Egg Industry News


SANOVO Technology Group Acquires SonoSteam from FORCE

05/22/2020

Sanovo recently acquired SonoSteam, the developer of technology combining application of steam and ultrasound delivered from specially designed nozzles. The process provides efficient chemical-free decontamination for food products and non-food surfaces. A specially constructed treatment chamber that enhances the SonoSteam disinfection system also has wide use within the food industry for green produce, vegetables and fruit as well food contact surfaces including conveyors, trays, trolleys, crates and cutting knives etc.

 

SANOVO acquires all assets, patents, trademarks, name rights, production premises and will retain the technical staff related to the SonoSteam business that will be incorporated into SANOVO Biosecurity A/S with the current Division Director, Niels Krebs from SonoSteam, continuing as president.

 

Michael Midskov, CEO of SANOVO Technology Group stated, “we are proud of the acquisition of SonoSteam, which will allow us to offer environmental and friendly solutions for the removal and reduction of bacteria on table and hatchery eggs, and other food products. With SonoSteam, it is possible to effectively remove and reduce bacteria on washed plastic trays, pallets, shims, and conveyer belts in the egg industry, as well as in other industries where sterilization and bacteria removal is needed/. This is in line with our other business areas outside the egg industry”.

 

Juan Farré, CTO of FORCE Technology that supported SonoSteam noted , “we have spent many years developing and testing SonoSteam, and we believe it is time to bring these solutions to the market”

 


 

Replacement Components for Old Cage and Floor Installations from Fasteners Resource

05/21/2020

Fasteners Resource offers a range of products to prolong the operational life of old cage and floor systems requiring replacements and upgrades. Available components include:-

  • Cage floors, doors, partitions A-frames.
  • Durable curtains to replace flimsy OEM material
  • Feed trough either in stock or custom formed, brackets, chain and accessories.
  • Fabrication of obsolete and unobtainable parts including sprockets, bearings, drive motors and manure belt drives
  • Fasteners, tools and safety equipment

 

Fasteners Resources has welding, forming and bending capability to facilitate re-builds allowing restoration of existing barns without the need to replace systems, prolonging the life of houses thereby saving capital.

 

For additional information click on to the Fasteners Resource logo on the right side of the Welcome page or contact Todd Heimler at (248) 933 4868.


 

Agriculture Now Represented on White House Coronavirus Task Force

05/21/2020

On Monday, May 18th President Trump announced the appointment of additional members to the White House Coronavirus Task Force.  These include Secretary of Agriculture Dr. Sonny Perdue, Labor Secretary Eugene Scalia and Dr. Francis Collins, Director of the National Institutes of Health.


 

Michael Foods to Manufacture and Distribute JUST Egg Substitute

05/21/2020

A recent agreement between Michael Foods and JUST, founded and managed by Josh Tetrick, will undertake manufacturing and distribution of the JUST Egg substitute to food service companies.

 

Mark Westphal, President of Michael Foods, a subsidiary of Post Holdings, stated “Eggs will continue to be a nutritious and affordable staple in America’s diet and JUST Plant based egg products provide a great complement to our value-added eggs by allowing customers to serve every consumer their preference.”

 

Currently, JUST is supplied as either a liquid or a pre-baked folded egg patty. Protein is derived from mung beans, but the nutritional content is generally regarded as inferior to real eggs.  Whether the association with Michael Foods will materially increase, market penetration of the egg substitute will be indicated by relative future sales of both the product and real eggs.


 

Target Reports on Q1 Results

05/20/2020

 

In a press release dated May 20th Target Corporation (TGT) announced results for the First quarter of 2020 ending May 2nd.

 

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 US$ x 1,000 except EPS)


Brian Cornell, CEO

1st Quarter Ending

May 2nd 2020

May 4th 2019

Difference (%)

Sales:

$19,615,000

$17,627,000

+11.3

Gross profit:

$5,105,000

$5,379,000

-5.1

Operating income:

$468,000

$1,135,000

-58.8

Pre-tax Income

Net Income

$329,000

$284,000

$1,021,000

$795,000

-67.8

-64.3

Diluted earnings per share:

$0.56

$1.53

-63.4

Gross Margin (%)

26.0

30.5

-14.8

Operating Margin (%)

2.4

6.4

-62.5

Profit Margin (%)

1.5

4.5

-66.7

Long-term Debt:

$16,322,000

$13,613,000

+19.9

12 Months Trailing:

 

 

 

Return on Assets (%)

7.0

 

 

Return on Equity (%)

28.3

 

 

Operating Margin (%)

6.1

 

 

Profit Margin (%)

4.2

 

 

Total Assets

$44,806,000

$42,779,000

+4.7

Market Capitalization

$60,075,000

 

 

 

52-Week Range in Share Price: $76.80 to $ 130.24 50-day Moving average $109.21

Market Close Tuesday May 19th 123.20. Noon May 20th post-release $120.13. TGT beat on the top line but COVID expenditure reduced net earnings and EPS.

Forward P/E 25.6 Beta 0.8

 

Same-store sales growth was 10.8 percent. Revenue per transaction up 12.5 percent. Food and Beverage and Durables both up 20 percent; Clothing down 20 percent. Digital sales increased by 141 percent and Same-day delivery (Shipt; Click-and –collect; Drive-through) by 278 percent

 

In commenting on Q1 results Brian Cornell, chairman and CEO stated "Throughout the first quarter, our team and guests faced unprecedented challenges arising from the spread of COVID-19. In the face of those challenges, our team showed extraordinary resilience as guests relied on Target as a trusted resource for their families. With our stores at the center of our strategy, and a significant investment in the safety of our team and guests, our operations had the agility and flexibility needed to meet the changing needs of our business,"

Cornell concluded "With the dedication of our team, the benefit of a sustainable business model and a strong balance sheet, we are confident Target will emerge from this crisis an even stronger retailer, with higher affinity and trust from our guests."

COVID-19 related costs (decontamination, increase in hourly rate of $2, bonuses and incentives) amounted to an incremental cost of $500 million in Q1.

TGT withdrew 2020 guidance based on future uncertainty concerning the economy.


 

NIH Partners with Industry to Combat COVID-19

05/20/2020

Dr. Frances S. Collins, Director of the National Institutes of Health (NIH) has announced an initiative partnering his institute with industry leaders to accelerate progress in combating COVID-19 and future pandemics.  The Accelerating COVID-19 Therapeutic Interventions and Vaccines Initiative (ACTIV) has been established by the NIH and the Foundation for the NIH.  A total of eighteen biopharmaceutical companies, federal agencies and the EU Medicine Agency are involved.

 

The initiative was outlined in a viewpoint article* published in the journal of The American Medical Association.

 

ACTIV comprises four working groups co-shared by a scientist from NIH and a colleague from industry.

 

The working groups will comprise:-

  • Therapeutics Clinical Working Group to determine the benefits of drug therapy for COVID-19
  • Preclinical Working Group to evaluate testing of candidate therapy and vaccines
  • Clinical Trial Working Group to establish efficient test systems for therapy and vaccines
  • The Vaccines Working Group, focusing on evaluation of vaccine candidates

*Collins, F. S., and Stoffels, P. Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV): an unprecedented partnership for unprecedented times. JAMA. DOI:10.1001/jama.2020.8929 (2020)


 

Environmental Spraying of Disinfectants Useless Against COVID-19

05/20/2020

According to the World Health Organization, extensive environmental spraying of disinfectants especially on roads, and fogging large public areas does not effectively destroy SARS-CoV-2, the virus responsible for COVID-19.  Commonly used disinfectants including QATs, formaldehyde and chlorine-based compounds are ineffective when inappropriately applied.

 

Thorough disinfection ("deep cleaning") involving removal of organic matter followed by rinsing and application of a disinfectant is however effective especially on work surfaces or points where human contact occurs.


 

Egg Week

05/18/2020

USDA Weekly Egg Price and Inventory Report, May 20th 2020.

  • The U.S. flock in production was 322.5 million, down 0.7 million from the previous week.
  • Shell inventory up by 6.9 percent after a 2.2 percent fall last week indicating an imbalance in the supply to demand equilibrium. This is attributed to an increase in the size of the Nation’s producing flock and hence availability of eggs.
  • USDA Midwest benchmark generic prices for Extra large and Large were down 13.5 percent to averages of 77.5 and 75.5 cents per dozen respectively. Mediums were up by 1.6 percent to an average of 62.5 cents per dozen. The market was lower and probably bottomed after a week of relative stability following five successive weekly declines in price.
  • The price of breaking stock in the Midwest was up 40.6 percent on average. Checks were up 136.8 percent.

 

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on May 18th 2020 the Midwest wholesale prices for Extra Large and Large as delivered to DCs were down 13.5 percent to averages of 77.5 and 75.5 cents per dozen respectively. Mediums were up 1.6 percent to 61.8 cents per dozen reflecting a restoration of balance between availability and demand across all sizes Prices should be compared with the USDA benchmark average 5-Region blended nest-run cost of 58.4 cents per dozen in April 2020, (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 May 18th 2020 USDA Egg Market News Report (Vol. 67: No. 20) documented a USDA Combined Region value rounded to the nearest cent, of $0.97 per dozen delivered to warehouses for the week ending May 11th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.88 per dozen. At the high end of the range, price in the South Central Region attained $1.03 per dozen. The USDA Combined Price last week was $0.25 per dozen above the three-year average of $0.72 per dozen and approximately $0.40 cents per dozen above the price during the corresponding week in 2019.


 


MPF to Present Virtual Trade Show & Convention in August

05/18/2020

As anticipated the Midwest Poultry Federation (MPF) has announced that the 2020 in-person convention, re-scheduled for July has been cancelled. As an alternative the MPF will offer a virtual trade show and conference on-line on August 12th and 13th 2020.

 

The leadership team met several times last week to weigh options and the full board unanimously endorsed the decision made to protect exhibitors, staff and attendees.

 

President of the MFP, Greg Nelson stated “given the current COVID-19 situation and the unknowns surrounding large gatherings, we cancelled the in-person convention” He added  “the 2020 Virtual MPF Convention gives us a full trade show and convention component online – the next best thing to being together in person.” 

 

 

The virtual platform will showcase the arranged MPF education content. Connections between exhibitors and attendees will be achieved through a robust, 3-D graphical experience in which attendees will visit company booths in the Exhibit Hall, benefit from education sessions and interact with speakers.

 

Attendees who were pre-registered to attend the March Convention will be automatically registered to attend the virtual MPF event at no additional cost. Ticket purchases for the MPF Unhatched Concert event and A Slice of Learning lunch will be refunded. Details for on-line registration will be forthcoming at www.midwestpoultry.com.
Information on participation in the virtual trade show is available from the Exhibits Manager, Teresa Sorenson at tsorenson@midwestpoultry.com

 

Current sponsors and their brands will be incorporated directly onto the virtual platform at no additional fee. If your company is not a current sponsor and would like to participate, contact Lara Durben at ldurben@midwestpoultry.com


Lara Durbin-the ultimate MPF Worker Bee

 

 


 

Rep. Ted Yoho Rejects Masks

05/18/2020

Rep. Ted Yoho (R-FL) has deviated from his colleagues by not wearing a mask in the hallways of the Capitol. When asked why not, he replied "there is just no need". He justifies his decision on the basis of herd immunity and he believes that the only way the population will be protected is by exposure. He is also of the persuasion that COVID-19 is no more serious than influenza. 


In eschewing masks in public, Rep. Yoho is at variance with recommendations from the Surgeon General and the CDC. His position is even more difficult to understand given that he graduated from Florida State College of Veterinary Medicine in 1983.  


Dr. Yoho has consistently downplayed the importance of COVID-19 stating that the virus has been blown out of proportion and he compares local, state and national response to “cinematic fiction”.  With 1.4 million cases and 90,000 fatalities and rising, that’s a heck of a movie.  
 


 

Recommended Reading: A Natural Mistake by Dr. James T. MacGregor

05/18/2020

There is a wide misapprehension that the descriptors natural, organic and botanical in advertising parlance signify safe, healthy and nutritious. Dr. James MacGregor incisively dissects these presumptions in A Natural Mistake indicating that in many situations natural and organic may be deleterious to health.

 

Dr. MacGregor earned a PhD in toxicology and biochemistry from the University of Rochester, NY. and he is a diplomate of the American Board of Toxicology.  His credentials include directing the Safety Evaluation Program at the U.S. FDA, directing programs at the Stanford Research Institute and the USDA.  He has consulted extensively for major international companies, non-profits and governmental organizations worldwide on aspects of food and pharmacologic safety.

 

The text cites specific examples of toxicity from natural products. These include Balkan nephrosis caused by consumption of supplements or food containing Aristolochia, the Fen-Phen debacle, acute liver toxicity from herbal supplements, fava bean toxicity and interactions between pharmaceuticals and St. John's Wort and grapefruit.

 

Based on his extensive experience in regularity agencies he notes deficiencies in oversight of herbal supplements and nutritional additives and the unjustified protection afforded manufacturers under the Dietary Supplement Health and Education Act of 1994.  This legislation essentially presumes all dietary supplements are inherently safe.  Inexplicably these compounds are not subject to the extensive and rigorous tests for both safety and efficacy required of drugs.  For the FDA to take action it is necessary for the agency to demonstrate that nutritional supplements are in fact toxic or deleterious.  A second enigma is that advertising of supplements is regulated by the Federal Trade Commission and not by the FDA. 

 

A Natural Mistake is an easy read and should be considered by both marketing and R&D managers of companies either actively promoting or considering nutraceuticals or additives.  Guidance on regulation of these compounds and how they have been abused in the past should serve as important lessons in a litigious environment.

 

The 213-page text includes a section with approximately 150 references documenting the opinions and recommendations provided.

 

One take-home message from the book is that a healthful lifestyle with moderation in food intake and exercise contributes to longevity and freedom from metabolic conditions. A second reality is that pesticide residues in U.S. foods are not a significant health concern despite publicity generated by promoters of organic foods, macrobiotic diets and other fad regimens.


 

Status of 2019 Corn and Soybean Crops

05/18/2020

The USDA Crop Progress Report released on May 18th documented corn and soybean planting proceeding ahead of the 5-year average. Topsoil and subsoil moisture levels were lower than the corresponding weeks in 2019 with surface moisture drier than in 2019, expediting planting. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2020 harvest in October.

Reference is made to the May 12th WASDE Report #600 accessible under the STATISTICS tab for projected 2020 acreage and yields.

WEEK ENDING

Crop

May 10th

May 17th

5-Year Average

Corn Planted (%)

Corn Emerged (%)

 

 

67

24

 

80

43

 

71

40

Soybeans planted (%)

Soybeans Emerged (%)

 

38

7

53

18

38

12

 

Crop Condition

To be recorded May 25th.

V. Poor

Poor

Fair

Good

Excellent

Corn 2020

Corn 2019

 

 

 

 

 

 

 

 

 

 

 

Soybeans 2019

Soybeans 2018

 

 

 

 

 

 

 

 

 

 

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

4

14

64

18

Past Year

1

7

61

31

Subsoil moisture: Past Week

4

12

69

15

Past Year

1

6

64

29


 

Updated USDA Projections for U.S. Egg Production

05/18/2020

The USDA Economic Research Service issued an updated forecast of egg production on May 18th 2020 revising the previous April 15th 2020 report. The volume of eggs produced and per capita consumption in 2020 were both increased by 0.6 percent compared to 2019 data. The projected benchmark New York unit price for 2020 was increased 36.0 percent from 2019 due to the effect of COVID-19 panic buying in March.

 

Revised production data for 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 volume of production in 2019. The USDA forecast to be revised in June will provide greater clarity on reopening of the economy. May 2020 data is shown in the table below:-

 

Parameter

2015

(actual)

2016

(revised1)

2017

(revised)

2018 2019 2020 % Difference

(revised) (revised) (projection) 2019-2020

 

EGGS

 

 

 

 

Production (m. dozen)

6,938*

7,509

7,811

8,042 8,265 8,312 +0.6

Consumption (eggs per capita)

255.8*

275.3

282.1

287.8 292.9 294.7 +0.6

New York price (c/doz.)

182*

86

101

138 94 130 +38.3

 

Source: Livestock, Dairy and Poultry Outlook –May 18th 2020

Note 1. Production data for 2016 through 2018 were revised from the April 2020 report without explanation by the USDA-ERS.

 

*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.


 

Ahold-Delhaize Group Posts Q1 Results

05/18/2020

Multinational, Ahold-Delhaize with an extensive supermarket presence in the EU and the U.S. published results for the first quarter of 2020 on May 7th.  Net sales were $16.86 billion, operating income attained $89.3 million and net income $600 million with an EPS of $0.55.

 

The U.S. contributed 62 percent of sales amounting to $10.48 billion according to Frans Muller, president and CEO who commented that results were significantly impacted by COVID-19.  In the U.S., the company recorded a 42 percent increase in online sales amounting to $300 million. 

 

The company operates 707 click-and-collect points with a target of 1,000 in 2020.  The timeline for remodeling U.S. stores has been extended due to COVID-19.  Excluding fuel, U.S. banners recorded a same-store sales growth of 13.8 percent. Aaahold-Delhaize banners in the U.S. include Food Lion, Stop & Shop, Hannaford, Giant and delivery service Peapod.


 

USAPEEC Instrumental in Facilitating Egg Exports to Mexico

05/17/2020

Authorities in Mexico have altered requirements for eggs shipped from the U.S.  The major change relates to traceability and documenting the origin of eggs and egg products shipped to Mexico.

 

The USDA Agricultural Marketing Service will amend exports certificates in conformity to the required changes.

USAPEEC has been instrumental in notifying the industry of changes and exporters were informed of new regulations in the May 15th edition of MondayLine.


 

Role of Pets in COVID-19 Transmission

05/17/2020

Anecdotal and verified reports of a few cases of COVID-19 in cats and dogs have surfaced since the advent of the pandemic.  Given the numbers of infected people and the proportion of pets in households, it does not appear that domestic pets either susceptible or are a factor in introducing infection into a home.  Initial studies suggest that pets acquire infection from humans.

The University of Washington Center for Pandemic Preparedness has initiated a structured evaluation of the epidemiologic relationship between owners and their pets.  The study will enroll families with one or more member having been diagnosed with COVID-19 and will test pets including dogs, cats, ferrets and hamsters for the presence of SARS-CoV-2 virus.

 

Clearly if households are following strict quarantine at home, pets should not be allowed to roam. 

 

Previous studies conducted by an institute in Germany confirmed that chickens and hogs are refractory to SARS-CoV-2 and are not involved in the epidemiology of the infection.


 

AEB And EIC Will Have to Intensify Promotion of "Real Eggs"

05/17/2020

According to press reports, Just, the company founded and managed by Josh Tetrick has entered into a strategic alliance with the Emsland Group in Germany.  This company manufactures pea-derived proteins for the food industry.  Emsland is a farmer-owned cooperative established in the 1930s.

 

Despite the rise in awareness of sustainability and welfare issues in Germany, Emsland and similar companies have not appreciably affected the increase in the number of hens providing eggs to the German population over the past few decades.  Germany is a major importer of eggs from other EU nations including Holland and Poland.

 

Univar Solutions Inc., a U.S.-based multinational, has introduced pea-based ingredients intended to displace eggs in bakery applications.  This company promotes the emulsifying properties of vegetable-based egg substitutes for sauces and mayonnaise. 

 

Following the large increase in the price of egg products due to the 2015 HPAI epornitic, the AEB established a campaign to promote Real Eggs which has been successful and has in large measure restored the volume of egg products in the commercial baking and confectionary industries.  It is obvious that check-off funds directed towards new product development using eggs and also promoting the inherent functional properties of eggs should be intensified to offset competition from alternatives.


 

Slow Return of Conventional Restaurants Predicted After COVID-19

05/17/2020

Packaged Facts notes that full pre-COVID-19 recovery by conventional and casual dining restaurants might not occur before three years. Only slow growth in these sectors is anticipated with numerous permanent closings.  The May 15th article projects that twenty percent of full-service restaurants may close permanently as a result of the prolonged COVID-19 restrictions and subsequent economic recession. 

 

Fast-food chains will be affected to a lesser extent than full-service restaurants due to their reliance on drive-through and takeaway.  On-premise dining will be restricted by social distancing and a reluctance to patronize restaurants even if COVID-19 restrictions are lifted.  Only with introduction of an effective vaccine of proven efficacy can there be a restoration of restaurant traffic.


 

COMMODITY REPORT: MAY 15th 2020.

05/15/2020

  • The financial and economic implications of the COVID-19 pandemic are becoming more apparent in the U.S. economy. Corn and soybeans both decreased slightly in price this past week. Corn futures for July delivery were lower by 0.3 percent compared with the quotation on May 8th.  Soybeans were 1.5 percent lower compared with the May 8th quotation for July delivery. Anticipated increases in price have not materialized after signing the Phase-One trade agreement with China or following ratification of the USMCA.
  • Prospects for commodity exports to China are apparently still restrained but less by the logistic restrictions imposed by the last phases of the COVID-19 outbreak. China has reduced their short-term demand for soybeans as a result of continuing losses from African swine fever and disruption of poultry production that is now recovering. April imports of soybeans by China amounted to 6.71 million metric tons (246 million bushels), 14.8 percent lower than during April 2019. Soybeans from Brazil are priced more competitively than from the U.S. due to availability and a favorable currency exchange. The USDA projects that 1.8 billion bushels of soybeans will be imported by China from Brazil in 2020. The U.S. hopes to commence shipping in quantity during late summer.

 

 

Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S - China Phase-One agreement signed in mid-January incorporating U.S. tariff rescissions, promised purchases of agricultural commodities, concessions on some structural issues by China and strengthened enforcement provisions. A telephone meeting between senior officials of the U.S. and China on Friday May 8th resulted in a reassurance that China would fulfill its obligations with respect to imports of U.S agricultural products. Both sides accepted the need to improve relations damaged by recent injudicious rhetoric relating to the origin of COVID-19.
  • It is anticipated that China will take advantage of low world prices for commodities to import 20 million tons of corn (787 million bushels) and 10 million tons of soybeans (365 million bushels) to add to reserves. The U.S. expects to supply part of this requirement
  • Imports of soybeans from Brazil were delayed by inclement weather and port disruptions during the first quarter of 2020, resulting in soybean stocks falling to a multiple-year low. Imported consignments increased stocks to 4.26 million tons (157 million bushels), up 28.7 percent from March 2020.
  • The market is now more accepting of the reality that future shipments of soybeans to China will not take place according to the quantities promised by the Administration after signing the Phase-One agreement.
  • Total world soybean shipments from the U.S. in 2020 YTD have amounted to 5.26 million tons, (193 million bushels), approximately 9.3 percent of the quantity required to meet the May USDA WASDE projection of 2.055 billion bushels. Through March 2020 soybean shipments attained an average of 16.5 million bushels per week compared to a quantity of 30.3 million bushels (1,102 million metric tons) per week to meet the projected export target.
  • Domestic U.S. soybean and soybean meal demand is currently constrained by cutbacks in the intensive livestock and poultry sectors as impacted by COVID-19.
  • Justifiable uncertainty exists regarding the spread of COVID-19 to other Asian nations, Europe and North America with the potential to create a worldwide depression as economic activity is curtailed

 

Questions still exist:-

 

  • Traders are reviewing projected ending stocks for the 2019 crop and taking into account the initial planting intentions reflecting a February USDA survey of corn and soybean acreage for 2020 before the advent of COVID-19 that distorted production, distribution and consumption of food.
  • The optimistic projections for planting corn and soybeans in 2020 as published on March 31st by the USDA are materializing. Planting is advancing at a rapid pace.
  • A U.S. trade agreement with the U.K. should be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation. Negotiations commenced this past week between Amb. Robert Lighthizer and his U.K. counterpart Minister Elizabeth Truss. A bilateral agreement will have to overcome disagreements over the use of Huawei communications equipment by the U.K. and chlorination applied to process U.S. chicken.

 

Compared with the May 8th 2020 close, the CME quotation for July corn posted at 15H00 on May 15th was down by 1cent per bushel to 319 cents.  China purchased 567,000 tons of corn on Friday 3rd April valued at $73 million. This quantity represented 1.3 percent of projected U.S. corn exports in 2020. The social restrictions imposed as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020 addition to gasoline. Half of U.S. ethanol fermentation capacity is off-line at present.


 


AEB Reports on Retail Egg Supply

05/15/2020

Following panic buying in early March, the American Egg Board initiated weekly surveys to determine purchase patterns among consumers and the availability of eggs. Based on interviews of 1,000 consumers through the period May 1st- 4th, it was determined that egg supplies have increased.  Of those interviewed, 36 percent reported that shelves were fully stocked with eggs at their local stores representing a 38 percent increase over the survey conducted in mid-April.  Approximately one-half of respondents stated that there was no limit on the number of eggs they could purchase during a single visit to a supermarket.  This is down from 62 percent in mid-April.

 

In reviewing consumer purchasing trends, among heavy egg buyers classified by buying more than three dozen per month, 33 percent are purchasing more than usual, 57 percent purchased the same as usual and only 10 percent less than usual.  Among all egg consumers, 21 percent indicated that they are now purchasing more than usual, 66 percent the same as usual and 13 percent less than usual.

 

The implications from the consumer responses, irrespective of category of heavy egg buyers or of general consumers, it is likely that more egg will be consumed after COVID-19 restrictions are lifted.  Despite the fact that restaurants are slowly opening in most states, a combination of habituation to home-meal preparation over the past six weeks of restrictions and the high unemployment rate will favor home cooking. Accordingly egg consumption will in all probability rise.


 

Hamlet Protein Presents Webinars to Maintain Contact with Clients

05/15/2020

In a May 7th press release, Hamlet Protein, based in Denmark, with a production center in Finley, OH., noted the success of a series of webinars directed to the feed and intensive livestock industry.  Recently a program in China attracted 20,000 attendees.  Topics included feeding piglets and a ban on antibiotic growth promoters to be implemented in 2010.  Prior to the program, the technical director for Hamlet Protein in China, Dr. Eugene Li conducted an on-line poll to determine the range and identity of topics to be reviewed.

 

Hamlet Protein recently organized a webinar for North America with guest speakers reporting on availability of feed ingredients and the current market situation and outlook.

 

In the EU, Hamlet Protein presented webinars included replacement of sow milk, anti-nutritional factors and the changing circumstances in the market.

 


CEO of  Hamlet Protein, Erik Visser

CEO of Hamlet Protein, Erik Visser commented, “We want to keep close to our customers, also during these unprecedented times.  On-line events whether for group sessions or smaller meetings have proven very effective in continuing our technical support to customers around the world.”


 

Proctor and Gamble Develops Bio-based Acrylic Acid Technology

05/15/2020

Proctor and Gamble has developed and patented technology to convert lactic acid into acrylic acid used in absorbent hygiene products, paints and a wide range of household consumer items.  The technology has been licensed to Cargill to commercialize production from fermentation of corn.  This innovation in small measure may support farmers who face declining revenue from oversupply occasioned by decreased demand for ethanol.


 

Val-Co Second-generation Variable Speed V-Fan Now Available

05/15/2020

Val-Co has introduced the V-Fan that combines the benefits of variable speed operation with extreme efficiency from frequency control and a PMAC motor. At maximum speed the V-Fan delivers 35,000 CFM and provides 62.7 CFM/Watt2 at low speeds.  V-Fans are direct-driven with a variable frequency drive mounted directly on the fan and preset at the factory.

 

 For further information and availability access the Val-Co website by clicking on to the company logo on the right side of the Welcome page.


 

AEB Appoints President and Chief Executive Officer

05/14/2020

The American Egg Board (AEB) announced that, effective June 1st, Emily Metz will assume the role of President and Chief Executive Officer succeeding Anne L Alonzo.

 

In commenting on her appointment Ms. Metz stated “our industry has not seen this much change and uncertainty in decades, and our producers need a visionary leader to help the industry adapt to a changing marketplace,”

 

Most recently, Metz was the head of Global Research and Development Communications and New Product Marketing for the world’s largest animal genetics company, the U.K.-based Genus Plc. Technologies.

 

Prior to joining Genus, Metz served as Chief of Staff at the National Milk Producers Federation (NMPF) where she also oversaw the industry’s animal welfare, sustainability and worker welfare program, the National Dairy Farmers Assuring Responsible Management (FARM) Program. 

 

Metz began her career at the U.S. Department of Agriculture as a speechwriter for the Office of the Under Secretary of Agriculture for Food Safety, rising through the ranks of agriculture trade associations and the private sector to serve in increasingly significant leadership positions in the animal agriculture industry.

 

 

Metz earned a BA in Journalism and Mass Communications and International Affairs from The George Washington University in Washington, D.C., followed by a Juris Doctorate from Seton Hall University in Newark, New Jersey and is licensed attorney in several jurisdictions. She has received numerous awards in public relations, communications and marketing from PR News, the U.S. Department of Agriculture and other organizations.


 

Gi-Ovo Supplies a Wider Range of Pallets

05/14/2020

The 1,200x 800 series of Gi-Ovo plastic pallets are available in either virgin or recycled Material.  The light configuration is intended for one-time use, prncipally for export.  The heavy duty pallet is designed for durability and extended life. 

 

For the 1,200 by 1,000 series, heavy duty pallets are available with either open or closed decks.

 

Plastic pallets are recommended to attain a high level of biosecurity, which cannot be achieved with wooden pallets. To obtain optimal benefit in suppressing infections such as coryza, pallets should be decontaminated using compatible commercial washing equipment as manufactured by Kuhl Corporation.

 

Details on Gi-Ovo pallets and Kuhl washers can be downloaded by clicking on to the respective company logos on the right side of the Welcome page.


Kuhl washer with EggsCargo System Pallet from Gi-Ovo

1000 Closed Deck

1000 Open Deck

 

 

 


 

SANOVO Establishes Strategic Alliance with Ovotrack

05/14/2020

Sanovo Technology Group has made an investment in Ovotrack  Holdings BV. This transaction establishes a strategic alliance with a company that is a global supplier of traceability and inventory management solutions for egg grading centers, processing plants and hatcheries. Ovotrack will continue to operate independently and Job Beekhuis will remain CEO of both Ovotrack BV. and Hatchtrack BV.

 

The first Ovotrack solution for traceability, labelling and inventory management was developed two decades ago in the egg-grading plant operated by the Beekhuis family. Since then, Ovotrack solutions have been installed at more than 100 egg grading centers, egg processing plants and hatcheries around the world. 

 

In commenting on the development, Job Beekhuis stated, “the market has changed and matured in the last decade. Traceability and inventory management are now crucial requirements for the egg and poultry sector. We needed a strategic partner to help us to accelerate our growth, so that we can keep servicing this growing market. We have been working together with SANOVO for a long time and we are very happy to strengthen our position with this partnership”.

 

Michael Midskov, CEO of Sanovo Technology Group stated “our customers are asking for more automation, traceability and increased software and equipment integration in their processing plants. Our customers want to be able to monitor every single step in their process, real-time and wherever they are – from the farm to the final customer. Collecting  ‘Big Data’ from all stages of the supply chain in the egg industry is important for learning and optimizing our machinery, equipment and the entire value chain for the benefit of our customers. Big Data and digitalization combined with our machines and equipment is of strategic importance for Sanovo Technology Group and the intensified cooperation with Ovotrack fits perfectly into that strategy”. 

Michael Behrendsen, CCO of Sanovo Technology Group added “Ovotrack will continue working with all manufacturers that supply equipment for egg grading, egg breaking and hatching”.


 

Sous Vide Cooking Reduces Salmonella on Shells in Trial in Australia

05/14/2020

Australia has a problem of egg-born salmonellosis involving both Salmonella Typhimurium and Salmonella Enteritidis.  Over the past decade, under pressure from supermarket chains, the industry has moved to cage-free and free range production increasing the incidence rate of Salmonella infection among consumers.  Eggs are not washed using a chlorine-based sanitizer as in the U.S. and there is no cold chain from the packing through to point of sale.

 

A research team at Flinders University determined that sous vide heating of eggs to 134 F for nine minutes destroyed Salmonella on the shell surface.  This is not a solution to a widespread problem.  With respect to Salmonella Enteritidis, the causal organism is within the egg and and an internal temperature of 165 F for at least 30 seconds is necessary to destroy the pathogen.  Alternative techniques include infrared treatment of shell eggs is now being adopted in Australia in preference to thermal bath immersion as used in South Korea and the U.S.

 

If the egg industry and Australia wish to eliminate egg born salmonellosis then a comprehensive program is necessary. In the U.S. this involved elimination from breeding stock, confinement of flocks to barns, a high levels of biosecurity, rodent suppression, solid immunization using available vaccines and frequent swab testing of  manure or litter of flocks to determine that they are not colonized with SE. Surface contamination with various serovars of Salmonella can be eliminated by appropriate washing using commercial equipment and not by immersion on farms.  It is necessary to maintain a cold chain from packing through to point of sale and both institutional and domestic kitchens should use best cooking practices to avoid contamination and to ensure that eggs are cooked before consumption. 

 

The sous vide approach to reducing shell surface contamination may well be valid, but it is impractical since the nine minute process is inconsistent with either commercial or domestic egg preparation.


 

COVID-19 Boosts Online Grocery Sales

05/13/2020

A recent survey confirmed that combining store pickup and home delivery, grocery sales increased 32.5 percent to $5.3 billion in April compared to the preceding month.  The number of customers however only increased by 11 percent to 40 million. The number of orders paralleled sales with a 33.3 percent increase to 62.5 million.  Average spending per order increased 3.7 percent to $85 per basket in April. 

 

Apparently only half of the households surveyed stated they were satisfied with online grocery service although this was up by three percent from March.  Problems include out-of-stock, limited availability and restricted time slots for pickup. These complaints reflect deficiencies in infrastructure extending from DCs to the curbside or customers’ front doors.

 

With relaxation of COVID-19 restrictions it is questionable whether all converts to alternative purchasing will revert to in-store shopping especially if chains are unable to resolve customer complaints and provide a more comprehensive and reliable service for both pickup and delivery.

 

The question also arises as to what will be required to bring consumers back in to stores when normality resumes and how different demographics will approach grocery shopping. What will probably occur is the emergence of specific categories of consumers such as mothers with young children that will favor curbside pickup, the elderly favoring home delivery and others patronizing large grocery chains with added features such as restaurants and attractions in search of a "destination experience".


 

President Releases Executive Order on Marine Finfish Aquaculture

05/13/2020

On Thursday, May 7th a Presidential Executive Order was issued approving the principle of finfish aquaculture in Federal waters.  This initiative would favor companies wishing to establish projects in U.S. waters. The Executive Order places jurisdiction for approval of projects under the National Oceanic and Atmospheric Administration with the implied imperative to expand seafood production.

 

The Executive Order and future implementation will be opposed by environmentalists and scientists who consider the action by the Administration to be injudicious.  Opposition to mariculture is based on projects in in Asia that have resulted in pollution and environmental degradation. The independent sea-fishing industry will also voice opposition.

 

The seafood industry is obvious in favor of displacing imports as domestic catches in the Gulf and along the Atlantic seaboard are declining. This is a result of over-fishing generally and adverse environmental impacts from the oil industry in the Gulf and eutrophication from agricultural runoff down the Mississippi resulting in ‘Dead Zones”.

 

There does not seem to be any specific reason why finfish cannot be successfully farmed by applying appropriate precautions and best management practices, although these are very large "ifs".  Irrespective of the Executive Order which appears at face value more political than practical, there will be little movement to commercialization since NOAA will have to develop regulations and environmentalist will fight proposals through the courts.


 

Recall of Eggs in France Due to Salmonella Contamination

05/13/2020

Approximately half a million eggs have been recalled in France by major chains Auchan, Carrefour, Systeme and Leclerc.  Eggs were produced between April 26th and May 14th and involved the Societe Matines Netto brand all with a single farm of origin code and signifying they were from caged hens. Why hens are still in cages after the 2012 EU ban is also a subject for investigation.

 

As in the U.S., egg purchases in France surged in late March extending into April as a result of home confinement.  The National Committee to promote eggs (CNPO) analogous to the AEB confirmed a 44 percent increase in sales corresponding to an additional 185 million eggs sold in April.  During the month frequent stock-outs occurred as a result of disruption in the supply chain.


 

Uber Technologies Considering Grubhub Acquistion

05/13/2020

The Wall Street Journal reported that Uber Technologies is in talks with Grubhub involving an all-stock transaction with the acquired company valued at $68 per share representing a premium of 45 percent over value on Monday, May 11th. 

 

With the decline in the use of ride services, the Uber Eats segment of the company is contributing to cash flow.  Ride volume is down 80 percent, but the food delivery business was up 52 percent compared to the first quarter of 2019.

 

With the prospect of prolonged COVID-19 restrictions and a disinclination for customers to patronize restaurants, Grubhub would complement and consolidate the Uber Eats business for the immediate and potentially long-term.


 

Fortica® Control System From Hotraco

05/13/2020

Hotraco is entering the U.S. equipment market and promoting the Fortica® comprehensive barn control system. A Fortica® installation can regulate and monitor climate, feed, water, lighting, hen-weight, egg-counting and egg-flow using a user-friendly touchscreen and remote data access.

 


Hotraco Fortica(R) Control Panel

Features of the Fortica® system include:-

  • Integrated control of ventilation, heating and evaporative cooling. The computer responds to temperature, relative humidity and negative pressure and configures the correct fan settings and inlet openings and operation of the evaporative cooling system if installed. The Fortica® system is compatible with tunnel ventilation, cross ventilation or various combinations
  • Controlling feed issue either with weigh cells on silos or a weighing bin interposed between the silo and delivery auger to the hoppers with the house.
  • Managing feed distribution by pre-selecting circuits to attract hens to specific tiers in aviary housing.
  • Adjusting lighting intensity and the operation of strip lighting in modules and aisles
  • Controlling nest use by diming aisle and module lighting according to predetermined programs
  • Retrieving data by IP in addition to using the internet with Fort Link and allowing SysLinq for security. Data can be accessed by smart phone, PC or tablet facilitating security, simplicity and clarity.

 

Hotraco can supply weighing scales with data integrated into the Fortica® computer

Hotraco Agri egg counters are compatible with the Fortica® system providing accurate daily egg counts and optimization of egg-flow to packing

Additional information is available on the Hotraco website which can be accessed by clicking on to the Hotraco logo on the right side of the Welcome page.


 

Home Confinement a Boon to Meal Kit Suppliers

05/12/2020

The need for home preparation of meals has provided an unexpected boost to providers of meal kits.  During past four quarters, intense competition both from independent companies and those affiliated to supermarket chains and restaurants have reduced margins with Blue Apron severely impacted. 

 

Monthly meal kits sales increased from approximately $75 million in February 2020 to $100 million in April according to Nielsen. In an article in the May 4th edition of The Wall Street Journal new entrants to meal kits include Shake Shack Inc., Chick-fil-A, Panera Bread and Denny’s.  Home Chef a subsidiary of Kroger Company is expanding capacity and claims to have tripled their new customer count over six weeks. Sunbasket has apparently doubled sales both from regulars and new consumers.  Recipe offerings are now limited to increase production to satisfy demand.

 

Blue Apron has rehired staff to expand sales achieving 376,000 users during the first quarter of 2020. This is only one-third of the peak achieved in 2017.  Increases in market share recorded by the major providers year to date include Hello Fresh at 93 percent, Home Chef, 89 percent, Sunbasket, 27 percent and industry laggard Blue Apron at 3 percent.


 

USDA Meals-to-You Program Extended

05/12/2020

Meals-to-You intended to deliver one million meals per week to students at schools eligible for free or reduced-price nutrition was impacted by the introduction of COVID-19 restrictions.

 

U.S. Secretary of Agriculture Dr. Sonny Perdue announced a major expansion of the program on May 5th.  USDA will partner with the Baylor University Collaborative on Hunger and Poverty, McLane Global and PepsiCo to serve five million meals per week to rural children in twelve states.  In addition to the states to be served, 23 additional states have requested to participate requiring an additional five million meals per week. 

 

Meals-to-You boxes contain ten breakfast and ten lunches to cover meals children would normally have received at school over a two-week period.  The meals meet most food service program standards and include milk, fruit cups, cereal, and other items.  Boxes are delivered to the homes of children via the U.S. Postal Service and other carriers. 

 

Secretary Perdue commented, “This program has been so successful and faced such high demand that we are expanding to five million meals a week”.  Dr. Jeremy Everett, Executive Director of the Baylor University Collaborative on Hunger and Poverty expressed gratitude to be part of an innovative team.  He noted, “We hope that the boxes of food will nourish children and communicate to their families that they are not alone in these tough circumstances.”

 

McLane Global has moved to a 24-hour production schedule to meet demand according to Denton McLane who regards the USDA-funded program as a “life line to thousands of students across rural America that would otherwise go hungry during this challenging period.”

 

It is hoped that hard-cooked eggs could be included in the meals given their nutritional value relative to cost.


 

Supermarkets Record Sales Increases During March

05/12/2020

Intense buying by consumers to stock pantries from mid-March, extending into April, increased net sales volume recorded by major supermarket chains.  The Kroger Company reported a 30 percent increase for March, Sprouts Farmers’ Market 26 percent, Alberson’s 47 percent and Natural Grocers 40 percent.  Since Whole Foods Market is now consolidated with the accounts of Amazon, there are no details on their sales volume.

 

It is questioned whether the unprecedented sales volume in March will be reflected in reduced volume in April, given that packaged food products purchased as a result of COVID-19 concerns may detract from subsequent monthly purchases.

 

It is clear that the chain extending from producers through to retail adapted within weeks and empty store shelves abnd rationing are now over. It is hoped that “shelter in place” restrictions leading to home preparation of meals will have a lasting effect on egg consumption and that more consumers will have experienced the ease and convenience of preparing egg dishes. A secondary discovery should be the value of eggs based on prevailing prices in relation to nutrient contribution.

 

 


 

Kroger Cooperates with Unions Over COVID-19 Issues

05/12/2020

The Kroger Company has joined with the two unions representing the majority of its workers to request the Federal Government to assign first responder status to grocery workers.  This is based on the incidence rate of COVID-19 among this sector of the economy. The United Food and Commercial Workers Union reported 200 cases among 20,000 workers in California.  Both the United Food and Commercial Workers Union and the Teamsters Union have appealed to Kroger to continue the $2 per hour bonus that was scheduled to end on May 17th.  The two unions represent 55,000 workers at Kroger stores under a variety of banners.  Kroger noted that with special bonuses, their average hourly rate has attained $20, including health care benefits.

 

Kroger has applied suggested preventive measures including limiting the number of customers per store, maintaining social distancing, installing plexiglass shields for checkout workers, expanding home delivery and click-and-collect services.  Workers are provided with face masks and are encouraged to stay at home with sick-pay if they believe they are infected with COVID-19. 


 

Cargill Contributes to CARE International

05/12/2020

Cargill has added an additional $150,000 to expand the Nourishing the Future project in four nations in Central America.  The program has operated for ten years in Guatemala, Honduras, Costa Rica and Nicaragua in conjunction with local partners.

 

Xavier Vargas president of Cargill Central America noted, “Cargill, today more than ever, reaffirms its commitment to nourish our communities, that is why we are working together with partner organizations, such as CARE International, to address the food security invulnerable communities.  He added, “The $150,000 is additional to the more than $3 million contributed for the execution of the Phase IV of the Nourishing the Future Project.”

 

Cargill has donated 454 tons of food to local communities where it operates in Central America.


 

USDA-WASDE FORECAST #600 May 12th 2020

05/12/2020

OVERVIEW

Predictably the May12th 2020 USDA WASDE Report was changed extensively from the April edition to reflect the 2020 crop with planting well in progress and advancing ahead of the 5-year average.

Corn and soybean harvests reflected in the May 2020 WASDE are based on projected yield and harvested area. The corn acreage to be harvested is currently estimated at 89.6 million acres, up 9.9 percent from the April 2020 WASDE report reflecting the 2019 crop at 81.5 million acres. Soybeans will be harvested from 82.8 million acres, up 10.4 percent from the 2019 crop harvested from 77.5 million acres in 2019 as recorded in the April 2020 WASDE report.

The May 2020 WASDE estimate of corn yield was raised 5.9 percent to 178.5 bushels per acre, (168.0 bushels per acre in 2019). The projection of soybean yield was raised 5.1 percent to 49.8 bushels per acre compared to 47.4 bushels per acre for the 2019 crop

The May USDA projection for the ending stock of corn was raised 58.6 percent to 3,318 million bushels. Due to increased exports and crushing the ending stock for soybeans was reduced by 15.6 percent to 405 million bushels.

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with conflicting reports on compliance with the Phase-One trade agreement with China. It is presumed that projections are based on the assumption that China will honor commitments delayed during the first quarter of 2020 by COVID-19 disruption. China has booked substantial orders for soybeans to be delivered in August and September 2020. Reports on export volumes of commodities to China will be included in upcoming editions of CHICK-NEWS and in subsequent mailings as data becomes available.


 


Status of 2019 Corn and Soybean Crops

05/11/2020

The USDA Crop Progress Report released on May 11th documented corn and soybean planting proceeding ahead of the 5-year average. Topsoil and subsoil moisture levels were comparable with the corresponding weeks in 2019 although on average the surface is drier than during the corresponding week in 2019. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2020 harvest in October.

Reference is made to the May 12th WASDE Report #600 in this edition for acreage and yields.

  WEEK ENDING

Crop

May 3rd

May 10th

5-Year Average

Corn Planted (%)

Corn Emerged (%)

 

 

  51  

  8 

 

 67

 24 

 

  56

 22

Soybeans planted (%)

Soybeans Emerged (%)

 

 23  

 0  

  38

 7

  23

 4

 

 Crop Condition

To be recorded  May 18th. 

V. Poor

 Poor

Fair

Good

Excellent

Corn  2020

Corn  2019

 

 

 

 

 

 

 

 

 

 

 

Soybeans  2019

Soybeans  2018

 

 

 

 

 

  

 

 

 

 

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

  3

  12

67

 13

 Past Year

 1

  7

59

 34

Subsoil moisture: Past Week

  4

 12

71

 13

 Past Year

 1

 6

 63

 30


 

Elanco Animal Health Reports on First Quarter of 2020

05/10/2020

In a press release dated May 7th, Elanco Animal Health [ELAN] reported on the first quarter of Fiscal 2020 ending March 31st.

 

For the period, the company posted a net loss of $49.1 million on revenue of $657.7 million, with an EPS of [$0.12].  Corresponding figures for the first quarter of Fiscal 2019 were a net profit of $31.5 million on revenue of $731.1 million with an EPS of $0.09.

 

For the quarter, Companion Animal products represented 31 percent of revenue and Food Animals, 66 percent.

 

Companion Animal revenue decreased by 24 percent after the effect of foreign exchange.  Food Animal revenue fell by eight percent due the loss of sales of Paylean® for hogs and Rumensin® for ruminants.

 

ELAN has a market capitalization of $8.27 billion.  The company traded over a 52-week range of $15.17 to $35.46, with a 50-day moving average of $22.26.

 

On May 7th after the Q1 release, ELAN fell 10 percent to $20.71.  Elanco posted a 12-month trailing return on assets of 2.6 percent and 1.3 percent on equity.  Operating margin attained 12.1 percent and profit margin 2.2 percent.

 

The company did not provide forward guidance based on uncertainties relating to COVID-19.


 

Dr. Cindy Nickerson Appointed as USDA Deputy Chief Economist

05/10/2020

Dr. Robert Johansson announced the appointment of Dr. Cindy Nickerson as the Deputy Chief Economist effective June 7th.  She will be responsible for advising the Chief Economist, the Secretary, and top policy officials regarding the economic implications of regulations and legislative proposals. 

Dr. Johansson commented “I am very pleased that Dr. Nickerson is joining the Office of the Chief Economist, as she brings to the position significant experience both in program and policy analysis and applying economic analysis to agricultural policy issues in the USDA and in academia.”

 Dr. Nickerson is a 20 year veteran of USDA, serving previously as the Director of the Market and Trade Economics Division in the Economic Research Service (ERS).  She has served as an Associate Director and Deputy Director of Research and Communications in the Resource and Rural Economics Division.

 

Dr. Nickerson earned a BS in Accounting from Towson University in 1986 and qualified as a certified public accountant in 1987. She earned an MS in Environmental Studies from California State University in 1995. Subsequently Dr. Nickerson received an MS degree from the University of Maryland in 1998 and a PhD in economics in 2000. 

 


 

Export of Shell Eggs and Products January-March 2020.

05/10/2020

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 quarter of 2020 with the corresponding three months in 2019:-

 

 

    PRODUCT

     Jan.-March 2019  

  Jan.-March 2020

      Difference

Shell Eggs

 

 

 

Volume (m. dozen)

            26.0

        31.5

+5.5        (+21.2%)

Value ($ million)

            24.7

        30.7

+6.0        (+24.3%)

Unit Value ($/dozen)

            0.95

        0.98

+0.03      (+3.2%)

Egg Products

 

 

 

Volume (metric tons)

6,973

         10,522

 +3,549    (+56.5%)

Value ($ million)

             22.5

           28.3

  +5.8       (+25.8%)

Unit Value ($/metric ton)

3,227

 2,689

  -538       (-16.7%)

                             

                         U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

              JANUARY-MARCH 2019 COMPARED WITH JANUARY-MARCH 2020

 

Source USDA-FAS/USAPEEC

 

SHELL EGGS

Shell egg exports from the U.S. during the first quarter of 2020 increased by 21.2 percent in volume and 24.5 percent in total value compared to January-March 2019. Unit value was 3.2 percent by higher or 3 cents per dozen for the comparison between 2020 and 2019. The top two importers, Hong Kong and Mexico combined, represented 67.6 percent of volume and 56.6 percent of total value.

 

Hong Kong was the leading importer of shell eggs in January-March 2020, with 7.6 million dozen representing 36.4 percent of volume and 35.0 percent of the $18.0 million total value of U.S. shipments of shell eggs. Average unit value was $0.80 cents per dozen, above the average USDA benchmark price for nest-run during the corresponding months of 2020. 


 


Egg Monthly

05/09/2020

Review of April 2020 Egg Production Costs and Statistics.

  • April 2020 USDA ex-farm blended nest-run benchmark price was 128.5 cents per dozen, 19.5 percent lower than the exceptionally high March value of 159.7 cents per dozen. The sharp upward price during March was attributed to COVID-19 panic buying. Predictably prices responded negatively during early April as the supply pipeline was re-filled and consumption declined.
  • April 2020 USDA average nest-run production cost was 2.2 cents per dozen lower than in March 2020 at 58.4 cents per dozen.
  • April 2020 USDA benchmark nest-run margin attained a positive value of 70.1 cents per dozen compared to a positive margin of 99.1 cents per dozen in March 2020.
  • March 2020 national flock (over 30,000 hens/farm) was down 1.9 million hens or 0.6 percent to 314.9 million.
  • March 2020 pullet chick hatch was up 16.6 percent from February 2020 to 28.0 million.
  • March 2020 export of shell eggs and products combined was down 13.2 percent from February 2020 to 704,600 case equivalents representing the theoretical production of 9.8 million hens.                                          

 

INTRODUCTION.

Summary tables for the latest USDA April 2020 prices and flock statistics made available by the EIC on May 8th 2020 are arranged, summarized, tabulated and reviewed in comparison with values from the previous April 8th 2019 posting reflecting March 2020 cost and production data.

COSTS & REVENUE

Parameter

MARCH 2020

    APRIL 2020

5-Region Cost of Production ex farm (1st Cycle)

60.6 c/doz

58.4 c/doz

Low

57.3 c/doz (MW)

54.9c/doz (MW)

High

86.9 c/doz (CA)

84.6c/doz (CA)

 


 


COMMODITY REPORT: MAY 8th 2020.

05/08/2020

  • The financial and economic implications of the COVID-19 pandemic are more apparent in the economy although corn and soybeans increased slightly in price this past week. Corn futures for May delivery were higher by 2.6 percent compared with the quotation on May 1st. Soybeans were 0.4 percent higher compared with the May 1st. Anticipated increases in price have not materialized after signing the Phase-One trade agreement with China or following ratification of the USMCA.
  • Prospects for commodity exports to China are apparently still restrained but less by the logistic restrictions imposed by the last phases of the COVID-19 outbreak. China has reduced their short-term demand for soybeans as a result of continuing losses from African swine fever and disruption of poultry production that is now recovering. April imports of soybeans by China amounted to 6.71 million metric tons (246 million bushels), 14.8 percent lower than during April 2019. Soybeans from Brazil are priced more competitively than from the U.S. due to availability and a favorable currency exchange. The USDA projects that 1.8 billion bushels of soybeans will be imported by China from Brazil in 2020. The U.S. will probably commence shipping in quantity during late summer.

 

 

Uncertainties still include:-

  • The extent and timing of soybean purchases by China in 2020. The U.S - China Phase-One agreement signed in mid-January incorporating U.S. tariff rescissions, promised purchases of agricultural commodities, concessions on some structural issues by China and strengthened enforcement provisions. A telephone meeting between senior officials of the U.S. and China on Friday May 8th resulted in a reassurance that China would fulfill its obligations with respect to imports of U.S agricultural products. Both sides accepted the need to improve relations damaged by recent injudicious rhetoric relating to the origin of COVID-19.
  • It is anticipated that China will take advantage of low world prices for commodities to import 20 million tons of corn (787 million bushels) and 10 million tons of soybeans (365 million bushels) to add to reserves. The U.S. expects to supply part of this requirement
  • Imports of soybeans from Brazil were delayed by inclement weather and port disruptions during the first quarter of 2020, resulting in soybean stocks falling to a multiple year low. Imported consignments increased stocks to 4.26 million tons (157 million bushels), up 28.7 percent  from March 2020.
  • The market is now more accepting of the reality that future shipments of soybeans to China will not take place according to the quantities promised by the Administration after signing the Phase-One agreement.
  • Total world soybean shipments from the U.S. in 2020 YTD have amounted to 5.26 million tons, (193 million bushels), approximately 34 percent of the quantity required to meet the USDA WASDE projection of 1.775 billion bushels. Through March 2020 soybean shipments attained an average of 16.5 million bushels per week compared to a quantity of 26.2 million bushels per week to meet the projected export target.
  • Domestic U.S. soybean and soybean meal demand is currently constrained by cutbacks in the intensive livestock and poultry sectors as impacted by COVID-19.
  • Justifiable uncertainty regarding the spread of COVID-19 to other Asian nations, Europe and North America with the potential to create a worldwide depression as economic activity is curtailed

 

Questions still exist:-

 

  • Traders are reviewing projected ending stocks for the 2019 crop and taking into account the initial planting intentions reflecting a February USDA survey of corn and soybean acreage for 2020 before the advent of COVID-19 that distorted production, distribution and consumption of food.
  • The optimistic projections for planting corn and soybeans in 2020 as published on March 31st by the USDA may not materialize although planting is advancing at a rapid pace.
  • A U.S. trade agreement with the U.K. should be concluded in 2020 but trade with the U.S. will be conditioned by commitments to the E.U. by the departing nation. Negotiations commenced this past week between Amb. Robert Lighthizer and his U.K. counterpart Minister Elizabeth Truss. A bilateral agreement will have to overcome disagreements over the use of Huawei communications equipment by the U.K. and chlorination applied to process U.S. chicken.


 


Israeli Company Producing High Protein Chickpea Ingredient

05/07/2020

InovoPro an Israeli start-up has raised $15 million in a funding round.  The proceeds will be used to increase production capacity and to advance ongoing business including marketing and joint ventures.  InovoPro has developed a chickpea protein concentrate with a 70 percent content that is three times the level of native chickpeas. The additive will presumably be used in vegetable-based meat substitutes.

 

The company is establishing commercial relations with food producers in the EU and the U.S.


 

Guest Contribution: Jim Nardulli Comments on Automation of Packing

05/07/2020

When appropriate EGG-NEWS posts contributions from supporters, sponsors and subscribers. Jim Nardulli is the COO of PASCO Systems and has extensive experience in applying robotics to industrial applications in a wide range of industries. Recently his Company developed an efficient robotic egg packer compatible with the leading makes of graders. As a component of the process of design and improvement he visited a number of packing plants to observe operations. His comments on the most labor-intensive activity in our operations are of interest as he approached the design of the PacSmart™ module with an open mind but with experience in pharmaceutical, electronic and automotive component plants permitting transfer of robotic, mechanical and process technology.

 

 

My first encounter with unstoppable things came long ago when as a young man I was a line cook at a busy restaurant.  Impossible to read, handwritten orders would start at 5 PM whether or not we were prepared.  One hiccup early would cascade toward disaster under the pressure of a torrent of new orders as we noticed that the temperature in that kitchen was close to 100 degrees. 

 

We learned to depend on one another and to be prepared. 

 

When, years later, I visited an egg packing operation for the first time in my role with a robotic automation company, it was immediately clear to me that the men and women managing that operation were facing something very similar – the eggs were coming whether they were prepared or not. Operating under the constant pressure of unstoppable incoming eggs or dinner orders results in a steady flow of adrenalin. 

 

The current social and business climate under which we are operating turns up the pressure for those who have been deemed to be ‘essential’ while a different set of problems besets the millions that are suddenly unemployed. 

 

No matter what your opinion may be about the efficacy or wisdom of shutting down our economy, the fact is that we are now more than ever dependent on one another and the need to be prepared has never been greater. 

 

If anything positive is to come from our current COVID-19 crisis it will perhaps be that the industry finally takes action to mitigate its weak links.    

 

Clearly, the egg industry embraced mechanical automation long ago.  However, if one embraces the idea that a process is only as good as its weakest link, then an asterisk needs to be placed on the idea that the egg industry has comprehensively embraced automation.  Why?

 

 

Weak link 1

 

When I consider a new robotic automation project, I like to spend a bit of time doing the job myself.  Within two hours of transferring cartons to containers I found myself with an aching back and massive respect for the women working alongside me. 

 

At the beginning of each day, the flow of incoming workers brings with them their problems, their pathogens, and their looming workman’s comp claims.  When these same workers leave for the day, they can leave behind their viruses and bacteria.

 

New robotic packers are equipped with self-cleaning mechanisms for conveyors and a UV-C disinfectant feature that mitigates pathogens and minimizes labor costs associated with daily cleaning.    Robotic packers also capture Information in support of the IoT revolution that can lead to continuous improvement in operational results.  

 

 

Weak Link 2

 

There has been no shortage of debate relating to the relative merits and detriments of a globalized economy.  No matter one’s thoughts on that question, our present circumstance calls out the very real pitfalls of a global supply chain.  When downtime ticks by at thousands of dollars per hour, the cost of a disrupted flow of spare parts and or service technicians from abroad becomes very real indeed.

 

Weak link 3

 

The efficiencies promised by multi-million-dollar investments in graders are routinely minimized by the realities of manual packing at the end of the line. 

 

At the end of most egg grading operations one finds a crew manually packing cartons and flats into cases, RPCs, and wire carts.  I must admit, the first time I witnessed a large grading operation I was undeniably impressed with the engineering and efficiency of grader installations and the quality of their construction.  I was wholly unprepared for what came next.  There were dozens of workers engaged in the frenetic task of keeping up with the output of the grader.  The industry has invested in automating the very difficult processes such as washing, selecting eggs with acceptable shell integrity, grading, sorting and carton packing. The relatively simple but labor-intensive end-of-line packing is not automated because grader manufacturers regard transfer of diverse egg packs to containers as difficult. Plant owners consider the last step too expensive to automate. 

 

The Economics

 

The repeated cycle of boom, when the industry is profitable, leads to investment in expansion but the inevitable bust is created by oversupply.  Ratcheting down operational costs through a reduction in headcount creates efficiency and maximizes the existing investment in automated graders and reduces variable costs in down-cycles.

 

Robotic packing and palletizing can significantly reduce the number of workers required to maintain plant volume.  Fewer workers correlate to a reduced risk of infection being introduced into a facility. Greater mechanization to reduce worker complement reduces HR challenges including determining eligibility to work in the U.S., accidents and Workmen’s Compensation claims, the cycle of recruiting, hiring and training and other costly obligations.

 

Each PacSmart™ Mark III dual robot packing machine is capable of packing 170 cases per hour and requires no changeover to move from flats to cartons or RPCs to corrugated cardboard cases.  A recent case study showed that a combination of fixed and variable costs of packing were reduced by 53 percent and the entire investment could be paid back in less than 18 months.  Robotic automation of packing, palletizing and de-palletizing is the sure path toward greater efficiency and profitability. 

 

Readers are invited to comment on the opinions and observations of Jim Nardulli and to establish a dialogue. He can be contacted at <nardulli@pascosystems.com>

 


 

Sad Passing of Industry Veteran Dr. Walter Hughes

05/07/2020

EGG-NEWS regrets reporting the passing of Dr. Walter F. Hughes on April 26th at his home in Hawaii at the age of 98 years.  He was born January 27th in Santa Barbara, CA and was raised on a Southern California farm near Goleta.  He entered UC Davis in 1940, but with the outbreak of war joined the Army Air Corps.  He served with distinction, completing 35 missions for the 8th Air Force piloting B-24 Bombers. 

 

He graduated at the top of his class in Veterinary Medicine at the University of California, Davis and commenced work with Kimber Farms, at that time a prominent primary breeder of egg-producing stock located in Niles, CA.  He was instrumental in programs to suppress Marek's Disease and Newcastle Disease and mentored many young poultry veterinarians.  He was active in the Niles community including serving on the school board.

 

He retired in 2003 and moved to Hawaii to be close to family.  His wife passed in 2008 and thereafter he took delight in reunions, his family and civic activities.  Dr. Hughes commented frequently on postings in this newsletter and his incisive observations were based on a keen mind and decades of experience.  He will be sadly missed.

 


 

Kalmbach Feeds to Launch Campaign to Provide 500,000 Meals

05/07/2020

In response to the unprecedented COVID-19 challenge faced by America, Kalmbach Feeds is launching a campaign to support Feeding America by donating funds to supply 500,000 meals to friends and neighbors in need.  

 

The campaign, named “Feed the Need”, has been created in the response to the Covid-19 crisis that has caused unprecedented unemployment due to businesses being forced to close their doors for the health and safety of every individual. Many workers, suddenly without wages, are finding themselves relying on food banks for the first time ever. For each bag of Kalmbach Feeds, Tribute or Formula of Champions branded feed sold, Kalmbach Feeds, Inc. will donate one meal to Feeding America, with the mission of providing a half million meals.

 

Paul Kalmbach, Jr, President of Kalmbach Feeds®, opined, “So many people are in need right now, due to circumstances completely out of anybody’s control, and we want to be a part of helping our neighbors in the communities we serve.”

 

Kalmbach Feeds, Inc. was founded in 1963, by Milton and Ruth Kalmbach.  Currently the 2nd and 3rd generations of the Kalmbach family are actively leading the company with Paul Kalmbach Sr. serving as CEO, and grandson Paul Kalmbach Jr. as President.

 

Retail brands include Kalmbach Feeds® livestock and poultry products, Tribute Equine Nutrition® premium horse feed products, and Formula of Champions® products for elite show livestock, available nationwide through a network of independent dealers, and online where retail outlets are unavailable.

 

For additional information click on to the Kalmbach Feeds logo on the right side of the Welcome page.


 

Weaver Eggs donates to Cincinnati Food Bank

05/07/2020

Weaver Eggs a fourth-generation family enterprise located in Versailles, OH. Donated 424 case equivalents of liquid egg (equivalent to 12,400 dozen eggs), and 165 buckets of cooked eggs (equivalent to 2,500 dozen eggs) to the Cincinnati Food Bank in mid-April. Commenting on the donation amounting to 12 tons of food, Alex Weaver Vice-president of the Company stated “we pride ourselves in supplying our community with a nutritious, local food source, especially during such stressful times”.


Weaver Eggs founded in 1929, has an extensive history of civic involvement in Darke County in addition to generosity and donations to food banks. In 2018 the company shipped a truckload of eggs in collaboration with Winn-Dixie to help victims of Hurricane Irma. A donation to the Dayton Food Bank in 2018 provided for 12,000 meals.


 

Zoetis Reports on Q1 of FY2020

05/07/2020

On May 6th, Zoetis Inc. (ZTS) reported on the first quarter of fiscal 2020. For the three-month period, net profit attained $423 million on revenue of $1.53 billion, generating an EPS of $0.88.  Corresponding figures for the first quarter of fiscal 2019 included net profit of $312 million on revenue of $1.455 billion with an EPS of $0.65.

 

U.S. sales represented 51 percent of revenue. Of this amount, livestock represented 67.8 percent.  Poultry products comprised 9.6 percent of total revenue or 20.6 percent of the livestock component.

 

The company noted that COVID-19 had no material impact on results for the first quarter.  In view of uncertainties, guidance for 2020 was downgraded to reflect revenue in the range of $5.95 to $6.25 billion with an EPS range of $2.80 to $3.07. 

 

ZTS closed on May 5th at $131.05 but post-release on May 6th price fell to $127.39 near noon.

 

Zoetis has a market capitalization of $61.0 billion and trades with a forward P/E of 36.The fifty-two-week range in share price was $90.14 to $146.26.  For the past twelve months, Zoetis generated a return on assets of 12.3 percent and on equity, 61.0 percent.  Trailing twelve-month operating margin was 35.0 percent and profit margin, 24.0 percent.


 

Alltech ONE Ideas Conference Poultry Topics

05/07/2020

 

POULTRY TOPICS 18 MAY

Prioritizing Food Safety in Poultry Production

With the USDA projecting that Americans will consume 94 pounds of chicken per person this year alone, food safety remains at the forefront of U.S. and international industry concerns.

Go With Your Gut: Modulating Antimicrobial Resistance for Health and Well-Being

Antibiotic resistance has the potential to become one of the greatest challenges of our generation due to the ever-increasing rise in bacterial strains that are less and less sensitive to existing

Bugging About the Future: Possibilities of Insect Meal in Poultry Production

Insect meal is quickly becoming a popular alternative protein source for both humans and poultry, but it comes with a host of both benefits and drawbacks.

How the History of Antibiotic Resistance Will Impact Poultry’s Future

Antibiotic development for the masses began in the 1920s, and by the 1950s, studies began revealing concerns about the development of antibiotic resistance.

Enabling Data-Driven Farming, One Flock at a Time

Data-driven agriculture is becoming the new norm, and data is increasingly being incorporated into poultry production.

FEATURED SPEAKERS

Dr. Ranveer Chandra

 

Chief Scientist, Microsoft Azure Global; Lead on FarmBeats IoT Applications, Partner Researcher, Microsoft Research

Dr. Stephanie Collins

 

Assistant Professor, Monogastric Nutrition, Dalhousie University

Dr. Karina Horgan

 

Associate Research Director, Alltech

Dr. Richard Murphy

 

Research Director, Alltech

Kayla Price

 

Canadian Poultry Technical Manager, Alltech


 

Wendy’s Reports on First Quarter of 2020

05/06/2020

In a press release dated May 6th The Wendy’s Company (WEN) announced results for the first quarter ending March 29th. The Company disappointed with top and bottom line below estimates.

 

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 US$ x 1,000 except EPS)

First Quarter Ending

March 29th 2020

March 30th 2019

Difference (%)

Sales:

$404,960

$408,583

-0.9

Gross profit, Company locations:

$16,799

$25,118

-33.1

Operating income:

$48,732

$66,266

-26.5

Pre-tax Income

Net Income

$21,283

$14,441

$39,884

$31,894

-46.6

-54.7

Diluted earnings per share:

$0.06

$0.14

-57.1

Gross Margin Company locations (%)

10.1

14.9

-32.2

Operating Margin (%)

12.0

16.2

-25.9

Profit Margin (%)

3.6

7.9

-54.4

Long-term Debt:

$3,613,974

$3,636,145

-0.6

12 Months Trailing:

     

Return on Assets (%)

3.7

   

Return on Equity (%)

23.5

   

Operating Margin (%)

20.0

   

Profit Margin (%)

10.0

   

Total Assets 1

$4,981,716

$4,994,529

-0.3

Market Capitalization

$4,498,000

 

 

  1. Includes approximately $2.0 billion in goodwill and intangibles.

52-Week Range in Share Price: $6.82 to $ 24.04 50-day Moving average $15.84

Market Close May 5th. pre-release $18.83 Close May 6th $20.19

 

Forward P/E 36.2 Beta 1.2

 

Wendy’s operates 5,865 restaurants in the U.S. 99 percent of which are functional. The Company has 943 international restaurants with over half functional.

 

For the first quarter of 2020 same-store sales growth attained 1.0 percent. The 3.7 percent gain in January and February was offset by declined of 25% for earl to mid-March.


Todd Penegor CEO Wendy's


In commenting on first quarter performance Todd Penegor president and CEO stated “we have taken steps to help protect our team members and customers during these uncertain times, including utilizing no-contact and limited-contact ordering options and focusing on social distancing practices at our restaurants. We have invested in training across our system to ensure employee and customer safety in areas such as hand washing and hygiene re-certifications, social distancing, and proper mask utilization. We also instituted an Emergency Paid Sick Leave policy for our Company hourly employees to provide additional support for employees affected by COVID-19 and have implemented Restaurant Recognition Pay in which hourly crew members, shift managers, and assistant General Managers in Company restaurants receive a 10% increase in hourly pay. We recently announced that we are extending both programs through the end of May.

 

We have worked diligently with our franchisees to ensure that they are set up in the best position possible to navigate through this disruption, both operationally and financially. On the operational front, we have worked to ensure that our teams are receiving the supplies they need, made changes to evolve and simplify our menu, and updated staffing and procedures to continue to run great restaurants through the drive-thru and with delivery during this time. Financially, we have worked to help franchisees preserve cash flow with royalty, advertising, and rent payment deferrals, we have extended our new build and reimaging requirements by a year and we have worked directly with our largest franchise lenders on behalf of our system to move to interest only loans for a period of time.

 

 At the corporate level, we have taken several steps to ensure financial flexibility during this unprecedented time. We have fully drawn our Variable Funding Senior Secured Notes revolving financing facility, suspended all share repurchase activity, reduced our second quarter dividend, and identified approximately $30 million of savings in 2020 within capital expenditures and non- people related general & administrative expenses. As a result of these efforts, our cash balance remains strong at approximately $365 million as of May 3, 2020.


 

USPOULTRY and Foundation Approve New Research Grants

05/06/2020

USPOULTRY and the USPOULTRY Foundation have approved approximately $400,000 for seven new research grants at six institutions through the comprehensive research program. Four projects related to egg production.

 

The Association’s comprehensive research program commenced in the1960s when funds were first approved for poultry disease research. Since the inception of the research program, USPOULTRY has reinvested more than $32 million dollars into the industry in the form of research grants. More than 50 universities and federal and state facilities have received grants over the years.

 

“Research is an important aspect of USPOULTRY's and the Foundation’s service to the poultry industry. The Foundation Research Advisory Committee is the heart of the research program with committee members volunteering numerous hours reviewing and evaluating research proposals before making recommendations for funding. We sincerely appreciate and value their excellent work,” said Greg Hinton, Rose Acre Farms, and USPOULTRY chairman.

 

The egg-related research grants for each institution include:

 

Automated Tracking of Laying Hens in Cage-Free Aviary Environment Using Affordable Radio-Frequency Identification (RFID) Chips

North Carolina State University

 

 

 Effectiveness of Various Compounds in the Sanitation of Shell Egg Processing Equipment and Facility Surfaces

USDA ARS (research grant made possible in part by an endowing Foundation gift from MPS Egg 
Farms)

 

Using an Electrostatic Precipitator to Improve Indoor Air Quality in Cage-Free Layer Houses

North Carolina State University (research grant made possible in part by an endowing Foundation gift from Cal-Maine Foods)

 

Poultry-Safe and Environment-Acceptable Pest-Repellent Paint

University of Kansas (research grant made possible in part by an endowing Foundation gift from Wayne Farms)


 

Kemin Subsidiary in Italy Contributes to COVID Relief

05/05/2020

Kemin Industries has contributed to COVID-19 relief through Italian subsidiaries.  Kemin Animal Nutrition and Health and Kemin Nutrisurance with offices in Cavriago and Veronella in addition to Garmon Chemicals a textile business in the Republic of San Marino participated in the program. Following the outbreak of COVID-19 Kemin increased salaries of team members by fifty percent.  These employees in turn donated part of their earnings to COVID-19 relief.  The office in Veronella donated $30,000 to the Legnano Hospital matched by Kemin. Garmon personnel donated $12,000 of their April earnings to first responders and the state hospital in San Remo.

 

Giuseppe Abrate, Kemin Worldwide Group President for Food and Human Nutrition stated, "as a multi-national company, we believe in the importance in supporting employees with additional recognition, financial assistance and matching community donations in local regions to help during a global crisis".

 

Following the outbreak of COVID-19 Kemin implemented procedures to preserve the safety and health of associates including work-from-home policies, split shifts, intensified cleaning, mandatory on-site wearing of masks and temperature checks.


 

Retirement of Dr. Jeff Hayes from the Ohio ADDL

05/05/2020

Dr. Jeff Hayes, Section Head of the Pathology Unit at the Ohio State Animal Disease Diagnostic Laboratory (ADDL) in Reynoldsburg will retire after 36 years of service.

 

Board certified in pathology, Dr. Hayes is an expert on foreign animal diseases having worked at the Plum Island Foreign Animal Diagnostic Laboratory from 2002 through 2003.  He assists in training of pathology residents at the Ohio State College of Veterinary Medicine.

 

Over the years Dr. Hays has provided expert service to owners of livestock and poultry in Ohio and has been instrumental in improving the health and productivity of flocks through his diagnostic skills. Always courteous, prompt with reports and willing to assist owners and managers of herds and flocks, Jeff will be missed at the Reynoldsburg Lab.


Dr Jeff Hayes

 

Value of 2019 Egg Industry Output

05/05/2020

The April 2020 edition of the USDA Poultry Production and Value Report documented the volume and value of eggs produced over the period December 1st 2018 through November 30th 2019.  For the period, 9.44 billion dozen were produced valued at $7.70 billion.  Although production was 2.9 percent higher in 2019 compared to 2018, value was 29 percent lower due to  the difference in average price during 2018 ($1.16 per dozen) compared to 2019 ($0.86 per dozen). Low prices prevailed through eight months of 2019.

The proportions of U.S production represented by each of the top ten states comprised:-

State                %

Iowa              15.1

Ohio                9.0

Indiana            8.5

Pennsylvania   7.6

Texas              5.4

Georgia           4.5

Michigan        4.0

California       3.4

Missouri         3.3

Arkansas        3.2 

 

 


 

President of Blue Bell Indicted on Felony Charges Following Listeria Outbreak

05/05/2020

Approximately five years after the outbreak of listerosis traced to three manufacturing plants operated by Blue Bell Creamery, Paul W. Kruse, then CEO of the family-led company has been indicted by the Department of Justice on numerous federal felony charges.  The allegations include conspiracy to suppress documentation relating to Listeria contamination in plants and conducting a shelf-recall without disclosing the potential presence of the pathogen in products.  In addition, Kruse has been charged with six counts of wire fraud with all charges carrying sentences of up to 20-years.

 

The company operated plants in Broken Arrow OK., Sylacauga, AL. and Brennan TX., the principal area of operation. Paul Kruse assumed the position of CEO in 2004 replacing his uncle Howard. He resigned as president and Chairman of Blue Bell in 2017.

 

 

Suspension of all operations following investigations by the CDC and direct action by the FDA together with the negative publicity resulted in heavy losses for the company. Fortunately the Kruse family was bailed out by Sid Bass, allowing Blue Bell to recover market share overa period of three years following the 2015 event. 

 

Blue Bell settled with shareholders alleging mismanagement for $15 million in April 2020.  Blue Bell agreed to pay a fine of $19.4 million including forfeitures as a civil penalty.  Kruse will probably mount a defense based on applying his best endeavors to limit the infection resulting from known contamination of plants as disclosed by internal documents and with Listeria contamination in plants confirmed by the FDA.

 


Paul W Kruse CEO Blue Bell Creamery

It remains to be seen whether in the event of a guilty verdict whether penalties will be similar to those meted out to Stewart Parnell and co-defendant’s responsible for the 2007 to 2009 outbreak of salmonellosis caused by products from the Peanut Corporation of America. Depending on the diligence of the DOJ, Kruse if found guilty, might receive a slap-on-the-wrist sentence as imposed on Jack DeCoster and his son Peter for their egregious involvement in the extensive Salmonella Enteritidis outbreak in 2010.


 

China Stepping Up to the Plate on Commitments in the Phase-One Trade Agreement

05/05/2020

According to USDA data, China booked 618,099 metric tons of old-crop soybeans during the week of April 23rd.  This is the largest weekly purchase since December 2019 and the highest quantity for any previous April.  On Thursday, April 30th, China booked 300,000 tons of soybeans for shipment in August and September.  There have only been token quantities purchased amounting to one million tons over the three month period following signing of the   Phase-One Agreement in mid-January.  Traditionally China purchases soybeans from Brazil during the first half of the year and currently Brazil has a cost advantage over the U.S. on currency conversion.

 

To conform to the conditions of the Phase-One Trade Agreement, China would be obliged to import 40 million metric tons of U.S. soybeans in 2020.  This appears unlikely given the lower requirement based on losses in the hog industry due to African swine fever and disruption of the poultry industry during the first quarter.

 

For the week ended April 23rd, China imported 318,747 tons of sorghum, but has booked only 2.12 million metric tons through September, less than in 2017. China has orders for 881,081 metric tons of U.S. corn for the 2019-2020 market year ending in August. China stated intentions to purchase 500,000 metric tons (19.7 million bushels) from the 2020 corn harvest.


 

Pasco Donates UV Module to Sterilize Medical Masks

05/05/2020

PASCO Systems Corporation, a Maplewood, MO. manufacturer of industrial robotic and mechanical handling systems recently designed and donated a module to decontaminate N95 medical masks for the Cardinal Glennon Children’s Hospital. The unit comprises a 20 x 8-foot trailer modified with aluminum panels on the interior walls and fitted with 30 UV-C bulbs.  Medical masks are arrayed on hooks to be decontaminated and up to 180 units can be sanitized in ten minutes.  Ultimately masks from six other St. Louis area hospitals will be processed in the module at a rate of 1,000 per day. The application of UV technology to decontaminate medical masks for re-use has been validated by the NIH along with a moist hydrogen peroxide systems.

 

The project involving both design and construction was undertaken by PASCO, a family-owned business specializing in robotic packaging and handling systems, approaching its half-century since founding.  PASCO Chief Operating Officer, Jim Nardulli initiated the project after discussion with an emergency physician at the Cardinal Glennon Hospital.  PASCO was able to source thirty UV bulbs with the correct energy output and spectrum specifications and fabricated the module with hooks and other accessories.  The project went from conception to delivery in four weeks with all fifty-five of the company's team involved.  Nardulli noted "everybody really felt like they were doing something for the community, given everything the world is going through it was good to have something to dig into". 

 

Dr. Matt Broom, Chief Medical Officer for Cardinal Glennon and the St. Louis University Hospital commended PASCO for their donation stating, "with the strain on obtaining N95 masks throughout the country now we are able to safely reuse these masks and preserve our supply".

 

PASCO demonstrated their robotic egg packer and pallet stackers at the 2020 IPPE. The Company can adapt existing robotic handling installations as supplied to a range of U.S. industries to reduce labor requirements in egg packing and chicken processing plants.


 

Dunkin' Brands Posts Q1 Results

05/03/2020

In a press release dated April 30th, Dunkin' Brands (DNKN) posted a net income of $52.1 million for the first quarter of Fiscal 2020 ending March 28th.  Revenues amounted to $323.1 million and diluted EPS was $0.63.  Results were close to the first quarter of 2019 with a net income of $52.3 million on revenues of $319.1 million and a diluted EPS of $0.67. 

 

In the U.S. Dunkin' stores posted a 2.0 per cent decline in comparable same store sales growth compared to a positive 2.4 percent for the first quarter of 2019.  Dunkin' International recorded a 7.1 per cent decline in comparable same store sales growth compared to a positive 2.9 per cent for the corresponding quarter of 2019. The declines were attributed to the effect of COVID-19 with International stores affected earlier by travel and home confinement restrictions compared to the U.S.

 

As with many QSRs Dunkin' Brands has suspended dividend and will not issue future guidance. Dunkin' Brands is totally franchisee-operated and the company is providing support to all stores during the COVID-19 crisis.

 

During 2018 Dunkin’ introduced egg sandwiches for breakfast adding to demand by the food service sector.


 

Impact of COVID Home Eating Not Reflected in Kraft Heinz First Quarter

05/03/2020

In an April 30th release the Kraft Heinz Company (KHC) reported on the first quarter of Fiscal 2020 ending March 28th. 

 

According to industry surveys and press reports, purchases of packaged foods and traditional brands increased during March as a result of COVID-19 restrictions.  The effect has yet to be seen with the company posting a net income of $378 million on net sales of $6.16 billion yielding a diluted EPS of $0.31.  Comparative figures for the first quarter of 2019 included a net income of $404 million on sales of $5.96 billion with an EPS of $0.33.

During the first quarter of 2020, 73 percent of revenue was derived from sales in the U.S. with a 6.4 percent year-over-year growth rate. This was largely due to a six percent increase in consumer demand in March.  Pricing advanced by 2.4 percent due to higher list prices, in part caused by inflation in dairy items and promotional activity.  The company was impacted by a sharp decline in food service shipments.


 

GDP Declines in Response to COVID-19 Crisis

05/01/2020

The U.S. Commerce Department announced that gross domestic product [GDP] declined at an annualized rate of 4.8 percent during the first quarter.  This is higher than during the fourth quarter of 2008, which marked the beginning of the Great Recession. The decline is noteworthy in that only the last two weeks of the quarter were disrupted by COVID-19. 

 

Economists consider that the second quarter GDP will reflect increased unemployment with 30 million now out of work. It is forecast that GDP will fall to an annualized rate of negative 38 percent in the second quarter placing the economy in early 1930s Great Depression territory.

 

With the prospect of a vaccine in the distant future, and with relaxation of restrictions the economy should improve in the third quarter, but possibly at the expense of an increased incidence rate of COVID-19, especially in rural areas and in cities yet unaffected by the disease.  Essentially the second and third quarters will reflect a balance between business-as-usual and the health of the nation. Most economist expect a “U-shaped” recovery and not the “V” as projected by the Administration. The Nation should face the reality that due to failure of businesses both large and small and reduced exports, many jobs in a variety of sectors will never come back.


 

Hy-Line International Technical Bulletin on Newcastle Disease

05/01/2020

Hy-Line International has prepared a Technical Bulletin to guide producers to prevent Genotype VII viscerotropic velogenic Newcastle disease with a specific emphasis on vaccination. This condition has caused extensive losses over the past decade in Asia, the Middle East and Latin America.  The Bulletin describes the clinical signs, gross and microscopic lesions with illustrations.  Intervention strategies including vaccination and recommendations for application are detailed.  The range of vaccines available ranging from mild to highly antigenic are tabulated together with suggestions on frequency of administration to stimulate solid immunity against this form of Newcastle disease.


 

NPD Reports on Mid-April Restaurant Transactions

05/01/2020

The NPD Group confirmed that restaurant transactions for the week ending April 19th improved from a 43 percent decline last week to a drop of 36 percent.  Quick service restaurants were down 34 percent and full-service restaurants 72 percent.  There was an improvement in casual dining restaurants of 12 percent to a decline of 65 percent compared to the corresponding week in 2019.

 

NPD attributed the improvement in restaurant traffic to a gradual easing in COVID-19 restrictions and the fact that more restaurants are offering drive through, take-away meals and home delivery.


 

New Genome Sequencing Technique to Differentiate Among Salmonella Serovars

05/01/2020

A recent publication* evaluated real-time nanopore genome sequencing to identify serotypes of Salmonella.  The Oxford Nanopore Technologies procedure was contrasted with conventional whole genome sequencing to predict serotypes of Salmonella.  The specificity of serotyping using the Oxford Nanopore Sequencer was confirmed and the technique provides a turnaround time from pure culture to identification within one working day.

 

*Xu, F et al. Evaluation of real-time nanopore sequencing for Salmonella serotype prediction.  Food Microbiology. 89:103452 (2020)


 

Pet Dog Infected with SARS-CoV-2 Virus

05/01/2020

In a report posted on the American Veterinary Medical Association newsletter, a pet pug was infected with SARS-CoV-2, the virus responsible for COVID-19.  The family owning the dog comprised a pediatrician at Duke University, her husband and son all of whom tested positive for the virus. Pets in the home comprised the pug, a cat and a lizard.

 

It is evident that the pet was infected by a member of the family. The diagnosis represents the first in a domestic dog in the U.S. but two cases in pet cats were recently diagnosed in New York.

 

The son of the pediatrician noted, "the dog licks all of our dinner plates and sleeps in my mom's bed and we are the ones that put our faces into his face so it makes sense that he got coronavirus".   The son has a future as an epidemiologist specializing in zoonosis.  The underlying question is what the heck are they teaching nowadays in pediatrics and zoonoses at Duke University School of Medicine?


COVID Pug Winston

 

 


 

Merck Announces First Quarter FY2020 Results

04/30/2020

In a release dated April 28th, Merck Inc. (MRK) released results for the first quarter of 2020 ending March 31st.  Total worldwide sales attained $12.1 billion, 11 percent more than the first quarter of Fiscal 2019.  Of this total, the Animal Health segment amounted to $1.214 billion compared to $1.025 billion in the first quarter of 2019.  Livestock represented 60.9 percent of Animal Health sales compared to 59.6 percent during the first quarter of 2019.  Excluding the unfavorable effect from foreign exchange Animal Health sales grew 21 percent.  Growth in livestock products was in part attributed to the acquisition of Antelliq Corporation and also from preemptive buying in anticipation of disruption of supply chains due to COVID-19.

 

Merck has a market capitalization of $205.0 billion.  The company attained a twelve-month trailing operating margin of 32.6 percent and a profit margin of 21.0 percent.  MRK has traded over fifty-two weeks over a range of $65.25 to $92.64 with a fifty-day moving average of $77.27.


 

AEB Issues REAL Eggs Toolkit

04/30/2020

To promote eggs in confectionary baking and food service, the American Egg Board has issued a REAL eggs toolkit with seasonal recipes, references to social media, and other promotional items.

 

Since the 2015 HPAI Epornitic, the unprecedented escalation in the price of egg products created an opportunity for substitutes.  To their credit the AEB has regained market share and is actively promoting the functional properties of eggs to an important segment of the market.

 

The toolkit includes sales presentations, customer E-mails, digital banners, and a sale sheet incorporating certification standards to use the Real Eggs seal.


 

Egg Carton Manufacturers Respond to Demand

04/30/2020

The precipitous decline in egg demand by the food service industry has diverted shell eggs to the retail market.  This has placed a burden on carton manufacturers who had not planned for an unprecedented increase in short-term demand.

 

Dolco Packaging marshalled their resources and together with their parent company, Tekni-Plex, achieved multi-fold increases in production in both March and April.  This required a coordinated effort among the various U.S. plants producing Dolco Packaging.  Adaptations and innovations to satisfy demand include:-

  • Placing all plants on a three shift, seven-day schedule of operation.  This has required both an increase in base pay and additional overtime costs.  Fortunately, the Dolco workforce has responded to the emergency and to date only one employee has been diagnosed with COVID-19.
  •  UPC labels are no longer applied to cartons in order to increase the production rate. They are now printed on the cartons requiring greater accuracy and precision in application.
  • Existing artwork on cartons has been simplified, in many cases with the cooperation of producers, to enhance the rate of production.  Many lines have been converted with added flexibility through a substantial investment in additional printers in all plant locations.
  • Special packs have been eliminated from the range in order to make optimal use of available extrusion and printing capacity.  In response to demand, Dolco is producing a higher proportion of 18-egg packs.
  • Increased production has not resulted in lowering quality standards

 

It is apparent that all carton manufacturers are optimizing their resources to meet the demands of the industry.  Clearly producers must provide manufacturers with as much lead time as possible and show restraint in changing orders or requesting new artwork.  Some producers are consolidating brands to simplify ordering and inventory.  There does not appear to be a decline in medium-term orders, so the pressure on manufacturers will continue possibly through mid-summer depending on the reemergence of the food service sector.

 

Dolco, in particular, has expressed gratitude to their customers for understanding and cooperation through the past two difficult months.

 


 

Ethanol Price Collapse to Impact Corn Growers

04/30/2020

The Monday April 27th edition of Wall Street Journal quantified the plight of the ethanol industry.  On April 1st, ethanol traded at 84 cents per gallon compared to gasoline at 69 cents.  Dilution of gasoline with 10 percent alcohol would not occur without the RFS mandate that legalizes  transfer of funds from the pockets of consumers to corn growers and the ethanol refining industry.

Notwithstanding mandates and subsidies, production of ethanol has dropped to 537,000 barrels per day for the week ending April 24th.  According to the U.S. Energy Information Administration, inventories reached 27.7 million barrels on April 17th representing 50 days of production in storage.  In January 2020 inventory was 22 million gallons and production was over 1.0 million barrels per day. Given the spot price for WTI crude oil and abundant oversupply, it is doubtful whether production of ethanol will be restored before the 2020 harvest

 

The April 9th edition of the USDA World Agriculture Supply and Demand Estimates (WASDE) forecast 5,050 million bushels of corn to be used to produce ethanol and DDGS, the major byproduct. The portion of the corn crop required for ethanol represented 31.6 percent of the 2019 harvest

 

 The University of Missouri has estimated that farm income will be reduced by $20 billion or 19 percent in the current harvest year.  At present the cost of corn production is estimated at $3.40 per bushel.  The USDA forecast average farm price at $3.60 per bushel in the April WASDE, is down 20 cents from the March 2020 WASDE report.  Effectively elevators are offering less than the CBOT quotation in some regions without a functional ethanol plant.   Depending on location and demand the discount may be as much as 50 cents per bushel below the breakeven cost of production. An important consideration when running a multi-row planter over a field 12 hours per day in late April and early May.


 

McDonald’s Reports on Q1 2020

04/30/2020

In a press release dated April 30th McDonald’s Corporation (MCD) announced results for the 1st Quarter ending March 31 st. As with all QSRs March was impacted by COVID-19 worldwide.

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 US$ x 1,000 except EPS)


Chris Kempczinski CEO McDonald's Corp

1st Quarter Ending March 31st

2020

2019

Difference (%)

Revenue:

$4,714,400

$5,024,100

-6.2

Gross profit company stores:

$273,000

$355,000

-23.1

Operating income:

$1,693,600

$2,094,000

-19.1

Pre-tax Income

Net Income

$1,444,900

$1,106,900

$1,831,300

$1,328,400

-21.1

-16.6

Diluted earnings per share:

$1.47

$1.72

-14.5

Gross Margin company stores (%)

13.5

15.8

-14.6

Operating Margin (%)

35.9

41.6

-13.7

Profit Margin (%)

23.4

26.4

-11.4

Long-term Debt and lease obligations:1

$46,875,000

$31,075,000

+50.8

12 Months Trailing:

     

Return on Assets (%)

13.8

   

Return on Equity (%)

N/A

   

Operating Margin (%)

42.2

   

Profit Margin (%)

28.6

   

Total Assets1

$47,510,500

$32,811,200

+44.8

Market Capitalization

$139,480,000

   

Note 1. December 31st. 2019/2018

2-Week Range in Share Price: $124.23 to $221.93 50-day Moving average $170.49

Market Open April 30th $182.84 Close $187.99 post-release

Forward P/E 28.4 Beta 0.6

Comparative same-store global sales were down 3.4 percent. 75 percent of stores world-wide are operating with take-out, drive-through and delivery.


Commenting on Q1 Chris Kempczinski, president and CEO stated "following our strong performance in 2019, McDonald’s began 2020 with exceptional global momentum, and our January and February sales were reflective of that trend. Since then, the global crisis caused by the COVID-19 pandemic has significantly disrupted our business, and we continue to operate in a very challenging and unpredictable environment,” He added “McDonald's has seen a lot over our 65 years and I'm confident that the actions we're taking will enable us to emerge from this crisis in a position of competitive strength. The determination and team spirit across the McDonald's System is evident as we continue to offer affordable, convenient food while at the same time providing for the safety of our crew and customers and continuing our legacy of supporting local communities in which we operate."


 

Fire Destroys Three-Level Laying House at Gemperle Family Farms

04/30/2020

Approximately mid-day Thursday April 23rd a fire erupted in a three-level laying house at the Keyes Complex of Gemperle Family Farms in Stanislaus County, CA.  The building was a complete loss along with a flock of approximately 280,000 hens.  Five fire companies responded to the conflagration that took four hours to extinguish.  Initial investigations suggest that the fire was caused by workers repairing a ventilation unit. 

 

Most fires in old high-rise barns erected over twenty years ago are associated with electrical failure.  Fires in relatively new buildings during daylight hours are extremely rare and this event suggests deficiencies in planning for a fire or response to the initial outbreak.

 


 

Midwest Poultry Consortium Center of Excellence Program Moves to Iowa State University

04/30/2020

Established in 1996 at the University of Wisconsin, Madison Campus, the Midwest Poultry Consortium Center of Excellence Scholarships/Internship Program will now move to Iowa State University in 2020.  The program of studies comprising up to eighteen credits in diverse areas relating to poultry science will take place over a six-week summer session.  The program for 2020 will begin on May 18th and continue through June 26th.  The second part of the program involves summer internships at Midwest Poultry Consortium Member companies.

 

The program will in future years rotate between Iowa State University and the University of Minnesota.


 

Vending Machine for Eggs

04/29/2020

Wise Acre Farms in Windsor, CA in Sonoma County has installed a vending machine to dispense packs of eggs. Although placed in 2016, the advent of COVID-19 has increased sales as consumers are reluctant to visit supermarkets.  The machine is restocked each night to ensure freshness.  The vending machine accepts either credit cards or cash.

 

 

Wise Acre Farms, a family enterprise offering eggs from pasture-raised flocks.


 

BioChek Acquires Biotecon to Broaden Product Scope

04/29/2020

According to an April 23rd release, BioChek an EW Company based in the Netherlands has acquired Biotecon of Germany.  The transaction has created a global provider of ELISA assays, qPCR test kits and analytical software.

 

Barend Van Dam, Founder and CEO of BioChek stated "this allows us to offer a complete diagnostic management solution from farm to fork for our customers".  He added "food safety starts with healthy animals. We are proud that with the acquisition of Biotecon we can cover the whole chain starting with the monitoring of animal health through management, safe processing to the final consumer product".

 

Dr. Berghof Jager, Founder and CEO of Biotecon GmbH commented "we are excited to be part of BioChek. With our global presence we can better serve and support our customers and further improve our market position".


Barend van Dam Founder of BioChek


The combined resources of both companies will allow greater investment in research and development of innovative products and services.

 

For additional information click on to the BioChek logo on the right side of the welcome page.


 

AEB Introduces EGG PRO™ Web-Based Curriculum

04/29/2020

The AEB has introduced a training program for professional cooks.  The Egg Pro™ E-learning experience is video-based with content contributed by experts and consultants affiliated to the American Egg Board.  Topics will include egg safety, nutrition, purchasing strategies and made-to-order and high-volume made-to-hold operations.  Registration is free by accessing <rouxbe.com/eggpro>. 

 

The EGG PRO™ series comprises two online courses, Egg Foundations and Egg Functionality covering cooking techniques and Egg Functionality and Culinary Research.


 

SQF Accepting Audit Extension Requests

04/29/2020

Arising from the current COVID-19 crisis, SQF is granting a six-month extension for certification.  SQF recommends that applicants should contact their certification body to establish a time at which to conduct the annual audit.


 

Plight of Independent Egg Producers

04/29/2020

Dow Jones described the travails of Josh Zimmerman who operates a family farm in Hamburg, PA.  His flock of 75,000 cage-free hens supplied a processing company producing egg liquid for the food service market.  With the collapse of this segment of distribution, his buyer is no longer able to take and pay for his eggs and he is obliged to find alternative markets. 

 

As a supplier of tray-packed eggs to a breaker, Zimmerman operated only with a farm packer and was not equipped to sell eggs to retail outlets.  Fortunately, he has been helped by a business that sells eggs directly to the public. To participate in this market Zimmerman invested in equipment to wash and grade between 175 and 190 cases each day. 

 

Last week, EGG-NEWS recounted the situation in Albany, MN where an integrator euthanized four flocks previously supplying eggs to a now shuttered Cargill breaking plant in Big Lake, MN. 

 

Zimmerman and farmers in his position hope that demand from restaurants will increase as COVID-19 restrictions are eased.  In addition to the loss of markets, the breaker he supplied has experienced problems with absenteeism due to COVID-19 infection of workers.  Even if a market were to be regained in the short term, processing rates will be constrained by availability of labor.


 

YUM! Brands Reports on Q1 of FY 2020

04/29/2020

In a press release dated April 29th YUM! Brands announced results for the 1st Quarter 0f FY 2020 ending March 31 st.

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 US$ x 1,000 except EPS)

1st Quarter Ending March 31st

2020

2019

Difference (%)

Revenue

$1,263,000

$1,254,000

+0.7

Gross profit Company restaurants:

$161,000

$183,000

-12.0

Operating income:

$250,000

$433,000

-42.3

Pre-tax Income

Net Income

$95,000

$83,000

$299,000

$262,000

-68.2

-68.3

Diluted earnings per share:

$0.27

$0.83

-67.5

Gross Margin Company restaurants (%)

45.3

54.9

-17.5

Operating Margin (%)

19.7

34.5

-42.9

Profit Margin (%)

6.6

20.9

-68.4

Long-term Debt:

$11,059,000

$10,131,000

+9.2

12 Months Trailing:

     

Return on Assets (%)

25.4

   

Return on Equity (%)

n/a

   

Operating Margin (%)

34.1

   

Profit Margin (%)

23.1

   

Total Assets

$6,085,000

$5,231,000

+16.3

Market Capitalization

$25,800,000

   

52-Week Range in Share Price: $54.95 to $119.72 50-day Moving average $74.72

Market Close pre-release April 29th $87.46 After hours post-release $88.50

Forward P/E 24.8 Beta 0.7

Worldwide sales change for Q1 2020 compared to Q1 2019 over 24,304 locations (%):-

Company -3; KFC -2; Pizza Hut -9; Taco Bell+4.

Operating and Company Restaurant Margins (%):-

KFC 39.7/11.7; Pizza Hut 32.7/(3.0); Taco Bell 31.7/22.4.
 

In commenting on Q1 results David Gibbs, CEO, said “First-quarter results reflect two different realities. We began the year with momentum across many of our businesses, however as the quarter progressed we were heavily impacted by the unfortunate spread of COVID-19. Around the world, we took extraordinary measures to protect the health and safety of our employees, customers, franchisees and restaurant team members. We partnered with our franchise operators on our shared mission during this global crisis to provide affordable, convenient food in a safe, low contact environment with drive-thru, curbside carryout, and contactless delivery all enabled by our digital capability. As a result, our restaurants around the world remain largely open for business, serving customers and supporting frontline workers and other essential workers in our communities.


 

Welcome to New Sponsor, Fasteners Resource

04/29/2020

Fasteners Resource was established in 2007 by Todd Heimler to provide the egg production industry with components required for construction and maintenance.  Subsequently, the company branched out into fabrication of cage items including trough patches, cage bottoms, brackets, feeder chains, bird ladders, feeder and egg collector motors and components, nesting curtains, and doors. 

 

Fasteners Resource has a second division, Fastners Resource Metal Group (FRMG) with capability for wire bending, welding, thread tapping, laser cutting, and machining.  Special components from obsolete systems can be remanufactured and duplicated from samples.

 

In January 2020 Fasteners Resource acquired a full line of personal protective equipment and safety products representing 3M, Kimberly-Clark, Dupont, and Bolle.  Available PPE items  include eye, head, face, and hand protection, footwear, masks, protective clothing, and cold- weather gear.  Safety products include instrumentation, first aid, lockout and tag out, and hazardous storage equipment.

 

In addition to the 350,000 SKUs of safety equipment available, the company is now able to supply hand sanitizer in commercial quantities together with masks both reusable and disposable.

 

The company has expanded, both in scope and customer base, by providing service and competitive prices.  Todd Heimler and his team consider Fasteners Resource to be a one stop-one source-one solution enterprise committed to helping producers with problems. 

For additional information on products and services, access the company website by clicking on to the Fasteners Resource logo on the right side of the welcome page.


 

Interactive maps: COVID-19

04/28/2020

Density of COVID-19 in the U.S. as compiled by Johns Hopkins University. Prevalence is correlated to population density.


Click to view maps

 


 

CDC and OSHA Recognize the Transmission of COVID-19 During Transport of Workers

04/28/2020

Investigation of outbreaks of COVID-19 in packing and processing plants has revealed that workers infected in carpools and company shuttles.  This observation was originally made by the Canadian Food Safety Agency while investigating an outbreak in an Olymel hog plant that has since re-opened.

 

Joint CDC and OSHA recommendations emphasize the need for social distancing.  The agencies recommend

  • Limiting the number of people in each vehicle
  • Enforcing hand sanitation before entering the vehicle and when arriving at the destination
  • Wearing cloth masks during transit
  • Cleaning and disinfecting seats and surfaces that may be touched

Additional recommendations have been made for common areas including break-rooms, locker and change-rooms, entrances and exits, clock-in locations and bathrooms.


 

Global Egg Nutrition Expert Group Established

04/28/2020

The International Egg Nutrition Center (IENC) a subsidiary of the International Egg Council has been formed to develop, collate and optimize research on the nutritional value of eggs.  According to an IENC release, the objectives of the group are consistent with the United Nations Sustainable Development Goals of Zero Hunger, Good Health and Wellbeing.

North American members of the nine-person panel include

  • Tim Lambert, Chair and CEO of Egg Farmers of Canada
  • Dr. Nikhil Dhurandhar, Chairperson of the Department of Nutritional Sciences, Texas Tech. University
  • Kim Kesseler, Manager of Nutrition, Egg Farmers of Canada
  • Dr. Mickey Rubin, Executive Director of The Egg Nutrition Center of the American Egg Board
Dr. Mickey Rubin U.S.Representative on IENC

 


 

Cal-Maine Foods Issues Response to Texas Attorney General Complaint

04/28/2020

In a company release on April 28th Cal-Maine Foods, Inc. (NASDAQ: CALM) issued the responded to a state of Texas lawsuit alleging that the Company engaged in price-gouging during the COVID-19 pandemic. Since the situation faced by Cal-Maine Foods could apply to any U.S. egg producer in the future their timely response is reproduced as issued:-

 

“Cal-Maine Foods strongly denies these allegations and will vigorously defend itself against the lawsuit.

Cal-Maine has not exploited this tragic national pandemic for gain. Cal-Maine Foods is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in states across the southwestern, southeastern, mid-western and mid-Atlantic regions. The Company’s 3,490+ employees have worked hard during this crisis to meet increased consumer demand. In doing so, Cal-Maine Foods has not changed its longstanding approach to pricing. Any allegation to the contrary is simply not true.

There has always been great volatility in the egg pricing market. The COVID-19 pandemic caused a massive disruption in every sector of the economy, including the egg industry.Retail demandfor eggs reached historically high levels and egg prices increased significantly in line with those demand trends. However, egg prices have since declined quickly to pre-COVID-19 levels.

 

The domestic egg market is intensely competitive and highly volatile even under normal market circumstances. For decades, like other egg producers, Cal-Maine Foods has priced egg sales based on a model utilizing independent, third-party market quotes published by Urner Barry, the leading provider of protein market news and information for the food industry. This market pricing methodology can be viewed at https://www.urnerbarry.com/Methodology/UB_Methodology_EGG_20191003.pdf. Since the mid-1800s, Urner Barry has been the standard medium through which buyers and sellers gauge fair market value across the supply chain. Importantly, the Urner Barry-based pricing model is mutually agreed to by our customers. Cal-Maine Foods has always been consistent in our pricing practices, whether we sell at a profit or a loss. Cal-Maine Foods has hewed to those practices and its longstanding customer agreements throughout the COVID-19 pandemic.

 

Egg prices can fluctuate on a weekly and even daily basis and are also subject to seasonal changes in demand. (See table on page 2 for recent egg prices). This is why egg buyers and sellers often refer to an industry benchmark service, such as Urner Barry, when negotiating pricing formulas. Much like other basic agricultural, oil and energy industries, the egg industry is subject to the balance of supply and demand and other natural market forces. The recent increase in the price of eggs is directly related to unprecedented retail demand, which also occurred during the peak Easter season when demand for eggs is typically high, not the result of price–gouging nor any other improper conduct by Cal-Maine Foods. The Company does not sell eggs directly to consumers or set retail egg prices.

 

Cal-Maine Foods is proud to have a large market presence in the State of Texas, with 12 production facilities and over 1,300 employees. We have enjoyed strong relationships in the Texas communities where we operate. We have made significant local investments in these communities and have created job opportunities for Texas citizens. We also have many loyal customers in Texas who look to Cal-Maine Foods as a trusted supplier of eggs. We are extremely grateful for these customers, and the favorable reputation we have earned in our Texas markets. Since 1958, Cal-Maine Foods has operated with honesty and integrity, and we will continue to follow these same guiding principles wherever we operate and deliver value to our customers and shareholders. We intend to defend our good name and prove that these allegations are without merit.”

 

Urner Barry Southeast Region – U.S. Market Data for fiscal year 2020

The average market price thru 11 months is $1.23 cents per dozen for Large Grade A eggs. The low price for the year was on May 30, 2019, at $0.62 (62 cents) per dozen, or below break-even cost. The high price was $3.18 per dozen on March 26, 2020.


Examples of egg price volatility:

   

August 1, 2019:

   

$0.64

   

August 29, 2019:

   

$1.29

   

September 19, 2019:

   

$0.84

   

October 17, 2019:

   

$0.85

   

November 21, 2019:

   

$1.77

   

January 2, 2020:

   

$0.97

   

January 16, 2020:

   

$0.87

   

February 27, 2020:

   

$1.13

   

March 26, 2020:

   

$3.18

   

April 22, 2020:

   

$1.16


 

Alltech to Present ONE Ideas Conference for 2020 in Virtual Format

04/27/2020

In view of COVID-19 travel restrictions, the Alltech Ideas Conference (ONE) scheduled for May 17th through 19th in Lexington, KY will be presented as a virtual format. The annual event typically attracts more than 3,500 attendees from 70 countries to explore innovative solutions across the global food supply chain.

 

Dr. Mark Lyons, president and CEO of Alltech commented “our first priority remains the health and safety of attendees, our colleagues and the communities in which we live and work.” He added “with that in mind, we have decided to host this year’s international conference on a virtual platform, allowing registrants from around the world to engage in industry-leading content in a way that is accessible for everyone.”

 

The Alltech ONE Virtual Experience will provide access to agricultural topics, including agri-business, aquaculture, beef, crop science, dairy, the future of food, pig and poultry. Live-streamed keynote presentations and on-demand video content from some of the world's leading industry experts, including the most impactful presentations from past years’ events, will be available beginning May 18th 2020.

 

Now in its 36th year, ONE continues to be a source of inspiration and motivation within the agri-business industry, even in the face of disruption. The conference explores innovative solutions through the lens of technology, navigating challenges and uncovering opportunities. This year, Alltech will apply these ideas to deliver a beneficial ONE experience virtually.

 

Thought-leaders and change-makers across the agri-food industry are invited to explore the power of science, technology and human ingenuity through this interactive, online format.

For additional information and registration contact Jenn Norrie,            

Communications Manager, North America

jnorrie@alltech.com; (403) 863-8547


Dr. Mark Lyons Welcoming Attendees to the

2019 ONE Ideas Conference


 

Alltech to Present ONE Ideas Conference for 2020 in Virtual Format

04/27/2020

In view of COVID-19 travel restrictions, the Alltech Ideas Conference (ONE) scheduled for May 17th through 19th in Lexington, KY will be presented as a virtual format. The annual event typically attracts more than 3,500 attendees from 70 countries to explore innovative solutions across the global food supply chain.

 

Dr. Mark Lyons, president and CEO of Alltech commented “our first priority remains the health and safety of attendees, our colleagues and the communities in which we live and work.” He added “with that in mind, we have decided to host this year’s international conference on a virtual platform, allowing registrants from around the world to engage in industry-leading content in a way that is accessible for everyone.”

 

The Alltech ONE Virtual Experience will provide access to agricultural topics, including agri-business, aquaculture, beef, crop science, dairy, the future of food, pig and poultry. Live-streamed keynote presentations and on-demand video content from some of the world's leading industry experts, including the most impactful presentations from past years’ events, will be available beginning May 18th 2020.

 

Now in its 36th year, ONE continues to be a source of inspiration and motivation within the agri-business industry, even in the face of disruption. The conference explores innovative solutions through the lens of technology, navigating challenges and uncovering opportunities. This year, Alltech will apply these ideas to deliver a beneficial ONE experience virtually.

 

Thought-leaders and change-makers across the agri-food industry are invited to explore the power of science, technology and human ingenuity through this interactive, online format.

For additional information and registration contact Jenn Norrie,            

Communications Manager, North America

jnorrie@alltech.com; (403) 863-8547


Dr. Mark Lyons Welcoming Attendees to the

2019 ONE Ideas Conference


 

McDonald's to Offer Thank You Meals for First Responders and Healthcare Workers

04/26/2020

Commencing April 22nd and extending through May 5th, McDonald's Corp. will offer free Thank You meals to healthcare workers, firefighters, paramedics and police officers.  The donations will be made by individual stores using the drive through lanes and will comprise a sandwich, beverage and a side served in a Happy Meal™ box.

 

Joe Erlinger, President McDonald's USA commented "we have been inspired by the way our franchisees have been going above and beyond to support their local communities through this trying time".  He added "I am proud of how our company, franchisees and supply partners have come together to give back to those who are working tirelessly for our country".


 

Durable Goods Orders Fell in March

04/26/2020

U.S. durable goods orders declined by 14 percent in March 2020, a level higher than the 11.9 percent predicted.  This decline compares to a rise of 1.2 percent in February.

 

The Commerce Department announced that new orders for U.S. manufactured capital goods rose only 0.1 percent in March. Data for February was revised to a to a decline of 0.8 percent from the previously announced 0.9 percent.

 

Orders for capital goods generally precede increased manufacturing capacity in future months. The almost static value suggests that manufacturers do not anticipate an increase in either domestic or export demand. The sharp drop in purchase of durables can be attributed to the unprecedented increase in the unemployment rate.


 

Publix Buying Milk and Produce from Farmers for Food Bank Distribution

04/25/2020

On April 22nd Publix Supermarkets initiated a program to purchase fresh produce and milk directly from farmers.  Products will be donated to member food banks of Feeding America food banks in a seven-state area.  Todd Jones, CEO of Publix stated, “as a food retailer we have the unique opportunity to bridge the gap between the needs of families and farmers impacted by the coronavirus pandemic” He added,  “in this time of uncertainty we are grateful to be able to help Florida’s produce farmers, southeastern dairies and families in our community.”

 

Publix operates 1,242 stores in Florida, Georgia, Tennessee, the Carolinas, and Virginia.


 

Organic Consumers Association Files Suit Against the Happy Egg Company

04/25/2020

The Happy Egg Company, the U.S. subsidiary of Noble Foods based in the United Kingdom, will be obliged to defend a lawsuit filed by the Organic Consumers Assocation.  At issue, is an allegation of false advertising, claiming that Happy Egg brand products labeled as “pasture-raised” are held under free-range standards. 

 

The Happy Egg Company no longer imprint the American Humane logo on their packaging claiming “pasture raised” The AHA standard requires five acres for two thousand hens but in effect according to the Organic Consumer Association Happy Egg Company allows one acre for the same number of hens.

 

The lawsuit was filed in the District of Columbia, Civil Division as Case 2020CA002009 B. In the complaint filed with the Court, an illustration of Happy Egg Company packaging clearly states “free range” in addition to "pasture raised on over eight acres".


 

NIAID Priorities for COVID-19

04/25/2020

The National Institute of Allergy and Infectious Diseases (NIAID), a component of the National Institutes of Health, has outlined a strategic plan in response to the COVID-19 pandemic.  The priorities include: -

  • Acquiring basic knowledge of the SARS-CoV-2 virus, characterizing the molecular structure and antigenic factors and defining the epidemiology of COVID-19.
  • Developing rapid sensitive and specific diagnostic assays for the virus and to detect and quantify an antibody response.
  • Evaluating potential therapeutic agents for COVID-19 including remdesivir, antibody-based treatment, immune stimulation, and monoclonal antibodies.
  • Developing a safe and effective vaccine based on previous studies on MERS and SARS coronavirus infections

NIAID has considerable experience in designing, implementing, and analyzing projects to establish the efficacy and safety of vaccines.


NIAID Director Dr Anthony Faucci

 

Herbruck’s Donates Eggs to Michigan Food Banks

04/25/2020

Herbruck’s Poultry Ranch, has donated more than 800 cases of eggs to Feeding America, West Michigan and to the Food Bank of Eastern Michigan in Flint.

 

Greg Herbruck the president of the third generation family enterprise stated “at Herbruck’s, we believe in going above and beyond to support our neighbors,” He added “we typically donate over a million eggs each year, and we’ve upped the ante to help ensure Michiganders in need have access to nutritious food during this pandemic. Our recent donation over the past three weeks is about a quarter of what we usually supply each year and we have no plans to slow down.”


 




































































































































































































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