Editorial


Responding to a Crisis

09/22/2020

Inevitably problems occur in shell-egg and liquid production complexes that may have consumer and customer-related implications.  Where a brand is involved, degradation of image must be avoided to minimize loss of goodwill and future sales.  In the age of social media and viral videos, an appropriate response to a crisis situation is critical to recovery and stabilization of an enterprise.

 

Within the context of egg production, the most probable crisis situations include:-

  • An egg-borne infection including but not limited to salmonellosis or listeriosis.
  • A welfare-related issue usually involving a clandestine video.
  • Allegations of worker exploitation, harassment, or unhealthful or potentially injurious working conditions or an outbreak of a disease such as COVID-19 among workers.
  • Contamination with a pesticide or chemical toxin.
  • Allegations of illegal action relating to employment of non-documented aliens, collusion over prices, fraud and deceptive labeling, contravention of the Food Safety Modernization Act or any intervention by a Federal agency.
  • Precipitation of an environmental incident including discharge of pollutants or improper use of pesticides.

 

Given that the range of possible situations is fairly predictable, appropriate planning, installation of equipment, maintenance of facilities and conformity to standard operating procedures are required to prevent situations, thereby avoiding the need to respond to a crisis. 

 

Management should encourage communication among responsible levels within the enterprise so that minor issues can be identified and resolved before the emergence of a larger and publicized crisis.  It is always advisable to rectify a small problem then to either ignore or countenance a situation that can ultimately bring down an enterprise.  This was the case with the Blue Bell Creamery that detected Listeria in their ice-cream plants but elected not to take appropriate action other than ignoring and even falsifying laboratory records until a trace-back from cases of listeriosis resulted in complete closure of all facilities for an extended period. Fines totaling $17 million were imposed in this case.

 

Predicting possible adverse advents allows management to not only implement preventive measures, but the exercise of planning for a crisis also stimulates the development of appropriate response strategies.  This involves teamwork among management and may include contributions from public relations specialists who in addition to providing advice have valuable contacts in the mainstream media.  It should be possible to develop a series of appropriate brief statements and pre-prepared videos in response to predictable events. Attempting to draft responses under pressure and deadlines will inevitably lead to subsequent corrections, retractions and confusion that will elicit further questions and will detract from the core message projected by the company.

 

The following general principles should guide a crisis response:-

  • A single spokesperson should be designated, preferably at executive officer-level who can speak with authority and favorably represent the image of the company in audio and visual media interviews.
  • If any subordinates to the spokesperson within the company comment on the crisis, information should not conflict with the message of the principal representative.
  • The initial message should clearly indicate the nature of the problem, causation and above all, what action has been or will be implemented to resolve the issue
  • Bold and immediate action is necessary to avoid placing the company on the defensive. This may involve a voluntary recall of product before mandated by a Federal agency.  Frequently legal advisors suggest a "no-comment" response.  Although justified by legal prudence, a no-comment invites suspicion and in many cases, may be viewed as an admission of responsibility from the perspective of public relations.
  • All possible media channels should be used to project the required message. This presumes that the designated spokesperson is sufficiently trained and comfortable with media interviews and questioning.  Appropriate messages can be posted on a company website, but direct interaction with individuals using social media should be avoided.  Statements should be as brief as possible but adequate to convey facts as they are known at the time.  Messages should display empathy and concern for those affected.
  • It is generally inadvisable to hide behind producer associations and allow bland statements to speak for an individual company

 

Generally a major crisis, even if resolved in the short term, will require remediation of image.  In addition, costs to resolve a crisis include recalls, lost production, defending lawsuits, settlements, operational disruption and fines imposed by Federal or state agencies.  From a review of recent crisis situations affecting U.S. and E.U. companies, it is apparent that prevention and preemptive planning is far less expensive then a belated and uncoordinated response.


 

U.S. and The World Health Organization

09/16/2020

It may be questioned why a newsletter dealing with egg production and aspects of food safety and the economics of the industry comments regularly on aspects of human health and related socio-political concerns.  Accepting the concept of One-Health, human and livestock infections and the success of the poultry industry are inseparable.  Over the past nine months, commentaries and editorials in both EGG-NEWS and sister website CHICK-NEWS have dealt with aspects of COVID-19, considered the most important issue of our generation that has had an unprecedented impact on the profitability of our industry in many ways.

 

The poultry industry is influenced by the World Organization of Animal Health (OIE) a multinational body functioning under the United Nations, Food And Agricultural Organization (FAO) that establishes standards for the control of animal diseases and maintains a database of outbreaks of both catastrophic and erosive infections of livestock.  Export of poultry and international trade in products is strongly dependent on the impartiality, management and operation of the OIE that develops recommended procedures to contain and prevent disease and establishes principles including regionalization and compartmentalization.

 

By the same token, the detection, control and prevention of diseases in our human population is the province of the United Nations, World Health Organization (WHO), representing 194 member states. In common with many multinational agencies, decisions and actions are frequently impeded by political influence that seemingly runs counter to the dictates of science.  Since its inception, the WHO was the international coordinator responsible for eradication of smallpox, almost complete eradication of polio and effective responses to emerging diseases.  If the WHO did not exist it would have to be invented. 

 

The World Health Assembly is the body responsible for establishing policy for the WHO, determining structure and priorities and appointing the Director and immediate subordinates. Effectively the U.S. is the major supporter of the WHO according to an article in the September 12th edition of The Economist. We provide one third of the $1.3 billion annual budget and U.S. epidemiologists and scientist represent ten percent of the staff of the Agency.

 

It is incongruous that the U.S., currently the World's leading nation in science and medicine, has elected to withdraw from the Agency while a pandemic is in progress. There are obviously issues concerning the performance of the WHO with respect to their response to the emergence of COVID-19. Agency inaction and alleged favoritism of China form the basis of criticism by the U.S. Administration and a justification for the impending withdrawal.  Admittedly, the Agency appeared slow to publicize the extent of the infection and to issue appropriate recommendations in January and February.  The WHO was tardy in publicizing the need for general use of masking and other protective measures and recommendations on therapy including the use of steroids to suppress the uncontrolled immune response responsible for mortality.  In their defense WHO officials claim that they were misled by China regarding the ability of the infection to be airborne and the index nation concealed the extent of COVID-19 in Wuhan the epicenter of the disease.  The WHO is dependent on cooperation by member states and the Agency maintains that it requires scientific corroboration and upper-level consensus before issuing recommendation concerning control of an infection. It is understood that the Charter restricts direct involvement in individual member nations without invitation. This inhibits providing specific directions to member nations. 

 

Recognizing deficiencies in addressing the challenges of Ebola and COVID-19, The World Health Assembly initiated a study on the response of the WHO. The objectives include levels of responsibility, possible changes in structure and resources that will be required to contain both the current outbreak and the emergence of future pandemics.

 

The Economist pointed to the disparities in financial support from member nations.  The U.S. is responsible for 32 percent of the budget with the UK as the second major donor at approximately 20 percent.  This figure is in fact matched by the Bill and Melinda Gates Foundation and far exceeds the contributions of Germany, Japan, the European Commission and even China each supporting approximately five percent of expenditure.

 

Instead of withdrawing from the WHO in a politically-motivated pique, the U.S. should encourage reform with decisions based on scientific merit and weighted by financial contribution.  In the face of pandemics, all nations must rely on concerted, science-based decisions to limit diseases that have both health and financial implications.  It is hoped that the decision to withdraw from the WHO is not irrevocable and that a more constructive approach can be developed.  This will benefit world health and directly the wellbeing of our citizens, our agriculture, our industry and our economy.


 

Climate Change is the Subject of CFTC Evaluation

09/14/2020

The Commodity Futures Trading Commission (CFTC) recently completed a comprehensive review of the effect of climate change on our economy.  The report entitled “Managing Climate Risk in the Financial System” was commissioned by the Board of the Commission comprising three Republican and two Democratic members who voted unanimously 12 months ago to create an advisory panel to report on the effects of global warming.  The document includes contributions by analysts affiliated to large investment firms including Morgan Stanley, S&P, and Vanguard, the oil-giants BP and Conoco Phillips and commodity trader Cargill with assistance from environmental and agricultural specialists in academia.

 

It has been the consistent policy of the Administration to downplay global warming despite credible scientific evidence from atmospheric, oceanic and terrestrial studies.  The report apparently notes the devastation associated with climate change including wildfires, storms, droughts, floods and hurricanes all of which affect insurance and mortgage markets, pension funds and other financial institutions. The report incorporates recommendations for some reversal of current Administration policy regarding environmental deregulation.

 

The question is whether the report will precipitate rethinking among the Administration, many of whom are climate change deniers despite the scientific evidence and facts. The second consideration is whether corporate or Congressional action will be taken as a result of the findings of the report.  The CFTC Commission has not yet voted to accept the report. A White House spokesperson commented that the report does not necessarily represent the opinions of the Federal government.

 

Irrespective of political inclination, those of us who have children and grandchildren must recognize that the World’s use of fossil energy over the past 150 years has degraded the environment. The reliance on coal, oil and to a lesser extent gas has resulted in quantifiable atmospheric and terrestrial changes that are influencing climate, health and availability of resources. The challenge will be to convert to more environmentally friendly sources of energy including nuclear power and renewables at a cost and within a time-line that does not disrupt our economy or degrade our standard of living. The first imperative is to recognize the problem and then to develop appropriate corrective measures. Since climate change is a global phenomenon it will be necessary for the U.S. to assume a leadership role in cooperating with other nations to resolve problems that are becoming readily more apparent.


 

UK Egg Production Divided Among Free Range, Barn, and Organic Eggs

09/08/2020

John Kirkpatrick, a senior manager responsible for sourcing agricultural products for Tesco, a major U.K. grocery chain, speaking at an industry meeting confirmed that his company will market three tiers of eggs.  Organic will represent the highest level, free-range the core, and barn eggs will represent the entry level. 

 

When the EU implemented the ban on conventional cage housing commencing in 2012, many producers converted to colony modules. Since the substantial investment was made by egg producers, the market was moved to non-confinement systems making eggs from colony cages apparently undesirable.  Barn eggs, including floor systems and aviaries, represent the most economic approach to satisfying the restrictions imposed by the major chains that appear to be “out-welfaring” themselves in a competitive market. Consumers however appear to have been excluded from the exercise and have been deprived of the opportunity to purchase eggs of their choice at a price they can afford.

 

It is evident that in the U.S. a high proportion of consumers still favor low-priced eggs and in a recessionary environment, it is more than probable that by the 2025 deadline at least 30 percent, and perhaps more, of our 220 million hens producing shell eggs will remain in either enrichable cages or enriched modules.  The pace of conversion to aviary and floor systems has slowed considerably, especially with the collapse of the food service sector.  COVID restrictions resulted in closure of restaurants and diversion of shell eggs from the food service sector to the retail shell market.  Due to the slow recovery of the food service sector as many universities and schools remain closed, availability of cash to invest in conversions has dried up and banks are understandably reluctant to extend loan capital to egg producers.

 

Consumers must be allowed a choice in their purchases of eggs. Currently it is estimated that one in six children is hungry and could benefit from thee nutritional value of eggs. Neither legislators,  activists or grocery chains have the right to impose a ‘welfare tax’ on those who are least capable of feeding their families.


 

Preventing COVID-19. Now is the Time for Seasonal Influenza Vaccination

08/25/2020

It is all too evident that COVID-19 is still circulating in our population.  To date, the U.S. has recorded 5,799,046 confirmed cases with 178,998  fatalities.  This disease will not simply "go away" spontaneously. From data collected in Europe, Asia and in areas of our nation the infection reappears after a lockdown and surges after a “super-spreader event”.  It is axiomatic that our economy will not recover unless COVID-19 is suppressed. 

 

An effective vaccine will be the most practical method of increasing population immunity thereby reducing the incidence rate of the infection.  Despite advances in developing alternative vaccines many of which are based on novel technology, it is evident that administration at levels that will protect the entire population will only be achieved by the spring of 2021 at the earliest.  Accordingly, we must be realistic and plan accordingly.

 

The first imperative is to wear a mask in public and in the workplace.  The University of Washington has calculated that if all susceptible U.S. citizens wear masks in public, 60,000 lives could be saved through the remainder of this year.  Unfortunately, wearing of masks has become a political issue and "anti-maskers" who are in denial do not realize their own vulnerability and their potential to infect fellow citizens. 

 

The second issue of immediate concern relates to vaccination against seasonal influenza.  There is every possibility that the 2020-2021 season may be severe given the forecast of a colder winter attributed to the La Nina event now developing in the Pacific Ocean.  Even with improved diagnostic procedures for COVID, physicians will be hard pressed to differentiate at an early stage between influenza and COVID-19.  Concurrent infections could elevate the fatality rate and everyone is urged to receive the seasonal influenza vaccine. Supplies of the 2020/2021 vaccine are now available including the high-titer version for the elderly and those with predisposing health conditions.  Operators of processing plants and egg packing operations in addition to farms should arrange for group-vaccinations for their employees and if possible, their immediate families.  Investment of time and money in influenza vaccination will benefit health and productivity of workers during the fall and winter.

 

We have few direct modalities to prevent COVID-19.  Masking, avoiding crowds, frequent hand washing, and common sense will have to be deployed until an effective vaccine is available.  Administration of seasonal influenza vaccine is an added measure to reduce the impact of COVID-19.

 


 

The Right to Farm

08/18/2020

According to Attorney Tiffany Dowell of the Texas A&M University AgriLife Extension Service, all fifty U.S. states have some form of right-to-farm legislation.  Addressing the issue in her weekly posting on June 10th, Dowell considered right-to-farm in relation to a case in Indiana involving a farmer who erected two hog-finishing houses each with a capacity of 4,000 animals. Subsequent to initiating operation neighbors sued claiming nuisance, diminution of property value and related undesirable outcomes.

 

Despite the protection extended by right-to-farm laws, intensive livestock or poultry operations designated as Concentrated Animal Feeding Operations (CAFOs) may require rezoning of land for intensive farming use in addition to permits from a state environmental management authority.  Invariably the permitting process is subject to public comment that must be considered in the granting of permits.

 


NC Hog Complex

Modern Egg-production Complex

A number of cases in which public input has influenced outcomes include the proposed Hi-Q breaking unit in central Ohio that was rejected in 2011 following concerted opposition. More recently, the Lincoln Premium Poultry operation was forced to change location for the proposed processing plant and industrial installations.  Opposition to establishing breeder and broiler growing contract farms was also encountered in various counties although the company was able to recruit sufficient growers in Nebraska to reach predetermined production levels.  Sanderson Farms was forced to abandon a proposed processing location in an industrial park in Nash County, North Carolina in 2012 following public opposition requiring relocation to Robeson County. 

 

What emerges from these cases is that broiler or turkey processing plants may be opposed based on the potential for contamination of ground water and streams from effluent, odor, traffic congestion, costs of services to local municipalities and opposition to tax concessions.  With respect to large processing facilities, public concern may be based on a perceived change in the ethnic composition of an area due to a projected influx of low-paid workers and their families representing a different heritage to existing residents.  Opposition to a production complex is frequently based on the potential depreciation in the value of existing or intended residential property.

 

In reviewing the case involving the hog units in Indiana, the CAFO permit was issued by the Indiana Department of Environmental Management following two public hearings.  Rezoning of the land from agriculture-residential to agriculture-intensive was successfully negotiated and approved  Subsequent to establishing and operating the two hog houses, residents in the area filed suit claiming nuisance, negligence and trespass.  The plaintiffs also challenged the Indiana Right-to-Farm Act claiming a violation of the Takings Clause and the Privileges and Immunities Clause of the Federal and Indiana Constitutions.  The Defendants invoked the Indiana Right-to-Farm Act and obtained summary judgment dismissing the case.  The decision of this court was upheld on appeal to the Indiana Supreme Court. The Court confirmed the right of the Defendant to establish two hog houses in accordance with the Indiana Right-to-Farm legislation that was enacted to “conserve, protect and encourage the development and improvement of agriculture and for the production of food and other agricultural products. 

 

Most Right-to-Farm Acts absolve a farm of being classified as a nuisance following continuous operation for more than a year without a significant change in operation and if the operation was not a nuisance at the time the operation commenced in the locality.  It is important to determine whether conversion from one type of agriculture to another has occurred or whether a change in ownership or technology has taken place.  Naturally farm operators cannot function legally applying obvious negligence specifically with respect to disposal of waste. 

 

In considering whether a nuisance is a factor in denying a permit, courts must consider whether the operation would have represented a nuisance when the farm was established.  Residents who move into an area with an existing CAFO in operation cannot claim nuisance.  In addition public hearings allow residents and other landowners to object to any material change in operation of a farm such as erection of hog or poultry houses on land previously used to grow crops.

 

To claim negligence, the opponents of a CAFO would have to demonstrate inappropriate operation or violation of the permit terms.  Simply establishing a CAFO on a farm does not represent negligent operation under the Right-to-Farm Act.

 

The claim of trespass would require opponents to demonstrate that odor, pollutants or dust enters their homes.  In the Indiana case, the Appeals Court considered this approach “artful pleading” and was inconsistent with the Right-to-Farm Act.

 

In reviewing the appeal, the court clearly established that the Indiana Right-to-Farm Act was in accordance with the State Constitution and affirmed that the Right-to-Farm Act does not violate common laws of nuisance.  The question of the Takings Clause in the Indiana and U.S. Constitutions were reviewed and it was established that although there was diminution of property values among neighboring homes, the Plaintiffs failed to show a deprivation of economic or productive use of their properties.  The Privileges and Immunities Clause of the Indiana Constitution was also considered and it was ruled that the Right-to-Farm Act protected agriculture and that there was no preferential benefit to any specific group.

 

The issue of Right-to-Farm in relation to nuisance will be considered in greater detail in the appeals filed by Smithfield Foods following a series of adverse jury verdicts in a Federal District court. Residents and landowners in North Carolina adjacent to hog farms contracted to Smithfield Foods, claimed nuisance and diminution of property values as a result of odor from lagoons holding hog waste.  The issue of Right-to-Farm and nuisance arising from CAFOs as previously litigated will now be considered by a Federal Appeals court. Since Right-to-Farm Acts have different provisions depending on state, specific defenses will differ. 

 

In reviewing recent approvals for egg production complexes, the examples set by Herbruck’s Poultry Ranch, a third generation egg-production enterprise in western Michigan can be used as an example of how a project can be presented for approval.  When the company decided to establish a complex in Mercersburg, Pennsylvania, the family initiated a preemptive program involving complete transparency regarding the plan for the organic egg production enterprise including the number of houses, hen population and traffic patterns.  Representatives of the County and media were provided an opportunity to review the ambiance of the prototype farm in Saranac, MI demonstrating an appearance in harmony with the area and an absence of odor or any other nuisance factor.

 

Public acceptance of proposed CAFOs is critical to obtaining environmental permits and rezoning where required.  This can only be achieved with transparency, openness and goodwill. It is necessary to effectively promote a proposed poultry enterprise with honesty and not simply rely on litigation based on Right-to-Farm laws.


 

Raising the Federal Minimum Wage - Impact on the Egg Industry

08/18/2020

Wage rates are an important determinant of packing costs. In many areas the federal rate serves as a benchmark although local conditions including employment rate and industries competing for workers determine the scale of wages.  The federal minimum wage was established in 1938 as a component of the Fair Labor Standards Act.  Since this time the wage rate has been raised but infrequently and now stands at $7.25 per hour.  In most areas of the U.S. the actual amount of the federal minimum wage is essentially irrelevant since wage rates are determined by the availability of workers and the willingness of employers to pay "the going rate". 

 

Economics texts suggest that workers are paid in relation to the marginal product of their labor.  This means that employers are willing to pay a given wage to a worker who produces more than the expenditure on both wages and fringe benefits and related direct costs of employment.  The fact that there is an approximately $15 gap between the federal minimum wage and the median wage of hourly-paid U.S. workers suggests that the federal rate is no longer a benchmark.  States have imposed their own minimum rates that range from the federal $7.25 to Massachusetts at $12.75 per hour.  Individual municipalities have imposed higher minimum wage rates reflecting the cost of living or altruistic intentions.

 

On July 18th the House passed legislation that would raise the federal minimum rate to $15 per hour by 2025.  Thereafter the minimum wage would be indexed to median wages and would be adjusted annually.  It is calculated that raising the minimum wage to $15 by 2024 would benefit approximately 40 million workers mostly over 18 years of age.  Those receiving the proposed minimum would include 24 million full-time workers and the parents of 15 million children. 

Despite the fact that most employers are unable to determine the contribution of individual workers or job positions to operating profit, wage rates are set by local competition.  In a market with union dominance, wages are established by negotiation.  In recent years, workers and their representatives have regarded fringe benefits including healthcare, education assistance and work flexibility as more important than negotiating over a basic wage. 

 

The labor market is influenced by offshoring and outsourcing and also by automation and robotics.  Local factors are also important in establishing wage rates.  The presence of a large plant, especially if unionized in a rural county can increase wage rates paid to workers in an egg packing facility given competition for available labor and the wage rates and benefits determined by the major regional employer.  It is self-evident that workers in many southern states paid the federal minimum wage fear a twofold escalation in rate albeit over a four-year period.  In contrast, in industrialized states where there are both fewer agricultural operations and egg producers, such as in New England and in industrialized counties in Wisconsin, Ohio, Indiana and Illinois, higher wage rates are accepted as a norm.

 

Convention accepts that if minimum wages are increased, the result will be unemployment among low-skilled and especially young workers.  This argument has been used by politicians to restrain increases in the federal minimum wage.  This presumed effect of increasing wage rates is now being questioned. Differences in minimum rates between adjoining states and the introduction of a mandatory $15 per hour in Seattle have provided opportunities for structured economic studies as noted in The August 15th edition of The Economist.  In 1992 New Jersey increased the state hourly wage from $4.25 to $5.05.  Neighboring Pennsylvania retained the Federal $4.25 rate.  Economists at Princeton University followed the QSRs with regard to employment.  The study did not disclose any loss of jobs in New Jersey as a result of the increase in basic wage nor did it influence the number of restaurants that were opened.  Although studies have shown that there is no difference in the rate of QSRs openings as influenced by wage rates, when Seattle mandated a $15 minimum, a major chicken chain noted that it would not establish stores in the metropolitan area. 

 

The University of Washington evaluated the effect of the $15 per hour minimum on worker income in Seattle.  Comparing 2015 to 2016, individual worker hours were reduced and effectively monthly earnings dropped by $1.74.  A subsequent study in 2018 used individual worker salaries rather than average data to confirm that weekly earnings actually increased by approximately $10 per week.  The results of this study were confounded by the fact that some workers took second or third jobs to compensate for their loss in hours.  If a QSR can reduce hours as a result of increased wage rate and maintain both volume of sales and level of service, it implies inherent inefficiencies in use of labor. Alternatively the introduction of mechanization or reorganization of workflow to improve marginal productivity should reduce the number of workers required on each shift.

 

The inflationary effect of increasing wage rates has also been considered in relation to the selling price of products.  Again based on the $15 per hour minimum wage in Seattle, the University of Washington determined that a 10 percent increase in base wage increased the price of products by 0.9 percent. Concurrently, a 2019 study of supermarkets found no increase in grocery prices at the retail level attributed to increases in workers’ wage rates.  This implies either improved efficiency given reduced hours or that supermarkets absorb wage increases.

 

It is self-evident that there is a point at which capital investment in mechanization and robotics is justified since there is a limit to which labor efficiency can be increased by paying a higher rate.  In the context of an egg packing plant, the outstanding area for saving in labor involves the manual transfer of packs to outer packaging.  Numerous studies have shown relatively short payback periods or alternatively high internal rates of return on investment in robotic packers and in addition, robotic pallet stackers. 

 

An increase in minimum wage rates is inevitable irrespective of the Administration in office in 2021. Accordingly egg producers should carefully evaluate the benefits of robotic packing in anticipation of mandatory federal or state increases in rates. For those producers already competing with large industrial plants in close proximity, mechanization is probably overdue and worthy of evaluation.


 

COVID-19 Realities, Challenges and Vaccination

08/10/2020

A number of realities are now apparent as we move into the eighth month of the COVID-19 epidemic in the U.S.:

 

  • The virus responsible for COVID-19 is now endemic and widespread through our population with extensive community spread.

 

  • Control measures intended to “flatten the curve” were temporarily successful but have plunged the economy into recession with every prospect of a depression.

 

  • The economy will not improve until COVID-19 is effectively controlled.

 

 


Chaotic Status of Testing

Drs. Anthony Fauci and Deborah Birx
  • In comparison with other industrialized nations the response by the U.S. has been dysfunctional, fragmented on a state-by-state basis and variable in its effectiveness.

 

  • Scientific data cannot be denied or facts “spun” to deny the reality of five million confirmed infections with 160,000 fatalities and the prospect of an increase to 200,000 by the end of 2020.

 

  • Scientifically-proven prevention measures including masking, avoiding gatherings and  common-sense hygiene are ignored by a large proportion of our population. In some cases preventive measures have been actively opposed to the detriment of the regions concerned.

 

  • In the U.S. COVID has been politicized with intensifying rhetoric, misinformation, and distrust of science contributing to rising public anxiety as we approach the 2020 election.

 

  • A safe and effective vaccine would contribute to alleviation of the burden imposed by COVID-19 but there are biological and logistic limitations on establishing immunity in our population.

 

After delays in initially recognizing the severity of COVID-19 and the potential for disruption of the economy, the Administration initiated a crash program of vaccine development termed “operation warp-speed.” While laudable in intent, rapid development of one or more vaccines applying as yet untested technology with accelerated field evaluation detracts from confidence that a vaccine will be both safe and effective. In the event that a vaccine, even if satisfying the two principal criteria is available by the end of 2010 cannot be regarded as panacea or an ultimate and immediate solution to the problem of COVID-19.

 

Faced with the intensity of the outbreak and the need for speed, pharmaceutical companies have been awarded immense sums of money to apply as yet untested technology and to commence clinical trials.  What characterizes the current approach to vaccine development is that capital is being invested in manufacturing facilities in the anticipation (or hope) that one or more candidates will prove effective.  Fortunately initial trials demonstration stimulation of antibodies and T-cell activity but it is yet to be shown that the immune response will actually provide protection against challenge. This will be evaluated in Phase 3 clinical trials involving natural exposure or even controlled infection of volunteers.

 

Based on other than scientific considerations, some in the political spectrum are projecting an unrealistic assumption on when an effective and safe vaccine will be available. Dr. Vijay Samant, a vaccine specialist affiliated to Merck, a company with considerable experience in vaccine production stated, “Spreading false hope and failing to come through is just one of the things that could further damage public trust.  Ken Frazier, CEO of Merck commented, “We don’t have a great history of introducing vaccines quickly in the middle of a pandemic.”

 

Some of the questions relating to introduction and administration of a safe and effective vaccine to 320 million citizens of the U.S. have yet to be addressed.  Even if a comprehensive national plan has been developed, which is doubtful given the track record of the Administration, the details have yet to be released.  Considerations include how will limited vaccine initially available be allocated?  Dr. Francis Collins, director of the National Institutes of Health has requested the National Academy of Medicine to develop guidelines and Dr.Victor Dzau, president of the Academy has accepted the challenge.  Ethical considerations will dictate the priorities but practical and emotional factors will confound predetermined plans.  It is evident that citizens with predisposing conditions such as diabetes, obesity, pulmonary and renal disease and the elderly will represent one priority category.  Frontline workers in public health will be an equally important population although this group should be willing to receive a vaccine. There are questions regarding those who will be most affected by exposure to COVID-19. Potential early recipients will question whether they are in effect guinea pigs and many well adopt a wait-and-see approach despite their vulnerability due to their potentially precarious state of health.

 

Even if the government launches a campaign to encourage vaccination there will be considerable distrust based on their track record over the past eight months. Confusion over optimistic and unfounded and frequently repeated statements such as “the disease will just go away”, the debacle over promotion of hydroxychloroquine despite scientific evidence that it is ineffective and potentially harmful, denigration and criticism of acknowledged specialists in infectious diseases and public health, lack of transparency over the warp-speed vaccine initiative, concern over side effects of vaccination will all deter enthusiastic uptake of one or more approved vaccines. The overriding fear lies in the speed at which vaccines have been developed and tested. Surveys of U.S. citizens suggest that if an FDA-approved vaccine were to be available at the end of the year and requiring two successive doses, 30 percent of those interviewed would not be willing to be vaccinated, 20 percent are unsure or will wait and only 50 percent will be willing to receive the vaccine.  Antivaxxers will intensify their unfounded, unscientific objections to vaccination and will confound the adoption of an approved product with pseudo-ethical, religious and anecdotal negative publicity. 

 

Without knowing the duration of immunity simulated by even two doses of vaccine it is impossible to predict when the level of herd immunity will rise to a threshold that will inhibit transmission of virus, necessary to reduce incident rates.

 

To the credit of the Administration, progress has been made in ordering the necessary equipment to support a mass vaccination program.  This includes 800 million syringes, needles and glass vials.  The resources of the military will be used to distribute vaccine.  Mass administration, if it is to become reality will itself impose dangers of infection in a susceptible population unless appropriate masking and social distancing are followed.

 

It is evident that widespread immunization even if a safe and effective vaccine is available will only be accomplished by the late summer of 2021.  In the interim, protection against COVID-19 rests in masking, social distancing and common-sense precautions.   A vaccine when available, will not necessarily allow the U.S. to resume a pre-2020 lifestyle and activities until a satisfactory level of herd immunity is attained. Until then we are individually and collectively obliged to follow the advice of public health specialists and to conform to practices and habits that suppress transmission.

 

Until we control COVID-19 we cannot hope to restore our economy and benefit from increased demand for eggs and other food products. There are obvious limits and restraints to government support and stimulus programs.


 

The Need for Rapid COVID Tests

08/04/2020

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

 

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

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

 

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

 

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

 

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

 

The point-of-care devices comprise:

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

 

The laboratory-based tests include:

 

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

 

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


 

House Approves Package of Four Appropriation Bills

07/25/2020

According to The Hill, the House passed a $260 Billion package comprising four spending bills on Friday, July 24th. The package was approved on a 224 to 189 vote with seven Democrat representatives and all Republicans voting against adoption.  Spending bills would fund the Department of State, the USDA, the EPA, the Department of the Interior, Veteran's Affairs and Military Construction during the 2021 fiscal year.

 

Contentious items that will be contested by the Administration will include:-

  • Allocations to the Environmental Protection Agency restoring the cuts proposed by the Administration
  • Inclusion of foreign aid to Israel, Egypt and the Ukraine in the Foreign Operations Bill
  • Expansion of nutritional assistance programs managed by the USDA
  • Providing the FDA with mandatory recall authority for both prescription and OTC drugs
  • Funding arts and humanities programs including the National Endowment for the Humanities and the National Endowment for the Arts in the Interior Bill.  The Administration proposed restricting funding for these and similar agencies and museums.
  • The House package allows funding for the World Health Organization and blocks restrictions on U.S. funds for foreign health organizations that support abortion rights
  • The Bill places restrictions on the EPA to reject specific science-based approaches in rule-making
  • Military construction funds would not be provided to construct a Southern border wall

 

Of specific importance to the poultry industry is a block on Presidential emergency authority to mandate that meat plants should remain functional as an essential service.

 

The House will consider seven additional spending bills including the Homeland Security bill dealing with immigration, domestic deployment of personnel and border security during the coming week.

 

In commenting on the package, House Appropriations Committee Chair Nita Lowey (D-NY) stated, "this appropriations packages addresses urging national priorities".  She added "I am proud that the package also includes strong emergency appropriations to confront coronavirus and support economic recovery with investments in critical infrastructure and coronavirus preparedness response and relief domestically and globally".

 

Rep. Kay Granger (R-TX), the ranking member of the House Appropriations Committee objected to previsions relating to immigration and abortion, but was in favor of support for veterans, diplomats and farmers.

 

Conservatives will balk at the $140 billion off-book spending and the addition of $250 billion in emergency spending. The package of four bills will have a difficult passage given the highly politicized environment in Washington and inclusion of obvious hot-button issues that have divided the nation.

 

The Senate Appropriations Committee has yet to introduce any spending bills for the coming fiscal year. It is anticipated that even if modified versions of the House appropriations bills are passed by the Senate, which appears unlikely, they will most certainly be subjected to Presidential veto. 

 

Failure to pass eleven of the twelve appropriations bills will require continuing resolutions to ensure that the government functions beyond the October 1st deadline. In all probability, the question of spending and policy will not be resolved before the November election, creating uncertainty at a time when the nation requires harmony and non-partisan agreement on many issues to respond effectively to the challenge of COVID-19 and its effect on the economy.


 

The Effect of COVID-19 on the Egg Industry - What Can We Expect

07/20/2020

Recent mildly optimistic projections by economists regarding the future are based on the improvement in late May and June characterized by job gains.  Dan Kowalski of CoBank has warned that the recovery will be fragile.  The July upsurge in COVID-19 incidence following the relaxation of control measures including home confinement and closing of restaurants and retail stores unfortunately confirms that the virus is still with us and will persist.  Until the U.S. uniformly adopts realistic and proven methods of suppression of the infection, we will continue to record both rising morbidity and regrettably concurrent mortality.  Recent daily totals of 70,000 confirmed incident cases and a cumulative mortality approaching 150,000 confirm the severity of COVID-19. 

The Administration and acknowledged specialist in epidemiology are at odds over the severity and course of the infection resulting in a lack of coordination and effective application of control measures.  For the immediate future we could drive down the incidence rate if we wore masks in public, avoided large gatherings, practiced social distancing and donned PPE in factories and plants.  We would also have to be supported with an effective testing program yielding results within 24 hours to allow for quarantine and tracing,

The expedient of an effective vaccine is not going to be a solution before the summer of 2021.  Despite promising Phase-1 trials, producing and administering an effective and safe vaccine that will be adopted by the majority of our population is an elusive goal. Even if effective and assuming no adverse side effects and requiring at least two doses, we probably cannot expect more than a 60 percent compliance rate through 2022. This will leave a significant proportion of our population to be susceptible contributing to persistence of the virus. 

Given that COVID-19 is here for the intermediate term, we should review impacts on the egg industry:-  

 

  • The food service sector that depends on universities, schools, institutions and corporate dining will only return if COVID-19 is effectively controlled.  Restaurant dining will be restricted both from fear of contracting infection and the severe recession (if not a depression) that will persist for years.  Although losses in food service will be partly compensated by increased home consumption of eggs, total demand will decline.  In 2019 per capita U.S. consumption was 293 eggs.  In the current year this will fall to 282 eggs although USDA ERS forecast a slight rise to 285 eggs in 2021.  This figure may well be optimistic given the persistence of COVID-19. 
  • Economists are projecting an unemployment rate ranging from 11 to 22 percent by the end of the year. The wide range indicates uncertainty relating to control and how the disease will affect our economy.  Despite the $2.2 trillion distributed under the CARES Act, of which $670 billion was in the form of the Paycheck Protection Program, vast sums denominated in the trillions will still be required to maintain a semblance of normality although creating a burden for future generations.
  • An inevitable increases in taxes irrespective of which administration is in office in 2021.
  • A marked deterioration in municipal services and an increase in cost as local authorities lose tax revenue  through default.
  • An erosion of infrastructure including road maintenance, the waterway system and the power grid all of which have direct and indirect implications for egg production
  • The disparity between current egg production capacity and predicted demand will reduce prices to a point at which the least efficient in terms of production and marketing will be forced to either consolidate or fail.
  • Trained and reliable labor will become progressively more expensive even with high unemployment. Higher levels of mechanization and automation applying robotics will be required to achieve cost efficiency.
  • Loan capital for either expansion or conversion from conventional cages to alternative systems will be unavailable despite low interest rates based on concerns over capacity to service debt.
  •  Given high unemployment and correspondingly low spending even on necessities, concepts such as sustainability and welfare will be superseded by consumers opting for low-cost foods.  An inevitable down-cycle in protein consumption will occur from beef to pork to chicken and will ultimately favor eggs based on nutritional value relative to cost and availability. 
  • Kowalski warns that "economic scars from COVID-19 will be with us until 2030".  Accordingly, we will have an industry with fewer hens and producers will have to consolidate to achieve pricing power relative to the supermarket chains that in turn will downsize.

Some of these trends are emerging but have been temporarily obscured by infusion of aid through the federal CARE Act aid. We can neither deny COVID-19 nor expect a miraculous resolution.  We have it within our capability to suppress and contain the infection. This will require a concerted national effort with leadership at the highest level coordinating the resources and activities of states, counties and local authorities.  Unless we collectively appreciate the severity of the infection and its economic consequences in order to apply science-based solutions, industry and agriculture will suffer with the egg industry severely challenged. Let us face the most likely outcomes and plan accordingly.


 

Questions on the Origin of COVID-19 Must Be Resolved

07/14/2020

It is clear that unless both industrialized and developing nations can effectively control COVID-19, economic recovery will be prolonged.  Progressive nations that have "flattened their curves" have employed a combination of home confinement, restrictions on large gatherings, extensive testing with quarantines and tracing, increased social distancing, mandating face masks and promoting personal hygiene and handwashing.  It is evident that the most effective programs have owed success to strong central leadership and coordination and also a receptive and compliant population. In contrast, nations without clear directives from the central government, failure to impose national standards for compliance including rigorous testing and quarantine of the infected and tracing of contacts have seen escalating incidence rates and elevated mortality.  Premature relaxation of effective control measures if applied, results in resurgence in the incidence rate.

It is axiomatic that learning how COVID-19 emerged and the events and circumstances promoting dissemination of the virus early in the outbreak in Hubei Province in January and February 2019 will be critical to establishing policy and action to prevent the next pandemic.  Unfortunately, the current world situation has obscured an understanding of the origin of the infection. Investigating the emergence of COVID-19, that should essentially comprise a disinterested academic endeavor, has been ‘weaponized’ for political purposes. Relevant information has been obscured by injudicious, inflammatory and unscientific political pronouncements and accusations.

In an attempt to determine facts, the World Health Organization (WHO) from which the U.S. has unilaterally withdrawn, is establishing a program to determine how SARS-CoV-2, the virus responsible for COVID-19, emerged and how it was disseminated. The virus apparently emerged as a clinical entity in Wuhan a metropolis of 11 million in Hubei Province in China during late January and early February 2020.

John Cohen writing in Science on July 10th established the questions that must be addressed in understanding the origins of the infection.

  • Were the U.S. 2018 warnings concerning defects in the maximum-security Wuhan Institute of Virology laboratory valid and was coronavirus research conducted in the laboratory?
  • Did the Wuhan Institute of Virology conduct "gain-of-function" experiments to develop a strain of coronavirus transmissible among humans?
  • What experiments conducted at the Wuhan Institute of Virology may have contributed to an accidental release of SARS-CoV-2 virus as has occurred with diverse human and animal pathogens from many prestigious facilities.
  • Is there any Provincial or Central epidemiologic information or clinical or other diagnostic evidence that COVID-19 was present in Hubei prior to December 2019?
  • What was the role of Wuhan Seafood Market in the emergence and dissemination of COVID-19?
  • Could examination of any stored sewage samples from centers in Hubei Province from late 2019 (if available) indicate the presence of SARS-CoV-2 virus?
  • Could evaluation of data relating to serum surveys be correlated with the presence of bat-related coronaviruses in humans, livestock and wildlife?  A comprehensive and ongoing study on bats conducted by Eco-Health Alliance and funded by NIH was cancelled by the White House in April
  • Have phylogenetic analyses been conducted on stored sera of humans, their pets and on wildlife been conducted to establish how the virus evolved and the temporal relationship with the emergence of COVID-19 including the early cases diagnosed in Wuhan and other hospitals in Hubei and adjoining provinces? There is considerable evidence that SARS-CoV-1 responsible for SARS in 2004 was present in humans and animals before the emergence of the infection. Antibody surveys implicated civets as an intermediate host between bats and humans with SARS and dromedary camels with MERS.
  • What evidence supports the contention that authorities in China or in Wuhan were  reluctant to report the existence of an emerging infection to the WHO and as a corollary was there an inappropriate response by the WHO on the basis of the information received?

Answers to the series of questions will obviously not be resolved in a single interaction between international epidemiologist and their counterparts in China. Establishing an impartial investigation and determining the scientific facts involved in the emergence of COVID-19 may not be helpful in controlling the present outbreak, but it will most certainly help in identifying and controlling the next pandemic.  We have endured SARS, MERS, Nipah and Hendra viruses, Ebola, H5N1 avian influenza, H1N1 human influenza and now COVID-19 over the past two decades.  The next pandemic is probably developing in some species somewhere in the world as this editorial is posted.  Let us hope with the knowledge gained from an impartial scientific review we will be better prepared to respond and that we will be able to detect and confine a regional outbreak before it becomes a pandemic.


 

Transparency and Honesty in Product Designation

07/06/2020

There is no Federal standard to distinguish among cage-free, aviary, barn, free-range and pastured housing of flocks.  Welfare certification based on EU or U.K. standards can be assigned to specific categories and is presumably monitored by audit.  The difference in unit revenue between either brown or white eggs derived from cages or alternatives to cages may exceed $1.50 per dozen at retail.  The difference between eggs obtained from flocks held in barns or allowed access to pasture is even greater.  The same is true for conventional and organic eggs. Large differences in value create an incentive to cheat by upgrading the designation of an egg. Product from alternatives to cages appeal to affluent and more selective consumers although sentiment is the only attribute distinguishing a cage-free egg from a pasture-derived product.

 

There is no practical analytical procedure to differentiate between eggs derived from cages as compared to alternative systems. After the 2013 EU cage ban came into effect, a scandal occurred in the U.K. when a major supermarket chain marketed eggs from Spain as cage-free despite the fact that they were derived from caged hens.  Since eggs in the EU are not generally washed, it was possible by microscopic examination of shell surfaces to distinguish between eggs derived from cages and those on litter.  Following washing as in the U.S. this distinction is not possible.

 

The incentive to cheat is intensified under conditions of high demand.  In reviewing IRI data, a specific U.S. producer of free-range and pastured eggs was able to increase sales within a week from approximately 400,000 dozen to close to 600,000 dozen and to maintain this level through the period of high demand from mid-March through April.  It is possible to achieve an increase in sales within a week providing the producer concerned drew on a substantial inventory. To sustain output over a number of weeks presumes that flocks in production were placed at least 30-weeks previously.  No one could have predicted the COVID-19 surge in demand back in August 2019.  Producers can increase sales of a specific brand by purchasing eggs from other producers at relatively short notice, providing supplies are available.  This would not have been the situation in mid-March given demand for eggs of all categories from generic through pasture- reared.

 

Based on experience in the industry it is accepted that producers conform to an acceptable level of ethics.  Unfortunately, some unscrupulous individuals have indulged in deceptive marketing practices.  In the early 2000's, eggs from barn-housed flocks were marketed by one producer as "free roaming", an acceptable if non-defined descriptor.  The deception however related to the label that depicted hens on pasture. The combination of the “free roaming” descriptor and the visual image on the carton created the impression that hens were actually allowed extensive outside access that was not the case.

Recognized and enforced standards are required to maintain the confidence of consumers paying a premium for eggs obtained from specific types of housing. This is only fair to the producers who invest capital in facilities, labor and incur other costs to produce cage free, free range and pastured eggs priced according to housing system.

 

The certifying agencies providing logos based on standards with audits could form the basis of national standard.  Unless the industry conforms to uniform standards, a patchwork of alternatives will be a disservice to consumers and allow unscrupulous producers and packers to perpetuate scams based on misrepresentation.  Given clearly defined statutory standards with auditing and confirmation, the Federal Trade Commission should have the authority to sanction and fine producers deviating from ethical principles.


 

Protectionism to Impede Progress on UK Trade Agreement

06/30/2020

In January, negotiations were initiated between Ambassador Robert Lighthizer and his U.K. counterpart, Minister Elizabeth Truss.  Intensive discussions to develop a bilateral trade agreement are in progress with dedicated task groups considering aspects of a comprehensive pact. 

 

It is evident that protection of U.K. farmers will be an important obstacle to achieving an agreement.  Feeding beta-agonists and related compounds to cattle and hogs will obviously be a barrier as well the U.S. practice of immesing broilers using chlorine or other compounds, long restricted in the U.K.  Eggs have emerged as a factor with a specific emphasis on housing system.

 

The U.K. has a commercial egg population of approximately 38 million hens.  Currently 42 percent are housed in enriched colony modules installed in anticipation of the January 1, 2013 deadline for elimination of conventional cages.  Collectively the U.K. industry invested $400 million in conversion to a system which now appears obsolete from the standpoint of presumed market demand. The U.K. leads Europe in free-range production with 54 percent of table eggs derived using this system.  Barn housing is currently only approximately one percent of egg production but as enriched colony systems are replaced with aviaries and technical problems and the profitability of free-range declines, more eggs will be derived from barns by 2025, the projected  conversion deadline.  Organic production, which requires free-range management in addition to feeding organic feeds, represents three percent of production.

 

The U.K. is 85 percent self-sufficient in eggs and egg products. The majority of imports are in the form of liquid egg from Poland and the Ukraine.  For the first quarter of 2020, the U.K. industry produced 7.8 million cases of shell eggs, one percent down from the corresponding quarter of 2019.  The May U.S. 91cent per dozen nest-run price paid to contract farmers and independent suppliers in the U.K. was up nine percent from the first quarter of 2020.  Egg products attaining 22,000 tons, were approximately six percent lower than the corresponding quarter of 2019.

 

EGG-NEWS is indebted to Dean Hughson for a June 27th article in the U.K. Daily Mail expressing concern over the vulnerability of the domestic egg industry valued at $1.2 billion annually.  The article is replete with errors aimed at influencing consumer opinion against U.S. eggs.  The article maintains that “95 percent of America’s 280 million chickens live in battery cages.”  The May 2020 USDA report on cage-free production recorded a population of 76.8 million hens housed in other than cages, representing 23.6 percent of a nominal 325 million total hens, but 34.9 percent of an estimated flock of 220 million producing for the shell-egg market. 

 

Mark Williams, a spokesperson for the British Egg Industry Council, cites the investment by U.K. producers to satisfy welfare, food safety, and environmental considerations.  Williams can be assured that U.S. farmers endure similar cost burdens and effectively there is very little commercial advantage enjoyed by U.S. producers over their U.K. counterparts.

 

Aimee Mahony, an advisor to the National Farmers Union, expressed concern that a trade deal that allowed the importation of eggs produced according to standards below those prevailing at the U.K. would adversely impact domestic farmers.  She stated that “It is crucial that the Government does not agree to any trade deal that could see imports of food that will be illegal for our farmers to produce here.”

 

The problem faced by U.K. egg producers is that at the farmer-to-supplier level, margins vary from a negative return to moderately positive, mainly influenced by feed cost and supply-demand considerations.  Introduction of U.S. shell eggs into the U.K. market would seriously disrupt the tenuous equilibrium experienced by their industry.

 

Ambassador Lighthizer recognizes the political power of the U.S. agricultural industry and has clearly stated that unacceptable restrictions on U.S. commodities would be a major obstacle to a free-trade agreement.  It is evident that there will have to be compromises on both sides.  Larger issues including the purchase of technology and equipment from Huawei, feed additives for beef and hogs and chlorine immersion for broilers, appear to be significant items to be negotiated. 

 

For the first four months of 2020 U.S. shell egg exports attained 38.7 million dozen, approximately 1.5 percent of production.  The two current importers, Hong Kong and Mexico combined, represented 70 percent of volume and 57 percent of the total value of $43.2 million.  Prospects for export of shell eggs to the U.K. are minimal at best. In all probability there will be negligible trade based on the relative pricing in the U.S. and the U.K., coupled with the cost of freight.  If comparable housing standards are imposed, export of cage-free eggs from the U.S. would be a nonstarter.  In the event of some catastrophe, such as extensive HPAI or a recurrence of the fipronil episode in the U.K. or the E.U., the U.S. would be able to ship egg liquid to supplement domestic production.  Again, it is recognized that E.U. nations and the Ukraine would have a cost advantage over the U.S. with regard to ocean freight.

 

Following the decline in transitory COVID-19 demand in the U.K., paralleling the U.S. situation, producers have now reverted to a state of mild oversupply, depressing nest-run and farm-gate prices.  In the scheme of things, eggs will probably not be a major consideration in the bilateral trade negotiations in progress as there are more important issues.  The Save Our Family Farms Association has little to fear from U.S. egg producers despite the dire predictions expressed in the Daily Mail article.


 




























































































































































































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