Poultry Industry News

Chipotle to Establish Venture Fund


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


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


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


Salmonella Contamination Impacts U.K. Chicken Supply


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


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


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


USAPEEC Intensifying Promotional Efforts Through Trade Diplomacy


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


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


USPOULTRY Funds Research on Salmonella Control


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


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


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


Beyond Meat Reports on Q1 FY 2022


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


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

All downhill from the IPO

1st Quarter Ending.

April 2nd 2022

April 3rd 2021

Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:

Return on Assets (%)


Return on Equity (%)


Operating Margin (%)


Profit Margin (%)


Total Assets




Intraday Market Capitalization



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

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

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

Forward P/E 666


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


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


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


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


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


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


China Slashes Pork Imports


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


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


Tyson Foods Inc. Reports on Q2 FY 2022


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


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


Second Quarter Ending

April 2nd 2022

April 3rd 2021

Difference (%)





Gross profit:




Operating income:             




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and liabilities:




12 Months Trailing:




           Return on Assets    (%)




           Return on Equity    (%)




           Operating Margin   (%)




           Profit Margin          (%)




Total Assets




Intraday Market Capitalization





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

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

Forward P/E 11.5                  Beta 0.8


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


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


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

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


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

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


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



Kentucky HPAI Farms to be Repopulated


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


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


JBS Invests in Middle East


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


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


Minnesota Funds Mobile Meat Processing


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


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


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


Concentration of Broiler Production by State for 2021


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


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


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


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


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


BRF S.A. Posts Q1 Loss


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


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


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


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


Lightlife™ Plant-Based Chicken Breasts Developed


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


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



Future Of Vegetable-Based Meat Alternatives


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



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


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


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


Labor Advocacy Group Cites Twelve Major U.S. Employers


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


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


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


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


Analysts Downgrade Beyond Meat, Inc.


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


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


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


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


Wayne Farms Recalls 15 Tons Of RTE Chicken Breast Product


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


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


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


Maple Leaf Foods Reports on Q1 of FY 2021


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


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


1st Quarter Ending March 31st.



Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income1







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and lease obligations*:




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets*

 Intangibles and goodwill % of assets






Market Capitalization



* March 31st 2022/2021


Chick-NewsQ1 2022 Meat Protein Segment:

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

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


Q1 2022 Plant Protein Segment:

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

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


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

Forward P/E 20.3 Beta 0.4

Market Close pre-release May 3rd $21.36

Market Close post-release May 4th $21.76


Insider shareholding 39.2%. Institutional shareholding 25.3%


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


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


The Company provided the following guidance:-


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

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

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


McDonald’s McPlant™ Disappointing in Tests


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


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



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


Equine Influenza Responsible for Mortality in Mustangs


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


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


Wingstop Posts Q1 FY 2022 Financial Results


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


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


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


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


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


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


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


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


NCC Posts Infographic Relating to Contract Growers


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


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


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



Underground Sequestration Of Carbon Dioxide Presents Potential Liabilities


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


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


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


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



Foster Farms Cited by California Labor Commissioner


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


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


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



USAPEEC Responding To Challenges of HPAI


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


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


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


Recent achievements include:-

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


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


Tyson Foods To Expand Educational Opportunities for Employees


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


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


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


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


Tyson Achieves Zero Waste Landfill at Six Plants


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


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


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


Yum China Holdings Introducing Technology To Save Energy


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


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

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


Settlement of Civil Case Alleging Anti Competitive Action


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

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


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


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


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


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


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

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


Impossible Foods Sued Over Leghemoglobin Patent


Motive Foodworks has petitioned the U.S. Patent and Trademark Office to revoke a patent awarded to Impossible Foods covering soy leghemoglobin, an ingredient used in vegetable-based meat substitute products.  Motive Foodworks claims that the patent was awarded improperly based on the fact that the process to develop the additive was in the public domain. Motive uses a proprietary ingredient derived from fermented yeast that has properties similar to bovine myoglobin to impart beef-like flavor and taste to their alternative - meat products.


Chick-NewsImpossible Foods rejects the contentions advanced by Motive and will respond to the petition within the three month statutory period. A spokesperson for Motive stated, “Our industry should work together to grow the plant-based category for the greater good.  Competition is healthy and it should play out in the marketplace, not the courts.”


CHICK-NEWS Welcomes Anpario As A Sponsor


Anpario now on Chick-NewsAnpario plc. is a publicly quoted company located in Nottinghamshire in the U.K. producing and distributing feed additives world-wide.


The Health and Performance portfolio includes Orego-Stim™.  The product available in the U.S. is formulated to enhance productivity of monogastric species.  Orego-Stim™ is a phytogenic product with oregano essential oil as the active component.  Within the intestinal tract, oregano oil suppresses pathogenic bacteria, is anti-inflammatory and serves as an immunomodulator.


The Feed Quality category produced by Anpario include antioxidants, pellet binders, mold inhibitors all formulated to enhance production through the manufacture of high-quality feeds.


Anpario now on Chick-NewsThe Toxin Management portfolio in the E.U. includes mycotoxin binders specifically formulated to inhibit absorbtion of DON and ZEA, both for monogastric species and for dairy cows.


Anpario has gained over 30-years of experience in intensive livestock production and branded GRAS products supported by research and development scientists and field technical representatives.


For further information, click on to the Anpario logo on the right side of the Welcome page or access, www.Anpario.com.


OSHA Tours Triumph Foods


Representatives of the United Food and Commercial Workers Union Local 2 and officials of the Occupational Health and Safety Administration (OSHA) recently toured the St. Joseph, MO plant.  The facility with 2,500 workers has generated a solid record of worker safety including protection during the COVID pandemic.  The purpose of the visit was for OSHA to examine at first hand measures adopted by Triumph Foods.  The plant was recentlyChick-News awarded the North American Meat Institute Worker Safety Recognition.  Triumph Foods has a long history of promoting worker safety in cooperation with the Cleveland Clinic.


Broiler Month


Chick-NewsMonthly Broiler Production and Prices, April 25th 2022.


Chick Placements.

According to weekly Broiler Hatchery Reports covering four weeks ending on March 5th through March 26th a total of 961.80 million eggs were set, 0.5 percent more than the corresponding weeks in 2021. For the same period 746.01 million chicks were placed within one percent of the corresponding period in 2021.


A total of 176.3 million day-old chicks were placed among the 19 major broiler-producing states during the week ending March 19th. Total chick placements for the U.S. amounted to 185.7 million, 0.1 percent (0.2 million chicks) more than the week ending February 19th. Claimed average hatchability for the period approximated eighty percent for eggs set three weeks earlier Each 1.0 percent change in hatchability represents 1.9 million chicks placed per week with the current range of weekly settings.


Cumulative chick placements for the period January 8th 2022 through March 26th 2022 amounted to 2.23 billion chicks, less than one percent from the corresponding period in 2021.


Low chick placement during the previous seven months is attributed to setting a proportion of hatching eggs with depressed fertility that were derived from high-yield breed combinations used by some integrators for heavy broilers. Additional breeder flocks were placed to compensate for reduced fertility and their contribution is reflected in broilers to be harvested during the second quarter of 2022.


Chick-NewsBroiler Production


According to the April 22nd USDA Broiler Market News Report for the processing week ending April 16th 2022, 160.97 million broilers were processed at 6.26 lbs. live. This was 1.6 percent less than the 163.6 broilers processed during the corresponding week in March 2022 and 0.9 percent less than the 162.53 million processed during the corresponding week in April 2021.Ready to cook (RTC) weight for the most recent week was 765.82 million lbs. (348,100 metric tons). This was 2.6 percent less than the 785.91 million lbs. processed during the corresponding week in March 2022 and 2.6 percent less than the 786.86 million lbs. during the corresponding week in April 2021. Dressing percentage was a nominal 80.5 percent. For 2022 to date RTC broiler production attained 12.564 million lbs. (5.711 million metric tons). This quantity is 1.4 percent more than for the corresponding period in 2021.


Broiler Price


The USDA National Composite Weighted Wholesale price on April 22nd was up 11.7 cents per lb. compared to March 25th to 167.4 cents per lb., and compared to 148.0 cents per lb. cents per lb. average during March and 125.7 cents per lb. during February 2022 and 82.0 cents per lb. for the three-year average.


The industry is still impacted by contraction in the food service segment following imposition of COVID-19 restrictions, but with universities and schools having reopened in most areas following a decline in the incidence rate of the Omicron variant. Leading QSRs are using increasing quantities of breast meat for sandwiches, strips and nuggets.


The USDA Southern States (SS) benchmark prices in cents per lb. (rounded to nearest cent) as documented in the Broiler Market News Reports April 22nd are tabulated with a comparison with the previous month:-


USDA SS1. April 22nd


USDA SS1. March 25th




Whole Index








B/S Breast




Whole Breasts




B/S Thighs




Whole Thighs








Leg Quarters




Wings (cut)




  1. USDA Southern States prices


The USDA posted live-weight data for the past week ending April 22nd and YTD 2022 were:-

Live Weight Range (lbs.)





Proportion past week (%)





Change from 2020 YTD (%)






During the week ending March 25th broilers for QSR and food service (live, 3.6 lb. to 4.3 lb.) represented 25 percent of processed volume.


On April 18th 2022 cold storage holdings of processed poultry other than chicken at selected centers amounted to 62,164 lbs. 1.4 percent less than the inventory of 63,050 lbs. on March 21st 2022.


According to the April 25th 2022 USDA Cold Storage Report, issued monthly, stocks as of March 31st 2022 compared to March 31st 2021 showed differences with respect to the following categories:-


  • Total Chicken category attained 777.45 million lbs. (353,388 metric tons) corresponding to an average of 1.4 weeks production based on average 2022 weekly RTC output. The March 31st 2022 inventory was up 5.1 percent compared to 739.83 million lbs. (336,285 metric tons) on March 31st 2021
  • Leg Quarters were up by 73.7 percent to 100.58 million lbs. consistent with the data on exports. Inventory was up 5.2 percent from February 28th Given the trend in inventory of leg quarters it is evident that this category continues to be shipped in varying quantities as the principal chicken export product to a number of nations but only in minimal quantities to China.
  • The Breasts and Breast Meat category was down 17.8 percent from March 31st 2021 to 167.53 million lbs. indicating robust domestic demand from retail and partial recovery of the food service sector. March 31st stocks were 3.8 percent lower than February 28th The QSRs are actively promoting chicken sandwiches.
  • Wings showed a 78.5 percent increase from March 31st 2021, contributing to a stock of 65.79 million lbs. This category was 2.7 percent lower than on February 28th The increase in stock over the past year denotes lower demand attributed to “wing fatigue” in addition to competition from “boneless wings” Increased consumption over the Super Bowl weekend was inadequate to reduce volume in storage hence the disproportionate reduction in unit price in recent weeks.
  • Paws and Feet were 1.2 percent lower on March 31st 2022 to 34.13 million lbs. compared to March 31st 2021 and inventory was 1.7 percent higher than February 28th Prior to April 2020 it is evident that approximately half of the shipments of paws and feet destined for Hong Kong were landed and transshipped to the Mainland. Data released by the USAPEEC confirmed that for the month of November 2021 paws represented 91.5 percent of U.S. broiler exports to China valued at $90.2 million.
  • It is noted that the Other category comprising 316.59 million lbs. was up 4.3 percent from March 31st 2021 but represented a significant 40.7 percent of inventory on March 31st The high proportion in the Other category suggests further classification or re-allocation by USDA to the designated major categories.


March 2022 Production

The USDA Poultry Slaughter Report released on April 25th covering March 2022 comprised 23 working days. The following values were documented for the month:-


  • A total of 823.94 million broilers were processed, down 1.0 percent from March 2021;
  • Total live weight was 5.292 billion lbs., down 0.5 percent from March 2021;
  • Unit live weight was 6.42 lbs., up 0.5 percent from March 2021.
  • RTC attained 3.99 billion lbs., down 0.4 percent from March 2021.
  • WOG yield of 75.5 percent compared to 75.4 percent during March 2021.
  • The proportion marketed as chilled in March 2022 comprised 93.5 percent of RTC output.
  • Ante-mortem condemnation as a proportion of live weight attained 0.20 percent during March 2022 compared to 0.19 percent in March 2021.
  • Post-mortem condemnations as a proportion of processed mass corresponded to 0.51 percent during March 2022 compared to 0.52 percent in March 2021.



For 2021 exports of broiler parts and feet combined attained a volume of 3,633,624 metric tons (3,574,906 metric tons in 2020) with a value of $4,477 million ($3,557 million in 2020). Unit value increased 23.8 percent from 2020 to $1,232 per metric ton (including feet) from $995 (excluding feet during January-April 2020.).


Mexico has recognized the OIE principle of regionalization after intensive negotiations between SENASICA and U.S. counterpart, the USDA-APHIS assisted by USAPEEC. Provided importing nations adhere to OIE guidelines on regionalization, localized outbreaks of avian influenza and Newcastle disease will affect exports from affected states with outbreaks in commercial flocks. The response of China is less predictable given their action regarding E.U. nations in response to African swine fever and avian influenza but as of the present county-wide bans have been imposed. Their reaction to outbreaks will be influenced more by self-interest than considerations of scientific fact or international trade obligations.


Collectively our NAFTA/USMCA neighbors imported broiler products to the value of $869 million during 2018, $901 million in 2019, $864 million in 2020 and $1,175 million in 2021.


During 2021 exports of broiler products to China including feet attained 460,159 metric tons valued at $864 million with a unit price of $1,877 per metric ton. Shipments to China were offset by losses to Hong Kong with at least half of U.S. imports transshipped to the mainland prior to April 2020.


Effective April 22nd total losses due to HPAI amounted to 2.3 million broilers on 11 farms in the states as indicated : DE, (1 case); KY, (1); MD, (1); MN, (2); MO, (1); NC, (3) and NE, (2).


Turkey Month


Monthly Turkey Production and Prices, April 25th 2022


Chick-NewsPoult Production and Placement:

The April 13th 2022 edition of the USDA Turkey Hatchery Report, issued monthly, documented 26.93 million eggs in incubators on April 1st 2022 compared to 27.00 million eggs on April 1st 2021* The April set was down 2.3 percent (0.62 million eggs) from April 2021 and 1.0 percent down from the previous month of March 2022.


A total of 23.88 million poults were hatched during March 2022 compared to 23.27 million in February 2022*. The March 2022 hatch was up 2.9 percent (0.6 million poults) from the previous month of February 2022.


A total of 22.18 million poults were placed on farms in the U.S. in March 2022, compared to 22.00 million in March 2021*. The March placement was 0.8 percent, (0.18 million poults) more than the previous month of March 2021. This suggests disposal of 1.71 million poults during the month, therefore approximately 7.1 percent of the March 2022 hatch was not placed.


For the twelve-month period April 2021 through March 2022 inclusive, 267.85 million poults were hatched and 249.25 million were placed. This suggests disposal of 18.59 million poults over the 12-month period, corresponding to 7.5 percent of all poults hatched.


* USDA revision from previous monthly report.


Turkey Production:


The April 22nd edition of the USDA Turkey Market News Report confirmed the following provisional data for turkeys slaughtered under Federal inspection:-


  • For the processing week ending April 16th 2022, 1.452 million hens were processed at 16.0 lbs. live. This was 13.0 percent less than the 1.641 hens processed during the corresponding week in March 2022 and 16.1 percent less than the 1.686 million during the corresponding week in April 2021.Ready to cook (RTC) weight for the most recent week was 18.702 million lbs. (8,501 metric tons. This quantity was 13.4 percent less than the corresponding week in March 2022 and 17.3 percent less than the 22.489 million lbs. during the corresponding week in April 2021. Dressing percentage was a nominal 80.5 percent. For 2022 to date hen production attained 334.47 million lbs. (152,031 metric tons). This quantity is 3.5 percent more than for the corresponding period in 2021.
  • For the processing week ending April 16th 2022, 1.834 million toms were processed at 41.8 lbs. live. This was 22.9 percent less than the 2.379 toms processed during the corresponding week in March 2022 and 17.9 percent less than the 2.235 million during the corresponding week in April 2021. Ready to cook (RTC) weight for the most recent week was 18.702 million lbs. (8,501 metric tons. This quantity was 27.3 percent less than the corresponding week in March 2022 and 24.3 percent less than the 81,557 million lbs. during the corresponding week in April 2021. Dressing percentage was a nominal 80.5 percent. For 2022 to date tom production attained 1,197 million lbs. (543,980 metric tons). This quantity is 3.0 percent less than for the corresponding period in 2021.


The National average frozen hen price during the week of March 19th was 138 cents per lb., up two cents per lb. from the corresponding week in March 2022 and up approximately 38 cents per lb. from the three-year average. The following prices rounded to nearest cent were documented for domestic and export trading on April 22nd 2022:-



cents per lb.

Change from previous Month (%)

Frozen hens



Frozen toms



Fresh hens



Fresh toms



Breasts 4.0-6.5 lb. (frozen)



Breasts (B/S) tom



Drums (toms for export)



Wings (V-cut tom)



Wings (V-cut hens)


No new quotation

Thigh Meat (frozen for export)


No new quotation

Mechanically Separated (export)


No new quotation



On April 22nd 2022 cold storage holdings at selected centers amounted to 69,516 lbs., 2.5 percent more than the inventory of 67,794 lbs. on April 1st 2022.


The April 22nd 2022 edition of the USDA Cold Storage Report issued monthly, documented a total turkey stock of 308.2 million lbs. (140,091 metric tons) on March 31st 2022, equivalent to 3.2 weeks of normal seasonal production and down 12.1 percent compared to the inventory on March 31st 2021. The March 31st 2022 value was 5.2 percent above the February 28th 2022 level. This change is consistent with season and denotes deterioration in balance between supply and the combination of March 2022 domestic demand and lower exports.


The Whole Turkey category of 160,376 million lbs. representing 52.0 percent of total storage of 308.2 million lbs. on March 31st 2022 was 0.6 percent higher than the adjusted inventory for the previous month and 0.2 percent lower than on March 31st 2021.


  • Tom carcasses in storage on March 31st 2022 increased by 3.7 percent from March 31st 2021 to 101.9 million lbs. on March 31st Tom carcasses increased 5.0 percent during March 2022 compared to the previous month.
  • Hen carcasses in storage increased by 6.4 percent from March 31st 2021 to 58.5 million lbs. on March 31st Hen carcasses decreased 6.3 percent during March 2022 compared to the previous month.
  • Breasts in storage declined by 39.0 percent from March 31st 2021 to 42.3 million lbs. on March 31st 2022 but up m15.4 percent from February 2022.
  • The “Other” and “Unclassified” categories collectively amounted to 96.2 million lbs. or 31.2 percent of inventory on March 31st The magnitude of these two non-specified categories suggests that the USDA should attempt to classify product more accurately as to specific product.


March 2022 Production


According to the USDA Poultry Slaughter Report released on April 25th 2022 covering, March 2022 comprising 23 working days:-


  • During March 2022 19.21 million young turkeys were processed. (0.2 percent less than in March 2021);
  • Total live weight attained 629.8 million lbs. (3.0 percent less than in March 2021);
  • Average live weight was 32.79 lbs. (1.9 percent less than March 2021);
  • RTC attained 504.9 million lbs. (down 2.7 percent from March 2021) with a yield of 80.2 percent.
  • The proportion of frozen product in March 2022 attained 37.4 percent of total RTC produced.
  • During March 2022 ante-mortem condemnation attained 0.29 percent of live weight, (0.30 in March 2021).
  • During March 2022, 1.16 percent of RTC weight was condemned (1.23 percent in March 2021)



Please review the year-to-date export data in this edition.


U.S. exports of turkey products in 2021 attained 249,045 metric tons, down 3.9 percent from 2020 (259,127 metric tons in 2020). Value increased 14.0 percent to $666 million ($584 million in 2020). Unit price increased 18.6 percent from 2020 to $2,674 per ton.


The U.S. turkey industry shipped 169,6736 metric tons to Mexico or 68.2 percent of all turkey exports, valued at $450 million during 2021. During 2021 China imported 5,580 metric tons of turkey products with a value of $9.8 million representing a unit value of $1,756 per metric ton.


 As at April 22nd, losses of turkeys depleted as a result of HPAI attained 4.2 million birds on 117 farms.


USDA to Disclose Slaughter Records


Chick-NewsFollowing lawsuits filed jointly by the Animal Welfare Institute and Farm Sanctuary, the USDA is now obliged to publicly post records indicating enforcement action in terms of the Humane Methods of Slaughter Act and the Poultry Products Inspection Act.


The agreement following a lawsuit  will result in the posting of data back to January 2017. These animal activist groups and others now have access to processing and packing plant records that may impact the image of broiler integrators and meat packers when publicized.


Chick-NewsA Federal Magistrate Judge for the U.S. District Court for the Western District of New York approved the settlement.  The USDA will be responsible for paying the Plaintiffs' attorney fees arising from a 2018 trial in the amount of $300,000.


A representative of the Animal Welfare Institute noted, "thousands of slaughterhouse records are now readily available to concerned citizens and animal advocacy groups who wish to monitor USDA enforcement without waiting months or even years for the department to respond to a Freedom of Information Act request.


Implications for poultry slaughter  and brand image are self-evident.


Tyson Foods To Rebuild Alabama Rendering Plant


Chick-NewsTyson Foods has announced that it will invest $200 million to rebuild a rendering plant in Hanceville, AL. that was destroyed by fire in 2021.  The projected date of completion of the proposed 120,000 square feet plant will be mid-2023.


Chick-NewsCullman County, the location of the plant, is a major chicken producing area. Prior to destruction the plant produced 750,000 tons of poultry by-product meal annually used for petfood and animal diets. The plant was the largest poultry rendering facility in the U.S. and probably the World.


U.S. Manufacturers Partnering With Community Colleges


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


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


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


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


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


Rabobank Quarterly Review of Livestock Production in China


RabobankAccording to the Rabobank China Food and Agribusiness Quarterly covering the second quarter released April 19th, the economy of China is expected to slow due to COVID restrictions.  The official National Bureau of Statistics forecast a 7.5 percent year-over-year growth for industrial production through February 2022.  Rabobank supports a consensus view of a growth rate of 4.3 percent.  The People’s Bank of China has documented a sharp decline in both orders and profitability arising from disruption of supply chains.  Accordingly, the Government-controlled bank is supporting financial institutions to boost capital, increase Yuan flexibility and to increase liquidity.


At issue are regional shutdowns in major centers including Shanghai, together with rising input costs due to the world escalation in the price of grains, fertilizers, and energy. A sharp decline in foreign trade is stimulating the State Council to establish domestic markets, moving away from globalization that previously drove the economy of China.


With respect to animal protein in China, domestic pork prices are low attributable to declining demand.  This is a direct result of restrictions imposed as the incidence rate of the Omicron strain of COVID soars.  With falling prices for pork, producers are liquidating herds, intensifying downward pressure on price. Imports will obviously be restricted other than to build a national stockpile as a central government policy. 


Broiler producers benefitted from increased prices during April due to disruption of supply chains, but the situation will return to normal if and when China manages to control the Omicron strain of COVID or alternatively adopt a different policy to widespread home confinement.  Sales of all animal protein will be limited by a ten percent decline in the food service sector.  Supermarket sales have increased in the short term due to panic buying resulting in shortages on shelves and in coolers, contributing to food inflation.


Chenjum Pan, Senior Analyst for Animal Protein at Rabobank noted a six percent decline in imports of poultry products over the first two months of 2020 to a quantity of 218,000 metric tons. Rabobank reported that Brazil gained in share of imports at the expense of the U.S. based on price and availability.


Questions remain as to the supply of grandparent broiler stock sourced from the U.S. Our supply hatcheries have attained OIE Compartment Status and China should not legally ban imports on the basis of sporadic outbreaks of HPAI in states other than Arkansas and Alabama.  In any event, following the 2015 HPAI epornitic, the world’s major, primary broiler breeders established facilities in other nations that could supply China.


Smithfield Foods Settles Civil Claim Alleging Price Fixing


JudgementFollowing approval by Judge John R. Tunheim, Chief District Judge for the U.S. District Court for the District of Minnesota, Smithfield Foods, Inc. will settle a civil claim for $42 million.  The commercial and institutional indirect purchasing plaintiffs alleged that Smithfield Foods, Inc. conspired to fix prices for pork over an extended period commencing 2009.



Smithfield Foods denied liability but negotiated the settlement “in the best interests of the company”.  Previously, Smithfield Foods, Inc. paid $83 million to settle a parallel suit initiated by direct pork purchasers including distributors and supermarket chains.


The settlement agreements followed similar agreements by JBS USA with this Company along with competitors named as co-defendants.


USPOULTRY To Present Financial Management Program


Chick-NewsThe 2022 USPOULTRY Financial Management Program will be held June 27th through 29th at the Hilton Clearwater Beach Resort and Spa.  The major topics will include changes in tax and labor law, consumer behavior, proposed legislation and cybersecurity.

US Poultry

In addition to the formal presentations, sessions will be offered on topics including recruiting and retaining accounting professionals, planning cash-flow, lease accounting, automation and investment analysis.


For registration and additional information access <www.uspoultry.org/programs/education>


Tyson Foods Assists in Immigration Applications


TysonIn an April 12th release, Tyson Foods announced that $1 million will be assigned to support employees to obtain U.S. citizenship.  The Tyson Immigration Partnership provides legal services in cooperation with two non-profit advocacy organizations, Immigrant Connection and Arkansas Immigration Defense.  Tyson also reimburses team members for INS application fees.  The program will be extended from the current seven complexes to 40 facilities in 14 states.


John R. Tyson, Executive Vice-president and Chief Sustainability Officer stated, “We care about our team members and want to help them achieve their goals including those who have dreams of becoming U.S. citizens and having greater access to opportunities our country has to offer.”  He added, “We are working hard to help team members who want and need assistance with their lawful immigration status or the complex and expensive process of becoming a citizen.



Immigrant Connection is hosting informational meetings at 27 company locations and Arkansas Immigration Defense is carrying out the same function in 13 locations in the Tyson home state.


Technomic Survey Confirms Increase in Chicken Served by Restaurants


Technomic has released the Top 500 Chain Restaurant Report.  The comprehensive report documents the performance of U.S. chain restaurants during 2021.  Principal conclusions include:


  • Collective revenue of $360 billion in 2021, approximately 18 percent higher than the previous year impacted by COVID.


  • Collectively the top five 500 restaurants encompass 26,000 locations with expansion in 2021.


  • Menu items featuring chicken increased by 10 percent in 2021 reflecting versatility, cost, consumer preference and suitability for small growing restaurant chains.



Third Trial of Broiler Company Executives to Proceed


Chick-NewsJonathan Kanter, Head of the Antitrust Division of the Department of Justice appeared before U.S. District Judge Phillip Brimmer to explain why the interest of the State justified a third trial following two previous trials ending in hung juries. Charges involved collusion to fix prices and rig bids for broiler products extending from 2012 to 2017.


The Department of Justice has cancelled charges against five of the ten who were indicted claiming that the case against the remaining defendants will be easier to prove.


Jason PennJudge Brimmer who is skeptical of the DOJ case does not have the power to refuse a third trial.  The accused now comprise the two previous CEOs of Pilgrim's Pride, their subordinates and their counterparts at Claxton Foods.


It would be in the interests of the industry for this case to be resolved so that image and confidence can be restored.


Philippines Accepts County-Related Restrictions Following U.S. HPAI Outbreaks


Chick-NewsUSDA-FAS Gain report RB 2022-0020 released on April 1st updated official policy of the Department of Agriculture of the Philippines concerning issue of Sanitary Import Clearances.


Following discussions between USDA-APHIS and their counterpart, the Department of Agriculture Bureau of Animal Industry of the Philippines, the Nation would now impose only county-wide restrictions on importation of poultry products following outbreaks of HPAI.  In accordance with the 2016 agreement, Chick-Newsstate-level restrictions will be imposed when three or more counties in a single state are affected.  Accordingly, some states have been declared ineligible to export live birds and poultry meat other than heat-treated product.


Concern over the risk of importing HPAI through inspected products from the U.S. would seem to be an overreach given extensive outbreaks of HPAI in the Nation.


2020 U.S. Broiler Chicken Industry Sustainability Report Receives National Recognition


Chick-NewsThe National Agri-Marketing Association awarded first place to the U.S. Broiler Industry Sustainability Report. The Report advanced to the national level and competed against submissions from six other regions. The report features a Life Cycle Assessment commissioned by the National Chicken Council.


Chick-NewsMike Brown, President of the NCC stated, "This award is a collective effort on behalf of the entire U.S. chicken industry because we could not have made such significant environmental progress without the steadfast commitment of each farmer and processing company".


Essentially the advances in sustainability achieved in broiler production can be attributed to genetic progress with concurrent improvements in nutrition, promotion of flock health, housing and management in a coordinated approach to narrowing the spread between genotype and phenotype.


Poultry Meat Projection


Updated USDA-ERS Poultry Meat Projection for April 2022.

ERSOn April 15th 2021 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2020 (actual), a revision for 2021 and a forecast for 2022.


Broiler RTC production in 2021 updated from the March 2022 report reflected a 0.7 percent increase over 2020 to 44,898 million lbs. RTC (20.408 million metric tons.). Per capita consumption in 2021 was 0.7 percent higher compared to 2020 at 96.5 lbs. (43.9 kg.). Exports represented 16.4 percent of RTC production in 2021 attaining 7,367 million lbs. (3.349 million metric tons) comprising both RTC leg quarters and feet. The projection for 2022 is for 45,200 million lbs. (20.545 million metric tons) with a per capita consumption of 96.6 lbs. (43.9 kg.) and exports of 7,365 million lbs. (3.348 million metric tons).


Chick-NewsTurkey production for 2021 compared to 2020 was reduced by 3.2 percent to 5,558 million lbs. (2.526 million metric tons) RTC. Per capita consumption was lowered 2.5 percent to 15.3 lbs. (7.0 kg.) in 2021, despite extensive promotions and introduction of further-processed items. Export volume for 2021 was held at 550 million lbs. (0.250 million metric tons). Values for production and consumption of RTC turkey in 2021 are considered to be realistic, given the prevailing economy, lower poult placements, weekly productionChick-News levels and inventories.


The USDA provided a forecast for the turkey industry in 2022 comprising annual production of 5,470 million lbs. (2.486 million metric tons) with consumption of 15.4 lbs. (7.0 kg.) per capita.


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









Difference %

2021 to 2022






Production (million lbs.)





Consumption (lbs. per capita)





Exports (million lbs.)





Proportion of production (%)















Production (million lbs.)





Consumption (lbs. per capita)





Exports (million lbs.)





Proportion of production (%)






Source: Livestock, Dairy and Poultry Outlook released April 15th 2022


The projection takes into account forecast exports to China, ranked second by volume in 2021 with imports of 460,159 metric tons (512,587 metric tons, 2020) of chicken products including feet valued at $864 million. Average unit price for U.S. broiler exports including parts and feet but excluding imports by China, attained $1,139 per metric ton during 2021. Unit value to China was $1,862 per metric ton suggesting a high proportion of feet shipped.


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


Beef Packer CEOs To Testify


Chick-NewsRepresentative David Scott, Chairman of the House of Representatives Agriculture Committee has announced that the CEOs of the “Big Four” will testify at a hearing on April 27th.  Rep. Scott stated, “I am pleased to announce that the Chief Executive Officers of each of the four largest meat packers in the United States have agreed to testify at our upcoming Congressional hearing discussing cattle markets and price increases for consumers.”


Topics to be considered include alleged anti-competitive behavior in the meat industry.  The hearing will serve as a bookend for a panel of ranchers who will comment on consolidation and its effect on operations and profit ability. 



It is suggested that the CEOs of Cargill, Inc., Tyson Foods, Inc., JBS and National Beef Packing Company wear insulated trousers as they will surely be on the hot seat.


Hamlet Protein Quantifies Action of Antinutritional Soybean Meal Components


Hamlet ProteinResearch conducted at the University of Arkansas, funded by Hamlet Protein, evaluated the deleterious effect of stachyose and raffinose in soybean meal on the performance and intestinal function of broiler chicks. 


Chick-NewsDr. Alfred Blanch, Category Manager for Poultry at Hamlet Protein, noted “The studies showed a linear effect on the conversion rate of chicks.”  Above a level of 1.2 percent for stachyose and raffinose combined, feed conversion efficiency was reduced mainly due to a lower growth rate compared to controls”.


Dr. Guillermo Tellez of the University of Arkansas noted that high levels of the two antinutritional factors in soybean meal affect intestinal permeability, increase fecal moisture, and stimulate an immune response.  Chicks receiving levels of the antinutritional compounds at a level exceeding 1.2 percent showed higher heterophil to lymphocyte ratios in blood indicating an immunologic response correlated with stress. 


Hamlet Protein will continue to sponsor research on intestinal function in monogastric species with an emphasis on the intestinal microbiome as it is influenced by antinutritional compounds in diets.


Hamlet Protein processes soybean meal using a patented enzymatic and heat process to enhance digestibility and to inactivate antinutritional compounds resulting in enhanced growth rate and feed conversion in starter chicks and poults.


Aviagen Contributes to Mississippi State University Feed Mill


AviagenDr. Marc de Beer, President of Aviagen North America, has announced that his Company will contribute to the cost of theplanned feed mill at the Mississippi State University, Poultry Science Department, H.H. Leveck Animal Research Center. The facility will serve as a model for students and will supply feed for research herds and flocks.


Chick-NewsDr. Kelley Wamsley, Associate Professor of Nutrition and Feed Manufacture for the MSU Poultry Science Department, stated, “We pride ourselves on providing our students with practical, hands-on learning experiences to complement classroom teaching.  The investment in the feed mill allows us to increase student preparedness for employment on graduation and also allowing us to better serve the poultry industry to enhance research and feed milling workshops.”


JBS to Establish Cold Storage Facility in Colorado


JBS LineageA report in the Greeley Tribune noted that JBS in collaboration with Lineage Logistics Inc. has broken ground on a 200,000 square foot cold storage facility to be located in Windsor, CO.


The capacity of the cold storage unit will be equivalent to two billion cubic feet of meat products.  The position of the facility adjacent to the Great Western Railroad operated by OmniTRAX will facilitate shipment to West Coast ports and to satisfy demand in Pacific seaboard states. When completed the facility will consign up to twelve rail cars each week in addition to truck freight.



Multi-State Poultry Feeding and Nutrition Conference


Chick-NewsThe annual Multi-State Poultry Feeding and Nutrition Conference will be held concurrently with the Danisco Animal Nutrition and Health Technical Symposium on May 24th through 26th at the Crowne Plaza Indianapolis Downtown Hotel.  The Danisco Animal Nutrition and Health Technical Symposium is co-sponsored by Michigan State University, the Ohio State University, Purdue University, the University of Illinois at Urbana-Champaign and the University of Kentucky.


The annual Multi-State Conference brings together academia and industry with a focus on nutrition and the interactions among nutrition, disease and management.  Generally, presentations are inclined towards practical feeding of broiler, turkey and Chick-Newsegg production flocks.  The program is recommended for practicing poultry nutritionists, technical service veterinarians, and extension personnel.  The meeting is a suitable occasion to review prospective employees finishing their academic programs at collaborating Land Grant universities.


For details on registration contact Ms. Erica Wilson, Perdue University Conference Coordinator <ericaw@perdue.edu> (765) 494 7221.


Better Meat Company Introduces Foie Gras Alternative


Chick-NewsAlthough CHICK-NEWS is generally opposed to vegetable-based meat and poultry substitutes, the introduction of a foie gras substitute developed from fungal protein is welcomed.  The product is claimed to be indistinguishable from goose or duck liver that has undergone fatty degeneration, a pathological condition induced by force-feeding.



Introduction of the product is timely given the extensive and almost annual reoccurring outbreaks of HPAI in commercial waterfowl in France.  Foie gras has come under considerable legislative pressure in both the U.S. and the E.U. This suggests market opportunities for the substitute directed to consumers of real foie gras who should be justifiably reticent to eat the real product given the cruelty involved in its production.


USPOULTRY Processor Workshop


US PoultryIn an April 5th release, USPOULTRY announced that the 2022 Poultry Processor Workshop will be held May 18th and May 19th at the DoubleTree Hilton Downtown in Nashville, TN.


Chick-NewsProgram topics include pre-harvest best practices, analysis of microbial assay data, ready-to-eat validation on cooking and holding, water reuse and new technology including data collection and deboning.


For additional information on the Workshop including reservations and hotel accommodation, access <www.USPOULTRY.org>.


Consequences of HPAI in Texas Pheasant Farm


Chick-NewsAn outbreak of highly pathogenic Avian Influenza diagnosed in a flock of pheasants in Erath County, located in central Texas had export implications far beyond the value or purpose of the affected enterprise. At this time, exports of all poultry including eggs, turkey and broiler meat from Texas will be banned by China, Taiwan and Cuba among other importers.  Poultry exports from and through Texas to Mexico were disrupted for a day until resolved by negotiations with the veterinary authority in Mexico (SENASICA) to confine the ban to Erath County approximately 70 miles southwest of Fort Worth.



It is presumed that the affected flock was either allowed outside access or was housed in an exterior flight pen and exposed to two possible exposures from wild birds or alternatively, introduction of virus through suboptimal structural or operational biosecurity.


Plant-Based Alternatives to Meat are not Generating Profitability


Michael McCainIn a letter to shareholders, Michael H. McCain, President and CEO of Maple Leaf Foods conceded that the company investment in plant-based foods was non-profitable.  CHICK-NEWS has previously reviewed the relative financial performance of the Meat and Plant-protein segments of the company, highlighting declining sales, growing losses and an evident inability to achieve lower unit costs despite expanding production.


To his credit, McCain is the first CEO to clearly express the problems facing plant-based meat substitutes.  In his letter to shareholders, he alludes to difficulties including "product taste, the level of processing and appeal to the whole family".  CHICK-NEWS maintains that the high initial growth rate for meat substitutes was driven by a curiosity factor.  Although sixty percent of North American households have at some time tried plant-based meat alternatives, quality issues and price clearly mitigate against continued purchases.  Only a small affluent demographic is willing to pay extra for plant-based meat alternatives that wear the halo of ‘sustainability’. Projections of annual growth of 10 to15 percent for the ‘fake meat” category is considered to be unachievable.




Industry observers point to the relatively unsuccessful trials of plant-based burgers conducted by QSRs with some chains introducing then dropping plant-based menu options.  Losses as documented in the quarterly reports of Beyond Meat (BYND) and the restructuring of the management of Impossible Foods suggest that early venture capital investors in plant-based meat alternatives are reevaluating their expectations.


Hall County School District to Establish Training Center


Gainsville and Hall CountyHall County in the state of Georgia will receive funding to establish a training program for high school students in agriculture and meat processing.  It is intended to erect a processing plant costing between $4 and $5 million that will incorporate classrooms and test kitchens.  The purpose will be to encourage rural residents to select agriculture as a career option with an emphasis on meat production and processing.



Tofurky Successfully Overturns Louisiana Truth in Labeling Act


Chick-NewsIn 2019 the Truth in Labeling of Food Products Act was declared unconstitutional by Judge Brian A. Jackson of the Federal District Court for the Middle District of Louisiana.  Judge Jackson subsequently granted a motion of Summary Judgement on March 28th 2022 in favor of Total Island Foods, producers of Tofurky, a meatless turkey substitute.


At issue was the Louisiana Labeling Law concerning “false and misleading statements by plant based alternatives”.  The law specifically prevented manufacturers from representing food products as beef, pork, or poultry when the product was not derived from the relevant domestic animal. Since passage of the Chick-NewsLouisiana Act, there has been neither enforcement action nor consumer complaint.


In his ruling, Judge Jackson accepted the argument by the plaintiff that labeling of vegetable-based products “constituted protected commercial speech”.  The ruling also noted that the Act discriminated against plant-based products.  Commercial speech is protected by the Constitution of the United States. A substantial burden is placed on regulations that restrict commercial speech unless an unlawful activity or a substantial government interest is involved.


Industrias Bachoco to Delist


Chick-NewsThe Bours family, major shareholders in Industrias Bachoco S.A.B. de CV (IBA), have announced a tender offer for outstanding shares of the company followed by a delisting both on the New York Stock Exchange and the Bolsa Mexicana deValores.  The offer was priced at $40.83 representing a premium of 20 percent over the average share price over 30 days. IBA closed at $39.81 on March 29th but ended at $46.63 on March 4th. The share has traded over a 52-week range of  $36.98 to $47.80.


Chick-NewsIndustrias Bachoco is the major broiler producer in Mexico deriving 90 percent of revenue from poultry meat with the remainder from eggs and cattle.  The company owns OK Foods of Fort Smith, AR. that contributed 25% of revenue in FY 2021. On a trailing 12-month basis IBA generated returns of 6.1 percent on assets and 10.7 percent on equity. The Company achieved an operating margin of 7.4 percent and a 6.2 percent profit margin.



USDA Chicken Purchases


Chick-NewsOn April 1st the USDA-Agricultural Marketing Service announced purchase of chicken fajita strips for school lunch programs, child nutrition and related domestic food assistance programs.


The transaction comprised 215 tons of strips at a price of $3.60 to $$3.73 per lb.



The total purchased amounted to $1.58 million with the quantity to be delivered from June 1st through June 30th 2022.


RoboBurger™ Debuts at Jersey City Mall


Chick-NewsRoboBurger is a self-operating patented system to cook and serve restaurant-quality burgers.  The robotic installation follows a five-step cooking process including grilling the patty, toasting the bun, dispensing condiments followed by delivery all accomplished within six minutes.


Audley Wilson, Co-Founder and CEO of RoboBurger stated, " I started the company in my garage 17 years ago and now there couldn't be a better time to bring it to life and have everyone experience it".


Chick-NewsThe installation requires a footprint of twelve square feet, is self-operating, and incorporates a refrigerator, griddle and cleaning system conforming to National Sanitary Foundation Standard / ANSI 25.


SCOTUS Will Consider NPPC Appeal Over California Proposition #12


Chick-NewsFollowing an appeal to the Supreme Court of the United States (SCOTUS), the National Pork Producers Council and the American Farm Bureau Federation were granted certiorari.  The case arises from a ruling by the U.S. Court of Appeals for the Ninth Circuit in favor of the State of California and against the National Pork Producers Council and the American Farm Bureau Federation regarding the constitutionality of Proposition #12.  This measure was adopted in November 2018 and imposes minimum space requirements in common for livestock and poultry for both within state producers and suppliers to California. At issue is the right of the State of California to prevent introduction of pork products produced using sow gestation crates in other states.


Even if Proposition #12 is set aside, it will have minimal effect on the egg industry that has converted conventional cages to aviary and barn systems to supply California and the states that have adopted legislation banning cages.


Chick-NewsIt is noted that regulations framed in consistency with Proposition #12 have yet to be formally released by the California Department of Food and Agriculture. In accordance with a court ruling, pork derived indirectly from producers using gestation crates for sows can be introduced into California in the interim.


Notwithstanding the outcome of the case, pork producers are facing consumer and customer demands to convert to group housing of sows. Counter-arguments to retention of gestation crates have a hollow ring in the face of a quarter of the industry having adopted the change. We remember the justifications advanced by advocates of starvation molting of hens and retention of cage confinement.


Perdue AgriBusiness to Invest $60 Million in Chesapeake, VA. Soybean Facilities


Perdue AgriBusiness has initiated an upgrade program to receive, store, process and ship soybeans in facilities producing soybean meal, oil and hulls.


The project will receive a $500,000 performance-based grant and a $450,000 from the Virginia Agriculture and Forestry Industries Development Fund.  Perdue AgriBusiness is an independent operating company of Perdue Farms Inc. operating 75 elevator locations, a deep-water port, trans-loading facilities and oilseed crushing.



McPlant Test Reveals Lack Of Consumer Acceptance


Chick-NewsAccording to The Ag Watchdog circulated by the Center for Consumer Freedom, the test by McDonald’s Corporation of the Beyond Meat McPlant menu item has shown poor consumer acceptance, especially in suburban and rural areas.  Since mid-February, the company has been testing the product in selected locations in California and Texas as reported by Restaurant Business .


Preliminary evaluation by analyst Peter Saleh of BTIG has evidenced a reluctance by franchisees who are not participating in trials to request the product.  Apart from considerations such as taste and texture, franchisees are concerned over disruption of kitchen routines and slowing of service that appears to be inherent to the McPlant menu item that is prepared to order.




Competitors of McDonald’s Corporation are testing plant-based products including the Impossible Whopper by Burger King.  Some regional chains have introduced and then dropped plant-based burgers and alternatively to products including Dunkin’ brands and Tim Horton’s.


Disruptions by Canadian Pacific Railway Strike Averted


Workers represented by the Teamsters Union of Canada have agreed to enter into binding arbitration in their dispute with the Company.


Keith Creel the president of Canadian Pacific stated, “This agreement enables us to return to work effective noon Tuesday, March 22nd to provide essential services for customers and the North American supply chain.”

The labor dispute suspended operations for 72 hours and if it had been extended could have impacted transport of fertilizer required by farmers in advance of spring planting  expected to commence in April.


In 2019, Canadian National Railway Company endured an eight-day strike that cost $200 million as a result of delays in delivering fertilizer.


Canadian Pacific employs approximately 3,000 locomotive engineers, conductors, and yard workers across Canada, all represented by the Teamsters Canada Rail Conference.


Monthly Turkey Production and Prices, March 2022


Poult Production and Placement:

The March 16th 2022 edition of the USDA Turkey Hatchery Report, issued monthly, documented 27.30 million eggs in incubators on March 1st 2022 compared to 26.15 million eggs on March 1st 2021* The March set was up 2.3 percent (0.63 million eggs) from the previous month of February 2022.


A total of 21.35 million poults were hatched during February 2022 compared to 20.71 million in January 2021*. The February 2022 hatch was up 5.8 percent (1.3 million poults) from the previous month of January 2022.


A total of 19.48 million poults were placed on farms in the U.S. in February 2022, compared to 19.00 million in February 2021*. The February placement was 2.3 percent, (0.49 million poults) more than the previous month of February 2021. This suggests disposal of 1.87 million poults during the month, therefore approximately 8.8 percent of the February 2022 hatch was not placed.


For the twelve-month period March 2021 through February 2022 inclusive, 265.8 million poults were hatched and 248.1 million were placed. This suggests disposal of 17.63 million poults over the 12-month period, corresponding to 6.6 percent of all poults hatched.

* USDA revision from previous monthly report.


Veterinary Research To Benefit From USDA Funding


The National Institute of Food and Agriculture (NIFA) has announced $13 million in funding for research projects to improve animal health and to prevent both erosive and catastrophic diseases.


The director of NIFA, Dr. Carrie Castille stated, “The health of agricultural animals is critical to ensuring the U.S. maintains a safe and adequate food supply.”  She added, “The research we are funding with these grants will create new knowledge and spur discoveries that enhance production efficiency and improve animal health and welfare.”  Twenty-four grants were extended to 17 universities involving aspects of disease prevention, management and production of vaccines.


  • Cornell University will develop a vaccine to protect against swine influenza virus. 
  • Texas A&M University will receive $625,000 to suppress Marek’s disease with special reference to the probability of emergence of new strains of the virus. 
  • The University of Illinois will receive $90,000 to undertake research on a protozoan parasite, Cryptosporidium parvum, responsible for intestinal dysfunction in immature ruminants.  The organism is also pathogenic in wildlife species.


Broiler Producers in South Korea Fined for Collusion


According to press reports including a detailed article in The Korea Herald, the Fair Trade Commission of South Korea imposed fines totaling $150 million on sixteen broiler companies.  It was alleged that the companies colluded between November 2005 and July 2017 to fix prices. The companies involved represent close to 80 percent of national production.  Harim, the largest producer was ordered to pay $33 million with lesser amounts assigned to smaller producers.


In addition to the civil penalties, the Commission has forwarded documentation to the equivalent of the U.S. Department of Justice to consider criminal prosecutions.


In 2021, the Fair Trade Commission in South Korea imposed fines totaling $21 million on seven broiler companies for colluding to coordinate the price of ginseng chicken soup over a six-year period.  Again, Harim paid the largest fine based on their output.


Collusion among large companies within an industry is common in Korea, but Government policy disfavors traditional business practices and supports free enterprise and competition for the benefit of consumers.


Harim is the owner of Allen Harim that acquired Allen Family Foods in 2011 in a bankruptcy sale and the Company now functions as Harim Allen. The multi-generational family-owned enterprise was established in 1919 in Seaford, DE.


MHP in Ukraine Faces Financing Crisis


The war in Ukraine has seriously impacted the operations and sales of MHP, the largest broiler producer in the nation.  Accordingly, the company has requested a nine-month extension of the grace period to delay paying interest on loans.  The Company requires working capital to plant crops required for flocks. In a company statement MHP noted, “Realization of the sowing campaign will be crucial for the continuity of the business.  The success of the harvest is also expected to contribute to food security in Ukraine and internationally.”

Between 2014 and 2015, the company lost over $520 million with return to profitability in 2016 with a net positive of $17 million.


Following the invasion of Ukraine by Russia, the national bank of Ukraine prohibited international payments preventing MHP honoring loan commitments, even if funds were available.



Panera Joins The Chicken Wars With New Sandwiches


Panera has announced that, effective March 30th, it will begin serving the Signature Take and the Spicy Take versions of a chicken sandwich.


The sandwich will be served in a recyclable box to protect the brioche roll and preserve the integrity of the sandwich and its sauces.  Sandwiches will cost $10.99 and will initially be promoted with an offer of a free beverage.


J.B. Hunt to Expand Container Capacity through BNSF Railway


J.B. Hunt Transport Services has announced that it will increase the intermodal container fleet to 150,000 units over a four-year period, representing a 40% increase over capacity at the end of 2021.  The project will be carried out in cooperation with BNSF Railway and will include improvements to increase the rate of re-cycling containers and eliminate bottlenecks.  The intention is to increase the number of containers in operation currently limited by restraints in supply chains.



John Roberts, President and CEO of J.B. Hunt Transport Services stated, “Together our company and BNSF will enhance their work to bring back the consistency and reliability customers expect with intermodal services and further embrace intermodal conversion and trans-loading services.”


Both companies will apply a freight-matching platform that will hopefully transfer eight to nine million loads from highways to rail.


Burger King Initiates Withdrawal From Franchise Agreement In Russia


Burger King is negotiating to divest their 15% equity in the Russian company holding the master franchise for the Brand.  Partners include oligarch Alexander Kolobov and VTB Capital and other institutions currently under international sanction.  The consortium operates 800 Burger King restaurants in Russia.  As an immediate response to the invasion of Ukraine by the Russian Federation, Burger King suspended support for the company.


According to David Shear, International President of Burger King, Kolobov has refused to close restaurants as requested, but Burger King is unable to enforce this action as a minority shareholder. The Company has committed to direct profits from Russian business, if any, to the United Nations Refugee Agency.  The company has already made a donation of $1 million to assist as many as three million Ukranian women, children and the elderly, who were forced to leave their homeland


Mercy for Animals Using Billboards to Pressure Retailers


According to a posting on The Ag Watchdog circulated by the Center for Consumer Freedom, welfare activist group Mercy for Animals, placed a billboard in Times Square pressuring Target Corporation to comply with the “Better Chicken Commitment”.  This standard is based on the Global Animal Partnership (GAP) mandate requiring controlled-atmosphere stun-to-kill avoiding live-dumping and shackling.  After 2024 the Global Animal Partnership standards dictate a maximum biomass of six pounds per square feet of housing and an enriched environment.  By 2026, the standard requires a “slow-growing” strain. All of these measures will impact cost of production and if widely adopted will be inflationary increasing prices paid by customers and hence consumers.


To date Perdue Farms and Wayne Farms among the large broiler integrators have agreed to comply with selected parts of the standard.  The organizers of the initiative claim to have received commitments from 200 food manufacturers, restaurants, food service companies and retailers to source chicken from suppliers conforming to at least the lowest standard of welfare as outlined in the GAP requirements.



House Passes Omnibus Appropriations Package


After months of bipartisan negotiations, the House released a $1.5 trillion omnibus appropriations package designated H.R. 2471 covering fiscal year 2022.


To gain support of democratic representatives, speak of the house Nance Pelosi stripped the Bill of $15.6 billion in COVID relief much of which was designated for international programs.  The Bill included $14 billion for Ukraine and humanitarian relief and military support.




The Bill contained $733 billion for non-defense spending, $782 billion for defense spending and $112 billion for veteran affairs.


Agriculture fared well with $25 billion in discretionary funding for food and agriculture programs.  $5 million for the sustainable agriculture research education program.  Increased support for the Special Supplemental Nutrition Assistance Program for Women Infants and Children (WIC). The Bill did not include a waiver for school meals that will result in expiration of special coronavirus-era federal programs.


The Bill was subsequently approved by the Senate and signed by the President avoidinf a federal shutdown


Smithfield Foods Concludes Contract with Teamsters Union


Smithfield Foods announced that recently concluded negotiations for an extension of a labor agreement for the Smithfield. VA. plant was ratified by 98 percent of members.


The Teamsters Local 822 obtained a $2 rise in starting wage together with benefits and increases over the next three years.






Smithfield Foods estimates that the contract is valued at more than $29 million over three years The increase in wages and benefits reflects the current inflationary environment and the growing power of labor even in rural areas.



USDA Approves Higher Line-Speeds at Three Plants


The USDA-FSIS has approved faster line-speeds for hog plants in Pennsylvania, Minnesota and Nebraska. 


A previous 2019 rule allowing line-speeds faster than 1,106 hogs per hour was invalidated in 2021 following a petition from the United Food and Commercial Workers Union, alleging safety issues although with no justification or substantiation for the claim.


The Union has accepted the higher line speeds subject to increasing staffing, representing a compromise, although adding to cost borne by both shareholders of packing companies and ultimately consumers.


Producers and Packers in Conflict Over USDA-AMS Transparency Program


The recently enacted fiscal year 2022 Omnibus Appropriations legislation included a provision extending the Livestock Mandatory Reporting Program.  The intent was to provide producers with real-time market information and to increase transparency in cattle prices. The action by Congress follows Administration concerns over consolidation in the beef industry with slightly more than 85 percent of all cattle slaughtered by four companies.


Ethan Lane, Vice President of Government Affairs for the National Cattlemen's Beef Association, stated “This pilot program will allow USDA to work on the model for a contract library that works for everyone in the supply chain, while Congress and industry continue to work out the details of a permanent library.” 

The North American Meat Institute (NAMI) representing packers ctiticized the Congressional action on the basis that business information would be disclosed to the USDA with the likelyhood of subsequent publication.  Julie Anna Potts, CEO of NAMI, stated “Congress and the Administration say they value transparency in the beef and cattle market, yet they bury this rider without debate in a giant spending bill and direct USDA to create a pilot program without any feedback from beef companies or cattle producers.”  The NAMI maintains that there is adequate price discovery under the Livestock Mandatory Reporting Act.  NAMI believes that cattle producers have access to regular AMS publications covering time periods, regions, and actual price data, since packers are obliged to report all beef transactions daily through the Box Beef Report. This is posted twice daily on the USDA DataMart website.


In contrast, the broiler industry is integrated and despite consolidation, there are in excess of 50 companies participating in production with more than 170 processing plants in operation.  Payment to contract growers and egg producers is subject to the restraints of regulations framed in terms of the Packers and Stockyards Act and contract terms between integrators and growers have received increased scrutiny under the current Administration with initial concerns over duration of contracts and the tournanment system.


At this time it does not seem likely that additional regulations or constraints will be imposed on the broiler industry.  An outstanding issue is the status of the proposed acquisition of Sanderson Farms by a consortium of Continental Grain Company and Cargill Inc. that would create a larger version of Wayne Farms, but would not alter the relative position among the top-five Company broiler producers.


MHP in Ukraine to be Impacted by Invasion and Disruption


Despite an optimistic statement from executive chairman John Rich, MHP, Europe’s second largest broiler producer, will be impacted by the invasion.


According to available information, MHP operates a number of complexes in Vinnytsya (West Central Ukraine); Cherkasy (Central); Dnipropetrovska (East) and Ivano-Frankivska (West).  At the present time, the first two complexes are beyond the zone of conflict. In recent days Ivano-Frankivska, in relative proximity to the border with Poland, has suffered from aerial bombardment.  In theory the company could continue operation although it is noted that the supply chain has been seriously impacted. Feed ingredients stored for production will soon be depleted, power will become a limiting factor together with non-availability of labor and fuel.

It is estimated that MHP represents 50 percent of national production and supplies 400 tons annually to the market in Ukraine.


Agricultural exports from Ukraine including eggs and poultry meat have ceased and MHP is now committed to providing product to hospitals and the voluntary military as long as stocks last.


Seaboard Triumph Cited by Department of Labor


Following an investigation, the U.S. Department of Labor determined that 413 employees were underpaid for work performed before and after their shifts.  The determination resulted in payment of $331,000 in back wages to affected employees.


At issue was work performed for set-up of workstations, knife sharpening and post-shift clean-up for which workers were not paid.  This constituted a violation of the Fair Labor Standards Act.


Triumph failed to maintain accurate payroll records for the Sioux City, IA. plant and did not pay overtime at the designated hourly rate when workers exceeded 40 hours in any week.


In mitigation, Seaboard Triumph stated that it is corporate policy to pay workers for labor before and after shifts. Following the Department of Labor audit has introduced procedures to prevent a recurrence of deficiencies that were disclosed.


“NIMBY” Evident in Scio, OR


Not In My Backyard (NIMBY) is alive and well in Scio, OR. where local residents are opposing the establishment of three broiler grow-out farms that would supply Foster Farms.  Opposition was initiated in August 2021 when J&S Ranch announced the project that would be located in proximity to the North Santiam River.


Opposition is based on the usual expressed factors including dust, water pollution, and traffic. Actual motivation is based on perceived loss of property value, resistance to progress and in some cases financial envy.






Farms must receive approval for construction in addition to obtaining state permits to operate. In their application to the Oregon Department of Agriculture, J&S Ranch confirmed that broiler litter would be composted on site and would be converted to high-value fertilizer. This would negate the argument that the project would degrade water quality in the Santiam River.


Scio has a population of approximately 850 and is located in Linn County in Northwest Oregon.  Linn County extends eastward from I-5.  Corvallis, location of Oregon State University is in neighboring Benton County. 



U.S. Department of Justice Investigating Allegations of Anticompetitive Wage Practices


Pilgrim's Pride Corp has been notified by the Department of Justice that a civil antitrust investigation has been initiated regarding anticompetitive sharing of employment practices and wage rates.


The investigation apparently arises from allegations that informal meetings occurred concurrently with an industry educational conference.  It was alleged that wage rates and practices were discussed in closed session that could constitute an anticompetitive activity.


The Department of Justice has informed major integrators that documentation relating to employment conditions, wages and benefits must be preserved.



Mexico Lifting Export Bans on States with Backyard AI Outbreaks


According to a circular mailed by the USAPEEC, authorities in Mexico have lifted a ban on states reporting outbreaks of highly pathogenic avian influenza in noncommercial and backyard flocks.  The nation has retained statewide bans on Indiana, Kentucky and Delaware and presumably will impose restrictions on IA, Missouri and states subsequently reporting cases of H5N1 avian influenza in commercial flocks. 


Most nations trading with the U.S.  have adopted the World Organization for Animal Health (OIE) principle of regionalization.  Banning an entire state when only a single county is involved is not based on the epidemiology of avian influenza. An outbreak in a small commercial unit in East Texas should not affect the ability of a producer 600 miles distant in far West Texas from exporting. In some situations during the present series of outbreaks an affected county is adjacent to a second unaffected county in an adjoining state. Banning the entire state with 100 counties as a precautionary measure while ignoring an adjacent neighboring county in an unaffected state is illogical.  Banning export or movement through an affected county and possibly contiguous counties could be justified but applying a blanket ban on an entire state is inconsistent with current international regulatory approaches. Applying regionalization, an outbreak in Newcastle County, Delaware, close to the point of intersection with the states of Pennsylvania and Maryland, could require suspension of exports not from the entire state of Delaware but restrictions could be imposed on contiguous counties in adjoining states if located within a control zone, until freedom from infection is demonstrated through surveillance.



Update on Production and Poultry Imports by Mexico


USDA-FAS GAIN report MX2022-0005 dated March 1st included projections for chicken production and consumption during 2022.  Domestic output will attain 3.90 million metric tons, approximately 2.2 percent higher than in 2021.  Imports will increase by 3.2 percent to 960,000 metric tons. Imports represents 25 percent of projected 2022 availability of chicken. Based on the volume of chicken imported by Mexico in 2021 and the USDA export value of 718,680 metric tons the U.S. supplied 77.2 percent of the import market to Mexico. Exports of chicken products from Mexico, presumably to Guatemala are inconsequential at 8,000 metric tons.



Given a population of 130 million, per capita consumption of the available 4.852 million metric tons will amount to 82.1 lb.  Chicken accounts for almost 60 percent of meat consumed based on price and availability. Current prices of animal protein with the escalation in price expressed as a percentage in 2021 are:-

  • Beef $3.70/lb. (21.6 %)
  • Pork $1.90/lb. (13.4 %)
  • Chicken meat $1.64/lb. (5.7 %)
  • Shell eggs $1.25 per dozen (5.7 %)


The FAS post in Mexico City attributes the increase in production of chicken to restoration of tourism and the economy as COVID wanes.  There is also an increased demand for mechanically deboned meat and leg quarters for further processing.


In 2021, Mexico was the top-ranked importer of U.S. chicken receiving 718,680 metric tons valued at $837 million with a unit price of $1,165 per metric ton.  Compared to 2020, the volume of imports was up 3 percent although value rose by 46 percent.


Mexico is also the largest importer of U.S. turkey with 2021 shipments of 169,736 metric tons valued at $449 million with a unit price of $2,645 per metric ton.  Volume of imports compared to 2020 increased by two percent but value was 19 percent higher.


USDA Chicken Purchases


On February 25th the USDA-Agricultural Marketing Service announced purchase of chicken products for school lunch programs, child nutrition and related domestic food assistance programs.





The transaction comprised:-

  • 2,554 tons of bulk frozen whole chicken at a price range of $1.11 to $1.47 per lb.
  • 312 tons of split breasts at a price of $2.83 to $2.95 per lb.
  • 780 tons of boneless IQF breasts at a price of $3.20 to $$3.98 per lb.


Total quantity purchased amounted to $13.9 million with the 3,746 tons to be delivered from April 1st through June 30th 2022.


Hormel Posts Q1 Results for FY 2022


In a release dated March 1st Hormel Foods (HRL) reported on the first quarter of fiscal 2022 ending January 30th 2022.  For the quarter the company earned $239.6 million on revenue of $3,044 million with an EPS of $0.44.  Comparable values for Q1 of fiscal 2021 were net income of $222.2 million on revenue of $2,461million with an EPS of $0.41.


For the most recent quarter the Jennie-O Turkey Store segment generated sales of $384.5 million with an operating profit of $43.7 million.  For the first quarter of fiscal 2021, revenue was $333.3 million and operating profit $26.9 million.  Volume in the Jennie-O segment was down three percent but sales value was higher by fifteen percent with the Segment contribution up 62 percent. Growth was derived from a return in food service, demand for whole birds and branded products. An increase in feed and logistic costs challenged earnings but were absorbed.


In commenting on results, Jim Snee, Chairman, president and CEO stated, “We continue to take transformative actions at Jennie-O Turkey Store and are starting to see the benefits. We have a plan for the integration of all business functions into the broader Hormel Foods organization, including our supply chain, selling organization and marketing team. Our actions will lead to a more demand-oriented and optimized turkey portfolio that is better aligned with the changing needs of our customers, consumers and operators. This is expected to result in improved long-term growth, higher profitability and lower earnings volatility."


The Company release noted “Beginning in the first quarter, the Jennie-O Turkey Store team implemented a program to optimize our commodity portfolio while simultaneously increasing investments into branded, value-added products. Additionally, the company integrated the Jennie-O Turkey Store and Hormel Foods research and development teams. The company plans to integrate other business functions, such as the selling organization and marketing teams, into the broader Hormel Foods organization by the start of fiscal 2023.


The report added that closure of the Benson Avenue production facility remains on track for the second quarter of fiscal 2022. Further, the company will integrate the Jennie-O Turkey Store supply chain into the broader Hormel Foods One Supply Chain by the start of fiscal 2023. 


The company expects the Jennie-O Turkey Store business to deliver higher growth and profitability along with other financial benefits, including increased asset efficiency, higher manufacturing throughput, better labor utilization and avoidance of capital expenditure. The company expects these changes will drive selling, general and administrative cost synergies of approximately $20 to $30 million annually by fiscal 2023.


Hormel Foods has a market capitalization of $26.3 billion and had traded over the past 52 weeks in a range of $40.48 to $50.74 with a 50-day moving average of $48.19.  HRL trades with a forward P/E of 29.2 and a beta of 0.1.  For the trailing 12-month period, operating margin attained 10.0 percent and profit margin 8.0 percent.  The company has generated returns on assets of 6.3 percent and on equity 13.6 percent. HRL closed at $47.63 on February 28th but rose sharply at the open following the release to trade at $49.63 at 13H00 on March 1st.


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


USDA Funding to Expand Processing of Red Meat and Poultry


In accordance with Executive Order 14,017 designated "America's Supply Chains" the USDA will make available $150 million for grants to fund startup and expansion projects in the meat and poultry sectors.  The USDA Rural Development component will make $150 million available from the American Rescue Plan Act through the Meat and Poultry Processing Expansion Program.  Grants will be available for up to $25 million to expand processing capacity including construction, expansion and the purchase and installation of equipment.  Grants will be extended to "smaller farms and ranchers, new and beginning farmers and ranchers, Tribes, socially disadvantaged producers, military veterans and underserved communities".


USDA National Institute of Food and Agriculture will invest $40 million through workforce development programs to enhance the availability of trained workers in processing.

USDA will make available $25 million to partnerships with organizations to provide technical assistance to applicants, recent recipients and future applicants under the Meat and Poultry Processing Expansion Program.


The expenditure of $250 million in public funding follows the policies of the current Administration that appear to be driven by the need to expand both red meat and poultry production and processing. The bias is towards small-scale and by definition inherently inefficient producers. This is somehow regarded as creating competition for existing large red meat packers and established broiler and turkey integrations.


As previously stated, applications should receive the same scrutiny as would be applied by a commercial lending institution and progress should be monitored to ensure that taxpayers’ funds are judiciously invested.


National Chicken Council Petitions for Cautionary Labeling of Raw Chicken Products


In an update to a 2016 petition to the Food Safety and Inspection Service, the National Chicken Council is requesting mandatory labeling of raw-stuffed chicken products that may appear to consumers to be ready-to-eat.  The petition covers breaded, pre-browned chicken, Cordon bleu, and Chicken Kiev and chicken breasts stuffed with broccoli and cheese. Consumer research conducted by the National Chicken Council disclosed that enhanced labeling would increase consumer compliance with thorough cooking and would thereby contribute to food safety.


The National Advisory Committee on Meat and Poultry Inspection (NACMPI) agreed in September 2021 that labeling should reflect the requirement for thorough cooking of these products that are not suitable for either microwave or air fryer preparation.  The NACMPI supports the National Chicken Council Petition.


The Agency was requested to initiate rule making requiring that not-ready-to-eat stuffed chicken breast products should be labeled prominently so that consumers recognize them as raw. Labels should provide information on adequate handling and cooking to ensure freedom from bacterial infection.  The National Chicken Council has also requested the Food Safety and Inspection Service to publish a Compliance Guideline on how to validate cooking instructions for the designated products.



Broiler Integrators Settle Lawsuits with Contractors


Tyson Foods and Perdue Farms have received final approval for settlements in class action lawsuits alleging collusion to reduce grower payment.  District Judge Robert J. Shelby of the U.S. District Court for the Eastern District of Oklahoma has approved payments by Tyson of $21 million and Perdue of $14.7 million. Both integrators will cooperate against other class action defendants.  These include Koch Foods, Pilgrim’s Pride, and Sanderson Farms. 


Of the $35.8 million settlement, legal counsel will receive $11.9 million in fees and $2.3 million in reimbursement.  As is customary with settlements, the defendants did not admit to wrongdoing and claimed that settlement was motivated by desire to minimize legal costs and to prevent additional dilution of managerial effort.



Recent Outbreak of SE in Sweden traced to Beef from Poland


The National Public Health Agency of Sweden performed a traceback investigation implicating undercooked hamburgers using meat imported from Poland.  Salmonella Enteritidis was recovered from samples of ground meat common to eleven of the fifteen patients applying whole genome sequencing.  News reports in various media did not indicate the number of the school ski-team exposed so it is not possible to establish the attack rate.



This case confirms the need to cook hamburgers to an internal temperature of 165F for at least 30 seconds to destroy foodborne non spore-forming bacterial pathogens including Salmonella, E.coli and Campylobacter.


Joe F. Sanderson Jr. Inducted into Mississippi Hall of Fame


Joe F. Sanderson Jr., Chairman and CEO of Sanderson Farms has been inducted into the Mississippi Top-50 Hall of Fame in recognition of his many contributions to the state.  He leads Sanderson Farms, the only Fortune 1,000 Company in Mississippi. He has served on a number of bodies including the Governor's Restart Mississippi Commission and Vice-president of the Governor's Commission on Recovery Rebuilding and Renewal.  He serves as a trustee for Millsap's College and the Mississippi Chapter of the Nature Conservancy.


Maple Leaf Plant Protein Group Extends Losses


The results from the 4th quarter of Fiscal 2021 released on February 24th confirm the difficulty deriving profit from manufacture and sale of plant-based meat substitutes. 


For the quarter, the Plant Protein segment of Maple Leaf generated revenue of $35.5 million, a 13.3 percent decrease over the corresponding 4th quarter of fiscal 2020 with a value of $41.0 million.  Gross profit for the 4th quarter of fiscal 2021 was $7.8 million compared to a loss of $(4.5) million in fiscal 2020.  For the quarter, the Plant Protein segment lost $(37.3) million compared to a loss of $(25.1) million in Q4 of FY2020.  The EBITDA margin for the 4th quarter was  -97 percent. 

For FY 2021ending December 31st 2021, the Plant Protein segment posted sales of $143.6 million that generated a negative contribution to operating earnings of $(110.8) million and an adjusted EBITDA margin of -69 percent.


The Plant Protein segment comprises refrigerated plant protein products, grain-based protein and vegan cheese distributed to retail, food service and industrial channels. The major brands marketed by Maple Leaf Foods include Lightlife® and Field Roast Grain Meat Company™.


Maple Leaf posted disproportionately high sales, general and administrative (SG&A) expenses in relation to sales "reflecting the evolution of the company's plant protein strategy to drive sales growth and secure market share and a rapidly growing market".  It is evident that Maple Leaf has invested in advertising and promotion to create brand awareness and to expand distribution.  During FY 2021, Maple Leaf reduced previously high SG&A expenses to $103.6 million compared to $112.3 million for FY 2020. Despite judicious trimming, SG&A expenses were equivalent to 72.1 percent of sales in FY 2021 compared to 68.3 percent of sales for the previous year.


In the Q4 report, Michael McCain, CEO of Maple Leaf commented “The Company has made significant progress in the critical review of the Plant Protein category announced in late 2021. While work is continuing, analysis to date demonstrates a clear slowdown in projected growth rate for the overall category compared to very high growth rates predicted in 2019. The Company will therefore be adjusting its strategy and investment thesis and is setting a new target to deliver neutral or better Adjusted EBITDA within an 18-month timeframe.


(Subscribers are directed to the review of the Q4 and FY 2021 report of Beyond Meat Inc.(BYND) in this edition and retrievable under the SEARCH tab in April)


Beyond Meat Reports on Q4 and FY 2021


In a press release dated February 24th Beyond Meat Inc. (BYND) announced results for the 4th Quarter and FY 2021 ending December 31st 2021.     


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)

Fiscal Year Ending December 31st



Difference (%)





Gross profit:




Operating income/ (loss):




Pre-tax Income/ (loss)

Net Income/ (loss)







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:




           Return on Assets    (%)




           Return on Equity    (%)




           Operating Margin   (%)




           Profit Margin          (%)




Total Assets




Market Capitalization





For Q4 2021 net loss was $(80,371) million on sales of  $100,678 million with a diluted EPS of $(1.27)

For Q4 2020 net loss was $(25,077) million on sales of  $101,937 million with a diluted EPS of $(0.40)


For FY 2021:-

52-Week Range in Share Price:  $42.67  to  $162.78    50-day Moving average  $62.93

Forward P/E  667                  Beta 1.5

Insiders hold 9.8 percent of equity, Institutions 63.0 percent.

As of January 31st 2022, 35.6 percent of float was short.



For FY 2021 U.S. sales represented 68.8 percent and International 31.2 percent

    Of U.S sales 76.1 percent were through retail channels, down 7.9 percent from FY 2020

    Of U.S sales 23.9 percent were through food service channels, up 25.9 percent from FY 2020

Despite a 14.2 percent increase in sales gross margin declined from 30.1 percent to 25.2 percent suggesting inflation in ingredient costs and failure to achieve economies of scale BYND posted a 57 percent increase in SGA to $209.5 million compared to FY 2020.  R&D expenditure more than doubled to $66.9 million. The CEO referred to the need to control costs in his comments below.


In commenting on results Ethan Brown president and CEO commented, "In 2021 we saw strong growth in our international channel net revenues, as well as sporadic yet promising signs of a resumption of growth in U.S. foodservice channel net revenues as COVID-19 variants peaked and declined. These gains, however, were dampened by what we believe to be a temporary disruption in U.S. retail growth, for our brand and the broader category. Despite the variability and challenges of the year, we did not deviate from building the foundation for our long-term growth. The investments we made in our team, infrastructure, and capabilities across the U.S., EU, and China, as well as extensive product scaling activities for key strategic partners, weighed heavily on operating expenses and gross margin during a fourth quarter and year that were already impacted by lower than expected volumes. However, we believe these investments will be instrumental in driving our long-term growth."


Brown concluded, "As we begin 2022, we are pleased with the progress we are making against our long-term strategy, such as the number of tests and core menu placements recently announced by our global QSR partners. Though we will continue to invest during 2022, we expect to substantially moderate the growth of our operating expenses as we leverage the building blocks we now have in place to serve our customers, consumers, and markets — bringing forward our exciting and expansive future one delicious serving at a time."



Subscribers are referred to the FY 2021 results for the Plant Protein Segment of Maple Leaf Foods in this edition.


Maple Leaf Foods Reports on Q4 and FY 2021


In a press release dated February 24th Maple Leaf Foods Inc. (MFI-TO) announced results for the 4th Quarter and FY 2021 ended December 31st 2021.


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

4th Quarter Ending December 31st.



Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income1







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:




           Return on Assets    (%)




           Return on Equity    (%)




           Operating Margin   (%)




           Profit Margin          (%)




Total Assets

 Intangibles and goodwill % of assets






Market Capitalization





For FY 2021: Net earnings of $80.2 million on sales of $3,526 million with a diluted EPS of $0.64

For FY 2020: Net earnings of $88.4 million on sales of $3,357 million with a diluted EPS of $0.71


Q4 2021 Meat Protein Segment:

Sales, $1,085 million, up 0.5% from Q4 2020.

Adjusted operating earnings $77.8 million down 15.4% from Q4 2020.


Q4 2021 Plant Protein Segment:

Sales, $45.5 million, down 13.3% from Q4 2020.

Adjusted operating loss $(47.8) million 48% deterioration from Q4 2020.

52-Week Range in Share Price:  $18.95  to  $25.43   50-day Moving average  $23.37

Forward P/E 19.4      Beta  0.3

Market            Close pre-release February 23rd $24.74  

Market            Close post-release November 4th  $21.74 (-12.0%). 


Insider shareholding 39.2%. Institutional shareholding 24.6%


In commenting on Q3 results Michael H. McCain, president and CEO of Maple Leaf Foods stated “In a challenging environment we delivered another record year in 2021 in our Meat Protein business," He added "While Q4 saw an unexpected tornado of supply chain chaos driven by the Omicron COVID variant, our team is resilient and we expect this storm to pass quickly. For the year, Meat Protein sales grew 8% and we delivered record Adjusted EBITDA of $527 million."


With respect to the Plant Protein Segment McCain commented, “We have completed our analysis of both category and consumers to arrive at material new insights that are leading us to adjust our business model of investment matching a revised view of sustainable long-term growth rates. We now expect steady, but not spectacular growth in this category, and appropriately will adjust the business model to be Adjusted-EBITDA neutral or better within the next 18 months".

The Company provided the following guidance:-


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


Plant Protein: The Company has made significant progress in the critical review of the plant protein category announced in late 2021. While work is continuing, analysis to date demonstrates a clear slowdown in projected growth rate for the overall category compared to very high growth rates predicted in 2019. The Company will therefore be adjusting its strategy and investment thesis and is setting a new target to deliver neutral or better Adjusted EBITDA within an 18-month timeframe.


Monthly Turkey Production and Prices February 22nd 2022


Poult Production and Placement:

The February 16th 2022 edition of the USDA Turkey Hatchery Report, issued monthly, documented 26.72 million eggs in incubators on February 1st 2022 (26.15 million eggs on February 1st 2021*) and down 0.5 percent (0.1 million eggs) from January 1st 2022.


A total of 22.56 million poults were hatched during January 2022 (22.25 million December 2021*), representing an increase of 4.9 percent (1.1 million poults) from January 2021.


A total of 20.74 million poults were placed on farms in the U.S. in January 2021, (20.31 million in December 2021*), 5.0 percent (1.0 million poults) more than in January 2021. This suggests disposal of 1.82 million poults during the month (0.26 million in December 2021). Approximately 8.1 percent of the January 2022 hatch was not placed during the month.



For the twelve-month period February 2021 through January 2022 inclusive, 265.0 million poults were hatched and 247.4 million were placed. This suggests disposal of 17.6 million poults over the 12-month period, corresponding to 6.6 percent of all poults hatched.

* USDA revision from previous monthly report.



Monthly Broiler Production and Prices, February 22nd 2022.


Chick Placements.

The Broiler Hatchery Report released on February 16th 2022 confirmed that a total of 239.6 million eggs were set during the week ending February 12th, up 1.0 percent percent (2.4 million eggs) compared to the week ending January 15th 2022.


A total of 175.6 million day-old chicks were placed among the 19 major broiler-producing states during the week ending February 12th. Total chick placements for the U.S. amounted to 184.9 million, 0.4 percent (0.7 million chicks) more than the week ending January 15th. Claimed average hatchability was 79.5 percent for eggs set three weeks earlier. Each 1.0 percent change in hatchability represents 1.8 million chicks placed per week with the current range of weekly settings.


Chick placements were down 0.2 percent (0.3 million chicks) compared to the week of January 15th. Cumulative chick placements for the period January 8th 2021 through February 12th 2022 amounted to 1,110 million chicks, down one percent from the corresponding period in 2021.


Low chick placement during the past six months is attributed to setting a proportion of hatching eggs with depressed fertility that were derived from high-yield breed combinations used by some integrators for heavy broilers. Additional breeder flocks have been placed to compensate for reduced fertility and their contribution will be reflected in broilers to be harvested during the present quarter of 2022.


Broiler Production

According to the February 18th USDABroiler Market News for the processing week ending February 12 th 2022, 168.8 million broilers were processed during the past week (compared to January 8th at 154.5 million) with an average live weight of 6.30 lbs. (6.31 lbs. in January) and a nominal yield of 76 percent. The number of broilers processed was 3.0 percent more than the corresponding processing week in 2021. Processed (RTC) broiler production for the week was 740.7 million lbs. (336,699 metric tons), (827.2 million lbs. last week), 6.6 percent less than the corresponding processing week in 2021. In 2022 Processed (RTC) production has attained 5.45 billion lbs. (2,476,026 metric tons), 1.1 percent less than the corresponding weeks in 2021.


Aleph Farms Inaugurates New Building


Aleph Farms has commenced operation in a new building of 65,000 square feet in extent.  The facility will include a pilot-scale production plant, a new R&D center and administration to support production of cell-cultured meat.  The company intends gaining regulatory approval in 2022 for a thin cut beef steak and will erect production facilities before 2024.


Aleyal Rivlin, Vice President of production and operations at Aleph Farms, stated “Our new facility enables us to scale our production capabilities and launch limited quantities of our steak around the end of this year.”  He added, “We have worked hard to get here and it is exciting to see the infrastructure that will help bring our vision to life.”



The facility is located in Rehovot, a biotechnology hub in Israel with close affiliations with the National Agricultural Research Institute.


Senator Warren Leads Opposition to Sanderson Acquisition


Senator Elizabeth Warren (D-MA) has addressed a letter to Jonathan Canter of the Department of Justice Antitrust Division opposing the acquisition of Sanderson Farms by a consortium comprising Cargill Inc. and Continental Grain leading to a merger with Wayne Farms. Cargill Inc and Continental Grain claim that the transaction will allow for expansion of operations creating new jobs and benefiting local communities.


The letter included the statement, "this mega merger in a sector already plagued with consolidation and illegal behaviors that harm farmers and consumers alike, represents a new threat to building a competitive agricultural industry". The letter was co-signed by Senators Cory Booker (D-NJ), Richard Blumenthal (D-CT) and Bernie Sanders (I-VT). Senator Warren has frequently used her influence to oppose "big-Ag" requesting investigation of price-fixing and consolidation in the poultry sector.


The offer to purchase Sanderson Farms for $4.5 billion was announced in August 2021.  Should the transaction be blocked by the DOJ, Sanderson Farms will be obliged to pay a termination fee of up to $150 million.  Details of the transaction are incorporated in a SEC Schedule 14-A statement dated September 3rd, 2021, available on the Sanderson Farms website.


Canadian Poultry Consultants to Present Webinar on Condemnations


Dr. Gigi Lin of Canadian Poultry Consultants will be the presenter for a program entitled "Understanding Poultry Plant Condemnations: Prevention and Control". The webinar will be presented on March 16, 2022, 10h00 to 11h00 PST. For registration and additional details access admin@canadianpoultry.ca".


Cracker Barrel Posts Results for Q2 of FY 2022


In a February 22nd release, Cracker Barrel Old Country Store Inc. (CBRL) posted financial results for the 2nd quarter of fiscal 2022. This company is a bellwether for casual and family dining and competes with Denny’s, IHOP and both local and regional chains offering full menus. The Company experiences the same pressures of increased cost of ingredients, labor and transport as its competitors in an environment still restrained by COVID. Comparable restaurant sales representing 76.1 percent of revenue increased 25.9 percent over Q2 of FY 2021.


For the 2nd Quarter of FY 2022 ending January 28th, net income was $37.6 million on total revenue of $862.3 million.  Comparable figures for the 2nd quarter of fiscal 2021 ending January 29th were net income of $14.0 million (with a $10 million tax benefit) on total revenue of $677.2 million. Diluted EPS increased from $0.59 for the 2nd quarter of fiscal 2021 to $1.60 for the most recent quarter.  


Commenting on the quarter, Sandra B. Cochran President and CEO said, "I am pleased that we once again delivered improved restaurant sales and strong retail sales despite the impact of rising COVID cases during the second quarter, and even more pleased to be welcoming back our guests who we believe are eager to return to more normalized routines of travel and visitation as Omicron fades and concerns about indoor dining continue to subside.  Although we anticipate a peak inflationary environment in the third quarter for both commodities (up 15 percent) and wages  (up 12 percent) that will pressure our third quarter operating margins, we are confident that our initiatives to welcome back our guests, drive sales, and manage costs will lead to a meaningful recovery of both top and bottom-line results in the fourth quarter and into fiscal 2023."


The Company provided guidance of sales attaining $800 million in Q3 of FY 2022. Cracker Barrel operated 1,732 stores of which 235 are company-owned.


On January 28th 2021, CBRL posted assets of $2,302 million, against long-term debt and lease obligations of $1,133 million. The Company had an intraday market capitalization of $3,120 million on January 28th. CBRL trades with a forward P/E of 17.3 and has ranged over a 52-week period from $111.79 to $178.82 with a 50-day moving average of $125.86.  Twelve-month trailing operating margin was 5.8 percent and profit margin 4.0 percent.  Return on assets over the past twelve months was 4.1 with 19.2 percent on equity. At close of trading February 18th pre-release, CBRL was priced at $130.38. At 15H00 post-release on Tuesday February 22nd CBRL traded at at $131.68 on a decidedly down day despite beating street estimates on the top and bottom lines.


Seaboard FY 2021 Report Documents Butterball Loss


On February 15th 2010 Seaboard Corporation (SEB) released results for Q4 and FY 2019 ending December 31st 2021.  The company is a conglomerate with segments dedicated to pork production, grain milling, commodity trading, marine transport and power generation. Seaboard owns half the equity of Butterball LLC.


For FY 2019 SEB earned $570 million on sales of $9,229 million with an EPS of $490.36. Comparable values for FY 2020 were net earnings of $283 million with sales of $7,126 with an EPS of $244.21. On December 31st 2021 Seaboard posted assets of $7,503 million and long-term debt and lease obligations of $1,068 million compared to an intraday market capitalization of $4,410 million on February 20th with 78 percent of equity held internally. The 12-month trailing operating margin was 4.9 percent with a profit margin of 6.1 percent. Return on assets was 4.0 percent and 13.8 percent on equity. During the past 52 weeks share price has ranged from $3,110 to $4,400 with a 50-day moving average of $3,848.


Seaboard owns half of Butterball LLC. and the performance of this non-incorporated subsidiary, producing approximately 0.5 million tons of product annually, is reflected in the Seaboard Corp. SEC 10-K report. For FY 2021 Butterball lost $38 million compared to a loss of $20 million in FY 2020. Butterball sales attained $1,792 in FY 2021. The subsidiary posted assets of $991 million against liabilities of $517 million.


The SEC 10-K report includes the following statements:-

Turkey Segment - Seaboard has a 50% non-controlling interest in Butterball, LLC (“Butterball”), a vertically integrated producer and processor of conventional, antibiotic-free and organic turkey products. Butterball is a national supplier to retail stores, foodservice outlets and industrial entities, and to a lesser extent, exports products to Mexico and other foreign markets. The Turkey segment had two retail customers that collectively represented approximately 28% of its sales in each of the last three years.


Seaboard’s Turkey segment has a total of three processing plants, three further processing plants and numerous company and third-party live production facilities and feed milling operations, located in North Carolina, Arkansas, Missouri and Kansas. These facilities produce approximately one billion pounds of turkey each year. Although capacity to meet core further processing demand is sufficient, Butterball uses third-party  co-packer arrangements to supplement portions of its portfolio where it either does not maintain competencies, or to meet demand beyond its internal production capacity.


The Turkey segment, accounted for using the equity method, represents Seaboard’s investment in Butterball. The increase in loss from affiliate for 2021 compared to 2020 was primarily the result of lower sales volumes and higher live and plant production costs due to increased feed and labor prices, partially offset by higher sales due to increased prices. The decrease in loss from affiliate for 2020 compared to 2019 was primarily the result of higher sales attributable to more whole bird volumes and increased prices related to a stronger sales mix of value-added products sold and less interest expense, partially offset by higher live and production costs. Management is unable to predict market prices for turkey products, the cost of feed or the ongoing impacts of the COVID-19 pandemic, including variants, for future periods. Based on these conditions, management cannot predict if this segment will be profitable in 2022. The uncertainties and the volatility of the commodity grain markets could have a significant impact on this segment’s profitability.


VC Company Invests in Slow-Growing Broiler Producer


Matthew Wadiak, CEO and founder of Cooks Venture has announced a $50 million investment by Pius, a venture capital company.  The proceeds will be used to develop the genetics program and to expand facilities.


The heritage Pioneer® strain received University of Guelph certification in accordance with standards of the Global Animal Partnership.


According to the Cooks Venture website the company distributes chilled processed chicken in insulated containers.  Products include whole chicken, boneless, skinless breasts, ground chicken, drumsticks and wings.  Combinations of these products comprising whole chicken, with packs of breasts and portions cost $160 per box.


The company claims pasture-raised product, with non-GMO and antibiotic-free fed.  Claims are non-GMO Project-Verified, certified humane and animal welfare certified but not USDA Certified Organic.


USDA-AMS Purchases 3,366 Tons of Chicken Products



On February 18th, the USDA Agricultural Marketing Service announced the purchase of 2,862 tons of chilled large chicken and 554 tons of chilled chicken legs. Product will be used for child nutrition and related food assistance programs.  Product was purchased at prices ranging from $1.06 to $1.08 per lb. for whole birds and $0.53 per lb. for legs with a total value of $6,624,526. Delivery will be made during April.


Next Gen Foods to Enter the U.S. Alternative Chicken Market


Next Gen Foods located in Singapore has raised $100 million to introduce a vegetable-based chicken product to the U.S.  The company was founded by Andre Menezs a chicken distributor from Brazil and Timo Recker a culinary specialist.  Next Gen will expand research in Singapore and will produce and market product in the U.S. through food service operators and online distribution.  The plant-based chicken product marketed as Tindle™ is currently available in restaurants in Asia and Europe.


Potential Role of Farm Workers in Introducing Drug-Resistant Pathogens to Flocks


A ProMed-Mail posting recently commented on an article* describing an investigation of the level of knowledge and the frequency of antibiotic use among farm workers in relation to recovery of multi-drug resistant E. coli from broiler flocks.  The study conducted in Peru considered workers on two broiler farms.  Only one-third of 54 workers were even aware of resistance.  It was considered significant that 61 percent of those interviewed had been medicated with an antibiotic during the previous month with an equivalent proportion obtaining a drug through OTC suppliers.


The study evaluated antibiotic resistance patterns in E. coli isolated from fifty broiler chickens from each farm.  The evaluation demonstrated that 90 percent of isolates were multi-drug resistant as a result of extended-spectrum beta-lacamase production.  Among the 72 percent of strains showing this activity, 84 percent carried the blaCTX-M gene.


The authors noted the lack of awareness of drug resistance and urged the application of surveillance systems and measures to reduce indiscriminate use of antimicrobials.


The outstanding deficiency in this paper as incisively noted by Dr. Eric Gonder was the absence of an attempt to determine the antibiotic resistance profile of potential pathogens isolated from workers on the farms.  This should have been questioned by the editors or an explanation provided by the authors.


Approximately two decades ago when there was considerable regulatory pressure to withdraw enrofloxacin used to suppress colibacillosis in turkeys and broilers, the question arose as to whether drug resistant pathogens could be introduced into flocks by workers.  When a survey was suggested, federal health authorities expressed a disinclination to conduct the survey despite the reality that many who were employed on U.S. farms were either temporary or illegal workers from Mexico. Enrofloxacin is available OTC in Mexico and is widely abused in human medicine. 


There have been cases of isolation of enrofloxacin-resistant Campylobacter from turkey and broiler carcasses derived from farms that had no history of using Baytril™. Approval for the use of the fluoroquinolone class of antibiotics in food-producing animals was withdrawn on September 12th 2005 following extensive litigation following the October 31st 2000 FDA-CVM proposal.



*Davalos-Almeyda, M. et al Antibiotic use and resistance knowledge assessment of personnel on chicken farms with high levels of antimicrobial resistance: Cross-sectional survey in Ica, Peru. Antibiotics  doi.org/10.3390/antibiotics11020190. February 2022.


Wingstop Posts Q4 and FY 2021 Financial Results


In a February 16th release, Wingstop Inc. (WING) posted financial results for the 4th quarter and fiscal 2021. This specialty QSR Company competes directly with privately held Buffalo Wild Wings and  indirectly with national chains offering chicken. The Company experiences the same pressures of increased cost of ingredients, labor and transport as competitors competitive environment still restrained by COVID.


For the 4th Quarter of FY 2021 ending December 25th 2021, net income was $6.9 million on total revenue of $72.0 million.  Comparable figures for the 4th quarter of fiscal 2020 ending December 26th 2020 were a net loss of $6.4 million on total revenue of $63.3 million.  EPS rose from a loss of $0.21 for the 4th quarter of fiscal 2020 to $0.23 for the most recent quarter.


For FY 2021 net earnings were $42.7 million on revenue of $282.5 million compared to net earnings of $23.3 on revenue of $248.8 million for FY 2020. EPS for FY 2021 attained $1.42 compared to $0.79 million for FY 2020.


In commenting on results, Charlie Morrison, Chairman and CEO stated, “Our fourth quarter and full year results reflect continued momentum in our brand, despite the challenging operating environment. Our Brand Partners understand the strength and resiliency of our simple operating model and are increasing new unit investments based on the sustaining topline growth and in anticipation of improving bottom-line performance" He added, "Wingstop reached new highs with domestic average unit values of $1.6 million and the opening of 193 global net new restaurants. Our 8.0% same store sales growth for 2021, or 29.4% on a two-year basis, marked our industry-leading 18th consecutive year of positive same store sales growth. We believe that our proactive investments in technology, combined with our talented team have positioned the brand for continued long-term growth. 2022 is starting with a record development pipeline. We believe our engine for growth will accelerate our progress towards becoming a Top 10 Global Restaurant Brand."


The Company provided guidance of single digit increase in sales growth for FY 2022. Wingstop has 1,731 stores of which 233 are company-owned.


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


On December 25th 2021, WING posted assets of $249.2 million, of which $89.5 million comprised goodwill and trademarks against long-term debt of $469.4 million. The Company had an intraday market capitalization of $4,180 million on March 1st. WING traded with a forward P/E of 79.4 and has ranged over a 52-week period from $112.49 to $187.35 with a 50-day moving average of $156.51.  Twelve-month trailing operating margin was 24.9 percent and profit margin 15.1 percent.  Return on assets over the past twelve months was 19.1 percent. At close of trading February 15th pre-release, WING was priced at $157.87. At 14H00 post-release on February 16th WING traded at at $164.24 and on March 1st after announcing new financing  Wing was priced at $146.82 up 1.0 percent at market close


H5N1 Diagnosed in Nova Scotia Turkeys


On February 3rd, authorities in Nova Scotia confirmed an outbreak of H5N1 highly pathogenic avian influenza on a commercial turkey farm housing 11,800 birds.  According to the ProMed report 98 percent mortality was recorded in 5,900 nine-week turkeys and six percent losses in a flock of similar size aged three weeks.  The CFIA National Center for Foreign Animal Disease confirmed the virus to be an H5N1 strain similar to isolates obtained from free-living birds in the Province of Newfoundland and Labrador and more recently in the Province of Nova Scotia.  The HA segment corresponded to the A/goose/Guangdong/1996 lineage belonging to B clade and common with the Eurasian lineage currently circulating in Europe.


The flock was depleted and appropriate protection and surveillance zones established around the affected farm.  Wild bird surveys are in progress.


The farm is located in western Nova Scotia midway between Windsor and Greenwood and approximately 20 miles from the coast adjoining the Bay of Fundy near Cambridge.


JBS Settles Beef-Pricing Lawsuit


According to a Company release on February 2nd, JBS USA has agreed to pay $53 million to settle litigation alleging price-fixing in beef supply. In 2020, JBS paid $25 million to settle price-fixing claims relating to pork.


The settlement requires approval of Judge John Tunheim, Chief U.S. District Judge of the U.S. District Court for the District of Minnesota.  The case will proceed against other defendants including Tyson Foods, Cargill Inc. and National Beef Packing Company. The lawsuit alleges that from 2015 onwards, the defendants colluded in restricting capacity thereby creating an artificial shortage that resulted in higher prices to direct purchasers. The “Big Four” are apparently responsible for packing and distribution of 80 percent of U.S. beef consumed. 


Lawyers for the plaintiffs regard the settlement as an “icebreaker” that presages further negotiations and possible settlements before the case proceeds to trial.  The settlement was negotiated against backdrop of negative Administration comments regarding concentration in the beef and pork industries, allegedly allowing the major packers to establish prices that have apparently contributed to inflation, now a significant political as well as economic issue.


The packers have responded to Administration statements claiming that inflation is a reflection of higher costs of labor, transport, utilities, port congestion and disruption in supply chains with justifiable confirmation.


JBS S.A. Flip-flops on Acquiring All of the Equity in Pilgrim’s Pride Corp.


A Special Committee of the Board of Directors of Pilgrim’s Pride Corporation previously turned down a November 15th upgraded offer of $28.50 per share for the 17.5 percent of the equity not owned by the holding company. On February 4th, 2022, JBS S.A. indicated that it wiould revert with an offer by the end of February. In the event JBS S.A. filed a document with the SEC indicating that they have abandoned their attempt to purchase the remaining equity in PPC. Prior to the announcement PPC closed at $27.88 on Thursday 17th falling to $24.08 by 15H00 on Friday 18th February. The action by JBS S.A. is inexplicable. Perhaps they were concerned over FTC scruitiny running against consolidation or they may be waiting for a more favorable price before exercising their 80 percent shareholding to effect a purchase. JBS S.A. has aspirations  for a NYSE  listing of all its U.S. protein businesses. 


Shares in Pilgrim’s Pride Corporation (PPC) have ranged over the past 52 weeks from $20.32 to $24.08 with a 50-day moving average of $27.98.  The company carries $3.5 billion in debt against a market capitalization of $6.85 billion. On a trailing 12 month basis, PPC has provided a 5.2 percent return on assets but -0.2 percent on equity.


At 14h00 on February 8th, PPC traded at $28.84 after receiving a 3.7 percent boost from the Q1 results posted by Tyson Foods.  Concurrently, JBS S.A. and Marfrig Global rose five percent on their respective exchanges in Brazil based on the results and guidance posted by Tyson Foods.


North Carolina Pork Producers to Evaluate Technology to Process Lagoon Sludge


In an ongoing program of application of technology to the problem of hog waste, the North Carolina Foundation for Soil and Water Conservation is partnering with Phinite Inc. and North Carolina State University to process sludge from lagoons holding hog waste. The project is funded by a USDA-NRCS Conservation Innovation Grant. 


Currently the supernatant liquid in lagoons is spread on fields although this has resulted in high levels of phosphorus application and runoff and nuisance from odors and flies.  As an alternative, Smithfield Foods is attempting to capture methane from lagoons to be used as a biogas but leaves both liquid and solid waste in lagoons.


The system developed by Phinite uses a low-energy solar process to dry pre-digested lagoon sludge that can be blended with other ingredients to produce a balanced organic fertilizer. The Phinite system processes the equivalent of two-years accumulation of sludge over a year of operation, cleaning lagoons over a 10 to 15 year period although this may be too slow for mounting criticism and projected environmental legislation. 


Dr. Steve Kulesza, Assistant Professor of Nutrient Management and Animal Waste commented, "we are conducting lab and field trials to evaluate the nutrient availability of the final product".  He added, "we want to understand how this product compares to traditional inorganic fertilizer sources so we can accurately predict rate of use recommendations and how it can be best blended to meet crop nutrient needs".


From the release, it appears that a commercial entity is making use of public funds to address a long-standing problem with unproven technology. We have seen this movie before regarding "surface skimmers" offered as a quick fix for polution in Jordan Lake, Orange County.  It is evident that North Carolina State University scientists who will conduct research on application of the final product have effectively conferred the image and reputation of the Land-Grant, State University to the project.


It is hoped that those responsible for assigning the USDA-NRCS grant have carefully evaluated the proposal for practical and financial feasibility and that periodic progress reports will be made public confirming the validity of projections included in the proposal.


Tyson Settles Alleged Collusion Lawsuit Over Turkey Pricing


Judge Virginia M. Kendall of the Northern District of Illinois has approved the $4.6 million settlement alleging that the company participated in a program to manipulate price of turkey products.  Of the settlement, $1 million will cover cost of litigation and counsel, basically the genesis of the entire spectrum of shakedown lawsuits alleging collusion among livestock producers. The remaining $3.6 million will be distributed among "all persons who directly purchase turkey from defendants from January 1, 2010, through January 1, 2017".  The class action lawsuit was filed in December 2019 and Tyson proposed a settlement in May 2021.


Remaining co-defendants include Butterball, Cargill, Foster Farms and Perdue Farms.


USDA-AMS Purchase of Chicken


On February 11th, USDA-AMS announced purchases of chicken for programs including child nutrition and domestic food assistance.  The following purchases were made for delivery during March and April 2022:-


  • 98 tons of frozen chicken fillets at $4.80 per lb.
  • 253 tons of frozen chicken strips at $4.80 per lb.


The value of the purchase was $3.4 million.



Chick-Fil-A Enjoys a Strong Bond to Consumers



The 2021 MBLM survey confirms that Chick-Fil-A is the leading QSR with respect to “brand intimacy” denoting strong bonding with consumers.  The brand actually increased in intensity by eight percent during the COVID pandemic.  Chick-Fil-A achieved the top rank for the second year in a row followed by Starbucks and Dunkin’ brands.  Others in the top ten include McDonald’s, Taco Bell, KFC, Wendy’s, and Subway.



Mario Natarelli, Managing Partner of MBLM in the NewYork Office, stated “Brands in this industry have been able to capitalize on mobile ordering and digital drive-through lanes during the pandemic.”  He added, “This has created a new reality within which fast-food brands provide even more comfort and convenience to stressed consumers - a position they can effectively continue to reference as we increasingly return to normal life in the year ahead.”


Tyson Foods Inc. Reports on Q1 FY 2022


In a press release dated February 7th Tyson Foods Inc. (TSN) announced results for Q1 for FY 2022 ending January 1st 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)


1st Quarter Ending

January 1st 2022

January 2021

Difference (%)





Gross profit:




Operating income:




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and liabilities:




12 Months Trailing:




           Return on Assets    (%)




           Return on Equity    (%)




           Operating Margin   (%)




           Profit Margin          (%)




Total Assets (46%/47% goodwill and intangibles)




Intraday Market Capitalization




52-Week Range in Share Price:  $63.22 to $100.68  50-day Moving average  $87.66

Market            Close: Friday February 4th $88.49. Open Monday February 7th post release $97.64.

Forward P/E 12.2                  Beta 0.8


The Chicken Segment attained sales of $3,890 million ($2,831 million in Q1 FY 2021) representing 30.1 percent of Company revenue. Operating income was $140 million adjusted to $117 million. In Q1 of 2021 operating loss was $(216) million adjusted to $104 million after non-recurring legal settlements.


For comparison among Tyson Foods’ business segments the adjusted operating incomes were respectively:- Pork, $164 million; Beef, $956 million; Prepared Foods $186 million.


In commenting on results Donnie King, president and CEO stated “We’re pleased with the results of the first quarter and of the steps that we are taking to improve productivity,” He added “Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace. We remain committed to winning with our team members, winning with our customers and consumers and winning with excellence. We have the right team who are taking the right actions and as a result, we believe our future is bright.”


In addressing the Chicken Segment the Company statement included “Sales volume increased primarily due to increased live production and a strong demand environment. Average sales price increased due to the effects of an inflationary cost environment. Operating income increased due to increased sales volume and higher average sales prices, partially offset by the impacts of inflationary market conditions including $185 million of higher feed ingredient costs, increased supply chain costs and a challenging labor environment. Additionally, operating income in the first quarter of fiscal 2022 was impacted by $23 million of insurance proceeds, net of costs incurred related to a fire at a production facility and was impacted in the first quarter of fiscal 2021 by a $320 million loss from the recognition of a legal contingency accrual”.


Guidance for FY 2022 included Revenue between $49 and $51 billion; Adjusted operating margin of 5 to 7 percent and Capex of $2 billion.


The 10.3 percent advance in TSN following release of Q1 results resulted in a concurrent increase in the shares in Brazil of of JBS SA up 5.2 percent and 5.1 percent for Marfrig Global, owner of National Beef in the U.S.


Aviagen Awards Scholarship to University of Alberta Student


Thiago Noetzold, a PhD candidate in genetics at the University of Alberta Poultry Research Center, Agricultural Food and Nutritional Science Department has been awarded the Aviagen Poultry Genetics Scholarship.  The award will be made through the Canadian Poultry Research Council.  Noetzold earned a baccalaureate degree in veterinary medicine from the FAI University Center in Brazil followed by a Master's degree in animal science from the Federal University of Rio Grande do Sul.


His doctoral research will involve precision feeding technology to optimize performance of broiler breeder hens. In accepting the award, Noetzold stated, "my goal is to promote sustainable poultry production and increase bird health and welfare by helping birds to become more feed efficient".  He added, "I am grateful to Aviagen for this scholarship which will help me further my research and fulfill my passion to work towards continual advancement in precision agriculture to enrich our ability to help feed the world with sustainable and healthy chicken meat".


Dr. Bruce Roberts, Executive Director of the Canadian Poultry Research Council stated, "for the past decade, Aviagen and the CPRC have cooperated on research that is vital to the future of the industry and Canada.  By teaming up with universities to support students like Thiago, we are helping to sustain the industry and strengthen the ability to feed our communities and those around the world".


USDA Line Speed Waivers


Following representations by the National Chicken Council, a Federal court has ruled that the USDA has the authority to issue line speed waivers. Judge Timothy J. Kelly of the District Court of the District of Columbia granted the USDA motion, opposed by the United Food and Commercial Workers Union (UFCW), to allow USDA-FSIS to reconsider an increase in line speeds to 175 bpm.


The UFCW sued the USDA to end the program of line-speed waivers in 2020.  At this time the District Court of the District of Columbia determined that the USDA did not take into consideration the safety of workers and that the waiver program violated Rule-making procedures under the Administrative Procedures Act.  Accordingly the USDA moved to remand the program pending a reconsidation of waivers and ongoing litigation.


Wing Inventory Reduced by 2022 Super Bowl LVI Consumption


Wing inventory on February 28th  2022. at 67.6 million pounds was 70.6 percent above February 28th 2021 denoting lower domestic demand.  This in part is attributed to wing fatigue and competition from “boneless” wings.  During February wing inventory declined by 8.0 million lbs. representing 10.5 percent of the January 31st 2022 inventory. This is attributed to 2022 Super Bowl sales.


A survey by the National Retail Federation indicated that consumers planned to spend $14 million on the 2022 Super Bowl with beverage and food as the major expenditures. During the Super Bowl 2021 weekend, 1.4 billion wings were consumed with the anticipation of a higher number in 2022. Activist groups such as Compassion in World Farming, opposed to intensive livestock production, are promoting plant-based wing substitutes. This organization projects that “ten million Americans will pass on chicken wings in 2022”. This is based on surveys denoting that 33 percent of consumers are flexitarians and six percent are vegetarians. Despite disputing these claimed figures, probably based on carefully worded surveys, it is questioned whether the limited survey group was representative of the 100 million viewers who were expected to watch the game or participate in a national tradition of eating spiced wings as a centerpiece of home entertaining. 


There was a sharp increase in the retail price of wings from $2.80 per pound in January 2021to $3.50 per pound in January 2022.  On January 28th the USDA Broiler Market News Report documented the southern states wholesale wing price at $2.50 per pound confirming high markups taken at retail. On March 25th price dropped  by 15.9 percent to $2.11 per lb. Wings were the only broiler product among nine categories to fall in price during the period from mid-February through mid-March 2022. Accordingly the broiler industry cannot be blamed for inflation in the price of wings.  High retail markups are effectively suppressing demand especially among budget-conscious consumers.


Sanderson Farms Honored on 75th Anniversary


The Mississippi Legislature recently passed a resolution congratulating Sanderson Farms on the 75th year of operation.

Sanderson Farms employees 17,000 in complexes in Texas, North Carolina, and Mississippi providing economic stimulus and job opportunities in the communities where complexes are located.


Projected Chicken Meat Production in China 2022


According to the USDA-FAS GAIN report CH 2022-0011 released on January 28th China will produce 14.3 million metric tons of chicken meat in 2022. Imports will attain 800,000 metric tons offset by exports of 460,000 metric tons.  Human consumption, assuming a population of 1.4 billion will amount to 23.1 pounds per capita (10.5 kg).  The USDA report classifies chicken meat production in China among white-feathered broilers representing 50 percent of production, traditional yellow-feathered broiler at 30 percent and hybrids and spent hens the remaining 20 percent.  The figure of 14.3 million metric tons does not include consumption of other types of poultry including ducks, geese and guinea fowl.  The proportion of meat consumed from domestic animals in China is estimated at 65 percent pork, 22 percent poultry of all types, eight percent beef and five percent mutton and other species.


Projected chicken production in 2022 will be approximately three percent lower than in 2021, in part due to increased pork consumption. Availability has increased following control of African swine fever. Partial restoration of the national hog herd has resulted in lower selling prices for chicken meat and hence reduced margins for broiler production.


Production of yellow-feathered birds in various weight categories will decline in 2022 following a multiyear trend.  This is due to the fact that these birds are marketed directly to consumers in wet markets.  With the advent of avian influenza transmissible to humans and reflecting government policy, wet markets are being closed in metropolitan areas reducing availability.  Yellow-feathered birds are proportionally more expensive to produce then conventional white- feathered broilers or hybrids due to slow growth rate with non-competitive feed conversion efficiency.


The USDA-FAS China Station does not expect white-feathered broiler production to increase in 2022 mainly due to saturation of the market as consumers shift their preference back to pork.  Higher cost for feed and lower domestic prices are driving consolidation and integration in broiler production.  Independent small-scale growers are leaving production and the structure of the industry is moving towards the model in the U.S. and Brazil with new large complexes incorporating feed mills, hatcheries and either company-owned housing or contract-growing or their combination. 


Expansion within the broiler industry in China is now confined among integrators.  Currently the industry is dependent on imported breeding stock that was introduced at the GP level.  Following the importation of GGP level breeding stock from the E.U., China has embarked on a national program using locally produced white feathered broilers under the direction of the China National Livestock and Poultry Genetic Resources Committee.  This initiative follows a government policy to make China independent of imported breeding stock and possibly compete with major primary breeders in the U.S. and the E.U.  This is in accordance with the 2020-25 Five-Year Plan for the development of the National Animal Husbandry and Veterinary Industry.


Popularity of white-feathered broilers will be sustained by demand from QSRs and a desire for a cold chain provided by the expansion of supermarkets in urban and metropolitan areas.  Cooked and processed chicken is increasing in availability through both supermarket and online sales.


Given the availability of chicken meat from both yellow-feathered birds for the traditional market and conventional white-feathered broilers, importation of chicken products is concentrated on feet, edible byproducts including gizzards, livers and hearts with only a small quantity of bone-in product imported from either the U.S. or Brazil.


China will continue to export chicken products mainly to Japan through joint-venture operations dedicated to presentations requiring a high level of manual labor.  Given the requirements of the market in Japan, ready-to-eat and individually packaged chicken products are prepared without added salt and are stripped of fat.


In 2020, China imported 512,587 metric tons of chicken from the U.S. valued at $732 million with a unit value of $1,428 per ton.  This compares to an average unit value of $995 per metric ton for all exports in 2020 suggesting a high proportion of feet.  For the first eleven months of 2021, China imported 413,928 metric tons of chicken products valued at $775 million with a unit value of $1,869.  This compares to total exports from the U.S. of 3,321,850 metric tons with a unit value of $1,230 again confirming that over 80 percent of chicken imports by China comprised feet.


Hog Industry in North Carolina Faces Litigation over Methane Capture from Lagoons


In a response to adverse civil judgments against Smithfield Foods the largest hog producer in North Carolina, the Company entered into an arrangement with Dominion Energy to capture methane from hog waste.  The plan is to capture the potent greenhouse gas and to pipe methane elaborated in lagoons to a central facility to be refined into biogas.  The liquid residue would be stored in secondary lagoons on the farm before application to pasture.  Smithfield Foods claimed that methane from 19 farms would reduce carbon dioxide emissions by 160,000 tons annually and provide power for 4,500 homes.


Civil-rights organizations believe that the methane capture plan does not address the environmental contamination and nuisance associated arising from waste from hog farms.  Secondary lagoons will still release greenhouse gases and ammonia into the atmosphere and the problems of spraying liquid onto pastures has not been resolved. 


The Southern Environmental Law Center has filed a civil-rights complaint with the EPA on behalf of the Duplin County branch of the state NAACP and the North Carolina Poor People’s Campaign.  A disproportionate number of minorities live within three miles of large hog operations. 


The EPA has accepted this civil-rights complaint for an investigation stating “the Agency has given significant priority to compliance with Title VI requirements with regard to permitting of animal waste.”  On January 11th a State administrative law judge ruled in favor of the Department of Environmental Quality on the basis that existing water-protection laws in the State did not apply to animal operations recognized as providing significant economic and other benefits.


The issue of disposal of hog waste in North Carolina has implications for animal waste from dairy, broiler and egg operations nationwide. The outcome of litigation and action by regulatory agencies should be followed closely.


H7N9 Vaccination of Chickens in China Reduces Human Infection


Avian influenza strain H7N9 was first diagnosed during March 2013 in China with patients having contracted the infection in live-bird markets.  In response, public health officials in metropolitan areas introduced a surveillance program for live poultry offered for sale and wet markets were closed temporarily in areas where cases occurred.  In January 2017, China launched an H7N9 vaccination program in Guangxi and Guangdong Provinces with extension of the program to other areas.  A bivalent H5/H7 vaccine was deployed nationwide replacing an existing H5N1 product.  A benefit-cost analysis of the vaccination program confirmed a positive value of 18.6 with a net present value of $250 million*.  Total costs of the vaccination program over the three-years of review amounted to $14 million confirming the value of mass vaccination in the context of a nation consuming a high proportion of chicken purchased at live bird markets.


In 2014 avian influenza H5N6 emerged among consumers of poultry with 63 cases reported over seven years.  Four cases have been diagnosed since 2021 with two fatalities.  It is considered significant that close contact between the patients and their direct cohabitants did not result in secondary infection, suggesting that H5N6 is not transmissible among humans.  Infection probably occurs following close contact with the viscera of viremic chickens or with aerosols in wet markets affecting humans with susceptibility due to a genetic predisposing factor.


*Tang, H. et al. Benefit-cost analysis of an H7N9 vaccination program in poultry in Guangxi, China. Preventive Veterinary Medicine. doi.org/10.1016/j.prevetmed.2022.105580


Tyson Foods Ranked Top on Fortune World's Most Admired Companies List


In a February release, Tyson Foods Inc. announced that the company was ranked as the leader on the list of the World's Most Admired Companies for the sixth consecutive year. The annual list is compiled by Fortune based on a survey conducted by Korn Ferry.


Donnie King, President and CEO of Tyson Foods stated, "we believe this ranking reflects our focus on winning with team members, winning with our customers and consumers and winning with the excellence and execution".  He added, "Tyson is a great company with a great team.  We are honored to be recognized as a leading food company that is investing in rural America to help meet the needs of a growing global market".


Tyson employs 137,000 and has invested millions of dollars on protection of workers over the past two years following the emergence of COVID.  The company was a pioneer in requiring vaccination of workers and providing healthcare.


Tyson estimates that it spends $15 billion annually in grower payments supporting 11,000 independent contract farmers supplying livestock in addition to sustaining local communities through its commercial activities, salaries and wages and donations to food banks for hunger relief.


Aldi Sues Pork Packers


Aldi, the deep-discount supermarket chain has filed a lawsuit in the Northern District of Illinois alleging price-fixing by major pork packers.  Defendants include Hormel Foods, Seaboard Foods, Smithfield Foods, Triumph Foods and Tyson Foods and AgriStats™.  JBS is not a party to the litigation as the Company settled with various plaintiffs for more than $50 million during 2021.


As with previous lawsuits, Aldi alleges that defendants engaged in an "illegal conspiracy" that escalated prices for pork from 2009 onwards.  Aldi joins other major national chains including Kroger and many restaurant operators.  Central to the claim of collusion is the fact that the various companies named in the lawsuit were subscribers to the AgriStats™ benchmark system.


KFC to Roll Out Beyond™ Chicken Substitute


KFC will be launching a Beyond™ Plant-Based Chicken substitute as a limited-time offer that commenced January 10th.  The product was tested in 2019 in the Atlanta market and in California in 2020.  The menu item will be available as a combo meal with fries and dipping sauces for a six-piece order starting at $6.99.  While it may be feasible to produce a chicken-like nugget, it will not be possible to produce the texture, flavor and aroma of real bone-in chicken.


It is considered significant that after testing the product in both 2019 and 2020 a limited-time offer menu item was introduced only at the beginning of 2022. Critics have been unimpressed with the quality of tne product as served.


Aviagen Claims Improvements in Sustainability through Enhanced Feed Conversion


In a January 24th release, Aviagen pointed to an improvement in feed conversion ratio of approximately 1.5 to 2.0 points each year, based on data since 1970 and projections until 2030.  Due to improvements in feed conversion ratio associated with higher growth rate, lower mortality and enhanced conversion of feed to live mass, broilers in 2020 generated 50 percent less carbon dioxide than broilers in 1970.  Continued progress in genetic selection has the potential to reduce the carbon footprint of broilers by an additional 15 percent by 2030.  Aviagen estimates that in 2020 133.3 million metric tons of poultry meat was produced globally with a carbon release of 6kg for every kilogram of meat, representing 800 million tons of carbon dioxide.


Aviagen has established Balanced Breeding as one its top five corporate commitments promoting the Environmental, Economic and Social pillars of sustainability.


Dr. Santiago Avendano Director of Global Genetics for Aviagen presented “Poultry breeding contribution to environmental sustainability in the meat sector” at the 2022 IPPE.


Five Aviagen Young Leaders Recognized by USPOULTRY


Five young Aviagen team members were recognized by USPOULTRY at the 2022 IPPE, receiving the "Young Leaders Under 30 Award".  These include:-

  • Kasey Guthrie, Veterinary Services Compliance Manager
  • Kate Givhan, Quality Assurance Manager
  • Clara Goldman, Director of Quality Assurance
  • Caitlin Rivord, QA Data Manager
  • Anna Lee Garner, QA Coordinator




Awards recognize leadership qualities in young poultry professionals under 30 years of age.  The objective of this recognition is to engage and invest in the future generation of leaders.


Dr. Marc de Beer, President of Aviagen North America noted, "we thank USPOULTRY for celebrating and encouraging our rising professionals at Aviagen".  He added, "Aviagen shares with USPOULTRY the mission to seek out the industry's most talented people".


The five recipients expressed their gratitude to USPOULTRY.


Pilgrim’s Pride to Raise Wage Rates at Mayfield, KY. Plant


Following negotiations with the United Food and Commercial Workers Union, Local 227, Pilgrim’s Pride will increase wage rates for the 1,500 workforce to $16.50 per hour as a starting level.  The Company previously donated $1million to tornado relief and the $2 per hour increase will represent an expenditure of $4.5 million in 2022.


Ziggity Introduces Broiler Parent Male Drinker Line at the 2022 IPPE


Ziggity Systems designed a nipple-type broiler-breeder watering concept with dedicated male and female watering lines that takes into consideration the difference in height of the genders.


The concept was evaluated in an installation at DanHatch, a specialized broiler egg producer located in Oster Sottrup in southern Denmark. A single line adjusted to the comfortable drinking height of the males was suspended slightly off-center over the scratch area. Hens consumed water only from their drinker lines adjusted to an appropriate height over the slatted area. They were unable to drink from the male line. Male and female lines were fitted with newly designed drinkers specific to beak capacity of the respective genders to optimize actual consumption and to avoid spillage.

The study period extended over 41 weeks. The test flock comprised 5,500 females and 440 males in a compartment equipped with a dedicated male drinker line fitted with Ziggity Big Z drinkers and female lines with specially designed Big Z shielded drinkers for hens. Results were compared to five adjacent flocks of approximately similar size using a conventional arrangement comprising shared common lines with drinkers fitted with catch cups located over the slats and adjusted to the height of the hens.


The results from the flock with the dedicated male line as compared to the comparison flocks indicated:-

  • A reduction of 10.1 percent in male mortality. This would imply less need for spiking and possibly a higher level of selection at transfer.
  • A numerical improvement in uniformity was determined among males in the single test flock. Weights of males at 40-weeks ranged from 9.37 lbs. to 9.55 lbs. The comparative weights from the five comparison houses ranged on average from 9.41 lbs. to 10.31 lbs.
  • The test flock produced 2.4 more settable eggs per hen compared to the flocks with conventional drinker lines. This was due to fewer eggs laid on the litter, and less soiling of floor eggs. Litter was drier in the test house than the houses with conventional drinkers as hens drank only from their lines above the slats. Functional males remained in the scratch area since they were supplied with morning feed and water ad lib.


The initial trial in Denmark demonstrated the proof of the concept of a dedicated male drinker line. Obviously it will be necessary to confirm the technical and hence financial benefit of retrofitting breeder houses with a male drinker line under U.S. housing and management conditions currently in progress. Differences in cost per chick hatched, attributed to a presumed improvement in the number of settable eggs per hen housed and enhanced hatchability should provide a beneficial 5-year discounted return over the additional cost of the installation.  The concept of dedicated male drinker lines should be subjected to structured evaluation in the U.S. and Latin America with sufficient replication under commercial conditions to provide a statistically supported justification for adoption by the Industry.


Pectoral Myopathy Reviewed at IPPE


Dr. Casey Owens, Professor of Poultry Science at the University of Arkansas, reviewed the current status of pectoral myopathy at the 2022 IPPE.  The condition appears in mild form as white striping but progresses to woody breast. Myopathy is invariably associated with high-weight broilers and is genetic in origin.  The pathogenesis has been extensively studied at the histological level, suggesting that selection for accretion of muscle tissue has resulted in a disproportionate level of vascularization, possibly extending from late incubation, but certainly through early growth.


As with all emerging problems in the broiler industry, there is an inevitable scramble to find a quick fix and to market a therapeutic product.  A variety of nutrient supplements have been evaluated including enzymes, antioxidants, trace minerals and vitamins administered both in ovo and in diets without showing any significant preventive effect. 

Reducing growth rate by modifying amino acid composition of diets may be ameliorative, but at a cost in live mass.  It is evident that until a genetic solution is implemented, complexes producing high-weight birds for the tray-pack market will have to compromise on live bird parameters to achieve optimal breast yield at a quality consistent with market demand.  Dr. Owens stressed the need to adjust dietary specifications and harvest programs to produce least-cost saleable product of acceptable quality to optimize profit.


Stop Press


High Prevalence of H5 HPAI in NC Waterfowl


The North Carolina Department of Agriculture and Consumer Affairs has reported initial results from the surveillance program to detect avian influenza in migratory waterfowl. Swabs from hunter-killed dabbling ducks of three species were collected at costal sites located in Hyde County and the second at the intersection of Pamlico and Bladen Counties. A total of 594 ducks were sampled. Of the pooled tracheal and cloacal swabs, 83 ducks yielded presumptive H5 AIV on initial screening by the State Rollins Laboratory, corresponding to a positive rate of 14 percent. Of the 83 presumptive isolates referred to the NVSL, 60 have been processed to date with 53 confirmed as H5 all with an Eurasian HPAI genome.


The conclusion from this survey in progress is that H5 avian influenza virus of Eurasian origin is present in a high proportion of otherwise healthy migratory waterfowl in the mid-region of the Atlantic Flyway. The implications regarding effective structural and operational biosecurity are self-evident for all commercial poultry operations extending from the Maritime Provinces of Canada southward to Florida. 


California Court Ruling Delays Enforcement of Proposition #12


Judge James P, Arguelles ruled that enforcement of Proposition #12 should be delayed until 180 days after issue of the final rule by the California Department of Food and Agriculture.  Petitioners had requested a 28-month delay, but Judge Arguelles stated, "petitioners are entitled to a delay that extends past the date on which regulations are enacted” He rejected the request that 28-months was required.  Judge Arguelles left the door open to a subsequent ruling indicating "after final regulations are enacted, the parties may return to this Court for any appropriate adjustment to the date".


The California Department of Food and Agriculture is now two years late in publishing regulations to be framed in terms of Proposition #12 that was adopted in November 2018 effectively banning pork products from progeny of pregnant sows housed in gestation crates, to take effect in January 2022.


The ruling has no bearing on the supply of eggs to California from other states nor does it affect production within the state of California.  Litigation concerning Proposition #12 was raised by the North American Meat Institute and the National Pork Producers Council and supported by the American Farm Bureau Federation. The petitioners essentially required a delay in implementing conversion to group housing for pregnant sows or changes to the intent of Proposition #12. Many hog packers have adopted policies requiring group housing of sows producing slaughter stock and recently Seaboard Foods, a holdout, publicly announced that it intends to comply with Proposition #12.  In June 2021, SCOTUS declined to hear an appeal by the North America Meat Institute to overturn Proposition #12.  The Court has yet to rule on petitions from the National Pork Producers Council and the American Farm Bureau Federation filed in September 2021.


Alabama to Issue Waste Disposal Regulations


The State of Alabama is proposing new rules that will restrict disposal of poultry waste and sewage sludge on farmland.  This action results from complaints of odors and health concerns from residents adjacent to farms and processing plants.


The new rules will categorize biosolids from wastewater treatment and will impose testing of waste and will mandate communication to neighbors regarding disposal on farmland.  Regulations will also require best practices and documentation.



COVID Through the First Quarter of 2022


Commentators on public health are expressing a mildly optimistic note concerning progress in controlling COVID.  Dr. Antony Fauci, Director of the National Institute of Allergy and Infectious Diseases and Chief Medical Advisor to the White House, noted that cases have peaked and are sharply declining in some parts of the Northeast and upper Midwest although the Omicron variant of COVID is persisting in southern and western states.  He commented “Things are looking good.  We don’t want to get over confident, but they look like they’re going in the right direction now.”  In an interview with ABC he stated “There may be a bit more pain and suffering with hospitalizations in those areas of the Nation that have been vaccinated or have not received boosters.” 




Former FDA Commissioner, Dr. Scott Gottlieb, predicted that many office workers would return during February.  He stated on a recent CBS Face the Nation interview, “You are seeing a lot of businesses make decisions to return to work on March 1st because I think they want to give themselves a cushion, especially having been surprised before.”


The CDC projected that COVID-19 hospital admissions will remain stable over the next four weeks with a current 7-day hospital average for mid-January at 20,990 up one percent from the previous weekly average.


Dr. John Swartzberg at the University of California Berkeley School of Public Health, stated “COVID cases may decline from March through spring or summer and I think May or June is going to really look up for us.  I am quite optimistic.”  He added, “Generally speaking, the level of immunity in our population is going to be much higher than it was going into the Omicron pandemic and that’s going to help us not only with Omicron and Delta, if they’re still circulating, but it will also help us with any new variant.”




Notwithstanding mildly optimistic projections, the U.S. food system continues to function under strain.  This is due to absenteeism at all levels, including in production, processing, transport, distribution and retail.  Despite a reduction in congestion at West-coast ports, disruption in supply chains is still apparent for food especially produce, some branded items and meats.  Transport delays have impacted distribution of fresh produce, meat, poultry and seafood.  Some supermarket chains have run short on specific items and consumers are learning to buy products when available and to switch brands depending on shelf stocking.  Trends in reduced slaughter of cattle, hogs, and to a lesser extent chicken through mid-January, attributed in part to labor shortages will be reflected in lower availability through February given the inherent lag in the distribution chain.


As of January 28th 64 percent of the U.S population had received two doses of an mRNA vaccine and 41 percent were fully vaccinated. A total of 169,000 new cases were diagnosed on January 28th but the 7-day rolling average is down by 34 percent. Unfortunately deaths due to COVID are up 29 percent over 14-days with a tally of 1,050 recorded on January 28th. Hospitalizations, ICU admissions and deaths from COVID are in the overwhelming proportion among the unvaccinated.



House Subcommittee Requesting Data from "Big Four" Packers


The House Subcommittee on Economic and Consumer Policy has addressed a letter to four major meat processors requesting specific information on pricing and policy. 


Rep. Raja Krishnamoorthi, Chairman of the Committee stated, "While some companies may claim that the high price feeding, these outsize profits are explained by higher input costs, earnings start to tell a different story".  He added, "I am deeply concerned that meat processing conglomerates may have engaged in predatory business practices at the expense of consumers during the pandemic".


It is a matter of record that beef prices have risen by 18 percent, pork by 15 percent and chicken by 10 percent.  With respect to chicken, there is a far wider range of producers in direct competition compared to red meat.  Chicken and turkey integrators have experienced escalation in the cost of ingredients, labor, transport and other inputs.  The Committee should distinguish between wholesale and retail prices as supermarket chains have increased margins to cover escalation in cost of labor and the entire supply chain has been impacted by additional cost to suppress COVID.


McDonald’s Corporation Reports on Q4 and FY2021


In a press release dated January 27th 2022 McDonald’s Corporation (MCD) announced results for the 4th quarter and FY 2021 ending December 31st 2021.


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)


4th Quarter Ending December 31st.



Difference (%)





Gross profit Company stores:




Operating income:




Pre-tax Income

Net Income







Diluted earnings per share:




Gross Margin Company stores (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt:




12 Months Trailing:

Return on Assets (%)


Return on Equity (%)


Operating Margin (%)


Profit Margin (%)


Total Assets




Market Capitalization



52-Week Range in Share Price: $202.73 to $271.15 50-day Moving average $259.02

Market Close: Wednesday 26th $249.54: Close Thursday 27th post release $248.75

Forward P/E 24.


For FY 2021 Revenue attained $23.22 billion with net earnings of $7.55 billion and an EPS of $10.04
For FY 2020 Revenue attained $19.21 billion with net earnings of $4.73 billion and an EPS of $6.31


Global same store sales growth for Q4 was 12.3 percent with U.S. 7.5 percent.


South Africa Imposes Anti-Dumping Duties on Imported Bone-In Chicken


Following representations made by the South African Poultry Association in January 2021, the Government International Trade Administration Commission (ITAC) has imposed anti-dumping duties on bone-in chicken imported from Brazil, Denmark, Ireland, Poland, and Spain to be levied until June 2022.  Chicken meat from the E.U. was imported duty-free until January 2022, but from January 2022 onwards, the rate for Brazil will increase from 62 percent to 265 percent, for Denmark the anti-dumping duty will be 67.4 percent, for Ireland 158.4 percent, Poland 96.9 percent, and Spain 85.8 percent.  The ITAC will announce final anti-dumping duties for the five nations in June 2022. 


The action by the ITAC follows imposition of anti-dumping duties on bone-in chicken from the Netherlands, Germany, and the United Kingdom in August 2021.  United States exporters pay a 62 percent duty on bone-in portions under the Tariff Rate Quota.


The USDA-FAS Post in Pretoria estimated that in 2020, the U.S. supplied 39 percent of bone-in chicken followed by Ireland and Brazil at 18 percent each, Denmark at 11 percent, and other EU nations 13 percent.


Domestic producers in the Republic of South Africa are unable to satisfy demand and profitability is restrained by high ingredient, fuel, power and labor costs.  The price of frozen chicken increased by 22 percent over the 12-months to July 2021.  Imposition of anti-dumping duties will result in a rise in the price of chicken and reduce availability to the majority of the population.  This will have political implications for the ruling African National Congress Party that is currently unable to restrain inflation, supply electric power or maintain services in the nation.


Cecal Microbiome Linked to Body Weight


In a TechTalk at the 2022 IPPE, Dr. Steve Lerner of Chr. Hansen discussed results of a trial demonstrating a correlation between the composition of the cecal microbiome and body weight.  In a trial twenty-five large broilers and twenty-five small broilers were selected at thirty-seven days from a common liter pen and were subjected to an analysis of the cecal microbiome.  A hybrid metagenomic sequencing approach was applied combining long and short read sequencing. 


Broilers with the heaviest weights demonstrated high microbial alpha diversity and microbiome uniformity with a predominance of genera associated with production of high levels of short chain fatty acids compared to the microbiome composition of the smallest birds.  The results are intriguing, but additional studies will be required to demonstrate the mechanisms associated with the action of the microbiome on growth rate. Elucidation of the mode of action will lead to more effective probiotic additives to enhance growth parameters of economic significance.


USDA-ERS Calculates Cost of China Tariffs


The Economic Research Services of the USDA has calculated the cost to the agricultural sector of tariffs imposed by the U.S. from mid-2018 through 2019.  Retaliatory tariffs imposed by China on U.S. exports during the 18-month period amounted to $25.7 billion.  Lost soybean exports comprise 70 percent of the impact amounting to $9.4 billion in annualized losses.  Farmers in Iowa, Illinois and Kansas were especially at a disadvantage in terms of lost sales.


In 2020 agricultural exports to China rebounded following conclusion of the U.S.-China Phase One Economic and Trade Agreement.  Notwithstanding the agreement, U.S. market share of agricultural imports by China remain below the pre-retaliatory tariff level in January 2021. It was calculated that through the end of 2021 China was $16 billion short of their commitment to purchase U.S. goods including soybeans and grains. China has imported soybeans from Brazil and corn from Argentina and more recently from the Ukraine presumably at a lower landed cost given import duties.


To compensate for their losses, the Administration has reimbursed farmers to the value of $28 billion over two years with most payments made under the Market Facilitation Program.


The U.S. Section 301 tariffs on Chinese imports are still in place.  China has not rescinded retaliatory tariffs but is exempting some items in accordance with the Phase One agreement.


USDA-AMS Continues Chicken Purchases


On January 21st USDA-AMS announced acceptance of tenders for 334 tons of frozen chicken fillets and 819 tons of frozen chicken strips.  Fillets and strips were priced at $4.40 per lb. amounting to a purchase of $5,073,000 for deliveries to be made during March 2022. Product is destined for child nutrition and food assistance programs.  


Illegally Imported Meat Products from China Seized


During the fourth quarter of 2021 officers of the USDA-APHIS Smuggling Trade Compliance Authority confiscated close to a ton of illegally imported pork, poultry and ruminant products. From New York City retail establishments. In 2021 USDA-APHIS in conjunction with the Department of Homeland Security- Customs and Border Protection Agency seized 110 tons of illegal products.


It is noted that many provinces in China are endemic for avian influenza, Newcastle disease, foot and mouth disease, swine vesicular disease, classical swine fever and African swine fever.  All of these diseases are exotic to U.S. hog herds or poultry flocks and represent an extreme danger to our domestic livestock and poultry industries. 


In past decades illegal importation of raw and in some cases partly cooked meat products have resulted in introduction of exotic diseases such as African swine fever into Portugal and Spain in the late 1950's and foot and mouth disease into England in 2019.  Recently confiscated pork products carried by air-travelers entering Japan and Taiwan have yielded African swine fever virus.


USPOULTRY Elects Officers


During the 2022 IPPE, USPOULTRY elected officers for the 2022-2023 term.


  • Mike Levengood of Perdue Farms was elected Chairman of the Board of Directors
  • Jarod Morrison, Farbest Foods was named Treasurer
  • Jonathan Cade, Hy-Line International was elected Secretary
  • Greg Hinton, Rose Acre Farms will serve as Immediate Past Chairman


In commenting on the slate, John Starkey, President of USPOULTRY stated, "I look forward to the leadership and guidance these officers will provide our organization".