Egg Industry News


U.S. Economy to Expand in 2021

04/08/2021

After a 3.5 percent contraction in the U.S. economy as a result of COVID during 2020, the International Monetary Fund projects that the U.S. economy will expand by 6.4 percent in 2021.  The improvement is attributed to deployment of vaccines and unprecedented and aggressive stimulus measures. 

 

Advanced economies including the EU, Japan, the UK, and China are driving the recovery.  China is expected to expand by 8.4 percent in 2021 up from a previous forecast of 5.1 percent.  In the U.S., the Federal government has spent $5 trillion since March 2020 and the Federal Reserve has reduced interest rates to slightly above zero in addition to purchasing securities to stabilize the economy.


 

Egg Week

04/08/2021

USDA Weekly Egg Price and Inventory Report, April 8th 2021.

  • Shell inventory was down by 0.9 percent, following a gain of 0.7 percent last week. The trend over five weeks indicated increased demand relative to supply with implications for prices extending through mid-April. Prices have retreated over the past two weeks and this trend will continue with increasing velocity as buyers effectively filled the pipeline leading into the Easter weekend and consumers stocked their refrigerators. Chains purchased in quantity over the last two weeks of March to preempt and to suppress anticipated price rises. A large number of molted hens continue to return to production. Industry participants expect buyers to delay reentering the market in force but to be guided by retail demand and inventories in DCs and stores.
  • It is inexplicable to observe how inventory can decline one percent while prices drop 20 percent in a week. This movement on price defies conventional supply to demand relationships and indicates other factors affecting price. The standard 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.
  • Prices for Extra Large and Large in the Midwest were on average 21.7 percent lower this past week and will continue to fall with reduced post-Easter demand by chains. With mild oversupply inventory will accumulate. There is some prospect of a return in the food service sector although dried-egg prices are static. The economy is reopening despite a recent increase in COVID-19 incidence rates in many regions, following a plateau. There is however optimism over more rapid deployment and acceptance of vaccine.
  • The U.S. flock in production was unchanged from the week of March 31st to 323.0 million, with about 3.0 million molted hens resuming production within weeks. The Industry has demonstrated beneficial restraint in flock placement.
  • The USDA average Midwest benchmark generic prices for Extra-large and Large sizes were down 21.7 percent from the previous week at averages of 102.5 and 100.5 cents per dozen. Mediums were down 18.0 percent at an average of 77.5 cents per dozen. The 1st Quarter rise in prices reflected increased demand countered by a moderate increase in the U.S. flock in production. Broad demand from retail over the previous two weeks has evaporated as pipelines were refilled and the pre-Easter market swooned. The trajectory in prices from the last week of March onwards suggests lower prices and hence margins going forward into spring as feed costs rise and unit revenue erodes.
  • The Midwest price for breaking stock was down by 2.2 percent to an average of 66.0 cents per dozen. Checks in the Midwest were 3.2 percent lower to 59.0 cents per dozen.

 

OVERVIEW

Prices

According to the USDA Egg Market News Reports released on April 5th 2021 the Midwest wholesale prices for Extra-large and Large sizes were down 21.7 percent on average from the previous week as delivered to DCs, attaining 102.5 and 100.5 cents per dozen respectively. Mediums were down 18.0 percent to an average of 77.5 cents per dozen despite a stable supply from young flocks that have now matured. Prices should be compared with the USDA benchmark average 6-Region blended nest-run, (excluding provisions for packing and transport) cost of 71.1 cents per dozen in February 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The April 5th 2021 edition of the USDA Egg Market News Report (Vol. 68: No. 14) documented a USDA Combined Region value rounded to the nearest cent, of $1.33 per dozen delivered to warehouses for the week ending April 2nd 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.23 per dozen. At the high end of the range, price in the South Central Region attained $1.40 per dozen. The USDA Combined Price last week was 80 cents per dozen below the 3-year average. This past week Midwest Large was about $1.65 per dozen below the corresponding week in 2020 that was influenced by panic buying at the onset of COVID restrictions.


 


AEB Publishes Nielsen Statistics for Year-ending February 2021

04/07/2021

The American Egg Board (AEB) recently resumed circulation of Nielsen data reflecting 52-week rolling sales and consumption of eggs and egg products for the week ending February 20th 2021.  Nielsen data captures retail volume and sales value of shell eggs, consumer-packed liquid and cooked peeled eggs. Data is derived from supermarkets, groceries, dollar outlets, drug and convenience stores all with annual sales in excess of $2 million. Some club warehouses provide data but Costco is excluded.

The data assembled by Nielsen and distributed by the AEB for the current month covers 3.4 billion dozen egg-equivalents over the 52-week period. This represents 42 percent of 2020 egg production totalling 8.06 billion dozen or capture of approximately 65 percent of the shell egg segment of the industry.

 

  • For the 52-week period, retail sales of all eggs expressed as egg-equivalents increased 7.0 percent.  Dollar value was 10.3 percent higher than the previous 52-week period.  Per capita consumption advanced to 287.1 eggs representing a 0.4 percent increase. Direct  comparisons are distorted by the late March and April 2020 panic buying in response to COVID restrictions

 

  • On a rolling-52-week basis, the volume captured by Nielsen comprising retail shell-egg sales attained 3.42 billion egg equivalent dozens representing a 9.6 percent increase in volume and a19.9 percent increase in dollar value to $6.9 billion.  Egg alternatives including liquid, frozen and powdered egg products converted to equivalent dozens attained 93.1 million a 13.1 percent increase over the previous 52-week period and a 14.3 percent increase in dollar value. Rolling 52-week hard boiled egg sales attained 28.5 million dozen equivalents amounting to a 9.6 percent decline in volume and a disproportionate 15.5 percent decline in value.

 

  • In classifying retail sales by product segment, conventional eggs represented 84.9 percent, cage-free 12.3 percent and organic 2.8 percent. Rolling 52-week conventional egg sales increased 5.4 percent in volume and 7.4 percent in value.  Cage-free eggs increased 19.2 percent in volume and were almost equivalent at 19.6 percent in value.  Organic eggs increased 7.6 percent in volume and 15.5 percent in value.

 

  • With respect to volume of other than generic shell eggs, 52-week rolling branded egg sales comprised 29.2 percent of retail sales compared to 70.8 percent for private label.  Branded eggs generated 43.3 percent of dollar value compared to private label at 56.7 percent.  Branded eggs increased by 13.9 percent in volume and 19.5 percent in value.

 

  • In analyzing retail channels, 52-week rolling values compared to the previous period, supermarkets and groceries increased by 8.1 percent, drugstores declined by 3.9 percent, convenience stores were up by 4.7 percent and the combination of club stores and dollar stores increased by 5.7 percent presumably with the largest contribution from big-box clubs.

 

In reviewing current USDA data there are 68 million hens producing cage-free eggs, excluding non-confined hens under the Certified Organic program. This complement of hens represents 30.2 percent of an assumed population of 225 million hens in the shell egg segment of production. If USDA data on hens under cage-free housing (aviaries and barns) are accurate and accepting the Nielsen data indicating a sales proportion of 12.3 percent for this category, more than half of cage-free eggs are down-marketed to conventional. If the Nielsen data is accurate the situation with Certified Organic is even more extreme with 7.8 percent of 225 million hens producing under the category but representing 2.8 percent of shell egg sales YTD. The differences between potential production and recorded sales cannot be ascribed to use of cage-free and organic eggs in egg liquids. The nominal (pre-COVID) complement of hens producing eggs for the breaking segment is estimated at 95 million, predominantly as generics.


 

Annual Commemorative Egg Presented to the First Lady

04/07/2021

Emily Metz, president of the American Egg Board commented on the 2021 presentation of the AEB Commemorative Egg to the First Lady of the United States, Dr. Jill Biden at a White House event, muted by ongoing COVID restrictions that included cancellation of the 2021  Annual Easter Egg Roll .

 

Emily Metz reported “This year’s First Lady’s Commemorative Egg was intricately designed to honor Dr. Jill Biden and her shared commitment with America’s egg farmers to serving those in need, at such a great time of need, and to reflect the American spirit of hope and optimism in the wake of COVID-19”.

 

Designed by egg artist Russ Hagen, the 2021 First Lady’s Commemorative Egg features the White House front and back flanked by meticulously crafted cherry blossoms. The image of the White House appears on hand-cut, vintage silk.


Presentation of AEB Commemorative Egg to First Lady Dr. Jill Biden

 

FMI Calculates Cost of COVID to Retailers

04/06/2021

In a video presentation, Leslie Sarasin, president and CEO of the Food Marketing Institute (FMI) estimated that incremental expenses at the retail level required to prevent COVID-19 and incentivize workers amounted to $24 billion in 2020.  The figure is based on a survey of 52 member companies representing 40 percent of the food retail industry, operating 14,000 stores.

 

This survey demonstrated that retailers responded to COVID by introducing in-store safety measures, providing staff bonuses, initiating curbside pickup and online ordering, providing PPE and extensive decontamination.  The industry was proactive in implementing safety, workforce and other available technology to maintain business and to provide service in a responsible manner to customers and the workforce.


 

U.S. Poultry and Egg Association Names Officers for 2021-2022

04/06/2021

At a recent Board of Directors meeting, it was decided to re-nominate the Executive Committee to a second term.

 

 

  • Greg Hinton of Rose Acre Farms was elected for a second term as Chairman of the Board of Directors of USPOULTRY. 
  • Mike Levengood of Perdue Farms will serve as Vice-chairman,
  • Mikell Fries of Clackson Poultry will be Treasurer,
  • Gerald Morrison of Farbest Foods will serve as Secretary
  •  John Prestage will be the Immediate-past Chairman.
  • Newly elected members of the Board of Directors are Dr. Marc de Beer of Aviagen North America, Bill Griffith of Peco Foods, Mandy Clopp of Pilgrim’s Pride and Gerald Sappenfeld of Simmons Prepared Foods. 

John Starket president USPOULTRY

 

In commenting on the election of the Executive Committee, John Starkey, president of USPOULTRY stated, “I look forward to the leadership and guidance these officers and new board members will provide our organization.”


 

Eggland’s Best Honored by Men’s Health

04/06/2021

For the sixteenth consecutive year, Eggland’s Best was recognized by Men’s Health in the food category for a product high in protein and low in saturated fats.

 

Charlie Lanktree, CEO of Eggland’s Best stated, “We are thrilled once again to be honored by respected and trusted Men’s Health.

 

Other products receiving Men’s Health awards included Jimmy Dean Turkey Sausage Simple Scrambles, Bell and Evan’s Spatchcock Chicken™ among the poultry-related products.

 


 

Aviagen Releases Coccidiosis Control Manuals

04/06/2021

Dr. Jose J. Bruzual, Senior Poultry Veterinarian with the Aviagen Global Veterinary Team has prepared manuals on controlling coccidiosis.  The two documents deal specifically with breeders and broilers respectively and cover vaccine handling, storage, administration, monitoring and brooding practices that contribute to immunity.

 

The manuals can be downloaded by accessing the Aviagen website by clicking on to the company logo on the right side of the welcome page.


 

2021 Midwest Poultry Federation Educational Program

04/06/2021

Subscribers can access <www.midwestpoultry.com> for the complete listing of presentations.

 

 

Contact: Lara Durben

ldurben@midwestpoultry.com or 763/284-6763

 

Midwest Poultry Federation Announces Education Program

Core Tracks for Turkeys, Eggs, Broilers & Processing + Additional Content from Purina and Multi-State Poultry Conference

 

The full education program for the 2021 Midwest Poultry Federation (MPF) Virtual Convention is now available at MidwestPoultry.com.

 

MPF’s Education Co-Chairs – Drs. Darrin Karcher of Purdue University and Ken Koelkebeck of the University of Illinois – worked with poultry experts form academia, government agencies, and industry to develop a robust education program that covers a variety of important topics for poultry farmers, poultry processing companies, and suppliers.

 

MPF’s core education tracks were each given a specific day on the schedule in an effort to keep the sessions flexible for attendees:

 

March 18 – Broiler Track

March 19 – Processing Track

March 20 – Pullet / Egg Layer Track

March 21 – Turkey Track

 

In addition to the live speakers on these days, there will be a variety of on-demand presentations in each track as well as a special “Exhibitor Featured Content Track”.

 

Attendees also will be pleased to find out their registration provides complimentary access to these special events as well:

 

·      Lunchtime Learning session on May 20, with topics covering why the right building materials matter from an insurance standpoint; and lessons learned from the founders of ChopLocal.com – a website that connects consumers directly to farmers.

·      Purina Animal Nutrition Symposium, featuring a variety of speakers on May 19 (8:00 am – Noon CST)

·      Multi-State Poultry Feeding & Nutrition Conference on May 19 (speakers and topics run 1:00 pm – 4:45 pm CST)

 

All education programming will remain available to attendees through May 31.

 

Registration to the MPF Convention is open now at https://midwestpoultry.com/attendees/registration/.

 

About MPF

MPF is a 501(c)6 nonprofit association and its annual convention is the nation’s largest poultry trade show and convention dedicated 100% to the poultry industry. In 2019 more than 3,100 attendees and exhibitors attended the show in Minneapolis. In 2020, MPF hosted its first-ever successful virtual trade show and convention.

 

Revenue generated by the convention goes back to MPF’s members (comprised of 11 poultry associations in the Midwest) and to support various poultry programs. Since 2011, MPF has donated over $500,000 back to the poultry community.

 

To request complimentary media registration to the 2021 MPF Virtual Convention, please contact Lara Durben. 

 

Link to this press release


 

AEB Outlines Promotional Campaigns

04/05/2021

According to an Update circulated by Emily Metz, president and CEO of the American Egg Board, promotional efforts will be intensified using Instagram and other social media.  The campaign will be evaluated by analyzing purchases made by consumers who reviewed content on social media.  Examples of focused promotion on Instagram include a Passover cooking activity and the National Egg Salad Week.


 

U.S. Trade Representative Investigates Obstacles to Trade

04/05/2021

Ambassador Katherine Tai, U.S. Trade Representative commissioned a report documenting barriers to U.S. exports among 65 trading partners.  The annual report issued on March 31st surveyed 65 trading partners including groups such as the E.U., the Arab League and the United Kingdom that account for 99 percent of U.S. trade in goods.

 

The report considered barriers relating to tariffs, import licensing and phyto-sanitary measures that directly affect U.S. export of agricultural commodities.  Many of the restrictions are not based on science and are blatantly protective or punitive.

It is apparent that Ambassador Tai will continue to advocate for U.S. exports following the policies established by her predecessors.  Some of the issues to be addressed include anomalous technical standards imposed by Saudi Arabia, local content requirements required for export to Indonesia, unjustified restrictions that are capriciously imposed by China and retaliatory bans on imported food products by the Russian Federation.


 

CDC/NIH to Evaluate Home COVID Testing

04/05/2021

A March 31st joint announcement from the Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH) provided information on a pilot trial on home COVID testing to be conducted in Pitt County, NC and Hamilton County, TN.

 

Participants will be provided with rapid antigen tests to be used for up to three times per week over a month.  The home tests will be provided free of charge to evaluate the effectiveness of the initiative and to establish whether a self-administered test can reduce community transmission of COVID.

 

Dr. Rochelle Walensky, Director of the CDC stated, "reliable and widely available testing is a critical part of our efforts to stop the spread of COVID-19.  Regular screening with at-home COVID-19 tests can strengthen our prevention efforts".  She added, "combined with efforts to increase vaccination, this important step will help us understand how best to use these at-home tests to reduce viral transmission rates in communities".

 

Participants will order test kits online for home delivery and a phone app. will be offered. It is hoped that participants in this "Say yes! COVID tests" program will continue to participate in NIH-supported research studies.

 

The Quick View™ E-test developed by Quidel of San Diego will be supplied under the NIH Rapid Acceleration of Diagnostics Initiative.  Dr. Elizabeth DiNenno, Associate Deputy Director for Surveillance, Epidemiology and Laboratory Sciences at the CDC stated, "if self-testing is shown to effectively reduce viral spread in the selected communities, the hope is that it will lead to wider distribution and acceptance of frequent home testing across the country".


 

EPA Administrator Dismisses Outside Experts Appointed by Previous Administration

04/05/2021

Michael Regan, the Administrator at the Environmental Protection Agency, has revoked the membership of 40 outside experts respectively serving on the EPA Science Advisory Board and the EPA Clean Air Scientific Advisory Committee.  The experts were appointed by the previous Administration and were instrumental in modifying regulations related to air pollution and fracking among other issues. The previous Administration favored experts from within industry and ignored independent specialists from academia.  Administrator Regan intends to reestablish scientific integrity in the Agency and to suppress interference with research on climate change and pollution.  Regan maintains that “resetting these two scientific advisory committees will ensure the agency receives the best possible scientific insight to support our work and protect human health and the environment.” 

 

The dismissals are opposed by Jeff Holmstead who led the EPA Office of Air and Radiation in the Bush Administration and is now a partner in a law and lobbying firm.  Holmstead observed that the action would undermine rather than restore confidence by eliminating experts with views contrary to the Administration and would detract from trust in the Agency. Dr. John D. Graham, previously Chair of the Science Advisory Board who served in the Bush Administration, stated “We have an EPA Administrator interested in receiving scientific advice only from those scientists that he has personally appointed.”

 

In a related issue, Administrator Regan reintroduced an EPA webpage on climate change that was deleted when the previous Administration assumed office.  Regan has told staff that science should inform policy and that politics should not drive science.  Procedures and policies developed during the previous Administration will now undergo scrutiny.  These include standards for ozone and permitted levels of particulate matter emitted by trucks and other vehicles.


 

Michigan Allied Poultry Industries Donated 8,000 Cases of Eggs in 2020

04/05/2021

The Michigan Allied Poultry Industries Group (MAPI) comprising DeWeerdt Poultry Farm, Farmcrest Foods, Herbruck's Poultry Ranch, Schipper Eggs, Sunrise Acres Egg Farm, and VandeBunte Eggs collectively donated 8,300 cases of eggs in 2020. 

 

According to the Executive Director of the Association, Allison Brink, “Michigan’s family egg farms are incredibly generous and continue to be invested in their communities making sure as many people as possible have access to healthy local protein donations.”  Recipients of donations included the Holland Rescue Mission; Hungry for Christ; People Helping People; Food Bank of Eastern Michigan; Feeding America, West Michigan and other outreach ministries.  The MAPI is a statewide nonprofit organization representing egg, chicken, and turkey farmers, hatcheries, and pullet growers.


 

USDA DATA ON MARCH 2021 CAGE-FREE PRODUCTION

04/05/2021

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

 

The USDA Cage-Free Report for the month of March 2021 released on April 5th 2021 documented a static population of hens producing under the Certified Organic seal at 17.5 million. Cage-free flocks were unchanged at 67.5 million compared to February 2021. (all rounded to 0.1 million). The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. It is evident that a noteworthy proportion of organic and cage-free eggs are down-priced to the generic category when comparing Nielsen retail sales data with potential production based on hen numbers as documented by the USDA.

 

Average flock production was reduced by 0.5 percent to 78.5 percent for both categories of non-caged hens. This reflects flocks of slightly increasing average age. Younger flocks increase the availability of cage-free eggs and organic eggs reflecting pullet chick placements in anticipation of pre-Christmas and pre-Easter demand. Average flock production in March represented the balance between older flocks and the higher relative production from pullet chicks placed during mid to late September 2020 and a small number of molted flocks resuming production during the month.

 

Flock size March. Av. Av. Av. Q1 Q4

(million hens) 2021 2021 2020

Av. Q3

2020

Av.

Q2

2020

Av.

Q1

2020

Certified Organic 17.5 17.4 17.2

16.2

15.7

15.7

Cage-free hens 67.5 66.6 62.8

62.9

61.5

56.3

Total non-caged 85.0 84.0 80.0

79.1

77.2

72.0

 

Average weekly production (cases)

February 2021

February 2021

Certified Organic

268,689

266,988 -0.6

Cage-free

 1,036,814

 1,030,251 -0.6

Total non-caged

 1,305,503

 1,297,239 -0.6

 

Average Whole Contact Price Cage-Free Brown

$1.60/doz. ($1.51 Sep. to Dec. 2020. $1.60, Q1 2021)

Range:

$1.15 to $2.35/doz. (Unchanged from January)

FOB Negotiated price, grade quality, nest-run. Loose

Price range $1.20 to $1.70 per dozen

Average Value of $1.40/doz. ($1.78 Feb. 2021.)

 

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

$2.53/doz. (was $2.48 February 2021)

USDA 6-Regions

High: NE $2.77/doz. $2.91 (NE)

Low: SW $2.40/doz. $2.32 (SW)

 

The narrower range for both wholesale and retail prices this past month reflects stability between supply and demand during March 2021 but accepts the reality of downgrading to conventional categories.

 

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

 

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


 

King Soopers to Donate $1 Million to the Colorado Healing Fund

04/04/2021

King Soopers, a banner of the Kroger Company will donate $1 million to the Colorado Healing Fund. This will provide support to victims, family survivors in the community following the deadly shooting at the Table Mesa Drive store in Boulder, CO.  On March 22nd resulting in ten fatalities. 

 

Steve Burnham, President of King Soopers stated, "our entire family continues to mourn the loss of those who were victims of the senseless act of violence".  He added, "we have been overwhelmed by the outpouring of support from our fellow Coloradans and we thank everyone for their incredible kindness".

 

King Soopers is providing access to mental health services and other benefits for store associates including emergency paid leave and an associate hotline.  Assistance is extended to victims' families to support funeral expenses.


 

Moderna to Evaluate mRNA Vaccine Against COVID Variants

04/04/2021

The National Institute for Allergy and Infectious Diseases will supervise a trial to determine the efficacy of a Moderna vaccine against the B.1.351 SARS-CoV-2 variant that emerged in the Republic of South Africa.  The newly devised vaccine designated 1273.351 was rapidly developed by Moderna Inc. and confirms the flexibility of the mRNA platform.

 

Dr. Anthony S. Fauci, Director of NIAID stated that the B.1.351 variant has been confirmed in nine states in the U.S. Although the current approved vaccines show effectiveness against this strain, Moderna has developed the vaccine candidate in the event that it may be required, possibly as a booster.  It is noted that the AstraZeneca vaccine that uses an adenovirus as a vector for the spike protein antigen was only 10 percent effective against the South African variant in that Nation. 

 

Following a successful Phase 1 clinical trial, the phase 2/3 evaluation will include 210 adults between the ages of 18 and 55 who had not previously received a vaccine and had no evidence of exposure to COVID. The trial will be monitored by an independent safety committee and it is anticipated that all participants will be enrolled by the end of April 2021.


 

USDA SNAP Benefits Increased from April 1st

04/04/2021

The USDA announced on April 1st that $1 billion would be added to food assistance each month to provide an estimated 25 million recipients with additional assistance. Not all households are receiving additional support including 40 percent with children, 20 percent with an elderly resident and 15 percent with someone who is disabled.

 

According to USDA Secretary Tom Vilsack, "the emergency SNAP increases authorized by Congress last year were not being distributed equitably and the poorest households-who had the least ability to absorb the economic shocks brought about by COVID-received little to no emergency benefit increases".  He added, "today's actions will provide much-needed support for those who need it most".  Since the start of the pandemic, USDA has issued about $29 billion in additional benefits to bring all SNAP households up to the maximum for their household size. 

 

The January 22nd Executive Order on Economic Relief related to the COVID-19 Pandemic directed all Federal agencies to consider administrative actions to better address the current economic and social crises resulting from the pandemic.


 

Preliminary Data Confirms Effectiveness of mRNA Vaccines

04/03/2021

The Centers of Disease Control and Prevention has released preliminary results of a study involving 4,000 health-care personnel and first responders vaccinated between mid-December 2020 and mid-March 2021. The subjects were drawn from six states and the evaluation was conducted during the first quarter when COVID incidence rates were rising sharply. 

 

 It was determined that a single dose of either the Pfizer or Moderna vaccine provided 80 percent protection.  Following the second dose, a protection level of 90 percent was attained. Among 2,479 fully vaccinated subjects, three had confirmed infections.  Among 477 receiving one dose, eight cases were diagnosed.  Among the 994 non-vaccinated controls 161 infections were confirmed.

 

In commenting on the initial data, Dr. Rochelle Walensky Director of the Centers for Disease Control and Prevention, stated “The vaccines receiving FDA Emergency Use Authorization provided early, substantial real-world protection against infection for our nation’s healthcare personnel, first responders, and other frontline essential workers.” Dr. Walensky added, “These findings should offer hope to the millions of Americans receiving coronavirus vaccines each day and to those who will have the opportunity to roll up their sleeves and be vaccinated in the weeks ahead.”

 

The interim results of the healthcare and first responder study confirm the data submitted by the manufacturers of the two mRNA vaccines following completion of their respective Phase 3 trials in 2020.


 

Evonik Increases Investment for In Ovo Gender Technology

04/03/2021

Founded in 2013 by Dr. Wouter Bruins and Dr. Wil Stutterheim of Leiden University, In Ovo has developed technology to identify a biomarker associated with male embryos.  The process requires extraction of a minute quantity of allantoic fluid from the egg that is then subjected to mass spectrometry to determine gender.

 

In commenting on the investment, Bernhard Mohr, head of the Evonik Venture Capital, stated “In Ovo has reached a crucial milestone with a successful scaling up of its unique technology.”  He added, “Since we first invested and partnered with In Ovo in 2018, the ethical problem of culling chicks has gained attention and calls for a solution have become louder.” 

 

Dr. Bruins noted, “We are continuously improving our technology on speed, accuracy, and day of testing.”  He added, “I am confident that we are well placed to meet the market and regulatory demands.”  According to legislation passed in Germany, by 2024 gender assignment must occur before day-6 of incubation, which is currently not possible.  In Ovo has installed a gender typing machine in a hatchery and 150,000 commercial level pullets have been placed.  In Ovo has not released any data on livability and performance of pullets subjected to their gender determination procedure.

 

The approach used by In Ovo is reminiscent of the tecnnology developed by Embrex in the 1990s. The system was developed by Dr. Catherine Ricks to assay allantoic fluid from embryos at about 16 days of incubation. The equipment classified and segregated eggs with male and female embryos for separate-sex broiler growout. In the event, interest in growing cockerel and pullet chicks on different farms of a complex waned and cost and other factors inhibited commercial adoption.


 

COMMODITY REPORT

04/02/2021

WEEKLY COMMODITY REPORT: April 2nd 2021.

 

  • The financial and economic policies of the Biden-Harris Administration are emerging following passage of the $1.9 Trillion COVID Stimulus Package. This legislation combined with intensifying the vaccination campaign to reduce the impact of the COVID-19 pandemic should restore the economy by early summer.  USDA will provide extensive support to minorities in agriculture, small family farms and will extend SNAP benefits to alleviate hunger.

 

  • The commodity market this past week was slightly higher reversing the trend from the previous week. This change was despite fewer export orders especially for corn and concern over ending stocks as forecast in the March 9th WASDE Report and the March 31st Grain Stocks update. Data on plantings and end stocks will be updated in the April WASDE.

 

 

  • The direction of agricultural and trade policy to be implemented by the Biden Administration in 2021 is now clear following the recent confirmation of Tom Vilsack as USDA Secretary. He has emphasized support for the disadvantaged, sustainability and addressing climate change as Departmental priorities consistent with pre-election promises by then Candidate Biden.  Michael Regan and Kathleen Tai have been confirmed as the Administrator of the EPA and U.S. Trade Representative respectively. Ms. Tai has already expressed firmness in dealing with China, a sentiment echoed by Secretary of State Antony Blinken at bilateral meetings with China in Alaska on March 18th

 

  • U.S producers are now receiving and conversely livestock producers in the Midwest are paying close to $5.50 per bushel for corn and crushers are paying $14.00 per bushel for soybeans plus transport and basis.

 

  • Corn advanced by 1.3 percent and soybeans were fractionally higher than the previous week although at notably high levels. Soybean meal was up 1.2 percent for May delivery. This past week was characterized by extreme fluctuation with corn and soy limit high on Wednesday March 31st following the release of the USDA Grain Stocks and Planting Intentions reports.  Prices retreated on the two subsequent days based on a lack of export orders and a reflection on realities.

 

  • According to the USDA FAS Export Report for the week ending March25th 2021 reflecting market year 2020-2021, outstanding export orders for corn amounted to 32.0 million metric tons (1,261 million bushels) with 33.9 million metric tons (1,330 million bushels) actually shipped. During the past week 0.8 million metric tons (31.5 million bushels) of corn were ordered, down 46 percent from the four-week average. A total of 2.0 million tons (80.4 million bushels) of corn was shipped.

 

  • Outstanding export orders for soybeans for the 2020-2021 market year attained 6.0 million metric tons (220 million bushels) with 54.8 million metric tons (2,011 million bushels) actually shipped. This past week some previously placed orders from China were cancelled. Weekly sales of soybeans attained 0.1 million metric tons (3.7 million bushels) with 0.5 million metric tons (18.4 million bushels) shipped. During the past week 139,700 metric tons of soybean meal and cake were ordered and 257,400 metric tons were shipped, approximating 89 percent of the previous week.

 

The following quotations for delivery in the months as indicated were posted by the CME at14H00 on April 2nd 2021 compared with values posted at close of trading on March 26th 2021  (in parentheses) reflecting specified months in 2021 for delivery.

 

COMMODITY

 

Corn (cents per bushel)

 May    559        (552)      

July      544      (535)

Soybeans (cents per bushel)

 May 1,402     (1,401)

July  1,397   (1,392)

Soybean meal ($ per ton)

 May    409         (404)

July     411       (406)

 

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

COMMODITY    CHANGE FROM PAST WEEK

Corn:                  May quotation up 7 cents per bushel             (+1.3 percent)

Soybeans:         May quotation up 1 cent per bushel               (+0.1 percent )

Soybean Meal: May quotation up $5 per ton                            (+1.2 percent )

 

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

 

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

 

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

 

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

 

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

 

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

 

This week the changes in the prices of corn and soybean meal would increase nest-run production cost for eggs by 0.5 cent per dozen and for broilers 0.3 cent per live pound. Over the past quarter, escalations in the prices of major ingredients have added 7.8 cents per dozen and 4.6 cents per live-weight lb.

 

According to the March 9th WASDE, corn harvested in calendar 2021 will attain 14,183 million bushels with ending stocks projected at 1,502 million bushels, unchanged from the February 2021 WASDE Report. Values will be updated reflecting production, ongoing export volumes and domestic use in the April WASDE. Compared with the March 24th value, the CME quotation for corn at 14H00 on April 2nd was up 7 cents per bushel for May delivery to 559 cents. The USDA projects a 1 percent decrease in acreage planted to corn in 2021.

 

The social restrictions imposed in the U.S. as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement accepting a nominal ten percent addition to gasoline. This past week 12 percent of the U.S. ethanol fermentation capacity was off-line or operating at lower than capacity. The outlook for increased production will depend on domestic demand with ten percent of production exported. According to the U.S. Energy Information Agency for the week ending March 26th the industry produced on average 965,000 barrels per day up 4.7 percent from the 922,000 barrels per day for the week ending March 19th 2021, after recovering from disruption due to severe weather in mid-February. Ethanol stocks stood at 21.1 million barrels up 6.0 percent from the previous week.

 

Ethanol was priced at $1.91 per gallon on April 2nd up 6.1 since March 26th reflecting WTI crude and compared with a five-year low of $0.92 per gallon on March 26th 2020. Concurrently RBOB gasoline at $2.02 per gallon (quoted, New York Harbor) was up 3.6 percent from the previous week (presumably due to WTI crude price and a recovery from severe weather conditions) and remains 11 cents per gallon higher than ethanol but with a 63 percent higher BTU rating.  Relative prices of commodities, crude and ethanol might be influenced in early April as a result of the one-week blockage of the Suez Canal that disrupted trade between Asia and Europe and exacerbated the current shortage of available marine shipping containers.

 

With more plants among the 201 operational on January 1st 2021, DDGS is freely available but commanded a higher price than in the fourth quarter of 2020. Eastern Corn-belt product was priced at $208 per ton on March 30th 2021, $6 per ton lower than the previous week but $23 per ton more expensive than on March 24th 2020.

 

 Soybeans continue to be the beneficiary of export demand by China. The CME price at 14H00 on April 2nd rose 1 cent per bushel over the week to 1,402 cents per bushel for May delivery. The USDA documented a 2021 crop of 4,135 million bushels. Ending stocks according to the March 9th 2021 WASDE projection will attain 120 million bushels, unchanged from the March and February projections representing a seven-year low. The USDA Planting Intentions report indicated that soybean acreage would increase by 5 percent over 2020. According to the National Oilseed Processors Association 155 million bushels of soybeans were crushed in February. This value was 6 percent lower than in January due to disruption caused by a shortage of natural gas attributed to severe weather.

 

On March 30th` 2021 Meat and Bone meal quoted Central U.S. attained $425 per ton, unchanged from the previous week and compared to $250 per ton on March 24th 2020 when a surplus prevailed due to COVID-related disruption of packing operations requiring euthanasia of hogs.

 

On April 2nd the BRL exchange with the CNY was 0.87, (unchanged from the previous week). The conversion of the US$ to the CNY was set at 6.57 up CNY 0.03, 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 anticipates that soybean imports by China will amount to 95 million metric tons during the 2020-2021 market year.

 

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 U.S. Grains Council documented sales of U.S. corn to China through December 31st 2020 during the 2020/2021 year amounting to 11.7 million metric tons (460 million bushels) with 65 percent yet to be shipped.

 

For the 2019/2020 market year China imported 16.3 million metric tons of soybeans from the U.S., 36.2 percent of total exports of 44.9 million metric tons, but 3.9 percent less than in the 2018/2019 market year.

COMMENTS

Subscribers are referred to the March 9th 2021th WASDE #610 under the STATISTICS TAB.

 

Consistent with the need for self-sufficiency China announced on January 8th that an additional 1.7 million acres would be planted to corn in 2021. China intends to rehabilitate 6.8 million acres of “polluted land” to be brought into production.

 

Approximately $16 billion was disbursed under the Coronavirus Food Assistance Program (CFAP) in early 2020. An additional $14 Billion relief package was announced by the Administration on September 18th with all of the allotment having been distributed. Additional funds will be included in the proposed Coronavirus Relief Package. USDA has frozen distribution of CFAP funding including $2.3 billion for hog and poultry contractors and $13 billion for row crop farmers. A decision regarding disbursement will be issued soon according to a USDA release.


 

USDA Grain Stocks Report

04/01/2021

The USDA quarterly Grain Stocks Report released on March 31st 2021 documented storage of commodities produced in the U.S. classified according to on-site and remote facilities including elevators and commercial installations. Quantities of corn and soybeans, the two major commodities relevant to poultry production were:-

 

“Corn stocks in all positions on March 1st 2021 totaled 7.70 billion bushels, down 3 percent from March 1st 2020. Of the total stocks, 4.04 billion bushels were stored on farms, down 9 percent from a year earlier. Off-farm stocks, at 3.66 billion bushels, are up 5 percent from a year ago. The December 2020 - February 2021 indicated disappearance is 3.59 billion bushels, compared with 3.38 billion bushels during the same period last year”.

 

“Soybeans stored in all positions on March 1st 2021 totaled 1.56 billion bushels, down 31 percent from March 1st 2020. Soybean stocks stored on farms are estimated at 594 million bushels, down 41 percent from a year ago. Off-farm stocks, at 970 million bushels, are down 22 percent from last March. Indicated disappearance for the December 2020 - February 2021 quarter totaled 1.38 billion bushels, up 39 percent from the same period a year earlier.”

 

The Grain Stocks report taken in conjunction with the Prospective Planting report sent both corn and soybeans to limit-up at close of trading on March 31st on the CME.


 

USDA Prospective Planting Report

04/01/2021

The eagerly anticipated USDA Prospective Planting Report released March 31st sent corn and soybeans into limit-up mode. Corn closed at 565 cents per bushel and soybeans at 1,237 cents per bushel. Corn price held on Thursday with May contracts at 567 cents per bushel contrasted to soybeans that backtracked 1.2 percent to 1,420 at 11H00 EDT.

 

The USDA release documented:-

 

“Corn planted area for all purposes in 2021 is estimated at 91.1 million acres, up less than 1 percent or an increase of 325,000 acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 24 of the 48 estimating States”.

 

“Soybean planted area for 2021 is estimated at 87.6 million acres, up 5 percent from last year. Compared with last year, planted acreage is up or unchanged in 23 of the 29 estimating States.”


 

Big Dutchman LED Lighting Fixtures

04/01/2021

The Zeus from Big Dutchman is a two channel, moisture-proof dimmable LED that will provide even and cost-effective illumination. Features include:-

 

  • Dimmable through 100 percent .
  • Zero flickering even at low light intensities
  • Even distribution of light
  • Wide optical spectrum from warm white to cool white
  • Long-lasting energy savings

 

Zeus LED is an attractive option for retrofit or new house applications. Further information is available on the Big Dutchman website accessed by clicking on to the Company logo on the right side of the Welcome page.


 

Herbruck’s Receives Sustainability Award

04/01/2021

Family-owned and operated Herbruck’s Poultry Ranch headquartered in Saranac, MI. received a 2020 Project of the Year Award from Consumers Energy recognizing sustainability practices and projects. 

 


Uzelac Manure drying installation
at Herbuck's Poultry Ranch

Herbrucks Poultry Ranch Solar Array

Cody Herbruck, Senior Manager for Capital Expenses commented, “at Herbruck’s we work hard to reduce our environmental impact, and we’re honored to receive this award for our efforts and would like to thank Consumers Energy for their expertise on efficiency” He added “sustainability is good for business, for Michigan and for the planet, and we’re looking forward to bringing more of these practices and initiatives to all of our facilities.”


 

Canada Addressing Conflicts between Suppliers and Retailers

03/31/2021

The Empire Company Ltd. parent of giant Canadian supermarket chain Sobeys is cooperating with  Food, Health and Consumer Products of Canada, the association representing packaged goods manufacturers to develop a Grocery Supply Code of Practice for Canada.

 

After decades of conflict between retailers and suppliers, both sides recognize the need for stabilization.  The draft code has been submitted to federal and provincial working groups.  The Code would require written agreements between retailers and suppliers, and makes provision for official mediation in the event of complaints or deviation from the Code.

 

Introduction of the Code was obviously stimulated by the problems encountered during the disruption of distribution due to COVID.  Contentious issues include unfair negotiating tactics, arbitrary fees, discrimination against smaller suppliers and farmers.

 

The Code would establish good-faith fair dealing between suppliers and retailers to promote transparency and establish an efficient mechanism to resolve disputes.

 

The initiative in Canada might well prompt a similar approach in the U.S. following statements by the National Grocers Association regarding anticompetitive behavior by big-box club stores and online grocery behemoths concerning supply and prices.


 

AEB To Present 2021 Easter egg To First Lady

03/31/2021

The American Egg Board (AEB) has unveiled the  44th Annual 2021 First Lady's Commemorative Egg a symbolic gift for Dr. Jill Biden and an Easter tradition on behalf of America's egg farmers.

 

Concurrently U.S. egg farmers will collectively donate more than 259,000 cases to food banks in 2021. The record-breaking commitment was shared in conjunction with the 44th annual presentation of the First Lady's Commemorative Egg.

 

In commenting on the 44th Commemorative egg Emily Metz, president and CEO of the AEB stated “this is a cherished springtime tradition celebrating our Nation's first ladies. We are honored to continue that tradition with Dr. Biden this year”

 

The AEB encourages Americans to spread hope this spring by supporting their communities through local food banks.


 

VIV Turkey 2021 to be Postponed to 2023

03/30/2021

According to an announcement issued by HKF Trade Fairs, organizers of the 2021 VIV Turkey Exhibition the event will be rescheduled for June 8th-10th 2023.  The decision was made out of an abundance of caution given the persistence of COVID.


 

USDA to Distribute Funds Under Coronavirus Food Assistance Program

03/29/2021

The USDA has announced approximately $12 billion in CFAP funding for the agricultural sector affected by COVID. 

 

  • $4.5 billion will be designated for crop producers, with an estimated 560,000 recipients at a flat rate of $20 per acre for a wide range of row crops. 
  • $1.1 billion will be allocated to 410,000 livestock farmers
  •  $6 billion will be allocated for new programs.  These include dairy production, the biofuels industry, speciality crops, disadvantaged and minority farmers, conservation activities, organic certification, and forestry. 

Sec. Tom Vilsack

Programs will be developed to reimburse farming companies that supplied PPE to workers.  Special provisions will be made to reduce waste and to distribute perishable food through donations, farm-to-school programs, and communities.  It is anticipated that payments will commence during the first week of April and that previously approved CFAP-1 applications will be automatically honored.  Eligible crop producers will not be required to submit new CFAP-2 applications.


 

Cal-Maine Foods Reports on Q3 FY 2021

03/29/2021

In a press release dated March 29th Cal-Maine Foods (CALM) announced results for the 3rd Quarter of FY 2021 ending February 27th 2021.

 

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


Dolph Baker Chairman and CEO

3rd Quarter Ending

Feb. 27th 2021

Feb. 29th 2020

Difference (%)

Sales:

$359,080

$345,088

+3.9

Gross profit:

$47,517

$49,828

-4.6

Operating income (loss):

$(493)

$5,212

-109.5

Pre-tax income (loss)

Net income (loss)

$11,8321

$13,5483

$18,0492

$13,7714

-34.5

-1.6

Diluted earnings (loss) per share:

$0.28

$0.28

0

Gross Margin (%)

13.2

14.4

-8.3

Operating Margin (%)

(0.1)

1.5

-106.7

Profit (Loss) Margin (%)

3.8

(3.2)

+209.4

Lease obligations:

$1,672

$2,387

-30.0

12 Months Trailing:

Return on Assets (%)

3.8

Return on Equity (%)

6.9

Operating Margin (%)

4.9

Profit Margin (%)

4.7

Total Assets

$1,231,284

$1,206,694

-2.0

Market Capitalization

$1,918,000

Note 1. Additional Income $12.3 million 

  1. Additional Income $12.8 million
  2. Tax Benefit $1.7 million
  3. Tax payment 4.3 million

 

52-Week Range in Share Price: $35.97 to $46.66 50-day Moving average $40.37

Market Close Friday March 26th pre-release $40.51.

Monday March 29th post-release 11H00 $39.39

Trailing P/E 29.4 Beta 0.2

Shares short of float March 15th 20.5 percent.

 

In reviewing the CALM quarterly report the following calculated values* represent key data for the most recent Quarter. (Q3 Fiscal 2020 and percent difference in parentheses):-

  • Dozen shell eggs sold: 279,715,000 (271,277,000 +3.1)
  • Average selling price of all shell eggs: $1.26 per dozen; ($1.25 per dozen; +0.8%).
  • Average selling price of specialty eggs (excluding co-pack) calculated from data released: $1.91 cents per dozen; ($1.91 per dozen; 0%).
  • Average selling price of generic eggs calculated from data released: $1.01 cents per dozen; ($1.04 cents per dozen; -2.9%).
  • Differential between generic and specialty eggs: $0.87 cents per dozen; ($0.90 per dozen; -3.3%)
  • Specialty eggs as a proportion of volume sold: 27.4%; (24.3%; +12.8%)
  • Specialty eggs as a proportion of sales value: 41.5%; (37.2 %; +11.6%)
  • Proportion of eggs sold actually produced by Cal-Maine flocks: 88.7% (88.1% +0.7%;).
  • Feed cost per dozen 46.7 cents (40.6 cents +15.0%)

*Assumes that 98 percent of sales value derived from shell eggs.

 

Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., noted, “we continued to see favorable demand in specialty egg sales. Eggs remain a very popular and inexpensive source of protein, and we strive to provide a favorable product mix of both conventional and specialty eggs for today’s health-conscious consumer.

 

Baker commented on conversion to cage-free housing stating "our goal remains to match our production with the needs of our customers, especially as we prepare for the expected future demand for cage-free eggs. As additional states consider legislation for cage-free requirements, and assuming companies meet their previously stated goals to offer cage-free eggs, the USDA projects that over 70 percent of the U.S. laying flock will need to be in cage-free production by 2026. Since 2008, we have invested $418 million in facilities, equipment, and related operations to expand our cage-free production. We have a strong balance sheet with ample liquidity and access to capital to continue to make the necessary investments in our operations, and we remain focused on having sufficient capacity to meet the needs of our customers with the same exceptional service that is a hallmark of Cal-Maine Foods”.

 

 In commenting on future performance Baker observed, “we expect to see continued price volatility for the remainder of fiscal 2021 as increased export demand for both soybeans and corn is placing pressure on domestic supplies and carryover inventories are projected to be lower. Additionally, the ongoing uncertainties and supply chain disruptions related to the COVID-19 outbreak, weather fluctuations and geopolitical issues will continue to affect market prices for our primary feed ingredients.

 

While we are still facing an uncertain environment due to the ongoing COVID-19 pandemic, continued volatility in feed grain prices, and changes in customer and consumer demand, we look forward to the opportunities ahead for the remainder of fiscal 2021. We believe retail consumer demand for eggs will remain strong; however, it is difficult to predict when restaurants and food service operators will return to pre-pandemic business schedules, and how retail demand will be affected”.

 

Baker concluded “our operations performed well during the third quarter, despite the disruptions from the severe winter weather that affected operations across a significant portion of our footprint in mid-February. Our managers and employees in these locations did an outstanding job in preparing for the storm and managing through challenging conditions with sufficient feed and generator power to continue production with minimal disruptions. We experienced some short-term delays in distribution as many of our customers in these areas were temporarily closed, but we were able to quickly resume normal delivery schedules”.


 

Proposal to Install Solar Panels over California Canals

03/28/2021

A technical feasibility study* published in Nature Sustainability prepared by scientists at the University of California, Merced and Santa Cruz campuses proposes installing solar panels over the 4,000 mile state system of water canals.  It is estimated that the project would save 63 billion gallons of water that evaporates each year and would provide 13 gigawatts of renewable power annually.  Power generated would represent half of the new electrical capacity the State will need by the 2030. Actual solar installations are in operation over canals in India (see image)

 

It is an inconvenient reality that 75 percent of available water is in the northern third of the state of California with the southern two-thirds responsible for 80 percent of consumption.

 

The authors of the paper considered the physical requirements and technical feasibility but not the financial and political restraints. Notwithstanding, profound challenges require bold and innovative solutions.

 

*McKuin, B. et al Energy and Water Co-benefits from Covering Canals with Solar Panels. Nature Sustainability (2021) doi.org/10.1038/s4893-021-00693-8

 


 

Rabobank See Obstacles to Recovery of U.S. Food Service Market

03/28/2021

RaboResearch has prepared a report on the food service sector authored by Maria Castroviejo, Michelle Huang and Amit Sharma, Senior Analysts for Consumer Foods.  The authors consider that COVID-related disruptions will continue to influence food service sales over the intermediate term. 

 

Recovery of the sector will depend on the protection and durability of vaccination, government stimulus and stable costs for ingredients and labor.  The food service industry will face numerous challenges and many businesses will not survive.  Trends that will influence recovery include the cost and convenience of home delivery, continued work-from-home patterns with sustainability and efficiency serving as significant factors influencing long- term transformation of food service.

 


 

Deliveroo IPO a U.K. Disaster

03/28/2021

Deliveroo a U.K.-based food delivery service established eight years ago planned to raise $1.4 billion in an IPO.  Currently Amazon owns 16 percent of the equity following an investment of $580 million in May 2019.

A number of large U.K investment groups  indicated they intended to give ROO a pass prior to the IPO. Apart from the image of the company underpaying their "independent contractors" potential investors balked at the dual-class voting structure for shares offered.

 

In FY 2020 Deliveroo lost $300 million but grew revenue by 54 percent to $1.6 billion, representing a negative profit margin of 18.8 percent. The Company is less than attractive since there is a general perception of exploitation of gig-economy workers. In the event the IPO was poorly received. Despite being priced at $5.40 at the bottom of the previously announced range, ROO finished 26 percent down on the first day of trading.

 

Increased revenue for ROO and its competitors in 2020 was attributed in large measure to COVID-related restrictions and it is uncertain that the trend in increased revenue will continue past mid-2021. Generally none of the delivery services either in the E.U. or the U.S. generates a profit although the emphasis has been on increasing market share and revenue through intense competition based on gig-workers.

 


 

Low Pathogenicity Avian Influenza Detected in San Francisco County LBM

03/28/2021
Surveillance detected an avian influenza H5 strain characterized as low pathogenic in a live bird market (LBM) in San Francisco County on March 24th.

 

 

The isolation has been reported to the OIE in accordance with International obligations, resulting in possible regional exclusions of exports from San Francisco County.  Nations potentially affected will include Japan, Cuba, Columbia, Chile, Peru, UAE and Taiwan.


 

Virtual Egg Mission to Mexico

03/28/2021

USAPEEC will collaborate with the Iowa Egg Council and the vIowa Economic Development Authority to present a virtual trade mission on Wednesday, April 14th.  The intent is to promote the shell egg and egg product capabilities of Iowa to processors, importers and traders in Mexico.

 

For further information contact MCain@usapeec.org.
 


 

Effect of 2021 HPAI in Germany

03/28/2021

A spokesperson for the Central Association of the German Poultry Industry (ZDG) confirmed that for the 2020-2021 highly pathogenic avian influenza period, 1.4 million hens and other poultry were depleted.  This compares with 880,000 birds during the 2016-2017 outbreak.  The infection caused extensive losses in the district of Cloppenburg in the State of Lower Saxony.

 

Since a number of farms growing broilers, layer pullets, and turkey poults have been depopulated and are undergoing decontamination, hatcheries were forced to dispose of unwanted chicks and poults.

 

It is considered significant that the president of the ZDG, Friedich-Otto Ripkey is advocating vaccination as an alternative to depopulation.  This change in approach would be contrary to recommendations of the World Organization of Animal Health (OIE) since in nations where HPAI is not endemic a slaughter-out policy is adopted for any H5 or H7 infection irrespective of pathogenicity.


 

Mink COVID Vaccine Under Development

03/28/2021

Based on high morbidity and mortality in commercial mink farms in the E.U. and the U.S., a number of laboratories are developing COVID vaccines for commercial operations.

 

Zoetis has developed a SARS-CoV-2 vaccine that was used under presumed emergency use authorization for apes at the San Diego Zoo. A concurrent evaluation of the experimental vaccine elicited an antibody response in susceptible mink.

 

Mink-COVID vaccines are also under development in the Russian Federation and the EU.  It will be necessary to demonstrate efficacy and safety before registration. The important issue will be whether immunised mink will serve as reservoirs and disseminators of SARS-CoV-2 since there are both zoonotic and wildlife implications of COVID in the species.


 

EPA to be Guided by Science

03/28/2021

Michal Freedhoff, Acting Assistant Administrator for the Office of Chemical Safety and Pollution Prevention (OCSPP) in the U.S. Environmental Protection Agency (EPA) has issued a memorandum to staff regarding scientific integrity.

 

The change in policy follows revelations that in 2018 the White House directed career scientists at the EPA to alter the risk evaluations of trichloroethylene and also perfluorobutane sulfonic acid (PFBS) one of the "forever chemicals" contaminating water.

 

In her memo, Dr. Freedhoff noted "I affirm my commitment to you to act with scientific integrity".  She added "I expect you to do likewise when working with me and with each other".  Freedhoff now encourages scientists at EPA to openly discuss scientific opinions, point out errors when necessary and respect the world of science and risk assessment.

 

Her memorandum included this statement, "I expect an environment led in the first instance by OCSPP managers where everyone feels comfortable identifying errors, asking questions and expressing differing scientific opinions, all without fear either of retaliation or being denigrated for speaking up".

 

Currently the EPA faces litigation over dicamba registration that was granted following overt intervention.  Political appointees at the EPA directed career staff to use only a limited data set of effects and to discount specific studies and information on negative impacts.  The interference was documented and led to the Ninth Circuit Court of Appeals vacating registrations for three herbicides.


 

USDA Investing in Rural Healthcare

03/28/2021

In a March 23rd release, the United States Department of Agriculture (USDA) announced investment of $266 million to upgrade health resources in rural areas of 16 states and Puerto Rico.  Funds will support improvements in facilities and emergency response services.  Justin Maxson the Undersecretary of Agriculture for Rural Development stated, “the Biden-Harris Administration has made beating the COVID-19 pandemic and restoring the economy a top priority and USDA is playing a critical role.”  He added, “the investments announced today will spur community development and build sound infrastructure like hospitals and medical facilities to help rural America build back better and stronger.” 

 

Facilities in rural areas will apply funds to renovate and expand clinics and install outreach, medical and dental services.  Applications were received from municipalities, non-profit organizations, Native American tribes and rural counties with populations less than 20,000.

 

Given the scope and purpose of the funding it is questioned whether the USDA should be the responsible Federal Department or alternatively should the program be administered by the Department of Health and Human Services.

 


 

SARS-CoV-2 Infects Buccal Cells

03/27/2021

It is now apparent that SARS-CoV-2 responsible for COVID-19 is a pantropic virus affecting many organ systems and tissues.  Recent research conducted by the National Institute of Dental and Craniofacial Research of the NIH, in collaboration with the University of North Carolina, Chapel Hill demonstrated that the virus infects cells lining the mouth.  Accordingly saliva is a reliable medium to diagnose COVID-19.  Virus in saliva is also derived from nasal drainage and the bronchial and lung expectorate. 

 

Scientists recovered virus from the salivary glands of deceased patients and confirmed that cells were actively making new copies of virus in material isolated from a living patient.  The saliva of both asymptomatic and symptomatic patients is infectious.

 

*Huang, N et al SARS-CoV-2 infection of the oral cavity and saliva.  major medicine March 25, 2021 DOI:10.1038/s41591-021-01296-8


 

Outbreak of Norovirus in Idaho

03/27/2021

Public health officials in Idaho have identified an outbreak of norovirus associated with a Subway restaurant in Canyon County. Approximately 25 customers of the store reported gastrointestinal symptoms of short duration commencing Friday March 19th.

 

According to preliminary press reports, the facility "followed all guidance and recommendations".  It is possible that a worker handling food ingredients or sandwiches could have been responsible for the outbreak through procedural deficiencies with respect to gloving and hand washing. The investigation of source will include an examination of workers.


 

Innovative Nanoparticle-Based Influenza Vaccine

03/27/2021

Research teams at the University of Washington School of Medicine and The Vaccine Research Center of the National Institute of Allergy and Infectious Diseases (NIAID) have developed an innovative influenza vaccine.  The technology allows arrangement of a series of hemagglutinin (HA) antigens in an array on a nanoparticle.

 

Initial animal studies have demonstrated that the immunogenicity of the nanoparticle vaccine is equivalent to the protection provided by current quadrivalent products.

 

In animal trials including mice, ferrets, and non-human primates, the nanoparticle vaccine stimulated an antibody response to a range of viruses not included in the mosaic nanoparticle formulation.  These included avian influenza H5N1 and H7N9 which are regarded as zoonotic and a potential pandemic threat.

 

Dr. Daniel Ellis of the University of Washington noted "the response that our vaccine gives against strain-matched viruses is really strong and the additional coverage we saw against mismatched strains could lower the risk of a bad flu season." Ellis observed "each year the World Health Organization makes a bet on which four strains will be most prevalent, but those predictions can be more or less accurate.  That is why we often end up with mismatched flu shots that are still helpful but only partly effective,"

 

It is hoped that the nanoparticle technology will be applied to developing influenza vaccines for commercial avian species to provide a broader spectrum of protection than current inactivated emulsion vaccines.


 

USDA Supports Research Benefitting Small and Medium-Sized Farms

03/26/2021

In a March 23rd press release, the USDA announced 24 grants to 20 institutions by the National Institute of Food and Agriculture.  The total value of grants will be $11.5 million with most allocations in the region of $500,000.

 

The University of Connecticut, Storrs CT will receive $500,000 for a study entitled “A Comprehensive Probiotic-Based Approach for Promote Layer Performance, Layer Health, and Egg Safety for Small and Mid-Sized Farms.” 

 

The University of Rhode Island, Kingston, RI. Will receive  $200,000 for a project “Developing Evidence-Based Handling Guidelines for Improving the Safety of Free-Range Poultry Eggs”

 

Other topics funded involved small-scale beef production, hemp cultivation, establishing marketing chains, farm successions, antimicrobial stewardship programs, and benefiting from natural resources. 

 

 

It is hoped that small-scale farmers will ultimately benefit from the grants.  Certainly young faculty at Land-grant universities will receive funding to support applied research with student stipends that will ultimately contribute to the wellbeing of U.S. agriculture.


 

SCOTUS to Hear Case on Union Access to Workers

03/26/2021

The Supreme Court of the United States will hear arguments in the Cedar Point Nursery case concerning the right of union organizers to enter private property. In 2015, recruiters for the United Farm Workers Union attempted to meet with workers on strawberry fields owned by Cedar Point Nursery.

 

According to a California law enacted in 1975, union organizers are permitted to meet with workers an hour before and an hour after termination of work and during the lunch period on farm property.

 

Representatives of California Growers are now challenging the law and wish to deny union organizers their current limited right of access characterized as “mass trespass and effectively an unconstitutional taking of property”.  The Cedar Point Nursery incident was investigated by the California Agricultural Labor Relations Board that concluded that there had been no violation and dismissed the complaint.

 

The California Union Access Law was enacted to allow unions to organize seasonal farm workers who are highly mobile and follow demand for labor to harvest crops.  Growers maintain that direct access is no longer necessary given social media.  This contention is not entirely valid given the mobility and poverty of seasonal agricultural workers.

 


 

U.K. to Relax Avian Influenza Prevention

03/26/2021

At the end of March, the U.K. Department of the Environment, Food, and Regional Affairs (equivalent to USDA) will lift existing requirements to confine flocks to houses.  The Avian Influenza Prevention Zone and mandatory biosecurity measures will however be retained.  Farmers will be able to release birds to pasture on April 1st based on a perceived lower risk of infection.  The Animal and Plant Health Agency placed restrictions on outside access on December 14th 2020.

 

Dr. Aimee Mahony, Chief Poultry Advisor to the National Farmers’ Union, stated “It will be a great relief to farmers with free-range flocks that have had to house their birds for over three months due to these government-imposed measures and they will be pleased that they can once again give their birds access to the outside range area.”  Dr. Mahony stated “It is still incredibly important that everyone who keeps birds remains vigilant and continues to follow enhanced biosecurity measures.”  

 

The decision by authorities in the U.K was made in the face of continued reports of isolation of avian influenza virus from free-living birds  although incidence rates among commercial poultry in France and Germany have fallen in past weeks. Notwithstanding the decision to allow outside access for flocks, the U.K. Animal and Plant health Agency reported an outbreak of H5N8 on a broiler farm in Staffordshire. A turkey breeder farm near Chester was diagnosed with an H5N3 LPAI strain presumably on routine surveillance in a facility operated at a high level of biosecurity

 

How effective biosecurity can be achieved using free-range management has yet to be established.


 

Albertsons Companies Aims for 20 Percent of Sales to be Online

03/26/2021

Addressing a Citigroup analyst conference, Albertsons Companies’ President and CEO, Vivek Sankaran commented that 10 percent of sales are now through E-commerce with an eventual goal of 20 percent.  Following the emergence of COVID, Albertsons rapidly rolled out curbside pickup with 1,400 locations using the company ‘Drive Up & Go’ platform.  It is anticipated that 1,800 installations will be complete before the end of 2021 together with two-hour deliveries in urban markets.

 


Vivek Sankaran CEO

As evidenced by how little Albertsons was involved in E-commerce, gains in excess of 230 percent were recorded for the first through the third quarters of FY 2020 covering February through December 2020.

 

To support ‘Drive Up & Go’, Albertsons has established micro-fulfillment centers with the first two at Safeway supermarkets in south San Francisco and San Jose, CA.  The company has acquired software and other resources from Takeoff Technologies and it is anticipated that seven micro-fulfillment centers will be established in 2021.  In population-dense areas, a micro- fulfillment center can serve up to ten stores.  A short delivery radius is essential for effective operation of micro-fulfillment centers especially if the company promotes a two-hour delivery service.


 

STOP PRESS

03/25/2021

Grounding of the Ever Green in the Suez Canal Will Have Severe Repercussions

 

Given that the Suez Canal will be blocked for “many days if not weeks” there will be repercussions to the World economy and ultimately the U.S. The canal carries 12 percent of all ocean trade. Lloyds estimate the cost at $400 million per hour. The impact is evidenced by the fact that out of 150 stranded vessels 40 are bulk carriers and 35 container ships. Pity the live animals on stranded transport vessels.

 

The Ever Given is grounded diagonally across the canal at bow and stern. Without careful salvage the weight of 20,000 containers could break her back resulting in a catastrophe with long-term implications.

 


 

Snap Benefits Increased Through September 2021

03/25/2021

In a March 23rd release, the USDA announced a 15 percent increase in Supplemental Nutrition Assistance Program (SNAP) benefits extending through September 2021.  The $3.5 billion required to fund the increase was derived from the American Rescue Plan. It is estimated that the increase will provide $28 more per person per month over and above existing benefits.

 

In commenting on the increase, Secretary of Agriculture, Tom Vilsack (image right) stated, "the American Rescue Plan brings help to those hurting the most due to the pandemic.  It increases SNAP benefits to households and puts food on the table.  It invests in working people in small towns and small businesses to get the economy back on track".


 

Alltech Launches Acutia Human Nutrition Segment

03/25/2021

Alltech is applying 40 years of scientific innovation and expertise to human health.  Acutia, a wholly owned subsidiary of Alltech will produce supplements to enhance nutrition and improve long-term wellness.

 

Dr. Mark Lyons, president and CEO of Altech stated, "Acutia is a natural extension of our business, allowing us to directly support people in their pursuit of improve wellness.  In a time when we are all deeply aware the importance of our health this launch is particularly meaningful."  Initial products will include an Acutia selenium supplement providing antioxidant benefits and essential nutrition.  An Acutia digestive health product will be available later in 2021.

 


Dr. Mark Lyons CEO Alltech

The Late Dr. Pearse Lyons Founder of Alltech

Acutia was initiated by Nikki Putnam-Badding, RD. as a concept developed through the Alltech internal incubator program now the Pearse Lyons Incubator. Acutia represents the continuation of a legacy of innovation established by Dr. Pearse Lyons, the late founder of Alltech. It was his ambition to develop dietary supplements for humans based on Sel-Plex® and Bio-Mos® two of Alltech flagship organic nutrition products. 


 

Target to Vacate Minneapolis Downtown Office Space

03/24/2021

The effect of COVID on businesses is clearly illustrated by the decision by Target Corporation to move office workers from approximately one million square feet of office space in downtown Minneapolis buildings including the 51-story City Center where they were the major tenant.

 

Work-from-home has confirmed the productivity of white-collar workers and management obviating the need for offices in a central location.

 

In the future many Target workers displaced from downtown Minneapolis buildings will either continue to work from home or be located in existing Target facilities in Nicollet Mall or at the Brooklyn Park Campus.  It is estimated that 3,500 Target employees were housed in the City Center building.

 


 

Egg Week

03/24/2021

USDA Weekly Egg Price and Inventory Report, March 24th 2021.

  • Shell inventory was up by 2.8 percent, following a gain of 4.6 percent increase last week. The trend over four weeks confirms increased demand relative to supply with implications for prices extending past the middle of March leading into the April 2nd Easter weekend. Buyers are purchasing in quantity to fill the pipeline before Easter and to preempt subsequent price rises. It is noted that a large number of molted hens continue to return to production. Prices for Extra Large and Large in the Midwest were unchanged this past week and expected to stabilize or fall moderately with lower post-Easter demand with mild oversupply contributing to excess inventory. There is some prospect of a return of the food service sector as liquid and dried-egg prices rise with reopening of the economy despite a plateau in the recent decrease in COVID-19 incidence rates in many regions, offset by optimism over more rapid deployment of vaccine.
  • The U.S. flock in production was up 0.4 million from the week of March 17th to 322.9 million, with about 3.0 million molted hens resuming production within weeks. The Industry has demonstrated beneficial restraint in flock placement.
  • The USDA average Midwest benchmark generic prices for Extra-large and Large sizes were unchanged from the previous week at averages of 135.5 and 133.5 cents per dozen. Mediums were up 3.8 percent at an average of 110.5 cents per dozen. The recent rise in prices reflects increased demand countered by a moderate increase in the U.S. flock in production. Broad demand from retail is evident as pipelines are refilled and food service is restored moving towards Easter. The increase in inventory over three successive weeks and a slowing of the trajectory in the rise in Midwest prices to stability this past week is however of concern.
  • The Midwest price for breaking stock was down by 4.4 percent to an average of 67.5 cents per dozen. Checks in the Midwest were 1.6 percent higher to 62.0 cents per dozen.

 

OVERVIEW

Prices

According to the USDA Egg Market News Reports released on March 22nd 2021 the Midwest wholesale prices for Extra-large and Large sizes were unchanged on average from the previous week as delivered to DCs, attaining 135.5 and 132.5 cents per dozen respectively. Mediums were up 3.8 percent to an average of 110.5 cents per dozen reflecting a stable supply from young flocks that have now matured. Prices should be compared with the USDA benchmark average 6-Region blended nest-run, (excluding provisions for packing and transport) cost of 71.1 cents per dozen in February 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The March 22nd 2021 edition of the USDA Egg Market News Report (Vol. 68: No. 12) documented a USDA Combined Region value rounded to the nearest cent, of $1.44 per dozen delivered to warehouses for the week ending March 19th 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.34 per dozen. At the high end of the range, price in the South Central Region attained $1.51 per dozen. The USDA Combined Price last week was almost the same as the 3-year average and about 40 cents per dozen above the corresponding week in 2020.

 

Flock Size

According to the USDA the number of producing hens reflecting March 24th (rounded to 0.1 million) was up 0.4 million to 322.9 million. If USDA data is accurate, the producing flock contains molted hens now coming back into production with approximately 5.0 million pullets reaching maturity during the week, offset by flock depletion. The hen population producing eggs is in balance relative to seasonal consumer demand but is depressed by lower industrial and food service off-take. Any number of hens above a range of 315 to 320 million hens in production in late March portends lower than average prices and increased inventory, unless matched by proportional increases in demand. Prices have stabilized despite pre-Easter demand and are following the 3-year average.


 


U.S. Review of the AstraZeneca COVID Vaccine Reveals Inconsistency in Data

03/24/2021

According to an AstraZeneca release on March 22nd, trials conducted in the U.S., Chile and Peru apparently demonstrated 79 percent efficacy in preventing symptomatic infection with SARS-COV-2 virus. The trial involved 32,000 participants with 20,000 receiving the vaccine and 10,000 serving as controls. According to the submission to the NIH –NIAID Data Safety Monitoring Board (DSMB) none of the volunteers receiving the vaccine developed severe symptoms or required hospitalization. The vaccine subjects comprised 79 percent Caucasian, 8 percent African American, 5 percent Hispanic, 4 percent Asian and 4 percent Native American.

 

The submission of data to the DSMB did not include the most recent month relating to the trial. Accordingly the reviewers requested complete data that when included in an analysis reduced the efficacy of the vaccine to a range of 69 to 75 percent from the initially claimed 79 percent. The omission created the impression that AstraZeneca had knowingly “cherry picked” trial data for the U.S. submission. The DSMB took the unusual step of releasing the letter expressing concern relating to incomplete data suggesting a lack of faith in the Company. Obviously the DSMB and the FDA review committee will be stringent in their evaluation of AstraZeneca data. 

 

Even if Emergency Use Authorization is granted by the FDA it is doubtful whether the product will be marketed in the U.S. There will be sufficient Pfizer, Moderna and Johnson & Johnson vaccines for the U.S. population willing to receive one of the three products. 

 

Administration of the AstraZeneca vaccine was suspended for a short period in many European nations during mid-March due to the apparent occurrence of blood clots in some recipients.  After evaluation, it was determined that there was no statistical evidence of causation between the vaccine and the vascular manifestation. 

 

The AstraZeneca vaccine is administered in two doses one month apart.  Since the vaccine can be stored, transported and held at refrigeration temperature it will be widely used in developing countries avoiding the logistic restraints associated with the ultra-low temperature requirements for the two mRNA products.

 

Commenting on the results as claimed in the press release, Dr. Ashisa Jha, Dean of the Brown University School of Public Health noted, “If you were rooting for global vaccination this is a good morning.”

 


 

Determining when COVID Emerged in Hubei Province

03/24/2021

Anecdotal reports that COVID was present in Hubei Province are based on the occurrence of atypical pneumonia during early December 2019. Epidemiologists affiliated with the University of California, San Diego conducted a study on available case data to develop a model to ascertain when the infection first emerged*.  Their technique involved application of a ‘Bayesian molecular clock phylogenetic study’ to ascertain the emergence of the most recent common ancestor of sample strains of SARS-CoV-2.  This approach was combined with forward epidemiological simulations to ascertain how long the virus circulated before it was detected. It was determined that the first case of infection with SARS-COV-2 in Hubei Province occurred between mid-October and mid-November 2019. 

 

It is postulated that the first virus moving from an animal reservoir to humans was of relatively low infectivity and pathogenicity and was not readily recognized.  They calculated that over 70 percent of SARS-COV-2 zoonotic events would have been self-limiting and would not have resulted in an epidemic.

 

By December 2019 when the infection was recognized as a novel condition in Wuhan the virus was well established in the population and could have undergone mutation to become more infectious and virulent.

The authors stressed the implications of any delay in recognizing the emergence of any novel virus in relation to emerging zoonotic infections.

 

* Pekar, J. et al. Timing the SARS-CoV-2 index case in Hubei Province. Science March 18 2021. DOI: 10.1126/science.abf8003.


 

Eat Just Raises $200 Million

03/24/2021

Josh Tetrick, co-founder and CEO of Eat Just has announced that the company raised $200 million in a round led by the Qatar Investment Authority with private investment from Charlesbank Capital Partners and Vulcan Capital. 

 

Since inception in 2011, Companies founded by Josh Tetrick, through various iterations, have raised $650 million in venture capital.

 

Investment will be used to accelerate research and development, brand development in international markets and to expand production.


 

Court Rules on the Organic Eligibility of Hydroponic Vegetables

03/24/2021
Judge Richard Seeborg, Chief District Judge of the U.S. District Court in San Francisco has ruled that vegetables grown applying hydroponic technology can be certified under the Organic Food Production Act subject to adherence to all applicable regulations.

 

 

The Center for Food Safety challenged the USDA Organic certification of products cultivated using hydroponic technology. Purists have maintained for two decades that products should not be certified as Organic unless they were grown in soil. 

 

The Coalition for Sustainable Organics supporting hydroponic certification commented, “The decision is a major victory for producers and consumers working together to make organics more accessible and the supply more resilient.” Currently hydroponic technology is used to produce berries, tomatoes, cucumbers, mushrooms, leafy greens, sprouts, herbs and microgreens.

 

The U.S. District Court opinion relating to hydroponics will probably have future relevance as opponents of intensive egg production have campaigned against in-line Organic aviary operations with access to sun porches but no contact with “soil”.  The nebulous concept of ‘soil’ is intended to restrict the scale of organic production with obvious financial benefit to those devising and interpreting rules for Organic certification that will restrict production.

 

Proponents of organic production should embrace all technologies and systems that fall within the scope of the Organic Food Production Act and should not create barriers to alternative systems that provide advantages in terms of sustainability, volume of production and enhanced food safety.


 

USAPEEC Mexico to Present Webinars Promoting U.S. Eggs

03/23/2021

The 2021 cycle of training seminars organized by the USAPEEC, referred to as “Huevinars” will resume in April.  The online programs will be presented in Spanish and are directed to industry professionals involved in the food industry.  A series of experts will provide information on eggs and egg products to promote consumption.

 

Previous programs attract upwards of 50 attendees in the bakery and food service industries in Mexico.  Information is available at <www.usapeec.org.mx/event-details>.


 

Agricon Fire-Resistant Construction

03/23/2021

Agricon undertakes construction for intensive livestock production incorporating rigid standards of safety and fire prevention.  Agricon has completed projects in the U.S., France, Poland, Malaysia, Brazil, China and the Philippines.  Engineering expertise extends from individual buildings to large complexes and includes project design through construction. 

 

With current concern over fires in both recently constructed and older buildings, Agricon designs fire resistance into their projects.  Agricon buildings are constructed of steel and incorporate insulated metal panels that resist fire.  Individual panels which may be damaged in a fire or other event can be removed and replaced.  A fire in a conventional house using wooden structural components and flammable panels will represent a total loss.  Steel structures and non-flammable panels mitigate fire damage and allow repair and replacement of equipment and installations. This reduces the time required to resume production and limits consequential losses.


 

Philadelphia Wholesale Produce Market Official Charged with Misappropriation

03/23/2021

The Office of the U.S. Department of Justice for the Eastern District of Pennsylvania has charged Caesar DiCrecchio of stealing more than $7.8 million from the Philadelphia Produce Market over several years before he was fired in 2018.  He is charged with wire fraud, conspiracy, money laundering, identity theft, and tax evasion and faces 100 years in prison and a substantial fine.  In commenting on the arraignment, Michael J. Driscoll, special agent in charge of the FBI Philadelphia Division, stated “Stealing business funds for personal use is fraud, plain and simple, and anyone padding their paycheck like this can expect a whole lot of attention from the FBI.”

According to information released by the office of the U.S. Attorney, DiCrecchio played fast and loose with the bank account of the Philadelphia Produce Market raising false payments, skimming cash, operating kickback schemes, and padding expenses. According to the indictment DiCrecchio apparently operated the utility as a personal piggy bank


Caesar "Sonny" DiCrecchio

 

The market is a major source of fresh fruit and vegetables for the mid-Atlantic region and is now under professional management with a new board.  It is difficult to imagine how the president of a public utility could misappropriate millions of dollars over many years without detection.  The activities of DiCrecchio suggest complicit accountants, negligent auditing, and a compliant board.


 

PMSI Thermal Event Response and Fire Mitigation

03/23/2021

Following a series of fires resulting in the destruction of one or more houses on a complex, PMSI has developed their Thermal Event Response and Mitigation (ThERM) technology to respond to an outbreak of a fire.  ThERM involves installation of a network of sensors that will detect a fire and respond through the PMSI Command 111e controller to inactivate fans, identify the area involved and initiate a series of pre-selected alarms indicating a thermal event in progress.

 

The electronic sequence of detection and response will be active 24-7 and will provide a higher level of security and avoid the direct and consequential losses of a conflagration.

Additional information on ThERM can be accessed from the PMSI website by clicking on to the PMSI logo on the right side of the Welcome page.

 

Additional information is available at<pmsi.cc/products/therm>

 


 

House Fires Increasing in Frequency and Cost

03/23/2021

EGG-NEWS has recently reported on fires in both pullet rearing and laying complexes.  The frequency of events and the escalating magnitude of losses is of concern to all stakeholders.  The traditional high-rise house erected during the 1990s contained 120,000 to 200,000 hens.  New multi-level aviary units house on average 300,000 hens.  Since fires usually destroy at least one building, losses in structures, equipment, installations and flocks have increased the size of claims.. This fact will not escape the insurance industry that will most certainly be re-evaluating risks and rates. Consequential losses including interruption of business and loss of markets are sadditional losses following a fire.

 

Most barn fires are caused by an electrical fault. Dust in poorly constructed electrical panels and in  rooms with high-voltage installations, often with stored inflammable material will contribute to the likelyhood of a fire extending to the entire building.  In rural areas, standard electrical codes are frequently ignored especially if untrained electricians are responsible for installations.  The delay between an outbreak of a fire and detection, especially at night, inevitably results in extensive spread from the initial source whether an overheated fan or an electrical panel, resulting in loss of at least one building.  New multi-level aviary units are considerably higher than older high-rise units.  Unless inter-house spacing is increased proportionally to height, the risk of spread from a burning house to adjoining buildings is increased as evidenced by recent events involving two to three adjacent houses on a complex.

 

Despite the risk of fire and consequential losses, many new houses are constructed with that extensive use of wood, pressboard, and inflammable panels.  The lack of installations to suppress a fire hampers first responders that frequently are unable to control a fire after their arrival. Their activities are then directed to saving adjoining houses or in some cases in-line packing plants.  Many complexes equipped with manure belt systems or aviaries have erected manure storage barns.  These structures are susceptible to spontaneous combustion and if located adjacent to production buildings may result in extensive loss. 

 

Given the requirements of insurance companies in the future, fire prevention and suppression modalities will be required to obtain coverage. Approaches to the design  of complexes to limit damage from fire will include:-

 

  • Establishing appropriate distances between houses based on the height of buildings
  • Removal of foliage from the vicinity of houses that could be a source of a fire
  • Ensuring that electrical installations conform to acceptable UL codes
  • Reducing or eliminating inflammable material in the construction of houses
  • Installation of fire-detection sensors and alarm systems
  • Providing sufficient available water on site for first responders
  • Cooperation with local municipal and volunteer fire companies to plan a response to a fire including location of water and other resources

 

Companion postings on PMSI fire detection and response installations and Agricon fire-resistant buildings denote progress in reducing the risk and consequences of fires in pullet and laying houses.

 

 


 

Amazon Fresh Store Proposed for Long Island

03/21/2021

Industry observers suggest that an Amazon Fresh store will be located on Long Island in Plainview, NY.  The unit would occupy a vacated Fairway market store in Manetto Hill Plaza.  During November 2020, Amazon announced that it would open an Amazon Fresh store in a vacated Fairway Market in Woodland Park, NJ.

 

The prototype Woodlands Hills, CA. store opened in August 2020 features Amazon Dash carts and Amazon Echo Show linked to Alexa.

 

It would appear that Amazon will promote Amazon Fresh stores and is ignoring the Whole Foods Market brand as a medium to increase grocery sales through both brick and mortar and E-commerce platforms.


Amazon Fresh Store. California

 

Shift from Online Delivery to Store Pickup

03/21/2021

The Brick Meets Click/Mercatus Grocery Shopping Survey showed a February swing from January for online orders with home delivery to online orders with pickup. Online grocery sales attained $8 billion in February, approximately 14 percent lower than in January.  In contrast, the pickup volume increased to $6.1 billion representing 75 percent of all online grocery sales.  Total active online grocery users fell to 60 million in February with the highest proportion of non-participants in the over-sixty age group.  It is possible that this demographic having been vaccinated is now returning to in-person shopping after a year of COVID confinement. 

 

Average order value for online home grocery purchases rose four percent in February compared to January with the pickup segment averaging $82 in February.  The average order value for ship-to-home orders increased by 11 percent in February with the pickup orders growing at one percent compared to January.  This survey determined that 58 percent of households were satisfied with delivery and pickup fir their online orders.


 

Utah Adopts Cage-Free Mandate

03/21/2021

Utah Senate Bill 147 signed by Governor Spencer Cox will require hens to be housed in accordance with UEP requirements effective January 1, 2025.  The law effectively bans conventional cages and the requirements imposed, conform to similar standards mandated in other states either by ballot or legislation.

 

The largest complex in Utah owned by Cal-Maine Foods in Delta has been converted to cage-free housing.


Caption Utah State Capitol

 

Singapore Recalls Imported Eggs over SE

03/20/2021

The Straits Times has reported that the Singapore Food Agency has recalled eggs imported from Malaysia following detection of Salmonella Enteritidis.  The eggs were supplied by the Lay Hong Bhd. Farm and Linggi Agriculture Bhd. Four importers are now obligated to recall eggs bearing the specific farm codes imprinted by jet printer.  According to the news item, the pathogen was isolated from shells since eggs are unwashed, although it is unclear whether SE was obtained from egg contents.

 

The Domestic Trade and Consumers Affairs Ministry of Malaysia is apparently monitoring the situation and assessing the impact on egg supply to the domestic market in collaboration with the Veterinary Services Department and Health Ministry of Malaysia.


Dep. Minister Datuk Nawi of Malasia
Claims Implicated Farm Free of SE

 

Labor Disputes Continue at Argentine Export Port

03/19/2021

Previously CHICK-NEWS has commented on the labor unrest in the Argentine port hub of Rosario and at soybean crushing plants in the vicinity.  In December 2020, unions representing oilseed plant employees, grain inspectors and port workers staged a 20-day strike for higher wages and benefits.  A 24-hour strike was called for Friday March19th suggesting that negotiations to resolve the December issue are still of concern to workers.

 

The continuing labor unrest is a direct result of the high inflation rate in Argentina attributed to mismanagement of the economy by a socialist government. This situation has established a cycle of strikes, increased wages and then further disruptions with subsequent demands for higher remuneration. 

 

Prolonged interruption of either soybean crushing in San Larenzo or disruption of shipping from Rosario impacts world prices for soybeans, soybean meal and oil. This has an effect on world prices ultimately increasing the cost of production for poultry and livestock in the U.S.


 

HatchTech to Establish New Corporate Headquarters

03/18/2021

HatchTech has unveiled plans for a new corporate building to be located in their home city of Veenendaal.  Construction will commence mid-2020 with occupancy in the spring of 2022.

 

The project will bring together under one roof research and design, project engineering and marketing. Hatch-Tech management challenged the architect to design a building suitable to the mission of the Company and benefitting both customers and employees.  The structure will include a showroom and areas for training.  Employees provided input on their future home and the architect was cognizant of environmental harmony and sustainability in the selection of construction materials and installations.

 

CEO, Tjitze Meter stated, "as we lay the foundation of our new headquarters, we are also laying the foundation to build on further stable growth for our company and our agri-food industry".  Meter added, "the new building will offer the creative inspiring environment that is essential to facilitate innovation and progress.

 

Joost ter Heerdt, CCO stated, "an important part of the building is dedicated to research and product engineering, I like to think of it as a place where our developers and engineers feel the liberty and opportunity to develop, create and test innovations".


 

Sandra Eskin Named Deputy Undersecretary for Food Safety

03/18/2021

Sandra Eskin, an attorney by profession, has been named USDA Deputy Undersecretary for Food Safety.  She joined USDA from the Pew Charitable Trust where she was the Project Director for Food Safety.  Previously Ms. Eskin held positions with the Federal government as a staff attorney and was affiliated with the Consumer Federation of America.  Ms. Eskin was involved in the Produce Safety Project at Georgetown University. She has served on Federal advisory committees including the USDA National Advisory Committee on Meat and Poultry Inspection and the CDC Food Safety Modernization Act working group.


Sandra Eskins

 

Medical Face Masks Beneficial in Preventing Transmission of Respiratory Viral Diseases

03/18/2021

A review of available literature demonstrated the benefit of medical face masks in preventing transmission of SARS, influenza and COVID-19.  The study involved a meta-analysis of twelve primary publications. 

 

The authors concluded that medical face masks should be mandated for healthy individuals to prevent transmission of respiratory infections.  The efficacy of medical face masks to reduce the incidence rate of respiratory infections depends on compliance.  Medical face masks should be used in combination with other preventive modalities including hand washing, social distancing and PPE.  Medical face masks are superior to cloth but if purpose-manufactured masks are unavailable, cloth covering is recommended in community settings but requiring a high level of compliance.

 

*Chaabna, K.et al Face mask using community settings to prevent respiratory infection transmission: A rapid review and meta-analysis International Journal of Infectious Diseases 104:198-206 DOI:.org/10.016/j.ijid.22.09.1434

 


 

Sanovo Case Pro Packer®

03/18/2021

Sanovo has introduced the innovative Case Packer Pro® designed for diverse markets. Features of the Case Packer Pro® include:-

  • Flexibility - based on a study of egg packs in the U.S., the EU and Asia, the Case Packer Pro® can handle packs of 4 to 8 eggs wide and 16 eggs long with the possibility of additional customization. The multi-functional grip head is adaptable to handling a range of cases and cartons.
  • Reliability and functionality - the Case Packer Pro® incorporates standard components and can be serviced using standard tools, reducing downtime and service costs.
  • Compatibility with available graders - the Case Packer Pro® can be integrated with most commercially available graders and is not limited to Sanovo equipment

 


 

Unilever Addresses Disposal of Plastic Packaging

03/18/2021

It is estimated that Unilever North America generates 59,000 tons of waste plastic packaging annually.  The company has committed to reducing consumption of virgin plastic by half by 2025. Unilever will source only reusable, recyclable or compostable material and will incorporate 25 percent recycled plastic in packaging by mid-decade.

 

On Monday, March 15th, Unilever announced a $15 million investment in the Closed Loop Partners fund to recycle 60,000 metric tons of U.S. plastic packaging waste annually by 2025. The investment will help source plastic supply for Unilever brands and access recycled feedstock from other companies.

 

Unilever is working actively with agencies in North America to establish responsible legislation to increase investment credits for recycling.


 

Herbruck Brothers Receive MSU Award

03/18/2021

Stephen Herbruck, CEO and Board Chairman, Greg Herbruck, president and Harry “Herb” Herbruck, Director and Executive Vice President of Operations, were the recipients of the 2021 Distinguished Service Award from the Michigan State University College of Agriculture and Natural Resources.


In accepting the award Stephen Herbruck commented “the agricultural industry has a profound impact on our local communities and economy, and we dedicate a lot of time and resources to making sure we’re caring for our communities, employees and hens because it’s the right thing to do.”


Greg Herbruck stated “we are honored to receive the Distinguished Service Award,” He added “at Herbruck’s we work hard to demonstrate our company’s core values, serving our employees and our hens, as well as contributing to our local communities.”


Marilyn Herbruck in 1958
when she and Harry farmed 3,000 hens

Harry Herbruck noted “we are motivated by our responsibility to employees, customers and consumers, and aim to continuously innovate and reach a higher standard in our industry,” He added “We are humbled to receive the Distinguished Service Award from MSU and to be recognized for our contributions to agriculture and natural resources in Michigan,” 


Herbruck’s Poultry Ranch is a fourth-generation family enterprise that was established over 60 years ago. The Saranac-based farm is the 10th largest egg producer in the U.S. with locations in Michigan, Indiana and Pennsylvania. Herbruck’s has more than 10 million hens, and produces 245 million dozen eggs annually.
 


 

FSIS Webinar on Egg Products

03/18/2021

On Monday, March 22nd, the FSIS will host a public webinar on impacts of the Egg Products Inspection Regulations Final Rule on import and export programs. The webinar to be presented from 14H00 to 16H00 EDT, will be of interest to U.S. egg product industry members.

 

Pre-registration is required to receive a join-link, dial-in number, access code and unique Attendee ID for the webinar. The webinar will also be recorded.



Registration details are available from the AEB <info@aeb.org>

 

Click here for more info and registration.

 


 

Egg Week

03/18/2021

USDA Weekly Egg Price and Inventory Report, March 18th 2021.

 

  • Shell inventory was up by 4.6 percent, following a gain of 3.3 percent increase last week. The trend over three weeks confirms increased demand relative to supply with implications for prices extending past the middle of March leading into the April 2nd Easter weekend. Buyers are purchasing in quantity to fill the pipeline before Easter and to preempt subsequent price rises. It is noted that a large number of molted hens continue to return to production. Prices for Extra Large and Large in the Midwest were higher this past week but expected to stabilize or rise moderately unless oversupply contributes to excess inventory. There is some prospect of a return of the food service sector as liquid and dried-egg prices rise with reopening of the economy despite a plateau in the recent decrease in COVID-19 incidence rates in many regions, offset by optimism over more rapid deployment of vaccine.
  • The U.S. flock in production was up 0.2 million from the week of March 10th to 322.35 million, with about 3.0 million molted hens resuming production within weeks. The Industry has demonstrated beneficial restraint in flock placement.
  • The USDA average Midwest benchmark generic prices for Extra-large and Large sizes were 8.9 percent above the previous week at averages of 135.5 and 133.5 cents per dozen. Mediums were up 12.6 percent at an average of 106.5 cents per dozen. The recent rise in prices reflects increased demand countered by a moderate increase in the U.S. flock in production. Broad demand from retail is evident as pipelines are refilled and food service is restored moving towards Easter. The increase in inventory over two successive weeks and a slowing in the trajectory of the rise in Midwest prices is however of concern.
  • The Midwest price for breaking stock was up by 4.4 percent to an average of 70.5 cents per dozen. Checks in the Midwest were 10.9 percent higher to 61.0 cents per dozen.

 

OVERVIEW

 

Prices

According to the USDA Egg Market News Reports released on March 15th 2021 the Midwest wholesale prices for Extra-large and Large sizes were 8.9 percent higher on average from the previous week as delivered to DCs, attaining 135.5 and 132.5 cents per dozen respectively. Mediums were up 12.6 percent to an average of 106.5 cents per dozen reflecting a stable supply from young flocks that have now matured. Prices should be compared with the USDA benchmark average 6-Region blended nest-run, (excluding provisions for packing and transport) cost of 71.1 cents per dozen in February 2021. The progression of prices during 2021 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The March 15th 2021 edition of the USDA Egg Market News Report (Vol. 68: No. 11) documented a USDA Combined Region value rounded to the nearest cent, of $1.33 per dozen delivered to warehouses for the week ending March 12th 2021. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.23 per dozen. At the high end of the range, price in the South Central Region attained $1.33 per dozen. The USDA Combined Price last week was almost the same as the 3-year average and about 10 cents per dozen above the corresponding week in 2020.


 


University of Michigan Consumer Sentiment Index Up in March

03/17/2021

The University of Michigan Consumer Sentiment Index rose from 76.8 in February to 83.0 in mid-March.  According to Richard Curtin, Chief Economist of the University of Michigan Surveys of Consumers, gains were widespread across all income groups and regions of the U.S.  Understandably gains in sentiment rose higher among the bottom third of wage earners and among the elderly.  Dr. Curtin noted, "overall the data indicates strong growth in consumer spending during the year ahead with largest percentage gains for services including travel and restaurants".  Reopening of the economy and especially restaurants, schools, universities and increased travel will benefit the poultry industry with increased consumption of chicken and eggs.


 

U.S. and the European Union Conclude Negotiations on Trade

03/17/2021

In anticipation of the announced exit of the U.K. from the European Union, negotiations to establish agricultural quotas were initiated almost two years ago within the framework of the World Trade Organization. An agreement concluded last week covers beef, poultry, rice, dairy products and wine.  The purpose of the bilateral discussions was to divide quotas between the EU 27 and the U.K. based on historical trade flows.

 

The E.U. Commissioner of Agriculture Janusz Wojciehowski stated, "I am particularly pleased that this agreement marks the significance of our trade and economic relationship.  The agreement preserves the original volumes that is shared among the E.U. and the U.K. and provides stability to trade in markets.

 

The European Commission will refer the agreement to the European Council and the European Parliament to be ratified.


 

Vaxxinova® Announces Approval of Vaxxon® SRP® Pasteurella Vaccine

03/17/2021

Dr. Jim Sandstrom

Vaxxinova® U.S., (formerly Epitopix) has announced USDA approval of Vaxxon® SRP® Pasteurella vaccine.  The product is an effective, innovative and safe vaccine against fowl cholera in chickens.  The product is especially usefully for long-term protection of broiler breeders.  In efficacy studies the vaccine was totally protective against mortality following challenge with USDA reference strain X-73.  No adverse reactions were observed in an extensive field study with broiler breeders.

 

According to Dr. Jim Sandstrom, Managing Director of Vaxxinova U.S., “Vaxxon SRP Pasteurella vaccine uses innovative SRP technology.  The lipopolysaccharides (LPS) that function as endotoxinsendotoxins are removed from the vaccine, and the key siderophore receptor proteins serve as immunogens, stimulating both cellular and humoral immune response.”  Sandstrom added, “In addition, the removal of the LPS reduces the risk for adverse effects commonly observed with whole-cell bacterins.”

 

For additional information on Vaxxon SRP® Pasteurella click on to company logo on the right side of the welcome page or access www.vaxxinova.us.com



 

Bipartisan Farm to School Act of 2021 Introduced

03/17/2021

H.R. 1768, entitled the “Farm to School Act of 2021” is intended to support both schools, farmers and communities to recover from the impact of COVID-19.  The intent of funding will be to provide farms operated by veterans and the socially disadvantage to have a competitive opportunity to supply schools with agricultural products.  The Bill is supported by the National Farm to School Network and the National Sustainable Agriculture Coalition.

 


 

The Role of WTO in Suppressing COVID

03/17/2021

The newly appointed Director General of the World Trade Organization (WTO) Dr. Ngozi Okonjo-Iweala has aspirations to use the Organization to help in the international response to COVID.  This relates to her serving as the Chair of GAVI, an agency financing vaccines for nations in need. 

 

At issue are WTO restrictions on medical supplies and PPE.  A number of members of the WTO have proposed limits on barriers to trade in pandemic related products.  Intellectual, property rules are regarded as an obstruction to effective control. South Africa has encountered problems in sourcing materials for test kits.  It is understood that under extraordinary circumstances, the agreement on Trade Related Aspects of Intellectual Property Rights allows concessions for critically required health-related products.

 

In addition to the immediate problems of COVID, Dr. Okonjo-Iweala is investigating a long-term program to allow WTO to be more flexible in response to future pandemics.



Dr. Okonjo-Iwela

 


 

Emmanuel Faber Exits Danone

03/17/2021

On February 3rd, EGG-NEWS announced a restructuring of the management of Danone with Emmanuel Faber relinquishing the position of CEO to become the Non-Executive Chairman.  Within the past week, it was announced that he exited the company. The Board regarded Faber as "more interested in saving the planet then saving his firm" as noted in The Economist, February 20th edition.

 

The Board has appointed Veronique Penchienati-Bosetta, currently CEO of Danone International and Shane Grant, CEO of Danone North America to be interim joint CEOs until a permanent CEO is appointed.  Gilles Schnepp will serve as Chairman of the Board.


Emmanuel Faber

 

Faber was originally selected as CEO by Franck Riboud, the son of the co-founder of the company.  The Board became disillusioned with Faber as share price fell and Nestle and Unilever made gains in market penetration and growth.  Problems at Danone were compounded in 2017 when the company overpaid for WhiteWave, a U.S. producer of natural foods for health conscious consumers.  Despite the $12.5 billion price tag, the acquisition did not fulfill expectations. A further problem affecting Danone was that since the advent of COVID the company has suffered a loss in sales of Evian and similar brands of bottled water that were impacted by closure of restaurants and bars.  The Danone dairy business has suffered from falling birth rates and a disinclination to drink dairy milk.

 

Danone is regarded as an enterprise a mission, a corporation with a declared social purpose.  The Government of France is not expected to intervene to defend against a potential foreign buyer since the reorganization and change in management appears to be confined to Le Republique.


 

Third Circuit Appeals Court Upholds Prior Decision on Processed Egg Products Antitrust Litigation

03/17/2021

In an opinion filed March 15th 2021, the United States Court of Appeals for the Third Circuit upheld the decision of the United States District Court for the Eastern District of Pennsylvania denying an appeal by a group of supermarkets against Rose Acre Farms, United Egg Producers Inc. and United States Egg Marketers Inc. 

 

Effectively the three-judge panel rejected the appellants contention that jury instructions were incorrect and ruled that the jury verdict was valid. Also on the basis of precedent, the UEP Certified Program was not “manifestly anticompetitive” and the previous judgement was affirmed to the benefit of Rose Acre Farms and the UEP.


 

Projected U.S. Flock Housing, Capacities and Capital Investment for Egg Production Required Through 2025

03/16/2021

During the past few weeks articles have appeared citing the projected number of hens to be housed under diverse systems by 2025. Various estimates have been made concerning capital cost to achieve conversion adequate to satisfy presumed customer requirements and state mandates. From a review of the fragmentary data and statements it would appear that there is an unrealistic overestimate of the number of hens in cage-free systems by January 2025.

 

Guestimates of the expenditure required to attain the assumed projected capacity by 2025 are optimistically understated. Figures quoted are presumed to be based on back-of-the envelope calculations and anticipate conversion of existing houses and complexes. In reality the global costs for conversion will include pullet housing, site development, infrastructure and services for a number of new complexes. The restructuring that has occurred and will continue will also require additional feed mills, packing and breaking plants and ancillary installations. 

 

Many existing high-rise houses are unsuitable for conversion to aviary installations, accepted to be the predominant housing system for egg-producing flocks over the proximal decade. Superficial projections of capital investment ignore the reality that a number of new complexes will be required. This will entail buildings and equipment both of which are escalating with designs becoming more complex to achieve efficiency, sustainability and acceptable standards of biosecurity, environmental compliance, worker safety and flock welfare. 

 

Contrary to commitments by the food retail, institutional and service segments of the customer base in the late 2000s it is the opinion of many in the industry that complete conversion from caged housing will not take place by 2025. The prevailing sentiment is incorporated into this projection of required housing by type and market segment including shell and liquid production.

 

Many complexes built in the early to mid-2000s were equipped with enrichable cages. These units were erected as an insurance strategy in anticipation of a federal Egg Bill that was never enacted. Some of these complexes might be converted to enriched colony modules that were originally accepted by joint agreement between the UEP and the HSUS. Their continued use subsequent to 2025 will be subject to acceptance by customers and consumers and then only in states without a cage-free production and sales mandate.

 

The situation regarding hen numbers and housing systems at the end of 2020 is indicated in Figure 1. The corresponding figures allowing for conversion incorporate diversification among alternative systems with expansion, reflecting projected flock sizes for 2025.

 

A low compound annual rate of expansion of two percent for the shell-egg market was assumed given the moderate overproduction that exists and the anticipated rate of recovery of the economy following COVID. Figure 2 depicts expansion in the egg-liquid segment that will be restrained by moderate demand and limited opportunities for export given significant world competition.

 

The capital requirement for the projected expansion and conversion is projected in Figure 3. specifying values for alternative housing systems for shell-eggs and in Figure 4 for liquid-egg production.

 

In addition to housing required for hens, expansion through 2025 will require additional pullet housing, packing plants and feed production. Unit values are specified reflecting costs incorporating an annual escalation of five percent from current values. Projections of cost are based on trends in building and equipment incorporating inflation and progressive complexity dictated by efficiency and sustainability. The projection of capital cost does not include land, employee accommodation, vehicles and assumes availability of road and rail access and available site water and power.

 

Fig. 1. Current 2020 and Projected 2025 U.S. Hen Population for the Shell Segment (million)

Housing System

2020 (pre-COVID)

2025 (with 2% p.a. compound growth)

Caged Total

144

30

Alternatives to Cages

Aviary

Barn

Pasture

50

28

2

176

40

4

Non-Caged Subtotal

80

220

All Systems

224

250

 

Fig. 2. Current 2020 and Projected 2025 U.S. Hen Population For The Liquid Segment

(million)

Housing System

2020 (pre-COVID)

2025 (with 2% p.a. compound growth)

All Systems

96

100

Caged

91

80

 

Fig. 3. Capital Requirements For Shell Egg Segment by 2025

Aviaries (176m-50m) 126 million hen places:

75 million @ $36 conversion

101 million @ $66 new

$Billion

$2.700

$6.700

Floor Systems (40m-28m) 12 million hen places @ $35

$0.420

Pasture Systems (4m-2m) 2 million hens places @ $40

$0.080

Cage Upgrades 30million hen places @ $10

$0.300

Subtotal Shell-Egg Hen Housing

$10.200

 

Fig. 4. Capital Requirements For Liquid Segment by 2025

Aviaries (20-5)

15 million hen places

@ $66

$0.990

Cage Upgrades

85 million hen places

@ $10

$0.850

Subtotal Liquid Egg Hen Housing

$1.800

 

Fig. 5 Capital Requirements For Additional Pullet Rearing

Pullets required {(127m+30m) = 157/3m} 52 million @$60

$3.120

Capital Requirement for Live Bird Housing

$15.120 Billion

Capital Requirement for Packing Plants

15 units with 2-million hen capacity @ $30 million

$0.450

Capital Requirement for Feed Mixing

3,600 tons per day – 10 plants @ $25 million

$0.250

CAPITAL REQUIREMENT FOR BOTH EXPANSION

AND CONVERSION BY 2025 - Grand Total

$15.820 Billion

Projecting capital investment for conversion and expansion of the two segments of the U.S. industry predicates realistic assumptions concerning the complement of producing hens and alternative systems of housing to be required by 2025. The forecast of hen numbers is obviously a question of informed estimation. The projection of costs based on flock size for housing systems is based on current estimates with appropriate escalation. The comprehensive figure of $15.8 billion incorporates the reality that expansion and conversion will require not only a change in housing but a fairly substantial restructuring of current production with consolidation and operation of new complexes.


 








































































































































































































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