Editorial

The Curious Case of Disappearing Lab-Cultured Meat

Since both Upside Foods and Eat Just, Inc. are capable of producing their products only in laboratory-scale plastic roller bottles with manual fabrication, their cultured chicken was served only at a gourmet restaurant.  Bar Crenn in San Francisco has apparently ceased serving dishes incorporating cell-cultured chicken from Upside Foods. This is either due to non-availability or the evident satisfaction of curiosity among patrons.

 

Upside Foods claims that cell-cultured chicken will soon be promoted in various restaurants. As with previous promises to media and investors that have failed to materialize, the Company has declined to provide either venues or dates.

 

Cell-cultured meat and seafood will only come of age when it appears in supermarket display coolers, priced competitively with real meat, poultry and seafood that it intends to displace.  To achieve commercial scale, aspirant manufacturers will have to use large bioreactors. This has yet to be achieved. Numerous technical problems will have to be resolved before marketing cell-cultivated meat with organoleptic properties including taste, appearance and texture comparable to conventional meat and poultry.

 

Legislators in beef states, in concert with their counterparts in France and Italy are enacting laws to either impose restrictive labeling or to ban cell-cultured meat outright. In contrast provisional government approvals have been granted and public-sector support provided in some nations.  Legislation would appear to be premature given the technological and financial hurdles that have yet to be overcome. The beef and poultry industries should not be concerned over potential competition from cell-cultured products.

 

Those who should be worried are the venture capital investors who have committed millions in funding to start-ups and a few established companies with little prospect of a return. The promise of cell-cultured meat in commercial quantities is based on hype, deception and unrealistic projections of production capacity and consumer acceptance.  It is interesting to observe how the justification for cell-cultured products has shifted from livestock welfare to sustainability.  Life- cycle projections of the energy requirements suggest that cell-cultivated meat is inferior with respect to sustainability than conventional beef and poultry when all inputs are taken into account.

 

The entire sector has a whiff of Theranos about it that will only be dispelled through production of adequate quantities of acceptable products at a competitive price to real meat and poultry.

 

Poultry Industry News

STOP PRESS


FTC Blocks Kroger-Albertsons Merger

 

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


 

Monthly Turkey Production and Prices, February 26th 2024

Poult Production and Placement:

 

The February 14th 2024 edition of the USDA Turkey Hatchery Report, issued monthly, documented 24.98 million eggs in incubators on February 1st 2024 compared to 27.61 million eggs on February 1st 2023* The February 2024 set was down 9.5 percent (2.63 million eggs) from February 2023 and 34,000 eggs (0.1 percent) less than the previous month of January 2024.

 

A total of 21.63 million poults were hatched during January 2024 down 1.77 million poults (7.5 percent) compared to 23.40 million in January 2023*. The January 2024 hatch was down 38,000 poults (0.2 percent) from the previous month of December 2023.

 

A total of 19.93 million poults were placed on farms in the U.S. in January 2024, compared to 21.58 million in December 2023*. The January 2024 placement was 7.7 percent, (1.63 million poults) less than in January 2023. This data confirms disposal of 1.70 million poults during the month. Approximately 7.9 percent of the January 2024 hatch was not placed.

 

For the twelve-month period February 2023 through January 2024 inclusive, 269.27 million poults were hatched and 251.37 million were placed. This confirms disposal of 17.89 million poults over the 12-month period, corresponding to 6.6 percent of all poults hatched.

* USDA revision from previous monthly report.

 


 

Turkey Production:

 

The February 23rd 2024 edition of the Turkey Market News Reports documented the following provisional data for turkeys slaughtered under Federal inspection:-

  • For the processing week ending February 17th 2024, 1.609 million hens were processed at 16.5 lbs. live. This was 2.5 percent more than the 1.560 million hens processed during the corresponding week in January 2024 and 8.7 percent less than the 1.762 million processed during the corresponding week in January 2023. Hen slaughter year-to-date has attained 10.9 million, 6.4 percent less than for the corresponding period in 2023.

 

Ready to cook (RTC) weight for hens over the most recent week was 21.44 million lbs. (9,744 metric tons). This quantity was 4.6 percent more than the 20.50 million lbs. for corresponding week in January 2024 and 16.1 percent less than the 25.6 million lbs. during the corresponding week in February 2023. Dressing percentage was a nominal 80.5 percent. For 2024 to date RTC hen production attained 146.2 million lbs. (66,460 metric tons). This quantity is 13.4 percent less than for the corresponding period in 2023.

  • For the processing week ending February 17th 2024, 1.995 million toms were processed at 44.8 lbs. live. This was 5.7 percent more than the 1.887 million toms processed during the corresponding week in January 2024 and 7.9 percent more than the 1.849 million during the corresponding week in February 2023. Year-to-date 13.48 million toms have been processed, 1.3 percent less than for the corresponding period in 2023.

 

Ready to cook (RTC) weight for toms during the most recent week was 72.0 million lbs. (32,718 metric tons). This quantity was 2.7 percent more than the 70.1 million lbs. processed during the corresponding week in January 2024 and 9.1 percent more than the 66.0 million lbs. during the corresponding week in February 2023. Dressing percentage was a nominal 80.5 percent. For 2024 to date RTC tom production attained 489.6 million lbs. (225,587 metric tons). This quantity is 1.1 percent less than the corresponding period in 2022.


 


Monthly Broiler Production and Prices, February 26th 2024.

Broiler Chick Placements.

 

According to the February 21st 2024 USDA Broiler Hatchery Reports, 966.66 million eggs were set over five weeks extending from the week ending January 20th 2024 through February 17th 2024 inclusive. This quantity was higher by one percent compared to the corresponding period in 2023.

 

Total chick placements for the U.S. over the five-week period amounted to 927.85 million chicks. Claimed hatchability for the period averaged 79.5 percent for eggs set three weeks earlier, down from 79.8 percent for the preceding four-week period. Each 1.0 percent change in hatchability represents approximately 1.85 million chicks placed per week and 1.76 million broilers processed, assuming five percent culls and mortality with the current range of weekly settings.

 

Cumulative chick placements for the period January 7th through December 30th 2023 amounted to 9.67 billion chicks. For January 6th through February 17th 2024 chick placements attained 1.3 billion

 

According to the February 26th 2024 edition of USDA Chickens and Eggs pullet breeder chicks hatched and intended for U.S. placement during January 2024 amounted to 7.28 million, down 9.1 percent (226,000 pullet chicks) from January 2023 and 2.37 million pullet chicks or 24.5 percent less than the previous month of December 2023. Broiler breeder hen complement attained 61.2 million on February 1st  2024, 0.4 percent higher (300,000 hens) than on February 1st 2023.

Broiler Production

 

As documented in the February 23rd 2024 USDA Broiler Market News Reports for the processing week ending February 17th 2024, 164.2 million broilers were processed at 6.46 lbs. live. This was 4.8 percent less than the 172.8 million broilers processed during the corresponding week in the previous month of January 2024 and 1.9 percent less than the 167.4 million processed during the corresponding week in February 2023. Broilers processed in 2024 to date amounted to 1,123 million, 3.6 percent lower than for the corresponding period in 2023.

 

Ready to cook (RTC) weight for the most recent week was 806.1 million lbs. (366,399 metric tons).  This was 6.5 percent less than the 861.8 million lbs. processed during the corresponding week in January 2024 and 3.1 percent less than the 809.0 million lbs. during the corresponding week in February 2023. Dressing percentage was a nominal 76.0 percent. For 2024 to date RTC broiler production attained 5,543 million lbs. (2.52 million metric tons). This quantity was 1.8 percent less than the corresponding period in 2023.

 

Broiler Prices

 

The USDA National Composite Weighted Wholesale price compared over a four-week period was down 2.4 cents per lb. or 1.9 percent to 126.3 cents per lb. compared to the corresponding week in January 2024. 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


 


Meat Projection February 2024

Updated USDA-ERS Poultry Meat Projection for February 2024

 

On February 14th 2024 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2022 (actual), an updated projection for 2023 and a forecast for 2024.

 

The 2023 projection for broiler production is 46,383 million lbs. (21.083 million metric tons) up 0.4 percent from 2022 and less than a 0.1 percent downward adjustment from the January 2024 report. USDA projected per capita consumption of 99.4 lbs. (45.2 kg.) for 2023, down 0.1 percent from 2022. Exports will attain 7,265 million lbs. (3.302 million metric tons), 0.1 percent below the previous year.

 

The 2024 USDA forecast for broiler production will be 46,775 million lbs. (21.261 million metric tons) up 0.9 percent from 2023 with per capita consumption up 0.7 lb. to 100.1 lbs. (45.5 kg). Exports will be 0.6 percent lower than 2023 to 7,215 million lbs. (3.280 million metric tons) equivalent to 15.4 percent of production.

 

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

Parameter

2022

(actual)

2023

(projection)

Difference % 2022

to 2023

2024

(forecast)

Broilers

Production (million lbs.)

46,206

46,383

+0.4

46,775

Consumption (lbs. per capita)

98.9

99.4

+0.5

100.1

Exports (million lbs.)

7,290

7,265

 -0.3

7,215

Proportion of production (%)

15.8

15.7

-0.6

15.4

Turkeys

Production (million lbs.)

5,222

5,455

+4.5

5,395

Consumption (lbs. per capita)

14.6

14.8

+1.4

14.8

Exports (million lbs.)

407

 489

+20.2

515

Proportion of production (%)

 7.8

9.0

+15.3

9.6

Source: Livestock, Dairy and Poultry Outlook released February 14th 2024

 

The February USDA updated projection for the turkey industry in 2023 included annual production of 5,455 million lbs. (2.480 million metric tons), up 4.5 percent from 2022. Consumption in 2023 is projected at 14.8 lbs. (6.7 kg.) per capita, down 1.4 percent from the previous year. Export volume will increase by 20.1 percent in 2023 to 489 million lbs. (222,272 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 5,395 million lbs. (2.452 million metric tons) up 0.1 percent from 2023 with per capita consumption unchanged at 14.8 lbs. (6.7 kg). Exports will be 5.3 percent higher than in 2023 to 515 million lbs. (234,000 metric tons) equivalent to 9.6 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 2022, exports to China during 2023 were 34 percent lower in volume to 405,343 metric tons and 34 percent lower in value to $711 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.


 

Meat Exports 2023

U.S. Broiler and Turkey Exports, 2023.

 

OVERVIEW

 

Total exports of bone-in broiler parts and feet during 2023 attained 3,635,178 metric tons, 4.2 percent less than for 2022 (3,794,328 metric tons). Total value of broiler exports declined by 9.2 percent to $4,739 million ($5,217 million).

 

Total export volume of turkey products during 2023 attained 221,920 metric tons, 20.2 percent more than in 2022 (184,576 metric tons). Total value of turkey exports declined by 2.0 percent to $628 million ($641 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.

 

HPAI has emerged as a panornitic affecting the poultry meat industries of four continents with seasonal outbreaks. The distribution in the U.S. limits eligibility for export depending on restrictions imposed by importing nations

 

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 extending into 2024.


 


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

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

 

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

 

4th Quarters 2023 and 2022, Ending

December 31st 2023

December 25th

          2022

Difference (%)

Sales:

$4,528,302

$4,127,365

+9.7

Gross profit:

$321,047

$95,782

       +342.4

Operating income:             

$184,299

$(77,524)

+337.7

Pre-tax Income

Net Income*

            $156,628

            $134,211

$(129,786)

$(154,976)

+220.7

+186.6

Diluted earnings per share:

$0.57

$(0.66)

+186.4

Gross Margin (%)

7.1

2.3

+208.7

Operating Margin (%)

4.1

-3.8

+315.8

Profit Margin (%)

3.0

-1.9

+257.9

Long-term Debt and other liabilities:

$3,584,369

      $3,468,140

           +3.4 

12 Months Trailing:

 

 

 

           Return on Assets    (%)

2.3

 

 

           Return on Equity    (%)

1.1

 

 

           Operating Margin   (%)

4.7

 

 

           Profit Margin          (%)

0.2

 

 

Total Assets (approximately 21% intangibles)

$9,810,361

      $9,255,769

           +6.0

Intraday Market Capitalization July 28th

$6,840,000

 

          

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

 

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

 

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

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

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

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

 

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

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

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

 

Current Forward P/E 13  

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

 

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

 

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

 

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

 

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

 

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

 

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


 

Rising Prospect of Government Shutdown

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

 

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

 

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

 

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


 

Metapneumovirus Emerges in the U.S.

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

 

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

 

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

 

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

 

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


 

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

 

Avian Metapneumovirus – Diagnostic Labs that can test for aMPV

 

AviServe (Dr. Milos Markis)

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

ISU (Dr. Gazzar)

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

NVSL (Dr. Torchetti)

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

PDRC (Dr. Holly Sellars)

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

SDSU (Dr. Sunil Mor)

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

UMN (Drs. Porter & Voss)

In-house PCR & Elisa (C); VI

Veterinary Diagnostic Pathology (Drs. Hoerr & Clontz)

Necropsy; Histopathology; Sample Collection & Distribution

USDA ARS (Dr. Kapczynski)

PCR (A,B); VI

Whitbeck Lab

Bio-Chek Elisa (A,B)

PA-DLS (Drs. Niel & Lighty)

Necropsy; Histopathology; Sample Collection & Distribution

Purdue ADDL SIPAC (Dr. Grant Burcham)

Idexx Elisa (A,B,C)

University Delaware ADDL (Dr. Ladman)

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

Georgia Poultry Lab Network

RT-PCR, ELISA

 

 

 


Download the Presentation as a PDF file


 

Japan Reports H5N6 in Broiler Breeder Flock

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

 

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


 

Seaboard Corporation Reports on Butterball Subsidiary

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

 

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

 


 

Maple Leaf Foods Reports on Q4 and FY 2023

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

 

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS (conversion of CAN$1=US$0.74)

 

4th Quarter Ending December 31st.

2023

2022

Difference (%)

Sales:

$882,634

$877,286

+0.6

Gross profit:

$100,252

$74,425

+34.7

Operating income:

$24,663

$(608)

+4,156

Pre-tax Income

Net Income/ (Loss)1

$(6,451)

$(6,897)

$(21,875)

$(30,704)

+70.5

+77.5

Diluted earnings per share:

$(0.06)

$(0.25)

+76.0

Gross Margin (%)

11.3

8.5

+32.9

Operating Margin (%)

2.8

-0.1

+2,900

Profit Margin (%)

-0.8

-3.5

+122.9

Long-term Debt and lease obligations2:

$1,253,183

$1,373,368

-8.8

12 Months Trailing:

     

Return on Assets (%)

0.5

   

Return on Equity (%)

-7.9

   

Operating Margin (%)

2.8

   

Profit Margin (%)

-2.6

   

Total Assets

 Intangibles and goodwill as % of assets

$3,406,310

17.8

$3,287,717

18.9

+3.6

Market Capitalization February 22nd.

$2,820,000

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

 

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

 

Q4 2022 Meat Protein Segment:

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

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

 

Q4 2022 Plant Protein Segment:

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

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

 

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

Forward P/E 15.2 Beta 0.5

Market Close pre-release February 21st $19.11

Market Open post-release February 22nd $17.03

Insider shareholding 40.0%. Institutional shareholding 25.8%

 

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

 

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

 

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

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

 

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

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

 

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

 

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

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

 

USDA Informational Webinar on Contracting

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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


 

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

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

 

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

 

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

 

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

 

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


 

USDA to Implement “Contract Transparency” Program

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

 

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

 

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

 

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



 

JBS S.A. Delays NYSE Listing

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

 

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


 

Update on Production of Broilers in Mexico

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

 

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

 

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

 

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

 

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

 


 

Legislation Banning Cultured Meat Considered in France

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

 

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

 

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


 

Family of Duvan Perez File Lawsuit Against Mar-Jac

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

 

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


 

Government of China Mandating Less Production of Pork

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

 

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

 

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


 


 

Activist Petition for Referendum to Ban Animal Slaughter in Denver

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.


 

Cargill Commits to Preventing Deforestation in Supply Chain

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?


 

Cherokee Meat Company Receives $10 Million USDA Grant

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

 

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

 

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


 

Pure Prairie Poultry Expanding

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

 

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

 

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


 

Plaintiffs Will Request a Retrial Following Sanderson Farms Verdict

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

 

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

 

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


 

KFC Resumes Sale of Chicken Wraps

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


 

Türkiye to Restrict Transshipment from States With HPAI

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

 

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



 

Kemin Introduces KemTRACE™ Chromium Supplement

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

 

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

 

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


 

Definition of Free and Pasture Raised Under Review

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

 

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

 

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

 


 

West Liberty Foods Eliminating Production Positions in Iowa

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

 

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


 

Department of Labor Interviewing Workers in Mississippi Chicken Plants

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

 

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


 

Continued Opposition to Carbon Dioxide Pipelines

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

 

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

 

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

 

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

 

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


 

UFCWU Supports Kroger-Albertsons Merger

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

 

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

 

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

 

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

 

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


 

USAPEEC Establishes Mandarin Website

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

 

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


 

University of California, Davis Establishes Alternative Meat Center

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

 

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

 

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

 

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


 

Upside Foods Cancels Illinois Project

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

 

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

 

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

 

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


 

Theft of Rationed Chicken in Cuba by Plant Workers

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

 

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

 

 

Hall County, NE. Urging Environmental Compliance for JBS Plant

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

 

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

 

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

 

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

 


 

Cargill Settles on Violations of the Packers and Stockyards Act

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

 

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

Picture


 

Salmonella Reading Demonstrated to be Vertically Transmitted

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

 

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

 

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

 

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

 

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

 


 

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

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

 

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


 

Boehringer-Ingelheim Launches Vaxxilive® Cocci 3 Vaccine

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

 

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

 

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


 

Batista Brothers to Join Pilgrim’s Pride Board

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

 

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

 

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

 


 

Shane Commentary

Red Sea Disruption Highlights Ocean Transport of Live-Animals

For many decades, Australia ranked 7th among exporters of live cattle and sheep has supplied Indonesia and Middle East nations with up to half a million sheep and cattle annually valued at $100 million.  This has exposed animals to extreme stress and losses during ocean transport.  The only justification for this trade is the demand for local slaughter in importing mations.  Halal requirements could be met in producing nations with supervised processing as with poultry.

 

Attacks on merchant shipping in the Red Sea have highlighted the welfare problems associated with prolonged transport of live animals. Disruption in passage through the Bab al-Mandab Strait has stranded cargos. It is estimated that there are more than 100,000 ruminants currently on the water en route to Jordan, and other Middle-east nations.

 

On Monday February 5th The Government of Australia refused permission for the MV Bahija carrying 1,500 cattle and 15,000 sheep to re-commence a voyage after a previous departure on January 5th. The vessel returned to Australia and will now have to unload the animal cargo into quarantine after 30 days at sea.

 

Although Australia has imposed a code of practice regarding export a number of incidents involving suspension due to unacceptable handling and slaughter have occurred. These include Saudi Arabia in 2003 and 2005, Indonesia in 2012  and Egypt in 2013.

 

Intercontinental shipment of ruminants is an anachronism and is unnecessary given that refrigerated transport of mutton and beef is an acceptable alternative.  The Government of Australia could be forced to end large-scale ocean shipments of live animals given the growing antagonism towards this aspect of agricultural trade, especially over extended distances.  Voyages in excess of 30 days necessitated by circumnavigating Africa from Australia to the Middle East are unacceptable given the difficulty of feeding and watering large ruminants and to allow exercise and an environment conducive to survival. 

 

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