Shane Commentary

ASF Impacts Germany – Lessons for the U. S.

03/17/2023

Tönnies, he largest pork producer in Germany with approximately one third of the domestic market is closing an export packaging section in a plant in Weisenfels in the state of Saxony-Anhalt.  Approximately 140 workers out of a total of 2,200 will be made redundant.  The action was taken as a result of import bans imposed on Germany by China and South Korea.  The action by China is unjustified, given the fact that African swine fever is endemic in that Nation and recently has increased in incidence. Prior to the September 2020 ban, Germany exported pork and low-value products to Asian nations.

 

African swine fever was introduced into Germany by wild boars migrating westward from Poland.  Eastern states, centering on Brandenburg with Saxony to the south and Mecklenburg-Vorpommern to the north being most affected.  Attempts to exclude boars from Poland by reinforcing border fencing have been largely unsuccessful.  Reducing the domestic population in these states by hunting has not been effective, given the adaptability of these animals and their rate of reproduction.

 

By the same token, the vast wild boar population in the U. S. represents a potential for mass dissemination of African swine fever virus if it enters the U. S. Although a federal program and state initiatives are directed at reducing the wild boar population, the range of these pests and their numbers are increasing.  More aggressive measures must be taken to deplete wild boars that represent an ongoing danger to the pork industry.

 

Measures to prevent introduction of African swine fever continue with surveillance of ports of entry, including airports.  The presence of endemic ASF in Haiti and the Dominican Republic represent a risk of introduction by travelers entering through east coast airports carrying uncooked pork products. A greater danger exists on the West Coast with illegal, large-scale smuggling of specialty oriental pork products as undeclared cargo in shipping containers. 

 

Identifying contraband pork in passengers’ luggage at airports will require more extensive deployment of the “beagle brigade” with Congress appropriating additional funds to expand the program as intended by the bipartisan Beagle Brigade Act of 2023 recently introduced into the House and Senate.  More deterrence is necessary to prevent illegal importation of pork products from China with surveillance at the retail level and trace back to importers and wholesalers.  Penalties for deliberate and commercial-level smuggling should be increased with mandatory prison terms to act as a deterrent. Introduction and spread of ASF would incur costs for control and the escalation in price of pork affecting consumers is highlighted by the ongoing epornitic of Highly Pathogenic Avian Influenza.


 

USDA to Make $90 Million Available to Finance Independent Meat and Poultry Processing

03/09/2023

Speaking at the Annual Convention of the National Farmers Union in San Francisco, Secretary of Agriculture, Tom Vilsack, announced $90 million in financing for startups and extension of enterprises involved in processing red meat and poultry.  This initiative follows the Administration policy of establishing a “more competitive market place in accordance with the Action Plan for a Fairer, Competitive and Resilient Meat and Poultry Supply Chain.

 

Vilsack stated, “Today’s investments and actions to back the startup and expansion of independent processing capacity and boost market fairness in meat and other key agricultural inputs will promote competition, support producer income, strengthen the supply chain and increase economic opportunity in rural communities.”

 

The current allocation was additional to the 2022 series of awards amounting to $75 million extended to eight nonprofit lenders in seven states.

 

Grants in 2023 will include $15 million to the Alabama Agricultural Development Authority for 12 new processing facilities.  Coastal Enterprises in Maine will receive $8 million to establish livestock and poultry processing in New England states.  The Lewis and Clark Development Group will receive $5 million to support expansion of meat and poultry processing in North Dakota.

 

Given that the grants are anticipated to generate 400 projected new jobs, it is estimated that each new position will require the capital investment of federal funds approaching an average of $250,000 per position.

 

The USDA and the Administration refer to distribution of taxpayer money as an “investment”.  Giveaways can only be characterized as investments if they show a return on the capital expended in establishment and long-term functional and viable businesses.  At some time in the not too distant future, the USDA should provide an accounting indicating how federal funds were expended and whether the principal was returned to the Treasury.  Unfortunately, when the time to quantify results occurs, neither Tom Vilsack nor his acolytes in the USDA will be around to provide explanations of how funds disappeared and to explain why the “investments” “were essentially giveaways. As both a taxpayer and a shareholder in public-quoted agribusiness companies, this commentator objects to my quarterly payments to support the nation being diverted to non-viable enterprises to support social engineering, and indirectly competing with established and efficient producers.


 

Restrictions on U. S. Broiler Exports Continue

03/06/2023

According to the March 6th edition of the USAPEEC Monday Line, importing nations continue to impose statewide restrictions as a result of localized outbreaks of Highly Pathogenic Avian Influenza (HPAI).

 

The Republic of Kazakhstan announced restrictions on imports from California, Texas and Virginia for product shipped after February 23rd, 2023.  South Africa has disallowed imports from the state of Virginia for product processed after January 2nd and for the state of Virginia after January 27th.  South Africa imposes restrictions without communication with the USDA, resulting in omissions from the Export Library.

 

 

It is recognized that there is considerable inconsistency in establishing the geographic extent of bans as a result of HPAI outbreaks.  Many nations are following regionalization as incorporated in World Organization of Animal Health (WOAH) guidance.  In contrast, some nations impose statewide or national bans as a result of outbreaks of designated catastrophic diseases in livestock and poultry.  The USAPEEC, in cooperation with the USDA and the International Poultry Association, have made considerable progress in harmonizing trade regulations and the acceptance of scientifically justified restrictions to protect domestic flocks from imported pathogens.  Unrealistic restrictions are due either to lack of knowledge concerning the epidemiology of HPAI on the part of regulators, conservatism and resistance to change inherent in regulatory veterinary medicine, xenophobia or the imperative to protect domestic industries from import competition.


 

Meat Packing Special Investigator Act Reintroduced

02/15/2023

In a bipartisan initiative Senator Mike Rounds (R-SD), Senator John Tester (D-MT) and Senator Chuck Grassley (R-IA) have reintroduced the Meat Packing Special Investigator Act to create an Office of the Special Investigator for Competition Matters within the USDA.

 

The intent of the Office will be to prevent anticompetitive behavior in the meat packing industry that is characterized by consolidation with four major companies representing 85 percent of beef processing capacity.

 

Using an over-simplification, the promoters of the Bill point to the difference in price paid to ranchers and the eventual cost of beef to consumers.  A second justification of questionable relevance is the fact that allegedly 17,000 ranchers have ceased production since 1980.

 

Senator Grassley expressed the opinion that, “Increased consolidation and anticompetitive tactics by is intended to strengthen the enforcement of the Packers and Stockyards Act and will increase or extend involvement with the Department of Justice and the Federal Trade Commission.

 

Predictably, the North American Meat Institute is opposed to the legislation. In Congressional testimony, Julie Anna Potts, CEO of NAMI, stated, “The Special Investigator would feel emboldened and obligated to bring in as many cases as possible, warranted or not to test the legal limits of the new rules.  The resulting legal uncertainty and chaos will accelerate changes in livestock and poultry marketing that will add cost to producers and packers.”

 

The preoccupation of legislators, USDA and the current Administration that large-scale livestock production is in some way prejudicial to farmers and consumers has no support from mainstream agricultural economists. If introduced, “mission creep“ would extend the scope of the Investigator from beef and pork to include poultry with consequential disruption of the supply chain.


 

Obstacles to Adoption of Cell-Cultured Meat

12/28/2022

As more start-up and established companies have announced impending commercial production of cell-cultured meat, questions arise as to the commercial viability of the range of products that will be offered.  At present, there is no comprehensive approval of cell-cultured meat despite the Food and Drug Administration indicating that it had no objection in principle to products following a review of documentation submitted by one aspirant producer of cell-cultured meat.  The U.S. FDA and USDA-FSIS have joint jurisdiction over cell-cultured meat and have yet to issue their regulations.

 

The market potential for cell-cultured meat may be discerned from the sales trajectory of plant-based meat substitutes introduced during the late 1990s.  Following a sharp increase in demand through 2020, consumer interest waned, and market growth has plateaued with every prospect of a decline.  JBS closed their Planterra operation and Maple Leaf Foods has reevaluated their considerable investment with an appropriate reduction in projected sales.  Beyond Meat (BYND) represents the only pure-play public traded plant-based manufacturer of meat substitutes. This Company has generated a dismal record since their IPO. Beyond Meat has posted increased losses, declining margins and progressively lower sales in both domestic and international markets over the past two years.

 

There is general acceptance that the initial growth rate of plant-based products was fueled by a curiosity factor.  Given the unjustified premium in price between real meat and substitutes in the form of ground product and sausages, frugal consumers in an inflationary economy have failed to transition to plant-based products or have ceased purchasing based on perceived quality and cost.  The demographic willing to pay a premium for subjective attributes such as sustainability welfare and the environment is limited.

 

The plant-based substitute for meat industry has failed to convince consumers that their products are in some way “healthier” than conventional meat.  Labels indicate numerous additives and high salt content are of concern to those who obsess over “clean labels”.  Although many producers claim equivalent levels of protein, the amino acid profile of plant-based substitutes is inferior to real meat.

 

It is questioned whether cell-cultured meat will be directed to either the consumer market or to food service.  It is one thing to serve a $30 per plate entrée in a gourmet restaurant but an entirely different situation to achieve substitution for real meat on a vast scale by a major multinational QSR chain.  It is noted that the major QSRs have all trialed plant-based meat substitutes for limited periods without consumer appreciable acceptance.

 

Apart from cost, which will have to be equivalent to conventional meat, cell-cultured products will have to incorporate organoleptic qualities including texture, taste and appearance comparable to conventional meat, especially for the more expensive cuts.

 

To date, the developers of cell-cultured meat have demonstrated technical feasibility in pilot plants and have been lavishly supported by venture capital.  The real test will come following erection of capital-intensive production facilities with the inevitable problems of scaling up pilot production to commercial quantities.  Even if volumes can be achieved at equivalent cost to conventional meat, which is considered unlikely over the intermediate term, acceptance by both consumers and the food service sector is questionable unless benefits over and above environmental and welfare considerations are evident.


 

Our 2023 Wish List

12/27/2022

As we approach 2023 we should be thankful for the positive events over the past year and recognize the challenges ahead. We have overcome obstacles, striven to defend what is right and ethical and have overcome many obstacles imposed on us by extremes in weather, international turbulence and economic pressures.

 

During the coming year the poultry industry and interconnected agricultural sectors should benefit from: -

  • A decline in the incidence rate of HPAI in the U.S. and neighboring nations. A realization that the infection is de facto endemic should result in a reappraisal of limited evaluation and application of immunization of long-lived flocks applying advanced vaccines.
  • Immigration reform is needed. We require foreign workers and more important their children who will be raised as U.S. citizens, enriching our diverse culture and offsetting the inevitable ageing of our population.
  • Rapid passage of the 2023 Farm Bill with strong constructive bipartisan support within the House and Senate
  • Resolution of conflict in the Ukraine to end human suffering and to restore supply of commodities, stabilizing ingredient prices and allowing diversion of resources to peaceful and constructive endeavors.
  • Curtailing inflation to allow the Federal Reserve and other central banks to lower interest rates and stimulate consumption and the expansion of our industry.
  • A greater sense of community is needed in our Nation with mutual understanding and rejection of extremes. We need to reduce inflammatory rhetoric and parochial divisions in our society with a return to political civility and a commitment to progress and prosperity.  

 

  Barbara and I wish all our sponsors, Subscribers and friends in the industry a peaceful and productive 2023. We all look forward to meeting at the IPPE.


 

FDA Concludes Voluntary Pre-Market Consultation on Cell-Cultured Chicken

11/20/2022

Following discussions, Upside Foods was informed by the FDA that the Agency accepts data supplied by the company and that there are no further questions at the current time concerning safety considerations.  It is emphasized that the conclusion of the review is not an FDA “approval” for either the product or cell-cultured meat in general. 

 

Despite optimistic predictions by the Alliance for Meat, Poultry and Seafood Innovation (AMPS), the industry group representing cultivated meat and protein products, final approval has yet to be granted by both the FDA and the USDA-FSIS, the Agency that will oversee production.  In addition, there are no definitive regulations that would be applied to govern the production of cultivated meat and seafood.  The AMPS noted that the Association “looks forward to continued progress by Upside and other companies to help expand safe and delicious food options for consumers and help support a more sustainable food supply”. 

 

It is far too early to phone a broker to buy shares in cultured meat startups even if they were available.  At this time relevant considerations include:-

 

  •  A realistic projection of the volume of cultivated meat and seafood that can be produced, especially in relation to the conventional meat products that they intend to displace.
  • An indication of the cost of items as delivered to the food service and consumer sectors.
  • An appraisal of organoleptic considerations including taste and the appearance and texture of both raw and cooked product.

 

Plant-based meat substitutes were intended to displace beef based on claims of welfare, sustainability and convenience.  A review of the financial performance of Beyond Meat and the Plant Protein segment of Maple Leaf Foods suggests that after an initial spurt of consumer interest, the curiosity factor that stimulated market growth was soon outweighed by non-competitive cost.  Even a two-fold differential between ground beef and the plant-based alternative has suppressed sales that peaked within three years after introduction, then plateaued and is now declining. 

 

There is a limited clientele for expensive boutique foods whether in the U.S. or in Singapore.  If cultivated meat is to make any impact on global warming, it will not be achieved through serving product to the affluent in Michelin-starred restaurants but in selling to consumers in supermarket display cases.


 

Haarlem Bans Advertising of Meat Over Environmental Concerns

09/13/2022

The City of Haarlem in the Netherlands has banned advertising of meat, holiday air travel and vehicles that use fossil fuel.  The ban will extend to all advertisements on buses, shelters and in public spaces.

 

The action taken by the City is based on prevailing sentiment regarding climate change and is justified by civic authorities using data suggesting the detrimental effect of intensive livestock production and especially beef on water consumption and greenhouse gas emissions.

 

Agricultural associations that are currently under pressure in Holland over release of nitrogen to waterways and atmospheric release of greenhouse gases are opposing the action. Complaining that the action by the City of Haarlem represents a public entity “telling consumers what they should and should not eat” is inadequate.

 

Given the effect of bans on advertising of cigarettes that are clearly detrimental to health, it is expected that in environmentally conscious nations such as Holland and others in Western Europe that this trend towards a vegan agenda based on the environment will grow and spread to North America. To date opposition to intensive livestock production has been based on welfare issues. Now there is common cause between animal rights activists and environmentalists creating a formidable force. Agricultural organizations in the U.S. should take heed of the action in Haarlem, as outlandish as it may seem to be. Cage-free production, cockerel sexing, banning of beak trimming all started as small initiatives and gained political traction. We now operate with restrictions and expend fixed and working capital to comply with regulations that impact our incomes.


 

Disparity Between State Funding And Corporate Investment In Meat Plant Upgrades

08/21/2022

Recent press reports confirmed that the state of Ohio distributed awards amounting to $3 million among 12 meat processors with an average grant of $220,000 per recipient to upgrade plants to improve efficiency.  In total, Ohio has made 128 grants totaling $28 million to small processors.  The program claims to benefit both meat processors and farmers but also to Ohio families who will find more meat products available at stores, according to the governor.

 

In contrast, Tyson Foods announced a $200 million investment in their Amarillo, TX beef plant.  The facility employs 4,000 and contributes to the local community with a payroll exceeding $200 million.  The project will include additional locker rooms, cafeteria and office space, and upgrades directed to conservation of energy and water and plant mechanization.

 

The state of Texas has awarded a $12.2 million to Producer Owned Beef, LLC to establish a plant that will represent a capital investment of $617 million and will employ 1,600 in the Amarillo area.  This plan will commence operation in 2025.

 

The need for large capital investment to upgrade packing plants is self-evident.  Scattering small grants among numerous, independent and local producers, although politically expedient and altruistic, may not move the needle with respect to total supply or create greater security for either farmers and consumers.  Initiatives by the USDA and states to support small-scale processing is a misplaced reaction to the problems encountered with COVID during 2020.  Although grants to small red meat packing operations receive publicity, there is seldom any accounting to determine the return on investment.  Since public funds are involved, federal and state agencies have the obligation to report on the benefits of their largesse.


 

USDA to Declare Salmonella as an Adulterant in Breaded Raw Chicken Products

08/04/2022

The USDA-FSIS intends to declare the presence of Salmonella in frozen raw-breaded chicken products to be an adulterant. Sandra Eskin Deputy Undersecretary for Food Safety commented, “Today’s announcement is an important moment in U.S. food safety.”  She added, “This is just the beginning of our efforts to improve public health.”

 

In the U.S. breaded stuffed raw chicken products have caused fourteen outbreaks since 1998 although the occurrence of infection is probably higher than has been diagnosed and confirmed. In addition, cases attributed to suboptimal cooking have occurred in Canada and the EU. With respect to raw frozen breaded chicken products, infection has not been limited by prominent label instructions advising consumers to cook product to 165 F in an oven and not to heat in a microwave.

 

USDA has yet to determine whether the regulation relating to adulteration will be based on a zero tolerance or will be restricted to specific serovars of Salmonella enterica. The most likely response by the industry to the intended action on raw breaded product will be to market only cooked breaded items with appropriate bacterial monitoring.

 

The question arises as to whether the intended action is a response to the specific and defined problem of raw breaded chicken or whether it is the thin edge of a wedge moving towards declaration of specified Salmonella as adulterants in all poultry. Perhaps the action is a compromise response to the long ignored petition by Attorney Bill Marler. In the unlikely outcome of a zero tolerance standard for up to twenty serovars the declaration would be a disaster for the chicken and turkey industries, given the absence of any current pre-harvest or post-harvest method of absolutely eliminating rather than suppressing Salmonella.

 

Irradiation, currently rejected by consumers is a highly effective treatment, that if applied correctly will absolutely eliminate Salmonella contamination. Tray packs and IQF portions could be treated by electron beam installations, analogous to x-ray, and would be compatible with existing production layouts. Irradiation of bulk product would require cobalt60 installations predicating a separate and expensive facility.


 

Value of USDA Giveaway Program For Meat Processing Questioned

05/29/2022

Secretary of Agriculture, Tom Vilsack, has announced grants totaling $200 million under the Meat and Poultry Intermediary Lending Program intended to “strengthen the food supply chain and create opportunities for small businesses and entrepreneurs in rural communities.” 

 

Clearly, this amount sprinkled in small grants to nonprofits, cooperatives and tribal entities will do very little to increase meat supply to the Nation.  The Department of Agriculture under its current leadership has a misplaced preoccupation with promoting production through any number of small-scale producers.  In his previous tenure as Secretary of Agriculture, Vilsack demonstrated an animus towards corporate entities that have followed a path towards consolidation and the establishment of large and highly efficient processing facilities.  The red meat industry is, to a large extent, fragmented given that the beef industry comprises independent sectors extending from cow-calf operations through to feed lots and culled dairy cows supplying packing plants. In contrast the broiler and turkey segments of the poultry industry are integrated and less consolidated than beef and pork processing.

 

Political appointees in the USDA apparently have no grasp of the needs for both fixed and working capital to operate an efficient packing enterprise. Processors to be successful must establish product diversity and distribute beef and pork to the domestic retail market and for export.  A $15 million loan to acquire land, build or expand facilities or even to modernize equipment is a drop in the bucket compared to the capital cost of a large-scale beef or pork plant that may approach $1 billion. A proposed beef packing plant in Rapid City, SD. intended to process 8,000 head per day employing 2,500 workers will require an investment of over $1.1 billion.  The capital cost per unit of production declines and the productivity of each worker increases with scale of operation. 

 

We are supposed to function in a free enterprise, economic system that is in large measure governed by the laws of supply and demand. Attempts to manipulate production or processing by scattering grants to socially disadvantaged and recipients unqualified to obtain commercial loans may well be a waste of public funds without providing benefits to either farmers or consumers.  Unfortunately, there are apparently many political appointees within the USDA with public funds at their disposal to implement socio-agronomic policies that fail to take into account the commercial realities of the red meat and poultry industries.

 

In contrast to pork and beef production, the broiler industry is highly integrated and has grown in output at the expense of both red meat sectors, through the principle of efficiency of scale, and applying scientific advances in genetics, nutrition and flock health. This has allowed an expansion of output through investment and the coordination of production and marketing for both export and domestic consumption. The Lincoln Premium Poultry complex located in Fremont, NE. and established by Costco to produce two million standard rotisserie-sized chickens each week required an investment of close to $500 million for a plant, feed mill and hatchery.

 

Comrade Vilsack and his acolytes should most certainly not interfere in what can be regarded as the most efficient sector of animal protein production.  If inappropriate regulation is forced on the poultry industry, growers, shareholders of major companies and consumers will suffer.

 

It isn’t broken, so please it doesn’t need fixing.


 

Cheesecake Factory To Require California Proposition #12 Standards For Pork

05/26/2022

Following on from their 2021 Corporate Social Responsibility report, Cheesecake Factory, Inc. will require 75 percent of its pork supply to be derived from sows held under group housing by the end of 2022.  During 2021, 30 percent of pork supply was derived from producers that maintained sows in gestation crates for less than 28 days.

 

Megan Bloomer, VP for Sustainability at the Cheesecake Factory stated, “The welfare of all animals throughout our supply chain is critically important to us.”  She added, “We are on the path to eliminating gestation crates and thanks to our valued pork suppliers, we are able to further improve the welfare of sows in our supply chain by aligning with California Proposition #12 standards.” Irrespective of the outcome of the appeal by the National Pork Producers Council to the Supreme Court, customers including restaurants and the retail segment have adopted standards conforming to California Proposition #12.

 

The implications are that standards may be imposed on customers by animal rights organizations through coercion, irrespective of whether they are practical and beneficial. They may demand that retailers and restaurants adopt requirements usually applicable to and devised in the E.U. and then superimposed on U.S. production systems.  Where applicable and beneficial, producers have accepted changes to traditional housing and management as exemplified by production of organic broilers and adoption of lower-level GAP requirements for broilers that add to cost but may have the potential to expand the customer base.  Providing there is an incremental margin derived from specified welfare standards, producers will be motivated to comply.  It is, however, an unfortunate reality that in an inflationary environment, lower income demographics are obliged to be cost conscious. These consumers do not perceive either welfare or sustainability as attributes for which they are willing to pay extra.

 

Livestock producers and especially those involved in broiler production should be proactive in promoting the welfare of existing systems to preempt negative publicity. This strategy will in the long-term, be more productive than maintaining a reactive and defensive response after the moral high ground has been seized through web-postings and protests.


 

Bipartisan Demand for Investigation into Possible Price Fixing of Beef

05/24/2022

Senators Elizabeth Warren (D-MA) and Senator Mike Rounds (R-SD) have introduced a resolution directing the Federal Trade Commission to determine whether price fixing by beef companies has occurred and to report back to Congress within a year.

 

Apparently, Senator Warren is fixated over the fact that four major companies (Cargill, Tyson Foods, JBS US and National Beef Packing Company) are responsible for processing 85% of cattle.  Concentration may not necessarily represent the potential for collusion especially in a competitive market but it does ensure efficiency and consistency in supply.

 

Countering the prevailing and politically inspired animus against "Big Beef" Donnie King, president of Tyson Foods noted that the “Purchase of cattle from ranchers and feed lots is based on supply and demand and that commercial pressures and availability in relation to demand sets retail prices”.


 

Carl Icahn Challenging The Kroger Company Over Gestation Crates

03/31/2022

On Wednesday, March 30th, the Kroger Company announced that activist investor, Carl Icahn, has submitted a petition nominating two candidates to the Board to be elected at the 2022 annual meeting of shareholders to take place on a date to be announced.

 

At issue is the demand by Icahn that Kroger Company move more aggressively to reject all pork derived from sows held in gestation crates.  At the present time, approximately 25 percent of sows in the U.S. are group-housed in accordance with Proposition #12 and similar legislation in Massachusetts, Florida and Arizona.  The newfound concern for welfare on the part of Icahn of livestock apparently stems from a family member affiliated to the HSUS.

 

In a prepared statement, Kroger noted that it, “works closely with our key suppliers to understand animal welfare topics and make progress together towards commitments”. The company also maintains that it solicits feedback from internal and third-party animal welfare experts, advocacy groups and customers.

 

Kroger cannot claim to be concerned over livestock welfare if it countenances gestational crates   in pork production.  The system is regarded as cruel, resulting in almost lifelong confinement of sentient animals to compartments approximately six by three foot that effectively restricts normal activities.

 

The National Pork Producers Council and the American Farm Bureau Federation have petitioned SCOTUS to consider the constitutionality of Proposition #12 and the case will be heard during the coming term.

 

In the interim, a large number of retailers and restaurant chains have indicated that they intend complying with accepted welfare standards. They have been moving progressively in cooperation with suppliers towards sourcing pork derived from sows held under group housing with an allowance of 24 square feet.

 

The Kroger Company is concerned over shareholder, customer and consumer perception of corporate SGE and goes to great length to publicize commitments to sustainability, welfare and environmental issues through a Public Responsibilities Committee. If members of this Committee and the management of the Kroger Company cannot recognize the inhumanity of confining sows to gestation crates, they need to spend a few days on farms observing sow housing in both crates and group pens.

 

Following adoption of California Proposition #2 in 2008, the egg industry moved progressively to replace conventional cages with alternative systems including aviaries and barn housing. As of February 2022, 111 million laying hens were maintained in either aviaries or barns out of approximately 310 million hens in production.  Progress is indicated by the fact that during the fourth quarter of 2020, only 79 million, hens were housed in other than conventional cages.  Since 2008, Cal-Maine Foods has invested more than $418 million in facilities and equipment to convert conventional cages on some farms to alternative systems.  In compliance with state requirements and responding to consumer and customer demand, Cal-Maine Foods has committed an additional $80 million to expanding cage-free production.

 

The pork industry must recognize that the welfare train has left the station, irrespective of the outcome of their appeal to SCOTUS. Their route should be to follow the lead of egg producers and convert notwithstanding the cost. The alternative to inaction by 75 percent of the industry may be that they will either run out of packers willing to process their hogs or experience lower prices for pork derived from sows in gestation crates.  Currently Congress is considering the PIGS Act that would establish a national standard for housing parent level and growing generations.


 

USDA and DOJ Must Get Tough on Meat Smuggling

02/21/2022

During the last quarter of 2021 APHIS seized and destroyed approximately one ton of prohibited and ilegally imported pork, poultry and ruminant products from New York City retailers.  Customs and Border Patrol (CBP) agricultural specialists recently confiscated 300 pounds of bologna at the Pas del Norte border crossing.  The CBP issued 1,050 Emergency Action Notifications for prohibited animal products that were seized at the Port of Los Angeles in 2021.

 

The risk and consequense of introducing animal diseases of significance including African Swine Fever, Avian Influenza, Exotic Newcastle disease, Foot and Mouth disease, and Swine Vesicular disease justify more intensive surveillance.  As with drugs, the quantity seized is often a fraction of the total quantity smuggled.  Since many of the shipments, especially those from China are hidden in containers with manifest documents describing the contents as consumer products, additional manpower and the Beagle Brigade should be reinforced.

 

With respect to small retail establishments selling embargoed animal products, federal agents should be deployed in greater numbers and fines should be commensurate with the potential damage that could be caused to the livestock industry and ultimately to consumers.

 

Given the consequences of introducing an exotic infection, importation or retailing of illegal meat products should not simply result in confiscation and a slap on the wrist.  Punitive fines and jail time should be imposed to discourage illegal importation.  Ethnic consumers must conform to the norms of American society and relinquish their taste for exotic meats and traditional presentations of pork, beef, and poultry.

 


 

Iowa Awards Grants to Small Packaging Plants

02/02/2022

The Iowa Economic Development Authority has awarded 15 grants from the state Butchery Innovation and Revitalization Fund. Grants ranged from $40,000 to $50,000 per applicant. And were intended to allow small-scale meat processors to expand their operations and to conform to acceptable standards of slaughter and processing. The program funded with a $750,000 allocation by the Iowa Legislature requires a 50 percent match by recipients.

 

Using public funds to support businesses is acceptable if the state receives either a direct or indirect return.  If the individual projects for which there were 54 applications, provided the possibility of a return, commercial finance institutions concentrating on the agricultural sector would have been willing to extend facilities.  Given the fact that the state must use public funding to support commercial enterprises suggests a high risk.  It will be interesting to learn how the state of Iowa or for that matter any other state or the USDA assess the return from similar grants. 

 

A secondary consideration will be the actual effect on increasing the supply of red meat at a competitive price.  Since the 2020 disruption in supply of red meat as a result of COVID among workers in large plants, politicians have recognized the potential for constituent support by questioning the integrity and value of consolidation and economies of scale in red-meat packing. There is a current movement within the USDA to attempt to create an alternative product stream by establishing and expanding small-scale processors that would otherwise have been non-viable.

 

The Iowa Economic Development Authority has the obligation to justify the expenditure of public funds to support small-scale enterprises by publishing periodic progress reports and subjecting programs to review by disinterested agricultural economists.

 


 

State Attorneys General Urge Stricter Enforcement of Packers and Stockyards Act

12/26/2021

Attorneys General of a number of agricultural states have urged USDA Secretary Tom Vilsack to intensify enforcement of the Packers’ and Stockyards Act 0f 1921.

 

The Attorneys General maintain that consolidation especially in the beef industry has weakened the bargaining position of beef ranchers and hog producers.  The letter stated "this consolidation makes it more difficult for producers to get the best prices for their products, forcing many smaller cattle, hog and chicken farms out of the market".

With regard to broilers, their contention is incorrect since the major integrators own their flocks and provide chicks and feed to contract growers. These independent farmers house and care for flocks during the growing cycle and are paid for the use of their facilities, labor and utilities.  The broiler contract system absolves the independent contractor from fluctuations in the market and input costs and ensures regular income as each flock is harvested.  The Packers’ and Stockyards Act protects contract growers with regard to accuracy of weight and prevents any manipulation of he basis of payment.

 

With regard to beef, the Attorneys General encouraged interagency collaboration of government departments and sharing of information with regard to markets. The letter urged the USDA to monitor the relationship between packers and suppliers.  The Attorneys General suggested investment in new competitive entrants into meat and poultry processing adding strength to existing small and very small facilities. 

 

Financial support of small operations would be an unfair use of government funds and would ultimately support inefficiency at the expense of shareholders in existing packing companies.  The Attorneys General are obviously interested in exercising existing antitrust legislation for political ends.  The letter proposes that the USDA and DOJ investigate ways in which large packers can be dismembered such as occurred with AT&T. This company served as a virtual landline monopoly in the 1970's until enforced breakup occurred in January 1982 after eight years of litigation.  Prior to the AT&T breakup, the previous exercise of the Sherman Antitrust Act of 1890 took place in 1911 following the successful lawsuit brought against Standard Oil by the U.S. government.

 

History is the witness to the fact that when governments attempt to intervene and regulate industries, unintended consequences hurt shareholders and consumers with the major benefit, if any, accruing to politicians and bureaucrats.


 

AFBF Urges Waivers for H-2A Workers from South Africa

12/21/2021

The American Farm Bureau Federation (AFBF) and sixty other agricultural groups are urging the Administration to grant exemptions for H-2A farm workers from South Africa.  COVID restrictions placed a hold on approximately 7,000 workers.  Given the spread of the Omicron variant of COVID in the U.S. with confirmation of its presence in more than 35 states and with 75 percent of new cases due to this variant, there appears little danger in bringing in vaccinated and tested workers from South Africa for work on fruit and produce farms.

 

The need to introduce temporary workers from the Republic of South Africa and elsewhere denotes the non-availability or disinclination of U.S. citizens to undertake agricultural labor. Relocation westward from the dustbowl in the early1930s to Pacific states supported displaced farmers and contributed to the growth of food production in California, Oregon and Washington. Have we progressed too far from the principle that unemployed people follow opportunities or have our social support programs created a class of “comfortable limpets”? In the immediate term the problem of farm labor will require collaboration between the Departments of State, Homeland Security and Agriculture and will necessitate an overhaul of immigration legislation that is long overdue. It is evident that higher levels of mechanization will be necessary to reduce labor input in food production with both higher wage rates and capital investment passed on to consumers. 


 

Plant-Based Burgers Inferior in Amino Acid Value Compared to Pork and Beef

12/12/2021

Studies conducted by the University of Illinois and Colorado State University demonstrated that plant-based burgers had lower digestible essential amino acid availability compared to plant-based substitutes.  The study* applied the digestible indispensable amino acid score (DIAAS) developed by the Food and Agricultural Organization that measures availability of specific essential amino acids.  Beef and pork burgers yielded excellent protein scores in excess of 100 for all ages based on the studies conducted.  The Impossible® burger based on pea protein provided an ‘excellent’ score for children aged 3 and up.  The Beyond® burger incorporating soy protein was adjudged a good’ source of protein with a DIAAS score of 83.

 

Professor Hans H. Stein of the Department of Animal Sciences and the Division of Nutritional Sciences at the University of Illinois stated, “We have previously observed that animal proteins have greater DIAAS values than plant-based proteins as observed in this experiment.  The nutritional value of plant-based burgers was reduced when fed with a bun.  In contrast, the DIAAS scores for beef and pork burgers were not adversely affected when combined with a bun.  The study demonstrated the superior amino acid digestibility from animal protein considered a necessary component of the human diet.”

 

*Fanelli, N. et al Digestible Indispensable Amino Acid Score (DIAAS) is Greater in Animal-Based Burgers Than in Plant-Based Burgers if Determined in Pigs. European Journal of Nutrition (2021) DOI:10.1007/s00394-0210-02658-1.


 

Employers’ Participation in COVID Prevention

12/06/2021

A report by CNBC documents the Willis Tower Watson survey of 543 employers concerning mandatory vaccination of employees against COVID. A total of 57 percent of those responding indicated that they currently mandate or will require vaccination.  Of these companies, 18 percent have already implemented a mandate and 32 percent of employers will follow the OSHA Emergency Temporary Standard when it takes effect.

 

Following litigation, the Administration has shelved the mandate and enforcement of vaccination for companies with more than 100 employees that would have covered 84 million workers. It is now a reality that average daily COVID case counts are rising and are higher than in late November 2020. With the emergence of the Omicron variant, more employers are considering a firm requirement for vaccination with exceptions only for those with sincere religious beliefs or medical exemptions.  Some employers are still concerned over resignations in a tight labor market and others are adopting a wait-and-see response.

 

Tyson Foods has vaccinated over 97 percent of workers through a coordinated program of providing financial incentives, facilitating on-site vaccination and most recently a company mandate requiring protection.

 

The success achieved by Tyson Foods and the National Football League confirms that the Willis Tower Watson survey determined that only three percent of employers reported any appreciable level of resignations following introduction of a vaccine mandate.

 

Vaccination is currently required by United Airlines, Delta, CVS Health, most hospitals and retail chains.  Predictably vaccine mandates are favored by many employees and in fact have attracted new workers and contributed to retention.  Employers will offer testing on a weekly basis to non-vaccinated employees with 90 percent of respondents to the survey either now requiring or planning to enforce masking.

 


 

Study Points to the Danger of Exotic Animals in Markets in China

11/29/2021

A recent study conducted by international epidemiologists and virologists co-authored by Professor Edward Holmes, an evolutionary biologist at the University of Sidney, Australia, has disclosed a high risk associated with contact between humans and exotic animals in China.  The study was in part supported by the National Key Research and Development Program of China and will be subject to peer review with subsequent publication.  A preliminary manuscript has been released on bioRxiv an open-access repository. Sponsored research was conducted as a scientific exercise and was not intended to probe the origins of SARS-COVID-2 responsible for COVID.

 

A dozen species of game animals sold in food markets in China, yielded 71 mammalian viruses including 18 regarded as “high risk” to both people and domestic animals.  Civets responsible for the dissemination of severe acute respiratory virus (SARS) two decades ago were regarded as the species carrying the highest number of potentially pathogenic viruses.

 

As part of the study, Dr. Shuo Su of the Nanchang Agriculture University, College of Veterinary Medicine, examined 1,725 animals from among 16 species collected in 19 provinces in China.  Many of the same species were sold at the Huanan Seafood Wholesale Market in Wuhan representing a hazard to consumers and the public in general.  Among the findings of the study, pangolins, civets and bamboo rats carried norovirus and influenza B.  Cross-species transmission of mammalian viruses was confirmed including isolation of a bat-associated coronavirus in a civets and a swine pneumovirus in pangolins.  If bat viruses can infect civets, it is possible that a further “species jump” to human could initiate an outbreak according to Dr. Holmes.  He characterized the consumption of exotic species in China as “the right virus in the right animal at the right time could easily trigger a global pandemic.” Dr. Holmes noted, “The study highlights exactly why the wild life trade and live animal markets are a pandemic accident waiting to happen.”

 

Shortly after the emergence of COVID in Wuhan, the Central Government banned trade in exotic species. Consumption of terrestrial wild animals has been prohibited since early 2020.


 

Bilateral Trade in the Background in Virtual Presidential Meeting

11/21/2021

The Monday night virtual discussion between President Biden and his counterpart President Xi was wide-ranging extending over three hours.  Topics reviewed included Taiwan, human rights, and cryptocurrency.  Although the Phase One Trade Agreement of January 2020 was raised, no definitive decisions emerged from the bilateral meeting attended by top advisors and cabinet members on both sides.

 

It is comforting to observe that at least the leaders of the two nations are talking and that China watchers are parsing and evaluating post-discussion statements by officials in positions of responsibility in China.  Agricultural groups including the American Soybean Association are urging for pressure to be placed on China to comply with the requirements of the Phase One Trade Agreement and negotiating a possible Phase Two Agreement when the current pact expires at the end of 2021.

 

Statistics estimate that China has only complied with 60 percent of the predicted value of negotiated imports. This is understandable given the slow start to trade in 2020 given COVID lockdowns. In effect, China has exceeded purchases of corn and is close to target on soybeans. 

 

In a recent interview, U.S. Trade Representative Ambassador Katherine Tai counseled for moderation in dealing with China.  As a Mandarin speaker and temporary student in China, she understands some of the concerns expressed by President Xi including the need for recognition as an equal partner in the World economy. China wishes the U.S to be less aggressive on sensitive on "internal issues" such as Hong Kong and the treatment of Uyghurs.  Unfortunately, these concerns will in the short term, take precedence over agricultural trade.

 

At the end of the day China will purchase what it needs and will continue to pursue policies that are beneficial to their economy.  Requiring them to refrain from industrial espionage, countenancing breaches of cyber security and activities that almost rise to the status of cold-war  tactics will only be resolved, if ever, over the long term.


 

Chipotle to Establish Environmental Targets

11/08/2021

On November 4th Chipotle Mexican Grill announced adoption of the Science Based Targets Initiative to halve greenhouse gas emissions by 2030.

 

In making the announcement, Lori Schalow, Chief of Corporate Affairs and Food Safety Officer noted, "we are committed to continue improvement and will actively do our part to reduce our greenhouse gas emissions and protect the Planet".  These sentiments are obligatory for a company catering to a young educated and environmentally conscious clientele.

 

To achieve the desired targets, the Company will apply smart-energy management systems in restaurants, will purchase renewable energy and install energy-sparing equipment.  The company will review transportation and warehousing in an attempt to reduce emissions especially for a third-party delivery of meals that represents a growing component of Chipotle revenue.

 

Of some concern is the intention of Chipotle to "explore protein and animal management solutions and promote carbon-reducing practices".  This implies that Chipotle will either directly or through third party consultants and auditors influence production practices through the supply-chain for ingredients incorporated in Chipotle menus.  Initially it is presumed that Chipotle will concentrate on produce, although meat, poultry and eggs incorporated into menu items will come under scrutiny.

 

Perhaps the most immediate and achievable component of the program will be to reduce waste and packaging.  When services are available, Chipotle will follow closed-loop packaging, reduce waste and divert from landfills. They could also serve smaller portions benefitting both health of their customers and the environment.

 

The Science Based Targets initiative comports with an earlier Environmental, Social and Governance (ESG) concentration that will among other components have an influence on executive remuneration.

 

The question remains as to whether the Chipotle announcement and goals are greenwashing or represent a concerted attempt to conform to norms of environmental compliance. Areas of concern include reducing greenhouse gas emissions, conserving water and energy and reducing diversion to landfills. Progress towards the 2030 goal should be documented in regular sustainability reports.


 

Retailers and Shippers Gearing Up for Christmas Demand

10/31/2021

This year has experienced increased demand as COVID restrictions are lifted. Concurrently a suppliers are faced with a shortage of workers, disruption in supply chains, congestion at ports and soaring costs for inland transport. In anticipation of the imbalance between supply and demand, major retailers and shippers have addressed deficiencies in their platforms and resources. 

 

Amazon is committed to maintaining the supply chain with optimizing safety, speed and efficiency.  Their intent is to “get customers what they want, when they want it, wherever they are this holiday season.” UPS has made similar claims and is determined not to repeat delays experienced in past years.  Target and Walmart are using third party delivery services but are also promoting in-store and curbside pickup linked to E-mail and text orders.

 

The extent of investment in facilities and human resources to supply anticipated demand is evidenced by a recent Amazon release.  The company announced hiring of 125,000 supply chain employees.  Their contribution will however be limited by lack of experience and the need for training.  The company has opened 250 new fulfillment centers including regional air hubs and delivery stations during 2021 requiring 100 new physical sites established in September.  Amazon, Walmart and Target have chartered vessels to ship products from Asia and are diverting container vessels to ports other than Los Angeles and Long Beach.  Amazon anticipates operating a fleet of over 80 aircraft for distribution in an attempt to match the capabilities of FedEx and UPS.

 

Improvements in service will depend on technology including updated inventory control systems ordering, tracking and final delivery.  It appears that Walmart may be benefiting from establishing in-house computer technology. Other retailers will benefit from acquisition of high-tech startups.

 

Progressive and successful U.S. businesses demonstrate flexibility, resourcefulness, planning and coordination at the expense of less efficient competitors.  Let us hope that with declining incidence rates of COVID due to higher rates of vaccination with restoration of our economy that the 2021 Christmas season will provide benefits to shareholders, consumers and workers through high demand for chicken and turkey products.


 

Continuing Improvement in COVID Statistics

10/24/2021

Mackenzie Bean writing in Becker’s Hospital Review, citing data from the Centers for Disease Control for the period ending October 22nd documented the following improvements in COVID statistics:

 

  • The seven-day case average is now 73,079, a 15.1 percent decrease from the previous week.

 

  • The seven-day hospitalization average is 6,004 a 10.3 percent drop from the previous week.

 

  • The current seven-day number of deaths is 1,253 down 4.3 percent from the previous week.

 

  • Approximately 66 percent of the U.S. population has received one dose of a COVID vaccine (220 million) and 57.2 percent have been fully vaccinated representing 190 million.

 

  • The seven-day average number of vaccines administered per day was 795,156 as at October 21st This is a 5.5 percent decrease from the previous week, a figure that is less reassuring.

 

  • The seven-day average for positivity from testing is 5.2 percent down 4.3 percent from the previous week. 

 

  • The seven-day average test volume for the second week of October was 1.4 million down 7.4 percent from the previous week.

 

  • Currently genomic analysis confirms that 99 percent of COVID cases are attributed to the Delta variant
  • A CDC model predicts a 20 percent decline in incident cases in the coming four weeks

 

USDA to Embark on an Initiative to Reduce Salmonella Infections

10/23/2021

In an October 19th release, the USDA FSIS announced a comprehensive effort to reduce the incidence rate of infections attributed to Salmonella.  According to Secretary Tom Vilsack, one million cases of salmonellosis occur annually in the U.S. with an estimate of almost a quarter due to contaminated chicken or turkey products.  Vilsack stated, "Today we are taking action to help prevent Salmonella contamination through the poultry supply chain and production system to protect public health".  Previously CHICK-NEWS has commented on the statements by Undersecretary Sandra Eskin relating to extending FSIS involvement to pre-harvest control.  This corresponds to the Vilsack statement that including "production systems". Secretary Eskin considers that "reducing Salmonella infections attributed to poultry is one of the Department's top priorities".

 

The USDA intends to request the National Advisory Committee for Microbiological Criteria in Foods to advise on how FSIS can apply technology to improve control of salmonellosis.  Implicit in the program is pre-harvest control to reduce the quantum of contamination entering processing plants. The FSIS intends to monitor both the serotypes of Salmonella entering plants and the quantitative and qualitative levels of contamination.

 

Reference is made to the petition by attorney Bill Marler of Marler Clark, demanding that FSIS declare frequently encountered Salmonella serotypes as adulterants. The FSIS apparently received close to 400 comments on the petition before the May 25th 2020, deadline supporting the petition, Marler cited 26,500 hospitalizations, 420 deaths and 130 outbreaks of salmonellosis annually with a cost ranging from $3 to $7 billion.  It is however acknowledged that only a quarter of the cases of salmonellosis are attributed to poultry meat.  Epidemiologic evidence points to mishandling, under-cooking and deficient kitchen hygiene in both homes and institutions as responsible for infection.

 

The program contemplated by the USDA-FSIS will require public comment before rule-making.


 

USDA Awards $10 Million for Research into Cell Cultured Protein

10/16/2021

The USDA has awarded $10 Million to Tufts University to establish a National Institute for Cellular Agriculture.  The grant was part of a $146 million investment in sustainable agricultural research.

 

Professor David Kaplan, an expert in cell cultured meat will head the Institute that will cooperate with scientists at Virginia Tech, Virginia State, University of California-Davis, MIT, and the University of Massachusetts.

 

The National Center will “integrate research, education, and extension activities to develop innovative technologies and improve outreach and extension activities in cellular agriculture.”

 

Why the USDA grant?

 

The Department of Agriculture should be supporting traditional livestock production and developing technology that reduces the environmental footprint of beef, pork, and poultry.  It is evident that many of the USDA “investments in sustainable agricultural research” run counter to the needs of traditional livestock production.

 

If cell-cultured meat has a future, it is up to venture capital funds, financial institutions and industry to invest in this technology. as in the E.U and Israel.  It is apparent that many of the policies of the present Administration, and specifically the Department of Agriculture, are directed at environmental issues and the policies of the Left to the detriment of traditional agriculture.


 

USDA Promoting Small-Scale Processing

10/09/2021

On October 5th, the USDA announced an additional $100 million in loan guarantees ostensibly to improve the U.S. supply chain with special reference to the meat and poultry sectors. 

 

In July, the USDA indicated their intention to invest $500 million to expand meat and poultry processing capacity with an additional $150 million to support small and very small facilities that were impacted by COVID restrictions.  The USDA has already dispersed $55 million to improve existing small plants and the Department is reviewing 250 applications requesting $100 million.

 

In commenting on the support programs, USDA Secretary Tom Vilsack, stated “As we build back better we must create more better and fairer markets that enhance competition and create economic opportunities across America’s agriculture and food supply chain.”  He added, “This initiative is another meaningful step to act on lessons from COVID-19 to build a food system that is fair, competitive, distributed, and resilient where a greater share of the food dollar goes to those growing, harvesting, processing, and preparing our food.”

 

The USDA policy of supporting medium and small decentralized plants is supported by the National Cattlemen's Beef Association.  Ethan Lane, VP of Governmental Affairs for the Association, stated “The pandemic accentuated a number of vulnerabilities within our supply chains - chiefly the choke point at the meat packing sector which has resulted in unsustainable prices for cattle producers and increased the cost of beef for consumers.”

 

It is apparent that the events of March through May of 2020, during which COVID restricted most large pork and beef plants to as little as half the regular output, is now being used as an excuse to restructure the meat industry to the advantage of cattle producers and feeders and to reduce the power of the four largest processors.

 

With respect to the broiler industry, any shortages on shelves during the second quarter of 2020 were due to panic buying and not to any disruption in supply.  The U.S. chicken industry has developed into an oligopoly in which the top five producers are responsible for about 65 percent of production. Notwithstanding corporate concentration  there are more than 160 plants among 22 states each with an output in excess of 600,000 birds up to 2,500,000 birds per week and operating at a high level of efficiency. As opposed to red meat production the broiler industry is integrated with respect to chick production, grow-out processing, and distribution. This provides security and benefits both to contractors and shareholders and ultimately for consumers.


 

Vaccine Mandates Preceded COVID

10/03/2021

In 1777 General George Washington issued a mandate to vaccinate the Revolutionary Army against smallpox despite an anticipated two percent fatality rate from the crude vaccine used. The preemptive action allowed training to proceed and preserved the readiness of the army to save the United States.  Receiving a smallpox vaccine was both patriotic and a recognized measure to preserve life and prevent the complications of the disease.

 

Despite legal challenge to vaccine mandates, most states have over the years required school children to be protected against a wide range of diseases. Vaccination has effectively eradicated many childhood diseases in the U.S. The need to continue to vaccinate populations is illustrated by the frequent upsurge in cases of measles as a result of vaccine rejection by various religious sects. In Staphorst a town with a population of 10,000 in the Netherlands experienced an outbreak of poliomyelitis affecting 38 children within a strict Calvinist sect. The outbreak only ceased following compulsory vaccination. The military has for decades imposed vaccine mandates to maintain operational readiness among armed forces deployed to areas where a number of serious infections are prevalent.

 

The recent round of COVID vaccination mandates issued by the Administration, hospital chains, and commercial firms are justified given the need to protect workers from infection by unvaccinated colleagues.  Vaccine refusal among healthcare workers and those coming into contact with the elderly is unconscionable.  There is no “right to infect” as Justice John Marshall Harlan ruled in 1905 stating that the Constitution did not sanction Americans to behave individually as they chose.  In his ruling dealing with a smallpox vaccine mandate he stated, “Real liberty for all could not exist if people could act regardless of the injury that may be done to others.”


 

COVID Update

09/24/2021

The Johns Hopkins University, Bloomberg School of Public Health maintains a dashboard on global and national COVID statistics. Effective September 23rd the CDC reported 42.8 million diagnosed COVID-19 cases. The current 7-day average daily incidence rate is 126,760 but appearing to be trending downwards.  There are currently 89,260 COVID patients in hospital, down from 95,911 in late August.

 

The CDC has documented 686,346 fatalities. In effect the actual number of COVID deaths probably exceeds 750,000 based on the comparable 2019 mortality rate. Daily mortality that lags incidence is increasing and on September 21st 3,145 fatalities were reported. During the 1918 influenza pandemic, the U.S. with a population of approximately 105 million recorded 675,000 fatalities.

 

Currently 182 million of our population is fully vaccinated, representing 54.7 percent of the total.  Of this number, 66 percent are adults with approximately 12 million adolescents aged between 12 and 17 years. The respective proportions of vaccine types administered to date comprised 55 percent Pfizer-BioNTech; 37 percent Moderna and 8 percent single-dose J&J. The 7-day average daily vaccination rate is 126,760 down from 150,625 in late August.

 

As widely reported, most of the hospitalizations and virtually all fatalities are in non-vaccinated patients.  Serious cases of COVID amongst those who were vaccinated are generally confined to the frail elderly and those with underlying health conditions including diabetes, obesity or immunosuppression.  It is noteworthy that a high proportion of incident cases now involve children who are not yet eligible for vaccination and who have returned to school with diverse protective measures of varying intensity including distancing, masking and enhanced ventilation.

 

There is a clear correlation between low vaccination rates and hospitalization in all areas of the U.S.  States with the lowest vaccine compliance are recording the highest levels of hospitalization including admission to ICU wards.

 

Epidemiologists and immunologists have evaluated data from the U.K. the U.S. and Israel concerning the desirability of booster doses to enhance protection among those who have received one of the three vaccines available in the U.S.  At a recent meeting the FDA panel deferred on a firm recommendation for boosting of the public in general but did agree that those over 65 and people with immune suppression or conditions that would render them susceptible to the effects of COVID could receive a booster vaccine. On Friday 24th the CDC firmly recommended to the White House that all recipients over 65 years of age and those with immunosuppression and workers with a high risk of exposure to COVID should receive a booster dose six months after their second mRNA vaccine.

 

At this time the emphasis should be placed on vaccinating those who are hesitant by assuring them of the safety and efficacy of all three vaccines with the Pfizer-BioNTech mRNA product having received full FDA approval. It is estimated that 70 million eligible residents of the U.S. have yet to receive their first dose of any of the three vaccines. These individuals, many clustered in rural communities, through disseminating the virus are prolonging the pandemic and delaying recovery of our society and economy. Covid is a public health problem and not a political issue.


 

China to Resume Beef Imports from Brazil

09/14/2021

Following evaluation of the report of two sporadic cases of bovine spongiform encephalopathy (BSE) in Brazil, China has agreed to resume importing beef.  Consideration of the World Organization for Animal Health (OIE) protocols relating to spontaneous BSE in old cows apparently resulted in lifting the embargo.  It is expected that trade will resume by September 19th.

 

China has a capricious history with regard to OIE rules and precedents. Authorities are prepared to resume beef imports from Brazil but continue to embargo pork from Germany as a result of outbreaks of African swine fever (ASF) affecting wild boars in limited and confined areas of Saxony and Brandenburg. China banned chicken imports from the U.S allegedly due to the 2015 HPAI epornitic but maintained an embargo for four years notwithstanding their own AI status. During this period China transshipped more than half of the paws consigned to Hong Kong to the Mainland. Under conditions of normal and rational trade relations, the OIE principle of regionalization would allow Germany to export pork to China where ASF is endemic in most hog-producing areas of the Nation.

 

Effectively China interprets international trade regulations and implements trade policy based on self-interest and protectionism. China is an untrustworthy trade partner. They import commodities only on the basis of opportunity, need and convenience always seeking advantages and where tolerated applying coercion. No supplier can rely on a stable trade relationship with China based on price, quality and conformity with international trade rules. 


 

North American Meat Institute Reacts to Administration Criticism

09/12/2021

Following statements relating to oligopoly in the red meat and poultry industries, the North American Meat Institute has responded publicly defending the current structure of the meat industry.

 

Mark Dopp, COO of the NAMI stated, "as with almost every industry meat and poultry packers and processors of all sizes have been and continued to be effected by the global pandemic and the inflationary trends that challenge the U.S. economy".

 

He continued, "American consumers of most goods and services are seeing higher costs largely due to a persistent and widespread labor shortage".  The NAMI stresses that poultry and meat markets are competitive and dynamic that this ultimately benefits consumers.  It is a general impression in the meat industries that certain members of the Administration do not understand the supply and demand factors and how they affect markets.

 

It is apparent that the Administration is intent on altering the current concentration in red meat packing. Whether this is justified or achievable is questionable. The important question is the possible outcome of injudicious regulations or creating subsidized competition on food security and ultimately availability and the price to consumers.


 

Instacart Faces Competition in Path to IPO

09/01/2021

The August 14th edition of The Economist considered the business prospects of Instacart.  Ms. Fidji Simo originally from France recently left Facebook to assume the position of CEO of Instacart on August 2nd.  Her principal task will be to establish profitability and maintain the goodwill of supermarkets that use the services of the company. It is estimated that Instacart has annual revenue of $1.5 billion and a valuation of $39 billion.  Profitability is yet another issue.

 

Following the advent of COVID, Instacart gained prominence as the intermediary between supermarkets and customers unwilling to shop in-person.  As the economy opens and brick and mortar receives greater patronage, the role of a delivery service is questioned other than for the homebound.  Price sensitivity is evident attested by growth of Aldi and other deep discounters.  Instacart faces considerable competition from delivery services provided by Shipt owned by Target, Walmart and Amazon Fresh.  DoorDash and Uber Eats have extended their services from meal delivery to groceries. 

 

Based on her experience with Facebook, Ms. Simo will extend the scope of Instacart to become a “high-margin digital-ads business”.  Ad revenue attained $300 million in 2020 and is growing at a triple-digit rate.  Instacart is also considering robotic warehouses to be installed in collaboration with supermarket partners hence an alliance with Fabric of Israel that has developed technology and installations suitable for integrating supermarket inventory with customer delivery.  This strategy may be too late as a number of supermarket chains are establishing their own platforms and installations including Kroger and Walmart, essentially to compete with Amazon Fresh.

 

The Prospectus issued in advance of the inevitable Instacart IPO will make interesting reading. The filing will denote the intended future relationship of the Company with respect to supermarkets.


 

Consumers Accepting Face Mask Mandates

08/27/2021

New Hope, a research group has documented a willingness by consumers to wear face coverings in indoor areas.  In late July, 39 percent of respondents indicated a definite intention of remasking.  An August 9th survey indicated an increase in mask compliance to 50 percent.  Conversely, respondents who indicated that they would probably not wear masks dropped from 12 percent to six percent over the two week period.  The change in attitude is attributed to the emergence of the Delta variant and the realization that clinical cases, hospitalizations, and fatalities are increasing sharply, especially in counties and states with a low proportion of the eligible population vaccinated.  Approximately 65 percent of respondents considered that masks should be worn in supermarkets, indoor concerts, and sporting events.  A high proportion of consumers indicated that they were more comfortable in stores with a mask mandate especially for employees and fellow customers.

 

 

 

 

The FDA approval of the Pfizer-BioNTech mRNA vaccine has contributed to mandates that will be adopted by the food supply chain from production through processing to retail.  Concurrently in many jurisdictions, state, county, or municipal authorities require masks in public places relieving retailers of the obligation to unilaterally require masks. Enforcement may still be a problem, especially with customers that are opposed to commonsense precautionary measures regarded as a “freedom and individual rights issue” and not simply a public health measure.


 

U.S. and Mexico to Hold Economic Discussions

08/22/2021

According to the August 23rd edition of the USAPEEC MondayLine, officials representing the Government of Mexico and their counterparts in the U.S. Administration will hold talks in Washington on September 9th to address trade and economic issues.  Topics of concern will include maintaining the integrity of supply chains, worker migration and economic cooperation. The agriculture segment of the U.S. is dependent on southern labor and Mexico is the leading importer of U.S. poultry products valued at $465 million during the first half of 2021.

 

It is now apparent that migrants from Central America might be dissuaded from moving northward to the U.S. if they are able to participate in economic opportunities in Southern Mexico. It is possible that the U.S. will consider establishing maquiladoras in designated areas in Mexico to provide migrants from Honduras, Nicaragua and El Salvador with some form of economic security and personal safety. Most politicians recognize that constructing an intrusion-proof border with Mexico is both a financial and practical impossibility, despite the rhetoric.  It is now time to consider alternatives that will require the cooperation of our southern neighbor, and advancing humanitarian principles within the scope of the USMCA.

 


 

Food Service and Chains Subscribe to Better Chicken Commitment

08/05/2021

Welfare activist organization, Compassion in World Farming USA, has announced that Aramark, Compass Group, Nestle USA, Panera Bread, Shake Shack, Sodexo, and Target have formed the Working Group for Broiler Welfare.

 

This consortium has committed to the Better Chicken Commitment that comprises:

  • Maximum stocking density of 6.0 pounds per square foot
  • Enriched environment including lighting to meet Global Animal Partnership Standards
  • Controlled-atmosphere stun-to-kill
  • Third-party auditing
  • By 2026, slow-growing breeds will be required consistent with the RSPCA Broiler Breed Welfare Assessment Protocol.

 

These requirements will obviously restrict sourcing to specific producers that are willing to invest in compliance and will incur additional costs.  With the exception of Target, the list of participating companies (“the usual suspects”) are able to pass on additional costs to consumers.  This is especially the situation with the food service companies that supply corporate dining and universities where sentiment is more important than price. 

 

Target may come to regret their affiliation, especially when slow-growing breeds are required in four and a half years time since they will be at a competitive disadvantage relative to other major supermarket chains.  CHICK-NEWS favors choice with alternatives to conventional products offered at higher prices but with commensurate and factual information to consumers.

 

The Compassion in World Farming Standards are essentially adopted from E.U. and U.K. specifications that have little scientific justification and are based on sentiment and anthropomorphism. The underlying objective is less “welfare” than outright dismantling of livestock production in favor of a vegan diet.


 

Argentine Beef Exports Fall

07/15/2021

As a result of the injudicious decision by the Government of Argentine to restrict exports, volume fell by 6.6 percent in May 2021 to 55,700 metric tons compared to the corresponding month in 2020.  The ban on exports took effect in mid-May and accordingly June shipments will be considerably lower.  It is estimated that China receives 77 percent of beef shipments exported by Argentine. 

 

The Government attempted to reduce the price of beef for domestic consumers by imposing a ban on exports to all but a few nations. The unintended result was that abattoirs were closed reducing domestic supply, raising prices and contributing to unemployment. Restricting exports resulted in a substantial reduction in foreign earnings that will further exacerbate the dire economic situation. An example of truly ham-handed management of an economy by a beleaguered socialist Peronista government quickly running out of “someone else’s money” --to quote a pevious  U.K. Prime Minister, Margret Thatcher.


 

Nature’s Fynd Receives VC Funding

07/08/2021

Chicago-based Nature’s Fynd Inc. has raised $158 million from VC companies apparently representing Jeff Bezos, Bill Gates, and Al Gore. These names are quoted (or misquoted) frequently in press reports on wannabee IPOs. Implied endorsement provides a measure of implied approval, verging on the sanctification of any business plan involving sustainability, welfare and even profit. Natures Fynd intend to deliver meatless breakfast patties and burgers based on a range of fungal cultures early in 2022. 

 

The entire alternative foods sector with an emphasis on dairy products achieved sales of $7 billion in 2020, representing a 27 percent increase over the previous year, albeit from a small base.  Sales of alt. foods should be compared to the $733 billion conventional food industry.  Aware of the growth and popularity of alt. meats, major protein producers including Hormel, Cargill, Perdue, and Maple Leaf Foods have invested in their own brands competing with Beyond Meat and Impossible Foods. 

 

Considerable publicity is accorded to the adoption of an alt. meat product by a QSR or restaurant chain even if only as a test. In contrast there is less media coverage following the quiet removal of alt. meat menu items. 

 

Much of the growth in alt. meat products is attributed to the curiosity factor.  Given the low number of committed vegetarians among consumers and the shifting volume of flexitarians, demand will increase, but at a slower rate and nowhere near attainment of a 60 percent market share of global sales of conventional meat by 2040. Projections by some industry observers are simply extrapolations of recent annual increases over the long term.  Alt. meats as with any product undergo life cycles.

 

A major restraint to future expansion of alt. meat is the apparent lack of profitability.  Reports from public-quoted companies where financial data is disclosed denote a high cost of production and little confirmation of economies of scale in production.


 

Elimination of Feral Hogs

07/06/2021

The emergence of African swine fever in Europe and Asia has highlighted the role of feral hogs in both perpetuating and disseminating infection.  It is estimated that there are more than seven million wild hogs in the U.S. that are collectively responsible for close to $3 billion in damage to crops, fencing and pastureland each year.  If African swine fever were to be introduced into the feral hog population, the U.S. would lose export markets and the cost of control and eradication would be immense.

 

CHICK-NEWS has reported previously on measures to eliminate hogs on a county and state basis.  Colorado, Nebraska, Iowa and Minnesota now claim to h