Egg Industry News


Schools Experiencing Difficulty in Sourcing Foods and Ingredients

01/31/2022

According to an article by Jesse Newman and Jaewon Kang in Reuters some school districts are experiencing difficulty in obtaining necessary supplies.  This is despite increased funding from the USDA for school-meal programs with additional tranches be disbursed in January 2022.

The problem relates to COVID that brought about a shift in the relative volumes of products sold to the retail market and to institutional buyers.  Faced with increased demand from supermarkets and groceries, food manufacturers shifted product to consumer packs to the detriment of institutional buyers including school systems.  Various manufacturers have experienced difficulty in maintaining production volumes due to absenteeism and in the case of some companies including Kelloggs, strikes closed plants.  Gradually production problems are being resolved and supply should soon be adequate.


 

COMMODITY REPORT

01/27/2022

WEEKLY COMMODITY REPORT: January 27th 2022.

 

  • Corn and soybean prices and volumes again fluctuated over a wide range of up to 1.0 percent of value daily during the past five trading days but settled higher on January 27th. The trend was influenced by rumors and data concerning orders from China coupled with domestic demand and the release of the January 12th WASDE Report, indicating higher ending stocks. The CME quotation for corn was up 1.6 percent and soybeans were up 4.0 percent, adding to the trend of the previous week. Soybean Meal was 1.3 percent higher compared to Thursday January 19th but will soon reflect the present escalation in the price of soybeans.

 

  • Factors influencing prices in either direction included:-
    • Anticipation of orders from China despite projections for reduced domestic demand. (transitory upward pressure)
    • Soybeans up on demand for soy oil (upward pressure on soybeans and meal)
    • Geopolitical tensions threatening wheat and corn exports from Ukraine (upward pressure on corn)
    •  Trend of increasing weekly ethanol production despite lower domestic demand (upward pressure on corn)
    • Persistent drought in Brazil despite some rainfall, with predictions of lowered yields. (downward pressure)
    • Reports of COVID in the Port of Rosario reducing shipments from Argentine (Small upward pressure)
    • Imports of corn by Mexico (transitory upward pressure)
    • Release of the January 12th WASDE  #620. Projections for corn and soybean yield, acreage production were little changed, exports were reduced but ending stocks, were increased for the 2022 harvest. (transitory downward pressure).

 

  • Based on CME quotations U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $6.25 per bushel for corn in March, up 1.6 percent from last week. Crushers will pay $14.50 per bushel for soybeans plus transport and basis during March 2022, up 4.0 percent from the January 19th quotation for March delivery. Soybean meal was $5 per ton (1.3 percent) higher for March delivery compared to last week, reflecting higher domestic supply but with profitable export of soy oil.

 

  • The FAS Export Report released on January 27th for the week ending January 20th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 25.55 million metric tons (1,007 million bushels) with 18.4 million metric tons (724 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 1.40 million metric tons (55.1 million bushels) with 1.44 million metric tons (56.7 million bushels) shipped.  For market year 2022-2023 outstanding sales amounted to 1.45 million metric tons (57.1 million bushels), with 0.17 million metric tons (6.9 million bushels) cancelled this past week)

    (conversion 39.36 bushels per metric ton)

 

  • The FAS Export Report released on January 27th 2022 for the week ending January 20th reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 9.1 million metric tons (334.3 million bushels) with 33.03 million metric tons (1,287 million bushels) actually shipped. Weekly soybean orders attained 1.03 million metric tons (37.8 million bushels) with 1.59 million metric tons (58.4 million bushels) shipped. For market year 2022-2023 outstanding sales amounted to 1.20 million metric tons (44.1 million bushels), with 0.20 million metric tons (7.4 million bushels) ordered this past week)

    (conversion 36.74 bushels per metric ton)

 

  • For the week ending January 20th 2021, 330,100 metric tons of soybean meal and cake were ordered for the market year 2021-2022, up 4.8 percent from the previous week. During the past week 327,100 metric tons of meal and cake was shipped, up 25.8 percent from the previous week and representing 8.3 percent of the total 3,937,200 metric tons shipped during the current marketing year to date.

 

  • Projected harvests and ending stocks were documented in the January 12th WASDE providing projections on quantities harvested and the effect of trade and domestic consumption on ending stocks that were increased from the November report.

 

The following quotations for delivery in the months as indicated were posted by the CME at 14H00 on January 27th 2022, compared with values posted at close of trading on January 19th 2021  (in parentheses):-

 

COMMODITY

 

Corn (cents per bushel)

March 622   (612).

May 620   (612).

Soybeans (cents per bushel)

March 1,446   (1,390).

May 1,452   (1,400)

Soybean meal ($ per ton)

March 399   (406).

May 404  (397)

 

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

Corn:

March quotation up 10 cents per bushel

(+1.6 percent)

Soybeans:

March quotation up 56 cents per bushel

(+4.0 percent)

Soybean Meal:

March quotation down $5 per ton

(-1.3percent)

 

The USDA weekly wholesale feedstuffs prices per short ton for January 26th 2022 were:-

 

  • Corn: $218 ($211), Chicago
  • Soybean Meal: $407 ($408), Central Illinois
  • Meat and Bone Meal: $355 ($355), Central Midwest
  • DDGS: $197 ($197), Eastern corn belt
  • Wheat Middlings: $150 ($140), Minneapolis
    • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen
    • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.44 cent per dozen

 

The respective changes in the prices of corn and soybean meal for January 26th compared with January 18th USDA weekly quotations would increase nest-run production cost for eggs by 0.7 cents per dozen.

 

Over the past 54 weeks the algebraic escalation in the prices of major ingredients has added 7.2* cents per dozen to eggs. Year-to-date feed cost has declined by 1.2 cents per dozen

*(rounded to 0.1cent)

 

According to the January 12th WASDE, corn harvested in calendar 2022 will be 15,115 million bushels with ending stocks projected at 1,540 million bushels compared to the December 2021 WASDE Report. Total corn stocks on December 1st 2021 amounted to 11.6 billion bushels up 3 percent from December 1st 2020.

 

Compared with the January 9th value, the CME quotation for corn at 14H00 on January 27th for March 2022 delivery was up 10 cents per bushel to 622 per bushel adding to the increase from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 90.3 percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending January 21st 2021 the industry produced on average 1,035,000 barrels per day, down 1.7 percent from the week ending January 14th 2022, and the 15th consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On January 21st ethanol stock was up 3.8 percent from the previous week to 24.5 million barrels, representing an approximately 21-day reserve but confirming a decrease in demand given a lower increase in stock relative to higher production during the week.

 

Ethanol quoted on the CBOT was priced at $2.14 per gallon on January 26th down 6 cents per gallon (2.7 percent) from the previous week and compared to a 52-week range of $1.65 to $2.48 per gallon. Concurrently RBOB gasoline at $2.51 per gallon was up 6 cent per gallon (2.5 percent) from the previous week, with a 0.5 percent lower WTI crude price of $86.87 per barrel at noon on January 26th. Gasoline is now 37 cents per gallon more expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1st 2021 functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $197 per ton on January 26th 2022, unchanged from the previous week and $27 per ton less expensive than on January 19th 2020. It is anticipated that the cost of DDGS will rise reflecting the price of corn. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price

 

 Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production and demand for soy oil. The USDA projected a harvest of 4,435 million bushels in the January WASDE. Ending stocks were raised 2.9 percent to 350 million bushels. Total soybean stock on December 1st 2021 amounted to 3.15 billion bushels down 14 percent from December 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for March delivery at 14H00 on January 19th 2022 was higher by 15 cents per bushel to 1,390 cents compared to 1,375 cents per bushel for January delivery last week.

 

According to a release on January 15th by the National Oilseed Processors Association a record 186.4 million bushels of soybeans were crushed in December compared to an expectation of 185.0 million bushels. The December crush value was up 3.8 percent from the November value of 184.0 million bushels.

 

On January 26th 2022 soybean meal quoted central Illinois was $407 per ton, $1 per ton lower than the previous week and compared to $449 per ton on January 19th 2020.

 

On January 26th 2021 Meat and Bone meal was $355 per ton quoted Central U.S., unchanged from the previous week but compared to $380 per ton on January 19th 2020.

 

On January 26th the conversion of the CNY to the BRL was 0.85 BRL, up BRL 0.01 from the previous week. The conversion of the US$ to the CNY was 6.36, down CNY 0.02 from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the January 12th 2021 WASDE # and the USDA quarterly Grain Stocks Report  available under the STATISTICS tab.

 


 

Egg Week

01/26/2022

USDA Weekly Egg Price and Inventory Report, January 26th 2022.

Market Overview

  • Unit revenue for Midwest Extra-large and Large sizes in mid-January was unexpectedly higher by an average of 9.1 percent this past week following a 13.3 percent drop in price over the previous week. Mediums were up 12.8 percent. The increase in price for all sizes this past was consistent with the fall in industry inventory to below 1.8 million cases. This suggests the need for retailers to continue refilling the pipeline with stronger consumer demand than experienced in past years as the industry moves through January 2022. December 2021 and early January 2022 prices contrasted favorably with the corresponding weeks in both 2020 and 2021 respectively that were characterized by low ex-plant unit revenue. The price of shell-eggs will benefit from a net decrease of 2.1 million hens in the producing flock this past week but with a 10.4 million net increase in flock size over 24 weeks. Wholesale Midwest prices increased and still providing positive margins, taking into account the combined costs of nest-run, grading, packaging and delivery.

 

  • Shell inventory was 10.3 percent lower after a 6.4 percent decrease during the previous week. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the published USDA inventory for plants, especially over the short term. Chains spread their purchases in late December and early January and attempted to take advantage of declining prices by drawing down on their inventory allowing industry stock to rise. 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. In January 2022 this strategy has not worked to their advantage due in part to continuing demand attributed to home cooking associated with COVID concerns and restrictions and evidently unseasonal cold weather that increased purchases by consumers. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during October and early November depressed the volume of sales of generics to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

  • Currently inventory has decreased in response to the action of chain buyers and comprises close to five days of production. Price movement during late 2021 and specifically since Labor Day and extending through Christmas defied conventional supply to demand relationships and indicated extraneous factors affecting price of eggs that are not constrained by a feed-price agreement. The increase in price this past week suggests that unit revenue will continue at an unseasonal level through January 2022. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional, collusion. 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 and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

 

  • The U.S. flock in production was down 0.4 percent (1.2 million hens) from the week of January 19th to 321.4 million consistent with planned seasonal molting, placement and depletion, but with about 2.0 million molted hens having resumed production during the early weeks of December. The Industry demonstrated beneficial restraint in flock placement during the third and fourth quarters of 2021 with continued depletions and non-restocking of some complexes or houses and disposal of flocks during the week before Christmas. Margins should continue to increase for commodity eggs due to increased demand as predicated by the pattern of seasonal wholesale prices and weather over the past three weeks. Production margins will be negatively impacted by increased prices for feed and pullet chicks. Higher labor and fuel costs will detract from profit especially if unit revenue fails to match expectations proceeding through the 1st Quarter of 2022.

 

  • There is some prospect of a return in the food service sector with frozen egg prices marginally higher over the past month. Prices of breaking stock and checks are high in relation to generic shell eggs but were unchanged this past week. The U.S. economy is reopening despite ongoing concern over COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three available approved vaccines and boosters in diverse regions and among specific demographics.

 

  • The Midwest price for breaking stock was unchanged from last week at an average of 75.0 cents per dozen. Checks in the Midwest were unchanged at an average of 67.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

 

The Week in Review

Prices

 

According to the USDA Egg Market News Reports released on January 24th, the Midwest wholesale price for Extra-large was 9.0 percent higher to an average of 121.5 cents per dozen; Large were 9.1 percent higher to an average of 119.5 cents per dozen; Mediums were higher by 12.8 percent to 105.5 cents per dozen as delivered to DCs. Prices should be compared with the USDA benchmark average 6-Region blended nest-run cost (excluding provisions for packing, packaging materials and transport) of 71.8 cents per dozen in December 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The January 24th 2021 edition of the USDA Egg Market News Report (Vol. 69: No. 04) documented a USDA Combined Region value rounded to the nearest cent, of $1.21 per dozen delivered to warehouses for the week ending January 17th 2022. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.10 per dozen. At the high end of the range, price in the South Central Region attained $1.28 per dozen. The USDA Combined Price last week was 25 cents above the 3-year average. This past week Midwest Large was approximately 30 cents above the corresponding week in 2021. Prices followed a plateau after Christmas and then fell with an anticipated downward trajectory in the near term given the full industry pipeline moving into 2022. Increased consumer demand has reversed this situation.

 

Flock Size

According to the USDA the number of producing hens reflecting January 26 th (rounded to 0.1 million) was 2.1 million lower to 321.4 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 4.5 million new pullets reaching maturity during the week, offset by flock depletion. Based on inventory level the hen population producing eggs is now in approximate balance with current consumer demand. Exports are at a moderate level with lower exports to South Korea following restoration of flocks previously depleted due to HPAI. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Any number of producing hens above a subjectively determined range of 322 to 324 million in production during late-January, portends lower prices depending on relative levels of producer and store inventories. For the next week prices will stabilize, given the increases in inventory over the previous two weeks. Mild undersupply as denoted by inventory is attributed to flock depletion together with the contribution of hens returning to production from molt in early December 2021 coupled with pullets placed 24 weeks earlier that are now in production.


 


USAPEEC Optimistic Over Future Egg Exports to Mexico

01/24/2022

The USDA Agricultural Trade Office in Mexico City estimates that egg consumption in Mexico will attain 450 eggs per capita in 2022, three percent higher than the previous year. The increase is based on the perceived value of eggs in comparison to alternative animal proteins.  Based on projections of increased demand, USAPEEC Mexico sponsored by the American Egg Board, has embarked on an aggressive program of promoting U.S. table eggs and egg products.  Hands-on workshops have concentrated on application of dried egg products for the bakery, food service and processing sectors.  Online technical training seminars (Huevinars) have promoted the benefits of U.S. egg products in value-added products.

 

For the period January through November 2021, Mexico imported 51 million dozen table eggs valued at $40.7 million, 12 percent higher in volume and 32 percent higher in value compared to the corresponding period in 2020.  For the eleven-month period in 2021, fourth-ranked Mexico imported 4,802 tons of egg products valued at $11.1 million.  Volume and value were respectively 46 percent and 34 percent lower than the first eleven months of 2020.


 

Towards a Universal Coronavirus Vaccine

01/24/2022

A number of U.S. and international research laboratories are developing and in some cases testing broad-spectrum or universal vaccines against sarbecoviruses, a group that includes the viruses responsible for SARS, MERS and COVID.  Research on novel vaccines is now in progress at the California Institute of Technology (CalTech), the Walter Reed Army Institute of Research, the University of Virginia and the Duke Human Vaccine Institute.

 

Pamela Bjorkman at CalTech noted, "the great thing about having such vaccines is that they could handle potentially new variants as well as the next spill-over viruses that will come down the road".

 

Kayvon Modjarrad, is a co-inventor of a candidate multi-spectrum vaccine now in a phase-one trial involving primates.  The vaccine builds on technology used to develop influenza vaccines and uses a nanoparticle carrying copies of the SARS-CoV-2 spike protein.  The vaccine under development at the University of Virginia and the International Vaccine Institute in Seoul, South Korea uses the fusion peptide region of the coronavirus spike protein that is highly conserved among all coronaviruses.

 

Successful development of a universal vaccine that is effective in protecting against a range of sarbecoviruses has the potential to deliver a broad-spectrum vaccine against multiple strains of infectious bronchitis of chickens. This ubiquitous infection is characterized by constantly evolving variants emerging in production regions with high concentrations of commercial broilers and breeders or egg production flocks.


 

Jim Sumner Receives the Harold E. Ford Lifetime Achievement Award

01/24/2022

On January 24th 2022 Jim Sumner, president & CEO of the USA Poultry & Egg Export Council (USAPEEC), was honored by U.S. Poultry & Egg Association with the Harold E. Ford Lifetime Award on the occasion of the 2022 International Production & Processing Expo. This Award is presented to an industry individual demonstrating dedication and leadership over a career contributing both to the poultry industry and USPOULTRY. The award is presented only when the Awards and Recognition Committee unanimously recognizes and endorses the need for a person who has made exceptional contributions.

 

On commenting on the award, John Starkey, president of USPOULTRY stated “The connecting ties and friendship between Jim, USAPEEC and USPOULTRY are long and deep. It is a privilege to work with Jim, and we are honored to present this award.”

 

Sumner earned a BS in Journalism from Southern Illinois University. He has served as president and CEO of USAPEEC since 1990 and president of the International Poultry Council since 2005. He is also a past president of the World Poultry Federation. 

He has served as a member of the USDA Agricultural Policy Advisory Committee for Trade for many years. He has also served as an export advisor to the American Egg Board and Chairman of the Trade and Executive Committees of the International Egg Commission. In 2012, Sumner was honored with a Lifetime Achievement Award from the National Poultry & Food Distributors Association (NPFDA).

 

Under his leadership, USAPEEC built a strong team in Atlanta, has opened to 16 international offices on four continents, helped establish trade with dozens of countries including Mexico, China and Cuba, and launched the International Poultry Council (IPC) and World Poultry Federation (WPF).


 

PepsiCo Foods CEO Comments on Post COVID Trends

01/23/2022

TotalRetail recently commented on a presentation by Steven Williams, CEO of PepsiCo Foods.  Delivering a keynote address at the 2022 National Retail Federation Big Show this past week, Williams commented on trends emerging during COVID that will persist after the pandemic is suppressed.  Major changes included:-

 

  • E-commerce grew at a faster rate than would otherwise have occurred since consumers were reluctant to shop at large supermarkets.  This trend will continue as evidenced by the investments made by Walmart, Kroger and Albertsons who are competing with Amazon, the industry leader.  Williams noted “E-commerce is here to stay as far as I’m concerned.”
     
  • During the first two quarters following the emergence of COVID, there was a marked swing to in-home meal preparation and dining.  This trend will continue, but will require products offering ease of preparation and cleanup.  Many supermarkets have introduced prepared meals and the home cooking trend has provided a lifeline to companies shipping prepared meals.  Some companies have established strategic partnerships with supermarkets to avoid the cost of shipping and to take advantage of both curiosity and availability of products.  Home delivery of restaurant-prepared meals soared following the advent of COVID, but other than affluent urban consumers, the cost of delivery is an important consideration in patterns of purchasing.
     
  • Value has emerged as an important determinant in the purchase decision.  Food inflation has increased the price of both restaurant meals and supermarket ingredients.  It is apparent that escalation in the cost of protein and especially beef and pork, has benefited the poultry industry with chicken gaining market share both in restaurants, QSRs, and retail.  Eggs benefit from relatively low price based on nutrient content, versatility, and ease of preparation.  The challenge facing the egg industry will be to convince consumers that eggs are suitable for lunches and dinner mealtimes, expanding the traditional acceptance of eggs as a breakfast staple.
     
  • Patronage of small, local supermarkets - Many consumers concerned over the potential for exposure in large supermarkets shifted their purchases to smaller local stores.  This trend was especially evident in urban areas.  The brick-and-mortar segment of Amazon is certainly benefitting from this move with high-technology stores incorporating smart carts and just-walk-out options.

 

Certified Group and FSNS Appoint President for Food and Beverage

01/23/2022

Certified Group and subsidiary company Food Safety Net Services have announced the appointment of Justin Malvick as President, Food and Beverage.  In this role he will be responsible for developing strategy and guiding the business unit.

 

Justin has held leadership positions at JBS S.A., Pilgrim’s Pride, Keystone Foods, and Wayne Farms over a 23-year career in the food industry.  Justin earned a B.S. degree from the University of Minnesota.

 

John Bellinger, CEO of Certified Group and FSNS, stated “We are pleased to have Justin join our executive team with his track record of driving top and bottom line revenue, innovative growth strategies and coaching high performance teams.”

 

Certified Group is a leading provider of testing and regulatory consulting services.  The Certified Group includes Certified Laboratories, FSNS, Labstat, and MicroQuality Laboratories providing services for the food, supplements, cosmetic and nicotine industries.


 

Disparity Between Rural and Urban COVID Vaccination Rates

01/23/2022

According to the Centers for Disease Control and Prevention, as of January 13th, 47.9 percent of the rural population was “completely” vaccinated against COVID.  In contrast, in metropolitan counties, 61.1 percent of the population was “completely” vaccinated.  The rural rate is 22 percent lower than the urban rate on a percentage basis.  The COVID death rate is 30 percent higher in rural counties than in metropolitan areas but with a 25 percent lower incidence rate at present. 

 

 

The lower vaccination rate in rural counties is presumably due to the lower level of interaction that would be expected in urban communities associated with public transport, workplace contacts and entertainment events.  Florida has the widest gap between urban and rural vaccination rates at 64 percent and 44 percent respectively.  Georgia has a rural vaccination rate of 24 percent of the total population, although this figure may be an underestimate as some rural residents were vaccinated in cities.

 

The CDC considers two doses of an mRNA vaccine as being “completely” vaccinated.  Experience in the E.U. and in the U.S. suggests that a booster dose is necessary to provide a high level of durable immunity against the Delta and Omicron variants.  Given the high incidence rate of infections since December 2020, it is possible that the U.S. is moving towards endemic infection with the majority of the population expressing a protective level of antibody stimulated by either vaccination or exposure.  Rural communities will however serve as a source of infection since a high proportion of susceptible individuals will maintain the circulation of SARS-CoV-2 and may even lead to the emergence of variants by mutation. 

 

The policy of the large red meat packers and poultry processors of either mandating or encouraging vaccination will reduce the incidence of COVID in plants and also in rural communities where large instllations are located. This will provide a protective benefit to all residents of communities surrounding a plant. 

 

Effective January 18th 530 million doses of COVID vaccine have been administered in the U.S. with 2009 million, or 63.4 percent, of the population having received two doses.  A total of 81.7 million have received a booster dose and can be regarded as “fully protected” by vaccination. Although 75.2 percent of the U.S. population or 249.7 million, have received one dose of mRNA vaccine, they are inadequately protected and have a significantly higher probability of either severe clinical symptoms, hospitalization, admission to ICU, chronic COVID or even death compared to fully vaccinated individuals, if exposed to SARS-CoV-2 virus. 


 

Tekni-Plex Acquires Fibro Corporation

01/23/2022

In a January 19th release, Tekni-Plex announced acquisition of the assets and technology of Fibro Corporation, located in Tacoma, WA.  The company develops and manufactures molded fiber packaging for eggs and fresh food supplying sustainable pulp-based containers. The production capability of the Fibro Corporation will be integrated with Dolco Packaging allowing the company to supply egg cartons fabricated from either polystyrene foam, PET or pulp. Fibro has developed a smooth-finished, fiber-based egg carton facilitating precise printing and product presentation.

 

Previously Tekni-Plex acquired Keyes Packaging Group and Grupo Phoenix to increase the range of biodegradable packaging that will contribute to sustainability.

 

In commenting on the acquisition, Jay Arnold, Senior Vice President and General Manager of Dolco Packaging, stated “Our intention is to invest further in this innovative technology platform as we scale up, increase capacity, and expand our product line to bring superior solutions to the broader fresh-foods landscape.”


 

Co-infection with Influenza and COVID Reported

01/23/2022

Co-infection with COVID and Influenza has been reported from thirteen states with between two and ten cases diagnosed within the past week with Virginia reporting 20 hospitalizations.  It is recommended that workers on farms and in plants should be immunized with the current influenza vaccine that contains four strains in addition to full COVID vaccination comprising a series of two mRNA priming doses plus a booster. 

 

Immunity to influenza in the U.S. population has probably waned since 2020 as public health precautions to prevent COVID, including masking and social distancing, thereby reducing the spread of influenza with the lowest incidence rates in recent memory.  Accordingly the U.S. unvaccinated population is susceptible to influenza. This has clinical implications in the event of a superimposition of Omicron-COVID which is highly infectious and responsible for the increasing incidence rate especially in areas with low vaccination compliance.  Vaccination clinics to administer influenza and COVID vaccines can be arranged with the cooperation of county or state public health departments. Immunization will avoid absenteeism and generate goodwill among the workforce and the community.


 

Novogen Egg Strains Acquired by the EW Group

01/23/2022

In a December 28th release, Groupe Grimaud announced that it has divested egg production strains marked under the Novogen brand to the EW Group, parent company of Hy-Line International and H&N and their subsidiaries.

 

The decision was made by the Groupe Grimaud to allow the respective companies to ensure the sustainability of their activities and offer new opportunities for development.

 

Under new ownership, Novogen will retain its own identity and continue to select and sell layer breeders worldwide.  The Novogen teams in the E.U. and North America anticipate acceleration in development and new opportunities to serve the egg production industry.  Additional information is available from Bob Randall at bob.randall@novogen-layers.com

 


 

Sad Passing of Dr. Peter M. Biggs

01/22/2022

The American Association of Avian Pathologists (AAAP) has announced the passing of Dr. Peter M. Biggs on December 27th at the age of 95.  Prior to his retirement, Dr. Biggs was the Director of the Houghton Poultry Research Station in the U.K.  His career was devoted to research on avian tumors. His pivotal contribution was to differentiate between lymphoid leucosis, a retroviral condition and Marek’s disease caused by a herpesvirus. Dr. Biggs named this condition in recognition of Professor Josef Marek who described the clinical presentation and the gross and histological neural lesions in 1907. 

 

Dr. Biggs was evacuated to the U.S. during World War II and attended high school in Cambridge MA. On his return to England Dr. Biggs joined the Royal Air Force in the autumn of 1944 and was detached to Queen’s University, Belfast under a university short course program similar to our OTC programs.  He holds the distinction of flying solo in a De Havilland Tiger Moth biplane trainer in only five hours compared to a normal ten hours.  Eschewing aviation on demobilization and following a keen interest in zoology he entered the Royal Veterinary College in London graduating in 1952.  He undertook doctoral research in avian virology at the Veterinary School of the University of Bristol.  In 1955 he completed his doctoral degree and was appointed a Lecturer (Assistant Professor) in veterinary clinical pathology moving to the Houghton Poultry Research Station in 1959 to study avian leucosis.

 

Dr. Biggs was a frequent visitor to the United States and developed collaborative projects with colleagues Drs. Ben Burmeister and Graham Purchase at the USDA-ARS Avian Disease and Oncology Laboratory in East Lansing, MI.  He was responsible for the first Marek’s vaccine.

 

He undertook projects in oncology in cooperation with Duke University, the National Cancer Institute and Cornell University.  He was appointed director of the Houghton Poultry Research Station and the Institute for Animal Health in 1973 and served in that position for 12 years.  He retired in 1987 but maintained an interest in the British Veterinary Association. Other contributions to the poultry industry included establishing the World Veterinary Pathology Association and the Founder Editor of Avian Pathology.

 

Among many honors, Dr. Biggs was selected as a Fellow of the Royal Society in 1976, the ultimate U.K award in science and was a Founding Fellow and Council Member of the Academy of Medical Sciences established in 1998.  He served on many U.K. government committees including control of biological weapons and scientific aspects of international security.


 

Avian Influenza Vaccination Suggested for the EU

01/21/2022

Given extensive outbreaks of avian influenza in the E.U., the Administer of Agriculture for France, Julien Denormandie is encouraging all 27 member states to adopt vaccination as a preventive and control measure.  France in particular has experienced a number of devastating epornitics especially in regions producing foie gras requiring pasture management of large flocks of waterfowl that are susceptible to H5 and H7 virus carried by migratory birds.

 

Stamping out has proven to be expensive and unsuccessful given the seasonal introduction of virus by migratory waterfowl.  The secondary consideration is the possibility of a mutation of H5 or H7 influenza viruses to become pathogenic to humans.  Although the specific case of human H5N1 reported in the U.K. is regarded as a possible warning, the circumstances of the infection of the patient were highly specific in that he had more than twenty ducks in his home and fed feral ducks in his village.

 

In a Monday, January 17th press conference, Minister Denormandie stated, "for the past year and a half we have worked incredibly hard with all sectors and yet the virus continues to spread".  He added, "so it is in a very lucid way that I say while we have been invested enormously on biosecurity measures that tomorrow we need to be able to fight this virus with the help of a vaccine".

 

It is understood that veterinary authorities in France have initiated pre-emptive slaughter of as many as a million commercial waterfowl in an attempt to control HPAI in the southwest Departments affected in past years.


 

Take Home Messages from the Latest USDA AI Webinar

01/21/2022

Following the confirmation of three isolates of H5N1 from free-living waterfowl the USDA-APHIS presented a webinar for stakeholders on Tuesday, January 18th.  The recoveries to date are:

  • H5N1 confirmed January 14th from an American wigeon  (Marecaa americana) in Colleton County, SC.
  • H5N1 confirmed from a blue-winged teal (Anas discors) on January 18th from Colleton County, SC.
  • H5N1 confirmed from a northern shoveler (Spatula clypeata) on January 18th from Hyde County, NC.

 

All three isolates were obtained from hunter-killed birds as part of the USDA-APHIS wild bird surveillance program.  From mid-June 2021 to mid-March 2022, the survey will involve twenty-five states with a projected 16,000 samples.  Nine thousand of these samples will be from the Atlantic Flyway extending from Maine to Florida.

 

Dr. Michael Neault of the South Carolina Department of Agriculture, Dr. Michael Martin of the North Carolina Department of Agriculture and Consumer Affairs and Dr. Rose Marie Sifford of the USDA all emphasized the need for high levels of biosecurity on commercial farms.

 

It is noted that in the event of a diagnosis of avian influenza or shedding of H5 or H7 virus by migratory birds, authorities in most E.U. nations recommend or mandate confinement of all flocks depending on jurisdiction and legislation.  Once avian influenza is detected through surveillance in migratory birds, commercial flocks should be confined to prevent infection.

 

The USDA has numerous advisories on their website for the information of both backyard poultry and hobbyist-owners of poultry. Appropriate recommendations are also provided for managers of commercial operations to upgrade biosecurity.  It is however necessary to adapt general principles to specific operations both with respect to structural biosecurity involving capital investment and operational biosecurity that requires planning implementation and ongoing control.

 

Given that there is evidence of H5N1 strain highly pathogenic avian influenza virus in the Atlantic Flyway, additional cases in wild birds will be detected through the surveillance system.  The commercial industry must endeavor to implement effective biosecurity in accordance with a predetermined program using professional resources and taking into account local risks and circumstances.


 

COMMODITY REPORT

01/21/2022

WEEKLY COMMODITY REPORT: January 19th 2022.

 

  • Corn and soybean prices and volumes again fluctuated over a wide range of up to 2.0 percent of value daily during the past four trading days but settled higher on January 19th. The trend was influenced by rumors and data concerning orders from China coupled with domestic demand and the release of the January 12th WASDE Report, indicating higher ending stocks. The CME quotation for corn was up 4.3 percent and soybeans were up 1.1 percent, reversing the trend of the previous week. Soybean Meal was 1.7 percent lower compared to Thursday January 12th but will soon reflect the escalation in the price of soybeans.
     
  • Factors influencing prices in either direction included:-
    • Anticipation of orders from China despite projections for reduced domestic demand. (transitory upward pressure)
    • Trend of decreasing weekly ethanol production and demand (downward pressure on corn)
    • Reports of rain easing the drought in Brazil after previous predictions of lowered yields. (downward pressure)
    • Reports of COVID in the Port of Rosario reducing shipments from Argentine (Small upward pressure)
    • Imports of corn by Mexico (transitory upward pressure)
    • Release of the January 12th WASDE #620. Projections for corn and soybean yield, acreage production were little changed, exports were reduced but ending stocks, were increased for the 2022 harvest. (transitory downward pressure).

     
  • Based on CME quotations U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $6.10 per bushel for corn in March, up 4.3 percent from last week. Crushers will pay $13.90 per bushel for soybeans plus transport and basis during March 2022, up 1.1 percent from the January 12th quotation for March delivery. Soybean meal was $7 per ton (1.7 percent) lower for March delivery compared to last week, reflecting higher domestic supply but with profitable export of soy oil.
     
  • The FAS Export Report released on January 13th for the week ending January 5th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 25.79 million metric tons (1,015 million bushels) with 15.66 million metric tons (616 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 0.46 million metric tons (18.1 million bushels) with 1.0 million metric tons (39.8 million bushels) shipped. For market year 2022-2023 outstanding sales amounted to 1.51 million metric tons (59.4 million bushels) with no orders this past week.
    (conversion 39.36 bushels per metric ton)
     
  • The FAS Export Report released on January 13th 2022 for the week ending January 5th reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 10.81 million metric tons (397.1 million bushels) with 31.63 million metric tons (1,162 million bushels) actually shipped. Weekly soybean orders attained 0.74 million metric tons (27.2 million bushels) with 1.02 million metric tons (37.5 million bushels) shipped.
    (conversion 36.74 bushels per metric ton)
     
  • For the week ending January 5th 2021, 104,000 metric tons of soybean meal and cake were ordered for the market year 2021-2022, up 230 percent from the previous week. During the past week 207,880 metric tons of meal and cake was shipped, up 19.3 percent from the previous week and representing 7.4 percent of the total 2,822,800 metric tons shipped during the current marketing year to date.
     
  • Projected harvests and ending stocks were documented in the January 12 th WASDE providing projections on quantities harvested and the effect of trade and domestic consumption on ending stocks that were increased from the November report.

 

The following quotations for delivery in the months as indicated were posted by the CME at 14H00 on January 19th 2022, compared with values posted at close of trading on January 12th 2021 (in parentheses):-

COMMODITY

 

Corn (cents per bushel)

March 612 (587).

May 612 (589).

Soybeans (cents per bushel)

March 1,390 (1,375).

May 1,400

Soybean meal ($ per ton)

March 399 (406).

May 397

 

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

Corn:

March quotation up 25 cents per bushel

(+4.3 percent)

Soybeans:

March quotation up 15 cents per bushel

(+1.1 percent)

Soybean Meal:

March quotation down $7 per ton

(-1.7percent)

 

The USDA weekly wholesale feedstuffs prices per short ton for January 18 th 2022 were:-

  • Corn: $210 ($211), Chicago
  • Soybean Meal: $408 ($431), Central Illinois
  • Meat and Bone Meal: $355 ($350), Central Midwest
  • DDGS: $197 ($192), Eastern corn belt
  • Wheat Middlings: $140 ($140), Minneapolis
    • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen
    • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.44 cent per dozen

 

The respective changes in the prices of corn and soybean meal for January 18th compared with January 11th USDA weekly quotations would decrease nest-run production cost for eggs by 1.1 cents per dozen.

 

Over the past 53 weeks the algebraic escalation in the prices of major ingredients has added 6.6* cents per dozen to eggs. Year-to-date feed cost has declined by 1.9 cents per dozen

*(rounded to 0.1cent)

 

According to the January 12th WASDE, corn harvested in calendar 2022 will be 15,115 million bushels with ending stocks projected at 1,540 million bushels compared to the December 2021 WASDE Report. Total corn stocks on December 1st 2021 amounted to 11.6 billion bushels up 3 percent from December 1st 2020.

 

Compared with the December 12th value, the CME quotation for corn at 14H00 on January 19th for March 2022 delivery was up 25 cents per bushel to 612 per bushel March delivery, reversing the decrease from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 91.9 percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending January 14th 2021 the industry produced on average 1,053,000 barrels per day, up 4.7 percent from the week ending January 7th 2022, and the 14th consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On January 14th ethanol stock was up 3.1 percent from the previous week to 23.6 million barrels, representing an approximately 21-day reserve but confirming an increase in demand given a lower increase in stock relative to higher production during the week.

 

Ethanol quoted on the CME was priced at $2.20 per gallon on January 19th up 4 cents per gallon (1.9 percent) from the previous week and compared to a 52-week range of $1.59 to $3.21per gallon. Concurrently RBOB gasoline at $2.45 per gallon (CME. Chicago) was up 6 cent per gallon (2.5 percent) from the previous week, consistent with a 5.9 percent higher WTI crude price of $87.36 per barrel on January 19th a seven-year high. Gasoline is now 25 cents per gallon more expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1st 2021 functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $197 per ton on January 18th 2022, up $4 per ton from the previous week and $20 per ton less expensive than on January 12th 2020. It is anticipated that the cost of DDGS will rise reflecting the price of corn. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price

 

 Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production and demand for soy oil. The USDA projected a harvest of 4,435 million bushels in the January WASDE. Ending stocks were raised 2.9 percent to 350 million bushels. Total soybean stock on December 1st 2021 amounted to 3.15 billion bushels down 14 percent from December 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for March delivery at 14H00 on January 19th 2022 was higher by 15 cents per bushel to 1,390 cents compared to 1,375 cents per bushel for January delivery last week.

 

According to a release on January 15th by the National Oilseed Processors Association a record 186.4 million bushels of soybeans were crushed in December compared to an expectation of 185.0 million bushels. The December crush value was up 3.8 percent from the November value of 184.0 million bushels.

 

 

On January 18th 2022 soybean meal quoted central Illinois was $408 per ton, $8 per ton lower than the previous week and compared to $365 per ton on January 12th 2020.

 

On January 18th 2021 Meat and Bone meal was $355 per ton quoted Central U.S., up $5 per ton from the previous week but compared to $365 per ton on January 12th 2020.

 

On January 19th the conversion of the CNY to the BRL was 0.86 BRL, up BRL 0.01 from the previous week. The conversion of the US$ to the CNY was 6.34, down CNY 0.25 from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the January 12th 2021 WASDE # and the USDA quarterly Grain Stocks Report are available under the STATISTICS tab.


 

China Using Food Safety as a Retaliatory Measure

01/20/2022

As a typical response to any perceived criticism, health authorities in China are investigating a Sam's Club warehouse in Chengdu, the capital city of Sichuan Province.  The investigation by the Bureau for Market Regulation was initiated following alleged complaints regarding ‘spoiled’ beef. The Authorities claim that products ‘did not meet standards’ and ordered a recall.  The intensive audit that ensued also disclosed some deviations from regulations.

 

Authorities in China have publicized a $50,000 fine imposed on Walmart in 2021, possibly in an attempt to discredit the Company and the Sam's Club brand.

 

The action by Chinese authorities is regarded as a retaliatory response to Walmart announcing that it would not stock products from the Province of Xinjiang. This action followed enactment of a U.S. law banning imports from Xinjiang of products allegedly produced in facilities employing coerced-labor.

 

Previous actions by Central or Provincial governments in China confirm a militant and disproportionate response to any criticism or perceived impact on image that might be considered an insult or loss of ‘face’.


 

Egg Week

01/19/2022

USDA Weekly Egg Price and Inventory Report, January 19th 2022.

Market Overview

  • Unit revenue for Midwest Extra-large and Large sizes in mid-January was predictably down by an average of 13.3 percent this past week following a 13.6 percent drop in price over the previous week. Mediums were down 2.1 percent. The decrease in price for all sizes this past was in contrast to the unexpected fall in industry inventory to below 2 million cases. This suggests the need for retailers to refill the pipeline with weakening of demand lower than experienced in past years moving through January 2022. December 2021 and early January 2022 prices contrasted favorably with the corresponding weeks in 2020 and 2021 respectively that were characterized by low ex-plant unit revenue. The price of shell-eggs will not be unduly affected by a net decrease of 0.6 million hens in the producing flock this past week but with a 12.5 million net increase in flock size over 23 weeks. Wholesale Midwest prices retreated but are still providing positive margins, taking into account the combined costs of nest-run, grading, packaging and delivery.

 

  • Shell inventory was 6.4 percent lower after a 1.8 percent increase during the previous week. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the published USDA inventory for plants, especially over the short term. Chains spread their purchases in late December and early January and attempted to take advantage of declining prices by drawing down on their inventory allowing industry stock to rise. 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. In 2022 this strategy has not worked to their advantage due in part to continuing demand attributed to home cooking associated with COVID concerns and restrictions and also unseasonal cold weather that increased purchases by consumers. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during October and early November depressed the volume of sales of generics to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

  • Currently inventory has increased in response to the action of chain buyers and comprises close to five days of production. Price movement during late 2021 and specifically since Labor Day and extending through Christmas defied conventional supply to demand relationships and indicated extraneous factors affecting price of eggs that are not constrained by a feed-price index. The decrease in price this past week suggests that unit revenue continues a seasonal decline through January 2022 after a one-week plateau that followed high pre-Christmas prices. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional, collusion. 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 and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

 

  • The U.S. flock in production was down 0.2 percent (0.6 million hens) from the week of January 12th to 323.5 million consistent with planned seasonal molting, placement and depletion, but with about 2.5 million molted hens having resumed production during the early weeks of December. The Industry demonstrated beneficial restraint in flock placement during the third and fourth quarters with continued depletions and non-restocking of some complexes or houses and disposal of flocks during the week before Christmas. Margins should continue to increase for commodity eggs due to increased demand as predicated by the pattern of seasonal wholesale prices over the past three weeks. Production margins will be negatively impacted by increased prices for feed and pullet chicks. Higher labor and fuel costs will detract from profit especially if unit revenue fails to match expectations in the 1 st Quarter of 2022.

 

  • There is some prospect of a return in the food service sector with frozen egg prices marginally higher over the past month. Prices of breaking stock and checks are high in relation to generic shell eggs and actually rose this past week. The economy is reopening despite ongoing concern over COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three available approved vaccines and boosters in diverse regions and among demographics.

 

  • The Midwest price for breaking stock was up 3.4 percent to an average of 75.0 cents per dozen. Checks in the Midwest were up 6.3 percent to an average of 67.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

 

The Week in Review

 

Prices

According to the USDA Egg Market News Reports released on January 18th, the Midwest wholesale price for Extra-large was 13.2 percent lower to an average of 111.5 cents per dozen; Large were 13.4 percent lower to an average of 109.5 cents per dozen; Mediums were lower by 2.1 percent to 93.5 cents per dozen as delivered to DCs. Prices should be compared with the USDA benchmark average 6-Region blended nest-run cost (excluding provisions for packing, packaging materials and transport) of 71.8 cents per dozen in Decembe2 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The January 18th 2021 edition of the USDA Egg Market News Report (Vol. 69: No. 03) documented a USDA Combined Region value rounded to the nearest cent, of $1.37 per dozen delivered to warehouses for the week ending January 10th 2022. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.27 per dozen. At the high end of the range, price in the South Central Region attained $1.45 per dozen. The USDA Combined Price last week was 58 cents above the 3-year average. This past week Midwest Large was approximately 60 cents above the corresponding week in 2021. Prices followed a plateau after Christmas and then fell with an anticipated downward trajectory in the near term given the full industry pipeline moving into 2022.

 

Flock Size

According to the USDA the number of producing hens reflecting January 19 th (rounded to 0.1 million) was 0.6 million lower to 323.5 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 4.5 million new pullets reaching maturity during the week, offset by flock depletion. Based on inventory level the hen population producing eggs is in excess in relation to current consumer demand. Exports are at a moderate level with lower exports to South Korea following restoration of flocks previously depleted due to HPAI. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Any number of producing hens above a subjectively determined range of 322 to 324 million in production during mid-January, portends lower prices depending on relative levels of producer and store inventories. For the next week prices will stabilize, given the increases in inventory over the previous two weeks. Oversupply as denoted by inventory is attributed to the contribution of hens returning to production from molt in early December 2021 coupled with pullets placed 24 weeks earlier that are now in production.


 


Stop Press

01/19/2022

H5N1 HPAI Present in Migratory Waterfowl in the Carolinas

 

The USDA-APHIS waterfowl surveillance program has confirmed the presence of H5N1 HPAI virus from hunter-killed ducks in Colleton County SC. and Hyde County NC. This latest disclosure together with demonstration of the virus in the Province of Newfoundland and Labrador suggests extensive distribution of AI in free-living birds within the Atlantic Flyway. This has implications for non-confined poultry along the Eastern Seaboard and the need for effective structural and operational biosecurity in commercial farms and complexes.


 

U.S. to Retry Case Alleging Collusion on Chicken Pricing in February

01/19/2022

Following the late 2021 mistrial of poultry executives previously affiliated with Pilgrim's Pride, Claxton Poultry and Tyson Foods, the Department of Justice has elected to retry the Defendants beginning February 22nd 2022. The Court has rejected legal claims by the defendants that a re-trial is unwarranted.

 

The Defendant's attorneys  requested a delay in the case. They contended that, "a modest modification of the retrial date from February 22nd to March 22nd 2022, with a maximum exclusion of 27 days would ensure continuity of counsel, protect the integrity of the jury pool and better safeguard all interested persons from COVID 19 exposure".

 

The Government urged the Court to deny the motion to delay the trial to March 22nd. The U.S. Department of Justice submitted, "public interest in retrying this high-profile case as soon as possible is manifest and is not outweighed by the Defendant's interest in continuity of counsel or in being able to prepare adequately due to the case’s complexity". 

 

In the event Chief Judge Philip A. Brimmer denied the request for a delay stating in his opinion “The Court finds that the evidence is sufficient for a reasonable jury to find that the charged conspiracy existed and that each defendant knowingly joined the conspiracy, knowing of its goal and intending to help accomplish it.” 

 

Defendants include William (Bill) Lovette and Jayson Penn, successively CEOs of Pilgrim's Pride and Mikell Fries, President of Claxton Poultry and Scott Brady, Vice President of the company.


 

IPPE to Feature New Products

01/18/2022

The 2022 International Production and Processing Expo (IPPE) will feature 33 innovative products and services in the New Product Showcase at Booth BC10335.  Products of special interest to the egg industry include:

  • Chore Time Catalyst™ Controller

     

  • BinTrac Vision Mobile
  • Orka Food Technology Egg Tester Ultimate
  • Val-Co Smart VS™
  • Big Dutchman Inc. BFN Fusion Cloud Based Platform

 

 

The 2022 IPPE exhibit space will extend over 520,000 square feet with 1,150 exhibitors.


 

Walmart Expanding InHome Service

01/18/2022

Walmart Inc. has announced that it will expand their InHome service to 30 million U.S. households by the end of 2022. This will require investment in an all-electric vehicle fleet and hiring of 3,000 delivery drivers.

 

Tom Ward, Senior Vice-president stated, "we have been operating InHome in select markets over the last two years and have found it is a perfect solution for customers who want to live their lives without worrying about making it to the store or being home to accept a delivery".  Based on an existing six million household clientele and operating since 2019 InHome delivery provides convenience and security.

 

The system requires customers to place an order on a Walmart App. specifying InHome as a preferred delivery option.  An InHome associate completes the order using a one-time access code to unlock the door of the home or garage with monitoring of the delivery.

 

The InHome delivery services will cost $19.95 per month or $148 per year with no additional fees with tips incorporated into the membership price.  Users of the service can install a smart lock or garage keypad from InHome for $50.

 

InHome drivers are employed by Walmart and receive a $1.50 per hour premium above current store rates.  The Company provides benefits including medical, vision and dental insurance and a 401(k) matching program and payment of all tuition and books through the Live Better U Program.

 

The role of associate delivery driver was created in 2019 and according to Julie Murphy, Executive Vice-president and Chief People Officer "expanding the number of our InHome associates is a testament to the trust and confidence we have in them and their continuous commitment to our customers".

 

The InHome delivery service will complement existing delivery and express delivery from 3,400 Walmart stores accessing 70% of the U.S. population.


 

Midwest Poultry Federation Convention COVID Requirements

01/18/2022

The Midwest Poultry Federation has announced requirements to protect participants during the 2022 Convention to be held from March 22nd to March 24th at the Minneapolis Convention Center. The Midwest Poultry Federation will follow COVID guidelines, regulations to be in place in Minneapolis and the state of Minnesota at the time of the Convention. The Federation recommends that all attendees and exhibitors be fully vaccinated:

 

  • As of January 19th the city of Minneapolis will require proof of full vaccination or a negative test within 72 hours before entering the Minneapolis Convention Center that serves food and drink. Attempts are underway to separate food and drink areas from event space to create areas where the vaccine requirement would not be in effect.
  • The Minneapolis Poultry Federation will update prospective attendees and exhibitors if there are changes to regulations before the Convention.
  • All participants must wear a face covering unless exempted by a medical condition
  • The NPF has requested that any attendee with COVID-like symptoms should refrain from attending the convention.

 

Intensive cleaning and disinfection of public spaces has been planned.

 

Additional information is accessible at < info@MidwestPoultry.com>.


 

USPOULTRY Funded Projects to be Presented at the 2022 IPPE

01/18/2022

For the fifth consecutive year, recipients of USPOULTRY Foundation Funding will present the results of their investigations as TECHTalks during the 2022 IPPE on Thursday Janury 27th in the TECHTalks theater B8579.  Presentations of relevance to egg production include:-

 

  • Effect of varying protein/amino acid level of diets with or without protease to reduce feed cost, improve egg quality and egg solids in post-peak and late-lay. Dr. Pratima Adhikari, Assistant Professor Department of Poultry Science Mississippi State University. 10H30 to 10H50.
  • Molecular typing of current reovirus variant strains. Dr. Rodrigo Gallardo, Associate Professor in Poultry Medicine School of Veterinary Medicine University of California-Davis. 11H30 to 11H50.

 

Hotraco Agri to Demonstrate Control Systems for Aviary Houses

01/17/2022

Hotraco Agri will demonstrate advanced control systems specifically engineered for aviary housing at the 2022 IPPE at Booth B5849.  Based on experience gained with aviaries in the E.U. over the past 20-years, Hotraco systems are designed to facilitate even distribution of a flock among tiers and will optimize egg production and egg collection.

 

The Fortica® Control System integrates management of feeding, lighting and control of the internal environment of a house.  By dimming lighting in a predetermined sequence hens are attracted to specific areas in the system.  The Fortica® System can monitor flock weight, egg production and feed consumption for precise management of flocks to optimize production and profit.


 

Slice of Learning at 2022 MPF Convention

01/17/2022

The Midwest Poultry Federation (MPF) will present the “Slice of Learning” educational program on Thursday, March 24th during the Convention to be held at the Minneapolis Convention Center March 22nd-24th, 2022.  The program will be organized by MPF Education co-chairs Dr. Darrin Karcher, Purdue University, and Dr. Ken Kolkebeck, University of Illinois.

 

 

 

Information on the MPF Convention events education program and exhibitors can be accessed at <www.midwestpoultry.com>.


 

Hy-Line Management Appointments

01/17/2022

In a January 14th release, Jonathan Cade, president of Hy-Line International, announced the appointment of Eduardo de Souza Pinto as president of Operations effective March 1st 2022.  In this role he will be responsible for internal production, exports, administration, and logistics.  He was most recently president of the Americas for Valo Biomedia, an affiliate company, producing SPF eggs.

 

Dr. Travis Schaal will serve as Technical Director for Operations responsible for biosecurity, welfare, veterinary activities, and lab services.  Dr. Schaal will also provide technical assistance to the Global Technical Services Department reporting directly to the president.

 

Dr. Danny Lubritz will continue to focus on research and development, leading a team of geneticists and technicians.

 

In commenting on the appointments, Jonathan Cade noted, “By creating these very clear and dedicated areas of our business, we all believe we can bring improvement in our genetics and GP and PS quality to the field faster with enhanced focus on biosecurity, quality, sales, marketing and technical support.”


 

Antibacterial and Biodegradable Packaging Developed

01/17/2022

Scientists at the Nanyang Technological University in Singapore have developed a corn-based biodegradable packaging material for foods impregnated with citric acid and thyme oil to provide antimicrobial properties.  The packaging is intended for fruit and vegetables to prolong shelf life and reduce accumulation of conventional plastic packaging in landfills.


 

Extensive Outbreak of SE Among Workers at a Canteen in China

01/17/2022

Food Safety News recently reported on an extensive outbreak of Salmonella Enteritidis (SE) infection among workers consuming egg-fried rice served in a company canteen. The event was documented in a peer-reviewed journal* describing the investigation and laboratory studies. 

 

During March 2021, 225 out of 334 workers developed fever, diarrhea and abdominal pain after consuming a mid-day meal that included egg-fried rice. Investigation showed that cooking time and temperature for the dish were inadequate and that the product was contaminated with raw egg in non-cleaned mixing bowls.  Laboratory studies including PFGE and WGS confirmed the commonality of the SE isolate from patients and from the menu item as served.  It was significant that all twenty isolates showed extensive resistance to ampicillin, sulfasoxazole, tetracycline and streptomycin.  The isolates were however sensitive to ciprofloxacin, gentamicin and azithromycin.

 

An interesting observation was that the earliest onset of symptoms following the meal was one hour extending to 38 hours with an average incubation period of 14 hours. The one-hour incubation period is suggestive of some other cause for onset of symptoms or alternatively inaccurate reporting by the patient.  Previously an outbreak of SE occurred on a BA Concorde flight from Heathrow London airport with passengers reporting symptoms shortly before and subsequent to landing on a flight of just over three hours in duration.  The vehicle of infection was identified as hors devours prepared by the airport commissary but also involving 1st Class cabins on other flights of longer duration.

 

The authors implicated contaminated shells as in introducing SE into the prepared dish.  This observation is in part erroneous given that SE is transmitted principally by the vertical route.  No trace-back was mentioned in the article, so presumably the flock of origin would have persisted as a source of infection.  The specific outbreak was the result of improper handling and incomplete cooking of the egg-fried rice dish incorporating eggs from a presumably SE positive flock.

 

* Zhang, Y et al. A severe gastroenteritis outbreak of Salmonella enterica, serovar Enteritidis, linked to contaminated egg-fried rice, China 2021. Frontiers in Microbiology.doi.org/10.3389/fmicb.2021.779749 (November 22, 2021)


 

USDA Bioengineered Logo

01/17/2022

In Accordance with 2016 legislation directing USDA to create a national labeling standard, the Department has unveiled a consumer logo for genetically engineered food.  Prior to January 2022, labeling of GMO foods was at the discretion of individual states.

 

The label will only be required if DNA is detectable in a food product and if the proportion of genetically modified ingredients does not exceed five percent of total weight.


 

Simmons Foods to Expand Van Buren, AR. plant

01/17/2022

Simmons Foods has announced a $100 million expansion of the prepared foods plant in Van Buren, AR. Current capacity is 50,000 tons of fully cooked products annually and the 65,000 square foot expansion with two automated production and packaging lines will double output.  Anticipated operation is for the first quarter of 2023.

 

Simmons Foods will eventually have three production facilities, a human resource center and a care clinic in the River Valley area.  The expansion will add 100 employees to the existing 600 full-time workforce but these positions will require higher skills supporting robotics and automation.


 

IPPE and Midwest to Proceed as In-Person Events Despite Cancellations of Other Meetings

01/17/2022

The organizers of the 2022 IPPE to take place in Atlanta from January 25th to 27th anticipate high attendance in the Georgia World Conference Center. The event will offer a combination of a trade show with 1,200 exhibitors, the International Poultry Scientific Forum and an extensive educational program. Concurrently meetings will take place for associations affiliated with the U.S. poultry industry, the American Feed Industry Association and the North American Meat Institute.  The 2021 IPPE was justifiably cancelled but it is anticipated that voluntary protective measures including suggested vaccination and masking will not result in a mass-spreader event.

 

The Midwest Poultry Federation Convention to take place at the Minneapolis Convention Center March 22nd to 27th will require full vaccination against COVID or testing negative within 72 hours of attending. Face covering will be required within the Convention Center.

In contrast a number of prominent U.S. scientific associations announced that in-person meetings would be cancelled during January and February as a precaution against spreading the Omicron variant of SARS-CoV-2 currently responsible for a surge in U.S. cases. 

  • The American Association for the Advancement of Science (AAAS) the largest general science society worldwide will cancel the in-person component of the annual meeting to have taken place during late January in Philadelphia.  The online segment will proceed.

 

  • The American Meteorological Society is cancelling the in-person meeting scheduled for Houston in January.

 

  • The Joint Mathematics meeting planned for Seattle will be replaced by a virtual meeting in April

 

  • The American Astronomical Society deferred the annual meeting in Salt Lake City as an in-person event in mid-January and has cancelled both in-person and virtual formats.  Approximately 2,000 had registered for the meeting in Utah but the board elected to cancel and consider a subsequent hybrid meeting.

 

The Society of Integrative and Comparative Biology (SICB) held an in-person meeting in Phoenix. The decision to proceed was based on the fact that the Phoenix Convention Center has a suitable ventilation system, with supplementary filtration for meeting rooms and reconfiguring seating.  The SICB also required attendees to show proof of vaccination and to wear masks.

 

Representatives of the various scientific organizations commented on the financial loss as a result of returning registration fees and also expense involved in arranging for virtual presentations.  Organizers of the in-person SICB meeting were faced with rescheduling presentations as participants in the program cancelled as a result of positive COVID diagnosis.

Other than the AAAS meeting, the specialist scientific societies attracted less than 3,000 attendees. 

 


 

Activist Groups Using Shareholder Meetings for Publicity and Funding

01/17/2022

Shareholder Commons a non-profit group has placed a resolution dealing with antibiotic use to be considered at the annual meeting of Hormel Foods.  The activist group is demanding stricter control of antibiotics despite the publication of the Antibiotic Stewardship Report by the Company in January 2021.  Hormel Foods is in compliance with FDA regulations regarding administration of antibiotics to herds.

 

Hormel regards the proposed resolution as an unnecessary expense that will divert attention from management activities by company personnel that ultimately benefit shareholders and other stakeholders.  Generally activist organizations that file resolutions relating to welfare, environmental issues and public health do not gather sufficient shareholder support for adoption. By filing nuisance resolutions activist organizations justify their existence and create the opportunity to generate financial support from contributors.


 

Salmonella Javiana Attributed to Cantaloupe

01/16/2022

The Food and Drug Administration has revealed that cut cantaloupe was responsible for an extensive outbreak of Salmonella Javiana investigated by The Centers for Disease Control and Prevention.  To date, 65 cases were identified over the period from late December 2021 through mid-January 2022.  The implicated product was fresh-cut fruit processed and distributed by Taylor Cut Produce to Pennsylvania, New Jersey, New York and Delaware mainly to institutional customers including schools, restaurants and hospitals.

 


 

Egg Regulatory Program Standards Developed

01/16/2022

In accordance with the Food Safety Modernization Act administered by the Food and Drug Administration, the Agency has cooperated with the Association of National Egg Regulatory Officials to develop the Egg Regulatory Program Standards.  These standards are intended to establish uniformity in the regulatory activities of participating agencies with respect to egg product safety.

 

Egg regulatory program standards address:

  • Regulatory principles
  • Training programs
  • Inspection programs
  • Auditing of inspection programs
  • Egg-borne diseases
  • Laboratory support
  • Responses to egg-borne disease outbreaks
  • Compliance and enforcement
  • Program assessment

 

The Egg Regulatory Program Standards will establish a common basis for individual states to assess egg safety and will provide for uniformity in inspections conducted by federal and state agencies.

 

The Egg Regulatory Program Standards are available from the FDA Office of Partnerships at <OP.feedback@fda.hhs.gov>.


 

JBS Greeley Plant Reports COVID Cases

01/16/2022

The Greeley, CO. plant operated by JBS USA has reported approximately 40 cases of COVID based on diagnostic testing. This plant was the subject of labor unrest and periodic shutdowns during the height of the March and April 2020 COVID outbreak.  The current problem will be limited by the fact that 80 percent of the workforce has received two vaccines with approximately one third regarded as fully vaccinated with a booster dose.  The plant requires wearing of face masks, conducts health screenings and offers drive-through testing and conducts random surveillance.  According to a JBS spokesperson, the recent cases, presumably due to the Omicron variant, have either been mild or asymptomatic.  JBS workers at the Greely plant have received vaccines since March 2021.

 

Weld County, the location of the Greely plant, recorded a COVID incidence rate of 20 per 1,000 over a 14-day period compared to a slightly higher level statewide.

 

The current limited outbreak should demonstrate the value of vaccination in a plant setting. Accordingly it is hoped that data will be released indicating the vaccination status of those who are diagnosed with COVID and those hospitalized to confirm the value of vaccination of workers  required to operate in close proximity.


 

Three Isolates of H5N1 from Migratory Waterfowl in the Carolinas

01/16/2022

As part of the comprehensive surveillance program for avian influenza virus carried by wild birds, USDA-APHIS Wildlife Services obtained positive samples of H5Ni from hunter-killed waterfowl.

  • American Wigeon, Colleton County, SC., January 14th
  • Blue-Winged Teal, Colleton County, SC. January 18th.
  • Northern Shoveller. Hyde County, NC. January 18th.

 

All H5 and H7 isolates irrespective of pathogenicity are reportable to the World Organization of Animal Health.  Since this isolation was from a wild bird, trade restrictions will probably not be imposed.  The wigeon and teal were killed in Colleton County, SC., presumably in the costal wetlands region at the southernmost tip of the county located midway between Charleston, SC. and Savannah, GA. Hyde County, NC incorporates wetlands and a wildlife reserve and is the location of a 2million egg production complex.

 

This report confirms the need to maintain both direct and indirect separation of wild birds from domestic poultry.  It is self-evident that no person connected with the poultry industry should be hunting wild fowl since the risk of contamination with avian influenza outweighs any possible benefits. The reported isolation relates to a high level of recovery of avian influenza viruses from migratory waterfowl as described in the January 7th webinar presented by USDA-APHIS.

 

This case is epidemiologically distinct from the two limited outbreaks of H5N1 avian influenza identified in flocks situated on the Avalon Peninsula of the Province of Newfoundland and Labrador. Isolation of H5N1 virus with Eurasian genes suggests widespread dissemination in the Atlantic flyway with implications for all commercial poultry from Maine to Florida


 

Concern Over Zero Tolerance Policy for COVID in China

01/16/2022

It is apparent that strict lockdowns are suppressing but not preventing spread of the Omicron variant of SARS-CoV-2 in China.  Of special importance to the U.S. is the emergence of the disease in major port-cities including Shanghai, Dalian and Tianjin.  While port facilities are still functional, efficiency has declined, and roadblocks are impeding transport resulting in accumulation of containers on docks. 

 

Attempts by the Government of China to confine COVID to affected regions in advance of the Winter Olympics and the Lunar New Year will have an adverse effect on port function. We can expect disruptions once again in supply chains.  As the 2020 restraints imposed by China are revisited, the ongoing period of inflation prevailing in the U.S. will be prolonged.


 

Giordano Poultry Plast Celebrates 60th Anniversary

01/16/2022

Giordano established in 1962 is celebrating the 60th year of operation. The Company is extending a virtual rain check to customers, delaying a celebration until life returns to normal.  A news release pointed to a corporate history of difficulties balanced by successes, innovative products, new markets, acquisitions and ambitious plans currently on pause due to COVID.


 

Sad Passing of Dr. Egon Vielitz

01/13/2022

The American Association of Avian Pathologists has reported the death of Dr. Egon Vielitz on December 29th at the age of 89.

Dr. Vielitz was an accomplished pioneer poultry veterinarian who spent his entire career with the Lohmann Company extending from 1959 through 1999.  He was involved in developing vaccines including pivotal studies on chicken anemia virus and other immunosuppressive infections.  Through his technical service activities he traveled widely and participated in international meetings. He was a frequent speaker at industry events sharing his experience and knowledge.  During the 1970s this commentator worked with Dr. Vielitz who was intensely practical and could integrate aspects of disease control, management and economics in his recommendations, especially for nations with developing industries.

Egon will be sadly missed by his colleagues and many friends on four continents.


 

HPAI Situation in Israel Deteriorates

01/13/2022

Dr. Nati Elkin compiler of PoultryMed has summarized the current status of highly pathogenic avian influenza in Israel.  Problems commenced in early October 2021 coincident with movement of migratory waterfowl and other species across the northern area of the Nation en route from Africa to central Europe, following along the Mediterranean coastline.  Since October 12th twenty outbreaks have been recorded on commercial farms. 

 

  • Twelve involved either growing or breeding turkeys ranging in size from 5,000 to 107,000 birds. A total of 364,000 turkeys have either died of HPAI or have been depleted in an attempt to control the infection. 
  • Five outbreaks have occurred on egg producing farms ranging in size from 4,000 to 600,000 with a total of 649,000 mature laying hens depleted. 
  • One broiler farm and one broiler breeder farm with a total 66,000 birds were disposed of
  •  A single farm with 18,000 ducks was depleted. 
  • Approximately 7,000 cranes (Grus grus) have died in the Hula Nature Reserve, a wetland in close proximity to the largest outbreak in laying hens.

 

Dr. Elkin reported that in previous epornitics occurring in 2006 and in 2015 only ten outbreaks on commercial farms were recorded, mostly in turkey growing units. 

 

The extensive mortality among turkeys and laying hens will require importation of products to substitute for lost production.  The outbreak is of significance to agriculture in Israel and has received the close attention of the Prime Minister and the cabinet.


 

Demise of Cellulosic Ethanol Plant

01/13/2022

EGG-NEWS has long maintained that cellulosic ethanol is an aspirational goal that has proven financially infeasible and technically overwhelming. Despite considerable investment in research and the erection of pilot plants, commercial production of ethanol using biomass has never been attained. Despite this reality the Renewable Fuels Standard persists in perpetuating the myth of cellulosic ethanol by incorporating an ever-growing provision from plant material. 

 

DuPont designed and erected a plant in Nevada, IA. that broke ground in 2012 and opened in 2015.  The facility was a financial disaster and ceased production shortly after commissioning.  In 2018, Verbio of Germany purchased the mothballed plant with the intention of applying proven technology to generate biomethane from corn stover.  As reconfigured, the Verbio plant will convert 100,000 tons of stover each year to produce the equivalent of 20 megawatts of biomethane. Conversion of the plant required considerable investment and 30 months for modifications and installations.

 

 

The plant began delivering gas into the network of Alliant Energy on December 8th. This public utility will dispense the product at compressed natural gas filling stations.

 

Claus Sauter, CEO of Verbio AG noted, “This was our first major foreign investment and our entry into the North American market.  We have expanded the plant to include biomethane production based on the model we use at our German locations.”  Sauter added, “Our technology does not only create climate-friendly fuel and a high-value fertilizer, it also prevents the release of additional emissions from agricultural production that would have resulted from the corn stover being left on fields.”

 

Senator Chuck Grassley (R-IA) stated, “I’m excited to welcome Verbio to Iowa. There has been a huge investment in the plant and it will have a tremendous impact on communities around the State.”


 

Boehringer-Ingelheim to Subsidize Veterinary Scholars Program

01/13/2022

Boehringer-Ingelheim is cooperating with the USDA Agricultural Research Service to expand an existing program to train veterinary students. The Company will cover costs for the students including a monthly stipend during the summer and expenses associated with travel and subsistence to one of nine USDA research centers.

 

USDA funding for the program is part of the Agrosecurity Partnerships for Innovative Research (ASPIRE).  The Veterinary Scholars Program will be funded through the agreement for five years. The objective will be to improve collaboration among national and international colleges of veterinary medicine to provide students with research opportunities.  Of special interest to the poultry industry will be activities at the Southeast Poultry Research Laboratory in Athens, GA; the National Animal Diseases Center in Ames, IA. and the National Bio and Agri-Defense Facility in Manhattan, KS.

Dr. Roxann Motroni, National Program Leader for Animal Health at the USDA stated, “This program allows us to be responsive to emerging One Health disease threats by quickly implementing research needed to inform emergency response. Through this partnership with the Boehringer-Ingelheim Veterinary Scholars Program, students across the country will have the opportunity to train with leading veterinary scientists.”


 

COMMODITY REPORT

01/13/2022

WEEKLY COMMODITY REPORT: January 13th 2022.

  • Corn and soybean prices and volumes again fluctuated over a wide range of up to 2.0 percent of value daily during the past five trading days but settled lower on January 13th. The trend was influenced by rumors and data concerning orders from China coupled with domestic demand and the release of the January 12th WASDE Report, indicating higher ending stocks. The CME quotation for corn was down 2.5 percent and soybeans were down 0.7 percent, Soybean Meal gained 1.0 percent, compared to Thursday January 5th.
  • Factors influencing prices in either direction included:-
    • Anticipation of substantial orders from China. (transitory upward pressure)
    • Trend of decreasing weekly ethanol production and demand (downward pressure on corn)
    • The Central Government of China authorized a buying cycle for soybeans as demand and crush margins improve. (upward pressure on soybeans)
    • Imports of corn by Mexico (transitory upward pressure)
    • Release of the January 12th WASDE #620. Projections for corn and soybean yield, acreage production were little changed, exports were reduced but ending stocks, were increased for the 2022 harvest. (transitory downward pressure).
  • Based on CME quotations U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $5.80 per bushel for corn in March, down 2.5 percent from last week. Crushers will pay $13.60 per bushel for soybeans plus transport and basis during January 2022, down 0.7 percent from the January 5th quotation for January delivery. Soybean meal was $4 per ton (1.0 percent) higher for January delivery compared to last week, reflecting higher domestic demand and export of soy oil coupled with the rise in the price of soybeans during past weeks.
  • The FAS Export Report released on January 13th for the week ending January 5th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 25.79 million metric tons (1,015 million bushels) with 15.66 million metric tons (616 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 0.46 million metric tons (18.1 million bushels) with 1.0 million metric tons (39.8 million bushels) shipped. For market year 2022-2023 outstanding sales amounted to 1.51 million metric tons (59.4 million bushels) with no orders this past week.
    (conversion 39.36 bushels per metric ton)
  • The FAS Export Report released on January 13th 2022 for the week ending January 5th reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 10.81 million metric tons (397.1 million bushels) with 31.63 million metric tons (1,162 million bushels) actually shipped. Weekly soybean orders attained 0.74 million metric tons (27.2 million bushels) with 1.02 million metric tons (37.5 million bushels) shipped.
    (conversion 36.74 bushels per metric ton)
  • For the week ending January 5th 2021, 104,000 metric tons of soybean meal and cake were ordered for the market year 2021-2022, up 230 percent from the previous week. During the past week 207,880 metric tons of meal and cake was shipped, up 19.3 percent from the previous week and representing 7.4 percent of the total 2,822,800 metric tons shipped during the current marketing year to date.
  • Projected harvests and ending stocks were documented in the January 12 th WASDE providing projections on quantities harvested and the effect of trade and domestic consumption on ending stocks that were increased from the November report.

The following quotations for delivery in the months as indicated were posted by the CME at 14H00 on January 13th 2022, compared with values posted at close of trading on January 5th 2021 (in parentheses):-

COMMODITY

 

Corn (cents per bushel)

March 587 (602).

May 589 (603).

Soybeans (cents per bushel)

Jan. 1,364 (1,374).

March 1,375 (1,355).

Soybean meal ($ per ton)

Jan. 425 (421).

March 406 (411).

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

 

Corn: March quotation down 15 cents per bushel (-2.5 percent)

Soybeans: Jan. quotation down 10 cents per bushel (-0.7 percent)

Soybean Meal: Jan. quotation up $4 per ton (+1.0percent)

The USDA weekly wholesale feedstuffs prices per short ton for January 11 th 2022 were:-

  • Corn: $211 ($214), Chicago
  • Soybean Meal: $431 ($435), Central Illinois
  • Meat and Bone Meal: $350 ($345), Central Midwest
  • DDGS: $193 ($187), Eastern corn belt
  • Wheat Middlings: $140 ($130), Minneapolis
    • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen
    • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.44 cent per dozen

 

The respective changes in the prices of corn and soybean meal for January 11th compared with January 5th USDA weekly quotations would decrease nest-run production cost for eggs by 3.9 cents per dozen.

 

Over the past 52 weeks the algebraic escalation in the prices of major ingredients has added 7.7* cents per dozen to eggs. Year-to-date feed cost has declined by 3.0 cents per dozen

*(rounded to 0.1cent)

 

According to the January 12th WASDE, corn harvested in calendar 2022 will be 15,115 million bushels with ending stocks projected at 1,540 million bushels compared to the December 2021 WASDE Report. Total corn stocks on December 1st 2021 amounted to 11.6 billion bushels up 3 percent from December 1st 2020.

 

Compared with the December value, the CME quotation for corn at 14H00 on January 13th for March 2022 delivery was down 15 cents per bushel to 587 per bushel reversing the increase from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 87.8 percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending January 7 th 2021 the industry produced on average 1,006,000 barrels per day, down 4.0 percent from the week ending December 31st 2021, and the thirteenth consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On January 7th ethanol stock was up 7.2 percent from the previous week to 22.9 million barrels, representing an approximately 20-day reserve but confirming a decrease in demand given a higher stock relative to production during the week.

 

Ethanol quoted on the CME was priced at $2.16 per gallon on January 12 th and compared to a 52-week range of $1.59 to $3.21per gallon. Concurrently RBOB gasoline at $2.39 per gallon (CME. Chicago) was up 10 cent per gallon (4.4 percent) from the previous week, consistent with a 7.1 percent higher WTI crude price of $82.48 per barrel on January 13 th. Gasoline is now 23 cents per gallon more expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1 st 2021 functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $193 per ton on January 11th 2022, up $6 per ton from the previous week and $15 per ton less expensive than on January 5 th 2020. It is anticipated that the cost of DDGS will rise reflecting the price of corn. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price.

 

Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production and demand for soy oil. The USDA projected a harvest of 4,435 million bushels in the January WASDE. Ending stocks were raised 2.9 percent to 350 million bushels. Total soybean stock on December 1st 2021 amounted to 3.15 billion bushels down 14 percent from December 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for January delivery at 14H00 on January 13 th 2022 was lower by 10 cents per bushel to 1,364 cents compared to 1,374 cents per bushel on January 5th.

 

According to a release on December 15th by the National Oilseed Processors Association, 179.5 million bushels of soybeans were crushed in November compared to an expectation of 181.6 million bushels. The previous monthly crush value was184.0 million bushels.

 

On January 11th 2022 soybean meal quoted central Illinois was $431 per ton, $8 per ton lower than the previous week and compared to $365 per ton on January 5th 2020.

 

On January 11th 2021 Meat and Bone meal was $350 per ton quoted Central U.S., up $20 per ton from the previous week but compared to $365 per ton on January 5th 2020.

 

On January 13th the conversion of the CNY to the BRL was 0.87 BRL, down BRL 0.02 from the previous week. The conversion of the US$ to the CNY was 6.25, unchanged from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the December 9th 2021 WASDE #619 under the STATS tab. The USDA quarterly Grain Stocks Report and WASDE #620 will be released on January 12th 2022.


 

USDA-WASDE FORECAST #620 JANUARY 12th 2021

01/13/2022

OVERVIEW

The January 2022 WASDE projected the 2022 growing season with minor changes in acreage and yield and hence harvests of corn and soybeans compared to 2021. The USDA ERS adjusted the projected ending stocks of corn, soybeans and soybean meal upwards from the December 2021 report. The area of corn harvested was projected to be 85.4 million acres. Soybeans will be harvested from 86.3 million acres.

 

The January 2022 WASDE initial estimate of corn yield was retained at 177.0 bushels per acre, based on the corn harvest of 2021, (175.8 bushels per acre in 2020). The estimate of soybean yield was raised to 51.4 bushels per acre based on a yield of 51.2 bushels per acre in 2021 (50.7 bushels per acre in 2020).

 

The January 2022 USDA projection for the ending stock of corn was raised to 1,540 million bushels. Predicting supply and exports, USDA raised the projection of ending stock for soybeans to 350 million bushels.

 

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with fluctuation in exports. China only places orders in accordance with their needs and central Government policy rather than compliance with the Phase-One trade agreement of February 2020. The January 2022 WASDE projection retained the price of corn at $5.45 per bushel. The projection of price for soybeans was raised to 1,260 cents per bushel. Soybean Meal was raised $40 per ton to $370.

 

It is accepted that projections are based on the reality that China sharply increased purchases of commodities during the recently concluded market year partly to cover low stock caused by drought, and COVID-related disruptions in imports during the first quarter of 2020. China booked substantial orders for corn and soybeans from September 2020 onwards for the 2020-2021market year but is moderating orders now for the current market year. Reports on volumes of commodities exported to China and other nations are included in weekly editions of EGG-NEWS as USDA data is released.

 

CORN

The projected corn harvest for 2022 is 15,115 million bushels. The projected 2022 harvest of 15,115 million bushels can be compared to 14,507 million bushels in 2020. If farmers maintain application rates of far more expensive fertilizer to maximize yields the projected 2022 harvest will be 0.2 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was unchanged from the December report at 5,650 million bushels. The “Ethanol and Byproducts” category was raised 1.4 percent to 5,325 million bushels consistent with current domestic demand for E-10 and other blends following relaxation of COVID-19 restrictions. Projected corn exports were lowered 3.0 percent to 2,425 million bushels despite recent shipments to China and Mexico. Ending stocks were increased 3.1 percent to a projection of 1,540 million bushels.


 


Egg Week

01/12/2022

USDA Weekly Egg Price and Inventory Report, January 12th 2022.

Market Overview

  • Unit revenue for Midwest Extra-large and Large sizes after the Christmas surge was predictably down by an average of 13.6 percent this past week following a 7.5 percent drop in price over the previous week. Mediums were down 3.1 percent. The decrease in all sizes this past week coupled with rise in industry inventory above 2.0 million cases suggests a full pipeline and weakening demand moving through January 2022. December 2021 and early January 2022 prices contrasted favorably with the corresponding weeks in 2020 and 2021 respectively that were characterized by low ex-plant unit revenue. The price of shell-eggs will not be unduly affected by a net decrease of 1.2 million hens in the producing flock this past week but with a 13.1 million net increase in flock size over 22 weeks. Wholesale Midwest prices retreated positive margins still prevail, taking into account the combined costs of nest-run, grading, packaging and delivery.

 

  • Shell inventory was 1.8 percent higher after an 8.5 percent increase over the previous week, indicating that the pipeline from packing plants to the retail shelf has been filled although supply is more in balance with demand. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the published USDA inventory for plants, especially over the short term. Chains spread their purchases in December and attempted to preempt anticipated pre-Christmas price rises. Industry observers and participants expected buyers to adjust purchases only in response to retail demand 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. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during October and early November depressed the volume of sales of generics to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

  • Currently inventory has increased in response to the action of chain buyers and comprises close to five days of production. Price movement during 2021 and specifically since Labor Day and extending through Christmas defied conventional supply to demand relationships and indicates extraneous factors affecting price of eggs that are not constrained by an indexed feed-price arrangement. The decrease in price this past week suggests that unit revenue continues a seasonal decline through January 2022 after a one-week plateau that followed high pre-Christmas prices. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional collusion. 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 and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

 

  • The U.S. flock in production was down 0.2 percent (0.6 million hens) from the week of January 5th to 324.1 million consistent with planned seasonal molting, placement and depletion, but with about 2.5 million molted hens having resumed production during the late weeks of December. The Industry demonstrated beneficial restraint in flock placement during the third and fourth quarters with continued depletions and non-restocking of some complexes or houses and disposal of flocks in the week before Christmas. Margins should continue to decline for commodity eggs due to decreased demand as predicated by the pattern of seasonal wholesale prices over the past three weeks. Production margins will be negatively impacted by increased prices for feed and pullet chicks. Higher labor and fuel costs will detract from profit especially if unit revenue fails to match expectations during the first quarter of 2022.

 

  • There is some prospect of a return in the food service sector with frozen egg prices marginally higher over the past month. The economy is reopening despite ongoing concern over COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three available approved vaccines and boosters in diverse regions and among numerous demographics.

 

  • The Midwest price for breaking stock was down 1.4 percent to an average of 72.5 cents per dozen. Checks in the Midwest were down 1.1 percent to an average of 63.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

 

The Week in Review

Prices

According to the USDA Egg Market News Reports released on January 10th, the Midwest wholesale price for Extra-large was 13.5 percent lower to an average of 128.5 cents per dozen; Large were 13.7 percent lower to an average of 126.5 cents per dozen; Mediums were lower by 3.1 percent to 95.5 cents per dozen as delivered to DCs. Prices should be compared with the USDA benchmark average 6-Region blended nest-run cost (excluding provisions for packing, packaging materials and transport) of 71.8 cents per dozen in December 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The January 10th 2021 edition of the USDA Egg Market News Report (Vol. 69: No. 02) documented a USDA Combined Region value rounded to the nearest cent, of $1.57 per dozen delivered to warehouses for the week ending January 3rd 2022. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.47 per dozen. At the high end of the range, price in the South Central Region attained $1.65 per dozen. The USDA Combined Price last week was 60 cents above the 3-year average. This past week Midwest Large was approximately 73 cents above the corresponding week in 2021. Prices followed a plateau after Christmas and then fell with an anticipated downward trajectory in the near term given the full pipeline moving through January 2022.

 

Flock Size

According to the USDA the number of producing hens reflecting January 12 th (rounded to 0.1 million) was 0.6 million lower to 324.1 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 4.5 million new pullets reaching maturity during the week, offset by flock depletion. Based on inventory level the hen population producing eggs is in excess in relation to current consumer demand. Exports in November were lower than October with negligible shell exports to South Korea following restoration of flocks previously depleted due to HPAI. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Any number of producing hens above a subjectively determined range of 322 to 324 million in production during the first half of January, portends lower prices depending on relative levels of producer and store inventories. For the next week prices will decline, given the increases in inventory over the past two weeks. Oversupply as denoted by inventory is attributed to the contribution of hens returning to production from molt in early December 2021 coupled with pullets placed 24 weeks earlier that are now in production.


 


Albertsons Posts Q3 Financial Results

01/11/2022

In a January 11th release, Albertsons Companies (ACI) posted financial results for the third quarter of fiscal 2022 ending December 4th 2021. This Company can be regarded as a bellwether for the retail food industry subject to increased costs of ingredients, labor, packaging and transport in a competitive consumer environment still restrained by COVID.

 

Albertsons operates 21 banners including Albertsons, Safeway, Von’s, Acme, Jewel-Osco and Shaw’s.

 

For the period, net revenue was $424.5 million on total revenue of $16,728 million.  Comparable figures for the third quarter of fiscal 2021 ending December 5th 2020 were net income of $123.7 million on total revenue of $15,409 million.  EPS rose from $0.20 for the third quarter of fiscal 2021 to $0.77 for the most recent quarter. Gross margin declined from 29.2 percent to 28.8 percent denoting escalation in cost of goods sold due to inflation.

 

In commenting on Q3 results Vivek Sankaran stated, CEO "We are pleased with our third quarter results as we continue to execute against our transformation strategy. A favorable economic backdrop together with the heroic performance of our frontline retail, distribution, and manufacturing teams contributed to these better-than-expected results," He added "Also driving these results was our continued focus on in-store excellence, acceleration of our digital and omnichannel capabilities, and delivery of our productivity initiatives. During the quarter, we continued to gain market share in both units and dollars and saw ongoing improvement in both the in-store and online customer experience."

 

Albertsons Companies posted assets of $27,936 million, against long-term debt and lease obligations of $15,880 million. The Company had an intraday market capitalization of $14,340 million on January 14th. ACI trades with a forward P/E of 12.0 and has ranged over a 52-week period from $15.97 to $37.85 with a 50-day moving average of $37.44.  Twelve-month trailing operating margin was 3.2 percent and profit margin 1.5 percent.  Return on assets over the past twelve months was 5.1 percent and the return on equity 29.6 percent. At close of trading January 11th pre-release, ACI was priced at $28.79. At market close, post-release on January 12th ACI traded at at $29.63 up 2.9 percent.


 

Port of Oakland Resolving Bottlenecks

01/11/2022

The Port of Oakland has announced that it will establish and operate a large off-terminal container yard to ease congestion and expedite both delivery of inbound containers and loading of export cargos.  Traditionally the Port of Oakland has maintained an even balance between imports and exports.  This was disrupted by the surge in imports from Asia necessitating modification to handling of inbound and outbound containers and requiring additional space and equipment.

 

State transportation officials and the Department of Food and Agriculture have pressured management of ports and shipping companies to expedite export capability from Oakland to Southeast Asia and the Indian subcontinent with special reference to agricultural products.


 

USDA to Amend PSA Rules

01/11/2022

In a reversion to 2017 policy the USDA will reintroduce proposed Packers and Stockyard Act (PSA) rules mooted during the Obama Administration. Among the proposed changes will be mandated changes in broiler grower contracts.  The USDA will introduce regulations to eliminate the tournament system that has been a subject of contention among some integrators and their contractors. 

 

The USDA will codify policy relating to action under the Packers and Stockyards Act.  The major change will be that aggrieved contractors will not need to demonstrate competitive harm to initiate legal action.  It is anticipated that the proposed changes will result in extensive litigation and will undermine the current harmonious relationship between contractors and integrators.  The proposed action by the USDA is a classic example of trying to fix a non-existent problem.

 

USDA and the Department of Justice will cooperate to investigate and counteract monopolistic action in the meat supply chain.  To this end, the current Administration will employ the Packers and Stockyards Act to eliminate what is alleged are deceptive or anti-competitive practices.


 

USDA Continues Chicken Purchases

01/11/2022

On January 7th USDA-AMS announced purchase of 58 tons of frozen chicken fillets and 429 tons of frozen chicken strips for domestic food assistance programs.  Fillets were priced between $3.21 and $4.39 per lb. and strips from $3.21 to $4.42 per lb. amounting to a total of $4.2 million for deliveries to be made after February 28th.


 

Honduras Emerges as Potential Export Market for Eggs

01/11/2022

Following extensive negotiations involving USDA and counterparts in the Republic of Honduras, this nation will consider imports of eggs and egg products in 2022.  According to the January 10th edition of the USAPEEC MondayLine modern supermarkets in Honduras will be able to receive U.S. shell eggs and related products and maintain a cold chain to allow for year-round shipments.


 

USDA to Add $750 Million to School Meal Programs

01/11/2022

USDA Secretary Tom Vilsack has announced that a supplement of $750 million would be added to funding for school meal programs in 2022.  This is in addition to the $1.5 billion provided to states and school districts to respond to COVID-related disruptions in supply chains.

 

The decision to supplement funding was made on the basis of recent escalation in food, labor and operational costs.

 

It is estimated that schools are receiving approximately 22 percent more for serving lunches than during pre-COVID years.


 

John R. Nelson Appointed as COO of Certified Group

01/11/2022

In a January 10th release, Certified Group and Food Safety Net Services announced the appointment of John R. Nelson, as COO for Certified Group Management for food safety, nutriceuticals, cosmetics and related analytical services.

 

Nelson earned a B.S. in biology and an MBA from Texas Tech University and completed the Advanced Management Program at INSEAD.  He has twenty years experience in quality control and was most recently Executive Vice-president for Transportation and Industrials at Element Materials Technology.

 

Certified Group is leading North America provider of testing and regulatory consulting services.  The Certified Group comprises Certified Laboratories, EAS Consulting, FSNS, and MicroQuality Laboratories.  Additional information is available on <www.fsns.com>.


 

France Facing Repeat of Extensive HPAI Outbreak

01/10/2022

According to media reports from France and confirmed by ProMed the Nation is faced with a deteriorating HPAI situation.  During the winter of 2020-2021 H5N8 was the predominant pathogen.  In the current outbreak, as in other E.U. and Asian nations, H5N1 is responsible for extensive mortality.  To date, the present outbreak has impacted 26 commercial farms mainly in the southwest, where the foie gras production is concentrated.  Outbreaks have impacted the production of ducks, geese and chickens with up to 650,000 birds having been depleted with most since mid-December 2021. During the winter of 2020-2021 up to 3.5 million birds mainly commercial waterfowl were depleted on 500 small family-operated farms requiring extensive compensation and costs to the public sector associated with attempted control. 

 

Although farmers were warned to confine poultry to building in early November 2021, the foie gras production system is based on free-range management for a considerable portion of the production cycle.  These flocks are susceptible to infection from migratory waterfowl.

 

Isolation of H5N1 from wild birds invariably precedes cases in backyard flocks devoid of biosecurity followed by cases in small and then larger commercial flocks many under free-range management. 

 

Coastal areas and regions adjoining large rivers with adjacent wetlands attract migratory birds resulting in outbreaks in poultry in almost all nations in the EU extending from the Eastern Russian Federation to the Faroe Islands in the North Atlantic.  The Friedrich Loeffler Institute, in Germany, recorded 675 infections in wild birds and 534 infections in commercial and backyard flocks between the beginning of October 2021 and the end of December 2021.  The number of cases in other E.U. nations is a function of surveillance and laboratory confirmation mainly using PCR.


 

Salads Implicated in STEC Outbreaks

01/10/2022

In a December 30th Food Safety Alert the Centers for Disease Control and Prevention confirmed ongoing outbreaks of E. coli O157.  The vehicles of infection have been identified as Simple Truth Organic Power Greens and Nature’s Basket Organic Power Greens with a use-by date of December 20th 2021. 

 

To date 13 cases have been identified through PulseNet with four hospitalizations in six states.  Patients ranged in age from 4 to 79 years and were disproportionately female.  Of twelve patients interviewed, all reported eating packaged salads implicating the two brands. 

 

Investigations are in progress and it is possible that additional cases will be identified.


 

South Korea Reports HPAI Outbreak

01/10/2022

ProMed Mail documented a case of highly pathogenic avian influenza in a flock of 10,000 ducks in North Jeolla Province.  This was the 18th confirmed case involving poultry farms during the winter of 2021.  Authorities have imposed a quarantine in the infected zone and have implemented surveillance.

 

South Korea has largely restocked farms depleted during the severe HPAI epornitic of 2020. During the past three months, there has been a sharp decline in demand for egg products and cessation of imports of shell eggs by South Korea. If H5N1 HPAI infection introduced by migratory birds is not controlled, exports of shell eggs and egg products to South Korea from the U.S. will resume in greater quantity. 

 

Given the frequency and the extent of HPAI outbreaks due to AI virus being introduced by migratory birds on a seasonal basis, South Korea and other Asian and some European nations should consider adopting vaccination as a preventive policy and live with the disease. Annual reintroduction is not conducive to an expensive “stamping out” approach.

 


 

Maple Leaf Foods Appoints President of Plant-Based Subsidiary

01/10/2022

Adam Grogan has been appointed to the role of President of Greenleaf Foods SPC, effective January 31st 2022.  He will replace Dan Curtin, currently President who will retire after four decades in the food industry.

 

Over the past two years, Grogan and Curtin have worked together in anticipation of the transition.

 

Grogan is a 20-year veteran of Maple Leaf Foods holding positions of increasing responsibility including Senior Vice President of Marketing Innovation, Research and Development before assuming the role of COO at Greenleaf Foods in August 2019.

 

For the third quarter of FY 2021 ending September 30th the Plant Protein segment of Maple Leaf Foods of Canada, parent of Greenleaf Foods, posted a loss of US$30.1 million on revenue of US$ 38.4 million.


 

Egglife Foods Initiates Promotional Campaign

01/10/2022

Egglife Foods Inc. has commissioned Hill Holliday to create a campaign to promote the launch of Sweet Cinnamon Egglife egg-white wraps.  Egglife Foods manufactures wraps and tortillas devoid of flour as an ingredient.

 

The campaign to be presented on TV, online video and social media will depict how Egglife has produced an innovative product using eggs, providing both enhanced taste and superior nutrition compared to conventional wraps.

 

Andrea Schwenk, VP of Marketing and Innovation at Egglife Foods stated, "we are thrilled to launch this new creative campaign and more effectively communicate what the Egglife brand is all about".


 

Takeaways from the USDA-APHIS Avian Influenza Webinar

01/09/2022

On January 7th the USDA-APHIS presented a webinar on avian influenza with specific reference to the late December 2021 limited outbreak of HPAI on the Avalon Peninsula of the Province of Newfoundland and Labrador.  Concern was raised following molecular assay of the H5N1 virus, that disclosed that the pathogen comprised a genome of Eurasian origin. This virus, responsible for extensive outbreaks in Europe, Africa and Asia has now been introduced into North America. Trans-Atlantic spread was attributed to migration of wild waterfowl possibly through sequential contact among diverse species extending from Northern Europe through Iceland and Greenland to Northeast Canada. The presence of this H5N1 strain in the Atlantic flyway has implications for the Maritime Provinces of Canada, the New England states and ultimately the entire Atlantic Seaboard of the U.S.

Dr. Jack Shere Associate Administrator of the USDA-APHIS noted in his introduction to the Webinar that the infection is "creeping closer to home and on our doorstep".  On a reassuring note he confirmed that the U.S. is in a far better position with regard to preparation for an outbreak of highly pathogenic avian influenza (HPAI) than in 2015.  It is noted that this epornitic cost more than $3 billion to control. Economists suggest that an equivalent amount was borne by consumers paying higher prices for eggs and poultry meat during the outbreak.

 

Following the epornitic of HPAI in 2015, Canada and the U.S. established bilateral agreements involving common language on export-import certificates and will establish procedures in the event of outbreaks of catastrophic diseases. According to a 2018 protocol regionalization and zonation are permitted to allow trade with appropriate precautions to prevent transmission of HPAI and other diseases.

 

Surveillance of wild birds for the presence of avian influenza is considered an essential component of a preventive program.  From July 2021 through March 2022, USDA-APHIS in collaboration with the Department of Interior and state agencies planned to examine 9,000 samples from free-living birds among sixteen eastern seaboard states.  From July to September 2021, 2,280 samples were examined in nine states ranging from Maine southwards to North Carolina. Of these specimens, 44 percent yielded low-pathogenicity H5 strains of avian influenza but with no evidence of H7 strains.  The fall survey will encompass sixteen states following the southward migration of waterfowl.  Of 2,140 samples examined to date, 10 percent yielded H5 avian influenza strains all characterized as low-pathogenic and 0.7 percent of the samples were H7 strains.  During the upcoming period January through March 2022, two thousand samples will be examined from migratory birds in fourteen states.

 

Early detection of avian influenza is critical to planning and implementing an effective eradication campaign.  APHIS will continue the live-bird market surveillance program.  The National Poultry Improvement Program will require designated samples from breeding flocks. Surveillance will be maintained by state laboratories based on postmortem examination of birds submitted for diagnosis. Many states require routine sampling of flocks before either slaughter or interstate movement State poultry associations are promoting the imperative to report unusual mortality or deviation from acceptable performance standards to appropriate veterinary authorities followed by diagnostic intervention to exclude avian influenza.

 

While it is our collective and earnest hope that the commercial industry and the U.S. will be spared exposure to avian influenza, the probability of transmission from migratory birds is increasing, confirming the need to implement effective structural and operational biosecurity on all poultry facilities.


 

German Startup to Produce Egg Substitute

01/08/2022

Perfeggt™ has raised close to $3 million with backing from a number of venture capital funds to develop and market an egg substitute suitable for scrambled or omelette presentation.  The product is based on fava bean protein and according to Berndt Becker, food technologist and Chief Product Officer of the Company, “The plant-based proteins and lipids in the product replicate complex multifunctional and versatile characteristics of an egg and will be indistinguishable in taste.”

 

Based on reports of emerging products claiming to displace real eggs, it is concluded that the technology to reproduce the organoleptic qualities of whole egg liquid are not exceedingly difficult.  Optimal shelf-life, stability, nutritional value and functional properties are however almost impossible to reproduce in a single package at a competitive shelf price. 

 

Both U.S. and E.U. egg substitutes are many times more expensive than the product they claim to displace. Following a reduction from $7.99 to $4.99 per 12 oz. container, corresponding to  the contents of six eggs, the leading U.S. brand represents an equivalent cost of  $10 per dozen compared to conventional eggs.  There are  limits to the number and loyalty of consumers willing to pay for claimed welfare and sustainability as evidenced by the extremely small market share of egg substitutes in the U.S. The leading plant-based egg substitute had sales of $25 million in 2021 compared to shell egg sales valued at over $10 billion assuming 225 million hens producing for the shell market and average unit retail across all categories of $1.85 per dozen.

 

Developers of egg substitutes frequently point to the existing market for shell eggs and egg products and project unrealistic claims relating to projected substitution.  The potential market to replace shell eggs in industrialized nations is catnip to venture capital investors. Given realities of the marketplace they will not see a return on the finance provided to start-ups offering high-priced ersatz egg liquids.


 

NPIP Meeting at IPPE

01/08/2022

According to an announcement by Dr. Elena Behnke, Senior Coordinator of the National Poultry Improvement Plan (NPIP), an Informal Stakeholder Meeting will take place at the International Poultry Expo in Atlanta in room B313, GWCC 09h00 to 11h00 on Wednesday, January 26th.

 


 

EPA Considering Restrictions on Anticoagulant Rodenticides

01/08/2022

The EPA Office of Pesticides is reviewing the use of some anticoagulant rodenticides based on the fact that wildlife predators and scavengers feeding on rodents poisoned with these compounds are in turn susceptible to toxicity.

 

All pesticides are subject to a five-year review in relation to advances in science and toxicology and patterns of use. There is concern that the EPA will place restrictions on anticoagulant rodenticides including active ingredients, use only by a certified applicator and more extensive, time-consuming and unproductive record keeping.

 

Rodenticides are necessary to suppress mouse and rat populations in the egg-production segment of the U.S. poultry industry. Access to anticoagulant formulations should be allowed with reasonable restrictions to maintain food safety and to limit damage to buildings and installations.

 

The most important consideration with regard to the motivation for proposed EPA action is that rodents poisoned by application of anticoagulant baits within poultry buildings remain within the house after death. Dead rats and mice remaining in attics, live-bird areas and pits of houses cannot be consumed by predators or scavengers and residual toxin is degraded.  This reality should be taken into account in submissions and comments to the EPA.


 

Campbell Soup Appoints Chief Supply Chain Officer

01/07/2022

The Campbell Soup Company has appointed Daniel L. Poland as Executive Vice-president and Chief Supply Officer, effective January 10, 2022. Poland has extensive experience in the consumer package goods industry. He was previously an Executive Vice President and Chief Supply Chain Officer at Pinnacle Foods.  It was here that he met Mark Clouse the current CEO of Campbell Soup.  He has also worked for Nestle and Gerber and was employed by HJ Heinz for fifteen years, moving from plant manager to Chief Supply Chain Officer.

 

Poland earned a BS in agricultural engineering from Michigan State University and an MBA from the University of Iowa.

This appointment clearly demonstrates the pivotal role of supply chain management in any food-related company.  Disruption associated with COVID, tensions in international trade attributed to political considerations, delays in shipping, escalation in cost and restricted availability of domestic road transport have all created problems for manufacturers of food products.


 

Case of Avian Influenza in U.K. Hobbyist

01/07/2022

A person owning a backyard flock of ducks infected with H5N1 avian influenza has been diagnosed with avian influenza. The 79 year old male patient, aptly named Brian Gosling was hospitalized with respiratory symptoms. Investigations yielded an H5 serotype that is currently undergoing characterization but presumably will be confirmed as H5N1. According to relatives he had more than 20 ducks inside his home, more in his yard and fed free-ranging waterfowl in his village. The infected birds, many showing signs of AI  infection were collected and disposed of.

 

Professor Mike Tildesley of the University of Warwick stated, "human infections with H5N1 are really rare with fewer than one thousand worldwide since 2003 and they almost always occur as a result of direct, long-term contact with poultry".  He added, "there has never been any evidence of sustained human-to-human transmission of H5N1 so at present I would not consider this to be a significant public health risk".  This opinion was supported by Professor Paul Wigley of the University of Liverpool who stated, "while avian influenza has the potential to be transmitted from poultry to humans, it is very rare and as in this case is usually due to close contact with infected birds". 

 

In 2003 a 57-year old Veterinarian in the Netherlands died of pneumonia shortly after working with a flock of chickens infected with H5 strain avian influenza. The same virus was isolated from lung aspirate obtained from the decedent.

 

The moderator for the ProMed Mail posting noted that twenty cases of influenza H5N1 were reported in 2006 from Azerbaijan and twelve cases from Turkey.  Since this time no human cases of H5N1 have been confirmed in the European Region as recognized by the World Health Organization, despite intensive surveillance in the presence of extensive outbreaks.

 

The case involving Mr. Gosling should be viewed in the context of the Early Warning and Response System and International Health Regulations that determine that human infections with H5N1 are notifiable in accordance with E.U. regulations.


 

COVID Vaccination Reduces Viral Shedding

01/07/2022

A recent study demonstrated that following breakthrough infections in individuals receiving two mRNA COVID vaccines, qualitative recovery of virus from the nasopharynx was reduced to 21 percent compared to 40 percent for non-vaccinated or partly vaccinated individuals.  There was no significant difference in the quantum of viral recovery between the 72 vaccinated and 53 unvaccinated subjects.

 

The study also determined that protection waned approximately five months after completing a two-dose regimen of mRNA vaccine confirming the need for a booster dose that has shown to be effective in Israel and the U.K.  A third dose effectively represents a "fully vaccinated" status. This will clearly reduce the probability of breakthrough infections and dissemination of virus among those who received their second mRNA vaccine more than six months previously. Currently about 70 percent of the U.S. population has received two mRNA priming doses but only 32 percent have received an additional booster contributing to enhanced and durable immunity

 

*Pena-Hernandez, M.A. et al comparison of infectious SARS-CoV-2 from the nasopharynx are vaccinated and unvaccinated individuals. MedRxiv (2021) doi.org/10.1101/2021.12.28.21268460


 

FDA Placing All Antibiotics Under Veterinary Oversight

01/07/2022

In accordance with the final version of Industry Guidance Document #263 all antimicrobial drugs of medical importance, as defined, will only be available for administration under veterinary supervision, effective June 2023.  Antibiotics currently available as OTC formulations will move to prescription including injectable penicillins and oxytetracycline.

 

The guidance will apply to all animals and not only those intended for food production.  This means that companion species and backyard poultry will be subject to the same oversight.

 

The FDA is implementing Industry Guidance Document #263 as an extension of previous measures to prevent development of antimicrobial resistance.  The Food and Drug Administration recognizes "the expertise of veterinarians being critical to ensuring the responsible use of antibiotics in animals".


 

California Legislation to Reduce Food Waste

01/07/2022

Following passage of SP1383, local jurisdictions in California such as municipalities must develop programs to recycle organic waste from businesses and residences and maintain records of activity.  The intent is to recycle and reuse waste that may be combusted or subjected to anaerobic digestion to create either biofuel or electrical power.

 

The legislation to reduce food waste is consistent with a 2021 U.S. Department of Energy Grant and the United Nations Sustainable Development goals supported by the Environmental Protection Agency.


 

Conagra Brands Posts Q2 Financial Results

01/06/2022

In a January 6th release, Conagra Brands Inc. (CAG) posted financial results for the second quarter of fiscal 2022 ending November 28th 2020. This Company can be regarded as a bellwether for the food manufacturing industry subject to increased costs of ingredients, labor, packaging and transport in a consumer environment still restrained by COVID.

 

For the period, net revenue was $275.5 million on total revenue of $3,059 million.  Comparable figures for the second quarter of fiscal 2021 ending November 29th 2020 were net income of $378.9 million on total revenue of $2,995 million.  EPS declined from $0.77 for the second quarter of fiscal 2021 to $0.57 for the most recent quarter. A 9.4 percent increase in cost of goods sold detracted from profit.

All four business segments posted declines in operating profit compared to Q2 of FY 2021:-

  • Grocery and Snacks: Down 21.2 percent to $249 million.
  • Refrigerated and Frozen: Down 36.3 percent to $168 million.
  • International: Down 5.8 percent to $37 million.
  • Food Service: Down 39.1percent to $14 million.

 

Sean Connolly, president and CEO of Conagra Brands, commented, "Our business delivered another quarter of strong net sales growth as we continued to experience elevated levels of demand across our portfolio. Our focus on strategic innovation and our intentional approach to investment helped us maintain brand momentum in the second quarter and continue capturing share across each of our domains – frozen, snacks, and staples." He continued, "Looking ahead, we expect to continue experiencing cost pressures above original expectations in the second half of fiscal 2022. However, we believe the sustained elevated consumer demand coupled with the mitigating actions we have successfully executed, and will continue executing, put us on track to overcome these near-term challenges, improve margins in the back half of the fiscal year, and deliver on our profit plan."

 

Conagra Brands posted assets of $7,168 million, less intangibles and goodwill amounting to $15,424 million, against long-term debt and lease obligations of $10,558 million. The Company has an intraday market capitalization of $15,339 million. CAG trades with a forward P/E of 13.0 and has ranged over a 52-week period from $30.44 to $39.09 with a 50-day moving average of $32.55.  Twelve-month trailing operating margin was 17.0 percent and profit margin 10.8 percent.  Return on assets over the past twelve months was 5.3 percent and the return on equity 14.3 percent. At close of trading January 5th pre-release, CAG was priced at $34.15. At market close, post-release on January 6th CAG traded at at $33.53 down 1.8 percent.


 

Special Commentary-The 2022 IPPE

01/06/2022

2022 IPPE To Proceed as Planned-With Safety Measures

Any large gathering at a time of an increasing incidence rate for a highly infectious viral disease, transmitted principally by the aerosol route, represents the potential to become a super-spreader event. This said, the organizers have elected to proceed with the IPPE as the benefits of holding the event apparently outweigh the risks and consequences.

 

According to the release by USPOULTRY on January 6th it was recommended but not mandated, that attendees be “fully” vaccinated against COVID without specifying the number of doses or requiring proof of immunization. It was recommended that attendees wear a mask and maintain “social distancing where appropriate”. The request that any person showing upper respiratory symptoms should refrain from attending is valid but probably ineffective. Infection with the Omicron variant of SARS-CoV-2 may be asymptomatic and exposed individuals disseminate virus for at least 24 hours before demonstrating upper respiratory discomfort. Extra cleaning and disinfection and hand sanitizer stations will be more to reassure attendees than represent a meaningful method of suppressing an airborne infection.  Placing disinfectant foot-baths at entrances to the GWCC show floor is a relic from the concerns over avian influenza in past years and is irrelevant to COVID.

 

In all probability if attendees are masked and have received three doses of an mRNA vaccine with the last dose received before mid-January and if commonsense precautions are followed the risk of contracting COVID in the exhibition halls or in small group meetings will be low. The possibility of contracting infection in restrooms remains unless the GWCC installs UV equipment to suppress air-borne virus. Obviously hospitality events in hotel rooms, dining in crowded restaurants or visiting bars should be avoided, detracting from the pleasure and raison d’etre for participating in the IPPE. Attendees are advised to consider personal screening using an approved antigen detection test (if available) after returning from Atlanta. Those with predisposing conditions and seniors are advised to consult with their health providers before attending the IPPE or any large trade or entertainment event. 

It is hoped that conscientious adherence to the recommendations provided by USPOULTRY will be effective and that the 2022 IPPE will be well attended and beneficial to registrants and exhibitors as planned and anticipated, without resulting in dissemination of COVID.


 

Stop Press

01/06/2022

2022 IPPE to Proceed With Recommended Precautionary Measures.

 

In a January 6th release USPOULTRY confirmed that the 2022 IPPE would take place as planned from January 25th through 27th. A list of safety measures were provided in the release. In accordance with the policies of the State of Georgia masking and proof of vaccination cannot be mandated, only recommended. Subscribers are directed to the commentary below concerning risks of contracting COVID and the relevance of suggested protective measures.

 

 


 

COMMODITY REPORT

01/06/2022

WEEKLY COMMODITY REPORT: January 6th 2022.

 

  •  Commodity prices and volumes again fluctuated over a wide range of up to 2.5 percent of value daily during the first five trading days in 2022 but settled higher on January 6th. The trend was influenced more by rumors on Tuesday 4th concerning projected large orders from China and domestic demand rather than the release of the December 9th WASDE Report, now in the rearview mirror. The CME quotation for corn was up 1.0 percent and soybeans were up 3.5 percent, Soybean Meal gained 1.9 percent, compared to Thursday December 30th.

 

  • Factors influencing prices in either direction included:-
    • Anticipation of substantial orders from China. (transitory upward pressure)
    •  Trend of increasing weekly ethanol production (upward pressure on corn)
    • The Central Government of China authorized a buying cycle for soybeans as demand and crush margins improve. (upward pressure on soybeans)
    • Imports of corn by Mexico (transitory upward pressure)
    • Release of the December 9th WASDE with the 2021 corn and soybean harvests completed at the time of publication. The December WASDE projections for corn and soybean yield, acreage production and ending stocks, were unchanged from November. (transitory and minor downward pressure).

 

  • Based on CME quotations U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $6.00 per bushel for corn in March, up 1.0 percent from last week. Crushers will pay $13.70 per bushel for soybeans plus transport and basis during January 2022, up 3.5 percent from the December 30th quotation for January delivery. Soybean meal was $8 per ton (1.9 percent) higher for January delivery compared to last week, reflecting higher domestic demand and export of soy oil coupled with the rise in the price of soybeans during past weeks.

 

  • The FAS Export Report released on January 6th for the week ending December 30th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 26.34 million metric tons (1,037 million bushels) with 14.65 million metric tons (577 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 0.3 million metric tons (10.1 million bushels) with 1.0 million metric tons (39.4 million bushels) shipped.  For market year 2022-2023 outstanding sales amounted to 1.51 million metric tons (59.4 million bushels) with no orders this past week.                                                                                  (conversion 39.36 bushels per metric ton)

 

  • The FAS Export Report released on January 6th 2022 for the week ending December 30th 2021 reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 11.1 million metric tons (407.4 million bushels) with 30.6 million metric tons (1,125 million bushels) actually shipped. Weekly soybean orders attained 0.38 million metric tons (14.1 million bushels) with 1.7 million metric tons (62.5 million bushels) shipped.

(conversion 36.74 bushels per metric ton)

 

  • For the week ending December 30th 2021, 31,500 metric tons of soybean meal and cake were ordered for the market year 2021-2022, down 55 percent from the previous week. With restoration of operations covering most of the lower Mississippi terminals after damage from Hurricane Ida, 174,300 metric tons of meal and cake was shipped, up 2.2 percent from the previous week and representing 5.7 percent of the total 3.060,400 metric tons shipped during the current marketing year to date.

 

  • Projected harvests and ending stocks were documented in the December WASDE allowing clarity on quantities harvested and the effect of trade and domestic consumption on ending stocks that were unchanged from the November report.

 

The following quotations for delivery in the months as indicated were posted by the CME at noon on January 6th 2022, compared with values posted at close of trading on December 30th 2021  (in parentheses):-

 

COMMODITY

 

Corn (cents per bushel)

March 602      (596).

May        603      (597).      

Soybeans (cents per bushel)

Jan.   1,374   (1,327).

March 1,385  (1,338).

Soybean meal ($ per ton)

Jan.      421       (413). 

March    411      (404).

 

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

 

COMMODITY CHANGE FROM PAST WEEK FOR MONTH OF DELIVERY  AS INDICATED

Corn: March quotation up 6 cents per bushel (+1.0 percent)
Soybeans: Jan. quotation up 47 cents per bushel (+3.5 percent)
Soybean Meal: Jan. quotation up $8 per ton (+1.9 percent)

 

The USDA weekly wholesale feedstuffs prices per short ton for January 5th 2022 were:-

 

  • Corn: $214 ($212), Chicago
  • Soybean Meal: $439 ($424), Central Illinois
  • Meat and Bone Meal: $345 ($330), Central Midwest
  • DDGS: $187 ($187), Eastern corn belt
  • Wheat Middlings: $130 ($145), Minneapolis

 

 

  • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen
  • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.44 cent per dozen

 

The respective changes in the prices of corn and soybean meal for January 4th compared with December 28th USDA weekly quotations would increase nest-run production cost for eggs by 0.9 cents per dozen.

 

Over the past 52 weeks the algebraic escalation in the prices of major ingredients has added 11.6* cents per dozen to eggs

*(rounded to 0.1cent)

 

According to the December 9th WASDE, corn harvested in calendar 2021 will be unchanged from the November report at 15,062 million bushels with ending stocks projected at 1,493 million bushels unchanged from the November 2021 WASDE Report. The corn harvest was completed by the last week in November. Total corn stocks on September 1st amounted to 1.24 billion bushels down 36 percent from September 1st 2020.

 

Compared with the December value, the CME quotation for corn at noon on January 6th for March 2022 delivery was up 6 cents per bushel to 602 per bushel reversing the decrease from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 91.5 percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending December 31st 2021 the industry produced on average 1,048,000 barrels per day, down 1.0 percent from the week ending December 24th 2021, and the 12th consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On December 31st ethanol stock was up 3.4 percent from the previous week to 21.4 million barrels, representing an approximately 20-day reserve but confirming a decrease in demand given a higher stock relative to production during the week.

 

Ethanol quoted on the CME was priced at $2.30 per gallon on January 5th and compared to a 52-week range of $1.59 to $3.21per gallon. Concurrently RBOB gasoline at $2.29 per gallon (CME. Chicago) was up 2 cent per gallon (0.9 percent) from the previous week, consistent with a 2.0 percent higher WTI crude price of $76.99 per barrel on January 5th. Gasoline is now 1cent per gallon less expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1st 2021 functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $187 per ton on January 4th 2022, unchanged from the previous week and $17 per ton less expensive than on December 29th 2020. It is anticipated that the cost of DDGS will rise reflecting the price of corn. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price

 

 Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production and demand for soy oil. The USDA confirmed a harvest of 4,425 million bushels in the December WASDE. Ending stocks were unchanged from November at 340 million bushels. Total soybean stock on September 1st amounted to 256 million bushels down 51 percent from September 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for January delivery at noon on January 6th 2022 was higher by 47 cents per bushel to 1,374 cents compared to 1,327 cents per bushel on December 30th.

 

According to a release on December 15th by the National Oilseed Processors Association, 179.5 million bushels of soybeans were crushed in November compared to an expectation of 181.6 million bushels. The previous monthly crush value was184.0 million bushels.

 

On January 4th 2022 soybean meal quoted central Illinois was $439 per ton, $15 per ton higher than the previous week and compared to $420 per ton on December 29th 2020.

 

On December 14th 2021 Meat and Bone meal was $330 per ton quoted Central U.S., unchanged from the previous week but compared to $340 per ton on December 15th 2020.

 

On January 6th the conversion of the CNY to the BRL was 0.89 BRL, down BRL 0.01 from the previous week. The conversion of the US$ to the CNY was 6.25, up CNY 0.13 from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the December 9th 2021 WASDE #619 under the STATS tab. The USDA quarterly Grain Stocks Report and WASDE #620 will be released on January 12th 2022.

 


 

Egg Week

01/04/2022

USDA Weekly Egg Price and Inventory Report, January 5th 2022.

Market Overview

  • Unit revenue for Midwest Extra-large and Large sizes after the Christmas surge was predictably down by an average of 7.5 percent this past week following a 0.6 percent rise in price over the previous week. Mediums were down 6.6 percent. The decrease in all sizes this past week coupled with rise in industry inventory above 2.0 million cases suggests a full pipeline and weakening demand moving through January 2022. December 2021 prices contrasted favorably with the corresponding four weeks in 2020 characterized by low ex-plant unit revenue. The price of shell-eggs will not be unduly affected by a net decrease of 0.6 million hens in the producing flock this past week but with a 14.3 million net increase in flock size over 21 weeks. Wholesale Midwest prices retreated but are still providing positive margins, taking into account the combined costs of nest-run, grading, packaging and delivery.

 

  • Shell inventory was 8.5 percent higher after a 7.4 percent increase over the previous week, indicating that the pipeline from packing plants to the retail shelf has been filled. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the published USDA inventory for plants, especially over the short term. Chains spread their purchases in December and attempted to preempt anticipated pre-Christmas price rises. Industry observers and participants expected buyers to adjust purchases only in response to retail demand 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. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during October and early November depressed the volume of sales of generics to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

  • Currently inventory has increased in response to the action of chain buyers and comprises close to five days of production. Price movement over the past ten months and specifically since Labor Day and extending through Christmas defies conventional supply to demand relationships and indicates extraneous factors affecting price of eggs that are not constrained by a feed-price index. The decrease in price this past week suggests that unit revenue has commenced a seasonal decline into 2022 after a one-week plateau that followed high pre-Christmas prices. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional, collusion. 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 and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.

 

  • The U.S. flock in production was up 0.1 percent (0.4 million hens) from the week of December 22nd to 325.3 million consistent with planned seasonal molting, placement and depletion, but with about 2.5 million molted hens having resumed production during the early weeks of December. The Industry demonstrated beneficial restraint in flock placement in the third and fourth quarters with continued depletions and non-restocking of some complexes or houses and disposal of flocks in the week before Christmas. Margins should continue to increase for commodity eggs due to increased demand as predicated by the pattern of seasonal wholesale prices over the past three weeks. Production margins will be negatively impacted by increased prices for feed and pullet chicks. Higher labor and fuel costs will detract from profit especially if unit revenue fails to match expectations after the post-Christmas weeks.

 

  • There is some prospect of a return in the food service sector with both frozen and dried-egg prices marginally higher over the past month but unchanged this past week. The economy is reopening despite ongoing concern over COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three available approved vaccines and boosters in diverse regions and demographics.

 

  • The Midwest price for breaking stock was down 3.3 percent to an average of 73.5 cents per dozen. Checks in the Midwest were down 4.4 percent to an average of 64.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

 

The Week in Review

 

Prices

According to the USDA Egg Market News Reports released on January 3rd, the Midwest wholesale price for Extra-large was 7.4 percent lower to an average of 148.5 cents per dozen; Large were 7.6 percent lower to an average of 105.5 cents per dozen; Mediums were lower by 3.3 percent to 98.5 cents per dozen as delivered to DCs. Prices should be compared with the USDA benchmark average 6-Region blended nest-run cost (excluding provisions for packing, packaging materials and transport) of 69.2 cents per dozen in November 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The January 3rd 2021 edition of the USDA Egg Market News Report (Vol. 69: No. 01) documented a USDA Combined Region value rounded to the nearest cent, of $1.69 per dozen delivered to warehouses for the week ending December 27th 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.59 per dozen. At the high end of the range, price in the South Central Region attained $1.77 per dozen. The USDA Combined Price last week was 50 cents above the 3-year average. This past week Midwest Large was approximately 85 cents above the corresponding week in 2020 that showed a surprising sharp decline from mid-December onwards. Prices followed a plateau after Christmas and then fell with an anticipated downward trajectory in the near term given the full pipeline moving into 2022.

 

Flock Size

According to the USDA the number of producing hens reflecting January 5 th (rounded to 0.1 million) was 0.6 million lower to 324.7 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 4.5 million new pullets reaching maturity during the week, offset by flock depletion. Based on inventory level the hen population producing eggs is in excess in relation to current consumer demand. Exports are at a moderate level with lower exports to South Korea following restoration of flocks previously depleted due to HPAI. Industrial and food service off-take although increasing, has not reverted to pre-COVID levels. Any number of producing hens above a subjectively determined range of 322 to 324 million in production during the first week in January, portends lower prices depending on relative levels of producer and store inventories. For the next week prices will decline, given the increases in inventory over the past two weeks. Oversupply as denoted by inventory is attributed to the contribution of hens returning to production from molt in early December 2021 coupled with pullets placed 24 weeks earlier that are now in production.


 


Holiday Retail Sales Higher Than in 2020

01/03/2022

According to Mastercard, holiday spending at retail rose 8.5 percent compared with the Christmas season of 2020.  In-store sales added 2.4 percent and online sales were up by a substantial 61.4 percent compared to the pre-pandemic Christmas season of 2019.  Supermarket and grocery sales will be posted when available.


 

Maple Leaf Foods Imposes Proof of Vaccination Requirement

01/03/2022

Effective April 1st 2022 Maple Leaf Foods will require proof of vaccination for employees, contractors, and visitors entering any company-owned facility including hog farms operated by the Company.  The requirement does not apply to contractors or independent producers who sell to Maple Leaf Foods. 

 

The effective date is three months hence allowing for compliance.  Given the incidence rate of COVID fueled by the emergence of the Omicron variant, a more immediate date of compliance is indicated.  Maple Leaf Foods recorded cases of COVID among workers in plants in Canada consistent with the incidence rates in U.S. red meat facilities in 2020.

 


 

FSIS Publishes FY2021 Annual Plan

01/03/2022

The Food Safety and Inspection Service has published the 2021 Annual Plan relating to prevention of foodborne disease.  In the coming fiscal year, the Agency will build on accomplishments during the FSIS Service Strategic Plan  for 2017-2021. 

 

According to Paul Kiecker, Administrator of the FSIS, the principal goal will be to prevent foodborne illness and protect public health.  This will be achieved through the second goal involving modernization of inspection systems and the use of scientific approaches to challenges.  FSIS intends to achieve operational excellence through enhanced recruitment and retention, training and improving service delivery. 

 

Planned activities include expanding non-O157 STEC surveillance beyond primary processing of beef to include ground beef and derived products.  The Agency will implement a pathogen-reduction performance standard for Salmonella in ground beef.  New standards will be proposed for Campylobacter in broilers, turkeys, and chicken parts.  A new guideline will be published concerning the destruction of Salmonella and pathogens in ready-to-eat products and the control of the organism in not-ready-to-eat products during cooling and non-refrigerated holding.


 

NIH Scientists Call for Coronavirus Field Studies

01/03/2022

A team of scientists at the National Institute of Allergy and Infectious Diseases led by Dr. Antony Fauci has called for international collaboration to surveil coronaviruses from potential wild animal reservoirs, including bats and from domestic animals to understand the extent and types of coronaviruses in circulation*.  Whole genome sequencing could enable evaluating the probability of crossover from animal species to humans thereby providing an early warning system for outbreaks.

 

Based on experience gained from molecular assays prior to the emergence of COVID and additional knowledge thereafter, the NIH team predict that COVID will continue to circulate in human populations.  This presumes additional research and development on vaccines that are more specific with the objective of stimulating a rapid antibody response and lasting immunity.

 

*Morens, D. M. et al. Universal Coronavirus Vaccine - An Urgent Need. The New England Journal of Medicine. DOI:10.1056/NEJMp2118468 (2021).

 


 

Darling Ingredients Acquires Valley Proteins

01/03/2022

In a December 29th announcement, Darling Ingredients has agreed to purchase Valley Proteins in a transaction valued at $1.1 billion.  The product range of the Company is based on used cooking oil and animal parts from the approximately twenty Valley Protein rendering and refining plants. These items will complement proteins and fats produced by Darling Ingredients. The acquiring company markets hydrolyzed collagen, feed-grade fats and animal by-products used in livestock feed, pet food and the bioenergy sector but is moving to low-carbon feedstock for renewable diesel fuel.

 

Darling Ingredients (DAR) has a market capitalization of $11 billion and has traded in a fifty-two-week range of $56.16 to $85.98 with a fifty-day moving average of $72.89.  The company trades at a forward P/E of 12.1.  On a trailing twelve-month basis, operating margin was 9.9 percent and profit margin 12.1 percent.  The company has generated a return on assets of 4.9 percent and 17.9 percent on equity.  DAR closed at $66.50 on Wednesday, December 28th prior to the announcement and traded higher on Wednesday, December 29th closing at $67.81 up 1.9 percent.


 

Sad Passing of Dr. Bernie Rollin

01/03/2022

AVMA has advised Members of the sad passing of Dr. Bernie E. Rollin on November 19th at the age of 78.  A graduate of Columbia University with a doctorate in philosophy, he was appointed to the faculty of Colorado State University College of Veterinary Medicine to teach ethics and welfare. On his retirement he was a Professor of Physiology and Biophysics and Director of Bioethical Planning at CSU.

 

Dr. Rollin was intensely practical and was a popular instructor and mentor at Colorado State where he taught for 50 years.  He was the author of Animal Rights and Human Morality published in 1981 followed by a succession of incisive and relevant text including Farm Animal Welfare (1995) and others and editing the two-volume standard work The Experimental Animal and Biomedical Research published in 1989.  Dr. Rollin regarded animals as more than resources but accepted that livestock, if handled and treated appropriately, was consistent with ethical principles.

 

Colorado took to Bernie who apart from being an astute philosopher rode a Harley and was an avid weightlifter. In commenting on his productive career, Dr. Mark Zabel, Associate Dean for Research at the CSU College of Veterinary Medicine and Biomedical Sciences noted, "he was smart and salty and not always easy to work with but he genuinely cared about animals and students.  He is missed already".

 

We have lost a mentor and guide and many of us have lost a respected friend.


 

Honeybees Practice Biosecurity

01/03/2022

In a November 27th article The Economist reported on research conducted in Italy on the measures taken by honeybees to prevent infestation of hives with Varroa destructor, a parasitic mite.  Forager female bees that become infected with a Varroa mite perform their wiggle dance, used to indicate the position of food to other foragers in the hive away from the vulnerable core area of the hive where larva mature.  In addition allogrooming to remove debris and parasites is conducted in a remote area away from the nursery and food stores, and mainly at the entrance of the hive.  Practicing a primitive form of innate biosecurity represents a cost to the hive as the efficiency of food gathering is negatively impacted by limiting the areas for wiggle dancing and allogrooming.

 

Perhaps even lowly honeybees have lessons for humans who resist social distancing, wearing masks, and common sense precautions to protect against infection or who ignore basic operational biosecurity for farms.


 

FSIS Issues Public Health Alert for Meat and Poultry Products From China

01/03/2022

In a December 29th 2021 announcement, the USDA FSIS issued a public health alert for an undetermined quantity of imported meat and poultry products from China.  Labels did not indicate where items were processed and packed and no FSIS import re-inspection was conducted. The illegal importation was detected by U.S. Customs and Border Protection and investigated by USDA APHIS.

 

Reviewing the labels, it is obvious that the various products contained pork, chicken and duck meat.  Although apparently heat processed, there is always a danger of introducing African swine fever (ASF) in the case of pork and avian influenza (AI) from undercooked poultry or contaminated packaging.

 

The FSIS has advised retailers not to sell products and consumers should dispose of them.  There is always a danger that discarded products will be consumed by animals with dissemination of pathogens as has occurred in a number of previous outbreaks. These include ASF into Portugal extending across the Iberian Peninsula in 1957 and Foot and Mouth disease into England in 2001. Recently, authorities in Japan and Thailand have confiscated contraband pork yielding ASF virus from the luggage of air travelers. There is an ongoing imperative to prevent introduction of exotic diseases through commercial shipments and by passengers.


 

Plastic Recycling Influencing Packaging

01/02/2022

In 2021, the proportion of plastic material subject to recycling increased in response to consumer and government demands to avoid environmental contamination.  This trend has influenced chemical engineers to develop new plastics.  Formulations are undergoing change to allow for spontaneous and contrived post-use de-polymerization. 

 

According to Leigh Boerner in a December article in Chemical and Engineering News “circular thinking” is leading to the development of polymers that can be degraded into monomers and then recovered for subsequent recycling.  Some new materials including polyacetal formulations are degradable by acid catalysts to monomers at relatively low temperature.  A second approach involves using a ruthenium catalyst to de-ploymerize plastics comprising cyclooctene monomers fused with a cyclobutane. De-polymerization occurs at 50 C compared to stability of up to 370 C without the catalyst.

 

It is possible that in coming years, plastics can be formulated with inherent recycling capability.  Enzymes could be encapsulated and incorporated into the plastic in the form of nanoparticles.  When used plastics are exposed to a combination of humidity and heat or ultraviolet light, enzymes are released and can degrade almost all the polymer within days to lactic acid.

 

Plastics are an integral part of modern life but are responsible for profound problems of disposal.  By designing plastics that are capable of low-temperature or enzymatic degradation, the benefits of convenience and cost in packaging can be retained without the obvious problems of disposal.

 

 


 

Pilgrim’s Pride Denied Permit for rendering Plant in Gadsden, AL

01/02/2022

The Gadsden Airport Authority has rejected a proposal from Pilgrim’s Pride to erect a rendering plant near their location.  Considerable opposition surfaced after the proposal was made public.  The Authority rejected the application at a December 17th meeting by unanimous vote that denied lease or sale of airport property to either Pilgrim’s Pride or their nominee Etowah Community Group.

The Federal Aviation Administration noted that the proposal to locate a rendering plant at the location would be unsafe and hazardous.  This presumably was based on the certainty that the plant would attract wild birds a situation incompatible with flight operations.

 

Authorities responsible for management of state or local resources will become increasingly sensetive to public opinion and landholder and residents rights. Increased scruitiny will be extended to applications for permits and zoning variances requested for installations associated with intensive livestock agriculture including egg-production farms and plants.

 


 

Listeria Persists in Packaged Salads

01/02/2022

In a December 23rd release, the Centers for Disease Control announced an investigation into two apparently unrelated outbreaks of listeriosis attributed to packaged salads produced by Fresh Express and Dole respectively. 

 

The Fresh Express outbreak has so far affected ten consumers in eight states, all of whom have been hospitalized resulting in one fatality.  Fresh Express recalled various brands on December 20th including Simply Nature, Weiss Fresh from the Field, O-Organics and Giant Eagle.

 

The investigation implicating Dole packaged salads has identified 16 cases in 13 states with 12 hospitalizations and two fatalities.  The outbreak strain of Listeria has been identified in packages of salads produced and distributed by the company.  Brands that were recalled on December 22nd included Ahold, Dole, Kroger, Lidl, Nature’s Promise, and Simply Nature.

 

Investigations are in progress to identify the source of infection and to define the epidemiology of the outbreaks in order that preventive action can be implemented.


 

Avian Influenza Outbreak on the Avalon Peninsula of Newfoundland has Implications for the East Coast of the U.S.

01/02/2022

The December 24th edition of EGG-NEWS, documented an outbreak of H5N1 highly pathogenic avian influenza (HPAI) near St. Johns on the Avalon Peninsula of the Province of Newfoundland and Labrador.  The affected flock comprised 409 mixed species including geese, ducks, bantams, and turkeys held for exhibition.  Subsequent to the outbreak, genome sequencing was performed on nine identical isolates that determined that all eight gene segments were of Eurasian origin. The virus was characterized as an H5N1 strain of the clade 2.3.4.4 b, related to the goose/guangdong G1/96-lineage  This virus is currently circulating in wild birds and poultry in Europe and is the first identification of this clade in the Americas.  An H5N1 virus was last identified in North America during 2014 and was ultimately responsible for the epornitic of 2015.  This virus was introduced from Asia across the Bering Strait, initially affecting poultry in the Frasier Valley of British Columbia and then appearing during December in northern California. 

 

The virus in the latest outbreak in Canada is however distinct from the 2014 introduction into British Columbia and California. It is evident that wild bird movement was responsible for transatlantic carriage possibly through serial contact among diverse species moving westward through Iceland and Greenland. The fact that there are few commercial and backyard domestic flocks in the northern Maritime provinces suggests that the virus may be widespread in migratory birds but unrecognized without appropriate surveys which have been initiated.

 

The introduction of an Eurasian strain of HPAI, responsible for outbreaks in Europe is cause for concern and should result in intensified biosecurity in more the populated Maritime provinces and the entire Northeastern seaboard of the U.S.

 


 

Amazon Labor Conditions Under Scrutiny by Congress

01/02/2022

Senators Marco Rubio (R-FL) and Sherrod Brown (D-OH) have formally requested the Department of Labor to investigate the labor practices of Amazon.com Inc.  Concern has been raised over the need to repeat an election by workers in an Alabama warehouse who voted not to unionize.  Subsequent investigations disclosed interference by the company.

 

The requested investigation will also address worker safety following the collapse of a fulfillment center during a mid-December tornado in Illinois. Currently the Occupational Safety and Health Administration is investigating the causes leading to the death of six workers.  According to the letter, Amazon workers have expressed concerns regarding emergency response training and Company management ignoring toronado warnings.

 

 Amazon is responsible for employment of one out of every 170 U.S. workers, justifying the intercession of the two Senators.


 

Technomic Predicts Higher Egg Consumption

01/02/2022

In their 2022 Global Restaurant Trends Forecast, market research organization Technomic predicted higher use of eggs by restaurants serving sandwiches and other menu items containing eggs.

 

The American Egg Board plans to intensify relationships with food service providers to create egg-themed dishes that will extend consumption beyond the breakfast period.

 


 

La Nina to Persist Through Spring

01/02/2022

The National Oceanic and Atmospheric Administration (NOAA) has recorded a rise in December to February ambient temperatures in the southeast of approximately 5 F since the 1960’s. Whether this trend will persist will depend on the El Nino Southern Oscillation (ENSO).  This phenomenon is responsible for changes in the pattern of the Polar Jet stream that was responsible for the severe February freeze last winter.

 

Currently the ENSO is in a La Nina phase with cold surface temperatures in the equatorial Pacific. Computer models predict a swing to neutrality during Summer and ENSO will possibly cycle to an El Nino during mid-winter of this year.

 

A La Nina event is associated with warm and relatively dry conditions in the Southeast extending eastward over Gulf states; cold and wet condition in the Northwest; high rainfall over the Great Lakes and cold temperatures over the High Plains. U.S. weather patterns will depend on the path of the Polar Jet Stream as influenced by events in the equatorial Pacific.

 

Subscribers are referred to a comprehensive article on ENSO that can be accessed by entering El Nino in the search block.

 


 

Tyson to Offer Childcare at the Humboldt, TN Plant

01/02/2022

Tyson Foods will offer subsidized child care for workers at a new processing plant to be erected in Humboldt, TN.  Termed Tyson Tykes the center will open in 2023 and will support 100 children with a staff of 18. 

 

The initiative follows a recent program offering child care to second-shift workers at an Amarillo, TX. beef plant.  Tyson awarded $400,000 to a Boys and Girls Club to modify the facility to be suitable for young children.

 

Child care has emerged as asignificant cost factor for workers at plants. Availability of company-provided or subsidized service will encourage return to employment and loyalty thereby alleviating labor problems in many areas of operation and will become more common in the future.

 


 

Taiwan Records Outbreaks of H5N2 HPAI

12/31/2021

According to a ProMED Mail posting on December 27th authorities in Taiwan have announced nine cases of highly pathogenic avian influenza caused by a novel H5N2 subtype belonging to clade 2.3.4.4b.   In early August, this strain was isolated from a dead duck in a wetland area.  Subsequently the virus was isolated from seven farms in close proximity as confirmed on December 16th.  To date 66,400 ‘commercial poultry’ (species not stated but in all probability ducks and hens on small farms) have been depleted and infected premises decontaminated.

 

Serotype H5N1 was recently isolated from a dead spoonbill (Platalea minor) confirming that migratory birds are shedding avian influenza virus, representing a danger to commercial poultry especially if not confined to bird-proof buildings. 

 


 

Israel Facing Epornitic of Avian Influenza

12/31/2021

Migratory cranes are dying in large numbers in the Hula Lake Reservoir in the north of Israel.  Approximately 5,000 dead birds were recovered through Sunday December 26th.   In addition dead cranes were recorded in the Beit She’an Valley and a dead pelican diagnosed with H5N1 was identified in the Hefer Valley in Central Israel.

 

Due to some deficiency in biosecurity, the infection was introduced into flocks at the Margaliot Moshav located near the Hula Reserve.  To date 560,000 laying hens have been depleted along with turkeys and hens in nearby units.  It is calculated that Israel will have to import as many as 1.5 million dozen eggs each month to compensate for depleted flocks. 

To date authorities in Israel have recorded outbreaks among 20 commercial farms resulting in depletion of 364,000 turkeys, 650,000 egg-producing hens and 65,000 broilers and parent flocks to be detailed in a subsequent posting

 

The Times of Israel stated that the disease was introduced into the Hula Reserve from the commercial unit in Margaliot by a feed delivery vehicle.  Realistically the reverse  occurred with the migratory birds serving as the source of virus. 

 

Cranes appear to be highly susceptible to H5N1 since India has recorded high mortality in migratory demoiselle cranes (Anthropoides virgo) at the Sambhar Lake in Ragasthan State.

 

A discordant note as reported in the media is that Ministry of Agriculture advised consumers to thoroughly cook eggs to avoid infection with avian influenza.  This advice is more applicable to eggborne Salmonella infection that is currently prevalent in Israel. It is generally accepted that H5N1 avian influenza is not transmissible to humans through consumption of eggs.


 

Recommendations on ESG Reporting

12/30/2021

The Institute representing Certified Financial Analysts (CFA) recently conducted a global survey on reporting by company progress on environmental, social, and governance issues (ESG).  Margaret Franklin, President and CEO of the CFA Institute, noted “Uncovering investor viewpoints is critical at a time when global regulatory policy is in a state of flux concerning the role ESG factors play in the practice of investment management.”  She added, “Our members suggest these debates would be better settled between investors and their investment managers rather than regulators.” 

 

The survey disclosed a disinclination for governments to impose formal ESG reporting although regulatory authorities should be involved in establishing and supporting standards that would be globally consistent.  Accepted standards will be a prerequisite for auditing the status and progress in ESG by companies.  If ESG is integrated into management of companies, investment managers should consider the financial impacts of ESG policy. 

 

During the past three years, producers of food products and retailers have issued their own ESG reports that vary in detail and in many cases are laudatory in tone, concentrating on aspirational goals extending to 2030 and 2050. Respondents to the survey were generally in agreement that “greenwashing” should be discouraged with rules on marketing and claims.

 


 

Dr. Alex Strauch Receives MSU Award

12/30/2021

Dr. Alex Strauch, Staff Veterinarian at Herbruck’s Poultry Ranch was awarded a plaque by Michigan State University recognizing excellence in animal care.  The Early-Career Food Animal Veterinarian Award is presented by the MSU Department of Large Animal Clinical Services for significant contributions to the field of production animal medicine through commitment of skills and knowledge and innovative approaches to problems.

 

Dr. Mohamad Mousa, Vice-president of Production at Herbruck’s Poultry Ranch stated, “We are so proud of Alex for the top-quality care he provides to our animals.”  He added, “His work is an example of putting our core values into action, and we are so thankful he is a member of our team.”  Dr. Strauch has served as a Staff Veterinarian for nearly five years and is responsible for maintaining the health of eight million hens. 

 

In accepting the award he stated, “As we continue to grow, animal care will always be a top priority. I am committed to providing a high quality of life for the health of our birds and overall business.”


 

Cage-Free Housing Requires Efficient Washing

12/30/2021

Egg washing, a necessary food safety procedure, has been in regular use in the U.S. since the 1970s.  Prior to the USDA mandate to wash eggs, outbreaks of salmonellosis were attributed to a combination of shell contamination and defects.  Deposition of motile pathogens onto the surface of the egg as it passed through the cloaca will result in penetration of the shell through pores and cracks. This represents a potential source of internal infection of the egg even if the internal shell membrane inhibits movement into the albumen. After egg washing was mandated in the U.S. the incidence of egg-related salmonellosis fell sharply until the emergence of vertically transmitted  Salmonella Enteritidis in the 1980s

 

The FDA Egg Safety Final Rule published in the Federal Register in July 2009 mandated egg washing as an adjunct to other measures to prevent Salmonella Enteritidis.  Since late 2010, there has not been a documented case of SE infection from a flock conforming to the requirements of the FDA Final Rule. Procedures for effective egg washing are incorporated in the FDA Final Rule and in State Egg Quality Assurance programs. The Standard Operating Procedures of a branded egg cooperative distributing nationally, specifies temperature, pH and concentration of chlorine sanitizer to achieve optimal safety and quality.

 

With the transition to cage-free housing using either aviaries or slat-and-litter floor systems or allowing outside access, it is evident that a higher proportion of eggs entering packing plants have fecal soil or litter particles adherent to shells.  It is obviously necessary to remove foreign material that is readily detected using modern installations leading to downgrading.

 

Losses attributable to dirt on shells has a significant financial impact.  In a complex housing one million hens in aviaries, with a hen-day average of 79 percent, each one-percent increase in downgrade is equivalent to a loss of 658 dozens per day.  If the graded, but unpacked, value of cage-free eggs is $1.30 per dozen, the loss through disposal as breaking stock at $0.60 per dozen would be $0.70 per dozen.  This represents a loss of $168,120 per year for each one percent downgrading due to “dirties”.  Effectively due to floor eggs and eggs that hang up in the modules of aviaries, or are contaminated on elevators and conveyors the loss due to imperfectly cleaned eggs may exceed three percent in many installations.

 

The importance of effective cleaning has received more attention recently. Each of the sequential stages comprising prewetting, washing with a detergent-sanitizer, rinsing and drying have been the subject of refinement in the design of equipment and correct operation.

 

Kuhl Corporation has upgraded their WEB series of washers that incorporate design features providing satisfactory results over four decades.  Kuhl washers are available in capacities up to 1,000 cph and can eliminate 99 percent of surface bacteria when used in accordance with recommended levels of chlorine-based detergent-sanitizer.  Kuhl washers incorporate scalloped, horizontal-moving nylon strips on the brushes.  Kuhl washers allow adjustment of brush height and incorporate a traveling filter system.  For U.S. packing plants Kuhl washers are generally specified for European grading installations since they are compatible with imported equipment.

 

 It is noted that in the U.K. and the E.U. eggs are not washed.  This is based on the invalid perception that the outer cuticle (bloom) protects eggshells from penetration by motile bacteria.  Washing of eggs to remove contamination with adherent bacteria removes the bloom, hence the disinclination of regulators to allow washing.  The validity of the U.S. food safety approach based on effective washing is confirmed by the lack of infections attributed to contaminated egg shells processed in commercial packing plants. The higher standard of food safety in the U.S. from washing is complemented by mandated refrigeration from packing to point-of-sale, a requirement currently ignored by E.U. regulators contrary to volumes of research advocating a cold chain.

 

Kuhl Corporation can provide technical information and recommendations to design plants and to specify washing and drying equipment for either new installations or as retrofits to existing graders to enhance efficiency and to minimize losses. The Company can be accessed by clicking on to the Kuhl logo on the right side of the Welcome page


 

Stabilized Vaccines not Requiring Refrigeration

12/30/2021

Stable Pharma, a U.K. startup has developed technology that will stabilize heat-sensitive vaccines to protect against  SARS-CoV-2 for a two-month period without refrigeration.  Research conducted in cooperation with La Paz University Hospital in Madrid offers the potential to manufacture, transport and store mRNA vaccines without refrigeration with obvious implications for administration in remote nations with defeciencies in their cold chains.

 

If the technology could be applied to other live vaccines and cell-associated products, the World poultry industry would benefit especially with regard to both Marek's vaccines and Marek’s-based vectored products.  


 

Massachusetts Resolves Conflicts Over Space Allocation

12/30/2021

At the eleventh hour, the Massachusetts Legislature finally amended standards for housing of egg-producing flocks following the Question #3 ballot initiative in 2016 that will be sent to Governor Baker for his approval. In accordance with SA 2603, “Multi-tiered egg aviaries, partially-slatted cage-free housing systems, or any other cage-free housing system will be allowed, providing hens are allowed unfettered access to vertical space to provide one square foot of floor space per hen.”

 

This change to the 2016 ballot that specified 1.5 square foot brings Massachusetts into conformity with other states that based their space requirements on the UEP standard. 

 

The compromise language ensures a stable and affordable supply of eggs to the Commonwealth of Massachusetts, while honoring the intent of voters.


 

Moba Tray Palletizer

12/30/2021

Moba has unveiled the MR40 Tray Palletizer. This installation is a component of the MR robotics line.  The Tray Palletizer transfers eggs from a farm packer or an egg grader to a pallet at a rate of 300 cases per hour.

 

The MR40 incorporates a flexible gripper that contributes to functionality and strength to lift four stacks of trays at a time on to a pallet.  Exact positioning is achieved regardless of the quality of trays and the unit can load wood and plastic pallets currently in use.

 

Further information can be obtained by clicking on to the Moba logo on the right side of the Welcome page.


 

COMMODITY REPORT

12/30/2021

WEEKLY COMMODITY REPORT: DECEMBER 30th 2021.

  • Commodity prices and volumes again fluctuated over a wide range of up to 2.5 percent of value daily during the past five trading days but settled little changed on December 30th. The trend was influenced more by domestic demand and prospects for export orders than the release of the December 9th WASDE Report, now in the rearview mirror. The CME quotations for corn was down 1.8 percent and soybeans were down 0.5 percent, Soybean Meal gained 1.2 percent, compared to Thursday December 23rd.

 

  • Factors influencing prices in either direction included:-
    • Release of the December 9th WASDE with the 2021 corn and soybean harvests completed at the time of publication. The December WASDE projections for corn and soybean yield, acreage production and ending stocks, were unchanged from November. (transitory and minor downward pressure);
    • Increasing weekly ethanol production (upward pressure on corn)
    • Projections for new-crop soybeans in Brazil indicate a potential record. (moderate downward pressure on soybeans)
    • The Central Government of China authorized a buying cycle for soybeans as demand and crush margins improve. (upward pressure on soybeans)
    • Imports of corn by Mexico and China (transitory upward pressure)

 

  • U.S. farmers are now receiving and conversely livestock producers and ethanol refiners in the Midwest will pay above $6.00 per bushel for corn in March, down 1.8 percent from last week. Crushers will pay $13.30 per bushel for soybeans plus transport and basis during January 2022, down 0.5 percent from the December 23rd quotation for January delivery. Soybean meal was $5 per ton (1.2 percent) higher for January delivery compared to last week, reflecting higher domestic demand and export of soy oil coupled with the rise in the price of soybeans during past weeks.

 

  • The FAS Export Report released on December 30th for the week ending December 23rd reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 27.03 million metric tons (1,064 million bushels) with 13.67 million metric tons (538.1 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 1.3 million metric tons (50.0 million bushels) with 0.9 million metric tons (36.2 million bushels) shipped. For market year 2022-2023 outstanding sales amounted to 1.51 million metric tons (59.4 million bushels) with 0.06 million metric tons (2.3 million bushels) ordered this past week. (conversion 39.36 bushels per metric ton)

 

  • The FAS Export Report released on December 30th for the week ending December 23rd reflecting market year 2021-2022, recorded outstanding export orders for soybeans amounting to 12.45 million metric tons (457.4 million bushels) with 28.94 million metric tons (1,063.3 million bushels) actually shipped. Weekly soybean orders attained 0.52 million metric tons (19.1 million bushels) with 1.7 million metric tons (62.5 million bushels) shipped.

(conversion 36.74 bushels per metric ton)

 

  • For the week ending December 23rd 69,500 metric tons of soybean meal and cake were ordered for the market year 2021-2022, down 76 percent from the previous week. With restoration of operations covering most of the lower Mississippi terminals after damage from Hurricane Ida, 170,600 metric tons of meal and cake was shipped, down 57.1 percent from the previous week and representing 5.9 percent of the total 2,914,000 metric tons shipped during the current marketing year to date.

 

  • Projected harvests and ending stocks were documented in the December WASDE allowing clarity on quantities harvested and the effect of trade and domestic consumption on ending stocks that were unchanged from the November report.

 

The following quotations for delivery in the months as indicated were posted by the CME at 14H00 on December 30th 2021, compared with values posted at close of trading on December 23rd 2021 (in parentheses):-

 

COMMODITY

Corn (cents per bushel)

March

596 (607)

May

597 (608)

Soybeans (cents per bushel)

Jan.

1,327 (1,333)

March

1,338 (1,333)

Soybean meal ($ per ton)

Jan.

413 (408)

March

404 (402)

 

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

 

COMMODITY CHANGE FROM PAST WEEK FOR MONTH OF DELIVERY AS INDICATED

Corn:

March quotation down 11 cents per bushel (-1.8 percent)

Soybeans:

Jan. quotation down 6 cents per bushel (-0.5 percent)

Soybean Meal:

Jan. quotation up $5 per ton ( +1.2 percent)

 

The USDA weekly wholesale feedstuffs prices per short ton for December 29th (with spot prices from the previous week in parentheses) were:-

  • Corn: $212 ($216), Chicago
  • Soybean Meal: $424 ($396), Central Illinois
  • Meat and Bone Meal: $330 ($330), Central Midwest
  • DDGS: $187 ($170), Eastern corn belt
  • Wheat Middlings: $145 ($142), Minneapolis

 

  • For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

 

  • For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.44 cent per dozen

 

The respective changes in the prices of corn and soybean meal for December 29th compared with December 23rd USDA weekly quotations would increase nest-run production cost for eggs by 0.8 cents per dozen.

Year-to-date, the algebraic escalation in the prices of major ingredients has added 10.7* cents per dozen to eggs

*(rounded to 0.1cent)

 

According to the December 9th WASDE, corn harvested in calendar 2021 will be unchanged from the November report at 15,062 million bushels with ending stocks projected at 1,493 million bushels unchanged from the November 2021 WASDE Report. The corn harvest was completed by the last week in November. Total corn stocks on September 1st amounted to 1.24 billion bushels down 36 percent from September 1st 2020.

 

Compared with the December value, the CME quotation for corn at 14H00 on December 30th for March 2021 delivery was down 11 cents per bushel to 596 cents compared to an increase from the previous week.

 

The social restrictions imposed in the U.S. as a result of COVID-19, that are now being lifted, were projected to reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement, accepting a nominal ten percent addition to gasoline. This past week 92.5 percent of the U.S. ethanol fermentation volume was operational, based on the September 2021 U.S. Energy Information Administration (U.S. EIA) capacity data. The outlook for increased production will depend on higher domestic demand in addition to increasing the proportion of production that is exported. According to the U.S. EIA, for the week ending December 24th the industry produced on average 1,059,000 barrels per day, up 0.9 percent from the week ending December 17th 2021, and the eleventh consecutive week above one million gallons per day after thirteen successive weeks under this benchmark. On December 24th ethanol stock was up 2.0 percent from the previous week to 20.7 million barrels, representing an approximately 20-day reserve but confirming a decrease in demand given a higher stock relative to production during the week.

 

Ethanol was priced at $3.00 per gallon on December 29th down 2 cents or 0.7 percent from the previous week and compared to a 52-week range of $1.45 to $3.21per gallon. Concurrently RBOB gasoline at $2.27 per gallon (CME. Chicago) was up 10 cent per gallon (4.6 percent) from the previous week, consistent with a 3.6 percent higher WTI crude price of $75.49 per barrel on December 29th. Gasoline is now 73 cents per gallon less expensive than ethanol but with a 63 percent higher BTU rating.

 

With most plants among the 197 that were operational on January 1st 2021 functioning, DDGS is freely available but commands a higher price than in the first half of 2021. Eastern Corn-belt DDGS was priced at $170 per ton on December 29th 2021, down $3 per ton from the previous week and $45 per ton less expensive than on December 15th 2020. Generally DDGS is currently incorporated at low inclusion levels in egg-production formulas based on high price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuates in price.

 

 Soybeans continue to be the beneficiary of export demand by China and other nations in addition to domestic livestock production and demand for soy oil. The USDA confirmed a harvest of 4,425 million bushels in the December WASDE. Ending stocks were unchanged from November at 340 million bushels. Total soybean stock on September 1st amounted to 256 million bushels down 51 percent from September 1st 2020 indicating the extent of exports during the 2020-2021 market year.

 

The CME soybean price for January 2022 delivery at 14H00 on December 30th was lower by 6 cents per bushel to 1,327 cents compared to 1,333 cents per bushel on December 23rd.

 

According to a release on December 15th by the National Oilseed Processors Association, 179.5 million bushels of soybeans were crushed in November compared to an expectation of 181.6 million bushels. The previous monthly crush value was184.0 million bushels.

 

On December 29th 2021 the soybean meal quoted central Illinois was $424 per ton, $28 per ton higher than the previous week and compared to $386 per ton on December 15th 2020.

 

On December 14th 2021 Meat and Bone meal was $330 per ton quoted Central U.S., unchanged from the previous week but compared to $340 per ton on December 15th 2020.

 

On December 16th the conversion of the CNY to the BRL was 0.88 BRL, down CNY 0.01 from the previous week. The conversion of the US$ to the CNY was 6.38, unchanged from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The USDA-FAS documented sales of U.S. corn to China through late August 2021 comprising the 2020/2021market year amounting to 73 million metric tons (2,876 million bushels) with 93 percent shipped.

 

COMMENTS

Subscribers are referred to the December 9th 2021 WASDE #619 under the STATS tab. The USDA quarterly Grain Stocks Report will be released on January 11th 2022.


 

Survey Reveals Acceptance of Masking to Prevent COVID

12/30/2021

In a survey of  behavior and sentiment conducted by Numerator, a market research group, 71 percent of those responding agreed that the U.S. will have to live with social concessions to COVID-19 and will probably never return to pre-COVID ‘normality’. 

 

It is noteworthy that half of consumers prefer to shop at retailers requiring masks.  This group of responders were subdivided as to 61 percent receiving a COVID vaccination and 20 percent unvaccinated.  A total of 60 percent of consumers prefer to wear masks in public.  Again with a marked difference of 68 percent vaccinated compared to 31 percent unvaccinated. 

 

Respondents elicited concern over the Omicron variant although more were aware of and worried over the currently dominant Delta variant.  There is still sentiment that rising incidence rates attributable to the Omicron variant will result in lockdowns with one-third anticipating enhanced restrictions.  This is approximately half the level of concern over lockdowns due to the Delta variant during the summer of 2020.

 


 

AEB Receives Marketing Award

12/30/2021
The American Egg Board received the Influencer Marketing Award at the International Communication Consultancy Organization (ICCO) Global Awards Ceremony. This distinction recognized the 2021 Easter Incredible Egg Challenge Campaign.  The ICCO award is judged by a panel of top international public relations practitioners. They evaluated the effectiveness of the program that featured an egg motif for baking, crafting, cooking and entertaining.

 

 

The Incredible Egg Challenge drove a seven percent lift in egg-buying among consumers exposed to the AEB campaign.


 

Wayne Farms to Donate to UGA Poultry Science Building

12/30/2021

Clint Rivers, president, CEO of Wayne Farms, a subsidiary of the Continental Grain Company recently announced a donation of $1.1 million to the proposed Poultry Science building at the University of Georgia.  The total cost of the facility will be $54.1 million and the project will extend over 70,000 square feet including instructional and laboratory space and services.

 

Dr. Todd Applegate, Head of the Department of Poultry Science within the College of Agriculture and Environmental Sciences at the University of Georgia stated, “As we are in the season of gratitude we are ever so thankful for this gift from Wayne Farms.  As our curriculum is known to be very hands-on, the gift will help inspire every trailblazing student to big dreams and help prepare the next generation of leaders for the poultry sector”.

 

Wayne Farms is currently ranked 7th among U.S. broiler producers with annually sales exceeding $2 billion.  Parent company Continental Grain recently formed a consortium with Cargill to purchase third-ranked Sanderson Farms.  Integration of the two companies would produce a more efficient entity that would close the gap with second-ranked Pilgrim’s Pride Corp. subject to Federal approval.


 




































































































































































































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