The Administration’s Misdirected War on Intensive Livestock Production

The initiatives directed against intensive livestock production focusing on the chicken segment of the poultry industry were evident during the Obama Administration.  Secretary of Agriculture, Tom Vilsack, together with then Attorney General Eric Holder, arranged a series of staged regional listening sessions to create a groundswell for regulations to shift the balance of interaction between contractors and integrators.  In the event, although regulations were framed, their implementation was cancelled by the intervening Republican Administration.


With every prospect of a change in Administration, a two-pronged attack on protein production has been intensified jointly by the Department of Agriculture and the Department of Justice. Secretary of the USDA, Tom Vilsack, citing the July 2021 Presidential Executive Order on Promoting Competition, has issued a rule under the Packers and Stockyards Act to force intended transparency and ‘fairness’. Notwithstanding the absence of evidence to the contrary the policy of the Department appears to be to shackle integrators with onerous reporting requirements and overt intervention into the basis of contract relationships between integrators and growers.


The intended rule will retroactively amend as many as 25,000 grower contracts according to the National Chicken Council.  The requirement that contracts should specify minimum annual placements and stocking densities will prevent integrators from responding to market pressures.  The intended final rule will impose additional costs that will ultimately be borne by a wide range of stakeholders including shareholders and consumers. 


Andy Green, a Senior USDA Advisor responsible for “fair and competitive markets”, stated “It is high time that poultry growers get the benefit of robust transparency-upfront and ongoing-to clean up the broiler chicken market of deceptive practices.”  He added, “This Poultry Transparency Rule lays down a powerful marker that the USDA stands on the side of marketing integrity and fairness for farmers.” The USDA will appoint a Chief Competition Officer working within Agricultural Marketing Services to implement policy, establish priorities and support enforcement of the Packers and Stockyards Act in collaboration with states Attorneys General.


Mike Brown, President of the National Chicken Council, responded to the “Poultry Transparency Rule” that he characterized as “specifically designed to chum the water for lawsuits”.  He further stated, “This is the latest example of Bidenomics pushing increased regulations, red tape and costs onto businesses causing record inflation and input costs and threatening food security and potentially raising grocery bills even further for Americans.”


The Department of Justice has been active in attempting to restructure the protein industry.  David Hamilton and colleagues at DLA Piper reported on a presentation by Michael Kades, Deputy Assistant Attorney General in the DOJ Antitrust Division.  Kades addressed inherent Administration concern over concentration across agricultural markets.  Consolidation and economies of scale have developed as rational economic realities in a competitive environment.  Kades expressing his personal opinions on markets and competition and the role of government in addressing with real or perceived inequities is naturally, a strong supporter of antitrust enforcement.  He considers that the prevailing economic thought during the 1980s relating to free market enterprise “opened the door to rising concentration across agricultural markets”.  He considers that the government has a role, if not an obligation, to suppress market power especially if created through exploitation of farmers and livestock producers. 


Kades draws on history by noting that between 1920 and 1980, the then five largest meat packers responding to anti-trust legislation, experienced a decline in market share from 80 percent to 25 percent following DOJ intervention in 1920.  Subsequently, through a process of acquisitions and consolidations, four major companies now control 80 percent of beef packing capacity reverting to the situation pertaining in the early decades of the previous century.  Kades is also concerned over the concentration in the corn seed market with four companies controlling 85 percent of output. Kades attributes consolidation to the loss of 100,000 family farms between 2011 and 2018. 


The Department of Justice under the present Administration has been active in enforcing compliance with the 1921 Packers and Stockyards Act.  The Department filed a civil complaint against Koch Foods relating to termination penalties for contractors.  The Antitrust Division of the DOJ intervened in the merger of Wayne Farms and Sanderson Farms for alleged failure to disclose risks relating to contract penalties.  In Little v Cargill, the Defendants agreed to improved transparency and other conditions to enable the transaction to proceed.         


Kades pointed to a consent decree negotiated with the Department of Justice concerning restitution of pay to workers deprived of fair wages as a result of alleged collusion and suppression of competition over a 20-year period.


The Department of Justice has filed a complaint alleging that AgriStats through its benchmarking reports encouraged integrators in pork, turkey and chicken to manipulate production with the intent of increasing prices.  This contention is contested by financial reports released by Tyson Foods and Pilgrim’s Pride that fail to demonstrate super profits that would conceivably arise from diminished competition. Enigmatically both companies have recently posted losses attributed to falling prices in response to overproduction.


Deputy Attorney General Kades emphasizes that the “whole of the Government is committed to promoting competition in agricultural markets and through litigation will attempt to reverse long-term coordination and exclusionary conduct”. The Department of Justice will allocate attorneys and staff to evaluate the actions of major protein producers with the objective of intensifying antitrust enforcement in this sector of agriculture.


Intensive livestock producers will be hard pressed to deploy appropriate, defensive responses to a combined initiative by the USDA and the Department of Justice intent on dismantling intensive livestock production. The combined actions of USDA and the DOJ will ultimately be to the detriment of farmers, consumers and other stakeholders.


Poultry Industry News

Broiler Month

Monthly Broiler Production and Prices, November 27th 2023.


Broiler Chick Placements.

According to the November 15th 2023 USDA Broiler Hatchery Reports 911,074 eggs were set over four weeks extending from week ending October 21st through November 11th inclusive. This quantity was down approximately three percent compared to the corresponding period in 2022.


Total chick placements for the U.S. over the four-week period amounted to 710,575 chicks. Claimed hatchability for the period averaged 80.3 percent for eggs set three weeks earlier (80.6 percent for the preceding four-week period). Each 1.0 percent change in hatchability represents 1.75 million chicks placed per week and 1.66 million broilers processed assuming five percent culls and mortality with the current range of weekly settings.


Cumulative chick placements for the period January 7th 2023 through November 11th amounted to 8.37 billion chicks, one percent lower than the corresponding period in 2022.


According to the November 20th 2023 edition of USDA Chickens and Eggs pullet breeder chicks hatched and intended for U.S. placement during October 2023 amounted to 7.73 million, up 6.0 percent (435,000 pullet chicks) from October 2022 and 1.17 million pullet chicks or 13.6 percent less than the previous month of September 2023. Broiler breeder hen complement attained 63.38 million on October 1st 2023, 0.9 percent higher (571,000 hens) than on October 1st 2022.


Broiler Production


As documented in the November 23rd USDA Broiler Market News Report for the processing week ending November 18th 2023, 166.8 million broilers were processed at 6.49 lbs. live. This was 0.3 percent more than the 166.3 million broilers processed during the corresponding week in the previous month of October 2023 and 4.2 percent less than the 174.1` million processed during the corresponding week in November2022. Broilers processed in 2023 to date amounted to 7.67 billion, less than 0.3 percent less than for the corresponding period in 2022.


Ready to cook (RTC) weight for the most recent week was 822.6 million lbs. (373,923 metric tons). This was 0.6 percent less than the 827.7 million lbs. processed during the corresponding week in October 2023 and 4.1 percent less than the 857.6 million lbs. during the corresponding week in October 2022. Dressing percentage was a nominal 76.0 percent. For 2023 to date RTC broiler production attained 37.24 million lbs. (16.93 million metric tons). This quantity was 0.4 percent less than the corresponding period in 2022.


Broiler Prices


The USDA National Composite Weighted Wholesale price averaged over the period November 20th to November 24th was up 0.5 cents per lb. or 0.4 percent compared to the corresponding week in October 2023 at 113.7 cents per lb. The attached USDA figures denotes average prices over three-years.


Leading QSRs are using increasing quantities of breast meat for sandwiches, strips and nuggets. Inflation is increasing consumer awareness of value with chicken benefitting at the expense of beef and pork


The USDA National benchmark prices in cents per lb. (rounded to nearest cent) are tabulated from the new version of the Broiler Market News Report.


Turkey Month

Monthly Turkey Production and Prices, November 24th 2023


Poult Production and Placement:


The November 17th 2023 edition of the USDA Turkey Hatchery Report, issued monthly, documented 25.75 million eggs in incubators on November 1st 2023 compared to 26.46 million eggs on November 1st 2022* The November 2023 set was down 2.8 percent (727,000 eggs) from November 2022 and 1,258,000 eggs (4.7 percent) lower than the previous month of October 2023.


A total of 23.0 million poults were hatched during October 2023 up 498,000 poults (2.2 percent) compared to 22.45 million in October 2022*. The October 2023 hatch was up 1,381,000 poults (6.4 percent) from the previous month of September 2023.



A total of 20.8 million poults were placed on farms in the U.S. in October 2023, compared to 20.5 million in October 2022*. The October 2023 placement was 1.6 percent, (318,000 poults) more than the month of October 2022. This data confirms disposal of 2.16 million poults during the month. Approximately 9.4 percent of the October 2023 hatch was not placed.


For the twelve-month period November 2022 through October 2023 inclusive, 273.5 million poults were hatched and 255.2 million were placed. This confirms disposal of 18.3 million poults over the 12-month period, corresponding to 6.7 percent of all poults hatched.

* USDA revision from previous monthly report.


Meat Exports

U.S. Broiler and Turkey Exports for January-September 2023.




Total exports of bone-in broiler parts and feet during January-September 2023 attained 2,729,138 metric tons, 2.9 percent less than for January-September 2022 (2,811,026 metric tons). Total value of broiler exports declined by 10.2 percent to $3,549 million ($3,951 million).


Total export volume of turkey products during January-September 2023 attained 156,451 metric tons, 10.8 percent more than in January-September 2022 (141,235 metric tons). Total value of turkey exports declined by 5.7 percent to $451.6 million ($478.7 million).


Unit price for the broiler industry is constrained by the fact that leg quarters comprise over 97 percent of broiler meat exports by volume (excluding feet). From the first quarter of 2021 through 2022, unit value of leg quarters increased consistent with international demand followed by a decline in 2023. Leg quarters represent a relatively low-value undifferentiated 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.


Ongoing outbreaks of African swine fever in China and Southeast Asia from early 2019 and Europe from 2010 onwards reduced the availability of pork. In addition, disruptions in chicken production and logistics due to COVID restrictions decreased availability of protein with international repercussions on trade in chicken and pork. The demand for pork imports to China has diminished with restoration of domestic hog production. Mild overproduction is evident in the white-feathered broiler sector with implications for exports other than feet during the remainder of 2033.




During January-September 2023 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 2,746,288 metric tons of chicken parts and other forms (whole and prepared) down 3.0 percent from the first nine months of 2022. Exports were valued at $3,608 million with a weighted average unit value of $1,314 per metric ton.


The NCC breakdown of chicken exports for January-September 2023 by proportion and unit price for each category compared with the corresponding months in 2022 (with the unit price in parentheses) comprised:-

  • Chicken parts (excluding feet) 4%; Unit value $1,247 per metric ton ($1,344)
  • Prepared chicken 0%; Unit value $4,414 per metric ton ($3,851)
  • Whole chicken 6%; Unit value $1689 per metric ton ($1,926)
  • Composite Total 0%; Av. value $1,314 per metric ton ($1,418)


The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports during January-September 2023 compared with the corresponding months of 2022:-


Meat Projection Nov 2023

Updated USDA-ERS Poultry Meat Projection for November 2023.

On November 16th 2023 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2022 (actual), a projection for 2023 and a forecast for 2024.


The 2023 projection for broiler production is 46,209 million lbs. (21.004 million metric tons) unchanged from 2022 but a 0.6 percent downward adjustment from the October report. USDA projected per capita consumption of 99.2 lbs. (45.1 kg.) for 2023, up 0.3 percent from 2022. Exports will attain 7,180 million lbs. (3.264 million metric tons), 1.5 percent below the previous year.


The 2024 USDA forecast for broiler production will be 46,650 million lbs. (21.205 million metric tons) up 1.0 percent from 2023 with per capita consumption up 0.2 percent to 98.4 lbs. (44.7 kg). Exports will be 1.3 percent higher than 2023 to 7,270 million lbs. (3.305 million metric tons) equivalent to 15.6 percent of production.


Production values for the broiler and turkey segments of the U.S. poultry meat industry are tabulated below:-







Difference % 2022

to 2023





Production (million lbs.)





Consumption (lbs. per capita)





Exports (million lbs.)





Proportion of production (%)








Production (million lbs.)





Consumption (lbs. per capita)





Exports (million lbs.)





Proportion of production (%)






Source: Livestock, Dairy and Poultry Outlook released November 16th 2023


The November USDA projection for the turkey industry in 2023 included annual production of 5,500 million lbs. (2.500 million metric tons), up 5.3 percent from 2022 with 2023 consumption of 15.1 lbs. (6.9 kg.) per capita, up 3.4 percent from the previous year. Export volume will increase by 16.7 percent in 2023 to 475 million lbs. (215,910 metric tons). Values for production and consumption of RTC turkey in 2023 are considered to be realistic, given year to date data, the prevailing economy, variable weekly poult placements, production levels, freedom from HPAI and inventories.


The 2024 forecast for turkey production will be 5,595 million lbs. (2.543 million metric tons) up 1.7 percent from 2023 with per capita consumption up 2.0 percent to 15.4 lbs. (7.0 kg). Exports will be 2.1 percent higher than in 2023 to 465 million lbs. (211,360 metric tons) equivalent to 8.3 percent of production.


Export projections do not allow for a breakdown in trade relations with existing major partners including Mexico and China nor the impact of catastrophic diseases including HPAI and vvND in either the U.S. or importing nations


The USDA export projection takes into account declining broiler product exports to China. For 2022, China imported 622,099 tons of broiler products valued at $1,087 million including feet at an average unit price of $1,263 per ton. Feet represented 77.8 percent of volume during 2022 (483,538 metric tons) at a unit price of $1,926 per ton. Compared to January to September 2022, exports to China during the first nine months of 2023 were 29 percent lower in volume to 338,312 metric tons and 32 percent lower in value to $576 million.


Subscribers are referred to the monthly export report in this edition and update of production data and cold storage inventories of broilers and turkeys respectively posted in each end-of- month edition of CHICK-NEWS with the previous monthly data under the STATISTICS tab.


Tyson Foods Inc. Reports on Q4 and FY 2023

In a press release dated November 13th Tyson Foods Inc. (TSN) announced results for the 4th quarter and FY 2023 ending September 30th 2023. TSN posted lower revenue than anticipated but was higher on adjusted earnings.


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)


Fourth Quarter Ending

Sept. 30th 2023

 Oct. 1st 2022

Difference (%)





Gross profit:




Operating income (loss):




Pre-tax income (loss)

Net income (loss)







Diluted earnings (loss) per share

Adjusted earnings per share







Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt and other liabilities:




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets: Sept. 30th ‘23/Oct. 1st 2022




Intraday Market Capitalization November 17th



* Tyson Foods registered a goodwill impairment charge of $333 million for the Beef Segment


For FY 2023 Tyson Foods posted a GAAP loss of $(648) on revenue of $52,881 million with a negative diluted EPS of $(1.87). For FY 2022 the Company earned $3,238 million on revenue of $53,282 million with a diluted EPS of $8.92


52-Week Range in Share Price of TSN: $44.94 to $67.87. 50-day Moving average, $48.63


Market Close: Friday November 10th $46.95. Monday November 13th post release, at market close $45.61 down 2.9 percent.


Forward P/E 22.9 Beta 0.8


The Chicken Segment attained sales of $4,155 million ($4,619 million in Q4 FY 2022) representing 31.1 percent of Company revenue. GAAP operating loss was $(267) million in Q4 representing 57.7 percent of total Company operating loss after a charge of $118 million. Operating income in Q4 FY 2022 was $340 million representing 44.3 percent of the Company total. For the Chicken Segment the report stated:- “The USDA projects chicken production will increase slightly in FY 2014. Anticipated adjusted operating income was forecast at $400 to $700 million for FY 2024.


For comparison among Tyson Foods’ business segments the adjusted operating income (loss) in Q4 2023 were respectively:- Pork, ($11) million; Beef, $(323) million; Prepared Foods $118 million and International $20 million.


In commenting on results Donnie King, president and CEO stated “While economic headwinds persist, we are moving in the right direction and managing what we can control”. He added, "The decisions we have taken have made us more operationally efficient and aided a second quarter of sequential improvement in adjusted operating income. The strategy and leadership team we have in place will allow us to take advantage of the long-term opportunities in front of us and drive shareholder value.”


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


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


China Lifts HPAI Restrictions

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


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


DOJ Sues Koch Foods over Contracts

The Department of Justice has filed a civil lawsuit against Koch Foods alleging that legally questionable penalties were imposed on contractors transferring to other integrators.  The Department of Justice considers that current and past actions by Koch Foods violate federal antitrust laws.  According to the DOJ complaint, Koch Foods imposes exit penalties on farmers who transfer to other integrators in contravention of the Packers and Stockyards Act and the Sherman Antitrust Act.


The Department of Justice has requested that Koch Foods enter into a consent decree requiring the company to “cease demanding, collecting or accepting termination payments”.  The Company should be “enjoined from any retaliation, intimidation or harassment against the independent contractors involved in termination payment disputes”.  The DOJ will require details of any termination payment obligations to be included in contract agreements.


The DOJ considers that imposing exit penalties including threats of lawsuits, serves as a deterrent to farmers in their exercise of their rights to enter into agreements with other integrators.


States Attorneys General Join DOJ in AgriStats® Litigation

Jonathan Kanter, U. S. Assistant Attorney General responsible for the Antitrust Division of the Department of Justice, has announced that the Attorneys General of Minnesota, California, North Carolina and Tennessee are joining the civil action against AgriStats, Inc.  The company is charged with violating Section 1 of the Sherman Antitrust Act “by collecting and distributing competitively sensitive price information, cost, work compensation and output among meat and poultry processors”.  It is generally accepted that AgriStats information is available to and used by the majority of U. S. broiler, pork and turkey producers.


The Department of Justice alleges that the comprehensive reports collated and distributed by AgriStats were applied by subscribers to limit production and hence, raise prices.


This misperception was reinforced in a statement by Rob Bonta, Attorney General for the state of California, who opined without justification, “Because of AgriStats’ business practices, Californians have been paying more for chicken, pork and turkey meat.”  He added, “Agricultural markets are the lifeblood of the California economy and the cost of putting dinner on the table matters to every family in this state.”


In reality, all segments of the meat production industry in the U. S. compete vigorously.  Agri Stats data is essentially historical and the comprehensive figures, irrespective of validity, are left to subscribers to interpret and to make their independent decisions.  The cyclic nature of earnings as posted by public quoted companies, including Tyson Foods, Pilgrim’s Pride Corporation and previously before de-listing, Sanderson Farms, Inc. suggests that there was no collusion based on actual expansion rates and profitability among the companies, all apparently presented with the same information.


Beyond Meat Reports on Q3 FY 2023

In a press release dated November 8th Beyond Meat Inc. (BYND) announced results for the 3rd Quarter ending September 30th 2023.


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


3rd Quarter Ending:

September 30th 2023

October 1st 2022

Difference (%)





Gross profit /(loss):




Operating income/ (loss):




Pre-tax Income/ (loss)

Net Income/ (loss)







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit Margin (%)




Long-term Debt: September 30th ‘23 / Dec. 31st ‘22




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets: Sept. 30th 2023 / Dec. 31st 2022




Market Capitalization Nov. 10th/July 1st 2023




* ‘+’ denotes improvement (or ‘less bad’)



R&D expenditure declined 32.1 percent from Q3 2022 to $9.1 million or 12.1 percent of revenue

S&G expenditure declined 2.2 percent from Q3 2022 to $53.3 million or 70.8 percent of revenue

For FY 2023:-

52-Week Range in Share Price: $22.87 to $5.58 50-day Moving average $8.56

Forward P/E: Neg. Beta 2.3

Insiders hold 9.2 percent of equity, Institutions 37.3 percent.


For the 2nd Quarter of 2023:

U.S. sales represented 57.2 percent and International 42.8 percent

Of U.S sales 70.8 percent were through retail channels, down from 74.3 percent in Q3 2022

Of U.S sales 29.1 percent were through food service channels, up from 25.7 percent in Q3 2022

Average unit revenue in Q2 2023 for all sales attained $4.19/lb. compared to $4.74/lb.

during the corresponding quarter of 2022.

Guidance for FY 2023 included:

Net revenue of between $330 and $340 million, approximately 20 percent below


Gross margin at breakeven

Continued negative cash flow


In commenting on results Ethan Brown president and CEO stated:- “Though we are encouraged by pockets of growth, particularly in the EU where we saw double digit gains in net revenues on a year-over-year basis, we are disappointed by our overall results as we continue to experience worsening sector-specific and broader consumer headwinds. As we shared last week, we are conducting a review of our global operations for purposes of further and significantly reducing our operating expense base as we seek to accelerate our transition to a sustainable and, ultimately, profitable business. And while we expect current headwinds to persist in the coming quarters, we have confidence in the long-term trajectory of our business, its central relevance to the intensifying health, climate and natural resource challenges facing our global community, and our ability to emerge as a stronger, leaner organization as a result of the decisive measures we are undertaking to fit the current macroeconomic reality and business environment.”


Despite this optimistic commentary the reality includes:-

  • An accumulated deficit of $926,143 million.
  • Trailing 12-month negative operating cash flow of $129 million
  • Inventory of $194,570 represents 2.6 times Q3 sales
  • Effective October 30th1 percent of float was short
  • Share price off 54.6 percent over past 12 months
  • Institutional holdings declined from 63 percent to 37 percent over past year.


Tyson Foods Recalls Chicken Patties

According to the USDA Food Safety and Inspection Service, fifteen tons of chicken patties were recalled by Tyson Foods.  The product was manufactured on September 5th and was recalled following an oral injury caused by metal contamination.  The recalled product, marketed as ‘fully cooked fun nugget breaded shaped chicken patties’ was distributed in eight states extending from Alabama to California with the majority delivered to the Midwest.


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

In a press release dated November 13th JBS SA. (JBSAY) announced results for the 3rd Quarter of FY 2023 ending September 30th. The Company missed consensus estimates on earnings that declined by 85 percent from the 3rd Quarter of FY 2022.


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


Third Quarter ending September 30th.



Difference (%)





Gross profit:




Operating income:




Pre-tax Income/(Loss)

Net Income/(Loss)







Diluted earnings per share:




Gross Margin (%)




Operating Margin (%)




Profit/(Loss) Margin (%)




Long-term Debt: September 30th 2023/2022




12 Months Trailing:


Return on Assets (%)



Return on Equity (%)



Operating Margin (%)



Profit Margin (%)



Total Assets: June 30th 2023/2022




Market Capitalization



Segment Revenue ($ million) EBITDA ($ million)

JBS USA Beef $5,953 $103

JBS US Pork $2,027 $209

Pilgrim’s Pride Corp. $4,356 $450

SEARA $2,092 $116

JBS Brazil $2,959 $ 99

JBS Australia $1,575 $136

Others $ 141 $ (4)

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

Forward P/E 3.9 Beta 0.3

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

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

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


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


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


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


Perdue Introduces Chix Mix as a Promotional Initiative

In order to promote the Perdue policy of “no antibiotics ever” the Company created Chix Mix as a human snack. Perdue claims that the product is analogous to diets fed to chickens that is somewhat of a stretch, with an emphasis on the absence of antibiotics.  Chix Mix comprises corn, wheat puffs and edamame. 


The promotional endeavor is aimed at strengthening the image of Perdue as a producer of chickens raised without antibiotics.  The program is intended to differentiate Perdue from Tyson Foods that is now labeling product as “no antibiotics important to human medicine” a decidedly squirrely claim that will result in consumer confusion.


Tyson Continues Plant Closures

Tyson Foods will close further-processing plants in Jacksonville, FL. and Columbia, SC.  A spokesperson for the Company noted, “We are making the difficult decision to close two of our case-ready, value-added plants.”  The statement added, “We understand the impact of this decision and our team members and will make every effort to offer them opportunities to remain at other Tyson locations.”


The announcement by Tyson Foods follows decisions to close Van Buren, AR and Glen Allen, VA. poultry chicken processing facilities followed by a subsequent announcement to close plants in North Little Rock, AR., Corydon, IN. and Dexter, and Noel, MO.  An approximate ten percent reduction in head count was effected at the Wilkesboro, NC. complex as a result of decreased demand for chicken products.


The consolidation of facilities by Tyson required closure of a number of processing plants does not appear to be common to the industry and relates to the need of the Company to enhance return on investment and share price. Financial results for the fourth quarter and FY 2023 are reviewed in this edition


Litigation Over Sow Housing Continues

Triumph Foods has filed a lawsuit in Massachusetts Federal Court challenging Question #3 (Act To Prevent Cruelty To Farm Animals) that is scheduled for implementation in late August.  The ballot initiative paralleling California Proposition #12 was approved in 2016.  Triumph Foods is joined in their action by five major pork producers and a group of farmer associations. In May, the constitutionality of Proposition #12 was upheld by the Supreme Court.


Matt England, President and CEO of Triumph Foods, stated, “Discriminatory trade restrictions like Q3 and Prop.12 affect the ability to build resilient, reliable food supply chains across the United States.”  He added, “They also hurt many small businesses, employees, consumers and government-funded agencies.  Free and fair interstate commerce is vital for the economic prosperity of our country.”


Irrespective of the outcome of the specific case involving Q3 that will have implications for New England states, food distributers, supermarket chains and restaurant groups have committed to   sourcing pork from sows that are held under group housing in accordance with Proposition #12.


Wingstop to Repurchase Common Stock

Wingstop (WING) has embarked on an accelerated share repurchase agreement in conjunction with Morgan Stanley and Company.  The intent is to repurchase $125 million of common stock in accordance with a $250 million share repurchase program.


On July 1st Wingstop posted $451 million in total assets of which $135 million was represented by intangibles and goodwill.  Long-term debt increased to $711 million with the company accumulating a stockholder deficit of $365 million.


WING had a market capitalization of $5,050 million on August 2nd.  The 50-day moving average share price is $189 and WING trades with a forward P/E of 85.


On the basis of a same store sales growth of 16.8 percent for Q2 2023 an increase in gross margin to 26.3 percent and an operating margin of 24.0 percent, Benchmark upgraded WING citing “solid” results and setting a target of $200 compared to the August 7th close of $164. We shall see!


Commentary and results for Q2 can be retrieved by entering “wingstop” in the SEARCH block.


Detection of Necrotic Enteritis by Assay of Volatile Organic Compounds

Dr. Ravi Kulkarni of the Department of Population, Health and Pathobiology of the College of Veterinarian Medicine, North Carolina State University, recently concluded a USPOULTRY-funded research project on detection of necrotic enteritis.  The first component of the program involved reproduction of necrotic enteritis administering a specific pathogenic strain of Clostridium perfringens to create a dysbiosis-model.  Previously, reproduction of necrotic enteritis required the administration of sub-clinical doses of mixed species of Eimeria to reproduce intestinal coccidiosis, the natural precursor of the condition.


It was demonstrated that broiler chickens undergoing necrotic enteritis released volatile organic compounds that could be detected by gas chromatography in manure and air.  Trials showed that two amines were present at high concentration in manure from affected experimental birds compared to non-infected control subjects.


The initial results will have to be be validated with field trials to demonstrate that the presence of the two volatile amines serve as an early and specific indicator of the presence of the condition in flocks.


The practical significance of this research has yet to be determined since NE can be readily diagnosed on gross and histopathologic lesions


New Chicken Menu Items

Wingstop has announced the introduction of the Cajun Meal Deal comprising either a cook-to-order chicken sandwich, boneless or classic wings or tenders, all featuring Cajun seasoning.  The meal deal will be available at $8.99 in participating stores and can be ordered on the Wingstop app or on Wingstop.com.


O’Charley’s restaurant is offering “Tacos and Tenders” as an August college football promotion on Thursdays and Saturdays in store.  Menus include a $7 tender and fries, comprising hand-breaded chicken tenders with a range of seasonings.  O’Charley’s will also offer chicken tender platters to-go comprising 36 pieces for $42, either as a takeout or delivered.


California Processer Ordered to Pay Back Wages

A federal court has ordered the owners of a LaPuente, CA., processor to reimburse workers for withheld overtime wages amounting to $1 million.


The court action follows an investigation by the U.S. Department of Labor, Wage and Hour Division.  The entity, TL Foods and affiliates, Express Poultry Services, Inc. and K. P. Poultry violated the Fair Labor Standards Act over a five-year period extending from 2015 to 2020.  Department of Labor Regional Solicitor, Marc Pilotin, stated, “For years the employers in this case attempted to hide their wage violations.”  He added, “We will continue to use every legal tool available to protect the rights of vulnerable workers under federal law.”


USDA Initiates Residue Assays to Verify Antibiotic-Free Label Claims

Following a previous June announcement that the FSIS would sample product from beef labeled “raised without antibiotics”.  The Agricultural Research Service is investigating sampling protocols and assays.


Liver and kidney samples will be collected from cattle and be analyzed for up to 150 compounds incorporating all classes of antibiotics.  The program will apply to all “raised without antibiotics” claims including “no antibiotics”; “no antibiotics ever”; “antibiotic free” and other iterations on labels.


The initial round of sampling will provide data that can guide extensive programs of monitoring intended to prevent misbranded product from entering the market.  FSIS anticipates that companies receiving notice of antibiotic detection will then initiate investigations to ascertain how contamination occurred and to implement corrective action to maintain the relevant label claim.


Continued Opposition to JBS IPO

Sixteen organizations including Green Peace, Oxfam, Rainforest Action Network, among others are urging investors not to support the proposed listing of JBS S.A. on the New York Stock Exchange.


Opponents point to the proposed dual-class structure of shareholding that will perpetuate control of the company by the Batista family to the disadvantage of minority shareholders.  Activists’ organizations would have no leverage on issues including environmental depredation, human rights and sustainability.


The IPO would restructure world holdings of JBS and would effectively encompass Pilgrim’s Pride Corp., and the beef and pork operations of JBS S.A. in the U.S.


AgriStats Requests Confidentiality in DOJ Litigation

In July, U.S. District Judge Thomas Durkin dismissed claims against AgriStats, Inc. in the Broiler Chicken Antitrust lawsuit.  Subsequently in September, the Department of Justice filed a complaint against the company alleging anticompetitive exchange of information through “distribution of competitively sensitive information relating to price, cost and output among broiler, pork and turkey integrators to the detriment of customers and consumers”.


On October 6th AgriStats filed a motion to have all documentation submitted in the civil action sealed since release of confidential information could be prejudicial to subscribers. AgriStats pointed to the disclosure of some information in the complaint filed with the Federal Court as justifying the need to impose a seal to maintain confidentiality.


The motion was opposed by the DOJ. On review the Court declined to impose a seal citing the Amended Antitrust Civil Process Act allowing the DOJ to release materials.



Broiler Integrators Settle in Alleged Price-Fixing Litigation

House of Raeford Farms and Koch Foods recently settled with the direct purchasers’ class in litigation alleging price fixing.  The two companies paid $28 million and $48 million respectively, bringing the total payments by the broiler industry to $285 million.  As with all other defendants, the two companies denied wrongdoing and settled to avoid possible adverse judgements in jury trials together with the inevitable high legal costs involved in defense.


The settlements will have to be approved by Judge Thomas Durkin of the United States District Court for the Northern District of Illinois.  This is regarded as a formality given his approval of previous settlements between the direct purchase plaintiffs and numerous integrators.


Stephens Analyst Increases Earning Estimates for Chicken Companies

Benjamin Bienvenu an analyst with Stephens has raised earnings estimates for both Tyson Foods, Inc. and Pilgrim’s Pride Corporation based on an anticipation of increased margins over FY 2023 and the first quarter of FY 2024.


With respect to Tyson Foods, both the chicken and pork segments will improve but the profitability of beef is questionable.


Bienvenu expects the EPS of Pilgrim’s Pride to increase from $2.20 to $2.30 based on “improving chicken fundamentals”.  With respect to Tyson Foods, the earnings estimate for FY 2023 will increase from $1.21 to $1.27.


Seaboard to Erect Sow Farms

Seaboard Corporation has announced that it will erect two farms each comprising two barns to rear 2,500 gilts.  The 7-acre facilities will be built east of Bucklin in Ford County, KS. following approval granted by the County Commission.


Manure will be contained in pits under slated floors and will be applied to agricultural land seasonally in accordance with state requirements.


Seaboard did not disclose whether the new facilities were for future expansion or to replace existing obsolete or contractor housing.


Perdue Farms and Cornucopia Institute Agree Over Pasture-Raised Claim

There is considerable confusion among consumers as to the terms “free-roaming”, “pasture-grown”, “pasture-fed”, “pasture raised” and “free-range”. Accordingly Perdue Farms, Inc. filed a petition with the USDA-FSIS in March requiring the Agency to define and differentiate between “free range” and “pasture-raised” management systems.  Perdue proposed that “pasture-raised” should require chickens to spend at least the majority of their lives physically on pasture, defined as land covered in the majority with rooted-in-soil vegetation. 


Kestral Burcham, representing the Cornucopia Institute, supported the Perdue petition noting, “Cornucopia concurs that FSIS should amend its interpretation of “free-range” raised chickens as defined in its current guideline document and to remove “pasture-raised” from the list of claims synonymous with “Free-Range”.  Cornucopia is in agreement with Perdue Foods that “pasture-raised” claim should be separate from all other descriptors used for housing systems and should conform to clearly defined standards.


Smithfield Foods Evaluating Public Offering

Smithfield Foods, a wholly owned subsidiary of the WH Group is investigating the feasibility of being re-listed according to the Wall Street Journal.


The WH Group acquired Smithfield in 2013 for $4.7 billion and was accordingly de-listed.  Recently, the company initiated a program of consolidation closing hog farms in the mid-west and a plant in Charlotte, NC.



Since acquisition of Smithfield, the company has engendered adverse publicity due to corporate ownership by a company based in China.  It is possible that the intended re-listing of Smithfield may have the objective of diminishing scrutiny and criticism by politicians and welfare advocates by attempting to re-establish image as a U.S. company.


Department of Labor Raid on Gerber’s Poultry

According to press reports, the Department of Labor raided the Kidron, OH plant operated by Gerber’s Poultry during the night shift on October 4th.  Agents interviewed all workers and required identification, nation of origin, proof of status to work in the United States and the source of their documents.  It is understood that approximately 25 minors were at work in the plant in either processing or sanitation.


The Company subsequently issued a statement indicating their intent to cooperate with the investigation and to comply with federal regulations to verify eligibility for employment.  The company undertook to review relationships with third party vendors to ascertain compliance with federal labor laws.


Federal law disallows employment of any person under the age of 18 in a meat processing facility. Authorities are also investigating allegations of servitude with the minors forced to work in the plant by agents of traffickers based in Guatemala.


The fact that minors were apparently employed in a meat processing facility in early October suggests a willful lack of concern for compliance with federal and state laws.  After disclosures relating to Packer’s Sanitation Services, Inc. the circular letter from the Secretary of Agriculture and the penalties imposed on processors for employing underage workers, it is difficult to understand how any plant HR function could have failed to purge its headcount of ineligible workers.  The expedient of using third party contractors to provide services such as cleaning should be no excuse for contravention of federal laws. Apart from moral responsibility, Companies contravening child-labor, food safety, environmental or welfare laws are exposed to publicity with resulting degradation of brand image extending to loss of major customers.


Texas Enacts Plant-Based Labeling Law

Following other states, Texas has enacted a law requiring clear and unambiguous labeling of plant-based alternatives to real meat products. The recently enacted Texas law was intended to “address the issue of unclear labeling on products that look and taste similar to traditional animal-derived products.”


The Texas law is based on political expediency and serves as an example of “feel good” legislation designed to appease ranchers and organizations representing the red meat industry.  When challenged, labeling laws that discriminate against plant-based protein have been ruled unconstitutional based on First Amendment rights.


In support of the bill, the Texas Farm Bureau and Texas Cattle Feeders cited a 2020 survey of 1,200 consumers suggesting that 20 percent of those purchasing a plant-based product felt “misled by the label noting that they had thought the product contained real meat”.


A review of products in coolers and on supermarket shelves leaves no question as to the composition of available plant-based products and the claims of confusion among consumers are essentially spurious.


The Texas law will be challenged and as with similar state legislation will probably be ruled unconstitutional.


California Processors Sanctioned

The U.S. Department of Labor has obtained injunctions against three interconnected poultry businesses in California.  Following investigations by the Department of Labor, Wage and Hour Division, three companies with joint ownership were shown to have employed minors and committed wage theft by failing to pay overtime.  In addition, the companies concerned intimidated and retaliated against workers and falsified documents.


Companies were owned and operated by Tony Brand and partners, operating as Exclusive Poultry Inc., Valtierra Poultry LLC., and Meza Poultry LLC.


During recent months, the Department of Labor has been active in investigating red meat and poultry processors for infractions of child labor laws, withholding overtime wages and other violations of federal law.


Aviagen Hatch Symposium

Aviagen recently presented the first Annual Hatch Symposium in Huntsville, AL. attracting producers, academia and technical personnel.


Billy Hufford, Vice President of North America Commercial Business, noted, “Hatchability plays a pivotal role in our customers’ economic success and their ability to sustainably nourish the world with a reliable source of protein.”  He added, “This symposium reflects Aviagen’s strong commitment to breeding success together with our valued customers.”


Topics considered included: -

  • Nutrition of breeding flocks.
  • Optimization of fertility.
  • Coordinating aspects of flock management.


U.S. Trade Representative Intervenes Over Import Ban by Colombia

On June 3rd, the Government of Colombia issued a temporary worldwide prohibition on poultry imports based on HPAI. Shortly thereafter, the U.S. was excluded from the prohibition based on a regionalization agreement that has operated since 2012.


In mid-August, the Government of Colombia noted that it would initiate a risk assessment on U.S. control programs although extending a temporary waiver through November 8th.


The U.S. Trade Representative noted that intervention to enforce existing agreements would be undertaken.


Sanderson Farms Receives Favorable Verdict on Antitrust Allegation

On October 25th, a federal jury determined unanimously that Sanderson Farms did not participate in inter-industry collusion after a six-week trial.


Accusations related to the period 2008 through 2012, preceding the 2022 acquisition of Sanderson Farms by a consortium to form Wayne-Sanderson Farms.


Jeremy Kilburn, Chief Legal and Compliance Officer for Wayne-Sanderson Farms, stated, “The evidence presented over the last six weeks is clear, Sanderson Farms and the broiler industry did not conspire to produce less chicken.”


It is a matter of record that during the period during which the conspiracy was alleged to have occurred, Sanderson expanded by building a number of complexes and increased capacity of existing facilities.


Despite the fact that many competitors of Sanderson Farms settled with plaintiffs’ attorneys without admitting wrongdoing, for a total of $285 million, Sanderson dug in and prevailed.


The verdict serves as a vindication of the broiler industry with obvious implications that there was no collusion to either fix prices or to constrain production to the detriment of retailers and consumers.  The U. S. broiler industry operates according to a free-market system with intense competition.


JBS Subsidiary Initiates Production in Two New Facilities

The JBS Subsidiary, SEARA, has commenced production in two new further-processing facilities in Brazil.  The project is part of a $1.5 billion expansion to increase market share and contribute to company profit. The two plants have added 700 additional jobs in a company complex located in Rolandia in the state of Parana in southern Brazil. 


The breaded chicken plant has commenced operation and contributes to the one-third share of the domestic breaded chicken market in Brazil held by SEARA. The second facility produces sausages with improved quality and flavor. 


Given the extensive export market for whole birds and products, it is anticipated that breaded chicken and sausages will be added to consumption in the Middle East and other nations supplied by Brazil.


Perdue Farms Supports Chesapeake Bay Conservation

Perdue Farms has provided $300,000 for a project to support conservation in cooperation with the National Fish and Wildlife Foundation and the Alliance for the Chesapeake Bay.  The total initiative will be funded by a $1 million grant to reduce nutrient and sediment release.


Drew Getty, VP of Environmental Sustainability at Perdue Farms, stated, “At Perdue our responsibility as good environmental stewards includes partnering with various stakeholders to preserve and protect our natural resources.”  He added, “This partnership with the Alliance and the National Fish and Wildlife Foundation and together with our farm partners, is an example of collaboration to enhance the quality of the Chesapeake Bay Watershed.”  Approximately 80 Perdue contractors will receive technical and financial support under the initiative.


Improvements will include establishing environmental buffers, management of storm water and improving soil health. Specific concerns relating to broiler production include improved manure disposal and composting of routine broiler mortality.


LaBelle Expands Retail Distribution

According to news reports, LaBelle Patrimoine is now available in specialty grocery and supermarket stores in the mid-Atlantic and Northeast segments of the U.S.  The company located in Lancaster, PA. produces whole-bird and portion presentations. LaBelle uses air-chilling and chicks are derived from slow-growing broiler strains based on the French LaBelle Rouge.


LaBelle Patrimoine is a signatory to the Better Chicken Commitment and products are retailed at Whole Foods Market. This retailer recently named the company “Supplier of the Year for Quality and Innovation”.


Shane Commentary

Illogical Decision to Ban Breaking of Broiler Hatching Eggs

In 2018, the National Chicken Council petitioned for an exemption from the proposed FDA Final Rule on Salmonella to allow surplus broiler hatching eggs unsuitable for incubation to be broken and pasteurized in breaking plants under the jurisdiction of FSIS.


The problem arises from the FDA requirement concerning refrigeration within a short period after collection.  This is impractical with hatching eggs that cannot be refrigerated until graded at either the farm or hatchery.


The FDA denied the petition during 2/2023 five years after submission of the request on the basis that the waiver of storage under refrigeration would “not maintain the same level of public health protection as its own egg safety rule”.   Five months later, the Food Safety and Inspection Service also denied the petition submitted by the National Chicken Council.  This action was based on jurisdictional complications by which the Egg Products Inspection Act requires the USDA to maintain a program that “assures consumers that egg products are safe, wholesome, not adulterated and properly labeled”.


There is no safety issue involved!  Eggs will be subject to pasteurization that would destroy any bacteria that either penetrated the shell or were present in the egg irrespective of the duration of storage before or during refrigeration.  The broiler industry is effectively disposing of approximately 25,000 tons of edible liquid annually. This is based on a four percent recoverable reject rate, the production of 165 million broiler chicks per week with 80 percent hatchability and assuming 50g egg contents.   The National Chicken Council estimates the value of the loss at $25 million annually but based on a value of $0 75 per lb. The loss is nearer to $38 million annually.


Given the move to sustainability and concern by the USDA over resources, the wooden -headed and scientifically unjustified action by both the FDA and the USDA is typical of the bureaucratic orientation of both Agencies and their inability to make rational decisions.


In the face of institutional intransigence, the broiler industry will be denied fair value for a product and a source of food is wasted. This situation with divided jurisdiction calls for a single food safety agency staffed by competent scientists and rational =administrators working for a common purpose.



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