It is becoming increasingly evident that the U.S. poultry industry is divided on the desirability of preventive vaccination against Highly Pathogenic Avian Influenza. Given the duration and severity of the H5N1 epornitic that has persisted in seasonal waves of incidence since 2022, both turkey and egg production segments have been disproportionately affected.  In contrast there have been limited losses among broiler breeder and growing farms. The ongoing epornitic has resulted in depopulation of close to 90 million birds with 75 percent comprising commercial egg laying flocks or pullets, 16 percent turkeys and 7 percent broilers and broiler breeders.

At issue is the potential impact of even limited regional and sector vaccination on the export of broiler leg quarters.  The prevailing perception is that introducing any program of preventive vaccination would be an acknowledgement that the infection is endemic resulting in a number of importing nations imposing wide restrictions on importation.  The reality is that HPAI is effectively regionally and seasonally endemic in the U.S. given that both migratory birds that introduce infection and now many domestic species both serve as reservoirs and disseminators of the virus. Even the most extreme levels of biosecurity are ineffective in preventing introduction of infection based on anecdotal and scientific evidence that infection can be transmitted over short distances by the aerogenous route.  Since the 2022 epornitic, the USDA-APHIS has followed an outdated and anachronistic policy of eradication.  This is clearly a fallacious approach, inappropriate to a disease subject to seasonal introduction and with domestic wildlife reservoirs.

Adaptation of H5N1 to mammals with animal-to-animal transmission is evidenced by outbreaks in farmed mink and marine mammals during 2023.  The recognition that the infection is now present in the U.S. dairy industry raises concern for further changes in the H5N1 genome with the potential for the emergence of a zoonotic strain.

Given that highly pathogenic avian influenza caused by H5N1 is now a panornitic present on six continents, has changed attitudes towards preventive vaccination. The World Organization of Animal Health (WOAH) has accepted this modality as an adjunct to prevention along with biosecurity and quarantine.  The important question is whether limited vaccination in the U.S. would seriously impact export of leg quarters representing 97 percent of broiler exports.  Given the limited number of nations receiving U.S. exports, and the fact that many of these nations have endemic infection suggests that the restraints on exports may be overstated. It is clear that many nations have and will continue to use avian influenza as either a protective measure for domestic industries or for political purposes.  China applies vaccination against endemic HPAI but imposes prolonged restrictions on U.S. counties and states with diagnosed infections. This nation will act in their own interest irrespective of international agreements or scientific reality.  Many importing nations would be willing to limit restrictions to the county level.  Others might accept a certification program by which complexes or flocks of origin could be demonstrated to be free of virus by PCR assay prior to harvesting.

The NCC is justified in continuing to quantify the effect of trade restrictions although in reality vaccination would result in probably less disruption than is currently imposed.  The contention that vaccination would not eradicate HPAI is well recognized, but it must be accepted that the infection is now regionally and seasonally endemic.  The statement that vaccination “masks the presence of HPAI” is valid but flocks can be certified free of infection using PCR technology.

The NCC statement that “We currently support USDA and APHIS stamping out policy to eradicate the virus is essentially fallacious and self-serving since this is an unachievable objective and reflects the thinking of the 1990s.  The NCC encouragement of APHIS to “work with our trading partners to ensure that should a vaccination strategy be developed, we can continue to feed the world with poultry products” represents a departure from the ‘no-vaccination ever’ message.  The NCC is justified in its reservations over HPAI vaccination with respect to export and trade since this is of vital economic importance to the industry that must market 15 percent of RTC volume in the form of leg quarters, an undifferentiated relatively low-priced commodity.

The recent article by Mike Brown, President of the NCC, in a Delmarva publication indicates a more reasoned approach to vaccination that recognizes that the infection cannot be eradicated through ongoing depopulation of flocks.  Effective biosecurity (as opposed to the ‘make-belief’ version practiced) will not provide absolute protection against infection given the reality of aerogenous transmission.

Restriction on trade in poultry products as the result of vaccination may be influenced by future events including: -

• The unfortunate but likely possibility of introduction of HPAI into the U.S. broiler industry, resulting in significant losses.
• Recognition of HPAI among commercial flocks in Brazil.
• Extension of H5N1 or other strains to workers on U.S. livestock farms, processing and packing plants and their contacts.
• Availability of effective AI vaccines for mass application.

The “softening” of resistance by the broiler industry to preventive vaccination is encouraged and reflects an appreciation of the realities of the disease, the widespread distribution, financial impact and zoonotic potential. The NCC and USAPEEC should motivate the lifting of trade barriers against vaccination through representations to the WOAH, the International Poultry Council and the International Egg Commission to facilitate controlled and monitored immunization of egg-production and turkey flocks in U.S. areas of high risk.

USDA Weekly Egg Price and Inventory Report, May 8^th 2024.

Market Overview

• The average wholesale unit revenue values for Midwest Extra-large and Large sizes were down 22.7 percent this past week. Medium size was down 23.8 percent. National wholesale price for large in cartons at $2.11 per dozen was approximately $0.60 per dozen above the 3-year average of $1.50 per dozen and up $1.25 from the corresponding week in 2023 at $0.90 per dozen. This past week shell egg inventory was up by 2.7 percent, compared to a rise of 0.8 percent in stock the previous week.
• Although there has been a weekly increase in pullet flocks transferred to laying houses, hen numbers are constrained by the loss of close to 13 million hens due to HPAI on twelve complexes holding from 250,000 to 2.6 million hens during the 4^th Quarter of 2023. Losses have not yet been completely replaced. Pullets are in short supply with losses of 2.5 million growing birds, mainly in California. During April close to 8.4 million hens collectively were depopulated in a sequence comprising one complex in Texas and three related facilities under common ownership in Michigan in addition to a breeder complex in New Mexico.
• This past week chains apparently widened the spread between delivered cost and shelf price. This could result in a continued rise in generic stock offset only by a proportional rise in demand that appears unlikely and only with constant re-ordering to fill the pipeline through May. Discounters are holding prices on generics influencing mainstream retail stores. Eggs are still highly competitive in price against the comparable costs for other protein foods.
• Total industry inventory was up by 3.0 percent overall this past week to 1.74 million cases with a concurrent 4.5 percent increase in breaking stock, following an 11.5 percent increase during the preceding processing week. Demand for egg products has fallen into May attributed to less home-baking and entertaining. Egg products are required for the food service and manufacturing sectors and for exports that increased in February.
• It is now apparent that the inventory held by chains and other significant distributors may be more important over the short term in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for small cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
• The number and extent of future possible outbreaks during the spring and fall months of 2024 cannot be projected but sporadic cases in backyard poultry, isolation from wild migratory and predatory birds and close to 40 dairy herds in nine widely diverse states is a cause for concern. More surveillance information should be released by USDA-APHIS as it becomes available concerning the prevalence rate of carriers among resident domestic free-living birds and a review of molecular and field epidemiology for the 2022 spring and fall waves of HPAI. The USDA has yet to identify and release specific modes of transmission for the 2022-2023 epornitic including likely airborne spread from wild birds and their excreta over short distances.
• The current relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past two years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
• According to the USDA the U.S. flock in production was apparently down by 0.4 million hens (0.1 percent) to a new level of 306.2 million for the week ending May 8^th The stated total flock of 311.5 million included about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production. Given the latest figures it is estimated that the producing flock is at least 17 to 20 million hens lower than before the onset of HPAI in 2022. In January 2024 the USDA adjusted figures to account for depopulation of 13 million hens spread over the last quarter of 2023. There were evident discrepancies between published figures and the theoretical number of hens over successive weeks taking into account known losses and predetermined pullet replacements. The April loss of 8.4 million hens is not reflected in data released over the past five weeks. It is hoped that the USDA agency responsible for publication of flock size will get their act together and coordinate with APHIS to record the number of depleted flocks and promptly provide accurate data. Figures released on May 8^th overestimate flock size
• The ex-farm price for breaking stock (rounded to one cent) was down 15.7 percent to $1.13 per dozen.Checks delivered to Midwest plants were down 10.3 percent to $1.05 per dozen this past week. Prices for breaking stock should follow the wholesale price for shell eggs usually with a lag of about one to two weeks.

The Week in Review

Prices

According to the USDA Egg Market News Reports released on May 6^th 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was down 22.7 percent from last week to $1.58 per dozen. Large was down 22.8 percent to $1.56 per dozen. Mediums were down 23.8 percent to $1.46 per dozen delivered to DCs. Prices should be compared to the USDA benchmark average 4-Region blended nest-run cost of 75.6 cents per dozen as determined by the Egg Industry Center based on USDA data for April 2024. This value excludes provisions for packing, packaging materials and transport, amounting to 57 cents per dozen as determined in mid-2023 from an EIC survey (with a low response) and now realistically 60 cents per dozen.

REVIEW OF APRIL 2024 EGG PRODUCTION COSTS AND STATISTICS.

Commencing in January 2024 the EIC justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks. Accordingly, EGG-NEWS will continue to summarize data but will consolidate production and export statistics for the U.S. egg industry as a total and compare financial data for the two shell-egg categories.

APRIL HIGHLIGHTS

• April 2024 USDA ex-farm blended USDA nest-run, benchmark price for conventional eggs from caged hens was 190 cents per dozen, up 3 cents per dozen or 1.6 percent from the March 2024 value of 187 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. Stock levels and prices prior to the onset of flock depletions due to HPAI indicated a relative seasonal balance between supply and demand. Future nest-run and wholesale prices will be largely dependent on consumer demand for shell eggs and products and the rate of replacement of pullets and hens depleted due to HPAI. Other considerations include diversion to shell sales from the egg-breaking sector in an interconnected industry.
• Fluctuation in wholesale price is attributed in part to the amplification of upward and downward swings associated with the commercial benchmark price discovery system in use. A substantial but transitory rise in price occurred during February but with a sharp decline thereafter to a mid-March plateau, extending into late April. A 30 percent decline occurred over the past two weeks into May. An unknown factor in future pricing will be the incidence rate and severity of highly pathogenic avian influenza over late spring months with northward migration of waterfowl. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California. Approximately 8.4 million hens were depleted in two outbreaks (TX and MI) through mid-April.
• April 2024 USDA average nest-run production cost for conventional eggs from caged flocks over four regions (excluding SW and West), applying updated inputs was up 0.3 cents per dozen to 75.6 cents per dozen compared to the March 2024 value of 75.3 cents per dozen, mainly attributable to a 0.6 percent higher average feed cost per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
• April 2024 USDA benchmark nest-run margin for conventional eggs attained a positive value of 114.4 cents per dozen compared to a positive margin of 111.7 cents per dozen for February 2024. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
• The April 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be down 0.1 million hens (rounded) to 297.1 compared to the revised March 2024 value of 295.5 million. This figure apparently takes into account depletion of 4.2million hens during December 2023 that were not recorded in the month. Approximately 3.0 million hens returned to production from molt in April together with projected maturation of 23.1 million pullets, with this number offset by depletion of spent flocks. During the fourth quarter of 2023 approximately 13 million hens and 2.5 million pullets were depopulated due to HPAI in five states and 8.4 million were depopulated in April
• March 2024 pullet chick hatch of 28.3 million was up 2.9 percent or 0.8 million chicks from February 2024.
• March 2024 exports of shell eggs and products combined was down 3.3 percent from February 2024 to 620,400 case equivalents representing the theoretical production of 8.2 million hens. The increase was attributed to greater demand for shell eggs by Canada and offset by reduced imports of egg products by Japan, South Korea and the E.U. among other importing countries.

TABLES SHOWING KEY PARAMETERS FOR APRIL 2024.

Summary tables for the latest USDA April 2024 flock statistics, costs and unit prices made available by the EIC on May 7^th 2024 are arranged, summarized, tabulated and compared with values from the previous April 8^th 2024 posting reflecting March 2024 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA value

VOLUMES OF PRODUCTION REFLECTING THE ENTIRE INDUSTRY

* USDA Revised

 * Revised USDA/EIC

Note 1. Texas excluded to maintain confidentiality

Export of Shell Eggs and Products, January-March 2024.

The volume of exports of shell eggs are conditioned by the domestic needs of importers, price against competitors and disease and logistic restraints. This is demonstrated by the 182 percent drop in volume of shell egg exports from 2012 (198 million dozen) to 2022 (70 million dozen). Due to depletion of flocks in 2023, export prices increased 113 percent from $1.02 per dozen to $2.16 per dozen reflecting domestic prices. Depressed exports persisted in 2023 with 90 million dozen shell eggs exported at an average price of $1.80 per dozen as losses from HPAI rose in the last quarter with a consequential rise in domestic price.

It is questioned whether lost markets other than the USMCA and Caribbean nations will be reclaimed over the intermediate term. Sporadic and short-term exports may be made to various nations based on supply disruption caused by HPAI or other factors.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing 2024 with 2023:-

U.S. EXPORTS OF SHELL EGG AND EGG PRODUCTS DURING

JANUARY-MARCH 2024 COMPARED WITH 2023

SHELL EGGS

Shell egg exports from the U.S. during the fist quarter of 2024 increased by 7.8 percent in volume but declined 28.3 percent in total value compared to the corresponding months in 2023. Unit value declined 31.1 percent to $1.99 per dozen compared to the corresponding quarter in 2023.

Canada was the leading importer of shell eggs during January-March 2024, with 16.0 million dozen representing 73.4 percent of volume and 71.0 percent of the $43.4 million total value of U.S. shipments of shell eggs. Unit price over January-March 2024 was $1.93 per dozen compared to $3.25 per dozen for consignments in January-March 2023. Imports by Canada are driven by consumer demand balanced against availability through the controlled supply situation. This inhibits flexibility, necessitating imports from the U.S. to cater for demand especially when additional losses occur due to HPAI. During March 2024 Canada imported 7.9 million dozen up 9.7 percent over the corresponding month in 2023. Value was down 40.2 percent to $15.2 million but unit value was 45.2 percent lower to $1.92 per dozen.

The Caribbean Region (Bahamas, Netherlands Antilles, Cayman Islands) was a distant second in shell egg imports from the U.S. during January-March 2024, with 2.5 million dozen representing 11.5 percent of volume and 11.5 percent of the total value of U.S. shipments of shell eggs. Unit price in January-March 2024 was $2.00 per dozen

Mexico was the third-ranked importer of shell eggs in January-March 2024 with a volume of 0.6 million dozen representing 2.8 percent of export volume and 2.3 percent of value. Unit value of $1.67 per dozen compared to an average value of $1.99 per dozen for all exports. During March Mexico imported 0.1 million dozen valued at $0.2 million.

The average 12-month trailing USDA benchmark price for nest-run large shell eggs was $1.56* per dozen weighted by high prices caused by shortages during the first quarter of 2023 resulting from depletion of flocks infected with HPAI.

*USDA 12-month USDA benchmark nest-run unit prices per dozen: $2.74; April, $1.38; May, $0.60; June, $0.82; July, $0.83 and August, $0.90; September, $1.00; October, $0.89; November, $1.65; December, $1.81; January 2024, $1.72; February, $2.51 and March, $1.87.

EGG PRODUCTS

The total volume of exported egg products during January-March 2024 decreased 2.0 percent to 7,369 metric tons compared to January-March 2023. Total value of $35.1 million was lower by 1.1 percent compared to January-March 2023. Unit value decreased by 0.9 percent to $4,763 per ton compared to January-March 2023. During 2023 the U.S. exported 29,814 metric tons of egg products valued at $134.3 million with a unit price of $4,505 per metric ton. Fluctuation in unit price reflects the composition of exports and the relationship between World supply and demand. Ukraine is now restrained in production but India continues as a significant exporter.

Japan was the 1^st-ranked importer by volume of egg products during January-March 2024 receiving 1,788 metric tons from the U.S. valued at $8.7 million representing 24.3 percent of volume and 24.8 percent of value with a unit price of $4,865 per metric ton. Volume for January-March 2024 was down by 22.2 percent and value was lower by 27.5 percent compared to January-March 2023. During March 2024 Japan imported 651 metric tons down 29.5 percent over the corresponding month in 2023. Value was down 42.0 percent to $2.9 million and unit value was 17.8 percent lower to $4,455 per metric ton. During 2023 Japan imported 10,352 metric tons of egg products from the U.S., valued at $49.9 million. With the conclusion of a bilateral trade agreement, the U.S. is no longer at a competitive disadvantage with respect to the E.U.

Mexico was the 2^nd ranked importer from the U.S. during January-March 2024 based on a volume of 1,538 metric tons with a value of $5.5 million, representing 20.9 percent of volume and 15.7 percent of the total value of U.S. exports of egg products. Exports to Mexico were up by 25.0 percent in volume but 17.9 percent lower in value compared to January-March 2023. The unit value of $3,576 per metric ton can be compared with the average unit value for U.S. exports of all egg products at $4,763 per metric ton. During March, Mexico imported 506 metric tons valued at $1.5 million. Volume was 77.5 percent higher and value was 28.5 percent lower than in March 2023.

Canada was the 3^rd-ranked importer in January-March 2024 based on a volume of 1,185 metric tons with a value of $4.3 million. Canada represented 16.1 percent of volume and 12.3 percent of value with a unit price of $3,628 per metric ton. During March Canada was 3^rd- ranked with 442 metric tons representing 17.7 percent of exports of egg products but down 79.1 percent from March 2023. Value was $1.6 million or 14.9 percent of the monthly total, down 33.3 percent from March 2023 due to a 218 percent increase in unit revenue to $3,619 per metric ton, reflecting a change in proportions of egg products consigned. Volumes shipped reflect restoration of the institutional and food service sectors and the relative availability of domestic product in Canada.

South Korea was ranked fourth among importers of egg products during January-March 2024 with a volume of 759 metric tons valued at $3.0 million with a unit value of $3,952 per metric ton. Comparing these values with January-March 2023, volume was 129 percent higher and value was up by 57.9 percent. Most flocks in South Korea have been restored to production after depopulation following 2022 outbreaks of HPAI. Import volume may have been influenced by recent limited but rising flock depletion or alternatively the need to replenish stocks after the Lunar New Year. In 2023 South Korea imported 1,141 metric tons valued at $5.3 million. Depending on severity, the return of HPAI may result in a disparity between local availability and demand requiring imports in 2024 as in 2022.

The E.U.-27 continues as an importer of egg products with 698 metric tons valued at $7.4 million with a unit price of $1,060 per metric ton.

Australia has emerged as an importer of egg products with 349 metric tons shipped during the first quarter of 2024 valued at 1.2 million with a unit price of $3,077 per metric ton.

COMMENTS

Exports to Canada and Mexico combined in 2022 amounted to $126.5 million in value equivalent to 47.5 percent of the total value of shell eggs and products shipped. During 2023 exports valued at $150.7 million represented 50.8 percent of shell egg and egg products amounting to $296.5 million. Canada represented 59.0 percent of the $162.2 million for shell eggs and 10.3 percent of egg products valued at $121.2 million, consigned during 2023, emphasizing dependence on this USMCA partner. During January-March 2024 the USMCA represented 52.9 percent of combined shell egg and product sales valued at $78.5 million.

Aspirational volumes of exports in excess of five percent of domestic production are unrealistic. The E.U., Japan, South Korea and Taiwan will buy according to their needs for undifferentiated shell eggs and products based on landed price in a competitive World market. Purchase decisions for commodities are determined by FOB price, freight, duty and broker margins. Shell eggs and the various categories of egg products are essentially commodities and generally do not respond to promotion.

Exports will be dependent on the willingness of importers to accept the World Organization for Animal Health (WOAH) principle of regionalization (zoning) in the event of outbreaks of exotic Newcastle disease or isolation of either H5 or H7 avian influenza (AI), in commercial flocks, irrespective of pathogenicity. Most importing nations are now applying regionalization and permitting imports on a zonal, county or state-exclusion basis following H5 or H7 AI infection. Canada and the U.S. operate according to a 2018 bilateral agreement to maintain trade in the event of outbreaks of catastrophic exotic diseases including HPAI and END.

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI or Newcastle disease in a region.

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: MAY 9^th 2024.

OVERVIEW

Prices for corn and soybeans diverged this week. Corn was down 1.1 percent but soybeans and soybean meal were up 0.8 and 4.2 percent respectively compared to last week. Prices were influenced by technical selling arising from geopolitical concerns and revised projections for crop sizes in Brazil and Argentine. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans for the 2024 crop. The May WASDE Report will update production forecasts and prices based on planting approaching the midway mark, and the transition to a La Nina by mid-year.

At noon EDT on May 9^th the CME price for corn was down 1.1 percent compared to the previous week to 442 cents per bushel for May delivery. Corn price was influenced by ethanol demand and the proportionally high ending stock from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and prices are indirectly influenced by higher wheat prices, events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through March despite a higher Dollar Index offset by a low FOB prices although with increased ocean freight. Total exports for the current market year are 29.9 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans traded at 1,197 cents per bushel for May 2024 delivery, up 0.8 percent over the week. Slightly higher prices were attributed to trading, less farm selling and projections of availability from the 2024 Brazil and Argentine harvests. Total exports for the current market year are 18.4 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal traded at $368 per ton for May delivery, up 4.2 percent compared to $353 per ton for last week. Price was influenced by demand coupled with high crush volumes for consecutive months from December 2023 onwards resulting from increased capacity. Price will fluctuate to reflect the CME price for soybeans and the demand for biodiesel despite the adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 unchanged from March in the April WASDE Report to be revised in the May release.

 WTI was $4.55 (-5.5 percent) lower from last week to $77.75 on May 8^th with moderate to lower world demand in relation to supply. Price is down partly due to a lull in the attacks on shipping in the Red Sea, and cessation of hostilities between Israel and Iran. It is accepted that U.S. production is a moderating influence, attaining 12.9 million barrels per day in March with ample reserves. An upward trajectory in price may occur if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was a downward move in price during the week ($81.06 to $77.75 range). Crude oil inventory in the U.S., other than the Strategic Reserve, was up 6.5 percent to 35.3 million barrels last week. High U.S. production is constraining domestic and international prices but the rise in energy cost during past weeks is reflected in inflation restraining the FOMC from lowering the benchmark interest rate.

Economic data released during the past week (Q1 GDP; PCE, Confidence, Productivity, Employment) confirmed slower growth and persistent inflation.

The data-driven Federal Reserve FOMC passed on a lowering of rates on May 1^st and will be disinclined to reduce the benchmark interest rate until September at the earliest.

Factors influencing commodity prices in either direction over the past four weeks included:-

• Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong El Nino The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover and lower exports of soybeans. (Downward pressure on prices). Planting is almost complete for the “new” crop of 2024 but has been disrupted by flooding in the southern production states.

• Geopolitical considerations continue to move markets, especially in the Mideast. Ongoing attacks on Ukraine port facilities have impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deployment of airborne missiles. Exports from Ukraine are approaching 1.5 million metric tons per week with a total of 26 million metric tons market year through February, down 11 percent from the equivalent period for 2022-2023 year. Grain production in Ukraine during the current year will be lower than 2022/2023 (Downward pressure on corn and wheat and an indirect effect on soybeans)
• Macroeconomic U.S. factors:-
• Most economists in academia and the private sector are still confident of a “soft landing” for the economy despite the release of the Q1 2024 GDP and recent economic parameters including the ECI, CPI and PPI and with fluctuation in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.5 percent in March 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating unemployment. There is evident stability in the bank sectors in both the U.S. and Europe. A rise in energy prices is contributing to persistence of inflation.
• The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on May 1st 2024, the sixth sequential pause. The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly less than two reductions of 25 basis points each in 2024, after the September meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on demonstrated progress in reducing inflation as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 was evidently premature.
• The March 28^th Bureau of Economic Affairs released the advanced estimate of Q1 2024 GDP at 1.6 percent, below the consensus estimate of 2.4 percent. The Q1 GDP value was influenced by spending by both consumer and government-sectors and with higher investment in housing. By comparison Q4 2023 GDP growth was 3.4 percent. Growth in GDP attained 2.5 percent in 2023 up from 1.9 percent in 2022. The Q1 Personal Consumption and Expenditure Index For Q1 (excluding food and energy) was up 3.7 percent annualized, higher than 2.0 percent in Q4 2023.
• The April 26^th Bureau of Economic Analysis released the March Personal Consumption and Expenditure Price Index. The core index (excluding food and energy) was up 0.8 percent from the previous month and 2.8 percent year-over-year. This was in line with estimates. The Headline PCE Index was up 2.7 percent year-over-year, above an estimate of 2.6 percent. On an annual basis the price of goods was unchanged, services were up by 4.0 percent, food by 1.5 percent and energy by 2.6 percent. The headline PCE is closely followed by the Federal Reserve and confirms persistent inflation holding above an annual target of 2.0 percent.
• The April 10^th Bureau of Labor Statistics release of the March 2024 CPI confirmed a 0.4 percent increase from February, and 0.1 percent above forecast. The annual increase of 3.5 percent was up from 3.2 percent in February and higher than the anticipated value. The increase in the core value (excluding food and energy) was 0.4 percent from February and 3.8 percent for the 12-month period, and estimates. Food at home was unchanged from the previous month. The category of ‘meat, fish and poultry’ was up collectively by 0.9 percent with eggs up 4.6 percent from the previous month. Food away from home was up 0.3 percent from February. On an annual basis all food was up 2.2 percent with food at home up 1.2 percent and food away from home up 4.2 percent. Energy was up 1.1 percent together with natural gas (-3.2 percent) in March. The shelter category was up 0.4 percent for the month and 5.7 percent over the past year. The macro trend is inclining towards reduced inflation due to a fall in energy prices but this category has recently moved up, detracting from deflation. The CPI heavily influences FOMC rate decisions.
• The March Producer Price Index for Final Demand (PPI) released on April 11^th was up by 0.2 percent from February compared to an expectation of 0.3 percent. The PPI was up 2.1 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.2 percent for March and up 2.8 percent for the 12-month period. Food was up 0.8 percent compared to a 1.1 percent increase in February.
• A Federal Reserve release on April 16^th confirmed that industrial production rose 0.4 percent in March. Capacity utilization was fractionally higher at 78.4 percent, 1.2 percent below the 1972-2020 average.
• The April 24^th report on Durable Goods Ordered during March 2024 was higher by 2.6 percent to $283 Billion compared to a revised value of 0.7 percent or $376 Billion in February. Transportation and specifically aircraft orders were up 7.7 percent. Excluding the Transportation component, new orders increased by 0.2 percent in March compared to February. Shipments of durable goods were essentially unchanged from February that in turn was up 1.2 percent from January 2024 impacted by severe weather.
• The April 15^th release of retail sales data showed a monthly rise of 0.7 percent in March. This value is compared to the revised 0.9 percent rise in February 2024, reflecting a rebound from depressed sales in January affected by harsh winter storms and a change in the basis of calculation. Retail sales in March 2024 were up 4.0 percent from the corresponding month in 2023. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
• The May 1^st release by the Institute for Supply Management (ISM®) documented the Manufacturing Index for April at 49.2 down from 50.3 in March and below the consensus of 50.0. New orders fell to 49.1 (54.6, March) and Production attained 51.3 (54.6 March).
• On April 30^th the U.S. Bureau of Labor Statistics reported a 1.2 percent increase in the Employment Cost Index (ECI) over the 1^st quarter of 2024 against a consensus estimate of 0.9 percent. The year-over-year increase was 4.4 percent compared to an estimate of 4.0 percent and with benefit costs up by 3.7 percent. The March ECI of 1.2 percent compares with a value of 0.9 percent for the 4^th quarter of 2023. The ECI is closely followed by the Federal Reserve FOMC and further reduces the possibility of a rate cut before September at the earliest.
• The April 23^rd release of the S&P Global Composite U.S. Manufacturing PMI for April fell to 50.9 compared to revised 52.1 in March. The Global Services PMI fell from 51.7 in March to 51.7 in April.
• The Conference Board Consumer Confidence Index released on April 30^th for April, fell to 97.0 points from a revised 103.1 for the preceding four-week period. The index was lower than a consensus estimate of 104.0. The Present Situation Index was down to 142.9 in April compared to 157 in March. The Expectations Index fell to 66.4 in April from a revised 74.0 in March. Values below 80.0 suggest a future recession
• The April 26^th University of Michigan Final Index of Consumer Sentiment fell 2.2 points to 77.2 for April down from a revised final value of 79.4 in March. The Index was up 22.2 percent from April 2023. Both the Current Economic Index (76.0 down from 82.5 in March) and the Index of Consumer Expectations (76.0 down from 77.4 in March) denote a decline in consumer sentiment influenced by stable but high interest rates and inflation despite geopolitical concerns. Inflation expectations 12-months hence moved higher from 3.1 to 3.2 percent among those surveyed.
• Non-farm payrolls added 175,000 in April, as documented by the Bureau of Labor Statistics in a May 3^rd This was less than the anticipated 240,000, and should be compared to the revised March value of 315,000. The moderate increase was attributed to workers hired in the health care and government sectors. The unemployment rate rose to 3.9 percent with 6.5 million unemployed and with 1.3 million in the long-term category. Real average hourly earnings during April showed a 0.2 percent increase over March to $34.75 . Average hours worked fell 0.1 percent to 34.7 per week in April. Labor participation was unchanged at 62.7 percent in April. Wage rates increased 3.9 percent over 12-months, the lowest gain since June 2021. Wage rates are closely followed by the Federal Reserve FOMC.
• The Bureau of Labor Statistics Job Openings and Labor Survey report released on April 2^nd estimated 8.8 million job openings at the end of February, down 100,000 (-0.1 percent) from January 2024 and consistent with estimates. The February job openings number was the lowest value in 34 months and compares with the March 2022 value of 12.2 million during COVID.
• The seasonally adjusted initial jobless claims figure of 231,000 released on May 9^th was the highest in eight months and was up 22,000 from the revised seasonally adjusted value for the week ending May 2^nd. The Weekly value was unexpectedly higher than the Reuter’s estimate of 215,000. The four-week moving average declined to 215,000 The Bureau of Labor Statistics estimated 1.785 million continuing claims for the week ending April 27^th There is evidence from data over the past three months that the labor market is cooling but still tight despite sporadic weekly fluctuation in new claims.
• The May 2^nd Bureau of Labor Statistics report recorded a 0.3 percent increase in non-Farm Productivity for Q1 2024 down from 0.7 percent in Q4 2023. Labor cost increased 4.7 percent over the past 12 months.
• The ADP® reported on May 1^st that private payrolls increased by 192,000 in April, down 16,000 from the revised 208,000 in March and compared to the Dow Jones estimate of 183,000 jobs. The increase in employment was mostly in the construction, services and hospitality sectors. Annual pay was up 5.0 percent year-over-year, down from 5.1 percent in March and the lowest value since August 2021. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded by the FOMC as an unreliable statistic

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on May 5^th documented planting and emergence for the 2024 soybean and corn season. Farmers experienced relatively wet conditions in five of the nine major states producing corn and soybeans through May 5^th. Planting progressed in the “big-nine” (IL, IN, IA, KS, MI, MN, MO, NE and OH) with a collective average of 2.7 days suitable for field work, (last week 4.0 days) ranging from 1.3 days (MN) to 4.4 days (KS)

Based on the sum of the “adequate” and “surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week surface and subsoil moisture values were 78 and 70 percent for the two highest categories of ‘Adequate’ and ‘Surplus’. These levels were higher than the previous year with values of 75 and 65 percent respectively for the two highest categories, demonstrating an acceptable pre-planting situation.

It is to early in the expected transition to a La Nina event to predict any impact on crop condition in coming months. If prolonged dry and hot weather in corn and soy areas occurs, yield will be depressed depending on timing and severity.  A long-range forecast in the form of two charts is provided predicting rainfall and temperature during the growing season.

Reference is made to the April 11^th WASDE Report #647 under the STATISTICS TAB and the weekly Commodity, Economy and Energy Report in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. The May 10^th WASDE will be reviewed in the May 17^th edition.

WEEK ENDING   Corn Status (18 states) March 31st  2024        April 7th  2024 5-Year Average Corn Planted (%) 27 36 39 Corn Emerged (%) 7 12 9         Soybean Status (18 states)       Soybean planted (%) 18 25 21 Soybean Emerged (%) 0 9 4
Crop Condition  (pending USDA reports) V. Poor Poor Fair Good Excellent Corn  2024 (%)           Corn  2023 (%)                       Soybeans  2024 (%)           Soybeans  2023 (%)
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 6 16 60 18 Past Year 10 20 59 11 Subsoil Moisture:         Past Week 6 19 63 12 Past Year 13 22 57 8

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through to the end of the 2024 harvest in November.

The 2018 Farm Bill expired on September 30^th 2023 but was extended by a year to allow the respective Agriculture Committees of the House and Senate to develop their own versions followed by reconciliation.  The House bill is apparently making progress although the adjustments to the Thrifty Food Plan that ultimately determines the magnitude of SNAP and WIC payments will be probably unacceptable to the Senate.

The Upper House indicated that it will complete its version only following passage of the House bill and then commence reconciliation in conference committee.  Some pessimistic observers maintain that the issues of SNAP eligibility and payment and the diversion of funding earmarked for climate remediation to crop support will deter adoption in an election year. Reluctance to comprise suggests that the 2018 Farm Bill will only be replaced in 2025.

In an April 30^th release, Archer-Daniels-Midland Corp. (ADM) posted financial results for the 1^st quarter, FY 2024. The Company can be regarded as a bellwether for ‘Mega-Ag’ and the commodities trading and processing sector. Along with competitors Bunge, Cargill, Cofco and Dreyfus, all are subject to the risks of currency fluctuation, geopolitical events, climatic extremes, and increased cost of ingredients, labor and transport in a competitive world environment influenced by inflation, conflict and disparity in the quality of life between industrialized and developing nations.

For the 1^st Quarter of FY 2024 ending March 31^st, net income was $729 million on total revenue of $21,847 million. Comparable figures for the 1^st quarter of fiscal 2023 ending March 31^st 2022 were net income of $1,170 million on total revenue of $24,072 million. Diluted EPS fell from $2.12 for the 1^st quarter of fiscal 2023 to $1.42 for the most recent quarter.

Comparing the 1^st quarters of 2023 with 2024, revenue was down 9.2 percent. Gross margin was down from 8.6 percent to 7.6 percent and operating margin down from 5.0 percent to 3.2 percent.

Segment operating profits combined totaled $1,399 million with respective contributions:-

• Ag Services and oilseeds           $864 million. (Crushing, $313 m; Ag. Services, $232m)
• Carbohydrate solutions              $248 million. (Starches, $261m; Refined products, $170m)    
• Nutrition                                    $  84 million. (Human, $76m; Animal, $8m)
• Other businesses                        $121 million

Juan Luciano Board Chair and CEO commented, “To manage through the cycle, we are driving key strategic initiatives across the business, including the ramp-up of production at our Green Bison JV and the scaling of our regenerative agriculture and BioSolutions efforts. Our productivity initiative pipeline is also expanding and we are already seeing the results of our actions to reduce supply chain complexity and better serve our customers in Nutrition as the segment delivered sequential quarterly improvement in operating profit. Our capital deployment actions such as our accelerated share repurchase program also continue to contribute to enhanced shareholder returns. Driving these priorities forward, we remain confident in our guidance for the year.”

Guidance for FY 2024 was not updated from an adjusted EPS of $5.25 to $6.25

The Company release included a comment on the Nutrition Segment: “Operating profit was $84 million during the first quarter of 2024, down 39 percent compared to the prior year period. Human Nutrition sub-segment operating profit was $76 million, approximately $62 million lower versus the prior year period, as impacts related to unplanned downtime at Decatur East and a normalizing restaurants market negatively impacted margins. In the Animal Nutrition sub-segment, operating profit of $8 million was higher year-over-year as cost optimization efforts and lower input costs bolstered margins.

ADM, has apparently “identified and corrected” recording of sales between the Ag. Services and Oil Seeds Segment and the Nutrition Segment.  The adjustments will have no ultimate effect on the balance sheet and statements of earnings reflecting the period January 2018 through September 2023.

ADM noted “material weakness” in internal controls over financial reporting and accounting practices relating to intersegment sales. Juan Luciano, Chairman and CEO, previously stated, “We have developed a remediation plan with respect to the identified material weaknesses to enhance reliability of our financial statements with respect to the pricing and reporting of sales.”  He added, “We remain committed to strong internal controls and we look to continue our focus on execution.”

ADM experienced a 24 percent drop in share price from $68.02 following the Friday January 19^th disclosure that Vikram Luthar, the CFO, had been placed under administrative leave. He  recently resigned.

On March 31^st 2023, ADM posted assets of $36,836 million of which $7,051 million comprised goodwill and intangibles, against long-term debt of $8,246 million. The Company had an intraday market capitalization of $28,860 million on May 2^nd. ADM trades with a forward P/E of 10.8 and has ranged over a 52-week period from $50.72 to $87.30 with a 50-day moving average of $59.23.  Twelve-month trailing operating margin was 3.2 percent and profit margin 3.3 percent.  Return on assets over the past twelve months was 3.9 percent and the return on equity 12.4 percent.

In a release dated May 1^st, Sprouts Farmers Market (SFM) reported results for the 1^st quarter of FY 2024 ended March 31^st. Sprouts is regarded as a high-end grocery chain competing for health-conscious and affluent suburban consumers. Results for the third quarter beat Zach’s estimates on both the top and bottom lines and for growth in same store sales.         

For the period, the Company posted net income of $114.1 million on net sales of $1,884 million with a diluted EPS of $1.12.  Comparable figures for the 1^st quarter ended April 2^nd 2023 were net income of $76.1 million on net sales of $1,733 million with a diluted EPS of $0.73. Comparing Q1 of 2024 with Q1 of the previous fiscal year, Sprouts Farmers Market increased revenue by 8.7 percent. Gross margin rose to 38.3 percent from 37.5 percent in Q1 2023.  Operating margin was 7.9 percent compared to 5.9 percent for Q1 2023. Sprouts generated a comparable same-store sales growth of 4.0 percent compared to the corresponding 1^st quarter of 2023.

In commenting on results, Jack Sinclair, CEO, stated, "We were pleased with our impressive financial results this quarter, with strength in comparable store sales, traffic, and E-commerce”. He added . "These outcomes highlight the effectiveness of our strategy and the exceptional execution by our team members across the country. We are reinforcing our position as a leading specialty food retailer as we build new stores in line with our growth plans.”

Guidance for FY 2024 was raised to include net sales growth of 7.0 to 8.0 percent; a comparable same-store sales increase of 2.5 to 3.0 percent; net unit growth of 35 stores requiring capital expenditure of $225 to $245 million.

The company posted total assets of $3,472 million including $589 million as goodwill and intangibles with the balance sheet detailing long-term debt and lease liabilities of $1,612 million.

Sprouts Farmers Market had a market capitalization of $6,480 million on May 2^nd and has traded for the past 52-weeks over a range of $32.12 to $74.03 with a 50-week moving average of $63.05

Om May 1^st SFM closed at $66.03 and opened post-release on the following day at $73.00, up 10.6 percent. Sprouts generated a trailing twelve-month operating margin of 7.9 percent and a profit margin of 4.3 percent. Return on assets was 8.1 percent and the return on equity attained 2 percent.

Sprouts employs 35,000 and operates more than 380 stores in 23 states.

The April 27^th tornados impacting Oklahoma seriously damaged the Marietta, OK. Distribution Center operated by Dollar Tree.  Fortunately, there were no injuries among the 456 employees.

As a result of the extensive damage, Dollar Tree has drawn on the resources of other Company DCs to maintain deliveries to over 600 stores serviced by the affected location.

Mike Kindy, Chief Supply Chain Officer at Dollar Tree stated, “we have a high-performing distribution network and have activated our other distributions centers to support our stores in the region.”

Noelle O’Mara was appointed as an Executive Vice-president of Conagra Brands and as president of New Platforms and Acquisitions.  She will be responsible for strategy, product innovation, and in-market execution. 

From April 2016 through September 2022, O’Mara was co-president of Prepared Foods at Tyson Foods.  Previous experience includes positions at Kraft Foods Group as a brand manager and business director.

With funding provided by the Illinois Soybean Association, USAPEEC has again partnered with the National Autonomous University of Mexico to promote U.S. egg products through education. The program will comprise five modules covering 120 hours of virtual training and one in-person session.  The program will run from mid-April through the end of July.  Twenty-one participants have registered including egg industry professionals and veterinarians involved in food safety.  Programs to promote processing of egg products benefit U.S. producers, given the importance of Mexico as a significant second-ranked but price sensitive importer of U.S. shell eggs most of which are processed in Mexico. Imports are based on national demand over domestic production.

In 2023 Mexico imported 15 million dozen shell eggs valued at $17.4 million up 16 percent in volume but down 7 percent in value compared to 2022, with a unit price of $1.16 per dozen. Mexico imported 4,704 metric tons of egg products in 2023 valued at $22.8 million, up 64 percent in volume and 63 percent in value compared to 2022, with a unit value of $4,847 per metric ton.

In a release dated May 2^nd, Zoetis (ZTS) reported on results for the 1^st. quarter of FY 2024 ending March 31^st.  For Q1 revenue was above analysts’ estimates by 1.9 percent and the Company beat on EPS by 3.4 percent.

Zoetis reported net income of $599 million on revenue of $2,190 million.  These values are compared with Q1 FY 2023 with net earnings of $552 million on sales of $2,000 million.  Diluted EPS increased from $1.19 in Q1 FY 2023 to $1.31 for the most recently completed quarter.

For Q1 2024 gross margin was 70.6 percent (70.6 percent Q1 2023); operating margin attained 33.2 percent (38.2 percent)

In reviewing product segments, for Q1 2024 total revenue from companion animal products amounted to $1,450 million (65.2 per cent of Company sales) compared to revenue from livestock products amounting to $720 million (32.8 percent).  The remainder was derived from other products and services. 

Domestic U.S. sales of livestock products at $265 represented 36.8 percent of total livestock revenue of $720 million, down 5.0 percent from Q1 2023.  International sales of livestock products represented 45.1 percent of non-U.S. Company revenue of $1,007 up 3.0 percent from Q1 2023.  Poultry products and services at $139 million represented 19.3 percent of livestock sales of $720, unchanged from Q1 2023 and comprising 6.3 percent of total Company sales.

In commenting on Q1 results, Kristin Peck, CEO stated, “We achieved 16% revenue growth in the U.S. and 8% operational revenue growth internationally, and our companion animal portfolio grew an impressive 20% operationally, fueled by our innovative franchises in pet parasiticides, osteoarthritis pain and dermatology. Our scientific breakthroughs have firmly established us as trusted and preferred partners to our customers, and we will continue to invest in the talent, pipeline and capabilities that will support future growth."

Ms. Peck continued “Our innovation continues to be our differentiator, and we'll continue to lead the way by investing in areas of unmet need to advance care for animals. The strength of the human-animal bond and the growing demand for a secure and sustainable food supply reinforce the essential nature of the animal health industry and our innovative portfolio. We will continue to deliver strong growth in 2024, while investing for the future."

Zoetis posted guidance for fiscal 2024 including revenue ranging from a slightly reduced $9,050 to $9,200 million and net income from $2,450 to $2,495 million with diluted EPS ranging from an unchanged $5.34 to $5.44.

On April 28^th Zoetis announced sale of the livestock feed additives and water-soluble portfolio and six manufacturing plants to Phibro Animal Health for a consideration of $350 million. Ms. Peck noted “We remain committed to providing innovative solutions to our livestock customers. We believe that the long-term value of the transferred portfolio will be fully realized with Phibro Animal Health which will continue to expand its reach given their strong relationships with customers worldwide.”

The Company posted total assets of $14,348 million on March 31^st 2024 of which $4,854 million represented goodwill and intangibles against long-term debt and lease obligations of $6,746 million. Market capitalization was $76,325 million on May 3^rd. Zoetis has traded over the past 52-weeks in a range of  $144.80 to $201.92 with a 50-day moving average of $170.04. The Company achieved a trailing twelve-month operating margin of 36.6 percent and a profit margin of 27.4 percent.

Publix, a privately held, employee-owned corporation, released limited Q1 FY 2024 financial data on May 1^st for the period ending March 30^th 2023.  Sales for Q1 2024 attained $15,100 million, up 5.0 percent from Q1 2023 at $14,300.  Net earnings were $1,366 million compared to $1,241 million in Q1 of 2023, up 10.1 percent. Earnings per share attained $0.33 compared to $0.32 in Q1 2022. Comparable same store sales were up 2.8 percent compared to Q1 2023.

Net margin was 9.1 percent compared to the Kroger Company and Albertsons Corp. at  2.0 and 1.5 percent respectively for Q4 2023. High-end specialty chain Sprouts Farmers’ market posted a net margin of 6.1 percent for the most recently completed quarter.

According to the Publix SEC Q-10 submission, total assets on March 30^th 2023 were $35,764 million with long-term debt and lease obligations of $2,649 million.

Share price was adjusted upward from $15.20 to $16.25 on May 1^st.

 In commenting on results CEO Kevin Murphy stated “I’m proud of our associates, the owners of Publix, for continuing to make shopping a pleasure for our customers,”

The USAPEEC, using funding provided by the Kansas Soybean Commission sponsored an innovation and development of new products contest on April 15^th at the Universidad Nacional Autónoma de Nuevo León

The event was attended by 43 food science students divided among 19 teams.  Students presented their innovative egg products to be considered by judges. 

After evaluation, a winner will be announced on May 13^th.

Pennsylvania State University has initiated an apprenticeship program to provide training for students entering livestock production.  The program will be managed by Penn State Extension and will provide 2,000 hours of on-the-job training extending over a year.  Employers will hire apprentices and provide wages and benefits during training. 

Courses will include basic instruction on the care and management of domestic animals and specific classes on biosecurity, welfare and feeding for selected tracks covering dairy, swine or poultry.  Instruction will also be provided on communication, time management, and related areas. The program will commence in mid-June with initial courses in animal care and general skills.

The Penn State program, should be emulated by other Land-Grant universities with appropriate adaptations for regional needs. It would be interesting to determine whether USDA funding is available for training given the prodigious volume of grants extended to support various initiatives during the current Administration.

Radical economic reform measures introduced by President Javier Milei resulted in protest strikes effectively terminating export operations among terminals of the Ports of Rosario.  The two unions involved included both soybean crushing plants and marine activities.  At issue is a provision to lower the salary level exempted from income tax together with other labor reforms recently approved by the Lower House of the Argentine legislature.

The austerity program introduced by President Milei, an economist has the support of the population that has suffered from hyperinflation induced by the corruption, profligate spending and socialistic policies of previous Peronista administrations.  As of the being of May, the Ports of Rosario are nonfunctional according to the Chamber of Grain Exporters and Processors.  The union representing workers in oilseed processing will await the result of votes in the Argentine Congress before deciding on either termination or prolongation of the strike.

Strikes among workers at crushing plants and related maritime activities could seriously impact exports and raise prices for soybean meal and corn on international markets with an indirect effect on U.S. producers.

The transaction by which Phibro Animal Health acquired the Zoetis portfolio of feed additives is valued at $350 million. It is anticipated that the deal will be completed during the second half of 2024.  The acquisition includes 37 product lines marketed in 80 countries together with six manufacturing locations, four in the U.S., and one each in Italy and China.  Three hundred employees are expected to transition from Zoetis to Phibro. The transaction will increase annual sales by Phibro Animal Health to over $1.4 billion.

Jack C. Bendheim, Chairman and CEO of Phibro Animal Health stated, “This investment will enhance, diversify and broaden our portfolio globally and help us to deliver value to our customers and to our shareholders.”  He added, “We believe our cash generation will allow for continued investment into our higher growth businesses of nutritional specialties, companion animals and vaccines.”  It is anticipated that Zoetis and Phibro Animal Health will cooperate to achieve a smooth transition and continued supply of products.

Grant Krueger, owner of the Union Hospitality Group, comprising three restaurants, has legally challenged the rule issued by the Arizona Department of Agriculture mandating cage density and cage-free housing.

The Plaintiff stated that his Union Hospitality Group purchases close to 600 cases of eggs each year with an anticipated increase in cost in the region of $4,000 following the transition from conventional cages to alternative systems. In effect a nominal increase of 70 cents per dozen over his claimed volume would amount to $12,600 annually compared to cage-derived eggs

The Department of Agriculture as Defendants maintain that the Plaintiff alleges hypothetical future harm, and lacks standing. The regulation applies only to egg producers who may or may not increase the price of eggs to either food service or retail customers. 

To understand the substance of the case, some history is instructive.  In 2021, World Animal Protection indicated that it would mount a voter initiative in Arizona similar to California Proposition #2 and #12 to ban conventional cages.  The largest egg producer in the state at the time motivated legislation that would take effect in 2025. Despite the considerable lobbying clout of the egg producer the legislative initiative floundered. This resulted from concerted opposition by the Arizona Farm Bureau Federation.  The Department of Agriculture, recognizing the inevitability of a ballot initiative, introduced a rule that would have achieved the same objective as a law and accordingly promulgated housing standards.

In pleadings before the Maricopa County Superior Court, Assistant Attorney General Joshua Whitaker maintained that the rules issued by the Department of Agriculture are within the authority of the Agency.  According to Whitaker, the Legislature has authorized the Agency and Director, “To adopt rules for poultry husbandry in the production of eggs sold in the state.”  This apparently is the legal justification for the Agency to establish and issue standards conforming to other states.

The lawsuit does not address questions of welfare as a justification for changes but the case addresses the legality of the rules issued by the Arizona Department of Agriculture.

Colorado Bill SB24-043 that would have legalized sale of raw milk in the state has apparently fallen victim to the legislative calendar and the emergence of bovine influenza-H5N1.  The Bill will not be considered during the current legislative session although it will be reintroduced in 2025.  Prospects for passage dimmed when the Bill was incorporated into a separate measure dealing with water resources and agriculture.  The Colorado Raw Milk Bill, or “Freedom to be Infected” Bill although enthusiastically sponsored in both chambers, received only one hearing.

According to statements by USDA and FDA, irrespective of the H5N1 status of herds, pasteurization will effectively destroy influenza virus in milk.  Recent surveys have detected viral RNA in commercial milk applying PCR assay but the product was non-infectious. Pasteurization effectively destroys the viability and infectivity of the virus.  Fear of contracting infection from raw milk should lead raw milk advocates to boil their supplies before consumption thereby obviating the justification for purchase in the first place. It is simply safer, cheaper and more convenient to purchase commercial milk that is pasteurized resulting in freedom from bacterial and viral pathogens. There is no scientifically justifiable advantage from consuming raw milk compared to pasteurized milk but with all the risks of acquiring multiple infections. Unfortunately what was an entrenched quaint preference limited to a few misinformed consumers, has recently been politicized as a “freedom” issue.

Sam’s Club will eliminate waiting in line at exits while employees reconcile receipts with purchases in baskets.  Computer vision technology has been deployed in an extensive trial in 120 Clubs since January.

After payment at a register or using Scan & Go, customers proceed to an exit where a combination of computer vision and AI verifies payment for all items.

Todd Garner, Chief Product Officer for Sam’s Club, stated, “Both exit technology and Scan & Go are driving new levels of convenience and raising member satisfaction.”  He added, “We are able to seamlessly deploy technology at scale across 600 Clubs nationwide, revolutionizing the checkout experience.”

It remains to be seen whether competitors Costco and BJs introduce similar technology.  From personal experiences, this commentator has never encountered a delay of more than 30 seconds in exiting a Costco Club usually burdened with dozens of items of various cost and size.  Is Walmart deploying the technology because it is available, as a deterrent to theft or do they have a real problem of shrinkage or alternatively under-scanning of purchases at check-out stations, or all of the above? Time spent by customers waiting in line is probably the least important among motivations.

Subway is now under the ownership of Roark Capital, a private equity firm based in Atlanta.  The Subway chain comprises 37,000 restaurants in 100 nations, all owned and operated by franchisees.  Subway stores specialize in made-to-order sandwiches, wraps, salads and bowls.

The acquisition of Subway followed an intensive program of menu innovation and promotion.  John Chidsey, CEO of Subway, stated, “The entire Subway system is excited that our sale to Roark is complete.  He added, “As we look to our future, our growth journey is far from over.  With a continued strategic focus on delivering better food and a better guest experiences, our next chapter will be the most exciting yet.”

Roark Capital has more than $38 billion in equity under management, specializing in franchise and multi-location businesses in the restaurant and consumer sectors.

Katelyn Jetelina, PhD., MPH, Editor and distributor of the YLE (Your Local Epidemiologist) Newsletter has been named one of the TIME100 Most Influential People in Health for 2024.  In a statement recognizing the distinction, Dr. Jetelina noted, “It is with overwhelming gratitude, a little embarrassment and incredible excitement to share that YLE made it into the TIME100 Most Influential People in Health.”  She noted that, “For the past few years, I have felt like I am going through the jungle with a machete to carve out a new path that I believe so deeply needs to be paved: One that empowers people to make evidence-based health decisions by bringing them on the scientific discovery ride.”

The newsletter originated as an E-mail to faculty and students four years ago.  It now has over 400 million views in 133 nations.

Dr. Jetelina is a leader in translating scientific discovery and epidemiologic realities for professional and public understanding.  She was instrumental in dispelling many myths and misperceptions during the COVID years. Above all, her logic and ability to communicate bridge the gulf between laboratories and everyday life. 

A keen advocate for immunization, the YLE newsletter has positively influenced decision makers and politicians saving lives and reducing the impact of communicable diseases.  EGG-NEWS frequently quotes from the YLE Newsletter since it is an authoritative and reliable source of information.  Subscription to her newsletter is strongly endorsed especially for those in our industry that must communicate complicated concepts relating to communicable and foodborne diseases and their prevention to customers and the media.

After a five-year period of operation, Walmart has decided to close all 51 of their health clinics and to discontinue telehealth services.  The company noted that the business was unprofitable mainly due to difficulty in obtaining reimbursement. The decision will impact 40 health centers in Florida and Georgia and the remainder among four southern states.

 Walmart health centers were established in 2019 in selected Supercenters offering medical and dental services and urgent care at competitive prices.  Experience gained over the five-year period will be applied to 4,600 pharmacies and 3,000 vision centers.  Walmart intends to continue with immunizations and diagnostic services including health screenings.

The action by Walmart follows the decision by Walgreen’s to close 160 Village-MD primary care clinics resulting in a $5.8 billion impairment charge.

On May 8^th Costco Wholesale Corporation (COST) reported sales for April 2024.  For the period, sales attained $1,980 million up 7.1 percent from the value of $1,848 million during the corresponding month in 2023.

Same store sales (excluding fuel and foreign exchange) increased 5.2 percent for the U.S.; 5.9 percent for Canada and 7.0 percent for international warehouses.  Overall, same-stores sales advanced by 5.5 percent and E-commerce was 14.8 percent higher.

Costco Wholesale Corporation operates 876 warehouses with 604 in the U.S.; Canada, 108; Mexico, 33 and the remainder in nine other nations.

Costco closed on May 8^th before release of the data at $763.41, but was up on May 9^th post- release at 10H30 to $772.90 with a market capitalization of $338,580 million. COST has traded over a 52-week range of $476.75 to $787.08 with a 50-day moving average of $731.83.

The U.S. Food and Drug Administration has issued Guidance for Industry (GFI) #187A Heritable Intentional Genomic Alterations in Animals:  Risk-Based Approach and a revised draft GFI #187B Heritable Intentional Genomic Alteration in Animals:  The Approval Process.

In addition, the FDA has entered into a Memorandum of Understanding with the U.S. Department of Agriculture to clarify their respective roles and responsibilities in regulation of intentional genomic alteration.

At the outset, the FDA jurisdiction over regulation of genetic modification should be limited to a judicial minimum.  The Agency does not have the staff or expertise to understand the realities of genetic modification, whether by insertion or deletion of genes in livestock.  There is obviously a justification for the FDA to be involved in genetic modification where the end product is a biopharmaceutical produced in eggs or milk. 

Genetic modification of animals intended for food is a separate issue to biopharmaceuticals and is beyond the competence of the FDA.  This is denoted by the almost two-decade process of approval of Aquabounty® salmon.  Inability of the FDA to make considered decisions regarding approval within a reasonable time has placed the U.S. at a disadvantage with respect to the E.U. and China.  The practical application of CRISPR offers advantages to breeders in developing livestock with resistance to disease, adaptability to heat and benefits yet to be determined.

The April 2024 Memorandum of Agreement between the FDA and the USDA is intended to establish policies and procedures to enhance the exchange of information with the objective of enabling an efficient, seamless regulatory process.

The FDA is encouraging developers of intentional genomic alteration to approach the Agency early in their research and development or to discuss the specific risk profile of the proposed product and the appropriate pathway for commercialization.  This is a clear admission of technological ignorance, and that the FDA intends to continue using the established playbook of delay in making a decision.

The FDA underperforms in the areas over which it has direct mandates including regulation of imported foods, inspection of foreign and domestic pharmaceutical plants. The FDA has a rap sheet of failures including the baby formula debacle, lead contamination of infant foods and failure to suppress bacterial foodborne infections associated with produce.

EGG-NEWS has long campaigned for a separate food safety agency independent of both the USDA and the FDA.  Advances in genomic alteration of livestock justify extreme changes in the structure and implementation of food safety regulation.