Egg Industry News


Food Manufacturers Commit to Reducing Plastic in Packaging

01/20/2020

Nestle, an influential multinational food manufacturer has committed $2 billion to develop alternatives to current plastic for packaging food. Nestle hopes to reduce and eventually eliminate single-use plastic currently representing approximately 1.9 million tons annually with only two percent manufactured from recycled stock.

 

Most multinationals have pledged to recycle plastic and to use alternative materials. Proctor and Gamble has a goal of halving fossil-based plastic by 2030. Unilever plan to reduce plastic packaging from fossil fuels by half before the end of 2025.

The use of multi-layered packaging film combining aluminum and plastic, as used in the food industry, represents a challenge to recycling plants.

 

It is evident that consumers are demanding recycling and alternatives to fossil-derived plastic. This has had an impact on legislators worldwide characterized by banning single-use plastic bags. The entire recycling industry in the EU and the U.S. was thrown into disarray in 2018 when China altered its policy on importation of scrap plastic to be recycled in plants that generated environmental contamination and became economically infeasible.


 

Incredible Branding Rolls Out on Sauder's Trucks

01/20/2020

Sauder’s Eggs of Lititz, PA. is taking The Incredible Egg “How Do You Like Your Eggs?” campaign on the road with gorgeous new truck graphics. The graphics create moving billboards that attract attention.

 

Information on obtaining truck graphics is available from Sue Coyle  scoyle@aeb.org.


 

Ben and Jerry’s Amend Labeling Following Lawsuit

01/19/2020

Ben and Jerry’s is deleting a “happy cows” claim on all packaging.  This action follows a decision by the District of Columbia Superior Court to reject a motion to dismiss a lawsuit brought by the Organic Consumers Association in July 2018.  Ben and Jerry’s claimed that milk for their ice cream was from “happy cows” participating in a Caring Dairy program with high standards of welfare and environmental compliance.  In fact, only a proportion of milk used to prepare the iconic brand was derived under the program. The remainder was purchased from conventional commercial sources constituting the potential of misrepresentation in packaging.

The company finessed the change mandated by the lawsuit as a redesign of packaging to comply with FDA nutrition facts labeling.

It is obvious that organizations opposed to intensive livestock production including eggs will be constantly monitoring packaging.  Depictions of hens on pasture on packs of “cage-free” flocks confined to barns will come under scrutiny since they are misleading.  The situation could be improved if the industry would adopt a standard nomenclature for housing systems, possibly then to be approved by USDA-AMS to ensure a level playing field for all producers.


 

Self-Cleaning Plastic Wrap Developed for Foods in Canada

01/18/2020

Scientist at McMaster University in Canada have developed a non-stick wrap that is resistant to adhesion by bacteria.  The product could have application in the food industry and in health care facilities.  The wrap is both repellent to bacteria and inhibits formation of biofilms. The formulation incorporates a chemical treatment that suppresses bacterial proliferation.

The wrap has yet to attract a partner capable of commercializing the product.


 

Deployment of In-Store Robots Expanding

01/17/2020

Walmart Stores activated the first Bossa Nova robot in 2016 to roam aisles and monitor stock levels.  NCR Corp. has worked closely with Walmart to develop self-checkout kiosks and will service the units.  The advantages of robots are self-evident as almost half of activities in stores currently carried out by workers (“associates”) can be mechanized.

 

Robots are now being used by Albertsons on an experimental basis. Schnucks, Giant Eagle and Stop and Shop with competing features.  A spokesperson for Walmart noted that robots have traveled almost 50,000 miles in a million aisles and scanned 500 million products.  Predictably supermarket workers are concerned over automation and refer to robots as “job stealers”.


 

Quick Service Restaurants Benefited From Increased December Sales

01/17/2020

The NPD Group reported that quick service restaurants experienced a three percent gain in transactions during December 2019 attributed to the need for convenience and speed during the holiday season.  In contrast, casual dining transactions were down two percent and mid-scale family dining restaurants reported static sales compared to December 2018. 

 

David Portalatin of NPD noted “family dining benefited from holiday vacations during the period from Christmas to the New Year, with their biggest boost in transactions in that week”.


 

Eggo Disney Frozen II Homestyle Waffles

01/17/2020

Kellogg’s Eggo brand waffles feature impressed images of popular characters from the film and are made with REAL eggs as a primary ingredient.


 

Budd Bentley Appointed President of Poultry Management Systems Inc.

01/17/2020

Budd Bently has been appointed as president of PMSI. He has a long and productive career in the automotive industry and is experienced in remote monitoring and telematics. Mr. Bentley earned a BS in Mechanical Engineering from Kettering University and a Master’s Degree in Engineering Management from Western Michigan University.

 

PMSI is a leader in computer controls, electrical panels, and general production automation for egg production. The company operates independently of sister companies within the Big Dutchman group.

 


 

Target Reports Disappointing Holiday Sales

01/17/2020

On January 15th, Target announced that same store sales during November and December were up 1.4 percent compared with 5.7 percent for the pre-Christmas period in 2018. Despite the low growth rate, the company will achieve previous guidance for the last quarter of 2019.

 

In commenting on sales, Brian Cornell, CEO, stated, “We faced challenges throughout November and December in key seasonal merchandise categories.” He added, “Because of the durability of our business model, we are maintaining our guidance for our fourth quarter earnings per share.”

 

Food and beverage sales were up three percent from the period November 1st through December 24th, while home items were down one percent. Apparel and electronics were up five percent and six percent respectively.


 

Albertsons IPO in the Future?

01/17/2020

Cerberus Capital Management, the controlling shareholder of Albertsons, will decide within weeks whether to file for an IPO after updating documentation with the Securities and Exchange Commission. It is noted that in 2015 an attempt was made to take the company public after a merger with Safeway. The process was also initiated in 2018 following a non-completed merger with Rite Aid Corp.

 

During the past year, CEO Vivek Sankaran, hired from PepsiCo., has improved metrics with increased same-store sales growth and developing online delivery and pickup. Albertsons has benefited from their Own Brands portfolio including Lucerne, Organics and Signature that collectively exceed $1 billion in sales. In commenting on third-quarter earnings with improved operating results. Sankaran noted “We are focused on providing our customers with an easy shopping experience, exciting merchandise, and friendly customer service in our Omni Channel shopping environment. The most recent Q3 FY 2020 financial report for Albertsons can be retrieved by entering ‘Albertsons’ in the SEARCH block.


 

Walmart Indian Subsidiary Facing Antitrust Probe

01/16/2020

Flipkart Purchased by Walmart for $16 billion in 2018 is the subject of a probe by the Competition Commission of India.

The Government of India has initiated action against both Amazon.com Inc. and Flipkart claiming violation of competition laws that were enacted after the Walmart purchase preventing direct sale to consumers.

The Government is blatantly protectionist with respect to local on-line retailers that now have advantages against competition from foreign-owned competitors. In 2018 Google was fined $19 million for an alleged abuse of competition rules.

Despite the expectations for a rational market with the advent of Prime Minister Narendra Modi the reality is that India remains an inhospitable environment for foreign investors given the socialist-inclined bureaucracy, inherent xenophobia and a chaotic and corrupt legal system.

 


Flipkart Fulfillment Center

 

NPIP 45th Biennial Conference

01/16/2020

According to a circular from Dr. Elena Behnke, Senior Coordinator of the National Poultry Improvement Plan, the 45th NPIP Biennial Conference will be held in Providence, RI. August 25th to 27th 2020.  Registration for the Conference is now open by accessing <www.poultryimprovement.org> “Biennial Conference 2020.”  The Biennial Conference tab includes instructions for submission of proposals and registration and hotel information.

 

 

 

 

 

 

 

 

 

 

An informal Stakeholder Meeting will take place at IPPE on Wednesday, January 29, 2020 from 09h00 to 11h00 in Room C208 of the GWCC.


 

Special Report: What is Included in the U.S. China Phase-One Agreement?

01/16/2020

Phase-One of an presumed comprehensive trade agreement between the U.S and China was signed yesterday in Washington. The compromise followed a prolonged period of negotiations punctuated by mutual imposition of successive tariffs and alternating threats and accommodations. The questions circulating in media involve issues such as:-

· Is the U.S. better off in trade relations with China following Phase-One rather than the status quo in 2017 or a comprehensive 'Grand Deal' promised by the Administration?

· Did the end result justify costs borne by farmers, manufacturers and consumers over 20 months?

· Did the Administration achieve objectives promised in pre- and post-election rhetoric?

· Which of the parties lost or gained more than their adversary?

A significant take-away from the most recent events starting with an international meeting in October 2019 and thereafter has been the difference in the tone and claims by Washington and Beijing. This is still carrying over to the events of January 15th especially with regard to agricultural imports. The White House maintains that China will purchase up to $50 million in agriculture commodities over a two -year period. The chief negotiator for China, Vice-premier Liu He stated that "agricultural purchases would not come at the expense of other nations". This implies that China will continue to import commodities in accordance with their requirements and at prevailing world prices, allowing Brazil and Argentina to compete with U.S. in supplying soybeans, the largest single commodity imported by China.

In assessing the scope of Phase-one from media disclosures, it is evident that the following provisions are included:-

Poultry Imports from the U.S.

Although the magnitude of agricultural imports is in question, it is evident that China has removed unjust restrictions on the importation of U.S. rice, chicken and dairy products. to the Politically significant corn and soybean farmers in the Midwest are apparently back to pre-2018 status only if China actually imports quantities of commodities as anticipated by the Administration. China will no longer use contrived barriers against importation and will abide by WTO and OIE regulations with respect to chicken and turkey products. Although the broiler industry appears to have scored a victory with the prospect of exporting leg quarters there is always the presumption that China may demand reciprocal import of white meat by the U.S. This is unlikely at present with ongoing African swine fever but the issue will arise when the disease is controlled and herds have been restored to 2017 levels. It is not credible that China will import egg products as the nation is more than self-sufficient, being the World's largest producer.

Imports of Merchandise from the U.S.

Beijing will increase imports of manufactured goods and purchase services by an additional $200 billion annually over the next two years, based on 2017 values.

Structural Issues

China has agreed to recognize the integrity of intellectual property. This was a long-standing and major point of contention. The Phase-One Agreement includes obligations by China but it is unknown whether the Nation will in fact abide by their commitments given a preoccupation with the Made in China 2025 initiative. Concern over compliance is the reason for the U.S to retain some tariffs as leverage. China has removed obstacles to U.S. finance and banking institutions and providers of services to allow a U.S. presence in China. The situation with regard to Huawei has yet to be resolved.

Relaxation of Tariffs

The U.S. will halve the 15 percent tariff on approximately $120 billion in imports from China. The U.S. is holding in abeyance a tariff of 15 percent on imports to the value of $156 billion due to have been introduced in mid-December 2019. A 25 percent tariff will remain on $250 billion in annual imports from China.

Dispute Resolution

China and the U.S. have agreed on procedures to resolve complaints by U.S. businesses entering into joint-venture arrangements with partners in China. China has agreed not to devalue its currency and in return the U.S. has removed China from the list of currency manipulators.

Critics note that neither subsidies to state-owned enterprises nor cybersecurity are included in the current Phase-One Agreement although these issues will be referred to the WTO. Comments on the Phase-one agreement suggest that it lacks specificity with respect to patents and intellectual property especially with regard to biologics and pharmaceuticals.

Both parties have the right to impose additional punitive tariffs in the event of non-compliance or alternatively to withdraw from the Agreement. The concordance of objectives leading to the Phase-One agreement is obviously based on mutual acceptability of the provisions negotiated at great length, requiring diplomacy, knowledge and patience on both sides.

Although the agreement was presented as being between equals, it is evident that China has made more concessions, if in fact they intend to follow through with protection of intellectual property and other structural issues that initiated the dispute. China was only induced to make changes following economic hardship arising from successive imposition of tariffs.

The Phase-One agreement is not perfect and obviously will not satisfy all stakeholders. The ink is not yet dry but already the agreement has engendered criticism influenced by political considerations. The challenge will be the next stage loosely termed Phase-Two. Although negotiations will be initiated within days of signing this first agreement, the issues are so profound to the economies of both nations that a rapid resolution is unlikely. The President has indicated that a Phase-Two agreement may only be possible after the 2020 election. This belies the 2018 declaration that "trade wars are easy to win and are short".

 


 

Updated USDA Projections for 2018 and 2019 U.S. Egg Production

01/16/2020

The USDA Economic Research Service issued an updated forecast of egg production on January16th 2020 updating the previous December 16th 2019 report. The volume of eggs produced and per capita consumption in 2019 were increased by 3.1 and 2.1 percent respectively compared to 2018 data. The discrepancy represents over-production and hence lower prices. The benchmark New York price was accordingly reduced by 31.9 percent in unit value. Production data reflecting 2016 and 2017 should be compared to 2015, impacted by the Spring outbreak of HPAI in the upper-Midwest. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to forecast volume of production. The latest data is reflected in the table below:-

 

 

Parameter

2015

(actual)

2016

(actual)

2017

(actual)

2018 2019 Difference % 2020

(actual) (forecast) 2018 to 2019 (projection)

 

 

EGGS

       
 

Production (m. dozen)

6,938*

7,437

7,755

7,952 8,200 +3.1% 8,300

 

Consumption (eggs per capita)

255.8*

272.0

279.9

284.0 289.9 +2.1% 293.3

New York price (c/doz.)

182*

86

101

138 94 -31.9% 95.5

                   

Source: Livestock, Dairy and Poultry Outlook -January16th 2020

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices and related industry statistics.


 

STOP PRESS

01/16/2020

UMCA Approved by Senate

 

Following the 385-41 vote in the House in late December the Senate approved the revised USMCA by a bipartisan 89-10 vote yesterday and sent to the desk of the President for his signature. The agreement will now have to be approved by the Parliament of Canada before replacement of NAFTA the intention of all three nations.

 

The passage of the USMCA will benefit both the agricultural and industrial sectors of the economy and will generate new job opportunities and trade.


 

Position Announcement

01/16/2020

PMSI, a member Company of the Big Dutchman Group and a leader in electronic control and monitoring installations has a vacancy for a Sales Account Manager for the region West of the Rockies in the U.S. and Canada. 

 

The successful candidates should have appropriate technical and sales experience and will be required to reside in the region and travel to existing and potential clients.

 

PMSI offers a competitive salary and benefits and is an Equal Opportunity Employer

 

Applications with a detailed CV should be addressed to <HR@pmsi.cc>


 

Egg Week

01/15/2020

USDA Weekly Egg Price and Inventory Report, January 16th 2020.

  • Hen numbers in production unchanged at 336.7 million .
  • Shell inventory down by 7.0 percent after a 4.7 percent increase last week reflecting purchases by chains to refill depleted stock.
  • USDA Midwest benchmark generic prices for Extra large and Large down 15.2 percent on average to 62.5 and 60.5 cents per dozen. Mediums were down 5.2 percent to 54.5 cents per dozen. Market has probably bottomed.
  • Price of breaking stock down 7.5 percent to 24.5 cents per dozen. Checks down 10.7 percent to 12.5 cents per dozen reflecting shell-egg prices. Both categories are now substantially below the USDA November benchmark nest-run production cost.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on January 13 th 2020 the Midwest wholesale prices for Extra Large and Large as delivered to DCs were down 15.0 and 15.4 percent respectively to 62.5 and 60.5 cents per dozen. Mediums were 5.2 percent lower at 54.5 cents per dozen reflecting a restoration of balance from young flocks. Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 59.9 cents per dozen in December 2019, (excluding provisions for packing and transport). The progression of prices during 2018-2020 is depicted in the USDA chart reflecting three years of data, updated weekly.

The January13th 2020 USDA Egg Market News Report (Vol. 67: No. 02) documented a USDA Combined Region value rounded to the nearest cent, of $0.80 per dozen delivered to warehouses for the week ending January 7th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.72 per dozen. At the high end of the range, price in the South Central Region attained $0.86 per dozen. The USDA Combined Price last week was 26 cents per dozen below the three-year average of $1.10 per dozen and 39 cents per dozen below the price during the corresponding week in 2019.


 


Extent of Interstate Movement of Fighting Cocks Revealed

01/14/2020

Effective December 20th, a Federal law banned organized animal fighting in all states and territories. Since 2007 it has been illegal to transport animals between states or territories for the purpose of fighting.

 

It now emerges that breeders of fighting cocks in the U.S. are shipping birds to Guam and Puerto Rico where cockfighting is prevalent.

 

The Animal Wellness Foundation documented 500 illegal shipments of fighting birds to Guam involving 9,000 birds in a 33 month period. Birds were shipped by 71 consigners located in Oklahoma, California, Hawaii, North Carolina, and Alabama. The top five shippers apparently accounted for 50 percent of the consignments.

 

The scope and frequency of shipments as documented, confirm the magnitude of cockfighting in the U.S. with attendant risks to the poultry industry. Apart from the welfare and moral issue of cockfighting, shipment of birds across state lines into territories, and more importantly, the reverse, provides opportunities to transmit both catastrophic and erosive diseases.

 

Pressure is now being placed on the Governor of Guam to take action in compliance with Federal law.


 

Egg Monthly

01/14/2020

Review of December 2019 Production Costs and Statistics.

  • December 2019 USDA ex-farm blended nest-run benchmark price was 81 cents per dozen or 24.2 percent lower than in November 2019 at 106.8 cents per dozen. Higher price during early December was consistent with seasonal purchase trends but was moderated in extent and duration by oversupply.
  • December 2019 USDA average nest-run production cost was 0.1 cent per dozen higher than November 2019 at 59.9 cents per dozen.
  • December 2019 USDA benchmark nest-run margin attained a positive value of 21.1 cents per dozen compared to a positive margin of 47.0 cents per dozen in November.
  • November national flock ( over 30,000 hens/farm) was up 4.2 million or 1.3 percent to 323.7 million.
  • November pullet chick hatch was down 8.1 percent from October to 23.9 million.
  • November exports of shell eggs and products were down 16.9 percent to 795,800 case equivalents representing the theoretical production of 10.8 million hens.

 

INTRODUCTION.

Summary tables for the latest USDA December 2019 prices and flock statistics made available by the EIC on January 14th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous December 6th 2019 posting reflecting November 2019 cost and production data.


 


Further Information on Wuhan Coronavirus Outbreak

01/14/2020

Science posted an interview with Dr. Xu Jianguo, head of an evaluation committee advising the Government of China on the recent coronavirus outbreak in the city of Wuhan.

According to Dr. Xu, a new coronavirus distinct from those responsible for SARS and MERS was isolated from 15 out of 34 patients with clinical signs of pneumonia and respiratory distress.  The original presumptive total of 59 patients was based on clinical evaluation. 

 

The World Health organization has requested sequence data for the new coronavirus strain. This information would be applied to expedite the preparation of diagnostic reagents required if the infection extends from the present focus.  Although the government of China has in this instance demonstrated transparency, a decision to release sequence data will be the responsibility of the directorship of the Chinese Center for Disease Control and Prevention.  The head of the Institute Dr. George Gao has not responded to requests concerning release of data.

 

Epidemiologists have not identified the source of the coronavirus that has characteristics similar to viruses isolated from bats.  The Wuhan Market implicated in the outbreak is still closed, although the status of the seafood, animals, reptiles and other food delicacies is unknown.

 

At this time, it appears that the Wuhan coronavirus outbreak is limited in geographic and temporal extent.  This said, authorities may be suppressing information especially in view of the fast approaching Lunar New Year holiday commencing January 25th when approximately one quarter of the population of China will be in transit using air travel, buses and especially trains.

 

The incident is of concern since it is yet another example of a coronavirus of animals becoming adapted to humans.  Fortunately, it does not appear that human-to-human transmission has occurred although contacts of the infected patients have been either quarantined or subject to surveillance.


 

China Central Bank Boosting Economy

01/13/2020

On New Year’s Day the Central Bank of China announced that bank holdings would be relaxed and the Institution released $115 billion in funding for industrial enterprises.  The move by the Central Bank follows a call for support by Premier Li Keqiang.  Economists note that there is a seasonal requirement for liquidity prior to the Lunar New Year holiday commencing on January 25th.

 

The relaxation of bank reserves and release of liquidity probably reflects a declining economy especially affecting housing and construction.  The increased availability of funds will definitely benefit state-owned construction companies since lower rates will improve returns.

 

The action by the Central Bank represents a confirmation of a major complaint by the U.S. and the E.U. that quasi-government enterprises in China receive support to the detriment of companies in nations with free-market economies.


Central Bank of China

 

China Central Bank Discount Rate 2008 - present


 

Darling Ingredients Acquires EnviroFlight

01/13/2020

Darling Ingredients acquired the 50 percent interest in EnviroFlight owned by Intrexon Corp. thereby becoming the sole owner. EnviroFlight developed technology to rear black soldier-fly (Hermetia illucens) larvae on a commercial scale.  The Maysville, KY plant can produce 900 tons of dried larvae annually.  Although EnviroFlight has demonstrated the nutritional value and safety of its product it is yet to attain approval from regulatory agencies to include the ingredient in animal feed.

 

Commenting on the acquisition, Russ Randall C. Stuewe, CEO of Darling Ingredients stated, “Our purpose is to repurpose and grow for specialty feed ingredients to produce more useable protein compared to algae and conventional crops.”

Dr. Liz Koutsos, president of EnviroFlight noted, “We have focused on driving necessary changes in the global food supply chain to meet the demands of growing population and we look forward to working more closely with Darling Ingredients to realize the considerable promise of insect bioconversion.”


 

AI Expands in Poland

01/13/2020

Following reports of H5N8 strain avian influenza in turkeys, authorities in Poland have diagnosed the same strain in egg producing flocks.  In addition to a farm close to the turkey outbreaks, chickens have been affected in the Lubelskie, and Wielkopolskie regions.  It is apparent that there is a high concentration of poultry farms in the Lubelskie region with the prospect of further cases emerging.

 

Biosecurity has been intensified but given the season and previous history, further outbreaks can be expected if migratory waterfowl are shedding the virus.

 

Unlike previous years outbreaks in 2020 involve H5N8 strain that is potentially transmissible to humans under conditions that have not been clearly defined.


 

High Plains Farmers Facing Dilemma over 2020 Planting

01/13/2020

With no specific details of the Phase-1 agreement with China, farmers are contemplating their selection of crops for 2020.  The trade war seriously impacted soybean acreage harvested down 15.0 percent from 2018 to 75.0 million acres in 2019.  Sorghum was planted on 5.3 million acres down 8 percent from 2018.  Both crops are heavily dependent on imports from China to achieve profitability.  Farmers are anticipating an extension of the Market Facilitation Program that involved transfer of approximately $28 billion from public funds to farmers over 2018 and 2019.  The USDA has yet to decide on future payments but a prominent farmer was quoted as stating, “If the government doesn’t pay us we’re done.” 

 

According to Reuters, farmers are favoring corn over soybeans with their early seed orders, weary of commitments by China to import soybeans and cognizant of the reduced demand independent of trade disputes following the advent of African swine fever.  China has also reduced imports of cotton from the U.S. and has established alternative suppliers for soybean including Brazil and Argentina. 

 

Some farmers are evaluating alternatives to corn and soybeans with one Iowa farmer sowing winter wheat and rye.  He was quoted by Reuters as stating, “The agriculture system is completely broken because of the trade war, severe weather, and mounting farm debt.  We just have to farm smarter.”


 

Further Recalls Due to Listeria Contamination

01/13/2020

Fresh Location Inc. of Tennessee is recording protein snack trays containing hard cooked peeled eggs distributed widely in the southeast.  The snack trays contain a hard-cooked egg, cheese, grapes and crackers.  The eggs were supplied by the Georgia plant that has been temporarily closed as a result of Listeria contamination detected by traceback from cases in 2017 and 2019.

 

Since production ceased in the plant during mid-December and products have been recalled, no additional cases of listeriosis have been recorded.


 

Contaminated Apple-Packing Plants Potentially Involved in Listeria Infection

01/13/2020

A recent study conducted by a research group at the University of Michigan* demonstrated the prevalence of Listeria monocytogenes both on apples and the environment of the packing plant.  Among three fruit packing facilities sampled, one had significantly high levels of Listeria monocytogenes.

In evaluating the reasons for the differences among packing plants, the scientist determined that biofilms on food contacts surfaces promoted the proliferation and persistence of Listeria. Research demonstrated that Pseudomonas spp. are responsible for biofilms that protect Listeria from decontamination. The knowledge gained from the investigation will be applied to developing more effective methods to reduce Listeria contamination in food packing plants.

The findings will also be of value for plants producing other foods including cold cuts and in relation to recent events, hard-cooked peeled eggs.

*Tan, X. et al. The occurrence of Listeria monocytogenes is associated with built environment microbiota in three tree-fruit processing facilities.  Microbiome. 7: article 115 [2019]

 


 

Export of Shell Eggs and Products January-November 2019.

01/12/2020

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first eleven months of 2019 with the corresponding period in 2018:-

PRODUCT

Jan.-Nov. 2018

Jan.-Nov. 2019

Difference

Shell Eggs

     

Volume (m. dozen)

110.9

134.2

+23.3 (+21.0%)

Value ($ million)

120.0

105.6

-14.4 (-12.0%)

Unit Value ($/dozen)

1.08

0.79

-0.29 (-26.9%)

Egg Products

 

 

 

Volume (metric tons)

28,921

29,581

-660 (-2.3%)

Value ($ million)

101.7

90.6

-11.1 (-10.9%)

Unit Value ($/metric ton)

3,516

3,062

-454 (-12.9%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-NOVEMBER 2019 COMPARED WITH 2018

Source USDA-FAS/USAPEEC


 


Grubhub Inc. Exploring “Strategic Options”

01/11/2020

Grubhub has seen its market capitalization decline from $13 billion to $5 billion in a year. The Company is evaluating strategic options including sale or merger.  Possible partners include DoorDash, Postmates or Uber Eats.  The fact that Grubhub is a public quoted company could be attractive to a closely held enterprise.

 

The food delivery business is decidedly unprofitable and if state regulations impose restrictions on the independent-contractor status of delivery personnel, the business model of virtually all delivery companies will be in jeopardy since they rely on the gig-economy to survive.


 

USDA-WASDE FORECAST #596 January 10th 2020

01/10/2020

OVERVIEW

Predictably the January 10th 2020 USDA WASDE Report was updated from December with more accurate yields for corn and soybeans but with relatively unaltered price projections for these commodities.

 

Corn and soybean harvests reflected in the January 2020 WASDE are based on actual yield and harvested area. The corn acreage harvested was 81.5 million acres, 0.4 percent down from the December 2019 WASDE (81.8 million in 2018). Soybeans were harvested from 75.0 million acres, 0.8 percent down from the December 2019 WASDE. (88.3 million acres in 2018)

 

The January 2020 WASDE projected corn yield was raised by 0.6 percent to 168 bushels per acre, (178.9 bushels in 2018). The relatively low value was due to late planting, delayed development and adverse weather before harvest. Soybean yield was raised 1.1 percent to 47.4 bushels per acre from the December 2019 WASDE, (52.1 bushels in 2018).

 

The November USDA projection for the ending stock of corn was lowered 0.9 percent to 1,892 million bushels. Ending stock for soybeans will be unchanged from the December estimate at 475 million bushels.

 

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with conflicting reports on trade negotiations with China. It is presumed that projections are based on the assumption that there will be continued trade in accordance with the Phase-1 agreement on trade with China in 2020. Some orders representing four percent of projected 2019 exports of soybeans were forthcoming in September after the August G-7 Summit in France. In mid-September, China rescinded a ban on all agricultural imports from the U.S. imposed on August 4th. This followed the announcement of a delay in introducing a September 1st threatened tariff of 10 percent on imports from China valued at $300 billion not already subject to duty.

 

To date there has been no announced commitment on either volumes or prices of commodities to be imported by China in 2020.


 


COMMODITY REPORT: January 10th 2020.

01/10/2020

Corn and soybean prices were relatively unchanged in wait-and-see mode for the third consecutive week awaiting details on the Phase-1 Agreement with China. The market was ho-hum over the release of the January 2020 WASDE #596. ( see item in this edition).

 

Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S and China have apparently reached an understanding on U.S. tariff rescission, concessions on some structural issues by China and enforcement provisions
  • Exports of soybeans to China have resumed with 7.7 percent of projected shipments for 2019/2020 consigned during October and November. Notwithstanding the soybean exports, markets apparently do not sure the same optimism expressed by the White House.
  • Fallout from uncertainty in the Middle East.

 

Questions still exist:-

· Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019

· Brexit is now a certainty after the Conservative Party plan was approved by the House of Commons on Thursday 20th December.

· A U.S. trade agreement with the U.K. will be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation.

· The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.

· An unpredictable political situation is delaying ratification of the USMCA by the Senate hopefully in early 2020.

Compared with the January 3rd 2020 close, the CME quotation for March corn posted at close of trading on January 10th 2020 was unchanged at 386 cents per bushel. During mid-December corn rose 6.0 percent and soybeans 2.8 percent based on prospects for commodity exports to China.

The signing ceremony for the recently concluded Phase-1 agreement on January 15th in Washington will be a muted affair. Vice Premier Liu He will represent China.

The following quotations were posted by the CME at close of trading on January 10th. 2020 compared with values for January 3 rd 2020 (in parentheses).

COMMODITY

 

Corn (cents per bushel)

March 386 (386)

May 393 (393)

Soybeans (cents per bushel)

Jan. 935 (930)

May 958 (954)

Soybean meal ($ per ton)

Jan. 299 (297)

May 308 (306)

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

COMMODITY CHANGE FROM PAST WEEK 

Corn: March quotation unchanged                ( 0 percent)

Soybeans: Jan. quotation up 5 cent per Bu    (+0.5 percent)

Soybean Meal: Jan. quotation up $2 per ton  (+0.7 percent)

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

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

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

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

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

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

 

COMMENTS

Subscribers are referred to the January 10th WASDE #596 in this edition.

Prices of commodities are influenced by projections of ending stocks as influenced by the 2019 harvest, 2020 exports and domestic use.

Two tranches of support funding were advanced in 2018 amounting to $12 billion as "short-term" compensation for disruption in trade.

On July 25th the USDA announced an additional $16 million package to support agriculture with Market Facilitation Payment (MFP) funds to be distributed in three tranches. The first payment of $2.5 billion was made with the remainder for the third quarter disbursed through the Farm Services Agency under authority of the Commodity Credit Corporation. A total of $9.6 billion was distributed in September. Payments will be based on a value corresponding to the higher of 50 percent of the producer's calculated payment or $15 per acre, provided a cover crop is planted.

The second MFP payment (November 2019) was $3.6 billion. The third (January 2020) payment, presumed to be $3.6 billion, will in all probability be paid given political and trade considerations. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility. One million applications were received for the initial round in 2018 with 420,000 applications since July 2019. Additional request are being made by industry groups for 2020 MFP payments and will probably be justified by lower imports by China than previously announced by the White House.


 

American Egg Board Issues Updated Buyers Guide

01/10/2020

The downloadable buyer guide issued by the AEB lists 44 suppliers of egg products www.aeb.org/food-manufacturers

 

Companies are arranged alphabetically and by specific product for ease of reference. Individual links are provided including a profile and contacts, detailing availability of frozen and refrigerated items from each supplier.


 

Alltech Introduces ChikPek™

01/10/2020

ChikPek™ produced by Alltech is a grain and mineral-based block intended to divert instinctive pecking behavior in flocks.

 

The block contains calcium carbonate, grains, lignin, salt and vegetable oil.

 

Alltech recommend one block per 1000 hens with additional blocks if pecking behavior is exhibited by the flock.

 

ChikPek™  is compatible with conventional nutrition programs and contributes to welfare by reducing injurious pecking.  Blocks are available from the Alltech® store store@alltech.com

 

 


 

Activists Suspected in Exotic Farm Intrusion

01/10/2020

The Riverside County sheriff is investigating an intrusion involving the release of llamas and emus at an exotic farm in Perris, CA.  Apparently on New Year’s Day, a fence was cut allowing animals to escape. Subsequently when rounded up between twenty and thirty llamas were missing.

 

Previously animal rights activists had claimed that the livestock on the facility was abused although investigations failed to reveal any evidence of maltreatment according to the Riverside County Animal Services Department.

 

It is noted that the Perris area is involved in the twenty-month ongoing Newcastle disease outbreak.  Obviously animal activists breaking into facilities are certainly not going to observe biosecurity procedures. This represents a risk to any commercial farms that may receive the attention of what may be regarded as domestic agricultural terrorists.


 

Borden Dairy Company Files For Chapter 11 Protection

01/09/2020

Borden Dairy company, established 163 years ago, filed for Chapter 11 bankruptcy protection in Delaware on January 5th. The company had $1.2 billion in 2018 sales that generated a loss of $14.6 million. The loss in 2019 will exceed $45 million.

 

Borden has twelve manufacturing plants, 75 distribution centers, and draws milk from 260 family-operated dairy farms and farmer’s cooperatives. The company distributes through major supermarket chains and supplies school districts.

 

The action by Borden follows a previous filing under Chapter 11 by Dean Foods. Problems facing large dairy companies include consumer preference for milk substitutes, vertical integration by chains including Walmart (which opened a large midwest dairy), and overproduction. Margins have shrunk as a result of higher costs for raw milk, and increasing transportation expenses.

 

It is estimated that the assets of Borden are in the region of $100 million and according to Bloomberg News, liabilities may exceed $500 million. In July 2017 Borden Dairy negotiated: a $275 million credit facility comprising a $30 million term loan held by PNC Financial Services Group, a $175 million term loan held by other lenders, including KKR and Company, and a $170 million revolving credit facility provided by PNC.

 

The CFO of Borden, Jason Monaco, noted that negotiations to restructure the company with a forbearance agreement expired on Monday, January 6th and the company needs to draw down from a $826 million account to reimburse milk suppliers.

 

Borden has 3,200 employees of whom a quarter are subject to a union bargaining agreement.

The majority owner of the company, Acorn Investments LLC, will be instrumental in the reorganization.

 

The plight of the dairy industry should be a warning to egg producers, given prolonged low prices and mounting losses. It is indeed fortunate that the industry has not experienced escalation in feed costs, which has restrained losses in a market oversupplied by at least 5 million hens.


 

Concern Over Emergence of Viral Respiratory Infection in China

01/09/2020

An outbreak of 59 cases of an as yet undiagnosed acute respiratory syndrome has affected patients in Wuhan, located in the Hubei Province of China.  Authorities have surprisingly demonstrated a greater level of transparency regarding the outbreak then they did with Sudden Acute Respiratory Syndrome (SARS) that emerged in 2003 and spread to 37 nations including Canada. There were more than 8,000 diagnosed cases of SARS with an approximately ten percent fatality rate over the period November 2002 through July 2003.  SARS and a similar condition, Middle East Respiratory Syndrome (MERS) are caused by coronaviruses but have different animal reservoirs. 

 

Public health researchers in China have eliminated SARS and MERS in addition to avian influenza as the cause of the current outbreak. It is however suspected that the infection may be due to a newly emerged coronavirus. Fortunately, at this stage the infective agent does not appear to be transmissible among humans but in all probability is a zoonosis.  Many patients reported contact with a Wuhan market selling seafood and exotic mammals and reptiles that are consumed as food delicacies in China. 

 

It is considered essential that health authorities identify the causal agent and define the means of transmission.  January 25th marks the beginning of the Lunar New Year holiday period associated with travel involving at least 25 percent of the population in China.  Although, the agent responsible for the new respiratory syndrome is not apparently transmitted among humans, circulation of the virus in a dense population may result in a mutation that increases pathogenicity and infectivity.


 

Archer Daniels Midland Company Unveils New Brand Mark

01/09/2020

In a January 7th release, Archer Daniels Midland Company (ADM) concurrently released a new logo and an updated website reflecting corporate changes including acquisitions and disposal of non-core businesses. 

Juan Luciano chairman and CEO noted “building upon our history of leadership in agricultural transportation and processing, our exponential growth in human and animal nutrition, and our leading-edge innovation and custom-focused solutions, we are delivering on a noble purpose”

 

On January 7th ADM reported acquisition of Yerbalatina Phytoactives, a producer of plant-based extracts based in Brazil. Previous acquisitions include Biopolis that supplies probiotics and health-promoting microbial preparations. Protexin was also acquired in 2018 and produces probiotics for human, pets and livestock.


 

Albertsons Using Pinterest Trends To Promote House Brands

01/09/2020

Albertsons range of own brands includes 11,000 SKUs among ten primary brands. Lucerne,

 

O-Organics and Signature collectively exceed $1 billion in annual sales. To support their own brands, Albertsons developed video Pins for Halloween, Thanksgiving, and Christmas holidays featuring their own brands. Albertsons experienced an in-store increase in sales as a result of the Pins with three-digit percentage increases for specific holiday-themed products.

 

Albertsons intends to continue the initiative through January, which is ‘own brands month’ for the retailer.

 


 

Smithfield Foods to Generate Gas from Plant Wastewater

01/09/2020

Smithfield Foods Inc., in partnership with Duke Energy and OptimaBio, LLC, is generating renewable natural gas (RNG) from the wastewater treatment system in operation at the Tar Heel, NC. pork plant, the largest in the world. The RNG produced will be sufficient to power the equivalent of 2,000 homes and will reduce emission of greenhouse gases in the State.

 

Through partnership with Duke Energy, roughly 140,000 dekatherms of RNG will be transported annually to natural gas plants to generate electricity. The $14 million project to generate RNG is the first in North Carolina following the commissioning of previous “wastewater-to-energy” projects at Smithfield plants in Missouri, Kentucky and South Dakota, that provide fuel for steam boilers.

 

The gas generation and injection systems are operated by partner OptimaBio, LLC, based on the outflow of three million gallons of wastewater released from the plant to the treatment system each working day. The RNG is injected into the Piedmont Natural Gas system, and received by Duke Energy to generate electrical power. The power utility is under a mandate to satisfy the Renewable Energy and Energy Efficiency Portfolio Standard law in North Carolina. This Act requires Duke Energy to generate 0.2 percent of power sold from swine waste by 2024.

 

Smithfield Foods, a subsidiary of the WH Group of China, recently lost a series of nuisance lawsuits filed by neighbors of hog farms contracted to the integrator. Plaintiffs alleged that lagoon-and spray system used to collect and treat hog waste resulted in odors diminishing the value of their property. Smithfield is appealing the adverse jury verdicts in Federal courts.


 

Rose Acre Farms to Partner with Electric Coop in North Carolina

01/09/2020

North Carolina’s Electric Cooperative, Tideland EMC is partnering with Rose Acre Farms in Hyde County, to develop a microgrid that will supply energy to the farm and surrounding community.

 

The first phase of the project will include the installation of a 2 MW solar array, and a 2 MW battery energy storage system, which allows energy generated by the panels to be stored and dispatched when needed. The solar production is expected to offset about a third of the energy consumed by the complex holding up to two million hens and required pullets. In addition, about 60 percent of the power Rose Acre Farms receives from Tideland EMC comes from emission-free nuclear generation.

 

Lee Ragsdale, Senior Vice-president of Energy Delivery for North Carolina Electric Cooperatives stated “this project brings together two of our state’s most significant industries in an innovative effort to make the electric grid more sustainable, flexible and efficient, which results in more affordable, reliable and environmentally responsible power for the farm and for electric co-op members.”

 

Tony Wesner, COO of Rose Acre Farms commented “We are continually seeking innovative practices to reduce the carbon footprint of egg production,” He noted “this partnership with North Carolina’s Electric Cooperatives and Tideland EMC will be another positive step into enhancing environmental sustainability, power source efficiency and resiliency. This will not only strengthen our local electric cooperative for our use, but for the local Hyde County community as well.”

 

Installation of the solar array and battery energy storage system will be completed during the third quarter of 2020. The second phase of the project will add a microgrid controller that manages existing emergency backup diesel generators and all the other components to expand the scope of the project.

 


 

Schedule of UEP Meetings Concurrent With the IPPE

01/09/2020

Monday, January 27

10:00 am - 1:00 pm

10:00 am - 1:30 pm

2:00 pm - 4:00 pm

2:00 pm - 4:00 pm

4:00 pm - 4:30 pm

4:30 pm - 6:00 pm

4:30 pm - 5:15 pm

5:15 pm - 6:00 pm

6:00 pm - 7:00 pm

Tuesday, January 28

7:00 am - 8:00 am

8:00 am - 11:00 am

Schedule of Activities

Westin Peachtree Plaza Atlanta, GA January 27-28, 2020

Registration - Chastain Level
Executive Committee Meeting (Lunch Included) - Chastain C
Animal Welfare Issues Briefing and Committee Meeting - Chastain FGH*
Food Safety Issues Briefing and Committee Meeting - Chastain DE*
Break
Government Relations Issues Briefing and Committee Meeting - Chastain FGH*

Animal Health & Biosecurity Issues Briefing and Committee Meeting - Chastain DE* Environment Issues Briefing and Committee Meeting - Chastain DE*
Palomar Insurance Hosted Reception - Chastain Overlook

Breakfast - Chastain DE
Board Meeting - Open to UEP Members Only - Chastain FG

*Briefings are open to ALL ATTENDEES unless noted otherwise

For scheduling purposes, the following meetings are also taking place:

· - UEA Further Processors Meeting Tuesday 12:00 pm - 2:00 pm (Lunch Included) - Chastain H

· - Joint SAC/Producer Meeting Wednesday 9:00 am - 3:00 pm (Lunch Included) - Chastain H


 

Albertsons Reports on Q3 of FY 2020

01/09/2020

In a press release dated January 7th privately-held Albertsons Companies Inc. announced results for the 3rd Quarter of Fiscal 2020 ending November 30th 2019.

 

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)

 

3rd Quarter Ending

Nov. 30th 2019

Dec. 1st 2018

Difference (%)

Sales:

$14,103,000

$13,840,000

+1.9

Gross profit:

$3,995,000

$3,852,000

+3.7

Operating income:

$207,000

$174,000

+19.0

Net Income

$54,800

$45,600

+20.2

Gross Margin (%)

28.3

27.8

+0.5

Operating Margin (%)

1.5

1.3

+15.4

Profit Margin (%)

0.4

0.3

+33.3

Long-term Debt:

$8,615,900

$10,437,600

-17.5

       

Total Assets

$24,991,600

$20,776,600

+20.2

       

Albertsons achieved a same-store sales growth of 2.7 percent for the 3 rd quarter repeating the value attained in Q3 of 2018. Sales of own brands increased by 25.6 percent over Q3 2018 and the combination of store pick-up and 'click-and-collect' increased by 34 percent.

 

In commenting on results Vivek Sankaran, President and CEO stated "our identical sales momentum continued in the third quarter, as our core business continues to deliver strong growth". He added "we are focused on providing our customers with an easy shopping experience, exciting merchandise and friendly customer service in our omni-channel shopping environment, and creating deep and lasting customer relationships.

 

"Sankaran concluded "our productivity and cost reduction initiatives are also beginning to take shape, which we intend to use to fund strategic growth investments, offset cost inflation and support earnings growth".

 

At the end of Q3 Albertsons operated 2,260 supermarkets with 1,732 pharmacies, 23 CDs and 20 manufacturing plants.


 

Egg Week

01/09/2020

USDA Weekly Egg Price and Inventory Report, January 9th 2020 2019.

  • Hen numbers in production unchanged at 336.7 million .
  • Shell inventory up by 4.7 percent after an 8.0 percent increase last week reflecting lower post-Christmas purchases by chains.
  • USDA Midwest benchmark generic prices for Extra large and Large down 13.1 percent on average to 73.5 and 71.5 cents per dozen. Mediums were down 9.5 percent to 57.5 cents per dozen.
  • Price of breaking stock down 20.9 percent to 26.5 cents per dozen. Checks down 30.0 percent to 14.0 cents per dozen reflecting shell-egg prices. Both categories are now substantially below the USDA November benchmark nest-run production cost.

 

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on January 6 th 2020 the Midwest wholesale prices for Extra Large and Large as delivered to DCs were down 13.0 and 13.3 percent respectively to 73.5 and 71.5 cents per dozen. Mediums were 9.5 percent lower at 67.5 cents per dozen reflecting oversupply from young flocks. Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 59.8 cents per dozen in November, (excluding provisions for packing and transport). The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

 

The January 6th 2020 USDA Egg Market News Report (Vol. 67: No. 01) documented a USDA Combined Region value rounded to the nearest cent, of $0.89 per dozen delivered to warehouses for the week ending December 31st. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.83 per dozen. At the high end of the range, price in the South Central Region attained $0.97 per dozen. The USDA Combined Price last week was 19 cents per dozen below the three-year average of $1.10 per dozen and 44 cents per dozen below the price during the corresponding week in 2019.


 


Moba Offers Omnia Advanced Logistic Workshop

01/07/2020

The Moba Technical Training Center in Barneveld, the Netherlands is offering an advanced logistic workshop for users of Omnia graders.

 

The program will provide guidance on topics to improve processing and machine settings.  The course extends over two days and covers data counting, iMoba operation, machine set-up, off-grade optimization, Conti-Flow control, packing robot operation and pack station logistic.

 

Further information is available from <training@moba.net>.


 

Possible Delay in Senate Ratifying USMCA

01/07/2020

According to Bloomberg News the full Senate vote on the USMCA will be deferred until next week. This delay is due to the fact that the issue has now been referred to six additional committees for review.

 

In addition to the Senate Finance Committee, the accord was also referred to six other panels that will obviously delay a full Senate vote. The Committees involved are:- Health, Education, Labor, and Pensions; Environment and Public Works; Appropriations; Foreign Relations; Commerce, Science, and Transportation; and Budget

 

The floor vote could be delayed further if the House sends the Senate two articles of impeachment it adopted against the President. It is possible that Senate Leader Mitch McConnell (R-KY) will expedite the process as he has avowed that the Senate will continue with regular business until the two articles of impeachment are transmitted from the House.

 

It is unlikely that the Parliament of Canada will approve the USMCA before adoption by the U.S.


 

Listeria Fallout from HCPE Plant Widens

01/06/2020

During the past two weeks food manufacturers have recalled products including salads and snack kits containing hard cooked peeled eggs (HCPE) in whole or diced forms. Recalls have involved as many as four national chains selling salads and products containing potentially contaminated eggs. The products were processed by a Gainesville, GA. plant incriminated in a seven-patient outbreak of listeriosis with the cases diagnosed in 2017 and in 2019. The plant has temporarily suspended production to allow thorough decontamination followed by surveillance for Listeria before resuming production.

 

The recognition of seven cases in five states spread over the end of 2017 and again in 2019 is attributed to the use of a database that receives notifications from a network of state and regional diagnostic laboratories.  This allows prompt identification of a small-scale foodborne outbreak even when cases are widely distributed among cooperating states. Whole genome sequencing allows positive correlation among isolates from individual cases in traceback investigations. It is possible to confirm the source of a pathogen if the identical strain is recovered from the environment or equipment in a processing plant.  In the case of peeled eggs, with a relatively long shelf life, retention samples, representative of specific batches held at a plant can be sampled in an attempt to establish the presence of the suspected pathogen.

 

It is emphasized that contamination of egg products with Listeria is a function of the specific Gainesville plant involved.  Listeria is not associated with either flocks or shell eggs.  Pasteurized products should be free of Listeria contamination.


 

USDA DATA ON CAGE-FREE PRODUCTION

01/06/2020

Based on the importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders. There is some doubt as to the accuracy of the individual monthly flock numbers especially with reports that show either no change or a significant increase in the cage-free flock for a specific month. It is suggested that a quarterly report with more accurate and consistent data would be suitable for the industry.

 

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

 

The USDA Cage Free Report for the month of December 2019 released on January 6th 2020 documented a static population of hens producing under the Certified Organic seal and for generic cage-free production (Accepting USDA data). 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. Average flock production was held at 76.3 percent for both categories of non-caged hens reflecting younger flocks placed in anticipation of the Christmas market.

 

Flock size 2019 December November

(million hens)

October

September

June through

August

   

Certified Organic 16.2 16.2

16.1

15.8

15.8

   

Cage-free hens 54.6 54.6

54.2

52.7

51.3

   

Total non-caged 70.8 70.8

70.3

68.5

67.1

   

 

Average weekly production cases, December and November 2019

Certified Organic

240,580 (237,309 Oct.)

Cage-free

809,417 (798,439 Oct.)

Total non-caged

1,049,997 (1,35,748 Oct)

Average Wholesale Contract Price Cage-Free Brown

$1.53/doz. ($1.53 Sept. through Nov.)

Range:

$1.15 to $2.10/doz.

FOB Negotiated price, grade quality nest-run, loose

Price range $1.17 to $1.26 per dozen

Average Value of $1.16/doz. (was $1.21 Nov.)

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

$2.76/doz. (was $2.67 Nov. 2019)

USDA 6-Regions

High: NE

$3.07/doz. $3.05 (NE.)

 

Low: SC

$2.50/doz. $2.45 (MW.)

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.


 

LIDL To Establish DC in Georgia

01/06/2020

According to Grocery Dive LIDL will invest $100 million in a new distribution center located in Covington, GA.

 

The facility will extend over 1million square feet and will also serve as a regional office for the stores located in Augusta, Mableton, Marietta and Snellville and additional locations to be established in the southeast region.

 

According to the office of the Governor of Georgia, the project will create 270 new positions.


 

Midwest Poultry Federation Convention

01/06/2020

The Midwest Poultry Federation has announced the program for 2020. The event will be held at the Minneapolis Convention Center March 17th through 19th.

 

Events of importance to the egg-production industry include:

  • North Central Avian Disease Conference - March 16-17.
  • Organic Egg Farmers of America Symposium - March 17.
  • Nutrition and Poultry Health Symposium;
  • Layer and Pullet Education Track - March 17.
  • Vendor Track, a new program for 2020 - March 19.
  • Exhibition March 18-19.

The Layer and Pullet Track will include presentations by Chad Gregory UEP, Management of ectoparasites, Keel bone fractures, Outcome-based measures for the layer industry, and an Update on health status of flocks.

The Vendor 7:32 AMrack for layers and pullets will include euthanasia of spent hens and ventilation design for cage-free laying flocks.

For registration access [mpf@support.eventpower.com]. 


 

Cal-Maine Foods Reports on Q2 FY 2020

01/06/2020

In a press release dated January 6th Cal-Maine Foods (CALM) announced results for the 2nd Quarter Fiscal 2020 ending November 30th 2019.

Results for CALM, a bellwether for U.S. shell-egg production and sales, reflect low unit revenue experienced by the entire industry resulting in unfavorable comparisons with Q2 of 2019.

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 president and CEO of Cal-Maine Foods

2nd Quarter Ending

November 30th 2019

December 1st 2018

Difference (%)

Sales:

$311,522

$356,040

-12.5

Gross profit:

$29,375

$70,535

-58.4

Operating income:

$(16,565)

$25,334

neg

Net Income

$(10,060)

$21,807

neg

Diluted earnings per share:

$(0.21)

$0.45

neg

Gross Margin (%)

9.4

19.8

-52.5

Operating Margin (%)

neg

7.1

neg

Profit Margin (%)

net

6.1

neg

Long-term Debt:

$2,123

$858

+147.4

12 Months Trailing:

     

Return on Assets (%)

-1.4

   

Return on Equity (%)

-0.4

   

Operating Margin (%)

-2.0

   

Profit Margin (%)

-0.3

   

Total Assets

$1,111,280

$1,156,278

-3.9

Market Capitalization

$1,880,000

   

52-Week Range in Share Price: $36.65 to $47.00. 50-day moving average $43.22

Market Close Friday 3rd January $42.50. Post release; Monday 6 th January,13H00 $38.58

Forward P/E 24.7 Beta 0.4. PEG Ratio 70.0

In reviewing the CALM quarterly report the following calculated values* represent key data for the most recent Quarter. (Q2 Fiscal 2019 and difference in parentheses):-

· Dozen shell eggs sold: 261,026,000 (262,263,000; -0.5%)

· Average selling price of all shell eggs: $1.16 per dozen; ($1.33 per dozen; -12.8%).

· Average selling price of specialty eggs calculated from data released: $1.89 cents per dozen; ($1.98 per dozen; -4.5%).

· Average selling price of generic eggs calculated from data released: $0.96 cents per dozen; ($0.85 cents per dozen; -9.4%).

· Differential between generic and specialty eggs: $0.93 cents per dozen; ($1.13 per dozen; -17.9%)

· Specialty eggs as a proportion of volume sold: 22.3%; (23.5%; -5.1%)

· Specialty eggs as a proportion of sales value: 36.0%; (35.0%; +2.9%)

· Proportion of eggs sold actually produced by Cal-Maine flocks: 88.7%; (85.0%; +4.4%).

· Feed cost per dozen 42 cents (42 cents)

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

In reviewing Q2 results, Dolph Baker, chairman and CEO of Cal-Maine Foods, Inc., stated, "We continued to experience challenging market conditions for the second quarter of fiscal 2020. While our sales volumes remained relatively flat in the second quarter compared to last year, our financial results reflect lower average selling prices compared with the same period of fiscal 2019. The Southeast large market average price for conventional eggs dropped 12.7 percent for the second quarter of fiscal 2020 compared to the second quarter of fiscal 2019. At the same time, our average sales price was down 11.5 percent, due to an unfavorable balance of egg supply and demand. Hen numbers, as reported by the USDA Chickens and Eggs report as of December 23, 2019, are 340.5 million, which is 4.6 more million hens than a year ago. The increase in the number of hens continues to contribute to the oversupply of eggs.

He added, "during the second quarter of fiscal 2020, we lost a portion of our sales of non-specialty eggs to a major customer in the Southeast region, representing 4.6 percent of total shell egg dozens and 6.1 percent of non-specialty egg dozens for fiscal 2019. This did not materially affect sales during the second quarter of fiscal 2020. However, we expect our new capacity additions and our previously disclosed plans to decommission some older, less efficient facilities will help optimize our operations, improve our sales mix, and better align our production and sales within the region".

"Our specialty egg business remains a key component of our growth strategy in fiscal 2020. For the second quarter, specialty eggs, excluding co-pack sales, were $109.4 million accounting for 36.0 percent of our sales revenue, compared with $120.8 million, or 35.0 percent of sales revenue, in the second quarter of fiscal 2019. Average pricing for specialty eggs was down by 4.1 percent to $1.88 per dozen in the second quarter compared to the prior-year second quarter. Specialty dozens sold were also down 5.7 percent, as sales of specialty dozens were negatively affected by low conventional egg prices.

"We continue our efforts to position Cal-Maine Foods as an industry leader in meeting future customer requirements for cage-free eggs. We are preparing for the additional demand created by legislation in California, Washington and Oregon requiring cage-free eggs, as well as three other states with similar laws defining minimum space requirements. We have invested over $314 million to expand our cage-free production and continue to make progress with our expansion plans in Florida, Texas and Utah, which will provide significant additional processing, pullet and cage-free capacity upon completion.

Baker concluded "in spite of challenging conditions, we will continue to manage our business for the long term, regardless of the volatility in market prices and other external factors outside our control. We are well positioned to execute our growth strategy, and we are committed to making the right investments to support our operations and continue to serve our valued customers,"

During the 2nd Quarter of FY 2020 CALM purchased Mahard Egg Farm. The SEC Q10 Cash Flow statement records $44.4 million under the category "Acquisition of Businesses". The Company took a $48.9 million charge for "Impairment of Assets" and expended $68.7 million on "Purchases of Property and Equipment"


 

Food Technology Highlights Japanese Cuisine

01/05/2020

Kelly Hensel, senior digital editor for Food Technology points to the growing interest in Japanese cuisine. This is in part in anticipation of the 2020 summer Olympics to be held in Tokyo coupled with increased travel to Japan.  Hensel highlights soufflé pancakes a traditional Japanese delicacy featured on social media with a strong following (#soufflepancake). 

 

The fluffy texture is achieved by applying the functional properties of egg whites.  If the soufflé pancake becomes a U.S. staple and is not simply a fad, demand for egg-whites will increase.  For every quantity of egg white there will be a surplus of yolk.  Fortunately there is a steady demand for liquid and dried yolk by Japan to be incorporated into noodles. With the advent of the bilateral Japan-U.S. trade agreement, Japanese cuisine may benefit the egg industry from increased demand for products both in the U.S. and across the Pacific.


 

Will 2020 bring Carbon Labeling of Foods?

01/05/2020

Bob Swientek, Editor-in-Chief of Food Technology predicts that data relating to carbon and greenhouse gas emissions will soon be printed on food labels.  Swientek points to the promotional claim by Maple Leaf Foods as becoming carbon neutral.  Growing concern over the environmental and climatic effects of emission of carbon dioxide and greenhouse gases, especially among educated and affluent demographics suggests advantages to be derived from carbon claims.  The problems with labeling will include establishing standards, enforcing honesty and educating consumers as to the relevance of either numbers or color codes on labels indicating environmental compliance.

A number of chains have in the recent past indicated that they would demand environmentally- friendly production practices involving carbon emissions, both in products and packaging, in addition to conservation of water and deriving energy from other than hydrocarbons.

 

Since USDA has authority over labeling, it is hoped that they will gather information from regulators in the EU who are obviously ahead of the U.S. and will consult with the food industry before establishing standards and metrics.

 

In all probability U.S. food retailers with strong ties to the EU will follow the directives of their parent companies and introduce some form of carbon labeling in an attempt to gain a competitive advantages for their house brands.  Unfortunately unscrupulous manufacturers may make unsubstantiated claims for their products that will result in confusion among consumers and also will be amplified by misinformation posted on social media.


 

Fire Destroys Cage-Free Barn

01/04/2020

Media reported the loss of a barn holding 300,000 hens in Western Michigan on January 3rd. Brian Burch, a spokesman for Konos Inc. located in in Otsego Township, MI confirmed that the fire was confined to one building and that a flock in an adjoining house was unaffected. There were no injuries among workers.

 

Local fire departments responded to the conflagration but were forced to truck in water to extinguish the fire.

 

A first responder commented "agricultural fires are always a challenge, especially at a place like this. We don't have city water, we don't have those same kinds of assets that we sometimes take for granted in cities,"

 

The cause of the fire is under investigation.


 

COMMODITY REPORT: January 3rd 2020.

01/02/2020

Corn and soybean prices were relatively unchanged in wait-and-see mode for the second consecutive week. This followed noteworthy rises during mid-December in response to the conclusion of the Phase-1 trade deal with China. Gains from earlier in the week evaporated in Friday trading with corn losing 5 cents per bushel, soybeans 14 cents per bushel and soybean meal by $4.00 per ton.

 

Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S and China have apparently reached an understanding on U.S. tariff rescission, concessions on some structural issues by China and enforcement provisions
  • Exports of soybeans to China have resumed with 7.7 percent of projected shipments for 2019/2020 consigned during October and November. Notwithstanding the soybean exports, markets apparently do not sure the same optimism expressed by the White House.
  • Outcome of military action in the Middle East.

 

Questions still exist:-

· Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019

· Brexit is now a certainty after the Conservative Party plan was approved by the House of Commons on Thursday 20th December.

· A U.S. trade agreement with the U.K. will be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation.

· The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.

· An unpredictable political situation is delaying ratification of the USMCA by the Senate hopefully in early 2020.

Compared with the December 27th close, the CME quotation for March corn posted at close of trading on January 3rd 2020 was lower by 1.0 percent to 386 cents per bushel. During mid-December corn rose 6.0 percent and soybeans 2.8 percent based on prospects for commodity exports to China.

The signing ceremony for the recently concluded Phase-1 agreement on January 15th in Washington will be a muted affair. Vice Premier Liu He will represent China.

The following quotations were posted by the CME at close of trading on January 3rd. 2020 compared with values for December 27 th 2019 (in parentheses).

COMMODITY

 

Corn (cents per bushel)

March 386 (390)

May 393 (397)

Soybeans (cents per bushel)

Jan. 930 (929)

May 954 (955)

Soybean meal ($ per ton)

Jan. 297 (297)

May 306 (305)

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

COMMODITY CHANGE FROM PAST WEEK 

Corn: March quotation down 4 cents per Bushel (-1.0 percent)

Soybeans: Jan. quotation up 1 cent per Bu        (+0.1 percent)

Soybean Meal: Jan. quotation unchanged          ( 0 )

  • 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

COMMENTS

Subscribers are referred to the November 8th WASDE #594 posted under the Statistics tab. This will be updated when the January 2020 report is released.

Prices of commodities will be determined by estimates of ending stocks as influenced by the 2019 harvest, exports and domestic use.

Two tranches of support funding were advanced in 2018 amounting to $12 billion as "short-term" compensation for disruption in trade.

On July 25th the USDA announced an additional $16 million package to support agriculture with Market Facilitation Payment (MFP) funds to be distributed in three tranches. The first payment of $2.5 billion was made with the remainder for the third quarter disbursed through the Farm Services Agency under authority of the Commodity Credit Corporation. A total of $9.6 billion was distributed in September. Payments will be based on a value corresponding to the higher of 50 percent of the producer's calculated payment or $15 per acre, provided a cover crop is planted.

The second MFP payment (November 2019) was $3.6 billion. The third (January 2020) payment, presumed to be $3.6 billion, will in all probability be paid given political and trade considerations. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility. One million applications were received for the initial round in 2018 with 420,000 applications since July 2019.


 

U.K. Competition and Markets Authority Probing Amazon Investment in Deliveroo

01/02/2020

Deliveroo established in 2013 has received $1.5 billion from venture capital providers.  In May 2019, Amazon invested  $575 million representing a 16 percent share in the food- delivery company.  As with many of the world’s delivery services, Deliveroo has successively posted increased quarterly sales but has experienced significant losses.

 

The U.K. Competition and Markets Authority (CMA) questioned the investment in Deliveroo by Amazon and initiated a probe with the potential to unravel the deal.  Amazon previously failed to respond to questions raised by the CMA and accordingly a full investigation was announced in mid-December.  It is now up to Deliveroo to convince the CMA that the minority investment by Amazon will not lead to domination of the food-delivery market or distort the restaurant and grocery markets.

 

Amazon maintains that “home-grown UK business like Deliveroo should have broad access to investors and supporters”.  Amazon believes that their investment “will lead to more pro-customer innovation by helping Deliveroo continue to build its world-class service and remain competitive.”


 

Alltech takes the Lead in Advancing Women in Food and Agriculture

01/02/2020

Alltech recently released the results of a 2019 survey involving 2,500 respondents employed in the agricultural and food sectors.  The survey was intended to gain an insight into the “professional landscape for women in agriculture.”

In commenting on the study, Dr. Mark Lyons, president and CEO of Alltech stated, “The Women in Food and Agriculture survey revealed a great deal about where the agri-food sector stands on inclusion and illuminated where we need to collaborate to effect positive change.”  He added, “there are challenges to overcome yet there are several steps that organizations can start to take and proven examples of how to bring about success.”  The respondents represented farming (20 percent of respondents) and agri-food businesses with more than 3,000 employees (25 percent).  Three-quarters of the respondents were female.

 

Two-thirds of the women considered that they are well represented and three-quarters of the men surveyed supported this contention.  A divergence was noted when “respect within an organization” was considered.  A total of 59 percent of men strongly agreed that women were respected but only 32 percent of women surveyed were of the same opinion.  With respect to verbal and physical harassment, 9 percent of men said that they had witnessed unacceptable behavior in the workplace but 27 percent of the women responded in the affirmative.  Women respondents noted that equality in remuneration was an issue and three-quarters said that they lacked mentors and strong personal networks.

 

Dr. Lyons concluded, “now is the time to unify and effect change in the agriculture and food industries.  We must continue to collaborate and create an environment for positive, productive conversations.”


 

Hypervirulent Strain of Listeria monocytogenes Evaluated

01/02/2020

Scientist at the University of Giessen in Germany recently sequenced the genes of a newly isolated hypervirulent Listeria monocytogenes isolated from sheep.  It is known that ovine listeriosis results in fetal death with a high proportion of abortions and stillborn lambs. Since the infection is zoonotic, shepherds are infected by contact with placentas and fetuses while assisting with lambing down of an infected flock.

 

The hypervirulent Listeria strain expresses virulence factors associated with other strains of Listeria monocytogenes but are expressed concurrently.  The potential of this Listeria strain to contaminate food resulting in widespread infection is self-evident. Previous extensive Listeria outbreaks included the Maple Leaf episode in 2008 attributed to cold cuts and the contamination of Blue Bell ice cream in 2015. Contaminated Chicken polony (a sausage-product) in South Africa resulted in over 1,000 laboratory-confirmed cases with 200 fatalities between January 2017 and March 2018 attributed to an ST6 strain of Listeria monocytogenes. In December 2019 hard cooked peeled eggs were recalled from a plant following trace-back from a total of seven cases spread among 2017 and 2019.

 

The application of whole genome sequencing permits epidemiologists to positively correlate isolates from patients with environmental sample from equipment and the environment of plants processing food.


 

Amazon Prime Posts Large Increase in Grocery Orders

01/02/2020

According to the FMI Daily Lead a significant number of Amazon Prime members ordered groceries during the 2019 Christmas period.  This was facilitated by the deployment of a dedicated last-mile delivery system based on contractors with their iconic gray vans.  In 2019 Prime free One-day and Prime free Same-day delivery increased four-fold over the Christmas season compared to 2018.  Amazon claimed 5 million new Prime members and 3.5 billion customer packages delivered globally during the recent holiday season.  U.S. domestic orders for groceries included perishables, produce and fruit. 

 

Growth in Amazon home delivery obviously is at the expense of traditional supermarkets.  Walmart considers that their delivery systems and Click-and-Collect program will serve as a viable competitor to Amazon.


 

Egg Week

01/02/2020

USDA Weekly Egg Price and Inventory Report, January 2nd 2020 2019.

  • Hen numbers in production unchanged at 336.7 million .
  • Shell inventory up by 8.0 percent reflecting lower post-Christmas purchases by chains.
  • USDA Midwest benchmark generic prices for Extra large and Large down 9.7 percent on average to 84.5 and 82.5 cents per dozen. Mediums were down 5.9 percent to 63.5 cents per dozen.
  • Price of breaking stock down 8.2 percent to 33.5 cents per dozen. Checks down 22.0 percent to 20.0 cents per dozen reflecting shell-egg prices. Both categories are now below the USDA November benchmark nest-run production cost.


 


Oregon Bans Plastic Grocery Bags

01/02/2020

According to Oregon Public Broadcasting, effective January 1st, following passage of House Bill 2,509, shoppers in Oregon will no longer receive their supermarket purchases in plastic bags. In their place stores will provide paper bags with 50 percent recycled content at 5 cents each.

 

The move will encourage shoppers to change to reusable bags, available now in stores for $1 to $4 depending on size and durability.

 

Shawn Miller a spokesperson for the Northwest Grocery Association stated “plastic bags are so much cheaper than the recycled paper bags. The five-cent charge doesn’t cover the cost between the difference between paper and plastic but it helps make sure grocery costs aren’t going to increase because of the cost shift when you ban plastic,”

 

There is a growing trend worldwide to ban or require re-cycling of single-use plastic containers. The cost of collection and re-manufacturing of plastic waste in the U.S. frequently exceeds the value of virgin feedstock. The recycling chain has recently been impacted by an embargo on importation of scrap bulk plastic by China, the traditional destination after collection by municipalities. This action has resulted in the closure of recycling centers along the West Coast.


 

Shell Egg Academy Registration Open

01/02/2020

Registration for the Shell Egg Academy (SEA) in Lafayette, IN, is now open. The academy is divided into two courses that run April 20th-23rd, 2020 at the Courtyard Marriott Hotel, Lafayette. The course will provide information on egg quality and food safety relating to the production and processing of table eggs. 

 

“The academy provides a comprehensive education opportunity for egg farmers and companies,” said Dr. Darrin Karcher, assistant professor of animal sciences at Purdue University who heads up SEA representing the contribution of a steering committee. Karcher added “a range of expert speakers will share their knowledge and interact with participants on a variety of important, egg-related topics.”

 

The SEA’s two courses are divided as follows:
Course 1: Live Hen Production (Monday, April 20 - Tuesday, April 21; fee $500)
Course 2: Egg Processing and Food Safety (Tuesday, April 21 - Thursday, April 23; fee $750)

Participants may select either course or attend both courses. At the end of each course, participants take an exam to earn a competency certificate. 

Sponsorships are also available at a variety of price points for companies wishing to  support the egg industry.

 

A block of hotel rooms at the Courtyard Marriott Lafayette is available at a group rate through March 20th, 2020 at $129/night. Reservations may be made by calling the hotel at 1-800-228-9290 or 765-449-4800 or online: https://bit.ly/2F5adGf

 

For more information on the schedule or to register for the academy, visit: https://empoweredeventsllc.regfox.com/shell-egg-academy.

 

Questions about the academy may be directed to Dr. Darrin Karcher at dkarcher@purdue.edu. For assistance with registration, hotel reservations or to inquire about sponsorships, please email info@empoweredeventsllc.com or call 763/284-6763. 


 

USDA Arranging Trade Mission to North Africa

01/02/2020

In a January 2nd announcement, the U.S. Department of Agriculture advised U.S. exporters of a trade mission to Casablanca, Morocco, to take place over the period March 16th to19 th. The mission will focus on U.S. agricultural exports to all of North Africa and will include interested buyers from Morocco, Algeria, Libya, and Tunisia.

 

This will be the second USDA trade mission to Africa within six months, supporting the Administration's Prosper Africa initiative to encourage trade and investment between the United States and Africa.

 

The U.S.-Morocco Free Trade Agreement and the infrastructure and stable economy of Morocco suggest opportunities for egg exports. In 2018 Morocco imports of U.S. agricultural and related products attained $595 million in value.

 

While in Casablanca, trade mission delegates will participate in business-to-business meetings with potential customers coordinated by local staff from USDA's Foreign Agricultural Service (FAS) who will provide guidance and assistance.

 

The deadline to apply for the North Africa trade mission is January 16, 2020. For additional information, visit https://www.fas.usda.gov/topics/trade-missions or email trademissions@fas.usda.gov.

 

The USDA advised that the following trade missions are planned for 2020:

  • Philippines, April 20
  • Spain and Portugal, June 8
  • United Kingdom, September 14
  • Australia and New Zealand, October 19
  • Peru, November 2
  • United Arab Emirates, November 15

 

Advances in Detection and Identification of Pathogens

12/30/2019

A research project in Denmark using an instrument developed by GenXone S.A. of Poland was able to identify and distinguish among 38 bacterial species. The technique is based on nanopore sequencing, effectively a real-time DNA sequencing approach, allowing for rapid identification critical to epidemiologic investigations and trace-back. An investigator noted “The method can be used both in food safety where you can quickly identify disease-causing bacteria and also in the health sector, where you would be able to perform certain analyses that are not available today because of price and time restraints associated with traditional assays”.

 

*Krych, L. DNA Enrichment and Tagmentation Method for Species-Level Identification and Strain-Level Differentiation Using ON-rep-seq. Communications Biology. 2:Article 369 (2019)

 

 


 

Progressive Legislators Pressing for a Single Food Safety Agency

12/30/2019

The Safe Food Act sponsored by Rep. Rosa DeLauro (D-CT) and Senator Dick Durbin (D-IL) will in all probability be reconsidered in 2020 after the impeachment issue is resolved. Although it is difficult to enact legislation with far-reaching consequences, especially with administrators protecting their turf, there is a groundswell for resolving the problem of fragmentation among agencies involved in food safety.

 

Rep. DeLauro stated “We need a common-sense 21st Century way of ensuring food safety – and a single food safety agency is it”. Senator Durbin commented “The Safe Food Act could weave the patchwork system where no single voice guides industry, retailers and consumers into a seamless force for safer foods in the United States”.

 

 

 

 


 

EPA and DOJ Intervene in Glyphosate Appeal

12/30/2019

The U.S. Environmental Protection Agency and the Department of Justice filed a joint amicus curiae (friend of the court) brief on Friday, December 20th emphasizing that glyphosate is not carcinogenic.

 

At issue is the appeal by Bayer, the acquirer of Monsanto against an adverse $25 million judgement. The Plaintiff, Edwin Hardeman claimed that exposure to Round Up™ containing glyphosate was responsible for his diagnosis of non-Hodgkin lymphoma. This bellwether case was the first among thousands of individual and class-action suits against Bayer. The German multinational acquired Monsanto, the manufacturer of Round Up™ in 2018.

 

It is the contention of lawyers representing Edwin Hardeman that Bayer failed to warn users that glyphosate was carcinogenic. Since the EPA does not consider glyphosate as a carcinogen it would be illegal for the company to have placed a warning on a label in California since this would be in conflict with Federal guidelines. The joint filing noted “it is unlawful for manufacturers and sellers to make claims on their labels that differ from what is approved by the EPA”.


 

CPI for Food Increases in 2019

12/30/2019

The USDA has calculated that the Consumer Price Index for food items was higher by two percent in November compared to the corresponding month in 2018. Comparing the two years, the CPI for food-away-from-home increased by 3.2 percent in November 2019. In contrast, food-at-home representing items purchased in supermarkets and grocery stores was one percent higher in November 2019 compared to the corresponding month in 2018. The discrepancy between the CPI values for restaurant and supermarket purchases probably relates to labor costs for QSRs and restaurants in addition to overhead and some semi-variable costs.

 

USDA expects that poultry and egg prices will be below average the inflation rate for 2019 contrasted with increases in beef, veal, fish, dairy, processed foods and vegetables.


 

Update From NPIP

12/30/2019

Dr. Elena Behnke, Senior Coordinator of the National Poultry Improvement Plan (NPIP) circulated an update on activities:

 

· Hiring for a Laboratory Coordinator and a Compartmentalization Coordinator are in progress

· An informal stakeholder meeting relating to NPIP will be held at the IPPE in Atlanta on Wednesday, January 29th from 09h00 to 11h00 in Room C208 of the GWCC

· An avian influenza workshop is scheduled for March 2020

· New program standards will be posted in the NPIP website before the end of December. Registration for the 2020 NPIP Biennial Conference will open during January 2020.


 

Comparison of Commodity Prices in China with CME Quotations.

12/27/2019

The relative prices expressed in US$ per short ton for corn, soybeans and soybean meal were downloaded from the Dalian Commodity Exchange website on Friday December 27th and compared with values on the CME. (in parentheses) 

Corn.                  $289   ($139 March)

Soybeans.           $421   (310 January)

Soybean Meal      $345   (295 January)

It is evident that due to the higher price of feed, producers of both eggs and conventional broilers in China are a disadvantage in production cost compared to the U.S. and Brazil

Dalian Commodity Exchange

 

Madeline Cakes

12/27/2019

The AEB highlighted Toufayan Madeleines Tea Cakes, an egg-based confection in their weekly newsletter. This traditional confection originated in the Lorraine region of France. Eggs provide aroma, form, flavor and texture for the classic light, sponge with crisp edges.


 

COMMODITY REPORT: December 27th.

12/27/2019

Corn and soybean prices were relatively unchanged in wait-and-see mode after noteworthy rises last week in response to apparent conclusion of a Phase-1 trade deal with China.

 

Uncertainties include:-

  • Renewed optimism over soybean purchases by China. The U.S and China have apparently reached an understanding on U.S. tariff rescission, concessions on structural issues by China and enforcement provisions
  • Exports of soybeans to China have resumed with 7.7 percent of projected shipments for 2019/2020 consigned during October and November.

 

Questions still exist:-

 

  • Traders are reviewing projected ending stocks and taking into account the relative sizes of both corn and soybean harvests in 2019
  • Brexit appears a certainty after the Conservative Party plan was approved by the House of Commons on Thursday 20th following the 80-seat majority voted by the U.K. electorate on December 12th
  • A U.S. trade agreement with the U.K. will be concluded in accordance with commitments to the E.U. by the departing nation.
  • The relationship with the E.U. is tenuous especially with the threat of retaliatory tariffs by the U.S. on food products from France and auto imports from Germany.
  • An unpredictable political situation delaying ratification of the USMCA by the Senate hopefully in early 2020.

 


 


Conagra Brands Posts Improved Q2 FY 2020 Results

12/26/2019

In a December 17th release Conagra Brands (CAG) announced results for the second quarter of FY 2020 ending November 24th 2019. For the period the Company earned $262 million on revenue of $2.821 billion yielding an EPS of $0.53. the EPS was regarded as a miss although revenue was in line with estimates. For the corresponding second quarter of FY 2019 CAG earned $132 million on sales of $2.384 billon with an EPS of $0.32.

Sean Connolly, president and CEO commented, "our second quarter results reflect solid execution in applying the Conagra Way playbook across our portfolio. We maintained our strong momentum in frozen and snacks. We also made good progress on our large grocery brands, Hunt's and Chef Boyardee, both of which made sequential improvements. We also continued to make very good progress on the Pinnacle integration, and we remain squarely on-track with our plans to improve key Pinnacle brands." He continued, "our expectation for Fiscal 2020 remains that first-half investments will result in strong second-half performance. The second-half is when we expect to see the greatest impact from new frozen and snacks innovation, continued smart promotional support in key grocery brands, the ongoing implementation of our Pinnacle action plan, and synergy capture."

Conagra Brands has a market cap of $16.4 billion. The 52-week range in share price is $20.26 to $35.59 with a 50-day moving average of $29.31. On December 17th CAG closed at $29.05 but moved up after the release to $35.07 at close of trading on December 20th. By 16H00 on December 26th profit taking reduced CAG to $33.69 still 16.0 percent above the pre-release value. For the trailing 12-month period CAG has achieved an operating margin of 17.1 percent and a profit margin of 7.6 percent. The Company has achieved returns on assets and equity of 4.9 percent and 10.7 percent respectively.

Analyst project that CAG will post revenue of 10.7 billion for FY 2020 with an EPS of $2.02.


 

USMCA to Serve as a Model for Bilateral Trade Agreements

12/26/2019

According to Lawrence Kudlow, Director of the White House National Economic Council, the recently concluded U.S.-Mexico-Canada Agreement (USMCA) will serve as a model for future agreements with trading partners. In upgrading the 26-year old NAFTA agreement, now replaced by the USMCA, negotiators added sections on digital services, in its infancy when the NAFTA agreement was concluded. The USMCA prohibits tariffs on digital products, introduces restrictions on spam, enhances copyright protection for electronic intellectual property, and has provisions covering currency manipulation and enforcement. It is noted that many of the basic considerations in the USMCA were incorporated into the 2016 Trans Pacific Partnership from which the U.S. withdrew unilaterally in 2017.

A provision of the USMCA enjoins signatories from establishing trade relations with specific nations that may be distorting domestic markets. This was an obvious preemptive measure aimed at China attempting to influence the U.S. through trade with either or both Mexico and Canada.


 

U.S. and Japan Agreement on HPAI Regionalization

12/26/2019

The World Organization for Animal Health (OIE) recognizes the principle of regionalization in the event of an outbreak of any serious disease affecting livestock. Nationwide bans are often unjustified given specific aspects of the epidemiology of a disease. Nations belonging to the OIE created rules allowing for bans to be placed on limited affected regions where diseases such as avian influenza, exotic Newcastle disease, foot and mouth and African swine fever may occur.

Previous to the most recent agreement on highly pathogenic avian influenza, Japan followed the practice of banning an entire nation such as the U.S. in the event of a single outbreak in a specific area. Following negotiations between veterinary authorities in both nations, embargoes on export will be confined to a specific county in the U.S. in the event of outbreaks of HPAI.

Authorities in Japan will be allowed to restrict imports from affected U.S. counties providing HPAI is controlled within the U.S. The agreement will apply to shell eggs and egg products exported from the U.S. to Japan and will follow requirements as specified in the USDA FSIS Export Library. The agreement will be subject to a three-month transitional period during which USDA-issued export certificates for poultry and egg products will be accepted.


 

Senate Passes FY 2020 Appropriations

12/26/2019

The Senate followed the House in approving FiscalYear 2020 appropriations by a 71 to 23 vote. HR1865 incorporates appropriation bills for the Departments of Agriculture, Labor, Health and Human Services, Energy, Interior, Veterans Affairs, Transportation and State. Appropriations were also concluded for the Legislative branch and Military Construction including water and foreign operations. A second package of appropriations for the Department of Defense, the Treasury and Homeland Security was passed on Thursday, December 19th.


 

Implementation of California Proposition #12

12/26/2019

The California Health and Safety Code Sections 25990 and 25991 require that effective January 1st 2020 all shell eggs and liquid egg product sold in the State must be derived from hens housed with not less than 144 square inches of useable floor space per hen.


Draft documents are being issued by the California Department of Food and Agriculture  (CDFA) to increase public participation and improve the quality of regulations pursuant to Government Code Section 11346.45.

 

On November 6th 2018, California voters approved Proposition 12, the Farm Animal Confinement Initiative, which amended requirements in Chapter 13.8, sections 25990 through 25994, of the Health and Safety Code (HSC). The revised law requires that covered animals be housed in confinement systems that comply with specific standards for freedom of movement, cage-free design and minimum floor space, and identifies covered animals to include egg-laying hens. HSC section 25990 prohibits a farm owner or operator from knowingly causing any covered animal to be confined in a cruel manner, as specified, and prohibits a business owner or operator from knowingly engaging in the sale within the state of shell eggs, liquid eggs, as defined, from animals housed in a cruel manner.

In addition to general requirements that prohibit animals from being confined in a manner that prevents lying down, standing up, fully extending limbs or turning around freely, the measure added detailed confinement space standards for farms subject to the law. The complete text of the law (HSC sections 25990–25994), including confinement requirements, definitions, compliance dates, exemptions and penalties is available from CDFA.

HSC section 25993 specifies that the CDFA and the California Department of Public Health shall jointly promulgate rules and regulations for the implementation of the Act. CDFA is in the process of developing a regulatory framework that may include production facility registration, certification, verification audits, border station inspection and a penalty matrix for violations including a process for appeals. The public and affected stakeholders will have the opportunity to submit written comments during the formal administrative rulemaking process.

 

The Animal Health and Food Safety Services Division of CDFA invites comments, data or other information from interested stakeholders on this initial draft text. While CDFA will read and consider all comments, the Department will not be responding to comments at this time. Commencement of the official rulemaking, including the formal 45-day comment period, will be announced on a later date by a separate public notice.


 

The draft text includes three separate Articles concerning:

  • Egg-laying hens and the covered products of shell eggs and liquid eggs as specified
  • Clarifying definitions for exceptions to confinement requirements
  • Requirements and procedures for certification and the accreditation of third-party certifiers


 

Comments and recommendations should be submitted no later than 5:00 PM PST, January 31, 2020. Comments must be submitted via electronic mail with any attachments in PDF at the following address: CAVET@cdfa.ca.gov


 

Egg Week

12/26/2019

USDA Weekly Egg Price and Inventory Report, December 26th 2019.

  • Hen numbers in production up 3.8 million to 336.7 million .
  • Shell inventory down by 8.0 percent reflecting pre- Christmas purchases by chains.
  • USDA Midwest benchmark generic prices for Extra large and Large down 15.5 percent on average to 93.5 and 91.5 cents per dozen. Mediums were down 10.6 percent to 67.5 cents per dozen.
  • Price of breaking stock down 36.5 percent to 36.5 cents per dozen. Checks down 51.9 percent to 25.0 cents per dozen reflecting shell-egg prices. Both categories are now below the USDA November benchmark nest-run production cost.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on December 23rd the Midwest wholesale prices for Extra Large and Large as delivered to DCs were down 15.4 and 15.7 percent respectively to 93.5 and 91.5 cents per dozen. Mediums were 10.6 percent lower at 67.5 cents per dozen reflecting oversupply from young flocks. Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 59.8 cents per dozen in November, (excluding provisions for packing and transport). The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

The December 23rd USDA Egg Market News Report (Vol. 66: No. 51) documented a USDA Combined Region value rounded to the nearest cent, of $1.17 per dozen delivered to warehouses for the week ending December 17th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.09 per dozen. At the high end of the range, price in the Southeast Region attained $1.20 per dozen. The USDA Combined Price last week was 33 cents per dozen below the three-year average of $1.40 per dozen and 13 cents per dozen below the price during the corresponding week in 2018.


 


Plaintiffs Fail in Antitrust Lawsuit

12/26/2019

On December 12th a jury in Pennsylvania returned a verdict in favor of the defendant Rose Acre Farms and the UEP.

 

At issue was a claim that the 2008 UEP welfare standards effectively reduced production, limited competition and resulted in increased egg prices.  The attorneys for the defendants clearly demonstrated that there was no conspiracy and that in fact egg prices declined after standards were adopted and implemented.

 

Plaintiffs included the major U.S. supermarkets in all states.  After a six-week trial, the jury after dismissed the plaintiff’s claims after deliberating for one and a half days.

 

The plaintiffs claimed $1 billion in damages and would if successful in their claim have requested punitive damages of $3 billion.

 

The verdict should serve as a warning to avaricious lawyers intending to shakedown egg producers either individually or as a group.  Rose Acre Farms has demonstrated over a number of class-action lawsuits and litigation with the USDA that it is prepared to defend any legal claim on the basis of its merit and not submit to coercion or extortion.


 

China Imports U.S. Soybeans

12/25/2019

According to the USDA, China purchased 42.3 million bushels of soybeans in October and 94.1 million tons in November after resuming duty-free importation. The value of shipments was $1.19 billion at $320 per metric ton and represented 7.7 percent of projected 2019 exports of 1,775 million bushels.

 

During the two-month period, China imported 244.4 million bushels of soybeans from Brazil. The November volume of 105.1 million bushels was 25 percent lower than during the corresponding month of 2018.

 

CME Prices for soybeans advanced from 920 cents per bushel on October 1st to 937 cents on November 1st. The market declined to 870  cents on December 2nd but climbed sharply after announcement of the Phase-1 Agreement  with China attaining 940 cents on December 23rd.


 

Almark Recalls Hard Cooked Peeled Eggs and Products from Gainesville GA. Plant

12/25/2019

Following release of an advisory by the FDA concerning potential Listeria contamination of hard-cooked peeled eggs and products on December 18th Almark Foods recalled all products from their Gainesville GA. Plant on December 23rd. This followed a limited recall of bulk product packed in pails on December 20th The most recent action taken “out of an abundance of caution” encompasses retail, pillow pack, pouch, frozen, diced and kit products with “Best if Used By” dates extending to March 2nd 2020.

 

All production at the plant has ceased to allow for thorough decontamination, modifications to drains and equipment where necessary and modification of production procedures and documentation. The plant will reestablish production when environmental sampling confirms the absence of contamination. The action does not affect the Almark plant in Yuma, AZ.

The investigation by the CDC disclosed a total of seven cases of listeriosis occurring in 2017 and the current year in five states. There were 4 hospitalizations and one fatality. The application of whole-genome sequencing has shown commonality among the plant isolates and the pathogen obtained fro patients.

 

Listeria monocytogenes was identified in two of 105 swabs collected in the plant over the period February 5th through 13th 2019. These were from a drain in the peeling room and from conveyor regarded as a food-contact surface. A 483 warning letter was issued by the FDA following the inspection that revealed some deficiencies in documentation and handling of product. Almark rectified problems including the installation of a stainless steel sump pump and revised their HACCP plan to include Listeria and Clostridium as hazards.

 

The recall has implications for consumers, retailers and food manufacturers incorporating Almark egg products into prepared salads and meal kits. Many national brands and chains are involved.

 

Listeriosis is a potentially life-threatening infection for pregnant mothers and their unborn children, neonates, the immunosuppressed and the elderly. It is considered significant that despite the extensive production by Almark there were only seven cases diagnosed over a two-year period. Notwithstanding the low incidence rate in this outbreak the action taken by Almark in issuing a recall reflects an appropriate response to the situation.

 

It is emphasized that the outbreak is limited to products from a specific plant and does not imply that hard-cooked peeled eggs are a hazardous ready-to-eat food. Listeria is not associated with hen flocks, shell eggs or pasteurized egg products.


 

DOJ Responds to Challenge by Puerto Rico Cock Fighters

12/24/2019

Cock fighting is illegal in all U.S. states and territories. Adherents of the ‘sport’ have brought suit against the Department of Justice challenging Federal legislation concerning the sponsoring or exhibiting at cock fights, possessing game cocks or engaging in other animal fighting practices. The Department of Justice has filed a motion for summary judgement claiming that the United States has the authority to outlaw staged animal fights in the U.S. territories.

Three retired Attorneys General of states with a long tradition of cock fighting confirmed that legislation in their jurisdictions bans cock fighting. Drew Edmondson, Attorney General of Oklahoma for 16 years shepherded the state legislation declared constitutional by the Oklahoma Supreme Court. Patricia Madrid, former Attorney General of New Mexico banned cock fighting in 2007 and her state was the 49th to enact legislation. Louisiana Attorney General Richard Ieyoub wrote a law banning cock fighting adopted by the Legislature despite the history of the practice   entrenched in Cajun culture.

The importance of fighting cocks to the poultry industry is exemplified by the persistence of ‘exotic’ Newcastle disease (END) in San Bernardino and Riverside Counties in southern California. The infection is now regarded as endemic in backyard and fighting-cock flocks. Game birds were also involved in the previous outbreak of END in the region in 2003 with extension to two egg-production complexes.

Cock fighting is still conducted in American Samoa, Guam, the Marianna’s, Puerto Rico and the U.S. Virgin Islands.


 

Signing of Phase-1 U.S.-China Trade Agreement Anticipated in January 2020

12/24/2019

In commenting on the U.S.-China Phase-1 trade agreement, President Trump noted that he will meet with Premier Xi of China to sign the agreement as soon as can be arranged. According to U.S. Trade Representative, Ambassador Robert Lighthizer, the Agreement extends to 86 pages and is undergoing review by legal and trade experts.

The major problem relating to agreements with China relates to translation. Drafts have been exchanged are being reviewed to ensure their correspondence with intent. It is anticipated that the agreement will be signed in Washington in early- to mid-January 2020. The President is due to travel to Davos Switzerland to attend the World Economic Forum at the end of January but will not meet with Premier Xi.


 

Nestle Continues to Divest Brands

12/24/2019

Following a recent announcement that Nestle will merge its ice cream business with Forneri of Switzerland against payment of $4 billion. Nestle will sell a 60 percent controlling stake in their Herta cold-cut meats business to Casa Tarradellas of Spain.

Financial analysts have noted that the combination of U.S. ice cream brand Haagen-Dazs to Fronteri provides a multi-national scope which will benefit Nestle if and when the joint venture is spun-off as an IPO. The arrangement with Casa Tarradellas to purchase a controlling interest suggests that Nestle was unable to arrange for outright purchase.


 

EPA Finalizes RFS for 2020

12/24/2019

On December 19th, Administrator of the Environmental Protection Agency, Andrew Wheeler announced the 2020 Renewable Fuels Standard (RFS) for 2020. The significant components are:

  • Conventional biofuel, essentially from corn ethanol will be maintained at 15 billion gallons as established by Congress
  • Cellulosic biofuel volumes will increase by 117 million gallons over the 2019 level
  • Biomass-based diesel volume in 2021 will be equivalent to 2020 but in excess of the statutory requirement
  • EPA will examine labeling requirements for E15 in an attempt to move above the de facto blend ceiling

Cellulosic biofuel should attain 0.6 billion gallons in 2020, biomass-based diesel will amount to 2.4 million gallons and advanced biofuel, 5.1 billion gallons expressed as ethanol-equivalents.

In order to ensure that 15 million gallons of ethanol is added to gasoline in the U.S., the EPA proposes production of 15.8 billion gallons for the domestic market to allow for Small Refinery Exemptions (SREs).

In an end-of-year comment, the Environmental Protection Agency listed policy decisions which benefit the agricultural sector. These include:

  • Repeal of the 2015 Waters of the United States (WOTUS) rule
  • Terminating sue and settle practices
  • Registering atrazine herbicide
  • Exempting farm animal waste emissions from the burdensome reporting requirements under the Emergency Planning and Community Right to Know Act (EPCRA)

The 2020 final rule on the RFS issued on December 19th was criticized by representatives of the biofuels industry and corn-state legislators who had lobbied hard for increases in the RFS. Although the requirement for blending was increased from 19.92 billion gallons in 2019 to 20.09 billion gallons for the coming year, the corn-based conventional biofuel, essentially ethanol mandate was unchanged at 15 billion from 2019.

The biofuels industry is opposed to Small Refinery Exemptions and the EPA will base the issue of SREs on recommendations from the Department of Energy and will take into account the volumes affecting 2016 through 2018.


 

JUST Egg-Substitute to be Manufactured in Wisconsin Plant

12/23/2019

A number of publications devoted to the vegan lifestyle have recently promoted the virtues of an egg substitute prepared from mung beans and other ingredients.

JUST, formerly known as Hampton Creek and previously Beyond Eggs, founded and operated by Josh Tetrick recently purchased The Del Dee Foods plant in Appleton, WI.

 

This facility previously processed whey, a byproduct of the dairy industry.

Tetrick hopes that scale of production will reduce the cost of his product now estimated at 20 cents per egg-equivalent down to five cents. To quote Tetrick, “Separating the protein from the bean requires talent, proprietary processing and a supportive community. We found all that and more at Appleton.”


 




































































































































































































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