Egg Industry News

Walmart Reports on Q3 of FY 2019


In a press release dated November 15th Walmart Inc. (WMT) announced results for the 3rd Quarter of Fiscal 2019 ending October 31st 2018.

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

3rd Quarter Ending October 31st.



Difference (%)





Gross profit:




Operating income:




Net Income




Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt: January 31st




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets




Market Capitalization



52-Week Range in Share Price: $81.78 to $109.98

Market Close: Wednesday 14th November $101.55. Post-release 11H00 Thursday 15th November $99.29

Forward P/E: 21.2 Beta +0 5

Segment performance for Q3 comprised:-

Walmart USA: Operating profit of $3.94 billion on sales of $80.58 billion with 3.4 percent comp.

Walmart Int: Operating profit of $1.18 billion on sales of $28.79 billion with a range of 2.2% comp. for China to 5.3% Mexico

Sam's Club: Operating profit of $0.38 billion on sales of $14.52 billion with 3.2 percent comp.

E-commerce increased 43 percent for Walmart.

In commenting on results Doug McMillon, president and CEO stated "We're pleased with the overall results we posted for the third quarter. We continue to see strong comp. store sales. Our results reflect not only value our customers are finding in our offer, and a lot of hard work from the team, but certainly some macro tailwinds as well, especially in the U.S." He added "each of our segments achieved solid sales growth. Excluding fuel, comp, sales at Walmart U.S. increased 3.4 percent against last year's most difficult comparison, and Walmart U.S. E-Commerce grew sales 43 percent. Sam's Club grew comps 5.7 percent, excluding fuel and tobacco. Outside of the U.S., comp. sales were positive in all our major markets, led by Mexico's 6.3 percent gain. We were also pleased to officially welcome Flipkart to the Walmart family when we closed that acquisition on August 18. Overall, we're encouraged by the momentum in our business and excited to be in a strong position to invest for the future"

WMT raised EPS guidance for FY 2019 to a range of $2.26 to $2.36 and projected same-store sales to increase by 3.0 percent


Ahold-Delhaize Reports on Q3 FY 2018


Ahold-Delhaize, Dutch-based parent of Food Lion, Stop& Shop and Peapod among other banners, reported sales of $17.9 billion for the third quarter of 2018. This was a 3.6 percent increase over the corresponding period in FY 2017. The Company posted net income of $519 million up 27 percent from Q3, 2017.


For U.S. operations the company achieved growth in same-store sales of 3 percent.


Organic Acids Suppress ASF Virus in Feed


According to Dr. Tom Burkgren, Executive Director of the American Association of Swine Veterinarians, quoted in the November 15th edition of the Journal of the American Veterinary Medical Association, organic acids are efficient at suppressing African Swine Fever (ASF) and many other viruses in feed. Concern is raised over ASF which can survive in feed ingredients for up to 30 days suggesting that imported animal-protein ingredients could introduce infection. It is suspected that the extensive porcine epidemic diarrhea outbreak was introduced to North America in 2014 on contaminated feed bags.

The suggestion by Dr. Burkgren that imported additives including vitamins and amino acids from China may introduce a disease is highly speculative, is not supported by assays and is unlikely. Animal byproducts, however, could serve as a suitable vehicle of infection. Organic acids available commercially as Termin-8® and SalCurb® are approved feed additives and are

effective against non-spore forming bacteria and a wide range of viruses.


Connecticut to Install Third Digester for Biofuel


AG-Grind Energy will install a digester with a capacity of 850,000 gallons to convert food waste and animal manure into biofuel to be converted to electricity with an output of 450 kW. The installation will be funded in part by a grant from the Natural Resource Conservation Service and an investment tax credit partner.

The project will be erected at a cost of $5 million and will sell electricity to farms and municipalities. Two other digesters operate in Connecticut, located in Southington and East Canaan respectively.

As with many projects to convert waste to biofuel, obtaining a satisfactory volume of substrate is critical to maintain throughput. The project will cooperate with Blue East Compost in Hartford to collect food waste. U.S. Senator Richard Blumenthal attended the ceremony announcing the project and he has inserted a provision for recycling food waste in the 2018 Farm Bill.


Novogen Celebrates 10th-Year Anniversary


Novogen, part of Groupe Grimaud located in France, celebrates their 10th anniversary since founding by Mickael LeHelloco and Thierry Burlot, respectively, Managing Director and Director of Research and Development of the company.

LeHelloco commented “Our genetic program was the first to take an interest in societal expectations with regard to animal welfare.” Burlot stated “We didn’t only pick these criteria as a large number of our products are perfectly suitable for traditional farms, but a new research approach allowed us to be ahead of the game with regard to unexplored criteria including social behavior, laying time, time spent nesting and shell quality.”

Novogen products are distributed in 50 nations worldwide.

Novogen relies on the strength of the R & D and genetics programs of parent company Groupe Grimaud. Their platform includes genomics, the application of RFID chips and other innovative technologies.

Novogen is developing expertise in production management to assist customers in recognition that although a product is important, providing technical services is an important part of establishing a brand.


Seaboard Foods Settles with DHS


Seaboard Foods has announced settlement of a long-standing claim by the U.S. Department of Homeland Security Immigration and Customs Enforcement Agency (ICE) over alleged errors in I-9 documentation. The company agreed to pay $1 million, but denies wrongdoing. The alleged discrepancies occurred between 2007 and 2012 and no criminal charges were filed.

In a statement issued by Seaboard, the company denied each and every allegation and explicitly emphasizes that the settlement is not an admission of liability. Darwin Sand, President and CEO of Seaboard Foods stated that he was pleased to have the matter resolved. He commented “Our company demands adherence to all laws, rules and regulations everywhere we operate and we take our compliance obligations seriously.” He added “in the settlement agreement, ICE and the State of Oklahoma employed company-wide compliance efforts both prior to and subsequent to the investigation.”

In many cases, regulations during the 2005 through 2010 period were vague and inadvertent non-compliance was common as evidenced by similar “no-wrongdoing” settlements by egg and broiler producers. These long-standing demands by ICE are thinly disguised shakedowns since the cost of defending civil actions and the need to divert executive time invariably justifies a settlement. On the basis of “you can’t fight City Hall”


Updated USDA Projections for 2018 and 2019 Egg Production


The USDA Economic Research Service issued an updated November 15 th 2018 forecast of egg production. The volume of eggs produced and per capita consumption in 2019 were increased by 1.7 and 0.2 percent respectively over 2018. Consistent with this disparity the benchmark New York price was reduced by 12.1 percent in unit value Production data reflecting 2016 and 2017 should be compared to 2015 which was impacted by the Spring outbreak of HPAI in the upper-Midwest. The latest data is reflected in the table below.
















2018 2019 Difference %

(projection) (forecast) 2018 to 2019





Production (m. dozen)




7,844 7,980 +1.7%


Consumption (eggs per capita)




279.5 280.1 +0.2%


New York price (c/doz.)




141 124 -12.1%



Source: Livestock, Dairy and Poultry Outlook - November 15th 2018

*Impacted by Spring 2015 HPAI outbreaks. Consumption in 2014, 267 eggs per capita

Subscribers to EGG-NEWS are referred to the postings depicting weekly prices, volumes and trends and the monthly review of prices and related industry statistics.


USDA Weekly Egg Price and Inventory Report, November 14th 2018.

  • Hen Numbers in Production increased 1.2 million to 322.4 million.
  • Shell Inventory Down by 4.5 Percent from Previous Week.
  • USDA Midwest Benchmark Generic Prices for Extra Large, Large and Medium Sizes up Respectively by 6.1, 6.3 and 12.7 Percent from Past Week.



According to the USDA Egg Market News Reports posted on November 13th the Midwest wholesale prices for Extra Large, Large and Medium sizes were up respectively by 6.1, 6.3 and 12.7 percent compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The November 13th USDA Egg Market News Report (Vol. 65: No. 46) documented a USDA Combined Region value rounded to the nearest cent, of $1.19 per dozen delivered to warehouses week ending November 9th. This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.10 per dozen. At the high end of the range, price in the South Central Region attained $1.25 per dozen. The USDA Combined Price last week was 5 cents per dozen below the three-year average and 3 cents per dozen above the corresponding week in 2017.


Walmart Beats Amazon in Grocery E-Commerce Survey


Matthew Boyle of Bloomberg recently reported on the survey conducted by Retail Feedback Group dealing with service provided by online retail groceries.  Walmart scored on the Click-and-Collect service deployed in 2,000 stores with an additional 1,000 to be added by the end of 2019.  Walmart also makes use of DoorDash and Deliv for home delivery against payment of a fee. 


Amazon offers grocery delivery from Whole Foods Market stores for Prime customers in 60 cities and has recently introduced in-store pickup.


Predictably the survey determined that perishable products including meat, seafood and produce are purchased preferentially in-store as consumers believe this ensures freshness


USPOULTRY Allocates $385,000 in Research Grants


USPOULTRY Foundation has approved $385,000 for five research grants through the Comprehensive Research Program.

The projects as selected comprise:

  • Improving Cage Free Air Quality, Hen Welfare and Egg Quality with Artificial Turf and A Manure Removal System - Purdue University (made possible by a gift from Midwest Poultry Services)

  • Examining the Roles of Macrophages and Vascular Inflammation in Broiler White Striping University of California - Davis (with a grant from Simmons Foods)

  • Identifying the Contribution of Broiler Genetics on Gut Health and Immune Response When Challenged with Salmonella Typhimurium - University of Maryland (with a grant from Ingram Farms)

  • Investigating the Impact of Anthelmintic Resistance in Nematode Parasites of Poultry -University of Georgia (with a gift from Wayne Farms LLC)

  • Response of Broilers Fed Phytase Enzymes of Different Optimal pH Ranges Alone or in Combination - Mississippi State University (with a grant from Peco Foods)

In commenting on the awards, Tom Hensley of Fieldale Farms noted, "Research continues to be an important component of USPOULTRY and the Foundation as a service to the industry." He paid tribute to the Research Advisory Committee for its efforts in evaluating proposals and providing recommendations for funding.


Phibro Animal Health Reports Q1 Results


On November 6, Phibro Animal Health reported results for the first quarter of Fiscal 2019 ending September 30th 2018.  The company posted net income of $16.3 million on sales of $200.2 million.  Net income and sales were both three percent higher than the corresponding first quarter of Fiscal 2018. 


In commenting on results, Jack Bendheim Chairman, president and CEO stated, “Our animal health business reported another positive quarter despite turbulence in currencies, economic conditions in certain countries and continued weakness in the dairy fundamentals.”  He added, “We are investing P & L expense dollars to develop future growth opportunities.  The spending is focused on expanding our portfolio of nutritional specialty and vaccine products and developing an entry into the companion animals segment.”

Jack Bendheim


Hendrix-Genetics Receives Grant for Africa Project


The Bill and Melinda Gates Foundation has awarded a multi-year grant to Hendrix-Genetics to establish a breeding program to develop strains suitable for rural Africa supplying smallholder farmers.


The project entitled Sustainable Access to Poultry Parent Stock to Africa will provide improved dual-purpose breeds intended to perform under difficult conditions on the Continent.

Louis Berrault, General Manager of Sasso stated, “We are excited to use our extensive expertise in poultry breeding to benefit smallholder farmers in Africa.”  He added, “With the Foundation’s support we are committed to further build on a sustainable infrastructure to supply healthy parent stock across Africa.”

Randall Ennis, CEO of the World Poultry Foundation commented, “This project will give a huge boost in realizing how the Foundation’s mission of poultry as a solution for the hungry as it empowers farmers to build a better life with improved breeds to secure their income.”


Although improved genetics will be beneficial, restraints to achieving acceptable production at the smallholder level include adequate nutrition and disease.  A model which has proved successful in some nations involves distribution of started pullets to be housed under confinement in villages.  Distribution of day-old chicks without a support structure for vaccination and absent a supply of balanced feed is a worthless exercise.


In the context of urban demand in nations with an infrastructure of harbors, roads and domestic production of feed ingredients and a cold chain for distribution, using improved specialty breeds for eggs and broilers respectively, represents a greater benefit to the population based on superior performance especially in feed conversion.


Export of Shell Eggs and Products January-September 2018.


USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing January-September 2018 with the corresponding period in 2017:-


Jan.-Sept. 2017

Jan.-Sept. 2018


Shell Eggs


Volume (m. dozen)



-4.9 (-5.4%)

Value ($ million)



+8.0 (+9.1%)

Unit Value ($/dozen)



+0.24 (+27.6%)

Egg Products




Volume (metric tons)



-8,737 (-26.6%)

Value ($ million)



+0.3 (+0.4%)

Unit Value ($/metric ton)



+961 (+36.8%)





Shell egg exports from the U.S. during January-September 2018 decreased by 4.9 percent in volume but increased 9.1 percent in total value compared to January-September 2017. Unit value was higher by 27.6 percent or 24 cents per dozen for the comparison between 2017 and 2018. The top two importing nations represented 78.5 percent of volume and 74.3 percent of value.

Canada was the leading importer over nine months, with 34.1 million dozen representing 39.1 percent of volume and 41.1 percent of value of U.S. shipments of shell eggs with an average unit value of $1.15 cents per dozen. Shell eggs shipped to Canada represent the difference between domestic demand and production limited by a national permit system.

Hong Kong ranked a close second in imports during the first nine months of 2018 with 33.6 million dozen representing 38.9 percent of volume and 33.2 percent of value at $31.9 million with a unit value of $0.95 per dozen.

Mexico was a distant third in rank during the first nine months of 2018 with 5.2 percent of volume and 4.7 percent of value,

The Caribbean Region represented 6.2 percent of export volume in January-September 2018. This region was down 60.7 percent in volume and 26.6 percent in value compared with January-September 2017. The unit value of shell eggs exports to the Caribbean averaged $2.13 per dozen for the nine-month period in 2018 which appears inordinately high, warranting validation of USDA data or an investigation of the price discrepancy.


The total volume of exported egg products during the first nine months of 2018 decreased by 26.7 percent but total value was higher by 0.4 percent compared to January-September 2017. Unit value increased by 36.5 percent to $3,573 per ton from $2,612 for January-September 2017, reflecting the relationship between World supply and demand. Export volume during 2017 was influenced by the fipronil crisis and by avian influenza in the E.U.

During January-September 2018, Japan represented 32.5 percent of the total U.S. export volume with 8,471 m. tons, a decrease of 4.3 percent over the first nine months of 2017.

Mexico continued as the 2nd-ranked importer with 3,495 m. tons representing 14.5 percent of volume and 11.5 percent of value at $9.9 million. Mexico decreased volume over January-September 2018 by 29.0 percent and total value decreased by 2.9 percent compared to the corresponding nine months of 2017. In September 2018 imports of egg products by Mexico fell by 29.1 compared to September 2017.

Canada ranked third among importers attaining 14.7 percent of volume and 10.0 percent of value exported.

For January-September 2018, the 4th-ranked E.U-28 imported 1,698 m. tons of egg products, representing 7.0 percent of the volume during the first nine months of 2017 and 35.0 percent less value compared with the first three quarters of 2017. Volume of 2,251 m. tons in 2017 was presumably influenced by shortages occasioned by HPAI. The transitory impact of fipronil contamination ceased in early 2018 as flocks were replaced in Holland and Belgium.

South Korea posted a 79.5 percent lower volume for January-September 2018 compared with the first nine months of the previous year. Value declined by 53.6 percent with a unit value of $4,841 per m. ton which is far in excess of the average value of $3,573 denoting a special product mix.


Successful conclusion of NAFTA negotiations led to the trilateral USMCA announced on September 30th. Exports of shell eggs and egg products to our neighbors were valued at $74.7 million in 2017.

Prospects for long-term exports of shell eggs will be limited by the willingness of importers to accept the World Organization for Animal Health (OIE) principle of regionalization in the event of exotic Newcastle disease and isolation of H5 or H7 avian influenza irrespective of pathogenicity. This concern follows the early 2017 cases of North American-lineage H7N9 HPAI in broiler breeders and some backyard flocks. Most importing nations, with the noted exception of China, are now applying regionalization and permitting imports on a county or state-exclusion basis following H5 or H7 AI infection.

The recent diagnoses of END in over 170 backyard flocks in five counties in California should not impact exports since importers are complying with the OIE principle of regionalization. The outbreaks of LPAI in four organic turkey flocks in California and six commercial flocks in Minnesota should not impact export of eggs.

Generally pasteurized egg products should not be subject to any embargo imposed following reports of AI.




According to the November 8th 2018 WASDE Report #583, 81.8 million acres of corn will be harvested in 2018 to produce 14.62 Billion bushels. The soybean crop is projected to attain 4.60 Billion bushels from 88.3 million acres harvested. The levels of production for the two commodities are based on revised projections of yield and acreage harvested. Ending stocks were revised based on anticipated domestic use and exports.

See the WASDE posting summarizing the November 8th USDA-WASDE Report #583 in this edition documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest

Quarterly corn and soybean stocks were estimated by USDA in a release on September 28th to total 2.14 Billion bushels (14.7 percent of the 2017 harvest) and 0.44 Billion bushels (10.0 percent of 2017 harvest) respectively. Of the "old soy crop" 0.10 Billion bushels are held as on-farm storage, up 15 percent from the corresponding period in 2017. Off-farm storage is up 58 percent to 0.34 billion bushels. Disappearance from June to August was 0.78 Billion bushels, up 18 percent from the corresponding period in 2017. This reflects accelerated shipments in anticipation of increased tariffs imposed by China. Since August soybean exports to China have ceased.

The following quotations for the months as indicated were posted by the CME at close of trading on November 9th together with values for the corresponding months in parentheses confirmed a slight decline in prices after an upturn during the previous week.



Corn (cents per bushel)

Dec.'18 369 (371)

March '19 380 (383)

Soybeans (cents per bushel)

Nov. '18 875 (874)

March '19 899 (899)

Soybean meal ($ per ton)

Dec. '18 306 (311)

March '19 311 (315)

Changes in the price of corn, soybeans and soybean meal were:-


Corn: Dec. quotation down 2 cents per Bu. (-0.5 percent)

Soybeans: Nov. quotation up 1 cent per Bu. (+0.1 percent)

Soybean Meal: Dec. quotation down $5 per ton (-1.6 percent)

  • For each 10 cent per bushel change in corn:-

The cost of egg production would change by 0.45 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

  • For each $10 per ton change in the price of soybean meal:-

The cost of egg production would change by 0.40 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

Markets were essentially unaffected by release of the November WASDE. There is no immediate prospect of resolving the trade dispute with China before the 2018 harvest is completed. The Administration previously announced that negotiations are underway to arrange a meeting between President Trump and Premier Xi in late November at the G-20 Meeting but there has been no confirmation of a specific date or agenda. Markets fluctuate in response to conflicting messages from the White House concerning possible resolution of trade issues with China.

The financial future for row-crop farmers appears bleak despite the promise of $12 billion as "short-term" compensation. Recent comments from the USDA suggest that this value may be trimmed. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. Of course the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift which keeps on giving. The RFS is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


R-Calf in Montana Granted a Motion to Include 13 Other States in Lawsuit


The Federal district court in Montana has granted a motion for R-Calf, the plaintiff in a lawsuit against the U.S. Department of Agriculture to consolidate 13 additional states in the action.

The USDA is under injunction not to compel cattle producers in Montana to pay the Montana Beef Council without obtaining consent from producers. According to a report in the Kansas Ag Connection on November 6th, cattle producers can individually decide if they want half of the mandatory assessments collected to be spent by the Montana Beef Council or alternatively all of their contributions to be assigned to the Cattleman’s Beef Board checkoff program under the control of the USDA-AMS.

R-Calf claim that the various state beef councils have been sending as much as $10 million in checkoff funds annually to the National Cattleman’s Beef association which serves as a lobbying group without the strict controls imposed on the Cattleman’s Beef Board.

For a number of years, discontent in the beef industry has been simmering, and the use of checkoff funds is an important consideration among producers belonging to industry groups administered by the USDA. Generally checkoff funds can be used for research, promotion of a commodity and educational purposes with the objective of ethical promotion of a product. Federal law disallows funds to be used for lobbying or promotion of commercial entities or brands or disparagement of products or companies.


SELEGGT Unveils Gender Selection Technology


A joint venture between Dutch incubation company HatchTech and German supermarket chain REWE Group has developed a practical gender identification system for commercial-level hatching eggs with funding from the German Federal Ministry of Food and Agriculture.


On the 9th day of incubation a sample of allantoic fluid is withdrawn through a laser-produced  hole in the shell 0.3 mm in diameter. The fluid is assayed in real time for the presence of estrone indicating an egg with a female embyo. This allows removal of half the setting comprising eggs wit male embryos. According to preliminary studies the outer shell membrane seals the extraction aperture and does not affect hatchability or chick quality.

REWE will market commercial eggs designated as derived from pullets “without brothers” This is considered a marketing advantage in a nation increasingly concerned over the destruction of 45 million day-old cockerel chicks.


Seleggt GmbH is developing a business model to make the system available as a “cost-neutral” service. Commercial application is anticipated in early 2020. REWE will roll-out commercial eggs initially in 223 stores in Berlin and will extend to 5,000 REWE and PENNY stores in Germany.

The integrity of the process will be ensured through blockchain technology.


In commenting on the Seleggt process unveiled on November 8th representatives of the the participating entities commented on the technical achievement and prospects:-


The Federal Minister of Food and Agriculture Julia Klöckner stated “This is a great day for animal welfare in Germany. In this way we will set the pace in Europe. My Ministry has provided around five million euros to support research for promising methods of gender identification in hatching eggs. With  the market readiness of the process presented today, Germany is a pioneer. Now it is possible to identify the gender of the chicks in the hatching egg through a needle-tip tiny hole. Male hatching eggs no longer need to be incubated and killed immediately after hatching.

Dr. Ludger Breloh, Managing Director of SELEGGT stated “The Ministry's funding was tremendously important to us, especially during the research phase at the University of Leipzig. I would like to express my sincere gratitude to the ministry for this support.

Despite all the euphoria, we still have a long way to go. We will work vigorously from our side to make the SELEGGT process available to the hatcheries as a cost-neutral system. Next year, we intend to move from market readiness to start of production Jan Kunath, the Deputy Chief Executive Officer of REWE Group said “REWE Group promotes and funds change processes in the industry that take social demands into account – even beyond those outside the company’s own business divisions. For this reason, REWE Group set up SELEGGT GmbH, a joint venture whose mission is to conduct basic research on endocrinologic gender identification in hatching eggs until market-ready solutions are developed. I am therefore all the more pleased that, as of today, we can offer customers in our REWE and PENNY stores an alternative husbandry”


Further information is available on


Mexico Reports H7N3 HPAI on Small Farms


According to a report to the World Organization for Animal Health, Mexico identified cases of H7N3 HPAI on egg production farms in each of the states of Queretaro and Guanajuato. Outbreaks involved an egg production farm and a flock of fighting cocks.

HPAI can be regarded as endemic in many states in Mexico but is suppressed by administration of inactivated vaccines.

The avian influenza situation is continuously monitored by SENASICA, equivalent to USDA APHIS.


USDA-WASDE FORECAST #583 November 8th 2018



The October 11th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on actual planting data, crop progress with monitoring by "scouts", recorded crop progress and the fact that 70 percent of the new-crop corn and 87 percent of soybeans have been harvested. The acreage for corn was retained from the July through October projections at 81.8 million acres (83.1 million in 2017). Soybeans will be harvested from 88.3 million acres (89.5 million acres in 2017).

The USDA lowered corn yield by 1.0 percent to 178.9 bushels per acre from the October WASDE (175.4 bushels in 2017). Soybean yield was reduced by 1.9 percent from October to 52.1 bushels per acre (49.5 bushels in 2017).

The November USDA projection of ending stock for corn was lowered by 4.4 percent to 1,736 million bushels. Ending stock for soybeans was raised 7.7 percent to 955 million bushels resulting in predictable declines in CME quotations.

The 2018 corn and soybean crops will be the second largest ever but will be harvested during a time of uncertainty regarding previously projected, anticipated and actual export volumes. The USDA projections of ending stocks and hence prices for corn and soybeans take into account current announced tariffs on U.S. products but do not reflect tariffs or unlikely resolution of the trade conflict with China.


Salmet Appoints Regional Business Manager, U.S. and Canada


Peter Mumm will serve as the Regional Business Manager for U.S. and Canada for Salmet GmbH & Co KG.  Peter is a 25 year veteran of the North American Egg Industry and was previously affiliated to a major primary breeder.


Egg Nutrition Center Appoints Director of Research


The American Egg Board announced that Dr. Jen Houchins will serve as the director of Nutrition Research coordinating the ongoing research program and professional communications.


Previous Dr. Houchins served five years with the National Dairy Council as the Director of Regulatory Affairs.  Dr. Houchins earned a baccalaureate degree from the University of Minnesota and was awarded a PhD by Purdue University.  She is a Registered Dietician and can be contacted at


ENC Presented Promotional Event at Food and Nutrition Conference


From left to right, Dr. Mickey Rubin and Katie Hayes, ENC and Paul Sauder, Sauder’s Egg, PA.

The Egg Nutrition Center, a unit of the American Egg Board hosted a breakfast event for attendees at the 2018 Food and Nutrition Conference and Expo.  Special guest speaker was the chair of the AEB Member and Consumer Marketing Committee, Paul Sauder who provided a perspective on U.S. egg production.


Egg Nutrition Center Emphasizes Importance of Lutein Intake


Dr. Elizabeth Johnson of Tufts University and Dr. Naiman Khan of the University of Illinois presented scientific data demonstrating the benefit of dietary lutein on brain and eye function at the 2018 Food and Nutrition Conference.


The Egg Nutrition Center operated a Macular Pigment Optical Density instrument at the Expo to measure the concentration of macular lutein in the eyes of attendees.  It is considered significant that approximately 15 percent of those screened among a population of registered dieticians showed suboptimal levels of lutein.


Lutein is present in the yolk of eggs and nutritional value can be enhanced supplementing diets with natural pigments extracted from marigold petals which supply xanthophylls and lutein.


There is no U.S. RDA for lutein which is considered a critical nutrient. Dietary supplementation is recommended to prevent macular degeneration.


FDA Issues Recommendations Following Arizona STEC Contamination


As the growers in the Yuma Valley, AZ plant their crops for the 2019 season, the FDA has issued recommendations based on the belated investigation of the extensive STEC outbreak attributed to Romaine lettuce earlier this year.


Based on an assessment of the source of the STEC involved in an outbreak, the FDA have placed emphasis on preventing contamination of that irrigation water.  The recommendations also include suggestions to process and pack ready-to-eat produce.  It is self-evident that in the absence of an effective decontamination procedure, lettuce, spinach and other leafy vegetables that are harvested with E. coli or other pathogens present will represent a risk to consumers.


Regulations introduced by the Leafy Growers Association to distance fields from Concentrated Animal Feeding Operations including dairy farms and feed lots will be beneficial.  It is however necessary to constantly monitor irrigation and processing water for the presence of E. coli which may be present in sub-surface water as a result of percolation and runoff.


At the present time irradiation is the only absolutely effective measure to decontaminating leafy vegetables with bacteria causing foodborne disease.  This would involve installing electron beam pasteurization, analogous to X-rays at packing plants or transfer of pallet-loads of packed product to a central facility using cobalt60 isotopic irradiation at dose rates subject to FDA approval.  Ultimately consumers will have to decide whether they are willing to accept innocuous irradiation or endure with recurrent outbreaks of listeriosis, salmonellosis and colibacillosis.


Elanco Animal Health Enters into Strategic Partnership with Novozymes


Elanco Animal Health will collaborate with Novozymes in the area of ruminant nutrition.  It is intended for the joint venture to undertake research and development to produce commercially acceptable products within a decade.  It is to be expected that the results of the collaboration will eventually extend to monogastric species including poultry.


ADM Reports on Q3 of FY 2018


In a press release dated November 6th Archer Daniel Midland Company (ADM) announced results for the 3rd Quarter of Fiscal 2018 ending September 30th 2018.

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

3rd Quarter Ending September 30th.



Difference (%)





Gross profit:




Operating income:




Net Income




Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets




Market Capitalization



*Includes $196 million in non-recurring revenue from sale of assets and other sources

52-Week Range in Share Price: $38.59 to $52.07

Market Open Nov. 7th post release $47.68

Forward P/E: 13.3 Beta 0.7

The team delivered another strong quarter, capitalizing on robust global demand with good execution and great utilization of our global footprint," commented ADM Chairman and CEO Juan Luciano. He opined "For the last several years, through good conditions and bad, we've remained focused on serving our customers and delivering our strategic plan - optimizing our core, driving efficiencies, and expanding strategically. Now, as we look forward to 2019, we are continuing to enhance our earnings power, both through our growth investments and our Readiness initiative, which is beginning to drive fundamental changes in the way we run our company.

He concluded "Thanks to the team's great work and the growing benefits of our strategic actions, we expect a solid end to 2018, as well as continued momentum for growth in earnings and returns in 2019 and the years to follow."


EPA to Exempt Farms From Air Release Reports Under EPCRA


The Environmental Protection Agency has proposed changes to the Emergency Planning and Community Right to Know Act (EPCRA) to exempt farms from reporting air releases derived from animal waste.

The Fair Agricultural Reporting Method Act passed by Congress on March 23rd clearly stated that it was not the original intention of EPCRA to cover low-level air releases from natural degradation of manure as an emergency notification.

The decision by the EPA was warmly received by the U.S. Poultry and Egg Association, the National Chicken Council, National Turkey Federation and United Egg Producers. In a joint statement, the industry groups noted “The removal of this unnecessary burden will ensure that emergency first responders’ important effort and time is not wasted on responding to non-emergencies.”


Kroger Places Orders for Ocado Mechanized Warehouse Installations


Following the agreement between the Kroger Company and Ocado in the U.K. during May, Kroger has confirmed orders for three mechanized warehouse installations to be termed “fulfillment centers”.

Previously Ocado provide robotic warehouse installations for U.K. supermarket chain Morrison’s in addition to Casino in France, Sobeys in Canada and ICA Group in Sweden.

Subject to satisfactory function, Kroger intends purchasing 20 units over a three-year period.

In terms of the agreement, Ocado will install and maintain the robotic warehouse installations against payment of an upfront fee and a royalty.



  • October 2018 USDA Ex-Farm Benchmark Price up 10.5 Percent from September Consistent with Seasonal Trends.

  • USDA Average Nest-run Production Cost Fractionally Lower to 60.0 cents per dozen.

  • Positive USDA Benchmark Nest-run Margin Increased 61.4 percent from September to 20.5 cents per dozen



Summary tables for the latest USDA October 2018 statistics and prices made available by the EIC on November 5th are arranged, summarized, tabulated and reviewed in comparison with values from the previous October 8th 2018 posting reflecting September 2018 data.






5-Region Cost of Production ex farm (1st Cycle)

60.08 c/doz

59.98 c/doz


55.17 c/doz (MW)

55.65c/doz (MW)


76.68 c/doz (CA)

77.03 c/doz (CA)


Components of 6-Region 1stCycle Cost of Production:-





31.72 c/doz


Pullet depreciation

10.84 c/doz

10.84 c/doz


4.00 c/doz

4.00 c/doz


5.30 c/doz

5.30 c/doz

Miscellaneous and other*

8.22 c/doz

8.21 c/doz

* adjusted February 2018

Ex Farm Margin according to USDA values reflecting OCTOBER 2018:-

80.5 cents per dozen1- 60.0 cents per dozen = +20.5 cents per dozen

(September 2018 comparison 72.8 1 cents per dozen - 60.1 cents per dozen = +12.7 cents per dozen.)




Based on the importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders. There is some doubt as to the accuracy of the monthly flock numbers and the question is raised whether it would be more desirable to post accurate quarterly data in place of erratic monthly figures.

EGG-NEWS summarizes and comments on data and trends in the monthly USDA Cage-Free Report, supplementing the information posted weekly in the EGG-NEWS Egg Weekly Price and Inventory Report.

The USDA Cage Free Report for the month of October 2018 released on November 2nd 2018 documented constant flock sizes in hens producing under the Certified Organic seal and for cage-free flocks as compared to September 2018. Organic and cage-free egg production were down <0.1 percent from September. The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. Average flock production remained at 75.3 percent for both categories of non-caged hens (accepting USDA data):-

Flock size '18 (million hens)







Certified Organic







Cage-free hens







Total non-caged







Average weekly production cases, October 2018 Δ

Certified Organic

229,517 was 229,356 Sept. < -0.1%


606,787 was 606,304 Sept. < -0.1%

Total non-caged

836,304 was 835,660 Sept. < -0.1%

Average Wholesale Contract Price Cage-Free Brown

$1.56/doz. Down 3 cents/doz. From Sept.

Range unchanged at:

$1.15 to $2.10/doz. (Av. $1.56/doz)

FOB Negotiated price, grade quality nest- run, loose

Average up 0.9 percent from September with narrower spread

$1.02 to $1.37/doz. (Av. $1.14/doz)

Average Advertised National Retail Price C-F, L, Brown

$2.62/doz. (was $2.55 September)

USDA 6-Region

High: NE

$2.96/doz. $2.74 SW


Low: MW

$2.19/doz. $2.24 MW


Kindly refer to weekly USDA wholesale and retail prices posted in the EGG-NEWS Egg Price and Inventory Report E-mailed each Friday. The previous Monthly Cage-Free Report is available under the STATISTICS Tab.


Status of 2018 Corn and Soybean Crops


The USDA Crop Progress Report released on November 5th updated the 2018 corn and soybean harvest.

Seventy-six percent of the corn crop has been harvested conforming to the 5-year average. There is concern over mycotoxicosis associated with early and persistent drought which occurred in some Midwest states during the "silking" stage coupled with wet conditions at the time of harvest.

Eighty-three percent of the soybean crop has been harvested compared to eighty-nine percent for the 5-year average. Harvest was delayed by rain during the past three weeks but advanced eleven percent this past week. The problem facing farmers and elevators will be storage given the rise in ending stocks occasioned by cessation of exports to China. Some relief may occur with the sale of the Southern Hemisphere harvest.

EGG-NEWS and CHICK-NEWS will report on the progress of the two major crops as monitored by the USDA and will continue posting updates through the end of harvest.


Crop Parameter (%)

October 28th

November 4th

5-Year Average

Corn Emerged

Corn Silking

Corn Dough

Corn Denting

Corn Mature

Corn Harvested




















Soybeans Emerged

Soybeans Blooming

Soybeans Setting Pods

Soybeans Dropping Leaves

Soybeans Harvested



















According to the October 11th 2018 WASDE Report #582, 81.8 million acres of corn will be harvested in 2018 to produce 14.78 Billion bushels. The soybean crop is projected to attain 4.69 Billion bushels from 88.2 million acres harvested. The levels of production for the two commodities is based on revised projections of yield and acreage harvested. Ending stocks were revised based on anticipated domestic use and exports.


Quarterly corn and soybean stocks were estimated by USDA in a release on September 28th to total 2.14 Billion bushels (14.7 percent of the 2017 harvest) and 0.44 Billion bushels (10.0 percent of 2017 harvest) respectively. Of the “old soy crop” 0.10 Billion bushels are held as on-farm storage, up 15 percent from the corresponding period in 2017. Off-farm storage is up 58 percent to 0.34 billion bushels. Disappearance from June to August was 0.78 Billion bushels, up 18 percent from the corresponding period in 2017. This reflects accelerated shipments in anticipation of increased tariffs imposed by China. Since August soybean exports to China have ceased.


The following quotations for the months as indicated were posted by the CME at close of trading on November 2nd together with values for the corresponding months in parentheses indicating an upturn in prices after declines during the previous week.




Corn (cents per bushel)

Dec.’18   371   (367)        

March ‘19  383  (379)

Soybeans (cents per bushel)

Nov. ’18  874  (846)*   

March ’19  899  (872)      

Soybean meal ($ per ton)

Dec.  ‘18  311  (308)*

March ’19  315  (311)

*values reflect 2017 harvest


Changes in the price of corn, soybeans and soybean meal were:-


Corn:                      Dec. quotation up 4 cent per Bu.                        (+1.1 percent)

Soybeans:               Nov. quotation up 29 cents per Bu.                     (+3.4 percent)

Soybean Meal:         Dec.  quotation up $3 per ton                             (+1.0 percent)                                

  • For each 10 cent per bushel change in corn:-

The cost of egg production would change by 0.45 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight

  • For each $10 per ton change in the price of soybean meal:-

The cost of egg production would change by 0.40 cent per dozen

The cost of broiler production would change by 0.25 cent per pound live weight


Markets were essentially unaffected by release of the October WASDE. There is no immediate prospect of resolving the trade dispute with China before the 2018 harvest is completed. The Administration previously announced that negotiations are underway to arrange a meeting between President Trump and Premier Xi in late November but there has been no confirmation of a specific date or agenda. Markets fluctuated in response to conflicting messages from the White House concerning possible resolution of trade issues with China.


The financial future for row-crop farmers appears bleak despite the promise of $12 billion as “short-term” compensation. Recent comments from the USDA suggest that this value may be trimmed. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. Of course the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift which keeps on giving. The RFS is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


See the WASDE posting summarizing the October 11th USDA-WASDE Report #582 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest.


U.K. to Tax Plastic Packaging


The 2018 U.K. budget included a provision to tax non-recyclable plastic packaging. This would apply to both domestic and imported product. The criterion for taxation will be less than 30 percent recycled material. According to Phillip Hammond the Chancellor of the Exchequer (equivalent to the U.S Treasury Secretary), the tax will “transform the economics of sustainable packaging”.

Prime Minister Theresa May has committed Britain to eliminating avoidable plastic waste by 2042.


Evonik Invests in In Ovo Gender Determination


InOvo, founded in 2013 by scientists affiliated to the University of Leiden is a company vying for a breakthrough in early embryonic gender determination. According to press reports their system is based on removal of a sample of (presumably) allantoic fluid from the egg prior to the time of setting to determine the presence of a biomarker applying mass spectrometry.

If this process requires genetic manipulation for the placement of a biomarker on a chromosome determining gender, the process will in all probability not be acceptable to the major breeders who have eschewed any application which could be regarded as genetic manipulation. Furthermore, the abstraction of fluid from an egg prior to incubation for automated assay will require equipment and installations reminiscent of the gender-sorter developed by Embrex in the late 1990s which proved financially infeasible.

The investment made by Evonik will be used by InOvo to advance technology from a laboratory demonstration of proof of principle to hopefully a commercial prototype.


Is Amazon Go™ the Future of Supermarkets?


Andrew Tarantola writing in Engadget on October 27th makes a strong case that Amazon Go™ will be the future of supermarket shopping. He recounts the history of innovation in grocery shopping from the 1905 Astor Market in Manhattan which failed. The forerunner of modern supermarkets was 30-years ahead of its time but lacked support. Customers were used to purchasing dairy, meat and groceries in separate specialty stores with interaction with the proprietor and his staff.

The supermarket concept was developed by Piggly Wiggly in the early 1950s to cater for suburbanites with autos in the post-WWII era. The innovation comprised selecting items from shelves with payment at a checkout counter.

Barcoding was developed in the late 1940s, but was only introduced in the 1970s since it required considerable technical refinement, innovation and acceptance by consumers.

Shopping without checkout may appear efficient and technologically beneficial, but consumers will have the last say as to acceptability. If there are snafus in reading codes or if consumers make errors in selection and wish to substitute or cancel an item the system may result in confusion.  It must be remembered that over a decade ago, self-checkout counters were introduced with great fanfare. Apart from quick-service lanes with customers purchasing a limited number of items all barcoded, the system has minimal application and is not cost-effective either in terms of labor saving or goodwill.

The heading of the article proclaiming that Amazon Go™ will be “the future of supermarkets” may be more presumptuous than prescient.




The following breaking items are of interest to the poultry industry and will be considered in subsequent editions of EGG-NEWS and CHICK-NEWS:

  • Pilgrim's Pride posts lower sales and sharply diminished earnings: The October 31st release by Pilgrim's Pride Corp. on the third quarter denoted a 3.2 percent decline in revenue compared to Q3 2017 to $2.7 billion. Net earnings of $29.3 million contrasted with $232.7 million in the corresponding quarter of 2017. EPS was reduced proportionately to $0.12 in the most recent quarter from $0.93 in Q3 of 2017. The Company attributed the decline in performance to "weak pricing"

  • Zacky Farms to cease operations: The Company has undergone successive restructuring and refinancing but has been removed from life support and will wind down operations by mid-January 2018.

  • Zoetis achieves exceptional results for Q3: In a November 1st press release multinational biopharmaceutical manufacturer Zoetis earned $347 million on sales of $1.5 billion. Poultry products comprising vaccines, diagnostics and pharmaceuticals represented 8.8 percent of worldwide revenue.

  • Idexx achieves sales and profit from companion animal market: Although a groundbreaker in poultry diagnostic technology introducing ELISA assay systems 35 years ago Idexx has transitioned to companion animals. In the third quarter of 2018 Idexx earned $93 million on sales of $545 million reflecting higher margins in pets. The Livestock/poultry/dairy segment represented 5.3 percent of sales and contributed 3.4 percent of operating profit.

  • Proponents of California Proposition #12 raise tenfold more than opposition: The coalition of animal welfare groups including the ASPCA and HSUS supported by the State Democratic Party, United farm Workers and the Sierra Club have raised over $1.6 million as of September 28 th compared to less than $0.6 million for groups advocating a NO vote. A positive vote as expected will phase out confined housing for livestock including hens allowing aviary and floor systems for production of eggs produced or transported into the State.


Zoetis Reports on Q3 of FY 2018


In a press release dated November 1st 2018 Zoetis (ZTS) announced results for the 3rd Quarter of Fiscal 2018 ending September 30th 2018.

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

Quarter Ending. Sept. 30th



Difference (%)





Gross profit:




Operating income:




Net Income




Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt: Dec 31st. 2017/2016




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets Dec 31st. 2017/2016




Market Capitalization



52-Week Range in Share Price: $67.44 to $96.57

Market Close Nov. 1st $94.25 (+4.6%)

Forward P/E: 32.6

Livestock sales represented 52.6 percent of revenue (55.9 percent Q3 2017); Poultry represented 8.8 percent of sales (8.8 percent) International sales were 47.9 percent of revenue (33.9 percent)

Juan Ramón Alaix, CEO of Zoetis commented "continued delivering strong results in the third quarter, with 12% operational growth in revenue and 32% operational growth in adjusted net income," He added "our companion animal products performed well, primarily based on our key dermatology brands, new parasiticides and the addition of the Abaxis diagnostics portfolio. Meanwhile, in livestock products, our swine, poultry and fish portfolios each delivered double-digit growth, with more modest growth in our cattle business. Our diverse portfolio provided us with steady performance across markets, species and therapeutic areas, and we continue to invest internally and externally to support future growth."

F0r FY 2018 ZTS provided guidance for revenue of $5.75 billion to $5.85 billion, with EPS ranging from $3.08 to $3.13.


Mexico Amends Regulations to Permit Washing of Eggs


The Diario Official of Mexico, equivalent to the U.S. Federal Register has published a rescission of requirements concerning washing of eggs which represented a potential barrier to exports of table eggs to Mexico.

The Mexican Federal Commission on Sanitary Risk Prevention has essentially harmonized regulations with those of the FDA amending NOM-159. Eggs may be washed immediately after collection followed by drying and subsequently either be coated with oil or held under refrigeration.

The amendment to the standard followed negotiations between the FAS and counterparts in Mexico with strong support from the USAPEEC.


Apparent Association of Organic Food Consumption with Non-Hodgkins Lymphoma


A study published in the Journal of the American Medical Association* provided statistical evidence that consumption of organic foods in France was associated with a lower prevalence of non-Hodgkins lymphoma and post-menopausal breast cancer.

The study involved 69,000 adults divided into quartiles based on claimed intake of organic foods. Over the period May 2009 to November 2016, 1,340 incident cases of cancer were identified. Allowing for compounding factors including socio-demographics, lifestyle and dietary preferences, there was in inverse association between consumption of organic food and developing either of the two cancer diagnoses.

The authors implied that the difference was due to the presence of pesticides citing the European Food Safety Authority. This agency found 44 percent of conventionally produced samples contained one or more quantifiable pesticide residues compared to 6.5 percent of organic samples. The authors concluded because of their lower exposure to pesticide residues, consumers may have a lower risk of developing cancer.

It is noted that 78 percent of the participants in this study were female, participating in a national NutriNet-Sante study. Consumers incorporating a large proportion of organic foods in their diets usually are of a higher economic demographic and are obviously health-conscious. This cohort may also exhibit other health-promotional activities such as moderation in alcohol consumption, abstaining from tobacco and incorporating exercise in their daily routines.

The study might have been more persuasive had the investigators measured pesticide residues in urine and available tissue samples in order to correlate consumption of organic foods with the two cancers.

*Alles, B. et. al. “Association of frequency of organic food consumption with cancer risk findings from the NutriNet-Sante perspective cohorts study”, JAMA Intern MED published online on October 22, 2018. doi:10.1001/jamainternmed.2018.4357


Dairy Farmers will not Benefit Materially from USMCA


Despite hype and premature celebration over modifications to NAFTA incorporated into the USMCA, two Federal Reserve Banks reports that material benefits will not accrue to U.S. dairy farmers in the short term. The Chicago Federal Reserve reported that “gains will be too small and too far into the future to help dairy farmers.” The Minneapolis Federal Reserve reported on the “substantial number of dairy operations which have exited the business since the beginning of 2018.”

In terms of the USMCA, Canada will allow U.S. producers to supply up to 3.6 percent of the dairy market. This quantity is the same as the provision incorporated into the 2015 Trans Pacific Partnership from which the U.S. unilaterally withdrew at the inception of the current Administration.

According to Liz Moyer, Investment Editor who posted on the CNBC website on October 24th, “the insistence by the U.S. on concessions by Canada with respect to dairy products was intended as a political gesture to hard-pressed dairy farmers in Midwest and northern tier states”.


Increased Supply of Commodities Reduces Food Price Index


The Food and Agricultural Organization recently issued a report confirming a 1.4 percent decline in the FAO Food Price Index, from August to September. The index is now 7 percent below the September 2017 level. This is due in part to a 2.8 percent decline in the cereal price component following the large U.S. harvest coupled with shipments of wheat from the Russian Federation. The Vegetable-oil price index has declined for eight months in a row and is now 2.3 percent below September. The dairy price index declined by 2.4 percent together with a decrease in the Meat-price index.

The FAO noted that drought in Australia and Canada will lower wheat yields but offset by product from the Russian Federation. Concurrently rice output will increase by 1.3 percent due to higher planting and yields in Asia.

The effect of increased supply relative to demand will result in increased ending stocks of many commodities.


Chore-Time Appoints E.U. Sales Director


Jeff Miller, GM for CTB Chore-Time Group Business Unit has announced the appointment of Paul Janssen as Sales Director for Chore-Time in Europe. In this position, Janssen will be responsible for both Chore-Time and Volito product sales and service cooperating with existing regional sales managers and distributors.

Janssen joined Chore-Time distributor, Veldmaster B.V. located in Holland in 2000. He has over 25 years of experience including work on a turkey farm.

He is fluent in Dutch, German and English and holds a bachelor’s degree in logistics management from the Netherlands.


Frank Yiannis Appointed FDA Deputy Commissioner


Commissioner of the Food and Drug Administration, Dr. Scott Gottlieb has announced the appointment of Frank Yiannis to a newly created position, Deputy Commissioner for Food Policy and Response. He replaces Dr. Stephen Ostroff who will retire as FDA Deputy Commissioner for Foods and Veterinary Medicine after a distinguished career at the FDA.

Yiannis who is currently Vice President of Food Safety at Walmart is a proponent of blockchain technology and is experienced in aspects of food safety and proactive measures to prevent foodborne disease. Yiannis has been a strong proponent of food safety both at Walmart where he completed a 10-year tenure and previously as Director of Safety and Health at Walt Disney World Company for 20 years.

Yiannis was recruited by Dr. Ostroff based on knowledge and experience which is critical after the challenges facing the FDA in protecting the food supply. In a statement accompanying the announcement, Dr. Gottlieb noted “We are delighted to be welcoming Frank to FDA and believe his extensive expertise in supply chain security can help inform our work across our different product areas including food, but also when it comes to the safety and security of medical products.”

The appointment has been welcomed by public health experts including Dr. Michael Taylor who served as the first Deputy Commissioner for Foods and Veterinary Medicine who stated “Frank is passionately committed to public health and the wellbeing of consumers.” The appointment was also endorsed by attorney Bill Marler, who referred to the action taken by Yiannis in response to the extensive STEC infection associated with lettuce grown in the Yuma Valley in 2017.

The appointment of Yiannis coincides with reorganization of responsibilities at FDA. The Heads of Centers including the Center for Food Safety and Applied Nutrition will report directly to the Commissioner, bypassing Deputy Commissioners. The new office headed by Yiannis will be separate from the current office of Foods and Veterinary Medicine previously led by Dr. Ostroff.


Hard-Boiled Eggs Donated for Hurricane Michael Relief


Deb-El Food Products of Elizabeth, NJ. donated 140 cases of hard-boiled eggs as part of the American Egg Board Disaster Relief Partnership with the Tyson Foods Meals That Matter initiative.


Speed and Accuracy of Drive-Thru Orders


QSR Magazine quoted in The Wall Street Journal recently evaluated drive-thru service at 10 chain restaurants. Burger King took top place with speed in executing orders taking on average 193 seconds. McDonald’s in comparison was slower at 273 seconds.

In determining the accuracy of orders, Chick-fil-A® achieved 97.3 percent accuracy followed closely by Arby’s at 95.2 and McDonalds at 92.9. Hardee’s, Taco Bell and Burger King were all above 90 percent. KFC was the laggard in the group with only 69.9 percent accuracy in fulfilling drive-thru orders denoting deficiencies in systems or training.


Vegetable Based Substitutes Emerging for Fish and Seafood


It is calculated that the entire vegetable-based meat substitute category generated sales of $9.3 million in 2017, representing a 20 percent growth rate over the previous year. Only one percent of the substitute market is represented by fish. New technologies have resulted in ersatz salmon, eel and tuna served either in sandwiches or for the sushi market.

Although vegetable-based fish substitutes may appeal to vegans, it is noted that there are marked deficiencies in nutritional quality compared to the natural product. Three ounces of raw tuna contain 21 grams of protein compared to the Ahimi™ product from Ocean Hugger supplying only one gram of protein.

As with substitute ground beef, product development has concentrated on organoleptic properties including texture and color with proportionally less emphasis on taste. There has been practically no attempt to match nutrient content with genuine animal-based products including eggs. Nutrients are at the end of the day the reason why we eat.


Trucking Costs to Escalate in 2019


Following escalation commencing in 2017, large trucking companies are anticipating a 25 percent increase for transport in 2019 compared to the inflated values during the current year.  This projection is made despite the reduction in the American Trucking Association tonnage index for the quarter ended September 2018.


All trucking companies are experiencing increased costs for diesel and especially for drivers.  The inflationary effect passed on to customers is reflected in quarterly reports which highlight increases in total revenue, operating profit and in revenue per loaded mile, an important industry benchmark.


Knight-Swift Transportation Holdings Inc. revealed a 31 percent increase in revenue with the Knight trucking segment increasing operating profit from $8.6 million to $56.5 million in the most recently completed quarter compared to the corresponding quarter in 2017.  Revenue per loaded mile was up by 19.9 percent.


Covenant Transportation Group recorded a 36.2 percent increase in revenue to $243.3 million with a revenue per loaded mile increase of 16.4 percent.


As reported previously in CHICK-NEWS, the shortage of drivers is a restraint to expansion and part of the escalation in trucking costs is due to disparity between demand and available capacity.  J.B. Hunt Transport Services has raised pay for drivers by double digits and T.G.S. Transportation in Fresno, CA has tripled the usual four percent annual wage increase for drivers achieving company standards for safety and fuel economy.


Eggin’U On! At Michigan State


The AEB reports on a successful venture at Michigan State University serving a breakfast with a new “rolled omelet.” Presentation.  Nothing like nutritious real eggs containing a balanced amino acid composition, a source of both fat and water-soluble vitamins and a relatively low caloric content all in a tasty and inexpensive package.


Nebraska Farmers to Plead Guilty to Organic Fraud


Tom Brennan, his son James and Michael Potter have agreed to each plead guilty to one count of wire fraud following an investigation disclosing widespread mislabeling of organic grains.


The defendants operated a farm in Overton, NE certified under the National Organic Program.  From 2010 through 2017 non-organic grain was knowingly sold to distributors harvested from non-certified fields or from acreage which received an application of nitrogen fertilizer and pesticides in violation of USDA certified organic rules.  It is understood that the Federal Government will require the defendants to forfeit $11 million and face sentencing on wire fraud charges.


The differential in price between conventional and organic grain creates an incentive for fraud, which in this specific case continued for approximately seven years.


Most domestic and imported certified organic grain is used for animal feed.  The problem of deceptive representation of commodities as organic could in large measure be reduced by applying blockchain technology.  The duration of the fraud perpetrated by the three defendants clearly indicates deficiencies in auditing as a requirement for continued organic certification.  In the absence of laboratory assay and reconciling sales volume with certified acreage, deficiencies in auditing will allow unscrupulous producers to fraudulently claim organic status.  



Salmonella Incidence Rate in the Netherlands


Data on the incidence of salmonellosis in Holland shows a steady decline from 13.6 confirmed cases per 100,000 population in 2011 to 9.3 cases per 100,000 in 2015. According to a posting by Joe Whitworth on Food Safety News issued by FSN, table eggs in Holland are responsible for 15 percent of cases.  This is a questionable figure given that the commercial Dutch egg industry has effectively eliminated SE from flocks.  If SE were prevalent in flocks in Holland, it would have been detected in the populations of importing countries especially in Germany. Infection associated with table eggs imported from Poland over a five year period was detected and identified to country of origin.  


According to data presented, pork represented the most frequent vehicle of infection with 28 percent of incident cases attributed to products derived from hogs.


Instacart to Deliver for Sam’s Club


Walmart intends offering Instacart grocery delivery for half of Sam’s Club stores by mid- November.  Initially stores were selected in high-density markets including New Jersey, Indianapolis, Texas and other states after an initial trial in the Dallas-Fort Worth and St. Louis markets.


The Instacart program supplements the Walmart Click and Collect program which will offer grocery pick-up at 3,001 Walmart stores by 2020 with delivery from 1,600 locations.


“Food-Delivery is not a Fad”- RBC Capital


David Mell, managing director of RBC Capital Markets commenting on recent infusions of capital for food-delivery companies maintains that “the trend is not a fad”.


Companies which have received financial support include Instacart Inc. which secured a $600 million investment; DoorDash Inc.; Grubhub Inc. and the UberEats subsidiary of Uber Technologies.


To be credible, delivery companies must have a strategic partnership with a major food chain or QSR.  To date a front-runner has not emerged although all companies cited above have financial support and a presence in the field which is characterized by a low barrier of entry.


Jerome Scott with Mizuho Securities considers that takeout and delivery will represent 15 percent of restaurant sales by 2027 especially with the popularity of mobile apps.



McDonald’s to Debut Triple Breakfast Stacks


McDonald’s will introduce triple-level breakfast items to U.S. menus on November 1.  Available as a variant of the McMuffin, McGriddle or biscuit, the new menu items will include an egg, a slice of cheese, bacon and two sausage patties.


This innovation follows the introduction of all-day breakfasts in 2015 which contributed to increased same-store sales.  Steve Easterbrook, CEO of McDonald’s stated, “We want to do better at breakfast.”  He added, “We’ve got some initiatives in place which we are going to see out through the next few months and also some new food news which we think will reenergize the day part.”


Prospects for Mycotoxicosis from 2018 Corn Crop


Unusual weather conditions during cultivation of the 2018 corn crop will increase the risk of mycotoxicosis in herds and flocks in 2019. Dry weather occurred in Kansas, Missouri, Iowa and Oklahoma during the current season.  Drought during the silking stage stressed plants and created an opportunity for fungal spores to infect kernels. Drought is usually associated with Aspergillus contamination resulting in elaboration of aflatoxins.


Wet weather also subjected crops to infection with fungi especially during the dough and harvest stages.  Crops harvested with a high moisture content may contain fumonisin, vomitoxin, and zearalenone which although individually present at low levels will have a synergistic effect.


Suppliers of mycotoxin binders including Alltech, Biomin and Nutriad are warning clients of the risks of mycotoxicosis from the 2018 harvest. These companies have established programs to monitor the level of mycotoxins in corn and DDGS. Aflatoxin may be concentrated threefold in DDGS compared to the corn feedstock during the production of ethanol.


Producers are advised to monitor moisture content and regard corn with a level higher than 15 percent as potentially contaminated.  Sensitive, semi-quantitative rapid assays are available to monitor for the major mycotoxins of clinical significance. It is emphasized that sampling error can invalidate results with both unjustified rejection of a large consignment or alternatively acceptance of a shipment which may be deleterious to flock or herd health or product quality.  Over half of new crop corn has been harvested and early indications suggest that assay for mycotoxins is justified.


 Remediation of affected corn is extremely difficult although it is possible to dilute a contaminated batch if it is not rejected, by proportioning with an unaffected consignment. Corn with a moisture level in excess of 15 percent can be treated with a proprionate compound to suppress fungal proliferation but these additives will not ameliorate mycotoxins which were elaborated before harvest. A mycotoxin binder derived from yeast cell walls is available to supplement diets prepared with contaminated grain.  The product is extremely effective against aflatoxin but with relatively lower efficacy against DON and trichothecenes.


The bottom line is that mycotoxicosis will be a reality in late 2018 and early 2019 and producers should be aware of the risks and implement appropriate monitoring and remediation programs.


CoBank Issues Quarterly Economic Agricultural Outlook


CoBank issued their quarterly economic outlook on October 12th highlighting uncertainty relating to trade issues and bountiful harvests for major commodities.


Based on supply considerations, prices will be constrained especially in view of trade uncertainties and the value of the U.S. dollar.


The report stresses that “the escalating trade war with China is the leading risk for U.S. agriculture and the retaliatory actions taken by China and other trading partners have raised concerns of long-lasting effects on agricultural supply chains.”


Other conclusions from the report include:


  • Growth in emerging markets will increase demand for animal protein and specialty crops.
  • Record yields for U.S. corn, soybeans and cotton are anticipated in 2019.
  • The livestock sector has benefited from prolonged low ingredient costs although there are concerns over export volumes.


Chipotle Reports on Q3 of FY 2018


In a press release dated October 25th Chipotle Mexican Grill (CMG) announced results for the Third Quarter of Fiscal 2018 ending September 30th 2018.

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

3rd Quarter Ending September 30th.



Difference (%)





Gross profit: Sales-food & packaging




Operating income:




Net Income




Diluted earnings per share:




Gross Margin (%) Sales-food & packaging




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets




Market Capitalization



52-Week Range in Share Price: $247.52 to $530.68

Market Close 25th Oct. post release $428.88 (+2.6 percent)

Forward P/E: 35.4 Beta: 0.5

Same-store sales growth 3.3 percent compared to Q3 FY 2017.


Consumer Resistance to Dihydrogen Monoxide


Consumer research company InsightsNow has determined that 10 percent of young adults want “dihydrogen monoxide” removed from foods. This is an example of herd mentality coupled with ignorance since dihydrogen monoxide is water. Because food activists such as the “Food Babe” will only accept additives she can pronounce, dihydrogen monoxide would be taboo, although water is apparently acceptable to her and her web acolytes.

In the downward rush to remove beneficial additives duly approved by the FDA to create “clean labels” valuable products with beneficial properties have been eliminated.

The question is how we arrived at the farcical situation that water by another name is undesirable. This in large measure is the result of deliberate misinformation and distortion advanced by self-appointed experts using the web which has provided them with an unjustifiably loud megaphone. Food manufacturers are equally culpable in not defending their formulations and simply caving in to irresponsible demands. Agencies such as the FDA are no help in defending food manufacturers who use approved additives.


JUST Forms Partnership with Aramark


In an October 22nd release, JUST announced that Aramark will distribute a plant-based egg substitute. JUST-Egg breakfast patties will be available for a limited time suggesting that the project is a field test.

It is noted that Aramark has been in the forefront of opposing confined production of eggs. The Company serves universities and corporate kitchens which are generally price insensitive but serving a clientele regarded as welfare and socially conscious.

The statement issued by JUST included comments from founder, Josh Tetrick, but was unsupported by any comment from Aramark.


McCain Foods Identified as Source of Widespread Contamination Resulting in Recalls


The FDA in cooperation with state authorities has identified a Colton, California subsidiary of McCain Foods, based in Ontario Canada, as the source of frozen corn apparently contaminated with both Salmonella and Listeria. McCain Foods established in 1957 in the Province of New Brunswick is now a multinational with eight plants in Canada, 11 in the U.S., 21 in the E.U. and facilities in China, India, South Africa and Australia.

On October 18th, HyVee recalled salads served in their stores. Prepared foods and salads containing corn and possibly other ingredients including onions supplied by McCain Foods have been implicated in a chain of contamination which has resulted in the recall of close to 2,000 tons of prepared products including burritos, wraps and salads. Recalls extend from Caito Foods in Indianapolis, IN (two tons) to RUN of Dennison Texas recalling 1,200 tons. National brands are involved including Whole Foods 365, 7-Eleven and Jenny Craig.

Fortunately, there are no reports of illness and the recalls were initiated as a result of routine surveillance. The extent of food recalls which extend from the Midwest to California attest to the potential impact of one supplier providing a contaminated product. Neither Salmonella nor Listeria are usually associated with frozen corn, but the incident illustrates the need for continual surveillance of both the environment of plants and products.

The case involving numerous food processors illustrates the need for rapid trace forward which can be provided by participation in a blockchain system which permits instant recall of data and verification of source of ingredients at each step in the chain of supply and production.

McCain Foods stated “We have received no reports of illness associated with consumption of implicated products to date and this voluntary recall is being issued as a precautionary measure for the safety of consumers.” The statement added “We are working in cooperation with our customers and the appropriate regulatory authorities and will provide any appropriate updates.”


European Food Safety Agency Comments on AI Transmission to Humans


The European Food Safety Agency has just completed an assessment of the theoretical probability of transmission of low pathogenicity avian influenza from raw poultry and eggs to humans.

At the outset it is stated that avian influenza is not vertically transmitted and should therefore not pose any danger to consumers of washed eggs. The E.U. has a greater concern because virus may be excreted in feces which may contaminate egg shells which are generally not washed in the E.U.

The assessment stated “There is no evidence that avian influenza can be transmitted to humans through eating contaminated poultry. Thorough cooking of poultry meat will destroy the virus. Epidemiologic evidence suggests infection in humans occurs rarely and only after very close contact with infected animals.”

The report also noted that certain highly-pathogenic avian influenza viruses including H5N1 and H7N9 are associated with human infection. This may relate to inherent susceptibility among patients and high levels of exposure associated with wet markets.

The report concluded that the “probability of infection by low pathogenic avian influenza through eating contaminated raw poultry meat or raw table eggs is negligible.”


Uber Plans Drone Delivery of Food


According to a recent note in The Wall Street Journal, Uber is planning to launch a food delivery service using drones by 2021.


Truly pie in the sky.


U.K. Competition Authority Reviewing ASDA-Sainsbury’s Merger


The proposed merger of U.K. supermarket giants ASDA owned by Walmart and Sainsbury’s is under review by the U.K. Competition and Markets Authority (C&MA) analogous to the U.S. FTC.


According to an October 17th report in Dow Jones Factiva the C&MA will examine the impact of deep discounters Aldi and Lidl and online grocery companies including Amazon.


In a submission to the Authority, Sainsbury’s noted the competition represented by Lidl with six percent of the market and Aldi with eight percent of grocery sales and traditional giant Tesco with 27 percent.


The chairman of the C&MA Stuart McIntosh stated, “Our job is to find out whether the merger will result in people paying more or being faced with less choice or a poorer quality shopping experience.”


McDonald’s Corp. Reports on Q3 of FY 2018


In a press release dated March 23rd McDonald's Corp. (MCD) announced results for the 3rd Quarter of Fiscal 2018 ending September 3rd 2018.

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

3rd Quarter Ending.



Difference (%)


Q3 2018, 46% from Company stores; Q3 2017, 53%




Gross profit Company stores:




Operating income:




Net Income




Diluted earnings per share:




Gross Margin, Company stores (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt: Dec. 31st 2017/2016




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets Dec. 31st 2017/2016




Market Capitalization



52-Week Range in Share Price: $146.84 to $178.70

Market Close 22nd Oct. (pre-release) $171.02 14H30 23 rd Oct. $176.92 (+6.2%)

Forward P/E: 21.5: Beta +0.7

For the 3rd Quarter global same-store sales increased 4.3%. U.S. +2.4% (compared to 2.6% consensus estimate)

MCD operates in 120 nations with 37,557 stores. U.S. had 13,948 stores at the end of Q3

For the nine-months of 2018 MCD earned $4.5 billion on sales of $15.86 billion with an EPS of $5.72. Comparative values for Q1-3 of FY 2017 were a net profit of $5.48 on sales of $17.48 billion with an EPS of $5.48

The adverse comparison between Q3 2018 and Q3 2017 is attributed to revenue of $850 million from sale of assets in China in 2017, the re-franchising program and restructuring charges.

In commenting on results McDonald's President and CEO, Steve Easterbrook stated, "In addition to achieving thirteen consecutive quarters of positive global comparable sales, we have made substantial progress modernizing restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day. We remain confident that our strategy will drive long-term, profitable growth,"


Adisseo to Develop Bio-Based Methionine


Adisseo and biotech collective TWB have jointly developed a bio-based synthesis for L-methionine.  It is intended to develop a pilot plant by 2020.  The development follows a parallel acquisition of a bio-based methionine synthesis system by Evonik Industries from metabolic explorer in 2017.


Providing the bio-based methionine processors do not make use of a GMO organism, availability of a nutrient supplement which could be accepted by the National Organic Program would reduce the cost o production of eggs and poultry meat and displace conventional synthetic methionine which is subject to progressive reduction in dietary inclusion.


Alltech Establishes E-Commerce “Store”


Alltech has developed a website “The Alltech Store”.  This will allow customers to shop for animal nutrition products to be delivered to front doors and farm gates.


The Alltech Store is created through an internal incubator program encouraging employees to submit their ideas for improvement.


Information is available from the website


The Alltech Store will provide a convenient source of supplements for 4-H, and small holder operations across diverse species.


Development of New E. coli Vaccine


Dr. John J. Maurer of the University of Georgia Poultry Diagnostic Research Center has developed new technology autogenous E. coli vaccines.  The project was funded by the U.S. Poultry and Egg Association Foundation.


Dr. Maurer and his colleagues were able to develop a culture method for field strains of E. coli that inhibit the production of surface.  Coli without the O antigen include the lipopolysaccharide core which can stimulate antibodies to a wide range of pathogenic E. coli.


The culture technique was applied to produce E. coli strains stripped of O-antigen to be incorporated in emulsion which was effective in inducing an antibody response.


The technique has the potential to enhance the effectiveness of autogenous vaccines since STEC strains or various subtypes may be present on a specific farm effecting successive flocks.


View More