Editorial
Bovine Influenza in Central Valley, CA. Associated with Elevated Cow Mortality
|
Unlike cases of bovine influenza in Texas, Colorado and eleven other states, mortality among affected herds in the Central Valley of California has assumed concerning proportions. To date, over 120 herds have been diagnosed with H5N1 B3.13 strain with some operations recording 15-20 percent mortality compared to less than five percent in other states collectively recording 210 cases to date. Although ambient heat has been implicated as a stress factor contributing to mortality, it is noted that temperatures in the Central Valley frequently exceed 100F without resulting in an appreciable elevation in losses.
Rendering companies are overwhelmed and carcasses have been stacked in the open in areas close to herds adding to the risk of contamination of soil followed by dispersal by wind, carrion birds or mammalian vermin.
It is of extreme urgency that the whole genome sequence of isolates associated with high mortality in cows should be analyzed to determine if there has been a shift in pathogenicity to animals and humans due to mutation.
It is noted that eleven dairy herd workers have been diagnosed with H5N1v influenza. Epidemiologic studies should be conducted to determine risk factors other than those that are currently recognized and to determine whether appropriate PPE was issued and used by those who were infected. Surveillance to ascertain whether domestic contacts of those affected yielded H5N1v virus on PCR appears necessary to determine whether the virus has become contagious among humans. It is also necessary to conduct serologic surveys on workers and their immediate contacts for individuals known to have been infected based on clinical symptoms or PCR assay as compared to those who were unaffected. On Tuesday 20th October health officials in Washington state reported five workers with conjunctivitis and respiratory symptoms associated with the affected farm in Franklin County. Whether these individuals were infected as part of their routine flock duties or were part of a depopulation team has not been announced but it is anticipated that information will be made available to the WHO after samples have been collected and expeditiously analyzed.
In the interim, it is presumed that the California Department of Food and Agriculture is actively following a program of surveillance in order that affected herds can be quarantined as far as possible. It is hoped that epidemiologic studies in progress will identify risk factors and vehicles of transmission.
The occurrence of cases of H5N1v infection in farm workers in contact with dairy herds and infected egg-production flocks requires more follow up. Assay for H5N1 antibody among potentially exposed but unaffected individuals will be required. Determining how and when individuals were infected, duration of shedding virus from the respiratory tract requires structured investigation both at the field and molecular levels.
Despite the USDA/CDC contention that H5N1 strain B3.13 responsible for bovine influenza does not represent a risk for human population in affected areas, more transparency by public agencies would be reassuring.
|
Egg Industry News
Egg Week
|
USDA Weekly Egg Price and Inventory Report, October 23rd 2024.
Market Overview
- The average wholesale unit revenue values for Midwest Extra-large and Large sizes were up 36.1 percent on average this past week. Medium size was up 35.9 percent. The 5-day rolling National wholesale price for graded loose on October 21st was $2.66 per dozen up 16.2 percent from $2.29 last week. This value was approximately $1.36 above the 3-year average of $1.30 per dozen and up $1.81 from the corresponding week in 2023 at $0.85 per dozen. This past week shell egg inventory was up 5.9 percent, more than reversing the drop of 3.8 percent during the previous week. During the past week the NYC wholesale price increased sharply after a market plateau with the immediate prospect of increases in coming weeks. The rise in inventory with an escalation in wholesale price denotes higher demand relative to supply predicting higher margins for producers through the 4th quarter despite replacement of depleted flocks. The rise in inventory may be a reflection of chains withholding orders. Relatively higher prices compared to 2023 are attributed to previous losses due to HPAI in 2024 reducing the national flock by 17 to 19 million hens with increased seasonal demand.
- Although there are predetermined weekly transfers of mature pullet flocks to laying houses, the size of the producing flock is constrained by depopulation due to HPAI. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May and 3.0 million in July. With 2.6 million hens depopulated in August, as the first incident cases of the fall 2024 wave there is currently a deficit of 17 to19 million hens compared to the 2022 flock of 326 million at the onset of HPAI.
- This past week, chains apparently widened the spread between delivered cost and shelf price. The reoccurrence of HPAI has probably created concern among chain buyers resulting in orders to ensure adequate stock levels to meet demand. Inventory levels will depend on constant re-ordering to fill the pipeline into November. Discounters are raising prices on generics influencing mainstream retail stores. Eggs are less competitive in price against the comparable costs for other protein foods, and have recently been highlighted as a contributor to the prevailing perception among consumers of ongoing food inflation.
- Total industry inventory was up by 3.8 percent overall this past week at 1.58 million cases with a concurrent 4.2 percent decrease in breaking stock, following a 4.2 percent fall during the preceding week attributed to diversion to the shell-egg market.
- It is apparent that the inventory held by chains and other significant distributors may be more important on a weekly basis in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to three percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
- The U.S. poultry industry has moved from a quiescent period regarding HPAI over the past week with incident cases in northern Utah and southern Washington State in mid October. Tulare County California recorded an outbreak on a broiler-growing farm with 900,000 birds. Over 333 confirmed cases of bovine influenza-H5N1 have been diagnosed in dairy herds in fourteen states with more than 123 herds California. This is a cause for concern since spill-over to laying flocks occurred in Michigan and Colorado. More surveillance information should be released by USDA-APHIS as it becomes available, concerning the prevalence rate of avian carriers of H5N1 among resident domestic and migratory free-living birds. This data should be correlated with a review of molecular and field epidemiology for the past spring outbreaks in order to respond appropriately to the fall wave of HPAI that appears to have commenced. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances as suggested by current research.
- The established relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past three years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
- On October 23rd the stated total flock of 313.5 million, was up by 4.1 million from last week, including about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production before the pre-Christmas surge in demand. Given the latest figures for depopulation in Utah and Washington State it is estimated that the total flock is approximately 17 to 19 million hens lower than the 326 million before the onset of HPAI in 2022.
- The ex-farm price for breaking stock (rounded to one cent) was up a substantial 32.2 percent to $2.03 per dozen.Checks delivered to Midwest plants were up a noteworthy 25.0 percent to $1.85 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs but with a lag of one to two weeks that may be shorter as in the present situation with an upward swing in price.
The Week in Review
Prices
According to the USDA Egg Market News Reports, released on October 21st 2024, the Midwest wholesale price (rounded to one cent) for Extra-large was up 35.9 percent from last week to $2.96 per dozen. Large size was up 36.2 percent to $2.94 per dozen. Mediums were up 35.9 percent to $2.69 per dozen delivered to DCs. It is emphasized that these prices are for the previous week.
The stock of Medium size was up 0.7 percent down by 4.2 percent and the inventory of Small size was up by 19.0 percent over the past week suggesting pullet flocks placed for the November-December surge in demand have matured but with additional younger pullets entering production. This has implications for prices during early November.
Prices should be compared to the USDA benchmark average 4-Region blended nest-run cost of 74.6 cents per dozen as determined by the Egg Industry Center based on USDA data for September 2024. This value excludes provisions for packing, packaging materials and transport, amounting to 57 cents per dozen as determined in mid-2023 from an EIC survey (with a low response) and now realistically 60 cents per dozen.
Currently producers of generic shell eggs should be operating with strong positive margins irrespective of region and customer-supply agreements. The progression of prices for loose eggs during 2023 and 2024 to date is depicted in the USDA chart reflecting three years of data, updated weekly.
The October 18th edition of the USDA Egg Markets Overview confirmed that the USDA Combined Region value in cartons (rounded to the nearest cent), was up 13 cents per dozen (+6.1 percent) to $2.25 per dozen delivered to warehouses one week ago. The USDA Combined range for Large in the Midwest was $2.16 per dozen. At the high end of the range, the price in the South Central region attained $2.32 per dozen.
Flock Size
The loss of 17.3 million hens from April through July 2024 should now be reflected in the most recent weekly data. The loss of approximately 2.6 million laying hens in Utah and Washington State in mid-October may not be reflected in U.S. flock size. Any delay in posting accurate and updated data, during fall outbreaks, should be avoided given the importance of weekly flock numbers in pricing. Accurate and current values for both the producing and total flocks are required by farmers, packers, breakers and buyers.
According to the USDA the number of producing hens reflecting October 23rd 2024 (rounded to 0.1 million) was up 3.1 million to 306.9 million suggesting that the rate of routine flock depletion is lower than the replenishment of flocks through molting and transfer of started pullets. The total U.S. flock includes about one million molted hens due to return to production Approximately 4.5 to 5.0 million pullets on average reach maturity each week, based on USDA monthly chick-hatch data for 20-weeks previously. The increase is offset by routine flock depletion and an additional loss of approximately 17 million hens due to HPAI through July and 2.6 million in October.. Many flocks have been replaced on a rotational basis and routine flock depletion is delayed subject to availability of housing. Based on inventory level and prices, the population of hens producing table eggs and breaking stock should now be less than mid-October demand by consumers. Industrial and food service off-take is stable, attaining pre-COVID levels. Prices for shell eggs declined in August establishing a plateau in late September followed by a progressive rise through October to high seasonal levels before the anticipated post-Halloween increase.
|
Egg Projection October 2024
|
Updated October 2024 USDA Projection for U.S. Egg Production and Consumption.
On October 18th 2024 the USDA Economic Research Service (ERS) issued actual values for egg production during 2023 with a projection for 2024 and a forecast for 2025. Production, consumption and prices were revised from the previous August 16th 2024 report.
Projected egg production for 2024 was adjusted downward from the September 2024 Report to 7,786 million dozen This will be 1.0 percent less than in 2023 due to progressive depletion of hen flocks due to HPAI through July with incident cases reoccurring in October. The per capita consumption of shell eggs and liquids combined for 2024 will be 274.1 eggs down 5.2 eggs (-1.9 percent) from 2023. The projected average 2024 benchmark New York bulk unit price was raised 78 cents to 270 cents per dozen.
Subsequent USDA projections will provide greater clarity on the recovery in consumption in an economy that is undergoing deflation. The 2023 Midwest in-carton national wholesale price peaked at $5.17 per dozen on January 3rd 2023 but fell precipitously to a market bottom of $0.78 per dozen on May 8th 2023. Midwest Large wholesale price was restored during May 2024 and despite substantial declines during late August through September attained $2.16 per dozen for eggs in cartons delivered to DCs on October 18th 2024. The Midwest wholesale Large value should be compared to the USDA/EIC projection of the combined nest-run July 2024 cost of 75 cents per dozen for caged white Large, plus a provision for processing, packaging and transport of 60 cents per dozen amounting to $1.35 cents per dozen.
Restoration in flock size after HPAI flock depletions in 2022 progressed at a rate of approximately 0.5 million per week but placements were limited by the availability of pullet chicks and in some companies the rate of conversion to alternative housing systems. Restoration of the national flock was compromised by a resurgence of HPAI with 13.0 million layers depleted during the 4th quarter of 2023 representing 4.0 percent of the nominal producing flock of 326 million hens, mainly on complexes averaging over one million hens. Unpredictable factors affecting price will include the extent of anticipated losses during the fall migratory season that to date has claimed two complexes with a total of 2.6 million birds. Approximately 19 million hens were lost to HPAI year-to-date in four states. At present the national egg-producing flock is down by 18 to 20 million hens compared to the complement of 326 million at the beginning of the 2022 epornitic.
Exports of eggs and products at approximately 2.4 percent of total production over the first half of 2024 did not materially affect the domestic price.
The USDA forecast for 2025 includes production of 8,125 million dozen, up an optimistic 4.5 percent from 2024. Projected consumption of 286 eggs per capita, would be a speculative 12 egg (4.4 percent) increase over 2024 This forecast probably presumes complete control of HPAI and an adequate supply of replacement chicks and pullets, both unrealistic assumptions. The increase, if it were to transpire would depress the NY Large benchmark price to $1.88 per dozen.
During 2023 shell egg exports attained 89.4 million dozen, up 28.6 percent compared to 2022 when high domestic prices prevailed. Egg products were up 18.2 percent to 20,814 metric tons compared to 2022.
Over the first seven months of 2024, 53.2 million dozen shell eggs were exported valued at $117.3 million. Volume was 10.1 percent lower and value was 5.1 percent higher compared to the corresponding months in 2023.
Over the seven months of 2024, 17,730 metric tons of egg products were exported valued at $78.7 million. Volume and value were respectively 16.5 and 13.0 percent lower compared with the corresponding months in 2023.
Updated October 2024 USDA data is shown in the table below:-
Parameter
|
2021
(actual)
|
2022*
(actual)
|
2023
(actual)
|
2024*
(projection)
|
2025
(forecast)
|
% Difference
2023-2024
|
|
|
|
|
|
|
|
Production (million dozen)
|
8,031
|
7,825
|
7,864
|
7,786
|
8,125
|
-1.0
|
Consumption (eggs per capita)
|
282.5
|
280.5
|
279.3
|
274.1
|
286.0
|
-1.9
|
New York price (c/doz.)
|
119
|
282
|
192
|
270
|
188
|
+40.6
|
*Data influenced by HPAI losses. Recovery in 2025 considered unrealistic
Source: Livestock, Dairy and Poultry Outlook released October 18th 2024
Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices, exports and related industry statistics.
|
Commodity Report
|
WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: October 24th 2024.
OVERVIEW
The prices for corn and soybeans were appreciably higher over the past week reversing declines. Soybeans were up 2.6 and corn up 4.5 percent. Corn and soybean prices were influenced by uncertainty over yields in Brazil and Argentine. There was minimal response to the October WASDE Report. Farmers were selling both old and new crop to avoid further declines and to make room for the approaching 2024 harvest continuing in strength this week. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in Brazil and Argentine. Contributory pricing factors included ongoing disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans from the 2024 crop. Two thirds of the 2024 corn crop is “in the bin”. Concurrently 80 percent of the soybean crop has been harvested, in advance of the five-year average and apparently with superior crop condition compared to 2023. The transition from a neutral phase to a La Nina event has commenced and will intensify during the fourth quarter but will not affect the 2024 harvest. The October WASDE, incorporating the September remote USDA Survey together with the Pro Farmer August field evaluations provided updated projections of yields, with USDA updates for anticipated exports and adjusted prices for the 2024 crop.
At 12H00 EDT on October 24th the CME corn quotation for December delivery was up 4.5 percent to 422 cents per bushel. Corn price was influenced by acreage planted, ethanol demand and the ending stock from the 2023 crop. Farm selling has increased, given the need to make room for the new crop. USDA estimated that 44 percent of old corn stock was held on farms at the beginning of September. Export orders for the current market year have increased in response to lower prices. Volumes and price are indirectly influenced by wheat availability as influenced by weather affecting the Black Sea wheat and corn crops and events in the Red Sea. Orders by China resumed at the end of the 2022-2023 market-year and continued through August, despite an increase in the Dollar Index, adding to increased ocean freight. Total exports for the new 2024-2025 market year are 33.0 percent above the first six weeks of the 2023-2024 year.
Soybeans were priced at 1,003 cents per bushel for November 2024 delivery, rising above the 1,000-cent psychological threshold. Price was up 2.6 percent compared to 978 cents per bushel last week for November delivery. Higher prices were attributed to the projection of ending stock, despite farm selling and taking into account recent export orders and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the 2024-2025 market year are 1.4 percent higher than for the corresponding first six weeks of market year 2023-2024.
Soybean meal was priced at $312 per ton for December delivery, down $5 per ton (-2.3 percent) from last week. Price is influenced by demand coupled with a reestablished crush volume in September restoring the processing trend during the first half of 2024. Price will fluctuate to reflect the CME price for soybeans and the depressed demand for biodiesel due to oversupply and the consequential adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the revised October WASDE Reports updated from September.
On October 23rd at 15H00 EDT the price for WTI was $71.02 up $0.78, (+1.1 percent) from last week. The current price now reflects from recovery from Hurricane Milton. Current price is not materially affected by uncertainties and tensions in the Middle East but excluding possible retaliatory action as announced by Israel on Iranian oil installations. Over the longer term price reflects moderate world demand for crude as economies and especially that of China have retracted requiring central bank stimulation in late August. It is evident that U.S. production is a moderating influence on World price, attaining a record average of 13.4 million barrels per day in July with ample reserves. There was fluctuation in the price of WTI through October 27th with the range during the week extending from $71.93 on October 22nd down to $68.05 on October 18th.
Ample U.S. crude production is constraining domestic and international prices. The recent decline in energy costs during the past two months contributed to deflation influencing the FOMC in their decision to lower the benchmark interest rate at the September meeting.
Economic data released during the past quarter (Q2 GDP; PCE, Confidence, Productivity, Employment) confirm a growing economy but with a downward trajectory in inflation. Second Quarter GDP was revised upward to 3.0 percent from the previous projection of 2.8 percent. The data-driven Federal Reserve FOMC lowered the benchmark interest rate by 50 basis points on September 18th. Federal Reserve Chair Jerome Powell and Reserve Bank Governors indicated one or two additional reductions in the 10-year rate during 2024. The August and September Non-farm Payrolls and labor data clearly indicated the danger of prolonging the high benchmark interest rate that was negatively impacting the U.S. economy.
Macroeconomic U.S. factors:-
- Most economists in academia and the private sector are still confident of a “soft landing” for the economy despite the release of the Q2 2024 increase in GDP to 3.0 percent and coupled with recent economic parameters including the ECI, CPI and PPI. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 2.5 percent in August 2024. This is in part a response to a series of 11 FOMC rate raises followed by eight pauses that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Lower energy prices are contributing to deflation.
- The Federal Reserve lowered the benchmark interest rate by 0.5 percent at the monthly FOMC meeting on September 18th, the first of a series of actions after eighth sequential pauses. The Federal Reserve commentary indicated that progress has been made in reducing the rate of inflation with subsequent reductions of 25 basis points at the two remaining meetings in 2024 and extending into 2025. Chairman Powell in Congressional testimony, and at the post-meeting press conference and also documented in FOMC minutes indicated that decisions would be based on demonstrated progress in reducing inflation as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025. This now appears feasible.
- The September 26th release by the Bureau of Economic Affairs documented the third estimate of Q2 2024 GDP of 3.0 percent unchanged from the previous estimate but above the Q1 value of 1.4 percent. The latest estimate of the Q2 GDP was influenced by higher consumer spending.
- The October 10th release of the Consumer Price Index (CPI) for September showed a 0.2 percent rise over August and an annual rise of 2.4 percent. The monthly value is compared to an anticipated 0.1 percent. Core CPI (excluding food and fuel) was up 0.3 percent in September with an annual increase of 3.3 percent. Food increased 0.4 percent with eggs highlighted at 8.4 percent and chicken up 0.7 percent. For September shelter was up 0.2 percent. Notwithstanding the unexpected increase in CPI during September additional reductions in benchmark interest rates are anticipated during this quarter.
- On September 27th the Bureau of Economic Analysis released the September Personal Consumption and Expenditure Price Index. The core PCE (excluding food and energy) was up 0.1 percent from the previous month, below a 0.2 percent estimate and attained 2.7 percent year-over-year and compared to a consensus of 2.3 percent. The Headline PCE was up 0.1 percent from August and 2.2 percent from August 2023. Food was up 0.1 percent from August and 1.1 percent from August 2023.. The headline PCE is closely followed by the Federal Reserve and confirms that inflation is progressively moderating but still above an annual target of 2.0 percent.
- The September Producer Price Index for Final Demand (PPI) released on October 11th was unchanged from August against an expectation of a 0.2 percent rise. This was attributed in part to a 0.2 percent increase in services and a 1.0 percent increase in food. The PPI was up 1.8 percent over the past 12-months ending in September compared with 1.9 percent for the 12-month period through August. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.2 percent from August and 2.8 percent over the previous 12 months.
- A Federal Reserve release on September 17th confirmed that industrial production was higher by 0.9 percent in August compared to a decrease of 0.6 percent in July. Capacity utilization was higher at 77.2 percent and 1.1 percent below the long run 1972-2020 average.
- The October 7th report by the Department of Commerce, Census Bureau on Durable Goods Ordered during September 2024 increased by 0.2 from August and 12.1 percent year-to-date, following a 0.6 percent decline during August. Excluding the Transportation component, new orders in September increased by 1.7 percent compared to an increase of 2.8 percent in August. Shipments of durable goods in the non-defense category were down 0.9 percent in September from the previous month ultimately to be reflected in the quarterly GDP.
- In an October 3rd release the Census Bureau confirmed that factory orders for U.S. manufactured goods fell 0.2 percent in August against an estimate of no change and compared to a revised rise of 4.9 percent in July.
- The October 15thS. Census Bureau release of the advanced estimate of retail and food sales data for September was up 1.5 percent from the revised August value and up 7.7 percent over 12 months. Food service sales were up 0.7 percent from August and up 9.4 percent over 12 months. Grocery store sales were down 0.6 percent from the revised July value and up 4.0 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
- The October 1st release by the Institute for Supply Management (ISM®) reported an unchanged Manufacturing Index for September at 47.2 against an expected value of 47.5. The September value was still below the bifurcation point of 50 percent between contraction and expansion. The Prices Index fell by 5.7 points to 49.8 in September, denoting lower costs for production. U.S manufacturing does not currently reflect an improved economy, and manufacturing has yet to recover from prolonged high benchmark interest rates. The Production Index for September was up 5.0 points from 44.8 in August to 49.8 in September.
- On July 31st the U.S. Bureau of Labor Statistics reported a 0.9 percent increase in the Employment Cost Index (ECI) over the 2nd quarter of 2024 against a consensus estimate of 1.0 percent. The year-over-year increase was 4.1 percent and with benefit costs up by 3.8 percent. The July ECI of 0.9 percent compares with a value of 0.9 percent for the 4th quarter of 2023. The ECI is closely followed by the Federal Reserve FOMC and this data justified in part the 50 basis point drop in the benchmark interest rate in September and strengthens the possibility of additional rate cuts in the 4th quarter as suggested by Federal Reserve Chairman Powell.
- The September 24th Consumer Confidence report prepared by The Conference Board for the period ending September 17th, confirmed a substantial decrease to 98.7 from the revised August value of 105.6, with all segments down, representing the largest decline since September 2021. The Present Situation Index measuring perceptions of current business conditions fell to 124.3 from 133.4 in August. The Expectations Index fell from a revised August value of 86.3 to 81.7 but the third consecutive month above 80. Values below this threshold over consecutive months and with a downward trajectory are regarded as predictive of a recession.
- The October 11th University of Michigan Index of Consumer Sentiment for October fell to 68.9 from a revised September value of 70.1. The Current Economic Index was 62.7 in October down from 63.3 in September. The Index of Consumer Expectations was 72.9 down from 74.4 in September, denoting deterioration in consumer sentiment despite the September rate cut and lower inflation. Geopolitical factors and uncertainty over the upcoming election have adversely influenced sentiment. In perspective sentiment is up 8 percent above September 2023 and 40 percent above the low in June 2022.
- Non-farm payrolls added an unanticipated high 254,000 in September, as documented by the Bureau of Labor Statistics in an October 4th This was higher than the anticipated 140,000, and should be compared to the upwardly revised August value of 159,000.. The unemployment rate fell to 4.1 from 4.2 percent with 6.8 million unemployed and with 1.6 million in the long-term category. Real average hourly earnings during September showed a 0.4 percent increase over August to $35.36. Average hours worked in manufacturing declined fractionally to 33.7 hours per week. Labor participation was unchanged at 62.7 percent from August. Wage rates increased 4.0 percent over 12-months. Wage rates are closely followed by the Federal Reserve FOMC.
- The August 21st preliminary revision of job growth by the Bureau of Labor Statistics based on state data suggested that 818,000 fewer jobs were actually created from April 2023 through March 2024 than previously estimated. The discrepancy represented an apparent overstatement of 68,00 new jobs per month on average. Less than half of the overestimate was in the Professional and Business category (358,000); Leisure and Hospitality, (150,000) and Manufacturing (115,000). The preliminary revision that has mainly political implications should increase the magnitude of the reduction in benchmark rate at the September FOMC Meeting.
- The Bureau of Labor Statistics Job Openings and Labor Survey report (“JOLTS) released on October 1st estimated 8.04 million job openings at the end of August unexpectedly above a forecast of 7.68 million and higher than the revised July value of 7.71. The August job openings number should be compared with August 2023 at 7.51 million and the peak March 2022 value of 12.2 million job openings during COVID. The hiring rate was 3.3 percent (5.3 million hires); the August total separation rate, 3.1 percent (5.0 million); the quit rate 1.9 percent (3.1 million); and the layoff rate 1.0 percent, (1.6 million).
- The seasonally adjusted initial jobless claims figure of 227,000 released on October 24th for the week ending October 19th was down by an unexpected 15,000 from the revised value of 242,000 for the previous week. The weekly value was lower than the Reuters estimate of 243,000. The four-week moving average rose to 238,50. The Bureau of Labor Statistics estimated 1.897 million continuing claims for the week ending October 5th (up 9,000 from the revised value for last week), compared to a peak on November 27th 2021 at 1.928 million. The September unemployment rate fell to 4.1 percent. There is clear evidence from data over the past three months that the labor market is cooling as confirmed by Chairman Powell in Congressional testimony and release of downward revised figures for job creation. The jobs market is still tight, but with sporadic weekly fluctuation in new claims due to weather, strikes or scheduled plant shutdowns. Reports in future weeks will be distorted by the effects of Hurricanes Helene and Milton and the strike by Boeing machinists.
- The September 5th Bureau of Labor Statistics report recorded a 2.5 percent increase in non-Farm Productivity for Q2 2024 up from 0.4 percent in Q1 2024. Labor cost increased by 0.9 percent compared to 4.0 percent for Q1 2024. Output was up by 3.5 percent and hours worked were 1.0 percent higher.
- The ADP® reported on October 2nd that private (excluding government data) payrolls increased by 143,000 in September, up 40,000 from the revised 103,000 in August and compared to the Dow Jones estimate of 120,500 jobs. The increase in employment was mostly in the Transportation, Trade and Utilities sector, (+14,000); Construction, (+26,000); Hospitality, (43,000); and Professional and Business Services, (+20,000); Professional and Business Services, (+16,000). The Information sector was down (-10,000). Annual pay was up 4.7 percent year-over-year for ‘job-stayers’, down 0.1 percent from August 2023. The increase as reported by ADP will not directly influence the probability of short-term future changes in interest rate since the number, although based on 25 million positions, excludes the public sector. Monthly ADP data is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report.
|
Crop Progress
|
Status of 2024 Corn and Soybean Crops
The USDA Crop Progress Report released on October 21st recorded 81 percent of the soybean crop harvested, an advance of 14 percent this past week. Ninety eight percent of the corn crop has has been harvested, up 18 percent from last week. Both crops were ahead of the 5-year averages for the corresponding week.
Consistent with seasonal temperatures and previous rainfall across the Midwest and Plains states, crop condition was assumed to be unchanged during the past week. USDA did not release data on the condition of the soybean and corn crops this past week. Prospects for high corn and soybean yields were reflected in lower price projections in the October WASDE and CME futures prices for November and December (‘new crop’) delivery.
Heat stress that occurred previously during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the immediate pre-harvest period for corn will also contribute to the elaboration of mycotoxins. The status of the 2024 crop will require monitoring at harvest in affected areas and especially if unseasonal precipitation occurs during the late harvest period.
Reference is made to the September 13th WASDE Report #652 and the weekly Commodity, Economy and Energy Report, both in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks.
The October WASDE presumably incorporated the results of the USDA-NASS annual remote survey on yields and final production. Pro Farmer completed their annual crop tour in mid-August. The August 23rd report estimated U.S. corn yield at 181.1 bushels per acre (compared to the Pro Farma estimate of 183.8 bushels per acre) with a projected crop of 14.98 billion bushels. (15.20 billion bushels). The corresponding values for soybeans were a yield of 54.9 bushels per acre (53.1 bushels per acre) contributing to a 2024 crop of 4.74 billion bushels. (4.93 billion bushels).
EGG-NEWS will report on the harvest of the two major crops as monitored by the USDA through the end of the 2024 season in two weeks.
|
WEEK ENDING |
|
Corn Status (18 states) *
|
October 6th
|
October 13th
|
5-Year Average
|
Corn Dented (%) |
100 |
100 |
100 |
Corn Mature (%) |
75 |
87 |
81 |
Corn Harvested (%)
|
21
|
30
|
27
|
Soybean Status (18 states) |
|
|
|
Soybeans Setting Pods (%) |
100
|
100
|
100
|
Dropping Leaves (%) |
81 |
90 |
85 |
Soybeans Harvested |
26 |
47 |
35 |
*Representing an average of 95% of U.S. 2024 acreage planted |
|
|
|
|
|
|
Crop Condition
|
V. Poor |
Poor
|
Fair
|
Good |
Excellent |
Corn 2024 (%)
|
4 |
8 |
24 |
49 |
15 |
Corn 2023 (%) |
6 |
12 |
29 |
43 |
10 |
|
|
|
|
|
|
|
|
|
|
|
|
Extensive SE Outbreak in the Netherlands Traced to Specific Farms
|
Public Health Authorities in the Netherlands have investigated an ongoing outbreak of Salmonella Enteritidis (SE) since September 2023. To date there have been 171 laboratory-confirmed cases with the presumption that the real incidence exceeds this figure by a factor of 10 to 20.
Whole genome sequencing on SE isolates from patients demonstrated two separate clusters, one associated with floor housed flocks and the other from hens with outside access. Salmonella Enteritidis isolated from 14 laying farms could be corelated with isolates obtained from patients.
Investigation disclosed a problem of recycling eggshell that was improperly heat treated before inclusion into feed as a mineral supplement thereby perpetuating infection.
Salmonella infection should be identified proactively in flocks and not in patients. A mandatory monitoring system such as the FDA Final Rule or state EQAPs or those imposed by individual companies are required. It is difficult to understand how in an industrialized nation such as the Netherlands a prolonged SE outbreak could persist without appropriate diagnostic and corrective action to protect consumers. It is hoped that investigators involved will publish on the epidemiology of the extended outbreak.
|
Protective Tariffs Will Impact U.S. Agricultural Exports
|
A study conducted by the World Agricultural Economic and Environmental Services commissioned by the American Soybean Association and the National Corn Growers Association predicts dire consequences from imposing punitive tariffs on imports from China. The topic is currently front and center in the Presidential campaign.
Economists responsible for the report calculated that in the event of high tariffs imposed on China, exports to that nation would decline by 52 percent from baseline levels for soybeans and 84 percent for corn. Brazil and Argentine have the capacity to compensate for the shift from the U.S. and it would not be possible to find new markets to offset the loss to China. A steep drop in exports would reduce prices to farmers resulting in negative outcomes for rural areas.
There are two sides to every coin. Lower corn and soybean prices would be reflected in reduced costs of production for eggs and poultry meat, benefiting producers and integrators and if passed on to consumers would increase domestic consumption.
|
2025 USDA Annual Agricultural Outlook Forum
|
USDA has scheduled February 27th and 28th 2025 for the 101st Annual Agricultural Outlook Forum. The event will take place at the Crystal Gateway in Arlington, VA. as in previous years.
No theme has yet been released for the program. In 2024 “Cultivating the Future” was the focus, emphasizing a balance in scale of operations between small and large farming enterprises. Consistent with the policy of the current Department of Agriculture, speakers emphasized support of local and regional food systems and creating new sources of revenue through global trade.
Featured speakers at the 2024 forum included Secretary of State Antony Blinken and U.S. Trade Representative Katherine Tai sharing their broad international perspectives.
The 2025 Outlook Forum will be held under a new Administration that will most certainly set the theme and select speakers.
|
Munters Announces Organizational Changes
|
Klas Forsstrom, CEO and Group President of Munters, has announced the retirement of Stefan Mahl, Group Vice-President, after a 20-year tenure with the company. In recognizing his contribution, Forsstrom stated, “Stefan has contributed significantly to the growth of Munters and innovative progress. We will miss him as he enters a new phase in life.”
His function will be integrated into Group Finance and Strategy to be led by Katharina Fischer, the CFO and Group Vice-President of Munters. The predetermined change will take effect on January 1st, 2025.
Munters is a global leader in ventilation with a history of service dating back to 1955. Munters Group AB, based in Sweden, employs 5,000 and is present in more than 30 nations worldwide. For further information click on to the company logo on the right side of the Welcome page.
|
Aldi Promoting Thanksgiving Meals
|
Aldi has announced that it will offer a Thanksgiving meal to feed ten diners for $47. The menu will include a Butterball turkey with spices, gravy, rolls, mac-n-cheese and bean sides, stuffing and accompaniments including cranberry sauce, potatoes, and pumpkin pie.
Jason Hart, CEO of Aldi noted that the company serves close to a quarter of all U.S. households and the Thanksgiving offer will be popular based cost and convenience.
|
New Jersey Intends to Offer Free School Meals
|
New Jersey Bill A.4680 would introduce free daily meals at schools in the state irrespective of family income. The concentration will be on breakfast servings that help children to learn and function through the school day. New Jersey currently provides school meals to families that meet income criteria. Increasing the proportion of children receiving school meals will be beneficial for farmers and especially egg producers with opportunities for both national and regional suppliers.
“Food shaming” is a concurrent aspect of legislative concern. Senator Tina Smith (D-MN) has re-introduced the No Shame at School Act into Congress. This bill dating back to 2019 would prohibit any form of identification of students receiving free meals and would also ban local school jurisdictions from using debt collectors. Apart from this intended federal action, Minnesota and North Dakota have enacted legislation banning shaming with the policy under consideration in numerous states.
|
Proposal to Ban Paraquat
|
Representative Greg Casar (D-TX) is leading a group of 50 members of Congress to direct the Environmental Protection Agency to ban paraquat, a herbicide with potential neurologic effects* in both children and adults.
In a letter addressed to Michael S. Regan the EPA Administrator, legislators, supported by a wide range of consumer protection, health promotion and farm worker rights organizations urged the Agency to follow the decision of almost 70 nations to ban the compound.
Parkinson’s syndrome is emerging as an important issue with epidemiologic evidence of association with paraquat. The herbicide is currently banned for application on golf courses and recreational areas. Opponents of the compound maintain that if it is unsafe for golfers it certainly is undesirable for farm workers who are exposed to relatively higher levels of exposure.
*Paul, K. et al.(2024). Agricultural paraquat dichloride use and Parkinson’s disease in California’s Central Valley. Journal Int. Epidemiol. doi:10.1093/ije/dyae004.
|
Impact of Hurricane Milton on Florida Agriculture
|
Initial estimates suggest that the cotton crop in Georgia will be reduced by 20 percent, down 400,000 bales from the pre-hurricane estimate. Florida Citrus Mutual representing growers and packers confirmed a similar reduction in citrus production among the five largest growing counties in central Florida. Crop damage from wind and flooding is financially devastating to growers who are still recovering from an outbreak of citrus greening that has affected 90 percent of the state industry.
It is inevitable that orange juice will increase in price since supplies from Brazil will be limited by that nation’s ongoing drought.
|
Growing Concern Over Chemicals in Packaging
|
Whether cardboard, plastic or metal, food packaging incorporates a wide range of chemical compounds that can leach into food. A recent study identified over 3,000 food contact chemicals in blood samples through a bio-monitoring program. A second study disclosed that a proportion of these chemicals are potential carcinogens with detection of the specific compounds in blood and human tissues.
Concerns arise as a result of advances in analytical technology that can detect chemicals down to picogram levels in tissues that may not be of biological significance. Notwithstanding this caution, known carcinogenic compounds including bisphenols, styrene and phthalates should be excluded from packaging given their ability to transfer to food.
In many respects, eggshells although susceptible to cracks and leakage with mishandling representing a problem for producers, protect the egg contents from food contact chemicals in packaging.
|
USDA Supports Beginning Farmers
|
USDA has announced grants totaling $46 million to support veteran, underserved and beginning farmers to establish operations and to improve skills.
The Beginning Farmer and Ranch Development Program administered by the National Institute of Food and Agriculture will fund 46 projects valued at $24 million. Some activities will include providing technical assistance to aspirant farmers and assistance in acquiring farms. A Detroit, MI. project will focus on hydroponic farming.
USDA is encouraging young farmers based on the reality that existing producers are advancing in age with more than one third over 65 consistent, with aging of the U.S. population.
|
|
|
Airline Kitchens as A Source of Foodborne Infection
|
According to Food Safety News it is estimated that one billion meals in flight are served each year by airline operators. The potential for foodborne infection from central kitchen serving major international and U.S. hub airports is self-evident.
There are documented cases of foodborne infection attributed to either contaminated food ingredients or deficiencies in food handling, storage and preparation, with severe consequences. The salmonellosis outbreaks emanating from Heathrow London in 1984 through to a case involving a tourist group consuming contaminated food loaded at Dar es Salaam in 2011 are well documented examples of infection from consuming air-catered food.
Recent reports confirm that companies preparing and serving meals may deviate from acceptable standards. Gate Gourmet, LSG and Flying Food Group have been cited by the FDA or by their major airline customers for violations. Airports with problems include Minneapolis, Dallas International, San Diego, and Detroit Metro. Violations include rodent and insect infestation of premises, failure to maintain appropriate hot or refrigeration temperatures, inadequate training and supervision all contributing to the potential of foodborne infection.
Airlines cannot simply transfer responsibility for acceptable food practices to contract flight kitchens. Customer satisfaction is a component of goodwill, and passengers hold an airline responsible for the quality and safety of food served in flight.
|
Botulism Impacts Wild Birds at the Tule Lake National Wildlife Refuge in Oregon
|
|
Biologists at the Klamath Basin National Wildlife Refuge Complex are currently combating an outbreak of avian botulism affecting a wide range of migratory and domestic species. Birds affected in the Tule Lake National Wildlife Refuge include dowitchers, stilts, pintails and wigeons.
Botulism occurs in lakes and water systems that have been stressed by drought resulting in concentration of birds, lowered water levels and exposure to rotting vegetation. Birds that ingest botulinum toxin are then responsible for perpetuation of outbreaks since unaffected birds consume maggots feeding on rotting carcasses that contain lethal quantities of toxin. Volunteers are gathering dead birds for safe disposal and are transporting mildly affected birds showing paresis to rehabilitation centers to receive supportive care.
Outbreaks of avian botulism occur frequently along the Mississippi, Pacific and Central Flyways associated with disturbances in water level as a result of drought or imprudent management of water systems.
|
|
SNAP Participation at a High Level in 2022
|
The USDA Food and Nutrition Service recently reported on participation in the 2022 Supplemental Nutrition Assistance Program (SNAP). According to the Annual Report, 88 percent of eligible individuals took advantage of SNAP, the highest level in 50 years. Recipients of SNAP represented both low- and non-income demographics, all below the federal poverty guidelines. Half of eligible households with incomes above the poverty line participated in the program. A breakdown of participants demonstrated 55 percent participation by eligible citizens over the age of 60 with a 94 percent rate for rural households with children.
Data assembled by USDA confirmed the need to continue SNAP to maintain food security among financially disadvantaged households in both rural and urban areas.
SNAP represents the bulk of the long-delayed Farm Bill. Funding was extended through December 20th despite the expiry of the 2018 Farm Bill that was delayed from 2023.
|
Request to Limit Clean Fuel Credits to Crops Grown in the U.S.
|
The National Corn Growers Association and the American Soybean Association have urged the Administration to confine credits under the Clean Fuel Production and Sustainable Aviation Fuel Programs to feedstock grown and processed in the U.S. Current regulations would theoretically permit another nation to take advantage of credits to the detriment of U.S. farmers.
“Zippy” Duvall, President of the American Farm Bureau, requested a rapid response to the request given that credits are scheduled be effective in 2025.
|
Investigations into USDA Response to Boar’s Head Listeria Outbreak
|
Following requests from Senator Richard Blumenthal (D-CT) and Rep. Rosa DeLauro (D-CT), the Office of the Inspector General of the USDA has initiated an investigation into possible negligence by FSIS inspectors with respect to the Virginia Boar’s Head plant implicated in the extensive outbreak of listeriosis. To date, the outbreak has resulted in 59 hospitalizations and 10 fatalities with a considerably higher number infected from consuming liverwurst and possibly other products produced by Boar’s Head in the facility now shuttered.
At issue are reports documenting profound deviations from acceptable hygienic and operational procedures extending over a number of years before the outbreak. Apart from identifying those responsible for negligence, the FSIS will have to amend procedures to ensure that there is not a repetition.
The question arises as to how many other plants other than the implicated operation may be producing RTE products vulnerable to contamination with Listeria and other pathogens. Among other questions will be the relative responsibilities of FSIS and the personnel of the Virginia Department of Agriculture who participated in inspections.
Irrespective of the outcome of the USDA investigation, circumstances related to the outbreak will be the subject of legal discovery as numerous lawsuits have been filed as a result of illness and death.
Previous postings on EGG-NEWS and CHICK-NEWS relating to the outbreak can be retrieved by entering Boar’s Head in the Search block.
|
Munters AB Acquires Hotraco
|
Munters, a major manufacturer of ventilation equipment for agriculture and industry, has announced acquisition of Hotraco of the Netherlands. This company develops control systems and sensors that are widely used in agricultural buildings including for poultry production.
In commenting on the transaction, Klas Forsstrom. President and CEO of Munters, stated, “The acquisition is fully in line with our digital strategy for the FoodTech and Munters agenda. He added, “Hotraco is a perfect complement to our market leading offerings.
Brantgarde Linder, President of the FoodTech business segment, stated, “The acquisition supports our vision to provide insight for optimization across the entire value chain to improve yield, sustainability, transparency and animal welfare.” He added, “Hotraco strengthens our European presence and expands the amount of data integrated into our ecosystem around the global food supply chain.”
Recently, Munters announced an equity position in U.S.-based AEI, a supplier of control equipment for egg collection and for control of ventilation.
|
Foodborne Infection in International Travelers Tracked by Mobile App.
|
EGG-NEWS recently commented on dangers associated with foodborne infection as a result of improper procedures in food preparation, storage and serving in air travel.
A central kitchen supplying a large international or hub airport can potentially infect thousands of travelers with diverse destinations thereby obscuring the emergence of an infection. The University of Zurich in association with the World Health Organization has developed the Illness Tracking in Travelers app. This facilitates reporting of symptoms and provides details relevant to identifying a foodborne outbreak and relating it to a specific source.
According to a recent release by the University of Zurich, gastrointestinal symptoms were reported for 19 percent of 470 air trips. The Illness Tracking in Travelers app will be validated by more extensive use and will obviously be refined based on experience gained.
The app. may have application in identifying outbreaks of infections other than those affecting the intestinal tract. If correctly configured it could be useful as an early warning system for contagious diseases that may be spread within the confines of an aircraft or terminal.
|
Amazon Opens new Grocery Store Format
|
The first of a series of planned Amazon Grocery locations was opened in downtown Chicago last week. The prototype comprises a 4,000-square-foot area offering 3,500 SKUs including coffee, prepared meals and commonly needed grocery items. Based on location and products offered, Amazon Grocery will appeal to urban residents and commuters and will serve as an upscale convenience store.
Since acquisition of Whole Foods Market with close to 520 locations in the U.S., Amazon has experimented with various permutations of brick-and-mortar formats including Amazon Fresh. Stores have opened and closed without evidence of a coordinated strategy or commitment to enter the quick- service grocery segment.
How this new concept will interlock with subsidiary Whole Foods Market‘s Daily Shop is Unknown, although it is evident that the latest iteration is approximately half the size of a Daily Shop although appealing to a similar clientele.
Depending on the success of the Chicago store, Amazon may extend what is obviously a market probe into additional stores but based on past history, the parent company may shift gears again and develop an alternative concept for evaluation.
|
Aldi Continuing with Winn-Dixie Conversion
|
Jason Hart, CEO of Aldi confirmed that the company is actively converting some Winn-Dixie and Harvey’s Supermarkets acquired in a 2023 transaction. Stores are located in Alabama, Georgia, Louisiana, Mississippi and Florida. Some stores will be re-bannered as Aldi but a “meaningful number” of Harvey’s and Winn-Dixie stores will retain their identity.
Naturally Aldi will introduce to their acquired stores a high proportion of private brands, reduce SKUs and introduce efficiencies that have contributed to expansion over the past decade.
|
Commentary
|
|
|