Editorial
APHIS Needs a New Approach to Control HPAI
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As we move into the midpoint of the fourth quarter, it is evident that the U.S. poultry industry is facing a recurrence of seasonal avian influenza. Outbreaks have claimed 21 million hens year to date with the fall cases amounting to five million hens over six weeks in five states. Effectively APHIS has not changed its approach to control the infection since the 1985 outbreaks in Pennsylvania and adjoining states. Since this time, the impact of HPAI has increased exponentially with expansion of the egg and turkey industries that have been the most affected but with disease having the potential to decimate broiler production.
It is evident that diagnosis of HPAI has been facilitated by recent technological advancements including PCR and lateral flow immunodiffusion assay kits. From bitter experience, state and federal agencies are now able to rapidly confirm HPAI and then quarantine and dispose of infected flocks. Notwithstanding experience in depopulating large caged-hen and aviary egg production complexes, it may take more than five days to euthanize and dispose of a flock comprising one million or more hens.
It is time that APHIS recognized that HPAI is at least seasonally and regionally endemic with migratory waterfowl and marine birds serving as reservoirs and disseminators of virus each fall and spring. Given the duration of the current epornitic it is possible that domestic, resident avian and mammalian species may perpetuate infection that can be transmitted to commercial poultry.
Despite seasonal reoccurrence of the infection since 2022, APHIS has pursued a futile policy of attempting to “stamp out” the infection. This approach would be justified if an exotic viral disease were to be imported into the U.S. and introduced onto a single farm through defective biosecurity. Eradication would be possible with rapid diagnosis and expedient depopulation and disposal of carcasses. The reality of HPAI is far different from the situation envisaged in the APHIS conceptual model. With respect to HPAI, “stamping out” in the classic sense is inappropriate, outdated and inconsistent with epidemiologic reality.
APHIS has at its disposal personnel with experience in field epidemiology. Despite this resource, the Agency has not conducted thorough epidemiologic investigations relating to the mode of transmission of virus from migratory bird reservoirs to farms. The belated and incomplete publications on outbreaks during 2022 failed to identify what is evident to poultry health professionals in North America. It appears that the infection can be transmitted over distances of up to a mile by the aerogenous route. APHIS has failed to publish on any structured evaluation of environmental variables that may influence transmission or viability of H5N1 virus including humidity, wind movement, cloud cover or temperature. A number of scientific studies have confirmed the possibility of aerogenous transmission as reported in EGG-NEWS during the past year. If it is accepted that avian influenza virus can be transmitted on entrained dust or soil particles then even the most rigorous structural and operational biosecurity will not provide absolute protection for power-ventilated houses as denoted by the circumstances associated with a number of outbreaks.
It is questioned whether APHIS administrators actually want to know how the virus enters farms. To accept that the infection is seasonally and regionally endemic and is transmitted by air movement over as yet undetermined distances, presumes that stamping out will not be possible. Seasonal reintroduction of H5 and H7 influenza viruses predicates a new approach.
Attempting to eradicate avian influenza in commercial flocks by serial depopulation imposes a cost on the public sector through indemnity and logistics. Producers lose income while replacing flocks. Welfare advocates including legislators have condemned extensive depopulation including VSD. The cost of uncontrolled infection for consumers is immense, overshadowing direct costs for control. Depopulation of over 50 million hens during the 2022-2023 epornitic resulted in a constant reduction in the national flock by at least 10 million laying hens resulting in a conservative incremental cost of $2 per dozen spread over 12 months. With domestic sales of shell eggs and products amounting to seven billion dozen, consumers paid an incremental $15 billion as a result of the prolonged and uncontrolled infection. A similar situation is playing out in 2024 with the total flock approximately 12 million under the pre-HPAI level of 326 million.
The adaptation of H5N1 avian virus to dairy herds has created an additional problem for the poultry industry in addition to milk producers. To date, there have been 492 diagnosed cases of bovine influenza among dairy herds. This figure is in all probability an undercount given the reluctance of states other than California and Colorado to impose rigorous surveillance programs based on assay of bulk milk. California has diagnosed 278 cases within three months despite a program of rapid diagnosis with mandatory quarantines. Bovine influenza-H5N1 is a risk to poultry as evidenced by spillovers to farms in Michigan, Utah and Colorado and possibly in the Central Valley of California. APHIS has yet to release the results of epidemiologic studies that presumably have been conducted on the transmission of H5N1 strain B3.13 in the dairy industry.
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The zoonotic aspect of H5N1 influenza virus is a growing concern. Although a reassortment event may result in a strain with both human and avian genes becoming infectious to humans, additional mutations will be required for contagion necessary to precipitate an epidemic. The consequences of an H5 influenza pandemic would far exceed the economic and health effects of the SARS-CoV-19 pandemic. The quicker that the virus can be suppressed in the commercial poultry industry, the safer our population will be.
Creating immune poultry populations especially in areas with a high density of egg or turkey production and with large in-line complexes will reduce the financial impact of avian influenza and mitigate against emergence of a zoonotic strain. The World Organization of Animal Health accepts the principle of immunization as an adjunct to biosecurity and quarantine to control the infection. France and Mexico have successfully deployed vaccination to reduce incidence rates. It is axiomatic that avian influenza is the Newcastle disease of the 2020s. This infection was as catastrophic with respect to commercial production in the 1960s as avian influenza is at the present time. Newcastle disease is effectively controlled by vaccination. Vaccination is obviously not perfect since nothing in biology is absolute.
We are all too aware of the trade restraints associated with vaccination. If, however, the infection emerges in high-density broiler production areas of the U.S. or if Brazil, the major world exporter of broiler products, encounters (or admits) to infection among commercial flocks, the approach of blanket national restrictions would fall away. Importing nations should be guided by the World Organization for Animal Health principles of compartmentalization and regionalization and controlled application of vaccination. The incidence rate of avian influenza in the U.S. with the costs to both private and public sectors and the obvious futility of applying a “stamping out” program predicates immunization using available vaccines on a limited and controlled basis. Turkeys and commercial egg production flocks, especially in areas of high risk, should receive priority consideration. Vaccination of broiler breeder flocks or even commercial growing birds would be based on cost to benefit studies taking into account risks of infection, the financial impact of losses and also trade considerations that may have been overstated.
What is evident is that the program APHIS has following for three years is flat just not working. Hope that migratory birds will cease shedding is not a viable strategy. Current administrators of APHIS should step back from their present policy and restraints and reconsider the limited application of vaccination to protect flocks at the greatest risk based on the history of regional exposure.
Any representative or spokesperson for APHIS or colleagues who wishes to defend the status quo or advance the principle of limited and controlled vaccination is welcome to submit a comment to be posted.
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Egg Industry News
Egg Week
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USDA Weekly Egg Price and Inventory Report, November 13th 2024.
Market Overview
- The average wholesale unit revenue values for Midwest Extra-large and Large sizes were down 2.8 percent on average this past week. Medium size was down 1.6 percent. The 5-day rolling National wholesale price for graded loose on November 8th was $2.62 per dozen down 13.8 percent from $3.04 last week. This value was approximately $0.77 above the 3-year average of $1.85 per dozen and $0.82 above the corresponding week in 2023 at $1.80 per dozen. This past week shell egg inventory was up 5.6 percent, compared to a rise of 4.2 percent during the previous week. During the past week the NYC wholesale price fell 3.8 percent but with the immediate prospect of a plateau through the coming week. The rise in inventory with a fall in wholesale price denotes lower consumer demand relative to supply with the anticipation of higher margins for producers through the remainder of the 4th quarter despite replacement of depleted flocks. Relatively higher prices compared to 2023 are attributed to previous losses due to HPAI in 2024 reducing the national flock by 12 million hens with increased seasonal demand.
- Although there are predetermined weekly transfers of mature pullet flocks to laying houses, the size of the producing flock is constrained by depopulation due to HPAI. During April 2024 almost 8.4 million hens were depopulated with an additional 5.7 million during May and 3.0 million in July. With 2.8 million hens depopulated in October, as the first incident cases of the fall 2024 wave there is currently a deficit of approximately 12 million hens compared to the 2022 flock of 326 million at the onset of HPAI.
- This past week, chains apparently narrowed the spread between delivered cost and shelf price. The reoccurrence of HPAI has probably created concern among chain buyers but they may have been reticent to place orders even with moderating prices notwithstanding the need to ensure adequate stock levels to meet demand. Inventory levels will depend on constant re-ordering to fill the pipeline through the remainder of November into the Christmas surge. Discounters are raising prices on generics influencing mainstream retail stores. Eggs are now less competitive in price against the comparable costs for other protein foods, and have recently been highlighted as a contributor to the prevailing perception among consumers of ongoing food inflation.
- Total industry inventory was up by 3.8 percent overall this past week at 1.71 million cases with a concurrent 4.0 percent decrease in breaking stock, following a 4.7 percent fall during the preceding week attributed to diversion to the shell-egg market.
- It is apparent that the inventory held by chains and other significant distributors may be more important on a weekly basis in establishing wholesale price compared to the USDA regional inventory figures. Changes in stock held by DCs and in the pipeline as determined by weekly orders are probably responsible for up to three percent cyclic fluctuation in weekly industry stock, especially into and after a holiday weekend.
- The U.S. poultry industry has moved from a quiescent period regarding HPAI over the past three weeks with incident cases in northern Utah, southern Washington State and Oregon in October and the loss of a complex in the Central Valley of California this week. California recording outbreaks on broiler-growing farms in four counties last week. Canada has diagnosed cases in The Fraser Valley of British Columbia and an outbreak in Saskatchewan. Over 490 confirmed cases of bovine influenza-H5N1 have been diagnosed in dairy herds in fifteen states with more than 278 herds California. This is a cause for concern since extension to laying flocks has occurred in Michigan, Colorado and Utah. More surveillance information should be released by USDA-APHIS as it becomes available, concerning the prevalence rate of avian carriers of H5N1 among resident domestic and migratory free-living birds. This data should be correlated with a review of molecular and field epidemiology for the past spring outbreaks in order to respond appropriately to the fall wave of HPAI in progress. The USDA has yet to identify and release specific modes of transmission for the 2022-2024 epornitic including likely airborne spread from wild birds and their excreta over short distances as suggested by current research.
- The established relationship between producers and chain buyers based on a single commercial price discovery system constitutes an impediment to a free market. The benchmark price appears to amplify both downward and upward swings as evidenced over the past three years. A CME quotation based on Midwest Large, reflecting demand relative to supply would be more equitable. If feed cost is determined by CME ingredient prices then generic shell eggs should be subject to a Midwest Large quotation.
- On November 13th the stated total flock of 315.2 million, was up by 0.6 million from last week, including about one million molted hens that will resume lay during coming weeks plus 4.5 to 5.0 million pullets scheduled to attain production before the pre-Christmas surge in demand. Given the latest figures for depopulation in Utah, Washington State and Oregon it is estimated that the total flock is approximately 10 to 12 million hens lower than the 326 million before the onset of HPAI in 2022.
- The ex-farm price for breaking stock (rounded to one cent) was down 7.6 percent to $2.38 per dozen.Checks delivered to Midwest plants were down 3.2 percent to $2.39 per dozen this past week. Prices for breaking stock generally follow the wholesale price for shell eggs but with a lag of one to two weeks that may be shorter as in the present situation with weekly fluctuation in price.
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Egg Month
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REVIEW OF OCTOBER 2024 EGG PRODUCTION COSTS AND STATISTICS.
Commencing in January 2024 the EIC justifiably separated the production costs and unit revenue values for eggs derived from caged and cage-free flocks. Accordingly, EGG-NEWS will continue to summarize data but will consolidate production and export statistics for the U.S. egg industry as a total and compare financial data for the two shell-egg categories.
SEPTEMBER HIGHLIGHTS
- October 2024 USDA ex-farm blended USDA nest-run, benchmark price for conventional eggs from caged hens was 256 cents per dozen, up 16 cents per dozen or 6.7 percent from the September 2024 value of 240 cents per dozen. For comparison, average monthly USDA benchmark price over 2023 was 146.0 cents per dozen with a range of 323 cents per dozen in January down to a low of 57 cents in May. Stock levels and prices prior to the onset of flock depletions due to HPAI indicated a relative seasonal balance between supply and demand. Future nest-run and wholesale prices will be largely dependent on consumer demand for shell eggs and products and the rate of replacement of pullets and hens depleted due to HPAI. Other considerations include diversion to shell sales from the egg-breaking sector in an interconnected industry.
- Fluctuation in wholesale price is attributed in part to the amplification of upward and downward swings associated with the commercial benchmark price discovery system in use. Highly pathogenic avian influenza has emerged as a consideration with resumption of migration of waterfowl. Close to 13 million hens and 2.5 million pullets were depopulated during the fourth quarter of 2023 among five states with heavy losses in California. Approximately 17 million hens and 1.5 million pullets have been depleted year to date.
- October 2024 USDA average nest-run production cost for conventional eggs from caged flocks over four regions (excluding SW and West), applying updated inputs was almost unchanged from September at 74.6 cents per dozen. Approximately 60 cents per dozen should be added to the USDA benchmark nest-run cost to cover processing, packing material and transport to establish a realistic price as delivered to warehouses.
- October 2024 USDA benchmark nest-run margin for conventional eggs attained a positive value of 181.4 cents per dozen compared to a revised positive margin of 165.1 cents per dozen in September 2024. Average nest-run monthly margin over 2023 was 64.2 cents per dozen compared to 155 cents per dozen in 2022. This differential was mainly due to higher prices following HPAI-depletion of flocks. It is emphasized that the U.S. benchmark price reflects nest-run conventional eggs.
- The September 2024 national flock in production (over 30,000 hens per farm) was stated by the USDA to be up 4.4 million hens (rounded) to 243.7 compared to the revised August 2024 value of 289.3 million. Approximately 3.0 million hens returned to production from molt in September together with projected maturation of 21.5 million pullets, with this number offset by depletion of an unknown number of spent hens.
- September 2024 pullet chick hatch of 26.6 million was down 6.6 percent or 1.9 million chicks from August 2024.
- September 2024 exports of shell eggs and products combined were up 4.2 percent from August 2024 to 464,000 case equivalents representing the theoretical production of 6.2 million hens. The moderate increase was due to higher imports of shell eggs by Canada and egg products by Caribbean, South American and E.U nations based on need and price.
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TABLES SHOWING KEY PARAMETERS FOR OCTOBER 2024.
Summary tables for the latest USDA October 2024 flock statistics, costs and unit prices made available by the EIC on November 8th 2024 are arranged, summarized, tabulated and compared with values from the previous October 9th 2024 release reflecting September 2024 costs and production data as applicable. Monthly comparisons of production data and costs are based on revised USDA values.
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Commodity Report
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WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: November 15th 2024.
OVERVIEW
The prices for corn and soybeans were moderately lower over the past week reversing the trend from the previous week. Soybeans were down 1.1 percent and corn down 1.4 percent. Corn and soybean prices were influenced by uncertain projections of yield from Brazil and Argentine. There was minimal response to the November WASDE Report incorporating actual harvest values. Farmers are selling both old and new crop to avoid further declines and to make room for the almost completed 2024 harvest. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in Brazil and Argentine. Contributory pricing factors included ongoing disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans from the 2024 crop. More than 95 percent of the 2024 corn crop is “in the bin”. Concurrently 96 percent of the soybean crop has been harvested, in advance of the five-year average. Both crops apparently have superior condition as compared to 2023. The transition from a neutral phase to a La Nina event is underway and will intensify during the remainder of the fourth quarter but has had no effect on the 2024 harvest. The November WASDE, incorporated actual yields and harvest volumes, with USDA updates for anticipated exports, domestic use and carryover for the 2024 crop.
At 12H00 EST on November 14th the CME corn quotation for December delivery was down 1.4 percent to 420 cents per bushel. Corn price was influenced by acreage planted, ethanol demand and the ending stock from the 2023 crop. Farm selling has increased, given the need to make room for the new crop. USDA estimated that 44 percent of old corn stock was held on farms at the beginning of September. Export orders for the current market year have increased in response to lower prices. Volumes and price are indirectly influenced by wheat availability as influenced by weather affecting the Black Sea wheat and corn crops and events in the Red Sea. Orders by China resumed at the end of the 2022-2023 market-year and continued through November despite an increase in the Dollar Index, adding to increased ocean freight. Total exports for the new 2024-2025 market year are 28.8 percent above the previous weeks of the 2023-2024 market year.
Soybeans were priced at 990 cents per bushel for November 2024 delivery, under the 1,000-cent psychological threshold. Price was down 1.1 percent compared to 1,001 cents per bushel last week for November delivery. Lower prices were attributed to the projection of ending stock, farm selling and taking into account recent export orders and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the 2024-2025 market year are 68.4 percent higher than for the corresponding weeks of market year 2023-2024.
Soybean meal was priced at $289 per ton for December delivery, down $6 per ton (-2.0 percent) from last week. Price is influenced by demand coupled with reestablished crush volume in September restoring the processing trend during the first half of 2024. Price will fluctuate to reflect the CME price for soybeans and the depressed demand for biodiesel due to oversupply and the consequential adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the updated November WASDE Report.
On November 13th at 16H00 EDT the price for WTI was $68.04 down $3.86, (-5.4 percent) from last week. Current price is not materially affected by uncertainties and tensions in the Middle East but reassured that retaliatory action as announced by Israel did not include Iranian oil installations. Over the longer term price reflects moderate world demand for crude as economies and especially that of China have retracted requiring central bank stimulation in late August. It is evident that U.S. production is a moderating influence on World price, attaining a record average of 13.4 million barrels per day in August with ample reserves. There was fluctuation in the price of WTI through November 13th with the range during the week extending from $69.96 on November 7th down to $68.04 on November 13th.
Ample U.S. crude production is constraining domestic and international prices. The recent decline in energy costs during the past three months contributed to deflation influencing the FOMC in their decision to lower the benchmark interest rate 0.5 percent at the September and 0.25 percent at the November meetings.
Economic data released during the past quarter (Q2 GDP; PCE, Confidence, Productivity, Employment) confirm a growing economy but with a downward trajectory in inflation. Second Quarter GDP was revised upward to 3.0 percent from the previous projection of 2.8 percent. Federal Reserve Chair Jerome Powell and Reserve Bank Governors previously indicated one or two additional reductions in the 10-year rate during 2024 with a cut anticipated in December. The August and September Non-farm Payrolls and labor data clearly indicated the danger of prolonging the high benchmark interest rate that was negatively impacting the U.S. economy. The Federal Reserve is now addressing employment as a priority over containing inflation.
Macroeconomic U.S. factors:-
- Most economists in academia and the private sector accept that the U.S. economy has achieved a “soft landing” despite the release of the Q2 2024 increase in GDP to 3.0 percent and coupled with recent economic parameters including the ECI, CPI and PPI. Annual inflation as measured by the headline PCE declined from 8.9 percent in June 2022 to 2.1 percent in September 2024. This is in part a response to a series of 11 FOMC rate raises followed by eight pauses that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Lower energy prices are contributing to deflation.
- The Federal Reserve lowered the benchmark interest rate by 0.5 percent at the monthly FOMC meeting on September 18th, the first of a series of actions after eighth sequential pauses. The Federal Reserve commentary indicated that progress has been made in reducing the rate of inflation. The Fed lowered the rate by a further 25 basis points on November 7th as anticipated with a subsequent reduction of 25 basis points expected at the December meeting but with a possible pause into early 2025. Chairman Powell in Congressional testimony, and at the post-meeting press conference and also documented in FOMC minutes indicated that decisions would be based on demonstrated progress in reducing inflation as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025. This now appears feasible.
- The October 30th release by the Bureau of Economic Affairs documented an advanced estimate of Q3 2024 GDP of 2.8 percent based on preliminary figures although this value will be revised. This figure compares to the Q2 GDP of 3.0 percent and the 2.9 percent value for entire 2023. The first estimate of Q3 GDP was influenced by higher consumer spending, especially on non-durable goods.
- The November 13th release of the Consumer Price Index (CPI) for October showed a 0.2 percent rise over September and an annual increase of 2.6 percent consistent with prior estimates. The annual value is compared to 2.4 percent for September. Core CPI (excluding food and fuel) was up 0.3 percent in October with an annual increase of 3.3 percent, unchanged from September. Food at home was up 0.1 percent for October and 1.1 percent over 12 months. Food away from home was up 0.2 percent for October and up 3.8 percent compared to October 2023. Shelter was up 0.4 percent during October accounting for half of the inflation during the month. Notwithstanding the increase in CPI during October a reduction in benchmark interest rate is anticipated at the December FOMC Meeting.
- On October 31st the Bureau of Economic Analysis released the Personal Consumption and Expenditure Price Index for September. The core PCE (excluding food and energy) was up 0.3 percent from the previous month, and attained 2.7 percent year-over-year. The Headline PCE was up 0.2 percent from August and 2.1 percent from September 2023, a 42-month low and consistent with projections. Food at home was up 0.4 percent from September and 1.3 percent from September 2023. Food away from home was up 0.3 percent from September and 1.3 percent from September 2023. The headline PCE is closely followed by the Federal Reserve and confirms that inflation is progressively moderating but still above an annual target of 2.0 percent.
- The October Producer Price Index for Final Demand (PPI) released on November 14th rose 0.2 percent from September consistent with expectations. This was attributed in part to a 0.3 percent increase in services and a 0.3 percent increase in food. The PPI was up 2.4 percent over the past 12-months ending in October compared with 2.8 percent for the 12-month period through September. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.3 percent from September and 3.5 percent over the previous 12 months.
- A Federal Reserve release on October 17th confirmed that industrial production was lower by 0.3 percent in September compared to an increase of 0.3 percent in August. Capacity utilization was lower at 77.5 percent and was 2.2 percent below the long run 1972-2020 average.
- The October 25th report by the Department of Commerce, Census Bureau on Durable Goods Ordered during October 2024 decreased by 0.8 from the previous month and 12.1 percent year-to-date, following a 0.8 percent decline during September. Excluding the Transportation component, new orders in October increased by 0.5 percent compared to an increase of 1.7 percent in September..
- In a November 4th release the Census Bureau confirmed that factory orders for U.S. manufactured goods fell 0.5 percent in September and compared to a revised fall of 0.8 in August. Shipments of manufactured goods were down 0.4 percent in September.
- The October 15th U.S. Census Bureau release of the advanced estimate of retail and food sales data for September was up 1.5 percent from the revised August value and up 7.7 percent over 12 months. Food service sales were up 0.7 percent from August and up 9.4 percent over 12 months. Grocery store sales were down 0.6 percent from the revised July value and up 4.0 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
- The October 31st release by the Institute for Supply Management (ISM®) reported a lower Manufacturing Index for October at 46.5 compared to the September value of value of 47.2. The October value was still below the bifurcation point of 50 percent between contraction and expansion. The Prices Index rose to 54.8 points in October compared to 48.3 points in September, denoting higher costs for production. U.S manufacturing does not currently reflect an improved economy, and manufacturing has yet to recover from prolonged high benchmark interest rates. The Production Index for October was 46.2 points compared to 49.8 in September.
- On October 31st the U.S. Bureau of Labor Statistics reported a 0.8 percent increase in the Employment Cost Index (ECI) over the 3rd quarter of 2024. The year-over-year increase in wages and salaries was 3.9 percent and with benefit costs up by 5.8 percent. The ECI is closely followed by the Federal Reserve FOMC and this data justified in part the 50 basis point drop in the benchmark interest rate in September and strengthens the possibility of additional rate cuts.
- The October 29th Consumer Confidence Report prepared by The Conference Board for October, confirmed a substantial increase to 108.7 from the revised September value of 992, with all segments up. The Present Situation Index measuring perceptions of current business conditions rose 14.2 points to 138.0 in October. The Expectations Index increased from a revised September value of 82.8 to 89.1 and was the fourth consecutive month above 80. Values below this threshold over consecutive months and with a downward trajectory are regarded as predicting a recession.
- The October 11th University of Michigan Index of Consumer Sentiment for October fell to 68.9 from a revised September value of 70.1. The Current Economic Index was 62.7 in October down from 63.3 in September. The Index of Consumer Expectations was 72.9 down from 74.4 in September, denoting deterioration in consumer sentiment despite the September rate cut and lower inflation. Geopolitical factors and uncertainty over the upcoming election have adversely influenced sentiment. In perspective sentiment is up 8 percent above September 2023 and 40 percent above the low in June 2022.
- Non-farm payrolls added an unanticipated low 12,000 in October, as documented by the Bureau of Labor Statistics in a November 1st release. This was far lower than the anticipated 113,000, due to the impact of Hurricanes and strikes should be compared to the upwardly revised September value value of 223,000. The unemployment rate held at 4.1 with 7.0 million unemployed and with 1.6 million in the long-term category. The real average hourly earnings value during October was $30.48. Average hours worked in manufacturing was higher at 34.3 hours per week. Labor participation was at 62.6 percent 0.1 percent lower from September. Wage rates increased 4.0 percent over 12-months. Wage rates are closely followed by the Federal Reserve FOMC.
- The Bureau of Labor Statistics Job Openings and Labor Survey report (“JOLTS) released on October 29th estimated 7.44 million job openings at the end of September, unexpectedly below a forecast of 8.00 million and lower than the revised August value of 7.86 million. The September job openings number was the lowest since January 2021 and was down 1.2 percent over 12 months. The peak job openings figure was 12.2 million in March 2022 during COVID. The September hiring rate was 3.5 percent (5.5 million hires); the September total separation rate, 3.1 percent (5.2 million); the quit rate 1.9 percent (3.2 million); and the layoff rate 1.2 percent, up 0.2 percent from August at 1.8 million.
- The seasonally adjusted initial jobless claims figure of 217,400 released on November 14th for the week ending November 9th was down by 4,000 from the revised value of 221,000 for the previous week and the lowest value since May. The weekly value was lower than the Reuters estimate of 2232,000. The four-week moving average declined to to 221,000. The Bureau of Labor Statistics estimated 1.873 million continuing claims for the week ending November 2nd (down 11,000 from the revised value for last week), compared to a peak on November 27th 2021 at 1.928 million. The September unemployment rate held at 4.1 percent. There is clear evidence from data over the past three months that the labor market is cooling as confirmed by Chairman Powell in Congressional testimony and release of downward revised figures for job creation. The jobs market is still tight, but with sporadic weekly fluctuation in new claims due to weather, strikes or scheduled plant shutdowns. Unemployment data has now recovered from the effects of Hurricanes Helene and Milton but the strike by Boeing machinists, now settled, still contributed to claims.
- The November 7th Bureau of Labor Statistics report recorded a 2.2 percent increase in non-Farm Productivity for Q3 2024. Labor cost increased by 1.9 percent compared to 0.9 percent for Q2 2024. Output was up by 3.5 percent.
- The ADP® reported on October 30th that private (excluding government data) payrolls increased by an unexpected 233,000 in October, up 74,000 from the revised 159,000 in September and compared to a consensus estimate of 111,000 jobs. The increase in employment was mostly in the service-related sectors amounting to 211,000 positions. Individual categories included the Transportation, Trade and Utilities sector, (+51,000); Construction, (+37,000); Hospitality, (37,000); and Professional and Business Services, (+20,000); Information (+7,000). Manufacturing was down 19,000. Annual pay was up 4.6 percent year-over-year for ‘job-stayers’, down 0.1 percent from August 2024. The increase as reported by ADP will not directly influence the probability of short-term future changes in interest rate since the number, although based on 25 million positions, excludes the public sector. Monthly ADP data is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report.
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Crop Progress
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Status of 2024 Corn and Soybean Crops
The USDA Crop Progress Report released on November 12th recorded 96 percent of the soybean crop harvested, an advance of 2 percent this past week. Ninety five percent of the corn crop has has been harvested, up 4 percent from last week. Both crops were ahead of the 5-year averages by 5 percent and 11 percent respectively compared to the corresponding week in 2023. At the end of each season extending into mid-November progress in completing the harvest slows following the principle of diminishing returns as poor quality and late-planted fields remain.
Consistent with seasonal temperatures and previous rainfall across the Midwest and Plains states, crop condition was assumed to have remained unchanged during the past four weeks in the absence of reports. Prospects for high corn and soybean yields were reflected in stable price projections in the WASDE. The CME futures prices for November and December (‘new crop’) delivery were higher by less than five percent compared to the USDA projections.
Heat stress that occurred during silking predisposes corn to fungal infection leading to mycotoxin contamination of kernels. Unseasonal rain during the immediate pre-harvest period for corn will also contribute to the elaboration of mycotoxins. The status of the 2024 crop in regions will require monitoring post-harvest in affected areas and especially if unseasonal precipitation occured during the late pre-harvest period. Initial assays suggest corn with elevated DON in some regions.
Reference is made to the November 8th WASDE Report #654 retrievable under the Statistics TAB, and the weekly Commodity, Economy and Energy Report, in this edition, documenting acreage harvested, yields, weekly prices and ending stocks. Data for 2024 will be updated finally in the December WASDE to be summarized in the December 14th edition of EGG-NEWS.
The November WASDE presumably incorporated the results of the USDA-NASS annual remote survey on yields and final production. Pro Farmer completed their annual crop tour in mid-August. The November WASDE report estimated U.S. corn yield at 183.1 bushels per acre (compared to the Pro Farmer estimate of 183.8 bushels per acre) with a projected crop of 15.14 billion bushels. (Pro Farmer, 15.20 billion bushels). The corresponding values for soybeans were a yield of 51.7 bushels per acre (Pro Farmer 53.1 bushels per acre) contributing to a 2024 crop of 4.46 billion bushels. (Pro Farmer 4.93 billion bushels).
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USDA-WASDE REPORT #654, November 8th 2024
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OVERVIEW
The USDA provided updated projections for the production of corn and soybeans in the November 8thWorld Agriculture Supply and Demand Estimates (WASDE) #654, reflecting the 2024 crop. Production values for corn and soybeans were updated from the September edition and are based on actual field data. Projections of crop size and ending stocks are derived from acreage planted, updated yields from the harvest approaching completion, carry-forward levels from 2023, and with the latest assumptions relating to domestic use and exports.
The November 8th WASDE report predicted that corn would be harvested from 82.7 million acres, unchanged from the October projection. The soybean crop will be harvested from 86.3 million acres, unchanged from the October report.
The November WASDE reduced the yield value for the 2024 corn crop by 0.4 percent to 183.1 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The November projection of soybean yield was lowered by a substantial 2.6 percent from the previous WASDE to 51.7 bushels per acre compared to 49.9 bushels per acre in 2023.
The October USDA projection for the ending stocks of corn was down 2.8 percent to 1,999 million bushels. The October USDA projection for the ending stock of soybeans was unchanged at 550 million bushels.
The November 2024 WASDE held the projection of corn price at 410 cents per bushel. The projected average season price for soybeans was held at 1,080 cents per bushel. The price of soybean meal was unchanged at $320 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins or in some areas corn will be below break-even given relative production costs and per bushel price. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.
Projections for world output included in the November 2024 WASDE report, reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from a transition to a La Nina event especially on South America. Hostilities are ongoing in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. Production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.
It is accepted that USDA projections for export are also based on the perceived intentions and needs of China. This Nation has sharply curtailed purchases of commodities and especially U.S. soybeans during the current market year despite fiscal stimulus with a projected recovery of the Nation’s economy influencing consumer demand for food and fuel.
Reports on volumes of commodities exported are included in weekly editions of EGG-NEWS, derived from USDA-FAS sales data. Weekly Crop Progress reports will be posted through late November
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Chipotle Posts Q3 FY 2024 Results
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In a July 24th release, Chipotle Mexican Grill (CMG) reported on the 3rd quarter of fiscal 2024 ending September 30th.
For the period, the company earned $387 million on total revenue of $2,794 million including delivery payments, generating a diluted EPS of $0.28. For comparable Q3 of fiscal 2023, Chipotle earned $313 million on total revenue of $2,472 million.
Total revenue increased by 13.1 percent over Q3 FY 2023 and comparative same store sales were up by 6.0 percent. Digital sales represented 34 percent of revenue in the most recent quarter. Restaurant operating margin increased from 16 percent to 16.9 percent in Q3 2024.
During Q3, Chipotle opened 86 new stores, with 73 equipped for drive-through service. Chipotle operates 3,662 stores with average annual sales of $0.8 million.
In commenting on results, Scott Boatwright, Interim CEO stated “ Our focus on exceptional people, food and throughput and the long-awaited return of Smoked Brisket drove another quarter of strong results led by transaction growth," said, Chipotle. "Our teams work hard to deliver extraordinary value to our guests as they provide our fresh, delicious and customizable culinary experience, at accessible prices to millions of people every day. They are the backbone of Chipotle and, together with our support centers, we will continue to execute against our five key strategies that help us win today, while we grow our future. This will help us to achieve our long-term target of reaching 7,000 restaurants in North America and move towards a more global brand."
For 2024 Management retained projections with a sales increase of “mid to high single digits,” a range of 285 to 315 new stores with 80 percent equipped for drive through delivery.
On September 30th Chipotle Mexican Grill posted assets of $9,011 million with long-term lease obligations of $4,213 million. Market capitalization was $79,320 million on November 7th. During the past 52-weeks, CMG has traded over a range of $41.92 to $69.26 with a 50-day moving average of $57.35. CMG closed pre-release on October 29th at $60.49 but closed on October 30th post-release at $55.75. On a trailing twelve-month basis, operating margin was 17.5 percent and profit margin 13.5 percent. The Company generated returns of 14.0 percent on assets and 45.7 percent on equity.
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OvoVision and Innovia Consulting Establish Strategic Partnership
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Ovo-Vision, based in Holland, a leader in ERP software solutions for the egg industry, has established a strategic partnership with Innovia Consulting of Wisconsin to expand software services in the U.S., Canada and Mexico. This collaboration, will allow Ovo-Vision to expand their existing U.S. team by leveraging the expertise of sixty Innovia consultants experienced in Microsoft Dynamics 365 Business Central as applied to agricultural and food industries.
The strategic partnership will strengthen the presence of Ovo-Vision in North America and expand services to meet the growing demand for integrated software solutions for egg producers and packers across the U.S., Canada and Mexico. Jack Jenniskens, CEO of Ovo-Vision stated “Our partnership with Innovia Consulting represents a significant milestone for Ovo-Vision as we continue to scale and deliver exceptional value to our clients in North America. He added, “Innovia’s extensive experience with Microsoft Dynamics 365 Business Central and its strong presence in food and agriculture aligns perfectly with our vision to deliver innovative software solutions to the egg industry that support the specific needs of our clients.”
Innovia Consulting has a proven track record of success with Microsoft Dynamics 365 Business Central, and their dedicated team has helped numerous organizations in food and agriculture streamline their operations and drive growth. Alan Wyne, CEO of Innovia Consulting stated, “We’re excited to collaborate with Ovo-Vision to bring our extensive expertise in applying Microsoft Dynamics 365 Business Central to a new segment of agribusiness.” He added “With this partnership, we’re well-positioned to provide high quality, scalable solutions that empower businesses to thrive in an increasingly competitive and more complex landscape.”
Ovo-Vision is a dedicated and dynamic team of developers and consultants, committed to
delivering innovative ERP software solutions tailored to the unique needs of egg businesses for over 25 years. With a strong presence in Europe, Ovo-Vision has built a reputation for excellence in providing integrated software solutions that drive operational efficiency and growth.
Innovia Consulting has supported clients with software and applications for over forty years. Innovia is a leading provider of Microsoft Dynamics 365 Business Central services to a wide variety of clients in agriculture and food processing to achieve efficiency and growth.
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Scientist’s Evaluation of the Zoonotic Potential of H5N1 Virus
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It is evident that a proportion of workers depopulating flocks diagnosed with H5N1 or in close contact with herds excreting the virus in milk are susceptible to infection Approximately fifty cases of clinical H5N1 have been documented without contagion although structured sampling for virus and antibody response has yet to be conducted.
Notwithstanding the limited zoonotic ability of H5N1 at present, a leading specialist in the molecular biology of influenza viruses is concerned over emergence of infection in both marine and terrestrial mammals. Dr. Richard Webby, the Director of the World Health Organization Collaborating Center for Studies on the Ecology of Influenza in Animals and Birds at St. Jude Children’s Research Hospital expresses a conservative view on the potential for extensive infection of humans based on current studies of viruses isolated from dairy cattle and poultry flocks. He stated, “From where we are now to a pandemic virus, reassortment alone is not going to get us there.” He added, “ It is going to take reassortment followed by some critical mutations necessary for the virus to spread efficiently among humans. The specific changes in the genome that would facilitate person-to-person spread (contagion) have not been detected in any of the genetic sequences of isolates from human cases. In the event that mutations do occur in the future to increase the ability of the virus to infect the lower respiratory tract, or to result in contagion, the situation will obviously change.
It is considered essential that all people coming into contact with live poultry at farm and processing level should be vaccinated against the seasonal influenza viruses. This would reduce the probability of a reassortment event leading to a novel potentially zoonotic strain. Reassortment was in all probability the origin of the 1918 worldwide pandemic with catastrophic mortality. The 2009 H1N1 swine flu event was responsible for both clinical cases and a limited number of fatalities compared to the post-World War I outbreak.
Until H5N1 vaccines are deployed among farm workers in the U.S., sensible precautions including the effective use of PPE should be followed.
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AEB Trade Mission to Mexico
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In a November 8th release, the American Egg Board announced a trade mission to Mexico over the period November 11-14. The objective was be to strengthen long-term relationships in the most important U.S. export market.
Emily Metz president and CEO of the AEB commented, “Our commitment to taking our egg farmers on international missions like this one to Mexico is a key component of our broader global strategy to increase egg industry exports over the next five years.”
The trade mission will be in partnership with the USA Poultry and Egg Export Council and will establish and reinforce relationships with buyers, traders and processors in Mexico.
Participants in the trade mission will include Nick Jones, the Director of International Marketing for the AEB and representatives of Deb El Food Products, Rose Acre Farms, S&R Egg Farm and Versova.
Significant contacts will include Sigma Alimentos a major food processor, Supermercados Internationales-HEB a major supermarket chain with 62 branches and Sorina, a grocery and department store retail chain with 824 stores under various banners.
In 2023, Mexico imported 15 million dozen eggs valued at $17.4 million an almost three-fold increase over the previous year. Over the same period, Mexico imported 4,704 metric tons of egg products valued at $22.8 million. For the first eight months of 2024 Mexico imported 1.6 million dozen shell-eggs valued at $2.8 million and 294 metric tons of egg products valued at $2 million. These values were approximately 60 percent lower compared to the corresponding period in 2023 when lower prices prevailed.
Decisions by Mexico as with all importing nations are based on need, availability and above all price. Due to seasonal outbreaks of HPAI since 2022, escalation in U.S. prices for shell eggs and products and the needs of Mexico have determined the volume of production independently of promotion, relationships and marketing endeavors.
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TGI Friday’s Files for Bankruptcy Protection
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The TGI Friday’s chain of company-owned U.S. restaurants co-owned by TriArtisan Capital Advisors and Sentinel Capital Partners, has filed for Chapter 11 bankruptcy. The Bank of San Antonio is providing bridging funding while the company restructures. Currently TGI Friday’s operates 39 company-owned restaurants in the U.S. The bankruptcy filing does not affect franchised operations that are independently owned and the TGI Friday’s franchisor that owns the brand and intellectual property. The TGI Friday’s chain posted sales of $728 million in 2023 continuing a downward trajectory associated with suspension of operations in numerous locations since 2021 marking the beginning of COVID restrictions.
Casual dining has undergone a loss of patronage as customers have either moved down-market to QSRs or have continued with a preference for eat-at-home. Bankruptcies in 2024 have included Red Lobster, essentially the result of self-inflicted mismanagement but also other fast casual chains including Tijuana Flats.
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USDA Eliminating ‘Junk Fees’ on School Meals
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In a November 1st announcement, the USDA announced that families of students receiving free and reduced-price school meals will not be charged supplementary fees.
Secretary of Agriculture Tom Vilsack stated, “While today’s action to eliminate extra fees for lower income households is a major step in the right direction, the most equitable path forward is to offer every child access to healthy school meals at no cost. We will continue to work with Congress to move forward that goal, so that all kids have the nutrition they need to reach their full potential.”
Children from families with incomes under 185 percent of federal poverty guidelines will be eligible, representing approximately one million recipients for reduced-price meals. Ultimately the ban on junk fees will be extended to a total of 30 million children receiving school meals each day.
The action taken is in response to investigations by the Consumer Protection Financial Bureau that identified onerous charges in the form of ‘processing fees’ imposed by third party agencies. In some cases fees exceeded the cost of breakfasts and lunches. Fees will be capped at 30 cents and 40 cents respectively for these meals.
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Walmart to Lead on Adoption of 2D Barcodes
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Introduced in 2022 and conforming to the supply chain standard GS1, Walmart is apparently leading in adoption of 2D barcodes among retailers. The 2D barcode is imprinted with thousands of digits that will incorporate sale-by date, available discounts and will allow stores to track inventory and to implement recalls. Consumers who scan 2D barcodes will have information on nutritional content, allergens, promotions and food preparation.
Walmart is also evaluating AI voice applications to facilitate repeat orders and for customer convenience using online ordering and curbside pickup.
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Albertsons Facing Federal Investigation over Overcharging
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Albertson’s Companies recently settled with the state of California for $4 million to resolve allegations that their banners operating in the state “unlawfully charged customers prices higher than their lowest advertised or posted price” In addition it was alleged that inaccurate weights were printed on labels. The settlement covered 589 stores in California under banners owned by the Albertson’s chain including Safeway and Vons.
The settlement elicited the intervention of Senator Elizabeth Warren (D-MA) and Rep. Adam Schiff (D-CA) who are calling for a federal investigation by the Federal Trade Commission and the Department of Agriculture to determine whether Albertson’s activities represented deceptive acts in violation of Section 5 of the Federal Trade Commission Act and the Fair Packaging and Labelling Act. The initiative by Senator Warren and Rep. Schiff is supported by fourteen members of Congress.
In response Albertson’s Companies stated that they are committed to ensuring that customers pay the lowest advertised prices for products. The Company maintains that they follow local pricing rules and regulations and will correct discrepancies. Albertson’s maintains that it has made changes to reduce the risk of repetition of “errors” relating in overcharging.
It is evident that the recent history relating to Albertson’s in California and allegations raised in the Oregon, Washington and Colorado litigation will influence the final decision regarding the Kroger-Albertsons merger. The results of the November 5th election and the anticipated changes that will take place in the DOJ and FTC may alter the outcome of Federal opposition to the merger of the two pure-play supermarket giants.
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Bryant Research Report Promoting Vegan University Catering
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A report entitled Climate-Conscious & Cost-Effective: The Case for Plant-Based University Catering by Bryant Research presents a financial justification to incorporate plant-based servings in university meals. The report purports to show that plant-based alternatives to meat-containing meals are one-third cheaper and would save on catering expenditure. The report calculated that a medium-sized university with 10,000 students would save approximately $650,000 annually by serving only plant-based meals. This is a relatively inconsequential amount ($1.25 per student per week) relative to the cost of food preparation including labor, ingredients, utilities and consumables and compared to the fees imposed by universities for tuition and residence.
The report also hyped the environmental benefits relating to plant-based servings, including a claimed reduction in the emission of carbon-dioxide equivalent greenhouse gases, land use and water in comparison to menu items based on animal-derived protein.
The report however fails to recognize the desires of students and their ability to choose menus. The report effectively represents a roadmap towards eliminating red meat and poultry from university catering by 2023. Advocates of a vegan lifestyle have identified school and university catering as an area to advance plant-based diets with the objective of engendering life-long patterns of consumption that disfavor meat and poultry in diets.
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Limited Product Return Following Boar’s Head Recall
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To date, 2.7 million pounds of products processed at the Jarratt, VA plant operated by Boar’s Head have been returned. This represents approximately 40 percent of the total recall and assumes that 4.3 million pounds comprising 71 processed products were consumed since product is presumably now beyond expiry date.
The Centers for Disease Control and Prevention have documented 59 cases of listeriosis with ten fatalities among nineteen states. Since no incident cases have been recorded in recent weeks, the event is probably now over, notwithstanding an incubation period that may extend to 70 days. It is evident that many mild cases of listeriosis occurred that were not diagnosed. The elderly, pregnant and immunosuppressed are most susceptible to listeriosis and developed symptoms requiring medical intervention.
At this time, the Jarratt plant remains indefinitely closed. The brand image of Boar’s Head and Old Country are profoundly degraded, and the sales volume of deli meats has fallen sharply since July.
Apart from the legal claims, the integrity of the Food Safety and Inspection Service and the Virginia Department of Agriculture inspectors responsible for overseeing the plant is in question by Congress. The consequences of the outbreak are expected to resonate throughout the processed meat industry through to 2025.
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Human Case of H5 Influenza in British Colombia, Canada
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Health authorities have confirmed that a teenager in critical condition is currently undergoing treatment at the BC Children’s Hospital following infection with an H5 strain of influenza. Epidemiologic investigations are in progress to determine the source of exposure. Contacts of the patient are undergoing examination but without reports of symptoms consistent with infection.
Dr. Bonnie Henry, Health Officer for British Columbia stated, “This is a rare event and while it is the first detected case of H5 in a person in Canada there have been a number of human cases in the U.S. and elsewhere.”
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Embryo Lethality Assay Developed for Enterococcus faecalis
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In research sponsored by the USPOULTRY Foundation, Dr. Donald Reynolds of the School of Veterinary Medicine and Biomedical Sciences, University of Nebraska developed an embryo lethality assay to distinguish between highly virulent and pathogenic strains of Enterococcus faecalis. Concurrently, his laboratory applied matrix assisted laser desorption/ionization mass spectrometry (MALDI-TOF MS) to distinguish among isolates.
Research was conducted on 52 isolates of E. faecalis obtained from broilers, laying hens, turkeys and game birds. The embryo lethality assay provided a semi-quantifiable index of pathogenicity. This is necessary since additional molecular assays on either high or low pathogenicity strains would indicate the exotoxins produced that are responsible for embryo mortality and specific pathology. The MALDI-TOF MS assays could distinguish between virulent and innocuous strains but lacked the ability to distinguish among strains of intermediate pathogenicity suggesting additional research to refine the technique.
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Retirement of the Director of the Virginia Egg Council
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Cecelia Glembocki, Director of the Virginia Egg Council, has retired after a distinguished career extending over four decades. She was responsible for developing a Lunch and Learn program for hospitals to promote egg dishes for patients. She served as a liaison between the egg industry and the White House facilitating sponsorship of the Easter Egg Roll now organized by the American Egg Board.
Cecelia will be succeeded by Kirby Moir, a registered dietitian with considerable experience in outreach and education. Mary Rapaport will continue as spokesperson for the Virginia egg industry and will work with extension agents and consumer organizations to promote eggs both in Virginia and the Delmarva region.
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USDA to Offer Sustainable Agricultural Research and Education Grants
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The USDA will offer $10,000 grants to educational institutions, trade associations and non-governmental organizations under the Sustainable Agricultural Research and Education program. Grants can be used to conduct training and networking projects for local and regional meat and poultry production systems that incorporate sustainable practices including pasture raised management. Recent grants have encouraged the production of small-flock poultry operations that are inherently less efficient and less sustainable than the conventional contract-integrator model using confined housing.
The SARE program is yet another example of using taxpayer funds in a futile attempt to create an alternative to the existing, functional and highly efficient commercial production of red meat and poultry. Since assuming office USDA Secretary Tom Vilsack and his appointees in the outgoing Administration have attempted to promote and support a non-sustainable and financially non-viable model based on small-scale production.
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Denver Ordinance 309 Rejected by Electorate
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In the November 5th election, Denver voters rejected Ordinance 309 by a 65 percent margin. Promoted by Pro-Animal Future, a welfare advocacy group, the ordinance would have forced closure of Superior Farms, the only remaining slaughter plant within the City of Denver. Adoption of the ballot initiative would have displaced 160 workers and required alternative processing facilities for up to 1,500 lambs each working day. Ordinance 309 was supported by various welfare and pro-vegan entities that collectively raised $300,000 to support the initiative.
After an initial failure to actively oppose 309, civic organizations and the meat industry organized an aggressive campaign with the formation of groups including “Hands Off My Hat Denver” and “Stop the Ban, Protect Jobs” and “Local Food, Strong Denver”. Contributors to the opposition campaign included the Meat Institute, the Colorado Livestock Association, the American Sheep Industry Association and a substantial amount from Superior Farms, an employee-owned enterprise.
Concurrently, voters also rejected Ordinance 308 that would have banned the processing and sale of animal fur within Denver.
The response by civic organizations, labor unions and the meat industry to proposed Ordinance 309 is significant since organizations opposing meat processing will attempt to introduce bans affecting slaughter plants in other jurisdictions. The response by voters demonstrates a disinclination to respond to pro-vegan and woke ballot initiatives.
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U.K. Confirms HPAI
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Veterinary authorities in England have identified a case of Highly Pathogenic Avian Influenza on a commercial farm (presumably free-range table egg production) attributed to H5N5 strain in the county of Yorkshire.
Appropriate quarantine with depopulation of the flock and zone surveillance was implemented.
This case was preceded by isolation of both H5N1 and H5N5 strains in migratory and free-living birds consistent with observations in Canada, the U.S. the E.U and in Asia.
The announcement of the outbreak was accompanied by recommendations to enhance biosecurity. It is evident that the free-range producers will have to confine flocks in high-risk areas. The U.K. Chief Veterinary Officer, Dr. Christine Middlemiss, issued the usual statement reassuring consumers that the infection is not transmissible to humans.
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Costco Reports on October 2024 Sales
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On November 5th Costco Wholesale Corporation (COST) reported sales for October 2024 covering the four weeks ending November 3rd. For the period, sales attained $20,030 million, up 7.2 percent from the value of $18,680 million during the corresponding month in 2023.
Same store sales (excluding fuel and foreign exchange) increased 5.8 percent for the U.S.; 8.7 percent for Canada and 8.4 percent for international warehouses. Overall, same-stores sales advanced by 6.5 percent and E-commerce was 19.3 percent higher.
Costco closed on November 6th after release of the data at $896.00 subsequently rising in the post-election surge to an open of $936.57 on November 12th. COST market capitalization was $413,330 million on November 12th and the share has traded over a 52-week range of $572.24 to $962.00 with a 50-day moving average of $894.30.
Costco Wholesale Corporation operates 892 warehouses with 615 in the U.S.; 108 in Canada; 40 in Mexico and the remainder in nine other nations.
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Moba Innovations at EuroTier
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Moba will demonstrate the EggInspector 40 and Vision Shell Inspector at the 2024 EuroTier Exhibition. These installations provide optimal quality control, balancing detection against false rejection. Moba will also demonstrate the Forta GT grading system with a high level of automation and quality control. This system is designed to reduce manual labor and incorporates software to maximize margins.
Moba currently serves 7,000 customers in 111 nations. The company operates five production centers and 13 sales offices. Of the 850 company employees, 125 are involved in research and development contributing to continuous improvement and adoption of technology that contributes to efficiency and productivity.
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Sonoma County Rejects Ban on CAFOs
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Measure J was soundly defeated by a margin of 85 to 15 percent. If adopted it would have effectively eliminated commercial-scale poultry and livestock production in the heavily rural county. The Sonoma County Economic Development Board estimated that 11 CAFOs and 49 medium-sized facilities would have been affected, creating unemployment and reducing the availability of both poultry and red meat and limiting revenue for the county.
The result of the ballot on Measure J should deter organizations pursuing vegan and extremist environmental agendas to refrain from attempts at disrupting livestock agriculture conducted in accordance with state and federal recommendations.
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Commentary
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