Editorial


The Employment Enigma

09/03/2018

As Congress faces reconciliation of the 2018 Farm Bill, it is appropriate to consider the problem of acquiring and retaining labor on U.S. farms. To be frank, we are reliant on workers from nations south of our border to work in produce fields, dairies, poultry farms and processing plants. The House version of the Farm Bill incorporates a mandatory work requirement for recipients of SNAP benefits, the Senate is opposed to this requirement although it is hoped that a compromise will be reached to enable passage of the bill. It is now obvious that an extension will be required, since existing legislation will expire in September.

In 1996, the Welfare Update mandated 80 hours of work or training for able-bodied adults 18-50. Non-compliant recipients were limited to three months of benefits. This provision was honored more in the breach than reality since states were allowed to exercise waivers.

The inner city areas have disproportionate unemployment rates and are heavily dependent on federal handouts. If those dependent on government programs to survive were to move to areas where there is a demand for labor, there would be a marked reduction in expenditure for SNAP and similar support programs.

Traditionally workers have moved to areas of opportunity. During the Great Depression, dispossessed farmers from the Dust Bowl relocated to California. More recently oil field workers displaced form the Gulf obtained work in new fields in North Dakota.

Congress has been slow to act on enabling legislation to provide H-    visa for foreign workers, especially those with both training and a desire to contribute to agricultural productivity.

In my work involving egg-production complexes, there is a dearth of available workers. Producers converting from conventional cages to aviaries recognize the need for additional labor, possibly in the region of two to three times that required for a flock of 150,000 to 250,000 caged hens. Standards for employment are steadily declining. Older workers with a strong work ethic are becoming more scarce. Substance abuse is a more important factor responsible for unreliability, carelessness and accidents.

Even if government policy allows more extensive use of foreign labor, it will be necessary to house immigrants. By the same token, acceptable housing will be required for labor moving from inner cities to rural areas. In addition to housing, it will be necessary to provide schooling and other services, altering the character of small towns which in any event are losing their traditional populations.

 

There are limits to mechanization and labor will always be required to produce food. The alternative to a rational immigration policy and encouraging relocation of U.S. citizens dependent on government support is self-evident. Agriculture is the nexus where immigration policy and welfare converge. Let us hope our legislators put aside ideology and address a growing problem which will restrict our ability to produce food.

It is evident that changes will be required in attitudes towards permanence of residency, acceptance of  “different” socio-economic groups and a redistribution of our population to address the need for agricultural labor.


 

Egg Industry News


Status of 2018 Corn and Soybean Crops

09/17/2018

The USDA Crop Progress Report released on September 17 th updated the status and condition of 2018 corn and soybeans. Corn is denting at 93 percent of the crop, 7 percent over the 5-year average. Half the crop is mature and nine percent has been harvested.

Soybeans have completed blooming and setting pods consistent with good soil moisture and climate conditions. Approximately half of the crop has started dropping leaves, 17 percent ahead of the 5-year average. Six percent of the crop has been harvested

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

WEEK ENDING

Crop Parameter (%)

September 9th

September 16th

5-Year Average

Corn Emerged

Corn Silking

Corn Dough

Corn Dent

Corn Mature

Corn Harvested

100

100

86

35

5

100

100

93

54

9

100

100

86

36

6

       

Soybeans Emerged

Soybeans Blooming

Soybeans Setting Pods

Soybeans Dropping Leaves

Soybeans Harvested

100

100

100

31

-

100

100

100

53

6

100

100

100

36

3

       

 

Crop Condition

V. Poor

Poor

Fair

Good

Excellent

Corn 2018

Corn 2017

4

4

8

9

20

26

47

48

21

13

Soybeans 2018

Soybeans 2017

3

3

7

9

23

29

49

48

18

11

 

Soil Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture: Past Week

9

19

63

9

Past Year

14

31

52

3

Subsoil moisture: Past Week

11

20

61

8

Past Year

14

31

52

3


 

USDA-WASDE FORECAST #581 September 13th 2018

09/13/2018

OVERVIEW

The September 13th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on actual planting data, crop progress with monitoring by "scouts", long-range weather forecasts and historical records. Harvest areas for corn and soybeans were retained from the July-August projections at 81.8 million acres (83.1 million in 2017) and 88.9 million acres, (89.5 million acres in 2017) respectively.

The USDA raised corn yield by 1.6 percent to 181.3 bushels per acre (175.4 bushels in 2017). Soybean yield was raised 2.3 percent to 52.8 bushels per acre (49.5 bushels in 2017).


 

Export of Shell Eggs and Products January-July 2018.

09/13/2018

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

PRODUCT

Jan.-July 2017

Jan.-July 2018

Difference

Shell Eggs

     

Volume (m. dozen)

66.3

63.3

-3.0 (-4.5%)

Value ($ million)

63.3

75.2

+11.9 (+15.8%)

Unit Value ($/dozen)

0.96

1.19

+0.23 (+24.0%)

Egg Products

 

 

 

Volume (metric tons)

24,921

19,120

-5,801 (-23.3%)

Value ($ million)

64.3

69.0

+4.7 (+7.3%)

Unit Value ($/metric ton)

2,580

3,609

+1,029 (+39.9%)

U.S. SHELL EGG AND EGG PRODUCT EXPORTS IN JANUARY-

JULY 2018 COMPARED WITH JANUARY-JULY 2017

Source USDA-FAS/USAPEEC


 

WEEKLY COMMODITY REPORT

09/08/2018

According to the August 10th 2018 WASDE Report #580, 81.8 million acres of corn will be harvested in 2018 to yield 14.23 Billion bushels. The soybean crop is projected to attain 4.31 Billion bushels from 88.9 million acres harvested.

Quarterly corn and soybean stocks were estimated by USDA in a release on June 29th to total 5.3 Billion bushels (36.2 percent of 2017 harvest) and 1.2 Billion bushels (27.3 percent of 2017 harvest) respectively.

The following quotations for the months as indicated were posted by the CME at close of trading on September 7th together with values for the corresponding week in parentheses.

COMMODITY

 

Corn (cents per bushel)

Sept.'18 354 (352)*

Dec. '18 367 (366)

Soybeans (cents per bushel)

Sept. '18 831 (833)*

Nov. '18 845 (832)

Soybean meal ($ per ton)

Sept. '18 314 (316)*

Dec. '18 317 (316)

*2018 crop


 

REVIEW OF AUGUST PRODUCTION STATISTICS AND COSTS.

09/11/2018
  • August 2018 USDA Ex-Farm Benchmark Price down 10.2 Percent from July Consistent with Seasonal Trends.

  • Production Cost Down 0.1 Percent (61.4 Cents per dozen, August) with Feed Cost Lower by 0.2 Percent.

  • Positive Nest-run Margin Decreased 26.7 percent from July to 23.6 Cents per Dozen

     

    INTRODUCTION.

    Summary tables for the latest USDA August 2018 statistics and prices made available by the EIC on September 11th are arranged, summarized, tabulated and discussed in comparison with values from the previous August 11th 2018 posting reflecting July 2018 data.


 

USDA Weekly Egg Price and Inventory Report, September 13th 2018.

09/13/2018
  • Hen Numbers in Production Increased 0.8 million to 319.2 million Continuing an Upward Trend
  • Shell Inventory up by 1.5 Percent From Previous Week
  • Generic Prices for Extra Large and Large Were Down 8.0 Percent on Average Compared to Previous Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on September 10th the Midwest wholesale prices for Extra Large and Large sizes were respectively lower by 8.0 percent and 8.1 percent. Mediums were lower by 15.0 percent compared to the past week. The progression of prices during 2018 is depicted in the USDA chart reflecting three years of data, updated weekly.

The September 10th USDA Egg Market News Report (Vol. 65: No. 37) documented a USDA Combined Region value rounded to the nearest cent, of $1.08 per dozen delivered to warehouses effective September 8th This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $0.99 per dozen. At the high end of the range, price in the South Central Region attained $1.14 per dozen. The USDA Combined Price last week was 40 cents per dozen below the three-year average and 5 cents per dozen above the corresponding week in 2017.


 

Kroger Reports on Q2 of FY 2018

09/13/2018

In a press release dated September 13th The Kroger Company (KR) announced results for the 2nd Quarter of Fiscal 2018 ending August 18th 2018.

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

Quarter Ending.

Aug. 18th 2018

Aug. 12th 2017

Difference (%)

Sales:

$27,869,000

$27,597,000

+1.0

Gross profit:

$5,939,000

$5,988,000

-0.8

Operating income:

$549,000

$684,000

-19.7

Pre-tax Income*

After-tax Income

$628,000

$508,000

$540,000

$351,000

+16.3

+44.7

Diluted earnings per share:

$0.62

$0.39

+59.0

Gross Margin (%)

21.3

21.6

-1.4

Operating Margin (%)

2.0

2.5

-20.0

Profit Margin (%)

1.8

0.9

+100.0

Long-term Debt:

$12,121,000

$13,100,000

-7.4

12 Months Trailing:

     

Return on Assets (%)

4.9

   

Return on Equity (%)

55.2

   

Operating Margin (%)

2.3

   

Profit Margin (%)

2.9

   

Total Assets

$36,957,000

$36,600,000

+1.0

Market Capitalization

$22,750,000

   

*includes the proceeds from the sale of Ocado valued at $216 million.

52-Week Range in Share Price: $19.69 to $32.70

Market post-release, noon September 13th $28.53

Forward P/E: 12.6. Beta: 0.83

Same-store sales excluding fuel were 1.6 percent higher for Q2 2018 compared to Q2 2017. Digital sales increased 50 percent over a presumably small base.

Chairman and CEO Rodney McMullen commented "We are only two quarters into our three year Restock Kroger plan, and we are making solid progress. Kroger customers have more ways than ever to engage with us seamlessly through our recently-launched Kroger Ship, expanded availability of Instacart, successful ClickList offering, and selling Simple Truth in China through Alibaba's Tmall. He added "we feel good about our net earnings per diluted share and ID sales results in the second quarter. We expect our investments in space optimization during the first half of 2018 to become a tailwind late in the third quarter".

He concluded "we are on track to generate the free cash flow and incremental FIFO operating profit that we committed to in Restock Kroger for 2018-2020, and to deliver on our long-term vision to serve America through food inspiration and uplift."


 

July Eggs-Broken Report

09/07/2018

The USDA Egg Products Report documents a six percent increase in eggs broken during July 2018 at 203.6 million dozen compared to July 2017 at 191.3 million dozen. The corresponding production of edible products amounted to 261.4 million pounds, six percent above the 246.5 million pounds produced in July 2017.

The cumulative seven-month production of edible product amounted to 1,769 million pounds, one percent higher than for the first seven months of 2017 at 1,751 million pounds.


 

Publix to Establish NC Distribution Center

09/07/2018

Publix Supermarkets will construct a distribution center in Greensboro, NC during 2020. The proposed facility will create up to 1,000 new jobs according to NC Governor Roy Cooper.

 

The 1.8 million square foot DC will service Publix stores in North Carolina and Virginia where there are 38 and 10 locations respectively.


 

Alltech Ideas Conference, 2019

09/07/2018

Alltech has announced that the annual Ideas Conference for 2019 will take place in Lexington, KY from May 19th through 21st.

Information on registration is available at one.Alltech.com.


 

World Egg Day

09/07/2018

The International Egg Commission has announced that Friday, 12th October 2018 has been designated World Egg Day. The Organization has arranged for promotional activities including publicizing the health benefits of eggs for longevity and child development.

Julian Madeley, CEO of the World Egg Organization stated “On World Egg Day, we want to generate targeted messages highlighting specific  benefits for key consumer groups.” Madeley confirmed that eggs have the potential to impact health by providing essential protein and other nutrients.

World Egg Day will be marked by dedicated events and publicity in social media and conventional channels.


 

Alltech Ideas Conference Goes Global

09/07/2018

Selected presentations from the One Ideas Forum presented in 2018 will be available to audiences in 13 countries in 15 locations.

According to a September 4th press release, attendees will learn from industry experts on trending topics and advances in digital technologies.

Dr. Mark Lyons, President and CEO of Alltech stated “The Alltech One Ideas Forum global event program will be a reflection of One: The Alltech Ideas conference.” He added “It will be customized to local audiences while bringing big ideas to the forefront.” The Alltech Ideas Forum will take place in Europe, the Middle East, Asia and North America.

For additional information, access go.alltech.com/one-ideas-forum


 

Rare Salmonella Identified in Western Europe

09/08/2018

Five E.U. nations have reported a combined total of 50 cases of Salmonella Mikawasima.  Cases have been identified in Germany, Sweden, Denmark, Austria and Czech Republic.  Apparently isolates are homogenous applying whole genome sequencing.  Previously outbreaks have occurred in Norway (2012), and the U.K. (1992).  According to Food Safety News 22 cases were reported between 2006 and 2016.

 

It is presumed that the infection is associated with contaminated food with the vehicle yet to be identified.


 

Cost of Foodborne Outbreak

09/11/2018

In recent study economists at Johns Hopkins University determined that the cost of a single foodborne illness outbreak at a restaurant could range between $4,000 and $2.5 million.  The magnitude of loss is a function of the extent of infection, the pathogen involved, the vehicle of infection, the value of the brand and whether the chain concerned is publically quoted.

 

In addition to compensation, losses accrue from decontamination, disruption of the supply chain, interruption of business, loss of goodwill, the need to retrain employees, compensation to patients and legal fees.

 

It is obvious that the Johns Hopkins calculation does not take into account the effect of multiple foodborne outbreaks such as experienced by Chipotle Mexican Grill which loss approximately 50 percent of equity in over a year following salmonellosis, E. coli and norovirus infections.

 

The magnitude of losses is also a function of the response of a company to an outbreak including crisis control, and the use of social media.

 


 

USPOULTRY Updates I-9 Training Program

09/11/2018

In response to changes in Federal requirements, USPOULTRY has updated the training program for employment eligibility and completion of the I-9 form.

 

According to a September press release, the program comprises a narrated slide video and a PDF.

 

The program is available free of charge to USPOULTRY members.  Non-members may order the program for $200 www.uspoultry.org/training


 

China Reluctant to Provide Samples of H7N9 Avian Influenza

09/11/2018

U.K. Media report that China has refused to supply samples of H7N9 avian influenza, responsible for mortality among the human population in that country.  Apparently a sample was provided in 2016 but since that time the virus has obviously undergone mutation.

 

The Director of the Worldwide Influenza Center located in London stated that vaccines could be created using available gene sequencing but the effectiveness of a vaccine would be enhanced if scientists had access to the current strain of the virus.

 

Scientists including Dr. Ian Jones of the University of Reading expressed the opinion that it would be preferable to have samples of the virus available to prepare an inactivated vaccine in anticipation of a pandemic.

 

An infectious disease specialist at Harvard Medical School, Dr. Michael Callahan was quoted in the New York Times as stating, “Jeopardizing U.S. access to foreign pathogens and therapies to combat them undermines our nation's ability to protect against infections which can spread globally within days.”

 

Avian influenza strain H7N9 emerging in 2013 and has resulted in 1,600 diagnosed cases with 600 fatalities, attesting to the virulence of the virus in susceptible humans.


 

Whole Foods Workers Investigating Unionization

09/12/2018

Workers at 490 stores under the Whole Foods Market banner have been urged to participate in a drive for union affiliation. The group noted the desire to “collectively voice our concerns to Whole Foods Market and Amazon leadership.”

The movement follows protests and strikes in Germany, Spain and Poland in late July demanding that Amazon provide health benefits, job safety and improved pay and working conditions.

The move towards unionization in Whole Foods Market is supported by the Retail, Wholesale and Department Store Union and efforts have been intensified since acquisition by Amazon.

A point of contention is that workers are no longer eligible to receive stock options although it is alleged that store manager are still participating in a program established in 1992. Workers regard this potentially discriminatory policy as “insulting and unethical”.


 

CTB Inc. Appoints Chief Marketing Officer

09/12/2018

In a September release, CTB Inc. announced that Jack Stanbaugh has been named Chief Marketing Officer for the Company. He will be responsible for all marketing-related activities and collaboration with the CTB business units on strategy.

Previously, Stanbaugh served as VP and GM of a composites business serving the RV industry.

He holds degrees in business administration from a Geneva College, PA. and a Master of  Business Administration from the Kellogg Graduate School of Management, University of Chicago.


 

Commentary


Australian Egg Producers Enduring Skyrocketing Feed Cost

09/07/2018

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

 

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

 

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

 

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

 


 

Sponsored Announcements


BV Science

08/30/2018

BV Science, Inc. is a new US corporation formed in 2017. Formed by the collaboration of South American Vetanco S.A. and European Dr Bata Limited, BV Science, Inc. represents their combined science, technology and products in North America. In their 30 year history, they’ve developed a line of natural products that serve as natural solutions to producing animal protein without antibiotics. For more information, look at our website www.bvscience.com .

We are ready to introduce our first products to the US poultry market and we need remarkable sales persons to help us do that.

If you have experience in the US broiler, laying hen or turkey businesses, we would like to talk to you. We want self-starters with a network of contacts in the industry. We need you to have some sales experience in the industry. Also valuable would be experience managing others. You could be asked to travel anywhere in the US or simply a region. You can remain living where you are as you’ll fly to most destinations. Plan on traveling 60-70% of the time.

Come grow with us in this outstanding opportunity with new products from a new company. We would love to talk to you.     Dave Zacek, President/CEO

Send your resume & a letter about yourself to info@bvscience.com.


 

Visit our Companion Website
http://www.chick-news.com/


Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.