Monthly Broiler Production and Prices, March 24th 2023.

Chick Placements.

According to the March 15th USDA Broiler Hatchery Reports 963.82 million eggs were set over four weeks extending from February 18th 2023 through March 11th 2023.

Total placements for the U.S. over the four-week period amounted to 746.49 million chicks. Claimed hatchability for the period averaged 79.3 percent for eggs set three weeks earlier (79.8 percent for the preceding four-week period). Each 1.0 percent change in hatchability represents 1.86 million chicks placed per week with the current range of weekly settings.

Cumulative chick placements for the period January 7th 2023 through March 11th amounted to 1.87 billion chicks, approximately one percent higher than the corresponding period in 2022.

Low chick placement during 2021 and the first quarter of 2022 was attributed to setting a proportion of hatching eggs with depressed fertility that were derived from high-yield breed combinations selected by some integrators. Additional breeder flocks were placed to compensate for reduced fertility and their contribution is reflected in broilers harvested during the third quarter of 2022 onwards.

According to the March 23rd 2023 edition of USDA Chickens and Eggs pullet breeder chicks placed during February 2023 amounted to 8.25 million down 3.0 percent (251,000 pullet chicks) from February 2022 and 238,000 pullet chicks or 3.0 percent lower than the previous month of January 2023. Broiler breeder hen complement attained 64.9 million on March 1st 2023, 3.7 percent higher (2.3 million hens) than on March 1st 2022.

Broiler Production

According to the March 24th USDA Broiler Market News Report for the processing week ending March 18th 2023, 164.3 million broilers were processed at 6.35 lbs. live. This was 1.8 percent less than the 167.4 million broilers processed during the corresponding week in the previous month of February 2023 and 0.4 percent more than the 163.6 million processed during the corresponding week in February 2022. Broilers processed in 2023 to date amounted to 1.83 billion, 1.2 percent more than for the corresponding period in 2022.

Ready to cook (RTC) weight for the most recent week was 792.8 million lbs. (360,388 metric tons). This was 2.0 percent less than the 809.0 million lbs. processed during the corresponding week in February 2023 and 0.9 percent more than the 785.9 million lbs. during the corresponding week in February 2022. Dressing percentage was a nominal 76.0 percent. For 2023 to date RTC broiler production attained 8.86 million lbs. (4.02 million metric tons). This quantity is 1.4 percent more than the corresponding period in 2022.

Broiler Prices

The USDA National Composite Weighted Wholesale price on March 24th 2023 was up 10.0 cents per lb. or 8.2 percent compared to February 24th 2023 at 131.9 cents per lb. The attached USDA figures denote three-year average prices for whole birds and breasts.

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

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

* most probable value

The USDA posted live-weight data for the past week ending March 24th and YTD 2023 were:-

During the week ending March 18th 2023 broilers for QSR and food service (live, 3.6 lb. to 4.3 lb.) represented 16 percent of processed volume compared to 15 percent during the corresponding week in February 2023.

On March 20th 2023 cold storage holdings of processed poultry other than chicken at selected centers amounted to 78,889 lbs. 3.5 percent more than the inventory of 76,212 lbs. on March 1st 2023.

According to the March 23rd 2023 USDA Cold Storage Report, issued monthly, stocks as of February 28th 2023 compared to February 28th 2022 showed differences with respect to the following categories:-

• Total Chicken category attained 863.3 million lbs. (392,426 metric tons) corresponding to approximately 1.1 weeks production based on February 2023 weekly RTC output. The February 28th 2023 inventory was up 9.9 percent compared to 785.7 million lbs. (357,117 metric tons) on February 28th 2022
• LegQuarters were down by 31.6 percent to 65.4 million lbs. compared to February 28th 2022 consistent with the data on exports. Inventory was down 8.8 percent from January 31st Given the trend in inventory of leg quarters it is evident that this category continues to be shipped in varying quantities as the principal (97 percent) chicken export product to a number of nations but with proportionately limited quantities of this category to China.
• The Breasts and Breast Meat category was up 40.7 percent from February 28th 2022 to 245.1 million lbs. indicating a reduced level of domestic consumer demand from retail influenced by inflation. February 28th 2023 stocks were 1.3 percent higher than on January 31st 2023 suggesting static retail and food service demand for this category including promotion of chicken sandwiches by QSRs.
• Total inventory of dark meat (drumsticks, leg quarters, legs and thighs) declined 22.6 percent from February 28th 2022 to 139.8 million lbs. representing a decrease of 40.91 million lbs. There is an evident increase in domestic demand for dark meat at the expense of breast meat that concurrently increased in inventory by 70.91 million lbs.
• Wings showed a 9.8 percent decrease from February 28th 2022, contributing to a stock of 61.0 million lbs. This category was 7.2 percent lower than January 31st The decrease in stock is attributed to higher seasonal sales associated with Super Bowl consumption. Fluctuation in stock during the past year denotes lower demand attributed to “wing fatigue” in addition to competition from “boneless wings.” Increased consumption traditionally associated with significant sports events reduced volume in storage earlier in 2023 hence the progressive increase in unit price during February and March.
• Paws and Feet inventory was 4.6 percent lower than on February 28th 2022 to 32.0 million lbs. but inventory was 7.0 percent higher than January 31st Prior to the April 2020 Phase 1 Trade Agreement approximately half of the shipments of paws and feet destined for Hong Kong were landed and transshipped to the Mainland. Data released by the USAPEEC confirmed that during 2022, a total of 483,538 metric tons of paws and feet representing 77.7 percent of broiler exports to China were valued at $931 million with a unit price of $1,925 per metric ton.
• It is noted that the Other category comprising 366.4 million lbs. was up 16.9 percent from February 2022 and represented a significant 42.4 percent of inventory on February 28th The high proportion in the Other category suggests further classification or re-allocation by USDA to the designated major categories.

February 2023 Production

The USDA Poultry Slaughter Report released on March 24th covering February 2023 comprised 20 working week days. The following values were documented for the month:-

• A total of 730.1 million broilers were processed, up 2.2 percent from February 2022;
• Total live weight was 4.74 million lbs., up 2.8 percent from February 2022;
• Unit live weight was 6.49 lbs., up 0.6 percent from February 2022.
• RTC attained 3,581 million lbs., up 2.8 percent from February 2022.
• WOG yield was 75.6 percent compared to 75.6 percent in February 2022.
• The proportion marketed as chilled in February 2023 comprised 94.1 percent of RTC output.
• Ante-mortem condemnation as a proportion of live weight attained 0.20 percent during February 2023 compared to 0.22 percent in February 2022.
• Post-mortem condemnations as a proportion of processed mass corresponded to 0.52 percent during February 2023 compared to 0.51 percent in February 2022.

Comments

For 2022 exports of broiler parts and feet combined attained a volume of 3,792,380 metric tons (3,624,657 metric tons in 2021) with a value of $5,218 million ($4,460 million in 2021). Unit value increased 11.9 percent from 2021 to $1,376 per metric ton (including feet) from $1,230.

Mexico has recognized the OIE principle of regionalization after intensive negotiations between SENASICA and U.S. counterpart, the USDA-APHIS assisted by USAPEEC. Provided importing nations adhere to OIE guidelines on regionalization, localized outbreaks of avian influenza and Newcastle disease will affect exports from states with outbreaks in commercial flocks. The response of China and some other nations is more predictable with bans on a statewide basis. as of the present only county-wide bans have been imposed. The response by China to outbreaks is influenced more by self-interest than considerations of scientific fact or international trade obligations. Other importing nations have confined restrictions to counties following the WOAH principle of regionalization.

Collectively our NAFTA/USMCA neighbors imported broiler products to the value of $869 million during 2018, $901 million in 2019, $864 million in 2020 and $1,175 million in 2021. For 2022 broiler export value attained $1,256 million.

For 2023, USDA projects RTC broiler production to be 46,700 million lbs. with a per capita consumption of 100.2 lbs. Exports amounting to 7,315 million lbs. will represent 15.6 percent of production.

Effective mid-March 2023 total losses due to HPAI amounted to 3.0 million broilers on 18 farms in seven states. A total of 330,000 broiler breeders were depopulated on eleven farms in six states.

Monthly Turkey Production and Prices, March 29th 2023

Poult Production and Placement:

The March 15th 2023 edition of the USDA Turkey Hatchery Report, issued monthly, documented 26.521 million eggs in incubators on March 1st 2023 compared to 27.193 million eggs on March 1st 2022* The March 2023 set was down 2.4 percent (672,800 eggs) from March 2022 and 1.09 million eggs (3.9 percent) lower than the previous month of February 2023.

A total of 22.01 million poults were hatched during February 2023 up 764,000 poults (3.6 percent) compared to 21.25 million in February 2022*. The February 2023 hatch was down 1.39 million poults (5.9 percent) from the previous month of January 2023.

A total of 20,092 million poults were placed on farms in the U.S. in February 2023, compared to 19.40 million in February 2022*. The February 2023 placement was 3.6 percent, (692,000 poults) more than the month of February 2022. This data confirms disposal of 1.92 million poults during the month. Approximately 8.7 percent of the February 2023 hatch was not placed.

For the twelve-month period March 2022 through February 2023 inclusive, 273.95 million poults were hatched and 255.05 million were placed. This confirms disposal of 18.94 million poults over the 12-month period, corresponding to 6.9 percent of all poults hatched.

* USDA revision from previous monthly report.

Turkey Production:

The March 24th edition of the Turkey Market News Reports documented the following provisional data for turkeys slaughtered under Federal inspection:-

• For the processing week ending March 18th 2023, 1.718 million hens were processed at 17.8 lbs. live. This was 2.5 percent less than the 1.762 million hens processed during the corresponding week in February 2023 but 4.7 percent more than the 1.641 million processed during the corresponding week in March 2022. Hen slaughter year-to-date has attained 18.43 million, 7.8 percent more than for the corresponding period in 2022.

Ready to cook (RTC) weight for hens over the most recent week was 24.6 million lbs. (11,252 metric tons). This quantity was 3.9 percent less than the corresponding week in February 2023 but 13.9 percent more than the 21.6 million lbs. during the corresponding week in March 2022. Dressing percentage was a nominal 80.5 percent. For 2023 to date hen production attained 265.7 million lbs. (120,788 metric tons). This quantity is 11.7 percent more than for the corresponding period in 2022.

• For the processing week ending March 18th 2023, 1.780 million toms were processed at 44.5 lbs. live. This was 3.7 percent less than the 1.849 million toms processed during the corresponding week in February 2023 and 25.2 percent less than the 2.379 million during the corresponding week in March 2022. Year-to-date 21.5 million toms have been slaughtered, 9.0 percent less than for the corresponding period in 2022.

Ready to cook (RTC) weight for toms during the most recent week was 63.76 million lbs. (28,984 metric tons). This quantity was 3.4 percent less than the corresponding week in February 2023 and 24.9 percent less than the 84.9 million lbs. during the corresponding week in March 2022. Dressing percentage was a nominal 80.5 percent. For 2023 to date tom production attained 768.9 million lbs. (349,489 metric tons). This quantity is 9.6 percent less than the corresponding period in 2022.

The National average frozen hen price for conventional birds during the week ending March 24th was 172 cents per lb., unchanged from the corresponding week in February 2023 and up approximately 50 cents per lb. from the three-year average of approximately 125 cents per lb. The following prices rounded to nearest cent were documented in the new format report for domestic and export trading on March 24th 2022:-

Inventories:

On March 20th 2023 cold storage holdings at selected centers amounted to 66,745 lbs., 1.8 percent more than the inventory of 65,545 lbs. on March 1st 2023.

The March 24th 2022 edition of the USDA Cold Storage Report issued monthly, documented a total turkey stock of 322.3 million lbs. (146,499 metric tons) on February 28th 2023, equivalent to 3.4 weeks of normal seasonal production and up 10.0 percent compared to the inventory on February 28th 2022. The February 28th 2023 value was 11.4 percent above the January 31st 2023 level. This change is consistent with season.

• The Whole Turkey category of 160.2 million lbs. representing 49.7 percent of total storage of 322.3 million lbs. on February 28th 2023 was 22.1 percent higher than the adjusted inventory for the previous month and 5.0 percent higher than on February 28th
• Tom carcasses in storage increased by 3.9 percent from February 28th 2022 to 100.8 million lbs. on February 28th Tom carcasses increased 26.8 percent during February 2023 compared to the previous month of January 2023.
• Hen carcasses in storage decreased by 4.8 percent from February 28th 2022 to 59.4 million lbs. on February 28th Hen carcasses increased 14.5 percent during February 2023 compared to the previous month of January 2023.
• Breasts in storage increased 49.4 percent from February 28th 2022 to 54.7 million lbs. on February 28th 2023 and up by 21.7 percent from the previous month of January 2023.
• The “Other” and “Unclassified” categories collectively amounted to 96.1 million lbs. or 29.8 percent of inventory on February 28th The magnitude of these two non-specified categories suggests that the USDA should attempt to classify product more accurately as to specific product.

February 2023 Production

According to the USDA Poultry Slaughter Report released on March 25th 2023 covering, February 2023, comprising 20 working weekdays:-

• During February 2023, 15.8 million young turkeys were processed. (0.4 percent more than in February 2022);
• Total live weight in February 2023 attained 519.1 million lbs. (1.5 percent less than in February 2022);
• Average live weight in February 2023 was 32.8 lbs. (1.9 percent more than February 2022);
• RTC attained 415.4 million lbs. (down 1.1 percent from February 2022) with a yield of 80.0 percent.
• The proportion of frozen product in February 2023 attained 38.7 percent of total RTC produced.
• During February 2023 ante-mortem condemnation attained 0.31 percent of live weight, (0.35 percent in February 2022).
• During February 2023, 1.13 percent of RTC weight was condemned (1.23 percent in February 2022)

Comments:

The seasonal increase in February 2023 inventory is evident.

More turkeys were slaughtered in February 2023 compared to 2022 but with a marked shift to hens.

Export data for turkey products during January 2023 and provisional production and consumption data for 2023 are posted in this edition.

U.S. exports of turkey products in 2022 attained 184,837 metric tons, down 25.6 percent from 2021 (248,369 metric tons). Value decreased 3.6 percent to $642 million ($666 million in 2021). Unit price increased 29.5 percent from 2021 to $3,473 per ton.

As of mid-March 2023 losses of turkeys depleted as a result of HPAI attained approximately 9.8 million birds on 230 farms in seven states. This volume is equivalent to a 2.5 week combined hen and tom production to date that has averaged 4.0 million per week.

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

OVERVIEW

Total exports of bone-in broiler parts and feet during January 2023 attained 313,629 metric tons, 9.8 percent more than in January 2022 (285,591 metric tons). Total value of broiler exports declined by 0.3 percent to $374.6 million ($375.6 million).

Total export volume of turkey products during January 2023 attained 12,098 metric tons, 26.6 percent less than in January 2022 (16,471 metric tons Jan. 2021). Total value of turkey exports declined by 27.6 percent to $42 million (55 million Jan. 2021).

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 to date, unit value of leg quarters increased consistent with international demand but with a decline in January 2023 compared to the previous month. 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.

The outbreaks of African swine fever in China and Southeast Asia from early 2019 onwards coupled with disruptions in chicken production and logistics thereafter due to COVID restrictions, increased demand for protein with international repercussions on trade in chicken and pork. The demand for pork imports to China has diminished as hog production is restored and mild overproduction is evident in the white-feathered broiler sector with implications for exports other than feet during 2033.

EXPORT VOLUMES AND PRICES FOR BROILER MEAT

During January 2023 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 315,435 metric tons of chicken parts and other forms (whole and prepared) valued at $5,381 million with a weighted average unit value of $1,208 per metric ton,.

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

• Chicken parts                          97.7%; Unit value  $1,149 per metric ton  ($1,279)
• Prepared chicken                      1.8%; Unit value  $4,183 per metric ton  ($3,528)
• Whole chicken                          0.5%; Unit value  $1,621 per metric ton  ($965) 

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports in January 2023 compared to January 2022:-

             COMPARISON OF U.S. CHICKEN EXPORTS JANUARY 2022 AND 2023

BROILER EXPORTS

Total broiler parts, predominantly leg quarters but including feet, exported during January 2023 as compared with January 2022 increased by 9.8 percent in volume but declined 0.3 percent in value. Unit value was 9.2 percent lower at $1,196 per metric ton.

Broiler imports in 2022 were projected to attain 80,200 metric tons (176 million lbs.) falling to 72,000 metric tons (160 million lbs.) in 2023.

The top five importers of broiler meat represented 52.9 percent of shipments during January 2023. The top ten importers comprised 68.5 percent of the total volume reflecting concentration among the significant importing nations.

During January 2023 exports of all broiler products to first-ranked (by value) China were 21.2 percent lower by volume to 40,427 metric tons and 30.7 percent lower by value at $66 million compared to January 2022. Volume and value of exports to China represented 12.9 percent and 17.5 percent respectively with an average unit price of $1,620 per metric ton. The average unit price for all exports to China in 2022 was $1,747 per ton compared with $1,376 per ton for all exports, but excluding China, $1,397 per ton, demonstrating the weighting of feet on export value.

According to USDA statistics during 2022 feet accounted for 77.7 percent of volume at 483,538 metric tons, valued at $931 million with a unit price of $1,925 per metric ton. Other broiler products exported to China during 2022 included legs and leg quarters at 17.0 percent of volume with a unit price of $901 per ton. Due to HPAI restrictions monthly volumes of feet have declined by double digits on a Y-O-Y comparison. The USAPEEC note that 37 states with 444 of 577 approved plants and cold storage installations are ineligible to export to China. Other products shipped to China including wings and edible giblets comprising 5.3 percent of volume and 5.5 percent of value at a unit price of $2,862 per metric ton.

During January 2023 Mexico was the first-ranked importer by volume with 63,125 metric tons representing 20.1 percent of export volume down 22.0 percent from January 2022. Value at $60 million was 16.0 percent of the total for exported broiler products during January 2023 and down 1.6 percent from January 2022, with an 18.9 percent decline in unit price to $947 per metric ton. 

During January 2023 nations gaining in volume compared to the corresponding period in 2022 (with the percentage change indicated) in descending order of volume were:-

Mexico, (+22%); Cuba, (+54%); Angola. (+9%); Guatemala, (+7); Canada, (+10%); Haiti, (+36%); Congo-Brazzaville, (+49%); Iraq, (+337%) and Viet Nam, (+7%);

Losses during January 2023 offset gains in exports with declines for:-

China, (-21%); Taiwan, (-9%); and Philippines, (-24%).

TURKEY EXPORTS

The volume of turkey meat exported during January 2023 decreased by 26.6 percent to 12,098 metric tons from January 2022 and value fell by 27.6 percent to $42 million compared to January 2022 Average unit value declined by 1.4 percent from $3,521 per metric ton to $3,472 per metric ton. Imports of turkey products are projected to rise to 38,640 metric tons in 2023.

For the entire year of 2022 export volume declined by 25.6 percent to 184,537 metric tons compared to 2021 and value fell by 3.6 percent to $642 million reflecting a 1.4 percent decrease in unit value to $3,473 per metric ton.

During January 2023 only Canada gained in volume posting a seven percent increase over January 2022. Volume to Mexico declined by 23 percent; to Benin (effectively Nigeria) by 46 percent, China by 33 percent and Guatemala by 24 percent.

PROSPECTS FOR 2023

The March 14th 2023 Livestock, Dairy and Poultry Outlook Report, updated 2023 exports of broiler products to 3.325 million metric tons (7,315 million lbs.). This value represents 15.6 percent of the projected production of 21.277 million metric tons (46,750 million lb.) of broiler RTC by the U.S. industry.

Projected export of turkey products in 2023 will be 163,600 metric tons, (360,000 million lbs.) or 6.4 percent of annual production of 2.539 million metric tons (5,585 million lbs.).

It is important to recognize that exports of chicken and turkey meat products to our USMCA partners amounted to $1,264 million in 2021 and $1,647 million during 2022. It will be necessary for all three parties to the USMCA to respect the terms of the agreement since punitive action against Mexico or Canada on issues unrelated to poultry products will result in reciprocal action by our trading partners to the possible detriment of U.S. agro-industries.

 The emergence of H5N1strain avian influenza virus with a Eurasian genome in migratory waterfowl in all four Flyways was responsible for sporadic outbreaks of avian influenza in backyard flocks and serious commercial losses in egg-producing complexes and turkey flocks but to a minimal extent in broilers. The probability of outbreaks of HPAI over succeeding weeks appears likely but will be a function of continuous shedding by migratory and domestic birds and mammals. The extent of protection of commercial flocks at present relies on intensity and efficiency of biosecurity, representing investment in structural improvements and operational procedures. To date 3.2 million broilers on 18 farms in 7 states and in excess of 9.8 million turkeys on 231 farms in 7 states have been depleted as a result of HPAI.

The application of restricted county-wide embargos following the limited and regional cases of HPAI in broilers with restoration of eligibility 28 days after decontamination has supported export volume for the U.S. broiler industry. Exports of turkey products have been more constrained with plants processing turkeys in Minnesota, the Dakotas, Wisconsin and Iowa impacted.  Most nations are now lifting embargos that were previously placed on entire states or counties as the WOAH (OIE) mandated post-decontamination period expires.

The live-bird market system supplying metropolitan areas, the presence of numerous backyard flocks, fighting cocks and commercial laying hens allowed outside access, potentially in contact with migratory and now some resident bird species, all represent an ongoing danger to the entire U.S. commercial industry. The live-bird segments of U.S. poultry production represent a risk to the export eligibility of the broiler and turkey industries notwithstanding compartmentalization for breeders and regionalization to counties or states for commercial production.

Updated USDA-ERS Poultry Meat Projection for March 2023.

On March 14th 2023 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2021 (actual), an update for 2022 and a projection for 2023.

Broiler RTC production in 2022 was almost unchanged in the March 2023 report at 46,206 million lbs. RTC (21.003 million metric tons.). Per capita consumption in 2022 will be 98.9 lbs. (45.0 kg.). Exports will represent 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 46,750 million lbs. (21.250 million metric tons) up 1.2 percent from 2022. USDA projects per capita consumption of 100.2 lbs. (45.5 kg.), up 1.3 percent from 2022 with exports of 7,315 million lbs. (3.325 million metric tons), 0.5 percent above the previous year.

Turkey production for 2022 will be 5,222 million lbs. (2.374 million metric tons) RTC. The March 2023 projection for per capita consumption will be unchanged from 2021 at 14.6 lbs. (6.6 kg.), despite extensive promotions and introduction of further-processed items. Export volume for 2022 will attain 408 million lbs. (0.185 million metric tons). Values for production and consumption of RTC turkey for 2022 are considered to be realistic, given the prevailing economy, variable weekly poult placements, production levels, losses from HPAI and inventories.

The March 2023 USDA projection for the turkey industry included annual production of 5,585 million lbs. (2.539 million metric tons), up 7.0 percent from 2022 with consumption of 15.9 lbs. (7.2 kg.) per capita, up 8.9 percent from the previous year. Export volume will decline by 11.8 percent in 2023 to 360 million lbs. (163,000 metric tons).

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 March 14th 2023

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 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 over 2022 (483,538 metric tons) at a unit price of $1,926 per ton.

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

Animal Equality, a welfare activist organization, has filed a complaint with the European Commission claiming that fast-growing broilers represent a violation of Article 13 of the Lisbon Treaty, recognizing animals as “sentient beings”.  Citing European Directive 98/58/EC, Animal Equality submitted data to the European Parliament and the Commission suggesting that fast-growing and high-yield strains are subject to skeletal disorders.

The European Commission responded indicating that welfare legislation will be updated in the light of scientific evidence.  The European Food Safety Authority is the body responsible for assessing claims and providing opinions that guide legislation.

The submission to the European Commission is heavy on sentiment, quoting, “This is why it is necessary to put an end to the exploitation of fast-growing chickens which are condemned from birth to be prisoners of their own bodies for the profit of the meat industry.”

Animal Equality has campaigned against intensive poultry production for two decades. As with kindred organizations in North America, members of the organization undertake undercover investigations and intrusion onto farms to gather images used to solicit funds and to oppose intensive livestock production.

The National Institute of Food and Agriculture has awarded $650,000 to the Swine Health Information Center.  The objective will be to evaluate methods of detecting and preventing transmission of African swine fever in imported soybean products.  A component of the project will be to refine diagnostic procedures for ASF and other viruses in imported soybean meal and cake.  Dr. Megan Niederwerder, Director of the Project, stated, “The knowledge generated thus far has supported mitigation strategies but the Swine Health Information Center wants to continue to define best practices for preventing ASF from entering the Country through this route.”

Presumably, organic certified soybean cake is imported into the U. S. for swine diets for the limited organic pork sector.  Since much of the imported product is derived from China where AFS is endemic, the risk to the U. S. swine industry is self-evident.

It is questioned why the U. S., a major producer of soybeans and derived products, cannot make available organic soybean cake or extruded organic soybeans as ingredients at prices that compete with imported presumed organic meal from China.

In a recent editorial in Science, contributors from the Harvard Law School and New York University criticized the NBS-‘22 document for ignoring domestic risks. 

Ann Linder and Dale Jamieson justifiably cite the risk of an emerging zoonosis associated with the euphemistically termed “live bird market system”.  Urban wet markets in U.S. metropolitan areas are essentially no different from their counterparts in China and other Asian nations.  The report also notes the lack of concern in the NBS-‘22 report relating to domestic consumption of game animals and birds that are uninspected and represent a risk of an emerging zoonosis.

The authors characterized regulatory public health as being in need of reconstruction. They stated “What is needed is not simply for agencies to do their jobs better or to paper over the gaps, but a fundamental restructuring of the way that human-animal interfaces are governed.”

The U. S. Environmental Protection Agency will update water pollution rules for red meat and poultry facilities. This action results from lawsuits filed by environmental groups. The EPA has authority to regulate effluent discharge under the Clean Water Act and there is obvious concern over release of effluents containing high levels of phosphorus that degrade the quality of streams and wetlands.

A secondary motivation for the review of water standards relates to the proximity of processing plants to areas with low income and minority residents, a preoccupation with the USDA and other agencies within the current Administration. 

It is estimated that there are 7,000 plants of which 400 large facilities are covered by water discharge standards.  Depending on the stringency of the regulations, most broiler plants with existing adequate water treatment will be compliant.  The problem, apparently, relates to small, unregulated plants with direct discharge into waterways. The proposed standards will be issued for comment in 2023 but will probably not be enacted until 2025 followed by inevitable legal challenges.

It is ironic that USDA is attempting to “restructure the meat industry” by financing small-scale operations that are most likely to generate pollution and fail to comply with welfare regulations.

USDA-FAS GAIN Report TC-2023-0001, dated March 7th, summarizes the updated technical regulation for animal slaughtering according to Islamic rules.  The GAIN report is based on the November 30th, 2022, technical regulation UAE.S.993/2022 with an effective date of implementation of December 1st, 2023.  The document prepared by religious and secular authorities in the United Arab Emirates refers to the “the halal standard” to replace all previous regulations and advisories relating to Islamic rules. 

The major changes relevant to the broiler industry include:

• Stunning is allowed, providing that birds are rendered insensible but without resulting in cardiac failure or death.
• Mechanical killing is acceptable with specific recommendations and restrictions.

The regulations relating to the UAE are obviously not binding on other importing nations in the Middle East including Saudi Arabia where different religious authorities influence import regulations.

Since Singapore has approved the sale of cell-cultured meat, activity has intensified in the City- State.  Aleph Farms has signed a memorandum of understanding with ESCO Aster to produce thin-cut steak in Singapore.  The extensive technical development and intellectual property accumulated by Aleph Farms will be a value in establishing production in Singapore.  According to press reports, ESCO Aster has existing technical agreements with Mosa Meats of the Netherlands, a developer of cell-cultured meat technology.

According to a statement by Didier Toubia CEO of Aleph Farms the Company intends to establish commercial production capacity in Israel following the purchase of a VBL Therapeutics facility.

A lawsuit was filed in Pulaski County Circuit Court in Arkansas relating to the 2020 outbreak of COVID.  The suit claims that a decision to continue operating processing plants through April 2020 resulted in emotional distress, illness and death among workers.

The suit claims that Tyson should have known the implications of COVID in plants based on events in China and failed to provide protective gear or to arrange for social distancing until April 2020.

Red meat packers and poultry processors are now subject to claims by workers. The U.S. Supreme Court failed to grant certiorari, letting stand previous Appellate court decisions that the Presidential Executive Order 13917 of April 28th 2020 did not provide exemption from claims by employees.  The Presidential Executive Order was based on Section 101(B) of the Act (50 U.S. C. 4511 (B) allowing the Secretary of Agriculture to take appropriate action to ensure that meat and poultry processors continued operations consistent with the guidance jointly issued by the CDC and OSHA.

Investigative journalists subsequently confirmed that the Executive Order incorporated text from a document prepared the North American Meat Institute.

In the defense of the chicken industry, as soon as the magnitude of COVID and its infectivity became apparent, measures were taken to reduce the risk of exposure. These included supplying personal protective gear, placement of partitions between workstations, social distancing where possible and modifying plant ventilation.  Most companies instituted health screening in an attempt to identify potentially infected workers who were obliged to isolate with paid leave.  Irrespective of whether companies were afforded protection in terms of the Executive Order, evidence shows that most processors including Perdue Farms and Tyson Foods made every effort to apply known protective measures to prevent the spread of COVID among workers in plants.

McDonald’s will launch the chicken Big Mac® in Canadian markets.  This sandwich substitutes two breaded chicken patties for beef.  McDonald’s does not intend offering the chicken Big Mac for an extended period.

Kentucky Fried Chicken is bringing back the KFC Double Down featuring two white meat fillets, two slices of cheese and two pieces of bacon.  The Double Down that was introduced in 2010 sold more than 10 million sandwiches in the first month.

The statement by Nick Chavez, CMO of KFC U. S accompanying the release defies logic. He noted “After nearly a decade of people begging for its return, we are bringing back the most iconic sandwich, ever, for just four weeks”.  If customers were asking for the sandwich, why wait 10 years?  If it is so iconic and in demand, why restrict this menu item to four weeks?

CHICK-NEWS extends congratulations to Cooper Farms during their 85th year as a family owned and operated producer and processor.  The company established in 1938 is now vertically integrated, producing turkeys, hogs and table eggs.

Jim Cooper, CEO stated, “our company was founded on a hand-shake mentality with a focus on doing the right things all the time”.

Cooper Farms produces between four and five million turkeys annually and directly or indirectly packs and breaks eggs from Company owned and contract flocks.

The company is noted for its generosity, supporting numerous charities in Northwest Ohio.

According to reputable consulting groups monitoring ocean shipping, reduced demand attributed to the World economic situation has led to a collapse in volume of ocean freight from Asia to Europe and North America as reflected in lower rates.

Extreme competition has now replaced the adoption of consortia and alliances that shared capacity to optimize return.  Shippers are negotiating rates covering contracts of short-duration now measured in months compared to previous annual agreements. The cost of sending a container from China to Los Angeles dropped to $1,238 in late February compared to $15,600 in February 2022.

The ocean freight industry is characterized by cycles of boom and bust associated with the lag time between orders for new vessels and their delivery. Approximately130 new container vessels are on order to be added to the fleet over the coming 40 months. It is evident that older and inefficient vessels will be scrapped, a trend that is driven by the need to conform to new environmental standards.  This trend may well be accelerated by a period of low rates attributed to decreased demand for production of goods in China and trends to onshoring in North America.

The National Retail Federation estimates that ocean freight volumes fell by 12 percent in February compared to the previous month and will be 26 percent down from the comparable month in 2021.  Scheduled capacity from Asia to the U.S. is down by 30 percent and from Asia to Europe by 20 percent.  At this time seven percent of global vessel capacity is idled and 60 charted vessels will be returned to their owners by the larger operators including MSC that operates 700 vessels.

During the first quarter of 2021, China claimed that imported frozen meat products and packaging were contaminated with SARS-CoV-2 (COVID) virus. Product was assayed on arrival from plants in Brazil that recorded high levels of infection among workers.  The World Health Organization countered with an opinion that it was unlikely for frozen exported food products to be a vehicle of infection.

The Food Standards Agency of the U.K. recently conducted studies on the viability of SARS-COV-2 on a variety of packaging materials and foods.  Generally COVID virus could not be isolated from food products 24 hours after inoculation, simulating aerosol contamination under controlled conditions. The survival of SARS-COV-2 was evaluated over a range of temperatures and humidity levels encountered under storage and transport of various food products.

 The virus can persist for as long as seven days on produce with uneven surfaces including vegetables and fruits.  Pastries were free of virus within hours attributed in part to the presence of arachidonic acid in egg white that coats pastries and similar items.  In contrast, virus could persist for as long as a week on cheese and cold meat.  Plastic surfaces can support survival for a week but aluminum cans are free of virus after hours.

The level of SARS-COV-2 applied to the foods and packaging material was designed to simulate an infected person sneezing on product representing a worst-case situation.  It is generally acknowledged that SARS-COV-2 is spread by aerosol rather than contact with contaminated surfaces.  Rinsing fresh produce, cooking meats and personal hygiene including hand washing and masking in plants should reduce the risk of transmitting COVID.

It is questioned whether SARS-CoV-19 virus would remain viable on meat or its packaging over the duration of a 10,000 mile ocean shipment at sub-freezing temperature. The application of PCR assay will detect viral RNA but a positive result would not necessarily indicate viability with the potential for infection. The fact that China continues to import beef, pork and chicken in large quantities without reporting outbreaks in workers in cold storage and product-handling facilities suggests a negligible risk from imported frozen protein products.

Following successful testing in Atlanta, Kentucky Fried Chicken (KFC) will introduce wraps at participating restaurants nationwide.  Wraps will cost $5 for a pair and will be available in Classic or Spicy presentations.

Any new chicken product, especially if made available through a national chain, increases institutional demand.  The question facing KFC is whether by offering wraps consumers will divert demand from existing menu items.  In all probability, the new products will add to sales, given acceptability of “finger food” that can be consumed on-the-go.

Following a sharp decline in sales of plant-based alternatives to real meat, Beyond Meat Inc., a pioneer in the category is applying a desperation strategy concentrating on retail sales through four major chains comprising traditional supermarkets and wholesale club warehouses.

Reversing the departure in executives, the company has hired Akerho Oghoghomeh recently affiliated with the Red Bull brand, to lead marketing efforts.  This might seem an exercise in futility as the trajectory in financial data suggests either bankruptcy in the near future or a massive infusion of working capital to survive.

Beyond Meat has traded over 52 weeks from $64.59 down to $11.03 with a 50-day moving average of $14.56. On July 1st 2019 BYND closed at $196.51. Trailing twelve month operating margin was -76 percent and profit margin -86 percent with a return on equity of -1,167. Revenues are declining and 35 percent of the outstanding shares are short.

An annual survey conducted jointly by Fortune and Korn Ferry selected Tyson Foods as the World’s Most Admired Company in the category of Food Production for the seventh consecutive year.  The award is based on the evaluation of financial analysts and executives within and across industries.  Ranking is based on corporate reputation, innovation, use of assets, social responsibility, financial soundness, personnel policies, long-term investment and product quality.

In commenting on the award, Donnie King, CEO of Tyson Foods stated, “We are honored to again be acknowledged and we are committed to continuing to provide high-quality protein as good value to the World.”  He added, “Our team members are the heart of our business and their hard work and dedication to win with excellence is what put us in the position to be recognized as a leading food company.”

After four years of development, Chick-fil-A is testing a chicken-substitute sandwich.  The product comprises a breaded pressured-cooked cauliflower-based patty served on a bun.  The product is undergoing tests in Charleston, SC., Denver, CO., and Greensboro, NC.  Given that milk and eggs are used in the preparation of the cauliflower patty, the product is regarded as vegetarian and not vegan.

Approval has been extended to a proposed child-care center to be established in Austin, MN. by Hormel Foods Corp. The company has set aside $5 million for the project that will cater for 130 children to be operated by Brighter Horizons.

Jeff Holt speaking for Hormel stated, "The Center is necessary to attract and retain employees in our community".

The move by Hormel Foods Corp follows a similar project by Tyson Foods Inc. that hopefully will establish a new standard for employee benefits.  Quality childcare is extremely expensive even if available in rural areas.  The assurance of appropriate care and feeding of children from infancy onwards to school age allows women to enter the workforce, creates greater stability within communities and ultimately enriches the Nation through improved nutrition and health and intellectual development from head-start enrichment.

Regrettably Hormel was denied a tax benefit for the Center 

Following a USDA release indicating a negative agricultural trade balance of $14.5 billion for the current quarter, Senator John Boozman (R-AR), Ranking Member of the U. S. Senate Committee on Agriculture, Nutrition and Forestry, urged aggressive measures to increase exports.

The issue of declining agricultural exports is not due to the inactivity or lack of diligence of any specific administration irrespective of political persuasion.  Customers for U. S. agricultural products place orders according to their requirements and their willingness and ability to pay.  In a recessionary economy, many nations have reduced food imports including China, our largest customer.  Senator Boozman should recognize that the U.S. is in direct competition with other exporting nations with their prices based on land, labor and energy. There is minimal differentiation in quality attributes for commodities including corn, soybeans, rice and cotton.

His blaming the current Administration for an imbalance in agricultural trade defies reality.  U.S. imports have soared, especially for seasonal fruit from South America and vegetables and other food items from Mexico and Central America. This trend is advanced by domestic labor costs, environmental restrictions and availability of water for irrigation that result in a price differential between domestic and imported food products.

It is hoped that additional funding will be allocated to the Market Access Program and the Foreign Market Development Program to allow for new markets and expansion of existing trade as much as is possible.  The Administration has been aggressive in pursuing legal remedies to correct deviations from trade rules with dairy exports to Canada as an example.

Senator Boozman should recognize that pumping money and resources into export promotion has limitations in terms of return.  If domestic demand increases concurrently with our customers demonstrating a declining need for our products or if competitors offer lower prices, there is little that industry associations and the Administration can do to restore trade balance in agricultural commodities.

CVS closed 306 stores in 2022 and will continue culling locations through 2024 with a possible count of 900.  The selection of stores to be closed reflect local demographics with an emphasis on providing services that suit the needs of consumers in specific areas.

Sporadic outbreaks of African swine fever (ASF) have occurred in the state of Brandenburg affecting small-scale hog farms. Wild boars that have migrated westward from Poland have infected domestic hogs in Brandenburg and adjacent Saxony.  Attempts at limiting cross-border movement and reducing the boar population have been unsuccessful. Maintaining an acceptable level of biosecurity is difficult on small farms. The presence of AFS within the two eastern states of Germany has severely constrained national pork exports and consequently a number of packing plants have closed.

The epidemiology of AFS in Central Europe should be a warning for the U.S.  In the event of introduction of African swine fever from Caribbean nations, the domestic population of wild boars would become infected and serve as a reservoir of virus complicating control and almost eliminating the possibility of eradication.  Obviously measures to reduce the population of wild boars that are themselves destructive, should be intensified as previously advocated in CHICK-NEWS. 

As with highly pathogenic avian influenza in poultry, control will only be achieved with the deployment of an effective and safe vaccine.  Evaluation of innovative products including a candidate vaccine developed by USDA-ARS and under test in Vietnam should demonstrate the extent and duration of protection of commercial herds. A slaughter-out policy has been shown to be ineffective in both Haiti and the adjoining Dominican Republic. Accordingly APHIS is advised to update their playbook to accommodate to the realities of the infection.  With respect to ASF, the USDA should be pleased that pigs cannot fly and interdiction of infection is possible with intensified control at points of entry.  Funds expended on border and port surveillance are justified given the potential losses following possible introduction of ASF.

Tyson Ventures has invited participants to the Tyson Demo Day on July 11th to present innovative concepts advancing sustainability through reclamation of waste.

John R. Tyson, President of Tyson Ventures and CFO of Tyson Foods stated, “We are embracing the circular economy and putting waste to work.”  He added, “This means reimagining and reusing materials and working to reduce our environmental footprint.”

Six startups will be selected to work with Tyson Foods to develop projects that have the potential to enhance sustainability.  In 2020, 20 finalists were selected from 120 applicants with six selected to receive further consideration through funding, mentorship and cooperation.

Green Leaf Foods, a subsidiary of Maple Leaf Foods, has entered into a joint development agreement with The Better Meat Company to apply Rhiza microprotein culture to the manufacture of ingredients.  The Better Meat Company has developed technology to produce a natural meat-textured protein product through fermentation.  The microprotein-derived additive enhances texture for plant-based meat substitutes.

Doni Curkendall, Executive Vice-President of Operations for The Better Meat Company, stated, “Rhiza microprotein is a versatile ingredient for use both as a meat enhancer and meat replacer.”  He added, “Green Leaf Foods expertise in all things protein makes them a stellar partner to showcase this powerful ingredient that will help build an even more sustainable protein industry.”

Employees at a Pilgrim's Pride plant in Georgia have filed lawsuit against the Company alleging that they were denied fair compensation for time worked.  The group were paid a salary, but worked more than 40 hours per week often extending to 72 hours without overtime remuneration.  The salaried workers were obviously at a financial disadvantage compared to hourly- paid employees.

A class action status is requested with case to be heard before a Federal court in Colorado.

Perdue Farms has agreed to settle a 2019 class action suit claiming violation of the Sherman Antitrust Act by conspiring to drive down hourly wages and salaries for over a decade.  Perdue Farms joins Cargill Meat Solutions Corp, Sanderson Farms and Wayne Farms in settling this litigation.

The plaintiff class has alleged that the companies exchanged compensation data available through subscription to AgriStats Inc. and to a private company Weber, Meng, Sahl Inc.  The plaintiffs also presented evidence that private meetings were held concurrently with industry events and that compensation plans and wage rates were reviewed and compared.

The case stretched over a period of three years until the settlement was filed on March 14th.  Perdue Farms agreed to pay $60 million and collectively the three other companies provided $85 million in compensation.  None of the companies admitted to wrongdoing.

Jack Hubbard, active in the Washington, D.C, circuit and an associate of Berman and Company, a DC public relations organization, recently commented on welfare certification organizations and specifically, Global Animal Partnership (GAP).  This certification is promoted by both the Humane Society of the United States and the ASPCA.  These organizations are opposed to all forms of intensive livestock production and are motivated by a vegan agenda.

Hubbard points out that three of the eight board members of GAP, are avowed opponents of commercial production of meat and poultry.  Individual board members wear other hats and participate in organizations that are lobbying for restrictions on the industry to be included in the 2023 Farm Bill.  Global Animal Partnership has ties through common board membership to Compassion in World Farming and the Humane Society International affiliated with the Humane Society of the United States.  Retail industry participation on boards includes executives employed by Whole Foods Market catering to an affluent clientele with a strong bias to organic and subsistence production.

Hubbard provided a set of criteria that could be applied to select a certified organization.  These include:

• Understanding the motivation and affiliations of a certification organization.
• Researching board members and executives and ascertaining that objectives, as presented on websites, are aligned with company objectives.
• Evaluating the history of the history of certifying organizations to detect trends in intensifying welfare standards that impose additional costs and inconvenience.

Chick-fil-A Inc. has formed a subsidiary to erect and operate a distribution center in Olathe, KS.  This will be the 5th distribution unit in a series established by the privately-held QSR chain and will commence operation in 2024.  The facility will employ more than 60 workers and will be owned and managed by a Chick-fil-A Supply Inc.

In 2013, the WH Group acquired Smithfield Foods for $4.7 billion, representing the largest acquisition by China of a U. S. company.  The transaction was approved by the Committee on Foreign Investment in the U. S. that found no national-security risk from the purchase.

In recent weeks there has been growing concern over China represented by military aggression, support of the Russian Federation, the apparent danger of Tik Tok and the spy balloon episode, all solidifying opposition to China our greatest strategic and commercial adversary.  Politicians are now questioning the wisdom of China owning a major agri-business enterprise, slaughtering 30 million hogs annually and representing an important component of the food supply chain.

Senator Tom Cotton (R-AR) noted, “From purchasing fields and pastures to gobbling up companies like Smithfield, Chinese influence in American agriculture means that China’s needs, not America’s, come first”. This somewhat inflammatory statement is at variance with fact since the WH Group only acquired a small acreage with their acquisition of Smithfield plants.

Shane Smith, CEO of Smithfield, has devoted considerable time meeting with legislators and officials in Washington, assuring them of the independence of Smithfield and its commitment to the U. S.  All pork products sold by the company are derived from hogs bred, raised and processed in the U. S.

Smith pointed to an increase in annual sales from $13 billion to $18 billion following the acquisition 10 years ago. This is a meager three percent per year and clearly below the rate of inflation. He pointed to the fact that the company has hired 3,000 more employees in the U. S. and expanded into other meat categories. Smith noted that the acquisition has resulted in export of some new products to China including bacon. Smithfield supplies by-products comprising heads and feet, that are traditionally consumed in China but have no markets in the U.S.

A consumer has filed a lawsuit alleging that Buffalo Wild Wings Inc. has engaged in deceptive advertising.  The Chicago resident claims that ‘boneless wings’ are slices of chicken breast meat that have been deep-fried. The plaintiff claims that the term ‘boneless wings’ is an incorrect descriptor and represents false advertising.  The lawsuit claimed that “customers should be able to rely on the plain meaning of a product’s name and receive what they are promised”.

In response to the lawsuit, Buffalo Wild Wings confirmed the allegation but claims that deceptive descriptions of menu items are common in the restaurant industry.  They state that the company’s “buffalo wings do not contain buffalo and that hamburgers have no ham”.  This flippant response containing an admission of the validity of the plaintiff’s claim, presumes a settlement in what is obviously shakedown litigation.  It will, however, be up to the plaintiff to quantify the magnitude of his alleged financial injury.

At best, Buffalo Wild Wings and other servers of faux wings will have to find a new name for their menu offering.

On March 14th, Tyson Foods Inc. announced the closure of the Van Buren, AR and the Glen Allen, VA complexes. It is intended to transfer growing and processing activities to other complexes to reduce production costs.

This action will impact approximately 1,600 jobs. Tyson Foods is working with state and local agencies to provide assistance to workers who will not move to accept positions at other Tyson complexes.

In a company statement, Tyson noted, "while the decision was not easy, it reflects our broader strategy to strengthen our poultry business by optimizing operations and using the full available capacity at each plant.

Mark Federici, President of the United Food and Commercial Workers Local 400 Union representing Glen Allen workers stated, "it has been our honor and privilege to represent the workers at this plant for decades and we were appalled by today's news and the terrible impact it will have on close to 700 of our Union members".