Egg Industry News


USDA Weekly Egg Price and Inventory Report, July 19th 2018.

07/18/2018
  • Hen Numbers in Production Increased by 0.3 million to 314.7 Million as Molted Hens and Late-February Chick Placements Commenced Laying.
  • Shell Inventory Up by 7.1 Percent Suggesting a Near-term Price Decline.
  • Generic Prices for Extra Large and Large were Down 1.4 Percent Compared to Previous Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on July 16 th the Midwest wholesale prices for Extra Large and Large sizes were respectively down 1.3 and 1.4 percent. Mediums were lower by 10.8 percent compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The July 16th USDA Egg Market News Report (Vol. 65: No. 29) documented a USDA Combined Region value rounded to the nearest cent, of $1.51 per dozen delivered to warehouses effective July 13th This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.42 per dozen. At the high end of the range, the price in the South Central Region attained $1.57 per dozen. The USDA Combined Price last week was 20 cents per dozen above the three-year average and 85 cents per dozen above the corresponding week in 2017.


 


Cargill Reports on Q4 and FY 2018

07/18/2018

In a press release issued on July 12th, Cargill Inc. reported on the 4th Quarter and Fiscal Year ended May 31st 2018.

For the quarter, the company generated net earnings of $711 million ($347 million Q4 FY 2017) on revenues of $30.4 billion, 7 percent higher than the corresponding quarter in 2017.

For the full year, net earnings attained $3.1 billion, a 9 percent increase over FY 2017 on revenue of $114.7 billion, 5 percent higher than FY 2017.

In commenting on results, David MacLennan, Chairman and CEO of Cargill stated “Our strong results show we are creating the connections the world needs for vibrant food and agriculture both today and tomorrow.” He added “Cargill has always moved food from where it is produced to where it is needed. Today, we are pioneering new capabilities and partnerships to invest for the future.”

 In reviewing specific operating segments, the report noted a “steady expansion in value-added egg products”. Cargill is currently a leading pasteurizer and further-processor of egg products in the U.S. functioning as an important intermediary between large in-line breakers and the QSRs and the food service segments of the industry representing end users.

The Animal Nutrition and Protein segment surpassed last year’s strong results for both Q4 and FY 2018. Additional earnings were obtained from feed additives, micronutrients and premixes. During FY 2018, Cargill acquired Pollos El Bucanero in Columbia and formed a joint venture in the U.K. creating Avara Foods in addition to a joint-venture processing plant in the Philippines in partnership with Jollibee Foods. It is anticipated that the company may reenter the broiler production segment having made a bid for Keystone Foods, which will be divested by parent company Marfrig of Brazil.

During fiscal 2018, U.S. investments included the acquisition of Diamond V in addition to Delacon in Austria and Integral Animal Nutrition in Brazil.

In the Food Ingredients and Application Segment, the company was negatively impacted by lower ethanol prices, especially during the 4th quarter. A joint venture was initiated with Puris to produce plant-based proteins.

The Origination and Processing segment improved on 2017 results by strengthening trading activities and upgrades to the supply chain. During the year, a new biodiesel facility was initiated and oil-seed crushing plants were expanded in Brazil and the U.S.


 

Incredibles 2 Increases Traffic to AEB Website

07/18/2018

Traffic to the IncredibleEgg.org website has increased 45 percent from May 24th when Incredibles 2 content went live through to July 6th. A total of 971,000 relevant visits were logged for the site with 214,000 landing page total visits.

The efforts of the American Egg Board are to be commended. It is however cautioned that the objective is to increase consumption of eggs and not necessarily generate interest in websites. The true benefit of the promotional endeavor will hopefully be reflected in increased per capita consumption.


 

Henning Companies Contribution to Habitat for Humanity

07/18/2018

As a result of floods in Des Moines, the Birdland area was severely affected with two-thirds of 270 homes damaged or destroyed. Following reconstruction of a levy, Habitat for Humanity is now able to provide the impacted community with 23 new homes.

As a sponsor of Habitat for Humanity, Henning Companies donated $10,000 and 219 volunteer hours to the project.

Over the course of three days, 31 volunteers from Henning Companies worked together to construct homes and restore the neighborhood.


 

2018 Center of Excellence Scholarships

07/18/2018

The Midwest Poultry Consortium awarded 35 scholarships to students in the 2018 Center of Excellence internship program. The total value of awards amounted to $280,000.

The Center of Excellence program provides students with an opportunity to evaluate a future career in some aspect of poultry production through summer courses and internships.

Henning Companies is a sponsor of the Center of Excellence Scholarship initiative and is represented on the Board of the Midwest Poultry Consortium by Lisa Henning Beohm.


 

Healthy Choice® Brand Power Bowls Introduced

07/18/2018

Conagra Brands has introduced four Power Bowls in their range of breakfast offerings.

The varieties include:

  • Unwrapped Burrito Scramble comprising turkey sausage, egg whites, black beans and vegetables.
  • Turkey Sausage and Egg White Scramble.
  • Roasted Red Pepper and egg white Shashuska, a Middle-East themed vegetarian bowl combining egg whites, peppers, cheese, onions and leafy greens.
  • Pesto and Egg White Scramble, containing egg whites, kidney beans and Parmesan cheese.

Power Bowls provide 190 calories, 15 grams of protein and 5 grams of fiber per bowl.

The new Power Bowls join plant-based Power Bowls, expanding the vegetarian options offered by the Conagra Brands.


 

Honey Smacks Recall Considered Incomplete

07/18/2018

Despite recalling 1.3 million cases of Honey Smacks cereal in more than 30 states, the FDA has determined that potentially contaminated product is still being sold, posing a risk for further cases of salmonellosis.

According to the Centers for Disease Control, 100 cases have been diagnosed in 33 states. Despite the voluntary recall initiated by Kellogg in mid-June some product is still on shelves, and the Agency has issued a blanket recommendation to discard any Honey Smacks on hand. In contrast to produce, fruit, dairy and eggs, boxed cereals have a long shelf-life and represent a greater danger of incident cases than perishables following a recall.


 

Status of 2018 Corn and Soybean Crops

07/16/2018

The USDA Crop Progress Report released on July 16th confirmed complete planting and emergence of the 2018 corn and soybean crops. Early-planted corn is silking at a rate 26 percent faster than the 5-year average. Soybeans planted early are blooming consistent with good soil moisture and climate conditions, leading the 5-year average by 20 percent. Approximately 26 percent of the soy crop is setting pods. EGG-NEWS and CHICK-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of harvest in October.


 


Walmart to Establish Jet.com Center in the Bronx

07/16/2018

Walmart will increase its presence in a major metropolitan area by establishing a distribution facility in the Bronx.  The unit will be operated by subsidiary Jet.com purchased by Walmart in 2016.

 

Simon Belsham president of Jet.com noted in an interview with The Wall Street Journal, “This is another building block that is part of Jet.com’s strategy focused on urban centers.”  The founder of Jet.com, Marc Lore currently heads all Walmart E-commerce business and is positioning Walmart to compete directly with Amazon.com by offering one- and two-hour delivery through Prime Now in affiliation with Whole Foods Market.

 

The affiliation with Walmart will allow Jet.com to deliver food and merchandise to customers in the New York metropolitan area.  If successful the model will be extended to as many as 100 cities by mid-2019.

 

 

 

 


 

Third North Carolina Hog-Nuisance Trial Underway

07/16/2018

A third trial in a federal court in Raleigh, NC is underway following two adverse verdicts against Smithfield Foods, a subsidiary of the WH Group of China.  In this case, the plaintiffs represent a class comprising neighbors of a farm in Pender County.  Murphy-Brown a subsidiary of Smithfield Foods is the defendant since it owns the flocks raised by contract farmers in the county.

 

The initial case resulted in a $51 million judgment against Smithfield in April followed by a $25 million judgment in June.

 

The secession of lawsuits filed has the potential to severely impact hog production in eastern North Carolina which is the backbone of state agriculture following the waning of tobacco cultivation.  EGG-NEWS has reported on demonstrations supporting hog farmers in which the Lt. Governor and Commissioner of Agriculture criticized nuisance lawsuits.

 

Opponents of hog production maintain that alternative technology is available to displace lagoons with spraying over pasture. This is the major source of complaints specifying odor and potential contamination of ground water.  The major integrators following extensive consolidation which took place in the 2000’s maintain that biodigesters would be prohibitively expensive.


 

Export of Shell Eggs and Products January-May 2018.

07/16/2018

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January-May 2018 with the corresponding period in 2017:-

 

 

PRODUCT

Jan.-May 2017

Jan.-May 2018

Difference

Shell Eggs

     

Volume (m. dozen)

46.5

45.9

-0.6 (-1.3%)

Value ($ million)

45.4

58.3

+12.9 (+28.4%)

Unit Value ($/dozen)

0.98

1.27

+0.29 (+29.6%)

Egg Products

 

 

 

Volume (metric tons)

18,330

14,671

-3,659 (-20.0%)

Value ($ million)

47.2

53.7

+6.5 (+13.8%)

Unit Value ($/metric ton)

2,575

3,660

+1,085 (+42.1%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS IN JANUARY-

MAY 2018 COMPARED WITH JANUARY-MAY 2017

Source USDA-FAS/USAPEEC


 


Aldi Introduces HOW2RECYCLE Label

07/15/2018

Aldi has committed to placing HOW2RECYCLE labels on all exclusive brand products with a projected completion date of 2020 according to a July 9th article in the Environmental Leader. Given that Aldi markets 90 percent of SKU’s as house brands, the transition will not involve pressure on suppliers. It is understood that Colgate Palmolive and other major manufacturers have complied with the request for a recycle label.

The label will inform consumers of the appropriate method of disposal for recycling products including packaging, plastic film, foil and other Aldi household products.

Aldi has worked with the Sustainable Packaging Coalition to exclude waste from landfills and to conform with future regulations to be developed by the Federal Trade Commission.


 

IHOp Reverts To Previous Name

07/15/2018

The brief foray into IHOb has ended and the chain will revert to IHOp coinciding with 60th anniversary. The 180 degree rotation of the terminal ‘p’ in the name to ‘b’ was apparently an ill-conceived publicity stunt to inform patrons that the chain had added burgers to the menu.

IHOp still serves among the best omelets around with or without the pancakes and is a significant consumer of eggs.

 EGG-NEWS still maintains that the campaign was probably the worst marketing initiative since Coca Cola changed their formula in 1985.


 

Housing of Temporary Farm Workers

07/15/2018

Farm laborers legally admitted to the U.S. under H-2A work visas are to be accommodated in housing subject to state-inspection. The Consolidated Appropriations Act of 2018 amended the Housing Act of 1949 to extend the Farm Labor Housing Eligibility provision to agricultural workers.

In announcing the change, Secretary of Agriculture Dr. Sonny Perdue stated “Finding suitable housing for temporary agricultural workers has always been a challenge faced by our farmers and producers.” He added “I am pleased that the USDA programs can now better assist farmers needing to provide housing while they are here.  Congress addressed this issue in its recent funding bill and USDA hopes to continue the conversation on farm labor for the agricultural industry”.

The egg-production industry employs workers both citizens and documented aliens year round and the problem of sub-standard housing for temporary migrant field workers is not as evident. Notwithstanding the temporal difference in employment pattern there have been a number of egregious departures from acceptable housing disclosed by state and federal investigations in our industry with specific reference to the Maine and Midwest operations of Jack DeCoster.


 

Dean Foods to Close Illinois Dairy Plant

07/15/2018

Following the announcement that Walmart has now commissioned a dairy plant in Indiana and has cancelled supply contract with Dean Foods, the company has been forced to mothball plants and cancel supply contracts.

Employees and the State of Illinois have been informed that the Huntley plant will be closed in mid-September.

Dean Foods has been impacted by a general decline in demand for milk and milk products and competition from other cooperatives and manufacturers. The decision by Walmart to source dairy products from its own plant announced in 2016 has added to the pressure on the milk production and processing segments of the industry.

The impact on the entire production and supply chain of overproduction of a commodity is demonstrated by milk. Consumers are defecting to alternatives thereby reducing demand while customers in the form of the major chains are negotiating lower prices or integrating backwards into processing. Attempts to bolster production at the farm level by state and federal subsidies are stop-gap measures at the expense of taxpayers. It is indeed unfortunate that small and hence less efficient producers are the most affected by the brutal effect of supply and demand economic realities.

There are obvious messages from the milk and dairy situation which apply to egg production.


 

WEEKLY COMMODITY REPORT

07/13/2018

According to the July 12th 2018 WASDE #579, 81.8 million acres of corn will be harvested in 2018 to yield 14.23 Billion bushels. The soybean crop is projected to attain 4.31 Billion bushels from 88.3 million acres harvested.

 

Quarterly corn and soybean stocks were estimated by USDA in a release on June 29th to total 5.3 Billion bushels (36.2 percent of 2017 harvest) and 1.2 Billion bushels (27.3 percent of 2017 harvest) respectively.

 

The following July and September quotations were posted by the CME at close of trading on July 13th together with values for the previous week in parentheses.

 

COMMODITY

 

Corn (cents per bushel)

July ’18     332  (342)        

Sept.  ‘18     340   (351)            

Soybeans (cents per bushel)

July ’18     831*  (834)    

Sept.  ’18     824   (843)      

Soybean meal ($ per ton)

July ‘18     329  (328)

Sept.  ’18      326  (326) 

*Decade low price.

 

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

 

COMMODITY                      CHANGE FROM PAST WEEK

Corn:                       July quotation down 10 cents per Bu.         (-2.9 percent)

Soybeans:                July quotation down 3 cents per Bu.          (-0.4 percent)

Soybean Meal:          July quotation up $1/ton.                          (+0.3 percent) 

 

  • For each 10 cent per bushel change in corn:-

 

The cost of egg production would change by 0.45 cent per dozen

 

The cost of broiler production would change by 0.25 cent per pound live weight

 

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

 

The cost of egg production would change by 0.40 cent per dozen

 

The cost of broiler production would change by 0.25 cent per pound live weight

 

Declines in the prices of soybeans and hence soybean meal in recent weeks relate to competitive resumption of soybean exports from Brazil coupled with cessation of U.S. shipments to China in accordance with tariff concerns. The CME price of soybean meal stabilized this week. Soybeans continued to fall albeit at a slower rate compared to the past three weeks. The effects of tariffs took effect on June 6th although effectively exports ceased weeks ago.

See WASDE posting summarizing the July 13th USDA-WASDE Report #579, in this edition documenting  price projections and quantities of commodities to be produced, used and exported during the 2018 season.


 

USDA-WASDE FORECAST #579 July 12th 2018

07/13/2018

OVERVIEW

The July 12th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on actual planting data, crop progress, long-range weather forecasts and historical records. Harvest areas for corn and soybeans were updated from the June projection to 81.8 million acres (83.1 million in 2017) and 88.9 million acres, (89.5 million acres in 2017) respectively. The USDA held corn yield to 174.0 bushels per acre (175.4 bushels in 2017). Soybean yield was retained at 48.5 bushels per acre (49.5 bushels in 2017). The USDA July projection of ending stock for corn was reduced 0.3 percent to 1,552 million bushels. Ending stock for soybeans was raised 50.6 percent to 580 million bushels compared to the June 2018 WASDE Report.

The USDA projections of ending stocks and prices take into account current uncertainties concerning announced tariffs on U.S. products.

CORN

The projection of the corn harvest decreased by 1.3 percent from the June 2018 Report to 14,230 million bushels consistent with the reality that the crop is now in the stage of silking. The projection for 2018 can be compared to the 2017 harvest of 14,577 million bushels and is down 7.3 percent from the 2016 near-record harvest of 15,148 million bushels. The “Ethanol and Byproducts” category was lowered 0.9 percent to 5,625 m. bushels and exports were raised 25 m bushels to 2,225 million bushels. “Feed and Residual” was raised by 75 m. bushels to 5,425 million bushels resulting in a corresponding decrease of 1.6 percent in ending stocks to 1,552 m. bushels. The projected USDA range in farm price was reduced by 10 cents per bushel on both ends of the range to 330 to 430 cents per bushel. At 14H30 on July 13th CME quotations for July and September 2018 corn were 332 cents and 340 cents per bushel respectively.


 


New Egg Supporter

07/12/2018

Ralph William Richardson was ‘hatched’ on June 27th weighing in at 6 pounds, 13 ounces. Ralph is the son of Ashley and Nick Richardson. Ashley serves as the Senior Director of Marketing Communications for the AEB. Ralph joins older sister Georgia, also a supporter of our industry.


 

News from AEB

07/12/2018
  • Starbucks has added Egg Bites to the sous vide range focusing on breakfast menus.
  • AEB presented a webinar to school nutrition professionals to increase breakfast participation in Wake County, North Carolina. AEB is promoting pre-cooked patties which provide school administrators with considerable flexibility in menu options including morning burgers, quesadillas, croissants and combinations with pancakes.
  • USAPEEC exhibited egg products at the Fine Food New Zealand show held in Auckland held in late June. The event highlighted the quality and value of U.S. dried egg products to bakeries in New Zealand and Australia.

 


 

Phibro Animal Health Establishes Vaccine Plant in Ireland

07/12/2018

According to a July 5th release by Phibro Animal Health, the company has inaugurated a vaccine production plant in the Finisklin Business Park located in Sligo, Ireland.

The plant will produce poultry vaccines initially with expansion into products for other species in the future.

Jack Bendheim, Chairman, President and CEO of Phibro Animal Health noted “The creation of Phibro Ireland marks an important milestone in our development as a leading global player in the animal health biological market.”

The project will create 150 jobs over five years adding to the 1,400 employees of the company which markets products in 65 nations generating $370 million in annual sales.


 

Indiana Attendee at County Fair Infected with Swine-origin Influenza

07/11/2018

A visitor to a county fair in Indiana acquired H3N2 influenza presumably from infected swine exhibited at the event. According to the Centers for Disease Control and Prevention, this is the first human case of H3N2 in Indiana since 2013.

The statement from CDC noted, “Human infections are most likely to occur when people are in close proximity to infected pigs such as in barns and livestock exhibits at fairs.  The patient has not suffered any untoward effect.  The CDC provided recommendations to prevent infection based essentially on good hygiene. The elderly and those with immunosuppressive or respiratory conditions should avoid contact with hogs and swine barns.


 

Listeria Continues To Present Problems.

07/10/2018

Only a week following the declared end of the extensive Listeria outbreak in the Republic of South Africa, the European Center for Disease Prevention Control and the European Food Safety Authority have reported on an outbreak of listeriosis involving 47 cases with nine fatalities in Scandinavian nations, Austria and the U.K.

Whole genome sequencing has implicated frozen corn as the vehicle of infection. The pathogen has been identified as Listeria monocytogenes IVb sequence type ST6 similar to the strain associated with outbreaks implicating frozen spinach and frozen green beans derived from a plant in Hungary. Production at the plant has been suspended pending further investigations and thorough decontamination as required.

The outbreak strain of Listeria monocytogenes was detected in frozen vegetables in both 2016 and 2017 before the current episode, suggesting that the pathogen has persisted in the plant in Hungary, which is not unusual for Listeria.

The specific vegetable responsible for outbreaks has not been clearly identified suggesting that only the outbreak strains from patients are homologous with the environmental samples from the plant and not from products. Eleven of 26 patients from Denmark, Finland, Sweden and the U.K. reported consuming frozen corn and six out of 15 apparently ate frozen mixed vegetables.

Identifying a source of infection is problematic with an infection characterized by an extended incubation period resulting in consumers failing to recollect what food items were consumed over a protracted period.

Labeling, especially in a multilingual market such as the E.U. frequently does not emphasize the distinction between ready-to-eat items and those that require cooking. This exposes consumers to potential food-borne bacterial infection


 

Dr. Pearse Lyons Receives Posthumous Award

07/10/2018

During July 4th celebrations, Dr. Pearse Lyons, was the posthumous recipient of the Kennedy-Lemass Medal honoring a U.S. leader of Irish heritage who has contributed to strengthening relations between the U.S. and Ireland. 

Dr. Lyons was born in Dundalk and immigrated to the U.S. in 1970. He co-founded Alltech Inc. in the late 1970’s and the company has grown to be an international presence in animal health and more recently feed production employing over 6,000.

The Alltech European Bioscience Center is located in Dunboyne, County Meath. Other facilities in Ireland include the Pearce Lyons distillery in the Liberties in Dublin and Station Works Brewery in Dundalk, County Louth.

In commenting on the award, Dr. Mark Lyons, President of Alltech noted “My father was passionate about Ireland and the United States and spent his life promoting both countries around the world.” He added “He had an extraordinary ability to bring people from all walks of life together to make a difference in the world. This was especially true when it came to cultivating and supporting scientific agricultural technology and agricultural endeavors between the U.S. and Ireland.”

Deirdre Lyons, Alltech co-founder and widow of Pearse commented “He was passionate about his heritage and making a difference in the world, he used his boundless philanthropic spirit to inspire those around him.”

During his lifetime, Dr. Lyons was the recipient of the Ireland-U.S. Council Award for Outstanding achievement and the 2017 St. Patrick’s Day Science Medal in recognition of the creation of a global business based on scientific research. Dr. Lyons was previously a recipient of the RDS Gold Medal Award for Enterprise for his contribution to Irish business.

Dr. Mark Lyons (left) and Dr. Pearse Lyons (right)

2017 Alltech Symposium


 

Cal-Maine Foods to Change Charter Relating to Class A-Shares

07/09/2018
Cal-Maine Foods Inc., a ‘controlled company’ under NASDAQ rules has convened a special meeting of shareholders on July 20th to approve a change in the charter relating to Class A Common Stock.  This is required to facilitate estate planning for the company Founder and Chairman-emeritus Fred R. Adams, Jr. who served as CEO from 1969 through 2010.

 

The change in the charter will not alter the status of the company. More than 50 percent of the voting power will held by a group comprising immediate family members exercising control over all of the 4.8 million outstanding shares of Class A Common Stock.

 

The proposed changes will allow the Management and Board to continue the legacy of Fred R. Adams but will not affect the character or strategy of the company.

 

Cal-Maine Foods (CALM) will announce Q4 and FY 2018 results on Monday 23rd July.


Fred Adams

 


 

P.F. Chang’s Restaurant Chain to be Sold

07/09/2018

Centerbridge Partners has retained Bank of America Merrill Lynch and Barclays to explore a sale of P.F. Chang’s Bistro.  The chain was acquired in 2012 and has established a position as a market leader among full-service Asian-themed restaurants.  There are 214 locations in the U.S.  with 93 restaurants franchised in 24 nations.

 

The press release from Centerbridge noted that P.F. Chang’s Bistro locations generate on average sales of $4.1 million annually.

 

Steve Silver, Global Co-head of Private Equity at Centerbridge commented, “Given the positive performance of P.F. Chang’s Bistro, and having received multiple unsolicited indications of interest, this is an exciting time to explore a sale.”


 

Conflict over Proposed Hog Grow-out Operation

07/09/2018

A zoning board in Muncie IN has overturned a building permit issued by a County Commission.  The proposed hog farm in a rural area would have housed 10,000 weaners during grow-out.

 

The Metropolitan Board of Zoning Appeals classified the farm in Delaware County as an “industrial facility” which is totally illogical. Hogs are livestock and are not “manufactured”

 

The owner of the proposed operation will pursue legal options to overturn the adverse verdict of the Zoning Appeals Board.


 

Egg Recall in Germany Due to SE

07/09/2018

Eifrisch Vermarktung GmbH located in Oldenburg, Germany issued a recall after detecting SE in a consignment of eggs.

 

Eifrisch is an integrated producer claiming high levels of welfare and safety.  The affected eggs were distributed through 13 states and were sold by eight major food chains.  There were no reports of illness as a result of contamination.

 

SE was previously prevalent in Germany in the 1990s but effective control and monitoring procedures closely approximate U.S. procedures and standards.

 

According to the standard E.U. print code, the affected product was classified as organic and was produced in Germany. Poland has recalled a large quantity of eggs distributed in the domestic and E. U. markets in past months.

 


 

Giordano Poultry Plast Displays Twin Pack Special Products at 2018 VIV

07/09/2018

Following the purchase of Twin Pack Special Products, soon to be named Gi-Ovo, Giordano Poultry Plast the parent company is implementing integration of the Dutch subsidiary.  A specific stand featuring the Eggs Cargo system and Twin Pack Special Products was arranged by Giordano at the recent 2018 VIV Exhibition in Utrecht, Holland.


 

Food Trust Group Established to Promote Blockchain Technology

07/08/2018

Dow Jones has reported on the advances made by the Food Trust in introducing blockchain technology to trace food products from ingredient source through to point-of-sale.

 

The Food Trust comprises Walmart Inc., Nestle SA, Dole Food Co., Driscoll’s, Golden State Foods, The Kroger Company, McCormick, Tyson Foods Inc. and Unilever NV.  As competitors these companies recognize the need to cooperate in developing a standard system.

 

Blockchain technology was developed by International Business Machine Corporation for a variety of applications including tracing products through the food chain, recording interbank transactions and for air transport and pharmaceuticals.  Blockchain technology clearly establishes ownership and records intermediate nodes in a chain.  The integrity of blockchain is superior to current documentation procedures which are subject fraud, error and delays in establishing the history of ownership of products and components.

 

Blockchain technology will be instrumental in complying with future legislation and regulations including FSMA.


 

Carbapenemase-producing Enterobacter spp. now Widely Distributed

07/08/2018

A multinational study involving six countries over four continents* disclosed the increasing prevalence of Enterobacter spp. producing carbapenemase.  The study showed a common genetic structure previously identified in highly pathogenic Klebesiella pneumonia.  The epidemiologic implications from the extensive study examining isolates over the period 2008 through 2014 showed that plasmids (mobile genetic elements) expressing carbapenemase genes  move among clones and clades of Enterobacter spp. on a global scale. The authors emphasized

the need for surveillance over human populations and livestock.

 

 

 

 

*Peirano, G. et al Genomic Epidemiology of Global Carbapenemase-Producing Enterobacter spp., 2008-2014  Emerging Infectious Diseases 24: 1010-1018 (2018)


 

Cultural Changes at Whole Foods Affects Suppliers and Employees

07/07/2018

It is a year since the acquisition of Whole Foods Market by Amazon for $13.5 billion. After an initial cautious start, the impact of Amazon on Whole Foods is now becoming apparent. There have been extensive layoffs in the 460 stores in the chain with calls for unionization. Executives committed to the philosophy of founder John Mackey have left the company to be replaced by Amazon stalwarts.

Sourcing decision are now more centralized in the company headquarters in Austin and local suppliers have been sidelined. Centralized merchandising, which has facilitated in-store layoffs, will cost suppliers approximately 3 percent for restocking at a rate higher than competing chains. This has elicited criticism from the Specialty Food Association as noted in a feature article by Heather Haddon in the June 3rd edition of The Wall Street Journal.

Whole Foods Market anticipates increased sales from rationalization and the tie-in with Amazon Prime and two-hour delivery service in high-density urban areas.

Irrespective of the financial outcome, the character of Whole Foods Market has changed providing opportunities for clones and competitors.


 

Nestle Management Under Continuous Investor Pressure

07/07/2018

Third Point, an investment group led by activist Dan Loeb, continues to place pressure on Mark Schneider, CEO of multinational Nestle.

Loeb, with a $3 billion shareholding, claims that Nestle is moving too slowly in divesting non-core brands. Schneider intends to sell 10 percent of the current range compared to the demand for a 15 percent divestment by Third Point. A major point of contention is the $32 billion minority investment in cosmetics manufacturer L’Oreal.

Concurrently with the sale of non-core brands, Schneider has been making strategic investments to assure long-term profitability including a deal with Starbucks and an intended purchase of Champion Petfoods, a major producer in Canada which would require a $2 billion investment.

It is noted that Nestle has consistently emphasized welfare in sourcing and has led the group of activists cooperating with E.U. agencies.


Dan Loeb, Thrid Point Investments

 

E.U. Grocery Chains Combine Resources

07/07/2018

Tesco PLC of the U.K. and Carrefour SA of France will establish a joint-purchasing operation. The intention is to lower price, control quality and enhance customer satisfaction and enhance margins.

The arrangement of convenience is stimulated by threats of intrusion into E.U. markets by Amazon which purchased Whole Foods Market for close to $14 billion in 2017.

Previously, EGG-NEWS reported on restructuring of the U.K. food distribution market with the sale of Asda Group, previously owned by Walmart, to J. Sainsbury PLC.

Concurrently, supermarkets in the E.U. are introducing U.S. technology including evaluation of electronic checkout, on-line ordering and home delivery.


 

HPAI Spread by Migratory Gulls

07/07/2018

A study conducted in China confirmed that black-tailed gulls (Laris crassirostris) serve as reservoirs of H13 strain viruses.  Black-tailed gulls breed in Shandong Province in Eastern China but extend widely though Eastern and Southeast Asia.  Vagrant individuals have been recovered from Alaska, the Pacific coastline of North America and the Philippines.

 

A series of H13N2 and H13N8 isolates were obtained from black-tailed gulls and subjected to phylogenetic analysts.  It was determined that the neuraminidase segments were derived from the Eurasian lineage.  Both isolates possessed high nucleotide sequence identity conforming to subtypes isolated in Europe and North America. It was presumed that the H13 subtypes were reassortants between Eurasian and North American lineages.  Transfer of genetic material was estimated to have occurred from 2007 through 2014 and the complex process was apparently completed during mid-2015.  Although classified as low-pathogenicity strains, both H13N2 and H13N8 demonstrated markers associated with increased virulence and the potential for transmission to mammals.

 

A serologic survey among chickens in the area in which the gulls were sampled demonstrated titers against both H13N2 and H13N8 (8 percent and 30 percent respectively).  It was concluded that the H13 antibody response resulted from exposure to H13 viruses circulating among free-living birds.  Although the chicken farm from which samples were obtained was approximately 60 miles from the sampling site for gulls, the migratory pathway extended from the coastline over the farms.

 

This study demonstrated the significance of migratory birds other than waterfowl in the dissemination of avian influenza and the potential to infect commercial poultry.

 

*Yu, Z. et al Poultry Infection with Influenza Viruses of wild Bird Origin, China, 2016 Emerging Infectious Diseases 24: 1375-1377 (2018)


 

AFB Comments on Senate Version of Farm Bill

07/05/2018

The American Farm Bureau Federation (AFB) which represents a broad spectrum of U.S. agriculture is generally appreciative of the efforts of the Senate Agriculture Committee in drafting a bill benefitting farmers.

President of the AFB, “Zippy” Duvall noted “Of course, no bill is ever perfect, but this bipartisan effort gives us a solid framework for progress. We do have concerns about some of the provisions that were added to the bill that make it harder for farmers to manage risk, but we are confident that those issues can be satisfactorily addressed by the House and Senate Conference Committee.” There is a broad gulf between the House and Senate versions, especially relating to a requirement in the House bill for recipients of SNAP. Reconciliation will be a difficult and probably time-consuming process


 

Hy-Line Attributes Beneficial Feather Coverage to Selection Program

07/05/2018

Retention of plumage is regarded as an important production and welfare characteristic. Birds with acceptable feather cover through the production cycle demonstrate optimal feed conversion efficiency and a lower level of injury and culling.

The company claims that Hy-Line, W-36 and W-80 strains have superior feather cover extending through the lifespan of their hens. Hy-Line has selected against feather pecking for 62 generations and for the past 25 generations, the selection index has discriminated against high residual feed intake which is correlated to inferior feather cover.

Adequate feather cover is regarded as a welfare consideration in cage-free and free range systems. Hens with acceptable feather cover attract a premium in nations where hen sales at depletion offset or contribute to the cost of replacement pullets.

Hy-Line has prepared a management guide on feather retention which is available on the company website <www.hy-line.com>.


 

Diagnostic Procedures for Infectious Bronchitis

07/05/2018

Subscribers are referred to Issue 144 July/August 2018 of The Poultry Informed Professional® distributed by the Department of Poultry Health, University of Georgia.

The eviction contains a short but informative review entitled “New Strategies for Diagnosis of Infectious Bronchitis Virus” authored by Dr. Mark W. Jackwood and Dr. Brian J. Jordan.

Faced with a range of serotypes including Massachusetts, Arkansas, Connecticut, DE/GA 98, GA08, GA07 and GA13 and DMV1639, it is important to determine the serotype of IB responsible for decreased production, shell abnormalities or defective development of the reproductive tract during rearing. Since virtually all flocks placed in North America receive a series of vaccinations during rearing and occasionally supplementary boosting during production, the introduction of a new variant to an area can result in clinical infectious bronchitis. Jackwood and Jordan emphasize the value of automated real-time RT-PCR assay, which is rapid, sensitive, adequately specific and quantitative. With the exception of DMV/1639, RT-PCR has been validated for at least eight serotypes. Additional assays comprise amplification of the S1 spike protein with sequencing to establish the identity of isolates.

PDRC recommend submitting 25-50 choanal cleft swabs from affected and unaffected flocks. Swabs should be transported in individual tubes with one ml of phosphate buffer solution or a viral transport medium on ice. Suitably equipped laboratories such as PDRC use automated RNA extraction coupled with real-time RT-PCR to detect and identify IBV.

For further information on resources available at the PDRC, access the laboratory website vet.uga.edu/pdrc.


 

EPA Administrator Scott Pruitt Resigns

07/05/2018

Scott Pruitt embattled and controversial administrator of the Environmental Protection Agency resigned on Thursday 5th July effective immediately. Since appointment he has generated questions over intermingling personal and EPA business, wasteful spending, questionable administrative and ethics practices and an anti-science agenda.

An extract from his resignation letter is reproduced:-

Mr. President, it has been an honor to serve you in the Cabinet as Administrator of the EPA. Truly, your confidence in me has blessed me personally and enabled me to advance your agenda beyond what anyone anticipated at the beginning of your Administration. Your courage, steadfastness and resolute commitment to get results for the American people, both with regard to improved environmental outcomes as well as historical regulatory reform, is in fact occurring at an unprecedented pace and I thank you for the opportunity to serve you and the American people in helping achieve those ends.

That is why it is hard for me to advise you I am stepping down as Administrator of the EPA effective as of July 6. It is extremely difficult for me to cease serving you in this role first because I count it a blessing to be serving you in any capacity, but also, because of the transformative work that is occurring. However, the unrelenting attacks on me personally, my family, are unprecedented and have taken a sizable toll on all of us.

He will be replaced in the interim by his deputy, Andrew Wheeler previously a lobbyist for the coal industry.


 

Dr. Mickey Rubin Appointed as Executive Director of the Egg Nutrition Center

07/04/2018

In a recent announcement by the American Egg Board Rr. Mickey Rubin has been appointed as the Executive Director of the AEB Egg Nutrition Center. Previously Dr. Rubin served as Vice President for Nutrition Research at the National Dairy Council for eight years.

 In commenting on joining the ENC he stated “I am passionate about nutrition science and how the foods we eat impact health and while nutrition science has taught us a great deal over the years, there is still much more to learn. That is why working at the ENC is so great because eggs are an example of how we have come full circle in our understanding about food.”

Dr. Rubin graduated from Indiana University-Bloomington with a BS degree in kinesiology. He earned a Master’s degree in Exercise and Sports Science from the University of Memphis and a Ph.D. in exercise physiology from the University of Connecticut where his research interests included endocrinology, sports nutrition and dietary interventions on health outcomes. He is a member of the American Society of Nutrition and other scientific associations.


 

ENC Sponsors Scientific Sessions at 2018 American Society Of Nutrition Conference

07/04/2018

The Egg Nutrition Center will co-sponsor two pre-conference sessions at the 2018 meeting of the American Society of Nutrition. The topics comprise:

  • Lutein across the lifespan:  Evolution from aging eye health to childhood cognitive performance
  • Evaluating evidence standards and impacts of diets from the birth to 24 month population in the 2020-2025 dietary guide for Americans

 

Walmart to Purchase Crisply™ Hydroponic Produce

07/04/2018

Eden Green Technology of Dallas has negotiated a supply agreement with Walmart for produce grown in vertical racks and greenhouses. The Crisply™ brand will appear in supermarkets in Texas in July.

Crisply™ Brand produce from Eden Green Technology is non-GMO (as with all vegetables) and is grown without pesticides or herbicides. Initially lettuce, greens and herbs will be supplied.

The presumption inherent in the method of cultivation is that in the absence of soil and “natural fertilizer” (read animal waste), produce will be free of contamination with E.coli, Listeria and other pathogens including Cryptosporidium.

The sourcing of hydroponic vertically-cultivated produce is regarded as a worthwhile experiment given the lower probability of foodborne infection and a direct supply chain in contrast to traditional green produce. The recent outbreaks of foodborne STEC associated with lettuce from Arizona has strengthened the marketing potential for Eden Green Technology.


 

Oregon Regulators Revoke Permit for Lost Valley Dairy

07/04/2018

Lost Valley Dairy can effectively be renamed Lost Permit Dairy. The facility which was ranked as the second largest dairy in Oregon has been a constant and persistent violator of rules established by the Oregon Department of Agriculture (ODA) and the Department of Environmental Quality (DEQ), which regulate CAFOs. Lost Valley has sixty days to cease operation, move livestock and clean all waste systems.

According to state officials, Lost Valley violated wastewater discharge permits, lacked infrastructure to handle the amount of manure it generated, and failed to keep accurate records.

The ODA and DEQ granted the dairy permission to handle 187 million gallons of liquid manure each year, but the operation soon became embroiled in controversy related to permit violations including 32 specific incidents from June 2017 to May 2018.

In reviewing the Oregon CAFO program embracing 509 farms with 880 inspections in 2017, less than one percent resulted in violations leading to civil penalties or injunctive relief. Revocation of a permit is an extremely rare occurrence.

In court filings, it is claimed that the owner who owes $67 million in loans and has incurred $162 million in total debt has declared Chapter 11 bankruptcy protection. Rabobank claims that owner Greg TeVelte is chemically dependent having been arrested and charged with possession of methamphetamine, although he has apparently completed a treatment program.

The action taken by authorities in Oregon represents an example of the ultimate authority of state departments of environmental quality which can be exercised against habitual offenders and scofflaws irrespective of the livestock species involved.


 

ConAgra Brands to Acquire Pinnacle Foods

07/02/2018

The rumored acquisition of Pinnacle Foods by ConAgra Brands has been finalized. The transaction will comprise $10.9 billion with $8.2 billion represented by stock at $68 per share. Since Pinnacle shares were up 23 percent since Jana Partners filed a report that it had acquired 9 percent of the stock of Pinnacle Foods, the apparent premium paid by ConAgra Brands was priced in.

Previously Jana was instrumental in motivating a restructuring of ConAgra which has shown a remarkable increase in comparable sales from a decline of 6 percent in FY 2017 to a rise of 1.4 percent in FY 2018. The Company generated a fourth quarter differential of 10.6 percent in sales value between 2017 and the corresponding quarter in 2018.

The acquisition of Pinnacle is anticipated to generate synergies amounting to $215 million by 2022 associated with economies of scale and marketing strength mainly in refrigerated foods. The product lines of Pinnacle Foods and ConAgra Brands are complementary and the combined enterprise will be second only to Nestlé in frozen food sales.


 

FSNS Wins Global Standards Award

07/02/2018

The Certification and Audit subsidiary of Food Safety Net Services (FSNS) received the BRC Global Standards Award for 2018. This recognizes a commitment to high standards of food production and support of the BRC Global Standards program.

BRC Global Standards is a consumer protection organization serving 26,000 suppliers in 130 countries and is recognized as a requirement by many retailers and food service organizations.

Certification is issued through a global network of authorized companies. Award of the BRC Global Standards certification ensures quality, safety and adherence to operational criteria. Lori Ernst, Senior Vice President of Audit Services at FSNS Certification and Audit stated “We were honored to receive the BRC Global Standards Award. Our audit team and certification body strives to provide high-quality BRC Global Standards audits across North America.”


 

Lawrence Haddad and David Nabarro Recipients of 2018 World Food Prize

07/02/2018

Dr. Lawrence Haddad and Dr. David Nabarro were designated as the 2018 World Food Prize Laureates in a ceremony at the U.S. Department of Agriculture. The World Food Prize is the most prestigious global award for individuals whose achievements have alleviated hunger and promoted global food security

In making the announcement, Bill Gates, co-chair of the Bill and Melinda Gates Foundation stated “Like Dr. Norman Borlaug before them, Drs. Haddad and Nabarro have dedicated their careers to reducing hunger and malnutrition.” Gates added “Their work has deepened our understanding of nutrition’s impact not only on individual health, but on human capital and economic growth – compelling leaders in countries across the world to invest in evidence-based solutions.”

The announcement ceremony was attended by Ted McKinney, USDA Undersecretary for Trade and Foreign Agricultural Affairs, Bill Northey, USDA Undersecretary for Farm Production and Conservation, Kenneth M. Quinn, President of the World Food Prize and Manisha Singh, Assistant Secretary of State for Economic and Business Affairs.


Dr. Haddad
Dr. Haddad  is a pioneer in food policy research and was head of the Institute of Development Studies in the U.K. from 2004 to 2014. He co-chaired the Global Nutrition Report in 2016 and was instrumental in convincing 100 stakeholders to pledge $23 million to fight malnutrition. He is currently the Executive Director of Global Alliance for Improved Nutrition.

Dr. David Nabarro was head of the United Nations High-Level Task Force on Global Food Security from 2008 to 2014 and the coordinator of the Scaling Up Nutrition Movement thereafter.

 

Drs. Haddad and Nabarro will jointly receive their World Food Prize awards at a ceremony in the Iowa State Capitol building in Des Moines, IA on October 18th. This event will conclude the three-day Borlaug Dialog International Symposium bringing together 1,200 scientists, agricultural economists and public sector administrators from 50 nations to discuss issues of global food security.


Dr. David Nabarro of the UN

 

 


 

U.S. Consumers Love Their Supermarkets

07/02/2018

Despite the hype over the adoption of on-line shopping, a recent study shows that consumers still favor traditional supermarkets and grocery stores for their needs. David Fikes of the Hartman Group speaking on a U.S. Grocery Shopper Trends webinar organized by the Food Marketing Institute, presented current data on supermarkets.

The number of shopping trips and spending remained steady in 2018 with an average ticket of $109 per week. Most households make 2.2 visits to a supermarket or food store each week. Despite an increase in consumers using online purchasing, from 16 percent in 2015 to 28 percent in 2018, supermarkets are the “key grocery destination among all channels hovering around 50 percent for the past few years” according to Fikes. He attributes stability to adaptation by supermarkets.

The line between on-line and brick-and-mortar is becoming blurred with each channel impinging on its competition. This is characterized by the purchase of Whole Foods Market by Amazon and by the move to on-line shopping by Walmart, Target and Kroger.

Consumers tend to purchase center-store and shelf-stable items on-line. Their preference for supermarkets is clear with respect to deli, fresh and frozen food items including produce and meat.

Introduction of prepared foods, including pizza and meals and more extensive ethnic and cheese offerings including sit-down areas have converted some supermarket chains from simply a shelf to checkout process to a destination.

There is obviously an opening for eggs in the paradigm. It would be necessary to extend beyond egg salad in PET containers or self-service bars to actual omelet stations combined with other snack foods presented for impulse purchase or between-meal snacking. This concept would apply the principle that if innovative products are attractively displayed customers will buy them.


 

Dr. Jennifer Tucker Appointed to NOP

06/29/2018

The U.S. Department of Agriculture announced the appointment of Dr. Jennifer Tucker as Deputy Administrator of the U.S. Department of Agriculture-Agricultural Marketing Service National Organic Program. Since 2011, Dr. Tucker has served as Associate Deputy Administrator of the NOP.

Dr. Tucker earned her Ph.D. in Science and Technology Studies from Virginia Tech and an MS degree in management from Purdue University.


 

American Humane Appoints National Director for Farm Programs

06/29/2018

American Humane announced the appointment of Marty Frankhouser as the National Director for Farm Programs.

Frankhouser holds a BS degree in Agricultural Economics from Virginia Polytechnic Institute and has served in a variety of marketing and sales positions with U.S. pharmaceutical companies.

He replaces Dr. Janet Helms.


 

ConAgra Brands Reports on Q4 and FY 2018

06/28/2018

In a press release dated June 27th ConAgra Brands (CAG) announced results for the 4th Quarter of Fiscal 2018 ending May 27th 2018.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

 

 

 

 

4th Quarter Ending.

May 27th 2018

May 28th 2018

Difference (%)

Sales:

$1,966,200

$1,861,700

+5.6

Gross profit:

$575,400

$529,000

+8.8

Operating income:

$89,400

$73,700

+21.3

Net Income

$69600

*$151,300

-54.0

Diluted earnings per share:

$0.18

$0.36

-50.0

Gross Margin (%)

29.3

28.4

+3.2

Operating Margin (%)

4.5

4.0

+12.5

Profit Margin (%)

3.5

*8.1

-56.7

Long-term Debt:

$3,035,600

$2,573,300

+17.9

12 Months Trailing:

     

Return on Assets (%)

7.2

   

Return on Equity (%)

21.7

   

Operating Margin (%)

15.3

   

Profit Margin (%)

11.4

   

Total Assets

$10,389,500

$10,096,300

+2.9

Market Capitalization

$14,000,000

   

*Includes $60.1 million tax benefit

52-Week Range in Share Price: $32.16 to $35.99

Market Noon June 28th $35.41

Forward P/E: 14.4

For Fiscal 2018 CAG earned $798 million on sales of $7.98 billion contributing to an EPS of $1.98. The corresponding values for FY 2017 were, earnings $546 million (+26.4percent) on sales of $7.83 billion (+1.4 percent) contributing to an EPS of $1.46 (+35.6 percent)

Sean Connolly, president and CEO of Conagra Brands, commented, "Fiscal 2018 marked another year of tremendous progress in our transformation, despite a challenging inflationary environment. The year was further proof that we are squarely on track to deliver on the long-term commitments we presented at our 2016 investor day. Since then, we have improved our sales performance with innovation, renovation and enhanced marketing capabilities. We've also driven profitability through a focus on executional excellence and we created an externally-focused, results-oriented culture. Clearly, our hard work is paying off with improved and more consistent performance, and I am very proud of the progress we have made over the past three years."

Connolly added, "Looking ahead, our fiscal 2019 guidance anticipates solid growth in our net sales, adjusted gross profit, and adjusted operating profit, consistent with our long-term plan. We are confident we will sustain the progress we've made on our fundamentals, and we are well-positioned to continue to drive meaningful value creation. Our pending acquisition of Pinnacle Foods, which we also announced this morning, will further enhance our progress and we expect it will provide incremental opportunities to capture value for our shareholders."


 

American Egg Board and Incredibles 2

06/28/2018

The American Egg Board reported on the promotional activities linked to the successful release of Incredibles 2

 

A highlight of the event was the presentation of a $10,000 donation to Ronald McDonald House Charities by AEB president & CEO Anne L. Alonzo and egg producers on behalf of America’s egg farmers. The event concluded with a private VIP screening of “Incredibles 2” and AEB’s custom animated commercial spot “Jack-Jack’s Eggs” at a nearby theater.

 

 

To date, AEB's Incredibles 2 release event has generated:-

148 media placements, exceeding the goal by a factor of four.

  • 31.3 million media impressions representing 89% of the AEB goal for the event
  • Coverage by Chicago broadcast affiliates reached more than 224,530 viewers
  • nearly 75 Instagram stories documented the event in real time

 

 

.


 

House Version of the Farm Bill Passes

06/27/2018

The House passed the 2018 Farm Bill by a narrow majority of 213 to 211 with 20 Republican representatives voting in the negative. This action follows a previous May 18th defeat mainly due to opposition by members of the conservative Freedom Caucus who demanded a vote on an immigration bill before considering the Farm Bill.

The Senate has an alternative version of the Farm Bill which will be acted on before the July 4th recess. The Senate Bill does not include work requirements for recipients of SNAP as required by the House Bill. When the Senate version is passed, the House and Senate will move to reconciliation conferences to craft a comprehensive Farm Bill. This is necessary to be completed before expiry of the current Farm Bill in October.


 

India Imposes Retaliatory Tariffs on U.S.

06/27/2018

On June 22nd, India announced that it will join the European Union in placing tariffs on items imported from the United States. The measure will amount to $241 million covering more than 25 items to match the value of the steel and aluminum import duties imposed on India by the U.S.

In a week of threats and counter threats, the U.S. announced $50 billion in tariffs on Chinese goods which elicited threatened retaliation by China.

The action by India is more symbolic than functional since the U.S. trade deficit with that nation amounted to $23 billion in 2017. Almond growers mainly in California may be severely affected since India is the largest single importer of this commodity.


 

Kroger Bases Future Competitiveness on Ocado Technology

06/26/2018

Kroger has signed an exclusive deal with U.K. based Ocado to develop as many as 20 highly-automated warehouses using advanced robotics and technology.

Ocado is a ground-breaker in application of computerization and robotics to warehousing. The company has collaborated with E.U. scientists to develop robots and Kubermesh™ a computer package designed specifically for food warehousing.

Ocado has signed agreements with U.K. supermarket chain Waitrose, Monoprix in France and Sobeys in Canada. To seal the U.S. relationship, Kroger purchased a 5 percent stake in Ocado for $250 million.

Kroger CEO, Rodney McMullen opined that the deal would “speed up our efforts to redefine the food and grocery customer experience.”

Tim Steiner, CEO of Ocado commented “As we work through the terms of the service agreement with Kroger in the coming months, we will be preparing the business for a transformative relationship which will reshape the food retailing industry in the U.S. in the years to come.”

 

 

Ocado Installation pictured left


 

North Carolina Farm Act to Protect Hog Integrators

06/26/2018

Following the adverse verdict against Smithfield Foods in federal court and a second ongoing trial, the North Carolina Legislature passed the Farm Act of 2018 by a 65 to 42 affirmative House vote. The parallel Senate Bill 711 was passed and referred to the Governor for signature on June 15th. The Bill caps the payments for lawsuits and prohibits plaintiffs from obtaining punitive damages. A class action would only include residents within one half mile from a farm and any lawsuits would have to be filed within a year of initial operation or following a “fundamental change” to a farm.

On June 25th Governor Roy Cooper exercised his veto on Senate Bill 711. He stated “While agriculture is vital to North Carolina’s economy, so property rights are vital to people’s homes and other businesses” It is expected that legislators will convene to vote an override.

State legislation does not preclude plaintiffs filing suits in federal courts which are not bound by state laws.

The rapid response by the North Carolina legislature is a reflection of concern by representatives and senators of rural constituencies following an adverse verdict against Smithfield Foods. A series of lawsuits have been filed in Federal court alleging nuisance generated by current practices applied in manure disposal. The alternative to lagoons and spraying would be to install bio-digesters. This would require capital expenditure beyond the resources of contractors and possibly represent a deal-breaker for integrators in North Carolina including Smithfield, which is owned by the WH Group of China. Nuisance lawsuits, if successful, have the potential to limit pork production in the state.


 

WOTUS Rule Challenged By Agricultural Organizations

06/26/2018

An amicus brief has been filed by a number of agricultural organizations including the U.S. Poultry and Egg Association, American Farm Bureau Federation, Natinoal Cattlemen’s Beef Association and the National Corn Growers Association in addition to real estate, mining, manufacturing and forestry groups.

The brief opposes the Waters of the United States (WOTUS) Rule on the following grounds:

  • The promulgation of the Rule was procedurally defective based on the lobbying efforts of the EPA to limit opposition in Congress.
  • Extending the jurisdiction of the EPA beyond the Clean Water Act
  • The WOTUS Rule is unconstitutional as it violates the Commerce Clause and the Due Process Clause.

 

Blockchain Pilot Developed for Food Companies

06/26/2018

FoodLogiQ of Durham, NC has partnered with AgBiome Innovations located in Research Triangle Park, NC, to produce a blockchain pilot for Tyson Foods, Testo North America and Subway Independent Purchasing Cooperative. Dean Wiltse, CEO of FoodLogiQ stated “Over the years, input from our customers and partners have been invaluable in helping us make critical improvements to the features and functionality of the FoodLogiQ product and the same will be true with our blockchain pilot.” He added “as a technology pioneer with a legacy of success in enhanced traceability for the food industry, FoodLogiQ will be taking the lead on block chain exploration within the food space.”

Charles Irizarry, Chief Technology Officer for FoodLogiQ stated “We are finding that companies are jumping into block chain pilots without first understanding their business problems. We look forward to working with current and future block chain pilot partners to help them navigate this complex landscape and collaborate on how block chain can support the unique business.”


 

Organic Trade Association Records Increase in Consumption of Organic Foods in 2017.

06/26/2018

The Organic Trade Association reported that sales of organic products in the U.S. attained $49.4 billion in 2017, up 6.4 percent from 2016 representing an increase of $3.5 billion. Organic food represented 92 percent of all organic sales. The 6.4 percent growth rate compares unfavorably with 9 percent for 2016 which was impacted by slow growth in organic dairy and eggs. Organic foods represent 5.5 percent of the total retail market.

In comparison, total food sales increased by 1.1 percent in 2017 indicating a six-fold differential in growth between organic and conventional, albeit from a much lower base.


 

Starbucks to Close 150 Stores

06/26/2018

In an interview with Jim Cramer on CNBC on Wednesday 20th June, CEO Kevin Johnson addressed issues facing Starbucks including overtrading in specific areas.

The Company will close 150 stores in coming months, based on underperformance in localities with a high concentration of existing locations. The number of closings should be compared to the total number of stores worldwide which attained 28,209 on April 1st 2018 and the opening rate in excess of one per day. Starbucks attained a two percent increase in same-store sales in global operations and a three percent increase in ticket value. The Company predicts a one percent growth in global sales for the third quarter during which controversy swirled in the U.S. over the arrest of two patrons at a Philadelphia store.

Starbucks (SBUX) has traded over a 52-week period in the range of $50.11 to $61.92. On June 26th at 15H15 SBUX was close to the 52-week low at $50.60.

The company has a market capitalization of $69.7 billion and for the second quarter of fiscal 2018 earned $660 million on total revenue of $6.03 billion.


 

Humane Farm Animal Care Retracts False Statements

06/26/2018

According to media reports, Adele Douglas, the Executive Director of Humane Farm Animal Care has retracted communications released on May 20th 2016 relating to management and certification of pasture-raised eggs by Handsome Brook Farm.

The statement was addressed to a number of retail chains implying that Handsome Brook Farms was not in compliance with the National Organic Program and American Humane Association Certification. The statement contained inaccuracies based on unconfirmed reports by competitors of Handsome Brook Farm.

Handsome Brook Farms was established in 2007 as an upstate New York bed-and- breakfast enterprise. Subsequently the owners extended their operation to produce pasture-raised eggs and developed a supply network incorporating USDA Certified Organic family-operated farms.

Handsome Brook Farms will achieve Humane Farm Animal Care certification for pasture-raised eggs during 2018 but is already certified by the American Humane Association program.


 

Amazon Leverages Whole Foods Market to Prime

06/25/2018

In order to generate a return on the $13.7 billion investment in Whole Foods Market, Amazon intend to increase both the volume and value of food and beverage sales through Prime. It is estimated that these categories represent U.S. sales of close to $1 trillion annually.

The Whole Foods Market brick-and-mortar presence comprises 484 stores with possibly 35 under construction including smaller-format urban 365 locations. Whole Foods Market customers are now offered products through Amazon Prime. The number of Whole Foods Market stores is relatively small compared to competitors Kroger and Walmart. These national chains and many regional banners have also established online purchasing and home delivery.

Industry observers believe that Amazon is aiming for 1,500 locations in the U.S. This would be costly and might not provide a return on capital commensurate with other Amazon activities.

Since it is no longer possible to determine the financial performance of Whole Foods Market since incorporation into Amazon, it will be some time before the wisdom of the purchase becomes evident.


 

National Egg Products School in September

06/22/2018

The National Egg Products School supported by the American Egg Board will take place September 10-13 at the University of Georgia, Department of Poultry Science.

 

The course bring together experts from the USDA-ARS, Iowa State, Texas A&M and North Carolina State University. The course leader in 2018 is Dr. Manpreet Singh, Extension Food Safety Specialist and a Professor in the Department of Poultry Science at the University of Georgia.

 

The program comprises lecture sessions and hands-on laboratories and extends from production through processing.

 

Further information can be obtained from Dr. Singh at manpreet@uga.edu


 

Antitrust Suit Verdict Favors Holdout Defendants

06/22/2018

A jury in the U.S. District Court for the Eastern District of Pennsylvania found that three egg producers did not conspire to restrain trade and boost prices. Despite the Plaintiff Sodexo and others

 

RW Sauder and Ohio Fresh Eggs were adjudged not to be parties to any conspiracy.  The jury found that Rose Acre Farms one of the three defendants was a participant but there was no reasonable restriction of trade and the jury ruled that they were not liable of antitrust violations as alleged.

 

The alleged conspiracy to restrain trade involved claims initially by food-device entity Sodexo  of wilfull price fixing after the entire industry conformed to welfare standards coordinated by the United Egg Producers.  There was no evidence that there were any limitation to the domestic egg supply or that any actions carried out by producers in a highly competitive and frequently marginal or even unprofitable market harmed retailers or consumers.

 

Prior to the June 14th 2008 judgement, many producers elected to settle to avoid extended legal costs.  It is a matter of record that Cal-Maine Foods settled for $28 million in July 2013, in addition to land O’Lakes on behalf of their subsidiary Moark LLC named as a co-defendant with Hillandale Farms and Michael Foods.  Since Cal-Maine is a public company the Board wished to place the challenges and costs relating to defending the lawsuit behind them.

 

The case was filed in 2002 and was captioned Processed Egg Products Antitrust Litigation E.D.Pa. #08-nd-2002


 

Poland Recalls Eggs as a Result of Ionophores Residues

06/22/2018

Authorities in Poland have recalled 4.3 million eggs potentially contaminated with lasalocid an anticoccidial.  Although ionophores anticoccidials have mild antibiotic action within the intestinal tract they are regarded as antiparaciticals in the E.U. and are not antibiotics.

 

According to the news report, the drug was erroneously added to feed delivered to a farm near Poznan. A total of 4.3 million eggs would be produced by a flock of approximately 750,000 hens or an equivalent number of hens on small farms provided with contaminated feed over a seven day period.

 

The news report did not indicate the level of egg residue and it is presumed that the eggs were recalled based on the recognition of inclusion of lasalocid in layer diets.

 

The event would in any event be self-limiting since inclusion of lasalocid in laying diets at a level which could presumably result in residues would effectively end production in the flock.

Courtesy Zootecnica International


 

Economist Projects Losses due to any U.S.-China Trade Dispute

06/22/2018

If the U.S. and China place reciprocal 25 percent tariffs on up to $50 billion in imports to their respective countries, farms in Iowa may lose as much as $620 million depending the duration of the trade dispute and the level of tariffs.  Dr. Chad Hart an agriculture economist at Iowa State was responsible for the projection. The study quantified the impact on Iowa farmers producing 562 million bushels of soybeans in 2017 valued at $5.2 billion.

 

China has already imposed a 25 percent tariff on pork and Mexico plans similar action which will result in additional losses of up to $360 million annually for producers in Iowa.

 

The effect of tariffs on agricultural trade are difficult to quantify given the speed at which politicians are announcing intended impositions. It will be some time before the extent of damage is known.  The loss to farmers in Midwest states will most certainly be a topic influencing 2018 mid-terms and it is hoped that resolution will be achieved within weeks and certainly before the fall harvest.


 








































































































































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