Editorial

State of the Plant Protein Business

The recent releases of the Q3 results by Maple Leaf Farms detailing the performance of their Plant Protein segment and the Q3 results posted by Beyond Meat Inc. raises serious questions as to the financial viability of plant-based substitutes for red meat. 

 

Beyond Meat posted a decline in sales of 12.7 percent and the Plant Protein segment of Maple Leaf Foods was down 6.5 percent from their corresponding quarters in fiscal 2020.  Beyond Meat posted a loss of $54 million on sales of $106 million that exceeded the loss of $19 million for the third quarter of 2020.  The Plant Protein segment of Maple Leaf Foods posted a loss in adjusted earnings of $30 million on sales of $38 million, although a 12.8 percent improvement over Q3 of fiscal 2020.

 

The negative return posted by Maple Leaf Foods for their Plant Protein segment contrasted sharply with profitability from the larger Meat Protein segment attaining adjusted earnings of $85 million, up 32 percent from Q3 2020 on sales of $920 million, and 13 percent higher than for the corresponding quarter of the previous fiscal year.  Michael H. McCain, President and CEO of Maple Leaf Foods implied that his Company is reexamining their investment in plant protein noting, "given current category performance a review is underway that will either affirm or adjust our strategies or investments going forward".

 

It is evident that both companies with relatively similar plant protein products have lost sales.  This is attributed in part to the fact that initial acceptance and growth in demand was attributed to a "curiosity factor" in addition to appealing to the environmentally conscious.  Media reports and especially laudatory articles in vegan-oriented platforms extolled the virtue of plant substitutes frequently deprecating the welfare and sustainability aspects of conventional meat.

 

It is evident that Beyond Meat is committed to retail with a proportion of 71 percent of U.S. sales although down 13.9 percent for the most recent quarter.  This could be due to consumer disaffection with quality including texture, flavor or appearance when cooked.  It is also evident that price is a significant deterrent to inducing consumers to convert from real meat to plant-origin substitutes.  A recent visit to an upscale supermarket showed that a range of plant-based brands including Beyond Meat were priced over a range 80 to 85 cents per ounce compared to high quality grass-fed beef at 70 cents per ounce and USDA prime ground beef in the 50 cent range with ground turkey even less expensive at 35 cents per ounce.  There is obviously a limit to the willingness to pay for intangible attributes including welfare and sustainability, especially in an inflationary food environment where cost is becoming an important factor in willingness to pay.

 

The thesis that there is a curiosity factor driving early acceptance of vegetable-based alternatives to meat is supported by the market strategy apparently demonstrated by Beyond Meat.  During the first week of November, CHICK-NEWS reported on the entry of the Company into the Australia and New Zealand.  The third quarter report of the Company notes that international sales were up 142 percent.  The question arises as to whether the company is forced to consistently find new markets to take advantage of "low-hanging fruit" by appealing to environmentally and welfare conscious consumers and those willing to “try” alternatives.

 

The CEOs of both companies point to the high expenditure in promotion mainly in the form of discounts that detract from profitability.  Given the declines in revenue, promotional expenditure does not appear to be effective driver of sales.

 

An interesting observation is the decline in gross margin posted by Beyond Meat.  It is evident that this Company is unable to capture benefits from economy of scale.  Gross margin declined by 20 percent from a value of 27.0 percent in Q3 of 2020 to 21.6 percent for the most recent quarter.

 

The founder of Beyond Meat evaded the fundamental issues of how the Company will attain future profitability and provide shareholders with a return on equity. In the quarterly investor call Ethan Brown pointed to “weather” and other presumably non-recurring misfortunes, simply expressing hope for a future improvement.  The shareholding of Beyond Meat comprises insiders with approximately 11 percent and institutions below 55 percent, presuming a high proportion of independent retail investors. And then there are the shorts.  Despite hype and promises, financial performance is critical to long-term success.  Beyond Meat has ranged in 52-week share price from a high of $221.00 to $91.95 with a 50-day moving average of $103.60.  After the release on November 10th, BYND fell 18.6 percent after hours and during trading on November 11th fell an additional 13.3 percent followed by what might be regarded as a "dead cat bounce" of four cents in after-hours trading.  The 32 percent of float short as of October 28th and deteriorating profit and operating margins are inconsistent with long-term prospects.

 

At this time, privately held Impossible Foods competes directly with the two publicly traded competitors in plant-based protein.  The profitability of this company will only become apparent following release of a prospectus for an IPO either directly or through a SPAC but there is little to suggest that it is any more financially successful than its major competitors.

 

Casting forward, it is evident that there will have to be rationalization in the plant protein market comprising three main producers and numerous start-ups funded by venture capital. Beyond Meat will probably be taken private by an investment group and then rolled into an existing manufacturer possibly Maple Leaf Foods that has a large but underutilized manufacturing facility.  This scenario is predicated by the fact that during the past quarter Beyond Meat assumed long-term debt presumably to fund ongoing operations.

 

Despite problems of government scrutiny, negative perceptions on welfare and the environment, logistic restraints, labor and transport challenges, the red meat and poultry industries have little to fear from plant-based substitutes

 

 

Poultry Industry News

Low Path H5 Diagnosed in Turkey Flock in Kandiyohi County MN.

 The Minnesota Board of Animal Health has detected H5 low pathogenic avian influenza in a commercial turkey flock in Kandiyohi County. According to State Veterinarian Dr. Beth Thompson, the case was diagnosed on routine surveillance prior to slaughter. The flock was placed under quarantine on November 22nd and appropriate monitoring of adjacent and contact flocks is in progress. The Minnesota Board of Animal Health is working with federal, state and industry partners in its response.

 

An investigation of the source of the infection is presumably in progress. Kandiyohi County was the epicenter of the initial turkey-associated phase of the 2015 highly pathogenic avian influenza epornitic in 2015.


Location of Kandiyohi County

Both H5 and H7 strains of avian influenza virus are capable of undergoing point mutation to become highly pathogenic as confirmed by numerous previous outbreaks including a case in Indiana in early 2016 and in the Carolinas in 2019.

 

The statement from Minnesota officials that turkey farmers exercise a high standard of biosecurity is less than reassuring given the occurrence of this index case. Whether additional cases emerge in coming days will provide an indication of the probability of a more severe problem in weeks to come given the reality that migratory birds serve as reservoirs and disseminators of infection.

 

This case coupled with the results of surveys denoting the recovery of AI virus from wild birds, recently disclosed in an APHIS webinar, are cause for concern.The need for effective structural and operational biosecurity is emphasized as opposed to a “going through the motions” approach since the events of 2015 have faded in memory.

 

H5 and H7 isolations of avian influenza virus irrespective of pathogenicity must be reported to the World Organization for Animal Health (OIE) and will have trade implications.


 

Poultry Meat Projection

Updated USDA-ERS Poultry Meat Projection for November 2021.

 

On November 16th 2021 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2020 (actual), a projection for 2021 and a forecast for 2022.

 

Broiler RTC production in 2021 updated from the October 2021 report reflected a 0.6 percent increase over 2020 to 20.376 million metric tons RTC (44,828 million lbs.). Per capita consumption in 2021 will be 0.2 percent lower compared to 2020 at 43.6 kg. (96.2 lbs.). Exports should represent 16.8 percent of RTC production in 2021 attaining 3.430 million metric tons (7,545 million lbs.) representing both RTC and feet. The projection for 2022 is for 20.564 million metric tons (45,240 million lbs.) with a per capita consumption of 44.0 kg (96.8 lbs.) and exports of 3.363 million metric tons (7,465 million lbs.).

 

Turkey production for 2021 compared to 2020 was reduced by 2.3 percent to 2.550 million metric tons RTC, (5,609 million lbs.). Per capita consumption is projected at 7.0 kg. (15.4 lb.) in 2021, 0.2 kg lower than 2020 despite extensive promotions and introduction of further-processed items. Export volume for 2021 is expected to attain to 0.257 million metric tons (565 million lbs.). Values for production and consumption of RTC turkey in 2021 are considered to be realistic, given the prevailing economy, lower poult placements, weekly production levels and inventories.

 

The USDA provided a long-term forecast for the turkey industry in 2022 comprising annual production of 2.591 million metric tons (5,700 million lbs.) with consumption of 7.1 kg (15.5 lbs.) per capita.

 

The export projections do not allow for a breakdown in trade relations with existing partners including China nor the emergence of catastrophic diseases including HPAI and vvND in either the U.S. or importing nations. Metric values for the broiler and turkey segments of the U.S. poultry meat industry are tabulated below:-

 

Parameter

2020

(actual)

2021

(forecast)

2022

(projection)

Difference %

2021 to 2022

Broilers

       

Production (m. metric tons)

20.265

20.376

20.564

+0.3

Consumption (kg per capita)

43.7

43.6

44.0

-0.2

Exports (m. metric tons)

3.350

3.430

3.363

+1.6

Proportion of production (%)

16.5

16.9

16.5

+1.8

         

Turkeys

       

Production (m. metric tons)

2.610

2.550

2.591

+1.6

Consumption (kg per capita)

7.2

7.0

7.1

+1.4

Exports (m. metric tons)

0.260

0.257

0.257

+0.8

Proportion of production (%)

10.0

10.0

9.9

-1.0

Source: Livestock, Dairy and Poultry Outlook released November 16th 2020

 

The projection takes into account forecast exports to 2nd ranked China with imports of 512,587 metric tons of chicken products including feet during 2020 valued at $732 million. During the first nine months of 2021 China imported 330,885 metric tons of chicken products (feet, leg quarters and edible giblets) valued at $613 million. Average unit price for broiler exports including parts and feet but excluding imports by China, attained $1,101 per metric ton for the first nine months of 2021. Unit value to China was $1,851 per metric ton suggesting a high proportion of feet shipped.

 

Subscribers are referred to the weekly updates of production and inventories of broilers and turkeys posted weekly on CHICK-NEWS and the review of monthly export data under the STATISTICS tab.


 

Crop Progress

Status of 2021 Corn and Soybean Crops: November 22nd.

The USDA Crop Progress Report released on November 22nd documented progress in harvesting 2021 corn and soybean crops compared to 5-year averages. This past week 95 percent of the corn crop was “in the bin,” 3 percent ahead of the 5-year average. For soybeans 95 percent of the crop has been harvested, an advance of 3 percent over the week but one percent behind the 5-year average of 96 percent. Harvest in many Midwest states was previously impeded by wet weather contributing to high corn moisture values. For the second successive week ending November 21st, 5 to 6 days were suitable for field work among the major states producing corn and soybeans, contributing to harvesting approaching completion.

 

The ProFarmer Crop Tour completed six weeks ago, estimated corn yield to range from 175.2 to 178.8 bushels per acre with a mean value of 177.0 bushels per acre compared to the November WASDE value of 177.0 bushels per acre. The ProFarmer evaluation corresponded to a projected range for the 2021corn harvest of 14.965 to 15.265 billion bushels with a mean value of 15.116 billion bushels compared to the November WASDE value of 15.062 billion bushels.

 

The ProFarmer Crop Tour estimated the soybean yield to range from 50.2 to 52.2 bushels per acre with a mean value of 51.2 bushels per acre compared to the November WASDE value of 51.2 bushels per acre. The ProFarmer evaluation corresponded to a projected range for the 2021 soybean harvest of 4.347 to 4.525 billion bushels with a mean value of 4.525 billion bushels compared to the November WASDE value of 4,425 billion bushels.

 

CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2021 harvest in November.

 

Reference is made to November 9th WASDE Report #618, in this edition with a final projection of yields, ending stocks and markets.

 

  Week Ending

Crop

Nov 14th

Nov 21st

5-Year Avg

Corn Mature (%)

Corn Harvested (%)

100

91

100

95

100

92

Soybeans Mature (%)

Soybeans Harvested (%)

100

92

100

95

100

96


 

Broiler Week

Weekly Broiler Production and Prices, November 19th 2021.

 

Chick Placements.

The Broiler Hatchery Report released on November 17th 2021 confirmed that a total of 240.4 million eggs were set during the week ending November 13th 2021, up seven percent from the corresponding week of the previous year and up 3.0 percent (7.0 million eggs) compared to the previous week in 2021.

 

A total of 174.2 million day-old chicks were placed among the 19 major broiler-producing states during the week ending November 13th 2021. Total chick placements for the U.S. amounted to 182.4 million, up four percent from the corresponding week in 2020 and 2.6 percent (4.6 million) chicks more than the previous week. Claimed average hatchability was 79.7 percent for eggs set three weeks earlier, (79.4 percent for the previous week). Each 1.0 percent change in hatchability represents 1.8 million chicks placed per week with the current range of weekly settings.

 

Cumulative chick placements for the period January 9th 2021 through November 13th 2021 amounted to 8.34 billion chicks, up less than one percent from the corresponding period in 2020.

 

During the period October 9th through November 13th 2021 weekly placements were on average 0.8 percent higher compared with the corresponding six weeks in 2020 (with a range of two percent down to four percent up on corresponding weeks). Low chick placements during the past twelve weeks is attributed to setting a proportion of hatching eggs with depressed fertility that were derived from high-yield breed combinations placed by some integrators. Additional breeder flocks have been placed to compensate for reduced fertility and hence hatch but their contribution has yet to be realized based on age. The average 5.3 percent increase in eggs per week set over the past six weeks should be reflected in higher placements as recorded in mid-November and in broilers harvested during late-December onwards.

 

Broiler Production

According to the November 19th USDA Broiler Market News (Vol. 68, No. 46) for the processing week ending November 13th 2021, 165.4 million broilers were processed during the past week (previous week 164.6 million) at an average live weight of 6.38 lbs. (6.41 lbs. last week) and a nominal yield of 76 percent. The number of broilers processed was 0.8 percent less than the corresponding processing week in 2020. Processed (RTC) broiler production for the week was 802.0 million lbs. (364,540 metric tons), (801.8 million lbs. last week), 0.4 percent less than the corresponding processing week in 2020. In 2021 Processed (RTC) production has attained 36.24 billion lbs. (16,474,328 metric tons) to date, 0.4 percent less than YTD 2020.

 

Broiler Price

The USDA National Composite Weighted Wholesale price on November 19th 2021 was up 2.8 cent per lb. compared to the previous week at 105.7 cents per lb., compared to 80.1 cents per lb. during the corresponding week of 2020; 103.0 cents per lb. for October 2021 and 85.0 cents per lb. for the three-year average. The industry is still impacted by contraction in the food service segment following imposition of COVID-19 restrictions, although universities and schools are generally functional and QSRs are using increasing quantities of breast meat for sandwiches, strips and nuggets.


 

Turkey Week

Weekly Turkey Production and Prices November 19th 2021

 

Poult Production and Placement:

The November 18th 2021 edition of the USDA Turkey Hatchery Report, issued monthly, documented 27.5 million eggs in incubators on November 1st 2021 (25.6 million eggs on October 1st 2021*) and up 2.7 percent (0.73 million eggs) from November 1st 2020.

 

A total of 22.0 million poults were hatched during October 2021 (21.0 million in September 2021*), representing a decrease of 5.5 percent (1.28 million poults) from October 2020.

 

A total of 19.7 million poults were placed on farms in the U.S. in October 2021, (18.8 million in September 2021*), 1.9 percent (0.4 million poults) less than in October 2020. This suggests disposal of 2.3 million poults during the month (2.4 million in September 2021). Based on the proportion of 55 percent hens to 45 percent toms processed in September and October it is calculated that 1.0 million hen poults representing 4.5 percent of the October hatch and 1.3 million tom poults representing 5.3 percent of October hatch were not placed during the month.

 

For the twelve-month period November 2020 through October 2021 inclusive, 264.5 million poults were hatched and 245.9 million were placed. This suggests disposal of 18.6 million poults. Assuming an equal proportion of placements between toms and hens reared year to date, for the 12-month period, 7.0 percent of all poults were not placed. This is an unsubstantiated estimate with a fluctuating demand for processed toms and hens in a post-COVID affected market with toms predominating during the first quarter of 2021 and more hens placed in the third quarter. (See relative numbers of hen and tom poults processed under Production Data below).

 

* USDA revision from previous monthly report.

 

To be updated in mid-December 2021 following release of monthly USDA data

 

Turkey Production:

The November 19th 2021 edition of the USDA Turkey Market News Report (Vol. 68: No.46) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending November 13th 2021, 2.460 million young hens were slaughtered during the processing week at a live weight of 15.6 lbs. (last week 2,546 million hens at 17.1 lbs.). During the corresponding week in 2020, 2.560 million hens were processed, 4.0 percent more than the most recent week in 2021. Ready-to-cook (RTC) hen weight for the week attained 30.9 million lbs. (14,501 metric tons), 2.7 percent less than for the corresponding processing week of 2020. Dressing percentage was a nominal 80.5. In 2021 RTC hen production has attained 1,087 million lbs. (494,380 metric tons) to date, 1.3 percent less than for YTD 2020.
  • For the processing week ending November 13th 2021, 2,177 million toms were slaughtered at 44.0 lbs., compared to 1.979 million toms processed during the previous week at 44.9 lbs. For the corresponding week in 2020, 2.256 million toms were processed, 3.7 percent more than in the most recent week in 2021. Ready-to-cook tom weight for the week attained 77.2 million lbs. (35,081 metric tons), 2.4 percent less than the corresponding processing week in 2020. Dressing percentage was a nominal 80.5 percent. In 2021 RTC tom product has attained 3,383 million lbs. (1,537,879 metric tons) to date, 7.3 percent less than YTD 2020.
  • The National average frozen hen price during the past week was 134.7 cents per lb., down 1.1 cents per lb. from the previous week and up approximately 36 cents per lb. from the three-year average. The following prices rounded to nearest cent were documented for domestic and export trading on November 19th 2021:-

 

Cracker Barrel Posts Q1 Financial Results

In a November 23rd release, Cracker Barrel and Old Country Store (CBRL) posted financial results for the first quarter of fiscal 2022 ended October 29th 2020. This chain can be regarded as a bellwether for the casual dining segment of the restaurant sector.

 

For the period, net revenue was $33.4 million on total revenue of $784.9 million.  Comparable figures for the first quarter of fiscal 2020 ending October 30th 2019 were net income of $170.7 million on total revenue of $646.5 million.  EPS declined from $7.18 for the first quarter of fiscal 2020 to $1.41 for the most recent quarter. The large difference was due to a non-recurring gain on a sale and leaseback transaction valued at $217.7 million during Q1 of FY 2020.

 

At the end of the first quarter of FY2021 the company operated 660 Cracker Barrel and Maple Street Biscuit locations in 45 states. 

 

The company recorded a comparable same-restaurant sales increase of 1.4 percent compared to the first quarter of fiscal 2020. Retail sales gained 17.6 percent for the most recent quarter. Off- premises sales increased by 168 percent representing 20 percent of revenue.

 

Commenting on the business, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "I'm pleased with the improvement we saw in our first quarter comparable restaurant sales and the continued strength of our retail sales. The progress we made on staffing and the incredible efforts of our operating teams contributed significantly to our sales results in the first quarter and positioned us well for the important holiday season and our second quarter generally. Although we still face an uncertain business environment, our sales trends give us confidence that we should see further improvement in our comparable store sales in the second quarter.  We believe that as our guests return to a more traditional holiday season and look to Cracker Barrel to be a part of their family gatherings and celebrations with friends, our dedicated and talented employees and leadership teams will meet their expectations, whether they visit our retail shops and dining rooms, or enjoy our food at home.

 

Cracker Barrel posted assets of $2,372 million against long-term debt and lease obligations of $1,208 million and the Company has an intraday market capitalization of $3,360 million. CBRL has traded over a 52-week period in a range of $123.74 to $178.82 with a 50-day moving average of $139.34.  Twelve-month trailing operating margin was 5.3 percent and profit margin 9.0 percent.  Return on assets over the past twelve months was 13.8 percent and the return on equity 47.0 percent. At 13H00 November 23rd CBRL traded at at $132.26 down 7.5 percent.


 

Port Congestion Reviewed in Webcast

According to the November 15th USAPEEC MondayLine, a webcast Cool Cargos: Global Trends, Risks, and Opportunities considered challenges in maintaining international trade in frozen foods.  The program was hosted by Greg Knowler of IHS Markit for the benefit of shippers, operators of ports, financial institutions, and food producers.  Speakers included Jim Sumner, President USAPEEC, and executives involved in international logistics.

 

The important topics reviewed storage capacity at ports, shortages and positioning of containers, shipping rates, availability of long haul drivers, a shortage of chassis to convey containers, and tracking of shipments.

 

An unfortunate take-away from the webinar was that congestion will continue through the first quarter of 2022.


 

Smithfield Foods Pays OSHA Penalty

Following an inspection of Smithfield Foods Plants and specifically the Sioux Falls, SD facility, the company was fined $13,500 under then prevailing regulations relating to COVID. In the absence of an Emergency Temporary Standard (ETS), deliberately delayed by OSHA under the previous Administration, the Company was fined the maximum allowed for contravention of the General Duty Clause. In contrast the California State OSHA fined Smithfield Foods $58,000 for inadequate protection of employees at the Vernon, CA. Farmer John plant where 300 cases were diagnosed.

 

In August 2020 the U.S. Centers for Disease Control and Prevention cited deficiencies in the physical design of facilities and plant layout as contributing to 900 cases of COVID out of 3,600 employees plus additional contact cases that occurred during March and April of 2020.  Of the affected employees, 48 were hospitalized with two fatalities.

 

As part of the agreement with OSHA, Smithfield Packaged Meat Corp. will develop an infectious disease preparedness plan for all 46 facilities in 32 states. It is a matter of record that competitors of Smithfield Foods including Tyson Foods were proactive in using available resources and knowledge to implement protective measures prior to the availability of a vaccine.  In contrast then CEO of Smithfield Foods, Ken Sullivan criticized both a U.S. Senate investigation and the media, claiming mischaracterization of the company and its values. Currently Smithfield Foods, a subsidiary of the WH Group of China, is spinning the slap-on-the-wrist fine and mandated agreement to belatedly introduce protective measures as a vindication of company policy in response to COVID.


 

African Swine Fever Moderating in China

Since the first outbreak of African swine fever (ASF) in Liaoning Province in early August 2018, outbreaks have been diagnosed in thirty-two provinces and special administrative regions.  The Year to date the Ministry of Agriculture and Rural Affairs has recorded eleven outbreaks of African swine fever in eight provinces. The fact that only a claimed two thousand hogs were culled suggests that cases have occurred among backyard and subsistence units that will continue as reservoirs of infection.  Large commercial farms obviously have deployed adequate biosecurity that currently is the only effective prevention measure in the absence of an effective vaccine. 

 

The reliability of official statistics in China is always questionable, but it may be inferred from the sharply lower prices of piglets and processed pork that adequate supplies are available.  This contrasts to the situation in 2018 and 2019 with as many as 25 percent of growing hogs succumbing to ASF.  A fall in pork imports is also an indication of adequacy of supply.  This has allowed China to place embargoes on nations such as Germany that have reported ASF to the World Organization of Animal Health.

 

The implication of a recovery from ASF in the hog industry in China will be a reduction in imports of both pork and chicken meat to the disadvantage of Brazil and the U.S.

 


 

Restaurant Brands International Acquires Firehouse Group

Restaurant Brands International has announced acquisition of the Firehouse Restaurant Group in a $1.0 billion all-cash transaction.  The company release stated, “Firehouse Subs is a strong brand with attractive unit economics in a complementary category to the existing family of quick service Restaurant Brands chains including Tim Horton’s, Burger King and Popeye’s Louisiana Kitchen”.

 

Firehouse Subs was founded in Jacksonville, FL in 1994 and specializes in the QSR sandwich category, and has grown to 1,200 units and attained system-wide sales of $1.1 billion in 2021.


 

NCBA Calls for Suspension of Beef Imports from Brazil

The National Cattleman’s Beef Association has petitioned USDA Secretary Tom Vilsack to place a ban on fresh beef from Brazil.  The NCBA claims that Brazil has failed to meet the same consumer and food safety standards that pertain the U.S. and that are also applied to other nations exporting to the U.S.

 

Ethan Lane, Vice-president for Government Affairs at the NCBA stated, “It’s time to keep Brazilian fresh beef out of this country until USDA can confirm that Brazil meets the same standards that we apply to all our trade partners.”


Sen Jon Tester (R-MT) promoting legislation on beef imports from Brazil

The NCBA points to the delay in Brazil reporting an atypical case of BSE as a justification.  Without resulting to schadenfreude it must be remembered that spontaneous atypical cases of BSE can occur in any cattle population, as has occurred in both the U.S. and Canada.  Failure to report a diagnoses is however unacceptable among trading partners and contrary to regulation of the World Organization of Animal Health.

 

If in any way standards of operation and inspection are proven to be less rigid than in the U.S. a ban is justified. Brazil was subject to a suspension of exports from 2017 through 2020 due to shipping carcasses with abscesses to the U.S., denoting deficiencies in inspection. The beef industry of that nation was the subject of international rejection following disclosures of bribery of inspectors and falsification of export documentation in 2017. 


 

Aviagen North America to Support UGA Poultry Science Building

In a November 16th release, Aviagen North America announced financial support for the proposed new Poultry Science building of the University of Georgia, College of Agricultural and Environmental Sciences

 

Dr. Todd Applegate, Head of the UGA Department of Poultry Science stated, "we highly value elevating UGA's relationship with Aviagen and are extremely thankful for their gift in helping make our new poultry science building a reality". He added “The building will help ensure the long-term sustainability of the industry and prepare students for careers in the poultry industry.

 

Dr. Marc DeBeer, President of Aviagen North America stated, "We are happy to contribute to this new development and are excited about the research and innovation that includes important field such as genetics, embryology, nutrition and agri-business".

 

Additional information can be obtained from www.poultrybuilding.caes.uga.edu. Or by clicking on to the Aviagen logo on the right side of the Welcome page.


 

Nutritional Value of Plant-Based Alternatives to Meat Questioned

A comprehensive review by Dr. Gary C. Smith of Colorado State University considered consumer perceptions of plant-based meat alternatives that apparently have acquired a “health halo”.  Protein is a current issue of interest among consumers with this attribute surpassing fat and caloric content as a measure of nutritional quality. 

 

Following introduction of plant-based burgers, discrepancies between the amino acid and total protein content compared to real meat were evident.  Notwithstanding the science and analytical data, consumers believed that plant-based meats were “healthier” in some non-defined way. Although the crude protein content of ground beef and two leading brands of alternatives are similar, ground beef has a more favorable amino acid profile.  In response to deficiencies in methionine, one producer of faux meat increased the essential amino acid content of their product.  Currently the nutritionally available protein content of ground beef is superior to most plant-based patties.


Dr. Gary C. Smith
Colorado State University

Dr. Smith reviewed surveys that disclosed that half of  consumers believe that plant-based alternatives are ‘healthier’ than real beef.  Most consumers are incapable of deciding on the nutritional value of a product from the Nutrition Facts label that does not specify individual amino acids.  Based on crude protein level and ignoring required daily allowance, plant-based patties appear equivalent in value. Deficiencies in amino acids and vitamins and differences in saturated and unsaturated fatty acids and salt between plant-based and real meat are evidently ignored by consumers.

 

The review concluded that the apparent “health halo” associated with plant-based alternatives to meat relate to incorrect perceptions of health and wellness but are also influenced by taste and convenience and receptivity to claims of sustainability and welfare. To date manufacturers of plant-based alternatives have targeted consumers of ground beef. Chicken products are now appearing and should be considered as competitors especially for heavily breaded nuggets and strips. Knowledge relating to the motivation to select plant-based alternatives should serve as a guide to the meat and poultry industries to devise appropriate promotional programs and to educate consumers.


 

Perdue Farms Donates Product to KY. Healthcare Workers

Perdue Farms delivered 650 boxes of chicken to healthcare workers at Ohio County, KY.  Healthcare.  The donation follows the Perdue “Delivering Hope to our Neighbors” program.  Kyla Dockery, HR Manager at the Perdue Cromwell, Kentucky complex, stated “The COVID pandemic has illustrated the heroic efforts of so many people in our communities including first responders, healthcare, and other essential workers on the frontlines.”


 

President Pardons Thanksgiving Turkeys

In an annual tradition since 1947 the National Turkey Federation (NTF) presents the White House with a Thanksgiving Turkey (and Vice-turkey). For 2021 Phil Seger Chair of the NTF presented the National Thanksgiving Turkey named “Peanut Butter” and his penmate “Jelly.” Both received an official pardon and will be housed for their remaining lifespan at the Purdue University Department of Animal Science.

 

Phil Seger commented “It is an honor to participate in this truly unique tradition, and I thank President Biden for welcoming the National Turkey Federation, my family and Peanut Butter and Jelly to the White House,” He continued “Thanksgiving is a special time for those of us in the turkey business, and it’s an opportunity to celebrate America’s turkey farmers and everyone in our industry.”


 

Koch Foods to Expand Gainesville Plant

Koch Foods intends to expand a processing plant erected in the 1960s and acquired in 2002.  The Gainesville Planning and Appeals Board permitted the project that will be subject to final approval by the City Council of Gainesville on December 7th.

 

The land that will be used to expand the plant has been rezoned to heavy commercial and Koch will erect an additional 90,000 square feet for poultry processing and deboning, 24,000 square feet of office space and 63,000 square feet for cold storage. Ancillary projects will include parking, truck bays and loading docks.  Proposed updates and the expansion will double production volume and will generate additional jobs.


 

China Again Placing Obstacles on Imports

According to the USAPEEC MondayLine customs inspectors are rejecting some shipments of U.S. poultry products resulting in either rejection and destruction of the contents of containers or return at a very high cost.  Items of concern include the quality of paws from the U.S. and other nations. Customs inspectors are also requiring absolute compliance with seals on containers and  documentation.  Any discrepancies result in rejection.

 

It is questioned whether recent actions of the General Administration of Customs are motivated by an imperative to conform strictly to regulations or whether creating impediments to importation is in fact a protectionist strategy motivated by the Government.

 

 


 

OSHA Suspends Vaccination Mandate

Following a decision by the U.S. Court of Appeals for the Fifth Circuit, the Occupational Safety and Health Administration (OSHA) has suspended enforcement of the vaccine mandate "pending future developments".  The Appeals Court ruled that the mandate grossly exceeded the authority of the Agency.

 

The subject of federal mandates is now in the hands of the Sixth Circuit Appeals Court in Cincinnati that is considering over thirty challenges that have been consolidated into a single action.  If the Sixth Circuit appeals Court rules in favor of a mandate, OSHA will limit the suspension and possibly extend the original deadline of January 4th, 2022. Ultimately the issue may be considered by the Supreme Court, given the jurisdictional and constitutional issues involved.

 

In the interim, employers would be well advised to offer vaccination and incentives as was the case with Tyson Foods and Perdue Farms and other processors. Complete vaccination with a range of safe and highly effective approved vaccines will reduce the incidence rate of COVID in employees and their communities. Vaccination will reduce absentism and in the event of infection will obviate hospitalization. At the end of the day, COVID is a public health situation and should be distinct from political considerations and mischievous misinformation.


 

Foster Farms Donates Turkeys to CA. Food Bank

Following a longstanding annual tradition, Foster Farms will donate two and half tons of Thanksgiving turkeys to the Merced County Food Bank.  The donation will feed 6,000 residents in a community of 80,000.  Foster Farms has already donated sufficient turkeys to food banks from San Diego, CA. to Seattle, WA. to feed more than 80,000 in need.

 

It is estimated that in California one out of every five residents comprising eight million suffer from food insecurity. This is a sorry situation for the Nation’s wealthiest state.


 

ASF Persists in Romania

USDA-GAIN report RO2021-0015 released on November 17th documents the impact of African swine fever (ASF) on domestic hog production.  In many respects, the situation in Romania reflects other Eastern European nations where ASF can be regarded as endemic given the proportion of feral hogs.

 

The National Veterinary and Food Safety Authority has recorded 4,255 outbreaks of ASF since 2019.  In addition, 5,895 wild boars have yielded ASF virus.  Since the July 2017 commencement of the outbreak, over one million hogs have been culled in an attempt to eradicate the infection.  At the present time, the swine population comprises approximately 220,000 breeding sows and 4.5 million growing hogs.  During 2018-2019 the annual reduction in breeding sows attained 10 percent but a recovery was recorded in 2021 with a population approximately 3.5 percent below the 2017 pre-ASF level.  Of the individual outbreaks, 90 percent have occurred in backyard operations with minimal economic impact other than for owners and villages.  The outbreaks occurring in commercial hog farms have reduced the supply of pork and resulted in severe economic loss to operators.

 

In the absence of an effective vaccine, Romania and adjoining countries can only suppress outbreaks by applying quarantine and depletion.  Cases are appreciably higher in 2021 than in 2020 attesting to the virulence of the virus and the lack of efficacy of current control measures.


 

Shane Commentary

Bilateral Trade in the Background in Virtual Presidential Meeting

The Monday night virtual discussion between President Biden and his counterpart President Xi was wide-ranging extending over three hours.  Topics reviewed included Taiwan, human rights, and cryptocurrency.  Although the Phase One Trade Agreement of January 2020 was raised, no definitive decisions emerged from the bilateral meeting attended by top advisors and cabinet members on both sides.

 

It is comforting to observe that at least the leaders of the two nations are talking and that China watchers are parsing and evaluating post-discussion statements by officials in positions of responsibility in China.  Agricultural groups including the American Soybean Association are urging for pressure to be placed on China to comply with the requirements of the Phase One Trade Agreement and negotiating a possible Phase Two Agreement when the current pact expires at the end of 2021.

 

Statistics estimate that China has only complied with 60 percent of the predicted value of negotiated imports. This is understandable given the slow start to trade in 2020 given COVID lockdowns. In effect, China has exceeded purchases of corn and is close to target on soybeans. 

 

In a recent interview, U.S. Trade Representative Ambassador Katherine Tai counseled for moderation in dealing with China.  As a Mandarin speaker and temporary student in China, she understands some of the concerns expressed by President Xi including the need for recognition as an equal partner in the World economy. China wishes the U.S to be less aggressive on sensitive on "internal issues" such as Hong Kong and the treatment of Uyghurs.  Unfortunately, these concerns will in the short term, take precedence over agricultural trade.

 

At the end of the day China will purchase what it needs and will continue to pursue policies that are beneficial to their economy.  Requiring them to refrain from industrial espionage, countenancing breaches of cyber security and activities that almost rise to the status of cold-war  tactics will only be resolved, if ever, over the long term.

 

Visit our Companion Website
http://egg-news.com/
Dr. Simon M. Shane
Simon M. Shane
Contact     C. V.
 
Copyright © 2021 Simon M. Shane Managed by Goosedown