Oct 19, 2016


CHICK-CITE strongly supports the principle of traceability based on potential contribution to health but only in relation to cost-effectiveness and practicality. This said the “single-animal” claims which are emerging appear to be a retrograde step. Ever ready to be first with a new and expensive innovation in the food chain, Whole Foods Market is actively promoting “single-origin” meat cuts.

According to Rick Stein Vice President of Fresh Foods for the Food Marketing Institute “consumers want to know where their meat comes from, where the animal was born, where it was raised and where it was slaughtered”.  This may be Stein’s interpretation but it comes at a high price.  It is estimated that single-origin servings are twice the price of conventional beef and pork.  Mike Olson, cited in an article in Dow Jones stated, “All of these claims are moving up together as part of a growing emphasis on health and wellness”.

The trend towards single-animal servings has absolutely nothing to do with health or safety.  It is all in the mind of the consumer, driven by misinformation and opposition to intensive (read efficient) meat production.  It is estimated that the 18 billion pounds of beef produced annually in the U.S. has a sales value of $200 billion.  In contrast “minimally processed” products including “antibiotics free” and “grass fed” and USDA Organic Certified represent less than $1.3 billion in sales or approximately 1 percent of the total.

Given that animals supplying the specialized market are in short supply, frequently emanating from family farms they are processed with minimal inspection compared to large conventional plant under FSIS inspection. Stores have difficulty in obtaining sufficient quantities even at high prices, inevitably passed on to consumers with appropriate mark-ups. As with pasture-reared eggs and other exotic products this expensive market is easily saturated.


Whole Foods Market is currently extending loans to small-scale family farms to produce more pork and beef. This is not their business. Whole Foods Market is not an agricultural bank. Management should be more concerned over their responsibility to shareholders than distorting the realities of livestock production.   

Single-origin cuts will appeal to the affluent but will have no quantifiable advantages in terms of microbiological quality or freedom from residues. In fact the opposite may be the case.  The    twofold difference in value between conventional and single animal-origin meat will inevitably result in deceptive identification.  Consumers can elect to purchase USDA Certified Organic meat products with the assurance of an audit chain confirming compliance with standard practices and housing of animals.

Self-serving innovations by Whole Foods Market offering no tangible benefits appear to play on misperceptions and fears of consumers. Developing new descriptors for meat and poultry is unnecessary. This is the reason why FSIS is introducing standard definitions for labels to provide information and assurances to consumers.


Poultry Industry News


Share Price of Broiler Companies Respond to Downgrade

Oct 19, 2016


Special Report



On September 14th CHICK-CITE published an editorial entitled Spurious Allegations Give Rise to Nuisance Lawsuit.  On Friday October 7th, Timothy Ramey of Pivotal Research downgraded Tyson Foods from Hold to Sell with a price target of $40. 

The downgrade was based on Maplevale Farms Inc. v. Koch Foods Inc. et al filed on September 2nd in the U.S. District Court for the Northern District of Illinois.

Pivotal Research is a five-person analyst group serving hedge funds and private clients.  The analyst concerned based the downgrade on the statements issued by plaintiffs attorney Hagens, Berman, Sobel, Shapiro LLP without considering the flimsy merits of the case as outlined in the September 14th CHICK-CITE editorial.

The downgraded elicited a sharp decline in the share price of Tyson Foods which closed 8.9 percent down on the day and also affected Pilgrim’s Pride Corporation and Sanderson Farms, down 4.5 percent and 4.3 percent respectively as shown in the table below.

Tyson Foods issued a statement mid-day October 7th firmly disputing the allegations in the complaint and refuting the speculative conclusions reached by the analyst.


Kelsey Gee reporting in the October 8th edition of the Wall Street Journal noted the Tyson rebuttal and a statement by the holding company of Pilgrim’s Pride, JBS SA which stated that it “strongly denies any allegations of market manipulation and welcomes the opportunity to defend itself against these claims through the legal process.”

Ramey in justifying his downgrade stated “We have long wondered how an industry marked by such volatility and lack of discipline could morph to a highly disciplined industry where production remains constrained and pricing remains high.” 

A spokesperson for the Plaintiffs has noted that Tyson is now able to provide forward guidance with precision implying that collusion is involved.  Nothing could be further from the truth.  Currently Tyson Foods derives only one-third of revenue from broilers since it is a multi-species company.  The level of management has progressed since the days when Tyson Foods emerged as the first public-quoted pure-play broiler company subject to wide fluctuations in market price.  Since this time the broiler industry has matured with a high level of competition for the available domestic and international markets.

During the past few years, ingredient prices which represent 60 percent of production cost have been relatively stable and livestock producers have a fair degree of certainty as to forward ingredient cost based on weekly USDA reports on crop progress and monthly world agriculture supply and demand estimates which provides forecast of harvests, utilization, export and residual level which influences price of corn and soybeans. 

CHICK-CITE reiterates the opinion that Maplevale v. Koch is without merit and is little more than a shakedown. Unless the Plaintiffs have specific evidence of collusion, either in the form of legally admissible wiretaps, documentation or affidavits from credible involved participants, the action is little more than a nuisance claim.  If summary judgment is granted in favor of the Defendants, Timothy Ramey and Pivotal Research will lose credibility and investors who take advantage of the unjustified drop in price will be rewarded.




Close/Open Oct 7th/17th


52-Week Range

Market Cap.


Short %


Tyson Foods

67.75 back to 71.79


42.84 – 77.05





Pilgrim’s Pride

20.16 back to 20.96


17.34 – 27.79





Sanderson Farms

89.20 back to 93.64


64.54 – 99.40




+100 (short shares)



Weekly Broiler Production and Prices

Oct 19, 2016


The October 12th 2016 edition of the USDA Broiler Hatchery Report confirmed that 163 million day-old chicks were placed among the 19 major broiler-producing states during the week ending October 8th, four percent more than the corresponding week in 2015.

Total chick placements for the U.S. amounted to 169 million. Average hatchability was 84 percent for eggs set three weeks earlier.

Cumulative placements for the period January 9th through October 8th amounted to 7.11 billion chicks, one percent more than the corresponding period in 2015.


For the processing week ending October 8th 162.797 million broilers were processed at an average live weight of 2.81 kg (2.84 kg. last week) and a yield of 76.0 percent. The number of broilers processed was 2.2 percent more than the corresponding processing week in 2015 and was 0.8 percent less than the previous week.   

Year-to-date (YTD) slaughter of broilers attained 6.395 billion, 1.2 percent higher than YTD 2015.  Processed (RTC) broiler production attained 13.539 million metric tons YTD, 2.0 percent above YTD in 2015 indicating proportionately higher live weights.


Weekly Turkey Production and Prices

Oct 19, 2016


The September 15th edition of the USDA Turkey Hatchery Report, issued monthly, documented 28.8 million eggs in incubators on September 1st 2016, up 21.0 percent from September 1st 2015, impacted by HPAI. There were 24.5 million poults hatched in August 2016, up 11.0 percent from August 2015. During the past month, 24.1 million poults were placed, one percent less than in August 2015.

The October 14th edition of the USDA Turkey Market News Report (Vol. 63: No.41) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending October 8th 1.500 million young hens were slaughtered at a live weight of 7.99 kg (8.20 kg last week). During the corresponding week in 2015, 1.633 million hens were processed. Ready-to-cook hen weight for the week attained 9,034 metric tons, 15.5 percent less than the corresponding week of 2015. Dressing percentage was 80.5. Year-to-date RTC hen production has attained 458,527 metric tons, 11.3 percent above YTD 2015 depressed by HPAI losses in the Midwest.
  • For the processing week ending October 8th  2.548 million toms were slaughtered at 17.20 kg (17.40 kg last week) compared to 2.672 million toms during the previous week. For the corresponding week in 2015, 2.638 million toms were processed. Ready-to-cook tom weight for the past week attained 43,307 metric tons, 0.6 percent more than in the corresponding week of 2015.  Dressing percentage was 80.5.Year-to-date RTC tom production has attained 1,435,251 metric tons, 3.6 percent more than YTD 2015.

Status of 2016 Corn and Soybean Crops

Oct 19, 2016


The USDA Crop Progress Report released Tuesday 17th October indicated a continued favorable trend in corn and soybean crops in 18 states, expressed in the table below:-


October 9th

October 16th

5-Year Average

Corn mature




Corn harvested




Soybeans dropping leaves




Soybeans harvested





Crop Condition:


V. Poor










20   slight change*






20      unchanged

As of September 1st
1.74 billion bushels of corn were in storage, 36 percent on farms.
41.6 million bushels of soybeans were in storage, 21 percent on farms.

The prospects for corn and soybean growth and yield depend on adequate soil moisture. USDA reported data for 48 contiguous states which shows only minor changes between the Adequate and Surplus classifications from the previous week, as shown in the table below:-

Moisture Classification (%) for Week Ending October 16th.  


V. Short




















PETA Expose of Culver Duck Farm

Oct 19, 2016


PETA an avowedly pro-vegan organization has released an undercover video depicting improper euthanasia of ducks. Culver Duck Farm in Middlebury, IN., the subject company has not denied the allegations which were based on the observations of an agent who obtained employment at the company in January and was present through the end of March 2016. 

As with all intrusion videos, agents of welfare organizations apparently do little to alleviate problems and regard their function as documenting deviations from accepted standards, frequently requiring months to obtain a two-minute edited presentation of questionable veracity.


The president of Culver Duck Farm, John Metzger expressed concern over the video which was made before he assumed his present position in April.  He admitted that the apparent abuse depicted on the video is unacceptable and does not reflect current operational procedures.  Metzger noted “We have a zero-tolerance policy about neglect and abuse.”  He added “This is just a black eye for us and hopefully it won’t damage our reputation with our customers and consumers.”

Producers of poultry are warned that agents of welfare organizations continually seek job openings in order to document alleged deviations from welfare standards.  The areas which appear to receive attention include euthanasia of chicks and poults in hatcheries and growing birds on contractors’ farms also with an emphasis on culling and on-farm euthanasia.  Other concerns include harvesting, transport, shackling, stunning and killing.

Appropriate screening of job candidates is required to identify and reject agents working for animal rights organizations. The other and more important preemptive measure is to establish and enforce appropriate standards and to train and supervise employees and contractors.


Amazon to Develop a Physical Presence

Oct 19, 2016


With traditional brick-and-mortar chains developing an E-capability, Amazon has announced their intention of establishing drive-in grocery collection depots and a chain of convenience stores.  It is anticipated that the proposed Amazon stores will sell perishables including milk and meat on either a walk-in or a click-and-collect basis.  As with many Amazon initiatives, high technology will be incorporated into the model.  The report in the October 12th Wall Street Journal notes that screening of vehicle tags may be applied to expedite pickup.


The small grocery stores to be launched under the Project Como initiative will cater for members of the Amazon Prime, Fresh Subscription service which promises same-day delivery.

In a competitive move, Amazon converted the $299 annual fee for the Fresh option of the Prime program in favor of a $15 per month subscription.  Surveys on household expenditure show that consumers spend 20 percent of income on produce and groceries. The E-commerce segment represents only two percent of sales indicating the vast potential to disrupt conventional supermarkets, specialty and convenience stores.

The home delivery of groceries is fraught with logistic complications and costs especially in other than high-density metropolitan areas.  A number of companies have entered the field, consumed vast amounts of investors’ money and then either filed for bankruptcy or lost their identity in mergers.


Survey of Top Food Retailers

Oct 19, 2016


According to the Food Marketing Institute, the average U.S. household spends $107 per week on food and family members make one or two visits to a supermarket or food store each week to restock a pantry or refrigerator.

The top food retailers and their respective market shares are:-

  • Wal-Mart Stores – 17.3%
  • Kroger – 8.9%
  • Safeway/Albertsons – 5.6%
  • Costco – 5.1%
  • Publix – 3.4%
  • Sam’s Club – 3.3%
  • Ahold-Delhaize – 2.5%
  • Whole Foods Market – 1.7%

Amazon Reduces Prices for Delivery

Oct 19, 2016


In what might be regarded as predatory pricing in the highly competitive on-line grocery delivery segment, Amazon.com has reduced the subscription for unlimited service by 40 percent from $299 per year to $15 per month.  Amazon Prime members are now eligible to shop for everyday essentials by selecting the “Fresh Add-on” feature. 

Orders placed by 10:00 pm will be delivered by 6:00 am the following morning. Delivery time slots include 1-hour periods.  The service is available in 14 metropolitan areas in California, New York, New Jersey, Maryland, Virginia and Massachusetts.


Tyson Foods Takes Equity Position in Beyond Meat

Oct 19, 2016


Tyson Foods announced on Monday October 10th that it had acquired a five percent equity position in Beyond Meat a privately held company located in El Segundo, CA.  Beyond Meat produces a line of vegetable-based dishes based on plant proteins.

In commenting on the investment, Monica McGurk, Executive Vice President of Strategy and New Ventures and President of Foodservice for Tyson Foods noted “We’re enthusiastic about this investment, which gives us exposure to a fast-growing segment of the protein market.”


She added “It meets our desire to offer consumers choice and to consider how we can serve an ever-growing and diverse global population, while remaining focused on our core prepared foods and animal protein businesses.”

Investors in Beyond Meat include the HSUS, Bill Gates and Kleiner Perkins.


China Admits to H5N6 HPAI Outbreak

Oct 19, 2016


According to the Xinhua official news agency, outbreaks of HPAI have been confirmed in northwest and in central China.  The common pathogen is an H5N6 strain of avian influenza which can be transmitted to human contacts.

The Ministry of Agriculture issued a statement noting that “the epidemic has been controlled with depletion of infected flocks.”

H5 and H7 avian influenza are endemic in most poultry-raising areas in China and the nation employs a variety of control measures relying heavily on vaccination.


The presence of both H5 and H7 avian influenza in China is inconsistent with the nationwide ban placed on the U.S. with respect to importation of all poultry including breeding stock from recognized compartments. The nation selectively fails to recognize the World Organization for Animal Health (OIE) principles of regionalization and compartmentalization.


Speculation over Whole Foods Market Acquisition

Oct 19, 2016


The shares of beleaguered Whole Foods Market rose 5.5 percent on Thursday October 6th to $29.69 at 3:30 pm after opening at $28.12.  This resulted from a communication by Bergen Capital speculating that the Kroger Company might bid $40 per share for Whole Foods Market. 

In the absence of follow through, Whole Foods Market closed at $28.75 on Monday October 10th and $28.32 on October 17th dispelling any prospect of an acquisition.


Whole Foods Market which will announce quarterly results on Tuesday October 25th has a 52- week range in share price of $27.67 to $35.58.

Whole Foods Market has experienced intense competition from the major supermarket chains which have introduced organic and “natural” products but also from clones including Sprouts, the Fresh Market and Trader Joe’s.  Earnings have been static for three years with rapidly declining growth in same store sales.

In 2014 Kroger acquired Harris Teeter, based in North Carolina, for $2.5 billion, Wisconsin-based Roundy’s for $800 million in 2015 followed by Lucky’s Market in Colorado earlier in 2016.

Analysts report that the Roundy’s and Harris Teeter acquisitions were based on seven times annual cash flow, placing a value on Whole Foods of $9.7 billion, slightly above the current market capitalization of $9.2 billion.

Whole Foods Market operates 439 stores in the U.S., 11 in Canada and 9 in the United Kingdom.


Islamic Certification Required for U.A.E.

Oct 19, 2016


The USA Poultry and Egg Export Council noted in the October 10th edition of MondayLine that Islamic certifiers based in the U.S. must conform to the halal standard developed by the Emirates Standardization and Metrology Authority. 

This standard will be adopted by all GCC nations.  The authority has designated A2LA based in the U.S. to audit certifiers.  Further information can be obtained from Jean Murphy at jmurphy@usapeec.org



Biomin Research Center Awards Work by Dr. Rudolph Krska

Oct 19, 2016


Dr. Rudolph Krska of the University of Natural Resources and Life Sciences, Vienna Austria received the Biannual B.R.A.I.N. Award during the World Nutritional Forums sponsored by Biomin.  The distinction recognized the contributions by Dr. Krska to mycotoxin research.


Past winners of the Biomin Research Innovation Network Award include, Dr. Kostas Mountzouris of the University of Athens, Dr. Todd Applegate of the University of Georgia, Dr. David J. Caldwell Texas A & M University and Dr. Isabelle Oswald National Institute for Agriculture Research, France.


Hurricane Matthew Responsible for Livestock Losses in North Carolina

Oct 19, 2016


Flooding following the passage of Hurricane Matthew during the week of October 10th resulted in the loss of approximately 5,000 hogs, 1.9 million broilers and 110,000 turkeys.  In addition, there was considerable disruption with road closures and flooding.  Although the final toll has yet to be determined, unofficial indications from the North Carolina Department of Agriculture and Consumer Affairs suggests that losses were limited by preemptive precautionary measures taken by producers.


The Department, and specifically Dr. Sarah Mason, Assistant State Veterinarian responsible for poultry, are commended for diligence during the event.  Daily updates on the location of flooding were issued and the Department identified landfills eligible to receive carcasses. Activities of state and federal agencies including the North Carolina Department of Environmental Programs and the Division of Soil and Water Conservation were coordinated to minimize impact from disposal.

Flooding as a result of Hurricane Matthew resulted in 22 fatalities to date and over 5,000 residents in affected areas were displaced from their homes.

The North Carolina Department of Agriculture and Consumer Affairs received a $6 million grant from the U.S. Federal Emergency Management Agency to purchase roughage to compost carcasses on-site although many of the losses were transferred to available landfills.


U.S. Requests South African Government to Oppose Challenge to Imports

Oct 19, 2016


During past weeks CHICK-CITE has reported on the activities of the South African Poultry Association and their efforts to block imports of broiler parts from the U.S. 

The previous agreement to lift the embargo on U.S. broiler meat to South Africa was negotiated on the understanding that South Africa would continue to receive benefits under the African Growth and Opportunity Act (AGOA).  Should current litigation result in a re-imposition of the embargo, the eligibility of South Africa in terms of AGOA will be reconsidered.




Oct 19, 2016


In efforts to communicate more effectively through the social media, the National Chicken Council has established an Instagram page with a new blog entitled Chicken Check In. 

Launched in December 2015, the page is continuously upgraded and contains links to videos, FAQs Infographics and links to Twitter, Facebook, You Tube and Pinterest.



Oct 19, 2016


The Poultry Science Association organized the first Latin American Scientific Conference at the Royal Palm Plaza Conference Center in Campinas, SP. Brazil on October 4th 2016.

The theme for the conference was “Connecting the Global Science Community”.  The conference was attended by 500 scientists from 17 nations and the program incorporated six symposia and 200 scientific articles and abstracts.


Dr. Steve Koenig Executive Director of the Poultry Science Association characterized the conferences “a great success and an exceptionally strong beginning of the PSA commitment to holding a regional conference for all who work within Latin American poultry science”.



Oct 19, 2016


Speaking at the 2016 World Nutrition Forum in Vancouver, Canada, Dr. Hannes Binder, Managing Director of Biomin noted, “Our Company will be a major phytogenics concern within the next four years. 

Biomin ranks within the top three companies in terms of annual phytogenic feed additive sales globally”.


Dr. Binder added, “In many places, the livestock industry is in transition.  Producers are looking to get more out of their feed, reduce antibiotics, shrink the environmental footprint and enhance intestinal performance”.

The World Nutrition Forum hosted by Biomin which took place on October 13th attracted 800 delegates from 84 nations.  The event was an opportunity for Biomin to showcase Digestarom® a unique phytogenic product.



Oct 19, 2016


Despite the fact that Brazilian Authorities have approved three U.S. GMO corn varieties for import to Brazil, broiler producers in the Northeast of the country have committed to supplies from Argentina. A representative of the Ceara State Poultry Association noted, “We have already closed deals for several shipments for corn from Argentina before the clearance for U.S. corn occurred and we have commitments through February. 

A similar situation exists in Pernambuco State where producers will probably import U.S. corn from February through March 2017 before the domestic corn crop is available.  Bahia, the 3rd state in the Northeast quadrant, will rely on domestic corn.


Collectively the three Northeastern States have imported 220,000 metric tons of corn since the beginning of 2016 due to lower domestic yields caused by drought.

The October WASDE report increased the projection for exports of corn to 2,225 million bushels equivalent to 60.7 million metric tons.


CME Prices

Oct 19, 2016


At the close of trading on October 14th CME rounded quotations for corn, soybeans and soybean meal are shown with values for corresponding months  indicated in parentheses:-


Corn (cents per bushel)

Dec.   354    (340)

March ’17    363    (350)

Soybeans (cents per bushel)

Nov.  962     (957)

March ’17    976    (968)

Soybean meal ($per ton)

Dec.   301    (299)

March ’17    303    (303)

Inconsequential changes in the price of soybeans and soybean meal were documented this past week:-

Corn:                     December quotation up by 14 cents (+4.1 percent)

Soybeans:            November quotation up by 5 cents   (+0.5 percent)

Soybean Meal:    October quotation up by $2 per ton (+0.7 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 October USDA-WASDE Report #558 under the STATISTICS Tab for a review of quantities and price projections for commodities.





Oct 18, 2016


In a Reuters October 12th report, TPG Capital Management LP, which purchased Inghams Group in 2013 will offer 73 percent of the equity in an intended listing in November.  The potential market capital for the company will be $1.1 billion and is based on 13 to 15 times pro forma 2017 net profit.  If the IPO is successful, TPG Capital Management will receive in the region of $730 million, above the $675 million paid for the company.


Prospects for Inghams, the industry leader in Australia, are buoyed by a four percent increase in consumption over the past ten years together with increased prices due to drought which has reduced the availability of beef.  Inghams is immune from import competition due to strict laws concerning biosecurity.



Oct 14, 2016


USPOULTRY has announced that it will co-sponsor the Sustainable Agriculture Summit to take place November 15 through 16 at the Omni Atlanta Hotel.

Co-sponsors include the Field and Market Center of U.S. Dairy, the National Pork Board, the Stewardship Index for Specialty Crops and the U.S Roundtable for Sustainable Beef.


The vision of the Sustainable Agriculture Summit is to strengthen the supply chain and the network of producers, agribusinesses, retailers and influences who drive continuous improvement in agricultural sustainability.

For further information contact Paul Bredwell pbredwell@uspoultry.org.



Oct 14, 2016


According to Katherine Peralta of Charlotte Observer the Food Lion, based in Salisbury NC, is investing $200 million to upgrade stores.  Features will include more convenient formats, attractive décor and lower prices on staples including chicken. 

The Dilworth location represents the first of the upgraded stores and was unveiled on Tuesday October 11th.  Meg Ham, President of Food Lion noted, “As we near our 60th Anniversary we spent the year making significant investments in our stores, customers, associates, and communities to create a new grocery store shopping experience”.




Oct 14, 2016


Despite the fact that Brazilian Authorities have approved three U.S. GMO corn varieties for import to Brazil, broiler producers Northeast of the country have committed supplies from Argentina representative of the Ceara State Poultry Association noted, “We have already closed deals for several shipments for Argentina corn before the clearance for U.S. corn occurred and we have commitments through February.  A similar situation exists in Pernambuco State where producers will probably import U.S. corm from February through March before the domestic corn crop is available.  The 3rd state in the Northeast quadrant, Bahia will rely on domestic corn.


Collectively the 3 Northeastern States have imported 220,000 metric tons of corn since the beginning of 2016 due to lower yields caused by drought.

The October WASDE report increased the projection for exports of corn to 2,225 million bushels equivalent to 60,000 metric tons.


Increase in Turkey Consumption

Oct 14, 2016


According to the USDA Economic Research Service, U.S. turkey consumption will increase from 16 pounds per capita in 2013 to 17 pounds in 2017.  This represents a 1.6 percent average annual increase over the four-year period.  Effectively all the increase occurred between 2016 and 2017 representing an additional one pound per capita or a 6.3 percent increase.  The turkey industry has a goal of 20 pounds per capita in 2020.  This would appear to be a difficult objective given the stagnant consumption over three years but a boost is anticipated in 2017.  In the coming year the USDA projects that turkey will represent 7.8 percent of all poultry and meat production. 


Increase in turkey consumption should be compared to broilers with an annual increase of 2.5 percent to a per capita annual consumption of 90 pounds.  Pork has averaged a 2.1 percent increase to 51 pounds per capita.  In contrast beef consumption shrank by .03 pounds per capita over four years to 56 pounds.

Improvement in turkey consumption can be attributed to a broader range of products including luncheon meat and adoption of turkey products by QSRs.  Hormel Foods which operates the Jennie-O turkey brand has made significant double-digit increases in its advertising budget featuring the “Make the Switch” message.  Butterball the leading U.S. turkey producer is emphasizing value and quality relative to red meats.  The company intends contracting with an additional 30 farmers to increase production.

The turkey industry has recovered from severe losses experienced in Minnesota and the Dakotas as a result of highly pathogenic avian influenza during the spring of 2015. The USDA projects a 2017 output of 6.14 million pounds, approximately 1.2 percent more than in 2016.  Exports of turkey meat will attain 630,000 pounds in 2017 or an 11 percent increase over 2015.  Exports will represent 10.3 percent of total annual output for the year.


Harrison Poultry Settles Disability Discrimination Lawsuit

Oct 14, 2016


According to a October 4th press release from the U.S. Equal Employment Opportunity Commission Harrison Poultry will pay $100,000 to settle a liability discrimination lawsuit.  The case arises from a complaint in July 2012 in which a manager alleged that he was wrongfully terminated when he requested medical leave of seven days duration. 


The Equal Employment Opportunity Commission considered that the action by the company violated the Americans with Disabilities Act and filed suit in U.S. District Court for the Northern District of Georgia in 2014 following a failure to achieve a pre-litigation settlement through conciliation.

The company will develop an appropriate policy regarding medical leave and will compensate the claimant.


Perdue Farms Eliminates Antibiotics from All Chicken Products and Brands

Oct 14, 2016


Addressing the WSJ Global Food Forum in New York on Thursday October 6, Dr. Jim Perdue, Chairman of third-generation Perdue Farms, announced that the Company has eliminated all antibiotics from its chicken supply.  This makes Perdue the first company in the U.S. to commit to elimination of antibiotics in the approximately 12 million broilers the Company produces each week. Two years ago Perdue committed to eliminating all antibiotics with common use in human therapy.

Perdue was a pioneer in evaluating antibiotic free production, conducting a three-year longitudinal matched-house comparison carried out in Maryland and North Carolina.  The published study demonstrated only a small benefit for growth-promoting antibiotics. Subsequent efforts and initiatives by Perdue have shown that good management procedures eliminate the need for routine administration of sub-therapeutic antibiotics to optimize growth rate and feed conversion efficiency.


Jim Perdue

Perdue was a pioneer in evaluating antibiotic free production, conducting a three-year longitudinal matched-house comparison carried out in Maryland and North Carolina.  The published study demonstrated only a small benefit for growth-promoting antibiotics. Subsequent efforts and initiatives by Perdue have shown that good management procedures eliminate the need for routine administration of sub-therapeutic antibiotics to optimize growth rate and feed conversion efficiency.

It is evident that in the event of infection some flocks will have to be treated with antibiotics under veterinary supervision in accordance with FDA prudent-use guidelines.  These birds will be segregated and will be marketed as non-branded commodity product.

USDA estimates show a national growth rate of 1 to 2 percent annually for the broiler industry.  In contrast Perdue believes that sales of antibiotic-free chicken are growing by 15 to 20 percent each year but admittedly from a small base.  This movement is in response to specifications required by major QSRs and casual dining chains led by Chick-fil-A® and Panera Bread but now becoming a standard for the industry.  Most customers are phasing into sourcing antibiotic-free chicken by first requiring freedom from common-use human drugs and then total freedom from antibiotic administration.

Effective January 1, 2017, in accordance with FDA directives, producers will not be able to administer any antibiotics for sub-therapeutic administration to promote growth.

Non-antibiotic alternatives including probiotics, prebiotics, botanicals, essential oils and short and medium-chain fatty acids are all under active evaluation as substitutes for antibiotics.  It is evident that the approach to replacing these compounds requires a holistic approach involving vaccination against coccidiosis or effective suppression using approved anticoccidials, upgrading ventilation, ensuring adequate protection against immunosuppressive diseases and other modalities which enable flocks to achieve their genetic potential.


Shane Commentary


Congress Reviewing Funding of International Agency for Research on Cancer

Oct 19, 2016


Previously CHICK-CITE has commented on the inappropriate classification of glyphosate as possibly carcinogenic by the International Agency for Research on Cancer (IARC). This resulted in delays in approval of the compound which is critical to production of GM crops. The decision to classify glyphosate as possibly carcinogenic was widely criticized by both industry and the scientific community


The Chairman of the House Oversight Committee, Jason Chaffetz (R-UT) and the Chairman of the U.S. Congressional Appropriations Subcommittee on Agriculture, Robert Aderholt (R-AL) have addressed letters to the Director of the National Institutes of Health concerning funding of the IARC. This Agency is a subsidiary of the World Health Organization and is based in Lyon, France. Since 1992 the National Institutes of Health has granted a total of $40 million to IARC and during 2016, funding has attained $1.2 million from a budget of $33 billion.

NIH director Dr. Francis Collins will meet with the House Oversight Committee to deliver a briefing and to answer questions from lawmakers. Representative Chaffetz is on record as describing IARC as having “a record of controversy, retractions and inconsistencies”. Representative Aderholt noted in the letter to Dr. Collins that “IARCs conclusions appear to be the result of a significantly flawed process” adding “some in academia have raised questions about the quality of the science and the transparency of the process.”

The IARC has implicated cell phones, coffee and red meat as possibly carcinogenic although the characterization of coffee was retracted following criticism and demands for a reevaluation of literature.

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Industry Prices: Mon Oct 24
 Corn3.48 $/bu
 Soybeans9.92 $/bu
 Soybean Meal307.30 $/ton
 Eggs, Producer36  ¢/doz
 Eggs, Warehouse 49-52  ¢/doz 

Copyright 2016 Simon M. Shane