The Federal Shutdown


As I write this editorial we are in the 23rd day of a partial Federal shutdown with no end in sight. There is an absolute impasse between the House and the Administration with the President maintaining that the situation could "go on for weeks, months". It would be inappropriate for CHICK-NEWS to comment on the political considerations involved or the justifications advanced by either side but it is relevant to quantify the damage to our economy and to our industry by failure to achieve a compromise within days.

A statement that the shutdown is costing $1 billion per week cannot be immediately verified but if so, our elected legislators and the Administration have apparently to date wasted the equivalent of sixty percent of the requested $5 billion for 234 miles of border wall (or barrier) depending on semantics.

To place the situation in perspective the following scorecard is provided:-

  • 380,000 Federal employees furloughed without pay

  • 420,000 Federal employees deemed essential, working without pay.

  • More than half of the White House Federal workers furloughed

  • Uncounted employees of Federal contractors have been furloughed

As a traveller should I be concerned that uniformed TSA officers at airports and 10,000 air traffic controllers missed their paychecks on Friday 11th ? Should Congress? Should the Administration?

Virtually all USDA economic and statistical reports have ceased. This has created problems for farmers and traders who lack crop updates from the U.S. and the Southern Hemisphere. Farm loan applications are in limbo at a time when farmers have to make planting decisions. Critical research on livestock disease is on hold and funding for new projects is delayed. Inspection activities by the FDA have been impacted with only high-risk manufacturing plants receiving attention.

Neither the Administration nor Congress had any appreciation of the Law of Unintended Consequences resulting from a prolonged shut-down. These range from inability to file for initial public offerings to the SEC to the plight of parents requesting permission from the FDA for their children to receive experimental drug treatment.

Congress and the President should realize that they were elected to serve the citizens of the U.S. according to their oaths of office. That should be their preoccupation, not their chances for re-election in 22 months. It is hoped that feedback from the American Farm Bureau Conference will persuade the parties involved that the current impasse is detrimental to our economy and is causing harm in many sectors of our economy. Our collective hope is for restoration of reason and compromise on both sides of the debate.


Poultry Industry News



The following quotations for the months as indicated were posted by the CME at close of trading on Friday Jan 11th together with values for the reference months in parentheses confirming a declining market for corn, soybeans and soybean meal in comparison to the previous week.







Corn (cents per bushel)

March’19  379  (383)        

May ‘19     387     (390)

Soybeans (cents per bushel)

Jan. ’19      898  (909)   

March ’19  910    (922)      

Soybean meal ($ per ton)

Jan. ‘19    311    (316)

March ’19  314    (320)


Changes in the price of corn, soybeans and soybean meal were:-



Corn:                     March’19 quotation down 4 cents per Bu.      (-1.1 percent )

Soybeans:              Jan. ‘19 quotation down 20cents per Bu        (-2.3 percent)

Soybean Meal:        Jan. ‘19 quotation down $5 per ton               (-1.6 percent)                                 



  • For each 10 cent per bushel change in corn:-


The cost of egg production would change by 0.45 cent per dozen


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


  • For each $10 per ton change in the price of soybean meal:-


The cost of egg production would change by 0.40 cent per dozen


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


There is renewed optimism concerning the outcome of the dinner meeting at the G-20 Summit between the delegations from the U.S. and China led by their respective Presidents. The U.S. has agreed to a three-month delay ending March 31st before raising tariffs from ten percent to twenty-five percent on over $200 billion in annual imports from China. In return China has agreed to purchase an unspecified quantity of agricultural commodities in addition to energy and heavy equipment from the U.S. to offset the negative balance of payments. An initial order of 1.5 million tons was placed, three weeks ago, the first since June.  The USDA announced on January 7th that orders have been placed for an additional 3 million tons to be shipped before September 2019.


According to the November 8th 2018 WASDE Report #583, which did not affect commodity prices, 81.8 million acres of corn will be harvested in 2018 to produce 14.62 Billion bushels. The soybean crop is projected to attain 4.60 Billion bushels from 88.3 million acres harvested. The levels of production for the two commodities are based on revised projections of yield and acreage harvested. Ending stocks were revised based on anticipated domestic use and exports.


 See the WASDE posting summarizing the November 8th USDA-WASDE Report #583 under the STATISTICS tab documenting price projections and quantities of commodities to be produced, used and exported from the 2018 harvest. The January 2019 WASDE  Report #584 will be delayed by the Government shutdown


Unless shipments of corn and soybeans to China resume in volume as projected the financial future for row-crop farmers appears bleak despite the release of two tranches amounting to  $12 billion as “short-term” compensation. Farmers will not be placated by the promise of a year-round E-15 blend since the logistic problems of delivery to consumers and legal challenges will delay any positive price benefit. Oversupply of ethanol with the current 10 percent addition (=dilution) mandate is evident from the December 28th spot price of $1.30 per gallon again this past week compared with a 2018 peak in late March of $1.60. Exports have been constrained by the retaliatory tariffs imposed by China on U.S. ethanol. Some refiners are reducing production and mothballing corn-fermentation plants.


The loss inflicted on farmers by the trade war with China is a gain for livestock producers who will benefit from lower feed costs. It must be recognized that the hog and poultry industries have experienced higher costs for a decade as a result of the RFS, a gift that keeps on giving. The mandate is a boon to Midwest politicians, corn growers and ethanol refiners at the expense of anyone in the U.S. who eats or uses any form of transport.


Weekly Broiler Production and Prices


Due to the Federal shutdown weekly Broiler Hatchery Report was not issued and Broiler Market News Reports was incomplete. CHICK-NEWS has assembled FSIS and USDA market data to produce a Weekly Broiler Production and Price Report. The normal format will be posted when USDA publications resume.

Chick Placements

Values in 10-point font reflect past weekly data reproduced for comparison.

The last Broiler Hatchery Report released on December 19 th before the Federal shutdown confirmed that a total of 222.5 million eggs were set during the week ending December 15th one percent less than in the corresponding week in 2017. A total of 175.5 million day-old chicks were placed among the 19 major broiler-producing states during the week ending December 15th. This was almost the same as the corresponding week in 2017. Total chick placements for the U.S. amounted to 183.3 million. Claimed average hatchability was 82.1 percent for eggs set three weeks earlier. Broiler chick placements for 2018 through December 15th amounted to 9.09 billion, up 1.0 percent from YTD 2017.


Weekly Turkey Production and Prices


Due to the Federal shutdown the monthly Turkey Hatchery Report was not issued and the Turkey Market News Report was incomplete. CHICK-NEWS has assembled FSIS and USDA market data to produce a Weekly Turkey Production and Price Report. The normal format will be posted when USDA publications resume

Poult Production and Placement:

The December 14th edition of the USDA Turkey Hatchery Report, issued monthly, documented 28.4 million eggs in incubators on December 1st 2018 (30.4 million eggs on November 1st 2018) up 2.3 percent (0.6 million eggs) from November 1st 2017.

A total of 25.1 million poults were hatched during November 2018 (23.3 million in October 2018) and up 7.8 percent from November 2017.

A total of 21.1 million poults were placed on farms in the U.S. in November 2018, (21.6 million in October 2018), 1.5 percent more than in November 2017. This suggests disposal of 4.0 million poults during the month. Assuming all tom poults were placed, 31.2 percent of hen poults or 15.5 percent of all November poults hatched were not placed.

For the twelve-month period December 2017 through November 2018 inclusive, 285.3 million poults were hatched and 266.3 million were placed. This suggests disposal of 18.9 million poults. Assuming all tom poults were placed 13.2 percent of hen poults or 6.6 percent of all November poults hatched were not placed.

USDA will release the next monthly report in mid-January 2019 subject to resumption of operations after the Federal shutdown.


Epidemiology of Campylobacteriosis in Denmark


A state institute in Denmark has recently studied the sources of Campylobacter infection in the population. Results were based on an analysis of questionnaires from 887 cases and 2,900 controls in a study conducted in 2016. Risk factors included swimming in fresh water, especially paddling ponds for children, contact with a pet dog with diarrhea and consumption of ground beef or chicken. In addition children were shown to have become infected from strawberries.

As with previous studies, improperly cooked chicken was responsible for a third of the cases of campylobacteriosis in Denmark. The study showed that ground beef was an emerging vehicle of infection and was attributed to modified atmosphere packaging of this product favoring the survival of Campylobacter which is microaerophillic. The study also identified consumption of unpasteurized milk and potentially contaminated well water with infection in rural areas.


USAPEEC Participates in BEXCO Yoga Event


USAPEEC participated in the BEXCO Yoga Event in Busan, South Korea during late December 2018. The purpose of this was to acquaint yoga instructors, many of whom are trendsetters with the nutritional value and quality of U.S. turkey.  More than 500 yoga instructors visited the USAPEEC Korea booth to sample salads and other recipes.




Possible Treatment for STEC Infections


Shiga-toxin producing E. coli (STEC) is a serious problem previously associated with improperly cooked ground beef but now extending to salads, fruits and other foods.


The very young, the elderly and the immunosuppressed are at great risk following STEC infections.


A recent study* has demonstrated that an extract from Streptomyces goldiniensis termed Aurodox is able to block the effect of STEC.  The compound functions by down-regulating the expression of genes responsible for the production of toxin and specifically repressing the regulator gene ler.  The authors suggest that the compound could be incorporated into the treatment of cases of STEC infection.


*McHugh, R. E. et al Characterization of the Mode of Action of Aurodox, a Type III Secretion System inhibitor from Streptomyces goldiniensis.  Infection and Immunology.  DOI: 10.1128/IAI.00595-18


Drought to Impact Brazil Soybean Harvest


Although the harvest of soybeans in the major cultivation areas is underway, there is evidence that yields will be impacted by drought at the end of the growing period.  Major states including Parana, Mato Grosso do Sul, Goias and Minas Gerais have experienced prolonged dry weather.  It is necessary for farmers in the soybean-growing areas to harvest their fields shortly since Brazil has a second (safrinha) crop which is important for the domestic poultry and livestock industries.


Crop yields and volume in Brazil are more significant in 2019 given the demand from China precipitated by the imposition of tariffs on U.S.-origin product.



Nestle to Introduce Vegetarian Burger


Nestle will introduce a plant-based burger in 2019 to be sold under the Garden Gourmet® Brand.  Nestle has actively developed and is marketing a range of vegetable-based protein foods including vegetarian schnitzel, sausages and chicken nuggets.


The nestle Incredible Burger™ will go head-to-head with current market leader Impossible Burger with the prospect of litigation over the similarity in trade names.


Nestle has immense R&D, production and marketing strength and is committed to producing meat substitutes based on soy, wheat and other plant-derived ingredients.


Iowa “Ag-Gag” Law Unconstitutional


An Iowa law enacted in 2012 making it a crime to use fraud to enter an agricultural production facility has been ruled unconstitutional.  Judge James Gritzner of the Southern District of Iowa ruled that the law infringed on the First Amendment rights of activists and journalists.

The law specifically criminalized gaining access to agricultural facilities through false statements on a job application. The decision by the Federal judge follows similar rulings striking down broadly written “Ag-Gag” laws.

Since it is evident that the courts will not protect contractors and integrators from intrusion by activists it is therefore appropriate for employers to screen applicants and ensure that they do not have ties to animal activist organizations or are journalists.

Managers should ensure that any deviations from acceptable management practices specifically related to culling and euthanasia should conform to best industry standards. Harvesting crews should be supervised and contractors and employees should be aware of welfare requirements.


Sanderson Farms Participates in Raising Hospital Funds


Century Club, the host organization for the Sanderson Farms Championship raised $1.25 million for Friends of the Children’s Hospital. The donation will contribute to the erection of a pediatric tower adjacent to Batson Children’s Hospital in Mississippi.


BRF Disposing of Assets


In order to reduce debt and as part of a restructuring program, BRF SA of Brazil is selling Argentine facilities including the Avex poultry processing to Granja Tres Arroyos SA and Fribel SA for $50 million.

The chicken plant in Rio Quarto has capacity of 160,000 birds per day. A food processing plant is also included in the transaction.

In December 2018, BRF SA sold Quickfood SA to Marfrig Global Foods SA. This business processes cattle and produces a range of meat products.

BRF SA intends selling the Campo Austral beef and pork business in Argentina. BRF is currently reviewing competitive bids from prospective purchasers for assets in Europe and Asia.


Combined USPEA and USAPEEC Headquarters


USAPEEC has received funding of $2.4 million from the Central American Poultry Export Group to commence erection of a headquarters building which will be shared with the US Poultry and Egg Association. USAPEEC will share facilities in the expanded USPOULTRY office in Tucker, GA and will move from office space in Stone Mountain, GA.


USDA Announces Extension for Trade-Aid Applications


USDA Secretary Dr. Sonny Perdue announced an extension past the January 15th deadline for farmers to apply for payments to offset losses as a result of the trade dispute with China. Approximately $10 billion in direct payments have been allocated to growers of row crops and other commodities.

The American Farm Bureau commented favorably on the decision stating “People didn’t have time to get all of this done, and then the government shutdown happened.” Due to the fact that the USDA Farm Service Agency has been closed since December 29th, farmers have not been able to submit applications for processing.

Senator Chuck Grassley (R-IA) who is also a farmer announced that he would seek Federal aid. He stated “Farmers who haven’t been able to apply for trade assistance would have missed the deadline through no fault of their own. It’s worth recognizing that farmers applying for assistance in the first place are hurting because of a trade war they didn’t start.”


Dunnhumby Ranking of U.S. Grocery Chains


Dunnhumby has published the 2019 Retailer Preference Index. The study involved 7,000 U.S. households and evaluated 56 grocery chains.

The annual survey considers price, quality, digital access, operations, convenience, discounts and speed. The overall winner was Trader Joe's for the second consecutive year. Winners in individual categories were Aldi on price, Wegman's on quality, Amazon for digital, Market Basket for operations, Walmart for convenience, Fry's for discounts and Amazon on speed.

Trader Joe's operates only brick-and-mortar with a concentration on private brands. It is interesting that this chain has no digital presence. Their top ranking is a function of service and convenience. Inevitably the chain will lose customers trending to digital.

Price and quality are the two major factors determining purchase decisions and these factors influence sales growth disproportionately compared to other factors.

Dunnhumby determined that retailers that have targeted specific demographics show higher growth rates and customer satisfaction. This trend is to the disadvantage of traditional grocery chains that attempt to be all things to all customers.

Although discounts and rewards attract customers and generate sales volume, the strategy impacts margin and hence profitability.

Private brand growth is integral to perception of value. Dunnhumby determined that six of the top ten private brand performers rank in the first quartile of the retailer preference index.

The top ranked chains are:

  • Trader Joes

  • Costco Wholesale

  • Amazon

  • H-E-B

  • Wegman's Food Markets

  • Market Basket

  • Sam's Club

  • Sprouts Farmer's Market

  • Winco Foods

  • Walmart

  • Aldi


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