Egg Industry News

 

H7N9 Avian Influenza Impacts Egg Production Farms in China

Mar 31, 2017

    

Reference to postings on H7N9 avian influenza in China from 2013 onwards (access SEARCH feature entering “H7N9”) discloses a pattern of inapparent infection with the Eurasian Lineage H7N9 strain.

Unfortunately infection of susceptible humans in contact with poultry mostly in wet markets is emerging as a public health issue. 

  

 

A few weeks ago it was noted that a mutation in the H7N9 strain had occurred resulting in clinical signs and mortality in chickens.

China has confirmed 65 percent mortality among a flock of 30,000 laying hens resulting in depletion of the flock and culling of another 170,000 contact chickens in order to control the outbreak.  Authorities have closed wet market in many provinces due to an ascending incidence rate of H7N9 avian influenza in the human population. 

There is extreme concern that the Eurasian strain of H7N9 could enter the wild bird population resulting in extensive dissemination by migratory waterfowl.

   
 

Put An Egg On It!  Promoted by AEB

Mar 31, 2017

    

In addition to serving eggs at breakfast, the AEB is actively promoting a trend of adding an egg to non-breakfast dishes.  Common in Holland, and based on the custom in colonial Indonesia, many dishes are served with a sunnyside-up egg.

According to Tecnomic, the proportion of operators offering eggs as toppings on menu items include:

  • Food trucks – 9 Percent
  • QSRs – 12 Percent
  • Traditional restaurants – 15 Percent
  • Fast casual – 25 Percent
  • Mid-scale restaurants – 34 Percent
  

Since eggs are perceived as being “healthy” based on their protein content, QSRs and casual dining restaurants are adding egg items to their menus both for traditional American and ethnic cuisine.  Buffalo Theory in San Francisco is adding poached eggs to their Sisig-and-Grits and the Summer House Santa Monica in Bethesda MD is serving poached eggs and scallions on their avocado toast special.

   
 

Evonik to Increase price of DL-Methionine

Mar 31, 2017

    

In press release dated March 22, Evonik announced a seven percent increase in the price of MetAMINO® DL-methionine, feed grade additive. 

 

It can be anticipated that Evonik will increase the price in the U.S. and ultimately matched by a similar escalation by other producers.

Further information can be obtained at www.evonik.com/press-releases.

   
 

Extension of H7N9 LP AI in Broiler Parent Flocks

Mar 31, 2017

    

Dr. Tony Frazier, State Veterinarian for Alabama confirmed that a flock of broiler parents located in Pickens County, contiguous with South Central Tennessee was diagnosed with low pathogenicity H7N9 avian influenza. 

The flock has been placed under quarantine with initiation of surveillance in the County.

A second diagnosis of H7N9 low pathogenic avian influenza was confirmed in a backyard flock in Madison County.

  

Since Tuesday March 14th, poultry producers in Alabama have functioned under an order prohibiting poultry exhibits and assembling of poultry to be sold.  Shipment of eggs and day-old chicks from hatcheries functioning under the National Poultry Improvement Plan are exempt from the order.

   
 

Mutation in Asian Lineage H7N9 Identified

Mar 31, 2017

    

According to the official China news agency Xinhua, scientists at the University of Hong Kong have identified this specific mutation which allows Asian Lineage H7N9 avian influenza to infect humans.  A research team at the State Key Laboratory for Emerging Infectious Diseases cooperating with the Department of Microbiology evaluated the genomes of a range of H7N9 isolates archived from 2013 onwards.

  

 It was demonstrated that a “unique nucleotide substitution (NS-G 540A) in the NS segment occurred within a previously undefined exonic splicing enhancer”.  This mutation allows the Asian Lineage H7N9 to infect and replicate in mammalian and human cells in tissue-culture.  The specific nucleotide mutation apparently emerged in 2000 in an H9N2 strain and subsequently entered the genome of H7N9 by reassortment.  The same mutation is present in H10N8 and H5N6 subtypes of avian influenza virus.

According to Professor Chen Honglin “The study provides a plausible mechanism to explain the molecular properties which allow H7N9 virus to infect humans while retaining the ability to circulate an avian species.” The mutation may be used as a biomarker in the future to establish whether emerging strains of avian influenza may develop the capability of infecting mammalian cells.

It is emphasized that the North American lineage H7N9 avian influenza present in both high and low pathogenic form in waterfowl and in commercial flocks in Kentucky, Tennessee and adjacent Alabama is different from the Asian Lineage H7N9 virus and humans are refractory to the strain.

   
 

ASSAY FOR DON

Mar 31, 2017

    

In 5 minutes, the ROSA DONQ-WETS5 test enables grain and feed producers to quantitatively detect DON or vomitoxin.

 

 

This Rapid One Step Assay is a quantitative lateral flow test that is read in the Charm EZ-M system or the ROSA-M Reader. Samples are extracted with water.

The ROSA DONQ- WETS5 test has been validated by Charm for many different commodities.

   
 

Cal-Maine Reports on Q3 of FY 2017

Mar 27, 2017

    

In a press release dated March 27th Cal-Maine Foods (CALM) announced results for the 3rd Quarter of fiscal 2017 ending February 25th 2017.

At the outset CALM faced an invidious comparison between high prices for eggs during the 3rd Quarter of Fiscal 2016 during a period of re-stocking of flocks after the 2015 HPAI epornitic, compared to unprecedented low values prevailing during the most recent quarter.

  

The following table summarizes the results for the 3rd Quarter compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

 3rd Quarter Ending  February 25th

2017

2016

Difference(%)

Sales:

$306,540

$449,760

-31.8

Gross profit:

$39,165

$132,726

-70.5

Operating income:             

$(4,573)

$85,771

neg

Net Income

 

 $4,139

$64,164

-93.6

Diluted earnings per share:

$0.09

$1.33

-93.2 

Gross Margin (%)

12.8

29.5  

-57.6

Operating Margin (%)

neg

19.1

neg

Profit Margin (%)

1.3

14.3

-91.0

Long-term Debt:

$7,302

$9,250

-21.1

12 Months Trailing:

 

 

 

           Return on Assets    (%)

-0.2

 

 

           Return on Equity    (%)

+1.16

 

 

           Operating Margin   (%)

-0.3

 

 

           Profit Margin          (%)

+0.8

 

 

Total Assets

$1,085,275

     $1,111,765

-2.4

Market Capitalization

$1,810,000

    $2,000,000

-9.5

 

52-Week Range in Share Price:          $35.10   to       $55.46

Market Close March 24th                   $36.10         11H00 March 27th post release $37.25

Forward P/E: 18.0

   
 

USDA Weekly Egg Price and Inventory Report, March 22nd 2017

Mar 24, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 12) posted on March 20th Midwest-wholesale prices for Extra Large and Large increased by 25 percent following a 16 percent increase the previous week after coming off the lowest values of 2017. 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 Report documented a USDA Combined Region value of $0.64 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 16-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.58 per dozen. At the high end of the range, the price in the South Central Region, attained $0.67 per dozen. The current USDA Combined Price was approximately 75 cents per dozen below the 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 all eggs.

Hen numbers this week were thankfully lower by 3.3 million this past week but still at a high level relative to demand attaining approximately 310.1 million in production. Hens in lay have increased from 303 million in early December 2016. The total egg-flock comprises 316.8 million including hens in molt and small flocks. Generic shell-egg stock decreased by 3.8 percent demonstrating fluctuation in the ongoing imbalance between demand and production. Dried-egg inventory of 30.4 million pounds (13,818 metric tons) as of February 28th is extremely high, as is the National stock of frozen egg products at 41.4 million pounds (18,669 metric tons) on February 28th.    

   
 

CHINA TO BECOME MORE AGGRESSIVE OVER H7N9 AVIAN INFLUENZA

Mar 24, 2017

    

Following a mutation in the H7N9 avian influenza virus, which to date has been clinically inapparent in poultry but infectious to human contacts, stronger measures will be taken to eradicate the infection. 

On March 17th the United Nations Food and Agricultural Organization and the World Organization for Animal Health (OIE) noted that targeted efforts are required to control H7N9. 

  

 

It is considered that the shift to high pathogenicity in poultry may facilitate surveillance and allow authorities to implement control measures including depletion of affected flocks. An obvious threat is the virus spreading from domestic poultry to free-living birds which will then become migratory reservoirs threatening the EU and the Americas.

   
 

RECOMBINANT INFECTIOUS LARYNGOTRACHEITIS VACCINE DEVELOPED

Mar 24, 2017

    

Project F060 funded by the USPOULTRY Harold E. Ford Foundation has resulted in a candidate  recombinant ILT vaccine based on substitution of glycoprotein B into a lentogenic B1 strain of Newcastle disease virus. 

 

The project led by Dr. Joseph Giambrone offers the possibility of replacing live attenuated vaccine propagated in embryos.  Virtually all field outbreaks of ILT in commercial broilers are attributed to this vaccine strain.  A Newcastle disease-vectored LT vaccine would be apathogenic.

Evaluation of the safety and efficacy of the new vaccine is in progress. It is noted that a number of alternative vectored vaccines are under development and it remains to be seen whether the Auburn University strain will be commercialized.

   
 

ALDI UPDATES LOGO

Mar 24, 2017


New

    

According to a March 20th release, Aldi Sud the parent of Aldi USA will unveil a new corporate logo to complement the ongoing program of modernization.

The new logo is apparently in use in China and is expected to replace the existing logo in the U.S. during 2018.

  


Previous

   
 

Low Path H7N9 in Kentucky

Mar 24, 2017

    

Dr. Robert C. Stout, state veterinarian for Kentucky confirmed that a flock of 22,000 broiler parents in Christian County yielded evidence of H7N9 low pathogenicity avian influenza in routine per-slaughter specimens examined at Murray State University, Breathitt Veterinary Center in Hopkinsville.

It is now apparent that an H7N9 North American lineage virus is the predominant pathogen presumably shed by migratory birds, given the frequency with which LP and HP isolates have been obtained from flocks beneath the Mississippi flyway in Kentucky, Tennessee and Alabama.

  

   
 

EUROPEAN COMMISSION TO INTRODUCE STREAMLINED FOOD SAFETY LEGISLATION

Mar 24, 2017

    

On March 15th Dr. Vytenis P. Andriukaitis Commissioner for Health and Food Safety for the European Union announced a new Regulation which compresses 70 laws into 5 in an attempt to modernize and streamline European food oversight from production through to consumption. 

The Regulation provides a package of measures to enforce health and safety standards through the entire agri-food chain.

Dr. Andriukaitis of Lithuania is a heart surgeon by profession was educated in Lithuania but born in Russia in 1941when his family was deported by the Soviets to Siberia. An ardent anticommunist, he was the founder of the Lithuanian Social-Democrat Party and was the co-author of the Constitution of the Republic of Lithuania.

From 2012 to 2014 he served as the Minister of Health of his native country.

  

Vytenis Andriukaitis

   
 

LAND O’LAKES TO ERECT FEED MILL IN ROANOKE VA

Mar 24, 2017

    

In a corporate release dated Tuesday 21st March, Land O’Lakes Inc., announced that it intends to erect an animal feed plant in Roanoke VA to commence production by the end of 2018. 

Beth Ford, Group Executive Vice President and COO of Land O’Lakes Inc., stated, “The Southeast region is the single biggest growth opportunity for our Purina animal nutrition business.  While the new facility is being constructed we will serve our important current and future customers from product made at our existing facilities and we will distribute through warehouses in Virginia and Kentucky”.

  

In November 2016 Land O’Lakes entered into a Letter of Intent to purchase feed assets of Southern States Cooperative.  According to Ford, “The Company is looking to move more quickly in the strategic market than the discussions which Southern States allowed”.

   
 

MISSOURI ATTORNEY GENERAL PERSISTS WITH LITIGATION OVER RESTRICTIVE CALIFORNIA REGULATIONS

Mar 24, 2017

    

Josh Hawley Attorney General for the state of Missouri will continue to challenge the Regulations mandating standards for confined hens arising from Proposition #2 enacted in November 2008. At issue is the constitutionality of California law AB 1437 enacted in 2010 enforcing the same housing requirements on out-of-state producers who collectively supply one third of eggs consumed in the state.

  

Hawley was the prime mover of litigation brought jointly by Attorneys General of Missouri, Alabama, Iowa, Kentucky, Nebraska and Oklahoma filed in 2014. It was a contention of the plaintiffs that the California Regulations violated the interstate commerce provisions regulating trade amongst states.  Judge Susan Graber of the 9th Circuit Court of Appeals ruled in favor of California noting that the six states failed to provide evidence that the California Regulations negatively affected their states but rather impacted individual egg producers.

Attorney General Hawley contends that states are given the right to defend their citizens against potentially injurious regulations promulgated by other states and accordingly an appeal will forwarded to the Supreme Court.

The action by the Attorney General may well be moot since customers responding to perceived consumer demand are requiring all producers to transition from confined systems irrespective of stocking density to alternatives including barns and aviaries by 2015 or before.

   
 

ALLTECH IDEAS CONFERENCE

Mar 24, 2017

    

The Alltech Ideas Conference (ONE 17) to be held May 21st through 24th in Lexington, KY will include a Poultry Focus Session.  Dr. Pearse Lyons, Founder and President of Alltech stated, “For poultry producers we understand that innovation must be practical and profitable. 

Our Poultry Focus Session will facilitate open discussions about what is ahead for the poultry industry and we will drive the disruptive thinking that could determine long-term success”.

  

The ONE 17 Poultry Focus Session will include:-

  • presentations on in ovo techniques,
  • application of CRISPR/Cas9 in breeding,
  • slow-growth with considerations of sustainability and profitability,
  • disruption in Washington and the political landscape influencing the food chain, global trade and climate change.

For additional information access www.one.alltech.com/poultry.

   
 

USDA Projection of 2016 and 2017 Egg Production

Mar 24, 2017

    

The USDA-ERS issued an updated March 15th record of egg production in 2016 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 (projected)

2017 (forecast)

Difference ’16-‘17

Production (m. dozen)

6,938*

7,435

7,635

+2.7%

Consumption (eggs per capita)

        256*

            275

           276

          +0.4%

New York Price (c/doz.)

        182*

              86

             91

          +5.5%

 

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

*Affected 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 related industry statistics.

   
 

WARNING ON OUTSIDE ACCESS FOR POULTRY

Mar 24, 2017

    

The North Carolina Department of Agriculture encourages enhanced biosecurity in a circular letter to poultry producers raising organic birds with outside access, Dr. R. Douglas Meckes, State Veterinarian issued a directive to move all poultry with outside access in to biosecure housing and to implement strict biosecurity. 

The circular urged monitoring of flocks for abnormal clinical signs or mortality which would occur following exposure to Avian Influenza virus.  The Mississippi flyway encompasses western counties in North Carolina placing poultry operations in this quadrant of the State at risk of infection.

  

   
 

ROBERT LIGHTHIZER UNDERGOES CONFIRMATION HEARING FOR USTR POSITION.

Mar 24, 2017

    

On March 17th, Robert Lighthizer appeared before the Senate Finance Committee to be confirmed as the U.S. Trade Representative.  Lighthizer is strongly supported by food and agricultural associations including the NCC. 

He served as the Deputy U.S. Trade Representative with the rank of Ambassador during the Reagan Administration with responsibility for industry, agriculture, investment and trade policy matters. 

He has worked on international trade issues representing manufacturers, and agricultural companies focusing on facilitating international trade.

  

Robert Lighthizer

The confirmation hearing denoted the concern by Senators representing agricultural states that access for U.S. exports should be a priority.  They especially urged that negotiations on the North American Free Trade Agreement should not impact exports to either Mexico or Canada.  Additional issues such as divided responsibility between the office of the U.S. Trade Representative and the Department of Commerce should also be resolved.

 Ambassador Lighthizer responded to a question from Senator Maria Cantwell (D-WA) stating, “I expect to have full statutory authority but will work collaboratively with both the White House and the Commerce Department”.  Senator Pat Roberts (R-KS) Chairman of the Senate Agriculture Committee cautioned Lighthizer that the Administration should not reconsider country-of-origin labeling.

   
 

USDA Confirm Second High Path H7N9 Case

Mar 24, 2017


    

The USDA Animal and Plant Health Inspection Service (APHIS) confirmed a case of H7N9 highly pathogenic avian influenza in a second broiler breeder farm in Lincoln County, TN. 

According to the news release, the flock of approximately 55,000 birds demonstrated elevated mortality and clinical signs and was subject to immediate PCR assay for the presence of AIV.

  

This flock, located two miles from the index case was depopulated.

Diagnosis was initially made by the Tennessee Kord Animal Health Diagnostic Laboratory and confirmed by the National Veterinary Services Laboratory in Ames, IA.

The farm lies within the 10km radius around the index farm and was subjected to surveillance.

   
 

Tennessee State Veterinarian Warns State Farms

Mar 24, 2017

    

Dr. Charles Hatcher, State Veterinarian of Tennessee warned poultry producers to enhance biosecurity based on the emergence of H7N9 North American lineage, highly pathogenic avian influenza.

Dr. Hatcher advised owners of backyard and commercial flocks to avoid comingling birds and to interdict access to environmental contamination shed by migratory waterfowl and possibly other birds.  Dr. Hatcher echoed the advice of other State Veterinarians in 2015 to avoid fairs, flea markets or locations where birds are traded.

  

Veterinary authorities have emphasized that the H7N9 North American lineage strain of avian influenza is genetically different from the strain in China which has resulted in infection of susceptible human contacts.  The North American strain of H7N9 avian influenza cannot be transmitted by consumption of cooked poultry or eggs.

   
 

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

   
 

ALDI AND LIDL INTEND TO DISRUPT FOOD RETAILING

Mar 23, 2017

    

According to Supermarket News, Lidl which will enter the U.S. market  will jointly generate sales in the region of $65 billion through 3500 stores by 2021.

 

 

   
 

LAWSUIT AGAINST CANADIAN BROADCASTING CORPORATION OVER SUBWAY ALLEGATIONS TO MOVE FORWARD

Mar 22, 2017

    

On February 24th the Canadian Broadcasting Corporation Marketplace program aired “The Chicken Challenge” alleging that Subway roasted chicken contained only 53.6 percent meat with the remainder comprising vegetable protein. The plaintiffs in the lawsuit in Canada are Grewal Foods with 2,000 stores comprising one of the largest franchisees in the Subway chain

  

The DNA assays were conducted by the Trent University Wildlife Forensic Laboratory.  Concurrently with the assay of Subway chicken, the laboratory in Canada claimed that tenders served by competitors to Subway contained approximately 86 percent chicken.

Subway immediately arranged for independent assays to be conducted which showed less than one percent vegetable material in samples of oven-roasted chicken and strips.  In addition, it was also determined that samples taken from competing QSR chains were in fact supplied by the same Canadian plant, casting doubt on the validity of the comparisons.

   
 

CME Prices

Mar 22, 2017

    

On March 17th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded. Values for corresponding months as quoted for the previous week are indicated in parentheses:-

COMMODITY

Corn (cents per bushel)

May ’17   367     (371)

June ’17     375    

Soybeans (cents per bushel)

May ’17   1,000  (1,025)

June ’17  1,010    

Soybean meal ($per ton)

May ’17   328     (336)   

June ’17     332       

                      

   

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

  • Corn:                     May quotation up by 4 cents                    (+1.1 percent)
  • Soybeans:            May quotation up by25 cents.                  (+2.4 percent)
  • Soybean Meal:    May quotation down 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, March 16th 2017

Mar 17, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 11) posted on March 13th Midwest-wholesale prices for Extra Large and Large increased by 16 percent after the past week which represented the lowest values in 2017. 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 Report documented a USDA Combined Region value of $0.56 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 16-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.50 per dozen. At the high end of the range, the price in the South Central Region, attained $0.59 per dozen. The current USDA Combined Price was approximately 70 cents per dozen below the 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 all eggs.

Hen numbers this week remained at a relatively stable but high level relative to demand attaining approximately 313.5 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 0.1 million. The total egg-flock comprises 320.5 million including hens in molt and small flocks. Generic shell-egg stock increased by 1.5 percent demonstrating fluctuation in the ongoing imbalance 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 36.9 million pounds on January 31st.    

INVENTORY

Cold storage stocks in selected regions on March 6th 2017 amounted to 3.084 million pounds, 2.4 percent above the stock of 3.009 million pounds during the week of February 1st. 2017.

The latest monthly USDA Cold Storage Report released on February 23rd documented a total stock of 36.913 million pounds of frozen egg products on January 31st 2016. This was down 12.4 percent from January 31st 2015. Approximately 85 percent of inventory comprised the categories of “Whole and Mixed” (35.7 percent) and “Unclassified” (49.7 percent).

The national stock of generic shell eggs on March 13th was up by 1.5 percent this past week, compared to a 3.2 percent decline in inventory during the previous week. Three of the six regions showed decreases in inventory. The Midwest Region was up a substantial 8.7 percent compared to the previous week to 413,500 cases. This region was followed in decreasing order of stock level by the Southeast Region down 0.9 percent to 284,700 cases; the South Central Region decreased by 4.7 percent to 244,700 cases; the Southwest Region up by 4.0 percent to 184,300 cases, the Northeast Region down by 4.5 percent to 111,800 cases and the Northwest unchanged with 116.900 cases

The total USDA Six-Area stock of commodity eggs comprised 1,652,600 cases, of which 82.1 percent were shell eggs. The inventory of breaking stock was down 3.6 percent to 296,600 cases. The relatively small increase in 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 a noteworthy 7.8 percent to 180,600 cases with organic stock comprising 33.3 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 more costly organic eggs. During the past week the retail price of cage-free brown fell 14.6 percent, or 45 cents per dozen to $2.63 per dozen while USDA Certified Organic rose by 6.1 percent or 24 cents per dozen to $4.15 per dozen, widening the price differential to $1.52 per dozen (was $0.83 per dozen last week).  Large week-to-week fluctuations can be expected in the stock of specialty and organic eggs based on the small base of these categories.

According to the latest monthly USDA Cage-free Hen Report for March 6th the number of hens held in other than conventional cages during February was unchanged for organic and increased 3.8 percent for cage-free flocks.:-

Total U.S. flock held for USDA Certified production = 14.1 million   (was 13.5 million, October through January)

Total U.S. flock held for cage-free production            =  24.4 million   (was 23.5 million, October through January)

Total U.S. non-caged flock                                         = 38.5 million (12.4 percent of a nominal 310 million flock but 19.3 percent of a nominal flock of 200 million held for shell-egg production)                                                                                                                     

For the week ending March 11th eggs processed under FSIS inspection decreased 3.0 percent from the previous week to a level of 1,490,677 cases. The proportion of eggs broken by in-line complexes reached 55.7 percent, an increase from 55.4 percent last week. During the corresponding week in 2016 in-line breakers processed 45.9 percent of eggs including imports, denoting the severe mortality affecting approximately eight large in-line complexes affected by HPAI in 2015. 

The price range for breaking stock delivered to Central plants for March 15th increased to a range of 22 to 30 cents per dozen. The price of checks increased to15 to 18 cents per dozen representing a throw-away price well below the average cost of production for nest-run, estimated by the EIC at 60 cents per dozen for January 2016.

   
 

AI Isolated from Wild Ducks in Kentucky

Mar 17, 2017

    

The Kentucky Poultry Federation has reported that isolates obtained during routine surveillance of mallards (Anas platyrhyncos) and American black ducks (Anas rubripes) in Ballard County KY. on March 2nd were confirmed as H7 strain.

The neuraminidase serotype and pathogenicity have yet to be determined. The prevalence rate was not disclosed in the report.

  

The significance of this finding is that migratory waterfowl are carrying avian influenza virus as we move into Spring. Accordingly every effort must be made to rectify deficiencies in structural and operational biosecurity to interdict possible transmission to commercial poultry flocks.

   
 

FEBRUARY 2017 USDA EX-FARM BENCHMARK PRICE DECLINES 22 PERCENT FROM JANUARY, NEGATIVE MARGINS PERSIST.

Mar 17, 2017

    

Introduction.

Comments supplementing the production summary tables for the latest series reflecting USDA February 2017 statistics and prices made available by the EIC on March 13th 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.

February 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 22 percent to 37.7 cents per dozen, compared to January yielding a negative margin of 23.5 cents per dozen as delivered from the laying house. The February 2017 value should be compared to 92.8 cents per dozen for the corresponding month in 2016 and 106 cents per dozen in February 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 February 2017 feed price averaged 33.1 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 23.5 cents per dozen at farm level for flocks in February compared to a negative margin of 12.1 cents per dozen in January. 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.
  • The simple average price of feed for February 2017 over 5-regions was $211.04, 2.3 percent higher than January. The Southeast recorded the highest cost among five regions at $244.59 compared to the lowest region, the Midwest at $180.21 per ton. The average figure includes ingredients plus milling and delivery at approximately $10 per ton. The price of corn was $179.9 per ton in February, up 2.3 percent from January. An increase of 0.9 percent in the price of soybean meal from $361 per ton in January to $364 per ton in February also contributed to the rise in the cost of feed There was a $64 per ton differential in corn price between the Midwest and the Southeast in February. 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 February to be 61.18 cents per dozen, 1.4 percent higher than 60.33 cents per dozen recorded in January. Production costs during February ranged from 55.68 cents per dozen in the Midwest up to 76.86 cents per dozen in California which was higher than the Midwest region by 21.2 cents per dozen. The differential in feed cost between the extremes, the Southeast and the Midwest regions was 10.1 cents per dozen in February.
  • Retail egg prices as determined by the Department of Commerce for January 2017 averaged 159.9 cents per dozen, up by an unjustified 15.6 percent or 22 cents per dozen compared to December 2016. During January 2015 and 2014 retail prices were 232.8 cents per dozen (post HPAI) and 211.2 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 thereby depressing demand.

   
 

Export of Shell Eggs and Products, January 2017.

Mar 17, 2017

    

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

 

U.S. EGG EXPORTS FOR JANUARY 2017 COMPARED WITH THE CORRESPONDING MONTH IN 2016

    PRODUCT

  January 2016  

January 2017

   Difference

Shell Eggs

 

 

 

Volume (m. dozen)

    8.7     

       7.9

 - 0.8      (-9.2%)

Value ($ million)

    9.0

       7.6

 - 1.4      (-15.5%)

Unit Value ($/dozen)

    1.05

     1.09

 +0.04     (+3.8%)       

Egg Products

 

 

 

Volume (metric tons)

   1,221

  3,036

 +1,815   (+148.6%)

Value ($ million)

       3.6

      7.9

    +4.3    (+119.4%)

Unit Value ($/metric ton)

   2,948

  2,611

   -34.7    ( -11.7.%)

 

Source USDA-FAS/USAPEEC

SHELL EGGS

Shell egg exports from the U.S. during January 2017 decreased by 9.2 percent in volume and 15.5 percent in total value. Unit value was higher by 4 cents per dozen for the month-over-month comparison. Hong Kong was the noteworthy importer, with 2.6 million dozen representing 32.9 percent of volume and 36.8 percent of value of U.S. shipments of shell eggs. The UAE was second in rank with 20.2 percent of volume and 17.1 percent of value. Canada was not among the top-ranked importers in January, based mostly on economic factors and self-sufficiency rather than as a result of HPAI embargos, since our neighbor recognizes regionalization.

Following a severe outbreak of H5N6 HPAI South Korea imported 700,000 cases of shell eggs. A high proportion of this volume was air-freighted to satisfy demand prior to the month-end Lunar New Year. Prospects for additional exports to South Korea will depend on whether the Nation will accept regionalization given the HPAI diagnosis in the now depleted flock of broiler breeders in Tennessee and the second case of LPAI in turkeys in an adjoining county in the State. Other considerations will include price, shell color and intensity of yolk pigmentation relative to consumer demand.

EGG PRODUCTS

The total volume of exported egg products during January 2017 increased by 148.6 percent and total value was higher by 119.4 percent compared to January 2016. Unit value decreased by 11.7 percent to $2,611 per ton reflecting the relationship between World supply and demand.

During January, Japan represented 28.5 percent of the total monthly export volume with 865 m. tons possibly due to the losses experienced from H5N6 HPAI. Mexico increased volume in January by 416 percent and value by 300 percent compared to imports from the U.S. in January 2016. During January the EU imported 320 m. tons of egg products due to shortages occasioned by H5N8 HPAI. Restoration of normal supply relative to demand now prevails in the U.S.as the flocks of in-line breakers and their suppliers have been completely repopulated.

COMMENT

Prospects for future short-term exports of shell eggs will be limited by the willingness of importers to accept the OIE principle of regionalization. This concern follows the recent cases of North American lineage H7N9 HPAI in a flock of broiler breeders (rapidly depopulated without spread) followed by LPAI in turkeys, also in Tennessee Most importing nations, with the noted exception of China are now applying regionalization and permitting imports on a nationwide or state-exclusion basis following H5 or H7 AI infection. Generally pasteurized egg products should not be subject to embargos imposed following reports of AI.

   
 

Weis Markets to Open Up-Market Pennsylvania Store

Mar 17, 2017

    

Weis Markets will open a new prototype store in Enola, PA near Harrisburg in late March.

The concept referred to as a “Community Market” will extend over 65,000 ft2 and will include an in-store bar and ice-cream parlor, juice bar and food court.  Accord to CEO Jonathan Weis, the store was designed to take service to the next level to combat deep discount stores such as Aldi and high-volume competitors including Giant-Carlisle, Wegmans and Walmart.

  

Weis stated, “We want to be interesting, not boring or dull. We just have a philosophy that we're not going to be afraid to fail.”

   
 

AFIA Holds PISC Conference

Mar 17, 2017

    

The American Feed Industry Association reported record attendance at the March 7-9 Purchasing and Ingredients Supplier Conference (PISC) held in Orlando, FL.  A total registration amounted to 641 attendees. 

Highlights included Challenges in Feeding a Growing Population by Dr. Kevin Folta, Chairman of the Horticultural Sciences Department at the University of Florida. A review of aspects of marketing was presented by Teri Yanovitch, a Disney Institute speaker.

  

The 2018 PISC will be held in Fort Worth, TX on March 13-15.

   
 

HPAI Continues in South Korea

Mar 17, 2017

    

Authorities in South Korea reported on depletion of a flock of 50,000 laying hens located on a farm near Seoul.  This case involved H5N6 HPAI.  The farm was depleted and decontaminated using personnel and resources supplied by the military. 

It is a matter of record that as many as 30 million laying hens have been depleted in Korea since the advent of HPAI in late 2015. 

  

Concurrently a single case of H5N8 avian influenza was diagnosed on a duck farm in the southwest quadrant of South Korea.

South Korean soldiers wearing protective gear clean a poultry farm
where an outbreak of the bird flu virus was discovered,
in Yangju, South Korea on March 8, 2017. REUTERS

   
 

Value in Reducing Food Waste

Mar 17, 2017

    

A research study conducted by Champions 12.3 determined that for every $1 invested to reduce food loss and waste resulted in a savings of $14 in operating costs.  In a report entitled The Business Case for Reducing Food Loss and Waste reported in the March 8th edition of the Institute of Food Technologists newsletter, 12,000 sites involving 700 companies in 17 nations were surveyed.

  

Investment to reduce wastage included quantifying and monitoring food loss, training staff to reduce waste, upgrading food storage and handling and modifying packaging to extend shelf life.  David Lewis, group chief executive of UK supermarket chain Tesco and Chair of Champions 12.3 noted “What this research shows is that there is now no social, environmental or economic reason why we should not come together to take action to reduce food waste.”

Positive improvements were achieved in UK households following introduction of a “love food- hate waste” campaign.

   
 

Kroger to Establish Northern Kentucky Distribution Center

Mar 17, 2017

    

According to a March 7th item by Alexander Coolidge in the Cincinnati Enquirer, Kroger Company will invest $60 million in a new distribution center to serve the Eastern half of the U.S. 

The town of Florence in Boone County, KY. was selected for the 675,000 ft2 facility which will employ 100 workers.

  

Frank Bruni, Kroger VP of Supply Chain and Logistics stated “The new facility will help our logistics team to improve lead times and drive efficiencies for our stores and ultimately our customers.”

   
 

APPROVAL AND CONFIRMATION OF NOMINEE DR. SONNY PERDUE PROGRESSES

Mar 17, 2017

    

Press reports indicate that Dr. Sonny Perdue has completed documentation for review by the Senate in anticipation of his confirmation hearing. 

Perdue has placed his assets in a blind trust and has resigned from industry associations with which he has been connected through his grain business.

  

   
 

USDA - WASDE FORECAST #563, March 9th 2016

Mar 15, 2017

    

Overview

The March 9th 2017 USDA WASDE projections for the 2016/7 corn and soybean crops reflected actual harvest data. Areas for corn and soybeans were unchanged at 86.7 million and 82.7 million acres respectively.

The USDA retained corn and soybean yields to 174.6 bushels per acre and 52.1 bushels per acre.

 

Ending stocks for corn and soybeans were projected at 2,320 million bushels (down 1.4 percent) and for soybeans 435 million bushels (up 3.5 percent) compared to the data in the February WASDE.

--- Click the (More) button below to read the full news report.

   
 

USDA HAS LIMITED AI INDEMNITY FUNDS

Mar 15, 2017

    

According to Reuters, the USDA has approximately $85 million in reserve for indemnity and control of outbreaks of HPAI. 

Congress authorized $1 billion for the 2015 H5N2 epornitic which incurred over $600 million (depletion and disposal of flocks by contractors) and $200 million for indemnity.

If an extensive outbreak were to occur, USDA would have to request additional funds from Congress. 

This procedure would be complicated by the fact that there is no Secretary of Agriculture in office, given the delays in nominating and confirming Dr. Sonny Perdue.

  

Sonny Perdue

   
 

CDC INVESTIGATING LISTERIA OUTBREAK

Mar 15, 2017

    

A multi-state outbreak of listeriosis is under investigation by the CDC with soft raw-milk cheese as the implicated vehicle.  Patrons have been hospitalized in Connecticut, Florida, New York and Vermont with two fatalities to date.

Outbreaks of listeriosis, salmonellosis and colibacilosis occurred with disproportionate incidence rates following consumption of raw milk or dairy products manufactured using non-pasteurized milk. 

  

It is enigmatic that advocates of raw milk consumption are still actively opposing laws which limit distribution of raw milk, perpetuating potential milk-borne outbreaks.  Supplying raw milk to children is effectively a form of abuse.

   
 

ALLTECH PROMOTED ALTERNATIVES TO ANTIBIOTICS AT THE MIDWEST POULTRY FEDERATION CONVENTION

Mar 15, 2017

    

Nutritionists and specialists reviewed alternatives to antibiotics based on consumer demand and following the introduction of the Veterinary Feed Directive. 

The Alltech Gut Health Management Program includes the application of natural products to establish and sustain a viable and productive microbiome.

  

   
 

USDA Weekly Egg Price and Inventory Report, March 8th 2017

Mar 10, 2017

    

OVERVIEW

According to the USDA Egg Market News Report (Vol.64: No. 10) posted on March 6th Midwest-wholesale prices for Extra Large and Large remained stable this past week representing the lowest values in 2017. 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 Report documented a USDA Combined Region value of $0.56 per dozen delivered to warehouses. This price lags Midwest Weekly values by one week, and is compared to a trailing 16-month peak price of $2.20 per dozen in late November 2015.  The USDA Combined range for Large, in the Midwest was $0.50 per dozen. At the high end of the range, the price in the South Central Region, attained $0.59 per dozen. The current USDA Combined Price was approximately 70 cents per dozen below the 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 all eggs.

Hen numbers this week remained at a relatively stable but high level relative to demand attaining approximately 313.4 million in production. Hens in lay increased from 303 million in early December 2016. For the past week the number of hens increased by 0.1 million. The total egg-flock comprises 320.5 million including hens in molt and small flocks. Generic shell-egg stock decreased by 3.2 percent demonstrating an improvement in the ongoing imbalance 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 36.9 million pounds on January 31st.