Editorial


Tetrick Reinvents His Company

04/12/2018

In an address to the Future Food-Tech Convention on March 22nd, Joshua Tetrick the controversial founder and CEO of a company with serial iterations (Beyond Eggs, Hampton Creek Foods, Hampton Creek) announced that the new name will be Just Inc. Traditionally strong on hype and promises, Tetrick apparently presented a more moderate tone in his address admitting to “colossal mistakes” and attempting to introduce too many products.

He still has pretentions of changing what food the world consumes, claiming that eating well is a basic right. An avowed vegetarian, he is basing the future of his re-born company on mung beans.

Tetrick appears to be moving offshore for investors and customers with recent publicity related to a vegetarian-egg substitute offering from Hampton Creek in Hong Kong. Now a West African porridge product has surfaced. Tetrick also dangles the prospect of his company producing large quantities of cell-cultured meat. In this respect, he is far behind established, credible companies including segment leader Memphis Meats. This enterprise has earned support from venture capital providers through transparency and by demonstrating technical feasibility to produce laboratory-level quantities of a beef alternative, albeit at an exorbitant price.

Despite establishing his enterprise in 2011, Tetrick has very little to show commercially for his efforts other than ersatz mayonnaise. More importantly, what return has he produced for the hundreds of millions of dollars of claimed investment over six years?

Three years ago, EGG-CITE, the predecessor of EGG-NEWS, commented on the parallels between Tetrick and the various evolutions of his company and the fate of Elizabeth Holmes and Theranos. Both company founders promised to “disrupt” their respective markets. Tetrick promised to displace hens and enhance welfare and sustainability. Seven years later we still have 320 million hens in production. The black box “Edison” blood analyzer of Theranos was intended to make phlebotomy obsolete but proved to be a scam. The pronouncements of both founders were accorded considerable publicity and articles by fawning journalists emphasized the personalities, claimed supporters and the unconventional approaches of the founders. Both companies were characterized by executive and employee churn and secrecy with respect to R&D and proof of principle. Neither Hampton nor Theranos were willing to subject their claims to third-party scrutiny. In the case of Theranos, reality came home in a blizzard of Federal actions and shareholder claims of deception as the Company was shown to be a sham. To quote the late Bernie Cornfeld, founder of Investors Overseas Services, Theranos was an enterprise “based on a firm foundation of quicksand and hype”

Questions swirl around Hampton Creek and Just, Tetrick’s newly-hatched entity. Who actually owns the company? Does it still have connections with HSUS which provided seed funding? Have funds raised by Tetrick ever been used to benefit either HSUS or its discredited executives? Tetrick has a lot to explain over and above technical claims and promises to revolutionize food production and to make livestock obsolete. Investors and industry observers need more than excuses, a mea culpa and explanations for the deviations from accepted business practice. The outstanding imperative is to explain how millions of dollars of venture capital was expended and what Beyond Eggs/Hampton/Just has to show for the seven-year claimed research and development program.


 

Egg Industry News


STOP PRESS

04/19/2018

  • FDA “Leaking” Reports on Rose Acre Hyde County, NC. Complex: Bloomberg reported on apparent deficiencies in rodent and fly control and unacceptable operational biosecurity and deficiencies in hygiene at the complex. The Hyde County operation is the subject of a product recall associated with an apparent outbreak of Salmonella Braenderup. The information was derived from FDA inspection reports. This situation is reminiscent of the daily FDA releases issued following FDA evaluation of the farms operated by Jack DeCoster in 2010 consequent to an extensive SE outbreak.
  • GAO Urges FSIS to Address Pathogen Standards: The Government Accountability Office at the request of four Senators, issued a report aimed at motivating the FSIS to impose pathogen standards for products, establish a time-frame for implementation and to reduce contamination levels on hog and turkey products.
  • Bill Gates Urges Application of Gene Editing Technology to Reduce Populations of Malaria- vector Mosquitoes: Application of CRISPR gene editing could reduce populations of mosquitoes carrying malaria in Africa. More effective control could reduce the annual death toll in children by 400,000
  • STEC Outbreak from Romaine Lettuce Widens: The apparently virulent strain of E.coli associated with Romaine lettuce from the Yuma Valley of Arizona is now responsible for 53 diagnosed cases in 16 states with a case-hospitalization rate of 59 percent.
  • Albertsons Group “Squeaks” Profit for FY 2017:  The 2,318-store supermarket chain owned by Cerebrus Capital Management posted a net profit of $46.3 million on sales of $59 9 billion. Net profit included a non-recurring tax benefit of $373 million claimed in Q4.

 

Export of Shell Eggs and Products January-February 2018.

04/13/2018

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January-February 2018 with the corresponding period in 2017:-

PRODUCT

Jan.-Feb. 2017

Jan.-Feb. 2018

Difference

Shell Eggs

     

Volume (m. dozen)

18.0

17.6

-0.4 (-2.2%)

Value ($ million)

17.3

21.2

+3.9 (+22.5%)

Unit Value ($/dozen)

0.96

1.20

+0.24 (+25.0%)

Egg Products

 

 

 

Volume (metric tons)

6,250

6,485

+235 (+3.8%)

Value ($ million)

16.8

23.7

+6.9 (+41.1%)

Unit Value ($/metric ton)

2,688

3,654

+966 (+35.9%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS IN JANUARY-

FEBRUARY 2018 COMPARED WITH JANUARY-FEBRUARY 2017

Source USDA-FAS/USAPEEC


 

Updated USDA Projections for 2017 and 2018 Egg Production

04/16/2018

The USDA Economic Research Service issued an updated April 16th 2018 forecast of egg production. The volume of eggs produced and per capita consumption were increased by 1.5 and 1.2 percent respectively over 2017. Notwithstanding this disparity the benchmark New York price was increased by a third in unit value Production data reflecting 2016 and 2017 should be compared to 2015 which was impacted by the Spring outbreak of HPAI in the upper-Midwest.

 

Parameter

2015 (actual)

2016 (actual)

2017 (revised)

2018 (Projection) Delta ’17-‘18

EGGS

       

Production (m. dozen)

6,938*

7,435

7,677

7,790 +1.5%

Consumption (eggs per capita)

256.3*

275.7

274.2

277.4 +1.2%

New York price (c/doz.)

182*

86

101

136 +34.6%

Source: Livestock, Dairy and Poultry Outlook – April 16th 2018

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

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


 

USDA Weekly Egg Price and Inventory Report, April 18th 2018.

04/18/2018
  • Hen Numbers in Production Down 0.9 million to 316.4 million.
  • Shell Inventory up by 4.5 Percent Post-Easter.
  • Generic Prices Down 38 Percent from Previous Week.

OVERVIEW

According to the USDA Egg Market News Reports posted on April 16 th the Midwest wholesale prices for Extra Large and Large were down 38 percent from the previous week and Mediums fell 30 percent. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The April 13th USDA Egg Market News Report (Vol. 65: No. 16) documented a USDA Combined Region value of $2.14 per dozen delivered to warehouses effective April 9th. This price lags Midwest Weekly values by one week. The USDA Combined range for Large, in the Midwest was $2.05 per dozen. At the high end of the range, the price in the South Central Region attained $2.22 per dozen. The USDA Combined Price last week was 125 cents per dozen above the three-year average.

The number of producing hens this week was down by 0.9 million to 316.4 million following depletion of second cycle flocks and molting of older first-cycle flocks held in production for pre-Easter sales. The hen population is more than adequate to meet early Spring seasonal consumer and industrial demand but any number above 315 million portends lower prices and increased inventory going forward into mid-to late April. The total U.S. egg-flock comprises 322.1 million hens including 2nd Cycle birds and those in molt on all farms.

Generic shell-egg stock rose by 4.5 percent to 1,412,600 cases following an increase of 4.8 percent for the previous week. To maintain prices the market will have to find a balance between supply and demand as the Industry moves into the second quarter, generally characterized by low prices.

Dried-egg inventory declined 10.9 percent to 14.7 million lbs. (6,680 metric tons) as of March 31st 2018 (was 16.5 million lbs. on February 28th 2018)

The National stock of frozen egg products as reported by the USDA on March 22nd 2018 attained 32.61 million pounds (14,822 metric tons) on February 28th 2018 down 20.6 percent from February 28 th 2017.


 

WEEKLY COMMODITY REPORT

04/19/2018

According to the April 10th 2018 WASDE #576 release, 82.7 million acres of corn will be harvested in 2018 to yield 14.60 Billion bushels. The soybean crop is projected to attain 4.39 Billion bushels from 89.5 million acres harvested. These values are unchanged from the March WASDE report.

 

On Wednesday April 4th 2018 by 11H30 EDT soybeans had fallen 4 percent on the CME, in response to threatened imposition of embargos by China on U.S. commodities.  During the past week the reality of a trade confrontation receded with a consequential restoration to customary prices reflecting supply projections, domestic use and export data. 

 

Corn stocks were estimated by USDA in early April to total 8.9 Billion bushels and Soybean stocks 2.1 Billion bushels

 

The following quotations were posted by the CME at close of trading on Thursday April 19th compared to values for April 13th in parentheses.

 

COMMODITY

 

Corn (cents per bushel)

May ’18    381  (385)        

July  ‘18     390  (394)            

Soybeans (cents per bushel)

May ’18 1,037  (1,052)    

July  ’18  1,049  (1,063)      

Soybean meal ($ per ton)

May ‘18     373  (382)

July ’18      378  (386) 

 

 

Changes in the price of soybeans and soybean meal this week were:-

Corn:                     May quotation down 4 cents per Bu.              (-1.0 percent)

Soybeans:            May quotation down 15cents/Bu.                   (-1.4 percent)

Soybean Meal:    May quotation down $9/ton.                            (-2.3 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 0.40 cent per dozen

 

The cost of broiler production would change by 0.25 cent per pound live weight

 

See WASDE posting under the STATISTICS tab summarizing the April 10th USDA-WASDE Report #576, reviewing price projections and quantities of commodities to be produced, used and exported during the 2018 season.


 

Progress of Farm Bill Imperiled by SNAP Dispute

04/14/2018

House Speaker Paul Ryan (R-WI) will unveil a Farm Bill incorporating work conditions for recipients of SNAP and related benefits. The proposal will require able-bodied adults between 18 and retirement age without children to work in order to be eligible for food stamps. In high unemployment areas, recipients will have to undergo job retraining for at least 20 hours per week.

 

Generally the House Agricultural Committee operates in a bipartisan manner. The SNAP work requirements however has divided the committee along party lines and will evidently impede progress on the $900 billion Farm Bill, which must be enacted before the current Legislation expires in September. The bill envisages savings exceeding $100 billion in entitlements.

 

Ultimately, a compromise will be reached, but in addition to the major consideration relating to entitlements, numerous amendments will be proposed requiring the usual 11th hour horse trading and compromise. As Mark Twain observed, it is not a pleasant experience to watch either sausages or law being made.


 

Chipotle Mexican Grill Announces Landfill Diversion Program

04/15/2018

Currently Chipotle Mexican Grill operates with a 40 percent diversion from restaurants to landfills. The company intends increasing the proportion to 50 percent by 2020. Practical measures implemented in restaurants include:

  • Minimizing food waste during preparation
  • Adjusting food preparation to anticipated sales to reduce waste at the end of the day
  • Recycling and in-store composting including biodegradable packaging
  • Participation in food donation programs

The landfill diversion program will be monitored by a coordinator in cooperation with RiverRoad Waste Solutions.


 

Kroger to Expand Workforce

04/15/2018

According to an article in the April 11th edition of The Wall Street Journal, The Kroger Company will hire 11,000 additional workers to be located in 2,800 supermarkets. The new positions will include cashiers, produce clerks and workers involved in on-line grocery-pick up operations. The initiative is part of a three-year plan to upgrade existing stores and to enhance customer service.

Tim Massa, Group Vice President of Human Resources and Labor Relations at Kroger, commented on the need for extra workers in an increasingly tight labor market.

In an endeavor to compete with Walmart, Target and other retailers, Kroger will spend $500 million on enhanced compensation including higher starting wage and other benefits.


 

USCIS Upgrades E-Verify Website

04/15/2018

The U.S. Citizenship and Immigration Service (USCIS) has introduced a new website            www.e-verify.gov.

The website incorporates information concerning E-Verify and Form I-9, Employment Eligibility Verification. The website also outlines employer responsibilities and employee rights.  

In commenting on the website, USCIS Director L. Francis Cissna stated “For the past decade,    E-Verify has been the cornerstone of our continued commitment to helping employers maintain a legal workforce. <E-Verify.gov> now allows uses to better understand and navigate through the employment verification process.”

In terms of the April 18th Buy American and Hire American Executive Order, employers must verify all new hires through E-Verify. The system, which now has 800,000 enrolled employees, can confirm eligibility to work either instantly or within 24 hours.

In the past, problems have arisen identifying workers through submission of I-9 forms. Problems include incorrect initials and spelling of family names and defects in the database. The USCIS has worked consistently to resolve anomalies and problems.


 

Cargill Announces Expansion of Big Lake, MN Processing Plant

04/15/2018

In an April 11th press release, Cargill Inc. will invest $20 million to expand the Big Lake, MN. egg processing facility. The expansion will include equipment for pasteurizing, cooking and food service items and is scheduled for completion in January 2019.

In commenting on the expansion, Jared Johnson, General Manager of the Big Lake plant stated “We continue to invest in the traditional protein space to provide our food service and food ingredient customers innovative, high-quality cooked egg products.” He added “This investment underscores our ongoing commitment to the Big Lake community and our employees, egg suppliers, restaurant and food service customers throughout the upper Midwest.

Cargill operates egg processing facilities in Monticello, MN.; Mason City, IA.; Lake Odessa, MI. in addition to the Big Lake plant.

During the past two years, Cargill has invested $900 million in the protein business in North America including $27 million for Lake Odessa and $12 million for Mason City in 2016 and 2017 respectively.

According to the Cargill release, “when the expansion is completed, annual requirements for eggs from family farms in the area will be 170 million”. This figure must be incorrect since it corresponds to a complement of only 600,000 hens.


 

Peapod Reduces Prices for Delivery

04/18/2018

Peapod, a subsidiary of Ahold Delhaize USA, has revised delivery subscriptions and introduced discounts on grouped products in an attempt to retain customer goodwill over the long term.  Innovations include:

  • PodPass MidWeek: this program will offer free deliveries on Tuesday, Wednesday or Thursday for a $55 annual subscription.  The program is available for a six-month subscription for $35.
     
  • Bulk Buying Discounts: discounts are offered for bulk purchases including mix-and- match within a category.
     
  • Savings Bundles Discounts: lower prices are offered on the purchase of related products within groups.
     
  • Featured Savings: price reductions on generic and organic produce, dairy and meat will be offered on a changing daily basis.
     
    In an endeavor to improve customer service, the company has refined the “Ask Peapod” function using Alexa and has introduced an order-by-text platform.

 

March Wholesale Prices Increase by 0.3 Percent

04/18/2018

On Tuesday April 10th, the Department of Labor announced that the Producer Price Index rose 0.3 percent in March following increases of 0.4 percent in January and 0.2 percent in February.  Major contributors to the increase included food which rose 2.2 percent but was partly offset by energy costs which were lowered by 2.1 percent.

 

Economists interpret the trend for the first quarter of 2018 as indicating increased inflation pressure.

 

 


 

Iowa Board of Regents Authorizes Naming of Poultry Science Facilities

04/18/2018

Although an appropriation has not been approved for the proposed Iowa State University Poultry Research facility, the Board of Regents has approved the naming of components.  The proposed facility will replace an existing series of buildings and laboratories erected in the 1960’s.

 

The research and instructional unit will be named the “Robert T. Hamilton Poultry Teaching and Research Farm.”  This designation follows a request of $3 million to the College of Agriculture and Life Sciences by the spouse of the late Robert Hamilton. 

 

The building to house hens will be named the “Iowa Egg Council Layer Research Facility”. This recognizes a $1.5 million grant from the Iowa Egg Council.

 

The unit devoted to aspects of breeding will be named the “Hy-Line Genetics Research Building” in honor of a $500,000 commitment from Hy-Line International and Hy-Line North America.

 

Authorization of $5 million in capital expenditure for the project is expected, given the importance of Iowa as the leading egg-production state in the U.S.  The proposed facility will allow Iowa State University to be more competitive in attracting Federal research funds and qualified faculty and graduate students.

 

 It is noted that poultry research at Iowa State is supported by other departments in the College of Agriculture and Life Sciences with specialists in engineering, and economics. Proximity to the College of Veterinary Medicine and the National Veterinary Research Laboratory operated by the USDA offer opportunities for collaborative synergy.


 

Commentary


USDA Overrules NOSB Ruling on Carrageenan

04/08/2018

According to the April 4th edition of the Federal Register, carrageenan will remain on the list of additives permitted in food products certified under the USDA organic program.

Carrageenan is extracted from seaweed and is a non-synthetic stabilizer added to products containing oils.

The National Organic Standards Board ruled 10 to 3 to remove carrageenan from then National List. There was no scientific justification for the exclusion and the NOSB maintained that xanthan gum was a suitable substitute. This contention was opposed in public comment which confirmed that carrageenan, a natural product cannot be effectively replaced by gums based on changes in texture, taste or other attributes.

 In commenting on the reversal of the NOSB, Michiel Van Genugten, manager of Seaweed Extracts and Colors owned by DuPont Nutrition and Health stated “We commend the USDA for taking seriously its responsibility to review the NOSB recommendation and make a decision based on facts and science.” He added “This decision will allow organic food producers to continue to use a safe, versatile ingredient.”

Predictably, Consumers Union, the advocacy arm of Consumer Reports opposed the decision stating “The USDA decision to ignore the NOSB recommendation raises serious concerns about the future of the organic label.” During the past decade this organization has promoted “healthful and natural” to the exclusion of reasonable evaluation. The tone of public comments and articles is progressively opposed to intensive livestock production and packaged foods. Consumer Reports performed a more valuable service when it rated toasters and lawnmowers!


 

Sponsored Announcements


Advantages of Standardized Rotational Rodent Baiting

04/18/2018

The House Mouse, Norway Rat and Roof Rat are the three primary rodents found in poultry production facilities. Each of these species is responsible for disease transmission, feed loss, environmental contamination and damage to buildings. The control of these destructive rodents is an important financial, food safety and welfare concern for managers.

Managers selecting rodent control options should recognize that rodent species display different taste preferences.  Therefore, baiting programs should offer a broad range of rodenticides with different flavors, shapes, textures and active ingredients for effective suppression of populations. Integrators with multiple complex locations need to consider the advantages of applying a Standardized Rotational Rodent Baiting program.


 

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Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.