Egg Industry News


WEEKLY COMMODITY REPORT

12/07/2018

The following quotations for the months as indicated were posted by the CME at 15H00 on December 7th together with values for the reference months in parentheses confirming an upward move slightly exceeding two percent in both soybean and corn prices for December compared to the previous week but with no change in the price of soybean meal. The rise is attributed to speculation that China might resume imports of U.S. commodities free of punitive tariffs.

COMMODITY

 

Corn (cents per bushel)

Dec.'18 374 (366)

March '19 385 (377)

Soybeans (cents per bushel)

Jan. '19 916 (893)

March '19 928 (906)

Soybean meal ($ per ton)

Dec. '18 309 (309)

March '19 315 (313)

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

COMMODITY CHANGE FROM PAST WEEK

Corn:              Dec. quotation up 8 cents per Bu.      (+2.2percent)

Soybeans:       Jan. '19 quotation up 23 cent per Bu. (+2.6percent)

Soybean Meal: Dec. quotation unchanged                 ( -- )

  • 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

There is now some optimism concerning the outcome of the dinner meeting at the G-20 Summit between the delegations from the U.S. and China led by their respective Presidents. The U.S. has agreed to a three-month delay in raising tariffs from ten percent to twenty-five percent on over $200 billion in annual imports from China. In return China has agreed to purchase an unspecified quantity of agricultural commodities, energy and heavy equipment from the U.S. to offset the negative balance of payments. Negotiations will resume to resolve the major structural issues impacting trade and the concerns raised by the U.S. concerning coercive practices, cyber-espionage and theft of intellectual property.

According to the November 8th 2018 WASDE Report #583, which did not affect commodity prices, 81.8 million acres of corn will be harvested in 2018 to produce 14.62 Billion bushels. The soybean crop is projected to attain 4.60 Billion bushels from 88.3 million acres harvested. The levels of production for the two commodities are based on revised projections of yield and acreage harvested. Ending stocks were revised based on anticipated domestic use and exports.

See the WASDE posting summarizing the November 8th USDA-WASDE Report #583 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest

Quarterly corn and soybean stocks were estimated by USDA in the last release for 2018 on September 28th to total 2.14 Billion bushels (14.7 percent of the 2017 harvest) and 0.44 Billion bushels (10.0 percent of 2017 harvest) respectively. Of the "old soy crop" 0.10 Billion bushels are held as on-farm storage, up 15 percent from the corresponding period in 2017. Off-farm storage is up 58 percent to 0.34 billion bushels. Disappearance from June to August was 0.78 Billion bushels, up 18 percent from the corresponding period in 2017. This reflects accelerated shipments in anticipation of increased tariffs imposed by China. Since August soybean exports to China have ceased.

Unless shipments of corn and soybeans to China resume the financial future for row-crop farmers appears bleak despite the promise of $12 billion as "short-term" compensation. Recent comments from the USDA suggest that this value may be trimmed. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. Oversupply of ethanol with the current 10 percent dilution mandate is evident from the spot price of $1.22 per gallon ($1.26 last week) compared with a 2018 peak in late March of $1.60. Exports have been constrained by the retaliatory tariffs imposed by China on U.S. ethanol. Some refiners are reducing production and mothballing fermentation plants.

The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. It must be recognized that the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift which keeps on giving. The mandate is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


 

Kroger Reports on Q3 of FY 2018

12/06/2018

In a press release dated November 6th The Kroger Company (KR) announced results for the 3rd Quarter of Fiscal 2018 ending November 10th 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)

3rd Quarter Ending.

Nov. 10th 2018

Nov. 4th 2017

Difference (%)

Sales:

$27,672,000

$27,749,000

-0.3

Gross profit including LIFO adjustment and advertising expenses

$4,027,000

$6,217,000

-35.2

Operating income:

$647,000

$747,000

-13.4

Net Income

$317,000

$397,000

-20.2

Diluted earnings per share:

$0.39

$0.44

-11.4

Gross Margin (%)

14.5

22.4

-35.5

Operating Margin (%)

2.3

2.7

-14.8

Profit Margin (%)

1.2

1.4

-14.3

Long-term Debt:

$11,647,000

$13,118,000

-11.2

12 Months Trailing:

     

Return on Assets (%)

4.3

   

Return on Equity (%)

55.8

   

Operating Margin (%)

2.0

   

Profit Margin (%)

3.1

   

Total Assets

$38,141,000

$37,028,000

+3.0

Market Capitalization

$

   

52-Week Range in Share Price: $22.85 to $32.72

Market noon Nov. 6th post-release $28.48

Forward P/E: 12.6 Beta 0.7

Same Store Sales growth excluding fuel +1.6 percent. Growth in digital sales +60%.

 

In commenting on results Chairman and CEO Rodney McMullen stated, "Kroger is transforming our business model. We're moving from a traditional grocer to a growth company with both a strong customer ecosystem that offers anything, anytime, anywhere, and asset-light, high-margin alternative partnerships and services. Restock Kroger is the blueprint for this transformation.

"We are strengthening the Kroger ecosystem by reducing costs and investing the savings in our associates, technology, and price to grow units, traffic and share. Leveraging our store, logistics and data assets in turn creates incremental new profit streams, which then further redefines the customer experience. In this way, our new growth model will be a virtuous cycle.

"We are doing all of this and remain committed to delivering on our 2020 Restock Kroger financial targets."

The Company recorded a $12 million LIFO adjustment in Q3 2018 compared to $3 million inQ3 FY 2017.

YTD the Company has expended $589 million in the OCADA automated warehouse system.

Kroger confirmed EPS guidance of $2.00 to $2.15 for FY 2018.


 

USDA Weekly Egg Price and Inventory Report, December 6th 2018.

12/06/2018
  • Hen Numbers in Production increased 0.3 million to 324.4 million.
  • Shell Inventory Up by 4.4 Percent from Previous Week.
  • USDA Midwest Benchmark Generic Prices for Extra Large, Large and Medium down 1.3, 0.8, and 5.9 Percent Respectively Compared to Past Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on December 3 rd the Midwest wholesale prices for Extra Large, Large and Medium sizes were lower by 1.3, 0.8 and 5.9 percent respectively 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 December 3rd USDA Egg Market News Report (Vol. 65: No. 49) documented a USDA Combined Region value rounded to the nearest cent, of $1.28 per dozen delivered to warehouses week ending November 30th. This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.20 per dozen. At the high end of the range, price in the South Central Region attained $1.35 per dozen. The USDA Combined Price last week was 38 cents per dozen below the three-year average and 60 cents per dozen below the corresponding week in 2017. Weekly Combined Regional price is not increasing with the same velocity during 4th Quarter of 2018 compared to the corresponding weeks in 2017.

 


What have we Gained from the G-20 Dinner with Xi?

12/06/2018

Now that the rhetoric following the dinner between the Presidents of China and the U.S. and their respective entourages has been parsed and debated, there is a question as to what was actually agreed to given the absence of a communique.  The take-home message is that the U.S. has made a concession by delaying for a three-month period, the announced escalation of the current 10 percent tariff on approximately $200 billion in exports from China to U.S.  China has in turn agreed to import “substantial” (but unspecified) quantities of agricultural and industrial products to reverse the negative balance of trade.

The major issues of misappropriation of intellectual property, coercive pressure on U.S. businesses entering the market in China and state support for steel and other industries were not addressed.  It was accepted that these structural and fundamental issues will be the subject of negotiation over the subsequent three months.  There was even a question as to the starting time.  Does the clock start ticking on December 1st 2018, January 1st 2019 or after clearing away the dinner plates?

Prior to the meeting, Larry Kudlow the Director of the National Economic Council expressed pessimism over the bilateral talks although he was receptive to some deal to “turn a new page, a breakthrough”.  Kudlow is joined in moderation by the Secretary of the Treasury, Steven Mnuchin, who has independently initiated discussions with counterparts in Beijing.

The task ahead will be to normalize trade relations between the two largest world economies. This will be fraught with overlays of history, recalcitrance by China and an aggressive approach by the U.S., conflicting with the Asian concepts of slow and deliberate progress and the need to maintain “face”. 

 

It is evident that both sides have motivation to defuse the trade conflict. China must maintain a high growth rate and generate jobs. To remain in power after 2020 the U.S. Administration must increase prosperity through the next two years despite predictions of a recession. Inherent caution on the part of our opponent in negotiations and a take-no-prisoners attitude by designated Chief Negotiator, Robert Lighthizer suggest that talks will be contentious. Threats to impose tariffs appear to be the best hand that the U.S. can play. 

 

In the event that tariffs are prolonged and if agricultural and industrial trade is not restored, the negative effects of the U.S. bargaining strategy will become apparent in the form of inflation and decreased spending necessary to maintain economic growth.  At the end of the day any competent economist will confirm that tariffs are effectively taxes, limiting spending power. Economists also warn against conflating a trade deficit with a “loss”, a misconception accepted by the Administration.


 

China Responds to the Bilateral Meeting at the G-20 Summit

12/05/2018

The Administration issued a statement on Monday December 3rd confirming the lack of specifics arising from the dinner meeting between the Presidents of China and the U.S. and their respective advisors on the preceding Saturday night. According to tweets and statements from the President it was his understanding that his gesture in holding tariffs on $200 billion of imports to the U.S. from China at 10 percent and not raising the rate to 25 percent on January 1st 2019 was matched by concessions from our trading partner characterized as a “great deal”.

 

It was stated that China would import an unspecified but “very substantial” quantity of energy, agricultural products and industrial equipment, limit distribution of fentanyl and would reduce the 40 percent tax on U.S. automobiles. The comments from the President noted that outstanding issues including theft of intellectual property, coercive joint-venture agreements and state subsidized dumping would have to be resolved in bilateral negotiations within 90 days.

 

In a report from China posted on Reuters on Wednesday December 5th it is apparent that China has the intention of placing any increase in tariffs in abeyance during negotiations but offered no specifics on imports or reducing the tariff on autos. The article cited an official at the Chinese Academy of Social Sciences as stating “China should prepare but not rush to make concessions” Yu Yongding added “This is a competition of endurance to see who breaks first”.

 

It appears that a decision to clamp down on manufacture and trading in fentanyl has been made. A second consideration, relating to the theft of intellectual property was the subject of a November 21st directive from the Development and Reform Commission of China specifying retribution for errant companies.

 

A more definitive statement of intentions including the actual start date of the 90-day period for negotiations has yet to be officially announced. The success of the dinner meeting in Argentina will only be apparent from the timing and quantity of orders for soybeans and machinery in addition to meaningful progress in resolving structural issues. Given past history, this may take a lot longer than anticipated by the White House as of Sunday morning.


 

Opposition to Relocation of USDAERS Intensifying

12/05/2018

In September, Secretary of Agriculture Dr. Sonny Perdue announced that the Economic Research Service and the National Institute of Food and Agriculture would be moved out of Washington to a yet to be decided location. The justification for the move was to save money and to place the agencies nearer the farming communities they serve. In addition, Dr. Perdue believes that the move from Washington DC would reduce the turnover rate among personnel.

In a letter of protest to Congress, prominent academics, economists affiliated to industry and previous heads of the ERS urged intervention to rescind the decision. Dr. Gale Buchanan, former USDA Chief Scientist stated “The proposed restructuring is a major disruption in the USDA Research arm that provides invaluable support for American food and agriculture.”

Moving the two agencies from Washington would lead to loss of direct engagement with the scientific research community including the National Science Foundation, the USDA-Agricultural Research Service and the National Institutes of Health. The proposal to move the agencies is also opposed by the American Statistical Association.

Having settled in Washington, key personnel may resign if the ERS is relocated from DC to take positions with either other government agencies, universities, consultancies, think-tanks, industry associations or commercial enterprises. This would lead to disruption of activities.

A similar situation occurred when the Services group responsible for approval of biologics within the USDA was moved to Ames, IA. during the 1980s. Although this change was justified based on the need for the group to interact with scientific colleagues at Iowa State University and the National Veterinary Services Laboratory, disruption of activities and resignations impeded approval of biologicals during the two years following the move.


 

Successful October for AEB Incredible Egg Website

12/05/2018

The AEB has announced that during October, 14.9 million impressions and 32,000 website visits were achieved by the Incredible Egg website.

Per capita consumption for 2018 will attain 280 eggs, a 1.4 percent increase over 2017. According to the USDA, the projected consumption in 2019 will increase by 0.6 percent to 281.7.


 

Cage Free Egg Stats

12/05/2018

According to Nielsen data circulated by the American Egg Board, for the first ten months of 2018, sales volume of cage-free shell eggs increased by 17.2 percent to attain a 10 percent market share based on volume. With respect to dollar value, cage-free eggs advanced by 11 percent to achieve a 17 percent share compared to the corresponding months of 2017.


 

The New York Times Features Five Fast Dishes with Eggs

12/05/2018

On November 23rd, Emily Weinstein posted an article featuring five weeknight dishes including, kale sauce pasta, shortcut chilaquiles, oven-steamed salmon, all of which either contained an egg or egg products.


 

Wyoming Ag-Gag Law Ruled Unconstitutional

12/05/2018

The State of Wyoming has suffered a reverse following rejection by the 10th Circuit, of a 2015 law enacted in Wyoming to limit access to open land for the purposes of collecting resource data without permission from the landowner. The 10th Circuit ruled in September 2017 that finding the “collection of resource data constitutes a protected creation of speech”. U.S. District Judge Scott Skavdhal granted summary judgement in favor of plaintiffs including the National Press Photographers Association, the National Resource Defense Council and the Western Watersheds Project.

In his ruling, Judge Skavdhal stated “There is simply no plausible reason for this specific curtailment of speech and this statute is a clear attempt to punish individuals who are engaging in protected speech that at best some find unpleasant.”


 

Romania Receives New Crop Soybeans From the U.S.

12/05/2018

The U.S. Soybean Export Council has announced that Romania has received the first shipment of new crop (2018 harvest) soybeans from the U.S.

The Export Council has been active in developing new markets for soybeans following the cancellation of orders from China as a result of the ongoing trade dispute. A companion posting noted that for the market year 2018, soybean exports to nations other than China increased 50 percent to 750 million bushels in market year 2018.                      

For the past two decades, the Export Council has invested in education and technical assistance to prospective and ongoing importing nations to demonstrate the superiority of U.S.-origin soybeans with respect to nutrient content. Evaluation of ingredient quality and establishing technology for assays has resulted in differentiation of what might be regarded as a commodity into a product with superior attributes associated with U.S. origin.

It is estimated that per capita poultry meat consumption in Romania will increase to 61 pounds in 2018, displacing pork. Constanta at the mouth of the Danube River is well suited for distribution of bulk product shipped to the Nations major port for onward transport to the hinterland of Romania, and to Bulgaria and other Eastern European nations served by the river system and by railways.

The latest shipment of soybeans will be processed by a plant in Romania operated by Bunge to produce soybean meal and soy oil which is valued in both Romania and Bulgaria.


 

Israel to Import Eggs Due to Endemic Salmonella Infection

12/05/2018

The Ministry of Health of Israel has concluded that Salmonella prevention programs are inadequate to protect consumers of table eggs. Accordingly, the Minister of Agriculture has granted permission to import eggs presumably from the E.U. on a duty-free basis to maintain reasonable retail prices for consumers.

Following a report by Dr. Sagit Nagar, Head of Poultry Diseases in the Veterinary Division of the Ministry of Agriculture, a high-level of Salmonella (serotype not specified but presumed to be SE) has infected many of the farms that supply the market.

Recently the Government of Israel offered substantial support to producers to eradicate Salmonella infection, but the association representing the farmers did not agree to the terms and conditions of the grant.

It is noted that egg production in Israel is derived from numerous small-scale family operated units with relatively primitive facilities. The unacceptable prevalence of Salmonella infection is enigmatic given the high standard of poultry veterinary resources in the nation and it is possible that the problem of salmonellosis is more socio-political than epidemiologic.


 

Publix to Close Green Wise Market in Palm Beach Gardens, FL

12/03/2018

The first of the series of Green Wise supermarkets opened in 2007 specializing in organic and natural foods will be closed on December 29th.

 

In a statement, Publix stated, “A number of variables and evaluations were utilized in making the decision to close this store but in general the store was under performing.”  Publix also noted that there were no plans to open another banner at the location.  Additional Green Wise markets are located in Mt. Pleasant SC, Lakeland, Boca Raton FL, Marietta GA and Fort Lauderdale FL.


 

Smithfield to Establish Joint Venture on Hog Waste

12/03/2018

Stung by public opposition to hog-waste lagoons and adverse court judgments, Smithfield Foods is establishing a joint venture enterprise with Dominion Energy to convert waste into methane gas.  Designated projects will require $125 million for each of the two partners over ten years to convert from lagoons located on contract farms in North Carolina, Virginia and Utah.

 

Ken Sullivan, CEO of Smithfield noted, “The environmental footprint of agriculture has to do with the crops fed to livestock but also the waste part of animal agriculture.”  He added, “This effort is focused on the waste aspects and our endeavor to divert an inevitable part of the waste stream in to something usable that has economic benefit and in the process reduces our carbon footprint.” 

 

The conversion project will cover 90 percent of hog finishing in North Carolina and Utah.  The company is concentrating on the finishing phase of the production cycle since most waste is produced during the 20 weeks during which hogs grow from 50 pounds to market weight.

 


 

Kroger Select Site For First Ocado Robotic Warehouse

12/03/2018

Kroger announced on Tuesday, November 20th that Monroe, OH will be the site selected for the first robotic fulfillment center using the technology developed by Ocado of the U.K.

The project will encompass 335,000 square feet and will cost $55 million.

Chairman Rodney McMullen stated “Kroger is joining with the best partners in the world to co-innovate and leverage technology to redefine the customer experience.”


 

USDA DATA ON CAGE-FREE PRODUCTION

12/03/2018

Based on the importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders. There is some doubt as to the accuracy of the monthly flock numbers and the question is raised whether it would be more desirable to post accurate quarterly data in place of erratic monthly figures.

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, supplementing the information posted weekly in the EGG-NEWS Egg Weekly Price and Inventory Report.

The USDA Cage Free Report for the month of November 2018 released on December 3rd 2018 documented constant flock sizes in hens producing under the Certified Organic seal and for cage-free flocks as compared to September 2018. Organic and cage-free egg production were higher by 0.3 percent from October The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. Average flock production rose to 75.5 percent for both categories of non-caged hens (accepting USDA data):-


 


Easing of Trade Tensions with China Possible at G-20 Meeting

11/30/2018

The direct meeting between the leaders of the World’s two largest economies may result in an easing of the trade war based on reciprocal imposition of tariffs. Since both Presidents have political motivation for a lessening in tensions some interim measure such as the U.S. agreeing to delay imposing a 10 percent tariff on $200 billion in imports from China would create an atmosphere for more extensive negotiations.

 

At issue is a new “Trade Architecture” combining abolition of misappropriation of intellectual property, state subsidies by the government of China allowing enterprises to compete with the U.S. and the E.U. and eliminating both cyber-espionage and coercive joint-venture agreements.

 

Whether or not the powers can agree to a truce will depend on who has the ear of the President. Uber-sinophobe Dr. Peter Navarro and Trade Representative Robert Lighthizer are firm in their support of pre-election rhetoric. They are countered by Treasury Secretary Steven Mnuchin and Director of the National Economics Council Larry Kudlow, who advise dialog and moderation. 

 

Certainly many farmers hope that some agreement will be reached which will permit resumption of exports of soybeans and also contribute to a strengthened U.S. economy.


 

Bayer Considers Selling Animal Health Segment

11/30/2018

Faced with shareholder opposition, Bayer AG and CEO Walter Baumann are

 considering a number of measures to increase share value.  At issue is the growing number of lawsuits alleging that the herbicide glyphosate marketed as Roundup™ by the recently acquired Monsanto is responsible for non-Hodgkin lymphoma.

 

The Company has announced layoffs of ten percent of its workforce of 113,000 and will sell some leading brands acquired from Merck and Co. The Animal Health business, strongly dependent on antiparasitics is also under consideration for divestment.


 

WEEKLY COMMODITY REPORT

11/30/2018

The following quotations for the months as indicated were posted by the CME at close of trading on November 30th together with values for the reference months in parentheses confirming an upward move in both soybean and corn prices compared to the previous week.

 

COMMODITY

 

Corn (cents per bushel)

Dec.'18 366 (359)

March '19 377 (370)

Soybeans (cents per bushel)

Jan. '19 893 (881)

March '19 906 (894)

Soybean meal ($ per ton)

Dec. '18 309 (306)

March '19 313 (311)

 

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

COMMODITY CHANGE FROM PAST WEEK

Corn: Dec. quotation up 7cents per Bu. (+2.0percent)

Soybeans: Jan. '19 quotation up 12 cent per Bu. (+1.4percent)

Soybean Meal: Dec. quotation up $3 per ton (+0.9 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

There is now some optimism concerning the outcome of the dinner meeting at the G-20 Summit between the delegations from the U.S. and China led by their respective Presidents. The U.S. has agreed to a three-month delay in raising tariffs from ten percent to twenty-five percent on over $200 billion in annual imports from China. In return China has agreed to purchase more agricultural commodities, energy and heavy equipment from the U.S. to offset the negative balance of payments. Negotiations will resume to resolve the major issues impacting trade and the concerns raised by the U.S. concerning coercive practices, cyber-espionage and theft of intellectual property.

According to the November 8th 2018 WASDE Report #583, which did not affect commodity prices, 81.8 million acres of corn will be harvested in 2018 to produce 14.62 Billion bushels. The soybean crop is projected to attain 4.60 Billion bushels from 88.3 million acres harvested. The levels of production for the two commodities are based on revised projections of yield and acreage harvested. Ending stocks were revised based on anticipated domestic use and exports.

See the WASDE posting summarizing the November 8th USDA-WASDE Report #583 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest

Quarterly corn and soybean stocks were estimated by USDA in the last release for 2018 on September 28th to total 2.14 Billion bushels (14.7 percent of the 2017 harvest) and 0.44 Billion bushels (10.0 percent of 2017 harvest) respectively. Of the "old soy crop" 0.10 Billion bushels are held as on-farm storage, up 15 percent from the corresponding period in 2017. Off-farm storage is up 58 percent to 0.34 billion bushels. Disappearance from June to August was 0.78 Billion bushels, up 18 percent from the corresponding period in 2017. This reflects accelerated shipments in anticipation of increased tariffs imposed by China. Since August soybean exports to China have ceased.

Unless shipments of corn and soybeans to China resume the financial future for row-crop farmers appears bleak despite the promise of $12 billion as "short-term" compensation. Recent comments from the USDA suggest that this value may be trimmed. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. Oversupply of ethanol with the current 10 percent dilution mandate is evident from the spot price of $1.22 per gallon ($1.26 last week) compared with a 2018 peak in late March of $1.60. Exports have been constrained by the retaliatory tariffs imposed by China on U.S. ethanol. Some refiners are reducing production and mothballing fermentation plants.

The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. It must be recognized that the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift which keeps on giving. The mandate is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


 

The Source of African Swine Fever Virus in China Investigated

11/30/2018

The emergence of African swine fever in China represents a potential threat to the entire Nation’s industry considered to be the largest in the world.  Molecular characterization of a pathogen can provide evidence of the source of infection and accordingly scientists at the China Animal Health Epidemiology Center in Qingdao undertook an evaluation of the virus. 

 

The isolate was obtained from dead pigs on a farm in the Shenbei district of Shenyang, Liaoning Province.  Genotype identification based on the p72 gene revealed that the China 2018/1 virus belongs to genotype II.  Serologic typing was undertaken applying  hemabsorption inhibition assay confirming that the virus is classified as a sero-group 8 strain.

 

Based on the p72 genotpye II and 100 percent p72 sequence homology with strains from Eastern Europe and Africa, it was concluded that the virus was introduced in all probability from Eastern Europe although the specific mode of introduction has yet to be defined.

 

*Ge, S. et al Molecular Characterization of African Swine Fever Virus China, 2018 Emerging Infectious Diseases. 24: 2131-2132 (2018)

 


 

Considerations in Selecting Fans for Retrofits and New Houses

11/30/2018

When retrofitting high-rise layer houses to aviary systems and erecting new cage-free housing for pullets and hens, ventilation plays a major role in optimizing performance and minimizing cost.  Sustainability is an important consideration for producers, especially now that customers are imposing more rigorous standards on the conservation of resources including, water, electrical power and avoiding waste.

 

SKOV has introduced a range of direct driven variable speed BlueFan, offering more precise control of ventilation and improved energy efficiency. These fans exceed the capabilities of conventional belt-driven fixed-speed fans that are the mainstay of the U.S. egg industry.  SKOV is a multinational company based in Denmark with over 60,000 poultry houses in operation, spanning 65 nations on five continents.

 

The advantages of a variable speed fan are based on physical laws determining performance.  The ability of a fan to move air, measured in cubic feet per minute, increases proportionally with fan speed when using the same diameter blade.  Sometimes producers change the diameter of drive pulleys to increase airflow, but unfortunately this approach bears a heavy cost.  Power consumption increases exponentially with fan speed.  At a blade speed of 400 rpm, power consumption for a typical 48” fan may be 500 watts.   At 500 rpm, representing a 25 percent increase in speed and air displacement, the power requirement will double to 1,000 watts which will be reflected in the cost of operation over a specific period.  The opposite is also relevant in that slowing the fan speed to reduce airflow results in disproportionately lower power consumption. It can be shown that at full capacity, a variable speed fan operating at 550 rpm uses 1,400 watts of power.  If fan speed is reduced by 20 percent to 450 rpm, power is reduced to 780 watts.  A 38 percent reduction in fan speed, representing a practical limit, to 340 rpm effects a further reduction in power use to 350 watts, 65 percent lower than at maximum capacity.


 


USMCA Signed at G-20 Meeting

11/29/2018

The respective leaders of the U.S., Canada and Mexico have signed the USMCA replacing NAFTA at the G-20 Summit in Buenos Aires. This was symbolic since the Agreement must be ratified by the legislatures of all three nations. The 116th House with a Democratic majority is expected to demand concessions in other areas while holding the Agreement hostage.


 

Newcastle Outbreak in Sweden Questions Justification for Susceptible Poultry Populations

11/29/2018

In late October, a Newcastle disease outbreak occurred among a flock of 5,000 laying hens in Vastra Gotaland County, Sweden.  The specific case involved a sharp drop in production but no appreciable increase in mortality.  Avulavirus Type-1 (formally avian paramyxovirus-1) was isolated from the flock.  The U.K. Department of Environment Food and Rural Affairs evaluated the case and reported that pigeons were the most likely source of virus given mortality in these free-living birds in the affected county at the end of September.

 

The incident is reminiscent of the outbreak of clinical Newcastle disease in commercial layers in the U.K. during 1983.  The causal agent was a pigeon paramyxovirus-1 introduced into a susceptible hen population. The U.K. had previously abandoned routine Newcastle disease vaccination based on the presumption that the virus had been eliminated from the Nation.  Pigeon paramyxovirus-1 was introduced to the U.K. by racing pigeons and the vehicle of infection was contaminated feed.  A more recent case of avulavirus type-1 (paramyxovirus-1) in a mixed flock of partridges and pheasants was diagnosed in the U.K. in 2006.

 

Pigeon paramyxovirus-1 was introduced to the U.S. in the mid 1980’s with isolation of the virus in northeastern states and eventually extending to Texas.  The disease was suppressed and presumably eradicated by extensive vaccination of racing pigeons using inactivated pigeon paramyxovirus-1 specific emulsions.  It is significant that there was no documented case of infection of any commercial flock with pigeon paramyxovirus-1 presumably due to an acceptable level of immunity stimulated by routine Newcastle disease vaccines including Hitchner B1 and LaSota strains with or without boosting using oil emulsion vaccines.

 

It is questioned whether national policy should be based on attempting to exclude introduction of virus given that free living birds and migratory waterfowl can carry and disseminate viruses including avulavirus which can induce Newcastle disease-like effects in susceptible flocks.


 

FDA to Fund New Drugs

11/27/2018

In a November 26th announcement the U.S. Food and Drug Administration issued a request for proposals to treat uncommon diseases in major and minor animal species. The grants will be made available in terms of the Minor Use and Minor Species Animal Health Act of 2004.  The intent of this legislation was to help pharmaceutical companies overcome the financial realities of serving a limited market.

 

Companies requesting drug approval must have an initial Investigational New Animal Drug document on file and must hold a designation granted by the Center of Veterinary Medicine Office of Minor Use and Minor Species Animal Drug Development.  Funding awarded by FDA must be used to offset the cost of testing for safety and efficacy of the drug as intended for use.  New animal drug evaluation documents must have been reviewed and accepted by the Center for Veterinary Medicine and should follow an acceptable study protocol.

 

Grants up to $100,000 annually for two years will be available for routine studies with larger grants for more complicated studies.

 


 

USAPEEC Hosts Egg Functionality Seminar

11/23/2018

USAPEEC Middle East promoted U.S. eggs during a November 12th program organized by the Emirates Culinary Guild. 

 

Chef Rabih Ameramer demonstrated deviled eggs, egg rolls, omelet sandwiches and canapes at the Ghaya Grand Hotel in Dubai.

 


 

Promotion of Egg Products in Korea

11/23/2018

USAPEEC Korea participated in the Seoul Café Show focusing on the bakery and quick service industries. Bakery menu items prepared using U.S. liquid and dried eggs products were on display at the exhibition. The Show featured products suitable for small cafes and bakeries that lack full preparation kitchens and rely on pre-cooked products which are heated and served.

 


 

Panera Bread Offering Breakfast Delivery

11/23/2018

According to the Panera Bread website, the company is now offering rapid pickup on E-orders using a dedicated shelf to eliminate waiting.  The company has introduced delivery of meals for the convenience of customers. Both programs require sign-in with registration.

 

Panera bread has extended their catering service including new and repeat orders for deliveries comprising more than ten items, Panera offers access through the catering tab on their website.


 

FDA Allows Qualified Health Claim for Oleic Acid Content

11/23/2018

Dr. Scott Gottlieb, Commissioner of the U.S. Food and Drug Administration announced in a November 19th release that the FDA responded positively to a petition to allow edible oils containing high levels of oleic acid to include a qualified health claim on labels.  The statement will read, “Supportive but not conclusive scientific evidence suggest that daily consumption of about one and one-half tablespoons of oils containing high levels of oleic acid may reduce the risk of coronary heart disease.” 

 

The claim will also require clarification that the benefit is only achievable if oleic acid “replaces fats and oils higher in saturated fat and not increase the total number of calories consumed in a day.”  To meet their criteria of the qualified health claim edible oils must contain at least 70 percent oleic acid.  Commercial oils derived from sunflower, high oleic acid safflower, canola oil in addition to olive oil will qualify for the claim.

 

The petition cited seven clinical studies evaluating the relationship between consumption of oils containing high levels of oleic acid and improved cholesterol levels which may cut the risk for coronary heart disease.  It is noted that one of the seven studies showed no significant effect and that consumption of high oleic acid containing oils will only beneficial if they replaced oils with a higher saturated fatty acid content. 

 


 

Lidl to Purchase 27 Best Market Stores

11/23/2018

After an initial round of expansion in the U.S., Lidl erected free-standing stores with 59 completed in Virginia, North Carolina, South Carolina, Georgia, Maryland, Delaware and New Jersey.

 

Despite initial consumer interest, sales waned and the company reassessed it business plan for the U.S.  In mid-year, Lidl suggested that they might consider using existing stores modified to Lidl specifications.

 

On Monday November 19th Lidl announced that it would purchase 27 Best Market supermarkets with 24 located on Long Island, NY and the remaining three in New Jersey. The transaction will close within the next few months and provide a solid basis for Lidl in a high density New York state area.

 

The CEO of Lidl U.S., Johannes Fieber stated, “We are excited to expand into many great communities on Long Island and across the New York City area and introduce more customers to our simple and efficient approach to grocery shopping, which will mean high-quality and huge savings for more shoppers.” 

 

It is understood that the employees of Best Market will have employment opportunities with Lidl after the transition with wages and benefits equal to or better than their current earnings.


 

Food Safety Net Services Participates in Training Program for South Africa

11/23/2018

Food Safety Net Services will host technical specialists and regulators from the Government of South Africa.  The program organized by the Norman E. Borlaug Institute for International Agriculture will review the U.S. food safety system including inspection, enforcement and recall.

 

During the site visit to the San Antonio laboratory, the South African visitors will be exposed to laboratory techniques and accreditation.

 

The need for the program is illustrated by the 2017-2018 outbreak of listeriosis responsible for over 1,000 cases.  The vehicle of infection was identified as processed sausage products (“polony”) widely consumed by the Nation’s lower economic demographic.  The outbreak demonstrated deficiencies relating to in-plant quality control and regulation by the state and central governments.

 

It is hoped that the visit will provide the South African officials with a perspective of U.S. quality control and the safety of food products.


 

Sad Passing of Dr Craig Riddell

11/23/2018

Dr. Craigmyle Riddell was born October 19th 1933, in Banchory, Scotland and passed away peacefully at St. Paul’s Hospital, in Saskatoon, on November 18th 2018. 

Craig was raised in Scotland where he attended St. Andrew’s University and completed a B.Sc. in 1954. He immigrated to Canada and in 1959 married Patricia Parker, whom he met while they worked in the oil industry. He later completed the DVM with honors at the Ontario Veterinary College in 1964. Thereafter he earned a Master’s Degree at the University of Connecticut in 1968 and a Ph.D. in Veterinary Pathology at the Western College of Veterinary Medicine in 1976. 

During his 30 year tenure at the University of Saskatchewan he taught veterinary and agriculture students, researched poultry metabolic diseases, and performed diagnostic and extension work for the poultry industry. He served as the first Canadian president of the American Association of Avian Pathologists for the 1985 term. He authored a handbook on Avian Histopathology, published over 80 papers in world-recognized journals, and presented at numerous conferences around the world. 

Craig had a love of the outdoors and many family vacations involved canoeing, hiking, skiing, and camping. He hiked the Continental Divide, from Banff to Jasper, in six stages, and over the course of four trips walked the length of the British Isles. Craig loved working with animals and birds. One of his many hobbies was training border collies to work with sheep. 

EGG-NEWS extends condolences to Pat to whom he was married for 59 years, his daughters, Morag Riddell and Cara Dawson, his son-in-law, Chris Dawson and grandson, Keiran.


 

California Applies Pre-emptive Depletion to Control END

11/21/2018

After 176 confirmed outbreaks of "Exotic" Newcastle disease among backyard flocks in three counties in California, authorities have instituted a pre-emptive depletion program. This action localized in designated localities in the most affected counties was taken somewhat belatedly given the fact that the first cases were diagnosed in mid-May and the outbreak demonstrated progressively ascending monthly incidence rates through September.

To date there has been no report of an epidemiologic study to ascertain the source of infection or the factors contributing to dissemination and persistence in non-commercial domestic galliform and anseriform species.

There has not been any indication of lateral spread from the clusters of backyard fowl to commercial poultry.


Message from State Veterinarian Dr. Annette Jones for Residents on VND-affected areas in Compton, Muscoy, and Mira Loma

Due to progression and duration of a virulent Newcastle Disease (VND) outbreak in parts of Southern California, the State Veterinarian has ordered mandatory euthanasia of birds in neighborhoods in Compton (Los Angeles County), Muscoy (San Bernardino County), and Mira Loma/Jurupa Valley (Riverside County). Unfortunately, even if birds and flocks have previously tested negative but now happen to fall within a designated mandatory euthanasia area, the birds must be euthanized. USDA/CDFA staff will contact affected bird owners.

While this action is difficult for all involved, it MUST be done to erradicate VND. Otherwise, the disease will continue to spread and kill additional flocks.

For more information please refer to: Virulent Newcastle Disease FAQs or call the Sick Bird Hotline at 866-922-2473

Readers can review previous posts on the outbreak by entering "Newcastle disease" in the SEARCH block


 

Con-Agra Foods Recalls Duncan Hines Cake Mixes

11/20/2018

On November 5th Conagra Foods recalled four flavors of Duncan Hines cake mix implicated in a limited outbreak of Salmonella Agbeni.

 

Oregon State health authorities recently recovered Salmonella Agbeni from samples of cake mix, closely related to isolates derived from five patients in an ongoing outbreak.

 

In a statement issued by the CDC, the Center is cooperating with state health departments and the FDA to ascertain whether patients consumed cake or raw cake mix under the Duncan Hines Brand.  Antibiotic resistance assays are in progress.

 

The U.S. plant producing the implicated cake mixes has undergone inspection by the FDA.


 

Effect of Corporate Turmoil on Restaurant Performance

11/20/2018

The results for the third quarter of fiscal 2018 posted by Papa John’s attest to the effect of negative publicity involving corporate in-fighting on consumer perception and patronage of restaurants.

 

For the quarter ended September 30th Papa John’s posted a loss of $13 million on revenue of $364 million.  Earnings, ignoring special charges and adjustments, can be compared to a net profit of $21.8 million for the corresponding quarter of fiscal 2017.  The company experienced a 16 percent downturn in revenue comparing the third quarter of 2017 with 2018.  North American comparable same-store sales declined 10 percent and international sales were 3 percent lower.

 

The Company projects that degradation of brand image will cost between $50 to $60 million for fiscal 2018 and together with special charges, adjusted diluted earnings per share will be in the range of $1.30 to $1.60 for the year and comparable same-store sales will be down by 6.5 percent to 8.5 percent for the entire year. 

 

Placing a best-face interpretation on results, Steve Ritchie, President and CEO commented, “Our third-quarter results continue to reflect the brand challenges we have face this year and were exacerbated by the negative impact of the media coverage that began on July 11th.  On an optimistic note he added, “These events are not going to define the future Papa John’s. During the quarter we took important action to help repair our brand reputation and we believe good progress has been made.”


 

Private Labels Grow Faster than National Brands

11/20/2018

According to Supermarket News the IRI Private Label 2018 report confirmed that private-brand sales climbed 5.8 percent in 2018 compared with 1.5 percent for national brands and 2.1 percent for the overall consumer-packaged goods segment.  Unit sales rose 3.8 percent for private label in 2017-2018 while national brands fell 0.2 percent.  The total consumer packaged goods sector gained 0.5 percent year-over-year according to the IRI study.

 

Within the consumer packaged segment, groceries increased 1.2 percent in sales value but declined 1.7 percent in unit volume.  National brands within this sub-segment were higher by 1.5 percent in value but declined 0.8 percent in unit volume.

 

Club retailers posted increases of 5.9 percent in dollars per customer, 2.5 percent in spending per visit and 3.3 percent in trips per buyer.

 

Within the grocery product category, frozen foods posted a 7.2 percent increase in dollar sales and 6.3 percent in unit volume followed by refrigerated food (7.1 percent in value and 4 percent in volume.)  IRI noted that shelf-stable egg substitutes were the fastest growing private label product in sales value.

 

In surveys of consumers, IRI determined that 83 percent of consumers purchased private-brand products to save money and 68 percent of shoppers view private label items as superior in value to national brands.  The survey also showed that 76 percent of consumers view private brands as acceptable in quality as national brands.  This is especially true of Millennials who consider both value and price.  Approximately 70 percent of consumers indicated that they plan to purchase  more private label products over the coming six months with a higher proportion among Millennials.


 

Alltech Opens Trace Mineral Plant in India

11/20/2018

Alltech has commissioned a modern trace mineral manufacturing plant in Pune, India.  The facility has a production capacity of 25,000 tons of bioplexed minerals annually representing the largest output of any plant in Asia.


 

Tiger Brands Funds RSA Center for Food Safety

11/20/2018

In an attempt to restore company image following the devastating Listeria outbreak in South Africa, Tiger Brands has partnered with Stellenbosch University to establish the first Center for Food Safety in the Nation.  The consortium funded by an initial grant of $720,000 will apply the experience in technology of scientist affiliated to the university to basic and applied food science research.

 

The 2017-2018 Listeria outbreak involved 1,060 laboratory-confirmed cases with 216 fatalities.

The source of infection was an Enterprise Foods plant owned by Tiger Brands producing a low-cost meat product (“polony”) consumed extensively in the Nation especially by lower-income demographics.

 

Despite a national recall and closure of the plant, it is apparent that some product is still available from unregulated informal food outlets and roadside stalls presenting a risk of additional cases which in all probability may not be diagnosed.

 

Professor Pieter Gouws, acting director for the Center for Food Safety noted, “We aim to provide stakeholders with the opportunity to develop and exchange knowledge, experience, and expertise in food safety, food defense and food processing.”  He added, “We have a mandate to work across all faculties and disciplines within Stellenbosch University and other entities, institutes, national and international higher education institutions, and public and private enterprises in South Africa and abroad.”

 

Tiger Brands hope that other stakeholders including the national government and retailers will participate in supporting the Center.


 

Food Service Distribution Companies Face Lower Margins

11/20/2018

Inflation, especially due to transport costs and lower availability of labor is reducing profits of the major food service distribution companies. Operating and net margins are in the low single digits reflected in lower returns on both assets and equity. Three of the four public traded food service companies are trading at the low end of their 12-month range with the largest, Sysco slightly above the midpoint.

The CFO of Sysco noted, "We are having to struggle to get as many people where we need them, when we need them." The CEO of Sysco reporting on Q1 FY 2019 results stated, "We continue to see significant cost challenges. All of the food distribution companies followed Sysco down after the November 5 th release of results for their most recent quarter. Sysco fell 9.4 percent, US Foods Holding Company by 4.2 percent, Performance Food Group by 2.9 percent and Spartan Nash by 0.6 percent.

Financial values for the four food service distributors are shown in the table below:

  12 Month 12 Month

Trading Return % Margins % Share Price

  12 month
Trading Return %
Margins 12 month
Share Price

Company

Symbol

 

M.Cap

Q Sales

Op Profit

Net Profit

Assets

Equity

Operating

Net

Low

High

Nov 14

Open

Sysco

(SYY)

2019 Q1

$34.38B

$15.2B

$628M

$431M

8.5

59.8

4.3

2.5

$56.02

$75.98

$67.02

US Foods

(USFD)

2018 Q3

$6.9B

$6.2B

$179M

$114M

4.5

19.3

2.8

2.3

$26.38

$40.92

$31.98

Performance

(PFGC)

2018 Q3

$3.43B

$4.5B

$843M

$28M

4.0

19.3

1.4

1.1

$28.05

39.45

$32.61

Spartan Nash

(SPTN)

2018 Q3

$626M

$1.9B

$27M

$18M

3.5

11.4

1.4

1.0

$16.10

20.72

$17.51


 

Perpetrator of Strawberry Adulteration in Australia Indicted

11/20/2018

On September 27th EGG-NEWS reported on malicious adulteration of strawberries in Australia involving insertion of sewing needles into fruit.

 

Authorities in Queensland recently arrested My Ut Trinh who previously worked as a supervisor at a strawberry farm.  She was charged with seven counts of contaminating food items and faces 10 years in prison.

 

Of the 200 reports of contamination received by state police, 15 cases were hoaxes.  The Queensland Strawberry Growers Association was seriously impacted by the event, exacerbated by extensive reports in social media.  Three brands were affected resulting in recalls and financial hardship for growers.

 

The Federal government of Australia has assigned $750,000 to various projects to enhance food safety and to initiate fast-track recalls and to reestablish strawberry consumption.


 

Walmart Reports on Q3 of FY 2019

11/16/2018

In a press release dated November 15th Walmart Inc. (WMT) announced results for the 3rd Quarter of Fiscal 2019 ending October 31st 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)

3rd Quarter Ending October 31st.

2018

2017

Difference (%)

Sales:

$124,894,000

$123,179,000

+1.4

Gross profit:

$30,973,712

$30,794,750

+5.8

Operating income:

$4,986,000

$4,764,000

+4.7

Net Income

$1,710,000

$1,749,000

-2.2

Diluted earnings per share:

$1.08

$1.00

+8.0

Gross Margin (%)

24.8

25.0

-0.8

Operating Margin (%)

4.0

3.9

+2.6

Profit Margin (%)

1.4

1.4

nil

Long-term Debt: January 31st

$30,035,000

$36,015,000

-16.5

12 Months Trailing:

     

Return on Assets (%)

6.7

   

Return on Equity (%)

7.6

   

Operating Margin (%)

4.3

   

Profit Margin (%)

1.0

   

Total Assets

$226,583,000

$209,414,000

+0.2

Market Capitalization

$291,000,000

   

52-Week Range in Share Price: $81.78 to $109.98

Market Close: Wednesday 14th November $101.55. Post-release 11H00 Thursday 15th November $99.29

Forward P/E: 21.2 Beta +0 5

Segment performance for Q3 comprised:-

Walmart USA: Operating profit of $3.94 billion on sales of $80.58 billion with 3.4 percent comp.

Walmart Int: Operating profit of $1.18 billion on sales of $28.79 billion with a range of 2.2% comp. for China to 5.3% Mexico

Sam's Club: Operating profit of $0.38 billion on sales of $14.52 billion with 3.2 percent comp.

E-commerce increased 43 percent for Walmart.

In commenting on results Doug McMillon, president and CEO stated "We're pleased with the overall results we posted for the third quarter. We continue to see strong comp. store sales. Our results reflect not only value our customers are finding in our offer, and a lot of hard work from the team, but certainly some macro tailwinds as well, especially in the U.S." He added "each of our segments achieved solid sales growth. Excluding fuel, comp, sales at Walmart U.S. increased 3.4 percent against last year's most difficult comparison, and Walmart U.S. E-Commerce grew sales 43 percent. Sam's Club grew comps 5.7 percent, excluding fuel and tobacco. Outside of the U.S., comp. sales were positive in all our major markets, led by Mexico's 6.3 percent gain. We were also pleased to officially welcome Flipkart to the Walmart family when we closed that acquisition on August 18. Overall, we're encouraged by the momentum in our business and excited to be in a strong position to invest for the future"

WMT raised EPS guidance for FY 2019 to a range of $2.26 to $2.36 and projected same-store sales to increase by 3.0 percent


 

Ahold-Delhaize Reports on Q3 FY 2018

11/15/2018

Ahold-Delhaize, Dutch-based parent of Food Lion, Stop& Shop and Peapod among other banners, reported sales of $17.9 billion for the third quarter of 2018. This was a 3.6 percent increase over the corresponding period in FY 2017. The Company posted net income of $519 million up 27 percent from Q3, 2017.

 

For U.S. operations the company achieved growth in same-store sales of 3 percent.


 

Organic Acids Suppress ASF Virus in Feed

11/15/2018

According to Dr. Tom Burkgren, Executive Director of the American Association of Swine Veterinarians, quoted in the November 15th edition of the Journal of the American Veterinary Medical Association, organic acids are efficient at suppressing African Swine Fever (ASF) and many other viruses in feed. Concern is raised over ASF which can survive in feed ingredients for up to 30 days suggesting that imported animal-protein ingredients could introduce infection. It is suspected that the extensive porcine epidemic diarrhea outbreak was introduced to North America in 2014 on contaminated feed bags.

The suggestion by Dr. Burkgren that imported additives including vitamins and amino acids from China may introduce a disease is highly speculative, is not supported by assays and is unlikely. Animal byproducts, however, could serve as a suitable vehicle of infection. Organic acids available commercially as Termin-8® and SalCurb® are approved feed additives and are

effective against non-spore forming bacteria and a wide range of viruses.


 

Connecticut to Install Third Digester for Biofuel

11/15/2018

AG-Grind Energy will install a digester with a capacity of 850,000 gallons to convert food waste and animal manure into biofuel to be converted to electricity with an output of 450 kW. The installation will be funded in part by a grant from the Natural Resource Conservation Service and an investment tax credit partner.

The project will be erected at a cost of $5 million and will sell electricity to farms and municipalities. Two other digesters operate in Connecticut, located in Southington and East Canaan respectively.

As with many projects to convert waste to biofuel, obtaining a satisfactory volume of substrate is critical to maintain throughput. The project will cooperate with Blue East Compost in Hartford to collect food waste. U.S. Senator Richard Blumenthal attended the ceremony announcing the project and he has inserted a provision for recycling food waste in the 2018 Farm Bill.


 

Novogen Celebrates 10th-Year Anniversary

11/15/2018

Novogen, part of Groupe Grimaud located in France, celebrates their 10th anniversary since founding by Mickael LeHelloco and Thierry Burlot, respectively, Managing Director and Director of Research and Development of the company.

LeHelloco commented “Our genetic program was the first to take an interest in societal expectations with regard to animal welfare.” Burlot stated “We didn’t only pick these criteria as a large number of our products are perfectly suitable for traditional farms, but a new research approach allowed us to be ahead of the game with regard to unexplored criteria including social behavior, laying time, time spent nesting and shell quality.”

Novogen products are distributed in 50 nations worldwide.

Novogen relies on the strength of the R & D and genetics programs of parent company Groupe Grimaud. Their platform includes genomics, the application of RFID chips and other innovative technologies.

Novogen is developing expertise in production management to assist customers in recognition that although a product is important, providing technical services is an important part of establishing a brand.


 

Seaboard Foods Settles with DHS

11/15/2018

Seaboard Foods has announced settlement of a long-standing claim by the U.S. Department of Homeland Security Immigration and Customs Enforcement Agency (ICE) over alleged errors in I-9 documentation. The company agreed to pay $1 million, but denies wrongdoing. The alleged discrepancies occurred between 2007 and 2012 and no criminal charges were filed.

In a statement issued by Seaboard, the company denied each and every allegation and explicitly emphasizes that the settlement is not an admission of liability. Darwin Sand, President and CEO of Seaboard Foods stated that he was pleased to have the matter resolved. He commented “Our company demands adherence to all laws, rules and regulations everywhere we operate and we take our compliance obligations seriously.” He added “in the settlement agreement, ICE and the State of Oklahoma employed company-wide compliance efforts both prior to and subsequent to the investigation.”

In many cases, regulations during the 2005 through 2010 period were vague and inadvertent non-compliance was common as evidenced by similar “no-wrongdoing” settlements by egg and broiler producers. These long-standing demands by ICE are thinly disguised shakedowns since the cost of defending civil actions and the need to divert executive time invariably justifies a settlement. On the basis of “you can’t fight City Hall”


 

Walmart Beats Amazon in Grocery E-Commerce Survey

11/13/2018

Matthew Boyle of Bloomberg recently reported on the survey conducted by Retail Feedback Group dealing with service provided by online retail groceries.  Walmart scored on the Click-and-Collect service deployed in 2,000 stores with an additional 1,000 to be added by the end of 2019.  Walmart also makes use of DoorDash and Deliv for home delivery against payment of a fee. 

 

Amazon offers grocery delivery from Whole Foods Market stores for Prime customers in 60 cities and has recently introduced in-store pickup.

 

Predictably the survey determined that perishable products including meat, seafood and produce are purchased preferentially in-store as consumers believe this ensures freshness


 

USPOULTRY Allocates $385,000 in Research Grants

11/13/2018

USPOULTRY Foundation has approved $385,000 for five research grants through the Comprehensive Research Program.

The projects as selected comprise:

  • Improving Cage Free Air Quality, Hen Welfare and Egg Quality with Artificial Turf and A Manure Removal System - Purdue University (made possible by a gift from Midwest Poultry Services)

  • Examining the Roles of Macrophages and Vascular Inflammation in Broiler White Striping University of California - Davis (with a grant from Simmons Foods)

  • Identifying the Contribution of Broiler Genetics on Gut Health and Immune Response When Challenged with Salmonella Typhimurium - University of Maryland (with a grant from Ingram Farms)

  • Investigating the Impact of Anthelmintic Resistance in Nematode Parasites of Poultry -University of Georgia (with a gift from Wayne Farms LLC)

  • Response of Broilers Fed Phytase Enzymes of Different Optimal pH Ranges Alone or in Combination - Mississippi State University (with a grant from Peco Foods)

In commenting on the awards, Tom Hensley of Fieldale Farms noted, "Research continues to be an important component of USPOULTRY and the Foundation as a service to the industry." He paid tribute to the Research Advisory Committee for its efforts in evaluating proposals and providing recommendations for funding.


 

Phibro Animal Health Reports Q1 Results

11/13/2018

On November 6, Phibro Animal Health reported results for the first quarter of Fiscal 2019 ending September 30th 2018.  The company posted net income of $16.3 million on sales of $200.2 million.  Net income and sales were both three percent higher than the corresponding first quarter of Fiscal 2018. 

 

In commenting on results, Jack Bendheim Chairman, president and CEO stated, “Our animal health business reported another positive quarter despite turbulence in currencies, economic conditions in certain countries and continued weakness in the dairy fundamentals.”  He added, “We are investing P & L expense dollars to develop future growth opportunities.  The spending is focused on expanding our portfolio of nutritional specialty and vaccine products and developing an entry into the companion animals segment.”


Jack Bendheim

 

Hendrix-Genetics Receives Grant for Africa Project

11/13/2018

The Bill and Melinda Gates Foundation has awarded a multi-year grant to Hendrix-Genetics to establish a breeding program to develop strains suitable for rural Africa supplying smallholder farmers.

 

The project entitled Sustainable Access to Poultry Parent Stock to Africa will provide improved dual-purpose breeds intended to perform under difficult conditions on the Continent.

Louis Berrault, General Manager of Sasso stated, “We are excited to use our extensive expertise in poultry breeding to benefit smallholder farmers in Africa.”  He added, “With the Foundation’s support we are committed to further build on a sustainable infrastructure to supply healthy parent stock across Africa.”

Randall Ennis, CEO of the World Poultry Foundation commented, “This project will give a huge boost in realizing how the Foundation’s mission of poultry as a solution for the hungry as it empowers farmers to build a better life with improved breeds to secure their income.”

 

Although improved genetics will be beneficial, restraints to achieving acceptable production at the smallholder level include adequate nutrition and disease.  A model which has proved successful in some nations involves distribution of started pullets to be housed under confinement in villages.  Distribution of day-old chicks without a support structure for vaccination and absent a supply of balanced feed is a worthless exercise.

 

In the context of urban demand in nations with an infrastructure of harbors, roads and domestic production of feed ingredients and a cold chain for distribution, using improved specialty breeds for eggs and broilers respectively, represents a greater benefit to the population based on superior performance especially in feed conversion.


 




















































































































































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