Monthly Broiler Production and Prices, September 25th 2023.

Broiler Chick Placements.

According to the September 20th 2023 USDA Broiler Hatchery Reports 1,182 million eggs were set over five weeks extending from August 19th through September 16th inclusive. This quantity was down approximately one percent compared to the corresponding period in 2023.

Total chick placements for the U.S. over the five-week period amounted to 937,067 chicks. Claimed hatchability for the period averaged 80.0 percent for eggs set three weeks earlier (79.4 percent for the preceding five-week period). Each 1.0 percent change in hatchability represents 1.88 million chicks placed per week and 1.78 million broilers processed with the current range of weekly settings.

Cumulative chick placements for the period January 7th 2023 through September 16th amounted to 6.93 billion chicks, less than one percent lower than the corresponding period in 2022.

According to the September 22nd 2023 edition of USDA Chickens and Eggs pullet breeder chicks hatched and presumably placed during August 2023 amounted to 8.24 million, up 7.3 percent (562,000 pullet chicks) from August 2022 and 277,000 pullet chicks or 3.3 percent less than the previous month of July 2023. Broiler breeder hen complement attained 63.63 million on August 1st 2023, 0.9 percent higher (585,000 hens) than on August 1st 2022.

Broiler Production

As documented in the September 22nd USDA Broiler Market News Report for the processing week ending September 16th 2023, 169.9 million broilers were processed at 6.49 lbs. live. This was 0.7 percent more than the 168.7 million broilers processed during the corresponding week in the previous month of August 2023 and 2.0 percent less than the 173.3 million processed during the corresponding week in September 2022. Broilers processed in 2023 to date amounted to 6.15 billion, 0.4 percent more than for the corresponding period in 2022.

Ready to cook (RTC) weight for the most recent week was 839.0 million lbs. (381,379 metric tons). This was 3.2 percent more than the 812.9 million lbs. processed during the corresponding week in August 2023 and 1.9 percent less than the 854.8 million lbs. during the corresponding week in September 2022. Dressing percentage was a nominal 76.0 percent. For 2023 to date RTC broiler production attained 29.68 million lbs. (13.49 million metric tons). This quantity is 0.5 percent more than the corresponding period in 2022.

Broiler Prices

The USDA National Composite Weighted Wholesale price on September 16th 2023 was up 6.6 cents per lb. or 5.9 percent compared to August 18th 2023 at 116.6 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

Monthly Turkey Production and Prices, September 24th 2023

Poult Production and Placement:

The September 14th 2023 edition of the USDA Turkey Hatchery Report, issued monthly, documented 26.77 million eggs in incubators on September 1st 2023 compared to 27.51 million eggs on September 1st 2022* The September 2023 set was down 2.7 percent (738,000 eggs) from September 2022 and 438,000 eggs (1.6 percent) lower than the previous month of August 2023.

A total of 23.87 million poults were hatched during August 2023 down 53,000 poults (0.2 percent) compared to 23.92 million in August 2022*. The August 2023 hatch was up 1.24 million poults (5.5 percent) from the previous month of July 2023.

A total of 22.83 million poults were placed on farms in the U.S. in August 2023, compared to 22.78 million in August 2022*. The August 2023 placement was 0.2 percent, (51,000 poults) more than the month of August 2022. This data confirms disposal of 1,040,000 poults during the month. Approximately 4.3 percent of the August 2023 hatch was not placed.

For the twelve-month period September 2022 through August 2023 inclusive, 274.1 million poults were hatched and 255.6 million were placed. This confirms disposal of 18.5 million poults over the 12-month period, corresponding to 6.7 percent of all poults hatched.

* USDA revision from previous monthly report.

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

OVERVIEW

Total exports of bone-in broiler parts and feet during January-July 2023 attained 2,138,567 metric tons, 2.3 percent less than for January-July 2022 (2,183,954 metric tons). Total value of broiler exports declined by 8.5 percent to $2,773 million ($3,029 million).

Total export volume of turkey products during January-July 2023 attained 110,585 metric tons, 2.1 percent less than in January-July 2022 (112,978 metric tons). Total value of turkey exports declined by 8.6 percent to $333.0 million ($371.8 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 2000 onwards have 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.

EXPORT VOLUMES AND PRICES FOR BROILER MEAT

During January-July 2023 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 2,150,628 metric tons of chicken parts and other forms (whole and prepared) down 2.4 percent from the first seven months of 2022. Exports were valued at $2,814 million with a weighted average unit value of $1,309 per metric ton.

The NCC breakdown of chicken exports for January-July 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) 5%; Unit value $1,244 per metric ton ($1,344)
• Prepared chicken 0%; Unit value $4,376 per metric ton ($3,768)
• Whole chicken 5%; Unit value $1,644 per metric ton ($1,429)
• Composite Total 0%; Av. value $1,309 per metric ton ($1,397)

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

Updated USDA-ERS Poultry Meat Projection for September 2023.

On September 18th 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.

Broiler RTC production for 2022 was unchanged in the July 2023 report at 46,206 million lbs. RTC (21.003 million metric tons.). Per capita consumption in 2022 was 98.9 lbs. (45.0 kg.). Exports represented 15.8 percent of RTC production in 2022 attaining 7,278 million lbs. (3.308 million metric tons) comprising RTC leg quarters, other products and feet.

The 2023 projection for broiler production is 46,694 million lbs. (21.225 million metric tons) up 1.1 percent from 2022. USDA projects per capita consumption of 100.1 lbs. (45.5 kg.), up 1.2 percent from 2022. Exports will attain 7,253 million lbs. (3.297 million metric tons), 0.5 percent below the previous year.

The 2024 USDA forecast for production will be 47,310 million lbs. (21.504 million metric tons) up 1.3 percent from 2023 with per capita consumption up 0.5 percent to 101.6 lbs. (46.2 kg). Exports will be 2.4 percent higher than 2023 to 7,430 million lbs. (3.377 million metric tons) equivalent to 15.8 percent of production.

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

Source: Livestock, Dairy and Poultry Outlook released September 18th 2023

Turkey production for 2022 was 5,222 million lbs. (2.377 million metric tons) RTC. The July 2023 projection for per capita consumption was up 4.1 percent from 2022 to 15.2 lbs. (7.1 kg.), responding to extensive promotions and introduction of further-processed items. Export volume for 2022 was 407 million lbs. (0.185 million metric tons).

The September USDA projection for the turkey industry in 2023 included annual production of 5,578 million lbs. (2.535 million metric tons), up 6.8 percent from 2022 with consumption of 15.5 lbs. (7.1 kg.) per capita, up 4.1 percent from the previous year. Export volume will increase by 8.1 percent in 2023 to 440 million lbs. (200,000 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 5,650 million lbs. (2.568 million metric tons) up 1.3 percent from 2023 with per capita consumption up 0.6 percent to 15.6 lbs. (7.8 kg). Exports will be 4.5 percent higher than in 2023 to 460 million lbs. (209,000 metric tons) equivalent to 8.1 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 July 2022, exports to China during the first seven months of 2023 were 24.4 percent lower in volume to 277,969 metric tons and 30.2 percent lower in value to $460 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.

In a release dated August 31st Hormel Foods (HRL) reported on the third quarter of fiscal 2023 ending July 30th 2023, disappointing on both the top and bottom lines.  For the quarter the company earned a reported $162.7 million on revenue of $2,963 million (consensus of $3,100 million) with a diluted EPS of $0.30.  Comparable values for Q3 of fiscal 2022 ending July 31st were net income of $218.9 million on revenue of $3,034 million with a diluted EPS of $0.40.

Compared to Q3 of FY 2022 sales declined by 2.3 percent, gross margin increased from 16.6 percent to 16.8 percent; operating margin was down from 9.6 percent to 7.3 percent. Profit margin fell from 7.2 percent to 5.5 percent for the most recent quarter.

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.

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

• Retail Segment volume +0.8%:  sales -1.7%: segment profit -7.3%.
• Food Service Segment volume +2.1%: sales -2.9%: segment profit +13.6%.
• International Segment volume 10.4%: sales -6.0%: segment profit -50%

In commenting on Hormel results Jim Snee, Chairman, president and CEO stated “Our third quarter results reflect the strength of our leading brands, the value of our balanced business model and our team's commitment to improving our performance," He added "In an increasingly dynamic and competitive environment, we grew volume across all our segments, delivered adjusted net earnings per share in line with last year and made further progress addressing the near-term challenges impacting the business. This progress included reducing inventory, building momentum in the Planters® snack nuts business and driving adjusted operating margin improvement compared to last year."

Snee concluded, “Our Foodservice segment delivered another quarter of strong bottom-line growth, and the Retail segment delivered margins ahead of our expectations. Earnings growth from our U.S. businesses in aggregate was more than offset by significantly weaker-than-expected results in our International segment, supply chain disruption caused by a third-party logistics provider shutdown and an adverse arbitration ruling."

The company guided lower with a negative 4.0 percent to neutral decline in net sales growth compared to FY2022 and full year diluted net earnings per share to attain $1.51 to $1.57, down over a range of 11 to 14 percent.

Hormel Foods posted total assets of $13,427 million on July 30th 2023 of which $6,722 comprised goodwill and intangibles. Long-term debt was $2,524 against an intraday market capitalization of $21,080 million on September 1st. HRL has traded over the past 52 weeks in a range of $37.79 to $49.73 with a 50-day moving average of $40.04.  HRL trades with a forward P/E of 21.5. HRL closed at $39.08 on August 30th pre-release. The share price closed at $38.50 on Thursday August 31st

The 12-month trailing operating margin is 9.8 percent with a profit margin of 7.6 percent. The Company has returned 5.7 percent on assets and 12.2 percent on equity.

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

Environmental activist groups including the Rainforest Action Network filed complaints with the U.S. Securities and Exchange Commission concerning the proposed listing of JBS S.A. on the New York Stock Exchange.  A spokesperson for the activist group noted, “We request the FCC conduct a thorough investigation into the pattern of alarming and unacceptable corporate conduct by JBS before granting an IPO.”  Mighty Earth a second opponent of the IPO has challenged the validity of the climate impact component of the prospectus.

JBS previously attempted an IPO in 2018.  This was shelved following a scandal in which controlling shareholders Wesley and Josey Batista were accused of insider trading amid revelations of widescale corruption.  Recently the Batista brothers were cleared of wrongdoing removing a potential obstacle to an IPO.

JBS S.A. has extensive investments in the U.S. in pork and beef packing. Involvement in chicken comprises a majority shareholding in Pilgrim’s Pride Corporation.

In response to negative publicity, JBS commented, “We are confident our dual listing proposal will create opportunities for our company, team members and shared communities and all stakeholders.”  The spokesperson added, “The proposal accelerates our efforts to enhance corporate governance and transparency through adherence to SEC standards with the formation of a majority independent board.” 

Environmentalist may not be the only opponents to the proposed IPO.  It is anticipated that unions will file an objection given questionable labor practices during the COVID period and based on their growing militancy expressed as opposition to the Kroger-Albertsons transaction.

According to a release by Mountaire Farms, former CEO Dave Pogge passed on August 26th at the age of 72 years. A native of Iowa he graduated from his state university in 1973. He joined Cargill Inc. and rose through senior positions in the broiler operation over a 16-year tenure.

He was appointed as president and CEO of Mountaire Farms in June 1989 at a time of financial stress for the Company that at the time comprised only the Selbyville, DE complex.  While serving as CEO through his retirement in December 2012, Mountaire expanded with the acquisition of the Piedmont Poultry, Lumber Bridge complex in 1996 and the Millsboro complex in 2000 complemented by establishing breeder supply flocks and a feed mill in North Carolina.

The emergence of H7N6 highly pathogenic avian influenza virus has reduced the availability of broiler products, reflected in rapidly escalating prices to consumers.  The effect of flock depletion will become apparent at the end of the current broiler cycle with prospects for lower availability and high prices extending into the pre-Christmas period that represents a seasonal peak in demand.  Losses have occurred among breeder flocks as well as on grow-out farms.  It is anticipated that South Africa will be forced to adopt vaccination as a preventive measure using products available in the E.U. and subsequently, locally manufactured vaccines.

The second problem facing broiler producers is the inadequate and inconsistent supply of power due to incompetence, corruption, lack of planning, investment and failure to maintain coal-fired plants and the national grid, Brown-outs are a continuing reality and producers are obliged to operate diesel-powered generators for farms and hatcheries and are unable to maintain regular plant operation schedules. Similar problems occur regionally with adequate supplies of potable water.

South Africa imposed antidumping duties of up to 260 percent for bone-in chicken that could have been supplied by Brazil in addition to duties imposed on leg quarters that would otherwise be supplied from the U.S.  The Government of South Africa has also used avian influenza as a barrier against importation to protect the local industry, notwithstanding that the infection has been endemic in the nation for a number of years. Domestic requirements could have been  satisfied by major exporters following World Organization of Animal Health guidelines on trade.

Labor is a further restraint to efficient and profitable production with militant unions demanding high wages and benefits and imposing ‘featherbedding’ Labor when available is generally untrained and unreliable.

The South African Poultry Association is in large measure responsible for the current problem as a result of combination greed in myopia.  It’s apparently adopting an optimistic outlook maintaining that it will have adequate supplies of chicken to meet December demand for both eggs and broiler meat.

Over the first seven months of 2023 South Africa ranked 16th among importers received 30,994 metric tons of leg quarters from the U.S., down 21.5 percent from the corresponding first seven months of 2022.  Total revenue declined to $29.9 million down 20.7 percent from January-July 2022. During July 2023 South Africa did not rank among the top 20 importers.

South Africa anticipates a 0.5 percent growth in GDP during 2023, has a claimed unemployment rate of 33 percent, a budget balance of -5.7 percent and an exchange rate of SA Rand19.2 to US$1, a deterioration of 11 percent over 12 months.

Holmes Foods, located in Nixon, TX. was fined $60,000 by the Occupational Safety and Health Administration (OSHA) for a variety of contraventions.  An inspection on March 15th as part of the Regional Emphasis Program for Poultry Processing Facilities disclosed discrepancies with respect to a lock-out on machinery and guards over rotating shafts and chains, all representing ergonomic hazards.

The significance of this OSHA action relates to increased scrutiny by the Agency emphasizing the need for plant operators to eliminate workplace hazards.  Audits on both farms and plants frequently reveal the potential for trips and slips, exposure to electrical and chemical hazards and failure to reinstall protective covers over machinery following maintenance or repair.  A random OSHA audit will disclose any defects present that may result in fines.  An injury of a worker will elicit a more aggressive response by OSHA.

Analysts at T. D. Cowen have downgraded Beyond Meat to underperform based on declining sales, continuing losses and the need to acquire additional capital to survive.

CHICK-NEWS reviewed the Q2 results for BYND that can be retrieved by entering Beyond Meat in the SEARCH block.  U. S. retail revenue was down 38.5 percent year-over-year and international was down 15.6 percent.  The U. S. Food Service Revenue was lower by 45.4 percent. This is consistent with the fact that most QSRs that have trialed Beyond patties have terminated purchase based on consumer rejection related to price and quality relative to real meat.

Cowen notes that Beyond will have “difficulty in attaining a path to sustainability”.  Given an 18 percent projected sales decline for Fiscal 2023, sales will only attain $330 million and operating expenses will be in the region of $220 million.  In Q2, Beyond Meat posted a loss of $53 million and the company accumulated $1.1 billion in debt.

Despite optimistic pronouncements from management the financial state of Beyond Meat is precarious. At the end of the second quarter of FY 2023 critical values were:-

• An accumulated deficit of $856,651 million.
• Trailing 12-month negative operating cash flow of $197 million
• Effective July 14th 36.2 percent of float was short
• Share price off 64.3 percent over past 12 months
• Institutional holdings declined from 63 percent to 37 percent over past two quarters

Japan has embargoed importation from the state of Mato Grosso do Sul in Brazil. This action followed reports of highly pathogenic avian influenza in migratory birds and backyard flocks.

In May and June, Japan halted imports from other states in Brazil following localized outbreaks of avian influenza that did not affect commercial flocks.  Bans were lifted after 28 days.

Although Japan has experienced a number of outbreaks of highly pathogenic avian influenza introduced by migratory waterfowl, there is concern over possible importation of novel strains of avian influenza.  According to statements by health officials, Japan is taking action not only to protect domestic flocks that are in any event exposed to migratory waterfowl, but also to reduce the possibility of an emergence of an exotic zoonotic strain.

Representatives Randy Feenstra (R-IA) and Elissa Slotkin (D-MI) have introduced the Livestock Consolidation Research Act.  This would require the Economic Research Service of the USDA to undertake a study of the beef, dairy, pork and poultry industries.  Rep. Slotkin is especially concerned over the disruption of production in the red meat sector during the COVID emergency when production was curtailed by absenteeism in large plants.

The proposed ERS study would concentrate on consolidation that is evident in red meat with the “big four” responsible for 80 percent of processing of pork and beef.  In contrast, the broiler industry, although an oligopoly, has at least 50 integrators with their breeder and grow-out contractors provided with a high level of income security and technical support.

Following representations by Rep. Raja Krishnamoorthi (D-IL) responding to complaints from constituents, the Environmental Protection Agency will investigate reports of odors associated with a Smithfield Foods plant in St. Charles, IL.  Rep. Krishnamoorthi addressed a letter to the EPA on August 18th noting the urgency of the issue and requesting feedback.  On September 12th, three weeks later, the Agency stated that it would commence an investigation but was unable to share any findings if and when available.

The St. Charles facility processes pork into sausages and salamis and is not a primary packing plant.  Smithfield Foods claims to have invested $350,000 in odor neutralization and has embarked on a program of upgrading wastewater installations using professional consultants.  The question arises as to whether action taken by Smithfield has resolved issues responsible for complaints that were raised over a month ago.

USDA-FAS GAIN report KS2023-0014 released on September 7th, quantified poultry meat production and consumption in South Korea. For 2023, domestic production will attain 930,000 metric tons.  Approximately 75 percent of this total will comprise conventional broilers harvested at 1.6 kg. live weight.  The second category comprises a domestic hybrid comprising a cross between a white-feathered broiler and an egg-producing, brown-feathered strain grown to 0.85 kg. and accounting for 17 percent of production. The remainder will be derived from indigenous chickens consumed at the subsistence level.

South Korea will import 225,000 metric tons of poultry meat principally as bone-in products but will export 60,000 metric tons of poultry meat resulting in a net import volume of 165,000 metric tons in 2023 representing 15.3 percent of consumption.  Assuming a population of 52 million with consumption of 1,080,000 metric tons, per capita consumption is estimated at 20.7 kg. (45.7 lbs.).

Currently, Brazil supplies 75 percent of imported chicken with Thailand 20 percent, China 3 percent and the U.S. 2 percent.  Outbreaks of HPAI in the U.S. during 2015 and then subsequently in 2022 impacted exports together with “unresolved trade policy issues”.

Drumsticks were stated to represent 81 percent of imports.

The price comparison incorporated in the report suggests a wide differential between domestic retail and CIF prices.  The retail price for domestic legs is $2.62/lb.  By comparison, imported prices for legs from four supplying nations comprise, U.S. $0.78, Brazil $0.99 (deboned?), Denmark $0.96 and Thailand $1.11.

Given the magnitude of imports and domination of supply by Brazil, the USAPEEC and USDA should apply commensurate effort to resolve outstanding issues relating to trade policy and contrived ineligibility as a result of HPAI.

A cooperative project compared the rate of in-vitro breakdown among available soybean-based protein ingredients. The study was conducted jointly by scientists with Hamlet Protein and colleagues at Aarhus University in Denmark. Hydrolysis was measured by determining the k-value indicating the rate of degradation of amino acids. 

The study compared Hamlet Protein, comprising a high quality soybean meal subjected to enzymatic treatment, with three soy protein concentrates, two extruded soy products and two fermented soybean meal products. Hydrolysis was measured in-vitro in an aqueous suspension adjusted to pH 8.0 at 39 C in the presence of an enzyme solution.

The rate of hydrolysis over a 120-minute period was determined as a measure of protein degradation.  The rate was numerically higher in the Hamlet Protein sample subjected to enzymatic treatment compared to an untreated, selected, high-quality soybean meal.  Statistically significant inferior rates of degradation were recorded for the three soy-protein samples and the two fermented soybean meals that were evaluated.  There was a statistically significant difference between the two extruded soybean meal samples, one of which was inferior to both the Hamlet Protein sample and the high-quality soybean meal.

The initial evaluation that was performed in-vitro suggests that enzymatic treatment, as used in the patented Hamlet Protein process, would enhance digestion and absorption. Hamlet Protein will conduct live bird studies to confirm earlier trials demonstrating an advantage in early feed conversion and growth rate when a proportion of Hamlet Protein displaces conventional soybean meal in starter diets for chicks and poults.

* Bible, M. R. et al In-vitro evaluation of protein kinetics of soy-based ingredients. Proceedings of the 2023 Poultry Science Association.

Tyson Foods has partnered with Gatik AI to introduce a fleet of refrigerated box trucks that will shuttle among plants in northwest Arkansas.  The program is based on an 18-hour per day operation with box trucks transferring packaged products from plants to distribution centers and storage facilities in the Rogers and Springdale AR. region.  Each autonomous vehicle is equipped with a 26-foot temperature-controlled body specially designed to convey frozen items over short distances.  During the initial stage of implementation, safety drivers will be present in cabs. 

Patrick Simmons, VP of transportation for Tyson Foods stated, “Our partnership with Gatik allows us to strategically place our drivers where they are needed most while all will still reliably and safely transport protein from plants distribution centers.

Gatik has considerable experience in autonomous short distance transport focusing on short-haul business-to-business cooperation with major companies. Founded in 2017 by veterans of the emerging autonomous vehicle industry, the company has earned a number of prestigious awards for innovation.  Currently Gatik vehicles operate in two states in the U.S. and in the province of Ontario, Canada.

According to a September 14th SEC filing, Stewart Glendinning currently president of Prepared Foods at Tyson Foods Inc. has resigned.  He was appointed to his current position in October previously serving for a five-year term as the CFO of the company.  Prior to joining Tyson Foods in December 2017 Glendinning was president and CEO of Molson Coors International.  He has also gained extensive industry experience with KPMG and the Hackett Group.

In a company statement, Tyson Foods acknowledged the contribution of Glendinning as CFO and more recently as president of Prepared Foods.

The question arises as to the apparent fluid structure among the executive ranks at Tyson Foods.  A number of high-level appointments and resignations and retirements have occurred during the past two years including a short-term CEO.  Either the company is executing a predetermined strategy for long-term profitability or there are problems relating to reporting relationships, organizational jurisdiction, and culture.  The fact that Glendinning was displaced from his position as CFO, possibly the second most important position in the company, to be replaced by the nephew of the Chairman raises some questions among observers especially given that Glendinning resigned within a year of assuming his position as president of Prepared Foods.

JBS has appointed Jason Weller to the position of Global Chief Sustainability Officer to implement ESG.  The company has establish a commitment to achieve net zero energy requirement by 2040.  JBS Worldwide has made strides in advancing sustainability on four continents including Scope 1 and 2 emission reduction projects requiring a capital investment of $123 million to date.  This has facilitated a 45 percent use of renewable electrical power.

In announcing the appointment, Gilberto Tomazoni, Global CEO for JBS stated, “Food insecurity is a significant issue around the world and the need to produce more while considering accessibility and curbing climate change is more important than ever before.”

In commenting on his appointment, Weller noted, “Our team at JBS is focused on making our own operations better everyday working with our farmer and rancher partners to improve practices and building partnerships to identify and unlock progress.”

A lawsuit initiated by convicted fraudster Cody Easterday against Tyson Foods was recently dismissed by Judge Stanley A. Bastian, of the U.S. District Court for the Eastern District of Washington State.  Easterday is currently serving an eleven-year sentence for fraud. His imprisonment relates to false claims amounting to $244 million for non-existent cattle purported to have been raised by Easterday Ranches. All claims against Tyson Foods were settled when his company entered bankruptcy.  Easterday had claimed that he was owed $163 million for the period 2010 through 2020 when he raised cattle to be packed by Tyson in their Pasco, WA.  plant.

Conagra Brands has recalled 123 tons of Banquet brand frozen chicken strips due to possible contamination with plastic material.  The product was processed at a Marshall, MO. plant (EST. P-9) on either June 20th, July 11th or 17th.

In a separate case, the Hillshire Farms subsidiary of Tyson Foods has recalled eight tons of smoked sausage comprising blended beef and chicken meat containing bone fragments.  In this case, the recall was confined to a relatively small quantity of product since the batch processed on June 14th at EST. 756A was restricted to one shift.

Purdue University College of Agriculture recently conducted surveys to determine consumer preferences for real beef compared to plant-based and cell-cultured alternatives. Considering  organoleptic attributes, including appearance, freshness, naturalness, price and farmer well-being, consumers rated natural beef as superior to alternatives.  Of those surveyed, 71 percent rated beef as ‘much better’ or ‘somewhat better’ compared to plant-based alternatives. Similarly 73 percent considered beef from cattle as more preferable to cell-cultured product.

Simple surveys frequently provide unreliable results.  To gauge consumer sentiment, it is necessary to conduct a conjoint analysis, allowing responders to select from among alternatives with tangible attributes including price, quality and non-quantifiable aspects including welfare.  Tradeoffs motivating purchase would provide a more realistic measure of acceptability among alternatives to traditionally grown and processed meat.

According to research firm Circana representing the merger of IRI and NPD, volume sales and dollar value for plant-based alternatives to meat fell by 20 percent for the 52 weeks ending July 1st, 2023. This reality is reflected in the sales and volume data posted by Beyond Meat and for the Plant Protein segment of Maple Leaf Foods.

Factors mitigating against consumption include inferior organoleptic quality as perceived by consumers; higher price relative to real meat; restricted range of products available; complicated labels denoting the extent of processing including additives. Consumer curiosity drove sales after the initial introduction of products but peaked in 2020.  Sales were in part maintained during the COVID period by relative shortages and consequential high prices for pork and beef.  Since restoration of production, consumers have returned to traditional purchase patterns.

In an attempt to stimulate sales, the plant-based industry is promoting products emphasizing “health” although there is no scientific justification for these claims.  It is becoming apparent that the non-quantifiable welfare and sustainability attributes of plant-based meat substitutes are discounted by consumers especially when faced with large price differentials at check-out.

The customer base for plant-based meat substitutes will include vegetarians and a growing number of flexitarians but these demographics will be unable to move the needle. During 2022 beef sales attained $29.5 billion with ground beef representing 60 percent of the total. In contrast sales of all plant-based meat substitutes amounted to $1.4 billion At the end of the day plant alternatives represent an insignificant proportion of the total meat market with a sharp decline in sales volume and value in 2022 compared to the upward trajectory in pre-COVID years.

Nineteen students from Land-Grant universities in the U.S. and Harper Adams University in the U.K. completed nine-week internships from May 22nd to July 27th at Aviagen production facilities.  Students participated in aspects of poultry breeding including quality assurance, hatchery management, flock health and production planning.  Farms in Alabama, Tennessee and New York provided hands-on experience.

Amanda Williams, Senior Human Resources Business Partner for Aviagen stated, "To breed the best we need the best that’s why we value our up-and-coming poultry professionals and are committed to providing them with the skills and insight necessary for success in poultry".

The Kesler family, with 14 growing houses, has filed suit against Tyson Foods in Stoddard County, MO. as a result of the decision by the integrator to close the Dexter MO. plant.  As a result, the Kesler family has been deprived of income since they are located approximately 50 miles from the nearest complex that may or may not be in a position to extend a contract. The Kesler family claim that they expanded their operation and invested in new housing and equipment at the request of Tyson Foods.

The case will be an important test of relationships between integrators and contract growers.  In many areas with processing plants operated by different companies in close proximity, cancellation of a contract allows a contractor to affiliate with an alternative integrator.  In the case of the Dexter, MO. complex and others, especially new operations situated remotely in non-traditional broiler growing states, contractors are in a difficult position with respect to receiving chicks and growing flocks should contracts be terminated for other than justifiable cause.

At present contracts may extend from a single flock to a year or more but Federal guaranteed mortgages are usually for 15 years. This discrepancy has attracted the attention of the USDA in their attempt to “restructure” intensive livestock production favoring independent farmers and contractors.

Brady Stewart who joined Tyson Foods from a competitor in late 2022 as President of Fresh Meats has assumed the additional responsibility of rationalizing the company supply chain. In a concerted effort to increase efficiency and enhance profit, Tyson Foods is centralizing transportation, sourcing of products and logistics.

CFO, John R. Tyson, stated, “The creation of an enterprise Supply Chain Center advances our capabilities and enables the organization to drive data-focused decision making through the expanded use of digital tools.”  He added, “Our commitment to cost structure improvement is at the core of our supply chain management strategy and will be a competitive advantage for our company.”

A report on the Q3 financial results for Tyson Foods can be retrieved by entering “Tyson” in the SEARCH block.

For the U.S. (presumably Smithfield), the Packaged Meat Segment contributed $578million out of the total Segment operating profit of $1,068. The Pork Segment in the U.S. posted an operating loss of $495 million with total Segment loss of $409 million including positive operating profits from China ($42 million) and the E.U. ($44 million)

The 2023 National Safety Conference for the Poultry Industry co-sponsored by USPOULTRY and the Georgia Tech Research Institute provided updates on safety programs and stressing prevention.

The unfortunate accident at the Foundation Food Group plant on January 28th 2021 that claimed six lives in Gainesville, GA. highlighted dangers associated with liquid nitrogen.  Matt Spencer, Vice President of HR and Safety Programs with USPOULTRY, reviewed the EPA Risk Management Plan for cryogenic chemicals.  USPOULTRY offers the Accident Prevention and Response for Cryogenic Chemicals as a resource for processors.  Spencer advised on emergency planning in cooperation with first responders.

Boilers represent a potential hazard to workers.  Dr. David Schaller, Director of Safety and Policy at Darling Ingredients, reviewed safety measures including maintenance, operation and training of personnel.

The emphasis of the meeting was on prevention, planning for contingencies, developing emergency response plans and creating a work environment and culture focusing on safety.

Walmart is now offering home delivery for rotisserie chicken in both original and lemon pepper flavors. Orders can be placed on the Walmart App. or on Walmart.com.

Any promotional exercise relating to chicken benefits the industry. Walmart has a log way to go however to match the volume of iconic rotisserie bird served by Costco at a fixed and stable price.

The Humane League of the U.K. has filed a complaint with the Advertising Standards Authority over marketing of chicken.  The animal rights group has presented evidence that in one specific farm, chickens were mishandled during harvesting.

Lidl claims that broilers they source are “reared with care by British or Scottish farmers on a balanced diet in barns with natural daylight and bales”.  The Humane League considers this misleading.

The intent of the action together with accompanying adverse publicity, is intended to coerce Lidl, a prominent discount food retailer in the U. K., to subscribe to the Better Chicken Commitment.  This is a progressive up-ratcheting system of forcing welfare requirements on farmers without necessarily enhancing the wellbeing of flocks. This requires investment in facilities and resources increasing cost of production, ultimately born by consumers.  As with all extremist welfare organizations with a concealed vegan agenda, the Humane League is essentially creating a marketing environment in which they are spending consumers’ money.

Carina Ventures LLC a subsidiary of Burford Capital is pursuing litigation against turkey producers alleging a conspiracy to raise prices and engage in non-competitive activities.  A July 21st complaint filed with the U.S. District Court for the Southern District of Texas alleges that producers “fixed, raised, stabilized or maintained the prices of turkey sold in the United States beginning around 2008 and continuing at least until 2016”.  Carina Ventures represents Sysco a major food distributor.  Defendants include ten major turkey producers collectively responsible for 75 percent of production and AgriStats Inc.

The lawsuit implicates AgriStats and its subsidiary Express Markets Inc. as providing data that enabled turkey producers to manipulate prices.  Carina Ventures maintains that the data was only available through a subscription to AgriStats Inc.

The complaint also commented on practices in the turkey industry citing opportunities for producers to collude over factor such as vertical integration, barriers to entry for aspirant producers and the homogeneity of turkey products.

The lawsuit against the turkey integrators parallels similar allegations leveled against broiler producers including AgriStats Inc.as a co-defendant.  In early July, the major broiler integrators AgriStats and Rabobank were dismissed from similar claims alleging collusion to set prices.

Charley's Steakhouse of Orlando, FL. is serving a plant-based 6oz. ‘steak’ serving for $69, approximately 25 percent more than for an 8 oz. center-cut filet mignon.  The product is supplied by Chunk Foods, based in Israel, an innovator in textured plant-based meat alternatives.

Charley's, a subsidiary of Talk of the Town Restaurant Group has ordered 100,000 units from Chunk, through October with expansion to other brands in the chain including Texas Cattle Company and Vito's Chop House.  The company considers that the Chunk Foods plant-based steak option will serve as a "a center of the plate" vegan option especially for banquets and similar group functions.

In a strange and fortunately rare incident, a disaffected farm worker was arrested on allegations of animal cruelty and criminal mischief. It is alleged that he interfered with the water supply to 200,000 broilers on a contract farm growing for Pilgrim’s Pride Corporation.  A high temperature alarm alerted the farm owner to the situation, presumably because of a shutdown of water to evaporative cooling pads. On investigation it was determined that the water supply to all six houses had been deliberately shut off.  The worker concerned was also accused of sending threatening messages to the grower and the integrator.

A posting on Food Entrepreneur indicated that capital fund, Joyful Ventures, has raised $23 million to invest in sustainable protein and food technology.  Areas of concentration will include, plant-based foods, mycoproteins, molecular agriculture and fermentation offering sustainability.

Jennifer Stojkovic, co-founder and General Partner at Joyful Ventures stated, “The more we can invest in the future of food and support the development, production and distribution of sustainable, scalable proteins that out-compete animal-based products on cost, taste and convenience, the more likely our food system is to adopt it”. This is a predictable aspirational statement devoid of substance and ignoring the realities of alternatives to conventional protein foods. Joyful Ventures plans on investing in up to twenty early pre-seed and seed companies.  Apparently, the fund has invested in a West-coast cultivated meat company and a Canadian startup intending to produce cultured seafood.

It may well be that Joyful Ventures has come too late to the table.  The future of cell-cultured meat, poultry and fish is at best questionable, despite recent approval of two companies to produce chicken-like products.

A number of cell-cultured meat companies have already failed, have been absorbed by competitors or surviving on cash burn. It is questioned how far the $23 million fund can be divided among a projected twenty prospective companies with any prospect of generating a return for investors.

Chick-fil-A® will introduce a honey-pepper pimento chicken sandwich at restaurants nationwide commencing August 28th for a limited period.  The variation uses the basic Chick-fil-A® sandwich and incorporates a spread of pimento cheese and a drizzle of honey.  Pickles are replaced by jalapenos.

Chick-fil-A® has followed a policy of limiting menu offerings to increase efficiency and speed of service.  The introduction of the new sandwich reflects expansion of the chain into areas where demographics have different taste preferences.  The honey-pepper pimento chicken sandwich has been tested over the past three years in various locations in the Carolinas, although no decision has been made on permanent inclusion in the menu.

Two events in August point to the futility of attempting to restructure the U.S. meat-packing industry in pursuing an anti-corporate socialist agenda, promoting small-scale enterprises at taxpayer expense.

The Commissioners for the Alachua County in Florida have decided to cease negotiations regarding a proposed taxpayer-funded meat processing plant.  The project would have created 12 jobs and processed from 4 to 15 head of cattle per working day.  The project was supported by the Institute of Food and Agricultural Sciences of the University of Florida, and the Santa Fe College.  The proposed plant was supported by local ranchers but was opposed by residents of the county.  In June, Florida Governor, Ron DeSantis, vetoed state funding for the project. One of the obstacles to approval of the project was the reluctance of the County to improve road access.

In a separate news report, Naeve Family Beef in Camanche, IA. announced that their packing operations would cease operation after 130 years of service.  Their new plant that functioned under USDA-FSIS inspection was erected in 2022 at a cost of $12 million with a capacity to process up to 60 animals per day with 50 employees.

The current Administration has expended public funds on promoting and establishing small-scale meat processing as an alternative to the large facilities operated by the major four packers of beef and pork. The plants operated by the major packers benefit from economies of scale and integration of packing, marketing and distribution.  Attempts to restructure the existing beef and pork-packing industries by the USDA under Secretary, Tom Vilsack, was at the outset a quixotic endeavor fueled by anti-corporation sentiment and lacking any economic justification.

It is hoped that the USDA will be able to justify funds expended on small plants and that loans will be repaid with interest.  Experience gained from this exercise in government intervention into a free-market economy will serve as a guide for future administrations tempted to place their figurative, economic thumb on processing of red meat and poultry.