Rob Steiner, Vice-president of sales for Ziggity Systems has announced the appointment of Luke D. Snyder as an Account Manager responsible for the Carolinas, Virginia, Maryland, Delaware, Ohio and southern Indiana.  Steiner stated, “His background in agriculture and extensive experience in relationship-building across multiple states will be invaluable as we continue to grow our presence in the region”.

Luke is a native of Indiana and graduated from Purdue University in May 2021 with a degree in interdisciplinary agriculture with a minor in agricultural systems management.

Luke is currently undergoing extensive training at the company headquarters and will relocate to North Carolina in coming months.

Additional information on products produced by Ziggity Systems can be obtained by accessing the company website by clicking on to the Ziggity logo on the right side of the Welcome Page.

In a July 23^rd 2024 release, Albertson’s Companies (ACI) posted financial results for the 1^st quarter of FY 2024 ending June 15^th 2024. Earnings and revenue were consistent with consensus estimates. As the second largest pure-grocery company, Albertson’s can be regarded as a bellwether for the retail food industry, subject to increased costs of foods, labor, and transport in a competitive consumer environment impacted by inflation as reflected in low net margins among competitors.

Albertson’s Companies posted a 1.4 percent increase in same-store sales during the most recent quarter with a 23 percent increase in digital sales over the corresponding Q1 of FY 2023. Loyalty membership increased 15 percent to 41.4 million.

For Q1 FY 2024 net income was $240.7 million on total revenue of $24,265 million.  Comparable figures for Q1 FY 2023 ending February 25^th 2023 were net income of $417.2 million on total revenue of $24,050 million. Diluted EPS for Class A shares for the most recent quarter was $0.41 down from $0.72 for Q1 FY 2023. Gross margin increased fractionally from 27.7 percent to 28.0 percent denoting a minor reduction in cost of goods sold reflecting deflation. Operating income decreased from 2.6 percent in Q1 FY 2023 to 1.8 percent. During Q1 FY 2024 Albertsons recorded a $9.3 million loss on property disposition, impairments and “other expenses”. This contrasts with a $27 million in property or other impairments offset by $16 million “other income” in Q1 FY 2023.

In commenting on results CEO Vivek Sankaran stated, "In the first quarter of fiscal 2024, we continued to invest in our Customers for Life strategy and the digital and omnichannel capabilities necessary to support it." He added "Our Customers for Life strategy is placing the customer at the center of everything we do, and we continued to drive strong year-over-year growth in loyalty members as we launched our new simplified 'for U' loyalty program. Amidst an evolving economic and industry backdrop, we continued to deliver outsized growth in our digital and pharmacy businesses."

Sankaran concluded, "As we look ahead to the balance of fiscal 2024, we expect to see continuing headwinds related to investments in associate wages and benefits, an increasing mix of our pharmacy and digital businesses which carry lower margins, and the cycling of prior year food inflation”

On October 14^th 2022 Kroger announced a bid for Albertson’s offering $34 per share and assuming $4.7 billion in debt in a $25 billion transaction. The acquisition would at the least have required divestment of stores among in areas with an overlap.  Several U.S. senators, states Attorneys General and unions representing Albertson’s workers oppose the transaction. The parties to the merger offered to spin off 413 stores and eight DCs to C&S Wholesalers, since increased by an additional 166 stores. The combined company would invest in worker benefits, devote $1 billion of working capital to reduce prices and would recognize unions.

On January 15^th in advance of a Federal Trade Commission decision, the parties issued a joint statement “We remain in active and ongoing dialogue with the FTC and individual state Attorneys General regarding our proposed merger and divestiture plan. We believe our merger with Albertsons and the comprehensive divestiture to C&S will result in the best outcomes for customers, associates and our communities”.

The FTC sued to block the merger in mid-February 2024 supported by eight states and Washington DC. with an administrative hearing to commence on August 26^th 2024. A case filed by the Attorney General of Colorado will be heard commencing September 30^th 2024.

Albertson’s Corporation posted assets of $26,077 million including $3,616 million in goodwill and intangibles, against long-term debt and lease obligations of $15,343 million. The Company had an intraday market capitalization of $11,690 million on July 25^th 2024. ACI trades with a forward P/E of 8.3 and has ranged over a 52-week period from $19.33 to $23.88 with a 50-day moving average of $20.10. Approximately 74 percent of equity is held by institutions with 14 percent by insiders. The Company attained a 12-month trailing operating margin of 2.3 percent and a profit margin of 1.4 percent. Return on assets was 5.4 percent and 45.6 percent on equity

Albertsons operates 2,269 stores under 20 banners including Albertson’s, Safeway, Von’s, Acme, Jewel-Osco and Shaw’s.

Monogram Foods has informed the Tennessee Department of Labor and Workforce Development that it intends to close the Dickson, TN plant commencing September 16^th with completion on October 31^st. 

The facility established in 1989 operates sandwich production lines and produces frozen breakfast sandwiches and snacks.  Monogram Foods purchased the Dickson plant that was previously expanded in 2005 with the intention of attaining profitability for the facility.  Despite exploring various options, the company has concluded that the business is non-viable due to weak consumer demand.

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: JULY 25^th 2024.

OVERVIEW

Prices for corn, soybeans and soybean meal were considerably higher this past week reversing the declines over the preceding week. Prices were influenced by more moderate weather conditions suggesting high yields despite a derecho on July 15^th affecting five major production states. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in Brazil and Argentine. Contributory factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans for the 2024 crop. The July WASDE Report contained essentially unchanged values from the extensively revised May and June Reports. Two thirds of corn is silking and more than half of the soybean crop is setting pods in advance of the five-year average and with superior crop condition as compared to 2023. The transition from a neutral phase to a La Nina event is expected during the fourth quarter. The August WASDE should provide updated projections on yields, exports and prices that should for the 2024 season.

At 12H00 EDT on July 25^th the CME corn quotation for September delivery was up 3.8 percent to 407 cents per bushel, compared to the previous week at 392 cents per bushel for September delivery. Corn price was influenced by acreage planted, ethanol demand and the proportionally high ending stock from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and price are indirectly influenced by wheat availability as influenced by weather in North America and Australia, the Black Sea crop and events in the Red Sea. Orders by China resumed at the end of the 2022-2023 market-year and have continued through mid July despite a moderately higher Dollar Index and increased ocean freight. Total exports for the current market year are 30.7 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans were priced at 1,073 cents per bushel for September 2024 delivery, up 3.1 percent compared to 1,042 cents per bushel for September delivery last week. Higher prices were attributed to export orders, more farm selling and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the current market year are 16.2 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal closed at $333 per ton for September delivery, up 4.4 percent from $319 per ton last week for September delivery. Price was influenced by demand coupled with high crush volumes for consecutive months from December 2023 through May 2024 inclusive but with a lower volume in June. Price will fluctuate to reflect the CME price for soybeans and the demand for biodiesel despite the adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the extensively revised May and June WASDE Reports essentially unchanged in July.

On July 24^th at 20H00 WTI was $6.74 (-8.2 percent) lower from last week to $74.60. Price is attributed to lower demand despite geopolitical uncertainties and tensions persisting in the Middle East. Other factors influencing price included restoration of drilling and refining in the Gulf region and a draw-down on U.S. reserves. The reduction in attacks on shipping in the Red Sea is due mostly to fewer vessels transiting the waterway to and from the Suez Canal. It is evident that U.S. production is a moderating influence on price, attaining an average of 13.3 million barrels per day in June with ample reserves. There was a downward trend in WTI price during the week with a range of $78.11 down to $74.60 per barrel. Crude oil inventory in the U.S., other than the Strategic Reserve, was down 5.2 percent to 31.0 million barrels last week. High U.S. production is constraining domestic and international prices. The recent decline in energy cost during the past month is reflected in deflation possibly influencing the FOMC in their eventual lowering of the benchmark interest rate.

Economic data released during the past quarter (Q1 GDP; PCE, Confidence, Productivity, Employment) confirmed slow growth of the economy but with a downward trajectory in inflation The data-driven Federal Reserve FOMC passed on lowering the benchmark rate on June 12^th. Federal Reserve Chair Jerome Powell and Reserve Bank Governors indicated one reduction in the 10-year rate during 2024 in the fall. Economists are now suggesting that the Fed is “behind the curve” again on adjusting rates downward with an 80 percent consensus for a 25 basis point reduction at the September meeting.

USDA Weekly Egg Price and Inventory Report, July 25^th 2024.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were up 4.0 percent on average this past week. Medium size was down 3.6 percent. The 5-day rolling National wholesale price for graded loose on July 22^nd at $2.24 per dozen was approximately $0.79 per dozen above the 3-year average of $1.45 per dozen and up $1.39 from the corresponding week in 2023 at $0.85 per dozen. This past week shell egg inventory was down 2.4 percent, following a fall of 3.5 percent in stock during the previous week. Decreased inventory with small incremental daily increases in prices during early summer suggests higher margins for producers through the current quarter despite replacement of depleted flocks. Higher prices compared to 2023 are attributed to losses due to HPAI depletion reducing the national flock by 20 to 22 million hens.
• Although there are weekly transfers of mature pullet flocks to laying houses, hen numbers are constrained by depopulation due to HPAI. Close to 13 million hens were lost during the 4^th Quarter of 2023 that have not yet been completely replaced. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May and 3.0 million in July.
• This past week, chains apparently widened the spread between delivered cost and shelf price. This could result in a rise in generic stock despite reduced supply with softening demand. Stock level will depend on constant re-ordering to fill the pipeline through into August. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
• Total industry inventory was down by 1.4 percent overall this past week at 1.52 million cases with a concurrent 3.6 percent increase in breaking stock, following a 5.5 percent rise during the preceding processing week. Demand for egg products fell through late May into July attributed to less home-baking and entertaining.
• It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to three percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
• The number and extent of future possible HPAI outbreaks during coming months cannot be projected but sporadic cases in backyard poultry, isolation from wild migratory and predatory birds and almost 170 confirmed dairy herds in thirteen states is a cause for concern. More surveillance information should be released by USDA-APHIS as it becomes available, concerning the prevalence rate of avian carriers of H5N1 among resident domestic free-living birds together with a review of molecular and field epidemiology for the current spring and future fall waves of HPAI. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances.
• The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past three years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
• On July 24^th the stated total flock of 304.7 million, was up by 0.3 million from last week, including about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production. Given the latest figures for depopulation it is estimated that the total flock is at least 20 to 22 million hens lower than the 326 million before the onset of HPAI in 2022. The loss of 3 million hens in July does not appear to be reflected in the latest release of data. Figures released on July 24^th may overestimate flock size especially if more recent losses are not included.
• The ex-farm price for breaking stock (rounded to one cent) was unchanged at $1.71 per dozen.Checks delivered to Midwest plants were unchanged at $1.61 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs usually with a lag of one to two weeks.

The Week in Review

Prices

According to the USDA Egg Market News Reports released on July 22^nd 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was up 4.0 percent from last week to $2.37 per dozen. Large was up 4.0 percent to $2.35 per dozen. Mediums were down 3.6 percent to $1.61 per dozen delivered to DCs as young pullets commence production contributing to 1.6 and 5.9 percent respectively increases in Medium and Small sizes over the past week. It is emphasized that these prices are for the previous week. 

Prices should be compared to the USDA benchmark average 4-Region blended nest-run cost of 77.7 cents per dozen as determined by the Egg Industry Center based on USDA data for June 2024. This value excludes provisions for packing, packaging materials and transport, amounting to 57 cents per dozen as determined in mid-2023 from an EIC survey (with a low response) and now realistically 60 cents per dozen.

Currently producers of generic shell eggs should be operating with positive margins irrespective of region and customer-supply agreements. The progression of prices during 2023 and 2024 to date is depicted in the USDA chart reflecting three years of data, updated weekly.

The July 19^th edition of the USDA Egg Markets Overview confirmed that the USDA Combined Region value in cartons (rounded to the nearest cent), was down 0.5 percent to $2.35 per dozen delivered to warehouses one week ago. The USDA Combined range for Large in the Midwest was $2.26 per dozen. At the high end of the range, the price in the South Central region attained $2.42 per dozen.

Flock Size 

The loss of 8.6 million hens in April is now reflected in the most recent weekly data. There is a question concerning the 5.7 million depopulated in May and 3.0 million in July to date. Any delay in posting accurate updated data should be avoided given the importance of weekly flock numbers to pricing. Accurate values for both the producing and total flock are required by farmers, packers, breakers and buyers.

According to the USDA the number of producing hens reflecting July 24^th 2024 (rounded to 0.1 million) was up 0.3 million to 299.3 million suggesting that the rate of depletion and depopulation is almost balancing placement of started pullets. The total U.S. flock includes about one million molted hens due to return to production Approximately 4.5 to 5.0 million pullets on average reach maturity each week, based on USDA monthly chick-hatch data for 20-weeks previously. The increase is offset by routine flock depletion and an additional loss of approximately 17 million year-to-date. Some flocks have been replaced on a rotational basis and flock depletion delayed subject to available housing. Based on inventory level and prices, the population of hens producing table eggs and breaking stock should now be in balance or slightly below early summer demand by consumers. Industrial and food service off-take is increasing, attaining pre-COVID levels. Prices will continue to fall through August but have shown atypical seasonal stability compared to anticipated decline.

Lohmann Germany has announced that the current application of Respeggt in ovo sexing at the Ankum Hatchery will be extended for an additional three years.

The Respeggt process involves assay of estrogenic hormones in a sample of allantoic fluid extracted from eggs on the 9^th day of incubation following the principle developed by Embrex in the late 1980s.  The Respeggt process is applicable to both white and brown-feathered strains.

Measure J is on the Sonoma County ballot in November.  The intent of the Measure is to effectively eliminate all intensive livestock production in the County given their definitions for Concentrated Animal Feeding Operations (CAFOS).

Measure J is backed by a number of animal rights and environmental advocacy groups led by the Coalition to End Factory Farming with participation from Direct Action Everywhere (DxE)

The limits proposed in Measure J designate farms with between 25,000 and 82,000 laying hens as “medium” and above this figure as “large”. Farms operating with a liquid manure system with 99,000 to 30,000 would be categorized as “medium” and with more than this number as “large”.

Other than laying hens, presumably broilers, ducks or turkeys the “medium” category will be between 37,500 and 125,000 with farms holding more birds regarded as “large”.

A resolution passed by the Petaluma City Council on a 7 to 0 vote urged all Sonoma County voters to vote NO on Measure J in November.

A research team led by Dr. Jonah Sacha at the Oregon Health and Science University has developed what may become a universal vaccine against influenza.  This is especially important given the need for a broad-spectrum product to protect populations against the emergence of a pandemic strain of influenza.

The vaccine uses a herpes cytomegalovirus (CMV) that is ubiquitous and generally asymptomatic as a vector.  The CMV-vectored virus incorporating influenza antigens selected from the 1918 pandemic strain induces a T-cell response. In trials conducted at the Oregon Health and Science University, 6 of 11 cynomolgus macaques survived exposure to the 1918 virus, an unimpressive level of protection, compared to six of the unvaccinated controls that died following infection.

The research team considers that the CMV-vectored virus could become commercially available within five years by which time, mRNA vaccines will have undergone further refinement and approval and will be widely deployed.

The U.S. Centers for Disease Control and Prevention (CDC) has recorded 28 cases of listeriosis among 12 states with all patients hospitalized and with two fatalities.

According to a release on July 26th the source was identified as  the Boar's Head  plant in Jarrett, VA. with liverwurst as the vehicle of infection.  The Company is recalling 103 tons of product including other cold cuts prepared on a common line. It is possible that contamination within the plant is more extensive than the liverwurst equipment and that thorough disinfection will be required, guided by an intensive program of assays.

Since the incubation period of listeriosis may extend to 70 days, and that many cases are mild or not confirmed, the actual incidence rate is probably higher than initially indicated from hospitalizations.

Samples collected from late May through early July showed genetic similarity among patients’ isolates implying a common source. Initially in the absence of a known product or brand responsible for infection the CDC  recommended that those most susceptible to listeriosis including the elderly, pregnant women and the  immunosuppressed to refrain from consuming deli-sliced cold meats.

A contaminated product could result in dissemination of Listeria to other cold cuts or cheeses unless deli slicers are thoroughly decontaminated at regular intervals.  A major outbreak occurred in Canada during 2008, attributed to failure to strip and clean slicers in a major food plant processing and packaging RTE ham and turkey products.

The Government of Canada has announced that Costco and Walmart have agreed to the National Grocery Code of Conduct.  The objective of the Code is to establish transparency and equity in the grocery supply chain extending from farmers and manufacturers to consumers.

The Grocery Code of Conduct was developed in response to conflicts between producers and major retailers with the size of their collective presence representing an oligopoly.  Major issues of concern were the fees imposed by retailers to shelve products together with coercion over pricing.  The Code of Conduct imposes fair and ethical dealing and dispute resolution.

According to Dr. Mike Von Massow at the University of Guelph, “Setting guidelines for how retailers and suppliers interact should help protect farmers and also small chains that lack buying power.”  He added “It’s going to be a more level playing field, but my guess is it’s not going to be a perfectly level playing field.”  Michael Graydon, CEO of Food and Consumer Products of Canada, noted that the Code “Will mean a new era of friendlier relations between grocers and suppliers”.

Loblaw Companies a major grocery chain, initially declined to subscribe to the Code of Conduct but following consumer complaints, assented claiming “Support of the Code is part of Loblaw’s continued commitment to promote a fair and transparent grocery industry in Canada.”  The company maintained that the Code would increase food costs.  The Canadian Code follows a similar initiative that has proven successful in the U.K. Experience in that Nation suggests that their Code of Conduct has resulted in a reduction in retail prices.

In a release dated July 23^rd Cal-Maine Foods Inc. (CALM) announced results for the 4^th Quarter and FY 2024 ending June 1^st 2024. This report summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

It is noted that market conditions during Q4 2024 were favorable with an average unit revenue for Cal-Maine of $2.13 per dozen for all eggs, compared with Q4 2023 with a corresponding price of $2.20 per dozen. 

Cal-Maine represents a bellwether for the shell egg sector as the only public-quoted, pure-play egg company in the industry, supplying close to 20 percent of domestic shell egg consumption. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $9.8 million ‘other income,’ Q4 2024 compared to $9.7 million in Q4 FY2023:

$11.3 million patronage dividends, Q3 2024 compared to $10.2 million Q3 FY2023

$32.5 million interest income, FY2024 compared to $18.5 million FY2023

$0.3 million loss on non-controlling interest Q4 2024 compared to $0.4 million Q4 FY202.

Fassio Farms acquisition in Q2 2024: comprised 1.2 million hens, housing, packing plant and feed mill etc. for $53.7 million representing $44.80/hen

For FY 2024 Cal-Maine Foods earned $277.9 million on sales of $2,326 million with a diluted EPS of $5.69 Average Selling price for shell eggs was $1.93 per dozen.

For FY 2023 Cal-Maine Foods earned $758.0 million on sales of $3,147 million with a diluted EPS of $15.52 Average Selling price for shell eggs was $2.62 per dozen

Trailing P/E 11.3

52-Week Range in Share Price: $42.25 to $68.37 50-day Moving average $60.56

Market Close, Tuesday July 23^rd $64.83 pre-release.

Post release, after-hours, 20H00 up 1.8 percent to $66.00.

In reviewing the CALM Q4 2024 report and the SEC 10-Q submission the following values represent key data for the most recent Quarter or FY 2024. (Q4 for FY 2023 and percentage differences in parentheses):-

• Shell egg sales attained $640,789 million in Q4 2024 based on shell eggs comprising 96.1 percent of total revenue. ($661,821 million, in Q4 2023, based on 96.4 percent of revenue). (Sales value for shell eggs was down 3.2% reflecting lower average unit value).

• Dozen shell eggs sold (thousands): 285,555 (296,554; -3.7%)
• Average selling price of all shell eggs: $2.13 per dozen; ($2.20 per dozen; -3.2%).
• Average selling price of specialty eggs (excluding co-pack): $2.25 cents per dozen; ($2.50 per dozen; -10.0%).
• Average selling price of generic eggs: $2.06 cents per dozen; ($2.04 cents per dozen; +1.0%).
• Differential between specialty eggs and generic eggs: +$0.19 cents per dozen; (+$0.46 per dozen; -58.7%)
• Specialty eggs as a proportion of volume sold: 36.5%; (34.6%; +6.3%)
• Specialty eggs as a proportion of sales value: 38.5%; (39.1%; -1.5%)
• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q4 FY 2024 : 88.8% (92.3%; -3.8%).
• Farm feed cost: 50.4 cents per dozen, (67.1 cents per dozen, -24.9%) Includes specialty and breeder diets. Differential represents $107 million over Q4 volume.
• Egg product sales in FY 2024 attained $89 million or 3.8% of sales value at a unit price of $1.19 per lb. For FY 2023, sales attained $122 million with a unit price of $1.74 per lb.
• Cal-Maine Foods maintained a flock of 39.9 million hens on average Capacity 48 million) during FY 2024 with 11.8 million pullets (capacity 12.7 million) plus parent breeders representing less than two percent of the total flock. 

The following observations relate to the comparison of Q4 2024 with the corresponding Q4 FY2023:-

• Cal-Maine Foods was not affected by the 2022-2023 HPAI epornitic during FY 2022 or FY 2023. During Late December 2023 (Q3 FY 2024) the Chase, KS. Complex comprising 1.5 million hens and 240,000 pullets, representing 3.3% of the total flock was depopulated as a result of HPAI. On April 1^st 2024 (Q4 2024) the Farwell, TX complex was confirmed positive requiring depopulation of 1.6 million hens and 0.34 million pullets.
• Q4 of FY 2024 represented a less favorable marketing comparison to Q4 FY 2023 based on lower prices for shell eggs, as U.S. flocks were re-populated, coupled with restoration of normal consumer demand. Average shell egg price obtained by Cal-Maine was 3.2 percent lower than in Q4 FY 2023.
• Comparing FY 2024 with FY 2023 gross profit was impacted negatively by lower unit revenue for generic eggs although with some benefit from specialty eggs. The 24.9 percent lower feed cost to 50.4 cents per dozen was partly offset by 7.5 percent higher farm production costs attaining 43.0 cents per dozen,
• In a market characterized by low unit prices for generics, the relative contribution of specialty eggs is more important to net earnings in contrast to an up-market for conventional eggs. Normality was restored in FY 2024 with generic eggs at a lower unit price and margin compared to specialty eggs.

In commenting on Q4 and FY 2024 results Sherman Miller, president and CEO stated, “We are pleased to report a solid performance for the fourth quarter amidst a challenging period for Cal-Maine Foods and our industry. We are extremely proud of our managers and employees who continued to manage our operations in a dynamic environment affected by recent outbreaks of highly pathogenic avian influenza (“HPAI”). Despite the interruptions, we continued to meet the demands of our valued customers.

“Throughout the year, we continued to execute our growth strategy and deliver a favorable product mix in line with customer demand. Our operations ran well as we remained focused on our objective of operational excellence.

In reference to acquisitions Miller stated “We also completed two asset acquisitions in fiscal 2024 and completed one subsequent to the end of the fiscal year, each of which complements our organic growth initiatives. We are excited about the additions of the assets of Fassio Egg Farms, Inc., located in Erda, Utah, and the former broiler processing plant, hatchery and feed mill in Dexter, Missouri, previously operated by Tyson Foods. We have commenced work on the acquired Dexter facilities to repurpose the assets for use in shell egg production and processing. We are partnering with local farmers, working with local contractors and businesses and making significant investments in the Dexter area to renovate and improve the facilities, with future plans for expanded shell egg and value-added egg product opportunities. Following the end of the fiscal year, we acquired substantially all the assets of ISE America, Inc. and certain of its affiliates (“ISE”). We expect that the acquisition of these assets from ISE will enable us to significantly enhance our market reach in the Northeast and Mid-Atlantic states.”

The 10-Q Report documented approved capital investment of $233 million for cage-free conversions, $16 million additional items for FY 2024 through FY 2027 with a $10.9 million provision for improvements to the Dexter, MO. broiler complex acquired from Tyson Foods. Of this total $194 million has been committed with $56 million to be expended.

In early July, the USA Export Development Council (USAEDC) arranged an attaché conference in Washington DC.  Greg Tyler, president and CEO of USAPEEC, serves as the Chairperson of USAEDC.  His knowledge, together with the experience of members of the Council provided information and input to the USDA-Foreign Agricultural Services attachés representing importing nations in Asia, South America and Europe.

Topics considered at the Conference included demography, marketing updates and culinary perspectives. The USAEDC Conference provided an opportunity for USAPEEC to strengthen international relationships, benefiting the U.S. poultry and egg exporters.

Given that seventy percent of agricultural workers in the U.S. were born in another country and that as many as forty percent are undocumented, a stringent Iowa immigration law will impact livestock production and other segments of agriculture.  The law, since blocked by a federal court, would have made it possible for authorities to detain illegal immigrants previously deported or denied admission to the U.S. irrespective of current legal status.

Notwithstanding, the hold on the proposed July 1^st date of enforcement, many immigrants concerned over their freedom have elected to move from the state.  This trend was evident in Florida after restrictive legislation was introduced.  It is a reality that farmers need labor and despite the extensive population of U.S. citizens drawing federal and state aid, there are insufficient hands to produce food, especially in fields, orchards, livestock farms and labor-intensive packing plants.

Congress has failed to enact a major revision of current immigration legislation attributed to political posturing that inhibits bipartisan action.

Canada is faced with a similar problem of filling agricultural jobs but has elected to issue visas and in most instances to offer a path to permanent residence or citizenship for productive foreign agricultural workers.  We could gain from their experience and benefit from a more practical and humanitarian approach to immigration. 

Our population is aging and without immigration will eventually shrink following the pattern in Japan and Europe.  In decades to come, there will be insufficient workers contributing to social security to sustain payments to those reliant on federal and state support.

The British Egg Industry Council developed the Lion Quality seal that can be imprinted on eggs subject to compliance with a Code of Practice that ensures food safety.  The latest Version 3 incorporates standard operating procedures extending from lay to delivery.

Gary Ford, CEO of the British Egg Industry Council, noted, “For more than 25 years the Code of Practice for the production of Lion Quality egg products has provided peace of mind, ensuring retailers, food manufacturers, food service operators, wholesalers and other organizations that British egg products can be served without risk and with traceability not available in imported egg products.”

Sterling Crew, President of the Institute of Food Science and Technology, welcomed the issue of Version 3 of the Code of Practice stating, “There’s an assumption that once an egg has been pasteurized it is automatically safe but there’s a lot more to it, especially when some egg products including egg white are heat treated.  The Code gives assurance not only to egg safety but also on quality, authenticity, provenance and welfare.”

The British Egg Industry Council is obviously appealing to the sentiments of food service and grocery segments of the UK market, positioning domestic eggs above lower-priced imports including from Poland, where problems of Salmonella contamination have resulted in foodborne disease outbreaks in the E.U and the U.K.

On Tuesday, July 16^th, Walmart opened a distribution center in Lancaster, TX to handle fresh produce, eggs, dairy and frozen goods for delivery to 590 locations in Texas and others beyond the state.  The 730,000 square foot DC dedicated to perishables complements an existing fulfillment center opened in 2023.

The design of the facility and its equipment expedites assembly of pallets for stores optimizing trailer capacity and quick turnaround at delivery.  The Lancaster, TX facility is the second of five distribution centers dedicated to perishables opened by Walmart.  Additional locations will be placed in Welford, SC, Belvedere, IL., and Piles Grove, NJ.  Four additional distribution centers handling perishables will be expanded in Minnesota, North Carolina, Indiana and Tennessee.

Over the past decade, Walmart has invested in advanced technology, both as mechanical and digital innovations to reduce the cost of distribution and to expedite deliveries. The question arises as to whether Walmart has achieved the same level of efficiency at a capital cost that may be lower than the Ocado concept followed by the Kroger Company

According to a ProMED posting, authorities in Taiwan reported an outbreak of H5N1 avian influenza.  The index flock comprising 53,000 birds demonstrated clinical signs on June 29^th with confirmation on July 4^th.  Since a second farm under common ownership was in all probability infected, 44,000 chickens were depopulated on the neighboring location on July 6^th.  The National Reference Laboratory confirmed the infection as an H5N1 strain of clade 2.3.4.4b.  Following decontamination, a two-mile zone was designated for surveillance.

According to Adobe Analytics, the recent Amazon Prime Day generated sales approaching $14 billion, up from the corresponding event in 2023. The “Prime Day” that extended over 48 hours involved an average household expenditure of $152, lower than the $180 in 2023.

The record revenue was achieved by attracting “millions of new shoppers”. Amazon attributes increased sales to an AI Chatbot that assisted customers with inquiries.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on July 22^nd documented two thirds of the soybean crop blooming and sixty percent of the corn crop silking, both in advance of the 5-year average for the corresponding week.

Despite high temperatures across the Midwest and Plains states crop condition was unchanged during the past week. Corn and soybeans attained 67 and 68 percent respectively for the two highest categories of “Good” and “Excellent” No mention was made of the effect of the Monday July 15^th derecho. The July 22^nd values for corn and soybean quality were considerably higher than the 57 percent and 54 percent respectively for the two highest categories for the corresponding week in 2023. Prospects for high yields were reflected in lower price projections in the July WASDE and for CME quotations for August delivery.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week surface and subsoil moisture values were 73 and 72 percent respectively for the two highest categories of ‘Adequate’ and ‘Surplus’ representing an acceptable situation for growth in 2024. These levels were higher than the previous week despite hot conditions. Corresponding values of 57 and 52 percent were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023.

It is too early in the expected transition to a La Nina event to predict any impact on crop condition in coming months. If prolonged dry and hot weather is encountered in corn and soy areas, yield will be depressed depending on timing and severity.  A long-range forecast in the form of two charts is provided predicting rainfall and temperature during the growing season.

Heat stress during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late growing period.

Reference is made to the July 12^th WASDE Report #650 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. The August WASDE will be reviewed in the August 23^rd edition.

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.

WEEK ENDING   Corn Status (18 states) * July 14th  2024        July 21st  2024 5-Year Average  Corn Emerged (%) 100 100 100 Corn Silking (%) 41 61 56 Corn Dough (%) 8 17 11 Soybean Status (18 states)       Soybean Emerged (%) 100 100 100 Soybeans Blooming (%) 51 65 60 Soybeans Setting Pods (%) 18 29 24 *Representing 92% of 2024 acreage planted	Soybeans Blooming
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 3 7 23 51 16 Corn  2023 (%) 4 9 30 46 11             Soybeans  2024 (%) 2 6 24 56 12 Soybeans  2023 (%) 4 10 32 46 8	Corn Silking
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 8 21 62 11 Past Year 14 29 52 5 Subsoil Moisture:         Past Week 7 21 64 8 Past Year 14 31 52 3

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

Dollar General, the subject of numerous citations has signed a Consent Agreement with the Department of Labor, Occupational Safety and Health Administration (OSHA) committing to future worker safety. The Company paid a penalty of $12 million as part of the settlement.

Dollar General is now obliged to hire safety managers, establish a companywide safety and health management system and remove hazards in stores.  Among the improvements will be a reduction in obstructions including blocked exits and access to electric panels and fire extinguishers.  The Consent Agreement makes provision for extensive fines for failure to comply with safety hazards affecting both workers and customers.

Douglas Parker, Assistant Secretary for Occupational Safety and Health, stated, “These changes help give peace of mind to thousands of workers knowing that they are not risking their safety in the workplace and that they will come home healthy at the end of each day.”  The consent agreement covers at least 20,000 stores in the U.S.

Second Complex in Weld County CO. infected with HPAI During July

An integrated egg-production complex in Weld County, CO. was infected with HPAI over the past weekend.

This is the second time that the recently acquired complex of 1.4 million hens has been infected. The operation had superlative structural and operational biosecurity at the time of the previous infection occurring at the end of September 2022.

The event follows a diagnosis in another 1.6 million complex in Weld County at the beginning of July. This outbreak was the third to have occurred on the complex and depopulation and burial has just been completed.

Epidemiologic investigations are in progress to ascertain the source of infection. It should be possible to determine whether the infection was derived from wild birds or dairy herds. Bovine influenza-H5N1 is prevalent in Weld County and the State with over 40 herds diagnosed to date.

A recent article in Supermarket News reports on a survey of consumers taking GLP-1 inhibitor drugs for weight loss. Wynshop report that almost all consumers in this category reduced grocery spending by an average of 11 percent.  Purchases of snacks, baked goods and sugar-containing drinks were curtailed but substituted with lean proteins and meal replacements presumably benefiting chicken and eggs.

Notwithstanding the trend to reduced calorie-dense foods among obese consumers prescribed GLP-1 medication, grocery sales were 3.8 percent higher during the first half of 2024 compared to the corresponding period in 2023, attaining $459 billion.  According to Supermarket News, online sales were up 2.4 percent for the first half representing 13 percent of grocery sales.

The probable impact of GLP-1 medication on the volume and value of grocery sales has been overstated given the number of consumers receiving this drug class based on high cost and intolerance.

Updated July 2024 USDA Projection for U.S. Egg Production and Consumption.

On July 18^th 2024 the USDA Economic Research Service (ERS) issued actual values for egg production during 2023 with a projection for 2024 and a forecast for 2025. Production, consumption and prices were only slightly revised from the previous June 16^th 2024 report.

Projected egg production for 2024 was lowered from the June 2024 Report to 7,797 million dozen This will be 0.9 percent less than in 2023 due to progressive depletion of hen flocks due to HPAI The per capita consumption of shell eggs and liquids combined for 2024 will be 275.1 eggs down 4.2 eggs of an egg from 2023. The projected average 2024 benchmark New York bulk unit price was raised to 236.4 cents per dozen.

Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is undergoing deflation. The 2023 Midwest in-carton national wholesale price peaked at $5.17 per dozen on January 3^rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8^th 2023. National average wholesale price was restored during May 2024 and settled at $2.36 per dozen for eggs in cartons delivered to DCs on July 12^th 2024. This is approximately 50 cents per dozen higher than the three-year average prevailing for the corresponding week in early summer. The national wholesale Large value should be compared to the USDA/EIC projection of the combined nest-run June 2024 cost of 78 cents per dozen for caged white Large, plus a provision for processing, packaging and transport of 60 cents per dozen amounting to $1.38 cents per dozen.

Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but placements were limited by the availability of pullet chicks and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4^th quarter of 2023 representing 4.0 percent of the nominal producing flock of 325 million hens, mainly on complexes averaging over one million hens. Unpredictable factors affecting price will include the extent of losses during the remainder of 2024 due to a continuing avian influenza epornitic. Approximately 17 million hens have been lost to HPAI year to date in four states. Exports of eggs and products at approximately 2.4 percent of total production over the first five months of 2024 will not materially affect the domestic price.

The USDA forecast for 2025 includes production of 8,150 million dozen, up an optimistic 4.5 percent from 2023. Projected consumption of 286.6 per capita, would be a speculative 11.5 egg (4.2 percent) increase over 2024 This forecast probably presumes complete control of HPAI and an adequate supply of replacement chicks and pullets both unrealistic assumptions. The increase, if it were to transpire would depress the NY Large benchmark price to $1.60 per dozen.

During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022. For the first five months of 2024 shell egg exports were down 12.5 percent in volume to 33.7 million dozen and down 26.6 percent in value to $65.8 million compared to the corresponding months in 2023. Unit value was down 16.4 percent to $1.95 per dozen.

Updated July 2024 USDA data is shown in the table below:-

*Data influenced by HPAI losses. Recovery in 2025 considered unrealistic

Source: Livestock, Dairy and Poultry Outlook released July 18^th 2024

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

The American Egg Board has released an update entitled Assessment Remittance and Collection Guidance document.  Effective September 1^st, producers will conform to a simplified assessment and payment process. The new system was generated by AEB staff following motivation from  the Board.

Emily Metz, president and CEO of the AEB stated, “as we continue to prioritize physical responsibility and the egg industry continues to evolve, our Board of Directors prioritized the effort to publish our Assessment Remittance and Collection Guidance to ensure AEB is fully funded to continue the important work that fulfills the original vision for this organization established in 1976”.

The Guidance Document can be accessed on <incredibleegg.org/assessmentguidance>

Dr. Ngozi Okonjo-Iweala, the  Director General of the World Trade Organization (WTO) recently highlighted the measures to restrict trade introduced by members of the Organization.  Writing in the WTO Trade Monitoring Update, Dr. Okonjo-Iweala is confident of the resilience of world trade despite protectionist pressures, economic fragmentation and geopolitical uncertainty.  More than 99 trade restricting measures have been introduced over the past year although this was more than balanced by 69 trade-facilitating concessions introduced by member nations.  World trade is impeded by policy, subsidies and import restrictions including anti-dumping duties and contrived phyto-sanitary restrictions to protect local agriculture and livestock production.

China, a relatively recent member of the WTO applies regulations and policies of the Organization to their specific benefit.  China is currently retaliating against the European Union for initiating an investigation into importation of electric vehicles that the E.U. claims are subsidized.  As a counter measure China has initiated an anti-dumping probe directed at E.U. pork together with unjustified restrictions based on African swine fever that is endemic in China.  This nation has also targeted specific E.U. products including brandy by imposing punitive tariffs.

The WTO contrives to maintain a level playing field for importers and exporters to the benefit of economies in both industrialized and developing nations. China has a history of disturbing the equilibrium in trade through self-serving measures intended to benefit state-supported industries.

Judge David Crutchfield of Delaware County, Oklahoma issued a judgment in favor of the Spring Creek Coalition relating to potential pollution of ground water by poultry farms.  The order directed the Oklahoma Department of Agriculture, Food and Forestry to assign “meaningful consideration to local communities in the process of issuing permits for large poultry farms.”

In terms of the order, the Oklahoma Department of Agriculture must deny new approval for farms holding more than 125,000 birds until specific requirements relating to potential pollution are resolved. These include notices to local property owners and public hearings.  It is anticipated that the ruling by Judge Crutchfield will be appealed since it effectively imposes restrictions on the Oklahoma Department of Agriculture possibly in conflict with the Poultry Feeding Operations Act.

In many respects litigation in Oklahoma mirrors the opposition to the high density of hog farms in eastern North Carolina allegedly responsible for deterioration in the quality of ground water and environmental pollution.

With low prices for corn and soybeans and reduced exports to China, U.S. farmers have concerns over future earnings. This is illustrated by the sharp drop in the purchase of tractors and combines generally regarded as a barometer of confidence in the future.  Year to date, tractor sales are down by 11.7 percent and combines by 17.3 percent.  The situation in June showed a sharper deterioration with tractor sales down 16.1 percent to 22,870 units and self-propelled combines down 31.0 percent to 463 units. John Deere has laid off 1,000 workers and will announce a further reduction in the complement of ‘white collar’ employees in August.

Agricultural exports to China will most certainly be a victim of any punitive tariff policy imposed by a future administration. Intended action if not political rhetoric will further complicate trade to the detriment of agriculture and consumer spending.

The impasse in both the House and Senate Agriculture Committees is delaying the passage of the 2023 Farm Bill. The extension adopted last year will expire in September with deadlock over issues including SNAP payments and eligibility and support payments. Both the Chairs of the respective House and Senate Committees are suggesting that the Farm Bill be passed to the 119^th Congress in 2025.

In a July 11^th 2024 release, Conagra Brands (CAG) posted financial results for Fiscal 2024 ending May 26^th 2024. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Campbell Soup Company and Kraft-Heinz, all currently under pressure to reduce prices to the major food service providers and supermarket chains. Despite moderate inflation consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Conagra marketing frozen dinners.

For FY 2024, net income was $347 million on net sales of $12,052 million with a diluted EPS of $0.72.  Comparable figures for FY 2023 were net income of $684 million on net revenue of $12,277 million with a diluted EPS of $1.42

The release included results for the four operating segments:-

• Foodservice: Operating profit of $157 million up 84 percent from FY 2023, on revenue of $1,148 million
• Refrigerated and Frozen: Operating loss of $93 million, down 136 percent, on revenue of $4,866 million
• International: Operating profit of $98 million, down 19 percent on revenue of $1,078 million
• Groceries and Snacks: Operating profit of $1,012 million, up 1.0 percent on revenue of $4,958 million

For FY 2024 (with the values for corresponding FY 2023 in parentheses) Conagra achieved a gross margin of 27.6 percent (26.6) and an operating margin of 7.1 percent (8.8). Revenue was down 1.8 percent.

In commenting on FY 2024 results Sean Connolly, president and CEO stated, "Our investments in our brands continued to yield results, and again drove volume improvement in our Domestic Retail business. Progress was most notable in our key Frozen and Snacks domains, where we also saw market share gains. Additionally, our supply chain productivity initiatives enabled us to expand adjusted gross margins, and we continued to strengthen the balance sheet and reduce our net leverage ratio. Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024, as consumers adapt and establish new reference prices. We will continue to invest wisely to support our brands”

Guidance for FY 2025 included net sales flat to a decline of 1.5 percent; an adjusted increase in operating margin of 15.0 to 15.8 percent and an EPS of $2.67

Conagra Brands listed assets of $20,862 million, including a disproportionate  $13,290 million as goodwill and intangibles, against long-term debt and other obligations of $9,107 million. The Company had an intraday market capitalization of $13,760 million on July 15^th. CAG trades with a forward P/E of 10.4 and has ranged over a 52-week period from $25.16 to $33.56 with a 50-day moving average of $29.56. Twelve-month trailing operating and profit margins were 17.9 percent and 2.9 percent respectively. The Company generated a twelve-month trailing return of 5.7 percent on assets and 4.0 percent on equity.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on July 15^th documented completed emergence for corn and soybeans for the 2024 season. Half of the soybean crop is blooming and forty percent of the corn crop is silking, both in advance of the corresponding week in 2023.

Despite high temperatures across the Midwest and Plains states crop condition was unchanged during the past week. Both corn and soybeans attained 68 percent for the two highest categories of “Good” and “Excellent” The July 15^th values for corn and soybean quality were considerably higher than the 57 percent and 54 percent respectively for the two highest categories in 2023. Prospects for high yields were reflected in lower price projections in the July WASDE and for CME quotations for August delivery.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week surface and subsoil moisture values were 82 and 72 percent respectively for the two highest categories of ‘Adequate’ and ‘Surplus’ representing an acceptable situation for growth in 2024. These levels were higher than the previous week despite hot conditions. Corresponding values of 62 and 57 percent were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023.

It is too early in the expected transition to a La Nina event to predict any impact on crop condition in coming months. If prolonged dry and hot weather is encountered in corn and soy areas, yield will be depressed depending on timing and severity.  A long-range forecast in the form of two charts is provided predicting rainfall and temperature during the growing season.

Heat stress during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late growing period.

Reference is made to the July 12^th WASDE Report #650 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. The August WASDE will be reviewed in the August 23^rd edition.

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.

WEEK ENDING   Corn Status (18 states) * June 30th  2024        July 7th  2024 5-Year Average  Corn Emerged (%) 100 100 100 Corn Silking (%) 24 41 32 Corn Dough (%) 3 8 4 Soybean Status (18 states)       Soybean Emerged (%) 100 100 100 Soybeans Blooming (%) 34 51 44 Soybeans Setting Pods (%) 9 18 12 *Representing 92% of 2024 acreage planted	Soybeans Blooming
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 3 6 23 52 16 Corn  2023 (%) 4 9 30 46 11             Soybeans  2024 (%) 2 6 24 55 13 Soybeans  2023 (%) 4 9 32 47 8	Corn Silking
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 8 20 61 11 Past Year 12 26 56 6 Subsoil Moisture:         Past Week 7 21 62 10 Past Year 13 30 53 4

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

With the transition to a neutral phase from an El Nino to a La Nina event, the World Meteorological Organization highlights the possible effects on world weather during the fourth quarter.  Based on accumulated meteorologic records, a La Nina event, depending on strength, intensifies hurricanes in the Caribbean.  In addition, droughts can be expected in Central and South America as occurred during the La Nina of 2022-2023, reducing crop yields and impacting water levels in the Panama Canal.

During May, an error in the Eurofins Scientific Finland Oy laboratory led to a false positive diagnosis of Salmonella Oranienburg.  According to press reports, an investigation showed that the farm submission was contaminated by a reference sample. This was confirmed by applying whole genome sequencing.

It is questioned why a flock of 4,000 egg-producing hens was depopulated without a confirmatory test.  Since S. Oranienburg is not a vertically-transmitted pathogen, it is inexplicable why the flock was depopulated unless at the end of its production cycle.  News reports also noted the diversion of 100,000 eggs to pasteurization.  If these eggs were derived from the subject flock of 4,000 hens, the quantity represented the production over a complete month, inconsistent with an apparent rapid decision to depopulate without re-testing.

According to a July 11^th press release, the USDA will provide $4.5 million in funding to support three additional USDA ‘Nutrition Hubs’.  This follows the initiation of a pilot program in partnership with Southern University and A&M College in Baton Rouge, LA. Funding will be provided through the National Institute of Food and Agriculture, Food Research Initiative. 

The program is designed to provide science-based nutrition information for under-represented and underserved (minority) communities. In addition to public education, the program will support research and training opportunities.

Dr. Chavonda Jacobs-Young, Chief Scientist and Under Secretary for Research, Education and Economics, stated, “Equitable access to healthy, safe and affordable foods that promote optimal health and well-being can have a significant impact in reducing rates of diet-related chronic diseases including many cancers.”  Dr. Jacobs-Young added, “When people have tailored tools, resources and knowledge, they are empowered to take a more active role in managing their nutrition and health.”

As with many initiatives established by the current Administration, there are no assurances that the funds allocated will have any measurable benefit. Distributing taxpayer money is relatively easy. Quantifying results in the form of improved health through changes in dietary habits among populations is more challenging.

In advance of an August 26^th hearing in the U.S. District Court for the district of Oregon, and an impending Federal Trade Commission hearing in October, the Kroger Company has released a list of facilities to be divested to obtain approval for the proposed merger with Albertsons Corporation.  It is intended to divest 579 Kroger and Albertsons stores across 18 states and Washington, D.C. 

Stores will include 124 in Washington, 91 in Colorado, 101 in Arizona and 63 in California.  In addition, the combination of the two chains will divest six distribution centers in western states to C&S Wholesale Grocers.  This company will license the Albertsons banner in California and Wyoming and the Safeway banner in Arizona and Colorado.  Kroger will be used for Albertsons and Safeway stores retained in the merger.  C&S will acquire the Haggen banner among others. C&S will pay Kroger and Albertsons $2.9 billion for the stores and other assets.

The merger is opposed by the Federal Trade Commission and the Attorneys General of eight Western states.  The United Food and Commercial Workers Union opposes the merger with five Locals contending that the intended divestment does not soften union opposition to the transaction.  In a joint statement the Locals noted, “We remain focused on stopping the proposed mega-merger for the same reason we have stated since it was first announced twenty months ago.”

To counter arguments that C&S Wholesale Grocers would be unable to manage 579 stores, Albertsons will detach Chief Operating Officer, Susan Morris, to serve as the President and CEO of the retail activities divested by Kroger and Albertsons.  Ms. Morris has served as Executive Vice President of Albertsons Corp. since January 2018 and is a 38-year veteran of retail grocery.  A graduate of Colorado State University, Ms. Morris is a recognized leader in the industry having risen from a customer service clerk to her current executive position.

According to news reports and an article in Food Safety News authored by Coral Beach, Raw Farm, LLC is responsible for 165 confirmed cases of salmonellosis involving 20 hospitalizations.  Forty percent of the affected consumers of raw milk were younger than five years in age.  Most of the cases occurred during the fall of 2023.  Investigations by the California Department of Health resulted in a recall of milk and dairy products on October 24^th and a temporary cessation of operations with a resumption of sales on October 31^st.  Laboratory investigations applying whole genome sequencing confirmed that raw milk produced by the implicated dairy was responsible for the outbreak.

According to the owner of Raw Farm, Mark McAfee, the problem was attributed to “a single cow infected with Salmonella and later removed from the herd”.  This is essentially a fatuous self-exculpatory comment. The statement is however an acknowledgement of responsibility for the diagnosed cases of salmonellosis and in a few additional instances, either campylobacteriosis or STEC colibacillosis.

EGG-NEWS has consistently condemned consumption of raw milk that offers no quantifiable or scientifically valid advantages over pasteurized product.  Commercial pasteurization subject to industry standards effectively destroys Salmonella, E. coli, Listeria and Campylobacter.  Recent studies have confirmed that industrial pasteurization effectively destroys the bovine influenza-H5N1 virus that is passed into milk. 

To date, 150 herds have been diagnosed with bovine influenza-H5N1 although surveillance is limited and the infection may be present in herds in more than the list of twelve impacted states that currently does not include California and Wisconsin, the two largest producers of milk.

Robert Marler, a prominent plaintiffs’ attorney with extensive experience in food safety, noted, “Over the last 30-plus years of practice, I have been a vocal advocate for robust public health involvement in foodborne illness prevention.”  He added, “It is beyond me to comprehend why public health would remain mute in the face of at least 165 sick, 20 hospitalized patients with 40 percent in the five-year or younger age group.”

During the past decade, the food freedom argument has persuaded state legislatures to pass laws allowing the sale of raw milk to consumers.  Interstate commerce in raw milk is, however, precluded by federal legislation.

Adults provided with reliable and scientifically valid information on the risks associated with raw milk may decide to consume the product.  Providing raw milk to children is, however, a form of abuse.

According to a recent release by the Private Label Manufacturers Association, sponsored market research firm Circana documented higher growth for private label products compared to national brands.  For the first half of 2023, unit sales for store brands were up 2.5 percent compared to the corresponding months in 2023.  This compares to a claimed decline in national brands of 0.8 percent over the same period.

For the first half of 2024, private brand sales attained $121 billion across all channels up 2.3 percent from the first half of 2023.  This figure includes food and personal products.

Among edibles, general food items were up 6.9 percent, beverages, 4.3 percent, frozen food 2.9 percent and refrigerated foods 0.7 percent.  In the non-food category, beauty care was up 10 percent, hair-care 5.8 percent and general merchandise 2.2 percent.

Circana determined that 80 percent of consumers surveyed will purchase a private label product based on price in preference to national brands.  Consumers now regard private label products as being equivalent to national brands in presentation and quality.

The importance of private label products will become more pronounced with consolidations in the grocery industry as evidenced by the high proportion sold by deep discounters including Aldi and adoption of private label by major chains including Walmart, Kroger, Target, and the Whole Foods subsidiary of Amazon.

This has implication for eggs and specifically a national brand that maintains market growth through a combination of superior nutrient quality supported by extensive mainstream and social media promotion.

PepsiCo Inc. has received an FDA warning letter relating to their subsidiary, Quaker Oats. At issue are problems in their Danville, IL. plant that manufactured snacks including cereal bars. Deficiencies raised by FDA following trace-back investigations included failure to eradicate Salmonella Cubana from the environment and equipment in the plant extending back to 2020.

The FDA faulted management of the plant for “lack of effective decontamination to eliminate a resident strain of Salmonella”.  The internal surfaces of the plant allowed pooling of water and the presence of niches leading to extensive environmental contamination in violation of FDA standards.  On successive inspections FDA consistently demonstrated violations of the Current Good Manufacturing Practice, HACCP controls in accordance with the Human Food Rule.

Based on the series of FDA plant investigations followed by laboratory assay of samples collected, it was concluded that granola bars and RTE cereals were “adulterated” since they were prepared, packed and held under unsanitary conditions so as to become potentially injurious to health.

The FDA concluded that corrective action following the issuance of form FDA 483 did not result in appropriate action to reduce the likelihood of a continuation of contamination of products from the plant.

It is evident from the FDA warning letter that the decision to close the plant was justified based on the extensive and prolonged period of contamination resulting in salmonellosis among consumers of a range of granola bars produced in the facility. The question in this case and in many others is why the FDA prolongs investigations and delays definitive action contrary to their mission to protect the health of consumers.

USDA-WASDE REPORT #650, July 12^th 2024

OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the July 12^thWorld Agriculture Supply and Demand Estimates (WASDE) #650, reflecting the anticipated 2024 crop. Production values for corn and soybeans were changed minimally from the June edition since they were based on actual field data updating the March 28^thProspective Planting Report. Projections of crop size and ending stocks are based on acreage, yield, carry-forward levels from 2023, and with the latest assumptions of domestic use and exports.

The July 12^th WASDE report predicted that corn would be harvested from 83.4 million acres, up 1.6 percent from the June projection. The soybean crop will be harvested from 85.3 million acres, down 0.4 percent from the previous June report.

The July WASDE held the yield value for the 2024 corn crop at 181.0 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The July soybean yield was held at 52.0 bushels per acre compared to 49.9 bushels per acre in 2023.

The June 2024 USDA projection for the ending stocks of corn was unchanged at 2,102 million bushels. The June 2024 USDA projection for the ending stock of soybeans was raised 2.2 percent to 455 million bushels.

The July 2024 WASDE reduced the projection of corn price by 10 cents to 430 cents per bushel. The projected average season price for soybeans was lowered 10 cents to 1,110 cents per bushel. The price of soybean meal was retained at $330 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins given higher production costs. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.

Projections for world output included in the July 2024 WASDE report reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from ongoing hostilities in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.

The FoodTech subsidiary of Munters has acquired an 80 percent share in Automated Environments (AEI). This is a well-established provider of computerized farm control systems for the egg production industry, based in Renville, MN.

In commenting on the transaction, Pia Brantgarde Linder, Group Vice President of FoodTech, noted, “The acquisition is in line with our strategic priority to accelerate our digital journey by further strengthening our position within existing segments.  We now add a control system designed to improve efficiency, animal welfare and sustainability in the layer industry.”

Parent company Munters is a prominent manufacturer of ventilation systems for agriculture and industry and markets a wide range of fans, cool cells and air inlets. Additional information and a description of products can be accessed by clicking onto the Munters logo on the right side of the Welcome page.

Sprouts Farmers Market introduced their first small-format store in January 2022 and has concentrated on locations with limited area to expedite expansion at minimal cost.  Apparently, consumers appreciate the convenience of shopping in these units and are prepared to forgo the narrow range of SKUs in stores that are one third of the size of conventional 40,000 square foot supermarkets.

Whole Foods and parent Amazon have evaluated a range of formats since the 2017 acquisition. The Company recently announced the Whole Foods Market Daily Shop extending from 4,000 to 7,000 square foot that will appear in high-density suburban areas competing with Aldi and Trader Joe’s.

Meijer recognized for its superstores that compete with Walmart in the Midwest has adopted a small-format alternative with three stores currently in operation.

On July 10^th Costco Wholesale Corporation (COST) reported sales for June 2024 covering the four weeks ending July 7th.  For the period, sales attained $24,480 million, up 7.4 percent from the value of $22,780 million during the corresponding month in 2023.

Same store sales (excluding fuel and foreign exchange) increased 6.3 percent for the U.S.; 8.4 percent for Canada and 8.7 percent for international warehouses.  Overall, same-stores sales advanced by 6.9 percent and E-commerce was 19.1 percent higher.

Costco announced increases in annual membership fees effective September 1^st. Gold Star Individual and Business memberships will increase by $5 to $65 and Executive memberships by $10 to $130. The increase will be applied to 52 million members of whom slightly more than half belong to the higher category. Costco has held the cost of membership for seven years.

Costco closed on June 11^th after release of the data at $849.72. COST market capitalization was $392,050 million on July 11^th and the share has traded over a 52-week range of $530.56 to $896.67 with a 50-day moving average of $818.18.

Costco Wholesale Corporation operates 882 warehouses with 609 in the U.S.; 108 in Canada; 33 in Mexico and the remainder in nine other nations.

Closed Loop Partners, in collaboration with NextGen Consortium, has organized a citywide recycling program for Petaluma, CA.  The initiative will begin on August 5^th with 30 participating restaurants.  Sixty return points have been placed for reusable go-cups supplied by restaurants and QSRs including Starbucks, KFC, Dunkin’ and Peet’s Coffee.

NextGen Consortium is supported by major beverage manufacturers, restaurants and convenience stores.

Kate Daly representing the Center for the Circular Economy at Closed Loop Partners, noted, “By testing reuse across an entire city in partnership with key stakeholders from the community and industry, we can scale reuse collaboratively through thoughtful experimentation.”  The City of Petaluma was selected based on the proximity of restaurants to each other and municipal support.

Dr. Paul Ebner, Professor in the Department of Animal Science, has announced that Purdue University has developed a bacteriophage cocktail capable of suppressing avian pathogenic E. coli (APEC). Dr. Ebner claims that the bacteriophage product reduces the level of APEC in lungs and ceca of chickens when administered as an oral microencapsulated preparation.

The Purdue University Office of Technology Commercialization has applied for a patent for the product.  It is intended to position the bacteriophage cocktail against antibiotics to reduce the impact of APEC for ABF production.

Bacteriophage therapy has been used in Eastern Europe to treat bacterial infections.  It is generally accepted that bacteriophages must be compatible with target bacteria.  In the case of the Purdue cocktail, appropriate phages have apparently been selected and the microencapsulation ensures activity in the lower intestinal tract.  It remains to be seen whether the product is consistently beneficial under commercial conditions where flocks are simultaneously exposed to environmental stress, immunosuppressive viruses, primary respiratory pathogens and secondary bacterial infection including APEC.

Following the successful 2024 PEAK event that attracted over 3,100 participants, the Midwest Poultry Federation has announced the selection of five board members replacing retirees:

• Dr. Julie Kelly, Nebraska Poultry Industries Association

• Jordan Woodbury, South Dakota Poultry Industries Association

• Brent Nelson, Kansas Poultry Association

• Sheila Larson, Iowa Turkey Federation

• Justin Kremer, Ohio Poultry Association

The 2025 PEAK event will take place from April 8^th to 10^th, at the Minneapolis Convention Center

A recent publication in Nature* confirms the pathogenicity of H5N1 virus derived from lactating dairy cows in ferrets and mice.  Studies were conducted at the University of Wisconsin, Madison, Tokyo University and Texas A&M University Veterinary Medical Diagnostic Laboratory in conjunction with the National Institute of Allergy and Infectious Diseases.

It is evident that the avian-origin virus currently circulating in dairy cattle has undergone changes that allow it to infect mammals as evidenced by outbreaks in both marine and terrestrial animals from 2022 onwards.  Farmed mink, cats, skunks, racoons and free-living mice are susceptible to the virus. 

Under experimental, controlled conditions, the virus induced clinical signs in ferrets including elevated temperature, inappetence and loss in body weight.  The virus could be isolated from both the upper and lower respiratory tracts following infection.  Similar changes occurred in mice with viremia and a dose-dependent response ranging from mild signs to death

At present the bovine-adapted H5N1 virus does not appear to be transmitted by the aerogenous route on droplets from infected to susceptible ferrets.  In contrast, H1N1 influenza virus is contagious in both ferrets and mice.

Laboratory housing to investigate transmission of respiratory viruses among ferrets.

The authors concluded that the bovine-origin H5N1 influenza virus posses both human and avian receptor binding specificity but at this time is not contagious in ferrets, a standard research animal for influenza viruses.

It is possible that given both time and concentration of dairy cattle in large affected herds, strains of bovine H5N1 virus that appear to be transmitted by the droplet route among dairy cows may develop the capability to infect the respiratory tracts of humans representing a potential epidemic strain.  It is therefore essential to develop epidemiologic data and understand mechanisms of transmission in the U.S. dairy industry in order to develop recommendations to prevent spread and to protect workers.

*Eisfeld, A. et al Pathogenicity transmissibility of bovine H5N1 influenza virus in mice and ferrets. Nature. DOI: 10.1038/s41586-024-07766-6 (2024)

USDA Weekly Egg Price and Inventory Report, July 10^th 2024.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were down 3.8 percent on average this past week. Medium size was down 11.7 percent. The 5-day rolling National wholesale price for graded loose on July 5^th at $1.87 per dozen was approximately $0.42 per dozen above the 3-year average of $1.45 per dozen and up $1.02 from the corresponding week in 2023 at $0.85 per dozen. This past week shell egg inventory was up 1.5 percent, reversing the fall of 2.8 percent in stock during the previous week. Despite decreased inventory but with falling prices in early summer narrower margins can be expected for producers through the current quarter as depleted flocks are replaced. Higher prices compared to 2023 are attributed to losses due to HPAI depletion reducing the national flock by 20 to 22 million hens.
• Although there are weekly transfers of mature pullet flocks to laying houses, hen numbers are constrained by depopulation due to HPAI. Close to 13 million hens were lost during the 4^th Quarter of 2023 that have not yet been completely replaced. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May and 1.5 million in June.
• This past week, chains apparently narrowed the spread between delivered cost and shelf price. This could result in a continued fall in generic stock given reduced supply despite softening demand. Stock level will depend on constant re-ordering to fill the pipeline through July especially after the Independence Day holiday weekend. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
• Total industry inventory was up by 2.3 percent overall this past week at 1.57 million cases with a concurrent 5.5 percent increase in breaking stock, following an 8.2 percent rise during the preceding short processing week. Demand for egg products fell through late May through June attributed to less home-baking and entertaining.
• It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to 4 percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
• The number and extent of future possible HPAI outbreaks during coming months cannot be projected but sporadic cases in backyard poultry, isolation from wild migratory and predatory birds and more than 140 dairy herds in twelve states is a cause for concern. More surveillance information should be released by USDA-APHIS as it becomes available concerning the prevalence rate of avian carriers of H5N1 among resident domestic free-living birds together with a review of molecular and field epidemiology for the current spring and future fall waves of HPAI. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances.
• The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past two years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
• On July 10^th the stated total flock of 304.5 million, unchanged from last week, included about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production. Given the latest figures for depopulation it is estimated that the total flock is at least 20 to 22 million hens lower than the 326 million before the onset of HPAI in 2022. The April losses of 8.4 million followed by 5.7 million in May and 1.6 million in late June do not appear to be reflected in the latest release of data as the total flock was unchanged this past week. Figures released on July 10^th may overestimate flock size especially if more recent losses are not included.
• The ex-farm price for breaking stock (rounded to one cent) was unchanged at $1.70 per dozen.Checks delivered to Midwest plants were unchanged at $1.61 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs usually with a lag of one to two weeks.

The Week in Review

Prices

According to the USDA Egg Market News Reports released on July 8^th 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was down 3.7 percent from last week to $2.30 per dozen. Large was down 3.8 percent to $2.28 per dozen. Mediums were down 11.7 percent to $1.81 per dozen delivered to DCs as young pullets commence production contributing to a 9.2 percent increase in this size over the past week. It is emphasized that these prices are for one week ago. 

Following the 449 documented cases of salmonellosis attributed to Salmonella Braenderup, the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) have identified Bedner Growers as the source of the contaminated product.  Samples of soil and irrigation water from canals yielded both Salmonella Braenderup and Salmonella Africana responsible for human infection in addition to other Salmonella.

An unfortunate response by the Florida Department of Agriculture refuted the findings of the federal agencies as “inaccurate and misleading” with “the science unsubstantiated and unnecessarily damaging to the firm concerned” This commentator questions the motivation for a state agency to deny the results of a CDC/FDA foodborne disease investigation. In addition to using sound epidemiologic procedures performed according to established protocols the agencies matched isolates from patients with environmental samples applying whole genome sequencing.   

The CDC considers that the outbreak is now over given that Bedner Growers are no longer harvesting or distributing cucumbers and that most product has either been consumed or discarded.

As with leafy greens, vegetables including cucumbers and tomatoes and a range of fruit and nut products including melon have been implicated in outbreaks of salmonellosis.  Contaminated irrigation water is usually the source of pathogens but recommendations concerning cultivation practices issued by FDA are impractical and ineffective.  Given the extreme likelihood of contamination from CAFOs and human waste, it is evident that an effective kill-step is necessary at the time of packing.  Available technologies include electron beam and cold plasma application that could be implemented to destroy non-spore forming bacterial pathogens.

REVIEW OF JUNE 2024 EGG PRODUCTION COSTS AND STATISTICS.

Commencing in January 2024 the EIC justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks. Accordingly, EGG-NEWS will continue to summarize data but will consolidate production and export statistics for the U.S. egg industry as a total and compare financial data for the two shell-egg categories.

JUNE HIGHLIGHTS

• June 2024 USDA ex-farm blended USDA nest-run, benchmark price for conventional eggs from caged hens was 207 cents per dozen, up 72 cents per dozen or 53.3 percent from the May 2024 value of 135 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. Stock levels and prices prior to the onset of flock depletions due to HPAI indicated a relative seasonal balance between supply and demand. Future nest-run and wholesale prices will be largely dependent on consumer demand for shell eggs and products and the rate of replacement of pullets and hens depleted due to HPAI. Other considerations include diversion to shell sales from the egg-breaking sector in an interconnected industry.
• Fluctuation in wholesale price is attributed in part to the amplification of upward and downward swings associated with the commercial benchmark price discovery system in use. An unknown factor in future pricing will be the incidence rate and severity of highly pathogenic avian influenza in July as northward migration of waterfowl ceases. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California. Approximately 15.6 million hens have been depleted since mid-April.
• June 2024 USDA average nest-run production cost for conventional eggs from caged flocks over four regions (excluding SW and West), applying updated inputs was down 0.8 cents per dozen to 77.7 cents per dozen compared to the USDA revised May 2024 value of 78.5 cents per dozen, mainly attributable to a 1.5 percent lower average feed cost per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
• June 2024 USDA benchmark nest-run margin for conventional eggs attained a positive value of 129.3 cents per dozen compared to a revised positive margin of 56.5 cents per dozen for May 2024. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
• The June 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be down 3.7 million hens (rounded) to 290.4 compared to the revised May 2024 value of 294.1 million. This figure apparently fails to record some flocks depleted since April 2024. Approximately 3.0 million hens returned to production from molt in June together with projected maturation of 21.5 million pullets, with this number offset by depletion of an unknown number of spent hens.
• May 2024 pullet chick hatch of 29.1 million was up 1.0 percent or 0.3 million chicks from April 2024.
• April 2024 exports of shell eggs and products combined was up 23.0 percent from April 2024 to 527,000 case equivalents representing the theoretical production of 7.0 million hens. The increase was attributed to higher demand for shell eggs by Canada and egg products to Mexico and South Korea and offset by decreased imports of egg products by Japan among other importing countries.

TABLES SHOWING KEY PARAMETERS FOR JUNE 2024.

Summary tables for the latest USDA June 2024 flock statistics, costs and unit prices made available by the EIC on June 9^th 2024 are arranged, summarized, tabulated and compared with values from the previous June 7^th 2024 posting reflecting May 2024 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA value

VOLUMES OF PRODUCTION REFLECTING THE ENTIRE INDUSTRY

* USDA Revised

 * Revised USDA/EICNote 1. Texas excluded to maintain confidentiality

According to recent ProMED postings two related children under five years of age were diagnosed with H5N1variant avian influenza infection during the first week of July.  According to the information provided, the patients resident in a village in Cambodia, had close contact with backyard chickens some of which died, presumably of HPAI and were cold-slaughtered.  Following treatment for respiratory infection, both patients recovered.

From January 2003 through May 2024, 889 cases of human infection with avian influenza H5N1variant virus were reported from 23 nations.  Fifty-two of these cases, (52 percent), were fatal.  Over the same period, 254 cases of H5N1 infection were reported from four nations in the western Pacific region with a fatality rate of 56 percent.

The ProMED moderator noted that most human cases were attributed to direct contact with live poultry including purchase at wet markets, or slaughter and home preparation including defeathering and evisceration. In some Asian nations, poultry blood is included as an ingredient in traditional dishes adding to the risk of infection. 

There has been no evidence of person-to-person transmission to date.  Public health authorities are, however, concerned that mutations may occur in the H5 clade 2.3.4.4b virus prevalent in migratory and domestic birds and poultry. This could result in a zoonotic strain infectious and contagious for humans.       

A One Health policy has been introduced into Cambodia to ensure that cases of H5N1 in poultry and humans are subject to epidemiologic investigation with appropriate follow-up of contacts of patients and whole genome sequencing of isolates from both poultry and humans.

In an official statement, Massachusetts, implemented a successful state-supported universal free school meal program for the 2022-2023 school year.  Compared to the 2018-2019 school year prior to the advent of COVID, during 2022-2023, Massachusetts served 12.2 million more lunches for a total of 97.5 million.  Student participation increased by 61,500 to a daily total of 557,000.  Following the introduction of free school meals, 9 million more breakfasts were served with a total of 44.5 million.  Breakfast was served to 243,000 each school day up 43,400. 

In releasing the statistics, Governor Maura Healy stated, “We were proud to make universal free school meals permanent through the Legislature and the combination of state and federal funding allowing all students to stay healthy and succeed in school.”

Lt. Governor Kim Driscoll stated, “The state investment in universal free meals has also been an investment in school nutrition programs.  With more predictable revenue, school districts have been able to invest in locally-sourced food and have produced impressive menu items.”

Massachusetts is now the eighth state to provide universal free school meals on a permanent basis. Universal free school breakfasts represent a market opportunity for in-state and local producers and engender a habit for egg dishes that should persist after schooling.

In a recent publication* scientist in Iceland conducted whole genome sequencing of 26 HPAI virus samples collected in 2022.  It was determined that there were three different genotypes of H5N1 clade 2.3.4.4b circulating within populations of both resident and migratory wild birds. A An isolate characterized as H5N5 was introduced in 2023.

Iceland serves as the most northwest point in Europe for distribution of HPAI.  In 2022, transatlantic migration of H5N1 occurred as a result of westward movement of various species of marine birds and waterfowl that cohabited in Iceland.  Birds have moved from Scandinavia through the Faroe Islands to Iceland, with movement thereafter to Greenland, entering North America through Newfoundland.

A similar node exists in Alaska with cohabitation of migratory species resulting in dissemination of avian influenza virus and the potential for recombinant events involving Eurasian genes.  

*Ahrens, A.K. et al Iceland: An underestimated hub for the spread of high-pathogenicity avian influenza viruses in the North Atlantic. Journal of General Virology doi.org/10.1099/jgv.0.001985  May 2024

The Ohio Animal Disease Diagnostic Laboratory is now offering two assay procedures to diagnose avian metapneumovirus infection (aMPV).

A real time-PCR assay has been developed to detect aMPV nucleic acid from samples including tracheal and choanal swabs.  Dacron swabs should be used for sampling and specimens should be transported in a compatible medium.  RT-PCR assays are conducted on Monday through Friday with a charge of $36 per test.  The procedure will detect and differentiate among all three subgroups of aMPV.

An indirect ELISA procedure will detect antibodies to aMPV.  The procedure is group specific and therefore will not differentiate between subgroups A, B and C nor distinguish between vaccinated and infected flocks.  Samples are assayed on Tuesdays and Thursdays at a cost of $5 per sample.

The Midwest Poultry Federation received the Excellence in Meeting, Events and Conventions Award from the Meet Minneapolis Organization.  The award recognizes the impact of the PEAK Event, previously the Midwest Poultry Federation Convention that moved from St. Paul in 2018 to the City of Minneapolis.

Melvin Tenant president and CEO of Meet Minneapolis stated, “Each year PEAK attendance grows and the commitment to Minneapolis is a testament to the trusting partnership that has been built between the Midwest Poultry Federation and their partners including the Convention Center, City hotels and much more.

The PEAK Event is managed by Empowered Events, LLC a full-service meetings and events management company based in Buffalo, MN.  Lara Durbin previously affiliated with the Midwest Poultry Federation, and her partner Teresa Sorensen are the driving force behind the PEAK event that combines a trade show, education, entertainment and a forum for industry interaction.  The Excellence in Meetings award recognizes the success of consecutive PEAK conventions, attributed to the efforts of Empowered Events and their ability to plan and execute with attention to detail.

The U.S. Food and Drug Administration (FDA) has cancelled the registration of brominated vegetable oil (BVO) as an additive to foods and beverages.  This belated action follows studies conducted by the National Institute of Health (NIH) that determined adverse health effects among consumers of products containing BVO. In 1970 the FDA withdrew the designation of Generally Regarded as Safe.  Brominated vegetable oil was previously used as a stabilizer to maintain the flavor and appearance of beverages containing citrus components.

The decision by FDA follows legislation enacted in California banning the use of the additive.  The Rule will come into effect at the beginning of August 2024 with a compliance date for elimination by August 2025.  Since the food industry has largely ceased using BVO, the action by FDA is effectively moot but long-delayed. If BVO is deleterious according to the NIH, why expose consumers to the additive through the fall of 2025?

In late June, USAPEEC Asean conducted a culinary master class at ITE West, Singapore, an educational institution for hospitality students.  The program was attended by 47 aspirant chefs and culinary instructors.  Chef Eric of Lush Epicurean demonstrated preparation of kaya, a coconut jam using U.S. powdered eggs.  Following the demonstration, students were provided the opportunity to replicate the recipe. The program included a presentation on the production and quality of U.S shell eggs and egg products.

According to USDA-FAS GAIN Report MX2024-034 released on July 1^st, it is the intention of Presidente Andres Manuel Lopez Obrador, (AMLO) to introduce a constitutional amendment prohibiting cultivation of GM corn in Mexico.

This action will be implemented during the, legislative session beginning September 1, 2024 with assurance of passage given the majority of the Morena party. The constitutional action will solidify the 2023 Presidential Corn Decree prohibiting importation of GM corn for human consumption.  The proposed action is based on Article 4 of the constitution, the Convention on Biological Diversity and legislation on Biosafety of Genetically Modified Organisms and  Federal law for the protection of native corn cultivars.

Despite the action taken by AMLO, the incoming president Dr. Claudia Sheinbaum will allow importation of yellow corn for animal feed. Her incoming Administration will promote cultivation of non-GM white corn for human consumption.

Sheinbaum nominated Julio Berdegue to be the incoming Minister of Agriculture. Previously he served as a Regional Head of the United Nations Food and Agriculture Organization and has considerable experience in food production in Latin America.

Since, Dr. Sheinbaum, the incoming Presidenta is an environmental engineer, it is presumed that a more rational approach to GM will be followed, allowing continued importation of U.S. yellow corn into Mexico for livestock and poultry production.

Despite the Phase-I Trade Agreement with China concluded in January 2020, imports of U.S. soybeans have not conformed to the intent of the Agreement.  In 2023, Brazil supplied 70 percent of soybean imports by China with the U.S. share at 24 percent.  In contrast during 2017 the U.S. exported 32.9 million tons (1,209 million bushels) of soybeans to China falling sharply thereafter as a result of a 25 percent duty to 17 million tons (625 million bushels) in 2018.  Trade wars involving punitive and reciprocal tariffs are effectively paid by consumers and also by farmers in the case of agricultural commodities.

In recent weeks, buyers in China have ordered 12 million tons (440 million bushels) of soybeans for July delivery up from 10 million tons (367 million bushels) in June.  The renewed interest in U.S. soybeans is based on current prices and the needs of crushers in China.  An additional concern is the presumed trade polices of a subsequent Administration that may increase tariffs with resulting countermeasures.  Currently exchange rates between Brazil and China and shipping costs favor Brazil and neighboring nations at the expense of the U.S.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on July 8^th documented completed emergence for corn and soybeans for the 2024 season. A third of the soybean crop is blooming and a quarter of the corn crop is silking, both in advance of the corresponding week in 2023.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week surface and subsoil moisture values were 75 and 73 percent respectively for the two highest categories of ‘Adequate’ and ‘Surplus’ representing an acceptable situation for growth in 2024. These levels were higher than the previous week despite hot conditions. Corresponding values of 60 and 56 percent were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023. High temperature across the Midwest and Plains states was reflected in a slight deterioration in crop condition in successive weeks in June. Despite alternating drought and torrential rainfall with flooding in broad areas of the Midwest, the latest evaluation of crop quality for both corn and soybeans is acceptable.  Both corn and soybeans attained 68 percent for the two highest categories of “Good” and “Excellent” compared to 67 percent for corn and 67 percent for soybeans last week. The July 7^th values for corn and soybean quality were considerably higher than the 55 percent and 56 percent respectively for the highest categories in 2023. Prospects for high yields will be reflected in lower price projections in the July WASDE and for CME quotations for August delivery.

It is too early in the expected transition to a La Nina event to predict any impact on crop condition in coming months. If prolonged dry and hot weather is encountered in corn and soy areas, yield will be depressed depending on timing and severity.  A long-range forecast in the form of two charts is provided predicting rainfall and temperature during the growing season.

Heat stress during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late growing period.

Reference is made to the June 12^th WASDE Report #649 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. The July WASDE will be reviewed in the July 19^th edition.

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.

WEEK ENDING   Corn Status (18 states) * June 30th  2024        July 7th  2024 5-Year Average  Corn Planted (%) 100 100 100 Corn Silking (%) 11 24 14 Corn Dough (%) 0 3 2 Soybean Status (18 states)       Soybean Emerged (%) 100 100 100 Soybeans Blooming (%) 20 34 28 Soybeans Setting Pods (%) 3 9 5 *92% of 2023 acreage planted	Soybeans Blooming
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 3 6 23 52 16 Corn  2023 (%) 4 10 31 45 10             Soybeans  2024 (%) 2 6 24 55 13 Soybeans  2023 (%) 4 11 34 44 7	Corn Silking
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 6 19 63 12 Past Year 12 28 55 5 Subsoil Moisture:         Past Week 6 21 63 10 Past Year 14 30 53 3

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

In a ProMED Report dated Wednesday, July 3^rd, a fourth case of conjunctivitis was reported in a dairy herd worker in Colorado.  Symptoms were confined to the patient’s conjunctiva with recovery following administration of oseltamivir. To date Colorado has confirmed 40 cases of bovine influenza-H5N1 with a possible extension to a large laying complex.

This and the previous three cases are not unexpected given the number of workers potentially exposed to infected cows in dairy herds.  Since all cases have been mild, there is no current risk to humans with the present circulating virus.  To protect against possible conjunctivitis or upper respiratory infection, CDC has recommended the use of appropriate PPE.  Whether workers will use protective face shields correctly and consistently is questionable even if they are available.

There should be no risk of bovine influenza-H5N1 for consumers given that fluid milk should be pasteurized before bottling or incorporation into dairy products.

It will be necessary to continue to monitor the genome of bovine and human isolates to detect possible mutations that could predict enhanced infectivity or pathogenicity.

McDonald's in Australia has announced that breakfast will be terminated at10h30 back from noon. Apparently, the action was taken as a result of shortages of medium eggs as a result of depopulation of 1.5 million laying hens representing seven percent of the nation’s total. In effect it is questioned whether the restriction was actually imposed to enhance efficiency and speed of service to avoid operating with two sets of menus that incurs additional labor and time.  Eggs are available  but at a proportionally higher price due to disruption in the balance between supply and demand.

Each of the ten chicken outbreaks of H7 HPAI that have occurred among the states of Victoria  and New South Wales has been contained, but a temporary shortage has occurred and will persists until replacement flocks attain maturity.  Retailers have placed limits on the number of cartons of eggs purchased by consumers.

The problem of avian influenza in Australia is exacerbated by adoption of free-range management when the nation commenced transitioning from cage housing.

Gristedes Supermarkets, a New York City chain of 20 stores entered into a consent agreement following a lawsuit filed by the federal Southern District of New York. The U.S. alleged release of 40,000 pounds of refrigerants into the atmosphere between 2019 and 2021. 

In a statement following the announcement of the consent agreement, Damian Williams, U.S. Attorney for the Southern District of New York stated, “Gristedes is now required to reduce its emissions by over 70 percent from the 2020 level or face significant additional penalties if it fails to do so”.

The company is required to invest $17 million to adopt a refrigerant compliance management plan, to convert three stores to advanced refrigerants and to lower corporate leak rate below 16 percent.

This case demonstrates federal concern over release of potent greenhouse gas refrigerants and confirms strong action against transgressors of regulations that exhibit failure to maintain installations and to limit releases of environmentally damaging gases

New Jersey is a leader in regulating packaging to avoid waste and reduce pressure on landfills.  In 2022, the state banned polystyrene peanuts for packing, resulting in adoption of alternatives by major shippers including Amazon.

New Jersey Senate Bill S226 was recently passed to regulate the size of corrugated containers used to ship small items.  The Bill specifies that the outer box shall not exceed twice the volume of the shipped product.

Predictably, the New Jersey Business and Industry Association opposed the legislation characterizes as an attempt to “micromanage sophisticated logistic organizations”.  Irrespective of this response, many shippers including Walmart have adopted “right-size packaging”.  The Company has achieved a 60 percent reduction in the use of fillers and has diminished overall cardboard waste by a quarter. Advances in machine learning and AI are facilitating more rational packaging in fulfillment centers.

The New Jersey right-size legislation will be considered by the Lower House before enactment and may incorporate some exemptions to conform to the regulations of the U.S. Postal Service.

Additional legislation under consideration by the New Jersey Senate include a prohibition on single use plastic utensils and containers for food service, restrictions and verification for sale and distribution of products claimed to be recyclable; reduction in plastic waste and a deposit system for beverage containers.

There are numerous opportunities for the egg industry to recycle and to reduce wastage by adopting innovative outer packaging. This will require cooperation with retailers and adoption of common systems and standards.

Judge Andrew Luxen of the Denver District Court has allowed the lawsuit filed by the State of Colorado blocking the Kroger-Albertsons merger to proceed.  This action follows a similar decision in Washington State where a court ruled for the state Attorney General to continue with an antitrust action.

The two recent decisions are in accordance with Department of Justice policy sanctioning states to challenge anti-competitive action including mergers in state courts.

Evidence in the Colorado lawsuit will show collusion between Kroger and Albertsons with respect to a “no poach” agreement regarding striking workers at King Sooper’s, a Kroger banner.

The Colorado Attorney General maintains that the action by the defendants contravened the Colorado State Antitrust Act.

Rose Acre Farms in collaboration with the HATCH for Hunger Program donated 660 cases of eggs to the Food Bank of Iowa on Monday, June 7^th. Representatives of Rose Acre Farms, the Iowa Egg Council and the Food Bank of Iowa attended the event marking the donation that will benefit the needy in the State.

USPOULTRY has announced the appointment of Hannah Keck as the Director for Communications.  Ms. Keck earned a BS in Poultry Science with a minor in journalism from North Carolina State University.  Her experience includes serving as the Departmental Journalist for the NCSU Prestage Department of Poultry Science, a contributing editor to the NC Cooperative Extensive Service industry newsletter and appointments in industry.

In commenting on her appointment, Hannah noted, “I am thrilled about the opportunity to join the USPOULTRY team in an organization deeply intertwined with the entire poultry industry, combining my passions for poultry science and journalism in the role.  I look forward to learning from my knowledgeable colleagues”.

On July 5^th the United Nations Food and Agricultural Organization released the Index of Food Commodities for June 2024.  A sequential 12-month reduction in food prices is evidenced by the 2.5 point decrease in the Index from June 2023 to  the most recent value of 120.6, unchanged from May.

Components of the Index included:-

• The Cereal Index was down 3.5 points from May to 115.2 points due to lower corn and wheat prices.
• The Vegetable Oil Index in June was up 4.0 points from May to 131.8 points with  higher prices for soy, sunflower and palm oils on increased demand and U.S. diversion of soybean oil to biodiesel.
• The Dairy Index was up 1.3 points from May to 127.8 in June and up  from 116.9 points in May 2023 on increased demand.
• The Meat index was up 1.5 points from May to 112.4 points with higher poultry and beef  prices but offset by decreases for chicken on adequate supply.

Boutiful crops in Brazil and Argentina with restoration of Black Sea shipping using the ‘Humanitarian Corridor’ along the eastern seaaboard have collectively reduced concern over availability of grains and oilseeds and contributed to a moderation in prices for agronomic commodities.

EGG-NEWS is indebted to Dr. Nati Elkin publisher of PoultryMed for updated information on progress in E.U. research on bovine influenza-H5N1. Immediately following the revelation that H5N1 avian influenza virus can infect dairy cattle in the U.S., the Federal Friedrich-Loeffler Institute (F-LI) in Germany initiated an intensive study of the virus and its effect on dairy cattle using available laboratory resources and their BL-3 isolators suitable for large animals.  To date, the studies have shown that both a U.S. H5N1 isolate (B3.13) and a field isolate derived from a wild bird in Germany, replicate in secretory tissue of the bovine utter.  Lactating cows can be infected by introduction of a virus suspension into the teat. This route reproduces the clinical syndrome including elevated temperature, anorexia, reduced milk secretion and profound alteration in the consistency of milk.

The Institute has evaluated 1,400 serum samples from herds in regions with documented avian influenza among commercial flocks and wild bird without demonstrating antibodies to H5N1.  In addition, 350 milk samples from bulk tanks have been subjected to PCR assay again without demonstrating virus.  This initiative will be extended to 1,500 milk samples as part of an ongoing surveillance program.

Recent studies in Germany have demonstrated that H5N1 viruses obtained from domestic field outbreaks of avian influenza are capable of replication in vitro in bovine respiratory epithelial cells. Detection of virus was evident within 24 hours of inoculation of the cell systems that supported proliferation of virus for at least three days post-inoculation.

The implication is that H5N1 virus can infect the respiratory tract of cattle.  Studies are in progress to determine whether H5N1 can be transmitted between cows by the aerogenous route as is suspected.

The question arises as to how the Friedrich-Loeffler Institute was able to conduct studies and release data with intensity and speed as required by epidemiologists and the industry in comparison with our own uncoordinated efforts by USDA-APHIS, ARS. CDC, and state departments of Agriculture and Health?

The labor agreement for members of the Gulf and East Coast unions representing longshoremen will expire on September 30^th.  Negotiations are generally acrimonious and contentious and usually go down to the wire, often requiring Department of Labor mediation to reach an agreement.

The United States Meat Export Federation has expressed concern over the slow rate of progress noting that 45 percent of U.S. pork and 30 percent of beef exports pass through Gulf and East Coast installations.  Rapid transit through ports is necessary for chilled products including beef to the E.U. and the Middle East and pork to Central and South America.

The International Longshoremen’s Association has confirmed that they do not intend working cargos beyond the contract deadline. A strike in September will be damaging to the entire economy but especially to exporters of meat and agricultural products. Accordingly serious negotiations and evident concessions will be required during summer.

The Supreme Court has handed down a decision in Loper Bright Enterprises v Raimondo.  The decision effectively reverses a landmark case, Chevron USA Inc. v Natural Resources Defense Council Inc.  The effect of the ruling is to trim the discretion exercised by federal agencies in decisions where there is ambiguity in interpretation of law.

The 1984 SCOTUS ruling established the Chevron Defense that was used to support the actions of any federal agency based on a reasonable or rational evaluation of circumstances.  The Loper Bright Enterprises decision places the responsibility for interpretation of law within the judicial system.  Writing for the six to three majority, Chief Justice John Roberts noted “Chevron defied the command of the Administrative Procedure Act.”  Justice Roberts also stated that, “Agencies have no special competence in resolving statutory ambiguities that is the province of courts.”

The Loper decision does not affect previous cases in which the Chevron Defense was applied and accordingly decisions in these cases are valid. 

It is expected that rejection of the Chevron Defense will have far reaching implications in interpreting both the Clean Air Act and the Clean Water Act that are both of importance to agriculture and specifically livestock production.

A chain casual dining restaurant located in the Bellevue Marketplace has been implicated in four consecutive outbreaks of salmonellosis since the beginning of the year.  Cases were traced back to the establishment in mid-April, early May and late June.

Although the serotype has not been disclosed, ProMED reported that a common serotype was involved in all cases.  After each episode, the restaurant was decontaminated before reopening.

The serial nature of outbreaks could be attributed to:

• A chronic carrier in the food preparation or wait-staff who should be identified by consecutive fecal samples.

• The presence of the causal Salmonella in a storage or kitchen location that has not been decontaminated.

• A food item from a contaminated source introduced into menu items at regular intervals.  If S. Enteritidis is involved, eggs could be responsible.  It is unlikely that eggs were involved as the vehicle of infection. Given the competence of the King County Department of Health, the presence of S. Enteritidis would have been investigated and the source flock identified.  Given that the restaurant was part of a chain, it is presumed that eggs were purchased from a food service supplier who would have been sourcing eggs from a number of farms or packers compliant with the FDA Final Rule on Salmonella.

Obviously investigations are in progress to determine the origin of the infection given that whole genome sequencing of recent isolates from the establishment and patients were homologous.

In a recent release by the Centers for Disease Control and Prevention dated June 27^th, the Agency documented 86 new cases of salmonellosis with 17 recent hospitalizations from nine additional states.  To date, the total number of cases has attained 195 with 50 hospitalizations.

A wide range of Salmonella serotypes have been identified including Altoona, Cerro, Indiana, Infantis, Typhimurium and Mbandaka.  In almost all cases, traceback has demonstrated contact with backyard poultry.  Patients range in age from 1 to 93 years with a medium age of 14 years and almost half under 5 years of age.  Chicks were purchased from retail stores or were ordered from hatcheries.

CDC is able to follow incident cases using the PulseNet database.  Isolates are subjected to whole-genome sequencing, confirming correlation between patients and their flocks.  In cases diagnosed in Minnesota, Ohio and Utah, Salmonella isolates were obtained from chicken boxes denoting hatcheries as a source of infection.  Multiple drug resistance has been demonstrated from a number of isolates.

Have we not reached a point where we have established a risk to children of acquiring salmonellosis from backyard chickens? In 1975 the FDA banned interstate sale of immature turtles resulting in a precipitous decline in incident cases the following year. Turtles, snakes, lizards,iguanas and other reptiles are, to quote the late Dr. Eugene Gangarosa, “inappropriate pets for children”. We can now add chicks and ducklings to the list. Since the serotypes implicated in outbreaks are not generally regarded as being vertically transmitted, deficiencies in hygienic handling and incubation of eggs and neglect of preventive modalities are responsible for the magnitude of the problem. A combination of regulatory intervention and tort litigation in conjunction with education of both suppliers and customers is indicated.

The M.G. Waldbaum subsidiary of Michael Foods is recalling 2.3 tons of liquid egg products due to misbranding.  According to a USDA-FSIS release, the product contained milk, an undeclared allergen.  There have been no reports of adverse effects.

To their credit, management at the Gaylord, MN. plant determined that an the error had occurred following an audit of packing material that denoted an excess of ‘breakfast blend scrambled egg’ cartons compared to a deficit of ‘whole egg with citric acid’ containers. 

Since the product was packed in 32-ounce cartons under the Fair Meadow ‘whole-eggs with citric acid’ pack, distribution was to food service and restaurants, limiting potential consumer exposure.

The Pennsylvania Department of Health confirmed that two teenage patients were infected with influenza H1N2v during late June.  One patient required hospitalization.  Infection was acquired from contact with hogs at a livestock auction.  Investigations failed to confirm human-to-human contact.

 Animal-associated influenza viruses that infect humans are designated variants (v).  Based on previous cases, these influenza isolates have limited ability to infect humans and are unlikely to become contagious.  It is, however, necessary to characterize variant influenza viruses and determine through whole genome sequencing whether mutations have occurred that could affect infectivity or pathogenicity.

In a June 27^th press release, Rodney McMullen, CEO of the Kroger Company, outlined benefits to stakeholders that would accrue from the proposed merger of his company with Albertsons Corporation.  He pledged that if approved, the transaction would not result in layoffs.  It is intended to invest $500 million to lower grocery prices “over the short term(?)” and to invest $1.3 billion in upgrades for Albertsons stores.  In a defense of the merger against union opposition, McMullen noted that Kroger will commit $1 billion to raise wages and benefits and will recognize unions.

The proposed merger is opposed by the FTC and by a number of states Attorneys General.  Although the two companies are committed to a joint defense of the transaction, it is possible that if litigation and appeals are unsuccessful, the parties may play out the clock  or re-structure the agreement with the prospect of a more sympathetic consideration by a subsequent Administration.

Under pressure from Bob Ferguson, Washington State Attorney General, Albertsons Corporation has removed a land use restriction on a closed Bellingham store located in the Birchwood neighborhood. The store was shuttered by Albertsons in 2013 when it moved the business to a nearby Haggen location  Despite subsequent sale of the property, a restriction established in 1982 prevented operation of a grocery business creating a local “food desert”.

An investigation into the situation was conducted by the Office of the Attorney General resulting in the concession by Albertsons to remove the use restriction that would have persisted through 2038.  This action has allowed for a competitor to establish a grocery store in the premises to serve the need of the local community.

In discontinuing the land use restriction, that represented a “dog in the manger” policy, Albertsons will pay the Office of the Attorney General $25,000 to cover costs. Ferguson noted, “Access to fresh groceries is essential for every neighborhood.” He cited residents without transportation and the elderly and disabled in the Birchwood community impacted by the restrictions imposed by Albertsons.  Ferguson has proven to be a strong advocate for the rights of Washington residents noting, “My legal team will continue standup to antitrust violations that create food deserts harming Washington families.”

The Office of the Washington State Attorney General is a party to a lawsuit joined by other state Attorney’s General and the Federal Trade Commission to oppose the proposed merger of Albertsons Corp and the Kroger Company.  Ferguson noted that the divestment proposal advanced by the merging parties “Does not change the fact that Kroger would still enjoy a near-monopoly in many markets in the state.”  He added, “The plan to sell the stores to a company that is primarily a wholesale supplier could set up many of the divested supermarkets to fail, endangering Washington jobs and further diminishing choices for Washington shoppers.”  His concerns are related to the failure of Haggen following divestment of stores in the northwest as required for the merger between Albertsons and Safeway.

SunOpta a supplier of oat milk will commit $30 million to expand their Modesto, CA. plant.  SunOpta applies an enzymatic treatment and extraction process to manufacture oat milk and other plant-based products.  The company currently operates a new plant-based milk plant located in Midlothian, TX. that commenced production in early 2023.

Brian Kocher, CEO commented that expanding the Modesto plant was justified by increased demand and the facility will contribute to both sales and sustainability by reducing distances required for national distribution.

The Union representing workers in stores operated by the Food4Less banner of the Kroger Company in California have reached a tentative agreement.  Their contract expired on June 8^th and the workers voted to strike unless demands for base pay, benefits and improvements in safety were incorporated into the new agreement.  Negotiations with six locals of the United Food and Commercial Workers Union were successful despite Food4Less listing temporary positions in an attempt to pressure the UFCW.  The Union pointed to the disparity in earnings between their banner and Ralph’s, also owned by Kroger.  The initial offer by the company contained what was regarded as an inadequate increase in salary and failure to adjust health insurance costs. The tentative agreement is subject to ratification  

At the recent Kroger shareholders’ meeting, a “living wage policy” was rejected.  The proposal intended to establish a wage policy “designed to provide workers with the minimum earnings necessary to meet the families’ basic needs” was considered, but voted down.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on July 1^st documented completed planting for corn and soybeans and emergence and emergence of all corn for the 2024 season. Soybean emergence advanced 5 percent to 95 percent, 5 percent in advance of the equivalent week in 2023.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week surface and subsoil moisture values were both 72 percent for the two highest categories of ‘Adequate’ and ‘Surplus’ representing an acceptable situation for early growth in 2024. These levels were essentially unchanged from the previous week despite hot and dry conditions. Corresponding values of 58 and 52 percent were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023. High temperature across the Midwest and Plains states was reflected in a slight deterioration in crop condition.

It is too early in the expected transition to a La Nina event to predict any impact on crop condition in coming months. If prolonged dry and hot weather is encountered in corn and soy areas, yield will be depressed depending on timing and severity.  A long-range forecast in the form of two charts is provided predicting rainfall and temperature during the growing season.

Reference is made to the June 12^th WASDE Report #649 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. The July WASDE will be reviewed in the July 19^th edition.

Heat stress during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late growing period.

WEEK ENDING   Corn Status (18 states) * June 23rd  2024        June 30th  2024 5-Year Average  Corn Planted (%) 100 100 100 Corn Emerged (%) 97 100 100 Corn Silking (%) 4 11 6 Soybean Status (18 states)       Soybean planted (%) 97 100 100 Soybean Emerged (%) 90 95 90 Soybeans Blooming (%) 8 20 15 Soybeans Setting Pods (%) 0 3 2 *92% of 2023 acreage planted	Emerging Soybean Plants
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 3 6 24 52 15 Corn  2023 (%) 4 11 34 43 8             Soybeans  2024 (%) 2 6 25 55 12 Soybeans  2023 (%) 4 11 35 44 6	Emerging Corn Plants
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 7 21 60 12 Past Year 13 29 54 4 Subsoil Moisture:         Past Week 7 21 61 11 Past Year 15 33 49 3

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

On June 28^th, the USDA National Agricultural Statistics Service updated planting and stocks data for the 2024 harvest.

The NASS surveyed  operators of 9,000 tracts of land and 64,000 farms during the first two weeks of June.  The following data was recorded: -

Corn

• 91.5 million acres of corn will be harvested, down 3 percent from 2023.  GM varieties represented 94 percent of the crop.
• Total corn stocks amounted to 4.99 billion bushels, up 22 percent from the corresponding week of 2023.  On farm corn stocks were 37 percent higher, denoting storage on the farms in anticipation of an unlikely rise in price.  On farm stocks were 4 percent higher.

Soybeans

• The soybean area to be harvested was estimated at 86.1 million acres, up 3 percent from 2023.  GM varieties represented 96 percent of acreage planted.
• Soybeans stocks amounted to 970 million bushels, up 22 percent from June 1^st, 2023.
• On farm stocks were up 44 percent from 2023.  As with corn, farmers are holding stocks in anticipation of a rise in price that may not occur while incurring interest charges.  Off farm stocks were up 6 percent.

Following recent torrential rains, manure storage pits on cattle feedlots flooded and released fecal contamination.  According to the Minnesota Pollution Control Agency, 17 facilities were involved in three counties.  Fortunately, the manure released will be diluted given the high volume of floodwater.  Eventually, solids and bacteria contained in the supernatant from the storage lagoons will enter ground water.

The Minnesota Pollution Control Agency highlighted the obvious in a statement, “Historic rainfalls can cause issues for manure management systems that are not designed to handle extreme amounts of rainfall.”

Experience in Eastern North Carolina has demonstrated the need to reduce the level of lagoons holding hog waste before the advent of the hurricane season.  In past years, flooding with release of hog waste impacted large acreages affecting the quality of well water on neighboring farms and residences.  Appropriate preventive action in recent years has avoided major problems arising from flooding following hurricanes.  Minnesota and other states should follow the example of North Carolina.

A&J Meats, a California meat processor and a staffing agency used by the company were fined by the Department of Labor for illegal employment of minors.  In accordance with federal law, the processor surrendered $327,000 in illegal profits obtained through “oppressive and exploitative child labor”.  The Department of Labor imposed an additional fine of $62,000.  An investigation disclosed that workers at or under 15 years of age, were required to enter freezers and coolers and perform deboning with sharp knives.  Minors were also required to work in excess of the statutory number of hours per week in contravention of the Fair Labor Standards Act applying to children under the age of 18. A&J Meats is operated by Priscilla Castillo, a daughter of Tony Bran. He was previously ordered to pay $3.8 million in back wages and damages as a result of illegal employment of minors.

In commenting on the A&J Meats case, a spokesperson for the Department of Labor noted, “These employers egregiously violated federal law and now both have learned about the serious consequences for those who so callously expose children to harm.”

The problem of child labor extends beyond extended hours and exposure to hazardous situations in plants.  Investigations have disclosed possible trafficking of immigrant children by cartels with the connivance of staffing companies and acceptance by unscrupulous employers.

World Weather Inc. is evaluating the impact of a transition from an El Nino through a neutral phase to a La Nina expected to emerge during the fall.  Long-range forecasts are based on previous transition years extending back to 1983. These oscillations were characterized by a wet planting period, followed by severe drought.  World Weather does not anticipate a repetition of this scenario in 2024 anticipating reasonable climatic conditions. 

• It is anticipated that summer will be drier in the Great Plains and the Southeast extending eventually to the Midwest.

• Higher rainfall will occur in the upper Midwest during late July and August extending into the Great Basin and Rocky Mountain regions

• Temperatures in the western U.S. will be cooler than usual

With a deliberate denial of recent history, beef state legislators are urging reintroduction of country-of-origin labeling.  Senator Mike Rounds (R-SD) urges reintroduction of mandatory labeling (MCOOL) to be incorporated into the “next Farm Bill.” Whether Senator Rounds intends this to be adopted for the long-delayed 2023 Farm Bill or the subsequent 2027 version was not specified.

The 2002 Farm Bill included an MCOOL provision but this was repealed in 2015 after Canada and Mexico obtained a favorable decision from a World Trade Organization dispute panel resulting in mandatory concessions to be made to petitioners Canada and Mexico, our USMCA partners.

Senator Rounds pointed to fluctuation in markets for beef.  His representations obviously received support from R-CALF USA.  Rounds noted, “While cattle prices are currently on the rise, it is evident producers will again encounter market disruptions.  As farmers and ranchers deal with a volatile market, it is imperative that the Federal government provide a level playing field.”

In March 2024, USDA issued a Rule for a voluntary “Product of USA” label used for poultry, allowing, “Product derived from flocks hatched, raised, slaughtered and processed in the United States.”  The voluntary claims will be introduced on January 1, 2026, unless opposed, as is expected, by Mexico and Canada.

Representations made by petitioners to the WTO confirmed interconnectivity of live cattle production between the three USMCA nations, limiting the application of MCOOL.

Segments of U.S. livestock production have adopted a self-serving approach to their respective red meat industries.  They demand independence from federal control on many aspects of production including identification of animals but at the same time look to the Government for legislative and financial protection.  This ambiguity influences beef and pork state legislators in establishing and implementing federal policy on production and trade.

The Clean Fuels Alliance America has requested the EPA to establish a Renewable Fuel Standard (RFS) higher than the levels set for 2024 and 2025.  In 2023, the EPA volume was 2.8 billion gallons with a suggested 3.25 billion gallons.  Actual fuel produced was 4.6 billion gallons in 2023.  The Clean Fuels Alliance is requesting a 5.1-billion-gallon RFS in 2024, increasing to 5.6 billion gallons in 2025.

It is evident that the request is an attempt to create an artificial demand for biomass-based diesel fuel.  At the present time, the EPA has determined that 115 million gallons of biodiesel production annually have been idled and 12 million gallons have been terminated.  Approximately 1.4 billion gallons of planned diesel capacity has been deferred.

If additional volumes of soybeans are crushed to produce oil to be diverted into biodiesel, it presumes that more soybean meal will be available for livestock feeding and export.  This may be of benefit to farmers in view of the declining volume of soybean exports, down approximately 20 percent year-to-date attributed to reduced demand by China and a preference for supplies from South America.

RFS-Cellulosic ethanol is an aspirational myth

The Ninth Circuit Court of Appeals rejected an appeal by the Iowa Pork Producers Association regarding California Proposition #12.  Effectively, this law by ballot disqualified production or sale of pork in the state from herds derived from sows held in gestation crates. Previously, a district court ruled against the Association requiring a review by the higher court.

The Ninth Circuit ruled that Proposition #12 does not discriminate against pork producers located in states other than California and that a requirement that all pork sold in the state should conform to Proposition #12 standards was upheld.  The Court also dismissed the Association’s claims that Proposition #12 conflicted with the Privileges and Immunities Clause, the dormant Commerce Clause in addition to the federal Packers and Stockyards Act.

The Supreme Court of the United States has ruled that Proposition #12 is constitutional and it would appear that legal remedies have now been exhausted since SCOTUS is unlikely to hear an appeal on the Ninth Circuit ruling.

It is accepted that there is adequate pork available from sows held under group housing.   Irrespective of the established legality of Proposition #12, the reality is that public sentiment is against confinement of sows in gestation crates.  Major grocery chains and food service suppliers have confirmed that they will source pork only from Proposition #12 compliant housing systems.

As far as the National Pork Producers Council are concerned, the train left the station prior to 2021 and that group housing will probably be required for most domestic consumption narrowing the market for pork derived from sows held in gestation crates to export or to be sold at a discount.  In anticipation of the transition, most of the major packers have embarked on or have completed transition to group housing of sows.

In contrast to pork producers who effectively scuttled the ‘Egg Bill” that would have mandated a uniform Federal standard for laying hens, the egg industry embarked on a program of transition to alternatives to cage housing, having achieving a 40 percent conversion to date.

Vital Farms intends to erect a packing plant in the Seymour, IN. with the support of the Jackson County Industrial Development Corporation and the Indiana Economic Development Corporation.  Presumably Vital Farms will follow the model established in Missouri and will contract with existing and new egg producers in the state.

Russel Diez-Canseco, President and CEO noted, “this is an exciting milestone for Vital Farms.  We continue to invest in our robust and resilient supply chain to expand our network of family farmers and continue our mission to bring ethical food to the table”.

The American Farm Bureau conducts an annual estimate of the cost for a group of ten enjoying a typical Independence Day barbeque.  The tab this year will be $71.22. up five percent from 2023 and 30 percent higher than five years ago before the onset of COVID.  Inflation for food at home was up one percent on an annual basis from May compared to four percent for food away from home. The escalation for the Independence Day barbeque was attributed to higher prices for beef and pork.  Ground beef is up 11 percent, offset by a decrease in the price of chicken.  Hamburger buns will be up seven percent, cheese up one percent and ice cream up seven percent.  Lemonade made with domestic lemons and sugar will increase by 12 percent.

Regional differences will deviate from the approximate $7 per person average with the northeast average for a party of 10 at $63.54 compared to western states at $80.88.