Editorial

 

Malevolent Influence of Teachers on Student Perceptions Concerning Meat

May 19, 2017

    

The Humane Society of the United States has programs to “educate” teachers to influence students in all grades to abandon consumption of meat products in favor of a vegan or vegetarian lifestyle.

Fortunately, the American Egg Board has developed a science-based practical program to promote consumption of eggs. There does not appear to be a parallel initiative by poultry, beef or pork producers. This omission is regrettable and will be costly over the long term.

  

The need to develop a solid majority of reasonable, logical and impartial teaching professionals is without question. This imperative is illustrated by the actions of Thomas Allison, Jr. who has been placed on unpaid leave from the Horizon Academy at Marion Oaks near Ocala, FL. The Superintendent of Schools, Heidi Maier initiated an inquiry into the activities of Allison with respect to his condemnation of students participating in Future Farmers of America (FFA) programs.

Maier noted that Allison “had engaged in a repeated egregious pattern of mistreating, ridiculing, insulting, intimidating, embarrassing, bullying and abusing FFA students, crushing their dreams and causing them to feel that they should just discontinue FFA activities to enjoy a peaceful school environment.” According to the Ocala Star-Banner, Allison, who is an animal rights advocate, has been more than aggressive in harassing a teaching colleague who advises the FFA group. The actions by Allison created an environment in which members of the FFA were concerned over their grades in courses taught by him.

Even after the inquiry was initiated in late March, Allison who is obviously a zealot, continued to antagonize students through activities characterized as “failing in his obligation not to harass or discriminate against any pupil.” Despite the suspension, Allison is not chagrined and he stated that he intends to obtain a certificate to teach agriculture and use this position to further promote his animal rights agenda.

It is evident that Allison represents an outlier in terms of his views and the extent to which he has attempted to misuse his position as a teacher. Fortunately the scope and extent of his proselytizing for animal rights was recognized and he will hopefully be dismissed from his post. Not because of his views, but because of the intensity and aggression in which he attempted to superimpose veganism within his school community.

While there may be other Allison’s in schools, it is seldom that their activities result in disciplinary action. More subtle influences on impressionable minds are incorporated into lesson plans and activists use peer pressure to change lifestyles. The actions of the so-called Physician’s Group for Responsible Medicine to ban processed meat products in San Diego schools has less to do with nitrates than it does with influencing food choices by children.

The animal protein industry should not regard the Allisons of this world as rare kooks. The positive aspects of livestock production and the philosophical justification for raising animals for food should be promoted as a counter to vegan propaganda. Children in elementary and middle school today will be consumers and arbiters of taste and lifestyle within twenty years. The HSUS has long recognized the vulnerability and susceptibility of young minds to their propaganda. This demands a commensurate response from the animal protein industry.

   

Egg Industry News

 

USDA Weekly Egg Price and Inventory Report, May 17th 2017

May 19, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 20) posted on May 15th the Midwest wholesale prices for Extra Large, Large and Medium sizes were unchanged from the previous week. Price stability associated with a market bottom over two previous weeks should prevail although at a stable low price. The market will be influenced by hen inventory on the supply side of the equation. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The May 15th USDA Egg Market News Report documented a USDA Combined Region value of $0.61 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 18-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.54 per dozen. At the high end of the range, the price in the Northeast Region, attained $0.67 per dozen. The current USDA Combined Price was approximately 32 cents per dozen below the three-year average. During the first Quarter of 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of all eggs but the price dropped 15 cents per dozen during the first two weeks of April 2016.

Hen numbers this week decreased by 1.8 million for the third consecutive week. The population is still at a high level relative to demand with approximately 303.7 million hens in production. Hens-in-lay increased from 303 million in early December 2016. The total egg-flock comprises 308.6 million including hens in molt and small flocks.

Generic shell-egg stock decreased by 3.9 percent after a rise of 1.0 percent for the previous week confirming fluctuation in demand and production. Dried-egg inventory updated May 15th amounted to 29.0 million pounds (13,182 metric tons) as of April 30th 2017. This is extremely high, as is the National stock of frozen egg products reported on April 24th confirming a stock of 41.9 million pounds (19,050 metric tons) on March 31st.  

   
 

Target Reports on Q1 FY 2017

May 19, 2017

    

In a press release dated May 17th Target Corp. (TGT) announced results for the 1st Quarter of FY 2017 ending June 29th.

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)

  

   
 

Human Cases of Avian Influenza in China Decline

May 19, 2017

    

According to official reports, 24 fatalities occurred from H7N9 influenza during April down from 47 during March.

The National Health and Family Planning Commission reported 211 deaths from 529 cases during the first four months of 2017, approximately three times the incidence rate for 2016.

Avian influenza remains endemic in China with numerous strains, including H7N9 which appears to be the only serovar affecting humans.

  

 

   
 

Definition of ‘Healthy’ Reviewed by the IFT

May 19, 2017

    

The Institute of Food Technologists (IFT) has submitted written comments to the Food and Drug Administration concerning proposed regulations on labeling of individual foods as “healthy.” The IFT considers the term as applied to individual products as misleading to consumers.

The president of IFT, Dr. John Coupland stated “it is important to be cautious of thinking of any food as ‘healthy’ when what really matters is the overall quality of the diet.” He added “however, we applaud the FDA for taking this step to improve the way the term is used and hope it can guide the development of products that support people making more informed food choices.”

  

The IFT recommended the following approach:-

  • A food based-definition of “healthy” should be developed combining nutrient limits and a statement describing how food helps achieve dietary recommendations
  • The definition for “healthy” food should conform to the eating patterns recommended by the 2015-2020 Dietary Guidelines for Americans
  • Foods which exceed the recommended limits for sodium, added sugar or saturated fat should be excluded from being labeled as ‘healthy’

The IFT recognized the need for consumer education to engender trust and confidence in labels.

   
 

GAO reviews Avian Influenza Risks

May 19, 2017

Diana DeGette

    

A report prepared by the Government Accountability Office (GAO) addresses the 2015 Avian Influenza eporntic and the increased incidence rate of H7N9 influenza among consumers of poultry in China.

It is generally accepted that controlling influenza viruses in poultry reduces the risk of emergence of a pandemic strain of avian influenza affecting human populations.

The GAO report included:-

  • Lack of authority invested in the USDA to enforce minimal standard s of biosecurity on poultry farms. Less than 60 percent of the 850 poultry farmers surveyed after the 2015 outbreak noted adequate operational biosecurity.
  • Flocks which are not confined to housing including organic and pastured chickens and turkeys are at a considerably higher risk of contact with wild birds and hence are more susceptible to avian influenza.
  • There is only one manufacturer of embryo-origin influenza vaccine currently in the U.S. This places reliance on foreign nations to supply vaccine in the event of an epidemic or pandemic.
  • The Department of Health and Human Services has a 3-year $42 million contract to produce eggs for vaccine production. Additional precautions are required to preserve the integrity of the supply of fertile eggs required for vaccine production.
  • Increased surveillance over avian influenza is necessary including routine sampling of hogs which act as ‘mixing vessels’ since this species is susceptible to both avian and mammalian strains. Funding for surveillance circulating in hogs will cease at the end of September 2017. Budget cuts proposed for 2018 reduce the funds available to the Department of Agriculture and Health and Human Services by approximately 19 percent.
  

 

The report prepared by the Government Accountability Office was requested by the House Energy and Commerce Committee. In a joint statement, the chair Tim Murphy (R-PA) and ranking democrat Diana DeGette (D-CO) stated “We know the devastating impacts of a global pandemic, now it is up to Department of Agriculture to make sure we are prepared and have a plan to combat this threat. Further, ensuring the effectiveness of their plans and procedures are just as important as the plans and procedures themselves.”

   
 

South African Egg Producers Experiencing Losses

May 19, 2017

    

The South African Poultry Association reported that many small-scale farmers with between 5,000 and 40,000 hens have ceased production due to low profitability.

This is partly occasioned by the high cost of feed attributed to drought, coupled with lower demand due to the prevailing economic situation.

  

Hens are now being depleted at 72 weeks, four weeks earlier than normal reducing the supply of eggs. Although there has been a compensatory increase in wholesale price, this does not cover the escalation in feed cost.

   
 

Whole Foods Comments on the 365 Concept

May 19, 2017

    

In past months, Whole Foods Market has lauded the concept and success of the 365 small-store concept based on two store openings.  More recently, CEO John Mackey has acknowledged that anticipated goals in traffic and sales have not been achieved. 

Quoted in Supermarket News Mackey admitted to an investors group that “the transition was not an immediate cure-all and that the ventures future was unclear.”  He stated “we still think it’s really too early to give long-term projections on 365 since our resources have been a little mixed.”  The fact that Whole Foods Market is making corrections based on data and observations is indicated by the comment “when we opened our fourth store it is going to be a kind of 365-2.0” according to Mackey.

  

The proposed fourth store in Austin, yet again a university town with a high proportion of affluent customers, will incorporate two restaurants, Easy Tiger and Juice Land to be implemented by the ELM restaurant group.

   
 

Lidl Considers Ohio Locations

May 19, 2017

    

Lidl watchers are evaluating the options taken by the German-based discount food retailer in various U.S. locations.  Reports suggest that Lidl will acquire sites near Youngstown, Cincinnati and Dayton, Ohio. 

Various databases also show Lidl planning stores in Erie and Pittsburgh, PA. 

  

Companies which track published records and planning applications identify somewhere between 125 and 250 Lidl sites in the U.S., mostly concentrated on the East Coast but with possible establishments in Houston.

   
 

AEB to Present Webinar for Formulators

May 19, 2017

    

Following a concerted program to win back egg-liquid markets lost during the 2015 HPAI epornitic, the American Egg Board will present a webinar in Monday May 22nd (14H00 EDT).

Topics will include:-

  • Perceptions of egg products and egg replacers
  • Impact of the 2015 U.S. avian influenza outbreak on usage
  • Performance expectations of egg products and egg replacers
  • Opinions relating to cage-free eggs among food formulators

The program will be sixty minutes in duration and will feature Eric Novak as the speaker.

 

   
 

Idaho “Ag Gag” Law Opposed by Animal Rights Activists

May 19, 2017

    

According to the Idaho Statesman a number of animal rights advocacy groups opposed to “AG Gag” laws have filed amicus curiae briefs with the 9th U.S. Circuit Court of Appeals claiming a violation of First Amendment rights.

In 2015 a Federal court invalidated the Idaho law banning clandestine video and filming in livestock facilities. The state of Idaho has appealed the decision which will be heard before the 9th Circuit.

  

North Carolina recently passed and Ag Gag bill which will also be opposed on the grounds of non-constitutionality.  

   
 

Introduction of IB Strain 4-91 Vaccine to the U.S. May Be Beneficial

May 19, 2017

    

Based on laboratory studies and extensive field trials, administration of attenuated live infectious bronchitis (IB) Strain 4-91 vaccine may prove beneficial in providing protection to pullets and against respiratory complications and will protect against deterioration in shell quality.

Currently infection with IB strain 4-91 has not been identified in the U.S. but the virus is endemic in Mexico and in many nations in Europe, Asia and Africa. Based on the high probability of introduction into the U.S., broiler and egg-production veterinarians have advocated for the approval of the vaccine to be administrated as a preemptive measure.

  

The manufacturers of the vaccine suggest that chicks receive a Massachusetts strain IB vaccine at day-old followed by combinations of Massachusetts and the Arkansas variant in the period 14 to 21 days after placement. The proposed IB 4-91 vaccine should be administrated as a coarse spray at 10 weeks. The effect of priming attenuates the response from the 14 to 16 week multivalent IB emulsion.

Improvement in protection from Strain 4-91 vaccine is based on ciliostasis assays carried out in Brazil. Scientists confirmed enhanced protection compared with conventional Massachusetts vaccine following field challenge with IB viruses affecting both the respiratory tract and kidneys. If IB Strain 4-91emerges in the U.S., it is anticipated that deterioration in shell quality will occur depending on the pathogenicity of the strain, level of protection and age of exposure.

   
 

Braswell Foods Restructures

May 19, 2017

    

Braswell Foods established in 1943 is now Braswell Family Farms reflecting fourth generation management. Ronald “Trey” Braswell III has been appointed as president succeeding his father Scott Braswell who has led the company since 1991.

Braswell Family Farms has operations in Nash county North Carolina and a complex in Jetersville, VA. The company produces both generic and specialty eggs marketed along the Eastern Seaboard.

  

Braswell Family Farms will celebrate their 75th anniversary in 2018.

   
 

Avian Influenza Case in New York Veterinarian Reviewed

May 19, 2017

    

Previously EGG-CITE reported on an isolated case of a veterinarian affiliated to a New York cat shelter acquiring H7N2 infection while treating cats infected with the virus. According to a report* by Dr. Christopher Lee and colleagues of the CDC Epidemic Intelligence Service, the patient regularly obtained oropharyngeal swabs from shelter cats without protection from aerosol infection.

  

In the event the case presented as mild influenza and did not require hospitalization. A follow- up investigation failed to disclose any seroconversion or disease among 165 of 265 people working or volunteering at the shelter over the period November 12 through December 29 2015. Interviews and testing of 188 people who adopted cats from the Manhattan shelter was conducted. Three suspect cases were assayed but found to be negative for H7N2 RNA.

*Lee, C. T. et al. Identification of Cat-To-Human Transmission During an Outbreak of Influenza A (H7N2) Among Cats in an Animal Shelter - New York City, 2016. Proceedings of the 2017 Epidemic Intelligence Service Conference, Atlanta.

   
 

Nutriad to sponsor 21st European Symposium on Poultry Nutrition

May 19, 2017

    

Nutriad has announced that it will be a sponsor of the 21st European Symposium on Poultry Nutrition to be held May 8th through 11th in Tarragona, Spain. It is anticipated that 500 scientists and representatives of the poultry industry will attend.

Dr. Daniel Ramirez will present data on inclusion of coated butyrate in starter feed for broilers combined with Apex®5 Botanical in the grower finisher. Dr. Tim Goossens will consider making this associated with the beneficial effect of Adimex in preventing aquatic enteritis.

  

Further information can be accessed at www.nutriad.com.

   
 

Moba Americas is now offering a Preventive Maintenance Service Agreement (PMSA) program.  

May 19, 2017

    

The agreement can be set up for a series of 4 to 12 visits from a member of Moba’s factory trained service team at reduced rates. 

Our technician can perform any number of selected tasks throughout the life of the agreement.  

  

Examples of some of the services provided can include:

  • Review of all safety systems on the equipment
  • Overall system performance evaluation
  • Recommendations for optimization, including throughput and productivity improvements
  • Functionality evaluation, component wear, and identification of assemblies in need of repair
  • Itemization and quotation of parts in need of replacement
  • Review of spare parts inventory and recommended stocking levels
  • Equipment adjustments required to meet operating specifications
  • Inspection and correction of all loose mechanical and electrical connections
  • Review of operating, maintenance, and cleaning procedures
  • Planning and scheduling of maintenance and rebuild activities
  • Assistance with establishing preventative maintenance plans in line with SQF requirements
  • In-plant training
  • Review of system for existing or potential performance upgrades

For your convenience, the Moba technician can arrange a parts quote while at your facility. Upon request, a detailed report can be provided to include tasks accomplished and recommendations going forward.  This program was designed to help Moba’s customers maximize the performance of their equipment and to keep them up to date with the latest improvements.

For more information on this program, please contact one of the following individuals at Moba Americas:

Steve Strzelecki

 

Dan Samson

(248) 919-5153

or

(248) 919-5068

steve.strzelecki@dma-group.com

 

daniel.samson@dma-group.com

 

   
 

Parker and Reichman Farm to be Acquired

May 19, 2017

    

Dutt and Wagner of Abingdon, VA announced that they will acquire the assets of the Parker and Reichman shell egg business located in Andrews, NC. The farm was founded in 1948 and has been under family management since this time.

 

The facility comprises 600,000 laying hens and 200,000 pullets. This would suggest annual revenue at current prices in the region of $15 million.

Lake Wagner, a fourth generation manager of Dutt and Wagner noted, “We have enjoyed a long-term working relationship with Parker and Reichman and are excited about the opportunity to take over ownership and management.”  He added, “We believe Parker and Reichman’s size, facilities and geographical footprint fits perfectly with Dutt and Wagner strategy addressing emerging cage-free egg trends and our current markets.”

   
 

Aldi Grows on the Reality of Lower Prices

May 19, 2017

    

Aldi intends expanding its presence in the U.S. from 1,600 to as many as 3,000 stores with at least 2,000 in operation by the end of 2018.  In addition, Chief Executive Jason Hart is spending $1.6 billion to expand and remodel 1,300 existing stores.

Hart noted in the report by Nandita Bose in Reuters, “We are re-merchandising, remodeling, enhancing our product range and are focused on gaining volume so more customers start their shopping at Aldi and we are able to complete their shopping lists more than we have in the past.”

  

Recent comparisons have shown that Aldi offering house brands is consistently lower than industry volume leader Wal-Mart.  Aldi currently represents 1.5 percent of the U.S. grocery market but has a growth rate of 15 percent annually, doubling in volume since 2012.  In contrast, Wal-Mart which controls 22 percent of the market has grown at a rate of two percent annually.

The retail giant is experiencing price competition from Aldi and soon to emerge Lidl in addition to the dollar stores and more recently, Amazon Fresh.

Wal-Mart has committed to spending $6 billion to reduce shelf prices and is pressuring suppliers to reduce prices to contribute to Wal-Mart margins.

   
 

USDA DATA ON CAGE-FREE PRODUCTION

May 19, 2017

    

Based on the growing importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders.

EGG-CITE will summarize and comment on data and trends in a monthly Cage-Free Report, supplementing the information presented weekly in the Production and Pricing Report.

  

The report for the month of April 2017 released on May 2nd 2017 provides the following data:-

Flock Size (million hens)

APRIL‘17*       March ‘16

Certified Organic

14.6                 14.5

Cage-free hens

26.6                26.1

Total non-caged

      41.2                40.6

*Unchanged from previous month suggesting that USDA is determining hen population quarterly.

Rate of lay   75.5 percent

Average weekly production (1,000 cases)

Certified Organic

214,366

Cage-free

390,513

Total non-caged

      604,879

 

Average Wholesale Contract Price C-F, L. Brown

$1.63/doz. (down 1 cent)

Range  (unchanged)

$1.45 to $2.00/doz (unchanged

 

Average Advertised National Retail Price C-F, L, Brown

$2.73/doz

USDA 6-Region

High (S.Cent)

$2.81/doz.

 

Low (Midwest)

$2.59/doz.

 

   
 

Target Struggles with On-Line Operations

May 18, 2017

    

An accompanying article in this edition of EGG-CITE presents financial data for the first quarter of Fiscal 2017 for Target Corporation. The company recognizes the need to expand on-line ordering especially as chairman and CEO Brian Cornell is focusing on high-margin categories including apparel and home décor. During the first quarter of 2017, approximately 4 percent of sales were derived from on-line orders and the remainder from traditional brick-and-mortar stores.

  

In 2016 digital sales grew by 27 percent amounting to $3 billion, lower than the early projection of 40 percent growth. In contrast, Amazon.com has expanded exponentially and Wal-Mart stores  increased on-line sales by 63 percent in FY 2016 through click-and-collect programs and advanced technology acquired through the purchase of start-up Jet.com.

Target has lagged in E-commerce, initially relying on outsourcing to Amazon from 2001 through 2011. Thereafter Target decided not to pursue the purchase of Boxed.com in favor of in-house development. Target has a poor history of IT implementation which has impacted customer loyalty in big-box stores. It is now up to Mike McNamara who acquired responsibly for digital operations in 2016 to build a new infrastructure to achieve growth in a competitive market.

   
 

Australian Research Investigates Consumer Motivation to Purchase Eggs

May 18, 2017

    

EGG-CITE has reported previously on the transition from conventional caged housing to alternatives including free-range production in Australia.

An Adelaide University study determined that a significant motivation to purchase free-range eggs was based on the perception that they are tastier and more nutritious than conventional eggs. Neither of these attributes are necessarily valid since nutrition of flocks, post-pack refrigeration and handling and expediting delivery to the shelf are important determinants of internal quality and taste.

  

 It is noted that in Australia eggs are not refrigerated during storage or transport and are placed on store shelves at room temperature which is not conducive to internal quality. The conclusion that “happy chickens” (whatever that may mean) lay tastier eggs is garbage. This may be a consumer perception initiated by the producers of cage-free eggs and supported by deceptive advertising  reinforced by web misinformation.

The lead author of the study, Dr. Heather Bray, noted “A big part of consumer behavior and certainly the things of marketing and advertising are very much encouraging us to think about ourselves so it’s this interesting playoff between personal benefits and the other that’s a real challenge for ethical consumption.” This gobblegook says volumes about the study.

Injecting a measure of reality to the issue, Dion Andary the Managing Director of a large producer of conventional free range and non-confined flocks in Australia noted “There’s two types of eggs,  good eggs and bad eggs.” He added “Really the freshness is paramount so there’s not much taste difference and not much difference in quality unless the egg is not fresh or has been mishandled.” He is strongly supported in his additional statement “Keeping them (presumably his ‘chooks’) protected, free from disease, cool in summer, warm and dry in winter, are things that get maximum benefit from the bird and translate into true animal welfare outcomes.”

In the U.S. Eggland’s Best has created a unique and significant market presence by promoting a range of products which have been demonstrated to be consistently fresher than competitor’s eggs and with superior nutrition based on supplementation of diets. Taste can be enhanced by eliminating animal fats and livestock byproducts from diets albeit at a cost. These ingredients may become rancid affecting taste.

Reducing the time between lay through subsequent packing, storage, transport and delivery to stores is critical to maintaining internal quality. There is an inevitable decline in consistency of albumen which is accelerated by prolonged storage especially at temperatures above 40F.

Eggs are displayed non-refrigerated in stores in Australia

Free Range eggs offered at major Sydney supermarket chain

   
 

Wall-Mart Stores Reports on Q1 of FY 2018

May 18, 2017

    

In a press release dated May 18th Wal-Mart Stores (WMT) announced results for the 1st Quarter of Fiscal 2018 ending April 30th 2017.   

  

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)

   
 

Status of 2017 Corn and Soybean Crops

May 17, 2017

    

The USDA Crop Progress Report released Monday May 15th  recorded the status of corn and soybean planting and emergence as expressed in the table below:-

 

                                                                            WEEK ENDING

Crop

MAY 7th

May 14th

5-Year Average

Corn Planted

         47%

           70%

           70%

Corn Emerged

       15%           

           31%

           36%

Soybeans planted

Soybeans emerged

         10%

           -

           14%

             8%

           17%

            9%

 

Parameteer

v. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

1

8

64

27

                              Past Year

3

11

69

17

Subsoil moisture:  Past Week

2

9

67

22

                              Past Year

2

12

73

13

 

   
 

CME Prices

May 17, 2017

    

On Friday May 12th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded. Values for corresponding months as quoted for the previous week are indicated in parentheses:-

COMMODITY

 

Corn (cents per bushel)

May ’17   361     (362)

July ’17     371 (371)         

Soybeans (cents per bushel)

May ’17   953     (964)

July ’17     963   (973)

Soybean meal ($per ton)

  

Sept ’17     314   (317)     

Changes in the price of soybeans and soybean meal this week were:-

  • Corn:                     May quotation up by 1 cent.        (-0.3 percent)
  • Soybeans:            May quotation up by 11 cents.     (-1.1 percent)
  • Soybean Meal:    May quotation up by $2/ton           (-0.1 percent)                                  

For each 10 cent per bushel change in corn :-

  • The cost of egg production would change by 0.45 cent per dozen
  • The cost of broiler production would change by 0.25 cent per pound live weight

For each $10 per ton change in the price of soybean meal:-

  • The cost of egg production would change by 0.40 cent per dozen
  • The cost of broiler production would change by 0.25 cent per pound live weight

See posting on the April 12th edition of CHICK-CITE summarizing the April 11th USDA-WASDE Report #564 for a review of price projections and quantities of commodities produced during the 2016-17 season.

  

 

   

Shane Commentary

 

Management Turmoil at Hampton Creek Inc.

May 19, 2017

    

Bloomberg Technology recently reported on extensive ‘churn’ in the management ranks at Hampton Creek.  Olivia Zaleski documented the changes which included:-

  • Firing of the Head of Finance in October 2016
  • Firing of the Head of Logistics in October 2016
  • Dismissal of the CFO in April 2017
  • Dismissal of the COO in April 2017
  • Dismissal of the HR Director in April 2017
  • Resignation of the Vice President of Business Affairs and Corporate Counsel in May 2017
 

It is unclear whether the resignations and dismissals are an attempt to reduce the cost of operations or whether these executives were incompatible or disillusioned with the founder Josh Tetrick.  Since 2015, Tetrick has acquired total control of Hampton Creek since he has majority voting power over the Board.  According to Zaleski this strategy has been beneficial for Facebook and Alphabet but has proved controversial and damaging for Uber Technologies and Zenefits.

At issue is the generally accepted reality that Hampton Creek requires infusions of capital to remain afloat, given reported losses.  The Bloomberg Technology article suggest that Tetrick has only raised $7 million towards the current funding round of $150 million, although this figure was denied by a company spokesperson in the absence of alternative figures which were  not provided.

The image of Tetrick and his company was sullied by revelations that he employed contractors in 2014 and 2015 to purchase quantities of Just Mayo™ an egg-free mayonnaise substitute, to create the impression of consumer demand.  Although Tetrick has informed employees that investigations by the Securities and Exchange Commission and the Department of Justice have been dropped, there have been no official announcements from either of the Agencies.

According to Bloomberg, losses have been reduced to approximately $4 million per month, down from a whispered $10 million. It is unclear how money is spent since the promised introduction of a stream of vegetable-based products are not apparent on supermarket shelves.

The fact that Tetrick is claiming interest from investors in Asia indicates a lack of confidence from traditional U.S. venture capitalists.  Dropping names such as Prince Khaled bin Alwaleed bin Talal and various Chinese industrialists is less than reassuring.

When Tetrick established his enterprise together with Josh Belk of the HSUS, it was claimed that the innovative technology of the company would displace conventional production of eggs by hens.  None of the prognostications, widely publicized by Tetrick-hype has come to pass.  All that Hampton appears to show for millions invested is a ‘me-to’ mayonnaise substitute, cookie dough and minor products which use off-the-shelf formulas.

It is time for Tetrick to disclose sales figures, a projection of when the company will achieve breakeven and to provide an explanation of how funds provided by private investors have been expended and what the company has to demonstrate for the claimed R&D.  Hampton Creek is looking less like an innovator and disruptor than a money pit.

   
 

Antigen-Capture Tests Present Epidemiologic Challenge in Public Health

May 19, 2017

    

During the period 2013 through 2016, the use of Culture-Independent Diagnostic Tests (CIDTs) increased from 2 per 460 laboratories to 59 per 421 laboratories participating in the FoodNet cooperative database*.  Although CIDTs generally have high sensitivity and concurrent specificity, experience has shown variable results when assaying for Campylobacter, yielding occasional false positive diagnoses. The fact that laboratories can perform a rapid and inexpensive CIDT assay will intuitively result in an apparent increase in incidence rates. Unfortunately a spurious increase in incidence rates is to be anticipated.

  

Data presented in the review covering a three-year period showed that approximately 1,500 infections with Campylobacter were diagnosed in 2013 compared to 3,500 in 2016. For the same period, Salmonella diagnoses increased from 100 to 1,500 for ten laboratories in participating states and counties. The 2016 confirmed infection rate for Campylobacter was 11.8 per 100,000 population representing an 11 percent decline in confirmed cases from 2013 through 2015. When reviewing cases of campylobacteriosis either confirmed or CIDT positive, the 2016 rate was 17.4 per 100,000.

For salmonellosis, the 2016 confirmed infection rate was 15.4 per 100,000 representing a two percent increase over the average annual incidence rate compared to 2013 through 2015. When considering the number of cases confirmed or applying CIDT, the 2016 rate increase was 16.7 cases per 100,000 or a six percent increase.

An inherent problem relating to increasingly more extensive application of CIDT is that the diagnostic protocol does not include isolation of the causal pathogen which is therefore unavailable for classification as to serotype or whole genome sequencing. This information is critical to evaluating epidemiologic studies.

 *Marder, E. P. et al, Incidents In Transient Infections With Pathogens Transmitted Commonly Through Food And The Effect Of Increased Use of Culture-Independent Diagnostic Tests on Surveillance MMWR. 66: 397-403 (2017)

   

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Simon M. Shane
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Industry Prices: Tue May 23
 Corn3.93 $/bu
 Soybeans9.56 $/bu
 Soybean Meal312.10 $/ton
 Eggs, Producer38  ¢/doz
 Eggs, Warehouse 54-57  ¢/doz