Editorial


Profound Effects of COVID-19 on Current and Future Shopping Trends

Market research group, C+R recently conducted a survey among 2,000 consumers concerning purchasing habits and cost of food.  Approximately 85 percent of those surveyed considered that they are paying more for groceries with an escalation in the price of protein as the major contributor to food inflation.  The respondents claim to have paid 68 percent more for meat compared to February, 48 percent more for milk and eggs, 45% for fish and 28% for poultry.

 

The figure for eggs may be misleading since prices were relatively low in February, but for the past month retail prices have demonstrated successive weekly rises as a result of seasonal demand. Escalation in the price of meat is understandable given that supply chains were seriously disrupted by COVID-19 plant shutdowns.  In contrast, poultry processing plants were relatively unaffected, and supplies were only constrained by the surge in panic buying during March.  At the present time, supply of most chicken and derived products is in balance with the demand with stable prices.  The survey did not consider turkey meat that has risen in price attributed to a judicious reduction in supply after a long period of negative margins resulting from over-production. Consumption through the traditional Thanksgiving and Christmas periods will be depressed in 2020 impacting this segment of the industry.

 

The survey also showed that 75% of respondents were paying more for household goods including 59% for cleaning supplies, 39% for paper products and 33% for personal care and cosmetics.

 

A surprising 83% of respondents reported difficulty in finding specific grocery items, again reflecting disruption in supply chains. An additional factor is that food producers have narrowed their ranges of products in an attempt to rationalize the logistics and cost of manufacturing and packaging.  Approximately 90% of consumers were concerned that groceries will continue to increase in price and almost the same proportion consider that current shortages will continue. 

 

The effect of increased job losses and the delay in introducing a second stimulus package has resulted in 65 percent of consumers reducing their expenditure on food compared to the onset of the pandemic.  To economize, 43% of families are eating less meat, 33% less poultry, 31% were avoiding higher-priced organic items, and 30% are buying in bulk.  This is reflected in the quarterly sales data posted by club stores including Costco and Sam's.

 

Casting forward, shoppers do not share the Administration view that the end of COVID is "around the corner" or that the disease "will just go away soon".  Twenty-three percent consider that they will return to shopping at pre-pandemic levels only in the spring of 2021, 20 percent estimate during summer of 2021 with five percent each for the fall or winter of 2021.

 

 Disquietingly there is little confidence in a vaccine as only ten percent of those surveyed consider that the availability of an effective and safe product will encourage a return to pre-pandemic purchasing patterns. Consistent with Maslow's Hierarchy of needs, 68 percent of consumers indicated that they would devote the majority of any second stimulus check to groceries and food.

 

Consumers are concerned that a second wave of COVID-19 will result in additional shortages of grocery products and most shoppers have accepted the inevitability of higher food prices.  Contrary to the "pantry stuffing" displayed in March and early April, fully a third of respondents have stored only enough food for two weeks or less. This is possibly a reflection of growing financial restraints.

 

A further take-away from the C+R survey is that 70 percent of respondents believe that grocery shopping will change permanently. A similar proportion still express "discomfort" when shopping and 70 percent have used grocery delivery or pick up for the first time since the emergence of COVID-19.  Contrary to prevailing political rhetoric, almost half of consumers are disinclined to patronize a store that does not have a mask policy.

 

The food industry and retail grocers should accept the results of the C+R Survey and plan for a continuation in current COVID trends over the intermediate term. The willingness to return to previous patterns of selection and purchase will depend on restoration of the economy. This goal will be totally driven by realistic control of COVID through a combination of protective measures and immunity stimulated by vaccines. Societal disruptions caused by COVID will persist through 2024 including divergence in income among ethnic and cultural demographics, altered spending patterns, more stringent entertainment priorities, remote education, lower population growth and changes in location of residences. The food industry will have to be sensitive to these changes and respond accordingly.


 

Egg Industry News


COMMODITY REPORT: October 16th 2020.

  • The financial and economic implications of the COVID-19 pandemic continue but gradual easing over an extended period is expected as society struggles to return to a “new normal” with recent noteworthy upsurges in incidence in both rural and urban areas of the U.S. Markets do not appear to be influenced by the imminent General Election on November 3rd.
  • Commodity prices this past week were mixed and fluctuated, influenced by export orders, lower projections for 2020 crop yields, ending stocks projected in the October 9th WASDE Report and the September Grain Stocks Report. Corn showed an increase of 2.0 percent for the week despite lack of orders from China but responding to a shipment to Mexico and in anticipation of large orders from China. Soybeans fell 1.3 percent in price this week despite orders booked by China and other nations and projected lower ending stocks attributed to a downward revision of yield and associated factors. Soybean meal rose by 1.7 percent disproportionate to soybeans.
  • Since July 10th year-to-date exports and 2020/2021 market-year orders for corn have attained 7.54 million metric tons (297.0 million bushels) but with a single order this past week. Exports and orders for soybeans amounted to 18.2 million tons (666.2 million bushels) of which 20 percent was ordered during September. Approximately 0.65 million metric tons (2.4 million bushels) was ordered this past week
  • Prospects for commodity exports to China during the 2020/2021 market year that began on September 1st for corn and soybeans have improved. China adjusted their domestic short-term demand for soybeans as a result of an apparent increase in the hog herd after severe losses in 2019 and early 2020 from African swine fever. White-feathered chicken production has now recovered after COVID disruptions and on QSR demand. China is also taking advantage of shipping rates that are rising sharply in order to build inventory. The Baltic Dry Index was 1,860 in mid-October 2019, fell to 744 in April 2020 and is now at 1,471.

 

The following quotations for delivery in the months as indicated were posted by the CME at close of trading on October 16th compared with values posted on October 10th (in parentheses) reflecting specified months for delivery.

 

COMMODITY

Corn (cents per bushel)

 Dec. 402 (394)

March ‘21 407 (402)

Soybeans (cents per bushel)

 Jan. ’21 1,051 (1,065)

March ’21 1,038 (1,047)

Soybean meal ($ per ton)

 Dec. 368 (362)

March ‘21 355 (364)

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

 

COMMODITY CHANGE FROM PAST WEEK

Corn: Dec. quotation up 8 cents per bushel (+2.0 percent)

Soybeans: Jan. quotation down 14 cents per bushel (-1.3 percent)

Soybean Meal: Oct. quotation up $6 per ton (+1.7 percent)

 

  • For each 10 cent per bushel change in corn:-

The cost of egg production would change by 0.45 cent per dozen

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

 

  • For each $10 per ton change in the price of soybean meal:-

The cost of egg production would change by 0.44 cent per dozen

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

 

Uncertainties still include:-

  • There are questions as to whether China will satisfy quantitative obligations in terms of the Phase One Trade during calendar 2020. 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. For the first half of calendar 2020 China imported agricultural commodities to the value of $7.3 Billion

 

  • Domestic U.S. soybean and soybean meal demand is now less constrained by COVID-induced cutbacks in the intensive livestock and poultry sectors.

 

According to the October WASDE, corn to be harvested in calendar 2020 is expected to attain 14,722 million bushels with ending stocks projected at 2,167 million bushels. Final values will be modified by actual yield influenced by weather conditions and export volume. Compared with the October 9th at close of trading the CME quotation for corn on October 16th was up 8 cents per bushel for December delivery to 402 cents, adding to the 15 cent per bushel advance from the preceding week. The Friday October price was the highest since January 24th 2020 at 387 cents per bushel.

 

The social restrictions imposed in the U.S. as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020 requirement accepting a nominal ten percent addition to gasoline. More than thirty percent of U.S. ethanol fermentation capacity is off-line at present and the outlook for increased demand is questionable. Ethanol was priced higher at $1.43 per gallon on October 16th up 32 cents per gallon (28.8 percent) reversing the decline from the previous week and compared with a five-year low of $0.92 per gallon on March 26th. Concurrently gasoline at $1.17 per gallon (quoted, New York Harbor) is 26 cents per gallon lower than ethanol but has a 63 percent higher BTU rating.

 

With more plants producing ethanol in the 4th quarter, DDGS is now available but at a higher price than in the second quarter. Eastern Corn-belt product was priced at $165 per ton on October 13th, $11 higher than the previous week but $35 per ton less expensive than October 15th 2019.

 

Soybeans are the beneficiary of the Phase-One agreement with China but down 14 cents per bushel to 1,051 cents for January 2021 delivery. The USDA anticipates a 2020 crop of 4,268 million bushels, but this value is subject to continuing drought in some states. Ending stocks according to the October WASDE projection will attain 290 million bushels.

 

On October 16th the BRL exchange with the CNY was 0.84, (up 0.01 from the previous week). The conversion of the US$ to the CNY was set at 6.7 on October 16th, unchanged from the previous week.

 

For consecutive years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipates that soybean imports by China will amount to 95 million metric tons during the 2020-2021 market year.

 

The following extracts from the September 30th 2020 edition of the Quarterly USDA Grain Stocks Report indicate the levels of storage on farms and in fields and off-farm for corn and soybeans.

 

  • “Old crop corn stocks in all positions on September 1, 2020 totaled 2.00 billion bushels, down 10 percent from September 1, 2019. Of the total stocks, 751 million bushels are stored on farms, down 8 percent from a year earlier. Off-farm stocks, at 1.24 billion bushels, are down 12 percent from a year ago. The June to August 2020 indicated disappearance is 3.02 billion bushels, compared with 2.98 billion bushels during the same period last year. Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports, and farm program administrative data, the 2019 corn for grain production is revised up 2.67 million bushels from the previous estimate. Corn silage production is revised up 715 thousand tons. Planted area is revised to 89.7 million acres, and area harvested for grain is revised to 81.3 million acres. Area harvested for silage is revised to 6.62 million acres. The 2019 grain yield, at 167.5 bushels per acre, is up 0.1 bushel from the previous estimate. The 2019 silage yield, at 20.2 tons per acre, remains unchanged from the previous estimate”.

 

  • “Old crop soybeans stored in all positions on September 1, 2020 totaled 523 million bushels, down 42 percent from September 1, 2019. Soybean stocks stored on farms totaled 141 million bushels, down 47 percent from a year ago. Off-farm stocks, at 382 million bushels, are down 41 percent from last September. Indicated disappearance for June - August 2020 totaled 858 million bushels, down 2 percent from the same period a year earlier. Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2019 soybean production is revised down 333 thousand bushels from the previous estimate. Planted area is unchanged at 76.1 million acres, but harvested area is revised to 74.9 million acres. The 2019 yield, at 47.4 bushels per acre, is unchanged from the previous estimate”.

 

COMMENTS

Subscribers are referred to the October 9th WASDE #605 in this edition and the results of the 2020 Pro Farmer 7-State Tour retrievable under the Search TAB.

 

The President opined on July 10th that he is “not contemplating a second phase of a trade agreement with China”

 

Approximately $16 billion will be disbursed under the Coronavirus Food Assistance Program (CFAP). As of August 10th, $7.1 Billion was distributed. An additional $14 Billion relief package was announced by the Administration on September 18th with a proportion already distributed.


 

Updated USDA Projections for U.S. Egg Production

images/Post_Images/3779image.jpgThe USDA Economic Research Service issued an updated forecast of egg production on October 16th 2020 revising the previous September 17th 2020 report. The volume of eggs to be produced in 2020 was unchanged from the September report. Consumption was raised by 0.8 eggs consistent with current trends. The October projection for 2020 production and per capita consumption were revised downward to reflect reductions of 2.8 and 2.7 percent respectively from 2019. The discrepancy between production and consumption in 2020 will be partly offset by the substantial but transitory rise in price in March and April. The 2020 benchmark New York unit price for 2020 was increased from 2019, by 2 cents per dozen. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to volume of production in 2019.

 

Subsequent USDA forecasts will provide greater clarity on reopening of the economy that is still depressed with high unemployment associated with COVID restrictions.

 

For 2021 the USDA forecast production to attain 8,165 million dozen, up 1.6 percent from 2020 production with a disproportionate 1.1 percent increase in per capita consumption to 288.0 eggs that will be reflected in lower unit realization.

 

October 2020 data is shown in the table below:-

Parameter

2017

 (actual)

2018

 (actual)

2019

 (revised)

2020 2021

% Difference (projection)

(forecast) 2020-2021

EGGS

Production (m. dozen)

7,811

8,042

 8,265

 8,033 8,165 +1.6

Consumption (eggs per capita)

282.1

287.8

 292.8

 285.0 288.0 +1.1

New York price (c/doz.)

101

138

94

117 110 -4.3

Source: Livestock, Dairy and Poultry Outlook –October 16th 2020

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.


 

Status of 2019 Corn and Soybean Crops

The USDA Crop Progress Report released on October 19th documented the 2020 corn and soybean crops as almost mature and ahead of the 5-year average due to the earlier start in 2020. Over half of the 2020 corn crop has been harvested, significantly more than at this time last year. Almost three quarters of the soybean crop is in, progressing at a higher rate than the corresponding week of last year.

 

The condition of both corn and soybean crops deteriorated in late August and early September as a result of drought. The condition of corn and soybeans has improved following rains in the Midwest and both crops are moderately superior to the 2019 season. The USDA did not assess the condition of the soybean crop this past week and values reflecting October 11th are shown in the table below. Iowa and N. Dakota stand out as having poor soybean condition. Corn in Iowa, Colorado and Pennsylvania is suboptimal in quality contrasted to Minnesota, Wisconsin and Kentucky with corn superior to other states.

 

Subsoil and surface moisture levels denote some relief from drought conditions except in Western and Pacific states. Both topsoil and subsoil moisture levels are similar to the past week. The corn-belt has experienced unseasonal high temperatures in combination with elevated humidity that may predispose to mycotoxicosis in the 2020 corn harvest. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2020 harvest in November.

 

Reference is made to the October 9th WASDE Report #605 in this edition, documenting actual 2020 acreage, and projected yields and ending stocks for corn and soybeans. The Pro Farmer 7-State Crop Tour projected corn and soybean yields of 177.5 and 52.5 bushels per acre. These were respectively, lower than USDA estimates that were revised to 178.4 and 51.9 bushels per acre in the October 9th WASDE Report.

 

 

WEEK ENDING

 

Crop

October 4th

October 11th

5-Year Average

Corn Mature (%)

Corn Harvested

94

41

97

60

94

43

Soybeans Dropping Leaves (%)

Soybeans Harvested

93

 

61

97

 

75

95

 

55

Crop Condition

V. Poor

 Poor

Fair

Good

Excellent

Corn 2020 (%)

Corn 2019 (%) *

* late planting

5

4

9

10

25

30

46

45

15

11

Soybeans 2020 (%)

Soybeans 2019 (%)*

 * late planting N/A

3

4

8

10

26

32

49

45

14

9

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

22

34

41

3

Past Year

8

16

59

17

Subsoil moisture: Past Week

20

33

47

3

Past Year

8

17

60

15


 

Egg Week

USDA Weekly Egg Price and Inventory Report, October 22nd 2020.

  • The U.S. flock in production was predictably up 0.7 million from the previous week to 313.5 million, with molted hens resuming production and pullets reaching maturity.
  • Shell inventory was up 5.7 percent after a 3.6 percent increase last week indicating an imbalance between demand and supply. There is some evidence of a return in the food service sector as the economy cautiously reopens but the incidence rate of COVID-19 is increasing in many regions.
  • USDA Midwest benchmark generic prices for Extra-large and Large sizes were unchanged this past week consistent with seasonal demand to averages of 105.5 and 103.5 cents per dozen respectively. Mediums were up 2.2 percent to 92.5 per dozen. Prices will continue to fluctuate as molted hens resume production and pullets commence lay unless offset by proportional increase in shell egg and liquid demand moving through the fourth quarter of 2020.
  • The price of breaking stock in the Midwest was down 2.7 percent to an average of 71.5 cents per dozen. Checks were unchanged at 62.5 cents per dozen.

OVERVIEW

Prices

According to the USDA Egg Market News Reports circulated on October 19th 2020 the Midwest wholesale prices for Extra-large and Large were unchanged as delivered to DCs attaining averages of 105.5 and 103.5 cents per dozen. Mediums were up 2.2 percent to 92.5 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 60.6 cents per dozen in September 2020. The progression of prices during 2018-2020 is depicted in the USDA chart reflecting three years of data, updated weekly.

The October 19th 2020 edition of the USDA Egg Market News Report (Vol. 67: No. 42) documented a USDA Combined Region value rounded to the nearest cent, of $1.13 per dozen delivered to warehouses for the week ending October 14th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.04 per dozen. At the high end of the range, price in the Southeast Region attained $1.16 per dozen. The USDA Combined Price last week was about 12 cents per dozen above the 3-year average and approximately 48 cents per dozen above the corresponding week in 2019.

Flock Size

According to the USDA the number of producing hens this past week (rounded to 0.1 million) was up 0.7 million to 313.5 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 flock depletion. The hen population producing eggs is now almost in balance relative to seasonal consumer demand but is depressed by lower industrial and food service off-take. Any number above 315 million hens in production during late fall moving towards the holiday buying surge 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.


 

Albertsons Reports on Q2 2020

In a press release dated October 20th Albertsons Companies Inc. (ACI) announced results for the second quarter of FY 2020 ending September 12th.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)

2nd Quarter Ending

September 12th 2020

September 7th 2019

Difference (%)

Sales:

$15,757,600

$14,176,700

+11.2

Gross profit:

$4,574,900

$3,941,500

+16.1

Operating income:

$562,000

$582,400

-3.5

Pre-tax Income

Net Income

$395,700

$284,500

$376,700

$294,800

+5.0

-3.5

Diluted earnings per share:

$0.49

$0.51

-3.9

Gross Margin (%)

29.0

27.8

+4.3

Operating Margin (%)

3.5

4.1

-14.6

Profit Margin (%)1

1.8

2.1

-14.3

Long-term Debt and Leases:

$16,077,000

$15,938,900

+0.9

12 Months Trailing:

Return on Assets (%)

4.3

Return on Equity (%)

41.4

Operating Margin (%)

2.6

Profit Margin (%)

1.5

Total Assets

$26,469,600

$24,735,100

+7.0

Market Capitalization

$7,130,000

  1. Note: Interest Q2 2020 $128 million. Q2 2019 $178 million.

52-Week Range in Share Price: $12.91 to $16.65 50-day Moving average $13.82

Market Close October 19th. Pre-release $14.38. Close October 20th $15.22 (+5.8 percent).

Forward P/E 7.3

Same-store sales growth, 13.8 percent. Digital sales growth 248 percent

Number of stores 2,252.

Commenting on results, Vivek Sankaran president and CEO stated "we continue to successfully execute against our strategic priorities, which translated into outstanding second quarter results. We have a value proposition that is resonating with customers and driving market share gains across all of our markets. "He added "we are in the early stages of a transformation to become a modern, growing food retailer providing a wide assortment of high quality fresh and essential goods to customers, and we remain well-positioned to generate differentiated performance and deliver an excellent shopping experience."


The Company provided guidance for FY 2020 including a 15.5 percent increase in sales and an EPS range of $2.75 to $2.85.


 

Indiana Right to Farm Law Let Stand by SCOTUS

The United States Supreme Court refused to hear a nuisance case, letting stand an Indiana Court of Appeals ruling upholding the constitutionality of the state Right to Farm Act. Himsel v. Himsel resulted from a family of landowners establishing a hog operation that plaintiffs alleged created a nuisance and devalued their property.  The plaintiffs challenged the constitutionality of the Indiana Right to Farm Act claiming that the statute was unconstitutional as it violated the Open Courts Clause and the Takings Clause of both federal and state constitutions.

 

The Indiana Appeals Court ruled for the defendant stating that it was not necessary for the farmers to prove that their specific hog farm would not have been a nuisance in 1941 when crop operations were established but only that hog farming in general would not have been a nuisance.

 

The Indiana court recognized that plaintiffs erected homes on agricultural land in continuous use since 1941.  With respect to a negligence claim, the court found no evidence that the operation was managed in a negligent manner or in violation of state regulations.  The Indiana Appeals Court affirmed the constitutionality of the Indiana Right to Farm Act.  Since the alleged odor did not amount to a substantial impairment of the use of residential property and the plaintiffs were not deprived of all or a substantially large proportion of the economic value of their properties, the court ruled that the Takings Clause of the Indiana and U.S. constitutions were not applicable. Right to Farm Acts have been enacted in all fifty states offering an affirmative defense to farmers facing nuisance lawsuits.

 

Perhaps the most significant litigation currently in progress relates to the nuisance claims against Smithfield Foods in North Carolina.  A series of verdicts against the company have been handed down by juries that awarded damages to plaintiffs alleging odor from disposal of hog manure using retention lagoons and spraying liquid waste on fields.  All the cases are currently on appeal.


 

Ovotrack Innovations

Ovotrack has introduced three modules to improve the management of packing and processing plants:-

  • Ovotrack Truck Weight

Ovotrack allows pallet weights to be recorded electronically.  This can be done either on a pallet- by-pallet basis or on the truck. Using the data from before-and-after weighing the truck on a weighbridge, weight can be distributed over individual pallets with nest-run eggs for packing or  processing. Data generated by the Ovotrack truck weight calculator obviates individual pallet weighing.

  • Semi-automatic palletizing

This software module correlates case labels with specific delivery pallets.  The module automatic creates a new pallet once the total number of cases is reached.  The module does away with the need to manually scan each case on a pallet.

  • Monitoring quality checks at point of receiving

This module informs operators receiving eggs whether samples have to be obtained for quality assurance or pathogen assays. It is also possible to warn operators that eggs are on hold due to flocks failing quality control or health standards.


 

Prevalence of Listeria in U.K. Fruit and Vegetables

The FDA has imposed a zero tolerance for Listeria monocytogenes in food products especially ready-to-eat items.  This pathogen may be responsible for severe disease or death in the immunosuppressed and aged and is the cause of miscarriages in pregnant consumers.  In recent years, listeriosis has been associated with consumption of contaminated fruit, raw milk, dairy products including soft cheeses and ice cream, cold cuts of meat, hard-cooked eggs, green produce and a range of ready-to-eat foods.

 

In a survey conducted in England during 2018 through 2019*, 1,050 samples of frozen fruit and vegetables were assayed for the presence of Listeria.  The study was prompted by an outbreak of listeriosis involving a series of fifty-three diagnosed cases among five nations caused by contaminated frozen sweet corn packed in Hungary.

 

The survey revealed that one percent of fruit samples were contaminated with more than one hundred cfu/g E. coli.  Two percent of fruit samples yielded Listeria monocytogenes. The study confirmed that 24 percent of frozen vegetables were contaminated with Listeria although at a level below 100 cfu/g. Listeria monocytogenes was identified in ten percent of frozen vegetables sampled The application of whole genome sequencing to 74 isolates identified genetic clusters suggesting a common source.  Four were from sweet corn and one cluster each for beans, peas, peppers and broccoli. 

 

The question arises as to whether listeriosis is a disease with a low incidence rate and high mortality as evidenced by the occurrence of infrequent cases with severe or even fatal outcomes in high-risk patients. The data from the survey suggest that listeriosis is a widespread under-diagnosed foodborne infection with low-grade morbidity and negligible mortality absent a predisposing condition. Infected individuals show mild influenza-like symptoms that do not result in medical intervention and hence diagnosis.

It would be instructive to evaluate U.S. produce and fruit consumed raw in comparison with vegetables that are cooked.

 

*Willis A, C. at al. Occurrence of Listeria and Escherichia coli in frozen fruit and vegetables collected from retail and catering premises in England 2018-2019.  International Journal of Food Microbiology. 334;108849. December 2, 2020


 

Legality of California Proposition #12 Upheld

Predictably the U.S. Court Of Appeals for the 9th Circuit rejected a meat industry trade group lawsuit questioning the constitutionality of California’s Proposition #12.

 

Adopted by a wide margin the law enacted by ballot in 2018 establishes housing standards for livestock and poultry with specific attention to calves, gestating sows and egg-producing hens in the State.  Proposition #12 also bans the sale of animal products in the state that were not derived from housing systems as approved for use in California.

 

Subsequent to the adoption of Proposition #2 in 2008 a number of lawsuits were filed challenging the right of California to impose housing standards on producers in other states and also on the grounds of impeding interstate commerce. The courts in all cases upheld the constitutionality of Proposition #2.

Any further litigation over Proposition #12 would be a waste of time and money. The egg-production industry has long since accepted alternatives to cage- housing for hens and is converting to aviaries and floor systems at considerable expense.


 

Customs and Border Protection Confiscate Traditional Chinese Foods

The U.S. Customs and Border Protection Service (CPB) announced seizure of 1,272 pounds of moon cakes and 350 pounds of other prohibited food items illegally imported from China and other Southeast Asian nations.  It is traditional during the Mid-autumn Festival that took place during the first week of October to give and receive moon cake pastries containing egg products.  There is an obvious risk of introducing avian influenza and exotic Newcastle disease into the U.S. in partly cooked foods and confectionery. 

CBP Supervisory Agricultural Specialist, Ms. Barbara Hassan, stated, "our specialists perform a critical border security role in safeguarding America’s agriculture and nature resources from harmful pests and plant and animal diseases”. 

 

It is noted that the confiscations took place in Cincinnati, an inland port of entry.  It would be interesting to determine the extent to which CPB were able to interdict moon cakes and contraband food items along the West Coast points of entry in the U.S.


 

Introduction of New Egg-containing Product

Consumers diagnosed with celiac disease who need to follow a gluten-free diet can find newly formulated Italian pasta dishes including this gourmet Italian-Style Stuffed Shells with Ricotta in Herb Marinara Sauce. Eggs help bind the ricotta cheese filling together for product integrity. 


 

Acme Markets to Acquire Balducci Stores

Acme Markets, a subsidiary of Albertson’s Company will acquire 27 King Foods Markets and Balducci’s Food Lover’s Markets from KBUS Holdings in a $96 million transaction.

 

On completion of the acquisition of the stores that are in Chapter 11 Bankruptcy, Albertson’s will retain banners and incorporate the new stores into the mid-Atlantic Division.

 

Jim Perkins, Division president for the Albertson’s region stated, “We look forward to welcoming King Foods Markets and Balducci’s Food Lover’s Markets into our family.”  He added, “Our company has a history of managing small differentiated chains that offer an elevated experience.”

 

King’s operates 25 specialty gourmet supermarkets in New Jersey, New York and Connecticut.  The Balducci chain has nine stores in New York, Connecticut, Maryland and Virginia. Albertson’s operates 2,252 retail stores, 1,726 pharmacies and 402 fuel centers in 34 states and the District of Columbia and is currently the second-largest U.S. supermarket chain.

 


 

Kroger Expands Plant-Based Simple Truthâ„¢ Range

The Simple Truth™ plant-based collection has been expanded by more than 20 products including vegan cookie dough, oat milk, deli slices, sausages, snacks and dips.  The company anticipates that by the end of 2020, a total of 75 products will be offered in the range.

 

Brad Studer, Senior Director of Our Brands, noted, “As our customers’ eating styles and health and wellness goals continue to evolve, Simple Truth™ will continue to deliver an unmatched combination of quality and value for natural, organic, and plant-based foods.”  Consistent with the plant-based foods initiatives, King Soopers, a mountain-state banner of Kroger, was recognized in the Good Food Retail Report as being the “Best Plant-Based Store-Brand Assortment.”

 


 

Chlorpyrifos Implicated in Parkinson's Disease in Louisiana

Further to the editorial on October 9th deprecating the use of chlorpyrifos that has detrimental effects on the development of fetal and neonatal brain development, Dr. Martin Hugh-Jones Emeritus Professor, Louisiana State University, forwarded a reference to an epidemiologic study on Parkinson’s disease in Louisiana covering 1999 through 2012.  Martin is an eminent epidemiologist now affiliated in retirement with the Department of Environmental Sciences, College of the Coast and Environment at LSU in Baton Rouge. 

 

Together with colleagues at the Louisiana Geologic Survey, Hugh-Jones investigated the prevalence of Parkinson’s disease based on hospital data and correlated the findings with local agricultural crops, pesticide use, and aquifer recharge.  By mapping cases against known crop distributions and pesticides using zip code address locations and census data it was possible to produce a series of maps overlaying the prevalence of Parkinson’s disease and agricultural use.  The areas affected by Parkinson’s disease were associated with commercial forests, woodlands, and pastures where arbor-pastoral pesticides including 2,4-D, chlorpyrifos, and paraquat are used.  The study clearly indicated a higher risk of Parkinson’s disease in areas applying the three agricultural pesticides including chlorpyrifos, suggesting that the deleterious effect is not limited to the immature nervous system.


Prof. Martin E. Hugh-Jones

 

Hugh-Jones, M. E. et al. Parkinson’s Disease in Louisiana, 1999-2012: Based on Hospital Primary Discharge Diagnosis, Incidence, and Risk in Relation to Local Agricultural Crops, Pesticides, and Aquifer Recharge. Int.J.Environ.Res.and Public Health. 171584;doi.org/10.3390/ijerph17051584 (2020).

 


 

Toxicity Attributed to Nutritional Supplement in Uganda

In March 2019 The World Food Program, recipient of the 2020 Nobel Peace Prize, was inadvertently responsible for an extensive outbreak of food poisoning. The event resulted in 278 cases with five fatalities. Super Cereal, a combination of wheat, corn, soybean protein fortified with minerals and vitamins blended into a flour was responsible for the outbreak.  An intensive investigation into the cause was conducted, led by Professor Chris Elliott of the Queen’s University Belfast, Institute for Global Food Security, assisted by the WHO, the Ministry of Health in Uganda, the U.S. CDC and the FDA.

 

Analysis of the implicated batch of Super Cereal demonstrated the presence of tropane alkaloids, including atropine and scopolamine.  Toxin present at sublethal levels were attributed to the presence of datura seeds.  The affected nutritional supplement emanated from a plant in Turkey and reflected deficiencies in quality control. Datura stramonium is native to India, but occurs in the U.S. as jimson weed, in addition to the E.U. and Asia. Seeds may contain a high levels of scopolamine, an alkaloid responsible for stimulation of parasympathetic receptors. 

 

Super Cereal manufactured by a plant in Austria was found to be innocuous.  Following identification of the affected batch, remaining Super Cereal derived from plants other than Turkey was released and consumed without untoward effect.  Investigation showed that the blending plant in Turkey shipped product to Algeria, Tanzania, and Kenya that in turn distributed potentially affected product to Uganda, the Central African Republic, Rwanda and Somalia. It is evident that many cases of toxicity were not detected in nations receiving the contaminated product.


 

Online Sales Days Kick Off Holiday Season

Target reported sales on Wednesday and Thursday, 14-15th October as exceeding the previous internet promotion by a factor of 2.5.  Christina Hennington, Chief Merchandising Officer for Target stated, "as we kick off the holiday season with Target Deal Days, guests shopped thousands of items making this our biggest and most successful event ever".  Target reported that the most popular deals were for Apple iPods, KitchenAid mixers and toys.  Customers used same-day fulfillment options including drive-up and order pick-up that grew threefold from 2019.

 

Amazon claimed that its Prime Day broke records with third-party sellers reaching $3.5 billion in nineteen nations up 60 percent from 2019.

 

Best Buy offered "Black Friday" deals to coincide with Amazon and Target claiming increased sales value, but without disclosing specific figures.

 

COVID restrictions are changing shopping habits, intensifying online purchasing and trending towards items that conform to a stay-at-home lifestyle. The fact that Target highlighted the demand for KitchenAid mixers suggests more home cooking and hence consumption of eggs.


 

AEB Partners with Appetite for Health

The American Egg Board has announced a strategic partnership with Appetite for Health, a national nutrition news media company.  Six 45-second video segments will be produced to be viewed by 70 million on local TV stations during late October.  The videos will also be available for use by state promotional organizations and egg producers through 2021.


 

COVID Imposes Serious Financial Burden on School Districts: Eggs to Provide Benefits.

The School Nutrition Association has quantified the impact of COVID on school districts as a result of COVID at $483 million.  Over 70 percent of school districts anticipate losses for the 2019-2020 school year and will extend through the succeeding year.  Observers expect long-term consequences for school feeding including the critical provision of food for low-income children. During March and April schools collectively lost 400 million meals compared to the corresponding months in 2019 as determined by the Government Accountability Office.

 

Reggie Ross, President of the School Nutrition Association is urging Congress to make funds available to continue feeding children both in school and through extracurricular programs.  The Heroes Act 2.0 includes a $175 billion coronavirus aid for K-12 schools including $5 billion for safety measures including PPE and modifications to ventilation systems in cafeterias and kitchens.  The bill passed by the House includes reimbursement for 55 percent of the cost associated with school nutrition during the 2019-2020 academic year.  Ross was quoted as "we urge the Senate to pass Heroes Act 2.0 providing desperately needed emergency relief funds for school meal programs to support America students".

 

Katie Wilson of the Urban School Food Alliance, a non-profit representing the largest school districts stated, "major districts have loss significantly and continue to lose money as they try a variety of ideas to increase participation rates and bring families back to pick up their meals".  She added, "without government action districts are bracing for the worst and many don’t know what the future holds".  She rhetorically asked, "how do you continue to cut into a program that is underfunded to start with?"

 

In a related matter, the USDA announced a continued extension of flexibilities with regard to school feeding that allows free school meals through the entire 2020-2021 school year.  This is essentially a stop-gap measure that does not reimburse school districts for additional expenses associated with COVID prevention measures.

 

Against this backdrop the AEB is continuing to promote eggs in various presentations for school meals. In times of financial stringency the inherent nutritional qualities of eggs and the provision of nutrients at minimal cost presumes more servings of our product.


 

Novel Approach to IB Vaccine Ineffective

Dr. Brian Jordan of the Department of Population Health and Poultry Science at the University of Georgia attempted to develop a novel infectious bronchitis (IB) vaccine using vesicular stomatitis virus (VSV) carrying IB spike protein of Georgia 08 variant.  The project #709, funded by the USPOULTRY Foundation evaluated immunogenicity of the GA 08-b VSV construct in specific pathogen-free chicks. Unfortunately the candidate vaccine virus was inadequately immunogenic irrespective of various routes of administration.

 

It is possible that research resulting from the development of a COVID-19 vaccine might eventually be applied to an infectious bronchitis product given molecular biological similarities among coronaviruses.  It is hoped that scientists at the University of Georgia will continue to pursue the development of alternative vaccines. Current live attenuated products while providing levels of immunity adequate to suppress clinical signs and mortality. Commercial vaccines are frequently unable to provide solid protection against continually emerging variants that are financially significant in terms of degradation of performance and shell quality.


 

Federal Judge Reverses USDA Action on SNAP Benefits

In an article in the Washington Post, District Chief Judge Beryl Howell ruled that the USDA acted illegally in curtailing SNAP benefits that would have affected tens of thousands of recipients.  udge Howell noted that the USDA did not adequately address how an arbitrary decision to remove discretionary ability from cities and impose work requirements would affect citizens in the U.S.

 

In her ruling Judge Howell noted that the Administration rule "abruptly altered decades of regulatory practice leaving states scrambling amid exponentially increasing food insecurity".


Judge Beryl Howell

Judge Howell was apparently influenced in her decision by the ongoing COVID-19 pandemic with resulting unemployment requiring continuation and real expansion of SNAP benefits.


 

Welcome to New Sponsor BinTrac

BinTrac has joined the team of sponsors of EGG-NEWS.  BinTrac is a product line of HerdStar based in Mankato, MN.  The company is committed to innovative technology to optimize production efficiency and profitability of agricultural enterprises.  The range of BinTrac products includes weighing modules, interface options, remote data collection, and specific applications for controlling feed intake of flocks.

 

BinTrac weighing modules incorporate patented mounting brackets, load cells and electronic modules to transmit and store data. 

  • The patented mounting bracket lifts the bin.
  • BinTrac supplies  high capacity load cells in either pancake or canister versions with a capacity of up to 25 tons.  A variety of plates are available to facilitate original or retrofit mounting.
  • The indicator module provides a readout of the weight of feed in the bin and provides a record of 24-hour feed use over each of four previous days and records the quantities of feed  delivered over the past four feed fillings for each bin. The installation is temperature compensated and is lightning protected.
  • BinTrac supplies a standard indicator module, capable of recording four bins and is available in either a four- or six-digit configuration.

 

It is axiomatic that accurate feed consumption records are critical to management of flocks.  Consumption data can be correlated with average hen weights and environmental temperature to enable selection of diets applying phase feeding of flocks.  Since feed represents two-thirds of nest run egg costs, daily consumption data is an important management variable.  An unexplained drop in feed intake may indicate the presence of a disease before clinical signs are apparent.  Accurate feed consumption data is therefore an important component of health monitoring.  Data provided by a BinTrac system eliminates the need to climb bins contributing to farm safety.  Monitoring flock consumption simplifies compilation of weekly delivery schedules and rationalizes production in both on-complex or remote feed mills improving efficiency through planning and reducing unnecessary deliveries.

 

Information on BinTrac components and systems can be accessed by clicking on to the BinTrac logo on the right side of the welcome page.

 


 

Broadband Service in Rural Areas

In March 2018 Congress allocated $600 million to the USDA to expand broadband service in rural areas.  The ReConnect program administered by USDA provided connections to 167,000 households, 17,000 rural small businesses and farms and 500 healthcare centers and educational facilities in 33 states.  The second round of the ReConnect program was initiated in April 2020 with 172 applications.  USDA is also administering broadband connection under a $100 million Congressional allocation through the CARES Act. 

 

Further information on the program is available at <www.usda.gov/reconnect>.

 

Since the advent of COVID, broadband connection has become even more important given the restrictions on in-person attendance at K-10, colleges, and other educational institutions.  Small businesses and farms have also benefited from enhanced connection in rural areas.

 

 


 

Advances in Robotic Customer Service

Ocado Group has acquired equity in Myrmex Robotics to develop systems that enhance service for customers using click-and collect purchases.  According to Ioannis Kanellos, founder and lead strategist for Myrmex, “the system is based on robots shuttling among racks and containers enabling space-saving storage and efficient retrieval.”  According to informed observers, orders are assembled and bagged and placed in numerically identified bins.  Autonomous guided vehicle technology then retrieves bins associated with a specific order.

 

Ocado Group, based in the UK, provides mechanization and robotic inventory management for distribution centers. The company has equity participation by Marks & Spencer in the UK and Kroger in the U.S.  Since establishing an exclusive partnership with Ocado in 2018, Kroger is in the process of erecting 20 fulfillment centers.


 

Commentary


USDA Criticized Over the Farmers to Families Food Box Program

The $2.7 billion Farmers to Families Food Box Program initiated in May has come under intense criticism for inefficiency and inequity. Although it is acknowledged that the program was established in an emergency, there was evidently lack of planning and defective execution by the USDA, especially with regard to accepting bids from unqualified distributors, an overt lack of physical and financial control and failure to recognize and respond to emerging problems.  Many of the contractors selected were either unable or disinclined to deliver boxes to remote regions with a high proportion of needy citizens.  It took until September for USDA to recognize that there were serious inconsistencies in distribution leading to the designation of Opportunity Zones to receive special attention.

While the USDA was implementing the first phase of the program, the need for supplemental food assistance became greater as the economic effect of COVID-19 intensified especially in low-income areas of our nation. Many of the operators of food banks and faith-based organizations complained of the quality of food provided.  The discrepancy between what was delivered and prevailing prices suggested that there was both inefficiency and over charging in both states and territories including Alaska, Puerto Rico and Maine.

 

The entire program was unnecessary as the objective of feeding could have been achieved by simply increasing appropriations and lifting barriers to enrollment in the Supplemental Nutrition Assistance Program (SNAP). Alternatively by providing block grants, food banks would have been able to buy food and vegetables directly from farmers within their own areas of operation.  This would have shifted the benefits to farmers rather than contract distributors serving as middlemen.


The Box Program generated "photo-opps"

The USDA failed to recognize the importance of free school meals to children subjected to food insecurity concurrent with the progress of COVID-19 during the second and third quarters.  It was only in August that the USDA announced that schools could continue serving free meals throughout the end of 2020 subject to availability of funding.

 

A justifiable criticism of the program was that politically fliers were included in boxes, an action considered to be inconsistent with a humanitarian program.


 

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Dr. Simon M. Shane
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