Editorial

 

AMERICAN CHEMISTRY COUNCIL CRITICAL OF IARC

Mar 22, 2017

    

CHICK-CITE has repeatedly commented on the dubious value of monographs issued by the International Agency for Research on Cancer, a body administered by the World Health Organization.  In recent months, IARC has created conflicts over classifying glyphosate as a potentially carcinogenic compound.  This claim was subsequently retracted based on strenuous opposition from reputable universities, toxicologists and specialists in mutagenicity.

  

Cal Dooley President and CEO of the American Chemistry Council (ACC) stated, “ The IARC monographs program has been responsible for countless misleading headlines about the safety of the food we eat, the jobs we do and the products we use in our daily lives”.  She added, “IARC work suffers from persistent scientific and processed deficiencies that result in public confusion and misinformed policy making”.  The American Chemistry Council is urging the World Health Organization to reform the IARC. The ACC considers the IARC to be lax in transparency and considerations such as weighing scientific evidence, thereby distorting public policy.

The U.S. Congress has requested documents relating to the preparation of IARC monographs since the Agency is partly funded by an allocation from the U.S. National Institutes of Health.

   

Poultry Industry News

 

Weekly Broiler Production and Prices

Mar 22, 2017

    

The March 15th 2017 edition of the USDA Broiler Hatchery Report confirmed that 174 million day-old chicks were placed among the 19 major broiler-producing states during the week ending March 11th, two percent more than the corresponding week in 2016 Total chick placements for the U.S. amounted to 181 million. Average hatchability was 83 percent for eggs set three weeks earlier. Cumulative placements for the period January 7th through March 11th amounted to 1.79 billion chicks, one percent more than the corresponding period in 2016.

  

For the processing week ending March 11th 159.741 million broilers were processed at an average live weight of 2.80 kg (2.80 kg. last week) and a yield of 76.0 percent. The number of broilers processed was 1.7 percent more than the corresponding week in 2016. Processed (RTC) broiler production attained 336,066 metric tons, 0.5 percent more than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 3,391,101 metric tons YTD, 0.5 percent more than YTD 2016.

The USDA Southern States (SS) benchmark prices in $ per kg. as reflected in successive weekly editions of the Broiler Market News Report will be posted as the Georgia Dock benchmark has been terminated.

   
 

Weekly Turkey Production and Prices

Mar 22, 2017

    

 The March 16 16th edition of the USDA Turkey Hatchery Report, issued monthly, documented 29.3 million eggs in incubators on March 1st 2017, up 6 percent from March 1st 2016. A total of 23.9 million poults were hatched in February 2017, up 9 percent from February 2016. A total of 22.6 million poults were placed on farms in the U.S. in December 2016, up 6 percent from February 2016. The relative hatch and placement values suggest disposal of 1.3 million hen poults or 5.4 percent of hatch. Poult placements through February 2017 have attained 49.3 million.

  

The March 17th edition of the USDA Turkey Market News Report (Vol 64, No. 11) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending March 11th 1.548 million young hens were slaughtered at a live weight of 7.9 kg (8.2 kg last week). During the corresponding week in 2016, 1.789 million hens were processed. Ready-to-cook hen weight for the week attained 9,907 metric tons, 12.6 percent less than the corresponding week of 2016. Dressing percentage was 80.5. Year-to-date RTC hen production has attained 100,497 metric tons, 10.5 percent less than YTD 2016.
  • For the processing week ending March 11th 2.503 million toms were slaughtered at 18.9 kg (19.1 kg last week) compared to 2.478 million toms during the previous processing week. For the corresponding week in 2016, 2.358 million toms were processed. Ready-to-cook tom weight for the past week attained 37,706 metric tons, 5.0 percent more than in the corresponding week of 2016.  Dressing percentage was 80.5.Year-to-date RTC tom production has attained 375,996 metric tons, 3.1 percent more than YTD 2016.
  • The National average frozen hen price during the past week was $2.26 per kg, 2 cents/kg below the three-year average.

   
 

Revised USDA-ERS Projected Poultry Production for 2016 and 2017.

Mar 22, 2017

    

The USDA-Economic Research Service released the projected and forecast projections for broilers and turkeys for 2016 and 2017 respectively on March 15th

Metric values are tabulated below:-  

  

Parameter

2016(actual)     

 2017(forecast)

Difference (%)

Broilers

 

 

 

Production (m. metric tons)

18.204 

18,830

+3.4

Consumption (kg per capita)

40.8

41.1

+0.3

Exports (m. metric tons)

3,021*

3.148

+4.2

Proportion of production (%)

16.3

16.7

+2.5

 

 

 

 

Turkeys

 

 

 

Production (m. metric tons)

2.536

2.719

+7.2

Consumption (kg per capita)

7.6

7.7

         +1.3

Exports (m. metric tons)

0.259*

0.286

         +10.4

Proportion of production (%)

9.5

10.3

+8.4

*Depressed by import embargos due to HPAI

Source: Livestock, Dairy and Poultry Outlook –March 15th 2017

   
 

WARNING ON OUTSIDE ACCESS FOR POULTRY

Mar 22, 2017

    

The North Carolina Department of Agriculture encourages enhanced biosecurity in a circular letter to poultry producers raising organic birds with outside access, Dr. R. Douglas Meckes, State Veterinarian issued a directive to move all poultry with outside access in to biosecure housing and to implement strict biosecurity. 

The circular urged monitoring of flocks for abnormal clinical signs or mortality which would occur following exposure to Avian Influenza virus. 

  

The Mississippi flyway encompasses western counties in North Carolina placing poultry operations in this quadrant of the State at risk of infection.

   
 

ROBERT LIGHTHIZER UNDERGOES CONFIRMATION HEARING FOR USTR POSITION.

Mar 22, 2017

    

On March 17th, Robert Lighthizer appeared before the Senate Finance Committee to be confirmed as the U.S. Trade Representative.  Lighthizer is strongly supported by food and agricultural associations including the NCC. 

He served as the Deputy U.S. Trade Representative with the rank of Ambassador during the Reagan Administration with responsibility for industry, agriculture, investment and trade policy matters. 

He has worked on international trade issues representing manufacturers, and agricultural companies focusing on facilitating international trade.

  

Robert Lighthizer

The confirmation hearing denoted the concern by Senators representing agricultural states that access for U.S. exports should be a priority.  They especially urged that negotiations on the North American Free Trade Agreement should not impact exports to either Mexico or Canada.  Additional issues such as divided responsibility between the office of the U.S. Trade Representative and the Department of Commerce should also be resolved.

 Ambassador Lighthizer responded to a question from Senator Maria Cantwell (D-WA) stating, “I expect to have full statutory authority but will work collaboratively with both the White House and the Commerce Department”.  Senator Pat Roberts (R-KS) Chairman of the Senate Agriculture Committee cautioned Lighthizer that the Administration should not reconsider country-of-origin labeling.

   
 

New Turkey Hatchery for Indiana

Mar 22, 2017

   

Select Genetics will erect a $23 million turkey hatchery in Terre Haute, IN. The facility will extend over 83,000 ft2 with projected startup in approximately one year.

The Director of the Indiana State Department of Agriculture, Ted McKinney stated “We are fortunate to have Select Genetics a leader in poultry breeding, bring their state-of-the art genetics and capabilities to the Hoosier State”.

  

 

 

Select Genetics was established following the merger of Valley of the Moon Commercial Poults and Ag Forte/Wilmar Poultry Company.

The Indiana Economic Development Corporation provided $400,000 in tax credits and $150,000 in training grants based on the projected employment of 100 salaried and hourly-paid workers.

   
 

Food Deflation Continues

Mar 22, 2017

    

The Bureau of Labor Statistics released a report on March 15th indicating that the Food at Home Index was 1.7 percent lower than in February 2016, representing the 15th consecutive month that the Index was negative on a year-over-year basis.

For a 12-month period the Consumer Price Index for the Meats, Poultry, Fish and Eggs category declined by 3.3 percent compared to the All Items category of 2.7 percent.  In contrast the Food Away from Home category increased by 2.4 percent possibly reflecting higher labor input rather than ingredients.

  

As quoted in Supermarket News, Karen Short an analyst at Barclays commented “Lingering deflation is contributing toward one of the most difficult operating environments in food retail that we can recall.  As a result the extremely challenging operating environment in the second half of 2016 has likely extended into the first quarter.” 

This has implications for supermarket earnings.

   
 

Hybrid Turkeys to Invest in New Facilities

Mar 22, 2017

 

    

In January 2015 Hybrid Turkeys, a subsidiary of Hendrix Genetics formed a strategic partnership with Ag Forte to produce eggs and poults.  In November 2016 Hybrid elected not to renew the contractual arrangement which will expire in January 2019.

Hybrid will supply breeding and commercial stock to the U.S. market directly and accordingly will invest in two hatcheries, parent farms and transportation in order to supply the North American market.

  

Dave Libertini managing director of Hybrid Turkeys noted “Obvious this is focused on creating value for customers and will build on strong partnerships with the industry.”  He added “More transparent food system with ever-reducing use of antibiotics means that the responsible production of high quality day-old turkey poults is critical.

(See the companion posting in this edition on the Terre Haute, IN. hatchery project)

   
 

Avian Influenza Cases Continue in Malaysia

Mar 22, 2017

    

Previously CHICK-CITE reported on the emergence of H5N1 avian influenza in backyard flocks in Malaysia.  Approximately 24,000 birds have been depleted from flocks in Kelantan State since the initial cases during the first week of March.  To date the virus has affected birds in 20 villages but as yet no commercial farms have been affected.  There have been no recorded cases of H5N1 infection transmitted to humans. 

  

Authorities in Malaysia attribute introduction of infection to illegal importation of fighting cocks but it is noted that migratory waterfowl are responsible for introduction of infection and dissemination of H7N6 virus in Japan and Korea.

   
 

Chipotle Ranked First Among Mexican Restaurant Chains

Mar 22, 2017

    

A study by Market Force Information has ranked Chipotle Mexican Grill first among Mexican- style chains.  The 2016 ranking included Moe’s Southwest Grill in second place and El Pollo Loco in third.  Fourth and fifth places were earned respectively by Qdoba and Taco Cabana.

Chipotle Mexican Grill was ranked first for food quality.

  

It is expected that the efforts by management to improve quality, safety and service will be reflected in improved same-store sales and hence profitability.

   
 

EU-28 Broiler Production Impacted by Avian Influenza

Mar 22, 2017

    

According to the USDA-FAS GAIN Report FR1703 dated March 1, 2017, production of broiler meat by the nations representing the EU-28 will increase by approximately one percent to 11.45 million metric tons in 2017. Domestic consumption from the EU-28 will amount to 11.06 million metric tons. The Region will be a net exporter of 390,000 metric tons down from 515,000 metric tons in 2016. 

Exports have been impacted by outbreaks of avian influenza.  Embargos have been placed by numerous nations including South Africa and the Philippines against France, the Netherlands, Germany, Poland and the UK.  In addition South Africa placed a 14 percent duty on the import of all broiler meat from the EU-28 effective December 2016.

  

Producer margins will be reduced by escalation in the cost of feed, evident in the last quarter of 2016 and extending into 2017.  High production costs in the Netherlands will reduce domestic production.

 HPAI has been diagnosed in commercial flocks in twenty nations in the EU in addition to Switzerland and Serbia.

 

 

   
 

New Menu Items to Stimulate Traffic

Mar 22, 2017

    

 

 

  

A number of quick service and casual dining restaurants have introduced new menu items: 

  • Italy features in Applebee’s and Subway offerings with the former introducing mozzarella burgers and chicken.  Subway will offer a new Italian hero featuring Genoa salami.
  • Outback Steak House will offer cubed sirloin steak and cheese fries topped with Monterey Jack cheese.
  • Wingstop has introduced Brazilian Citrus Pepper Wings
  • Schlotzsky’s is adding traditional, Cuban, and Tex-Mex brisket sandwiches
   
 

PEARSE LYONS RECEIVES AWARD

Mar 22, 2017

Pearse Lyons

    

Enda Kenny, Prime Minister (Taoiseach) of Ireland presented the Science Foundation Ireland St. Patrick’s Day Medal to Dr. Pearse Lyons, President and Founder of Alltech at an event held at the United States Institute of Peace.

The award recognizes outstanding contributions to science and to the development of the research ecosystem in Ireland.  The medal is awarded annually to a distinguished Irish scientist, engineer, or leader in technology living and working in the U.S.

In presenting the award Kenny stated, “I’m delighted to present the SFI St. Patrick’s Day Science Medal on behalf of the Science Foundation Ireland to an exceptional leader.  He has an impact on his area of expertise and has played a pivotal role in the development of research in Ireland”.

  

Born in Dundalk, Dr. Lyons established Alltech in 1980 with the aim of creating the next “green revolution”.  His company now trades in over 120 nations worldwide and employs 5,000.  Alltech operates three bioscience centers dedicated to research and education with two in the U.S. and the third in Dunboyne, Co. Meath, Ireland.

In accepting the award Dr. Lyons noted, “I’m so proud to accept the SFI St. Patrick’s’ Day Medal from the Science Foundation. While my business is global my passion for biochemistry and entrepreneurships started at home in Ireland.  Science and technology play a very important part in my Company’s success and all of our Alltech teams work to innovate every day.  We strive to put scientific research at the core of our business and to apply that research to commercial success at home and abroad. 

Almost one hundred students have graduated with their Master’s and Doctoral Degrees from Alltech facilities in Ireland in cooperation with virtually every Irish University providing a platform that was once described by the European Commissioner of Food and Safety as “primacy in science”.

   
 

EUROPEAN CHEMICALS AGENCY REPUDIATES IARC OVER GLYPHOSATE

Mar 22, 2017

    

The European Chemicals Agency announced on Wednesday 15th March that glyphosate does not cause cancer, repudiating the widely discredited classification of “potentially carcinogenic” assigned by the International Agency for Research on Cancer (IARC), a subsidiary of the World Health Organization.

 

Although this definitive finding based on evaluation of reputable research should end the speculation and pseudo-scientific postings on the web, there is still unresolved litigation.  The Wall Street Journal on Friday 17th March noted the case now under consideration by a Federal court in California alleging that Monsanto the manufacturer of glyphosate failed to warn agricultural workers of cancer risks. Despite discovery of internal E-mails which appear to implicate the company, the status of the compound as a non-carcinogen should not be in question.

The continual and ongoing criticism of Monsanto and opposition to glyphosate is inherently linked to rejection of genetic engineering (GE) of crops.  Since a majority of GE seeds are resistant to glyphosate allowing the herbicide to be applied during cultivation, banning of glyphosate would have effectively limited the advantage of GE corn and soybeans.

Following the decision of the European and Chemicals Agency, opponents of GE and avaricious lawyers will have to identify new targets.

Previous postings on glyphosate are available by entering either Monsanto glyphosate in the SEARCH feature.

   
 

LITIGATION OVER ABC “PINK SLIME” PROGRAM GOES TO COURT

Mar 22, 2017

    

The case brought by Beef Products against ABC News will be heard before a South Dakota court.  Litigation was initiated by the company which was forced to close 3 out of 4 plants producing Lean Finely Textured Beef (LFTB) in 2012 when the product was effectively destroyed by the ABC “documentary”. 

Although the case against television host and commentator, Diane Sawyer was dismissed, ABC News and journalist Jim Avila will have to defend the action.

  

According to an article by Peg Brickley in the Wednesday March 15th edition of the Wall Street Journal, ABC News alleged that they were within their 1st Amendment Rights to produce and air the program which Judge Cheryle Gering characterized as “reckless and engaged in purposeful avoidance of the truth”.  J. Erik Connolloy an attorney representing beef products was stronger in his criticism of the ABC News program alleging that it was “fake news”. 

LFTB which was included in the majority of ground beef sold in 2012 was approved by the USDA and was regarded as a nutritious source of protein.  The process by which it was manufactured including treatment with ammonia rendered the product free of pathogens and preserved amino acid availability.

The lawsuit if successful should reestablish the image of LFTB which was derided in the program using the descriptor “pink slime” Damages should provide the shareholders of the company with compensation for their losses and should act as a deterrent to media pursuing “negative-spin stories”.  The program based on the alleged anti-meat bias by Jim Avila, if repudiated by the courts might prevent some future program directed against the broiler or turkey industries.

Postings in 2012 and 2014 on the case can be accessed by entering “pink slime” or “LFTB” in the SEARCH feature.

   
 

LABORATORY-CULTURED CHICKEN MAKES DEBUT

Mar 22, 2017

    

In a demonstration in San Francisco, Memphis Meats unveiled chicken cultured from muscle cells reproduced under laboratory conditions.  The company alluded to the growth of the broiler industry over the past 50 years during which time consumption has doubled to over 90 pounds per capita.  U.S. pork consumption has remained approximately level and beef has dropped a third over the same period.

Memphis Meat estimated that the cost of production using current limited-scale technology will be in excess of $9,000 per pound.  As with many new technologies, scale-up and adoption of bioreactors could reduce cost as occurred following introduction of antibiotics during the 1950’s.

  

While we will probably not see “synthetic” beef and chicken competing directly with the natural variety, long-term commercial prospects have encouraged major animal-protein producers such as Tyson Foods and Hormel Foods to evaluate and invest in innovative startups innovating vegetable-based meat substitutes.

   
 

AUTHORITIES RAID BRAZILIAN MEAT PLANTS

Mar 22, 2017

    

According to reports by both Reuters and Bloomberg, Federal police in Brazil raided 194 premises including meat plants operated by JBS and BRF on March 17th.  More than 1,100 officers were deployed across six states in Brazil following a probe referred to as “Weak Flesh”.  Documentation and tape recordings indicated that meat packers had bribed inspectors and conspired with authorities to cover up contamination, adulteration and false export documentation.

  

 Brazil exports $5.5 billion in beef and $6.9 billion in poultry annually.  The current action by Federal authorities places the reputation of Brazil and export volume at risk. The Ministry of Agriculture closed three plants involved in the investigation and initiated a recall of products.

The raids and allegations have resulted in China and Chile imposing bans on beef from Brazil. Authorities in the EU have  stated that any company found to have engaged in illegal activity would be banned from supplying meat products.

JBS has been embroiled in a series of legal actions alleging sweetheart loans and financial improprieties.  News of the raids resulted in a sharp declined in shares of the two producers concerned with JBS dropping 11 percent and BRF 7.3 percent the following day.

Following the raids three employees from BRF and two from JBS were detained together with 28 public officials.

   
 

HEARING ON USDA SECRETARY NOMINEE SCHEDULED

Mar 22, 2017

Sonny Perdue

 

The U.S. Senate Committee on Agriculture, Nutrition and Forestry will conduct a hearing on the nomination of Dr. Sonny Perdue to the position of Secretary of the USDA on March 23rd.

Mike Brown, president of the NCC released a statement in support of the nomination, indicating “Governor Perdue has a strong record as a two-term Chief Executive of Georgia and is acquainted with a wide array of agricultural commodities from chicken and peanuts to cotton and timber”. 

The statement continued “As a Veterinarian, agribusiness owner and a Governor who established an Agriculture Advisory Committee in Georgia, he understands and appreciates the importance of American agriculture both here and abroad”.

  

   
 

CME Prices

Mar 22, 2017

    

On March 17th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded. Values for corresponding months as quoted for the previous week are indicated in parentheses:-

COMMODITY

Corn (cents per bushel)

May ’17   367     (371)

June ’17     375    

Soybeans (cents per bushel)

May ’17   1,000  (1,025)

June ’17  1,010    

Soybean meal ($per ton)

May ’17   328     (336)   

June ’17     332       

                      

   

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

  • Corn:                     May quotation up by 4 cents                    (+1.1 percent)
  • Soybeans:            May quotation up by25 cents.                  (+2.4 percent)
  • Soybean Meal:    May quotation down by $8/ton              (-2.4) 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 February 9th USDA-WASDE Report #562 for a review of price projections and quantities of commodities produced in the 2016 season.

   

Shane Commentary

 

ALL WE NEED NOW IS A TRADE WAR

Mar 22, 2017

    

An editorial in the February 10th edition of The Wall Street Journal lays out the reasons why moderation and diplomacy are required in our future relations with trading partners.

The need to reverse the adverse trade balance with our two NAFTA trading partners and to establish bilateral agreements with China, the UE, Japan and South Korea are self-evident.

  

It is ironic that states carried by President Donald J. Trump have the most too loose from disturbances in trade.  Poultry is ninth on the list in export commodities with respect to proportion of U.S. production at 17 percent with the pork exporting 23 percent of output. 

It is noted that our two NAFTA partners purchased $38 billion in agricultural produce annually.  An aggressive stance against China could invite retaliation and prejudice the $21 billion in U.S. shipments of agricultural products representing almost 15 percent of U.S. exports.

Given the high value of the U.S. Dollar, we are vulnerable to competition from nations with arable land, a suitable climate, relatively low labor costs, mechanization and other advantages.  Exports of broiler parts to Mexico and Canada are critical to maintaining balance in domestic supply and price stability.  The volume of broiler exports over the first eleven months of 2016 amounted to 2.7 million metric tons valued at $2.6 billion.  Mexico was the largest importer of broiler meat during November 2016 of 20 percent of volume and 17 percent of value.

Exports of turkey meat attained 240,000 metric tons valued at $540 million, with the top five importers of broiler parts representing 42 percent of volume.

CHICK-CITE endorses the views of The Wall Street Journal editorial which stated, “President Trump should consider reality before escalating on trade-and betraying the Farm Belt voters who are relying on him to bring growth and opportunity”.

   
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Dr. Simon M. Shane
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Industry Prices: Fri Mar 24
 Corn3.80 $/bu
 Soybeans9.77 $/bu
 Soybean Meal321.40 $/ton
 Eggs, Producer62  ¢/doz
 Eggs, Warehouse 71-74  ¢/doz 

























 
Copyright 2017 Simon M. Shane