Editorial


The Need for Rapid COVID Tests

With the ongoing surge in incidence of COVID cases affecting both rural and urban areas, it is considered essential that the U.S. should have available a rapid home-deployable, inexpensive test kit to provide results within minutes, without requiring any form of reader or equipment other than perhaps a cell phone.

 

In recognition of the imperative to have rapid tests available, the National Institutes of Health is investing $250 million in technology to detect SARS-CoV-19 the virus responsible for COVID-19.  This is in recognition of the futility of having potentially exposed individuals in a community having to wait for up to to three days for a test and then enduring a turnaround time of 3 to 12 days.  The purpose of testing is to identify potentially infective individuals, irrespective of systems so that they can be quarantined and their contacts can be traced.  This is especially relevant given the imminent reopening of schools, businesses and entertainment.

The National Institute of Biomedical Imaging and Bioengineering (NIBIB), within the National Institutes of Health, is tasked with developing and accelerating the application of biomedical technology.  The NIBIB will undertake implementation of the RADx Advanced Technology Program coordinating federal agencies and industry.

 

Recently Alex Azar, Secretary of the Department of Health and Human Services, stated, “RADx has moved quickly to select promising technologies through its ‘Shark Tank’ approach investing in technologies that could boost America’s COVID-19 testing capacity.”  He added, “These technologies will help deliver faster results from labs and more and more test results within minutes at the point of care, which is especially important for settings like schools and nursing homes.”

 

Dr. Francis S. Collins, Director of the NIH, commented, “The RADx initiative has enabled some of the nation’s most creative biomedical device inventors to ramp up development of their testing technologies at unprecedented speed.”

 

Current tests under development are classified according to point-of-care or laboratory-based systems.

 

The point-of-care devices comprise:

  • Mesa Biotech has developed the Accula SARS-COV-2 test using RT-PCR that can detect viral RNA using a removable cartridge with a 30 minute response time.
  • Quidel will market the Sofia SARS antigen lateral flow immunoassay kit requiring an analyzer, but providing results within 15 minutes. Sofia analyzers are currently in use.
  • Talis Biomedical point-of-care kit uses a multiplex cartridge detecting viral antigen applying isothermal amplification of viral RNA through an optical detection system, yielding a result in 30 minutes.

 

The laboratory-based tests include:

 

  • Ginkgo Bioworks applying next-generation sequencing technology.  The company intends providing seamless sample collection and reporting of results within 48 hours with a projected throughput of 100,000 tests per day by December.
  • Helix OpCo will apply next-generation sequencing to process up to 100,000 samples per day by December with a 48 hour turnaround.
  • Fluidigm, their BioMark HD microfluidics employs an integrated fluidic chip.  Existing fluidigm instruments are installed in research laboratories and it is anticipated that the company will be able to process 100,000 tests per day by the fourth quarter of 2020.
  • Mammoth Biosciences Inc applies CRISPR technology to provide faster assays compared to PCR.

 

Point-of-care tests are acceptable for hospitals, physicians’ offices, and senior homes.  Laboratory assays require collection and submission of specimens and a system to inform patients of their results.  Both approaches presume either presentation at a medical facility, or a delay following submission of a specimen.  The obvious advantages of a low cost test are self -evident even if it lacks sensitivity,.  It is indeed disappointing that NIH, through the NIBIB, has not seen fit to allocate part of the $1.5 billion received to develop a lateral flow immunoassay kit, similar to a pregnancy or influenza test.  It is hoped that this deficiency will be overcome either by government support or entrepreneurial initiative.


 

Egg Industry News


COMMODITY REPORT: JULY 31st 2020.

  • The financial and economic implications of the COVID-19 pandemic continue but will gradually ease as society returns to a “new normal” despite a recent serious upsurge in cases.
  • Corn and soybeans fluctuated in price this past week. Corn reverted to late June price after orders placed by China and undisclosed importers over the past four weeks amounting to 3.58 million metric tons (141.2 million bushels). Orders for soybeans amounted to 6.69 million tons (245.5 million bushels).
  • Prospects for commodity exports to China at the beginning of the 2020/2021 market year have improved. China may have reduced their domestic short-term demand for soybeans as a result of continuing losses from African swine fever but chicken production has now recovered. China is also taking advantage of low shipping rates. The Baltic Panamax Index decreased from 1,000 in January to 800 in June but is now rising. There is concern in China regarding future disruption in consigning commodities due to COVID-19. Shipments have been embargoed on arrival due to COVID-19 among crews.

 

Uncertainties still include:-

  • Whether China will satisfy obligations in terms of the Phase One Trade Agreement during 2020 is still in question. The Agreement signed in mid-January incorporated U.S. tariff rescissions, promised purchases of agricultural commodities (valued at $36.5 billion in 2020 and $43.5 billion in 2021), concessions on some structural issues by China and strengthened enforcement provisions. The Phase-One Trade Agreement still appears intact despite negative comments by White House advisor, Dr. Peter Navarro who issued a subsequent “correction”. Given the prevailing political and diplomatic factors conditioning relations between China and the U.S., Phase-Two is effectively dead.
  • Domestic U.S. soybean and soybean meal demand is now less constrained by cutbacks in the intensive livestock and poultry sectors as impacted by COVID-19.
  • Justifiable uncertainty exists regarding the spread of African swine fever and COVID-19 to other Asian nations, Europe and North America with the potential to create a worldwide depression as economic activity is curtailed

 

Questions still exist:-

  • The eventual sizes of corn and soybean crops will influence price going forward. Yields of corn and soybeans will be impacted by emerging drought and excessive temperature in the corn-belt. Projections were updated in the July WASDE released mid-month and are retrievable under the STATISTICS section of this newsletter. Weekly crop progress reports are posted on CHICK-NEWS and EGG-NEWS
  • A U.S. trade agreement with the U.K. should be concluded in 2020 but trade with the U.S. will be conditioned by existing commitments to the E.U. Negotiations commenced in early January between Ambassador Robert Lighthizer and his U.K. counterpart, Minister Elizabeth Truss and are continuing at appropriate levels in working groups. A bilateral agreement will have to incorporate U.S objections over the use of Huawei communications equipment by the U.K. that now appears likely. The application of chlorine (only five percent of U.S. plants) and alternative anti-bacterial solutions such as peracetic acid in processing U.S. chicken and also feeding beta agonists to livestock must be resolved.

 

USDA DATA ON JULY CAGE-FREE PRODUCTION

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, summarizing the information posted weekly in the EGG-NEWS Egg Weekly Price and Inventory Report.

The USDA Cage Free Report for the month of July 2020 released on August 3rd 2020 documented a static population of hens producing under the Certified Organic seal at 15.8 million, up 0.1 million from the average in Q2 2019. Cage free flocks increased by 0.6 percent in July from the previous month to 63.0 million representing an 11.9 percent increase from the average during the first quarter of 2020. The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters.

Average flock production was maintained at 78.5 percent for both categories of non-caged hens reflecting the balance between older flocks and the higher relative production from chicks placed during January and February 2020.

Flock size July Av. Q2 (million hens) 2020 2020

Av. Q1

2020

Av. Q3 2019

Av. Q2 2019

Certified Organic 15.8 15.7

15.7

16.2

15.8

Cage-free hens 63.0 61.5

56.3

54.5

52.0

Total non-caged 78.8 77.2

72.0

70.7

67.8

Average weekly production (cases). July June

Certified Organic

241,360 241,360; no change

Cage-free

962,083 955,367; +0.7%

Total non-caged

1,203,443 1,196,727; +0.6%

Average Wholesale Contract Price Cage-Free Brown

$1.53/doz. ($1.53 Sept.’19 through June‘20)

Range:

$1.15 to $2.10/doz. (unchanged)

FOB Negotiated price, grade quality, nest-run, loose

Price range $0.63 to $0.75 per dozen

Average Value of $0.67/doz. (was $0.78 June.)

Average Advertised National Retail Price C-F, L, Brown

$2.44/doz. (was $2.32 June 2020)

USDA 6-Regions

High: NE

$2.78/doz. $2.91 (NE.)

Low: MW

$2.28/doz. $1.99 (SE.)

Based on the importance of cage-free production, the USDA-AMS issues their report on volumes and prices at monthly intervals for the information of Industry stakeholders. There is some doubt as to the accuracy of the individual monthly flock numbers especially when reports show either no change in the cage-free flock for sequential months or a large difference for the preceding month after the end of a quarter. It is suggested that USDA consider a quarterly report with more accurate and consistent data to be more useful to the industry.

 

Subscribers are referred to weekly USDA wholesale and retail prices posted in the EGG-NEWS Egg Price and Inventory Report E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.


 

Record Exports of Corn and Soybean in July

USDA estimates that corn sales to China in July will exceed seven million tons (276 million bushels).  In past years, July sales attained on average five million tons (197 million bushels).  On Thursday, July 30th, China placed orders for 1.9 million tons of corn following a previous large order on July 14th of 1.7 million tons.  Purchases of corn by China during the 2020-2021 market year attained 3.8 million metric tons as of July 23rd out of a total of 5.7 million tons (225 million bushels).  Japan normally purchases two million metric tons during the market year and Mexico purchases approximately three million metric tons.

 

The USDA estimates that China will import seven million metric tons of corn (276 million bushels) in the 2020-2021market year with the U.S. supplying a significant proportion.  This market is shared with the Ukraine that shipped 3.8 million metric tons (150 million bushels) to China in the 2018-2019 market year.


COFCO import terminal, Port of Zhengzhou

 

 

Through July 23rd the U.S. sold 7.6 million metric tons of soybeans (278 million bushels) to China with an order of 3.34 million tons of new-crop soybeans amounting to 3.34 million metric tons (123 million bushels).  China was designated as the purchaser for 59 percent of this quantity with undisclosed nations, (usually China) with an additional 37 percent of shipments or 96 percent of the total. 

 

During July, combined corn and soybeans sales by the US amounted to 15.4 million tons (560 million bushels).


 

Egg Week

USDA Weekly Egg Price and Inventory Report, August 5th 2020.

  • The U.S. flock in production was up 0.6 million from the previous week at 310.1 million, with molted hens resuming production and pullets reaching maturity.
  • Shell inventory was up 0.9 percent after a 3.1 percent decrease last week indicating a restoration in balance between supply and demand influencing price. There little evidence of a return in the food service sector as the economy cautiously reopens but the incidence rate of COVID-19 increases.
  • USDA Midwest benchmark generic prices for Extra large and Large were unchanged to averages of 62.5 and 60.5 cents per dozen respectively. Mediums were down 4.9 percent to 38.5 cents per dozen. Prices will continue to decline as molted hens resume production and pullets commence lay unless there is a proportional increase in demand.
  • The price of breaking stock in the Midwest was unchanged at an average of 24.5 cents per dozen. Checks were unchanged at 15.5 cents per dozen.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on August 3rd 2020 the Midwest wholesale prices for Extra Large, Large as delivered to DCs were unchanged at averages of 62.5 and 60.5 cents per dozen. Mediums fell 4.9 percent to 38.5 cents per dozen. Prices should be compared with the USDA benchmark average 5-Region blended nest-run, (excluding provisions for packing and transport) cost of 58.2 cents per dozen in June 2020. The progression of prices during 2018-2020 is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The August 3rd 2020 USDA Egg Market News Report (Vol. 67: No. 31) documented a USDA Combined Region value rounded to the nearest cent, of $0.70 per dozen delivered to warehouses for the week ending July 28th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.61 per dozen. At the high end of the range, price in the South Central Region attained $0.76 per dozen. The USDA Combined Price last week was 15 cents per dozen below the 5-year average and 25 cents per dozen above the corresponding week of 2019.

Flock Size

According to the USDA the number of producing hens this past week (rounded to 0.1 million) increased 0.6 percent to 310.1 million. If USDA data is accurate, the producing flock contains molted hens coming back into production with approximately 5.8 million pullets reaching maturity during the week offset by inadequate flock depletion. Prices descended sharply after a transitory peak of $3.00 per dozen three months ago. The hen population producing eggs is now out of balance relative to acceptable seasonal consumer and depressed industrial and food service demand. Any number above 305 million hens in production during mid-summer portends lower than average prices and increased inventory, unless matched by proportional increases in demand. The “March Madness” buying in response to COVID-19 concern is long since over and the industry has not recovered from the downside of the roller coaster, with prices also depressed by shell eggs diverted from the food service sector.


 

Vital Farms Soars on IPO

Vital Farms a Certified B Corporation raised $200 million in the sale of 9.3 million shares in an IPO in a debut on NASDQ, Friday July 31st trading under the ticker VITL. The IPO was underwritten by Goldman Sachs and Company, Morgan Stanley, Credit Suisse, with participation by BMO Capital Markets and Stifel. VITL priced at $22.00 and closed at $35.05 on the opening day, rising to $38.90 at close of trading on Tuesday 4th August .  The Company has a market capitalization of $1.5 billion. 

 


Perspective View of Springfield MO Packing Plant in operation

Vital Farms Inc, established in 2007, had issued a prospectus confirming that equity holders would make available five million shares to raise $71 million with an anticipated initial public offering price of between $15 and $17 per share. In the preamble to the prospectus, the company claimed a 33 percent compound growth rate from 2015 through 2019.  Vital Farms stated that it has 2.5 million households purchasing eggs and dairy products and currently holds 76 percent of the pasture-raised eggs category.  Vital Foods operates a packing plant in Springfield, MO. supplied by 200 contractors.

 

For the fiscal year ended December 29, 2019 the company generated net revenue of $140.7 million and income from operations of $3.3 million. Gross margin was 30.5 percent, operating and net margins both 2.4 percent.  Earnings per share for the fiscal years 2017, 2018, and 2019 were a loss of $0.07; and positive $0.22 and $0.09 for the most recent years. For the quarter ended June 28th 2020, Vital Farms estimates net revenue will be $58 million with a net income of $5.3 million. 

 

According to the Vital Farms balance sheet, reflecting March 29th 2020, total assets were $67.4 million, including goodwill of $3.9 million and tangible property plant and equipment of $25.6 million.  The company carries long-term debt and lease obligations amounting to $4.3 million.

 

In reviewing the prospectus, the following items are worthy of consideration:

  • Selling, general, and administrative costs for the fiscal year ended December 29th 2019 amounted to 20.9 percent of net revenue.  The company does not appear to have achieved efficiencies of scale consistent with increased volume.
  • In the list of precautionary statements, there is no mention of catastrophic diseases, which may profoundly affect revenue and ongoing operations.  As a company committed to pasture-housed flocks in a limited area with a common feed supply, Vital Farms is vulnerable to infection with avian influenza and exotic Newcastle disease introduced by free-living birds. Pasture-managed flocks are also more susceptible to infection with Salmonella that could impact brand integrity.
  • No details are provided concerning dozens of eggs sold or the number of contracted hens, estimated at 1 million, based on revenue and other indirect indications. This represents 1.2 percent of the non-caged U.S. flock.
  • The disparity in price between eggs derived from pasture and product from cage-free barn and aviary housing will limit growth. If Vital is obliged to reduce selling price, profit and ROI could be negatively impacted. The fact that growth in consumption of USDA certified organic eggs has been static for months suggests a limited market for eggs priced at $4 and above at retail.
  • Vital Foods has an interest in Ovabrite Inc, a company established by Novatrans Group, SA, to determine embryo gender of fertile eggs during incubation. The future financial contribution of this unproven technology is questioned.
  • Just a thought- The Market capitalization of VITL on August 6th was $1.62 Billion compared to Cal-Maine Foods at $2.12 Billion. COVID-19 really does have neurologic effects.

 

Welcome to Southwest Agri-Plastics

Southwest Agri-Plastics Inc is the latest sponsor of EGG-NEWS.  The company located in Addison, TX has provided plastic components and equipment to agriculture for over 50 years.

The advantage of plastic over wood relates to efficiency of decontamination critical to maintain health of flocks. Plastic components are frequently superior to metal that is subject to corrosion and is more durable provided that composition resists wear and fracture.

Southwest Agri-Plastics manufactures plastic components for the poultry industry, horticulture, warehousing and the energy sector.  Victor Sahm III, president of Southwest Agri-Plastics maintains that all of his company products have one thing in common, “that they make it easier for customers to do business”. 

Products used extensively in the egg industry include:-

  • Dura-Plast egg transport system. The 3-part interlocking design can be customized to meet specific needs carrying up to 246 dozen eggs per pallet.  The system comprises a pallet base, plastic dividers, and 30-egg trays. The integrated egg transport system was developed to replace wooden pallets to enhance biosecurity. The transport system contributes to optimal protection of shells. Dura-Plast pallets are available as rackable with feet or nonrackable with caps. Dura-Plast egg trays incorporated Bio-Pruf antimicrobial protection to reduce levels of bacterial pathogens. Dura-Plast pallets can be converted from rackable to nonrackable and vice versa by installing pallet caps with feet.  An effective egg transport system offers a rapid payback and given a reduction in downgrades and leakers.


Dura-Slat poultry flooring systems fabricated from high impact wear resistant polypropylene plastic. Plastic flooring systems reduce foot pad problems and if eggs are laid on the slatted area, they generally are cleaner than on either wooden slats or litter.  Dura-Slat flooring systems have reinforced stress points and are designed for ease of cleaning.

  • Dura-Pad inserts for nests. These inserts are fabricated from high grade polyethylene to provide wear resistance.  The rounded tops contribute to hen comfort and ensure safe egg roll out.  Dura-Pads inserts are easy to clean and cost effective. 
  • Dura-Ramp units are placed adjacent to nests in barns and contribute to cleaner nests and eggs. Dura-Ramp modules are constructed of high-impact polypropylene providing optimal resistance to wear and impact.
  • Dura-Grow chick feeder available in oval or round configuration are recommended to start chicks on floor systems

Details of Southwest Agri-Plastics products can be obtained from the company website by clicking onto the logo on the right side of the welcome page.


 

Fasteners Resource Fabricates Doors for Obsolete Cage System

Fasteners Resource has the capability to fabricate custom parts for obsolete systems no longer supplied by manufactures.  In a typical case, an egg-producer required replacement doors.  A photograph was provided allowing technicians at Fasteners Resource to produce a CAD image.  A sample was built the next day, painted and air freighted to the customer to confirm size and fit.  Five thousand doors were fabricated and delivered within three weeks, during the inter-flock interval.

 

Fasteners Resource has the equipment and personnel to manufacture a wide range of components to keep old installations in operation, deferring investment in a new system. 


Cage Door Fabricated by Fasteners Resource.

 

Fasteners Resource has also manufactured specific components for new installations supplied from the EU when critical components were not delivered due to improper packing at the factory. This would have would have held up installation, but for the rapidly fabricated components in the U.S.

 

To review projects contact Todd Heimler, (248) 933 4868 or <todd@fastenersresource.com>.  The full range of fasteners and safety products (PPE) available can be accessed on their website by clicking on to the company logo on the right side of the Welcome page of this edition or <fastenersresource.com>.


 

Blue Apron Holdings Posts Profit in Second Quarter

According to a press release by Blue Apron Holdings on July 29th, the company generated a profit for the second quarter of fiscal 2020 ending June 30th, the first quarterly profit since the IPO in 2017. For the period, the company posted net earnings of $1.1 million on revenue of $131 million with an EPS of $0.08.  Comparative figures for the second quarter of fiscal 2019 were a net loss of $7.7 million on revenue of $119 million with an ESP of $(0.59).

 

The increased revenue was attributed to more orders occasioned by COVID-19 restrictions on restaurants leading to more home cooking.  Comparing second quarter of 2020 with 2019, orders increased from 2.05 million to 2.15 million although active customers declined from 449,000 to 396,000.  Revenue per customer increased to $331 from $265 in 2019.

 

Blue Apron did not reduce expenditure on food and packaging with the cost of goods sold declining slightly from a high value of 59.9 percent of sales value in Q2 of 2019 to 59.4 percent in Q2 of 2020.

 

Blue Apron has a market capitalization of $163.8 million.  Over the past 52 weeks share price has ranged from $2.01 to $28.84 with a 50-week moving average of $11.75.

 

Blue Apron carries long-term debt of $53.8 million with an asset value of $215.5 million.  Twelve month trailing profit margin is -18.3 percent and operating margin -14.5 percent.  Return on assets is -13.4 percent with a return on equity of -90.4 percent. Of the equity, 43.5 percent is held by institutions and 18.6 percent of the float is short.

 

Blue Apron provided guidance including revenue growth of 13 percent in the third quarter but with a loss of $18 million. Following release of the Q2 result APRN fell 13.1 percent to close at $12.24 on July 29th.

 


 

Molecular Biologists Monitoring Mutations in SARS-CoV-2

Sequencing studies have demonstrated a mutation in the genome of SARS-CoV-2 that apparently occurred during the first quarter of 2020.  The change resulted in substitution of glycine for aspartic acid at position 614 on the virus spike protein required for attachment to receptors on human cells.  The mutation termed G614 is now a consistent feature in isolates of the virus worldwide and is present in almost every strain sequenced.  Molecular biologists believe that it may make the virus more transmissible but its effect on pathogenicity and species susceptibility has yet to be determined.

 

Scientist speculate that the absence of obvious mutations among SARS-CoV-2 isolates may be a function of almost total susceptibility among humans infected with the virus.  It is also reasoned that failure to evolve may be due to the fact that the virus occurred in human populations before it was recognized as a clinical entity in Wuhan, China in December 2019.  A previous version of the virus that was less pathogenic may well have allowed spread without detection over an extended period in Southeast Asia.

 

 Ongoing studies on the gene sequence of the virus coupled with serologic studies in populations in China and in neighboring nations will eventually provide evidence concerning the origin of the virus, involvement of wildlife reservoir hosts and variations in pathogenicity and infectivity over time. An understanding of the factors associated with infectivity and pathogenicity are critical to defining the epidemiology of COVID-19 and will contribute to early detection of the next emerging virus with pandemic potential


 

Eggland's Best Partners with the American Heart Association to Promote Healthy Home Cooking

Eggland's Best and the American Heart Association are promoting Richard Blais, a prominent cookbook author and television personality to encourage home cooking.

 

Chief Medical Officer for Prevention at the American Heart Association Dr. Eduardo Sanchez stated, "with people spending more time at home this summer there is a great opportunity to build healthier eating habits by cooking nutritious meals together".  He added, "we are excited to work with Eggland's Best once again to help families learn how to eat smart and build better nutrition habits".

 

Chef Richard Blais said, "I am proud to be teaming up with the American Heart Association to show families how to put a healthier spin on the classic comfort food recipes that we all know and love". 

 

In commenting on the support of Eggland's Best, CEO of the Eggland’s Best cooperative, Charlie Lanktree stated, "Eggland's Best is thrilled to be joining forces with the American Heart Association for the third year in a row to highlight the importance of incorporating nutritious food into family meals.


 

Rapid Decay of Anti-SARS-CoV-2 Antibodies Following Mild COVID-19 Infection

A study conducted at the David Geffen School of Medicine, University of California, Los Angeles confirmed the short duration of ELISA-detected IgG antibody against SARS-CoV-2.  This trial comprised 34 participants of whom 30 were confirmed as being infected with COVID-19 applying polymerase-chain reaction assay.  The four non-confirmed patients demonstrated symptoms compatible with COVID-19 and were previously in close contact with known infected individuals. All participants demonstrated mild symptoms of COVID-19 and ranged in age from 21 to 68 years.

 

Blood samples were obtained over a period of 37 through 86 days after onset of symptoms.  Serum samples were analyzed by enzyme-linked immunosorbent assay [ELISA] to detect anti-SARS-CoV-2 spike receptor binding domain IgG.  The study demonstrated that COVID-19 antibody had a half life between 26 to 60 days.

 

The authors of the letter to the NEJM* opined that the protective role of antibody against SARS-CoV-2 is unknown and that the rapid decay in antibodiy titer as detected by the ELISA was consistent with concurrent studies.  The authors warned against the validity of “immunity passports.”  The development of herd immunity and more importantly the potential durability of antibody stimulated by vaccines.

 

 *Ibarrondo, F.J.et al Rapid Decay of Anti-SARS-CoV-2 Antibodies in Persons with Mild COVID-19 - New England Journal of Medicine. DOI.10.1056/NEJM2025179. July 21, 2020.


 

Third Round of Farmers to Families Food Box Distribution Planned

During September and October, the USDA will purchase fresh produce, dairy and meat products for inclusion in food boxes under the Farmers to Families program devised at short notice by Secretary of Agriculture, Dr. Sonny Perdue.  The remainder of the $3 billion originally authorized for the program will be expended during the third round.  USDA claims to have delivered 50 million boxes through contractors to food banks and non-profit distribution centers.

 

The program has engendered criticism from Democrat members of the House Agriculture Subcommittee relating to inadequate supervision and records. It is noted that the program has benefitted the needy and prevented waste of perishable products occasioned by disruption of conventional supply chains by COVID-19.


 

Aldi to Open 70 Stores During the Remainder of 2020

Aldi will expand by at least 70 new stores by the end of 2020.  New areas for the company will include Phoenix in addition to stores in New York, Texas, Kansas, and California.  A new regional headquarters and distribution center will be established in Loxley, AL. in 2021.

 

Aldi is pursuing a five-year plan to become the third-largest grocer in the U.S. after Walmart and Kroger with 2,500 stores by 2022.  The company currently has 2,000 stores in operation in 36 states.  Value chains, including Aldi, are recording between 15 and 20 percent year-over-year increases in sales compared to 10 percent at grocers and club stores.

 

Fox News noted that Lidl is withdrawing from the Texas market placing undeveloped properties up for sale in the Dallas-Fort Worth, San Antonio, and other areas.  Properties were acquired in 2017 in anticipation of an intensive entry into the State. It is understood that Lidl will concentrate on the Northeast over the intermediate term.


 

Slow Pace of CFAP Payments by USDA

The American Farm Bureau estimates that the USDA has made $6.2 billion in payments from the pool of $16 billion assigned for the Coronavirus Food and Agriculture Program (CFAP).  Payments to date include $2.7 billion to cattle producers, $1.3 billion for dairy and $1.3 billion for corn farmers.

 

Delay in distributing funds to will reduce overall farm income for 2020 according to various agricultural economists.


Sec. Ag. Dr. Sonny Perdue

 

Turbulator Receives Top Product of the Year Award From Environment + Energy Leader

Turbulator, manufactured by Magnation Water Technologies, received the prestigious Top Product of the Year Award from the Environment + Energy Leader Program.

 

The Turbulator is a patented water softener reducing mineral scale on watering systems, plant installations and incubators when available water is suboptimal in quality.

 


 

Moderna-NIAID mRNA-1273 Vaccine to Enter Phase 3 Clinical Trial

According to a release by the National Institute of Allergy and Infectious Diseases [NIAID] the Moderna mRNA-1273 vaccine will enter Phase 3 clinical trials.

 

The vaccine was developed by NIAID scientists using technology developed by Moderna Inc based in Cambridge, MA. The vaccine comprises mRNA-1273 encoding for S-2P immunogen that stimulates antibodies to the SARS-CoV-2 spike protein. Phase 1 and 2 clinical trials demonstrated safety and the ability to stimulate virus-neutralizing antibody.

 

It is anticipated that 15,000 volunteers will receive two intramuscular injections approximately 28 days apart.  A control group of 15,000 volunteers will receive a saline placebo.  The trial is double blinded, so neither investigators nor participants will know to which group they are assigned.

 

Dr. Antony S. Fauci, Director of NIAID, stated “We urgently need a safe and effective preventive vaccine to ultimately control this pandemic.”  He added, “Results from early stage clinical testing indicate the investigational mRNA-1273 vaccine is safe and immunogenic, supporting the initiation of a Phase 3 clinical trial.”

 

Dr. Francis S. Collins, Director of the National Institute of Health, stated “The launch of this Phase 3 trial in record time, while maintaining the most stringent safety measures, demonstrates American ingenuity at its best and what can be done when stakeholders come together with unassailable objectivity towards a common goal.”

 

The Phase 3 trial will be implemented and monitored by specialists at the Baylor College of Medicine in Houston, the Harvard HIV Vaccine Clinical Trials Unit at Brigham and Women’s Hospital in Boston and by Meridian Clinical Research.

 

An independent safety monitoring board will review blinded and unblinded data, including safety and the incidence of COVID-19 in both vaccinated and control groups at regular intervals.

 

Parallel trials are underway in the EU on a similar vaccine developed independently by the University of Oxford in collaboration with Astra-Zeneca.


 

House Agricultural Bill to Benefit Poultry Industry if Enacted

The recent House appropriations bill for agriculture contained a number of allocations that indirectly benefit the poultry industry.  These include:-

 

  • A  $1 million increase for the Veterinary Medicine Loan Repayment Program that will potentially increase the number of young veterinarians willing to enter food animal practice
  • Funding was increased for the National Animal Health Laboratory Network facilitating diagnostic services
  • An additional $3 million to support new appointments for the Animal and Plant Health Inspection Service Center for Veterinary Biologics. Increasing the number of reviewers and clerical personnel will expedite approval of new vaccines.
  • Increased funding for research activities including the Agricultural and Food Research Initiative and funding for the National Bio- and Agro-Defense Facility. The NBAF located in Kansas will serve as the principal laboratory for exotic diseases and will replace the Plum Island facility in New York.

 

The One Health approach to monitoring and controlling disease outbreaks will parallel the Advancing Emergency Preparedness Through One Health Act of 2019 embodied in S.1903 and H.R.3771 and supported by the American Veterinary Medical Association.


 

Hy-Line Technical Bulletin on Thiamin Deficiency

Hy-Line International has issued the latest in a series of Technical Bulletins dealing with the effects, signs and diagnosis of thiamin deficiency.

The comprehensive review is intended more for non-U.S. operations since the deficiency is rarely if ever encountered in commercial flocks in the U.S.  

 

 

 

Click here to view the full PDF Bulletin

 


 

Albertsons Posts Growth in First Quarter of FY 2020

In a July 27th release, Albertsons Companies posted a substantial increase in sales following their IPO on January 26th. For the quarter ending June 20th the company posted net income of $586 million on revenue of $22.8 billion. The 26.5 percent increase in same-store sales was attributed mostly to the spike in grocery purchases associated with COVID home confinement. The company recorded a 276 percent increase in digital sales with home delivery options available at 90 percent of existing stores and click-and-collect from 1,600 locations.

 

During the quarter, Albertsons invested $615 million in COVID protection for workers and customers including $275 million in increased pay and over $50 million in donations to food banks.  At the end of fiscal 2019, Albertsons operated 2,252 food and drug stores in thirty-four states and under fourteen banners including Albertsons, Safeway, Vons, Carrs, Jewel-Osco, Shaw's and Haggen. 


 

Wegman’s Debuts Cary, NC Store

On Wednesday, July 29th, Wegman’s opened the new 103,000 square foot store amid heightened security.  All Wegman’s employees wore masks and admitted masked shoppers applying social distancing.  Hand sanitizer stations were placed in strategic locations together with signage relating to the need for protection.

 

The Wegman’s store in Cary will have expanded Meals-2-Go food service and two curbside pickup lanes, one for grocery and the other for food service.  Wegman’s also introduced their scan system at check-out for consumer convenience.


Wegman's Cary NC Store

 

 


 

Dunkin' Brands Posts Second Quarter Results

In a release dated July 30th, Dunkin' Brands (DNKN) reported results for the second quarter of FY 2020 ended June 27, 2020.  For the quarter, the company posted net income of $36.5 million on revenue on $287.4 million with an EPS of $0.44.  Corresponding values for the second quarter ended June 29th 2019 were a net income of $59.6 million on revenue of $359.3 million with an EPS of $0.71.

 

Dunkin' Brands U.S. comparable store sales declined by 18.7 percent and the Baskin-Robbins U.S. segment recorded a decline of 60 percent.  Accordingly the company will close 229 Dunkin' and Baskin-Robbins locations globally.

 

In commenting on results Dave Hoffmann, CEO of the group stated "for Dunkin' U.S. same store sales improved sequentially throughout the quarter, largely as a result of our ability to pivot quickly and introduce new menu items designed to appeal to customers who are now visiting us  later in the day."

 

Kate Jaspon, CFO, express confidence stating, "given the strength and stability of our franchised model coupled with our franchisees' ongoing business recovery we remain confident in our ability to maintain appropriately liquidity through the current crisis".

 

Dunkin' Brands Group has a market capitalization of $5.7 billion and is traded over a fifty-two-week range of $38.51 to $84.74 with a fifty-day moving average of $66.27.  One hour into trading on Thursday, July 30th following the release, DNKN traded at $69.43 down 3.1 percent. On a trailing twelve-month basis, operating margin was 31.5 percent and profit margin 17.6 percent.


 

China Lagged in Agricultural Imports from the U.S. during the First Half of 2020

The January Phase-One Trade Agreement called for China to import agricultural products to the value of $36.5 billion in 2020, considerably above the $24 billion figure in 2017 before the beginning of a trade war.

 

The advent of COVID-19, a rapidly deteriorating diplomatic situation between the U.S. and China and November elections in the U.S. have combined to limit trade.  For the period January through May, China imported $6 billion in agricultural products, approximately nine percent higher than in 2019 but 31 percent below the 2017 base level. 

 

To satisfy the requirements of the Phase-One Trade Agreement, China will have to purchase $25 billion over the second half of 2020.  Traditionally China purchases soybeans and corn from the U.S. at the end of the market year, ending August 31st, and into the beginning of the subsequent market year.  In June and July, China imported $2.5 billion in U.S. soybeans, but prospects for compliance with the intended value of purchases now appear dim despite large orders for corn and soybeans during July. 


 

Philippines Controlling H5N6 Avian Influenza by Depletion

An outbreak of H5N6 Avian influenza was reported in the town of San Louis in Pampanga Province, north of the capital, Manila.  Approximately 40,000 chickens were depleted with disposal of carcasses.  It is presumed that the infection was introduced into the area by migratory birds.

 


 

Roman Heini Resigns as Chairman of Lidl U.S. After Sixteen-Month Tenure

Heini joined Lidl after a four-year period as Joint Managing Director for Aldi in the UK.  Ultimately the U.S. operations are under the control of Michal Aranda serving on the Lidl Management Board in Europe. 

 

In a LinkedIn post, Heini noted "the decision to leave our company comes after much reflection on my personal goals, not just from my career, but most importantly, having recently lost my father, for my family. It should in no way detract from my confidence in the future of Lidl U.S.

 

Lidl U.S. will be under the direction of CEO Johanne Fieber.  He was transferred to the U.S. in 2018 to replace Brendan Proctor after serving as CEO of Lidl in Sweden.


 

McDonald's to Close In-store Walmart Locations

Walmart will close up to two hundred U.S. restaurants including one hundred in Walmart stores.  According to CEO Chris Kempczinski in the call following release of second quarter results, Kempczinski noted that "the public health situation appears to be worsening in the U.S.".  This reality has led to delays in reopening in-store dining and has extended the hold on all-day breakfast.

 

Early mornings are a problem for McDonald's with a nine percent decline in sales during this day part compared to the second quarter of fiscal 2019.  Obviously, with fewer commuters due to work-from-home the breakfast market has declined.  McDonald's anticipates revamping breakfast menus later this year.


 

Evolution of SARS-CoV-2 Lineage

The origin of SARS-CoV-2 virus responsible for COVID-19 is both of interest to epidemiologists and politicians.  Studies conducted at the University of Glasgow* indicate that in all probability the SARS-CoV-2 and a sarbecovirus reservoir in bats diverged in the late 1940's. It is presumed that the lineage preceding SARS-CoV-2 has been circulating in bats undetected for many decades.  The sarbecovirus lineage from which both MERS and COVID-19 evolved undergoes frequent recombination and exhibits diversity on a regional basis in China.  The specific genes responsible for the ACE2 receptors responsible for infectivity are an ancestral trait shared with bat viruses and are of ancient origin.

 

This publication indicates the need to maintain constant surveillance over viruses present in wildlife and especially bats. Diverse species of bats in Asia are responsible for the emergence of Hendra and Nipah disease, in SARS, MERS over recent decades and during the past year Covid-19.  Withholding research funds and failure to cooperate with national and regional laboratories and the WHObased on political considerations is not in the long-term interests of the U.S.

 

 

 

*Boni,M.F.et al Evolutionary origins of the SARS-CoV-2 sarbecovirus lineage responsible for the COVID-19 pandemic. Nature Microbiology. doi.org/10.1038/s41564-020-0771-4 July 28 2020


 

Dolco Packaging Selected for Weekly Membership Spotlight

The July 31st edition of the USPOULTRY Wire featured Dolco Packaging, a subsidiary of Tekni-Plex as the weekly Spotlight allied member. Dolco is the leading manufacturer of polystyrene foam egg cartons. 

 

Dolco has numerous manufacturing locations in the U.S. to service the egg industry.  With the emergence of COVID-19 and the partial collapse of the food service sector, shell eggs were diverted to the retail stream requiring a sharp increase in the supply of cartons.  Dolco reconfigured production lines, initiated 3-shift production and rationalized the supply chain to order to satisfy the requirements of their customers.

 


 

Agricultural Fairs to Receive Aid

Due to the advent of COVID-19, most 2020 state and county fairs will be cancelled with losses to organizers, civic agencies and exhibitors.

 

Reps. Jimmy Panetta (D-CA) and Billy Long (R-MO) have introduced the Agricultural Fairs Rescue Act to provide assistance to organizers of state and county fairs.  The legislation would provide $500 million in grant funding to maintain critical infrastructure and operations in anticipation of re-opening in 2021. 

 

Rep. Panetta stated, "county and local fairs are very important to agriculture and our communities all across our country.  Fairs provide our producers with the opportunity to market their crops and livestock and foster the next generation of farmers". 

 

The National Association of State Departments of Agriculture (NASDA) supports the Agricultural Fairs Rescue Act.  The CEO of NASDA stated, "the global pandemic has caused fair cancellations around the country in unprecedented numbers.  As a result of these cancellations, fairs are facing dire financial hardship".


 

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Commentary


Prospects for Pfizer-BioNTech and other Vaccines

The Department of Health and Human Services has announced an agreement to purchase 100 million doses of a candidate COVID-19 vaccine for $1.95 billion ($20 per dose) subject to efficacy.

 

Pfizer recently announced that one of the candidate vaccines produced using technology developed by BioNTech of Germany stimulated antibody production and has now progressed to Phase Two evaluation. Similar announcements have been made for the Astra-Zeneca Oxford vaccine and other candidates.

 

If development proceeds as planned, one of the various candidate vaccines might be approved by the end of October and could be supplied in commercial quantities during the first quarter of 2021.

 

The announcement follows new concern as to the actual protective ability of antibodies against SARS-CoV-2 and also the durability of  antibodies. This is based on studies demonstrating decay of antibody as measured by ELISA assay in patients recovering from COVID-19 and anecdotal reports of re-infection. It is also possible that mutations in the SARS-CoV-2 genome may require periodic modification of vaccines although the basic technology and manufacturing capacity would be in place to effect modifications to maintain efficacy.

 

Even if a suitable vaccine is available in early 2021 the current social climate poisoned by misinformation and political polarization will detract from attaining the level of herd immunity required to suppress the incidence rate of infection. The population of the World will be obliged to continue preventive measures that have proved successful in nations such as Taiwan, Germany and South Korea for many years with or without effective vaccines.

 

Operation Warpspeed supports research, development and manufacturing capability of pharmaceutical companies with promising vaccine candidates.


 

Sponsored Announcements


MOBA : CONTROL SYSTEM UPDATE KITS AVAILABLE FOR DIAMOND GRADERS

The on-going support and improved performance of the Diamond brand Grading Systems is very important to us.  MOBA is continuing the long established commitment to our customers as a reliable parts and service provider. 

 

MOBA has created and released DC upgrades for the Diamond 2100, 8200, 8300, and 8400 graders. These kits replace all of the circuit cards and power supplies originally used on these machines with a modern control system and enhanced software.

 

Each of the DC upgrades is named for the specific system in use and they were designed to eliminate the circuit card obsolescence issues we are facing with many of these older parts.  These updates can typically be installed overnight resulting in minimal down time.  Each kit is configured specifically for the grader that it will be installed on depending on the number of packing lanes it has as well as the options installed.

 

Please review the technical information and specifications included in this mail-out and advise us of your future requirements. For additional technical information and prices, please contact your local MOBA sales person:

 

 

Lonny Watson

Lonny.watson@moba.net

936-427-2197

Brad Brown

brad.brown@moba.net

260-417-6005

Michael Hess

michael.hess@moba.net

717-447-0802

 

 

 

 

  

 

   Ken Lee

   ken.lee@moba.net

     951-543-6775

Phil Vobr   

phil.vobr@moba.net

612-799-6478

 

 

 

 

           

You can also contact Bill Brisch at our Farmington Hills office at 248-919-5106 or email him at William.brisch@moba.net.

William Bretschneider

Product Manager

 


 

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