The Food and Drug Administration initiated a recall of Chicken Alfredo meal kits produced by Joseph Seviroli, LLC on October 9^th.  To date the recall has been expanded to include 683 tons of products due to possible contamination with Listeria monocytogenes. Meal kits were distributed in 15 states east of the Mississippi in addition to Wyoming and California.

Raw Farm Dairy, located in Fresno, has recalled raw milk produced on November 9^th.  This action follows demonstration of RNA consistent with H5 influenza virus in a retail milk sample collected by the Santa Clara Health Department. This action is in accordance with the State of California surveillance program for bovine influenza-H5N1.

The operators of Raw Farm Dairy should have recognized the possibility of bovine influenza infection based on a depression in milk yield among animals within their herd and a physical change in the appearance of milk. The dairy operators should have voluntarily withheld milk until the results of an assay for the presence of virus disclosed freedom from infection. Releasing milk of questionable wholesomeness was unethical and contrary to the health-promoting principles apparently followed by producers of ‘natural’, certified organic and raw milk and related foods.

This case illustrates the risk of consuming raw milk, since the virus if present, could result in human infection even if only producing mild respiratory infection and conjunctivitis.  The ingestion of milk containing H5N1 virus by a person infected with a seasonal strain of human influenza could result in a recombinant event.  Identification of RNA derived from H5 viral influenza in this case is an indication of the need for surveillance, given that 335 cases of bovine influenza have been diagnosed in California herds over the past three months.

The virus is effectively inactivated by pasteurization but raw milk can contain a wide range of bacterial pathogens and now evidently viruses of potential zoonotic significance

President-elect Donald J. Trump has nominated Brooke Rollins as Secretary for Agriculture in his Administration.  Currently, she is the Executive Director for the America First Policy Institute.  Previously, she was Director of the Domestic Policy Council during the first Trump Administration.

Rollins is a native of Glen Rose, TX. and participated in FFA in high school.  She earned a baccalaureate degree in Agricultural Development from Texas A&M and her law degree from the University of Texas School of Law.

Her appointment has received the support of the American Farm Bureau Federation noting that she would “fight for America’s farmers in our nation’s agricultural communities”.

In her current position, Ms. Rollins has advocated for a review of SNAP eligibility requirements.  It is anticipated that she will aggressively advocate for change within USDA in accordance with pre-election commitments by the President-elect.

It is evident that many of the grant and giveaway programs favoring minorities and the “underserved” as favored by Secretary Tom Vilsack will be reversed or abandoned during her tenure.

A teenager was admitted to the BC. Children’s Hospital on November 8^th with a severe respiratory infection resulting in intensive care.  Evaluation of the virus denotes changes in genes coding for the hemagglutinin protein that favor attachment to alpha 2-6 sialic receptors in the upper respiratory tract.  H5N1 virus circulating in poultry attaches to alpha 2-3 receptors predominant in avian species but enigmatically also in the conjunctival tissue of humans.  This is the reason why those involved in depopulation of flocks infected with avian influenza and workers in infected dairy herds develop conjunctivitis and only infrequently display upper respiratory involvement.

The two mutations that are evident from whole genome sequencing of the isolate from the patient are consistent with the clinical condition.  It is not known whether these mutations occurred prior to infection or during the current clinical phase.  Despite comments by Dr. Scott Hensley of the University of Pennsylvania, Perelman School of Medicine, following a review of sequence data released by the Public Health Agency of Canada, it is unlikely that the virus is of immediate pandemic concern to humans.  It is generally accepted that monitoring of isolates from humans and ongoing surveillance will be necessary to detect potential changes in pathogenicity based on the presence of mutations.

Following investigations, health authorities in British Columbia have confirmed that there was no transmission from the patient to contacts within the ten-day period following hospitalization confirming that the virus was not contagious.

It is unknown how the patient was infected since there has been no release concerning residence, occupation or possible contact with free-living birds, animals or commercial poultry.

The USDA has followed a policy of extensive support of small-scale farmers, “clean energy” projects and for “underserved” communities.

In a recent release, USDA identified distribution of more than $20 billion iunder the misnamed Inflation Reduction Act. Funds were allocated to:

• $4 billion in conservation funding to promote “climate-smart practices”

• Support of 7,000 farmers and rural businesses to develop clean energy and energy efficiency installations.

• Assignment of $8.3 billion in grants to support transformation of rural electric cooperatives to solar and wind powered generation, claimed to supply 10 gigawatts annually.

• $2.6 billion to reduce risk of wildfire on 1.8 million acres.

• $1.5 billion for urban and community forestry programs with special emphasis on disadvantaged communities.

• $3 billion assigned to the Partnership for Climate-Smart Commodities involving 21,000 farms.

Over the past four years the USDA has attempted to restructure the meat production industry and reduce the use of carbon-based fuels with little evidence of major changes. The USDA refers to grants as “investments”.  This presumes a quantifiable return on the capital allocated. There is apparently little oversight over projects or the evaluation of their effectiveness.

Authorities in South Korea have reported two outbreaks of Highly Pathogenic Avian Influenza in flocks respectively 17,000 and 24,000 in size without specifying type.

With the cases reported in this nation together with a high incidence rate in Japan, it is evident that migratory marine birds are shedding H5N1 virus to backyard and commercial farms in southeast Asia.

If the fall outbreaks in 2024 follow the pattern of 2022, Taiwan, Japan and South Korea will be markets for both shell eggs and egg products.  At this time, U.S. prices are high, placing domestic producers at a competitive disadvantage against India and the People’s Republic of China.

Predictably adverse publicity and customer disaffection followed the outbreak of E.coli O157:H7 attributed to onions incorporated into Quarter Pounder sandwiches served by McDonald’s franchisees in a multistate area. To date, 104 cases have been confirmed in 14 states with 24 hospitalizations and one fatality. The Company is now committing $100 million to assist franchisees. Of this total, $65 million will support operators with a quantifiable loss in business during October.

It is apparent that the outbreak is now over, but lawsuits have been filed against both McDonald’s and Taylor Farms, operators of the Colorado packing plant in addition to onion growers in Washington State.

The speed at which health authorities including the Centers for Disease Control and Prevention responded to the outbreak attests to the capability public health authorities to respond to comprehensive databases including Food Net.  Identification of onions as the vehicle of infection and the elimination of beef patties based on laboratory assays, limited the financial consequences of the outbreak.

According to a Mercatus Grocery Shopper Survey, online grocery sales were higher by 28 percent from October 2023 to the most recently completed month attaining $10.5 billion.

Highlights from the report include:

• Delivery channels increased by 46 percent to $4.8 billion.

• Active users increased by 16 percent with a bias towards younger households.

• Home delivery increased by 24 percent attributed to special offers by DoorDash and Uber and with a free trial promotion for Amazon Prime coinciding with Prime Day sales.

• Pickup orders increased by 6 percent.

• Ship-to-home was up 6 percent with sales of $1.5 billion.

• Average order value was up 12 percent.

• Monthly average user base grew by 1.6 percent with half of the U.S. households ordering at least once per month.

It is evident that convenience associated with online ordering and delivery options established during the COVID years has established new buying patterns among consumers. Improved software and the ability of stores and fulfillment centers to respond to orders with speed and accuracy is entrenching customer loyalty.

The patient count as a result of E. coli O157:H7 foodborne infection in St. Louis County is currently under investigation by federal, state and local authorities.  As of November 19^th, there were 94 cases among students, teachers and supporters of Rockwood Summit High School.

At issue is an off-campus event catered by Andre’s Banquets and Catering currently cooperating with St. Louis County health department. At the present time, salads have been implicated in the outbreak but the results of assay of food samples from the implicated kitchen have not been been released.

Observers had anticipated progress on the 2023 delayed Farm Bill in the lame duck session of the 118^th Congress.  This past week, Senator Debbie Stabenow (D-MI) introduced the Senate version incorporating an additional $39 billion in expenditure including $20 billion towards the Farm Safety Net.

Senator John Boozman (R-AR) the ranking member on the Senate Agriculture Committee characterized the proposal as a “non-starter” noting, “an eleventh-hour partisan proposal released after expiration of the current Farm Bill extension is insulting”.

The expired 2018 Farm Bill was extended through September 30, 2024 but all expenditure on agriculture will cease on December 31^st hence the need for action by Congress.  The House Agriculture Committee has presented their version of the 2023 Farm Bill but it has yet to be considered by the full House.

The question of legislation to overrule California Proposition 12 appears to be an impediment towards adoption of a comprehensive Farm Bill with strong lobbying by the National Pork Producers’ Council.

Passage of a Farm Bill will probably be easier in the 119^th Congress given that the Republican party will hold a majority in both the House and the Senate with a greater inclination to increase commodity reference of prices. This will be a major issue following the decline in exports of agricultural commodities due to tariffs on imports from China and other nations. It is anticipated that a Farm bill enacted by the 119^th Congress will place greater restrictions on SNAP eligibility and expenditure.

The upsurge in small “spaza” (informal) stores in urban and rural townships in South Africa have become a source of food contamination due to poor handling practices and improper storage of ingredients.  The problem was highlighted by the deaths of 22 children from organophosphate poisoning.  Terbufos™ only registered for agricultural use is inappropriately and illegally applied as a home rodenticide and pesticide and is sold alongside food in non-regulated “spaza” stores. 

Investigation of the causes of peracute mortality among children disclosed gross violations in food handling.  Regulations have been introduced to enforce registration of stores selling food.  Irrespective of municipal ordinances on traceability, repackaging and storage of food, detergents and pesticides it will be difficult to enforce regulations given the lack of resources inherent to all aspects of governments in the Republic of South Africa. 

Despite exhortations from President Cyril Ramaphosa, good intentions do not trickle down to shanty towns where there is little or no rule of law.  During the fourth quarter of 2024, approximately 900 food-related incidents involving contamination and infection have been recorded, with the documented cases possibly only the tip of the iceberg.

Indiana University of Indianapolis received a $2 million grant from the National Science Foundation to conduct research into propagation of insects for production of animal and human food.

The principal research worker will be Dr. Christine Picard, Associate Dean for Research and Graduate Education at the Indiana University School of Science.  She is the Director of the Center for Environmental Sustainability Through Insect Farming that has collaborative arrangements with Texas A&M and Mississippi State University.

The purpose of the grant will be to develop systems to culture insects to produce protein applying both biological and genetic manipulation.

Dr. Gabriel Filippelli, a participant in the project as co-principal investigator, stated, “We cannot keep producing protein to consume the way we are now, because we don’t have the resources and our planet suffers.”  He added, “We need to rethink how we survive and thrive into the future.  We foresee a world that is much more sustainable and circular with insect-based systems being a piece of it.”

The justification for the grant is questioned given that commercial insect production is a reality albeit that application is limited to animal feed.

There has been extensive investment of venture capital in insect protein with construction of large plants in the E.U., the Republic of South and, on a lesser scale, in the U.S.  The question remains as to whether this NSF grant to obviously competent scientists is a case of reinventing the wheel or whether Indiana University can engineer a breakthrough to establish financial viability for insect-derived protein that is currently in question.

In a November 18^th release, Archer-Daniels-Midland Corp. (ADM) posted financial results for Q3 FY 2022. The Company can be regarded as a bellwether for ‘Mega-Ag’ and the commodities trading and processing sector. Along with competitors Bunge, Cargill, Cofco and Dreyfus, all are subject to the risks of currency fluctuation, geopolitical events, climatic extremes, and increased cost of ingredients, labor and transport. They all operate in a competitive world environment influenced by inflation, conflict and disparity in the quality of life between industrialized and developing nations.

For Q3 FY 2024 ending September 30^th, net income was $18 million on total revenue of $19,937 million representing a profit margin of less than 0.1 percent Comparable figures for Q3 of 2013 ending September 30^th 2023 were net income of $821 million on total revenue of $21,695 million. Diluted EPS fell from $1.52 for Q3 2023 to $0.04 for the most recent quarter.

For Q3 2024 the Animal Nutrition sub-segment generated $19 million in operating profit (compared to $12 million in Q3 2023) out of a combined total of $1,037 million for all segments. Segment operating profits were:-

• Ag Services and oilseeds           $480 million
• Carbohydrate solutions              $452 million
• Nutrition (human and animal)   $105 million

ADM has been burdened with questions relating to internal accounting covering an extended period that apparently has now been resolved with restatement of accounts but without deviation from consolidated earnings. In commenting on results, Chairman and CEO Juan Luciano stated “Accuracy and transparency are important to the Company and we are pleased to have now completed the restatement and be current with our financial filing. We continue to focus on implementing enhancements to internal controls to ensure integrity and accuracy of reporting,”

He concluded “Looking ahead, while we foresee softer market conditions into next year, we are taking actions to improve performance and drive value creation. We are redoubling our focus on productivity and operational excellence, while maintaining our disciplined approach to capital allocation.”

On September 30^th 2024, ADM posted assets of $35,654 million of which $6,999 million comprised goodwill and intangibles, against long-term debt of $8,303 million. The Company had an intraday market capitalization of $25,610 million on November 20^th. ADM trades with a forward P/E of 10.8 and has ranged over a 52-week period from $48.92 to $77.35 with a 50-day moving average of $56.87.  Twelve-month trailing operating margin was 2.2 percent and profit margin 2.9 percent.  Return on assets over the past twelve months was 3.4 percent and the return on equity 10.8 percent.

Jersey Mike’s Subs, a sandwich chain with 3,000 locations in the U.S., will be acquired by Blackstone Capital Partners LLP for $8 billion including debt. Jersey Mike’s was established in 1956 in Point Pleasant, NJ as Mike’s Subs.  The original business was acquired in 1975 with franchising opportunities offered in 1987.

The CEO of Jersey Mike’s, Peter Cancro, will remain as the driving force of the business with an equity position.

He stated, “Blackstone is the basis of the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward.”

Blackstone has recently acquired a number of franchise operations including 7 Brewed Coffee and Tropical Smoothie Café.  Infusion of capital will position Jersey Mike’s to compete more aggressively with Subway that was acquired by Roark Capital for $10 billion in 2023.

On November 20^th Target Corporation (TGT) the Nation’s 6^th-ranked retailer, posted results for Q3 FY 2024 ending November 2^nd. Target fell short of consensus estimates for both revenue ($25,900 million) and earnings ($2.30).  For the quarter, the Company earned $854 million on sales of $25,228 million with a diluted EPS of $1.86. For the corresponding Q3 FY 2023 ending October 28^th, Target earned $951 million on sales of $25,004 million with a diluted EPS of $2.10. Sales were higher by 0.9 percent and net earnings were 12.1 percent below Q3 FY 2023. Gross margin declined from 27.4 percent in Q3 FY 2023 to 27.2 percent for the most recent quarter. Operating margin fell from 5.3 percent to 4.6 percent.

For Q3 FY 2024, comparable same-store sales increased by 0.3 percent compared to a negative 4.9percent in Q3 FY 2023. This was due to a rise of 2.4 percent in transactions (‘traffic’) offset by a 2.0 percent decline in the value of each transaction (‘ticket’). Digital sales were up 10.8 percent during Q3 FY 2024 attributed to Target Circle with curbside and in-store pickup. The Company benefitted from the Target Circle-360 free loyalty benefits program supplanting the previous paid membership alternative with an increase in membership penetration of 17.7 percent.

In commenting on results Brian Cornell Chairman and CEO stated, "Looking ahead, our team is energized and ready to deliver the unique combination of newness and value that holiday shoppers can only find at Target, and we remain confident in the underlying strength and fundamentals of our business, and our ability to deliver on our longer-term financial goals."

The Company lowered guidance for FY 2024. Target expects flat same-store sales growth and an adjusted EPS ranging from $8.30 to $8.90 (was $9.00 to $9.70)

On August 3^rd Target posted total assets of $58,351 million, up 3.8 percent from October 28^th  2023. Long-term debt and lease obligations attained $19,831 million. Target Corporation had an intraday market capitalization of $71,870 million on November 20^th. The Company has traded over the past fifty-two weeks in a range of $120.94 to $181.86 with a 50-day moving average of $152.04.  TGT trades with a forward P/E of 15.0. On November 19^th pre-release the share closed at $156.90 but after the morning release opened at $127.81 on November 20^th down 18.6 percent

Twelve-month trailing operating margin was 6.6 percent and profit margin 4.2 percent.  The Company generated a return on assets of 7.2 percent and 34.0 percent on equity.

At the end of Q3 FY 2024, Target Corporation operated 1,978 stores with a total retail area of 248,000 square feet excluding offices and DCs. The company invested $1,960 million in property and equipment during Q3 FY 2024.

On November 14^th Post Holdings Inc. (POST) reported on Q4 and FY 2024 ending September 30^th.  The Company posted results consistent with consensus estimates for both revenue and earnings.

For Q4 the Company reported net earnings of $81.6 million on sales of $2,010 million with a diluted EPS of $1.28.  Comparative values for Q4 of FY 2023 were earnings of $65.7 million on sales of $1,945 million with a diluted EPS of $1.01.

Revenue was 3.3 percent higher in Q24 2024 compared to the corresponding quarter in FY 2023.  Gross margin increased from 28.3 percent to 28.6 percent for the most recent quarter. Operating margin increased from 7.9 percent to 9.5 percent for Q4 2024.

For FY 20243 the Company reported net earnings of $367 million on sales of $7,923 million with a diluted EPS of $5.64.  Comparative values for FY 2023 were earnings of $301 million on sales of $6,991 million with a diluted EPS of $4.82.

Guidance for FY 2025 comprised an adjusted EBITDA in the range of $1,416 to $1,460 million. Capital expenditure of $380 to $420 million for FY 2025 will include $85 million to complete expansion and upgrades to the Norwalk, IA. egg processing plant and Phase II conversion to cage-free housing at the Bloomfield, NE. Complex.

Post Holdings operates subsidiary, Michael Foods producing shell eggs, egg liquid and derived products that are sold through the Refrigerated Retail and Food Service segments. Egg-related brands include Almark Foods, Henningsen’s, Abbotsford, Davidson’s, Crystal Farms and Egg Beaters.

The Refrigerated Retail Segment includes cheese, sausage products, eggs and side dishes. For Q4 FY 2024, net sales for the segment amounted to $227 million, down 2.9 percent from Q4    FY 2024. Operating profit attained $13 million up 6.7 percent.

The Food Service Segment comprising egg and potato products recorded Q4 FY 2024 sales of $596 million, up 4.7 percent. The Segment generated an operating profit of $78.3 million down 8.1 percent

The Post Consumer Brands and Weetbix (U.K.) Segments have no direct involvement with eggs.

The Company release and SEC 10-Q report noted the risks and consequences of HPAI infection on company-owned complexes and those of contractors.

On September 30^th 2024 Post Holdings posted assets of $12,854 million, including $7,847 million as goodwill and intangibles, against long-term debt of $6,811 million. The Company had an intraday market capitalization of $6,450 million on November 20^th. POST trades with a trailing P/E of 19.6. The share value has ranged over a 52-week period from $83.73 to $118.96 with a 50-day moving average of $112.68. POST closed at $107.06 pre-release on November 14^th and opened November 15^th at $106.57

Twelve-month trailing operating margin was 10.7 percent and profit margin 4.5 percent.  Return on assets over the past twelve months attained 4.3 percent and the return on equity was 8.9 percent.

Generally Post Holdings with a commitment to further processing of eggs is shielded from extreme lows in the benchmark price that impacts shell egg producers and actually provides a benefit from purchased eggs. In contradistinction the company does not obtain the surge in margin when prices increase.

In a November 19^th release, Walmart Inc. (WMT) posted financial results for Q3 of Fiscal 2025 ending October 31^st 2024. All U.S. omni-channel retailers are subject to the same pressures from increased costs for goods, transport and labor in a competitive environment with most consumer demographics and especially lower income earners concerned over expenditure. As a multinational company, Walmart faces additional risks associated with currency fluctuation, geopolitical events and adverse policies by regulators in host-nations. Walmart serves as a bellwether for U.S retail combining groceries, clothing, electronics, drugs, toiletries and household necessities.

For the 3^rd quarter of FY 2025 net income was $4,577 million on total revenue of $169,588 million that beat consensus estimates on revenue and earnings. Walmart generated a profit margin of 2.7 percent for the quarter.  Comparable figures for Q3 FY 2024 ending October 31^st 2023, were net income of $453 million on total revenue of $160,804 million with a profit margin of 0.3 percent due to a non-recurring charge of $4,750 million. Diluted EPS increased from $0.06 for Q3 FY 2024 to $0.57 for the most recent quarter.

Comparing Q3 FY 2025 with the corresponding quarter of the previous year, revenue was up 5.5 percent; comparable store sales up 5.5 percent for the U.S.; gross margin rose from 24.0 percent to 24.2 percent; operating margin increased from 3.9 percent to 4.0 percent for the most recent quarter. Global E-commerce sales grew by 27 percent and global inventory was down 1.0 percent and 0.6 percent for the U.S.

In commenting on Q3 results, in the Investors’ Call, Walmart CFO John David Rainey stated “Share gains in the third quarter, in both transaction counts and unit volumes, were primarily driven by upper-income households. We’re broadening our assortment, improving customer experience, and earning their trust, while seeing share gains as a result. We’re also realizing the benefits from the investments we’ve made in our core omni-retail business and seeing improved profitability with newer businesses.”

He added, “E-commerce remained strong, with Walmart posting a 22 percent increase year over year. Store-fulfilled delivery grew nearly 50 percent and surpassed a $2.5 billion monthly run rate. This marked the 12^th consecutive month that deliveries exceeded $2 billion. Walmart Connect grew by 26% year over year, and membership income was up by double digits”.

Rainey concluded “U.S. customers remain resilient, with behaviors largely consistent over the past four to six quarters. They continue to seek value to maximize their budgets while also choosing convenient options to save time.”

Forward guidance for FY 2025 was adjusted upwards above the upper end of previously stated ranges including:- A 4.8 to 5.1 percent increase in net revenue; An increase in adjusted operating income of 8.5 to 9.3 percent, and an adjusted EPS of $2.42 to $2.47 Capital expenditure will be equivalent to 3.0 to 3.5 percent of net sales.

For Q3 FY 2025 segment results comprised:-

• Walmart US: Net sales of $114,900 million, up 5.0 percent over Q3 FY 2024. Operating income $5,400 million with strong gains in groceries and general merchandise. Comparable same-store sales were up 5.3 percent (excluding fuel). Transactions were up 3.1 percent and ticket was 2.1 percent higher. E-commerce, was up 22 percent over the corresponding quarter of FY 2024. Inventory declined approximately 0.6 percent.
• International: Net sales of $30,300 million, up 8.0 percent. Operating income was $1,200 million, up 7.8 percent. Growth in E-commerce, 43 percent over the corresponding quarter of FY 2024.
• Sam’s Club U.S.: Net sales of $22,900 million, up 3.9 percent excluding fuel. Operating income was $600 million. Comparable same-store sales were up 7.0 percent. Membership revenue grew 15.0 percent. Growth in E-commerce, increased 26 percent over the corresponding quarter of FY 2023, attributed to curbside pick-up service and delivery.

Walmart operates more than 10,500 stores worldwide of which 5,400 are in the U.S. including 600 Sam’s Club warehouses. Walmart trades under 46 banners in 19 nations and employs 2.1 million.

On October 31^st 2024, Walmart posted assets of $263,399 million including goodwill of $27,942 million. Long-term debt and lease obligations amounted to $52,628 million. The Company had an intraday market capitalization of $675,860 million on November 19^th. WMT trades with a forward P/E of 30.9 and has ranged over a 52-week period from $49.85 to $88.29 with a 50-day moving average of $81.42.  Twelve-month trailing operating margin was 4.7 percent and profit margin 2.3 percent.  Return on assets over the past twelve months was 7.0 percent with a return on equity 18.5 percent. At close of trading on November 18^th pre-release, WMT was priced at $84.11. On November 19^th WMT opened post-release at $86.17, up 2.5 percent and closed at $86.89.  

Grimmway Farms, located in Bakersfield, CA, has recalled organic carrots with “use by” dates ranging from mid-August through mid-November as a result of contamination with E. coli O157:H7.  Outbreaks have been recorded in 18 states with 39 cases to date requiring 15 hospitalizations and with one fatality.

In a statement, Grimmway Farms is cooperating with state and federal agencies to identify causation, presumed to be contamination of water used to irrigate crops.

This incident demonstrates the reality that the organic seal does not provide any assurance of protection against pathogens despite public perceptions to the contrary.

The implicated baby and whole organic carrots were marketed by Sprouts, Trader Joe’s, Wegman’s, Target, Walmart and other retailers.

Following outbreaks of HPAI in Washington State during mid to late October, Dr. Amber Itle, State Veterinarian justifiably encouraged owners of backyard flocks to enhance biosecurity.  Given that most backyard flocks are allowed access to the exterior of houses, the recommendation to “improve biosecurity” is impractical given the inevitability of contact between migratory and domestic carriers of infection among subsistence and non-commercial flocks.

What is of interest is the comment by Dr. Itle, that “This disease is preventable”.  If by “preventable” Dr. Itle implies that biosecurity provides absolute protection, this is contrary to reality.  Not even a high level of biosecurity in combination with vaccination will provide complete protection.  Dr. Itle is theoretically correct in recommending “Avoid contact with wild birds, bring birds undercover and away from ponds, keep feed in containers and bring flocks in at night and avoid mixing species including ducks and chickens.”  Allowing backyard flocks outside access will not “avoid contact with wild birds”.

Changing housing and management of backyard flocks to achieve even a moderate level of biosecurity is impractical.  Fortunately, backyard birds serve only as sentinels of HPAI infection in an area. Absent direct contact with commercial flocks, backyard farms are insignificant in the epidemiology of avian influenza as it applies to the commercial poultry industry.

Hillandale Farms has successfully completed installation of a comprehensive Ovo-Vision ERP (Enterprise Resource Planning) System incorporating logistics, planning, production, quality control, accounting and financial management.

According to a press release, the successful installation of the Ovo-Vision system at Hillandale Farms will allow the company to deliver quality eggs to consumers, monitor welfare and routine production and the control of finances.

Information on Ovo-Vision ERP systems can be obtained from the company website, accessed by clicking on to the Ovo-Vision logo on the right side of the Welcome Page.

The GAO has completed a study extending over six years on violations of H-2A employment.  The study disclosed failure of employers of legal agricultural workers to pay wages and overtime in accordance with federal regulations.  Obviously many workers returning to their home countries have not received adequate compensation and back wages but are untraceable.  The Department of Labor (DOL) has the responsibility for enforcing compliance with H-2A regulations. 

The GAO analysis covered 2018 through 2023 and included interviews with DOL, Department of Homeland Security and state agencies and five organizations representing workers and six associations representing employers. Recommendations by the GAO included for the Department of Homeland Security to establish a procedure to process H-2A petitions electronically and to establish a mechanism to reimburse workers for back wages.

The problem of illegal migration in search of employment reflects the balance between demand for labor and the availability of potential workers.  The problem of illegal employment could be resolved in part by establishing a realistic allocation of H-2A visas and rectifying deficiencies in the E-Verify system.  These changes will be required in the event of deportation of illegal immigrants that cross borders in response to perceived financial opportunities in the U.S. where they are inevitably subject to exploitation.

Agriculture and some industries require immigrant workers on either a seasonal or continual basis and the economy of the U.S. would benefit from a regularized functional and legal system of visa allocation with appropriate controls over duration of residence in the U.S. and compliance with remuneration and housing.

UNFI has announced that the Fort Wayne, IN. Distribution Center will be closed following previous announcements of layoffs and closure of facilities.  In October, UNFI announced that it would be outsourcing administrative functions resulting in 300 layoffs in the Phoenix, AZ. Location.  In June, UNFI closed their Harrisburg, PA distribution center eliminating 87 jobs.  Earlier in 2024 the National Labor Relations Board disapproved outsourcing of trucking to J.B. Hunt in Florida placing 80 driver positions in jeopardy.

In early November, Teamsters Local 853 in California won a grievance complaint requiring UNFI to pay $1.3 million to drivers arising from a collective bargaining agreement.  The dispute between the Teamsters Local and UNFI will now move to arbitration.

In addition to problems associated with driver retention and remuneration, the company faces a class-action lawsuit by suppliers alleging serial and longstanding underpayment.
 

Financial problems experienced by UNFI arise from loss of business with the acquisition of Whole Foods Market by Amazon and more recently adoption of in-house distribution by Ahold-Delhaize banners.

For the most recently concluded FY2024 ending August 3^rd UNFI posted a loss of $112 million on sales of $30,980 million with a negative EPS of $(1.89). Comparable values for FY 2023 were earnings of $24 million on sales of $30,272 million with an EPS of $0.40.

Uzelac Industries is a major supplier of rotary dryers for the poultry and agricultural industries over the past 20 years. The company has recently embarked on construction of a metal fabrication facility in Pewaukee, WI with projected completion in mid-2025. 

At present Uzelac is offering custom fabrication in stainless steel and aluminum in addition to rolling and welding services.  Capabilities include cutting, shearing, laser and water jet cutting, roll forming and Company engineers can provide consultation on design and installation.

Uzelac has recently supplied machine guarding, mixers, silos, platforms and catwalks in addition to a comprehensive line of stock and custom drying solutions.

For further information contact Ryan Reitman (414) 529-0240 or ryan@uzelacind.com or review the company website by clicking on to the Uzelac logo on the right side of the Welcome Page

The Food and Drug Administration, the Centers for Disease Control and Prevention and the Colorado Department of Public Health are continuing with their investigation of the extensive outbreak of E.coli O157:H7 attributed to onions served with McDonald’s Quarter Pounder sandwiches.  As of mid-November, 104 diagnosed cases have been recorded from fourteen states with 34 hospitalizations including four cases of HUS and one fatality.

Enigmatically, the Colorado Department of Agriculture in collaboration with the Colorado Department of Public Health and Environment have failed to demonstrate the outbreak strain in the Taylor Farms processing center.  E.coli O168:H8 with a Shiga toxin gene stx2a was identified although additional samples are undergoing whole genome sequencing.

McDonald’s switched the supplier of onions and has resumed adding the ingredient to Quarter Pounder sandwiches, resulting in resumption of halitosis.

The earlier food safety concern has obviously abated.

A recent article by Jonathan Runstadler in Science* highlighted the risk of avian influenza H5 clade 2.3.4.4b to wild bird, terrestrial and aquatic mammalian populations.  Although losses to commercial poultry have been quantified, the magnitude of mortality among diverse avian taxa is unknown.  According to the Convention on The Conservation of Migratory Species of Wild Animals and the Food and Agricultural Organization, avian influenza is a panornitic that has affected as many as 500 species of wild birds since 2020.  Reflecting the situation in commercial poultry, avian influenza in wild and migratory avian species is less seasonal and now year-round in incidence.  A number of endangered species have been highlighted in attempts at understanding the magnitude of infection.  Obviously, the California condor is at extreme risk and the small remaining population justified capture and vaccination.  Other species including the Barnacle Goose, Dalmatian Pelican, Northern Gannet and Roseate Tern populations have been severely diminished. 

Emergence of H5N1 in marine mammals along the Pacific littoral demonstrates susceptibility of a wide range of seal and sea lion species with obvious animal-to-animal transmission.

The article stressed that “avian influenza in wild birds extends beyond classic epidemiologic principles of contact and incorporates the effects of climate change, habitat destruction and host species behavior.” The article called for enhanced surveillance of wildlife populations and developing an understanding of the factors contributing to infection.

It is evident that frequent and extensive outbreaks in poultry are contributing to infection of domestic resident birds including scavenger species such as black vultures and raptors.  Persistence of avian influenza H5N1 and possibly other emerging H5 and H7 serotypes will perpetuate outbreaks among commercial poultry. This suggests the need for protective vaccination given that extreme biosecurity does not provide absolute protection.  Evidence that close contact with infected flocks and dairy herds can result in zoonotic infection is obviously of concern as recombinant events and mutations may result in a more pathogenic or even contagious strain impacting the human population.

*Runstadler, J., (2024)  Global Influenza Threatens Conservation, Science 336:618-619

Negotiations to reach a Master Contact between the U.S. Maritime Alliance (USMX) and the Longshoremen’s Association (ILA) representing workers on East coast and Gulf ports has reached an impasse over the final issue relating to automation.  Most outstanding items have been resolved after four days of intense negotiations.  The ILA is accusing USMX of failing to adhere to a commitment not to introduce various forms of automation.  According to USMX the introduction of automation will improve efficiency but not at the expense of jobs.  Modernization is necessary to maintain the viability of ports and to improve working conditions and safety.

Understandably, ILA is concerned over job security having observed the effect of mechanization and robotics in the auto industry. ILA regard semi-automation as a slippery slope ultimately developing into full automation and the inevitable loss of jobs.

In early October, after a brief strike, the ILA agreed to continue working with a tentative agreement extending to mid-January 2025.  Political considerations during the pre-election weeks resulted in a hands-off approach by the White House concerned over disaffection of unions if it intervened directly and relying on jawboning.  The situation will be different under the incoming administration since the Taft-Hartley Act would certainly be invoked, forcing workers to return to work in the event of a strike. This places pressure on both the ILA and the USMX to reach an agreement. Based on the weaker position of the ILA, it is anticipated that the dispute will be resolved by acceptance of limited automation before the January 15^th deadline.

The Food and Drug Administration in cooperation with the Environmental Protection Agency has announced the registration of an antimicrobial additive for irrigation water to reduce or eliminate contamination of green produce.  According to the press release, use of the compound is intended to “significantly mitigate risks and improve the safety of the water used in growing crops”.  The University of Arizona has assisted the two federal agencies to develop a protocol to test compounds and to establish efficacy.

Surely the FDA is looking through the wrong end of the telescope in attempting to mitigate foodborne bacterial infections.  Pathogen reduction should not be achieved through treating vast quantities of contaminated water used to irrigate fields.  Emphasis should be placed on decontaminating the product during processing and prior to packaging.  Treatment of irrigation water appears to be the hit-or-miss approach compared to application of a positive kill step prior to distribution. Whether as a spray, immersion or applying electron beam irradiation, a suitable process would be easier to control at packing and would conform to an HACCP approach to ensuring freedom from foodborne bacterial pathogens.

According to a CoBank Knowledge Exchange report consumers may be turning from turkeys as the centerpiece of their Thanksgiving meals. Turkey features were down by one-third for Thanksgiving 2023 compared with five years previously.

Turkey production has declined since COVID for a number of reasons.  These include susceptibility of growout farms to avian influenza, production difficulties including turkey rhinotracheitis and other infections that affect either hatchability or growth rate. Consumption of whole birds may be limited by fewer large family gatherings for Thanksgiving.

USDA project 2025 turkey production at 5,165 million lbs. approximately 6.4 percent lower than in 2024.  This is reflected in a decline in per capita consumption to 13.7 lb. in 2025 partly compensated by a 2.9 percent in exports to 530 million lbs. representing 10.3 percent of production.

Grubhub the third-ranked U.S. food delivery service owned by Just Eat Takeaway (JET) based in the Netherlands was acquired in 2020 for $7.3 billion.  Wonder will now pay $650 million for the business, representing a considerable markdown for JET.

Wonder based in New York operates ghost kitchens and operates a delivery service from 28 locations.  Their business model is to prepare meals in central kitchens to be transported to restaurants for final preparation and serving.

The Grubhub acquisition will be complimentary to the existing network of Wonder drivers given a resource comprising 200,000 carriers and a claimed 400,000 businesses served.

Shareholders have filed a lawsuit, Stradford v Chipotle Mexican Grill in the U.S. District Court, for the Central District of California. The plaintiffs allege that management overreacted to consumer complaints over portion size. Following the “please sir, can I have some more” postings on social media, Chipotle apparently overcompensated by serving “generous portions” at 3,600 restaurants that reduced margins.

The lawsuit seeks damages for stockholders and those with options over the period February 8 to October 29, 2024.  Despite resignation as CEO and Board Chairman, Brian Niccol, was named as a defendant along with CFO Jeff Hartung, Personnel and Chief Strategy Officer and Scott Boatright the current CEO and successor to Brian Niccol.

A review of recent submissions to the World Organization for Animal Health (WOAH) indicate the extent of reported outbreaks of highly pathogenic avian influenza.  During the first half of November, diagnoses among commercial poultry were reported from Ukraine, Portugal, Bulgaria, Hungary and the United Kingdom.

In almost all cases, H5N1 virus was isolated from free-living migratory and resident birds before outbreaks in commercial poultry. Reports on cases follow sequence initially involving backyard farms followed by larger commercial units.

Avian influenza has been recorded on six continents including Antarctica and has involved terrestrial mammals including scavenging and carnivorous species.  The emergence of bovine influenza-H5N1 with limited zoonotic transmission without contagion has occurred since March 2024. Substantial mortality among marine mammals along the Pacific coastline of South America suggests animal-to-animal transmission among seals and sea lions.

Asia has also reported recent outbreaks of H5N1 among wild birds.  Commercial flocks have been affected in Taiwan, Korea and presumably China. This nation employs vaccination but reports of outbreaks in commercial flocks and among human contacts are subject to central government policy on limited release of information.

Avian influenza has attained panornitic status with the potential to disrupt production and trade in eggs and poultry meat and representing a threat to the survival of endangered susceptible avian species.

According to a survey conducted by market research company Expana, the cost of a traditional Thanksgiving meal in 2024 has dropped by three percent.  The Expana Main Meal Index includes turkey, ham, vegetables, starches and dessert.

Turkey prices are lower than 2023 despite reduced production.  Ground beef currently averaging $4.83 per lb. is 4.1 percent lower than for Thanksgiving 2023, chicken breast at $4.23 per lb. is up 2.1 percent and chicken legs at $1.45 per lb. down 5.8 percent year-over-year.

The American Farm Bureau Federation projection of the cost of a Thanksgiving meal using a standard basket  will cost $58 for 10 guests. The total will be 5 percent less than for 2023 but up 20 percent over five years relecting the post COVID years of inflation. The 16 lb. turkey comprised 44 percent of the cost of the meal.

The Minister of Labor, Steven McKinnon, has invoked Section 107 of the Canada Labor Code forcing striking workers at ports to return to work and to impose binding arbitration on unions and employers.

The Liberal Party government opted for intervention despite the reality of disaffection among union voters. The reality forced action recognizing the $1 million per day impact on the economy and disruption of supply chains.

Workers at the ports of Montreal, Quebec, Vancouver and other British Columbia trade portals will resume operations.  Since the strikes have been ongoing since the beginning of November, it will take weeks to clear the backlog of containers and especially containers that has affected movement between the U.S. and Canada.

The move by the government of Justin Trudeau was welcomed by the Retail Council of Canada and similar organizations, including importers and exporters in the U.S.

In justifying the action, Minister McKinnon stated that negotiations between unions and employers had reached a total impasse and continuation would impose economic and reputational damage to Canada.

Government intervention is similar to the action taken in August to force workers employed by Canadian-Pacific Kansas City and the Canadian National Railway companies to resume operations.

Agricultural organizations representing poultry and red meat producers in the E.U. have raised strenuous objections to the proposed Mercosur Trade Agreement that will open the market to imports from Argentina, Brazil, Paraguay and Uruguay.  Although prompted by concern over competition, opponents of the trade agreement have raised valid issues.  The reliability of meat inspection in Brazil is questioned based on the “Carne Fraca” scandal that demonstrated corruption and deviation from acceptable standards. Procedures appear inferior to those in effect in the E.U.  The meat inspection problems that occurred in 2017 have apparently been corrected by the Brazilian Ministry of Agriculture Livestock and Food. 

A recent audit conducted by Germany questioned the use of banned antibiotics including chloramphenicol and oxytetracycline, pesticides and hormones including estradiol in production.  Residues of banned substances have been detected in poultry and meat from the Mercosur nations.

Adoption of the E.U.-Mercosur Agreement would increase exports of poultry and meat products to the group of 27 nations in excess of 41,000 metric tons of beef and 59,000 tons of poultry meat imported in 2023 from E.U.-approved abattoirs and poultry processing plants.

It would appear that E.U. agricultural organizations are advancing food safety considerations as a means to block competition from nations and principally Brazil, that have lower production costs despite the additional expense of transport.

Following Federal Aviation Administration approval of the MK30 Delivery Drone, Amazon has commenced delivery from their Tolleson, AZ. distribution center.  The MK30 drone can deliver payloads of up to five lbs. in weight and will be suitable for delivery of prescriptions and urgently required small items.

The Amazon Prime Air service follows initiatives by Walmart in cooperation with Wing in Dallas that has proven to be both practical and popular.

USDA -APHIS has confirmed H5N1 avian influenza in a non-commercial flock in Honolulu County, Hawaii.  This is the first diagnosis in the state during the ongoing HPAI epornitic that commenced in the ‘Lower 48’ in 2022. At the time of publication a second case has been recognized

In the absence of reports on sequencing of the H5 isolate the source is a matter of speculation. Migratory marine birds may have introduced infection since Hawaii falls within the Pacific flyway. Alternatively the virus could have been carried to the state by fomites or following illegal clandestine movement of game fowl from the U.S. mainland, Guam or other areas.

A concerning observation is a report of isolation of H5 RNA in wastewater sampled from Oahu on November 7^th. The isolate is currently undergoing characterization to determine whether it is an H5N1 strain.

Hawaii would be a suitable test location to evaluate the benefit of vaccination since the state does not export poultry.  The County of Honolulu includes a number of commercial egg production farms that could be protected. By selective vaccination outbreaks of HPAI in the County of Honolulu could be compared to the incidence in backyard flocks and the feral chicken population of other islands over coming months. This could confirm the benefit of vaccination.

Measure J was soundly defeated by a margin of 85 to 15 percent. If adopted it would have effectively eliminated commercial-scale poultry and livestock production in the heavily rural county.  The Sonoma County Economic Development Board estimated that 11 CAFOs and 49 medium-sized facilities would have been affected, creating unemployment and reducing the availability of both poultry and red meat and limiting revenue for the county.

The result of the ballot on Measure J should deter organizations pursuing vegan and extremist environmental agendas to refrain from attempts at disrupting livestock agriculture conducted in accordance with state and federal recommendations.

In research sponsored by the USPOULTRY Foundation, Dr. Donald Reynolds of the School of Veterinary Medicine and Biomedical Sciences, University of Nebraska developed an embryo lethality assay to distinguish between highly virulent and pathogenic strains of Enterococcus faecalis.  Concurrently, his laboratory applied matrix assisted laser desorption/ionization mass spectrometry (MALDI-TOF MS) to distinguish among isolates. 

Research was conducted on 52 isolates of E. faecalis obtained from broilers, laying hens, turkeys and game birds.  The embryo lethality assay provided a semi-quantifiable index of pathogenicity.  This is necessary since additional molecular assays on either high or low pathogenicity strains would indicate the exotoxins produced that are responsible for embryo mortality and specific pathology.  The MALDI-TOF MS assays could distinguish between virulent and innocuous strains but lacked the ability to distinguish among strains of intermediate pathogenicity suggesting additional research to refine the technique.

Cecelia Glembocki, Director of the Virginia Egg Council, has retired after a distinguished career extending over four decades. She was responsible for developing a Lunch and Learn program for hospitals to promote egg dishes for patients.  She served as a liaison between the egg industry and the White House facilitating sponsorship of the Easter Egg Roll now organized by the American Egg Board.

Cecelia will be succeeded by Kirby Moir, a registered dietitian with considerable experience in outreach and education.  Mary Rapaport will continue as spokesperson for the Virginia egg industry and will work with extension agents and consumer organizations to promote eggs both in Virginia and the Delmarva region.

The USDA will offer $10,000 grants to educational institutions, trade associations and non-governmental organizations under the Sustainable Agricultural Research and Education program.  Grants can be used to conduct training and networking projects for local and regional meat and poultry production systems that incorporate sustainable practices including pasture raised management.  Recent grants have encouraged the production of small-flock poultry operations that are inherently less efficient and less sustainable than the conventional contract-integrator model using confined housing.

The SARE program is yet another example of using taxpayer funds in a futile attempt to create an alternative to the existing, functional and highly efficient commercial production of red meat and poultry. Since assuming office USDA Secretary Tom Vilsack and his appointees in the outgoing Administration have attempted to promote and support a non-sustainable and financially non-viable model based on small-scale production.

In the November 5^th election, Denver voters rejected Ordinance 309 by a 65 percent margin.  Promoted by Pro-Animal Future, a welfare advocacy group, the ordinance would have forced closure of Superior Farms, the only remaining slaughter plant within the City of Denver. Adoption of the ballot initiative would have displaced 160 workers and required alternative processing facilities for up to 1,500 lambs each working day.  Ordinance 309 was supported by various welfare and pro-vegan entities that collectively raised $300,000 to support the initiative. 

After an initial failure to actively oppose 309, civic organizations and the meat industry organized an aggressive campaign with the formation of groups including “Hands Off My Hat Denver” and “Stop the Ban, Protect Jobs” and “Local Food, Strong Denver”.  Contributors to the opposition campaign included the Meat Institute, the Colorado Livestock Association, the American Sheep Industry Association and a substantial amount from Superior Farms, an employee-owned enterprise.

Concurrently, voters also rejected Ordinance 308 that would have banned the processing and sale of animal fur within Denver.

The response by civic organizations, labor unions and the meat industry to proposed Ordinance 309 is significant since organizations opposing meat processing will attempt to introduce bans affecting slaughter plants in other jurisdictions.  The response by voters demonstrates a disinclination to respond to pro-vegan and woke ballot initiatives.

Veterinary authorities in England have identified a case of Highly Pathogenic Avian Influenza on a commercial farm (presumably free-range table egg production) attributed to H5N5 strain in the county of Yorkshire.

Appropriate quarantine with depopulation of the flock and zone surveillance was implemented.

This case was preceded by isolation of both H5N1 and H5N5 strains in migratory and free-living birds consistent with observations in Canada, the U.S. the E.U and in Asia.

The announcement of the outbreak was accompanied by recommendations to enhance biosecurity. It is evident that the free-range producers will have to confine flocks in high-risk areas.  The U.K. Chief Veterinary Officer, Dr. Christine Middlemiss, issued the usual statement reassuring consumers that the infection is not transmissible to humans.

On November 5^th Costco Wholesale Corporation (COST) reported sales for October 2024 covering the four weeks ending November 3^rd.  For the period, sales attained $20,030 million, up 7.2 percent from the value of $18,680 million during the corresponding month in 2023.

Same store sales (excluding fuel and foreign exchange) increased 5.8 percent for the U.S.; 8.7 percent for Canada and 8.4 percent for international warehouses.  Overall, same-stores sales advanced by 6.5 percent and E-commerce was 19.3 percent higher.

Costco closed on November 6^th after release of the data at $896.00 subsequently rising in the post-election surge to an open of $936.57 on November 12^th.  COST market capitalization was $413,330 million on November 12^th and the share has traded over a 52-week range of $572.24 to $962.00 with a 50-day moving average of $894.30.

Costco Wholesale Corporation operates 892 warehouses with 615 in the U.S.; 108 in Canada; 40 in Mexico and the remainder in nine other nations.

The TGI Friday’s chain of company-owned U.S. restaurants co-owned by TriArtisan Capital Advisors and Sentinel Capital Partners, has filed for Chapter 11 bankruptcy.  The Bank of San Antonio is providing bridging funding while the company restructures.  Currently TGI Friday’s operates 39 company-owned restaurants in the U.S.  The bankruptcy filing does not affect franchised operations that are independently owned and the TGI Friday’s franchisor that owns the brand and intellectual property.  The TGI Friday’s chain posted sales of $728 million in 2023 continuing a downward trajectory associated with suspension of operations in numerous locations since 2021 marking the beginning of COVID restrictions.

Casual dining has undergone a loss of patronage as customers have either moved down-market to QSRs or have continued with a preference for eat-at-home.  Bankruptcies in 2024 have included Red Lobster, essentially the result of self-inflicted mismanagement but also other fast casual chains including Tijuana Flats.

Albertson’s Companies recently settled with the state of California for $4 million to resolve allegations that their banners operating in the state “unlawfully charged customers prices higher than their lowest advertised or posted price” In addition it was alleged that inaccurate weights were printed on labels. The settlement covered 589 stores in California under banners owned by the Albertson’s chain including Safeway and Vons.

The settlement elicited the intervention of Senator Elizabeth Warren (D-MA) and Rep. Adam Schiff (D-CA) who are calling for a federal investigation by the Federal Trade Commission and the Department of Agriculture to determine whether Albertson’s activities represented deceptive acts in violation of Section 5 of the Federal Trade Commission Act and the Fair Packaging and Labelling Act.  The initiative by Senator Warren and Rep. Schiff is supported by fourteen members of Congress.

In response Albertson’s Companies stated that they are committed to ensuring that customers pay the lowest advertised prices for products.  The Company maintains that they follow local pricing rules and regulations and will correct discrepancies.  Albertson’s maintains that it has made changes to reduce the risk of repetition of “errors” relating in overcharging.

It is evident that the recent history relating to Albertson’s in California and allegations raised in the Oregon, Washington and Colorado litigation will influence the final decision regarding the Kroger-Albertsons merger.  The results of the November 5^th election and the anticipated changes that will take place in the DOJ and FTC may alter the outcome of Federal opposition to the merger of the two pure-play supermarket giants.

To date, 2.7 million pounds of products processed at the Jarratt, VA plant operated by Boar’s Head have been returned.  This represents approximately 40 percent of the total recall and assumes that 4.3 million pounds comprising 71 processed products were consumed since product is presumably now beyond expiry date. 

The Centers for Disease Control and Prevention have documented 59 cases of listeriosis with ten fatalities among nineteen states.  Since no incident cases have been recorded in recent weeks, the event is probably now over, notwithstanding an incubation period that may extend to 70 days.  It is evident that many mild cases of listeriosis occurred that were not diagnosed.  The elderly, pregnant and immunosuppressed are most susceptible to listeriosis and developed symptoms requiring medical intervention.

At this time, the Jarratt plant remains indefinitely closed.  The brand image of Boar’s Head and Old Country are profoundly degraded, and the sales volume of deli meats has fallen sharply since July.

Apart from the legal claims, the integrity of the Food Safety and Inspection Service and the Virginia Department of Agriculture inspectors responsible for overseeing the plant is in question by Congress. The consequences of the outbreak are expected to resonate throughout the processed meat industry through to 2025.

Health authorities have confirmed that a teenager in critical condition is currently undergoing treatment at the BC Children’s Hospital following infection with an H5 strain of influenza.  Epidemiologic investigations are in progress to determine the source of exposure.  Contacts of the patient are undergoing examination but without reports of symptoms consistent with infection.

Dr. Bonnie Henry, Health Officer for British Columbia stated, “This is a rare event and while it is the first detected case of H5 in a person in Canada there have been a number of human cases in the U.S. and elsewhere.”

In a November 1^st announcement, the USDA announced that families of students receiving free and reduced-price school meals will not be charged supplementary fees.

Secretary of Agriculture Tom Vilsack stated, “While today’s action to eliminate extra fees for lower income households is a major step in the right direction, the most equitable path forward is to offer every child access to healthy school meals at no cost.  We will continue to work with Congress to move forward that goal, so that all kids have the nutrition they need to reach their full potential.”

Children from families with incomes under 185 percent of federal poverty guidelines will be eligible, representing approximately one million recipients for reduced-price meals.  Ultimately the ban on junk fees will be extended to a total of 30 million children receiving school meals each day. 

The action taken is in response to investigations by the Consumer Protection Financial Bureau that identified onerous charges in the form of  ‘processing fees’ imposed by third party agencies. In some cases fees exceeded the cost of breakfasts and lunches.  Fees will be capped at 30 cents and 40 cents respectively for these meals.

Introduced in 2022 and conforming to the supply chain standard GS1, Walmart is apparently leading in adoption of 2D barcodes among retailers.  The 2D barcode is imprinted with thousands of digits that will incorporate sale-by date, available discounts and will allow stores to track inventory and to implement recalls.  Consumers who scan 2D barcodes will have information on nutritional content, allergens, promotions and food preparation.

Walmart is also evaluating AI voice applications to facilitate repeat orders and for customer convenience using online ordering and curbside pickup.

It is evident that a proportion of workers depopulating flocks diagnosed with H5N1 or in close contact with herds excreting the virus in milk are susceptible to infection   Approximately fifty cases of clinical H5N1 have been documented without contagion although structured sampling for virus and antibody response has yet to be conducted.

Notwithstanding the limited zoonotic ability of H5N1 at present, a leading specialist in the molecular biology of influenza viruses is concerned over emergence of infection in both marine and terrestrial mammals. Dr. Richard Webby, the Director of the World Health Organization Collaborating Center for Studies on the Ecology of Influenza in Animals and Birds at St. Jude Children’s Research Hospital expresses a conservative view on the potential for extensive infection of humans based on current studies of viruses isolated from dairy cattle and poultry flocks.  He stated, “From where we are now to a pandemic virus, reassortment alone is not going to get us there.”  He added, “ It is going to take reassortment followed by some critical mutations necessary for the virus to spread efficiently among humans.  The specific changes in the genome that would facilitate person-to-person spread (contagion) have not been detected in any of the genetic sequences of isolates from human cases.  In the event that mutations do occur in the future to increase the ability of the virus to infect the lower respiratory tract, or to result in contagion, the situation will obviously change.

It is considered essential that all people coming into contact with live poultry at farm and processing level should be vaccinated against the seasonal influenza viruses.  This would reduce the probability of a reassortment event leading to a novel potentially zoonotic strain.  Reassortment was in all probability the origin of the 1918 worldwide pandemic with catastrophic mortality. The 2009 H1N1 swine flu event was responsible for both clinical cases and a limited number of fatalities compared to the post-World War I outbreak.

Until H5N1 vaccines are deployed among farm workers in the U.S., sensible precautions including the effective use of PPE should be followed.

In a November 8^th release, the American Egg Board announced a trade mission to Mexico over the period November 11-14.  The objective was be to strengthen long-term relationships in the most important U.S. export market.

Emily Metz president and CEO of the AEB commented, “Our commitment to taking our egg farmers on international missions like this one to Mexico is a key component of our broader global strategy to increase egg industry exports over the next five years.”

The trade mission will be in partnership with the USA Poultry and Egg Export Council and will establish and reinforce relationships with buyers, traders and processors in Mexico.

Participants in the trade mission will include Nick Jones, the Director of International Marketing for the AEB and representatives of Deb El Food Products, Rose Acre Farms, S&R Egg Farm and Versova.

Significant contacts will include Sigma Alimentos a major food processor, Supermercados Internationales-HEB a major supermarket chain with 62 branches and Sorina, a grocery and department store retail chain with 824 stores under various banners.

In 2023, Mexico imported 15 million dozen eggs valued at $17.4 million an almost three-fold increase over the previous year.  Over the same period, Mexico imported 4,704 metric tons of egg products valued at $22.8 million.  For the first eight months of 2024 Mexico imported 1.6 million dozen shell-eggs valued at $2.8 million and 294 metric tons of egg products valued at $2 million. These values were approximately 60 percent lower compared to the corresponding period in 2023 when lower prices prevailed. 

Decisions by Mexico as with all importing nations are based on need, availability and above all price.  Due to seasonal outbreaks of HPAI since 2022, escalation in U.S. prices for shell eggs and products and the needs of Mexico have determined the volume of production independently of promotion, relationships and marketing endeavors.

Ovo-Vision, based in Holland, a leader in ERP software solutions for the egg industry, has established a strategic partnership with Innovia Consulting of Wisconsin to expand software services in the U.S., Canada and Mexico. This collaboration, will allow Ovo-Vision to expand their existing U.S. team by leveraging the expertise of sixty Innovia consultants experienced in Microsoft Dynamics 365 Business Central as applied to agricultural and food industries.

The strategic partnership will strengthen the presence of Ovo-Vision in North America and expand services to meet the growing demand for integrated software solutions for egg producers and packers across the U.S., Canada and Mexico. Jack Jenniskens, CEO of Ovo-Vision stated “Our partnership with Innovia Consulting represents a significant milestone for Ovo-Vision as we continue to scale and deliver exceptional value to our clients in North America. He added, “Innovia’s extensive experience with Microsoft Dynamics 365 Business Central and its strong presence in food and agriculture aligns perfectly with our vision to deliver innovative software solutions to the egg industry that support the specific needs of our clients.”

Innovia Consulting has a proven track record of success with Microsoft Dynamics 365 Business Central, and their dedicated team has helped numerous organizations in food and agriculture streamline their operations and drive growth. Alan Wyne, CEO of Innovia Consulting stated, “We’re excited to collaborate with Ovo-Vision to bring our extensive expertise in applying Microsoft Dynamics 365 Business Central to a new segment of agribusiness.” He added “With this partnership, we’re well-positioned to provide high quality, scalable solutions that empower businesses to thrive in an increasingly competitive and more complex landscape.”

Ovo-Vision is a dedicated and dynamic team of developers and consultants, committed to

delivering innovative ERP software solutions tailored to the unique needs of egg businesses for over 25 years. With a strong presence in Europe, Ovo-Vision has built a reputation for excellence in providing integrated software solutions that drive operational efficiency and growth.

Innovia Consulting has supported clients with software and applications for over forty years. Innovia is a leading provider of Microsoft Dynamics 365 Business Central services to a wide variety of clients in agriculture and food processing to achieve efficiency and growth.

In a July 24^th release, Chipotle Mexican Grill (CMG) reported on the 3^rd quarter of fiscal 2024 ending September 30^th.

For the period, the company earned $387 million on total revenue of $2,794 million including delivery payments, generating a diluted EPS of $0.28.  For comparable Q3 of fiscal 2023, Chipotle earned $313 million on total revenue of $2,472 million.  

Total revenue increased by 13.1 percent over Q3 FY 2023 and comparative same store sales were up by 6.0 percent. Digital sales represented 34 percent of revenue in the most recent quarter. Restaurant operating margin increased from 16 percent to 16.9 percent in Q3 2024.

During Q3, Chipotle opened 86 new stores, with 73 equipped for drive-through service. Chipotle operates 3,662 stores with average annual sales of $0.8 million.

In commenting on results, Scott Boatwright, Interim CEO stated “ Our focus on exceptional people, food and throughput and the long-awaited return of Smoked Brisket drove another quarter of strong results led by transaction growth," said, Chipotle. "Our teams work hard to deliver extraordinary value to our guests as they provide our fresh, delicious and customizable culinary experience, at accessible prices to millions of people every day. They are the backbone of Chipotle and, together with our support centers, we will continue to execute against our five key strategies that help us win today, while we grow our future. This will help us to achieve our long-term target of reaching 7,000 restaurants in North America and move towards a more global brand."

For 2024 Management retained projections with a sales increase of “mid to high single digits,” a range of 285 to 315 new stores with 80 percent equipped for drive through delivery.

On September 30^th Chipotle Mexican Grill posted assets of $9,011 million with long-term lease obligations of $4,213 million.  Market capitalization was $79,320 million on November 7^th.  During the past 52-weeks, CMG has traded over a range of $41.92 to $69.26 with a 50-day moving average of $57.35. CMG closed pre-release on October 29^th at $60.49 but closed on October 30^th post-release at $55.75. On a trailing twelve-month basis, operating margin was 17.5 percent and profit margin 13.5 percent.  The Company generated returns of 14.0 percent on assets and 45.7 percent on equity.

In a November 7^th release, Vital Farms Inc. (VITL), a Certified B Corporation posted financial results for the 3^rd quarter of FY 2024. Earnings exceeded consensus by 14 percent but revenue was consistent with estimates. This specialty egg producer competes directly with Eggland’s Best and Hidden Valley, both cooperatives and and other producers and distributors of USDA Certified Organic and pasture-raised products including the Happy Egg/Egg Innovations combination and Pete and Gerry’s. The Company experiences the same pressures of feed cost, contractor remuneration, labor and transport as competitors in a fluctuating market environment less restrained by consumer concern over inflation.

For Q3 FY 2024 ending September 24^th 2024, net income was $7.5 million on revenue of $145.0 million with a diluted EPS of $0.17.  Comparable figures for Q3 2023 ending September 29^th were net income of $4.5 million on revenue of $110.4 million with a diluted EPS of $0.11.

Revenue increased 31.3 percent over Q3 2023. Gross margin was 36.9 percent for the most recent quarter (35.2 percent Q3 FY 2023). Operating margin was 6.4 percent (4.7 percent in Q3 2023)

In commenting on Q2 results Russell Diez-Canseco, president and CEO expressed appreciation to employees and the approximately 375 contractors. He confirmed that plans for the second packing plant in Seymour, IN. were in an advanced state.

The Company increased guidance for FY 2024 above the August Q2 2024 report, now projecting revenue of $600 million, (was $590 million) an adjusted EBITDA of $80 million (was $75 million) with reduced capital expenditure of $30 to $40 million due to extended scheduling of projects.

On September 29^th 2023, VITL posted assets of $344.6 million, of which $6.5 million comprised intangibles against long-term debt and lease obligations of $12.7 million. The Company had an intraday market capitalization of $1,590 million on November 7^th compared to $653 million on November 7^th 2023. VITL trades with a forward P/E of 208 and has ranged over a 52-week period from $11.55 to $48.41 with a 50-day moving average of $34.99.  Twelve-month trailing operating margin was 11.6 percent and profit margin 8.7 percent.  Return on assets over the past twelve months was 12.5 percent with a 22.7 percent return on equity.

At close of trading on November 6^th pre-release, VITL was priced at $36.87. Post-release on November 7^th VITL opened at $34.52, subsequently closing at $31.30.

Approximately 35 percent of VITL equity is held by insiders with 77 percent owned by institutions. As of October 15^th 33.5 percent of the float was short.

On October 22^nd, a delegation from Mexico visited Iowa as arranged and coordinated by USAPEEC to establish commercial contacts and to gain a perspective of egg production in the state.  After meetings with Iowa Department of Agriculture officials including the Secretary, Mike Naig, visitors interacted with faculty at Iowa State University and visited Versova, a leading egg producer in the state.

Producers in Florida holding crop insurance through the Hurricane Insurance Protection-Wind Index Program and also the Tropical Storm option will receive $143 million in indemnities as a result of Hurricane Milton.  This program has disbursed $776 million to farmers in 2024 to date with Florida receiving $340 million since the program was introduced in 2020.  Hurricane Milton severely damaged citrus, and cotton crops and timber as previously reported.

In announcing the payments, Secretary of Agriculture Tom Vilsack stated, “Florida farmers, livestock producers and forestland owners have been hit hard by hurricanes this year and we are continuing our efforts to help producers recover following hurricanes including Milton.”  In addition to crop insurance the USDA Farm Service Agency is offering additional disaster assistance including loans for forest rehabilitation, replacement of fences and herd mortality.

Following dismissal of lawsuits against McDonald’s, Wendy’s and Taco Bell, a new lawsuit alleging misrepresentation in advertising has been filed against Subway.  According to the complaint, advertisements show the Subway Steak and Cheese sandwich “with meat bursting from within reaching as about as high as the surrounding bread.”  The lawsuit claims that the reality is a more meager inclusion of meat with an allegation that advertisements show double the filling than actuality.

QSRs should obviously exercise more restraint in their depictions of sandwiches since they create anticipation that is not recognized by customers.

Northland Boom has released the E-Drive Vaccinator developed specifically for aviary and barn housing.  The unit is self-propelled and is designed for optimal ergonomic operation.  The E-Drive Vaccinator uses a dual battery system to power the drive unit and the sprayer respectively allowing operation for two hours on a single charge.

The single boom is equipped with adjustable nozzles to achieve droplets size ranging from 20 microns (extremely fine) to 200 microns (very coarse) with a delivery rate of 4 to 28 gallons per hour depending on adjustment of nozzles.  For additional details and pricing access www.northlandboom.com or contact brent@northlandboom.com

Indonesia and Malaysia, collectively responsible for 85 percent of palm oil production are experiencing problems in maintaining output. Recent data suggests a decline of approximately five percent year to date.  This is due to drought induced by the El Nino event, aging trees, cost reductions and a smaller available labor pool.

The USDA October Oil Crops Outlook confirmed that palm oil stocks declined 1.5 million tons from September to 16.1 million tons.  Production in Indonesia for the 2024-2025 season well down by 500,000 metric tons to 46.5 million metric tons. 

Indonesia will use a higher proportion of palm oil in biodiesel increasing blend from 25 percent to 40 percent. This will reduce availability and lead to higher vegetable oil prices.

USPOULTRY recently funded an economic impact study of the U.S. poultry industry conducted by Dunham and Associates.  It was calculated that the egg industry is responsible for 164,000 jobs generating $10.5 billion annually in wages, $58 billion in economic activity and $4.7 billion in government revenue. 

Nath Morris president of USPOULTRY stated, “This valuable report shows the positive economic impact the poultry and egg industry has on our Nation and communities and we are pleased to continue funding the annual review.”  Data is posted on interactive websites that can be viewed and categorized by state, congressional district or county.  Access www.eggsfeedamerica.com

USAPEEC Latin America participated in organizing a seminar on avian influenza held in Bogota, Columbia from August 21^st through August 24^th.  Thirty-three participants representing government and veterinary agencies in 14 Central and South American countries participated. 

Topics presented included the National Poultry Improvement Plan, the National Avian Influenza Prevention Surveillance and Control Program and the National Plan for AI Response.  Presentations by APHIS confirmed the measures employed by USDA to ensure a safe, secure and wholesome poultry supply from the U.S.

 It is evident that the emphasis of the USAPEEC the program was on acceptance of the World Organization of Animal Health avian influenza standards that allow for trade during ongoing AI outbreaks. The overriding principles should be acceptance of ‘compartmentalization’ for breeding operations and ‘regionalization’ for commercial production destined for export.

The November 5^th release of the Purdue University-CME Group Economy Barometer Index for row-crop production showed an unexpected rise in October by a substantial 27 points to 115 points. The Index of Current Conditions was up 19 points from September to 95. The Future Expectations Index was up 30 points points to 124. The Index is derived from the responses of 400 U.S. farmers and was conducted from October 14^th to 18^th.

Evident conclusions from the survey are that farmers were more optimistic in October compared to September but there are still concerns over the prices for their commodities despite (but due to) bountiful yields in 2024. In contrast sentiment is reinforced by declining inflation, lower interest rates and hence production costs. The outstanding concerns were:-

• A decline in prices for corn and soybeans reflecting disparity between supply and demand
• Declining prospects for exports with competition from South American producers and declining demand by China
• High prices for seed, fertilizer and other inputs
• The prospect of higher energy costs with turbulence in the Middle East
• The outcome of the 2024 national election creating uncertainty over farm policy and support
• Failure of Congress to pass a Farm Bill
• Decreased demand for biofuels

Many respondents indicated that they would carry higher debt burdens through 2024 and into 2025 mainly due to increased costs of inputs including seed, fuel and fertilizer for the current season. More than half of the participants considered that the financial condition of their farms was inferior to 2023 with the Farm Financial Performance Index at 90 for October 2024 compared to 93 for October 2023. The September 2024 value was only 68, indicating a surge in positive sentiment from the preceding month.  

According to the Ministry of Agriculture, Food and Rural Affairs of South Korea, an outbreak of Highly Pathogenic Avian Influenza was reported in a small flock of less than 1,000 chickens and ducks.  The farm is located in Donghae in the northeastern quadrant of the nation.  This is the first case reported for the fall season and five months after the last diagnosed outbreak.

In previous years a pattern of initial isolation of H5N1 virus from migratory waterfowl was followed by sporadic outbreaks in free-range ducks and geese and then spread to large egg and broiler farms.

 Effective prevention will require vaccination as an adjunct to biosecurity that is in any event inoperative for free range flocks exposed to virus shed by waterfowl.

In accordance with newly implemented regulations, manufacturers of food products in the E.U. must discriminate against suppliers that indirectly contribute to deforestation.  Major producers including Nestle, Unilever and Danone have indicated that they will source soybeans from nations other than Brazil based on extensive deforestation of the Amazon rainforest.  Despite the fact that the E.U. Commission has proposed a 12-month delay in implementation, importers are already purchasing from alternative sources. Hopefully the U.S. may benefit notwithstanding the GMO status of all but a sliver of our domestic production. 

Aprosoja representing soybean producers in Brazil has condemned the Danome decision that apparently disregards the claimed natural regeneration of Rainforest.  The group is calling for a boycott of Danone products in Brazil.  Within that nation, Danone uses local soybeans, but the European component of the Company is abiding by the E.U. directive.  The Agriculture Ministry of Brazil has characterized the E.U. directive as “discriminatory, unreasonable and untimely”.

If the American Soybean Association is looking for an issue to differentiate U.S. soybeans from those produced in Brazil, deforestation would appear to be an important market attribute.

The USPOULTRY Foundation has awarded grants totaling $324,215 to allow universities and colleges to recruit students to poultry-related programs.  Universities with poultry science departments will receive grants ranging from $30,000 to $50,000 each.  Twenty-two other institutions across the U.S. with poultry-related programs and significant in-state industries will receive from $2,500 to $10,000 each.

Jarod Morrison, Chairman of the USPOULTRY Foundation, stated, “Our industry thrives on the creativity and passion of the next generation.  By showcasing the diverse career opportunities available, we empower talented young individuals to step into leadership roles.”   He added, “The USPOULTRY Foundation recruiting grants play a crucial role in guiding colleges and universities to inspire students to pursue careers in the poultry sector.

In an October 30^th release, Bunge Global Limited (BG) posted financial results for the 3^rd quarter of FY 2024. The Company exceeded analysts’ projections on adjusted earnings by 7 percent. Bunge can be regarded as a bellwether for the commodities trading and processing sector. Along with competitors ADM, Cargill, Cofco and Dreyfus, all are subject to the risks of currency fluctuation, geopolitical events, climatic extremes, and increased cost of ingredients, labor and transport in a competitive world environment still restrained by COVID and conflict in the Ukraine and Middle East.

For Q3 of FY 2024 ending September 30^th, net income was $221 million on total revenue of $12,908 million.  Comparable figures for the 3^rd quarter of fiscal 2023 ending September 30^th were net income of $373 million on total revenue of $14,227 million. Diluted EPS fell from $2.47 for Q3 of FY 2023 to $1.56 for the most recent quarter. Revenue was down 9.3 percent from Q3 FY 2023. Gross margin declined from 7.4 to 6.0 percent and operating margin fell from 4.2 to 2.6 percent for the most recent quarter compared to Q3 FY 2023.

In commenting on results Greg Heckman, CEO, stated “Our team delivered a strong third quarter, staying nimble and leveraging our global platform to capture opportunities against shifting market dynamics around the world. We made progress on key priorities, including closing the sale of the BP Bunge Bioenergia joint venture and delivering value to our shareholders through share repurchases. At the same time, we continued to advance integration planning for our announced combination with Viterra, and have made progress toward the remaining regulatory approvals. He concluded “The third quarter has again proven the value of our global footprint, operating model and approach, which underscores the benefit of further diversification across geographies and crops that our combination with Viterra will bring.”

Bunge retained the FY 2024 projection for adjusted EPS at $9.25 based on evident headwinds and segment performance year to date. Capital expenditure will range from $1,200 to $1,400 million.

On June 30^th 2024, Bunge posted assets of $25,267 million, against long-term debt and other obligations of $6,415 million. The Company had an intraday market capitalization of $11,540 million on November 1^st. BG trades with a forward P/E of 8.7 and has ranged over a 52-week period from $82.45 to $114.92 with a 50-day moving average of $95.61. Twelve-month trailing operating margin was 3.1 percent and profit margin 2.1 percent.  Return on assets over the past twelve months was 5.0 percent and the return on equity 10.9 percent.

BG closed at $87.95 on October 29^th and closed at $86.86 post release on October 30^th.

In a release dated October 30^th, Sprouts Farmers Market (SFM) reported results for the 3^rd quarter of FY 2024 ended September 29^th. Sprouts is regarded as a high-end grocery chain competing for health-conscious and affluent suburban consumers. Results for the quarter beat estimates on both the top and bottom lines and for growth in same store sales.      

For the period, the Company posted net income of $91.6 million on net sales of $1,946 million with a diluted EPS of $0.91.  Comparable figures for the 3^rd quarter ended October 1^st 2023 were net income of $65.2 million on net sales of $1,713 million with a diluted EPS of $0.64.

Comparing Q3 of 2024 with Q3 of the previous fiscal year, Sprouts Farmers Market increased revenue by 13.6 percent. Gross margin rose to 38.1 percent from 36.5 percent in Q3 2023.  Operating margin was 6.3 percent compared to5.1 percent for Q3 2023. Sprouts generated a comparable same-store sales growth of 8.4 percent compared to the corresponding 3^rd quarter of 2023.

In commenting on results, Jack Sinclair, CEO, stated, “The third quarter was another exceptional performance by our Sprouts team." He added, "We are driving robust traffic growth and continue to execute at a very high level. We remain confident in our long-term growth potential."

Guidance for FY 2024 was raised to include net sales growth of 12.0 percent; a comparable same-store sales increase of 7.0 percent; adjusted diluted EPS of $3.64 to $3.68 and net unit growth of 33 stores requiring capital expenditure of $205 to $215million.

The company posted total assets of $3,585 million including $590 million as goodwill and intangibles with the balance sheet detailing long-term debt and lease liabilities of $1,562 million.

Sprouts Farmers Market had a market capitalization of $12,830 million on November 1^st and has traded for the past 52-weeks over a range of $39.98 to $135.10 with a 50-week moving average of $110.08 and has a forward P/E of 33.8

On October 30^th SFM closed at $119.00 and closed post-release on the following day at $128.34, up 7.8 percent. Sprouts generated a trailing twelve-month operating margin of 6.3 percent and a profit margin of 4.7 percent. Return on assets was 9.2 percent and the return on equity attained 28.6 percent.

Sprouts employs 35,000 and operated 428 stores in 23 states on September 29^th 2024

Publix, a privately held, employee-owned corporation, released limited Q3 FY 2024 financial data on November 1^st for the period ending September 28^th 2024.  Sales for Q3 2024 attained $14,600 million, up 4.9 percent from Q3 2023 at $14,000.  Net earnings were $1,097 million compared to $835 million in Q3 of 2023, up 31.4 percent. Earnings per share attained $0.33 compared to $0.25 in Q3 2023. Comparable same store sales were up 3.4 percent compared to Q3 2023. Operating margin fror Q3 2024 was 6.9 percent compared to 7.5 percent during Q3 2023.

Net margin was 7.5 percent compared to the Kroger Company and Albertsons Corp. at  2.1 and 1.0 percent respectively for Q1 2024. High-end specialty chain Sprouts Farmers’ market posted a net margin of 5.0 percent for their most recently completed quarter.

According to the Publix SEC Q-10 submission, total assets on September 28^th 2023 were $36,851 million with long-term debt, lease and finance obligations of $3,459 million.

Share price was adjusted upward from $16.46 to $18.05 on November 1^st.

In commenting on results CEO Kevin Murphy stated “During the last several weeks, many of our associates and customers have faced difficult times with Hurricanes Helene and Milton,” He added “I’m so proud of our associates for the comfort they bring to our customers and their fellow associates.”

In a release before market open on July 29^th 2024, McDonald’s Corporation, a bellwether for the QSR segment of the restaurant industry, reported results for the 3^rd quarter of FY 2024 ending September 30^th 2024.The Company beat estimates on earnings and sales growth.

For the period, the Company earned $2,255 million on total revenue of $6,872 million with a diluted EPS of $3.13.  Comparable figures for the 3^rd quarter of fiscal 2023 were net income of $2,317 million on total revenue of $6,692 million with a diluted EPS of $3.17.

Revenue for Q3 was 2.7 percent higher than Q3 FY 2023. Operating margin fell from 47.9 percent to 46.3 percent for the most recent quarter. Gross margin for Company-operated stores declined from 16.5 percent for Q3 FY 2023 to 15.4 percent suggesting acceptable control of costs for ingredients, packaging and rationalization of menus to offset increased labor cost. The Accelerating the Arches efficiency initiative, was unable to maintain traffic despite promotions. The Company may be benefitting from trade-down from restaurant dining in the demographic with an annual income of over $100,000. In contrast management are concerned over loss of traffic and check value among lower income customers  

In commenting on results, Chris Kempczinski, president and CEO stated, “We will stay laser-focused on providing an unparalleled experience with simple, everyday value and affordability that our consumers can count on as they continue to be mindful about their spending,” Her added “McDonald’s will continue to follow our Accelerating the Arches playbook to drive long-term growth globally and win in this environment.” On the investors’ call Kempczinski apologized for the recent STEC outbreak and expressed hope for recovery among the 90 cases confirmed with the foodborne infection. He confirmed that the outbreak reduced customer count in the days following the announcement of the source of infection.

Kempczinski affirmed that the recent E.coli outbreak was over and the Company was moving forward to reestablish customer goodwill after a fall in foot traffic. The CEO also commented on the benefit of the $5 meal deal on sales especially to the low-income demographic

For Q3 FY 2024, McDonald’s posted an increase in comparable store sales in the U.S. of 0.3 percent with comparable store sales for the international operated markets segment down by 2.1 percent contributing to a global comparable store sales reduction of 1.5 percent.  The International Developmental Licensed Market Segment posted a 3.5 percent decline in comparable sales due to turbulence in the Middle East although partly offset by gains in Latin America and Japan.

Projections for 2024 in the SEC 8-K report included net restaurant expansion contributing 2.0 percent to system-wide sales with an operating margin attaining a mid-to high 40 percent. Capital expenditure  will range from $2.5 to $2.7 billion for 2,100 new stores with 500 in the U.S.

On September 30^th 2024 there were 42,819 McDonald’s stores. Restaurant breakdown included 13,498, in the U.S.; 10,378 International-operated and 18,943, International Developmental Licensed locations. During 2024 the Company intends to open 1,600 new restaurants globally. According to the report most will be traditional in design but the Company will consider alternatives including a test of a small free-standing ‘CosMC’ format.

McDonald’s Corporation posted a market capitalization of $209,120 million on July 29^th 2024. Total assets on December 31^st 2023 amounted to $56,146 million of which 24.0 percent comprised lease right-of-use assets.  Long-term debt and lease obligation were $50,211 million.

MCD has ranged over the past 52-weeks from $243.53 to $317.90 with a 50-day moving average of $298.21. MCD trades with a forward P/E ratio of 23.1. The 12-month trailing operating margin was 44.2 percent and profit margin, 31.8 percent. Prior to release MCD closed on Tuesday 29^th at $297.02 but traded post-release on Wednesday 30^th at $299.

The 2018 Farm Bill expired in 2023 but was extended until September 30^th.  The nation is now operating without a Farm Bill.  USDA Secretary Tom Vilsack recently commented, “We are quickly running out of time this fall for this Congress to come together to address the Farm Bill in a bipartisan way.  Either we have a real bipartisan deal on a new Farm Bill or at a minimum, an extension of the existing Farm Bill.

Some observers believe that a Farm Bill will be passed by both Chambers during the “lame duck” session following the election.  Opposition to SNAP benefits and the magnitude of SNAP benefits and eligibility are questioned by members of the respective House and Senate Committees.  Democratic members of both committees are opposed to funds being transferred from social benefits to price support.  According to the non-partisan Congressional Budget Office, the proposal emanating from the House Committee underestimates cost and will add materially to the national deficit.

It is noted that in the event of punitive tariffs being imposed on China, farmers would lose export markets, reducing the price of commodities. This will intensify financial stress on farmers who will require Federal support since market prices will be lower than production cost.

Kathy Brodhagen has been appointed as CEO of Echo Lake Foods. Kathy has extensive experience in the egg processing sector having served as VP for the Michael Foods Subsidiary of Post Holdings and as the founder of an egg products company inassociation with Cal-Maine Foods.

Echo Lake Foods manufactures frozen egg products including breakfast items for food service and retail.

Six universities received USDA National Institute of Food and Agriculture grants for education, extension and training to develop specialized training and educational programs for veterinarians. The emphasis was on food animal medicine to increase the knowledge base and experience of veterinary graduates.

The University of California-Davis received a grant for a project to encourage high school students to consider poultry veterinary medicine as a career option.  Grants to Tuskegee University, College of Veterinary Medicine, the University of Missouri, Texas Tech University, Texas A&M Agri Life Extension Service and Mississippi State University were more general in content involving training and welfare, reproduction and food animal practice with specific reference to rural communities.

It is noted that there are a number of functional residency and post-graduate programs in operation with UGA preeminent, with completion of these programs leading to specialty recognition by the American College of Poultry Veterinarians (dip. ACPV)

United Natural Foods has implemented a restructuring strategy to reduce costs.  Over the past six months, there have been two rounds of layoffs including elimination of positions at their Harrisburg, PA and Phoenix, AZ distribution centers.  A number of positions stated to be less than 300 were eliminated in the Providence, RI headquarters through the expedient of  outsourcing invoicing and payroll.

Charles Davis, a spokesman for the company, noted, “At UNFI we are executing a new strategy focused on creating shared value and more efficiently serving our retail and supplier partners”.

CEO, Sandy Douglas, noted, “We are confident that our new strategy and multiyear financial objectives will continue to drive performance and create sustainable value for our customers, suppliers and shareholders.

For the recently concluded FY 2024 the Company posted a loss of $(112) million on sales of $30,980 million with a negative diluted EPS of $(1.89). Total assets were $7,528 million with $35,100 million in long-term liabilities. UNFI posted a market capitalization of $1,240 million on October 29^th. The twelve-month trailing operating margin was -0.4 percent and profit margin was +0.6 percent. The return on assets attained 1.2 percent with a negative return on equity of      -6.5 percent

Dr. Mark Jackson of CEVA reported on the benefits of administering GA/08 vaccine to protect against four IB variants currently circulating in the U.S.  Specific pathogen-free chicks were vaccinated at five days of age with a bivalent GA/08 and Massachusetts combination.  Swabbing the choanal clefts post vaccination demonstrated successful administration.  Immunization was confirmed by demonstrating antibodies at 26 days of age.  At 28 days, birds housed in isolators were challenged with NC/dark, D/23, CA/1737/04, PA/1220/98 or DNV/1639/23.  Statistically significant reduction was noted in clinical response confirming the protective ability of the GA/08 vaccine.

The seasonal increase in demand for shell eggs is now evident, supported by depopulation of flocks due to HPAI.  The major industry price discovery system and the USDA are posting substantial daily increases after the September plateau.

During the past week, Mid-west large was approximately $2.66 per dozen above the corresponding week in 2023 and $2.16 per dozen above the three-year average.  In addition to home baking and increased demand for baked goods, consumers are serving hot breakfasts and purchasing egg-containing menu items from QSRs.

According to an article by Grey Moran in The Intercept, cited by Will Coggin of Activist Watch, U.S. meat and poultry associations have liaised with the FBI regarding farm intrusions.  Since 2017, the FBI has tracked activist organizations including Direct Action Everywhere (DxE) and Meat the Victims and kindred organizations that conduct illegal entry onto farms to generate publicity and funding.

The tenor of the article is that the FBI may use legislation relating to agro-bio terrorism against welfare extremists.  Farm intrusions do not rise to the level of an act of terrorism although the FBI believes that “minor criminal actions associated with animal rights activist extremism have a tendency to escalate towards substantial direct actions to include the unintentional introduction of biological materials, toxic chemicals or other hazards into a herd or flock”. The FBI is justified in monitoring the activities of any organization or group that breaks the law.

There is no evidence to date that there has been any attempt to deliberately introduce pathogens or toxins into farms, although there was some suspicion that illegal entry to a duck farm in California may have introduced HPAI. This is unfounded speculation and there are sufficient influenza outbreaks without having the involvement of DxE.  It is doubtful whether any state or federal Attorney would apply bioterrorism legislation in charging a perpetrator of farm intrusion as demonstrated by recent action with prosecution as a misdemeanor.

Zoe Rosenberg, affiliated with Direct Action Everywhere, was arrested as a result of a farm intrusion.  Evidence presented showed her holding what appeared to be a healthy duck obviously a staged photograph. In the photograph she was wearing a T-shirt over her hazmat suit. For your information Zoe, we wear our T-shirts under Tyvek coveralls and we do shower before entering a farm if facilities are available.

The Tapajos Waterway that receives grains from Mato Grosso and adjoining northern states is temporarily closed.  The Waterway is expected to be functional by mid-November subject to seasonal rains that will lift the level in the Madeira River and tributaries by at least 10 inches.  Despite the temporary cessation of barge transport, grain traders had assembled reserves in northern export ports in anticipation of transport delays. Consignments from southern export terminals will not be affected.

Interruption in supply of eggs and egg products as result of HPAI depopulation is the subject of a series of lawsuits.  Grand Prairie Foods of South Dakota is suing Echo Lake Foods Wisconsin for breach of contract and unjust enrichment because of imposition of higher prices and an interruption in the supply of breakfast sandwiches.  This case will be before the U.S. District Court for South Dakota. 

A second case in the U.S. District Court for Southern Iowa involves Oskaloosa Food Products attempting to resist a subpoena for company records establishing costs of production.  Echo Lake, the Defendant in the South Dakota case, claimed that avian influenza reduced supplies of eggs to their plant resulting in an initial increase in price and eventual cancellation of orders.

It is a consistent observation that catastrophic diseases including avian influenza tend to bring out the worst in decision makers responsible for trading and pricing.

In 2023 consumers in Sweden were infected with Salmonella Enteritidis (SE) traced back to CA Cedergren. This domestic producer, was responsible for over 80 diagnosed cases.  Since July 2024, the Public Health Agency of Sweden has been tracking outbreaks of SE with two identified strains suggesting either regional infection or importation.  Outbreaks appear to be associated with eggs purchased from small stores and restaurants that can be attributed to distribution from infected local flocks.  Epidemiologic evidence also implicates eggs imported from Ukraine, along with Poland, a major exporter to western E.U. nations.

The introduction of contaminated eggs into the supply chain in the E.U. is complicated by the absence of a cold chain from packing to point-of-sale. Consumers also favor soft-boiled or even raw eggs and incorporate egg yolk in homemade mayonnaise and sauces with egg white as glazes.  The preference for soft eggs intensifies risk of infection despite recommendations by health authorities to thoroughly cook eggs.

CDC has released results of the partial genome assay of the isolate obtained from the index patient in the Missouri hospital outbreak.  Due to limited availability of material from the patient, only the hemagglutinin, matrix and non-structural genes were sequenced.

 To date, assays confirm the isolate as an H5N1 influenza virus of the 2.3.4.4b clade.  Two amino acids substitutions were identified in the HA sequence considered to be unique to the specific patient but would not be associated with contagion.  There was no evidence that the virus would be refractory to antiviral drugs.  Molecular virologists are now evaluating the significance of the A156T mutation in the hemagglutinin gene.

Between September 30^th and October 14^th, veterinary officials in Hungary confirmed four significant outbreaks of HPAI with characterization as strain H5N1.

All the commercial farms affected housed either geese or ducks, presumably with outside access.  In one case involving 17,000 birds, a secondary infection was detected close to other operations.  HPAI was isolated from migratory waterfowl during the weeks preceding the series of commercial cases.  Outbreaks occurred along an arc of approximately 200 miles involving six counties with cases in proximity to rivers representing major north to south flyways including the Danube and tributaries.

Authorities have imposed WOAH quarantines in the 1.8-mile radius protection zones and have initiated surveillance in the more extensive regions surrounding the primary outbreaks.

As reported in EGG-NEWS, a number of E.U. nations have detected H5N1 in migratory birds, preceding outbreaks in non-confined commercial poultry. Since non-confined waterfowl are susceptible to infection by direct and indirect contact with free-living and migratory birds it would appear that vaccination, as in France, is a justifiable protective measure given the inability to prevent infection of flocks allowed access to pasture.

According to a CDC release, the multi-state outbreak of O157:H7 E. coli can be attributed to contaminated shredded onion incorporated in Quarter Pounder hamburgers.  McDonald’s has recalled Quarter Pounders in a number of states and all onions from Taylor Farms, the implicated supplier, have been recalled.  As a precaution, other QSRs have removed onions from servings until additional investigations demonstrate the extent of contamination.  As of October 24^th, 75 cases have been diagnosed with 22 hospitalizations, two with hemolytic uremic syndrome and one fatality other than the two cases with renal complications.  It is evident that far more cases occurred than were diagnosed and recorded since these were sufficiently mild as to not require medical intervention.

This case illustrates the ability of the Centers for Disease Control and Prevention to detect the emergence of a foodborne infection using databases. Collaboration among public health and regulatory officials in a number of states enables gathering of data, identifying the source of an infection in order to implement corrective action.  Obviously, the cooperation of patients, food manufacturers and restaurants is necessary to implement investigations.

As of October 28th McDonalds has reintroduced the Quarter Pounder without the onions.

In yet further consolidation in the egg industry, specialty egg producer, Egg Innovations was acquired by the Happy Egg Company.  Both enterprises are packers of eggs produced by contractors and are able to supply a wide range including organic, pasture-raised and free-range.

In commenting on the transaction Alex Worley CEO of Happy Egg stated, “With Egg Innovations we will continue to push the boundaries of what consumers expect in egg farming-delivering innovations such as pasture-raised and regenerative practices.” 

The Happy Egg Company was established in the U.S. as a subsidiary of Noble Foods, the largest egg producer and packer in the U.K.  The Happy Egg Company is now independent of the founder and is completely U.S.-owned.  The company headquarters is in Rogers, AR. and receives product from contract farms and supplies a wide range of retailers including most of the national and large regional chains.

Egg Innovations was founded by Dr. John Brunnquell in 1999, based on his knowledge gained from applied research in poultry science and flock behavior. Egg Innovations relies on supply from over 50 family farms collectively using 1,000 acres of pastureland for flocks.

The combined total of hens under contract to the two packers is estimated at 1.5 to 2.0 million. Since both companies are privately held there is no information on the value of the transaction or the financial performance of the two companies

On October 18^th, TreeHouse Foods announced a recall of frozen waffles based on contamination with Listeria monocytogenes.  The presence of the pathogen was detected on routine monitoring at the Brantford, Ont. plant.

The recall was subsequently expanded on October 22^nd to cover all products made at the facility still within the  “used by” date.  The incriminated frozen waffles were distributed to almost all grocery chains in the U.S. under both TreeHouse and private label brands.

Following the CDC release and concerning the recall, TreeHouse stock declined 8.9 percent following the October 18^th release.  Analysts anticipate that the recall and interruption in manufacture of waffles would lower EPS by 4 percent in 2024 given that annual sales of private label frozen waffles attained $117 million through October 5^th.

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.

In an October 22^nd announcement, Target will reduce prices on a wide range of items to attract foot traffic and boost revenue, hopefully with a contribution to the bottom line.  Target has embarked on a program of progressively lowering prices on consumer items with a target of 10,000 SKUs by the end of December.  Reductions will include both Target private and national brands. The action by Target matches the Walmart initiative in progress.

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.

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.

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.

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 20^th despite the expiry of the 2018 Farm Bill that was delayed from 2023.

CDC has declared that the 12-state outbreak of Salmonella Enteritidis is now over with 93 confirmed cases requiring 34 hospitalizations. EGG-NEWS reported previously on the outbreak associated with the farm located in Bonduel, WI.

Following traceback to the farm and an extensive recall of eggs, the incidence rate declined sharply.  Whole genome sequencing of isolates of SE from the farm and patients were homologous confirming the source of the infection.

Neither CDC nor FDA has released details concerning vaccination of the flock or the pattern of obligatory SE testing prior to the outbreak.

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.

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.

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.

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.

Scott Braswell a driving force for  Braswell Family Farms, a 4^th generation egg and feed production enterprise headquartered in Nashville NC. passed at the age of 68 on October 16^th  in Durham after a long illness. An obituary will be posted in a subsequent edition describing his many accomplishments and contributions to the egg industry and his community.

Condolences are extended to his widow Mary Lou and  to his son Ronald Trey Braswell III, CEO of Braswell Family Farms and daughter Nary Scott (Anderson) and their respective families.

May he rest in peace.

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.

Private brands now represent close to twenty percent of grocery purchases with these labels now available for packaged goods, dairy including eggs, OTC pharmaceuticals and even cosmetics.

At the recent Groceryshop Conference in Las Vegas, speakers representing major chains indicated their commitment to private brands.  Ahold-Delhaize has the intention of achieving 45 percent of sales through private brands with the company currently at the thirty percent level.  Sam’s Club considers that national brands will provide greater value and innovation.  Amazon has unveiled Amazon Saver; a new discount line and Albertsons has even introduced a private label wine following the example of Costco.

Major chains are following a narrow path between expanding private label but maintaining mutually acceptable commercial relationships with CPG manufacturers.

During the inflationary period through 2021-2023, consumers opted for lower-priced private brands finding them equivalent in quality to familiar national brands.  Reversion to these products appears to be slow given acceptance of private label items shelved alongside national brands at lower prices.

SpartanNash, an integrated food distributor and operator of supermarkets in the Midwest has acquired a chain of 49 Fresh Encounter stores in Ohio, Indiana and Kentucky.  The company is a third-generation grocer that has been served by SpartanNash for close to sixty years.

Tony Sarsam CEO of SpartanNash noted, “This acquisition is a exciting milestone in our company’s strategic growth plans.”  He added, “We will welcome 2,500 new associates to the SpartanNash family and will begin serving shoppers in Kentucky and grow our existing footprint across Ohio and Indiana.” 

With the recently announced acquisition and the earlier purchase of Metcalfe’s Market comprising three stores earlier in 2014, SpartanNash will operate 196 locations with banners including Family Fare, and Martin’s Super Markets with many locations having pharmacies and fuel centers.

Parent company Seven & i Holdings of Japan has announced that as many as 444 7-Eleven stores will be closed in North America.  The company is facing pressure from financial institutions to increase profitability. Seven & I Holdings is currently the subject of a takeover bid from Alimentation Couche-Tard of Canada, operator of Circle K in the U.S. and convenience stores and gas stations in Europe. 

It is anticipated that the holding company will benefit from closing unprofitable locations. The intended action represents less than four percent of the 13,000 U.S. locations in the U.S.  The initiative may be too little and too late to lift profitability in the face of intense competition from larger convenience stores with forecourt filling stations located on major interstates throughout the U.S. and along arteries leading from cities to suburbs.

Seven & i Holdings has created a separate company, York Holdings to operate supermarkets and specialty stores as a precursor for divestment.

Italy has informed the World Organization of Animal Health of an outbreak of H5N1 HPAI in an egg production complex holding one million hens located in the northeast quadrant of the nation.  This outbreak follows reports of H5N1 emerging in Bulgaria, the Czech Republic and France accompanied by concurrent diagnoses of outbreaks in backyard farms and migratory birds. 

The extent of losses and concern over future outbreaks is leading to a seven percent rise in the price of shell eggs from late August through mid-September attaining $1.75 per dozen for graded unpacked product.  Diversion of eggs to the shell market at the expense of breaking supply is apparently the reason for recent imports of egg products from the U.S.

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.

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.

Rose Acre Farms has announced that Tony Wesner currently COO has been promoted to CEO and Chairman of the Board of the family-owned enterprise.  Wesner joined Rose Acre Farms in 1981 and is familiar with all aspects of operation under the mentorship of Marcus Rust.

Wesner is a familiar figure in the industry participating in UEP, IEC and USPOULTRY committees and events.

In commenting on the promotion Wesner stated, “I am grateful for the trust that the Rust family has placed in me including Marcus and extending to the current generation whom I have had the pleasure of seeing grow up.”

Marcus Rust will assume a guiding role in the Company as the Chief Visionary Officer.

Terry Anderson was named Chief Operating Officer to succeed Tony Wesner.

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.

RR Donnelley, a market research and communications company recently released the CPG+ Grocery Consumer Report reflecting the attitudes of consumers during the fourth quarter of 2024. The study included 1,80O0 respondents representing diverse generations and financial demographics and 254 managers affiliated to grocery retailers.

As expected, the report confirmed concern over the cost of food items with 86 percent of respondents registering “frustration” according to Beth Johnson, Director of Client Strategy for the research company who stated, “Rising prices, especially in the grocery sector are putting pressure on consumers across all income levels.”  She added, “Price sensitivity is a collective concern presenting both a challenge and an opportunity for brands.”

The perception and actuality of high prices has changed consumer buying patterns.  Shoppers are more inclined to take advantage of sales and are responsive to loyalty programs.  An important conclusion from the responses was that a third of those surveyed have switched from name brands to private-label equivalents.  Loyalty programs are favored and shoppers are making greater use of discount coupons.

The September 15^th U.S. Census Bureau release of the advanced estimate of retail and food sales data for August confirmed a 0.1 percent rise from the revised July value and up 2.1 percent over 12 months. Food service prices were unchanged from July and up 2.7 percent over 12 months. Grocery store prices were down 0.6 percent from the revised July value and up 1.5 percent over the past 12-months.

The dissonance between actual price inflation and consumer perceptions is striking. Irrespective of data shoppers believe that post-COVID inflation persists that is not supported by reliable data. But then surge pricing, a tiny bit of opportunistic local price gouging and even the gyrations in retail egg prices do not help to dispel misperceptions

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.

During the Farmers and Ranchers in Action event, Secretary of Agriculture, Tom Vilsack identified areas in which the Department is attempting to increase competition and establish fair markets for food producers.  The USDA will evaluate Alternative Marketing Agreements relating to the activities of beef packers with respect to spot prices paid and the formulas used to calculate values.  USDA will issue an Advance Notice of Proposed Rulemaking and will solicit comments on potential interventions.

As a result of interviews and review of over 1,000 comments the USDA has identified alleged hidden fees and anticompetitive pricing strategies in the beef market.  Appropriate corrective action will be taken to promote transparency and competition and to eliminate unjustified charges.

The current Administration has been active in opposing consolidation and oligopoly in the beef and pork sectors of meat production but has extended their concern to the concentration of broiler and turkey production among integrators.  Over the past four years the USDA has attempted to restructure meat production by financially supporting the emergence of small plants that are less efficient than large facilities, ultimately reducing prices to consumers. 

With respect to the broiler industry, the USDA recognizes integration and competition given the larger number of producers relative to beef and pork.  The USDA has however intruded into the relationship between integrators and growers with special reference to the tournament system, no poach agreements and other claimed irregularities that have led to new rules under the Packers and Stockyards Act.

Superior Farms, the only remaining meat-packing facility within the city of Denver has settled with the Environmental Protection Agency for improper handling of anhydrous ammonia.  The plant was cited for safety violations including failure to minimize risks of accidental release.  The company will pay a $120,000 civil penalty and will invest $250,000 in a supplemental environmental project to upgrade equipment and prevent future leaks.

Superior Farms Inc. operating the plant in North Denver is the subject of a ballot initiative banning animal processing within the city.  Animal rights and vegan organizations initiated the ballot that if passed, would result in closure of the plant that was selected by activists for its vulnerability.

The ballot proposal was regarded as a toss-up a few weeks ago. More recently civic organizations, labor unions, the restaurant industry and other business organizations in Denver have come to the defense of Superior Farms. There is now more structured opposition to the ballot proposal with publicity on the risks and potential consequences of approval.

Activists continue to make use of ballots to promote their vegan principles, imposing their views on the general public often with profound cost implications.  This rise in activism is  represented by the proposal to ban CAFOs in Sonoma County, California.  Adoption would result in closure of many family-owned and operated farms and reduce egg, poultry, dairy and beef production to the detriment of consumers and County revenue.

On September 9^th Costco Wholesale Corporation (COST) reported sales for September 2024 covering the four weeks ending October 6^th.  For the period, sales attained $24,620 million, up 9.0 percent from the value of $22,590 million during the corresponding month in 2023.

Same store sales (excluding fuel and foreign exchange) increased 9.3 percent for the U.S.; 6.3 percent for Canada and 9.6 percent for international warehouses.  Overall, same-stores sales advanced by 8.9 percent and E-commerce was 22.9 percent higher.

Costco closed on Sept 9^th at $909.60 and opened on October 10^th post-release at $910.12. COST market capitalization was $393,910 million on August 14^th and the share has traded over a 52-week range of $540.23 to $923.83 with a 50-day moving average of $882.75.

Costco Wholesale Corporation operates 891 warehouses with 614 in the U.S.; 108 in Canada; 40 in Mexico and the remainder in nine other nations.

USDA has scheduled February 27^th and 28^th 2025 for the 101^st 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.

The FDA has “streamlined” the response of complaints submitted to the Human Foods Program This action follows justified criticism that the Agency failed to respond to a whistleblower complaint regarding irregularities at a major facility producing infant formula.

Communications alleging health or production issues, injuries or allergic reaction arising from defective food quality or safety will now be expeditiously investigated.  This response will encompass foods and dietary supplements through a new reporting portal in addition to voluntary reporting forms for cosmetics.  Previously complaints were directed to the Consumer Complaint Coordinator in the FDA Office of Regulatory Affairs.  Effective October 1^st, the Agency will direct complaints relating to food to the newly established Office of Inspection and Investigations for prompt evaluation and action.

The Human Foods Program was established following investigations into the infant formula debacle and a series of crises confirming FDA negligence and an inadequate response.

The FDA statement noted that establishment of the Human Foods Program “will help the FDA deliver on their mission to protect and promote public health through science-based approaches to prevent foodborne illness, reduce diet-related chronic disease and ensure the safety of chemicals in food.”

Subscribers to EGG-NEWS can retrieve articles on the infant formula crisis by entering “infant formula” into the search block.

A number of environmental activist groups filed suit to require the Environmental Protection Agency to impose stricter controls on emissions from CAFOs, invoking the Clean Water Act.

The U.S. Court of Appeals for the 9th Circuit rejected the lawsuit and let stand the current standards for permitting.  The EPA is however currently gathering information that may be used to amend current regulations.

The National Pork Producers Council welcomed the decision of the appeals court noting that if the demands by Food and Water Watch and other organizations were imposed on the EPA, considerable disruption and an escalation in production costs would ensue.

In accordance with environmental regulations in Washington State designating minimum recycled content for plastic packaging, the Department of Ecology has announced fines for 35 companies.  The total amounting to $416,000 includes individual penalties ranging from $6,000 to $67,000.  Clorox received the highest fine based on low recycled content in packaging.  In 2018 the company achieved an 11 percent content of post-consumer recycled plastic with a target of 22 percent by 2030.  At the end of 2023 the level was in fact lower at 10 percent.  Albertsons a major grocery chain in the state was fined $42,000 for noncompliance with the 2021 law mandating inclusion of recycled plastic in containers.

In contrast the State reported that 93 producers met or exceeded required benchmarks, “Recognizing the value of using recycled content in their products.”

The State of Washington is negotiating with noncompliant companies to suspend fines subject to corrective action plans and demonstrated future compliance.

The Madeira River in Brazil has fallen to a level that is impeding transport from crop production areas to port terminals.  This situation is reminiscent of the 2022 low water levels on the Mississippi that resulted in escalation of inland freight on barges from the Midwest to New Orleans.  The Madeira River and tributaries are responsible for the transport of 34 percent of soybeans and 43 percent of corn produced in northern Brazil.

Notwithstanding the present problems, Anec, a lobby representing grain traders believes that there will be no reduction in exports from the northern region although costs will be higher.  This situation will probably serve the interests of U.S. farmers and exporters since the U.S. will be more competitive.  This is a desirable situation given the anticipated large 2024 harvest and with prevailing high production costs.

Safeway, Albertsons and Von's have settled a complaint in Sonoma County, CA and will pay a $4 million penalty.  According to County Attorney Carla Roderiquez, the retailers engaged in charging higher prices than those advertised or posted and in addition, based costs of items on inaccurate weights.  An investigation demonstrated that meat, baked goods and some other items had short weight compared to packaged labels.  The two companies also failed to disclose exclusions on club card programs. 

County Attorney Roderiquez stated, “Trusting companies to sell products to consumers that are accurately weighed and priced, especially in today’s economy, is a priority to my office.”  She added, “My Environmental and Consumer Law Division works with the Sonoma County Agricultural Commission, Weighs and Measures Department to make sure businesses in our community charge consumers correctly.”  The grocers are now enjoined from engaging in false or misleading advertising and are prohibited from applying 14 unfair practices identified in the investigation.

Given controversy over the proposed merger between Albertsons and Kroger it would be presumed that the companies and their subsidiaries would exercise squeaky clean ethical, marketing and operational procedures, at least until litigation is concluded.

As a seasonal precursor to outbreaks of HPAI in commercial flocks, many nations including Japan report isolation of H5 avian influenza from both migratory and domestic wild birds based on the intensity of surveillance.

In their quarterly annual report to the World Organization for Animal Health, Japan documented isolation of H5 avian influenza isolates from wild birds from December 2023 through April 30, 2024.  Forty individual birds were identified as infected, predominately large-billed crows and a peregrine falcon. 

Japan encounters seasonal introduction of HPAI by migratory birds moving either southward in fall or northward in spring migrating to and from Eurasia.  Most of these isolates were characterized as a H5N5 highly pathogenic strain.  This virus circulated in crows that are ubiquitous and due to their feeding habits are likely to transmit infection to commercial poultry if allowed either direct or indirect contact with flocks.

Raptors become infected through consuming prey carrying H5 avian influenza virus. Mortality in falcons suggests the presence of infection in diverse species representing a high risk to poultry flocks.

The Board of Directors of Cal-Maine Foods Inc. has approved $40 million in capital projects to expand cage-free production.  Complexes in Florida, Georgia, Utah and Texas will be converted to cage-free housing by replacing obsolete cages. 

Contract housing in Missouri will be converted to floor housing for commercial layers along with installation of packing and breaking equipment in the broiler processing plant acquired from Tyson Foods in March 2024.  Following remodeling Cal-Maine Foods will add 1.2 million free-range hens by late 2025 with prospects for additional capacity.

In commenting on the capital commitment, Sherman Miller, president and CEO noted, “We are pleased to announce these new expansion projects which support our strategy to increase our free-range production in line with customer demand and expanding state requirements for cage-free eggs.”  He added, “We have made considerable progress with the conversion of the Dexter, MO. facilities and look forward to the additional production and distribution capabilities from this location.”

The Food and Drug Administration has granted marketing authorization for the Healgen Rapid Check™ immunodiffusion procedure that can simultaneously identify antigens to SARS-CoV-2, the virus responsible for COVID-19 and both influenza A and B viruses from nasal swabs.  The test can be self-administered by an adult and from children 2-years and older. 

As with all diffusion tests, sensitivity is slightly inferior to molecular (PCR) assays that requires submission of swabs to a laboratory with suitable equipment and trained personnel.  Notwithstanding the lower sensitivity attaining 92 percent for COVID and 91 percent for influenza A and B, the test has high specificity and will correctly report 99 percent of negative samples.  In the event of a negative test, there is reasonable assurance that the patient is not shedding either SARS-CoV-2 or influenza A or B virus as denoted by the result.  Unfortunately, the test will yield a small proportion of false negatives.

The combined test will be useful in differentiating between influenza and COVID allowing correct antiviral therapy especially for individuals with predisposing conditions or at risk based on age.

Dr. Michelle Tarver, Acting Director of the FDA Center for Devices and Radiologic Health noted, “As we enter this year’s annual flu season with respiratory illnesses such as COVID-19 on many of our minds, our ability to detect these pathogens effectively and efficiently can be impactful on our daily lives”.  The Rapid Check™ test kit will be valuable to screen workers and supervisors complaining of respiratory signs establishing an early diagnosis to initiate treatment and to implement quarantine especially in individuals that have not received seasonal vaccinations.

Michael Papaleo currently Executive Vice President and Chief Procurement Officer is retiring from C&S Wholesale Grocers LLC after a tenure of 27 years.  He was responsible for quality service to retail customers, inventory management, trade relations, merchandising and served as a senior executive in the company.

Eric Winn, CEO of C&S Wholesale Grocers state, “Michael have help lead C&S through many market changes and has been a very respected leader both within the Company as in the overall grocery industry.”  He will be succeeded by Mark McGowan, Executive Vice President responsible for Retail and the Chief Merchandising Officer.  Andrew Connell, Senior Vice President for Procurement will be responsible for demand planning and ensuring aspects of purchasing.

The retirement of Papaleo comes at a difficult time since C&S Wholesale Grocers is the designated acquirer of close to 570 stores that will be divested if the merger between Kroger and Albertsons takes place.

David Boucher, Director of Infectious Disease in the Administration for Strategic Preparedness and Response (ASPR) has announced an order for ten million doses of human H5 influenza vaccine.

Although less than twenty cases of zoonotic H5N1v infection with the B3.13 genotype have been recorded, and risks to human populations appears low, the ASPR has placed orders in accordance with their “mission to be ready” in the event of possible mutations in the virus to become contagious among humans. 

The order will be filled by three U.S. companies. One will provide a conventional egg-propagated vaccine.  The other suppliers are producing vaccine using cell culture.  Concurrently the U.S. Public Health Service has funded development of a mRNA platform for human influenza vaccines.

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.

Hospitals in major centers in states affected by Hurricane Helene are slowly returning to normal.  Metropolitan facilities have power and water available, but staff are hard pressed to serve local communities and those transferred from rural areas functioning without utilities.  A recent report in Becker’s Hospital Review confirmed that 22 hospitals in western North Carolina now have power.

In contrast to urban medical facilities, rural outpatient clinics are still closed due to storm damage or inadequate services. Routine scheduled appointments and elective procedures have been cancelled to allow staff to attend to urgent cases.

Many hospital systems have introduced support programs for staff who have lost accommodation or are caring for dependents and relatives displaced by the storm.

On September 27^th, Judge Adrienne Nelson received submissions following the conclusion of testimony in the case filed by the Federal Trade Commission requesting a preliminary injunction to block the proposed merger of the Kroger Company with Albertson’s Corporation.

The FTC supplementary brief expanded on testimony maintaining that the merger would be anti-competitive and would “incentivize Kroger to raise prices in hundreds of communities across the country.”  Dr. Nicholas Hill an agricultural economist reviewed the U.S. Department of Justice Horizontal Merger Guidelines to establish that the proposed transaction would impact 1,922 individual markets.  The FTC brief also emphasized that Albertson’s represents the first or second major competitor to Kroger in 14 of 17 markets where both companies operate.  The analysis conducted by Dr. Hill demonstrated that despite the competition represented by dollar stores and online retailers, the merger would still result in higher prices ultimately in hundreds of markets.

The FTC maintains that consumers shop across multiple store formats and that as an Agency it is not necessary to prove “that there is a subset of customers who only desire one-stop shopping for groceries or who are committed to only one store.”

The FTC rejected the promise to reduce prices since this is unenforceable along with expressed intentions to improve salaries and conditions for workers and not to close stores.  The FTC correctly states that “promises can be broken” since the primary responsibility of Kroger management and directors is to its shareholders.  In support of this contention, the FTC discovered internal documents in which an Albertson’s executive stated, “We all know prices will not go down” discounting the promise to devote $1 Billion to reducing prices as a “sweetener” to approve the deal.

The plan to divest 579 stores was also questioned since C&S Wholesalers has minimal experience in operating a large number of supermarkets.  Haggen’s ghost haunted the courtroom and was cited as a valid reason to oppose the merger as structured. Albertsons divestiture of 146 stores to Haggen in 2015 resulted in sixty percent being closed within a year with the remainder reacquired by Albertsons. If the divested stores were to be purchased by an established retailer such as Ahold-Delhaize or even a deep discounter such as Aldi or Lidl, the transaction might appear more feasible.  Opponents of the merger have pointed to the fact that Kroger and Albertsons picked a weak competitor that would not represent competition. Based on this size of C&S Wholesalers, and their history with the Price Chopper acquisition, the FTC regards the C&S Wholesale strategy to support the transaction as “implausible at best”.

Given the evidence presented in the form of witness testimony and the supporting brief it is the opinion of informed observers that Judge Nelson will grant the preliminary injunction, effectively killing the merger unless the ruling is overturned on appeal.

On October 4^th the U.S. Department of Agriculture announced grants totaling $19.2 million for Land-grant Universities to be used for undergraduate scholarships.

Tom Vilsack, Secretary of Agriculture noted, “The 1890 Land-grant Universities have been critical partners in building the next generation of agricultural leaders including here at USDA.  This scholarship program is an important resource for students as they pursue their dreams and set out to make their mark on the world.”

The program is administered by the National Institute of Food and Agriculture and the grants will complement the 1890 National Scholars Program.

The Second Morrill Act of 1890 established Land-grant status to designated historically black colleges and universities and over the past 134 years, USDA has contributed to research extension and teaching at these institutions.

Under the 2018 Farm Bill, the NIFA has donated $92 million to support 3,274 scholarships at 19 colleges and universities.

In a striking example of the right hand not knowing what the left is doing, eleven Republican lawmakers are concerned over advances in agricultural biotechnology by China.  In a letter dated September 26^th, Andrew Garbarino (R-NY) and Dan Newhouse (R-WA) led nine colleagues to request that the Office of Homeland Security and the Director of National Intelligence conduct an analysis and provide Congress with recommendations.

The issue of concern is that China might secure a dominant position in the global protein supply.  They raise the issue of “recent Chinese activity in the innovative protein market most notably by the inclusion of cultivated meat research and development in a 5-year agricultural plan”.

Aren’t these the same legislators who are passing laws banning the sale of cultivated meat in predominantly “beef-producing states”? The same group that torpedoed Department of Defense funding for research on cultivated meat?

It seems that on the one hand cultured meat is taboo and yet these lawmakers are concerned over China, a commercial adversary, (except where Walmart and Target shelves are concerned), developing cultivated meat and “ceding American leadership in the global innovative protein market and forfeiting food security for the United States and its allies”.

The International Egg Commission (IEC) has declared October 11^th as World Egg Day.  The IEC intends for World Egg Day to provide a greater awareness of the nutritional value of eggs especially for children.  Publicity associated with 2023 events reached 130 million across the globe with benefits to producers.

The 2024 promotional, “tool kit” emphasizes the “United by Eggs” theme and provides key messages, social media graphics and creative suggestions to plan events and press releases.

World Egg Day activities have been arranged in many member nations:- 

• In the U.S., Rose Acre Farms, Versova and Center Fresh will serve omelets and IEC material will posted on message boards and social media.
• In Australia, a campaign will feature recipes across print and digital platforms. 

• Egg farmers of Canada have arranged the Earthwise Egg Quest: Canadian Egg Farming trivia challenge. 
• In France Fans d’ Oeufs will present Egg Shark an online game on Facebook and Instagram.  Promotional material has been distributed to schools to emphasize nutritional value. 
• The Union Nacional de Avacultores in Mexico will arrange an international egg fair and will attempt to break the Guinness World Record for the largest egg and spoon race.
•  In the Netherlands, the Poultry Expertise Center will host a celebration coinciding with Dutch Food Week.  Over thirty poultry farmers will open their facilities to the public to acquaint consumers with welfare and hygienic production.

Tom Vilsack, Secretary of Agriculture, has announced $11 million in grants to support small-scale dairy operations.  Speaking at the World Dairy Expo in Madison, WI. Vilsack stated, “USDA is committed to helping America’s dairy industry remain competitive as they work hard to provide necessary, nutritious dairy products to communities nationwide.”  He added, “The Dairy Business Innovation Initiative has invested over $64 million in more than 600 projects that are increasing dairy supply chain resiliency and creating new markets.” To date there has not been any report on the evaluation of return on this expenditure of public funds?

Grants will be awarded on a noncompetitive basis to three dairy organizations and a university to be distributed among milk producers: -

• The Pacific Coast Coalition will use $700,000 to allow farmers to establish high-value uses for milk including cheese and organic dairy products. 
• The University of Tennessee will distribute $3.5 million to support farmers to introduce sustainability and innovation.
• The Vermont Dairy Business Innovation Center will use $3.5 million to assist farmers to improve energy efficiency.
• The Dairy Business Innovation Alliance in Wisconsin will apply $3.5 million to technical assistance with an emphasis on expanding market opportunities.

The support of dairy farmers is evident given their inability to thrive in a market characterized by declining demand for fluid milk and dairy products and in the face of increasing costs.  Again, it is questioned why USDA is using funds to prop up farming entities that lack financial viability and have limited prospects of attaining profitability.  The expedient of using intermediaries to distribute funds is also questioned.  Given the practices of the USDA under the current Administration, questions relating to accountability and return on the euphemistically termed ‘investments’ should receive scrutiny.  Secretary Vilsack apparently ended up with a fat checkbook and is distributing his largesse to a limited range of farmers in one subsector of livestock production. These producers are apparently unable to acquire financing from regular banking institutions based on their inability to demonstrate collateral and capacity despite character in the form of sweat equity.

There has been no support for the egg-production sector over many years despite periods when producers were under water for extended periods. Innovation, product development, market promotion have been funded by check-off remittances to the AEB.  Many small-scale producers have ceased production since 2010 because they could not raise capital for conversion to cage free production or ceased supplying packers. Low prices over extended periods depleted working capital and prevented these producers from incorporating depreciation in pricing to fund replacement of obsolete equipment. 

On October 4^th the United Nations Food and Agricultural Organization released the Index of Food Commodities for September 2024.  A sequential monthly reduction in food prices over a year was reversed by the 3.0 point increase in the Index from August 2024 to the most recent value of 124.4, for the past month.

Components of the Index included:-

• The Meat index was up 0.4 points from August to 119.6 points with higher demand for chicken products exported from Brazil following expiry of embargos after an alleged ‘Newcastle disease’ break.  Prices for beef and pork were stable and mutton was down.
• The Cereal Index was up 3.0 points from August to 113.5 points due to higher wheat prices affected by delayed and lower harvests in Canada, the E.U. and the drought-affected Baltic region.
• The Vegetable Oil Index in September was up 6.2 points from August to 142.4 points with  higher prices for soy, sunflower and palm oils. This was due to increased world demand and diversion of soybean oil to biodiesel in the U.S. Asian palm oil production was down.
• The Dairy Index was up 5.0 points from August to 136.3 in September and up  from 112.0 points in September 2023 on increased demand.

There is concern over projected lower yields for crops in Brazil and Argentina due to drought coincident with transition to a La Nina event. Restoration of Black Sea shipping using the ‘Humanitarian Corridor’ along the eastern seaboard of Ukraine and Bulgaria has increased availability of grains and oilseeds and contributed to a moderation in prices to dependent nations. 

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 1^st, 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.

As part of an ongoing program of upgrading automation and mechanization, Walmart has announced new installations for their Buckeye, AZ and Searcy, AR locations to be followed ultimately by all 42 regional distribution centers.  The combination of robotics and technology will double the throughput of the regional distribution centers that serve local distribution centers of which there are three in Arizona and eight in Arkansas. 

Walmart noted, “The addition of robotics, automation and AI-powered software systems represents a significant investment in our associates and our community.”  The statement continued, “It will enable us to offer new career opportunities while revolutionizing operation and fundamentally changing the way we distribute products to stores.”

It would appear that Walmart has developed in-house systems to upgrade existing regional distribution centers.  It is possible that Walmart has managed to achieve a similar level of efficiency as Kroger that committed vast amounts of capital to their Ocada automated warehouses.  The efficiency obtained by Walmart may well prove to be a competitive factor in gaining markets to the disadvantage of Kroger, irrespective of whether the merger with Albertsons occurs and now considered an unlikely prospect.

Marfrig a leading beef producer in Brazil and ADM have established a joint venture company PlantPlus Foods to develop a range of plant-based food products for Latin America.  Marfrig will own 70 percent of the enterprise and will undertake production and distribution through existing and to be expanded facilities in South America.  ADM will provide technical expertise and assist in developing plant-based ingredients from a facility in Campo Grande in Mato Grosso de Sul State.

In commenting on the joint venture, Juan Luciano chairman of ADM noted, “Over the last several years we have invested strategically to build strong leadership positions in fast growing trend areas.  Now, by expanding our relationship with Marfrig we are taking the next step in meeting expanding consumer demand for alternative proteins. 

Following an investigation by the Hyde Square Task Force in June 2023, a volunteer youth organization on pricing of food, Senator Elizabeth Warren (D-MA) has seized on the issue of disproportionate shelf pricing. She has addressed a letter to Frans Muller, CEO of holding company Ahold Delhaize requesting specific pricing and policy information relating to The Stop & Shop chain.

The Hyde Square Task Force demonstrated a noteworthy difference in prices on identical items purchased in Jamaica Plan, a working-class neighborhood store and the more affluent suburban Dedham location.  Senator Warren requested specific information on pricing algorithms, the used of neighborhood demographics or census tracked information, justification of costs and competitive factors.

In response, Stop & Shop denied setting prices based on socio-economic and neighborhood factors, noting the differences in rent, and operating costs that influence pricing.

The controversy comes at a difficult time for Stop & Shop that claims to have recently lowered prices on many items in stores including the approximately 125 locations in Massachusetts.

The issue of ‘price gouging’ including allegations of ‘surge pricing’ are now on the national pre-election agenda. Unfortunately high prices for eggs have dominated mainstream and social media reports despite more recent declines from unseasonal retail values.

From October 10^th, McDonald’s Corp. added the Chicken Big Mac® to U.S. menu offerings.  Tempura-battered chicken patties have replaced beef used in the traditional Big Mac.

The innovation is consistent with recent comments at analysts’ meetings concerning the increasing demand for chicken and an escalation in the price of beef.

Concurrently with the U.S. Big Mac® introduction McDonald’s will offer McCrisp® and McSpic® chicken sandwiches in international venues providing a choice between original and spicy flavors.

Sodexo, a multinational food service company based in France, is apparently evaluating the acquisition Aramark their major of U.S. competitor.  Although there has been no confirmation of discussions to bring about a deal, synergy would be beneficial to Sodexo.

It is questioned whether the FTC would condone the transaction given the prominent position of both companies in the same field, serving hospitals, educational institutions and sports arenas.  If the acquisition were to occur, the buying power exerted by a combination of Sodexo and Aramark could be prejudicial to suppliers of a wide range of products including eggs.

Sodexo has been aggressive in promoting flock and herd welfare by aligning with animal rights organizations and promoting plant-based protein with implications for the intensive livestock industry.

Disinclination by many U.K. supermarket chains during 2023 to adequately pay producers of free-range eggs resulted in shortages in this category.  U.K. consumers have a preference for eggs produced in their nation and express a preference for free-range product.

Lidl, the 7^th largest grocery retailer, has entered into long-term supply agreements with groups of farmers based on production cost, margins and with adjustments for increases in feed, labor and utilities. Approximately, $1.5 billion will be budgeted by Lidl to support sourcing of eggs over a five-year period.

The action by Lidl will be followed by other chains, some of which have developed their own programs to ensure supply.  The outgoing Conservative government was instrumental in highlighting the plight of egg producers by establishing a Commission of Inquiry into the relationship between producers and retailers.

Since the debacle of Brexit, U.K. livestock and poultry producers have been at a disadvantage with respect to the E.U. over the cost of ingredients and labor.  In recent years, many expatriate agricultural workers have returned to their homelands depriving farmers of available labor.  Fallout from Brexit resulted in inflation adversely affecting egg farmers disproportionately to other sectors of agriculture.  Retail chains inappropriately attempted to maintain margins while offering low prices by failing to pay a fair price to packers and indirectly, to farmers.  There is an obvious learning lesson in the U.K. situation that is applicable to the U.S.

In an October 2^nd 2024 release, Conagra Brands (CAG) posted financial results for Q1 FY 2025 ending August 25^th 2024. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Campbell Soup Company and Kraft-Heinz, all currently under pressure to reduce prices to the major food service providers and supermarket chains. Despite moderate inflation consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Conagra marketing frozen dinners.

For Q1 FY 2025, net income was $467 million on net sales of $2,795 million with a diluted EPS of $0.97.  Comparable figures for Q1 FY 2024 were net income of $320 million on net revenue of $2,904 million with a diluted EPS of $0.67

The release included results for the four operating segments:-

• Foodservice: Operating profit of $35 million down 20.4 percent from FY 2024, on revenue of $267 million down 7.8 percent attributed in part to plant-related problems reducing production of branded hot dogs.
• Refrigerated and Frozen: Operating profit of $176 million, down 11.6 percent, on revenue of $1,100 million down 5.7 percent.
• International: Operating profit of $34 million, up 42.1 percent on revenue of $259 million, down 0.4 percent.
• Groceries and Snacks: Operating profit of $249 million, down 3.7 percent on revenue of $1,200 million, down 1.7 percent.

For Q1 FY 2025 (with the values for corresponding Q1 2023 in parentheses) Conagra achieved a gross margin of 26.4 percent (28.4) and an operating margin of 14.3 percent (16.8). Revenue was down 3.8 percent.

In commenting on Q1 results Sean Connolly, president and CEO stated, "Our team executed well to deliver on key priorities across the business during the first quarter in what continued to be a challenging environment. Our domestic retail volume progressed in-line with expectations, we increased share across the portfolio and advanced our portfolio reshaping initiatives. Overall, we are reaffirming our guidance for fiscal 2025, reflecting confidence in the underlying momentum of our business."

Guidance for FY 2025 included net sales flat to a decline of 1.5 percent; an adjusted increase in operating margin of 15.6 to 15.8 percent and an EPS of $2.60 to $2.65.

Conagra Brands listed assets of $21,248 million, including a disproportionate  $13,514 million as goodwill and intangibles, against long-term debt and other obligations of $8,915 million. The Company had an intraday market capitalization of $14,360 million on October 3^rd. CAG trades with a forward P/E of 11.5 and has ranged over a 52-week period from $25.16 to $33.24 with a 50-day moving average of $31.25. CAG closed at $32.65 on October 12^th pre-release, falling 8.7 percent at the open post-release on October 2^nd to close at $29.99. Twelve-month trailing operating and profit margins were 14.0 percent and 4.1 percent respectively. The Company generated a twelve-month trailing return of 5.3 percent on assets and 5.6 percent on equity.

Authorities in Germany have reported an outbreak of highly pathogenic avian influenza H5N1 on a farm in eastern Saxony close to the border with the Czech Republic.  The case was diagnosed in Muldenhammer affecting a small flock of less than 200 birds, presumably multispecies and free range.

Last week, EGG-NEWS reported on an outbreak of H5N1 in a flock of 20,000 birds in Lubusz  Province in Western Poland adjoining the common border with Germany.  In addition, a case of H5N1 was diagnosed in Breznice in Central Bohemia in the Czech Republic.

It is apparent that wild birds are now disseminating H5N1 in Europe with implications for both backyard and commercial egg and poultry meat production with free-range flocks susceptible.

Given that vaccination is an acceptable WOAH adjunct to biosecurity as a method of preventing infection, and the intention of the Netherlands to vaccinate laying hens in high risk areas, it is possible that vaccination will be adopted by other nations especially in eastern Europe.

The Federal District Court in Denver, Colorado is reviewing the petition by Attorney General Phil Weiser to block the proposed merger of the Kroger Company with  Albertson’s Corporation.

The State of Colorado maintains that competition would be adversely impacted by the transaction.  They also hold that the divestment of stores to C&S Wholesale will not be a viable strategy. The State predicts that the acquirer will dispose of or will close stores despite the appointment of the Albertsons COO as the CEO of the proposed holding company for the acquired stores and DCs.

Colorado also accuses Kroger and Albertsons of collusion through a “no poach” agreement in 2022.  A/G Weiser is requesting the Court to award the state $1 million from each of the defendants for violating state law.

Judge Adrienne Nelson has yet to render a verdict in the first of the three trials in Oregon.  Both parties had until September 27^th to submit briefs supporting their respective positions.

The Attorney General of Iowa, Brenna Bird was joined by the Attorneys General of 21 other states in appealing the District Court ruling upholding the Massachusetts Question #3 Rule on the production of pork.  Question #3 bans sale of pork or transport through the state of product not produced in accordance with housing requirements, specifically banning gestation crates for sows.

Attorney General Bird claims that Massachusetts Question #3 would impose severe costs on Iowa pork producers. This contention is questioned given that there is adequate pork available derived from sows held in group housing.  The second claim that prices would escalate is more valid given post Proposition #12 prices for pork products in California.

The appeal will be based on the reality that Massachusetts Question #3 contravenes the Import-Export Clause prohibiting states from restricting interstate transport.  The plaintiffs will invoke the Dormant Commerce Clause that vests authority to regulate interstate commerce in the federal government. This claim was rejected by the Supreme Court with respect to Proposition #12. The third component of the appeal will be recognition of the Full Faith and Credit Clause that was upheld by SCOTUS in considering the Proposition #12 appeal.

Along with the entire poultry industry EGG-NEWS recognizes the unfortunate disruption of life and the sad loss of at least 160 residents of affected states with the death toll expected to rise as first responders gain access to remote regions of West Virginia and North Carolina. Condolences are extended to the families of those lost in the floods that accompanied the catastrophic event.

The egg industry appears to have been mildly impacted by Hurricane Helene with Cal-Maine Foods the major producer in the southeast reporting minor damage. Large complexes near Gainesville were largely unaffected other than by power failures and inconvenience relating to access.

The Hurricane disrupted the broiler industry in the region mainly through plant closures as a result of disruption of grid power and in a few cases, loss of municipal water required to allow processing.  All the major integrators in the region were affected including Pilgrim’s Pride, Wayne-Sanderson, Case Farms, House of Raeford and Amick among others. The Pilgrim’s Pride plant in Douglasville, GA. sustained severe damage that has closed the plant.

 Across the industry, individual growers sustained wind damage to buildings and some have reported flooding.  Most operations managed to preserve flocks using emergency generators to power ventilation.  As with the aftermath of Hurricane Katrina, the major problem related to adequate storage of fuel to power generators.  Other than in a few cases, road access permitted refueling until power was restored.

Road in many parts of western North Carolina were severely affected by landslides and subsidence and it will take many months before damaged bridges and roads are repaired. This will require reduced loads and deviations with rerouting for feed delivery and flock transport.

Hurricane Helene and the deluge that followed affected cotton and other row crops, but the affected states are not major producers of corn and soybeans as compared to the top ten states in the Midwest that were unscathed.

Flooding with damage to railroad tracks affected Florida and western North Carolina although critical connections between Tennessee and Georgia were running after temporary repairs including removal of downed trees and repair of power lines lines and track after washaways.  Norfolk Southern warned of extensive delays as a result of damage in West Virginia and South Carolina.

The impact from Helene was more attributed to torrential rain and flooding rather than to wind damage. Meteorologists and climate experts attribute the power of the storm and extensive rainfall to the effects of global warming.  The rapidity with which Helene gained force while transiting the Gulf of Mexico is directly related to the temperature of surface water, fueling the intensity of the Hurricane.  ClimaMeter a consortium of scientists in the E.U. estimated that over a decade, hurricanes have resulted in approximately 25 percent more rainfall and are up to 10 percent more intense in terms of wind speed than in previous years.  Although Hurricane Helene is regarded as a rare and unique event, federal agencies and state governments together with the agricultural community can expect more frequent and more devastating storms in the future. This is based on the reality of elevated ocean temperatures, attributed to release of carbon dioxide and other greenhouse gases from burning fossil fuels and emissions from industry over many decades.  These conclusions are based on the application of rapid attribution analyses that allows meteorologists to compare data collected during and after storms and to quantify the effect of global warming on intensity and severity of weather events.

The October 1^st release of the Purdue University-CME Group Economy Barometer Index for row-crop production fell in September by a substantial 12 points to 88 points. The Index of Current Conditions was down 7 points from August to 76. The Future Expectations Index was down 14 points to 94. The Index is derived from the responses of 400 U.S. farmers and was conducted from September 9^th to 13^th.

Evident conclusions from the survey is that farmers have profound concerns over the prices for their commodities by despite (but due to) bountiful yields in 2024 declining inflation, lower interest rates. The outstanding concerns were:-

• A sharp drop in prices for corn and soybeans reflecting disparity between supply and demand
• Declining prospects for exports with competition from South American producers and declining demand by China
• High prices for seed, fertilizer and other inputs
• The prospect of higher energy costs with turbulence in the Middle East
• The outcome of the 2024 national election creating uncertainty over farm policy and support
• Failure of Congress to pass a Farm Bill
• Decreased demand for biofuels

Many respondents indicated that they would carry higher debt burdens through 2024 and into 2025 mainly due to increased costs of inputs including seed, fuel and fertilizer for the current season.

Epidemiologists affiliated with the U.S. Centers for Disease Control and Prevention (CDC) in cooperation with the Ohio Department of Health have collected serum specimens from veterinarians and technicians attending the annual conference of the American Association of Bovine Practitioners.  The study will ascertain the prevalence of antibodies against H5N1 in this specific cohort having direct contact with dairy cattle.  The study will also evaluate exposure, use of personal protective equipment, seasonal influenza vaccine or any history of respiratory illness.

A spokesperson for the CDC stated, “Veterinary professionals have a key role in the response to H5 bird flu.  The goal of the this sero-survey is to better understand the extent of prior influenza A (H5) infections among people who work closely with cattle and the current risk of infection associated with occupational exposures in the bovine veterinary practitioner community.” It is noted that there have been 242 diagnosed dairy herds in 14 states over the past seven months with incident cases reported each week.

This program should be extended to poultry health professionals, farm managers and those coming into contact with egg-production pullet and layer flocks in anticipation of a fall reoccurrence of HPAI.

The case involving Darwin’s Natural Pet Food was reviewed last week. The company concerned is headed by a scofflaw and serial denier of the consequences of bacterial contamination. Despite  a warning letter from the FDA the Company refused to recall adulterated pet food. This week a second company Lysnt, LLC was forced to recall Answers™ brand products.  This action was taken after an initial refusal to recall product following evidence of adulteration with Listeria and Salmonella in unopened packages at retail.  The FDA investigation followed reports of illness in dogs consuming the food that is sold nationwide in stores and online.

The FDA has warned consumers to thoroughly decontaminate all pet feeding dishes and to destroy any unused raw beef or raw chicken formula produced by both companies.

Contaminated pet food may cause illness and in the case of Salmonella, pets may become chronic carriers and intermittent disseminators of the pathogen. This represents a risk to the household and especially to children.

In a release dated October 1^st, Cal-Maine Foods Inc. (CALM) announced results for the 1^st Quarter FY 2025 ending August 31^st 2024. This post summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

Cal-Maine Foods exceeded analysts’ estimates on revenue by 11 percent but the Company was apparently short on EPS.

It is noted that market conditions during Q1 2025 were favorable with an average unit revenue of $2.39 per dozen for all eggs, compared with Q1 2023 attaining a corresponding price of $1.59 per dozen. 

Cal-Maine represents a bellwether for the shell egg sector as the only public-quoted, pure-play egg company in the industry, supplying close to 20 percent of domestic shell egg consumption. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $1.2 million ‘other income,’(excluding interest income). Q1 2025 compared to $0.1 million in Q1 FY2024:

$9.8 million interest income, Q1 2025 compared to $7.3 million Q1 2024

$0.4 million loss on non-controlling interest Q1 2025 compared to $0.5 million Q1 FY203.

ISE America acquisition in Q1 2025: for $111.5 million comprised 4.7 million hens, (1.2 million cage-free)

pullets, housing, packing plants and other facilities on 4,000 acres in MD., NJ., DE. and SC. representing

a unit expenditure of $25/hen with established markets

CALM Trailing P/E =13.2

52-Week Range in Share Price: $42.25 to $77.11 50-day Moving average $70.82

Market Close, Tuesday, October 1^st $76.84 pre-release.

Post release, after-hours, 20H00 almost unchanged at $76.90.

In reviewing the CALM Q1 2025 report and the SEC 10-Q submission the following values represent key data for the most recent Quarter (Q1 FY 2024 and percentage differences in parentheses):-

• Shell egg sales attained $741,513 million in Q1 2025. Shell eggs comprised 94.3 percent of total shell egg revenue. ($443,961 million, in Q1 2023, based on 96.7 percent of shell egg revenue). (Sales value for shell eggs was up 7.9% reflecting higher average unit value).

• Dozen shell eggs sold (thousands): 309,979 (273,126; +13.5%)
• Average selling price of all shell eggs: $2.39 per dozen; ($1.59 per dozen; +50.3%).
• Average selling price of specialty eggs (excluding co-pack): $2.34 cents per dozen; ($2.28 per dozen; +2.6%).
• Average selling price of generic eggs: $2.42 cents per dozen; ($1.24 cents per dozen; +95.1%).
• Differential between specialty eggs and generic eggs: -$0.08 cents per dozen; (+$1.04 per dozen; -107.7%)
• Specialty eggs as a proportion of volume sold: 35.4%; (33.5%; -5.7%)
• Specialty eggs as a proportion of sales value: 34.2%; (47.7%; -28.3 %)
• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q1 2025: 86.1% (91.7%; -6.1%).
• Egg product sales in Q1 2025 attained $35.2 million or 4.5% of sales value at a unit price of $1.667 per lb. For Q1 2024, sales attained $22.2 million representing 4.8 percent of revenue with a unit price of $1.15 per lb.
• Cal-Maine Foods maintained a flock of 39.9 million hens on average (Capacity 48 million) during FY 2024 with 11.8 million pullets (capacity 12.7 million) plus parent breeders representing under two percent of the total flock. 

The following observations relate to the comparison of Q1 2025 with the corresponding Q1 2024:-

• Cal-Maine Foods was not affected by the 2022-2023 HPAI epornitic during FY 2022 or FY 2023. During Late December 2023 (Q3 FY 2024) the Chase, KS. Complex comprising 1.5 million hens and 240,000 pullets, representing 3.3% of the total flock was depopulated as a result of HPAI. On April 1^st 2024 (Q4 2024) the Farwell, TX complex was diagnosed with HPAI, requiring depopulation of 1.6 million hens and 0.34 million pullets.
• Q1 2025 represented a more favorable marketing comparison to Q1 2024 based on higher prices for shell eggs, as U.S. flocks were subjected to HPAI depletion, coupled with higher than normal seasonal consumer demand. Average shell egg price obtained by Cal-Maine was 50.3 percent lower than in Q1 2024.
• Comparing Q1 2025 with Q1 2024 gross profit was positively influenced by higher unit revenue for generic eggs but with no benefit from specialty eggs. The 17.3 percent lower feed cost to 49.4 cents per dozen was complemented by a 4.1 percent lower farm production costs attaining 42.0 cents per dozen,
• In a market characterized by high unit prices for generics, the relative contribution of specialty eggs is less important to net earnings in contrast to a down-market for conventional eggs. Normality will be restored in Q2 with generic eggs at a lower unit price and margin compared to specialty eggs as flocks are replaced. This is subject to the non-return of HPAI, anticipated during late fall months

In commenting on Q1 results Sherman Miller, president and CEO of Cal-Maine Foods, stated, “Our financial and operating results for the first quarter mark a strong start to fiscal 2025 for Cal-Maine Foods. These results reflect favorable demand for shell eggs during most of the quarter and significantly higher market prices compared with the first quarter last year. At the same time, the national egg supply has declined due to the recent outbreaks of highly pathogenic avian influenza (“HPAI”). As of September 1, 2024, the total U.S. hen population fell approximately 4.5% below the five-year average to 307.6 million layers. We have worked hard to increase our production and purchase more eggs from outside suppliers, and our team did an outstanding job bringing more eggs to the market despite this low-supply environment. Our higher volumes and sales were supported by the additional production capacity from recent acquisitions as well as consistent organic growth. Our operations ran well as we continued to extend our market reach and supply the demands of our valued customers.

Miller continued “We believe that today’s consumers are looking for affordable and nutritious protein options and that our shell eggs and egg products meet that need. In addition, our ability to offer a diverse product mix has been a distinct competitive advantage for Cal-Maine Foods. We strive to meet evolving consumer demand and provide choices that include conventional, cage-free, organic, brown, free-range, pasture- raised and nutritionally enhanced eggs. We have also expanded our product portfolio to include value- added egg products through our previous investment in Meadowcreek Foods, LLC for hard-cooked eggs and our recent strategic investment in Crepini Foods LLC (“Crepini”), a new venture offering egg products and prepared foods. We have a unique opportunity to leverage the established Crepini brand of quality products, including egg wraps, protein pancakes, crepes and wrap-ups, and extend our market reach to major retailers across the country. We believe there are significant opportunities to use our scale and offer additional choices through value-added egg products to our established customer base.

Miller concluded, “We are proud of our ability to consistently execute our growth strategy in a dynamic environment with favorable results. As the largest producer and distributor of fresh shell eggs in the U.S., we are mindful of our critical role in supporting the nation’s food supply with a differentiated product mix. As such, we continue to expand our capacity, including cage-free and other specialty egg production, through investments in innovative, scale-driven products and facilities. We have also identified opportunities to enhance our product portfolio through strategic acquisitions and joint ventures. We are fortunate to have a strong balance sheet and a disciplined capital allocation strategy that supports our growth objectives. Above all, we are focused on meeting the needs of our valued customers with quality products and outstanding support and service. We look forward to the opportunities ahead for Cal-Maine Foods.”

The 10-Q Report documented approved capital investment of $135.9 million for cage-free conversions, in FY 2025 through FY 2026 Of this total $115.4 million has been committed with $20.5 million to be expended.

Representative Rosa DeLauro (D-CT) has introduced the Toxic-Free Food Act.  This proposed Legislation would require the Food and Drug Administration to reevaluate the Generally Regarded as Safe (GRAS) classification with respect to chemical food additives.  The proposed law would also require post-approval assessment and would obligate applicants to provide scientific evidence to support an application for GRAS status.

Rep. DeLauro stated, “When Americans are shopping at the grocery store they should be confident that the food they are purchasing is safe for consumption and do not contain any harmful chemical additives that could result in illness or death.”

The action by Rep. DeLauro is supported by a recent article authored jointly by a physician and lawyer affiliated with Harvard University. They maintain that GRAS status should be based on scientific evidence.  The article proposed an FDA expert advisory committee to conduct a pre-market review and to ensure the safety of GRAS compounds based on risk-assessement.

Agri Advanced Technologies Gmbh (AAT) has received two awards for innovations from the German Agricultural Society (DLG) before the Eurotier Exhibition in November.  The DLG reviewed 250 products from 2,100 exhibitors representing 55 nations.  The Innovation Commission announced the medal winners on September 24^th. 

Vaccybot, an automatic vaccination robot to automate vaccination of pullets received a gold medal. Vaccybot incorporates 3-D stereoscopic cameras and intelligent algorithms and can deliver multiple inactivated vaccines into pectoral muscle at a rate of 2,800 birds per hour. 

The Eggytizer disinfection system received a silver medal. The hatchery installation destroys pathogens using low-energy electron radiation, eliminating the use of chemicals including fumigation with formalin.

In commenting on the awards, Jorg Hurlin, Managing Director of AAT, stated, “We are very proud to have been honored by the DLG.  This recognizes the team effort and high level of innovation that we put into research and development of our products”.  He added “Our goal at AAT is to create practical automation technology that increases animal welfare and health for the poultry industry.” 

AAT produces the Cheggy photo-optic system for in ovo gender determination of brown-feathered strains, to be introduced into the U.S. during the fourth quarter.

For additional information, access <agri-AT.com>.

On August 26^th, public health authorities in Ghana reported a single, spontaneous case of H9N2 avian influenza in a 5-year-old child to the World Health Organization. The May 2024 case recovered following supportive and antiviral therapy. Avian influenza H9N2 virus of low pathogenicity is endemic in poultry in the upper-east region of Ghana, although in this case, there was apparently no evident contact with chickens.

The isolated virus was characterized as an avian H9N2 strain by the U.S. Centers for Disease Control and Prevention following examination and subsequent whole genome sequencing by an international reference laboratory in the U.K.

This case and the recent H5N1 event in Missouri indicate the need to follow up on cases yielding non-seasonal influenza A isolates. Both viruses with mutations to increase human susceptibility may be more widespread than currently recognized. Isolation and characterization are necessary to identify potentially epidemic strains to facilitate preemptive measures.

The Industrial Agriculture Conversion Act is proposed as a mechanism for farmers to be compensated for converting from animal production to alternative farming systems.  The legislation was sponsored by Representatives Alma Adams (D-NC) and Senator Cory Booker (D-NJ). Supporters of the bill include a broad range of environmental and animal welfare activist organizations.

The proposed legislation would compensate farmers under the Environmental Quality Incentives Program to convert from concentrated animal feeding operations to other forms of agriculture including crop production.  The organizations opposing intensive livestock production cite disaffected contractors who claim exploitation by integrators processing hogs and broilers. In reality, contract farmers enjoy a fair return for their labor and their investment in facilities and they function independently of the vagaries of markets and the fluctuation in cost of ingredients with risks borne by integrators who own flocks and herds. 

Attempting to restructure the U.S. intensive livestock sector will not contribute to removal of the environmental aspects of animal production but will most certainly raise prices given that efficiencies of scale will be sacrificed.  Large integrators are more capable of applying technology to reduce greenhouse gas emission and promote sustainability than numerous individual small-scale producers.

The approach is somewhat reminiscent of the reply offered by then Presidential candidate, the late Governor Michael Dukakis (D-MA) who when asked by an Iowa farmer what he should grow other than low-priced corn suggested after quiet reflection “Belgian endives.” This was an example of a characteristic coastal mindset, ignorant of the realities of food production.

It will be some time before U.S. District Judge, Adrienne Nelson, renders a decision on whether the merger will proceed, based on the extent of testimony offered by the Federal Trade Commission (FTC) and rebuttal by attorneys for Kroger.

Knowledgeable observers maintain that the FTC made a strong case that the proposed merger would eliminate competition in many areas.  In many markets, especially in western states, the combination of Kroger and Albertson’s would dominate to the potential disadvantage of both suppliers and consumers.  The FTC may have convinced the Court that brick-and-mortar chains such as Aldi and the dollar stores and also Amazon as an on-line retailer were not in direct competition in many markets with the large pure-play grocers such as Albertsons and Kroger.

The demise of Haggen in 2015 following acquisition of divested stores from the Albertsons-Safeway merger raised the question of the viability of C&S Wholesalers operating 579 stores and DCs.  Failure of the proposed alternative would effectively eliminate competition.

Even with an adverse decision, Kroger has so much invested in the proposed merger that an appeal against the preliminary injunction will be inevitable.  Kroger is facing an ongoing legal action in Washington State to be followed by a similar request for an injunction banning the proposed merger in Colorado filed by the Attorneys General of those states.

EGG-NEWS and CHICK-NEWS have documented obvious operational and hygiene problems in the Boar’s Head, Jarratt, VA. plant producing liverwurst and possibly other products that have contributed to a major outbreak of listeriosis claiming ten fatalities and hospitalizing over 60 patients.

The inaction of USDA-FSIS in failing to respond to obvious deficiencies in the structure and operation of the plant over an extended period will be the subject of Congressional investigation. Legislators are questioning as to how many other Jarratts are in operation, overlooked by USDA-FSIS. The Department of Justice will become involved to determine whether criminal indictments are justified. At this time public release of documentation in the possession of Federal agencies has ceased due to ongoing criminal investigations.  

Recently, an industry publication reported on the revelations of Terrence Boyce who it is claimed  worked at the Boar’s Head Jarratt plant for seven months commencing in January 2023. According to Boyce, the Company fell short of industry standards with respect to cleaning and decontamination, previously and subsequently verified by USDA.  Boyce claims that there were apparently no responsible managers with either training or authority to ensure that hygienic standards were maintained and who allegedly knowingly condoned inadequate decontamination procedures. Boyce although not a ‘whistleblower’ in the legal sense maintains that he was terminated for advocating effective procedures that were contrary to the dictates of plant management. Given that Boyce has displayed a somewhat limited history of tenure at previous positions in industry his assertions and complaints should be under oath and verified.

It is evident that investigators will review the testimony of workers and will subpoena managers in the extreme probability of a criminal prosecution.  At the very least, Boar’s Head will face a number of civil actions with the process of discovery disclosing the absence or otherwise of acceptable standard operating procedures and deviations from industry sanitation practices.

Of significance will be whether the Company conducted routine microbiological examinations of the plant environment, equipment and products.  The results of assays for Listeria, Salmonella, E. coli or other pathogens, if conducted, will be informative and whether there was concealment of positive results. Documentation should also be available detailing action in the event of any isolation of bacteria of human health significance.

Boar’s Head will be facing a formidable plaintiff’s attorney in the form of William Marler and his team.  Given that the outcome of the cases involving the Blue Bell Creamery and the Peanut Corporation of America, not only is the survival of the company and its brand in question but also the future liberty of senior management of the family-owned enterprise.

Twenty-three members of USAPEEC participated in the September 16-18^th, America’s Food and Beverage Show held in Miami.  Members with booths within the pavilion interacted with trade missions from the Caribbean region and Central America that represent a significant export market for U.S. poultry products.

Biologists at the Klamath Basin National Wildlife Refuge Complex in Oregon are currently combating an outbreak of avian botulism affecting a wide range of migratory species including stilts, pintails and wigeons.

Botulism occurs in populations of birds on lakes and water systems that have been stressed by drought resulting in the concentration of birds, lowered water levels and exposure of rotting vegetation.  Birds that ingest botulinum toxin are themselves responsible for perpetuation of outbreaks since other birds feed on maggots on rotting carcasses that contain lethal quantities of toxin.  Volunteers are gathering dead birds for safe disposal. Mildly affected birds showing paresis are been transported to rehabilitation centers to receive supportive care.

Outbreaks of avian botulism occur frequently along the Mississippi and Pacific Flyways following disturbances in water level in habitats as a result of drought or inappropriate management of water systems.

Retail chains, importers and distributors serving a wide range of stores  implemented proactive measures to minimize the impact of the anticipated East and Gulf coast port strike. The International Longshoremen’s Association (ILA) that called the strike represents 45,000 members in 36 ports handling almost half of U.S. imports and a high proportion of exports.

 In an earnings call on September 26^th, Ron Vachris, CEO of Costco Wholesale described advanced shipping of products for the holiday season. He stated, “We cleared the ports and we have done several things that we could to get holiday goods in ahead of this timeframe. We looked at alternative plans that we could execute by moving goods to different ports and coming across the country if needed.”  It is of concern that even a strike of short duration would result in disruption. It would take weeks to clear accumulated cargo containers and move them to their destinations.

Shipments of eggs and poultry meat to Caribbean markets would have been affectedl , benefiting competitors including Brazil.  Shortages of imported foods would havel occurred with a prolonged strike and at the very least, disruption would have added to cost and represented an inflationary factor in an economy that has managed to attain a 2.5 percent level, down from approximately 9 percent over 12 months, due to appropriate management by the Federal Reserve.

The Administration announced that it would not invoke the Taft-Hartley Act and force port workers to strike.  This would have been be politically unacceptable to unions some of which appear to be wavering in their traditional support for the Democratic ticket.

The White House  intervened by sending the Acting Secretary of Labor and the Secretary of Transport to participate in negotiations and serve as go-betweens to engender an agreement between the ILA and the United States Maritime Alliance (USMX) resulting in a suspension through January 15th 2025.

Strauss Feeds located in Watertown, WI. was cited by the U.S. Department of Labor, Occupational, Safety and Health Administration (OSHA) for excessive airborne dust in the environment of their feed mill.  Following an inspection during February 2024, the Agency identified 24 safety and health violations essentially attributed to poor housekeeping and maintenance.  The feed mill failed to evaluate workspaces for dust hazards and allowed accumulation of combustible dust representing a health hazard.

OSHA area director Chad Greenwood noted, “Unsafe levels of airborne dust can ignite suddenly causing explosions and fires that jeopardize the safety of workers.  Left unchecked, these same dust hazards can cause workers long-term health issues.”

In addition to the problem of dust, the inspection revealed additional hazards relating to unsafe walking and working surfaces and operation of forklifts within spaces with accumulation of combustible dust.

In a press release replete with Madison Avenue jargon and buzz-words but short on specifics, Emily Metz, president and CEO of the American Egg Board announced the Meant to be Broken promotional campaign.  She stated, “We see it as the first step in a multi-year journey – a movement and a call to action to rediscover eggs and their potential to support the goals and lifestyles of a complex consumer.”

She added, “It’s also a rallying cry for an industry that has seen its share of recent challenges.  We have been on a journey on behalf of America’s egg farmers, to break out of our own status quo and explore the opportunities brought forward through risk-taking. The American Egg Board regards the campaign as a “novel message and a fresh approach to create real excitement about the valuable ways eggs can help redefine a love of food.”

Edward Hoffman, Vice-president of marketing, communications at the AEB stated, “Leveraging this knowledge, we repositioned eggs from an often overlooked and underappreciated kitchen staple with specific uses to an indispensable food or ingredient with unlimited potential to support their active, often hectic lives.”

The campaign will include “video spots, custom messaging to targeted audiences across TV, online, video and cross-screen display.  A user-generated content challenge with influencers on TikTok (if it survives) is intended to generate recipes with new ideas and methods of preparation.

Metz correctly states, “Our success will be marked by people reaching for eggs more often and with more joy and excitement.”  The ultimate measure of success will be a quantitative increase in domestic egg consumption at prices that offer positive margins. Specific figures will determine the success of the Meant to Be Broken campaign as an attempt to stimulate consumption. The industry will be more interested in actual increases in consumption at prices offering both producers and retailers favorable margins than the number of views on social media, self-serving accolades, awards or other advertising metrics.

At the end of the day, most consumers regard eggs as eggs, and basically they purchase eggs when the household refrigerator runs low. Some demographics do however display brand loyalty based on attributes including organic, cage-free status or nutritional enhancement. The value of national brands is being eroded by the proliferation of widely promoted private brands based on availability, competitive pricing and shelf positioning.   

 If the AEB campaign increases consumption by stimulating demand then it will be successful and expended check-off dollars will be justified. The effect will be difficult to measure but let us hope.

With the International Longshoremen’s Association intent on striking on October 1^st unless an acceptable contract offer is received from the U.S. Maritime Alliance (USMX), the consortium of operators of Atlantic and Gulf ports. Trade associations including the National Association of Manufacturers, the American Trucking Association and the National Retail Federation have lobbied the House Transportation and Infrastructure Committee to urge the Administration to become involved. 

In concurrent action, a letter was addressed to the White House by 69 Republican Members of the House noting that a strike would have devastating economic consequences. Legislators emphasized the need for immediate intervention to achieve a reasonable compromise.

The letter stated, “We expect the Administration to provide any and all support it can offer to both parties as these negotiations continue.  Furthermore, if the strike should occur we urge the Administration to use every authority at its disposal to ensure a continuing flow of goods and avoid undue harm to American consumers and the national economy.” 

Given the need to secure support of unions for the upcoming election, the White House has indicated that it does not intend to invoke the Taft-Hartley Act that would force workers to continue activities while negotiating, thereby limiting port stoppages.  This action would be politically unacceptable to all unions at a critical juncture in the election process.

The Administration should however use its power of persuasion with Acting Secretary of Labor, Julie Su and possibly Transportation Secretary, Pete Buttigieg to become involved in negotiations.  Administration participation was instrumental in achieving a mutually acceptable agreement between unions and operators of West coast ports in 2023.

On September 26^th Costco Wholesale Corporation (COST) posted results for Q4 and FY 2024 ending September 1^st 2024. The Company exceeded the consensus for earnings but was light on sales. COSTCO as the leading club chain serves as a bellwether for omni-channel warehouse in-store and on-line buying. The Company is a barometer of consumer confidence, offering groceries, clothing, household necessities in bulk in addition to discretionary appliances, recreational, luxury and electronic items.

For the most recent quarter, the Company earned $2,354 million on revenue (including fuel and membership fees) of $79,697 million with a diluted EPS of $5.39. For the corresponding Q4 of FY 2023 ending September 3^rd, Costco earned $2,160 million on equivalent revenue of $78,939 million with a diluted EPS of $4.86. 

For the most recent quarter revenue was 1.0 percent higher than in Q4 FY 2023 and net earnings were up by 9.0 percent. Gross margin for Q4 FY 2024 was 11.0 percent, compared to 10.6 percent for the corresponding quarter in FY 2023. Operating income attained 8.9 percent, up from 8.8 percent in Q4 FY 2023, despite increased freight, transport, wages and utilities.

For FY 2024, the Company earned $7,367 million on revenue (including fuel and membership fees) of $254,453 million with a diluted EPS of $16.56. For corresponding FY 2023 ending September 3^rd, Costco earned $6,297 million on equivalent revenue of $242,290 million with a diluted EPS of $14.16. 

Comparable global same-store sales for Q4 2024 (excluding fuel and foreign exchange) rose to 6.9 percent compared to Q3 2023. U.S. same store sales were up 6.3 percent; Canada by 7.9 percent and the Other International category, by 9.5 percent. E-Commerce was up by 19.5 percent.

Costco raised membership fees as expected in Q4 with revenue attaining $1,512 million. This was below analysts’ forecast of $1,550 million but higher than $1,509 in Q4 2023. At the end of FY 2024 there were 137 million members with 25.9 percent or 35.4 million at the Executive Level accounting for 74 percent of sales.

On September 1^st Costco posted total assets of $69,831 million. Long-term debt and lease obligations attained $10,745 million. Costco had an intraday market capitalization of $402,730 million on September 26. COST trades with a forward P/E of 51.6 and has ranged over the past fifty-two weeks from $540.27 to $923.83 with a 50-day moving average of $867.55. Costco closed pre-release at $901.44 on September 26^th but fell in after-hours trading, post-release by 1.1 percent to $891.47 at 18H00. Twelve-month trailing operating margin was 3.8 percent and profit margin 2.8 percent.  The Company generated a return on assets of 8.4 percent and 31.6 percent on equity.

At the end of the recent completed quarter, Costco operated 890 warehouses. There are 614 in the U.S; 108 in Canada; 40 in Mexico; 33 in Japan; 29 in the U.K. and 66 others in seven other nations among the E.U., Asia and Australia. This was a net increase of 12 warehouses during Q4.

According to recent news reports, Robert Bonta, Attorney General of California, has filed suit against Exxon Mobil to establish an abatement fund relating to recycling of plastic waste and enabling imposition of civil penalties for contravention of state laws.  Concurrently, a coalition of environmental NGOs including the Sierra Club and organizations concerned with plastic pollution of waterways and along the Pacific littoral have also filed lawsuits seeking injunctive relief relating to disposal of plastic waste, demanding reimbursement for cleanup. The coalition believes that the solution to the problem of plastic waste will involve forcing manufacturers to cease production of some plastics rather than mandating recycling.

A contributor to the conflict is the apparent inability of civic organizations to collect plastic waste with only an estimated ten percent of the potential volume reaching conversion plants.  Attorney General Bonta claims that 90 percent of plastic waste is not recycled but is used as fuel. 

Despite claims relating to sustainability, there are questions as to sustainability claims relating to the recycling of plastic packaging.  In 2022, major manufacturers including Unilever, PepsiCo, Mars and Mondelez established the Consumer Goods Forum to select single-use plastic packaging suitable for recycling applying available and anticipated technology. Exxon Mobil a target of activists, has developed advanced recycling processes and has offered to purchase “certified-circular polyethylene” material at volumes approaching 100,000 metric tons per year.

It would appear that many plastic companies obscure their responsibility behind industry associations including the Vinyl Institute and the American Chemistry Council among others.  In contrast, politicians use environmental issues and specifically plastic as a springboard for higher office claiming justifiable action against manufacturers in the name of environmental justice.

On September 19^th, the Food and Drug Administration announced approval of FluMist® vaccine for home administration to stimulate immunity against influenza subtypes A and B in individuals 2 through 49 years of age.  FluMist® has been used effectively in children two through five years of age since 2007 and can now be administered by other than a healthcare provider. 

Availability of a nasal spray influenza vaccine will facilitate mass administration of farmworkers who come into contact with live poultry.  This is considered essential to prevent an unlikely recombinant event between human and avian viruses that might have zoonotic potential.

Dr. Peter Marks, director of the FDA Center for Biologics Evaluation and Research emphasized that annual vaccination reduces the potential for epidemics. FluMist® produced by AstraZeneca will be available in 2025. The product contains live attenuated (non-pathogenic) influenza A and B virus strains selected to reproduce in the nasal passages at an optimum temperature of 77F compared to higher temperatures in the lower respiratory tract

Preventive vaccination using FluMist® is a practical alternative to arranging vaccination clinics requiring healthcare providers to inject vaccines and hopefully resulting in wider uptake of vaccine. A higher proportion of immunized individuals in rural populations will lower the incidence of seasonal influenza, reduce absenteeism and protect vulnerable members in communities.

Cooper Farms a long-established and prominent producer of eggs and turkeys in northwest Ohio recently released their annual 2024 Impact Report emphasizing sustainability and civic generosity.

The company reports that the St. Henry plant will reduce water consumption by 50 million gallons annually by 2028 and is making progress towards achieve landfill-free status.  During the past year the company donated turkey meat to food banks and funded an obstetrics wing at a County hospital.

Following recent reports of cases of highly pathogenic avian influenza in eastern Europe the Czech Republic has reported outbreak on a goose farm in the town of Martiniceu-Breznice in central Bohemia. The case indicates that migratory birds are transmitting avian influenza virus with free-range flocks especially vulnerable. In past seasons characterized by a high incidence rate, veterinary authorities have mandated enclosing flocks.

The inevitability of reoccurring HPAI infection among flocks in France producing foie gras led to an extensive vaccination program in 2023. The success of prevention justified extension of vaccination into 2024. 

People for the Ethical Treatment of Animals (PETA) have criticized the Humane Society of the United States for their promotion of the Global Animal Partnership.  Basically, PETA is opposed to all forms of intensive livestock production and ultimately all consumption of farm-raised animals since the group promotes a vegan agenda.

There is also a commercial component to the conflict, since HSUS benefits from fees imposed to award GAP certification that presumably provides a marketing advantage. The situation detracts from fund raising by PETA as more reasonable but concerned consumers accept the welfare benefits associated with GAP certification to the detriment of support for PETA extremism.

Following the late August outbreak of HPAI in a turkey complex at Moshav Nahalal the Ministry of Agriculture of Israel has reported a second case at Moshav Ram-on in the Gilboa Region, among broiler breeders.

According to the press report 34,000 birds in four houses were infected and depopulated. A six-mile radius surveillance zone has been established in accordance with World Organization of Animal Health guidelines.

Governor Gavin Newsom is expected to sign the California School Food Safety Act into law, following the unanimous passage of the bill.  This legislation sponsored by Assembly-member Jesse Gabriel, (D-Encino) will ban inclusion of six designated dyes for inclusion in school meals served in California.

The Bill is essentially based on emotion and has little scientific justification.  The Food and Drug Administration has not banned the additives that are widely used in confectionary, candies and a wide range of foods.  The six synthetic dyes are available in Europe, although some countries require label disclosure if included in foods.

The precipitous action by the California legislature establishes a dangerous precedent since the process of risk assessment and chemical and biological assay to establish safety has been bypassed. The California law also creates a situation in which a federal agency that has ruled the additives innocuous is overruled by a state legislature. Ultimately, the law will add to cost and limit the sourcing on many ingredients for schools.

On September 25^th, the FDA organized a public meeting to explain the procedures used to assess chemical food additives and to receive public and industry comments.  The FDA appears to be committed to a transparent process “for identifying and prioritizing food chemicals currently in the market for safety review”. Traditionally the FDA has demonstrated a lack of leadership, indecision and inordinate delays in establishing safety or otherwise for additives. 

There is concern that states including California pass “feel good” laws that appeared a good idea at the time but have unintended consequences and wide ranging practical and cost implications.

The USPOULTRY Foundation has approved $570,000 for five research grants at four institutions for research relating to current topics challenging the poultry industry. 

• South Dakota State University received a grant to develop both live attenuated and inactivated vaccines for avian metapneumovirus subgroup B. 
• The USDA Agricultural Research Service received was funded to develop multivalent vaccines to protect against avian metapneumovirus: -
• Georgia Southern University will investigate carbonized feathers to control poultry odor emanating from plants. 
• Texas Tech University will evaluate statistical approaches and biomapping in secondary processing.
• North Carolina University will evaluate the possible effects and synergy between dietary phytase and acidic tuff to support extended laying cycles for commercial egg-producing flocks.

Given the availability of funds through USDA appropriations it is questioned why USDA-ARS laboratories are eligible for USPOULTRY Foundation research grants.  Personnel at these institutions and their operating budgets are supported by public funds.  Grants to USDA and possibly commercial entities deprive universities and academic institutions of valuable seed funding to initiate research projects.

The California Department of Food and Agriculture confirmed a diagnosis of H5N1 highly pathogenic avian influenza in a flock of 62,800 growing turkeys on September 18^th.  Depopulation and ring surveillance have been implemented.

Concurrently, APHIS reported six incident cases of bovine influenza-H5N1 in dairy herds in Merced County bringing the total in California to 16 since September 18^th.  A total of 231 dairy herds have been affected in 14 states but most of the herds have apparently recovered. There is no data on the number of animals culled as a result of suboptimal post-recovery milk production or incidence of zoonotic infection among workers.

Karen Ross, Secretary of the California Department of Food and Agriculture, stated, “We have been preparing for the possibility of HPAI since earlier this year when detections were confirmed on dairy farms in other states.  She added, “Our extensive experience with HPAI in poultry has given us ample preparation and expertise to address this incident with worker’s and public health as our top priorities.”

According to a memo circulated by David Juggina, Head of Supply Chain Operations for Walmart, the Company intends to absorb the Sam’s Club supply chain to serve both companies.  This will allow Sam’s Club access to enterprise resources and infrastructure.

This commonality with Walmart may not be beneficial for Sam’s Club over the long term. In contrast sourcing of items by competitor Costco with selection of suppliers and logistics is tailored specifically towards the demographics they serve in their warehouses.

A number of years ago, a study contrasting the expansion and financial results of Sam’s Club and Costco identified the reality that a high proportion of Sam’s Club warehouses were located on the same property as a Walmart store.  This situation, although expedient with respect to commonality of parking and service areas, actually detracted from foot traffic at Sam’s Club warehouses attempting to cater to an affluent demographic buying in bulk.  By the same token, it is possible that by merging the supply chain between Sam’s Club and Walmart, the warehouse enterprise may become a poor stepchild influenced by Walmart purchasing policies and established suppliers. Stocking of warehouse club stores and supercenters requires different approaches, tailored to their respective clientele.

Governor Gavin Newsom has enacted a law banning all plastic bags whether single-use or recyclable. The 2024 law is regarded as a positive approach to correct the deficiencies inherent to the original statewide ban on plastic bags enacted in 2014 and affirmed by voters in a 2016 referendum.

State Senator Catherine Blakespear noted that, “The quantity of plastic shopping bags trashed grew from 8 pounds per capita in 2004 to 11 pounds in 2021with negligible recycling.

Following passage of the bill, consumers will either have to bring their own reusable bags to supermarkets or accept paper bags, possibly with a cost.

A spokesperson for the California Public Interest Research Group noted, “Plastic bags create pollution in our environment and degrade into microplastics that contaminate our drinking water and pose a threat to health.”  He added, “With the Governor’s signature, California has finally banned plastic bags in grocery checkout lanes.”

California is regarded as a leader in environmental issues, and it is evident that this initiative involving an absolute ban will be followed by other states.  At the current time, twelve states have imposed bans of some form on plastic bags in addition to numerous cities that have enacted local ordinances against single-use plastic containers.

A wide range of national trade associations and agricultural organizations joined in addressing a letter to the President concerning the impending October 1^st strike by the International Longshoreman’s Association that would impact all East Coast and Gulf ports.

At issue is the impasse resulting in termination of negotiations between the International Longshoreman’s Association and the United States Maritime Alliance representing port operators.  The Union has threatened a strike on October 1^st following a vote among rank and file unless an agreement is reached.  The 176 signatories to the letter addressed to the Administration called on the parties to resume negotiations.

The Administration has indicated that it would not invoke legislation to force workers to operate without a contract. This is presumably due to proximity to the general election and the political implications of action that might be construed as anti-union.

The West Coast port strike was averted by last minute negotiations and with the involvement of the Secretary of Labor who shuttled between the parties and facilitated conclusion of a satisfactory agreement.

The impending East Coast and Gulf port strike would be damaging to the economy and an embarrassment to the Administration.

In a September 20^th announcement, the Center for Veterinary Medicine of the Food and Drug Administration, announced the establishment of four Animal and Veterinary Innovation Centers.  The areas of concentration that have been identified relate to the interface of animal and human health including: -

• Deletion or insertion of genes in animals relating to health or agricultural production with specific reference to regulatory issues.
• Highly Pathogenic Avian Influenza in the context of One Health together with other emerging zoonotic diseases.
• Opportunity areas for the diagnosis and control of animal diseases with the potential for public health challenges.

EGG-NEWS supports the transfer of responsibility for GM activities relating to food animals to to the USDA. FDA should not be involved with aspects of the epidemiology of zoonotic diseases. Research should be conducted at USDA facilities with appropriate personnel and facilities. The CDC is the obvious agency to monitor and develop countermeasures for zoonotic diseases with the NIAID of the NIH conducting basic and applied research.

Given that the FDA is incapable of successfully managing mandated activities involving regulation of pharmaceuticals and food, attempts at mission creep appear to be inappropriate

The San Diego County influenza surveillance system, has disclosed detection of H5 influenza RNA in wastewater.  The County operates a closed sewage system that suggests that the presence of viral RNA could be derived from discarded contaminated animal products or an ongoing human or animal infection or the unlikely expedient of contamination from wild bird droppings.

The presence of H5 influenza RNA was reported to the California Department of Public Health, the California Department of Food and Agriculture and the California Department of Fish and Wildlife for further investigation.

Wastewater assay represents an early warning system for the presence of influenza viruses and other pathogens circulating in animal or human populations in a given area facilitating an early response.  It is noted that surveillance of sewage detected H5N1 in water in Texas counties concurrent with the emergence of bovine influenza-H5N1. This was attributed to disposal of contaminated milk.

The recent 2024 Ag Outlook Forum in Kansas City, MO. highlighted challenges facing the agricultural sector of the U.S. economy. Presentations included: -

• Dr. Spiru Stefanou, Administrator of the USDA Economic Research Service, expects farm income to drop seven percent to $10.2 billion in 2024 compared to the previous year.
• Dr. Seth Meyer, USDA Chief Economist, noted that despite projected high yields for corn, soybeans and wheat, escalation in production costs will reduce margins.
• The effect of California Proposition #12 is evident in increased prices for pork products.   According to Laurie Stevermer, President of the National Pork Producers Council, reduced consumption as a result of higher prices is to some degree offset by increased pork exports.
• Generally, beef producers have benefitted from current conditions, but long-term production is questioned.  Higher prices for poultry and eggs coupled with stable to low feed prices have compensated for previous losses.

Prospects for agricultural exports to China are questionable.  The current Administration has retained the tariffs on imported goods imposed during the previous Administration and has recently announced protective tariffs on EVs, steel and aluminum.  Former President Trump has announced high and broad tariffs on imports from China should he be re-elected. Farmers cannot expect to export to China in competition with Brazil and other suppliers if the U.S. adopts a policy of high punitive tariffs.

The 600 lb. gorilla in the room was the failure of both the House and Senate to produce an acceptable Farm Bill, delayed from 2023 and with hardly any prospect of passage during the 118^th Congress.

In circumstances repetitive of previous episodes dating back to 2018 and more recently in October 2023, FDA has isolated both Salmonella and Listeria from raw cat and dog foods produced by Arrow Reliance, Inc. under the Darwin’s Natural Pet Products brand.  In 2023, the company refused to recall affected batches following demonstration of Salmonella in product.  A year later, the Company responsible for the brand, has reacted in a similar way and has declined to recall products.  Accordingly, the FDA has issued a public warning.

Contamination of pet food with pathogens that impact both animals and humans and will result in infection and colonization of the intestinal tract of pets leading to intermittent shedding to other pets, household members and especially children.  Feeding raw food to pets is undesirable and is the subject of a warning by the American Veterinary Medical Association based on risks to both animals and their owners.

Should any litigation arise from consumption of contaminated pet food, the Company will be held liable and in this instance will face both direct and punitive damages.

The FDA should exercise its authority and follow procedures to initiate a mandatory recall of Darwin’s Natural Pet Products. These are distributed directly to consumers who may not be aware of the consequences of feeding products, determined by the FDA to be adulterated by pathogen contamination and non-approved inclusion of peroxyacetic acid. The Company will face consumer lawsuits that will inevitably result in adverse verdicts against the Company with substantial direct and punitive damages especially should a child be infected with a Salmonella strain derived from the adulterated pet food.

State officials in Maine have recalled eggs produced by Rainbow Farm located in Orland, in Hancock County, Maine.  Eggs were distributed at farmers’ markets in the area in addition to online distribution through FarmDrop.  The farm operated by Noah and Lorelei Cimeno claims sustainability for their cattle, vegetable and chicken production. Hens are allowed to free range and have documented contact with free-living birds as per postings on social media.

It will be interesting to learn the SE history of the flock from routine or mandatory SE swab testing and to establish vaccination. If under 3,000 hens in total, Rainbow Farm would be exempt from the 2009 FDA Final Rule on Salmonella. A flock of 2,900 hens at a conservative 75 percent hen-day production could produce 66,150 dozen packs annually representing a considerable risk to consumers. The U.S. cut-off of 3,000 hens is far higher than the U.K. level in recognition of the possibility of disseminating SE especially from operations vulnerable to introduction and persistence of infection.  Exemption from the FDA Final Rule still implies adherence to prevailing obligations to operate with prudence and does not absolve farm owners from lawsuits alleging negligence.

Given that pasture will have been contaminated by SE is difficult to envisage how the farm will be able to restock and supply eggs free of the pathogen even with comprehensive vaccination of flocks.

“Free-range,” “Certified Organic,” “Sustainable,” “Pasture raised,” “Farm-fresh” and other claims have no relevance to food safety.

During the week ending September 7^th, two cases of H3N2v infection were confirmed in patients under the age of 18.  Both attended an agricultural fair independently with one having indirect contact and the second direct contact with hogs.

Investigations failed to detect transmission to other members of the household.  In one case, diagnosis was complicated by a concurrent infection with SARS-CoV-2 virus that initially created concern over contagion.  Both patients recovered without requiring hospitalization.  The ProMED report documentation of nine variant influenza cases in 2024 to date, involving either H3 or H1 influenza virus contracted from hogs.

The trial in Oregon to consider the application by the Federal Trade Commission (FTC) for a preliminary injunction block the proposed merger of The Kroger Company and Albertson’s Corporation concluded on Tuesday 17^th. A second round of litigation commenced in Washington State this week to be followed by a hearing in Colorado.  At issue is the effect of the proposed merger on consumers, workers and suppliers from the creation of the combined enterprise. 

EGG-NEWS has assembled a selected series of articles documenting the progress of the merger over the past 23 months presented in chronologic sequence. The entire list of close to 50 postings can be retrieved from EGG-NEWS by entering “Kroger” in the SEARCH block

According to a Placer.AI survey as reported by Timothy Inklebarger in Supermarket News, Aldi consistently recorded higher traffic than competitors over the first five months of 2024.  Aldi peaked with a 30 percent month-over-month increase in February, declining at a gradual rate to stabilize at 25 percent in May.  In contrast, the closest competitor was Dollar General peaking at 18 percent in March and settling at 14 percent in May.  Traditional supermarkets including H-E-B, Albertsons and Kroger clustered at approximately eleven percent on average in March at their respective peaks for traffic, dropping to negative values in April and recovering to five percent in May. 

Costco was fairly steady ranging from 11 to 12 percent over the period February through May.

Dollar Stores as a group peaked at 17 percent in March reflecting frugal shoppers limiting expenditure during the first quarter. 

Warehouse clubs averaged a ten percent increase in foot traffic similar to major grocery chains and warehouse clubs during May, Dollar Stores were up 13 percent, warehouse clubs ten percent, with traditional pure-play grocers at nine percent.

The Placer.AI survey showed the average duration for a visit to a Dollar Store to be 16 minutes per visit compared to traditional grocers at 23 minutes and warehouse clubs, 35 minutes.  This is consistent with buying patterns and would be inversely proportional to “ticket” value. Shoppers at Dollar Stores purchase only a few essential items per visit compared to warehouse clubs where members purchase in bulk taking advantage of lower per unit cost.

In testimony in the trial reviewing the FTC request for a preliminary injunction to block the merger between Kroger and Albertson’s, Rodney McMullen, CEO of the Kroger Company denied price gouging or any intention of raising prices if the proposed transaction is completed.

McMullen attributed high costs for groceries after the inflationary post- COVID period to an escalation in the cost of fuel, credit card swipe fees and groceries sold by his and other chains.

McMullen stated that “Kroger would absolutely not” raise prices if the merger is concluded and has gone on record as offering to apply $1 billion to reduce prices in the year following the merger between the companies.

McMullen pointed to competition as a mechanism to maintain prices by stating, “You can’t price above the market.”  This being said, consumers should not be in a position of being limited to where they can purchase their groceries.  The entire case rests on the contention by the FTC and the Attorneys General of nine states that the transaction would effectively reduce competition. This is despite the intention to divest over 500 stores in 18 states to C & S wholesale grocers. This expedient is regarded by many observers as an impractical and nonviable strategy citing the previous history of Haggen acquiring divested Safeway stores.

The FTC maintains that Kroger does not compete with Aldi, a deep discounter; Amazon, predominantly an on-line enterprise; dollar stores, serving a different spatial and earnings demographic or Target offering a broad range of merchandise in addition to groceries. The FTC considers Kroger and Albertsons to be direct competitors as pure-play grocers with their combination potentially detrimental to consumers, workers and suppliers, especially in western states.

In March 2021, Allison Lee, Acting Chair of the Securities and Exchange Commission (SEC), established an ESG task force to review claims on environmental compliance, many of which could have been characterized as “green washing”.  The activities of the task force were continued under the direction of Gary Gensler, confirmed as the permanent Chair. The task force initiated action against Goldman Sachs, McDonald’s Corp., Activision Blizzard and other companies making direct or implied claims relating to sustainability and environmental benefits. The SEC maintained that unsubstantiated claims had the potential to mislead investors.

Based on the success of the enforcement actions and evidence of more recent compliance the SEC has decided to reassign personnel in the ESG enforcement task force to other activities including claims relating to artificial intelligence.  These have now emerged as a source of misrepresentation by management of companies in violation of SEC rules.

China introduced bivalent H5/H7 vaccination for supply flocks following repeated zoonotic outbreaks of H7N9 avian influenza among consumers purchasing chicken at wet markets. The recombinant vaccines were directed against H5N1 and H7N9.

The vaccination program successfully reduced the prevalence of low pathogenicity H7N9 among flocks supplying wet markets with a corresponding decline in the incidence rate of human infections.

An unfortunate consequence of the program was the emergence of highly pathogenic H7N9 strains that now circulate among flocks in northern China.  This is attributed to mutations induced by vaccination.  It is evident that it is necessary to monitor the emergence of new strains of virus following initiation of any any avian influenza vaccination program and to modify vaccines in response to emergence of variants.

The management of Campbell’s Soup Company has proposed deleting the “Soup” from the company name to become the Campbell’s Company.  This modification, supported by the Board will be subject to the approval of shareholders at the November annual meeting.

 Since 2018, Campbell’s Soup has purchased snack and food companies including Synder’s-Lance and Sovos brands, reducing the proportion of sales from soup that has been the mainstay of the company for over 150 years.

Mark Clouse, CEO, noted, “This subtle yet important change retains the company’s iconic name recognition, reputation and equity while better reflecting the full breadth of the company’s portfolio.”

General Mills will sell its yogurt business in the U.S. to the Lactalis Group based in France.  Brands marketed by General Mills include Stonyfield, Brown Cow and Green Mountain Creamery with an annual sales value of $1.2 billion.  Lactalis will acquire all the General Mills brands including Yoplait and manufacturing facilities in Tennessee and Michigan.

Canadian production facilities and brands will be acquired by Sodiaal a dairy cooperative in France.  The annual revenue from the Canadian business previously operated by General Mills amounted to $300 million.

Emmanuel Besnier chairman of the Lactalis Group stated, “With this acquisition we are expanding our position in the U.S. yogurt market.  These iconic brands are a strategic fit for the Lactalis that broaden the range of our consumers and allow us to become a key dairy player in the U.S.”

General Mills will receive $2.1 billion for the sales to Lactalis and Sodiaal combined for all products with an annual sales value of $1.5 billion. It remains to be seen whether the Company will embark on a search for acquisitions  or return the purchase consideration to shareholders

Amazon Fresh has introduced Amazon Saver as a “no frills” private label brand that will be available through the Amazon Prime loyalty program and marketed through Whole Foods and Amazon Fresh stores.

The Amazon Saver brand will include more than 100 products comprising crackers, canned fruit and snacks.  The private label brand will complement other Amazon brands including Amazon Kitchen, and 365 by Whole Foods Market.

Introduction of Amazon Saver will be promoted to Prime members through weekly rotation of discounts of up to 50 percent.

Governor Spencer J. Cox (R) of Utah will redirect $1.2 million of American Rescue Plan Emergency Assistance to schools for a grant program to erase meal debt incurred by low-income families.

In announcing his intention Governor Cox stated, “Our students are the future of Utah and investing in their health and education is vital to the success of our state.”   He added, “We are committed to ensuring Utah students receive the meals they need.”

Meal debt is a significant problem for school districts as confirmed by the School Nutrition Association that determined that 93 percent of their members who impose fees for meals regard debt as “a significant challenge to their programs.”

In a letter addressed to major banks and financial institutions, a diverse group of 105 environmental activists and animal rights organizations called on banks to reduce financial support of intensive livestock production.  In their letter, the activists call for a halt of support for new projects.

 The activists called on banks to determine compliance with the “Intergovernmental Panel on Climate Change 2022 with the respect to meat, dairy and feed industries.”  The letter stressed the importance of intensive livestock production to global greenhouse gas emissions including release of carbon dioxide and methane. 

The activists noted that half of the 2023 loans and underwriting amounting to $134 billion for meat, dairy and feed companies was extended by Bank of America, Citigroup and J.P. Morgan Chase with the major clients including Cargill, ADM, Bunge and Nestle.  JBS funding by Bank of America was highlighted as this producer was responsible for a substantial proportion  of methane emissions from meat production worldwide.

McDonald's Corporation has announced that the “temporary” $5 Meal Deal will continue through December.  This decision was prompted by competition from other QSR chains introducing similar promotions.

The effect of the McDonald’s initiative will be apparent in successive quarterly reports with specific focus on both traffic and ticket that frequently operate divergently.

The Board of Seven & i Holdings has rejected an initial offer by Couche-Tard of Canada on August 19^th to acquire the company that operates 86,000 Seven-11 kobini convenience stores.

The Government of Japan has classified Seven & i Holdings as a ‘core enterprise’ significant in national security.  According to law in Japan, a national security review is required for any foreign entity to acquire more than one percent of an enterprise owned in Japan.  The recent classification of Seven & i Holdings by the Ministry of Finance is based on the extensive operations of a company beyond convenience stores to include financial and securities services.

It is a matter of record that Seven & I has posted a 4 percent return on capital compared to 10 percent for Couche-Tard.

Although the Couche-Tard offer of $38 billion was rejected, the Board indicated that they would consider any subsequent modification and has solicited the advice of Nomura to advise on any transaction.  Apart from opposition to the acquisition of the assets in Japan, a take-over of Seven-11 convenience stores and fuel stations would elicit concern by the FTC given the predictable impact on competition.

Consumer Reports, a for-profit enterprise frequently functions as a ‘shadow’ FDA. The publisher recently reported on lead levels in cinnamon powder and spices purchased at retail.  Three samples of each of 36 products were screened.  Twelve brands revealed levels above 1ppm, and 18 brands ranged from 0.23ppm to 0.87ppm.  The World Health Organization and the Food and Agriculture Organization consider 2.5ppm as the maximum acceptable level with New York State mandating 1.0ppm as violative, requiring a recall.

Lead is ubiquitous and assay of most foods will disclose a low level such as the 0.04ppm found in one organic cinnamon brand.

The U.S. Environmental Protection Agency considers that there is no “safe” level of lead for humans given bioaccumulation over time. The element is highly toxic to children, resulting in blood and brain changes.

The 2023 episode of lead poisoning in children associated with cinnamon-flavored apple sauce has resulted in greater concern for potential toxicity with an increase in assays.  Recently, the FDA aroused from its torpor and listed ten cinnamon products with lead levels approaching 4ppm.  At this time, the FDA has no legal authority to impose a recall although distributors with contaminated products have withdrawn batches from the market mostly over concern of civil litigation or reputational damage.

October 11^th has been designated as World Egg Day as an opportunity to promote egg consumption.  The event organized by the International Egg Commission provides a platform for publicity promoting the health benefits and nutritional quality of eggs.

The American Egg Board along with other national organizations will intensify efforts to extend their messages to consumers emphasize nutritional qualities, versatility in menu preparation and convenience.

This said it would be interesting to quantify the actual impact on demand through stimulating consumption to generate quantitative benefits for producers.

Recent records obtained by the New York Times confirmed serious deviations from acceptable management and operation at the Jarratt, VA. Boar’s Head plant dating back to 2022.  Successive audits by the USDA-FSIS disclosed insect infestation, mold, structural defects, rusty equipment, accumulation of meat remnants on work surfaces and floors in the facility.  From August 2023 through July 2024, the plant accumulated 69 violations.  Despite the obvious deficiencies, no direct action was taken until an outbreak of listeriosis was traced back to the Jarratt plant.  This resulted in a series of recalls of product eventually amounting to seven million pounds by late July.  To date, there have been 57 confirmed cases of listeriosis with, regrettably, nine fatalities.

At the direction of FSIS in a July 31st communication management of Boar’s Head suspended operations at the Jarratt plant indefinitely. The future of the facility, if not the company, is in question. Given that inspection reports indicated that the facility was a risk to public health, it is questioned why the plant was not closed by FSIS before the current outbreak given the potential for foodborne infection.

Plaintiff Attorney, Robert Marler, published a series of obvious questions as to why the USDA-FSIS was reluctant to act.  He also questioned why the company failed to comply with standards including Listeria assays on products and the environment of the plant given the risks associated with RTC cold cuts. Senator Richard Blumenthal (D-CT) has called for the USDA Inspector General to review the action (or inaction) by the FSIS and their apparent dereliction of duty.

The Boar’s Head situation is eerily reminiscent of the Blue-Bell ice cream case involving Listeria contamination but in this case leading to a limited outbreak. Investigations confirmed suppression of data relating to contamination of plants and products. Failure to address the problem and to eliminate known Listeria contamination in two plants led to recall of all product and close plants. Ultimately transfer of ownership to an investment company occurred and a series of criminal indictments were issued for complicit quality control personnel and the CEO.

Given the magnitude of the Boar’s Head outbreak and its consequences, litigation is inevitable with jurors expected to award both direct and punitive damages if claims go to trial. The question remains as to the responsibility of FSIS and the accountability of decision makers in the Agency.  Both the USDA and the FSIS have repeatedly failed in their responsibility to protect consumers. This reality together with problems associated with the FDA support the need for a separate food safety agency as proposed in the 2024 Federal Food Administration Act sponsored by Senators Richard Blumenthal (D-CT) and Richard Durbin (D-IL) and Congresswoman Rosa DeLauro (D-CT).

Publix maintained the top rank in the Newsweek grocery category for customer service for the sixth consecutive year.  The survey on which the ranking is based involves 30,000 U.S. customers.

Publix was also recognized as the leading company in customer satisfaction by J.D. Power in the pharmacy category.  This survey involved 13,500 customers filling prescriptions in 2023-2024.

In commenting on the awards, Maria Brous, Communications Director for Publix, stated, “It’s all about listening.  We listen to feedback on a regular basis from both customers and associates.”

Publix operates 1,377 stores in eight states with 870 in Florida.  The company is the largest employee-owned enterprise in the U.S. with 255,000 managers, associates and other workers.

Sales in 2023 attained $57 billion.  Publix is actively expanding its geographic reach and opened 45 new stores in 2023.

The Council for Agriculture Science and Technology (CAST) will sponsor a webinar entitled H5Nx Policy Gaps in the Path Forward; A Deep Dive into the Current Situation of H5 Influenza.  Speakers will include members of the American Association of Avian Pathologists with experience in the epidemiology and virology of avian influenza.  Topics will include an overview of the AAAP statement on H5N1, key findings and challenges including the need for a national strategy, challenges presented by vaccination (hopefully the advantages too) and the necessity of long-term resource allocation.  The program will include an interactive Q & A session.

Panelist will comprise Dr. Carol Cardona, Dr. Michelle Kromm and Dr. Kay Rousso all of the AAAP H5 Task Force.

The webinar will take place on September 26^th Additional information can be obtained from CAST   (515) 292-2125 or cast@science.org

The Wage Committee of the International Longshoremen’s Association has indicated that unless demands relating to wages and benefits are met, the Union will call a strike commencing October 1^st.  This action involving ports along the East and Gulf coasts and Puerto Rico would impact nearly half of all U.S. imports and would be damaging to the economy. The White House has indicated that it will not intervenr directly at this time.

Apart from the effect on the economy, the timing of the proposed strike has political implications.  In the unlikely event that the Administration forces the union to work under the Taft-Hartley Act, workers would initiate a slow down with adherence to work-to-rule.  A Union negotiator Harold Daggett threatens strike and slow-down action unless the United States Martime Alliance, representing port ownership negotiates in good faith and agrees to a new contract.  A spokesperson for the Administration noted that collective bargaining is necessary to resolve the impasse and that there was no intention to invoke the Taft-Hartley Act to break a strike as has occurred on 40 occasions since the law was enacted. 

The ports involved handle 74,000 shipping containers each day with an estimated cargo value of $3.7 billion.  It is estimated that a strike of even a single day would require five days to clear containers. A one-week strike in October would disrupt imports prior to the Christmas period with congestion persisting through mid-November.

The National Retail Federation urges the Administration to work with the Union and the Martime Alliance to reach agreement on a new contract.  The National Association of Manufacturers noted, “Any disruption resulting from the United States Maritime Alliance and the International Longshoremen’s Association will deal an immediate blow to the manufacturing supply chain.  Cost will rise and manufacturing jobs will be lost if parts and supplies do not arrive on time.”  A thirty-day strike along the East and Gulf coast ports would cost in excess of $1.3 billion per day affecting both exports and imports.  A strike would have an inflationary effect on imported goods and the effect on reduced supply would increase cost to consumers of domestically produced items.

In the ongoing lawsuit filed by the FTC and supported by the Attorneys General of nine states, Kroger is defending the proposed merger/acquisition of Albertsons Corp.  In his opening statement, Matthew Wolf representing Kroger stated, “If you sell more stuff your hourly wages go up, your costs go up, your costs of your employment go up.”  He added, “Other expenses such as warehouse fees, cleaning products and transportation costs are all real costs that really decrease your profits.”

While attaining competence in the prestige law firm of Arnold and Porter, Attorney Wolf appears to be either unaware of or was distorting the effect of volume on fixed and variable costs.  In a given supermarket, interest, depreciation, overhead, management, utilities and most of the labor costs are categorized as ‘fixed’ and are not influenced by volume within limits.  “Selling more stuff” implies increased volume and hence more revenue.  Incremental sales value offsets fixed costs and within the limits of imposing additional variable costs, additional ‘traffic’ will contribute to profitability and hence the bottom line.

The costs associated with operating a dairy cooler selling eggs are predominantly categorized as fixed costs involving capital invested, depreciation on the equipment, the salary of the dairy manager and a given number of required labor units.  It is possible by reducing the price of eggs to increase sales volume and hence revenue, depending on the unit price obtained.  The incremental margin will offset the fixed costs of operation of the dairy department and contribute to store profitability.  Obviously if the coolers require restocking beyond the capacity of the existing labor force, additional expenditure as either overtime or an additional employee will add incrementally to variable costs.

If Attorney Wolf believes that increasing volume and sales decreases profit, an economics 101 textbook may disabuse him of his misunderstanding.  It is of course accepted that the quotation from the opening statement was legal rhetoric.  Irrespective of veracity, his statement was entered into the court record but was essentially irrelevant to the ultimate disposition of case. Whether a provisional injunction is granted to the FTC to block the transaction will be decided on political considerations based on the potential to reduce competition at the expense of suppliers and consumers. 

On September 12^th The Kroger Company (KR) posted results for Q2 of FY 2024 ending August  17^th 2024. Kroger returned to profit, beat on earnings and raised FY 2024 guidance.

Kroger is the second largest retailer of groceries in the U.S. and is a pure supermarket play subject to the pressures of escalation in food costs, logistics and labor and the impact of inflation in common with all national and regional competitors. Kroger announced the intention to acquire/merge with competitor Albertsons Corporation 23 months ago in a transaction valued at $25 Billion. This would in theory create a merged enterprise with 5,000 stores but has incurred FTC opposition despite the offer to divest assets. To comply with anticipated regulatory pressure Kroger and Albertsons have proposed selling 413 stores in 18 states to C&S Wholesale Grocers for $1,900 million. This strategy is in question given the history of Haggen that acquired divested stores in early 2015 to facilitate the acquisition of Safeway by Albertsons but filed for bankruptcy nine months later. Workers’ unions and Attorneys General of nine states are opposing the transaction with the inevitability of prolonged litigation. At present a Federal Court in Oregon is considering a preliminary injunction filed by the FTC to block the transaction.

For the 2^nd quarter of FY 2024, Kroger reported earnings of $466 million on revenue of $33,912 million with a diluted EPS of $0.64. For the corresponding Q2 of FY 2023, Kroger posted a loss of $(180 million) on sales of $33,853 million with a negative diluted EPS of $(0.25).  Comparing Q2 of 2024 with the corresponding quarter of 2023, revenue was 0.2 percent higher. Gross margin increased fractionally from 21.8 percent to 22.6 percent for Q2 2024. Operating margin increased from -1.4 percent to 2.4 percent for the most recent quarter. For Q2 2024 S & G was lower by $1,049 million compared to Q2 2023 (Albertson’s acquisition expenses?). The P&L for Q2 2024 noted a $121 million loss on investments compared to a gain of $367 million in Q2 2023.

In commenting on Q2 results, Rodney McMullen CEO stated "Kroger achieved solid results in the second quarter demonstrating the strength and resiliency of our model. We are growing households and increasing customer visits by offering a compelling combination of affordable prices and personalized promotions on great quality products, all through a unique seamless experience.  He added “Our long-term model is to consistently invest to lower prices so more customers shop with us, which in turn fuels our alternative profit businesses and drives greater efficiencies This flywheel enables Kroger to deliver exceptional value for customers and investing in our associates, and by doing so, we are well-positioned to generate attractive and sustainable returns for shareholders."  

In relation to the proposed merger with Albertson’s, McMullin commented "As we near the close of the FTC's preliminary injunction hearing, we are confident in the facts and the strength of our position. The food industry has always been competitive and will continue to be after this merger. We are committed to closing this merger because bringing Kroger and Albertsons together will provide meaningful and measurable benefits – lower prices, secure jobs and expanded access to fresh, affordable food – for customers, associates, and communities across the country."

The Company guidance for FY 2024 comprised:- 

• Identical Store Sales growth of 0.8 to 1.8 percent excluding fuel, (was 0.6 to 1.0 percent)
• Adjusted EPS of $4.60 to $4.80 (was $4.50 to $4.60) 
• Adjusted FIFO Operating Profit of $4.6 billion to $4.8 billion, (was $4.9 to $5.0 billion)
• Capital expenditure of $3,600 to $3,800 million

Comparable same-store sales for Q2 attained 1.2 percent (excluding fuel) compared to Q2 FY 2023; digital sales were up by 11.0 percent;

On August 17^th Kroger posted total assets of $51,443 million of which $3,539 million comprised goodwill and intangibles. Long-term debt and lease obligations amounted to $20,891 million.  

The Kroger Company had an intraday market capitalization of $39,910 million on September 13^th 2024.  The Company has traded over the past fifty-two weeks in a range of $42.10 to $58.34 with a 50-day moving average of $53.25. KR trades with a forward P/E of 11.7. On September 11^th 2024 KR closed at $51.50 pre-release but closed at $55.20 on September 12^th post-release.

Twelve-month trailing operating margin was 2.0 percent and profit margin 1.4 percent.  The Company generated a return on assets of 6.0 percent and 18.6 percent on equity.

At the end of FY 2023 The Kroger Company operated 2,726 stores with 2,252 pharmacies and 1,613 fuel centers, under 25 banners in 35 states and D.C. Kroger operates 34 food plants and 45 distribution centers with five Ocado fully automated fulfillment centers with as many as twenty planned

In an August 29^th release, Campbell Soup Company (CPB) released financial results for Q4 and Fiscal 2024 ending July 28^th 2024. Campbell Soup Co. can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Conagra Brands, Treehouse Foods and Kraft-Heinz, all currently under pressure to reduce prices to the major retail and supermarket chains. In a market with reduced costs frugal consumers still favor less expensive private brands. The trend to eat-at-home may benefit Campbell Soup and competitors.

For Q4 FY 2024, net loss was $(3 million) on net revenue of $2,293 million with a diluted EPS of $(0.01).  Comparable figures for Q4 FY 2023 ending July 30^th 2023 were net income of $169 million on net revenue of $2,068 million with a diluted EPS of $0.57

For Q4 FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses), Campbell Soup achieved a gross margin of 29.4 percent (31.7 percent) and an operating margin of 4.3 percent (13.2 percent).  The disparity was due to $181 million in “other expenses” incurred during the most recent quarter. Revenue was up 10.9 percent.

The release included results for the two operating segments:-

• Meals and Beverages: Operating profit of $211 million up 59.8 percent from Q4 2023, on revenue of $1,200 million, up 28.2 percent from Q4 2023
• Snacks: Operating profit of $159 million, up one percent, on revenue of $1,093 million, but down three percent from Q4 2023

For FY 2024 net income was $567 million on revenue of $9,636 million with a diluted EPS of $1.89. This compares to FY 2023 with an income of $848 million on revenue of $9,357 and a diluted EPS of $2.85.

In commenting on Q2 results Mark Clouse CEO stated, “We finished fiscal 2024 with solid fourth-quarter performance including sequential volume improvement and margin expansion versus prior year and delivered significant progress against our longer-term strategic plan despite an evolving consumer landscape,” He added “The strength of the Meals & Beverages recovery, including Soup, was a standout in the quarter as was the competitive advantage of our supply chain. The integration of Sovos Brands is progressing ahead of our expectations, marking a transformative shift in our Meals & Beverages growth trajectory. We’ve also advanced our Snacks margin journey, while delivering significant innovation and improved sales and marketing capabilities.

He concluded “All of this provides continued confidence in our ability to deliver sequential progress in fiscal 2025 as we continue to navigate the steady and ongoing recovery in the industry”.

To reflect the current and future product range the Company will delete the “Soup” in its name to become the Campbell’s Company.

Guidance for FY 2024 was adjusted upwards. Values included net sales growth ranging from 9.0 to 11.0 percent; an adjusted increase in EBIT of 9.0 to 11.0 percent and an adjusted EPS of between $3.12 and $3.22.  

On July 28^th Campbell Soup listed assets of $15,235 million, including a disproportionate  $9,793 million as goodwill and intangibles. Long-term debt and other obligations amounted to $5,761 million, up 28.1 percent from July 30^th 2023.

The Company had an intraday market capitalization of $14,860 million on September 13^th. CPB trades with a forward P/E of 15.5 and has ranged over a 52-week period from $37.94 to $52.91 with a 50-day moving average of $48.51. Insiders hold 35.5 percent of equity with 8.7 percent of the float short on August 30^th.

Twelve-month trailing operating and profit margins were 12.4 percent and 5.9 percent respectively. The Company generated a twelve-month trailing return of 6.4 percent on assets and 15.2 percent on equity.

Following the Brexit debacle, U.K. egg producers and especially those operating free-range systems were faced with escalation in the costs of feed, labor and energy. A number of supermarket chains including Aldi adjusted prices and provided cash supplements to farmers.  In contrast, Sainsbury’s were reluctant to increase payments and as their supplying farmers ceased production, their supply chain was constrained. A February survey conducted by the National Farmers Union showed that nearly a quarter of egg producers were unsure of whether they would continue producing eggs in 2025.

In response to representations by the British Free Range Egg Producers Association and possibly informal government intervention, Sainsbury’s has reversed course and has established the Egg Group.  This arrangement involves three major egg packers and over 100 independent supply farms. The previous Conservative government established a Parliamentary Committee to evaluate the stability of the U.K. food chain including farm income that representing the potential for publicizing unfair sourcing policies by Sainsbury’s.

Sainsbury’s has now agreed to pay farmers more than the cost of production for eggs supplied.  Peripheral considerations include exchange of information on production practices and welfare.  The supermarket is, however, imposing requirements on carbon emission and farmers will have to submit to audits.  It is presumed that additional costs involved in compliance with Sainsbury’s standards will be renumerated.

Sodexo, a multinational food service company, has introduced breakfast burritos to U.S. college campuses for the 2024 fall term.  The product comprises a soft flour tortilla stuffed with eggs, cheese, bacon, crispy potatoes, avocados and seasoning.  Sodexo introduced breakfast burritos based on innovations developed by the Dog Haus brand founded in California in 2010.  The alliance between Dog Haus and Sodexo is an attempt to recreate traditional foods enjoyed during childhood and refined for college years.

Breakfast burritos will be introduced to the University of Cincinnati and Arkansas State University this semester.  It is intended to expand the range of universities serving the burrito and to modify the content with alternative meats and seasonings. Bacon will not be acceptable at many universities with students’ religious dietary observances.

On September 9^th, Cal-Maine Foods announced the acquisition of 51 percent of the equity of Crepini Foods, LLC.  The company, located in Hopewell Junction, NY., manufactures a range of egg wraps, protein pancakes, crepes and gluten-free Pancheesi® pancakes.

In commenting on the joint venture, Sherman Miller, President and CEO of Cal-Maine Foods, noted, “We are pleased to announce our strategic investment in Crepini Foods that aligns with our growth strategy to enhance our product portfolio and focus on value-added products and other egg-product opportunities.”  He added, “This new venture will complement our other egg product offerings from our growing Meadow Creek operation offering hard-cooked eggs for institution, food service and retail needs.”

Paula Riner Shkolnik, CEO of Crepini Foods, LLC, stated, “This partnership will allow us to make our products available to more national and international customers and continue to provide innovations in the egg specialty products category.”

On August 30^th, authorities in Poland reported an outbreak of H5N1 avian influenza to the World Organization for Animal Health.  The case involved a flock of 20,000 birds (type unspecified) in the town of Swiebotzin in Lubusz Province (Voivodeship) in western Poland bordering Germany and close to tthe Czech Republic.

Predictably China announced September 6^th that it was placing an embargo on all poultry products shipped from Poland on or after the outbreak.  Contrary to WOAH protocol, China with endemic avian influenza against which vaccination is routinely performed, has imposed an embargo on the entire nation ignoring the principle of zoning.

A patient in a Missouri hospital undergoing treatment for influenza yielded an H5 virus as confirmed by the Centers for Disease Control and Prevention.  There was no apparent known contact with food animals or poultry prior to onset of symptoms.  There was no evidence of human-to-human transmission to contacts. The patient made an uneventful recovery.

This sporadic case was identified following routine hospital assay that identified influenza A but was negative for seasonal influenza virus subtypes. This apparent inconsistency resulted in  submission of the virus to the CDC.

The case raises a number of questions focussing on the source of the infection (pet cats or birds? consumption of raw milk? occupational exposure? or factors as yet identified?) It would be important to determine whether the virus isolated from the patient was homologous with the mammalian adapted H5N1 B3.13 in dairy cows and rodents. H5 influenza resulting in hospitalization requires expedient and thorough epidemiologic investigation by a CDC team. Transparency with prompt reporting of relevent information.  Epidemics start with a few cases and are easier to contain at an early stage in an outbreak.

As the deadline to enact appropriations bills approaches, the House has was presented with H.W. 9494 by the Speaker to extend funding for government agencies for an additional six months.  The bill was regarded by the White House as being deficient in funding both military expenditures and providing for adequate disaster relief for the Federal Emergency Management Agency. Members of the Freedom Caucus indicated that they would not support the Bill given provisions for expenditures that they consider excessive or conflict with their principles of fiscal restraint.

A provision in the bill  required proof of citizenship to be eligible to vote with the prospect of disqualification of some bone fide citizens.  The White House maintains that there is little or no evidence of voting by non-citizens, a crime punishable by federal law.

Given bipartisan dissatisfaction the Bill was tabled, leaving future funding in limbo.

Congress should place the good of the nation before partisan issues and cease brinkmanship.  Funding of federal agencies through figuratively ‘kicking the can down the road’ in a series of continuing resolutions is certainly no way to create an environment for future planning and effective government.

Malathion, an organophosphate insecticide and a potential neurotoxin, is widely used for pest control including suppression of insects that affect poultry. It is estimated that 2.7 million pounds of malathion is applied annually in the U.S. A coalition of environmental activists including the Center for Biological Diversity, Center for Food Safety and Pesticide Action Network North America recently filed a lawsuit against the U.S. Fish and Wildlife Service claiming the agency is in violation of the Endangered Species Act.  In 2017, scientists within the U.S. Fish and Wildlife Service produced a report confirming that unrestricted use of malathion would be detrimental to at least 500 threatened and endangered species that are dependent on insect pollination.  During the previous Administration, the findings and recommendations made by scientists were reversed by the then Secretary of the Interior. This essentially moved the goal posts by altering the criteria to assess any potential detrimental effects of pesticides.

The Fish and Wildlife Service under the present Administration prepared a revised 2022 opinion on malathion concluding that continued use of the insecticide would not affect any protected species of wildlife or plant.  The opinion did, however, suggest restrictions on spraying malathion.  Mosquito vectors have emerged as a cause of an increased incidence of arboviral infections including West Nile disease, equine encephalitis and dengue fever.

The poultry industry needs malathion, and application within houses should not represent a problem to the environment. It is hoped that as with the case of rodenticides that there will be no outright bans allowing regulated use by trained applicators.

EGG-NEWS has consistently campaigned for either subsidized or preferably free universal school meals.  A number of states have introduced either breakfasts or lunches or both irrespective of family finances.  Any program to facilitate school feeding is beneficial to the agricultural sector and to children and their families.

A recent investigation in Montana disclosed that an exorbitant fee was charged by the MySchoolBucks website to process bi-weekly payments by parents.  The cost of a luncheon in the state was $3.25 including milk but the fee imposed was $3.25 for 10 meals.  MySchoolBucks is a subsidiary of Global Payments Inc., a company that has drawn criticism from consumer organizations and the federal government. MySchoolBucks grosses more than $100 million a year for processing school lunch payments according to the Federal Consumer Financial Protection Bureau.  In some cases, families may pay 60 cents in fees for every $1 they spend on lunch payments.

It is anticipated that a class action lawsuit will soon be filed that will present evidence of extortionary fees although with many iniquities the status quo is supported by an extensive lobbying campaign.  Shame on legislators who accepting money from Global Payments and other enterprises that impose extra expense on financially stressed families.

The 2025 Latin American Poultry Summit will take place during the 2025 IPPE at the Georgia World Congress Center.

The theme for the 2025 event will be “Factors Affecting Efficient Poultry Marketing”.  The summit will be presented jointly by the organizers of the IPPE in cooperation with the Latin American Poultry Association. Topics will include enhancing production efficiency, marketing and feed management with presentations by acknowledged experts.

Registration for the IPPE and the Latin America Poultry Summit will open on October 7^th with a US$300 registration cost.

A serologic survey of goats and sheep in Pakistan revealed widespread exposure to influenza A including H5, H7 and H9 serotypes.

Regional differences were evident among the approximately 800 samples examined. A high proportion demonstrated antibodies in Punjab consistent with a concentration of commercial poultry.

During March a goat herd in Minnesota was diagnosed with H5N1 influenza by demonstrating virus applying PCR. Mortality in the herd followed an outbreak among chickens on the small farm.

Yellow Banana has announced the opening of the first of six Save A Lot stores after extended delays. The Company was under pressure from both residents and the City of Chicago that advanced $14 million in subsidies and provided tax concessions amounting to a total of $26 million. Yellow Banana was obliged to open six stores within a two-year period. Renovations of premises included new air conditioning systems, cold rooms, lighting, flooring and fixtures.

Joe Canfield, CEO of Yellow Banana, stated, “We are proud to take steps to re-introduce the Save A Lot brand to Chicago by reopening our stores.  I am confident that the investment made to our remodel and upgrade will pay off for shoppers.”

Attempts to provide residents of so-called food deserts with grocery stores have been largely unsuccessful due to theft and crime.  The City of Chicago has an investment in the success of the Save A Lot stores and accordingly, should provide security.  Communities served by the stores have an obligation to contribute to their viability through exercising pressure on individuals within their neighborhoods who engage in antisocial activities.

The 2024 edition of the Georgia Layer Conference will be presented in virtual form on September 23^rd.

Topics to be considered will include egg quality and safety management, best practices and innovations for optimizing production. The program will include a poultry disease update and a review of the U.S. egg market.  Registration is $20 but with no charge for students. For additional information, contact Dr. Casey Ritz critz@uga.edu.

EGG-NEWS is indebted to Dr. Nati Elkin, publisher of Poultry Med, for a report on the success of the vaccination campaign against HPAI in the foie gras industry in France.  Last year, 35 million ducks received two doses of an inactivated vaccine against H5 avian influenza.  In addition, 1.5 million ducks received three doses before July 2024 in high-risk areas.  Inactivated vaccine was administered at 10 and 28 days with a third dose at 56 days. During May 2024 an mRNA vaccine was included in the vaccination protocol.

The effectiveness of the vaccine campaign was determined by comparing the expected value of losses based on records of outbreaks in recent years against the the incidence rate among the vaccinated flocks.  The study determined a relative reduction of 95.9 percent attributed to the vaccination program.

The result confirms the World Organization of Animal Health endorsement of vaccination as an adjunct to biosecurity in preventing avian influenza in high-risk regions.

With respect to foie gras production, ducks are allowed outside access before the intensive period of force-feeding effectively negating biosecurity.  The obvious benefit of vaccination should be recognized since there was no effective biosecurity. 

It would be instructive for USDA-APHIS to introduce protective immunization using currently available commercial vaccines in high-risk areas for egg producing and turkey grow-out flocks.  We do not have to evaluate the commercial vaccines that are produced by reputable manufacturers and are approved by international and national agencies.  We do not have to develop a new vaccine since products are available off-the-shelf.  We will have to develop epidemiologically valid protocols to evaluate the benefit of vaccines in anticipation of the fall migration of waterfowl with the attendant probability of a resurgence in HPAI.

According to a CDC Food Safety Alert issued on September 6^th, Milo’s poultry farm, located in Bonduel, WI, has recalled all eggs packed under the Milo’s and Tony’s Fresh Market brand.

FDA has confirmed that the outbreak strain of Salmonella Enteritidis (SE), affecting 65 patients with 24 hospitalizations among nine states was homologous with isolates from flocks and the packing plant. Traceback implicated Milo’s Poultry Farm operated by Milo and Edna Bontrager packing under the Certified Organic Seal.

The SE isolate is resistant to ciprofloxacin, an antibiotic of choice for treating intestinal infection including salmonellosis in humans.

Eggs produced by Milo’s Poultry Farms were sold to stores and restaurants in Illinois, Michigan and Wisconsin despite the wide range of states reporting cases including California and Virginia.   Of the patients, age ranges from 2 to 88 years. Illnesses were recorded during late May extending through August. 

Decontamination of the farm will prove challenging given outside access that has presumably been contaminated with SE.

It will be of interest to learn the results of previous drag swab monitoring of the flocks for SE according to FDA requirements, given that the first recorded cases occurred in May.

Contrary to consumer perceptions, the Certified Organic Seal relates to compliance with the National Organic Program and is independent of food safety.

As with most foodborne Salmonella infections, the actual number of cases far exceeds the confirmed number as many patients with mild symptoms do not seek medical attention.  Even with treatment by a physician or at a medical facility, appropriate microbiological examination is not performed unless the patient is hospitalized. In the context of this outbreak, therapy using ciprofloxacin would have been less than effective given the resistance profile of the SE pathogen and the impact of the intestinal microbiome that would have been disrupted by this antibiotic.

USDA-APHIS will award $380,000 for cooperative projects benefiting tribal regions.  Funding will be provided by the National Animal Disease Preparedness and Response Program and will be in addition to the previously awarded $830,000.

Selected projects include education and training on biosecurity procedures to enhance poultry and swine health and the delivery of community-based disease detection in the event of outbreaks of emerging or foreign animal diseases.

The Ministry of Agriculture and Food Security confirmed the first outbreak of avian influenza in Israel after a pause of nine months.  The outbreak involved a turkey grow-out complex comprising nine houses of approximately 9,000 birds each with index house aged 14 weeks.  The outbreak occurred on Moshav (ccoperative) Nahalal in northern Israel and is a roccurrence from 2023.

The strain was not specified but based on seasonal outbreaks, H5N1 is presumed to be responsible.  The flock was depleted, and the Ministry of Agriculture has established a quarantine six-miles in radius around the Moshav with intensive surveillance.

USAPEEC, Mexico organized a series of six training modules in cooperation with the National Autonomous University of Mexico.  Each of the six modules was organized by the School of Veterinary Medicine with a cooking session conducted at the Technological University of Mexico.

Educational programs directed to importing nations benefits U.S. producers through engendering confidence in U.S. egg products.

Mexico is a significant importer of eggs receiving 15 million dozen during 2023 valued at $17.4   million up 290 percent in volume and value compared to 2022. Mexico imported 4,704 metric tons of egg products in 2023 valued at $22.8 representing a 65 percent increase in value and volume over the previous year.

A ProMED Mail release confirmed that the ongoing outbreak of salmonellosis attributed to backyard chickens has now increased to 409 cases with 102 hospitalizations as of August 19^th.

The Centers for Disease Control and Prevention has collected data on cases extending from February 18^th to August 5^th, 2024.  The actual number of those infected is considerably higher than the confirmed diagnoses since only those severely affected seek medical attention and not all patients receive a laboratory workup with microbiological examination.

Among the cases, eight serotypes of Salmonella were identified including S. Enteritidis, S. Mbandaka and S. Typhimurium. Among the 344 isolates from patients and also 42 environmental samples, 10.2 percent were resistant to ciprofloxacin. Isolates were resistant to a range of antibiotics of human health significance at rates from 0.7 to 2.0 percent.

Multiple hatcheries were involved in shipping infected chicks based on examination of chick box liners. The range of age among patients extended from 1 to 93 years but 27 percent were under the age of 5.

In 1975, the FDA banned interstate movement of immature turtles known to be a source of Salmonella infection.  Salmonellosis especially among children fell sharply the following year. Backyard chickens are now so pervasive that a ban would be impractical. Given that recommendations to improve hygiene and precautions to prevent infection are inadequate alternative protective measures are required.  Either federal intervention at the hatchery level will be required to reduce the incidence rate or civil litigation will force hatcheries to either “clean up their act” or cease operation.

Lohmann Breeders GmbH has announced restructuring of top management to be divided between two managing directors each with specific responsibilities.

Jorg Heier an eleven-year veteran of Lohmann Breeders will be Operations Managing Director responsible for administration, production and the supply chain.  He was previously Director of Global Production for Lohmann Breeders.

Jurek Grapentin will be appointed to the position of Commercial Managing Director responsible for sales, technical service, marketing, public relations and communication.  He previously served as Sales Manager for Europe and Scandinavia and also regional director for Southeast Asia and Pacific.

In the company announcement, the realignment with the appointment of two executives with specified responsibilities is intended to strengthen the company’s competitive advantages in genetic performance and customer service.

The National Institute of Animal Agriculture (NIAA) has announced the appointment of two co-chairs for the Antibiotics Council.  Dr. Heather Fowler, Director of Producer and Public Health for the National Pork Board and Dr. Alexandra Medley, Associate Director for Antimicrobial Resistance within the Division of Foodborne, Waterborne And Environmental Diseases at the Centers for Disease Control and Prevention are the appointees.

Dr. Fowler earned her Veterinary degree from the University of Pennsylvania in 2010 followed by a Master’s in Public Health and Applied Biostatistics and Epidemiology from the Yale School of Public Health the following year and a PhD in Environmental and Occupational Hygiene from the University of Washington School of Public Health in 2017.

Dr. Alexandra Medley earned both Doctor of Veterinary Medicine and Master’s in Public Health degrees from the Ohio State University.

The National Institute of Animal Agriculture was established in 1916 to disseminate scientific information and to consider and resolve issues relating to agriculture through specialized topic-oriented groups.

The Antibiotics Council will host an annual antibiotics symposium in Denver, Colorado from December 19^th through 21^st, 2024.

The USDA issued a series of guidelines on August 28^th relating to label claims for livestock and poultry. According to Secretary of Agriculture Tom Vilsack, “The revision to existing guidelines is intended to establish fairness and choice for farmers and consumers and support transparency and high-quality standards” He added, “These updates will help to level the playing field for businesses who are fully using these claims and ensure people can trust the labels when they purchase meat and poultry products.” 

In 2023, the FSIS determined that twenty percent of beef samples from 84 processing plants in 34 states yielded antibiotic residues in liver and kidney tissue despite negative antibiotic claims.  The USDA received public comments, petitions and feedback from wide range of stakeholders in developing the updated guidelines that are now subject to a 90-comment period and will take effect 60 days after publication in the Federal Register.

Principles developed in the new guidelines include the need for third-party validation of claims especially those relating to the environment. It is emphasized that claims including “free-range” and “raised without antibiotics” are voluntary but USDA is now requiring substantiation and documentation before approval as a label claim.

After adoption of the guidelines, USDA may consider a program of random sampling and additional rulemaking to ensure veracity and transparency.

On September 5^th Costco Wholesale Corporation (COST) reported sales for August 2024 covering the four weeks ending September 1^st.  For the period, sales attained $19,830 million, up 7.1 percent from the value of $18,500 million during the corresponding month in 2023.

Same store sales (excluding fuel and foreign exchange) increased 6.7 percent for the U.S.; 5.8 percent for Canada and 10.8 percent for international warehouses.  Overall, same-stores sales advanced by 7.1 percent and E-commerce was 23.1 percent higher.

Costco closed on Sept 5^th after release of the data at $885.98. COST market capitalization was $394,580 million on August 5^th and the share has traded over a 52-week range of $540.23 to $918.98 with a 50-day moving average of $855.36.

Costco Wholesale Corporation operates 890 warehouses with 614 in the U.S.; 108 in Canada; 40 in Mexico and the remainder in nine other nations.

In an August 30^th release, the Food Industry Association issued the U.S. Grocer Shopper Trends: Return to Routine. This report confirmed that 39 percent of shopper are concerned over food prices although down from 42 percent a month ago. Approximately two-thirds of respondents are concerned that prices are still rising for the foods that represent their preferences. The July Personal Consumption Expenditure Report confirmed a 1.4 percent increase in the price of a basket of foods compared to July 2022, below the long-term inflation rate of two percent.

Andy Harig Vice President of Tax, Trade, Sustainability and Policy Development for the FMI noted, “Although there have been significant changes in the marketplace over the past few years, actual affordability, when you look at the number its still there.”  He added, “Particularly over the past two years where we’ve seen the period of higher inflation, you continue to see the consumer really spending robustly and really finding a way to not just get what they need but in many cases get what they want at the grocery store.”

Despite political rhetoric claiming unrestrained food inflation, Dr. Ricky Volpe, Associate Professor of Agribusiness at California Polytechnic State University stated, “Year-over-year food price inflation is projected to reach below the historical average of two percent through the end of 2024 largely because of moderated energy and commodity prices.”  He added, “It is forecast to decrease even more going into 2025, but it does not mean that we should expect food price on average to decline.”

Depending on political persuasion, consumers are provided with biased pre-election perspectives One side incorrectly claims that excessively high prices, actually reflecting 2023, are due to past policy decisions by the current Administration. The other side maintains, without corroboration, that high prices are due to gouging by supermarkets.  As with most political exhortations, there is considerable exaggeration, disinformation and temporal distortion. The truth lays somewhere between the extremes.

According to the USDA Center for Veterinary Biologics, Draft Notice 24-13, protocols are solicited for field evaluation of H5N1 vaccine.  In a change of policy regarding administration of H5 vaccines the Center for Veterinary Biologics has imposed the following requirements:-

• USDA intends to regulate distribution and use of H5 vaccines in the U.S.

• Vaccines should be inactivated and hence non-viable and non-replicating.

• Appropriate records relating to manufacture and distribution of vaccines will be required.

• Conditional licensure can be granted for vaccines for lactating dairy cattle based on a “reasonable expectation of efficacy and safety”.

• Studies intended to demonstrate the efficacy of a vaccine should follow Title 9 Code of Federal Regulations Part 103.3 that requires state approval.

• Proposals relating to field evaluations should include procedures for sampling milk and serology for vaccinated animals with relevant controls.

• Appropriate records relating to the disposition of vaccinated cattle are mandated.

• Approval by an accredited veterinarian will be required to move cattle to slaughter for a period of two years following vaccination.

The USDA Draft Notice does not consider other than inactivated vaccines.  It is anticipated that live attenuated and alternative products including vectored subunit and mRNA vaccines will eventually be evaluated as they become available but most likely restricted to biocontainment facilities.

In a September 4^th release, Dollar Tree, Inc. (DLTR) announced Q2 FY 2024 results for the period ending August 3^rd 2024.  The Company fell far short of expectations for revenue and earnings with an 11 percent decline in share price at the post-release open and falling 25 percent in subsequent trading. The holding company operates Dollar Tree and Family Dollar banners.

Dollar Tree Inc. posted net income of $132 million on total revenue of $7,379 million with a diluted EPS of $0.62. Expectations were for revenue of $7,480 million  and an EPS of $1.04. Comparable values for Q2 FY 2023 ending July 29^th were net income of $200 million on revenue of $7,325 million with a diluted EPS of $0.91.

Comparing the respective quarters, revenue was up 0.7 percent in Q2 2024. During the most recent quarter, Dollar Tree attained a gross margin of 30.1 percent (29.2 percent in Q2 FY 2023) and an operating margin of 2.8 percent, compared to 3.9 percent in Q2 2023.

For Q2, consolidated comparable store sales, increased by 0.7 percent, with Dollar Tree achieving 1.3 percent and Family Dollar, -0.1 percent.

In commenting on results, Rick Dreiling, Chairman and CEO stated, “We are encouraged by the continuous progress we are making in the transformation underway at Dollar Tree and Family Dollar, despite immense pressures from a challenging macro-environment,” He added “Customers are responding favorably to initiatives like our expanded multi-price offering and we are already seeing a meaningful sales lift at the 1,600 Dollar Tree stores that have been converted to our newest in-line multi-price format. With thousands of stores left to convert, we believe we are still in the very early innings of this rollout, with many years of runway left ahead of us.”

Chief Financial Officer Jeff Davis added, “Our adjusted EPS of $0.67 was $0.38 below the midpoint of our previous outlook range. While the vast majority of this variance was attributable to an adjustment of our general liability accrual, a portion was attributable to a comp shortfall which reflected the increasing effect of macro-pressures on the purchasing behavior of Dollar Tree’s middle- and higher-income customers.”

Guidance for FY 2024 was downgraded from the Q1 report and included consolidated sales of $30,600 million to $30,900 million; a low-single-digit percent increase in comparable store sales and an EPS ranging from $5.20 to $5.60, down 20 percent.

Effective August 3^rd 2024, Dollar Tree posted total assets of $22,617 million including $3,063 as goodwill and intangibles and carried long-term debt and lease obligations of $8,302 million.  DLTR had a market capitalization of $17,555  million on September 4^th compared to $24,460 on October 31^st. The share has traded over the past 52 weeks from $151.22 down to $60.82 with a 50-day moving average of $100.63. DLTR closed at $81.50 on September 3^rd, pre-release, opening September 4^th at $72.81, down 11 percent and falling further in trading by 25 percent to $61.19 at 15H00 EDT. Dollar Tree trades with a forward P/E of 12.5.  For the trailing-12 months the company posted an operating margin of 5.5 percent and a profit margin of negative 3.2 percent.  The company returned 4.9 percent on assets and negative 12.3 percent on equity over the past twelve months.

Effective March 4^th the company operated 16,397 stores (Dollar Tree, 8,520; Family Dollar 7,897). During Q2 the company continued renovations and opened 27 new Dollar Tree and 28 Family Dollar stores. Responding to complaints from civic organizations Dollar Tree continued to add frozen and fresh foods to stores in areas deemed “food deserts”  

In the investors’ call the company commented on theft as a headwind and announced preventive measures including removal of self-checkout stations. Management noted recipt of $70 million in part settlement of an insurance claim for $110 million following the complete loss of the Marietta, OK. distribution center and inventory to a toronado on April 28^th.

Dollar Tree is now evaluating the possible sale of the Family Dollar chain after recently announcing an intention of closing 1,000 stores. The banner was acquired in 2015 for $9 billion.

The September 3^rd release of the Purdue University-CME Group Economy Barometer Index for row-crop production fell in August to 100 points. The Index of Current Conditions was down 17 points from July to 83. The Future Expectations Index was down eleven points to 108. The Index is derived from the responses of 400 U.S. farmers and was conducted from August 12^th through 16^th.

Evident conclusions from the survey is that farmers are encouraged by the prospect of high soybean and corn yields, declining inflation, the prospect of lower interest rates and future  energy costs linked to the price of crude oil. The outstanding concern was the anticipated fall in commodity prices reflecting bountiful crops in South America and limited prospects for increased exports and domestic demand, even for biofuels. Many respondents indicated that they would carry higher debt burdens in 2024 mainly due to increased costs of inputs including seed, fuel and fertilizer for the current season.

A bipartisan group of legislators addressed a letter to Secretary of Agriculture, Tom Vilsack, urging “a new dynamic approach to bring long-lasting benefits to our farmers and producers” and urging a “Highly Pathogenic Avian Influenza Strategic Initiative within the USDA Animal and Plant Health Inspection Service”.

The Members of the House representing California, Iowa, North Dakota, North Carolina and Virginia pointed to the accumulated cost of the unsuccessful attempts over the past two years to eradicate HPAI. They noted that indemnity payments and related costs attained $3.3 billion for the 2014-2015 epornitic.  A significant sentiment expressed in the letter was the fact that the ongoing series of outbreaks that commenced in 2022 “has no end in sight”.  The letter also alluded to the emergence of bovine influenza-H5N1 caused by a mammalian-adapted B3-13 strain of avian influenza virus.

 The legislators suggested concerted action by the USDA including: -

• Developing innovative biosecurity methods including those that deter wild birds that are reservoirs and disseminators of the infection.
• Adoption of vaccination following the policy and action of other nations but requiring outreach with trade partners.
• Developing novel methods of depopulation and bird disposal that are both cost-effective and humane.

The legislators pointed to existing authority vested in the USDA to collaborate with Land-Grant universities to develop and implement a more effective program to mitigate the extent and cost of avian influenza.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on September 3^rd documented 94 percent of the soybean crop setting pods and 12 percent dropping leaves. Nineteen percent of the corn crop is now mature, ahead of the 5-year averages for the corresponding week.

Despite high temperatures across the Midwest and Plains states, crop condition was almost unchanged during the past week. Corn and soybeans each attained 65 percent for the two highest categories of “Good” and “Excellent.” The September 1^st values for corn and soybean quality were considerably higher than the 54 and 53 percent recorded for corn and soybean crops respectively for the two highest categories during the corresponding week in 2023. Prospects for high yields were reflected in lower price projections in the August WASDE and for CME prices for August delivery following the release of the report.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week, surface and subsoil moisture values were lower at 54 and 57 percent respectively for the two highest categories of ‘Adequate’ and ‘Surplus’ combined. Average topsoil moisture this past week was down three percent on average across 18 major row-crop states but still with an acceptable outlook for growth and quality in 2024 given the stage in production. Corresponding values of 42 and 43 percent percent each were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023.

It is unlikely that the expected transition to a La Nina event will have any substantial impact on crop condition through harvest. Prolonged dry and hot weather apparent at this time will not depress corn and soy yields depending on timing and severity.

Heat stress that occurred during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the pre-harvest period for corn will also result in 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 pre-harvest period.

Reference is made to the August 12^th WASDE Report #651 under the Statistics TAB and the weekly Commodity, Economy and Energy Report, in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. WASDE #652 will be reviewed in the September 20^th edition.

During September the NASS will conduct their annual remote survey to estimate yields and final production. Pro Farmer completed their annual crop tour in mid-August. Their August 23^rd report estimated a corn yield of 181.1 bushels per acre with a projected crop of 14.98 billion bushels. The corresponding values for soybeans were a yield of 54.9 bushels per acre contributing to a 2024 crop of 4.74 billion bushels.

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.

WEEK ENDING   Corn Status (18 states) * August 25th  2024    September 1st 2024 5-Year Average  Corn Silking (%) 100 100 100 Corn Dough (%) 84 90 90 Corn Dented (%) 46 60 58 Corn Mature (%) 11 19 13 Soybean Status (18 states)       Soybean Blooming (%) 100 100 100 Soybeans Setting Pods  (%) 89 94 93 Dropping Leaves (%) 6 13 10 *Representing 92% of 2024 acreage planted	Soybeans setting pods
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 4 8 23 50 15 Corn  2023 (%) 6 12 29 44 9             Soybeans  2024 (%) 3 7 25 52 13 Soybeans  2023 (%) 5 12 30 44 9	Corn Maturing
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 15 31 50 4 Past Year 24 34 40 2 Subsoil Moisture:         Past Week 14 29 53 4 Past Year 22 35 41 2

One week into the projected three-week hearing on the proposed merger between the Kroger Company and Albertson’s Corporation, there is no indication of an outcome.  U.S. District Judge, Adrienne Nelson, will rule on the action to derail the transaction initiated by the Federal Trade Commission and supported by the attorneys general of nine states.

The FTC maintains that the merger would be prejudicial to workers and would ultimately result in increased prices for consumers.

Kroger maintains that it is necessary to become larger through mergers or acquisitions to compete with Walmart, Amazon and Costco.  Kroger and Albertson’s have offered to divert $1 billion to reduce prices in stores with Albertsons running approximately ten percent higher than at Kroger.  Both parties to the proposed merger have agreed to recognize unions as a requirement for the transaction.  Kroger and Albertsons announced they would divest 579 stores to C&S Wholesale Grocers. This was an upward adjustment after a previous plan to sell 413 stores was rejected by the FTC.

Testimony during the first week of the hearing revealed internal messages among Kroger senior management relating to setting prices for eggs and milk at levels significantly higher than the trajectory of inflation. This strategy was intended to determine what consumers were willing to pay in order to maximize margins.  This evidence plays into current political rhetoric concerning allegations of price gouging and will in some measure indirectly influence public opinion if not the court’s ruling.

Attorney Susan Musser, appearing for the FTC, noted in opening arguments, “Stopping a multibillion-dollar deal will keep in place bigger competition that acts as a check on rising grocery prices and encourages further improvements in quality and innovation.”

Haggen is the 600-pound gorilla in the corner of the Court.  In 2014, Albertsons merged with Safeway, divesting stores in compliance with FTC concerns over limiting competition.  Within a year, Haggen was bankrupt and the stores that were divested returned to the Safeway banner. Both unions and the FTC maintain that a similar situation will occur, effectively negating the promises made by Kroger and Albertsons. 

An additional minor issue that emerged relates to alleged destruction of text messages by Kroger managers.  The FTC informed the companies on November 3^rd, 2022, within days of the official announcement, that all documentation pending completion of an FTC review should be retained.  The FTC claims that Kroger “failed to preserve responsive text messages after receiving a preservation hold and numerous reminders”.  Albertsons management claimed that an auto-delete feature on managers’ phones was responsible for the apparent disappearance of messages. One exchange emerging from discovery confirmed an Albertsons manager expressing the opinion that the merger would ultimately result in higher prices.  The FTC claims that allowing individual managers discretion as to deletion of messages constituted “willful destruction of evidence”.

Irrespective of the outcome of the Oregon hearing, the show will go on. Lawsuits have been filed in state courts in both Colorado and Washington at which both the FTC and Kroger-Albertsons will present expert witnesses analyzing the effect on suppliers, consumers and unions of the proposed merger. And then there will be appeals--.

According to a recent press report, an analysis of payment data for Beyond Meat collected by Creditsafe suggests delays in paying vendors with extensions beyond 90 days.  In July, one third of invoices were between 1 to 30 days late for payment and 13 percent were 30 to 60 days late.

This indicates inadequate cash flow and is consistent with successive quarterly reports including Q2 of 2024.  The report on the company published in the August edition of CHICK-NEWS noted that management is currently negotiating a restructuring of the balance sheet given impending maturity of bonds. The Company is once more offering optimistic projections of revenue and profitability based on reformulation of products and rationalization of manufacturing.

As at the end of Q2 FY 2024, ending June 29^th the Company recorded a 12-month trailing operating margin of -36 percent and a profit margin of -99 percent. Market capitalization on September 3^rd was $395 million down from $619 a year ago, reflecting a concurrent decline in share price from $12.12 to $5.13. Institutional shareholding has sunk to 40 percent with 39 percent of outstanding shares short.

Failure to pay vendors according to accepted time periods, will have negative effects on the cash flow of their suppliers and may impact sourcing of ingredients by Beyond Meat.

The success or otherwise of the “health and wellness” marketing initiative that forms the basis of a program to reverse a sales decline will be evident in results posted for Q3 and beyond.

The iHotraco Farm Manager facilitates review of flock performance across numerous barns on a complex or a series of farms.  The data from all houses can be consolidated into a single view for comparison analysis and decision making.

The iHotraco Farm Manager offers: -

• Live overview with early warning of deviations from standard.
•  
• A dashboard depicting feed and water intake with relevant comparisons over selected time periods.
• Production data relating to a single barn can be displayed and combined for multiple barns to generate a trend graphic.
• Parameters can be changed remotely using a range of devices.
• Feed intake and stock can be recorded to plan orders and deliveries.
• Climatic data can be stored and displayed, and historical data can be accessed.
• The system records all activities performed by any user in a continuous log.

For additional information on the iHotraco Farm Manager, access the Company website <www.hotraco-agri.com> or click onto the company logo on the right side of the Welcome page.

Status of the 2024 Corn and Soybean Crops

The USDA Crop Progress Report released on September 9^th recorded 25 percent of the soybean crop dropping leaves. Twenty nine percent of the corn crop is now mature and 5 percent has been harvested, slightly ahead of the 5-year averages for the corresponding week.

Despite high temperatures across the Midwest and Plains states, crop condition was almost unchanged during the past week. Corn and soybeans attained 64 and 65 percent respectively for the two highest categories of “Good” and “Excellent.” The September 8^th values for corn and soybean quality were considerably higher than the 52 percent recorded for both corn and soybean crops for the two highest categories during the corresponding week in 2023. Prospects for high yields were reflected in lower price projections in the August WASDE and for CME prices for September delivery following the release of the report.

Based on the sum of the “Adequate” and “Surplus” categories, surface and subsoil moisture levels were higher than during the corresponding week in 2023. For the past week, surface and subsoil moisture values were lower, both at 53 percent for the two highest categories of ‘Adequate’ and ‘Surplus’ combined. Average topsoil moisture this past week was down one percent on average across 18 major row-crop states but still with an acceptable outlook for growth and quality in 2024 given the stage in production. Corresponding values of 42 percent percent were recorded for the two highest categories for topsoil and subsoil moisture respectively in 2023.

It is unlikely that the expected transition to a La Nina event will have any substantial impact on crop condition through harvest. Prolonged dry and hot weather apparent at this time will not depress corn and soy yields depending on timing and severity.

Heat stress that occurred during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the pre-harvest period for corn will also result in 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 pre-harvest period.

Reference is made to the August 12^th WASDE Report #651 under the Statistics TAB and the weekly Commodity, Economy and Energy Report, in this edition, documenting acreage to be harvested, yields, weekly prices and ending stocks. WASDE #652 will be reviewed in the September 20^th edition.

During September the NASS will conduct their annual remote survey to estimate yields and final production. Pro Farmer completed their annual crop tour in mid-August. Their August 23^rd report estimated a corn yield of 181.1 bushels per acre with a projected crop of 14.98 billion bushels. The corresponding values for soybeans were a yield of 54.9 bushels per acre contributing to a 2024 crop of 4.74 billion bushels.

EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2024 harvest in November.    

WEEK ENDING   Corn Status (18 states) * September 1st     September 8th 2024 5-Year Average  Corn Dough (%) 90 95 94 Corn Dented (%) 60 74 73 Corn Mature (%) 19 29 24 Corn Harvested (%) 0 5 3 Soybean Status (18 states)       Soybean Blooming (%) 100 100 100 Soybeans Setting Pods  (%) 94 97 96 Dropping Leaves (%) 13 25 21 *Representing 92% of 2024 acreage planted	Soybeans setting pods
Crop Condition  V. Poor Poor Fair Good Excellent Corn  2024 (%) 4 8 24 48 16 Corn  2023 (%) 6 12 30 43 9             Soybeans  2024 (%) 3 7 25 52 13 Soybeans  2023 (%) 6 12 30 43 9	Corn Maturing
Parameter  48 States V. Short Short Adequate Surplus Topsoil Moisture:         Past Week 15 32 49 4 Past Year 25 33 40 2 Subsoil Moisture:         Past Week 14 31 52 3 Past Year 24 34 40 2

The Consumer Financial Protection Bureau has determined that dollar stores and conventional supermarkets are benefitting from fees imposed on cash-back transactions.  It is estimated that the two major dollar stores and the Kroger Company collected over $90 million in fees during 2023.  The Bureau determined that the actual cost to the stores was marginal relative to the fee.  In many rural areas, Dollar stores represent the only source of cash in the absence of bank branches or ATMs, and especially for customers without bank accounts.  The report developed by the Bureau established that low-income earners were especially vulnerable to the fees and were disproportionately impacted.

In response to the report, Dollar General stated, “While not a financial institution, we provide cash-back options in more than 20,000 stores across the country as a service to customers who may not have convenient access to their primary financial institution.”  The statement continued, “These services may also help customers save money on fees compared to alternative non-retail options such as check cashing and ATM fees.”

Dollar Tree noted that cash-back transactions are completed according to a clearly disclosed fee.

A joint study conducted by Kearney and Nielsen IQ estimates that private label food, beverage, beauty and fashion items represented 24 percent of consumer expenditure in 2023 compared to national brands at 76 percent of dollar sales.  From 2022 to 2023, private label sales rose 12 percent to $225 billion and are estimated to grow to $406 billion by 2030.

The motivation for the adoption of private brands extends beyond price.  A third of consumers now regard store-brand food and beverage offerings as superior to national brands with approximately half of survey respondents accepting equivalence to national brands.Kathryn Black, a partner at Kearney, stated, “Private labels can no longer be considered the poor cousin of major national brands.”

Private label food categories favored by consumers include bakery at 57 percent of dollar value, dairy at 35 percent, frozen foods, 24 percent and groceries at 14 percent.  It was striking that there was a similar level of acceptance approaching 70 percent among three, distinct income demographics ranging from less than $50,000 to more than $100,000 annually.  There was also no difference among age groups with 70 percent of ‘Generation Z’ (born 1997-2012) reporting a favorable impression of private labels compared to 65 percent for ‘baby boomers’ (born 1946-1964).

Private label products represent a disproportionately higher share of the market ranging from 31 percent in Italy to 37 percent in the U.K. compared to the relatively low volume in the U.S. and Canada. This suggests a potential for market growth.  Ms. Black noted, “Private label can generate significant margins for U.S. retailers and that manufacturers need to pay attention to growing private label offerings.”

The success of deep discounters, including Aldi, with over 70 percent of their shelf and cooler space displaying private brands is an indication of consumer acceptance.

In an August 27^th release, BioChek of Reeuwijk.Holland and Bio-X of Namur, Belgium announced a strategic partnership relating to their respective concentrations on poultry and ruminant diagnostic kits.  BioChek will also acquire a minority share in Bio-X.

Barend van Dam, CEO of BioChek, commented, “The business philosophy of our two companies is very similar.  State-of-the-art diagnostics and superior support for our customers is what we achieve.”

Philippe Hivorel, CEO of Bio-X, commented, “This partnership will enable Bio-X to offer our products worldwide.  Prior to the agreement, we cooperated with BioChek on several products and learned to appreciate their collegial way of working.”

BioChek has an extensive portfolio of veterinary diagnostic kits for poultry and swine diseases.  Bio-X diagnostics specializes in rapid-detection point-of-care products including CellSense® diagnosis of subclinical mastitis, a newly introduced PCR assay for bluetongue virus type 3, Clostridium perfringens in cattle and PRRS in swine.

BioChek operates an administrative facility in the Netherlands, R&D in the U.K. and a unit recognized by the USDA in the U.S.  The strategic alliance will expedite R&D to promote animal health and will be invaluable in extending the market reach of both companies.

According to a release by Moba, Chino Valley Ranchers has successfully operated an Omnia PX+ Vision at their Southern California plant for two years.  According to Chris Nichols, the installation has operated without problems and has contributed to increased efficiency. Both USDA-AMS inspectors and California Department of Food and Agriculture officials have monitored results in parallel with Chino Valley QC personnel to confirm sensitivity of crack detection and the accuracy of vision-weighing irrespective of the types of eggs among the extensive range packed in the off-line plant.

For additional information on Moba OmniaVision, access the Company website by clicking on to the Moba logo on the right side of the Welcome page.

North Carolina State University (NCSU), Department of Agricultural and Human Sciences in collaboration with the U.S. Food and Drug Administration, have established a training course entitled “Introduction to Public Health Food Inspection” The course has the support of the National Association of State Departments of Agriculture. 

The objective of the course is to provide participants with an understanding of federal regulatory food inspection regulations and enforcement. The initial 16-week in-person program will be led by Dr. Ben Chapman with participation by federal and university specialists.  The course will have both theoretical and practical components to provide a comprehensive appreciation of food safety regulations and enforcement.

The initial course will be offered as a special topics class but subsequently, will be refined and hopefully expanded to include on-line tuition with weekend participation.  The course will be offered annually with the prospect of participation by other Land Grant institutions.

Governor Joe Lombardo issued a veto following bicameral passage of legislation to provide universal free school meals to all students in Nevada.  Lombardo believes that the USDA Community Eligible Program will provide adequate food for children in high poverty areas.  Basically, Lombardo should be ashamed that 80 percent of students in his state are automatically eligible for free or reduced-price meals.  As one of the states that deprecates federal involvement and touts independence from Federal involvement, he is apparently accepting the principle that U.S. taxpayer funds should help feed children in his state.

During 2023, the Environmental Working Group submitted a petition to USDA to require meat producers from labeling product as “low carbon” or other claims of environmental sustainability including “carbon neutral” or “net zero”.

In rejecting the petition, the Food Safety and Inspection Service noted that the “low-carbon beef” label has not been approved and that the Agency will continue to evaluate environmental-related claims.  All label text must be truthful and in compliance with federal regulations.

The FSIS also denied the request for mandatory third-party verification of environmental label claims but does encourage third-party certification.

On Friday 30^th August, Veterinary authorities in California confirmed a diagnosis of bovine influenza-H5N1 in three dairy herds in the Central Valley marking the 14^th state with affected herds.  The provisional diagnosis was based on symptomatology apparent on August 25^th, followed by laboratory investigation. It is presumed that whole genome sequencing will be performed.

The important question is the extent of infection among approximately 1.5 million cows in the San Jaoquin Valley extending from Bakersfield to Stockton.  Unless California introduces a mandatory testing program similar to Colorado, and then take appropriate action to quarantine affected farms, the dairy industry will be severely impacted.

Based on the reality that H5N1 strain B3-13 is adapted to mammals, appropriate precautions should be taken to prevent exposure of workers.

Karen Ross, Secretary of the California Department of Food and Agriculture stated “We have been preparing for this possibility since earlier this year when HPAI detections were confirmed at dairy farms in other states,” She added “Our extensive experience with HPAI in poultry has given us ample preparation and expertise to address this incident, with workers’ health and public health as our top priorities.” Secretary Ross commented on the financial challenges facing dairy farmers emphasizing the need for urgent action to suppress infection.

Nationally the dairy industry has been reticent to respond to offers by the USDA to participate in monitoring despite financial incentives.

USDA Data On Cage-Free Production For August 2024

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report. This data is correlated and interpreted in the WeeklyEggPrice and Inventory Report posted on EGG-NEWS mailed on Fridays each week.

The USDA Cage-Free Report covering August 2024, released on August 30^th 2024, documented the complement of hens producing under the Certified Organic Program to be 19.6 million (rounded to 0.1 million), effectively unchanged from July 2024. Depopulation was carried out in July as a result of HPAI. The number of hens classified as cage-free (but excluding Certified Organic) and comprising aviary, barn and other systems of housing apparently increased by 3.3 million hens or 3.2 percent from July 2024 to 104.0 million, despite previous flock depopulation and an unexpected high value in July. Hen numbers posted by the USDA for August are questioned as to accuracy taking into account chick placements and July depopulation figures released by APHIS.

The number of eggs collected is accepted as accurate but since the values for average hen-week production are unacceptably high this suggests that the denominator reflecting the number of hens is probably incorrect. Alternatively if conventional eggs from cages are deceptively marketed as cage-free, or if cage free eggs are packed as certified Organic, assuming an accurate number of hens over a given month, the apparent hen-week value would be disproportionally high. The respective numbers of hens claimed for organic and cage-free flocks should reflect the net contribution of chick placements 20-weeks previously, HPAI depopulation and age-related depletion and should correspond to monthly supply data and inventory extending over successive quarters. Unlike conventional cage production cage-free hens are not generally molted reducing this possible reason for error in calculating rates of production.

Average weekly production for Certified Organic eggs in August 2024 was down by <0.1 percent compared to July 2024 with a questionably high average weekly production of 83.8 percent, unchanged from July. Average weekly flock production for cage-free flocks other than Certified Organic was up 3.2 percent in August 2024, but with a high average hen-month production of 82.6 percent, up from 82.5 percent. Seasonally, younger flocks increase the availability of cage-free and organic eggs in response to pullet chick placements 20 weeks previously especially in anticipation of periods of peak seasonal demand. Since the proportion of pullets according to housing type is not indicated in the monthly USDA Chickens and Eggs report, it is not possible to assess the relative sizes of flocks producing under the certified organic label or other categories. There is no adequate explanation for the high production rate especially if the reported number of hens is lower than actual, especially with undercounted HPAI flock depopulation.