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.

   
   
 

CDC Identifies STEC O157:H7 in SoyNut Butter

Apr 19, 2017

    

Meat products including poultry are frequently implicated in food-borne infections. The CDC has recently concluded an epidemiologic investigation involving an outbreak of Shiga toxin-producing E.coli strain O157-H7. Twenty nine patients among twelve states were identified as being infected with the specific outbreak strain.

Twelve patients were hospitalized with nine developing Hemolytic Uremic Syndrome, a serious complication of infection. The vehicle of infection was contaminated Healthy Brand SoyNut Butter frequently fed to children.

  

The outbreak resulted in a recall of all SoyNut Butter products under various brands in addition to granola and yogurt bars containing potentially contaminated ingredients. It is noted that 83 percent of the confirmed cases comprised children since the SoyNut Butter products were fed in day-care centers and schools and specifically to children with peanut allergies.

   
 

Weekly Broiler Production and Prices

Apr 12, 2017

    

The April 5th 2017 edition of the USDA Broiler Hatchery Report confirmed that 175 million day-old chicks were placed among the 19 major broiler-producing states during the week ending April 1st, 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 1st amounted to 2.34 billion chicks, two percent more than the corresponding period in 2016.

  

For the processing week ending April 1st 159.64 million broilers were processed at an average live weight of 2.77 kg or 6.10 lbs. (2.81 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 336,407 metric tons, 1.1 percent more than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 4,398,819 metric tons YTD, 0.7 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

Apr 12, 2017

    

The March 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 April 7th edition of the USDA Turkey Market News Report (Vol 64, No. 14) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending April 1st 1,626 million young hens were slaughtered at a live weight of 8.4 kg or 18.5 lbs. (8.3 kg last week). During the corresponding week in 2016, 1.810 million hens were processed. Ready-to-cook hen weight for the week attained 10,136 metric tons, 3.3 percent less than the corresponding week of 2016. Dressing percentage was 80.5. Year-to-date RTC hen production has attained 133,415 metric tons, 10.2 percent less than YTD 2016.
  • For the processing week ending April 1st  2.531 million toms were slaughtered at 19.2 kg or 42.3 lbs. (18.5 kg last week) compared to 2.467 million toms during the previous processing week. For the corresponding week in 2016, 2.222 million toms were processed. Ready-to-cook tom weight for the past week attained 38,517 metric tons, 12.1 percent more than in the corresponding week of 2016.  Dressing percentage was 80.5.Year-to-date RTC tom production has attained 489,891 metric tons, 6.3 percent more than YTD 2016.
  • The National average frozen hen price during the past week was $2.19 per kg, 14 cents/kg below the three-year average.

   
 

Status of 2017 Corn and Soybean Crops

Apr 12, 2017

        

Status of 2017 Corn and Soybean Crops

The USDA Crop Progress Report released Monday April 10th recorded the start of corn planning as expressed in the table below:-

WEEK ENDING

Crop

April 2nd

April 9th

5-Year Average

Corn Planted

N/A

4%

3%

 

 

 

 

Soybeans Planted

N/A

N/A

 

 

Parameter

V. short

Short

Adequate

Surplus

Topsoil moisture: Past Week

                              Past Year

3

6

10

18

66

68

2

11

 

 

 

 

 

Subsoil moisture: Past Week

                              Past Year

3

4

13

17

69

68

15

11

   
 

U.S. Broiler and Turkey Exports for January-February 2017

Apr 12, 2017

    

- Continued Improvements in Volume and Value Compared to 2016.

Data for the first two months of 2017 indicate an improvement in export volume after lifting of embargos following the 2015 Midwest HPAI outbreak and the subsequent limited January 2016, Indiana and May 2016, Missouri “pop-up” cases.  Broiler meat exports in January-February 2017 attained 499,906 metric tons, 6.9 percent higher than  the first two months in 2016 (467,643 metric tons)

  

During January-February 2017 the National Chicken Council, citing USDA-FAS data, documented exports of 535,387 metric tons of chicken parts and other forms valued at $505 million with an average unit value of $943 per metric ton, almost identical with January-February 2016 ($944).

The breakdown of chicken exports by proportion and unit price for each broiler category for January-February 2017 compared with the corresponding months in 2016 (with the unit price in parentheses) comprised:-

  • Chicken parts                          95.5%;  Unit value $870 per metric ton   ($863)
  • Prepared chicken                      2.6%;  Unit value $3,599 per metric ton ($3,525)
  • Whole chicken                          1.9%;  Unit value $923 per metric ton    ($1,332) 

 

   
 

Authorities in Brazil Respond Aggressively to Beef Scandal

Apr 12, 2017

    

Intensive surveillance of microbiological quality of meat products from 21 processing plants implicated in the ongoing corruption probe demonstrated a relatively low level of contamination.

Eight of 302 samples yielded either Salmonella or Staphylococcus which is not unexpected. A parallel investigation did however reveal excess water and addition of starch to chicken sausages beyond Federal limits in 10 percent of samples examined.

The 21 implicated plants are located in the states of Bahia, Tocantins, Rio de Janiero, Santa Catarina, and Sao Paulo.

A spokesperson for the Ministry of Agriculture stated “We want the audits to give us a real sense of the status of inspection services in each state.” The Executive Secretary of the Ministry added, “The findings of the audits will be shared with Federal prosecutors and the Federal police.”

  

The Government of Brazil is engaged in an intensive public relations exercise including enhanced transparency in an attempt to convince importers that Brazilian meat products are safe and that allegations against a number of companies are only an aberration and do not reflect the extensive production of meat in Brazil.

Chick-Cite has reported on the volumetric and financial impact of the scandal although many large importers, including China, Chile, Egypt and Hong Kong, have rescinded bans on Brazilian products. It is, however, obvious that the Brazil “Brand” has been degraded and that extensive efforts will be necessary to restore confidence in the Nation’s products.

   
 

Yum China Shares Respond to Strong Earnings

Apr 12, 2017

    

Yum China Holdings, spun-off from Yum Brands in 2015, recently reported 1st Quarter earnings of $175 million or 44 cents per share compared to $145 million and 40 cents per share for the corresponding quarter of the previous fiscal year.

Revenue was slightly lower at $1.28 billion compared to $1.30 billion. Same-store sales grew one percent.

  

The sales and earnings values exceeded analysts’ predictions and shares of the Company in China rose 11 percent with a corresponding increase in Yum! Brands of 1.5 percent.

   
 

USDA - WASDE FORECAST #564, April 11th 2017

Apr 12, 2017

    

Overview

The April 11th 2017 USDA WASDE projections for the 2016/7 corn and soybean crops reflected actual harvest data. Areas for corn and soybeans were unchanged at 86.7 million and 82.7 million acres respectively. The USDA retained corn and soybean yields to 174.6 bushels per acre and 52.1 bushels per acre. Ending stocks for corn and soybeans were projected at 2,320 million bushels (unchanged from March) and for soybeans 445 million bushels (up 0.5 percent) compared to the data in the March WASDE Report.

  

Corn

The corn harvest attained a near record of 15,148 million bushels. None of the major categories of use were appreciably changed as is normal for a post-harvest WASDE report. The projected USDA range in farm price incorporated a 30 cent per bushel spread and price was up 5 cents per bushel on the low end and down 5 cents on the high end of the range compared to the March 2017 WASDE Report, attaining 325 to 355 cents per bushel. At the close of trading on April 11th, CME quotations for May and July 2017 corn were 367 cents and 374 cents per bushel respectively suggesting that the USDA projections may be low.

The RFS for 2016 was belatedly determined to be 18.11 billion gallons by the EPA on November 30th 2015 (See Editorial in CHICK-CITE). The value was four percent higher than the May 2015 proposal of 17.4 billion gallons. It is doubtful that the incoming Administration will alter existing RFS levels given support of the Midwest agricultural sector to the election outcome and reinforced by assurances to Corn-State legislators in early January 2017. A wild card will be the influence of the incoming EPA Administrator and the Secretary of Energy, both of whom favor the oil and refining industries of their home states and both have historically opposed the RFS. Business associates of the President-elect have recently commented negatively on the system of Renewable Identification Numbers (RINs) which affect the profitability of many domestic refineries. For April, USDA raised diversion of corn to ethanol by 50 million bushels.

The prevailing but stable historically low oil price reflects a slowing of World economic activity and increased oil and gas production in North America. Supply is a function of now restricted output from Saudi Arabia, lower production from Nigeria and Venezuela, resumption of supply from Iraq and Iran, and interference by Russia in Mideast affairs. Reduced output according to an OPEC “agreement” in early December 2016 and subsequent negotiations between OPEC and Russia are all contributory factors, determining the balance between supply and demand which is important to the livestock industry as oil price is correlated to grain prices. The WTI fluctuated in a narrow range of $51 to $53 per barrel during the past month with a sharp rise in early April.

Read the Full Report at http://chick-cite.com/News/single.aspx?contentID=9082

   
 

Legislation to Restrict Ethanol Dilution of Gasoline

Apr 12, 2017

    

The 2017 EPA RFS mandate calls for 19.3 billion gallons of ethanol to be blended into gasoline in the U.S. This amounts to 10.7% of total volume of fuel based on predicted consumption. The Renewable Fuels Industry has promoted an increase in the blend ceiling from 10% to 15%. This action would be injurious to a large proportion of the U.S. vehicles on the road. Legislation currently prevents the USDA from funding conversion of gas station pumps to multi-blend delivery at a cost approximating $50,000 per unit. To date the excess supply of ethanol is exported.

  

A number of state legislators have introduced bills to limit ethanol “dilution” to 10% by volume. H.R. 1315, the RFS Reform Act of 2017 introduced by Representative Robert Goodlatte (R-VA) would restrict addition to the current level of 10%. This bill has been referred to the House Committee on Energy and Commerce. Goodlatte who is an opponent of the RFS concurrently introduced H. R. 1314 calling for the elimination of the Renewable Fuels Standard.

This bill is also being referred to the House Committee on Energy and Commerce. H.R. 119 introduced by Michael Burgess (R-TX) would cap ethanol addition at 10%. S.B. 115 has been introduced into the Georgia Senate to restrict the level of ethanol addition within the state. In addition Senate Resolution 205 requests the U.S. Congress to eliminate the RFS on the grounds that it is damaging to gasoline-powered engines especially those installed on motorcycles, stationary equipment and off-road vehicles.

   
 

Aldi to Upgrade Stores In the North Carolina Triangle

Apr 12, 2017

    

The Durham News and Observer reports that twelve stores in Raleigh and Durham will be upgraded at a cost of slightly over $1 million each. This is part of a nationwide $1.6 billion store remodeling project which will encompass 1,300 locations by 2020.

Krysta Cearley of Salisbury NC, Division Vice President for Aldi stated “We have served the Raleigh-Durham community for 16 years and we are pleased to invest more than $13 million in updating our stores to better serve our existing and new customers.” She added “we know there is only one way to attract and keep fans; by continually providing the highest-quality products while staying true to what our competitors can’t match – everyday low prices.”

  

Informed observers indicate that Lidl will target the Triangle for locations as they enter the U.S. market. The company has broken ground in Wake Forest and is planning stores in Raleigh, Cary and Clayton.

   
 

BRF Restructures

Apr 12, 2017

    

According to an article in the March 30th edition of Food Bev Media, posted by Dow Jones Factiva Brazilian protein producer BRF has undergone a major restricting.  This follows the marked decline in sales during the fourth quarter of the previous fiscal year recently completed, followed by the allegations of illegal practices involving food inspection and export certification. 

  

Alexandre Almeida will replace the outgoing CEO as head of BRF in Brazil.  Leonardo Byrro will assume the position of V.P. of Supply and Simon Cheng will head a Response Management Division involved in crisis control.  Pedro Faria will be responsible for the “Business Management Division” to promote Company growth and quality control in addition to day-to-day activities.  Pedro Navio has been appointed to lead the BRF Strategic Global Marketing and Innovations function.  Quality control will now report directly to the CEO, Pedro Faria.bf

   
 

Problems Emerging for Beef Producers Following VFD Implementation

Apr 12, 2017

    

The American Veterinary Medical Association and the American Association of Bovine Practitioners have published a joint statement relating to pressure being placed on veterinarian to issue VFDs and prescriptions for antibiotics. 

Tetracyclines appear to be the most critical since this class is frequently included in custom formulations to prevent or treat anaplasmosis, foot rot and pink eye.

  

Practicing veterinarians are aware of the obligations under the VFD and the restrictions on administering antibiotics to flocks and herds in feed or in water under a prescription.  The realities of the VFD which came in to effect on January 1st have in some cases not been accepted by feed mills and producers who have pressured either independent or staff veterinarians.

   
 

Closure of Processing Plants in Brazil Impacting Poultry Producers

Apr 12, 2017

    

An article by Paulo Trevisani in the Wednesday March 29th edition of the Wall Street Journal illustrated the consequential effects of plant closures in Brazil. 

The article noted that suspension of operations in a plant processing 25,000 turkeys and 120,000 broilers per day has prevented contractors and integrators from harvesting flocks. 

  

This has resulted in increasing biomass in houses or alternatively the need to transport birds for distances up to 300 miles even if flocks can be accommodated. In many cases poult and chick deliveries are being cancelled. 

Urgent representations have been made to the Ministry of Agriculture to resume processing which has affected many regions with a high density of poultry. It is noted that the scandals alleging improper inspection and certification involve beef but it is apparent that poultry plants have been embroiled in the situation.  The commercial and social impact of plant closures in poultry-raising areas of Brazil can be likened to the disruption following emergence of HPAI in the U.S. upper Midwest in 2015.

On March 30th, JBS announced furloughs at ten beef plants among the 36 it operates following disruption in the chain of distribution. Embargos have been placed on Brazilian meat products by many importing nations.

The financial implications of the scandal were evaluated by Fitch Ratings on March 30th.  The Agency concluded that providing major importers resume receiving shipments, the worst-case scenario for additional losses across the agribusiness chain might reach $5 billion.  Initial indications including rescinding of embargos by China, Chile and Hong Kong, confirm the moderately optimistic projection made by Fitch Ratings.  Brazil cannot afford a major disruption in an important sector, given the national unemployment figure of 12 percent during a recession.

   
 

McDonald’s Banking On “Fresh Beef”

Apr 12, 2017

    

McDonald’s announced that it will switch from frozen to chilled [“fresh”] beef for Quarter Pounder sandwiches. The only difference will be storage temperature since McDonald’s has used 100% beef in all patties which to date have been flash frozen. The switch to chilled patties will impose some logistic problems and unless patties are adequately cooked, may represent a risk of food-borne infection which it is hoped management has considered.

  

Following the appointment of Steve Easterbrook as CEO, McDonald’s which had experienced almost two years of negative same-store sales, growth rose sharply with introduction of new menu options including all-day breakfast. This persisted through the last two quarters of 2015, although the Company has experienced a sharp decline in 2017 continuing negative growth for the last quarter of the most recent year.

Observers do not believe that the switch to chilled patties will make much difference to the company and its sales. Perhaps as an acknowledgement of this reality, Chris Kempczinski, USA president of McDonald’s was quoted in the Friday 31 March edition of the Wall Street Journal as stating “We are just getting started and we will continue to make moves on the burger line. Whether it’s this move exactly, I’m not sure but you should expect we will continue to elevate and meet customer expectations about what we can do with our burgers.”

The switch to chilled patties will not include stores in Alaska, Hawaii and also airport operations. This may represent a problem since consistency is an important principle of any QSR chain. If burgers have a different texture, juiciness or taste among stores, consumer disaffection will follow. Perhaps McDonald’s may benefit more from delivery and mechanization than from tinkering with food preparation and menus.

   
 

Alltech Appoints Technical Support Services Veterinarian

Apr 12, 2017

    

Alltech has announced the appointment of Dr. Dulmelis D. G. Sandu as a poultry technical support services veterinary to be based in Georgia.

Kevin McBride Southeast Regional Sales Manager for Alltech noted “We are excited to have Dr. Sandu join our team.” He added “She brings a wealth of knowledge and experience and will provide outstanding service to our poultry customers.”

  

Dr. Sandu received her Master of Avian Medicine from the University of Georgia in December of 2016. She earned her DVM degree from St. George’s University in Grenada in 2015 and a Master of Science with a focus on poultry nutrition from Oregon State University in 2008.

   
 

Foster Farms Avoids Picketing at Livingston, CA Plant

Apr 12, 2017

    

According to the Modesto Bee the dispute between Foster Farms and the United Farm Workers concerning the renegotiation of a contract due to expire in October is still subject to negotiation. The current contract is with the International Association of Machinists and Aerospace Workers.

Employees elected to establish a new contract under the United Farm Workers. During the last week of March a strike was threatened which would have had consequences to both company and its workers.

  

On Wednesday, March 29th, Ira Brill, a spokesperson for Foster Farms, stated “We continue to hope we can conclude a settlement with the United Farm Workers.”

   
 

Cargill Reports 3rd Quarter 2017 Results

Apr 7, 2017

    

In a press release dated March 29th, Cargill Inc. reported results for the third quarter of fiscal 2017 ended February 28, 2017. The company posted revenues of $27.3 billion up 8 percent from the corresponding third quarter in Fiscal 2016 at $25.2 billion.

Operating earnings advanced from $476 million in Q3 of Fiscal 2016 to $715 million for the most recent quarter. Net earnings for the third quarter of fiscal 2017 applying U.S. GAAP amounted to $650 million, 42% higher than $459 million in Q3 of fiscal 2016.

  

In commenting on results, David MacLennan, Chairman and CEO of Cargill, stated “We had strong results this quarter across our segments, evidence that we are on the right path forward.” He added “Gains in food ingredients, animal protein and industrials as well as progress by teams around the company to bring customers the full benefits of what Cargill has to offer were responsible for the improvements.”

Earnings in the Animal Nutrition and Protein (ANP) Segment rose “significantly.”

MacLennan noted higher consumer demand for beef in the U.S. and also food service demand for egg products following restocking of flocks depleted by the 2015 avian influenza epidemic. The company commented on competitive pressure in China and Russia and avian influenza in Korea and Japan as impacting global animal nutrition sales.

Cargill, which is a privately held company, has the ability to divert earnings from shareholder dividends to charitable ventures. The Company renewed contributions to the Feeding America program to relieve hunger. A three-year $3 million grant will provide children and families with greater access to fruits and vegetables, nutrition education and diabetes prevention.

Cargill also announced a three-year $7 million extension of its partnership with CARE, a prominent humanitarian organization fighting global poverty.

MacLennan noted “Our purpose is to nourish the world in a safe, responsible and sustainable way.” He added “We are proud of the broad and positive impact that arises from the combination of the work we do every day, our partnerships and contributions and volunteering in our communities.”

   
 

LIPHATECH CONFIRMS COMPETITIVE ATTRACTION TO CANNON™ SOFT BAIT

Apr 6, 2017

    

Liphatech has produced a time-lapse video using infrared cinematography to demonstrate the competitive attraction of Cannon™ soft bait compared to wax blocks containing bromethalin. 

 

The video speaks for itself showing avid consumption of bait leading to a profound decline in rat population in the subject dairy operation.

Details of the Liphatech range of pest management solutions can be obtained from the company website by clicking on the Cannon® logo on the right side of the welcome page.

See for yourself in this time-lapse video, rodents clearly choosing to consume NEW Cannon™ Soft Bait over the competitive bromethalin wax blocks. To learn more about controlling rodents and the world’s first bromethalin soft bait, view at:

   






















 
Copyright 2017 Simon M. Shane