Editorial

 

USDA Program to Develop Beginning Farmers and Ranchers

Jan 31, 2015
    

EGG-CITE frequently criticizes the USDA for wasting funds on support programs which encourage non-commercial and subsistence agriculture which are unsustainable and unprofitable. On occasions the Department develops truly beneficial initiatives.

On January 12th the USDA announced the availability of $18 million in funding for the Beginning Farmer and Rancher Development Program (BFRDP). According to Deputy USDA Secretary Krysta Harten, this program is “critical for cultivating the next generation of farmers and ranchers and will be integral to sustaining American agriculture for the future.” 

The program awards grants to organizations to implement training for apprentice farmers and ranchers.  Entities eligible for grants include  cooperative extension services, community-based non-governmental organizations, colleges or universities, state tribal and local networks and joint public-private entities.

Five percent of the funds must go to projects that serve military veterans, beginning farmers and ranchers and an equal percentage to projects that serve socially-disadvantaged trainees.  Applicants are required to provide funds or in-kind support equal to 25 percent of the Federal funds requested. The USDA has established priority topics which include basic livestock management, business training, marketing strategies and farm safety and awareness.

The egg production industry can only expand with trained workers at all levels of supervision and management.  Traditionally Land Grant universities have supplied most of the entrants to the industry at middle and upper management.  There is a need for practical training in stockmanship and routine procedures required to produce and pack eggs.  It is hoped that some of the Land Grant colleges can introduce combinations of distance learning and limited residency to provide entrants to the industry with basic training leading to either an associate degree or diploma. 

Many nations operate agricultural-school systems which involve a combination of classroom instruction, demonstrations and actual field work.  It is normal for even the sons of farmers to attend agriculture colleges for two years before returning to their home farms. Many aspirant young farmers undertake employment in agriculture to gain experience after completing their training before assuming responsibility for a family farm. 

With the expansion of contract production especially for non-confined and organic flocks, the industry will require younger farmers capable of managing units with up to 30,000 hens and involving a capital investment of $1 million.

The USDA is to be commended for the program to train aspirant farmers.

   

Egg Industry News

 

California Cage Space and Density Requirements

Jan 30, 2015
    

With reference to recent news reports relating to California AB 1437 EGG-CITE is indebted to Dr. Tomas Bowen who has correctly pointed out that while we loosely refer to "116 square inches per hen" Section 1360 Title 3 is specific for bird space in relation to number of hens per enclosure (cage) as per Regulatory Action Number 2013-0322-04S.

The following relationship of hen number to floor space is scheduled:-

One bird per enclosure requires 322 Sq Inch per bird

Two    205
Three 166
Four 146
Five 135
Six 127
Seven 121
Eight 117
Nine Plus      116
   
 

Weekly USDA Prices and Inventory, Week ending January 25, 2015

Jan 30, 2015

     

The market moved upwards during the past week after the downward trend of the previous month. An 11 percent increase was recorded in Extra Large and Large sizes with Medium mobbing up 18 percent. Although old flocks held in production have now been depleted there are an equivalent number of pullets coming into production.

Patterns of placement, molting and depletion of flocks are returning to traditional levels. The total national stock of generic eggs rose by 0.9 percent this past week following the 11.0 percent recorded last week, suggesting a more favorable balance between supply and increased demand. Total stock comprised 1,324 thousand cases on Monday 26th January comprising 78 percent shell eggs compared with 77 percent for the previous week.

Eggs broken this past week declined 4 percent to 1.506 million cases. Concurrently the proportion from in-line complexes increased from 53.9 percent to 55.1 percent suggesting redirection of eggs produced off-line from breaking, to the shell-egg market. The price of breaking stock delivered to Midwest plants advanced 14 percent to a price range of 57-59 cents per dozen. Checks increased 10 percent to a range of 39-45 cents per dozen.

Specialty egg inventory was up by 0.9 percent but with organic stock down by 3.7 percent to 36.7 percent of the total.

 “California Compliant” eggs were shipped to the state at a considerable premium over Midwest commodity prices. The effect of Proposition #2 within California and AB 1437 in supply states can be seen in the following comparison of prices (cents per dozen) for eggs in cartons delivered to stores in the Western and Eastern major metropolitan markets during the past week:-

   
 

HPAI Diagnosed in California Turkey Farm

Jan 26, 2015

    

The USDA-APHIS has confirmed a diagnosis of avian influenza in a flock of turkeys belonging to Foster Farms in Stanislaus County, California. The initial isolation of the virus was performed in the Turlock Laboratory of the CAHFS and was characterized  as an H5N8 strain by the National Veterinary Services Laboratory in Ames, IA. This strain has been isolated from migratory waterfowl along the Western Flyway in recent weeks.

According to press reports Foster Farms is cooperating with Federal and State officials to destroy the flock. A significant challenge will be to limit possible extension of the infection which may have spread from the farm during the incubation period. Flocks may shed virus before demonstrating clinical signs of disease. Common feed mills with their delivery vehicles serving multi-species poultry operations or different integrations represent critical points for dissemination of infection.

Foster Farms has implemented a monitoring program for avian influenza since the outbreak of low-pathogenicity H1 strain AI in 2001. Appropriate surveillance has been initiated in terms of OIE mandates.

The USDA has informed the OIE and trading partners of the outbreak of a Class A disease. It is hoped that importers of poultry products from the U.S. will accept the principle of regionalization and also allow transport of shipments of raw chicken in sealed containers through California to export ports.

 

   
 

McDonald’s Corp. Posts Q4 Results

Jan 25, 2015
    

The results for the fourth Quarter of Fiscal 2014, ending December 31st 2014 were released on January 23rd 2015.

Highlights of the release included a 0.9 percent decline in global sales with the EU falling by 1.1 percent, the Asia/Middle East/Pacific/Africa region down by 4.8 percent and the U.S. by 1.7 percent compared to the corresponding 4th Quarter of Fiscal 2013. in the EU,             

The following table summarizes the results for the period and compares values with the corresponding quarter of the previous fiscal year.

Quarter Ending   2014   2013   Difference  
Sales* $6.571B      $7.093B -7.9%
Operating Costs $4.821B $4.893B -1.5%
Operating Income $1.751B $2.200B -20.4%
Net Income $1.097B $1.397B -21.5%
Earning per Share $1.13 $1.40 -19.2%
Operating Margin 26.6% 31.1%  
Profit Margin 16.8% 19.7%  
Total Debt $15.1B    

*Breakdown 65% from Company-owned stores;
35% Franchisee operations.

   
 

Correction on Ownership of DSM and Novozymes

Jan 23, 2015
    

Novozymes A/S have requested that an item recently posted relating to their association with DSM should be clarified.

Novozymes of Denmark and DSM in the Netherlands are separate corporate entities but have a strategic alliance marketing enzymes for animal feed.  The companies compete with respect to enzymes for the biofuels industry.

   
 

Value of a Border Town for Supermarkets

Jan 23, 2015
    

Walmart has opened the fourth Sam’s Club in El Paso, TX. and now has twenty-one supermarkets in the city including eight Neighborhood Market stores.  Unprecedented growth is associated with their location adjacent to the border with Mexico.  A similar situation exists in northern Washington State where Costco caters to Canadians coming south to shop for groceries and household items based on price and variety. 

The Costco location on U.S. Route 5 near Blain, WA is so crowded with cross-border shoppers that local residents have requested an “All-America Wednesday.” each week.

   
 

Whole Foods to Include Restaurants in Stores

Jan 23, 2015
    

The six proposed Whole Foods Market stores in Chicago will include restaurants and bars.  The Company intends to enhance the shopping experience and make store more attractive.  A prime example of this trend is the new Wegmans Supermarket in Malvern, PA. which includes both cafeteria style and restaurant settings for patrons.

   
 

Retirement of Dr. Glenn Froning

Jan 23, 2015
    

Dr. Glenn Froning of the Department of Food Science, University of Nebraska-Lincoln has retired as the Food Technology Advisory to the American Egg Board after 15 years of service.

He has provided technical support to food manufacturers through the AEB EGGSolutions Hotline and contributed to establishing the AEB Egg Product Marketing Program.

   
 

Sad Passing of Don Dalton

Jan 23, 2015
    

On January 20th the U.S. Poultry and Egg Association announced the sad passing of Don Dalton on January 19th at his home in Mayflower, AR.

Born in St. Louis, MO. Dalton earned a BS in Marketing from the University of Arkansas at Little Rock and completed a management development program at the Harvard School of Management.

Don served our Nation joining the Arkansas Air National Guard in 1957 and he retired with the rank of brigadier general and as Commander of the Arkansas National Guard.  In 1989 he joined the staff of USPOULTRY as Vice President of Government Relations and was responsible for the International Poultry Expo.  He was named President in 1992 following retirement of Harold Ford.

   
 

Cargill Expands Research Facility

Jan 23, 2015
    

On January 12th, Cargill Inc. inaugurated the new Global Animal Nutrition Innovation Center located in Velddriel in the province of Gelderland, the Netherlands.  The $3.7 million project has added a broiler and broiler breeder research unit constructed according to European specifications.

At the opening ceremony, David Cook, Research and Development Director for Cargill Animal and Nutrition stated “as a result of market demands we designed a facility be believe will promote collaboration among our experts, as well as those from local universities to accelerate innovation.”

   
 

IEC Business Conference Open for Registration

Jan 23, 2015
    

The 2015 International Egg Commission, Business Conference will be held in Lisbon from the 12th to the 14th of April.

The event will take place at the Four Seasons-Hotel Ritz in Lisbon and will include programs on consumers, avian influenza, egg processing and business analysis. 

For further information access the website of the IEC iec@lhmail.net.

   
 

Olson Appointed to Lead Iowa Egg Industry

Jan 23, 2015
    

The Iowa Egg Council and the Iowa Poultry Association have appointed Randy Olson as Executive Director.  He was most recently the marketing director for the U.S. Soybean Export Council and has been associated with agriculture throughout his career.

Rich Hall Chairman of the Iowa Egg Council stated “in a national search Randy Olson rose to the top with his strong background in agriculture and a vast array of experience to bring to the table.”

 

   
 

Target to Withdraw from Canada

Jan 23, 2015
    

EGG-CITE has commented on the fortunes of Target under the previous Chairman and CEO, Gregg Steinhafel who resigned on May 9th, 2014. Postings reviewed third quarter results for Fiscal 2014 and subsequently the pending decision on Canada on January 9, 2015.

The most recent report highlighted the problems facing Brian Cornell, incoming Chairman and CEO of Target Stores including the magnitude of losses and the reasons for the failure to achieve acceptable market penetration in Canada.

   
 

Passing of Dr. David Mitchell

Jan 23, 2015

Dr. David F. Mitchell passed away on Monday January 12th at his home in Pennsylvania.

Dr. Mitchell earned a baccalaureate degree in animal science from Pennsylvania State University and graduated with the VMD degree from the University of Pennsylvania in 1978.  Thereafter he completed a residency in avian medicine and pathology.

During his professional career, Dr. Mitchell worked with DeKalb Ag. Research, American Scientific Laboratories and other companies as a veterinary technical representative and field advisor.  In 1985 he was appointed as Senior Veterinarian for Pronaca located in Quito, Ecuador.

David was active in assisting farmers in developing countries with technical advice and travelled under the auspices of the Winrock Foundation and Farmer to Farmer programs in Africa and Asia.  EGG-CITE extends condolences to his widow Mildred and his two sons.

   
 

Quarantine Restrictions for AI Impact Small Hatcheries

Jan 23, 2015
    

The ban on movement of live poultry from Washington State northwards to Canada has resulted in a Bellingham, WA. hatchery having to either divert chicks or to euthanize hatchlings due to disruption in movement associated with HPAI.  At issue is the restraint on Rock Creek Farms which operates a hatchery in the U.S. 30 miles South of their company farm in British Columbia.

   
 

Midwest Turkey and Layer Health Management School

Jan 23, 2015
    

This annual event will take place Wednesday May 6th through Thursday May 7th 2015.

The program includes a review of diseases and metabolic conditions presented by faculty at the Western University of Health Sciences, Purdue University and Michigan State University. 

Registration begins on Monday February 2nd at a cost of $400 per attendee.

For further information, contact Ralph Stonerock, ralph@flyinabaloon.com.

   

Shane Commentary

 

Warnings to California Producers Regarding Avian Influenza

Jan 23, 2015
    

Avian Health Professionals at the University of California at Davis are promoting intensified biosecurity to prevent extension of avian influenza strains H5N2 and H5N8 to the commercial poultry population.  Their efforts are also being directed to poultry enthusiasts and operators of backyard farms.

The advent of avian influenza in British Columbia followed by isolation of the virus from migratory waterfowl and from backyard farms in Oregon, and Washington suggests that changes have occurred in the prevalence rate of these strains in migratory birds resulting in increased risks to domestic poultry.

Backyard flocks with outside access are an ongoing danger to all commercial poultry operations.  Since these potential amplifiers of influenza virus are a fact of life, it will be incumbent on commercial producers to exercise a level of separation through enhanced biosecurity commensurate with the risks and consequences of introducing AI infection. 

There is concern that when backyard producers find that on reporting flock mortality to diagnostic labs or to state veterinary authorities that their flocks are depopulated, some will tend to hide outbreaks increasing the risk of dissemination of HPAI.  Although a compensation program to facilitate eradication of exotic diseases is practical for commercial farms, the amounts offered to operators of game fowl flocks and fancy breeds is inadequate relative to their live intrinsic value.

The major issue confronting medium and large-scale egg producers in California is the distinct divergence between what is required for optimal biosecurity and what is considered a reasonable investment in money and time for effective structural and operational improvements. Delay in upgrading facilities and procedures will perpetuate vulnerability.

   
 

Intrusion Video at Petaluma Egg Farms

Jan 23, 2015
    

Petaluma Farms was apparently the subject of intrusions, effectively burglaries, over a series of nights in 2013 and again in recent weeks.

The alleged findings by the intruders affiliated with Direct Action Everywhere founded in Berkeley, CA. in early 2013 were posted on the website of the organization.  Compared with previous intrusion videos this version is well narrated and graphic but includes irrelevant material relating to unconnected events.

Petaluma Farms is run by the Mahrt Family and produces organic, and non-confined (“cage-free”) eggs.  Their organic eggs are sold by Whole Foods Market under the 365 Brand and the Organic Valley label.

According to press reports including a detailed expose in The Press Democrat Humane Farm Animal Care (HFAC) is responsible for organic certification of flocks although the certification had lapsed due to an administrative error. The press report, quoted Adele Douglas, of the HFAC, claiming that the organization was not responsible for certifying the hens depicted in the video.

   
 

Response by Richard Berman

Jan 22, 2015
    

The January 15th Editorial considered progress in converting from individual gestation crates for sows to non-confined alternatives. Richard Berman of his eponymous company based in Washington D.C. responded with the following comments which are reproduced as a courtesy to him and for the consideration by subscribers and readers:-

Dr. Shane overstates his case that public concern initiated by the HSUS has driven retailers and restaurants to demand a dramatic shift on housing of pregnant sows. 

We have tracked the positions of the largest 50 grocers and 100 restaurants in the United States. About 75 percent of each category have not made any pledge regarding sourcing of pork through their supply chains. Of those that have, most have made weak pledges with promises to “strive” or “plan” to procure only group-housed pork in two to seven years.

As Chipotle shows, there is a supply shortage of pork produced using “alternative” methods to the point where Chipotle simply has stopped serving pork because a supplier didn’t meet its pledge. Most companies, however, are more practical. It’s unlikely that they will be interested in taking losses just to tout sow-housing demands, especially if the executives and the public are well educated on the issue.

Not coincidently, the corporate pledges have slowed down since the industry started educating in 2012. Similarly, no state bans on IMPs have gone into law since 2012 as legislators have also been educated.  

Although EGG-CITE disagrees with some of the contentions expressed by Richard Berman his rebuttal is posted in keeping with a policy that responsible, factual opposing views should be posted.

The thrust of the EGG-CITE Editorial related to the fact that public perception of welfare coupled with the sensitivity of members of the NCCR, the NRA and the FMI has a profound influence livestock housing and welfare standards. The editorial was not intended to consider the relative merits of housing sows or to comment on the involvement of the HSUS regarding the issue. These are more germane to Richard and his Clients.

   

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Dr. Simon M. Shane
Simon M. Shane
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Industry Prices: Fri Jan 30
 Corn3.68 $/bu
 Soybeans9.61 $/bu
 Soybean Meal330.00 $/ton
 Eggs, Producer117  ¢/doz
 Eggs, Warehouse 117-120 ¢/doz