FDA Guidance On Outside Access – An Exercise in Evading Reality

The FDA have at last issued the draft of the Guidance Document entitled, Prevention of Salmonella Enteritidis in Shell Eggs During Production, Storage, and Transportation (Layers with Access to Areas Outside the Poultry House):  Questions and Answers Regarding the Final Rule. This draft Guidance Document for the industry attempts to bridge the gap between USDA proposed Organic Rule and the FDA July 2009 Final Rule on the Prevention Of Salmonella Enteritidis (SE) in Shell Eggs.  The compilers of the draft Guidance Document were obliged to essentially fly in the face of epidemiologic realities in order to conform to the USDA-AMS document but in the process have compromised both their integrity and food safety.  The divergence of objectives between the USDA-AMS mandating outside access for hens producing certified organic eggs and the FDA objective of suppressing SE has produced a document of questionable scientific merit representing an exercise in impracticality that will encourage subjective evaluation and conflicts during audits.


At the outset, the draft Guidance Document states that it does “not have the force and effect of law and is not meant to bind the public in any way”.  The document as stated “should be viewed only as a recommendation unless specific regulatory or statutory requirements are cited”. This is a wishy-washy denial of responsibility.


The first inconsistency between the FDA and the USDA-AMS is the status of enclosed covered porches.  The FDA criterion for differentiating between “inside” and “outside” is whether flocks are protected from the elements and predation and whether temperature, humidity and lighting can be controlled.  In contrast, the proposed Organic Rule clearly disqualifies porches as outside access.  The difference between the USDA-AMS and FDA approaches reflects their diverging objectives. Implicit in the determination of the National Organic Standards Board that porches are “inside” the house is the intent to discriminate against in-line complexes with houses with enclosed porches.  The FDA is evidently motivated by the objective to reduce SE infection in flocks with possible vertical transmission to consumers.


In order to produce a guidance document that satisfies the organic mandate for outside access, FDA has attempted to thread the needle with respect to measures to prevent infection of flocks.  Section C of the draft Guidance Document contains questionable suggestions to reduce the risk of SE infection including:-

  • “Limiting layers’ access to areas outside the poultry house to hours when wild birds or other animals are not likely to be present’.  Wild birds are diurnal and raccoons, foxes, and skunks are nocturnal.  What hours can a farm operator, therefore, select to reduce the possibility of introduction of SE to a flock?
  • Steps must be taken to “ensure that there is no introduction or transfer of SE into or among poultry houses”.  Following the initial audits of laying houses in accordance with the “Egg Rule”, farm operators were cited for apertures in walls and doors larger than two inches in diameter that would allow ingress of rodents.  The organic rules mandate large openings to allow unrestricted access of the flock to the outside access.  This dilemma is all too evident in the August 2002 FDA draft Guidance Document that accepts the principle of outside access.
  • The draft Guidance Document indicates that houses must be disinfected before new laying hens are added if the previous flock yielded SE on an environmental test.  Section C14 states that, “The requirement does not apply to areas outside the poultry house.”  Given that SE can remain viable in soil for extended periods, the FDA is ignoring environmental realities.  If the previous flock was infected with SE with a high proportion of hens showing intestinal colonization, it must be presumed that infection will be present in areas outside the house and especially around the perimeter of the house where hens congregate.  Decontaminating the house but ignoring areas of outside access is obviously an exercise in futility.  Possibly in recognition of this reality, Section C15 addresses cleaning and disinfection of an area outside a poultry house.  Suggestions include tilling, that would remove vegetation required in terms of the organic rule; “Rotation of the area outside the poultry house” is clearly impractical for other than pastured flocks given the requirement of approximately two square foot per hen. The Document includes “allowing the potentially-contaminated area to lie dormant between flocks”.  Given the viability of Salmonella in excess of six months on damp soil, this is also an impractical suggestion and reflects a denial of microbiologic reality included for the purposes of issuing the document, irrespective of potential risk.


Due to lack of knowledge on the part of those responsible for compiling the 2009 Final Rule and an institutional disinclination to consider professional counsel that was offered, the FDA omitted vaccination as a requirement despite considerable evidence in the late 1990s as to the effectiveness of vaccines in suppressing SE.  It appears from Section E of the draft Guidance that the FDA is now aware that the industry might perhaps be using vaccines, but the document only considers vaccination against SE as “most effective when it is one part of a larger SE prevention plan”. Covering all bases however, FDA “encourages the use of an identified vaccination program that is effective for a particular farm”.


Section D1 of the draft Guidance mandates sampling of a house environment for the presence of SE but this “does not apply to areas outside the poultry house”.  This is a clear indication of “don’t look, don’t find” response to the risks of outside access with respect to SE.  If the draft Guidance Document required mandatory sampling of soil outside the layer house, as would be logical, the FDA guidance would be at odds with the outside access requirement of the USDA-AMS Certified Organic rule.  Clearly, there is a dissonance between the two Agencies.  The USDA-AMS is concerned over non-GMO ingredients fed to hens, the absence of pesticides and “organic” standards of welfare. In contrast the FDA is attempting to reduce vertical transmission of SE to consumers. This divergence leads to Guidance Documents framed to create inter-Departmental harmony rather than addressing real world problems.


The National Organic Program does not consider food safety and the FDA is avoiding responsibility as denoted in the discrepancies between the Organic Rule requiring outside access and the FDA “suggestions” in their draft Guidance Document.  This disharmony would be resolved by a dedicated Food Safety Agency that would have only the single objective of protecting the food supply to the benefit of consumers.


Egg Industry News

Crop Progress

Status of 2022 Corn and Soybean Crops


The USDA Crop Progress Report released on August 15th documented moderate recovery in the progress of both soybean and corn crops still lagging their respective 4-year averages. Sixty two percent of corn was at the dough stage up from 45 percent last week. Seventy four percent of the soybean crop was setting pods on August 14th. The fact that a high proportion of the corn crop was planted over a two-week period created widespread vulnerability to heat and drought at the critical stage of silking and will probably have an adverse impact on corn yield in affected areas.


For the week ending August 14th topsoil and subsoil moisture levels are now similar to the corresponding week in 2021 as some states in the corn-belt have had relief from drought. The average percentage topsoil moisture for the eight largest corn and soy-producing states averaged 47 percent (last week 45 percent) combining the USDA classifications of “very short” and “short”. The range among states for the two driest categories was 22 percent for Ohio to 82 percent for Kansas. EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through November.





August 7th

August 14th

4-Year Average

Corn Silking (%)

Corn Dough (%)

Corn Dented (%)










Soybeans Blooming (%)

Soybeans Setting Pods (%)










Crop Condition


V. Poor





Corn 2022

Corn 2021











Soybeans 2022

Soybeans 2021














V. Short




Topsoil moisture: Past Week





Past Year





Subsoil moisture: Past Week





Past Year






Topsoil Moisture Percentage “V. Short” and “Short” W/E August 14th (August 7th)

IL 23 (24)

IA 54 (50)

KS 82 (74)

MI 28 (35)

MN 28 (28)

MO 58 (50)

NE 78 (74)

OH 22 (26)


During mid-July AccuWeather projected that drought and heat will reduce the corn crop to a range of 14.0 to 14.3 billion bushels compared to the WASDE August value of 14.36 billion bushels (14.5 in July). The September WASDE Report will update yield and will be compared to the findings of the ProFarmer 2022 Crop Tour.


Reference is made to the August 12th WASDE Report #627 in this edition and the Grain Storage Report retrievable under the STATISTICS Tab.





In a preamble to the May WASDE Report the USDA cautioned that events in Eastern Europe following the invasion of Ukraine by the Russian Federation would have unpredictable consequences. This prediction stands in August It is evident that the 2022 harvest of all crops in that nation will be seriously reduced and that Black Sea shipping continues to be disrupted. This situation has no short-term prospect for resolution.


The August 12th 2022 WASDE adjusted corn and soybean data from July for the 2022 season consistent with planting commencing at the end of April with delays in the major production areas due to inclement weather. The August WASDE projections of the acreages of corn and soybeans to be planted were updated, with corn planted on 89.8 million acres and soybeans on 88.0 million acres.


The August 2022 WASDE initial estimate of corn yield was lowered to 175.4 bushels from 177 bushels per acre, due to the delay in planting and drought with extreme heat in July. Yield was 175.8 bushels per acre in 2021. The estimate of soybean yield was raised to 51.9 bushels from 51.5 bushels per acre in the July WASDE. Yield was 51.2 bushels per acre in 2021.


The August 2022 USDA projection for the ending stock of corn was lowered by 5.9 percent from 1,470 million bushels to 1,388 million bushels assuming predetermined production level, domestic use and exports. The USDA raised the projected ending stock for soybeans by 6.5 percent from 230 million bushels in the July report to 245 million bushels. The ending stocks for corn and soybeans will be revised in the September WASDE in the light of crop progress and exports as influenced by geopolitical events.


The August 2022 WASDE projection retained the price of corn at $6.65 per bushel. The projected price for soybeans was reduced by 5 cents per bushel to 1,435 cents per bushel. Soybean Meal was unchanged at $390 per ton. All three of the price projections deviate from the August 12th CME quotations for August delivery.


Projections included in the July 2022 WASDE reports reflect the known impact of the invasion of the Ukraine. It is evident that production and hence exports of wheat, corn and sunflower by Ukraine will be sharply reduced compared to recent annual averages. It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities during the current market year despite drought and COVID-related disruption of imports during the first quarter of 2021.


Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS based on USDA data.



Based on known 2022 planting, emergence and crop progress data the projected corn harvest for 2022 was lowered 3.0 percent to 14,358 million bushels compared to 15,062 million bushels in 2021. If farmers maintained their application rates of more expensive fertilizer to maximize yields the projected 2022 harvest will be 5.2 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was reduced by 25 million bushels to 5,325 million bushels. The “Ethanol and Byproducts” category was unchanged at 5,375 million bushels despite increased domestic demand for E-10 and other blends following relaxation of COVID-19 restrictions and despite escalation in fuel cost. Projected corn exports were reduced 25 million bushels to 2,375 million bushels based on recent and projected shipments to China and Mexico and taking into account the anticipated availability from Eastern Europe. Ending stocks were 5.9 percent lower than in the July WASDE to 1,388 million bushels.


The forecast USDA farm price for corn was unchanged from the July WASDE Report at 665 cents per bushel. At 15H00 August12th after release of the WASDE the CME quotation for September delivery was at 636 cents per bushel, down 13.2 percent from the quotation on July 12th for August delivery and currently 4.4 percent below the August USDA projection.



Harvest Area

81.8 m acres

(89.8 m. acres planted, harvest corresponding to 91.1% of acres harvested)


175.4 bushels per acre

(was 177 bushels per acre since the December WASDE.)

Beginning Stocks

1,530 m. bushels


14,358 m. bushels


25 m. bushels

Total Supply

15,913 m. bushels

Proportion of Supply

Feed & Residual

5,325 m. bushels


Food & Seed

1,450 m bushels


Ethanol & Byproducts

5,375 m. bushels


Domestic Use

12,150 m. bushels



2,375 m. bushels


Ending Stocks

1,388 m. bushels

 8.7 %

Ending Stock-to-domestic use ratio


(Was 12.0 % in the July 2022 WASDE Report)

1 metric ton = 39.368 bushels

Average Farm Price: 665 cents per bushel. (Unchanged from the July WASDE Report)



Based on established planting, emergence and crop progress data the USDA raised the projection for the 2022 soybean crop by 0.6 percent to 4,531 million bushels with an estimated yield of 51.9 bushels per acre. With respect to use parameters, crushings were held at 2,245 million bushels with exports 0.9 percent higher to 2,155 million bushels. This is despite concerns over availability of oilseeds from Eastern Europe and the drought in Brazil and Argentina. There is speculation over orders from China for the 2021-2022 market year. This is attributed to presumed reduced requirements for imported ingredients required for animal feed and the reality that traders in China are obligated to order on a stable or declining market unless faced with shortages. Prior to 2018, China, our largest trading partner for agricultural commodities imported the equivalent of 25 percent of U.S. soybeans harvested. Ending stocks were raised 15 million bushels to 245 million bushels.


The USDA August projection for the ex-farm price for soybeans for the 2022 harvest was reduced 5 cents per bushel from the July WASDE Report to 1,435 cents per bushel. At 15H00 on August 12th following release of the WASDE, the CME quotation for September 2022 delivery was 1,531 cents per bushel, down 62 cents or 3.9 percent lower compared to the July 12th 2021 quotation for August delivery and 96 cents per bushel or 6.7 percent higher than the August USDA-WASDE projection of 1,435 cents per bushel for 2021/2022.



Harvest Area

87.2 m acres

(88.0 m. acres planted, harvest corresponding to 99.1% of planted acreage)


51.9 bushels per acre

(Was 51.5 bushels per acre in the July WASDE)

Beginning Stocks

225 m. bushels

(Was 215 million bushels in the July WASDE)


4,531 m. bushels


15 m. bushels

Total Supply

4,771 m. bushels

Proportion of Supply


2,245 m. bushels



2,155 m. bushels



102 m. bushels



24 m. bushels


Total Use

4,526 m. bushels


Ending Stocks

245 m. bushels


(Up 15 million bushels from the June 2022 WASDE)

1 metric ton = 76.34 bushels


Average Farm Price: 1,435 cents per bushel (Down 5 cents from the July 2022 WASDE Report)


The projected supply of soybean meal was unchanged from July at 52.850 million tons consistent with current production driven by domestic and export demand for soy oil for biodiesel and meal. Domestic use was held at 39.2 million tons. Exports were unchanged at 14.0 million tons. The USDA held the ex plant price of soybean meal at $390 per ton. At 15H00 on August 12th the CME quotation for September 2022 delivery of soybean meal was $466 per ton, down 2.5 percent or $12 per ton percent compared to the August 12th CME quotation and 19.5 percent above the August USDA-WASDE projection for 2022.



Beginning Stocks

0.400 m. tons


52.850 m. tons


0.450 m. tons

Total Supply

53.700 m. tons

Domestic Use

39.200 m. tons


14.000 m. tons

Total Use

53.200 m. tons

Ending Stocks

0.500 m. tons

  1. = million


Average Price ex plant: $390 per ton (Unchanged from the July 2022 WASDE Report)




The price projections based on CME quotations for corn and soybeans suggest increasing production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

  • For each 10 cents 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 live pound
  • For each $10 per ton change in the cost of soybean meal:-
  • The cost of egg production would change by 0.35 cent per dozen
  • The cost of broiler production would change by 0.30 cent per live pound.




With respect to world coarse grains and oilseeds the July WASDE Report included the following appraisals by USDA:-



“This month’s 2022/23 foreign coarse grain outlook is for lower production, larger trade, and smaller ending stocks relative to last month. Foreign corn production is down, with reductions for the EU and Serbia partially offset by increases for Ukraine, Malawi, Russia, and Turkey. EU corn production is sharply lower as extreme heat and dryness cut crop prospects for Romania, Hungary, France, Italy, Spain, Slovakia, Bulgaria, and Germany. Serbia is also reduced based on lower yield prospects. Corn production for Ukraine is higher as moderate to heavy late-July rainfall boost yield expectations. Foreign barley production for 2022/23 is higher with increases for Ukraine, Australia, Russia, Turkey, and Canada that are partly offset by a reduction for the EU”.


“Major global coarse grain trade changes for 2022/23 include forecast corn export increases for Ukraine, Serbia, Zambia, and Russia. Exports are lowered for the EU and the United States. Corn imports are raised for the EU but reduced for Vietnam. Sorghum exports are reduced for the United States, while imports are lowered for China. Barley exports are raised for Australia but lowered for the EU. Foreign corn ending stocks for 2022/23 are down 4.2 million tons to 271.4 million”.




“The 2022/23 global oilseed supply and use forecasts include higher production, crush, exports, and ending stocks compared to last month. Global oilseed production is raised 2.9 million tons to 646.0 million with higher forecasts for soybeans, rapeseed, and sunflowerseed partly offset with lower cottonseed production in the United States. In addition to higher production for the United States, soybean production for China is increased on higher area cited in recent provincial reports. Australia’s canola crop is raised 0.7 million tons to 6.1 million on higher yields resulting from favorable weather conditions. Russia’s rapeseed crop is forecasted at a record 3.9 million tons, up 1.1 million from the previous forecast on sharply higher area. Russia’s sunflowerseed production is raised 1.5 million tons to 17 million, also on higher reported area. Sunflowerseed production is reduced for the EU and South Africa. Lower EU production reflects hot, dry conditions in July”.


“Global 2022/23 oilseed crush is raised on higher soybean crush for Brazil and higher rapeseed and sunflowerseed crush for Russia. With increased supplies, rapeseed exports are raised for Australia and Russia. Global rapeseed exports are also raised with the addition of Uruguay to global supply and demand estimates. Sunflowerseed imports are raised for the EU and Belarus paired with increased exports for Russia and Ukraine. Global oilseed stocks are raised with higher soybean and rapeseed stocks partly offset with lower sunflowerseed stocks”.


Updated World production, including the U.S. and use of total grains and oilseeds is summarized for the 2020/2021 season taking into account Northern and Southern Hemisphere production:-


Factor: billion m. tons

Coarse Grains








World Trade






Ending Stocks



*Values rounded to billion metric ton

(1 metric ton corn= 40 bushels) (“ton” represents 2,000 pounds)


Egg Week

USDA Weekly Egg Price and Inventory Report, August 18th 2022.

Market Overview

  • The average wholesale unit revenue for Midwest Extra-large and Large sizes was sharply lower by 46 cents per dozen or 18.9 percent from the past week continuing the decline from unprecedented high prices. Mediums were down by 7.7 percent but at a less pronounced downward trajectory compared to other sizes indicating greater demand for this category although supply will increase as many pullet flocks enter production. Retail sales are projected to be relatively lower over the short-term given stock levels but should be sustained by consumer perceptions of value in an inflationary environment. Availability and hence prices are influenced by previous depletion of more than 31.1 million hens in 13 large complexes in nine states extending from the last week in February through the first week in June.
  • Total industry inventory decreased 1.9 percent overall this past week to 1.73 million cases with a 1.9 percent decrease in shell eggs but with a concurrent 3.3 percent increase in breaking stock. Wholesale unit prices during the first half of 2022 through July contrasted favorably with the corresponding periods in both 2020 and 2021 that were characterized by low ex-plant unit revenue. Although wholesale Midwest prices have fallen 35 percent in two weeks, generic eggs are still yielding high positive margins. The USDA benchmark average combined costs of nest-run was 80.3 cents per dozen in July (feed, chicks, housing, labor and fuel), in addition to the average cost of grading, packaging and delivery amounting to approximately 50 cents per dozen according to the EIC.
  • It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the USDA regional inventory figures published weekly, especially over the short term. The seasonal strategy of retailers is to adjust purchases only in response to retail demand and to hold down inventories in their DCs and stores while marking up shelf margins and pressuring suppliers for rapid replenishment of stocks to DCs and through DSD. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are only recently featuring featuring Medium and Large sizes.
  • Due to the depletion of more than 31.1 million hens through June 6th from HPAI, unseasonal unit revenue will now be a reality through August and presumably extending through mid-summer with prices continuing to decline as flocks are restocked as noted during the past week. Retailers are expected to maximize shelf prices in relation to demand with minimal promotion of generic Extra large and Large.
  • The current relationship between producers and chain buyers based on a single price discovery system constitutes an impediment to a free market. The benchmark price amplifies both downward and upward swings as at present and functions to the detriment of the industry over the long term. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.
  • According to the USDA the U.S. flock in production was down 0.1 million or <0.1 percent to 295.4 million hens during the week ending August 17th. The producing flock includes about 3.0 million molted hens that resumed laying during the past week plus 4.0 million pullets attaining production.
  • There is some prospect of a return in the food service sector but with frozen and dried egg prices stable or moderately lower over the past three weeks. The ex-farm price for breaking stock on average was 9.4 percent lower this past week to 159.0 cents per dozen. Checks delivered to Midwest plants were down 11.1 percent to 152.0 cents per dozen. Prices for breaking stock will remain high in relation to season for the duration of the recovery period as replacement flocks are reared, reminiscent of 2015-2016.


Week in Review


According to the USDA Egg Market News Reports released on August 15th, the Midwest wholesale price for Extra-large was down 18.8 percent to $2.05 per dozen; Large size was down 19.0 percent to $2.01 per dozen; the Medium price was down 7.7 percent to $1.57 per dozen as delivered to DCs. Prices should be compared to the USDA benchmark average 6-Region blended nest-run cost of 80.3 cents per dozen (excluding provisions for packing, packaging materials and transport amounting to 50 cents per dozen according to the EIC) during July 2022. The progression of prices during 2022 to date is depicted in the USDA chart reflecting three years of data, updated weekly.


 The August 15th 2022 edition of the USDA Egg Market News Report documented a USDA Combined Region value rounded to the nearest cent, of $2.59 per dozen delivered to warehouses for the week ending August 9th 2022. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $2.48 per dozen. At the high end of the range, price in the South Central Region attained $2.68 per dozen. The USDA Combined Price last week was approximately $1.75 above the 3-year average. This past week Midwest Large was approximately $1.50 above the corresponding week in 2021. Prices fell this week due to decreased demand. Future cases of avian influenza in egg-production complexes are unlikely but diagnoses in backyard flocks in numerous states and on three turkey units in Utah during July denote continued shedding by migratory waterfowl and possibly domestic wild birds. Spillover to commercial egg, turkey and broiler flocks is unlikely although cases among commercial farms have recently occurred in Quebec Province. Prices appear to have following the trend during the 2015 epornitic although for a relatively longer period and at a higher level.


Flock Size 

The USDA has adjusted the estimate of flock size to reflect depopulation of more than 31.1 million hens through June 6th due to HPAI. According to the USDA the number of producing hens reflecting August 17th (rounded to 0.1 million) was down 0.1 million or <0.1 percent to 295.4 million. The total U.S. flock includes about 3.0 million molted hens due to come back into production with approximately 4.0 million new pullets reaching maturity during the week, offset by routine flock depletion in addition to losses over the past three months due to HPAI. Based on inventory level the hen population producing eggs should now be in balance with consumer demand during late-summer. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Imbalance between supply and demand drove prices upwards to 2015 epornitic levels as recorded during April through July. Prices will continue to fluctuate over the remainder of the month but will enter a decline through the third quarter as flocks are replaced and demand ebbs before Thanksgiving. Prices of shell eggs and products will however depend on the contribution to supply of new pullets and molted hens.


According to the USDA the total U.S. egg-flock on August 17th was raised 0.4 million to 301.0 million hens including second-cycle birds and those in molt. The nominal difference of 5.6 million between hens in production and total hens is an approximate figure but denotes more molted hens due to resume production. At present there are at least 30 million fewer hens in both the total and producing flocks with the difference equivalent to 10.0 percent of the pre-HPAI national flock. .



Cold storage stocks of frozen products in selected regions on August 16th 2022 amounted to 2.474 million pounds (1,125 metric tons) of frozen egg products, 1.0 percent lower than the inventory of 2.498 million lbs. on August 1st 2022. The monthly USDA Cold Storage Report below quantifies a reduction in the actual total stock level.


The most recent monthly USDA Cold Storage Report released on July 22nd 2022 documented a total stock of 23.7 million pounds (10,766 metric tons) of frozen egg products on June 30th 2022. This value was down 7.0 percent from the June 30th 2021 value of 25.3 million pounds.


June 30th frozen egg inventory was up 7.9 percent from May 31st 2022 despite depletion of 31.1 million hens. Compared to June 30th 2021 yolks were up 44.2 percent to 870 million lbs.


A total of 85.4 percent of combined inventory (20.24 million lbs.) comprised the categories of “Whole and Mixed” (33.7 percent) and “Unclassified” (51.7 percent). The lack of specificity in classification suggests a potentially big omelet somewhere requiring a more diligent approach to enumerating and reporting inventory by the USDA


Shell Inventory

The USDA reported that the national stock of generic shell eggs effective August 15th 2022 was down by 1.9 percent after a decrease of 1.1 percent during the previous week. This reflects fluctuating weekly reordering by chains with presumed slightly lower demand. Combined with breaking stock, the total inventory of shell eggs in the industry is now at 1.73 million cases (1.75 million last week, down 34,800 cases). The U.S. population of laying hens at this time is influenced by the hens culled due to HPAI, and includes the population unaffected by HPAI, flocks retained after molting (with an anticipated increase in this category depending on available housing capacity) and started pullets from chick placements in February 2022. Going forward, older hens will assume a larger proportion of the national flock as more flocks are molted especially as “at risk” pullet flocks were depleted due to HPAI.


Five of the six USDA Regions reported lower stock levels. These are listed in descending order of stock:-

  • The Midwest Region was down 3.2 percent compared to the previous week to 444,400 cases.
  • The South Central Region up 4.3 percent to 306,700 cases
  • The Southeast Region was down 1.6 percent to 260,900 cases
  • The Northeast Region was down 8.5 percent to 156,300 cases.
  • The Southwest Region was down 4.1 percent to 132,300 cases
  • The Northwest Region was down 1.0 percent to 99,900 cases


The total USDA six-area stock of commodity eggs comprised 1,729,900 cases, down 1.9 percent, of which 81.0 percent were shell eggs (81.8 percent last week). The inventory of breaking stock was up 3.3 percent to 329,300 cases. Shell eggs were down 1.9 percent to 1,400,600 cases. The slightly higher level of breaking stock suggests less demand for liquids and perhaps more movement of uncommitted eggs to the shell market. This conclusion is supported by sustained higher prices for shell eggs compared to breaking stock. The price for checks and breaking stock combined is now about 77 percent of the average value of Extra-large and Large shell eggs combined (last week 70 percent compared to 80 percent in May). The price for breaking stock and for checks is influenced by the relative demand for generic shell eggs and contract obligations with breakers. This past week Extra- large and Large shell eggs declined by 18.9 percent in wholesale price compared to breaking stock down 9.4 and checks that were down by 11.1 percent.


On August 15th 2022 the inventory of other than generic eggs (with the previous week in parentheses) comprised:-

  • Specialty category, down 13.9 percent to 32,600 cases. (was up 6.2 % to 37,900 cases)
  • Certified Organic, down 7.7 percent to 91,300 cases. (was down 1.1 % to 99,000 cases)
  • Cage-Free category, down 2.4 percent to 253,800 cases. (was down 2.4 % to 260,100 cases)


Demand for cage-free product will not increase materially while generic eggs from caged flocks and surplus down-classified cage-free eggs are on the shelf at $1.70 to $1.90 per dozen during normal supply conditions over the long term. Existing and proposed individual state legislation mandating sale of only cage-free eggs will support most of the anticipated transition from cages but total re-housing will not be completed, if ever, by the beginning of 2025, less than 29 months away. The California Department of Food and Agriculture has issued a revised draft of regulations based on Proposition #12 for comment but the Agency is two years late in releasing a final version resulting in a court-ordered moratorium on implementation for sow housing. The constitutional status of Proposition #12 will be considered by SCOTUS in October with specific consideration of the Dormant Commerce Clause relating to interstate trade. With the current proportion of non-caged flocks, cage-free eggs are surplus to demand in some areas and are becoming a commodity in many markets subjected to the same price pressures as generic eggs from caged hens. Growth in demand for organic product has been static for months.


Long-term demand for cage-free eggs is influenced by the relative shelf prices of the category in comparison with generic white-shelled eggs from caged flocks. At the other end of the price range, consumers will purchase less-expensive brown cage-free product over organic eggs when there is a differential in price greater than about $1.20 per dozen under normal balance between supply and demand. Similarly, consumers will traditionally purchase white-shelled generic eggs in preference to brown-shelled cage-free with a differential of over $1.20 per dozen.


The need for comprehensive structured statistically relevant market research on the willingness to pay for attributes such as housing, shell color, GM status and nutritional enrichment is self-evident. As in 2015, the recently concluded 2022 HPAI epornitic will provide a valuable opportunity for economists to determine the price elasticity for eggs provided funding is made available to agricultural economists at Midwest Land Grant University.



USDA-AMS posted the following August 12th national retail shell egg prices on the Egg Markets Overview report for dozen cartons with comparable prices in parentheses for the previous week:-

Large in cartons generic white $2.14 down 21.9 percent ($2.74)

Large in cartons cage-free brown $2.49 up 3.3 percent ($2.41)

Large California in Cartons $2.97 down 17.0 percent ($3.60)



National loose, (FOB dock) $1.43 down 20.6 percent ($1.80)

NYC in cartons to retailer $2.19 down 15.1 percent ($2.58)

Midwest in cartons to warehouse $2.49 down 20.7 percent ($3.14)


The following advertised retail prices for the week ending August 11th 2022, (compared with the previous week in parentheses) were posted by the AMS on August 8th for dozen packs:

USDA Certified Organic, Brown, Large: $4.14 ($3.90)

Cage-Free Brown, Large: $2.96 ($3.21)

Omega-3 Enriched Specialty, White, Large: $3.24 ($2.82)

Generic White, Large Grade A $2.86* ($2.99)*

Generic White, Large Grade A (Feature price) $2.14 ($2.74)

* based on a small sample with few promotions


Advertised price this week for Large white grade A was down $0.13 per dozen from a USDA value of $2.99 per dozen to $2.86 per dozen. Higher shelf prices will probably decrease demand for generic categories given increased availability and lower advertised prices for cage-free brown eggs. Current supply is probably now in balance with demand over a two-week period as the industry continues to divert fewer shell eggs to breaking and to continue delivering to DCs and stores to replenish inventory. This is consistent with a swing from a 4.8 percent increase in total industry stock two weeks ago followed by decreases of 1.1 and 1.9 percent. Demand for shell eggs remains moderately high coupled with reduced supply as a result of outbreaks of HPAI that ended during the first week of June affecting both in-line breakers and shell egg segments of the industry. Retail demand will continue to be supported by home cooking and baking and reinforced by dining out as COVID is now almost ignored although purchases will be limited among some demographics by inflation.


For the current week the USDA benchmark-advertised retail price of brown Cage-Free was down as documented by the USDA by 7.8 percent or $0.25 cent per dozen to $2.96 per dozen. (last week USDA advertised price was $3.21 per dozen). Advertised promotional price for certified organic was up by 6.4 percent or $0.25 per dozen to $4.14 compared to the previous week at $3.90 per dozen. This week the difference in advertised price between cage-free brown and certified organic was $1.18 per dozen ($0.69 per dozen last week) suggesting lower demand for certified organic over cage-free brown during the current week. Large week-to-week percentage fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.


Cage-free white was advertised at $2.95 per dozen, $0.01 lower than cage-free brown at $2.96 per dozen.


Features for the major categories this week by proportion included Organic (11.1 percent up from 5.3 percent last week); Cage-free (36.9 percent, down from 44.1 percent) and Omega-3 enriched, (19.8 percent, down from 30.4 percent). Other categories amounted to 32.2 percent of features with Large at 20.9 percent and ‘vegetarian-fed’ at 11.0 percent denoting the emergence of promoting generic categories.


USDA Cage-Free Data

According to the latest monthly USDA Cage-free Hen Report released on August 1st 2022, the number of certified organic hens during July 2022 was down 0.6 percent from June 2022 to 17.9 million. This is 1.1 percent lower than the average of 18.1 million during Q2 of 2022.


The USDA reported the cage-free (non-organic) flock to be 1.6 percent higher to 87.0 million in July 2022 compared to June. This is 1.4 percent higher than the average of 88.2 million during Q2 of 2022.


According to the USDA the population of hens producing cage-free and certified organic eggs in July 2022 comprised:-

Total U.S. flock held for USDA Certified Organic production = 17.9 million (18.1 million in Q2 2022).

Total U.S. flock held for cage-free production = 87.0 million (88.2 million in Q2 2022).

Total U.S. non-caged flock =104.9 million (106.3 million in Q2 2022).


This total value represents 32.3 percent (last month 32.0 percent) of a nominal 324 million total U.S. flock (but 35.0 percent of the national flock after HPAI mortality to 300 million). Hens certified under the USDA Organic program have decreased in proportion to cage-free flocks since Q1 of 2021.


The accuracy of individual monthly values is questioned given a history of either sharp changes or no change in successive months as documented over the past two years. Precise quarterly reports would be more suitable for the industry in planning expansion and allocation of capital.


Processed Eggs

For the processing week ending August 13th 2022 the quantity of eggs processed under FSIS inspection during the week as reported on August 17th 2022 was up 1.5 percent compared to the previous processing week to a level of 1,538,441 cases (1,515,845 cases last week). The proportion of eggs broken by in-line complexes was 47.7 percent (48.8 percent for the past week) almost the same, denoting relatively little change in the use of in-line eggs. The relative prices of eggs for shell sales and breaking will determine the movement of uncommitted eggs. This past week 667.6 percent of egg production was directed to the shell market, (68.1 percent for the previous week) consistent with the similar downward changes in price by breakers shell egg packers. Breaking stock inventory was up 3.3 percent this past week to 329,300 cases. There is evidence of a slight recovery in the food service sector, especially for QSRs and casual dining, complemented by increased demand from baking and eat-at-home. During the corresponding processing week in 2020 (during-COVID) in-line breakers processed 54.0 percent of eggs broken.


For the most recent monthly report dated August 10th 2022, yield from 5,846,169 cases (7,205,231cases last month) denoted a decrease in demand for liquid over the period July 3rd 2022 through July 30th 2022. Edible yield was 37.8 percent, distributed in the following proportions expressed as percentages:- liquid whole, 61.8; white, 24.2; yolk, 11.1; dried, 2.8.


All eggs broken during 2021 attained 77.8 million cases, 2.6 percent more than 2020. Eggs broken in 2022 to date attained 48.02 million cases, 2.6 percent more than for the corresponding period in 2021. This is attributed to increasing demand for egg liquids from retail, food service and QSRs and casual dining restaurants with restoration of service as COVID restrictions are relaxed, despite inflation. Demand has however tapered lower since May.


Consumption of liquids is still moderately constrained by COVID-19 home-cooking resulting in diversion of breaking stock into the shell market partly balanced by a large reduction in hens dedicated to breaking.



Breaking Stock

The average price for breaking stock was lower by 9.4 percent this past week to an average of 159.0 cents per dozen with a range of 155 to 163 cents per dozen delivered to Central States plants on August 15th. Checks were down 11.1 percent this past week to an average of 152 cents per dozen over a narrow range of 151 to 153 cents per dozen. Average revenue for both breaking stock and checks should be compared to the USDA average benchmark production cost for nest-run Large, estimated by the USDA at 80.3 cents per dozen for July 2022.


Shell Eggs

The USDA Egg Market News Report dated August 15th 2022 confirmed that Midwest prices for Extra-large and Large sizes were sharply down on average by 18.9 percent compared to the previous week. Mediums were lower by 7.7 percent. The trend in prices despite a small decrease in inventory suggests fluctuating values trending lower but still with unseasonably high prices extending through August albeit with declines from present values.


The following table lists the “most frequent” ranges of values as delivered to warehouses*:-


Current Week

Previous Week

Extra Large

201-204 cents per dozen

248-251 down 18.8%


199-202 cents per dozen

246-249 down 19.0%


155-158 cents per dozen

168-171 down 7.7%

Certified Organic EL

275-310 cents per dozen

Unchanged long term

Breaking stock

155-163 cents per dozen

169-182 down 9.4%


151-153 cents per dozen

170-172 down 11.1%

*Store Delivery approximately 5 cents per dozen more than warehouse price


The August 15th 2022 Midwest Regional (IA, WI, MN.) average FOB producer prices, for nest-run, grade-quality white shelled eggs, with prices in rounded cents per dozen were 17.7 percent lower from last week, with the previous week in parentheses:-

  1. $1.95 ($2.35), (estimated by proportion): L. $1.81 ($2.20): M. $1.37 ($1.43)


The August 15th 2022 California price per dozen for cage-free, certified as Proposition #12-compliant product in cartons delivered to a DC, (with the previous week in parentheses) confirmed Large size down 12.5 percent for the week.

  1. $2.65 ($3.00); L. $2.60 ($2.97); M. $2.07 ($2.17)

(See the text, tables and figures and the review of production data and prices comprising the USDA Report for July and the 4th Quarter and FY 2022 results for Cal-Maine Foods under the Statistics Tab)


Shell-Egg Demand Indicator

The USDA-AMS Shell Egg Demand Indicator for August 17th was up 1.5 point from the last weekly report to 2.7 with a 1.9 percent increase in shell inventory from the past week as determined by the USDA-ERS as follows:- 

Productive flock

295,433,554 million hens

Average hen week production

82.5%(was 82.6%)

Average egg production

244,131,282 per day

Proportion to shell egg market

67.6% (was 68.1%)

Total for in-shell consumption

 458,364 cases per day

USDA Inventory

1,400,600 cases

26-week rolling average inventory

4.98 days

Actual inventory on hand

4.85 days

Shell Egg Demand Indicator

2.7 points (was 012 on August 10th 2022)

Note 1: USDA Flock numbers were adjusted after incident cases of HPAI in mid-May. The hen population takes into account the depletion of approximately 31.1 million hens following HPAI outbreaks in thirteen large complexes and eight smaller units in nine states.

Dried Egg Products

The USDA extreme range in prices for dried albumen and yolk products in $ per pound was released on August 12th. Data is depicted for the previous week and past months to illustrate the trend in prices following HPAI depopulations:-

Whole Egg


Average June $14.71

July $13.11 


No quotation, past week

Average June $13.50

July $13.52 

Spray-dried white

No quotation, past week

Average June $17.23

July $14.70


No quotation, past week

Frozen Egg Products

The USDA range in prices for frozen egg products in cents per lb. on August 12th 2022 compared to the previous week were on average lower but indicating a balance between available products and demand from the manufacturing and retail sectors:-

Whole Egg

$2.15 - $2.25

$2.20 - $2.25


$1.40 - $1.45

$1.40 - $1.45

Average for Yolks

$3.60 - $3.65

$3.60 - $3.65

Non-certified liquid egg products, July Average (cents per lb.).

Whole 215

Whites 119

Yolk 329

The USDA has not released a report on dried egg inventory since March 13th 2020 due to inability to obtain data from producers, and will not issue reports for the immediate future.


Prevalence rates from APHIS surveys of migratory waterfowl in the Atlantic and Mississippi Flyways confirmed that birds were shedding H5 avian influenza virus with an Eurasian lineage from late January onwards. This is confirmed by outbreaks in either backyard flocks or combinations of commercial egg complexes, broiler and turkey growing farms among the four flyways. It would appear that some wild domestic birds may still be shedding virus. This situation requires more intensive monitoring and presumes the need for high levels of biosecurity.

Outbreaks in commercial egg-producing flocks extended from February 23rd to June 7th

Through July 18th approximate losses in commercial flocks with confirmed HPAI include:-

  • 2,400,000 broilers on 12 farms
  •  92,000 broiler breeders on 3 farms
  • 5,520,000 turkeys on 135 farms
  • 31,100,000 egg-production hens and 850,000 pullets on 24 locations in 9 states. Pullet mortality does not include “at risk” replacements depleted on affected complexes with contiguous .

Unlike previous years there are still reports from the E.U. documenting shedding of H5N1 and other H5 strains by migratory waterfowl with mortality in wild birds and foxes. Outbreaks of HPAI are still occurring on commercial farms in Eastern Europe and one case in Germany attributed to contact between wild birds and both domestic chicken, turkey and duck flocks, many of which are usually allowed access to pasture. Most veterinary authorities in Western Europe have lifted flock confinement due to lower rates of recovery of H5N1 HPAI from migratory waterfowl. Avian influenza strains H5 and H7 persist in Western and Eastern Europe, Asia and both Western and Southern Africa. France is experimenting with a DNA vaccine in commercial waterfowl.

Backyard flocks that are allowed outside access will continue to be at risk of infection although these clusters of birds in suburban areas are of minimal significance to the epidemiology of avian influenza in the commercial industry. They serve as indicators of the presence of virus among free-living birds as evidenced by the outbreaks on turkey farms in Utah during July.

The level of biosecurity in commercial poultry production complexes is appreciably higher than in 2015 when the U.S. experienced an epornitic along the Mississippi Flyway The response of state and federal authorities sice this time has been rapid and effective both in diagnosing and depleting affected flocks. To date, all floor-housed flocks that were infected were depleted using foam. Euthanasia of egg production complexes involved various combinations of VSD+ applying heat or carbon dioxide.

The role of migratory waterfowl in dissemination of H5N1 HPAI virus is indicated by the close proximity of infected complexes and their counties with major waterways, lakes, wetlands or reservoirs.

It would have been helpful for APHIS epidemiologists to have reported on their findings from the epidemiologic questionnaires completed following outbreaks on commercial farms and with special reference to the first seven large complexes affected through the end of March. It would have been important for the Industry to know the possible routes of infection and whether any obvious defects in structural or operational biosecurity contributed to outbreaks. This would have facilitated appropriate preventive action and allocation of additional resources to intensified biosecurity. A preliminary opinion with guidance during mid-April 2022 was not an unrealistic request and an interim report by early-May may have provided more value than a comprehensive document in 2023 or later.


Turmoil Among Grocery Delivery Services In China

The downturn in the economy in China coupled with unbridled competition and mismanagement has taken a toll on grocery delivery companies in that Nation.  Industry leader, MissFresh, founded in 2014, is now technically bankrupt down from a peak valuation of $3 billion.  MissFresh and its competitors established too many distribution centers, expanded at a rapid rate and assumed high debt burdens. that benefitted from the COVID shutdowns.  Although MissFresh is the first of the large online grocery delivery enterprises to fail, Shihui Technology, backed by Alibaba, has closed operations in over 2,000 cities and has incurred the displeasure of regulators who fined the company $450,000 for inappropriate marketing practices.  A subsidiary of rideshare giant Didi Global, also in grocery delivery, has laid off thousands of workers.


At its peak, MissFresh, funded by Tiger Global Management and Tencent Holdings, established 600 warehouses in the suburbs of 17 cities in China to achieve 30-minute delivery times.


As with many companies in China, the veracity of financial reports are questionable and MissFresh failed to release a 2021 annual report with the last quarterly results available covering  the second quarter of 2021.  As of September 2021, the company had $479 million in cash with short-term liabilities exceeding $500 million.


Inevitably, backers abhor extended cash burn and ultimately withdraw support from startup companies that fail to generate free cash flow resulting in collapse.


Progress in Planning the 2023 IPPE

According to an August 1st release by USPOULTRY, the 2023 International Production and Processing Expo (IPPE) will extend over 500,000 square feet of exhibit space with 940 exhibitors confirming attendance. A joint statement from the organizers comprising USPOULTRY, the American Feed Industry Association and the North American Meat Institute included, “We are excited to gather again in-person for IPPE 2023.”  The statement continued, “We are encouraged by our strong exhibitors’ participation as it demonstrates that they are enthusiastic about showcasing the latest technologies and services that will continue to drive the industry forward.”


The 2023 IPPE show hours will be:


  • Tuesday January 24th - 10H00 to 17H00


  • Wednesday January 25th - 09H00 to 17H00


  • Thursday January 26th - 09H00 to 15H00


Conagra Brands To Invest In Information Technology

Conagra Brands intends to invest in digital resources to enhance productivity and reduce cost.  The current Company supply chain includes 42 plants and 25 distribution centers with 5,000 products responsible for 80 percent of sales volume. Conagra will rationalize production and distribution and merge facilities acquired from Pinnacle Foods. This will result in a reduction in the number of distribution centers.


Conagra expects to save $1 billion over the proximal three years through updating the supply chain applying their Fuel For Growth program.  Through digitization, management will be able to make data-driven decisions and adjust capacity in plants to improve efficiency and reduce the cost of goods sold.  Conagra anticipates a saving of $300 million in manufacturing costs alone.  The benefits will be derived from an increase capital expenditure to five percent of net sales compared to the current baseline of 3.5 percent.  The emphasis of investment will be directed to growth and productivity.


TreeHouse Foods Posts Q2 Results

In a release dated August 8th TreeHouse Foods Inc. (THS) posted results for the second quarter of fiscal 2022. This company is a manufacturer of private label products for supermarket chains and is impacted by inflation in ingredient, labor and packaging costs. Both operating segments face pressure from customers to hold prices thereby reducing margins.


For the period ending June 30th, 2022 the company lost $29.4 million on net revenue of $1,198 million.  Comparable values for the second quarter of FY 2021 ending June 30th comprised net income of $8.4 million on net sales of $1,003 million. Diluted EPS fell from $0.15 in the second quarter of 2021 to $(0.53) for the most recent quarter.


The Meal Preparation Segment posted revenue of $765 million up 18.8 percent from Q2 of 2021  and contributed $56 million to operating income. The Snacking and Beverage Segment posted revenue of $431 million up 21.7 percent from Q2 of 2021 and contributed $39 million to operating income.


In commenting on results Steve Oakland, CEO and President stated "I'm incredibly proud of our TreeHouse team as we delivered strong top-line results, reflecting the impact of our pricing and our ability to capture incremental volume in Snacking & Beverages," He added "The value proposition of private label is becoming increasingly important as consumers navigate this inflationary environment. In addition, the breadth of the retail landscape, improved quality and assortment, and our customers' strategic commitment to private label are driving trial and share gains. Our unwavering focus on the customer over the last several years positions us well to build on this momentum to drive growth and profitability."

Patrick O'Donnell, Interim Chief Financial Officer and Chief Accounting Officer opined on the results stating, "Our second quarter performance was very much in line with expectations. We are encouraged by robust demand for private label food and beverage and we are working diligently to improve service and execute pricing to recover inflation. Despite ongoing challenges related to labor and materials availability, we continue to make gradual progress toward improving profitability and believe we are on track to deliver our full-year guidance."

On August 11th Treehouse announced sale of most of the Meal Preparation segment to the Investindustrial Group in a $950 million transaction. The objective of the sale was to "simplify the business" according to the CEO, allowing greater concentration on manufacture of house brands.


On June 30th 2022 TreeHouse posted total assets of $5,267 million of which $2,702 million comprised goodwill and intangibles.  The company carries $2,050 million in long-term debt and lease obligations. TreeHouse had a market capitalization of $2,480 million on August 10th.  The share has traded in a 52-week range of $29.47 to $47.50 with a 50-day moving average of $42.23.  On a trailing 12-month basis, operating margin was 2.1 percent and profit margin -1.2 percent.  The Company generated a return on assets of 1.2 percent and -3.0 percent on equity. THT closed on Friday 5thAugust at $42.71 and opened post-release on Monday 10th August at $45.69.



The Wendy’s Company Reports on Second Quarter of FY 2022

In a release dated August 10th, the Wendy’s Company (WEN) reported results for the second quarter 0f FY 2022 ending July 3rd 2022.


For the period, the company earned $48.2 million on total revenue of $537.7 million including Company-operated stores and franchise fees.  Comparable figures for the second quarter of FY  2021 were net income of $65.7 million on total revenue of $493.3 million. Diluted EPS declined from $0.29 in 2021 to $0.22 for the most recently completed quarter.  Results for the second quarter of 2021 included a gain of $30.8 million described as “System Optimization” Operating margin declined from 25.6 percent in 2021 to 17.9 percent for the second quarter of 2022.


In commenting on results, Todd Penegor, president and CEO stated, “We are proud of the entire Wendy’s team for delivering a third consecutive quarter of accelerated double-digit Global same-store sales growth that exceeded our expectations,” Penegor added “This momentum contributed to a significant sequential Company-operated restaurant margin expansion, highlighting the strength of the underlying business and our brand as well as our commitment to the restaurant economic model in a challenging environment” He concluded. “Our business continued to outperform the competition and our franchisees are operating from a position of strength after achieving record profits across the US and Canada in 2021.


For the second quarter of 2022, Wendy’s posted system wide sales growth for the U.S. of 3.5 percent compared to sales growth for the international segment of 22.7 with global sales growth of 5.6 percent.  U.S. same-restaurant sales growth was 2.3 percent compared to 20.6 percent for the second quarter of 2021 that reflected a post-COVID rebound.


Guidance for 2022 included sales growth of 6 to 8 percent with an upward adjusted EPS of $0.84 to $0.88. Free cash flow was forecast to attain a range of $215 to $225 million


Wendy’s Company had a market capitalization of $4,560 million on August 11th.  Total assets on July 3rd amounted to $5,516 million of which 36.9 percent comprised goodwill and intangibles.  Long-term debt and lease obligation were $4,224 million.  WEN has traded in a 52-week range of $15.77 to $24.48 with a 50-day moving average of $19.54.  WEN trades with a forward P/E ratio of 24.9.  WEN fell 1.8 percent on Wednesday August 10th after the release to close at $20.76 due to a revenue miss against the anticipated value of $541 million.



University of California Scientists Engineer Rice Requiring Less Nitrogen Fertilizer

Application of CRISPR technology has enabled scientists at the University of California, Davis to develop a strain of rice that can fix nitrogen with the aid of soil bacteria, thereby reducing the levels of application of nitrogen fertilizers. The studies conducted by the group were recently published in Plant Biotechnology. Roots of plants cannot directly fix nitrogen but rely on uptake of organic ‘fixed’ compounds either supplied as artificial fertilizers or by bacteria in soil. 


Eduardo Blumwald, Distinguished Professor of Plant Sciences the leader of the research team noted, “Plant are incredible chemical factories.” He explained that by application of chemical screening and genomics, it was possible to identify the role of apigenin and other flavone compounds that enhance biofilm formation thereby promoting the activity of diazotrophic bacteria that fix nitrogen. By modifying apigenin, it was possible for plants to enhance the nitrogen-fixing activity of bacteria on root surfaces.


A patent application for the technology has been filed by the University of California.


Implications arising from the study have profound implications for agriculture since it will be possible to lower the cost of production of rice and possibly other crops by reducing the application levels of nitrogen fertilizers.  This in turn will reduce leaching of nitrogen into soils and ground water and diminish eutrophication of waterways as a result of runoff of fertilizer.


Costco Reports on July Sales

According to a Company release on August 3rd Costco Wholesale Corporation (COST) reported net sales of $16,850 million for the retail month of July comprising four weeks ending July 31st.  Revenue was 10.8 percent higher than the $15,210 million for the corresponding month in 2021.


A breakdown of sales, excluding gasoline and foreign exchange, increased by 5.8 percent in the U.S., 11.5 percent in Canada and 9.4 percent for Other International.  Total company sales increased by 7.0 percent and E-commerce by 11.5 percent.


The July retail month had one fewer shopping day in the U.S. compared to 2021 reducing potential revenue by 2.5 percent.


Costco currently operates 834 warehouses with 575 in the U.S., 107 in Canada and 152 in the International Segment among ten nations.


7-Eleven Acquires Skipcart Delivery Service

Convenience Store chain 7-Eleven has acquired Skipcart founded in 2018 in San Antonio, TX.  The company provides same-day and on-demand delivery for food, retail, pharmaceutical and E-commerce enterprises.


Previously 7-Eleven has used Instacart, Uber Eats, and Grubhub for delivery services and recently the company partnered with Shipt, a subsidiary of Target to deliver snacks, drinks, and essentials from 7-Eleven stores. 


It is evident that following the acquisition when and where possible, 7-Eleven will assign business to their subsidiary company that claims to operate in 37 states with a large complement of independent drivers.  The 7-Eleven group of companies includes 77,000 stores in 90 nations and regions with 13,000 in the U.S. including units operating under the Speedway and Stripes banners.


USDA to Host the 2022 Food Loss and Waste Innovation Fair

The second USDA Food Loss and Waste Innovation Fair will take place on September 14th from 10h00 to 14h00 EDT as a virtual presentation.  Dr. Jean Buzby responsible for liaison of the USDA Food Loss and Waste Program stated, "The fair offers a platform to emphasize a range of innovative strategies and technologies that have the potential to transform food loss and waste reduction efforts".


Exhibitors at the fair will include USDA agencies conducting programs or projects, businesses and universities that are researching or are involved in commercial activities that have received USDA funding.  Local municipal governments receiving grants for composting will also participate.  The Fair will include presentations in over 36 virtual booths and the program will permit video chat in real time.  For further details including registration, access <www.usda.gov/foodlossandwaste>.


Food and Agriculture Organization Price Index

The UN Food and Agriculture Organization (FAO) released the July Food Price Index on October 5th.  The index averaged 140.9 points in July, down 30.3 points or 8.6 percent down from June representing the fourth consecutive monthly decline.  The drop was attributed to lower prices for vegetable oil and cereals with more stable prices for dairy and meat products.


The 19.1-point (11.5 percent) decline in the FAO Cereal Price Index was led by wheat that fell by 14.5 percent in July.  This was due to the agreement between Russia and Ukraine to allow passage of vessels carrying bulk agricultural cargo from Black Sea ports.  The price of corn also decreased by 10.7 percent on a World basis due to increased availability from Argentina and Brazil and as a secondary result of resumption of grain shipments from Ukraine.


The FAO Meat Price Index averaged 124.0 points in July down 0.6 points or 0.5 percent from June.  This was due to increased availability of beef and mutton from Australia and a reduction in beef price from the major producing nations. In contrast, international poultry meat reached an all-time high caused by outbreaks of avian influenza in many nations.


Export of Agricultural Commodities from Ukraine

On Friday, August 5th, vessels carrying bulk cargoes left the Port of Chornomorsk located on the Black Sea. The three bulk carriers, mv Navi Star, mv Rojen and mv PolarNet are transporting 57,000 tons of corn destined for Turkey and the UK.


Many vessels were bottled up in Ukraine ports following the invasion of the Nation by the Russian Federation.  Since the vessels were loaded, there is question as to the quality of cargoes and whether they will be acceptable to receiving nations.  The reality is that the Ukraine has 20 million tons of the 2021 harvest in storage and must clear silos and grain terminals to receive the 2022 crop that will soon be harvested.


COVID Situation Improving

Recent data provided by the CDC indicates an improvement in the U.S. COVID situation:-


  • Effective August 12th, the seven-day case average was 105,412, a 15 percent decrease over two weeks. The U.S. total of diagnosed cases is at 62.6 million.
  • Forty percent of counties, districts, or territories had high community levels of COVID Cases have fallen by 20 percent in twelve states since the beginning of August.
  • The seven-day hospitalization average was 42,816, a three percent decrease over two weeks. A total of 4,964 ICU beds were occupied by patients with or due to COVID.
  • Daily fatalities averaged 490, up 12 percent over two weeks. U.S fatalities have attained 1.03 million
  • As of August 12th, 261 million, or 79 percent of the U.S. population, have received at least one dose of COVID vaccine and 67 percent have received two doses. Only 108 million or 32 percent of the population have received a booster dose, representing approximately 50 percent of those eligible.
  • The CDC estimates that the Omicron subvariant BA.5 is responsible for 86 percent of current U.S. COVID cases.
  • The seven-day average test volume for the week ending July 28th was 500,250, down 11 percent from the previous week with a positivity rate of 17 percent.


Notwithstanding, the incremental decrease in incidence rate, hospitalization, and fatalities, common sense precautions are still required to further reduce infection following CDC recommendations on vaccination, including boosters. Vaccination is strongly recommended especially with the resumption of schools and universities.  It would also be advisable to receive the seasonal influenza vaccine when available.  Booster vaccines containing mRNA of the Omicron variant are expected during the fall.


Hillandale Farms Appoints CEO

Hillandale Farms has appointed Kevin Jackson as CEO. Orland Bethel Founder and Chairman of Hillandale Farms noted, “Kevin is a highly respected leader and brings a track record of performance in consumer-facing industries across North America.”  Jackson comes to Hillandale Farms from TreeHouse Foods where he was president of the Snacking and Beverages Division.  He has eighteen years’ experience in packaged goods companies including JM Smucker.


Jackson earned a baccalaureate degree from the University of Colorado in Boulder and a Masters’ degree from the New York Institute of Technology with a concentration in Business Administration.


Hillandale Farms is the third largest producer of shell eggs in the U.S. with approximately 20 million hens in complexes in Pennsylvania, Iowa, Connecticut and Maine.



Shrinkflation Evaluated By The Bureau Of Labor Statistics

The 13.1 percent increase in the grocery component of the Consumer Price Index in July included “shrinkflation” according to Brooke DiPalma, writing in Yahoo! Finance on August 11th.


Steve Reed, an economist with the Bureau, indicated that any reduction in size of containers resulting in an effective increase in unit price was tracked and is incorporated in monthly indexes.


The term Shrinkflation was coined by Pippa Malmgren an economist in the U.K. to draw attention to a long-term commercial practice.  Candy bars, specifically, have been successively reduced in size, as a proportion of sales are through vending machines.


The only practical shrinkflation that can occur in egg production relates to USDA size.  Over the past five years, packs of eggs have increased in number from the conventional dozen up to 24 with 30-egg and larger units available at club stores.  Enriched and specialty eggs are still available in six-packs, not only to reduce the unit of purchase but as a convenience for single-person households.  Although reduction in pack size increases the cost of packaging that is counter to sustainability, in certain markets and with specific products shell-egg shrinkflation could be justified.


McDonald’s Under Pressure To Bring Back Salads

With a need to simplify menus following the outbreak of COVID in 2020, McDonald’s eliminated hand-assembled salads.  At the time, the change seemed inconsequential, but the company website has recorded thousands of requests to reintroduce these menu items.  Salads are especially the case with health-conscious customers and families who substituted a small salad for fries and also favored chicken wraps with salads.  Given that competitors have reintroduced or continued their salad servings, there has been a migration of previously loyal McDonald’s customers to alternative QSRs.


Decisions made on the basis of expediency in response to higher costs or labor availability may have unintended consequences. Potential detrimental outcomes should be considered before changes are made that have the potential to impact image and revenue.


California Reports Increased Number Of Dry Wells

The Dry-Well Reporting System of the California Department of Water Affairs has recorded a 70 percent increase in the number of dry wells over the last 30 days compared to July 2021.  During the past 30 days 227 dry wells were reported with 854 tallied over the previous 365 days.  During the past 30 days, only 24 ‘interim solutions’ were reported.  These include repair, replacement or sinking wells deeper to reach ground water.  In some cases, residents are using bottled water or hauling water to storage tanks. 


The majority of dry wells were reported from Tulare, Merced, Fresno, Tehama and Madera counties.  Kern County, location of a large inline complex, reported three dry wells in 30 days placing the County among the least affected.  In contrast, Fresno County, with egg, broiler and turkey facilities, reported 58 dry wells.


Italy to Approve Ban on Culling Cockerels

Following a 2020 campaign by Eurogroup for Animals, the Italian Chamber of Deputies has approved a ban on culling of cockerels to take effect by the end of 2026.  Final confirmation by the Senate is expected during the current year.

Italy will join France and Germany in banning the disposal of cockerel chicks, presuming the installation of appropriate gender-sorting technology in hatcheries.


UN Charter Grain Carrier

The United Nations World Food Program has charted mv Brave Commander to transport 23,000 metric tons of wheat from the Ukrainian port of Pivdennyi to supply Ethiopia.  This is the first humanitarian food-aid cargo paid for with donations through the United Nations World Food Program and the U.S. Agency for International Development with contributions from private donors.  To place this shipment in perspective, the World Food Program purchased 800,000 metric tons of grains from Ukraine in 2021.


California Water Conservation Measures

In an August 11th address, Gavin Newsom Governor of California announced a $8 billion initiative over two years to store, recycle and desalinate water.  The program will benefit more than 8.4 million households by 2040.


The program will include:-


  • Increasing storage space for up to 4 million acre-feet of water to capture and store water from storms and ice melt.


  • Recycling and reuse of 800,000 acre-feet of water annually by 2030 reducing the quantity released to the Pacific Ocean


  • More efficient water use and conservation allowing for retention of 500,000 acre-feet of water each year


  • Capturing stormwater and desalinating both ocean water and salt-laden water in groundwater basins


Dave Puglia CEO and president of Western Growers’ stated, “We applaud this bold and comprehensive water infrastructure and management strategy.”  He added, “Our farms are in distress due to water insecurity, increasingly placing millions of Californians in our agricultural regions at greater risk of economic harm.”

Ian LeMay president of the California Fresh Fruit Association stated, “This plan recognizes the need to expand on existing surface and groundwater infrastructure while streamlining the process to get construction started on new storage projects.” 


California officials are committed to expediting the program given the urgency of climate-driven changes evidenced by drought and reduced availability of water.


Ukraine Exports And Projected 2022 Harvest Impacted By Invasion

Exports of agricultural commodities from Ukraine will be approximately half the level of the previous 2021/2022 season at 2.65 million metric tons.  During the last season ending June 30th, exports attained 48.5 million metric tons with high volumes shipped before the February 24, 2022 invasion by the Russian Federation.


Exports resumed in late July at a relatively low level with 948 thousand metric tons exported during the first half of August.  For the comparable 15 days of August 2021, Ukraine exported 1.88 million metric tons.


The 2022 harvest comprising all grains and oilseeds will probably attain 50 million metric tons compared to 86 million metric tons in 2021.  The difference is due to disruption of planting and cultivation as a result of shelling, mining and interdiction of supplies of seed and fertilizer.  Many farmers were unable to plant crops and are currently participating in military operations as citizen volunteers.


CDC Amends COVID Guidance

On August 11th, CDC issued new COVID recommendations to reduce the incidence rate in the U.S. The guidance includes:-

  • Compliance with vaccination recommendations including boosters and new vaccines as they become available


  • Elimination of the six-foot social distancing standard, placing the onus on individuals to take precautions in crowded indoor spaces


  • Withdrawal of the need for routine screening of asymptomatic people in community settings including schools and universities


  • Recommending that infected people isolate for five days at home but should then wear a mask in public for ten days after testing positive.  Isolation may end after five days but individuals should be free of fever for at least one day without medication and be asymptomatic.


  • CDC recommended repeating home antigen tests due to inherent insensitivity resulting in false negative results. Retesting after two days is recommended following a negative antigen test. CDC noted that false negative tests are common especially in asymptomatic individuals


Dr. Greta Massetti who participated in developing the updated CDC guidance stated, “We are in a stronger place today as a Nation with more modalities including vaccination, boosters and treatment to protect ourselves and our communities from severe loss due to COVID.”  She added, “This guidance acknowledges that the pandemic is not over but also helps us move to a point where COVID no longer severely disrupts our daily lives.”


Australian Study Confirms Lead Contamination In Eggs From Backyard Flocks

A recent publication in the peer-reviewed journal, Environmental Pollution*, confirmed that high levels of lead are present in eggs derived from backyard chickens in the suburbs of major cities in Australia.

Lead is ingested from soil and foliage and accumulates in the blood and organs of hens and is transferred to eggs at potentially toxic levels.  Lead in soil is derived from tetraethyl lead (TEL) additives to gasoline through the mid-1980s.  Lead concentrations in soil samples from homes in Sydney, Melbourne and Brisbane exceeded what was estimated to be a critical level of 120mg/kg.  Above this level, eggs are likely to contain in excess of a 100 micrograms/kg. The suggested upper limit for lead content of soil for residential gardens is 300mg/kg. In Australia lead additives were selectively removed from gasoline during the 1980s but an official ban was enacted in 1996.


Half of 69 chickens sampled in backyard suburban flocks had lead blood levels greater than 20 micrograms/dL considered to be a toxic levels.  The authors calculated that consuming an egg each day with a lead level slightly less than 100 micrograms/kg contents would result in blood lead levels that are comparable to children living adjacent to lead mines or smelters.


In contrast, eggs from free-range farms in rural areas contained 7.2 micrograms/kg contents compared to the average lead level in suburban backyard chickens of 301 micrograms/kg.  The study also demonstrated a statistically significant correlation between the age of a home and the level of lead in both soil and eggs. This is consistent with long-term deposition of organic lead from vehicle fuel prior to the ban on tetraethyl lead additives.


The study confirms previous evaluations of toxic levels of lead in eggs from backyard flocks in suburban New York City.


It is evident that if hens are held in backyards in suburban or urban areas, soil should be assayed to ensure that levels of lead do not compromise the health of consumers and especially, children.


*Yazdanparasta, T. et al. Lead poisoning of backyard chickens: Implications for urban gardening and food production. Environmental Pollution. doi.org/10.1016/j.envpol.2022.119798.


Dollar General Fined $1.3 Million by OSHA

The Occupational Safety and Health Administration (OSHA) has fined Dollar General $1.3 million for violations that potentially endangered workers.  Problems observed on inspections included obstruction of exit routes, unsafe stacking and storage of merchandise and inability to access electrical panels. According to the press report, Dollar General has to date been fined more than $6.5 million for safety violations.

Doug Parker, Assistant Secretary for OSHA stated, “Dollar General continues to demonstrate a willful pattern of ignoring hazardous working conditions and a disregard for the well-being of its employees.”  He added, “Despite similar citations and sizeable penalties in more than 70 inspections, the company refuses to change its business practices.”


Dollar General along with other convenience stores has been criticized for subjecting staff to the risk of injury and death from holdups.  Recommendations to upgrade safety provided by police include improved interior illumination, removal of placards over windows so that the store interior is visible from the street, installation of effective security cameras, advising against only one employee in a store after dark and the installation of more effective silent and audible alarm systems.


According to OSHA, six Dollar General employees died as a result of armed robberies from 2016 to 2020 with other workers suffering injuries and extreme psychological stress from facing armed intruders.


FDA Assays Indicate Freedom from Pesticide Residues in Food

The U.S. Food and Drug Administration (FDA) recently released the results of the Pesticide Residue Monitoring Program covering fiscal year 2020. The Agency analyzed 2,078 food samples of which 15 percent were domestic and the remainder imported products.  Domestic samples were collected in 35 states and imported food from 79 nations.  Of the total examined, 96.8 percent of domestic samples and 88.4 percent of imported foods complied with federal standards with regard to pesticide and industrial chemical contaminants.  No pesticide residues were detected in 41 percent of domestic foods and in 48 percent of imported samples.


The report did not specifically examine residues in USDA Certified Organic ingredients or foods, and it is hoped that this deficiency will be addressed in future residue monitoring programs.


The scope of the sampling program was impacted by COVID in 2020 resulting in fewer samples collected and assayed compared to the previous year.



Walmart Releases Q2 FY 2023 Financial Results

In an August 16th release, Walmart Inc. (WMT) posted financial results for the second quarter of fiscal 2023. Along with other retailers, both brick-and-mortar and online, all are subject to the pressures from increased costs for goods, transport and labor in a competitive environment still recovering from COVID. As a multinational company, Walmart faces risks associated with currency fluctuation, geopolitical events and adverse policies by regulators in host-Nations. Walmart serves as a bellwether for U.S retail combining groceries, clothing, electronics, drugs, tolietries and household necessities.


For the second quarter of FY 2023 ending July 31st 2022, net income was $5,149 million on total revenue of $152,859 million.  Comparable figures for the second quarter of fiscal 2022 ending July 31st 202, were net income of $4,276 million on total revenue of $141,048 million. Diluted EPS increased from $1.52 for the second quarter of FT 2022 to $1,88 for the most recent quarter.


Gross margin fell an absolute 1.2 percent to 24.2 percent and operating margin fell 0.8 percent to 4.5 percent from the second quarter of FY 2022 to the recently completed quarter.


In an interview on CNBC following the release, Doug McMillon, CEO and president sounded an optimistic note regarding progress in reducing excess inventory valued at $1.5 billion. He noted the impact of inflation on consumer spending with an evident pattern of moving from discretionary spending including clothing to groceries and household necessities. This affected demographics with annual family incomes progressively from $50,000 extending to $100,000 at present. Despite an increase in goods sold, of which two thirds is imported, coupled with additional expenditure on wages and transport, the Company has experienced difficulty in constraining prices. McMillon indicated that management is attempting to compromise between the needs of customers and shareholders. He expects food inflation to continue through early 2023 and then decline. In response to questions posed by Courtney Reagan, McMillon considers Walmart well positioned for seasonal demand through 2022. The Company is building E-commerce extending the Paramount service to all Walmart + members and gaining penetration in the advertising business as part of the comprehensive  omnichannel concept for the enterprise.


For the second quarter of FY 2023 segment results comprised:-


Walmart US: Net sales $105,100 million. Operating income $5,700 million. Comparable same-store sales up 6.5 percent.

International: Net sales $24,400 million. Operating income $1,000 million.

Sam’s Club: Net sales $21,900 million. Operating income $400 million. Comparable same-store sales up 9.5 percent.


Walmart operates more than 10,500 stores worldwide of which 5,400 are in the U.S. including 600 Sam’s Club warehouses. Walmart operates 46 banners in 24 nations.


Forward guidance for FY 2023 included:- 5.5 percent increase in consolidated revenue, 4.0 percent increase in same-store sales and both operating income 8 to 10 percent lower than FY 2022.


On July 31st 2022, WMT posted assets of $247,199 million with long-term debt and lease obligations of $47,361 million. The Company had an intraday market capitalization of $362,430 million at noon on August 16th post-release. WMT trades with a forward P/E of 23.3 and has ranged over a 52-week period from $117.27 to $160.77 with a 50-day moving average of $125.91.  Twelve-month trailing operating margin was 4.2 percent and profit margin 2.3 percent.  Return on assets over the past twelve months was 6.3 percent and the return on equity 15.5 percent. At close of trading on August 15th pre-release, WMT was priced at $132.63. Post-release on August 16th WMT opened at $139.39. This was slightly above the closing price following the May 17th release for the first quarter that revealed a significant earnings miss  and representing the worst single-day fall for WMT in 35 years.


Herbruck’s Poultry Ranch Inaugurates Blue Springs Egg Farm

On Thursday August 11th the Blue Springs Egg Farm located on 335 acres near Mercersburg, PA. was officially opened at a ceremony attended by state and local political leaders and members of the Herbruck family and the production team.

Herbruck’s Poultry Ranch is a fourth-generation family-owned enterprise with facilities in Michigan and Indiana and now in Pennsylvania with completion of the first phase of the Blue Springs Egg Farm.  Herbruck’s produces shell eggs and liquid products for retail and food service from a flock exceeding 10 million hens.


Greg Herbruck CEO commented, “I have tremendous faith in our team to continue focusing on our four key pillars of sustainability that comprise People, Planet, Products and Prosperity.


Herbruck noted that the People pillar incorporates community support in addition to protecting the health and safety of team members.  Commitment to sustainability contributes to the Planet pillar and is exemplified by investment in manure processing and investment in a two-megawatt solar array installed at the Green Meadow Organics Farm near Saranac, MI.  Currently a high proportion of Herbruck’s hens are housed cage-free with complete conversion to be completed by the end of 2024.


The $100 million investment in the Blue Springs Egg Farm confirms the commitment to the industry in maintaining a supply of eggs that benefit communities in which Herbruck’s operates, and to customers and ultimately consumers.

Attendees at the ribbon cutting ceremony included U.S. Rep. John Joyce, Pennsylvania Senator Judy Ward and Pennsylvania Representative Jesse Topper, Greg Weller of Montgomery Township and John Flannery of the Franklin County Commission.


Blue Springs Egg Farm has been years in planning including permitting and approvals. The Herbruck family hosted local officials and residents in visits to their home base in Saranac to review existing operations that are devoid of odor and are clean and neighbor-friendly.


The first phase of the complex comprises four multi-level houses,  440’ by 60’ and 50’ high. Each house, with approximately 350,000 hens is subdivided into compartments to segregate flocks and are equipped with customized aviaries allowing floor area and cubic space exceeding industry standards. Herbruck’s has developed a unique “transverse uplift ventilation system” that ensures even distribution of heat, limits accumulation of dust and optimizes hen comfort consistent with the Company credo of Serve the Bird®. Each level is equipped with in-floor heat considered essential for maintaining litter quality and contributing to flock health.

The packing module is equipped with two MOBA graders and will be able to process both in-line and off-line eggs providing future opportunities for contract family farms in the area.


Feed will be sourced from a regional supplier allowing the local farming community to benefit from the complex.


Ancillary installations include a plant to process manure, structural biosecurity installations and eventually a solar array.

The site is planned for a total of eight houses to accommodate a flock of 2.5 million hens to be erected in stages consistent with market demand and will include housing for pullet growing consistent with the population stocked.


At the ribbon-cutting ceremony Greg Herbruck expressed thanks for the Pennsylvania Governor’s Action Team and the support from the County and local community. It is anticipated that the Blue Springs Egg Farm will provide 200 direct jobs and inject over $150 million into the state economy when completed.



Target Corporation Posts Second Quarter FY2022 Results

On August 17th Target Corporation (TGT) posted results for the second quarter of FY2022 ending July 30th. For the quarter, the company earned $183 million on revenue of $26,037 million with a diluted EPS of $0.39.  For the corresponding second quarter of FY2021, Target earned $1,817 million on revenue of $24,826 million with a diluted EPS of $3.65.  Revenue was 3.5 percent higher but net earnings declined by 89.9 percent. Gross margin for the second quarter of FY2022 declined 28 percent to 22.6 percent compared to 31.3 percent in the second quarter of FY2021 This deterioration was attributed to lower selling prices to clear excess stock and higher cost of goods sold in an inflationary environment. Concurrently operating margin fell 87 percent from 9.8 percent in the second quarter of FY2021 to 1.2 percent for the most recent quarter due in part to higher freight and transport, wages and utilities.


In commenting on results Brian Cornell Chairman and CEO stated “I'm really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment. Addressing disposal of excess stock imported in anticipation of continued delays in the supply chain Cornell noted, "I want to thank our team for their tireless work to deliver on the inventory-rightsizing goals we announced in June. While these inventory actions put significant pressure on our near-term profitability, we're confident this was the right long-term decision in support of our guests, our team and our business”.


He concluded, “Looking ahead, the team is energized and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our guests' wants and needs."


Guidance included, “For fiscal year 2022, the Company continues to expect low-to mid-single digit revenue growth and an operating margin rate centered on six percent”.


Comparable same-store sales growth attained 2.6 percent in comparison with the second quarter FY2021 value of 8.9 percent that represented a post-COVID rebound. Traffic grew at 2.7 percent and digital sales 9.0 percent compared to the second quarter of FY2021.


On July 30th Target posted total assets of $52,470 million, down 2.5 percent from January 29th 2022. Long-term debt and lease obligations attained $17,571 million. Target Corporation had an intraday market capitalization of $80,400 million on August 17th. The Company has traded over the past fifty-two weeks in a range of $137.16 to $268.98 with a 50-day moving average of $154.07.  TGT trades with a forward P/E of 19.6. On August 16th the share closed at $180.18 but after the morning release on August 17th TGT opened at $175.37.


Twelve-month trailing operating margin was 7.5 percent and profit margin 5.5 percent.  The Company generated a return on assets of 9.9 percent and 45.5 percent on equity.


At the end of FY2021, Target Corporation operated 1,926 stores with a total retail area of 243,284 square feet. The company invested $3,544 million in property and equipment during fiscal 2021 and has continued the store upgrade program.


Dr. Simon M. Shane
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