Egg Industry News

 

USDA Weekly Egg Price and Inventory Report, August 16th 2017.

Aug 18, 2017

    

Hen Numbers Increase by 0.4 Million; Prices Recede After a Modest Upward Move.

OVERVIEW

According to the USDA Egg Market News Reports posted on August 16th the Midwest wholesale prices for Extra Large and Large sizes were down 5 percent and 4 percent respectively from the previous week. The market will be influenced mainly by hen inventory on the supply side of the equation. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The August 11th USDA Egg Market News Report documented a USDA Combined Region value of $0.91 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and can be compared to a trailing peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.85 per dozen.

At the high end of the range, the price in the Southeast and South Central Regions, attained $0.94 per dozen. The current USDA Combined Price was approximately 65 cents per dozen below the corresponding three-year average. During the second Quarter of 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of shell eggs and breaking stock.

The number of producing hens this week was 0.4 million higher at 305.4 million consistent with retention of flocks into the second cycle and by pullets placed six months ago attaining production. The hen population is high level relative to current consumer and industrial demand. The total egg-flock comprises 312.6 million including hens in molt and small flocks, approximately 0.6 million more than last week.

Generic shell-egg stock fell by 1.0 percent compared to an increase of 0.2 percent for the previous week suggesting a balance between supply and demand albeit at a low price. Dried-egg inventory amounted to 27.9 million pounds (12,682 metric tons) as of July 31st 2017. The National stock of frozen egg products as reported on July 24th attained 41.7 million pounds (18,960 metric tons) on June 30th.

 

   
 

USDA Projections for 2017 and 2018 Egg Production

Aug 18, 2017

    

The USDA Economic Research Service issued an updated August 15th record of egg production in 2016, an update for 2017 and a forecast for 2017.

Values are compared to 2015 which was impacted by the Spring outbreak of HPAI in the upper-Midwest.

 

 

Parameter

2015 (actual)

2016 (actual)

2017 (forecast)

2018 (Projection) ’17-‘18

EGGS

 

 

 

 

Production (m. dozen)

     6,938*

7,435

7,568

    7,765             +1.3%

Consumption (eggs per capita)

         256*

          275

           276

       278             +0.7%

 

New York price (c/doz.)

         182*

            86

             87

         90              +3.5%

 

Source: Livestock, Dairy and Poultry Outlook – August 15th 2016

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

Subscribers to EGG-CITE are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices and

   
 

Twinpack EGGSCARGO® System introduces Protector to prevent transport damage”

Aug 18, 2017

    

 

 

  

Watch the Video at https://www.youtube.com/watch?v=43nmhCvTfH8&feature=youtu.be

   
 

Export of Shell Eggs and Products, January-June 2017.

Aug 18, 2017

    

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first half of 2017 with the corresponding period in 2016:-

 

U.S. EGG EXPORTS FOR JANUARY-JUNE 2017 COMPARED WITH THE CORRESPONDING MONTHS IN 2016

    PRODUCT

  Jan.-June 2016  

Jan.-June 2017

   Difference

Shell Eggs

 

 

 

Volume (m. dozen)

  58.1     

     55.7

 - 2.4      (-4.1%)

Value ($ million)

  59.0

     54.2

 - 4.8      (- 8.1%)

Unit Value ($/dozen)

    1.02

      0.97

  -0.05    (- 4.9%)       

Egg Products

 

 

 

Volume (metric tons)

  10,372

 21,658

 +11,286  (+108.8%)

Value ($ million)

     31.3

     55.6

    +24.3   (+77.6%)

Unit Value ($/metric ton)

   3,018

   2,564

    -454     (-15.0%)

Source USDA-FAS/USAPEEC

   
 

Dr. Paul Tillman Recognized with PSA Distinguished Poultry Industry Award

Aug 18, 2017

    

Dr. Paul Tillman received the 2017 Poultry Science Association Distinguished Poultry Industry Career Award sponsored by the U.S. Poultry and Egg Association.

John Starkey, President of USPOULTRY stated “We are pleased to honor industry leaders embodied by Dr. Tillman.

  

He is widely recognized for his many years of work and contribution to poultry nutrition within the industry.” Starkey added, “It is this kind of service and commitment that has helped make the poultry industry one of the most efficient and productive segments of modern animal agriculture.”

Dr. Tillman received his B.S. and M.S. degrees from the University of Georgia, and completed a Ph.D. in poultry nutrition in the laboratory of Dr. Park Waldroup, Novus Distinguished Professor at the University of Arkansas. He has held a number of technical service positions at Roche, Alpharma, Ridley Feed Ingredients and Ajinomoto Heartland.

Since his retirement, Tillman has operated a consulting poultry nutrition practice, Poultry Technical Nutrition Services, LLC. During his career, Dr. Tillman has authored 30 peer-reviewed articles and numerous abstracts and invited papers at national and international conferences.

   
 

Sodexo Adds Hard Cooked Peeled Eggs to Cage-Free Sourcing

Aug 18, 2017

    

Sodexo, a multinational food service company and an early advocate of cage-free sourcing, has committed to purchasing hard-cooked peeled eggs to the company program. Previously Sodexo announced that 70 percent of shell eggs and liquid would be obtained from cage-free flocks by spring 2018.

 

Jim Pazzanese, Vice President of Supply Management, stated “As a large food service provider, this is the right decision for us.” He added “these changes will have a positive impact on our organization, the environment and ultimately on our business.”

It is noted that Sodexo supplies universities and institutions and caters to a market which is less price-sensitive than distributors dealing with supermarket chains.

   
 

Camelina Modified to Express DHA

Aug 18, 2017

    

Genetically engineered Camelina sativa, an oilseed has been developed as a potential livestock ingredient. The cultivar will contain relatively higher levels of EPA and DHA compared to canola and will have a correspondingly lower Omega- 6 content.

Since the product will be GMO, incorporation in diets will be limited to cage-free and conventional eggs.

  

   
 

Hampton Creek Intends Launching Vegetarian Scrambled Egg Product

Aug 18, 2017

    

Hampton Creek has announced that its vegan egg substitute “Scramble” will debut “in coming months.” Hampton stated that mung bean will be incorporated into the formula to provide texture.

   
   
 

Mintel Examines Restraints to Expanding Organic Consumption

Aug 18, 2017

    

A recent Mintel report on attitudes towards organic products suggests development areas which must be addressed by producers and certifiers of organic products. Only one quarter (26 percent) of consumers trust organic food labels and only 13 percent consider that there is adequate regulation. Perceptions of healthfulness are relatively weak with 33 percent of respondents stating that they would purchase more organic foods if they were proven to be healthier or stayed fresher for a longer period.

  

Cost is an important deterrent to purchasing. Almost two-thirds of respondents stated that they would purchase more organic foods if they were less expensive and only 20 percent accept that organic foods are worth the extra cost. Skepticism of organic claims and costs are limiting increased purchases even among established consumers with 34 percent indicating that they are buying more organic foods this year compared to 2016.

It would appear that branding is an important motivator to purchase since only 14 percent of respondents accepted that an organic claim is more important than a specific brand.

In attempting to evaluate motivation to purchase organic food, Mintel determined that 28 percent agree that “they feel better about themselves when buying organic foods.” Among the committed purchasers, half consider organic foods are better for their health. It would be an interesting exercise to correlate disposable income, health status and age demographic with motivation to purchase organic food.

Benny Roberts, Senior Food and Drink Analyst at Mintel, stated “While consumers overall may be unaware of organics’ traits or the precise benefits of eating organically, the products do enjoy a positive reputation and generally appear to make consumers feel good about their purchase, even if it comes at a higher cost.” He added “While consumers pay attention to brand names, in their eyes, there is little difference between national brand and store-brand organic options. As such, a considerable price difference could compel consumers to turn away from national brands in favor of a comparable option with an organic claim.”

The Mintel Report Natural/Organic Food Shopper U.S. 2017 is available for purchase from Mintel.

   
 

Sysco Reports on Q4 and FY 2017

Aug 18, 2017

    

In a press release dated August 14th Sysco Corporation (SYY) announced results for the 4th Quarter and Fiscal 2017 ending July 1st 2017.

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)

  

   
 

Sprouts Farmers Market Searching for Suitor

Aug 18, 2017

    

According to Supermarket News, Sprouts Farmers Market is an acquisition target based on decisions by the Board to seek an alliance with a larger company. The decision was made prior to the recent announcement of the acquisition of Whole Foods Market by Amazon. Potential purchasers include the Kroger Company which owns Lucky’s Market, currently a competitor of Sprouts, in addition to their Main & Vine concept, which was intended to compete directly with Whole Foods Market.

  

Alternative suitors include Target Corporation and Albertson’s Safeway, since the fresh image would benefit both large chains. Analysts including Chuck Cerankosky cited in a Supermarket News article opined that a merger between FreshThyme Farmers Market and Sprouts would be mutually beneficial and represent a good fit. FreshThyme is supported by Meijer Inc. and would provide both volume and image to the regional operator of Midwest Supercenters.

Fort the most recent 2nd Quarter ending July 2nd 2017 the Company posted a net profit of $41.0 million ($37.2 in Q2 FY 2016) on sales of $1.184 B ($1.032B) with an EPS of $0.29 ($0.25)

Same store sales guidance for FY 2017 is projected to be 1.5 to 2.0 percent.

   
 

Chick Fil-A® Debuts Breakfast Bowls

Aug 18, 2017

    

Chick-Fil-A® has initiated a national launched of the Hash Brown Scramble, the first of a series of breakfast bowls. This menu item comprises scrambled eggs, tot-style hash browns, a blend of Monterrey- jack and cheddar cheese and either chicken nuggets or sausage.

Amanda Norris, Senior Director of Menu Development said “At Chick-Fil-A®, we understand the importance of breakfast and want to provide a wider range of options to our guests who are looking for a fast and delicious breakfast.”

  

She added “we have definitely seen an increase in popularity for breakfast bowls and the Hash Brown Scramble combines two favorites, our chicken nuggets and hash browns.” The Hash Brown Scramble bowl has 450 calories and 30 grams of protein and will be offered at $3.49.

   
 

Profit at Dean Foods Down by 50 Percent

Aug 18, 2017

    

In a release by Dean Foods Company dated August 8th, net income for the second quarter of fiscal 2017 attained $17.6 million compared to $33.4 million in the corresponding second quarter of FY 2016.  Net sales were virtually constant at $1.93 billion.  EPS declined from $0.36 for the second quarter of 2016 to 0.19 for the most recent quarter. 

  

Dean Foods was impacted by lower demand for milk due to consumer rejection of cereal and competition from milk substitutes.  The company representing the Nation’s largest dairy supplier has also encountered pressure from major store chains to reduce the price of milk marketed under store brands.  Wal-Mart stores has announced that it will open a milk processing plant in the U.S. to reduce reliance on a single large supplier.

The woes of Dean Foods as reflected in a 20 percent drop in the price of their shares following the second quarter release may have a message for egg producers. Companies heavily committed to Wal-Mart Stores are vulnerable to pressure from their major customer.  House brands are inexorably edging national brands. The 2015 HPAI outbreak demonstrated that the food and bakery industries were able to find substitutes for liquid egg following unprecedented escalation in price.  The egg industry has yet to reclaim all of the lost markets or to develop innovative applications for yolk, white and whole egg either in the domestic or export sectors.

   
 

Egg Nutrition Center Posts “Heart-Check Certified” Recipes

Aug 18, 2017


    

The American Heart Association® has certified a range of recipes using eggs. Dr. Tia Rains, Executive Director of the Egg Nutrition Center commented, “This is exciting because the American Heart Association now allow recipes with whole eggs, providing the opportunity to be certified as “heart-healthy.”

The certified recipes conform to limits on calories, saturated fat, trans-fat, sodium and added sugar as mandated by dietary recommendations issued by the Association.

  

Recipes include spicy siracha baked avocado eggs, stuffed quinoa peppers with eggs, zucchini noodles with poached egg topper and Mexican rice and bean with baked eggs.

Recipes can be downloaded from the Egg Nutrition Center website enc@eggnutritioncenter.org

   
 

CDC Awards Grants to Enhance Food Safety

Aug 18, 2017

    

The Centers for Disease Control and Prevention (CDC) is awarding $32 million to states and cities to improve detection, investigation and reporting of food-borne disease outbreaks.

Funding for the grants is derived from the CDC Epidemiology and Laboratory Capacity for Infectious Diseases Cooperative Agreement.

  

Specific funding will included:

  • Expanding the OutbreakNet sites to allow for 44 centers
  • Assigning $10 million for surveillance of antimicrobial resistance through the National Antimicrobial Resistance Monitoring System.  This component will increase the number of whole-genome sequencing procedures
  • $6 million will be assigned to train state and local public health workers to detect and respond to outbreak of food-borne infection including application of PulseNet.  The designated Integrated Food Safety Centers of Excellence will receive funding to train epidemiologists, application of whole-genome sequencing and investigations of outbreaks.

Food-borne infections whether from produce, dairy, poultry or eggs will come under increased scrutiny. By applying whole genome sequencing, it will be possible for CDC to identify the source of infection in outbreaks.

   
 

Herbruck’s Poultry Ranch for Franklin County, PA. to Proceed

Aug 18, 2017

    

According to the August 9th edition of Public Opinion, a local newspaper, the Montgomery Township Board of Supervisors has approved the Herbruck’s development plan subject to a highway occupancy permit. The Company is in the process of submitting a fourth plan to Pennsylvania Department of Transportation.  A route for wide trucks has yet to be identified which will facilitate transport of feed and eggs.

  

The proposed project will comprise eight poultry houses with a total capacity of 2.4 million hens which would represent approximately 10 percent of the current total output of the State.

The project will generate 190 jobs and will involve $100 million in direct investment.

 

 

   
 

Fipronil Contamination of Eggs in South Korea

Aug 18, 2017

    

Following the concern over Fipronil contamination of eggs in 17 nations in the E.U., it is evident that regulatory authorities worldwide are now assaying for the insecticide in eggs and poultry meat. A news report dated August 15th reproduced on FoodMarket.com documented an emerging crisis in South Korea.

The Ministry of Agriculture, Food and Rural Affairs found that a farm located in Gyeonggi Province with approximately 30,000 hens delivered eggs with detectible Fipronil. The farm owner apparently used the insecticide presumably to control mites. A second farm in the same province used Bifenthrin, a commonly used pyrethroid insecticide to control ants and flies.

  

The Ministry has initiated a crash program to assay eggs from large farms and has commenced an inspection of all units. Based on consumer concerns, all the major retailers have ceased selling eggs. The largest food retailers include E-Mart, Home Plus, Lotte Mart and Hanaro Mart in addition to convenience stores including 7-Eleven have pulled eggs from shelves. It is absolutely unprecedented for all stores to simultaneously cease selling eggs even if only for a week during which assays can be performed.

The Ministry of Food and Drug Safety has initiated a program of trace back and will recall eggs associated with the index farm and any others that may have misused insecticides.

The Korean Poultry Association will institute a program of education to update farmers on the correct use of insecticides with specific concentration on following label instructions.

   
 

SE from Small Farm in Michigan

Aug 18, 2017

    

According to press reports, a limited of outbreak of Salmonella Enteritidis has occurred in the upper peninsula of Michigan involving eight contiguous counties. The Sault News of Sault, Ste. Marie, MI reports that the source was the LaBar Poultry Farm located in Manistique. The unit has approximately 2,500 hens and presumably is not subject to the requirements of the FDA Salmonella Prevention Rule.

  

The outbreak was traced back to the farm following investigation of a cluster of cases in the area. The vehicle of infection in one case comprised uncooked, unpasteurized raw eggs used to prepare Hollandaise sauce for eggs Benedict. Trace- back disclosed environmental contamination with SE in the environment of the LaBar farm operated by Jeff and Heidi LaBar. This is reminiscent of the Boston “Talk of the Town” case which initiated concern over SE emanating from the DeCoster complex in Turner, ME. during the 1980s.

 The LeBar operation came to the attention of EGG-CITE in 2014 when Jeff won a $3 million Michigan lottery. Despite his windfall, LaBar has continued producing eggs, possibly until his winnings are all used up. LaBar has a checkered past, having been convicted of drug dealing for which he served seven years of a 10 to 20 year sentence before adopting religion as his life guide. Up until the time of his lottery win, he was faced with financial problems including the imminence of foreclosure. Operating a single barn with outside access for flocks, LaBar stated “I’ve always liked chickens, and I would like to do that for a living, but up here we’re so far from any population that would buy the needed amount to sustain or to make a living, so it has never really panned out.”

Next time Jeff was in the house and remembered to look, he glanced at his lottery slip

   
 

YUM! Brands Reports on Q2 of FY 2017

Aug 18, 2017

    

In a press release dated August 3rd Yum! Brands (YUM) announced results for the 2nd Quarter of Fiscal 2017 ending June 30th 2017.

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)

  

   
 

PMI Bulldog Egg Carton Separator for Six-Pack Cartons

Aug 17, 2017

    

PMI Machine and Supply Company of Lakeland, FL have developed and refined the Bulldog Carton Separator to split a conventional fiber or PVC carton into two six-egg packs.

Designed by Michael Greeson in response to requests by supermarkets and packing plants, the Bulldog replaces knives, scissors, hotwires and other makeshift methods of dividing cartons.

The Bulldog receives cartons traversing a conveyor belt. The rapidly rotating blade slices through the point of separation producing two clean-edged six-pack cartons without damaging the contents. Cartons exit the separator cleanly without adherent foam particles, fiber dust or deposits.

The Bulldog Separator is recommended by Dolco Packaging since it is compatible with deep-V cartons.

  

Features of the Bulldog Separator include:

  • Stainless steel construction
  • Compatibility with Diamond-Moba or Staalkat packers
  • Early modes in operation since 1994
  • Can separate either open or closed cartons

The clip demonstrates operation of the Bulldog Carton Separator with both input and exit views.

The installation is available from PMI Machine and Supply Inc. at a cost of $1,875 per unit plus shipping and handling. Discounts offered for the purchase of more than one machine.

For further information contact Michael L. Greeson:  pmimachine@verizon.net or at (863) 944-4201

View the video of the Bulldog Carton Seperator in Action at http://egg-cite.com/specialedition/pmi.wmv

   
 

CME Prices

Aug 16, 2017

    

According to the August 10th WASDE release, 83.5 million acres of corn will be harvested to yield 14.15 billion bushels. The soybean crop is projected to attain 4.38 billion bushels from 88.7 million acres harvested.

 

On Friday August 11th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded, together with the bracketed value for the previous week.

COMMODITY

 

Corn (cents per bushel)

Sept. ’17   361     (367)     

Dec. ’17     375      (381)  

Soybeans (cents per bushel)

Aug.  ’17   935     (949)    

Nov. ’17    945      (957)  

Soybean meal ($per ton)

Aug.  ‘17   299     (304)

Dec.  ’17    305      (310) 

 

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

  • Corn:                     Sept. quotation down by 6 cents.                    (-1.6 percent)
  • Soybeans:            Aug. quotation down by 48 cents                    (-1.5 percent)
  • Soybean Meal:    Aug. quotation down by $5/ton                    (-1.6 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

See posting on the August 11th edition of CHICK-CITE (enter WASD in SEARCH block) summarizing the August 10th USDA-WASDE Report #568, for a review of price projections and quantities of commodities to be produced during the 2017-18 season.

   
 

Status of 2017 Corn and Soybean Crops

Aug 16, 2017

    

The USDA Crop Progress Report released Monday August 14th  recorded progress in corn and soybean development relatively consistent with 2016 indicated in the tables below:-

 

                                                                            WEEK ENDING

Crop

August 6th

August 13th

5-Year Average

Corn Silking

Corn Dough

           93

           42

           97

           61

            98

            62

Corn Dent

             7

           16

            20

Soybeans Blooming

           90

           94

            93

Soybeans Setting Pods

           65                         

           79

            75

                  

Crop

V. Poor

Poor

Fair

Good

Excellent

Corn Condition

     3         

   9

 26

  49

     13

Soybean Condition

     3

   9

 29

  49

     10

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

    15

   25

53

 7

                              Past Year

    10

22

59

 9

Subsoil moisture:  Past Week

    14

   26

55

 5

                              Past Year

8

23

63

 6

 

   
 

How will Amazon Improve Whole Foods Profitability?

Aug 16, 2017

    

Analysts are evaluating possible changes in the structure and operations of Whole Foods Market following the acquisition by Amazon.  At the outset it is this Commentator’s opinion that nothing much will be done unless the current Board and top level of management is replaced. 

Some attempts were made by John Mackey to reduce operating costs and to introduce more efficiency but these efforts did not move the needle and made an acquisition inevitable given shareholder disaffection.

  

As reported by Mark Hamstra in the August 8th edition of Supermarket News, Amazon will have to concentrate on the supply chain.  Since Whole Foods Market created the image of “healthful, fresh and local”, the supply chain to support the company image was expensive, especially with regard to small-farm organic produce.  It is essential for Amazon to reduce the “whole paycheck” image of WFM. This will require restrictions on sourcing of products. 

This is especially important given that Walmart, Aldi, emerging Lidl and even mainstream supermarkets have managed to improve freshness and quality of their produce but have restrained price.  These companies have sharpened their pencils when dealing with suppliers and have introduced private labels where possible to reduce prices into the basket

The obvious challenge facing Amazon will be to improve the profitability of Whole Foods Market but at the same time preserve the image and prevent disaffection by loyal customers – a trend which was evident before the announcement of the acquisition.

   
 

AEB to Partner with Laurie Hernandez for Back-to-School Promotion

Aug 16, 2017

    

The American Egg Board has announced that it will engage the promotional services of Laurie Hernandez a gymnastic gold medalist to launch a national search for “incredible kids”.  The campaign will highlight high-quality protein including eggs to allow students to achieve their optimal potential.

Parents will be able to submit a photo or video of their child together with a caption explaining the exceptionality.

  

During the contest a winner will be selected each week for a monetary grant and back-to-school themed prize. Laurie Hernandez will visit the school of the grand prize winner.

Hernandez noted, “I am very excited to partner with the American Egg Board to search for incredible kids across the country who are doing amazing things for the lives of others.”  She added “I know first-hand how important it is to recognize children for their accomplishments and look forward to seeing the inspiring stories about remarkable kids submitted to the You’re Incredible BecauseContest.

 

   
 

USDA Weekly Egg Price and Inventory Report, August 9th 2017.

Aug 11, 2017

    

Hen Numbers Increase by 0.4 Million; Prices Stable Following a Modest Upward Trajectory.

OVERVIEW

Acording to the USDA Egg Market News Reports posted on August 9th the Midwest wholesale prices for Extra Large and Large sizes were unchanged from the previous week. The market will be influenced mainly by hen inventory on the supply side of the equation. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The August 4th USDA Egg Market News Report documented a USDA Combined Region value of $0.91 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and can be compared to a trailing peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.85 per dozen. At the high end of the range, the price in the Southeast and South Central Regions, attained $0.94 per dozen.

The current USDA Combined Price was approximately 65 cents per dozen below the corresponding three-year average. During the second Quarter of 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of shell eggs and breaking stock.

The number of producing hens this week was 0.4 million higher at 305.0 million consistent with retention of flocks into the second cycle and by pullets placed 6 months ago attaining production. The hen population is high level relative to current demand. The total egg-flock comprises 312.0 million including hens in molt and small flocks, approximately 0.4 million more than last week.

Generic shell-egg stock rose by 0.2 percent compared to an increase of 2.9 percent for the previous week suggesting a balance between supply and demand albeit at a low price. Dried-egg inventory amounted to 27.6 million pounds (12,545 metric tons) as of June 30th 2017. This is extremely high, as is the National stock of frozen egg products reported on July 24th confirming a stock of 41.7 million pounds (18,960 metric tons) on June 30th

INVENTORY

 Cold storage stocks in selected regions on August 1st 2017 amounted to 3.320 million pounds (1,509 metric tons), 4.5 percent above the stock of 3.176 million pounds during the week of July 1st. 2017.

The latest monthly USDA Cold Storage Report released on July 24th documented a total stock of 41,712 million pounds (18,960 metric tons) of frozen egg products on June 30th 2017. This value was up 9.9 percent from June 30th 2016. Approximately 85 percent of inventory comprised the categories of “Whole and Mixed” (33.6 percent) and “Unclassified” (51.6 percent).

The national stock of generic shell eggs on August 7th was up by 0.2 percent, compared to a 2.9 percent increase in inventory during the previous week. Three regions showed increases in stock levels. The Midwest Region was up 2.0 percent compared to the previous week to 368,600 cases. This region was followed in decreasing order of stock level by the South Central Region with no change at 261,700 cases; the Southeast Region down by 0.4 percent to 246,900 cases; the Southwest Region down by 7.6 percent to 182,500 cases, the Northeast Region up by 0.7 percent to 126,300 and the Northwest Region up by 12.8 percent to 96,500 cases representing a 22.9 percent swing in a week.

The total USDA Six-Area stock of commodity eggs comprised 1,595,500 cases, of which 80.4 percent were shell eggs. The inventory of breaking stock was up 1.1 percent to 312,600 cases. The price of breaking stock this week reflects the availability of eggs from both mature and young flocks in relation to the demand for generic eggs.

Specialty egg inventory was up by 2.5 percent compared to a fall of 1.4 percent for the previous week to 179,300 cases with organic stock comprising 38.7 (was 43.8) percent of inventory. Recent data suggests a fluctuating build in the stock of USDA Certified Organic product. This is attributed to an apparent trend by consumers to purchase less-expensive brown cage-free product over organic eggs when there is a differential in price over $1.00 per dozen During the past week the USDA benchmark retail price of cage-free brown fell by 6.6 percent, or 18 cents per dozen to $2.56 per dozen while USDA Certified Organic rose by 14.1 percent or 51 cents per dozen to $4.11 per dozen, widening the price differential to $1.35 per dozen ($0.86 per dozen last week) suggesting larger purchases of the cage-free category in the coming week at the expense of  certified organic eggs.  Large week-to-week percentage fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.

   
 

JULY 2017 USDA EX-FARM BENCHMARK PRICE RISES: NEGATIVE MARGINS PERSIST.

Aug 11, 2017

    

 Introduction.

Summary tables for the latest USDA 2017 July statistics and prices made available by the EIC on August 10th 2017, are presented together with comparison values from the previous July 10th 2017 posting reflecting June 2017 data.

  

COSTS & REVENUE                                                                                         

Parameter

JULY 2017

JUNE 2017

5-Region Cost of Production ex farm (1st Cycle)

60.82 c/doz

59.89 c/doz

Low

56.00 c/doz (MW)

55.02 c/doz (MW)

High

76.21 c/doz (CA)

74.78 c/doz (CA)


Components of 6-Region 1stCycle Cost of Production:-

 

JULY 2017

JUNE 2017

Feed

32.81 c/doz

32.00 c/doz

Pullet depreciation

10.85 c/doz

10.75 c/doz

Labor

4.00 c/doz

 4.00 c/doz

Housing

5.30 c/doz

 5.30 c/doz

Miscellaneous and other

7.86 c/doz

 7.84 c/doz

Ex Farm Margin according to USDA values reflecting JULY 2017:-
51.0 cents per dozen1- 60.8 cents per dozen = -9.8 cents per dozen
(June comparison 39.5 1 cents per dozen – 59.9 cents per dozen = -20.4 cents per dozen.)
Note 1:  USDA Blended egg price

   
 

USDA- WASDE FORECAST #568, August 10th 2017

Aug 11, 2017

    

Overview

The August 10th 2017 USDA WASDE projections for the 2017 corn and soybean crops reflected planting data and estimates of yield based on crop progress. Harvest areas for corn and soybeans were unchanged from the July Report at 83.5 million acres (86.7 million in 2016) and 88.7 million acres (82.7 million in 2016) respectively.

The USDA lowered projected corn yield to169.5 bushels per acre from 170.7 bushels per acre (174.6 bushels in 2016). Soybean yield was raised to 49.4 bushels per acre from 48.0 bushels per acre (52.1 bushels in 2016). Ending stock for corn was lowered 2.2 percent from July and projected to be 2,273 million bushels (2,325 million in July WASDE Report). Ending stock for soybeans was adjusted up 3.3 percent to 475 million bushels (460 million in July 2017 WASDE Report).

  

Corn

The projection of the corn harvest was lowered from July attaining 14,153 million bushels, down 6.0 percent from 2016. None of the major categories of use were appreciably changed. The projected USDA range in farm price incorporated an 80 cents per bushel spread as is normal for a mid-year report with many uncertainties relating to weather until harvest. Price was unchanged from the July WASDE Report at 290 to 370 cents per bushel. At close on August 10th CME quotations for September and December 2017 corn were 360 cents and 373 cents per bushel respectively. September corn fell four percent after release of the August WASDE Report.

Soybeans

USDA projects a soybean harvest of 4,381 million bushels (was 4,260 million bushels in the July WASDE Report) due to an anticipated increase in yield to 49.4 bushels per acre. Use parameters were essentially unchanged from the July WASDE Report except that beginning stocks were decreased again by 40 million bushels to 370 million bushels and ending stocks were increased to 475 million bushels from 460 million bushels. USDA accordingly increased the August ex-farm price for soybeans for the 2017 harvest by 5 cents per bushel on the low end and decreased the projected price by 25 cents per bushel on the high end to a range of 845 cents to 1,015 cents per bushel. At close of trading on August 10th CME quotations for soybeans for July and September 2017 delivery were 1,023 cents and 1,031 cents per bushel respectively. September 2017 and January 2018 delivery were 938 cents per bushel and 954 cents per bushel respectively. Soybeans fell three percent after release of the August WASDE Report.

Projected output of soybean meal was adjusted downward to 46.1 million tons (was 46.3 million tons in the July WASDE Report). Estimated soybean meal prices were adjusted downwards by $5 per ton to $295 to $335 per ton. At close of trading on August 10th CME quotations for September and December 2017 soybean meal were $298 and $302 respectively.

   
 

Wendy’s Reports on Q2 of FY 2017

Aug 11, 2017

    

In a press release dated August 9th Wendy’s Corp (WEN) announced results for the 2nd Quarter of Fiscal 2017 ending July 2nd 2017.

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)

  

   
 

Passing of John Pedersen

Aug 11, 2017

John Pedersen

    

John Raymond Pedersen passed away on July 11th at the age of 83. He was born in Gibbon, NE. and attended the University of Nebraska – Lincoln graduating in 1956 with a BS in Agricultural Economics.  He subsequently earned a Master’s in Agricultural Economics from the University of Maryland while working for the USDA. 

He retired from the Department of Agriculture in 1969 and joined Ralston Purina and subsequently was associated with United Egg Producers from 1973 to 1976.  Since 1976 he operated Poultry and Egg Fax providing services in the area of economics to the U.S. poultry industry.

 

   
 

CME Prices

Aug 9, 2017

    

On Friday August 4th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded, together with the bracketed value for the previous week.

According to the July WASDE release, 90.9 million acres were planted to corn, three percent lower than the previous season with a predicted harvest of 14.3 billion bushels.

Farmers planted 88.7 acres to soybeans, up seven percent above 2016, with a crop of 4.3 billion bushels anticipated.

  

COMMODITY

 

Corn (cents per bushel)

Sept. ’17   367     (375)    

Dec. ’17     381      (387)  

Soybeans (cents per bushel)

Aug.  ’17   949     (997)    

Nov. ’17    957    (1,012)  

Soybean meal ($per ton)

Aug.  ‘17   304     (321)

Dec.  ’17    310      (336) 

 

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

  • Corn:                     Sept. quotation down by 8 cents.                    (-2.1 percent)
  • Soybeans:            Aug. quotation down by 48 cents                    (-4.8 percent)
  • Soybean Meal:    Aug. quotation down by $17/ton                    (-5.3 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

See posting on the July 14th edition of CHICK-CITE (enter WASD in SEARCH block) summarizing the July 12th USDA-WASDE Report #567, for a review of price projections and quantities of commodities produced during the 2016-17 season.

   
 

Egg Breaking in 2017

Aug 9, 2017

    

According to the USDA Egg Products Report released on July 28, 2017, a total of 1.16 billion dozen were broken in Federally-inspected plants. This was five percent higher than during the comparable period in 2016. 

For the period January through June inclusive, 1.50 billion pounds of edible product was produced, six percent higher than in the first half of 2016.  The relative portions of edible products comprise whole eggs, 61 percent; white, 26 percent and yolk,13 percent.

  

   
 

China Reports Avian Influenza in Inner Mongolia  

Aug 9, 2017

    

Authorities in the Inner Mongolia region of China have reported outbreaks of H5N1 strain avian influenza, resulting in the depopulation of as many as 100,000 chickens. 

According to the Minister of Agriculture, “the outbreak is under control”.  The affected farms are located near Tongliao a city of 3 million.

  

   
 

CNBC Highlights Relative Under- Consumption of Cage-Free Eggs

Aug 9, 2017

    

In a five minute segment on CNBC at 14H00 on August 1st, Reporter Jane Wells commented on the reluctance of consumers to pay the differential between prevailing low prices for eggs from caged and cage-free flocks.  Visiting Chino Valley Farms in California, suitably attired Wells in Tyvek noted relative over-production of cage-free eggs.

  

This situation follows the rapid expansion in aviary and slatted floor housing during late 2016 and early 2017 in response to the commitments by QSRs, supermarkets and food service companies to transition from conventional to cage-free.  Unfortunately, consumers were not involved in decisions made on their behalf by the HSUS and if they were, they were unaware of the cost differential. 

The over-supply results from members of the FMI, the NRA and the NCCR having been “snowed” or coerced by the HSUS and kindred organizations in the absence of meaningful and structured consumer research relating the principal product attribute with willingness to pay.

The clip may be viewed at https://www.agdaily.com/video/cage-free-egg-trend-creates-pricing-problem-ends/?utm_source=twitter&utm_medium=social&utm_campaign=general

   
 

Status of 2017 Corn and Soybean Crops

Aug 9, 2017

    

The USDA Crop Progress Report released Monday August 7th  recorded progress in corn and soybean development relatively consistent with 2016 but showing a slight trend in deterioration in quality as expressed in the tables below:-

 

                                                                            WEEK ENDING

Crop

July 30th

August 6th

5-Year Average

Corn Dent

Corn Dough

             -

           23

            7

           42

            11

            44

Corn Silking

           85

           93

            94

Soybeans Blooming

           82

           90

            88

Soybeans Setting Pods

           48           

           65

            62

 

                    

 

Crop

V. Poor

Poor

Fair

Good

Excellent

Corn Condition

     4         

   9

 27

  47

     13

Soybean Condition

     3

   9

 28

  50

     10

 

 

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

    16

   28

52

 4

                              Past Year

    10

23

60

 7

Subsoil moisture:  Past Week

    13

   28

55

 4

                              Past Year

8

23

64

 5

 
   
 

Hampton Creek Sued Over Label

Aug 9, 2017

    

Just Goods Inc. is suing* Hampton Creek over a trademark dispute according to a Bloomberg posting on August 2nd.  Jaden Smith, the principal of Just Goods Inc. claims that Hampton Creek agreed in 2014 to a specific depiction of the word “Just.” used on their “Just Mayo” label.

 

In May, Hampton Creek changed labeling emphasizing the word “Just” conflicting with the previous agreement which stipulated that Hampton Creek should adhere to a specific design with cursive letters and a small font. Just Goods uses an uppercase “JUST” in its logo.

The Bloomberg posting reiterated the numerous legal and financial problems experienced by Hampton Creek relating to apparent unethical repurchasing of product from store shelves to create the deception of consumer demand, uncomplimentary postings by disaffected employees on the Glassdoor website, and numerous defections among senior technical and management personnel.

*Just Goods Inc., v. Hampton Creek Inc. CGC-17-559876, California Superior Court, San Francisco.

   
 

Cargill Acquires Feed Mills From Southern States Cooperative

Aug 9, 2017

    

According to an August 4th release by Cargill, the company will acquire the animal feed business of Southern States Cooperative Inc. headquartered in Richmond, VA. Cargill has indicated that following completion of the transaction, it will integrate capabilities, and expand access to internal innovation including trading and risk management.

  

The transaction involves seven feed mills and a wide portfolio of products and brands in the Southeast, Mid-Atlantic and Northeast regions of the U.S.

Mark Lueking, Managing Director of Cargill Feed and Nutrition U.S. stated “We are committed to working together to continue to meet the needs of the local businesses and communities served by Southern States Cooperative. He added “We will honor the legacy of Southern States Cooperative and further build on reputation in the market, commit to quality and relationships with longstanding retail and customer networks.”

The retail farm supply, energy and agronomic components of Southern States Cooperative were not included in the purchase.

   
 

USDA DATA ON CAGE-FREE PRODUCTION

Aug 9, 2017

    

Based on the growing importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders.

EGG-CITE will summarize and comment on data and trends in this monthly Cage-Free Report, supplementing the information posted weekly in the Price and Inventory Report.

  

The report for the month of July 2017 released on August 8th 2017 noted that there was no increase in organic flocks and a 0.7 percent increase for cage-free flocks in July reflecting realities in the market.

Average flock production remained at a nominal 75.5 percent :-

   
 

Epidemiology of Human Infection with H7N9 Virus in China

Aug 9, 2017

    

Studies conducted by the Chinese Center for Disease Control and Prevention in collaboration with the U.S. Centers for Disease Control and Prevention in Atlanta, have identified aspects of the epidemiology of H7N9 infection among poultry and consumers in China*.

Five consecutive outbreaks of H7N9 virus were recorded in China since 2013. Approximately 1,300 cases of laboratory-confirmed H7N9 virus have been documented through March 2017.

  

Until the fifth wave which commenced in September 2016, strains of H7N9 were of low pathogenicity in poultry and remained essentially undetected without specific surveillance.

In February 2017, the National Health and Family Planning Commission of China reported on genetic sequences of viruses isolated from two patients with severe H7N9 infections. These viruses were characterized as highly pathogenic based on insertion of basic amino acids at the hemagglutinin cleavage site.

The obvious risk factor associated with H7N9 infection is contact with diseased poultry. This can occur either with backyard flocks or from small commercial operations or wet markets. The authors noted that H7N9 virus is circulating widely among poultry in China.

A previous report in EGG-CITE noted that authorities have decided to initiate a vaccination program against H7N9 to suppress clinical infection although this will not reduce the dissemination of a now highly pathogenic virus from infected flocks. Appropriate surveillance has been initiated.

The problem of infection in consumers will only be reduced with transition from a live-bird marketing system to processing in plants with certification of freedom from AI prior to shipment, ante-mortem inspection and sale of products in stores and supermarkets with a cold-chain.

*Zhou, L., Preliminary epidemiology of human infections with highly pathogenic avian influenza A (H7N9) virus, China, 2017 Emerging Infectious Disease 23:1355-1358 (2017)

   
 

Happy Egg Company Appoints President

Aug 9, 2017

    

Dan Arnsberger has been appointed President of the Happy Egg Company. Previously he served as a consultant to the U.K-owned company and formerly CEO of the Arena Group.

Arnsberger commented “I have been passionate about the Happy Egg Company since I began working with the brand a number of years ago.”  He added “The Happy Egg Company and free-range egg markets have experienced growth in recent years and I’m thrilled to take on this new role to participate in our future achievements.”

  

The Happy Egg Company claims to operate 600,000 laying hens on free-range with wide distribution of product in the U.S. The hens producing for Happy Egg Company under contract represent 1.7 percent of non-caged hens in the U.S.

   
 

USDA Weekly Egg Price and Inventory Report, August 2nd 2017.

Aug 4, 2017

    

Hen Numbers Increase by 0.4 Million; Prices Continue a Modest Upward Trajectory.

OVERVIEW

According to the USDA Egg Market News Reports posted on July 31st the Midwest wholesale prices for Extra Large and Large sizes increased by 4 percent from the previous week. The market will be influenced mainly by hen inventory on the supply side of the equation. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The July 31st USDA Egg Market News Report documented a USDA Combined Region value of $0.86 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and can be compared to a trailing peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.82 per dozen. At the high end of the range, the price in the Southeast and South Central Regions, attained $0.91 per dozen.

The current USDA Combined Price was approximately 71 cents per dozen below the corresponding three-year average. During the first Quarter of 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of shell eggs and breaking stock.

The number of producing hens this week was 0.4 million higher at 304.6 million consistent with retention of flocks into the second cycle and by pullets placed 6 months ago attaining production. The hen population is high level relative to current demand. The total egg-flock comprises 311.8 million including hens in molt and small flocks, approximately 0.4 million more than last week.

Generic shell-egg stock rose by 2.9 percent compared to an increase of 1.2 percent for the previous week confirming over-production relative to demand. Dried-egg inventory amounted to 27.6 million pounds (12,545 metric tons) as of June 30th 2017. This is extremely high, as is the National stock of frozen egg products reported on July 24th confirming a stock of 41.7 million pounds (18,960 metric tons) on June 30th

INVENTORY

Cold storage stocks in selected regions on July 24th 2017 amounted to 3.321 million pounds (1,510 metric tons), 4.6 percent above the stock of 3.176 million pounds during the week of July 1st. 2017.

The latest monthly USDA Cold Storage Report released on July 24th documented a total stock of 41,712 million pounds (18,960 metric tons) of frozen egg products on June 30th 2017. This value was up 9.9 percent from June 30th 2016. Approximately 85 percent of inventory comprised the categories of “Whole and Mixed” (33.6 percent) and “Unclassified” (51.6 percent).

The national stock of generic shell eggs on July 31st was up by 2.9 percent, compared to a 1.2 percent increase in inventory during the previous week. Four regions showed increases in stock levels. The Midwest Region was up3.9 percent compared to the previous week to 361,400 cases.

This region was followed in decreasing order of stock level by the South Central Region up by 5.7 percent to 261,800 cases; the Southeast Region down by 5.8 percent to 248,800 cases; the Southwest Region up by 13.8 percent to 197,500 cases, the Northeast Region up by 8.4 percent to 125,400 and the Northwest Region down by 10.1 percent to 85,000 cases.

The total USDA Six-Area stock of commodity eggs comprised 1,588,800 cases, of which 80.5 percent were shell eggs. The inventory of breaking stock was up 0.1 percent to 309,300 cases. The price of breaking stock this week reflects the availability of eggs from both mature and young flocks in relation to the demand for generic eggs.

Specialty egg inventory was down by 1.4 percent compared to a fall of 372 percent for the previous week to 174,900 cases with organic stock comprising 43.8 (was 51.3) percent of inventory. Recent data suggests a fluctuating build in the stock of USDA Certified Organic product. This is attributed to an apparent trend by consumers to purchase less-expensive brown cage-free product over organic eggs when there is a differential in price over $1.00 per dozen.

During the past week the USDA benchmark retail price of cage-free brown rose by 7.9 percent, or 20 cents per dozen to $2.73 per dozen while USDA Certified Organic rose by 0.3 percent or   1 cent per dozen to $3.60 per dozen, narrowing the price differential to $0.86 per dozen ($1.06 per dozen last week) suggesting larger purchases of the organic category in the coming week at the expense of cage-free eggs.  Large week-to-week percentage fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.