U.S. Broiler and Turkey Exports, January-February 2024

OVERVIEW

Total exports of bone-in broiler parts and feet during January-February 2024 attained 573,029 metric tons, 7.2 percent lower than in January-February 2023 (617,370 metric tons). Total value of broiler exports increased by 0.7 percent to $751.8 million ($746.5 million).

Total export volume of turkey products during January-February 2024 attained 33,173 metric tons, 41.7 percent more than in January-February 2023 (23,404 metric tons). Total value of turkey exports increased by 12.7 percent to $90.5 million ($80.3 million).

Unit price for the broiler industry is constrained by the fact that leg quarters comprise over 97 percent of broiler meat exports by volume (excluding feet). From the first quarter of 2021 through 2022, unit value of leg quarters increased consistent with international demand followed by a decline in 2023. Leg quarters represent a relatively low-value undifferentiated commodity lacking in pricing power. Exporters of commodities are subjected to competition from domestic production in importing nations. Generic products such as leg quarters are vulnerable to trade disputes and embargos based on real or contrived disease restrictions.

HPAI has emerged as a panornitic affecting the poultry meat industries of four continents with seasonal outbreaks. The distribution in the U.S. limits eligibility for export depending on restrictions imposed by importing nations

Ongoing outbreaks of African swine fever in China and Southeast Asia from early 2019 and Europe from 2010 onwards reduced the availability of pork. In addition, disruptions in chicken production and logistics due to COVID restrictions decreased availability of protein with international repercussions on trade in chicken and pork. The demand for pork imports to China has diminished with restoration of domestic hog production. Mild overproduction is evident in the white-feathered broiler sector with implications for exports other than feet extending into 2024.

EXPORT VOLUMES AND PRICES FOR BROILER MEAT

During January-February 2024 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 578,170 metric tons of chicken parts and other forms (whole and prepared), down 6.9 percent from January-February 2023. Exports were valued at $395.0 million with a weighted average unit value of $1,301 per metric ton.

The NCC breakdown of chicken exports for January 2024 by proportion and unit price for each category compared with the corresponding month in 2023 (with the unit price in parentheses) comprised:-

• Chicken parts (excluding feet) 2%; Unit value $1,256 per metric ton ($1,164)
• Prepared chicken 2%; Unit value $4,501 per metric ton ($4,202)
• Whole chicken 6%; Unit value $1,789 per metric ton ($1,593)
• Composite Total 0%; Av. value $1,330 per metric ton ($1,222)

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports during January-February 2024 compared with the corresponding months of 2023:-

COMPARISON OF U.S. CHICKEN AND TURKEY EXPORTS

JANUARY-FEBRUATY 2024 COMPARED TO 2023

BROILER EXPORTS

Total broiler parts, predominantly leg quarters but including feet, exported during January-February 2024 compared with January-February 2023 declined by 7.2 percent in volume but was up 0.7 percent in value. Unit value was 8.5 percent higher to $1,312 per metric ton.

During 2023 exports attained 3,635,178 metric tons valued at $4,739 million, down 4.2 percent in volume and down 9.2 percent in value compared to 2022. Unit value was down 9.5 percent to $1,284 per metric ton

Broiler imports in 2023 were projected to attain 72,000 metric tons (158 million lbs.)

The top five importers of broiler meat represented 49.5 percent of shipments during January 2024. The top ten importers comprised 66.9 percent of the total volume reflecting concentration among the significant importing nations.

During January-February 2024 Mexico was the first-ranked importer by volume and value with 124,385 metric tons representing 21.7 percent of export volume up 2.1 percent from January-February 2023. Value at $146.1 million was 19.5 percent of the total for exported broiler products during January-February 2024 and up 17.9 percent from 2023, but with a 16.6 percent increase in unit price to $1,179 per metric ton. Value was up 17.9 percent to $146.7 million with a 12.5 percent increase in unit price to $1,212 per metric ton. During February 2024 volume was up 2.2 percent to 61,325 metric tons and value increased15.0 percent from February 2023 to $74.3 million.

Taiwan was 2nd ranked as an importer during January-February 2024 with 47,439 metric tons valued at $146.7 million up 23.3 percent and 21.4 percent in volume and value respectively, compared to the previous year. Unit price was $1,236 per metric ton.

Cuba was the 3rd largest importer based on volume during January-February 2024 with 46,687 metric tons valued at $53.6 million down 10.5 percent in volume but up 5.9 percent in value compared to January-February 2023. Unit price was $1,146 per metric ton.

During January-February 2024 exports to China, 4th-ranked by volume and 2nd ranked by value represented 7.2 percent by volume and 18.1 percent by value of shipments. Exports were down 47.4 percent in volume to 41,272 metric tons and down 56.4 percent in value to $81.4 million compared to January-February 2023. Unit price was $1,972 per metric ton up 21.5 percent.

For 2023, 405,313 metric tons of U.S. broiler products were shipped to China, valued at $711,172 with an average unit value of $1,755 per metric ton. A breakdown of product categories and prices was provided by USAPEEC. Paws and feet represented 68.5 percent of volume and 73.1 percent of value with a unit price of $1,871 per metric ton. Legs and leg quarters comprising 22.6 percent of volume and 12.8 percent of value were priced at $990 per metric ton below the $1,302 average for all U.S. exports excluding China. Wings comprised 4.6 percent of volume and 5.7 percent of value with a unit price of $2,190 per metric ton. All other poultry products (including 4 tons of duck meat) amounting to 4.2 percent of volume and 8.4 percent of value attained an average unit price of $3,485 per metric ton

During January-February 2023 exports to Hong Kong increased by 222 percent in volume to 14,300 metric tons and 171 percent in value to $21.5 million with a unit price of $1,504 per metric ton. In 2022 and 2023 unit prices were $1,834 and $1,671 per metric ton respectively. Accordingly consignments are presumed to comprise a high proportion of feet with assumed transshipment to the Mainland as in past years.

During January-February 2024 nations gaining in volume compared to the corresponding period in 2022 (with the percentage change indicated) in descending order of volume with ranking indicated by numeral were:-

1. Mexico (+1%); 2.Taiwan, (+23%); 5, Guatemala, (+3%); 6. Philippines, (+53%); 7. UAE, (+77%); 9. Viet Nam, (+18%) and 11. Hong-Kong, (+222%).

Losses during January-February 2024 offset the gains in exports with declines for:-

1. Cuba, (-10.0%); 4. China, (-47%); 8. Canada, (-4%); 10.Angola, (-23%) 13. Haiti, (-31%).

TURKEY EXPORTS

The volume of turkey meat exported during January-February 2024 increased by 41.7 percent to 33,172 metric tons from January-February 2023 and value was 18.9 percent higher to $121.2 million compared to January-February 2023. Average unit value was 23.2 percent lower to $3,678 per metric ton.

Imports of turkey products were projected to rise to 38,640 metric tons in 2023.

For the entire year of 2023 export volume increased by 20.2 percent to 221,098 metric tons compared to 2022 and value fell by 2.0 percent to $620 million reflecting an 18.5 percent decrease in unit value to $2,829 per metric ton.

Mexico was the leading importer of turkey products during January- February 2024 with 24,120 metric tons representing 72.7 percent of total volume of 35,172 metric tons. Value at 64.6 million was 71.4 percent of the total with a unit price of $2,678 per metric ton. Volume was 44.4 percent higher and value was 9.3 percent higher than for January-February 2023.

The regions of the Caribbean (2,722 metric tons); East Asia, (998); Central America, (1,260) and sub-Saharan Africa (1,612) collectively imported 6,592 metric tons of turkey products in January-February 2024 representing 19.9 percent of volume and 20.7 percent of value amounting to $18.7 million. Unit price was $2,536. Regional unit prices per metric ton ranged from $1,652 for the Leeward-Windward Islands to $3,189 for Canada.

During January-February 2024 nations increasing volumes of purchases, albeit over a small base, compared to the corresponding months in 2023 with ranking comprised:-

1. Mexico, (+44%); Leeward-Windward Islands, (+45%); Dominican Republic, (+317%) and South Africa, (1,618%)
2. Canada reduced imports by 5 percent and 4. Jamaica by 51%).

PROSPECTS FOR 2024

The April 17th 2024 Livestock, Dairy and Poultry Outlook Report, retained the projection for 2023 exports of broiler products at 3.302 million metric tons (7,265 million lbs.). This value represents 15.7 percent of the projected production of 21.083 million metric tons (46,387 million lb.) of broiler RTC by the U.S. industry.

For 2024 exports of broiler products were forecast at 3.209 million metric tons (7,060 million lbs.), equivalent to 14.9 percent of forecast annual production of 21.409 million metric tons (46,875 million lbs.)

Projected export of turkey products in 2023 will be 222,272 metric tons, (489 million lbs.) or 9.0 percent of annual production of 2.481 million metric tons (5,457 million lbs.).

For 2024 exports of turkey products were forecast at 236,400 metric tons (520 million lbs.) equivalent to 9.7 percent of forecast annual production of 2.441 million metric tons (5,375 million lbs.)

It is important to recognize that exports of chicken and turkey meat products to our USMCA partners amounted to $1,264 million in 2021, $1,647 million during 2022 and $1,696 in 2023. It will be necessary for all three parties to the USMCA to respect the terms of the agreement since punitive action against Mexico or Canada on issues unrelated to poultry products will result in reciprocal action by our trading partners to the possible detriment of U.S. agro-industries.

 The emergence of H5N1strain avian influenza virus with a Eurasian genome in migratory waterfowl in all four Flyways during 2022 was responsible for sporadic outbreaks of avian influenza in backyard flocks and serious commercial losses in egg-producing complexes and turkey flocks but to a lesser extent in broilers. The probability of outbreaks of HPAI over succeeding weeks appears more likely as spring migration of waterfowl has commenced. Incident cases during April resulted in depletion of 8.5 million hens and a turkey flock. Outbreaks will be a function of shedding by migratory and domestic birds and possibly mammals. The extent of protection of commercial flocks at present relies on the intensity and efficiency of biosecurity, representing investment in structural improvements and operational procedures. These measures are apparently inadequate to provide absolute protection, suggesting the need for preventive vaccination in high-risk areas for egg-producing, breeder and turkey flocks.

The application of restricted county-wide embargos following the limited and regional cases of HPAI in broilers with restoration of eligibility 28 days after decontamination has supported export volume for the U.S. broiler industry. Exports of turkey products were more constrained with plants processing turkeys in Minnesota, the Dakotas, Wisconsin and Iowa impacted. Most nations have now lifted embargos that were previously placed on entire states or counties following outbreaks in the 4th quarter of 2024 as the WOAH mandated post-decontamination period has expired. The challenge will be to gain acceptance for vaccination based on intensive surveillance. Recognition that H5N1 HPAI is panornitic in distribution across six continents and is now seasonally or regionally endemic in many nations with intensive poultry production, suggests that vaccination will have to be accepted among trading partners as an adjunct to control measures in accordance with WOAH policy.

The live-bird market system supplying metropolitan areas, the presence of numerous backyard flocks, fighting cocks and commercial laying hens allowed outside access, potentially in contact with migratory and now some resident bird species, all represent an ongoing danger to the entire U.S. commercial industry. The live-bird segments of U.S. poultry production represent a risk to the export eligibility of the broiler and turkey industries notwithstanding compartmentalization for breeders and regionalization to counties or states for commercial production.

Aviagen in collaboration with Jamesway Incubator Company presented a hatchery workshop on April 8th to 11th at the Aviagen Development and Training Center in Albertville, AL.  Presenters included members of the Aviagen Global Incubation Team and specialists affiliated with Jamesway.

Eddy van Lierde, Global head of Incubation Services stated, “Attendees at the North American Hatchery Workshop experienced a blend of theoretical knowledge and practical insight into embryo development to improve hatchery performance.”  He added, “Aviagen is committed to ensuring our customers’ success providing them with the latest technology to achieve continuous improvement in their hatchery and businesses.”

Dr. Keith Bramwell, Director of Hatchery Consultancy for Jamesway observed, “We are honored to collaborate with Aviagen on this well-attended workshop.  It is always a pleasure to share our knowledge with hatchery managers and improve operations.”

Aviagen will collaborate with allied industry suppliers to present short modules that will complement the production courses including the month-long Production Management School.  The focused modules will be presented throughout the year and will address specific management topics benefiting Aviagen customers.

Generally public authorities sue processors in the event of contamination arising from wastewater discharge. In a recent legal action Gold Creek Foods, LLC. filed a lawsuit against the City of Dawsonville, GA over surcharges, penalties and threatened termination of water and sewer service. Gold Creek Farms has operated in Dawsonville for two decades and uses close to 200,000 gallons of water each week.

In their petition, the Company noted that termination of water would result in displacement of 400 employees.  Gold Creek Foods disputes the justification for surcharges and penalties relating to the quality of wastewater from the plant.  The Company pre-treats wastewater before discharging to the City sewer system and wastewater complies with EPA standards.  The Company maintains that testing carried out by the City is inappropriate and discriminates against Gold Creek Foods, the sole source of industrial wastewater.

Dr. James Barton has gained extensive experience in the poultry industry in the Southeast and California regions of the industry.  He is currently applying Ancera technology to solving practical problems throughout the poultry industry.  Recently EGG-NEWS had the opportunity to review his activities in the areas of reducing the impact of coccidiosis and Salmonella infection.

CHICK-NEWS:  James, please share your background and experience with our Subscribers.

Dr. James Barton:  My earliest memories of poultry production involved visits to the Animal Science Building at the University of Arkansas with my father Dr. Lionel Barton, who was the Extension Poultry Specialist for the state.  At an early stage I realized that poultry was a growing industry and wanted to contribute to progress in feeding people.

CHICK-NEWS:  Your formal training?

Dr. James Barton:  After three years of a pre-veterinary BS in Agriculture at the University of Arkansas I entered the LSU School of Veterinary Medicine, graduating in 1990.  I applied for and completed a residency in poultry veterinary medicine through the University of California Diagnostic Laboratory System. This enabled me to gain experience in broilers, egg production and turkeys.  Satisfying requirements, I earned Diplomate status in the American College of Poultry Veterinarians in 1992.  Subsequent practical experience allowed me to become a Charter Diplomate of the American College of Animal Welfare.

CHICK-NEWS:  Please describe your industry experience.

Dr. James Barton:  My first professional appointment was with Indian River in Texas as the veterinarian responsible for flock health and technical service both in the U.S. and for international customers.  I accepted a position with Zacky Farms in California working with broilers and turkeys as the company veterinarian.  I was subsequently offered and accepted a position with Cargill Turkeys in Arkansas that involved nine years of managing flock health, establishing a Salmonella control program, and initiating an animal welfare program.  From 2006 to 2009 I was responsible for flock welfare at Tyson Foods, requiring the implementation of procedures to demonstrate compliance with the emerging animal welfare expectations of customers and society.  At the request of the Arkansas Poultry Federation, I modernized the NPIP-approved laboratory while maintaining a consulting practice in the broiler, turkey, and layer industry.

CHICK-NEWS:  When did you join Ancera?

Dr. James Barton:  I was excited to become a member of the Ancera team in 2020 because of their advanced technology that offered food producers the opportunity to focus pathogen monitoring on financial objectives.  Ancera’s platforms provide insights that enable better decision making to maximize profits by lowering cost and increasing production.  Through the unique coccidia-monitoring program, it is possible to quantify the amount of coccidia exposure so that live production managers and vets can move off a failing program quicker and stay on an effective program longer.  Optimizing coccidia control has become even more necessary with the adoption of drug-free and NAE broiler production.

CHICK-NEWS:  How is the program implemented?

Dr. James Barton:  Individual fecal samples are analyzed at our laboratories with a novel diagnostic device called PIPER, which specializes in high-quality, high-throughput microbial enumeration techniques. The basic oocyst per gram data are converted into a graphical image representing the status of the house, farm, and complex over time.  More importantly, Bayesian modeling expresses the current coccidia control status relative to optimal performance expected from the specific control program.

CHICK-NEWS:  Ancera is now applying technology to monitor Salmonella.  Please elaborate.

Dr. James Barton:  Ancera has acquired the global commercial rights for technology developed by Dr. Nikki Shariat at the University of Georgia which involves identification of the CRISPR gene sequences that are unique to Salmonella serotypes. By commercializing this technology and building a user-friendly software platform, our first integrator customers are monitoring the prevalence of their KPI serotypes and getting new visibility into transmission risk patterns. Ancera believes that the future of pre-harvest control of Salmonella infection will depend on recognizing that each Salmonella serotype has a specific behavior – rather than trying to treat Salmonella as a generic organism.  Because traditional Salmonella culture techniques select for the serotypes that are best adapted to artificial media, the presence of multiple serotypes within a flock is overlooked very, very often.  The serotypes that are missing detection in the live flocks can be the ones that are problematic in post-chill carcasses, parts, and ground poultry meat.  Ancera believes that it is necessary to have a close relationship between poultry health and quality control teams within a production company to achieve effective control of potential foodborne pathogens.

CHICK-NEWS:  What does Ancera offer for the future?

Dr. James Barton:  We are very close to launching an assay for Total Viable Bacteria (TVB) that will be independent of culture technology. We are also well down the path of developing a quantitative assay for Clostridium perfringens based on fecal counts that will be valuable in managing programs to inhibit necrotic enteritis and potentially related infections. Finally, we regularly hear from customers about the need to objectively understand whether their vendors’ products used in control programs and interventions are working as intended. We’re excited to share some new developments in this area shortly.

CHICK-NEWS:  Do you have any observations based on your extensive experience?

Dr. James Barton:  The post-DVM training programs should reevaluate the advanced education of poultry veterinarians given the need to base technical decisions on the financial performance in an industry that continues to undergo consolidation.  It is imperative that technical experts become even more involved in quantifying the return on investment from products and management practices – driving the management decisions with effective messaging, based on high quality evidence.

A preliminary release on April 15th by USPOULTRY addressed Project #719 Longitudinal Assessment of Skeletal and Cardiac Structures in Broilers Reared Under Slow Versus Fast Growth Rate Regimen and its Relation to Lameness, Ascites and Woody Breast Condition.

The study conducted by Dr. Prafulla Regmi of the Department of Poultry Science, University of Georgia addressed critical issues in live broiler production.  Due to the restrictions placed by major journals on release of specific data prior to publication, publication of results will be deferred to an appropriate time.  The USPOULTRY release did however include the comment that restricting growth rate can influence welfare parameters but the frequently quoted 50 g per day growth rate promoted by welfare activists is invalid.  The breaking strength of bones is not increased by reducing growth rate.

CHICK-NEWS will review the article and its implications on publication and will comment on data in relation to production programs.

In an eight-week longitudinal study conducted in Singapore, no beneficial effect could be attributed to substitution of an omnivorous animal-based meat diet with plant-based meat analogues.  The study was conducted over eight weeks, and involved 82 participants with an elevated risk of diabetes. 

The trial demonstrated a significant interaction (time x treatment) for dietary trans-fat that was increased with the animal-based diet.  In contrast, fiber, sodium and potassium all increased with the plant-based meat analog diet.  Glycemic homeostasis was better regulated in the subjects consuming the animal-based meat diet.  Substitution of plant-based meat analogues in the diet had no effect on lipoprotein profile including low-density lipoproteins and cholesterol.

Health claims made by proponents of plant-based meat analogs will require careful review by health professionals, the FDA and health conscious consumers.  This is especially important with respect to labels and advertising claims.

The U.S. District Court for the Western district of Missouri ruled as constitutional the 2018 statute relating to potential misrepresentation of vegetable-based products as meat.

The Missouri statute, according to the court, did not prohibit commercial speech and was in accordance with the First Amendment.  Turtle Island Foods, manufacturer of Tofurky, clearly labels its product as being ‘plant-origin’.

Missouri Attorney General, Andrew Bailey, stated, “Ensuring that the truth of products sold within the state of Missouri is of importance to both consumers and the farmers and ranchers that produce food.”  The Missouri Cattlemen’s Association welcomed the judgment, noting “The legislation in no way prohibited the sale of consumption of these imitation products but it did require truthful and accurate labeling.  Misleading consumers is unacceptable.”

Opponents of restricted legislation maintain that consumers are not confused by meat substitutes with labels that clearly indicate plant-based origin. These products are usually placed in display areas separate from animal-derived meat and with clear labeling of packages.

According to USDA-FAS GAIN Report BR2024-0002, Brazil will increase broiler production to 15.10 million metric tons (33.22 million lbs.) of RTC, an increase of 1.3 percent over 2023.  Of this total, 33.0 percent will be exported amounting to 4.975 million metric tons (10.94 million lbs.) or an increase of 4.3 percent over 2023.  Assuming a population of 220 million, domestic per capita consumption will be 46.0 kg (101.3 lb.).

The GAIN Report noted that in 2023, feed cost representing 68 percent of live-bird cost declined by 22 percent with a corresponding 14 percent drop in chick cost representing 15 percent of live bird cost.  The major increase was a 13 percent rise in the cost of electrical power that represented 2.5 percent of live bird cost.

With regard to exports, Brazil introduced electronic certification for the E.U. that will expedite approval of shipments and reduce cost.  The Brazilian Association of Animal Protein (ABPA) noted expansion into new markets including Israel, the Pacific Islands and Algeria.  In the case of this nation, Brazil donated 10,000 metric tons of chicken meat as a humanitarian gesture and to gain a foothold in the market.

For 2023, the top importers of chicken from Brazil comprised China (14 %); UAE (9%); Japan (9%); Saudi Arabia (8%) and South Africa (7%).

Brazil has apparently benefited from its status as “free of avian influenza in commercial farms”.

This situation is questioned since the nation reported 158 cases of H5N1 HPAI in backyard flocks and wild birds but miraculously none in commercial flocks.  Eight states reported HPAI including all the major broiler producing areas.

Legislation banning the sale of cell-cultured meat in Florida, will take effect on July 1st, 2024.  This legislation is essentially a “feel-good” measure in response to political pressure since there will not be any commercially available cell-cultured meat on July 1st, 2024, or for that matter, in the foreseeable future.

Vegan advocates consider that cell-cultured meat would be an improvement over conventional beef, pork and chicken based on welfare and environmental criteria.  Organizations opposing animal agriculture are also pushing the health aspects of non-meat diets citing an unproven scientific relationship between intake of dietary cholesterol and cardiovascular disease in otherwise healthy consumers.

The Delmarva Chicken Association and the Alliance for the Chesapeake Bay will fund a $2 million program over three years to promote best management practices for producers on the Delmarva Peninsula.

Funds will be used to improve riparian buffers and apply enhanced conservation, drainage and litter management.  The intent is to reduce the release of nitrogen and phosphorous into Chesapeake Bay.

Participating farmers will be eligible for cost-share conservation initiatives including planting of trees, establishing pollinator areas between houses and around retention ponds.

Chick-fil-A has dropped the strict No Antibiotics Ever (NAE) to a modified No Antibiotics Important to Human Medicine (NAIHM).  The Company has not specified the compounds that will be allowed but if this includes ionophore anticoccidial there will be a benefit to producers with no adverse effect for consumers.  Ionophores are not regarded as “antibiotics” in the E.U. but because the compound suppresses some intestinal bacteria they were unjustifiably included as “antibiotics”, with respect to the FDA classification.  If the Chick-fil-A standard allows the  use of feed additive bacitracin, there will be no deleterious effect since this compound is not used for human medicine other than as a topical application and does not contribute to the emergence of antibiotic resistance.  Inclusion of bacitracin in broiler diets will suppress Clostridium spp. responsible for necrotic enteritis and gangrenous dermatitis.

It will be interesting to observe consumer response to the change in policy that will probably rise to the level of a large yawn. This will hold providing the chain maintains quality and value and can assure customers of ongoing welfare in production that conforms to the NCC standards.

The action by Chick-fil-A parallels the earlier announcement by Panera Bread and could initiate a trend among QSRs and mid-priced supermarket chains to adopt a more realistic policy on antibiotics consistent with scientific and financial realities.

Taylor Farms has recalled ten tons of ready-to-eat apple walnut chicken salad due to non-label disclosure of wheat. Affected product was manufactured between February 28th and March 9th and marketed in Kroger stores in twelve western states.

Product recalls are usually attributed to contamination with pathogens, the presence of foreign material or improper labeling. Misbranding involving the inclusion of a non-declared allergens is a self-inflicted wound and can be avoided by appropriate quality control and coordination within a company.

Freirich Foods, a family-owned enterprise established in 1921, recently filed for Chapter 11 bankruptcy protection.  This action was taken following a $7 million loss arising from 1.2 million pounds of product that was mishandled by a third-party cold storage company. 

The filing will allow the company to restructure finances, maintain solvency and to restore profitability for the benefit of the owners, creditors and indirectly, 100 workers.

In a statement, the CEO noted, “Bankruptcy protection will enable our company to safeguard our business, employees, customers, and partners while we seek to recover our financial loss and propose a plan to restructure debt and renegotiate contracts. We will emerge from this process with a stronger balance sheet”.

It is questioned whether the company can recover the loss through insurance or a lawsuit alleging negligence.

The Department of Labor has filed lawsuits against three California poultry processors alleging violations of child labor law.  The Wages and Hours Division has been reviewing plant employment records and conducting inspections uncovering “oppressive child labor at poultry processing facilities.” According to the submissions by the Department of Labor the three companies concerned employed children under the age of 18 to debone poultry in contravention of child labor laws.

Defendants include L&Y Food Inc., Moon Poultry Inc. and JCR Culinary Group Inc. and their three respective managers in their personal capacities.

The Department of Labor was granted an injunction embargoing products from the plants although there was evidence that the restraining order was defied.  The Agency alleged that the defendants obstructed investigations including review of employment data.

A July 2022 lawsuit filed in Federal court in Georgia against Perdue Farms was recently dismissed. Roger Parker the Plaintiff, claimed misclassification as an “independent contractor” and that the Company retaliated by terminating his contract for registering  complaints under the Packers’ and Stockyards Act. The Plaintiff, also claimed improper compensation due to under-weighing of broilers delivered.

Parker held that since contractors are “treated like employees” they should receive employee benefits including overtime. This is a somewhat fallacious characterization given the nature of the relationship between the contractor who supplies housing, labor and utilities and the integrator providing chicks and feed and extending service as defined in the contract.

Parker was unable to establish a Class for the lawsuit as he faced understandable lack of interest among contractors willing to participate in the litigation.

Hormel Foods has agreed to pay three classes of Plaintiffs in a suit alleging collusion on pork prices.  Commercial indirect purchasers will receive $2.4 million, direct pork purchasers, $4.8 million and consumer indirect purchasers, $4.5 million.

Collectively, there were 146 claimants in 27 cases that were consolidated during December 2022.

The settlement by Hormel Foods follows a June agreement by Seaboard Foods to pay the class of direct purchasers $9.8 million to settle the lawsuit.

Cody Easterday currently serving an 11-year prison sentence for defrauding Tyson Foods of $144 million has filed suit against the Company.  At issue, is a claim that Easterday was offered a share of the profits from sales of meat products designated “Cody’s Beef” marketed in Japan.

Cody claimed $100 million for using his name and image on product labels.  His original filing with the U.S. Court of Appeals for the Ninth Circuit was dismissed but Easterday is persisting in his litigation.  Tyson Foods categorically rejects the claim based on the absence of any proof relating to any obligation by Tyson Foods to share in profits.

Costco is undertaking a five-year action plan to reduce the use of plastic packaging.  The company markets close to 150 million rotisserie chickens annually, currently presented in two-part PET containers.  Following test in Canada, the Company has introduced a flexible plastic bag with insulating capability for their chickens.  The change will reduce plastic use for this application by 75 percent, representing a saving of 17 billion pounds of resin annually and a reduction of 4,000 metric tons of carbon dioxide released.  This, according to a Company claim will be equivalent to the output of 1,000 trucks annually when fully implemented across 850 warehouses globally.

Tim Wahlquist responsible for Costco packaging stated, “The goal is to reduce packaging waste while still protecting products, ensuring food safety and complying with laws and regulations. As a corporate policy, Costco will replace plastic packaging with potentially recyclable content as feasible alternatives become available.

Case Foods and Mountaire Farms have agreed to pay $8.5 million and $13.5 million respectively to the class of workers alleging collusion in setting wage rates.

The lawsuit was filed in 2019 and claimed interaction among employers to agree on wage rates and to indirectly share information through AgriStats®.

Recently Perdue Farms settled for $60 million, but there are eighteen integrators still named as defendants.

The California Air Resources Board (CARB) has requested the EPA to allow California to issue regulations to limit emissions by locomotives.  The proposed requirements would include:-

• Decommissioning of locomotives older than 23 years at the beginning of 2030,
• Impose reporting requirements and administrative fees
• Require railroads to shut down other than zero-emission locomotives when transiting in certain areas.

The proposal has resulted in considerable opposition including the National Chicken Council and ninety federal and state agencies and infrastructure associations.  A joint letter to the Director of the EPA stated, “If the CARB regulations are authorized by EPA, we believe freight rail carriers and their customers would be significantly hindered financially and operationally”. Clearly the proposed requirements presume technology that is currently unavailable or will be impractical to implement.

The proposed CARB restrictions appear to be preempted by federal law that allows the Surface Transportation Board to exercise jurisdiction over the operation and activities of freight railroads in interstate commerce.

Subscribers will recall the difficulties encountered by Foster Farms in obtaining adequate quantities of corn due to reduced rail transport during COVID and 2023 labor action against railroad operators, resulting in litigation and appeals to the Surface Transportation Board.

According to USDA-FAS GAIN report IN2024-0015 released on March 25th India will allow importation of duck meat. During early March, the Ministry of Commerce and Industry authorized imports of premium frozen duck meat in accordance with a harmonized tariff system.

Import duties for duck meat have been reduced with expectations of shipments to the Nation from the U.S albeit it in competition from producers in the E.U. and Asian nations including Thailand and China.

KFC has introduced five new sauces for their white-meat chicken nuggets.  Priced at $5.99 for ten, Saucy Nuggets are available with one of three new flavors and two held over by demand.  They include honey sriracha, Korean BBQ, sweet and sour, natural hot and Georgia gold honey mustard.

A recent study by Dr. Matthew Stasiewicz at the University of Illinois indicated that regulatory concentration on high levels of known virulent Salmonella serotypes would benefit public health.  To date, Salmonella standards have been based on prevalence resulting in an evident reduction in recovery from processed poultry. Unfortunately there has not been a corresponding reduction in the incidence rate of chicken-related salmonellosis among consumers. 

The risk assessment concluded that specific products with high levels of pathogenic serotypes should receive attention in order to develop appropriate control modalities.  Dr. Stasiewicz suggested that programs focusing on generic prevalence of Salmonella may contribute to the emergence of more pathogenic serotypes such as Salmonella Kentucky.

The risk assessment was supported by a grant from the USPOULTRY Foundation.

The Environmental and Natural Resources Division of the Department of Justice (DOJ); the USDA Animal and Plant Health Inspection Service (APHIS) and the USDA Office of General Counsel have issued a Memorandum of Understanding (MOU) on civil and judicial implementation of the Animal Welfare Act. In the event of an overlap among federal agencies, MOUs designate the relative jurisdiction and responsibilities and coordination of activities including the sharing of information and enforcement.  

Following an infraction of the Animal Welfare Act the Federal government can implement civil action through the DOJ requiring federal district court action.  In most cases, the APHIS can pursue administrative enforcement that can involve a warning with a settlement agreement with or without imposing a monetary penalty.  APHIS has the authority to suspend or revoke licenses, issue cease-and-desist orders and impose civil penalties through the administrative law process.

The MOU establishes a priority for repeat offenders and egregious violators.  Plants that will receive attention include facilities with a history of multiple citations or involving noncompliance.  Licensees considered for suspension will have previously denied inspectors access or operate with defective records or exhibit a pattern of interference with inspectors. The MOU will facilitate coordinated action by the agencies involved.

The MOU is probably a response to a petition by animal rights and welfare organizations to allow local law enforcement and judicial agencies to intervene in cases of alleged deviations from the Animal Welfare Act.

Additional information can be obtained from the APHIS website www.aphis.usda.gov/awa/enforcement

In September 2023, animal welfare association Animal Partisan filed a petition with FSIS urging local and state investigation and prosecution of overt abuse of livestock in abattoirs.  The Veterinary Association of Farm Animal Welfare (VAFAW) supports the petition but deviates from Animal Partisan in maintaining that states do not have the right to supersede federal officials with respect to oversight of welfare.  The VAFAW has requested the FSIS to interact with local and state agencies in the event of any deviations from the Federal Meat and Poultry Inspection Acts.

USDA inspectors are empowered to close plants by suspending inspection in the event of abuse.  Referring cases to local or state officials is a reasonable action and could serve to strengthen welfare by focusing management attention on this aspect of plant operations.

In an April 8th release, USPOULTRY and the USPOULTRY Foundation approved funding amounting to $363,000 for three research projects dealing with poultry meat production.  These comprised: -

• Necrotic enteritis in chickens: understanding the immunological basis of host immunity North Carolina State University
• Cross-sectional and longitudinal epidemiologic investigations of Ornithobacterium in commercial turkeys.  Iowa State University
• Technology for poultry hatcheries to simultaneously deliver vaccines and prebiotics.  University of Delaware

According to USDA-FAS GAIN Report E42024-06 released on February 27th, projected broiler production among E.U. nations will increase by 0.8 percent from calendar 2023 to 11.11 million metric tons.  Imports will attain 750,000 metric tons representing 6.8 percent of production.  Exports will rise to 1.67 million metric tons or 15 percent of production.  Net exports will therefore represent 8.2 percent of production at 0.92 million metric tons.  Given an E.U. population of 450 million, projected per capita consumption will amount to 22.6 kg (49.8 lb.) approximately half that of U.S. consumption.

Restraints to output include highly pathogenic avian influenza that has persisted since 2021.  Other hindrances include environmental restraints with limits on nitrogen emissions in the Netherlands and Belgium.  Although the price of ingredients has declined, production costs in France remain high and are limiting output. Economists forecast increase demand for chicken based on the competitive price and availability of pork and beef.

A major issue of contention is the importation of chicken from Ukraine without duty following E.U. regulation 2023/1077.  Poland, the largest producer in the E.U. has requested limits on the importation of broiler products from their eastern neighbor.

Although the U.K. represents a strong market for E.U. chicken, supplied mainly from Poland and Germany, there is now increased supply from Brazil, Thailand and Ukraine. Competition from Brazil, the consistently low-cost supplier has eroded markets for the E.U. in Africa, the Middle East and especially South Africa.

Superior Farms has operated within the city of Denver for decades.  The company processes  mutton and is the last remaining abattoir in the City that once was the terminal of cattle trails hosting extensive stockyards. A 2024 ballot initiative will determine the fate of the company in its present location.  The proposed ordinance is intended to eliminate slaughtering operations in the City of Denver. The justification is not on the basis of nuisance, odor, pressure on effluent treatment as would be expected but is advanced by the deliberate misnomer of ‘welfare’. It is evident that the proponents of the ballot initiative are appealing to sentiment with the true agenda of veganism obscured by the concept of welfare. This is evidenced by the wording of the ballot that included “to promote community awareness of animal welfare, bolstering the City’s stance against animal cruelty and in turn to foster a more humane environment in Denver.” 

Superior Farms slaughters lambs and processes carcasses through to case presentation.  The plant employs 160, of whom 80 percent are Denver residents. Rick Stott, CEO maintains that despite polls showing even levels of either support or rejection “voters will resonate with a message of saying it’s not fair to target a particular business.”  Superior Farms operates a facility in Dixon, CA.  

Forced closure of the plant in Denver would reduce the supply of domestic lamb to the U.S. market that will simply be substituted by imports from New Zealand and Australia. Even if the ballot initiative fails the proponents will be back in two years. They recognize the vulnerability of Superior Farms and the publicity associated with an eventual victory. Success in pro-vegan ballots generates funding for the organizers and reinforces a feeling of self-satisfaction through aggressively promoting a lifestyle that is opposed to intensive livestock production.

The Attorney General of Georgia, Chris Carr, has joined 26 other Attorneys General to oppose the Effluent Limitations Guidelines proposed by the U.S. Environmental Protection Agency.

Opposition to the proposed guidelines is based on the high cost of compliance that would increase the price of meat, poultry and egg products to consumers.  It is estimated that with the more stringent guidelines, EPA jurisdiction over 150 processing plants would be increased to 3,000 facilities.

The letter submitted by the AGs noted “Evident escalation in the intensity of regulations issued by federal agencies, harms the integrity of our judicial system and this Administration should stop abusing the legal system to achieve results it otherwise cannot get”.  Legality of the Effluent Limitations Guidelines is questioned since the proposed rule would extend the statutory authority of the Environmental Protection Agency under the Clean Water Act.

A ProMed report confirmed a recent outbreak of H5N1 avian influenza in Chang Hua County involving 20,000 hens that were depleted.  Previous outbreaks have occurred in Ping Tang and Tainan in February.  Since January “tens of thousands of hens” have been culled in Yunlin County resulting from exposure to H5N1 presumably from wild birds. 

With numerous small and intermediate-sized duck and egg farms in close proximity and a live bird market system for broilers, Taiwan is candidate for vaccination against avian influenza H5N1. This is based on the location of the island nation on migratory bird routes and a history of recurring avian influenza suggesting a seasonal endemic status justifying protection.

The U.S. Department of Labor has filed for a temporary restraining order on Fayette Janitorial Services, LLC to prevent employment of minors in plant-cleaning operations.  According to documents submitted to the U.S. District Court for the northern district of Iowa, the company has employed minors in sanitation activities at plants in Iowa and Virginia.

A spokesperson for Perdue Farms that terminated the contract with Fayette prior to the Department of Labor action, stated, “Underage labor has no place in our business or in our industry.  Perdue has strong safeguards in place to ensure that all associates are legally eligible to work in our facilities and we expect the same of our vendors.”

The Department of Labor is intent on enforcing federal law relating to employment of children in dangerous occupations and generally safeguarding workers.

Fayette Janitorial Services, LLC, based in Somerville, TN, operates in 30 states with 600 employees.

In addition to contravention of child labor laws, the investigation will also include possible trafficking and exploitation. If documented, cases will be referred to the Department of Justice.

According to USDA-FAS GAIN Report, UP2024-0004, released February 22nd, chicken production in 2024 will expand by 3.1 percent to 1.340 million metric tons.  Total imports will attain 52,000 metric tons and exports 440,000 metric tons with net exports representing 29 percent of production.  Of the 952,000 metric tons for domestic use, per capita, will attain 26kg (57 lbs.) assuming a population of 37 million.

Despite the invasion of Ukraine by the Russian Federation in 2022, the chicken industry has survived and expanded.  This, in part, is due to the location of facilities in the central and western regions of the Nation together with the availability of grains at relatively low cost.

Production in Ukraine is dominated by MHP SE, responsible for 70 percent of output.  This public-traded company has received loans through recent critical periods and enjoys the benefits of full integration from cultivation of feed ingredients, oil seed crushing, live production, processing and distribution.  In addition to MHP, medium-sized producers include Agrooven, Dniprovskyi, Volldymyr-volynsk, PTA Hofabryka, Hubyn and Ular.  Collectively, MHP and these companies are responsible for 90 percent of production.

Following the 2022 invasion, supply chains were disrupted and the Black Sea export route was closed.  Labor availability was impacted by workers who volunteered for military service and as a result of conscription.  During late 2022 and through 2023, infrastructure was repaired and the front line in the east of the nation was stabilized.  Following the collapse of the Black Sea Grain Initiative, Ukraine established export capability through the coast-hugging Humanitarian Corridor and by rail transport. Currently exports are restrained by a shortage of refrigerated containers.

The E.U. is the main importer of chicken from Ukraine based on tariff-free and quota-free market access granted by the European Commission. Other factors favoring Ukraine include proximity to E.U. markets and a favorable production cost relative to Eastern Europe.

Europe intends to impose tariffs above a level of 160,000 metric tons although below exports to the E.U. in 2023. In the event that Ukraine becomes non-competitive above the free-trade level as a result of tariffs, the nation will explore export opportunities for exports to the Middle East.

To prevent overproduction and to limit the importation of feed grains and soybeans, the Agricultural Ministry of China will place a cap on the number of sows in the national herd and the expansion of farms producing pork. Overproduction has reduced prices resulting in a sharp decline in imports.

The Ministry statement included, “the normal retention and fluctuation in the range of fertile sows in production, capacity reduction and other measures set in the previous regulatory plan are no longer well adapted to ensure stable feed production under the new situation.”  The national target for breeding sows will be reduced from 41 million to 39 million.

Overproduction of pork, the preferred animal protein in China, with correspondingly low prices is deleterious to domestic broiler production and imports. Rationalizing production should level the playing field to the benefit of processors and exporters.

MF Meats located in Falconer NY. has recalled 46 tons of raw meat products contaminated with mineral oil disallowed by FSIS.  Over the period November 26, 2023, through February 16, 2024, the Company used a nonapproved mineral oil in the place of food-grade lubricant due to an error made by a supplier.

The problem was recognized following complaints of abnormal taste leading to an investigation that disclosed the misapplication of mineral oil.  It is evident that a proportion of the recalled meat has been consumed although there have been no reports of adverse reaction.  As with all major recalls, FSIS will verify procedures relating to notification of customers and removal of affected the product from the market.

The City Council of Aiken, SC. voted 6-1 to approve a procesOing plant to be built by House of Raeford.  There was general acceptance of the project, but with some concern over the volume of water required and the treatment of effluent.  Final approval will depend on passage of a water ordinance and approval of a tax agreement with Aiken County.

Predictably, the project has the support of the State of South Carolina since it will create employment opportunities for contractors and potential sales for farmers producing corn and soybeans.

The Bezos Earth Fund will distribute grants to the value of $60 million to various research institutions including universities to improve the texture and taste of plant-based meat.  This allocation will be part of a $1 billion fund intended to “transform the food industry”.

Proponents of plant-based meat alternatives now recognize the lack of consumer acceptance of the category characterized by declining sales. Producers of faux meat that publish financial reports confirm losses. 

Andy Jarvis, Director of the Future of Food, at the Bezos Earth Fund, quoted in Bloomberg, observed that plant-based substitutes for meat “need to cost less and need to be more flavorful”.  This is a tacit admission of the inferiority of current plant-based products and lack of variety despite higher prices.

Peter McGuinness, president and CEO of Impossible Foods recently announced the introduction of new packaging at the National Products Expo West.  McGuinness stated, “We want packaging that lived up to and reflected the deliciousness of our products while really popping on the shelf.”  He added, “What we want to do is educate consumers that they can still enjoy meat by incorporating into their diet a version that’s made from plants instead of animals.” 

McGuinness is clearly a marketing expert but appears to be insensitive to both accounting realities and the organoleptic properties of his products.  Plant based meat alternatives are clearly inferior with respect to appearance, texture and taste.  Shelf prices are higher than the product they purport to replace.  Although Impossible Foods is not a publicly quoted company and therefore does not release financial reports, competitors Beyond Meat and the plant-based division of Maple Leaf Foods confirm non-profitability.

Impossible Foods should concentrate more on improving the quality of the product since the packaging is discarded and not eaten.  The fact that the Bezos Earth Fund is making available grants to food science departments of universities to improve organoleptic qualities of plant-based foods confirms the reality of inferiority despite the Impossible Foods hype.

The USDA Food Safety and Inspection Service will continue to allow operation of line speeds of up to 175 birds per minute under a waiver due to expire at the end of March 2024.  Increased line speeds are possible due to advances in the design and operation of killing, defeathering and evisceration equipment that incorporates a high degree of automation.  Close to 50 plants now operate at up to 175 birds per minute without welfare issues relating to either flocks or workers.

Notwithstanding the reality, animal rights organizations including the HSUS, Animal Outlook, Mercy for Animals and kindred organizations are pursuing litigation to deprive the USDA of the right to grant waivers and to restrict line speeds in future rule-making.  Secretary of Agriculture, Tom Vilsack, has assured the Senate Agriculture Committee that decisions on increased line speeds would be based on scientific evaluation.

Petitioners opposing increased line speeds are less interested in the welfare of flocks than they are in their efforts to impose restraints and increase production costs for all animal protein.  Legal action opposing the decisions of the USDA that contribute to efficiency and hence, profitability is an anathema to those opposed to intensive livestock production and ultimately, consumption of meat.  Any restriction whether based on welfare or environmental issues that places a burden on livestock production is regarded by these groups as a victory.