Editorial

 

ABC News Trial

Jun 21, 2017

    

On March 7, 2012 ABC News a subsidiary of Walt Disney Company broadcast a program disparaging lean finely textured beef (LFTB) which was characterized as “pink slime”. 

The origin of the allegations was Gerald Zirstein, an ex-USDA employee who provided distorted information to ABC producer, Jim Avila who mischaracterized the product as “beef trimmings used for dog food spread with ammonia for safety.”*

It is a matter of record that LFTB is highly nutritious and a valuable component of ground beef, since it is low in fat content having been centrifuged.

  

The allegations made by ABC in their program resulted directly in widespread customer and consumer rejection of LFTB.  The plaintiff in the case, Beef Products Inc. was forced to close four plants within weeks of the program airing and laid off over 700 workers.  Sustainability also suffered since the product could no longer be commercially incorporated into ground beef.

ABC claim that none of the information presented was knowingly incorrect and that they were within their 1st Amendment rights in airing the “expose”. Although ABC claim that at no stage did their program imply that LFTB was unsafe, the impressions created by the program resulted in almost complete rejection of the product and termination of the operations of Beef Products.

The Company is claiming $1.9 million in direct damages and if the suit is successful could ultimately receive punitive damages of $6 million. 

The case will be closely followed by a Subway which has been exposed to a similar situation arising from sensational and incorrect reporting by the Canadian Broadcasting Corporation. A popular program aired a segment claiming that chicken used in sandwiches contained an excessive quantity of vegetable-origin filler.  This contention was later disproved by independent laboratory investigations.

The Beef Products v ABC case has profound implications for the food industry since any mainstream media organization could, in the interest of ratings, distort fact and wreak havoc on either a producer or a segment of our industry.  The present case will probably not result in a definitive ending since irrespective of the outcome, lengthy appeals are anticipated.

It is hoped that in the end, reason will prevail and a judgment in favor of the Plaintiff will serve to motivate self-restraint and adherence to scientific fact and truth all to the benefit of producers and customers.

*See series of postings from March 27th 2017 onwards by entering “LFTB” in the SEARCH block.

Poultry Industry News

 

Arkansas Legislators Favor More Agricultural Trade with Cuba

Jun 23, 2017

    

Senator John Boozman (R-AR) and Rick Crawford (R-AR) published a plea to continue agricultural trade with Cuba. All of the U.S. poultry associations including USAPEEC are lobbying for more liberal trade relations with Cuba.

Currently the U.S. has a limited share of the foods imported by Cuba amounting to $2.4 billion annually. Beneficiaries of the trade include Brazil, China, Vietnam and New Zealand. Companies in Cuba can only purchase U.S. food products on a cash basis. Dr. Sonny Perdue Secretary of Agriculture has enthusiastically supported trade based on credit for Cuba as expressed in his confirmation hearing.

  

The justification for improving agricultural exports to Cuba relates to direct on-farm employment amounting to 2.6 million Americans and an additional 8.4 million jobs tied to agriculture. To deny Cuba benefits extended to other nations based on sentiment and the desire to reverse policies of the previous Administration is simply self-defeating.

Senator Boozman and Representative Crawford note “The Trump Administration should accomplish a bilateral trade deal that supplies the Cuban people with high-quality food and all of this can be done while supporting rural American jobs – an undeniable victory for the Trump White House.”

Currently there are two Bills in Congress relating to agricultural exports. These include the Cuba Agricultural Exports Act in the House and the Agricultural Export Expansion Act in the Senate. Both Bills would remove credit restrictions and allow private financing of exports.

There is growing sentiment in Congress to adopt a realistic and business-oriented approach to Cuba leaving the philosophical and political considerations to the establishment and diplomats.

 

Federal Veterinarians Urge Appointment of Additional Personnel

Jun 23, 2017

    

The National Association of Federal Veterinarians has proposed a resolution to the House of Delegates of the American Veterinary Medical Association urging the Department of Agriculture to recruit and retain more veterinarians for both meat inspection and response to outbreaks of disease.

The Association noted that slaughter plants must be under the direct supervision of a public health veterinarian to maintain food safety. In addition remuneration and incentives offered to Supervisory Public Health Veterinarians should be improved to be competitive and to compensate for additional expertise acquired to implement new inspection systems. The Federal Veterinarians are also requesting additional time for continuing education, training and administrative support.

  

While the demands of USDA-FSIS veterinarians and meat inspectors might be construed as promoting job security, the activities of their counterparts in APHIS is without question. Events in 2015 following the outbreak of highly pathogenic avian influenza and the response to porcine epidemic diarrhea demonstrate the need for trained personnel including those attaining certification by appropriate veterinary specialty boards. The resolution forwarded to the AVMA notes “The USDA veterinary workforce is not robust enough to adequately respond to major animal disease outbreaks and the severe repercussions of an event.”

 

Costco Broiler Plant Groundbreaking

Jun 23, 2017

    

According to a June 20th article in the Omaha World-Herald, Nebraska Governor Pete Ricketts attended the ground-breaking ceremony for the Costco processing plant located near Fremont.

The project will provide rotisserie birds for Costco and is investing in a hatchery, feed mill and processing plant requiring a $400 million expenditure. Ultimately the complex will produce two million birds per week supplying approximately one third of the rotisserie chicken sold in Costco’s 732 warehouse locations nationwide.

  

Jonathan Luz, Director of Strategic Planning and Infrastructure Development for Costco stated              “It makes sense for Costco to have more control over its own supply.” He added “Our need is abnormally regular and the complex will be able to operate a plant at full efficiency with predictable demand for utilities and schedules for employees.”

The complex is expected to produce three-pound live weight broilers in April 2019.

 

JBS S.A. to Review Sale of Strategic Assets

Jun 23, 2017

    

Shortly after the news of the admission by JBS Chairman Joesley Batista that the Company had paid over $115 million in bribes to politicians, a statement was issued that sale of assets was not contemplated. This was followed shortly after by the sale of beef production assets in Argentina, Paraguay and Uruguay to the Minerva Group. This sale is however under suspension following a restraining order issued by a Federal judge although JBS has appealed the ruling.

  

 Most recently, the company announced that Moy Park will be sold after being purchased in 2015 for $1.5 billion. Moy Park is a large producer employing over 9,000 in Craigavon County, Armagh in Northern Ireland. Potential acquirers have not yet surfaced but the enterprise would be a valuable addition to Cargill International Poultry Holdings. A decided negative is represented by the location since export to the E.U. after the United Kingdom leaves the Union will create problems for export.

JBS has agreed with prosecutors to pay a fine of $3 billion over a 25 year period. It would appear that the company could easily make annual payments over an extended period given positive cash flow. It is possible however that the negative response of financial institutions to extend money to JBS which is highly geared will necessitate sale of assets.

The newly constituted Board of Directors is undertaking a strategic asset review and may also dispose of the Five Rivers Cattle Feeding operation in the U.S.

JBS grew rapidly by acquisition using sweetheart loans from pension funds and the National Development Bank motivated by illegal payments to officials and politicians. Revelation of the events of the past two years will inevitably result in an unraveling of the enterprise.

 

Powerful Testimony by General Counsel for Beef Products Inc.

Jun 23, 2017

    

On the 11th day of the trial in which Beef Products Incorporated (BPI)is suing the ABC Network regarding the allegations that lean finely textured beef (LFTB) was a “filler” Rich Jochum, Corporate Counsel provided testimony demonstrating bias by the network.

When contacted by ABC, Jochum provided information on LFTB none of which was incorporated into the first program aired as “Jamie Oliver’s Food Revolution.

  

A 17-year veteran of BPI, Jochum attempted crisis control, hosting a website and an informational video on YouTube. Jochum provided evidence that the information concerning the manufacture of LFTB was ignored by ABC. The inference was that the network had already decided on the scope of their program and were indifferent to facts concerning the product. If accepted by the jury, the intransigence of ABC and the producers of the program which unjustly defamed the product, could result in punitive damages.

Evidence was presented that before the first news report March 7, 2012, the company was selling approximately 5 million pounds of LFTB each week. After extensive negative publicity and characterizing the product as “pink slime” sales dropped to 1.2 million pounds resulting in closure of three plants with displacement of  workers.

 

Trilateral Meeting of NAFTA Agricultural Ministers

Jun 23, 2017

    

The Canadian Minister of Agriculture and Agri-Food Lawrence MacAulay; Mexican Secretary of Agriculture, Livestock, Rural Development, Fisheries and Food Jose Calzada; and United States Secretary of Agriculture Sonny Perdue issued the following statement at the conclusion of their first trilateral meetings in Savannah, GA, June 19-20, 2017.

Our three nations are connected not only geographically, but through our deeply integrated agricultural markets. Our trading relationship is vital to the economies - and the people - of our respective countries. We are working together to support and create good jobs in all three countries. We share a commitment to keeping our markets open and transparent so that trade can continue to grow. That mutual commitment was reaffirmed in our discussions this week.

  

Sonny Perdue

“The North American Free Trade Agreement has greatly helped our respective agricultural sectors as well as our consumers who have benefitted from an ever-growing variety of safe, affordable food products all year around. While even the best trading partnerships face challenges from time to time, our agricultural differences are relatively few in the context of the $85 billion in agricultural trade that flows between our three nations each year.

“Over the years, the United States, Mexico, and Canada have also worked collaboratively to protect plant and animal health, conduct joint research, and share best practices. These efforts have helped to eradicate several pests and diseases from the region, differentiating us from the rest of the world. Our three countries remain committed to continued collaboration to ensure a safe and reliable regional supply chain that makes the North American agriculture sector more competitive.

“Our visit to Georgia fostered the mutual understanding and personal relationships that will help North American agriculture thrive, improve our regional partnership and collaboration, and strengthen our trading relationship.

 

Hickman’s Family Farms Certified by American Humane

Jun 23, 2017

 

    

Hickman’s Family Farms has received accreditation from the American Humane Certified Program.

To qualify as an American Humane Certified producer, Hickman's Family Farms had to meet the program's rigorous requirements, which include meeting science-based standards covering all aspects of operation from adequate space to appropriate temperature, air quality, nutrition and health programs.

In addition, they voluntarily agreed to undergo rigorous annual audits to ensure maintenance of standards.

  

Robin Ganzert

"We believe that all animals–those in our homes, those in service to our country, and those on our nation's farms and ranches–deserve humane treatment," said Dr. Robin Ganzert, president and CEO of American Humane. "By becoming an American Humane Certified producer, Hickman's Family Farms helps assure their consumers that the food on their plates was raised humanely and under the science- and evidence-based protections established by American Humane”.

"Our family is now celebrating the 73rd year providing fresh eggs to our customers," said Clint Hickman, vice president of Hickman's Family Farms. "Our Grandmother Nell Hickman started our business with the goal of taking care of her hens as she took care of her family. We are very happy to earn the American Humane Certified certification. We view this as another step in verifying that the care and welfare of our hens is of utmost importance to not only our customers, but also to our family, employees and the communities in which we live."

 

NCC Statement on Possible Importation of Chicken from China

Jun 23, 2017

    

Mike Brown, president of the National Chicken Council issued a statement on Friday June 16th concerning the proposed importation of chicken from China:-

 NCC and our members support free and fair trade. In order to be effective, free trade must operate as a two-way street and any country that is able to meet the stringent food safety standards set by the USDA should be able to compete in the marketplace free of protectionism and artificial trade barriers.

  

The NCC does not believe that the decision to allow importation of chicken from China will have any material impact given the prediction of low volume. The NCC statement continued:-

 FSIS still must take a number of steps, the first of which will be the publishing of the proposed Rule in the Federal Register along with a comment period before it can make a final determination as to whether China is equivalent and thus eligible to export poultry to the United States that was slaughtered and cooked in Chinese establishments.

It is difficult to envisage how export of chicken from China to the U.S. could occur given the frequent reports of outbreaks of avian influenza with diverse strains which suggests an endemic status. This would disqualify chicken raised and slaughtered in other than a disease-free Region as defined by the OIE.

China has not imported chicken from the U.S. since the beginning of 2015 due to claimed concerns over avian influenza. China has never recognized the World Organization for Animal Health principle of Regionalization. Procedures in China to lift bans are circuitous and non-transparent. This effectively result in interminable delays, deliberately imposed in anticipation of a new cycle of bans should isolation of a low-pathogenicity strain in wild birds or limited outbreak in a non-commercial backyard farm be identified by surveillance. 

 

Food Safety Net Services Announces New Personnel and Executive Promotions

Jun 23, 2017

    

In a June 19th press release Food Safety Net Services (FSNS), announced six executive management promotions and the appointment of Joel Haag as Vice President of Purchasing and Distribution.

 

Lori Ernst, Jeff Carpenter and Randal Garrett have been promoted to Senior Vice Presidents. John W Bellinger, CEO, stated “Lori, Jeff and Randal are the leaders of FSNS and we are so fortunate to have each of them directing the future of our company,” Lori Ernst will manage FSNS Certification and Auditing. Jeff Carpenter will be responsible for Strategic Alliances. And Randal Garrett will manage Operations.

Additional promotions include Tim Santy advancing to Vice President of Operations, Scott Edwardsen will move to Vice President of IT, and Gennadiy Liberzon will become Vice President of Accounting and Finance. “These three individuals have a combined 24 years of service with FSNS,” said Bellinger. “Their contributions have been instrumental in the growth of the company, and their expertise in the food safety industry is invaluable.”

Joel Haag, an industry veteran with over 20 years purchasing experience will serve as Vice President of Purchasing and Distribution. Joel will enable the company to continue to manage costs and distribution strategies.

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

 

Status of 2017 Corn and Soybean Crops

Jun 23, 2017

    

The USDA Crop Progress Report released Monday June 19th  recorded progress in corn and soybean planting and emergence similar to 2016 as expressed in the table below:-

  

                                                                            WEEK ENDING

Crop

June 11th

June 18th

5-Year Average

Corn Planted

         100

         100

          100

Corn Emerged

           94

           98

            98

Soybeans planted

           92

           96

            93

Soybeans emerged

           77                          

           89

            84

                   

Crop

V. Poor

Poor

Fair

Good

Excellent

Corn Condition

     2         

   6

 25

  57

     10

Soybean Condition

     1

   5

 28

  59

       9

 

Parameter

v. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

8

18

68

 6

                              Past Year

5

21

65

 9

Subsoil moisture:  Past Week

5

   17

72

 6

                              Past Year

4

18

70

 8

 
 

CME Prices

Jun 23, 2017

    

On Friday June 16th close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded, together with the bracketed value for the previous week.

   

COMMODITY

 

Corn (cents per bushel)

July ’17   384  (389)    

Sept. ’17  342  (397)  

Soybeans (cents per bushel)

July ’17   940  (943)    

Sept. ’17   946 (964)  

Soybean meal ($per ton)

July ’17   301  (308)

Sept’17    305  (305) 

 

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

  • Corn:                     July quotation down by 5 cents.                (-1.2 percent)
  • Soybeans:            July quotation down by 3 cents                 (-0.3 percent)
  • Soybean Meal:   July quotation down by $7/ton                  (-2.2 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

 

See posting on the May edition of CHICK-CITE (enter WASD in SEARCH block) summarizing the May 10th USDA-WASDE Report #565, for a review of price projections and quantities of commodities produced during the 2016-17 season.

 

USDA - WASDE FORECAST #566, June 9th 2017

Jun 23, 2017

    

Overview

The June 9th 2017 USDA WASDE projections for the 2017 corn and soybean crops reflected planting intentions and yields. Harvest areas for corn and soybeans were unchanged from May at 82.4 million acres (86.7 million in 2016) and 88.6 million acres (82.7 million in 2016) respectively.

The USDA projected corn and soybean yields are 170.7 bushels per acre (174.6 bushels in 2016) and 48.0 bushels per acre (52.1 bushels in 2016). Ending stock for corn was unchanged from May and projected to be 2,110 million bushels (2,320 million in April WASDE Report) and for soybeans up 15 million bushels to 495 million bushels (445 million in April 2017 WASDE Report).

  

Corn

The projection of the corn harvest was unchanged from May attaining 14,065 million bushels, down 7.1 percent from 2016. None of the major categories of use were appreciably changed. The projected USDA range in farm price incorporated an 80 cent per bushel spread as is normal for a mid-year report with many uncertainties relating to weather ahead. Price was unchanged from the May WASDE Report at 300 to 380 cents per bushel. At noon on June 9th, CME quotations for July and September 2017 corn were 389 cents and 372 cents per bushel respectively.

The RFS for 2016 was belatedly determined to be 18.11 billion gallons by the EPA on November 30th 2015 (See Editorial in CHICK-CITE). The value was four percent higher than the May 2015 proposal of 17.4 billion gallons. The RFS declared by the EPA is currently the subject of litigation. It is doubtful that the incoming Administration will alter existing RFS levels given support of the Midwest agricultural sector to the 2016 election outcome and subsequently reinforced by Administration assurances to Corn-State legislators in early January 2017.

A wild card will be the influence of the incoming EPA Administrator and the Secretary of Energy, both of whom favor the oil and refining industries of their home states. Both officials have historically opposed the RFS. Business associates of the President-elect have recently commented negatively on the system of Renewable Identification Numbers (RINs) which affect the profitability of many domestic refineries. For 2017, USDA raised diversion of corn to ethanol by 50 million bushels to 5,500 million bushels or 33.5 percent of the harvest.

  
 

Weekly Broiler Production and Prices

Jun 21, 2017

    

The June 14th 2017 edition of the USDA Broiler Hatchery Report confirmed that 176 million day-old chicks were placed among the 19 major broiler-producing states during the week ending June 10th, one percent more than the corresponding week in 2016 Total chick placements for the U.S. amounted to 183 million. Average hatchability was 83 percent for eggs set three weeks earlier.

Cumulative placements for the period January 7th through June 10th amounted to 4.15 billion chicks, two percent more than the corresponding period in 2016. The USDA Livestock, Dairy and Poultry Outlook issued on April 17th documented a one percent difference in chicks hatched and the number placed for broiler grow-out.

  

For the processing week ending June 16th 164.89 million broilers were processed at an average live weight of 2.80 kg or 6.15 lbs. (2.77 kg. last week) and a yield of 76.0 percent. The number of broilers processed was 1.8 percent more than the corresponding week in 2016. Processed (RTC) broiler production attained 350,352 metric tons, 2.8 percent more than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 8,606,449 metric tons YTD, 0.8 percent more than YTD 2016.

  
 

Weekly Turkey Production and Prices

Jun 21, 2017

    

Poult Production and Placement:

The June 15th edition of the USDA Turkey Hatchery Report, issued monthly, documented 28.8 million eggs in incubators on June 1st 2017 (29.0 million eggs on May 1st) down 4.3 percent from June 1st 2016. A total of 24.1 million poults were hatched in May 2017 (23.3 million in April) down two percent from April 2016.

  

A total of 22.9 million poults were placed on farms in the U.S. in May 2017, down two percent from May 2016. This suggests disposal of 9.1 percent of hen poults hatched during May or 4.6 percent of the total hatch.

For the period January through May 2017, 121.70 million poults were hatched and 113.57 million were placed. This suggests disposal of 8.33 million hen poults over five months representing 6.8 percent of the total hatch or 13.6 percent of hen poults hatched.

  
 

U.S. Approval for Merger of Dow with DuPont

Jun 20, 2017

    

The Antitrust Division of the U.S. Department of Justice (DOJ) has approved the merger between the Dow Chemical Company and DuPont Inc.

Andrew Liveris, Chairman and CEO of Dow stated “With today’s DOJ clearance, we have taken a significant step forward in bringing together these two iconic enterprises.”

  

Ed Breen, Chair and CEO of DuPont commented “With this review completed we are on track to close our pro-competitive merger in a manner that maintains the strategic logic and value creation potential of the transaction.”

To comply with EU approval, DuPont will divest part of its crop protection portfolio and Dow will divest copolymers and ionomers businesses.

It is anticipated that the merged companies will generate cost synergies approaching $3 billion.

The U.S. Antitrust approval follows similar clearances in the EU, Brazil and China.

 

Senior USDA Appointments

Jun 20, 2017

    

Secretary of Agriculture Dr. Sonny Perdue has announced the appointment of three career USDA administrators to the following positions:-

·         Jason Hafemeister will be the Acting Deputy Undersecretary for Trade and Foreign Agricultural Affairs. He has extensive experience as a negotiator on agriculture for the World Trade Organization (WTO) including the accession of  China.

  

Haefemeister  holds a baccalaureate degree from the University of California, a Master’s degree from the University of California at San Diego and a law degree from Georgetown University.

·         Dr. Robert Johansson will serve as the Acting Deputy Undersecretary for Farm Production and Conservation while remaining as the USDA Chief Economist. Dr. Johansson received a baccalaureate degree in Economics from Northwestern University and the Masters and Doctoral Degrees from the University of Minnesota. He served as a Peace Corps volunteer and extension agent in African countries from 1990 to 1995. He has conducted extensive research on biofuels policy, water quality, regulatory economics, food security and modeling of agricultural systems.

·         Dan Jiron will serve as Acting Deputy Undersecretary for Natural Resources and the Environment. He was previously Associate Chief of the Forest Service and is a 29-year veteran of public service. He holds a Bachelor’s degree from Colorado State University and a Master’s Degree from Regis University of Denver.

The nominees for the three Undersecretary positions should not experience difficulties in their confirmation hearings by the U.S. Senate 

 

The U.K. Prevalence Rate for Campylobacter on Broiler Skin

Jun 20, 2017

    

A survey conducted by the U.K. Food Standards Agency determined that 48.8 percent of broilers purchased at retail yielded Campylobacter spp. This compares with 50 percent of broilers sampled from January through March 2016. Despite pre-harvest attempts to reduce levels of Campylobacter, contamination remains at a high level. Differences of 10 percent in successive annual sampling periods denotes inconsequential variation.

  

The epidemiology of Campylobacter infection does not parallel that of Salmonella. Flocks are either all positive or completely negative at the time of delivery to a plant.

Producers in the U.K. may reduce Campylobacter contamination on whole carcasses by following U.S. practice involving immersion chilling in the presence of 50 ppm chlorine. This modality is disallowed in the EU.

The chairman of the Industry Committee advising the FSA stated that “These results give us a clear picture of the positive direction in which we are heading and help us measure the impact of interventions that are being used to reduce contamination” appears unfounded by the data revealed in this survey.

 

 

Corn Production in Brazil Higher

Jun 20, 2017

    

USDA-FAS GAIN report BR1710 released June 5th forecasts corn production for the 2017/2018 season in Brazil. The latest projection which is lower than the USDA official forecast in March estimates total corn production for the two crops as 3,537 million bushels. Twenty eight percent will be exported. Yields are low at 80 bushels per acre compared to the U.S. at 170 bushels per acre.

  

Prices at the elevator in Mato Grosso state will range from $1.75/bushel to $2.41/bushel. Government support programs include:

·         Premium for the product outflow program. When price drops to $2.18/bushel the government pays the difference between the prevailing market price and the minimum price of the product to the buyer.

·         Equalization premium paid to the producer.  A premium is granted to farmers or cooperatives that sell corn product. Minimum price is again $2.18/bushel.

·         Contracts option. A futures option is offered through the Government of Brazil to producers and cooperatives to protect against falling prices. The Government will make available $95 million to purchase up to 1 million metric tons of corn with a minimum price for future sales of $2.36/bushel.

Planting for the 2017/2018 corn production cycle will begin in September which will yield one third of the total crop. A second “safrinha” crop is planted after the soybean harvest in late February or March 2018. Yield is strongly dependent on rains since the dry season starts in May.

(SMS 963-17 June 21st 2017)  Brazil flag and field of corn image

 

USAPEEC Officers Elected

Jun 20, 2017

    

Members of the USA Poultry and Egg Export Council elected officers at the annual meeting held in Cancun, Mexico.

Mack Killebrew Vice President of International Sales at Tyson Foods was elected Chairman of the Board succeeding Steve Monroe, Manager of Exports Sales for Sanderson Farms. The remainder of the Executive Committee comprises:

  

·         Butch Johnson, Director of Globex International as First Vice-Chairman.

·         Ryan Downes, Sales Manager at Farbest Foods as Second Vice-Chairman

·         Joel Coleman, Vice President and General Manager of International Commodities Sales at Butterball was re-elected Secretary/Treasurer.

·         Mark Barrett, Vice President of Limax Foods, At-large member.

·         Chaz Wilson, COO of Grove Services, Member At-large.

·         Scott Chapman, Vice President of Industry Relations at Lineage Logistics, Associate Member At-large.

·         Gary Berg, District 13 Director at the Illinois Soybean Association, Commodity Member At-large.

The Board of USAPEEC will comprise 30 members and will set policy for the organization.

Challenges facing USAPEEC in the coming year include lobbying for NAFTA and bilateral free- trade agreements, given failure of the Trans-Pacific Partnership Agreement.

The U.S. broiler industry exported 3.7 million metric tons of chicken products valued at $4.6 billion to more than 100 countries in the past year.

 

Restrictions on Trade with Cuba Considered Regressive

Jun 20, 2017

    

On Friday, June 16th, President Donald J. Trump announced that he will reverse the policies towards Cuba introduced by the previous Administration. A component of the new policy will involve a ban on U.S. companies doing business with Cuban military-owned enterprises. Given the economic structure of the island nation, this would disqualify over 70 percent of current foreign trade. Among other entities, the Mariel Container Terminal and the Mariel Special Economic Development Zone are owned by a company that falls within the scope of the ban. The status of agreements between U.S. ports and the Mariel Container Terminal has yet to be defined.

  

The proposed restrictions have been roundly condemned by the U.S. Chamber of Commerce warning that limiting trade will be disruptive to American interests. Effectively changes in credit terms and other restrictions will limit possibilities for positive change and simply allow other nations to supplant the U.S.

During the first five months of 2017, Cuba was the second largest export destination for U.S. broiler meat with 63,629 metric tons shipped at a value of $42.2 million. There is considerable potential to export turkey meat and also egg products to Cuba.

The move will in no way enhance national security and will be detrimental to trade on which jobs depend.  

 

NPD Group Reports on Restaurant Traffic and Spending

Jun 20, 2017

    

The NPD Group reported that consumer spending at restaurant increased by 1.3 percent and visits to restaurants and food service outlets were steady during the first quarter of 2017 compared to the corresponding quarter in 2016. 

The NPD Group CREST® Food Service Research Unit reported a one percent increase in morning meals and a two percent greater use of discount and deal offers.  Quick service restaurant visits grew by three percent attributed to “unit expansion” according to NPD.

  

Visits to casual dining restaurants fell by four percent and to the midscale/family dining category by three percent.  Dinner traffic declined by two percent but lunch traffic was flat during the first quarter, an improvement over successive declines over previous quarters.  The trend towards working at home and shopping online may be contributing to the lower traffic during the lunch period.

Warren Solochek president of NDP Group’s Foodservice Practice stated, “Although consumers’ attitudes and behaviors are shifting, the reasons that they choose foodservice remain the same — convenience, quality food, value, and the experience.”    

 

JBS Appoints Compliance Officer

Jun 20, 2017

    

In an attempt to restore confidence among financial regulators in Brazil, the Board of Directors of JBS has appointed Marcelo Proenca, a professor of law at the University of Sao Paulo as Global Compliance Head reporting directly to the Board

In a press release issued by JBS, he stated “My goal is to improve the compliance program by making it a model for the market with full internal and external controls which I am confident will ensure lasting success for Company which will evolve greatly in building trust through reputation with stakeholders and in particular with employees, market and society.”

  

Concurrently the company has commissioned White and Case, a legal firm to implement a compliance review and  to develop standards to the satisfaction of the Governing Committee of the Board.

In a separate but related announcement Joesley Batista has resigned from the Board of Pilgrim’s Pride. The cascade of press releases confirming withdrawal of Joseley and his brother from apparent positions of leadership are in all probability cosmetic. It is hard to believe that the Batista family would actually relinquish control of their vast enterprise. Even if not directly involved there will be a sentiment of “what would they decide” in any given strategic or operational situation.

Shane Commentary

 

AI Strain H7N9 Has Pandemic Potential

Jun 21, 2017

    

A recent study has concluded that if three point mutations occurred simultaneously in the avian influenza strain H7N9 now circulating in China and responsible for morality among consumers, the strain could emerge as the next pandemic. Studies conducted at the Scripps Research Institute demonstrated that changes in the H7 hemagglutinin could create an affinity for human cells. Although individual point mutations can occur, the probability of three simultaneous changes in the genome are unlikely.

  

To date, the infection has resulted in 779 cases in China over two years with a fatality rate of approximately 40 percent. The H7N9 virus does not however spread from person to person. Infections are acquired by close contact with infected poultry, mainly through the wet market system.

Scientists involved in influenza epidemiology have recommended continued surveillance. A recent mutation resulted in the H7N9 virus demonstrating pathogenicity for chickens. Since the problem is essentially confined to China and their wet markets system, the Nation has an obligation to humanity to control and hopefully eradicate infection. There is an indication that an inactivated homologous vaccine will soon be deployed.

 In the first instance, authorities in China owe their own population a reasonable degree of protection which can only be obtained by displacing the wet market system of distribution which is an anachronism in the context of the 21st Century.

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Dr. Simon M. Shane
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