Over the past two years, Tyson Foods has donated $5 million to Feeding America®.  Tyson has committed to providing this public service nonprofit with an additional $2.5 million for food banks.  In honor of Hunger Action Month®, Tyson Foods will donate 2.5 million lbs. of protein to provide 10 million meals to be delivered to communities with obvious food insecurity.

Tim Grailer, Senior Director of Social Impact at Tyson Foods, stated, “At a time when millions of people across America face hunger, we are proud to continue our partnership with Feeding America® to help provide families and communities with access to nutritious, quality foods.”

Since 2020, Tyson Foods has donated 41 million lbs. of protein to the network of food banks and partner agencies of Feeding America®.

In addition to cash and protein donations, Tyson Foods responds to weather and other emergencies, distributing protein and setting up kitchens to provide first responders and victims of disasters such as floods, fires, hurricanes and tornadoes.

Verisk Analytics subsidiary Cargo Net has reported that 566 cargo theft incidents occurred in the U.S. in 2022, a 57 percent year-over-year increase.  The value of goods stolen exceeded $44 million in the second quarter of 2023 and shipments varied in value from $100,00 to $260,000.

The states of California, Texas, Florida and Illinois were most affected.

CHICK-NEWS has previously reported on misappropriation and theft of loaded trailers directly from Midwest pork and beef plants.  Recently a ring was arrested in Florida responsible for a number of cases. 

Theft of over 20 tons of meat products suggests organization to distribute a large quantity of perishable products through retail outlets and ultimately to consumers.  Disposing of poultry and meat is infinitely more complicated than clothing and electronics that find their way to warehouses for subsequent sale on legitimate online businesses.

Hormel Foods Corp has activated a solar array at a Jennie-O turkey store plant in Montevideo, MN.  The eight-acre project will generate 3.2 million kWatt hours over a year.  It will supply ten percent of the plant power requirement.  The Company claims that the installation will reduce greenhouse gas emission by 2,265 metric tons of carbon dioxide equivalents annually.

Funding through the USDA Food Distribution Program for Indian Reservations will support small and mid-size bison herd managers to deliver product to tribal communities.  Encouraging local purchase will reduce transportation costs and improve market opportunities for tribal and local bison operations.  Partners in the pilot project include the Cheyenne River Sioux Tribe, the Standing Rock Sioux Tribe and the Lower Brule Sioux Tribe.  These entities will cooperate with Dakota Pure Bison Inc.

USDA Agricultural Marketing Services has awarded bison contracts to five tribal groups and will enhance procurement and distribution of bison products.

USDA reports having issued $260 million to approximately 300 processors since initiation of a program “to strengthen the nation’s food supply chain”.  A second round of funding amounting to $5.6 million was completed with 14 of the original recipients obtaining additional support.

Grants allowed processors in numerous states to upgrade facilities to qualify for federal inspection, expansion in production capacity, installation of processing equipment and implementation of HACCP systems.

At some time in the future USDA will have to account for use of public funds by documenting the financial success of recipients, job creation and other quantifiable benefits.

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

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

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

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

Activist group, Pro-Animal Denver, has petitioned the City of Denver to place a referendum before voters in 2024 to ban slaughterhouses within city limits.  Other organizations have attempted the same objective with voters rejecting the proposition. The question arises as to whether the petitioner is pro-animal or effectively pro-vegan, attempting to superimpose their lifestyle on consumers.

Pro-Animal Denver is specifically targeting Superior Farms that processes lambs with a 70-year history of operation both in Denver, CO and Dixon, CA.

Senator Deb Fischer (R-NE) has reintroduced the Real Marketing of Edible Artificials Truthfully Act, colloquially referred to as the Real MEAT Act.  The purpose of the intended legislation is to clearly define beef and pork for the purposes of labeling and to require the term “imitation” on packaging of alternative products.

This is a classic case of ‘feel-good” legislation pandering to a specific constituency and gaining financial support from the National Cattlemen’s Beef Association and similar organizations.  The justification for the legislation according to Senator Fischer is to avoid confusion among consumers.  There is no evidence that consumers, irrespective of their level of literacy, cannot distinguish between plant-based meat substitutes and animal-derived meat.  If avoiding confusion is the major justification, perhaps the proposed legislation should go beyond labeling and enforce separation of real meat and substitutes at point of sale. 

 When subjected to legal challenges, most of the state-enacted labeling laws have been declared unconstitutional.  With so many major fiscal and social issues facing Congress, the Real MEAT Act would appear to be Congressional theatre rather than productive legislation. The need for legislation to enforce labeling is probably moot given the declining sales of meat substitutes based on high price and inferior quality compared to real meat.

The Peak 2024 Exhibition organized by the Midwest Poultry Federation will take place at the Minneapolis Convention Center from April 17-19, 2024.  The event will include the comprehensive trade exhibition, educational programs, social interaction and networking.  Registration and hotel reservations will open on December 6th.

For further information access info@midwestpoultry.com.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In 2016, approximately 125 national restaurant chains signed on to the Better Chicken Commitment (BCC).  The initiative was established by animal welfare advocacy groups including the Humane Society of the United States supported by kindred organizations The promoters of the BCC are totally opposed to all forms of livestock production and advocate a vegan agenda.

Adoption of the BCC requires an extended growing period, inferior feed conversion, effectively higher mortality and diminished efficiency and use of resources.  The BCC imposes higher costs on restaurants, food service companies and ultimately on consumers.

Driven by economic factors and facilitated by advances in genetic selection matched by improved nutrition and flock health, the U.S. broiler industry is among the most advanced in the world.  Adoption of the Better Chicken Commitment would be a retrograde step and the failure of signatories to the 2016 pledges to follow through confirms that the system has little support from price-conscious consumers and those prioritizing sustainability.

The National Chicken Council correctly maintains that, “If consumers are truly interested and willing to pay for chicken that was raised according to the Better Chicken Commitment standards, they should be afforded the option.”

The same could be said for cage-free eggs.  The same organizations promoting the BCC coerced retailers into agreeing to transition to cage-free product by 2025.  At the present time, only one-third of U.S. eggs are derived from other than conventional cages with no likelihood of attaining a total cage-free goal.  Consumers in states that have mandated sale of only cage-free eggs following HSUS motivated ballot initiatives are now paying what is referred to as the “Pacelle Tax” with higher prices than states that allow free choice among housing systems.

The National Chicken Council and the United Egg Producers have clearly documented standards for all aspects of housing and production developed by panels of scientists with expertise in the fields of welfare, health and management and enforced by rigorous auditing.  The Better Chicken Commitment has had its opportunity to reform broiler production, but consumer sentiment, economics, practicality and reality have limited adoption. The same can be said for the recent slowing in transition to alternatives to conventional cages that offer advantages in price and sustainability