Shane Commentary

Environmental Impact of the NC Timber Industry


The editorial on August 21st dealt with sustainability and specifically the fallacy of burning wood chips to generate electricity.  Further to the information provided in this posting, a subsequent report by the Center for a Sustainable Economy characterizes the North Carolina timber industry as a “climate catastrophe”.  Approximately 5 percent of North Carolina covering 2.6 million acres is a carbon sequestration dead zone.  This is due to clear cutting and removal of timber for wood chip production and for sawmills in the state.  If plantations are harvested it takes approximately 13 years to begin offsetting atmospheric carbon dioxide through photosynthesis.  Pine plantations store less carbon than native forest currently dominated by hardwoods in North Carolina.

Findings by the Center for a Sustainable Economy concerning release of carbon dioxide by the logging industry are paralleled in Oregon.  In that state logging is the most carbon-intensive sector.  In North Carolina electric generation and transportation are more carbon intensive.

The Center for a Sustainable Economy advocates application of acceptable forestry practices as an alternative to clear cutting including restoration and a lower intensity of logging.  Unfortunately the economic impact of the timber industry and its political clout mitigate against any meaningful improvement in the intermediate future.



The Trade War With China – Who is Winning?


CNBC Morning Squawk on September 9th presented data from official sources in China indicating the country reported a trade surplus of $35 billion in August compared to $45 billion in July. Exports to the U.S. were 16 percent lower year-on-year in August but up from a 6.5 percent decline in July.  Imports from the U.S. to China were 22.4 percent lower in August 2019 compared to August 2018, reflecting the impact of the ban on agricultural products effective on August 4th together with previous high retaliatory tariffs.  Overall exports to China declined by 5.6 percent in August 2019 compared to the corresponding month in 2018 reflecting a drop in domestic consumption.


A principal of objective of the trade action taken against China, initiated in 2017 was to reduce the negative balance of trade.  For the first eight months of 2019 the difference between imports and exports favored China by $196 billion with the August deficit attaining $27 billion.


On Friday September 6th the Central Bank of China cut reserve requirements for banks for the seventh time since the beginning of 2018 to allow institutions to extend more loans to companies.  Additional support measures are anticipated to prevent an economic slowdown according to CNBC. Zhang Yi an economist at a financial management company stated, “Exports are still weak even the face of substantial Yuan currency depreciation, indicating that sluggish external demand is the most important factor affecting exports this year.”


Larry Kudlow, White House Economic Advisor also stated on Friday September 6th that the U.S. anticipates “near term” results from bilateral talks scheduled for October.  He indicated that the trade conflict could take years to resolve.  This is a retraction from the earlier Administration claim that “trade wars were easy to win and of short duration”.  Prospects of even a limited near-term resumption of agricultural imports are unlikely unless both nations make concessions with regard to recently announced additional tariffs. Resolution of the trade dispute is critical for the financial wellbeing of the agricultural sector as the 2019 harvest approaches


 The more basic conflicts relating to structural issues including intellectual property and coercive trade practices that were the justification for initiating the trade conflict by the U.S. in 2017 are unlikely to be resolved in October if at all. These practices are critical to achieving the “Made in China 2025” initiative essential for continued growth in GDP. We will never conclude a Grand Agreement over a dinner regardless of the deal making skills of the Negotiator-in-Chief. We could make steady but slow progress through diplomacy, application of tactical economic pressure and cooperation with our allies with whom we have converging interests with respect to China.


Hepatitis A Emerges as a Significant Food-Borne Disease


According to the Center for Disease Control, a total of 31 states have reported close to 35,000 confirmed cases of hepatitis A in 2019.  This infection results in a high proportion of hospital admissions.  Although the infection is common among the homeless and intravenous drug users, approximately 30 percent of cases involve foodborne infection. Numerous cases have been diagnosed, in which food handlers were implicated.


Infected food handlers are responsible for transmission of the virus to diners through the fecal-oral route requiring deficiencies in personal hygiene by shedders in direct contact with food and utensils.


Since hepatitis A can be prevented by available vaccination, all food handlers and workers in restaurants including QSRs should receive preventive vaccination as a condition of employment. 


Dangers from Maximum Security Biohazard Laboratories


A recent audit by the Centers for Disease Control and Prevention carried out on the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) disclosed deficiencies in biocontainment and decontamination of waste-water.


The military laboratory “studies” selected agents responsible for Ebola, plague, anthrax and other lethal diseases that have potential biological warfare application.  Deficiencies in containment represent a hazard to both workers at institutes and the population surrounding these establishments. 


EGG-NEWS has previously documented failures in biocontainment at major establishments including the Centers for Disease Control and Prevention, a Russian bio-warfare laboratory in Ekaterinberg, Pirbright Laboratory in the U.K. and various universities and institutes in Africa, the EU and the U.S.

Rotation of employees without training and re-training, deviations from accepted standard operating procedures attributable to familiarity and the failure to maintain equipment can all contribute to release of pathogens.


Those responsible for planning, implementing and managing the new National Bio and Agro-Defense Facility equipped with BL-4 laboratories should be cognizant of risks and consequences of a release of either a zoonotic or animal-specific pathogen and should exercise the utmost safety.


Philippines Suffering from Widespread Dengue Fever Outbreak


During 2019, close to 150,000 confirmed cases of Dengue fever have been reported in the Philippines with 622 fatalities.  The Health Ministry of the Philippines has declared an emergency and the Nation is concentrating all public health resources to combating the infection.

Dengue is a mosquito-borne disease and in the absence of a safe and effective vaccine, control measures are confined to suppressing mosquito populations.

 Recently EGG-NEWS reported on opposition to deploying genetically modified (GM) mosquitoes to control malaria.  Any activity that unjustly disparages GM on principle or restricts the use of a viable and scientifically proven control method for a serious disease such as malaria or Dengue is strongly deprecated.  Opponents of GM are not taking into account the effect of disease and mortality caused by mosquitoes responsible for numerous widespread infections on four continents.  Given unseasonal rains and increased temperatures, Gulf States are vulnerable to Arborviral encephalitides, Dengue, Zika and Chikunguna fever, all of which are vector borne.


USSEC Efforts to Promote Soybean Exports to China Face Obstacles


Despite the deteriorating trade relationship between the U.S. and China, USSEC is justifiably still maintaining promotional efforts in China as an investment for the future. The Council recently reported on promotional activities directed to soybean food processors.

Obstacles to exports obviously include the now blanket ban on imports of all U.S. agricultural products, competition from local varieties suited to production of tofu and yuba and a strict embargo on GM-origin soybeans.

It is questioned whether contacts with the Jiangnan University School of Food Science and Technology and major food companies in Nanjing, Jiangsu Province will in fact generate goodwill. Providing technology to Chinese institutions and business entities, many of which are state-managed is simply transfer of know-how ultimately to the detriment of the U.S.

During the 1990’s the American Soybean Association promoted exports of soybeans to India, China and other nations by providing live-bird and hog technology to develop domestic livestock industries. This resulted in increased demand for soybeans frequently supplied by Brazil and Argentine. The result of seminars, farm and plant visits and advice especially on processing contributed to a rise in domestic production reducing the market for U.S. exports and in some cases even generating competition for export markets supplied by U.S. producers. The USSEC should recognize that U.S. hog, broiler and egg producers are their main market and that the long-term interests of users of soybeans should be considered.

The 1990s ASA model of promoting domestic production to stimulate exports of U.S. soybeans may have generated a short-term benefit, but providing technology especially in the area of post-harvest poultry processing, as requested by China, has been contrary to the interests of our domestic poultry industry.

At the end of the day, soybeans are a commodity, despite the attempts by USSEC to promote superior nutritional value. Irrespective of claims to the contrary, landed price is the principal motivation to purchase corn, wheat and oilseeds. Sustainability, is a justified attribute and is worthy of promotion but probably is not considered in the purchase decision. Quality depends on scrutiny by USDA personnel at export terminals and is probably equivalent to soybeans from Brazil, Argentina and the Ukraine given international standards. Major purchases by potential importers are based on landed price and availability and attempts at product differentiation of what is essentially a commodity may be akin to pushing a piece of string. Either way it plays well in Peoria, since the expenditure on promotion, personnel and logistics is derived from check-off funds relying on the goodwill of farmers.


Environmental Groups Opposing GM Mosquitoes to Control Malaria



According to an insightful essay by Richard Tren in the August 1st edition of The Wall Street Journal a group of forty environment organizations are opposing the Target Malaria Project funded in part by the Gates Foundation.  The initiative involves release of genetically modified male mosquitoes to reduce the incidence rate or even eliminate malaria in affected locations.

Previously EGG-NEWS commented on misguided opposition to field trials on the Florida Keys to eliminate GM mosquitoes capable of carrying Dengue, Chikungunya and other arborviral diseases.


Advances in genetic technology including CRISPR-cas9 to produce beneficial crops displaying pest and drought resistance and nutritional enhancement will be required to feed burgeoning populations by the middle of this Century. Applying GM to insect vectors could save lives and enhance the quality of life in nations afflicted with malaria. With progressive climate change areas in temperate latitudes hitherto free of tropical diseases may become endemic areas requiring the application of emerging and unconventional control technologies.


A petition signed by close to 150 Nobel laureates has demand that environmentalists including Greenpeace cease opposition to genetic modification which offer benefits to developing populations impacted by malnutrition and disease. Blind opposition to technical advances including insertion and deletion of genes is strongly condemned as are deceptive, false and distorted claims perpetrated by antagonists of GM.


Central Government in China Pushes Pork Production


In the face of ascending mortality from African swine fever (ASF) that to date may have depleted the national herd by one third, government authorities in China are adopting a traditional centrally-planned approach to increasing production. At issue is the reality that pork prices are climbing, reflecting an imbalance between supply and demand. It is understood that frozen pork in storage has been depleted and with tariffs imposed on U.S. imports, prices are over 30 percent higher than in July 2018. To prevent consumer disaffection, provincial and municipal authorities are now subject to obligatory production quotas consistent with traditional Communist practice. Measures to support production include grants to consolidate processing and subsidizing hog producers. Issuing orders may be easier than ensuring compliance given that the infection is not controlled and that a low standard of biosecurity prevails in small family-operated farms.

The disease will not be controlled for at least two years even if an effective vaccine is introduced since the hog industry requires radical restructuring. Eradication in the foreseeable future does not appear to be a reality. Previous postings on EGG-NEWS and CHICK-NEWS commented on the epidemiology of African swine fever in both Eastern Europe and Southeast Asia and the problems associated with control and the impact on supply. (Enter African swine fever in the SEARCH block to review previous postings)

Evidence that ASF has severely impacted supply is the response to the order to increase production with a reported five percent increase in the share price of the WH Group on the Hang Seng Exchange on Friday, July 26th.

The action by the central government and provincial authorities are at least recognition of the problem represented by ASF despite an egregious lack of transparency over prevalence and failure to acknowledge the wide geographic extent of the infection.


Research on ILT


USPOULTRY recently circulated the results of Project 692 Modified Live Vaccines of Infectious Laryngotracheitis Virus.  The research was conducted by Dr. Calvin L. Keeler, Jr. of the University of Delaware.  It is accepted that chick-embryo-origin (CEO) vaccines against infectious laryngotracheitis are effective in suppressing clinical manifestations of infection. In contrast CEO vaccine is generally regarded as being responsible for field outbreaks of clinical ILT allegedly due to reversion to virulence by back-passage.  Studies conducted at the University of Georgia have demonstrated conclusively that most field “breaks” of ILT are attributed to CEO vaccine.


Dr. Keeler and his team evaluated a CEO ILT vaccine to determine the characteristics of the live virus component.  Two sub-populations of virus were identified, designated University of Delaware CEO D2 and D3.  Both were nonpathogenic in broiler chickens.  On successive passage in SPF chickens, embryonated eggs and liver cell cultures, viruses showed a decline in viability.  The attenuated strains of ILT virus were passaged twenty times in chicks without inducing heightened pathogenicity.  Passage in embryonated eggs or liver cell tissue culture could not be achieved.


On the basis of the laboratory experiments Dr. Keeler maintains that CEO vaccines do not revert to virulence under field conditions by back-passage and these strains have limited ability to propagate in avian hosts.


Since ILT virus vaccines represent “a mixture of genetically related viruses exhibiting differences in pathogenicity” a competitive situation may exist in which the virulent sub-populations in the vaccine dominate the apathogenic strains contributing to vaccine spread and increased virulence consistent with field experience.



Easter Sales and Future Prospects. Are we Flying Blind?


Anne L. Alonzo, president and CEO of the American Egg Board recently commented on sales volume and prices of eggs in an article published in the Summer 2019 edition of the Urner Barry Report. Ms. Alonzo emphasized the importance of Easter as the egg holiday with demand increased by home baking and entertaining. The importance of eggs during the Easter holiday is highlighted by the annual White House Egg Roll, which generates favorable publicity for the egg- producing industry.

Ms. Alonzo contrasted sales volume and prices for Easter periods from 2015 through 2019. Over the Easter period March 11th through April 7th in 2018, 242.5 dozen equivalent shell eggs were sold generating a revenue at retail of $511.4 million with a unit price of $2.10 per dozen. For Easter 2019 extending from March 31st through April 27th, 242.0 dozen equivalents were sold at a combined retail value of $424 million corresponding to a unit price of  $1.75 per dozen, a reduction of 17 percent.

Nielsen data suggests that including eggs in a shopping basket contributes to a tab of $33 per trip if generic eggs are included. This is compared to $49 per basket if cage-free, organic or other specialty eggs are purchased. This denotes that the demographic purchasing more expensive specialty, cage-free or organic eggs tend to purchase either more items per trip or tolerate higher unit prices due to perceived value of attributes. Eggs are obviously inelastic with regard to demand. Reducing the price of eggs may increase purchases slightly, but there is a limit to the quantity a consumer will purchase given perishability and a fairly constant use pattern.

Retail prices do not directly correlate with wholesale values. Prices paid to packers and integrators are a function of supply which in turn is influenced by flock size. Injudiciously high placement of pullet chicks reflects in lower wholesale prices 24 weeks later. The impact of the 2015 HPAI epornitic which occurred after the Easter period of that year resulted in a sharp increase in wholesale price following depletion of 40 million hens or 12 percent of the laying flock with replacement pullets although disproportionately affecting in-line breaking complexes. The effect of reduced flock size continued through 2016 in proportion to the level of rebuilding the hen population.

From the perspective of producers of shell eggs, supply is the important determinant of wholesale price. A comprehensive economic analysis is required to relate volume of production to wholesale and retail prices and the interaction of the shell and liquid segments of the industry. The impact of the 2015 HPAI epornitic, overproduction in 2019 and other factors influencing the egg industry represents a real-world exercise for agricultural economists. Determining the price elasticity for shell eggs and liquid and their interaction would be a valuable contribution to the industry with respect to forward planning and placement.

EGG-NEWS has advocated for such a study since 2015, and it is hoped that an industry initiative could fund a comprehensive study. This is especially important given the transition of the industry from caged housing to alternative systems including aviaries and floor-barns. Given the immense capital required to erect a complex of one to two million hens comprising pullet and layer housing, a feed mill and packing plant with appropriate biosecurity and other infrastructure demonstrates the need for quantifiable data to guide the industry going forward to 2025.


Economist Warns of Economic Slowdown from Trade Conflicts


Tom Barkin, president of the Federal Reserve Bank of Richmond highlighted uncertainty in trade policy as a factor contributing to a decline in U.S. economic growth from 3 percent last year to 2 percent in 2019.


In an interview with the Wall Street Journal with comments in an article published on July 2nd, Barkin deferred on the possibility of the FOMC reducing interest rates at the July 30th meeting.

Barkin noted steady employment gains and strong consumer spending but still uncertainty over trade, political development and Brexit.  In commenting on political pressure on the Fed, Barkin noted, “I think emotions have gotten far out in front of the data in terms of where we sit in the economy.”


It is evident that there is no immediate prospect of resolution of the trade conflict with China given the duration of negotiation, intransigence by China to commit to structural changes and the apparent willingness of the U.S. to apply tariffs to pressure advantages in negotiations.


Barkin noted that trade tensions between the U.S. and China will be “a permanent feature no matter how talks unfolded.”


Industry to Face Legal Opponents on Welfare


The Animal Wellness Foundation has announced formation of the National Law Enforcement Council. This group is dedicated to enforcing federal, state and local laws against animal cruelty. The Animal Wellness Foundation has as its objective alleviation of suffering of companion animals, livestock and wildlife. Although the organization is in the forefront of opposing dog and cock fighting or any other form of overt cruelty, their charter includes confrontation of “factory farming and other systemic forms of animal exploitation”.

Unlike many “do good” organizations with members motivated by sentiment, the National Law Enforcement Council includes solid legal support numbering eleven past or present states Attorney’s General, six District Attorneys and a number of legislators representing most of the U.S. states.

The activities of the parent body, the Animal Wellness Foundation, include veterinary care for companion animals regardless of owner’s economic status. The 501(c) 4 organization promotes responsible pet ownership and vaccination.

With considerable legal heft, the National Law Enforcement Council could be a formidable opponent if the organization is inclined to adopt a confrontational approach to intensive livestock production.


Executive Order to Expedite Approval of GM Cultivars


President Trump has issued an order to Federal agencies to expedite approval of genetically modified crops. This is especially important given the growing availability and application of gene deletion technology applying CRISPR-cas9. The order is directed to the USDA, the FDA and the EPA to remove unnecessary barriers and to approve gene-editing technology. The White House has also called for promotional activities to increase public acceptance of genetically engineered foods. The office of the U.S. Trade Representative will also actively work to remove unjustified trade barriers based on GM technology.

EGG-NEWS has frequently commented that although government agencies exert considerable pressure on applicants requesting licenses to demonstrate safety of novel food and agricultural technology they do little to promote the inherent qualities of GM foods. For two decades, opponents of GMO have used social media to spread disinformation concerning the safety of genetically engineered food ingredients. The Executive Order also incorporates a provision for Federal agencies to develop and maintain websites to serve as a reference for developers of GM seeds.

The magnitude of the problem relating to registration is noted in an article by Jacob Bunge in the June 13th edition of The Wall Street Journal stating that “Even avowed opponents of biotechnology including the Center for Science in the Public Interest accept that registration of GM products is cumbersome and time consuming”. Greg Jaffe of the Organization questioned whether the Executive Order was “just about streamlining or is about deregulating and exempting products from registration”.


H-2A and Other Documented Employees Require Adequate Housing


EGG-NEWS has commented previously on the relationship between acceptable housing for legal migrant workers and their productivity and tenure. Faced with competition from industry and progressively higher labor rates and the imperative to train and retain employees, many egg farmers are evaluating alternatives to their traditional recruiting and retention programs.  This is especially the case in the Southwest where employers require legal workers from Mexico and Central America.


Unlike seasonal harvests, egg production provides year-round employment and demands a high level of training in stockmanship and a commitment to welfare and acceptable procedures. The H-2A program requires employers to provide housing meeting minimum standards as laid down by the Department of Labor.


Based on personal experience in a number of nations and observing the situation in the U.S., egg producers should seriously consider providing acceptable housing for documented workers and their families.  With the conversion from conventional cages to aviary systems, labor requirements are at least double and sometimes three-fold compared to conventional cages creating a demand for additional workers.  Selection and then training including supervision is an expensive component of the cost of labor.  Motivated employees deserve both job security and domestic stability in return for service and commitment.  Providing homes of a suitable standard will generate loyalty to an employer and will contribute to a stable workforce which can be relied on to adhere to company procedures.


It is a matter of judicial record that in past years, producers such as the DeCoster family exploited workers and provided “captive” groups of employees with substandard accommodation. His companies used disused and obsolete trailers for housing subjecting workers to unsanitary and unhygienic conditions resulting in intervention by state and Federal authorities in addition to adverse judgments and settlements in civil lawsuits.


Along with investments and installations to satisfy structural biosecurity and environmental compliance, developers of new complexes should consider the erection of housing for workers as an integral component of capital cost as they now or should do with biosecurity.


Soy Farmers will Require Federal Compensation as a Result of the Trade War with China


According to the World Agricultural Supply Demand estimate #588 issued on May 10 U.S. farmers will plant 84.6 million acres to soybeans with a projected production of 4,150 million bushels.  Although USDA economists anticipate export of 1,150 million bushels, 38 percent of a total supply of 5,165 million bushels will be priced at a decade-low given the sharp reduction in exports to China.  USDA predicts the average farm price for the 2019 crop to be 810 cents per bushel.  At noon May 22, July futures were 833 cents per bushel with the November 2019 new crop price at 860 cents per bushel. Admittedly corn and soybean prices rose sharply in the second half of May but only in response to late planting and the prospect of lowered yields.


It is estimated that production costs is $8.80 per bushel.  In many cases farmers received less than the CME quotation for soybean delivered to local elevators.  Farmers should receive at least $1 per bushel more than current prices to generate any positive income from the 2019 harvest.


Following the release two tranches of support in 2018 to a wide range of producers with soy predominating, farmers will receive directly and indirectly about $12 billion in 2019. The White House directed the USDA to work on the new package with funds derived from the Commodity Credit Corporation.


For the 2016 election, the President received considerable support from farmers but the fall-out from the prolong trade war with China was not anticipated and has generated concern in Midwest states. Relying on “patriotism” is wearing thin in the corn-belt.


The National Farmers Union considered that support programs are “temporary solutions insufficient to address the permanent damage the trade war has inflicted on agricultural export markets.” An Iowa farmer quoted in the May 18th edition of The Wall Street Journal stated, “We don’t want gifts or government money, we just want fair trade.” At this point farmers might settle for any trade, fair or otherwise, to raise prices and regain markets.


FDA as a Separate Agency from DHHS?


A recent article in New Food Economy authored by Jessica Fu and Glenn Cohen of the Harvard Law School suggested that the FDA should be established as a separate agency such as the EPA. At issue is the potential politicization of the FDA that falls under the Department of Health and Human Services.

Cohen noted that the “FDA regulates a huge percentage of our economy and makes a huge difference to people’s lives”. There are instances of the DHHS obstructing or interfering in FDA decisions, especially in areas relating to drug approval, tobacco use and food safety. The authors suggest that if the FDA were an independent agency with its own budget, it would have the independence to conduct operations and develop policy appropriate to its mission. The authors noted “When science and politics collide, the optimal path is to delineate as transparently as possible the contribution of each”. It was the contention of the authors that in any situation when values are in conflict, an independent FDA would react with the best interest of all citizenry.

The suggestion has merit especially given blatant political interference with the National Institutes of Health and the Centers for Disease Control and Prevention, both of which are subsidiary agencies of DHHS.

CHICK-NEWS has frequently advocated for an independent food safety agency that would combine the current functions of the FDA, USDA-FSIS and other agencies with peripheral jurisdiction. This would enable the FDA either as an independent agency or a component of the DHHS to concentrate on approval, oversight of manufacture, distribution and regulation of drugs and medical devices. An independent food safety agency would parallel similar approaches in the E.U. leading to more efficient allocation of resources to research, surveillance and enforcement.


Sustainability of Intensive Protein Production


With a backdrop of media hype over transition to plant-based protein, it is important to recognize the inherent sustainability of intensive egg production.  The Good Food Institute estimates that a single egg is responsible for evolution of approximately 150 g of carbon dioxide equivalent compared to one once of chicken at 170 g, pork at 190 g and dairy at 300 g.  On the basis of land use, a single egg requires approximately 0.1 m2 compared to pork at 1.0 m2.  Beef requires 5 m2 per one-ounce serving.


Despite the appeal to what has been referred to as a bewildering array of food tribes including veggievores, flexitarians and lacto-vegetarians and their ilk, the cost of plant-based substitutes compared to animal protein is extremely high.  An Impossible Burger served at the Seattle Airport carried a $1 surcharge over a conventional beef burger.  In the UK, vegetable-based meat substitutes including hotdogs and cauliflower-based steak are priced significantly higher than conventional counterparts resulting in a backlash from consumers.


A commentator for a major UK restaurant chain said that profit margins on vegan dishes were approximately equal to meat equivalents despite the fact that the cost of ingredients is cheaper.  She added, “Anything that is plant-based has a huge amount of work in it since everything on the plate is made from scratch.”


In past months, multinational companies have invested heavily in plant-based substitutes including Danone of France that forecasts sales of $7 billion by 2025.  Observers are in fact questioning whether their $12.5 billion acquisition of WhiteWave in 2016 represented an injudicious overpayment.  Maple Leaf Foods of Canada purchased two brands for $270 million in 2017 and will invest $310 million in a new plant in Indiana.  Tyson Foods will adopt a go-it-alone program following sale of their equity in Beyond Meat before the highly successful IPO. Tyson Foods anticipates sales of $1 billion from plant-based products within a decade.


The appeal for plant-based meat substitutes is based partly on perceptions of health but also considerations of sustainability and welfare.  It remains to be seen whether there is a sufficient mass of consumers willing to pay a premium for these attributes, even if taste and satisfaction are equivalent to conventional meat products.  There is a growing concern that the rapid rise in demand for plant-based substitutes may well be based on curiosity. This was the case in my selection of an overpriced Impossible Burger sandwich. Since the product was inferior to a conventional meat burger, the trial will not to be repeated.


Commercial Banks in China Experiencing Dollar Squeeze


The combined dollar liabilities at the four biggest banks in China now exceed their dollar holdings. The institutions comprise the Bank of China, Agriculture Bank of China, Industrial and Commercial Bank of China and the China Construction Bank.  At the end of 2008, the Bank of China was $70 billion in deficit but claimed that off balance sheet dollar assets covered the shortfall.  The three other banks collectively showed a dollar surplus on their balance sheets amounting to approximately $15 billion.


Banks in China require dollars since currency derivatives mature within 12 months requiring regular renewal.  China is active in the swap market with other central banks but does not have an agreement with the U.S. Federal Reserve. 


China is however in no danger of embarrassment over the shortfall of dollars since the Central Government apparently holds $3.1 trillion in foreign exchange reserves and would come to the aid of any quasi-commercial bank all of which operate with close state supervision.  The dollar is still regarded as the most significant currency for international trade with many commodities including oil and gold bear dollar denominations.  The Chinese yuan is not universally accepted and conversion is difficult.


If a trade agreement is negotiated, China may still show a preference towards Brazil and Argentina for purchases of soybeans and other commodities if they can pay with their own currency or effect a state-sponsored barter transaction.  Clearly if the magic wand could resolve trade differences immediately, the U.S. may not reclaim the Chinese export market which has been profoundly eroded.  This has implications for the agricultural sector.  Prices of soybeans and hence meal will remain depressed and this will influence production costs for all monogastric livestock. Perhaps we will never revert to pre-trade war equilibrium. Belgian endives anybody?


Newcastle Disease Prevention Workshop in California


Poultry health professionals from California representing the Department of Agriculture, the University of California at Davis and representatives from commercial-level producers met in Dublin, CA to review measures to prevent extension of Newcastle disease from backyard flocks to commercial farms. The program was hosted by the California Poultry Federation with the participation of Foster Farms as the major broiler and turkey integrator in the state. Topics covered included biosecurity, clinical recognition of Newcastle disease and control measures


It is estimated that there are 100,000 backyard chicken flocks throughout the State but with a high concentration in the three counties surrounding Los Angeles.  In contrast he majority of commercial flocks are in the Central Valley and northern counties.


Currently quarantines are in effect in San Bernardino, Riverside and Los Angeles counties although there is an obvious question as to the durability of enforcement given that fighting cocks are involved.

California State Veterinarian Dr. Annette Jones stressed the importance of collaboration although with more than 420 cases in backyard flocks and three on commercial farms over 11 months, the California Department of Food and Agriculture has been less than effective in controlling a potentially catastrophic infection. 


EGG-NEWS reasserts that epidemiologic evidence suggest that the disease is endemic in the game fowl (fighting cock) population of southern California and that the three spatially related cases on commercial farms represented spill-over, facilitated by defective biosecurity.  Until the owners of game fowl and the relatively few backyard and pet flocks create a solidly immune population, “pop-up” cases will continue, whether reported or not with the danger of extension to large broiler, turkey and egg-producing complexes.



Store Upgrades by Walmart and Target


In a concerted drive to compete with Amazon, both Walmart and Target announced upgrades to their stores. While Target intends renovating 1,000 locations by 2020, the scope of the Walmart initiative involving 5,000 stores coupled with high technology will require investment of $11 billion.

Walmart will deploy robotics to increase efficiency and reduce labor costs. The company intends installing 1,500 autonomous floor cleaners, 300 shelf scanners and 1,200 unloaders at delivery docks. To improve click-and-collect transactions, Walmart will install 1,700 pick-up towers, 3,100 delivery locations and 1,600 grocery delivery locations.

Walmart spokesperson Delia Garcia quoted in Digiday, stated “we are using the stores as that connector to be able to serve customers how and whenever they want.” She added “Customers can order online and use in-store pick up towers.” Walmart will also include self-checkout machines, upgrade grocery presentations, install private consultation rooms in pharmacy departments and will add new signage.

According to retail industry analysts, there is a need to upgrade stores and improve appearance, to enhance the buying experience. Evaluating the return from investment in upgrades is difficult, but analysts maintain that declines in sales and consumer loyalty are consistently attributable to stores “which are old and gross”. This reality was apparently lost on the management of Sears at the outset of its decline that  can be traced back to neglect of appearance, staid brands and an unexciting ambience dating back to the 1970s.


Senator Warren Opposes Agribusiness and Commodity Check Offs


Senator Elizabeth Warren (D-MA) is taking aim at the entire agribusiness sector in addition to statutory commodity promotion programs. In pre-election rhetoric she has vowed to dismember agribusiness companies including Bayer AG (which is a German company) and Tyson Foods Inc. a domestic entity with international investments.


Warren maintains that “check offs” are corrupted and need reform and have been used to squeeze out competition” according to a March 27th posting on Bloomberg.

Warren maintains that check-off payments should be voluntary rather than mandatory.  If in fact check-offs were at the whim of an individual, the U.S. egg-production industry would not have enjoyed the benefit and support of the American Egg Board that successfully defeated the cholesterol myth through supporting responsible scientific research and publicizing results. 


The AEB has expanded egg consumption by promoting innovative products and developing new markets both in the U.S. and internationally.  Increased egg production and sales benefit consumers but also generate jobs through the entire supply chain, This extends from operators of farms growing corn and soybeans, plants crushing soybeans, owners and operators of egg-production complexes and farms, the transport industry, manufacturers of equipment, suppliers of pharmaceuticals and biologics, packaging manufacturers and workers in the food industry. 


Check-offs are not necessarily corrupt, certainly the AEB is not and one cannot envisage the need for reform.  Senator Warren should spend more time studying her targets and understanding their contribution and role rather than trying to fix something which is not broken. Generating rhetoric to support a quixotic political aspiration will rebound in Iowa wit 50 million hens. 



Canadian Farmers Concerned over Cancellation of Canola Seed Imports


Canada has relied on exports for 90 percent of canola seed harvested. During the past week, importers in China representing the bulk of shipments have cancelled orders for the ingredient.

The South China Morning Post suggests that the cancellations are in retribution for Canada arresting and detaining the CFO of Huawei on a warrant issued by the U.S. China does not apparently understand the rule of law and independence of the executive, legislative and judicial branches of government. Prime Minister Trudeau has been placed in a difficult position by the case, but cannot personally intervene and overrule the judiciary.

The warrant for the detention of CFO Meng Wanzhou currently under loose house arrest in Vancouver was issued in response to a formal request on allegations that her company contravened U.S. sanctions against Iran. Huawei has come under scrutiny from officials in western companies including the U.S. and the U.K. and also Australia and New Zealand alleging that intended 5G systems will represent a potential for espionage.

The action by China against canola exporters illustrates the gap in their understanding of procedural law in western democracies and illustrates the ruthlessness with which the central government of China will react to achieve predetermined policies.


Reiteration of California Proposition #12 Requirements


The November 2018 Proposition #12 ballot which passed with 60 percent of those voting requires producers of shell eggs or egg liquid to conform to the following housing requirements:-

  • Confining an animal in any manner that prevents the animal from laying down, standing up, fully extending the animals limbs or turning around freely (as per Proposition 2 of 2008).

  • After December 31st 2019 confined egg-laying hens must be provided with at least 144 square inches of usable floor space.

  • After December 31st 2021 egg-laying hens must be held in an enclosure other than a cage-housing system.

The requirements of Proposition #12 were extensively reviewed at both the IPPE and the recent Midwest Poultry Federation Convention.

It is anticipated that Proposition #12 will accelerate conversion of existing caged facilities to aviaries and also result in erection of new housing and even complexes especially in California in addition to producers shipping eggs and products to the state.

Accepting the legality of both the California proposition and the East coast counterparts, it is anticipated that more hens will have to be housed in systems other than conventional and colony cages to supply designated markets. Despite the passage of ballot legislation on both coasts, the prevailing sentiment in the industry is that even by 2025 at least 35 percent of producing hens will remain in some form of confinement. It is possible that many of these flocks will be held in enriched colony cages in states not banning confinement.

It is noted that enrichable cages were purchased by producers wishing to expand in the late 2000's as an insurance strategy in anticipation of passage of a Federal "Egg Bill" introduced as H.R. 3798, The Egg Products Amendment Act of 2012. The intention was to convert these installations to colonies by removal of partitions and installation of enrichments in accordance with anticipated legislation and the tacit acceptance of enriched colonies by the HSUS.

As of February 2019, 15.7 million hens were housed under the rules of the Certified Organic Program and 41.6 million as "cage-free" predominately barn-housed in either aviaries or on slat-and-litter floors. A total of 57.3 million hens in other than conventional cages represents 17.6 percent of a nominal U.S. flock of 325 million hens in production but in effect 25 percent of the shell-egg flock comprising approximately 225 million hens.


Significance of Backyard Flocks in HPAI Outbreak in France 2016-2017


The role of backyard flocks in the incidence and dissemination of highly pathogenic avian influenza (HPAI) was investigated subsequent to the extensive outbreak of H5N8 clade in Southwestern France. Approximately 480 farms were affected in a limited geographic area from late November 2016 to late March 2017. The initial case was presumed to have been infected by migratory birds. The outbreak was characterized by a low incidence rate in backyard flocks compared to commercial farms, reminiscent of the 2015 HPAI epornitic in the U.S.

The study involved 70 backyard flocks in the Gers Department. This administrative region reported 20 percent of the cases recorded with 55 percent of 96 cases diagnosed between December 11th 2016 and January 4th 2017. A retrospective serologic survey was carried out on

70 backyard flocks comprising 608 birds. Of all backyard flocks evaluated, 26 percent were seropositive for AI with 11 percent demonstrating antibodies against subtype H5. Backyard ducks showed a 41 percent seroprevalence against AI and 27 percent specifically against subtype H5. This may be compared to backyard flocks holding only chickens yielding a 19 percent seropositive rate against AI and with 4 percent showing antibodies against H5.

The authors noted that backyard flocks with a connection to commercial farms were likely to be infected suggesting the role of humans in transmission. The odds ratio associated with a link with commercial poultry was 5.8 for avian influenza and 20.5 for subtype H5, denoting deficiencies in biosecurity on commercial farms. The findings in France correspond with observations made in the Netherlands following an H7N7 epornitic. Following this outbreak it was demonstrated that infection in backyard flocks was essentially a spillover from commercial units.

The results in France should be related to the current situations involving velogenic viscerotropic Newcastle disease in Southern California. In the case of backyard flocks in France and the Netherlands, a limited number of birds in each location had minimal indirect contact with commercial poultry and represented a situation of minimal risk. In contrast in Southern California, the so-called "backyard" and "exhibition" flocks comprise game-fowl (fighting-cocks). These birds are by their purpose frequently moved and have direct contact with game-fowl from other locations. In addition there is frequent movement of owners and caretakers among and between flocks. This has contributed to the high incidence rate in San Bernardino and Riverside counties including four commercial units and extension from the three-county area to one case in each of Alameda County in Northern California and to Utah County, Utah.

Souvestre, M. et al Role of backyard flocks in transmission dynamics of highly pathogenic avian influenza A(H5N8) clade, France, 2016-2017 Emerging Infectious Diseases 25: 551-554 (2019)


The Market Value of the “Organic” Image Questioned.


Use of the term "organic" on labels is confined to products grown, reared and processed in accordance with the requirements of the National Organic Program (NOP) administered by the Agricultural Marketing Service of the USDA. In contrast the term "natural" is not regulated but motivates purchase decisions by 53 percent of consumers in a recent Label Insight survey of 1,000 shoppers.

Other label claims that attract consumers include "antibiotic-free" and "no-preservatives". Apparently the attractiveness of the "clean label" is directly proportional to age.

As with many narrow-focused surveys the results depend on how the questions are framed and the specific knowledge of the product attributes including the definition of any claim and an appreciation of the significance of an additive. Surveys have shown an almost total opposition to inclusion of "dihydroxy oxygen" (water) or DNA (ubiquitous) in food. The Label Insight study apparently made no attempt to consider trade-offs including how much consumers were willing to pay for products free of additives and antibiotics compared to generic alternatives. An obvious case in point is that a high proportion of consumers disfavor confining hens in cages but only a subset of the population are willing to pay a differential for non-confined housing systems including barns and aviaries.

If the NOP and the Organic Trade Association wish to enhance the image and hence volume of sales of USDA-Certified Organic products they will have to develop a brand approach for their category. This will require a check-off program with promotion analogous to the American Egg Board and other statutory commodity groups including milk, beef, and pork.

The fact that any manufacturer can apply the non-defined and vague term "natural" to labels and elicit a positive response suggests that the NOP with a disproportionately regulatory and production orientation, is neglecting promotion and consumer education. This calls into question the value of the USDA Certified Seal that incurs a considerable incremental cost of production. Perhaps in the case of eggs that are by nature "gluten-free" and in the U.S. are produced without "hormones and antibiotics" are in no way inferior with respect to nutritional value or quality than more expensive Certified Organic product with a price differential of up to $1.50 per dozen. There is a small segment among consumers who actively search for the organic label and are willing to pay a premium over generics. That segment appears to be small and static in size as denoted by the fact that hens under the Certified organic program have remained at approximately seven percent of the national shell-egg flock for close to a year.


FDA Reports on Recall Events


A March 19th joint statement from the Commissioner of the FDA, Dr. Scott Gottlieb and the Deputy Commissioner Frank Yiannas, outlined improvements in the FDA Food Safety Program based on the 2020 budget developed by the White House. It is noted that appropriations will ultimately have to be made by Congress, but food safety is high on the list of priorities since it is essentially non-partisan.

During fiscal 2017, the Center for Food Safety and Applied Nutrition responded to 794 recall events associated with microbial contamination and undeclared allergens and undertook responsibility for the recall of 3,600 products. During fiscal 2017 and 2018, the FDA Coordinated Outbreak Response and Evaluation Network dealt with 120 human food safety outbreak incidents annually.

Deputy Commissioner Yiannas has considerable experience in implementation of trace-back investigations with specific reference to a blockchain system introduced in his previous position with Walmart stores. Deficiencies in identifying the source of STEC contamination of Romaine lettuce responsible for extensive outbreaks denoted the need for digital records for tracking and tracing products. Experience gained with the E.coli 0157 outbreaks led to improvements in labeling including harvest date and location which has enhanced traceability.

FDA has introduced the Plant and Animal Biotechnology Innovation Action Plan. This will facilitate innovation in plant and animal biotechnology to improve the food safety component of the FDA public health mission. During the past two years, FDA has introduced Whole Genome Sequencing to determine the source of contaminated foods attributed to outbreaks of infection.

Although the FDA is placing an emphasis on food safety, fragmentation of responsibility and jurisdiction among a number of government departments, principally USDA and FDA suggest that a unified food safety agency, as in Europe, would best serve the interest of consumers.


Promotion of U.S. Eggs in India


The Indiana Corn Marketing Council in conjunction with USAPEEC recently conducted a promotional seminar for eggs in Chennai, capital of Tamil Nadu State. The theme of the seminar was "Unscramble the Nutrition Science on Eggs", applying the resources of the Egg Nutrition Center.

The benefits of investment in this event are questionable given the fact that India is self-sufficient in eggs and is in fact an exporter of both egg liquids and shell eggs.

Well-meaning promotions involving transfer of technology will only benefit India. This commentator was involved in broiler production seminars organized by the American Soybean Association during the 1990's. Initially the purpose was to promote broiler production with objective of increasing demand for U.S. soybeans. The flawed program was extended at the request of the host country to include processing technology. This effectively placed India in a position to compete with the U.S. in Asian markets.

Promotional activities in nations to which we export are beneficial. Programs such as those arranged in Mexico, Singapore, Hong Kong, Japan, Korea and at Middle East exhibitions enhance the image of our products to the detriment of potential competitors. By creating a U.S. Brand based on quality, consistency and service market share can be entrenched and expanded over the long term to the benefit of our industry.


Genetic Manipulation Produces Improved Rice Strain


Opponents of genetic engineering fail to appreciate the advantages associated with modification of plant genomes to produce strains with benefits to farmers, especially those in under-developed nations. Collaborators in a project involving Iowa State University, the University of California - Davis and INRA in France have developed a strain of rice that can reproduce without fertilization. This type of reproduction is referred to as "synthetic apomixis". This is the first commercial crop which expresses this characteristic, although as many as 500 wild plants are capable of producing seeds without fertilization.

The modification was achieved by identifying genes that regulate reproduction with specific reference to fertilization. Progeny of modified plants capable of apomixis are clones but are still capable of reproducing.

The rice plant which has been developed relieves farmers from having to purchase hybrid seed each planting season. The system will however require further development since the efficiency of asexual reproduction is currently only at 30 percent. Continuing work applying genome editing will eventually yield a rice plant which incorporates acceptable commercial attributes at minimal cost.

Opponents of GE should consider the benefits such as yield, resistance to drought, pests and enhanced nutrient content. It is clear that GM strains of cotton, corn, and soybeans can be produced with lower levels of pesticide and herbicide application and specific strains of bananas and rice with enhanced carotene levels have the potential to reduce blindness in the nations where GMO cultivars would have the most impact.

Zimbabwe has recently lifted a ban imposed on importation of GM seeds and commodities. It is expected that additional nations in sub-Saharan Africa will follow based on need and education.


Concern Over U.S. Economy


Expansion of the economy as measured by growth in the Gross Domestic Product is currently undergoing revision. The Federal Reserve Bank of New York now predicts a first-quarter 2019 growth rate of 1.1 percent, a marked reduction from previous forecasts. A bleaker outlook is based on weak industrial output that fell by 0.6 percent in January against an anticipated 0.1 percent gain. An unexpected 0.9 percent drop in manufacturing production occurred within the industrial production segment of the forecast.

It is evident that the effect of the 2017 tax cut is no longer apparent. Exports may be impacted by trade disputes and weakness in the E.U. occasioned in part by the inability of Italy to curb spending and uncertainty over Brexit.


Progress on Talks with China


Following the late January 2019 high-level meetings in Washington, Robert Lighthizer, U.S. Trade Representative and Secretary of the Treasury, Steven Mnuchin traveled to Beijing to continue trade talks. The Administration has indicated that it would consider delaying the imposition of increased tariffs beyond the March 1st deadline providing substantial progress is being made in discussions. China is obviously making some concessions with regard to purchases of capital goods and agricultural products to offset the negative trade balance with the U.S.

Following a meeting with the Commerce Ministry of China, the U.S. negotiating team engaged with Chinese Vice Premier Liu He followed by an audience with President Xi Jingping.

The reluctance of China to change structural considerations that are necessary to expand their economy will be the major obstruction to a comprehensive deal. These issues include support of state-owned enterprises, coercive technology transfer and industrial espionage all integrated into a national development plan plans.

It is hoped that the negotiators can finalize a memorandum of agreement on major issues that will pave the way for a meeting between the two Presidents. It is unlikely that this will take place in China following a scheduled visit to Vietnam by the President. A more likely venue will be the U.S. during March provided that the tariff rate on approximately $200 billion in imports remains at 10 percent.


Prospects for Passage of USMCA?


Despite the publicity accorded the signing ceremony for the USMCA during the G-20 Summit, none of the three nations involved have presented the Agreement to their respective legislatures for ratification. Given the composition of the House, prospects for passage without changes and concessions appear dim. In the event that Congress does not approve the USMCA, the White House has threatened to unilaterally withdraw from NAFTA.

In a recent editorial, The Wall Street Journal expressed the view that prominent legislators including Sherrod Brown (D-OH) and Rep Tim Ryan (D-OH) consider that the USMCA provides insufficient protection for U.S. workers. U.S. Trade Representative Robert Lighthizer pushed for higher wages for a proportion of workers in Mexico producing automobiles for the U.S. market. This was intended to placate Democratic members of the House and Senate who have since become emboldened to oppose the USMCA.

The conservative credentials of The Wall Street Journal are without question as a pro-business publication. They characterize a unilateral withdrawal from NAFTA as "political suicide" for the party in power unless there are sufficient votes to ratify USMCA.

CHICK-NEWS and EGG-NEWS have consistently stressed the importance of exports to both Canada and Mexico, without which prices and hence profitability of poultry would be eroded in the domestic market resulting in curtailed production and shuttered plants. As with many contentious issues which have surfaced in the past two years, it is hoped that reason will prevail and that a workable compromise will emerge. This will contribute to harmonious relations with our northern and southern neighbors to the benefit of the agricultural sector and specifically egg, turkey and broiler production.


9th Circuit Blocks San Francisco Beverage Label Ordinance


The full bench of the 9th U.S. Circuit Court of Appeals unanimously blocked a San Francisco ordinance requiring health-warning labels on sugar-containing beverages. The intent was to advise consumers that sodas containing sugar are injurious to health, contribute to obesity, diabetes and tooth decay. San Francisco imposed a tax on high-sugar containing beverages amounting to one cent per ounce, effective January 1, 20148.


The Court ruled that the warnings were contrary to plaintiff’s First Amendment rights by “chilling protective speech”. The Court considered that beverage manufacturers would suffer irreparable harm if the law was implemented. A three-judge panel set aside the law in 2017 stating that it “unfairly targeted one group of products.” The city of San Francisco appealed the decision to the full bench of the 9th Circuit.

The American Beverage Association has operated under a preliminary injunction deferring the labeling law since 2015.


The decision of the 9th Circuit that frequently favors consumers, the environment and public authorities, continues precedents relating to advertising claims as “speech”. The verdict is potentially significant to the egg-production industry since is is possible that in the future that some jurisdiction might impose warning labels on eggs based on saturated fat or cholesterol. Although well meaning, mandatory warnings in the absence of clear scientific evidence are deleterious and represent an extension of the “nanny state”.


Critique of National Bioengineered Food Disclosure Standard


Dr. Henry J. Miller a physician-scientist and the Founding Director of the FDA Office of Biotechnology recently authored a commentary This Must be the Worst Regulation Ever dealing with the labeling requirements for bioengineered (GMO) foods. Co-authored with Drew Kershen an Emeritus Professor of Law, the item appeared this week in The Wall Street Journal as an example of creative confusion.

The National Bioengineered Food Disclosure Standard (NBFDS) requires labeling of bioengineered food if it "contains detectable genetically modified material" The Rule will bear a cost ranging from $569 million to $3.9 billion to implement and an in perpetuity annual cost of between $65 million to $234 million applying a three percent discount rate.

Miller and Kershen correctly point out that there will be no benefit from the expenditure of public funds for either consumers or the environment as the label requirement will be voluntary. The NBFDS regulation framed in terms of the 2016 law effectively preempted individual states from imposing their own labeling standards for bioengineered food. A Vermont law mandating label disclosure of milk and products from cows treated with BST, was struck down by the Second U. S. Circuit Court of Appeals following an action by dairy processors. The Court ruled that if there was no demonstrable health hazard or other substantial government concern, manufacturers can not be forced to disclose content.

Based on the complexity of regulations framed in terms of the NBFDS and the inevitability of litigation Miller and Kershen justifiably called for a repeal of the enabling legislation and replacement with a law restricting the ability of states to require GMO products to be labeled., a position endorsed by EGG-NEWS


Acquiring Foodborne Infection from Home-Prepared Meals


A recent survey conducted in Scotland demonstrated that 40 percent of respondents who suffered an episode of foodborne illness during the previous year acquired the infection from a home-cooked meal.  This represents approximately 17,000 cases of foodborne illness annually in Scotland.  The survey was conducted during December and involved 1,000 adults.


Home food preparation practices which contributed to infection included ignoring “use by” dates, failure to wash chopping boards, consumption of undercooked chicken and turkey especially when not using a thermometer.


Health authorities in Scotland have now intensified their “Kitchen Crimes” food safety campaign emphasizing 20 safety-related precautions.  The initial “Kitchen Crimes” campaign was apparently successful based on responses by consumers who were exposed to publicity and changed their cooking practices.


It would be interesting to determine the incidence rate of foodborne infection from home cooking.  Generally foodborne outbreaks involve a number of cases over a limited time resulting in capture by the FoodNet database or posted on <>.  Foodborne infection associated with restaurants, QSRs and institutions are usually subject to some form of microbiological confirmation of the diagnosis especially if patients are hospitalized. 

Unfortunately family-confined outbreaks are invariably missed due to small numbers involved.  Regrettably mild home-associated cases are not reported other than infection with highly pathogenic organisms such as Listeria, a virulent Salmonella or an STEC is involved. 


This is the basis of the CDC using a multiplication factor when evaluating the number of cases of salmonellosis based on diagnosed and confirmed cases.  The fact that CDC regional laboratories are now using PCR and have the advantages of almost real-time information from FoodNet allows recognition of limited outbreaks.  A case in point was a Salmonella Braenderup outbreak during late 2017 and early 2018 that involved less than 60 cases over a six-month period in a region comprising mid-Atlantic and northeast states.


California Ban on Foie Gras Impacts Producers in France


Failure by the Supreme Court to hear a challenge to the 2012 California statute banning production and sale of foie gras has not only ended the unpleasant and cruel practice in the state but has eliminated a market for farmers in France. The practice of “gavage feeding” an euphemism for forcing feed in semi-liquid form through a metal tube into the distended proventriculus of restrained geese, has been banned in Denmark, the U.K., Germany, Finland, Argentina and Australia among other nations.


Even in France, that counts foie gras as part of their gastronomic heritage, renowned chefs have spurned the product, as have some supermarket chains. France produces seventy percent of the World’s production and is slowly building back the market lost in Japan, the major customer, after embargos as a result of AI in 2016 and 2017.


Continuation of the inhumane practice of gavage feeding to produce what is essentially a pathological fat infiltration of the liver would be detrimental to the overall image of poultry production. To claim that this sub-section of the industry is producing a “product conforming to hygiene regulations” ignores the overwhelming welfare consideration of force-feeding to produce an unhealthy product.


It is axiomatic that trends and laws emerging in California ultimately spread eastward. It is predicted that state laws will soon be enacted by legislators and by ballot on the East coast. Elimination of Foie Gras production, a medieval practice, would benefit both the health of geese and consumers. Producers in France should consider another line of work and not rely on Japan. On second thought is their main customer now the only remaining nation that slaughters whales and dolphins for food?


Multinational Agribusiness Companies Losing Significance in World Trade


For more than a century, four multinational commodity and grain traders have dominated agriculture as middlemen between producers and consumers. The four comprising ADM, Bunge, Cargill and Louis Dreyfus referred to as ABCD, have brokered a high proportion of the World’s major commodities. This has been achieved through superior market intelligence, storage infrastructure and transport facilities including harbor installations and bulk vessels.

According to an insightful article in the December 14th edition of The Economist, the dominance of ABCD has been eroded over the past decade. Cofco was established by the Government of China to source and supply grains essentially from Latin America to producers in their nation. Glencore Agriculture emerged as a major competitor to ABCD backed by parent company Glencore, involved in multinational mining. Glencore was a potential acquirer of Bunge in 2017. Olam was established by a state-funded Singapore investment group and is active in brokering transactions between Africa and Asia.

The problem faced by international commodity traders is exemplified by the decline in profitability of Bunge that recently announced replacement of both the Chairman and the CEO. According to The Economist article, total commodity sales generated by ABCD declined from $350 billion in 2013 to $260 billion in 2017. The relevance of the four enterprises was enhanced by the tariff war with China. The advent of disruption in orderly marketing commencing in June resulted in a scramble to source alternatives to U.S. soybeans and the countervailing need for the U.S. to find new customers. The market price of Brazilian soybeans soared reaching a peak in October with a concurrent depression in U.S. prices which stimulated trade. By early December, with the end of the export season from the Southern Hemisphere, the world market price for soybeans in the U.S. and Brazil had converged close to $350 per ton. In the interim, razor-thin margins on trading increased, albeit fractionally, to improve profitability.

Companies such as ADM and Cargill have diversified with the former involved in ethanol production and the latter deriving two thirds of revenue from upstream activities including poultry in Latin America, the E.U., Asia and Central America. In addition Cargill is heavily involved in production of animal feed and further-processing of commodities.

Multinational commodity traders such as ABCD and their clones are a necessary component of the food supply chain. Going forward, their dominance will decline possibly representing an advantage for consumers in developing nations.


Pew Charitable Trust Still Opposing Antibiotics


The Pew Charitable Trust has partnered with the Farm Foundation to establish “effective stewardship” to limit the use of antibiotics in livestock production. Organizations such as the Pew Charitable Trust are simply reiterating established FDA restrictions on the use of antibiotics to  create the impression that they are driving the trend.

The stewardship framework has ensnared pharmaceutical companies such as Elanco Animal Health and Zoetis, producer organizations including the National Milk Producers Federation, the National Pork Board, the National Pork Producers Council and the National Turkey Federation. Producers involved in the framework include Smithfield Foods Inc., Tyson Foods and Jennie-O Turkey Store. Customers for the livestock industry affiliated with the framework include McDonald’s Corp. and Walmart.

The Director of the Pew Charitable Trust Antibiotic Resistance project, Cathy Talkington stated “Antibiotic stewardship is essential to protect human and animal health, ensuring food safety and security and combatting antibiotic resistance.” She added “The organizations who are part of this dialog represent the food animal supply chain from farm to table and they recognize the need for meaningful stewardship programs that everyone can understand and trust.”

The antibiotic stewardship framework comprises 15 components dealing with treatment, record-keeping and “culture of continuous improvement and commitment to antibiotic stewardship”. There is nothing in the framework which deviates from accepted FDA regulations and professional veterinary ethics.

It is questioned whether the Pew Charitable Trust is sincere in its objective of reducing resistance to antibiotics or whether the issue is not a thinly veiled attempt to opposed intensive livestock production under the guise of public health.


Campbell Soup Company Confirms Mark Clouse as CEO


Mark Clouse a twenty-year veteran of Pinnacle Foods and Kraft Foods was appointed as the CEO of Campbell Soup Company on December 20th following a six-month search for a replacement for Denise Morrison. Clouse is due to commence duties on January 22nd. The appointment was contingent on an agreement between activist investment group, Third Point LLC and the family-dominated Board of Campbell Soup.

As noted previously, Mark Clouse is a “company man” with experience in generating sales growth for old packaged-food brands including Bird’s Eye and Duncan Hines. Campbell clearly needs a turnaround specialist with a strong entrepreneurial track record. This however would not be consistent with the staid Board of socialite amateurs stuck in a 1960’s time warp.

It is considered significant that Conagra Brands attributed lower earnings and profit to their Pinnacle Foods acquisition that closed one month before the release of results for their 2nd quarter. Although Conagra revenue rose 9.7 percent to $2.38 billion, it missed consensus estimates of $2.41 billion. Conagra did however beat on EPS with $0.67 per share excluding items against a Street estimate of $0.55. Shares dived 17 percent after the release to a 52-week low mainly on a downward adjustment in projected FY2019 earnings from $2.11 to a range of $2.03 to $2.08. In a conference call, Conagra opined that the challenges presented by the Pinnacle Foods acquisition were “largely self-inflicted due to sub-par innovation and executional missteps.”

The success of Mark Clouse at Campbell Soup will depend on whether he in fact has entrepreneurial flair and whether the Board will allow him to exercise innovation which may conflict with company culture. If Clouse continues on the same conservative path or is restricted from innovation, Campbell will continue on a downward spiral and will either be an acquisition or will be dismembered. A sad outcome for a well-established food company that tried to move too quickly into ‘fresh and natural’ incurring immense debt and then in a funk reverting to a stand-fast position based on traditional but dated products.


Update on Romaine Lettuce E. Coli Infection


The U.S. Food and Drug Administration issued a statement on November 26th concerning the multistate outbreak of E. Coli O157:H7 attributed to romaine lettuce. As of this date, 43 confirmed cases have been documented in 12 states with most recent being October 31st.  To date 22 cases have been diagnosed in Canada.


On November 20th CDC advised consumers not to consume romaine lettuce based on the fact that the probable source had not been identified. As a precaution the green produce industry complied with a FDA request to withdrawn romaine lettuce and QSRs and supermarkets disposed of product on their shelves.


Traceback investigations suggest that the implicated lettuce was cultivated along the Central Coast and the Northern growing regions of California, with product harvested during late summer.

The FDA is attempting to narrow the location which is responsible for the infection.  As of mid-November, harvesting of romaine lettuce from the Central Coast region has ended.  Cultivation has now shifted to the Imperial Valley and the Yuma Valley of California.  During winter romaine lettuce is also imported from Mexico and some cultivation occurs in Florida.  It is evident that hydroponic romaine lettuce and greenhouse product is not involved.


The FDA considers that the recommendation to destroy available stocks of romaine lettuce issued during mid-November has removed potentially contaminated product from the market.  The FDA recommended that major producers agree to participate in a labeling program to identify the harvest region and date of pack.  This is confirmed in an official FDA update stating - based on discussions with major producers and distributors, Romaine lettuce entering the market will now be labeled with the harvest location and the harvest date.  Romaine lettuce entering the market can also be labeled as being hydroponically or greenhouse-grown.  Product without this information should not be consumed.


The FDA statement concluded with comments by Commissioner Dr. Scott Gottleib, “We hope that growers, processors, distributors and retailers will join us in our effort to protect consumers by applying labeling recommendations to their products.  We remain committed to identifying ways to decrease the incidence and impact of food borne illness outbreaks, and will continue to provide updates on our investigation and changes to our advice on romaine lettuce as more information becomes available.”

Labeling will be useful in traceback investigations but will do nothing to prevent foodborne Salmonella or E.coli infection if produce is contaminated in fields or through cross-infection in packing plants. The only sure method of ensuring that green produce is free of bacterial pathogens is to introduce electron beam treatment as no other effective method of inactivating bacteria is available.


Agreement on Composition of Campbell Soup Company Board


The contentious and acrimonious conflict over the composition of the Board of Campbell Soup Company and Third Point LLC has been resolved by the addition of two independent directors proposed by Third Point.  The incumbents will be Sarah Hofstetter, President of Global Information an analytics company and Kurt Schmidt former director and CEO of Blue Buffalo. 


In terms of the agreement Third Point LLC will participate in the recruitment of a CEO and will present views at two meeting of the Board over the next 12-months.  Third Point LLC has also agreed to a 12-month standstill and will dismiss litigation against Campbell Soup.  A third director will be appointed in May 2019. 


Keith McLoughlin interim president and CEO of Campbell Soup stated, “We are pleased to have reached an agreement with Third Point that is in the best interest of Campbell Shareholders and we look forward to welcoming both Sarah and Kurt to our Board of Directors.”  He added, “We will continue to maintain an active and productive dialogue with all our Shareholders including Third Point as we execute our strategic plan and build a stronger and more focused company that creates long-term value for shareholders.”


Daniel S. Loeb, CEO of Third Point LLC stated, “Our Company looks forward to working collaboratively with Campbell to improve value for all Shareholders at this important time for the Company.”


The conflict relates to suboptimal performance by Campbell Soup Company which has endured a YTD 17 percent decline in share price. This is ascribed by minority shareholders to inappropriate purchase of companies by the previous CEO, Denise M. Morrison who promoted an “organic and natural” orientation for the company which proved financially disastrous.


Third Point which owns 6 percent of the equity in Campbell Soup Company has made common cause with family shareholder George Strawbridge Jr., splitting the solidarity of family-related members of the Board who collectively control 41 percent of the company.


It appears that the strategic plan crafted by the Board, emphasizing traditional products and divesting certain assets will restore return on equity and provide for future growth in a highly competitive market.  Third Point LLC had advocated for either outright sale of the company or dismemberment. Both alternatives were opposed by Family-directors.



GUEST COMMENTARY One in Ten is Too Many


One in ten are great odds if playing the lottery or entering a raffle. These are devastating odds when representing the chances of developing severe complications of post-diarrheal hemolytic uremic syndrome (HUS) after exposure to Shiga-toxin producing E. coli (STEC). These are absolutely unacceptable odds if this is your child, a family member, or for a physician, a patient.

Acute and chronic complications that are life-changing after consuming a salad is too high a high price to pay for consuming fruits and vegetables. Incidence of HUS follows the seasonal fluctuation of E coli O157:H7 infection, which frequently peaks in the summer months in the northern hemisphere. While a consumer can cook meat thoroughly, and wash hands after using the restroom or changing diapers, before and after preparing or eating food, and after contact with animals, there is little that can be done to prevent exposure to foodborne STEC on non-cooked food.

Application of ionizing radiation using available and inexpensive electron-beam technology to eradicate foodborne pathogens including STEC can prevent infections and consequently reduce the risk for acquiring post-diarrheal HUS. Similar to heat treatment used to pasteurize milk or to can foods, irradiation is a physical treatment with the potential to eliminate pathogens such as STEC from fruits, vegetables and meat. Irradiation of foods will reduce the odds of foodborne infection from one in ten to zero.

As a pediatric infectious disease physician who has helped families after infection with STEC and who has cared for too many children with HUS, I see no alternative. For a child, food irradiation would mean the difference between a healthy life and one tethered to dialysis awaiting a renal transplant.

Dr. Andrea L. Shane, MD MPH MSc is an Associate Professor of Pediatrics and Interim Clinical Chief of the Division of Pediatric Infectious Diseases and Marcus Professor of Hospital Epidemiology and Infection Control, Emory University School of Medicine and Children’s Healthcare of Atlanta.


California Adopts Proposition #12


On Tuesday November 6th voters approved California Proposition #12 by a margin of 61 percent to 39 percent, effectively repealing Proposition #2 of 2008.  Effective 2020 Proposition #12 will ban confinement of egg- laying hens in cages and mandates at least 1 square foot of usable floor space per hen.  The Proposition incorporated the United Egg Producers’ 2017 Cage-Free Guidelines which define cage-free housing “as areas that provide 1.0 to 1.5 square foot of usable floor space per hen and allowing hens to move around inside the area”.


Proposition #12 was promoted by the Humane Society of the United States and an in-state organization, Prevent Cruelty California.  Proponents raised $13.1 million with a $4 million contribution from the Open Philanthropy Action Fund.


The proposal was opposed by the Humane Farming Association, People for the Ethical Treatment of Animals, and Friends of Animals who collectively regarded the proposal as not being sufficiently “animal-friendly” allowing barn and aviary systems.  Industry groups opposing the proposition included the Association of California Egg Farmers and the National Pork Producers’ Council.


California Proposition #2 in 2008 banned confinement of pregnant sows, calves raised for veal and hens under conditions that did not allow them “to turn around freely, lie down, stand up and fully extend their limbs”.  Considerable confusion as to the interpretation of the wording of Proposition #2 resulted in lawsuits with the Proposition sustained.  Effective 2014 any eggs marketed in California should have been derived from flocks housed in accordance with Proposition #2.


The official ballot summary for Proposition #12 included:


  • Establishes new minimum space requirements for confining veal calves, breeding pig and egg-laying hens
  • Requires egg-laying hens to be raised in cage-free environment after December
    31st, 2021
  • Prohibits certain commercial sales of specified meat and egg products derived from animals confined in non-complying facilities
  • Defines sales violations as unfair competition
  • Creates good-faith defense for sellers relying on written certification by suppliers that meat and egg products comply with new confinement standards.
  • Requires the state of California to issue implementing regulations. California Proposition #12 is termed the Prevention of Cruelty to Farm Animals Act.

The proposition as adopted would effectively ban enriched colony modules which were introduced as an alternative to conventional cages following passage of proposition #2 in 2008.  After adoption of Proposition #2 California producers reduced floor stocking density in conventional cages by removing partitions from conventional cages. This expedient will obviously not be permitted under Proposition #12.
The economic impact of Proposition #12 ranges from the HSUS estimate of “a penny per egg” to as much as $1 per dozen based on studies conducted by agricultural economists at the University of California-Davis.
Erecting aviary facilities to house hens costs in the region of $30 to $35 depending on selection of equipment and housing representing a considerable capital investment.  Currently California houses 14 million laying hens out of a U.S. total of approximately 320 million on commercial farms with over 30,000 birds.  California is not self-sufficient in eggs and relies on shipments from the Midwest states and more recently aviary units erected in Arizona.
At the present time there are 57.2 million non-caged laying hens representing 17 percent of a nominal 320 million U.S. flock in production but 25.4 percent of a presumed flock of 225 million housed for the shell-egg market.
Since the wording of Proposition #12 refers to products, it is presumed that hens producing eggs which are converted into pasteurized liquids will also have to conform to the statutory housing requirements.
The State of California has estimated an annual cost of $10 million to administer the Animal Welfare law but consumers will ultimately bear the cost of enhanced housing.  At the beginning of November, Midwest prices for generic Large delivered to stores range from $1.13 to 1.15 per dozen.  The price in Southern California for the same product was $1.51 to 1.58 per dozen.  Midwest cage-free eggs into a packing plant during October averaged $1.59 per dozen confirming the differential based on regional cost factors and housing. Evidently the “Pacelle Tax” has now been entrenched for all consumers of eggs and egg-products in California.


McCain Foods Management Ignored Positive Listeria Assays


Following trace-back to the Colton, California plant owned by McCain Foods of Canada, the U.S. FDA conducted a detailed audit of procedures to monitor for the presence of pathogenic bacteria. It was determined that for 30 months, management of the Colton plant, packing leafy vegetables ignored presumptive positive Listeria and Salmonella assays.

It is standard procedure to hold batches which yield a presumptive positive until completion of confirmatory assays. The fact that management released product knowingly represents profound disregard for public health and capricious business practice.

In the event, FDA issued a Class II recall of all products shipped after January 1st 2016. Product was shipped through North America and exported to China and Korea. The voluntary recall issued on October 13th for recently processed items has resulted in a chain of secondary recalls by manufacturers of wraps, ready-to-eat foods and salads distributed by Walmart, Trader Joe’s, Whole Foods Market, 7-Eleven and others.

The examples of the Peanut Corporation of America and the Bluebell Creamery should have been sufficient warning for the management of the Colton plant management to have responded appropriately to preliminary isolation of either Salmonella or Listeria. Apart from embargoing suspect product, surveillance assays should have been conducted to determine the source of infection in the plant with appropriate corrective action. Given the allegations arising from the FDA audit, it is highly likely that criminal charges will be brought against management and McCain Foods will face civil suits to compensate customers including manufacturers and in turn the retailers.

It is questionable whether Colton Foods was simply a “rogue plant” or whether the corporate culture at McCain Foods led to decisions which placed profit ahead of safety. The only redeeming feature of the episode is that no outbreaks of either salmonellosis or listeriosis have been traced back to the plant.


Omnivores, Vegetarians and Vegans


Vegans tend to be a vociferous minority frequently proselytizing consumers to their lifestyle. The question arises as to the proportion in the U.S. population that are respectively vegans and vegetarians. A 2017 study conducted by Nielsen yielded a value of three percent of the population regarding themselves as vegans with six percent as vegetarians. Concurrently, Gallup and Harris found three percent of the population self-characterizing as vegan during the period 2012 to 2018.

These figures would appear to be high in relation to a 2016 study in Britain which showed that only one percent of those surveyed never ate meat or animal products. The U.K. value is closer to studies conducted by Faunalytics which ascertained that only 0.5 percent of the U.S. population are true vegans with additional 3 to 4 percent as vegetarians.

Obviously the discrepancy between polls and detailed surveys relates to definition. Vegans exclude all meat, fish, dairy and egg products from their diets. Vegetarians generally eschew meat but consume eggs and dairy products. Flexitarians represent a class of consumers who move between omnivorous and vegetable-based diets.

The low proportion of true vegans and a fairly stable number of vegetarians belies the increase in consumption of food products designated “vegetarian”. Obviously consumers are purchasing vegetarian foods which are incorporated in a conventional omnivorous diet. The motivation for this practice has yet to be defined although companies such as Nestle which estimates that only a quarter of consumers purchasing vegetarian meals fall strictly into this category. Obviously some consumers classified as flexitarians consider that some welfare or sustainability objectives are satisfied by eating an occasional vegetarian meal, thereby, contributing to a feeling of self-satisfaction.

The subject of veganism reviewed by The Economist on October 13th characterizes responses elicited by surveys as “aspirational self-deception, terminological inexactitude or simply hypocrisy”.

In assessing the environmental impact of egg production, the carbon dioxide equivalent emission per ton of protein from eggs is approximately 25,000 tons per ton of protein compared to beef at 275,000 tons of carbon dioxide per ton of protein.


Misleading Technology Hype


During recent months, two completely diverse areas of technology have been hyped by journalists as solutions to current problems. The lack of journalistic skepticism and realism creates false hope for breakthroughs and major shifts in the production and distribution of food.


The first hype relates to self-driving trucks to alleviate a shortage of drivers.  The technology is experimental and unproven.  There is no legislation to control autonomous vehicles. Small SUVs appear to function well on test tracks but there have been too many failures under practical road conditions.  Despite articles to the contrary, autonomous semis will not resolve the driver shortage. 


The second area which is receiving inordinate attention relates to cell-cultured protein.

Again, there has been considerable progress at the laboratory level.  Startups have attracted funding but no company has yet shown that it is possible to produce any product in quantity or at a cost which would even be remotely competitive with conventional pork, beef and chicken.  The federal government is only now attempting to establish jurisdiction over cell-cultured meat and there is considerable debate as to how the product, even if it becomes commercially viable will positioned in the marketplace.


Let’s start being practical and reject pie-in-the-sky solutions which may be realized by mid-century but offer no logistical or financial advantage in the short or intermediate term.


Roundup® Verdict Reversed


In September, a plaintiff alleged that exposure to Roundup® (glyphosate) manufactured by Monsanto, now owned by Bayer AG was responsible for his diagnosis of non-Hodgkin lymphoma. The judgement of $289 million later reduced to $39 million, was the first in the series of shakedown lawsuits which lowered Bayer stock price by 20 percent.


Subsequently Judge Suzanne Bolanos granted a motion by Bayer which claimed that there was insufficient evidence to prove the company intended to harm the plaintiff and that the sum awarded was not justified.


Glyphosate has entered the cross-hairs of both the tort bar and environmentalists opposed in principle to GMO technology.  It is clear that if glyphosate were to be banned, the advantages associated with Roundup®-resistant corn and soybeans would be invalidated, representing a major restraint to planting GM cultivars.


In 2015, the International Agency for Research on Cancer, a subsidiary of the World Health Organization classified glyphosate as a “potential carcinogenic”.  Subsequent protests by responsible environmental toxicologists affiliated to regulatory agencies, chemical companies and universities resulted in a retraction of the adverse classification.  It was disclosed that a contributor to the IARC review on which the “potential carcinogen” categorization was made had a conflict of interest in that he was concurrently serving as an expert for plaintiffs’ attorneys in litigation against Monsanto over glyphosate.


Monsanto markets approximately $11 billion in Roundup®- ready seed used extensively in North America and other nations with financial benefits to farmers and the product represents environmental advantages.


The ruling in California setting aside the jury verdict is the first step in reasserting scientific certainty in the face of avaricious lawyers and anti-GMO activists. Monsanto faces probably as many as 8,000 cases worldwide claiming an adverse effect from exposure. On February 25th 2019 a case (3:16-md-02741-vc) involving a class of 580 plaintiffs will be tried in San Francisco with others in Montana and Missouri.


Over-Production Impacts Profitability in the Dairy Industry


Despite the prospect of increased access to the dairy market in Canada if the USMCA is ratified in 2019, U.S. producers are impacted by a surfeit of milk and dairy products.  It is calculated that 172 dairy farms in New York state ceased milking during the past 12 months representing 7.5 percent of the state’s production.  Michigan lost 120 farms or 20 percent of production over the past four years.  Globally milk production has increased by 2.3 percent in the face of decreased demand.  The market for dairy products including liquids has been eroded by milk substitutes and changing taste in beverages.


According to the Farm and Dairy, October 4th edition, Dianne Shoemaker posed a number of questions including the prospects for a turnaround in prices and the extent to which profitability will be restored.  Shoemaker states, “We simply have too many cows.”  She cited USDA data in August, showing 9.4 million dairy cows in the U.S. This exceeds the consensus requirement of 9.0 million producing animals.  An excess of milk is reflected in low prices.  EGG-NEWS has previously commented on dairy farmers abandoning organic production based on the low margins resulting from decreased demand for this expensive category.


The dairy industry provides a valuable lesson for egg producers.  Over-production leads to a depression in unit revenue.  Fortunately, only one month in 2018 has produced a USDA- benchmark price below the average cost of production, although margins for shell eggs have been variable and seasonal.  Extreme competition has prevented producers from generating cash reserves including depreciation. Investment of up to $35 per hen will be necessary to replace existing cage housing with modern but expensive alternative aviaries or floor systems.


Petition to Prohibit Non-GMO Label Claims


An advocacy organization the Information Technology and Innovation Foundation has filed a petition with the U.S. FDA to prohibit the use of specific labeling on consumer foods and goods indicating that products are derived from non-GMO ingredients.


The Foundation claims that the butterfly logo franchised by the Non-GMO Project represents a false and misleading implication that conventional products are in some way healthier than GMO or bioengineered products.  Dr. Val Giddings, senior fellow at the Foundation stated, “The Non-GMO Project Butterfly Campaign deceives consumers through false and misleading claims about foods, food ingredients, and their health and safety characteristics.  She added, “The campaign constitutes misbranding under the law, and the FDA should act in the best interest of consumers and protect them, as the law demands, against the confusion spread by these false claims.”


In support of the petition, the Foundation cites the National Academy of Sciences and other scientific organizations that have found no deleterious effects from consumption of ingredients and food derived from GMO technology.  The Foundation also points out that the Non-GMO Project butterfly logo is applied to many products for which there are no bioengineered counterparts.


It is anticipated that the Non-GMO Project which has benefited financially from selling their logo will contest the petition since it strikes at the heart of their business which is based on a foundation of unfounded fear and anxiety.


The Safe and Accurate Food Labeling Act of 2015 introduced by Representative Mike Pompeo (R-KS) was reintroduced into the House of Representatives and allows for voluntary labeling as to GMO content.  The Bill had the support of the Grocery Manufacturers Association which led to disaffection by a number of member companies favoring “fresh and natural” including Campbell Soup Company under the leadership of now displaced CEO Denise Morrison.  The Bill was also supported by many commodity groups including the American Soybean Association and the International Dairy Foods Association.


Opposition to the petition and presumably to the current FDA petition will be based on the canard of the “public right to know”.


"Endless Buffet for Bald Eagles" Case Resolved


The late Senator William Proxmire (D-WI) who passed away in 2005, was renowned for his award of the Golden Fleece to any Federal agency or government official or contractor wasting taxpayer money and resources. If he were with us today he would most certainly consider the ruling of the National Appeals Division of the Farm Service Agency a worthy recipient.  This body recently awarded $2.2 million to White Oak Pastures in compensation for the loss of 160,000 free-range chickens over a number of years from predation by bald eagles.  Adapting from their traditional hunting practices which include stealing fish from ospreys and occasionally dipping their talons into water, our national symbol has adapted to lifting chicken from pasture.  There are approximately 75 resident bald eagles on and around the White Oak Pastures Farm extending over 3,200 acres.  The ruling has created a precedent which would allow compensation for the loss and destruction of poultry by protected raptors.


Will Harris owner of White Oak Pastures stated “We are extremely grateful that the National Appeals Division ruled in our favor and recognized our right to fair compensation for our losses.”  He added, “We are proud to be a working farm committed to doing what is right for the land and our animals and appreciate the recognition that the FSA acted improperly when it denied our claims.”


Pasture ranged hens are presumed to be “happier” than hens confined to barns.  Given a random sample test in North Carolina which showed that up to 50 percent of hen populations die as a result of predation and disease on pasture and that White Oak Pastures can document the loss of 160,000 chickens suggest that free-range production is not as welfare-friendly as confinement in barns. 


Chickens are derived from jungle fowl which have as their natural habitat tropical forest which provide a canopy to protect them from raptors.  Commercial hens are subject to stress when forced to access pastures without the benefit of cover from foliage or shade cloth.  This is evidenced by flocks preferring to remain in the proximity of their barns effectively congregating on soil and mud rather than grass as portrayed in the social media and on carton images.


Hens are a defenseless source of food for both raptors and vermin.  The fox population in Germany soared following introduction of free-range egg production.  Free-range systems can be regarded as less than ideal with respect to welfare, sustainability and egg safety.


Environmental Impact of Florence on the NC Hog Industry.


Lessons learned from the 1999 Hurricane Floyd were applied in the days leading up to the landfall of Hurricane Florence. According to a statement issued by the North Carolina Pork Council losses amounted to 5,500 hogs out of a population of 8.9 million on 2,100 farms in the State. This compares to 21,000 hogs drowned or destroyed in the 1999 event.

With respect to potential storm damage to waste lagoons The NC Pork Council noted “We are currently aware of the following impacts:
•One lagoon breach occurred on a small farm in Duplin County. An on-site inspection showed that solids remained in the lagoon. The roof of an empty barn on the farm was also damaged.
•Three lagoons with other structural damage

•Nine lagoons have been inundated by flood waters.
•Thirteen lagoons are at capacity due to rainfall and appear to have overtopped. Others are at capacity and efforts are being taken to respond within state regulations and guidance.

Critics of the North Carolina hog industry, including Dr. Mark Sobsey of the Environmental Science Department at the University of North Carolina, Chapel Hill, expressed skepticism in the low numbers of lagoons impacted. In a statement on Monday 16th September he noted that in the severely affected counties, elevation is “barely above sea level.” Sobsey commented “I’d like to see some evidence to show that somehow swine farms and lagoons have been spared as everything else fell under water.” He is welcome to transition from his ivory tower and journey eastward to observe conditions firsthand. Maybe even help with cleanup.


Opposition to Proposition 12


Proposed California Proposition 12 can be regarded as a successor to Proposition 2 enacted by ballot in 2008 by a two-to-one majority.  The wording of Proposition 2 as adopted was vague and the interpretation was subject to extensive litigation. Various courts in California have however ruled on the constitutionality of Proposition 2. 


To establish a level playing field for in-state producers who have a 25 cent per dozen disadvantage in feed cost against the Midwest, the California legislature enacted AB1437 effective January 2015 which required that eggs shipped to the state would have to be derived from hens housed under conditions conforming to regulations issued by the California Department of Agriculture and Food complying with Proposition 2.  The policies of California regarding minimum space requirements have been successively challenged by the Attorneys General of Midwest egg-producing states supplying California, claiming that the California statute restricts interstate commerce and is therefore ultra vires. The courts have yet to rule on the issue but adverse decisions handed down were based on technicalities establishing that the Plaintiffs had no standing in their attempt to overturn the California legislation.


The Association of California Egg Farmers is opposing Proposition 12 claiming:


  • The wording is ambiguous and lacks details
  • The Proposition is unnecessary for egg production and unenforceable for meat production
  • The Proposition will increase the cost of eggs to consumers.
    It is estimated that egg producers in California have spent in excess of $250 million to comply with Proposition 2.  In the short term to provide adequate space, partitions in conventional cages were removed to reduce stocking density but at the expense of farm capacity.  Individual producers have erected housing which complies with Proposition 2 and presumably Proposition 12 in the form of multi-tier aviary units and floor housing on either slats or litter.
    Irrespective of whether or not the Association of California Egg Farmers opposes Proposition 12, the outcome is predictable and the Proposition will effectively achieve what was intended with Proposition 2, namely the elimination of confined cage housing.


Newcastle Disease in Southern California


With no sign of resolution, the extended outbreak of Newcastle disease in Southern California has reached approximately 130 cases.  Outbreaks have been confirmed in San Bernardino, Riverside, Los Angeles and Ventura Counties.


Since the initial outbreak in mid-May, authorities in California and the USDA-APHIS have had sufficient time to initiate and complete an epidemiologic evaluation to determine the source of infection, the rate of spread and to provide an indication of their intended action to firstly control and secondly eradicate the disease before commercial flocks are affected. The poultry industry in California would benefit from a detailed report in mid-2019 but appropriate epidemiologic information are needed now.


It is understood that about 9,000 backyard and exhibition birds have been euthanized and premises have been quarantined.  The incidence rate is increasing, confirming that there is effectively no control.  Without knowing the specific epidemiologic factors associated with the 2018 outbreak, resolution of the problem in the intermediate term is unlikely.


As a simple recommendation, owners should be urged to effectively vaccinate their backyard flocks as this will convert a presumably susceptible population to a level of immunity that will inhibit dissemination of virus by whatever means. It is emphasized that vaccination should be implemented by owners and not by state or federal workers since this will result in a repetition of the 1979 END outbreak when flocks broke with Newcastle disease approximately seven days after a mandatory visit to vaccinate birds.


The California Department of Food and Agriculture has issued an advisory to flock owners concerning quarantine of new birds for thirty days.  Appropriate action should be to cease acquiring or selling birds under any circumstances with strict quarantine of flocks.  The stated recommendation to “restrict contact with wild birds, rodents or insects which carry disease organisms” appears to be great on paper but impossible to implement given that many of the flocks are on pasture (or in reality, mud). The suggestion to purchase feed from “clean and dependable supplier” is also applicable although Newcastle disease is not generally regarded as being transmitted through feed despite individual cases in the U.K. during the 1980’s with pigeon paramyxovirus.  If feed were involved in transmission of Newcastle disease in the California outbreak, there would probably be more cases over a shorter time period.


Again, it is emphasized that epidemiologic investigations are required to determine both source of infection and mode of transmission in the specific Southern California END event. An understanding of the epidemiology is necessary to advise commercial farmers of the appropriate steps to take to prevent introduction over and above enhanced structural and operational biosecurity which in most cases are woefully inadequate.


Australian Egg Producers Enduring Skyrocketing Feed Cost


A severe drought in Australia caused by an El Nino event has resulted in substantial increases in feed cost shaving margins. A similar situation exists in the E.U. as a result of the prevailing drought which has reduced wheat and canola yields.


From news reports, it does not appear that supermarket chains will raise prices to compensate farmers.  Chains hold prices to maintain sales volume and are disinclined to pay more for their product which would reduce store margins. 


The situation in Australia and in Western Europe is a direct manifestation of supply and demand economics.  If less efficient producers either curtail or cease production, supply declines resulting in price increases ultimately benefiting more efficient producers.


The fact that Australia has a high proportion of free-range pastured hens does not help producers who adopted the system in response to perceived consumer demand.



Secretary Perdue Appeases Aggrieved Farmers


Faced with increased tariffs and embargoes on U.S. agricultural commodities including soybeans, Secretary of Agriculture Dr. Sonny Perdue commented on the longer-term issues in a recent television interview. He characterized the retaliatory tariffs imposed by China and the E.U. as “a little bit like weight loss…it’s kind of painful to start with, but you’re healthier at the end.”

The Administration has offered $12 billion to compensate farmers for losses on exports but no details have been provided as to how the one-time payment will be made and when farmers will receive compensation. It is not known whether the $12 billion offered will be adequate to make up the difference between anticipated revenue and what will be obtained from the 2018 crop due to be harvested in October.

Recent discussions at sub-cabinet level suggest that there is some movement towards resolution of what must be regarded as a tariff war, but again no specifics on resolution are in sight.

Let us hope that Dr. Perdue finds common cause with his constituency in a weight-loss program. Both he and farmers are experiencing the pain, but by the end of the year, we hope that farmers’ bank accounts will be fatter and the Secretary leaner.

On August 23rd, a 10 percent tariff was imposed on $200 billion in imported Chinese goods covering 6,000 product lines. Not only has this action elicited a proportional response from China, but the net effect of increased duties will be to escalate costs of domestic production which will be passed on to consumers, adding to rising inflation.


Edwina Curry Redux


Eerily reminiscent of the misinformed 1988 statement by Edwina Curry, then Deputy Minister of Health in the U.K. that a high proportion of table eggs were contaminated with Salmonella, we now have Dr. Sagit Nagar, Head of Poultry Diseases of the Ministry of Agriculture and Rural Department making a similar claim thirty years later in 2018.


Nagar maintains that 30 percent of eggs in Israel are infected with Salmonella including S. Enteritidis.  The Director-General of the Agriculture Ministry, Ariel Whitman in a scathing commentary on the safety of domestic eggs stated, “I personally refrain from eating eggs from Israel.”  


The problem of Salmonella infection in Israel extends back over 40 years. For security reasons the government placed immigrants from Eastern Europe along the border with Lebanon sponsoring small family units operating 5,000 to 10,000 hens.  Since this time there has been a measure of consolidation by Moshavim but many of the units are decrepit and inconsistent with acceptable standards of hygiene.  Due to the socialistic policies of successive governments and a virtual monopoly over distribution of eggs by Tnuvia, the situation has persisted.  Obviously, the Ministry would like to resolve the problem by dealing with fewer larger modern egg production units operated according to a standard reflecting the E.U. and North America.


Control of Salmonella in substandard units is impossible and a radical restructuring of egg production will be required.  As with any large-scale initiative established applying socialistic principles the participants are looking to the government to provide financial support and other assurances before committing to rehabilitation or construction.


No Movement on U.S.-China Negotiations


Despite the urging of prominent economists and business leaders including former Treasury Secretary Hank Paulson and Stephen Schwarzman CEO of Blackstone, formal talks between the U.S. and China over ongoing trade disputes have not been scheduled.  Previously the negotiator for China, Liu He had offered to increase imports from the U.S. by $70 billion in an attempt to reduce the negative $200 billion trade deficit.  Informally Treasury Secretary Stephen Mnuchin and Liu He have discussed possible solutions but formal talks have not been scheduled.


The American negotiating position has been strengthened by agreements with the European Union which has similar problems with aggressive business practices and coercive tactics imposed by China.


Led by trade hawks including U.S. Trade Representative Robert Lighthizer and Advisor Dr. Peter Navarro the U.S. has imposed a sequential series of tariffs on Chinese imports.  Currently there is a 25 percent levy on imports valued at $34 billion to be followed by an additional $16 billion before mid-August.  The Administration has proposed a 10 percent tariff on products with a value of $200 billion imported from China and the President has threatened to double down to include all $505 billion in imports.  In this event, retaliatory tariffs could impact growth of world income and have severe socio-political repercussions in the U.S.


It is hoped that diplomacy will prevail and that equitable solutions will be devised.  Simply assigning $12 billion as a “short-term” reimbursement to placate farmers will be insufficient to restore their profitability.  The law of unintended consequences is in clear evidence with U.S. manufacturers suffering from increased prices of steel and aluminum whether imported or domestic.  Ultimately if the economy slows down, the effect will be felt by all sectors of the poultry industry with lowered spending initially in restaurants and then for home preparation and consumption.


Biological Hazard from Vaccination Crews


The possible role of vaccination crews in introducing disease onto pullet-raising facilities was reviewed at a recent meeting of the American Veterinarians in Egg Production. A survey conducted among health professionals disclosed that most pullet farms are multi-aged with the result that if an infection is introduced at the time of vaccination of flocks aged 10 to 12 weeks there is a high probability that the pathogen will be disseminated among two adjacent flocks aged below 5 weeks and older than 16 weeks depending on the placement cycle. What may be worse, a mature flock incubating an infection which would be clinically inapparent might be transferred to a multi-aged laying complex with severe financial consequences.

Most vaccination crews consist of 11 to 17 workers which creates problems unless the biosecurity module is equipped to decontaminate a large crew over a one-hour period by showering. Obviously the farm must supply workers with protective clothing and footwear which again requires either a laundry service or onsite decontamination. Since most pullet rearing operations and integrations use contractors, there is an obvious danger that pathogens can be introduced from the last farm at which workers had contact with poultry. This may include mature hens or pullets if the crew is involved with moving or even insemination of turkeys.

Dr. Carol Cardona of the University of Minnesota reported on a simulation study to determine the probability of a vaccination crew introducing avian influenza. The study assumed the likelihood of transmission on a specific day by each member as two percent with 15 workers in the crew. The estimate was based on  one crew member exposing only five birds to 20 EID50 infective doses with a 50 percent infectious dose of 10 3.5 EID50. It was also assumed that the infectivity of avian influenza would decline by 1 log EID50 per day at room temperature. If crews had one day between successive farms there would be a 26 percent likelihood of exposure from 15 workers.

The probability of introduction of infection can be significantly reduced by implementing effective operational biosecurity. This requires investment in structural biosecurity including a decontamination module with functional showers, (NOT a Danish-entry change room), fencing, water-impervious roads within the biosecure area of the farm, a vehicle wash installation and all required vaccinating equipment.

If a contract vaccination crew is employed, biosecurity should be based on the presumption that the crew came immediately from an infected flock. The biological link can be broken by effective decontamination of personnel. This requires complete disrobing, thorough personal decontamination in a shower and then donning company-provided protective clothing. Anything less is self-delusion concerning the level of protection and an exercise in AI-Roulette.


Contamination of an Ingredient Can Result in Extensive Recalls


Currently Mondelez Global is recalling Ritz Cracker products based on presumed contamination with Salmonella. Initial investigations showed that batches of whey powder produced by Associated Milk Producers Inc. at a Blair, WI. plant on four occasions during May and June may be contaminated with Salmonella as detected by a retain-and test program.


Whey is common ingredient in a range of foods and detection of Salmonella by the supplier   resulted in food manufacturers purchasing presumably affected batches having to recall products.  Mondelez has recalled seven consignments of Ritz Crackers, Flowers Foods has recalled Swiss Rolls and bread products, Pepperidge Farm has recalled Goldfish Crackers and Hungry Man Products produced by Pinnacle Foods may also have contained the contaminated whey powder.

As yet there have been no recorded illnesses associated with the event.


Two issues emerged from the ongoing problem:


  • A contaminated ingredient can be responsible for extensive recalls across a wide range of products and brands.  This was the situation in 2008 when consignments of Salmonella-contaminated peanut products were knowingly distributed by the Peanut Corporation of America.  The resulting recalls which unfortunately were detected following an extensive outbreak of salmonellosis including fatalities, required a recall far more extensive and expensive than if a single food product was involved.
  • The second issue which is probably more important is that in-plant quality control procedures based on HACCP can detect the presence of pathogens before outbreaks can occur.  During past months we have observed recalls attributed to Salmonella, Listeria and E.coli. It is possible that other cases of contamination detected by QC and not by outbreaks have occurred without publicity.
    There is an ongoing conflict between government agencies including the FDA and consumer advocates regarding early release of the names of companies and their brands with potential contamination. FDA policy has apparently restrained the agency from naming manufacturers until extensive investigations have been concluded.
    Attorney William Marler the doyen of food safety lawyers is an advocate for early release of information which he believes could protect consumers.  Hopefully his preoccupation with this aspect of foodborne disease outbreaks is altruistic and that he is not relying on the FDA to identify potential defendants for his firm.  Given his track record and public pronouncements, Marler is entitled to the benefit of the doubt. Since the 19193 Jack-in-the-Box E.coli STEC case he has served as a responsible consumer advocate and attorney when compared to the activities of his colleagues in the California tort bar.


Robots to Replace $15 per Hour QSR Workers


A previous report on EGG-NEWS described the limited ability of “Flippy”, a robot that can rotate hamburgers cooking on a griddle. The device was recalled for modification after a brief commercial trial since the module was not able to maintain a required throughput and it was difficult to integrate operation with cooks on a production line. New robots however are under development or undergoing evaluation and can perform a series of tasks replacing unskilled manual workers preparing hamburgers and related servings for QSRs.

An article in the July 14th The Economist describes the Creator which is integrated with a production line for gourmet burgers. The robot which is under test in San Francisco can grind meat, form and cook patties and add chopped tomatoes, grated cheese and dispense sauces. Customers can select their options using a tablet and Creator will deliver a packaged burger conforming to order. The robot has been in development since 2012 and can deliver 120 burgers an hour to customers’ specifications.

In Boston Spyce can deliver a variety of ethnic dishes within three minutes with a variety of ingredients cooked in woks. In China an entrepreneur has opened a restaurant Changsha, Hunan Province equipped with a robot that can cook 40 different recipes which are prepared and dispensed in a bowl with precision both with regard to ingredients, quantity and cooking temperature.

When the proponents of $15 per hour achieved their objectives through local ordinances in West Coast cities, it was predicted that robots would be developed to replace unskilled manual labor and ultimately swell the ranks of urban unemployed. Rather than earning an acceptable wage working on a food preparation line, individuals will be displaced by robots, much as automobile plant workers were rendered redundant by robotic welders, paint sprayers and quality inspectors.

Similar changes are occurring in egg-packing plants and in broiler processing facilities in the E.U. A few years ago this commentator visited an E-room with two 10,000 bph lines devoid of human presence. Robots do not take holidays, always report for work on Monday, are E-verify compliant and never join unions.

As the need for manual labor is reduced by mechanization and robotics, there will be a demand for employees with technical skills to operate and program teams of robots and to maintain and service these installations. This will require technical training. Community colleges and apprenticeship programs will hopefully produce the next generation of skilled plant workers. It is understood that technical training has received the attention of the U.S. poultry industry and that successful academic programs at land grant universities and other institutions which have proven successful will be paralleled in the form of apprenticeship training using the German model.


Canadian Government to Fund Egg Scanning Technology


 Canadian Government to Fund Egg Scanning Technology

Lawrence MacAulay, Federal Minister of Agriculture and Agri-Food announced $850,000 in funding to develop a scanner (or scammer, depending on the outcome) which will identify infertile eggs and male embryos. Proof of principle has been sparse and initial press reports in 2017 suggested that the technology would be commercially available during late 2018.

While a non-invasive method to clearly establish the gender of an embryo before four days of incubation would be a boon to the egg production industry, there have been no commercially acceptable or financially feasible solutions despite claims and hype. Some of the press releases by developers in the U.S. in one case and in the E.U. have been clearly ingenuous, biologically infeasible or downright fraudulent. Entrepreneurs seeking funding have consistently attempted to obtain official recognition for their technology from a university or a government agency, whether in the E.U. or North America.

The press releases from the promoters of the Canadian technology would be more persuasive if accompanied by details regarding the principle, proposed rate of processing and the projected capital and operating costs.

It is hoped that the Ministry of Agriculture and Agri-Food will not have to explain how public funds were expended on a project in 2018 with no practical results or commercial application by 2020.


“Son of Prop. #2” To Be Placed On California Ballot


A ballot measure promoted by the Humane Society of the United States will be presented to the California electorate in November. Basically the proposition establishes more specific standards for confinement of livestock. Effectively by 2022, egg-laying hens in California would not be allowed in cages and more extensive housing areas have been mandated for pigs and calves. In recognition of the inevitability of cage-free production, progressive egg production companies including Central Valley Eggs, have erected complexes incorporating aviaries which allow flocks to range within a barn using the cube-volume of the house. Other producers have retrofitted houses with aviaries or floor systems although the number of hens in California declined after 2014 with recent stabilization.

In contrast to the 2008 ballot, United Egg Producers are not taking any stand on the proposition. A spokesperson for the organization stated “Changes in hen housing are complex and costly and require close collaboration with customers.” It is estimated that a new house fitted with aviaries on a green-field complex would require expenditure in excess of $40 to $50 per hen for site development, buildings, equipment, packing plant, cold storage, biosecurity installations and vehicles. Retrofitting aviaries to existing cage-housing could be achieved at proportionately lower cost.

It is estimated that the state of California would face up to $10 million in potential costs for inspection to enforce the measure.

As usual, the ballot will be decided on sentiment without consideration of costs borne by producers and passed on to consumers. Currently California eggs bear a 40 to 50 cent “Pacelle tax” as a result of the passage of Proposition#2 in 2008.

The 2018 ballot initiative is essentially moot since supermarket chains, restaurants and food service suppliers have committed to sourcing from non-caged flocks. After an initial burst of building and modification in 2017, erection of new facilities and retrofits to existing houses have slowed given that a balance has now been established between the demand for cage-free eggs and supply.

The action by the HSUS in promoting the initiative is considered an exercise in rebuilding image and welfare credentials in order to regain momentum in fund raising to support a vegan agenda. The misplaced perception of the HSUS as a defender of animal rights was eroded by allegations of sexual harassment and misuse of funds leading to widespread resignation of board members and executives.


Opportunity for Egg-Based Snacks


Bee Wilson writing in the Saturday June 9th edition of The Wall Street Journal quantified the market for “between meal” snack foods.  It is estimated that during the period extending from 2002 to 2012 the market for wrapped snack bars in the U.S. doubled to $6 billion, representing approximately 12 percent of the total savory snack food market including potato chips and pretzels.


 The manufacturers of snack bars have identified a guilt factor associated with eating between meals.  By emphasizing the health aspects of products including low sugar and caloric content with protein enrichment, “health” bars have become an important component of the U.S. diet.  The market is characterized by diversity and a high degree of specialization appealing to demographics including athletes, travelers, commuters and those too involved in their lifestyle to eat regular meals.


The most revealing statistic in the article was that Dr. Barry Popkin, Professor of Nutrition at the University of North Carolina has determined that the average American child consumes 450 calories each day from snacks.  This represents an opportunity for creative food scientists to develop egg-based snack foods for children and adults. The inherent nutritional benefits of eggs including amino acid composition, vitamin content and essential fatty acids could be supplemented with additional nutrients.  The challenge will be to produce a consumer-acceptable, shelf-stable snack bars at a price which competes with current and projected products. 


Perhaps the Egg Nutrition Center of the AEB might be motivated to fund development of products by food science departments of Land Grant institutions.  If the attributes of taste, texture, and nutrient content can be combined, food processors will apply technology and create an additional market for eggs and egg products.


Rise of Private Label Brands Impacts Traditional Packaged Food Companies


Aaron Back reviewed the trends negatively impacting packaged food products in an incisive article published in The Wall Street Journal on June 6th. He noted clearly-defined trends in consumer preference. These include a shift towards fresh produce away from packaged foods, digital advertising and E-commerce. These changes in food retailing have provided competitive benefits to start-ups and small companies in addition to the rise of deep discounters including Aldi and Lidl and the entry of into food distribution.

Back notes that in the U.K., private brands are twice as common as in the U.S. suggesting greater pressure on traditional companies.

During the past 12 months, the S&P has risen slightly over 10 percent. In contrast, ConAgra Foods, the best performing of the traditional companies, has declined 8 percent in share price followed by Kellogg (-12 percent), General Mills (-27 percent), Kraft-Heinz (-38 percent) and Campbell’s Soup (-40 percent).

In the egg market private label is accorded increasing shelf space to the disadvantage of national brands.

Kroger Simple Truth Natural Cage Free Grain Fed eggs


Investigation of STEC Contamination Of Romaine Lettuce


Bill Marler, a prominent attorney specializing in foodborne disease, named restaurant chains and a produce distributor in the June 1st edition of the newsletter Food Safety News distributed by his law firm Marler Clark.

The Food and Drug Administration has not released the names of restaurant chains implicated in the outbreak involving a specific E.coli O157:H7 producing Shiga-like toxin (STEC), neither has the Agency identified distributors or processors in a complicated distribution chain. Only one direct link was confirmed between a cluster of cases in a jail in Alaska and a specific farm in the Yuma Valley. This was outlined in a release issued under the signatures of Dr. Scott Gottlieb, FDA Commissioner, and Dr. Stehen Ostroff, Deputy Commissioner of Foods and Veterinary Medicine.

Since Marler Clark LLP represents over 100 clients in this outbreak involving close to 200 confirmed cases in 32 states, they have access to statements by affected diners and the Firm has independently initiated traceback studies with data obtained voluntarily and by subpoena. The restaurants concerned include Panera Bread, Texas Roadhouse, Red Lobster and Papa Murphy’s. Fresh Way Foods is a processor identified by Marler Clark LLP.

Bill Marler justifiably questions why the FDA has been reticent to release the names of restaurant chains, processors and retailers. In an earlier editorial, Marler acknowledged the expressed need by the FDA to balance the responsibility of maintaining a pathogen-free food supply and the financial interests of producers and retailers. Given a foodborne outbreak of long duration with potential life-threatening consequences, the unwillingness of the FDA to release information represents a danger to the public according to Marler.

It is noted that in the case of the Salmonella Branderup case, the FDA revealed the name of the company operating the North Carolina egg production complex and brands packed for supermarket chains although epidemiologic investigations were incomplete.

EGG-NEWS supports the principle of releasing information on sources of contaminated foods and brand names but only if this is in the public interest and if epidemiologic studies hopefully including whole genome sequencing clearly identify the source of infection and especially if recalls are implemented.


Posted June 1, 2018 10:45 AM EST
People infected with the outbreak strain of E. coli O157:H7, by date of illness onset*

*n=197 for whom information was reported as of May 30, 2018. Some illness onset dates have been estimated.



Smithfield Foods Facing Second Hog-Nuisance Trial


Following the May award of over $3 million to plaintiffs living in the vicinity of a farm with a herd contracted to Smithfield Foods, the Company will face a second trial in Federal court in Raleigh, NC during the first week of June.  At issue is a complaint by a bellwether couple who purchased a home in a rural area near Beulaville, NC in 1989 while the hog farm was under construction. The plaintiffs complained of odor, health effects and deprivation of enjoyment of their property as a result of a waste disposal lagoon. 


Intensive hog production in eastern North Carolina commenced in the late 1980’s as hogs replaced tobacco. The state population increased from 2 million hogs in 1990 to 9 million in 2018.  Lagoons to store waste and spraying of supernatant liquid on fields was common practice by 1997 since this system was approved by a compliant legislature.  Environmental activists have advocated against the system based on the deleterious effect of excessive application of nitrogen and phosphorus to soil with runoff leading to pollution of waterways.


Following the devastation including flooding from lagoons during hurricane Floyd, a moratorium was placed on new farms using the system in 1997 but all existing hog farms were grandfathered-in under the legislation.


During the 1990s the University of North Carolina conducted trials to develop alternatives to lagoons including bioreactors which were shown to be technically feasible. The industry was not motivated to spend capital on these installations since they offered no financial advantage.


Ken Sullivan, the CEO of Smithfield Foods, a subsidiary of the WH Group of China, claims that “It is wrong to penalize owners for things like noise and smell which go hand in hand with running a farm.”  Sounding a discordant note, Sullivan stated, “Today it’s hog farms-- what about chicken farms?  The turkey guys? Grain farmers?”  He added, “We have to decide as a society how food is produced.”  For the record, chickens and turkeys do not produce quantities of manure comparable to hogs and neither of these industry groups now use open lagoons.  The intent of the hog industry to drag chicken and turkey producers in North Carolina into the legal mess appears to be desperation tactic.


It is clear that jurors resident in urban areas where cases are tried have little sympathy for either the contractors operating intensive hog production farms or the integrators that own the herds.  Sullivan hinted that if forced to use alternative manure systems requiring capital expenditure, the company may withdrawal from North Carolina.  He stated, “It’s an existential threat to us in North Carolina.”  Noting that Smithfield derives a narrow margin in the state compared to Midwest operations where grain is cheaper he opined, “If the lawsuits succeed we will have to revisit whether we can continue doing business in North Carolina.”


Consuming an Egg Each Day Has No Influence on Cardiovascular Health


A recent article posted on Reuters by Lisa Rapaport provided details of a retrospective longitudinal study on the effect of egg consumption in consumers in China.*  A cohort of 461,000 adults over 51 years of age was followed for nine years.  The subjects were divided into three categories – those avoiding eggs; consuming an egg every other day or one egg per day.  At the beginning of the study period, none of the subjects suffered from a cardiovascular condition.


Over the nine year period, 18 percent either suffered a heart attack or a stroke and 2.2 percent died as a result of cardiovascular disease.   Individuals consuming 0.8 eggs per day were 11 percent less likely to develop cardiovascular disease and 18 percent less likely to die from these conditions.


Limitations of this study relate to the specific diets and environmental factors in China which may not correspond with populations in North America.


A discordant note was sounded by Dr. J. David Spence of the Western University Stroke Prevention and Atherosclerosis Research Center in Canada who stated, “Eggs are not safe for anyone at risk for heart attacks or strokes but particularly not for diabetics.”  Eggs increase the risk of vascular disease in these population groups, according to Spence.


In contrast Dr. Luc Djousse of the Harvard Medical School stated, “This is an important conclusion especially in the part of the world where eggs are a major source of high quality protein and other important nutrients.”


The take home message from this study is that when consumed in moderation by essentially healthy consumers, there does not appear to be an elevated risk of developing heart disease or stroke.


*Qin C, Lv J, Guo Y, et al Associations of egg consumption with cardiovascular disease in a cohort study of 0.5 million Chinese adults. Heart Published Online: 21 May 2018.  doi: 10.1136/heartjnl-2017-312651


House Rejects Raw Milk Amendment – A Victory for Sanity and Public Health


By a vote of 331 to 79 a bipartisan vote rejected a proposed amendment to the Farm Bill that would have allowed unrestricted interstate sale of raw milk.


Representative Thomas Massie (R-KY) justified his amendment as “protecting farmers from Federal interference”. It is illegal to sell unpasteurized milk in 22 U.S. states but virtually all other states impose some form of restriction including herd-share boondoggles.


 Two important considerations guided the House decision:


  • One; There are no nutritional or health benefits associated with raw milk compared to pasteurized milk
  • Two; Raw milk is frequently contaminated with Salmonella, Listeria, E. coli, viruses and occasionally Brucella and potentially tuberculosis if M. bovis occurs in small herds. It is estimated that one percent of milk in the U.S. is consumed raw but this category is responsible for 80 percent of milk borne infections.
    The Safe Food Coalition opposing the amendment included the Center for Foodborne Illness, the Center for Science in the Public Interest, the Consumer Federation of America, the National Consumers League, STOP Foodborne Illness, and The Pew Charitable Trusts.
    In the prevailing environment characterized by anti-science and opposition to any form of government oversight, irrespective of the justification, it is encouraging to observe the 4-to-1 vote to kill the raw-milk amendment to the Farm Bill.
    It would be enigmatic for the Federal government to allow the dissemination of bacterial pathogens while maintaining rigorous standards for Salmonella contamination of poultry and eggs, zero tolerance for Listeria in foods and surveillance and eradication programs for brucellosis and tuberculosis. 


Questions Over the Attribution of the Salmonella Braenderup “Outbreak” to NC Egg Farm


Based on simple arithmetic, the apparent outbreak of Salmonella Braenderup attributed by the FDA to a large integrated farm in coastal NC is questioned. A total of 35 cases among consumers were identified between mid-November 2017 and mid-April 2018. Assuming 80 percent hen-day production, over a duration of 150 days with 2.4 million eggs per day, 360 million eggs would have been distributed in states with a population approximating 50 million. Accepting 35 diagnosed cases as a numerator and 360 million egg-days as a denominator, the probability of acquiring infection from an egg packed by the implicated farm is 1 in 1x10-7. Of the 25 patients interviewed, 16 reported consuming an egg dish at a restaurant.

The critical epidemiologic considerations to positively identify the farm as the source of an infection would be

  • Demonstrating homogeneity among the isolates derived from patients using whole genome sequencing. (WGS)
  • Demonstrating the presence of the same WGS pattern Salmonella Braenderup from the affected farm. This would be from manure drag swabs or on the surface of shells after washing or from egg contents assaying egg pools.

An on-farm inspection by relatively inexperienced FDA investigators which demonstrated the presence of flies and rodents does not represent even circumstantial support for the action taken by FDA given the prevalence of flies and rodents at “acceptable” levels on many farms with high-rise houses.

The FDA would be well advised to consult their own data relating to the 2010 outbreak of SE of long-standing infection in flocks operated by the DeCoster family in Iowa. The epi curve reproduced below characterized the outbreak from two farms with less than 1.5 million hens. There is no comparison in the attack rates between the 2010 Iowa outbreak and the 2018 North Carolina case nor the apparent relative prevalence of Salmonella as determined from on-site assays.

In the event the owners of the farm are now consigning eggs to breaking and pasteurization. It will be of interest to monitor the incidence rate of Salmonella Braenderup not only in the areas where the farms previously distributed shell eggs, but also in the population in the U.S. monitored by existing foodborne infection databases.


Independent Evaluation of Just Scramble®


Laudatory and self-serving articles have appeared on Food Dive and kindred websites favoring Josh Tetrick and his company, Hampton Creek, now renamed Just for reasons that are obscure. A somewhat more moderate tone was evident in a published review on a range of vegetable-based foods in the May 2018 edition of The Future of Everything, a supplement to The Wall Street Journal.

The article contains a review of Just Scramble®, which is based on mung beans serving as a substitute for scrambled egg. The product is apparently available in “select San Francisco and Hong Kong restaurants”. Just Scramble will be offered in “select grocery stores” later in 2018. The reviewer reported that “The surprisingly eggy flavor is faint but with an unfortunate sweetness coming from mung beans which contain polysaccharides that register as sweetness on taste buds”. The reviewer commented that the sweetness associated with the product can be masked by “a few dashes of your preferred hot sauce.” It is noted that a high level of complex polysaccharides in a diet could affect intestinal passage time and disrupt the intestinal microbiome. In comparisons of real eggs and substitutes, food reviewers do not consider nutrient values including amino acids, minerals and vitamins which are supplied by eggs. There is more to the comparison than taste, sentiment and hype.   

A healthy real scrambled egg meal

Ben Roche, the Director of Product Development at Just, responsible for the Scramble product noted “These eggs are a work in progress and we are constantly tinkering, improving the flavors and textures.”

Cultured meat was alluded to in the Future of Everything article.  Tetrick has promoted the new product from his presently-named company claiming that it has the potential to render conventional animal agriculture obsolete. He did however acknowledge that “the current price per pound was unnecessarily high” and apparently omitted to say that cell culture requires bovine serum which would detract from vegetarian status. He hopes to reduce the cost before lab-grown meat becomes available from Hampton Creek/Just “at the end of 2018”. If the company is only months away from commercialization, why were no samples available for evaluation? In any event there are immense regulatory hurdles relating to FDA oversight and labelling to overcome before marketing in the U.S. so the 2018 claim is spurious.

 Both Memphis Meats of the U.S. and Future Meat Technology of Israel have solid scientific and business pedigrees. These companies employ established scientists who have made available products at demonstrations and have published in peer-reviewed journals on their research and development. They have both attracted investments from Tyson Foods in addition to venture capitalists rather than from speculators. Future Meat Technologies currently calculates a $100 per lb. price but anticipates a sharp reduction given technology and scale to achieve a cost of $3 to $5 per lb. by 2020.


Do Meal Kits Have a Future?


CNBC recently posted a review of meal kits suggesting that the traditional model is dead and that a new approach will be necessary for producers of meal kits to survive. It is accepted that meal kits offer variety, the opportunity to be creative and to a certain extent, convenience. This comes at a high price and a delay if ordering online.

The plight of this segment of the retail food industry is exemplified by Blue Apron, which launched their IPO in 2017. Comparing Q1 of 2017 to 2018, the company experienced a 9 percent decline in orders and 5 percent fewer customers although revenue and orders per customer remained fairly constant. The profitability of the meal kit business is decidedly negative. In Q1 of 2017, Blue Apron lost $52 million with a “less bad” result in Q1 of 2018, posting a loss of $31.7 million.

The decline in demand is attributed to competition, customer fatigue and above all the company throttling back on promotion considered necessary to maintain sales. During the past quarter, Blue Apron spent 20 percent of revenue on marketing compared with 25 percent for the previous quarter.

Blue Apron has a $441 million market capitalization but carries long-term debt of $125 million. The 52-week range in share price is $1.72 to $11.00 and the share trades at about $2.30. The proportion of equity held by institutions at 32 percent certainly indicates a lack of confidence by big money.

In an interview, commentator and analyst Phil Lempert opined “It’s not a sustainable business if you’ve got to be constantly giving away $30 or $40 worth of meals to get customers.” He added “I do think what Hello Fresh and Blue Apron are doing by starting to sell in supermarkets is an opportunity.” Blue Apron is now cooperating with Costco which may encourage trial customers. The problem with meal kits is the low rate of retention assessed over a six-month period after the initial purchase. The need to continually run special offers and discounts suggests that apart from hard-core customers, there is little loyalty in the meal kit space.


Immigration Raids Highlight Shortage of Agricultural Workers


A raid by ICE on a dairy farm in Rome, NY in mid-April highlighted the reality that many farmers are forced to employ undocumented workers.  Richard Ball, the Commissioner for Agriculture in the State of New York, estimates that half of farm workers in his state, especially on dairy farms and in orchards, are undocumented.

The recent activity of ICE in raiding farms and detaining workers with the probability of deportation is causing consternation, drawing the condemnation of Governor Andrew Cuomo and Senator Kirsten Gillibrand (D-NY). According to the state of New York, there are 209,000 immigrants illegally residing in the state outside New York City, with an estimated 11 million nationwide.

Commissioner Ball noted “for decades, a shadow workforce has operated quietly on farms in New York and across the nation. The immigrants need work. Farmers have jobs they cannot fill. He commented “the workers offer the farmers enough paperwork to fill out the proper forms and away you go.” There are approximately 6,600 seasonal workers in New York with valid H2-A visas with an estimated 200,000 in total for the U.S. Ball estimates that almost 1,000 farms would fail if undocumented workers were deported in entirety.

The Administration should face reality. There is a need for workers given the disinclination of low-income U.S. citizens to undertake labor which can be satisfied by non-permanent residents from other nations. The H2-C visa is urgently needed especially in dairy, fruit and farming enterprises that require manual labor.


Frontline Highlights Undesirable Working Conditions for Latino Workers


The influential PBS documentary program Frontline recently turned its attention to Latino workers from Central America allegedly employed by a large Midwest egg production company. The tone of the presentation was directed against current immigration policy and specifically failure by the Government to supervise “sponsors”. The Department of Health and Human Services is responsible for the wellbeing of migrant minors but apparently has abrogated its responsibility to middlemen.

The system of subcontractors is iniquitous and an alternative approach must be developed which conforms to the standards and expectations of an advanced economy. Housing conditions for migrant workers must be improved if facilities fall below acceptable codes. Hours of work and conditions are acceptable on most farms, but if deviations from standards occur those responsible should be punished and corrective action implemented.

Given that U.S. citizens in the low-income demographic are disinclined to undertake agricultural work, the proposed H2-C visas to be administered by the Department of Agriculture are needed to maintain productivity for fruit, produce and livestock production and processing.


Agricultural Economists are Concerned over Tariffs on Commodities


Ron Smith writing for Delta Farm Press reported on the opinions of leading agriculture economists on proposed tariffs to be imposed by China on U.S. commodities.  The overwhelming impression is that both nations will lose in a trade war but that farmers will be especially impacted. 


Dr. Mark Welch, Texas Agri-Life Extension economist at College Station noted that decreased exports will reduce commodity prices in the U.S.  Although this will benefit livestock producers, farmers will suffer and over the short term acreage planted to soybeans will be curtailed to restore equilibrium between supply and demand. 


This opinion is shared by Dr. Mary Marchant, professor of Agriculture and Applied Economics at Virginia Tech. who expressed the opinion that a trade war will be bad for the economies of both the U.S. and China.


Dr. Aaron Smith, Extension Agriculture Economist at the University of Tennessee predicts a $600 million decline in the value of soybean exports if China imposes a tariff on U.S. soybeans ranging from 10 to 35 percent.


China is now less dependent on the U.S. for imports and is in a position to retaliate against U.S. tariffs in specific sectors including soybeans.


The academic agricultural economists quoted hold that although tariffs may not have a significant effect on U.S. economy, the agriculture sector will be disproportionately affected.  Dr. Welch noted, “Farm profitability requires that we have access to the growing populations of the world with their rising incomes.”  He added, “U.S. farmers often bear the brunt of trade disputes or disruption for political purposes.”


USDA Overrules NOSB Ruling on Carrageenan


According to the April 4th edition of the Federal Register, carrageenan will remain on the list of additives permitted in food products certified under the USDA organic program.

Carrageenan is extracted from seaweed and is a non-synthetic stabilizer added to products containing oils.

The National Organic Standards Board ruled 10 to 3 to remove carrageenan from then National List. There was no scientific justification for the exclusion and the NOSB maintained that xanthan gum was a suitable substitute. This contention was opposed in public comment which confirmed that carrageenan, a natural product cannot be effectively replaced by gums based on changes in texture, taste or other attributes.

 In commenting on the reversal of the NOSB, Michiel Van Genugten, manager of Seaweed Extracts and Colors owned by DuPont Nutrition and Health stated “We commend the USDA for taking seriously its responsibility to review the NOSB recommendation and make a decision based on facts and science.” He added “This decision will allow organic food producers to continue to use a safe, versatile ingredient.”

Predictably, Consumers Union, the advocacy arm of Consumer Reports opposed the decision stating “The USDA decision to ignore the NOSB recommendation raises serious concerns about the future of the organic label.” During the past decade this organization has promoted “healthful and natural” to the exclusion of reasonable evaluation. The tone of public comments and articles is progressively opposed to intensive livestock production and packaged foods. Consumer Reports performed a more valuable service when it rated toasters and lawnmowers!


FDA Cites Juice Plant-How Many Like This One are out There?


The FDA has cited A.C. Calderoni and Company located in Brisbane, CA for deviations from standard procedures regulated under the Federal Food, Drug and Cosmetic Act.

The FDA determined that juices produced by the plant were adulterated in that they were packed and held under insanitary conditions, potentially injurious to health. The warning letter cited the absence of an effective HACCP plan which failed to identify hazards including Listeria contamination. The plant failed to monitor conditions and practices with adequate frequency, neglected to maintain cleanliness of food contact surfaces, failure to label and store toxic chemicals or maintain records of the health of employees, water safety testing, or pest control. The plant apparently cleaned equipment only monthly.

It is incredulous that a plant in the U.S. operated with gross disregard of public health and failure to conform to established standards in the food industry. What is of concern is the fact that the deficiencies were disclosed on a routine plant inspection. Given the resources of the FDA and infrequent visits, it is questioned how many plants are flying under the Agency radar, functioning with imperfect HACCP plans representing a hazard to public health.

It is also questioned why the FDA is spending time and effort in inspecting egg production farms which have demonstrated conformity to the Final Rule on Salmonella Prevention. With limited resources the FDA appears to ignore gross defects in food plants both in the U.S. and in nations that supply fruit, seafood, produce and meat products which are more frequently associated with foodborne infection than U.S. origin eggs.


What is Motivating McDonald’s Push for Sustainability?


McDonald’s has formed a Chicken Sustainability Advisory Council comprising suppliers, geneticists and academics The intent is for the Council to advise the company on sourcing chickens humanely but also ensuring sustainability.


Commentators have suggested that the motive is to attract Generation Z.  This 20 to 25-year old demographic is apparently environmentally conscious, rejects antibiotics and possibly GMOs in production and objects to wastage of resources and energy.  Attitudes expressed by Generation Z is influencing McDonald’s with regards to packaging, eliminating foam, and moving towards sourcing antibiotic-free poultry and pork.


McDonald’s is obviously aware of the draw by competitors including Chipotle Mexican Grill and Panera Bread and their clones who have created an image of environmental consciousness which appeals to Generation Z representing 25 percent of the U.S. population.


By preemptively eliminating attributes regarded as undesirable by their customers, McDonald’s hope to elevate the Company image among the QSRs which have yet to act on antibiotics or have no fully designated positions on welfare and the environment.


Poultry Industry Does Not Get Sufficient Credit for Training and Philanthropy


USA Today published an announcement by Home Depot on March 9 that their eponymous Foundation in conjunction with the Home Builders Institute will spend $50 million over the next ten years to train 20,000 workers in construction skills.


For decades, the USPOULTRY Foundation has solicited and managed donations from the poultry industry to be channeled in to training programs, university recruitment and research grants which directly support graduate students.


Consumers are generally unaware of the generosity and philanthropy of the industry including donations to food banks.  While it is generally preferable to hide ones light under a bushel, there are obvious advantages in terms of goodwill to publicize through the mainstream and social media the contributions made by the producers and processors of eggs, broilers and turkeys.


Perhaps it would also be advantageous for the USPOULTRY Foundation to set aside funds for structured apprenticeship programs for training in necessary skills including refrigeration, transport, power reticulation and electrical maintenance to strengthen the artisanal level of our industry.


Contamination of Organic Health Food Protein Supplements


The non-profit Clean Label Project based in Denver recently released results of a 2018 study on contamination of protein powders used as nutritional supplements by body builders. A total of 134 brands were tested and 40 percent were found to have detectable levels of heavy metals including lead, mercury, cadmium and arsenic.

The study examined both generic and certified organic supplements. It was found that the organic products were twice as likely to reveal lead contamination as generic protein powders. In addition, 75 percent of the organic powders assayed had measurable levels of lead values approximately twice those recorded in conventional protein powders. Other heavy metals including mercury, cadmium and arsenic were present in the organic products at levels above established safety guidelines.

An important comparison was that egg-derived protein supplements were devoid of either heavy metal or BPA, an endocrine disrupter. This is consistent with the reality that even if feed ingredients fed to hens contain heavy metals in low quantities, there is limited transfer to eggs.

The study clearly demonstrates a contention expressed previously by EGG-NEWS and CHICK-NEWS that the USDA Certified Organic Seal only indicates conformity to a set of regulations and has no bearing on either food safety or microbial status.

If the National Organic Program wishes to advance the image of their Seal, it will be necessary to institute a structured program of assays to ensure compliance. A review of paperwork and records, especially in the case of imported ingredients and products is totally inadequate. Although field audits of farms are performed, a valid program of certification requires laboratory confirmation. The major distributor of a nationally branded specialty egg conducts in the region of 50,000 individual assays annually to confirm adherence to standards of quality, purity and freedom from pathogens.


India Requires Antibiotic Rehab


A recent European poultry publication highlighted the extensive misuse of antibiotics in India.  This nation already has a problem of drug-resistant human pathogens including multi-drug resistant tuberculosis, gonorrhea and staphyloccosis, mainly due to inappropriate training of medical practitioners as well as free access to drugs some of which are of questionable potency.

In the livestock sector antibiotics are used routinely to compensate for deficiencies in biosecurity, vaccination and appropriate management.


Investigations carried out by the World Health Organization documented the extensive use of colistin (polymyxin E) in India. Uncontrolled and extensive administration of this drug to poultry flocks and swine herds in China has resulted in the emergence of the mcr-1gene which enables pathogens to resist a number of antibiotics of human health significance.  Colistin is regarded as an antibiotic of last resort in human medicine to treat infections caused by Gram-negative bacteria.


What is significant is the fact that in India the drug is distributed by the VH Group (Venky’s) a franchisee of a multinational primary breeder and a manufacturer of biologics and pharmaceuticals.  The fact that a leading and presumably ethical veterinary company is involved in chasing rupees by selling antibiotics indiscriminately is a reflection on the ethics of management and characterizes the low concern by CEO Anuradha Desai for public health.


It was an incidental observation that at the 2018 IPPE, many of the exhibitors from China listed colistin as available products.  One company even offered fipronil!


If India aspires to be an exporter of eggs and poultry meat it will have to curb antibiotic use and adopt alternatives which include sound management practices, improved housing, biosecurity and immunization.  It would appear that the domestic industry continues to rely on antibiotics but more recently the inclusion of botanicals and pixie dust in the face of avian influenza, mycoplasmosis and combinations of viral respiratory infections.


AEB Promotes Exports at Gulfood 2018


During the third week of February 2018, the AEB participated in the Gulfood 2018 Exhibition in Dubai.  This prestigious event attracts upwards of 90,000 visitors from countries in the Gulf region and central Asia creating business opportunities and promoting trade contacts.


The AEB points to the increase in exports to the UAE in 2017 compared to the previously year.  USDA-FAS statistics show that exports of shell eggs increased from 7.3 million dozen to 13.1 million dozen with an increase in value of $6.1 to $10.0 million.  The volume and value data obscure the fact that unit value for exports dropped from 83 cents per dozen in 2016 to 76 cents per dozen in 2017.  By comparison, Hong Kong which imported 37.8 million dozen in 2017, representing approximately three times the volume shipped to the UAE purchased eggs at 94 per dozen.


The large increase in exports to the UAE in 2017 compared to the previous year has less to do with promotion than it did with restrictions imposed by authorities in the Emirates.  Firstly the fipronil scandal disqualified exporters in western European nations that traditionally supply the Gulf region, forcing buyers to turn to U.S. and other nations.


The second factor was the embargo placed on Saudi Arabia ostensibly due to HPAI. This nation which has an excess of egg production relative to domestic consumption has enjoyed long-term duty-free, cross-border exports to Gulf neighbors. Although disease was advanced as the major reason for the embargo, it cannot be justified on the basis of science or even OIE or WTO rules.  Avian influenza is endemic in the entire Gulf region.  There is a measure of political and trade animosity between Saudi Arabia and a number of its neighbor including the UAE which imposed protective restrictions. 


Exporters in the U.S. benefited from both fipronil contamination and HPAI in the nations which traditionally supply the region.  It is however questioned whether the factors leading to an increase in exports in 2017 will carry over into 2018 and years beyond.  Exports to the UAE in 2017 represent the combined constant production of 530,000 hens or 0.3 percent of the population of U.S. hens dedicated to producing shell eggs.


The figures and commentary presented above are not intended to reflect negatively on the activities of the AEB in promoting exports since every contribution to consumption is beneficial to the industry. EGG-NEWS simply wish to place volume and value figures in perspective.


Anne L. Alonzo, president and CEO of the AEB stated, “we are proactively supporting our egg producers in their quest to build demand and develop new markets outside U.S. borders where opportunities for growth exist.”  She added, “the Middle East is a key market for us and our increased participation in Gulfood 2018 evidences our interest.”


The AEB in collaboration with USAPEEC are to be commended on their continued commitment to enhancing exports.


Are We Descending Into Tit-for-Tat Diplomacy on Trade


Following imposition of dumping duties by the U.S. on solar panels and washing machines from China, the nation has initiated an investigation into U.S. export of sorghum which they claim is subsidized and dumped onto their market. The volume of sorghum exported to China in 2017 attained 4.8 million tons.


Tim Lust, CEO of the National Sorghum Producers Association stated, “U.S. sorghum farmers do no dump our products into China or elsewhere and our products are not unfairly subsidized.  Fair proceedings will demonstrate these facts.”


It is evident that if the U.S. protects specific segments of an industry including steel fabrication, China and other trading partners will retaliate.  Even if it is subsequently disclosed that there was no unfair subsidy of a product or commodity, disruption in exports may be prolonged over years given the legal and administrative systems in China and appeal procedures administered by the WTO.


Home Delivery an Essential Contributor to Growth or a Passing Fad?


Spurred by the acquisition of Whole Foods Market by Amazon and the power of Amazon Prime has generating buzz among analysts and commentators.  Prime Now has introduced home delivery within two hours from Whole Foods Market locations in four urban centers with the intention of expanding the program to most of the Whole Foods Market chain during 2018.  John Mackey co-founder and CEO of Whole Foods Market stated, “We are happy to bring our customers the convenience of two-hour delivery through Prime Now accessing thousands of natural and organic groceries and locally-sourced favorites.”  He may not be aware but Amazon has restructured purchasing and Whole Foods Market is functioning with more centralized purchasing and order-to-shelf stocking disfavoring “local” in favor of margin.  However, it was never intended that John would really stay in the loop or have much say in the company since Amazon purchased Whole Foods Market and not the other way round.


Home delivery is being introduced by competing chains. If they are successful in their specific regions this will seriously undermine the initial advantage offered by Amazon Prime Now.  Clearly the demographic loyal to Whole Foods Market will continue to source their requirements especially in high density urban areas from Whole Foods Market. During the past five years, clones such as Sprouts have eroded the Whole Foods Market primacy in the organic and natural space.  In addition major supermarket chains have introduced their own organic and natural brands and have begun selling the concept of “local”. This is evidenced by Kroger soliciting supplies from small-scale and local producers terminated by Whole Foods Market.


Click and collect may well be a less expensive alternative to home delivery especially in suburban areas which are well served by the major chains including Safeway, Kroger and the upscale private chains including Wegmans and H-E-B, all of which have strong local support.




Anne Alonzo is the president and CEO of the American Egg Board. Since her appointment in 2016 she has strengthened the management team, initiated numerous programs to increase domestic consumption and exports and focused activities of the Egg Nutrition Center towards promoting the benefits of eggs in our diets.

Growing America’s Agricultural Exports, One Egg at a Time 

By Anne L. Alonzo

A rising star in the U.S. agricultural exports success story is none other than the simple, nutritious egg. 

Traditionally, U.S. egg producers have only exported a modest percentage of their output. But that trend is changing rapidly as the global appetite for U.S. grows and American egg farmers seek to expand their markets.

In 2016, total U.S. egg exports (including table eggs and egg products) were valued at roughly $202 million, and projected to grow by about 21 percent in 2017.  Exports in 2018 are predicted to grow about 20 percent with the largest increases occurring in South Korea and Japan, countries we traditionally think of as selling goods to the U.S. 

The future looks even more promising. In fact, currently 27 countries consume 250 or more eggs per person annually, including Mexico, Hong Kong, Japan, South Korea and Mexico. Countries in the Middle East and the Caribbean also show a fast-growing appetite for eggs.

Why U.S. eggs? U.S. eggs and egg products are subject to the highest standards of safety and quality and are monitored by multiple U.S. government agencies. In the case of U.S. table eggs, they are washed, sanitized, packaged and shipped within hours of laying. Similarly, U.S. egg products are pasteurized and refrigerated across their supply chain ensuring they maintain their quality and safety throughout their shell life. Consumers in other countries are increasingly discovering a safe, nutritious, and versatile food and ingredient. 

U.S. eggs also have passionate promoters. Two years ago, the American Egg Board (AEB), the generic marketing arm for the U.S. egg industry, and the USA Poultry & Egg Council (USAPEEC), its export marketing partner, joined forces and devised a proactive and strategic market development program to help U.S. egg producers export their eggs. 

Since identifying egg exports as a strategic priority, the American Egg Board has been especially busy reaching out to foreign markets. For starters, we identified key geographic areas including Hong Kong, South Korea, Mexico, Japan, the Caribbean and the Middle East for export efforts. Next, we were part of egg trade missions as well as a reverse trade mission involving the countries of Mexico, Cuba and the Caribbean.  

South Korea was key, entailing our supplying the majority of their needs during a Lunar Holiday. We also traveled to South Korea to meet with bakery companies and conducted in-country egg product demonstrations.  At the same time, we invited Korean experts to visit our U.S. egg farms.

As to the Middle East, we support and have expanded our participation in Dubai’s Gulfoods Show, the largest food trade event in the world. We finished off 2017 strong, with a master chef egg demonstration in Mexico City as well as hosting an Egg Export Seminar at AEB’s Chicago headquarters where U.S. egg farmers were able to dive deeper in to learning how to drive even greater egg export demand. 

These activities helped drive strong growth of egg exports to the world in 2017.  For egg products, January through November 2017 figures show more than a 62% increase in volume and 54% increase in value compared to the previous year.  Meanwhile, table eggs were up 1.5% in volume and close to 2% in value.

Recently, USDA Secretary Sonny Perdue noted that “Agriculture’s trade surplus is expected to grow eight percent, from $21.3 billion last year to $23 billion in 2018.” Agriculture remains an important pillar of rural America, directly providing 43,000 jobs and supporting hundreds of thousands more. The Bureau of Labor Statistics estimates the median income for these positions is $62,920 — a considerable amount where the cost of living is modest.

Through 2018 and beyond, the AEB will be doing all it can to continue its contribution to U.S. economic growth and to expanding agricultural exports … one egg at a time.   

(AA 229-18 February 1st 2018)



Panera Bread Attempting to Disparage Competitors’ Egg Sandwiches


In a fairly typical Panera Bread “we are holy than everyone else” approach to marketing, the Company is promoting a new range of egg sandwiches in part by disparaging their competition.

The company claims that their sandwiches will feature “100 % real eggs” without any additives including coloring agents, preservatives or flavors.  The “real eggs” range will include eggs, egg whites and added spinach and avocado. The spices included in the recipes ironically will contain additives, preservatives and flavoring agents, albeit in small quantities.

To support the promotional campaign Panera has asked the Food and Drug Administration to “define an egg”.  Given the speed at which the FDA operates and the possible complications as to what the Agency considers an “egg” Panera had better not hold their breath. The Agency has better things to do than initiate a Talmudic “chicken-and-the egg discourse or to become embroiled in Panera’s deviation from common sense.

Sara Burnett, Director of Wellness and Food Policy stated, “Panera and our competitors use the FDA definitions to guide our product descriptions and names.”  She added, “In the case of eggs, we have no guidance. Brands can say they offer an egg sandwich, but sell an egg product that contains multiple additives.”

Folded eggs included in QSR breakfast sandwiches may contain gums or stabilizers which are approved by the FDA but in no way lower the quality or safety of products but may in fact contribute to preservation of natural flavors and other organoleptic attributes.

The contention that Panera Bread is going to serve either a more nutritious or safer egg product than its competitors is fallacious hype and misinformation of Chipotlian proportions.  Marketing campaigns based on false claims frequently rebound to the detriment of the promoter.


(SMS 192-18 January 26th 2018)


Drafting “Ag-Gag” Laws that Courts May Uphold


Tiffany Dowell writing in the Texas Agricultural Law Circular reviewed the legality of “Ag Gag” laws. In 2014 the Idaho legislature passed the Interference with Agricultural Production Act.  This law contained five sections:-


  • Entering an agriculture production facility by force, threat, misrepresentation or trespass
  • Obtaining records of a facility by force, threat, misrepresentation or trespass
  • Obtaining employment by applying force, threat, or misrepresentation with intent to cause economic injury
  • Entering a facility not open to the public and making video and audio recordings without consent
  • Intentionally causing physical damage or injury to a facility
    The Animal Legal Defense Fund filed suit against the Attorney General of Idaho, claiming that the “Ag-Gag” Law violated both the First and Fourteenth Amendments to the U.S. Constitution.  The trial court grant summary judgement ruling that the first four sections violated the First Amendment in addition to the Equal Protection Clause of the Fourteenth Amendment.  The State of Idaho appealed the lower court decision to the Ninth Circuit of the United States Court of Appeals.
    Whether misrepresentations are protected under the First Amendment hinges on whether false speech is intended for material gain or causes harm.  The court considered that misrepresentation to enter an agriculture production facility would be protected since the provision in the Act was overly broad and did not relate to a compelling government interest.  The court considered that laws relating to trespass prohibiting unauthorized entry onto property would protect owners of farms from intrusion.  The court also considered that the intent of the Idaho Ag-Gag Law was less to protect agricultural operations from intrusion but to prohibit undercover journalism.
    The Court upheld the provision relating to application of misrepresentation to obtain records.  Since records are property, using false statements to obtain data would not be protected by either the First or the Fourteenth Amendments.  The court held that misrepresentation to obtain employment and to cause harm would not be protected under either the First or the Fourteenth Amendments with regard to prohibition on recordings. The 9th Circuit found that the law was excessively broad in an attempt to protect privacy and it also banned video and audio recordings.  Restrictions drawn narrowly prohibiting recordings in farm operations would however be acceptable.
    The conclusion from the Ninth Circuit ruling is that recording images on private property is protected speech although applying misrepresentation to gain access to a farm would not be protected under either the First or Fourteenth Amendments especially since the false statements to gain access would result in harm to the owner of a farm.
    Simply passing legislation to restrict journalists and agents of animal rights organizations is unconstitutional.  Crafting legislation to protect records and to prevent harm is legally acceptable.  It is also evident that laws restricting trespass can be applied to prevent intrusion but not necessarily to restrict the agents of animal welfare organizations who misrepresent their affiliations to gain access to a production facility. 



Outcome of NAFTA Negotiations to Influence Mexican Presidential Election


Unilateral withdrawal or attempting to impose deal-breaking conditions in NAFTA negotiations will have a negative effect on the outcome of the 2018 presidential election in Mexico. President Pena of the PRI party is currently highly unpopular and although he is constitutionally prevented from running, the nominated candidate lacks charisma and carries the baggage accumulated by the current Administration.

Candidate, Andres Manuel Lopez Obrador is rising in popularity. Clearly a populous socialist demagogue, Obrador ran unsuccessfully against previous Presidents Calderon and Pena claiming rigged elections and creating turmoil with each narrow loss. Obrador was once aligned with the PRI, the dominant political party in Mexico for decades. In 1989 he split to form the socialistic PRD party. According to Mary Anastase O’Grady in an opinion published in The Wall Street Journal on January 8th, it is clear that if elected, Obrador would introduce policies detrimental to the U.S. Abandoning NAFTA would create considerable economic hardship in Mexico benefitting Obrador.

Trade negotiations have potential outcomes far beyond U.S. jobs, agricultural exports and intellectual property. An unfavorable outcome could result in a Venezuela on our doorstep.

(SMS 083-18 January 12th 2018)  


Prospects for Egg Prices in 2018


Despite optimistic projections made by the Egg Industry Center of Iowa State University, the wholesale price of eggs in 2018 will be determined by the balance between supply and demand. There is no evidence that per capita consumption will increase materially during the first quarter of 2018. USDA projections note an increase of less than one egg per capita between Q1 of 2017 and Q2 of 2018. At the end of December, U.S. total flock attained 327 million hens with 317 million actually in production in commercial flocks above 30,000 hens. During the last week of December 2017 the stock level of generic eggs increased by 7.9 percent over the previous week to 1,653,800 cases of which 80.8 percent were shell eggs.

Prospects for exports do not appear as optimistic as expressed in recent press releases. The fipronil crisis in the E.U. has largely passed as the affected flocks have been cycled out of production and replaced by non-contaminated hens. Korea has largely restocked flocks depleted by the 2016 outbreak of highly pathogenic avian influenza. In any event, U.S. exporters of shell eggs are non-competitive on the basis of price and shell color compared to product shipped to Korea from Spain, Turkey, the Ukraine and Asian nations.

To state ingenuously that during the first quarter of 2018, egg prices will be 35 percent above the corresponding period in 2017 is not a material advance for the egg industry. The comparison is against unprecedented low prices, considerably below production cost. U.S. producers experienced negative margins for the first nine months of 2017 based principally on the disparity between production and demand.

(SMS 024-18 January 3rd 2018)


Studies on Reassortant H5 Viruses in the Netherlands


Whole genome sequencing and phylogenetic analysis was applied to establish the relationship among viruses responsible for outbreaks of H5N8 avian influenza in the Netherlands in 2016*.

The study was initiated following the emergence of clusters of avian influenza in commercial poultry and in wild birds.  Evaluation of virus isolates revealed that multiple introductions of H5N8 virus occurred and that the specific viruses on five infected commercial farms were not closely related.  In the Biddinghuizen cluster of outbreaks, farm-to-farm transmission was presumed to have occurred although separate introductions to the affected farms from a common source could not be excluded.  The H5N8 viruses which emerged in the Netherlands in 2016 were distinct from the isolates obtained in 2014.

The H5N8 viruses introduced in 2016 were novel derivatives of the Russia-Mongolia H5 clade  Molecular dating indicated that reassortant events occurred during 2016 in wild birds congregating on the border of Russia and Mongolia.  The authors demonstrated differences in the nucleoprotein, polymerase and nuclear protein among isolates.

The conclusion from the study is that increase surveillance is required to determine changes in H5 clade viruses from wild birds congregating in Northern Siberia and the border of Russia and Mongolia to serve as an early warning indicator for subsequent outbreaks of highly pathogenic avian influenza in Central and Western Europe.

*Beerens, N. et al Multiple Reassorted Viruses as Cause of Highly Pathogenic Avian Influenza A (H5N8) Virus Epidemic, the Netherlands, 2016. Emerging Infectious Diseases 23: 1966-1973 (2017)

(SMS 019-18 January 2nd 2018)


New South Wales Government Criticized for Consultation with Industry on Welfare Standards


The New South Wales government has engendered criticism for consultation with the egg-production industry of the State regarding new welfare regulations relating to housing of hens.

Animal welfare activists exercised the “Freedom of Information” laws in NSW to obtain communications and reports of meetings which the Animal Law Institute claims to be collusion in the standards-writing process. According to disclosures a NSW Department of Agriculture employee suggested elimination of requirements reminiscent of California Proposition 2 since this would have disqualified conventional battery cages.

The Royal Society for the Prevention of Cruelty to Animals maintains that the process of developing standards was “stage managed” for the benefit of producers. A blatantly unfair provision in the development of standards was a requirement that non-profit organizations would have to pay $3,000 to suggest policy options for aspects of the regulations including stocking density. This provision was characterized by Dr. Thomas Clarke of the Corporate Governance Research Center at the University of Technology in Sydney as “absurd and worrying”. He added “I have never heard of an accountable government anywhere in the world charging for contributions to a policy initiative.”

The situation in Australia where the state governments of Victoria and Western Australia have developed their own independent standards has relevance to the U.S. The egg industry of any nation cannot function effectively over the long term unless there is harmonization of welfare standards with clearly defined nomenclature for alternative systems. EGG-NEWS has reported previously on dissention among producers and confusion among consumers as to what constitutes “free-range” and “pastured” in terms of space allowances.

(SMS 2,117-17 December 29th 2017)


Efficacy of Foot Baths in Relation to Preventing AI


Studies conducted by the University of California-Davis have questioned the value of foot baths containing quaternary ammonia compounds (“quats”) in combination with glutaraldehyde solution in foot baths. It was demonstrated that foot baths were unable to destroy either low pathogenicity or high pathogenicity avian influenza (AI) virus on footwear. A chorine-based granular powder in foot baths was however able to destroy virus on contact. “Footwear” is a non-defined concept. The efficacy of exposure to a disinfectant under practical conditions must vary depending on whether one is dealing with smooth-soled footwear or cleated boots with impacted litter and fecal material. 

Despite the reassuring comments made by the CEO of a large broiler integrator to the uninformed at an investor’s conference in 2015, foot baths as a single modality are incapable of preventing introduction of pathogens including AI into commercial flocks.

Simulation studies showed that low pathogenicity AI (LPAI) using H6N2 strain in feces and litter persist for approximately 24 hours. In contrast, highly pathogenic strains of avian influenza (HPAI) using H5N8 strain demonstrated viability for at least 96 hours. The authors of the paper urged further studies on appropriate methods to interdict infection and to evaluate procedures to decontaminate farms after a diagnosis of AI*

The egg-production industry in the U.S. has invested in enhanced Structural Biosecurity (change rooms with showers, blacktop roads, vehicle washing) and Operational Biosecurity (personal protective clothing, restrictions on inter-farm movement, banning hunting) which have raised barriers to introduction of infection. Applying inference from current knowledge of the biology of AI virus and the epidemiology of LPAI and HPAI it has been possible to develop recommendations to reduce the probability of introducing AI into flocks in the face of wild bird dissemination of virus. The effectiveness of current measures varies according to investment in protective measures, training at all levels of personnel and diligence in complying with prevention programs.  

*Hauck, R. et. al., Persistence of Highly Pathogenic and Low Pathogenic Avian Influenza Viruses in Foot Baths and Poultry Manure. Avian Diseases. 61:64-69. (2017)

(SMS 2,096-17 December 22nd 2017)


Consumers Confused by Labels Describing Housing and Feeding


A review of labels in stores catering to high-income demographics and discussion with both producers and retailers confirms confusion among consumers as to what is actually being offered. The outstanding issues are:-

  • Nutrition of flocks-Certified organic or non-GMO
  • Outside access- Occasional release; sun-porches; free-range; pasture with space allowances from 2 ft2 to 108 ft2 per hen

It is interesting that one producer has actually imprinted labels with a notation that
“All organic is GMO-free”. This is in recognition of the reality that GMO-free is growing at a rapid rate while growth in Certified Organic has reached a plateau.

There is overwhelming confusion among consumers as to outside access. Vital Farms, in an evident expression of frustration with outside access claims competing with their 108 ft2 pasture-housed standard initiated a controversial advertising campaign featuring a “No Bull**it” theme.

It is evident that AMS in cooperation with the egg industry will have to develop standards which must be followed by producers as an exercise in fair description. The situation with regard to the image and competitive status of the USDA-AMS Certified Organic seal is a more difficult proposition. Promotion of other than a brand is difficult and ultimately expensive. An attempt by the Organic Standards Board (OSB) to impose even greater outside access and thereby disqualify in-line operations providing access to sun porches has been deferred. The proposed action by the OSB in 2016 would have raised the cost of production and hence selling price, further reducing the attraction of “organic” against less expensive Non-GMO eggs and alternatives. 

(SMS 2,063-17 December 18th 2017)


Impact of Banning Glyphosate


In November, the European Union agreed to extend the license for glyphosate for five years after protracted negotiations and considerable opposition from opponents of intensive crop agriculture and specifically GM technology.

A recent study* calculated that if glyphosate were to be banned, the advantages associated with GM herbicide-tolerant crops would be lost. At the present time, it is estimated that 375 million acres are planted to herbicide-tolerant cultivars. The annual loss to global farm production would be $6.8 billion as a result of reducing soybeans by 18.6 million tons, corn by 3.1 million tons and canola by 1.4 million tons respectively. It is calculated that without glyphosate and GM herbicide-tolerant cultivars, an additional 9,000 tons of herbicide would be required with a profound environmental impact. Carbon emissions would increase the equivalent of adding 12 million autos to the world’s fleet. Yields of crops without the use of glyphosate would fall with soybean output decreasing by 3.7 percent. Land use would have to change with additional planting of 1.9 million acres resulting in deforestation adding to release of carbon dioxide.

*Brookes, G. et al., The Contribution of Glyphosate to Agriculture and Potential Impact of Restrictions on Use at the Global Level. GM Crops and Food, 11th December 2017

(SMS 2,050-17 December 17th 2017)




Speaking at the recent U.K. Egg and Poultry Industry Conference, Dr. Nigel Gibbens, CBE, Chief Veterinary Officer of the Department for Environment, Food and Rural Affairs (DEFRA) (equivalent to USDA), questioned the  move to adopt free-range management which represents over 50 percent of U.K. egg production.  In 2012, conventional cages were banned in the E.U.  The U.K. and to a lesser extent Germany, adopted the enriched colony module as an alternative to conventional (“barren”) cages to achieve compliance by January 12, 2012. 

Following trends in E.U. nations and the subsequent commitments in the U.S. by members of the FMI, NRA and NCCR to convert to cage-free production by 2025, there are questions as to the safety and desirability of maintaining flocks outside houses either under free-range (22 square foot per hen) or on pasture (100 square foot per hen).

At issue is the inevitability of exposure to avian influenza.  Migratory waterfowl were responsible for introduction of both LPAI and HPAI strains H5 and H7 over successive years in the E.U. and in the U.S.

Dr. Gibbens emphasized the “conflict between the public’s demand for ethical eggs from free-range hens and the need to protect flocks from avian influenza.”  He opined, “Hens left outside are a greater risk of being infected by wild birds carrying a disease.” In a subsequent interview with a leading U.K. agricultural periodical, Dr. Gibbens noted, “free-range farms are also at higher risk from other diseases based on their exposure.”

During the 2016 and 2017 AI outbreaks in the U.K., DEFRA issued “”confinement orders” which obliged producers in an area where AI had been diagnosed to confine flocks to barns.  Each year the period of risk is extended and the E.U. has lengthened the period of confinement from 12 to 16 weeks without flocks losing their “free-range” status.

The remarks by Dr. Gibbens, based on sound epidemiology and experience evoked considerable negative reaction from welfare organizations in addition to some members of the UK veterinary profession.  He was accused of “brazen endorsement” of the practice of keeping hens in cages which deprive them of “natural behavior”. Based on reports of his address to the Industry Conference this is a biased characterization of his message.

(SMS 1,993-17 December 7th 2017)


Advocacy Groups Promote Elimination of Potentially Hazardous Chemicals


Organizations such as Safer Chemicals, Healthy Families are pressuring retailers to stock items which are free of potentially hazardous chemicals.  Personal care and home cleaning products are at the top of the list but it is expected that the range of products will be expanded.  The “Personal Safety and Health” organizations are evaluating products and rating retailers assigning grades from A to Fail with annual updates on improvements. 

In the newly released November 14th report card, retailers scoring B or higher included Apple, Walmart, Target, CVS Health, while Albertsons and Costco were assigned C- grades.  Walmart published a chemicals policy in 2013 and has joined the Chemical Footprint Project supported by Clean Production Action, a non-chemical and alternative advocacy group. 

Studies conducted by CVS Health showed that shoppers are concerned about potentially hazardous chemicals. This is fueled by information of dubious value available on the internet.  House brands appear to be a specific target of organizations promoting “green chemistry” and CVS is actively urging suppliers to remove parabens, phthalates and any compound that releases formaldehyde from their products.

As with many regulatory trends, EU standards are readily adopted by U.S. activists groups.  The list of 2,700 chemicals to be eliminated or reduced in consumer products was compiled by the EU Registration, Evaluation, Authorization and Restriction of Chemicals Regulations (REACH).

The problem of blanket bans on specific compounds by chemical name does not take into account either level of exposure either through concentration or duration.  Unfortunately the exercise of demonizing beneficial compounds and additives may degenerate into a “Science Babe” exercise of eliminating all compounds that a person with a high school education cannot pronounce.

In the short term, it would not appear that the egg industry has any immediate concerns with either shell eggs or liquids. Packaging material or chemical compounds used in the production process may be subject to scrutiny and result in restrictions or sanctions.

As with welfare, a major restraint to the egg industry, consumer concerns, fanned by organizations ranging in their motivation from sincerity through mendacity and extending to zealotry may have an influence in the near future.  As with many trends, it is best to understand the motivation of critics and antagonists in order to develop a preemptive defense. If there are any obvious problem compounds including insecticides, these must be voluntarily removed from the production chain in advance of condemnation.


(SMS 1,991-17 December 7th 2017)


Childhood Obesity Advances in the U.S.


According to a study on 42,000 children and adults, Dr. Zachary Ward of the Center for Health Decision Science at the Harvard T. H. Chan School of Public Health in Boston estimates that 57 percent of children aged 2 to 19 in 2016 will be obese by the time they reach 35 years of age.

It was determined that obesity in childhood is reflected in adult obesity with consequential health issues including diabetes, cardiovascular disease and renal complications.  Currently six percent of U.S. children are severely obese with a body-mass index of 35 or higher.  The study determined that Hispanics and non-Hispanic blacks were more likely to be obese than white children and differences among races were present at two years of age.  The converse is also true in that children that are not obese during childhood have a lower probability of adult-onset of obesity.  Children with a low or normal BMI have less than a 50 percent chance of becoming obese by 35 years of age.

The authors of the article cited a 2015 study in Health Affairs concluding that placing a tax on sugar-sweetened beverages, setting nutrition standards for foods served in schools and eliminating tax deductions for advertising unhealthy food would be beneficial with respect to obesity.  There appears to be a lack of logic in these recommendations since two-year old obese children would not be at school and their diets would not be influenced by youth-centered advertising. 

Clearly the solution lies in comprehensive education directed at the demographics at risk, both ethnic and economic that have the highest prevalence of obesity.  The “nanny state” directive approach advanced by previous First Lady Michelle Obama and also by Mayor Michael Bloomberg, although well-intentioned was not especially beneficial.  EGG-NEWS did however report on success among lower income immigrant families in Amsterdam, the Netherlands involving a comprehensive program of education, modifying school meals and promoting exercise together with family counselling.

(SMS 1,970-17 December 1st 2017)


Unilever Searches for Next CEO


On October 16th, EGG-NEWS posted an article on the succession plans for the CEO of Unilever.  At issue was the policies followed by Paul Polman, the incumbent since since 2009.  The company disappointed investors failing to meet market expectations on both the top and bottom line for fiscal 2016.  Management also came under criticism for rejecting the Kraft Heinz Company bid, valued at $143 billion. Simply repurchasing stock, divesting segments with low margins and introducing cost-saving measures are ameliorative but do not address the basic problem of rising competition experienced by large multinationals from more agile local enterprises. It is now up to the Unilever board under newly appointed chairman Marijin Dekkers to select from either aspirant candidates within the organization or to appoint a disruptive outside candidate.

During the past decade Unilever has been at the forefront of promoting animal welfare issues using its prestige and international reach to make common cause with pro-vegan activist organizations.  The Company has also become embroiled in conflicts relating to GMO technology. The Ben and Jerry’s subsidiary supports mandatory labeling of products containing GMO ingredients, a position supported by Paul Polman during a 2014 visit to the company headquarters in Vermont.  In contrast as a corporate entity, Unilever has opposed legislation at state level to mandate GM-labeling and contributed to the campaign to oppose a California ballot initiative on GM-designation.

It is hoped that the next CEO of Unilever will adopt a more balanced policy towards welfare, GM and environmental issues and recognize that the responsibility of the company is to its shareholders. Management should not base policy on the Company acting as a vehicle for social change or intertwine their personal inclinations with corporate concerns.

(SMS 1,954-17 November 29th 2017.)


Brunch Emerging as a Trend Favoring Egg Consumption


According to research conducted by Mintel and Technomic, Millennials have overtaken Boomers as the largest demographic group.  Studies show that Millennials enjoy meals as social occasions. They like to eat whatever and whenever they wish and are eager to try new dishes.  Technomic determined that 38 percent of Millennials enjoy consuming foods later in the morning but also enjoy traditional breakfast dishes including eggs, potatoes, and cheese.

The requirements of Millennials were instrumental in the decision by McDonald’s to extend their program of all-day breakfast to the entire chain with beneficial results to traffic and same-store sales.

Technomic® has determined that 40 percent of consumers eat brunch at least once a week and 30 percent consider breakfast to be a destination.  Millennials appear to be skipping breakfast more in 2017 than in 2015 based on time related considerations.

This trend will obviously benefit the industry if new egg-dishes can be developed suitable for brunch.  Eggs will be incorporated as toppings on burgers, pizzas and in bowls for consumption in QSRs, for casual dining in restaurants and as on-the-go meals. The American Egg Board is at the forefront of developing new dishes suitable for brunch servings.

(SMS 1,946-17 November 26th 2017)


Promotion of Enriched Omega-3 Diets will Benefit Consumers


Dr. Alice Stanton of the Royal College of Surgeons of Ireland recently reported on an experiment involving 161 subjects consuming chickens and eggs enriched with omega-3 polyunsaturated fatty acids.  Devenish Nutrition is promoting incorporation of an algae-derived ingredient in diets for laying hens and broiler to increase the omega-3 level of egg yolk and breast muscle of broilers.

The clinical study documented an increase in serum levels of omega-3 fatty acids and a more favorable omega-3 index in red blood cell membranes.  A low omega-3 index attributed to inadequate intake of omega-3 fatty acids including ALA, DHA and EPA is generally associated with an increased risk of cardiovascular disease.

Dr. Heather Hayes director of food innovation for Devenish noted, “Offering birds a natural and sustainable omega-3 PUFA is good for the bird and good for the consumer.  Taste panel studies have shown omega-3 enriched chicken taste as good if not better than conventional chicken.”

Dr. Patrick Wall, Professor of Public Health at the University College Dublin stated, “By enriching the birds’ diet, meat and eggs become naturally enriched with omega-3 polyunsaturated fatty acids (PUFA) and the associated nutritional benefits are then passed on to consumers.”

It is possible to raise the omega-3 level in commercial eggs to 115 mg per large egg by supplementing diets with canola oil, flaxseed or flax oil.  Currently eggs containing from 100 to 250 mg omega-3 PUFAs are commercially available including the leading national brand in the U.S. which is also supplemented with a range of B complex vitamins in addition to high levels of vitamins E and A.

Algae-derived dietary supplements are marketed in the U.S. and on the international market to be included in diets for hens, broilers and hogs to raise omega-3 fatty acid levels.

(SMS 1,921-17 November 22nd 2017)


Cornucopia Institute Highlighting Issues for National Organic Standards Board Meeting


In a recent press release the Cornucopia Institute, representing the interests of small-scale organic producers, highlighted the issues which will be reviewed at the semi-annual meeting of the USDA National Organic Standards Board to be held in Jacksonville, Florida. The major concerns relate to hydroponic culture of produce, fraudulent certification of imported organic feed ingredients and the composition of the National Organic Standards Board.

The Cornucopia Institute maintains that family-operated small-scale farms are being squeezed out by larger producers represented by the Organic Trade Association a sentiment they consider degrades the image of the of the organic label.

The Cornucopia Institute has campaigned aggressively against in-line egg-production complexes which are both efficient and sustainable. The organization fails to recognize that these farms supply the Nation’s supermarkets and wholesale club stores with organic eggs at an affordable price, necessary for the growth of the entire organic sector. In reality much of the organic egg production in the U.S. is derived from individual family-owned farms under contract to integrators, co-operatives, feed mills and packers who provide working capital, logistics and marketing which are beyond the capability of independent producers with small flocks.


(SMS 1,798-17 November 5th 2017) 


Financial Viability of Dutch Kipster Facility Questioned


Despite laudatory articles relating to an “environmentally friendly” house for laying hens, there are serious questions as to return the on investment even with a premium price for the eggs produced. The entire production of the Kipster house will be assigned to Lidl, a company not exactly noted for its generosity towards suppliers.


The Kipster house incorporates over 1,000 solar panels which supply electrical power with a claimed 60 percent of generated capacity sold back into the grid. The article provides no indication of whether this proportion is based on a limited period of maximum solar exposure or whether it represents an average over 24-hours throughout the year. 


A feature of one article in an E.U. poultry periodical was obviously authored by a lay-journalist who suggested that “the feed given to the chickens is made from agricultural farm waste products”. This is arrant nonsense. To achieve acceptable production parameters from flocks, it is necessary to satisfy all nutrient requirements including energy, amino acids, minerals, vitamins and micronutrients. A balanced diet cannot be compounded from “waste which would otherwise not be used for human consumption.” Chickens, as with all monogastric livestock effectively compete with humans for ingredients.


The design of house incorporates a sunporch and an indoor garden with a glass roof. Outside access will be allowed during acceptable weather conditions and under low risk of avian influenza. Eggs produced by the Kipster Farm will receive a three star certification from the Beter Leven program


The lavish description showered on the Kipster project is reminiscent of the “Rondeel” introduced nearly a decade ago and supported by supermarket chain Albert Hein. Apart from the prototype and a small demonstration unit only three other commercial installations have been sold and the concept may be regarded as a commercial if not a practical failure. It will be interesting to determine if any subsidies or financial support was extended to the Kipster operation which would reduce the capital required by the owners and hence lower the fixed cost component of production.


Any serious evaluator of the Kipster concept would require capital investment, projection of fixed and variable costs and the selling price specifying any premium to determine the return on investment. Financial data would be more convincing than a discussion of environmental benefits.


(SMS 1,777-17 October 31st 2017)


Organic Tarragon Spice Recalled for Salmonella Adulteration


Health authorities in numerous states have informed the retail food distribution industry of the mandatory recall of organic tarragon spice distributed by Spicely Organics located in Fremont, CA. The product was distributed in 21 states although no cases of salmonellosis have been diagnosed. The recall was initiated following detection during routine sampling.

Spices are frequently implicated in outbreaks of food-borne infection. Due to the fact that they are minor ingredients frequently not declared on labels, identifying a pathogen associated with a specific spice included in a recipe is extremely difficult. This is evidenced by the 2011 outbreak of E. coli O104: H4 in North Germany, responsible for 4,300 diagnosed cases with 852 reports of severe hemolytic uremia syndrome. Ninety percent of the cases were adults with 50 fatalities. It took many weeks and a number of false trails to actually determine the specific vehicle of infection. Eventually the vehicle of infection for E. coli O104: H4 was identified as contaminated fenugreek spice imported from Egypt in 2009. At the outset of the investigation cucumbers were implicated but with additional patient surveys on foods consumed, sprouts appeared to be the vehicle of infection although these ingredients were shown to be free of contamination.  Further studies showed that fenugreek was in fact the culprit. Apart from the costs associated with treatment and loss of life and earnings, there was considerable disruption of the food distribution chain and loss of traffic in restaurants in North Germany due to fear of infection apparently associated with salads but without knowing the specific cause.

Spices are mostly imported from developing countries where cultivation, drying and processing lack appropriate HACCP and Good Manufacturing Practices. Although sampling to determine the presence of a pathogen is an established procedure, it is evident that sampling errors will occur allowing potentially adulterated material to contaminate fairly large quantities of food. This is especially the case with salads and other uncooked foods that deprive consumers of  protection from a heat process.

Irradiation of spices using either electron beam pasteurization or cobalt60 irradiation effectively destroys bacterial pathogens. Despite FDA approval for the process, there is little acceptance of irradiation based on the misinformed perception of the benefits of this application of radiation technology.


In the case of the contaminated organic tarragon, the product was certified as USDA Organic and therefore would not have been eligible for irradiation.


Lessons from this case include:

  • Organic status offers no assurance of food safety.
  • A little bit of spice can go a long way in contaminating a large quantity of food.
  • Demonstrating that a spice is a vehicle of infection is extremely difficult using retrospective menu-recall.
  • Traceback beyond a supplier or distributor is virtually impossible especially with imported spices.

(SMS 1,701-17 October 24th 2017)


Insurance Policies May Not Indemnify Against Pollution Claims


A posting on September 25th in the Texas Agriculture Law Blog documents a court ruling against a dairy attempting to claim on an insurance policy arising from groundwater pollution.

Judge Thomas Rice of the United States District Court for the Eastern District of Washington ruled that an insurance company was justified in denying coverage based on “absolute pollution exclusion clauses in the policies issued to the dairy.”

In 2013, the Cow Palace Dairy located in Washington State was sued by environmental groups alleging that seepage from retention ponds resulted in pollution of an underground aquifer. Claims were filed under the Federal Resource Conservation Recovery Act and the Comprehensive Environmental Response Compensation and Liability Act.

The action was successful and the Cow Palace was obliged to settle the lawsuit at a considerable cost. The dairy in turn claimed on their insurance policy. The policy specifically excluded liability arising from discharge, dispersal, seepage, migration, release or escape of pollutants at or from the premises and at or from any site or location used for the handling, storage, disposal, processing or treatment of waste.

The report authored by Tiffany Dowell notes that this verdict is the second which has held that exclusion clauses indemnify insurance companies against coverage resulting from environmental pollution involving manure.

The take home message is that egg production companies, especially those operating lagoons, must be aware of the limits of their insurance. Effectively in most cases they are liable for damage resulting from environmental pollution since this risk is expressly excluded from their insurance cover.   

(SMS 1,622-17  October 9th 2017)


Cornucopia Institute Foiled By USDA


The Cornucopia Institute has received a determination letter dated September 27th from the USDA-AMS dismissing a formal complaint against Aurora Dairy Farm in Colorado. The action relates to a formal complaint against that livestock had been denied outside access which the Cornucopia Institute considers to be essential for organic certification. The fact that commercial dairies can operate at densities of ten cows per acre compared to one cow per acre for small organic dairy farms (of questionable profitability) has created an adversarial situation between the Cornucopia Institute and USDA-AMS.

Similar complaints have been raised against large organic egg producers providing outside access in the form of sun porches on large in-line complexes. Cornucopia Institute has sought to disqualify large dairies and egg producers under the USDA organic program. Their efforts are less directed at maintaining the integrity of the USDA organic seal than eliminating competition for the benefit of their membership.

(SMS 1,579-17 October 3rd 2017)


Panera Bread Introduces Kid’s Menu


Panera Bread is now offering virtually all items on their menu as small-sized dishes for children.  Ron Shaich Founder, Chairman and CEO of Panera Bread stated, “For too long restaurants in America have served menus full of nutritionally empty chicken nuggets*, pizza and fries paired with sugary drinks and cheap toys.”  He added, “I’m challenging the CEOs of some of the largest companies in the industry to personally eat exclusively from their restaurants’ kids meals for an entire week and if not, to take a thoughtful look at what they are offering our smallest guests."

Panera Bread has from its inception promoted so called “clean menus” appealing to an affluent demographic with an inordinate concern over nutrition and health but susceptible to hype and misinformation.

It is a matter of record that the major chains including McDonald’s Corporation and Wendy’s have modified their kids’ menus to include fruit and juices, low-sodium and low-fat items and with deletion of artificial coloring agents and unnecessary additives.

Shaich in his inimitable way is again promoting his Company and his products at the expense of competitors by dissemination of unsubstantiated claims and innuendo. He did not define the term “empty” in relation to nuggets which have stated values for calories, protein, sodium and fat and the use of the pejorative is sheer hyperbole unworthy of a person in his position. 


(SMS 1,530-17 September 25th 2017)


USDA Grants for Value-Added Agriculture


The USDA will make available $18 million in funding for producers to establish viable value-added enterprises. The program is administered by USDA- Rural Development. Grants will allow producers to conduct feasibility studies, develop business plans and initiate marketing programs.

Providing seed money for new agricultural enterprises may appear to be both practical and contribute to agricultural output benefitting communities and consumers. What is important is to establish that expenditure on grants and programs demonstrates a positive return. USDA is quick to announce programs some of which appear to be highly speculative but is reticent in releasing financial evaluation of expenditure of public funds.

The USDA has been less than transparent in publishing the results achieved by recipients of grants. Accordingly under the new administration of Dr. Sonny Perdue, a veterinarian and businessman, the evaluation of projects will presumably be undertaken at the grant-application level but then should be followed through to completion.


(SMS 1,440-17 September 7th 2017)


Lawyers Deprived of Fees in Unjustified Lawsuit


Judge Diane Sykes of the 7th Circuit Court of Appeals denied a $525,000 settlement to cover plaintiff's legal fees allowed by a lower court in a class-action suit against the Subway chain. At issue was a contention that some "foot-long" sandwiches were only 11 inches from end-to-end.

Judge Sykes characterized the lawsuit as "utterly worthless" and served only to enrich lawyers who filed the case. Nine customers in the class received $500 each in settlement.

Sykes invoked "common sense" avowing that a company cannot guarantee that every roll is exactly 12 inches in length but customers receive the same quantity of ingredients on their sandwiches.

Regrettably, members of the tort bar ("slip and trip shops") are taking their cue from the "oldest profession" and are constantly searching for plaintiffs to initiate shakedown lawsuits against food manufacturers and restaurants claiming spurious damages or alleging deceptive promotion. Hopefully the case law established by this judgement will avert future litigation.

(SMS 1,416-17 September 1st 2017)


Recrimination over Fipronil Debacle


Following revelations that authorities in Belgium knew of Fipronil contamination of eggs in early June but only notified the EU in late July, beleaguered officials are now blaming the Netherlands.  The company allegedly responsible for supplying the insecticide cocktail containing Fipronil applied to as many as 200 farms was based in the Netherlands.  Belgium claims that Holland was tardy in their investigation delaying critical information until the end of July.


The Minister of Agriculture for Belgium Denis Ducarne addressing a Parliamentary investigation noted "One month without having any information from the Dutch Agency" --presumably the Dutch Food Authority.  Ducarne maintains the Dutch had been aware of Fipronil in eggs since November 2016 without any declaration.

It is significant that no official reports or media articles have actually quoted levels of Fipronil in eggs.  This data would be of interest to actually assess the risk to consumers. Actual assay results will be necessary to reconcile conflicting statements of low-risk made by Dutch, Belgian and U.K. officials in contrast to a more pessimistic interpretation by Germany.

It is hoped that investigations will soon be concluded which will reveal the duration of contamination, the levels in eggs from affected farms and the concentration of residual Fipronil in tissue from culled flocks.  Results from epidemiologic studies involving temporal and spatial considerations included in a comprehensive report should be forthcoming since there are lessons to be learned from this incident which is eerily reminiscent of the dioxin contamination in Germany and the Benelux Nations in 2011.


Agriculture Minister Dennis Ducarne of Belgium
reviewing aspects of the fipronil scandal with the media


FDA to Delay Compliance Inspections for FSMA


According to a posting on the website of the U.S. Food and Drug Administration, the Agency has delayed inspections of feed plants to ensure compliance with the Food Safety Modernization Act. Inspections scheduled for 2017 will be delayed until the Fall of 2018 according to Dr. Steve Solomon, Director of the FDA Center for Veterinary Medicine. This will also delay inspections under the Foreign Supplier Verification Program.


The move was enthusiastically endorsed by the American Feed Industry Association. Richard Sellers, Senior Vice President of Public Policy and Education commented "Producing safe, nutritious food and compliance with the law is the animal food industry's number one priority. However, given FSMAs far-reaching and expensive regulatory impact that extends into all areas of our members' business operations, we have been asking the Administration and Congress to provide a reasonable timeframe so that our members can conduct the necessary action they need and dedicate new resources to come into full compliance with the law."

The action by the FDA is an indication of their deficiencies in planning and execution. The egg industry will recollect the problems associated with introduction of on-farm inspections required under the Salmonella Prevention Rule. There was little coordination among regions carrying out inspections, personnel were totally ill-equipped and untrained to evaluate farms or to appreciate the realities of commercial egg production. Inspectors who had spent the majority of their careers in pharmaceutical plants were confronted with farms with high-rise houses, six feet of manure and mice. Initially the inspections were time-consuming and laborious since farmers, their Veterinarians and quality assurance personnel had to virtually train and instruct the FDA inspectors. The program only gathered speed when the USDA delegated responsibility for farm inspections in a number of states to respective department of agriculture in major egg-producing states including Ohio, Indiana, Pennsylvania, California and Iowa.

In advance of a FMSA debacle, the FDA would be well advised to step back, ensure that guidance documents are provided for review and comment by the industry. Inspectors must be trained as to what might be considered acceptable and normal and to realistically evaluate deviations from standard procedures. If FSMA degenerates into a paperwork exercise, the value with respect to prevention of food-borne infection will be lost.

The underlying message for FDA is that they should communicate with industry organizations and specialists in both industry and academia to establish standards and to ensure that personnel are appropriately trained before embarking on a national inspection program.

The Salmonella Prevention Program was incubated and hatched entirely in isolation by the FDA without consulting the industry. Within three months of inception of the program, individuals associated with the rule were still trying to obtain information on the efficacy of vaccination which had already been adopted by the U.S. industry as a standard and had proven effective in the E.U. for over a decade prior to 2010. The guidance documents were only available after initiation of the program

(SMS 1,345-17 August 16th 2017)