Egg Industry News


Status of 2018 Corn and Soybean Crops

09/24/2018

The USDA Crop Progress Report released on September 24 th updated the status and condition of 2018 corn and soybeans. Corn is maturing at 72 percent of the crop, 19 percent over the 5-year average. Sixteen percent has been harvested.

Soybeans have completed setting pods consistent with good soil moisture and climate conditions. Seventy-one percent of the crop has started dropping leaves, 14 percent ahead of the 5-year average. Fourteen percent of the crop has been harvested

EGG-NEWS and CHICK-NEWS will report on the progress of the two major crops as monitored by the USDA during September and will continue posting updates through the end of harvest in October. WEEK ENDING

Crop Parameter (%)

September 16th

September 23rd

5-Year Average

Corn Emerged

Corn Silking

Corn Dough

Corn Denting

Corn Mature

Corn Harvested

100

100

93

54

9

100

100

93

54

9

100

100

86

36

11

       

Soybeans Emerged

Soybeans Blooming

Soybeans Setting Pods

Soybeans Dropping Leaves

Soybeans Harvested

100

100

100

53

6

100

100

100

71

4

100

100

100

57

8

       

 

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2018

Corn 2017

4

4

8

9

19

26

47

47

22

14

Soybeans 2018

Soybeans 2017

3

3

7

9

22

28

49

49

19

11

Soil Parameter

 

V. Short

 

Short

 

Adequate

 

Surplus

Topsoil moisture: Past Week

8

18

63

11

Past Year

14

30

53

3

Subsoil moisture: Past Week

10

20

61

9

Past Year

14

32

52

2

 


 

USDA Weekly Egg Price and Inventory Report, September 20th 2018.

09/20/2018
  • Hen Numbers in Production Increased 0.8 million to 320.0 million Continuing an Upward Trend
  • Shell Inventory down by 0.6 Percent From Previous Week
  • Generic Prices for Extra Large, Large and Medium Unchanged Compared to Previous Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on September 17th the Midwest wholesale prices for Extra Large, Large and Medium sizes were unchanged compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The September 17th USDA Egg Market News Report (Vol. 65: No. 38) documented a USDA Combined Region value rounded to the nearest cent, of $1.00 per dozen delivered to warehouses effective September 14th This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.91 per dozen. At the high end of the range, price in the South Central and Southeast Regions attained $1.04 per dozen. The USDA Combined Price last week was 41 cents per dozen below the three-year average and 1 cent per dozen below the corresponding week in 2017.


 


Cracker Barrel Reports on Q4 and FY 2018

09/20/2018

In a press release dated September 18th Cracker Barrel Old Country Store Inc. announced results for the 4th Quarter and Fiscal 2018 ending August 3rd 2018.

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)

4th Quarter Ending.

Aug. 3rd 2018

July 28th 2017

Difference (%)

Sales: (82 percent food)

$810,893

$743,226

+9.1

Gross profit:

$564,916

$525,844

+7.4

Operating income:

$82,771

$83,240

-0.6

Net Income

$61,354

$53,893

+13.8

Diluted earnings per share:

$2.55

$2.33

+9.4

Gross Margin (%)

69.6

70.8

+1.7

Operating Margin (%)

10.2

11.2

+8.9

Profit Margin (%)

7.6

7.5

+1.3

Long-term Debt:

$400,000

$400,00

nil

12 Months Trailing:

     

Return on Assets (%)

11.8

   

Return on Equity (%)

38.7

   

Operating Margin (%)

9.9

   

Profit Margin (%)

8.1

   

Total Assets

$1,527,355

$1,521,942

+0.4

Market Capitalization

$3,450,000

   

52-Week Range in Share Price: $141.63 to $179.12

Market Close Tuesday 18th $143.80 (-4.6 percent)

Forward P/E: 15.4 Beta 0.2

For FY 2018 Cracker Barrel generated net earnings of $247.6 million (up 3.5 percent over Q4 FY 2017) on sales of 3.03 billion (up 3.5 percent). EPS increased by 22.9 percent from $8.37 in FY2017 to $10.29 in FY 2018. CBRL is down 9.5 percent YTD.

Cracker Barrel missed revenue expectations of $825 million and EPS of $2.66 resulting in a sell-off. The short of float amounted to 20.4 percent on September 20th.

Cracker Barrel operates 660 locations which generated a 0.4 percent decline in same-store sales. The 3.5 percent lower same store traffic was partly offset by a 3.1 percent increase in transaction partly due to a 2.7 percent average increase in menu prices.

Commenting on the fourth quarter and full fiscal year results, Cracker Barrel President and CEO, Sandra B. Cochran said, "The softer sales trend we saw in May persisted throughout the quarter, leading to fourth quarter results that fell below expectations. Our traffic was challenged, particularly with lighter users and during the dinner daypart, some of which was attributable to our menu and marketing promotion not delivering the anticipated topline traffic and sales. While our results did not meet our expectations, I am confident that our initiatives and plans for fiscal 2019 will drive improved performance."


 

Additional H7 LPAI Cases in Stanislaus County California

09/20/2018

The third and fourth poultry flocks in Stanislaus County, California have been reported as presumptive positive H7 strain applying PCR assay according to authorities in California.  Samples from both flocks have been referred to the National Veterinary Services Laboratory (NVSL) in Ames IA. for confirmation and molecular characterization.  The third flock was confirmed positive for H7 strain AI by PCR on September 19th 2018 by NVSL.  

 

The third flock of 23,700 non-commercial mixed poultry (pastured chickens, ducks, and turkeys) was located within the 2-mile zone of the index flock of 26,000 turkeys diagnosed in Stanislaus County has been quarantined and hopefully confined to prevent further dissemination of AI virus.

 

The fourth flock of 116,000 commercial organic light seven week-old turkeys located within the 2-mile zone has been quarantined.

 

The index and second flocks have been depopulated. 

Stanislaus County, California

 

The cluster of LPAI cases, all with presumed outside access, based on reports of organic status demonstrate the vulnerability of flocks which are not confined to barns with netting to exclude wild birds.

 

Stanislaus County has a high population of commercial egg production and turkey growing flocks which would be at risk if wild bird reservoirs are present and if there are deficiencies in biosecurity. Further outbreaks may prejudice exports of poultry and products.

 


 

National Egg Products School

09/20/2018

The National Egg Product School was presented at the University of Georgia with sponsorship and contributions from the American Egg Board and the Egg Nutrition Center.  Topics included production, packing, marketing, egg functionality and attributes and safety.

 

The four-day event attracted attendees from the food service and egg industries.


 

AEB Sponsors Competition in Hong Kong

09/20/2018

The AEB sponsored a pastry competition during mid September in Hong Kong.  Contestants were given three hours to create four different types of éclair using U.S. table eggs, liquid eggs and dried egg products. 

 

Vivian Wong of the Shangri-La Hotel placed first in the competition.

 

For the period January through July Hong Kong was the leading importer of table eggs with 25.1 million dozen shipped valued at $24.7 million representing a unit price of $0.98 per dozen.

 

The American Egg Board is working in collaboration with USAPEEC to increase imports of egg products to countries in Asia.  Local demonstrations and competitions represent a significant promotional benefit for producers.


 

San Antonio Restaurant Source of Foodborne Infection

09/20/2018

Approximately 250 diners at the Pasha Mediterranean Grill in San Antonio reported clinical symptoms consistent with foodborne infection after dining at the restaurant over the Labor Day weekend.

 

Fourteen cases yielded laboratory-confirmed Salmonella infection with twelve hospital admissions.

 

According to the owner, problems were experienced with refrigeration following an electrical failure on September 2nd and the restaurant was closed for the two subsequent days. In May, the restaurant was cited by the Public Health Department for deficiencies relating to hand washing, improper storage of food and failure to train workers.  Previous inspections in 2017 disclosed violations including expiration of a food license.


 

Raw Milk Dairy Implicated in E. coli Infection

09/20/2018

Consumers of non-pasteurized milk purchased from Dungeness Valley Creamery were diagnosed with E. coli infection.  Accordingly the Washington State Department of Health has issued a warning to consumers although this action is questioned by the owners of the farm.  The dairy is supplied by 60 jersey cows on 38 acres and was certified as a raw milk producer in 2006.  The dairy was linked to an E.coli outbreak in 2009 and milk was recalled in 2013 after E.coli was determined in routine samples.  Raw milk is a vehicle for Salmonella, Campylobacter, Listeria and if herds are infected also with Brucella and Mycobacterium.

 

Scientific investigations have failed to reveal any specific advantage associated with raw milk over pasteurized milk.  Epidemiologic data confirms that the small proportion of raw milk consumed in the U.S. is responsible for an overwhelming proportion of milk-borne infections.


 

EGG-NEWS Welcomes OVO-Vision as a Sponsor

09/19/2018

OVO-Vision, located in Roermond, the Netherlands is an established provider of integrated production and financial software based on the Microsoft® Dynamics platform adapted for the egg and poultry supply chain.

OVO-Vision is based on the principle of collating and presenting information as an integral system allowing efficiencies in planning, production, tracing and control of costs.

Production software can be expanded to accommodate farms and flocks and can be integrated with feed production. Setup templates can be developed to schedule flock movement, vaccination, health monitoring and other management functions. Production data is entered using a smart phone or tablet and data can be retrieved and presented in both graphic and tabular form.

The software can be used to predict production levels given predetermined parameters and dates to accomplish both short- and long-term planning. Ovo-Vision can be combined with Ovo-Sales to prepare both marketing and financial budgets and to schedule inputs including packaging material, feed ingredients and pullet chicks.

Since the OVO-Vision system is integrated with accounting, it is possible to predict the return from a flock either as a simulation or to record actual performance.

Tracking of product in inventory is incorporated into the system integrated into financial reporting and allowing complete capability for trace-forward and trace-back.

OVO-vision incorporates electronic data integration involving production documentation and business transactions. EDI uses Microsoft dynamics NAV allowing unlimited access to data, documents and transactions. Data can be managed in-house on a company server or in the cloud.

OVO-Vision can be incorporated into the function of both Moba and Staalkat graders to balance production and to optimize efficiency. This is especially important for off-line plants. The software system takes into account customer specifications and labeling in relation to inventory.

Additional information on the OVO-Vision system is available on the company website which can be accessed by clicking onto the logo on the list of sponsors on the welcome page. 


 

Court Decision Places WOTUS on Hold

09/19/2018

According to the Texas Law Blog the U.S. District Court for the Southern District of Texas issued an injunction during the first week of September, setting aside implementation of the WOTUS rule in Texas, Louisiana and Mississippi. The Court deferred on extending the injunction to all states. Currently the 2015 WOTUS rule is under suspension in 29 states.


 

Origin of Listeria Contamination of Vegetables Identified

09/19/2018

Greenyard a processor of vegetables in Baja,Hungary, distributed widely in the E.U., has identified the source of Listeria contamination in their plant. Outbreaks have been reported in five E.U. nations and Australia resulting in 54 diagnosed cases with 10 fatalities.

E.U. investigators believe that the problem commenced in 2015 and was responsible for outbreaks of listeriosis in the E.U. attributed to frozen vegetables over three successive years.

According to Greenyard, contamination was detected in a blast freezer. Since Listeria is a psychrophile (cold-resistant bacteria), persistence in a blast freezer is possible but unlikely. Product would have been bagged and cartooned before passing through a blast freezer preventing direct contamination of product. It is considered likely that other locations of infection may exist in the plant including drains and work surfaces.

Officials of the Hungarian Food Chain Safety Office initiated a recall for specific products produced between August 13th 2016 and June 20th 2018. Given that the potentially contaminated vegetables are deep frozen, consumers may be at risk for an extensive period.

Greenyard noted that product currently conforms to a legal level of less than 10 cfu Listeria per gram. The Company maintains that it can achieve this standard by cleaning, disinfection and other procedures monitored by a structured program of sampling. It is noted that in the U.S., there is a zero tolerance for Listeria in any food product.


 

Cyclospora Outbreak Ended

09/19/2018

According to the Centers for Disease Control and Prevention, the outbreak of Cyclospora infection is at an end. The vehicle of infection was apparently Romaine lettuce included in pre-processed salads supplied by Fresh Express to McDonald’s outlets in the mid-West.

Identification of the vehicle of infection was expedited by development of a validated Cyclospora assay technique in early 2018 following three years of development.

A total of 511 confirmed cases were diagnosed with 24 hospitalizations. Cases were diagnosed in sixteen states commencing in May and extending through late July 2018.

The Illinois Department of Health posted an alert on July 12th and the following day McDonald’s stopped selling salads at 3,000 locations in 14 states. The FDA investigation was completed on July 26th, notifying Fresh Express of the presence of Cyclospora in an unused package of salad mix containing lettuce and carrots. The point of contamination was not identified.

The outbreak had further repercussions with Caito Foods having to recall pork and poultry wraps and salads as a result of contaminated Romaine lettuce as an ingredient in their product.

Cyclospora, a protozoan parasite results in recurrent gastrointestinal symptoms unless treated. Asymptomatic carriers may be involved in intrafamilial infection and in food service, emphasizing the need for personal hygiene.


 

Canada Wavering Over Protection of Dairy Industry

09/19/2018

For over 50 years, dairy and poultry farmers in Canada have benefitted from a controlled marketing system. Although the U.S. can export up to $500 million of dairy products duty free to Canada each year, tariffs of up to 300 percent are imposed on quantities above the TRQ.

The economic impact on consumers arising from the protection extended to dairy producers in particular is emerging as an issue in Provincial and Federal politics in Canada. Traditionally dairy producers concentrated in Ontario and Quebec have enjoyed political support to maintain the favored status of the industry. Consumers are however realizing that prices of dairy products are higher than they would otherwise be in a free-enterprise economy.

The shift in political support for controlled marketing may enable Canadian negotiators to make concessions on an important point of contention in NAFTA renegotiation. Resolution of the dairy issue is a deal breaker as emphasized by Secretary of Agriculture, Dr. Sonny Perdue and White House Economic Advisor Larry Kudlow.

Dairy Farmers of Canada representing producers is naturally implacable on concessions. Their political clout has been diluted as evidenced by the participation of Canada in both the CP-TPP free-trade deal with Pacific nations and with the E.U. CETA agreement.

Finalization of the August 27th agreement-in-principle with Mexico has placed greater pressure on Canada to concede on issues including the Chapter 19 dispute resolution procedure and “traditional cultural considerations”. Faced with threat of a 20 percent tariff on auto imports, it is most likely that Canada will agree to modifications to NAFTA as demanded by the U.S.

Realization that the controlled market situation in Canada is not sacrosanct, creates opportunities for increased exports of poultry and eggs to Canada and the possibility of investment by U.S. companies in the Canadian market. Due to the controlled market situation, egg production in Canada is confined to approximately 1,000 individual farmers with minimal integration and with minimal efficiency both in production and packing.

Hard bargaining by the U.S. on the dairy issue may benefit not only U.S. farmers, but also consumers in Canada.


 

Updated USDA Projections for 2018 and 2019 Egg Production

09/19/2018

The USDA Economic Research Service issued an updated September 18 th 2018 forecast of egg production unchanged from the previous August 16th report. The volume of eggs produced and per capita consumption in 2019 were increased by 1.7 and 0.8 percent respectively over 2018. Consistent with this disparity the benchmark New York price was reduced by 13.2 percent in unit value Production data reflecting 2016 and 2017 should be compared to 2015 which was impacted by the Spring outbreak of HPAI in the upper-Midwest. The latest data is reflected in the table below.

 

 

Parameter

2015

(actual)

2016

(actual)

2017

(actual)

2018 2019 Difference %

(projection) (forecast) 2018 to 2019

 

 

EGGS

       
 

Production (m. dozen)

6,938*

7,435

7,677

7,835 7,970 +1.7%

 

Consumption (eggs per capita)

255.8*

271.6

276.3

278.4 280.7 +0.8%

 

New York price (c/doz.)

182*

86

101

143 124 -13.2%

 

Source: Livestock, Dairy and Poultry Outlook - September 18th 2018

*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.


 

China Intends Claiming $7 Billion from the U.S. over Dumping Duties

09/18/2018

China cites a World Trade Organization (WTO) ruling in 2016 claiming that it has suffered $7 billion in damages annually as a result of imposition of dumping duties by the U.S. on Chinese-origin machinery, electronics and minerals.  The dispute dates back to 2013 and is based on the U.S. Department Commerce method of calculation of duties referred to as “zeroing” China complains that this approach accentuates the level of anti-dumping duties and was adjudged to be illegal by the WTO.

 

Adverse rulings against the U.S. by the WTO have prompted the Administration to question the impartiality of the dispute resolution process.  It should however be noted the WTO ruled in favor of the U.S. when authorities in China imposed anti-dumping duties on U.S.-origin broiler parts based on spurious AI claims.

 

The WTO dispute is being played out against an escalating trade war involving imposition of tariffs on products exported by both nations. Resolution of issues including fair trade, subsidized production by parastatal manufacturers in China and lack of compliance with rules governing intellectual property are issues in dispute.  Announcements of serial tariffs have resulted in disruption of trade between the world’s two largest economies and have caused severe losses by farmers who rely on export of commodities including corn and soybeans to maintain domestic prices.


 

Status of 2018 Corn and Soybean Crops

09/17/2018

The USDA Crop Progress Report released on September 17 th updated the status and condition of 2018 corn and soybeans. Corn is denting at 93 percent of the crop, 7 percent over the 5-year average. Half the crop is mature and nine percent has been harvested.

Soybeans have completed blooming and setting pods consistent with good soil moisture and climate conditions. Approximately half of the crop has started dropping leaves, 17 percent ahead of the 5-year average. Six percent of the crop has been harvested

EGG-NEWS and CHICK-NEWS will report on the progress of the two major crops as monitored by the USDA during September and will continue posting updates through the end of harvest in October.

WEEK ENDING

Crop Parameter (%)

September 9th

September 16th

5-Year Average

Corn Emerged

Corn Silking

Corn Dough

Corn Dent

Corn Mature

Corn Harvested

100

100

86

35

5

100

100

93

54

9

100

100

86

36

6

       

Soybeans Emerged

Soybeans Blooming

Soybeans Setting Pods

Soybeans Dropping Leaves

Soybeans Harvested

100

100

100

31

-

100

100

100

53

6

100

100

100

36

3

       

 

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2018

Corn 2017

4

4

8

9

20

26

47

48

21

13

Soybeans 2018

Soybeans 2017

3

3

7

9

23

29

49

48

18

11

 

Soil Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

9

19

63

9

Past Year

14

31

52

3

Subsoil moisture: Past Week

11

20

61

8

Past Year

14

31

52

3


 

Australian Eggs Recalled for SE

09/16/2018

According to a release by the Australian Associated Press on September 9th the New South Wales, Food Authority in Australia has announced that Glendenning Farms has initiated a recall as a result of Salmonella Enteritidis. To date 23 cases have been diagnosed in the Sydney metropolitan area traced back to “Eggz on the Run” Brand.

Decontamination of housing and equipment is possible with effort, but it is extremely likely that pasture will remain contaminated for a prolonged period. This case demonstrates the danger of operating free-range facilities where flocks can come into contact with pathogens disseminated by wild birds and vermin.

Salmonella Enteritidis is not endemic in the egg industry in Australia according to a report issued by the NSW Government1. Neither this document nor a report from the Australian Egg Council2 indicate vaccination as a recommended practice.

  1. NSW Egg Food Safety Scheme NSW/FA/FT178/1306
  2. Through-chain Salmonella Risk Identification 1RD121A
Free Range Reality

 

Votes on Agriculture Appropriations

09/15/2018

The Housed voted on Thursday September 6th to enter into conference with the Senate over appropriations for the USDA and the FDA.

 

Current appropriations expire September 30th with a tight legislative schedule before the deadline presuming an extension of funding.


 

Alabama Producer Subject of Salmonella Recall

09/15/2018

According to an FDA release dated September 8th, Gravel Ridge Farms in Coleman County Alabama was the subject to a Class 1 recall.  The FDA issued the recall following traceback to the farm. Reports confirm 14 diagnosed cases of Salmonella Enteritidis.

 

Affected product was produced between June 25th and September 6th and has a use-by date of October 31st.

 

Packed eggs were distributed in either 12-egg or 30-egg packs in Atlanta to farmers’ markets and natural foods stores.  In Birmingham, AL, Piggly Wiggly stores marketed the cage-free product.

 

Decontamination of pasture on which SE positive flocks have been housed would be difficult to biologically impossible.

 


 

AEB Motivates Delta to Serve Eggs

09/15/2018

Delta Airlines is adding a Protein Box featuring an Incredible Hard-Boiled Egg to its in-flight breakfast menu starting next month. The new menu item will be tested through December on all domestic flights over 900 miles.

The Incredible Egg logo on the in-flight menus, which are projected to net 132 million impressions during the three-month trial period. The idea for the promotion came from  Jim Sumner, president of USAPEEC a very frequent flyer on behalf of the poultry industry.

 

 


 

WEEKLY COMMODITY REPORT

09/14/2018

According to the September 13th 2018 WASDE Report #581, 81.8 million acres of corn will be harvested in 2018 to yield 14.83 Billion bushels. The soybean crop is projected to attain 4.69 Billion bushels from 88.9 million acres harvested. The increased production is based on projections of higher yields resulting in larger ending stocks. This is reflected in lower CME prices as posted.

 

Quarterly corn and soybean stocks were estimated by USDA in a release on June 29th to total 5.3 Billion bushels (36.2 percent of 2017 harvest) and 1.2 Billion bushels (27.3 percent of 2017 harvest) respectively.

 

The following quotations for the months as indicated were posted by the CME at close of trading on September 14th together with values for the corresponding months in parentheses.


 


USDA Weekly Egg Price and Inventory Report, September 13th 2018.

09/13/2018
  • Hen Numbers in Production Increased 0.8 million to 319.2 million Continuing an Upward Trend
  • Shell Inventory up by 1.5 Percent From Previous Week
  • Generic Prices for Extra Large and Large Were Down 8.0 Percent on Average Compared to Previous Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on September 10th the Midwest wholesale prices for Extra Large and Large sizes were respectively lower by 8.0 percent and 8.1 percent. Mediums were lower by 15.0 percent compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The September 10th USDA Egg Market News Report (Vol. 65: No. 37) documented a USDA Combined Region value rounded to the nearest cent, of $1.08 per dozen delivered to warehouses effective September 8th This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.99 per dozen. At the high end of the range, price in the South Central Region attained $1.14 per dozen. The USDA Combined Price last week was 40 cents per dozen below the three-year average and 5 cents per dozen above the corresponding week in 2017.


 


Kroger Reports on Q2 of FY 2018

09/13/2018

In a press release dated September 13th The Kroger Company (KR) announced results for the 2nd Quarter of Fiscal 2018 ending August 18th 2018.

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)

Quarter Ending.

Aug. 18th 2018

Aug. 12th 2017

Difference (%)

Sales:

$27,869,000

$27,597,000

+1.0

Gross profit:

$5,939,000

$5,988,000

-0.8

Operating income:

$549,000

$684,000

-19.7

Pre-tax Income*

After-tax Income

$628,000

$508,000

$540,000

$351,000

+16.3

+44.7

Diluted earnings per share:

$0.62

$0.39

+59.0

Gross Margin (%)

21.3

21.6

-1.4

Operating Margin (%)

2.0

2.5

-20.0

Profit Margin (%)

1.8

0.9

+100.0

Long-term Debt:

$12,121,000

$13,100,000

-7.4

12 Months Trailing:

     

Return on Assets (%)

4.9

   

Return on Equity (%)

55.2

   

Operating Margin (%)

2.3

   

Profit Margin (%)

2.9

   

Total Assets

$36,957,000

$36,600,000

+1.0

Market Capitalization

$22,750,000

   

*includes the proceeds from the sale of Ocado valued at $216 million.

52-Week Range in Share Price: $19.69 to $32.70

Market post-release, noon September 13th $28.53

Forward P/E: 12.6. Beta: 0.83

Same-store sales excluding fuel were 1.6 percent higher for Q2 2018 compared to Q2 2017. Digital sales increased 50 percent over a presumably small base.

Chairman and CEO Rodney McMullen commented "We are only two quarters into our three year Restock Kroger plan, and we are making solid progress. Kroger customers have more ways than ever to engage with us seamlessly through our recently-launched Kroger Ship, expanded availability of Instacart, successful ClickList offering, and selling Simple Truth in China through Alibaba's Tmall. He added "we feel good about our net earnings per diluted share and ID sales results in the second quarter. We expect our investments in space optimization during the first half of 2018 to become a tailwind late in the third quarter".

He concluded "we are on track to generate the free cash flow and incremental FIFO operating profit that we committed to in Restock Kroger for 2018-2020, and to deliver on our long-term vision to serve America through food inspiration and uplift."


 

USDA-WASDE FORECAST #581 September 13th 2018

09/13/2018

OVERVIEW

The September 13th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on actual planting data, crop progress with monitoring by "scouts", long-range weather forecasts and historical records. Harvest areas for corn and soybeans were retained from the July-August projections at 81.8 million acres (83.1 million in 2017) and 88.9 million acres, (89.5 million acres in 2017) respectively.

The USDA raised corn yield by 1.6 percent to 181.3 bushels per acre (175.4 bushels in 2017). Soybean yield was raised 2.3 percent to 52.8 bushels per acre (49.5 bushels in 2017).


 


Export of Shell Eggs and Products January-July 2018.

09/13/2018

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January-July 2018 with the corresponding period in 2017:-

PRODUCT

Jan.-July 2017

Jan.-July 2018

Difference

Shell Eggs

     

Volume (m. dozen)

66.3

63.3

-3.0 (-4.5%)

Value ($ million)

63.3

75.2

+11.9 (+15.8%)

Unit Value ($/dozen)

0.96

1.19

+0.23 (+24.0%)

Egg Products

 

 

 

Volume (metric tons)

24,921

19,120

-5,801 (-23.3%)

Value ($ million)

64.3

69.0

+4.7 (+7.3%)

Unit Value ($/metric ton)

2,580

3,609

+1,029 (+39.9%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS IN JANUARY-

JULY 2018 COMPARED WITH JANUARY-JULY 2017

Source USDA-FAS/USAPEEC


 


Whole Foods Workers Investigating Unionization

09/12/2018

Workers at 490 stores under the Whole Foods Market banner have been urged to participate in a drive for union affiliation. The group noted the desire to “collectively voice our concerns to Whole Foods Market and Amazon leadership.”

The movement follows protests and strikes in Germany, Spain and Poland in late July demanding that Amazon provide health benefits, job safety and improved pay and working conditions.

The move towards unionization in Whole Foods Market is supported by the Retail, Wholesale and Department Store Union and efforts have been intensified since acquisition by Amazon.

A point of contention is that workers are no longer eligible to receive stock options although it is alleged that store manager are still participating in a program established in 1992. Workers regard this potentially discriminatory policy as “insulting and unethical”.


 

CTB Inc. Appoints Chief Marketing Officer

09/12/2018

In a September release, CTB Inc. announced that Jack Stanbaugh has been named Chief Marketing Officer for the Company. He will be responsible for all marketing-related activities and collaboration with the CTB business units on strategy.

Previously, Stanbaugh served as VP and GM of a composites business serving the RV industry.

He holds degrees in business administration from a Geneva College, PA. and a Master of  Business Administration from the Kellogg Graduate School of Management, University of Chicago.


 

REVIEW OF AUGUST PRODUCTION STATISTICS AND COSTS.

09/11/2018
  • August 2018 USDA Ex-Farm Benchmark Price down 10.2 Percent from July Consistent with Seasonal Trends.

  • Production Cost Down 0.1 Percent (61.4 Cents per dozen, August) with Feed Cost Lower by 0.2 Percent.

  • Positive Nest-run Margin Decreased 26.7 percent from July to 23.6 Cents per Dozen

     

    INTRODUCTION.

    Summary tables for the latest USDA August 2018 statistics and prices made available by the EIC on September 11th are arranged, summarized, tabulated and discussed in comparison with values from the previous August 11th 2018 posting reflecting July 2018 data.


 


Cost of Foodborne Outbreak

09/11/2018

In recent study economists at Johns Hopkins University determined that the cost of a single foodborne illness outbreak at a restaurant could range between $4,000 and $2.5 million.  The magnitude of loss is a function of the extent of infection, the pathogen involved, the vehicle of infection, the value of the brand and whether the chain concerned is publically quoted.

 

In addition to compensation, losses accrue from decontamination, disruption of the supply chain, interruption of business, loss of goodwill, the need to retrain employees, compensation to patients and legal fees.

 

It is obvious that the Johns Hopkins calculation does not take into account the effect of multiple foodborne outbreaks such as experienced by Chipotle Mexican Grill which loss approximately 50 percent of equity in over a year following salmonellosis, E. coli and norovirus infections.

 

The magnitude of losses is also a function of the response of a company to an outbreak including crisis control, and the use of social media.

 


 

USPOULTRY Updates I-9 Training Program

09/11/2018

In response to changes in Federal requirements, USPOULTRY has updated the training program for employment eligibility and completion of the I-9 form.

 

According to a September press release, the program comprises a narrated slide video and a PDF.

 

The program is available free of charge to USPOULTRY members.  Non-members may order the program for $200 www.uspoultry.org/training


 

China Reluctant to Provide Samples of H7N9 Avian Influenza

09/11/2018

U.K. Media report that China has refused to supply samples of H7N9 avian influenza, responsible for mortality among the human population in that country.  Apparently a sample was provided in 2016 but since that time the virus has obviously undergone mutation.

 

The Director of the Worldwide Influenza Center located in London stated that vaccines could be created using available gene sequencing but the effectiveness of a vaccine would be enhanced if scientists had access to the current strain of the virus.

 

Scientists including Dr. Ian Jones of the University of Reading expressed the opinion that it would be preferable to have samples of the virus available to prepare an inactivated vaccine in anticipation of a pandemic.

 

An infectious disease specialist at Harvard Medical School, Dr. Michael Callahan was quoted in the New York Times as stating, “Jeopardizing U.S. access to foreign pathogens and therapies to combat them undermines our nation's ability to protect against infections which can spread globally within days.”

 

Avian influenza strain H7N9 emerging in 2013 and has resulted in 1,600 diagnosed cases with 600 fatalities, attesting to the virulence of the virus in susceptible humans.


 

Rare Salmonella Identified in Western Europe

09/08/2018

Five E.U. nations have reported a combined total of 50 cases of Salmonella Mikawasima.  Cases have been identified in Germany, Sweden, Denmark, Austria and Czech Republic.  Apparently isolates are homogenous applying whole genome sequencing.  Previously outbreaks have occurred in Norway (2012), and the U.K. (1992).  According to Food Safety News 22 cases were reported between 2006 and 2016.

 

It is presumed that the infection is associated with contaminated food with the vehicle yet to be identified.


 

July Eggs-Broken Report

09/07/2018

The USDA Egg Products Report documents a six percent increase in eggs broken during July 2018 at 203.6 million dozen compared to July 2017 at 191.3 million dozen. The corresponding production of edible products amounted to 261.4 million pounds, six percent above the 246.5 million pounds produced in July 2017.

The cumulative seven-month production of edible product amounted to 1,769 million pounds, one percent higher than for the first seven months of 2017 at 1,751 million pounds.


 

Publix to Establish NC Distribution Center

09/07/2018

Publix Supermarkets will construct a distribution center in Greensboro, NC during 2020. The proposed facility will create up to 1,000 new jobs according to NC Governor Roy Cooper.

 

The 1.8 million square foot DC will service Publix stores in North Carolina and Virginia where there are 38 and 10 locations respectively.


 

Alltech Ideas Conference, 2019

09/07/2018

Alltech has announced that the annual Ideas Conference for 2019 will take place in Lexington, KY from May 19th through 21st.

Information on registration is available at one.Alltech.com.


 

World Egg Day

09/07/2018

The International Egg Commission has announced that Friday, 12th October 2018 has been designated World Egg Day. The Organization has arranged for promotional activities including publicizing the health benefits of eggs for longevity and child development.

Julian Madeley, CEO of the World Egg Organization stated “On World Egg Day, we want to generate targeted messages highlighting specific  benefits for key consumer groups.” Madeley confirmed that eggs have the potential to impact health by providing essential protein and other nutrients.

World Egg Day will be marked by dedicated events and publicity in social media and conventional channels.


 

Alltech Ideas Conference Goes Global

09/07/2018

Selected presentations from the One Ideas Forum presented in 2018 will be available to audiences in 13 countries in 15 locations.

According to a September 4th press release, attendees will learn from industry experts on trending topics and advances in digital technologies.

Dr. Mark Lyons, President and CEO of Alltech stated “The Alltech One Ideas Forum global event program will be a reflection of One: The Alltech Ideas conference.” He added “It will be customized to local audiences while bringing big ideas to the forefront.” The Alltech Ideas Forum will take place in Europe, the Middle East, Asia and North America.

For additional information, access go.alltech.com/one-ideas-forum


 

Argentina Imposes Strict Fiscal Restraints

09/06/2018

The Government of Argentina has announced that a 4 percent tax will be imposed on grain exports effective October 3rd. This action together with export taxes on other items and intensified austerity will be imposed. Argentina is negotiating a $50 billion emergency loan from the International Monetary Fund to maintain the functions of the Government.

It is intended to lift the export taxes when the financial situation becomes more stable. Currently, inflation is running at 20 percent, and the Argentina Peso has declined against the U.S. dollar by 50 percent year to date.

It is not anticipated that Argentina will obtain any higher price for their corn and soybeans with prices determined by international markets. Exporters have the advantage of receiving payment in dollar currency protecting them from peso devaluation.


 

Jamaica Broilers Purchases Georgia Feed Mill

09/06/2018

According to news reports, Jamaica Broilers has purchased the feed mill previously operated by Crystal Farms. The plant can  produce 5,000 tons of feed each week and employees 30.

Vice President of Finance for Jamaica Broilers Group, Ian Parsard noted “As we continue to grow our operations in Jamaica, USA and Haiti, this acquisition is a strategic step for our U.S.  operations.” He added “We are adding a feed mill to the existing breeder operations which produce fertile hatching eggs and hatchery operations in Iowa and Pennsylvania. The primary synergy is the control over the feed supplies required for our existing breeder operations located in both North and South Georgia.”


 

Kroger Expanding Home Delivery

09/06/2018

In partnership with Instacart, Kroger has extended home delivery to more than half the areas in which it operates in the U.S. By the end of October, Kroger anticipates serving up to 100 metropolitan markets with 1,500 stores offering same-day delivery and expedited two-hour service. Customers will be able to order using the supermarket website or a mobile app.


 

E.U. Authorities Identify Deficiencies in Salmonella Detection By Producers

09/03/2018

In 2015, E.U. health authorities identified numerous outbreaks of Salmonella Enteritidis (SE) among consumers traced back to egg farms in Poland. An audit team organized by the E.U. Director-General of Food and Safety conducted a two-week audit in Poland to evaluate Salmonella national control programs involving broiler, turkey and table egg production.

Recent official sampling for SE yielded a recovery rate approximately 100 times higher than individual companies denoting an egregious deviation from acceptable laboratory practices. Effectively the companies concerned were “looking to not find” Salmonella. Official samples detected Salmonella in 3.2 percent of flocks versus 0.03 percent from company samples. Laboratories in Poland required three weeks between obtaining samples and providing a serologic identification.

Authorities in Poland have now imposed standard procedures to ensure that in future adequate sensitivity is incorporated into Salmonella surveillance of flocks. In the U.S., certified laboratories conform to the requirements and procedures issued by the National Poultry Improvement Program.

The situation in Poland contrasts sharply with the U.K. British Lion certification program which is essentially similar to the most stringent of the U.S. EQAP regulations.


 

Stop Press

08/30/2018

The following breaking items  will be reviewed in greater detail in upcoming editions of EGG-NEWS and CHICK-NEWS:-

 

  • Campbell Soup to Sell Fresh Food and International Businesses: In order to pay down debt amounting to $9.6 billion the Board of Campbell soul has announced the intention to divest Bolthouse Foods and international brands would be sold. It is doubtful whether this step (a la Sears Holdings) will restore debt to about $3 billion. Outside investors are calling for an outright sale of the Company. It is noted that 41% of equity is in the hands of members of the Dorrance Family and descendants.
  • BSE Case Diagnosed in Florida: The sixth case of atypical, presumably spontaneous BSE (“Mad Cow Disease”) since 2003 has been diagnosed in a 6-year old cow consigned to an abattoir wit nervous signs. It is evident that a combination of ante-mortem clinical observation and laboratory assay protects consumers. No product for the animal was released.
  • Salmonella Outbreak Attributed to Empire Kosher Brand Chicken: The CDC investigated 16 cases of salmonellosis involving 16 cases extending from September 2017 through June 2018. One fatality and 8 hospitalizations were attributed to Salmonella I 4(5) 12:i: . There is no recall but consumers have been advised to destroy frozen chicken produced during the period of concern. This outbreak identified by a combination of sensitive databases and whole genome sequencing is reminiscent of the 50+ Salmonella Braenderup cases identified over 6 months attributed to eggs from a specific complex
  • Trade Talks: Following agreement with Mexico on issues relating to renegotiation of NAFTA, progress with Canada appears to be imminent. Canadian Prime Minister Trudeau has however stated that ”no agreement is better than a bad agreement”. In contrast there is absolutely no progress in resolving a rapidly escalating conflict with China. Both parties are imposing tit-for-tat tariffs amounting to tens of billions in dollar value.  

 

USAPEEC Achieves Restoration of Egg Liquid Exports to Korea

08/28/2018

Following extensive negotiations undertaken by USAPEEC in cooperation with the USDA FSIS, the Korean Ministry of Food and Drug Safety has revised specifications and requirements for importation of 16 egg products from six nations including the U.S.

Importation of egg liquids from the U.S. ceased on January 13th.

The efforts of USAPEEC are to be commended since Korea represents an important potential market for egg liquids.

During the period January through June 2018, South Korea imported 951 metric tons of egg liquids valued at $4.7 million. For the corresponding first half of 2017, Korea imported 4,199 metric tons valued at $9.1 million. In that year, Korean imports amounted to 19 percent of U.S. exports attaining 21,670 metric tons equivalent to 16 percent of export value of $55.7 million.


 

USAPEEC to Host Africa Trade Mission

08/28/2018

USAPEEC will host the 2nd Africa Trade Mission in Cape Town during the first week of September. It is anticipated that buyers representing 50 companies from 10 nations in sub-Saharan Africa will attend the event. Twenty members of USAPEEC will participate in the trade mission.


 

Dr. Sharon Williams Retires

08/28/2018

Dr. Sharon Williams, most recently the USDA-APHIS attaché in New Delhi has retired after a 20-year career with the USDA. Dr. Williams graduated from Louisiana State University School of Veterinary Medicine and undertook an assignment in the Peace Corps. She then joined USDA and has completed assignments in Afghanistan, Iraq, Brazil and Egypt assisting local producers and serving as a significant early warning monitor of diseases in the nations where she was assigned.

Dr. Williams provided valuable assistance in efforts to open the market in India to U.S.-origin poultry.


 

Nutrient Requirements of Poultry to be Revised in New Edition

08/28/2018

The National Academies of Sciences, Engineering and Medicine will sponsor a new edition of Nutrient Requirements of Poultry.

Ten committee members have been appointed to undertake the revision which will require up to 800 hours for each participant in reviewing reports and publications. The process will take four years including extramural review at a cost estimated at $500,000. Funding will be provided by the National Academy, commodity associations, research foundations and USDA-ARS.

A criticism of previous editions of the nutrient standards was that only peer-reviewed publications would be considered. Since the last edition, considerable progress has been made, mainly by primary breeders, especially in egg, turkey and broiler nutrition, based on in-company studies many of which were not published being proprietary in content. It is hoped that the Committee will diverge from precedent and take into account reports and studies which although not published, rise to the level of peer-reviewed articles.

The proposed revision will also benefit from extensive studies conducted on ingredients to determine nutritional value given advances in technology and processing.


 

Kroger to Ban Plastic Check-out Bags

08/28/2018

Kroger has announced that it will ban plastic bags through all banners in their entire chain of supermarkets by 2025.

The Company estimates that transition from single-use bags will eliminate 123 million pounds of waste annually. Ultimately Kroger will eliminate plastic bags for produce and meat following trends in the E.U. The QFC subsidiary in the Pacific Northwest will be the first Kroger division to eliminate bags by 2019.


 

Dr. Pearse Lyons to Posthumously Receive Muhammad Ali Humanitarian Award

08/28/2018

Dr. Pearse Lyons, founder of Alltech, will posthumously receive the Muhammad Ali Humanitarian Award for Lifetime Achievement at the 6th Annual Humanitarian Awards Ceremony to be held September 20th at the Omni Louisville Hotel, Louisville, KY. The Muhammad Ali Humanitarian Awards were created in 2013 to recognize individuals driven to become agents of change.

Dr. and Mrs. Lyons established the Alltech ACE Foundation, a 501(c)(3) nonprofit to support charitable projects. These include the Sustainable Haiti Project supporting primary schools through the sale of Alltech® Café Citadelle. The Alltech ACE Foundation has funded science laboratories for primary schools, the Alltech Vocal Scholarship Competition and numerous scholarships.

Dr. Lyons passed sadly on March 8th to be succeeded by his son, Dr. Mark Lyons, who will accept the award during the ceremony.


 

FDA to Reevaluate Heavy Metal Contamination in Foods

08/28/2018

Following recent publicity generated by Consumer Reports the Food and Drug Administration will reevaluate the levels of arsenic, lead, cadmium and mercury in specific foods.

 

Consumer Reports has developed its own non-scientific evaluation of levels of heavy metals as “measurable”, “concerning” “worrisome” and similar meaningless and non-quantifiable terms.  It is emphasized that with advances in analytical technology, extremely low levels of heavy metals can now be detected and quantified although they may have no biological significance.  As Consumer Reports operates on the principle that the sensitivity of analytical equipment is a justification to published reports which include the qualifications and interpretation of a responsible scientist. Consumer Reports generates anxiety and concern among their readership with respect to the microbiology and chemical content of food, further amplified by social media commentators. 

It is a biological reality that heavy metals are present in all soils and will obviously be incorporated into plants which then enter the food supply. Consumers who purchase USDA Certified Organic vegetables and fruits believe that they are avoiding heavy metals. The USDA-AMS Certified Organic Program does not have any requirement for analysis and relies on audits of paperwork. There is no assurance that the levels of heavy metals in Certified Organic products are at levels lower than conventional products.

 

Dr. Conrad Choiniere director of the Office of Analytics and Outreach at the FDA Center for Food Safety and Applied Nutrition will initiate a program of analysis with specific reference to foods consumed by infants and young children.

 

The FDA has amassed considerable data on domestic and imported products as part of a Total Diet Study based on foods representing the American diet.  Although levels of heavy metal contamination may be low in any specific food, there is concern that overall exposure is accumulative.

 

When more is known about the heavy metal levels in specific foods, appropriate dietary recommendations can be made.  In addition, growers and processors can possibly effect changes which may reduce contamination with the four principal heavy metals.


 

BioChek Offers PCR Manual

08/28/2018

Bio Check has made available a concise guide to the principles and application of PCR technology for diagnosis of poultry diseases.  The ten-page manual can be downloaded with registration by accessing www.biochek.com


 

Chipotle Undertakes Extensive Food Safety Training Program

08/27/2018

Reeling from the 2015 multiple outbreaks of foodborne infection and the 2017 norovirus outbreak in Virginia, Chipotle Mexican Grill has undertaken an extensive program of reeducation of managers and workers.  The recent initiative was prompted by the outbreak of Clostridium perfringens infection affecting over 600 customers of a store in Powell, OH. near Columbus.

 

Clostridium perfringens is a rare food-borne infection in humans. The pathogen was responsible for enteritis and death in survivors of concentration camps provided with a surfeit of food following liberation (“brand derm”).  The condition occurs sporadically among native tribes in Papua-New Guinea following seasonal over-consumption of pork at tribal gatherings.

 

The pathogen is responsible for enterotoxemia in poultry resulting in necrotic enteritis in broilers among other conditions.

 

CEO of Chipotle, Brian Niccol stated that the company will “be adding to our daily food safety routines and recurring employee knowledge assessment of our rigorous food safety standards”. In 2017 Chipotle organized a chain-wide stand-down to re-educate workers on hygienic procedures. Following previous food-borne outbreaks the company invariably states that it has a zero-tolerance policy for violations of food safety standards. This assertion is wearing thin.


 

Mexico Defers Restriction on U.S.-Origin Washed Eggs

08/27/2018

According to a posting in the August 20th edition of USAPEEC MondayLine, the Federal Commission on Sanitary Risk Prevention of the Government of Mexico has published a note in their Federal Register that enforcement of NOM-159 has been deferred for a year.  The proposed regulation for eggs and egg products published in January 2018 would have banned eggs subject to washing according to USDA guidelines, which is a universal practice in the U.S., based on food safety.

 

The one-year delay will enable the Commission on Sanitary Risk Prevention to review scientific data relating to the advantages of egg washing which is critical to preventing Type B and C Salmonella infection among consumers of shell eggs.

 

In a letter addressed to the USAPEEC from the Mexican Federal Commission, included the statement (as paraphrased), “The current view of the Commission proposes that washing eggs will be optional and if washed product complies with other provisions to prevent compromising the safety of table eggs and thus prevent risks to public health, the main goal of the Commission is satisfied”.

 

The E.U. does not generally allow washing of eggs claiming that this removes the “bloom” (outer cuticle of the shell) thereby reducing the capability of the shell to resist penetration by pathogens.

 

In point of fact, washing soon after oviposition is beneficial with respect to food safety.  This is evidenced by the reduction in cases of egg-borne Type B and C salmonellosis following mandatory egg washing in the U.S. Fecal contamination which is inevitable with any production system is effectively removed providing that the suggested range of temperature, pH of wash solution and concentration of sanitizer is maintained.

 

The response by authorities in Mexico to submissions by USAPEEC denotes the diligence of the professionals in the organization and the high regard in which they are held by our trading partners.


 

Ryan Bennett to Head U.S. RSPE and IPWA

08/27/2018

According to an August 20th USPEA press release, Ryan Bennett has been selected to serve as executive director for the U.S. Roundtable for Sustainable Poultry and Eggs and the International Poultry Welfare Alliance.

 

In commenting on his appointment Bennett stated, “The poultry and egg value chain have an amazing animal care and sustainability story to share with the world.”  He added, “In order to reach our full potential, we need the entire food chain – from farm to fork – to pull together to define success, evaluate against common benchmarks and communicate our progress in a meaningful and transparent way.”

 

Previously Bennett was the senior director of Industry and Environmental Affairs at the National Milk Producers Federation. He has also worked at the National Grain and Feed Association involved in issues related to conservation.


 












































































































































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