Poultry Industry News

In a release dated April 1st 2026 Cal-Maine Foods Inc. (CALM) announced results for the 3rd Quarter of FY 2026 ending February 28th 2026. This review summarizes data provided in the Company release and the concurrently filed SEC 10-Q Report.

Cal-Maine Foods exceeded the analysts’ revenue estimate of $642 million by 3.9 percent achieving $667 million. The consensus estimate for EPS of $0.76 was exceeded by 39.5 percent at $1.06. 

It is noted that market conditions during Q3 2026 were less favorable compared with Q3 2025 resulting in an average Cal-Maine unit revenue of $1.77 per dozen for all eggs, compared to a corresponding price of $4.06 per dozen, a decline of 56.5 percent. Financial results that were above Street consensus for revenue and EPS raised CALM price from the pre-release value of $79.04 at the close on March 31st by 6.0 percent to $83.82 at noon April 1st.

Despite acquiring further-processing enterprises, Cal-Maine still represents a bellwether for the shell egg sector as the only public-quoted company in the U.S. industry, supplying close to 22 percent of domestic shell egg consumption and encompassing all varieties. The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

Notes: $22.2 million ‘other income,’ (including $11.2 million interest earned and $11.7 million patronage presumably E-B) in Q3 FY2026 compared to $27.4 million in Q3 FY2025:

 CALM Trailing P/E =3.6.  Beta = 0.25

52-Week Range in Share Price:  $71.92 to $126.40.   50-day Moving average of $83.45

Market close, Tuesday. March 31st  $79.04 pre-release.

Market noon, Wednesday, April 1st  $83.84

Shareholding distribution:-  92.5 percent of shares held by institutions; 10.0 percent insiders; 13.1 percent of float was short on March 13th

Revenue Comparison Q3 2026 v Q3 2025

Revenue Category.                 Q3 2026.       Q3 2025

Conventional eggs. (%)             42.4.              71.7

Specialty eggs (%).                    43.4.              23.2

Prepared Foods (%).                    9.5.                0.8

Egg products. (%)                        2.8.                3.5

Other (%)                                     1.9.                0.8         

Total (%).                                 100.0.             100.0     

Q3 Value $ million                 $666.9.        $1,417.7

CONTRIBUTION OF CAL-MAINE PRODUCT SEGMENTS TO Q3 REVENUE

Channel Category.                 Q3 2026.           Q3 2025

Retail (%).                                84.1.                   84.6

Foodservice (%).                      14.1.                   14.6

Other (%).                                  1.8.                      0.8         

Total (%).                               100.0.                  100.0

Q3 Value $ million               $666.9.             $1,417.7

CONTRIBUTION OF CAL-MAINE CHANNEL SEGMENTS TO Q3 REVENUE

In reviewing the CALM Q3 FY2026 report and the SEC 10-Q submission the following values represent key data for the most recent Quarter (with Q3 FY2025 and percentage differences in parentheses for comparison):-

Conventional shell-egg sales attained $283.2 million in Q3 2026. This category of shell eggs comprised 42.4 percent of total shell egg revenue. ($572.3 million, in Q3 2025, based on 71.7 percent of revenue. Sales value for conventional shell eggs was down 70.0% reflecting lower average unit value for this category).

• Specialty shell-egg sales attained $289.1 million in Q3 2026. This category of shell eggs comprised 42.4 percent of total shell egg revenue. ($1,345,382 million, in Q3 2025, based on 23.2 percent of revenue. Sales value for specialty shell eggs was down 16.9% reflecting lower average unit value for this category).

• Prepared Foods sales attained $63.6 million in Q3 2026. This category comprised 9.5 percent of total revenue. ($11.7 million, in Q3 2025, based on 0.8 percent of revenue). Sales value for Prepared Foods was up 441% reflecting the contributions of Joint Venture Crepini Foods and recently acquired Echo Lake Foods.

• Egg Product sales attained $18.4 million in Q3 2026. This category comprised 2.8 percent of total revenue. ($49.3 million, in Q3 2026, based on 3.5 percent of total revenue). Sales value for Egg Products was down 62.7% reflecting lower volume of liquids with diversion to higher value egg products.

• Sales to the Retail Channel attained $560.8 million in Q3 2026, comprising 84.1 percent of total revenue ($1,199,697 million in Q3 2025, representing 84.6%) Sales to the Food Service sector attained $94.4 million in Q3 2026, comprising 14.1 percent of segment revenue ($207.3 million in Q3 2025, representing 14.6% of total revenue)

• Dozen shell eggs sold (thousands): 324,059 (331,395; -2.2%)

• Average selling price of all shell eggs: $1.766 per dozen; ($4.060 per dozen;          -56.5%).
• Average selling price of specialty eggs (excluding co-pack): $2.313 cents per dozen; ($2.784 per dozen; -16.9%).

• Average selling price of conventional eggs: $1.423 cents per dozen; ($4.766 cents per dozen; -70.1%).

• Differential benefiting specialty eggs over conventional eggs: $0.89 per dozen;   (-$1.982 cents per dozen.)

• Specialty eggs as a proportion of volume sold: 38.6%; (35.7%; -8.1%)

• Specialty eggs as a proportion of sales value: 50.5%; (24.4%; +107.0 %)

• Proportion of eggs sold that were produced by Cal-Maine and their contract flocks in Q2 2026: 91.5% (88.4%; +3.5%).

• Cost of purchased eggs: $2.88 per dozen reflecting 27.6 million dozen valued at $79.5 million

• Feed cost 49.4 cents per dozen (including specialty and breeder diets) (49.2 cents per dozen, down 0.4%)

The Q3-2026 10-Q report contained the following statements on pricing:-

“The majority of our conventional eggs are priced and sold under frameworks that generally utilize market-based formulas tied to independently quoted regional wholesale market quotes. The majority of our specialty eggs are sold under frameworks that do not utilize market-based formulas, although we do have some customers that prefer market-based pricing for cage-free eggs. As a result, specialty egg prices typically do not fluctuate as much as conventional pricing”.

“During first quarter fiscal 2026, a higher proportion of our conventional eggs were sold on a hybrid pricing model that takes into account both our cost of production as well as wholesale market prices, instead of solely market-based pricing, in response to customer demand. We believe the hybrid pricing arrangement may help some customers better plan and manage their businesses and reinforces our role as a trusted supplier. Although hybrid pricing may reduce our profitability when egg prices are high, compared to pure market-based pricing, it could enhance our profitability when egg prices are low, and lead to reduced volatility in our financial results. A majority of our conventional eggs continue to be priced and sold under frameworks that generally utilize market-based formulas tied to independently quoted regional wholesale market quotes”.

The top three customers in FY 2025 represented 49.2 percent of sales value, with Walmart and Sam’s Club comprising 33.6 percent

Derived Q3 FY 2026 production costs for all categories of shell eggs expressed as cents per dozen (rounded) comprised:-

• Feed               49.4
• Production.    45.61
• Nest run.        95.0
• Packing          33.2
• Delivery.          8.6
• Marketing.       4.8
• Overhead.      12.42      

Notes: 1.0 Provision for pullet depreciation, is presumably included in the ‘production’ expense category

           2.0 Includes General and Administration expenses

           3.0 Divisor 322.6 million dozen sold

Cal-Maine Foods maintained a flock of 48.0 million hens on February 28th 2025 reflecting acquisitions and growth, with 14.3 million pullets plus parent breeders representing under two percent of the total flock. 

• Effective May 31st 2025 production capacities comprised1:-

• Hens: 51.8 million on 49 farms
• Pullets:14.3 million on 37 farms.
• Packing: 22,490 cph in 50 plants.
• Hatching: 356,300 pullet chicks per week in 2 facilities.
• Parent breeders: 215,000 hens.
• Feed : 1,000 tons per hour in 30 plants.
• Egg products: 72,700 lbs. per hour. 

1. To be updated after release of FY 2026 Annual Report

The following observations relate to the comparison of Q3 2026 with the corresponding Q3 2025:-

• Cal-Maine Foods was not affected by the HPAI epornitic during FY 2025. The Company reported the loss of 350,000 pullets in early March 2026 (Q4) on a farm in Maryland acquired from ISE in 2025. Management is applying appropriate biosecurity precautions as noted in the Analysts’ call.

• Comparing Q3 2026 with Q3 2025, gross profit was negatively impacted by lower unit revenue for conventional eggs but with minimal effect on specialty eggs. The average 4.4 percent higher feed cost to 49.4 cents per dozen. Cal-Maine recorded a 9.1 percent higher value for the ‘other farm production’ cost category including labor, consumables and maintenance.
• In a market characterized by low unit prices for conventional shell-eggs, the relative contribution of specialty eggs is more important to net earnings in contrast to an up-market for conventional eggs.

The Q3 press release repeated comments from previous reports noting “Significant progress on proactive steps to add production capacity and help mitigate the egg supply shortage across the country”, including:

• A 2.0% increase in the average number of layer hens during Q3 2026 compared to the prior-year quarter, reflecting repopulation of flocks and both organic and expansion by acquisition.
• A 13.0% increase in the Company’s breeder flocks during Q3 FY 2026 compared to the end of the prior-year quarter.
• A 42% increase in total chicks hatched during Q3 2026 compared to the prior-year quarter.
• Continued progress on ongoing organic expansion projects that are expected to add approximately 1.1 million cage-free layer hens and 250,000 pullets and contract production of 1.2 million free-range layer hens during FY 2026.
• Acquisitions over Q1 through Q3 amounted to $299 million.

• Clean Eggs LLC in Texas with a capacity of 667,000 hens with extensive acreage, pullet rearing and packing was purchased for $23.7 million representing a hen-equivalent value of $35.
•  Creighton Bros. in Indiana with 3.2 million hens, pullet rearing, feed mill, packing and extensive acreage for $129 million representing a hen-equivalent value of $39. 

• Added production support through the integration of recently acquired assets”

In commenting on Q3 results Sherman Miller CEO and president stated, “The shell egg market in the third quarter provided an important real-time test of our strategy. Periods of egg price softness highlighted that our performance is not simply a function of spot market conditions, but of how effectively we manage mix, pricing structures, costs, and capital across the cycle. Despite materially lower egg prices compared to the historic levels seen in the prior year, our diversified portfolio and operational execution enabled us to deliver solid results and maintain momentum. In our view, this reinforces the resilience of the model we are building that we expect will lead to more durable normalized earnings power”

Miller continued, “We believe the recent decline in wholesale egg prices reflects improved supply following prior-year HPAI disruptions, during our last fiscal quarter, depopulations reported by the USDA were down 70.6% and the average national layer flock increased 2.2%, year over year. In parallel, more stable purchasing patterns across retail and foodservice have contributed to lower wholesale prices, while retail pricing continues to adjust more gradually”.

He concluded “At the same time, we continue to invest in strengthening the long-term structure of the business. The acquisition of certain assets of Creighton Brothers and Crystal Lake advances several elements of our strategy simultaneously: expanding the scale and geographic reach of our shell egg platform, increasing internal sourcing capabilities for egg-based ingredients, and enhancing our ability to support the growth of our prepared foods business. By integrating shell egg production, egg products, and prepared foods more tightly within our value chain, we believe we can improve supply security, increase operational efficiency, and reinforce the economics of our prepared foods platform. Deploying capital into assets that deepen these structural advantages is central to our disciplined capital allocation framework”

Extracts from the 10-Q provided insight into Cal-Maine pricing and marketing including:-

“Our operating results are materially impacted by market prices for eggs and feed grains (corn and soybean meal), which are highly volatile, independent of each other, and out of our control. Generally, higher market prices for eggs have a positive impact on our financial results while higher market prices for feed grains have a negative impact on our financial results. Our pricing for shell eggs is negotiated with our customers on individual terms. We sell our shell eggs at prices based on formulas that take into account, in varying ways, independently quoted regional wholesale market prices for shell eggs, formulas related to our costs of production, such as grain-based and variations of cost-plus arrangements, or hybrid models including cost of production and wholesale market prices”.

“Almost all of our conventional eggs are priced and sold under frameworks that generally utilize market-based formulas tied to independently quoted regional wholesale market quotes or utilize the hybrid models described above. The majority of our specialty eggs are sold under frameworks that do not utilize market-based formulas and instead are based on cost of production, although we do have some customers that prefer market-based pricing for cage-free eggs. As a result, specialty egg prices typically do not fluctuate as much as conventional pricing. We do not sell eggs directly to consumers or set the prices at which eggs are sold to consumers”.

“During the first two quarters of fiscal 2026, a higher proportion of our conventional eggs were sold on a hybrid pricing model that takes into account both our cost of production as well as wholesale market prices, instead of solely market-based pricing, in

response to customer demand. We believe the hybrid pricing arrangement may help some customers better plan and manage their businesses and reinforces our role as a trusted supplier. Although hybrid pricing may reduce our profitability when egg prices are high, compared to pure market-based pricing, it could enhance our profitability when egg prices are low, and lead to reduced volatility in our financial results”.

With respect to production systems and the rate of transition to cage-free housing the Company Q-10 stated “We are focused on adjusting our cage-free production capacity with a goal of meeting the future needs of our customers in light of changing state requirements and our customers’ goals. As always, we strive to offer a product mix that aligns with current and anticipated customer purchase decisions. We are engaging with our customers to help them meet their announced goals and needs. We have invested significant capital in recent years to acquire and construct cage-free facilities, and we expect our focus for future expansion will continue to include cage-free facilities. Our volume of cage-free egg sales has continued to increase and account for a larger share of our product mix”.

“In Q3 of FY 2026, cage-free egg revenue represented approximately a third of our total shell egg revenue, compared to 23.4% in the Q3 of FY 2025. At the same time, we understand the importance of our continued ability to provide conventional eggs in order to provide our customers with a variety of egg choices and to address hunger in

our communities”.

As of April 14th Cal-Maine Foods ceased to be a “controlled company” with conversion of Class A shares to common stock. As part of the buy-back program the Company purchased shares to the value of $50 million from entities representing the Founder family. Future additional purchases valued at $450 million have been authorized by the Board.

Cal Maine Foods has expanded by purchase of existing integrated production facilities but has extended acquisitions to value-added products over the past two years.

The 10-Q Report filed on October 1st 2025 documented approved capital investment of $257.3 million for FY 2026. Provisions comprised a feed mill (3.8% of proposed capital expenditure); Egg products equipment (7.6%); Expansion of prepared Foods (5.8%) and new cage-free housing and conversions (82.8%). Of this total $210.2 million (81.7%) was committed with $47.1 million to be expended. There was no update of these values for Q3 2026

This special edition of CHICK-NEWS is sponsored by VAL-CO Industries in association with ONCE by Signify and features the Optient gradient lighting system.  A combination of Optient Lighting and the FUZE V feeder pan will be demonstrated on the VAL-CO booth 1030 at PEAK.  Company representatives will review experimental and field data confirming the financial benefits of the combination from enhancer feed conversion efficiency.

U.S. District Judge Thomas O. Rice has advanced a class action lawsuit by workers at the Wallula, WA. plant.  The Court denied, in part, the motion by Tyson to dismiss the suit relating to wage payments from 2016 through early 2023.  At issue is the alleged failure by Tyson to provide compliant meal breaks, minimum wage, overtime and termination payments.  The Court dismissed claims relating to rest-breaks on the basis of insufficient, specific, factual evidence.  The Court also dismissed with prejudice claims relating to reimbursement of workers for gloves and boots.  The class was allowed twenty days to file a second amended complaint relating to the aspects of the claims that were denied.  The significance of this case relates to the eventual rulings that will become case law and will influence similar claims in subsequent cases in different jurisdictions.

In a separate issue, an ex-employee of the Tyson Foods, Ringgold, VA. plant filed a March 16th complaint in the U.S. District Court for the Western District of Virginia.  The Plaintiff, Alvin Clark, alleges race and age discrimination, retaliation and a hostile work environment.  Clark worked as a maintenance mechanic at the plant from mid-July 2024 until March 2025.  He alleges he was denied promotion based on race and age despite suitable qualifications.  The lawsuit was filed in accordance with Title VII of the Civil Rights Act, Section 1981 of the Age Discrimination Employment Act and the Virginia Human Rights Act and the Virginia Workplace Retaliation and Safety Laws.

In a statement, the Company emphasized a zero-tolerance policy for racism, harassment or retaliation in the workplace and is committed to a respectful environment for team members.  Tyson Foods “Categorically denies the allegations and will address them through the appropriate legal process”.

In accordance with the Organic Foods Production Act of 1990, the USDA Agricultural Marketing Service (AMS) is soliciting public comment on amending the List of Allowed and Prohibited Substances referred to as the “National List”.  Of importance to the poultry industry is a proposed removal of restrictions on incorporation of methionine in organic poultry feed.

Methionine is synthesized in a fermentation process using selected microorganisms that may or may not have been subject to genetic modification.  Notwithstanding the fact that production of synthetic amino acids is essentially an industrial-scale process, the final products including methionine, lysine, tryptophan and threonine, all essential amino acids and are structurally identical and are metabolized in the same way as the natural equivalents in vegetable ingredients whether conventional or organic.  In the absence of commercially available methionine and other essential amino acids, it is difficult and expensive to formulate feeds that are nutritionally adequate and contribute to optimal growth and sustainability.

As with many decisions made by statutory committees functioning under the Organic Foods Production Act, unnecessary and scientifically baseless restrictions and regulations are applied. Decisions rely on sentiment, misunderstanding and in the worst instance, mendacity with vested interests disfavoring commercial livestock production.

Broiler Chick Placements, March 2026

According to the March 18th 2026 USDA Broiler Hatchery Report, 1,269 million eggs were set over five weeks extending from February 14th through March 14th 2026 inclusive. This was approximately two percent higher compared to the corresponding period in 2025.

Total chick placements for the U.S. over the five-week period amounted to 973 million chicks. Claimed hatchability for the period averaged 78.7 Percent (79.2 percent for previous 5-week period) for eggs set three weeks earlier. Each 1.0 percent change in hatchability represents approximately 1.96 million chicks placed per week and 1.86 million broilers processed, assuming five percent culls and mortality and within the current range of weekly settings.

Cumulative chick placements for the period January 4th through December 27th 2025 amounted to 10.00 billion chicks up approximately one percent from calendar 2024. Chick placements for 2026 to March 14th have attained 1.95 billion, up two percent from the corresponding period in 2025.

According to the March 23rd 2025 edition of USDA Chickens and Eggs, pullet breeder chicks hatched and intended for U.S. placement during February 2026 amounted to 9.06 million, up 10.1 percent (0.83 million pullet chicks) from February 2025. Broiler breeder hen complement attained 60.67 million on February 1st 2026, 2.0 percent (1.26 million hens) down from February 2025 but 7.3 percent (4.76 million hens) higher than January 2026.

Broiler Production March 2026

As documented in the March 26th 2026 USDA Weekly Poultry Slaughter Reports for the processing week ending March 21st 2026, 170.2 million broilers were processed at 6.50 lbs. live. This was 1.9 percent more than the 167.0 million processed during the corresponding week in March 2025. Broilers processed in 2026 to date amounted to 2,036 million, 3.7 percent more than the 1,964 million during the corresponding period in 2025.

Ready to cook (RTC) weight for the most recent week in March was 839.7 million lbs. (380,086 metric tons).  This was 1.8 percent more than the 825.1 million lbs. during the corresponding week in March 2025. Dressing percentage was a nominal 76.0 percent. For 2026 to date RTC broiler production attained 10,137 million lbs. (4.597 million metric tons). This quantity was 3.3 percent more than for the corresponding period in 2025.

The USDA posted live-weight data for the past week ending March 21st and YTD 2026 including:-

February 2026 Frozen Inventory

According to the March 24th 2026 USDA Cold Storage Report, stocks of broiler products as of February 28th 2026 compared to February 28th 2025 showed differences with respect to the following categories:-

• Total Chicken category attained 780.1 million lbs. (353,798 metric tons) corresponding to approximately one week of production based on recent weekly RTC output. The February 28th 2026 inventory was down 1.7 percent compared to 793,487 million lbs. (359,858 metric tons) on February 28th 2025 and down 0.5 percent from the previous month of January 2026.

• Leg Quarters were down 19.4 percent to 48.8 million lbs. compared to February 28th 2025 consistent with the data on exports. Inventory was up 8.1 percent from January 2026. Given the trend in inventory of leg quarters it is evident that this category continues to be shipped in varying quantities as the principal (96 percent) chicken export product to a number of nations.
• The Breasts and Breast Meat category was down 7.5 percent from February 28th 2025 to 234.4 million lbs. indicating a relatively higher domestic consumer demand for this category possibly reflecting concern over inflation in the cost of alternative proteins. The February 28th 2026 stock level was 1.2 percent higher than January 31st 2026. The trend through 2025 and into 2026 suggests stable retail and food service demand for the white meat category.  This is despite promotion of chicken sandwiches and wraps by QSRs in the face of a higher cost for beef coupled with an increasing pattern of eat-at-home consumption.

• Total inventory of dark meat (drumsticks legs, thighs and thigh quarters but excluding leg quarters) on February 28th 2026 decreased 3.5 percent from February 28th 2025 to 64.2 million lbs. This difference suggests an increase in domestic demand for lower-priced dark meat against the prevailing price of white chicken meat. Higher prices for competitive proteins offer an opportunity to increase domestic demand for this category with innovative product development and promotion.

• Wings showed a 1.5 percent decrease from February 28th 2025, contributing to a stock of 52.9 million lbs. Inventory of wings was 3.2 percent higher compared to the end of January 2026. Movement in stock over the past 12 months has demonstrated slightly higher demand for this category despite competition from “boneless wings.” Increased consumption traditionally associated with significant sports events including College bowls and the NFL Super Bowl traditionally reduce the volumes of storage in January through April. Unit price increased progressively during 2024 but plateaued in 2025 due to consumer fatigue and competition from competing protein snacks despite continued interest in professional and collegiate football.

• The inventory of Paws and Feet was 27.0 percent lower than on February 28th 2025 to 24.4 million lbs. Stock was 9.1 percent lower than on January 31st 2026. 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, a trend that is re-emerging.
• The Other category comprising 333.0 million lbs. on February 28th 2026 was up 6.6 percent from February 28th 2025 but represented a substantial 42.7 percent of inventory. The high proportion of the Other category suggests further classification or re-allocation by USDA to the designated major categories.

February 2026 Processed Broiler Production

The monthly USDA Poultry Slaughter Report was released on March 27th covering February 2026. The month comprised 20 week-days, the same as February 2025. The following values were documented for the month of February 2026:-

• A total of 753.5 million broilers were processed in February 2026, up 22.4 million or 3.1 percent from February 2025;
• Total live weight in February 2026 attained 5,030 million lbs., up 223.0 million lbs. or 4.6 percent from February 2025;
• Unit live weight in February 2026 was 6.68 lbs., up 0.11lb. (1.7 percent) from February 2025.
• RTC in February 2026 attained 3,807 million lbs., up 173.5 million lbs. or 4.8 percent from February 2006.
• WOG yield in February 2026 was up an inconsequential 0.1 percent to 75.7 percent, from 75.6 percent in February 2025.
• The proportion marketed as chilled in February 2026 comprised 93.3 percent of RTC output, unchanged from February 2025.
• Ante-mortem condemnation as a proportion of live weight attained 0.19 percent during February 2026 down from 0.21 percent in February 2025.
• Post-mortem condemnations as a proportion of processed mass corresponded to 0.48 percent during February 2026, unchanged from February 2025. 

Comments

Mexico has recognized the OIE principle of regionalization after intensive negotiations between SENASICA and the U.S. counterpart, USDA-APHIS assisted by USAPEEC. Provided importing nations adhere to OIE guidelines on regionalization, localized outbreaks of avian influenza or possibly Newcastle disease will affect exports only from states or counties with outbreaks in commercial flocks. The response of China, Japan and some other nations is less predictable with bans placed on a nationwide or statewide basis. 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. The challenge facing the U.S. as the second largest exporting nation after Brazil, will be to gain acceptance for controlled vaccination against HPAI in specific industry sectors and regions with appropriate surveillance and certification to the satisfaction of importing nations.

The Livestock Consolidation Research Act has been introduced into Congress by Senators Chuck Grassley (R-IA) and Tina Smith (D-MN).  The intent of the legislation would be to direct the USDA Economic Research Service to analyze whether concentration in beef packing impacts farmers, ranchers and ultimately, retail prices to consumers.

Senator Grassley stated, “Consolidation in the meat and poultry industry impacts Iowa producers and consumers alike and right now they’re feeling the squeeze.”  He pointed to the fact that four major packers are responsible for 85 percent of beef capacity.

Currently, there is inordinate unjustified and unsubstantiated finger-pointing, accusing packers of market manipulation and applying pressure on feeders.  The title of the proposed Act essentially acknowledges that there is a lack of information concerning the economic impact of consolidation that at face value improves efficiency and should lower costs.  The high retail price of beef in 2026 is a function of disequilibrium between supply and demand.  The national herd is at a record low due to disruption of the production cycle extending from cow-calf operations through grow-out and feeding.  Reasons for the shortage of available slaughter stock include a prolonged drought, high production costs, closure of the border with Mexico following outbreaks of New World screwworm, an erratic tariff policy and an overall failure to project and maintain production levels in relation to future demand.

The legislation has been endorsed by the National Farmers Union and Senators Grassley and Smith intend to include their directive in the long-delayed Farm Bill.

It would be best for the USDA-ERS to concentrate on the beef industry in their analysis, since this is where the U.S, problem exists.  Probing into the chicken industry would appear to be an unnecessary exercise given the integrated structure of broiler production and the diversity of scope and the number of companies producing chickens for domestic consumption and export.

On March 24th, Smithfield Foods, a subsidiary of the WH Group and a leading pork producer in the U.S., posted results for Q4 and FY 2025 ending December 28th.  The company posted net income of $998 million on sales of $15,531 million with a diluted EPS of $2.51.  These values compare with FY 2024 with net income of $970 million on sales of $14,142 million and a diluted EPS of $2.51.

Smithfield Foods posted total assets of $12,177 million with good and intangible assets valued at $2,883 million.  Long-term debt, lease obligations and other liabilities amounted to $2,505 million.

On March 24th, Smithfield Foods (SFD) had a market capitalization of $9.09 billion.  Over the past 52 weeks, share price has ranged from a low of $18.55 to $26.07 with a 50-day moving average of $23.98.  The share trades with a forward P/E of 10.2.  Trailing 12-month operating margin was 8.1 percent and profit margin 5.7 percent.  The company returned 6.9 percent on assets and 14.0 percent on equity.  SFD closed at $23.49 on March 23rd and rose to $25.32 by 10H40 following the release of results, closing at $24.47 on March 24th.   

According to the March 10th release of USDA GAIN Report PR2026-12, broiler production in Brazil will increase in 2026 by 1.6 percent over 2025 to 15,700 million metric tons.  Brazil will export 5,150 million metric tons, a decline of 1.9 percent from 2025, but representing 32.8 percent of RTC production.  Domestic offtake will increase by 0.7 percent to 10,555 million metric tons, representing a per capita consumption value of 49.6 kg. (109 lbs.) assuming a population of 213 million.

In reviewing production costs in Brazil, the following proportions were assigned by GAIN representatives in Brazil:

The report indicates a production cost in Parana state of $US 0.40 per lb. (4.7R$/kg.).

Legislation has been introduced in Minnesota (HF4080) and Iowa (HF2734) to ban vertical integration in meat packing and to require “large” retailers from owning an interest in meat packing plants. The motivation for this legislation is questioned. The initiatives may simply to  reflect “feel good” lawmaking confirm that individual state representatives are supporting constituents in advance of the mid-terms.

Predictably, the United Food and Commercial Workers International Union support the two initiatives.  Mark Lauritsen, Director of Food Processing, Packing and Manufacturing Division for UFCW, stated, “When grocery retailers vertically integrate, we all suffer – workers, farmers, ranchers and consumers.”  He continued, “For decades the Federal Trade Commission, the Justice Department (sic) and the USDA have failed to enforce anti-trust laws against dominant retailers.”

It would be interesting to review an impartial evaluation of the impact of investment by retailers in meat packers – if a substantial current reality.  Naturally, the UFCW would be opposed to strong and profitable meat-packing companies since this would curb their bargaining power.

As a matter of record, packers have endured losses over the past three years.  According to the Beef Industry Profit Tracker, losses in 2024 were $75 per head, rising to $131 in 2025 and in 2026, a negative margin of $205 per head is projected.

In Q1 2026, Tyson Foods posted a $319 million operating loss on beef sales of $5,771 million.

Over recent weeks, packer margin for the 7-day period ending March 14 estimated a loss of $55 per head, an improvement on the previous month.  The benefit enjoyed by packers was at the expense of feedlot operators experiencing a loss of $49 per head.  It is estimated that in 2026, feedlot operators and other feeders would generate a positive margin of $155 per head.

During the McDonald’s Corp. earnings call, Chris Kempczinski, CEO, emphasized the need for the company to apply discounts and feature value meals. McDonald’s will launch a new value menu in April featuring a 4-piece chicken McNuggets priced at $3 (75 cents a pop?) and a breakfast bundle including a McMuffin, hash brown and coffee for $4.

It is not expected that McDonald’s will sweep the QSR market with their value meals since competitors Wendy’s, Burger King and Taco Bell are also offering value promotions. This confirms that price as a restraint to traffic, especially among the lower- and middle-income demographics.

Fortune cited a Pew research survey finding 72 percent of consumers regard economic conditions as ‘fair’ or ‘poor’ and 40 percent express a pessimistic view for the future. 

Over FY 2025 ending December 31st, McDonald’s earned $8,563 million on revenue of $26,855 million with a diluted EPS of $11.95.  Comparable figures for FY 2024 were net earnings of $8,223 million on revenues of $25,920 million with a diluted EPS of $11.39.

McDonald’s posted a global comparable sales increase of 3.1 percent for FY 2025 with the U.S. attaining 2.1 percent.

On December 31st, 2025, McDonald’s had assets of $59,515 million with long-term debt and lease obligations of $55,908 million.  On March 16th, market cap was $232,630 million compared to $223,350 million on March 31st, 2025.  The 52-week range in share price was $283.47 to $341.25 with a 50-day moving average of $320.68.  Forward P/E is 27.3.  On a 12-month training basis, operating margin was 45.0 percent and profit margin 31.9 percent.

The introduction of value meals will place McDonald’s  and burger-centric QSRs in direct competition with chicken chains including Chick-fil-A and Popeye’s Louisiana Kitchen among others, that have the advantage of lower cost for a chicken filet compared to a ground beef patty.

According to a March 15th Food and Drug Administration (FDA) release, the Agency in collaboration with the Centers for Disease Control and Prevention are investigating an outbreak of E. coli 0157:H7 infection.  Traceback has implicated RAW FARM brand shredded cheddar cheese. 

Based on the determination, FDA recommended a voluntary removal that was rejected by the manufacturer.  To date, seven cases among California, Florida and Texas have been documented with two hospitalizations.  Onset of illness ranges from September 1st, 2025, to February 13th, 2026.  Whole genome sequencing confirmed the genetic relationship among isolates from patients, although no RAW FARM cheddar cheese products have yielded the implicated E. coli, [but additional sampling and assay is in progress.

It is extremely injudicious of any company to reject a suggested FDA recall.  In the event of isolation of the implicated pathogen from company product, RAW FARM, LLC, will be vulnerable to product liability claims for which there will be no valid defense.  Unfortunately, E. coli 0157:H7, with four children affected in this outbreak, may have severe health consequences. These include hemolytic uremia syndrome requiring prolonged hospitalization and the prospect of future renal dysfunction.

Raw Farm LLC is located in Fresno, CA with production facilities in Kerman, CA. The operation sells raw milk and derived products including cheeses. The CEO (self-styled Chief Excitement {or Excrement} Officer of the fifth-generation enterprise is Mark McAfee who is a leader in promoting non-pasteurized milk.

For the record, products from Raw Farms Inc. have been involved in 13 documented outbreaks of milk-borne infections including salmonellosis and STEC E.coli  in recent years. These incidents have involved close to 240 diagnosed cases and numerous hospitalizations with many children affected by hemolytic uremia syndrome. 

It is estimated by USDA* that E. coli 0157 STEC infections cost $504 million in 2023 for approximately 176,000 cases with a mean per-case cost of $2,865.  With the hemolytic uremia complication, cost per case may rise into six figures.

*Hoffmann, S., et al Economic Burden of Foodborne Illnesses Acquired in the United States Foodborne Pathogens and Disease 22:4-14 (2025)

According to a March 18th release by the Bureau of Labor Statistics, the Producer Price Index (PPI) increased by 0.5 percent in February, coming in above the 0.3 percent expectation. On a 12-month basis PPI was higher by 3.4 percent. Core PPI inflation (excluding, now very volatile energy and food was at 3.9 percent.  Food prices increased by 2.4 percent.

The March 18th PPI followed the Department of Commerce Consumer Price Index CPI) that rose 2.8 percent year-over-year for the headline and 3.1 percent for the Core Index.

 The seasonally adjusted one-month changes from January to February among food items included:- processed chicken (1.6 percent); turkeys (0.1 percent); dairy products( 0.6 percent); beef and veal (1.8 percent) with pork the highest at 2.6 percent.  Beef and veal increased 13 percent year-over-year with a 7.9 percent increase in the third quarter of 2025, moderating in the fourth quarter but edging up in February.

The situation for eggs reflected wide swings that cannot be attributed to flock losses as a result of HPAI or demand.  From December to January, eggs declined by 63.9 percent but from January to February increased by 93.6 percent.  The annual February 2025 to February 2026 change was a decline of 80.4 percent.

The USDA has announced that the Biden-era Poultry Grower Payment Rule will be delayed until December 31st, 2027.  The Agricultural Marketing Service requires the delay to consider the estimated cost and policy issues involved.

The intent of the amendment under the Packers and Stockyards Act, finalized on January 16th, 2025, would have prohibited live poultry integrators from reducing a grower’s compensation based on tournament-rankings.  The regulations would have required integrators to allow “fair compensation” and require additional disclosures, especially in relation to upgrades requiring capital investment.

Delaying the rule would apparently save integrators and contractors approximately $5 million in administrative costs over the first year.

Predictably, the delay in implementation of the Rule was supported by the National Chicken Council with Harrison Kircher, president of the Council, stating, “We applaud Secretary Rollins and the Trump Administration for their thoughtful review of this Biden-era regulation and for listening to chicken farmers across the country who oppose it.”

According to the NCC, the Rule would have been disruptive and “undermine a longstanding performance-based compensation model”.  In addition, the Rule could potentially have limited bonuses for the most productive contractors.

Any delay or recission of an onerous regulation that adds to the cost of production is considered appropriate since higher costs are invariably passed on to consumers or result in reduced domestic offtake and exports.

Introduction

The Optient gradient lighting system developed by Once by Signify offers improved welfare and increased margin through lower feed conversion.  Although maximizing return is an important objective, it is possible to indirectly attain higher weight gain or lower feed conversion efficiency through upgrading welfare. Financial return can be optimized by producing a more saleable product with enhanced quality. 

House with two feeder lines showing the relative light intensities from the Optient gradient lighting system

VAL-CO Industries has been appointed as the distributor of the Optient lighting system for the U.S. and Canada.  The system is fully compatible with the FUZE® V feeder, and the combination provides synergy in flock performance, welfare, sustainability with an optimal grow-out margin.

The Science Supporting Gradient Lighting

It is evident that broiler chickens favor a variation in intensity of illumination. With gradient lighting feeding and drinking are stimulated at higher light intensity (30 to 40lux) compared to darker areas of the house (5 to 10 lux). These lower levels of light allow for natural behaviors including non-aggressive interaction, dust-bathing and resting.  Gradient (variable area) light intensity in a house contrasts with traditional uniform lighting at 20 lux from ceiling fixtures that spread light evenly across the entire floor. Studies from 2009 onwards have examined the response of flocks to gradient lighting.  This has generated data on quantifiable physiological responses and performance data confirming benefits for integrators.

A comprehensive evaluation of gradient lighting was conducted by the Center of Excellence for Poultry Science at the University of Arkansas in 2023*.  Lighting regimes that were compared included intensities of 5 lux, 20 lux, natural light and gradient light ranging from approximately 5 lux in the dark areas to 40 lux adjacent to feeder lines.

The effects among the four treatments were compared with respect to conventional production parameters including live weight, daily weight gain, adjusted feed conversion efficiency, livability, skeletal integrity, gait and footpad scores.  The study also involved an assessment of natural behaviors including curiosity, physical activity and dust bathing.  The performance and behavioral factors were correlated with brain function including gene expression for neurotransmitters contributing to either stress or homeostasis.

With respect to the four growing trials terminating at 56, 51, 49 and 55 days respectively, the gradient light treatment consistently resulted in a very highly significantly lower adjusted feed conversion, approximating two points, compared to a house operated at 20 lux.  Daily weight gain and final weight were also numerically superior.  There was no statistical difference in total mortality through 49 days.  The category designated “leg problems” was statistically lower in the gradient light treatment at a level of approximately 1.5 percent among the 4,880 broilers in each treatment, compared to higher values in the other three treatments. Cumulative mortality was in region of 5.4 percent among all four light treatments.  It was considered important that litter was significantly drier in the house with the gradient light installation. This has implications for intestinal health and suppression of coccidiosis Moisture content was assessed by the number of zones in the house that yielded levels over 35 percent. Gradient light resulted in a factor of 0.2 compared to the 20-lux treatment at an average of 2.1 zones.  Daily physical activity as measured electronically was significantly higher in the house with gradient light at 155 joules per day compared to 80 joules per day in the treatment grown with a uniform light intensity of 20 lux. This confirms that gradient light stimulates movement that is correlated with improved skeletal integrity and locomotory function.  The number of dust bathing holes in litter signifying natural activity was significantly higher with gradient lighting compared to the 20-lux treatment on days 9, 16 and 23 during the trial.

Light affects the serotonin (5-HT) system in the brain stem.  This parameter together with measurements of tryptophan hydroxylase 2, tyrosine hydroxylase and glucocorticoid receptor denoted reduced stress in broilers reared under gradient light. Measures of brain function are correlated with observed behavior of flocks. There are also positive relationships between neurotransmitters and enhanced production parameters including feed conversion efficiency, gait score and the prevalence of leg abnormalities in a flock.  These benefits were attributed to the gradient lighting system contributing to increased movement in the house, less stress and higher feed and water intake compared to flocks exposed to a constant light intensity of 20 lux.

*Kang, S.W. et al. Effects of a variable light intensity lighting program on the welfare and performance of commercial broiler chickens. Frontiers in Physiology. doi.org/10.3389/fphys.2023. 1059055.

Field Trials

A team of scientists conducted a series of field evaluations comparing light intensities of 20 lux with gradient lighting using the Optient system.  The series of comparisons was conducted from June 2023 through August 2024. The scope of the field trial involved seven integrators in five U.S. states (AR, MS, NC, TX and CA) and Ontario.  Twentyfour comparisons involved ten farms with replication of whole-house comparisons.  Harvest ages ranged from 39 to 58 days and live weights from 4.5 to 9.5 pounds. 

Feed conversion efficiency was the important difference between the constant 20 lux and the gradient light treatments using the Optient system.  There was a difference of 3 points in adjusted feed conversion with a p-value of 0.0001 confirming a very highly significant difference in favor of gradient lighting over ceiling lighting at a uniform 20 lux.  There were no statistically significant differences in harvest weight, average daily gain or livability among the treatments  compared in the meta-analysis.

  Parameter.               Gradient Lighting.     Ceiling Lighting.    Difference.    P Value

Weight (lbs.).                 7.58.                               7.52.                    +0.06.         0.11

Adj. FCR.                      1.75                                1.78.                     -0.03          0.0001

Mortality (%).                5.4.                                 5.4.                          0.              n/a

Summary of 24 field trials comparing Optient Lighting with conventional ceiling lighting

Financial Value of Improved Feed Conversion

The very highly significant 3-point difference in feed conversion over 24 field trials, represents 0.12 pounds of feed per bird saved applying the live weights and adjusted feed conversion ratios for the Optient system compared to ceiling light, as tabulated in the previous section. The difference amounted to 8.25 tons of feed saved each year.  This assumes 25,000 birds per house at 0.8ft.2 stocking density; a cycle length of 66 days (48 days growing plus 18 inter-cycle) contributing to 5.5 cycles per year for a total of 137,500 birds per house.

The financial benefit was calculated for a five-year period with the base cost of feed at $230 per ton, increasing by three percent annually.  Applying a five percent discount factor to the annual benefits derived from feed saving, the value of the improved feed conversion efficiency amounted to $8,599.

The Optient installation in the house with a 25,000 flock would cost $6,500 compared to a conventional ceiling LED system at $8,000.  The $1,500 differential added to the discounted annual benefits over five years provides a net present value of $10,099 for an Optient light system in the 500 by 40 ft. house.

Conclusion

The Optient lighting system manufactured by Once, a subsidiary of Signify is justified by feed saving.  The range of scientific evaluations provides a mechanism for improved performance and welfare using gradient lighting for broilers. Field trials conducted on the Optient system established a 3-point improvement in feed conversion efficiency projecting realistic prices for feed over a five-year period confirming the financial benefit for integrators specifying the Optient gradient Lighting system.  The contractor would benefit from reduced power consumption since Optient lights are rated at 2 watts compared to conventional LED ceiling lights at 10 watts.  In addition, growers using gradient lighting would benefit from enhanced settlement payment with contracts specifying incentives for improved feed conversion or harvested weight livability or their combination.

OVERVIEW

Total exports of bone-in broiler parts and feet during January 2026 attained 244,547 metric tons, 2.0 percent higher than in January 2025 (239,680 metric tons). Total value of broiler exports decreased by 5.1 percent to $349.9 million ($368.0 million).

Total export volume of turkey products during January 2026 attained 19,452 metric tons, 33.5 percent more than in January 2026 (14,561 metric tons). Total value of turkey exports increased by 76.1 percent to $91.6 million ($52.0 million).

Average unit price attained by the broiler industry is constrained by the fact that leg quarters comprise over 96 percent of broiler meat exports by volume (excluding feet). 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. To increase sales volume and value the U.S. industry will have to become more customer-centric offering value-added presentations with attributes required by importers. Whether this will increase margins is questionable given that leg quarters are regarded by U.S. integrators as a by-product of broiler production. A more profitable long-term strategy for the U.S. industry would be to develop products using dark meat to compete with and displace pork and beef in the domestic retail and institutional markets. Due to a shortage and hence high price for beef products this opportunity is now evident.

HPAI is now accepted to be panornitic affecting the poultry meat industries of six continents with seasonal and sporadic outbreaks. The incidence rate and location of cases in the U.S. has limited the eligibility for export from many plants depending on restrictions imposed by importing nations. Incident cases in the U.S. continued at a high rate in egg-production flocks and in turkeys during late 2025 with a resurgence evident during the first quarter of 2026.

Uncertainty surrounding tariff policy is an added complication potentially impacting export volume in 2026. In the event of reduced exports, leg quarters would be diverted to the domestic market resulting in a depression in average value derived from a processed bird.

To offset an anticipated decline in exports of U.S. agricultural products the USDA will make available $285 million during 2026 for trade promotion including trade reciprocity missions and credit guarantees under the GSM-102 program. The USAPEEC received $7.0 million for export promotion for FY 2026. Of this total, $5.8 million was through the Market Access Program (MAP) and $1.2 million through the Foreign Market Development Program (FMDP). For FY 2026 The USDA will distribute $181 million among 68 industry associations under the MAP and $31 million under the FMDP to 18 organizations.

EXPORT VOLUMES AND PRICES FOR BROILER MEAT 2025

For comparison, during 2025 the National Chicken Council (NCC), citing USDA-FAS data, documented exports of 3,171,206 metric tons of chicken parts and other forms (whole and prepared), down 3.8 percent from January-December 2024. Exports were valued at $4,764 million with a weighted average unit value of $1,503 per metric ton.

The NCC breakdown of chicken exports for 2025 by proportion and unit price for each category compared with the corresponding months in 2024 (with the unit price in parentheses) comprised:-

• Chicken parts (excluding feet) 1%; Unit value $1,395 per metric ton ($1,365)
• Prepared chicken 0%; Unit value $4,640 per metric ton ($4,244)
• Whole chicken 9%; Unit value $1,688 per metric ton ($1,755)
• Composite Total 0%; Av. value $1,503 per metric ton ($1,466)

EXPORT VOLUMES AND PRICES FOR BROILER MEAT JANUARY 2026

The following table prepared from USDA data circulated by the USAPEEC, compares values for poultry meat exports during January 2026 compared with the corresponding month during 2025:-

COMPARISON OF U.S. CHICKEN AND TURKEY EXPORTS

JANUARY 2026 COMPARED TO JANUARY 2025

BROILER EXPORTS

Total broiler parts, predominantly leg quarters but including feet, exported during January 2026 compared with the corresponding months in 2025 increased by 2.6 percent in volume but value was down 4.9 percent. Unit value was 6.8 percent lower to $1,431 per metric ton.

For comparison during 2024 exports of parts and feet attained 3,251,000 metric tons valued at $4,689 million, down 10.5 percent in volume and down 1.1 percent in value compared to 2023. Unit value was up 10.7 percent to $1,442 per metric ton

During 2025 exports attained 3,131,807 metric tons valued at $4,644 million, down 3.4 percent in volume and down 1.2 percent in value compared to 2024. Unit value was up 2.2 percent to $1,482 per metric ton

Broiler imports in 2025 are projected to attain an inconsequential 152.2 million lbs. (69,025 metric tons) compared to 82,000 metric tons (180,000 million lbs.) in 2024. Exporters to the U.S. in 2025 comprised Chile (78.4 percent of volume) and Canada (21.2 percent).

Projected imports for 2026 will be 132 million lbs. (59.900 metric tons)

The top five importers of broiler meat represented 47.3 percent of shipments during January 2026. The top ten importers comprised 67.4 percent of the total volume reflecting concentration among the significant importing nations.

First-ranked Mexico imported 56,948 metric tons in January representing 23.3 percent of shipments to our southern USMCA partner valued at $66.8 million with a unit price of $1,173 per metric ton. Volume and value were respectively 13.6 and 19.5 percent lower than for the corresponding month in 2025

Second-ranked Cuba imported 15,663 metric tons in January representing 6.4 percent of shipments that were valued at $19.4 million with a unit price of $1,219 per metric ton. Volume and value were respectively 40.2 and 43.2 percent lower than for the corresponding period in 2025. Continued trade with Cuba is imperiled by declining economic strength. Their capacity to import was recently exacerbated by the energy crisis resulting from loss of support by Venezuela and U.S. policy on the supply of fuel to the nation.

China declined to 12th in rank among importers by 29.0 percent in volume to 5,880 tons and concurrently by 46.0 percent in value to $16.5 million in January 2026 compared to the corresponding month in 2025. Unit value decreased by 24.0 percent to $2,806 per metric ton reflecting a high proportion of feet in consignments

Nations gaining in volume compared to the corresponding January 2025 (with the percentage change indicated) in descending order of volume with ranking indicated by numeral were:-

1. Viet Nam, (+92%); 6. Guatemala, (+3%); 7. Philippines, (+97%); 8. Angola, (+71%); 9. Haiti, (+83%); 10, Turkmenistan., (+246%) and 14. Hong Kong, (+136%)

Losses during January 2026 offset the gains in exports with declines for:-

1. Mexico, (-14%); 2. Cuba, (-40%); 3. Taiwan, (-31%); 5. Canada, (-9%);
2. Dominican Republic, (-5%) and 12. China, (-29).

TURKEY EXPORTS

The volume of turkey meat exported during January 2026 increased by 33.6 percent to 19,452 metric tons compared to January 2025 with value 76.1 percent higher at $91.6 million. Average unit value was 31.9 percent higher at $4,709 per metric ton.

Imports of turkey products attained 15,000 metric tons (33 million lbs.) in 2024 with a similar projection for 2025.

Mexico imported 6,184 tons during January 2026 representing 76.4 percent of volume. Value attained $79 million comprising 86.2 percent of revenue at a unit price of $4,881 per ton.

During January, Guatemala imported 597 tons, Costa Rica 421 tons, Dominican Republic 269 tons collectively 1,287 tons representing 6.6 percent of exports of turkey products

Canada imported 297 tons (1.5 percent of exports) valued at $1.5 million with a unit price of $5,050 per ton. 

It is important to recognize that exports of chicken and turkey meat products to our USMCA partners amounted to $1,264 million in 2021, $1,647 million during 2022, $1,696 in 2023 and close to $2,000 million during 2025. It will be necessary for all three parties to the USMCA to respect the terms of the Agreement in good faith 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. agriculture.

The emergence of H5N1strain avian influenza virus with a Eurasian genome in migratory waterfowl in all four Flyways of the U.S. during 2022 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 lesser extent in broilers. The probability of additional outbreaks of HPAI over succeeding weeks appears likely with recorded outbreaks in turkey farms in ND, SD and MN. Consistent with fall migration of waterfowl. Incident cases affecting egg-production and turkey flocks will be a function of shedding by migratory and domestic birds and possibly free-living mammals or even extension from dairy herds. Protection of commercial flocks at present relies on the intensity and efficiency of biosecurity including wild-bird laser repellant installations, representing investment in structural improvements and operational procedures. These measures are apparently inadequate to provide absolute protection, suggesting the need for preventive vaccination in high-risk areas for egg-producing, breeder and turkey flocks.

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 were more constrained with plants processing turkeys in Minnesota, the Dakotas, Wisconsin and Iowa impacted. The future challenge will be to gain acceptance for limited preventive vaccination of laying hens and turkeys in high-risk areas accompanied by intensive surveillance. It is now accepted that H5N1 HPAI is panornitic in distribution among commercial and migratory birds across six continents. The infection is now seasonally or regionally endemic in many nations with intensive poultry production, suggesting that vaccination will have to be accepted among trading partners as an adjunct to control measures in accordance with WOAH policy.

The live-bird market system supplying metropolitan areas, the presence of numerous backyard flocks, gamefowl 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 WOAH compartmentalization for breeders and regionalization (zoning) to counties or states for commercial production.

On March 16th 2026 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering actual 2024, a projection for 2025 and a forecast for 2026.

The revised 2025 projection for broiler production was almost unchanged at 48,006 million lbs. (23.707 million metric tons) up 2.2 percent from 2024. USDA projected per capita consumption of 102.9 lbs. (45.7 kg.) for 2025, up 1.8 percent from 2024. Exports will attain 6,672 million lbs. (3.026 million metric tons), 0.1 percent below the previous year.

The 2026 USDA forecast for broiler production will be 48,700 million lbs. (22,086 million metric tons) up 1.4 percent from 2025 with per capita consumption up 1.4 percent to 104.3 lbs. (47.3 kg). Exports will be down by 0.1 percent compared to 2025 at 6,670 million lbs. (3.2946670 million metric tons), equivalent to 13.7 percent of production.

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

Source: Livestock, Dairy and Poultry Outlook released March 16th 2026

The March 16th USDA report updated the projection for the turkey industry during 2025 including annual production of 4,844 million lbs. (2.197 million metric tons), down 5.4 percent from 2024. Consumption in 2025 is projected to be 13.2 lbs. (6.0kg.) per capita, down by 4.4 percent from the previous year. Export volume will attain 425 million lbs. (192,744 metric tons) in 2025. Values for production and consumption of RTC turkey in 2025 and 2026 are considered to be realistic, given year to date data, the prevailing economy, variable weekly poult placements, trends in production levels, losses from HPAI and inventories consistent with season.

The 2026 forecast for turkey production is 4,930 million lbs. (2.236 million metric tons) up an optimistic 1.8 percent from 2025 with per capita consumption up 0.8 percent to 13.3 lbs. (6.0 kg). Exports will be 5.9 percent lower than in 2025 to 400 million lbs. (181,406 metric tons) equivalent to 8.1 percent of production. This implies a reduction in selling prices for whole birds and products

Export projections do not allow for a breakdown in trade relations with existing major partners including Mexico, Canada and China nor the impact of catastrophic diseases including HPAI and vvND in either the U.S. or importing nations

AgriStats, Inc. has reached settlement in numerous civil cases alleging collusion with broiler integrators and pork packers to the detriment of direct and indirect purchasers of meat and poultry. Terms have not been disclosed. Previously, meat-packer and poultry integrators (Defendants) settled with various Plaintiff classes including in the turkey antitrust litigation and parallel pork and broiler claims.

Agreement for the negotiated settlements have yet to be approved by courts.  End-use consumer Plaintiffs in the broiler case will file for a limited remand from the U.S. Court of Appeals for the 7th Circuit.

The announced settlement of civil cases is separate from the federal antitrust case that will proceed to trial on May 4th.

Beyond Meat has received a warning letter from the NASDAQ Stock Exchange involving mandatory delisting because the stock price has fallen below $1.00 for more than 30 days.  A final decision on de-listing will be made on August 31st.  To comply with NASDAQ rules, closing bid prices must exceed $1.00 for 10 days. Beyond Meat has been listed since May 2nd 2019 attaining a peak market capitalization of $14 billion and a stock price of $235 in mid-July 2019. 

The company has been unsuccessful in averting a prolonged decline in sales.  On November 10, 2025, Beyond Meat reported on the quarter ending September 27th, posting a loss of $111 million on sales of $70.2 million with a negative EPS of $1.44.  This compares with the corresponding quarter of 2024 with a loss of $27 million on sales of $81 million and a negative EPS of $0.41.  The 13 percent decline in sales indicates lack of demand for the company’s vegetable-based meat substitute despite changes in packaging and pricing.

On March 16th, Beyond Meat, Inc. announced a delay in the publication of Q4 and Fiscal 2025 results.  The company cited “internal control issues related to inventory”.  In the recent company statement, the annual report for FY 2025 should be filed by March 31, 2026, but the company stated that additional delays may be announced due to “material weakness” in internal controls over reporting.  It is anticipated that the company will report a 16 percent decline in FY 2025 revenue from $326 million to $275 million.

Currently Beyond Meat carries $1,320 million in long-term debt with an accumulated deficit of $1,434 million.  In the November 10th Q3 filing, inventory was valued at $110.3 million, representing 40 percent of the projected FY 2025 revenue.

For the past 12 months, BYND shares have fallen from a high of $7.69 to $0.50 with a 50-day moving average of $0.82.  The stock closed on March 17th at $0.75. Thirty-two percent of the float was short on February 27

Beyond Meat has had a market capitalization of $367 million on March 17th.  Twelve-month trailing profit margin was -81 percent with an operating margin of -47 percent.

The statement by the Chairman accompanying the Q3 results represented yet again an unsubstantiated stream of optimism, disconnected from the current financial predicament. This is attributed to lack of demand for a product that is in reality more expensive and inferior to real meat. In addition margins have been impacted by mismanagement and failure to control costs.

The end for this Company is nigh and it will not be pretty for shareholders and investors with no White Knights on the horizon.

The most significant impact from the ongoing conflict with Iran will be the fallout from the closure of the Strait of Hormuz.  Most commentators anticipate the potential duration of obstruction to passage to extend to a few weeks. This predictable cessation of free navigation will have profound consequences to energy, fertilizer and aluminum markets. There is a likelihood that with a prolonged war, Houthi rebels, a surrogate of Iran, may impede transit through the Red Sea at the southern chokepoint of Bab-el-Mandep.    

A sharp rise in the price of gasoline and diesel fuel is an immediate result of the conflict and will raise production costs for agriculture and industry.  Since China is impacted, this nation may respond with sanctions on imports from the U.S.  The postponement of the meeting between Presidents Trump and Xi presages further trade complications. Bilateral diplomacy may be necessary to moderate the prevailing opinion that the U.S. initiated the war with a deleterious impact on China.

 If exports of soybeans and corn from the U.S. are curtailed or cancelled, prices will fall benefitting livestock producers at the expense of row-crop farmers.  Predictably the government will come to their rescue at a cost to taxpayers and adding to the burgeoning national debt.

The quicker that free passage through the Strait of Hormuz is restored, the quicker the agricultural economy will return to the predicted pattern of costs, prices and export volumes for 2026.

On Monday, March 16th, union workers at the JBS Greeley, beef plant launched a strike with wages and working conditions as major issues of contention.  The United Food and Commercial Workers, Local 7, represents close to 4,000 employees at the plant. The Company and the Union have yet to resolve include increased line speeds to 420 cattle per hour, wage rates, safety and reimbursement for protective equipment.

Kim Cordova, president of the UFCW, Local 7, noted, “This is an historic moment in time to see workers come out like this”.  The Union has filed complaints with the National Labor Relations Board alleging changes to working conditions contrary to the existing contract.

Negotiations to establish a new contract have been ongoing since August 2025 without agreement on the major issues of wages and safety.

The UFCW is in a weak bargaining position given the spare packing capacity within JBS and among competitors. The Company will dig-in for a protracted strike to weaken the Union and reduce future labor costs. This is supported by increased packing margins now above breakeven.

In a move to reduce losses and facing the reality of a prolonged shortage of slaughter stock, Tyson Foods commenced layoffs in January 2026 at the Lexington, NE. beef plant that has been shuttered.

The University of Nebraska-Lincoln has calculated that closing the Lexington plant would have an annual state-wide impact of $3.3 billion.  The plant had a nominal capacity of 5,000 head per day, representing close to five percent of total throughput.  The plant closure will result in a loss of 3,000 jobs in a community of 11,000 suggesting a serious disruption in the affected town and surrounding Dawson County.

Over the past three years, beef packers have experienced losses extending from $75 per head in 2024 to $205 per head predicted for 2026. It is a matter of record that Tyson Foods is attempting to rationalize their beef business by ‘right-sizing” a euphemism for terminating unprofitable plants and facilities. For Q1 FY 2026 their Beef Segment posted a GAAP loss of $319 million on sales of $5,771. In contrast the Chicken Segment generated an operating profit of $450 on sales of $4,212 million.

The U.S. Department of Labor announced in mid-March that $1.6 million would be awarded to the Nebraska Department of Labor for training services and expenses involved in reemployment for displaced workers. Funding was provided through the Workforce Innovation and Opportunity Act of 2014.

Tyson had every opportunity to predict the decrease in the number of animals available and could have initiated contingency plans dictated by the adverse operating environment. It is not unreasonable to expect that Tyson Foods should be responsible for relocation of employees, retraining and other direct expenses incurred by terminated employees and the State of Nebraska. 

Given the beef cycle and the reduction in the cow-calf herd, it will be three years before there is any increase in availability of slaughter stock and the impact of the multi-year progressive decline in the breeding herd due to drought, competition from imports and inflation

Groups representing ranchers including the New Civil Liberties Alliance and R-Calf USA are embroiled in litigation with the USDA over electronic identification (EID) ear tags for cattle to be transported over state lines.  Resistance to adoption has persisted for a number of years since USDA required EID ear tags in place of less expensive visual tags. The argument that EID tags are a financial burden should be viewed against the 2026 estimated margin of $1,123 per head   accruing to cow/calf ranchers as estimated by the Beef Industry Profit Tracker.

The USDA maintains that the EID tags are necessary to reduce errors in livestock tracking, critical to control of disease.  This is especially important given the emergence of New World screwworm infestation in Mexico. Without a durable ID and tracking system the export market might be placed in jeopardy in the event of an extensive disease outbreak.

Essentially EID tags reflect progress in the control of livestock disease and are superior in preventing fraud and illegality that could occur with the visual-only tags.

The ear tag issue has become a question of “rights” representing opposition to state and federal mandates and regulations that are intended to improve livestock and human health.  The growing “rights” movement is exemplified by passage of hastily enacted state laws and local ordinances allowing the distribution of raw milk, parental involvement in school curriculums and vaccination.

On May 3rd Costco Wholesale Corporation (COST) posted results for Q2 FY 2026 ending February 15th 2026 exceeding consensus estimates on EPS.

 For Q2 Costco reported earnings of $2,035 million on revenue (sales and membership fees) of $69,597 million with a diluted EPS of $0.84. For the corresponding Q2 of FY 2025, Costco earned $1,788 million on revenue of $63,723 million with a diluted EPS of $4.02. Comparing Q2 of 2026 with the corresponding quarter of FY 2025, sales were 9.2 percent higher; Gross margin increased from 10.8 percent for Q2 FY 2025 to 11.2 percent for the most recent quarter. Operating margin increased from 8.9 percent in Q2 2025 to 9.0 percent for Q2 FY 2026.

Revenue YTD for 2026 was $136,924 up 8.8 percent over the corresponding 24-week period in 2025. Adjusted comparable sales for the 26 weeks ending March 1st were 6.4 percent for the entire Company, with the U.S. at 6.1; Canada at 8.2 and Other International at 6.4 percent. Digital sales were up by 21.3 percent. Overall comparable same-store sales were up 6.7 percent attributed to increases of 3.1 percent in traffic and 3.5 percent in ticket value.

Issues reviewed at the Investors’ Call included the impact and legality of erratic and unpredictable tariffs. According to Ron Vachris CEO, one third of the 4,000 SKUs are imported. Costco management will do all possible to restrain price increases and to possibly reimburse customers should this be practical or achievable. The Company is upgrading checkout procedures to enhance customer satisfaction.

Worldwide Costco posted an 89.7 percent membership renewal rate and a 4.8 percent increase in total membership to 82.1 million.

On February 15th 2026 Costco posted total assets of $83,639 million. Long-term debt and lease obligations amounted to $10,789 million.  

Costco had an intraday market capitalization of $442,520 million on March 11th 2026.  The Company has traded over the past fifty-two weeks over a range of $844.06 to $1,067.08 with a 50-day moving average of $967.08. COST trades with a forward P/E of 49.0. On March 3rd 2026 COST closed at $1,006.71 pre-release but traded at a low of $958.03 at noon post-release recovering to $990.48 at the close on March 11th.

Twelve-month trailing operating margin was 3.7 percent and profit margin 3.0 percent.  The Company generated a return on assets of 8.7 percent and 29.7 percent on equity

Costco operates 924 warehouses with 624 in the U.S., 114 in Canada, 42 in Mexico and the remainder in 11 nations. Expansion plans are for 30 additional warehouses worldwide annually over the proximal five years.

The two decades-long litigation over alleged pollution by major broiler integrators in the Illinois River watershed has led to preliminary settlements that have yet to be approved.  To date, Peterson Farms, George’s, Inc., Tyson Foods, Inc. and Cargill, Inc. have agreed to settle with the State Attorney General, Gentner Drummond. Oklahoma has yet to negotiate a settlement with Cal-Maine Foods, an egg producer and Simmons Foods, a broiler integrator.

U.S. Federal District Judge Gregory. Frizzell has raised issues with the proposed settlement relating to Oklahoma v. Tyson Foods, Inc. over long-term implications for disposal of waste. Litter application by existing contractors would be subject to declining increments down to 20 percent of present volume over five succeeding years. The possibility of additional contractors and increased volumes of production in the watershed could negate the beneficial environmental effects of the settlement. If Judge Frizzell refuses to sanction the settlement agreements the co-defendants have signaled their intention to resort to the 10th Circuit Court of Appeals

Blayne Arthur the Secretary of the Oklahoma State Department of Agriculture and Jeff Starling Secretary of the Department of Energy and Environment have questioned the proposed settlement. Negotiations were initiated in 2005 by then Attorney General Drew Edmonds after a federal judge ruled that the eleven poultry companies were responsible for phosphorus pollution in the Illinois river watershed.  The Secretaries have urged scrutiny of the proposed settlements they characterize as “imbalanced”.  In their comments, the Secretaries consider that the settlement would result in a “fragmented regulatory landscape in which companies competing in the same market operate under dramatically different rules”.  The proposed settlement also allows the Oklahoma Attorney General, to decide on payments without recourse to the Legislature.

Disposal of poultry waste previously applied to agricultural land will be subject to increased regulation given the potential for eutrophication from phosphorus runoff into waterways suggesting alternative methods of disposal or pre-treatment before application.

Expedient resolution of the impasse is important since Tyson Foods will not place chicks with contractors operating in the Illinois River watershed until a settlement is finalized.

According to Brooke Rollins, Secretary of the USDA, the irradiation plant to propagate sterile male New World screwworm Cochliomyia hominivorax (NWS) flies will be located once again on the Moore Airbase with a projected ultimate completion date in November 2027.  Initially, the plant will produce 100 million sterile flies each week. The capacity will subsequently be expanded to achieve an output of 300 million sterile flies weekly.  USDA produces 100 million sterile flies per week at a facility in Panama for dispersal in affected areas in Mexico.  In the short term, USDA will provide $21 million to renovate and convert an existing irradiation facility designed to suppress fruit flies to NWS and to double production. This facility will be operated by the Commission for the Eradication and Prevention of Screwworm (COPEG)  and will commence production during the summer of 2026.

The Moore Airbase plant will be designed and erected by the Army Corp of Engineers and will allow the U.S. to be independent of supplies of sterile male screw worm flies from Central America and Mexico.

Although screw worm infestation was suppressed to the point of eradication in the U.S. by 1966 through dispersal of sterile male flies and from North America extending from the Panama Canal to the Southern U.S. border by the late 1990s.

Nature is resilient and infestation emerged in Guatemala in 2024 and spread to Mexico. This represents a threat to U.S. livestock and wildlife. The USDA-ERS estimate that the emergence of NWS in Texas would have cost the beef industry $1.9 billion in 2024.

The reemergence of New World screwworm indicates the need for widescale deployment of sterile male NWS flies. This will require close cooperation with neighboring nations to detect and eradicate the pest. Reintroduction into “cleared” regions is inevitable requiring surveillance and control over movement of livestock. Collectively regulators in Guatemala and Mexico missed the infestation and allowed spread by both movement of cattle and migration of flies. 

The effect of border closure on availability of slaughter stock and the effect on the domestic price of beef has resulted in a reconsideration of the ban on importation of live cattle. We have witnessed deficiencies in the control of ticks at border crossings. It is hoped that USDA-FSIS will be able to manage inspection given the risks and consequences of introduction of Cochliomyia larvae into the U.S. Political expediency should not dictate decisions on pest and disease control

Following release of proposed legislation entitled the Family Grocery and Farmer Relief Act, The Meat Institute reacted characterizing the proposal “as absurd”.  Julie Anna Potts, CEO of the organization, observes that the proposal championed by Chuck Schumer, Senate Minority Leader would have negligible impact on retail meat price but would disrupt the industry.

If the packers of beef are acting in collusion to the detriment of feeders why are they losing money on every head? Mack Graves cites The Beef Industry Profit Tracker that documented a progressive loss for packers over 2024 through 2026 (to date) ranging from $75 to $205 per head. These figures are consistent with quarterly financial reports posted by Tyson Foods Inc. In contrast cow/calf operators have benefitted from increased margins ($114 to $1,123 per head) and the Feeders, intermediates in the production chain, ranged from a positive margin of $114 to $157 per head)

It is obvious to politicians and consumers alike that the price of red meat is unacceptably high.  This is due to a disparity between supply and demand.  Cattle inventories are at their lowest level for seven decades, attributed to drought, cold winters and financial pressures on ranchers and feedlot operators.  Importation has been curtailed by inappropriate and erratic imposition of tariffs. Availability has been impacted more recently by intermittent and now prolonged closures of the Southern border as a result of outbreaks of New World screwworm in Mexico. 

Forcing the major red meat packers to divest operations would disrupt the supply chain, inhibit investment and expansion and would be antithetical to efficiency and low cost.  Mandating that the major producers  fragment their businesses would deny packers the economies of scale and indirectly lead to even higher prices. When politicians and bureaucrats contrive to “fix” a problem, unintended consequences emerge, requiring reversals and a restoration to the status quo.  The proposed break-up of red-meat processors would represent a slippery slope ultimately impacting broiler integrations.

U.S. District Judge, John R. Tunheim, has ruled that the bench trial of the action brought by the Federal Trade Commission and six states will begin on May 4th.  The Defendant, AgriStats had argued that proceeding with the trial before a scheduled civil antitrust lawsuit would be prejudicial and would violate the Seventh Amendment rights of the company.  This contention was rejected by Judge Tunheim based on a Supreme Court precedent.  The presiding judge also invoked the Sherman Antitrust Act requiring courts to proceed “as soon as possible in government enforcement actions” and that to delay “would not serve the interest of justice”.

 In United States v. AgriStats, the FTC and the states of California, North Carolina, Tennessee, Minnesota, Texas and Utah allege that the company “engaged in an unlawful information-sharing conspiracy with major broiler, chicken, turkey and pork processors”.

To date, the Co-Defendants represented by broiler and turkey integrators and pork packers have settled with Plaintiffs leaving AgriStats as the only Defendant.

Despite the prevailing policy of the current Administration to reject participation in international organizations, the U.S. Agriculture Coalition for WTO Reform has urged continued membership. The Coalition includes the USA Poultry and Egg Export Council (USAPEEC), the National Pork Producers Council (NPPC) and other organizations representing agricultural commodities.

As with many international organizations, required changes require prolonged discussion, review and in some cases blatant obstruction as is the situation with the WTO comprising 164 member countries. Notwithstanding obstacles, the United States Trade Representative, Ambassador Jamieson Greer, has made some progress through bilateral workarounds “superseding WTO commitments including a lift of trade barriers that are in violation of WTO rules”.  Areas of concern include unnecessary phytosanitary requirements and delayed registration of establishments.

The Coalition considers that an active U.S. involvement in the WTO can support bilateral trade agreements that are favored by the President. The NPPC noted that, “U.S. engagement with the leadership among the WTO membership is essential to U.S. agricultural interests.”

In the letter addressed to the USDA Under Secretary for Trade and Foreign Agricultural Affairs, the Coalition urges support for the WTO as “The agreement provides more predictable market access and results in reduced trade distortions in agricultural markets.”

Activist Watch Weekly, prepared by Will Coggin of the Berman Group has reported that major UK brands including KFC, Nando’s and Popeye’s have withdrawn from the “Better Chicken Commitment”.

The obligations implicit in the various levels of the “Better Chicken Commitment” are antithetical to sustainability and have increased the cost of product.  There is a growing realization that consumers are opting for lower cost of raw and prepared chicken and now place less emphasis on welfare in the purchase decision.

Over the past decade, welfare organizations including Humane World, Mercy for Animals, the SPCA and the Humane League have individually or collectively coerced retailers, distributors of branded eggs, chicken, turkey and derived products to accept onerous and scientifically indefensible welfare standards.  These organizations are less interested in flock welfare than they are in ultimately destroying all intensive livestock production in pursuit of a vegan agenda. 

Although a number of producers have modified housing and production practices to conform to the lowest tier of the “Better Chicken Commitment”, the realities of successive escalation in standards are now apparent and the marketing benefit from certification is now in question.

The Center for the Environment and Welfare, supported by the food industry has created a new website www.environmentandwelfare.com that posts reports on the environmental impact and activities of welfare organizations and pending legislation.

In a recent statement, the National Farmers Union praised the House Committee on Agriculture in marking-up The Farm, Food and National Security Act of 2026.

NFU president Rob Larew noted, “We recognize the hard work that went into this mark-up.  Bipartisan progress in today’s Congress is not insignificant, and we are grateful to the members who engaged seriously with the challenges facing family agriculture.”  Notwithstanding the achievement, enactment of a Farm Bill will require considerable work in both chambers of Congress with the inevitable pressure exerted by lobbyists representing agricultural organizations. 

The proposed Farm bill has been delayed for over a year by bipartisan differences, especially with respect to food benefits and the required magnitude of support for farmers who have been impacted by an erratic tariff policy reflecting a lack of a comprehensive and progressive economic program.

Corporate consolidation in the red meat sector will also be contentious as conflicting opinions on the reasons for escalation in the price of red meat swirl around both House and Senate.

Larew concluded the NFU statement by urging a concerted effort to resolve differences, stating, “The challenges facing family farmers and ranchers are urgent, and the final Farm Bill must reflect that reality.”

On March 5th The Kroger Company (KR) posted results for Q4 and FY 2025 ending January 31st 2025. Kroger was two percent below consensus revenue and four percent below expectations for adjusted EBITDA but posted higher guidance for FY 2026.

 Kroger is the second largest retailer of groceries in the U.S. and is a pure supermarket play subject to the pressures of escalation in food costs, logistics and labor and the impact of inflation in common with all national and regional competitors.

For Q4 Kroger reported earnings of $861 million on sales of $34,725 million with a diluted EPS of $1.35. For the corresponding Q4 of FY 2024, Kroger earned $634 million on sales of $34,308 million with a diluted EPS of $0.90.  Comparing Q4 of 2025 with the corresponding quarter of FY 2024, sales were 1.2 percent higher; Gross margin increased from 23.1 percent for Q4 FY 2024 to 23.4 percent for the most recent quarter. Operating margin increased from 2.0 percent in Q4 2024 to 3.6 percent for Q4. For the last quarter in 2025 S&G was lower by $93 million compared to Q4 FY 2024. Improvements were attributed to reducing supply chain costs, improved sourcing and with lower shrink of inventory.

For FY 2025 Kroger reported earnings of $1,016 million on sales of $113,240 million with a diluted EPS of $1.54. For the corresponding FY 2024, Kroger earned $2,685 million on sales of $147,123 million with a diluted EPS of $3.67. During FY 2025 Kroger posted an impairment charge of $2,497 million attributed to the Ocada fulfillment network

In commenting on quarterly results in the press release, Greg Foran the newly appointed CEO stated “Kroger delivered a strong finish to the year, with improving market share trends and solid

sales growth that reflect meaningful progress in strengthening the business. He added

“We have the right foundation in place, and I’m focused on making it even stronger by

delivering more value to customers, improving the customer experience in stores and online,

and driving cost savings and productivity to fund our growth."

In addressing analysts Foran opined “It has been about a month since I started, and I’ve spent that time learning Kroger from the inside out. I’ve been spending time with the leadership team, having one-on-one conversations across the organization and getting out to the stores, distribution centers and manufacturing facilities — and, importantly, also watching how our customers shop”. He added “The team has done excellent work, particularly over the past year, to strengthen the business. And my focus is on how we ‘operationalize’ our strategy to make us even better.”

In discussing future developments, Foran pointed to private Kroger brands that experienced a solid quarter, he stated, “Excluding the impact of egg deflation, sales continue to outpace national brands. Simple Truth and Private Selection again led our growth, with customers continuing to choose these products because they deliver high quality and an affordable price. Innovation continues to be a priority. This year, we introduced more than 1,100 new Our Brands products, up from more than 900 last year. A growing number of these products are focused on health, an area where customer demand is growing, and the Our Brands portfolio is well-positioned to lead.”

The challenge facing Greg Foran will be to stabilize operations and implement envisaged improvements. Kroger is recovering from the turbulence, distractions and expenses associated with the thwarted acquisition of Albertsons. The move away from mechanized Ocada fulfillment centers of which 20 additional were planned will reduce unprofitable future capital commitment.

The Company released adjusted FY 2026 Guidance:- 

• Identical Store Sales growth of 1.0 to 2.0 percent excluding fuel,
• Adjusted EPS of $5.10 to $5.30.
• Adjusted FIFO Operating Profit of $5.0 billion to $5.2 billion.
• Capital expenditure of $3,800 to $4,000 million,

Comparable same-store sales for Q4 advanced by 2.4 percent (excluding fuel) compared to Q4 FY 2024; Digital sales were up by 20.0 percent;

On January 31st 2025 Kroger posted total assets of $49,941 million, of which $3,403 million comprised goodwill and intangibles. Long-term debt and lease obligations amounted to $24,405 million.  

The Kroger Company had an intraday market capitalization of $43,440 million on March 6th 2026.  The Company has traded over the past fifty-two weeks in a range of $58.60 to $74.90 with a 50-day moving average of $64.96. KR trades with a forward P/E of 12.8. On March 4th 2026 KR closed at $66.02 pre-release but at 09H00 on March 5th post-release share price rose 6.6 percent to $70.40, closing at $74.00.

Insiders hold 8.8 percent of equity with 79.2 percent held by institutions. On February 13th 5.2 percent of the float was short.

Twelve-month trailing operating margin was 3.5 percent and profit margin 0.7 percent.  The Company generated a return on assets of 5.6 percent and 14.4 percent on equity

The Kroger Company operates approximately 2,750 stores (with 1,240 under the Kroger banner), but with a total of 25 banners in 35 states. In addition Kroger operates 2,270 pharmacies and 1,700 fuel centers, 34 food plants and 45 distribution centers.

This edition of CHICK-NEWS is sponsored by VAL-CO Industries. The featured posting describes the Comfort-Nest® designed to optimize hatching eggs per hen housed. The article includes a financial evaluation to justify the differential in cost over conventional side belt nest installations.

The February edition includes an editorial and commentary, statistical reports and news items and events of topical interest impacting the poultry meat industry.

Mechanical nests are now the industry standard for producers of broiler hatching eggs.  VAL-CO has developed and refined systems incorporating advanced U.S. and EU technology.  Feedback from successful breeder managers is incorporated in the VAL-CO Comfort Nest™.  This system provides hens with a laying environment contributing to clean shells.  Acceptance of the nest system by flocks reduces floor eggs, maximizing income for the contractor and optimizing settable eggs, hatch and hence profit for integrators. 

The unique feature of the Comfort Nest™ is the 19-inch wide opening that attracts hens and provides additional space for high-yield broiler strains.

Features of the Comfort Nest™ installation include:-

• Two five-inch side belts with either polypropylene or fiber according to customer preference. 
• Lids are hinged for inspection and cleaning.
• Automatic nest-closing operated by a winch and cables. This allows programmed closure before ‘lights-out’ and opening before the first morning feed
• Ventilated partitions contributing to comfort in hot weather.
• Optional PVC pipe kit to prevent expulsion of eggs when multiple hens pile into a nest.
• Nest bottoms are fabricated from galvanized wire that provides long life and the ability to support multiple hens.
• Available with NXT style turf nest pads.
• The Comfort Nest™ system is fabricated from galvanized metal and ammonia-resistant plastic components to ensure a prolonged operational life.
• Ease of access for decontamination and maintenance.

In comparing the cost of a conventional nest installation with the Comfort Nest™ system it is calculated that the differential in capital cost is approximately $5,000 for a house holding 11,500 hens. Field data shows between 5 and 10 additional hatching eggs harvested per hen-housed over a laying cycle through 64 weeks of age. The benefit is due to a reduction in floor eggs that invariably have soiled shells and undergo shell damage.

Assuming a conservative five additional eggs per hen housed, the contractor would earn an incremental $2,875 per cycle extending over 52 weeks (including pre-lay and clean-out), assuming a payment of $0.60 per dozen. In addition, the labor required to gather and attempt to dry-clean eggs is mostly eliminated with the Comfort Nest® system. The additional $5,000 capital cost represents an annual fixed cost of $1,000 comprising interest at 5 percent per annum and depreciation at 15 percent per annum. Selection of the Comfort Nest™ would provide the contractor with a 20 month pay-back period on a cash-flow basis. Applying a discount factor of 5 percent to the net annual benefit of $1,875 per cycle the 10-year net present value of the initial incremental $5,000 investment is $13,833. This calculation assumes stable contractor payment. With inevitable inflation the differential favoring the more productive Comfort Nest® will increase proportionally to income.

From the perspective of the integrator, a contractor with a flock of 11,500 hens producing an incremental five hatching eggs per hen housed would place an additional 46,000 broiler chicks per cycle assuming 80 percent average hatch. The benefit would accrue in the incremental margin from RTC product that would depend on live weight of broilers harvested, product range and price structure. 

Feedback from the Field

A broiler breeder manager for a leading integrator provided feedback on the operation of the VAL-CO Comfort Nest®: -

• Birds are receptive to the Comfort Nest that allows more than one bird to occupy a single nest.
• We have seen a sharp reduction in the number of floor eggs in a typical 500-foot house with 12,000 hens.  We might see 30 floor eggs with a Comfort Nest installation compared to as many as 130 with standard side-belt nests.
• We rarely have issues with operation since the nest installation is reliable. Contractors report consistent daily operation over three flocks.
• Contractors have no complaints as compared to other nest systems with installation and labor is in line with other brands.
• VAL-CO provides assistance and advice to fix any issues that arise.

At the recent annual convention of the National Turkey Federation, Paul Hill was honored with the NTF Lifetime Achievement Award.

Hill began his career in the meat industry in 1947 as a member of a family farm raising turkeys.  He earned a degree in agriculture economics from St. Olaf College and undertook mission work in Thailand.  Hill has interacted with a number of turkey processors including Bil-Mar Foods, Sara Lee, Land O’Lakes and most recently West Liberty Foods.  

In a February 17th announcement, USDA indicated that the rule-making process would be initiated to allow increased line speeds for pork and poultry operating under the Modern Inspection System.  Comments are solicited regarding the proposed changes over a 60-day period with information and the deadline available on www.regulations.gov. 

The National Chicken Council and the Meat Institute support the proposed changes that are based on long-term scientific evaluation in selected pilot plants.  Harrison Kircher, president of the National Chicken Council, stated, “The current patchwork approach has created significant uncertainty for companies and has put our members at a disadvantage globally, where other countries operate at faster speeds.”  He added, “We appreciate the Administration’s pro-business approach and for helping to increase the global competitiveness of America’s chicken producers.”

Notwithstanding proposed changes considered inevitable, the ultimate responsibility for wholesomeness would rest with the FSIS inspectors who will be authorized to slow or stop operations if safety is compromised. 

It is anticipated that welfare activists and unions will continue to oppose the proposed changes in regulations to allow increased line speeds.  Their representations and comments will be taken in context, but it appears that decisions have been made regarding processing efficiency. But the ultimate USDA-FSIS decision will be subject to litigation-perhaps prolonged as the issue works its way through the legal system

During November 2024, the European Association of State Veterinary Offices noted that following initiation of vaccination against HPAI in ducks, outbreaks were effectively curtailed.  Through November 2024, 61 million ducks had been vaccinated with ten outbreaks compared to an anticipated 480 outbreaks that would have occurred based on losses during the 2021-2022 HPAI season.  During this period, there were 1,400 outbreaks resulting in culling of 22 million birds mainly in the concentrated foie gras industry.

Expenditure on vaccination including vaccine, administration, monitoring, surveillance and veterinary supervision amounted to $122 million but saved close to $1.5 billion that would have been expended for control and decontamination.  The $2 cost per duck appears excessive. In the context of the U.S. poultry industry, Both direct and some indirect costs would probably be less than 20 cents per bird given new-generation vector vaccines suitable for mass administration. 

Initially, the foie gras industry in France experienced negative responses from importers but it is noted that import embargos were in any event in effect due to clinical outbreaks of HPAI.

With experience and presentation of epidemiologic data and greater understanding of the ongoing HPAI pandemic, restrictions on importation from France and other nations applying HPAI vaccination have been eased.

The USA Poultry and Egg Export Council was awarded $7 million by the USDA-Foreign Agricultural Service to promote exports of poultry and eggs.  USDA has now released funds allocated by Congress for both the Market Access and the Foreign Market Development programs.

In commenting on the awards, Greg Tyler, CEO of USAPEEC, stated “We are grateful to USDA- Foreign Agricultural Service for its ongoing support of our organization and global programs.”

According to a preliminary notification in Cell Reports Medicine, a potentially effective vaccine was evaluated to protect rodents from H5N1 avian influenza infection.

The vaccine comprised a chimpanzee adenoviral virus as a vector stimulating immunity against H5 hemagglutinin antigen.  Administration of the vaccine to mice resulted in a neutralizing antibody response. Protection was demonstrated against challenge with a human-derived H5N1 isolate (A/Michigan/90/2024 clade 2.3.4.4b), presumably derived from a worker exposed to avian influenza H5N1.  The intranasal adenoviral-vectored vaccine provided a higher level of protection compared to intramuscular administration of hamsters subjected to challenge with Michigan and Texas isolates of H5N1.

It is hoped that this technology could be extended and evaluated in chickens and turkeys with an appropriate vector. The industry would benefit from any novel vaccine in addition to existing commercial vector products for mass primary immunization of broilers at the hatchery or via the intranasal route during rearing of layer and breeder pullets.

On January 22nd, a class-action lawsuit was filed against Costco Wholesale Corp., et. al, in the U.S. District Court for the Southern District of California.  The Plaintiffs, Johnston, et. al, claim that the Costco “No preservative” claim for Kirkland Signature Seasoned Rotisserie Chicken was misleading.  Carrageenan, a natural compound extracted from seaweed and sodium phosphate, a common chemical used in food processing, were added to the product as a stabilizer and preservative respectively to extend quality and shelf stability. The Plaintiffs allege that Costco took advantage of consumers seeking “clean label” descriptors of the product.

Following filing of the lawsuit, Costco amended the label of their $4.99 iconic rotisserie chicken. The company stated, “To maintain consistency among the labeling on our rotisserie chicken and the signs in our warehouses and on-line presentations, we removed statements concerning preservatives.”

Wesley Griffith, Esq., managing partner of the Almeida Law Group, the plaintiff’s attorney commented, “It is confirmation of our core legal theory that “the no preservative” claims were false. 

This case exemplifies the mendacity of the California tort bar that constantly searches for “shake-down” cases in which Plaintiffs do not suffer any damage but take advantage of them and defendants in pursuing spurious claims.  Both sodium phosphate and carrageenan improve the organoleptic qualities of product and are approved for use in food processing.

A second legal issue confronting Costco relates to the levels of Salmonella as documented by the USDA FSIS in chicken produced at Lincoln Premium Poultry. This complex is owned by Costco and is the supplier of a high proportion of rotisserie chickens sold in Costco warehouses.  Two lawsuits have been filed to date relating to contamination although there is no epidemiologic evidence that outbreaks of salmonellosis have occurred as a result of consuming Costco rotisserie chicken.  The second lawsuit filed in the U.S. District Court in Seattle on February 12th alleges “economic injury” by overpaying for the potentially contaminated chicken purchased after January 1st, 2019, the year of inception of production by Lincoln Premium Poultry. The complaint draws heavily on a December 2025 document prepared by Farm Forward, an activist group opposed to all forms of intensive livestock production.   It is a matter of record that Lincoln Premium Poultry has been classified by the USDA among Category 3 plants over an extended period. This suggests structural and operational problems that should be addressed to enable the plant to conform to industry norms with respect to contamination of carcasses and parts.

Previously, Costco was embroiled in claims and litigation arising from salmonellosis but the chicken in question was supplied by a West Coast integrator and preceded the establishment of Lincoln Premium Poultry. 

Given the possibility of viable Salmonella being present on uncooked carcasses and parts, it is necessary for consumers, restaurants and especially for in-store rotisserie preparation of chicken to ensure that appropriate handling and heating to 165 F for at least 30 seconds is achieved.  Given the sale of two million rotisserie chickens each week from Liberty Premium Poultry in Costco warehouses, the absence of Salmonella outbreaks attributed to the product, it is to be assumed that Costco is adequately cooking their rotisserie chicken and selling a wholesome product.

The allegations contained in the Farm Forward release relating to stocking density, scale of operation and management of flocks contributing to Salmonella contamination are essentially spurious. The contentions of the author represent oft-repeated and scientifically unsubstantiated opinions of Animal rights activists that lack merit. Unfortunately the statements supported by plaintiffs’ experts but will be used to sway uninformed but confused jurors.

This case has overtones of the ongoing glyphosate litigation. If unfavorable verdicts are handed down, it should be expected that a cascade of similar lawsuits will be filed targeting the largest U.S. integrators regarding advertizing claims on welfare, sustainability and other attributes.

In a February 17th announcement, Hormel Foods Corp. confirmed that it will sell the Melrose, MN. Whole-bird plant and the Swanville, MN. feed mill and related assets including vehicles to Life-Science Innovations.  The purchaser will assume contracts with growers and provide Hormel with turkey meat through to the end of Fiscal 2026.  Hormel will retain the Jennie-O brand and will concentrate on further-processed and turkey-derived added-value products.  As motivation for the transaction, Hormel noted concern over fluctuation in commodity markets and the losses associated with HPAI that have impacted central Minnesota.

In recent years, reorganization by Hormel has obscured any evaluation of the financial performance of the Jennie-O business.  Hormel noted in their release that the divestment would have no material impact on FY 2026 earnings.  In a preliminary first quarter 2026 release on February 17th, the company expects Q1 net sales of $3 billion, organic net sales growth of two percent and Q1 diluted EPS of $0.33.  Jeff Ettinger, Interim CEO, stated “We are pleased with our preliminary first quarter results.”  He added, “They reflect a solid start to the year and are aligned with our expectations and give us confidence that we are focused on the right initiatives to return Hormel Foods to profitable growth.”

According to Ag Funder, financial support for cultivated meat enterprises has tanked.  Data confirms a reduction from close to $1 billion in 2021 to investment of only $65 million in 2024.  Evaporation of venture capital financing and rejection of funding rounds for existing companies has resulted in termination of operations.  Meatable in the Netherlands, considered the most capable of bringing forward a marketable product ceased operation in late 2025 concurrently with Believer Meats in the U.S. Industry observers ascribe the trend to the failure of startups to justify predictions of both consumer demand and their ability to produce. Hype only goes so far.

In the case of Believer Meats, the company embarked on major capital investment in buildings and installations without demonstrating their capacity to expand from pilot-scale production to commercial-level output using bioreactors that would be consistent with even miniscule demand.  Spokespersons for failed companies claim regulatory restraints but in both Western Europe and the U.S. there were few obstacles imposed by governments.  In contrast, many states in the U.S. and nations in Europe including France and Italy have enacted legislation banning either the production or sale of cultivated meat or have imposed rigorous labeling requirements as demanded by livestock producers.

Even if technical restraints had been overcome, it is doubtful whether demand for cultivated meat would have justified investment in facilities given concern over ultra-processed foods, a narrow range of products and non-competitive cost against “real” meat. Experience of the plant-based substitute-meat industry should have served as a warning to both venture capital companies and over enthusiastic proponents of cultivated meat based on sustainability and welfare.  These attributes have paled in significance during the past five years with cost and availability considerations that have become dominant in a post-COVID food market.

A recent article surveyed immunity to N1 neuraminidase in a population in British Columbia, Canada*.  Sera was obtained during August 2024 from 575 participants classified among ten age groups from one to 80 years of age.  Neuraminidase inhibition antibody titers were assessed by ELISA assay against H5N1 clade 2.3.4.4b.  In assessing N1 titers, 70 percent had detectable antibodies with half of the total yielding a low to moderate value, 32 percent at an intermediate threshold and 17 percent with a high concentration of antibody.  The level of antibody was consistent with previous exposure to H1N1 influenza pandemics in cohorts born from 1997 to 2003, many children exposed during the 2009 H1N1 outbreak and among those born before 1947.

The authors concluded that “a substantial proportion of the population has pre-existing anti-N1 against H5N1 with age-related variation”.

It is difficult to reconcile the low rate of infection attributed to H5N1 among workers with intensive exposure during depopulation and decontamination of infected poultry farms. A comprehensive epidemiologic survey of dairy and poultry workers has yet to be published.

It is generally conceded that workers at risk of exposure to H5N1 should be vaccinated against the prevailing seasonal influenza quadrivalent product to minimize the risk, albeit slight, of a recombinant event.  It is also suggested that dairy and poultry farm and processing workers should be vaccinated using an available H5N1 vaccine as deployed in Scandinavia for poultry and fur-farm workers.

*Skowronski, D. M., Cross-Reactive H5N1 Neuraminidase Antibodies by Agent Influenza Imprinting Cohorts of the Past Century: Population-Based Sero Survey, British Columbia, Canada J. Infectious Diseases.  doi.org/10.1093/infdis/jiag 030 (2026)

Peter McGuinness has departed from Impossible Foods after a four-year tenure.  He has accepted a position as CEO of Bel North America, the U.S. subsidiary of the Bel Group of France a major manufacturer of dairy and vegetable-based snacks and RTE foods. McGuinness will be replaced by a troika comprising Jason Gao, Chief Legal and Operating Officer, Meredith Madden, Chief Demand Officer and Robert Haas, Chief Supply Officer. 

Impossible Foods is a private company and does not publish financial data.  Given the declining sales and growing losses posted by competitor, Beyond Meat (BYND), it is presumed that Impossible Foods is experiencing similar headwinds including shrinking demand and slim margins. Despite eight infusions of venture capital, Impossible Foods Tape D® price declined from approximately $15 in January 2024 to approximately $2 at the beginning of January 2026.

Ten financing rounds from September 6, 2011, to November 23rd, 2021, raised close to $1.7 billion.  Investors include Horizons, Khosla, UVS, Temasek, Viking Global and XN Capital, among others. These companies now have little opportunity to recoup their investments given the limited prospects for the company to launch a successful initial public offering.

Both Impossible Foods and Beyond Meat have experienced declining sales both among retail stores and institutions.  Tapering demand is due to noncompetitive cost, inferior organoleptic qualities compared to real meat and poultry, the realization that plant-protein products are ultra- processed. These factors are in addition to reduced concern over livestock welfare, sustainability and the environment and an indifference to industry generated hype.

A collaboration among industry associations representing broilers, eggs, turkeys and ducks has resulted in establishing the Poultry Industry Food Safety Council (PIFSCo) to serve as a central clearinghouse for research and dissemination of data relating to food safety and related issues.

The Chair of PIFSCo, Kevin Atkins noted, “Food safety is the foundation of consumer trust and the key to the long-term successful industry.”  He added, “Through PIFSCo we are bringing together the best science expertise and industry collaboration to rise the standard of food safety from farm to fork.”  A new website www.pifsco.org will incorporate:-

• Educational resources

• Updates on Research

• Sharing of best practices for food safety

• Membership and participation information

Kim Rice vice-chairman of PIFSCo stated that “By uniting stakeholders across the poultry industry sectors we will help ensure consistent standards, rapid knowledge-sharing and a stronger foundation for continuous improvement.”

PIFSCo is supported by the American Egg Board, National Chicken Council, National Turkey Federation, United Egg Producers and USPOULTRY and includes representation by 50 companies and allied industry partners.

Previously EGG-NEWS reported on restatement of segment earnings by Archer-Daniels Midland Company (ADM) dating back to 2014.  Sales and contribution by the Nutrition Segment apparently were misstated by applying creative bookkeeping.  When discrepancies were disclosed, the CFO Vikram Luthar was suspended and subsequently resigned. With realization of the implications of the deviation from accepted accounting practice, ADM cooperated with the SEC and implemented “significant remedial measures”.

The SEC alleged that adjustments between the Nutrition segment and other business units of ADM were made including retroactive rebates and use of unrealistic intersegment costs to allow the Nutrition segment to meet targets for fiscal 2021 and 2022. Following extensive investigations by the company, forensic auditors and the U.S. Securities and Exchange Commission (SEC), the Company agreed to a settlement of $40 million but did not admit to any wrongdoing.  Concurrently the U.S. Department of Justice has closed its investigation.  In addition to Luthar his predecessor Ray G. Young previous CFO and Vince Macciocchi president of the Nutrition Segment and chief Sales and Marketing officer were cited by the SEC.

Juan Luciano Chair of the Board and CEO of ADM noted, “We are pleased to put these matters behind the company.  These past couple of years have underscored what is core to ADM -incorporating learnings to future strengthen our business.”

At the end of the day Luciano was ultimately responsible for the irregularities and was aware if not complicit in the financial manipulation. The incident demonstrates the downside of incentive bonuses and Boards dominated by poweful Chairpersons exercising executive action. The incident  may well denote a corporate culture inconsistent with shareholder and stakeholder interests and rigid conformity to standard accounting practices and business ethics.  As the Brits would say ADM “has form”.

Luthar still faces SEC accusations of violating antifraud provisions of securities legislation and involvement in “abetting ADM’s violation relating to internal accounting control.”  Luthar denies the SEC allegations and has not settled as have Macciocchi and Young who paid civil and disgorgement penalties.

In the weeks following the September 2024 disclosures of irregularities, ADM stock fell 30 percent from $72 to $51subsequently closing on January 29, 2026 at $67 compared to a November 2025 high of $98.  Over the past 52 weeks, ADM has traded in a range of $41 to $70 with a 50-day moving average of $61.  Operating margin is razor thin at 2.0 percent with a profit margin of 1.4 percent.  On a 12-month trailing basis, the return on assets is 1.8 percent and 5.2 percent on equity.

New World Screwworm (NWS Cochliomyia hominivorax) has seriously disrupted importation of livestock from Mexico to the U.S., directly impacting the cost of beef to consumers.  The infestation that emerged in Guatemala and spread to and then within Mexico imposes a threat to livestock producers in the U.S. states bordering our southern neighbor. On recognition of the problem surveillance and control measures were initiated emphasizing the need for cooperation among USMCA regulators.

Decades ago, the problem of NWS was resolved by releasing irradiated sterile male flies that effectively suppressed and then eliminated populations of the parasite.  Applying a “mission accomplished” approach without the necessary surveillance by our southern neighbors resulted in an inevitable reoccurrence of infection.  To address the current situation, USDA has reactivated irradiation facilities to produce and distribute sterile male flies that will be effective but over time. 

The USDA has issued a request for proposals to upgrade surveillance and control measures. Projects, even if funded and implemented will not have any immediate impact on the current emergency.  Secretary Rollins is justified in her comment, “We know we have tried-and-true tools and methods that defeat this pest, but we must constantly look for new and better methods and innovate our way to success”.

The lessons that should be heeded include:

• Constant surveillance is necessary for early detection of the parasite
• Irradiation facilities should be maintained with availability of trained personnel to rapidly respond to outbreaks.
• Cooperation with neighboring nations coupled with financial support will ensure that effective surveillance and control measures are maintained.  This is difficult to achieve in an atmosphere of hostility generated by U.S. policies relating to tariffs and immigration that detract from mutual understanding and collaboration.

At the end of the day nature ignores national boundaries and has an immense capacity to adapt to changes in the environment. These include socio-economic factors and global warming that facilitate the northward movement of pests and vectors of pathogens affecting human, animal and avian populations.

Costco Wholesale Corporation (COST) is a bellwether on consumer spending and the willingness of customers to purchase food and household items in bulk and splurge on big-ticket items including appliances, electronics and furniture. On February 4th Costco reported sales for January 2026 covering the four-week period ending February 1st. Sales attained $21.33 billion, up 9.3 percent from the value of $18.51 billion during the corresponding month in 2026.

Same store sales (excluding fuel and foreign exchange) increased 6.8 percent for the U.S.; 8.2 percent for Canada and 2.7 percent for the International warehouse segment.  Overall, same-stores sales advanced by 6.4 percent and E-commerce was 33.1 percent higher. International sales were impacted by the advent of the Lunar New Year that was 19 days later than in 2025, beyond the January cut-off. Sales in this segment were depressed by an estimated 4 percent.

Costco advanced in after-hours trading on February 4th after release of the data to $988.50. COST intraday market capitalization was $434.5 billion on February 4th. The share has traded over a 52-week range of $844.06 to $1078.23.

Costco Wholesale Corporation operates 924 warehouses with 634 in the U.S.; 114 in Canada; 42 in Mexico with the remainder in nine other nations.

The recently released Dietary Guidelines for Americans for 2025-2030 discourages consumption of “processed foods”.  The emphasis on protein including eggs is a vindication for our industry that has undergone unjustified criticism over cholesterol content in past decades.

The question now arises as to what constitutes “processed foods.”  Various definitions have been applied but without consideration of the implications for the manufacturers of packaged products.  Applying the broadest descriptor, “processing” includes any alteration of a food from the natural state through heating, pasteurizing, mixing, milling, freezing or canning.  Within reason, these processes are essential to manufacture food products, preserve nutrient quality or to make them available to consumers.  With respect to additives, some preservatives have been shown to be both beneficial and innocuous.  Many ‘unpronounceable additives’ disfavored by purists are in fact nutrients and contribute to or are essential to health.

In a move to reject all additives in pursuit of a clean label, activists motivated by either naïve sincerity or outright mendacity risk throwing out the baby with the bath water.

The following were elected to executive positions on the Board of Directors of USPOULTRY during the 2026 IPPE:

• Bill Griffth, Chief Operations Officer for Peco Foods was selected as the Chairman

• Dr. Alice Johnson of Butterball LLC was elected Vice-chair

• Kevin McDaniel of Wayne-Sanderson Farms as named Treasurer

• John Wright of Fieldale Farms was elected Secretary

• Jonathan Cade of Hy-Line International will serve as the Immediate-past Chairman

In commenting on the slate of officers, Nath Morris president of USPOULTRY stated, “With the
experience and guidance these officers bring to our organization, the future of USPOULTRY is in excellent hands and I look forward to their leadership in helping to shape our organization over the next year.”

Barbara and I supported by our Sponsor VAL-CO Industries wish our subscribers and friends in the industry a productive and enjoyable IPPE and a safe return. Regrettably we will not be with you at the  2026 event but hope to meet with you at PEAK in April

Simon

The 2026 Peak Exhibition organized by the Midwest Poultry Federation will take place over April 14 through 16 in the Minneapolis Convention Center.

The program will include the progressively-expanding tradeshow incorporating TED talks. Other program activities will comprise educational sessions, entertainment coupled with fellowship and collegial interaction.

Aldi will expand in the U.S. during the 50th year of operation in the U.S. with 180 new locations including Maine together with new distribution centers in Florida, Arizona and Colorado. At the end of 2025, Aldi operated 2,614 stores in the U.S. with a goal of 3,200 locations by the end of 2028 requiring capital investment of $9 billion on stores and logistics.

According to Atty McGrath, CEO of Aldi U.S. as quoted by CNBC “Consumers now really are not looking for fancy stores and tens of thousands of different items to choose from.”  She added, “They are really savvy shoppers.  They know that private labels can save them money without sacrificing quality.” 

Industry analysts credit Aldi with an eight percent increase in store traffic during 2025, outpacing conventional supermarkets and adding 17 million new customers.

On January 8th, defendant Agri Stats Inc. settled with plaintiffs alleging price fixing by major red-meat packers.*  The Greater Omaha Packing Company was the fourteenth defendant to reach an agreement in the case leaving only Smithfield Foods apparently willing to go to trial at this time.  Settlement values have amounted to $202.8 million ranging from $100,000 for the Greater Omaha Packing Company to $72.5 million for Tyson Foods with JBS USA Food Company settling for $55 million and Cargill Inc. at $29.8 million representing the largest settlements. 

Plaintiffs’ attorneys have requested the Court of Jurisdiction to approval final settlement agreements with Greater Omaha and Agri Stats.  This Company will not pay any monetary value but will cooperate in litigating claims against Smithfield Foods for the alleged or actual “conspiracy or agreement between defendants relating to reducing competition in the hiring and retaining of or to fix, depress, restrain or exchange information, otherwise reducing the compensation paid.”

*Civil Action #1: 22-cv-02946-PAB-STV

On December 5th, Tyson Foods acquired the former Cargill turkey processing plant in Springdale, AR. for $23 million.  The facility is located on a 45-acre property and is approximately 350,000 square feet in extent.

Tyson Foods intends to convert the plant to further-processing requiring an investment of between $100 and $130 million.

Industry observers suggest that Cargill intends to withdraw from turkey production in the U.S. but without confirmation from the Company. Cargill will maintain a presence in the poultry industry through its joint-venture investment in Wayne-Sanderson Farms.

On January 12th the U.S. Department of Agriculture announced leadership appointments within the Animal Plant Health Inspection Service (APHIS).  Dr. Michael Watson the Administrator of the Agency will retire at the January.  Dr. Rosemary Sifford Deputy Administrator for Veterinary Services and U.S. Chief Veterinary Officer recently retired.

Their replacements will be Ms. Kelly Moore who will serve as Acting Administrator of APHIS and Dr. Alan Huddleston who will serve as the Acting U.S. Chief Veterinary Officer.  Dr. Adis Dijab Associate Deputy Administrator of APHIS will provide operational oversight and continuity.

Ms. Moore is currently Acting Chief Operating Officer for USDA Marketing and Regulatory Programs and is a veteran of the U.S. Marines.  Dr. Alan Huddleston has extensive experience in epidemiology and program development and will continue the tradition of strong cooperation in the international arena and will cooperate with states and the U.S. livestock and poultry industries.

Poland has emerged as a significant producer and exporter of table eggs and poultry meat.  It is documented that in 2024 Poland exported 245,000 tons of shell eggs corresponding to 338 million dozen.  In the same year, Poland exported 2.0 million metric tons (4.4 billion pounds) of RTC mostly to E.U. nations representing 69 percent of total national output.

Over the past decade, eggs and poultry meat shipped by Poland have been implicated in outbreaks of salmonellosis.  The E.U. Health and Food Agency conducted audits that disclosed profound deviations from acceptable practices with regard to prevention of Salmonella infection in flocks and in implementing accepted quality control procedures.  The most recent 2024 E.U. Commission audit* recognized some improvements but clearly criticized authorities in Poland for neglecting their collective responsibility in ensuring an acceptable standard of food safety. 

Defects included failure to follow established HACCP principles in compliance with relevant E.U. regulations to prevent or minimize the risk of Salmonella contamination.  The audit disclosed inadequate training of technical personnel at the laboratory and processing levels.  In many instances, the Competent Authority represented by state officials in Poland failed to enforce E.U. regulations.

The creditability of the regulatory system in Poland and the reliability of product safety is now in question and will jeopardize future exports.  The neglect of E.U. standards leading to outbreaks of salmonellosis among consumers of eggs and broiler meat exported by Poland should serve as a warning to producing nations to intensify programs of control, detection and remediation.

*EU Commission- Director General’s Health and Food Safety Report 2024-8029

WEEDEN SPRINKLER SYSTEM

VAL-CO, recently appointed as international distributors of the Weeden sprinkler will display the system on their Booth B10021. Weeden Sprinkler Systems was established in 1995 and has remained in the founder family after acquisition by Kevin Weeden in 2003. 

The system is design to supplement conventional pad cooling during periods of high temperature. Sprinklers are installed at approximately 24’ intervals down the length of the house located in two rows 12’ from the side walls.  The system is operated in conjunction with evaporative cooling pads that should be activated only when ambient temperature exceeds 88 Fº.  The Weeden sprinkler system permits delaying the operation of cool cells reducing humidity in the house and saving water. 

The Weeden control panel incorporates two separate time clocks to activate the sprinklers that stimulate movement of the flock and contribute to cooling of birds. Specific zones can be selected in the house to operate independently.  This permits operation of sprinklers at a higher intensity at the exhaust end of the house where temperatures may be higher than at the air inlet end when houses are operated in tunnel mode.  The controller can be pre-programed for flock age and temperature to conform to the biomass in the house and to respond to weather conditions.

Activating the sprinkler system promotes growth by stimulating birds to rise from recumbency on litter and to seek food and water. Droplets on the head and back plumage evaporate subject to adequate air movement, producing an external cooling effect.

Sprinkler intervals commence for a ten second duration at 30-minute intervals and can increase up to a 20-second cycle every seven minutes during extreme heat.  At maximum duration of 20 seconds, each sprinkler operated at line pressure above 30psi releases 10 ounces of water covering an area of 500 sq. ft.  Again, depending on the critical airflow, the system can release five gallons of water within a 25,000 sq. ft. house per 20 second cycle.  Maintaining a high rate of evaporation limits litter moisture since droplets are converted to vapor that is exhausted from the house.

Coarse droplets from the Weeden sprinkler system are approximately 1mm in diameter and approximately 10 times the size of mist particles released by high-pressure foggers.  Sprinklers are equipped with check valves to prevent dripping, and all sprinklers start and stop at the same time.

The Weeden sprinkler system has been evaluated by the University of Arkansas, Division of Agriculture Research and Extension.  Studies have shown that relative humidity in houses is lower using the Weeden system compared to houses fitted with conventional pads that tend to be overused. This results in reduced water usage and drier litter.  In a typical broiler house located in Mississippi, operation of the Weeden system resulted in a 64 percent reduction in water used to an average of approximately 9,000 gallons per cycle with a 5 percent reduction in average in-house humidity at the expense of a 3F increase in average summer temperature within the house.  Stimulating feed, and water intake contributed to enhanced growth providing the grower with 0.16 cents per pound higher settlement value over two successive summer cycles compared to controls without Weeden Sprinklers.

The Weeden sprinkler system operated in accordance with recommended parameters in conjunction with evaporative cooling pads could enhance growth and return subject to maintaining appropriate longitudinal air movement through the house.

COMFORT NEST™

With an emphasis on breeder hatchability, increasing the proportion of nest-laid eggs and achieving clean shells are important objectives contributing to hatch and hence profitability.    VAL-CO will demonstrate the Comfort Nest™ installation at the IPPE.  The double-wide nests with a 19” wide entry are more attractive to hens than conventional single-hole nests, reducing floor eggs. 

Eggs roll out gently onto a 5” wide polyethylene side-mounted belt with holes allowing ventilation and contributing to unsoiled eggshells. An optional 5" cloth belt is available depending on customers' preference. Nests are equipped with closers to allowing hens to exit nests but deterring re-entry. This reduces the occurrence of broody hens or low-ranked birds hiding in nests and soiling of pads by hens roosting in nests at night.

VAL-CO Comfort Nests are constructed with heavily galvanized steel including partitions. The system can be installed in houses up to 600’ in length. 

The automated Comfort Nest™ system can be supplied with a VAL-CO egg collection table constructed from steel for  optimal durability.

MACH 57™ SERIES FANS

Responding to the need for greater efficiency in ventilation, VAL-CO has introduced the MACH 57™ series designed for exterior mounting. Within the MACH 57™ range, VAL-CO offers the 50 Hz models with either 1.5 or 2.0 HP rated at 32,000 cfm with 0.05" swp declining to 25,000 cfm at 0.20" swp.  The 60 Hz models range in displacement from 31,200 cfm to 34,100 cfm at 0.05" swp.

All fans are designed for optimal air speed and displacement and are fabricated from galvanized coated steel and constructed with corrosive resistant materials.  The MACH 57™ range uses many common components in common with 54" VAL-CO fans to reduce inventory of spare parts.

The MACH 57™ fan is available with a compatible exterior mount with a cone and dampers.  The unit is constructed of polypropylene and fiberglass for a long service life.  The interior of the mount is coated black to reduce entry of light.

The MACH 57™ series fans can be supplied to operate with voltages ranging from 208 to 230v, 190 to 380v or 208 to 230/460v supply.

SRP® AUX INFRARED BROODERS 

VAL-CO will feature SRP® infrared brooders designed for optimal chick comfort to promote growth.  The AUX range offered in the U.S. comprises 20 ft. units rated at either 80,000 or 100,00 BTU/hr.  SRP® series infrared tube heaters eliminate hot spots over litter and can be ordered with SMART Optizone controllers that allow decentralized zoning, remote monitoring, allowing changes in set points and alerts.

The 20 ft. long radiant tube heaters are endorsed by agricultural engineers affiliated with the UGA Extension Poultry Science Service based on their field evaluation based on even distribution of heat promoting regular distribution of chicks.  Temperature variations at litter level are less than 10F in houses. Thermal imaging during brooding provided data supporting the litter-level temperatures located adjacent to outside feeder lines and inside drinker lines. 

The University of Georgia extension specialists recommend installing two rows of 20 ft. heaters within 6 ft. of the outer feed lines lengthwise in the brooding area.  This arrangement distributes heat evenly over the litter area closer to the sidewalls reducing litter moisture and places the tube heaters closest to incoming cold air from the sidewall inlets. This helps to counteract leakage of cold air through fissures in the sidewalls of older houses.

Further field trials are in progress to evaluate advantages from longer infrared radiant brooders with special reference to fuel consumption, evenness of the flock, feed consumption efficiency and settlement values for flocks.

FUZE® V GRILL-LESS FEEDER PANS AVAILABLE WITH ONCE ILLUMINATION

VAL-CO, will promote the combination of their FUZE feed pan LINES in association with ONCE by Signify Optient lighting. Synergy from the two systems will promote flock uniformity with optimal growth and yield.

The FUZE® V Grill-Less feed pan was designed in cooperation with leading growers.  Objectives were to reduce chick mortality and to improve feed conversion efficiency.  Features of the FUZE® V include:

• Access to feed in pans from day of placement

• An adjustable collar to regulate feed level according to flock age

• The lip of the pan is designed to prevent scratching and wastage

The Optient lighting system from ONCE by Signify is installed above the feed line to attract broilers of all ages in accordance with natural behavior.  Field trials show an improvement in feed conversion of up to four points at the time of harvest.  Energy consumption is reduced by up to 70 percent compared to conventional LED ceiling lights. Some growers use only the Optient installation after the end of the brooding period.

 The modular LED lights are easy to install using a patented twist-and-hook arrangement.

VAL-CO has been appointed as the exclusive U.S. distributor for the Optient lighting system and can supply installations separately for retrofit or as a combined package.

Valli Baby Area Rearing Aviary

It is universally accepted that rearing aviaries should be compatible with housing of the flock after transfer.  Manufacturers of alternative housing systems including Valli of Italy have conducted extensive research and development on brooding systems to ensure that flocks achieve maturity at a uniform weight and time so as to optimize peak and subsequent production.

The Valli Baby Area system will be displayed on the VAL-CO booth. The rearing aviary incorporates design features to facilitate management of replacement flocks. Chicks can be monitored after placement in a single tier.  The front grills can be adjusted continuously from closure to complete opening to allow flocks to access litter.  The external perches are adjustable in height to conform to the growth of the flock.  The Valli Baby Area rearing system offers optimal use of floor space with appropriate positioning of the chain feeder and nipple drinker lines.

Valli offers a range of options with regard to the number of tiers and the flexibility inherent in the system allows retrofitting to existing houses sold, installed and serviced by VAL-CO.

Based on news reports of extensive reductions in head count following the activities of DOGE Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Committee on Agriculture, Food and Forestry requested details of staff reductions in March.  The report that has now been released, with a delay of nine months, covers the first half of calendar 2025. 

On January 11th 2025 the USDA had 110,384 employees but by June 14th there were 20,306 fewer.  Of this number 15,114 accepted deferred resignation with payment of salaries and benefits through September.  After review, 52 job categories regarded as critical to national security were exempted from the reduction in head count.  Divisions within USDA that experienced losses included the Agriculture Research Service (23 percent of the total); the National Agricultural Statistics Service (34 percent); the National Institute of Food and Agriculture (35 percent) and the Animal and Plant Health Inspection Service at 25 percent.

Senator Klobuchar reacted to the report released on Monday December 22nd stating, “It as particularly shocking that agencies responsible for assisting farmers in small towns have lost a third of their employees.”  She added, “Losing nearly 20 percent of all USDA staff weakens the department’s ability to respond to challenges facing our farmers, leaves our food supply chains more vulnerable to threats like New World screwworm and avian influenza.” 

Data on staff reductions was assembled by the USDA Inspector General but the report does not include reductions from mid-year onwards.  It is anticipated that attrition will continue given the ill-advised reorganization of USDA with elimination of functions considered irrelevant or undesired by the Administration, especially pertaining to climate change, equal opportunity policies and environmental conservation.  Although job cuts extended across all states, Rhode Island, Maryland, Alaska and Vermont experienced disproportionate reductions according to POLITCO.

It remains to be determined how job losses as a result of coercion, disaffection and premature retirement will impact services.  Reduction of head count in the Animal and Plant Health Inspection Service and the National Agricultural Statistic Service will have an effect on future planning and implementation of programs to prevent or control plant and animal diseases and to assemble and publish reliable statistical data.

During the first term of President Trump, then Secretary of Agriculture Dr. Sonny Perdue moved a large number of long-term employees in the Economic Research Service and the National Agricultural Statistics Service to Kansas City from Washington DC resulting in extensive resignations, weakening the ability of these critical agencies to conduct research and to issue reports.  The justification for the action was allegedly to reduce costs and move personnel closer to the constituency they served.  These objectives were an entire fabrication, with informed observers noting that the action was to eliminate experienced personnel who had served through successive administrations but were publishing factual reports that were in conflict with White House beliefs, initiatives and policies, especially in the areas of global warming. In the event the move severely depleted institutional experience and knowledge and did not save money. Mission accomplished.

Believer Meats ceased activities at their Wilson County, NC. plant during mid-December.

The company has deep technological roots in Israel with Dr. Yaakov Nahmias, Professor of  Biomedical Engineering at the Hebrew University, serving as the founder and motivator.  The company attracted initial VC funding approaching $350 million by 2021.  Investors included Archer-Daniels-Midland, Tyson Foods, S2G Investments, Neto Group, the Jeff Bezos Earth Fund and others in the entertainment industry.  Believer Meats along with competitors recently received a “no questions” authorization from the Food and Drug Administration with respect to the safety of their technology.

With a budget exceeding $125 million for the Wilson production complex and a market valuation of $600 million Believer Meats generated considerable buzz in the alt-meat space despite a succession of failures among competitors including Eat Just, Upside Foods, Meati and Beyond Meat. The final blow to Believer Meats was the defection of a major backer creating a cash crunch exemplified by the $34 million lawsuit filed by Gray Construction the prime contractor for the 200,000 square foot facility.

Industry observers attribute the failure of the company to aggressive implementation of technology that was not proven for the projected scale of production.  Success with 200-liter reactors was not realized with vessels in the 10,000-liter range.  Initial production for the plant was projected at 21 million pounds with the possibility of doubling output to reduce the high fixed costs incurred. Believer Meats projected that with scale, theoretically achievable in the Wilson plant, the shelf price of their chicken product could be reduced to approximately $7 per lb. Workers at the facility noted that during the commissioning process, there were considerable problems with equipment preventing initiation of production.  

Despite the technical issues encountered by Believer and its competitors, there is considerable doubt as to the demand for lab-cultured meat. In addition, a number of beef-producing states have enacted legislation banning production or sale of laboratory-derived meat products. Other states have imposed strict labeling requirements that would have dampened consumer acceptance in the event of commercial quantities of product becoming available. 

There was no outward indications of the perilous financial state of Believer Meats leading to precipitous termination during pre-production commissioning. For weeks management issued self-adulatory comments on progress and persisted with rosy predictions of consumer demand.

The failure of Believer Meats cannot be regarded as a temporary speed bump for alt-meat production.  The loss of investment capital will serve as a warning to VC companies willing to place bets on long-shot enterprises that have projected an aurora of sustainability, environmental protection and the possibility of a radical change in production of protein.

Judgment has been rendered against a number of poultry companies operating in western Arkansas and eastern Oklahoma. At issue is contamination of the Illinois River watersheds due to runoff of phosphorus from poultry waste applied to agricultural land. A federal judge ruled that the defendant companies breached the Oklahoma Environmental Quality Code. Accordingly  fines ranging from $10,000 to $160,000 were imposed on six defendants involved in broiler and egg production.

The case has wound through the legal system for over two decades but recently became the subject of conflict between Gentner Drummond, Attorney General of Oklahoma and Governor Kevin Stitt. 

The judgment requires a remediation program with a Court-appointed Master to review planning and implementation with appropriate monitoring of phosphorus levels in soil and water.  Farms will be required to develop new and effective waste management plans.

The judgment and mandated remediation suggest alternative methods of disposal of broiler litter and waste from egg-production farms.  This implies the future application of available technology including composting and some form of processing to remove phosphorus.

Going forward, a limit of two tons of poultry waste per acre per year has been imposed. In addition the Court imposed a threshold phosphorus level of 120 pounds per acre for land application within the Illinois River watershed as a standard.

This pre-IPPE edition of CHICK-NEWS is sponsored by Val-CO Industries. In addition to news and available statistics, new products to be released at the IPPE by the Company are detailed. 

VAL-CO is committed to innovation through introduction of equipment that benefits producers and integrators.  Subscribers can access www.val-co.com for additional information and specifications for the new products as outlined.  Company representatives will be present at the VAL-CO booth B10021 to review products and to discuss performance specifications.

VAL-CO, will promote the combination of their FUZE feed pan LINES in association with ONCE by Signify Optient lighting. Synergy from the two systems will promote flock uniformity with optimal growth and yield.

The FUZE® V Grill-Less feed pan was designed in cooperation with leading growers.  Objectives were to reduce chick mortality and to improve feed conversion efficiency.  Features of the FUZE® V include:

• Access to feed in pans from day of placement

• An adjustable collar to regulate feed level according to flock age

• The lip of the pan is designed to prevent scratching and wastage

The Optient lighting system from ONCE by Signify is installed above the feed line to attract broilers of all ages in accordance with natural behavior.  Field trials show an improvement in feed conversion of up to four points at the time of harvest.  Energy consumption is reduced by up to 70 percent compared to conventional LED ceiling lights. Some growers use only the Optient installation after the end of the brooding period.

 The modular LED lights are easy to install using a patented twist-and-hook arrangement.

VAL-CO has been appointed as the exclusive U.S. distributor for the Optient lighting system and can supply installations separately for retrofit or as a combined package.

With an emphasis on breeder hatchability, increasing the proportion of nest-laid eggs and achieving clean shells are important objectives contributing to hatch and hence profitability.    VAL-CO will demonstrate the Comfort Nest™ installation at the IPPE.  The double-wide nests with a 19” wide entry are more attractive to hens than conventional single-hole nests, reducing floor eggs. 

Eggs roll out gently onto a 5” wide polyethylene side-mounted belt with holes allowing ventilation and contributing to unsoiled eggshells. Nests are equipped with closers to allowing hens to exit nests but deterring re-entry. This reduces the occurrence of broody hens or low-ranked birds hiding in nests and soiling of pads by hens roosting in nests at night.

VAL-CO Comfort Nests are constructed with heavily galvanized steel including partitions. The system can be installed in houses up to 600’ in length. 

The automated Comfort Nest™ system can be supplied with a VAL-CO egg collection table constructed from steel for  optimal durability.

It is universally accepted that rearing aviaries should be compatible with housing of the flock after transfer.  Manufacturers of alternative housing systems including Valli of Italy have conducted extensive research and development on brooding systems to ensure that flocks achieve maturity at a uniform weight and time so as to optimize peak and subsequent production.

The Valli Baby Area system will be displayed on the VAL-CO booth. The rearing aviary incorporates design features to facilitate management of replacement flocks. Chicks can be monitored after placement in a single tier.  The front grills can be adjusted continuously from closure to complete opening to allow flocks to access litter.  The external perches are adjustable in height to conform to the growth of the flock.  The Valli Baby Area rearing system offers optimal use of floor space with appropriate positioning of the chain feeder and nipple drinker lines.

Valli offers a range of options with regard to the number of tiers and the flexibility inherent in the system allows retrofitting to existing houses sold, installed and serviced by VAL-CO.

VAL-CO will feature SRP® infrared brooders designed for optimal chick comfort to promote growth.  The AUX range offered in the U.S. comprises 20 ft. units rated at either 80,000 or 100,00 BTU/hr.  SRP® series infrared tube heaters eliminate hot spots over litter and can be ordered with SMART Optizone controllers that allow decentralized zoning, remote monitoring, allowing changes in set points and alerts.

The 20 ft. long radiant tube heaters are endorsed by agricultural engineers affiliated with the UGA Extension Poultry Science Service based on their field evaluation based on even distribution of heat promoting regular distribution of chicks.  Temperature variations at litter level are less than 10F in houses. Thermal imaging during brooding provided data supporting the litter-level temperatures located adjacent to outside feeder lines and inside drinker lines. 

The University of Georgia extension specialists recommend installing two rows of 20 ft. heaters within 6 ft. of the outer feed lines lengthwise in the brooding area.  This arrangement distributes heat evenly over the litter area closer to the sidewalls reducing litter moisture and places the tube heaters closest to incoming cold air from the sidewall inlets. This helps to counteract leakage of cold air through fissures in the sidewalls of older houses.

Further field trials are in progress to evaluate advantages from longer infrared radiant brooders with special reference to fuel consumption, evenness of the flock, feed consumption efficiency and settlement values for flocks.

Responding to the need for greater efficiency in ventilation, VAL-CO has introduced the MACH 57™ series designed for exterior mounting. Within the MACH 57™ range, VAL-CO offers the 50 HC models with either 1.5 or 2 HP rated at 32,000 cfm with 0.05" swp declining to 25,000 cfm at 0.20" swp.  The 60 HC models range in displacement from 31,200 cfm to 34,100 cfm at 0.05" swp.

All fans are designed for optimal air speed and displacement and are fabricated from galvanized coated steel and constructed with corrosive resistant materials.  The MACH 57™ range uses many common components in common with 54" VAL-CO fans to reduce inventory of spare parts.

The MACH 57™ fan is available with a compatible exterior mount with a cone and dampers.  The unit is constructed of polypropylene and fiberglass for a long service life.  The interior of the mount is coated black to reduce entry of light.

The MACH 57™ series fans can be supplied to operate with voltages ranging from 208 to 230v, 190 to 380v or 208 to 230/460v supply.

VAL-CO, recently appointed as international distributors of the Weeden sprinkler will display the system on their Booth B10021. Weeden Sprinkler Systems was established in 1995 and has remained in the founder family after acquisition by Kevin Weeden in 2003. 

The system is design to supplement conventional pad cooling during periods of high temperature. Sprinklers are installed at approximately 24’ intervals down the length of the house located in two rows 12’ from the side walls.  The system is operated in conjunction with evaporative cooling pads that should be activated only when ambient temperature exceeds 88 Fº.  The Weeden sprinkler system permits delaying the operation of cool cells reducing humidity in the house and saving water. 

The Weeden control panel incorporates two separate time clocks to activate the sprinklers that stimulate movement of the flock and contribute to cooling of birds. Specific zones can be selected in the house to operate independently.  This permits operation of sprinklers at a higher intensity at the exhaust end of the house where temperatures may be higher than at the air inlet end when houses are operated in tunnel mode.  The controller can be pre-programed for flock age and temperature to conform to the biomass in the house and to respond to weather conditions.

Activating the sprinkler system promotes growth by stimulating birds to rise from recumbency on litter and to seek food and water. Droplets on the head and back plumage evaporate subject to adequate air movement, producing an external cooling effect.

Sprinkler intervals commence for a ten second duration at 30-minute intervals and can increase up to a 20-second cycle every seven minutes during extreme heat.  At maximum duration of 20 seconds, each sprinkler operated at line pressure above 30psi releases 10 ounces of water covering an area of 500 sq. ft.  Again, depending on the critical airflow, the system can release five gallons of water within a 25,000 sq. ft. house per 20 second cycle.  Maintaining a high rate of evaporation limits litter moisture since droplets are converted to vapor that is exhausted from the house.

Coarse droplets from the Weeden sprinkler system are approximately 1mm in diameter and approximately 10 times the size of mist particles released by high-pressure foggers.  Sprinklers are equipped with check valves to prevent dripping, and all sprinklers start and stop at the same time.

The Weeden sprinkler system has been evaluated by the University of Arkansas, Division of Agriculture Research and Extension.  Studies have shown that relative humidity in houses is lower using the Weeden system compared to houses fitted with conventional pads that tend to be overused. This results in reduced water usage and drier litter.  In a typical broiler house located in Mississippi, operation of the Weeden system resulted in a 64 percent reduction in water used to an average of approximately 9,000 gallons per cycle with a 5 percent reduction in average in-house humidity at the expense of a 3F increase in average summer temperature within the house.  Stimulating feed, and water intake contributed to enhanced growth providing the grower with 0.16 cents per pound higher settlement value over two successive summer cycles compared to controls without Weeden Sprinklers.

The Weeden sprinkler system operated in accordance with recommended parameters in conjunction with evaporative cooling pads could enhance growth and return subject to maintaining appropriate longitudinal air movement through the house.

The egg industry benefits from innovative further-processed items. The comprehensive format convenience stores operated by national chains are attracting customers from QSRs. The introduction of an egg salad sandwich by 7-Eleven is a fortuitous combination.  The new product is based on the iconic Tamago Sando sandwich offered by the parent company in Japan.  The U.S. version differs from the original but will still prove popular.  The highly popular Japanese sando has “milk bread” (shokupan) without crust.  In the U.S., the sandwich will be served on t soft white bread with crust.  Egg salad is prepared using Kewpie mayonnaise.

The U.S. sandwich will be priced at about $5.50 depending on locality.  Acceptance may be limited by price since the equivalent in Japan sells for 250-yen, equivalent to $1.80 at the current exchange rate.  The U.S. sandwich is however larger at 200g compared to the Tamago Sando at 110g. This narrows the differential in price to 68 percent higher than in Japan on a per unit basis.

Judge Algenon Marbley of the U.S. District Court for the Southern District of Ohio recently granted an injunction against Purina Animal Nutrition based on  misleading claims.  The lawsuit was initiated by Kalmbach Feeds and was filed in early June citing the Lanham Act and the Ohio Deceptive Trade Practices Act. 

Shortly after the launch of the Purina promotional program, feed regulators in Kansas, Minnesota and the Food and Drug Administration questioned the ‘health claim’ implying protection as advanced by Purina. This resulted in the company withdrawing the implicated statements. In mid-June, Purina consented to an order relating to the implied and expressed claims of protection against avian influenza and withdrew all scientifically unsubstantiated statements.

The Court ruled that Purina should refrain from issuing unsupported health claims and was ordered to post a retraction on the company website as reproduced below:-

Pursuant to an Order of the U.S. District Court for the Southern District of Ohio dated November 12, 2025, Purina hereby gives notice that it previously advertised Farm to Flock 18% Layer Hen Food as having a ‘built-in defense against avian influenza,’ ‘Defend[ing] Against Viruses, Like Bird Flu,’ and ‘helping defend against viruses like bird flu.’ At the preliminary injunction stage, the Court found that Purina engaged in false advertising because these statements were not scientifically grounded and lacked a scientific basis. Purina retracts these statements, as well as any other representation that Purina’s Farm to Flock 18% Layer Hen Food defends against, protects against, prevents, mitigates, or provides immunity to the effects of avian influenza, bird flu, or other viruses.

In an exercise in judicial theater, James Uthmeier, Attorney General of the State of Florida announced an investigation into the source of chicken in Campbell’s Company products.  The Consumer Protection Division of the Florida agency will spearhead the unnecessary effort.

The Florida action arises from revelations in a lawsuit initiated by Plaintiff. Robert Garza, who is suing Campbell for employment discrimination. In a clandestine recording entered into evidence, the discredited and since terminated Vice President Martin Bally the former Chief Information Security Officer, deprecated both Campbell’s products and consumers and claimed that the company was incorporating “bio-engineered meat” in soups.

This statement should have been dismissed as simple puffery and uninformed hyperbole.  In the first instance, bio-engineered chicken is not available in commercial quantities.  The second indication of improbability, is that the cost of any bio-engineered meat would far exceed the natural product, obviously disfavoring use.

It would appear that the Office of the Attorney General is pursuing an obvious slander to generate partisan publicity and to create the illusion of enforcing state legislation banning production and sale of non-available laboratory-produced meat. Surely there are more substantive issues to consider in the State.  In a legal environment dominated by ideology, logic is the evident loser.

In 2022 Sonate Corp. dba Vegadelphia Foods filed a trademark infringement lawsuit against Beyond Meat Inc. and the parent company of Dunkin’ Donuts.  The plaintiffs complained that the Beyond Meat slogan, Great taste, Plant-based was too similar to the registered trademark of Sonate, Where great taste is Plant-based.  Sonate claimed that the infringement interfered with potential joint ventures and impacted company growth. 

The lawsuit was transferred to the jurisdiction of Massachusetts in 2023 with the most recent trial favoring the plaintiff.  The judgement included $24 million in actual damages plus $15 million in profits. Given the perilous financial state of Beyond Meat it is questioned whether Sonate will recover damages.

For Q3 2025 the Company announced a net loss of $110.7 million, (including a charge of $77.4 million) on revenue of $70.2 million. With a negative EPS of ($1.44). For the corresponding Q3 2024bthe Company lost $26.6 million on revenue of $81.0 million with an EPS of ($0.41). Sales declined 13.3 percent and gross margin fell from 17.6 to 13.3 percent in comparing Q3 for the consecutive years.

On a 12-month trailing basis Beyond Meat has attained a negative operating margin of 47 percent and a negative profit margin of 81 percent.  Over 12 months BYND has ranged from $0.50 to $7.60 with a 50-day moving average of $1.68. Before the close on December 2nd BYND was down over 2 percent to $1.31. Marked volatility is attributed to a succession of ‘short squeezes’ with 20.7 percent of the float short in mid-November.

Following the reluctance of supermarket operators to establish stores in urban areas of Atlanta, Mayor Andre Dickens established a program to locate the Azalea Fresh Market in an available 20,000-square-foot location.  The endeavor required investment of public funds totaling $8 million in cash, grants and loans.  The enterprise is projected to become profitable within three years.  Based on the initial success of the store a second location will be developed for the convenience of residents in ‘supermarket deserts’.  Azalea Fresh Market offers fruit, vegetables and dairy products in addition to essentials but lacks the frills of a modern suburban supermarket.

NY Mayor-elect Zohran Mandani proposed establishing city-supported grocery stores as part of his successful campaign although the concept was not expanded to a specific program or plan of action.

Although many cities have proposed and implemented subsidized markets under civic ownership, theft and other crimes have impacted community support and few have attained profitability or even survived.  Various models have been attempted including support by cities in the form of loans and operation free of rent and taxes.  Established supermarket chains have   developed stores in underserved inter-city areas of metropolitan areas including Chicago without success leading to closure.

To be viable, public-supported grocery stores and supermarkets require professional management but above all community support to establish a crime-free environment.

Seasonal Return of Avian Influenza

As anticipated, avian influenza has returned to commercial turkeys and has impacted the first egg production complex of the fall season.  Effective September 25th, there were twelve outbreaks in the Dakotas and Minnesota involving close to 750,000 growing turkeys and one large egg production complex of 3.1 million hens  and 250,000 pullets in Wisconsin.  Concurrently, USDA surveys have detected H5 avian influenza virus with a Eurasian genome in twelve states over the past thirty days.  Of specific concern is the frequency of isolations from black vultures that now appear to be disseminators of the pathogen in addition to migratory waterfowl. 

Although high levels of structural and operational biosecurity are advised, even the most stringent precautions will not provide absolute protection.  Had the U.S. commenced preemptive vaccination of replacement pullets during the first quarter of 2025 during the period of winter losses we would have been in a more favorable position as we enter the fourth quarter of the year with the potential for losses.

Hamlet Protein was founded in 1989 in Denmark to improve the inherent nutritional quality of soybean meal, specifically for immature livestock.  The company has continuously emphasized scientific research as a basis for marketing to young animal nutrition solutions for calves, piglets, chicks and poults.  Hamlet Protein has developed unique, patented mild temperature enzymatic treatment that results in a feed ingredient with enhanced nutritional quality. 

Hamlet Protein partners with feed mills, integrators and farmers, initially in the E.U. but since globally with  a production facility located in Findlay, OH and a sales office in China. Hamlet Protein is guided by the principle that healthy profits are derived from healthy animals.

Hamlet Protein scientists collaborate with reputable universities and research centers around the world, and technical representatives cooperate with customers in conducting trials and sharing knowledge.

Recently CHICK-NEWS had the opportunity to discuss world trends in livestock production with CEO Erik Visser who has occupied the position since 2019 and has contributed to expansion of the Company footprint from the EU to include U.S. production and distribution 

CHICK-NEWS:  Erik, please provide an overview of the current state of World livestock production.

EV:  Expansion and profitability will depend strongly on global geopolitical events.  There is obvious a disruption resulting from  the volatile tariff situation and a clear concern on a  further  destabilization of global trade.  GDP growth in the E.U. is  slowing and China – traditionally an import-export market for animal protein and feed ingredient producers -  will face head-winds if exports are disrupted.

This said, poultry and aquaculture will be the clear winners in 2026.  There will be limited growth in swine production and there are evident problems with beef including restoration of the North American herd and the emergence of New World Screwworm infestation north of the Panama Canal.

CHICK-NEWS:  Livestock profitability will be dependent on consumer demand that in turn is influenced by prevailing economic conditions.  Your views?

EV:  Global real GDP growth is forecast at 3.2 percent over 2025 similar to 2024 but still below the pre-COVID years.  Inflation is abating but tariffs are likely to impact this trend.  Political developments in main European economies Germany and France will dominate the direction of progress for the EU.

Real GDP growth is expected to recover in Latin America.  In contrast Asia remains a bright spot with growth projected at over 5.1 percent.

CHICK-NEWS:  Feed is the principal cost in livestock production.  What do you envisage for the coming year?

EV:  Ukraine as a major exporter continues to supply commodities despite ongoing hostilitiesHamlet Protein expects feed costs to remain relatively stable given this year’s bountiful crops in all producing areas including the Americas.

CHICK-NEWS:  Hamlet Protein uses soybean meal as its major input.  Do you envisage any shortages?

EV:  Brazil is the world's top producer with more than 50 percent of total production emanating from that country and its neighbors, followed by North America with 30 percent of global production. 

With record crops in most production areas and reduced demand from China, prices will remain at a moderate level consistent with a plentiful supply. 

In the event of a trade war between the U.S. and China, exports from the U.S. will be curtailed although alternative markets may develop. This is good news for the livestock sector.

CHICK-NEWS:  Do you envisage other factors influencing production and profitability in the coming year?

EV:  Sustainability is a crucial focus especially in the E.U. but is now less prominent in the U.S. policy making. The same could be said of welfare and worker rights.  Agriculture is restrained in Europe as a result of ESG regulations despite a further delay in implementing proposed deforestation regulations. 

Artificial intelligence has yet to make an impression on livestock production although technologies are under evaluation albeit with limited implementation.  The restraint comprises a lack of reliable data to train AI algorithms.

CHICK-NEWS:  Do you have any final messages for your constituency?

EV:  We believe that attracting the younger generation to livestock production and processing will be critical to the future of all livestock segments of the industry. 

With increasing regulations, especially relating to antibiotics, and ongoing financial pressures, efficiency in production must match genetic potential. Accordingly providing young livestock with appropriate diets that are readily digestible to improve feed conversion efficiency will be necessary to maintain profitability. 

Hamlet Protein has strong market shares in North America, Europe and Asia and the company footprint will be extended to Latin America, the Middle East and Africa in the coming year.  Research on protein kinetics will continue driving the growth and profitability of our diverse client base.

Introduction

HP AviStart was developed by Hamlet Protein based on subjecting selected high-quality soybean meal to a unique patented enzymatic and heat process. Inclusion of HP AviStart in pre-starter and starter diets, promotes digestion and absorption of amino acids in the immature chick and poult’s intestinal tract, promoting growth that is measurable at harvest. Processing of soybean meal to produce HP AviStart sharply reduces anti-nutritional factors. With benefits to feed conversion efficiency and the integrity of foot pads. The combination of enzymatic treatment at moderate temperatures, facilitates rapid digestion of protein and absorption of amino acids along the proximal small intestine, compared to non-processed soybean meal.

The Science Supporting HP AviStart

One of the mechanisms of action of HP AviStart can be measured by applying protein kinetics, which quantifies the speed of digestion of protein in the different intestinal segments, establishes the site at which amino acids are absorbed, and finally demonstrates their level in the portal circulation - ready for tissue deposition.  Protein quality is traditionally evaluated by its digestibility. This parameter quantifies residual undigested protein at the termination of the ileum.  The speed of digestion, the rate of amino acid absorption and the site within the small intestine are not considered when determining the digestibility coefficient. A rapid rate of protein digestion is an important factor in attaining feed conversion efficiency, especially during the first ten days of growth when the digestive tract is immature and is increasing in size disproportionately to deposition of muscle tissue.  The speed of protein degradation can be measured in vitro from the hydrolysis constant, which is determined indirectly by pH titration under controlled incubation in the presence of proteolytic enzymes over a two-hour period.

The difference in the kinetics of protein digestion and subsequent absorption of constituent amino acids among conventional feed-grade soybean meal and alternative protein sources demonstrates the beneficial effects of enzymatic processing under controlled mild heat.  It is evident from the following figure that HP AviStart is absorbed at a faster rate than conventional soybean meal characterizing the product as a “fast protein”.

Enzymatic processing in the presence of heat over a defined period as applied by the Hamlet Protein process inactivates anti-nutritional factors.  Although trypsin inhibitor is usually inactivated by solvent extraction with flash evaporation, crushing plants may either under- or over- process soybean meal with deleterious effects on growth rate.  Heat processing does not generally degrade or inactivate other anti-nutritional factors including galacto-oligosaccharides including stachyose and raffinose.  These compounds contribute to fermentation in the terminal intestinal tract, and provoke inflammation of the mucosa, leading  to dysbacteriosis, and predisposing to a range of intestinal conditions including clostridial necrotic enteritis

ANTI-NUTRITIONAL FACTORS IN U.S. SOYBEAN MEAL 

Scientific trial

Inclusion of HP AviStart in a broiler starter diet at five percent over a ten-day period resulted in a four percent increase in live weight, representing a statistically significant (p ? 0.05) increase compared to controls receiving an isonitrogenous diet incorporating conventional soybean meal. The increase in live weight was attributed to deposition of muscle tissue as a result of more efficient digestion due to the availability of amino acids from HP AviStart, classified as a ‘fast protein’.  This presumption is supported by increased trypsin activity throughout the intestinal tract and higher jejunal mRNA expression of transporters of peptides and amino acids. These observations are correlated with elevated levels of amino acids in the portal vessels supplying the liver, compared to controls receiving conventional soybean meal. 

Financial appraisal of HP AviStart

To determine the potential benefit of adding HP AviStart to a broiler pre-starter or starter diet, realistic assumptions were included in the following projection:

-    The cost of 48 percent soybean meal is $300 per tonThe cost of HP AviStart is around to $800 per ton

-    Conventional starter diet contains 27 percent soybean meal

Then: 

The contribution to diet cost of soybean meal at this inclusion level is $81 per ton. 

 If HP AviStart displaces soybean meal at an inclusion level of five percent of the diet, the combined cost per ton would be:

      22 percent soybean meal, amounting to      $66
        5 percent HP AviStart, amounting to         $40  
                                   Cost of combination    $106 per ton

Differential as a result of the inclusion of HP AviStart is equivalent to an increase of $25 per ton or   1.25 cents per lb. 

In the field: 

Projected feed consumption over the first ten days will be 0.57 lb. The incremental cost of HP AviStart inclusion will be 0.71 cents per bird

-    Assume a live weight of 6.5 lb. at harvest

-    With a standard WOG 75 percent yield, 4.9 lb. of RTC will be attained per bird

Each 1 percent improvement in live weight represents 0.05 lb./bird 

-    Assume RTC value after primary processing at $1.00 per lb.

1 percent improvement in growth is equivalent to 5 cents in incremental value

The Benefit to Cost ratio with each 1 percent improvement is therefore 5/0.7 or 7.1

By applying proportionality, a 2 percent increase would generate a 14.2:1 ratio, a 3 percent improvement, a 21.2:1 ratio and the determined 4 percent results in a Benefit to Cost ratio of 28.4:1

Proportionately higher growth rates and improvements in feed conversion efficiency can be attained by increasing the inclusion of HP AviStart, representing a “fast protein” with low levels of anti-nutritional factors.  The calculation does not take into account the beneficial effect of improved footpad quality, contributing to incremental revenue as an export product.  

HP AviStart is positioned as an ingredient with attributes supported by demonstrated biological mechanisms relating to rapid and efficient absorption of amino acids and diminished effects of anti-nutritional factors.  The in vitro studies involving protein kinetics are supported by controlled trials demonstrating an improvement in live weight at harvest, approximating four percent, compared to controls receiving conventional corn-soybean meal diets.

According to a September 22nd release, USPOULTRY and the associated Foundation have suggested topics in their solicitation for research funding.  The Board Research Initiative has highlighted the following diseases:-

• Control of histomoniasis (“blackhead”) in turkeys and chickens

• Control of turkey coronavirus (TCV)

• Developing effective vaccination strategies for avian metapneumovirus

Requests for proposals released by USPOULTRY and also the USDA reflect emerging and ongoing diseases and conditions of clinical and economic importance in the poultry industry.

Over the past four weeks USDA-FAS has released GAIN reports detailing broiler production, trade and domestic consumption for six nations.

The following table projects data for the industries in the six nations covering 2026

*Thousand metric tons

National RTC Production, Trade and Consumption Data

The two significant public-quoted protein producers based in Brazil recently published quarterly results that may be compared with Tyson Foods in the accompanying posting in this edition:-

JBS NV (JBS)

Pilgrim’s Pride Mainly broiler segment represented:-

22.6 % of sales ($4,755*)

41.3 % of operating income

BRF (BRFS)

-$U.S. x 1,000

This special edition of CHICK-NEWS sponsored by BIG Dutchman USA features the unique DuoChain feeding system designed to supplement existing systems as a retrofit or as an original installation. The additional articles on industry statistics indicating current realities and trends should be of benefit to subscribers in planning and execution of projects.

The two largest U.S.-based public-quoted broiler producers recently published quarterly results confirming the disproportionate profitability of chicken in comparison to other animal-derived protein.

Tyson Foods Inc. (TSN)

TSN broiler segment represented:-

 75.3% of sales ($4220*).

141% of operating income. 

Pilgrim’s Pride Corporation (PPC)

*$x1,000

This special focus edition sponsored by Big Dutchman highlights the DuoChain trough feeder that can be installed as a single line in broiler rearing and laying houses to enhance productivity and save space. The system can be added as an extra feeder line in an existing house, as a retrofit or for new barns.

The accompanying general interest articles confirm limited growth in broiler production, continued gain in bird weight, increasing domestic demand at the expense of beef but with emerging challenges in the export market.

The Big Dutchman broiler breeder catalog lists the full range of products and accessories, including:

Champion® chain feeders for conventional single-circuit  and DuoChain installations   Flex-vey® auger fill systems   Big Dutchman feed bins (silos) featuring auto-lock ground control access and drip-lip design features for deflection of rainwater   Feed weigh scales for silos to facilitate measured feed distribution   Nipple drinkers with or without drip cups and optional water filtering and automatic flushing features   NXB single-hole nests with bird excluders.   Relax communal nests designed for optimal gathering of clean hatching eggs   The EggTrax egg transfer system promoting gentle transport of eggs   EggSort egg collection tables for convenience and saving of labor   Titan fans with capacities ranging from 2,800 cfm to 3,500 cfm at 0.05" SP with high efficiency of power consumed   NBC fan units incorporating belt-driven fans in either 52" or 54" size with displacements from 3,400 to 4,500 cfm with associated galvanized cones and stainless-steel shutters   RainMaker evaporative pad cooling systems with plastic-coated pads for prolonged life   SOLaire™ radiant brooders incorporating stainless-steel components   BigFoot radiant tube heaters for high-efficiency area applications   Swing20 in-house poultry scale to monitor average flock weight   ZeusLED ceiling lights for long life and sustainability   DOL 53 ammonia sensors compatible with the ViperTouch climate computer

Big Dutchman assists customers in selecting and installing equipment for both retrofits and new buildings.

Projects are tailored to the specifications and operating parameters established by the producer, considering factors such as flock size, labor availability and training, climate, sustainability, welfare requirements, and return on investment.

Additional information can be accessed on the Big Dutchman website by clicking on the company logo at the top of this edition.

Production manuals published by primary breeders stress the need to achieve uniformity in the growth and development of both cockerels and pullets to attain genetic potential. This is achieved in part by ensuring even and rapid distribution of feed for both sexes during rearing and subsequently after the onset of production.

The Big Dutchman DuoChain system was developed to satisfy the feed intake requirements of breeder flocks and to optimize floor area by saving space.

In response to original customer requests for a single-length chain feeder system for cockerels, Big Dutchman engineers designed a chain feeding system that compresses a complete circuit into a single trough. This allows simultaneous transport of feed in both directions.

After successful field testing, the application of the DuoChain principle was extended to flocks of rearing pullets, mature hens, and cockerels. By combining the proven efficiency and durability of the Challenger feed chain with an innovative drive system, compatible corners, and a divided trough, it was possible to feed flocks within a short period. The DuoChain system eliminates competition and selective eating, resulting in uniform body weight, organ development, and maturity during rearing and even feed intake during production.

Each trough is 4.8 inches in width and 2.5 inches in depth from the inward curved lips to the base. The parallel chains moving in opposite directions are located within the trough with a shallow longitudinal partition. The feed hopper is placed either at the front or centrally along the line. Each unit can accommodate a house length of 500 ft. Separate grills are provided for the exclusion of males from the female trough or with suitably spaced “toast rack” grills to exclude females from the male feeder line.

Chains run in both directions for fast and space-saving feed distribution

Single Ttrough chain loop with center divider

With a single-phase power supply chain, speeds of 60, 90, 100, or 120 feet per minute can be selected depending on house configuration. With a three-phase supply, variable speed control is optional.

Since the DuoChain installation comprises a single line, it can be installed in existing houses to increase feeding space or as a retrofit to provide separate male feeding that is considered essential for modern broiler breeds.

Advantages of the DuoChain system include:

• Either a suspended or standing installation is available. In the U.S., most systems are suspended with height adjusted by a winch
• Selecting a range of chain speeds to suit flock size and house layout
• Adjustment of height to accommodate the growth of cockerels and pullets
• Rapid feed distribution is achieved to prevent both skip-a-day and restricted daily issues
• Chain feeding promotes natural wear of the upper and lower beaks
• The open trough allows for ease of cleaning and prevents the accumulation of stale feed that may contribute to mycotoxicosis
• Visualization of the flock is facilitated by the uniform positioning of both cockerels and pullets during feeding throughout the rearing phase and then in laying houses after transfer

Following breeder recommendations for feeding space (2 inches per bird through 35 days and 6 inches for up to 105 days), DuoChain feeders will contribute to uniformity irrespective of whether a grading program is used to achieve low flock CV% values.

Besco Structures has integrated design engineering, procurement, construction, project management and service into a cohesive model contributing to client satisfaction. Besco is     ISO 9001: 2015 certified and is qualified by experience and resources to undertake retrofits, additional buildings and greenfield projects for poultry housing, hatcheries, packing and processing plants, feed mills and ancillary buildings

• Design engineers review client requirements through a process of active listening and interaction with regard to an immediate project and for future expansion.  This contributes to establishing specifications for buildings to achieve optimal flock performance over the long term. 

• Besco Structures has available the services of external consultants to compliment the comprehensive experience gained in completing projects in the U.S., France, Poland, Malaysia, Brazil, China and the Philippines.

• Besco Structures is committed to meticulous engineering standards to develop solutions through collaboration among clients, vendors and erectors.  All designs developed by Besco Structures comply with IBC and Eurocode standards and will conform to regional laws and local ordinances.  In designing projects Besco engineers consider environmental factors including seismic loads, climatic extremes including snow load, wind force and the topography of a selected site to ensure long-term structural integrity.

• The sourcing and purchasing expertise within Besco Structures contributes to securing quality materials at competitive prices that are reflected in the capital cost of projects whether individual houses or multi-building complexes. 

• With current concerns over fires in both recently constructed and older buildings, Besco designs flame-resistance into all structures.  Besco buildings are constructed of steel and incorporate insulated metal panels that resist fire.  Individual components that may be damaged in a fire or a climatic event can be removed and replaced.  A fire in a conventional house erected with wooden structural components and flammable panels usually results in a total loss of the building.  Steel structures and non-flammable panels mitigate fire damage and allow repair and replacement of equipment and installations limiting business interruption by reducing the time required to resume production.

• Experience gained in four continents ensures timely delivery and adherence to predetermined completion dates consistent with the biological cycle of flock placement.

Projects completed by Agricon before re-branding as Besco Structures

• Besco construction teams provide on-site management for projects extending from sequenced delivery of components to final handover and commissioning.  Besco Structures delivers buildings with high standards of quality and craftsmanship reducing the need for subsequent modifications and refits and minimizing expenditure on future maintenance.

The Besco Structures approach to engineering, planning and execution is integral to the promise of enduring performance.

click on to review informational video

Introduction

This special focus edition is sponsored by Besco Structures.  On June 15th, Agricon LLC announced their rebranding to become Besco Structures. This emphasizes the company mission to provide engineered steel buildings incorporating quality, durability and innovation for a broad range of applications including agriculture.

Mark Doyle, Director of Besco Structures stated, “While our name has changed our commitment to excellence remains steadfast.”  The new name represents a broader scope and represents the company expertise in delivering engineered buildings.

Besco Structures will continue the service and expertise in engineering and execution associated with Agricon LLC in both the domestic and international markets. 

Specific services to be offered by Besco Structures will include:

• Custom design and engineering

• Manufacturing structural components to precise specifications

• Prompt delivery of building components with ease of erection

• Comprehensive customer support

In commenting on the change in name from Agricon, Brian Steffen, CEO of the Bahler Group, the holding company stated, “This rebranding is a testament to our ongoing commitment to providing our customers with the best possible products and service.  We are confident that Besco Structures will become the industry standard for excellence in steel buildings for agriculture in addition to a wide range of industries.”

This special edition of CHICK-NEWS is sponsored by Ziggity Systems, innovators and manufacturers of poultry watering systems for nearly 50 years. In addition to updated USDA statistics on broiler and turkey production and exports, information is provided on the new Ziggity Max6™ drinker and the basics of operating watering systems for broilers. 

Basic principles of physiology and flock management converge to achieve the genetical potential of current broiler strains irrespective of harvest weight. Care in selection, installation, operation and maintenance of watering systems contributes to optimal live bird parameters, quality, yield and returns to both contractor and integrator.  

1. How Broilers Regulate Water Intake

Birds drink when they are thirsty.  The hormonal and neural mechanisms involved in thirst have developed through the evolution of chickens over millennia. More recently intensive index selection for commercial traits favoring rapid growth and breast yield has influenced behavior and water requirement. The stimulus to drink is initiated by baroreceptors sensitive to blood pressure and osmoreceptors that respond to changes in the chemical composition of blood.  Thirst reflects the interpretation of signals received from receptors that are processed by centers in the brain that encourage drinking.

In contrast to mammals, chickens have two added complications in regulation of water intake. Heat is lost by evaporative cooling only from respiratory surfaces as skin is insulated by feathers. Avian kidneys are relatively inefficient, consistent with their reptilian ancestry.  The glomeruli, microscopic structures in the kidney responsible for filtration are less numerous than in mammals and are smaller and relatively inefficient, placing an additional burden on the neural and hormonal factors that regulate thirst.

When birds are subjected to high ambient temperature, respiratory rate increases to enhance evaporation of water from the surfaces of the trachea, pharynx and oral cavity. With the change in state from liquid to vapor, latent heat is lost, effectively cooling the bird. This process requires water drawn from the blood necessitating replacement from extracellular water. The resultant changes in blood composition stimulate thirst. Evaporative cooling results in increased water consumption by the flock that is evident when comparing water meter readings against ambient temperature.

With an understanding of factors that influence thirst, it is self-evident that simple rule-of-thumb formulas relating to flow-rate of nipple type drinkers are simplistic, meaningless and potentially counterproductive. Water intake by any flock is influenced by age, strain, growth rate and environmental conditions in the house. These include ventilation settings in relation to temperature, humidity and ammonia content of air. It is not possible to induce broilers to eat more than their physiological requirements by attempt to increase water intake through raising water pressure in drinker lines.

1. Water Use Compared to Actual Intake

It is important to distinguish between water use as measured by the volume of water passing through a house meter and the intake represented by the actual volume of water swallowed and hence ingested.  The difference between use and intake represents spillage. A drinker with an excessive discharge of water when activated by the bird will indeed satisfy thirst. It is inevitable that water that is not swallowed due to limitations of the capacity of the oral cavity will be spilled on to the litter. The ability of various substrates including wood shavings and rice hulls to absorb spillage is limited especially with the reality of leakage from imperfectly designed or operated nipples.

The rate of removal of water from litter is a function of the temperature and humidity in the house in relation to the operation of the ventilation system.  At humidity levels below 50 percent and with a minimum ventilation rate of 1cfm per pound body weight, excess moisture will be removed from litter and hopefully under the drinker lines where the flock congregates.  In the event of excessive spillage during drinking and any leakage from drinkers saturation of litter will occur. This is especially evident under conditions of high humidity coupled with low temperature or when suboptimal ventilation rates are applied to conserve gas.

1. Management of Watering Systems

Many within the chicken industry emphasize the importance of a high static-flow rate (excessive pressure to release water) from nipples, usually expressed as milliliters per minute. Simple values relating to age of a flock are essentially meaningless in the context of satisfying thirst.  A static flow rate does not correlate to the way in which a bird actually interacts with a nipple drinker. Chickens peck at trigger pins to receive a small release of water, most of which should be swallowed. Ideally the quantity of water ingested should be adequate to satisfy thirst but not so high that any appreciable quantity is spilled. Nipple drinkers should supply an adequate, but not excessive, quantity of water as the bird pecks at the trigger. This satisfies requirements for growth and prevents spillage on to litter.

Managing a watering system to achieve an undesirably high flow rate, causing excess spillage is analogous to working on a hot day in a garden and drinking from a hose. The flow rate from the nozzle will be too high in relation to the volume that can actually be swallowed over a few seconds. Although thirst is satisfied there is considerable spillage. This may be inconsequential standing on a lawn but in the context of broiler growing, spillage saturates litter in a poultry house with adverse effects on health and quality. 

The correct function of drinking systems should not be measured by static water flow rate but by dynamic release that conforms to the pattern of drinking conditioned  by volume of the oral cavity. The return over production costs for a flock is influenced by adequate water and feed intake and freedom from erosive intestinal and respiratory diseases, resulting in optimal growth and product quality.

1. The Consequences of Wet Litter

High moisture levels in litter extending to areas of saturation is problematic for broiler flocks. Wet bedding is invariably associated with respiratory, intestinal and skin conditions that detract from optimal growth and that compromise quality.

• Intestinal conditions that are adversely affected by wet or damp litter include coccidiosis and clostridial enterotoxemia (necrotic enteritis and hepatitis).  Appropriate control of litter moisture is extremely important in drug-free growing systems. Elimination of chemical feed-additives including antibiotics and coccidiostats presumes greater attention to management of ventilation and watering systems to prevent excess litter moisture. Feed additives used in conventional production suppress intestinal proliferation of Clostridium and block stages in the life cycle of coccidiosis parasites.

• Ammonia is liberated from damp and wet litter. This is the result of bacterial degradation of uric acid excreted by the flock. Ammonia irritates the respiratory mucosa exacerbating the effects of respiratory pathogens including infectious bronchitis and laryngotracheitis viruses.  There is ample evidence to show that flocks subjected to levels of atmospheric ammonia exceeding 25 ppm at bird’s head height for prolonged periods have lower growth rates and higher mortality than when reared at lower levels of atmospheric ammonia.

• Skin is adversely affected by wet litter and ammonia.  Proliferation of Clostridium spp. in damp litter contributes to gangrenous dermatitis. Wet litter with liberation of ammonia predisposes to “hock burn” and pododermatitis restricting growth rate and reducing the value of feet for export.

• Wet litter increases proliferation of Salmonella spp. and Campylobacter spp. These foodborne pathogens are ingested by the flock, colonizing the intestinal tract and coating feathers. This increases the level of fecal excretion, contaminating transport modules, scald tanks, defeathering and E-line equipment, contributing to potentially high levels of pathogens on products. Wet litter favors persistence and proliferation of bacterial foodborne pathogens reflecting adversely on compliance with USDA-FSIS standards. 

Selection and management of watering systems is integral to achieving optimum return from flocks and should be based on applying appropriate pressure settings and operation of ventilation installations.

Over the past ten years, broiler genetics has continued to evolve in ways that emphasize efficiency, growth rate and feed conversion. Birds achieve their target weight faster than ever, with less feed required per pound or kilo of produced weight. Concurrently, bird behavior has changed as well.  Field observations demonstrate that broilers drink more often compared to broilers from a decade ago.

Because of these behavioral changes, Ziggity developed the Max6™ line of poultry watering drinkers. Max6™ drinkers have newly optimized internal geometry which withstands the more frequent pecking behavior of modern birds in a way that mitigates spillage. This ensures that birds receive the water they need without oversaturating the litter and results in drier, healthier housing conditions and more consistent flock performance.

Additionally, the design of the Max 6™ drinker eliminates the need for catch cups facilitating natural heads-up drinking.  Elimination of catch cups maintains the bacterial integrity of a closed drinking system, preventing ingestion of accumulated and contaminated water that is potentially responsible for enteritis and colonization of the flock with foodborne pathogens.

Recognizing that growers incorporate a range of chemicals to decontaminate water systems and to remove biofilm, Ziggity has incorporated materials with enhanced chemical resistance to extend operational life. This will help maintain the functional integrity of the Max6™ drinker and prevent dripping. Leading to saturation of litter in the vicinity of drinker lines.

In launching the Max 6™ drinker, Rob Steiner, Vice President of Sales at Ziggity Systems stated, “We created a drinker to accommodate the bird’s evolved behavior, so flocks get the water they need without spillage.”  He added, “As the industry benefits from advances in broiler genetics, Ziggity watering technology has evolved to allow maximum growth rate while maintaining the quality of litter that has a direct effect on gut health, ammonia and the quality and market value of paws”.

Field evaluation has demonstrated the enhanced return from improved growth and feed conversion, low cull and mortality rates and enhanced paw revenue.

Ziggity Max 6™ drinkers can be used with all existing Ziggity systems or be retrofitted to competitor watering lines using a special- purpose saddle adapter.  This allows for the upgrade of existing installations at minimal cost.

The U.S. and international markets are served through appointed Ziggity Systems distributors who can provide technical assistance and field support.

For almost 50 years Ziggity Systems has pioneered poultry watering solutions and is the industry innovator developing a range of drinking systems for all types of commercial poultry

For further information contact Ziggity Systems Inc. www.ziggity.com or +1 (574) 825-5849 U.S. central time.

Regular editions of EGG-NEWS and CHICK-NEWS will suspend publication at the beginning of 2025. This reality after twelve years of operation is a personal decision to create opportunities for new challenges.

It is hoped that the commentaries, news, editorials and statistical reviews have educated subscribers and readers and stimulated thought and discussion. If the interests of the industry and the wellbeing of their companies and operations have been advanced then the enterprise and efforts have been worthwhile.

Gratitude is extended to sponsors who have made the newsletters possible and provided encouragement over the years. They are all worthy of continued support through their equipment, products and services.

In coming months EGG-NEWS and CHICK-NEWS will circulate focus editions based on innovative products and technology in written and alternative formats to continue the tradition of independent reporting, commentary and advocacy.

An additional nine broiler or turkey integrators have settled for a total of $180 million arising from claims of conspiracy to set wage rates. Defendants with their payments included the following companies with the agreed quantum in descending order in parentheses:-

Tyson Foods and Keystone Foods (combining $115.5 million); Koch Foods ($18.5 million), Foster Poultry Farms ($13.3 million), Butterball ($8.5 million), Amick Farms ($6.3 million), Fieldale Farms ($5.5 million), Allen Harim ($5.0 million), O.K. Foods ($4.8 million), Jennie-O Turkey Store ($3.5 million).

Plaintiffs claimed that both direct collusion occurred among defendants at industry meetings in addition to direct contacts that compared rates and established “no poach” agreements. A significant component of the lawsuit was the availability of wage rates received as subscribers to AgriStats® a proprietary benchmark price discovery service. 

Total settlements to date have exceeded $400 million. This makes Agristats® an expensive subscription not to mention the annual meetings on the Gulf Coast.

Courts have yet to try the case against Agristats® and possibly consider the liability of Elanco Animal Health, owner of the company during part of the period when the alleged collusion occurred.

Dr. Marco Springmann, an advocate for plant-based foods serves as a Senior Researcher at the University of Oxford Environmental Change Institute. He recently concluded a study on the environmental impact of various foods including red meat, milk, legume-based alternatives to meat. With respect to cell-cultured product he commented “For years this approach has been hailed as a dietary magic bullet which would retain all the pleasure of meat without the ethical environmental drawbacks.”  Dr. Springman maintains that the entire concept of cell-cultured meat is a “costly fantasy”.  He notes that technologies are unproven and that even with scale-of-production, and even if it has equivalent organoleptic qualities to conventional beef, pork and chicken, will not be competitive on price.  He maintains that, “Rather than throwing more money at developing novel processed food products, it would be more beneficial to think about strategies to integrate unprocessed foods into diets”. This will require a meal perspective instead of concentrating on individual food items.

Dr. Springmann is evidently a vegetarian, converted to eating plant-based diets as a graduate student in the U.S. His dietary preferences were based on a fear of cardiovascular disease and developing cancer.  He has advocated taxes on red meat and his studies suggest that western nations need to reduce consumption of red meat by 90 percent to have any effect on climate change.

He is less than complimentary over highly processed plant-based alternatives to conventional meat.  He states, “Rather than replacing a burger with another burger, he suggests that meals should be prepared from legumes such as a bean chili or stir fry with tempeh.”  He is an advocate of alternatives to milk, based on their low environmental impact.  He acknowledges that substitutes such as almond milk provide only a quarter of the calories of cow’s milk but generate only 30 percent of the greenhouse gas emission of fluid milk.

Although a proponent of consuming plant-based meals, his approach is essentially analytical, considering the quantifiable inputs and environmental effects of supplying protein from plant and animal sources.

Following the recall of seven million pounds of ready-to-eat deli meat by Boar’s Head Provisions Inc. arising from an extensive outbreak of listeriosis, Representative Rosa DeLauro (D-CT) addressed a letter to the company requesting specific information on current and intended action to reduce contamination.  The response through the law firm Hogan Lovells was less than satisfactory resulting in an expression of disapproval and characterized as a “corporate dodge”. 

Representative DeLauro, who is experienced in food safety and epidemiology, requested specific information on how the company will comply with food safety standards in the future.  The company, through its legal representative, failed to respond to questions on past food safety programs and the egregious deficiencies identified by food inspectors of the state of Virginia and USDA Food Safety Inspection Services.  There was no response as to accountability among management of the Jarratt, VA. plant or the corporate staff responsible for food safety.

USDA documented numerous instances of noncompliance following inspection of the Jarratt plant between August 2023 and 2024. USDA recorded an extensive history of violations during 2022 in the Virginia plant that has since has been closed. 

In a classic example of shutting the stable door after the horse has bolted, Boars Head appointed a Food Safety Council and launched a self-serving website in an attempt to restore consumer confidence.  Boar’s Head recently settled with the estate of one of the ten fatalities, with the prospect of additional lawsuits from among the 60 or more victims of listeriosis traced back to the Jarratt VA, plant.

Circana, a market research company, announced that sales of plant-based alternatives to meat attained $72.3 million at retail in November.  This was a decrease of 4.7 percent compared to the corresponding month in 2023.  Unit sales were down 7.6 percent.

To place plant-based alternatives in perspective, the average monthly revenue for the category in 2023 was $4.5 million. The average total for broilers, turkeys and red meat was $19 billion per month. Based on the monthly figures assembled by Circana, plant-based meat sales represent approximately 0.3 percent of red meat and poultry combined and with a downward trend. To the private and corporate investors in plant based and cell-cultured alternatives to real meat the lesson from the trend in sales is clearly caveat donor.

Stung by criticism over recent outbreaks of listeriosis with the Boar’s Head episode as an outstanding example, the USDA Food Safety and Inspection Service (FSIS) has introduced an initiative to reduce foodborne infection due to Listeria.

The multiphase program will include testing for the genus Listeria in addition to a previous concentration on L. monocytogenes, the principal pathogenic species.  This approach is based on the fact that if any Listeria is isolated from equipment or the environment of a plant producing ready-to-eat items, deficiencies in structure or operations exist, predisposing to infection.

The FSIS will work closely with the National Advisory Committee on Microbial Criteria for Foods for guidance on procedures and regulations. In 2025 FSIS will intensify assessment of plants and facilities with an emphasis on sanitation.  Plants identified as a risk will be subject to repeat visits with the participation of senior inspectors and supervisors.

Instruction and training for food safety inspectors will be intensified.  A mandatory training review course on ready-to-eat foods has been issued and will require study and examination to ensure competency by mid-February 2025. 

Alexander and Hornung, a subsidiary of Perdue Premium Meat Company is recalling close to 1,100 tons of fully cooked ham and pepperoni products according to an FSIS release, since there is a potential for contamination with Listeria monocytogenes.  Products carry the establishment number M10125.  Originally the recall involved 100 tons but was expanded in all probability due to the inability of the processor to identify specific production lots.

The cost of Listeria contamination across meat processing has attained unprecedented levels in 2024 with this incident, and those attributed to Boar’s Head and Yu Shang as the notable protein-related foodborne Listeria outbreaks.

USDA has announced an initiative funded by $165 million from the Commodity Credit Corporation to suppress New World Screwworm (Cochliomyia hominivorax) in Central America and to prevent introduction into the U.S.  After the infestation was identified in Mexico, USDA placed an embargo on importation of cattle across the southern border.  This has led to disruption in live animal trade and has the potential to increase beef prices for consumers.

It is anticipated that importation will resume in early 2025, but this will depend on ongoing cooperation between veterinary authorities in the U.S. and Mexico.  It is envisioned that holding pens will be established at import points along the southern border that will allow inspectors to determine that cattle are free of lesions.

Funds will be made available from the Emergency Allocation to propagate sterile male screwworm flies that will be released in Central America.  Depending on the proportion of sterile males that mate with females, egg deposition on host animals will be markedly reduced, and populations of adult flies should drop. From 1966 onwards the USDA effectively eliminated New World screwworm from north of the Panama Canal through a program of surveillance and release of sterile males.

Dr. Rosemarie Sifford, Chief Veterinary Officer of the USDA, stated, “While the United States will work very closely with Mexico and has agreed to protocols, it will take some time to implement these due to multiple steps needed to resume trade.”

Tyson Foods has embarked on a major redesign of packaging after a span of 15 years.  The initiative is based on market research with a favorable response to changes.  The program will embrace Tyson Foods brands including Hillshire Farms and Jimmy Dean and will focus on a more contemporary appearance with informative messaging emphasizing product quality and nutritional content.

Tyson Foods will combine the rollout of packaging with an advertising campaign with the theme “Always Been Tyson”. The program will involve a phased introduction to avoid write-off of existing material and will extend over the fourth quarter of 2024 into 2025. Fully cooked frozen chicken was initially presented in the new packaging in September. Tyson Foods will follow with refrigerated and fresh products to eventually include all products within the Tyson brand.

Dean Sausage Company (not related to Jimmy Dean, a brand of Tyson Foods) located in Attalla, AL. has been fined $103,000 following an OSHA inspection.  Investigators for the Agency cited the company for safety violations that exposed workers to hazards including electric shock, burns and hazardous chemicals.

Penalties were imposed after inspections in 2022 and 2023 for similar violations.  During the spring of 2024 the company was fined $116,000 for seven repeat violations from the previous 2022 inspections.  The most recent July evaluation determined that many ‘other-than-serious’ violations had not been corrected including failure to train employees or to document hazards relating to chemicals.

Surely the OSHA has the power to reduce danger to workers in plants adjudged to be serial violators.  How bad does it have to become before serious injuries occur.  Why does OSHA or a delegated state agency not have the power to close plants adjudged to be hazardous to workers? Who is minding the store?

Innovative Solutions International, a processor of chicken supplied Trader Joe’s with burgers produced from allegedly boneless chicken supplied by Pilgrim’s Pride.  Customer complaints of bone fragments in the burgers led to Trader Joe’s cancelling a supply agreement with Innovative Solutions resulting in a November recall and eventual cancelation of future purchases by Trader Joe’s.  Innovative Solutions sued Pilgrim’s Pride resulting in a verdict against the integrator with the court awarding $10 million in damages.

The lawsuit filed in 2020 alleged breach of contract, breach of warranty, negligent misrepresentation and violation of the Washington State Consumer Protection Act.

Animal activists, opposed to all forms of intensive livestock production, consistently base their demands on welfare notwithstanding their actual indifference to poultry and animals.  A principal tactic by activist organizations is to coerce retailers into demanding adherence to successively more rigorous “standards” of welfare.  At the heart of the initiative in the U.K. is the Better Chicken Commitment that is claimed to provide marketing advantages to retailers based on consumer sentiment. 

Effectively, the motivators to purchase chicken are quality, taste and price with preference ratings above 75 percent compared to welfare and sustainability that rank below 25 percent in consumer preference studies.

Economists have reviewed the financial impact of the standards required for the Better Chicken Commitment.  Reducing stocking density in the U.S. would require considerably more growing area to maintain current production if the highest level of housing including outside access is applied to the current 165 million broilers per week.

The live bird performance achieved by integrators across the entire industry denotes acceptable welfare and housing as denoted by high livability and growth rate that approach genetic potential. 

The downside of adopting global animal partnership standards include: -

• Predator loss for flocks allowed outside access.
• Higher mortality from exposure to soil-related pathogens.
• Higher production cost from inferior growth rate and a deterioration in feed conversion efficiency

Sustainability will be adversely impacted by lower stocking density and adopting free-range or pastured systems.  The additional broiler placements to compensate for lower output and a higher number of birds would require more feed that in turn has implications for energy and water consumption and generation of waste through the entire cycle of production.

On a restricted brand basis the higher cost can be passed on to a small market of affluent consumers. Subscribers will be aware of the failure of producers of other than conventional broilers with welfare claims requiring outside access and liberal stocking density.

In a release dated December 4th Hormel Foods (HRL) reported on Q4  and FY 2024 ending October 27th, disappointing on the top line, reporting lower revenue and adjusting guidance only slightly for FY 2025. 

For the quarter the company earned a reported (GAAP) $220.2 million on revenue of $3,138 million with a diluted EPS of $0.40.  Comparable values for Q4 FY 2023 ending October 29th were net income of $195.9 million on revenue of $3,198 million with a diluted EPS of $0.36.

Compared to Q4 of FY 2023 sales declined by 1.9 percent, gross margin increased from 16.1 percent to 16.6 percent and operating margin was up from 5.3 percent to 5.8 percent for the most recent quarter. Profit margin was unchanged at 7.0 percent for both quarters.

For the FY 2024 the company earned a reported (GAAP) $805.5 million on revenue of $11,921 million with a diluted EPS of $1.47.  Comparable values for FY 2023 ending October 29th were net income of $792.9 million on revenue of $12,110 million with a diluted EPS of $1.45.

Effective October 2022, Hormel reorganized their operating divisions into Retail, Food Service and International segments.  The Jennie-O Turkey Store Division was integrated among the three operating divisions.  Accordingly, releases since Fiscal 2023 do not disclose either volume or cost data for this subsidiary as in previous years.  In reviewing the release, there was only indirect comment on the turkey business noting higher volume for lean ground turkey meat through Retail and Jennie-O products in Food Service. The report noted a decline in exports of turkey products, impacting the International segment. There was no reference to the risk of HPAI in either the release or the Analysts’ call. The infection has and is impacting turkey flocks in Minnesota and the Dakotas. In previous analysts’ calls CEO Jim Snee expressed ongoing concern over losses during November and December 2023 and the spring wave in 2024.

Segment performance in both sales and operating profit for the most recent quarter was compared with Q4 FY 2023:-

• Retail Segment volume -6.0%:  sales -4.0%: segment profit +2.9%.
• Food Service Segment volume  +2.0%: sales +1.0%: segment profit -8.0%.
• International Segment volume -10.0%: sales +1.0%: segment profit +184.0%.

For FY 2025 the company projected net sales of $11,900 to $12,200 million (up $100 million) and an unchanged adjusted full year diluted net earnings per share in the range of $1.58 to $1.72.

In commenting on Q4 results, Jim Snee CEO and Chairman stated, “Fiscal 2024 demonstrated solid execution of our strategy, the power of our portfolio and the resilience of our team “Across our business segments, we reinvested in our brands, expanded our market presence and introduced innovative solutions to drive impactful results,”

Reviewing segment performance Snee noted "In Retail, our flagship and rising brands, such as Hormel® Black Label®, Jennie-O®, SPAM®, and Applegate®, delivered strong growth and expanded households. Our Foodservice segment again achieved above-industry growth, highlighting the differentiated value and relevant offerings our dedicated team brings to the industry. Our International results reflect a solid recovery, and we remain well positioned to continue expanding our global presence.” He added “The combination of underlying business strength and the capture of $75 million in operating income benefit from our Transform and Modernize (T&M) initiative helped to offset a dynamic consumer environment, the steep decline in whole bird turkey commodity markets, and the production disruption at our Suffolk, Virginia, facility."

He concluded, "The focus on our value-added portfolio, innovation, and T&M initiative has positioned us well for sustainable growth and enhanced shareholder value.”

Hormel Foods posted total assets of $13,435 million on October 27th 2024 of which $6,656 million comprised goodwill and intangibles. Long-term debt was $3,061 million against an intraday market capitalization of $18,080 million on December 16th. HRL has traded over the past 52 weeks in a range of $28.51 (an 8-year low) to $36.86 with a 50-day moving average of $31.25.  HRL trades with a forward P/E of 19.4. HRL closed at $31.82 on December 3rd pre-release. The share price closed almost unchanged at $31.99 on December 4th post release

The 12-month trailing operating margin is 8.9 percent with a profit margin of 6.5 percent. The Company has returned 5.2 percent on assets and 10.0 percent on equity.

Will Coggin representing the Center for Consumer Freedom recently appeared before the American Legislative Exchange Council, a group representing conservative state lawmakers.  At issue was an attempt to solicit an endorsement by Food Solution Action, a lobbying group representing aspirant manufacturers of cell-cultured meat and plant-based alternative to real meat and poultry.  This group presented a case for alternatives to real meat based on the principle of “consumer freedom”. 

Lawmakers were not buying their presentation and voted against endorsing alternatives to real meat based on obvious safety concerns and the needs of their respective constituencies. Many conservative lawmakers with libertarian orientation represent supporters and voters engaged in beef, pork and poultry production. Politicians recognize that intensive livestock production makes available quality protein at an acceptable price, generates jobs and is integral to the agricultural economy of the U.S.

A recent survey conducted in Switzerland* disclosed bacterial contamination of plant-based meat alternatives sampled at retail by public health officials.  Findings suggested the need to apply HACCP principles in the manufacture of plant-based products:

• Six percent of the samples yielded Enterobacteriaceae. 
• Seven percent were contaminated with Listeria spp. other than L monocytogenes but including L. innoculua  and L. seeligeri.  It is noted that there is a zero tolerance for Listeria in food products marketed in the U.S.
• Two percent of the samples were contaminated with Staphylococcus aureus ST8.
• Five percent of the samples yielded Bacillus cereus with all strains identified as potentially pathogenic.

It is assumed that the  FDA, with jurisdiction over plant-based alternatives to meat are evaluating production facilities and conducting assays for heavy metals, other toxins and bacteria. Or do we just wait for a problem to emerge?

*Barmettler, K., et al, Microbiological Quality of Plant-Based Meat-Alternative Products Collected at Retail Level in Switzerland, J. Food Protection doi.org/10.1016/j.jfp.2024

Eleven workers were hospitalized on December 7th after exposure to carbon monoxide at the Otto and Sons plant in West Jordan, UT.  The Company is a subsidiary of OSI Industries, a major processor of meat products for institutional kitchens and major QSRs.

Carbon monoxide is used in packaging to deceptively enhance the red color of ground meat, possibly inhibit potential pathogens and questionably prolong shelf life, especially in case-ready products.  Carbon monoxide is approved for use in the U.S. but is banned in Canada, Japan and the European Union.

Evidently a leak occurred in the plant, releasing carbon monoxide into the atmosphere of the work area.  A number of employees complained of dizziness and one lost consciousness, resulting in a call to first responders.  Fire crews determined that carbon monoxide readings in some parts of the plant attained 800 ppm.  Generally, 35 ppm is considered to be the upper limit of short-term exposure and requiring a breathing apparatus.  Seventy ppm is extremely toxic, and prolonged exposure will reduce the oxygen carrying capacity of hemoglobin with potentially serious results.

It is evident that if carbon monoxide is used in a plant, appropriate monitors with alarm systems should be installed and tested at frequent intervals to allow for rapid evacuation of work areas should a leak occur. It is assumed that OSHA will investigate the

On December 4th, Butterball LLC advised the state of Arkansas under a Worker Adjustment and Retraining Notification that the company will close the Jonesboro facility on February 3rd, 2025.  The plant produces further-processed turkey products employing 180 workers.

Jay Jandrain CEO of Butterball stated, “we deliberated for a long time about this difficult decision as we know it will affect team members and their families.”  He added, “We are committed to helping our team members as they determine next steps in their careers.”

The decision by Butterball to close the facility and consolidate production in other plants follows rationalization and downsizing of facilities by Tyson Foods and other processors as a need to contain cost of production.  Older plants that cannot be upgraded or expanded with installation of modern automated equipment to increase efficiency are obviously candidates for closure.

Joe Erlinger president of McDonald’s USA confirmed that his company will reintroduce the Snack Wrap following consumer demand evidenced by a petition signed by 18,000 and a social media campaign urging reintroduction.

This menu item was introduced in 2006 with beef and chicken options although nine varieties were offered.  The beef version was dropped in 2013 followed by chicken in 2016 although some franchises continued marketing the product through 2020.  Snack Wraps were terminated based on low sales and the length of time required to steam the tortilla and to stuff the wraps.

McDonalds is hoping that the popularity of wraps will increase traffic.

In a November 22nd release, USDA announced three sequential purchases of chicken products for child nutrition and related domestic food distribution programs.  Purchases were made on November 15th, 19th and 20th, respectively, for delivery over the period January 1st, through March 31st, 2025.

In total, the three tranches amounted to 1,930 tons plus 52,128 cases with a total value of $14,205,883. Products included: -

• Frozen non-breaded chicken fillets at $2.71 per lb.
• Frozen chicken strips at $2.29 per lb.
• Cut-up frozen chicken at $2.03 per lb.
• Frozen bagged whole chicken at $1.01 per lb.
• Canned boned chicken at $2.38 per lb.

Following a program of consolidation to improve earnings, Tyson Foods will close the Emporia, KS plant, displacing 800 workers.  This action follows the closure of six chicken plants and an Iowa pork plant.

The Emporia plant produces seasoned, marinated meats and ground beef and is anticipated that production in Emporia will be transferred to the Holcombe KS plant.

Tyson will close two plants acquired in 2017 from Original Philly Holdings located in north Philadelphia. The plants that employ in the region of 250 workers produce sandwiches and appetizers under the Original Philly Cheesesteak brand.

The latest announcements follow closure of six chicken complexes over 12 months in a program of rationalization and consolidation to reduce operating costs.

Following an outbreak of New World screwworm (Cochliomyia hominivorax) in the Mexican state of Chiapas near the border with Guatemala, the U.S. APHIS has halted importation of live cattle from Mexico awaiting a response from the Government of Mexico.

New World screwworm was eradicated from North America in 2006, with a barrier represented by the Panama Canal blocking northward spread of the parasite. Elimination was achieved by releasing irradiated sterile flies and tactical administration of insecticides coupled with surveillance of livestock.  Recently illegal movement of cattle and failure to regulate livestock has allowed northward movement of the infestation with transfer of infective eggs and larvae on cattle from Nicaragua to Mexico.

Based on the import ban, cattle producers in Mexico are pressing their authorities for immediate action to prevent illegal movement of livestock from Guatemala to Mexico.  Action includes strengthening enforcement at border crossings, increasing penalties for illegal livestock movement and encouraging collaboration between government authorities and stakeholders.

The magnitude of trade between Mexico and the U.S. is evidenced by importation of 89,000 head in October with a 13 percent year-to-date increase in introduction of feeder cattle from Mexico compared to 2023.

The APHIS is recommending that livestock producers along the southern U.S. border closely monitor livestock and pets for any indication of screwworm myiasis as denoted by wounds with visible larvae or eggs.

The ban on importation imposed on November 26th resulted in a sharp increase in the price of feeder cattle to $187 per cwt. in December and $256 per cwt. for January delivery.

The APHIS is cooperating with livestock administrators in Mexico, Guatemala and other Central American nations to release sterile male screwworm flies at targeted locations.

Unilever has undertaken a program of divesting non-core businesses and brands in a move to rationalize products in diverse markets.  The most recent action in this regard is a decision to sell the Vegetarian Butcher producing plant-derived meat that in all probability is not generating a return on investment commensurate with company standards.

Unilever has commissioned an investment bank to assist in the disposal of the business with a number of prospective purchasers identified.

According to a recent publication*, a survey conducted by Rutgers, Columbia and Cornell University in collaboration with the International Food Policy Research Institute reported on the motivators for selection of meat products based on perceived attributes.  A sample of 1,224 U.S. adults conducted in 2021 clearly demonstrated the value of quality and taste with health intermediate but revealing indifference towards environmental sustainability and animal welfare. 

The study was conducted to rank motivators determining purchase to ascertain whether reducing meat consumption could benefit the environment.

The significant motivators and their relative rankings were:-

• Quality 85%

• Taste 84%

• Health 63%

• Price 61%

• Availability 59%

• Convenience 44%

• Environmental Sustainability 29%

• Animal Welfare 28%

Among those rating environmental sustainability, 30% characterized the attribute as “not very important” and 36% “somewhat important”.  Among the respondents rating animal welfare, 36% regarded the attribute as “not very important” and 32% as “somewhat important”.

Among participants in the survey, 78 percent consumed red meat one to four times per week and 79 served poultry with the proportions influenced by socioeconomic status.  There was a trend towards reducing red meat with 70% declaring lower consumption as opposed to 34% reducing poultry intake.  This may reflect either health considerations or cost given the availability of both categories of animal-derived proteins in U.S. supermarkets.  Considerations of environmental sustainability and animal welfare were less important motivators in reducing meat intake.

Principal investigator, Dr. Shauna Downs of the Rutgers School of Public Health stated, “Our findings suggest that messaging focused solely on sustainability may not resonate with U.S. consumers regarding their meat choices.”

*Downs, S. et al Sustainability considerations are not influencing meat consumption in the U.S. Appetite. 203: December 1, 2024, doi.org/10.1016/j.appet.2024.207667

According to a company release, Koch Foods will invest $145 million to upgrade the Morton, MS. plant funding an expansion and installation of modern equipment.

Part of the cost will be borne through the Mississippi Flexible Tax Incentive Program.

Koch Foods, based in Park Ridge, IL, operates across a broad area of the Southeast with facilities in Alabama, Georgia, Mississippi in addition to Ohio and Tennessee.

According to a posting on ProMED Mail cases of listeriosis were attributed to consuming prepared meals produced by Yu Shang Food, Inc. Of 11 diagnosed cases nine required hospitalization. One case involved a pregnant woman and her twins both of whom dyed.  Cases were reported in California, Illinois, New Jersey and New York.  As with many foodborne outbreaks, the actual number of those infected is higher than the confirmed cases.  Traceback and identification of the source of Listeria infection is complicated by the prolonged incubation period that may extend to 70 days.

Pregnant women and their infants, the immunosuppressed and elderly are more susceptible to listeriosis than healthy individuals.  In this outbreak, the age of patients ranged from less than one year of age to 86 years. All cases were of Asian ethnicity consistent with the products distributed by Yu Shang Foods.  The vehicle of infection was confirmed to be ready-to-eat chicken products.  Investigations showed that processed pork snouts were contaminated with Listeria suggesting the presence of the pathogen in the environment and equipment of the plant of origin. 

On November 9th, Yu Shang Food recalled ready-to-eat meat and poultry products with a further expansion to a total recall in late November.

Despite news reports indicating that consumers are moving away from turkey as the main protein for Thanksgiving celebrations, a Consumer Digest survey confirmed the popularity of roast turkey. The survey involved 400 Kroger consumers over the three months prior to Thanksgiving showed that turkey was overwhelmingly favored as the centerpiece. Of those surveyed, 81 percent planned turkey as their main protein with ham at 7 percent and chicken at 3 percent.

It was disconcerting to note that 11 percent of respondents had no plans to celebrate Thanksgiving in 2024. This was perhaps a reflection of family fragmentation, the growing wave of loneliness and possibly cost considerations.

Reflecting convenience, 13 percent of the respondents planned to purchase complete meals, encouraged by advertisements by supermarket chains for special Thanksgiving meal kits with both ingredients and instructions. Many retail chains offered prepared meals to serve up to ten diners.

President-elect Donald J. Trump has threatened to deport all illegal immigrants both in his pre-election rhetoric and in subsequent statements and social media posts. The USDA estimates that half of the nation’s two million farm workers lack legal status.

Dave Puglia, President of Western Growers, noted that production will be seriously impacted if illegal workers were to be deported.  Representative John Duarte (R-CA), currently awaiting the result of his reelection bid, commented that his constituency, which includes the Central Valley, was dependent on illegal immigrants and that serious economic consequences would follow mass deportation. Green produce, dairy and meat-packing companies would be adversely affected if workers were to be deported.

Tom Homan, appointed to secure the Southern border and to implement a program of deportation, has indicated that the priority will be illegal immigrants with criminal records or involvement with law enforcement in the U.S.

Given that a significant proportion of U.S. citizens, many receiving SNAP and other federal and state benefits, are disinclined to perform agricultural labor, it will be necessary to extend the program of H-2A visas. This will regularize the employment situation and allow workers to enter the U.S. to perform agricultural labor without displacing U.S. citizens and permanent residents.

During the first Administration of President Trump, there was only limited action against illegal workers including a few raids on poultry processing plants in Mississippi and produce-packing facilities in Nebraska.

EGG-NEWS is indebted to Corey Earle for a review of the Cornell Poultry Science Program recently published in an alumni newsletter.

Professor James Rice, who graduated in 1890, submitting a thesis on poultry production, was appointed to the faculty of the Land Grant University. He established a teaching program in poultry production in 1892.  Rice was a giant among the early promoters of poultry, organizing a judging school, establishing teaching and extension programs culminating in the establishment of the first poultry-dedicated department in the U.S.  His activism and the importance of the emerging poultry industry in the Northeast led to the erection of a poultry science building in 1912, subsequently dedicated in his honor as Rice Hall. 

During the early 1940s, Cornell established a turkey farm with Professor Earl Smith as the Director. He established a breeding program to develop a meat turkey. His hybrid was based on a cross between the White-Holland breed and the Broad-Breasted Bronze to create the Empire White, the first of the turkeys with a broad breast.  Smith also developed artificial insemination due to the dimorphism of toms and hens.  The Empire White debuted in 1953 and was used extensively by the industry. Additional refinement resulted from scientific breeding programs incorporating index selection and biomarkers for desirable traits.

Food scientists, including Dr. Bob Baker, were instrumental in developing further processed products both for eggs and turkeys that contributed to the early success of the U.S. poultry industry.

The 2025 Poultry Market Intelligence Forum will be presented at the International Production and Processing Expo. (IPPE) from 09H00 to noon on Wednesday January 29, 2025.

The program will feature economists who will highlight problems and opportunities facing the poultry industry.  Speakers will include:

• Christian Richter of The Policy Group delivering the Washington Update for 2025.

• Mark Jordan of Leap Market Analytics will discuss the current economy and future trends.

• Wendy Reinhardt Kapsak of the International Foods Information Council will discuss the supply chain, consumerism and related issues.

The Forum is available to all IPPE registrants at no charge.

The U.S. Department of Labor (DOL) accused Qvest LLC of hiring underaged workers for cleaning services at the Seaboard Triumph Foods plant in Sioux City, IA.  The alleged contraventions occurred between September 2019 and 2023.  The Department of Labor accused Qvest of violating the Fair Labor Standards Act by employing 11 minors to clean dangerous equipment during a night shift. Qvest settled with the DOL paying a penalty of $171,000 and required the Company to hire a compliance officer and conduct appropriate training. The Agreement binds Fayette Janitorial Services that acquired the contract in 2023 continuing the illegal practice of employing underage workers.

Seaboard Triumph was not accused of wrongdoing as it did not employ any of the underaged workers.  In a statement, Seaboard Triumph that “it will not tolerate any vendor’s use of underage labor within its facilities.”  Currently cleaning services are provided by members of the United Food and Commercial Workers International Union.

Employment of underage and in some cases illegal immigrant workers to clean plants has been a subject of investigation involving numerous packers. The DOL documented 4,000 violations in 736 facilities from 2023 to date involving $15 million in penalties

Although operators of packing plants claim innocence through the use of third-party contractors, they have a moral and managerial obligation to ensure that obviously underaged workers are not present or performing prohibited work in their plants.  Difficulty in relying on contractors to adhere to state and federal regulations and evident risk to corporate image and reputation resulted in JBS USA undertaking cleaning services within the company.

In January 2016 the Competition Bureau of Cananda investigated alleged price-fixing in the bread industry extending from 2001 through March 2015.  As a result, Canada Bread a subsidiary of Grupo Bimbo SAB de CV paid a fine of US$35 million.

Canada Bread was acquired by Grupo Bimbo  in 2014 at which time Maple Leaf owned 90 percent of the voting stock.  Recently Maple Leaf Foods alleged that Canada Bread defamed Maple Leaf Foods, a shareholder and major meat packer in published statements.

It is anticipated that the Maple Leaf claim and counterclaims by Canada Bread will continue at considerable expense until settled, with the probability of degrading the corporate image of both parties.

In a long-established tradition, the President pardoned two Minnesota turkeys, Peach and Blossom, on Monday, November 25th.  The turkeys were reared in Northfield, MN, spent Sunday evening at the Willard Intercontinental Hotel but will return to their home state to spend the remainder of their lives at the Agricultural Interpretive Center in Waseca.

The Thanksgiving turkeys were presented by John Zimmerman, Chairman of the National Turkey Federation, who grew, selected and conditioned the two presentation toms aged 17 weeks.

The ceremony is a tradition dating back to 1963 established by President John F. Kennedy. It is understood that previous to his administration the presentation turkeys became a centerpiece at the White House Thanksgiving Dinner.

The National Turkey Federation has organized the turkey presentation ceremony since 1947 during the Truman Administration.

In a November 21st release, the USDA Food Safety and Inspection Service announced changes in leadership.

Dr. Denise Eblen, a 25-year veteran of the Agency, will assume the role of Assistant Administrator for the Office of Public Health Science. She earned a Bachelor’s degree in Food Science, a Master’s degree in Public Health and a Doctorate in Food Safety Microbiology from universities in Ireland.  Dr. Eblen was previously responsible for oversight of FSIS laboratories, outbreak investigation and response.

Paul Kiecker has been appointed as Assistant Administrator in the Office of Investigation, Enforcement and Audit.  He is a 30-year veteran of the Agency joining as a Food Inspector in 1988, with roles of increasing responsibility in the office of Field Operations.

Dr. Emilio Esteban, Under Secretary for Food Safety, stated, “Each of these leaders brings a wealth of experience with FSIS including expertise in different aspects of the Agency’s mission and a personal commitment to protecting public health by ensuring a safe food supply.”

BRF a major producer of pork and chicken in Brazil has agreed to purchase a company in the Henan Province of China.  In addition to the $43 million price for the facility, BRF intends investing an additional $36 million to expand production anticipated during the spring of 2025. Capacity will be expanded from 30,000 to 60,000 metric tons annually.  The acquisition will provide BRF with a direct access to the market in China.

The announcement was made during the state visit of President Xi Jinping to Brazil where he met with President ‘Lula’ da Silva.  The respective leaders of the nations agreed to explore “synergies between the Chinese Belt Road Initiative and development programs in Brazil.”  Currently Brazil and China share more than $150 billion in bilateral trade.  President Xi commented on the shared geopolitical and economic interests of their nations.

Other developments arising from the state visit included the Brazilian State Bank BINDES arranging for a $700 million loan from the China Development Bank and an agreement on an orbital satellite venture in collaboration with Telebras the state telecom provider for Brazil.  The Agricultural Ministry of Brazil also announced additional agricultural exports to the value of $450 million including sorghum, fruit and fish meal.

Under the Biden Administration, agricultural trade with China has contracted and it is anticipated that with a more aggressive tariff policy in 2025, exports will decline further with nations including Brazil displacing U.S. products to the detriment of the U.S. agricultural economy.

A group of 44 plants participating in the New Poultry Inspection System have had their waivers to operate at 175 birds per minute extended from mid-Nov to January 15, 2025.  This decision affects facilities operated by all the major integrators and will allow completion of studies on worker safety conducted by third-party experts.

Increased line speeds are opposed by a consortium of welfare activist organizations and the unions representing plant workers.  The evidence presented in hearings relating to the alleged problems arising from increased line speed appeared flimsy hence the formal evaluation, despite the fact that accelerated line speeds have been a reality since July 2022.

Increased line speeds are justified based on advances in processing technology that limit manual procedures.  Mechanization has contributed in large measure to the reduction in injury rates in poultry processing plants, eliminating ergonomic stress and physical injury.

In a press release dated November 13th Maple Leaf Foods Inc. (MFI-TO) announced results for Q3 FY 2024 ended September 30th 2024. Revenue beat consensus with concurrent growth in EBITDA

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS (conversion: CAN$1=US$0.73)

52-Week Range in Share Price:  $14.95  to  $19.56   50-day Moving average  $15.68

Forward P/E 32.6      Beta  0.5

Insider shareholding 40.0%. Institutional shareholding 26.2%

In commenting on Q4 results Curtis Frank president and CEO stated “In the third quarter of 2024, we made significant strides in executing our strategic playbook, achieving strong results in a challenging consumer landscape. Our sales increased by 1.8 percent driven by over 3 percent growth in our prepared meats business, while Adjusted EBITDA rose to Can.$141 million.

Frank continued, “These results reflect our continued investment in our market-leading brands, our leadership in sustainable meats, and alignment with our customers’ strategies, as we expanded retail market share and demonstrated growth in our Food Service portfolio. These factors, together with improving pork market conditions and the benefits from our capital projects, fueled a Can.$9.0m percent year-over-year increase in Adjusted EBITDA.

Frank concluded “We continue to be very excited about the benefits of the spin-off of our pork business, and the future of Maple Leaf Foods and Canada Packers as independent, public companies. The prospect of executing the transaction as a tax-free spin-off is a positive development as we continue to advance our strategy to unlock value and unleash the potential of these two unique and distinct businesses."

Given restructuring, it will no longer be able to evaluate the plant-protein business or to confirm that this previous segment achieved profitability as projected. It appears that Maple Leaf Foods has followed the expedient of “if you can’t fix it, bury it”!

The outlook for the remainder of FY 2024 will include a low single digit increase in revenue growth and capital expenditure of $50 million.

WH Group of China has filed to list the Smithfield Foods U.S. subsidiary.  In a petition to the Securities and Exchange Commission the holding company registered in Hong Kong, intends to offer 20 percent of the shareholding of Smithfield Foods to be traded on either the NYSE or NASDAQ at a time to be announced.

WH Group, the World’s largest pork producer posted earnings of $694 million on sales of $12,293 million for the two sequential quarter ending June 30th 2024. Comparable values for the corresponding two quarters of the previous fiscal year were earnings of $383 million on sales of $13,116 million.

Smithfield Foods was acquired by the WH Group for $4.7 billion in 2013 and was delisted from the NYSE.

Smithfield Foods will be subject to a $2 million penalty for employing eleven minors over night- cleaning shifts at their St. James, MN. plant between April 2021 and 2023.  The Minnesota Department of Labor and Industry determined that Smithfield employed eleven minors aged 14 to 17 in violation of state law over the 12-month period.  The implicated workers served beyond permissible hours carrying out hazardous tasks and using mechanical equipment reserved for adults.

Smithfield will not have to admit liability in terms of the settlement and has agreed to comply strictly with state labor laws extending to staffing agencies and contractors. In mitigation, Smithfield claimed to have screened individuals through E-Verify to ensure eligibility. As with other companies in meat processing Smithfield is subject to deficiencies of the current E-Verify system.

Notwithstanding this defense, management should be able to recognize that workers engaged in cleaning on a night shift are possibly underage and obtain confirmation of eligibility in the event of questionable appearance.  Relying on contractors is not a justifiable defense.

Given pre-election rhetoric, followed by the overwhelming plurality and control of Congress, it is apparent that the incoming Administration will initiate a program of deportation of non-eligible and illegal workers.  The appointment of Tom Homan, a hard line official to implement a phased deportation program should encourage action by employers to ensure compliance with rules on eligibility for employment.

After the initial roundup of illegal immigrants with criminal records, raids will be conducted on packing and processing plants and agricultural production facilities.

It would be prudent for employers to review the immigration status of all employees and to verify visa status, ensuring that E-Verify compliance is documented.

In the current political climate, ICE raids resulting in detention of employees will detract from company image among consumers and customers in addition to disruption of operations.

The outgoing USDA administration recently announced grants amounting to $20 million for 26 projects under the Local Meat Capacity (MCap) Program.  To date, USDA has funded 97 projects valued at $56 million under this initiative.  The objective of the program is to support small-scale and regional livestock production and processing to increase options for farmers.  The program is justified by an internal USDA report Competition and Fair Practice in Meat Merchandizing that claims to lower food prices and to assist livestock producers and ranchers.

Over the past four years, USDA has attempted to restructure meat and poultry production using funding from the Inflation Reduction Act and dipping into the Commodity Credit Corporation piggy bank.

What is important is the magnitude of ultimate benefits to both producers and consumers through funding euphemistically referred to as “investment.” USDA has yet to demonstrate or to quantify a return on the use of public funds or to account for expenditures under diverse ‘giveaway’ programs.

Beyond Meat (BYND) has agreed to settle a 2022 lawsuit claiming false and misleading promotion and deceptive business practices. The company falsely claimed superior nutritional content of its products compared to animal-derived meat.  Beyond Meat claimed higher availability of amino acids from plant-based protein compared to animal-derived products.

Beyond Meat will not admit to wrongdoing but will pay the plaintiff class $7.5 million subject to a January 2025 settlement hearing.

In past months, Beyond Meat has shifted its promotional message from the original focus on welfare and sustainability to health in an attempt to stimulate consumer demand.  Given the financial performance of the company characterized by declining sales, it is questioned whether the current sales strategy can move the needle.  Beyond Meat products lack acceptability based on price compared to equivalent real meat and quality is inferior including appearance and texture when cooked.

According to 2023 data assembled by the Bureau of Labor Statistics of the Department of Labor, the U.S. poultry industry recorded a rate of 2.6 events per hundred full-time workers in 2023.  For comparison, the rate for all agricultural industries was 4.7 with 3.6 for the food manufacturing sector.  The rate in poultry processing plants was lower than all manufacturing industries at 2.8 and general industry at 2.7.  The 2.6 per hundred rate is a 90 percent decline from the corresponding value in 1994.  The improvement is attributed to mechanization that has reduced musculoskeletal injury including carpal tunnel syndrome.  The industry has improved safety in plants by introducing machine guards, training and ergonomic modifications with a concurrent development of a culture of safety.

According to the Joint Poultry Industry Safety and Health Council, the poultry industry remains committed to exploring additional measures to protect workers.  In a joint statement by USPOULTRY, the National Chicken Council and the National Turkey Federation, “Our employees are our most important asset, and their safety is paramount.”  The statement continued, “Having a lower incidence rate than the general industry manufacturing and food manufacturing categories is a milestone we are proud to have reached.  We will continue to set new benchmarks to ensure the safety and well-being of employees.”

Incidence rates for other segments of poultry production included hatcheries at 3.6, rendering 4.5, feed milling 3.0 per 100 workers per year. Within the 2.6 incident rate for poultry processing, it is noted that accidents or illnesses resulted in 0.6 total days away from work, suggesting only minor injuries.

It is not clear whether the poultry processing figure of 2.6 per hundred includes cleaning operations by a third party contractor. Employing minors and untrained personnel and failure to follow lockout procedures has resulted in documented and avoidable injuries.