Poultry Industry News

FSIS to Exclude Vaccine Strains of Salmonella from Performance Standards

03/12/2024

The Food Safety and Inspection Service (FSIS) of the USDA has announced that vaccine strains of Salmonella administered to flocks would be excluded from calculations applied to establish the status of plants under the Raw Poultry Performance Standards.

 

It is recognized that vaccine strains are innocuous given multiple gene deletion and with their biological activity confined to stimulating an antibody response. The decision by the FSIS was based on an analysis of data from eleven pilot projects evaluating pre-harvest strategies.

 

Dr. Ashley Peterson, NCC Senior Vice President of Scientific and Regulatory Affairs, stated, “Companies will no longer be penalized for using a Salmonella vaccine should the strain be detected in the processing facility by FSIS.”

Before the change in FSIS policy that will be effective on April 1st, any vaccine strain Salmonella isolated counted against the participating establishment and effectively served as a deterrent to vaccination as a viable intervention measure.  The change in policy will be beneficial to producers and ultimately, consumers given the efficacy of vaccination.


 

NTF Announces 2024 Officers

03/04/2024

Officers for the 2024 term were elected by the Board of Directors of the National Turkey Federation at the annual convention held in Austin, TX.  John Zimmerman was elected Chairman, Jay Jandrain as Vice-chairman, Thierry Murad as Secretary-Treasurer.  Steven Lykken will serve as Immediate Past |Chairman.

In his inaugural comments Zimmerman noted challenges in the coming year including HPAI, food safety policies and expanding international trade.

 


 

Columbia to Resume Importing U.S. Poultry Products

03/04/2024

Following intensive negotiations motivated by USAPEEC, authorities in Columbia have lifted the ban on importation of poultry and egg products from the U.S. Trade ceased in August 2023 as a result of outbreaks of HPAI in various states.

 

Critical to the restoration of trade was the facilitation by USAPEEC for a visit by representatives of Columbia to verify surveillance and control measures.

In 2023, Columbia imported 44,164 metric tons of broiler products from the U.S. before the embargo, valued at $53.8 million.  Prior to termination of shipments in September  2023 Columbia imported 36 percent less product compared to the corresponding months in 2022 with value down 46 percent.


 

Hormel Foods Reports on Q1 FY 2024

03/03/2024

In a February 29th release, Hormel Foods Corporation (HRL) reported the results for the first quarter of FY 2024 ending January 28, 2024.

 

Hormel Foods no longer identifies Jennie-O Turkey Store as an operating segment.  Turkey products are now incorporated into the financial results for the Retail, Food Service and International segments.

For the quarter, Hormel Foods Corporation earned $218.86 million on net sales of $2,997 million with a diluted EPS of $0.40.  These figures compared to the corresponding first quarter of        FY 2023 ending January 29th.  Net earnings amounted to $217.72 million on net sales of $2,971 million with a diluted EPS of $0.40.

 

For fiscal 2024 Hormel projects diluted EPS in the range of $1.43 to $1.57.

The only reference to Jennie-O for the quarter was a note that “retail volume and sales of    Jennie-O turkey items increased including above-category performance in the fresh ground turkey category.  Jennie-O branded items in food service delivered double-digit volume and net sales growth.”


 

USDA-AMS Purchases

03/03/2024

On February 23rd, the USDA Agricultural Marketing Service announced purchase of of chicken products for child nutrition and related food assistance programs to be delivered over the second quarter of 2024.

 

Purchases included:

  • 20,800 cases of boneless breasts at an average of $72 per case
  • 133 tons of frozen cut-up chicken at $1.91 per lb.
  • 21,850 cases of frozen drumsticks at $29.82 per case
  • 1,861 tons of whole frozen chicken at $0.99 per lb.

The total value of the purchase was $6,295,329

On February 28th the USDA Agricultural Marketing Service announced purchase of 6,984 tons of chilled large chicken in bulk, also for child nutrition and related food assistance programs.  Product was purchased at an average of $1.58 per pound with deliveries during April 2024.

The two purchases amounted to $26,656,018 million.


 

Missouri Beef Packing Plant to Close Over Defective Discharge Treatment

03/01/2024

Missouri Prime Beef will close the Pleasant Hope facility in April.  This will impact 335 workers.  At issue was the treatment of effluent to be discharged into the Pomme de Terre River.  The Department of Natural Resources for the state of Missouri denied the company a water discharge petition.  The application elicited over 1,000 negative comments from citizens of the state.  Missouri Prime had a capacity of 750 head of cattle per day and was acquired in 2023 by SDX Beef Company based in Texas. According to press reports the new owners are now reviewing alternative treatment solutions to allow the plant to reopen and restore production and jobs.

 


 

Courts Rule Against HSUS over Line Speed Lawsuit

03/01/2024

The U.S. District Court for the Northern District of California has ruled against the Humane Society of the U.S. and co-petitioners concerning line speeds in poultry processing plants.  At issue is the USDA New Poultry Inspection System allowing up to 175 birds per minute.

 

The Court ruled that the animal rights groups lacked standing on the issue dismissing the case without prejudice.  This will allow the petitioners to return with an amended complaint.

 

The lawsuit filed in 2020 has little to do with welfare of either birds or workers.  Progressively higher line speeds are now possible due to advances in equipment design. Lawsuits verging on the frivolous are filed purely on the basis of opposition to all forms of intensive livestock production. Innovation that increase efficiency and hence the prospect of enhanced profitability inevitably becomes a targets for legal challenge.

 


 

R-CALF Requesting Exemption from EPA Environmental Reporting Regulations

03/01/2024

In 2021, the White House issued a Presidential Executive Order directing the EPA among other federal agencies to intensify action to mitigate climate change.  Accordingly, all concentrated animal feeding operations (CAFOs) were required to determine and report on emissions, a demand considered both impractical and burdensome.

 

R-CALF (Ranchers-Cattlemen Action Legal Fund-United Stockgrowers’ of America) has requested the EPA to define and classify feedlots according to capacity ranging from family farms to CAFOs with up to 50,000 head. R-CALF has requested exemption for family farms and operations using grazing, irrespective of the presence of corrals or other structures required for handling livestock.

 

R-CALF called on EPA to “refrain from imposing any additional regulatory burdens on America’s family farmers and ranchers.”  The organization makes a valid case that if small family farms are driven out of production by onerous regulations, their capacity would inevitably be replaced by even larger feedlots.

 

Environmental reporting requirements for CAFOs are an important consideration for poultry production complexes with the potential to impose expense and require time to provide data that will ultimately be applied to the disadvantage of the industry


 

Ukraine Chicken Industry Resilient During War

02/27/2024

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

 

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

 

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

 

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

 

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

 

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

 


 

Ruling on Massachusetts Question Three

02/27/2024

Judge Willian Young of the U.S. District Court for the District of Massachusetts determined that exemptions to the Prevent Cruelty to Farm Animals Act (Question 3) were unconstitutional.

 

The case arose from a lawsuit filed by Triumph Foods and other packers challenging the constitutionality of the Massachusetts law enacted by ballot.

 

Judge Young ruled that the exemption to the state law was in violation of the dormant Commerce Clause.  His ruling is at variance with the May SCOTUS decision upholding California Proposition 12 that ignored the concept of interference in interstate commerce.  Currently, the three existing packers in Massachusetts enjoy an advantage with respect to housing of sows over out-of-state pork processers.


 

Child Labor Persists in Contract Cleaning Sector

02/26/2024

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

 

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

 

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

 

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

 

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


 

USDA Informational Webinar on Contracting

02/26/2024

The following notice was posted by the USDA –AMS regarding a webinar to inform Contractors of the obligations of Integrators with regard to transparency.

 

“The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) will host a webinar Mar. 7, 2024, at noon ET, for poultry growers to share information regarding the Transparency in Poultry Grower Contracting and Tournaments Final Rule.

 

Registration is required: https://www.zoomgov.com/meeting/register/vJItde-qqz4iHka5SbLDXxJupqPctYz01qg

 

Attendees may submit questions in advance to AMS-AskPSD@usda.gov. Questions will also be accepted during the webinar.

 

USDA published the final rule in the Federal Register Nov. 28, 2023, and it became effective Feb. 12, 2024. The rule requires Live Poultry Dealers – typically large processing companies – to provide poultry growers with whom they contract to raise birds key information about terms of their agreements.

 

The rule requires additional disclosures by live poultry dealers engaged in the production of broilers who use poultry grower ranking systems to determine settlement payments for broiler growers.

 

The rule also requires live poultry dealers to disclose projections of average annual gross payments to broiler growers under contract with the complex with the same housing specifications for the term of the broiler growing arrangement.

 

Additional information on the rule can be found on the AMS website”.


 

STOP PRESS

02/26/2024

FTC Blocks Kroger-Albertsons Merger

 

In a belated but expected action on Monday 26th February, the Federal Trade Commission (FTC) initiated action to block the proposed merger (acquisition?) between The Kroger Company and Albertsons Corp. The Agency issued an Administrative Complaint to be heard by an Administrative Law Judge in addition to filing a lawsuit in the U.S. District Court in Oregon to block the transaction. The FTC was joined in the action by Attorneys General representing eight states.


 

Pilgrim’s Pride Corp. Reports on Q4 and FY 2023

02/26/2024

In a press release dated February 26th Pilgrim’s Pride Corp. (PPC) announced results for the 4th Quarter and FY 2023 ending December 31st 2023. The quarterly figures showed positive earnings for all three segments with higher revenue and operating profit across all three geographic areas. Earnings were appreciably above Q4 2022 and exceeded consensus estimates on the top and bottom lines.

 

The following table summarizes the results for Q4 2023 derived from the SEC 10-Q form and the Company release. Values are compared with the corresponding Q3 FY 2022 (Values expressed as US$ x 103 except EPS)

 

4th Quarters 2023 and 2022, Ending

December 31st 2023

December 25th

          2022

Difference (%)

Sales:

$4,528,302

$4,127,365

+9.7

Gross profit:

$321,047

$95,782

       +342.4

Operating income:             

$184,299

$(77,524)

+337.7

Pre-tax Income

Net Income*

            $156,628

            $134,211

$(129,786)

$(154,976)

+220.7

+186.6

Diluted earnings per share:

$0.57

$(0.66)

+186.4

Gross Margin (%)

7.1

2.3

+208.7

Operating Margin (%)

4.1

-3.8

+315.8

Profit Margin (%)

3.0

-1.9

+257.9

Long-term Debt and other liabilities:

$3,584,369

      $3,468,140

           +3.4 

12 Months Trailing:

 

 

 

           Return on Assets    (%)

2.3

 

 

           Return on Equity    (%)

1.1

 

 

           Operating Margin   (%)

4.7

 

 

           Profit Margin          (%)

0.2

 

 

Total Assets (approximately 21% intangibles)

$9,810,361

      $9,255,769

           +6.0

Intraday Market Capitalization July 28th

$6,840,000

 

          

  • Q4 2023, $12.3 million interest income (Q4 2022, $1.5 million)
  • Q4 2023  $3.9 million miscellaneous income (Q4 2022, $1.5 million)
  • Q4 2023  $22.9 million gain in foreign currency transactions (Q4 2022 $16.5 million loss)

 

For FY 2023 Pilgrim’s Pride earned $351.57 million on net revenue of $17.36 million with a diluted EPS of $1.36. For FY 2022 the Company earned $745.54 million on net revenue of $17.47 million with a diluted EPS of $3.11. 

 

Operating income and sales posted by the three business segments during Q4 2023 were:-

      U.S. 69.6 percent of company operating income on 58.8 percent of sales

      E.U and U.K. 31.2 percent of company operating income on 27.2 percent of sales

      Mexico (0.8) percent of company operating income on 11.6 percent of sales

 

52-Week Range in Share Price of PPC:  $19.96 to $31.15.  50-day Moving average,  $27.67

Market Close: Friday 23rd February, pre-release $28.67.

             Open Monday 26th February, post-release $30.60 up 6.7 percent.

 

Current Forward P/E 13  

Equity held by insiders and holding Company: 82.7 percent, Institutions, 17.1 percent

 

In commenting on Q4 results Fabio Sandri, CEO stated “While our business faced a unique set of challenging conditions in 2023, we persevered as our team members maintained a leadership mindset and elevated their focus and execution of our strategy.

 

In the 4th quarter, the U.S. portfolio continued to profitably grow as Case Ready and Small Bird realized benefits from additional promotional activity with Key Customers, more distribution, and increased retail pricing spreads from competing proteins. Prepared Foods also gained further momentum as branded offerings expanded throughout retail and distribution improved in foodservice. As for Big Bird, operating costs continued to improve from increased production efficiencies and better market conditions”.

 

“Given the actual market conditions, the affordability and availability of chicken resonated with consumers. As such, we worked closely with our Key Customers in both retail and food service to drive increased traffic through promotions and broaden their lineup of chicken offerings across fresh and prepared items,”

 

In relation to Mexico Sandri stated, “Supply and demand fundamentals were challenging in October but gained strength in the 4thquarte. We further diversified our portfolio as our brands continue to gain strong traction with consumers and retailers alike. Our investments to increase capacity and reduce production risk through operational excellence are proceeding as planned. Key Customer relationships continue to strengthen as volumes ended up nearly double digits compared to full year 2022,”

 

For the operations in the U.K. and the E.U. Sandri stated,“ We demonstrated progress again in profitability improvement in the 4th quarter through Key Customer partnerships, branded innovation, and operational excellence. The efforts were accelerated by recent actions to further streamline our production networks and support activities.

 

Sandri concluded, “While we had challenging market conditions during the year, our commitment to sustainability remained firm. Our team identified ways to embed innovative practices in our business to simultaneously drive sustainability and enhance profitable growth”.


 

Continued Opposition to Carbon Dioxide Pipelines

02/26/2024

The Stanton County, NE.  Commission recently denied a conditional use permit to Summit Carbon Solutions to build a pipeline that would ultimately link fifty ethanol plants with a disposal site in North Dakota.

 

The 3-0 vote was based on the need for more information on “health risks” and foreign investment in the project.

 

Apparently 90 percent of landowners in Stanton County have signed easement agreements based on an understanding of the issues and actually support the project.

 

Based on opposition in states other than Nebraska, Summit has postponed implementation of the project until 2026.  The $5.5 billion, 2,000-mile pipeline would transit areas of Iowa, Minnesota, Nebraska and both Dakotas.

 

It is ironic that farmers in these corn-producing states who benefit directly from ethanol and support the questionable claims of environmental benefits, are unwilling to allow the pipeline project that would reduce the considerable quantity of carbon dioxide vented to the atmosphere by ethanol plants.


 

Protection for Producers Under the Packers and Stockyards Act

02/26/2024

Senators Jon Tester (D-MT) and Chuck Grassley (R-IA) are urging the relevant House and Senate committees to oppose policy riders and to resist lobbying pressure in the FY 2024 Agriculture Appropriations Bill that might restrain the USDA from protecting suppliers.

The Senators point to the 85 percent control of the domestic beef packing segment by four companies and the domination of hog packing with four companies controlling approximately  75 percent of capacity.  The top four broiler integrators represent 55 percent of production but contracts and the unique relationship between the parties mitigates against exploitation.


 

Rising Prospect of Government Shutdown

02/26/2024

According to press reports, Republican members of the House are becoming reconciled to the prospect of a government shutdown in March.

 

House Speaker Mike Johnson (R-LA) recently stated, “We think we going to meet the deadlines.”  He is faced with the invidious choice of accepting support from Democratic members of the House or a possible revolt from his right flank that doomed his predecessor.

 

If an agreement is not reached before April 30th, across-the-board spending cuts will be imposed.  Democrats have indicated that they will not support a further extension, given recent failure to achieve consensus within the majority party.

 

There are a number of issues impeding passage of appropriations bills most of which involve social considerations important to conservatives especially in an election year but representing a distraction from the governance of the Nation.


 

USAPEEC Establishes Mandarin Website

02/25/2024

USAPEEC has officially launched www.usapeec.cn to promote the image of the U.S. broiler industry in the Mandarin language.  The website will include items on the U.S. poultry industry, HACCP management, a buyer’s guide for chicken, turkey and eggs and will include relevant information from the existing website.

 

In a related matter USAPEEC will replace the weekly MondayLine with a web-based Export Report this will be continually updated with news and information replacing the weekly Friday version.  The export report will also contain MemberAlerts relating to embargoes and issues impacting shipments.


 

UFCWU Supports Kroger-Albertsons Merger

02/25/2024

Breaking with the national United Food and Commercial Workers Union, Local 555 representing workers in Oregon, Washington, Idaho and Wyoming has endorsed the proposed merger between Kroger and Albertsons. 

 

To date the National Union has expressed extreme opposition to the transaction.  The action by Local 555 is based on concern over job security.  The president of this Union and a Safeway worker, believes that divestment of Albertsons by Cerberus is inevitable, employees would rather the group be acquired by Kroger than by another entity. Ann Poff stated, “It’s foolish to think that stopping this merger means everything will stay the same.”  She added, “Forcing Cerberus to continue to own Albertsons is not an option if they don’t sell to Kroger it will be to someone else.” Given profits generated by Albertsons this eventuality is not ordained.

 

The local Union may have been heartened by the commitment by C&S Wholesale Grocers to honor union agreements with respect to the 413 stores that will be acquired, many located in the states represented by UFCWU Local 555.

 

The position of the national UFCWU is that divestiture of stores to C&S Wholesale Grocers will be a replay of the Haggen debacle in 2015 when these locations were repurchased by Albertsons at a considerable discount resulting in subsequent closures and termination of employment.  Local 555 are enigmatically seeking job security through the C&S Wholesale acquisition but this may well be wishful thinking.

 

The endorsement may well be moot given the decision of the FTC on February 26th to disallow the transaction.


 

JBS S.A. Delays NYSE Listing

02/24/2024

Following a previous announcement of a delay in listing during November 2023, JBS S.A. has indicated that it will file a registration statement with the Securities and Exchange Commission after the March 26 financial results are released.

 

JBS faces opposition from environmental activist groups and from Congress urging the NYSE to deny the listing.


 

Maple Leaf Foods Reports on Q4 and FY 2023

02/24/2024

In a press release dated February 22nd Maple Leaf Foods Inc. (MFI-TO) announced results for Q4 and FY 2023 ended December 31st 2023.

 

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$0.74)

 

4th Quarter Ending December 31st.

2023

2022

Difference (%)

Sales:

$882,634

$877,286

+0.6

Gross profit:

$100,252

$74,425

+34.7

Operating income:

$24,663

$(608)

+4,156

Pre-tax Income

Net Income/ (Loss)1

$(6,451)

$(6,897)

$(21,875)

$(30,704)

+70.5

+77.5

Diluted earnings per share:

$(0.06)

$(0.25)

+76.0

Gross Margin (%)

11.3

8.5

+32.9

Operating Margin (%)

2.8

-0.1

+2,900

Profit Margin (%)

-0.8

-3.5

+122.9

Long-term Debt and lease obligations2:

$1,253,183

$1,373,368

-8.8

12 Months Trailing:

     

Return on Assets (%)

0.5

   

Return on Equity (%)

-7.9

   

Operating Margin (%)

2.8

   

Profit Margin (%)

-2.6

   

Total Assets

 Intangibles and goodwill as % of assets

$3,406,310

17.8

$3,287,717

18.9

+3.6

Market Capitalization February 22nd.

$2,820,000

   
  1. Restructuring charge Q4 2023 $6.1 million; Q4 2022 $4.2 million
  2. December 31st. 2022/2021

 

For FY 2023 Maple Leaf Foods lost $(92.48) million on revenue of $3,602 million with a negative diluted EPS of $(0.76). Comparable values for FY 2023 were a net loss of $(230.80) million on revenue of $3,507 million with a negative diluted EPS of $(1.86)

 

Q4 2022 Meat Protein Segment:

Sales, $858 million, down 2.8% from Q2 2022.

Adjusted operating earnings $45.0 million down 33.8% from Q2 2022.

 

Q4 2022 Plant Protein Segment:

Sales, $27.0 million, down 8.8% from Q4 2022.

Adjusted operating loss $(3.5) million 81.7% improvement from Q4 2022.

 

52-Week Range in Share Price: $15.92 to $23.41 50-day Moving average $18.99

Forward P/E 15.2 Beta 0.5

Market Close pre-release February 21st $19.11

Market Open post-release February 22nd $17.03

Insider shareholding 40.0%. Institutional shareholding 25.8%

 

In commenting on Q4 results Curtis Frank president and CEO stated “In 2023 we made great progress in advancing our strategic Blueprint, delivering top-line growth of 2.7 percent, recording an increase of US$115 million in Adjusted EBITDA to US$317 million for the year, and meeting our commitment to achieve Adjusted EBITDA neutral or better in our Plant Protein business as we exited the year.” He added “While these are important achievements, and we are pleased with our relative performance in challenging market conditions, we acknowledge that we still have work to do to realize our full potential.”

 

In addressing the two operating segments Frank noted “In the fourth quarter, our Meat Protein results fell below our expectations, as a result of global pork market dislocations that have persisted longer and deeper than we anticipated, and a challenging consumer demand environment, plus we still have a short distance to go to bring home the full benefits from our London Poultry and Bacon Centre of Excellence projects.” He concluded “With our refreshed strategic Blueprint announced today, we are sharpening our execution focus, bringing together our Meat Protein and Plant Protein businesses to build a powerful platform from which to grow in the U.S. market, and aligning the talents of our team to leverage the strength of our portfolio of leading brands, leadership in sustainability and world-class assets."

 

The Company provided the following comments on strategy and guidance:-

  • Meat Protein: The Meat Protein Group is comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations in pork and poultry. The Meat Protein Group includes leading brands such as Maple Leaf®, Maple Leaf Prime®, Maple Leaf Natural Selections®, Schneiders®, Schneiders® Country Naturals®, Mina®, Greenfield Natural Meat Co.®, and other leading regional brands.

 

Sales for the fourth quarter increased 0.8% to $1,159.0 million compared to $1,149.6 million last year. Sales growth was driven by volume growth, pricing action implemented in prior quarters to mitigate the impact of inflation, and favourable mix shift. Prior year sales volumes were also impacted by the cybersecurity incident.

  • Plant Protein: “The Plant Protein Group is comprised of refrigerated plant protein products, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels. The Plant Protein Group includes the leading brands Lightlife® and Field RoastTM.

 

Sales for the fourth quarter were US$27 million compared to US$29.6 million last year, representing a decline of 8.9 percent. Sales decline was driven by lower retail volumes, partially offset by pricing action implemented in prior quarters to mitigate inflation”.

 

In late 2021, the Company announced that it was re-evaluating its outlook for the Plant Protein Group and launching a comprehensive review of the overall plant protein category. This decision was driven by a pronounced slowdown in growth rates in the category, Estimates at the time suggested that the category would grow at an average annual rate of 10 to 15 percent, making it an US$8 billion market by 2030”. This prediction has not been realized and the market has contracted in both volume and value.

  • The Company statement noted, “In the near term, the Company is realigning its organizational structure to align with the refresh of its strategic blueprint by bringing together its Meat and Plant Protein businesses. This shift supports a clear and consistent focus on driving profitable growth in Canada, the U.S. and internationally across its entire protein and prepared foods portfolio”.

 

Kemin KemTRACE® for Turkeys

02/22/2024

Kemin Industries has received approval for the use of KemTRACE® Chromium in growing turkey diets.  The product supplies 0.2 ppm chromium to feed at an addition rate of one pound per ton of the 0.4 percent commercial product.

 

In a trial conducted at North Carolina State University, KemTRACE® Cr was evaluated in turkeys grown through 84 days of age in replicate floor pens.  Treatments comprised a non-supplemented control and 0.2 ppm chromium propionate supplement.  Average daily gain was numerically higher in turkeys receiving the KemTRACE® Cr supplement at 0.2ppm attaining 106.7g per day.  Turkeys receiving the control diet, that analyzed over 2.0ppm of chromium, gained 101.9g per day.  Feed conversion efficiency was significantly improved compared to the controls at 2.18 to 2.11 for the supplemented treatment.  Given the duration of the trial and daily weight gain, live weights of the control and treatment were respectively 8.62kg and 9.03kg.  Effectively, chromium supplementation provided 410g of additional live weight or 320g of RTC mass but required the consumption of an incremental 168g of feed.

Concurrently, it was demonstrated that a supplementation rate of five times the approved level attaining 1.0 ppm chromium had no deleterious effect on live performance or hematologic or blood chemistry parameters in turkeys through 84 days of age. 

 

Human food safety of chromium supplementation was demonstrated by assays of liver, muscle, kidney and skin with adherent fat and demonstrated only small increases in chromium concentrations in edible tissues. It was concluded that supplemental KemTRACE® Chromium at five times the approved level (1.0ppm) would have minimal effect on total chromium intake by humans.

 

Spears, J.W. et al. Chromium Propionate in Turkeys:  Effect on Performance and Animal Safety, Poultry Science doi.org/10.1016/j.psj.2023.103195

Spears, J.W. et al. Chromium Propionate in Turkeys:  Effects on Incident Sensitivity, Poultry Science doi.org/10.1016/j.psj.2023.103215

Spears, J.W. et al. Chromium Propionate for Turkeys:  Effects on Tissue Chromium Concentrations in Human Food Safety, Poultry Science doi.org/10.1016/j.psj.2023.103196


 

Seaboard Corporation Reports on Butterball Subsidiary

02/22/2024

Seaboard Corporation is the majority shareholder in Butterball LLC with 52.5 percent of equity Their subsidiary is ranked as the second largest turkey producer in the U.S.

 

For fiscal 2023, the turkey segment posted sales of $2,025 million with an operating profit of $182 million.  Net profit was $166 million.  Butterball LLC posted assets of $1,120 million, with $172 million represented by goodwill and intangibles.  Given total liabilities of $408 million the shareholders’ equity is $702 of which $365 million accrues to the majority shareholder.

 


 

Department of Labor Interviewing Workers in Mississippi Chicken Plants

02/22/2024

Julie Su, Acting Secretary of the Department of Labor (DOL), recently met with workers employed in chicken plants and their organizers in Mississippi. The objective was to review alleged ongoing abuses and worker complaints. 

 

A roundtable was organized by Immigrant Lands for Justice and Equity and addressed the concerns mainly of Latino workers. These included hazardous plant conditions, wage theft and coercion.  According to a DOL release it is the mission of the Department to investigate allegations and to “explore ways for enhanced federal protection”.


 

West Liberty Foods Eliminating Production Positions in Iowa

02/22/2024

West Liberty Foods will cease ready-to-eat production at their West Liberty IA. plant, resulting in the loss of 260 line production positions. Layoffs will commence during April and continue through November.  West Liberty Foods will move the slicing operations to Bolingbrook, IL. to respond to market demand.  Turkey harvesting and first-shift operation at West Liberty will continue.

 

Brandon Achen, President and CEO stated, “As a resident of this community the decision to reduce production capacity in West Liberty was difficult and painful”.  He added, “We are committed to connecting each affected person with new employment opportunities and support and we will offer reassignment opportunities, provide on-site reemployment and support services”.


 

Japan Reports H5N6 in Broiler Breeder Flock

02/22/2024

According to a report submitted to the World Organization of Animal Health on February 14th, an outbreak of H5N6 highly pathogenic avian influenza was diagnosed in a flock of 14,000 broiler breeders in Minamisatsuma City in Kagoshima Province, Japan.  The affected flock was depopulated, and restrictions imposed on movement of poultry and products within a radius of 1.9 miles with appropriate surveillance of farms within a six-mile radius.

 

From October 2023 onwards during the Fall seasonal epornitic, Japan recorded 84 outbreaks of highly pathogenic avian influenza in 26 of 47 prefectures with depopulation of 17.7 million birds comprising broilers and commercial egg production flocks.


 

Update on Production of Broilers in Mexico

02/22/2024

According to USDA-FAS GAIN Report MX2024-0011 released on February 12th, domestic production in Mexico during 2024 will increase by 2.5 percent over 2023 to 3.950 metric tons.  This quantity will represent 79.4 percent of the domestic requirement of 4.975 million metric tons.  The remaining 1.025 million metric tons or 20.6 percent of requirement will be supplied by imports.  Exports from Mexico are inconsequential amounting to 5,000 metric tons.

 

Chicken meat represents 60 percent of livestock production and is expanding at a faster rate than cattle and hogs. Domestic consumption per capita will attain 84 pounds in 2024.

 

In February 2023, the Administration published a Presidential Decree directing a phase-out of GM corn.  Amid considerable confusion over interpretation, the Administration has persisted with their intention jeopardizing both the domestic industry and the export of corn from the U.S. amounting to $5 billion in annual value. On August 17, 2023, the United States Trade Representative announced the establishment of a dispute settlement panel under the USMCA Agreement contending that the decree is arbitrary and lacks scientific merit.

 

Trade with the U.S.  is subject to an ongoing claim established by the Unit of Foreign Trade Practices that the U.S. is “dumping” leg quarters.  The issue has been under review for twelve years without resolution.  The Government of Mexico Presidential Decree to extend an exemption on tariffs to facilitate importation of food including chicken will continue through the current year.  This decree allows chicken to be imported without a tariff from nations not currently enjoying free trade agreements.  This concession has created competition from Brazil and Argentina.

 

During 2023, the U.S. exported 721,342 metric tons of chicken products to Mexico valued at $811 with a unit price of $1,124.  Exports to Mexico represented 19.8 percent of total exports and 17.1 percent of value. Exports of broiler products to Mexico in 2023 were up 9 percent in volume and 6 percent in value compared to the previous year.

 


 

TARGAN Develops First Automated Gender Sorter for Broiler Hatcheries

02/20/2024

TARGAN Inc., based in Raleigh, NC, has developed the WingScan™ feather-sexing system for broiler chicks.  The WingScan system comprises a multilevel conveyer system to channel chicks into a single file for passage through a machine-vision detector that can differentiate between fast and slow feathering wing plumage. The system  is engineered to integrate with existing hatchery automation equipment,  and will incorporate TARGAN’s  individual chick vaccine delivery system in the future.

 

TARGAN has combined chick-handling technology developed during the 1990s with contemporary machine vision and AI. Under the direction of Ramin Karimpour a team of engineers and bio-scientists has applied modern detection systems and electronics to produce a multi-patented commercial and practical installation to separate male and female broiler chicks.

 

The WingScan system is modular with each module capable of processing up to 50,000 chicks per hour with up to 98 percent accuracy.  Chicks are loaded onto the system and are successively separated into a single track by gently transiting a cascade over three conveyor levels.  The system is designed to minimize chick stress and physical handling, contributing to optimum growth and livability during the first week after placement.  By placing multiple 8-lane WingScan units in parallel, it is possible to increase throughput by increments of 100,000 chicks per hour to accommodate required hatchery capacity.

 

Click image to watch video

 

The business model applied by TARGAN is based on an equipment-as-service  paralleling the situation with in ovo vaccinators.  This is considered essential for an emerging technology since it absolves integrators from making large, initial capital investment without long-term confirmation of functionality and benefits.

 

It is possible to manually differentiate chick gender using feather-sexing strains.  This requires a team of trained workers to handle and inspect each chick before allocation to either male or female chutes on a carousel conveyer.  Although this approach was used by a small proportion of the U.S. broiler industry during the 1980s and 1990s, use was limited by the availability of workers and the incidence rate of ergonomically induced carpal tunnel syndrome.

 

The WingScan system completely automates sorting by gender at a cost equivalent to manual processing. WingScan has a far smaller footprint than carousels and is suitable for retrofitting to existing hatcheries. The rate of processing expedites chick handling to ensure early delivery to farms.

 

TARGAN provides a practical method to differentiate gender at the hatchery.  Integrators derive benefits associated with lower live-bird cost and greater uniformity at processing, by reconfiguring placement programs and schedules to achieve desired uniformity.  The potential benefits from separate gender grow-out accrue from a lower live bird cost that can be achieved from precision feeding according to the relative growth rates of male and female broilers in separate flocks.  There is probably less competition with single-gender placement and adjustment of feeder and drinker lines is simplified without compromising availability.  Financial benefits can be derived through reconfiguring placement and harvesting schedules, training of contractors and service people to the realities of separate gender grow-out including feeding programs and post placement vaccination.  Separation of male and female chicks at the hatchery does not necessarily guarantee a financial return, but provides the basis for integrators to realize significant financial return  through their changes to existing straight-run grow-out.

 

TARGAN has developed an alliance with a major integrator allowing field evaluation of both the operational aspects and financial benefits.  This integrator produces a range of heavy broilers for portioning, conventional weights for whole-bird sales and small birds with a narrow weight range for QSR-portioning.  Clearly, separate-gender grow-out will have benefits at the two extremes of live weight both with respect to live bird production and processing.

 

TARGAN will have a receptive market in Brazil given the structure and export orientation of that industry.  In addition, importers in Middle Eastern nations require a narrow range of carcass weights within predetermined fixed-weight categories for bagged birds ranging from 900g to 1,300g. 

 

Although male and female chicks are placed separately with an anticipation of standard growth rate for a strain, biological factors including variability in nutrient quality, climatic extremes and disease challenge may result in deviation from standard daily gain. This requires fine-tuning of predicted harvest age to attain a predetermined live weight and uniformity.  A complementary technology to WingScan™ would be a machine-vision system to determine average bird weight in real-time based on continuous scanning of the flock.  Portable units could be placed in grow-out houses within two weeks of harvest to monitor weight and daily gain to optimize the uniformity of flocks delivered to the processing plant.

 

TARGAN has developed a practical method of separating male and female broiler chicks using its patented WingScan system.  Financial benefits to integrators will derive as they work on  appropriate flock management, nutrition and scheduling of placement and harvest.


 

Sustainability and Child Labor Resolutions Voted Down at Tyson Foods Shareholders Meeting

02/19/2024

Resolutions by activist organizations to audit possible child-labor irregularities at Tyson Foods plants and to upgrade sustainability through packaging were both rejected by shareholders at the Annual Meeting on February 9th.

 

The Board of Directors was reelected and Kate B. Quinn was added to the Board. Among other accomplishments, Ms. Quinn was the Vice-chair and Chief Administration Officer at U.S. Bancorp.


 

Salmonella Reading Demonstrated to be Vertically Transmitted

02/19/2024

Following outbreaks of Salmonella Reading among consumers of ground turkey and related products, widespread distribution of the pathogen was confirmed within the turkey industry.

 

To ascertain whether S. Reading can be transmitted by the vertical route, investigations led by Dr. Li Zhang at Mississippi State University were conducted using either the S. Reading outbreak isolate or an uninvolved strain both modified to exhibit bioluminescence. For convenience in investigating transmission, broiler breeder hens were infected by the intravaginal route.  Seventy percent of eggs were contaminated on the shell surface with the bioluminescent outbreak isolate and 35 percent using a non-implicated S. Reading strain.  Four percent of internal egg contents yielded the outbreak strain and 2 percent the non-outbreak strain.

 

Of ten broiler breeder hens euthanized, 20 percent of ovaries, 70 percent of oviduct tissue and 70 percent of cecal samples were positive to S. Reading irrespective of whether an outbreak or non-outbreak strain was used as the infective agent.

 

The study clearly indicates that S. Reading in the turkey industry as an epornitic analog of S. Enteritidis in egg production. Accordingly similar approaches to detection and eradication will be necessary applying enhanced structural and operational biosecurity including precautions with insemination, elimination of infected shedders at all generations down to parent level, environmental testing and possibly either vaccination or phage suppression. The only effective post-harvest modality for ground turkey would be electron-beam treatment or bulk Cobalt60 irradiation-effective but limited by public acceptance.

 

The project was funded by the USPOULTRY Foundation as Project #729.

 


 

Cargill Settles on Violations of the Packers and Stockyards Act

02/19/2024

Cargill has reimbursed suppliers of cattle delivered from August 2021 through March 2022 for inaccurate yield grades. The assessed loss accruing to suppliers amounted to $12.5 million.  In addition, Cargill Meat Solutions will pay a $155,000 civil penalty in a settlement agreement with USDA Agricultural Marketing Service.

 

The consent decree enjoins Cargill from deviating from applicable installed camera-grading standards.

Picture


 

Hall County, NE. Urging Environmental Compliance for JBS Plant

02/19/2024

At a public meeting on January 30th the Commissioners of Hall County, NE. heard testimony from residents impacted by frequent air and water contamination emanating from the JBS, Grand Island plant. The meeting included testimony from the Nebraska Department of Environment and Energy with documentation of at least one wastewater violation each month over a prolonged period.

 

The Board is responding by addressing a letter to the company urging it to be “more accountable in policies and practices concerning air and water environmental issues.”

 

The Head of Corporate Communications for JBS stated that the company is “working hard to address any potential impacts from the recent wastewater incident at our Grand Island beef production facility.”   A full investigation is underway as to what caused the failure of a lagoon structure leading to the released of two million gallons of effluent into the Wood River, potentially affecting wells and groundwater.

 

It is apparent that JBS Grand Island plant has a problem with waste disposal and accordingly appropriate investment will be required to prevent further environmental incidents.  The action of Hall County Commissioners by simply writing a letter encouraging compliance would appear inadequate. This as with the 2020 COVID crisis is a further example of the power of a large company responsible for significant employment and contribution to the tax base of a rural county.

 


 

Theft of Rationed Chicken in Cuba by Plant Workers

02/19/2024

Press reports confirm that 30 workers at a plant processing chicken collectively stole 133 metric tons.  The product was intended for distribution in accordance with a State rationing system.  The accused were recorded removing packed chicken from a cold store by surveillance video. Sentences of up to 20 years in prison could be imposed for the crime.

 

During 2023, Cuba was the fourth ranked importer of U.S. broiler products, purchasing 260,582 metric tons, principally as leg quarters, valued at $286 million. Unit price was $1,098 per metric ton compared to an average for all exports amounting to $1,384 per metric ton.

 

 

USAPEEC Actively Involved in Trade Issues

02/19/2024

According to the February 19th edition of USAPEEC MondayLine, the Trade and Technical Services Team has been active in attempting to resolve recent trade issues.  These include an unjustified closure of the market in Columbia, the Certificate of Conformity issued by the Republic of Congo and interpretation of changes in import regulations especially with respect to Mexico.

 

USAPEEC is also active in arranging and hosting visits by officials of importing nations to evaluate health and food safety procedures in U.S. plants.  A visit during early May is anticipated from the Republic of South Africa that recently rescinded some duties on imported chicken.


 

Upside Foods Cancels Illinois Project

02/19/2024

In late 2023, Upside Foods announced their intention of establishing a production facility in Glenview, IL. planned to produce 30 million pounds of cell-cultured meat annually.  The plant extending over 187,000 square feet would have cost $140 million and employed 75 workers. Press reports indicate that since 2015 Upside Foods and its predecessor, Memphis Meats attracted $600 million in venture capital support.

 

Following the announcement of the intended production facility, Upside Foods was subject to negative publicity with disclosures that commercial production of cell-cultured meat could not be consistently achieved using large bioreactors installed in the Emeryville, CA plant.  Allegations from existing and ex-employees confirmed failure to scale-up production from laboratory-level plastic roller bottles to bioreactors, in common with many potential producers of cell-cultured meat and poultry.

 

According to Wired, Upside Foods has apparently laid off workers that were to be involved in planning and construction of the Glenview facility and that expansion at Emeryville will now proceed. Upside Foods now claim that problems previously limiting commercial production have been resolved. Given previous hype and misleading statements this will only be confirmed when cell-cultured product appears in supermarket display coolers.

 

Press reports suggest that investment in cell-cultured meat startups and existing operations has undergone a sharp reduction with growing disillusionment of their ability to produce on a commercial scale, in addition to regulatory hurdles, restrictive labeling legislation and indications of potential consumer rejection.


 

Metapneumovirus Emerges in the U.S.

02/18/2024

Recently Avian metapneumovirus (AMP) infection was diagnosed in turkeys and broilers in North Carolina.  This virus is responsible for swollen head syndrome (SHS) in broilers and has been recognized as a clinical entity for over 45 years in various broiler production areas in the World. Although Koch’s postulates confirm that the AMP virus is pathogenic, clinical presentation and severity are influenced by intercurrent infection with other pathogens and environmental conditions.

 

In the Republic of South Africa where SHS was first described, the condition is both seasonal and regional.  Outbreaks were initially observed in broiler flocks on the highland (5,000-foot) inland  plateau during the harsh winter characterized by cold and dry conditions.  Outbreaks were associated with immunosuppression, at the time caused by emerging variants of infectious bursal disease.  Metapneumovirus resulted in a transient upper respiratory infection with obvious conjunctivitis and involvement of the Harderian gland.  Irritation caused mildly affected birds to  scratch at their eyelids. This resulted in superficial abrasions and lacerations of the periorbital region with introduction of fecal material carrying STEC from litter into the ocular adnexa. Within days, a flock aged from 20 to 30 days of age would progress from mild respiratory signs to severe cellulitis of the periorbital and head region with symblepharon and death due to dehydration. In severe case mortality could rise to 30 percent of the flock through to harvest with severe runting of affected survivors.

 

Fortunately, there are both serologic and antigen detection systems available in the U.S. at numerous laboratories to assist diagnosticians. 

 

  • The University of Georgia Poultry Disease Research Center (PDRC) offers an rt PCR assay for subtypes A, B and C of AMP.  Virus isolations are also available to conduct virus characterization.  The PDRC requests submission of whole heads, or tracheas, that must be collected  at an initial stage of an outbreak to avoid secondary bacterial contamination.  Specimens should be submitted by Express Next Day delivery on ice
  • The BioChek ELISA and the IDEX ELISA will detect antibodies to subtypes A and B and both are available at diagnostic laboratories operated by the Universities of Delaware, Purdue, Minnesota and Iowa State. 
  • rt PCR is available from AviServe, Iowa State University, NVSL, PDRC, South Dakota State University, University of Minnesota, the Pennsylvania Diagnostic Laboratory and the University of Delaware.

 

Practitioners involved in egg production should consider conducting serologic surveys on flocks to determine the extent of AMP exposure. The results would be especially instructive for flocks that have experienced high mortality due to avian coryza. This is predicated by observations that in the past two years, the mortality and impact on egg production due to avian coryza has become more severe, suggesting a concurrent pathogen exacerbating the impact of infection with the primary bacterial pathogen.


 

Dr. Jose Linares of CEVA Animal Health has prepared an overview with images of lesions associated with infection. This informative contribution can be accessed by clicking on to the link.

 

Avian Metapneumovirus – Diagnostic Labs that can test for aMPV

 

AviServe (Dr. Milos Markis)

In-house PCR (A,B,D); VI

ISU (Dr. Gazzar)

Idexx Elisa (A,B,C); qPCR; VI

NVSL (Dr. Torchetti)

In-house real-time RT-PCR (A,B,C); in-house ELISA (A,B,C); VI in support of control efforts,  WGS for virus monitoring efforts 

PDRC (Dr. Holly Sellars)

PCR (A,B); RT-PCR (A,B); VI

SDSU (Dr. Sunil Mor)

RT-PCR (A,B,C,D); NextGen; VI

UMN (Drs. Porter & Voss)

In-house PCR & Elisa (C); VI

Veterinary Diagnostic Pathology (Drs. Hoerr & Clontz)

Necropsy; Histopathology; Sample Collection & Distribution

USDA ARS (Dr. Kapczynski)

PCR (A,B); VI

Whitbeck Lab

Bio-Chek Elisa (A,B)

PA-DLS (Drs. Niel & Lighty)

Necropsy; Histopathology; Sample Collection & Distribution

Purdue ADDL SIPAC (Dr. Grant Burcham)

Idexx Elisa (A,B,C)

University Delaware ADDL (Dr. Ladman)

RT-PCR (A&B); rRT-PCR (A&B); VI

Georgia Poultry Lab Network

RT-PCR, ELISA

 

 

 


 

Batista Brothers to Join Pilgrim’s Pride Board

02/14/2024

Pilgrim’s Pride Corp. has announced that brothers Wesley and Joesley Batista will join the Board of the company.

 

The move follows their acquittal on a charge of insider trading alleged by the CVN the authority in Brazil regulating the stock market.  Concurrently the Supreme Court of Brazil has suspended a $2.0 billion fine imposed on the holding company J&F relating to a leniency agreement in 2017.

 

It is the intent of J&F Investimentos, the controlling entity of JBS S.A. to seek a NYSE listing. This has engendered opposition in Congress and also from consumer and investment groups.

 


 

Boehringer-Ingelheim Launches Vaxxilive® Cocci 3 Vaccine

02/14/2024

Boehringer-Ingelheim has announced that Vaxxilive® Cocci 3 will be available for broilers superseding Hatchpak® Cocci III.

 

The vaccine contains precocious Eimeria species that affect broilers.  Precocious strains do not produce the same level of tissue damage as conventional strains as they only undergo one cycle of asexual reproduction (schizogony).  Boehringer-Ingelheim has positioned the vaccine for year-ground use as an alternative to feed additive anticoccidial drugs.

 

In announcing the launch, Dr. Rick Phillips, Director for Key Account Veterinarians stated, “As with any vaccination, choosing a product is only half the battle.”  He added, “Our experienced and knowledgeable field team provides industry-leading support to producers, regularly visiting them to review vaccination protocols, and to create and maintain comprehensive poultry health programs.”


 

JBS Foods Settles Class Action Wage Lawsuit

02/13/2024

Following the filing of a lawsuit in the Federal District Court of the District of Colorado, JBS Foods has reached a settlement with the Plaintiff class without disclosure of details.  The Plaintiffs claim that eleven companies colluded to set wage rates and discriminated against workers desiring to switch employers, referred to as “no-poach” agreements.  All major packers are included among the eleven defendants alleged to have violated the Sherman Antitrust Act. Other defendants include AgriStats Inc, Agri-Beef and other entities that circulated wage data.



 

McDonald’s No Longer Just a “Burger Company”

02/13/2024

During an investors’ call following the release of FY 2023 financial results, CEO Christopher Kempczinski noted that chicken products including sandwiches and nuggets now exceed the sales value of beef burgers.

 

The acceptance of chicken, based on nutritional value, taste and price together with negative perceptions of health and sustainability associated with beef are driving the trend.

 

The challenge for the broiler industry is to develop innovative products compatible with QSR menus and servings that can reduce cost to customers and generate demand.



 

Louis Dreyfus Pea Protein Plant

02/13/2024

Louie Dreyfus Company is constructing a plant to isolate pea protein in Yorktown, Saskatoon, Canada.  Pea protein will be available for plant-based dairy and meat alternatives.  The facility will be completed by the end of 2025.

 

Michael Gelchie, CEO of Louis Dreyfus stated, “the investment announced today is an important step in the Group’s global growth strategy as part of our plans to diversify revenue through value-added products”.

 

Previously, CHICK-NEWS reported on the application by a U.S. company to impose a dumping duty on pea protein produced in China.  Investigations showed that companies involved in manufacture and export to the U.S. received subsidies from the state, creating unfair competition against producers in North America.

 

The short-term result of result of the dumping duty on approximately 150,000 metric tons of product from China will be to raise the cost of plant-based meat substitutes. This will further increase losses incurred by manufacturers of these products.

 


 

RSA Applies Rebates on Chicken Imports

02/13/2024

On January 26th, the Department of Trade, Industry and Competition of the Republic of South Africa announced a rebate on both boneless and bone-in chicken imports.  These will comprise a 25 percent rebate on bone-in cuts and 30 percent on boneless chicken.  The decision follows applications made by the Association of Meat Importers and Exporters and reflects the disparity between supply and demand in the Nation.  Predictably, the South African Poultry Association was opposed to the rebate claiming that there was no shortage of poultry meat over the Christmas period that is seasonally characterized by high demand.

 

The decision to grant rebates was made by the Government to reduce the effect of inflation on a critical protein ingredient.  The African National Congress Party that has ruled South Africa since the transition from apartheid is facing a general election with unprecedented opposition. This is a result of rampant corruption, the unfavorable economic situation, uncontrolled crime and an inability to provide services including power.

 

According to USDA-FAS GAIN Report SF2024-0002 released on February 6th, “The cost of bone-in chicken meat in South Africa has increased by 28 percent over the past three years, attributed in part to anti-competitive prices due to protection from international competition.”

 

In March 2020, South Africa increased the most-favored-nation duties on bone-in chicken from 37 percent to 62 percent together with an increase from 12 percent to 42 percent for boneless portions.  The U.S. and Brazil are subject to additional antidumping duties on bone-in chicken.

The volume of chicken meat subject to the rebate will be limited to 172,000 metric tons and the quota will be divided into quarterly increments.

 

During 2023 18th-ranked South Africa imported 44,324 metric tons of chicken products valued at $42.4 million with a unit cost of $957 per metric ton. Volume and value were down 20 percent compared to 2022


 

Aviagen Receives USPOULTRY Award for IPPE Participation

02/12/2024

This year Aviagen received a special award for seventy years of continuous participation in the International Production and Processing Exhibition and its progenitors including the Southeast Poultry Show. Marla Robinson accepted the award from USPOULTRY chairman Mikell Fries. 

 

 

During the concurrent American Feed Industry Association meeting Anne-Marie Netson, Global Senior Advisor for Welfare Sustainability and Compliance addressed environmental and sustainability challenges including lifecycle analysis and establishing company-specific targets for change. 

 

In reviewing the Aviagen participation at the 2024 IPPE, CEO Jan Henriksen noted, “Our show theme and corporate philosophy of breeding success together was demonstrated.  We were pleased to connect with our esteemed customers and industry stakeholders sharing ideas and best practices.”


 

Definition of Free and Pasture Raised Under Review

02/12/2024

A bipartisan group of members of the House have requested USDA to expedite a review of the Perdue Farms petition filed in March 2023 regarding the definition of “free-range” and “pasture-raised” claims.  At issue is whether the eventual definition will favor specific production systems and operators of farms or even result in unintended consequences.

 

A small-scale producer in Vermont noted that broilers “range outside houses in the morning and evening but are not naturally adventurous and will not explore very far beyond their shelters.”  This observation is common to free-range egg production flocks allowed access to pasture where they remain in proximity to their houses, cluster and demonstrate fear of predation.

 

It is generally accepted by both large and small-scale producers that clear definitions are required to obviate consumer confusion.  Once standards are adopted, it will be necessary to ensure that label claims are consistent with actual production systems used.

 


 

Ahold Delhaize Withdraws from Meat Processing

02/11/2024

In a February 7th announcement, Cargill will purchase two case-ready meat plants located in North Kingstown, RI. and Camp Hill, PA. from subsidiaries owned by Ahold-Delhaize, a multinational food retailer with an extensive presence in the U.S.

 

The plants are currently operated by Cargill and the divestment is logical based on the respective businesses of the two parties.  Hans Kabat, president of Cargill. North American Protein Segment stated, “With this investment we look forward to our continued partnership with Ahold Delhaize USA while bringing additional high-quality case-ready products to new retail customers.  J. Fleeman CEO of Ahold-Delhaize USA stated, “By aligning these facilities with a company that specializes in meat production, we can continue to provide quality products to our brands’, quality products to our customers and increase our focus on being a leading omnichannel retailer.”


 

K&N’s Wins Federation of Pakistan Chamber of Commerce Achievement Award

02/11/2024

K&N’s an integrated producer and processor has once again received an Achievement Award from the Federation of Pakistan Chamber of Commerce and Industry.  This recognizes outstanding service to the poultry and frozen food industries of the Nation.  Other considerations include meritorious service to the business community and contribution to the industry and to national economic development.

 

K&N’s is a second-generation enterprise founded 60 years ago. The company is integrated from parent stock multiplication, through production and sale of broilers, feed production and processing. The Company pioneered distribution of branded products in Pakistan with a wide range including whole chickens, premium cuts, further-processed breaded portions and ethnic dishes including kabobs and samosas.


 

OSHA to Levy Fines on Case Farms, Winesburg, OH. Plant

02/11/2024

Following an inspection on August 7th, 2023, the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) proposed fines of $400,000 on the Case Farms broiler processing plant in Winesburg, OH.  The inspection was carried out under the Severe Violator Enforcement program based on a history of 450 citations since 1988 in plants operated by the company in North Carolina and Ohio. Major areas of concern included lack of machine guarding, trip-and-fall hazards, failure to use lockout procedures and inadequate training of workers. Case Farms employs 3,500 workers nationwide, including 575 at the Winesburg facility with a throughput of 150,000 birds per day.

 

The categorization of Case Farms as a Severe Violator is in conflict with a number of awards received by the company for workplace safety.  The Joint Industry Safety and Health Council (JISHC) recognized six facilities including two processing plants and four hatcheries for “outstanding performance in implementing innovative and effective employee safety and health programs”.  Case Farms received the honors at the 2023 National Safety Conference for the poultry industry in mid-August.

 

Tyler Parlier, Regional Safety Manager for Case Farms, stated, “Safety is intertwined with everything we do at Case Farms, every location and every team member to be recognized for our safe working practices is simply outstanding.  Several of our locations have received awards in safety for many consecutive years, proving that we are committed to working safely.” The Winesburg plant that was the subject of OSHA fines and previous violations received the Award of Honor.

 

Recognition by the JISHC is based on Total Recordable Incident Rate, Days Away, and restricted or transferred employees, all in compliance with Occupational Safety and Health Administration safety metrics. 

 

The concurrent awards to Case Farms for safety and the fines imposed by OSHA appear to be in conflict. An explanation either by the Company or the Federal agency is indicated.


 

YUM! Brands Reports on Q4 and FY 2023

02/08/2024

On February 7th, YUM! Brands (YUM) reported on Q4 and FY 2023 ending December 31st. Results for the quarter were below Zach’s estimates of  $2.12 billion for revenue and $1.39 for EPS.  For the period, the Company posted net income of $463 million on an unexpectedly low revenue of $2,036 million, including company sales, franchise fees and advertising, generating a diluted EPS of $1.62.  Comparative values for Q4 of fiscal 2022 were net earnings of $371 million on revenue of $2,019 million with a diluted EPS of $1.31. Operating margin increased from 28.6 percent to 29.9 percent for the most recent quarter. Digital sales were up 22 percent in FY 2023 approaching 45 percent of sales.

 

For FY 2023 the Company posted net income of $1,597 million on revenue of $7,076 million, with a diluted EPS of $5.68.  Comparative values for FY 2022 were net earnings $1,325 million on revenue of $6,842 million with a diluted EPS of $4.63.

 

During Q4 the holding Company purchased 218 KFC restaurants in England and Ireland and opened 1,853 new units worldwide.

 

The KFC division comprising 29,900 restaurants posted a two percent growth in same-store sales The KFC division generated an operating profit of $329 million achieving an operating margin of 43.4 percent. Of total KFC sales expressed as a percentage, China attained 27; U.S.,15; Europe, 11 and the remainder from Asia.

 

The Pizza Hut division comprising 19,866 restaurants posted 2 percent decline in same-store sales. The Pizza Hut division generated an operating profit of $99 million with an operating margin of 35 percent. Of total Pizza Hut sales expressed as a percentage, U.S. attained 41; China.,18; Europe  and Asia, 13 each.

 

The Taco Bell division comprising 8,564 restaurants posted a three percent increase in same-store sales with system with operating profit of $286 million attaining an operating margin of 34.9 percent. During Q4 201 restaurants were added.

 

In commenting on results David Gibbs, CEO stated, “2023 was another remarkable year for Yum! Brands as we crossed the $60 billion system sales threshold and exceeded all aspects of our long-term growth algorithm. We achieved 10 percent system sales growth with broad-based strength across the globe and another record year for development, opening over 4,700 new stores. We also made massive strides in scaling our proprietary digital and AI-driven ecosystem in partnership with our franchisees. Looking to 2024, this will be a year of major milestones as we cross 30,000 restaurants at KFC, 20,000 at Pizza Hut and well over 60,000 globally for Yum!"

 

Chris Turner, CFO, commented “Last year proved to be another great example of Yum!’s unique blend of growth and resilience. We delivered percent unit growth, one percent system sales growth, and 12 percent Core Operating profit growth. Simply put, there is no other retail business that is growing across 110 different countries and opening the equivalent of a new store roughly every two hours.

 

On December 31st 2023 Yum Brands posted total assets of $6,231 million including goodwill and intangibles of $1,019 million against long-term debt of $11,142 million and an accumulated shareholder’s deficit of $7,858 million. Yum Brands! had a market capitalization of $36,610 million on February 9th.  The share has traded over 52 weeks in a range of $115.53 to $143.25 with a 50-day moving average of $125.91.  On a trailing 12-month basis, operating margin was 31.9 percent, profit margin 22.6 percent with a return on assets of 24.5 percent.  YUM! is held primarily by institutions that collectively hold 80.0 percent of equity.


 

Protectionism Theme of Poultry Market Intelligence Forum

02/07/2024

Brian Earnest of CoBank addressing the domestic and global poultry market outlook for the poultry and egg industry noted that exporters will face increasing trade protectionism.  Earnest observed that importing nations are maintaining tariffs and imposing additional restrictions.  This may be reflected in the political rhetoric of the former president who has stated that if elected his administration would impose high tariffs on imports from China.

 

Dr. David Swayne reviewing the impact of highly pathogenic avian influenza considered control measures including unsuccessful attempts at eradication applying flock depopulation.  Given that H5N1 clade 2.3.4.4b is now endemic in migratory waterfowl and marine birds, the disease is pandemic requiring reevaluation of barriers to international trade coupled with alternative control measures including vaccination.

 

Christian Richter of the Policy Group opined that despite current buoyant economic reports, global trade may be impacted by the world economic situation and the disparity between rich and poor nations.  Richter noted that the outlook may be “ugly and unpredictable”.  He pointed to failure to produce an acceptable farm bill that should have been concluded in 2023. Major issues of contention comprise the magnitude of SNAP funding and price supports for commodities. These concerns coupled with political considerations in an election year have impeded compromise and a bipartisan approach to compromise over farm legislation that has characterized all previous farm bills.

 


 

Tom Hensley USPOULTRY Workhorse of the Year

02/06/2024

Tom Hensley president of Fieldale Farms was named as the 2024 USPOULTRY Workhorse of the Year.  This prestigious honor is awarded annually in recognition of dedicated service and leadership extended to the association and the poultry industry.

 

Jarod Morrison outgoing Chair of USPOULTRY stated, “It is truly an honor to bestow this prestigious award on Tom for his long-time service to both the U.S. poultry and egg industry and to USPOULTRY.  His contributions to the Association and the Foundation have help the organization to prosper and grow through his guidance and input.”

 

Hensley has been active in USPOULTRY serving as Chair of the Board of Directors in 2018 and of the Foundation in 2019.  He has served on the Board for 13 years.

 

Nath Morris president of USPOULTRY stated, “Tom’s commitment to service and giving to others has greatly aided USPOULTRY and the Foundation.”

 

 


 

Contractor Files Lawsuit Against Case Farms

02/06/2024

Randy Black a contractor to Case Farms in North Carolina has filed a federal lawsuit claiming that the company concealed information concerning the tournament system.  Black alleges that Case Farms controls all aspects of grow-out including selection of broiler strains, nutrition and that the tournament system allows the Company to manipulate remuneration.

 

To state that growers bear risks related to their operations is a misrepresentation of the contract system.  Fluctuation in the cost of feed and market prices are borne by integrators.  Differences in performance criteria that determine payment relate to the construction of houses including insulation, equipment and above all management of ventilation and other aspects of grow-out that are directly responsibilities of the contractor following Company guidance provided by servicepersons. At the end of the day both parties benefit from attaining high levels of performance.

 

The lawsuit obviously relates to the proposed new rules under the Packers and Stockyards Act intended to create greater transparency in contracts and the elimination of the tournament system. If successful the case law established will lead to an avalanche of claims.


 

Kemin Introduces KemTRACE™ Chromium Supplement

02/06/2024

KemTRACE chromium supplement is now marketed by Kemin to provide an organic source of chromium for turkeys.

 

Kristi Krafka, Vice President of Regulatory Affairs and Quality Assurance for Kemin Animal Nutrition and Health stated, “we are thrilled that the use of chromium propionate in animal diets continues to expand in the U.S. and beyond”.  She added, “Kemin has devoted decades advancing the nutritional performance of livestock and poultry through novel feeding ingredients and is now able to offer safe and effective KemTRACE chromium to turkey producers, nutritionist and veterinarians”.

 

Studies have indicated that supplementing diets with chromium propionate improves growth of turkeys with a wide safety margin.  For additional information on KemTRACE, click on to the Kemin logo on the right side of the Welcome page.


 

University of California, Davis Establishes Alternative Meat Center

02/05/2024

The University of California, Davis is using part of a California legislative grant of $1.7 million to establish the Integrative Center for Alternative Meat and Protein.  The objective of the center will be to evaluate consumer attitudes concerning alternative proteins and to facilitate large-scale commercialization and technological advancement.

 

In this venture UC Davis will collaborate with the University of Maryland, the Culinary Institute of America and various community colleges.

 

It is ironic that a Land Grant university with departments dealing with dairy, ruminant and poultry production has established a Center that has the objective of displacing these segments of the livestock industry.

 

The California Legislature that embraces the need for enhanced sustainability is clearly opposed to intensive production. Their vision is contrary to the realities of providing nutritious and inexpensive protein to consumers. But that is what the Left Coast is about.


 

Tyson Foods Inc. Reports on Q1 of FY 2024

02/05/2024

In a press release dated February 5th Tyson Foods Inc. (TSN) announced results for the 1st quarter of FY 2024 ending December 30th 2023. TSN posted lower revenue than the $13,457 anticipated but was higher on adjusted earnings ($0.69 vs. $0.40).

 

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)

 

First Quarter Ending

Dec. 30th 2023

 Dec. 31st 2022

Difference (%)

Sales:

$13,319,000

$13,260,000

+0.5

Gross profit:

$823,000

$968,000

-14.9

Operating income (loss):

$231,000

$467,000

-50.3

Pre-tax income (loss)

Net income (loss)

$161,000

$114,000

$434,000

$320,000

-62.9

-64.4

Diluted GAAP earnings per share

Adjusted earnings per share

$0.30

$0.69

$0.88

$0.85

-65.9

-18.8

Gross Margin (%)

6.2

10.0

-38.0

Operating Margin (%)

1.7

4.8

-64.6

Profit Margin (%)

0.9

3.3

-72.7

Long-term Debt and other liabilities:

$9,984,000

$9,189,000

+8.7

12 Months Trailing:

     

Return on Assets (%)

0.9

   

Return on Equity (%)

-3.4

   

Operating Margin (%)

-1.2

   

Profit Margin (%)

-1.2

   

Total Assets*: Dec. 30th ‘23/Dec. 31st 2022

$36,748,000

$36,251,000

+1.4

Intraday Market Capitalization Feb 5th 2024

$20,020,000

   

* Goodwill and intangibles 43.1 percent of total assets

 

52-Week Range in Share Price of TSN: $56.32 to $61.20. 50-day Moving average, $52.36

Market Close: Friday February 2nd $56.30. Monday February 5th post release, $60.47.

Forward P/E 27.5 Beta 0.8

 

The Chicken Segment attained sales of $4,033 million ($4,263 million in Q1 FY 2023) representing 30.2 percent of Company revenue. GAAP operating income attained $177 million in Q1 representing 76.7 percent of net Company operating income. Operating income in Q1 FY 2022 was $69 million representing 14.8 percent of net Company income. For the Chicken Segment the report stated:- “The USDA projects chicken production will be flat in FY 2024”. Anticipated adjusted operating income for the segment was forecast at $500 to $700 million for FY 2024.

 

For comparison among Tyson Foods’ business segments the adjusted operating income (loss) in Q1 2024 were respectively:- Pork, $39 million; Beef, $(206) million; Prepared Foods $243 million and International $(22) million.

 

In commenting on results Donnie King, president and CEO stated “Our team executed well in the quarter and delivered tangible results, including our third sequential quarter of adjusted operating income growth," He added, "We saw the benefits of our diverse protein portfolio and realization of operational efficiencies from the strategic decisions we made in the past year."

 

King opined, "Although we still have work to do, I am pleased with our first quarter results and am confident we are on the right path to deliver long-term shareholder value," He concluded, "Going forward, we will continue to prioritize our liquidity and financial health, our focus on operational excellence, and our relentless pursuit to win with customers and consumers."

 

Guidance for FY 2024 included Revenue unchanged from FY 2023. Adjusted operating income for the Company was stated to be $1.0 to $1.5 billion. Capital expenditure was reduced to $1.0 to 1.5 billion. In the Q2 2013 report Tyson Foods projected $1 billion in savings from the “Productivity Program” by the end of 2024 although this prediction was not confirmed as a quantitative value in the most recent quarterly report but was alluded to.

 

Moody’s recently lowered the outlook for Tyson Foods but the credit rating was not changed at Baa2, slightly above ‘junk’ status. The Company has $1.25 billion maturing in August 2024. Net interest will amount to $400 million n FY 2024.


 

Family of Duvan Perez File Lawsuit Against Mar-Jac

02/05/2024

Edilma Ramirez, mother of 16-year-old Duvan Perez, has filed a wrongful death lawsuit against Mar-Jac Poultry and Onin Staffing following the death of her son.  The lawsuit was filed in the Circuit Court of Forrest County, MS. alleging that the company was negligent in maintaining acceptable safety precautions to prevent death and injury of workers.  The other issue relates to the employment of Perez, a minor, who was placed by the staffing contractor with false documentation, claiming that the minor decedent was 32 years of age. With respect to both allegations neither Mar-Jac nor Onin could present a credible defense for what is clearly res ipso loquitur. Negotiation and checkbook time!

 

It is a matter of record that the Department of Labor, Occupational Safety and Health Administration sanctioned Mar-Jac following the investigation of the accident.  Previously, a worker at the same Mar-Jac plant was killed in a similar incident involving activation of equipment during cleaning.  Both accidents can be attributed to deficiencies in training and supervision including failure to actively implement tag-out procedures to prevent accidental activation of dangerous mechanical equipment.


 

Wings Consumed During 2024 Super Bowl

02/05/2024

The National Chicken Council (NCC) estimated that 1.45 billion wings were consumed during the 2024 Super Bowl LVIII weekend.

 

The NCC projection was unchanged from 2023 despite a recent decline in inventory of this category.  According to the January 24th, 2024, USDA Cold Storage Report, the Wings category showed an 18.5 percent decrease from December 31st, 2022, to a stock of 67.1 million lbs. on December 31st 2023. Although there has been growth in consumption in this category, sales are impacted by competition from boneless wings.  Increased demand during 2023 was however reflected in higher prices.  It is apparent that grocery retailers are constraining margins to achieve higher sales possibly since a high volume of marinated and breaded wings are now available in bulk, catering and convenience packs from club stores, suitable for home football parties, tailgating and other sports-related events.

 

The popularity of wings is evidenced by the quarterly reports of Wingstop®, a franchisor of stores serving and delivering various forms of breaded and marinated wings. Some QSRs and casual dining restaurants have added wings to their menus increasing demand relative to availability.


 

Dr. Jim Perdue Receives NPFDA Lifetime Achievement Award

02/04/2024

he National Protein and Food Distribution Association (NPFDA) awarded the 2024 Lifetime Achievement Award to Dr. Jim Perdue, the third-generation chairman of Perdue Farms.  In receiving the award, Jim Perdue stated, “My grandfather Arthur W. Perdue built our business on quality, integrity and trust and my father transformed the industry”.  He added, “I am proud to carry on the legacy into our companies second century.  While the business may have changed over the years, our values continue to guide our decisions today”. 

 

He accepted the award on behalf of hard-working associates of Perdue Farms.  Jim Perdue earned Masters and Doctoral degrees before joining the company in 1983 working his way up to become Chairman of the Board in 1991. Among many accomplishments during his tenure, Perdue Farms was the first to adopt a no-antibiotics-ever (NAE) protocol.

 

Jim Perdue is active in community organizations and industry associations including non-profits dedicated to preservation of the Chesapeake Bay.


 

Dissent in the E.U. Over Cell-Cultivated Meat

01/29/2024

The E.U. Food Safety Authority has yet to make a decision on the acceptability of cell-cultured meat. There is clear division among nations of the E.U. with opposition based on narrow concerns supporting existing agricultural systems contrasted with environmental considerations.  Twelve E.U. nations consider cultivated meat to “represent a threat to primary farm-based approaches and genuine food production methods that are the heart of the European farming model.” 

 

This approach is exemplified by Italy and France among other nations that have enacted legislation banning the sale of cell-cultivated meat although of questionable acceptance by the E.U. Some nations including Germany, the Netherlands, Spain and the U.K. have promoted cell-cultivated meat based on environmental motives and promotion of technology.

 

The entire question of whether cell-cultivated meat should be banned or promoted may be moot.  There is growing evidence that consumers may sample cell-cultivated meat provided it is available at a price that is competitive compared to the real product but there is evidence that potential buyers view the entire technology with suspicion.  The second and most important restraint to extensive production and consumption of cell-cultivated meat is the fact that no company has successfully transitioned from pilot scale to commercial production using bioreactors.  The likelihood of companies producing sufficient quantities of product with the organoleptic qualities of pork, beef, chicken and lamb is unlikely even in the intermediate term.  Cell-cultivated meat is not going to reverse deforestation to produce beef or reduce greenhouse gas emissions from animal waste despite the hype. Currently broilers and eggs have the smallest environmental footprint among animal products and contribute to the availability of inexpensive and nutritious protein.


 

Activist Organization Petitioning FSIS over Welfare Jurisdiction

01/29/2024

Animal Partisan has petitioned the Food Safety and Inspection Service to allow intervention by state personnel to enforce welfare in federally-inspected plants.

 

The Animal Partisan petition filed in early September 2023 requires FSIS to “publish a notice clarifying that federal law does not necessarily prevent state government officials from bringing animal cruelty charges when farmed animals are abused in slaughter plants”.

 

Subsequent to the filing, the Animal Welfare Institute issued comments supporting the Animal Partisan petition noting that “it could significantly improve the welfare of animals at slaughter”.

 

If granted, the petition would create a problem of divided jurisdiction and encourage activists in state agencies to intervene and bring legal action against processing plants that function under federal jurisdiction.

 

If there are deficiencies in handling live animals and poultry before slaughter, it is the responsibility of federal inspectors to enforce provisions of the Humane Methods of Slaughter Act and the Poultry Products Inspection Act.


 

MIT Designates Cell-Cultured Chicken as “Worst Technology”

01/29/2024

Citing Upside Foods, the MIT Technology Review ranked attempts at production of cell-cultivated chicken as an “epic failure” in technology.  The company has now admitted that it is unable to produce a chicken substitute on a commercial scale using bioreactors.  Currently the quantity produced by month using plastic roller bottles has attained quantities measured in low single digits of pounds.  Whole chicken breasts can be purchased for less than $4 per lb. while a single small serving of cell-cultivated chicken at a gourmet restaurant, if available, costs in excess of $50.  The laboratory-scale production by Upside Foods is energy intensive and generates a considerable volume of plastic waste.

 

CHICK-NEWS has previously opined on the failure of startups to produce commercial quantities of cell-cultivated meat, poultry or seafood.  A number of companies including Upside Foods have raised millions from venture capital investors with little to show for installation of bioreactors and sophisticated installations intended to produce a food product lacking in texture and at a noncompetitive price compared to real meat products.

 

Failure to produce cell-cultivated meat of adequate quality in pilot plants should have restrained investment in larger facilities as in the case of Upside Foods that was following a “fake it ‘till you make it playbook.” The unjustified hype and hubris generated by companies operated by Josh Tetrick are an extreme example of misplaced optimism. According to lawsuits one or more of his subsidiaries ordered installations in anticipation of generating revenue and now is in default on payments to suppliers and contractors.  The entire cell-cultivated meat segment has a whiff of Theranos about it.


 

Turkey Month

01/26/2024

Monthly Turkey Production and Prices, January 26th 2024

 

Poult Production and Placement:

 

The January 12th 2024 edition of the USDA Turkey Hatchery Report, issued monthly, documented 24.82 million eggs in incubators on January 1st 2024 compared to 27.28 million eggs on January 1st 2023* The January 2024 set was down 9.0 percent (2.46 million eggs) from January 2023 and 0.53 million eggs (2.1 percent) less than the previous month of December 2023.

 

A total of 21.48 million poults were hatched during December 2023 down 1.37 million poults (6.0 percent) compared to 22.85 million in December 2022*. The December 2023 hatch was down 0.20 million poults (0.9 percent) from the previous month of November 2023.

A total of 19.70 million poults were placed on farms in the U.S. in December 2023, compared to 21.00 million in December 2022*. The December 2023 placement was 6.0 percent, (1.25 million poults) less than the month of December 2022. This data confirms disposal of 1.79 million poults during the month. Approximately 8.3 percent of the December 2023 hatch was not placed.

 

For the twelve-month period January 2023 through December 2023 inclusive, 270.85 million poults were hatched and 252.92 million were placed. This confirms disposal of 17.93 million poults over the 12-month period, corresponding to 6.6 percent of all poults hatched.

* USDA revision from previous monthly report.

 


 

EPA Issues Proposed Stricter Wastewater Discharge Standards

01/25/2024

The U.S. Environmental Protection Agency (EPA) published proposed wastewater discharge standards in the February Register on January 23rd.  The intent of the upgraded standards will be to improve water quality and reduce pollutants discharges. The EPA is now soliciting comments that are due before March 25, 2024.

 

The standards would apply to egg-packing facilities, meat and poultry processing plants and would address levels of chlorides, phosphorus, nitrogen in waste streams. The rule will mandate pre-treatment and establish production thresholds.

 

In a statement following release of the Federal Register Julie Anna Potts president and CEO of the North American Meat Institute requested an extension.  The Institute challenges the EPA the annual cost of $232 million for implementation.  Knowledgeable experts affiliated to industry consider that EPA has underestimated compliance costs taking into account fixed costs associated with capital expenditure and variable expenses for operation.

 

It is considered ironic that the USDA in an attempt to create an alternative to large-scale efficient meat and poultry processing plants has funded small units with a collective give-away of $1 billion.  The Meat Institute considers that many of these facilities will be forced to close based on non-compliance with the new standards.


 

Government of China Mandating Less Production of Pork

01/25/2024

As a result of injudicious expansion in hog production, and in the face of decreasing consumption producers are experienced losses of up to $10 per hog on average through 2023.  Reuters has disclosed that the Ministry of Agriculture will “guide” (coerce?) lower production.  Due to negative margins, hogs including breeding sows have been sent to processing in large numbers, further disrupting the relationship between supply and demand and reducing prices.  The total herd at the end of 2023 was 434 million head, down 18 million from December 2022.  The sow herd included in the total was down 5.7 percent or 2.5 million head from December 2022 to 41.4 million.

 

The Ministry of Agriculture has also mandated lower protein diets for hogs to restrict the need to import soybeans from both Brazil and the U.S.  At this time, soybean meal is included at 13 percent on average in growing diets down 10 percent from 2022 fo equivalent to an annual reduction of 9 million metric tons of soybeans.

 

In 2023 China produced 58 million metric tons of pork and imported 2.7 million tons. By comparison in 2023, the U.S. industry produced 27,970 million pounds of pork, equivalent to 14.0 million metric tons or approximately 35 percent of the output in China.


 


 

Türkiye to Restrict Transshipment from States With HPAI

01/25/2024

According to USDA-FAS GAIN report TU2024-002, Türkiye will not allow transshipment of poultry products from any U.S. state reporting commercial cases of HPAI.  Authorities in Türkiye will allow discharge of unrestricted containers and transfer of containers between vessels in the same port.

 

This restriction has implications for transshipment of U.S. products from affected states to Iraq and Syria and to central Asia.



 

USDA-AMS Purchases of Chicken

01/22/2024

The USDA Agricultural Marketing Service has announced purchase of 17.7 tons of non-breaded  chicken breast fillets for child nutrition and related food assistance programs.  Product was purchased at an average of $2.31 per pound with deliveries to be made during April through mid-June 2024.

 

Concurrently the USDA Agricultural Marketing Service announced purchase of 78 tons of frozen chicken strips, also for child nutrition and related food assistance programs.  Product was purchased for an average of $1.85 per pound with deliveries to be made over the same period.

 

The two purchases amounted to $379,000.

 


 

John Bean Technologies Offer for Marel Accepted Subject to Board Ratification

01/22/2024

John Bean Technologies Corp. third offer to acquire the ownership of Marel was successfully received. Marel is a leading manufacturer of poultry and fish processing and packaging equipment based in Iceland.  Eyrir Invest that holds a quarter of the shares of Marel has accepted the offer.  Arnar Thor Masson, Chairmen of Marel, stated “Following a period of constructive discussions we have received a revised proposal from JBT to enter into a merger with Marel.  He added, “The Board has carefully assessed the proposal and while it continues to believe in Marel stand-alone strategy, we consider there is compelling logic in the combination for Marel shareholders and its stakeholders.”  The Board is working with JBT on due diligence and finalization of the offer subject to approval by the Boards of both companies and shareholder votes.

 

Brian Deck, CEO of JBT, stated “We look forward to working together on confirmatory due diligence and finalization of the formal voluntary takeover offer on the terms as agreed to.  The enhanced global operating scale of a combined company is expected to generate meaningful operating costs synergies and we anticipate additional synergies from revenue to drive incremental and compelling value creation.”

 

JBT employs over 5,000 in 25 nations with 2023 revenue of $1.6 billion.  Marel employs 8,000 in 30 nations with revenue exceeding $1.9 billion


 

USDA-FSIS Introduces Remote Grading Pilot for Beef

01/22/2024

USDA has announced a pilot program intended to promote the financial viability of small-scale beef processing units.  According to an announcement by USDA Secretary, Tom Vilsack, a remote assessment of quality using a video link would be applied to assign a U.S. grade standard.  A limited feasibility study was conducted in 2023 leading to an extension for the present year. 

 

The initiative is part of the USDA intent to “broaden market access for cattle producers and meat processors since small producers can now offer USDA-graded carcasses that are of higher value”.


 

Rabobank Released from Involvement in Price Collusion Lawsuit

01/21/2024

In 2023, Judge Thomas Durkin of the Federal District Court of the District of North Illinois dismissed Rabobank as a defendant in the class action lawsuit alleging collusion on pricing among broiler integrators.

 

Plaintiffs’ attorneys recognizing the loss of a deep-pocketed defendant in their shake-down litigation appealed to the Federal 7th Circuit Court of Appeals that upheld Durkin.  Accordingly, the plaintiffs appealed to SCOTUS. The Court justifiably denied certiorari resulting in the standing of the decision of 7th Circuit. 

 

Evidence presented to the Illinois District Court failed to demonstrate that Rabobank had in any way participated in alleged acts of collusion or had any knowledge of any coordination among client companies.


 

Salmonella Outbreaks from Charcuterie Meats

01/20/2024

The Centers for Disease Control is currently investigating an outbreak of salmonellosis involving over 50 diagnosed cases through January 1, 2024, in 22 states.  The vehicle of infection has been identified as charcuterie (dried, spiced cold cuts) under the Antipasto Gran Beretta brand produced by Fratelli Beretta Inc. sold at two major warehouse stores.  The current outbreak has resulted in a 25 percent hospitalization rate, but fortunately with no fatalities recorded.

 

The implicated products have been recalled and advisories have been issued to consumers issued to destroy any remaining product.


 

Smithfield Foods Plant Recognized by NC. DEQ

01/20/2024

The Tarheel, NC. pork plant operated by Smithfield Foods has received recognition as a Rising Environmental Steward.  The distinction was awarded by the North Carolina Department of Environmental Quality.

 

It is heartening to read of a participant in the intensive livestock industry that is commended for environmental benefits.  This stands in contrast to the criticism that Smithfield Foods has experienced relating to nuisance from hog waste lagoons.

 

The Tarheel plant was commended for a commitment to exceed environmental regulations over a two-decade period and has been a consistent recipient of awards under the environmental stewardship initiative.  Specific actions taken by Smithfield Foods include installation of a wastewater treatment system that produces renewable gas, powering 2,000 local homes.  The reclaimed water system recirculates one million gallons of water per day and is used for wash-down and other approved ‘grey-water applications.

 

Environmental stewardship extends beyond the Tarheel plant with facilities in Clinton and Wilson, NC., earning NCDEQ designation as Rising Environmental Stewards complying with standards that exceed legal requirements.


 

Albertsons Introduces SELECT® Mix + Prepared Meals

01/17/2024

Albertsons has launched the Signature SELECT® Mix + range of prepared meals.  The center of the plate and side dishes can be cooked together in an oven for about 40 minutes reducing time including vegetable preparation and subsequent clean up. The meal kits feed a family of four.

 

The meals are available with the main course as chicken parmesan, chicken marsala, chicken meatloaf or Italian meatballs.  Sides include a variety of pasta and mashed potatoes with a selection of vegetables.

 

The Mix + Match meals will be marketed under the Albertson’s Signature SELECT® owned-brand that was developed through a program of consolidation and rationalization in 2023.


 

Weather Impacts Production in Affected States

01/17/2024

On January 15th, severe weather prevented USDA inspectors from reporting to the Tyson Foods pork plant in Madison, NE. Accordingly, the plant did not operate eliciting a complaint from Senator Mike Flood (R-NE) who expressed his concern to the USDA-FSIS Administration.  It is self-evident that without USDA-FSIS inspectors, a plant is idle, impacting production, the labor force and affecting the supply chain.

 

News reports also noted that Wayne-Sanderson Farms either suspended shifts or delayed startup in a number of facilities in Texas and Arkansas on January 16th.  Individual shifts were cancelled in Mississippi due to problems encountered with access to the plant by employees under unsafe travel conditions.

 

It is evident that other processors were impacted by inclement weather, affecting catching, feed hauling and plant operations.


 

Proposed JBS SA Listing on NYSE Opposed

01/14/2024

Fifteen Senators have expressed their opposition to a New York Stock Exchange listing by JBS SA.  The bipartisan group including Democrats Elizabeth Warren and Cory Booker and Republicans Marco Rubio and Josh Hawley noted, “approval of the JBS proposed listing will subject U.S. investors to risk from a company with a history of blatant, systemic corruption, and further entrench its monopoly power and embolden its monopoly practices”.

 

The opposition expressed by U.S. legislators is mirrored by a group of Members of Parliament in the United Kingdom who oppose the listing based on “a well documented history of engaging in deforestation, violating human rights, seizing land from  indigenous communities and engaging in monopolistic activities.”

 

At the heart of the opposition is the fact that JBS SA is controlled by J&F Investments owned by the Batista family.  A previous proposal for a listing in 2017 was scuttled by a bribery scandal resulting in a $27 million fine by the SEC. More recently, the Batista brothers negotiated an agreement with judicial authorities in Brazil to renegotiate penalties imposed in response to a prior plea agreement.

 

It appears that in the U.S., most opposition is based on past questionable business ethics.  In the U.K. as well as the U.S. the proposed listing is now opposed on environmental and socioeconomic considerations.

 

JBS SA attained a dominant position in World meat and poultry processing through a program of acquisition that was based on sweetheart loans from the National Development Bank of Brazil facilitated by bribery.  The Company considers that the listing on the NYSE would increase the ability of the company to legitimately raise funds for growth that would enable more branded and value-added production to increase returns for shareholders.

 

JBS SA faces considerable opposition to a listing and will obviously have to demonstrate how unethical practices in the past will not be repeated and that the company will function in accordance with SEC and NYSE regulations.

 


 

Cargill and PSSI Continue Separation

01/14/2024

Following the revelations of child labor used by Packer Sanitation Services Inc. (PSSI) in October 2022, Cargill Inc. and other major packers elected to establish alternatives for cleaning including operating their own services.

 

Cargill is currently in the process of finding new vendors to replace PSSI in 14 facilities. In keeping with tradition, Cargill is tight lipped over the process declining to provide a timeline for the transition or whether vendors or an in-company solution will be implemented.



 

IPPE Guide

01/14/2024

CHICK-NEWS has prepared a Guide to the 2024 IPPE, listing the Booth numbers of exhibiting sponsors with links to their websites. The guide will be E-mailed again on Monday, January 29th. Some recipients of the January 15th mailing reported that the Guide was delivered to their spam boxes, based on security settings. Please check alternative boxes if it was not delivered to your incoming mail on either January 15th or 22nd.


 

Exports of Chicken by Brazil in 2023

01/11/2024

According to the Association of Meat exporters of Brazil (ABPA), during 2023 exports of chicken products attained 5.138 million metric tons valued at $9.79 billion with a unit value of $1,905 per metric ton.

 

Over the first ten months of 2023, the U.S. exported 3.04 million metric tons of broiler products comprising feet to China and leg quarters to diverse nations valued at $3.968 billion with a unit value of $1,306 per metric ton on average.


 

SCOTUS Denies Certiorari in Washington Broiler Litigation

01/11/2024

Defendants in the case involving alleged collusion in pricing applicable to Washington State established an agreement that would have reduced the quantum of damages by spreading liability.  Plaintiffs including Target, Campbell Soup and others claimed that the agreement was unlawful.  In May 2022 U.S. District Judge Thomas Durkin rejected the Plaintiff's challenge and ruled that the agreement did not diminish their ability to claim damages.  Accordingly, Target and other plaintiffs appealed to the 7th Circuit to set aside the ruling. The appeal to consider the order by Judge Durkin was denied on jurisdictional grounds since litigation was ongoing.  The most recent appeal to SCOTUS was denied certiorari presumably on similar grounds.

 

It is noted that the litigation is in part supported by a funder, Burford Capital, ensuring continued and intensive pressure on the Defendants to settle.


 

Kielbasa Sausage Recalled Over Bone Fragments

01/11/2024

SALM Partners has recalled sixty-five tons of ready-to-eat turkey kielbasa sausage.  The USDA FSIS initiated the recall as a result of a mild oral injury caused by a bone fragment together with two other consumer complaints.  Affected product was produced during late October and marketed under the Park View brand Turkey Polska Kielbasa product.

 

The value of sixty-five tons of product would have paid for effective radiographic bone fragment detection equipment.  In addition, the quantity recalled may have been smaller with proportionally lower batch sizes.

 


 

2022 Poultry Imports by China Quantified

01/08/2024

USDA-FAS Gain Report CH2023-0194 released on January 4th quantified the value of poultry imports into China during 2022 at $4.165 billion.  According to the Report, China has removed restrictions relating to routine surveillance for COVID virus creating possible new market opportunities.

 

For the first nine months of 2023, 338,309 tons of U.S. broiler products were shipped to China, valued at $576,346 with an average unit value of $1,704 per metric ton.  Paws and feet represented 67.5 percent of volume and 73.2 percent of value with a unit price of $1,848 per metric ton. 

 

During January through October 2023, exports of all broiler products to China were second in volume among importers but 29.9 percent lower than the corresponding months in 2022 to 372,326 metric tons and 31.2 percent lower in value.  Volume and value of exports to China represented 12.2 percent and 16.3 percent of U.S. exports respectively with an average unit price of $1,732 per metric ton.  The U.S. average price for all exports during January through October 2023 excluding China was $1,246, demonstrating the weighting of the unit value of feet on average export price.

 


 

Upside Foods Failing to Deliver

01/08/2024

A recent article on Upside Foods by staff writers at Bloomberg Business Week noted that the company is absolutely failing to deliver on previously promised volume.  Their existing plant was supposed to produce 50,000 lb. of product annually presuming the use of bioreactors.  Since Upside Foods has not been able to effectively apply large-scale technology, it has no business in proceeding with a far larger factory.  The company has raised in excess of $600 million in venture capital, has obtained U.S. Food and Drug Administration and USDA approval but can only produce one pound of faux chicken per month. 

 

In response to the critical article, Upside Foods admitted to “realities and complexities of doing something that has never been done before”.  The situation with Upside Foods and the debacle at Just Eats should intensify scrutiny of start-ups and established companies intending to produce cell cultured meat. Output of the various forms of beef, chicken and seafood has not apparently progressed beyond pilot plant and roller-bottle production.  The concept of “faking it ‘til you make it” with a whiff of Theranos appears to be wearing thin with VC companies closing their collective purses.

 

The rush by states producing meat to impose label restrictions on cell-cultivated product appears to be premature and in the long run, unnecessary.


 

House of Raeford Agrees to Settle Lawsuit

01/07/2024

House of Raeford Farms has agreed to pay $460,000 to settle a lawsuit filed by the State of Washington alleging manipulation of prices, rigging of contracts and illegal exchange of information.  House of Raeford is the 18th broiler integrator to settle, with the total now $35.7 million and with individual settlements ranging from $290,000 to $11 million.  Sanderson Farms, now a part of Wayne-Sanderson prevailed in a jury trial, although plaintiffs have requested a new trial.


 

Brakebush Brothers Acquires Competitor

01/07/2024

Brakebush Brothers, a food service processor located in Westfield, WI., has acquired Lake Foods of Heartwell, GA.  The company produces marinated and ready-to-cook chicken products.

 

Gregory Huff, President and CEO of Brakebush stated, “we are very enthusiastic about this acquisition, the values, expertise and capabilities of Lake Foods places us in a good position to continue to grow our existing customer base”.


 

USDA-AMS Purchases

01/05/2024

On January 5th, the USDA Agricultural Marketing Service announced purchase of 396 tons of chicken legs for child nutrition and related food assistance programs.  Product was purchased at an average of 57 cents per pound with deliveries to be made during February 2024.

 

Concurrently the USDA Agricultural Marketing Service announced purchase of 8,334 tons of  chilled large chicken in bulk for child nutrition and related food assistance programs.  Product was purchased for an average of $1.44 per pound for whole birds with deliveries to be made during February 2024.

 

The two purchases amounted to $23.9 million.


 

Welfare Organizations Urge Implementation of Proposed Packers and Stockyard Rules

01/04/2024

Approximately seventy organizations representing small-scale farmers, activists, trade unions and environmental groups have addressed a letter to the President urging implementation of “Rules to revitalize the Packers and Stockyards Act as a critical pro-competition law designed to protect family livestock producers from abuse in the marketplace”.

 

The collective groups urge stronger protection for individuals considered to be vulnerable in the marketplace. The letter supported other Administration anti-trust enforcement.  The organizations expressed concern that the Fiscal Year 2024 Agriculture Rule Development and the FDA Appropriations Bill would delay or inhibit USDA action on proposed rules.


 

Rabobank Projections for 2024

01/04/2024

Rabobank, with an extensive staff of analysts, has reviewed trends in the major broiler producing and consuming regions of the world.  Although feed costs are expected to decline, efficiency will be necessary to maintain positive margins.  Disease is the predominant risk along with geopolitical considerations including the ongoing war in Ukraine and uncertainty regarding the Middle East.  

 

  • Moderate expansion is anticipated in the U.S. with a continuing trend towards domestic consumption of wings and legs but with a proportional decline in breast meat resulting in accumulation of stock.  Exports to Mexico and Cuba will continue but China will decline as a significant importer of U.S. products. 
  • Chicken production and consumption in the E.U. will persist with increased exports from Ukraine moderating prices. 
  • China will undergo fluctuation in demand based on the macroeconomic situation.  Disease and domestic demand will be important considerations in China.
  • Brazil will see a 4 to 5 percent increase in output with strong exports to China and new markets in Africa as occasioned by HPAI.  Producers will benefit from lower feed costs associated with bountiful harvests of both corn and soybeans due to favorable weather conditions.
  • Thailand will experience over production despite high exports.
  • Japan will undergo a contraction in consumption, especially in the food service sector.  Rabobank considers that demand will be influenced by price, again a result of a persistently weak Yen limiting imports.

 

KFC Resumes Sale of Chicken Wraps

01/04/2024

Kentucky Fried Chicken has introduced Honey BBQ and Spicy Mac ‘n Cheese wraps offered at 2-for-$5 in January.  The offer is subject to a downloaded coupon through the KFC app.  Most KFC locations now offer Quick Pick Up using KFC.com or the KFC app to order ahead.


 

Marfrig Global Foods S.A. Acquires Majority Equity in BRF S.A.

01/04/2024

Following the purchase of a quarter of the equity of BRF in May 2021, Marfrig has increased its stake in the company successfully through share purchases since 2021 with a 20 percent holding in September 2023 raising the stake to 40 percent and with the latest round attaining 50.1 percent.

 

This action in large measure establishes the intended, but never concluded, merger that was negotiated in 2019. Currently Marcos Antonio Molina dos Santos serves as Chairman of both companies. The extent of integration going forward has not been defined but the Marfrig stated intent for the companies to operate separately sacrifices the benefits of synergy.

 


 

Trucking Issues to be Resolved in 2024

01/01/2024

The poultry meat industry is heavily dependent on road transport for ingredients and finished product.  Although some companies operate their own fleets, there is considerable reliance on the trucking industry for inputs and distribution.

 

Government regulations impact both efficiency and profitability and the important issues to be confronted in 2024 include:

 

  • A proposed rule requiring a distinction between independent contractors and employees.  Trucking companies will be required to prove that drivers are in fact independent contractors and not functioning as workers but under a differential designation.

 

  • The Environmental Protection Agency is expected to issue upgraded emission standards for heavy-duty vehicles beginning in 2027.  The Administration tilt is towards electric- powered semis that will add to capital cost.

 

  • It is evident that there is a shortage of truck parking.  The Administration intends spending $755 million in grants for this purpose although appropriations are currently in limbo in Congress.

 

  • The Federal Motor Carrier Safety Administration is delaying action on broker transparency.  Despite petitions for a rule filed in 2020 by the Owner-Operator Independent Drivers Association, the FMCSA has yet to deliver on a promise of a rule by June of 2023 and has pushed back the agenda to October 2024. This has resulted in considerable frustration and financial loss among independent owner-operators.

 

  • The proposed compliance, safety and accountability (CSA) measurements system has yet to be finalized by the FMCSA.  The final CSA will include crash preventability determination and a database.  Other aspects of safety include speed limits, automatic emergency braking and the possible introduction of automated driving systems.

 

  • Guidelines have yet to be established for the use of drugs including hair sampling as an alternative to body fluids. 

It is evident that rulemaking moves at a slow pace especially with contention among the stakeholders, intense lobbying, inactivity by Congress and the approaching General Election.


 

USDA Funds Halal Meat Cooperative in Maine

01/01/2024

A cooperative in Maine will receive a $65,000 rural business development grant from the   USDA.  The intent is to conduct a market and feasibility study, provide training and technical assistance and assist producers to meet processing schedules.  The grant will also provide business advice on pricing and marketing.

 

The cooperative will be centered on Five Pillars Butchery a family-owned company providing halal meat in Unity, ME. The project will involve fifteen farmers many of whom comprise “indigenous and other people of color, new farmers and a cooperative of Somali women.”

 

If the funds are applied in accordance with sound business principles the $65,000 rural business development grant will represent seed money.  Future financing for this project should be provided by commercial lending institutions that will apply conventional criteria to establish the ability of the enterprise to service loans.

 

Would it be too much to expect that USDA will provide a subsequent accounting of the grant and progress of the proposed cooperative to achieve financial viability.


 

Chicken Run Sequel Movie Demonizes Broiler Production

12/31/2023

Twenty-two years ago, producers in the U.K. released Chicken Run.  This anthropomorphic full-length cartoon was extensively viewed and became a cult classic. The influence of the movie in degrading the image of commercial poultry production was evident. The reviewer of the newly-released sequel, Chicken Run: Dawn of the Nugget admits that the movie was a factor in becoming a vegan. Obviously, a movie such as Chicken Run with images of shackles, and a rotary knife (but no stunning), will make an impression on a young mind and generate negative attitudes towards consumption of red meat and poultry.

 

The successor movie is also heavy on sentiment and provides an unrealistic and negative image of the industry in addition to the theme that indirectly encourages violent opposition to production in the style of Direct Action Everywhere.  The dialogue deviates into pre-slaughter fear and its effect on meat quality.

 

The Chicken Run movies are less entertainment than they are pro-vegan propaganda. In the opinion of the reviewer of the movie, those involved in writing the script included too many subplots that serve as a distraction.  Despite the vegan proclivities of the reviewer, the movie “leaves a lot to be desired”.  Hopefully, Chicken Run: Dawn of the Nugget will have a short run and will be soon forgotten.


 

Pure Prairie Poultry Expanding

12/31/2023

According to press reports, Pure Prairie Poultry located in Charles City, IA. will expand production requiring an expansion of the plant and a doubling of the head count to 100.  In the coming year the Company will add warehouse and distribution space to extend the product line comprising WOGs and portions. The Company includes growers in Iowa and adjoining regions of Wisconsin and Minnesota as shareholders. All product is claimed to be antibiotic-free with birds raised on vegetarian diets.

 

Pure Prairie Poultry extensively refurbished an abandoned plant in Charles City in 2022 aided by a $40 million federal grant allowing installation of air chilling and modern equipment. 

 

The facility previously had a checkered past, operating under the Simply Essentials brand and as a hen plant that proved unprofitable.


 

USDA to Implement “Contract Transparency” Program

12/31/2023

Despite questions raised by the Congressional Chicken Caucus the “Transparency in Poultry Grower Contracting and Tournaments Rule” will be implemented in 2024 as planned.  The Rule will represent an update of existing requirements under the Packers and Stockyards Act.

 

Tom Vilsack USDA Secretary stated, “The program will move forward as planned in February 2024.”  He added, “It is not as if what is being asked is particularly onerous.”

 

Twenty members of Congress requested a 180-day extension of the period before implementing the Rule noting the potential for confusion and the need to re-draft contracts leading to disruption and inconsistency in compliance.

 

Notwithstanding arguments for a delay, USDA is intent on implementing this and possibly other rules that cut to the heart of the integrator-contractor relationship.  Could it be that USDA recognizes that it has limited tenure and that a subsequent administration may rescind hastily enacted or pending rules as in 2017?



 

Russia Considering Banning Transit of U.S. Chicken to Kazakhstan

12/31/2023

In an exercise of regulatory cynicism, the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) is considering a ban on transit of processed poultry from the U.S. through Russian territory to Kazakhstan.  The proposed ban is apparently justified by outbreaks of highly pathogenic avian influenza in the U.S.

 

U.S. exports to Kazakhstan attained 80,316 metric tons during 2021 falling 40 percent to 47,900 metric tons in 2022 and was under 15,000 tons in 2023 through October.

 

The Russian Agency is also apparently concerned over high mortality in marine mammals on both the Pacific and Atlantic seaboards of South America that may result in action against Argentina and Brazil.

 

Banning trans-shipment of sealed containers of U.S. poultry emanating from plants in counties devoid of HPAI will not have any effect on the disease status of flocks in the Russian Federation.  Their action is somewhat analogous to the unjustified U.S. banning of poultry products from France based on the deployment of vaccine against avian influenza. 

 

Both the Russian Federation and the U.S. are equally susceptible to introduction of HPAI virus disseminated by migratory birds.  Bans such as those proposed by the Russian Federation are based on xenophobia, epidemiologic ignorance, competition, geopolitics or their combination.

 


 

Tyson Foods a Target of Cyberattack

12/31/2023

According to press reports, Tyson Foods was the victim of a cyberattack in November perpetrated by “Snatch”. It is apparent that this group of cyber-criminals infiltrated Tyson systems since they were able to publish confidential information relating to Tyson executives. “Snatch” is under investigation by the Cyber Security and Infrastructure Security Agency (CSISA) and the Federal Bureau of Investigation.  The criminal group engages in ransomware extortion and exfiltration of data.

 

In March 2023, JBS SA was subjected to a devastating cyberattack that disrupted company operations and resulted in a payment of $11 million in ransom to REvil based in the Russian Federation. JBS was apparently susceptible to cyberattack based on the evaluation of specialists who commented on the deficiencies in protection installed by the company.  JBS was infected with malware including Conficker and was apparently slow to remedy a number of issues.

 

The CSISA, a division of the Department of Homeland Security (DHS), has previously warned the food and agriculture industries to upgrade their protection.  These industries are designated as a Critical Infrastructure Sector by DHS based on the fact that incapacitation “would have a debilitating effect on national economic security, public health and safety”.

 

In 2022, Congress established the Joint Ransomware Task Force following the Colonial Pipeline hack.  This Agency operates in collaboration with the FBI and DHS.  The Joint Cyber Defense Collaborative is a public-private entity that disseminates information on cyber threats and provides advice on security.


 

Circumstances of the Death of a Minor at Mar-Jac Facility Under Investigation

12/29/2023

During July 2023 a 16-year-old worker, Duvan Perez, died from injuries sustained while cleaning equipment at a Hattiesburg, MS. plant owned and operated by Mar-Jac Poultry. The company stated that the minor was hired through a contractor to participate in cleaning operations with his age and identity misrepresented.

 

Perez apparently used the documentation of a 32-year-old man, according to an attorney representing the Company.  The legal representative noted that the company was “surprised to find out that Perez was just 16 years old”.  It is difficult to believe that on reviewing his documentation, neither management in HR nor supervisors in the plant could have differentiated between a 16-year-old teenager and a 32-year-old mature man.  Mar-Jac has a questionable history with regard to employment of alien workers using false identification. How did E-verify fail in this case?

 

 The incident is under investigation by OSHA and given the allegations, the Department of Homeland Security will become involved.  Previously, courts have ruled that using a labor contractor does not absolve poultry processors and red meat packers from their responsibilities with respect to Federal laws under the jurisdiction of the Department of Homeland Security and the Department of Labor, OSHA regulations.


 

USDA Extends Operation of High-Speed Lines for Hogs

12/29/2023

The FSIS-New Swine Inspection System (NSIS) allows higher than conventional line speeds in six hog plants. After two years the USDA has agreed to extend the trial for an additional 90-days to gather data. It is estimated that collectively 40 percent of the Nation’s hogs are within 100 miles of one of the six plants operating under the NSIS.

 

High-speed slaughter facilitated through the NSIS has improved efficiency and reduced cost of packing.  In a competitive market, savings are generally passed on to consumers. Following litigation a Federal district court capped line speed at 1,106 head per hour in 2021. In practice with suitable equipment this rate can be exceeded without compromising either worker welfare of food safety

 

Enhanced line speeds are vigorously opposed by both worker’s unions and animal welfare activists. These entities are following their specific parochial interests.  Unions are concerned over maximizing head-count and membership.  Animal Rights Activists will use any issue including food safety to reduce the profitability and strength of intensive livestock production, irrespective of the outcome or cost to stakeholders.


 

Cargill Commits to Preventing Deforestation in Supply Chain

12/29/2023

Cargill announced that it will intensify efforts to eliminate deforestation and to support land conservation in both direct and indirect supply chains. This has specific reference to South American countries including Brazil. The initiative will be completed within five years. 

 

Cargill is a frequent target of environmentalists for making promises that are not consistently fulfilled. The latest commitment does appear to be significant given the influence of the company and its importance in world markets—but five years?


 

OSHA Penalties Against Mar-Jac Poultry Upheld

12/29/2023

Judge Sharon D. Calhoun, an Administrative Law Judge, confirmed penalties imposed by OSHA against Mar-Jac Poultry arising from a fatality at the Hattiesburg, MS plant in 2021.  In this case, a night shift worker was killed after entanglement while cleaning an eviscerator.  The Court supported the findings of OSHA that there was inadequate protective guarding around the machine and that the company was liable despite the fact that the decedent was inebriated.  The 2021 case followed a previous fatality in the plant during late 2020.  Penalties of $13,000 were imposed for each of the deaths.

 

It would appear that Mar-Jac has a problem in its plant given that a 16-year-old boy died recently from injuries sustained during cleaning.  The Department of Labor and the Department of Justice are investigating human trafficking and employment of minors in hazardous situations in the meatpacking and poultry industries. Both civil and criminal cases are anticipated as a result of this series of possibly avoidable deaths in the Mar-Jac plant.


 

FSIS Appoints Chief Scientist

12/28/2023

Dr. Michelle Catlin will serve as the Chief Scientist for the Food Safety and Inspection Service.  In her new position she will be the principal scientific advisor on aspects of public health and food safety, focusing on scientific initiatives within the Office of Public Health Science.

 

Since 2004 Dr. Catlin has served in various FSIS positions including Senior Scientist and as the International Coordination Executive with responsibility for global activities.

 

Margaret Burns-Rath an attorney with a degree in public health, presently Deputy Assistant Administrator for the Office of International Coordination, will assume the role of Acting International Coordination Executive replacing Dr. Catlin.


 

Bad News for the Birkenstock Set

12/28/2023

Affluent, environmentally conscious consumers who purchase beef are attracted to advertised “grass-fed” product in high-end supermarkets despite a higher cost compared to conventional beef. Claims for sustainability and higher levels of environmental compliance are unsubstantiated. A recent study by the Breakthrough Institute has disclosed that pasture-finished beef is less sustainable and has a higher carbon footprint compared to conventional grain-finished beef held in feedlots.  The findings of economists Daniel Blaustein-Rejto were published on December 13th with results from 100 beef operations in sixteen nations. 

 

It was demonstrated that pasture-finished operations produced 20 percent more greenhouse gases than grain-finished beef animals.  With soil carbon sequestration and carbon opportunity cost incorporated in the comparison, pasture-finished operations produce 42 percent more carbon dioxide equivalent with the differential attributed to the impact of land use.

 

It is noted that the demand for extensive grazing is a major driver for deforestation in Brazil.  Rainforest that is illegally logged and clear cut in various states including Rondônia is used to graze cattle that enter the beef supply through a complicated and often fraudulent system of identification of farms of origin to circumvent an imperfect systems of tracing.

 


 

Plaintiffs Will Request a Retrial Following Sanderson Farms Verdict

12/28/2023

In October, Sanderson Farms, now Wayne-Sanderson Farms declined to settle with the Department of Justice over alleged collusion through use of a benchmarking cost system.  In a six-week trial, it was determined that Sanderson Farms did not conspire to fix chicken prices.

 

The Plaintiffs will now request a new trial.  This is based on the contention that the defense presented by Sanderson with respect to economic data was inadequate to support their case. The Plaintiffs also advance the contention that circumstantial evidence including allegations of collusion and trade association meetings and private communications as discovered suggested a conspiracy.  The Plaintiffs also maintain that alleged errors made by the Court during the summary judgment decision, warranting a new trial.

 

As far as the lawyers are concerned, the integrator collusion cases represent a gift that keeps on giving.


 

Greenridge Farms Penalized for Labor Violations

12/26/2023

Following investigations by the U.S. Department of Labor and the Illinois Office of the Attorney General, Greenridge Farms Inc. located in Elk Grove, IL. has entered into a consent agreement authorized by the Cook County Circuit Court, effective December 20th. Greenridge Farms processes meat and poultry for delicatessens including smoked chicken and sausages and meat sticks.

 

The investigation centered on overtime wages that were withheld from workers over the period 2013-2022.  In accordance with the consent decree, Greenridge will pay $3 million in installments through 2025.  Based on federal law, employees are eligible to recover 2.5 times owed wages. 

 

This case is yet another in a series investigated by the Department of Labor in an aggressive program leading to penalties and mandated back pay for workers subjected to evident and concerted wage theft.


 

USPOULTRY Recruiting Grant to Delaware Valley University

12/26/2023

The USPOULTRY Foundation has awarded a student-recruiting grant to Delaware Valley University.  Students in the Poultry Science Program at DVU have the opportunity to acquire hands-on experience with northeast poultry companies including Perdue Farms that employs many alumni of the University.

 

In 2023, the USPOULTRY Foundation awarded recruiting grants close to $300,000 among twenty-six colleges and universities.

 

 

Most of the funding is derived from proceeds from the International Poultry Expo and from donations provided by members of USPOULTRY.



 

Happy New Year!

12/25/2023

As we transition from a turbulent 2023 we wish our Subscribers and sponsors a productive and more peaceful coming year

 

Our hopes for 2024 are:

 

  • An end to the current wave of HPAI and a more rational approach to protection of flocks in high-risk areas by adoption of vaccination to supplement biosecurity.
  • A reversal of USDA and EPA policies to place intensive livestock production at a disadvantage. Proposed new rules under the Packers and Stockyards act and to limit pollution from waste discharges should be reconsidered with respect to objectives, economic impact and implementation
  • Continued improvement in the economy with an anticipated ‘soft landing”
  • Resolution of Congressional deadlock through bipartisanship, allowing passage of appropriations bills, evolution of a practical immigration and border entry policy and reducing unnecessary and wasteful spending.
  • Restoration of peace in conflict areas to alleviate suffering

 

The EGG-NEWS and CHICK-NEWS Team wish you a successful and profitable 2024.

 

Barbara and I look forward to renewing our friendship at the IPPE


 

Chick-fil-A Dominates Chicken Sandwich Market

12/23/2023

According to research conducted by Barclays Bank, Chick-fil-A dominates QSR chicken sales with 45 percent of the market through 3,000 stores.  Popeye’s ranks second with 12 percent of the market with 1,000 stores.  KFC has dropped to third place with 11 percent of the market.  Companies with single digit shares include Raising Caine’s at 8 percent, Wing Stop with 7 percent, Zaxby’s at 6 percent and Bojangle’s last among the leaders with 4 percent.

 

Despite a relatively limited menu, Chick-fil-A franchise stores generate on average $8.7 million in sales over a six-day week.  This compares to $3.7 million for an average McDonald’s restaurant with a wider menu offered at 14,000 U.S. locations.

 

Chick-fil-A was launched in 1967 in the Greenbrier Shopping Center. Founder S. Truett Cathy who invented the fillet sandwich established the Dwarf House restaurant in Hapeville, GA. during 1947 with his brother Sam, pooling their demobilization grants. Their original customers were workers at a near by Ford assembly plant.

 

The success of Chick-fil-A is attributed to consistent high quality, rapid service through drive-thru lanes, attractive in-store dining with frequent but subtle changes in menus to respond to season and local tastes.  The quality of service and interaction with workers contributes to customer satisfaction and is based in part on the franchise model and corporate philosophy.  As a family-owned and controlled enterprise, Chick-fil-A is not beholden to institutional or private shareholders and can embark on programs and reinvest earnings on company expansion, employee benefits and philanthropy without the need to distribute dividends and the restraints and scrutiny experienced by public companies.


 

Triumph Foods Undertaking In-Company Cleaning and Sanitation

12/23/2023

According to the Missouri Department of Economic Development, Triumph Foods will expand head count in the St. Joseph, MO. pork plant.  An additional 88 positions will be designated for cleaning and sanitation to be undertaken in-company, displacing contractor workers.  The St. Joseph plant produces 1.5 billion pounds of pork annually equivalent to 5.5 percent of U.S. output i. 

 

The action taken by Triumph follows the initiative of JBS, USA that operates a company food safety and food sanitation business after displacing Packers’ Sanitation Services.  The move towards in-company operations was in part stimulated by negative publicity following disclosure of the employment of minors and ineligible foreign workers in cleaning crews recruited by sub-contractors.

 

The action taken by Triumph Foods was supported by UFCW Local 2 and the project has received incentives from the State of Missouri based on expanding the workforce.


 

Proposed EPA Rule on Plant Effluent

12/22/2023

The U.S. Environmental Protection Agency (EPA) has proposed a Rule to reduce pollutants including organic material, phosphorus and ammonia from plant effluent.  The rule would establish limits for nitrogen, phosphorus, oil, total suspended solids and biochemical oxygen demand. 

 

The proposed rule would in all probability affect 850 meat and poultry products (MPP) facilities in the U.S.

 

EPA is soliciting comments on reducing pollution including higher pretreatment standards for nitrogen and phosphorus and segregation of high-salt waste streams.  A series of public hearings are scheduled to consider the rule during January 2024.


 

Turkey Month

12/22/2023

Monthly Turkey Production and Prices, December 24th 2023

 

Poult Production and Placement:

 

The December 13th 2023 edition of the USDA Turkey Hatchery Report, issued monthly, documented 25.56 million eggs in incubators on December 1st 2023 compared to 25.60 million eggs on December 1st 2022* The December 2023 set was down 3.9 percent (1.04 million eggs) from December 2022 and 19,000 eggs (<0.1 percent) more than the previous month of November 2023.

 

A total of 21.85 million poults were hatched during November 2023 down 1.07 million poults (4.7 percent) compared to 22.62 million in November 2022*. The November 2023 hatch was down 1.12 million poults (4.9 percent) from the previous month of October 2023.


 

IPPE Remote Bus Service

12/22/2023

As in previous years, a free bus service for field personnel will be available for the 2024 International Production and Processing Expo.  The Members to Atlanta Program will provide complimentary registration and transport from designated location to and from the Expo within a 3-hour drive from Atlanta.

 

The 2024 IPPE will be held from January 30th through February 1st and will have an expanded trade show floor extending over 615,000 square feet, TECHtalks, a New Product Showcase and an extensive educational program.

 

To arrange transport using the program, contact Benjamin Starkey at bstarkey@uspoultry.org.


 

Legislation Banning Cultured Meat Considered in France

12/21/2023

The minority French Republican party has proposed a bill in the National Assembly that would ban production and sale of cell-cultured meat in the nation.  The justification is based on “French tradition that views food as a cultural and social reality”.

 

The proposed legislation follows passage of a ban in Italy enacted in November.  Bills banning a specific food product will not be recognized by the E.U. and action in Italy and presumably France are essentially token exercises in “feel good” legislation.

 

Members of legislative bodies should probably not be too concerned over the apparent threat of cell-cultured meat displacing conventional product. None of the aspirant manufacturers have produced commercial quantities of cell-cultured product despite investment in startups of close to $3 billion collectively over ten years.


 

SEC to Dismantle Cattle Marketing Scam

12/21/2023

The U.S. Securities and Exchange Commission has applied to the U.S. District Court for the Northern District of Texas for an injunction against Agridime, LLC and its owners who are accused of operating a $200 million Ponzi scheme based on cattle.  The SEC alleges that the perpetrators diverted millions of dollars of investors’ funds in the form of sales commissions.  The SEC is seeking an injunction against the Defendants who have violated fraud and security laws.  The SEC is seeking civil penalties and disgorgement of proceeds.

 

As with many fraudulent schemes, investors were offered high returns of 15 to 30 percent with the company entrapping as many as 2,000 investors among 15 states.  The scheme as pitched involved purchase of cattle and feed that would be raised and sold to generate profits.  In the event there were insufficient cattle and inadequate margins to support the operation. Over the past two years, it is alleged that the Defendants used new investor funds to pay initial investors representing a classic Ponzi scheme.


 

Courts Support FSIS New Swine Inspection System

12/21/2023

The New Swine Inspection System (NSIS) was introduced to enhance plant efficiency, reduce costs and enhance food safety. Predictably, the NSIS introduced as a pilot program was opposed by unions and animal welfare organizations including Farm Sanctuary, Animal Equity, the Animal Legal Defense Fund, Mercy for Animals and others that are basically intent on dismembering intensive livestock production.

 

Plaintiffs maintained that the NSIS violated the Federal Meat Inspection Act and also the Humane Methods of Slaughter Act.  A second argument was that the FSIS was abrogating responsibility for inspection to processors.  It was also claimed that the FSIS acted “arbitrarily and capriciously in establishing the pilot program”.

 

 

Chief Judge, Elizabeth Wolford of the Western District of New York rejected the contentions of the Plaintiff and ruled in favor of the Agency. Her ruling included “Simply because Plaintiffs disagree with the adoption of the NSIS based on animal welfare concerns does not make Defendants’ adopting of the Final Rule arbitrary and capricious.”  Judge Wolford continued, “It is clear to the Court that Defendants considered this issue in connection with the promulgating the Final Rule including by responding to comments raising animal welfare concerns.”

 

The program was initiated in 2019 but was subject to challenge in March 2021 when a court order from a Minnesota District Court vacated the NSIS line speed and limited throughput to 1,106 head per hour.  A time limit trial was initiated in November 2021 to collect data and evaluate the impact of increased line speed on plant employees.

 

Currently six plants operate in accordance with the time-limited trial under the NSIS and will continue for a 90-day period after which data will be evaluated.


 

Agricultural Organizations Promoting Revision of Packers and Stockyards Act Rule

12/19/2023

Approximately fifty organizations supporting aspects of agriculture have urged the White House to expedite finalization of rules under the Packers and Stockyards Act.  Organizations requesting expedited progress include American Grass Fed Association, National Farmers Union, R-CALF-USA and the United Food and Commercial Workers International Union.  The concern of these organizations is that with the delay in passage of the 2023 Farm Bill that incorporates provisions included in a House version would effectively preclude the USDA from implementing the revised Rule as published in the November 28th edition of the Federal Register.

 

At issue are requirements relating to broiler and turkey contractors that are regarded as “unnecessary and burdensome” as characterized by the National Chicken Council.  The Unions and the narrow segment of the agricultural sector urging passage of the Rule claim that additional protection should be afforded to contractors without any justification based on either practical or financial considerations.  Economic studies have demonstrated that contract growers enjoy higher income than farmers operating row crop and livestock activities on similar acreage.  There is currently a waiting list for contracts among aspirant growers suggesting that additional restrictions and restraints to “promote transparency” are unnecessary.


 

Hybrid Turkeys Celebrates 1,000th Hatch at Beresford SD.

12/18/2023



On December 5th, the Beresford, SD. hatchery of Hybrid Turkeys recorded the 1,000th hatch since inauguration in 2018.  Erected at a cost of $25 million the then state-of–the-art facility extended over 28,000 ft2 and was equipped with Petersime incubators and modern automation with an annual setting capacity of 35 million eggs. 

 

In a statement commemorating the milestone, the Company thanked the workforce at the facility for a positive attitude and an unwavering commitment to quality.  The Beresford Hatchery is regarded as an important link in the U.S. value chain for turkey production.


 

Arkansas Denies Compensation to Growers and Stakeholders in Cooks Venture

12/18/2023

Following the precipitous closure of Cooks Venture, State Senator Bryan King requested compensation for workers, growers, feed suppliers and others impacted by the closure of Cooks Venture.

 

In response, Secretary of Agriculture, Wes Ward, replied “The proper role of Government does not include state assumption of private debts”.  He added, “The State Government cannot assume responsibility for a company in the event of financial distress.”

 

Traditionally, contract growers have been isolated from the risks associated with chicken production.  Losses due to disease, decline in market demand, trade embargos, competition and escalation in feed cost have been borne by integrators.  Given the economies of scale in both production and the marketplace, large companies are able to withstand seasonal or temporary adversities.  In contrast, startups and small companies without adequate resources and reserves fail when confronted with operational or marketing setbacks. Cooks Venture in any event had an inappropriate business model attempting to sell direct to consumers, attempting to bypass retail distribution.

 

The collapse of Cooks Venture and its fallout should be a lesson to Secretary of Agriculture, Tom Vilsack, who is intent on dismantling intensive livestock production by overt opposition to major packers and broiler integrators. This is evidenced by issuing new restrictions in proposed regulations under the Stockyard and Packers Act.  By expending public funds to promote startups and small local establishments, the policy of the current USDA flies in the face of agro-economic reality.  Efficiency through scale of operation is beneficial for all stakeholders as demonstrated by the higher income of broiler contractors compared to independent farmers operating row-crops and cattle on restricted acreage.

 

It is doubtful whether the USDA, and by extension taxpayers, will see a tangible return on the so-called “investments” in financially nonviable enterprises promoted by the USDA in their misdirected attempts to “reform the livestock industry” and to redress past inconsistencies and discrimination in agricultural policy.


 

Aviagen Inaugurates Hatchery in Longview, TX.

12/18/2023

Aviagen has inaugurated their ninth U.S. hatchery and the first in the state of Texas.  The new facility was officially opened on December 14th in the presence of state and local officials.

The location was selected on the basis of being remote from centers of commercial poultry, but with proximity to regional and international airports.  Biosecurity was a major consideration in the location and design of the hatchery and its equipment.  The hatchery incorporates high levels of automation contributing to efficiency, welfare and chick quality.  Consistent with current trends, the hatchery includes a number of significant innovations to reduce energy consumption.

 

Dr. Marc DeBeer, President of Aviagen North America noted, “we are proud to introduce our Longview hatchery in response to the increasing demand for quality breeding stock that will serve as a sustainable food source”.


 

Cherokee Meat Company Receives $10 Million USDA Grant

12/17/2023

The 1839 Cherokee Meat Company recently received two grants amounting to $10 million from the USDA.  The company operates a 1,200 square foot state-certified meat processing plant handling cattle, bison, elk, lamb, pork and deer.

 

The plant employs eleven, predominantly citizens of the Cherokee Nation.  Given previous grants to the company and the most recent $10 million tranche, the investment is over $1 million per employee.

 

Chuck Hoskin, Cherokee Nation Principal Chief stated, “ensuring food sovereignty and access to good nutritious protein is key to the long-term health of the Cherokee people”.


 

Center for the Environment and Welfare Initiates Campaign Against Cell-Cultured Meat

12/14/2023

The Center for the Environment and Welfare (CEW), operated by the Berman Group has announced a television commercial purportedly to “educate the public about the technology behind lab-grown meat”.  The campaign will counter optimistic and unrealistic hype appearing in mainstream media promoting the claimed environmental, sustainability and welfare advantages of cell-cultured meat.  The negative message that has been “seeded” in the CEW infomercial includes the term “immortalized cells” This mischaracterization in the advertisement is intended to associate cell lines used to propagate cultivated meat with tumor cells.  This is absolute sophistry but will probably stick over the long term. The approach is similar to the false and unsubstantiated claims of deleterious health effects made by opponents of GMO technology for corn and soybeans.

 

The FDA for better or worse has approved the principle of lab cultured meat with little justification and minimal resources to control safety and wholesomeness in conjunction with the USDA FSIS.

 

The problem confronting aspirant manufacturers of cell-cultured meat is to successfully scale up from laboratory and pilot plant level to commercial production.  CHICK-NEWS has previously commented on the smoke-and-mirror tactics and deception used by start-ups and some longer established operators. They appear to be following the Silicon Valley dictum of “fake it till you make it”. These enterprises in company with the obvious flim-flam operators all have in common an unsatiable need for venture capital investment.

 

Even if manufacturers are able to reduce the price of product close to that of real meat, it is projected that there will be an initial curiosity-driven demand that will soon evaporate, given the abundant availability and relatively low cost of real beef, pork and chicken.  With a small price differential, an affluent and overtly health and environmentally conscious minority may wish to support cell-cultured meat through non-traditional channels and in gourmet restaurants.

 

It is unclear why the Center for the Environment and Welfare are launching a preemptive negative publicity campaign at this time other than requests from  concerned clients. Given the current state of development, investment in counter publicity may be unnecessary given that cell-cultured meat is and will remain a promise with its future behind it. Looking beyond the hype, cell cultured meat is regarded as an expensive figurative ‘nothing burger’ without the bun and pickle.


 

Repeat Violations of Safety Standards Results in Substantial Penalties

12/14/2023

The Occupational Safety and Health Administration (OSHA) has proposed a $242,000 fine following investigations and audits prompted by two accidents resulting in amputation of fingers. Zwanenberg Food Group a U.S. subsidiary of a holding company in the Netherlands operates 12 plants in the U.S., the U.K. and their home country.

 

OSHA assessed penalties amounting to $1.9 million against the Company in April relating to previous injuries to a worker in October 2022.  Zwanenberg was placed into the Severe Violator Enforcement Program in 2017 due to repeated safety incidents.  Injuries have occurred as a result of failure to follow lock-out procedures and to place protective guards over machinery.

 

Neglect of safety is inhumane, bad business and given the recent action by OSHA, ultimately expensive.  The apparent problem is the lack of protective guards, training and supervision. The real problem is that management is indifferent to worker safety.  Fortunately, Zwanenberg Food Group appears to be an outlier among U.S. food processers.


 

Smithfield Foods Denied H-2B Visas

12/11/2023

The Department of Labor (DOL) has rejected requests from Smithfield Foods for foreign labor certification to receive H-2B visas for intended foreign employees.  Smithfield applied for 29 “general production- meat processors” positions extending from the third quarter of 2023 through mid-2024.

 

The Department of Labor characterized the Smithfield application as “deficient” based on the differences between requested periods and peak loads as indicated by sales.

 

The takeaway message from the decision by the DOL to deny the application is that companies must base documentation on supportable data relating to projected production levels and required headcount.  H-2B visas are issued only for temporary needs and do not allow the use of temporary foreign workers to displace U. S. workers while offering non-competitive wages and benefits.

 

It is ironic that Smithfield is applying for H-2B visas while closing a plant near Charlotte, NC., reducing headcount in breeding facilities in Missouri and cancelling grow-out contracts in Utah. Is there a deficiency in coordination or communication within the Company?


 

Undercooked Product Recalled

12/11/2023

On December 7th, one of the ‘Top-5” broiler producers recalled 1,400 lbs. of Ready-To-Eat (R-T-E) chicken breast products.  According to USDA-FSIS, the product was undercooked.

 

The recall was initiated following customer complaints based on the appearance of the product. Surely temperatures for each batch of cooked R-T-E should be monitored as part of an HACCP process.  Effectively, the company concerned was using consumers’ organoleptic observations as their Critical Control Point.

 

Although there have been no reports of adverse effects, this single case represents what may be an ongoing plant or even industry problem.  It is hoped that this event is a learning opportunity and that not only the implicated plant, but other facilities will reevaluate HACCP programs especially in relation to temperature and duration of cooking to ensure that products that are shipped are wholesome.


 

Smithfield Foods Ending Contracts in Utah

12/11/2023

In a December 5th announcement, Smithfield Foods stated that it would end contracts with 26 hog farms in Utah.  The decision was based on declining domestic and export demand and lower margins.

 

Shane Smith, president and CEO of Smithfield Foods, a wholly-owned subsidiary of the WH Group of China stated, “our industry and company are experiencing historically challenging hog production and market conditions.  The cancellation of grower contracts will also result in contraction in head count with up to 210 employees in the Utah operations becoming redundant”. Smith added, “This action has included re-balancing production with East Coast harvest capacity, through reducing our sow herd in Missouri and closing finishing operations in Utah”.

 

In recent weeks the Olymel Cooperative in Canada announced a consolidation program including a reduction in output


 

FSNS Lab Proficiency Test Packages

12/07/2023

Food Safety Net Services (FSNS) offers Proficiency Testing for in-house laboratory accreditation to meet GFSI-benchmark certification requirements and to strengthen the company QC program. 

 

Packages Offered:

  • Quantitative Microbiology (Aerobic Plate Count, Staphylococcus aureus Count, Generic E. coli Count, Coliform Count, Yeast Count, Mold Count)
  • Qualitative Microbiology (Listeria spp., Listeria monocytogenesSalmonellaE. coli O157:H7)
  • Supplemental Microbiology (Lactic Acid Bacteria Count, Enterobacteriaceae Count, Anaerobic Plate Count, Psychrotrophic Plate Count, Pseudomonas aeruginosaBacillus cereusCampylobacter spp., Clostridium perfringens)
  • Quantitative Chemistry (Fat, Moisture, Protein, Salt, Sodium, Water Activity, pH)
  • Custom Options (contact us for details)

 

Elevate the proficiency of in-Company laboratories through the 2024 Proficiency Testing program from FSNS.

 

FSNS is a Certified Group Company offering a full range of laboratory services in microbiology, nutrient assay, education and auditing for the food and livestock industries.

 

For technical information and pricing access info@FSNS.com or phone (888) 525-9788


 

Bio-Chek Presents IB Informational Seminar at IPPE

12/06/2023

Dr. Brian Jordan of the University of Georgia Departments of Poultry Science and Population Health will present a seminar entitled “Evaluating IB vaccine take by real-time PCR”.  The role of infectious bronchitis in depressing growth and increasing plant condemnation and a reducing egg production is well established.  Despite the availability of a broad range of live attenuated IB vaccines, clinical problems occur in the field attributed to defective vaccination.  The presentation by Dr. Jordan will demonstrate the role of PCR in evaluating immunity after administration of IB vaccines at day of hatch.  The program will stress sample size, timing of sampling and interpretation of results.

 

The event will take place from 12H00 to 13H00 EST on January 31st, 2024, in meeting room TBA at the Georgia World Congress Center.

 

For registration access www.eventbrite.com/e/ippe-luncheon-evaluating-ib-vaccine-take

 


 

Opposition to Beef Imports from Paraguay

12/06/2023

Representatives Tracy Mann (D-KS) and Jim Costa (D-CA) with nineteen colleagues are opposing a rule established by the USDA that would allow beef to be exported to the U.S. by Paraguay.  The rule is based on alleged outdated inspections in 2008 and 2014. Importation represents a danger of possible introduction of foot and mouth disease into the U.S. despite “certain conditions” that must be followed by the exporting nation.

 

The decision-making process in the USDA is questioned given the risks of introduction of a potentially catastrophic infection that would cost billions to control and would place red meat exports in jeopardy.


 

USAPEEC Promotion in Peru

12/05/2023

The USAPEEC MondayLine December 4th reported on a recent trade show and poultry sampling event in Peru. The event was organized by USAPEEC with sponsorship extended by the South Dakota Soybean Association and with support from the U.S. Embassy Office of Agriculture Affairs in Lima.  The objective was to strengthen ties between importers and traders of U.S. poultry meat products and the hotel and restaurant sector.

 

The event was attended by 220 representing the target market.  U.S. poultry products were presented for taste testing.  A technical seminar on the impact of the cold chain on food safety was presented by Dr. Christian Pesantes, a food scientist with the National University of Callao.

 

For the first nine months of 2023, Peru imported 3,775 metric tons of turkey products valued at $6.2 million.  These values were more than 2,000 percent higher than in January through September of 2022.


 

Cooks Venture Closes

12/05/2023

Cooks Venture has closed and will be liquidated. This small integrated chicken operation was established by Matt Wadiak founder of Blue Apron.  The enterprise was based on contractors rearing slow-growing heritage strain broilers on pasture.  The company operated a hatchery and processing plant with headquarters in Decatur, AR. and was supplied by growers in northwest counties of the state and in adjacent Oklahoma.

 

In accordance with Wadiak’s principles, the heirloom Pioneer bird was fed GMO-free diets without antibiotics and farmers were obliged to apply regenerative farming procedures. Claims were made that the Pioneer strain was capable of resisting infection due to an enhanced immune system in addition to other questionable assertions.

 

Cooks Venture was intended to serve as a catalyst “to revolutionize broiler production.” The target clientele accessed by direct shipment was ‘the Birkenstock Set,’ an affluent minority concerned over environmental and welfare issues.

 

Cooks Venture failed as it was evidently unprofitable, ultimately running out of investors’ funding despite raising over $62 million from venture capital companies including PIUS and bringing in John Niemann, a Cargill veteran, as the ‘Hail Mary” CEO in August.

 

The failure of the company belies the hype in articles published in Bloomberg, Forbes, The San Francisco Chronicle and The Washington Post over and above the usual foodie papers including Saveur, Eating Well, Civil Eats and Food Navigator. 

 

Matthew Wadiak was a co-founder of Blue Apron that was decidedly unprofitable from its inception and eventually was dismembered as a corporate entity.  There are obvious parallels between the claims made by Wadiak and Josh Tetrick to revolutionize livestock production concentrating on sustainability and welfare.  These attributes are ranked low among consumers who place price and availability as the major attributes contributing to a purchase decision.


 

Hormel Comments on Jennie-O Turkey Store Operations

12/05/2023

During the November 29th Earnings Call, Hormel Foods CEO James Snee commented on the Jennie-O turkey store business.  Since October 2022 production and financial data for the turkey business has been folded into the Retail and Food Service segments of the Company.  The press report issued by Hormel for Q4 and fiscal 2023 made little reference to the turkey business other than expressing ongoing concerns for losses due to HPAI during the recently completed quarter.  During the Earnings Call it was disclosed that the Barron, WI plant would cease operating as a primary processing facility and would be converted to value-added production during mid-2024.

 

Snee noted, “We are committed to building a more demand-oriented and optimized turkey portfolio that is better aligned to the changing needs of our customers and operators.”  He noted that the intended changes would contribute to improved profitability and would adjust the supply chain.

 

Jacient Smiley, CFO commented on lower wholesale unit revenue during the fourth quarter that detracted from margins but in 2024, Hormel anticipates lower feed costs.

 

Mortality from HPAI among turkey flocks in Minnesota and adjoining states supplying Hormel have the potential to disrupt supply chains as in 2022. There was ongoing impact through fiscal 2023 as a result of losses among breeders.

 

Snee considers that there are adequate supplies of turkeys to satisfy market demand but that uncertainties exist relating to the duration and extent of HPAI that will result in market volatility.


 

JBS Settles Wrongful Death Suit

12/04/2023

During June 2019, a worker at the Souderton, PA. plant operated by JBS died as a result of a freak accident.  A knife used by an adjacent worker on a cutting line was dropped and struck the decedent in the neck resulting in his fatality.  The Department of Labor OSHA investigated the incident4 and did not cite JBS.  The estate of the victim sued JBS alleging responsibility, citing previous knife accidents at the plant. A motion by JBS for summary judgement was denied by the Philadelphia Court of Common Pleas. A settlement for $12 million was subsequently negotiated through mediation.


 

Tyson Foods Opens Danville, VA. Plant

12/03/2023

Tyson Foods has inaugurated a $300 million plant in Danville, VA. to prepare fully cooked products.  The plant will incorporate a high degree of mechanization for optimal efficiency.  The facility will extend over 325,000 sq. ft. and will create 400 new jobs.

 

Donnie King, president and CEO of Tyson Foods stated, “The Danville plant represents a significant commitment to the region, and we take our responsibility to enhance the communities where we live and work seriously.  This plant is also a significant step forward in our ongoing goal of operational excellence by investing in innovative technology and automation”.

 

Features of the plant include high-speed case packing with robotics, machine vision inspection of products including metal detection.  Workers will be equipped with armband devices that will detect and transmit any physical stress to receptors monitored by safety managers.

 

West Morris, Group President for Poultry at Tyson Foods stated, “The Danville plant incorporates the latest technology that brings real-time intelligence to our processes, products and workplace experience benefitting all team members.”

 

To ensure that workers have adequate training and opportunity for advancement, Tyson Foods has partnered with the Danville Community College to develop a training program in maintenance technology in addition to other skills.

 

In a side interview with media, Donnie King opined that Tyson became comfortable with high market demand and ability to maintain pricing pressure over the COVID pandemic period.  This created a culture of inefficiency that he characterized as “fat and lazy”.  The recent downturn in net earnings for the most recent quarter of fiscal 2023 justified extreme action taken by the company including plant closures and layoffs and consolidation to achieve efficiency. This approach also included centralizing the management of all of Tyson Foods operating segments at the corporate campus in Springdale, AR.


 

Hormel Posts Results for Q4 and FY 2023

12/01/2023

In a release dated November 29th Hormel Foods (HRL) reported on the fourth quarter of fiscal 2023 ending October 29th 2023, disappointing on both the top and bottom lines.  For the quarter the company earned a reported (GAAP) $195.9 million on revenue of $3,198 million (Zack’s consensus of $3,260 million) with a diluted EPS of $0.36.  Comparable values for Q4 of fiscal 2022 ending October 30th were net income of $279.6 million on revenue of $3,283 million with a diluted EPS of $0.51.

 

Compared to Q4 of FY 2022 sales declined by 2.6 percent, gross margin decreased from 17.3 percent to 16.1 percent; operating margin was down from 11.1 percent to 8.4 percent. Profit margin fell from 8.5 percent to 6.1 percent for the most recent quarter.

 

For FY 2023 Hormel earned $793 million on revenue of $12,110 million with a diluted EPS of $1.45. For FY 2022 Hormel earned $999 million on revenue of $12,459 million with a diluted EPS of  $1.82.

 

Effective October 2022, Hormel reorganized their operating divisions into Retail, Food Service and International.  The Jennie-O Turkey Store Division was integrated among the new three operating divisions.  Accordingly, releases for Fiscal 2023 do not disclose either volume or cost data for this subsidiary as in previous years.  In reviewing the release, there was only indirect comment on the turkey business noting lower volume despite recovery from the 2022 highly pathogenic avian influenza epornitic. During the analyst’s call CEO Jim Snee expressed ongoing concern for losses during November and December 2023 and for 2024.

 

Segment performance in both sales and operating profit for the most recent quarter was compared with Q4 FY 2022:-

  • Retail Segment volume -3.0%:  sales -4.0%: segment profit -4.0%.
  • Food Service Segment volume +5.0%: sales +2.0%: segment profit +13.0%.
  • International Segment volume 5.0%: sales -12.0%: segment profit -67.0%

 

In commenting on Hormel results Jim Snee, Chairman, president and CEO stated “In fiscal 2023, we achieved our second consecutive year of net sales in excess of $12 billion, continued to reinvest in the growth of our leading brands, drove strong operating cash flows of $1 billion and returned a record amount of cash to our shareholders in the form of dividends," He added "Despite challenging operating conditions to end the year, our results were in line with the low end of our revenue and adjusted net earnings per share expectations, as a strong finish from our Foodservice segment was offset by pressure in our Retail and International businesses”.         Snee concluded "Looking ahead, our teams continue to navigate through a dynamic operating environment characterized by slowing consumer demand, inflationary pressures and headwinds in our turkey business”.

 

For FY 2024 the company projected a one to three percent increase in net sales growth compared to FY 2023 and full year diluted net earnings per share of $1.43 to $1.57.  

 

Hormel Foods posted total assets of $13,449 million on October 29th 2023 of which $6,685 comprised goodwill and intangibles. Long-term debt was $2,549 against an intraday market capitalization of $16,700 million on December 1st. HRL has traded over the past 52 weeks in a range of $30.12 (an 8-year low on October 23rd) to $47.64 with a 50-day moving average of $33.85.  HRL trades with a forward P/E of 17.5. HRL closed at $39.08 on August 30th pre-release. The share price closed at $30.59 on November 30th post release.

 

The 12-month trailing operating margin is 9.3 percent with a profit margin of 6.6 percent. The Company has returned 4.9 percent on assets and 10.4 percent on equity.

 

Subscribers can review the financial performance of competitor Butterball by entering “Seaboard” into the SEARCH tab.

 


 

U. S. John Bean Technologies Bids for Marel hf.

11/28/2023

According to a release by Marel hf. of Iceland, the multinational manufacturer of food processing equipment has received a non-binding proposal from John Bean Technologies (JBT) based in Chicago.  According to the release, John Bean Technologies has offered $2.6 million for Marel with payment comprising 25 percent cash and the remainder in JBT equity.

 

Marel, founded in 1983 by engineers, affiliated with the University of Iceland to manufacture onboard scales for the fishing industry.  The company grew by acquisition of 12 major competitors in the U. S., Netherlands, Australia, Denmark and Germany between 1997 and 2022.  In 2008, Marel acquired Stork in the Netherlands in a transaction that included Townsend. More recently Marel absorbed Wenger in the U. S. Approximately a quarter of the equity in Marel is owned by family-held EYIR Investments with the remainder by the Icelandic Pension Fund and other public entities.

 

The preliminary JBT offer was rejected by the Board of Marel but as with all first approaches, the Board indicated that any proposals that fully reflect the value of Marel would be considered. The merger would be subject to due diligence and approval by appropriate regulatory authorities.

 

If the transaction is completed the two largest multinational poultry meat processing companies would revert to U.S. ownership. Meyn Food Processing Technology b.v is a subsidiary of CTB Inc. a Berkshire Hathaway company since acquisition in 2018.


 

Popeye's Introduces Wing Menu Nationwide

11/28/2023

Popeyes will now market wings with five distinct flavors in all stores nationwide.  Wings are hand-battered and breaded and can be served as either honey barbeque, roasted garlic parmesan, signature hot, ghost pepper or sweet ‘N spicy.

 

Head Chef, Amy Alarcon, V-P of Culinary Innovation at Popeyes stated, “this is something my team has been working on for three years and we took our time to get it right.  Now we’ve found ways to add flavors for a variety of taste our guests are sure to love”.

 

The initiative by Popeye’s Louisiana Kitchen a division of Restaurant Brands International will boost sales, possibly to the detriment of KFC that will be obliged to introduce a similar range of promoted menu items.



 

Salmonella Outbreak in Italy Attributed to Inappropriate Processing

11/28/2023

Investigation of a 2022 outbreak of salmonellosis in Italy disclosed inappropriate processing hygiene and procedures in the production of porchetta a spiced pork product.  Approximately 70 cases of Salmonella Typhimurium were diagnosed but is recognized that with most food-related outbreaks the actual number of patients exceeds the confirmed cases by a factor of ten.

 

Investigators determined that raw uncooked meat products were intermingled.  The infective strain of S. Typhimurium was isolated from implements, wooden chopping boards, work surfaces and even a refrigerator.

 

The plant was completely decontaminated and workers were re-trained in sanitary food handling including absolute separation of raw and cooked product.


 

Aviagen Opens Pedigree Farm in Crossville, TN.

11/28/2023

On November 16th, Aviagen inaugurated a new pedigree farm in Crossville, TN.  The location includes a high-biosecurity feed mill, a hatchery, a production and administrative center and pedigree farms.  The complex was established in 1991 and currently has 7 farms of the planned 14 to be completed by the beginning of 2025.

 

Aviagen has operated in the Crossville area for 32 years having transferred pedigree breeding operations from Elkmont, AL. in 1991.

 

Jan Henricksen, CEO of Aviagen, stated, “We are pleased to be part of the great state of Tennessee and their welcoming and caring citizens.  I look forward to many more years of successful collaboration.”

 

The inauguration was attended by state and local invitees and was hosted by Hendricksen and by DeWet Nortje, GM of Higher Generation Production and Andy Goldman, VP of Pedigree Operations.


 

Turkey the Centerpiece of Thanksgiving Dinners

11/27/2023

According to a Cargill study, 8 of 10 respondents surveyed purchased a whole turkey for their Thanksgiving celebration.

 

Hunts Kabat, President of Cargill North America Protein Business, stated, “Americans hold onto the belief that a whole turkey should be the centerpiece of a Thanksgiving meal with family and friends.”  Cargill considers that in 2023, purchase of whole turkeys reversed a trend towards turkey parts including breasts.  This may, in part, have been due to the reluctance of families to gather during the COVID period.

 

The Cargill study is supported by the November 2023 USDA Cold Storage Report.  Hen carcasses in storage decreased 24.8 percent during October 2023 compared to the previous month of September to 72.2 million pounds on October 31st 2023.  Although this figure was only 0.3 percent lower than on October 31st 2022, the draw down of hen carcasses confirmed seasonal demand in anticipation of Thanksgiving.  During October 2023, 20.3 million young turkeys were processed representing a 5.7 percent increase over October 2022.


 

Suboptimal Early Incubation Temperature Impacts Chick and Body Weight and Yield

11/27/2023

Dr. Jessica D. Starkey of Auburn University recently reported on the effect of incubation temperature during the 4-to-11-day period.  The project, funded by the USPOULTRY Foundation as Project No. 725, compared a suboptimal temperature of 36.1C with a high temperature of 38.6C and a conventional temperature of 37.1C as a control.  It is known that muscle fiber and satellite cell populations are influenced by early incubation temperature. 

 

The results of the study demonstrated that irrespective of temperature, there were no differences in embryonic mortality, but hatch-of-fertile eggs was higher in the control group compared to either cold or hot treatments.  Chicks from eggs subjected to early cold temperature were heaviest at hatch compared to the chicks from eggs subjected to high temperature during early-stage incubation with a negative difference of ten percent.

 

Cold incubation impacted final body weight in addition to suppressing breast, wing, thigh and drum yield compared to controls.  Breast weight was reduced by 25g, or six percent compared to control and high-temperature incubation treatments.  Temperature did not affect the incidence of  pectoral myodegeneration (wooden breast or white striping). 

 

An important consideration from the study was the financial impact of low incubation temperature during the 4-to-11-day period.  The Auburn University team determined that a 1.25 million broiler per week complex would lose $7 million annually as a result of suboptimal early incubation.  By extension, a 1C lower early incubation period could cost the U.S. broiler industry as much as $850 million annually.


 

JBS SA. Reports on 3rd Quarter of FY 2023.

11/25/2023

In a press release dated November 13th JBS SA. (JBSAY) announced results for the 3rd Quarter of FY 2023 ending September 30th. The Company missed consensus estimates on earnings that declined by 85 percent from the 3rd Quarter of FY 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.)

 

Third Quarter ending September 30th.

2023

2022

Difference (%)

Sales:

$18,729,700

$18,845,500

-7.2

Gross profit:

$2,264,700

$3,092,9000

-26.8

Operating income:

$540,100

$1,286,000

-58.0

Pre-tax Income/(Loss)

Net Income/(Loss)

$162,100

$117,300

$1,049,900

$746,600

-84.5

-84.2

Diluted earnings per share:

$0.05

$0.34

-85.2

Gross Margin (%)

5.5

16.4

-66.5

Operating Margin (%)

<0.1

0.7

>100

Profit/(Loss) Margin (%)

<0.1

4.0

>100

Long-term Debt: September 30th 2023/2022

$19,744,000

$15,543,000

+27.0

12 Months Trailing:

     

Return on Assets (%)

1.8

   

Return on Equity (%)

2.7

   

Operating Margin (%)

2.9

   

Profit Margin (%)

0.3

   

Total Assets: June 30th 2023/2022

$42,902,911

$41,622,126

+7.5

Market Capitalization

     

 

Segment Revenue ($ million) EBITDA ($ million)

JBS USA Beef $5,953 $103

JBS US Pork $2,027 $209

Pilgrim’s Pride Corp. $4,356 $450

SEARA $2,092 $116

JBS Brazil $2,959 $ 99

JBS Australia $1,575 $136

Others $ 141 $ (4)

52-Week Range in Share Price: $6.20 to $9.24 50-day Moving average $7.80

Forward P/E 3.9 Beta 0.3

JBS SA Exports from Brazil, Total Q3 2023, $5,400 million:

China 28.1%; Africa/MS, 12.2%; Japan, 10.1%; S.Korea, 8.1%; U.S., 9.2%;

E.U., 5.8%; Other, 26.6%.

 

In commenting on results Gilberto Tomazoni, CEO Global JBS stated, “The results in the third quarter of 2023 demonstrate that we are on a path of consistent recovery, as we have indicated in previous quarters. Thanks to the strength of our globally diversified platform across geographies and proteins, and the implementation of significant improvements in managing our operations in Brazil and the United States, we have nearly added one percentage point to our consolidated EBITDA margin compared to the second quarter of this year, reaching 5.9 percent. This evolution in our cash generation also reflects our commitment to the fundamentals of our debt policy”.

 

Addressing performance in operating segments Tomazoni said “We continue to work toward restoring the profitability of two of our businesses that were performing below potential. In Seara, we have executed the majority of our previously identified adjustments. This should positively impact our results in the coming quarters. There is still room for improvement in results with the ramp-up from the new facilities, which are not yet operating at full capacity. We are very optimistic about the prospects of this business”. He added “In our U.S. beef business, operational measures adopted since March this year in the commercial and industrial areas are helping us navigate through the lowest point of the cattle cycle. The margins of the operation are showing gradual recovery, even in a scenario of tighter spreads and reduced cattle supply, demonstrating our commitment to operational excellence”.

 

Tomazoni concluded, “Our chicken and pork businesses are already benefiting from the reduction in grain prices, as seen in the results of Pilgrim’s and U.S. pork. The margins of our U.S. pork business have shown strong evolution, increasing from 1.5 percent in the second quarter of 2023 to 9.5 percent in the third quarter, also boosted by strong consumer demand. Similarly, our beef operations in Brazil and Australia are increasingly ready to capture the opportunities presented by more favorable cycles in both markets, and this movement is expected to intensify from the next quarter onward”.


 

2024 International Production and Processing Expo

11/21/2023

The annual International Poultry Scientific Forum (IPSF) co-sponsored by the Southern Poultry Science Society, the Southeastern Conference on Avian Diseases and USPOULTRY will take place on Monday, January 29th through the morning of Tuesday, January 30th 2024.  As in previous years, the IPSF will be held concurrently with the 2024 International Production and Processing Expo (IPPE).

 

Pre-registration is $95 through January 12th.  Complimentary registration is offered to students.

 

For information concerning the IPSF and IPPE access  <ippeexpo.org>.

 


 

China Lifts HPAI Restrictions

11/20/2023

The unjust restrictions placed on entire states as a result of any diagnosis of HPAI in a  commercial farm in a single county has restricted exports of U. S. poultry products to the People’s Republic of China (PRC).  Recently, China lifted restrictions on seven states among which North Carolina, Delaware, Maryland and Texas are major broiler producers. The concession relates to product processed after November 10th.  China maintains a ban on importation from 31 U.S. states of which 13 are eligible for export under WOAH rules.

 

Over the first nine months of 2023 exports to China, valued at $576,346 comprised 67.4 percent paws and feet representing 73.2 percent of value with a unit price of $1,848 per metric ton.  In contrast, legs and leg quarters comprising 24.2 percent of volume and 14.2 percent of value were priced at $963 per metric ton below average export price. An evident trend in export to the PRC is a reversion of exports to the Special Administrative Region of Hong Kong with presumed transshipment to the Mainland.


 

 
Copyright © 2024 Simon M. Shane