Editorial

 

Slow-Growing Broilers

Apr 19, 2017

 

    

CHICK-CITE has previously reported on the “slow-growing broiler” movement, advanced by welfare groups essentially opposed all forms of intensive livestock production. 

The anthropomorphic principle of flocks “suffering” is offered as a condemnation of the efficiency and sustainability associated with modern production practices.

The National Chicken Council is justifiably concerned over unsubstantiated allegations raised against the industry implicating “abuse” in producing broilers weighing in excess of 7 pounds live weight.

  

Although logic and reality can be applied to defend the industry, this has little impact on the preconceived notions of a subset of consumers, influenced by distorted misinformation disseminated on the internet.

Concurrent with an increase in body weight of broilers there has been an improvement in livability, feed conversion efficiency and welfare as determined quantitatively by gait-score and other parameters. Essentially if broiler flocks are being abused and are suffering, performance across the subset of heavy broilers amounting to over 100 million each week would not be achieved.

Primary breeders have to expend considerable resources applying index selection to optimize bird growth and skeletal integrity.  Families with desired traits can be identified by a combination of phenotypic selection on a mass basis with DNA assay (single nucleotide polymorphism).

A major breakthrough in improving the integrity of legs occurred in the 1990’s when a major breeding company introduced the lixiscope to screen breeding flocks for the presence of tibial dyschondroplasia. The undesirable trait was eliminated from elite-level strains and consequently from commercial broilers.  Skeletal strength has been further advanced through sophisticated genetic selection and nutrition, contributing to improved livability and carcass quality.

The National Chicken Council is actively promoting the realities of broiler production and has established a consumer-oriented website www.chickencheck.in to provide responsible and accurate information on how U.S. broilers are reared and processed to achieve optimal quality, food safety and welfare.

   

Poultry Industry News

 

Status of 2017 Corn and Soybean Crops

Apr 21, 2017

    

The USDA Crop Progress Report released Monday April 17th recorded the start of corn planning as expressed in the table below:-

WEEK ENDING

Crop

April 9th

April 16th

5-Year Average

Corn Planted

3%

6%

9%

Soybeans Planted

N/A

N/A

 

 

Parameter

V. short

Short

Adequate

Surplus

Topsoil moisture: Past Week

                              Past Year

2

5

11

17

669

65

18

13

 

 

 

 

 

Subsoil moisture: Past Week

                              Past Year

3

4

13

15

70

71

14

10

 

Planting is delayed by heavy rains in the Midwest

   

 

   
 

CME Prices

Apr 21, 2017

    

On Thursday April 20th 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:-

 

On Thursday April 20th 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   357     (371)

July ’17     364   (378)          

Soybeans (cents per bushel)

May ’17   948     (957)

July ’17     958   (968)

Soybean meal ($per ton)

May ’17   309     (318)   

July ’17     313  (322)      

 

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

  • Corn:                     May quotation up by 11 cents                    (+3.2 percent)
  • Soybeans:            May quotation up by 15 cents.                   (+1.6 percent)
  • Soybean Meal:    May quotation up by $11/ton                    (+3.6) 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

 

See posting on the April 12th edition of CHICK-CITE summarizing the April 11th USDA-WASDE Report #564 for a review of price projections and quantities of commodities produced during the 2016-17 season.

   
 

Weekly Broiler Production and Prices

Apr 19, 2017

    

The April12th 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 April 8th, one percent more than the corresponding week in 2016 Total chick placements for the U.S. amounted to 182 million. Average hatchability was 83 percent for eggs set three weeks earlier. Cumulative placements for the period January 7th through April 8th amounted to 2.52 billion chicks, two percent more than the corresponding period in 2016.

  

For the processing week ending April 8th 161.48 million broilers were processed at an average live weight of 2.81 kg or 6.11 lbs. (2.77 kg. last week) and a yield of 76.0 percent. The number of broilers processed was 0.8 percent more than the corresponding week in 2016. Processed (RTC) broiler production attained 340,830 metric tons, 0.2 percent less than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 4,739,648 metric tons YTD, 0.6 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.  The values from the April 7th edition (Vol 64: No. 15) are tabulated with a comparison with the previous week:-

Product

USDA SS
Previous Week $/kg

USDA SS.
Past week $/kg.

Difference.

%

Ice-pack Broilers

    1.07

1.07

 unchanged

Tenderloins

    3.72

3.98

       +7.0

B/S Breasts

    2.82

2.89

       +2.5

Whole Breasts

    2.31

          2.33

       +0.9

B/S Thighs

    2.35

          2.40

       +2.1

Whole Thighs

    1.03

1.04

       +1.0

Drumsticks

    0.75

0.76

       +1.3

Leg Quarters

    0.72

0.72

 unchanged

Wings (cut)

    4.49

4.50

       +0.2

 

The USDA National Composite Weighted Wholesale price was lower by 4 cents per kg at $2.12 per kg. for the week ending April 8th compared to $1.94per kg. during the corresponding week of 2016; $2.08 for March 2017 and $2.19 for the 3-Year average. The USDA Composite benchmark price has closely approximated the 3-year average for three consecutive weeks before falling during the past week.

   
 

Weekly Turkey Production and Prices

Apr 19, 2017

    

The April 13th edition of the USDA Turkey Hatchery Report, issued monthly, documented 28.7 million eggs in incubators on April 1st 2017, down 3 percent from April 1st 2016. A total of 25.6 million poults were hatched in March 2017, up 8 percent from March 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 1.6 million hen poults or 6.7 percent of hatch. Poult placements through March 2017 attained 64.3 million.

The April 14th edition of the USDA Turkey Market News Report (Vol 64, No. 15) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending April 8th 1,569 million young hens were slaughtered at a live weight of 7.9 kg or 17.3 lbs. (8.4 kg last week). During the corresponding week in 2016, 1.853 million hens were processed. Ready-to-cook hen weight for the week attained 9,410 metric tons, 19.8 percent less than the corresponding week of 2016. Dressing percentage was 80.5. Year-to-date RTC hen production has attained 142,825 metric tons, 11.0 percent less than YTD 2016.
  • For the processing week ending April 8th 2.941 million toms were slaughtered at 18.9 kg or 41.6 lbs. (19.2 kg last week) compared to 2.531 million toms during the previous processing week. For the corresponding week in 2016, 2.485 million toms were processed. Ready-to-cook tom weight for the past week attained 37,243 metric tons, 1.6 percent less than in the corresponding week of 2016.  Dressing percentage was 80.5.Year-to-date RTC tom production has attained 527,134 metric tons, 5.7 percent more than YTD 2016.
  • The National average frozen hen price during the past week was $2.18 per kg, 16 cents/kg below the three-year average. The following prices were documented for domestic and export trading:-

Product

$ per kg

Change from previous Week (%)

Frozen hens

 2.18

                     Down   0.5

Frozen toms

 2.18

                         Down   3.5

Fresh hens

    2.56

                         Down   2.3

Fresh toms

    2.56

                     Down   0.8

Breasts 1.8-3.6 kg

    3.92

                    No new quotation

Breasts (B/S) tom

    3.39

                 No new quotation    

Drums (toms for export)

    1.10

                     unchanged

Wings (V-cut tom)

    0.84

                     Up        2.4

Wings (V-cut hens)

    3.96

                         Unchanged

Thigh Meat (frozen for export)

    2.61

                      No new quotation

Mechanically Separated (export)

 0.79

                      No new quotation

 

On April 10th 2017 cold storage holdings at selected centers amounted to 64,751 metric tons up 0.5 percent from an inventory of 65,027 metric tons on April 1st 2017.

The March 22rd 2017 edition of the USDA Cold Storage Report issued monthly, documented a total turkey stock of 172,032 metric tons on February 28th 2017, up 11.0 percent compared to February 29th 2016 inventory, and 11.6 percent above January 31st 2017. The Whole Turkey category representing 41.0 percent of total storage amounted to 70,550 metric tons, up 4.3 percent from February 29th 2016.

Please review comments on prospects for exports as outlined in the weekly Broiler Report in this edition. Events follow isolation of H5 LPAI from flocks on a farm holding two ages of growing turkeys in Tennessee. In addition two now-depleted flock of broiler breeders in an adjoining county yielded a North American lineage H7N9 HPAI strain. Isolates characterized as LP H7N9 AI have been identified through serological and PCR surveillance in South-central Tennessee, a backyard flock in Southwest Kentucky and in broiler breeders in North-central Alabama and a single case in northwest Georgia.

   
 

Boston Restaurant Chain Affected By E.coli O157:H7

Apr 19, 2017

    

The Chicken and Rice Guys Chain has temporarily closed four restaurants in Boston and Medford, MA. and has idled its fleet of food trucks following a trace-back involving 14 confirmed and documented cases of E.coli O157:H7 infection.

Currently, public health officials are investigating the source of the infection but it will be approximately one week before the restaurants reopen after decontamination and assay. The focus of the investigation is the Company commissary located in Medford.

It is evident that authorities in conjunction the with FDA or the CDC will apply whole genome sequencing to positively confirm the vehicle of infection and determine whether the pathogen was introduced by an employee or through a contaminated ingredient.

  

   
 

Consumer Evaluation of in vitro “Meat”

Apr 19, 2017

    

The March 22nd edition of CHICK-CITE reported the debut of synthetic laboratory-cultured chicken produced by Memphis Meats. An attitudinal study on in vitro meat was recently conducted by researchers affiliated to an Australian University*

 The study ascertained the response of 670 U.S. subjects to consuming meat prepared in vitro. The study concluded that respondents were willing to try synthetic meat but were not prepared to purchase and eat products on a regular basis. Understandably vegetarians and vegans were more likely to appreciate benefits compared to traditional meat derived from livestock.

 

Politically liberal respondents showed a greater tendency to accept in vitro products. This finding should create some concern as Tyson Foods and Maple Leaf Foods of Canada have invested in alternatives to conventional meat. In the case of Tyson Foods their commitment is miniscule in relation to their assets and they probably regard their contribution as an exercise in gathering information on an alternative technology.

The study category entitled “potential barriers to engagement” included taste and appeal of the product; ethical concerns; health and the environment and economic impacts. Taste as the primary barrier was noted by 7 percent of the respondents. One-third of the respondents were willing to pay neither more nor less for in vitro meat compared to conventional product.

About 15 percent of respondents were willing to pay “somewhat more” with only one percent willing to pay “much more”. Given the astronomical cost of in vitro meat at the present time, there appears to be little prospect for commercialization even if the barriers relating to taste and acceptability are overcome. Cost would have to be reduced to conventional price requiring a profound advance in technology. In the meantime vegans will have to be content with cardboard-textured and tasteless veggie-burgers!

*Wilks, M. and Phillips, C. J. C. Attitudes to in vitro meat: A survey of potential customers in the United States doi.org/10.1371/journal.pone.01719042017.

   
 

Wal-Mart to Offer Discounts for Online Purchases

Apr 19, 2017

    

Extending programs from the recent acquisition Jet.com, WalMart.com will enhance price transparency and offer discounts for online shopping. After the purchase of Jet for $3 billion in 2016, company founder Marc Lore will participate with Wal-Mart Stores to introduce innovations to make the retail giant more competitive especially against Amazon.

  

The Wal-Mart Stores Pickup Discount program will begin in late April and will cover as many as 10,000 items. Marc Lore stated “We are doing a lot to enhance the Pickup experience to make it even simpler and more convenient for customers. He added “we’ve also been hard at work aggressively expanding our online grocery pickup service which is now in 600 stores with an additional 500 coming this year.

   
 

Additional Study Shows Safety of Glyphosate

Apr 19, 2017

    

A study conducted at the Cesare Maltoni Cancer Research Center in Italy has demonstrated that glyphosate, the active ingredient in RoundUp® manufactured by Monsanto, is innocuous in rats at levels equivalent to those allowed in humans. Dr. Fiorella Belpoggi noted “Exposed animals had no evident differences from non-exposed animals.”

 

Additional results are awaited concerning multi-generational effects and long-term exposure. These studies have previously been conducted by Monsanto and by independent research laboratories for over two decades without demonstrating either mutagenicity or carcinogenicity.

The controversy over glyphosate was initiated by a widely criticized classification of glyphosate as “probably causing cancer” by the International Agency for Research on Cancer (IARC.) Scientific organizations including the European Food Safety Authority and the U.S. Environmental Protection Agency together with leading environmental toxicologists at numerous U.S and E.U. universities successfully contested the classification by the IARC.

Glyphosate is now registered in more than 130 countries as an extensively used as herbicide in association with GMO corn, soybeans and cotton. The final results of the trials conducted in Italy will be available in June at which time a manuscript will be submitted for peer review.

   
 

Maryland County Proposes Restrictions on Poultry Houses

Apr 19, 2017

    

Following the lead of Wicomico and Somerset Counties, Worcester County, MD. intends to impose a 200 foot setback for chicken houses from adjacent properties and will impose a limit of eight chicken houses per farm.

County Bill 17/3 is intended to “protect the health, safety, welfare and peaceful enjoyment of properties adjacent or in the immediate vicinity of poultry operations.”

  

 

The proposed bill is supported by the Assateague Coastal Trust which is generally opposed to intensive poultry production, based on environmental consideration relating to the watersheds of Chesapeake Bay.

   
 

Large Grain Harvests in 2016 Have Created a Problem of Storage

Apr 19, 2017

    

The 2016-2017 U.S. harvest comprising 25.9 billion bushels of wheat, soybeans, corn and other feed grains, following a large 2015-2016 season now exceeds the estimated 24.3 billion bushels of permanent U.S. storage.

High World production has reduced the potential for exports from the U.S. and has depressed international and domestic prices.

  

This situation is exacerbated by China which is liquidating extensive repositories of accumulated grain, stored during recent years.

Projections for the 2016-2017 harvest are incorporated in the April WASDE Report posted on the 12th April Edition of CHICK-CITE and the April 14 Edition of EGG-CITE.

   
 

Doug Ramsey Promoted to Head of Tyson Poultry Operations

Apr 19, 2017

    

Tyson Foods announced that Doug Ramsey has been promoted to the positon of president of Poultry Operations.

He succeeds Noel White the COO of the company. In commenting on the promotion of Ramsey, White stated “His extensive experience in the poultry industry, his focus on operational excellence and his ability to build strong teams are the right skills to guide our poultry business in the future.”

Ramsey was previously the Senior Vice President of the Poultry Business Unit, managing food service accounts. He joined Tyson Foods in 1992 and has fulfilled roles in domestic and international business units. Ramsey earned a BS in Agricultural business from Southern Arkansas University in Magnolia.

 

Doug Ramsey

   
 

Connolly Comments on the Future of Agriculture

Apr 19, 2017

 

    

Aiden J. Connolly, Vice-President of Corporate Accounts and Chief Innovation Officer at Alltech Inc., was the guest speaker at the 33rd Annual Clyde W. Eby Memorial Lecture organized by the Prestage Department of Poultry Science, North Carolina State University on April 10th.

Connolly noted the imperative to plan to feed a World population approaching 10 billion by 2050. He is optimistic that this goal can be reached if World agriculture can attain a 1.6 percent compounded growth in output.

 

Aiden Connolly

Connolly pointed out that most of the demand will occur in developing nations with China predominating, as the emerging middle class demands more animal protein. According to the Food and Agricultural Organization, poultry represented 50 percent of World consumption of animal protein, pork 29 percent and beef 15 percent in 2014.

Turning to industrialized nations and specifically the U.S., Connolly observed that 47% of women are now in the workforce; the population comprises 25 percent Millennials; and 27 percent of our population live in single-family households. Internet communication is an important social reality with 89 percent of U.S. citizens having Internet access, 77 percent with smart phones and 1.8 billion people worldwide subscribing to Facebook.

Combining demographics and social trends, Connolly advanced the principle of the “prosumer.” This category is represented by consumers seeking food brands which embrace their values, including sustainability, welfare and nutritional value. This group is intensely concerned over how food is produced and they have an active Internet presence.

The drivers of agriculture going forward will be conditioned by the acronym GLIMPSE. These comprise:

  • Government policy influencing production systems
  • Loss of food wasted through the production and consumption chain
  • Infrastructure development and investment
  • Market access which conditions world trade as influenced by bilateral and multinational agreements
  • People are responsible for innovations, and progress
  • Science will play an important role in increasing yields and evolving new products
  • Environmental issues will be increasingly more important with the advent of global warming and the need to conserve water

In reviewing the five sequential cycles of agriculture, Connolly reviewed the primitive Paleolithic Era, Antiquity, Modern Production, the most recent Green Revolution and the Digital Era which is yet to come. Precision farming will be necessary to achieve increases in productivity with the dairy industry leading among livestock using sensors, electronic monitoring of feed intake and the production from individual cows.

There will be profound changes in food distribution at the retail level. Millennials make extensive use of on-line ordering. Some observers consider that traditional supermarkets will eventually become “day-care centers for the elderly” shifting purchasing patterns based on generational demands.

Some retail food chains have observed this trend and are reconfiguring their stores as “destination and experience” locations. Wegmans and other supermarket operations have installed restaurants, specialty kiosks, wine bars and other features to attract and hold the attention and loyalty of their clientele.

   
 

Smithfield Foods as a Biopharmaceutical Company?

Apr 19, 2017

    

Smithfield Foods, a subsidiary of the WH Group, has established a Bioscience Unit to investigate and possibly apply xenotransplantation from hogs to humans.

Reuters cites Courtney Stanton, Vice President of the new Bioscience Unit, as stating that the company has concentrated on pork products as food but pig organs have potential for transplantation.

   
   
 

Brazil Court Orders Joesley Batista to Step Down

Apr 19, 2017

    

For the second time, a Federal court in Brazil has ordered Joesley Batista to step down from the boards of J & F Participacoes SA, the holding company for JBS SA. and other companies in the Group.

This action relates to an ongoing probe of corruption alleging “sweetheart” deals and financing from national banks for companies within the J & F spectrum including El Dorado Brazil Cellulose SA.

   
   
 

Brazil Recorded Decline in Exports in March

Apr 19, 2017

    

Reuters posted export volume and prices for Brazil covering March, reflecting the impact of the inspection scandal.  The value of chicken exports rose 12 percent to $571 million on export volume which declined by 7 percent.

Officials maintain that exports are returning to pre-scandal levels as the Department of Agriculture has reassured large importing nations of the integrity of the inspection system in Brazil.

  

The E.U. has called for independent scrutiny over the meat industry in Brazil and has indicated that more stringent inspection will continue for the immediate term.

Federal police have accused almost 100 inspectors and other officials of receiving bribes in exchange for leniency with respect to condemnation, falsification of documentation and dereliction of duty.  Prosecutors have yet to follow up on police allegations with formal indictments.

   
 

Panera Bread to Be Acquired by JAB

Apr 19, 2017

    

Confirming market speculation during the past week, JAB Holdings has made an offer for Panera Bread valued at $315 per share to be paid in cash representing a 20 percent premium over the closing price on May 31st.  The value of the transaction is estimated to be $7.5 billion.

JAB is an investment vehicle of the Reimann Family of Germany and is based in Luxembourg.

  

JAB owns Caribou Coffee, Krispy Kreme Doughnuts, Keurig Green Mountain and Peet’s Coffee and Tea. JAB is effectively the largest distributor of coffee worldwide though the Jacobs Douwe Egberts investment.

Panera Bread operates 2,000 bakery cafes in the U.S. and it is a favorite of millennials.

Founder and current CEO Ron Shaich has been prominent in promoting welfare and Panera Bread has always been at the forefront of innovations including cage-free housing, slow-growing broilers and most recently a commitment to antibiotic-free production.

It remains to be seen whether the philosophy of the founder will continue under new ownership which is heavily motivated by return on investment.

   
 

Idaho to Appeal Adverse Decision on “Ag-Gag” Legislation

Apr 19, 2017

    

A case captioned Animal Legal Defense Fund et al v. Idaho Attorney General will be heard by the 9th U.S. Circuit Court of Appeals in San Francisco.  Four states have enacted similar “Ag Gag” legislation (Utah, North Carolina, Wyoming and Idaho) all of which is undergoing challenge in Federal courts.

The Animal Legal Defense Fund has joined in the suit with other plaintiffs including PETA, the American Civil Liberties Union of Idaho, the Center for Food Safety, Farm Century, Sand Point Vegetarians, Farm Forward and kindred organizations opposed to intensive livestock production.

  

At issue is the contention by the Plaintiffs that “lies used to reveal and disclose information of public concern demand rigorous First Amendment protection”.  This means that it is justifiable for an agent of a welfare organization to misrepresent their status on an employment form since applying the distorted logic of the welfare activists, this would be in the public interest. 

An official with the Idaho Office of the Attorney General contends that, “The First Amendment does not displace the States’ authority to protect the rights of land owners so they have control over access to their property.  Steven L. Olsen continued, “Gaining access through misrepresentation infringes on that right.” He added “neither journalists nor special interest advocates have any constitutional dispensation from this role”. 

Idaho maintains that the First Amendment does not necessarily apply to an audio or video recording and does not represent speech in itself.

   
 

American Humane Receives “Top-Rated” Charity Rating

Apr 19, 2017

    

According to a press release on April 3rd, American Humane which has operated for more 140 years has been named a “Top-Rated” charity with an A rating by the Charity Watch of the American Institute of Philanthropy. 

American Humane now joins a select group which spends more than 75 percent of income on productive programs and expends $25 or less per $100 raised from the public. 

Tax returns confirm that 86 percent of income raised by American Humane goes directly to programs.  American Humane president and CEO Dr. Robin Ganzert stated, “We are honored to be named a Top-Rated charity with an A rating by this leading philanthropic information service.”

  

Robin Ganzert

She added, “Today’s donors are increasingly demanding innovation, efficiency, transparency and accountability to ensure that non-profit organizations are not only delivering vital life-saving services but acting as good stewards of precious philanthropic dollars.

   
 

McDonald’s Faces EU Tax Probe

Apr 19, 2017

    

Following an investigation of Apple, the European Commission may now demand tax payments from McDonald’s Corporation. 

The Director of the Competition Commission of the E.U. Margarethe Vestager maintains that multinational companies including Amazon and McDonald’s have “squirreled away money in tax havens out of the reach of authorities in the countries where they make most of their sales.”

  

McDonald’s will move its European headquarters from Luxembourg in favor a non-U.S. tax base in the UK where a new holding company will be established to receive royalties and licensing fees for intellectual property earned outside the U.S.

In 2016, then U.S. Treasury Secretary Jacob Lew complained to EU Commission President Jean-Claude Juncker over “disturbing international tax precedents”.

 

   
 

Columnist Questions Siting of Proposed Lidl Stores

Apr 19, 2017

    

John Springer writing in Supermarket News on April 7, 2017 questioned the location of properties which Lidl has optioned. Springer notes that many of the 233 locations are mid-block or on secondary street corners.

It remains to be seen whether Lidl will develop the properties as secured or whether they are in fact playing a diversion game.

  

It would be unwise for any competitor including “cousin” Aldi to underestimate the expertise of Lidl in selecting locations for their intended entry into the Northeast and Mid-Atlantic U.S. markets.

   
 

Bilateral Trade Between China and the U.S. to be Negotiated

Apr 19, 2017

    

According to a Dow Jones Factiva April 10th posting the trade discrepancy between the U.S. and China is a source of irritation to the current Administration.

Pre-election rhetoric stridently accused our trading partner of currency manipulation and emphasized that Chinese companies receive benefits from the government to be more competitive against U.S. and EU suppliers. Although President Donald Trump has been more accommodative of late, issues of concern will be subject to bilateral negotiation.

  

On Friday, April 7th, Commerce Secretary, Wilbur Ross, noted “given the range of issues and the magnitude, a 100-day plan may be ambitious but it is a very big change in the pace of discussion. He added “I think that’s a very important symbolization of the growing rapport between the two countries.”

   
 

7-Eleven® to Purchase Sunoco Convenience Stores

Apr 19, 2017

    

The 7-Eleven Inc. chain has agreed to acquire 1,108 convenience stores from Sunoco located in 18 states.

Joe DePinto, president and CEO of 7-Eleven stated “This acquisition supports our growth strategy in key geographic areas including Florida, the Mid-Atlantic States, Northeast states and Central Texas.”

7-Eleven currently operates 8,707 convenience stores in the U.S. and Canada.

   
   

Shane Commentary

 

KFC Commits to Eliminate Common-Use Antibiotics

Apr 19, 2017

    

In an April 7th release, Kentucky Fried chicken announced that by the end of 2018, all chicken purchased by KFC U.S. will be raised without antibiotics important to human medicine (“common- use” antibiotics.)

KFC and its parent Yum! Brands is the last of the major chains to announce a ban which in effect follows FDA policy and mandatory compliance by the broiler industry.

 

Lena Brook, food policy advocate at the Natural Resources Defense Council, stated “The market is responding to consumer demand for better meat. This commitment from the nation’s most iconic fast food chicken chain will have a major impact on the way that birds are raised in the U.S. and in the fight against the growing epidemic of drug-resistant infections.”

For information, the decision will not have any “major impact on how birds are raised” since many broiler producers anticipated the 2017 FDA deadline and followed previously released Guidance documents. Common-use antibiotics are essentially disallowed for other than very specific therapeutic administration under strict veterinary control.

The quantitative impact of antibiotic use in broiler production on the emergence of drug-resistant organisms is questionable notwithstanding emerging knowledge based on advanced molecular analysis and epidemiologic evidence.

The majority of drug resistance in human populations results from inappropriate and over-administration of drugs by the medical profession. However, perception is reality and the industry has in large measure accepted the principle of relinquishing antibiotics for growth promotion and disease prevention on a routine basis in conformity with FDA rules.

Kevin Hochman president and Chief Concept Officer for KFC U.S. stated “Making this change was complex and took a lot of planning. It required close collaboration with more than 2,000 farmers, most of them family-owned and managed in more than a dozen U.S. states where they raise our chickens” This is at best a non-factual statement.  

KFC does not deal with farmers but purchases chicken products from a limited number of integrators who in turn agree to and conform to mutually agreed programs, since they own the flocks placed on contractors’ farms. These flocks receive Company feed and supervision and are harvested and processed to supply KFC and other QSRs.

It is evident that going forward the USDA will play a role in antibiotic-free broiler-raising programs through Process Verified Certification.

   
 

Yum! Brands CEO Forecasts Robotics and Automation in QSRs

Apr 19, 2017

    

Yum! Brands CEO, Greg Creed forecast that by the mid 2020’s, automation and robotics will be commonplace in QSRs.  He noted that affiliated brands, Pizza Hut, KFC and Taco Bell have established automated ordering kiosks in Shanghai, China and are even using robotic greeters.  Creed compared advances in automation in QSRs to the extensive use of robots in manufacturing.

  

His comments to CNBC follow recent initiatives to raise the rates paid to workers to a minimum of $15 per hour for unskilled work.  In view of the thin margins generated by QSRs, substantial increases in labor costs will force both in-store automation in addition to centralized food preparation in commissaries, trends which are already apparent. The alternative, as in Seattle WA. is the closure of stores.

The U.S. fast food industry was founded on manual labor provided by high-schoolers following a right-of-passage, learning responsibility, punctuality, and interaction with customers and supervisors before going on to college or a career.  Over the past three decades, especially in urban areas, QSR workers have represented an unskilled work force virtually tied into minimum wage occupations.

Chick-fil-A® is the outstanding exception with respect to remuneration, training, motivation and benefits. Since the chain is a private company with a unique philosophy and business model decisions were made by the founder, S. Truett Cathy and followed by his son Dan to invest in store associates. This luxury apparently eludes public-quoted companies in intense competition, which are required to demonstrate growth in earnings on a quarterly basis to maintain EPS and to pay dividends often at the expense of employees.

   
Visit our Companion Website
www.Egg-Cite.com
Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.

Industry Prices: Fri Apr 21
 Corn3.82 $/bu
 Soybeans9.60 $/bu
 Soybean Meal315.80 $/ton
 Eggs, Producer36  ¢/doz
 Eggs, Warehouse 58-61  ¢/doz 















































 
Copyright 2017 Simon M. Shane