Grassley-Fischer Bill Criticized By Both Packers And Producers

Egg-NewsThe Cattle Price Discovery and Transparency Act (S.4030) motivated by Senator Chuck Grassley (R-IA) was intended to protect producers by achieving greater transparency in marketing live cattle.


In hearings on April 27th, the proposed legislation was criticized by both representatives of the meat packers and by livestock producers.  Ethan Lane, Vice President for Government Affairs for the National Cattlemen’s Beef Association (NCBA), stated, “A one-size-fits-all solution such as the government mandate on cattle sales included in S.4030 is not the solution the industry is looking for.”  He added, “What is being proposed right now concentrates on what works for one region and simply doesn’t work for the rest of the country.”  The NCBA is advocating a cattle contract library, 14-day delivery, expedited weighing of carcasses with reporting and incentives to increase regional processing.


SEgg-Newshawn Tiffany of the Kansas Livestock Association is opposed to any government mandate since this would result in less incentive for producers to invest in innovative production techniques and genetics that would contribute to meat of higher quality.  He stated, “I do not support a government mandate of any kind, regardless of how well-intentioned the concept of helping producers obtain fair-market value for their animals.”  


The North American Meat Institute (NAMI) is opposed to mandates. For the record the hearing received a study conducted by Texas A&M University that the proposed S.4030 would impose an estimate of at least $112 million in additional cost over five years. Projections show that S.4030 would severely impact ranchers in Kansas, Texas and Oklahoma.


 Julie Anna Potts, President of NAMI, the attributed high cost of meat at retail to a disparity caused by an increase in demand coinciding with a lower herd. 


In a prepared statement and testimony, Donnie King, President and CEO of Tyson Foods attributed the rise in the price of beef to basic supply and demand economics that cannot be “rectified” by mandates and government intervention. These measures in the opinion of the packing sector would only exacerbate existing problems and create new difficulties for both sides of the transaction. King avowed that, “Tyson does not set the prices for either the cattle we buy or the beef our customers purchase.”  Following the advent of COVID, the packing industry was confronted with a major labor shortage.  Plants could not operate at an effective level reducing volume of throughput contributing to an oversupply of live cattle that drove down prices.  Cost inflation, especially in corn and soybeans, has increased the cost of producing cattle, hogs and chickens.  King stressed that there is no evidence that businesses are to blame for escalation in the price of beef.  He quoted Dr. Lawrence Summers, former Treasury Secretary, as noting, “Rising demand with capacity and labor constraints are fully sufficient to account for what we observe in meat packing.”


King stressed that industry consolidation with four major producers responsible for 80 percent of cattle processed was not a factor in high prices at the checkout counter. Over the past 30 years with the same level of concentration, there has been considerable fluctuation in profit among both ranchers and packers.


Quoting the policies and business practices that are typical in the packing industry, King noted the progressive increase in salaries, health programs, improved educational opportunities and potential for promotion of line workers.  Packers currently directly support more than 11,000 independent farmers and feed-lot operators.


So it should be back to the drawing board for Sen. Grassley with the gentle admonition that if it’s not broken don’t try to fix it! Obtaining input from both sides of the issue and studying the economic factors involved before drafting legislation would have been more productive. The ongoing fear is that once legislators have “resolved” the problems in the beef and pork they would roll right on over to fix the chicken industry.


Poultry Industry News

Beyond Meat Reports on Q1 FY 2022

In a press release dated May 11th 2022, Beyond Meat Inc. (BYND) announced results for the 1st quarter of FY 22 ending April 2nd.


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

All downhill from the IPO

1st Quarter Ending.

April 2nd 2022

April 3rd 2021

Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:

Return on Assets (%)


Return on Equity (%)


Operating Margin (%)


Profit Margin (%)


Total Assets




Intraday Market Capitalization



52-Week Range in Share Price: $20.50 to $160.28 50-day Moving average $42.65

Market Close Wed. May 11th $25.97. Open Thur. 12th post release $22.17.

BYND opened at $66 at the IPO on April 5th 2019 climbing to a peak of $234 within three months on July 20th 2019

Forward P/E 666


Chick-NewsA total of 63.7 percent of BYND equity is held by institutions, 8.7 percent by insiders (18% in mid- 2019) with 36.4 percent of the float short.


In Q1 FY 22, 77 percent of revenue was derived from retail sales, 22.9 percent from food service. The U.S. represented 76.5 percent of sales up 4 percent from Q1 FY 21. International contributed 23.5 percent to revenue, down 6.9 percent from Q1 FY 21.


In commenting on results, Ethan Brown, president and CEO stated "In the first quarter, we made good progress against our goal of building tomorrow’s global protein company. Whether furthering strategic partnerships in the restaurant industry, the market success of our first product collaboration with PepsiCo, or the continued acclaim awarded to our products here in the U.S. and EU, we continue to lay a robust foundation for our long-term growth.”


Brown added, “Though we recognize that the decisions we are making today in support of our long-run ambition have contributed to challenging near-term results, including a sizable though temporary reduction in gross margin as we took cost-intensive measures to support important strategic launches, we are confident in the future we are building while advancing our mission to bring plant-based meats and their attendant health, climate, natural resource, and animal welfare benefits to consumers around the world.”


These comments are pure hype. Brown should be addressing realities of his enterprise:-


  • R&D expenditure during Q1 corresponded to 17.9 percent of revenue, up from 14.7 percent during the 1st quarter of FY 21. By comparison Pfizer a leading biopharmaceutical multinational assigned the equivalent of 8 percent of revenue on R&D.
  • SG&A attained 68.6 percent of revenue in the most recent quarter up from 36 percent in Q1 FY 21.
  • Inventory at $283,754 as reflected under assets, represents a stock of raw material or finished product equivalent to 2.6 times Q1 sales implying a stock rotation of over 7 months.
  • Failure to achieve economies of scale with a sharp decline in gross margin from 30.2 percent in Q1 FY 21 to essentially zero during the most recent quarter.


USAPEEC Intensifying Promotional Efforts Through Trade Diplomacy

Chick-NewsChick-NewsAccording to a report in the May 16th MondayLine, Jim Sumner and Greg Tyler recently met with staff of the Embassy of China in Washington, D.C. to discuss concerns relating to exports, with specific reference to HPAI. Topics discussed included recognition and adoption of the World Organization for Animal Health Guidelines to allow for restoration of eligibility to ship product from affected farms and control zones 28 days after decontamination replacing the previous 90-day requirement.  The second issue was establishing export restrictions based on shipping date rather than production date.


In a second meeting to facilitate chicken exports, Jim Sumner and Greg Tyler met with officials at the Embassy of Iraq to discuss import bans and the approval of U.S. plants.  Audits are scheduled for October 2022 allowing for an extension during which the U.S. can continue exports.  USAPEEC has proposed that Iraq officials should audit a sample of poultry plants in place of each individual facility.  It was also requested that Iraq extend the shelf life of frozen chicken from 12 months to 18 months. The commercial attache for Iraq noted that importers were desirous of establishing closer contact with U.S. suppliers to raise awareness of U.S. products.


USPOULTRY Funds Research on Salmonella Control

Chick-NewsIn a May 12th press release, USPOULTRY announced a grant of $119,000 to the University of Illinois to review control of Salmonella in raw poultry. The action is prompted by concerns that FSIS will introduce new regulatory measures including intervention at the live bird level to reduce contamination with bacterial pathogens.


A range of modalities will be considered with input from the U.S. poultry meat industry through a representative Advisory Council.


Research was made possible by donations to the USPOULTRY Foundation including a gift from Cooper Farms.


Salmonella Contamination Impacts U.K. Chicken Supply

Chick-NewsUK broiler producer Cranswick County Foods plc. has initiated a recall and closed a plant in Hull to be decontaminated following an investigation of the source of Salmonella identified on a wide range of further-processed chicken products including salads, deli fillers and wraps to be supplied to supermarkets and restaurants. The problem was identified on routine quality control.


A spokesperson for the company noted, "as a precautionary measure we have asked our customers to remove any of their products containing our ready-to-eat chicken produced during the affected period and we are working closely with the Food Standards Agency to resolve the matter".


Chick-NewsThe recall has had a profound impact on the retail market since Cranswick supplies raw material incorporated into salads, sandwiches and meal kits.  Virtually all U.K. supermarkets including Marks and Spencer, Tesco, Waitrose, Aldi and Sainsbury's have removed product from shelves.  Coffee shops Costa, Starbucks and sandwich store Pret a Manger have also recalled product.


Concentration of Broiler Production by State for 2021

The USDA National Agricultural Statistical Service recently issued the publication Poultry-Production and Value: Summary for 2021. The live production of the top five states amounted to 39,197 million pounds representing 66.2 percent of the U.S. total of 59,248 million pounds.  The top six states In descending rank were:-


  • North Carolina 8,061 million lbs. up 2.3 percent from 2020
  • Georgia 7,923 million lbs. down 2.0 percent and falling from first rank
  • Arkansas 7,464 million lbs. up 1.6 percent
  • Alabama 6,561 million lbs. down 0.7 percent but unchanged in rank
  • Texas 4,734 million lbs. up 2.1 percent
  • Mississippi 4,454 million lbs. down 3.4 percent but unchanged in rank


Pennsylvania ranked fourteenth with 1,387 million lbs. was up 10.1 percent followed by 15th ranked Tennessee with 1,133 million lbs. up 9.9 percent.


The three Delmarva states collectively produced 5,224 million lbs. collectively down 4.3 percent from 2020 and representing 8.9 percent of national production equivalent to the  “5th-rank” if regarded as a single state.


To avoid disclosure of specific companies, data for ten states was combined into the "other" category comprising 3,725 million lbs. down by 0.8 percent.  The production from Nebraska would have been an instructive figure reflecting the output of the Costco/Lincoln Premium Poultry complex.


Minnesota Funds Mobile Meat Processing

Chick-NewsFunds from the American Rescue Plan will be used to develop and install mobile meat processing and to train butchers. A total of $2.9 million will be assigned to the Farmers Union Foundation to create 150 new jobs, retain 200 jobs and generate private investment.


It is difficult to see how this small drop in the bucket can do more than benefit small and local communities.  It will not in any way address disparities between processing capacity and demand under unusual circumstances such as the 2020 COVID pandemic that shuttered or constrained output of both hog and beef plants.  Expenditure on small, and by definition inefficient, meat processing is a diversion from the problem of inadequate capacity in large plants.  In recognition of the situation in 2020 and the consequences of the Tyson Foods fire in the Holcomb, KS. plant, private enterprise will invest close to a $1 billion in extensions and improvements. This expenditure along with the establishment of a few new large plants and installation of mechanization should provide spare capacity to account for unusual situations.


The comment by the Secretary of Commerce, Gina M. Raimondo, that the proposed investment in Central Minnesota “will help address supply chain issues and increase U.S. competitiveness in the global market” is unrealistic political puffery.


JBS Invests in Middle East

Chick-NewsJBS S.A. has announced the purchase of meat processing plants in Saudi Arabia and the United Arab Emirates.  The company intends rebranding products and strengthening distribution in the region focusing on local demand and halal products as the primary focus.


JBS obviously recognizes difficulties in production and shipping from Brazil in the face of growing demand for domestic production.  Outright ownership of production and processing facilities in the Middle East together with joint ventures denotes a more aggressive commitment and marketing strategy that will ultimately be to the disadvantage of the U.S. that is relying on leg quarters to maintain export volume.


Kentucky HPAI Farms to be Repopulated

Chick-NewsBroiler grow-out farms in western Kentucky that were depopulated due to HPAI have been cleared by APHIS to resume production.  In accordance with the World Organization for Animal Health (OIE) regulations, county or statewide restrictions imposed by importers should be lifted 28-days after completion of decontamination with demonstration of freedom from infection.


The broiler segment of the poultry industry was largely spared from infection during the 2022 epornitic but lifting of restrictions imposed on the more than 125 affected turkey farms will expedite restoration of production and will ease restrictions on export of all poultry products from counties and states impacted by HPAI.


Tyson Foods Inc. Reports on Q2 FY 2022

Chick-NewsIn a press release dated May 9th Tyson Foods Inc. (TSN) announced results for Q2 for FY 2022 ending April 2nd 2022.     


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


Second Quarter Ending

April 2nd 2022

April 3rd 2021

Difference (%)





Gross profit:




Operating income:             




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and liabilities:




12 Months Trailing:




           Return on Assets    (%)




           Return on Equity    (%)




           Operating Margin   (%)




           Profit Margin          (%)




Total Assets




Intraday Market Capitalization





52-Week Range in Share Price:  $69.83 to $100.72.  50-day Moving average,  $91.39

Market Close: Friday May 6th $90.85. Close Monday May 9th post-release $94.37.

Forward P/E 11.5                  Beta 0.8


The Chicken Segment attained sales of $4,086 million ($3,553 million in Q2 FY 2021) representing 31.2 percent of Company revenue. Operating income was $198 million adjusted to $203 million. In Q2 of 2021 operating income was $6 million.


For comparison among Tyson Foods’ business segments the adjusted operating incomes were respectively:- Pork, $59 million; Beef, $638 million; Prepared Foods $263 million.


In commenting on results Donnie King, president and CEO stated “Our performance in the first half of the year reflects our improving operational execution and strong customer and consumer demand for our brands and products,” He added “We continue to prioritize investment in our team members and business in a number of ways, including increasing pay, expanding pilots of health and child care services, and providing skills and life services, such as free college education and legal services for immigration. Although we continue to see inflationary pressures across the supply chain, we are working to drive costs down by continuing to increase our efficiency, productivity, and bringing more capacity on line. This is all part of our strategy to win with customers and consumers, win with team members and win with excellence in execution.”

Chick-NewsWith regard to the Chicken Segment the company release included:- 
Sales volume increased in the second quarter and first six months of fiscal 2022 primarily due to a strong demand environment partially offset by continued supply chain constraints. Average sales price increased in the second quarter and first six months of fiscal 2022 due to the effects of pricing initiatives in an inflationary cost environment. Operating income increased in the second quarter and first six months of fiscal 2022 due to increased sales volume and higher average sales prices, partially offset by the impacts of inflationary market conditions including increased supply chain costs and a challenging labor environment. In the second quarter of fiscal 2022, we experienced $100 million of higher feed ingredient costs and $101 million of net derivative gains as compared to $10 million of net derivative gains in the second quarter of fiscal 2021. In the first six months of fiscal 2022, we experienced $285 million of higher feed ingredient costs and $159 million of net derivative gains as compared to $83 million of net derivative gains in the first six months of fiscal 2021. Additionally, operating income in the first six months of fiscal 2022 was impacted by $18 million of insurance proceeds, net of costs incurred related to a fire at a production facility and was impacted in the first quarter of fiscal 2021 by a $320 million loss from the recognition of a legal contingency accrual.


Chick-NewsThe report concluded with a forward projection relevant to the Industry:-

USDA projects chicken production will increase approximately 1% in fiscal 2022 as compared to fiscal 2021. We anticipate an adjusted operating margin of 5% to 7% for fiscal 2022 as we continue to expect stronger performance in the second half of the fiscal year.


Guidance for FY 2022 included Revenue between $52 and $54 billion; Adjusted operating margin of 8 to 10 percent and Capex of $2 billion. The Company warned that supply chain issues would impact international operations.



China Slashes Pork Imports

Chick-NewsWith more rapid recovery from African swine fever than expected, China has drastically reduced importation of pork.  According to the USDA-FAS, pork exports for the first quarter of 2022 amounted to 39,000 metric tons representing a 75 percent decline from the corresponding quarter in 2021.  U.S. pork exports were also impacted by reductions of 15 percent for Japan, 17 percent for Canada and 7 percent for South Korea, contributing to an overall 21 percent decline to 522,000 metric tons.  Mexico did, however, increase imports by 40 percent during the first quarter.


Chick-NewsThe U.S. is in a noncompetitive situation in China compared to the E.U. since a tariff of 25 percent is applied to U.S. imports.


Equine Influenza Responsible for Mortality in Mustangs

According to a ProMED report on April 28th, equine influenza subtype H3N8 is responsible for ongoing mortality in mustangs corralled in Colorado. More tham 100 horses died in April according to the Bureau of Land Management.  Horses were transferred from Rio Blanco County in Colorado near the Utah state line in late fall 2021 following wildfires and were part of a population of 2,500 wild mustangs rounded up from rangelands. 


Equine influenza caused by H3N8 is a common cause of respiratory disease in equines and is endemic to the continents of Europe, Asia and the Americas.  Stressed horses are obviously more susceptible to infection with both viral and secondary bacterial pathogens and this would be especially the case with wild horses confined in pens in close proximity, facilitating infection by inhalation of aerosol droplets and fighting..


Wingstop Posts Q1 FY 2022 Financial Results

In a May 4th release, Wingstop Inc. (WING) posted financial results for the 1st quarter of fiscal 2022. This specialty QSR Company competes directly with privately held Buffalo Wild Wings and indirectly with national chains offering chicken. The Company experiences the same pressures of increased cost of ingredients, labor and transport as competitors in an environment still restrained by COVID and inflation. In addition, flavored wings are more readily available from supermarkets and in bulk from club stores for home meals and entertaining.


Domestic same-store sales increased by1.2 percent. System-wide sales were up by 12.7% Digital sales remained at 62.3 percent compared to Q1, 2021.


For the 1st Quarter of FY 2021 ending March 26th 2022, net income was $8.68 million on total revenue of $76.2 million.  Comparable figures for the 1st quarter of fiscal 2021 ending March 27th 2021 were net income of $13.2 million on total revenue of $70.7 million.  EPS fell from $0.44 for the 1st quarter of fiscal 2021 to $0.29 for the most recent quarter.


The Company provided guidance of a low single-digit increase in sales growth for FY 2022 with a diluted EPS of $1.55 to $1.57.


Wingstop operates 1,791 stores of which 37 U.S. locations are company-owned with 203 franchised operations in international markets.


In commenting on the quarter Michael Skipworth, president and CEO stated "Our first quarter 2022 results reflect the strength and momentum in our global development with a record 60 net new restaurant openings," He added "We delivered domestic same-store sales growth of 31.8% on a three-year basis. This coupled with the meaningful deflation we are experiencing in bone-in wings gives us confidence to raise our net new unit guidance for our full year to 220+. Our strategic growth levers and proactive investments in technology have positioned our brand for continued long-term growth as we continue executing against our vision to become a Top-10 Global Restaurant Brand." 


On February 28th the management of Wingstop announced a restructuring of debt. Securitized notes to the value of $250 million were issued with the proceeds used to strengthen liquidity and for “corporate purposes” Wingstop has also renegotiated the $50 million variable funding note to allow for borrowing of up to $200 million subject to predetermined conditions


On March 26th, WING posted assets of $507.3 million, of which $99.6 million comprised goodwill and trademarks against long-term debt of $710.9 million. The Company had an intraday market capitalization of $2,742 million on May 4th ($4,180 million on March 1st.) WING traded with a forward P/E of 62.9 and has ranged over a 52-week period from $82.80 to $187.35 with a 50-day moving average of $116.68.  Twelve-month trailing operating margin was 24.9 percent and profit margin 15.1 percent.  Return on assets over the past twelve months was 19.1 percent. At close of trading on March 3rd pre-release, WING was priced at $89.18. At noon post-release on May 4th WING traded at at $90.16. On March 1st after announcing new financing,  WING was priced at $146.82.


McDonald’s McPlant™ Disappointing in Tests

Chick-NewsA March 24th report in Restaurant Dive cites BTIG Market Research, showing low consumer demand for the McPlant™ burger.  Despite initial acceptance in an early test, market evaluation in California and Texas is disappointing.  Sales are in the region of one third of the anticipated 60 per day in each of the stores offering the product.  Accordingly, operators are extending waiting times for counter delivery and delaying drive-thru turnover. 


BTIG consider that price is also a consideration and that McDonald’s, if it wishes to persist with the McPlant will have to alter price, upgrade product, and develop a more appropriate promotional strategy before contemplating a national launch.  In a conference organized by Fast Company, Morgan Flatley, Global CMO of McDonald’s doubled down on the company intention to continue with plant based items characterizing the McPlant as “a product that is here to stay”.  The company continues to work with Beyond Meat, the supplier of the plant-based patty, as a component of a corporate initiative to achieve increased sustainability for proteins served.



McDonald’s contemplates an expansion of menu items including plant-based chicken substitutes. Are they trying to push a piece of string?


Maple Leaf Foods Reports on Q1 of FY 2021

Chick-NewsIn a press release dated March 4th Maple Leaf Foods Inc. (MFI-TO) announced results for the 1st Quarter of FY 2022 ended March 31st.


The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS (conversion of CAN$1=US$0.78)


1st Quarter Ending March 31st.



Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income1







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and lease obligations*:




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets*

 Intangibles and goodwill % of assets






Market Capitalization



* March 31st 2022/2021


Chick-NewsQ1 2022 Meat Protein Segment:

Sales, $849 million, up 7.5% from Q1 2021.

Adjusted operating earnings $39.8 million down 35.9% from Q1 2021.


Q1 2022 Plant Protein Segment:

Sales, $35.0 million, up 5.3% from Q1 2021.

Adjusted operating loss $(27.2) million 36% improvement from Q1 2021.


52-Week Range in Share Price: $18.95 to $25.43 50-day Moving average $22.53

Forward P/E 20.3 Beta 0.4

Market Close pre-release May 3rd $21.36

Market Close post-release May 4th $21.76


Insider shareholding 39.2%. Institutional shareholding 25.3%


Chick-NewsIn commenting on Q3 results Michael H. McCain, president and CEO of Maple Leaf Foods stated, “Our team’s perseverance and resiliency during the past two years has been nothing short of remarkable,” He added “As fully expected, intense Omicron impacts, including high levels of absenteeism, inflation and supply chain disruptions, challenged us operationally, yet we achieved exceptional business performance in these extreme conditions. Revenue grew 7% and we remain on target to achieve our goal of 14 to 16 percent adjusted EBITDA margin in Meat Protein this year.”


With respect to the Plant Protein Segment McCain commented, “ We showed a modest 5 percent growth rate and are continuing our methodical work to adjust the business investment model to match our new outlook for long-term category growth. We will rightsize our manufacturing footprint and SG&A structure to deliver our goal of breakeven adjusted EBITDA or better in the latter half of 2023,” said Mr. McCain.


The Company provided the following guidance:-


“Meat Protein: Expect mid-to-high single digit sales growth with Adjusted EBITDA Margin expansion near the lower end of the 14% to 16% target by the end of 2022”.

“Plant Protein: Targeting to deliver neutral or better Adjusted EBITDA in the latter half of 2023”.

The Company announced that it is moving forward with a planned leadership transition plan for the Board and Management. Michael McCain will serve as the Executive Chair of the Board and will continue as CEO for the next year as part of the management transition plan. Curtis Frank, currently the President and COO, will assume the role of CEO during Q2 of 2023.


Wayne Farms Recalls 15 Tons Of RTE Chicken Breast Product

According to a USDA-FSIS announcement on May 2nd, Wayne Farms, LLC is recalling approximately 15 tons of Ready-To-Eat chicken breast fillets produced at a Decatur, AL plant between March 1st and 21st.


The problem was recognized following customer complaints that the RTE product appeared undercooked.  Follow-up evaluation confirmed that the implicated batches may not have reached appropriate cooking temperature.


The need to thoroughly cook chicken portions is self-evident, given the prevalence of Salmonella  and Campylobacter contamination on raw parts.  Cooking is an absolute kill step in processing. Plants functioning with mandatory HACCP programs must monitor the adequacy of the temperature and time of exposure during processing. This is not the responsibility of consumers.


Analysts Downgrade Beyond Meat, Inc.

Piper Sandler recently downgraded Beyond Meat, Inc. (BYND) to neutral from underweight.  Other analysts ranged in their estimates from hold to sell.  The 12-month consensus target price for BYND is $48.13 with a May 2nd close at $38.33.


The YTD share price is 44 percent down from a high of $63.33 on January 12th. BYND peaked at $196.51 on July 1st, 2019, amid the unjustified exuberance over plant-based alternatives to meat.


Currently, BYND has a market capitalization of $2,436 million and has traded over the past 52 weeks from $160.28 down to $35.21.  The forward P/E is an eye-watering 666. On a trailing 12-month basis, the company has an operating margin of -34.2 percent and a profit margin of -39.2 percent.  The return on assets is -10.8 percent and on equity -72.9 percent. Of the equity, 8.7 percent is held by insiders and 63.7 percent by institutions.  On April 14th, 41 percent of the float was short.


Much of the recent pessimism is associated with reports that test marketing of the McDonald’s McPlant™ has received minimal acceptance.  In an inflationary environment, only a dedicated few consumers concerned over welfare and sustainability are willing to pay more for a product with lower nutritional value and with organoleptic qualities considered inferior to real beef.


Underground Sequestration Of Carbon Dioxide Presents Potential Liabilities

Disposal of carbon dioxide is the unspoken and potentially serious problem associated with fermentation of corn to produce ethanol.  It is estimated that only 25 percent of the byproduct is currently captured and the remainder presumably, enters the atmosphere as a greenhouse gas.  So much for the much vaunted claims of sustainability and the environmental benefits of ethanol biofuel.


In an attempt to address the problem, a number of companies have filed applications to install pipelines linking major ethanol plants with a central disposal site. The question now remains as to whether there could be long-term environmental impacts from subterranean storage.  


The fact that there may be practical and legal problems is evidenced by the fact that legislatures friendly to corn-based ethanol are absolving ethanol producers, potential pipeline operators and storage companies from responsibility for any untoward results of sequestration.


Long-term storage of carbon dioxide is too serious a problem to leave to corn-state legislators whose major preoccupation is placating their current constituencies to remain in office with little concern for the future. We need a coordinated science-based national policy on disposal of nuclear waste, coal-ash and carbon dioxide from energy generation to benefit future generations.



Labor Advocacy Group Cites Twelve Major U.S. Employers

Egg-NewsThe National Council for Occupational Safety and Health (NCOSH), an independent labor advocacy group unaffiliated to OSHA, has issued a list of twelve employers cited for accidents that have taken lives during the past year. These include:-


  • Amazon with fatalities at a Bessemer, AL warehouse destroyed by a tornado
  • Dollar General stores with a list of employees who were victims of robberies resulting in injuries.
  • Foundation Food Group with six workers died following a nitrogen leak
  • Starbucks that recorded a high incidence rate of COVID among workers


The NCOSH claims that employers cited were negligent and allowed workers to be exposed to risks.  In reviewing the list, it is evident that tornadoes are not necessarily the responsibility of employers. However investigations revealed deficiencies in preparedness training, failure to provide adequate shelter in tornado-prone areas or substandard construction not conforming to established engineering codes.


 The organization could have recognized companies, especially in the food industry, that have been proactive in introducing measures to control and prevent COVID, reduce ergonomic injuries and who are providing preventive health services.  More progress will be made through dialogue and mutual respect between workers and employers than condemning companies for presumed or alleged negligence.


Chipotle to Establish Venture Fund

According to an April 20th release, Chipotle Mexican Grill Inc. has established Cultivate Next, a venture fund intended to support Series B Enterprises. As expected the $50 million fund will target innovations for fast casual restaurant chains that are compatible with the corporate strategy of Chipotle.


CEgg-Newsurt Garner, Chief Technology Officer at Chipotle stated, "we are exploring investments in  emerging innovation that will enhance our employee and guest experiences and possibly revolutionize the restaurant industry".


Chipotle has previously invested in robotic technology, radio-frequency identification for tracking ingredients and in autonomous delivery.


Future Of Vegetable-Based Meat Alternatives

Chick-NewsNegative comments from Maple Leaf Foods regarding slow growth in sales, evidence that the McPlant™ Burger is failing to gain traction in test markets and data from IRI all suggest a pause in the upward sales trajectory of alternatives to meat. Following the release of various ground beef substitutes for both consumer and institutional markets, CHICK-NEWS suggested that initial growth was associated with a “curiosity factor” and that future sales would depend on equivalence in organoleptic qualities and cost in comparison with real products. 



A recent survey conducted by Ingredion, Inc. showed that consumers of alternatives to meat concurrently purchase beef, pork and chicken. Given that 65 percent of the respondents to the survey rated taste as their top requirement followed by 48 percent motivated by label additives it may be assumed that plant-based meat alternatives are failing on both counts.  In surveys, “taste” may also include texture and odor in addition to appearance when cooked.  Clearly, there are differences disfavoring substitutes.  To attempt to reproduce the organoleptic qualities of real meat, manufacturers of plant substitutes include a number of additives that obviously concern many consumers.


Among those surveyed by Ingredion, three quarters noted that they would be prepared to pay more for plant-based substitutes, provided they were equivalent or superior to real products as served in restaurants.  At this time, all of the red meat substitutes are priced higher than quality ground beef displayed in supermarket coolers without offering equivalence in properties as perceived by the consumer.


CEOs of companies producing alternatives to meat should follow the lead of Maple Leaf Foods and re-evaluate product quality, pricing and volumes or just simply heed the advice of Fagin in the musical Oliver, “I think I better think it out again!”


Lightlife™ Plant-Based Chicken Breasts Developed

Chick-NewsGreenleaf Foods, a subsidiary of Maple Leaf Foods based in Canada, has developed a range of plant-based chicken breasts and strips.  According to Jitendra Sagili, Chief Research and Development Officer for Greenleaf Foods, “These products reflect our vision of relentlessly evolving the product designs, utilizing ingredient technologies delivering on consumers expectations for taste, color and texture.” Field Roast, a sister company, will launch Chao Creamery Cantina-Style queso containing fermented tofu, bell peppers and spices.


Financial results for the first quarter of 2022 for Maple Leaf Foods, parent company of Lightlife and Greenleaf Food are in this edition of CHICK-NEWS.



BRF S.A. Posts Q1 Loss

Chick-NewsOn May 4th, BRF S.A. posted results for the first quarter of Fiscal 2022, ending March 31st. For the period the Company lost $309 million on revenue of $2,408 million.  Comparative values for Q1 of FY 2021 were net income of $4.4 million on revenue of $2,118 million.


In commenting on results, Lorival Nogueira Luz, Jr., Global CEO, attributed the loss to events in Eastern Europe and disruption of exports due to lockdowns in China.


BRF posted assets of $11,122 million with long-term debt of $3,942 million against a market capitalization of $3,000 million. BRF has traded in a 52-week range of $2.39 to $6.08 with a 50-day moving average of $3.31. On May 4th, pre-release BRF closed at $2.79 falling to $2.57 at close of trading on May 5th.


On a trailing 12-month basis, operating margin attained 6.5 percent and profit margin 0.9 percent.  The company generated a return on assets of 3.7 percent with 5.9 percent on equity.


USAPEEC Responding To Challenges of HPAI

Egg-NewsChick-NewsOver the past eight weeks, the USA Poultry and Egg Export Council (USAPEEC)  has performed tirelessly to communicate with importing nations to convince them of the eligibility of the U.S. to supply eggs, broiler and turkey meat free of avian influenza virus.  Following the 2015 highly pathogenic avian influenza (HPAI) epornitic, USAPEEC recognized the vulnerability of the U.S. if importing nations imposed national or statewide bans following an isolated case of Avian Influenza, irrespective of pathogenicity.  The benefits of the diplomacy and negotiations are now evident as the U.S. has apparently maintained export volume during March and April, albeit with some selection of plants of origin routes of transport and ports of loading.


Acceptance of regionalization as accepted by the World Organization of Animal Health has been the key to the ability of the U.S. to continue shipping products.  Convincing potential customers of the validity of regionalization and assuring them of the ability of the U.S. to diagnose and contain outbreaks and maintain an effective program of surveillance has been the responsibility of the USAPEEC. Dr. John Clifford, in his previous Egg-Newsrole as Chief Veterinary Officer represented the USDA-APHIS in international venues and gained the confidence of his then counterparts in importing nations.  It is fortuitous that his experience and credibility are now applied as Veterinary Trade Policy Advisor to the USPEEC to assist CEO Jim Sumner and his team to maintain export volume.


USAPEEC has served as an important link among USDA-APHIS, producers and shippers.  The Council has responded with effective communication as the HPAI situation has developed.


Recent achievements include:-

  •  Cuba has reduced restrictions to county-wide bans and will lift restrictions 28 days after completion of cleaning and disinfection, bringing this important importing nation into conformity with OIE recommendations
  • Taiwan has now placed bans on the basis of production dates in place of shipping dates.  This will allow product harvested more than 14 days before the detection of HPAI to be eligible for export. 
  • USAPEEC has been instrumental in translating and interpreting requirements imposed by importers, especially with regard to dates relating to bans and transshipment of sealed containers from the plant of origin to the port of loading.
  • China has now agreed that shipments from states in which HPAI has occurred will be allowed entry if an issued health certificate predates the confirmation of HPAI.  This requirement will allow product loaded into containers to be consigned without logistic delays.
  • USAPEEC has coordinated proposed audits of processing plants authorized for export.  Currently, the Council is advocating audits of systems to obviate individual plant visits and audits conducted by representatives of importing nations. These are both expensive for both parties and disruptive to plants without serving a practical purpose.


During the recent months of turbulence associated with outbreaks of HPAI, the USAPEEC has facilitated movement of product through preemptive planning, application of scientific principles and demonstrating compliance with OIE policies. The industry owes the Council and its dedicated staff a debt of gratitude.


NCC Posts Infographic Relating to Contract Growers

Egg-NewsRecently Dr. Thomas Elam published a scholarly review on the financial security ad earnings for contract growers, providing details of low turnover rates, long tenure with integrators and other benefits.  A summary of the findings was posted on CHICK-NEWS. This week the NCC unveiled an infographic on their website summarizing the findings in a form that consumers can review and digest.


Among the facts presented were high income for contract broiler growing compared to other farming enterprises, the demand for contracts and the mutual dependence of integrators and contractors to produce wholesome chicken at the lowest possible cost.


Dr. Elam concluded, "raising chickens under contract is one of the best and most reliable sources of cash flow that helps keep families on the farm.  The real winner is the American consumer who benefits from the healthiest and most affordable protein in the meat case".



Dr. Douglas P. Gladue Co-recipient of Arthur S. Fleming Award

Egg-NewsThe USDA Agricultural Research Service has announced that Dr. Douglas P. Gladue will receive the 2021 Arthur S. Fleming Award.  Dr. Gladue was the lead researcher responsible for the development of an African Swine Fever vaccine at the USDA Agricultural Research Service (ARS) Plum Island Animal Disease Research Center, located at Orient Point, NY. 


The award recognizes outstanding achievements by federal employees.  Administrator of the ARS, Dr. Chavonda Jacobs-Young, stated “The ability of the ARS to deliver scientific solutions to animal disease and African Swine Fever is strengthened by Dr. Gladue’s brilliant mind and research.”  She added, “We appreciate his commitment to innovation and collaboration and are proud to see his achievements receive the recognition it deserves.”


There are currently no approved commercial vaccines for African Swine Fever, accordingly the candidate product developed by the ARS will be commercialized and made available worldwide.


AEgg-Newsfrican Swine Fever has never been diagnosed in the U.S. but projections suggest if it is introduced to the domestic hog industry from Asia or the Caribbean, control will cost over $14 billion for the first two years and $50 billion over 10 years.

The pork industry in China is only now recovering from the introduction of African Swine Fever in 2019, that esulted in the loss of almost half of the nation’s sow herd within a year. Restoration of domestic supply will reduce imports by China from both Brazil and the U.S.


Settlement of Civil Case Alleging Anti Competitive Action

A number of broiler integrators defending a civil lawsuit alleging collusion and price fixing by customers have settled for $104 million.  Defendants include Pilgrim’s Pride Corporation, Tyson Foods, Fieldale Farms, George’s Inc. and Amick Farms among others.  The current settlement approved by the presiding judge follows other settlements in past months.  Plaintiffs in the current lawsuit include restaurant chains and chicken processors.

Approximately $30 million will be assigned to plaintiff’s attorneys with $10 million to cover expenses.


Yum China Holdings Introducing Technology To Save Energy

Yum China is committed to achieving net-zero greenhouse gas emissions by 2050 in accordance with a science-based initiative. Joey Wat, CEO of Yum China stated, “We are committed to driving meaningful change and pioneering in the restaurant industry towards net-zero emissions.  Building Green Pioneer Stores is an important part of our commitment.”


Practical measures include installation of solar panels on stores, coupled with power storage systems to reduce consumption of coal-fired electricity.  Yum has installed energy management systems based on artificial intelligence to reduce energy consumption by ten percent annually.  Tubular daylight systems are installed to make use of natural lighting.  Recycled materials are used in construction together with bamboo materials and recycled products that provide insulation and reduce waste. Yum China is now delivering environmentally friendly Family Buckets through KFC Green Pioneer Stores in Beijing.

Measures adopted to reduce waste and to incorporate energy sparing in construction and operation are now widely publicized, generating goodwill, especially among the over 300 million KFC loyalty groups members. 


Tyson Achieves Zero Waste Landfill at Six Plants

Egg-NewsGold-Level validation has been granted to Tyson Foods with respect to six broiler plants in Tennessee, Arkansas, Kentucky, and Georgia that have achieved Zero Waste to Landfill status.  All of the plants recycle animal waste to byproducts and have eliminated delivery of other materials include packaging, compost, liquids, and food to landfills.


Tyson Foods has designed integrated waste management systems that will reduce greenhouse gas emissions with all facilities subject to third-party validation.  To achieve the Zero Waste to Landfill Gold-Level certification, each plant was required to document methods for handling waste and avoid disposal to landfills.


Additional information on Tyson sustainability programs can be accessed at <www.tysonfoods.com/sustainability>.


Tyson Foods To Expand Educational Opportunities for Employees

Egg-NewsOn April 25th, Tyson Foods, Inc. announced an extension of the company-sponsored educational assistance program.  Commencing mid-2022, all U.S. employees will have the option to obtain associate, undergraduate or master’s degrees with full reimbursement by the company.


The program will be administered by Guild as part of the initiative incorporating 175 options offered by 35 universities.  It is anticipated that Tyson will commit $60 million to cover all fees, tuition and educational material. Areas of study will include agriculture, supply chain and operations, manufacturing and automation, and sustainability.


In commenting on the program, John R. Tyson, Executive Vice President and Chief Sustainability Officer, stated, “This commitment to our team members reinforces our belief that they are the lifeblood of our current and future success.”  He added, “Providing educational benefits will continue to lay a foundation for personal and career growth for our team members.”


For employees intending to obtain certificates and associate qualifications, programs will include English comprehension, career readiness and applied line management techniques.  The company will also reimburse attendance at executive programs leading to certification in leadership, business management and applied aspects of technology.


Foster Farms Cited by California Labor Commissioner

Egg-NewsAccording to press reports, Lilia Garcia Brower, California Labor Commissioner, has cited Foster Farms and staffing companies for alleged illegal practices during the COVID outbreak. Following complaints, a detailed audit was initiated in 2020, centered on the Livingston, CA plant. It was claimed that temporary workers provided by staffing agencies were not informed of sick leave policies including the availability of supplemental paid absence.  According to the Department of Labor, close to 3,500 workers were affected.


Egg-NewsIn announcing the action and imposition of $3.8 million in penalties, the Commissioner stated, “Employers are obligated to ensure that employees are made aware of sick leave benefits intended to protect workers, their families and the public from the spread of COVID.”


In response, a company spokesperson noted, “Foster Farms is reviewing the recent action by the California Labor Commissioner.  We abide by all federal and state employment laws.  An extensive audit of Foster Farms’ full-time employees failed to find any violations.”



U.S. Manufacturers Partnering With Community Colleges

Egg-NewsFollowing the lead of Germany, many U.S. manufacturers are establishing contacts with local community colleges to develop specific training programs to satisfy the need for technicians and operators.  Along with tax rebates, provision of infrastructure, state and county officials offer to create new colleges or to develop programs in existing facilities tailored to suit the needs of a company.  This is especially the case with the location of foreign auto manufacturers and parts suppliers that have erected plants in South Carolina, Alabama, Kentucky, Tennessee and Ohio. Trained personnel are hired on graduation or companies run apprenticeship programs with alternate years in education and the workplace.


The poultry industry is now embracing the program with the Danville Community College providing specific training programs for Tyson Foods.  The company is establishing a further-process plant in the Cane Creek Centre near Ringgold, VA.  Danville Community College will develop a program to train maintenance technicians. The program comprises 700 hours of technical training with both day and evening sessions offered. Students completing the curriculum will receive priority in hiring with the first class graduating in 2023. 


Egg-NewsDr. Muriel Mickles, Interim President at Danville Community College, stated, “The career path we hope our students will pursue at Tyson Foods will begin with roles that pay well and will have significant upward mobility.”  She added, “Maintenance technicians have the opportunity to begin their careers with Tyson at nearly $45,000 in annual pay plus benefits.”


Derrick Baucom, VP for Poultry Operations at Tyson Foods, stated, “We strive to be the most sought-after place to work, and we are thankful for the warm welcome we have received from the people of Danville in Pittsylvania County.


In 2021, Pilgrim’s Pride announced programs to support local community colleges in areas where the company operates. This will provide employees and their families with the opportunity to obtain training in diverse fields that will allow upward mobility.


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