Poultry Industry News

FSIS Health Alert Over Raw Ground Turkey


The USDA Food Safety and Inspection Service has issued a health alert relating to raw ground turkey products.  Approximately 105 tons of ground turkey produced by Plainville Brands in Pennsylvania may have been contaminated with Salmonella Hadar.  The implicated batch of ground turkey was produced from mid-to-late December 2020 in establishment P-244 located in New Oxford, PA and shipped to retail.  A formal recall has not been issued since it is presumed that most of the product will have been consumed other than possibly some still in freezers.


The public health alert follows an investigation by CDC of twenty-eight cases of S. Hadar infection occurring in twelve states that implicated product from Plainville Brands.  Ground turkey collected from the home of a patient yielded the pathogen that was closely related to the isolates from patients.


McDonald's Corp and Subway Withdrawing from Walmart Stores


McDonald's Corporation will close 325 units during 2021 that are located in low sales volume  Walmart stores. At the peak of cooperation between the two companies, McDonald's operated 1,000 units in Walmart stores.


Walmart is turning to alternatives including Taco Bell and Domino's pizza that has 30 existing units operating in Walmart stores.  A second alternative to in-store restaurants are Ghost kitchens.  Walmart customers in suitably equipped locations can order from a limited menu with pickup and delivery service provided.


Amazon Workers Reject Unionization


Employees at the Amazon distribution warehouse in Bessemer, AL voted two to one against unionization.  The National Labor Relations Board counted 1,798 votes against 738 to remain union free.  Organizers for the Retail, Wholesale and Department Store Union that would have represented workers devoted considerable time and publicity to their effort promoting pro-Union and anti-Amazon messages.


In a statement following the election, Amazon noted, "our employees made the choice to vote against joining a union. Our employees are the heart and soul of Amazon and we have always worked hard to listen to them, take their feedback, make continuous improvements and invest heavily to offer great pay and benefits in a safe and inclusive workplace.  We are not perfect, but we are proud of our team and what we offer and will keep working to get better every day."


The Union is calling for a review of ballots and has criticized Amazon for spreading misinformation issuing text messages and home robo-calls and taking advantage of their location in a right-to-work state.


The margin of rejection indicates support for Amazon. The Company emphasized job creation, competitive wages and health care benefits and an attractive work environment as reasons for the union rejection. It remains to be seen whether unions can make inroads into large corporations in states south of the Mason-Dixon line. Thus far the foreign automobile manufacturers have avoided unionization and Walmart as the largest non-government U.S. employer has consistently remained independent with respect to workers.



USAPEEC Present Promotional Event in Chengdu, China


The USAPEEC participated in the U.S.-China Agricultural Friends of Southwest China Event held at the Hyatt Hotel in Chengdu.  More than 50 U.S. agricultural producers exhibited at the event that attracted hundreds of attendees.


The U.S. is recapturing markets for poultry products following a five-year suspension of exports allowing Brazil, Argentina, Thailand and Russia to gain market share.  Products promoted included appropriately-sized chicken feet, large wing tips and chicken leg quarters suitable for further processing and packaging for the market in China.  The exhibition featured U.S. chicken paws weighting 35 grams (1.1 ounce) packed in a vacuum pouch with pickled peppers as a delicacy in Southwest China.  Specialist chefs served Cajun-flavor leg quarters and “tiger-skin” jumbo chicken paws. Promotional material was distributed in anticipation of increased interest and demand for U.S. products.


Positive Sentiment by Farmers Improved in March


On April 6th Purdue University released the Ag. Economy Barometer initiated in October 2015 and extending through March 2021.  Sentiment rose to 177 in March 2021up from 165 in the previous month and compared to 95 in March 2020. The Index comprised 75 for Current Conditions and 110 for the Future Expectation sub-indexes.


Optimism is based on:-

  • Current high and rising ingredient prices,
  • Increasing land values.
  • Administration support for the ethanol industry,
  • Trends in exports of commodities,
  • Prospects for reopening the economy following acceleration of vaccination against COVID



Hyperimmune Immunoglobulin Ineffective in Treating COVID


A recent study monitored by the National Institutes of Health-National Institute of Allergy and Infectious Diseases (NIH-NIAID) demonstrated that hyperimmune immunoglobulin administered by the intravenous route to patients with COVID in hospitals was ineffective.


The immunoglobulin designated CoVIg-19 was developed by Takeda Pharmaceuticals of Japan in cooperation with other multinational companies.  Dr. Bill Mezzanotte Executive Vice president and Head of Research and Development for the CoVIG-19 Alliance stated, “While the results of this particular clinical trial are disappointing we are proud that as an industry we proactively and collaboratively pursued this work and that the program may contribute to a growing understanding of this challenging virus and strategies for patient care.”


The results of the controlled evaluation demonstrate the need to follow scientific principles to establish and quantify the value of a specific medication or therapy.  During mid-2020, a series of therapies were advocated by the previous Administration, basically as politically expedient “quick-fixes” despite the caution and counsel of experienced scientists affiliated to the NIH and academia.  The results of sequential trials on candidate therapeutic agents in the U.S. and in the E.U. have shown little or no benefit to hospitalized patients with the exception of the antiviral Remdesivir.


It is evident that vaccination with either of the two mRNA vaccines approved by the FDA will suppress the incidence rate of COVID although the CDC recommendations relating to masking, avoiding crowds and restricting travel are still applicable given the current low level of population immunity.  The CDC points to 30.8 million diagnoses of COVID since the outbreak commenced in January 2020 with possibly four times this number based on serologic surveys and given the low rate of testing.  More than 555,000 U.S. have died from the disease and currently there are 42,000 patients in hospitals.  Effective April 6th, 33 percent of the U.S. population has received one vaccine with 20 percent having completed the course of two mRNA vaccines. Approximately 8 million people received the single-dose J & J vaccine through temporary suspension on April 13th.  Vaccines are now administered at rates of 3 to 4 million per day.


ASF Forces Philippines to Reduce Import Duty on Pork. Prospects for Increased chicken Exports


The Wednesday April 7th edition of CHICK-NEWS noted the inability of the Government of the Philippines to control African swine fever (ASF) resulting in a shortage of pork especially in metropolitan areas.  As a result, pork prices have soared with shortages appearing immediately after the government ham-handedly (no pun intended) placed a temporary cap on retail prices.  Apparently President Duterte has not learned the reality that a cheap food policy immediately devolves into a no-food policy. As a result of ASF, pork production has dropped 20 percent with culling of 300,000 hogs based on unreliable government data understating the magnitude of the problem.

"This little Piggy went to Market"

Bowing to pressure, the Philippine Government reduced the import duty on pork from 30 percent to 5 percent effective immediately for three months with a rise to 10 percent thereafter.  It is estimated that the Philippines will have to import 400,000 metric tons of pork in 2021, double the 162,000 tons predicted at the beginning of the year. Despite the heavy import duty, the shortage of pork in the Philippines resulted in a 600 percent increase in shipments from the U.S. during the first quarter of 2021.  According to the U.S. Meat Export Federation, pork shipments to the Philippines attained 15,000 metric tons through March 25th


The Department of Agriculture intends initiating a repopulation program for hog farms.  This will be playing King Canute in the absence of an effective and safe vaccine that at present is unavailable. As with China, commencing in 2018, interim control of ASF required a radical restructuring of pork production moving from small family-operated farms to larger commercial units capable of imposing strict biosecurity.  The current system of production in the Philippines involves family farms selling to dealers who in term aggregate hogs to be sold and shipped to packing plants. This requires extensive movement and obvious dissemination of ASF virus.


Not only will the Philippines have to import pork over the intermediate and long term, the domestic broiler industry will not be capable of providing additional animal protein The Philippines will represent a potential market for U.S. leg quarters subject to the government further relaxing restrictions on imports. This is resisted by the domestic industry that has lobbied for exclusion. The Philippines increased imports of broiler parts rising to 6th in rank among importers from the U.S. over the first two months of 2021. A total of 28,102 metric tons was shipped, valued at $22.1million with a unit value of $786 per ton. Exports were 31 percent higher in volume compared to the first two months of 2020.


Tyson Foods Inaugurates Humboldt, TN. Complex


On Thursday April 8th a formal ceremony attended by Tennessee officials inaugurated the Humboldt Complex in Gibson County.  The $425 million project comprises a 370,000 square foot processing plant, a hatchery and a feed mill with a capacity of 14,000 tons per week. Workers are undergoing training and plant operations are anticipated to commence in late April.


The investment in the Humboldt complex follows the  $84 million expansion of the Union City, TN. operation in 2017.


Donnie King, COO and Group-president for Poultry for Tyson Foods stated, “The demand for Tyson chicken products continue to grow and this plant will help us meet the needs of our customers and consumers.”  He added, “We are excited to start this new chapter with the people of western Tennessee who have been extremely supportive of the project since day one.”


Tyson Foods now operates five facilities in Tennessee employing 5,000 with an annual payroll of more than $226 million.  Tyson collectively has a financial impact on the state exceeding $400 million including payrolls, taxes, utilities and purchases of feed ingredients.



2021 MPF Virtual Convention - 50th Anniversary



MPF's education program is ready for viewing 

on our website


Today we bring you a preview of our four core education tracks -- these speakers will be presenting live at the times listed (unless otherwise noted) and their content will stay on-demand through May 31.


In addition to these live sessions, your MPF registration gives you access to:










Dr. Jon Moyle, University 

of Maryland

Dr. Zac Williams, Michigan State University

9:30 am - 10:00 am - Windrowing 101

  • Dr. Casey Ritz, University of Georgia


10:00 am -10:30 am - Brooding

  • Dr. Conie Mou, Jones-Hamilton


1:30 pm - 2:00 pm - Being a Good Neighbor

  • Jennifer Rhodes, Principal Agent & Commercial Poultry Grower, University of Maryland Extension


2:00 pm - 2:30 pm - Beetle Best Management Practices

  • Dr. Cassie Krejci, MGK


On-Demand Presentation (available starting May 18)

Feeding Chickens Hemp Feed 

  • Andrew Bish, Hemp Feed Coalition










Dr. Deana Jones, 


Dr. Manpreet Singh, University of Georgia

9:30 am - 10:00 am - FSIS Overview of the Egg Products HACCP Rule

  • Dr. Erika Stapp-Kamotani, USDA-FSIS


10:00 am -10:30 am - Industry perspective on the Egg Products HACCP Rule

  • Kim Rice, Vice President of Food Safety and Quality, Rose Acre Farms


1:30 pm - 2:00 pm - Developing and implementing SSOPs

  • Dr. Christine Alvarado, Arm & Hammer


2:00 pm - 2:30 pm - Regulatory & Trade Update

  • Lisa Picard, Senior Vice President of Policy, Trade and Regulatory Affairs, National Turkey Federation


2:30 pm - 3:00 pm - Title to be announced

  • Dr. Brian Bowker, Research Food Technologist, USDA-ARS










Dr. Darrin Karcher, Purdue University

Dr. Ken Koelkebeck, University of Illinois

9:30 am - 10:00 am - Egg Production in the U.S.

  • Dr. Nicole Widmar, Associate Head and Graduate Program Chair, Purdue University


10:00 am -10:30 am - Vegetative Buffers for Pullet and Hen Production

  • Dr. Paul Patterson, Professor, Penn State University


1:30 pm - 2:00 pm - Ventilation Basics of Cage-Free Aviaries

  • Dr. Richard Gates, Director / Professor - Ag Engineering Department; Egg Industry Center / Iowa State University


2:00 pm - 2:30 pm - Strategies for Achieving Egg Weight to Meet Your Market Needs

  • Isa Ehr, DVM, MS, Manager of Veterinary Services and Nutrition, Hendrix-ISA, LLC


ON-DEMAND PRESENTATIONS - Titles to be announced soon! 










Dr. Robert Beckstead, 

North Carolina 

State University

Mr. Ron Kean, University 

of Wisconsin

9:30 am - 10:00 am - Coccidiosis

  • Dr. Lisa Bielke, Associate Professor, The Ohio State University


10:00 am -10:30 am - Optimizing Immunization through Proper Vaccination in Turkeys

  • Dr. Kelli Jones, Manager Technical Services/Veterinarian, Ceva Animal Health


11:00 am - 11:30 am - An Ecological Approach to Manage Gut Health in Turkeys

  • Dr. Peter Ferket. William Neal Reynolds Professor — Nutrition and Biotechnology, North Carolina State University


11:30 am - 12:00 pm - Flip Overs

  • William Alexander, Technical Service, Hybrid Turkeys


On-Demand Presentations (available starting May 18)

An Overview of Histomoniasis Challenges Facing the Turkey Industry

  • Lesleigh Beer, University of Arkansas

Salmonella reading in Commercial Turkeys - Why Now and How? 

  • Thaina Barros, University of Arkansas

Turkey Dermatitis / Cellulitis: Where are We Headed? 

  • Danielle Graham, University of Arkansas


Aviagen Executive Elected to USPOULTRY Board


Dr. Marc de Beer, president of Aviagen, North America was elected to the Board of Directors of the U.S. Poultry and Egg Association to serve a 2021.


A native of the Republic of South Africa, Dr. de Beer earned a doctoral degree in animal nutrition from the University of Arkansas and served as a nutritionist for Aviagen in 2007, subsequently being promoted to Global Head of Nutrition after a period with a major nutritional products company. In April 2020 he returned to Aviagen as president of the North America operating subsidiary.


Taiwan on Alert for ASF Emanating from China


The Agricultural Minister of Taiwan, Chen Chi-chung confirmed that a hog that washed ashore in his nation on Sunday, April 4th yielded ASF virus consistent with the strain circulating in China.  The event resulted in a program of surveillance among eleven hog farms within a 6-mile radius of where the dead pig was discovered.  Restrictions on movement of hogs and farm quarantines have also been placed over the area and veterinarians are intensifying pre- and post-mortem inspections of hogs in packing plants.


The presence of a dead hog with ASF washed up on a foreign shore suggests improper disposal of infected animals in China.  Previous cases of dead hogs being discovered in rivers and waterways in China have been documented and are contrary to official reports that ASF is under control and that appropriate biosecurity measures are in effect.

ASF Surveillance, Taiwan


USDA to Implement CFAP 2


Effective April 5th, the USDA will implement the second round of the Coronavirus Food Assistance Program (CFAP 2) that was frozen in January with $2.3 billion set aside for the program.  Farmers now have 60 days to apply or to modify previously submitted CFAP 2 applications.


Although final details have yet to be announced, the CFAP updates will include payments for cattle to 410,000 producers to the value of $1.1 billion.  Row-crop farmers will receive $20 per acre with $4.5 billion potentially distributed to 560,000 producers.  USDA will also assign $6 billion for new programs using funding from the Consolidated Appropriations Act signed in December.


Socially disadvantaged farmers and ranchers will receive $2 million and proposals are now solicited to provide outreach and technical assistance to minority and small-scale farmers.

On April 12th USDA announced that $60 million was disbursed the previous week.


Chore-Time Appoints Broiler Products Manager


According to an April 6th press release, Daniel Morehouse has been appointed as product manager for Chore-Time with specific responsibilities for broiler systems.  Prior to this promotion, Daniel functioned as an engineer for Chore-Time working on floor feeders.  He is a graduate of Penn State University with a degree in biological and agricultural engineering.


Crop Progress


Status of 2020 Corn and Soybean Crops


The USDA Crop Progress Report released on April 12th documented the commencement of corn planting to date compared to the 5-year average. Subsoil and surface moisture levels were generally lower on average than the corresponding weeks in 2020 due to drought in Western states and the Dakotas. CHICK-NEWS and EGG-NEWS will report on the progress of the two major crops as monitored by the USDA through the end of the 2021 harvest in November.


Reference is made to the April 9th WASDE Report #611 accessible under the STATISTICS tab for projected 2021 acreage and yields.




April 4th

April 12th

5-Year Average

Corn Planted (%)

Corn Emerged (%)







Soybeans planted (%)

Soybeans Emerged (%)








Crop Condition

Awaiting germination

V. Poor





Corn 2021 (%)

Corn 2020 (%)

Soybeans 2021 (%)

Soybeans 2020 (%)



V. Short




Topsoil moisture %: Past Week*





Past Year





Subsoil moisture %: Past Week





Past Year






* States with categories of “Very Short and “Short” Topsoil moisture combined:-


NM 93%

SD 83%

ND 80%

TX 70%

CA 65%

WY 65%

OR 57%






The April 9th 2021 USDA WASDE Report reflecting the anticipated 2021 growing season was basically unchanged from the March 2021 edition except for exports and ending stocks. This is normal given uncertainties regarding the future crop that has yet to be planted. The USDA ERS will make changes to projected ending stocks in May and June depending on planting in the U.S., export trends and harvests in Brazil and in the Southern hemisphere. There was no change in either U.S. corn or soybean harvest areas from the March WASDE report but this may be altered subsequently by world prices and weather considerations. The corn acreage to be harvested is currently estimated at 82.5 million acres and soybeans will be harvested from 82.3 million acres.


The April 2021 WASDE estimate of corn yield was held at 172.0 bushels per acre, (175.8 bushels per acre in 2020). The estimate of soybean yield was maintained at 50.2 bushels per acre. (50.7 bushels per acre in 2020)


The April 2021 USDA projection for the ending stock of corn was lowered by 10.0 percent to 1,352 million bushels based on export trends. Despite ongoing exports the ending stock for soybeans was held at 120 million bushels but may subsequently be downsized.


Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with increased exports in accordance with the needs of China rather than compliance by that nation with the Phase-One trade agreement. The April 2021 WASDE retained the corn price at $4.30 per bushel. Soybeans were raised 0.9 percent to 1,125 cents per bushel.


It is accepted that projections are based on the reality that China sharply increased purchases of commodities partly to cover disruptions in imports during the first quarter of 2020 caused by COVID. China booked substantial orders for corn and soybeans to be delivered through August for the 2019-2020 market year in addition to large quantities booked from September onwards for the 2020-2021 market year. Reports on volumes of commodities exports to China will be included in upcoming weekly editions of CHICK-NEWS and EGG-NEWS in subsequent mailings as data becomes available.



The corn harvest for 2021 projected in the April 2021 WASDE Report #611 is unchanged at 14,183 million bushels consistent with planting intentions. The projected 2021 harvest can be compared to 14,507 million bushels in 2020 and is 6.4 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was increased by 0.9 percent to 5,700 million bushels. The “Ethanol and Byproducts” category was increased by 0.5 percent to 4,975 million bushels in anticipation of higher domestic demand for E-10 and E-15 due to relaxation of COVID-19 restrictions and increased demand from the export market. Corn exports increased 2.9 percent to 2,675 million bushels despite intense competition from Brazil and Argentine and high world domestic coarse grain production relative to demand. Ending stocks were lowered by 10.0 percent to 1,352 million bushels.

The forecast USDA farm price for corn was maintained at 430 cents per bushel. At 14H00 on April 9th after release of the WASDE the CME quotations for May corn was 581 cents per bushel, up 5.2 percent from the quotation on March 9th and currently 35.1 percent above the April USDA projection for 2021.


Turkey Week


Weekly Turkey Production and Prices April 9th 2021


Poult Production and Placement:

The March 16th 2021 edition of the USDA Turkey Hatchery Report, issued monthly, documented 27.0 million eggs in incubators on March 1st 2021 (26.2 million eggs on February 1st 2021) and down 3.4 percent (0.9 million eggs) from March 1st 2020.


A total of 21.4 million poults were hatched during February 2021 (21.5 million in January 2021), and representing a decrease of 5.2 percent (1.1 million poults) from February 2020.


A total of 19.6 million poults were placed on farms in the U.S. in February 2021, (19.8 million in January 2021), and 5.0 percent less than in February 2020. This suggests disposal of 1.8 million poults during the month (1.7 million in January 2021). Assuming all tom poults were placed, up to 16.8 percent of February-hatched hen poults or 8.4 percent of all February-hatched poults may not have been reared. This is an unsubstantiated estimate in a fluctuating demand for processed toms and hens in a COVID-affected market. (See relative numbers of hen and tom poults processed under Production Data below).


For the twelve-month period March 2020 through February 2021 inclusive, 272.3 million poults were hatched and 249.4 million were placed. This suggests disposal of 23.0 million poults. Assuming all tom poults were placed, (representing a broad assumption as above), 16.9 percent of hen poults or 8.4 percent of all poults hatched during the period were not placed.


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


Turkey Production:

The April 9th 2021 edition of the USDA Turkey Market News Report (Vol. 68: No.14) confirmed the following provisional data for turkeys slaughtered under Federal inspection:-


  • For the short processing week ending April 2nd 2021, 1.210 million young hens were slaughtered during the processing week at a live weight of 16.4 lbs. (last week 1.773 million hens at 17.4 lbs.). During the corresponding week in 2020, 1.657 million hens were processed, 36.9 percent more than the current week. Ready-to-cook (RTC) hen weight for the week attained 16.0 million lbs. (7,265 metric tons), 25.5 percent less than the corresponding processing week of 2020. Dressing percentage was a nominal 80.5. In 2021 RTC hen production attained 287 million lbs. (130,692 metric tons), 6.4 percent less than for YTD 2020.
  • For the short processing week ending April 2nd 2021, 1.593 million toms were slaughtered at 45.1 lbs, compared to 2.244 million toms processed during the previous week at 45.6 lbs. For the corresponding week in 2020, 2.371 million toms were processed, 32.8 percent more than in the past week. Ready-to-cook tom weight for the week attained 57.8 million lbs. (26,276 metric tons), 30.6 percent less than the corresponding processing week in 2020. Dressing percentage was a nominal 80.5 percent. In 2021 RTC tom product attained 1,081 million lbs. (487,083 metric tons), 10.4 percent less than for YTD 2020.
  • The National average frozen hen price during the past week was 115.3 cents per lb., down 1.7 cents per lb. from the previous week and up approximately 25 cents per lb. from the three-year average. The following prices rounded to nearest cent were documented for domestic and export trading on April 9th 2021:-


Broiler Week


Weekly Broiler Production and Prices, April 9th 2021.


Chick Placements.

The Broiler Hatchery Report released on April 7th 2021 confirmed that a total of 240.3 million eggs were set during the week ending April 3rd 2021, fractionally lower than the corresponding week of the previous year and 0.9 percent (2.0 million eggs) more than the previous week.


A total of 178.3 million day-old chicks were placed among the 19 major broiler-producing states during the week ending April 3rd 2021. Total chick placements for the U.S. amounted to 187.5 million, two percent less than the corresponding week in 2020 and <0.1 percent (<0.1 million chicks) less than the previous week. Claimed average hatchability was 80.1 percent for eggs set three weeks earlier, (79.2 percent for the previous week). Cumulative placements for the period January 2nd 2021 through April 3rd 2021 amounted to 2.43 billion chicks, two percent lower than the corresponding period in 2020. The 5 million drop in chick placements during the week of March 13th was attributed to weather-related disruption in egg collection and hatchery operations in Texas, Louisiana and Mississippi in mid-February.


Broiler Production

According to the April 9th USDA Broiler Market News for the processing week ending April 2nd 2021, 161.9 million broilers were processed during the past week (previous week 166.0 million) at an average live weight of 6.23 lbs. (6.14 lbs. last week) and a nominal yield of 76 percent. The number of broilers processed was 1.7 percent less than the corresponding processing week in 2020. Processed (RTC) broiler production for the week was 766.7 million lbs. (348,505 metric tons), (791.2 million lbs. last week), 0.7 percent less than the corresponding processing week in 2020. In 2021 Processed (RTC) production attained 10.84 million lbs. (4,925,790 metric tons), 3.3 percent less than YTD 2020.


Broiler Prices

The USDA National Composite Weighted Wholesale price on April 9th 2021 was up 6.5 cent per lb. from the previous week to 98.8 cents per lb., compared to 50.5 cents per lb. during the corresponding week of 2020; 86.7 cents per lb. for March 2021 and 85.0 cents per lb. for the three-year average. The industry still is impacted by the contraction in the food service segment following imposition of COVID-19 restrictions.


The USDA Southern States (SS) benchmark prices in cents per lb. (rounded to nearest cent) as documented in the Broiler Market News Reports April 9th 2021 are tabulated with a comparison with the previous week:-






  • The financial and economic policies of the Biden-Harris Administration are emerging following passage of the $1.9 Trillion COVID Stimulus Package. This legislation is intended to expedite the vaccination campaign to reduce the impact of the COVID-19 pandemic and restore the economy by early summer.  USDA will provide extensive support to minorities in agriculture, small family farms and will extend SNAP benefits to alleviate hunger.


  • The commodity market this past week diverged with corn and soybeans both higher continuing the trend from the previous week. The increase in corn was attributed to exports and recognition of lower ending stocks as forecast in the April 9th WASDE Report and the March 31st Grain Stocks update. Data on plantings and ending stocks will be updated in the May WASDE.



  • The direction of agricultural and trade policy to be implemented by the Biden Administration in 2021 is now clear following the March confirmation of Tom Vilsack as USDA Secretary. He has emphasized support for the disadvantaged, sustainability and addressing climate change as Departmental priorities consistent with pre-election promises by then Candidate Biden.  Michael Regan and Kathleen Tai have been confirmed as the Administrator of the EPA and U.S. Trade Representative respectively. Ms. Tai has already expressed firmness in dealing with China, a sentiment echoed by Secretary of State Antony Blinken at bilateral meetings with China in Alaska on March 18th



  • U.S producers are now receiving and conversely livestock producers in the Midwest are paying close to $5.50 per bushel for corn and crushers are paying $14.00 per bushel for soybeans plus transport and basis.


  • Corn advanced by 3.9 percent and soybeans were fractionally higher than the previous week although both commodities are at notably high levels. Soybean meal was up 0.2 percent for May delivery. These past two weeks were characterized by extreme fluctuation with corn and soy limit high on Wednesday March 31st following the release of the USDA Grain Stocks and Planting Intentions reports.


  • According to the USDA FAS Export Report for the week ending April 1st 2021 reflecting market year 2020-2021, outstanding export orders for corn amounted to 30.5 million metric tons (1,202 million bushels) with 36.0 million metric tons (1,418 million bushels) actually shipped. During the past week 0.8 million metric tons (31.5 million bushels) of corn were ordered, the same as the previous week and lagging the four-week average. A total of 2.1 million tons (82.7 million bushels) of corn was shipped.


  • Outstanding export orders for soybeans for the 2020-2021 market year attained 5.6 million metric tons (206 million bushels) with 55.2 million metric tons (2,026 million bushels) actually shipped. This past week some previously placed orders from China were cancelled reflecting in weekly sales of soybeans recording a net reduction of 0.1 million metric tons (3.7 million bushels) with 0.4 million metric tons (14.8 million bushels) shipped. During the past week 127,700 metric tons of soybean meal and cake were ordered and 249,600 metric tons were shipped, approximating 97 percent of the previous week.


The following quotations for delivery in the months as indicated were posted by the CME at14H00 on April 9th 2021 compared with values posted at 14H00 on April 2nd 2021  (in parentheses) reflecting specified months in 2021 for delivery.




Corn (cents per bushel)

 May    581        (559)      

July      565      (544)

Soybeans (cents per bushel)

 May 1,405     (1,402)

July  1,400   (1,397)

Soybean meal ($ per ton)

 May    402         (409)

July     406       (411)


Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-



Corn:                  May quotation up22 cents per bushel             (+3.9 percent)

Soybeans:         May quotation up 3 cents per bushel               (+0.2 percent )

Soybean Meal: May quotation down $7 per ton                        (-1.8 percent )


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

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

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


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

The cost of egg production would change by 0.44 cent per dozen

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


This week the changes in the prices of corn and soybean meal would increase nest-run production cost for eggs by 0.7 cent per dozen and for broilers 0.3 cent per live pound. Over the past 13 weeks, escalations in the prices of major ingredients have added 8.1 cents per dozen and 5.3 cents per live-weight lb.



According to the April 9th WASDE, corn harvested in calendar 2021 will attain 14,183 million bushels with ending stocks projected at 1,502 million bushels, unchanged from the March 2021 WASDE Report. Values will be updated reflecting production, ongoing export volumes and domestic use in the May WASDE. Compared with the April 2nd value, the CME quotation for corn at 14H00 on April 2nd was up 22 cents per bushel for May delivery to 581 cents. The USDA projected a 1.0 percent decrease in acreage planted to corn in 2021 not reflected in the April WASDE.


The social restrictions imposed in the U.S. as a result of COVID-19 will reduce ethanol demand by 1.5 billion gallons or 10 percent of projected 2020-2021 requirement accepting a nominal ten percent addition to gasoline. This past week 15 percent of the U.S. ethanol fermentation capacity was off-line or operating at lower than capacity. The outlook for increased production will depend on domestic demand with ten percent of production exported. According to the U.S. Energy Information Agency for the week ending April 2nd the industry produced on average 975,000 barrels per day up 8.2 percent from the 965,000 barrels per day for the week ending March 26th 2021. Ethanol stocks stood at 20.6 million barrels, (approximately a 20-day reserve), down 2.2 percent from the previous week.


Ethanol was priced at $1.91 per gallon on April 9th unchanged since March 26th reflecting WTI crude and compared with a five-year low of $0.92 per gallon on March 26th 2020. Concurrently RBOB gasoline at $1.95 per gallon (quoted, New York Harbor) was down 3.5 percent from the previous week presumably due to WTI crude price and is 4 cents per gallon higher than ethanol but with a 63 percent higher BTU rating.  Relative prices of commodities, crude and ethanol might be

indirectly influenced through mid- April as a result of the one-week blockage of the Suez Canal that disrupted trade between Asia and Europe and exacerbated the current shortage of available marine shipping containers.


With more plants among the 201 operational on January 1st 2021, DDGS is freely available but commanded a higher price than in the fourth quarter of 2020. Eastern Corn-belt product was priced at $219 per ton on April 6th 2021, $11 per ton higher than the previous week but $14 per ton more expensive than on March 31st 2020.


 Soybeans continue to be the beneficiary of export demand by China. The CME price at 14H00 on April 9th rose 0.2 cent per bushel over the week to 1,405 cents per bushel for May delivery. The USDA documented a 2021 crop of 4,135 million bushels. Ending stocks according to the April 9th 2021 WASDE projection will attain 120 million bushels, unchanged from the March and February projections representing a seven-year low. The USDA Planting Intentions report indicated that soybean acreage would increase by 5 percent over 2020. This change was not reflected in the April WASDE. According to the National Oilseed Processors Association 155 million bushels of soybeans were crushed in February. This value was 6 percent lower than in January due to disruption caused by a shortage of natural gas attributed to severe weather.


On April 6th` 2021 Meat and Bone meal quoted Central U.S. attained $415 per ton, down $10 per ton from the previous week and compared to $255 per ton on March 31st 2020 when a surplus prevailed due to COVID-related disruption of packing operations requiring euthanasia of hogs.


On April 9th the BRL exchange with the CNY was 0.86, (down CNY 0.01 from the previous week). The conversion of the US$ to the CNY was set at 6.55 up CNY 0.02, from the previous week.


For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipates that soybean imports by China will amount to 95 million metric tons during the 2020-2021 market year.


For the 2019/2020 market year China imported 2.1 million metric tons of corn from the U.S., 4.8 percent of total exports of 43.3 million tons, but 12 percent less than in the 2018/2019 market year. The U.S. Grains Council documented sales of U.S. corn to China through December 31st 2020 during the 2020/2021 year amounting to 11.7 million metric tons (460 million bushels) with 65 percent yet to be shipped.


For the 2019/2020 market year China imported 16.3 million metric tons of soybeans from the U.S., 36.2 percent of total exports of 44.9 million metric tons, but 3.9 percent less than in the 2018/2019 market year.


Subscribers are referred to the April 9th 2021th WASDE #611 in this edition


Consistent with the need for self-sufficiency China announced on January 8th that an additional 1.7 million acres would be planted to corn in 2021. China intends to rehabilitate 6.8 million acres of “polluted land” to be brought into production.


Approximately $16 billion was disbursed under the Coronavirus Food Assistance Program (CFAP) in early 2020. An additional $14 Billion relief package was announced by the Administration on September 18th with all of the allotment having been distributed. Additional funds will be included in the proposed Coronavirus Relief Package. USDA has frozen distribution of CFAP funding including $2.3 billion for hog and poultry contractors and $13 billion for row crop farmers. A revised program for development and a schedule for disbursement was the subject of a USDA release this past week.


U.S. Meat Exports


U.S. Broiler and Turkey Exports, January-February 2021.


Total exports of bone-in broiler parts and feet in January-February 2021 attained 580,115 metric tons, 3.2 percent more than for the first two months of 2020 (561,712 metric tons). Total value of exports increased by 4.4 percent to $611 million ($584 million 2020).


Unit price is constrained by the fact that leg quarters comprise over 96 percent of exports except feet. Leg quarters represent a relatively low-value commodity lacking in pricing power. Exporters of commodities are subjected to competition from domestic production in importing nations. Generic products such as leg quarters are vulnerable to trade disputes and embargos based on real or contrived disease restrictions.


The extensive outbreak of African swine fever will sustain U.S. exports to Asia over the intermediate-term although China is rapidly increasing domestic hog production. All animal protein has risen in price as pork supply was restricted but will be reversed as supply is restored in 2021.


Direct comparisons between January-February 2020 and 2021 are confounded by the USDA combining export quantities of feet with chicken meat from April 2020 onwards.


The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports for January-February 2020 with 2021:-



Jan-Feb. 2020

Jan-Feb. 2021


Broiler Meat & Feet

Volume (metric tons)



+18,403 (+3.2%)

Value ($ millions)



+26 (+4.4%)

Unit value ($/m. ton)



+12 (+1.2%)

Turkey Meat

Volume (metric tons)



-3,443 (-8.7%)

Value ($ millions)



-20.5 (-20.9%)

Unit value ($/m. ton)



-331 (-13.3%)

Chicken Paws


Volume (metric tons)


Not disclosed

Value ($ millions)


Not disclosed

Unit value ($/m. ton)


Not disclosed

*See note concerning inclusion of feet in totals from April onwards in text above


Broiler Production in Japan in 2021 to be Unchanged from 2020


According to USDA-FAS GAIN Report JA2021-0042 released March 30th, production of broilers in Japan will remain at 1.765 million metric tons, the same as in 2020.  Imports will increase by 5,000 metric tons to 1.01 million metric tons or 34 percent of total supply.  Domestic consumption of 2.775 million metric tons represents a per capita consumption of 48.2 lbs assuming a population of 127 million.


FAS ascribes the static production to losses sustained from avian influenza, although the layer industry has suffered disproportionately with over 9 million layers or 5 percent of the total population having been depopulated.  Spent layers are however processed in Japan and represent 10 percent of the total number of birds slaughtered annually.

Thai workers prepare presentations for Japan


In evaluating the proportions of animal meats consumed in Japan, out of 7.73 million metric tons, chicken represents 36 percent, beef 13 percent, pork 51 percent. Consumers in Japan derive a significant proportion of their protein from pulses, seafood, finfish and eggs.


Of the exporters to Japan, Brazil represented 39 percent, joint ventures in China 16 percent and Thailand 42 percent with 3 percent from other suppliers.  With a reduction in import duty effective April 1st 2021, in terms of the bilateral U.S.-Japan trade agreement, the U.S. might become competitive.  The problem lies in presentation since products from Thailand and China comprise prepared forms requiring a high level of manual labor.


Sales and hence production of chicken in 2020 was constrained by COVID with full service Izakaya-restaurants severely impacted.  In recent months, Japanese and western style fast food establishments have increased sales with traditional Yakiniku restaurants failing to reestablish sales other than by offering pickup and delivery.


Rabobank Emphasizes Effect of COVID and Overproduction on Global Chicken Industries


According to a report prepared by Nan-Dirk Mulder, Senior Analyst-Animal Protein for Rabobank, prospects for the global chicken industry are improving.  Current challenges include:-


  • Depressed production due to COVID restrictions and economic decline


  • Avian influenza has resulted in severe losses in Asia, Russia and in some eastern E.U. nations.  Countries relying on imports of fertile eggs or chicks have experienced disruption in their supply chains.

Nan-Dirk Mulder


  • Overproduction persists in South Africa, Thailand and in the European Union.


  • Feed prices will remain at elevated levels attributed to demand including imports of soybeans and corn by China and lower yields attributed to the effect of a dwindling La Nina event.


Mulder pointed to high competition and depressed trade, requiring producers to carefully plan production levels and expansion.  There are limits to cost reduction given the ingredient situation exacerbated by market speculation.


Infrastructure Plan Includes Tax Credits for Renewables


The proposed Infrastructure Investment Program will incorporate a 10-year extension of existing tax credits for solar and wind energy introduced in 1992 and 2005 respectively. Since this time the capital cost of power generation has declined sharply with innovations and scale of manufacture. 


The Infrastructure proposal also includes an investment tax credit for high-voltage transmission lines that are required to distribute power generated by wind in the Midwest and Plains states  to areas of high demand.


Shell Egg Academy goes Virtual


Registration Open for Shell Egg Academy


Contact: Lara Durben, lara@empoweredeventsllc.com



The Shell Egg Academy-Virtual Edition from Purdue University Extension is open for registration!


Join us virtually on June 21 - 25, 2021 for the Shell Egg Academy (SEA), which will provide interactive class sessions on egg quality and food safety for farmers and egg companies producing and processing table eggs. Sessions will be held on Zoom.


Virtual SEA will provide online learning from experts around the U.S. as well as engaging participants through a Lab-In-A-Box (LAB). The LAB will involve materials needed for hands-on activities over the courses. All participants will need access to shell eggs during the courses. Closed-captioning will also be available in real-time. 


Shell Egg Academy is divided into two courses:

·      Course 1: Live Hen Production (June 21 - June 23)

·      Course 2: Egg Processing and Food Safety (June 23 - June 25)


Participants may select either course or select both courses. All participants will receive the LAB box with course materials prior to the start of the academy. Because the class is virtual, participants also have the option to make a deposit or purchase a candler, which is needed for the academy. If you already have access to a candler, you may purchase the course(s) without that add-on.


At the end of each course, participants take an exam to earn a competency certificate.


View full schedule (note the appropriate time zones)


Sponsorships are also available at a variety of price points for companies wishing to show their support of the egg industry.


To register and/or pledge your sponsorship, please visit: https://empoweredeventsllc.regfox.com/shell-egg-academy-virtual


Program questions about the academy may be directed to Dr. Darrin Karcher at dkarcher@purdue.edu. 


For assistance with registration, please email info@empoweredeventsllc.com or call 763/284-6763. 


Shell Egg Academy | a Purdue University Extension education opportunity with planning assistance from Empowered Events LLC,.


ADM Resuming Ethanol Production at Two Facilities


Following a 12-month closure, ADM is resuming ethanol production in their Cedar Rapids, IA. and Columbus, NE. plants.


Reopening of the economy with consequential demand for domestic ethanol production in addition to exports has justified this action.  A company statement pointed to the Administration support for the renewable fuel standard (RFS) and increasing exports to China.



ADM Cedar Falls IA Ethanol Plant

ADM Columbus NE Ethanol Plant
ADM operates 17 corn-processing plants including dry mills where corn is ground and rolled for both fuel and animal feeds.


Secretary Vilsack Advocates for Renewal of Trade Promotion Authority


Secretary of Agriculture Tom Vilsack considers that renewal of the Trade Promotion Authority is critical to maintaining exports.  Legislation funding the Trade Promotion Authority expires in June.


Vilsack is a supporter of the U.S. joining the Comprehensive and Progressive Agreement on Trans-Pacific Partnership (CPTPP). This would help U.S. agriculture given the lost opportunities following withdrawal from the Trans-Pacific Partnership (TPP) within days of the previous Administration assuming office.  The eleven remaining members of the TPP then formed the successor CPTPP that effectively excluded U.S. from trade benefits enjoyed by member nations.


The USDA also favors a free trade agreement with the United Kingdom in addition to establishing new markets in Africa and Asia.



Washington State Cattle Feeder Pleads Guilty to Fraud


Cody Allen Easterday of Mesa, WA. pleaded guilty to a $244 million fraud.  It is alleged that he billed Tyson Foods and other companies for feeding non-existent cattle dating back to 2016.


Tyson audited documentation and established that falsified documents were submitted for reimbursement.  The more than $200 million paid to Easterday contributed in part to the Tyson Fresh Meats loss in fiscal 2020. In a statement released by Tyson Foods the company indicated that the $285 million loss in fiscal 2020 was related to the specific cattle supplier representing approximately two percent of total cattle supply to the beef segment from fiscal 2017 though 2020.


Apparently Easterday used the proceeds from Tyson Foods to cover losses on commodities trading.  Easterday also defrauded the CME Group by submitting falsified paperwork in relation to applicable position limits in live cattle futures.


Acting Assistant Attorney General, Nicholas L. McQuaid of the Department of Justice Criminal Division stated, “For years Cody Easterday perpetrated a fraud scheme on a large scale increasing the cost of producing food for American families.”  He added, “Prosecutors are committed to swiftly and thoroughly prosecuting frauds affecting our Nations agricultural and other commodities markets whether in the heartland or on Wall Street.”  Easterday will be sentenced on August 4th and is facing a maximum penalty of 20 years imprisonment.



2021 Midwest Poultry Federation Educational Program


Subscribers can access <www.midwestpoultry.com> for the complete listing of presentations.


Press Release

For immediate release

April 5, 2021

Contact: Lara Durben

ldurben@midwestpoultry.com or 763/284-6763


Midwest Poultry Federation Announces Education Program

Core Tracks for Turkeys, Eggs, Broilers & Processing + Additional Content from Purina and Multi-State Poultry Conference


The full education program for the 2021 Midwest Poultry Federation (MPF) Virtual Convention is now available at MidwestPoultry.com.


MPF’s Education Co-Chairs – Drs. Darrin Karcher of Purdue University and Ken Koelkebeck of the University of Illinois – worked with poultry experts form academia, government agencies, and industry to develop a robust education program that covers a variety of important topics for poultry farmers, poultry processing companies, and suppliers.


MPF’s core education tracks were each given a specific day on the schedule in an effort to keep the sessions flexible for attendees:


March 18 – Broiler Track

March 19 – Processing Track

March 20 – Pullet / Egg Layer Track

March 21 – Turkey Track


In addition to the live speakers on these days, there will be a variety of on-demand presentations in each track as well as a special “Exhibitor Featured Content Track”.


Attendees also will be pleased to find out their registration provides complimentary access to these special events as well:


·      Lunchtime Learning session on May 20, with topics covering why the right building materials matter from an insurance standpoint; and lessons learned from the founders of ChopLocal.com – a website that connects consumers directly to farmers.

·      Purina Animal Nutrition Symposium, featuring a variety of speakers on May 19 (8:00 am – Noon CST)

·      Multi-State Poultry Feeding & Nutrition Conference on May 19 (speakers and topics run 1:00 pm – 4:45 pm CST)


All education programming will remain available to attendees through May 31.


Registration to the MPF Convention is open now at https://midwestpoultry.com/attendees/registration/.


About MPF

MPF is a 501(c)6 nonprofit association and its annual convention is the nation’s largest poultry trade show and convention dedicated 100% to the poultry industry. In 2019 more than 3,100 attendees and exhibitors attended the show in Minneapolis. In 2020, MPF hosted its first-ever successful virtual trade show and convention.


Revenue generated by the convention goes back to MPF’s members (comprised of 11 poultry associations in the Midwest) and to support various poultry programs. Since 2011, MPF has donated over $500,000 back to the poultry community.


To request complimentary media registration to the 2021 MPF Virtual Convention, please contact Lara Durben. 


Link to this press release


Tyson Foods Obliged to Defend Advertising Claims


Judge William M. Jackson, an Associate Judge of the D.C. Superior Court has ruled that a case against Tyson Foods should proceed.  The action was initiated in 2019 by activist organizations, Food and Water Watch and the Organic Consumers Association.  Plaintiffs allege that advertising used by Tyson is false and misleading with respect to "humanely raised" and "products produced in an environmentally responsible way". 


Tyson filed an unsuccessful motion to dismiss the case.  Judge Jackson determined that the plaintiffs had standing to file the lawsuit as they were organizations of public interest.  The contention that the lawsuit was a violation of First Amendment Rights was rejected based on the fact that the statements relating to ‘environmental responsibility’ and ‘humanely raised’ are characteristic of commercial speech, proposing a commercial transaction.


The plaintiffs are not claiming damages but have jointly initiated litigation to change marketing and advertising use by Tyson and presumably by extension to the U.S. poultry and livestock industries. This case has profound implications for producers of eggs, chicken and turkey with respect to label claims, in the event of an adverse verdict.


Mountaire Farms Donated Meal Boxes for Families During Easter


Mountaire Farms employees worked with community volunteers on Tuesday, March 25th to pack and distribute 3,000 meal boxes for families in advance of Easter.


Kathy Bassett, Director of Communications and Community Relations for Mountaire stated, "everyone knows this pandemic has been so hard on so many with businesses closing and people who were laid off from work and have found themselves with food insecurity issues". 


Phil Plylar, President of Mountaire Farms stated, "whether it's Christmas, Thanksgiving or now Easter for Thousands, because of your efforts we are going to help our fellow folks here on the Eastern Shore".


This is the first Easter event of its kind for Mountaire although it holds Thanksgiving for Thousands events.  Over the course of the pandemic the Company has donated one million pounds of chicken to deserving groups.

Phil Plylar CEO Mountaire Farms


First Glance at Proposed Spending by the Administration on Infrastructure


Although the final plan and expenditures have not been revealed, initial information suggests the following projects:


  • $85 billion for public transit
  • $80 billion to modernize the northeastern Amtrak corridor
  • $174 billion for approximately half a million electric vehicle charging stations and electrifying school buses and federal vehicles
  • $25 billion for air travel and airports
  • $17 billion for waterways to coastal ports


With respect to the broiler industry, waterway improvements and roads will benefit the availability of ingredients and distribution of product.  Injecting anywhere between $1 and $3 billion into the economy will certainly create new jobs and boost demand through an improvement in the economy.


African Swine Fever Extends to the Island of Leyte in the Philippines


Following the emergence of African swine fever (ASF) on the Islands of Luzon and Mindanao, cases were diagnosed in Leyte at the end of January.


Local outbreaks are ascribed to feeding swill, but it is evident that with the bulk of Philippine hog production from small family-operated farms, deficiencies in biosecurity, transport and trading in hogs are responsible for dissemination of ASF in the Nation.

Too little too late

Given the inability of the government of the Philippines to control ASF it would be appropriate to reduce the 30 percent import duty on pork and to allow importation of chicken from the U.S. to ease the inflation in the price of available protein.


Federal Court Vacates FSIS New Swine Inspection System Rule


On Wednesday, March 31st, U.S. District Judge Joan Ericksen of the Minnesota Circuit vacated the October 2019 FSIS rule permitting the New Swine Inspection System with unlimited line speed.  The order issued by Judge Ericksen was stayed for 90 days to allow packers to adapt to the permitted line speeds prior to the NSIS.


The United Food and Commercial Workers Union sued*, claiming that the USDA violated the Administrative Procedures Act.  The Union claimed that when the NSIS was proposed worker safety was an important consideration and requested public comment. The FSIS rejected comments relating to worker safety in relation to line speeds and accordingly violated the Act.


The Court held that USDA acted arbitrarily and capriciously when it refused to consider the impact of eliminating line speed limits in relation to worker health and safety.  The court rejected arguments advanced by the meat packing industry that increased line speeds do not put workers at increased risk of harm.


*United Food and Commercial Workers Union Local #663 v U.S. Department of Agriculture.


Administration Infrastructure Package Includes Allocation for Broadband Service


As part of the proposed $2 trillion infrastructure initiative, the Administration intends making available $100 billion for reliable broadband service that will benefit rural residents.  An additional $5 billion will be assigned to the Rural Partnership Program addressing the economic needs of rural residents. 


COVID Situation Deteriorating in Brazil


Brazil recorded close to 20,000 deaths last week bringing the National total to more than 300,000 fatalities in a population of 212 million.  A physician in Sao Paulo stated that there is a lack of medication, oxygen, PPE, and intensive care beds, contributing to unnecessary deaths.  Shortage of trained personnel is also contributing to mortality with eight out of ten patients dying following intubation compared to a global average of five out of ten.  The number of cases in the 30 to 59 year old cohort requiring hospitalization is increasing as more young members of the population are infected.  It is suggested that the P.1 variant is responsible for both hospitalizations and fatalities since the strain can evade antibodies stimulated by either previous COVID infection or from vaccination.  Unfortunately Brazil has been remiss in viral characterization. 

Pres. Bolsonaro in a symbolic gesture avoiding the smell of dead bodies

The COVID situation in Brazil is exacerbated by conflicts between President Jair Bolsonaro and state governors who are imposing lockdowns and other accepted preventive measures.  Bolsonaro refers to them as ‘tyrants’ and commented publicly that although the government regretted deaths ‘there has been enough fussing and whining’.  The Federal Government failed to order vaccines and only six percent of the population has received a single dose.


The ongoing COVID epidemic in Brazil will have a negative effect on chicken production and exports.


In contrast, neighboring Chile has vaccinated approximately half of the population and has imposed strict lockdown measures including evening curfews.  Chile has recorded one million cases and at present 95 percent of intensive care beds are occupied.


JBS USA to Pay $20 Million in Alleged Price Fixing of Pork


A Federal judge in the Minnesota Circuit overseeing the litigation relating to alleged fixing of prices of pork in a class action lawsuit considered that the proposed settlement by JBS USA is “fair, reasonable, adequate and in the best interest of the plaintiffs.”  The plaintiffs comprising consumers (the indirect class) claimed that JBS and other pork producers colluded directly or indirectly in establishing prices for pork commencing in 2009.  Payment of the $20 million was not an admission of guilt or that any laws were violated.


The present settlement to consumers follows a previous 2020 settlement of $25 million paid to direct purchasers of pork.



Company Loses Missouri Meat Label Appeal


In 2018 Turtle Island Inc. the manufacturer of Tofurky® a vegetable-based meat substitute sued the state of Missouri claiming that the labeling law was unconstitutional and deprived the company and other alt-meat manufacturers of their First Amendment rights. 


A district court rejected the assertion of the plaintiffs who appealed to the 8th U.S. Circuit Court.  The Court ruled that the plaintiffs had not established that the law applies to the company’s products or that Tofurky faced any risk relating to enforcement.  Senior Circuit Judge Michael Melloy ruled that, “the statue would not ever nor could ever be applied to their speech and therefore the company would not likely be harmed in a potential enforcement action.”



USDA Grain Stocks Report


The USDA quarterly Grain Stocks Report released on March 31st 2021 documented storage of commodities produced in the U.S. classified according to on-site and remote facilities including elevators and commercial installations. Quantities of corn and soybeans, the two major commodities relevant to poultry production were:-


“Corn stocks in all positions on March 1st 2021 totaled 7.70 billion bushels, down 3 percent from March 1st 2020. Of the total stocks, 4.04 billion bushels were stored on farms, down 9 percent from a year earlier. Off-farm stocks, at 3.66 billion bushels, are up 5 percent from a year ago. The December 2020 - February 2021 indicated disappearance is 3.59 billion bushels, compared with 3.38 billion bushels during the same period last year”.


“Soybeans stored in all positions on March 1st 2021 totaled 1.56 billion bushels, down 31 percent from March 1st 2020. Soybean stocks stored on farms are estimated at 594 million bushels, down 41 percent from a year ago. Off-farm stocks, at 970 million bushels, are down 22 percent from last March. Indicated disappearance for the December 2020 - February 2021 quarter totaled 1.38 billion bushels, up 39 percent from the same period a year earlier.”


The Grain Stocks report taken in conjunction with the Prospective Planting report sent both corn and soybeans to limit-up at close of trading on March 31st on the CME.


USDA Prospective Planting Report


The eagerly anticipated USDA Prospective Planting Report released March 31st sent corn and soybeans into limit-up mode. Corn closed at 565 cents per bushel and soybeans at 1,237 cents per bushel. Corn price held on Thursday with May contracts at 567 cents per bushel contrasted to soybeans that backtracked 1.2 percent to 1,420 at 11H00 EDT.




The USDA release documented:-

“Corn planted area for all purposes in 2021 is estimated at 91.1 million acres, up less than 1 percent or an increase of 325,000 acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 24 of the 48 estimating States”.


“Soybean planted area for 2021 is estimated at 87.6 million acres, up 5 percent from last year. Compared with last year, planted acreage is up or unchanged in 23 of the 29 estimating States.”


Aviagen to Sponsor 2021 Canadian National Poultry Show

In a March 29th press release Aviagen announced that it will the exclusive presenting sponsor for the 2021 National Poultry Show which will take place as virtual event on April 7th and 8th.


Dr. Kate Hayes will lead a breakout discussion on biosecurity at the pedigree level.  Dr. Bryan Fancher, Group Vice President, Global Technical Operations will discuss sustainability.


Frank Dougherty, Aviagen Vice-president of Sales and Technical Services for North America stated, “Our breeding efficiencies are complemented by a balanced approach that simultaneously promotes bird performance, health and welfare.”  He added, “Our biosecurity protocols are second to none, working to protect our birds and secure the supply of quality breeding stock to the world producers.”




The Canadian National Poultry Show is a partnership between the Western Fair District and the Poultry Industry Council.


Bilateral U.S. – U.K. Trade Agreement to be Influenced by Northern Ireland Issue


Following Brexit, the E.U. and the U.K. have yet to settle the issue of the border between Northern Ireland and the Republic of Ireland.  The latter is a member of the E.U. and the former is a territory within the United Kingdom.  In practice there should be a hard border between the two adjoining territories but in the interim, free movement continues.  Imposing a customs barrier could result in dissolution of the Good Friday agreement that resolved factional strife in Northern Ireland.  At this time the E.U. has complained that the U.K. has breached the withdrawal treaty since the minister responsible for Northern Ireland extended the grace period for controls. 


If Britain formally adopted the E.U. veterinary and food-safety standards that pertained prior to Brexit, virtually all the checks between Northern Ireland and the Republic of Ireland would be superfluous.  This however would create an immense barrier for bilateral trade agreements including the proposed pact between the U.K. and the U.S.


It is noted that Pilgrim’s Pride Corp. a subsidiary of JBS SA, owns Moy Park, a major broiler producer in the U.K. headquartered in Northern Ireland with facilities in England and the E.U.


Achieve harmony among regulations and negotiating trade deals with pressure from vested groups concerned over competition will require diplomatic ingenuity and goodwill.


KFC Donates to Meals on Wheels America


KFC franchisees across the U.S. will support senior citizens in local communities dedicating a case of chicken per restaurant.  The initiative is part of the Meals on Wheels "make-good-go further" program.  It is anticipated that KFC will provide one million pieces of chicken through their franchisees.


Staci Rawls, KFC Chief Communications Officer stated, "we want to do our part to help ensure the safety and well-being of older adults during this difficult time.  Meals on Wheels America has a support system in place to reach senior citizens in need."


FDA Recalling Pet Food Brands from Common Facility


A wide range of pet food brands have been recalled as a result of Salmonella contamination.  Products were manufactured by Mid-Western Pet Foods located in Monmouth, IL. and were marketed and distributed nationwide including through on-line retailers. Brands implicated include K9 X, Earthborn Holistic, Venture, Sport Mix, Holsens and Meridian among others.


The contamination was detected on routine sampling.


The presence of Salmonella in pet food represents a hazard to both animals and human contacts since cats and dogs that are infected become asymptomatic sporadic shedders of the pathogen potentially contaminating a household and representing a specific danger to children.


South Africa to Investigate Dumping from Brazil and the E.U.


According to USDA-FAS GAIN report SF2021-0020, released on March 24th an application by the South African Poultry Association has led to the South African International Trade Administration Commission initiating an antidumping investigation on bone-in chicken imports.  Products from Brazil, Poland, Ireland, Denmark and Spain will be subject to a review covering the period July 1st 2019 through June 30th 2020.


 Brazil currently exports bone-in chicken meat to South Africa as a most-favored-nation subject to a tariff of 62 percent.  The four EU nations export under a Southern African Development Community European Union Economic Partnership Agreement are subject to a safeguard duty of 15 percent.


During the period July 2019 through June 2020, South Africa imported 198,678 metric tons of bone-in chicken meat, down 24 percent from the corresponding period 2018/2019.  Brazil was the leading exporter with 40,141 metric tons down 54 percent, followed by Poland with 21,219 metric tons, down 31 percent and Ireland with 20,572 metric tons, up 22 percent.


Pilgrim's Pride Corporation to Offer Sustainability-Linked Bond


Pilgrim's Pride Corporation has announced a $1 billion offering covering a sustainability-linked bond to reduce greenhouse gas emission across global operations. The company announced a commitment to achieve net zero greenhouse gas emissions by 2040 conforming to the long-standing commitment to responsible environmental stewardship.  It is intended to reduce emissions 30 percent by 2030 using 2019 as a base.


Fabio Sandri, Global Chief Executive Officer noted, "the announcement firmly ties our financial strategy to our long-term commitment to address climate change, the defining issue of our time."  He added, "we are confident that our unique global production platform coupled with our diverse portfolio of sustainably-produced foods in our commitment to the fight against climate change will lead to increased shareholder value."


Anitox Appoints Dr. Enrique Montiel


Dr. Enrique Montiel has joined Anitox as Director of Nutrition and Live Production, effective March 1st.


Tom Glomski, Chief Revenue Officer for Anitox, stated “We are thrilled to welcome a leader in subject matter of Dr. Montiel’s caliber to our team, given his strong academic history he is perfectly positioned to provide support and direction to our technical team.” 


Dr. Montiel noted, “I am excited to join the Anitox team at such a critical time for our industry. I look forward to working with the team as we seek to build greater understanding of the advantages of technology like Termin-8™ and  Ifinio™.” 


Dr. Montiel has over 25 years experience in veterinary pharmaceuticals and biologics. After earning a veterinary degree, he was awarded masters and doctoral degrees in avian pathology and immunology from the University of Georgia.



COVID Altered Food Habits


According to surveys conducted on behalf of the Food Industry Association and the American Meat Institute, confirmed that in 2020 cooking and serving of meals at home were the most significant changes as a result of COVID.  The proportion of meals cooked at home rose to 89 percent in April 2020 but continued through December attaining 84 percent, consistent with the slow pace of reopening of the economy.  Members of the Food Marketing Institute benefitted from this trend by providing meal solutions with an emphasis on convenience. 


Online ordering was the second significant change in buying habits among consumers.  During COVID restrictions, meat and poultry were ordered through E-commerce with store pick-up the most popular delivery platform.  It was determined that 31 percent of consumers ordered meat products online, up 20 percent from 2019.  Overall, purchases of meat increased as a proportion of household expenditure in 2020. The surveys showed that 98 percent of U.S. households purchased meat and that demand reflected changes in consumption patterns The lunch-time meal demonstrated significant growth given school closings and work-from-home.




Ever Given Afloat After Blocking Suez Canal


The Ever Given was afloat as of 09H00 EDT on Monday 29th after blocking the Suez Canal for almost seven days. Dutch salvage experts led the operation that required removal of vast quantities of sand at the bow and stern to free the vessel. The stern was freed on Sunday afternoon local time and tugs were able to pull the imbedded bow from the West bank of the canal on the rising spring tide. (see article below in this edition)

Ever Given Northbound
in the Suez Canal


Ever Given Afloat After Blocking Suez Canal


The Ever Given was afloat as of 09H00 EDT on Monday 29th after blocking the Suez Canal for almost seven days. Dutch salvage experts led the operation that required removal of vast quantities of sand at the bow and stern to free the vessel. The stern was freed on Sunday afternoon local time and tugs were able to pull the imbedded bow from the West bank of the canal on the rising spring tide.


When she grounded at 07h40, Eastern European time on March 23rd the ship was en route from Tanjung Pelepas, Malaysia to Rotterdam.  The apparent cause was a loss of steering ability in high winds although a subsequent marine investigation will probably reveal a number of contributory factors including human error and inappropriate assessment of risk with an impending storm. Since the Ever Given was beached at both ends, it was necessary to exercise care in refloating to avoid damage to the structure due to unequal distribution of weight.  If the vessel were to have capsized or listed heavily, containers would have been dumped into the canal. In an extreme case, the canal might have been blocked for an extensive period. 

Ever Given Afloat in Suez Canal

For the record, the Ever Given has a 220,940 gross tonnage and is 1,312 feet in length with a beam of 192 feet and draws 47 foot of water.  The vessel is powered by an 11-cylinder two-stroke diesel engine rate at 79,500 horsepower driving a single fixed-pitch propeller.  For maneuvering Ever Given has two 3,400 horsepower bow thrusters. The Ever Given is one of thirteen container ships built to the Imabari 20,000-container design in Japan and commissioned in 2018. In February 2019, the vessel collided with a ferry near the harbor of Hamburg in heavy wind.


Failure to expeditiously refloat the Ever Given would have forced up to 300 waiting vessels to circumnavigate the Cape of Good Hope adding 14 days to a route from South East Asian ports to Europe.  This would have had repercussions on grain and oil prices.


Before the Ever Given grounding freight rates were rising. The Baltic Exchange Dry Index that determines shipping costs according to type and size of vessel increased from 1,390 on January 4th to 2178 on March 26th.  Although, for the week, the index fell four percent, it is expected that rates for vessels of a size that would transit the Suez Canal will continue to rise, as it will take at least 10 days to clear the backlog of waiting vessels.



FSIS Recalls 1,600 Pounds of Chinese Products Containing Beef Tallow


BC Food LA, LLC has recalled 1,600 pounds of Chinese-style Hot Pot based products containing beef tallow that is ineligible for import to the United States. 


This is the second documented instance of a recall of an illegally imported food product from China during the past month.  The risk of introduction of livestock disease, contaminated or an adulterated product is associated with illegal importation and represents a danger to the U.S. livestock industry in addition to consumers.



USAPEEC Releases Import Data for China


Based on data released by the General Administration of Customs for China (GACC), USAPEEC included comparisons between the U.S. and Brazil in the March 29th edition of MondayLine.  For the first two months of 2020, the U.S. exported 93,856 metric tons of chicken products to China valued at $160 million with an average unit price of $1,704 per metric ton.  Products exported included 41,000 tons of chicken paws and 47,500 tons of chicken legs.  The U.S. proportion of imports by China attained 40.6 percent over the first two months of 2021.


In comparison, Brazil exported 91,045 metric tons representing 39 percent of chicken imports into China.  Products supplied by Brazil included 29,700 tons of wings, 24,700 tons of feet and 28,800 tons of chicken legs.  Other suppliers to China included Russia (15,600 metric tons), Argentina (11,700 metric tons), Thailand (11,100 metric tons) with 7,400 metric tons from other nations.


The Figures from the GACC will be compared with USDA data for January and February 2021 when available in mid-April to ascertain correspondence.



AMS Purchases Bulk Chilled Chicken


The USDA Agriculture Marketing Service has purchased 612 tons of chilled whole chicken, bulked packed at an average price of 94 cents per pound with a total value of $1,152,597.  Delivery will be made during the first half of May with the purchase intended for child nutrition and domestic food assistance programs.






Shuttered Cellulosic Ethanol Plant Receives New Lease on Life--Sort of!


The joint venture cellulosic ethanol plant established by DuPont and Dow Chemicals, heavily funded by federal and state benefits operated only from 2016-2018. The Nevada, IA. facility consumed 700,000 bushels of corn cobs and stalks (stover) each year and was projected to produce 30 million gallons of ethanol annually.  The plant originally cost $400 million but was a complete technical and financial failure.


In 2018 the Nevada IA. plant was purchased by Verbio North American Corp. a subsidiary of a German parent company involved in sustainable energy. It was intended to erect an $80 million ethanol production line and hire 48 workers.  Initially the company intended to produce natural gas using stover but when the ethanol plant is completed, natural gas will be produced through a fermentation process.  The company was awarded $1.3 million in tax credits in 2018 when they acquired the DuPont-Dow plant but it has not achieved the predetermined volume of production or attained the promised payroll.

Nevada IA Plant

Concurrently the Poet DSM advanced biofuels joint venture has idled their cellulosic ethanol plant in Emmetsburg, IA. after receiving $17 million in tax incentives.  CHICK-NEWS has previously commented that cellulosic ethanol is a myth that has absorbed billions in federal R&D funding without achieving any meaningful production. This reality invalidates optimistic mid- 2000s predictions driving the renewable fuel standard.


U.K. Meat Exports to the EU Sharply Reduced by Brexit


The British Meat Processors Association (BMPA) has warned that Brexit will reduce exports from the U.K. to the E.U. over the long term. Additional inspections and documentation is required for British exports arising from the December 31st 2020 departure of the U.K. from the E.U. Single Market and Customs Union.  For the first six weeks of 2021, meat exports fell by 50 percent compared to the corresponding period in 2020.


The BMPA rejects the prevailing government sentiment that the drop in exports is due to short-term problems relating to new inspection and documentation procedures.


In accordance with the Brexit agreement, trade with the EU is tariff-free but the change in status of the UK has introduced delays and increased administrative costs, possibly amounting to $150 million for the meat industry in 2021 and continuing thereafter.


Lincoln Premium Poultry Donates to Fremont Area United Way


Employees at the Lincoln Premium Poultry complex have raised a total of $40,000 for the Fremont Area United Way together with a 60 percent match from Costco.  Jessica Kolterman, Director of Administration for Lincoln Premium Poultry, stated “Fremont Area United Way made the process fun and easy for our team, it was just a way to engage our employees while learning about the community and resources.”


Iowa OSHA Investigating February Explosion at Agri Star Meat and Poultry


An explosion on February 15, 2021 at the Agri Star meat and poultry plant in Postville, IA resulted in the injury of two workers.  The proximal cause of the event was a rupture of a gas line by a forklift resulting in ignition and explosion of a liquid propane tank.


The inspection of the Agri Star plant followed a Federal complaint filed by the American Civil Liberties Union and seven other groups in November 2020 regarding inaction over COVID-19.


The Iowa OSHA has come under criticism for lack of response to outbreaks of COVID-19 in meat packing plants in the state. 


Impact of Severe Winter Weather on Texas Agriculture


Agricultural economists are currently calculating losses sustained by farmers as a result of the mid-February freeze. Strawberry fields were damaged in Louisiana and Alabama. Crawfish production will be adversely affected in Louisiana.  Extensive losses in green produce were recorded along the Rio Grande Valley and the Winter Garden near Laredo damaging papayas, watermelons, citrus, avocados and bananas that are extremely susceptible to sub-freezing temperatures. Crop damage is estimated to excede $500 million.


It is estimated that 15 percent of newborn calves in Oklahoma were lost.  Accumulation of ice on rivers has impacted grain transport according to the Waterways Council, a river transportation association.


Losses in the broiler industry are detailed in a companion article in this edition.


South African Poultry Association Files Anti-Dumping Application


The South African Poultry Association (SAPA) continues in its attempt to restrict imports of broiler products to protect the local industry.  According to the USAPEEC MondayLine an anti-dumping application has been filed with the government of the Republic of South Africa (RSA) complaining of imports from Brazil, Denmark, Ireland, Poland and Spain.  SAPA has requested dumping duties ranging from 10 percent to 200 percent on bone-in products over the period July 2019 through June 2020. 


It is estimated that in 2019, 1.1 billion broilers were processed in the RSA with RTC production of 1.87 million tons and a per capita consumption of 85 pounds.  During 2019, imports attained 511,000 metric tons. Imports from all supplying nations represented 20 percent of availability in 2015 growing to 31 percent in 2019.  In 2019, bone-in imports comprised 44 percent of the total with 39 percent in the form of mechanically deboned meat.  In 2019, the U.S. represented 15 percent of imports, Brazil 51.4 percent and the EU 23.5 percent with the remainder supplied principally by Argentina, but with small shipments from Thailand and Canada. During 2020, the U.S. exported 79,000 metric tons of bone-in product to the RSA valued at $60 million.



Solicitation for Claims. Bottom-Feeders at Work


The advertisement speaks for itself.


Aviagen Appoints President for Asia Operations


In a March 24th press release, Aviagen Asia announced the appointment of Dr. Peter Fisher as president of the company effective April 1st. In his role he will provide strategic leadership for the Asia region and continue to enhance service to poultry producers. Dr. Fischer will report directly to Jan Henriksen, CEO of Aviagen.


Dr. Fisher joins Aviagen from a major multinational nutrition products company where he served as Vice-president of Global Technical Services, with responsibilities for Europe, Middle East, and Africa.  Dr. Fisher earned undergraduate and Master's degrees and a PhD in from the University of Stellenbosch in the Republic of South Africa.


In commenting on the appointment, Henriksen stated, "we welcome Peter to the Avian Asia Team, he was chosen to lead this important region due to his in-depth industry expertise and business experience."



China Reports Death from Avian Influenza H5N6


ProMed-mail reports the death of a 50-year-old man in Guangxi province due to strain H5N6 avian influenza.  It is unknown whether the decedent had direct contact with live poultry prior to admission to hospital with severe pneumonia in mid-February.  From 2014 to date, 30 cases of H5N6 avian influenza have been diagnosed in patients in China with seven fatalities.


Despite vaccination of chickens, H5N6 avian influenza is endemic in China and the infection represents a risk for workers in wet markets and their customers. The same can be said for the U.S. with the potential for emergence of avian influenza in the live bird trade.



COVID Continues in Canadian Plants


Health officials in Alberta announced that there are 38 active COVID cases among workers at the Sunrise Poultry Processor’s Plant in Lethbridge, Alberta.  There have been 75 cases since the beginning of February.  The Provincial Health Service ascribes the cases to community infection, but how this was determined was not stated.  According to the Lethbridge Herald, Provincial health officials declare an outbreak in a specific workplace when the number of cases exceeds ten individuals.


Health officials are working with Sunrise Poultry to conduct testing and quarantine of employees who test positive and holds daily virtual meetings with management for a status report.

Dr. Dina Hinshaw CMO Alberta

Precautions have included reducing processing rate, adding an additional shift on Saturdays to reduce the number of staff in the plant at any given time.  PPE is worn by staff and barriers have been installed where physical distancing is impossible.  Although the plant has intensified cleaning work surfaces, this has less of an effect on transmission compared to increasing the ventilation rate. Studies on transmission show that COVID is essentially a respiratory infection with the virus spread by inhalation of virus suspended in aerosols.


Pilgrim’s Pride Under Pressure from Shareholders’ Proposal


Yet again Mercy Investment Services, an arm of the Sisters of Mercy, has intervened in the company governance of a chicken company.  The Service has filed with the Securities and Exchange Commission to enjoin Pilgrim’s Pride Corp. to prepare and release a report on water use and disposal prior to the December 31st 2021.  Mercy Investment Services maintains that Pilgrim’s Pride does not conform to industry standards regarding water use, wastewater management and sustainability.  It is noted that major competitors have produced annual sustainability reports addressing power consumption, water utilization and disposal and resource management.


Apparently Pilgrim’s Pride is objecting to the proposal that has negligible chance of being approved at the April 28th Annual General Meeting since JBS SA exercises control over more than 75 percent of voting shares. 


Notwithstanding the reality that the proposal will be rejected, negative publicity will ultimately force the management of Pilgrim’s Pride to release a sustainability report.  The company has sustained reputational damage over the past few years from the activities of the Batista brothers, major shareholders in the holding company of JBS SA. The company was impacted by the recent admission to the Department of Justice of collusion on pricing and in addition has been critized for and alleged lack of response to COVID outbreaks in their red meat plants. Questions relating to sustainability and worker welfare were addressed by the Global CEO Gilberto Tomazoni in comments accompanying the March 25th release of the HBS S.A. 2020 Annual Financial Report


Sprouts Farmers Market Plans Twenty New Stores in 2021


To support the projected rate of establishing new stores, Sprouts Farmers Market has established their sixth distribution center in Aurora, CO. with a seventh planned for Florida mid-year.  The Colorado DC. will serve 45 stores in Colorado, five in Utah, and eight in New Mexico.


Chief Fresh Merchandising Officer, Scott Neal, stated “As we grow our footprint we will strategically place new stores and distribution centers closer together to maximize our own fresh product network.”  He added, “The location of our Aurora facility, combined with features such as ripening rooms for bananas and avocados, will immediately provide our stores with an expanded selection of affordable organics.” 


Joe Hurley, Senior Vice President of Supply Chain, stated “With a distribution center in Colorado, our truck routes are shorter and reduce crossings of state borders enabling us to partner with our local and regional farmers with more synergy.”


JBS S.A. Reports on Q4 and FY 2020


In a press release dated March 25th JBS S.A. (JBSAY) announced results for the 4th Quarter and FY 2020 ending December 31st 2020.


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 applying and exchange rate of R$5.4=US$1)

Gilberto Tomazoni

4th Quarter Ending December 31st



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




Market Capitalization





52-Week Range in Share Price:  $6.66  to  $10.55   50-day Moving average  $9.66

Market Close post-release March 25th $9.85 (up 0.9 percent)

Forward P/E 8.5                   Beta 0.3


Segment Results for the 4th quarter were:-

 Segment               Revenue ($ millions)   EBITDA ($ millions)

Seara                      $1,396                            $193

JBS Brazil             $2,481                             $127

JBS USA Beef       $5,609                            $0.52

JBS USA Pork       $1,725                            $157

Pilgrim’s Pride       $3,112                           $297                                  


For FY 2020 JBSAY earned $851.5 million on revenue of $50.03 billion with an EPS of $0.32. For FY 2019 JBSAY earned $1,124 million on revenue of $37.87 billion with an EPS of $0.42


In commenting on results Gilberto Tomazoni, Global CEO stated:- “As we present our results for 2020, it is fair to say that this year has probably been one of the most challenging of our lives. For us, closing our door or working from home was not an option. As a result, JBS set a priority to ensure the health and safety of our team members in order to fulfill our responsibility of providing food for the world. But we went much further by also supporting the communities where we are located.


Around the world, we invested R$ 2.8 billion during 2020, in preventive measures for our workforce and in social responsibility initiatives. Thanks to the Fazer o Bem faz Bem in Brazil, and the Hometown Strong programs in the USA and Canada, we made a positive impact on hundreds of local communities where we live and work”.


Tomazoni continued “the initiative reflects our long-standing commitment to sustainability. In Brazil, for example, for more than ten years, we have managed one of the world’s largest supplier monitoring systems. We are setting up a ground-breaking system that uses blockchain technology to reach other links in our supply chain”. He added “in 2020, we also launched the JBS Fund for the Amazon, part of which includes investments that will be directed to science and innovation projects. We want to be the driver of the bio-economy, demonstrating that protected forests produce even more wealth”.


Tomazoni concluded “we are investing in the circular economy by creating companies within JBS that will enable us to innovate and minimize environmental impact. We have transformed our waste management into a profitable business that generates jobs and income. The issue of governance continued to evolve in 2020. We undertook 190,000 training sessions for our team members around the world. Our global Code of Ethics has been revised to ensure it continues to evolve, and we have launched our Global Anticorruption Policy”.


OZO™ Burgers and Sausage Introduced in Kroger Stores


Planterra Foods has introduced OZO™ frozen smokehouse burgers and original breakfast sausage into Kroger nationwide.  During summer, the company will add plant-based meatballs, nuggets and patties.


Season Lawrence, Packaged Meat Category Manager for Kroger stated, "with more consumers looking for plant-based options to add to their everyday meals, this new line of soy-free products brings exciting new innovation to the frozen aisle and more delicious flavor to the full collection of OZO™ products."


Darcey Macken, CEO of Planterra Foods stated, "this year has changed the way so many of us are enjoying meals.  The OZO™ expansion into frozen plant-based proteins offers more opportunities for flexitarian consumption through high-quality foods with positive protein solutions".


Pace of COVID Vaccination Increasing Among Meat Plant Workers


Line workers in red meat plants were disproportionately impacted by COVID-19 during the first half of 2020.  Now that more vaccine is available, innunization campaigns are proceeding at a rapid rate as determined by state and county priorities.  In six states food processing workers are regarded in a priority category, but then only in specific counties.  Eligibility for vaccination is sanctioned in part in at least twenty-six states.


During the past week, workers at the JBS Worthington, MN. pork plant received vaccines with the company facilitating administration and offering a $100 incentive bonus.  It is evident that unions are important in motivating workers to receive vaccination.  United Food and Commercial Workers Local 663 actively campaigned for vaccination and signed up 1,500 of the 1,850 members.  Matt Utecht of the UFCW, quoted in The New York Times commented, "it's been a daily grind of educating, talking, and communicating". 


As additional vaccines including the two mRNA products from Pfizer and Moderna and the adenovirus-vectored J&J vaccine become available, more priority groups are becoming eligible for immunization.  The Centers for Disease Control and Prevention determined that 80 million people had received at least one dose of vaccine by March 21st with 43 million having been completely vaccinated.  The rate of administration has increased steadily and is now between 2.5 and 3.0 million doses per day.


Due to close proximity of workers in plants, it is justified to select vaccine for this priority population since immunization will contribute to lower rates of infection in communities where plants are located.  The quicker that large groups of workers can be vaccinated, the less likely is the possibility of emergence of variants which may be more infectious and pathogenic.


It is indeed regrettable that the U.S. is operating under a patchwork of priorities where even counties in the same state have different policies. It is commendable that owners of large packing and processing plants are organizing mass vaccination of their workers.


Rabobank Reviews Global Impact of ASF


In an update on African swine fever (ASF), Justin Sherrard, Protein Analyst with Rabobank examined the effect of the infection on pork markets. The major uncertainty is the extent to which China can control the infection.  Despite optimistic predictions from the Ministry of Agriculture, outbreaks continue.  In the absence of a widely deployed effective and safe vaccine, China will not be able to control the infection.  Notwithstanding the risks and consequences of ASF, the pork industry in China is undergoing a massive restructuring moving from small family-operated farms to investment in mega-units using multi-level breeding and growing facilities.


Sherrard questions whether Germany will be able to resume exporting pork to China following outbreaks of ASF in wild boars.  To date the infection has not been diagnosed in any commercial or even small-scale family unit.  China imposed a blanket embargo on the nation, contrary to the OIE principle of regionalization, disrupting the entire supply chain from production through processing.  ASF was the second impact on pork production in Germany in 2020 with COVID responsible for plant closings during the second quarter.


Rabobank also note the rise in feed prices in China and question whether this factor will influence production volume and prices.


As China manages to suppress ASF either through a combination of biosecurity and legal or possibly clandestine vaccination, imports will decline having an effect on production and prices in the U.S., Brazil, and the EU nations exporting pork.


Complaints Over USMCA Compliance by Mexico


Twenty-seven U.S. food and agricultural trade associations have addressed a letter to Katharine Tai, U.S. Trade Representative and to USDA Secretary Tom Vilsack noting recent action by Mexico considered contrary to the USMCA. 


According to the National Potato Council, Mexico has banned importation of U.S. fresh potatoes following representations by a domestic potato cartel. This has prevented the federal government of Mexico from implementing regulations allowing importation from the U.S.  


The second issue relates to genetically modified corn although the President of Mexico recently issued a clarification of his edict an edict stating that yellow  corn imported from the U.S. for animal feed would not be subject to restrictions at this time.  The President also has imposed a ban on the use of glyphosate.  The U.S. trade organizations also point to increased certification requirements for organic products, condemning corn sweeteners from the U.S., delays in approval of biotechnology approvals and onerous labeling regulations.


In their letter, the trade associations noted, "Mexico is one of America's most important food and agricultural trading partners.  NAFTA yielded strong benefits to both countries and the USMCA promises to build upon those gains".  The letter added “the food and agriculture trade relationship with Mexico has declined markedly and we respectfully urge your attention to this important but quickly deteriorating situation".


 By volume, Mexico is the largest importer of U.S. chicken, turkey, shell eggs and egg products valued at $1.008 billion in 2020. It is hoped that diplomacy will prevail and that export markets for poultry products will not be constrained by peripheral issues including the export of vegetable products to the U.S. and obstruction of trade in other agricultural commodities.


Giant Company to Open Urban Philadelphia Store


The Giant Company, a subsidiary of Ahold Delhaize USA, has announced a two-level store in the Logan Square neighborhood of Philadelphia.  The 65,000 square foot store will be located in a 25-foot residential tower in the Riverwalk mixed-used development incorporating the Giant Heirloom Market image.  The new store is regarded as a destination supermarket for relatively affluent and young urban dwellers.  Convenience considerations include a central location, underground parking with installations to recharge electric vehicles, designated pickup sites, mobile pay and 21 manned checkout counters.


The décor and layout include a food hall with a Mission Taqueria, a Saladworks station, Hissho Sushi, a beer garden, made-to-order sandwiches, pizzas and gelato. The Riverwalk store will feature local produce including Asher's Chocolates and Isgro Pastries and One Village Coffee.


Nicholas Bertram, President of the Giant Co stated, "expertly designed to meet the needs of urban dwellers our Riverwalk store is the perfect bend of modern sophistication and surprise and pays homage to the city's fantastic food scene".  He added, "our new brand platform entitled ‘For Today's Table’ is encouraging families to connect over a meal".

Bertram stressed that the Giant Co will continue to focus on omnichannel growth, innovation and feature families and community.


Vietnam to Phase Out Antibiotic Use


According to USDA FAS GAIN Report VM2021-0023 issued March 17th 2021, Vietnam will phase out the preventive use of antibiotics in livestock production.  Regulations are contained in Decree 13/2020 effective December 25th 2020.


The regulations prohibiting the use of specified antibiotics in feed were devised to prevent antimicrobial resistance and will follow the Food and Agriculture Organization and World Health Organization recommendations.  The antibiotic decree is framed in terms of the Animal Husbandry Law enacted in 2018.


The Government of Vietnam classified veterinary drugs with antibiotic activity into four categories based on their importance in human health.  The first category including fluoroquinolones, macrolides, penicillins and cephalosporins were only allowed to be used until the end of December 2020.  The second category to be phased out at the end of December 2021 includes lincosamides, tetracyclines and amphenicols.  The third category to phased out in December 2022 includes cyclic polypeptides of which bacitracin is the only drug within the group and spectinomycin.


As with U.S. legislation and E.U., requirements are specified for prescription of antibiotics for preventive purposes confined to domestic poultry under three weeks of age.


It is presumed that the regulations relating to antibiotic use will also apply to imported products.



Russia Proposes Tariff on Hatching Eggs


According to USDA-FAS GAIN report RS2021-0007 released March 17, the Ministry of Agriculture or Russia is proposing to increase the import tariff on chicken hatching eggs to five percent effective January 1st 2022 and then to increase the rate to 15 percent the following year.


The proposal is protectionist and is intended to encourage domestic production.  Although, the tariff was proposed previously, imposition was delayed as a result of shortages caused by highly pathogenic avian influenza.  In accordance with WTO commitments, the maximum rate for hatching eggs is 15 percent, although since 2006, there has been no import tariff. 


In 2020, Russia imported 208.6 million hatching eggs with the leading suppliers, Netherlands (64.9 million), Germany (26.7 million), Czech Republic (20.2 million) and France (18.3 million).  Fifteen other nations contributed exported hatching eggs to Russia ranging in volume from 120,000 to 14 million. 


Russia is dependent on imports for 20 percent of chicken hatching eggs and 90 percent for turkey eggs.  Exports of U.S. hatching eggs to Russia resumed in 2020 with 208.6 million chicken eggs out of a total of 258.4 million.  With respect to eggs other than chickens, the U.S. exported 4.4 million, presumably turkey eggs, to Russia out of a total of 49.9 million. 


New Packing Plant Proposed for Nebraska


Following concern over consolidation in meat packing, alternatives including cooperative and local plants are under consideration prompted in part by the disruptions that occurred during the first half of 2020 as a result of COVID and the 2019 fire in the Tyson Foods Holcomb KS. plant.    Sustainable Beef LLC is proposing to erect a 300,000 square foot processing plant in North Platte, NE to process up to 400,000 head of cattle annually.


According to the CEO of the company, David Briggs, suitably-zoned land has been identified and construction could commence during the fall of the current year to commence production during early 2023.


Proposed Plant site

David Briggs announces Plans for Sustainable Beef LLC Plant

Sustainable Beef LLC is a subsidiary of Westco, a cooperative located in Alliance, NE.  Promoters of the project include prominent cattle feeders in Bridgeport, Answorth and Hershey, NE. currently supplying existing plants Leadership of the project is vested in Better Beef LLC formed by previous Cargill executives with appropriate experience in processing, supply chain management and marketing.


Rancher Rusty Kemp, a promoter noted, "we are not looking to take on the big four packers, but there's a lot of room to operate between a 5,000 head a day plant and a local butcher".


The proposed site is located over a dry sewer lagoon south of the North Platte wastewater treatment plant.  Construction of the plant will require raising the level of the land by at least four foot contributing to the $300 million projected cost.


China to Evaluate Dietary Specifications to Lower Cost and Dependence on Imports


According to a Reuters release on March 18th the Ministry of Agriculture of China has issued a directive to provincial officials to encourage integrators and feed mills to reduce reliance on imported corn and soybeans.  The Ministry has suggested replacement with domestic grains and alternatives. 


Implicit in the recommendation is a reduction in nutrient specifications for both poultry and swine.  Although, economies can be effected, and saving in both corn and soybeans could result, absent preexisting over-specification, selection of inferior ingredients and lowering nutrient density will be reflected in less efficient feed conversion, product quantity and even quality.


Philippines Wants Access to U.S. Market for Pineapples. Exchange for Rescission of Pork Import Duty Appropriate?


The Philippines is the second largest producer of pineapples after Costa Rica.  Authorities in the Philippines have requested the USDA-APHIS to authorize importation of pineapples based on a pest risk assessment.


It would be appropriate to grant the request subject to scientific validity. Concurrently as a gesture, the Philippines should reduce the inappropriate 30 percent import duty on U.S. pork and also permit imports of chicken. Both protein products are needed by consumers as a result of shortages of pork caused by uncontrolled African swine fever.


JBS USA and Pilgrim's Pride Establish Better Futures Community College Program


JBS USA and Pilgrim's Pride have established a program allowing employees in good standing and their dependent children to attend a two-year community college free of charge. Both companies have established partnerships with a number of community colleges in areas where they operate in addition to an online education program.  Participating colleges include Riverside City in Riverside, CA., Aims Community College in Greeley, CO, Central Community College in Grand Island, NE, Bridgerland Technical College, Hyrum, UT and others to be announced. 


In commenting on the program, Fabio Sandri, CEO of Pilgrim's Pride stated, "Better Futures will open doors for our team members and their families to learn and grow as they work to achieve their dreams".  He added, "we believe in the power of education to improve lives in the Better Futures program is an extension of our promised offer opportunities to our team members".  Andre Nogueira, CEO of JBS USA stated. "our Better Futures program removes the biggest financial barrier associated with going to college and it gives our team members and their families the opportunity to reap the benefits an education can provide".


The JBS USA and Pilgrim's Pride initiative was praised by John Boehner, former Speaker of the U.S. House of Representatives and a former Chairman of the House Committee on Education and the Workforce who serves as a member of the JBS USA Advisory Board.  He opined "as a longtime advocate for ensuring access to quality education, I believe Better Futures is the type of corporate initiative that can transform lives, families and communities".


The Better Futures program follows introduction of the Hometown Strong initiative to assist communities where JBS USA and Pilgrim's Pride team members live and work.  The combined companies have invested over $50 million in Hometown Strong to improve the life of residents in communities where JBS USA and Pilgrim's Pride operate.


USDA-AMS Chicken Purchases


The USDA Agricultural Marketing Service has purchased 203 tons of shelf-stable chicken for school lunch programs and for food assistance to be delivered from May1st to June 30th.  Boned chicken, in cans was purchased at unit prices ranging for $1.51 to $1.65 per lb.



FDA Determines Consumers More Concerned Over Foodborne Infections in Meat and Poultry Compared to Vegetables


The Food Safety and Nutrition Survey conducted by The Food and Drug Administration, demonstrated continued concern over foodborne infection associated with raw chicken and beef compared to vegetables or fruit.  Chicken is regarded as being a higher source of infection (93 percent of respondents) compared to beef (66 percent).  In contrast, a lower proportion of those surveyed considered raw vegetables (9 percent) or fruit (6 percent) were either "likely or highly likely" to carry foodborne pathogens.  This misperception was evident despite the epidemiologic evidence that shows the growing importance of vegetables including leafy greens as the source of foodborne infections including E.coli, Salmonella and Listeria in the case of some fruit.


The survey disclosed that 29 percent of respondents considered restaurants as a more likely source of foodborne infection compared to home-cooked food at 15 percent.


The high proportion of respondents regarding chicken as a source of pathogens should attract the attention of the NCC that has posted informative articles on social media. The widely held perception that chicken is a source of foodborne infection may serve as a restraint to consumption.


Details of the survey can be accessed on the FDA website <www.fda.gov>.


BRF SA Authorized to Export Chicken Wings to Canada


BRF SA of Brazil announced that Canada has authorized imports of chicken wings from two plants located in Mato Grosso State.  With the most recent approval of the Nova Mutum and Lucas do Rio Verde plants, BRF now has authorization to ship chicken products from 15 facilities.

Brazil is extremely aggressive in export activities and their intent to ship chicken wings to our northern neighbor and member of the USMCA represents competition for both the U.S. and also the domestic Canadian industries.


Canada and the U.S. Develop Protocols in the Event of ASF in Feral Hogs



The U.S. Department of Agriculture, Animal and Plant Health Inspection Service (APHIS) and their counterpart, the Canadian Food Inspection Agency (CFIA) have developed a protocol to facilitate trade in the event of an outbreak of African swine fever (ASF) in feral hogs in either nation.


Dr. Burke Healey, Chief Veterinarian of the USDA, stated “continuing trade with Canada in the event of a feral ASF detection is important to our stakeholders and this trade protocol provides  necessary guidance to minimize the impact to the swine industry.”  He added, “This collaborative effort uses a science-based approach to ensure trade between both countries resumes as quickly as possible in the event of an outbreak.”  Contingency plans have been made to establish control areas, initiate surveillance and to removal of feral hogs together with surveillance of commercial herds.

It is noted that China imposed a blanket embargo on imports of pork from Germany as a result of cases of ASF in wild boars that had moved westward from Poland, notwithstanding the fact that no commercial herds were affected. The action by China is inconsistent with rules of the OIE since ASF is endemic in that nation.

CHICK-NEWS strongly supports calls for a concerted campaign to eradicate feral hogs from the U.S. using all available resources given their proven role as reservoirs and disseminators of ASF in Africa, Asia and Europe.


ASF Outbreaks Persist in China


Traditional Small-unit Production

Recent releases by the Department of Agriculture in China confirm outbreaks of African swine fever (ASF) in numerous provinces.  Rabobank recently estimated that the sow herd fell between three to five percent over the period December 2020 through February 2021.  In 2019, African swine fever reduced the hog herd by as much as 30 percent resulting in a sharp increase in imports of frozen and chilled pork, a drawdown of inventory and a significant expansion in broiler production.


Despite the risk of infection, large integrators have erected multilevel mega-farms that are considered less likely to be infected by ASF due to extreme levels of biosecurity in comparison to smaller family-operated units.

As yet there is no effective vaccine although it is understood that gene-deleted candidates are under evaluation.  There is confusion over whether a variant strain of ASF that is considerably less pathogenic than the virus that circulated from 2018 onwards has evolved by mutation or alternatively that the isolates may be a manifestation of an illegal gene-deleted vaccine or even a combination of these factors.


In any event the regular over-optimistic predictions by government officials that the ASF outbreak is controlled appear to fall under the Yogi Berra truism "it ain't over till it's over".

Hog Mega-Farm in China


Broiler Production in Mexico


According to the USDA-FAS GAIN report MX2021-0088 released on March 9th, production of broiler meat in Mexico will expand by 1.5 percent from 2020 to 3.780 million metric tons.  Domestic production will be supplemented by imports of 860,000 metric tons representing 18.5 percent of the projected total supply of 4.641 million metric tons.  In 2020, Mexico imported 842,000 metric tons of broiler meat.  USDA data documented exports to Mexico of 700,005 metric tons implying that 15.7 percent of imports into Mexico are derived from other than the U.S.  Imports by Mexico will increase by 2.1 percent from 2020 to 2021 while domestic production will by 1.5 percent higher.  Given a population of 130 million, per capita consumption of broiler meat in Mexico is 78.4 lbs.


Despite the fact that Mexico is the largest importer of U.S. broiler meat, the GAIN report is deficient in detail including costs of production, breeder and broiler parameters, domestic producers, channels of distribution and sources of imports.  The ten percent difference between total imports and those derived from the U.S. should have received some comment.  The report does not specify sources of data, whether from industry associations or government records and does not comment on whether there are discrepancies between sources of data. This GAIN Report was superficial and compared unfavorably with other GAIN reports from nations less important than Mexico.


Market Potential for Turkey Meat in Mexico


According to the USDA-GAIN report MX2021-008 released on March 9th, production of turkey meat in Mexico will increase fractionally from 2020 to 18,000 metric tons in 2021.  Imports in 2020 amounted to 151,000 metric tons.  This figure is questioned since USDA document exports of turkey meat to Mexico amounting to 166,700 metric tons.  The framers of the report should be aware of USDA export figures and should have either reconciled what must be accepted as valid data from USDA with whatever source was used to assemble the report.  Does Mexico re-export turkey meat to neighboring countries?  The report documents exports of 1,600 metric tons that is one tenth of the difference.


Assuming a population of 130 million, and a consumption of 181,000 metric tons of RTC turkey meat, per capita consumption is 1.4 kg (3.1 lbs).  This figure can be compared to broiler meat consumption of 78.4 lbs.  The hard-pressed U.S. turkey industry should investigate how various forms of low-value U.S. turkey can be promoted in Mexico to meaningfully raise the level of consumption and hence exports. The efforts of USAPEEC are commendable but a large potential apparently exists to export turkey products to our southern USMCA neighbor.


As with the Broiler section of the semi-annual GAIN Report that is discussed in this edition of CHICK-NEWS discrepancies are not addressed and the document is superficial, lacking in detail. We deserve better.


HatchTech to Establish New Corporate Headquarters


HatchTech has unveiled plans for a new corporate building to be located in their home city of Veenendaal.  Construction will commence mid-2020 with occupancy in the spring of 2022.


The project will bring together under one roof research and design, project engineering and marketing. Hatch-Tech management challenged the architect to design a building suitable to the mission of the Company and benefitting both customers and employees.  The structure will include a showroom and areas for training.  Employees provided input on their future home and the architect was cognizant of environmental harmony and sustainability in the selection of construction materials and installations.


CEO, Tjitze Meter stated, "as we lay the foundation of our new headquarters, we are also laying the foundation to build on further stable growth for our company and our agri-food industry".  Meter added, "the new building will offer the creative inspiring environment that is essential to facilitate innovation and progress.


Joost ter Heerdt, CCO stated, "an important part of the building is dedicated to research and product engineering, I like to think of it as a place where our developers and engineers feel the liberty and opportunity to develop, create and test innovations".


OSHA Implements National Emphasis Program on COVID


In a reversal of policy from the previous Administration, the Occupational Safety and Health Administration (OSHA) introduced the National Emphasis Program (NEP) effective March 12th. The purpose of the NEP is to ensure that “employees in high-hazard industries are protected from contracting SARS-CoV-2.  The NEP addresses complaints, referrals and incident reports in specific high-hazard industries, presumably including meat and poultry plants.  The NEP considers potential retaliation against workers complaining of unsafe work conditions and will refer allegations of retaliation to the Whistleblowers Protection Program.  The NEP is based on the Presidential Executive Order on Protecting Work Health and Safety issued January 21st 2021 and Section 5 (a)(1) of the Occupational Safety and Health Act 29 U.S.C. 654.


The NEP program will expire in twelve months but in the interim will offer on-site consultation to encourage companies to develop strategic approaches to minimize hazards. Proven modalities  are now standard in the meat and poultry industries.  The program includes how OSHA will select sites for evaluation, scheduling inspections and conducting non-programmed evaluation in the event of fatalities, complaints or referrals.  The NEP document also describes outreach to local and regional agencies including assistance with online resources.


It is evident that under the present Administration, OSHA will not adopt a “hands-off” approach to COVID or other workplace hazards. Evident lack of concern and abrogation of responsibility is evidenced by the paucity of both on-site and virtual inspections and reviews conducted in 2020.


The 19-page OSHA document can be accessed at www.osha.gov/site/default/files/enforcement/directives/dir_201-01_CPL-03


Smithfield Foods Agrees to Supplement Responsibility Bonus


Following the advent of COVID, in May 2020, Smithfield Foods provided workers in various plants with a responsibility bonus of $500 in addition to regular pay.  Workers subsequently sued the company claiming that the bonus paid should have been regarded as a wage supplement and therefore subject to overtime.  Smithfield Foods has now reached a preliminary settlement with the claimant class comprising more than 30,000 workers. The company will disburse $8 million representing approximately $38 per employee.


Vaxxinova® Announces Approval of Vaxxon® SRP® Pasteurella Vaccine


Dr. Jim Sandstrom

Vaxxinova® U.S., (formerly Epitopix) has announced USDA approval of Vaxxon® SRP® Pasteurella vaccine.  The product is an effective, innovative and safe vaccine against fowl cholera in chickens.  The product is especially usefully for long-term protection of broiler breeders.  In efficacy studies the vaccine was totally protective against mortality following challenge with USDA reference strain X-73.  No adverse reactions were observed in an extensive field study with broiler breeders.


According to Dr. Jim Sandstrom, Managing Director of Vaxxinova U.S., “Vaxxon SRP Pasteurella vaccine uses innovative SRP technology.  The lipopolysaccharides (LPS) that function as endotoxinsendotoxins are removed from the vaccine, and the key siderophore receptor proteins serve as immunogens, stimulating both cellular and humoral immune response.”  Sandstrom added, “In addition, the removal of the LPS reduces the risk for adverse effects commonly observed with whole-cell bacterins.”


For additional information on Vaxxon SRP® Pasteurella click on to company logo on the right side of the welcome page or access www.vaxxinova.us.com


Gaseous Ozone Effective Against Aerosol COVID Virus


A report by scientists at the School of Mechanical Engineering, Tel Aviv University confirms the benefits of gaseous ozone against SARS-COV-2 the virus responsible for COVID-19.  Dr. Ines Zucker  (image right) of the Porter School of the Environment and Earth Sciences at Tel Aviv University confirmed the effectiveness of gaseous ozone and the fact that it can be generated inexpensively.  Practical demonstrations confirmed over 90 percent inactivation of COVID within minutes as reported in the peer reviewed Journal of Environmental Chemistry Letters.


Dry-hydrogen peroxide generation is similar to the ozone technology is available commercially and in use in both egg packing and meat processing plants.  For information on availability, click on to the Synexis logo on the right side of the Welcome page.



Smithfield Foods Acquires Meat Processor in Eastern Europe


Smithfield Foods a subsidiary of the WH Group of China has announced the acquisition of Mecom Group that operates meat-processing plants in Hungary and Slovakia.  Luis Cerdan, Executive Vice-president, European Business for Smithfield Foods noted, “This transaction reinforces Smithfield’s commitment to both increasing our branded portfolio and continued investment in our European operations.”  He added, “The Mecom Group is a company with high-quality products and outstanding employees that will fit well into our European growth plan and complement our existing branded portfolio.”  The two plants in Slovakia have a combined processing capacity of 7,500 metric tons of salami, sausages, ham, smoked meats and bacon.


Janie Hipp Nominated as USDA General Counsel


At the request of Secretary Tom Vilsack, President Biden has nominated Janie Simms Hipp to serve as General Counsel for the USDA.  As a member of the Chickasaw Nation, she has spent over thirty-five years in federal service as an agriculture and food legal and policy expert.  She served as a Senior Advisor for Tribal Affairs and Director of the Office of Tribal Relations in the Obama administration and will come to the USDA from her current position as CEO of the Native American Agriculture Fund. 


In commenting on the nomination, Secretary Vilsack stated, "I know that Ms. Simms Hipp will faithfully carry out her duties to enforce the laws and regulations of the USDA, safeguard producers, protect socially disadvantaged communities and make good on USDA responsibility to provide nutrition assistance to children and families".


USDA Purchases Shelf-Stable Chicken


The Agricultural Marketing Service of the USDA has purchased 270 tons of shelf-stable canned chicken at a unit price ranging from  $1.53 to $1.71 per lb.  Deliveries of product intended for domestic food assistance programs and child nutrition are scheduled between May 1st and July 31st 2021.


Opponents of Intensive Broiler Production on the Eastern Shore Motivate Adverse Legal Ruling


Montgomery County, MD. Circuit Court Judge Sharon Burrell ruled that the Maryland Department of Environment (MDE) must regulate nitrogen released from broiler growing houses on the Eastern Shore of his State. The case followed a filing by the Assateague Coastal Trust, an environmental activist group,  Previously the MDE contended that air emissions should not be regulated under regulations relating to water quality as this would be “onerous for the state as well as for farm operations.”  Introducing nitrogen release as a requirement for permitting houses would require extensive recertification.


The issue arose previously in North Carolina in relation to a two-million bird complex located in Hyde County.  At the time, the state Department of Environmental Quality ruled that ammonia and dust release from exhaust air from houses had no bearing on water quality.


The ruling by Judge Burrell classified ammonia emitted from broiler houses as a “specific calculable event that the Department is obligated to regulate under the Clean Water Act as delegated to the state.”


Jay Apperson, with the Maryland Department of Environment, noted that State oversight of farms is the most stringent in the country.  He stated, “The effectiveness of the Maryland program has been commended by the U.S. Environmental Protection Agency in its reviews.”  He added, “Maryland is also committed to protecting and improving local water quality and restoring the Chesapeake Bay.”


The Delmarva Chicken Association expects the verdict in the Montgomery County Circuit Court to be appealed since it has profound implications for broiler growers operating more than 2,000 houses on the Eastern Shore. 



Educational Programs to be Presented at the 2021 MPF Virtual Convention


The Midwest Poultry Federation has listed concurrent educational programs to be presented during the May 18th – 21st event:-


  • The Multi-State Poultry Feeding and Nutrition Conference will take place on May 19th as a cooperative effort between state poultry industries and Michigan State University, the Ohio State University, Purdue University, the University of Illinois and the University of Kentucky.
  • The Purina Animal Nutrition Symposium will be scheduled for the May 18th-21st show dates to be announced.  This regular program reviews nutritional topics of current interest.

  • The 77th Annual North Central Avian Disease Conference (NCADC) will take place May 18th and 19th and will cover emerging issues in virology and bacteriology in addition to biosecurity and molecular biology with a concentration on turkey and egg production flocks.
  • MPF Education Tracks – The program has been redesigned for convenience.  The broiler track will take place on May 18th, poultry processing on May 19th, pullet and egg layer topics on May 20th and turkeys on May 21st.  The content of the programs will be announced towards the end of March.



Rabobank Posts FY 2020 Results


Rabobank is an international financial service provider structured as a co-operative.  The bank provides financial services to the food and agribusiness segment of the economy in the Netherlands and serves agricultural customers internationally.  Rabobank provides retail, wholesale, rural and private banking, leasing and real estate services to 10 million clients worldwide. 


For fiscal 2020, Rabobank posted a net profit of $1.35 billion on income of $12.94 billion.  Comparative figures for FY 2019 were, profit of $2.68 billion on income of $14.11 billion.  On December 31st 2020, Rabobank assets amounted to $758.71 billion including loans of $523.42 billion, offset by liabilities of $709.95 billion.


 In commenting on fiscal 2020, Chairman of the Managing Board, Wiebe Draijer stated, “The severe COVID-19 crisis demanded the very essence of what a cooperative bank with a mission stands for: to contribute substantively to the significant transitions that are shaping the world we live in.”  He added, “As a meaningful Co-operative our contribution to society last year was first and foremost focused on the immediate needs of our clients.  We were also able to accelerate the delivery of our strategy during the pandemic, improving digital service to our clients and members.  We were committed to making global food supply chains more sustainable and played an important role in the green financing of our global clients and supported farmers around the world in their shift to more sustainable food production.”


The detailed annual report including section on ESG can be downloaded from www.rabobank.com


Safe Line Speed Act Introduced into Congress


Senator Cory Booker (D-NJ.) and Rep. Rosa DeLauro (D-CT.) reintroduced bills into the Senate and House respectively to prevent USDA issuing waivers to increase broiler and hog processing line speeds.


The intent of the Safe Line Speeds in COVID-19 Act would include the following provisions:

  • Directing the Secretary of Agriculture to suspend existing waivers relating to line speed during the pandemic
  • Suspend the implementation of and conversion to the New Swine Slaughter Inspection System

Senator Cory Booker
  • Prevent any federal agency from implementing any policy or regulation that would allow increased line speeds during the COVID-19 period
  • Require the Government Accountability Office to issue a report after the end of the COVID-19 pandemic to review actions taken by the Department of Labor/OSHA, Department of Health and Human Services and the USDA with regard to the protection of worker safety


The bill introduced by Sen. Booker and Rep. DeLauro has met with support from welfare agencies that have cynically introduced COVID as a justification to pressure USDA-APHIS to deny more efficient use of facilities.  The increase in line speed from 140 to 175 birds per minute will be accomplished more by mechanization than manual labor.


China Restoring Domestic Pork Production


According to the USDA-FAS Gain Report, Ch-2021-0027 released on March 3rd, China will produce 650 million hogs in 2021 up from 440 million in 2019.  In 2021, China will slaughter 598 million hogs and will maintain a sow herd of 42 million.  Despite progress in the suppression of African swine fever, production in 2021 will be lower than in 2017, before the advent of the infection.

For calendar 2021, China will produce 47 million metric tons of pork, approximately 23 percent more than in 2020.  Imports of chilled and frozen pork will attain 4.5 million metric tons, representing 8.8 percent of total domestic consumption of 51.4 million tons.  Given a population of 1.4 billion, per capita consumption corresponds to 81 pounds.  The increase in production over the past two years, despite endemic African swine fever has been achieved through a sharp transition from small family units to large integrated facilities capable of implementing effective biosecurity. (see image, bottom right). Large producers received loans from local and municipal governments to expand production.  Further growth in production will be limited by ongoing African swine fever and the relatively low productivity of sows due to alterations made in selection and breeding programs to maximize piglet production. 


The increased supply of pork has reduced retail prices that remain high relative to the pre-ASF year of 2017.  The U.S. exported 696,000 metric tons of frozen pork to China in 2020 up from 245,000 metric tons in 2019.  In 2020, the U.S. represented 16 percent of the total of imports of 4.3 million metric tons from all supplying nations.  Collectively the E.U. supplied 47 percent of import volume with Brazil shipping 11.2 percent of the imported volume.


Recovery of domestic pork production in China will have repurcussions in the U.S. More hogs processed in China will increase demand for corn and soybeans raising U.S domestic broiler and egg costs. Greater availability of pork at lower prices in China will reduce demand for broiler meat depressing the need for bone-in broiler exports from Brazil and the U.S.



Simmons Foods Offering COVID Vaccines to Workers


Simmons Foods will offer COVID-19 vaccination to all employees using drive-through clinics manned by healthcare workers. This move follows the vaccination programs initiated by Tyson Foods and other producers in accordance with the State of Arkansas policy on prioritizing processing plant workers for COVID vaccination.


Russell Tooley, CAO for Simmons Foods, stated “We applaud Governor Hutchinson’s efforts to protect all Arkansans through an organized vaccine distribution program.  We are grateful he has placed the priority on the people in food production who have worked throughout the pandemic to keep food on the table.”


Simmons regards vaccination as an additional step in protecting workers, complementing their ongoing program of supplying masks, enforcing social distancing on lines, enhanced cleaning, physical barriers, and health screening.


Reduction of Salmonella Heidelberg by Early Acidification of Water


A recent lay publication demonstrated an apparent transitory beneficial effect of acidifying drinking water over the first 14-days post hatch to suppress Salmonella Heidelberg infection.  The trial involved 200 broilers receiving Salmonella Heidelberg at day-one, compared to a control group receiving water with a neutral pH.


At 14 days of age, recovery of Salmonella, presumably from feces, was significantly lower in the group receiving acidified water with a pH of 4.2 compared to untreated controls.  The effect of water treatment on recovery of Salmonella was not significantly different at 28-days of age.


This experiment as reported has little or no relevance to suppressing Salmonella colonization of the intestine for practical production.  If the authors were able to demonstrate a difference in intestinal colonization rate with Salmonella Heidelberg at the time of harvest or if treatments were responsible for lower recovery on carcass washes, the claims would have some relevance. 


The issue of deterioration of drinking systems as a result of supplying water with a low pH is a practical consideration.  Corrosion of balls within drinkers if it occurs will lead to leakage that in itself would potentially represent problems of coccidiosis and enteritis.


Based on established knowledge concerning the development of the intestinal biome of broiler chicks and the data presented, providing water with a low pH will have no material effect on suppression of Salmonella Heidelberg at harvest. Trials involving acidification of drinking water for variable periods up to 72 hours prior to slaughter have not shown any consistent effect on in-plant carcass contamination. There is a marked lack of correlation between recovery rates from either live birds or Salmonella counts and actual carcass wash data under practical plant operation.


Federal District Judge Rules on Wage Collusion Suit


U.S. District Judge Stephanie A. Gallagher of the United States District Court of Maryland dismissed challenges to a 2019 lawsuit alleging collusion to fix and depress wages paid to processing plant workers.  The lawsuit was filed in August 2019 with all major broiler integrators named as co-defendants along with AgriStats Inc. and Webber, Meng, Sahl & Company.


The suit alleged that the defendants obtained wage data through their participation in the Agri Stats Inc. industry benchmark service.  In addition, it is alleged that in-person meetings took place concurrently with regional and national meetings during which wage rates were discussed with the intent to establish and or depress remuneration.


The defendants claimed that the plaintiffs lacked standing, a contention rejected by Judge Gallagher who ruled that hourly chicken employees' interests were not significantly different from salaried broiler and turkey workers.  The assertion advanced by specific turkey and broiler integrators that the plaintiffs did not provide details on how integrators were involved in alleged collusion was rejected by the Court.  In her ruling, Judge Gallagher noted, "while plaintiffs may not baselessly speculate there is no indication that the allegation in question is speculative particularly given the inclusion of a source for the information”.


The wage lawsuit is yet another strike against AgriStats Inc. following on the larger case involving allegations of collusion to manipulate production volume and hence price.


Cherokee Nation Planning Meat Plant in Oklahoma


Following the trend towards establishing small meat packing plants to serve local ranchers, the Cherokee Nation will expand an existing plant in Tahlequah, OK to 15,000 square feet.  The plant will be capable of processing cattle, pigs and deer in addition to bison from the Tribal herd.  Initially the plant will operate as a custom processor but later will conform to the requirements for state inspection.


Similar projects can be anticipated by tribal authorities and cooperatives based on concern over reliance on progressively fewer and larger mega-packing facilities.


Michael Regan Confirmed as EPA Director


Michael Regan was confirmed as director of the EPA by a senate vote of 66 to 34.  He is currently the Secretary of the North Carolina Department of Environmental Quality and has extensive experience in responding to air pollution and climate change. He previously worked at the EPA during both Clinton and Bush Administrations.


In comments made during his nomination hearing Regan noted, “Our priorities for the environment are clear. We will restore the role of science and transparency at EPA.  We will support the dedicated and talented career officials. We will move with a sense of urgency on climate change and we will stand up for environmental justice and equity.”


To date 16 cabinet-level officials have been confirmed including the most recent, Rep. Marcia Fudge (D-OH) who will serve as Secretary of the Department of Housing and Urban Development and Judge Merrick Garland for Attorney General.


Concern over COVID in Farmer John Plant


According to a report prepared by the Food and Environmental Reporting Network (FERN) by June 6th 2020, 43 percent of the workforce at the Farmer John Plant owned by Smithfield Foods in Vernon, CA had contracted COVID-19.


On December 10th California-OSHA initiated an investigation of the Farmer John Plant to determine compliance with the November Emergency Temporary Standards relating to workplace safety and protection of workers from COVID-19.  Following the April 28th Presidential Executive Order in terms of the Defense Procurement Act to maintain operation at meat packing plants, the management of Farmer John ceased to report cases but apparently resumed on May 19th.  Los Angeles County health officials maintained that the company failed to report 303 COVID-19 illnesses regarded as work-related.  Smithfield maintains that all applicable COVID-19 requirements including reporting were followed. 


In November the California Division of Occupational Safety and Health fined Smithfield and its staffing agent $105,000 for violations including allowing asymptomatic employees to work despite exposure to COVID-19.  The California Agency determined that masking was not mandated, workers were not trained on the risks of COVID-19 and were not effectively distanced.  The Agency concluded that reporting data on the spread of the virus among workers was improper and inadequate. 


Cal/OSHA will have a difficult task in proving that each case reported from the plant was in fact acquired in the workplace, given the high prevalence in communities including three counties in which Farmer John workers resided.



Tyson Ventures Invest in Iterate Labs


According to the Iterate Labs website, Tyson Ventures has invested in the company to further the development of the BioMotion analytics platform to optimize worker productivity.  The company produces a wearable electronic monitor linked to computer vision to digitize hand motions. Data can be used to analyze productivity and to enhance training and safety.  Iterate Labs has provided technology to Tyson Foods, JBS among other companies.  Iterate Labs equipment can be applied to establish standards for specific operations to increase operational efficiency.  Knowledge obtained from analyses can be used to improve training programs, to reduce workforce turnover and to enhance safety by eliminating ergonomic stress.


Other investors in Iterate Labs include Monozukuri Ventures and MD Partners.  In commenting on the investment, Rahul Ray of Tyson Ventures stated, "we believe Iterate Labs' Industrial IoT platform could be a game-changer driving real-time visibility, safety and productivity for the North American manufacturing workforce".  Collectively the major investors have contributed $1 million to Iterate Labs to support scaling of current applications, marketing, and engineering development.  Nobuhiro Seki, Managing Director of Monozukuri Ventures stated, "we invested in Iterate Labs because their technology maximizes workforce efforts, and their data solves the key issues facing manufacturing companies". 


Apoorva Kiran, CTO and co-Founder of Iterate Labs stated, "our mission is to harmonize the interaction between the worker and their environment making the worker more effective, safer and happier along the way".  He added, "over the past several years, our platforms have enabled safety, operations, HR, training and automation teams to work together to optimize the sustainability of their workforces".


North Carolina State Appoints Poultry Extension Specialist


Dr. Lin Walker has joined the faculty of the Prestage Department of Poultry Science as an Assistant Professor and Extension Specialist.  Dr. Walker is a microbiologist and will work with processors and producers to improve pre-harvest and post-harvest suppression of food-borne pathogens.


Dr. Lin, a native of China commented on her appointment "I feel extremely fortunate to be here and to team with our experienced faculty”.


Philippine Government Mishandling ASF Outbreak


African swine fever has resulted in extensive mortality, especially among hogs raised by small-scale producers in areas surrounding major urban centers including Manilla.  The Government has launched the Integrated National Swine Production Initiative for Recovery and Expansion to compensate for hogs succumbing to the infection.  Since the laws of supply and demand still pertain in the Philippines, prices have risen sharply attaining $3.75 per pound for pork belly, approximately twice the normal rate.  Inflation in food costs are evident, resulting in criticism of the Government. 


As an inappropriate response, the government imposed a $2.80 per pound price cap on pork for a 60-day period.  Predictably pork disappeared from stores and was diverted into a thriving black market. Generally a “cheap food” policy mandated by any government rapidly morphs into a “no food” situation. The Government could alleviate the problem by reducing the 30 percent import duty on pork, making the product available to satisfy demand.


The Economist March 6th.Edition referred to the Government response as a “pig mistake” and characterized the action as “ham-fisted”. Trite and stylistic but makes light of hunger and malnutrition.


Ruth’s Hospitality Group Reports on 4th Quarter and FY2020


On March 5th Ruth’s Hospitality Group (RUTH) posted results for Q4 and FY2020 ending December 27th. This company can be regarded as a bellwether for fine dining, indicating the extent of recovery of the high end of the restaurant sector.


For the quarter, the company posted net earnings of $1.4 million on sales of $77.37 million with an EPS of $0.04.  This compares with Q4 of 2019, pre-COVID, with earnings of $14.46 million on revenue of $135.03 million with an EPS of $0.50.  For the year, RUTH posted a loss of $25.3 million on revenue of $277.8 million with a negative EPS of $0.80.  In FY2019, RUTH earned $42.2 million on revenue of $468.0 million with an EPS of $1.46.  Comparative restaurant sales for FY2020 were 40.2 percent lower than in FY2019.

Cheryl Henry, President and CEO of Ruth’s Hospitality Group, commented, “2020 was truly a challenging year for our Ruth’s Chris team and our franchises.  We managed through two significant shutdowns during the year, the first in late March and the other most recently during our 4th Quarter.  Despite these challenges I am pleased that our amazing team and franchise partners displayed resilience and agility in the face of uncertainty resulting in strong 4th Quarter results.”  Henry added, “COVID has taught us flexibility and innovation which includes new operating procedures at the restaurant level as well as a more flexible labor model, better capacity utilization, and the adoption of technology.”


RUTH has a market capitalization of $859.4 million and has traded over the past 52 weeks in a range of $2.32 to $25.82 with a 50-day moving average of $20.55. Twelve-month trailing operating margin was -4.4 percent and profit margin -9.1 percent.  The company achieved a return on assets of -1.5 percent and on equity -25.1 percent.  Following release of Q4 results, RUTH rose 6.1 percent as earnings topped a more conserative consensus estimate.


Washington State Introduces Meat and Poultry Inspection System


Following unanimous passage in the Washington State Senate, a Bill introduced by Senator Judy Warnick will move to the House where passage is expected.  The legislation would allow small and mid-sized processing operations to be eligible for support from the state Processing and Marketing Assistance Program and would also allow cooperation between the state Department of Agriculture and the USDA Food Safety and Inspection Service. The legislation would establish a grant program to provide funding for processing and inspection activities with Washington State University developing technical support programs for training.

Washington State Capitol

The legislation soon to be adopted in Washington State will be paralleled by other states. Establishing state inspection programs is a direct result of interruption of operation of large plants due to COVID-19, especially from March through May 2020.  Senator Warnick stated, “delays in processing are bad for consumers and our ranchers.  If we can take some of the pressure off the current system by encouraging state inspections and local support of smaller processors of meat and poultry we are going to drastically improve the industry.”


It is evident that the detrimental aspects of concentration among a limited number of companies operating large plants became evident during the COVID crisis. State legislators and farming organizations are pressing for alternatives to the “Big Five” to avert a recurrence and to introduce more competition to benefit ranchers. It is clear that Secretary of Agriculture Tom Vilsack supports this trend.


Hormel Foods Corp. to Purchase Power from Wind Farm


Allete Clean Energy is establishing a large wind farm in Oklahoma.  Hormel Foods has agreed to purchase power from this renewable source.  Hormel in partnership with PCI Solar draws power for a California operation from a joint-venture solar array and will also source wind-derived energy from the Orsted Haystack Wind Project to be erected by Kinect Energy Group in Milligan, NE.


Tom Raymond, Director of Environmental Sustainability for Hormel stated, “As one of the leading global branded food companies, Hormel Foods is committed to derive all of its domestic energy from renewables by 2030.”


Concern over Illegal ASF Vaccines in China


Previously media reports have suggested that illegally manufactured gene-deleted African swine fever (ASF) vaccines have been administered to hog herds in China.  A scientific report has characterized variant strains of ASF that have apparently emerged over the past few months.  Whether these mutations have arisen spontaneously or are the result of deploying illegal vaccines has yet to be determined


The Ministry of Agriculture and Rural Affairs stated that it “will crack down further on illegal production and sales of African swine fever vaccines.”  If this statement is a true translation from mandarin it presumes that the Ministry is in fact aware of the use of illegal vaccines.

Structured trials of ASF vaccines by reputable institutions in progress in China

The ministry is requiring laboratories to report strains with artificial gene deletions to provincial veterinary authorities. The Ministry is offering financial rewards for information in the face of a recent resurgence in ASF in the provinces of Sichuan, Hubei and Yunnan.


At the present time, there is no approved vaccine against ASF although it is understood that several candidates produced by reputable institutions including Harbin are under evaluation.


Regulations forbid assigning hogs with ASF to packing plant although this regulation is observed more in the breach than in conformity.


Alaska Enters Broiler Collusion Lawsuit


The Alaska Department of Law will demand $50 million from each of 21 defendants alleged to have conspired to manipulate broiler chicken prices.  According to a report from Bloomberg, Alaska will claim restitution, fees and legal costs.


The complaint filed by the state of Alaska alleges that “a cartel of corporations engaged in an illegal conspiracy to restrain production and manipulate pricing to artificially inflate the price of broiler chicken throughout the United States including Alaska.


The case entitled “Broiler Chicken Antitrust Litigation” has elicited settlements from Tyson Foods of $221 million, an undisclosed figure from Pilgrim’s Pride and at an early stage in litigation, from Fieldale Farms.  Pilgrim’s Pride paid a criminal fine of $108 million and settled charges with the Department of Justice but the magnitude of the civil settlement has yet to be released.


US Energy and Information Agency Release March Outlook


On March 9th, the U.S. Information Agency (EIA) released the March outlook indicating future prices for fuels.


The EIA expects March and April, Brent crude oil prices to average $67 per barrel.  The high price is attributed to limitations placed by OPEC members on production.  In February, OPEC output averaged 24.9 barrels per day, but will increase to 27.9 barrels per day for the second half of 2021.  U.S. production of liquid fuels will reach 12.0 million barrels per day in 2022.


Natural gas spot prices increased to $5.35 per million British thermal units in February.  Due to extremely cold weather during the month, a record withdrawal of 150 billion cubic feet was recorded from the Texas South Central region.  March inventories will be 13 percent less than the five-year average suggesting prolonged high prices.


With increased demand for power and an increase in natural gas price, coal used in the U.S. for power generation will rise to 505 million short tons in 2021.  Prevailing low temperature during the first quarter of 2021 has contributed to a 2.7 percent increase in U.S. residential consumption of electricity. Power consumption was 10 percent higher in February 2021 compared to the corresponding month in 2020.


Energy-related carbon dioxide emissions will rise six percent in 2021 over 2020 attributed to increased economic activity corresponding to the restoration of normal activities following COVID restrictions.


Based on the EIA projections, forecast for fuel and power across the entire egg industry will increase from brooding chicks through ventilating pullet and layer houses, operating packing plants and delivery of eggs.


Role of OSHA in Preventing COVID Criticized


An article by Eli Rosenberg in the Washington Post on March 2nd takes to task the Occupational Safety and Health Administration (OSHA) under the previous Administration with regard to protection of the health of workers in processing plants exposed to COVID.  It is understood that the agency received 15 percent more safety complaints between February 1st and October 26th compared to the corresponding period in 2019, yet the Agency performed approximately half of the inspections compared to the previous year.  The Inspector General of the Department of Labor noted, “We are concerned that since most OSHA inspections were done remotely during the pandemic, hazards may have gone unidentified and unabated with employees being more vulnerable to hazardous risk exposure while working.”


David Michaels, a previous Administrator of OSHA during the Administration of President Obama, noted “The Inspector General documented OSHA’s failure under President Trump to mount a strong effort to protect millions of frontline workers doing essential work.”  He added, “Thousands of virus-exposed workers complained to OSHA but the Agency did little to help them.”  Regional OSHA officials were hampered by the absence of clear  standards and in some cases were forced to rely on the General Duty Clause to achieve compliance although this is difficult to enforce.  The difference between the number of citations and fines issued by the Federal OSHA and the California OSHA denote the more aggressive approach taken by California state officials with respect to apparent negligence on the part of operators of red meat plants.


During the severe phase of the pandemic, OSHA issued three General Duty Clause violations and a total of 290 violations arising from 176 inspections relating to COVID-19 in response to 11,000 complaints.  Oregon, Michigan, and Virginia eventually established their own workplace standards given the absence of OSHA leadership.


Rep. Robert C. Scott (D-VA), Chairman of the House Committee on Education and Labor, pressed for emergency standards early in the course of the pandemic.  He stated, “Despite overwhelming pressure from Congress, workers, and public health experts, the previous Administration refused to take any meaningful action to protect workers.”  He added, “Now the Inspector General’s report reveals the consequences of the Trump Administration’s inaction.”


Role of USDA in Dissemination of COVID Within Meat Plants to be Probed


The Office of the Inspector General of the USDA will initiate an audit of actions and policies of the Department with respect to spread of COVID-19 in meat processing facilities. The action was initiated by Senator Michael Bennett (D-CO), a member of the Senate Committee on Agriculture, Nutrition, and Forestry.  In commenting on the proposed investigation by the USDA, Senator Bennett stated, “Earlier in the pandemic, meat processing plants saw some of the highest rates of COVID-19 infections, harming a workforce predominately comprised of immigrants, refugees, and people of color and raising serious questions about any Federal actions that may have contributed to the spread of the virus in these facilities.”


Terms of reference for the USDA OIG investigation will include:

Sen. Michael Bennett
  • Response to the April 28th, 2020 Presidential Executive Order mandating that food plants remain functional in terms of the Defense Production Act
  • Action taken by the USDA to protect the health of inspectors
  • USDA role in communicating standards and procedures as developed by CDC and cooperation with state departments of health


Senator Bennett has been outspoken in demanding that the previous Administration protect essential workers, implementing testing and quarantine and providing effective PPE.


It is a contention of Senator Bennett that the Executive Order obligated owners to operate their plants, but that the USDA was negligent in not ensuring that protective measures were enforced.


California Proposition #12 Will Disrupt U.S. Pork Supply Chain


According to Christine McCracken, Senior Analyst for Animal Protein at Rabobank, California Proposition #12 has the potential to disrupt the pork supply chain.  It is estimated that less than five percent of U.S. housing conforms to the standard established under Proposition #12.  This will inevitably result in a shortage of pork for California, obviously benefiting the broiler industry.

Banned Gestation stalls

Group housed sows

Following the passage of Proposition #2 in 2008, followed by extensive adverse publicity of gestation crates for sows, much of the industry transitioned to group-housing of pregnant sows, eventually overcoming technical and management problems.


The Rabobank report encourages producers to proactively cooperate with packer-processors and customers to establish animal welfare and sustainability standards that are economically viable and practical to implement.


2019 and Projected 2020 Feed Requirement


The Institute for Feed Education and Research (IFEEDER) recently released a report prepared by Decision Innovations Solutions on actual 2019 feed production and a projection for 2020. The report is based on surveys of the feed industry comprising 5,836 manufacturing facilities that produced 283.8 million tons of animal feed in 2019.  The major consuming species and the quantities manufactured were:


  • Beef cattle – 64.5 million tons


  • Hogs – 61.8 million tons


  • Broilers – 60.8 million tons


  • Dairy cattle – 49.8 million tons


  • Egg production – 19.2 million tons


  • Turkeys – 10.6 million tons


  • Companion animals – 8.6 million tons


  • Equine – 7.7 million tons


The major consuming states included:


  • Iowa – 28.8 million tons


  • Texas – 21.1 million tons


  • California – 17.5 million tons


  • North Carolina – 16.3 million tons


  • Minnesota – 14.6 million tons


Of ingredients used in feeds, 52 percent of livestock and companion animal feed comprised corn, with soybean meal at 12 percent and distillers dried grains 11 percent. Other ingredients incorporated into compound feed included wheat byproducts, 3 percent; animal byproducts, 3 percent; animal fats, 2 percent; corn gluten and canola meal, 2 percent each.


With respect to 2020, a value of 248.4 million tons was projected based on the impact of COVID-19 that interrupted production and processing during March and April. Projections of future feed production through 2025 using a base of 248.4 million tons in 2020, range from a best- case scenario of 263.1 million tons to a worst-case situation with continued interruption in supply and demand due to COVID, resulting in a low production 237.2 million tons. The expected production in 2025 will be 254.6 million tons valued at $49 billion.



Commenting on the IFEEDER Report, Constance Cullman, AFIA President stated, “This report demonstrates that supporting our essential agricultural workforce with better access to COVID-19 prevention, testing and vaccines in rural America will have a positive impact on our long-term economic growth and contribution to local economies.


Ukraine Chicken Production Impacted by Feed Costs and HPAI


According to USDA-FAS-GAIN Report UP2ND21-0012 released on March 1st, Ukraine will experience a 3.4 percent decline in total production from 2020 to 2021.  For the market year beginning January 1st, chicken production is estimated at 1.375 million metric tons down from 1.423 metric tons in 2020. Domestic consumption is estimated at 54.4 lbs. per capita based on a population of 44.5 million. 


In 2021 USDA-FAS projected exports of 0.41 million metric tons representing 29.6 percent of total production. In 2020, Ukraine exported 0.78 million metric tons of RTC in the form of bone-in cuts and whole birds to the E.U., This volume will be curtailed by HPAI in 2021. Ukraine exports to the Middle East, the Russian Federation and North Africa including Egypt.


Approximately 80 percent of chicken production is from vertically integrated companies with MHP the largest with an output of 0.73 million metric tons.  This producer exports 53 percent of production and recently expanded to Slovenia.  The second largest producer Agromars ceased production in December 2020 due to their inability to service debt.  This producer was committed to the market in Ukraine.  Five midsize chicken producers and a number of regional operators are responsible for ten percent of output.  The largest companies produce their own grains in a policy common in Eastern Europe to constrain production costs. Restraints to profitability in 2020 included numerous outbreaks of highly pathogenic avian influenza depriving some producers of export markets including the E.U.  Inefficient management and accumulation of debts resulted in the demise of Agromars that once supplied seven percent of the market.


In 2020 escalation in feed costs were not compensated by proportional increases in unit revenue.  Subject to restrictions relating to HPAI the largest Ukrainian producer MHP will continue to supply the E.U. under the Deep and Comprehensive Free Trade Area Agreement.  It is possible that Ukraine may be able to ship to the U.K. as a result of the Free Trade and Strategic Partnership Agreement that came into effect on December 31st 2020 when the U.K. withdrew from the E.U.
HQ of MHP Poultry Company, Ukraine





Tyson Foods Intensifies Rate of COVID Vaccination for Workers


In a March 8th press release, Tyson Foods announced that COVID-19 vaccine would be administered to 24,000 employees in Arkansas, commencing March 9th at Fayetteville and Springdale facilities.  Vaccination events are planned for Tyson team members in Garden City, KS. and at the Claremont, Monroe, Sanford and Wilkesboro, NC plants.


Vaccines will be administered by Matrix Medical, engaged by Tyson Foods to provide health services including screening, testing and vaccination for COVID.  In recent weeks, 10,000 employees have been vaccinated in Tyson red meat and poultry plants consistent with the availability of vaccine and state and county priorities.

Tyson Foods have been proactive in initiating preventive measures to protect workers from COVID-19.


FSIS Revises Sampling Instructions for Pathogen Verification


An FSIS directive issued on February 2nd contained sampling instructions for raw poultry products to be evaluated by Inspection Program Personnel (IPP).  FSIS Directive 10.250.2 Performance Standards includes general sampling policies, required sampling supplies, the responsibilities of IPP, selecting samples, determining eligibility for sampling and procedures to sample chicken carcasses.  The directive also includes information on sampling turkeys for Salmonella and Campylobacter and for chicken parts including breasts, legs and wings.  Instructions on shipping samples are contained in the directive. 


The directive can be downloaded from www.fsis.usda.gov/sites/default/files/media_file2021-03/10250.1


Possibility of Surveillance of COVID Incidence In Packing Plants by Examining Sewage


The U.K. has instituted a National Wastewater Epidemiology Surveillance Program to detect the presence of SARS-CoV-2 virus responsible for COVID-19 in sewage.  Data demonstrated that it is possible to detect one case per 10,000 residents contributing to a sewage system.  Surveillance in schools has demonstrated an increase in recovery from sewage approximately one week before an upsurge in community cases. 


The program now includes 200 sites in England covering 80 percent of the population.  A similar program has been initiated in Australia where the approach has been used to monitor norovirus and polio.  Surveillance for cholera in sewage has been applied in New Orleans for many decades.

It would appear both beneficial and practical to monitor sewage from the outflow of bathrooms in processing plants to qualitatively detect the presence of SARS-CoV-2 and possibly to ascertain the quantum of virus recovery.  It would be especially useful to make comparisons before and after administration of COVID vaccine to workers in a plant as this would indicate the effectiveness of vaccination to lower rates of transmission.


Federal Judge Dismisses COVID Lawsuit in Nebraska


U.S. District Judge John M. Gerrard has dismissed a case filed by three anonymous ex-workers of Noah’s Ark Processors LLC in Hastings, Nebraska.  In Alma et al v Noah’s Ark Processors LLC. The plaintiffs were represented by the American Civil Liberties Union.


In dismissing the suit, Judge Gerrard ruled that “people directly put at risk by Noah’s Ark alleged misconduct are the people who work there now and the plaintiffs cannot assert their claims for them.”  In his ruling the Judge noted that the plaintiffs were no longer employees and are members of the local community and it would then be speculative to assign their possible risks for contracting COVID-19 to the plant.


To sustain a verdict against an employer as a result of contracting COVID, an employee must demonstrate that the infection was acquired in the plant, representing a virtual impossibility.


In January 2019 Noah’s Ark Processing was fined $182,000 by OSHA for 16 violations including routine safety procedures. The citations were issued following an accident in which a worker was burned by exposure to anhydrous ammonia.


*Alma et al v Noah’s Ark Processors LLC. 4:20-cv-03141. U.S.District Court for the District of Nebraska


TreeHouse Foods Reaches Agreement with Jana Partners


In mid-February EGG-NEWS reported on the dispute between Jana Partners LLC, an investor, and the management of TreeHouse Foods.  In accordance with a March 2nd agreement, Jana will nominate two directors to the Board and the companies have agreed to end mutually pejorative comments.


Steven T. Oakland, President and CEO of TreeHouse, stated “We share a common perspective with Jana that our current share price does not reflect the progress that we have made and the value of our opportunities, business and outlook.  I look forward to working with Jana and the rest of the Board to focus on accelerating our momentum and achieving a stock price that reflects the true value of our business.”


Barry Rosenstein, Managing Partner of Jana, added “We are encouraged by the steps the company has been taking including these director additions and by the ongoing commitment to unlock stockholder value.” 


Jana Partners has disclosed a 7.4 percent equity position and has urged a strategic review of the company including a potential sale.  Jana previously motivated the sale of Pinnacle Foods to Conagra Brands in 2018 and was involved in the sale of Whole Foods Market to Amazon.com.


TreeHouse Foods has a market capitalization of $2.95 billion. Shares have traded over the past 52-weeks in a range of $33.50 to $53.98 with a 50-day moving average of $45.98.  TreeHouse shares are regarded as overvalued and trade with a forward P/E of 17.6. As of February 12th       12 percent of the float was short. On a trailing 12-month basis, operating margin was 6.8 percent and the profit margin 0.3 percent. Return on assets attained 3.5 percent but return on equity was 2.7 percent hence the concern of investors.


OSHA Criticized for Negligence over COVID Investigations


A recent Wallb Street Journal article criticized the Occupational Safety and Health Administration (OSHA) for a lack of response to reports of worker deaths due to COVID in packing plants allegedly attributed to “workplace transmission”.  In 2020 OSHA received 72 percent more complaints than in 2019, but performed only 12 percent of the required inspections with six percent directly attributed to COVID-19.


Evaluation of workplace conditions with regard to COVID-19 was complicated by the reality  that during the period of high incidence extending from March through May, the Centers for Disease Control failed to establish definitive guidelines to protect workers.  The Occupational Safety and Health Administration did not develop standards until the infection was contained by proactive and responsive action by employers. These included provision of PPE, staggering shifts, improving ventilation, health screening and testing and placing barriers between workstations.


On April 28th 2020, President Trump signed an Executive Order to maintain poultry and meat processing facilities open during the COVID-19 national emergency.  The Executive Order required management of plants to apply appropriate protective measures and the order did not absolve management from negligence or willful disregard of the health of workers.


Starboard Value Acquires Equity in Elanco Animal Health


Starboard Value LP an active investor has acquired a significant equity position in Elanco Animal Health (ELAN) has nominated three directors to the 13-person board.  In December, Sachem Head Capital Management that holds six percent of ELAN equity placed founder Scott Ferguson on the Board.  Shortly thereafter, the company eliminated 350 positions and reduced R&D spending in an attempt to increase shareholder value.  Starboard has a reputation of aggressively restructuring and forcing management to take steps to increase share price.  Over the past 52 weeks ELAN has traded in a range of $15.17 to $34.09 with a 50-day moving average of $30.42.


Elanco has a market capitalization of $14.8 billion with 94.7 percent of equity held by institutions.  Approximately 2.4 percent of float is short effective February 12th.  Elanco has attained a 12-month trailing operating margin of 0.4 percent and a profit margin of -17.1 percent.  Return on assets is less than 0.1 percent and the return on equity is -8.0 percent.  Elanco carries approximately $6.2 billion in total debt increased by the acquisition of Bayer Animal Health. ELAN posts total assets of $17.69 billion, effective December 31st 2020 with  $12.61 billion of this amount represented by goodwill and intangibles.


Elanco faces litigation based on the fact that a one-time subsidiary Agristats Inc. is a co-defendant in a class-action lawsuit alleging collusion among major broiler producers.  A number of the defendants have already settled with plaintiffs and it is highly likely that Elanco that owned Agristats for the period subject to litigation will be liable for substantial settlement costs and legal fees or alternatively will bear costs in the event of an adverse judgment if the case goes to trial.


Following the news of the Starboard move, ELAN spiked from $30.84 at 13H30 on March 3rd to $32.95 but declined thereafter settling to $31.31 at close of trading.


Walmart Supply Chain Executive Leaves


Greg Smith Executive Vice President for the U.S. Supply Chain of Walmart has resigned from the company to become Executive Vice-president of Global Operations for Medtronic.


His departure comes at a critical time for Walmart after announcing a $350 billion initiative on Wednesday March 3rd to increase sourcing of items made, grown or assembled in the U.S.  Walmart has established priorities for food processing, plastics, textiles, electrical appliances, pharmaceuticals and medical supplies.

Greg Smith Walmart


Russia Considering Recission of Tax on Imported Chicken


According to a report by Reuters, the Russian Federation is considering a reduction on the tax imposed on imported chicken as a price stabilization measure.  Recently demand for both chicken and eggs has soared.  This is attributed to declining domestic production as a result of avian influenza and a shortage of capital for expansion.


According to the USDA-FAS GAIN Report RS2020-0042 released in late September 2020, production for the market year beginning January 2021 will attain 4.73 million metric tons with imports projected at 220,000 metric tons.  Russia currently has an import quota of 364,000 metric tons.  The shortfalls in domestic supply should be compensated for by imports mainly from Brazil and the Ukraine.


Canada Funding Meat Plants to Enhance COVID Prevention


Agriculture Canada Minister,
Marie-Claude Bibeau

The Government of Canada will provide approximately $6 million to improve prevention measures in 24 meat plants located in the three prairie provinces of Alberta, Manitoba, and Saskatchewan. 


Funding will be used to allow increased social distancing, to purchase PPE and improve training.  Operators of small plants have expressed gratitude for the support received from Agri-Food Canada with funding specifically designed to protect workers until vaccination is widely implemented.


Pilgrim’s Pride to Erect Pet Food Ingredient Plant


Pilgrim’s Pride has announced that it will erect a pet food ingredient plant adjacent to an existing facility in Carnesville, in Franklin County, GA. Investment in the plant will avoid dumping wasted ingredients in landfills and will contribute to sustainability.


The facility will include technology to contribute to efficiency and environmental compatibility.  These include odor suppression and a high efficiency water treatment plant.  The capital cost will be $70 million and the plant will create 100 construction and trade jobs during and will ultimately provide 90 permanent positions.


Currently Pilgrim’s Pride employs more than 8,000 in Georgia and pays local growers over $150 million annually.  The Georgia payroll exceeds $440 million and the company has invested more than $250 million in capital improvements over the last five years.


It is projected that the plant will contribute $65 million annually to the regional economy through direct and indirect spending and will contribute more than $1 million to local tax revenues.



Tyson Foods Donates to Tampa Bay Mega Pantry


Tyson Foods donated 2,500 21-pound cases of chicken valued at $113,000 to Tampa Bay Mega Pantry to commemorate the Super Bowl weekend.


Shannon Hannon-Oliviero, External Affairs Officer at Feeding Tampa Bay, stated “The donation was greatly appreciated and we stand with Tyson Foods in the fight against hunger.”  She added, “It was magnificent to receive thousands of pounds over a very special weekend here in Tampa Bay making it possible for families to celebrate Super Bowl LV with a protein-packed nutritious meal.”


Kevin Ordway, Tyson Foods Team Lead for Publix and Fish Hawk Trails, stated “We upped our donation from the normal 33,000 pounds of frozen chicken to 55,000 pounds since Super Bowl LV was in town.”  Ordway was responsible for establishing a chapter of Tyson’s Veterans and Friends Resource Group that supports veterans and their  families.




Wendy's Reports on Fourth Quarter and Fiscal 2020


On March 3rd, the Wendy's Company (WEN) reported on results for the fourth quarter and FY 2020 ending January 3, 2021. For the quarter, the company earned $38.7 million on total revenue of $474.31 million with a diluted EPS of $0.17.  For Q4 of FY 2019, comparable figures were net income of $26.5 million on total revenue of $427.19 million with an EPS of $0.11.


For fiscal 2020, the company earned $117.8 million on revenue of $1.73 billion with an EPS of $0.52.  In FY 2019, income was $136.9 million on total revenue of $1.71 billion with an EPS of $0.58.


Growth in same-restaurant sales for Q4 compared to the corresponding quarter in fiscal 2019 was 5.5 percent for the U.S.  International fell by 2.3 percent with a global average of 4.7 percent. For fiscal 2021, the Wendy's Company expects global system wide sales to grow six to eight percent with adjusted EPS of $0.67-$0.69 with capital expenditure of $80-$90 million.

Todd Peneger CEO


In commenting on Q4 and FY 2020 results, Todd Penegor, president and CEO stated, "we accomplished a lot in 2020 including securing our position as the number two QSR hamburger restaurant chain in the U.S. and more than doubling our digital sales".  He added, "we remain confident in our playbook of investing smartly to drive accelerated growth behind our major long-term growth pillars; significantly building our breakfast daypart, accelerating our digital business and expanding our footprint both internationally and in the U.S."


On January 3rd 2021, the Wendy's Company posted total assets of $5.04 billion of which $1.98 billion comprised intangibles and goodwill.  The company carries $3.14 billion in long-term debt, lease and finance liabilities.


The Wendy's Company has a market capitalization of $4.51 billion and has traded over the past fifty-two weeks in a range of $6.82 to $24.91 with a 50-day moving average of $20.84.  On a trailing twelve-month basis, operating margin was 18.5 percent, profit margin 7.8 percent.  The company generated a return on assets of 3.1 percent and 18.0 percent on equity. 


Wendy's narrowly missed the consensus EPS estimate of $0.18 per share and missed Zachs’ consensus estimate on revenue by one percent.  Wendy's has underperformed the S&P in 2021 having lost 2.8 percent compared to a gain of three percent for the S&P Index.  WEN closed at $21.33 on Tuesday, March 2nd before the release, fell sharply at the Wednesday opening and closed on Wednesday, March 3rd at $20.12 down 5.5 percent.


Sanderson Farms Contributes to Advancement of Women


In advance of Women’s Day on March 8th, Sanderson Farms will feature members of their staff on social media platforms. Lampkin Butts, President and COO of Sanderson Farms, stated “Our company is a big proponent of hiring, promoting, and including women in leadership positions due to their unique perspectives, talent, and strong work ethic.”  He added, “We are extremely proud of all the women who contribute so greatly to the success of Sanderson Farms.”


 Over 22 percent of Sanderson Farms management team is female and 48 percent of all employees are women.


United Way of Central Georgia Receives Generous Grant from Perdue Farms


Perdue Farms associates in the Perry, GA complex, together with a matching contribution from the Franklin P. & Arthur W. Perdue Foundation, donated $87,000 to Central Georgia United Way.


George McCanless, President and CEO of United Way of Central Georgia, commented “The COVID nightmare has created even more demand for help from our most vulnerable neighbors.  Due to business shutdowns and layoffs, many who were previously financially stable now find themselves struggling to maintain their family’s basic needs including housing and an adequate supply of food.”


Lee Hiner, Perdue Director of Harvest Operations in Perry, stated “United Way plays an instrumental role in helping improve the quality of life for so many people and we remain committed to supporting their partners, because together we are able to do so much.”  Since 2007 Perdue associates, with a company match, have donated more than $1.6 million to support the United Way of Central Georgia.



Welcome to Rabobank as a Sponsor


Rabobank is a leading global financial services company providing wholesale and retail banking, leasing, and real estate services to customers in more than 40 countries worldwide. Founded over a century ago as a network of cooperative banks serving Dutch dairy farmers, Rabobank’s activities in the 21st century remain focused on Banking for Food. Rabobank is currently one of the world’s largest banks with over $640 billion in assets, more than 800 offices, with 43,000 employees.


Beyond of the Netherlands, Rabobank’s primary focus is food and agriculture, serving as a leading financial institution to the farming community and companies feeding the world’s growing population. Rabobank’s mission of “Growing A Better World Together” reflects the Bank’s commitment to agriculture as well as its cooperative roots. In carrying out this mission, Rabobankers worldwide continue to focus on delivering a wide array of sector expertise, strategic counsel and tailored financial solutions to clients across the entire food value chain.


To serve North America Rabobank operations are divided among Rabobank Wholesale North America and Rabo Agrifinance. Coverage extends across a variety of sectors including animal protein, dairy, farm inputs, sugar, consumer foods, beverages and supply chains for grains and oilseeds. Serving customers in both the production and processing sectors, teams are organized around clients’ enterprises to provide a full selection of advisory services and financial products including corporate lending, risk management, insurance, and input finance. Rabobank is driven by long-term relationships as bankers leverage industry expertise and client-focused solutions to support customers from coast to coast.


The Rabobank Animal Protein focus has been a pillar of the Bank’s activities in the Americas for decades. With a strong understanding of the forces impacting this key sector, Rabobank partners with operators across the value chain extending from farm to fork. Customers include feed suppliers, contract growers, primary processors, further processors, exporters, and others across all proteins. The experienced team of bankers at Rabobank are dedicated to supporting livestock production for years to come.


For inquiries and more information, access the websites listed below and follow Rabobank on LinkedIn and Twitter.


Rabobank Wholesale North America Website


Rabo Agrifinance Website


Rabobank Wholesale North America on LinkedIn

Rabo Agrifinance on LinkedIn


Rabobank Wholesale North America on Twitter


Rabo Agrifinance on Twitter


Costco Reports on Q2 of FY 2021


In a press release dated March 4th released after market close, Costco Wholesale Corporation (COST) announced results for the 2nd Quarter ending February 14th.


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)


2nd Quarter Ending

Feb. 14th 2021

Feb. 16th 2020

Difference (%)





Gross profit:




Operating income1:




Pre-tax Income

Net Income







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 (Feb 14 ‘21/Aug. 30 ’20)




Market Capitalization




Note 1. Compared to Q2 FY 2020, SGA inflated by 16 percent to $4.34 Billion attributed to COVID-related expenses in Q2 FY 2021, including bonuses and increased worker remuneration.


52-Week Range in Share Price: $276.34 to $393,15 50-day moving average, $351.05


Market Close Feb. 4th $319. Close Feb. 5th post-release $318


Forward P/E 33.3 Beta 0.6


Percentage same-store sales growth* Q2 FY 2020 to Q2 FY 2021:-

US. +11.4; Canada +13.4; Other International, 21.5. Composite, COST 13.0. E-commerce +76.
* excluding fuel and Forex.

COST operates 804 warehouse locations including 558 in the U.S. and owns and operates Lincoln Premium Poultry producing 2 million rotisserie birds per week for store sales.


FSIS Recalls Non-Reinspected Canned Beef


Milky Way International Trading Corp. in Norwalk, CA. is recalling almost 150 tons of ready-to-eat canned corned beef products imported and distributed without the benefit of FSIS import re-inspection.  The products were apparently inspected in Australia, but the company failed to follow FSIS re-inspection procedures.  Accordingly, the FSIS issued a Class I recall March 2nd although there have been no reports of health issues relating to consuming the product.  This episode represents a loss to MW Polar, the holding company of Milky Way International Trading Corp. and is an unfortunate waste of protein.


U.S. Customs and Border Protection Interdict Bologna from Mexico


U.S. Customs and Border Protection (CBP) detected and confiscated 470 pounds of Mexican bologna in two apprehensions during February at border crossings in New Mexico.


Illegal introduction of meat products into the U.S. represents an extreme risk to our livestock.  It is questioned whether U.S. CBP have adequate resources in the form of detection dogs and trained personnel to detect smuggled meat and other contraband that could serve as a vehicle to introduce exotic infections into the U.S.


Although CBP detected more than 3,000 prohibited plants, meat, or animal byproducts each day during 2020, as with smuggling of illicit drugs, it is the quantity that is not interdicted that is important to the economy and the health of livestock.



African Swine Fever Persists in China


Despite evidence that mortality as a result of African swine fever is declining in China and that herds are being restored to pre-ASF levels, the infection is endemic with outbreaks reported from numerous provinces.  Prices of weaning, market hogs and pork are more reliable indicators of the status of health in hog herd in China then official reports by the Ministry of Agriculture. 


A study conducted from June through December* 2020 revealed 22 isolates of genotype II ASF virus that had undergone mutations distinguishing them from the lethal HLJ/18 strain, the earliest isolated in China in 2018. Eleven isolates were non-hemadsorbing. Of these variants two were lethal and two non-HAD strains displayed reduced virulence but were highly transmissible. The authors concluded that ASF viruses that lose the EP402R gene do not express CD2v protein and display lower pathogenicity. This has implications for recognition of outbreaks that initially are based on a rise in mortality with confirmation applying PCR or other molecular diagnostic procedures.


There are no currently approved ASF vaccines in use although the issue of clandestine development and illegal deployment of gene-deleted preparations has been raised. The research group involved in the study has produced a candidate vaccine based on removal of 7 genes from HLJ/18 that has proven safe under laboratory evaluation.


Encheng Sun, Zhenjiang Zhang, Zilong Wang, Xijun He, et al.: Emergence and prevalence of naturally occurring lower virulent African swine fever viruses in domestic pigs in China in 2020. Science China Life
Sciences. 2021; doi: <https://doi.org/10.1007/s11427-021-1904-4>.


Evaluation of COVID Transmission among Nebraska Meat Processing Workers


The University of Nebraska Medical Center undertook an epidemiologic study* of COVID-19 in seven beef plants, three pork plants and one poultry plant in addition to two secondary processing facilities employing from 400 to 3,000 workers with a mean of 1,675 per plant. 


During the period April 1 through July 31, 2020, 5,002 workers out of approximately 26,000 were diagnosed with COVID-19 representing an attack rate of 19 percent.  Among the 5,002 total case-patients studied, the median age was 43 years with 58 percent men and 67 percent identified as Hispanic or Latino.  Symptoms were reported by 85 percent of the study group and average duration of illness was 12.8 days.  Of patients hospitalized, 73 percent were of Hispanic or Latino ethnicity.

JBS Plant, Grand Island ,NE.

The study demonstrated the benefit of preventive measures such as placement of physical barriers along production lines and in cafeterias, enforcing masking and supplying PPE.  Ten days after preventive measures were initiated, eight plants showed a statistically significant decrease in incidence rate, three showed non-significant decreases and one facility showed a statistically significant increase in cases.  Masking in three facilities evaluated showed a significant reduction in incidence rate.


In reviewing results, the author’s concluded that multilayered interventions are effective and reduction in incidence cannot be achieved through introduction of only one or two precautionary measures.



*Herstein, J. et al. Characteristic of SARS-COV-2 Transmission among Meat Processing Workers in Nebraska, USA and Effectiveness of Risk Mitigation Measures. Emerging Infectious Diseases 27: April 2021. doi: 10.3201/eid 2704.204800


WHO Downplays Risks of H5N8 Avian Influenza in Humans


Last month, authorities in Russia reported on asymptomatic H5N8 avian influenza in seven workers involved in depletion of laying hens infected with H5N8 HPAI from a farm in Astrakhan. Despite a report on the apparent seroconversion of workers, the World Health Organization (WHO) considers it unlikely that the infection represents a risk to either consumers or those involved in poultry production and there is no evidence of human-to-human transmission.


H5N8 avian influenza is widely distributed in Europe, Eurasia, and Asia and there have been no reports of any illness among workers on poultry farms or those involved in depletion of infected flocks.


It is obvious that the report from Russia will intensify surveillance among humans in contact with infected poultry but should not elicit concern among consumers. Appropriate prevention measures against infection by donning PPE should be followed.




Maple Leaf Foods Posts FY2020 Results


On February 25th Maple Leaf Foods (TSX:MFI) posted results for Fiscal 2020 ending December 31st. For the year, sales attained $3,399 million* with net earnings of $89.49 million and an EPS of $0.72.  Comparable figures for FY2019 were sales of $3,114 million with earnings of $58.96 million and an EPS of $0.47.


The Meat Products segment attained sales of $3,252 million with operating earnings of $72.3 million or an adjusted earnings of $263.5 million.  The Plant Protein segment attained sales of $166.5 million with an operating loss of $(25.5) million, but an adjusted loss of $(99.3) million. 


In commenting on results, Michael H. McCain, President and CEO, stated “Our 4th Quarter capped off a record performance year with strong top-line gains coupled with solid adjusted EBITDA margin expansion.”  He added, “Momentum softened in plant protein with solid improvement in the core line-up offset by soft fresh and food service performance.  We remain confident in our long-term position supported by innovation and brand investment.”


The company noted that although Plant Protein segment sales grew 19.5 percent.  SG&A expenses totalled $144 million with increased expenditures in advertising, promotion, and marketing to support brand renovation and new product innovation.  During FY2020, the company spent $490.7 million on capital projects including $334 million on construction principally for the London ONT, Processing Plant.


The company posted total assets of $3.135 billion on December 31st with long term debt of $724.9 million.

Michael McCain CEO Maple Leaf Foods


Maple Leaf Foods has a market capitalization of $2.52 billion and has traded over the past 52- weeks in a range of $13.46 to $24.30 with a 50-day moving average of $19.94.  The 12-month trailing operating margin was 5.8 percent and profit margin 2.6 percent.  The company generated a return on assets of 4.2 percent and on equity of 5.8 percent.


*Currency values in US$


Individual States Enacting Legislation Indemnifying Producers from COVID Claims


A number of states are either considering, or have passed, legislation indemnifying meat packers, manufacturers of PPE, schools, and medical facilities from liability claims arising from COVID-19.  Most of the  intended legislation excludes gross negligence and fraud.


Laws have been enacted in Indiana, Alabama, Ohio, and Georgia.  Numerous states are in the process of drafting legislation, but this would not be retroactive to 2020 outbreaks.  Processing plants producing meat, poultry, and food products were subject to a Presidential Executive Order to maintain production on April 28th 2020.  The Executive Order did however require plants to conform to CDC recommendations that at the time were vague and lacked clearly stated standards.


North American Meat Institute Persists in Litigating Against Proposition #12


Denied an appeal by the 9th Circuit concerning the constitutionality of California Proposition #12, the North American Meat Institute has filed for the Supreme Court of the United States to review the case.


At issue is the requirement that meat and poultry products shipped to California must be produced in conformity to the standards of housing and management prevailing in the receiving state.  NAMI considers that Proposition #12 limits interstate commerce and provides California producers with a competitive advantage.


The 9th Circuit lawsuit filed by NAMI was supported by the U.S. Department of Agriculture and by the Attorneys General of twenty States, the Chamber of Commerce, and the Food Marketing Institute.


Copyright © 2021 Simon M. Shane