Egg Industry News


Egg Industry Center at Midwest Poultry Federation Convention

02/28/2019


 

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

02/20/2019

The USDA Economic Research Service issued an updated forecast of egg production on February 14th, the first since the Federal shutdown. The volume of eggs produced and per capita consumption in 2019 were increased by 1.7 and 0.4 percent respectively compared to revised 2018 data. Consistent with this disparity, the benchmark New York price was reduced by 9.4 percent in unit value Production data reflecting 2016 and 2017 should be compared to 2015, that was impacted by the Spring outbreak of HPAI in the upper-Midwest. The latest data is reflected in the table below.

 

 

Parameter

2015

(actual)

2016

(actual)

2017

(actual)

(actual)2018 (forecast) 2018 Diff % 2018 to 2019
 

EGGS

       
 

Production (m. dozen)

6,938*

7,435

7,677

7,834 7,970 +1.7%
 

Consumption (eggs per capita)

255.8*

271.6

276.3

278.8 279.8 +0.4%
 

New York price (c/doz.)

182*

86

101

138 125 9.4%

Source: Livestock, Dairy and Poultry Outlook -February 14th 2019

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

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


 

REVIEW OF JANUARY 2019 PRODUCTION COSTS.

02/20/2019
  • January 2019 USDA Ex-Farm Benchmark Price Down 12.7 Percent from December 2018, Consistent with Seasonal Trends and Oversupply.

  • January 2019 USDA Average Nest-run Production Cost 1.4 Percent Lower than December 2018 at 59.9 cents per dozen.

  • January 2019 USDA Benchmark Nest-run Margin Decreased 39.3 Percent from December 2018 to 18.1 cents per dozen

 

INTRODUCTION.

Due to the Federal shutdown production and export data for January 2019 will be delayed. EGG-NEWS will post the awaited sections when available.

Summary tables for the latest USDA January 2019 prices made available by the EIC on February 19th 2019 are arranged, summarized, tabulated and reviewed in comparison with values from the previous January 19th 2019 posting reflecting December 2018 data.

 

COSTS & REVENUE

From January 2019 onwards EIC will use USDA-AMS data for regional corn, soybean and standard feed prices. The basis for corn will be cash payment except for California (10-day delivery) and Louisiana and Oregon (30-day delivery). For soybean meal a similar approach will be applied with 20-days for Minnesota. It is noted that January 2019 prices are not directly comparable with December 2018. Month-to-month comparisons in 2019 will be valid.

 

Parameter

JANUARY 2019

DECEMBER 2018

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

59.90 c/doz

60.85 c/doz

Low

56.50 c/doz (MW)

55.66c/doz (MW)

High

77.48 c/doz (CA)

77.77 c/doz (CA)

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

 

JANUARY 2019

DECEMBER 2018

Feed

31.02 c/doz

32.39c/doz

Pullet depreciation

10.91 c/doz

10.94 c/doz

Labor (estimate)

4.00 c/doz

4.00 c/doz

Housing (estimate)*

5.00 c/doz

5.30 c/doz

Miscellaneous and other*

8.97 c/doz

8.22 c/doz


* Adjusted February 2019

Ex Farm Margin according to USDA values reflecting JANUARY 2019:-

78.0 cents per dozen1- 59.9 cents per dozen = +18.1 cents per dozen

(Adjusted December 2018 comparison 90.7 1 cents per dozen - 60.9 cents per dozen = +29.8 cents per dozen.)

Note 1: USDA Blended egg price

   

JANUARY 2019

DECEMBER 2018

USDA

Ex-farm Price (Large, White)

78.0 c/doz

90.7 c/doz adjusted

 

Cage-free to packing plant

156.0 c/doz

156.0 c/doz

 

Warehouse/Dist. Center

113.0 c/doz (Jan.)

Not released

 

Store delivered (estimate)

118.0 c/doz (Jan.)

Not released

 

Dept. Commerce Retail

155.4 c/doz (Dec.)

159.6 c/doz (Nov.)

Layer Feed Cost

JANUARY 2019

DECEMBER 2018

See note on source of data: now USDA

U.S. Average

$197.60/ton

 

$206.29/ton

High

$222.52/ton (West)

$241.20/ton (SE)

Not posted-estimate

Low

$178.56/ton (MW)

$177.23/ton (MW)

Differential

$ 43.96/ton

$ 63.97/ton

Pullet Cost (19 Weeks) $3.77 JANUARY 2019 $3.77 DECEMBER 2018

 

 

 

VOLUMES OF PRODUCTION REFLECTING DECEMBER INCLUDED FOR REFERENCE

 


 

PARAMETER

NOVEMBER 2018

DECEMBER 2018

Egg-strain eggs in incubators

45.1 million (Nov.)

50.8 million (Dec.)

Alltech Sets Topics for ONE19 The Ideas Conference

02/20/2019

The poultry-specific presentations during the ONE19 Ideas Conference will include:

  • Health and Housing for Modern Poultry Producers

  • Building a Finer Flock: Improving Hatching Quality

  • Food Safety and the Need for Improved Pathogen Control

  • Innovations in Poultry Production

The Conference will be held May 19 -21, 2019 in Lexington, KY and registration is now open. For further information access www.one.alltech.com


 

Walmart Reports on Q4 and FY 2019

02/19/2019

In a press release dated February 19th Walmart Stores Inc. (WMT) announced results for the 4th Quarter and Fiscal 2019 ending January 31st 2018.

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

4th Quarter Ending January 31st

FY 2019

FY 2018

Difference (%)

Sales:

$138,793,000

$136,267,000

+1.9

Gross profit:

$33,886,000

$33,627,000

+0.8

Operating income:

$6,067,000

$4,467,000

+35.8

Pre-tax Income

Net Income*

$5,664,000

$3,687,000

$2,964,000

$2,175,000

+91.9

+69.5

Diluted earnings per share:

$1.27

$0.73

+74.0

Gross Margin (%)

24.4

24.6

-0.8

Operating Margin (%)

4.4

3.3

+33.3

Profit Margin (%)

2.7

1.6

+68.8

Long-term Debt:

$6,683,000

$6,780,000

-1.4

12 Months Trailing:

     

Return on Assets (%)

6.4

   

Return on Equity (%)

7.2

   

Operating Margin (%)

4.3

   

Profit Margin (%)

1.0

   

Total Assets

$219,925,000

$204,522,000

+7.5

Market Capitalization

$301,200,000

   

* includes tax provision of $1.85 billion compared to FY 2018 at $601 million.

For FY 2019 WMT earned $6.67 billion on revenue of $514.41 billion with an EPS of $2.28. For FY 2018 WMT earned $9.86 billion on revenue of $500.34 billion with an EPS of $3.28.

FY 2018 incorporated a loss of $3.14 billion attributed to extinguishing debt. Disposal of stores in Brazil resulted in a charge of $1.54 and a loss equivalent to $0.95 was incurred through JD.com.

52-Week Range in Share Price: $81.78 to $ 106.21

Market Close Feb. 15th $99.53. Post-release noon Feb 19 th $103.62

Forward P/E 22.0 Beta +0.6

For FY 2019 WMT attained a 3.6 percent increase in same-store sales. E-Commerce revenue increased by 40 percent over FY 2018.

For guidance WMT forecast a comparative same-store sales increase in the range of 2.5 to 3.0 percent: An EPS comparable to FY 2019 excluding Flipkart of India:

WMT will open less than 10 new stores in the U.S. in the coming calendar year compared to 300 internationally with a concentration on Mexico and China.


 

Tetrick Attempting to Raise Investment Capital

02/19/2019

According to a recent posting on Bloomberg, Just Inc. the most recent iteration of the sequential string of businesses established by Josh Tetrick, is casting a net beyond the U.S. to raise $200 million. He has yet to explain what the previous capital infusion allegedly by Jerry Yang and Vinod Khosla amounting to a claimed $220 million have produced. All that Tetrick has to show for his investors' money are jars of not very stable ersatz mayonnaise and an egg substitute suitable for scrambling.

Tetrick is long on claims but falls short on implementation. When he established his operation four names ago in the 2000s with seed money from the HSUS he boasted that he could displace the U.S. egg industry with plant-based alternatives. We are still here and growing. Two years ago he claimed that he was on the cusp of launching cell-cultured meat. Given that the FDA and USDA have yet to write regulations which may take years and faced with legitimate competitors this claim is regarded as a money-raising ploy to raise investment capital or to generate publicity which fuels his ego.

Just-"whatever" is not exactly filling supermarket shelves or consumers' pantries nor is it a recognized brand. The history of his companies includes a 2016 scandal involving deceptive marketing, an SEC investigation without any penalty, churn among technical and marketing employees and mass defections from his Board.

It is considered significant that he claims to be negotiating with CLSA Ltd. a subsidiary of Citic Securities of China for funds. Apparently U.S. investors have cooled to his claims to be a disruptor and innovator. Other food-related start-ups involved in alternatives to conventional animal protein have received funding from established companies including Tyson Foods and Maple Leaf. Why does the Tetrick business plan not attract U.S. funding? Perhaps the Silicon Valley and East Coast velociraptors are applying the banker's 3-Cs of Character, Collateral and Capacity, and he is coming up short. Can he spell Theranos?


 

USDA Weekly Egg Price and Inventory Report, February 21st 2019.

02/19/2019
  • Hen Numbers in Production Stable at 328.5 million.
  • Shell Inventory up 5.7 Percent from Previous Week.
  • USDA Midwest Benchmark Generic Prices for Extra Large and Large down by 17.7 and 18.0 Percent respectively. Mediums down by 12.3 Percent Compared to Past Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on February 18th the Midwest wholesale prices for Extra Large and Large were lower by 17.7 and 18.0 percent and Mediums were down 12.3 percent compared to the past week. The progression of prices during 2019 is depicted in the USDA chart reflecting three years of data, updated weekly.

The February 18th USDA Egg Market News Report (Vol. 66: No. 07) documented a USDA Combined Region value rounded to the nearest cent, of $1.16 per dozen delivered to warehouses for the week ending February 13th. This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.06 per dozen. At the high end of the range, price in the Southeast Region attained $1.24 per dozen. The USDA Combined Price last week was 20 cents per dozen below the three-year average and 40 cents per dozen below the corresponding week in 2018 which was exceptional.


 


EPA Suppressing Risk Evaluation of Chemicals

02/19/2019

The Government Accountability Office (GAO) has reported that the Integrated Risk Information System (IRIS) an operation within the Environmental Protection Agency has been restrained from releasing reports since June 2018 due to presumed lack of support from the Office of the Administrator. Industry groups including the American Chemistry Council and the Competitive Enterprise Institute have criticized IRIS for "creating unwarranted health scares".

At issue is the alleged relationship between formaldehyde and the risk of leukemia. This chemical among a number evaluated by IRIS are significant to the poultry industry. Formaldehyde is an exceptionally effective disinfectant which can be applied as a liquid disinfectant, as a vapor for fumigation or incorporated in a feed additive which will effectively destroy Salmonella and other non-spore forming pathogens with residual action.

The findings of the GAO are disputed by administrators at the EPA who claim that previous regulations and policies developed during the previous Administration required extensive revision.

Acting EPA Administrator Andrew Wheeler has commented in Congressional testimony that selecting specific chemicals for evaluation was the prerogative of Program Offices based on priorities.


 

IPPE Donates to Atlanta Community Food Bank

02/19/2019

As part of the Giving Back to Atlanta campaign, the 2019 International Production and Processing Expo (IPPE) donated $26,000 to the Atlanta Community Food Bank.

Ben Burgess, Food Sourcing Specialist for the Atlanta Community Food Bank stated, "We are thankful for the continued support the IPPE and its attendees and exhibitors have given the Atlanta Community Food Bank. Contribution from these valued partners will help provide more than 70,000 meals to families in metro Atlanta and North Georgia where one in four children face food insecurity each day"


 

Eggs Gain Adherents Among Top Chefs

02/18/2019

The gourmet magazine Flavor & The Menu cited eggs as one of the top-ten trends in 2019. In a February 10th article by Katie Ayoub, Quinn Adkins, Director Of Menu Development for Culver's was quoted, "Eggs have always been an incredibly versatile ingredient in savory and sweet menu development." He added, "We have finally put to bed the notion that eggs are bad for you. Chefs are reveling with new enthusiasm around egg play."

Trendy restaurants including the Strip House with locations in New York and Las Vegas, the District Kitchen in Austin TX and Bywater American Bistro in New Orleans are all serving dishes based on eggs.


 

Raw Milk Associated with Brucella abortus Outbreak

02/18/2019

Brucella abortus strain RB51 is implicated in outbreaks of brucellosis in consumers of raw milk in New Jersey, Texas and New York. Brucellosis is a difficult disease to diagnose and patients presenting with recurrent fever are frequently not tested for the infection. Primary care physicians do not generally include brucellosis in a differential diagnosis, the disease having been virtually eliminated in the U.S. as a result of the almost universal application of pasteurization.

Strain RB51 was licensed as a B. abortus vaccine in 1996 and is administered by an accredited veterinarian. The use of this vaccine has declined during the past decade as brucellosis has been almost completely eradicated in commercial herds. Calves receiving the vaccine are identified with a vaccination ear tag and tattoo on the right ear. Since RB51 vaccine is derived from the pathogen, it is possible that by inappropriate administration or persistent infection, the live vaccine strain may contaminate milk. Pasteurization will destroy this vaccine strain rendering milk innocuous. Consumption of raw milk carries the risk of tuberculosis, salmonellosis, listeriosis, STEC, campylobacteriosis and now more recently brucellosis.


 

Tahini Spread Contaminated with Salmonella

02/18/2019

In an investigation of a Salmonella Concord outbreak, samples of Soom Foods Chocolate Sweet Tahini Halva Spread were assayed by the CDC. Samples of the product yielded

Salmonella

Tennessee. The manufacturer of the spread was informed of the presence of the contaminant and it is presumed that a recall will be implemented in accordance with FDA policy.


 

EPA Calls for WOTUS Comments

02/18/2019

Following the Executive Order of February 28th 2017, Restoring the Rule of Law, Federalism and Economic Growth, the Waters of the United States Rule was placed in abeyance with the intent of revision. The Environmental Protection Agency and the Department of the Army are now requesting public comment to define the scope of waters regulated by the Federal government under the Clean Water Act.

It is intended to define the relative jurisdictions of the two agencies with respect to potential and functional water courses taking into account the responsibilities of state authorities.

The Waters of the United States (WOTUS) Rule introduced during the previous Administration was extremely contentious and resulted in extensive litigation. WOTUS was regarded by the agricultural community as an exercise in jurisdictional overreach.


 

Tennessee Reconsidering Raw Milk Distribution

02/18/2019

In consistency with trends in relaxation of restrictions on distribution and consumption of raw milk, Tennessee allowed cow-share schemes to operate. Following an extensive outbreak of Shiga-toxin producing E.coli (STEC) among children, a bill is being introduced into the State Senate to restrict consumption of raw milk to the sole owner of the producing cow. The outbreak which affected at least 18 children in East Knox County was traced back to the French Broad Farm which operated a cow-share scheme.

The sponsor of the bill, State Senator Dr. Richard Briggs, introduced Senate Bill 15 bases his opposition to raw milk on his professional standing as a cardiologist and a reserve Colonel in the U.S. Army with a long period of active duty. He recognizes the right for people to have the freedom to eat what they want but he maintains the responsibility of the State to ensure that food and drink are safe. Currently twenty states ban the sale of raw milk for human consumption with thirteen allowing some form of restricted retail sale. Seventeen states confine sales to the farm on which raw milk was produced.

Providing raw milk to children is a form of abuse.


 

Digital Shelf Tags Evaluated

02/18/2019

Both Kroger and Walmart are testing digital shelf tags. These take the form of either E-ink tags that resemble paper labels or LED strips mounted along shelf edges capable of displaying graphics.

Shoppers apparently prefer E-ink tags over conventional printed labels, based on clarity that facilitates price comparison. LED strips are obviously more eye-catching and in color, but clarity is dependent on the technology applied.


 

Whole Foods Raising Prices

02/18/2019

After the acquisition of Whole Foods Market by Amazon, prices were apparently lowered to boost traffic and revenue. Research conducted by the Telsey Advisory Group has shown a steady increase in the cost of an index basket of 40 products from a level of 185 in the month of September 2018 to 193 in January 2019. The increase representing an annualized 10.3 percent rise, is attributed to higher prices from producers due to escalation in packaging, ingredient and transportation costs. Products subjected to a rise in price include Haagen-Dazs ice cream, Hain Celestial teas, Dr. Bronner's soaps and branded crackers and cookies among 550 products.

Since acquisition of Whole Foods Market, the chain has eliminated 700 products as contracts expired. Under Amazon ownership, Whole Foods Market has not lost its reputation for high prices despite the promotions extended to customers under the Prime membership program.


 

Hen Sleeper™ for Euthanasia

02/18/2019

During the AAAP Welfare Meeting at the 2019 IPPE, Ryan Moyle described advanced technology applying carbon dioxide for mass euthanasia as an improvement on traditional "kill carts". The installation uses a three-step conveyer system to obviate piling and to induce stress-free unconsciousness and euthanasia over a two-minute period. The module which can operate at 10,000 to 12,000 hens per hour subjects hens to progressively higher levels of carbon dioxide extending from an initial 30 percent to 70 percent concentration.

The Hen Sleeper was scientifically evaluated by Iowa State University in 2018. The system was 99.9 percent effective in inducing insensibility as evaluated using 11,000 hens. It was concluded that the Hen Sleeper is a humane and practical technology to depopulate caged flocks and conforms to the requirements outlined in AVMA guidelines for carbon dioxide euthanasia.

The benefits apart from welfare include lower labor requirements although the capital investment for equipment imposes costs for depreciation, interest, maintenance that may be a deterrent to more extensive adoption unless mandated by regulations imposed by states or customers. In a subsequent posting, EGG-NEWS will develop a projection of actual costs given that each unit costs $50,000 and operates at 2,000 hens per hour. To clear a house of 240,000 hens would require 40 operating hours with a projected total output of 6,000 hens per hour with three machines operating using a crew of three per unit.


 

APHIS and CADFA Impose Quarantines in Riverside and San Bernardino Counties

02/15/2019

Faced with an escalating incidence of vvNewcastle disease in the two counties, authorities have imposed quarantines on all backyard exhibition chickens (a consistently applied euphemism for fighting cocks) in the localities of Muscovy, Ontario, Mira Loma and Perris.  In terms of the quarantine owners must hold, and isolate their flocks on the current premises.  Given the nature of the birds concerned and taking into account the attitude of their owners, enforcing the regulation may be less than successful. 

 

It is noted that an individual outbreak occurred in Utah County, UT., attributed to illegal movement of fighting cocks from Southern California.

 

As of February 7th, 2019 there have been 363 cases of vvNewcastle disease among three Southern California counties plus one case in Ventura County.  One pullet flock and four commercial laying flocks have been infected with the disease which must now be considered endemic among non-commercial backyard and fighting cock flocks.  This reality should guide appropriate action by the authorities.  Persistence of infection since May 2018 suggests that it is only a matter of time before the infection extends from the three-county locality northward to higher concentrations of commercial poultry.  Implications for enhanced biosecurity are self-evident.


 

WEEKLY COMMODITY REPORT

02/15/2019

The following quotations for the months as indicated were posted by the CME at close of trading on Friday February 15th together with values for the reference months in parentheses. The market showed a mild decline for soybeans coupled with stagnation in corn compared to previous weeks.

COMMODITY

 

Corn (cents per bushel)

March 375 (374)

May 383 (382)

Soybeans (cents per bushel)

March 908 (916)

May 921 (931)

Soybean meal ($ per ton)

March 306 (307)

May 310 (311)

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

COMMODITY             CHANGE FROM PAST WEEK

Corn: March quotation up 1 cent per Bu. (+0.3 percent)

Soybeans: March quotation down 8 cents per Bu (-0.9 percent)

Soybean Meal: March quotation down $1 per ton (-0.3 percent)

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

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

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

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

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

COMMENTS

Soybean prices recently firmed in response to reports of drought in areas of Brazil. Approximately 20 percent of the crop projected to be 117.2 million metric tons is at risk. The market has now factored in decreased production in Brazil and Argentine.

There is fluctuating optimism concerning the outcome of the ongoing negotiations between China and the U.S. initiated at the dinner meeting during the G-20 Summit between the delegations from the U.S. and China led by their respective Presidents. Statements by members of the Administration concerned with the issue on February 8th suggest a likely extension of the March 31st deadline to raise tariffs from ten percent to twenty-five percent on over $200 billion in annual imports from China. In return China has agreed to purchase an unspecified quantity of agricultural commodities in addition to energy and heavy equipment from the U.S. to offset the negative balance of payments. An initial order of 1.5 million tons was placed in December 2018, the first since June. The USDA announced on January 7th that orders have been placed for an additional 3 million tons to be shipped before September 2019. China has hinted at a six-year agreement to purchase soybeans mainly due to concern over drought in Brazil. Negotiations are apparently in progress as denoted by shuttles between Beijing and Washington but without any disclosure of specifics. Markets are buffeted by conflicting reports from the Administration.

According to the February 8th 2018 WASDE Report #585, (the first issued after the December 24th 2018 Federal Shutdown), 81.7 million acres of corn will be harvested in 2019 to produce 14.42 Billion bushels. The soybean crop is projected to attain 4.54 Billion bushels from 88.1 million acres harvested. The levels of production for the two commodities are based on preliminary pre-planting projections of yield and acreage to be planted. Ending stocks were revised based on anticipated domestic use and exports.

See the WASDE posting summarizing the February 8th USDA-WASDE Report #585 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2019 harvest.

Unless shipments of corn and soybeans to China resume in volume, as projected, the financial future for row-crop farmers appears bleak despite the release of two tranches amounting to $12 billion as "short-term" compensation for all producers of commodities and livestock. Corn farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. Oversupply of ethanol with the current 10 percent addition (read BTU dilution) mandate is evident from the February 15th spot price of $1.32 per gallon that has not changed materially in six weeks compared with a 2018 peak in late March of $1.60. Exports have been constrained by the retaliatory tariffs imposed by China on U.S. ethanol. Some refiners are reducing production and mothballing corn-fermentation plants.

The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. It must be recognized that the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift that keeps on giving. The mandate is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


 

Wilcox Farms Share Positive Experiences from Ovotrack Installations

02/15/2019

Wilcox Farms commenced installation of Ovotrack systems in 2010 and the company has steadily upgraded and extended the range of equipment.  Eggs delivered by all contractor-suppliers are now traceable using Ovotrack Farm Labeling, Ovotrack Receive, Ovotrack Loader and Grader Communication. 

 

Each pallet with nest-run eggs is individually labeled.  These are scanned on receipt at the plant and are subsequently rescanned at the point of loading. The Moba Omnia Grader reports grade-out to the Ovotrack system.  Results are relayed to producers and are also incorporated into the weekly production report.

 

In 2018 the Ovotrack system was converted to be compatible with the PX530 Grader allowing Wilcox Farms to automate recording using a MR50 D-Palletizing Robot.

 

Andy Wilcox, director of egg operations notes that the Ovotrack system allows the company to identify and separate all batches of eggs supplied contributing to positive traceability and also to conform to welfare certification.

 

 For further information access info@ovotrack.NL or contact Matt Poole, commercial representative for Ovotrack in the U.S. and Canada mpoole3447@yahoo.com.  Details of Ovotrack systems can be accessed at www.ovotrack.com


 

Ovotrack Software integrates Weighing

02/15/2019

Applying either Ovotrack Receive or Ovotrack Label software, current Ovotrack installations can import weight data and integrate figures with barcode scanning.  Data on weights is stored in a database and can be used for process control, invoicing and payment to suppliers.  The integration of weighs is also used by breakers to weigh incoming product as palletized containers with product including egg whites, yolk or whole egg liquid.


 

USDA Weekly Egg Price and Inventory Report, February 14th 2019.

02/14/2019
  • Hen Numbers in Production up 0.1 million to 328.5 million from February 7th.
  • Shell Inventory up 7.7 Percent from Previous Week.
  • USDA Midwest Benchmark Generic Prices for Extra Large and Large down by 13.7 and 13.8 Percent respectively. Mediums down by 15.5 Percent Compared to Past Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on February 11th the Midwest wholesale prices for Extra Large and Large were lower by 13.7 and 13.8 percent and Mediums were down 15.5 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 February 11th USDA Egg Market News Report (Vol. 66: No. 06) documented a USDA Combined Region value rounded to the nearest cent, of $1.33 per dozen delivered to warehouses for the week ending February 6th. This price lags current Midwest weekly values by one week. The USDA Combined range for Large in the Midwest was $1.23 per dozen. At the high end of the range, price in the South Central Region attained $1.41 per dozen. The USDA Combined Price last week was 15 cents per dozen below the three-year average and 55 cents per dozen below the corresponding week in 2018 which was exceptional.


 


Chipotle Appoints VP of Food Safety

02/14/2019

According to a January 31st press release, Chipotle Mexican Grill has appointed Ms. Kerry Bridges as the Vice President of Food Safety. Bridges was formerly the Senior Director of Supplier Food Safety for Walmart for over five years. Ms. Bridges has also worked for Jack In The Box, noted for quality assurance.

Ms. Bridges replaces Dr. James Marsden, who retired in October 2018. Dr. Marsden previously affiliated with academia and a leader in his field was brought into the company to resolve problems relating to food safety practices in 2016 at a time when the future of the company was in question. It is hoped that Ms. Bridges will build on the foundation created by Dr. Marsden.


 

Recall of Fruit from Chile

02/14/2019

The FDA has issued a recall notice for approximately 3,000 cartons of fresh peaches, nectarines and plums imported from Chile. The fruit was distributed to retailers including Aldi, Costco, Fairway Market and Walmart in 18 states. Routine sampling yielded Listeria and an investigation has been initiated by the importer JAC.Vandenberg, Inc.

This company imports and distributed over 12 million cartons of fresh produce annually from 11 nations.

There are no reports of illness associated with this recall. Preemptive assay of imported food products after arrival in the U.S. is a valuable precaution contributing to both public health and the image and integrity of the company concerned. The FDA apparently only conducts organoleptic examination of less than two percent of imported food. Accordingly it is now the responsibility of importers to conduct microbiological and toxicological monitoring to ensure wholesomeness.


 

FDA To Strengthen Public Warnings On Voluntary Recalls

02/14/2019

Voluntary recalls are implemented by companies in collaboration with their partners in the supply chain with the objective of removing product from shelves as quickly as possible.

The FDA is concerned that additional warnings are required to protect consumers. Following a January 2018 announcement, the FDA issued a draft guidance document requiring companies to disclose retail information on recalled products. A guidance was issued on mandatory recall of foods was finalized in November 2018. On February 7th, the FDA released the Final Rule issued under 21CFR Part 7 describing when the FDA would issue a public warning and describes the general timeframe for companies to issue their own warning including content. The FDA will monitor recalls in accordance with an Enforcement Report.

During the past 12 months, the FDA has issued warnings relating to Kellogg's Honey Smacks, romaine lettuce and certain drugs including Angiotensin II receptor blockers.During fiscal 2018, there were 7,420 recalls with 831 classified as high risk.

It is anticipated that the application of advanced technology including whole genome sequencing will allow state and federal health officials to detect foodborne disease outbreaks, match them to a product or facility and trace contamination to source.

In the accompanying comments, FDA commissioner Dr. Scott Gottlieb noted "I remain committed to investing in the FDA recall and outbreak programs, building on our successes and applying the FDA leadership and expertise to protect American families and keep our nation safe."


 

Kroger Extends Home Chef Meal Kits

02/14/2019

Kroger is now making available Home Chef Meal Kits in 500 Kroger stores and an additional six banners by early March. Home Chef has introduced the Customize It line allowing changes and upgrades among ingredients to provide flexibility. Home Chef Express meal kits will also be available at 65 Walgreens stores in the Chicago area.

Robert Clark, Senior Vice President of Merchandising at Kroger noted "We continue to redefine the customer experience and provide new ways to shop for prepared and cooked meals through brick-and-mortar and digital experiences." Pat Vihtelic, founder and CEO of Home Chef stated "We are proud to continue our evolution towards becoming more than a meal kit delivery brand." He added "With continued innovation, personalization we are providing customers with more ways to enjoy fresh, delicious meals that align with their individual tastes."


 

Additional Value from Egg Yolk Required

02/14/2019

The American Egg Board has circulated a review by X. Huang Dong and U. Ahn regarding the potential to derive added value from egg yolk. This approach is necessary based on the imbalance between relative demand for egg white and whole egg that has created a surplus of yolk. The authors recommend separation of functional proteins and lipids from yolk to be used as functional components of pharmaceuticals, nutraceuticals and cosmetics. Following development of potential applications, it will be necessary to scale up production from pilot studies to commercial use.

For the week ending February 8th, the price for dried whole egg ranged from $2.60 to $2.75 per pound with a similar value for yolk. In contrast, spray-dried white ranged from $4.70 to $4.90 with blends at $2.75 to $2.80.

At the end of December 2018, USDA reported a dried egg inventory of 14.9 million pounds equivalent to slightly less than 5-weeks current production. Low shell egg prices divert non-contracted eggs and shell eggs from companies with both packing and breaking capability into egg liquid.


 

Vegans Implacable in Refusal to Consume Insect-Derived Protein

02/14/2019

A study conducted in Finland on attitudes towards consumption of insect-derived protein among vegans, non-vegan vegetarians and omnivores demonstrated a negative attitude and low willingness to consume insect protein among vegans. Among the group of 567 surveyed, 74 percent were omnivores, non-vegan vegetarians 22 percent and vegans comprised 5 percent of those surveyed.

The vegan demographic held that consumption of insects was "irresponsible and immoral" confirming a weak intention and negative attitudes toward insect protein. In contrast, non-vegan vegetarians demonstrated positive attitudes towards eating insects considering the environmental benefits of insect-derived protein.

Although there has been considerable work on production of insects including fly larvae, crickets and beetles specifically for animal feed, there are profound questions regarding both the commercial acceptability of insect-derived protein and regulatory restraints involving health safety and labeling. It is possible that proteins derived from insect propagation might be incorporated in further-processed foods on the basis of amino acid contribution or functional properties. It is most probable that insect protein, if financially competitive with synthetic amino acids, would be used animal feeds and not human food.


 

Eggland’s Best Receives Woman’s Choice Award.

02/14/2019

For the 5th consecutive year, Eggland's Best shell eggs were named America's Most Recommended Eggs through the Women's Choice Award®. EB Hard-Cooked Peeled Eggs also received this honor for the 2 nd consecutive year.

 

"Being voted the most recommended egg brand by women across America five years in a row is an incredible feat," said CEO and Founder of the Women's Choice Award® Delia Passi. "Women account for 93 percent of all food purchases, and having their stamp of approval only reaffirms the Eggland's Best brand's commitment to providing a product with the best quality, freshness, variety, taste and nutrition."

The Women's Choice Award® seal helps women make smart choices for themselves and their families based on the experiences and recommendations of women across the nation.


 

Egg Industry Issues Forum WILL Take Place in April

02/14/2019

A malicious hack of the Egg Industry Center list server resulted in a spurious message stating that the 2019 Egg industry Forum had been cancelled. The event will take place and the following release is posted to support the EIC:-

The 2019 Egg Industry Issues Forum is scheduled for April 16-17 in Kansas City, Missouri. Held at the Westin Crown Center Hotel, the event will discuss the considerations of outcomes-based vs. research-based standards, labor needs, Prop 12 and cage-free economic implications and more. Research presentations will focus on the results from studies conducted on Focal Duodenal Necrosis disease, poultry manure application, cage-free housing, and egg quality in aged hens. Before and after the Forum, attendees will have the opportunity to attend free in-depth workshops on connecting with consumers and ventilation management.

For additional information or registration access

https://www.eggindustrycenter.org/egg-forum


 

Midwest Poultry Federation Convention March 12-14th Minneapolis

02/12/2019


 

Tommy Bagwell Recipient of Harold E. Ford Lifetime Achievement Award

02/11/2019

Tommy Bagwell, former chairman and CEO of American Proteins, received the Harold E. Ford Lifetime Achievement Award during the 2019 International Production and Processing Expo. This prestigious honor was presented to Bagwell by Tom Hensley, president of Fieldale Farms and the outgoing USPOULTRY Chairman.

The Harold E. Ford Lifetime Achievement Award is presented to an individual whose dedication and leadership over the years have far exceeded the ordinary and impacted both the poultry industry and U.S. Poultry and Egg Association in an exemplary manner. The award is presented non-annually and when the Awards and Recognition Committee unanimously recognizes and endorses the need for occasional, unique recognition for exceptional contributions.

A native of North Georgia, Bagwell earned a degree in economics from Clemson University with a minor in Spanish. He also completed graduate studies in industrial management, business administration and economics at Clemson and the University of Georgia.

In 1969, Bagwell began his professional career at North Georgia Rendering Co, now known as American Proteins, Inc. In 1972, upon the death of his father Leland, Bagwell became president. Today, American Proteins services the poultry industry from plants in Georgia and Alabama and supplies feed ingredients throughout the world. American Proteins was sold to Tyson Foods last year.

He serves on the U.S. Poultry & Egg Harold E. Ford Foundation Board of Directors. In 2014, Bagwell received the Philanthropist of the Year Award from the North Georgia Community Foundation.


 

Export of Shell Eggs and Products January-November 2018.

02/10/2019

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

PRODUCT

Jan.-Nov. 2017

Jan.-Nov. 2018

Difference

Shell Eggs

     

Volume (m. dozen)

113.4

110.9

-2.5 (-2.2%)

Value ($ million)

114.1

120.0

+5.9 (+5.2%)

Unit Value ($/dozen)

1.01

1.08

+0.07 (+6.9%)

Egg Products

 

 

 

Volume (metric tons)

40,473

28,921

-11,552 (-28.5%)

Value ($ million)

108.9

101.7

-7.2 (-6.6%)

Unit Value ($/metric ton)

2,690

3,516

+826 (+30.7%)

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

NOVEMBER 2018 COMPARED WITH JANUARY-NOVEMBER 2017

Source USDA-FAS/USAPEEC


 


IPPE SPECIAL EDITION SPONSORS' BOOTH ASSIGNMENTS

02/08/2019

The following list of sponsors of EGG-NEWS and CHICK-NEWS and their booth numbers are provided for guidance of attendees:-

SPONSOR

 

BOOTH

Alltech

A1511

Anitox

C10643

Aviagen

C10629

Big-Dutchman

C9543

Biomin

A1325

Biochek

A3429

BV Science

C11621

Chr. Hansen

A2149

Chore-Time

C11323

Dolco

B5827

Extreme Microbial

C945f3

FSNS

B5645

Gi-Ovo

C9314 & C11277

Hamlet Protein

A1919

HatchTech

C10915

Hendrix Genetics

C11311

Henning Companies

C11255

Hy-Line International and North America


 

USDA-WASDE FORECAST #585 February 8th 2019

02/08/2019

OVERVIEW

The February 8th 2018 USDA WASDE projections for the 2019 corn and soybean harvests are based on historical yield and harvest data. The corn acreage to be harvested was determined from planting intentions to be 81.7 million acres (81.8 million in 2018). In 2019 soybeans will be harvested from 88.1 million acres (88.3 million acres in 2018).

The USDA projected corn yield to attain 176.4 bushels per acre, (178.9 bushels in 2017). Soybean yield was projected at 51.6 bushels per acre (52.1 bushels in 2018).

The February USDA projection of ending stock for corn was reduced by 2.6 percent to 1,735 million bushels. Ending stock for soybeans will be 4.7 percent lower at 910 million bushels with minimal effect on CME price quotations subsequent to the noon release of the February WASDE.

It is emphasized that projections are based on the presumption of at least a partial settlement of the trade dispute with China with restoration of exports to that Nation.


 


Oregon Courts Reject Legal Status of Horse

02/07/2019

EGG-NEWS has previously commented on repeated lawsuits brought by animal-rights activist on behalf of non-human primates to establish legal status. All have been rejected.

A new lawsuit in Oregon brought on behalf of a horse was similarly rejected by Washington County Judge John Knowles stating that "non-human animals are incapable of accepting legal responsibilities".

It is evident that if a horse or any other domestic animal is afforded legal status, lawyers will be suing on their behalf creating a deluge of litigation which would incapacitate the livestock industry.


 

Salmonella Outbreak From Cake Mix Now Over

02/07/2019

In a January 31st update, the Food and Drug Administration announced that the limited outbreak of Salmonella Agbeni has ended. On November 7th, an investigation was initiated following diagnosis of seven cases in six states. Salmonella Agbeni was isolated from patients and was matched by whole genome sequencing to a specimen obtained from a sample of Duncan Hines cake mix. Conagra Brands initiated a voluntary recall. An epidemiologic investigation failed to yield the causal organism from the environment of the plant and there was insignificant epidemiologic trace-back information available from the limited number of cases.

The specific case illustrates that database systems operated by CDC can detect a multi-state outbreak involving less than 10 patients. Whole genome sequencing can be used to confirm the relatedness of isolates from patients and can correlate infection with a source providing that the pathogen is present in the environment of a processing facility or in product.


 

Trader Joe’s Ending New York Grocery Delivery

02/07/2019

Contrary to the trend in convenience involving click-and-collect and home delivery, Trader Joe's will end a program offering local delivery in the New York area. After ten years, the company has decided that the service is too expensive. Company spokesperson Kenya Friend-Daniel commented "Instead of passing along unsustainable cost increases to our customers, ceasing deliveries will allow us to continue offering outstanding values and quality products for great everyday prices to make better use of valuable space in our stores."

In contrast to the Trader Joe's decision, Walmart will extend grocery delivery from 1,600 locations and curbside pickup from 3,100 locations by the end of 2020. This initiative is to compete with the Amazon-Whole Foods Market combination.

Dow Jones estimates that online grocery sales in the U.S. attained $24 billion in 2018 and may treble by 2025.


 

SKOV Position Announcements.

02/06/2019

Skov, a leading multinational supplier of ventilation and computerized flock management systems, has position openings for an Area Sales Manager and a Technical Representative.

For required qualifications and conditions of employment access www.candidate.hr-manager.net/vacancies/list.aspx?customer=skov


 

SE Outbreak in NSW, Australia

02/06/2019

Health authorities in New South Wales have identified a specific source of eggs potentially contaminated with Salmonella Enteritidis (SE). In January 2019, over 400 cases of SE were diagnosed, mostly in the Sydney metro area.

Following a 2018 outbreak of SE and then a subsequent episode in September 2018, New South Wales authorities required individual stamping of eggs to assist trace-back to a source of infection.

It is evident that Australian and specifically New South Wales producers should adopt the same programs as introduced in the EU and the U.S. to eliminate SE from supply flock. Programs should include elimination of SE from the production chain resulting in pullet chicks free of infection, vaccination, biosecurity, and rigorous monitoring of flocks for SE status. Rigorous measures are required including a reevaluation of free-range housing that is gaining popularity in Australia. The alternative will be reoccurrences of infection, consumer disaffection and decreased consumption.


 

Dispute over Smithfield Environmental Penalty

02/06/2019

In terms of a 2000 agreement between Smithfield Foods and the Attorney General of North Carolina, the Company has paid $2 million annually as a penalty for soil and water contamination and will continue to do so until 2025. Funds have been disbursed to state agencies and organizations for environmental remediation.

The New Hanover County School Board has sued the State claiming that civil penalties should be diverted to school boards. A trial judge dismissed an early lawsuit and the current Attorney- General, Josh Stein has requested the State Supreme Court to rule on the issue.


 

USDA Reveals Incident Cases of ND during Shutdown

02/06/2019

The last reports posted by USDA before the December 24th 2018 Federal shutdown documented 231 individual confirmed cases in a three-county area of Southern California. Reports this week in CHICK-NEWS suggested that the total may be closer to 300 to date. On February 1 st USDA announced 84 new cases between December 21st and January 24th followed by an additional 26 cases during the last week of January 2019. Obviously Newcastle disease transmission was not in shutdown mode.

EGG-NEWS again criticizes the USDA and the California Department of Food and Agriculture for their obvious inability to control the outbreak. The disease has extended to five commercial flocks and has extended in one case from California to Utah.

The outbreaks occur in what is euphemistically referred to as "backyard flocks". It is understood that most cases have occurred in fighting cocks ("game fowl"). These birds are by intent highly mobile. Whether through lack of commitment, concern for political correctness or lack of resources, the problem of endemic Newcastle disease in the fighting cock population in Southern California has not been adequately addressed. The USDA and CDFA should resolve the problem before a one-million laying hen complex or a broiler integration are infected.


Fighting Cocks

 

Listeria Isolated from Raw Milk from New York State Dairy

02/06/2019

In 2010 Shunpike Dairy transitioned to selling raw milk to customers from the farm in accordance with restrictions imposed by New York State. Routine assay demonstrated the presence of Listeria monocytogenes in milk from the dairy. At this time, there have been no reported cases of infection although it is noted that the incubation period can extend up to two months. Pregnant women, the elderly, children and the immunosuppressed are at higher risk of infection and demonstrate more serious clinical presentations compared to other demographics.

There is no justification for consuming raw milk that is inherently dangerous. The CDC has recently identified raw-milk outbreaks due to infection with E.coli, Salmonella, Listeria and more recently Brucella a pathogen that has been virtually eradicated in industrialized nations.


 

USDA DATA ON CAGE-FREE PRODUCTION

02/05/2019

Based on the importance of cage-free production, the USDA-AMS issues a monthly report on volumes and prices for the information of Industry stakeholders. There is some doubt as to the accuracy of the monthly flock numbers and the question is raised whether it would not be more desirable to post accurate quarterly data in place of unconvincing monthly figures with similar hen data for consecutive months.

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

The USDA Cage Free Report for the month of January 2019 released on February 5th 2019 documented constant flock sizes in hens producing under the Certified Organic seal and for cage-free flocks as compared to the values for October through December 2018. The respective numbers of hens in organic and cage-free flocks should reflect the realities of supply and demand in the market over successive quarters. Average flock production was held at 75.75 percent for both categories of non-caged hens (accepting USDA data) although there were differences in placement programs and hen age among months :-

Flock size '18 (million hens)

May

June

July

Aug.

Sept.

Oct. '18 through Jan. 2019

Certified Organic

15.6

15.6

15.6

15.6

15.7

15.7

Cage-free hens

38.9

39.1

39.1

39.1

41.4

41.5

Total non-caged

54.5

54.7

54.7

54.7

57.1

57.2

 

Average weekly production cases, January 2019

Certified Organic

231,042 unchanged from Dec. '18

Cage-free

610,819 unchanged from Dec. '18

Total non-caged

841,861 unchanged from Dec. '18

 

Average Wholesale Contract Price Cage-Free Brown

$1.56/doz. Unchanged since Nov. '18

Range unchanged at:

$1.15 to $2.10/doz.

FOB Negotiated price, grade quality nest- run, loose

Average down 15.9 percent from December with wider spread

$0.98 to $1.55/doz. (Av. $1.27/doz)

was $1.20 to $1.51 (Av. 1.36/doz.)

 

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

$2.48/doz. (was $2.47 Dec. 2018)

USDA 6-Region

High: NE

$2.94/doz. $2.76 (Dec.)

 

Low: MW

$2.14/doz. $2.24 SC.

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


 

Amazon posts Q4 and FY 2018 Results

02/05/2019

In a January 31st press release Amazon.com Inc. (AMZN) released financial results for the 4th Quarter and Fiscal 2018 ending December 31st 2018.

For the 4th Quarter the Company posted sales of $72.4 billion, 19.9 percent above the corresponding 4th Quarter of FY 2017. Net earnings amounted to $3.0 billion, 66 percent over Q4 FY 2017. EPS increased 61 percent to $6.04.

For FY 2018 sales increased 82 percent to $232.9 billion and earnings attained $10.7 billion, a 232 percent increase over FY 2017. EPS increased from $6.15 in FY 2017 to $20.14 in FY 2018.

Amazon Inc. posted assets of $162.6 on December 31st 2018 compared to $131.3 at the end of the previous year. Long-term debt and related liabilities increased by 10.9 percent to $50.7 billion.

On a trailing 12-month basis AMZN achieved operating and profit margins of 5.3 percent and 4.3 percent respectively. Return on assets attained 5.3 percent with a 28.3 percent return on investment.

AMZN has traded over the past 52 weeks from $1,265 to $2,050. After release of the report on Thursday 31st January, AMZN opened down 3.5 percent on Friday morning February 1st to $1,638. By14H00 on February 5th AMZN was higher at $1,657.

The Company issued guidance for Q1, FY 2019 projecting sales in the range of $56 billion to $60 billion, 10 percent to 18 percent above Q1 FY 2017, with an operating income range of $2.3 billion to $3.3 billion.


 

ADM Reports on Q4 and FY 2018

02/05/2019

In a press release dated February 5th Archer Daniels-Midland Company (ADM) announced results for the 4th Quarter of Fiscal 2018 ending December 31st 2018.

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

4th Quarter Ending December 31st.

2018

2017

Difference (%)

Sales:

$15,947,000

$16,070,000

-0.8

Gross profit:

$1,053,000

$942,000

-11.8

Operating income:

$365,000

$450,000

-18.9

Pre-tax Income

Net Income

$312,000

$315,000

$543,000

$788,000

-42.5

-60.0

Diluted earnings per share:

$0.55

$1.39

-60.4

Gross Margin (%)

6.6

5.9

-11.9

Operating Margin (%)

2.2

2.8

-21.4

Profit Margin (%)

2.0

4.9

-60.4

Long-term Debt:

$8,280,000

$6,636,000

+24.8

12 Months Trailing:

     

Return on Assets (%)

3.2

   

Return on Equity (%)

12.5

   

Operating Margin (%)

3.1

   

Profit Margin (%)

3.5

   

Total Assets

$29,747,000

$28,263,000

+5.3

Market Capitalization

$23,400,000

   

52-Week Range in Share Price: $39.16 to $52.07

Market Close February 4th $44.47 Open post-release February 5 th $43.03. 15H30 $41.72

Forward P/E: 11.4 Beta 0.8

For FY 2018 sales increased 5.7 percent to $64.3 billion, generating net earnings of $1.8 billion ($1.6 billion FY 2017) and EPS of $3.19 ($2.79 in FY 2017)

In commenting on results Chairman and CEO Juan Luciano stated "our team executed well, delivering strong year-over-year profit growth in the fourth quarter," said. "Looking back on the full year, the team did a great job focusing on the items we could control, as we continued innovating to serve customer needs and advancing our strategic priorities. Our effective management through complicated and rapidly changing trade, geopolitical and market conditions helped deliver an impressively strong 2018 that included solid profit growth, improved returns on invested capital and higher cash flows.

"We will continue working to deliver shareholder value in 2019 by vigorously executing our strategy, including aggressively working to improve execution in select businesses, accelerating our Readiness efforts to deliver increasing value, and harvesting the contributions from our acquisitions and organic growth investments. By continuing to pull the levers under our control, we are positioning ourselves to grow profits and returns in 2019 and beyond."

ADM was severely impacted by imposition of tariffs by China including the need to divert and salvage cargos of sorghum. The Company experienced increased costs following an incident in a Decatur IL. Plant.

For the 4th Quarter of FY 2018 the Animal Nutrition Segment yielded a lowered operating profit ($62 million compared to $73 million) attributed in part to competition and "production issues" impacting manufacture of lysine.

The Oillseeds Segment was the outstanding contributor to earnings generating an operating profit of $432 million compared to $201 million in Q4 2017.


 

McDonalds Plans to Enhance Sales Through Products and Convenience

02/05/2019

Addressing investors, the president and CEO of McDonalds Corporation, Stephen J. Easterbrook highlighted improvements during the past year that have contributed to a 4.4 percent increase in global same-store sales. These include introduction of home delivery and launching a program of fresh beef for burgers cooked to order. McDonalds also will increase sales through introducing breakfast menu innovations and "digital engagement". If this includes ordering ahead, "digital will be beneficial". The kiosks installed in many restaurants require considerable work to improve speed and convenience other than for simple orders.

Reducing waiting times at the drive-through window will be a significant development area for 2019. Research has shown that service times have increased progressively over the past five years. The company plans to enhance service by applying lessons learned from trials conducted at designated locations.

McDonalds is under pressure from competitors that innovate at a rapid rate and copy beneficial introductions at McDonalds. The Company and its franchisees are facing higher labor costs without evident introduction of mechanization and automation. Disaffected franchisees have formed their own organization to press their concerns and to pressure corporate management to make meaningful improvements


 

Idaho to Reimburse Attorneys over Ag Gag Case

02/05/2019

The Animal Legal Defense Fund sued the state of Idaho over the 2012 Ag Gag law which was overturned on First Amendment issues.

The Idaho Constitutional Defense Council will have to agree on reimbursing the plaintiffs' legal team which has claimed $260,000.


 

McDonalds Faces Competitive Challenges

02/05/2019

In a conference call following the release of Q4 and fiscal 2018 results, Steve Easterbrook, President and CEO commented on the need to increase drive-through efficiency to boost breakfast sales which represent 25 percent of revenue. Although the U.S. showed a 2.3 percent increase in same-store sales for the 4th quarter, traffic declined by 2.2 percent in 2018 compared to a 1.0 percent rise in 2017.

For the past year, revenue declined by 3 percent mainly due to refranchising of company-owned stores.

McDonalds has embarked on a program of refurbishing stores including the installation of order kiosks. Expenditure on improvements including installation of a wall between the counter and the kitchen is opposed by franchisees who believe the expenditure is unnecessary and they would rather spend money on upgrading drive-throughs.

The results posted by McDonalds were detailed in the February 1 st edition of EGG-NEWS and can be accessed by entering McDonald's in the SEARCH block.


 

Japan-E.U. Trade Agreement Now a Realty

02/05/2019

As the Japan-European Union Trade Agreement commences operation, the U.S. will be at a disadvantage unless a U.S.-Japan agreement is soon concluded. This adverse situation would not have occurred had the U.S. not unilaterally withdrawn from the Trans-Pacific Partnership Agreement in 2017.

In commenting on the Japan-E.U. Trade Agreement, Jim Sumner of USAPEEC stated "We are especially concerned for our processed egg companies because Japan is by far our top market for processed egg products.

For the period January through October 2018, Japan was the leading importer of egg products with a volume of 8,985 metric tons valued at $37.8 million. Egg product exports to Japan in the 10-month period in 2018 represented 34 percent of volume and 48.7 percent of value of U.S. exported egg products.


 

7-Eleven Stores Test Premium Breakfast Sandwiches

02/04/2019

7-Eleven will be trialing a line of premium breakfast sandwiches bearing the “Made with REAL Eggs”. The initiative was developed by the American Egg Board in collaboration with the convenience chain. The trial will run for four weeks in selected regions.

AEB intends to promote the image of eggs to counter substitutes wit products bearing a “Made with REAL Eggs” logo. 

AEB has established a website www.madewithrealeggs@aeb.org

Subscribers to EGG-NEWS are invited to try the new product and support the industry.


 

AEB to Host Deviled Egg “Power Hour” at IPPE

02/04/2019

On Tuesday February 12th during the IPPE the AEB presented Deviled Egg Power Hour on booth C10624 at 16H00.

The AEB leadership team including Chairman Jeff Hardin and CEO Anne L. Alonzo will host. Market development Senior Vice-president John Howeth, VP marketing, Sofia Therios and the Director of the Egg Nutrition Center, Dr. Mickey Rubin will be in attendance.


 

AEB Efforts to Promote Eggs in School Meals Progressing

02/04/2019

The American Egg Board has achieved breakthroughs in a number of schools that are now serving eggs as menu items.

  • The Griffin-Spaulding County School System in Georgia is serving a salad with hard-boiled egg wedges.

  • The Cobb County School System in Georgia is serving a Cobb salad.

  • Poudre Schools in Colorado have included hard-boiled egg in salads together with spinach, apple and cheese.

Obviously introducing elementary and high school students to eggs generates product loyalty that hopefully will continue to influence food choices through university and home life.


 

WEEKLY COMMODITY REPORT

02/01/2019

The following quotations for the months as indicated were posted by the CME at 15H30 on Friday February 1st together with values for the reference months in parentheses, confirming a stagnant market for corn, soybeans and soybean meal consistent with the previous week.

COMMODITY

 

Corn (cents per bushel)

March 378 (380)

May 387 (388)

Soybeans (cents per bushel)

March 917 (923)

May 931 (928)

Soybean meal ($ per ton)

March 312 (314)

May 316 (314)

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

COMMODITY CHANGE FROM PAST WEEK

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

Soybeans: March quotation down 6 cents per Bu (-0.7 percent)

Soybean Meal: March quotation down $2 per ton (-0.6 percent)

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

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

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

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

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

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

COMMENTS

Soybean prices previously firmed in response to reports of drought in areas of Brazil. Approximately 20 percent of the crop projected to be 117.2 million metric tons is at risk

There is renewed optimism concerning the outcome of the ongoing negotiations between China and the U.S. initiated at the dinner meeting during the G-20 Summit between the delegations from the U.S. and China led by their respective Presidents. The U.S. has agreed to a three-month delay ending March 31st before raising tariffs from ten percent to twenty-five percent on over $200 billion in annual imports from China. In return China has agreed to purchase an unspecified quantity of agricultural commodities in addition to energy and heavy equipment from the U.S. to offset the negative balance of payments. An initial order of 1.5 million tons was placed in December 2018, the first since June. The USDA announced on January 7th that orders have been placed for an additional 3 million tons to be shipped before September 2019. China has hinted at a six-year agreement to purchase soybeans mainly due to concern over drought in Brazil. Negotiations are apparently in progress in Beijing and Washington without any disclosure of specifics. Despite the pessimistic note sounded by Commerce Secretary Wilbur Ross during the World Economic Meeting in Davos, Switzerland, the President appeared buoyant on February 1 st during a press briefing.

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

See the WASDE posting summarizing the November 8th USDA-WASDE Report #583 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest. The January 2019 WASDE Report #584 will be delayed by the Government shutdown

Unless shipments of corn and soybeans to China resume in volume, as projected, the financial future for row-crop farmers appears bleak despite the release of two tranches amounting to $12 billion as "short-term" compensation. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. Oversupply of ethanol with the current 10 percent addition (= BTU dilution) mandate is evident from the February 1st spot price of $1.27 per gallon that has not changed materially in six weeks compared with a 2018 peak in late March of $1.60. Exports have been constrained by the retaliatory tariffs imposed by China on U.S. ethanol. Some refiners are reducing production and mothballing corn-fermentation plants.

The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. It must be recognized that the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift that keeps on giving. The mandate is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


 

Robots Trialed by Walmart

01/31/2019

Bossa Nova Robotics is supplying Walmart with units to be tested in fifty stores as a pilot program. The specific models have been programmed to roam aisles and identify and record products that appear out-of-stock. Coupled with an information system the robotic system can monitor inventory more accurately than workers with scanners. Knowing what is on the shelves is becoming more important as click-and-collect purchasing patterns are emerging.


 

Lactalis Responsible for Salmonella Infection in Infants - Again

01/31/2019

Picot AR infant formula produced by Lactalis Nutrition Sante of France is responsible for outbreaks of salmonellosis in infants. Affected product contaminated with Salmonella Poona manufactured by Spanish subsidiary, Savencia SA was responsible for infection. To date four babies have been diagnosed with salmonellosis attributed to contaminated product that has been recalled.

Powered infant milk was responsible for an extensive outbreak of Salmonella Poona in 2010. Lactalis infant formula was responsible close to 40 cases of Salmonella Agona in France but cases occurred in 80 nations to which consignments of infant formula were exported.


 

Animal Cruelty Bill Reintroduced into House

01/31/2019

Following passage by the Senate of the Preventing Animal Cruelty and Torture Act, the House has reconsidered the bill which was blocked by the former Chairman of the House Judiciary Committee. The bill would punish wanton cruelty as a federal felony offense with a penalty of up to seven years imprisonment.

Obviously the bill is intended to prevent egregious and wanton cruelty, but includes in the definition "suffocation". This may conflict with the application of carbon dioxide or foam for mass depletion of flocks in the event of a catastrophic disease. It is hoped that a suitable exemption will be incorporated into legislation before final passage.


 

Food Safety Net Services Featured in USPOULTRY Wire

01/31/2019

Food Safety Net Services was the featured allied supplier on the 29 th January edition of USPOULTRY Wire. FSNS is a leading provider of food safety technology and assays to the food and livestock industries of the U.S. emphasizing accuracy and rapid turnaround. The company operates a network of ISO-accredited laboratories offering microbiological and chemical testing services in addition to advice on quality-control in food production.

FSNS laboratories operate 24/7, staffed with trained and experienced food experts.

Further information can be obtained by clicking onto the FSNS logo on the right side of the Welcome page.


 

Resumption of U.S.-China Trade Talks

01/31/2019

A delegation led by Vice Premier Liu He commenced negotiations with U.S. counterparts on Wednesday January 30th. It is anticipated that the Chinese delegation will confirm orders for U.S. farm products and energy. The more substantial question of coercive trade practices, intellectual theft and industrial espionage have yet to be addressed. An important U.S. consideration expected to be opposed by China, relates to state subsidies for favored industries.

A successful resolution of both trade and structural issues will be required before the March 1st deadline imposed by the President. Failure to achieve consensus will result in an increase of the currentc10 percent tariff to 25 percent on approximately $200 billion in goods imported annually from China.

It is probable that if progress is made in the current round that the Presidents of the two nations will meet somewhere in southeast Asia in early March.


 

2019 Alltech Global Feed Survey

01/31/2019

The 8th annual survey conducted by Alltech confirmed that world feed production will increase by 3 percent to 1.103 billion metric tons in 2019. Data was collected from 144 countries encompassing 30,000 feed mills. The top eight nations produce 55 percent of the World's feed with the U.S. the 2nd-largest feed producing nation after China.

The Alltech Global Feed Survey assesses compound feed production and prices applying information collected by the Alltech global sales team and in partnership with local feed associations during the last quarter of 2018. Data is provided as a public service as a resource for policy makers and industry stakeholders.

A more detailed review of the feed survey will be provided in a subsequent edition of EGG-NEWS.


 

Iowa Egg Donations

01/31/2019

The Iowa Egg Council and Fareway Stores, Inc., delivered a full truckload of eggs to the Food Bank of Iowa on Wednesday, January 30th for distribution to food banks serving Iowa. The eggs will provide a wholesome source of protein for Iowans struggling with hunger throughout the state.

The donation is the result of a campaign partnering Fareway and the Iowa Egg Council during the holiday season. Customers purchasing two dozen eggs at any Iowa Fareway location, triggered an automatic donation of one dozen eggs to Iowa food banks. The campaign aimed to give back to individuals who are food insecure in the communities where Iowa egg farmers live and serve.

"We are proud of our partnership with Fareway Stores," said Kevin Stiles, Iowa Egg Council Executive Director. "Eggs are an economical protein and essential food, and we hope this donation will help further the mission of Iowa's Feeding America member food banks."


 

USDA Weekly Egg Price and Inventory Report, January 30th 2019.

01/31/2019

Due to the Federal shutdown effective midnight December 24th some data required for this report was not updated by USDA-AMS. Updated data will be posted when the USDA resumes operation.

  • Hen Numbers in Production stable at 328.2 million from January 24 th.
  • Shell Inventory Down 0.5 Percent from Previous Week.
  • USDA Midwest Benchmark Generic Prices for Extra Large and Large up by 18.3 and 18.6 Percent respectively. Mediums up by 44.4 Percent Compared to Past Week.

OVERVIEW

Prices

According to the USDA Egg Market News Reports posted on January 28 th the Midwest wholesale prices for Extra Large and Large were higher by 18.3 and 18.6 percent and Mediums were up 44.4 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.


 


48th Annual MPF Convention

01/31/2019


 

Recall of Spinach-Containing Products

01/30/2019

Whole Foods Market has issued a recall for a range of spinach and mesclun products based on possible Salmonella contamination. Whole Foods Markets along the Eastern seaboard are affected. The product originated from Satur Farms in Cutchogue, NY. Contamination was detected by public health authorities in both Florida and in New England states on routine surveillance. Affected product was incorporated into prepared paninis, salads, sandwiches and breakfast dishes favored by health-conscious consumers.


 

AEB Board Meeting Announcement

01/30/2019

The American Egg Board will hold their annual meeting over the period March 25 -27, 2019 at the Talking Stick Resort and Casino in Scottsdale, AZ. The registration deadline is Wednesday February 20th. On Monday February 25th the Executive Committee will meet at noon through 17H00.

Committee meetings will follow the breakfast on Tuesday March 26th commencing at 07H00. Additional activities include the AEB 26th Annual Golf Event in the afternoon of Tuesday March 26 th. The Chairman's Reception will take place on Tuesday evening from 17H30 to 19H30.

For further information including hotel confirmation contact Gwen Ramirez at gramirez@aeb.org


 

GrubHub Upgraded by Credit Suisse

01/30/2019

Analyst Stephen Ju of Credit Suisse has issued an upgrade on GrubHub from Neutral to Outperform. This is based on the support of six out of twenty top U.S. restaurant chains and is in anticipation of increased fourth quarter revenue and earnings. For the third quarter ending September 30 GrubHub posted a 52 percent increase in sales to $247 million compared to the corresponding quarter of FY2017. The company generated $22.7 million in net earnings. The Company claimed 16.4 million active diners and averaged 416,000 daily deliveries during the quarter. GrubHub predicted Q4 sales to be $283 to $293 range.

GrubHub closed at $80.77 on Friday January 25th but Credit Suisse forecasts a 12-month price range of $125 to $130.


 

Washed Eggs to be Permitted for Retail Sale in Mexico

01/29/2019

According to the January 29th edition of the USPEEC MondayLine, changes to Nom159 for Eggs and Egg Products were published in the Diaro Official dela Federacion (equivalent to the U.S. Federal Register).

According to the official publication, eggs intended for retail can be washed but only if refrigerated from packing to point of sale. The enforcement date in the recently published amendment was stated to be October 19th 2019.

USAPEEC in Mexico filed comments supporting the provision allowing eggs to be washed.


 

Anne Alonzo Joins the Chicago Network

01/29/2019

Anne L Alonzo, President and CEO of the American Egg Board, has been invited to join the Chicago Network, a group of women business leaders. This distinction is in recognition both to her visibility in the business and Hispanic establishments in Chicago, but also as a complement to the American Egg Board and the U.S. Egg-production industry.


 

Aspects of Clean Water Act may be Reviewed by SCOTUS

01/29/2019

The Solicitor General has filed a brief advocating that the Supreme Court should hear County of Maui v. Hawaii Wildlife Foundation.

At issue is whether pollutants if released from a point source are subject to the jurisdiction of EPA which applies the Clean Water Act. At issue is the potential for contaminants to percolate to groundwater and end up in navigable water.

The Court has yet to announce that it will hear cases relating to the Clean Water Act this term.


 

McDonald’s Experiencing Push-back from Franchisees

01/28/2019

More than 90 percent of 37,000 McDonald’s stores are owned by franchisees.  McDonald’s Corp. is embarking on a remodeling plan that will be paid for by individual owners.  A component of the plan is the installation of a service-area modernization (SAM) wall between the counter and the kitchen.  McDonald’s claims that this improvement will reduce noise and shield activities in the kitchen from customers. Franchisees complain that the expense is unnecessary and could represent a security risk.  The costs involved in erecting the SAM and other required changes are opposed by franchisees. 

During the fourth quarter of 2018, a national owners association was formed and has become active in opposing what they consider to be unnecessary expenditures.  In a strongly worded letter dated January 15th, the national owners association stated that it did not wish to pursue useless and problematic investing and to focus on improvements that will show a positive return on investment including upgrades to drive-thru areas for customer convenience. 

Self-serve kiosks have been introduced by McDonald’s.  There is a question as to whether these additions are efficient and acceptable to customers.  A number of recent experiences have confirmed that ordering using a kiosk is initially frustrating and takes longer than  communicating with a counter attendant.  In many cases there is confusion in selection of an order from an expanded menu especially when groups of customers are involved.

McDonald’s corporation and its franchisees must establish a measure of harmony and cooperation unless customer satisfaction and sales will be impacted.  The experience of Subway is illustrative in this respect.


 

Purina Fed Eggs

01/25/2019


https://www.instagram.com/p/BsoBga5FLEI/


 

Egg Consumption Associated with Lower Risk of Type-2 Diabetes

01/25/2019

A study conducted in Finland determined that middle-aged men consuming one egg per day had a lower incidence of Type 2 diabetes compared with a comparison group consuming two eggs per week. The Kuopio Ischemic Heart Disease Study followed subjects for 19 years. The investigation demonstrated that higher levels of serum tyrosine predicted the development of Type 2 diabetes and was associated with the low-egg intake group.


 

FortiShell® Increases Shell Breaking-Strength

01/25/2019

A study conducted at Virginia Tech and sponsored by PMI Nutritional Additives demonstrated the beneficial effect of a commercial supplement FortiShell® on the breaking strength of eggs from cage-housed W-36 hens. FortiShell® comprises bioavailable minerals, vitamins and medium-chain fatty acids developed by PMI Nutritional Additives, a subsidiary of Land O' Lakes.

The supplement was included in diets commencing 46, 54 or 58 weeks of age. Non-supplemented hens served as controls.

Fort1Shell® supplementation was associated with higher hen-housed egg production (77.8 v. 74.6 percent). Egg weights of hens were larger in the group receiving FortiShell® supplement commencing at 54 weeks compared to the controls and when the supplement was initiated at 58 weeks. The significant finding was an improvement in egg-shell breaking strength. This parameter increased by 5.6 percent in the supplemented hens for all ages. It was demonstrated that the earlier FortiShell® supplementation commenced, the greater the benefits.


 

U.K. Sainsbury-Asda Merger to be Scrutinized

01/25/2019

As in the U.S., mergers in the U.K. and the E.U. are subject to review by regulatory authorities. The proposed deal to combine Sainsbury with Asda, a subsidiary of Walmart, Inc., will be reviewed by the U.K. Competition and Markets Authority (CMA). The merger announced in 2018 would create a supermarket giant with a 31 percent share of the grocery market and employ 330,000. This would place the consortium above current market leader Tesco with a 27.8 percent share and Morrison's with 10.6 percent. Deep discounters Aldi and Lidl with a combined share of 12.8 percent would be pivotal to the CMA evaluation of whether the Sainsbury-Asda merger would be detrimental to consumers. Currently there are 463 local areas in the U.K. where Sainsbury and Asda stores overlap. This might suggest higher prices with elimination of competition if stores were closed post-merger.

 

Sainsbury promised in the proposal to the CMA to reduce retail prices by 10 percent across the board. There is concern that even if the reduction were to be achieved, the anticipated lower retail prices would be effectively supported by small suppliers. This is based on the fact that the combination of Sainsbury and Asda would have less buying power over companies such as Proctor and Gamble and Coca Cola than relatively smaller manufacturers and packers.

If the CMA demand divestment of many stores, the deal may become non-viable. Disposal of large supermarkets would be difficult given the current U.K. economic climate and the move towards smaller local stores. This trend has favored the rise of Aldi and Lidl offering a limited range, house brands and significantly lower prices than conventional supermarkets.

Walmart is naturally eager to relinquish control of Asda and become a minority shareholder in a hopefully more profitable business. If the CMA axes the deal, Walmart will have to go back to square one and seek another merger partner or devise a strategy appropriate to the highly competitive U.K. market.


 




























































































































































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