Egg Industry News

 

Cage Free Housing Systems

Mar 24, 2017

    

In reviewing equipment offered by both U.S. and EU manufacturers at the 2017 IPPE and at the Midwest Poultry Federation Convention it is evident that our ‘cage-free’ market is now characterized by five distinctly different systems each with its own advantages and features relating to density, acceptability by flocks, and contribution to performance. 

  

The most important considerations weighed by potential purchasers relates to acceptability by customers. It is indeed unfortunate that decision makers among the major supermarkets, wholesale-club and QSR chains have little experience in production. They are frequently misguided by self-appointed welfare experts or they misinterpret published or posted data. 

This may have profound implications for a producer intending to supply a chain based on a short-term arrangement but with a financial commitment to a system of upwards of 15 years.

Read the Full Article at http://egg-cite.com/articles/single.aspx?contentID=8963

   
 

CORRECTION: Cal-Maine Foods, Inc. Announces Definitive Agreement to Acquire Egg Production Assets of Happy Hens Egg Farms, Inc.

Mar 3, 2017
     
                

Corrections to previous postings to this website
and its newsletter

  • This news item below is an exact copy of the news release issued Feb. 9, 2017 by Cal-Maine Foods Inc., regarding their plans to acquire Happy Hens Egg Farms, Inc.
  • Previous postings to Egg-Cite.com, and email messages of the newsletter, contained errors identifying the acquistion as Happy Egg Company.
  • The Happy Egg Company and Noble Foods have no affiliation with the acquition.
  • Both the editor and the webmaster regret our errors and apologize to all parties for our confusion of the similar company names.
  • Read the news release from the Cal-Maine Foods website
    at http://calmainefoods.com/news/
      
__________   __________


Cal-Maine Foods, Inc. Announces Definitive Agreement to Acquire Egg Production Assets of Happy Hens Egg Farms, Inc.

    

JACKSON, Miss.--(BUSINESS WIRE)--Feb. 9, 2017-- Cal-Maine Foods, Inc. (NASDAQ: CALM) today announced that it has reached a definitive agreement to acquire substantially all of the assets of Happy Hens Egg Farms, Inc., relating to their commercial production, processing, distribution and sale of shell eggs business.

The assets to be acquired, subject to the completion of this transaction, include commercial egg production and processing facilities with current capacity for approximately 350,000 laying hens and related distribution facilities located near Harwood and Wharton, Texas. The Company expects to close the transaction in the next few weeks.

  

Commenting on the announcement, Dolph Baker, chairman, president and chief executive officer of Cal-Maine Foods, Inc., said, “We are pleased to announce the acquisition of Happy Hens Egg Farms. Located near our other Texas locations, Happy Hen Egg Farms’ current site is designed for capacity of up to 1.2 million laying hens, and we intend to capitalize on specific market opportunities created by this additional production capacity. This proposed transaction is commensurate with our strategy to expand our business through selective acquisitions. We look forward to the opportunity to extend our market reach and deliver greater value to both our customers and shareholders.”

Cal-Maine Foods, Inc. is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally-enhanced eggs. The Company, which is headquartered in Jackson, Mississippi, is the largest producer and distributor of fresh shell eggs in the United States and sells the majority of its shell eggs in states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.

   
 

AEB Reports on Exports to South Korea

Mar 1, 2017

    

The American Egg Board citing data from USDA Agriculture and Marketing Services reported that 53,806 cases of eggs have been shipped to South Korea.

The AEB organized promotional meetings in Seoul on March 23rd concurrent with the Strategic Planning Conference organized by USAPEEC.  This was an opportunity for interested suppliers to communicate with major importers in South Korea.  These included Our Home, CJ Foodville, Hyundai Green Food and Samsung.

  

These companies are major distributors and supply eggs and egg products to the food service industry and bakeries.

   
 

Mutations Allow Viruses to Infect New Species

Mar 1, 2017

    

Studies conducted at the University of Kent in the UK demonstrated that Ebola virus could be transmitted to rodents with subsequent spread to contact animals.  At least five mutations would be required to allow the Ebola virus to infect new species. 

This finding suggests that viruses affecting livestock and poultry could conceivably become infectious to humans and other species given sufficient time and concentration of the natural host within an area.  This is the reason why prompt suppression of outbreaks of HPAI is necessary. Obviously this should if possible be followed by eradication, if this is a practical goal as in nations such as the U.S. where the infection is exotic. 

  

Obviously, in nations with endemic infection such as China, suppression of clinical infection using effective vaccines must be applied if a viable poultry industry is to exist. The presence of circulating AI virus in a large poultry population of a Nation will predispose to possible mutations. This is perhaps evidenced by the emergence of H7N9 infection in China. The situation is further exacerbated by the live bird market system bringing poultry workers and consumers into contact with avian viruses.

   
 

Egg Consumption in Australia

Mar 1, 2017

    

The Australian Egg Corporation Ltd. has indicated that in December 2016, purchases of eggs increased by 7.9 percent over the corresponding month in 2015.  During December 2016, 239 million eggs were purchased by a population of 24 million with a value of $83.8 million.

The relative proportions of eggs sold increased by 4.4 percent for caged flocks, 1.3 percent for barn-housed flocks and 12.7 percent for free-range.

  

During December, Australia exported eggs valued at $20 million to South Korea.

   
 

Additional Case of AI Diagnosed in the UK

Mar 1, 2017

    

Banham Poultry located in Norfolk, has been affected by the ongoing outbreak of H5N8 avian influenza prevalent in many EU nations. 

Appropriate control measures have been implemented around the index farm, the seventh to be affected since December 2016.

 

The major concern relating to quarantine and control measures is the retention of a ban on outside access to reduce the risk of infection.  The British Free Range Egg Producers’ Association has requested the Department of Environment, Food and Rural Affairs (DEFRA) to allow outside access as of the beginning of March.  This will be necessary to allow farmers to retain their free-range designation. 

The outside-access restrictions apply to England although authorities in Wales and Scotland are allowing outside access with imposition of “enhanced biosecurity”.DEFRA has designated specific areas as “higher risk” and will allow outside access only with overhead netting to prevent contact between commercial poultry and free-living birds. 

The organization representing free-range production estimates that 150 producers will be within these high-risk areas and will accordingly be denied outside access and will have to market eggs from free-range as “barn housed” with an appropriate reduction in wholesale value.

   
 

Puzder Withdraws as Nominee for Secretary of Labor

Mar 1, 2017

    

Based on the growing realization that he would he would not receive sufficient votes for confirmation, Andrew F. Puzder withdrew his candidacy for Secretary of Labor.  This step was based on allegations of spousal abuse and employment of an illegal alien and possible failure to pay tax on her salary.

Puzder is the CEO of CKE Restaurants, owners of Hardee’s and Carl’s Jr.  He is strenuously opposed to mandatory minimum wage laws and would have moved the Department of Labor to an anti-Union stance.

  

President Donald J. Trump has now nominated R. Alexander Acosta, Dean of the Florida International Law School for the position of Secretary of Labor.

   
 

Hy-Line International Releases IBD Technical Bulletin

Mar 1, 2017

    

Hy-Line International through its extensive veterinary resources and experience has issued a new technical bulletin dealing with infectious bursal disease. 

The document can be accessed at www.hyline.com/userdocs

  

   
 

AEB Celebrates Opening of New Office

Mar 1, 2017

    

AEB hosted a ribbon-cutting ceremony at their new office
attended by Chairman Blair Van Zetten and
AEB president and CEO Anne Alonzo (4th from right)

The address of the new location is 8533 W. Higgins Road. Chicago IL. 60631.

  

 

   
 

Demand for Eggs in South Korea Stabilizing

Mar 1, 2017

    

According to a report in the February 27th edition of the USAPEEC Monday Line, retail prices of eggs in South Korea have declined during the past two weeks.  During mid-January prior to the Lunar New Year, eggs were retailing at $3.35 per dozen dropping in mid-February to $2.75 per dozen.

The high price was due to an imbalance between supply and demand.  Approximately 30 percent of the national table-egg flock has been depleted as a result of exposure to highly pathogenic avian influenza.  The reduction in price is not attributed directly to importation since only 700 metric tons of eggs have been imported from an available government quota of 12,000 tons. The reduction is possibly due to less panic buying and hoarding stimulated by extensive publicity associated with the outbreak. 

  

As with the 2015 HPAI epornitic in the U.S., any major depletion of flocks including both pullets and mature hens will require at least 18 months to reestablish pre-infection levels of production.  During this time, imports of both shell eggs and egg products will be required to satisfy demand.  Euphoria evidenced in mid-January in the U.S. concerning exports to South Korea now appear overstated.  In all probability, South Korea will import eggs from nations which can supply brown-shelled product with deeply pigmented yolks consistent with consumer demand.  A further complication relates to the relatively high cost of transport from the U.S. and the value of the U.S. dollar in relation to competitors such as India, Spain and the Ukraine.

   
 

AEB Promoting Eggs to Schools

Mar 1, 2017

    

The AEB Eggs in Schools program has been intensified with the distribution of how-to videos demonstrating opportunities for schools to incorporate eggs and egg products in catering.  Information has also been posted on YouTube in addition to posters and logos to be made available to school administrators.

In conjunction with the Iowa Egg Council and the USDA the AEB has collaborated to  disseminate information regarding safety and handling of shell eggs in foodservice operations for schools.

  

   
 

Egg Farmers in China Impacted by Avian Influenza Affecting Consumers

Mar 1, 2017

    

The growing concern over H7N9 avian influenza affecting consumers in China has resulted in authorities closing wet markets.  This infection is clinically inapparent in commercial poultry flocks.

Unfortunately susceptible humans coming into contact with the virus through wet markets has resulted in over 100 cases of influenza attributable to H7N9 spread throughout China during late January through mid-February 2017.

  

Since there is no evidence of virus being transmitted to consumers through eggs or processed poultry, closure of wet markets is justified, albeit delayed. This change to the distribution system will require purchasers of traditional poultry including hens, “yellow birds” and ducks to obtain  their supplies of poultry from supermarkets or stores operating a cold chain.

Although there has been no decline in egg consumption, farmers are now unable to dispose of spent hens. According to a Reuters report on February 24th, both small-scale farmers with less than 10,000 hens and even larger operators are having difficulty in disposing of old flocks. Uneconomical flocks are accordingly being retained. The news report, noted that the price for spent hens has declined to $0.25 per pound. 

According to data provided, the ex-farm price for nest-run eggs is $0.48 cents per dozen.  The feed component of egg production is close to the egg price ranging from $0.40 to $0.50 cents per dozen depending on production level and cost of diets. 

It is apparent that producers in China rely on revenue from spent hens to break even under conditions of over-production within the small-scale segment of the 1.2 billion hen population.

   
 

Shell-Egg Products and Prices in New Zealand.

Mar 1, 2017

    

A trip to New Zealand offered an opportunity to review shell-egg products and retail prices.

The market is entirely brown-shelled. Eggs are presented in either 6- or 12- fiber packs. Product size is designated Number 6, 7 or 8 roughly corresponding to our Extra large, Large and Medium.

  

In addition eggs may be packed ungraded as “mixed size” but with a guaranteed minimum net weight.

Prices for the three housing alternatives offered converted to U.S. currency per dozen are:-

  • Cage  $2.65
  • Barn $3.32
  • “Free Range” (area not specified) $6.75.

   
 

Ayers Rock, Northern Territories, Australia

Mar 1, 2017

Dr. Simon Shane and Dr. Barbara Shane visit
Ayers Rock, Northern Territories, Australia

   
 

USDA Weekly Egg Price and Inventory Report, February 23rd 2017

Feb 24, 2017

    

According to the USDA Egg Market News Report (Vol.64: No. 8) posted on February 21st Midwest-wholesale prices for Extra Large and Large decreased by 3 percent this past week reverting to the prices pertaining five weeks ago. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

The latest USDA Egg Market News Reports released documented a USDA Combined Region valu of $0.65 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.60 per dozen.

  

At the high end of the range, the price in the South Central Region, attained $0.69 per dozen. The current USDA Combined Price was approximately 75 cents per dozen below the three-year average. In early 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of all eggs.

Hen numbers continue to rise relative to demand attaining approximately 311.6 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 1.5 million. The total egg-flock comprises 316.7 million including hens in molt and small flocks.

Generic shell-egg stock increased by 0.4 percent reflecting the balance between demand and production. Dried-egg inventory of 29.4 million pounds as of December 31st is extremely high, as is the National stock of frozen egg products at 35.8 million pounds.    

   
 

RISE IN PRIVATE LABEL BUISNESS

Feb 24, 2017

    

The recent mid-November Exposition organized by the Private Label Manufacturers Association (PLMA) held in Chicago, showcased innovations in food products and packaging.  Private label business surpassed $118 billion in 2015 with a growth rate approaching two percent

According to Nielsen, store brands in 2015 represented 18 percent of stores’sales value attaining $62.5 billion in U.S. supermarkets.  Growth rates for store brands in drug stores exceeded that of national brands last year. 

  

According to the PLMA, there was considerable growth from deep discount stores including Aldi and Save-A-Lot in addition to Whole Foods Market and Trader Joe’s.  These non-traditional supermarkets achieved $140 billion in sales representing a potential savings of $44 billion annually to shoppers who selected store brands.  According to McMillianDoolittle L.P. of Chicago, the majority of U.S. of food retailers will add to private label offerings in 2017. 

With the advent of Lidl in the U.S., there will be more competition in the private label space with lower prices and fewer s.k.u. counts on shelves.  Consumer surveys show that millennials in particular are more loyal to their favorite stores than their parents with 90 percent of those surveyed shopping in only two stores. 

Brian Scharoff President of the PLMA notes, “Store brands remain the retailer’s most potent weapon in developing strategies for the millennial group”.  He added, “store brands provide flexibility in opportunities to be creative with product assortment and concepts without waiting for national brands”. 

The trend towards store brands is evident with both generic and specialty eggs, to the detriment of national brands, which are experiencing difficulty in maintaining volume in a prolonged low-priced market with large differentials.

   
 

WALMART TESTS COMBINATION CONVENIENCE-PICKUP CONCEPT

Feb 24, 2017

    

Wal-Mart is testing a new concept to boost their eCommerce initiative.  Essentially the prototypes resemble a modern convenience store selling fuel in the forecourt and stocked with groceries, hot sandwiches and coffee in a 4,000 square foot sales area with aisles allowing access to groceries on shelves. 

 

What distinguishes the Wal-Mart operations in Huntsville, AL. and Denver, CO. is that shoppers can pick up groceries previously ordered on-line.  Gina Kretoski, responsible for Walmart eCommerce noted, “The concept was born because at Walmart because we are constantly looking for ways to add convenience.

Customers are changing the way they shop and we want to make sure we’re changing too”.  Online grocery pickup is open from 08H00 to 28H00.  Orders received by 13H00 will be available from 17H00 on the same day.  Orders are filled from local Walmart Supercenters and the service is free.

   
 

FRANCE DIAGNOSES H5N8 ON A DUCK FARM

Feb 24, 2017

    

Following the recent upsurge in reports of H5N8 in the EU, France announced isolation of virus from a duck farm in the southwest region of the Nation.  In early 2016 this area was affected by avian influenza among commercial farms holding geese and ducks to produce foie gras. (See report February 24th).

After a slow start to control and eradication attributed to inaction by regulatory authorities and deficiencies in biosecurity, the late-winter outbreak was eventually contained. Many dozen family-operated farms were affected resulting in bans on importation of poultry products from France and leading to a collapse of the foie gras industry due to embargos imposed by Japan and other importing nations. 

  

December 3rd was to have been the deadline for a declaration of freedom from AI.  It is possible that exports of the high-value foie gras product may continue if importing nations accept the principle of regionalization although it is noted that many of the production farms with up to 10,000 ducks are located in the southwest of France.

   
 

CLARITY EMERGES OVER SHELF-LIFE LABELING

Feb 24, 2017

    

The Food Marketing Institute and the Grocery Manufacturing Association have suggested voluntary labels to indicate shelf life:

  • Best if Used By will indicate the date past which taste or quality may deteriorate
  • Use By indicates the date beyond which safety concerns may affect perishable products

It hoped that the adoption of the voluntary Best if Used By and Used By will be universally adopted in the U.S. by mid-2018, as roll-out has commenced.

 

Jack Jeffers, VP of Quality at Dean Foods noted, “Eliminating confusion among consumers by using common product data wording is a win-win because it means more products will be used instead of thrown away in error”.

It is noted that individual states have obligatory labeling of shelf-life which may conflict with the simple scheme suggested by the FMA and GMA. The current system of imprinting packs with a Julian date is not helpful to consumers and requires a supplementary open date.

   
 

LISTERIA IN CHEESE AFFECTS MANY PRODUCTS

Feb 24, 2017

    

Isolation of Listeria monocytogenes from a sample of cheese manufactured by Deutsch Kase Haus of Middleburg, IN. has resulted in an extensive recall involving 130 brands and products including Sargento, Sara Lee, and store brands sold by Meijer, Albertsons, H-E-B and other supermarket chains.

When contaminated cheese is added to processed food products including pizzas and salads, the extent of recalls increase exponentially in relation to the inclusion of an implicated dairy product.

  

   
 

Eating a Breakfast Meal Lowers Risk of Cardiovascular Disease

Feb 24, 2017

    

According to dietary guidelines prepared by Columbia University Medical Center, consuming a breakfast meal rather than snacking during the day leads to a reduction in the risk of cardiovascular disease. 

The report was endorsed by the American Heart Association. The study demonstrated that 30 percent of U.S. adults skipped breakfast. 

Those that do eat breakfast each day usually have lower serum cholesterol and lower blood pressure compared to subjects deferring the first meal of the day.

Subjects who did not eat a breakfast meal were found to be overweight and prone to diabetes and other metabolic complications associated with over- consumption of calories and poor food choices.

  

The American Egg Board through the Egg Nutrition Center has demonstrated the benefits of consuming an egg at breakfast.  It is now up to the industry to engage with consumers and produce convenience foods that suit the lifestyles of the 30 percent that cannot accommodate a conventional breakfast into their routines and lifestyles.

   
 

National Restaurant Association Releases December Performance Index

Feb 24, 2017

    

The Restaurant Performance Index declined slightly in December to 100.5 from the November value of 100.7.

The Current Situation Index which measures same-store sales, traffic, labor and capital expenditure declined slightly to 99.5 in December mainly as a result of depressed same-store sales and traffic.

  

The Expectations Index was unchanged in December at 101.6.  This parameter was associated with a “cautiously optimistic outlook for the economy.”

Approximately one-third of restaurant operators expect an improvement in the economy within the coming six months which is an improvement from 2016 with eleven straight months of negative expectations.  More than half of the restaurant operators plan to make a capital expenditure in equipment, expansion or remodeling within the next six month.  This may be due to increasing labor rates predicating modern equipment to achieve efficiency in food preparation and serving.

   
 

Midwest Layer Health Management School

Feb 24, 2017

    

The annual Layer Health Management School will be held May 10 – 11th 2017 at Michigan State University in East Lansing, MI.  The program will include both lectures and laboratories and will cover aspects of ventilation management, pest control, recognition of disease and interaction with diagnostic laboratories.

The Layer Health Management School operates under the direction of faculty at Michigan State University, Purdue University, University of Minnesota and the University of Georgia.  The school has the support of a number of poultry organizations including the Minnesota Turkey Growers’ Association.

  

For further information access info@minnesotaturkey.com or (763) 682-2171.

   
 

Target to Shelve Innovation Programs

Feb 24, 2017

    

According to a February 3rd article in the Minnesota Star Tribune Target Corporation will now concentrate its resources on increasing traffic and same store sales. As a result, executive time and resources for innovative programs have been curtailed. 

Victims of the reorganization include “Goldfish” an E-commerce start-up and a highly mechanized “store of the future” incorporating robotics.

  

Dustee Jenkins, Senior Vice President of Communications for Target stated, “We regularly pause to evaluate our business and have to make tough choices about where our company is best served to invest our time and resources.”  The statement continued, “We recently made some changes to the innovation portfolio to refocus our efforts on supporting our core business, both in stores and online, and delivering against our strategic priorities.” 

Target has been impacted by executive turnover, contributing to a stalling of their recovery program initiated by Brian Cornell. Although there is merit in “thinking outside the box and appointing entrepreneurs-in-residence”, what Target needs most at the present time is a retreat to reality.

On a personal note, during a recent visit to a relatively new Target Superstore in an affluent suburban area of North Carolina, poorly stocked shelves were apparent, the clothing area looked like a going-out-of business sale at a K Mart and big-ticket items had been moved around on shelves so that it was impossible to determine prices.  Check-out lines were long, contributing to an unpleasant shopping experience.  At least the toilets were clean but that may be an indication of low traffic rather than a commitment to hygiene.

   
 

2017 IPPE Attendance

Feb 24, 2017

    

Statistics for the 2017 IPPE were made available on February 2nd.  These included 31,000 registrants, 1,275 exhibitors and the Show Floor which covered 533,000 square feet. 

In a joint statement by the organizers of the IPPE, the U.S. Poultry and Egg Association, the American Feed Industry Association and North American Meat Institute, noted “this year’s tremendous exhibition floor and attendee numbers is a complement to IPPE education programs, networking opportunities and diverse exhibits. 

 

The excitement and energy displayed by this year’s attendees and exhibitors will continue to safeguard the success and growth of future IPPEs.

The educational programs comprised 25 major symposia, the International Scientific Poultry Forum and various specialty workshops including the Pet Food Conference and the Beef Workshop.

   
 

Supermarket and Restaurant Industries Support Common Sense Nutrition Disclosure Act

Feb 24, 2017

    

According to a press release from the Food Marketing Institute on February 3rd, the Association will strongly support the Common Sense Nutrition Disclosure Act (H.R. 772/S. 261). 

The legislation would allow the use of a menu or menu board in prepared foods areas, declassifies advertisements and marketing materials as “menus” and allows the use of a website to comply with the FDA nutritional labeling requirements which would be onerous for both restaurants and supermarkets.

  

The Food and Drug Administration was inflexible in establishing a Final Rule on nutritional labeling and the proposed legislation would clarify many aspects neglected and deferred by the Agency to the benefit of both retailers and consumers.

   
 

Panera Bread Reports on Q4 and FY 2016

Feb 24, 2017

    

In a press release dated February 7th Panera Bread Company (PNRA) announced results for the 4th Quarter and Fiscal 2016 ending December 27th 2016.

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)

   
   
 

Biomin Reports on Mycotoxin Content of 2016 Corn Crop

Feb 24, 2017

    

US feed and livestock producers should carefully monitor mycotoxin contamination in ingredients and feed, based on results in the latest BIOMIN Mycotoxin Survey.

For 2016 in the United States, a total of 387 corn samples sourced from over 26 different states and 79 DDGS samples sourced from 14 different states were analyzed in three different laboratories (Romer Labs Inc., USA; Veterinary Diagnostic Laboratory at Iowa State University, USA; Activation Laboratories, Canada) in order to identify the presence and potential risk posed to livestock animal production by six major mycotoxin groups.

  

The survey results provide an insight to the prevalence of aflatoxins (Afla), zearalenone (ZEN), deoxynivalenol (DON), fumonisins (FUM), T-2 toxin (T-2), and ochratoxin A (OTA).In total, 387 corn samples and 79 distiller’s dried grains with solubles (DDGS) samples were sourced from across the US in 2016. Approximately 90% of corn samples and all DDGS samples tested positive for at least one mycotoxin.

Read the Full Sponsored Article at http://egg-cite.com/articles/single.aspx?contentID=8784

   
 

CME Prices

Feb 21, 2017

    

On February 16th close of trading trading on the CME, yielded the following rounded quotations for corn, soybeans and soybean meal.

Values for corresponding months as quoted for the previous week are indicated in parentheses:-

COMMODITY

Corn (cents per bushel)

March ’17   368    (365)

May ’17     376  (   373)  

Soybeans (cents per bushel)

March ’17  1,035  (1,031)

May ’17  1,046  (1,042)  

Soybean meal ($per ton)

March ’17   341     (333)   

May ’17     345   (  336)   

 

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

  • Corn:                     March quotation up by 3 cents                      (+0.8 percent)
  • Soybeans:            March quotation up by 4 cents.                     (+0.4 percent)
  • Soybean Meal:    March quotation up by $8/ton                      (+2.4) 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 February 9th USDA-WASDE Report #562 for a review of price projections and quantities of commodities produced in the 2016 season.

   
 

USDA Weekly Egg Price and Inventory Report, February 15th 2017

Feb 20, 2017

    

OVERVIEW

According to the USDA Egg Market News Reports posted on February 13th Midwest-wholesale prices for Extra Large and Large decreased by 20 percent this past week reverting to the prices pertaining four weeks ago. The progression of prices during 2017 is depicted in the USDA chart reflecting three years of data, updated weekly.

  

The USDA Egg Market News Report (Vol 64: No. 08) released on February 13th documented a USDA Combined Region value of $0.81 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.75 per dozen. At the high end of the range, the price in the South Central Region, attained $0.85 per dozen. The current USDA Combined Price was approximately 63 cents per dozen below the three-year average. In early 2016 the average was inflated by the rise in prices attributed to the post-HPAI shortage of all eggs.

Hen numbers continue to rise relative to demand attaining approximately 310.8 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 0.7 million. The total egg-flock comprises 315.9 million including hens in molt and small flocks. Generic shell-egg stock increased by 0.1 percent reflecting the balance between demand and production. Dried-egg inventory of 30.1 million pounds as of January 31st is extremely high, as is the National stock of frozen egg products at 35.8 million pounds.    

   
 

JANUARY 2017 USDA EX-FARM BENCHMARK PRICE DECLINES 34 PERCENT FROM DECEMBER, RESULTING IN A NEGATIVE MARGIN.

Feb 17, 2017

    

Introduction

Comments supplementing the production summary tables for the latest series reflecting USDA January 2017 statistics and prices made available by the EIC on February 15th 2017, are tabulated together with comparison values from the previous January 12th 2017 posting.

EGG-CITE summarizes weekly USDA data on egg production and prices in each edition.

  

January 2017 Cost and Revenue Data

The USDA reports data for six regions, respectively comprising the Northeast, South East (Mid-Atlantic), South Central, Midwest, Northwest and California (NW and California combined in some tables)

  • The USDA ex farm benchmark blended egg price in January 2017 fell 34 percent to 48.2 cents per dozen, compared to December yielding a negative margin of 12.1 cents per dozen as delivered from the laying house. The January 2017 value should be compared to 91.7 cents per dozen for the corresponding month in 2016 and 88.2 cents per dozen in January 2015. It is noted that from November 2014 through March 2015, prices were inflated in anticipation of implementation of California Proposition #2 effective January 1st 2015 and then at the end of this period by the seasonal pre-Easter rise. Thereafter prices responded positively to shortages caused by HPAI in the upper Midwest with a peak in August 2015.
  • During January 2017 feed price averaged 32.4 cents per dozen. Feed cost during 2015 averaged 34.9 cents per dozen. The average feed cost in 2014 was 43.2 cents per dozen in contrast to 2013 which was considerably higher at 50.12 cents per dozen, reflecting the drought-affected crop of 2012.
  • Combining data from the USDA and the EIC (formerly data from the University of California), producers recorded a negative margin of 12.1 cents per dozen at farm level for flocks in January compared to a positive margin of 12.1 cents per dozen in December. The algebraic average margin for 2016 was -9.6 cents per dozen with losses experienced for eight consecutive months.  Ex-farm margin for 2015 amounted to a monthly average of 74.5 cents per dozen. For 2014, average ex-farm contribution margin was 33.9 cents per dozen with all months positive. During 2013, a monthly algebraic positive average margin of 15.3 cents per dozen was earned.
  • The simple average price of feed for January 2017 over 5-regions was $206.30, 1.7 percent higher than in December. The Southeast recorded the highest cost among five regions at $238.44 compared to the lowest region, the Midwest at $175.77 per ton. The average figure includes ingredients plus milling and delivery at approximately $10 per ton. The price of corn was $151 per ton in January. An increase of 3.8 percent in the price of soybean meal from $338 per ton in December to $351 per ton in January contributed to the rise.in the cost of feed There was a $71 per ton differential in corn price between the Midwest and the Southeast in January 2016. Feed price will continue to be the major factor driving production cost and hence margin. Each $10 per ton difference in feed cost represents 1.75 cents per dozen.
  • The EIC-calculated the 6-Region total nest-run production cost in January to be 60.33 cents per dozen, 1.0 percent higher than 59.73 cents per dozen recorded in December. Production costs during January ranged from 54.88 cents per dozen in the Midwest up to 76.26 cents per dozen in California which was higher than the Midwest region by 21.4 cents per dozen. The differential in feed cost between the extremes, the Southeast and the Midwest regions was 9.8 cents per dozen in January.
  • Retail egg prices as determined by the Department of Commerce for December 2016 averaged 138.3 cents per dozen, down by 4.7 percent or 6.2 cents per dozen compared to November. During December 2015 and 2014 retail prices were 275.1 cents per dozen (post HPAI) and 221.0 cents per dozen respectively in the run-up to implementation of California Proposition #2. During 2016 retail prices did not decline in proportion to ex-farm prices allowing higher margins at retail depressing demand.
   
 

Aspen Hills Closes as a Result of Listeria Contamination

Feb 17, 2017

    

Previously CHICK-CITE and EGG-CITE reported on outbreaks of listeriosis involving Blue Bell ice cream contaminated with dough supplied by Aspen Hills Inc. and the previous 2015 outbreaks of listeriosis associated with multiple plants operated by Blue Bell, a national brand.

The September 2016 determination that Listeria monocytogenes was present in cookie dough supplied by Aspen Hills to be added to Blue Bell ice cream, resulted from enhanced quality control by the ice cream producer acting in compliance with the FSMA. 

  

The finding resulted in an investigation revealing problems in the Aspen Hills’ Iowa plant during a late September FDA inspection. This resulted in the Agency issuing a Form-483.  The FDA carried out a subsequent inspection at the plant and on January 10th 2017 issued a further warning letter documenting continuation of serious violations.

The owners of the plant failed to correct deficiencies and to respond adequately to the September warning letter. The January communication stated, “The frequency of these environmental findings in conjunction with your finished product finding indicates that your firm is not taking aggressive action to identify harborage sites for L. monocytogenes, to deep clean your facility effectively, and to prevent finished product contamination.”

The FDA applied whole genome sequencing (WGS) to 15 isolates to demonstrate that they were genetically identical.  Based on deficiencies in the plant and an apparent inability to rectify the problems relating to equipment, procedures and training as detailed by the FDA, the owners elected to cease production and wind up the company.

Listeria can become a persistent infection in food plants and requires diligent hygiene and decontamination of equipment and work surfaces at regular intervals coupled with effective quality control as part of a HACCP program.

   
 

Whole Genome Sequencing Reviewed at IPPE

Feb 17, 2017

    

USPOULTRY in conjunction with the North American Meat Institute organized a symposium “Whole genome Sequencing – Food Safety Implications” during the 2017 IPPE.  Dr. Haley Oliver, Associate Professor of Food Science at Purdue University provided a description of the process and how it can be used to alert public health officials regarding the presence of a common-source infection.  Dr. Oliver also noted the value of public-access databases reviewable by researchers and public health officials in their investigations.

  

Dr. Matthew Wise, director of the Outbreak Response Team lead-investigator at the Centers for Disease Control and Prevention, noted that food production and distribution have undergone substantial change over twenty years and that ready-to-eat food is now consumed more frequently.  Whole Genome Sequencing can be applied to definitively determine if bacteria isolated from patients and an implicated food are identical.  Wise considers that sequenced-based surveillance will result in the detection of new outbreaks allowing quicker control and reducing the incidence rate for outbreaks.

It is evident that the food industry will have to become acquainted with WGS, how it can be applied and the implications in terms of liability.  Dr. Rafael River, Manager of Food Safety and Production at USPOULTRY noted, “We need industry concerns addressed before we can proceed with any activity related to WGS. Most importantly, we need the time and space to learn how to use WGS to improve public health and protect our industries.”

   
 

Webinar on HPAI Outbreak Response

Feb 17, 2017

    

The Livestock and Poultry Environmental Learning Center at the University of Nebraska arranged a webinar on response to avian influenza. 

The program was aired on February 17, 2017.

An archived version will be available subsequent to the webinar at www.extension.org/54317

  

   
 

Aldi Embarks on Store Upgrades

Feb 17, 2017

    

Aldi announced on Wednesday January 8th that it will spend $1.6 billion remodeling U.S. stores.  The program will increase selling space by 20 percent to 12,000 square foot for an average store.  The upgrades will include 1,300 stores to provide extended displays for perishable products, with the program completed by 2020.  In addition the Company will invest $3 billion for 615 new locations over a five-year period.

  

The changes are believed to be a preemptive measure to compete effectively with Lidl also a deep discounter operating in the EU although according to analysts, the upgrade will affect existing supermarket operators rather than a direct confrontation with Lidl.

In a related matter, the Schwarz Group, the parent company of Lidl has named Dane Hojer as the CEO following the resignation of Sven Scidel previous incumbent.

   
 

Whole Foods Market Reports on Q1 of FY 2017

Feb 17, 2017

    

In a press release dated February 8th after the market closed, Whole Foods Market (WFM) announced results for the 1st Quarter of Fiscal 2017 ending January 15th.

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)

   
   
 

Eating a Breakfast Meal Lowers Risk of Cardiovascular Disease

Feb 17, 2017

    

According to dietary guidelines prepared by Columbia University Medical Center, consuming a breakfast meal rather than snacking during the day leads to a reduction in the risk of cardiovascular disease. 

The report was endorsed by the American Heart Association. The study demonstrated that 30 percent of U.S. adults skipped breakfast. 

Those that do eat breakfast each day usually have lower serum cholesterol and lower blood pressure compared to subjects deferring the first meal of the day.

Subjects who did not eat a breakfast meal were found to be overweight and prone to diabetes and other metabolic complications associated with over- consumption of calories and poor food choices.

  

The American Egg Board through the Egg Nutrition Center has demonstrated the benefits of consuming an egg at breakfast.  It is now up to the industry to engage with consumers and produce convenience foods that suit the lifestyles of the 30 percent that cannot accommodate a conventional breakfast into their routines and lifestyles.

   
 

National Restaurant Association Releases December Performance Index

Feb 17, 2017

    

The Restaurant Performance Index declined slightly in December to 100.5 from the November value of 100.7.

The Current Situation Index which measures same-store sales, traffic, labor and capital expenditure declined slightly to 99.5 in December mainly as a result of depressed same-store sales and traffic.

  

The Expectations Index was unchanged in December at 101.6.  This parameter was associated with a “cautiously optimistic outlook for the economy.”

Approximately one-third of restaurant operators expect an improvement in the economy within the coming six months which is an improvement from 2016 with eleven straight months of negative expectations.  More than half of the restaurant operators plan to make a capital expenditure in equipment, expansion or remodeling within the next six month.  This may be due to increasing labor rates predicating modern equipment to achieve efficiency in food preparation and serving.

   
 

Supermarket and Restaurant Industries Support Common Sense Nutrition Disclosure Act

Feb 17, 2017

    

According to a press release from the Food Marketing Institute on February 3rd, the Association will strongly support the Common Sense Nutrition Disclosure Act (H.R. 772/S. 261). 

The legislation would allow the use of a menu or menu board in prepared foods areas, declassifies advertisements and marketing materials as “menus” and allows the use of a website to comply with the FDA nutritional labeling requirements which would be onerous for both restaurants and supermarkets.

  

The Food and Drug Administration was inflexible in establishing a Final Rule on nutritional labeling and the proposed legislation would clarify many aspects neglected and deferred by the Agency to the benefit of both retailers and consumers.

   
 

Sysco Reports on Q2 of FY 2017

Feb 17, 2017

    

In a press release dated February 6th Sysco (SYY) announced results for the 2nd Quarter of Fiscal 2017 ending December 31st 2016.

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).