Shane Commentary


Do Trends in Agribusiness Favor GMO-Free Eggs?

Oct 28, 2016


During the past six months, the agricultural biotechnology industry has witnessed significant merger and acquisition activity.  DuPont and Dow Chemical Company are combining with a subsequent three-way split. Syngenta AG was purchased by China National Chemical Company earlier in the year. This past week the long-awaited purchase of Monsanto by Bayer was announced. 


These transactions will create fewer more powerful companies with complementary product lines comprising seeds and pesticides to provide synergy.  Against this presumed advancement, is the reality that there is an over-production of corn, soybeans, cotton and other agricultural commodities which has lowered prices both in the U.S. and in the international market. Effectively farmers have now become the victims of their increased efficiency and yields.

 The cost of seed has risen since the introduction of GMO cultivars.  Soybean seeds have doubled in price over a decade and corn has gained 63 percent during the same period. Increases in yield have not kept pace with escalation in seed costs. It is estimated that over the past ten years, soybean yield has increased by an average 4 percent and corn by 20 percent.

The disparity is due to a number of factors including the law of diminishing returns and climatic extremes including the drought of 2013. Resistance to glyphosate among significant species of weeds has also impacted cost of production using GMO seed, requiring alternative herbicides to sustain projected production in many areas. 

Farmers are questioning the costs required to combine GM seeds with compatible herbicides.  Depending on location including soil type and rainfall, some farmers have determined that it is more profitable to forgo yield but reduce the cost of production. They are sowing non-GMO seed and selectively applying fertilizer and herbicides especially in areas where pests are not a significant detractor from productivity. 

This trend may favor availability of non-GMO corn and soybeans at prices slightly above genetically modified ingredients but at a far lower price than USDA Certified Organic equivalents.

Providing that large-scale egg producers can contract with farmers to deliver certified non-GM corn and extruded non-GM soybeans it will be possible to produce non-GM fed, cage-free eggs which would sell at a premium to conventional cage-free eggs. This product category would certainly be cheaper than certified organic especially if proposed outside access rules are mandated, considered at this time to be an inevitability.

A new category of non-GM eggs could be produced from flocks housed in aviaries or on slatted floors but without outside access.  If the category were to be described as “non-GM grain fed”  synthetic methionine and lysine could be used to supplement diets.

What will be required is a concerted attempt by a producer group or consortium of large egg producing companies to promote the category as either a specialty egg or designated brand. The eggs from flocks fed non-GM grains would be even more competitive against current specialty eggs if other enrichments including DHA, lutein and vitamins are incorporated into diets, reflecting in enhanced nutrient value.

Clearly the U.S. egg industry should be aware of trends in row-crop agriculture and the reality that low prices for commodities may persist for as long as ten years, absent a major drought. Since more GM-free corn and soybeans will be available a category intermediate between certified organic and “specialty” could be created to the detriment of both lower and higher-priced products.

As Pasteur remarked “opportunity comes to the prepared mind.”



Oct 21, 2016

Bob Langert


Guest Commentary by Bob Langert

Bob Langert, retired from McDonald’s Corporation where he was a Vice President for Sustainability, involved in the supply chain and aspects of welfare and environmental issues reflecting on corporate responsibility, has established his consulting company “Mainstreaming Sustainability” and he edits “Green Biz”. Bob recently shared his perspective on our Industry at a national meeting. A summary of his talk is reproduced with his cooperation for the benefit of subscribers to EGG-CITE.  Bob can be contacted at

I am convinced that these tough times offer OPPORTUNITY, for those that get on their front foot, recognize and accept the Changing Consumer, the Mainstreaming of Sustainability, and want to change from defense to proactivity.

So based on my experience (the slings and arrows; the successes and mistakes), I offer a dozen tips to turn chaos into opportunity.

Of course, bred in speed at McDonald’s for 33 years, my tips are a dozen FAST ones.


1: Put into practice Anticipatory Issues Management

If you wait too long on an emerging issue, and let the media, politicians and lawyers get involved, you’ve lost. You are forced to do things that are costly and not scientifically based.

2:  Focus on the Smart Zone

There is plenty to work on that is in the “smart zone.”   You can’t just “comply” with laws anymore.  You need to do more.  Society expects it.

3:  Transform yourself into the mind of opposition, and respect them.

I was challenged early on by the animal rights movement. Was I apprehensive about how to handle the leaders of the animal rights movement? You bet.

You might find out you have more in common than you think. Why not meet? Why not learn from them? Whenever you get into a human relationship, the other side sees you as a human being, not as a cold corporate robot. Be sensitive to their side. You care about the same overarching issue. For example, I cared very much about good farm animal treatment.  Meeting the “enemy” does not meet you agree with them.  Show respect.

4.  Make NGOs your best friends.

I cut my teeth on sustainability pressure in the late 80s, when McDonald’s for the first time in its history was attacked and vilified — at the time, over packaging and waste.

Panic set in. McDonald’s was the lightning rod. We felt sorry for ourselves.

Sound familiar?

So, what’s the best way to deal with this kind of pressure, bullying and shaming campaigns? Sit back and take it? Hide? Play defense?

No! What I learned back has laid with me like concrete ever since:  Make best friends with the right partners.

Pick a credible partner, as McDonald’s did with the Environmental Defense Fund.  We went from villain to environmental leader. We even got an award from the White House.

5:  You HAVE to work with NGOS

NGOs are the sustainability thermometer for the consumer. It’s the NGOs that consumers trust, whether you like that or not. 

Fortunately, there are lots of good NGO choices.

I rated NGOs from 1-10, with 10 being extreme, and 1 being corporate friendly.  I wanted to work with the 5–7s — the NGOs that had credibility, integrity and independence but were open to market-based solutions and to helping companies succeed. 

6.  Your reputation is more about How vs. What you do

When a stakeholder judges your company, he or she will form an opinion of you as a leader, and your company overall, on your openness, honesty, and transparency.

Your reputation has much less to do with what you do than with how you do it.

It’s okay to make mistakes and show imperfections. The process of trying is what matters. It shows you care.

7:  Open up, and develop thick skin

Food and Ag companies are under a barrage of false and misleading views of where “sustainable food” should go.  It’s organic. Local.  Non-GMO.    It is so simplistic, SO WRONG.   But we sit back and let “them” dictate the agenda, and define what sustainable food is and isn’t.  

You can’t TELL your story anymore. I hear that phrase all the time:  “Tell our story more.”

No.  We need to SHARE our story.  We need to engage, get involved in the dialogue.  Accept the criticism, too.

8:  Transparency Builds Trust

Given the transparent world we live in, believe it or not, the idea of “getting caught doing good” is still prevalent.

Food companies need to do an about face.  Open up, radically.  Show them you have nothing to hide.   If you don’t like something on the front page of the NY Times, change it. 

We are only in the dawn of transparency.  Facebook, the IPhone, and Twitter are only 10 years old!


Cargill Takes Lead in Non-GMO Ingredients

Oct 14, 2016


Recognizing the growth rate for food products marketed as non-GMO content, Cargill has introduced three new items for food manufacturers. These include Clear Valley® high oleic sunflower oil, Clear Valley® expeller-press high oleic sunflower oil and IngraVita™ high oleic sunflower oil.  Packaged Facts estimates that in 2016, non-GMO foods will attain a sales value of $19 billion up from $350 million in 2010.


Mike Wagner, Managing Director for Cargill Starches and Sweeteners, North America said “Consumer demand for non-GMO food and beverages is growing, and Cargill is responding”.  He added “We’re delighted to work with Non-GMO Project, the leading verifier of non-GMO products in the United States.”

Megan Westgate, Executive Director and founder of Non-GMO Project stated “Our mission is to preserve and build sources of non-GMO products, educate consumers, and provide verified non-GMO choices.”

It is noted that USDA-AMS has been authorized to establish a Federal program to certify non-GMO products paralleling the commercial activities of the Non-GMO Project.

Scientific studies have shown that there is no difference in either nutrition or safety between non-GMO and GMO-derived ingredients.  This said, there is consumer resistance among high-income demographics against GM ingredients, generating a premium for non-GMO products.

It is a matter of record that 90 percent of corn and soybeans grown in the U.S. are of GM origin.  High costs for non-GMO ingredients are associated more with segregation and traceability than with cultivation.  Costs for GM crops are higher with respect to seed but offset by increased yields and lower use of pesticides and herbicides, depending on cultivar.


HSUS Attacking Checkoff Programs

Oct 14, 2016


In their efforts to oppose intensive livestock production, HSUS has recognized the importance of promotional activities arising from checkoff programs.  Recently the HSUS filed lawsuit against the Office of the Inspector General of the USDA seeking release of documents relating to audits of the beef checkoff including the relationship with the National Cattlemen’s Beef Association.


By creating a barrage of lawsuits, the HSUS is attempting to impede legal activities of Boards promoting animal-source products.  Discovery in the process of lawsuits provides the HSUS with information to be used against both commodity Boards and producers. The aggressive approach by the HSUS generates publicity encouraging support among donors.

It will be remembered that the HSUS successfully restrained the American Egg Board from expending checkoff funds to oppose Proposition #2 in California in late 2008 before the ballot.  The American Egg Board was further embarrassed by revelations obtained through Freedom of Information Act requests concerning attempts to restrain marketing of mayonnaise manufactured without eggs by Hampton Creek.

It can be expected that HSUS will continue to oppose checkoff programs which are recognized as being instrumental in promoting the image of livestock commodities to the benefit of both producers and consumers.


Conversion to Cage-Free – Time for a Reality Check

Oct 14, 2016


Now that the approximately 160 customers representing the membership of the FMI, NCCR, GMA, NRA and independents have committed to a transition to cage-free egg production, the U.S. egg production industry is faced with the practical and financial realities of replacing conventional cages over a ten-year period.

EGG-CITE has previously commented on the magnitude of the cost which may amount to more than $10 billion to rehouse more than 200  million hens.


Chad Gregory, president and CEO of United Egg Producers has taken the initiative to bring together the parties involved to review how the transition can be achieved with minimal disruption, wasted effort and expense.  We have already had a false start with preliminary evaluation and then rejection of enriched colony modules. The few U.S. adopters and virtually all EU producers who elected for the system to replace conventional cages soon found their investments were obsolete before their newly-purchased systems were depreciated.  Obviously we do not wish to be in the same position in terms of aviaries and alternative floor systems. Accordingly the industry needs guidance, standards and assurances from customers, many of whom have no idea of the practical or financial implications of their market-driven demands.

On September 21st a meeting took place with the Secretary of Agriculture, Tom Vilsack together with a range of stakeholders including producers, welfare organizations and customers represented by the GMA, FMI, and NRA to review the current situation and future action.

Decisions relating to welfare aspects of housing and equipment are reviewed by the UEP Scientific Committee and their recommendations are then referred to the Producer Committee concerned with welfare.  A series of exchanges have taken place extending from late June onwards. It is expected that by the end of October, there will be finality on the following considerations:-

  • Definition of descriptive terms: These include “cage-free”, “floor systems”, “outside access”, “pasture housed” and possibly other label descriptors.
  • The acceptance of “convertible aviary modules”:  It is generally accepted that it is necessary to confine replacement pullets to modules for a period of up to three weeks after transfer so that they can accommodate to the system, find feed and water and explore nest areas.  Thereafter flocks can be released to move around the entire house with access to litter and to transit among tiers using perches.  It is essential that all stakeholders including producers, customers and the two principal welfare organizations, the American Humane Association and Humane Farm Animal Care agree on standards for equipment and management procedures.

United Egg Producers representing over 95 percent of the egg production industry is taking the lead in motivating the various organizations and the USDA-Agriculture Marketing Service to achieve consistency and a common understanding of the issues. Obviously a solid foundation will be required if producers are to commit large sums of money to new facilities or to modify existing housing, representing an expenditure of up to $40 per hen on average, accepting 2016 values. 

Given the prospect of acceptable standards for design of housing and installations and their operation, the industry can progress to a rational program of planned conversion.  It goes without saying that reluctance to commit to expenditure is currently complicated by the price for all categories of eggs which have been sold below production cost for at least the past seven months and the situation is likely to continue through late fall.



Oct 14, 2016


Faced with the inevitable spread of Zika virus infection and its consequences to the unborn, research and development of appropriate vaccines has received both funding and attention.  In a perspective article, Drs. Mark Lipsitch and Benjamin Cowling of the Harvard T.H. Chan School of Public Health and the University of Hong Kong respectively make a strong case for the development of Zika vaccines*. The researchers consider both practical and ethical considerations in testing vaccines which may or may not require administration of placebos and random selection of subjects.  In the case of evaluating prospective vaccines in 2015 against Ebola virus infection which has a high fatality rate, the ethics of administering a placebo vaccine were questioned.  In the case of Zika virus, which is a relatively mild infection, other than for pregnant women, double-blind studies are feasible.


Dr. Henry Miller of the Hoover Institute has raised important issues regarding widespread application of a Zika vaccine.  He raises the important question of safety and the ability to detect undesirable outcomes of vaccination with limited-scale trials.  Miller notes that Zika and Dengue fever are both caused by flaviviruses and that an immune responses to a second exposure to Dengue virus results in a severe reaction.  He suggests that Zika vaccination on a wide scale may result in an undesirable immune response if recipients are subsequently exposed to Dengue virus.  Zika virus is also associated with Guillain-Barre Syndrome, an autoimmune condition causing  transient paralysis of varying severity.  It will be necessary to confirm that Zika virus vaccines do not elicit an autoimmune response as occurred with the “Swine Flu” vaccine in 1976.

*Lipsitch, M. and Cowling, B. J. Zika Vaccine Trials. Science 353:1094-1095 (2015)



Shortage of Agricultural Workers Impacting Seasonal Crop Production

Oct 7, 2016

A CNN Money article by Octavio Blanco posted on September 30th claims that 50 percent of U.S. farmworkers are undocumented immigrants.  From close involvement in the industry it is evident that workers employed by integrators in processing plant, company-owned poultry houses and packing facilities are invariably subject to appropriate scrutiny including E-Verify to determine that they are legally entitled to work. 

The problem highlighted relates to workers employed in migratory and seasonal agriculture including picking of strawberries, tomatoes and melons, especially in California.  Due to greater scrutiny by ICE, wages have increased for documented workers and are apparently in excess of the $10 per hour minimum wage in California.  To maintain productivity and to employ adequately staffed work crews, farmers frequently provide overtime which is now mandated, in addition to shade breaks every hour and other benefits.

Since labor is becoming a rate-limiting factor in production of fruit and vegetables, Departments of Agricultural Engineering at Land Grant colleges are developing machinery to relieve financial pressure on farmers who must compete with less expensive imported fruit and produce.

The poultry industry has advanced with mechanical feeding, egg collection and even harvesting of broilers applying advanced technology. Sophisticated installations in egg packing and meat plants ensure a high level of productivity, displacing manual labor.

The disinclination of unemployed U.S. citizens to undertake agricultural work is difficult to understand.  Perhaps social benefits and entitlements and a concentration of unemployed in urban areas are a disincentive. Should we revert to programs introduced during the Great Depression such as the NRA to reduce unemployment and contribute to national productivity at the farm level?  Are there alternatives to reliance on neighboring countries to provide workers to produce labor-intensive food?


Is Reality Closing In on Hampton Creek?

Sep 23, 2016


A recent investigation by Bloomberg authored by Olivia Zaleski, Peter Waldman and Ellen Huet, suggests less than ethical and even fraudulent practices by Josh Tetrick, founder, CEO and driving force behind Hampton Creek. The Company has apparently deceived investors by inflating sales of their major product, an egg-free ersatz mayonnaise branded as Just Mayo®.

In August it was revealed that the Company employed agents (“Creekers”) to purchase and dispose of product on the shelves of supermarkets including Whole Foods Market and Safeway.


Josh Tetrick

Tetrick acknowledged spending $77,000 on the initiative which he claimed was for quality control purposes- an unlikely explanation.

In reality according to disaffected members of his army of “Creekers” the objective was to rapidly and clandestinely move product from shelves to create the impression of consumer demand, especially in advance of meetings with potential investors.

Bloomberg maintains that the buy-backs actually attained $1.4 million over a 5-month period in 2014 when total sales of $1.9 million were recorded. The expenditure was disguised on a P&L statement reviewed by Bloomberg journalists as “Inventory Consumed for Samples and Internal Testing”. It is possible that in July 2014 with sales of $472,000 the Company repurchased product to the value of $510,000.

The initial revelation of the repurchases prompted news of Department of Justice and Securities and Exchange Commission investigations into possible fraud. A previous investor Ali Partovi withdrew from the company after an association of nine days condemning unethical practices including false claims on technology, and unrealistic sales forecasts. He is quoted by Bloomberg as warning Tetrick in an E-mail “It’s only a question of time before the consequences catch up with us” He also apparently stated “If an investor discovers it with due diligence we could lose financing and run out of cash. If they don’t, they’ll realize that they were duped within months and they might have a case for fraud”

Hampton Creek has evolved through two previous iterations and was founded on the principle of displacing the egg production industry by using plant-based substitutes. Naturally the fingerprints of the HSUS are all over the origin of the company with the involvement of Josh Balk and an alleged investment of seed money.

Tetrick through Hampton Creek has continually made unsubstantiated claims for his technology although he has not delivered either a range of products,achieved market penetration or financial return.

His history of outlandish claims include:-

  • A 30 oz. bottle of Just Mayo® saves 80 gallons of water compared to conventional mayonnaise prepared with eggs
  • A Hampton Creek cookie baked without using eggs in the recipe saves 7 gallons of water
  • Hampton Creek has the potential to “liberate” all hens worldwide
  • Computerized databases on leguminous plants represent the future of food production

During his tenure as CEO of Hampton Creek Tetrick has raised and apparently burned through nearly $130 million of investors’ money. These promotors and sources of financing should be looking closely at their venture and relate indifferent progress with the obvious hallmarks of  deception:-

  • Lack of credible scientific support for claims and failure to recruit and retain scientific and financial talent
  • Extravagant and unrealistic projections of sales and profit
  • Failure to produce marketable products to displace eggs despite expenditure on “research” rising to the level of “monkeys on typewriters”
  • Allegations of improper personnel practices and relationships
  • Excessive publicity in fringe, business and social media with copious “name dropping” including a  refuted claim that Bill Gates was an early investor
  • Deliberate contravention of FDA label requirements for mayonnaise and unsubstantiated health claims on websites
  • Embellishment of personal credentials.

Despite the fact that Whole Foods Market was an early supporter of Hampton Creek, Just Mayo is absent from their shelves in the Research Triangle of North Carolina which has an environmentally friendly, welfare and health-conscious demographic. 

I believe that we have seen this movie before- Elizabeth Holmes starred in Theranos which had a similar script and probably will have a similar ending to Hampton Creek but don’t expect a sequel.



Sep 21, 2016


As we move from summer into fall, it is appropriate to start planning for immunization for all personnel including employees, contractors and their workers coming into contact with poultry or their products.

The CDC recommends annual vaccination for all ages.  An adequate supply of the 2016/2017 seasonal vaccine containing three sereotypes of avian influenza is now available.


Apart from reducing absenteeism and lowering health care costs, influenza vaccination is necessary for everyone coming into contact with live poultry.  Recombinant events could occur if workers infected with a human strain of influenza come into contact with flocks which may be incubating avian virus.  Although the chances of this event are remote, the simple expedient of vaccination should reduce the small probability even further.


Research on Smothering

Sep 16, 2016


A project funded by a multinational QSR in the UK attempted to determine the cause of sporadic episodes of mortality in non-confined hens.  The first part of the project completed in 2014 showed that free-range hens display behaviors that culminate in smothering both in and out of houses.  A recent phase of the project involved a specific aspect of mortality in which hens smother in nest boxes. 

The QSR involved has “urged nest box manufacturers to consider the issue of hens smothering in future designs.” Frequently observers invoke “breeding” as a solution when problems in production or management arise. Without defining specific causation and mechanisms these generalizations are simply passing off the problem to others.


The first point to be recognized is that hens are reticent to make use of outside access since they are programed to avoid aerial predators.  In their native state, the progenitor of modern chickens, the jungle fowl of Indonesia, was protected by foliage and seldom moved into the open.  We are now taking birds that have been breed for fifty years in cages and are subjecting them to an environment for which they are ill-equipped to survive. 

Flocking when confronted with a threat is a natural response.  There are obviously many causes for smothering and there is obviously no simple common solution.  With respect to nest box smothering, this is frequently encountered in improperly managed young flocks which have not been socialized and in which there is a high level of aggression.  Persecuted pullets, usually underweight, spend most of the day huddling in nest boxes in the company of similar low-status flockmates. Smothering especially at the end of a nest box row, is a frequent occurrence in abnormal flocks from transfer through 40 weeks of age. At this time pullets at the bottom of the peck order have either died or have adjusted to their status.

In one instance, nocturnal smothering was a serious problem in a specific house which was fitted with skylights based on the fact that the owners followed a religious principle disavowing electrical illumination.  It is presumed that shadows from clouds on moonlit nights or owls stimulated the flock resulting in smothering which was not observed in similar houses in the area which were not fitted with skylights. The problem disappeared in a subsequent flock when normal lighting was restored and the skylights were painted over.

A completely enigmatic occurrence of smothering is infrequently observed during the day in slatted-floor houses where up to fifty hens in a clinically normal flock are found dead, often during a lunch break, with no workers in the house.  Investigation of a few cases has not revealed any specific cause.

Transition from cage housing to alternative systems will require an understanding of the breeding and behavior of hens and should result in appropriate adaptation of management procedures. To their credit the major primary breeders are investigating behavior in other than caged housing and are incorporating beneficial traits into selection programs.

In the interest of understanding behavioral abnormalities, comments and observations are welcomed and will be reviewed in subsequent editions of EGG-CITE.



Sep 16, 2016


Commodities can be impacted by the emergence of a substitute.  The dairy industry which is frequently beset by adversity is now having to response to the popularity of almond milk, replacing conventional milk.  The situation was highlighted when Starbuck’s introduced the substitute in 23,000 locations resulting in a significant increase in demand. 

Almond milk which is derived from soybeans is favored by vegetarians and vegans and others that consider almond milk more healthful than conventional milk or low-fat variations.  There is also an undercurrent of antagonism towards the dairy industry based on welfare of herds and the perception that milk is derived from commercial agribusiness operations and not from farmers.


There are lessons to be learned in the current dairy versus substitute challenge.  The first consideration is to recognize potential substitutes before they gain a significant market position.  The second is to aggressively promote the nutritional and other attributes of the real product compared to the substitute.  Belatedly the dairy industry in California is promoting the protein content of milk and the balance among essential amino acids, especially for infants and children.

We are fortunate in that the American Egg Board is constantly reviewing potential competitors, although in a recent case may have overreacted.  The solid work which is performed on nutrition has entrenched the value of eggs among dieticians and now celebrity chefs who are emerging as arbiters of foods favored by Millennials and Generation Z’ers.



Sep 9, 2016


Reports from Australia demonstrate the level of confusion relating to terms such as “free range” and “pasture”.  It is generally accepted in Australia that free-range with outside access requires a density of 4,000 hens per acre with “meaningful and regular access to the outdoors”.  EGG-CITE has reported on action taken by commercial regulators in various states against mislabeling of eggs as “free-range”. 

In Australia “pasture eggs” are derived from flocks at densities of 12 to 20 hens per acre.  These eggs command a premium and are apparently regarded highly by affluent consumers.


With the obvious transition from conventional cages to alternative systems including slatted floors, aviaries and colony modules, the U.S. industry needs to develop standard definitions which should then be approved by USDA-AMS to avoid confusion.  There will always be an operator who will take advantage of grey areas by employing creative semantics.  Some years ago eggs were marketed as being from “free roaming” flocks.  Together with label images depicting hens on grass, the impression was created that hens were allowed free open access to pasture.  In effect hens were held in barns on litter without outside access. For some time the marketer enjoyed a premium over eggs produced under similar conditions by competitors.

Although some certification agencies require minimum standards and specifically designate area for pastured hens, there is no standard legal definition.  It will be far better for the industry to establish standards relating to housing, management and welfare and have these recognized by USDA-AMS than for a Federal agency to impose their definitions five years hence.


Is SeaWorld a Bellwether?

Sep 2, 2016


Results for the second quarter of Fiscal 2016, released Thursday August 4th, confirmed that SeaWorld Entertainment posted improved earnings of $17.8 million on reduced revenue of $371 million. The 5.4 percent drop in the top line was correlated with an eight percent decline in attendance at all venues to 6.0 million compared to the corresponding quarter of Fiscal 2015. Earnings were in line with analysts’ estimates but revenue was lower than the projection of $375 million. The company has missed forecast earnings for seven of eleven quarters as a public company.


Reluctantly the company announced earlier this year that it would cease presenting live shows using their iconic orcas and would suspend an ongoing breeding program. These concessions were adopted following concerted opposition from animal welfare activists. This confirms the power of public opinion, suitably aroused and stimulated by press releases and the social media, crafted to bring about change consistent with the principles and intent of these organizations.

Whether the issue over orcas is a reason for the 25 percent decline in stock price in 2016 and a drop of 50 percent since the 2013 IPO is questionable.  The company reported an 8 percent decline in attendance at Busch Gardens and Sesame Place which is in line with all venues including SeaWorld locations over a twelve month period.  The company attributed lower attendance to fewer visitors from Brazil following the decline in that nation’s economy and decreased purchasing power of their currency against the U.S. Dollar.  The emergence of Zika virus in Florida in July will certainly not help to encourage tourism from the UK and other nations in the EU so the HSUS and its clones cannot be regarded as the only driver of declining performance.

Notwithstanding the collateral reasons for lower revenue and attendance, it is generally acknowledged that repeated airing of Black Fish, a documentary overtly critical of SeaWorld has had a detrimental effect on the image of the Company. Negative posts and blogs have certainly contributed to the decline by sparking a level of rejection among potential visitors who are apparently selecting alternative theme parks in Orlando and San Diego.

There are obvious lessons to be derived from the opposition to SeaWorld by HSUS and their campaign to demonize existing methods of housing hens in conventional cages.  Orcas at SeaWorld and elephants at Ringling Brothers are only the beginning, other marine and terrestrial mammals will most certainly follow.  The difference between the egg industry on the one hand and SeaWorld and Ringling Brothers is that the public can find easy alternatives for their entertainment, food is another matter.

 The imperative to re-house 180 million hens will most certainly raise the price of eggs and invariably other animal-derived protein foods. This will deprive lower-income consumers of a valuable and at present, inexpensive source of essential amino acids and other nutrients. But after all, this is the avowed objective of the HSUS and kindred organizations which are less concerned over welfare than they are of engendering a vegan lifestyle.

I sincerely trust that in the future we will not be deprived of choice in what we eat. There are those in the aggressively proselyting factions of the vegan movement that wish to impose their views on others. Hopefully we will not have to learn to enjoy legumes and other ersatz foods from suppliers such as Hampton Creek and other opportunists, who may indirectly be affiliated with animal advocacy organizations.


Italy Proposes Restrictions on Vegan Diets for Children

Aug 26, 2016


Based on demonstrated nutrient deficiencies in strict vegan diets which will affect the growth and development of children, an Italian lawmaker Elvira Savino, representing the conservative Forza Italia party has introduced legislation to ban the feeding of vegan diets to children. 

Recent cases of parents feeding diets devoid of all animal products including eggs and dairy foods has resulted in stunting and pediatric complications.  The proposed law would apply to minors up to the age of 16. Parents or caregivers would be subject to a four year prison sentence in the event of a deficiency syndrome or seven years imprisonment in the event of a fatality.


Savino stated “If even only one child ends up in hospital because of this behavior I feel we have to protect them all.”  It is her belief that pediatricians should be required to report parents to authorities if they believe that vegan diets are responsible any developmental abnormality.

By the same token, supplying children with raw milk also represents a form of abuse given the probability of infection with a number a bacterial pathogens including Listeria, Salmonella, Campylobacter and  E.coli.



Aug 25, 2016


Dan Flynn writing in Food Safety News has rendered the U.S. egg production industry a disservice by dredging up anachronistic facts and recounting the 2010 episode of, SE attributed to Quality Egg LLC., operated by Austin “Jack” DeCoster and his son Peter.


Among many of the misconceptions amplified by Flynn include:

  • Estimates show 1 egg in 50 might be a danger to human health. This is absolute garbage and relates to an imperfect assessment reflecting the SE status of flocks in the late 1990s before intensified biosecurity, vaccination and surveillance were introduced. An egg from a flock or complex with a 15 or more year history of freedom from environmental SE will have a negligible probability of contamination. Given that less than 2 percent of commercial egg-producing flocks are positive by environmental monitoring, and that vertical transmission of the pathogen to eggs is limited by vaccination and that a cold chain is in effect from packing to point of sale, the number of eggs with viable SE capable of initiating an infection is infinitesimally low.  This is evidenced by the fact that there have been no confirmed SE outbreaks attributable to commercial egg-producing farms functioning under the Federal program, a State EQAP or a Company mandate.  Extrapolation by Flynn in 2016 using the discredited and unrealistic“1 in 50” proportion is disingenuous and he should know better.
  • The best thing you can do is to buy pasteurized eggs for use in your home kitchen and seek out restaurants that only serve pasteurized eggs. It is a matter of fact that pasteurized shell eggs represents less than one percent of the market despite having been introduced at the height of SE concern in the late 1990s.  In- shell pasteurized eggs have never gained traction in the marketplace. Interest in pasteurization for shell eggs, other than for immunosuppressed individuals, has sharply declined. This is based on the advances made by the egg production industry in the U.S. to eliminate infection, even before the FDA final rule on Salmonella was introduced in 2010.
  • We do think it’s time for USDA and FDA to move from the sidelines to the center of the housing debate with scientifically drawn criteria. The FDA was a late-comer to control of SE and their unilateral progress to the Final Rule and subsequent implementation in 2011 was less than efficient.  The USDA has in fact been promoting “family farm” and retrograde egg production systems despite the advantages in sustainability, hygiene and quality associated with commercial-scale production applying vertical or horizontal integration.  An example of the conflict faced by the regulatory agencies relates to the fact that producers are sanctioned if an FDA inspection reveals a hole in a structure larger than a quarter which can allow entry of mice yet the proposed USDA Certified Organic rules mandate entry and exit apertures measured in square feet to promote outside access for free-range flocks.  Egg producers are cognizant of the impact of house design, construction and finishes on hygiene and biosecurity and are well advised by in-house and consulting veterinarians and extension specialists as to requirements for healthy flocks.

It must be recognized that the DeCosters represented an aberration in the U.S. egg production industry.  Jack DeCoster has a long record of association with SE extending from his Turner, ME farm which precipitated the index case in Boston in 1985, an outbreak from a farm he operated in Maryland in 1987 and the most recent 2010 Iowa outbreak.  He and his son pleaded guilty to a number of misdemeanors have paid a substantial fine and are awaiting an appeal against three- month prison terms considered justified by the judge given the egregious deviations from industry standards, placing public health at risk and degrading the image of egg producers in the U.S.

Flynn questions whether QSRs, supermarkets and food service companies that have announced their intention to transition in sourcing eggs from caged to non-caged flocks have considered SE.  He should be aware that irrespective of housing, companies such as McDonald’s Corp and other large users of eggs impose standards of biosecurity and hygiene which exceed the somewhat deficient requirements of the FDA Final Rule which has no provision for vaccination and incorporates a program of flock surveillance inferior to that required by the United Egg producers and a leading cooperative producing and distributing branded eggs nationally.


DeCoster’s Requesting Re-hearing on Sentencing

Aug 19, 2016


Peter Keisler, the attorney representing Austin “Jack” DeCoster and his son Peter has predictably entered an application for a re-hearing before the entire bench of the U.S. Court of Appeals for the 8th Circuit. The DeCosters were both sentenced to a three month term of imprisonment in addition to a substantial fine after pleading guilty to misdemeanor charge arising from the extensive 2010 SE outbreak. At issue is whether a jail sentence can be imposed for a strict liability misdemeanor.


The 22-page brief filed by Attorney Peter D. Keisler contends that the 2-1 decision conflicts with established law.  Applying the Park Doctrine handed down by the U.S. Supreme Court, “responsible corporate officers liable under the Food Drug and Cosmetics Act for company offenses requires proof of individual fault.”

The Park Doctrine also referred to as The Responsible Corporate Officer Doctrine arises from U.S. v. Park U.S. 658(1975). In 1970 John Park served as the president of Acme Markets. At this and subsequent times inspection by FDA officers detected rodent infestation in stores and warehouses operated by the Company. Park was found not guilty since he claimed no knowledge or intent to adulterate food products. The decision of a lower court was overturned by the Supreme Court resulting in payment of a fine on each of five counts. The Department of Justice in recent years has established a cooperative relationship with the FDA. Criminal proceedings are predicated by persistent violations and evidence of causation of injury.

It is understood that a number of Amicus briefs have been filed with the 8th Circuit in support of the DeCoster’s as the sentence has profound implications for executives responsible for food companies in the event of disease outbreaks associated with their products.

Attorney Keisler maintains that the appeal is exceptionally important and if the sentence is allowed to stand, the three-month term would be an unprecedented expansion of Federal powers to imprison.


Consumers Are Unlikely to Use QR Codes Imprinted on Packages of GM-Containing Foods

Aug 11, 2016


The compromise which led to the Genetically Modified (GM) labeling Act signed into law by President Obama in late July has raised a number of questions regarding access to information concerning the GM status of packaged foods.  The Act requires some form of labeling either as a direct statement, a website URL or a QR (quick-response) code. 


According to an August 4th report in The Wall Street Journal by Heather Haddon, the University of Pennsylvania, Annenberg Public Policy Center determined that 59 percent of 1,011 U.S. adult respondents stated that they were unlikely to use either a smartphone or an in-store scanner to determine the GM status of a product.  Of significance was the finding that 80 percent of those surveyed still consider it important to designate the GM status of a food.  The results of the University of Pennsylvania study should be viewed against the investigation carried out by the Food Marketing Institute that determined that 20 percent of consumers use QR codes to ascertain nutritional value of grocery items.

The Organic Consumers Association, opposed to the law advocated for open labeling of products containing GM ingredients, less as an informational exercise than it was to demonize GM foods. The organization representing producers of USDA Certified Organic products claims to have collected close to 500,000 responses to an online campaign for open declaration of GM content.

It is expected that most of the members of the Grocery Manufacturers Association will participate in imprinting SmartLabel codes on products, led by significant producers including General Mills, Campbell Soup, Hershey and Unilever.

Despite the enactment of the GMO labeling law it is noted that compliance will commence only in 2019, given the need to develop regulations and to follow the statuary public comment period.  It is also significant that the responsibility for administration of labeling regulations is now under the USDA and not the FDA.  This is realistic given the reality that GM ingredients have no health-related effect.

The Act exempts animal-derived products from herds and flocks fed GM ingredients.  This recognizes the fact that there is no DNA residue from feed ingredients in milk eggs, or meat. In reality all ingredients irrespective of whether GM or conventional are degraded the same way during digestion to amino acids and sugars and are absorbed and metabolized without distinction as to source in pathways specific for the nutrient.


PETA Claims Support from “Corporate Activism”

Aug 11, 2016 recently drew attention to the activities of animal activist groups such as PETA in mounting campaigns against target companies by purchasing stock and filing shareholders resolutions. Most of the mainstream animal-rights activists have relinquished Yakuza-style disruption of annual meetings, but the presence of the lunatic fringe is frequently evidenced by the appearance of bizarrely costumed protesters.

Anne Kellogg, manager of corporate affairs for PETA stated “Our shareholder program is one of our most meaningful ways to engage companies that are not making progress on animal welfare issues.  She added “No company or shareholder wants to be associated with companies that are cruel to animals.”


Taking a page out of the book of financial activists such as Bill Ackman and Carl Icahn, advocacy organizations in the areas of environmental concern, worker rights and other issues continually file resolutions which are invariably rejected but generate publicity and inexorably initiate some change.

Commenting on the trend, a former commissioner of the Securities and Exchange Commission, Troy Paredes is quoted as saying “There are many socially valuable causes, but the SEC and corporate law are not places for dealing with them.”  Paredes questions whether protests relating to social and animal rights issues are in the interest of either the corporation or investors.

There is a darker side to the motivation for animal rights groups to purchase shares in companies.  By shorting stocks of targets in advance of protests and negative press releases, it is possible to gain from premeditated action at the expense of shareholders, while cynically appearing to fulfill a social function. To date there is no evidence that any organization has “moved the needle” for a large corporation but any pro-vegan group with an income of over $100 million annually and off-shore investments could conceivably try to profit from their activities.


The Cost of Conversion to Cage-Free

Aug 5, 2016


Following the cascade of announcements that food service companies, QSRs, food retailers and restaurants have committed to transitioning to housing systems for egg producing hens involving other than conventional cages, it is valid to estimate that the cost of the exercise.

If it is assumed that 200 million hens are housed for production of shell eggs and that currently 10 percent of this cohort is held in other than conventional cages, (Enriched colony modules, barns and aviaries) 180 million hens will have to be re-housed over ten years at a cost of approximately $35 per bird.  This represents an expenditure of $6.3 billion using 2016 values but with passage of time, inflation will increase the capital cost of conversion.  Allowing for a conservative three percent compounded escalation in cost, the value over ten years might amount to $8.5 billion.   


Given the differential in both fixed and variable costs associated with conversion from conventional cages to alternative systems, the cost at the supermarket shelf will  not be less than 50 cents per dozen for generic eggs.  Given a 2016 consumption of 15.2 dozen shell eggs per year based on 260 eggs per capita and 70 percent consumption in the form of shell eggs, the cost accruing to a population of 320 million would amount to $7.60 per person annually or a total value of $2.4 billion each year for the domestic shell market.

The value of 50 cents per dozen is considered to be lowest possible differential between eggs derived from cages compared to alternative systems.  It is a matter of record that for 2016 ending June 4th, the differential between cage-free and caged eggs averaged $1.25 per dozen reflecting disparity between supply and demand.  At present, five percent of shell eggs sold are designated cage-free with an additional four percent sold as USDA Certified Organic.  Free-range egg sales represent 0.2 percent of the market.  With a transition from conventional cages to alternative systems including aviaries and barns, the price differential will narrow with producers experiencing declining margins given increased supply as more hens are housed in alternative systems.

It is a valid question as to whether it is ethical and morally acceptable for a small group of animal welfare activists to coerce, manipulate and bully an industry into converting from conventional cages to alternatives to satisfy their desires and have producers and

consumers  foot the bill.  Clearly the HSUS and its surrogates including Mercy for Animals outwardly place animal rights above human needs for nutrition at an acceptable price.  We already have in place a “Pacelle Tax” of approximately 40 cents per dozen in California following the introduction of Proposition #2 enacted in 2008 which came into effect in 2015

Given the billions of dollars involved, the HSUS should be more forthcoming over the cost impact of its actions and balance benefits against expenditure.

Whatever ever happened to informed consumer choice and reason? How did these people get their hands on our checkbooks, purses and wallets?


Settlement in Class Action Lawsuit Against Egg Producers

Jul 29, 2016


In an article in the Legal Intelligencer on July 12th P.J. D’Annunzio reported on a negotiated settlement for $8.4 million in relation to the long standing case brought by grocery stores and restaurants against egg producers. 

Previously Cal-Maine Foods and Land O’ Lakes on behalf of their then subsidiary Moark LLC settled following negotiations.


The class comprising supermarket chains, commercial food manufacturers and restaurants were certified as a class in September 2015 and were referred to as “direct purchasers.”  U.S. District Judge Gene E.K. Pratter of the Eastern District of Pennsylvania accepted the reality that “class members could not have systemically avoided the effects of a lower supply of eggs by obtaining a substitute but would instead have had to pay the increased prices for eggs.”

The defendants in the case and the amount in which they paid comprised Midwest Poultry Services ($2.5 million), National Food Corp. ($1 million), United States Egg Marketers with United Egg Producers ($500,000), NuCal Foods ($1.4 million) and Hillandale Farms ($3 million).  In addition to the settlement amount, all of the defendants incurred extensive legal costs.

The case arose following the decision by egg producers to conform to the UEP welfare requirements which successively raised space allowance in cages to the current 67 square inches for white feathered hens comprising the majority of the market.  The Plaintiffs also alleged that the Defendants colluded to restrict the supply of eggs by early depletion of flocks, and promoting exports at prices lower than prevailing wholesale values.  It is understood that evidence was presented to support allegations of collusion in the form of injudicious memos and circulars.

The case raises the question of whether the industry will be accused of “rigging the market” with the transition from conventional cage housing to alternative systems which will result in a reduction in the national flock unless additional housing is constructed at high capital cost.