Editorial

 

GMO Labeling Bill Rejected by Senate

Apr 22, 2016

    

The Biotechnology Labeling Solutions Act (S.2609) which passed out of Committee last week failed to attain 60 votes in the Senate to avoid cloture.  Sen. Jeff Merkley (D-OR) who previously offered an alternative Bill requiring a national standard for labeling stated “All consumers want is for us to be honest with them about ingredients.”

A last minute amendment to the Bill which would have allowed food manufacturers to post website information on GM status or to print telephone contact numbers on packages for consumers to obtain information was regarded as too complicated and was rejected.

  

In a Hearst posting, a spokesperson for Food Policy Action noted “I am hopeful that the Senate will now work to create a bipartisan, mandatory on-pack GMO labeling bill that does not demonize science and gives consumers the information they demand.”

There is considerable dispute as to the cost of mandatory labeling. Studies sponsored by industry groups suggest upwards of $1,000 per family per year but considerably lower values have been advanced by the proponents of GM labeling.  Either way, mandatory federal GM labeling would be extensive since with the exception of certified organic products, virtually all foods containing U.S.-grown corn or soybeans or their derivatives would fall under a labeling mandate.  What must be avoided is a patchwork of conflicting requirements imposed by individual states and in some cases local jurisdictions. Some companies anticipating a legislative impasse have announced their intention of voluntarily labeling their products containing GM ingredients.

Sometime ago EGG-CITE made the radical suggestion that all foods other than certified organic should be labeled “May Contain Products of GM Origin” similar to the disclaimer on foods relating to nuts and other allergens.  If all but certified organic products were so labeled, the average consumer would continue purchasing their brands and the “purists” could select organic and pay accordingly.

The move to labeling GM products is less about “the right to know” than it is to oppose GM technology. The concern over GM products is spurious as there is no demonstrable difference in nutrient quality or any deleterious result from consumption of foods incorporating GM ingredients. The campaign against GM labeling is attributed to false and deceptive publicity generated by associations and individuals who benefit financially and emotionally from opposing GM technology. Agitating and lobbying against GM may be satisfying for those with full stomachs and purses in the U.S. and the EU but by withholding the benefits of improved yields they are contributing to starvation, poverty and blindness in developing nations.

   

Egg Industry News

 

Status of 2016 Corn and Soybean Crops

Apr 27, 2016

    

The USDA Crop Progress Report for Monday April 25th indicated a continued favorable trend in planting in 18 states, expressed in the percentages in the table below:-

                                                                     WEEK ENDING
Crop                               April 17th                   April 24th                    5-Year Average

Corn planted                      30                                13                                    16
Corn emerged                    -                                    5                                      4
Soybeans planted               -                                     3                                     2

  

The prospects for corn and soybean germination and early growth depend on adequate soil moisture. USDA reported data for 48 contiguous states which does not differ materially from 2015, as shown in the table below:-

 

                          Moisture Classification (%) for Week Ending April 24th.  

                V. Short                     Short                     Adequate                  Surplus
Topsoil       4                              13                             70                             13
Subsoil       3                              14                             73                             10

   
 

 McDonald’s Corporation Reports on Q1 of FY 2016

Apr 27, 2016

    

In a press release dated April 22nd McDonald’s Corporation (MCD) announced results for the 1st Quarter of Fiscal 2016 ending March 31st 2016.

The release marked the 51st year since the IPO of MCD. The Company exceeded estimates of $5.8B revenue and EPS of $1.16.

   
   
 

CME Prices

Apr 27, 2016

    

At the close of trading on April 22nd CME quotations for corn, soybeans and soybean meal with values for April 16th in parentheses were:-

COMMODITY
Corn (cents per bushel)                          May   371.2   (377.2)            July  374.6     (380.6)
Soybeans (cents per bushel)                 May    984.0  (954.0)           July   993.6    (963.0)
Soybean meal ($ per ton)                       May    310.8  (295.4)           July   313.1    (298.3) 

  

 Note:

  • 30 cent per bushel (3 percent) increase in July soybeans.
  • $15/ton (5 percent) increase in July soybean meal.

For each 10 cent per bushel change in corn :-

  • The cost of egg production would change by 0.45 cent per dozen
  • The cost of broiler production would change by 0.25 cent per pound live weight

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

  • The cost of egg production would change by 0.40 cent per dozen
  • The cost of broiler production would change by 0.25 cent per pound live weight

See posting on the April USDA-WASDE Report for an update on quantities and prices of commodities

   
 

Vegan Egg Substitute from Sioux Natural

Apr 27, 2016

    

Nutritional Outlook on April 21st reported on a plant-based substitute for eggs in baking applications. 

The product is prepared from soy flour and soy protein isolate and rice and can be incorporated into cookies and breads. 

The president of Sioux Natural, Paula Persinger noted “gluten-free Veggan® is a natural choice for people wishing to avoid animal products, allergens and GMOs.

The product indicates the ease of replacing eggs in some baked items but not in confectionary where the functional properties of eggs contribute to quality. Veggan® from Sioux Natural will compete with Hampton Creek products which are also based on plant proteins.

   
   
 

Challenge to Massachusetts Petition 15-11

Apr 27, 2016

    

Massachusetts voters may not have to decide on proposed ballot initiative Petition 15-11 which closely follows California Proposition #2, enacted in 2008. 

The petition is opposed by an advocacy group representing households receiving Supplemental Nutrition Assistance (SNAP) formerly termed “Food Stamps”.

  

At issue is the inevitable increase in the price of eggs, pork and other products derived from livestock.  The increase in the cost of eggs in California following the 2012 introduction of Proposition #2 promoted by the HSUS is now referred to as the “Pacelle Tax “ The aftermath of the California situation which deprived consumers of choice is advanced as a reason to reject the petition.

A legal complaint recently filed maintains that the petition violates Article 48 of the Massachusetts Constitution which requires that petitions deal with only one subject answerable as a simple affirmative or negative.  If ruled unconstitutional the initiative will not appear on the November 2016 ballot.

   
 

H-E-B Will Convert to Cage-Free Eggs

Apr 27, 2016

    

H-E-B is following the national trend by announcing conversion to cage-free sourcing of eggs with a target date of 2025.  In a statement issued by the company it is evident that H-E-B will work closely with suppliers to ensure safety and welfare but at the same time stock eggs which are affordable for Texas families many of whom receive SNAP benefits .  The company recognizes the cost involved in transition to cage-free systems. H-E-B places emphasis on an adequate supply, sufficient consumer demand and realistic pricing as important considerations in the transition. 

  

It is noted that Cal-Maine Foods with extensive installations in Texas recorded 9.5 percent of sales value to H-E-B in 2015 amounting to $158 million.  Assuming a relatively high average value of $1.90 per dozen which pertained in 2015 due to outbreaks of HPAI in the Midwest, it can be calculated that H-E-B purchased 83 million dozen from Cal-Maine Foods, their principal supplier.

   
 

Derreck Nassar Joins Eastern Quality Foods

Apr 27, 2016

    

In an April 21st press release Eastern Quality Foods of Ponte Vedra Beach, FL announced that Derreck Nassar previously with United Egg Producers will be joining their company.  In his new role he will focus on egg trading and sourcing for the existing international egg business of Eastern Quality Foods.

The company specializes in wholesale distribution of meat, seafood, eggs and other perishables to a client base comprising manufacturers, food service, retailers and institutions.  Founded in 1954, Eastern Quality Foods generates revenue in excess of $300 million annually.

  

In commenting on the appointment, Ted Rueger, President of Eastern Quality Foods noted “Derreck’s industry experience and relationships will be a true asset to our customers and complement our dynamic sales team.”  Nassar earned a BS in Agribusiness from the University of Georgia and a Masters of Business administration from the University of West Georgia.  He will continue to reside in Alpharetta, GA.

   
 

TWINPACK PROMOTES EGGYPLAY® PLASTIC EGG PACKS

Apr 27, 2016

    

TwinPack Special Products B.V. has introduced Eggyplay® egg cartons which double as a children’s building toy.  Constructed of durable polypropylene, the boxes can be washed and recycled as interlocking toy blocks which have gained a positive consumer response in Western Europe. 

Information and a promotional video can be accessed on the dedicated TWINPack site www.eggyplay.com.

  

   
 

Market Force Survey Ranks Top Grocery Stores

Apr 22, 2016

    

The most recent Market Force survey ranks Wegmans as the “most favorite” grocery store with a 76 percent loyalty rating followed by Publix at 75 percent and Trader Joe’s at 73 percent.  The fourth-ranked store was Hy-Vee Foods with a loyalty score of 68 percent.

The survey involving the responses of 10,000 shoppers effectively ranked the three top stores as a tie given the spread between their individual rating and the distance to the fourth-ranked grocery chain.

   
   
 

Herbruck’s Responds to Proposed Changes to Organic Housing of Flocks

Apr 22, 2016

    

In responding to publication of the proposed USDA Certified Organic Rule for poultry, Greg Herbruck Vice President of Herbruck’s Poultry Ranch, a third-generation family-owned enterprise in Saranac, MI noted that “The proposed Rule will drastically reduce our flock capacities and basically render our tens of millions of dollars of investment obsolete.” 

  

Herbruck’s which operates a large in-line organic egg production complex in addition to industry-leader, Cal-Maine Foods operating complexes with a similar configuration were essentially the target of the proposed mandate requiring approximately 1.8 square foot per hen of outside access, depending on body weight.

Greg Herbruck commented on risks associated with outside access including predator loss and possible egg-borne Salmonella infection. In addition to their large in-line complex, Herbruck’s also contracts with independent farmers in Michigan and Indiana to produce organic eggs using slatted-floor housing with available space for outside access.

 (For further details on the NOP proposal, see the editorial in EGG-CITE on Friday April 15th and access previous commentaries and news items by activating the SEARCH feature entering “organic”.)

   
 

Mexico to Rescind HPAI Import Ban

Apr 22, 2016

    

USAPEEC has announced that SENASICA, the Agency responsible for food safety and animal health in Mexico is in the process of rescinding the ban placed on 14 states impacted by the spring 2015 outbreak of H5N2 HPAI.  Negotiations continue between SENASICA and their U.S. counterpart, the USDA-APHIS on the specific date, authority and certification process.  Clarifying all outstanding issues is an important consideration since the U.S. wishes to avoid border delays which can affect shipments.

  

Jim Sumner and his colleagues at the USAPEEC are to be commended on their efforts to liaise among government agencies in both Mexico and the U.S. to resolve outstanding issues.  The respect of USAPEEC veterinary advisors including Dr. Guillermo Zavala, among administrators in Mexico is a reality contributing to mutual understanding.

   
 

China Embarrassed By Vaccine Scandal

Apr 22, 2016

    

Both EGG-CITE and CHICK-CITE have commented over the past three years on deficiencies in China relating to regulation of human food and pharmaceutical production. China also has a profound problem of institutional and commercial corruption associated with ingredients, misuse of antibiotics and unacceptable practices both in the livestock and food industries.

  

Following revelations concerning black market distribution of vaccines, improper storage and deceptive labeling, over 200  people have been detained in relation to marketing irregularities.  In addition 357 health and regulatory officials have received administrative punishments.  The State Council of China, corresponding to the U.S. Cabinet noted “vaccine quality and safety are to do with people’s lives and health especially children and is a line that cannot be crossed.”  Vaccines implicated in the scandal included products to protect against meningitis and rabies, with irregularities dating back to 2011.

Recent disclosures concerning production of pharmaceuticals in India and a long history of unacceptable practices in China place in question the desirability of sourcing products from these nations unless plants are owned, operated and supervised by multinational companies.  The U.S. should avoid becoming too dependent on supplies of food products and pharmaceuticals from countries with a history of deficient supervision by regulatory authorities and industries operating according to a culture of profit.

   
 

EMBRYONIC GENDER DETERMINATION IN GERMANY

Apr 22, 2016

    

EGG-CITE is indebted to Dr. Franz Sommer of Austria, an affiliate of Cutler Associates International who provided additional information on the gender determination project for embryos under development by scientists at the University of Leipzig. 

It is understood that the research is at a preliminary stage and involves extremely sophisticated technology.  A large hole is made in the shell of a 3-day old embryonated egg and by applying infrared-raman-spectroscopy it is possible to differentiate male from female embryos on the basis of the sex-determining chromosomes. 

The continuing research will require considerable expenditure of time and funds followed by evaluation under practical conditions.  Extending the work conducted in the U.S. during the early 1990’s, scientists in Germany were able to differentiate male from female embryos in ovo by extracting and assaying for sex hormones in allantoic fluid.  Because this procedure was performed on the ninth day of incubation, extremist groups opposed to destruction of cockerels were disinclined to accept this alternative to post-hatch disposal.

   
   
 

GOVERNMENT OF ISRAEL BACKTRACKS ON EGG PRODUCTION QUOTAS

Apr 22, 2016

    

According to an April 17th article by Ilanit Hayut in Globes Publication, Itonut, the Government of Israel has retracted their decision to eliminate price support for eggs.  This topic was reviewed in a posting on EGG-CITE on March 16th 2016.  The far-reaching proposal supported by the Ministries of Finance and Agriculture generated considerable opposition and protest among the current producers of eggs located in the Galilee who are organized into Moshavim  (cooperatives). 

  

As a compromise, the Government has agreed to retain a controlled marketing system for a period yet to be determined but possibly in the region of 15 years,  In return farmers will accept a 20 percent reduction in the ex-farm price although they are requesting a less severe reduction to be phased in over eight years.

Retailers will be expected to lower prices to consumers to a level of about 14 percent below current prices.

The concentration of egg production units in the Galilee was originally intended to strengthen security by locating settlers from Eastern Europe along the border with Lebanon. Over the past 30 years, the policy decision has proven to be moderately successful but has been indirectly supported at great expense by consumers.  There is no valid alternative to a free-market for agricultural products and any intervention by a governmental agency creates distortions which in this case benefits producers at the expense of consumers and taxpayers.

   
 

Southeastern Grocers Commit to Cage-Free

Apr 22, 2016

    

In an announcement on April 15th, Southeastern Grocers which operates Winn-Dixie and BI-LO  supermarkets will convert to sourcing cage-free eggs.  Private label eggs will be entirely cage-free within a two-year time frame which presumes that the company has arranged with suppliers for the necessary quantity required. 

  

Michael Bove, Group Vice President for Fresh at Southeastern Grocers stated “In the past two years alone, we’ve seen an average increase of nearly 30 percent in the sales of our cage-free eggs. It’s clear this is both a product and cause that is important to our customers.”  He added “we are totally committed to working closer with our vendor partners to achieve our 2025 target and to balance our goals of providing customers with quality products at affordable prices and ensuring that we are responsible in our approach to animals and the conditions under which  they live”.

It is noted that Southeastern Grocers has previously cooperated with advocacy groups including the Humane League and the “Humane Society” (reports do not state whether Certified American Humane or the Humane Society of the United States).

   
 

Charles City, IA Hen Plant to Reopen

Apr 22, 2016

    

Simply Essentials a company based in Kansas plans to reopen the hen plant in Charles City, IA following funding from the Iowa Economic Development Authority. 

The plant previously operated as Cedar River Poultry but filed for bankruptcy in 2011.

   
   
 

Deceptive “Free-Range” Claim in Australia Results in Fine

Apr 22, 2016

    

The Australian Competition and Consumer Commission (ACCC) obtained a legal settlement from two companies which mislabeled eggs as free-range at variance with actual management systems used.  Free-Range Egg Farms (Pty) Ltd. and  Derodi and Hollands (Pty) Ltd. were fined $300,000 and were obliged to modify labels and conform to industry standards for free-range which requires access to pasture. 

  

The Chairman of the Australian Competition and Consumer Commission noted that this was a wake-up call for the industry stating “When you advertise birds as free-range or charge double for what you would charge for barn-laid eggs there are serious consequences for consumers and also you are gaining an advantage over your competitors.”  This was the third court verdict in favor of the ACCC relating to false label claims for free-range management of flocks.

   
 

Ratification of the TPP in Question

Apr 22, 2016

    

Given the highly charged political atmosphere preceding the November 2016 election, and opposition to trade pacts expressed by some candidates, associations representing U.S. agriculture and food producers are urging support of the Trans-Pacific Partnership.

The National Chicken Council joined with 225 other organizations including the American Farm Bureau Federation to urge Congressionalvotes in favor of the TPP to “help level the playing field for U.S. exports and create new opportunities in the highly competitive Asia- Pacific region.”  The letter addressed to leaders of the House and Senate noted “the TPP is critical to the livelihood of the U.S. food and agriculture sector because it will create conditions to encourage economic growth and increased employment in rural areas and throughout the supply chain.”

  

The Friday 15th April edition of Washington Report the newsletter of the National Chicken Council quoted the Peterson Institute for International Economic as stating “delaying the launch of TPP by even a year would represent a $94 billion permanent loss or opportunity cost the U.S. economy.”

On the other side of the Pacific, ratification of the TPP by Japan is in question.  Unless the Diet (equivalent to the U.S. House of Representatives) approves the agreement by the end of April, Prime Minister Shinzo Abe will defer ratification until the next session.  There is considerable opposition to the TPP in Japan and the Government has only recently released previously confidential components of the Agreement.  The Government faces voter opposition in the oncoming elections for the Upper House which will take place during the summer.

   

Shane Commentary

 

UEP Issues Statement on Undercover Intrusion Videos

Apr 22, 2016

    

According to a press release from the United Egg Producers on April 13th, Chad Gregory, president and CEO noted “For America’s egg farmers, egg safety and hen care are the utmost importance at all times.  Egg farmers across the U.S. recognize and embrace the responsibility to produce safe, high-quality eggs while providing proper care for their flocks and ensuring hen health and well-being.”  He added “We are aware that the activists group Mercy for Animals has released an undercover video that they claim was taken at an egg farm in Pennsylvania.  While images in the video are troubling they do not reflect standard practices on U.S. egg farms.”

  

Gregory reiterated previous UEP statements that the organization which represents over 95 percent of shell egg producers supports all methods of hen housing for egg production which assure proper hen well-being and meets or exceeds food safety requirements.  The UEP Certified Program with standards for both conventional and cage-free housing in place for more than a decade provides comprehensive, science-based hen welfare guidelines developed by an independent Scientific Advisory Committee.

Your commentator regularly visits egg production units in about 30 states in the U.S. and the practices and images depicted in the Mercy for Animals video absolutely do not represent current practices in the industry.  Previously, independent veterinarians and scientists with experience in welfare have reviewed videos purporting to show unacceptable production practices. They have consistently determined that clandestine videos involved editing and an undue concentration on specific hens with abnormalities selected from among very large flocks. In some cases depictions may contain simulated footage intended to create deception in the interest of raising funds.

   
 

IMPACT OF DISPLACING GMO CROPS

Apr 22, 2016

    

Environmental activists and those opposed to intensive livestock production are also congenitally resistant to any form of genetic modification.  There is no justification for their position since two decades of consuming GMO corn and soybeans has failed to show any deleterious effect on livestock or human health. It is ironic that the most vociferous antagonists of GM technology have no objection to using GM-derived insulin!

  

Purdue University recently published a study in AgBio Forum quantifying the effect of a reversion to non-GM cultivars.  Corn yield would decline by 11 percent and soybeans by 5 percent.  In addition there would be a 19 percent reduction in cotton production from the acreage currently planted to this crop. Collectively, the deficit would require planting an additional 255 thousand acres of land in the U.S. and approximately ten times this area on a global basis.

In the U.S. the price of corn would rise by 17 to 30 percent and soybeans by 11 to 23 percent.  Purdue economists predicted a 1 percent increase in annual food costs with an amount ranging between $7 to $14 billion per year or on average $45 per capita

Environmentalists opposed to GM might contemplate the fact that conventional cultivars are less “sustainable” then their GM counterparts.  Reversion to conventional crops would produce between 500 and 800 million tons of carbon dioxide annually.

The Purdue University study did not take into account the lower application of insecticides and herbicides following the introduction of GMO cultivars.  The fact that U.S. farmers have opted for GM for over 94 percent of corn and soybeans produced confirms the technical and economic benefits.  The grain storage and distribution infrastructure is now dedicated to GM products.  The small quantity of non-GM and specifically, organic corn and soybeans require segregation and specific handling with full traceability.  This adds materially to the costs of these ingredients which are approximately double the price of GM counterparts, without offering any tangible advantage.

   

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Dr. Simon M. Shane
Simon M. Shane
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Industry Prices: Thu Apr 28
 Corn3.95 $/bu
 Soybeans10.09 $/bu
 Soybean Meal329.60 $/ton
 Eggs, Producer49  ¢/doz
 Eggs, Warehouse 59-62  ¢/doz