Editorial

Nicholas Kristof Pressured to Criticize Costco Over Better Chicken Commitment

In an opinion article in the February 7th edition of The New York Times Nicholas Kristof, a distinguished columnist and recipient of two Pulitzer prizes and numerous literary and public service awards took issue with the Costco-owned, Liberty Premium Poultry operation in Freemont, NE.  Based on an intrusion video apparently produced by Mercy for Animals, his column alleged deficiencies in welfare based on a single report from an organization that is opposed to all forms of intensive livestock production.

 

Costco was obviously selected as its iconic $4.99 rotisserie chickens are a feature of the big-box chain with over 100 million birds sold each year. Costco has a record of progressive employment practices and high ethical standards.  The Lincoln Premium complex is the most modern in the U.S. and incorporates controlled atmosphere stunning and a high level of automation ensuring bird welfare and acceptable working conditions for employees in the plant. 

 

According to the Mercy for Animals clandestine video, litter quality may have been less than optimal and apparently ammonia was present in the house selected for the intrusion.  One should accept that in mid-winter in Nebraska, some ammonia would be present in the early morning hours. There was no indication of the concentration of ammonia, whether 5 ppm or 50 ppm and the duration of a given level above an acceptable standard. In assessing welfare, quantifiable data are important and the level of welfare cannot be determined by subjective impressions from untrained observers, especially if biased against intensive livestock production.

 

The video was apparently reviewed by John Sullivan, the General Counsel for the Company who opined that the video depicted "normal and uneventful activity".  A comment by a disinterested  and qualified poultry veterinarian or an experienced PAACO-certified auditor would however have been more convincing.

 

Mercy for Animals obviously picked Costco based on its prominence and the presumption that the company would be vulnerable to public criticism. As far as consumers are concerned, Liberty Premium Poultry is de facto Costco, and any deficiencies in flock welfare reflect directly on the Costco brand. Mercy for Animals used the reputation of Nicolas Kristof and his intense concern for both human and animal welfare to publicize their cause.

 

In his article, Kristof reproduced a frequently cited canard that broilers bred for high yield of breast meat and with a high growth rate and feed conversion efficiency are in some way deformed.  It is a matter of fact that Costco harvests their flocks at a lower weight than the U.S. average as their market calls for a rotisserie chicken of fairly uniform size selling at a constant price of $4.99, irrespective of the fluctuation in the cost of feed and other inputs.

 

The article by Kristof will in all probability be forgotten, given current issues including COVID-19, the transition to a new Administration and more newsworthy events relating to Congress and the economy.  It is regrettable that Kristof, an award-winning journalist who has used his pen to highlight real problems such as trafficking of minors in Asia, genocide in the Dafur and other examples of inhumanity should have been used by Mercy for Animals. Their intent was to manipulate public opinion and to pressure a company such as Costco to conform to an ever-increasing set of welfare standards based more on sentiment than science. It is also unfortunate that Kristof, renowned for travel and direct and personal investigation did not visit the Lincoln Premium Complex to observe the conditions at first hand.

 

  It would be to the benefit of Costco to engage the services of an independent consultant with experience and Board Certification in Poultry Veterinary Medicine and in Welfare to review management of flocks, training of contractors and supervisors, implementation of established welfare standards and management of ventilation systems during both summer and winter.  If any deficiencies in either training or operation are identified, corrective action could be implemented to the benefit of the Costco image.

 

Poultry Industry News

STOP PRESS

Texas Packing Plants Resuming Production

 

Following restoration of power and a warming trend allowing the distribution of natural gas, beef and pork packing plants and poultry facilities have commenced production.  Supply chains are operating at reduced capacity as there are still transport delays as a result of weather conditions.


 

Broiler Week

Weekly Broiler Production and Prices, February 22nd 2020.

 

Chick Placements.

The Broiler Hatchery Report released on February 17th 2021 confirmed that a total of 237.7 million eggs were set during the week ending February 13th 2021, one percent less than the corresponding week of the previous year and 0.3 percent (0.7 million eggs) more than the previous week.

 

A total of 177.4 million day-old chicks were placed among the 19 major broiler-producing states during the week ending February 13th 2021. Total chick placements for the U.S. amounted to 186.3 million, two percent less than the corresponding week in 2020 and 0.4 percent (0.8 million chicks) less than the previous week. Claimed average hatchability was 80.9 percent for eggs set three weeks earlier, (81.0 percent for the previous week). Cumulative placements for the period January 2nd 2021 through February 13th 2021 amounted to 1.12 billion chicks, two percent lower than the corresponding period in 2020.

 

Broiler Production

According to the February 19th 2021 USDA Broiler Market News Report (Vol. 68: No. 07) for the processing week ending February 13th 2021, 163.9 million broilers were processed during the past week (previous week 167.9 million) at an average live weight of 6.35 lbs. (6.35 lbs. last week) and a nominal yield of 76 percent. The number of broilers processed was 4.1 percent less than the corresponding processing week in 2020. Processed (RTC) broiler production for the week was 791.2 million lbs. (359,633 metric tons), (810.4 million lbs. last week), 1.8 percent less than the corresponding processing week in 2020. In 2021 Processed (RTC) production attained 5.51 million lbs. (2,502,771 metric tons), 1.7 percent less than YTD 2020.

 

Broiler Prices

The USDA National Composite Weighted Wholesale price on February 19th 2021 was up 0.4 cent per lb. from the previous week to 83.1 cents per lb., compared to 78.4 cents per lb. during the corresponding week of 2020; 82.3 cents per lb. for January 2021 and 86.0 cents per lb. for the three-year average. The industry still is impacted by the contraction in the food service segment following imposition of COVID-19 restrictions.


 

COMMODITY REPORT

WEEKLY COMMODITY REPORT: FEBRUARY 19th 2021.

 

  • The financial and economic policies of the Biden-Harris Administration are emerging with a focus on the vaccination campaign to reduce the impact of the COVID-19 pandemic in order to restore the economy. The commodity market this past week was little changed continuing the trend last week and following the sharp upturn two weeks ago despite export orders and lower ending stocks as forecast in the February 9th WASDE Report and subsequent planting intentions.

 

  • The direction of agricultural and trade policy to be implemented in 2021 will emerge with the confirmation of Tom Vilsack as USDA Secretary, Michael Regan as the Administrator of the EPA and Katharine Tai as U.S. Trade Representative, together with other Cabinet appointments and their subordinates relevant to agriculture.

 

  • S producers are now receiving and conversely livestock producers in the Midwest are paying close to $5.50 per bushel for corn and $13.80 per bushel for soybeans plus transport and basis.

 

  • Corn and soybeans were respectively 0.7 percent and 0.4 percent higher than the previous week although still at notably high levels. Soybean meal lost 0.5 percent.

 

 

  • According to the USDA FAS Export Report for the week ending February 11th 2021 reflecting market year 2020-2021, cumulative placed export orders for corn amounted to 35.58 million metric tons (1,402 million bushels) with 22.97 million metric tons (905 million bushels) actually shipped. During the past week 1.00 million metric tons (39 million bushels) of corn were ordered by China and other nations, sharply down from the previous week, with 1.38 million tons (54 million bushels) shipped.

 

  • Cumulative export orders for soybeans for the 2020-2021 market year attained 9.18 million metric tons (336 million bushels) with 50.68 million metric tons (1,860 million bushels) actually shipped. This past week some previously placed orders from China were cancelled. Weekly sales of soybeans attained 0.46 million metric tons (16.7 million bushels) with 1.00 million metric tons (36.7 million bushels) shipped metric tons shipped.

 

 

The following quotations for delivery in the months as indicated were posted by the CME at 15H00 on February 19th 2021 compared with values posted at 14H00 on February 12th 2021  (in parentheses) reflecting specified months in 2021 for delivery.

 

 

 

 

COMMODITY

 

Corn (cents per bushel)

 March 543     (539)      

May    542       (547)

Soybeans (cents per bushel)

 March 1,377  (1,371)

May  1,380      (1,370)

Soybean meal ($ per ton)

 March  424     (426)

May     424       (426)

 

 

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

 

COMMODITY    CHANGE FROM PAST WEEK

Corn:                  March quotation up 4 cents per bushel         (+0.7 percent)

Soybeans:         March quotation up 6 cents per bushel         (+0.4 percent )

Soybean Meal: March quotation down $2 per ton                  (-0.5 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 0.44 cent per dozen

 

The cost of broiler production would change by 0.25 cent per pound live weight

 

This week the small changes in the prices of corn and soybean meal would increase nest-run production cost for eggs by 0.3 cent per dozen and for broilers 0.1 cent per live pound. Over the past eight weeks escalations in the price of major ingredients have added 7.8 cents per dozen and 4.4 cents per live-weight lb.

 

According to the February 9th WASDE, corn harvested in calendar 2021 will attain 14,183 million bushels with ending stocks projected at 1,502 million bushels, down 3.2 percent from the January Report. Values will be updated reflecting ongoing export volumes, domestic use and the March WASDE, incorporating recent planting intentions. Compared with February 12th at 14H00, the CME quotation at 14H00 for corn on February 19th was up 4 cents per bushel for March delivery to 543 cents.

 

The social restrictions imposed in the U.S. as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement accepting a nominal ten percent addition to gasoline. A significant proportion of the U.S. ethanol fermentation capacity is off-line or operating at lower than capacity at present and the outlook for increased demand is questionable with ten percent exported. According to the U.S. Energy Information Agency the industry produced on average 911,080 barrels per day for the week ending February 11th 2021. Ethanol stocks stood at 24.3 million barrels on February 12th 2021 up 2.1 percent from the previous week. Ethanol was priced at $1.69 per gallon on February 19th unchanged from February 12th and compared with a five-year low of $0.92 per gallon on March 26th 2020. Concurrently RBOB gasoline at $1.81 per gallon (quoted, New York Harbor) was up 16 cents per gallon from the previous week (presumably  due to weather conditions) and is now 12 cents per gallon higher than ethanol but with a 63 percent higher BTU rating.  

 

With more plants among the 201 on January 1st 2021, DDGS is freely available commanded a higher price than in the fourth quarter of 2020. Eastern Corn-belt product was priced at $242 per ton on February 16th 2021, $1 per ton lower than the previous week and $86 per ton more expensive than on February 11th 2020.

 

 Soybeans are the beneficiary of demand by China. The CME price at 14H00 on February 19th rose 6 cents per bushel over the week to 1,377 cents per bushel for current month delivery. The USDA documented a 2021 crop of 4,135 million bushels. Ending stocks according to the February 9th 2021 WASDE projection will attain 120 million bushels, down from the January 2021 projection of 140 million bushels representing a seven-year low.

 

On February 10th 2021 Meat and Bone meal quoted Central U.S. attained $400 per ton, up $10 from the previous week and compared to $170 per ton on February 11th 2020.

 

On February 16th the BRL exchange with the CNY was 0.84, (up CNY 0.01 from the previous week). The conversion of the US$ to the CNY was set at 6.49, up CNY 0.03 from the previous week.

 

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipates that soybean imports by China will amount to 95 million metric tons during the 2020-2021 market year.

 

For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The U.S. Grains Council documented sales of U.S. corn to China through December 31st 2020 during the 2020/2021 year amounting to 11.7 million metric tons (460 million bushels) with 65 percent yet to be shipped.

 

For the 2019/2020 market year China imported 16.3 million metric tons of soybeans from the U.S., 36.2 percent of total exports of 44.9 million metric tons, but 3.9 percent less than in the 2018/2019 market year.

 

COMMENTS

Subscribers are referred to the February 9th 2021th WASDE #609 under the STATISTICS TAB.

 

Approximately $16 billion was disbursed under the Coronavirus Food Assistance Program (CFAP) in early 2020. An additional $14 Billion relief package was announced by the Administration on September 18th with all of the allotment having been distributed. Additional funds will be included in the proposed Coronavirus Relief Package.


 

Turkey Week

Weekly Turkey Production and Prices February 23rd 2021

 

Poult Production and Placement:

The February 16th 2021 edition of the USDA Turkey Hatchery Report, issued monthly, documented 25.8 million eggs in incubators on February 1st 2021 (24.6 million eggs on January1st 2021) and down 8.7 percent (2.5 million eggs) from February 1st 2020.

 

A total of 20.6 million poults were hatched during January 2021 (23.1 million in December 2020), and representing a decrease of 13.8 percent (3.3 million poults) from January 2020.

 

A total of 18.9 million poults were placed on farms in the U.S. in January 2021, (20.6 million in December 2020), and 11.6 percent less than in January 2020. This suggests disposal of 1.7 million poults during the month (2.4 million in December 2020). Assuming all tom poults were placed, up to 16.5 percent of January-hatched hen poults or 8.3 percent of all January-hatched poults may not have been reared. This is an unsubstantiated estimate in a fluctuating demand for processed toms and hens in a COVID-affected year. See relative numbers of hen and tom poults processed under Production Data below.

 

For the twelve-month period February 2020 through January 2021 inclusive, 272.6 million poults were hatched and 249.6 million were placed. This suggests disposal of 23.0 million poults. Assuming all tom poults were placed, (representing a broad assumption as above), 16.8 percent of hen poults or 8.4 percent of all poults hatched during the period were not placed.

 

To be updated in the mid-March 2021 edition following release of monthly USDA data

 

Turkey Production:

The February 19th 2021 edition of the USDA Turkey Market News Report (Vol. 68: No. 07) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

 

  • For the processing week ending February 13th 2021, 1.401 million young hens were slaughtered during the processing week at a live weight of 17.2 lbs. (last week 1.620 million hens at 16.4 lbs.). During the corresponding week in 2020, 1.567 million hens were processed, 11.9 percent less than the current week. Ready-to-cook (RTC) hen weight for the week attained 19.4 million lbs. (8,828 metric tons), 7.6 percent less than the corresponding processing week of 2020. Dressing percentage was a nominal 80.5. In 2021 RTC hen production attained 138.6 million lbs. (62,990 metric tons), 5.0 percent less than for YTD 2020.
  • For the processing week ending February 13th 2021, 2.169 million toms were slaughtered at 44.8 lbs. compared to 2.331 million toms processed during the previous week at 45.0 lbs. For the corresponding week in 2020, 2.284 million toms were processed, 5.3 percent less than in the past week. Ready-to-cook tom weight for the week attained 78.2 million lbs. (35,524 metric tons), 3.1 percent less than the corresponding processing week in 2020. Dressing percentage was a nominal 80.5 percent. In 2021 RTC tom product attained 547.0 million lbs. (248,631 metric tons), 8.6 percent less than for YTD 2020.
  • The National average frozen hen price during the past week was 111.0 cents per lb., up 1.0 cent per lb. from the previous week and up approximately 12 cents from the three-year average. The following prices rounded to nearest cent were documented for domestic and export trading on February 19th 2021:-

 

Product

cents per lb.

Change from previous Week (%)

Frozen hens

111

+0.9

Frozen toms

111

+4.7

Fresh hens

123

-0.8

Fresh toms

124

Unchanged

Breasts 4.0-6.5 lb. (frozen)

132

-2.3

Breasts (B/S) tom

130

No new quotation

Drums (toms for export)

103

-1.9

Wings (V-cut tom)

85

No new quotation

Wings (V-cut hens)

228

No new quotation

Thigh Meat (frozen for export)

117

No new quotation

Mechanically Separated (export)

44

No new quotation

 

Inventories:

On February 15th 2021 cold storage holdings at selected centers amounted to 64,254 lbs., 9.6 percent more than the inventory of 58,646 lbs. on February 1st 2021.

 

The February 23rd 2021 edition of the USDA Cold Storage Report issued monthly, documented a total turkey stock of 306.2 million lbs. (139,187 metric tons) on January 31st 2021, equivalent to 2.7 weeks of current production and up 1.5 percent compared to the inventory on January 31st 2020. The January 31st 2021 value was 37.3 percent above the December 31st 2020 level. This decline is consistent with season and denotes an imbalance between supply and the combination of domestic demand and exports.

 

The Whole Turkey category representing 40.9 percent of total storage of 306.2 million lbs. on January 31st 2021 was 16.4 percent higher than the inventory on January 31st 2020. Tom carcasses in storage increased by 19.9 percent from January 31st 2020 to 74.6 million lbs. on January 31st 2020. Hen carcasses in storage increased by 11.6 percent from January 31st 2020 to 50.8 million lbs. on January 31st 2021.

 

The “Other” and “Unclassified” categories collectively amounted to 107.0 million lbs. or 34.9 percent of inventory on January 31st 2021. The magnitude of these two non-specified categories suggests that the USDA should attempt to classify product more accurately as to specific product.

 

January 2021 Production

According to the USDA Poultry Slaughter Report released on February 22nd 2021 covering, January 2021 comprising 23 working days, 16.6 million young turkeys were processed. (13.4 percent less than January 2020); live weight attained 556,549 million lbs. (13.2 percent less than January 2020); Average live weight was 33.5 lbs. (0.2 percent more than January 2020); RTC attained 444,031 million lbs. (down 13.2 percent from January 2020) with a yield of 79.8 percent. The proportion of frozen product in January 2021 attained 27.8 percent of total RTC produced. In January 2021ante-mortem condemnation attained 0.32 percent of live weight, (0.29 in January 2020). In January 2021, 1.3 percent of RTC weight was condemned (1.4 percent in January 2020)

 

Comments:

Please review comments in the Weekly Broiler Report and the year-to-date export data under the Statistics Tab.

 

The USMCA has been in effect since July 1st. The U.S. turkey industry shipped 173,544 metric tons or 62.6 percent of all turkey exports to Mexico, valued at $389 million during 2018. In 2019 Mexico received 176,789 metric tons representing 60.9 percent of turkey exports valued at $427 million. Thailand commenced importing raw turkey effective January 1st 2021 after an avian influenza embargo was placed on the U.S. for other than cooked turkey in 2015. During 2020 Mexico imported 166,771 metric tons of turkey products valued at $379 million with a unit value of $2,273. During 2020 China imported 17,260 metric tons of turkey products with a value of $28.7 million representing a unit value of $1,663 per metric ton.


 

Renewable Fuels Association Posts Export Data

On Tuesday February 9th, the Renewable Fuels Association released a report on export of ethanol and dried distillers grain with solubles (DDGS) in 2020. A total of 1.33 billion gallons of ethanol was exported representing ten percent of nation production generating revenue of $2.33 billion.  Ethanol was shipped to 19 nations with Canada the largest importer receiving 25 percent of the export total followed by Brazil and India.  In 2020, the U.S. imported 200 million gallons of ethanol.

 

During 2020, the ethanol industry exported 10.96 million metric tons of DDGS representing 38 percent of production generating revenue of $233 billion.  Mexico was the largest importer with 16 percent of the export volume.

 


 

U.S. Hog Farmers Faced with Variant PRRS Virus

A recent webinar hosted by the Swine Health Information Center focused on the emergence of a variant strain of the Porcine Reproductive and Respiratory Syndrome (PRRS) that is present in Southern Minnesota and Northern Iowa.  Affected herds demonstrate anorexia, fetal loss and mummification, sow and piglet mortality and slower growth rates.  The condition has been diagnosed in both sow farms and in grower and finishing units.

 


 

USDA Purchases Canned Boned Chicken

In a February 12th announcement, USDA-AMS confirmed purchase of 56 tons of boned chicken in cans at $2.35 per lb. with a total value of $264,375.  Deliveries will be made from April 1st through June 30th 2021 to be used for child nutrition and domestic food assistance programs.

 


 

TreeHouse Under Pressure from Jana Investment Group

In a February 10th filing with the Securities and Exchange Commission, Jana Investments declared a significant equity position in TreeHouse Foods.  Jana is an active investor previously involved in motivating the sale of Pinnacle Foods to Conagra Brands in 2018. The Company was apparently also involved in initiating the sale of Whole Foods Market to Amazon.com.

 

After discussions with the management of TreeHouse Foods Jana has expressed confidence in the company but requires enhanced stockholder value.  Jana has nominated three potential directors for the TreeHouse Board with six of the twelve members ending their respective terms of office.

 

TreeHouse Foods manufactures a wide range of food products for retail grocery, warehouse and club stores and for E-commerce.  The company operates 40 production facilities across the U.S., Canada, and in Italy.  TreeHouse Foods emphasizes R&D to develop products and packaging appropriate to the needs of clients with a stong commitment to food safety.  Private-label foods and beverages include 29 categories including organic products.


 

Texas A&M Receives Endowment

Bill and Barbara Huffman have provided the Texas A&M College of Agriculture and Life Sciences with an endowment amounting to $850,000.  This will assist the Department of Poultry Science to recruit a Department Head and an Instructional Assistant Professor.  Funds will expand laboratory space and support staff. The Department has received financial commitments from Merck Animal Health, the Texas Poultry Federation, Aviagen and Calpis America.

 

The Texas A&M Poultry Science Department is noted for practical research that benefits producers and the allied industry.  Over the past five years, the Department has increased external research funding two-fold to $3.8 million. 

 

J.C. Essler, Executive Vice President of the Texas Poultry Federation and Affiliates noted, "Texas A&M has been an important partner both through science and education and the efforts of Vice Chancellor, Dr. Patrick Stover to improve an already stellar poultry program speaks volumes to the shared relationship".  He added, "as a commodity group the Texas Poultry Federation is committed to Texas A&M Land-Grant mission and we look forward to supporting the University's efforts to enhance its poultry program".


 

Supermarket Pharmacies Administering COVID Vaccines

Following the designation of Publix pharmacies as vaccination locations in January by Governor Ron DeSantis, the company has administered 250,000 doses in Florida stores. Publix has 593 locations in forty-one Florida counties equipped and staffed to administer the Moderna vaccine. Publix also has locations in Georgia and South Carolina that have collectively administered 50,000 doses.

 

Walmart has commenced vaccinating eligible recipients in many states and is expected to be important in delivery to rural areas without hospitals and clinics.


 

JBS Arranges Vaccination for Workers at Beardstown, IL. Pork Plant

Approximately 700 workers at the JBS USA Beardstown, IL pork plant received their first doses of Pfizer vaccine during the second week of February.  The company arranged for a vaccination team in conjunction with the Cass County Health Department and the Illinois Department of Public Health.  Participants were provided with a $100 incentive bonus to be vaccinated with universal acceptance of the first dose to be followed by the second in early March.

 

Bob Krebs, President JBS USA-Pork noted, “We remain committed to providing a safe working environment for our team members and doing all we can to ensure our workforce across the country is given the opportunity to be vaccinated as soon as possible.”  Teresa Armstrong, Administrator of Cass County Health Department, stated “Our goal is to quickly and safely vaccinate as many JBS Beardstown employees as possible to prevent illness and the spread of COVID-19.”  She added, “We are hopeful that other states will soon follow the lead of Illinois in providing vaccines for essential food workers.” 

 

The Federal government arranged for a supply of COVID vaccines that are distributed to states.  It is up to each of the 50 states and U.S. territories to develop both priorities and logistics for administration.  This has resulted in obvious differences in both the rate of administration and selection of recipients.  It is evident that workers in red meat packing plants, poultry processing and other food facilities, should be afforded  priority based on close proximity in the work environment and susceptibility to a virus which is transmitted by inhalation.  A high prevalence rate among workers at plants, especially if asymptomatic, represents a danger to the communities in which they are located.

 


 

Legal Action Contemplated over GMO and Glyphosate Bans by Mexico

In December 2020, the president of Mexico Andres Manuel Lopez Obrador (AMLO) issued a decree banning the importation of GMO corn and the use of glyphosate in domestic crop production.  The vaguely worded edict will be implemented over a three year period.

 

Juan Cortina, President of the Mexico Farm Council, announced that a legal challenge will be raised since the edict is regarded as being based on ideology and not science.

 

In 2020, Mexico imported 17 million metric tons of yellow corn required for the livestock industry, representing approximately 40 percent of agricultural production valued at $24 billion.  Mexico is self-sufficient with respect to white corn consumed by the population.

 

It is anticipated that the U.S. will oppose the ban on GMO corn as being contrary to provisions of the USMCA.

 


 

Extreme Cold Impacting Livestock and Processing

Decades low temperatures have contributed to mortality in feedlots, impacted growth and conversion and delayed transport to packing plants.  It is estimated that on Monday 15th, cattle slaughter was 20 percent below normal at 92,000 head.  Hog slaughter was down 15 percent to 425,000 head.  It is anticipated that reduced production will extend past the third week of the month creating problems for hog producers ready to ship market-ready hogs.

 

Thankfully power is being restored and the week-long freeze is moderating with warmer weather but leaving widescale devestation behind.


 

McDonald's Promoting New Chicken Sandwich with Swag Deals

To generate enthusiasm for the new fried chicken sandwich, McDonald's is marketing $5 swag packages including a hoodie and a coupon for the new product.

 

David Tovar, VP of U.S. Communications for McDonald's was quoted in a press release stating, "we are excited to give fans early access to this sandwich, and exclusive swag they can't get anywhere else to memorialize this great addition to our menu". 

 

The new McDonald's chicken sandwich went on sale on Wednesday, February 17th after a test that demonstrated significant demand. Speaking at the McDonald’s November 2020 Investors’ Day, Joe Erlinger, president of McDonald's USA noted, "globally the chicken category is almost twice the size of beef and is growing faster and represents a significant opportunity".  He added, "developing a reputation for great chicken represents one of our highest aspirations.  We want customers to choose McDonald's for chicken". 

 

McDonald's was slow to respond to the introduction of the Popeye's Louisiana Kitchen product in 2019.  Wendy's, Shake Shack and KFC have all introduced upgraded chicken sandwiches having allowed Chick-fil-A™ to dominate this space for many years, becoming the largest chicken-centered U.S. chain.


 

SonoSteam Reduces Pathogens on Contaminated Surfaces and Products

SonoSteam technology has the potential to reduce contamination with foodborne pathogens on equipment, work surfaces and products.  Sonosteam was acquired by the Sanovo Group in 2020 based on the potential for applications in food production and decontamination of equipment and work surfaces.

 

According to Niels Krebs, CEO of Sanovo Biosecurity, the technology has achieved market penetration in the E.U. and the U.K. in reducing the level of Campylobacter on poultry. Steam is responsible for thermal destruction of bacteria and this effect is intensified by ultrasound.  SonoSteam can be applied in a variety of on-line processes and has received acceptance in the U.K. where the Food Safety Agency imposes a quantitative limit on Campylobacter contamination.


 

USDA Offers Assistance to Farmers Affected by Winter Storms

In a February 17th release, Kevin Shea, Acting Secretary of Agriculture outlined assistance to farmers, ranchers and communities affected by winter storms.  He stated, "USDA is committed to getting help to producers and rural Americans impacted by the severe weather in many parts of the country.  As severe weather and natural disasters continue to threaten the livelihoods of thousands of our farming families, we want you and your communities to know that USDA stands with you".

 

The USDA traditionally extends risk management assistance to farmers in the Federal Crop Insurance Program and the Non-insured Crop Disaster Assistance Program with details available through local Farm Service Agencies.

 

Limited risk management options include the Livestock Indemnity Program and the Emergency Assistance for Livestock, Honeybee and Farm-Raised Fish Program.

 

USDA recommends that farmers should maintain accurate and comprehensive records to document claims for losses sustained as a result of the current cold weather event. Advice to ranchers is available on USDA Animal and Plant Inspection Service websites including both the  "Protecting Livestock During a Disaster” and “Animal Care Emergency Program” webpages.

 

The USDA Food and Nutrition Service (FNS) provides emergency nutritional assistance including infant formula to households, shelters, and communal-feeding sites.  Additional information is available on the FNS Disaster Assistance website.


 

COVID Restrictions Reduce Foodborne Infections in Germany

A study conducted by the Robert Koch Institute in Germany determined a sharp reduction in a wide range of foodborne infections during 2020.  This was attributed to reduced social activity, restrictions on dining out, closing of schools, universities and daycare facilities due to COVID.

 

The study considered 32 infectious and parasitic conditions noting declines in excess of 80 percent for rotavirus and Shigella infections and approximately 50 percent for E.coli and Salmonella, and a one third reduction in Campylobacter infections.


 

Hotraco Group Appoint Chief Commercial Officer

Henk Struving has been appointed as Chief Commercial Officer for the Hotraco Group.  In his new position he will be responsible for further development of global strategy and the promotion of subsidiaries within the Hotraco Group.

 

Commenting on the appointment, Henk stated “Hotraco is a fantastic company with great products, know-how, and many satisfied customers.  I am thrilled about this new opportunity and see it as an exciting challenge.”


 

Chore-Time Appoints Northeast Regional Sales Manager

Brad Gee has been named Regional Sales Manager for Chore-Time.  He will be responsible for Northeast U.S. customers according to Kevin Alger, Sales Manager for CTB Inc.

 

Gee is a graduate of North Carolina State University where he earned a degree in poultry science and swine technology.  For the past 17 years he has been involved in the broiler industry, most recently responsible for grow-out operations in a complex extending over ten counties.


 

WTO Director General Confirmed

Dr. Ngozi Okonjo-Iweala is the first woman and the first African to hold the position of Director General of the World Trade Organization.  Dr. Okonjo-Iweala, a native of Nigeria, earned a baccalaureate degree from Harvard and a doctoral degree in economics from MIT.  She spent 25 years with the World Bank and was also Minister of Finance in her native country.

 

On May 14th, former Director-General Roberto Azevedo informed WTO members that he would step down from his post one year early to facilitate selection and appointment of a new Director General, considered necessary to implement a program of reform and revitalization

 

In accepting the position Dr. Okonjo-Iweala stated, “I am honored to have been selected by WTO members as the Director General.  A strong WTO is vital if we are to recover fully and rapidly from the devastation wrought by the COVID-19 pandemic.  I look forward to working with members to shape and implement the policy responses we need to get the global economy going again.  Our organization faces a great many challenges, but working together we can collectively make the WTO stronger, more agile, and better adapted to the realities of today.”

 

The nine-month selection process for Director General considered a number of qualified candidates including the Trade Minister of Korea, Yoo Muyng-hee. Ms. Yoo withdrew her candidacy on February 5th.  Although all members of the WTO endorsed the appointment of Dr. Okonjo-Iweala, the U.S. objected to her selection.  In late January, President Joseph R. Biden reversed the objection registered by the U.S. and extended strong support for her candidacy.


 

Soybean Meal Production During December 2020

The USDA Fats and Oils Report released February 1st 2021 confirmed that 5.81 million tons of soybeans (213 million bushels) were crushed during December 2020, 4.9 percent more than December 2019.  Yields of soybean meal and cake combined for the month were similar at 73.5 percent in December 2020 and 73.3 percent in December 2019.


 

USDA Final Rule on GIPSA "Unreasonable Preference" Under Scrutiny

During mid-January 2021 the USDA published the final rule relating to "Unreasonable Preference" represented by section 202 (b) of the Packers and Stockyards Act of 1921.  The ‘unreasonable preference’ provision of the Act prevents integrators from granting "unwarranted advantages or disadvantages to growers who produce the same type and quality of livestock or poultry in the same relative geographic area". 

 

The 2008 Farm Bill incorporated provisions enjoining the USDA to make decisions concerning unreasonable preference more objective through specific criteria. Following a series of hearings organized jointly by the Department of Agriculture and the Department of Justice during the early years of the Obama Administration, the Farmer Fair Practices Rules were issued, but were revoked by the incoming Administration in 2017.

 

The current rule allows the Secretary of Agriculture to evaluate claims of unreasonable preference or advantage according to the following criteria

 

  • On the basis of a cost saving related to dealing with different producers, sellers or growers
  • On the basis of meeting a competitor's price
  • On the basis of meeting other terms offered by a competitor
  • Based on a reasonable business decision

 

The National Sustainable Agriculture Coalition representing 116 member groups maintains that the specified criteria provide undue protection for integrators at the expense of contracted producers.

 

Based on contracts currently in use by major broiler integrators, there does not appear to be evidence of unreasonable preference or advantage as evidenced by the very small number of lawsuits filed by contractors against broiler integrators over the past four years.  There are, however, evident areas of conflict in the hog and beef industries that are subject to inquiry.


 

USDA Chicken Purchases

The USDA Agricultural Marketing Service has purchased whole boned chicken and chicken legs for school nutrition and food assistance programs. On February 16th USDA purchased 180 tons of chilled chicken in bulk at 90 cents per pound. USDA-AMS also purchased 18 tons of bulk chilled chicken legs at 20 cents per pound during the first half of April 2021.


 

Possible Human Infection with H5N8 Avian Influenza

According to a ProMED-Mail report and concurrent media postings, officials in Russia have notified the World Health Organization (WHO) of a possible infection of poultry farm workers with H5N8 avian influenza.  According to the report, workers were asymptomatic and there was no evidence of human-to-human transmission.  Dr. Anna Bopova, Head of the Russian Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing noted that workers on seven poultry farms were involved.

 

The provisional diagnosis has yet to be confirmed and evaluated.  Highly pathogenic strain H5N8 is widely distributed among migratory birds and commercial farms in the E.U., India South Korea and Japan but as yet there has been no report of infection in either farmers or workers involved in flock depletion.  It must be presumed that appropriate surveillance has been implemented in affected nations but no reports of human infection have been forwarded to either the WHO or the OIE.


 

Easterday Ranches Reaches Agreement with Tyson over Disposition and Maintenance of Herd

Tyson Fresh Meats Inc. has accused Easterday Ranches of a $200 million fraud involving billing for cattle that did not exist. The lawsuit filed by Tyson was suspended when Easterday Ranches Inc. filed for Chapter 11 Bankruptcy protection.

 

Approximately 52,000 head remain on the Easterday property in Washington State. In the interest of averting a major welfare catastrophe, Tyson will move 12,000 head from the property as soon as possible and has provided bridging finance for feed and maintenance.

 

Tyson was the sole customer of Easterday Ranches and the enterprise in bankruptcy is totally reliant on financing by their major customer and decisions made by the bankruptcy court.  The Easterday family is no longer responsible for management and Tyson have requested that the court designate a trustee.

 

In a separate case, activist groups have objected to an application by Easterday Farms to establish a 30,000-cow dairy operation in Oregon.  Given the financial problems faced by Easterday businesses, receiving a permit is unlikely, given the history of the operation including major environmental problems that will require considerable investment to rectify.


 

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Title: Agricultural Economic Outlook

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George’s Encounters Worker Resentment

In an article by Rachell Sanchez-Smith in Facing South, a worker advocacy publication, it is alleged that George’s Poultry operates with an underlay of worker disaffection concerning COVID precautions.  During December 2020, 30 workers on the deboning line staged a one-shift strike.  Their grievance was that the company had ceased staggering shift times resulting in unnecessary congregation in change areas and clock-in points.  The claim for staggered start times was honored by George’s but strikers were penalized for missing a shift.  Promised hand- washing stations have yet to be installed and there are obvious rumblings over low pay. Workers with at least one year of service earn in excess of the $11 minimum Arkansas wage.

 

It would be of benefit to the management of George’s to compare their response to COVID with other employers in the state and the industry and to rectify any apparent deficiencies.  An improvement in communications with employees and greater sensitivity to the needs of Hispanic workers may be indicated.

 


 

German Hog Prices Increasing After COVID Recovery

Hog producers in Germany were faced with a combination of plant shutdowns as a result of COVID-19 and a decline in exports following cases of African swine fever in wild boars.  Following modifications to ventilation systems and imposition of control measures, hog-packing plants have resumed production and are accepting German-raised hogs notwithstanding higher than normal live weights. 

 

An association representing farmers (VEZG) noted that in some regions marketing is again normal but due to processing restraints, there is a surplus of live hogs.  Following the ban on exports from Germany by China, as a result of ASF in free-living wild boars, other European nations including the U.K. and Denmark displaced German exports although this nation has been able to establish new markets in the EU. 


 

Shane Commentary

Adequate Ventilation Critical to Suppressing COVID Infection

COVID is transmitted readily by inhalation of contaminated aerosol droplets.  Studies have shown that stagnant air facilitates infection especially in high-risk locations such as meat packing plants, school rooms, entertainment venues and prisons. Studies at the Tönnies plant in Germany demonstrated that deficiencies in air movement contributed to a high rate of infection that was resolved only following modification of the air handling and filtration installations.

 

The Centers for Disease Control and Prevention has issued guidelines for reopening schools that apparently have not specified enhanced ventilation to complement masking and distancing.  Infectious disease specialists have urged the Administration to include enhanced ventilation rates in advisories following the lead of the World Health Organization.

 

Dry hydrogen peroxide generators can be installed in confined spaces to continuously decontaminate air, destroying both viral and bacterial pathogens.  For information on these installations click onto the Synexis logo on the right side of the welcome page.

 

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