Poultry Industry News

 

YUM! Brands Reports on Q2 of FY 2017

Aug 18, 2017

    

In a press release dated August 3rd Yum! Brands (YUM) announced results for the 2nd Quarter of Fiscal 2017 ending June 30th 2017.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

  

   
 

Weekly Broiler Production and Prices

Aug 16, 2017

    

The August 9th 2017 edition of the USDA Broiler Hatchery Report confirmed that 176 million day-old chicks were placed among the 19 major broiler-producing states during the week ending August 5th, two percent more than the corresponding week in 2016 Total chick placements for the U.S. amounted to 183 million.

Average hatchability was a nominal 83 percent for eggs set three weeks earlier. The unchanging 83 percent reported by the USDA is questioned in the light of comments that high-yield strains are showing suboptimal fertility and hence lower hatchability. Cumulative placements for the period January 7th through August 5th amounted to 5.62 billion chicks, two percent more than the corresponding period in 2016. The USDA Livestock, Dairy and Poultry Outlook issued on April 17th documented a one percent difference in chicks hatched and the number placed for broiler grow-out.

  

For the processing week ending August 5th 163.70 million broilers were processed at an average live weight of 2.81 kg or 6.17 lbs. (2.73 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 347,792 metric tons, 0.5 percent more than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 10,557,206 metric tons YTD, 0.9 percent more than YTD 2016.

   
 

Weekly Turkey Production and Prices

Aug 16, 2017

    

Poult Production and Placement:

The August 15th edition of the USDA Turkey Hatchery Report, issued monthly, documented 29.7 million eggs in incubators on August 1st 2017 (30.0 million eggs on July 1st 2017) up one percent from August 1st 2016. A total of 24.1 million poults were hatched in July 2017 (25.1 million in June 2017) down three percent from July 2016.

  

A total of 23.3 million poults were placed on farms in the U.S. in July 2017, down five percent from July 2016. This suggests disposal of 6.6 percent of hen poults hatched during July or 3.3 percent of the total hatch.

For the period January through July 2017, 171.11 million poults were hatched and 160.37 million were placed. This suggests disposal of 10.7 million hen poults over seven months representing 6.3 percent of the total hatch or 12.5 percent of hen poults hatched.

   
 

CME Prices

Aug 16, 2017

    

According to the August 10th WASDE release, 83.5 million acres of corn will be harvested to yield 14.15 billion bushels. The soybean crop is projected to attain 4.38 billion bushels from 88.7 million acres harvested.

 

On Friday August 11th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded, together with the bracketed value for the previous week.

COMMODITY

 

Corn (cents per bushel)

Sept. ’17   361     (367)     

Dec. ’17     375      (381)  

Soybeans (cents per bushel)

Aug.  ’17   935     (949)    

Nov. ’17    945      (957)  

Soybean meal ($per ton)

Aug.  ‘17   299     (304)

Dec.  ’17    305      (310) 

 

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

  • Corn:                     Sept. quotation down by 6 cents.                    (-1.6 percent)
  • Soybeans:            Aug. quotation down by 48 cents                    (-1.5 percent)
  • Soybean Meal:    Aug. quotation down by $5/ton                    (-1.6 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 August 11th edition of CHICK-CITE (enter WASD in SEARCH block) summarizing the August 10th USDA-WASDE Report #568, for a review of price projections and quantities of commodities to be produced during the 2017-18 season.

   
 

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

Aug 16, 2017

    

- Continued Improvements in Volume and Value Compared to 2016.

Data for the first half of 2017 indicate an improvement in export volume after lifting of embargos following the 2015 Midwest HPAI outbreak and the subsequent eight rapidly controlled events in March in Kentucky, Alabama, Georgia and Tennessee.  Broiler meat exports for the period January through June 2017 attained 1,509,928 metric tons, 4.3 percent higher than  the first six months of 2016 (1,447,058 metric tons)

  

During January-June 2017 the National Chicken Council, citing USDA-FAS data, documented exports of 1,638,806 metric tons of chicken parts and other forms (whole and prepared) valued at $1.679 billion with an average unit value of $1,025 per metric ton, 3.4 percent more than in January-June 2016 ($991 per m. ton).

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

  • Chicken parts                          95.0%;  Unit value $951 per metric ton   ($917)
  • Prepared chicken                      2.8%;  Unit value $3,537 per metric ton ($3,470)
  • Whole chicken                          2.2%;  Unit value $1,000 per metric ton ($1,207) 

   
 

American Humane Certifies Simply Essentials

Aug 16, 2017

    

The American Humane Association has announced that it has extended certification to Simply Essentials which operates a plant in Charles City, IA. Previously this facility operated as the Cedar River Poultry processing plant, but was extensively remodeled requiring an investment of over $30 million in 2016.

Simply Essentials has partnered with Prairie’s Best to grow broilers in the region. George Peichel, CEO of Prairie’s Best, stated “Making this kind of commitment to the community really means a lot and brings chicken processing in Iowa to a whole new level of sophistication as we build an extensive grower network to support Simply Essentials to produce healthier, antibiotic-free, humanely raised chicken that tastes great.

  

Robin Ganzert

The American Humane certified program ensures animals are raised and handled humanely through third-party audits covering a range of standards specific to livestock species. Standards are reviewed regularly by an independent Scientific Advisory Committee.

Robin Ganzert, President and CEO of American Humane, stated “By becoming an American Humane certified producer, Simply Essentials helps ensure their customers that food on their plates was raised humanely under the science and evidence-based protections established by American Humane.”

   
 

Evaluation of Alternatives to Antibiotics

Aug 16, 2017

    

A number of additive manufacturers presented data at the 2017 Poultry Science Association annual meeting during July.

Nutriad reported on the quorum sensing inhibition assay to select probiotic and botanical supplements based on their effect in vitro. Data derived from the laboratory evaluations were applied to field trials using a botanical with essential oils (Apex®).

  

At 48 days of age, subjective evaluation of the ileum showed that the mucosa from treated broilers had a greater potential for nutrient absorption compared to controls. The trial disclosed a lower prevalence of femoral head necrosis and a lower level of coccidiosis compared to controls. Comparing Apex® with an oregono product with a non-supplemented control, replicate pen trials demonstrated improved feed conversion and body weight using the botanical product.

The evaluation of intestinal integrity applying innovative technology was reported by scientists affiliated to Biomin cooperating with faculty at the University of Arkansas.

In addition to histological evaluation measuring villus crypt depth and the ratio of villus height to crypt depth, transepithelial electrical resistance (TER) was measured before and after lipopolysaccharide challenge. Biomin markets Poultry Star®, a symbiotic supplement incorporating both a prebiotic and a probiotic.

Intestinal histopathology was positively correlated with evaluation of intestinal integrity using TER and both approaches to evaluation were improved with supplementation of diets with the symbiotic.

   
 

Magnitude of Settlement in ABC Case Revealed

Aug 16, 2017

    

The July 5th edition of CHICK-CITE reported on the settlement between Beef Products Inc. and the ABC Network in which Beef Products Inc. was unjustly maligned by ABC over characterizing Lean Finely Textured Beef as “pink slime.”

The Plaintiff alleged that ABC misled viewers by repeatedly and deliberately demonizing a USDA-approved, safe and nutritious product. Resulting negative publicity and loss of business led to the closure of three plants and the loss of 700 jobs.

  

According to the Business Insider of August 10th, Dan Webb noted that the settlement vindicated the company and its product.

The magnitude of the settlement, presumably $177 million, was presumed following a review of the quarterly earnings report of the Walt Disney Company, parent of ABC, which noted the payment “in connection with the settlement of litigation.”

   
 

Costco Faces Lawsuits over E.coli Contamination

Aug 16, 2017

    

A lawsuit has been filed against Costco by a 20-year old woman who experienced severe complications following consumption of salad contaminated with E.coli. She is one of 19 plaintiffs affected by E.coli 0157H7 which can present as enteritis or in extreme cases hemolytic uremic syndrome.

The plaintiff underwent renal failure and is diabetic. She received a kidney transplant subsequent to recovering from the infection and her plans to have a family and to follow a career as a singer and actress have been curtailed by her illness.

  

   
 

Status of 2017 Corn and Soybean Crops

Aug 16, 2017

    

The USDA Crop Progress Report released Monday August 14th  recorded progress in corn and soybean development relatively consistent with 2016 indicated in the tables below:-

 

                                                                            WEEK ENDING

Crop

August 6th

August 13th

5-Year Average

Corn Silking

Corn Dough

           93

           42

           97

           61

            98

            62

Corn Dent

             7

           16

            20

Soybeans Blooming

           90

           94

            93

Soybeans Setting Pods

           65                         

           79

            75

                  

Crop

V. Poor

Poor

Fair

Good

Excellent

Corn Condition

     3         

   9

 26

  49

     13

Soybean Condition

     3

   9

 29

  49

     10

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

    15

   25

53

 7

                              Past Year

    10

22

59

 9

Subsoil moisture:  Past Week

    14

   26

55

 5

                              Past Year

8

23

63

 6

 

   
 

2017 Environmental Management Seminar

Aug 16, 2017

    

USPOULTRY has announced that the 2017 Environmental Management Seminar will take place September 21st – 22nd at the Hilton Beach Golf Resort and Spa in Destin, FL.  The program will include aspects of both live production and processing and will incorporate an update on the regulatory and legal aspects of environmental compliance.

  

Stephanie Shoemaker of Sanderson Farms, the Planning Committee Chairperson noted, “This annual event is a valuable learning opportunity for those of us who work on the environmental side of the poultry and egg industries.  The Planning Committee has worked diligently to provide quality and relevant speakers who will address the most current and pertinent environmental issues affecting the industry.”

For further information including registration access www.uspoultry.org

   
 

Cost Conscious Consumers are Driving Acceptance of House Brands

Aug 16, 2017

    

Dan Orlando writing in the August 8th edition of Supermarket News notes that the “great recession” created a high level of frugality among consumers.  Citing an IRI Consumer Connect survey, shoppers are apparently still comparing prices to meet their budgets. 

The survey showed that 94 percent of respondents favored low prices and 82 percent considered that availability of private labels was a significant factor in their choice of supermarkets.

  

Having tested private labels, 75 percent of shoppers considered them as good as national brands suggesting a trend towards universal acceptance of these alternatives.  The article noted that Millennials and Gen Xers have favorable experience of store brands which are frequently equivalent to national brands. This is in contrast to the Baby Boomer cohort who are reticent to buy store brands based on previous negative experience associated with inferior quality in the 1970s and 1980s.

Most chains will follow a policy of displaying both store and national brands although shelf space will obviously favor company products and pricing will be lower to generate a suitable sales volume per area of shelf space.

There will be continued demand for iconic brands with entrenched consumer loyalty especially if products have tangible attributes, are fairly priced and are supported by a mix of social media, TV, print and even radio promotion.

   
 

Lack of Disclosure by NIH over Glyphosate Questioned by Congress

Aug 16, 2017

    

Representative Trey Gowdy (R-SC) chairman of the House Committee on Government and Oversight Reform has expressed concern over the fact that the National Institutes of Health (NIH) was aware that there was no epidemiologic association between the use of glyphosate and the health of agricultural workers in 2013, without disseminating this information.

  

The NIH had available results from the Agricultural Health Study which exonerated glyphosate.  The data was not submitted to international organizations including the World Health Organization subsidiary, the International Agency for Research on Cancer (IARC).  In 2015 this organization issued a finding that glyphosate was a “probable human carcinogen” This action effectively delayed the re-approval of glyphosate for at least a year until the report by the  IARC was roundly discredited by U. S. and International scientists in academia and public agencies.

Following extensive review of counter-submissions, the European Commission extended the registration of glyphosate for a ten-year period although litigation in California still continues despite registration by the USDA.

Representative Gowdy is requesting the Director of the NIH, Dr. Francis Collins to explain why critical data was not released to the scientists involved in the evaluation of glyphosate.  Congress is also questioning funding of IARC through the NIH, given evident bias and contrived classification of a number of compounds and red meat as “probable carcinogens”.

Subscribers can access numerous posts on EGG-CITE and CHICK-CITE from 2014 onwards dealing with the activities of the IARC and glyphosate by entering these terms in the SEARCH block.

   
 

Target Reports on Q2 of FY 2017

Aug 16, 2017

    

In a press release dated August 16th Target Corporation (TGT) announced results for the 2nd Quarter of Fiscal 2017 ending July 30th 2017.

The market responded positively to a 1.3 percent increase in same-store sales compared to a 0.7 percent estimate.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

 

Brian Cornell

 2nd Quarter Ending  July 30th

2017

2016

Difference (%)

Sales:

$16,429,000

$16,169,000

+1.6

Gross profit:

$5,010,000

$4,997,000

+0.3

Operating income:             

$1,114,000

$1,248,000

-10.7

Net Income

 

            $672,000

$680,000

-1.2

Diluted earnings per share:

$1.22

$1.16

+5.2 

Gross Margin (%)

30.5

30.9  

-1.3

Operating Margin (%)

6.7

7.7

-13.5

Profit Margin (%)

4.1

4.2

-2.4

Long-term Debt:

$10,892,000

   $11,031,000

         -13.5

12 Months Trailing:

 

 

 

           Return on Assets    (%)

7.9

 

 

           Return on Equity    (%)

23.2

 

 

           Operating Margin   (%)

7.0

 

 

           Profit Margin          (%)

4.0

 

 

Total Assets

$37,366,000

   $37,431,000

          -0.2

Market Capitalization

$29,990,000

 

          

 

   
 

South Korea Lifts Ban on U.S. Poultry Imports

Aug 16, 2017

    

USAPEEC announced on August 16th that South Korea has belatedly lifted a blanket ban on poultry imports from the entire U.S. The market is now open for poultry products slaughtered on or after Aug. 16, 2017.

The ban was unjustified as it extended to all U.S. production, rejecting the OIE principle of regionalization. It is noted that during the approximately 130-day ban, South Korea was attempting to control outbreaks of H7 and H5 HPAI rendering the action against U.S. poultry illogical, contrary to OIE procedures and without epidemiologic foundation.

  

South Korea imposed the ban after detection of highly pathogenic avian influenza in March in a broiler breeder farm in Lincoln County, TN. Cases of North American lineage H7N9 LPAI were identified in broiler breeder flocks in contiguous Alabama a few backyard flocks and isolated single farms in Georgia and Kentucky. All of the flocks were diagnosed rapidly by either routine monitoring or surveillance and were depleted and disposed of by State and Federal intervention without evidence of lateral dissemination.

"We would like to extend our appreciation for the dedication and efforts of APHIS and FAS in getting this ban lifted," said USAPEEC President Jim Sumner He added "now, we look forward to seeing South Korea implement regionalization."

   
 

USDA-ERS Poultry Meat Production for 2017 and 2018.

Aug 16, 2017

    

The USDA-Economic Research Service released data for broilers and turkeys for 2016 (actual), 2017 (updated) and 2018 (forecast) respectively on August 15th. Broiler production was increased by <0.1percent for 2017, data for 2018 was unchanged from the July report.

  

Turkey production was reduced by 1.3 percent for 2017 but unchanged for 2018 compared with the July release. Forecast values for 2018 production and consumption are considered to be optimistic given 2017 offtake and inventories.

Metric values are tabulated below:-

Parameter

    2016 (actual)     

      2017
   (update)

    2018      Difference
 (forecast) ’17 to ‘18 (%)

Broilers

 

 

 

Production (m. metric tons)

18.497 

18.858

       19.216             +1.9

Consumption (kg per capita)

40.8

41.2

           41.6             +1.0

Exports (m. metric tons)

3.021*

3.097

         3.195             +3.5

Proportion of production (%)

16.3

16.4

           16.5             +0.6

 

 

 

 

Turkeys

 

 

 

Production (m. metric tons)

2.718

2.719

         2.809             +3.3

Consumption (kg per capita)

7.6

7.5

             7.7             +2.7

Exports (m. metric tons)

0.265*

0.277

          0.295            +7.6

Proportion of production (%)

9.8

       10.1

            10.5            +3.9

*Depressed by import embargos due to HPAI

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

   
 

Pilgrim’s Pride to Install Robotics

Aug 16, 2017

    

Pilgrim’s Pride has announced that it will extend robotics and x-ray technology to deboning.  According to a comment by CEO Bill Lovette, Pilgrim’s Pride will work with Scott Technology Ltd of New Zealand to develop suitable systems. 

This company is controlled by JBS SA., the holding company of Pilgrim’s Pride.

  

Robotics becomes financially feasible as workers’ hourly rates increase and in certain areas where labor shortages exist due to competition from industrial plants.

   
 

USDA- WASDE FORECAST #568, August 10th 2017

Aug 11, 2017

    

Overview

The August 10th 2017 USDA WASDE projections for the 2017 corn and soybean crops reflected planting data and estimates of yield based on crop progress. Harvest areas for corn and soybeans were unchanged from the July Report at 83.5 million acres (86.7 million in 2016) and 88.7 million acres (82.7 million in 2016) respectively.

The USDA lowered projected corn yield to169.5 bushels per acre from 170.7 bushels per acre (174.6 bushels in 2016). Soybean yield was raised to 49.4 bushels per acre from 48.0 bushels per acre (52.1 bushels in 2016). Ending stock for corn was lowered 2.2 percent from July and projected to be 2,273 million bushels (2,325 million in July WASDE Report). Ending stock for soybeans was adjusted up 3.3 percent to 475 million bushels (460 million in July 2017 WASDE Report).

  

Corn

The projection of the corn harvest was lowered from July attaining 14,153 million bushels, down 6.0 percent from 2016. None of the major categories of use were appreciably changed. The projected USDA range in farm price incorporated an 80 cents per bushel spread as is normal for a mid-year report with many uncertainties relating to weather until harvest. Price was unchanged from the July WASDE Report at 290 to 370 cents per bushel. At close on August 10th CME quotations for September and December 2017 corn were 360 cents and 373 cents per bushel respectively. September corn fell four percent after release of the August WASDE Report.

Soybeans

USDA projects a soybean harvest of 4,381 million bushels (was 4,260 million bushels in the July WASDE Report) due to an anticipated increase in yield to 49.4 bushels per acre. Use parameters were essentially unchanged from the July WASDE Report except that beginning stocks were decreased again by 40 million bushels to 370 million bushels and ending stocks were increased to 475 million bushels from 460 million bushels. USDA accordingly increased the August ex-farm price for soybeans for the 2017 harvest by 5 cents per bushel on the low end and decreased the projected price by 25 cents per bushel on the high end to a range of 845 cents to 1,015 cents per bushel. At close of trading on August 10th CME quotations for soybeans for July and September 2017 delivery were 1,023 cents and 1,031 cents per bushel respectively. September 2017 and January 2018 delivery were 938 cents per bushel and 954 cents per bushel respectively. Soybeans fell three percent after release of the August WASDE Report.

Projected output of soybean meal was adjusted downward to 46.1 million tons (was 46.3 million tons in the July WASDE Report). Estimated soybean meal prices were adjusted downwards by $5 per ton to $295 to $335 per ton. At close of trading on August 10th CME quotations for September and December 2017 soybean meal were $298 and $302 respectively.

   
 

Remote monitoring and Control of CHORE-TRONICS® 3 System

Aug 11, 2017

    

Chore-Time has launched a new Mobile App to monitor and control poultry house ventilation and environment using a mobile phone or device using Android or iOS operating systems.   

 

The Current Conditions screen on the CHORE-TRONICS 3 Mobile App allows remote access to critical production information including:-

•        The set, average and variable-speed temperatures
•        Current ventilation mode
•        Current day’s water and feed consumption
•        Static pressure
•        Relative humidity
•        Air speed
•        Current bird weight
•        Outside temperature
•        Carbon dioxide level in house air
•        PDS water column height

CHORE-TRONICS 3 is also available with an optional BROADCASTER™ Alert System, which delivers alerts through text notifications or landline and mobile calls. The system is designed to notify multiple contacts, in a pre-determined order until an acknowledgement code is entered.

“It is crucial for managers to take immediate action if something goes wrong with the climate control or other systems in a poultry house,” said Bob Christenson, Chore-Time Product Manager for Controls “The CHORE-TRONICS 3 Mobile App and BROADCASTER System work together to provide visibility and control.”

For additional details about the CHORE-TRONICS 3 Controller, Mobile App and BROADCASTER System are available at <www.choretime.com>.

   
 

Weekly Broiler Production and Prices

Aug 9, 2017

    

The August 2nd 2017 edition of the USDA Broiler Hatchery Report confirmed that 176 million day-old chicks were placed among the 19 major broiler-producing states during the week ending July 29th, two percent more than the corresponding week in 2016 Total chick placements for the U.S. amounted to 184 million. Average hatchability was a nominal 83 percent for eggs set three weeks earlier.

The unchanging 83 percent reported by the USDA is questioned in the light of comments that high-yield strains are showing suboptimal fertility and hence lower hatchability. Cumulative placements for the period January 7th through July 29th amounted to 5.43 billion chicks, two percent more than the corresponding period in 2016. The USDA Livestock, Dairy and Poultry Outlook issued on April 17th documented a one percent difference in chicks hatched and the number placed for broiler grow-out.

  

For the processing week ending July 29th 165.29 million broilers were processed at an average live weight of 2.73 kg or 6.00 lbs. (2.75 kg. last week) and a yield of 76.0 percent. The number of broilers processed was 0.1 percent more than the corresponding week in 2016. Processed (RTC) broiler production attained 349,148 metric tons, 1.4 percent more than the corresponding week in 2016. Processed (RTC) broiler production in 2017 has attained 10,209,414 metric tons YTD, 0.9 percent more than YTD 2016.

   
 

Weekly Turkey Production and Prices

Aug 9, 2017

    

Poult Production and Placement:

The July 13th edition of the USDA Turkey Hatchery Report, issued monthly, documented 30.0 million eggs in incubators on July 1st 2017 (29.4 million eggs on June 1st 2017) down 2.0 percent from June 1st 2016. A total of 25.1 million poults were hatched in June 2017 (25.0 million in May 2017) down 0.3 percent from June 2016.

  

A total of 24.3 million poults were placed on farms in the U.S. in June 2017, down 0.3 percent from June 2016. This suggests disposal of 6.8 percent of hen poults hatched during June or 3.4 percent of the total hatch.

For the period January through June 2017, 147.02 million poults were hatched and 137.44 million were placed. This suggests disposal of 9.58 million hen poults over six months representing 6.5 percent of the total hatch or 13.0 percent of hen poults hatched.

   
 

CME Prices

Aug 9, 2017

    

On Friday August 4th at close of trading on the CME, the following rounded quotations for corn, soybeans and soybean meal were recorded, together with the bracketed value for the previous week.

According to the July WASDE release, 90.9 million acres were planted to corn, three percent lower than the previous season with a predicted harvest of 14.3 billion bushels.

Farmers planted 88.7 acres to soybeans, up seven percent above 2016, with a crop of 4.3 billion bushels anticipated.

  

COMMODITY

 

Corn (cents per bushel)

Sept. ’17   367     (375)    

Dec. ’17     381      (387)  

Soybeans (cents per bushel)

Aug.  ’17   949     (997)    

Nov. ’17    957    (1,012)  

Soybean meal ($per ton)

Aug.  ‘17   304     (321)

Dec.  ’17    310      (336) 

 

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

  • Corn:                     Sept. quotation down by 8 cents.                    (-2.1 percent)
  • Soybeans:            Aug. quotation down by 48 cents                    (-4.8 percent)
  • Soybean Meal:    Aug. quotation down by $17/ton                    (-5.3 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 July 14th edition of CHICK-CITE (enter WASD in SEARCH block) summarizing the July 12th USDA-WASDE Report #567, for a review of price projections and quantities of commodities produced during the 2016-17 season.

   
 

Tyson Foods to Expand Hillshire Plant

Aug 9, 2017

    

Tyson Foods has announced that it will invest $50 million in a wastewater treatment facility and warehouse for their Campbell County plant in Alexandria, KY. 

The facility, acquired in 2014 manufactures a range of brands including Jimmy Dean. Hillshire Farm, Ballpark and Wright.  Tax incentives amounting to $400,000 were extended to Tyson Foods.

  

   
 

Wal-Mart Stores Restructures Food Management

Aug 9, 2017

    

According to the August 1st Supermarket News Wal-Mart Stores has elevated Shawn Baldwin, Senior VP and General Merchandise Manager for Produce and Global Food Sourcing to a new specific responsibility for “Hispanic shoppers”.

Seth Malley, Merchandise Manager for Frozen Foods has been promoted to VP and Division Merchandise Manager, Beverage.  Shawn Baldwin will be succeeded by Martin Mundo currently Senior VP of Operations, Southeast for Walmart U.S. 

  

The position of VP for bakery and deli departments has been split with Kerry Robinson responsible for bakery and Tyler Lehr for deli services. 

In commenting on the appointments and changing responsibilities Stewart Samuel, Program Director for IGD Canada who covers Wal-Mart Stores stated, “These new appointments also highlight Walmart’s determination to win with food in the U.S., an area that has been prioritized under the leadership of Greg Foran the CEO over the last three years.”  According to Supermarket News, Samuel is especially interested in the increased attention to the Hispanic market.

   
 

Concern over Fingerprint Identification

Aug 9, 2017

    

Supermarket News reports that Mariano’s a subsidiary of Kroger is facing a class-action lawsuit based on an alleged contravention of the Biometric Information Privacy Act. 

Companies using fingerprint ID systems should evaluate state laws applicable in their areas of operation to ensure that they are in compliance with respect to informed consent and retention of personal data including fingerprints. 

  

Since laws may vary among states, it is a worthwhile exercise for companies operating in multiple states to consult an employment professional to avoid possible class-action lawsuits brought avaricious attorneys.

   
 

Cargill Upgrades the Harrisonburg Hatchery

Aug 9, 2017

    

Cargill will spend $7 million to upgrade the Harrisonburg, VA turkey hatchery to improve poult health and worker safety.

Connie Isenhart, hatchery manager noted, “We are replacing equipment that has served us well for more than 30 years.”  She added, “new technology will reduce stress on the hatchlings due to advances in environmental control technology, which improves the survivability of day-old poults.”

“When our new system is operating at capacity, we will be setting more than 112,000 eggs daily to meet the needs of our turkey business,” Currently the hatchery sets 23 million eggs annually.

  

   
 

JBS Intends to Sell Moy Park

Aug 9, 2017

    

As predicted by CHICK-CITE, JBS SA has commissioned BNP Paribas SA in France to assist in the sale of Moy Park.  Companies expressing an interest in acquiring the company located in Norther Ireland include WH Group of China, Louis Dreyfus and Groupe Bigard as well as UK broiler producer 2-Sisters Food Group.

The most likely purchaser would be Cargill which has the resources to acquire the company and generate synergy with their existing UK Sun Valley operations. 

  

A negative relating to the sale would be the intended withdrawal of the UK from the European Union.  This could impede export of broiler products to EU nations.  Although 2-Sisters Food Group is a large producer in the UK, their balance sheet suggest that acquisition of Moy Park would increase leverage which would be prejudicial to their share price.

   
 

ACPV to Organize Education Session on Consumerism

Aug 9, 2017

    

Concurrent with the National Meeting on Poultry Health, Processing and Live Production, the American College of Poultry Veterinarians will organize a workshop entitled “Beyond Science: The Key to Connecting with Consumers”.

Training will be conducted by professional and will provide coaching and strategies to empower participants to communicate with consumers especially on issues relating to science.

  

For registration and further information, access the Delaware Poultry Industry site www.dpichicken.org

   
 

Pilgrim’s Pride Reports on Q2 FY 2017

Aug 9, 2017

    

In a press release dated August 2nd Pilgrim’s Pride Corporation (PPC) announced results for the 2nd Quarter of Fiscal 2017 ending June 25th 2017.

 

Bill Lovette

   
 

Tyson Foods Reports on Q3 FY 2017

Aug 9, 2017

    

In a press release dated August 7th 2017 Tyson foods (TSN) announced results for the 3rd Quarter of Fiscal 2017 ending July 1st 2017. Results were well received by the Street gaining 4.9 percent by noon on Monday August 7th over the Friday August 4th close, based on performance and guidance.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

  

   
 

USDA Appointments in Food Safety

Aug 9, 2017

    

Dr. Sonny Perdue has announced two appointments to maintain continuity of the safety and quality of the nation’s food supply.  Carmen Rottenberg was appointed as the Acting Deputy Undersecretary for the USDA Office for Food Safety. 

Rottenberg is a lawyer with experience in the Federal Trade Commission and has been with the FSIS since 2017. She has advocated science-based decision and considers enterprise-wide risks and benefits.

  

Paul Kiecker was named Acting Administrator for the FSIS.  He has been with the FSIS for 29 years starting as a food inspector in 1988.  He has extensive experience in regulatory operations serving successively as a district manager in various area offices requiring increasing responsibility. 

He has worked with the Office of Investigations, Enforcement and Audit and has cooperated with international organizations and law enforcement agencies.  In his new role he will have oversight responsibility for strategic planning, policy formulation and development of budgets.

Both incumbents will have to be confirmed in their positions. Ms. Rottenberg and Mr. Kiecker have extensive government experience and are qualified to perform their functions within the context of the USDA.  It is hoped that their deficiencies in the areas of science which would require formal training at the doctoral level in some aspects of public health or veterinary preventive medicine will be compensated by the input of colleagues into their decision making.

Ultimately the U.S. requires a consolidated food safety agency incorporating existing functions currently within USDA, the FDA and other agencies paralleling developments in the EU which have proven successful and beneficial.

   
 

Retirement of Dr. Mike Doyle

Aug 9, 2017

    

Dr. Mike Doyle has retired as the founder/director of the Center for Food Safety at the University of Georgia.

He established the Center in 1991 after a productive career at the University of Wisconsin-Madison.

  

His initial research concentration involved STEC E.coli responsible for hemolytic uremia syndrome acquired from consuming undercooked contaminated ground beef.  He was also involved in developing protocols to reduce Salmonella infection.

Doyle was named a Regent Professor at UGA and is a fellow of the National Academy of Inventors, the American Academy of Microbiology and the American Association for the Advancement of Science. 

He is a recipient of the Nicholas Appert Award from the Institute of Food Technologists and a Public Health Honor Award from the Centers for Disease Control.  He has served on the committees of many scientific organizations and has advised the World Health Organization, the Institute of Medicine, the National Research Council and the International Life Sciences Institute, the Food and Drug Administration and the USDA. 

In honoring Dr. Doyle, his successor Dr. Francisco Diez stated, “We are very thankful for his tireless efforts in advancing food safety microbiology and his leadership in inspiring many current and past Center for Food Safety researcher to excel in their own careers.”  Diez added, “the food safety center that Mike Doyle created in collaboration with numerous hard-working UGA faculty staff and students has served as a prototype for many other national and international institutions.”

It is hoped that following his formal retirement, Dr. Doyle will continue to participate in aspects of safety in the food industry and that his experience knowledge and creativity will be extended to commercial production.

Mike Doyle

   
 

Almanza Appointed as JBS Head of Food Safety and QA

Aug 9, 2017

    

According to an August 3, 2017 release by JBS SA., Alfred “Al” Almanza has been appointed as Global Head of Food Safety and Quality Assurance.  He was formerly head of the U.S. Department of Agriculture Food Safety and Inspection Service and completed a 40-year career with the Department, retiring as Deputy Undersecretary for Food Safety.  He was responsible for introduction of science-based food safety modernization efforts and regulatory strategies.  He is globally recognized as expert on food safety, risk management and inspection systems.

  

In his new role he will report directly to global president of operations Gilberto Tomazoni and will be based in Greeley, CO. leading food safety efforts throughout the company.

Beleaguered JBS, SA which includes U.S. beef and pork operations and Pilgrim’s Pride broilers is the target of extensive investigation in Brazil following allegations of improper inspection and bribery of Federal officials. Fortunately there has been no taint assigned to U.S operations. 

Irrespective of the outcome of restructuring and possible divestment of components of the JBS portfolio, Almanza is expect to make a significant contribution to the quality assurance and inspection functions within the company.  It is noted that imports of beef from Brazil into the U.S. have been suspended due to the presence of abscesses attributed to foot and mouth vaccine.  These lesions were undetected or allow to pass in plants exporting to the U.S. but were evident on arrival in the U.S. 

The question arises as to whether the appointment of Almanza is intended to upgrade inspection and quality control consistent with his background and knowledge or whether his previous connections with USDA are intended to facilitate restoration of exports to the U.S. Knowing Almanza and his integrity and even-handiness, demonstrated in his previous position, if given a free hand, he will motivate the necessary improvements to the benefit of JBS, its shareholders and its customers.

   
 

Restructuring of Corporate Management at Tyson Foods

Aug 9, 2017

    

Tom Hayes, President and CEO of Tyson Foods has restructured the corporate management of his company with appointment of group presidents to lead segments.  In their respective positions the appointees will be responsible for growth strategy, execution and developing teams to advance their segments.

Major appointments include:-

  • Sally Grimes – Group President, Prepared Foods
  • Doug Ramsey – Group President, Poultry
  • Noah White – Group President, Fresh Meats and International
  • Scott Rouse – Chief Customer Officer
  • Scott Spradley – Chief Technology Officer
  • Justin Whitmore – Chief Sustainability Officer
 

George Chappelle Chief Integration Officer will continue to lead the incorporation of AdvancePierre Foods and will then transition to Chief Operations Officer, Prepared Foods.  A number of executives will leave the company including Andy Callahan President North American Food Service and Monica McGurk Chief Growth Officer.

   
 

Hybrid Turkeys Establishes GP Farm

Aug 9, 2017

    

Hybrid Turkeys has entered into a contract with the Scheele Family to erect two new barns to produce eggs to be set in the new Hendrix Genetics turkey hatchery under erection in Beatrice NE.

 

   
 

Status of 2017 Corn and Soybean Crops

Aug 9, 2017

    

The USDA Crop Progress Report released Monday August 7th  recorded progress in corn and soybean development relatively consistent with 2016 but showing a slight trend in deterioration in quality as expressed in the tables below:-

 

                                                                            WEEK ENDING

Crop

July 30th

August 6th

5-Year Average

Corn Dent

Corn Dough

             -

           23

            7

           42

            11

            44

Corn Silking

           85

           93

            94

Soybeans Blooming

           82

           90

            88

Soybeans Setting Pods

           48           

           65

            62

 

                    

 

Crop

V. Poor

Poor

Fair

Good

Excellent

Corn Condition

     4         

   9

 27

  47

     13

Soybean Condition

     3

   9

 28

  50

     10

 

 

 

Parameter

V. Short

Short

Adequate

Surplus

Topsoil moisture:  Past Week

    16

   28

52

 4

                              Past Year

    10

23

60

 7

Subsoil moisture:  Past Week

    13

   28

55

 4

                              Past Year

8

23

64

 5

 
   
 

Hampton Creek Sued Over Label

Aug 9, 2017

    

Just Goods Inc. is suing* Hampton Creek over a trademark dispute according to a Bloomberg posting on August 2nd.  Jaden Smith, the principal of Just Goods Inc. claims that Hampton Creek agreed in 2014 to a specific depiction of the word “Just.” used on their “Just Mayo” label.

 

In May, Hampton Creek changed labeling emphasizing the word “Just” conflicting with the previous agreement which stipulated that Hampton Creek should adhere to a specific design with cursive letters and a small font. Just Goods uses an uppercase “JUST” in its logo.

The Bloomberg posting reiterated the numerous legal and financial problems experienced by Hampton Creek relating to apparent unethical repurchasing of product from store shelves to create the deception of consumer demand, uncomplimentary postings by disaffected employees on the Glassdoor website, and numerous defections among senior technical and management personnel.

*Just Goods Inc., v. Hampton Creek Inc. CGC-17-559876, California Superior Court, San Francisco.

   
 

Judge Rejects Challenge to Maryland Poultry Farm

Aug 9, 2017

    

According the Daily Times of Salisbury, a judge has ruled that an appeal entered by an activist group, Concerned Citizens Against Industrial CAFOs was submitted to the Wicomico County Board of Appeals after the statutory 30-day deadline, if only by 27 minutes.

Accordingly, the Board refused to hear the appeal and the environmental activist group failed in their legal challenge opposing a new farm in the County.

  

   
 

Wing Prices Concern Restaurants

Aug 9, 2017

    

The Buffalo News highlighted the increasing cost of wings served in specialty restaurants and pizzerias. High prices were cited by Sally Smith, retiring president and CEO of Buffalo Wild Wings in her commentary relating to the most recent quarterly report. An analysis of the trading statement showed a 10 percent increase in the cost of goods sold.

  

Demand for wings has increased during the past three years with increased demand from sports bars, restaurants and at-home consumption. On the supply side, there are only two wings to a broiler and total production of individual birds is only increasing at a rate of two percent per annum. Most of the increase in total output is derived from harvesting heavier birds. This in itself has created a problem since wings are larger contributing in part to the approximately 12 percent escalation in cost per pound over the last year.

It is assumed that flat wings formed from breast meat represent between 33 percent and 50 percent of sales by specialty Buffalo-wing stores. This segment of the casual dining industry has been remiss in product development and should have foreseen limitations in supply. Flat wings prepared from dark meat, which is considerably cheaper than breast fillets, would provide a product with higher margins, more favorable texture and relieve pressure on bone-in wings.

   
 

JBS Divests Shareholding in Vigor Alimentos S.A.

Aug 9, 2017

    

Subject to regulatory approval, JBS S.A. will divest their 20 percent stake in Vigor Alimentos S.A. to Groupo Lala, S.A.B. de CV. According to an August 4th release by JBS, the company will receive approximately $250 million after the close of the transaction.

Groupo Lala is listed on the stock exchange of Mexico and is the largest dairy group in the nation. The company has a market capitalization of $4.8 billion and posts annual sales of $3 billion.

  

   























 
Copyright 2017 Simon M. Shane