Egg Industry News


UPDATED COMMODITY REPORT August 22th

08/22/2019

Price of corn down 2.4 percent at close of CME trading on August 22nd following a 3.6 percent decline last week. Soybeans and soybean meal relatively unchanged.

Corn continues the downward trend in price. Previously corn responded to the mid-session release of the August WASDE on Monday 12th with a 5.2 downward turn by close of trading. The WASDE documented an unexpected higher yield and an 8.6 percent increase in ending stocks of corn. Currently field evaluation of the status of the 2019 crop is in progress amid conflicts. Soybeans were relatively unchanged this past week but a re-evaluation of yield will be incorporation in the September WASD. This may alter the 5.0 percent estimate of ending stock, an important  determinant of price.

The absence of any substantial news regarding negotiations with China and now the new issue of possible intervention by China in Hong Kong has created pessimism over a resolution of the trade conflict. Resumption is scheduled for some undisclosed time during September in Washington suggesting intractability by both the U.S. and China. Current consensus is that there will be no resolution of the trade dispute before the end of 2019. In the interim China has retaliated by banning all imports of agricultural products from the U.S.

The continuous stream of conflicting statements by White House and Government of China spokespersons over the months since the dispute began is disconcerting to the commodities market and has contributed to price fluctuation.

The following quotations were posted by the CME at close of trading on Friday 22nd August compared with values for Monday 16 th August (in parentheses).

COMMODITY

 

Corn (cents per bushel)

Sept. 362 (371)

Dec. 370 (381)

Soybeans (cents per bushel)

Sept. 858 (866)

Nov. 870 (879)

Soybean meal ($ per ton)

Sept. 294 (295)

Dec. 300 (300)

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

COMMODITY CHANGE FROM PAST WEEK

Corn: Sept. quotation down 8 cents per Bu                          (-2.4 percent)

Soybeans: Sept. quotation down 8 cents per Bu                  (-1.0 percent)

Soybean Meal: Sept. quotation down $1 per ton from Aug.. (-0.3 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:-

COMMENTS

Subscribers are referred to the weekly USDA Crop Progress Report and the August 12th WASDE posted under the STATISTICS tab.

In June some concessions were promised by China to reduce coercive trade practices and clarify dispute resolution. Subsequently U.S. negotiators claim that China has backtracked on structural issues hence the threat of more stringent tariffs and embargos on trade with tech. companies in China.

Prices will be determined by the trend in levels of ending stocks as influenced by the 2019 harvest, exports and domestic use.

For comparison the values below are commodity prices posted by the Dalian Mercantile Exchange in $US per short ton* at market open on August 13 th 2019 (local time) with comparable August 12th closing CME values in parentheses:-

Corn $244 ($140)

Soybeans $410 ($287)

Soybean meal $365 ($293)

*(conversion Rmb7.14=$US1 prevailing August 12th)

The August 12th 2019 WASDE Report #591, projected that 82.0 million acres of corn will be harvested in 2019 to produce 13.90 Billion bushels. The WASDE projected a harvest of 3.68 Billion bushels of soybeans from 75.9 million acres. The levels of production and ending stocks for the two commodities are based on completion of planting in June and current data on harvest area and projected yield. The WASDE to be published in mid-September will confirm the projected yields and ending stocks of corn and soybeans respectively.

The corn price was adversely affected by the August 9th decision by the EPA to grant 31 and to deny six waivers to refineries. This action according to the Renewable Fuel Association decreased demand by 1 billion gallons of biofuel. This was reflected in a sharp decline in the value of a RIN from 20 to 11 cents. Ethanol spot price was $1.34 per gallon 0n August 22nd ($1.27 per gallon on August 9th).

Unless shipments of corn and especially soybeans to China resume in volume, which is highly unlikely, the financial future for row-crop farmers in 2019 appears bleak despite the release of two tranches of support funding in 2018 amounting to $8 billion as "short-term" compensation for disruption in trade. On July 25th the USDA announced a $16 million package to support agriculture with Market Facilitation funds to be distributed in three tranches. The first payment has commenced through the Farm Services Agency under authority of the Commodity Credit Corporation. Payments will be based on a value corresponding to the higher of 50 percent of the Producer's calculated payment or $15 per acre, provided a cover crop is planted.

The magnitude of the second (November 2019) and third (January 2020) payments will be decided on according to prevailing conditions. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility.


 

Egg Week

08/22/2019

USDA Weekly Egg Price and Inventory Report, August 20th 2019.

  • Hen numbers in production up 1.7 million to 323.9 million .
  • Shell inventory down 1.9 percent after a 10.3 percent fall last week
  • USDA Midwest benchmark generic prices for extra large and large up 57.9 and 60.2 percent to 84.5 and 82.5 cents per dozen respectively. Mediums were up 38.1 percent to 43.5 cents per dozen.
  • Price of breaking stock up at 40.0 cents per dozen and checks at 26.0 cents per dozen respectively. Both categories substantially below cost of production

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on August 19 th the Midwest wholesale prices for Extra Large and Large were higher by 31 cents per dozen to 84.5 and 82.5 cents per dozen respectively. Mediums were up 38.1 percent to 43.5 cents per dozen. Extra Large and Large were above the USDA average 5-Region blended nest-run benchmark of 62.7 cents per dozen in July. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.


 


Target Introduces New Brand

08/21/2019

Target has introduced the Good & Gather™ brand for foods and beverages.  Products will appear on shelves during mid-September and the range will include 2,000 products by the end of 2020.

 

Good & Gather™ products are made without artificial flavors, sweeteners, synthetic colors or high-fructose corn syrup.  It is intended to phase out existing brands including Archer Farms™ and Simply Balanced™.

 

Stephanie Lundquist, Executive Vice-president of Target and president of Food and Beverage stated, “Our guest are incredibly busy and want great tasting food so they can feel good about feeding their families.”  She added, “We saw this as a huge opportunity for Target to help so our team got to work on our most ambitious food undertaking yet, reimaging our own food brands to serve up convenient affordable options.”

 

The Target release continued, “The debut of Good & Gather plays a role in Target’s broader efforts to reimagine its owned brand portfolio.”


 

Poultry Research Center Inaugurated by Roslin Institute

08/21/2019

The Allermuir Avian Innovation Research and Skills Center was inaugurated on the Easter Bush Campus of the Roslin Institute on June 6th. The facility will be managed by the Scotland Rural College and the center will be co-funded by the Center for Innovation Excellence in Livestock, the Scottish Funding Council and Innovate U.K.

In opening the facility, Lord Henley, Parliamentary Undersecretary of State of the Department for Business Energy and Industry Strategy stated “It is great to see investment like this in new agri-tech facilities that will help the sector to innovate and create the highly-skilled jobs of the future through our agricultural strategy and our modern industrial capacity’ Lord Henley added “The Government has invested more than $350 million to help transform food production in the U.K. for the better.”

The research center is equipped with Greengage inductive lighting and sensor systems to provide comprehensive environmental control. Matt Kealey, Director of Sales and Marketing for Greengage stated “We are delighted that our ALIS lighting platform is installed at the Allermuir Avian Research Center”. Ultimately the facility will be staffed by a team of 35 scientists and technicians and will conduct studies on antimicrobials and management systems.


 

Passing of Emanuel Puglisi

08/21/2019

Emanuel Puglisi died on August 14th at the age of 95. A native of Sicily, he immigrated to the U.S. in 1937 and served in the U.S. Army during World War II. Subsequently he founded Puglisi Egg Farms in Howell, NJ and was active until his retirement in 1986.

Emanuel was an innovator in both housing and management of flocks and marketing eggs. He was a past-president of the New Jersey Poultry Products Council and a recipient of the Golden Egg award from the IEC.


 

AEB – More Bang For The Buck

08/21/2019

The American Egg Board recently reported on July web activity. During the month search engine advertisements generated 2.6 million impressions and 145,000 clicks. July spending was down 18 percent compared to the corresponding month in 2018 but clicks were up 95 percent.

Social media generated 50 million impressions and 66,000 engagements (better than any dating site!)

The Dinner Eggs campaign was the key to the success of the web response. This initiative represents a collaboration between The Incredible Egg and the AEB Egg Nutrition Center. Cara Harbstreet a registered dietitian focused her Dinner Eggs contribution on a microwaveable Ramen recipe directed to busy health-conscious young consumers. Dinner Eggs is further promoted by the “Farm Babe”.


 

OVO-Vision Software Now Available for Intermediate and Small-Sized Egg Operations

08/21/2019

Since inception ten years ago, OVO-Vision has devised and supplied software for large packing plants. The company recently extended their range of software to encompass small and intermediate-sized plants offering  commensurate flexibility and convenience. Software can be scaled to facilitate expansion and a number of packages are available to suit specific requirements.

The proven OVO-Vision enterprise software is highly customizable and can be installed on a local server and OVO-Vision Cloud placing accessibility in reach of even the smallest of producers. The OVO-Vision cloud as offered by QwinSoft B.V. comprises several modules that can be selected depending on the needs of the application these comprise:

  • OVO-Vision basics
  • OVO-Vision essentials
  • OVO-Vision premium

Feature lists are available on the OVO-vision website which can be accessed by clicking on to the OVO-Vision logo on the right side of the welcome page. The scope of OVO-Vision software can be reviewed on the attached clip.


 

Australia Struggles with Egg-borne Salmonella

08/20/2019

Outbreaks of human salmonellosis were diagnosed South Australia in 2014, 2016 and  more recent and extensive outbreaks in 2017 and 2018. The relatively rare serotype Salmonella Hessarek was implicated in 96 cases between 2012 and 2016 with half of the reports emanating in South Australia. Between November 2016 and February 2017, a total of 136 Salmonella notifications was investigated by the South Australian Communicable Disease Control Branch. Traceback revealed a specific farm as the source of eggs contaminated with Salmonella Hessarek Recovery of the pathogen from within the egg indicates either penetration of the eggshell or vertical transmission.  Shell-egg rinses however did not yield Salmonella implying contamination of the yolk or albumen.

 

The implicated farm, as with many egg production units in Australia, operated free-range flocks between November 2016 and February 2017.  Decontamination of pasture is impossible and introduction of a detection and prevention program as in the U.S. industry would not be effective even with administration of an autogenous vaccine.  It would appear that if Australian consumers insist on eating egg from free-range flocks thorough cooking appears essential.  The possible application of in-shell pasteurization using a microwave system developed in South Africa would eliminate egg-borne Salmonella infection.  To justify cost, it would be necessary to transport eggs from small farms to a central packing plant equipped with a microwave pasteurizer.

 

Given the prevalence Salmonella infection in flocks housed on pasture, it is difficult to understand why a health authority has not insisted on a cold chain between the time of packing and point of sale.

 

*Kenny, B. et al A protracted outbreak of Salmonella Hessarek infection associated with one brand of eggs – South Australia, March 2017-June 2018 J.AIDS ClinRes DOI: 10.4172/2155-6113-C1-027 Joint Event - 9th International Conference on Emerging Infectious Diseases and 6th World Congress on Control and Prevention of HIV/AIDS.


 

USDA Deregulates Proprietary Canola Seed

08/20/2019

The USDA has deregulated a proprietary canola seed developed by Cargill. The cultivar will contain relatively high levels of EPA and DHA required for aquaculture diets.  The new canola seed will be branded as Latitude™.

 

In commenting on the innovation Mark Christiansen managing director for the Cargill Specialty Oil Business stated, “This approval means we are on target to deliver Latitude™, our sustainable fish oil alternative made from canola oil seeds to aquaculture farmers and feed manufacturers.

The high omega-3 canola varieties have been developed and tested in Montana since 2015 and will now be commercialized.  The variety was developed in cooperation with BASF the submitter of the application for regulatory approval.

Although developed for aquaculture, canola with high omega-3 fatty acids could be used in diets for egg laying hens to increase the nutrient content of DHA and EPA in addition to ALA which is the predominant omega-3 fatty acid in enriched eggs.


 

Initial Evaluation of Romaine Lettuce from the Yuma Valley

08/20/2019

Following the spring 2018 outbreak of E. coli O157:H7, infection was traced back to lettuce grown in the Yuma AZ Valley.  This outbreak involved 210 diagnosed cases in 36 states requiring 96 hospitalizations and 27 cases of hemolytic uremic syndrome with five fatalities.  Yuma Valley supplies most of the leafy greens consumed between November and March.

 

Following investigations by the FDA, and in consultation with agricultural and food safety experts, changes were made to the irrigation of fields with specific reference to exclusion of runoff from CAFOs.

Recently the FDA conducted assays on 118 samples from specific farms including 26 commercial coolers and cold storage facilities.  All samples were free of Salmonella and a  

Shiga toxin-producing E. coli (STEC) was identified in in one sample. 

 

Although the initial evaluation is promising, additional surveillance will be necessary for the 2019-2020 season.  In the long term however environmental studies will be required to determine risk factors and to develop appropriate preventive measures.  Over the long term antibacterial treatment such as high-efficiency UV or electron beam treatment may be necessary to provide security for uncooked foods.


 

Welcome to Greengage Enlightened Farming

08/19/2019

Greengage Lighting Ltd. specializes in innovative precision LED lighting and environmental sensor systems for livestock production. The company is located at the Roslin Institute near Edinburgh. This association with academics, engineers and specialists has made possible advanced lighting and electronic systems contributing to optimal productivity.

The Greengage system applies inductive power for lamps and sensors sharing a common overhead connection network. Greengage ALIS lamps are protected against water and dust and are designed to function for ten or more years delivering lux and lumen values conforming to international standards. Inductive power is supplied by hubs located exterior to the area occupied by the flock. Lamps are available in either wide or narrow-beam configuration. Blue lamps are also available to be used when depopulating houses. The ALIS range includes low-power nest lamps and strip-lamps all controlled using dawn-to-dusk controllers. ALIS lamps are designed to deliver a light spectrum consistent with the photopic response of chickens. Inductive power provides constant current in the absence of photometric flicker thereby reducing stress. Compared to conventional compact florescent lamps, ALIS inductive-powered lamps provide energy savings of from 50 to 90 percent. ALIS lighting systems reduce shadows within houses leading to higher flock uniformity. Induction-powered lighting systems reduce the possibility of barn fires.

 

Greengage has developed a series of ALIS sensors that can be attached to the overhead grid powering the lamps. The range of sensors include:

  • ALIS Chirp Sensor that monitors acoustic patterns indicating a deviation from optimal environmental conditions
  • The ALIS Cluster Sensor views flock motility and can indicate unusual aggregation of birds within the flock to avert to smothering
  • ALIS Greenhouse Sensor monitors ammonia, carbon dioxide and humidity
  • ALIS Ambient Sensor monitors light and temperature

Inputs from sensors are analyzed in real time to control environmental variables. Data can be accessed remotely to modify ventilation and light settings.

The North American distributor for Greengage is Davian Inc. with Jassen Jackman jassen.jackman@vencomatic.ca as the contact. Additional information on Greengage and the range of environmental control module and lighting systems can be accessed on www.greengage.global


 

Crop Progress

08/19/2019

Status of 2019 Corn and Soybean Crops

The USDA Crop Progress Report released August 19th documented progress in both corn and soybeans after a slow start to planting that is expected to negatively impact yields as documented in the August WASDE Report under the STATISTICS tab. Current crop condition for both soybeans and corn are inferior to the 2018 harvest as tabulated below. High topsoil moisture levels are evident in comparison with the corresponding week in 2018. Long-range forecasts call for dry weather in the Eastern corn-belt in late August.

CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

August 11th

August 18th

5-Year Average

Corn Silking %

Corn Dough %

Corn Dented

90

39

7

95

55

15

99

76

30

       

Soybeans Blooming %

Soybeans Setting pods %

82

54

90

68

96

85

       

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

3

4

11

8

29

20

47

48

10

20

Soybeans 2019

Soybeans 2018

4

3

10

8

33

24

46

49

8

16

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

10

26

58

6

Past Year

13

25

56

6

Subsoil moisture: Past Week

8

24

62

6

Past Year

13

27

55

5


 

Boris Johnson and Biosecurity

08/19/2019

The August 3rd edition of The Economist shows a picture of the recently elevated Prime Minister of the U.K., Boris Johnson visiting a production unit in Wales.  It is clear that the publicity image denotes a lack of concern for biosecurity.  Certainly no one should be allowed into the proximity of a flock while wearing street clothing, rumpled in the case of Boris, or otherwise.

 


 

Foodborne Infections in Germany During 2018

08/19/2019

The Infectious Disease Epidemiology Annual Report for 2018 released on July 29th by the Robert Koch Institute documents the incidence of foodborne infection in Germany.  The rates for specified infections were at:-

 

  • Campylobacterosis: 78.0/100,000
     
  • Salmonellosis: 15.6/100,000
     
  • STEC: 2.5/100,000
     
  • Listeriosis: 1/100,000

 
Norovirus incidence attained 94 per 100,000 and was considered the leading gastrointestinal infection.
 
The report produced by the Robert Koch Institute follows passage of the German Prevention and Control of Infections Act of 2016 that mandated reporting of emerging diseases and drug- resistant pathogens.
 
During 2018 whole genome sequencing was extensively applied, demonstrating that the increase in Salmonella Enteritidis complex type 1734 was from eggs derived from barns and free-range flocks.  A total of 191 cases were diagnosed in a number of states and molecular typing identified 24 small outbreaks.  Most of the other serotypes identified including Salmonella Infantis, S. Kentucky and S. Derby were acquired during foreign travel.
 
As with many national surveys, apparent increases in incidences might be attributed to enhanced diagnostic procedures and collation of regional databases.


 

Eggshells Used in Bone Repair

08/19/2019

According to an article in Biomaterials Science researchers at the University of Massachusetts, Lowell have used crushed eggshell as a biogel to support proliferation bone cells.  The mixture provides the framework to grow bone potentially to be used for grafts.  Currently studies are in progress using rats but subsequently the technique may be extended to human patients.


 

Animal Welfare, Food Safety Area Briefings

08/17/2019

Schedule of presentations

 


 

Salmonella Detected in Packed Spinach

08/16/2019

The Food and Drug Administration announced a recall of baby spinach distributed under the Dole brand. The release dated August 9th noted that use-by dates on the affected lots was August 5th and accordingly most of the product has been consumed.

Contamination with Salmonella (serotype not revealed) was detected on routine surveillance by the Michigan Department of Agriculture. Affected product was distributed in ten Midwest and  Northeastern states.

With increased surveillance, it is inevitable that Salmonella, Listeria and even E.coli will be detected on produce. There does not appear to be a single effective method of decontaminating produce which may acquire pathogens in the field from irrigation water or subsequently by  contamination during processing and packaging.


 

Forecast Egg Production in Mexico

08/16/2019

The USDA-FAS GAIN Report MX 9025 dated July 31st documents the projected 2020 production of eggs. The estimate is for 3.1 million metric tons corresponding to 4.29 billion dozen for the year. Given a population of 116 million, domestic production corresponds to a 2020 demand for  370 eggs per capita with a growth rate of 1.4 percent from the previous year. Eggs now represent 17 percent of animal protein consumed in Mexico.

Production is predominantly in Jalisco state with 54 percent of output followed by Puebla at 17 percent, Sonora, 5 percent and other states in low single digits. White eggs represent 98 percent of production allowing the U.S. to export caged-egg product for commercial sale subject to the new standard allowing for washing of eggs but with an obligatory cold chain.

During the first half of 2019, Mexico was ranked third in nations importing from the U.S. responsible for 12 percent of shell egg volume and 11.2 percent of total value at a unit price of $0.86 per dozen.

Mexico was the second-ranked importer of egg products during the first half of 2019 receiving 3,008 metric tons comprising 20.2 percent of U.S. export volume and 15.2 percent of value with a unit price of $2,360 per metric ton compared to the U.S. average export unit price of $3,117 per metric ton. Value of shell eggs exported to Mexico for the first half of 2019 amounted to $5.8 million. Egg product exports to Mexico during the same period attained $7.1 million.


 

Seminar on Eggs and Products set for Mexico City

08/16/2019

According to the August 19th edition of the USAPEEC MondayLine, USAPEEC Mexico has scheduled another seminar on the subject of eggs and egg products in Mexico City. This will be part of a series of seminars sponsored by American Egg Board focussing on food processors, food service professionals, and personnel in the food industry using shell eggs as ingredients.

The USAPEEC Mexico Office will hold the seminar during the food service tradeshow ABASTUR, attended by potential buyers. Topics to be covered during the seminars include handling and storage of eggs, manufacture of egg products nutrient qualities, functionality and microbiology

A consulting chef will demonstrate a range of egg products confirming the quality and versatility of U.S. egg liquids. The seminars will be held in Mexico City, September 4th; Aguascalientes, September 17th and Monterrey, November 19th. For additional details and invitations contact Liliana Solis at lsolis@usapeec.org.mx.


 

Updated USDA Projections for 2018 and 2019 U.S. Egg Production

08/16/2019

The USDA Economic Research Service issued an updated forecast of egg production on August 16th, following the previous July 17 th report. The volume of eggs produced and per capita consumption in 2019 were increased by 2.4 and 1.9 percent respectively compared to 2018 data. Consistent with this disparity, the benchmark New York price was reduced by 37.7 percent in unit value. Production data reflecting 2016 and 2017 should be compared to 2015, impacted by the Spring outbreak of HPAI in the upper-Midwest. The price elasticity of eggs is denoted by the disparity in the decline in the New York price benchmark relative to forecast volume of production. The latest data is reflected in the table below:-

 

 

Parameter

2015

(actual)

2016

(actual)

2017

(actual)

2018 2019 Difference % 2020

(actual) (forecast) 2018 to 2019 (projection)

 

 

EGGS

       
 

Production (m. dozen)

6,938*

7,437

7,755

7,952 8,144 +2.4% 8,230

 

Consumption (eggs per capita)

255.8*

272.0

279.9

284.0 289.3 +1.9% 291.0

New York price (c/doz.)

182*

86

101

138 86 -37.7% 97.5

                   

Source: Livestock, Dairy and Poultry Outlook –August 16th 2019

*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.


 

Fears of Recession Arising from Trade War with China Intensifying

08/15/2019

According to Reuters, three economists affiliated with Goldman Sachs Group, Jan Hatzius, Alec Phillips and David Mericle issued a statement including an opinion that resolution of the ongoing trade conflict will not occur in 2019 and that the U.S. will in all likelihood impose a 25 percent tariff on the remaining $300 billion of annual U.S. imports from China that are not subject to duty at the present time.

China announced that all imports of agricultural products from the U.S. would cease as a retaliatory response to the announcement that effective September 1st a 10 percent duty would be imposed on the currently non-tariffed $300 billion in imports to the U.S. The most recent announcement of a delay in imposing the duty will probably not elicit any positive response from China.

The Goldman economists have raised the possibility of a recession affecting all industrialized nations if the trade war becomes intensifies. They have also lowered the 4th quarter U.S. GDP growth forecast to 1.8 percent.


 

Discovery Park of America Will Highlight Innovations in Agriculture

08/14/2019

Discovery Park of America located in Union City, TN will unveil an exhibit entitled “Agri Culture: Innovating for our Survival”. Scott Williams president and CEO of Discovery Park stated, “The absence of firsthand knowledge about farming has led to a population of consumers with a lack of understanding of even basic principles of agriculture today.”  He added, “we are calling this a mind-blowing myth-busting farming exhibit that will change the world and we are certain that after visitors experience our exhibit they will have a much better understanding of how food and fiber get from the farm to the family.”

 

The exhibit was designed by Solid Light a leader in the field.  Cynthia Torp owner and president of the 20-year old company noted, “Discovery Park of America is uniquely positioned to share this story.”  She added, “the project will result in a creative museum experience on the topic of farming unlike anything else in the world.”

 

Subjects to be explored include animal welfare, chemicals, GMOs, organics and sustainability.

 

Discovery Park of America is a 501(c) (3) public charity funded by individuals, corporations and foundations.


 

EGG-NEWS Reverses Stance on Neonicotinoid Insecticides

08/14/2019

EGG-NEWS has supported the continued use of neonicotinoid insecticides but growing evidence that their application is deleterious to insect pollinators is cause for reevaluation.  Although there is no direct proof that neonicotinoids are responsible for bee-colony collapse syndrome, under certain circumstances this class of insecticides can reduce the population of pollinators critical to orchards and insect-pollinated crops.

 

A recent study published in the Proceedings of the National Academy of Sciences demonstrated that uptake of neonicotinoids sprayed on foliage or on soil accumulated in mealy bugs. Their honeydew excretion was toxic to parasitic wasps and hoverflies responsible for pollination.  Hoverflies consuming honeydew from trees sprayed with thiamethoxam died within three days compared to mortality of 10 percent in a control group.  In evaluating application of thiamethoxam to soil, 70 percent of hoverflies consuming honeydew from mealy bugs in the treated group died compared to 14 percent in the control group.  The indirect toxicity of neonicotinoids through consuming honeydew secreted by mealy bugs is yet another example of how toxins can interact in the food chains of beneficial insects.

 

It is necessary therefore to clearly identify mechanisms by which these highly effective insecticides are responsible for adverse effects and to modify application.  Clearly from the perspective of domestic gardeners or other non-commercial agricultural enterprises, the application of neonicotinoids is unacceptable. Integrating this class of insecticides into commercial agriculture requires evaluation with use restrictions short of outright bans as in E.U. nations.


 

Allied Suppliers to the Agribusiness Sector Impacted by China-U.S. Trade Dispute

08/14/2019

Fertilizer manufacturers have been severely affected by both late spring rains with lowered planting in addition to the ongoing trade dispute between the U.S. and China.  Following the announcement that China will suspend imports of all agricultural products from the U.S. Shares in the Mosaic Company fell seven percent on Tuesday August 6th together with Nutrien also a fertilizer manufacturer which fell 3.2 percent.  Implement and equipment manufacturers including Deere and Company are expected to suffer and pesticide and GM seed suppliers Bayer AG and Corteva Inc. have shown significant declines in share price over the past week.

 

There is greater pessimism regarding the outcome of talks between China and the U.S. with a growing realization that there will be no resolution before 2020 if at all before the November election in that year.  It is apparent that China has adopted a waiting game and will do everything in its power to oppose the reelection of the Administration.


 

Incidence Rate of ASF in Bulgaria Increases

08/14/2019

Bulgaria has apparently failed to control African swine fever (ASF) with approximately one-quarter of the 600,000 hog population already culled or dead.  Epidemiologists are projecting that it may be necessary to destroy the entire population to control the infection.  This however will have no effect on the reservoir population of feral hogs.  At least officials in Bulgaria are transparent in relation to problems with the minister of agriculture Yanko Ivanov acknowledging failures by his department.  Imposition of sanitary zones around commercial farms has met with opposition by farmers who are refusing to cull backyard hogs and numerous protests have occurred against control measures.

 

Bulgaria has received $3 million in aid from the E.U. to control ASF although the Commissioner of Health and Food Safety Dr. Vytenis Andriukaitis expressed “deep disappointment” over failure to control of the outbreak.

 

Most recently, Russia reported an outbreak of ASF in a region close to the common border with China. The disease is essentially uncontrolled in China, Vietnam, Cambodia, Mongolia, North Korea and Laos. Pork production in affected nations will be severely curtailed and price rises indicate the disparity between supply and demand.


 

U.S. Soybean Sales to E.U

08/14/2019

The U.S. Soybean Export Council recently announced combined sales of 125 million bushels of soybeans among France, Portugal, Italy and Spain. This quantity represents 6.7 percent of the projected total export of 1,875 million bushels forecast in the July ASDE.

USSEC is to be commended on their activities to replace China as the major soybean importer. The Council has recently organized conventions and promotional activities in Spain, Italy and France. In Portugal, USSEC cooperates with the Portuguese Association of Animal Feed Manufacturers and is using the U.S. Soy Sustainability Assurance Protocol (SSAP) as the means of differentiating the U.S. from major competitors Brazil and Argentina.

The promotional efforts of the USSEC have increased exports to the four major feed producers by 170 percent in 2019 compared to the corresponding period in 2018.


 

Sale of Pig Ear Dog Chews Should End

08/14/2019

Both the U.S. FDA and the CDC are recommending that pig-ear dog chews should be withdrawn from the market due to an extensive outbreak of salmonellosis reported from 33 states involving 127 diagnosed cases. Trace-back studies and sampling performed in plants have revealed extensive contamination of the product. This contributes to intestinal colonization and shedding of Salmonella by dogs with consequential exposure of family members.

On July 3rd, Lennox International of Edison, NJ recalled pig ear pet treats distributed from November 1st 2018 through July 2019.

Dog chews have been implicated in health problems experienced by pets in past months including as yet undiagnosed mortality attributed to dried-meat treats imported from China.


 

Blue Apron Holdings Reports Q2 FY2019

08/14/2019

In an August 6th release, Blue Apron Holdings (APRN) announced results for the 2nd quarter ended June 30th 2019.

Despite the understandably optimistic comments by CEO Linda Kozlowski, a review of the past quarter indicates that the company is probably entering a death spiral. How Ms. Kozlowski can state “Our market opportunity is larger we believe that it is growing, leading to significant unrealized opportunities within our core business” is wishful thinking and rejects the reality of the company’s metrics.

Contrasting June 30th 2018 values with June 30th 2019, orders have declined from 3.1 million to 2.1 million. Customers have declined from 717,000 to 449,000 while average order value, orders per customer and average revenues per customer have remained static. Sales were down 33.6 percent compared to the 2nd quarter of 2018. The company operates with a gross margin of 60 percent admittedly reduced from 64 percent but the P&L documents disproportionate product- technology and general and administrative expenses equivalent to 29.5 percent of revenue. For the most recent quarter, net loss was $7.75 million. Admittedly this was less bad than the $32.84 million loss incurred during the 2nd quarter of 2018. The major reason for the apparent improvement was the fact that the company pared marketing costs from $34.6 million to $9.7 million.

In either an attempt to bolster investor confidence or as an expression of self-delusion, the CEO neglected to comment on the scale of competition. WW International (previously Weight Watchers) is selling meal kits on the Walmart jet.com website. The Kroger Company and Albertson’s have launched rival meal kits and Amazon and Whole Foods have their own brands. It is generally accepted that the market is saturated and that there is little or no brand loyalty among consumers.

Blue Apron is projecting a loss of $55 million to $62 million for the second half of Fiscal 2019 attributed to two new initiatives to increase customer growth and enhance revenue. The company has been impacted by an exodus of executives and in November 2018, laid off five percent of its workforce.

The Blue Apron 52-week range in share price is $6.10 to $35.40 and traded at $8.96 at 14h30 on August 7th. Current market cap is $117.4 million with a forward PE of -2.75. The percentage short of float stands at 28 percent and it is considered significant that only 20.4 percent of the equity is held by institutions. With a negative trailing 12-month operating margin of -13.9 percent and a n profit margin of -15.6 percent and a return on equity of -60.9 percent, this company should be taken over if it has any tangible assets and technology or alternatively should simply be put out of its misery.


 

California Recycling Center Closes

08/14/2019

RePlanet of California has ceased operation and let go 750 employees according to the company president David Lawrence. The termination occurred because of the falling prices for recycled aluminum and PET plastic.

According to the Sacramento Bee the chain that operated 284 sites throughout California will inconvenience grocery and convenience store chains that relied on RePlanet to receive bottles, cans and other recyclables.


 

Dairy Exports Impacted by Trade Dispute with China

08/14/2019

It is not only soybean and cotton farmers adversely affected by the trade dispute with China. For the first half of 2019, U.S. dairy exports were 14 percent lower compared to the first half of 2018. Export of milk powders, cheese, butterfat, and whey products to China were lower by 54 percent compared to 2018. China imported 46 percent less cheese during the first half of 2019 and whey shipments were reduced. In addition to trade conflicts, the U.S. dairy industry is facing competition from New Zealand forcing the U.S. Dairy Export Council to establish new markets including Taiwan, Canada and Mexico.


 

Environmental Benefit of Burning Wood Chips Questioned

08/14/2019

A scientific conflict over the environmental effect of burning wood chips has emerged in the E.U. The group of 28 nations collectively consumed 27.5 million metric tons of wood pellets to generate electricity in 2018. This was up 35 percent from 2016. Power companies can claim subsidies for using wood chips as a fuel since it is regarded as a renewable energy source.

Demand has resulted in the U.S. shipping wood pellets derived from tops, limbs and from trees unsuitable for lumber or furniture according to Enviva Partners, a major processor of timber into pellets. Approximately two percent of standing forests are harvested annually allowing for regrowth which presumably offsets the carbon produced by burning pellets, albeit over a protracted period.

Studies conducted by the Massachusetts Institute of Technology demonstrated that burning wood for power releases more carbon dioxide into the atmosphere per unit of power generated than coal. The difference between wood pellets and natural gas is even more extreme.

A recent lawsuit opposing wood chips to power electric generating plants filed with the European General Court by environmental advocacy organizations was rejected on the basis that the plaintiffs did not have standing. The claim was for the E.U. to rescind subsidies extended to wood chips claiming extensive carbon dioxide release and non-sustainability.

Depending on the acceptance of studies both for and against using pellets as fuel, the viability of the wood chip industry is threatened.


 

Ban on Chlorpyrifos the Subject of Litigation

08/14/2019

According to an August 8th article in The Hill six states including California and New York have filed lawsuits opposing the July 2019 decision by the EPA not to ban chlorpyrifos. A complementary lawsuit was also filed with the Ninth Circuit Court of Appeals by EarthJustice and a group of ten other environmental activist organizations. Chlorpyrifos, marketed as Lorsban™ is applied to corn and cranberries as an effective insecticide. Studies have demonstrated that exposure to chlorpyrifos leads to learning and memory deficits and is neurotoxic especially to children.

Quoted in The Hill article, Tracy Gregoire, Project Coordinator at the Learning Disabilities Association of America stated “A chlorpyrifos ban is long overdue given the overwhelming evidence that this pesticide harms brain development in children”. She added “We are hopeful the courts will side with children who are now being exposed to irreparable, yet preventable harm”.

EPA banned chlorpyrifos for household use in 2001 but has allowed application to continue on farms. The EPA intends reviewing the safety of chlorpyrifos through 2022. The compound is banned outright in the E.U. based on scientific evidence.

The Attorney General OF California commented “The EPA is egregiously sacrificing our children’s health by refusing to make a determination on this dangerous pesticide”. Chlorpyrifos is banned in Hawaii. Other states including California and New York are considering restrictive legislation.

A spokesman for a Latino farm worker’s group based in Oregon stated “A nerve agent pesticide that poisons workers and damages children’s developing brains has no place near our fruits and vegetables”. Ramon Ramirez stated “We look forward to seeing the courts do what EPA refuses to do, to protect workers and children with a ban on chlorpyrifos”.


 

UEP Annual Board Meeting and Executive Conference

08/14/2019

The 2019 Annual Board Meeting and Executive Conference will take place at the Greenbrier resort, WV October 14th to 17th.

Speakers at the program will include Frank Yiannis, FDA Deputy Commissioner for Food Policy and Response, Will Daniels, President ,Produce Division of IEH and Dr. Rudolf  Preisinger, Chief Technical Officer with the EW Group.

The Corporate Social Responsibility Panel will comprise Tim Lambert, CEO of Egg Farmers of Canada, Brett Kaysen of the National Pork Board and Nancy Himmelfarb, a lawyer specializing in sustainability.

The program will include a session on in-ovo gender determination, whole genome sequencing, animal welfare and environmental issues.

For further information, access the UEP website www.unitedegg.com.


 

Amazon Cuts Ties with FedEx

08/14/2019

Dow Jones reports that FedEx Corporation will end its contract with Amazon.com to distribute ground packages and to provide domestic air service. This reality follows a gradual wind-down for the association between Amazon and FedEx to concentrate on the E-Commerce segment working with Target Corp, Walmart and retailers that regard Amazon as a competitor. A FedEx spokesperson noted “the change is consistent with our strategy to focus on the broader E-Commerce market”.

According to industry observers, Amazon has developed its own distribution infrastructure, leasing aircraft, purchasing vehicles and hiring drivers and independent contractors. In July, Amazon was self-sufficient to the extent of 45 percent of orders with the remainder handled by the U.S. Postal Service and United Parcel Service, excluding FedEx from the chain.

Amazon has increased the number of facilities handling orders to more than 400 locations including sorting and delivery centers adjacent to most metropolitan airports.

As with all Amazon endeavors, the Company plans to dominate any selected business space. The company has initiated a “Shipping with Amazon” service to deliver packages from retailers to consumers.


 

Big Dutchman Appoints Agent for Canada

08/13/2019

Steve Walcott, Vice President of Egg Production Sales for Big Dutchman North America, recently announced the addition of J. Dean Williamson Ltd. as a new authorized layer equipment dealer for Canada.

J. Dean Williamson Ltd. (www.jdwpoultry.com) founded in1973, has been efficiently serving customers for over 45 years. Located in London, Ontario, Williamson will primarily focus on selling Big Dutchman rearing, enriched colony, and cage-free systems for laying hens.

Walcott stated “Well positioned as the premier poultry industry equipment provider in Canada, J. Dean Williamson Ltd.’s reputation both in terms of product selection and service were key in our decision to team up with them to sell our layer housing equipment,” Walcott continued, “J. Dean Williamson continuously strives to be the service and support supplier of choice for poultry farmers. We are excited to have them represent us to the Canadian market

On commenting on the association JD Williamson said “Our team is looking forward to offering Big Dutchman’s industry-leading layer housing systems. Their solutions are high quality, matching our other product lines, and they offer an extremely unique advantage with the dedicated support of aviary specialists – a huge selling point”.

Canadian egg producers can contact J. Dean Williamson Ltd. for sales, service and parts needs beginning immediately at +1-519-657-5231 or jd@jdwpoultry.com.


 

Showcasing Egg Functionality for Baking in September

08/09/2019

AEB will exhibit at the International Baking Industry Exposition (IBIE) in Las Vegas September 8-11 showcasing the incredible functionality of Real Eggs in bakery applications.

  • On Monday, September 9 at 1:30pm, AEB will present a 30-minute session titled “REAL Eggs: Integral Role In Baking” explaining how the flavor, functionality and appeal of REAL eggs help deliver the gold standard bakers expect and consumers demand.

Save 20% with AEB’s discount and visit booth #1226 HERE. ?Register for hotel HERE


 

AEB Promotional efforts in Japan

08/08/2019

Late last month, AEB funded a seminar on culinary applications for U.S. dried eggs. The event was organized by USAPEEC Japan at the Tokyo Confectionary School. Guest instructor, Chef Yutaka Yamazaki taught 45 students how to incorporate U.S. dried eggs in breads and confectionary.  

 

For the first half of 2019 Japan imported 4,061metric tons of egg products from the U.S valued at $16.6 million. Imports were 35 percent lower in volume and 39 percent lower in value compared to the corresponding period in 2018.

 

Continual promotion by the AEB in cooperation with the USAPEEC, supported in part by check-off funds is necessary to maintain the demand for U.S.-origin products in the face of competition from suppliers belonging to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership


 

Wendy’s Reports on Q2 FY 2019

08/08/2019

In a press release dated August 7th The Wendy's Company (WEN) announced results for the 2nd Quarter of Fiscal 2019 ending June 30 th

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)

2nd Quarter Ending

June 30th 2019

July 1st 2018

Difference (%)

Sales, franchise fees and other income:

$435,348

$411,002

+5.9

Gross profit Company stores:

$29,958

$29,190

+2.6

Operating income:

$80,573

$71,483

+12.7

Pre-tax Income

Net Income

$45,739

$32,386

$42,264

$29,876

+8.2

+8.4

Diluted earnings per share:

$0.14

$0.12

+16.7

Gross Margin Company stores (%)

16.5

17.4

-5.1

Operating Margin (%)

18.5

17.4

+6.3

Profit Margin (%)

7.4

7.3

+1.4

Long-term Liabilities : June '19 / 'Dec '18

$3,671,226

$2,752,783

+33.4

12 Months Trailing:

     

Return on Assets (%)

3.6

   

Return on Equity (%)

85.5

   

Operating Margin (%)

20.5

   

Profit Margin (%)

-

   

Total Assets June '19 / 'Dec '18

$5,163,893

$4,292,035

 

Market Capitalization

$4,640,000

   

52-Week Range in Share Price: $14.96 to $20.15

Market Close Tuesday 6th $18.15. Close Wednesday 7th post-release $19.52

Forward P/E 26.1 Beta 0.6

WEN achieved 3.3 percent system wide sales growth with 10.0 percent international and 3.0 percent U.S.
In commenting on results Todd Penegor, president and CEO stated, "we delivered another quarter of strong earnings growth and are pleased with our continued progress to build an even stronger foundation for the Wendy's ® brand," He added "We are executing on our plan to accelerate same-restaurant sales in North America and drive global restaurant expansion, fueled by a healthy restaurant economic model. Our relentless focus on bringing every element of The Wendy's Way to life by providing food our customers love, friendly service, value, and an inviting atmosphere will continue to drive growth in the future."

Forward guidance for FY 2019 included:

System wide sales growth of 3 to 4 percent.

EPS growth of 3.5 to 7.0 percent


 

Egg Week

08/07/2019

USDA Weekly Egg Price and Inventory Report, August 7th 2019.

  • Hen numbers in production up 0.7 million to 322.5 million.
  • Shell inventory down 2.2 percent from the past week
  • USDA Midwest benchmark generic prices for extra large and large unchanged at 43.5 and 41.5 cents per dozen respectively. Mediums down 3.1 percent to 31.5 cents per dozen. Hopefully prices reflect a market bottom.
  • Price of breaking stock at 22 cents per dozen and checks unchanged at 7 cents per dozen respectively. Both categories substantially below cost of production

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on August 5 th the Midwest wholesale prices for Extra Large and Large were unchanged at 43.5 and 41.5 cents per dozen respectively. Mediums fell 3.1 percent to 31.5 cents per dozen. All sizes were below the USDA average 5-Region blended nest-run benchmark of 62.7 cents per dozen in June. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.


 


Question by OIG Over Relocation of NIFA and ERS

08/07/2019

The proposed relocation of the Economic Research Service and the National Institute of Food and Agriculture from their present location in Washington, DC to Kansas City has raised questions from the Office of the Inspector General. This watchdog agency opined “while Federal laws give USDA budgetary authority there are established limitations on authority to realign or relocate offices”.

USDA did however notify Congress of the plan to engage private sector assistance to the value of $170,000 to search for a new location but delayed the required notice to the Appropriations Committees of both the House and Senate by 139 days instead of the required 30 days notice.

This apparently is a technical issue and given the determination of the White House and the Secretary of Agriculture to move most of the personnel in the two Agencies, the intended relocation appears to be a fait accompli.


 

Consumer Reports Recovers Listeria in Two Percent of Produce Sampled

08/07/2019

Consumer Reports tested 284 samples of fresh greens including lettuce, spinach and kale at store level. Two percent of the samples yielded Listeria monocytogenes. One strain was apparently similar to an outbreak strain following whole genome sequencing. Both branded and unbagged generic produce yielded Listeria. Following the survey, FDA inspected the plant producing one of the positive samples to determine the extent and distribution of Listeria infection.

It is considered significant that two positive samples were from bagged products bearing a label notation of “triple washed” indicating that a common mitigation procedure to eliminate Listeria is ineffective. Findings have obviously alarmed the Food Marketing Institute. Their Senior Vice President of Food Safety Programs, Hilary Thesmar correctly noted that the entire supply chain has a joint responsibility to provide produce free of pathogens or toxins.

According to the CDC between 1998 and 2016 contaminated produce resulted in between 30 to 60 foodborne outbreaks annually and green vegetables are responsible for between 20 and 40 percent of all cases of listeriosis.

There is currently no absolutely effective method of eliminating Listeria from produce despite attempts to develop wash solutions. Other than by temperature treatment which is impractical for produce, electron beam treatment may be the only potential modality to eliminate infection with Listeria for which there is a zero tolerance.


 

Costs Mount for Farmers and Suppliers Following Unusually Heavy Spring Rains and Flooding

08/07/2019

Flooding coinciding with spring planting impacted suppliers of fertilizer and feed in addition to reducing acreage planted to both soybeans and corn. The Wednesday, July 31st edition of The Wall Street Journal quantifies the impact on suppliers and the grain industry as a result of flooding. In their second quarter report, ADM estimated damage at $65 million as a result of inability to move grain on rivers and from lost export opportunities. Corteva, the agricultural spinoff from the Dow-DuPont merger estimates losses at $300 million from unsold seed and fertilizer. Ingredion, a processor of corn will spend more than $30 million additional to budgeted cost to purchase corn to produce high-fructose syrup and starch.

Values relating to flood losses have not been provided by Bunge, Continental Grain or by Bayer, the acquirer of Monsanto.

Farmers are obviously cutting back on expenditure including tractors and implements with ripple effects through the entire agri-economy of the Midwest. It is expected that the USDA crop insurance program will have to reimburse farmers by over $1 billion with 10 million acres unplanted nationwide.


 

U.S.-Japan Trade Agreement Closer

08/06/2019

During the past week U.S. Trade Representative Robert Lighthizer met with his counterpart in Japan, Toshimitsu Motegi, Economic Revitalization Minister.  Agricultural exports to Japan were the major focus of the agreement which is also dependent on resolution of outstanding issues relating to automobile exports.

 

According to the August 5 MondayLine issued by USAPEEC, Lighthizer has informed Congress that an early outcome from negotiations is anticipated.

 

In 2017 the U.S. unilaterally withdrew from the 12-nation Trans-Pacific Partnership.  This agreement would have lifted tariffs on U.S. agricultural products.  Shortly thereafter the remaining eleven nations subscribe to the Comprehensive and Progressive Agreement on Trans-Pacific Partnership placing the U.S. at a disadvantage with respect to members of the pact who are able to export duty free to Japan.


 

USAPEEC and AEB Present Technical Program in Mexico

08/06/2019

USAPEEC recently organized a technical seminar in Jalisco, Mexico to promote new product development. Fifty participants representing egg production, food service and nutrition were informed about the advantages of U.S. eggs and egg products. The program was supported by the Mexican Association of Poultry Producers and the Center for Technological Innovation and Services for the Food Industry of Mexico.

 

During the first half of 2019, Mexico imported 8.4 million dozen shell eggs valued at $5.8 million and 3,008 metric tons of egg products valued at $7.1 million.  Compared with 2018, the value of imported shell eggs increased by 93 percent for the first half of 2019 and the value of egg products increased by 4 percent.  Mexico is the second largest customer for egg products receiving 20 percent of U.S. exports during the first six months of 2019.


 

Anticipated Approval for Export of Washed Shell Eggs to Mexico

08/06/2019

Following prolonged negotiations, the revised version of the Mexican regulation NOM-1594 Table Eggs and Egg Products, published in January 2018 has been subjected to comment and review by a variety of agencies. Delays occasioned by objections resulted in a postponement of the adoption of the Standard to allow washed shell eggs to be sold at retail.

 

Representatives of USAPEEC Mexico commented positively on the proposal to allow washed eggs to be sold at retail. This elicited a favorable response and the regulation to permit the sale of washed is expected to be published in the Mexican equivalent of the Federal Register in late August.


 

Outbreak of SE in France Attributed to Cheese

08/06/2019

The French equivalent to the FDA, Sante Publique France is investigating an outbreak of Salmonella Enteritidis (SE) in the Loire Valley.  The vehicle of infection was identified as a specialty soft cheese derived from raw sheep’s milk. Cases were first diagnosed in June and extended through mid-July.  The affected cheese was withdrawn from sale in late July following trace-back.

 

This event demonstrates that SE is a ubiquitous food-borne pathogen associated in recent years with chicken meat and produce and should not be regarded as an infection only acquired from eggs. Given universal programs to eradicate infection in most industrialized nations, commercial eggs are no longer a source of SE.


 

AEB Participates in UAE Food Exhibition

08/06/2019

The AEB participated in the 8th Annual International East Coast Salon Culinaire at the Miramar Beach Resort in the Emirate of Fujairah, United Arab Emirates.  The event attracted 400 participants including vendors and visitors.  A culinary contest is a major feature of the Salon.

During the program the AEB presented a class on practical cooking of U.S. eggs and arranged a booth at the event. 

 

For the first six month of 2019, the Middle East imported 2.3 million dozen eggs valued at $2.2 million, approximately 30 percent less in both volume and value compared to the first half of 2018.  Continual promotion demonstrating the quality and versatility of U.S. shell eggs and egg products is necessary to promote exports in the face of competition from the EU, Ukraine and India.


 

USAPEEC Presents Educational Programs

08/06/2019

USAPEEC representatives in Mexico cooperated with the Mexican Meat Processors Council to present the first of two seminars to inspectors and customs officials in the Port of Manzanillo on the Pacific Coast. Imported chicken from both the U.S. and Brazil enters Mexico through this port. The focus of the meeting was Preserving the Cold Chain with Technical Consultant Jose Samperio as the instructor.  Copies of the USDA-Food Safety Inspection Service, Safety and Security Guidelines for Transportation and Distribution of Meat Poultry, and Egg Products were distributed to participants.

 

According to USAPEEC a second seminar will be held at the Cuidad Juarez, Import Point in mid- August.


 

FSNS Adds New Food Testing Laboratory in Allentown, PA

08/05/2019

Food Safety Net Services (FSNS) has opened the Allentown PA., comprehensive analytical laboratory for the food and consumables industry to serve the northeastern region of the United States. The 22,000 sq. ft. state-of-the-art facility is equipped to conduct a wide range of routine and custom microbiological assays, allergen detection, and analytical chemistry. The new facility incorporates a 50-seat training room for FSNS education classes and customer use.

 

“We are excited to be able to service our existing and new customers in the Northeast of the U.S.” said John Bellinger, CEO of FSNS.  He added “we have an excellent, experienced team managing our Allentown laboratory who will take customer service in the region to a new level.”

 

For information on the FSNS Allentown laboratory or to tour the facility please contact Tony Petrucci at 614-971-1396, anthony.petrucci@fsns.com or David Bosco at 559-443-2182, david.bosco@fsns.com.

 

Food Safety Net Services (FSNS), headquartered in San Antonio, Texas, is a national network of ISO 17025 accredited testing laboratories open 24/7, 365 days a year. FSNS provides expert technical resources that assist companies with implementing food safety and quality programs that deliver critical information needed to continually improve process controls. Additional services include GFSI, SQF and PAACO-approved auditing and certification. For more information, click on to the FSNS logo on the right side of the WELCOME page.


 

Status of 2019 Corn and Soybean Crops

08/05/2019

The USDA Crop Progress Report released August 5th documented progress in both corn and soybeans after a slow start to planting that is expected to negatively impact yields as documented in the July WASDE Report (and to be confirmed in the mid-August WASDE) as posted under the Statistics Tab. Current crop condition for both soybeans and corn are inferior to the 2018 harvest as tabulated below. High topsoil moisture levels are evident in comparison with the corresponding week in 2018. Long-range forecasts call for dry weather in the Eastern corn belt in late August.

CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2019 harvest in October.

WEEK ENDING

Crop

July 29th

August 4th

5-Year Average

Corn Silking %

Corn Dough %

58

13

78

23

93

42

       

Soybeans Blooming %

Soybeans Setting pods %

57

21

72

37

87

63

       

 

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2019

Corn 2018

3

3

10

7

30

19

47

50

10

21

Soybeans 2019

Soybeans 2018

3

3

10

7

33

23

45

51

9

16

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

9

28

57

6

Past Year

14

28

53

5

Subsoil moisture: Past Week

6

23

65

6

Past Year

13

29

54

4


 

Ohio Presents Advanced Backyard Poultry Symposium

08/05/2019

Dr. Jeff Hayes Section Head of Pathology at the Ohio Animal Diseases Diagnostic Laboratory coordinated an Advanced Poultry Medicine Workshop on June 20th. Approximately 50 veterinarians attending the day-long session.

 

The program was led by Dr. Geoffrey Lossie, OSU Poultry Extension Veterinarian, with lectures provided by various poultry experts from Ohio State University, Purdue University and the Ohio ADDL.


 

USDA DATA ON CAGE-FREE PRODUCTION

08/05/2019

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 individual monthly flock numbers especially with reports that show a significant increase in the cage-free flock for a specific month followed by stasis in succeeding months. It is questioned is whether it would not be more desirable to post accurate quarterly data in place of unconvincing sequential 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 July 2019 released on August 5 th 2019 documented a static flock size for hens producing under the Certified Organic seal. The National cage-free flock was also unchanged from June. 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 was unchanged for June at 76.0 percent percent for both categories of non-caged hens reflecting a younger national flock (accepting USDA data).

Flock size 2019 (million hens)

June & July

2019

May

2019

April

2019

March

2019

Sept. 2018 through Feb. 2019

August

2018

Certified Organic

15.8

15.8

15.7

15.0

15.7

15.7

Cage-free hens

51.3

50.9

50.7

46.9

41.5

39.1

Total non-caged

67.1

66.7

66.4

61.9

57.2

54.7

 

Average weekly production cases, July2019

Certified Organic

232,824 (233,164 June)

Cage-free

758,647 (758,647 June)

Total non-caged

991,471 (991,811 June)

Average Wholesale Contract Price Cage-Free Brown

$1.54/doz. (Was $1.56 since Nov. '18)

Range unchanged at:

$1.15 to $2.10/doz.

FOB Negotiated price, grade quality nest-run, loose

Price range $0.35 to $0.42 per dozen

Average Value of $0.38/doz. (was $0.52)

 

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

$2.49/doz. (was $2.48 June 2019)

USDA 6-Region

High: NE

$3.16/doz. $2.26 (NE.)

 

Low: SC

$2.02/doz. $2.15 (SC.)

Subscribers are referred 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.


 

Egg Exports

08/04/2019

Export of Shell Eggs and Products January-June 2019.

USDA-FAS data collated by USAPEEC, reflecting export volume and values for shell eggs and egg products are shown in the table below comparing the first half of 2019 with the corresponding period in 2018:-

PRODUCT

Jan.-June 2018

Jan.-June 2019

Difference

Shell Eggs

     

Volume (m. dozen)

54.5

64.0

+9.5 (+17.4%)

Value ($ million)

66.4

51.6

-14.8 (-22.3%)

Unit Value ($/dozen)

1.22

0.81

-0.41 (-33.6%)

Egg Products

 

 

 

Volume (metric tons)

16,781

14,919

-1,862 (-11.1%)

Value ($ million)

61.0

46.5

-14.5 (-23.8%)

Unit Value ($/metric ton)

3,635

3,117

-518 (-14.3%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS DURING

JANUARY-JUNE 2019 COMPARED WITH 2018

Source USDA-FAS/USAPEEC


 


European Food Delivery Companies Merge

08/03/2019

The announcement that Takeaway.com of Holland and Just Eat PLC based in London will merge is a predictor of possible consolidation in the U.S.  It is evident that volume of operation including amortization of management software and logistics is necessary to achieve profitability, given progressively lower margins.  Although volume of deliveries and value are increasing, most of the delivery companies have survived only through regular infusion of venture capital.

 

The proposed combination of the two EU companies processed 360 million orders in 2018 worth $8.1 billion.  Analysts consider that by 2022, 10 percent of restaurant sales will be delivered to homes and offices.

 

The Amazon investment in Deliveroo is currently undergoing scrutiny by UK antitrust authorities. Mergers in the U.S. are likely given the reality that competition is shaving margins. A further complication may arise if Federal or state authorities designate delivery persons as employees and not independent low paid contractors without benefits, functioning in the Gig economy.


 

Passing of Tom Hamilton

08/03/2019

Thomas G. Hamilton died Monday July 29th at the age of 77 years.  He was born in Topeka KS and graduated from Northwestern University, earning baccalaureate and Master’s degrees.

 

He operated Specialty Eggs Inc. a Georgia franchisee of Eggland’s Best LLC. in addition to other businesses.

 

Tom was involved in egg marketing in the Southeast over many decades and contributed to the success of the Eggland’s Best brand through his affiliations with producers and contacts in the market.

 

EGG-NEWS extends condolences to his extensive family. His good nature and collegial interaction will be missed.


 

Cargill Reports on Fiscal 2019

08/02/2019

Closely held Cargill Inc. reported on Fiscal 2019 in a July 30th posting entitled “Reach Higher, the 2019Annual Report”. Cargill revenue is derived 34 percent from North America, 13 percent from Latin America, 24 percent from Europe/Middle East and Africa and 29 percent from the Asia Pacific region.

 

During the year, the company reported adjusted operating earnings of $2.82 billion on revenue of $113.5 billion. The company invested $2.81 billion in strategic acquisition, joint ventures and enhancing existing facilities in FY 2018.

 

Cargill donated $18.8 million to hunger relief and supported food banks providing 57 million meals to the needy in 20 nations.  Total charitable contributions amounted to $61.3 million in 56 countries with an emphasis on education including expenditures of $15.1 million to train 1.6 million farmers in sustainable agricultural practices.

 

As a major multinational agribusiness enterprise, Cargill reduced water usage across supply chains and is actively reducing greenhouse gas emissions aiming for a 10 percent reduction against a 2017 baseline by 2025.   For 2017, Cargill generated 12.4 million metric tons of carbon dioxide-equivalent across all global operations.  For the current fiscal year, carbon dioxide- equivalent emissions rose fractionally to 12.6 million metric tons despite an increase in production levels.

 

The annual report noted increased earnings in the North American protein businesses with value-added egg products performing well.  In contrast a mix of operating and market challenges decreased earnings in the global poultry business.  Animal Nutrition results “trailed last year as the aqua, compound feed, premix and feed additives businesses faced many regional challenges.”


 

Grubhub Second Quarter FY 2019 Results

08/02/2019

In a July 30th press release Grubhub Inc. (GRUB) announced results for the second quarter ended June 30th 2019.  For the three-month period, net income attained $1.25 million on revenue of $325.1 million with an EPS of $0.10. Comparative values for the second quarter of 2018 were net income $30.1 million on revenue of $239.7 million with an EPS of $0.33. 

 

Total expenses increased disproportionately to sales reducing operating income from $34.3 million during the second quarter of 2018 to $650,000 for the second quarter of fiscal 2019.  Income in 2019 included a $600,000 income tax expense compared to a benefit of $4.2 million during the second quarter of fiscal 2018.  Total assets increased 13 percent from December 31st 2018 to $2.34 billion on June 30, 2019. It is noted that 70 percent of assets comprise intangibles and goodwill.

 Grubhub closed on July 29th at $80.19 but after release of the second quarter results sank to $69.83 by the close of trading on Tuesday July 30th.

 

Grubhub ranged in their 52-week share price from $60.20 to a high of $149.35. Market capitalization was $6.38 billion on July 31st. The company acheived a 12-month trailing operating margin of 6.7 percent and a profit margin of 5.0 percent.  Return on assets attained 2.5 percent and on equity 4.2 percent. GRUB is heavily shorted with 26 percent of the float short on July 14, 2019.


 

WEEKLY COMMODITY REPORT

08/01/2019

Price of corn and soybeans sharply down Thursday, 1st August following announcement by the White House of new tariffs on imports from China.

The market responded with a downward turn for corn and soybeans in the mid afternoon when the President announced imposition of a 10 percent tariff on the remaining $300 billion in imports from China not subject to previous tariffs.

The absence of any substantial news regarding the latest round of talks in Shanghai and a resumption scheduled only for September in Washington suggests intractability by China. The continuous stream of conflicting statements by White House spokespersons over the months since the dispute began is disconcerting to the commodities market and has contributed to price fluctuation. On Friday 26th White House Economic Advisor Larry Kudlow interviewed on CNBC commented "we expect China to make large-scale purchases but there has been no commitment but we are playing from the optimistic side". The market reacted negatively to the lack of progress in talks this week between U.S Trade Representative Amb. Lighthizer and Treasury Secretary Mnuchin with their counterparts in Shanghai. Promised purchases of agricultural commodities arising from the presidential meeting in June at the G-20 meeting have not materialized.

The following quotations were posted by the CME at close of trading on Thursday 1st August compared with values for Friday July 26 th (in parentheses).

COMMODITY

 

Corn (cents per bushel)

Sept. 393 (414)

Dec. 404 (424)

Soybeans (cents per bushel)

Aug. 848 (881)

Sept. 854 (887)

Soybean meal ($ per ton)

Aug. 294 (303)

Sept. 296 (304)

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

COMMODITY CHANGE FROM PAST WEEK

Corn: Sept. quotation down 21 cents per Bu        (-5.1 percent)

Soybeans: Aug. quotation down 33 cent per Bu   (-3.7 percent)

Soybean Meal: Aug. quotation down $9 per ton.   (-3.1 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:-

COMMENTS

Subscribers are invited to the review of the weekly USDA Crop Progress Report posted in this edition for the rate of crop emergence and condition.

Some concessions have been promised by China on reducing coercive trade practices and clarifying dispute resolution although U.S. negotiators claim that China has backtracked on structural issues hence the threat of more stringent tariffs and embargos on trade with tech companies in China. From an agricultural perspective the question of delays by China in approving new GM cultivars has yet to be settled.

Prices will be influenced by the trend in stock levels, area planted in 2019 and crop progress through the remainder of the season.

For comparison commodity prices posted by the Dalian Mercantile Exchange in $US per short ton* during mid- July 2019 with comparable CME values in parentheses were:

Corn $255 ($157)

Soybeans $453 ($300)

Soybean meal $377 ($311)

*(conversion Rmb6.8=$US1)

The July 11th 2018 WASDE Report #590, projected that 91.7 million acres of corn would be planted in 2019 to produce 13.88 Billion bushels. The WASDE projected 80.0 million acres to be planted to soybeans. The 2019 soybean crop is projected to attain 3.85 Billion bushels according to the July WASDE. The levels of production and ending stocks for the two commodities are based on completion of planting, projections of harvest area and yield. The WASDE to be published in mid-August will confirm the projected yields and ending stocks of corn and soybeans respectively.

See the WASDE posting summarizing the July 11th USDA-WASDE Report #590 under the Statistics Tab documenting price projections and quantities of commodities to be harvested, processed and exported from the 2019 harvest. The Quarterly USDA Grain Stocks Report was posted on the July 5th edition of EGG-NEWS.

Unless shipments of corn and especially soybeans to China resume in volume, which is highly unlikely, the financial future for row-crop farmers appears bleak despite the release of two tranches of support funding in 2018 amounting to $8 billion as "short-term" compensation for disruption in trade. On July 25th the USDA announced a $16 million package to support agriculture with Market Facilitation funds to be distributed in three tranches. The first will take place in August through the Farm Services Agency under authority of the Commodity Credit Corporation. Payments will be based on the higher of 50 percent of the Producer's calculated payment or $15 per acre provided a cover crop is planted.

The magnitude of the second (November 2019) and third (January 2020) payments will be decided on according to prevailing conditions. Regulations framed in terms of the Additional Supplementation Appropriations for Disaster Relief Act of 2019 enacted in June will determine eligibility.

Promises by China to import soybeans, cotton and corn among other agricultural products can't buy implements, seed, fertilizer and fuel or keep the lights on and food on the table.


 

Merck Animal Health Contributes to Parent Company

08/01/2019

According to the second quarter results for fiscal 2019, Merck Inc. generated sales of $11.760 billion, a 12 percent increase over total quarterly sales of $10.465 billion for the second quarter of fiscal 2018. 

 

Animal Health sales represented 9.6 percent of company revenue at $1.124 billion.  This was a three percent increase over the second quarter of 2018.  Livestock represented 60 percent of Animal Health revenue during the most recent quarter. The Animal Health segment generated $405 million for the quarter, 10 percent less than during the corresponding quarter of 2018 reflecting the impact of foreign exchange.


 

USDA, Guatemala and H-2A

08/01/2019

U.S. Secretary of Agriculture Dr. Sonny Perdue has commented on the agreement between the Department of Labor and the Government of Guatemala relating to the H-2A visa program. In an August 1st press release he stated, “Our farmers and ranchers want to obey immigration law. This move by the United States and Guatemala will allow for greater cooperation and will safeguard against disturbances in the H-2A visa program by protecting workers from illegal recruitment activity, providing our farmers with a stable, legal workforce” He added “the signing of this agreement with Guatemala further solidifies our partnership and engagement with our neighbors and commitment to solving the humanitarian crisis at our southern border.”


 

STOP PRESS

08/01/2019

New Tariffs on China Impact CME Commodity Prices

The market responded with a sharp downward turn for corn and soybeans in the mid-afternoon after the President announced imposition of a 10 percent duty, effective September 1st on the remaining $300 billion in imports from China, not subject to previous tariffs.

 


 

India Belatedly Bans Colistin Antibiotic

08/01/2019

News media in India this past week reported on a Ministry of Health notification prohibiting the manufacture, importation, distribution or sale of colistin a “last resort” antibiotic for human therapy. The action follows widespread abuse of the drug for growth promotion and injudicious, uncontrolled and unrestricted administration to livestock in India.

 

Colistin, a polymyxin is generally effective against Gram-negative bacteria. Abuse, especially in Asia has led to extensive dissemination of the mcr-1 plasmid-encoded gene imparting drug resistance to a wide range of pathogens of human health and veterinary significance.

 

Banning the drug for animal use is only a preliminary step. There must be hundreds of tons of colistin in the pipeline in India and illegal importation or even local manufacture will continue unless Federal authorities impose strict control with substantial penalties.  In the context of India this is highly unlikely. The action by the Government is both a “feel good” response to professional concern but also represents “window dressing” to support the export market for eggs and poultry. India faces concerns by importers over drug residues and contamination with drug-resistant pathogens.

 

Subscribers are referred to numerous articles in EGG-NEWS and CHICK-NEWS on mcr-1 induced drug resistance accessed by entering “colistin” in the SEARCH block.

 


 

ADM Reports on Q2 of FT 2019

08/01/2019

In a press release dated August 1st Archer-Daniels-Midland Company announced results for the 2nd Quarter of Fiscal 2019 ending June 30th.

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

2019

2018

Difference (%)

Sales:

$16,297,000

$17,068,000

-4.5

Gross profit:

$972,000

$1,181,000

-17.2

Operating income:

$370,000

$621,000

-40.4

Pre-tax Income

Net Income

$274,000

$235,000

$652,000

$566,000

-58.0

-58.4

Diluted earnings per share:

$0.42

$1.00

-25.1

Gross Margin (%)

6.0

6.9

-13.0

Operating Margin (%)

2.2

3.6

-38.9

Profit Margin (%)

1.4

3.3

-57.6

Long-term Debt:

$7,701,000

$7,698,000

<0.1

12 Months Trailing:

     

Return on Assets (%)

2.7

   

Return on Equity (%)

8.8

   

Operating Margin (%)

2.8

   

Profit Margin (%)

2.6

   

Total Assets

$42,616,000

$40,833,000

+4.4

Market Capitalization

$23,100,000

   

52-Week Range in Share Price: $37.77 to $ 52.07

Market Close pre-release August 1st 2019 $41.15. After hours post-release $42.09

Forward P/E 11.3 Beta 1.0


In commenting on results Chairman and CEO Juan Luciano stated "We took aggressive action in the face of challenging external conditions, and we are confident that our work over the first half of the year will help deliver a stronger back half," He added "Just as important, our transformative changes are positioning ADM to capitalize on significant market opportunities, and grow earnings and returns in 2020 and beyond.

Luciano concluded "Although the timing is uncertain, we remain confident in the resumption of significant food and agricultural trade flows between the U.S. and China, which will help bolster margins in the U.S. grain export and ethanol industries,"

With reference to African swine fever Luciano opined that the disease might impact global animal protein markets, and eventually support incremental soybean meal demand in key meat-producing regions outside of China.


 

Embryos Capable of Communicating Before Hatch

08/01/2019

A study published in Nature. Ecology and Evolution* reported on investigations conducted on the fertile eggs of yellow-legged gulls. Investigators subjected late-term embryos to the alarm cry of parent birds eliciting a response manifested by vibration of the egg. The effect was transmitted to embryonated eggs placed adjacent to the eggs with embryos not subjected to audible parental alarms.

The investigators concluded that the response indicated the ability of embryos to communicate from within the shell. This adds to the previous knowledge that sound can influence individual embryos but now it is apparent that communication among embryos is possible.

This study may have implications for commercial incubation. The question arises as to whether current sounds generated in a hatcher may be deleterious to chicks by developing an alarm response pre-hatch. Alternatively, can sound be manipulated to create a beneficial response? This is an intriguing question for both researchers and designers of incubation systems.

*Mariette, M.M and Buchanan, K.L. (2019) Good vibrations in the nest. Nature. Ecology and Evolution.3:1144-1145


 

U.S. Soybean Crush Down in June

08/01/2019

The National Oil Seed Processors’ Association (NOPA) reported that June crush attained 4.05 million tons, 6.5 percent below the June 2018 figure of 4.33 million tons.  NOPA reported that the previous three months of 2018 were also lower than the corresponding months in 2019.

Generally processing is reduced during early summer to allow for routine maintenance. Crush rate was impacted in May and June by heavy rains that impeded barge transport.


 

Driver Shortage to Intensify Over Coming Decade

08/01/2019

Despite a mild easing of the shortage of truck drivers in 2019 compared to the previous year, the American Trucking Association emphasizes the shortage of qualified drivers.

According to Bloomberg in 2018, the number of drivers required by U.S. industry increased 20 percent to 60,000 and the American Trucking Association estimates that there may be as many as 160,000 fewer drivers compared to available positions in 2030. Autonomous trucks have been suggested as an alternative to drivers. Future technology may be able to run semis on interstates through the Midwest but maneuvering vehicles at points of pick-up and delivery and reacting to poor weather conditions and difficult terrain suggests that qualified drivers will still be required.

Strategies which are current under consideration include reducing the age for a commercial interstate license from 21 to 18, recruiting more women, making greater use of piggy-back trailer- train combinations, enhancing life styles for drivers applying stagecoach schedules and creating a special work visa for immigrant drivers. Naturally the old expedient of raising wages to compete with construction and other skilled occupations is the most productive short-term solution but ultimately self-defeating.


 

EEE Detected in Orange County, FL

08/01/2019

Sentinel Chickens in Orange County, FL indicate the presence of Eastern Equine Encephalitis (EEE) virus. This arbovirus infection is carried by mosquitos and can infect humans resulting in encephalitis that may be fatal.

A mild winter followed by both heavy rains and heat in early summer has increased the mosquito population creating a problem for all vector-borne diseases, some of which may affect poultry including avian pox, Highland-J and possibly other undiagnosed arboviruses


 

Kroger Initiative to Reduce Food Waste

08/01/2019

The Kroger Company has requested the EPA to establish standards to reduce food wastage. There is reluctance on the part of the EPA to become involved in mandating standards. Administrator, Andrew Wheeler stated “If the industry themselves can come up with a program to standardize best-by dates for example then there is no need for the federal government to intervene”.

According to a posting on Bloomberg, Jessica Adelman, Chief Social Impact Officer for Kroger explained the strategy of her company with regard to conservation. As food products age, they are marked down and if not sold are then donated to food banks. Products unsuitable for human consumption are processed into animal feed or are composted, limiting consignment to landfills. Kroger recognizes the need for both equipment and technology to increase composting of biodegradable material.

 


 

StoreBrands Gaining Market Share

07/31/2019

Store brands are displacing current suppliers among many food categories. These products are manufactured by suppliers or are derived from plants established by chains. Motivation for capital investment in facilities includes the need to maximize margins, secure a supply or to establish high standards of quality or food safety.

Recent examples of backward integration into production include the Liberty Premium broiler operation by Costco impacting Foster Farms and the 2018 Walmart Stores dairy, displacing Dean Foods. The Kroger Companies currently operates over 50 food plants.

During the past year store brands generated $20 billion in sales for The Kroger Company, equivalent to 20 percent of revenue. In 2018 Kroger stocked 15,000 private label items up from 8,000 four years ago. 

Studies have shown that consumers perceive store brands as being equivalent in quality to nationally branded products. This is to the detriment of food manufacturers and packers including Kraft Heinz, Conagra Brands, Campbell Soup Company and J.M. Smucker.

Traditional supermarket chains recognize the competitive advantage enjoyed by deep discounters such as Aldi and more recently Lidl, selling a disproportionate share of their products as store brands, enhancing margins.

According to Nielsen data circulated by the American Egg Board, combining private label and branded categories, volume in 2019 through June showed that within the combination, private label has attained a 71.6 percent share compared to 28.4 percent for branded eggs. Data on the respective changes in volume for the two subcategories confirmed an increase for private label of 2.0 percent and branded by 2.5 percent compared with the corresponding period in 2018. Comparing branded and private label eggs with respect to value, private label generated 60 percent of sales compared to branded eggs at 40 percent. Private label declined by 12.8 percent in dollar value and branded by 5.5 percent over the period. This data suggests that chains mark down private label to maintain sales but with respect to price, private label eggs reacts similarly to conventional shell eggs. In contrast, branded eggs are less sensitive to changes in volume and command a disproportionate value compared to private label.

The following store brands are offered by chains competing with national and local eggs :

  • Aldi – Gold Hen
  • Target – Simply Balanced
  • Costco – Kirkland
  • Kroger – Simple Truth
  • Albertsons/Safeway – Private Selection

 

Starbucks Corporation Reports on Q3 of FY 2019.

07/29/2019

In a press release dated July 25th Starbucks Corporation (SBUX) announced results for the Third Quarter of Fiscal 2019 ending June 30 th.

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

June 30th 2019

July 1st 2018

Difference (%)

Sales:

$6,823,000

$6,310,300

+8.1

Gross profit Company stores

$2,729,000

$2,047,400

+33.3

Operating income:

$1,121,300

$1,038,200

+8.0

Pre-tax Income

Net Income (includes $601m from divesture)

$1,676,900

$1,372,800

$1,026,800

$852,500

+63.3

+61.0

Diluted earnings per share:

$1.12

$0.61

+83.6

Gross Margin Company stores (%)

49.2

50.5

-2.6

Operating Margin (%)

16.4

16.5

-0.6

Profit Margin (%)

20.1

13.5

+48.9

Long-term Debt: Sept 30th 2018/Oct.1 st 2017

$10,520,700

$4,683,500

+124.6

12 Months Trailing:

     

Return on Assets (%)

-

   

Return on Equity (%)

-

   

Operating Margin (%)

14.7

   

Profit Margin (%)

13.6

   

Total Assets

$24,156,400

$14,365,600

+68.2

Market Capitalization

$118,240,000

   

52-Week Range in Share Price: $51.20 to $99.72

Market Close Thursday 25th July pre-release $91.06. Friday 26 th post-release open $96.73

Forward P/E 31.4 Beta 0.5

Global same-store sales growth rose to 6.0 percent; 5.0 percent for the U.S.

U.S. rewards membership up 14 percent to 17.2 million.

In commenting on results, Kevin Johnson, president and CEO stated "Starbucks delivered strong operating performance in the third quarter, further demonstrating that our 'Growth at Scale' agenda is working," He added "our two targeted long-term growth markets, the U.S. and China, performed extremely well across a number of measures as a result of our focus on enhancing the customer experience, driving new beverage innovation and accelerating the expansion of our digital customer relationships".

Johnson concluded "Starbucks continues to be focused and disciplined in the execution of our three key strategic priorities that we established last year: accelerating growth in the U.S. and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestlé, and increasing shareholder returns. With our efforts to streamline the company and elevate the Starbucks brand, we are positioning the company to deliver predictable and sustainable operating results while building an enduring company that creates meaningful long-term value for Starbucks shareholders. Given the strong momentum across our business, we are raising our full-year financial outlook."


 

CDC Updates Salmonellosis Reports From Backyard Poultry

07/28/2019

In a July 19th release, the CDC confirmed a total of 768 cases of various serotypes of Salmonella infection in 48 states. Approximately one third of the patients have been hospitalized with two fatalities.  It is extremely unfortunate that 24 percent of the illness occurred among children under 5 years of age.

 

Based on 315 interviews with 75 percent reporting contact with chicks or ducklings, it is evident that contact with backyard poultry acquired from numerous hatcheries are the sources of infection.  Chicks and ducklings are purchased from agricultural stores and directly from hatcheries.  Five outbreak strains predominate and were recovered from poultry, their environment, and from retail stores.

 

CDC has issued a number of advisories directed to mail-order hatcheries, and prospective owners of chicks and ducklings in addition to appropriate postings on the CDC website including www.cdc.gov/salmonella/backyardpoultry


 

USPOULTRY Updates Incident Investigation Tutorial

07/28/2019

USPOULTRY has revised the Incident Investigation Training Program to assist supervisors and safety personnel to review accidents.

 

The program is divided into causes of incidents, investigations and case studies.  The training program can be downloaded from www.uspoultry.org/training or contact Matt Spencer at mspencer@uspoultry.org

 


 

Aldi to Expand in Three States

07/28/2019

Consistent with the previous announcement that Aldi would be spending $3.4 billion to expand to 2,500 U.S. stores by the end of 2022 the company has announced an entry into Alabama and additional stores in North Carolina and Minnesota.

 

Shawn O’Keefe a Division Vice-president for Aldi stated, “We strive to make grocery shopping an enjoyable experience.  We combine great food with affordable prices.”  Aldi is locating a store in Montgomery AL., the first in the state, to open on August 1st with appropriate promotions. 

 

Aldi will add to the roster of existing stores in Minnesota with the intent of establishing 70 new units.  Despite over-trading, North Carolina was selected for four new stores in the Triangle area opening in late 2019 and early 2020.

 

Over the past two years Aldi has spent $34 million on a program of upgrading and renovating existing units in Minnesota alone.


 

Iowa Poultry Association Pre-Conference Leadership Meeting

07/28/2019

The Iowa Poultry Association has released the agenda for the Pre-Conference Leadership Workshop preceding the 49th Annual Fall Festival to be held September 17th at the Marriott Hotel in West Des Moines.  The program will include John Howeth of the American Egg Board on AEB activities and Dr. Hugo Ramirez of Iowa State University on motivating Hispanic workers. The program will include a panel discussion comprising Jim Dean, Jeff Henning, Bob Riley and Blair Van Zetten.  Registration information is available on the Iowa Poultry Association website info@iowapoultry.com


 




















































































































































































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