Egg Industry News


Albertsons Posts Q2 Profit in FY 2019.

10/17/2019

For the 2nd Quarter of FY 2019 ending September 7th Albertsons LLC, a privately held corporation, posted net earnings of $294.8 million on sales of $14.17 billion. For Q2 FY 2018 Albertsons posted a loss of $32.4 million on revenue of $14.02 billion. Results for Q2 2019 include a gain on property dispositions of $435.5 million ($135.8 million Q2 2018)

 

Comparing Q2 of 2019 with Q2 2018 gross margin advanced by 2.2 percent to 27.8 percent. Operating margin increased to 4.1 percent compared to 0.9 percent in Q2 of 2018.

 

Albertsons attained same store sales growth of 2.4 percent for Q2 FY 2019 and achieved a 40 percent growth in on-line and click-and-collect sales combined. House brands represented 25.3 percent of sales.

 

Long-term debt, lease obligations and related liabilities increased to $15.57 billion from $13.64 billion in Q2 of 2018. Total assets increased to $24.70 billion in Q2 2019 from $ 20.78 billion for the corresponding quarter of FY 2018.

 

Albertsons operated 2,262 stores at the end of Q2 FY 2019, down from 2,291 at the end of the corresponding quarter in FY 2018.


 

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

10/17/2019

The USDA Economic Research Service issued an updated forecast of egg production on October 17th, following the previous September 18 th report. The volume of eggs produced and per capita consumption in 2019 were increased by 2.7 and 1.9 percent respectively compared to 2018 data. Consistent with this disparity, the benchmark New York price was reduced by 34.7 percent in unit value. Production data reflecting 2016 and 2017 should be compared to 2015, impacted by the Spring outbreak of HPAI in the upper-Midwest. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to forecast volume of production. The latest data is reflected in the table below:-

 

Parameter

2015

(actual)

2016

(actual)

2017

(actual)

2018 2019 Difference % 2020

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

 

EGGS

       

Production (m. dozen)

6,938*

7,437

7,755

7,952 8,164 +2.7% 8,225

Consumption (eggs per capita)

255.8*

272.0

279.9

284.0 289.5 +1.9% 291.2

New York price (c/doz.)

182*

86

101

138 90 -34.7% 99


Source: Livestock, Dairy and Poultry Outlook -October 17th 2019

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

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


 

STOP PRESS

10/17/2019

China Comments on the Outcome of the October Trade Negotiations

 

Having absorbed the U.S. interpretation of the October 10th and 11th bilateral trade negotiations it is instructive to review comments from China since there was no post-meeting communiqué. According to a senior official of the Ministry of Commerce, Gao Feng, the position of his Government is as follows:-

  • All ‘additional’ (presumably those announced in August) tariffs due to have been imposed on October 15th and scheduled for December 15th must be rescinded
  • Both sides will reconvene to finalize details before an interim “Phase-1 Agreement” can be signed
  • China intends purchasing U.S. agricultural produce however no specific commodities, quantities or time periods have been stated.
  • No mention was made of structural issues that underlie the conflict including intellectual property, state subsidies or coercive trade practices.

Gao expressed the desire that both the U.S. and China will end the trade war that is mutually damaging.

 

The divergence between post-Negotiation statements as to what was agreed has assumed the proportions of Rashomon, the classic 1950 Kurosawa movie based on a traditional Japanese legend.


 

Michigan Moving to Cage-Free Housing

10/17/2019

The Senate Agriculture Committee of the Michigan Legislature approved Bill 174 and sent it to the full Senate where it will be voted on within weeks. This legislation conforms to UEP standards and will be fully effective by 2025. The sponsor of the Bill, Sen. Kevin Daley, (R-Lum), stated “Michigan is home to 15 million egg-laying hens and our state is sixth in the nation in egg production, which makes this legislation vitally important to the future success of our state’s egg industry,” If passed and signed into law,  

Michigan would be the fifth, and to date the largest egg producing state in the U.S. to adopt a cage-free requirement. California, Washington, Oregon and Rhode Island have enacted similar cage-free housing laws.


 

Cal-Maine Foods to Acquire Egg Production Assets of Mahard Egg Farm

10/17/2019

In an October 17th release Cal-Maine Foods, Inc. announced that it has reached a definitive agreement to acquire substantially all of the shell-egg assets of Mahard Egg Farm, including production, processing, distribution. Subject to the completion of this transaction assets will include commercial shell egg production and processing facilities with current capacity for approximately 3.9 million laying hens and permitted capacity for up to 8.0 million laying hens, a feed mill, pullets and related production facilities located in Chillicothe, Texas, and Nebo, Oklahoma, and a distribution warehouse located in Gordonville, Texas.

 

Commenting on the announcement, Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., said, “We are very pleased to announce the acquisition of these assets from Mahard Egg Farm. Cal-Maine Foods already has a market presence in Texas, and, with the addition of these facilities located near the major market areas north of Dallas, we have an opportunity to reach more customers in Texas and southern Oklahoma with this additional production capacity. This proposed transaction is commensurate with our strategy to grow our business through selective acquisitions, as well as through expansion of our existing facilities. We look forward to the opportunity to extend our market reach and deliver greater value to both our customers and shareholders.”

Mahard Farms is a third-generation egg enterprise that adhered to traditional practices and standards at variance with the present industry. Their approach to biosecurity, maintenance, systems, welfare and marketing were more reminiscent of the 1960s than the present. It is evident that low prices for commodity eggs over a prolonged period depleted their working capital leading to the sale of the business. It is possible that the Mahard sale is a bellwether for mid- to large-sized, family-operated U.S. egg producers, predicating more consolidation


 

Egg Export Training Seminar

10/17/2019

AEB hosted an intensive training session for U.S. egg exporters on Wednesday October 16th in Atlanta. The comprehensive session included information on egg market opportunities, quality advantages of U.S. eggs and a review of government safety oversight with a review of foreign market resources. 

 

For the first eight months of 2019 shell egg exports attained 90.4 million dozen up 20 percent from the corresponding period in 2018. Unit value was down 32 percent reflecting the balance between availability and demand from the two leading importers, Hong Kong and Mexico collectively representing 70 percent of export volume.

 

For the eight-month period exports of egg products attained 20,289 metric tons, down 7 percent from 2018. Unit value declined 13 percent to an average of $3,149 per ton. The value of exported egg products was $64 million for the eight-month period.

 

Combined exports of shell eggs and products represented 2.9 percent of U.S. production corresponding to approximately 9.5 million hens.

 


 

EU Designates Reference Center on Welfare

10/17/2019

In an October 7th press release by the European Commission, it was announced that a reference center dedicated to the welfare of poultry and other small farm animals has been established.  The center will comprise a consortium formed by the Agence Nationale de Securite Sanitaire de l’Alimnation of France, the Institute de Recerca of Spain, Aarahus University of Denmark and the Instituo Zooprofilatico Sperimentale della Lombardia e dell’Emilia Romagna of Italy. 

 

The consortium will operate effectively from the beginning of 2020 and the objective is to improve the enforcement of EU legislation framed under Regulation EU 2018/329 covering the housing, management, transport and slaughter of livestock.


 

Tariff Reductions Follow U.S.-Japan Trade Agreement

10/17/2019

According to the terms of the recently concluded U.S.-Japan Trade Agreement, tariffs on egg products will be reduced progressively over a four-year period. Dried egg yolk purchased by Japan in significant quantities will be reduced from a base rate of 18.8 percent to 12.5 percent in Year one declining progressively to 3.1 percent in Year four. Dried whole egg will decline from 21.3 percent to 10.7 percent and frozen whole egg from 21.3 percent to 3.6 percent in year four. The duty on egg albumen currently at 8 percent will be waived after one year.

The reduction in duty effectively places the U.S. in the same bracket as members of the Comprehensive and Progressive Trans-Pacific Agreement formed in 2017 after unilateral withdrawal by the U.S. from the Trans-Pacific Partnership.

During the first eight months of 2019 Japan was the first-ranked importer of U.S. egg products representing 27.6 percent of volume with 5,549 metric tons but a decrease of 29.4 percent compared to the first eight months of 2018. Total value of egg products exported during the first eight months of 2019 was $22.1 million down 33.2 percent from 2018. On a value basis Japan represented 34.5 percent of U.S. egg products exported but down from 42.2 percent for the first eight months of 2018. Unit value was $3,982 ($4,213 in 2018) compared to the average value of $3,180 for all egg products exported during the first eight months of 2019. This is consistent with purchase of dried egg yolk incorporated into noodles and dried albumen for traditional foods.


 

Just Crack an Egg Promotion

10/17/2019

The partnership between AEB and Kraft Heinz is in progress, with egg cartons now on the shelf in many stores. More than 13 million coupons will be distributed across 12,000 grocery stores during October and November.

The instantly redeemable in-store coupon is valid toward a $1 saving with the purchase two Just Crack an Egg packages.

 

 


 

PrimaLac Feed Additive Beneficial to Free-range Laying Hens.

10/16/2019

Star Labs. recently concluded a field trial to evaluate the benefit of PrimaLac probiotic feed additive on mature hens held under free-range management at the North Carolina Dept. Ag. Facility in Salisbury NC. The report prepared by faculty at the Prestaged Department of Poultry Science is available by accessing the link below.

 

View full article here

 

 

 

 


 

Egg Week

10/16/2019

USDA Weekly Egg Price and Inventory Report, October 16th 2019.

  • Hen numbers in production up 0.4 million to 327.6 million .
  • Shell inventory up a moderate 1.5 percent after two successive weekly declines
  • USDA Midwest benchmark generic prices for Extra large and Large unchanged at 59.5 and 57.5 cents per dozen respectively. Mediums were one percent lower at 49 cents per dozen. Relative stability for three weeks suggests a market bottom. All Midwest prices are below production cost for the Region.
  • Price of breaking stock up to 40.5 cents per dozen. Checks down to 26.0 cents per dozen reflecting shell-egg prices. Both categories substantially below cost of production

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on October 14 th the Midwest wholesale prices for Extra Large and Large as delivered to DCs were unchanged at 59.5 and 57.5 cents per dozen respectively. Mediums were 1.0 percent lower at 49.0 cents per dozen. All prices were below the USDA average 5-Region blended nest-run benchmark of 59.0 cents per dozen in September, excluding provisions for packing and transport. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

The October 14th USDA Egg Market News Report (Vol. 66: No. 41) documented a USDA Combined Region value rounded to the nearest cent, of $0.66 per dozen delivered to warehouses for the week ending October 9th. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.58 per dozen. At the high end of the range, price in the South Central Region attained $0.71 per dozen. The USDA Combined Price last week was approximately $0.24 per dozen below the three-year average and $0.48 per dozen below the price during the corresponding week in 2018.


 


EU Imposes Welfare Requirements on Imported Eggs

10/16/2019

Duty-free status for imported eggs into the EU in terms of the recently concluded EU-Mercosur trade agreement will be conditional on complying with EU housing and welfare regulations.  This requirement resulted from campaigning by the Euro Group for Animals and was endorsed by the UK RSPCA.  According to John Clarke Director of International Affairs, Directorate-General for Agriculture and Rural Development at the European Commission, “there is a cooperation provision in the agreement on animal welfare with a very clear objective to improve the level of animal welfare particularly in the Mercosur countries to bring them up our world-leading standards.”

 

According to the European Egg Processors’ Association, compliance with E.U. requirements adds 15 percent to the cost of production of an egg.  Retaining tariffs on eggs from conventional cages would enable EU producers to compete with eggs from the Mercosur nations, Brazil, Argentina, Paraguay and Uruguay. 

A spokesperson representing Copa-Cogeca an organization representing European egg producers noted “a tariff on non-compliant eggs is central for us as currently animal welfare is not a universally accepted concept among trading partners”.  The British Egg Industry Council stated that the agreement was a step forward and the welfare requirement for eggs paralleled other animal-derived foods produced in the EU and imported into the UK.


 

Shortage of Yellow Peas Impeding Expansion of Vegetable-Based Meat Substitute

10/16/2019

The rapid rise in production of plant-based meat substitutes has created a demand for pea protein.  Beyond Meat incorporates protein extracted from yellow peas in its formula and the Company is now experiencing supply problems.

 

According to USDA, 1.1 million acres were planted to produce peas, a 28 percent increase over the previous year.  The laws of supply and demand will result in an increase in the value of dried peas which can be cultivated in the same areas as soybeans.  Currently in the U.S. in North Dakota and Montana produce 80 percent of dried peas and wide scale extension to soybean-producing states is unlikely.  Currently most of the dry pea production is non-GM but not as yet certified organic.  Should vegetable protein manufacturers require organic peas, expansion of output could be delayed for three years.

 

It remains to be seen whether the lofty projections for growth in the vegetable-based meat substitute will conform to commercial reality.  In addition, technology currently dependent on peas may allow substitution of alternative vegetable protein sources.  Any farmer would be faced with a difficult decision to establish organic-compliant acreage to produce organic peas three years hence with the uncertainty relating to acceptability of vegetable-based burgers and ground meat substitutes or the introduction of new vegetable protein sources.


 

Trade Mitigation Food Purchases

10/16/2019

U.S. Department of Agriculture has announced a pre-solicitation notice for chicken products to be purchased under the Trade Mitigation for Purchase and Distribution Program.

 

The USDA Agriculture Marketing Service intends purchasing product valued at $371 million under authority of Section 5 of the Commodity Credit Corporation Charter Act.  Products will be distributed to food banks and other nutrition assistance programs.


 

Trade War with the EU on the Horizon?

10/16/2019

Following over a decade of litigation, the World Trade Organization has confirmed that the U.S. is entitled to impose counter-measures in response to illegal subsidies extended by the EU to Airbus, a competitor of Boeing. The WTO decision will allow the U.S. to impose tariffs on $7.5 billion in imports including wine, cheese, whisky, clothing and other industrial products.

 

U.S. trade representative Ambassador Robert Lighthizer noted, “We expect to enter into negotiations with the European Union aimed at resolving this issue in a way that will benefit American workers”. The Administration apparently will not impose tariffs on the full $7.5 billion allowable in terms of the WTO decision but a tariff on EU automobiles and parts is under consideration. 

 

The Government of France announced that it will respond to the U.S. tariffs with retaliatory measures suggesting initiation of a new trade war that we do not need now or in the future.


 

Settlement in JBS Lawsuit

10/16/2019

Specialist legal periodical Law 360 reported a $42 million settlement between a shareholder and JBS SA the majority owner of Pilgrim’s Pride with close to 75 percent of equity.

In 2017, JBS engineered a purchase of Moy Park, an integrator located in Northern Ireland owned by JBS, to U.S. subsidiary Pilgrim’s Pride. The transaction was valued at $1.3 billion. At the time CHICK-NEWS questioned the validity of the sale which effectively transferred the purchase price from Pilgrim’s Pride to the parent company to the disadvantage of minority shareholders holding approximately 22 percent of the equity of Pilgrim’s Pride.

The justification for the financial maneuver was for JBS to raise $3.2 billion levied as a fine on the company as a result of illegal dealings. These included wide-scale bribery involving the highest levels of government and officials at the Brazilian Development Bank (BNDES) and State-employee pension funds.

The suit was filed in the Court of Chancery, the state of Delaware by Matthew Sciabacucchi who claimed that the transaction had not been approved by an independent committee of the Board and ignored the interest of minority shareholders. The Sciabacucchi claim was consolidated with a parallel suit filed by the Retirement System for Employees of the City of St. Louis.


 

U.S. Department of Treasury Urged to Investigate JBS SA

10/16/2019

Senators Marco Rubio (R-FL) and Bob Mendez (D-NJ) have addressed a letter to the Secretary of the Treasury, Steven Mnuchin requesting an inquiry into purchase of U.S. meat processing companies by JBS SA.

It is a matter of record that JBS SA of Brazil controlled by family-held J and F Investimentos used bribery to acquire sweetheart loans from the Brazilian Development Bank (BNDES) and various pension funds. Proceeds were used to purchase U.S., Latin American and E.U. meat and poultry production companies.

The two senators also allege that the group has financial involvement with the Maduro Government of Venezuela contrary to U.S. sanctions regulations and is also partly financed from entities allied to the Government of China.

In 2017, J and F Investimentos reached a settlement with the Government of Brazil involving a fine of $3.2 billion. The principal officers of JBS S.A., Joesley and Wesley Batista relinquished their management involvement in the Group.

The letter addressed to the Treasury Secretary noted “We are troubled that JBS S.A. used financing that it received from BNDES totaling more than $1.3 billion to acquire American companies in contravention of the Foreign Corrupt Practices Act.

U.S. businesses acquired in the U.S. include Swift and Co in 2007; the beef operations of Smithfield Foods in 2008; Pilgrim’s Pride (75% equity ownership) in 2009; XL Foods in 2012 and the pork operations of Cargill Inc. in 2015.  

In 2018 JBS S.A. planned a U.S. IPO for meat businesses to be consolidated as JBS Foods International BV. Following the scandal in Brazil the intended IPO was withdrawn as inopportune.  

JBS S. A. businesses have encountered problems with compliance with employment regulations, food safety, transport regulations and deceptive practices contrary to GIPSA rules.


 

Smithfield Foods to Prioritize U.S. Customers Before Export

10/16/2019

With the possibility of the U.S. exporting significant quantities of pork to China as a result of the ongoing and extensive outbreak of African swine fever, Smithfield Foods, owned by the WH Group of China has indicated that it would prioritize supplying pork to the U.S. customer base.

For the week ending October 3rd 2019, China purchased 142,000 metric tons of pork from the U.S. compared to 20,000 tons in September of this year. USDA data confirmed export of 300,000 tons of pork muscle cuts to China in 2019 to date with 135,000 tons anticipated in 2020. China claims importation of 700,000 tons in 2019. The difference may relate as to whether their figure includes carcasses. The USDA intends to clarify the discrepancy in a future advisory. For 2019 to date China has imported 1,330,000 tons of pork in various forms nearly double the quantity imported during the corresponding first eight months of 2018.

The commitment to prioritize U.S. customers was made by Arnold Silver, Director of Raw Materials Procurement for Smithfield at a national meeting at the beginning of October. U.S. producers expanded by four percent in 2019 but prospects for wide-scale expansion will be limited in 2020.

Increased demand for hams and pork bellies by China may result in shortages in the U.S. resulting in greater consumption of turkey and broiler meat.


 

Status of 2019 Corn and Soybean Crops

10/15/2019

The USDA Crop Progress Report released on October 15th documented continued slow progress in maturation and harvesting both corn and soybeans after a delayed start to planting due to flooding. The deficit with respect to 2018 is evident in that only a quarter of the corn and soy crops have been harvested compared to half the crop in 2018. The delay in planting is expected to negatively impact yields as documented in the October 10th WASDE Report # 593 accessible under the STATISTICS tab. Current crop condition for both soybeans and corn are highly variable as to time of planting and generally inferior to the 2018 harvest as tabulated below. High topsoil moisture levels were evident in comparison with the corresponding weeks in 2018 until the past week. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

October 6th

October 13th

5-Year Average

Corn Dented %

Corn Mature %

Corn Harvested %

93

58

14

96

73

26

100

92

49

       

Soybeans Dropping leaves %

Soybeans Harvested %

72

14

85

26

93

49

       

Corn will mature 25 days after the early dent stage implying harvest commencing late September as recorded extending through late October. Yield is reduced if corn and soybean fields are exposed to frost. Cold temperature before harvest contributes to higher moisture content requiring drying and susceptibility to Fusarium infection leading to DON contamination. Unseasonable freezing temperatures and up to 2 feet of snow were experienced in the Dakotas and some Northern corn/soy states during the Columbus day weekend. As yet the effect is not noticeable in the CME corn price although experience suggests that for each one percent decline in corn yield price increases by three to six cents per bushel. This said, 2019 is like no other year given trade disputes and political uncertainty.

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

4

4

11

8

30

20

44

47

11

21

Soybeans 2019

Soybeans 2018

4

3

10

8

33

23

45

48

8

18

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

10

16

55

19

Past Year

4

9

64

23

Subsoil moisture: Past Week

10

18

56

16

Past Year

7

13

64

16

 

The USDA Grain Stocks Report released September 30th documented old crop corn stocks in all positions on September 1 st 2019 totaling 2.11 billion bushels, down one percent from September 1st 2018. Of the total stocks, 753 million bushels (34 percent) are stored on farms, up 22 percent from a year earlier. Off-farm stocks, at 1.36 billion bushels, are down 10 percent from a year ago. June to August 2019 data indicated disappearance of 3.09 billion bushels, compared with 3.16 billion bushels during the same period last year reflecting combined domestic and export demand.

Old crop soybeans stored in all positions on September 1st 2019 totaled 913 million bushels, up 108 percent from September 1st 2018. Soybean stocks stored on farms totaled 265 million bushels (29.0 percent), up 162 percent from a year ago. This suggests that farmers are holding old crop soybeans in anticipation of a settlement of the trade dispute with China expected to result in a sharp upturn in price.
 


John Starkey Attended International Egg Commission’s Global Leadership Conference

10/15/2019

John Starkey, president of USPOULTRY attended the International Egg Commission 2019 Global Leadership Conference in Copenhagen in October to represent the U.S. poultry industry in a global market.


 

Export of Shell Eggs and Products January-August 2019.

10/13/2019

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

 

 

PRODUCT

Jan.-Aug. 2018

Jan.-Aug 2019

Difference

Shell Eggs

     

Volume (m. dozen)

75.0

90.4

+15.4 (+20.5%)

Value ($ million)

85.8

70.0

-15.8 (-18.4%)

Unit Value ($/dozen)

1.14

0.77

-0.37 (-32.5%)

Egg Products

 

 

 

Volume (metric tons)

21,650

20,289

-1,561 (-7.2%)

Value ($ million)

78.4

63.9

-14.5 (-18.5%)

Unit Value ($/metric ton)

3,621

3,149

-472 (-13.1%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-AUGUST 2019 COMPARED WITH 2018

Source USDA-FAS/USAPEEC


 


Costco to Open 15 Warehouses in U.S. in FY 2020

10/10/2019

Costco Wholesale has indicated that it intends to invest $3 billion during the coming fiscal year ending September 2020 to open 15 U.S. stores adding to their total of 544. The company will be selective as to location, evaluating demographics, competition and population density.

Given a capital expenditure budget of $3 billion for the coming fiscal year, the investment of $100 million in the Nebraska rotisserie broiler complex to be operated by Liberty Premium Poultry appears to be small change for the company.


 

Lawsuit Challenges Texas Drone Law

10/10/2019

A lawsuit was filed in the United States District Court for the Western District of Texas challenging the constitutionality of the Texas Unmanned Aircraft statute enacted in 2013.

The National Press Photographers Association has brought suit challenging the law claiming that the provisions “chill and criminalize speech and news gathering activity protected by the First and Fourteenth Amendments”. The complaint alleges that surveillance provisions are overly broad and by preventing surveillance, may inhibit news gathering.

Of interest to the egg production industry is the provision that it is currently illegal for a drone to capture an image of property captured in the image. In addition, it is illegal to possess, disclose, display, distribute or otherwise use an image captured by a drone. This provision effectively prevents animal welfare advocate organizations from using drones to determine whether outside access for flocks is practiced in accordance with organic certification or label claims made for products or brands.

Contravention of the surveillance provision of the Unmanned Aircraft Statute will be classed as a misdemeanor. This will probably not inhibit animal rights activists and zealots. Monetary damages may be sought through a civil action, thereby dissuading these organizations from obtaining images using a drone or subsequently posting depictions of farms.


 

Michael Foods Commissions New Egg Processing Plant

10/10/2019

Michael Foods has opened a new further-processing plant for egg products valued at $85 million. The facility located in Norwalk, IA., near Des Moines, is 143,000 square feet in extent. The capital cost includes $67 million for equipment and $17 million on land and erection of buildings.

Michael Foods is a subsidiary of Post Holdings Inc., and markets brands including Crystal Farms™, Better‘n Eggs™, Allwhites™ liquid eggs and Simply Potatoes™. Michael Foods received a $3.4 million investment tax credit and close to half a million dollars in tax rebates. The company is receiving a preferential tariff on bulk water.


 

USDA-WASDE FORECAST #593 October 10th 2019

10/10/2019

OVERVIEW

The October 10th 2019 USDA WASDE Report was released on due date despite the relocation of many ERS personnel from Washington D.C. to Kansas City. Projections for the 2019 corn and soybean harvests for the October WASDE are based on actual yield and harvested area with progressive updating as the season has advanced. The current unknown is the effect of predicted mid-October frost and snowfall on yield for a late-planted crop in Illinois, Iowa and Nebraska.

The corn acreage to be harvested was determined from planting completed in June at 89.9 million acres (81.8 million in 2018) down 0.2 percent from the September WASDE. In 2019 soybeans will be harvested from 75.6 million acres, down 0.3 percent from the September estimate (88.3 million acres in 2018)

The USDA projected corn yield was raised 0.1 percent to 168.4 bushels per acre, (178.9 bushels in 2018) despite late planting and delayed development. Soybean yield was reduced 2.1 percent to 46.9 bushels per acre from September, (52.1 bushels in 2018). Yield values presume suitable climatic conditions through completion of the harvest.

The September USDA projection of the ending stock for corn was lowered by 11.9 percent from the September WASDE to 1,929 million bushels. Ending stock for soybeans will be 28.1 percent lower than the September estimate at 460 million bushels. Projections for ending stocks for both corn and soybeans have influenced recent CME price quotations concurrently with reports on trade negotiations with China. It is presumed that projections are based on the assumption that there will not be a complete settlement of the trade dispute with China during the fourth quarter of 2019. China failed to commit to purchases following the June meeting between President Trump and Premier Xi at the G-20 Meeting in Osaka. Some orders representing four percent of projected 2019 exports of soybeans were forthcoming in September after the August G-7 Summit in France. In mid-September, China rescinded a ban on all agricultural imports from the U.S. imposed on August 4th. This followed the announcement of a delay in introducing a September 1st threatened tariff of 10 percent on imports from China valued at $300 billion not already subject to duty.


 


STOP PRESS

10/09/2019

Clouds Building Before Trade Talks

Recent events appear to cloud the Ministerial-level trade negotiations with China commencing tomorrow. These include sanctions against officials involved in suppressing human rights in predominantly Muslim Provinces; NBA support for Hong Kong Protesters and U.S. blacklisting tech companies in China.

At best only a limited agreement is expected, hopefully restoring agricultural exports but only if the U.S. backtracks on threatened October and November tariff escalation.


 

Market Facilitation Program Will Cost $28 Billion Over Two Years

10/09/2019

In 2018, the Administration paid farmers $12 billion as compensation for losses sustained as a result of the trade dispute with China. In July 2019, the Department of Agriculture announced a $16 billion compensatory package.

USDA received 420,000 applications for 2019 compensation with stricter requirements imposed as a result of obvious irregularities associated with the 2019 payouts. The USDA  disbursed  $5.4 billion through the end of September with projected tranches in November and December depending on market price and other considerations including possible resolution of the tariff dispute.

There is an obvious question as to the source of the funding. The Administration claims that “China is paying the tariffs” which is patently wrong and also how tariffs collected on imported items from China will be used to compensate farmers. Since allocation of the funds and their source is more political than financial, it will be some time before the books can be squared. The prevailing economic wisdom is that tariffs are ultimately borne by consumers.


 

Wegmans Open 100th Store

10/09/2019

Wegmans Food Market opened their 100th store in Raleigh, NC on Sunday September 29th.  The supermarket will feature fresh produce, artisan breads, restaurant-quality prepared foods, seafood and international items.  The facility will also include a Burger Bar, a causal restaurant counter selling a wide range of casual meals and beer and wine by the glass.  The Raleigh store is the most southern in the Wegmans chain. Five additional stores in central North Carolina including Cary, Wake Forest, Chapel Hill and Durham are planned.  Wegmans will open two New York metropolitan stores with intended additional locations in Maryland, Delaware, Virginia and Washington, DC.


 

Shelf Management to Receive Greater Attention

10/09/2019

Brokerage company, Acosta recently issued a report entitled Shelf Management, highlighting the disproportionate spending on promotion compared to shelf management.  In terms of sales and margin, shelf management is far more important in the purchase decision.  The report claims that $100 billion is spent annually on promotions compared to $300 million on shelf management. 

Acosta maintains that investment in improvements for shelves results in a measurable increase in sales compared to conventional promotion.  A number of large supermarket chains are evaluating electronic shelf labels, a development which may results in fewer SKUs.  Shelving supplier are redesigning installations to eliminate upright interruptions and to concentrate products with a high margin.  Bill Bender, VP of sales at Uniweb, the manufacturer of Variety Panel stated, “depending on the type of retailer and the retail environment, shelving will continue to play an integral part in merchandising.”  He added, “with the introduction of new technologies including smart shelves, retailers will be able to influence auditing, inventory control, merchandising and advertising applying RFID technology.”

 


 

FDA Launches FDA-Track

10/09/2019

In a September 30th announcement, Dr. Norman Sharples, Acting Commissioner of the FDA and Frank Yiannas, Deputy Commissioner for Food Policy and Response announced the release of FDA-Track.  This new dashboard is intended to provide regular updates and performance measures and represents an increased concern for transparency by the Agency.

FDA-Track was established in response to the Food Safety Modernization Act. Initial data suggests that the time required from identifying an event requiring a recall to initiating action has declined from four days in 2016 to two days in 2019.

 

FDA-Track will evaluate outcomes relating to good manufacturing practices, hazard analysis and risk-based controls for human food and animal feed.  The Dashboard will also include data relating to the Foreign Supply of Verification Program initiated in May 2017.


Frank Yiannis Deputy Commissioner of the FDA

 

Multi-State Outbreak of Cyclospora Infection Linked to Fresh Basil from Mexico

10/09/2019

After an extensive investigation, the U.S. FDA in co-operation with the Centers for Disease Control and Prevention have determined that a multi-state outbreak of Cyclospora infection was attributed to fresh basil imported from Mexico.

The distributor Siga Logistics de RL de CV located in Morelos, Mexico initiated a recall on July 24th.  Based on the decline in incidence rate the outbreak appears to be over.


 

Egg Week

10/09/2019

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

  • Hen numbers in production up 0.4 million to 327.1 million.
  • Shell inventory down a moderate 1.7 percent, the second successive decline after four consecutive weekly increases.
  • USDA Midwest benchmark generic prices for Extra large and Large unchanged at 59.5, 57.5 cents per dozen respectively. Mediums down to 47.5 cents per dozen. Relative stability for two weeks suggests a market bottom. All Midwest prices below production cost for the Region.
  • Price of breaking stock down unchanged at 39.5 cents per dozen. Checks up 1.8 percent to 26.5 cents per dozen reflecting shell-egg prices. Both categories substantially below cost of production

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on October 7 th the Midwest wholesale prices for Extra Large and Large as delivered to DCs were unchanged at 59.5 and 57.5 cents per dozen respectively. Mediums were 2.1 percent lower at 47.5 cents per dozen. All prices were below the USDA average 5-Region blended nest-run benchmark of 59.0 cents per dozen in September, excluding provisions for packing and transport. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

The October 7th USDA Egg Market News Report (Vol. 66: No. 40) documented a USDA Combined Region value rounded to the nearest cent, of $0.66 per dozen delivered to warehouses for the week ending October 2nd. This average price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.58 per dozen. At the high end of the range, price in the South Central Region attained $0.71 per dozen. The USDA Combined Price last week was approximately $0.22 per dozen below the three-year average and $0.48 per dozen below the price during the corresponding week in 2018.


 


Egg Monthly

10/08/2019

Review of September 2019 Production Costs and Statistics.

  • September 2019 USDA ex-farm blended nest-run benchmark price was down 0.1 cent per dozen or 0.2 percent from August 2019 to 57.5 cents per dozen, but still below the U.S. average benchmark cost of production. Low price is consistent with seasonal purchase trends but accentuated by oversupply.

  • September 2019 USDA average nest-run production cost was 1.5 percent lower than August 2019 at 59.0 cents per dozen.

  • September 2019 USDA benchmark nest-run loss decreased from August 2019 to 1.5 cents per dozen.

  • September national flock ( over 30,000 hens/farm) was up 1.8 million or 0.6 percent to 314.4 million.

  • August pullet chick hatch down 9.2 percent from July to 23.1 million.

  • August exports of shell eggs and products up 12.4 percent to 770,600 case equivalents representing the equivalent of 12 million hens.

 

INTRODUCTION.

Summary tables for the latest USDA September 2019 prices and flock statistics made available by the EIC on October 8th 2019 are arranged, summarized, tabulated and reviewed in comparison with values from the previous September 12th 2019 posting reflecting August 2019 cost and production data.


 


Crop Progress

10/07/2019

Status of 2019 Corn and Soybean Crops

The USDA Crop Progress Report released on October 7th documented continued slow progress in both corn and soybeans after a delayed start to planting due to flooding. The deficit with respect to 2018 is evident in the proportion of the corn and soy crops harvested. The delay in planting is expected to negatively impact yields as documented in the September WASDE Report accessible under the STATISTICS tab. The October WASDE is scheduled for October 10th. Current crop condition for both soybeans and corn are highly variable as to time of planting and generally inferior to the 2018 harvest as tabulated below. High topsoil moisture levels were evident in comparison with the corresponding weeks in 2018 until the past week. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

September 29th

October 7th

5-Year Average

Corn Dough %

Corn Dented %

Corn Mature %

Corn Harvested %

100

88

43

11

100

93

58

15

100

99

85

27

       

Soybeans Dropping leaves %

Soybeans Harvested %

55

7

72

14

87

34

       

Corn will mature 25 days after the early dent stage implying harvest commencing late September and expected to extend through late October. Yield is reduced if corn fields are exposed to frost. Cold temperature before harvest contributes to higher moisture content requiring drying and susceptibility to Fusarium leading to DON contamination.

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

4

4

11

8

29

20

45

47

11

21

Soybeans 2019

Soybeans 2018

4

3

11

7

32

22

45

49

8

19

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

11

16

53

20

Past Year

6

13

63

18

Subsoil moisture: Past Week

10

18

57

15

Past Year

8

17

63

12

 

The USDA Grain Stocks Report released September 30th documented old crop corn stocks in all positions on September 1 st 2019 totaling 2.11 billion bushels, down one percent from September 1st 2018. Of the total stocks, 753 million bushels (34 percent) are stored on farms, up 22 percent from a year earlier. Off-farm stocks, at 1.36 billion bushels, are down 10 percent from a year ago. June to August 2019 data indicated disappearance of 3.09 billion bushels, compared with 3.16 billion bushels during the same period last year reflecting combined domestic and export demand.

Old crop soybeans stored in all positions on September 1st 2019 totaled 913 million bushels, up 108 percent from September 1st 2018. Soybean stocks stored on farms totaled 265 million bushels (29.0 percent), up 162 percent from a year ago. This suggests that farmers are holding old crop soybeans in anticipation of a settlement of the trade dispute with China expected to result in a sharp upturn in price. This is unlikely given displacement of U.S. supplies by Brazil and Argentine and the decreased requirement of China due to ASF. Token orders for soybeans amounting to four percent of projected 2018-2019 exports have been placed by China in recent weeks. Off-farm stocks, at 648
 


Egg Nutrition Center Arranges Promotional Event

10/03/2019

The Egg Nutrition Center of the American Egg Board has arranged a social event to take place during the annual Food and Nutrition Conference and Expo in Chicago. This prestigious event is sponsored by the Academy of Nutrition and Dietetics. The Mix and Mingle event will provide an opportunity for ENC scientists led by Dr. Micky Rubin to interact with peers in an informal setting to benefit the image of the egg production industry.


 

Nestle to Face Trial in Class Action Lawsuit Over GMO Label

10/03/2019

Consistent with the third party verification that a range of Nestle products do not contain ingredients classified as GMO by independent certifier company SGS, Nestle is to face trial in California. The plaintiff purchased various Nestle products including Buitoni, Coffee-Mate and Lean Cuisine brands, all labeled as containing “no GMO ingredients”. The plaintiff contends that these products did in fact contain bioengineered ingredients and suffered “injury in fact” through paying a higher price for the claimed attribute.

In their defense, Nestle claimed that the label description confirming an absence of GMO ingredients is in compliance with both FDA and USDA regulations aimed at facilitating decisions by consumers.

Food manufacturers will watch with interest developments in a Federal court in California since the outcome will have implications for labeling. If the plaintiff prevails, food manufacturers will have to reevaluate labels and the definition of GM. To some extent, Nestle might well be culpable since by claiming “GMO-free” they overtly demonized all other ingredients and food products which may contain GM ingredients.

Despite the alacrity in initiating class-action lawsuits by the avaricious tort bar, especially in California, the reality is that there are no deleterious effects from consuming foods containing GM ingredients.


 

Tim Horton’s Restricting Beyond Meat Menu Items

10/03/2019

Following what was reputedly a successful trial, the Tim Horton’s chain will confine servings of Beyond Meat products to British Columbia and Ontario. Tim Horton’s rolled out Beyond Meat breakfast sandwiches in June followed by plant-based burgers in July.

Jose Cil, CEO of Restaurant Brands International, the parent company of Tim Horton’s stated on August 2nd that the Beyond Meat products would not necessarily be on the menu over the long term. He clarified “We looked at the Beyond Meat burger as a limited time offer to see how it would react and were encouraged by some of the behavior there”. He added “But in the end, we are really a coffee and baked goods business with a very strong sandwich offering with soups and other products in our restaurants”.

EGG-NEWS and CHICK-NEWS have commented on the rapid acceptance of plant-based protein burgers with high growth albeit from a small base. These products have been positioned as healthy alternatives to beef and have been sold at a premium compared to the real product. Sales may well have been driven by curiosity and it remains to be seen whether demand extends beyond flexitarians and vegetarians. Despite all the hype and publicity surrounding vegetable protein, the question of equivalency in nutritional value has yet to be considered.


 

African Swine Fever Spreading in the Philippines

10/03/2019

Following an initial delay in confirming the presence of African swine fever in Rizal where hogs in backyard operations showed acute high mortality, further outbreaks have been reported in Quezon City near the capital, Manilla and in Pangasinan Province in the North of the Nation.

An interesting comment in news reports is that the Bureau of Animal Industry confirmed “swine fever virus in blood samples”. If in fact viremic hogs are diagnosed using PCR, rapid diagnosis is possible. If however the authorities are relying on demonstration of antibodies to ASF, cases will be missed and delays will occur in confirming a diagnosis since in most cases death precedes antibody production.

In the absence of a vaccine rapid herd depopulation and strict quarantines are necessary to control the infection. Anecdotal reports suggest that farmers attempted to dispose of dead hogs by dumping carcasses in waterways. This occurred in China leading to further dissemination of virus.

Authorities in Quezon City are considering a ban on backyard hogs. This will be a difficult rule to enforce and house-to-house inspection will result in transmission of infection. Of the 13 million estimated hog population in the Philippines, eight million are in backyard farms devoid of biosecurity.


 

Ahold Delhaize USA, Emphasises Sustainability

10/03/2019

Ahold Delhaize has imposed a new policy with respect to packaging of products to enhance sustainability. Banners under Ahold ownership include Food Lion, Giant Food, Hannaford and Stop and Shop in addition to the Peapod online grocery delivery.

Under the new policy, chemicals of concern including polyfluoroalkyl compounds, bisphenol A among others will be placed on a restricted-substance list for private-brand products and food packaging. In 2020, Ahold Delhaize USA will expand testing requirements to ensure that products meet standards required by U.S. regulations with respect to chemicals of concern.

The company will partner with suppliers and producers to minimize potential contamination in finished products including tea, coffee and cocoa in cooperation with the Rainforest Alliance and Fair Trade and Organic programs. Ahold Delhaize USA will report annually on progress towards a sustainable chemistry commitment in terms of the Chemical Footprint project.

In 2018, Ahold Delhaize USA initiated a program to eliminate synthetic colors, artificial flavors and preventives, MSG and high-fructose corn syrup from all private-label products by 2025. Meg Han, president of Food Lion stated “We are committed to caring for our customers and our communities. This sustainable chemistry commitment is just one more way we are demonstrating that care through our sustainability initiatives.”

Ahold Delhaize USA operates 2,000 supermarkets on the East Coast and conforms to the requirements of the parent company in the Netherlands. This includes establishing sustainability targets including 50 percent of own-brand food sales and a 20 percent reduction in food waste since 2016 and a 30 percent reduction in greenhouse gas emission based on 2008 levels. By 2025, the Company will require all plastic packaging for company brands to be recyclable, reusable or compostable.


 

Ovotrack Completes Installation of System in Australia

10/03/2019

Ovotrack has reported on the successful installation of an Ovotrack system extending over a two-month period in the plant operated by D.A. Hall in Australia. The company operates a Moba Omnia FT 5000 Grader with a combi-loader and plant automation. The Ovotrack installation will permit full traceability and inventory control including ECI for automated batch changes and synchronization of grading results.

Cooperation between the IT personnel at D.A. Hall and the Ovotrack software development team permitted a seamless conversion to Ovotrack involving both hardware and software.

Don Trefz, GM of the Supply Chain at D. A. Hall stated “We are happy with the solution and with the partnership. We are constantly working on improving the quality and efficiency of our operation. Automation and data are key elements in that process and Ovotrack helps us with both.”


 

Ovotrack Scan-Portal for Inventory Control

10/03/2019

Ovotrack recently installed two case-scan portals on case conveyors to enhance inventory control. Cases passing the scan-portal are subject to verification. In the event that the barcode is unreadable or detached, the case conveyor is stopped and an alarm sounds to investigate and correct any abnormality. The scan-portal provides security that labels are scannable at dispatch or at any stage in the distribution chain.


 

Possible Delays in Release of USDA Reports

10/03/2019

Relocation of the USDA-ERS from Washington, D.C. to Kansas City has resulted in profound reduction in personnel with extensive separation from resignation and retirement. The gravity of the situation, essentially a self-inflicted wound, has the potential to delay release of critical documents including the October WASDE with a pre-announced release date of Thursday 10th

It is understood that some transfers of personnel and terminations have been delayed and that retirees are being hired to maintain function and continuity.

 

A letter from Senator Debbie Stabenow (D-MI) Ranking Member of the Senate Committee on Agriculture, addressed to Secretary of Agriculture Dr. Sonny Perdue expressed concern over possible dislocation of service delivered by the ERS was included in the October 2nd edition of CHICK-NEWS, accessible under the SEARCH tab.


 

Cal-Maine Foods Reports on Q1 2020

10/02/2019

In a press release dated September 30th Cal-Maine Foods (CALM) announced results for the 1st Quarter of Fiscal 2020 ending August 31st 2019

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

 

 

 

 

1st Quarter Ending

August 31st 2019

Sept. 1st 2018

Difference (%)

Sales:

$241,166

$340,583

-29.2

Gross profit:

$(21,125)

$57,128

-136.9

Operating income:

$(63,470)

$12,677

-600.7

Pre-tax Income

Net Income*

$(60,492)

$(45,760)

$16,493

$12,405

-810.8

-627.8

Diluted earnings per share:

$(0.94)

$0.26

-460.5

Gross Margin (%)

(8.8)

16.8

-152.4

Operating Margin (%)

(26.3)

3.7

-810.8

Profit Margin (%)

(19.0)

3.6

-627.8

Long-term Debt:

$2,227

$858

+159.6

12 Months Trailing:

     

Return on Assets (%)

-1.6

   

Return on Equity (%)

-0.4

   

Operating Margin (%)

-2.2

   

Profit Margin (%)

-0.3

   

Total Assets

$1,096,872

$1,156,278

-5.1

Market Capitalization

$1,830,000

   

* Q1 2020 included $14.7 million tax benefit and $3.0 million in "other income" ($3.8million Q1 2019)

52-Week Range in Share Price: $36.65 to $50.69

Market Close Friday Sept 27th pre-release $45.56.

Close Monday September 30th post-release $40.43 (down 11.3 percent)

Forward P/E 25.4 Beta 0.6

In reviewing the CALM quarterly report the following calculated values* represent key data for the most recent Quarter. (Q1 Fiscal 2018 and difference in parentheses):-

  • Dozen shell eggs sold: 254,424,000 (250,059,000 +1.8)
  • Average selling price of all shell eggs: $0.93 per dozen; ($1.33 per dozen; -30.1%).
  • Average selling price of specialty eggs (excluding co-pack) calculated from data released: $1.88 cents per dozen; ($1.92 per dozen; -2.1%).
  • Average selling price of generic eggs calculated from data released: $0.66 cents per dozen; ($1.15 cents per dozen; -42.6%).
  • Differential between generic and specialty eggs: $1.22 cents per dozen; ($0.77 per dozen; +58.4%)
  • Specialty eggs as a proportion of volume sold: 22.2%; (23.8%; -6.7%)
  • Specialty eggs as a proportion of sales value: 44.9%; (34.2%; -31.3%)
  • Proportion of eggs sold actually produced by Cal-Maine flocks: 84.2%; (83.7%; -+0.6%).
  • Feed cost per dozen 41.1cents (41.3 cents -0.5%)

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


In reviewing Q1 results Dolph Baker, Chairman and CEO of Cal-Maine Foods, Inc., stated, "Our financial and operating results for the first quarter reflect the very challenging market conditions that prevailed throughout the summer. While our sales volumes were up 1.7 percent over the first quarter last year, the extreme drop in market prices adversely affected our results. The Southeast large market average price for conventional eggs dropped 40.7 percent for the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. At the same time, our average sales price was down 30.0 percent for the first quarter compared to the same period last year. The significant drop in market prices reflects the oversupply of eggs that began to affect the market starting in early calendar 2018. This trend has continued as the most recent
 


EPA to Restructure Rulemaking on Pollutants and Pesticides

10/02/2019

Under the tenure of EPA Administrator Scott Pruitt in 2018, the EPA adopted a policy of not considering scientific data generally unavailable to the public in rulemaking.  This intended policy effectively negated the contribution from internal company studies and a wealth of epidemiologic evidence.

 

The exclusionary proposal adopted to eliminate “inconvenient” data created a firestorm of opposition from scientists, health and environmental advocates, state regulators and industry opposed to the principle of restricting the consideration of available scientific information.

 

Andrew Wheeler, current administrator of the U.S. EPA announced on September 19th that the proposal would be revised and re-issued in 2020 representing a reversal of the 2018 position of the Agency.


 

Walmart and Meijer Establish Employee Training Programs

10/02/2019

Walmart offers a path to a college degree for employees without having to be encumbered by student debt.  Walmart pays the cost of tuition, fees and books not covered by financial aid to obtain a baccalaureate degree within a five-year period.

 

The initiative is more than altruistic, since employee loyalty and productivity are enhanced through education.  Walmart will add seven baccalaureate degree programs and two career diplomas to the existing educational benefit program. 

The Bureau of Labor Statistic estimates that demand for healthcare positions will increase and there will be a shortage of suitably qualified technical and professional workers to fill positions.  Walmart has 5,000 retail pharmacies, 3,000 vision centers and 400 hearing centers. 

 

Meijer supermarkets have created a retail management certification program to obtain training at the Grand Rapids Community College.  Eighteen employees with at least one year of service will represent the pilot cohort.  The certification program will extend over a year with classes covering seven weeks.  Todd Weer, Senior Vice-president of Stores of Meijer stated, “Our team members are vital to our company’s success and we remain committed to investing in their professional development.”  He added, “This newest partnership with Grand Rapids Community College provides a great opportunity to help our team members achieve their educational goals and advance their careers.”  To accommodate additional students, the Grand Rapids Community College Board of Trustees has voted to purchase a disused JC Penny building to establish a campus.  Initial classes will be in organizational behavior and accounting with additional instruction in business communication and management.  Erika Murphy, manager of leadership development programs at Meijer noted, “This is a valuable credential regardless of the team member’s position within the Company as it provides a solid understanding of business education, general management and retail management.”  She added, “It’s especially helpful for individuals working to achieve the first level of leadership within Meijer but can provide core skills that can take them wherever they go in their careers.


 

The Legal Consequences of Fraud in Quality Control

10/02/2019

The Quality Control Manager for New England Meat Packing Company has entered a guilty plea that could result in a five-year prison sentence.  Debbie L. Smith participated with the owner of the company in submitting fraudulent microbiological reports purporting to show absence of E. coli when in fact specimens were not submitted to an external laboratory.  The fabricated results were uncovered during an audit by FSIS and involved 52 carcass swabs and 36 phony documents.


 

FDA Issues Alert over Raw Pet Food

10/02/2019

The FDA issued a caution to pet owners not to feed Performance Brand dog food after a sample tested positive for both Salmonella and Listeria.  Samples were collected at Bravo Packing Company the manufacturer of the Performance brand.

 

EGG-NEWS has previously commented on the undesirability of feeding raw meat products to pets.  Contracting either Salmonella or Listeria infection can result in illness in pets but also shedding of the pathogens in the environment of the home and handling contaminated food and utensils which represents a hazard to human contacts especially children.

 


 

Greg Hinton Named Co-Vice Chairman of the IEC

10/02/2019

Greg Hinton of Rose Acre Farms has been named as a co-vice chairman of the International Egg Commission.

 

EGG-NEWS wishes him success in his position and his election reflects favorably on his abilities, Rose Acre farms and the U.S. egg production industry.

 


 

Alonzo Named Business Leader

10/02/2019

Anne L. Alonzo was named one of fifty Chicago senior executives featured in the Chicago United prestigious 2019 Business Leaders of Color roster.  This distinction recognizes leaders who have combined vision with the ability to execute on strategies.  Alonzo serves as the president and CEO of the American Egg Board.  She is proud of her Hispanic heritage and through her activities has enhanced the image of the U.S. egg industry among the Latino community.

 

Anne was concurrently a recipient of a Maestro Leaders Award for Entrepreneurship recognizing her contributions to the food industry and agriculture and as an advisor, entrepreneur and leader of a non-profit enterprise.


 

MADE WITH REAL EGGS SEAL

10/01/2019

AEB debuted the new Made with REAL Eggs seal at the IBIE

 The seal is available for imprinting on packaging to promote REAL eggs in baked goods helping to create delicious, authentic, quality products.


 

Novogen Acquires Hatchery in Brittany

10/01/2019

In a September 23rd release, Novogen announced acquisition of a hatchery at Gare d’Uzel in Brittany, France. The facility will be modified to produce grandparent level chicks to be distributed worldwide and also parent stock destined for Europe, the Middle East and Africa.

According to the Managing Director of Novogen, Mickael Le Helloco, “This investment represents a major milestone for Novogen strategy through 2030. The facility immediately increases production capacity to nearly four million layers with room for expansion”. The new hatchery is located in close proximity to the headquarters of Novogen in Pletran. Following renovations, the hatchery should commence operation during early Summer of 2020.

Novogen established in 2008 has a presence in over 50 nations with subsidiaries in the United States and Brazil. Novogen is a company within the Grimaud Group, a multinational breeding company with 1,800 employees worldwide and annual revenue of $370 million.


 

Corn State Senators Expect Release of Administration Compromise on Ethanol

09/30/2019

Ten Midwestern senators met with the President in mid-September and apparently left the White House accepting that a compromise agreement had been reached to stabilize demand for ethanol.

 

Senator Chuck Grassley (R-IA) is now questioning why the Administration has not released a plan and is demanding follow-through and implementation.

 

On September 30th the leaders of corn-grower groups in 23 states addressed a letter to the President noting that 85 waivers granted under his Administration amounted to 4.0 billion gallons of ethanol reducing demand for corn and resulting in idled ethanol plants.


 

Department of Labor Changes Threshold Earning Level to Qualify for Overtime

09/30/2019

According to an overview by Andrew Ackerman and Sarah Chaney in the September 25 edition of The Wall Street Journal, , a rule issued by the Department of Labor would increase the earnings threshold from $23,660 per year to $35,568 to allow workers to qualify for time-and-a-half pay for more than forty hours per week.  The threshold figure was last established in 2004.  It is anticipated that the change will affect 1.3 million workers in the U.S. effective January 1st 2020.

 

During the past two years, various state laws have outpaced Federal requirements with California establishing a $49,920 threshold rising to $62,400 in 2023.

 

At least 100,000 supervisors or low-level managers will be affected by the overtime rule.  The previous attempt to raise the threshold in 2016 was blocked by courts after challenges by business lobbies and individual states.  It is estimated that retail-clothing employees earned $485 per week and restaurant workers $387 per week during July.  The increase in salary threshold corresponds to a rise from $455 per week to $684.

 

Patrick Pizella the Acting Secretary of Labor stated, “America’s workers will have an update to overtime regulations that will put overtime pay into the pockets of more than one million working Americans.”


 

EPA to Waive Toxicity Tests on Birds

09/30/2019

Consistent with a Federal initiative to eliminate animals in toxicity testing by 2025, the EPA has proposed that manufacturers of pesticides will no longer be required to conduct toxicity trials on upland game birds for a five-day period to ascertain potential toxicity.  The EPA considers that a single dose of a pesticide under review administered to either a songbird, game bird or waterfowl will be adequate to evaluate pesticide toxicity.

 

It has become apparent that People for the Ethical Treatment of Animals have collaborated with the EPA to establish the new protocol for testing.  The EPA based their decision to relax testing on the fact that no differences were determined using the existing five-day test and a single dose with respect to 119 pesticides marketed between 1998 and 2017.

 

While CHICK-NEWS supports expediency and minimization of effort in approving pesticides, the reduction in number of test subjects could result in a Type II statistical error. This would be not recognizing an actual risk  (“false negative”).  If the compound is non-toxic and is fed over a five day period and there is no untoward effect, then no harm has been caused. If however dosing over a five day period does induce toxicity then regulators must act accordingly with respect to the compound to preserve free-living avifauna and domestic poultry.

 

Since the proposal is subject to comments through November 1st, it is hoped that the scientific community will react accordingly since the integrity of the EPA is on the line and the motives of PETA are always subject to question.


 

AMS Amends Charge Structure for Inspection

09/26/2019

The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) is amending the regulations covering voluntary grading and certification for products under their jurisdiction including shell eggs. According to the Federal Register of Sept. 23rd, amendments will standardize language and update terminology pertaining to billing services. The regulations will simplify how the holiday rate is assessed, modify charges for excess hours above agreed duration and will remove the administrative volume charge for inspection services for shell eggs.


 

Dosatron International Appoints Business Development Manager

09/26/2019

Dilution Solutions, a subsidiary of Dosatron International has appointed Dr. Jose Rodriguez as Business Development Manager. In this role he will concentrate on customer requirements and new opportunities.

I commenting on his appointment Rodriguez said “I am eager to share my knowledge and experience developing long-term customer relationships by providing excellent support”.

Rodriguez earned a baccalaureate degree in agricultural engineering and a doctorate in engineering sciences from Washington State University. He can be contacted at Jose.rodriguez@dosatronusa.com


 

Cargill posts Q1 FY 20120 Results

09/26/2019

In a September 26th press release Cargill Inc. reported results for the fiscal 2020 first quarter ended August 31st 2019. Since Cargill is privately held detailed financial data is not released. For the Quarter adjusted operating earnings were $908 million, similar to the corresponding quarter of FY 2019, on revenue of $29 billion.

In commenting on results, Dave MacLennan, Cargill's chairman and CEO stated. "our year started on a good note as we continued to help our customers navigate an unpredictable business environment," He added "right now, we are focused on modernizing all aspects of our operations so we can effectively and efficiently provide our customers with solutions they value everywhere they do business."

Adjusted operating earnings rose in Animal Nutrition & Protein, and Industrial & Financial Services but declined in the Origination & Processing and Food Ingredients & Applications segments.

The report highlighted :-

  • Global protein delivered strong results in North America as the business brought innovative solutions to customers to help them meet strong consumer demand for beef and eggs. Protein in Europe and Asia increased due to good poultry performance in China, Thailand and the U.K. Similarly, protein in Latin America improved despite a difficult operating environment.

  • Despite pressure from African swine fever, results improved in global compound feeds as the business combined an advantageous product mix with effective cost management. Starches, sweeteners and texturizers dropped primarily due to lower volumes in Europe and North America.

  • The global trading business saw good year-on-year improvement, as it was well-positioned across commodities.

During the quarter, Cargill expanded joint ventures and formed new partnerships:

  • The company invested an additional $75 million in Puris, the largest manufacturer of pea protein in North America. This will help the firm more than double production by repurposing an existing facility in Minnesota to supply plant-based proteins, starches and fibers to food and beverage customers.
  • Cargill formed a commercial partnership with InnovaFeed, a leader in producing protein for feed from insects, to jointly market these feeds as it seeks to support the growth of sustainable aquaculture worldwide. Similarly, an agreement with biotech company White Dog Labs provides Cargill with access to a fermentation-based protein for use in salmon feeds.

Cargill announced the BeefUp Sustainability program, which by 2030 will reduce greenhouse gas intensity by 30% across its beef supply chain per pound of product by focusing on grazing management, feed production, innovation and food waste reduction. Achieving the target will be the equivalent of removing two million cars from U.S. highways for a year..

The University of Illinois at Urbana-Champaign's Research Park will house Cargill's newest Innovation Lab, where a team of data scientists and lab students will work directly with Cargill business leaders, operations teams and customers to find digital solutions to food and agriculture challenges.

Cargill employs 160,000 in 70 countries


 

FDA Releases GFI on New Animal Drugs

09/26/2019

On September 26th the U.S. Food and Drug Administration released a draft Guidance for Industry, entitled Eligibility Criteria for Expanded Conditional Approval of New Animal Drugs, to assist drug sponsors interested in pursuing conditional approval to market animal drugs specifically for life-threatening diseases or for an unmet animal or health needs. These drugs would otherwise require complex or particularly difficult or studies to demonstrate effectiveness.

 

Until recently, only new animal drugs intended for minor use in major species or for use in a minor species (MUMS) were eligible for conditional approval.  In 2018, as part of the reauthorization of FDA’s Animal Drug User Fee Act (ADUFA) program, Congress amended Section 571 of the Federal Food, Drug and Cosmetic Act (FD&C Act) to expand the FDA authority to grant conditional approval to include certain animal drugs for major species to treat diseases or conditions that would not be eligible for conditional approval under the MUMS provisions of the FD&C Act.  

 

Expanded conditional approval will incentivize drug development and provide Veterinarians with legally marketed new animal drugs to treat serious or life-threatening diseases or conditions and to fill treatment gaps where currently no therapies are available.


 

HatchTech Receives Award for HatchTraveller™

09/26/2019

HatchTraveller™ received the Supply Chain Innovation Award at the 2019 British Poultry Association Annual Meeting. Stefan Holdinga, Business Development Manager responsible for HatchTraveller™, commented "winning this award is recognition of our continuing search for innovations and improvements of our products. Worldwide our customers transport chicks using the HatchTraveller™ to provide an optimal micro-climate. I am very proud that we were able to reduce energy demand and to contribute to welfare and performance.” 

 

HatchTraveller™, is a unique concept using fresh outside air to cool at chick level applying laminar airflow technology to ensure that chicks are provided with a constant airflow to maintain an optimal temperature. This reduces energy demand and allows the HatchTraveller™ to use a hybrid power system to support ventilation and lighting. The battery is charged while driving and for longer distances a back-up generator is activated. With a capacity to transport up to 183,600 chicks per delivery, fewer journeys are necessary. This results in a much lower carbon footprint and an overall reduction in fuel costs of up to 80 percent.

 

This concept combined with fresh air and light at chick level ensures optimal conditions in every single basket during transport, ensuring health and welfare and delivering chicks of superior quality. The HatchTraveller™ can be configured to suit customer requirements using an online calculator.

 

 

 

Michiel van Veldhuizen  (third from left)– Sales Manager Europe


 

STOP PRESS

09/26/2019

Ratification of USMCA may Proceed despite Political Turmoil

 

Despite a preoccupation with political considerations, the Speaker of the House has stated that the process to ratify the USMCA should proceed. This sentiment is shared by U.S.Trade representative Amb. Robert Lighthizer who has campaigned on both sides of the Aisle for ratification.

 

Their recent comments are not supported by Wall Street concerns that debate and approval of the Agreement will be imperiled by an intensified investigation of the actions of the President. Analysts consider bipartisan collaboration on the USMCA and other legislation will be stalled until after the 2020 election.


 

Eat Better. Learn Better in Des Moines

09/26/2019

In a partnership with the Iowa Egg Council and the Des Moines Public Schools. Iowa Governor Kim Reynolds and Iowa Deputy Secretary of Agriculture Julie Kenney will address more than 300 school nutrition professionals at today’s session.

 

The Eat Better. Learn Better Celebration highlights a school district that has demonstrated an outstanding commitment to nutritional excellence and menu innovation. The event also aims to support the district’s efforts to educate the influencers in a student’s life — parents, teachers and school nutrition staff — about the importance of school breakfast nutrition to students’ well-being and academic success.

 


 

Eggland’s Best Supports Susan G. Komen Foundation

09/26/2019

In a September 24th Press release, Eggland’s Best announced the 10th consecutive year of support for the Susan G. Komen Foundation.

 

Charlie Lanktree, CEO of Eggland’s Best stated, “Breast cancer touches nearly American and we will continue to support research and education to help eradicate this awful condition.”  He added, “We are committed to helping make an impact on the globe goal of saving lives.”

 

Christina Alford, SVP of Development for Komen stated “Our partnership with Eggland's Best over the past decade has been crucial in supporting the fight to end breast cancer.  More than 42,000 women and men in the U.S. are expected to die this year from breast cancer, and that is unacceptable. Partners like Eggland's Best are helping save lives through their generous funding.


 

FDA Approves Smallpox Vaccine

09/26/2019

Although smallpox vaccination in the U.S. for the general public ceased in 1972 and the disease was eradicated worldwide in 1980 public health authorities considered it necessary to maintain a Strategic National Stockpile of smallpox and monkeypox vaccine.

 

FDA approved the Jynneos non-replicating vaccine to protect against both smallpox and monkeypox.  The vaccine is derived from a vaccinia virus closely related to but milder in pathogenicity than either variola (smallpox) or monkeypox viruses. Controlled trials showed that Jynneos vaccine was equivalent in stimulating immunity as the ACAM 2000 strain. Before the human study for effectiveness, the antigenicity of the Jynneos vaccine was demonstrated in non-human primates.  The safety of Jynneos was assessed in more than 7,800 volunteers, none of whom experienced other than a minor reaction at the injection site.

 

The application of non-replicating live vaccines should be extended to prevent both human and animal infections for the benefit of public health and livestock.

 


 

Food Companies Adopting the Mantle of Technology

09/26/2019

In an attempt to embellish company image and to facilitate funding, food companies are claiming to be “food platforms” according to the Overheard column in the September 24th edition of the Wall Street Journal. Sweet Green an upscale salad restaurant chain recently completed a funding round of $150 million.  The company is using technology, most of which is common to the QSR space to distinguish itself from competitors. Conveniences including smartphone apps, and advanced software to order ingredients, manage labor and forecast sales are common in the food industry.  Overheard correctly characterized the borderline deception as “employing technology doesn’t necessarily a technology company make.”


 

Consumer Confidence Index Declined in September

09/26/2019

The Conference Board issues a monthly Consumer Confidence Index.  The index declined from 134.2 in August to 225.1in September.  The Confidence Index comprises the Present Situation Index and an Expectations Index.  The former declined from 176.0 in August to 169.0 in September.  The Expectations Index that evaluates short-term outlook for income, business and labor declined from 106.4 to 95.8. 

 

Lynn Franco, Senior Director of Economic Indicators at the Conference Board attributed the decline to uncertainty and volatility associated with international trade.  She noted that, “While confidence can continue hovering around current levels for months to come, at some point this continued uncertainty will began to diminish consumers’ confidence in the expansion.”


 

National Mushroom Month Collaboration

09/26/2019

In recognition of National Mushroom Month in September, the National Mushroom Council invited The Incredible Egg to support the celebration with our “Eggsclusive” Egg and Mushroom Sandwich recipe shared across Twitter, and Instagram 


 

Third Egg Seminar in Mexico

09/26/2019

The third in a series of four egg and egg product seminars in Mexico was held last week in Aguascalientes. The AEB-sponsored event, hosted by USAPEEC Mexico, featured both technical and culinary presentations.

The event attracted 36 industry professionals from food processing and foodservice companies. The final seminar for this year will be held Nov. 19, in Monterrey. 

 


 

U.K. Consumers Still Exposed to Salmonella

09/24/2019

According to a September 20th report by the Bureau of Investigative Journalism, consumers in the UK are still at risk of Salmonella infection despite assurances by two agencies, namely the Department of the Environment, Food and Regional Affairs (DEFRA equivalent to the USDA) and Public Health England (equivalent to the CDC).

 

 Twenty-eight flocks tested positive for Salmonella (presumably S. Enteritidis and S. Typhimurium) in 2018 with twenty-five flocks year to date.  In addition consumers were exposed to salmonellosis from contaminated eggs emanating from Holland in 2017 and product infected with SE from Poland in 2018.

 

Concern over egg-borne Salmonella in the UK commenced in 1988 when Edwina Currie, then Junior Minister for Health commented to the press that “most of eggs produced in the UK are infected with Salmonella” This resulted in a precipitous drop in consumption.  The UK egg industry introduced the Lion Certification Program representing their version of an EQAP thereafter.  Notwithstanding efforts made by individual producers supplying packers, Salmonella remained a problem through 2001.

England faces two major problems with regard to suppression of Salmonella infection.  The first is that in response to public demand, most flocks are housed on either litter or on range.  The second deficiency is the absence of washing of shells before packing that is effective in removing contamination from the shell surface.

 

Slightly over 90 percent of eggs produced and marketed in the UK conform to the British Lion scheme providing a large measure of food security.  Notwithstanding this program, 10 percent of domestically produced eggs are not subject to a Salmonella quality program and are considered unsafe to eat without adequate cooking.  Public health authorities are continually applying traceback to identify infected flocks of origin.  This year a major packer, Friday’s was obliged to cease distribution following the disclosure that three supply flocks were contaminated with Salmonella (serotype not specified).  Given the quoted volume distributed, this plant was supplied by 1.8 million hens.

 

Apart from the need to impose a national Salmonella control standard embracing all flocks of over 1,000 hens, the UK industry should seriously consider egg washing in addition to existing vaccination and flock surveillance. Eggs from flocks contaminated with SE or ST should be diverted to breaking.  Public agencies should refrain from over-optimistic statements relating to consumption of raw and undercooked eggs being permissible. An injudicious comment by the head of the Food Safety Agency in 2018 that “Risk of Salmonella is now so low you need not worry” is contradicted by the incidence rate.


 

Boehringer Breaks Ground on New Vaccine Plant

09/23/2019

In mid-July 2018 Boehringer Ingelheim Animal Health announced their intention of erecting a state-of-the–art vaccine plant in the ZAC des Gaulnes development zone in Porte-des-Alpes near Lyon. The projected to cost will exceed $200 million. The facility will extend over 150,000 square feet and will create 100 skilled and professional positions. The development will complement a Research Center completed last year and a unit to manufacture avian vaccines to be completed in 2020.

The new plant will be completed in 2021 and will focus on production of foot and mouth and bluetongue disease vaccines in response to world demand. Production capacity will facilitate deployment of vaccines from banks to control outbreaks of catastrophic diseases of poultry and livestock.

The Boehringer Ingleheim R&D and vaccine production campus will incorporate the previously acquired Merial facilities located in the Lyon Gerland district.  


 

Walmart to Expand Delivery and Pick-Up

09/20/2019

The Walmart Delivery Unlimited service has expanded providing a subscription-based option for 14,000 stores during fall of 2019. Walmart will expand the program to 200 metropolitan areas where Walmart Grocery Delivery is offered, following successful tests in four metropolitan areas concluded mid-year.

Tom Ward, Senior Vice President of Digital Operations for Walmart noted “We have been investing in our online grocery business by quickly expanding our pickup and delivery service. Delivery Unlimited is the next step in that journey”. Ward added “By pairing our size and scale of these services, we are making Walmart the easiest place to shop”. During fiscal 2019, Walmart expanded same-day grocery delivery to 800 stores and offered free pickup in 2,100 stores in the U.S. By the beginning of 2020, free grocery pickup will be available at over 3,000 stores, and half this number will offer same-day delivery.

Delivery and pickup services can be accessed through <Walmart.com/grocery> or by using the Walmart grocery App. The Walmart Delivery Unlimited Service has an annual fee of  $98 or a monthly $13 subscription for orders of $30 or more. In comparison, Instacart Express membership is $99 annually for deliveries over $35. Target Shipt costs $99 for a yearly membership and $14 per month for unlimited deliveries with a $35 minimum. Amazon Prime costs $99 annually or $13 monthly for orders over $35.

Walmart and Target will ultimately benefit from operating their own services. The profitability of independent delivery services contracting to other chains is questionable especially if legislation enacted in California classifying “Gig” workers as employees spreads westward. It is evident that Walmart, Amazon and Target have established the price parameters for home delivery service.


 

Value of Neonicotinoid Seed Treatment Questioned

09/20/2019

Neonicotinoid insecticides are used widely to treat seeds to protect against arthropod pests. These compounds subsequently enter the tissues of crops and have been shown to have a deleterious effect on insect pollinators.

Scientists affiliated with a number of universities and institutes have evaluated the beneficial effect of seed treatment on soybean yield*. A series of 194 randomized and replicated field studies were conducted between 2006 and 2017 on the effect of neonicotinoid seed treatment in 14 states in the U.S. The study considered neonicotinoids alone or in combination with conventional fungicide seed treatment. The studies demonstrated that beneficial effects on yield  from neonicotinoids alone or in combination with a fungicide were negligible to minimal and were below break-even comparing cost of treatment with incremental revenue.

The authors of the peer-reviewed article questioned prophylactic application of neonicotinoids by producers and regulators.

*Mourtzinis, S., et. al., Neonicotinoid Seed Treatment of Soybean Provides Negligible Benefits to U.S. Farmers, Nature: Scientific Reports 9:Article 11217 (2019)

 


 

Vegan ETF Established

09/20/2019

Beyond Investing, obvious a name play on Beyond Meat is offered as a socially responsible ETF appealing to vegans and opponents of intensive livestock production.

The promoters of the ETF note that vegans and environmentalists can now benefit from investments that do not involve animal cruelty or environmental devastation. Fossil fuel industries and agricultural enterprises involving livestock are excluded from the portfolio.

The fund justifies its existence by noting that $1 million invested would indirectly spare 13,000 animals each year. There is however no justification for this highly questionable projection.

The composition of the fund is similar to any large-cap S&P 500 Index Fund including stalwarts such as Microsoft, Facebook and related technology and manufacturing companies.


 




















































































































































































View More
Top