isolates for genome sequencing is essential with participation by WHO influenza reference laboratories in the U.S. and in Europe. Simply beating the drum of improving biosecurity pays lip service to the emerging problem.


It is fortunate that heat treatment inactivates the virus in fluid milk so pasteurized milk and dairy products should be safe to consume.  The question of transmissibility to human contacts appears to be extremely limited at present but it will be critical to continually monitor for mutations that may facilitate infection of human respiratory tissue.  At the present time all three identified patients who contracted H5N1 infection demonstrated conjunctivitis (with only one displaying mild upper respiratory signs).  This is due to the fact that conjunctival tissue along with bovine mammary glands contains sialic receptors to both avian and mammalian strains of H5N1.


States reporting bovine influenza H5N1

In a ProMED posting moderator JH questions whether the USDA will initiate surveillance of beef cattle in feed-lots to establish whether infection has entered these herds.  JH opined “Given the geographic coverage of the USDA map, odds are not in our favor that beef cattle haven’t been infected.  Until a few months ago spill-over of H5N1 into bovines was reviewed as unlikely even though infection with several influenza A variants have occurred on a limited basis previously in cattle.  Even cow-calf operations may be at risk, given that their water may be contaminated by free-living birds excreting H5N1 virus, known to survive for prolonged periods in water containing organic matter. 


Is the reluctance to establish a limited testing problem based on the presumption that it is best  not to turn over rocks unless one knows what might be under them?  Assay of muscle tissue from culled dairy cows subjected to antemortem condemnation has yielded H5N1 virus.  The implications for asymptomatic infection of beef cattle are self-evident.  Fortunately it has been shown that heat treatment adequate to kill foodborne bacteria infection inactivates H5N1 virus.


At the present time the CDC is calling for all milk from herds with cases of bovine influenza-H5N1 to be withheld from market. This recommendation is based on prudence, notwithstanding the effectiveness of pasteurization. If this policy were to be implemented there would be absolutely no voluntary reporting of cases and a call for federal indemnification. Steve Naig, the Iowa Commissioner of Agriculture has called for Federal compensation for herd operators to cover losses. A proportion of affected dairy cows have either died from H5N2 infection or have been culled as a result of chronic low lactation with unsalable milk.


Boehringer Ingelheim Supports Vaccine Campaign in France.

While debate continues as to the need to implement a vaccination component as an adjunct to existing measures to control avian influenza, Boehringer Ingelheim along with other major animal vaccine manufacturers have continued efforts to develop vaccine technology available should it be authorized by USDA.


EGG-NEWS has consistently advocated tactical application of an effective vaccine against H5N1, the predominant serotype responsible for an ongoing panornitic extending over five continents for the past three years.  Taking into account the potential for embargos on the export of U.S. broiler leg quarters, a decision to introduce a vaccination program would require adherence to WOAH policies on vaccination and trade and an acceptance by USDA of the practical and financial benefits of vaccination. This modality would be introduced in areas with a high probability of repeat infections and for specific classes of poultry including egg production flocks and growing turkeys.


Boehringer Ingelheim was a successful bidder for a contract extended by the French Agency for Food, Environmental and Occupational Health and Safety (ANSES) in 2023.  After successive outbreaks of avian influenza in the foie gras industry a decision was made to introduce a program of vaccination. Rapid diagnosis and depletion of flocks of infected waterfowl and even the application of preemptive depopulation was inadequate to control and prevent reoccurring seasonal outbreaks.  


Boehringer Ingelheim supplied ANSES with an inactivated H5 subunit vaccine that was effective in stimulating protective antibodies in ducks. The program required intramuscular administration of two doses separated by three to four weeks. This Boehringer Ingelheim vaccine has been used in numerous nations and over a billion doses have been administered over a ten-year period.


Based on comparisons of outbreaks prior to and subsequent to introduction of vaccination, the program in France is regarded as a success. The vaccination program in France commenced on October 1, 2023, with the intent of vaccinating 64 million commercial waterfowl by April 2024. At this time 26 million ducks received the first dose of vaccine and 21 million were administered a second dose. Since the fall of 2023 ten outbreaks of H5N1 HPAI were diagnosed compared to 315 during the same period in 2022, preceding introduction of vaccination.


Valerie Ajzenman, Head of Commercial Operations for Animal Health for the Company in France stated, “choosing our vaccine as a vote of confidence in Boehringer Ingelheim’s scientific expertise and sends a strong signal that by vaccinating we can help combat the avian influenza virus.”


In anticipating what should be regarded as the inevitable introduction of vaccination against H5N1 avian influenza, Boehringer Ingelheim offers a number of alternative vaccines:


  • Volvac AIV-H5+ND vaccine based on the Baculovirus expression system introduced in 2015.


  • Trovac AIV H5 vaccine using a fowl pox vector introduced in 1998.


  • Vaxxitek HVT+IBD+H5 currently licensed for application in the U.S. in anticipation of a change in Federal policy.



Innovative Vaccine Technology Required in the Event of an H5N1 Pandemic

Continuation of the H5N1 epornitic in the U.S. and the emergence of the infection in the dairy industry together with concerns expressed by the World Health Organization have focused attention on the need for vaccines in the event of an unlikely widespread infection among human populations in the world.


The Department of Health and Human Services has arranged for cell-based vaccine at CSL Seqirus to be prepared for bottling and distribution.  This would make available five million doses for at-risk and critical personnel including workers on poultry and dairy farms, packing and processing plant workers, health care providers and those with the potential for exposure to the virus.


It is evident that in the remote event of a human pandemic, the time required to prepare a specific influenza vaccine in large quantities will be limited applying available egg propagation technology.


During the COVID crisis, the HSS Biomedical Advance Research and Development Authority (BARDA) funded development of novel vaccines.  Based on the high cost of development and subsequent low demand for specialty vaccines including Ebola and Zika infections, confirmed orders by the public sector and subsidies were necessary to induce manufacturers to invest in production of COVID vaccines.  Pfizer and Moderna have apparently destroyed millions of doses of expired mRNA COVID vaccines given a fall in demand.


At present, the manufacturers of traditional influenza vaccine are preparing for the fall 2024 combination. It is hoped that an H5N1 human vaccine is not required but if so, traditional egg-based manufacture will be unable to meet requirements.


Dr. Rick Bright who led BARDA and invested public funds in alternatives to egg propagation is now promoting cell-based alternatives despite the extensive investment in traditional fertile egg installations. Dr. Bright is correct in pointing to the problems encountered in 2009 with the emergence of H1N1 swine influenza that was responsible for extensive morbidity and mortality before effective specific vaccines could be prepared and distributed.  He is, however, incorrect in implying that exposure of flocks of donor birds producing fertile eggs to prepare vaccines would be compromised for vaccine production in the event of exposure to HPAI.  These SPF flocks are maintained under the highest levels of biosecurity, and it would be highly unlikely for a significant proportion to be exposed.  Expanding egg production would, however, require time based on biological restraints to production. The development and application of mRNA influenza vaccines with broad specificity would appear to be the most desirable solution but only with up-front public sector support for manufacturers. Literally we are in a chicken-or-the egg situation.


Micro-Tracers Obtains FDA Approval for SECURtracers

The U.S. FDA has approved SECURtracers under the category of a ‘physical-chemical’ identifier to establish the authenticity of drugs.  The FDA is justifiably concerned over counterfeit products.

SECURtracers particles of ethyl cellulose range from 100 to 200 microns in size and have up to twelve characters embedded on each particle that can be detected using UV black light and then are viewed microscopically.  Messaging on the particles can be customized with micro-engraving of digits or numerals of up to 10 microns in size. 


According to the Federal Register 89:111 issued Friday June 7, 2024 (page 48507) ethyl cellulose is approved as a matrix scaffolding for SECURtracers for use in animal feeds at an addition rate of no more than 0.09 grams per metric ton of feed (~0.1 ppm). The approval was in response to a Food Additive Petition submitted by Micro-Tracers, Inc.


SECURtracers were developed for pharmaceutical additives to establish authenticity and would be used to code feed products such as enzymes, yeast prebiotics, coccidiostats, complexed minerals and vitamins as authentic. This will be useful in protecting patent and distribution rights, in detecting product substitution and in servicing customer complaints.


Micro-Tracers,Inc. believes this FDA approval will lead to the use of  SECURtracer to code human drug products including tablets and capsules as authentic in order to distinguish from counterfeit products that kill as many as one million unwitting patients worldwide each year.


The SECURtracer technology complements the existing range of iron-particle based Micro-tracers impregnated with a dye that can be used to ascertain qualitative or semi-quantitative addition of additives to mixed feeds.


Further information can be obtained from the Micro-Tracers website by clicking on to the Company logo on the right side of the welcome page.


India Reports H5N1 HPAI in Ducks

According to a ProMed report, authorities in the state of Kerala diagnosed a case of HPAI in a flock of 18,000 ducks in Payippad.  The diagnosis was confirmed as H5N1 at the National Institute of High Security Animal Diseases located in Bhopal. Appropriate depopulation and surveillance have been initiated. 


A number of cases of H5N1 avian influenza have been diagnosed in ducks and free-living birds in India this year suggesting a seasonal endemic status.


Ovo-Vision Offers New Integrated Data Platform

Ovo-Vision of the Netherlands now with representation in the U.S. offers a platform to connect producers and their customers, allowing exchange of data across the value chain.


Ovo-Vision increases the quality of processing data and ultimately customer satisfaction.  The platform reduces administrative burden and management costs and contributes to increased efficiency and profitability.  The Ovo-Vision platform provides for convenient retrieval and transmission of data.  For further information access or click onto the Company logo on the right side of the welcome page.


USDA Evaluating Cold Plasma Technology

Cold plasma offers potential to decontaminate a wide range of food products including fruit, leafy greens, seeds and nuts.  The principle of the technology is based on the application of high voltage electrical power to ionize air to create a mixture of ozone and free electrons with reactive radical products.  The mixture is effective against a wide range of foodborne bacterial pathogens including Salmonella, E.coli, Listeria but in addition will inactivate Cryptosporidium and norovirus.


Forced air can vent cold plasma over food products in a dry environment.  Cold plasma can be combined with water sanitizers to allow the reactive chemical species to interact with pathogens on the surface of foods and on food-contact surfaces.  Plasma activated water is an essentially ‘green’ process without residues since the only components are air, electricity and water.  For specific applications, cold plasma can be combined with chemical sanitizers for a synergistic action.


The FDA is attempting to reduce the risks of foodborne pathogens from leafy greens irrigated using water contaminated with feces from runoff from CAFOs.  Without a positive kill step, any attempts to reduce contamination are essentially “lettuce roulette”.  The USDA Eastern Regional Research Center in Wyndmoor, PA, has a strong scientific record in applying innovative technology to enhance the safety of foods.  This laboratory and its personnel should intensively investigate the technical and financial aspects of applying of cold plasma and electron beam technology to decontamination of food products susceptible to pre-harvest bacterial infection. 


Bezos Center for Sustainable Protein Established at NCSU

Following a $30 million award from the Bezos Earth Fund, North Carolina State University has established the Bezos Center for Sustainable Protein.  The Center will coordinate research and commercialization of plant-based and cell-cultured protein by uniting academia, industry and policy makers. Funding will be applied to develop advanced food technology, support startups and prepare a workforce through university and community college partnerships.


Believer Meats is establishing a cell-culture production plant in Wilson, NC. The Company will collaborate with the Center.


Bill Aimutis, Co-Director of the new Center, noted, “This is a significant opportunity for North Carolina to not only be a state with a thriving animal-foods sector, but also one where it is a powerhouse in complementary proteins.”  He added, “With the Center, we are looking to develop solutions that will provide greater diversity of choices for consumers that are both tasty and sustainable.”


Andy Jarvis, Director of the Future of Food, at the Bezos Serve Fund, stated, “Innovation alone cannot solve our global nutrition needs in the future.  We need to ensure that innovation reaches the market.”



Heat and Health Index Launched by HHS

The Department of Health and Human Services (HHS) has developed the Heat and Health Index  (HHI) that will be posted on the national integrated Heat Health Information System website, and on the CDC website.  The HHI combines historic heat index data and emergency medical services reports on calls related to hyperthermia.  The HHI will incorporate ZIP Code and community characteristics.


The HHI is intended to provide public health officials and policymakers with a prediction of risk and to assist in planning for heat events.  It is estimated that 1,200 U.S. residents die as a result of heat exposure each year.


Dr. Mandy K. Cohen, Director of the CDC, stated, “Heat can pose a threat to our health but with the right tools we can protect our communities.”  She added, “The CDC Heat and Health Index combines important data on heat and risk factors in the community to help local officials prepare for and respond to the health impacts of high temperature.”


Heat stress is a significant challenge among farmworkers who should be provided with access to shade, rest periods and adequate water.


Starbucks Considering Menu Innovation and Efficiency to Boost Profitability

For the recent quarter ending March 31st, Starbucks recorded a one percent decline in revenue, a comparable store sales drop of 4 percent and 14 percent lower earnings.  Company shares are down 25 percent year-to-date.


The current situation was reviewed in an analysts’ call hosted by Rachel Ruggeri, Executive Vice- president and Chief Financial Officer.  Ruggeri indicated that “although coffee is core to who we are” the Company intends introducing new baked foods including a blueberry muffin given that half of sales are generated before 10H00 in the morning, Starbucks may consider including more protein including eggs in their offerings. 


Generally, QSRs have concentrated on reducing the number of menu items to increase throughput and reduce waiting time by installing enhanced equipment, trained and well-motivated and renumerated workers and above all multiple drive-thru lanes.  How about a dedicated lane for standard fresh-brewed coffee with pointing to the display for “one of those”? This would avert standing behind an aficionado ordering an exotic brewStarbucks is essentially a store-front chain that caters to urban residents and commuters.  If Ruggeri wants to know how to improve her company performance, attract more customers she needs to spend less time on blueberry muffins and look at the long lines at airports and locations where commuters congregate. Inordinate waiting to attain “caffeine fix” but with limited time is not a business model to attract and retain customers.  A further restraint to increased traffic is the disinclination for commuters to pay exorbitant prices for coffee and breakfast items.  Keurig machines are now ubiquitous in offices and homes and offer standard and exotic brews with speed, convenience, and at a substantial lower cost. Then there is always ‘Dunkin or a clone!


Rachel Ruggeri CFO Starbucks CFO (right) interviewed on CNBC Squawk Box

It is difficult to envisage how Starbucks will be able generate a cost saving of $4 billion over four years operating 16,000 stores in the U.S. and 22,000 internationally by imposing a one-size fits-all approach to menus, pricing, and service. This is exemplified by China the fastest growing market for Starbucks. Home-grown competitors are expanding at a faster rate than Starbucks especially in second and third-tier metro areas with both coffee and teas accompanied by regional delicacies.


Kroger Company Posts Q1 FY 2024 Results

On June 20th The Kroger Company (KR) posted results for Q1 of FY 2024 ending May 25th 2024. Kroger beat on earnings but was light on sales compared to consensus estimates although reconfirming FY 2024 guidance.


Kroger is the second largest retailer of groceries in the U.S. and is a pure supermarket play subject to the pressures of escalation in food costs, logistics and labor and the impact of inflation in common with all national and regional competitors. Kroger has announced the intention of acquiring competitor Albertsons Cos. This would create a merged enterprise with 5,000 stores subject to FTC and DOJ approval but with inevitable divestment of some assets. To comply with anticipated regulatory pressure Kroger and Albertsons have proposed selling 413 stores in 18 states to C&S Wholesale Grocers for $1,900 million. This strategy is in question given the history of the bankruptcy of Hagen that divested stores to facilitate the acquisition of Safeway by Albertsons. The FTC, workers’ unions and numerous states have opposed the transaction with the possibility of prolonged litigation.


For the 1st quarter of FY 2024, Kroger reported earnings of $947 million on revenue of $45,269 million with a diluted EPS of $1.30. For the corresponding Q1 of FY 2023, Kroger earned $962 million on sales of $45,165 million with a diluted EPS of $1.33.  Comparing Q1 of 2024 with the corresponding quarter of 2022, revenue was 0.2 percent higher. Gross margin increased fractionally from 22.3 percent to 22.4 percent for Q1 2024. Operating margin declined from 3.3 percent to 2.9 percent for the most recent quarter.


In commenting on quarterly results, Rodney McMullen CEO stated, "Kroger is off to a solid start in 2024 led by better-than-expected performance of our grocery business” He added “Kroger is delivering exceptional value at a time when many customers need it more than ever, by providing affordable prices with personalized promotions. We appreciate our associates who are elevating the customer experience and improving store execution. Together, this is growing households and increasing customer visits”


He concluded “The long-term investments we have made to strengthen and diversify our model enables us to manage economic cycles and gives us the confidence to deliver on our full year outlook. By delivering value for customers and investing in our associates, Kroger remains well-positioned to generate attractive and sustainable returns for our shareholders."  


The Company retained FY 2024 Guidance:- 


  • Identical Store Sales growth of 0.6 to 1.0 percent excluding fuel, (was 2.5 to 3.5 percent)
  • Adjusted EPS of $4.50 to $4.60 (was $4.45 to $4.60) 
  • Adjusted FIFO Operating Profit of $4.9 billion to $5.0 billion, (was $5.0 to $5.2 billion)
  • Capital expenditure of $3,400 to $3,600 million
  • Adjusted free cash flow of $2,500 to $2,700 million


Comparable same-store sales for Q1 attained 0.5 percent (excluding fuel) compared to Q1 FY 2023; digital sales were up by 8.0 percent;

On March 25th Kroger posted total assets of $51,441 million of which $3,537 million comprised goodwill and intangibles. Long-term debt and lease obligations amounted to $20,867 million.  


The Kroger Company had an intraday market capitalization of $37,820 million on June 20th 2024.  The Company has traded over the past fifty-two weeks in a range of $42.10 to $58.34 with a 50-day moving average of $54.01. KR trades with a forward P/E of 11.7. On June 18th 2023 KR closed at $52.00 pre-release and fell to $50.91 on June 20th post-release at10H30.


Twelve-month trailing operating margin was 2.0 percent and profit margin 1.4 percent.  The Company generated a return on assets of 6.2 percent and 20.1 percent on equity


At the end of FY 2023 The Kroger Company operated 2,726 stores with 2,252 pharmacies and 1,613 fuel centers, under 25 banners in 35 states and D.C. Kroger operates 34 food plants and 45 distribution centers with five Ocado fully automated fulfillment centers with as many as twenty planned.


Selection of COVID Vaccine Strain for 2014/15

The Vaccines Related Biological Products Advisory Committee to the Food and Drug Administration voted unanimously to recommend a monovalent JN.1-lineage as the 2024 vaccine against SARS-CoV-2.  This decision was based on epidemiologic studies indicating the predominance JN.1. 


Manufacturers of vaccine for 2024-2025 will follow the FDA requirement with the updated vaccine available during the fall.  The adoption of mRNA technology for COVID vaccines allows for rapid selection of this strain to optimize antigenicity.


Moderna is currently testing a bivalent COVID and influenza mRNA vaccine that would prove convenient if approved to establish immunity to both of the seasonal strains of the diseases as a single dose administered each fall.



USPOULTRY Course on Worker Protection From HPAI

In a June 10th release, USPOULTRY will present a training course The Safe Response to Highly Pathogenic Avian Influenza.  The course includes instruction on the use of Personal Protective Equipment (PPE), decontamination, disposal of flocks and safety precautions. 


The course is available free of charge to USPOULTRY members by accessing the website <>  or contact Matt Spencer at



Pathogenicity of Human Isolate H5N1 In Ferrets

The U.S. Centers for Disease Control and Prevention reported that the avian influenza/bovine influenza H5N1 genotype B3.13 isolate obtained from a worker on a dairy farm in Texas in March was fatal to ferrets, a standard laboratory host for influenza viruses.  In contrast, human seasonal influenza produces characteristic clinical respiratory signs in ferrets but is not lethal.  It was however determined that the H5N1virus was less efficient at aerogenous spread than seasonal human influenza A strains but direct ferret-to-ferret transmission was confirmed. 


According to the CDC the finding in ferrets was not surprising but does not change the risk assessment that the virus is currently not generally infectious for humans.  A number  of mutations would be required for the virus to spread efficiently by droplets through the air.  This is the reason why virologists are analyzing the genomes of isolates derived from dairy cows, poultry flocks, marine and terrestrial animals, and the few human cases to date. It is important to detect changes that would predispose to a zoonotic strain in order to implement preventive modalities including PPE, biosecurity and vaccination.


ADM Expands Recall of Specialty Feeds

ADM Animal Nutrition is extending the March 30th recall to cover horse, lamb, cattle and camelid feeds.  This is in addition to previously recalled diets for chickens, hogs and rabbits.


At issue are excess levels of minerals including magnesium, sodium and phosphorus.  Recalled feed will be replaced or a refund will be extended to customers.


Corn Silo Failure, Tyson Foods Sedalia, MO. Mill.

Tyson Foods experienced a failure of a corn storage silo at their Sedalia, MO. feed mill on June 7th.  Fortunately, there were no injuries, and the collapse was attributed to structural failure.  The event resulted in management having to cease operations until temporary repairs could be completed. 


The incident points to the need to regularly inspect silos, bins, elevators and other structures that may be impacted by weather extremes, especially with the advent of the hurricane season.  Regular evaluation by a qualified engineer is recommended especially for older structures where corrosion may have reduced structural integrity.


Mandatory Testing of Cows Entered into Fairs and Exhibits

The Wisconsin Department of Agriculture Trade and Consumer Protection is requiring lactating dairy cows to be tested for influenza A before movement to fairs and exhibits.  This action has been taken following diagnoses of bovine influenza-H5N1 on close to 100 dairy herds in twelve states to date.


Given the importance of movement of live cattle in the dissemination of H5N1 among dairy herds, it is questioned why state fairs and exhibitions should accept dairy animals irrespective of age.  It is general practice to cease exhibiting poultry under conditions of high risk for avian influenza.  Cattle consigned to fairs and exhibits may be influenza-negative at the time of arrival but may be infected by an undetected avian or bovine case and then carry virus back to the home farm.  The low risk of possible human infection should be weighed against the profound consequences of an occurrence suggesting prudence in exhibitions in 2024.


In addition to H5N1 infection in commercial herds and flocks, the virus is now widespread among domestic free-living birds, small mammals including ubiquitous mice and is no longer limited to migratory waterfowl thereby increasing the risk of infection.


Producers’ Associations Support EPA Over CAFOs

This past week, associations representing commodity groups filed briefs supporting the EPA.  They included the National Pork Producers Council, American Farm Bureau Federation, USPOULTRY and United Egg Producers. This unusual situation results from litigation over Concentrated Animal Feeding Operations (CAFOs)


A number of environmental advocacy groups including Food and Water Watch, Center for Food Safety and the Center for Biological Diversity have sued the Environmental Protection Agency (EPA) over alleged lack of enforcement of regulations relating to emissions and pollution allegedly generated by CAFOs.  The EPA responded to the February filing by the various environmental groups with a May response justifying their position and rejecting suggested reforms.  The Agency requires more time (don’t they all!) before framing new regulations.


Environmental activists find common cause with opponents of intensive livestock production intent on restricting efficient production of food, irrespective of the consequences on supply and cost. Action by these groups generates publicity, assists in their national fundraising and imposes additional effort and legal costs on livestock producers ultimately passed on to consumers and shareholders.


El Nino Ends

With the current termination of the 2023-2024 El Nino event, the Southern Oscillation has entered a neutral phase before transitioning to a La Nina event.  It is expected that this change will occur rapidly during the summer with an obvious La Nina during the fourth quarter.


The recent strong El Nino has resulted in high ocean temperatures and unseasonably warm weather in the southwest of the nation.  The intensity of the El Nino may have been influenced by global warming.


Meteorologists anticipate high temperatures and lower rainfall in the western and plains states leading to drought.  The transition to a La Nina will also intensify hurricanes in the Gulf and along the eastern seaboard.  The change in the latitude of the jet stream as a result of the declining El Nino will create greater vulnerability to hurricanes many of which will make landfall instead of being moved out into the Atlantic.  Oceans represent an important heat sink and have been warming steadily over decades as carbon dioxide concentration and pH have changed to the detriment of reefs and coastal areas.


The implications for agriculture are self-evident.  Conservation of water will become more critical and farming practices and crops will have to be altered to accommodate warmer weather and depletion of aquifers.


Additional information on Southern Oscillation events can be obtained by entering El Nino in the SEARCH block.


Food-4-Less Workers to Strike

The Food 4 Less banner is now in conflict with United Food and Commercial Workers Union Local 770.  This subsidiary of the Kroger Company is facing a strike following a vote taken by 6,000 members on June 14th following the expiration of their contract.


Comparisons between the Food-4-Less and Ralph’s chains under common ownership, indicate lower wages and lower benefits, fueling the labor action.


Given concerted opposition to the Kroger-Albertsons merger it would be appropriate for Kroger to be more accommodating to their Food-4-Less employees. Intransigence over wages and benefits belies the promises made to support unions as a condition of the proposed merger.



Starbucks to Introduce “Value” Promotion

Starbucks has introduced a Pairings Menu comprising either coffee or tea with a croissant at $5 or a breakfast sandwich for $6.  The promotion commenced on June 11th and represents a departure from previous menu pricing.  Rachel Ruggeri Executive vice president and CFO of Starbucks noted, “More recently what we are seeing is headwinds related to our customers, particularly our occasional customer largely as it relates to the awareness of what we have and the perception of value.”


Starbucks has reported lower earnings, less traffic and a decline in consumer loyalty.  In an investors conference, Ruggeri observed that “Although Starbucks is focused on recovery of traffic, particularly from the occasional customer it will take some time to fully recover, and the results will only be visible in Q4 and beyond.”


Extent of Cucumber-Related Salmonella Infection Emerging

Federal reports have documented 381 cases of either Salmonella Africana or S. Braenderup infection attributed to consuming contaminated cucumbers grown in Florida.  Of 164  investigated cases, 68 have required hospitalization among those infected with S. Africana. As with all foodborne Salmonella outbreaks, the actual number of affected patients may be 30-fold greater than diagnosed cases.


The outbreak was recognized on March 11th with the most recent cases diagnosed on May 23rd.  It is believed that product that was recalled is now beyond the age of expected consumption.


Foodborne infection associated with leafy produce, fruit, nuts and vegetables can be prevented by application of available technology that effectively functions as a kill-step at the time of packaging.  Electron beam and cold plasma equipment is available.  Alternative pre-harvest modalities including “testing” irrigation water are regarded as “make belief” attempts at prevention and do little more than provide a false sense of security especially if producers can claim compliance with some federal, state or association preventive measures.




Ahold Delhaize to Close Underperforming Stop & Shop Stores

J.J. Fleeman, CEO of Ahold Delhaize USA announced that a number of underperforming Stop & Shop locations would be closed. Specifics on locations and timing will be made later in the year.  Ahold will rely less on number of locations and more on a “growing together" strategy with an emphasis on technology, automation, and an omni-channel approach to sales.  A combination of in-store apps and websites favors mature markets in affluent areas.


Ahold Delhaize operates 397 stores in the U.S. although the number to be closed has yet to be revealed.  The parent company in Holland anticipates saving $5 billion over the proximal four years by application of technology inherent to the adopted “growing together” strategy.



U.S. Farmers’ Associations Recognize Vulnerability of Exports to China

U.S. farmers’ associations have asked policymakers not to involve food in a trade war with China.  This is a forlorn hope. Stan Born, Chair of Trade Policy and International Affairs Advocacy for the American Soybean Association, noted, “I have gone to Washington, D.C. and I talked to senators and representatives. I always emphasize the business of our food.  This is one area that we should keep separate and keep it clean and not use it as a hammer.”  His comments reflect growing concern over volumes of agricultural exports to China, a significant buyer of corn and soybeans.


The American Soybean Association cannot hope to continue exporting to China against existing punitive tariffs and the threats of escalation with a different Administration.  Even with a level playing field, Brazil can produce and ship to China cheaper than the U.S.  Corn, soybean and sorghum farmers should recognize the realities of extreme competition and trade barriers and plan accordingly.  For consecutive calendar years 2017 through 2019, the U.S. supplied 34 percent of soybean requirements for China amounting to 95.5 million metric tons.  This was followed by a decline to 17 percent of 88.5 million metric tons in 2018 and 16 percent of 88 million metric tons in 2019.  Subsequent to establishing the Phase 1 Trade Agreement, it was anticipated that China would import 95.0 million metric tons during the 2020/ 2021 market year but in reality only 16 million tons was shipped through August 2021.  For the current market year to date, cumulative exports of 40 million metric tons of soybeans to all recipients with China as the major importer, are 17 percent lower compared to the equivalent week of the previous market year.  In contrast, corn exports have attained 40 million metric tons, 24 percent higher compared to the equivalent week of the 2022-2023 market year.

Even if all things were equal and there were no punitive tariffs or commercial conflict, China would favor Brazil and other South American nations for supplies of corn and soybeans.  The situation becomes even more difficult with an ongoing trade war and extreme competition and attempts at political and military one-upmanship.


This situation is completely beyond the influence of commodity producers’ associations, and this reality should be taken into account with respect to planting for the 2025 season.


Should exports fall further from current production levels, there will be a reduction in the price of soybeans even with diversion to biodiesel.  Ultimately, this will benefit all segments of livestock production.  A similar situation pertains to corn, the price of which is artificially supported by production of ethanol that represents a tax on all who eat and drive.

Dr. Simon M. Shane
Simon M. Shane
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