Editorial

 

Safety of Organic Foods from Non-Commercial Producers Questioned

Nov 21, 2014
    

The USDA Certified Organic Program lays down rules relating to non-GMO cultivars, preventing the use of insecticides and petroleum-based fertilizers and other requirements.  The numerous and frequently onerous restrictions on production and required segregation in the storage and distribution system results in foods costing at least double that of conventional counterparts.

A recent study from Academics Review representing scientists evaluating scientific claims determined that organic foods are four to eight times more likely to be recalled over safety issues than conventional foods. Most frequently this is due to microbial contamination. This is understandable given the small size of many production units and the use of animal waste as a “natural fertilizer”.  A number of smaller organic food processors manage to fly below the FDA radar. Compared to generic foods inspection of facilities is less stringent and frequently is ignored.

Organic certification is completely separate from any form of assurance of safety or superiority in nutritional content.  The USDA Certified Organic Program is based on evaluation of paperwork and does not involve any laboratory assays to demonstrate, freedom from antibiotics, “hormones” steroids, insecticides or other claims made by producers. 

 Organic foods produced by small-scale “family farms” beloved by the USDA-AMS and certain boutique food stores, are more likely to be contaminated than products from commercial operations which apply HACCP systems in plants operating with the advantages of high technology and scale. This is true of table eggs produced in accordance with the FDA Rule to prevent Salmonella applicable to farms with more than 3,000 hens. There has already been a reported trace-back associated with Salmonella Enteritidis from a free-range Certified Organic production unit in California. Unfortunately the small output of “family” or subsistence farms makes it difficult to identify a relatively mild foodborne infection among a small number of consumers. It is equally difficult to trace an infection to source especially with deficiencies in product identification and records associated with purchases at Farmer’s Markets. 

   

Egg Industry News

 

Weekly USDA Prices and Inventory

Nov 22, 2014

     

Santa is coming early to the Egg Industry this year. Surging demand attributed to cold weather and high prices of competing proteins is evident in increased prices and declining inventory. Supply has not kept pace since there has been only moderate new expansion and in some cases a reduction in hen numbers to comply with California regulations. The USDA Egg Market News Report for Monday November 17th 2014, (Vol. 61: #92) reflected a 20 percent increase for Extra Large and Large sizes compared to the previous week. Mediums and breaking stock prices remained unchanged. Urner-Barry on Tuesday November 18th reported a record for Midwest Large at $1.91 per dozen

There were declines of 8.7 percent and 1.8 percent in inventory of generic and specialty eggs respectively. The following table lists the “most frequent” range of Midwest values as delivered to warehouses:-

  Previous Week    Current Week
Extra Large   147 –  126          123  –  126  cents per dozen
Large 145 –  148   121 –  124  
Medium 103 –  106   103 –  106  
Certified Organic EL 275 –  310   275 –  310  
Central States Breaking Stock 97 –  99   97 –  98  
Checks 80 –  86   80  –  86  

 

   
 

AEB Award to Jim Nield

Nov 21, 2014

The 2014 AEB Good Egg Award was presented to Jim Nield.  Jim has a long and distinguished career in the egg industry, principally involved with Diamond Systems from 1966 to 2008. 

During his tenure as a manager and then the owner of the Company, improvements in design and innovations increased grade accuracy, shell quality and speed of packing.  Jim is now associated with Sanovo and was responsible for introduction of a new Staalkat grading system in 2011.

Jim has served as a member of the UEP Allied Industry Group and has participated in the activities of the International Egg Commission, PEPA and various state organizations.  He has also contributed as a member of the International Poultry Expo Exhibitor Committee.

    

From left to right Paul Sauder, Jim Nield,
Martha Nield and Joanne Ivy on the occasion
of Jim receiving the Good Egg Award

 

   
 

Response to UK HPAI

Nov 21, 2014
    

It is understood that the Department for the Environment, Food and Rural Affairs (DEFRA), equivalent to the USDA, has completed depletion of the 6,000-bird duck breeding farm near Drifield in East Yorkshire.  In accordance with EU directives, a 10 km surveillance zone has been established around the index farm.  It is clearly stated that all poultry within the zone must be housed and movement of all poultry and waste within the 3km exclusion zone is prohibited.

The director of the British Free Range Egg Producer’s Association, Robert Gouch has urged his membership to “ensure they are maintaining the highest standards of biosecurity to minimize the risk of cross contamination.”  It is difficult to see how operators of free-range flocks can maintain any acceptable level of biosecurity with their birds allowed access to pasture.  Given that the same H5N8 strain is responsible for virtually simultaneous outbreaks in Germany, Holland and the UK separate wild bird reservoirs must be suspected. In the absence of any obvious movement of personnel, equipment or live birds involving respectively a turkeys,  commercial laying hens and ducks in the three nations affected, a series of as yet identified biological connections must exist between wild bird reservoirs and housed poultry in the three cases.

   
 

Private Label Displaying Innovations

Nov 21, 2014
    

According to a report on Baking Business.com, the Private Label Manufactures Association Trade Show held during mid-November in Chicago demonstrated a number of trends which are evident in the egg industry.  The significant focus areas are:-

  • Placing health claims on snack foods, meal replacements such as ALDI Simply Nature and Target’s Simply Balanced lines.
  • Upgrading the image of private label products with unique flavors and up-market attributes
  • Improving  packaging, making use of eye-catching graphics including presentations from Wegmans and Meijer
  • Stressing convenience – Trader Joe’s offers Dining-For-One options and ALDI is promoting variety in snacks.

It is estimated that total U.S. sales of private label food items in 2014 will exceed $110 billion.

   
 

Second and Third Cases of AI in Holland.

Nov 21, 2014
    

News reports issued on November 20th at 15H00 CET and subsequently on November 21st confirm  second and third cases of avian influenza. The second was on a farm comprising 43,000 chickens (type not specified) in the village of Ter Aar. This location is situated on the Western aspect of Holland near den Hague and approximately 15 miles from the index case in Hekendorp reported on November 15th. This outbreak involved an H5N8 highly pathogenic strain similar to the pathogens responsible for earlier cases in Germany affecting turkeys and in ducks in England. The new case involves an H5 strain but complete characterization is in progress.

The third and most recent case involves a parent multiplier farm located in the Province of Overijssel in the East Central region of Holland about 60 miles from the index case. The virus from this outbreak has not been characterized as of Friday midday CET.

Dutch authorities have re-imposed a statutory 72-hour restriction on all movements of poultry and products in Holland which will cause additional disruption among the industry which supplies Germany and other EU nations with breeding chicks, table eggs and broiler meat. The previous restrictions were just lifted following depletion of the flock of 150,000 laying hens and the initial reports of no cases within the 10km surveillance zone.

   
 

Central States Breaking Stock Increasing in Price

Nov 21, 2014
    

The USDA reported on Thursday November 20th that prices for breaking stock in the 18-state Central Region have moved up in response to demand.

Breaking stock prices were mostly 102 to 104 cents per dozen (over 48lb case weight) and Checks rose to 85 cents to 91 cents.  These values are approximately 5 percent higher than the 97 cents to 99 cents per dozen for breaking stock and 83 cents to 86 cents per dozen for checks reported by the USDA on November 17th and reflect the advances in the shell-egg market.

   
 

Contribution of Small Stores on Wall-Mart Same-Store Sales

Nov 21, 2014
    

In the most recent quarterly report, Wal-Mart Stores Inc. confirmed data on same-store sales for the 13-week period ending October 31st.  U.S. same-store sales in their conventional supermarkets rose by a paltry 0.5 percent.  In contrast the newly developed format of Neighborhood Market stores advanced by 5 percent, although from a small base. 

Global E-commerce sales were up by 21 percent also reflecting the fact that Wal-Mart Stores is a new entrant to web sales.

   
 

Zoetis to Purchase Assets of Abbot Animal Health

Nov 21, 2014
    

Zoetis Inc. has announced an agreement to purchase the Animal Health assets of Abbott for a purchase consideration of $255 million.  Abbott Animal Health has a portfolio of companion animal products, diagnostic equipment and assays.

Juan Ramon Alix CEO of  Zoetis, stated, “the addition of Abbot Animal Health is an excellent complement to the Zoetis companion animal business and addresses the challenges our customers face today in effectively raising and caring for animals that are living longer and receiving more intensive medical and surgical treatment”.

   
 

Target Reassures Market with Q3 Results

Nov 21, 2014
    

In a press release dated November 19th Target Corp. (TGT) announced results for the  3rd Quarter of Fiscal 2014 ending November 1st.            .

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

             
Quarter ending Nov 1
2014
  Nov 2
2013
  Difference  
             
Sales $17.732 B $17.258 B +2.7 %
Gross Income $5.7 B $5.125 B +1.0 %
Net Income $352 M $341 M +3.2 %
Earnings per Share $0.55   $0.54   +1.9 %
Gross Margin 29 % 30 % +3.3 %
Profit Margin 2 % 2 % 0 %
             
Total Debt $14.2 B (Debt to Equity 86.3)    
             

 

   
 

Whole Foods Helps Start-ups

Nov 18, 2014
    

The Whole Planet Foundation provides a market conduit for producers in developing countries.  Madecasse which sources ingredients for chocolate in Madagascar has achieved sales of over $4 million annually following introduction of their product line in up to 400 Whole Foods stores since 2010.

Whole Foods Market represents potential sales volume for artisanal and specialty food products in the U.S. The company employs “foragers” responsible for identifying, evaluating and sourcing local products especially those packed with sugar-free and USDA Certified organic specifications. Getting shelf space at Whole Foods Market may represent the difference between success and failure for an entrepreneur with a novel food or cosmetic product.

   
 

Unilever Sues Hampton Creek Foods

Nov 18, 2014
    

Hampton Creek Foods which produces a plant-derived mayonnaise supplement under the trade name “Just Mayo” is being sued by multinational Unilever for misrepresentation.  As reported in the Wall Street Journal, the action brought by Unilever, owners of the Hellmann’s brand will ultimately benefit Hampton Creek Foods.  Unilever is demanding that Hampton Creek Foods change the name by eliminating “mayo” which they characterize as deceptive, remove existing product from shelves and pay treble damages and legal fees.

   
 

Outbreak of HPAI in the UK

Nov 18, 2014
    

According to press reports and a posting on ProMED,  on November 17th authorities in the UK have commenced depleteting a focal outbreak of highly pathogenic avian influenza in a flock of 6,000 breeding ducks located in Driffield, East Yorkshire . The strain was characterized as H5N8 according to a statement from DEFRA (equivalent to the USDA). Additional molecular assays are in progress to establish whether there is any common epidemiological relationship with German and Dutch outbreaks and the possibility of free-living birds as the common source of infection.

Early detection of HPAI in commercial anseriformes can be difficult since flocks may be initially asymptomatic. In this case it is presumed that a drop in egg production occurred resulting in submission of specimens for laboratory diagnosis. Obviously epidemiologic investigations are in progress but as yet there is no indication of the source of the virus.

   
 

Vons Opens Upscale Stores

Nov 18, 2014
    

Vons, a subsidiary of Safeway has opened a supermarket in Carlsbad, CA. which will compete with specialist organic and “natural” specialty stores.

The 60,000 square foot facility includes a national coffee chain, a pharmacy and embraces the attributes of higher-priced competitors.

   
 

Meijer Expands into Wisconsin

Nov 18, 2014
    

Meijer which currently operates stores in Michigan, Indiana, Ohio, Illinois, and Kentucky will make its first foray into Wisconsin.  Hank Meijer, Owner-Co-owner Chairman and CEO of the chain opined “it’s a big deal for us, we have been in five states for twenty years now”.  He added “it’s been a long time since we’ve opened up a new frontier for our company”.  Currently Meijer operates 213 stores and employs 60,000.  According to J.K. Symancyk, president of Meijer, the company will invest $750 million in the new stores in Wisconsin and will provide 7,000 work opportunities.

   

Shane Commentary

 

American Humane Heartland™ Farm Animal Survey

Nov 21, 2014
    

Dr. Robin Ganzert, president and CEO of the American Humane Association recently announced results of the second American Humane Association Humane Heartland™ Farm Animal Survey.  involving 5,900 consumers.  The survey indicated that 95 percent of the respondents were concerned over “farm animal welfare” and 75 percent said they were willing to pay more for humanely produced eggs, meat and dairy products.

The “Humanely Raised” designation scored highest among a series of food labels indicating attributes including “Antibiotic-Free” “Organic” and “Natural”.  More than half of the respondents indicated that their favored “Humanely Raised”  products were either unavailable (36 percent) or too expensive (20 percent).

It must be remembered that the results of surveys depend on the way in which questions are asked. Many attitudinal and preference surveys include questions analogous to asking 8-year olds if they are in favor of free ice cream. The secondary consideration is whether surveys are conducted by an independent professional market research organization or a sponsor with an interest in the outcome.

   
 

EU to Establish Policy on GM Crops

Nov 18, 2014
    

The EU has decided that individual member nations can establish their own policies relating to cultivation of GM crops based on socio-political, environmental and other criteria.

In announcing the new approach, Frederique Reis a representative from Belgium stated, “this vote shows we have secured a broad consensus between the political groups in the European Parliament on this sensitive issue” He added “the measures approved today will secure flexibility for member states to restrict, ban the cultivation of GMO crops as they so wish.  At the same time, we have secured a clear process for the authorization of GMOs at the EU level, with improved safeguards and a key role for the European Food Safety Authority, which is important”. 

   

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Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.

Industry Prices: Thu Nov 13
 Corn3.87 $/bu
 Soybeans10.57 $/bu
 Soybean Meal393.50 $/ton
 Eggs, Producer176  ¢/doz
 Eggs, Warehouse 145-148 ¢/doz