Updated USDA-ERS Poultry Meat Projection for November 2024.

On November 15th 2024 the USDA-Economic Research Service released updated production and consumption data with respect to broilers and turkeys, covering 2023 a projection for 2024 and a forecast for 2025.

The 2024 projection for broiler production is 47,184 million lbs. (21.417 million metric tons) up 1.7 percent from 2023. USDA projected per capita consumption of 102.4 lbs. (46.5 kg.) for 2024, up 3.4 percent from 2023. Exports will attain 6,717 million lbs. (3.053 million metric tons), 7.5 percent below the previous year.

The 2025 USDA forecast for broiler production will be 47,850 million lbs. (21.750 million metric tons) up 1.4 percent from 2024 with per capita consumption up 1.0 lb. to 103.1 lbs. (46.9 kg). Exports will be 1.3 percent higher compared to 2024 at 6,780 million lbs. (3.081 million metric tons), equivalent to 14.2 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 November 15th 2024

The November USDA report updated projection for the turkey industry for 2024 including annual production of 5,122 million lbs. (2.328 million metric tons), down 6.1 percent from 2023. Consumption in 2024 is projected to be 13.9 lbs. (6.3 kg.) per capita, down 6.1 percent from the previous year. Export volume will increase by 2.5 percent in 2024 to 502 million lbs. (228,000 metric tons). Values for production and consumption of RTC turkey in 2024 are considered to be realistic, given year to date data, the prevailing economy, variable weekly poult placements, production levels, limited losses from HPAI and inventories consistent with season.

The 2025 forecast for turkey production is 5,165 million lbs. (2.348 million metric tons) up 0.8 percent from 2024 with per capita consumption down 1.4 percent to 13.7 lbs. (6.2 kg). Exports will be 5.6 percent higher than in 2024 to 530 million lbs. (240,910 metric tons) equivalent to 10.3 percent of production.

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

 Compared to 2023 exports of broiler products to China during 2024 were 34 percent lower in volume to 405,343 metric tons and 34 percent lower in value to $711 million. For the first half of 2024 broiler volume to 4th-ranked China by volume of imports was down 62 percent from the corresponding months in 2023 to 92,069 metric tons. Value was down 54 percent to $183 million

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

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.

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.

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.

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.

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.

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.

In a press release dated November 12th Tyson Foods Inc. (TSN) announced results for the 4th quarter of FY 2024 ending September 28th 2024. TSN posted higher GAAP earnings ($1.00) than consensus estimates ($0.64) and exceeded estimates on revenue by 1.8 percent, attributed to performance in the Chicken Segment

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)

* Goodwill and intangibles 42.3 percent of total assets

For FY 2024 Tyson Foods earned $800 million on revenue of $53,309 million with a diluted GAAP EPS of $1.00. Comparable values for FY 2023 were a loss of $(648) million on revenue of $52,881 million with a negative EPS of $(1.87)

52-Week Range in Share Price of TSN:  $45.38 to $66.88.  50-day Moving average,  $60.19

Market Close: Monday November 11th $61.24. Open Tuesday November 12th post release, $62.50.

Forward P/E 15.6                  Beta 0.8

The Chicken Segment attained sales of $4,251 million ($4,155 million in Q4 FY 2023) representing 31.3 percent of Company revenue. GAAP operating income attained $356 million in Q4 representing 69.5 percent of net Company operating income. Operating income in Q4 FY 2023 was $75 million.  For the Chicken Segment the report stated:- “The USDA projects chicken production will be up three percent FY 2025”. Anticipated adjusted operating income for the segment was forecast at $1,000 to $1,200 million for FY 2025. Improvement in the Chicken Segment is attributed to lower feed cost and reduced operating expenses with consolidation following closure of six plants in four states.

For comparison among Tyson Foods’ business segments the adjusted operating income (loss) in Q4 2024 were respectively:- Pork, $(19) million; Beef, $(71) million; Prepared Foods $205 million and International & Other $3 million.

In commenting on results Donnie King, president and CEO stated. "We delivered significant improvement in profitability for the fourth quarter and full year. We also strengthened our financial position, with solid cash flow generation and a substantial reduction of our net leverage ratio." He concluded "Looking ahead, we are optimistic about our outlook and our ability to deliver long-term value to our shareholders. Our multi-protein, multi-channel portfolio, combined with our best-in-class team, iconic brands and focus on operational excellence positions us well for Fiscal 2025 and beyond."

Improved Q4 earnings raised TSN on a down market. The investors’ call stressed a ‘positive turnaround’ in Q4.

Guidance for FY 2025 included Revenue down one percent to flat from FY 2024. Adjusted operating income for the Company was projected at $1,800 million to $2,200 million with Prepared Foods contributing $900 to $1,100 million. Capital expenditure was projected at $1.0 to $1.2 billion.

In the Q2 2013 report Tyson Foods projected $1 billion in savings from the “Productivity Program” by the end of 2024 although this prediction was not confirmed as a quantitative value in the most recent quarterly report.

According to the Seaboard Corporation SEC 10-Q submission, their Butterball LLC subsidiary generated a net profit of $10 million on quarterly sales of $484 million over the third quarter ending September 28, 2024.  Comparative values for the corresponding third quarter of FY 2023 ending September 30th were net earnings of $35 million on sales of $534 million.  The $50 million decrease in sales value was due to lower prices for comparable products.  Lower feed cost in part offset the decline in unit revenue.  Third quarter operating income for Butterball declined from $43 million in Q3 2023 to $16 million for the most recently completed quarter.

Seaboard Corporation owns 52.5 percent of the equity in Butterball LLC.

In a press release dated October 30th Pilgrim’s Pride Corp. (PPC) announced results for the 3rd Quarter FY 2024 ending September 29th. The quarterly figures showed positive earnings for all three segments with higher revenue and operating profit across all three geographic areas. Earnings were 4.2 percent above above consensus estimates but revenue fell short of an expectation of $4,600 million.

The following table summarizes the results for Q3 2024 derived from the SEC 10-Q form and the Company release. Values are compared with the corresponding Q2 FY 2023 (Values expressed as US$ x 103 except EPS)

Notes.

   1. Sept. 29th 2024/ December 31st 2023.

• Q3 2024, $22.1 million investment loss (Q3 2023, $12.1 million gain)
• Q3 2024  $7.9 million miscellaneous loss (Q3 2023, $2.2 million gain)
• Q3 2024  $0.7 million gain in foreign currency transactions (Q3 2023 $8.9 million loss)

Operating income and sales posted by the three business segments during Q3 2024 were:-

      U.S.       82.5 percent of company operating income on 60.4 percent of sales

      Europe    9.0 percent of company operating income on 28.5 percent of sales

      Mexico   8.5 percent of company operating income on 11.1 percent of sales

52-Week Range in Share Price of PPC:  $25.23 to $55.50.  50-day Moving average,  $45.68

Market Close: October 29th: pre-release    $48.09.

             Close: November 5th : $53.28, representing a gain of 11.7 percent over 5 trading days

Current Forward P/E 13.8    Beta 0.8  

Equity held by insiders and holding Company: 82.6 percent, Institutions, 16.1 percent

In commenting on Q2 results Fabio Sandri, CEO stated, “Throughout the quarter, we continued to emphasize operational excellence, diversify our portfolio and cultivate partnerships with Key Customers to drive value for the consumer. He added “In the U.S., the relative affordability and availability of chicken drove increased demand across retail and food service. Case Ready and Small Bird drove profitable growth as demand improved from Key Customers and there was continued progress in operational excellence. In Big Bird, profitability grew from sustained improvements in production efficiencies, lower input costs, and enhanced commodity cutout values. Similarly, Prepared continued to diversify the portfolio through incremental distribution across retail and foodservice”.  

Addressing European operations Sandri stated “Europe realized its highest quarterly adjusted EBITDA to date given continued progress in operational excellence, further diversification through branded offerings and strengthening Key Customer partnerships. New product introductions continue to gain momentum as the business launched over 280 new products during the quarter.  

In relation to Mexico Sandri noted, “Mexico continued to build its presence with Key Customers across retail and foodservice and further diversify its portfolio through brands. Investments in operational excellence to build capacity and drive operational efficiencies remained on track. He concluded, “Mexico continued to successfully drive all pillars of our strategies during typical seasonality for the business. As a result, we are increasingly well positioned to capture both short- and long-term growth opportunities,”

In a sponsored trial, Southern Poultry Research demonstrated the benefits of CLOSTAT® additive in reducing the impact of necrotic enteritis induced using a proven challenge model. This involved administration of a coccidiosis vaccine followed by inclusion of a known pathogenic field strain (CP4) of Clostridium perfringens in feed.

The experimental design comprised a replicate pen trial with three treatments. These were a negative non-infected control, a positive challenged control and a treatment comprising challenge with the addition of CLOSTAT to feed.

Inclusion of CLOSTAT® at 1 lb./ton improved bodyweight gain over 42 days from 2.10 kg. to 2.25 kg., significant at the 0.05 probability level.  In contrast, negative controls gained 2.30 kg.

The negative control attained a feed conversion of 1.699, significantly lower than the challenged birds at 1.790.  The treatment receiving CLOSTAT® and challenged applying the Southern Poultry Research Model yielded a feed conversion of 1.716, that was not significantly different from the negative control but statistically lower than the challenged birds in replicate pens.

In evaluating the financial benefit of CLOSTAT in a one million bird per week complex it was assumed that 10 percent of weekly live production would be affected by a range extending from clinically non-detectable to significant clostridial enterotoxemia with growth depression and mortality.

Based on the trial the benefit in terms of restoring production that is attributed to CLOSTAT would be 110g per bird live or 82.5g RTC assuming 75 percent WOG yield.  The incremental weight sold as a result of CLOSTAT medication would be 8,250 kg over 100,000 birds or 18,150 lbs.

Production of 100,000 broilers would require 836 tons of feed assuming 4.86lb. live weight per bird and 1.72 FCR based on the data from the trial. With the $1.80 per ton cost of addition to feed, expenditure on CLOSTAT would be $1,505 for the 100,000 broilers.

The benefit to cost ratio would be dependent on RTC margin as shown below:-

Margin c/lb RTC     Benefit      Benefit: Cost

             25                  $4,537           3.0

             35                  $6,353           4.2

             45                  $8,168           5.4

Hybrid Turkeys has announced a strategic partnership with the developers of TurkeyTrac a data collection and analysis system.  In terms of the agreement, Hybrid Turkeys will the exclusive distributor. 

TurkeyTrac will allow growers to enter data including feed and water consumption, body weight, mortality and environmental variables.  This will allow analysis of data in relation to flock performance.  It is intended to supplement TurkeyTrac with ongoing support by the Hybrid technical team in order to optimize genetic potential for growers.

Field data will be archived by Hybrid for analysis and guidance of the breeding program through data input from diverse production systems and environments.

According to USDA-GAIN Report BR 2024-28 released on October 9th, Brazil will continue as the world's leading exporter of broiler meat. Volume of shipments will attain 5.0 million metric tons, an increase of 2.0 percent over 2024.  Exports during 2025 will attain 33.1 percent of the projected production of 15.1 million metric tons, an advance of 0.7 percent over 2024.  Assuming a domestic population of 216 million, per capita consumption will attain 46.7 kg. (103 lbs.).

In order to maintain export volume, Brazil has intensified surveillance over highly pathogenic avian influenza (HPAI) and is negotiating acceptance of regionalization among major export markets. Brazil is vulnerable to HPAI, having recorded 166 cases in migratory marine birds and a few backyard farms during 2023-2024. Miraculously no cases were diagnosed among commercial flocks that would have required reports to the WOAH and consequential disruption in exports.

Producers in Brazil have concentrated on halal markets and in recent years have made investments in domestic production in the Emirates and Saudi Arabia, a trend that will continue.

In contrast to the U.S., Brazil has adopted a consumer-oriented approach to exports, supplying a wide range of whole birds, portions and added-value products specific to the needs of identified markets.  Given this flexibility and aggressive promotion, Brazil will remain a formidable competitor to the U.S. that offers undifferentiated commodity leg quarters comprising 97 percent of broiler exports. 

Hormel Foods Corp, the holding company for Jennie-O, Turkey Store has announced an expansion program to add 20,000 square feet of space to their Willmar, MN. plant.  The project will be completed during the fourth quarter of 2025 and will include modernization of equipment to improve efficiency and to expand product range to include additional value-added items.

United Natural Foods, a major wholesale distributor was the subject of a lawsuit filed by NYSM Organics of Vineyard Haven, MA.  The complaint filed in the Superior Court of Rhode Island charges UNFI with breach of contract arising from unjust use of prompt-paid discounts.  The plaintiff alleges “intentional and systematic but unjustified discounts despite withholding payments on supplier invoices.”

The complaint apparently disclosed discriminatory practices against small suppliers.

In rebutting the claim, UNFI stated, “We value all our supplier relationships and take any concerns seriously.”

For the most recently concluded FY2024 ending August 3rd UNFI posted a loss of $112 million on sales of $30,980 million with a negative EPS of $(1.89). Comparable values for FY 2023 were earnings of $24 million on sales of $30,272 million with an EPS of $0.40.

In a movement intended to reduce costs, Americold Logistics will consolidate facilities near the port of Savannah, GA.  The intention to close the Pooler facility was conveyed to the State in a Worker Adjustment Retraining Notification with an intended closure on December 31, 2024.  Americold Logistics operates facilities in Douglas, GA and Summerville, SC and it is presumed that the 58 positions to be eliminated at Pooler will be offered to current workers.

The Board of Directors of the National Chicken Council has announced the appointment of Harrison Kircher as president and CEO, effective January 1st 2025.

Kircher is a 13-year veteran of the NCC.  He advanced from an intern through various managemental positions including Governmental and Legislative Affairs.  He was promoted to Senior Vice President of Government Affairs in 2021 and has managed lobbying efforts on Capitol Hill on issues affecting the industry including immigration, labor, and trade.

Kircher graduated from the University of Virginia in 2009 and gained experience in marketing at Ogilvy and Mather in New York.

On accepting the appointment, Kircher said, “I am especially confident in our future success given the very strong team around me at NCC.  I look forward to the challenging continuing the tradition of service and effective representation in Washington.”

Chairman of the NCC Board, Bill Griffith stated, “Harrison’s dedication, expertise and leadership have been evident throughout his time with the Council.  We have complete confidence in his ability to guide us towards a successful future.”

BRF of Brazil has reported the purchase of 26 percent of the equity in the Saudi Addoha Poultry Company for  $84 million.  This follows investment of $500 million in broiler processing and food production enterprises in collaboration with the Saudi Public Investment Fund. 

Saudi Addoha produces 45 million chickens annually with a planned expansion to 65 million in the coming year.

Saudi Arabia imports 200,000 tons of processed poultry from Brazil each year, justifying expansion of domestic production.

In February a former employee of Hormel Foods filed a lawsuit against the Board of Directors of Hormel Foods alleging mismanagement of the company retirement plan.  A Federal court in the District of Minnesota has rejected a motion by Hormel for dismissal, allowing the case to proceed. 

The claimant maintains that Hormel directors deviated from their “fiduciary duty of prudence” by including equities with high risk in the $1.2 billion retirement plan.  While the outcome of this case will not affect the ongoing operations of Hormel Foods, disaffection of employees may result if the allegations are substantiated.

The September 25th USDA-GAIN Report on Canada, CA2024-44, projected a 2.5 percent increase in broiler production to 1.465 million metric tons (6.66 million lbs.) in 2025.  Producers in Canada operate according to a controlled quota system with independent farmer-growers purchasing feed and chicks, often through cooperatives and selling live birds to processors.

In 2025, USDA estimates total imports at 215,000 metric tons, up 4.9 percent from 2024.  Exports will amount to 125,000 metric tons resulting in net importation of 90,000 metric tons.  Given a population of 39 million, per capita consumption will attain 44.7 kg. (98.4 lbs.) close to that of the U.S.

In 2023, Canada was ranked 7th among importers of U.S. broilers and products with a total quantity of 142,434 metric tons valued at $435 million.  Imports in 2023 were respectively down 7 percent in volume and 11 percent in value with a unit price of $3,054 per metric ton indicating whole birds and added-value product.

For the first seven months of 2024, Canada moved to 6th place, importing 84,766 metric tons valued at $258 million with a unit price of $3,044 per metric ton.  This can be compared to the average of all exports for the seven-month period of $2,631 million with an average unit price of $1,382 per metric ton confirming a different range of products.

For 2024, the U.S. held 80.4 percent of Canadian broiler and product imports followed by Brazil at 7.5 percent, Thailand at 5.1 percent and Chile rising to 3.9 percent as a result of membership in the Comprehensive and Progressive Transpacific Partnership with a relatively low tariff rate quota.

Exports to Canada peaked in 2020 at 160,791 metric tons but this included deceptively-described broiler products as “spent fowl” to avoid paying a tariff.  With stricter border controls, this practice has ceased together with stricter scrutiny of the import for re-export program. 

The Canadian Food Inspection Agency enforces a ban on re-export of chicken from Brazil to the U.S.  Chicken products from Brazil do not enter non-eligible Canadian facilities that are authorized to export to the U.S. 

After an initial failure to establish a foothold in the U.K. in 2019, Chick-fil-A intends to expand internationally with a second initiative involving stores in London and Northern Ireland and in industrial centers including Leeds and Liverpool.

Chick-fil-A is a closely held corporation and does not release financial data.  Technomic a market research company specializing in the food industry estimates that annual sales are in the region of $20 billion annually.  With approximately 3,000 U.S. locations, each store generates  annual sales approaching $6.5 million, far in excess of competitors McDonald’s, Burger King and Wendy’s.

Joanna Symonds the designated head of U.K. operations noted, “We have always cared about the impact of our restaurants on the local communities that we serve, and we strive to positively impact areas throughout the U.K.  She added, “Caring for people, while delivering great food is at the heart of our brand and we encourage our local Owner Operators to partner with organizations that support their local communities.

Chick-fil-A intends sourcing both chicken and free-range eggs from local suppliers adhering to acceptable welfare certification.  Surplus food will be distributed to shelters and foodbanks and restaurants will donate to nonprofit charities. The PR campaign should offset some of the xenophobia directed against the first store established in Reading, Berkshire in 2019.

Dr. Sagar Goyal of the University of Minnesota has made progress in developing live attenuated vaccines to protect flocks from turkey reoviral arthritis (TARV) and hepatitis (THRV).

Six different vaccines were prepared using three strains of field isolates of reovirus.  Candidate vaccine viruses were subjected to either serial passage or cold adaptation.  The attenuated vaccines did not induce clinical changes confirming safety. There was apparently no stimulation of measurable systemic antibody.  Challenge with field strains of TARV indicated that protection was inadequate based on histopathologic examination of tendons.

Dr. Goyal suggests that although a single vaccine administered at 10 days provided inadequate protection, multiple doses of vaccine may be required.  Further studies are in progress to evaluate alternative frequencies and routes of vaccination. Ultimately protection will be possible from the  sequence of primary stimulation with one or more attenuated products followed by a subsequent inactivated booster vaccine to establish maternal antibody transfer for breeder hens.

The Ninth Perdue Farms Annual Care Summit, reviewed the requirements to produce under the pasture-raised claim. The USDA has requested comments, after approval in principle for a working definition.  The key requirement for applying the term “pasture” is that poultry and cattle should be raised on land having rooted vegetative cover of grasses and plants.  Perdue initiated the petition to promote transparency and to differentiate “pasture-raised” from “free-range”.

The comment period will end on November 12th and if the proposal is adopted any label claims for “pasture-raised” will have to conform to the standard.

Ryan Perdue, Senior Vice-President of Perdue Premium Meats, an emerging brand, stated, “Consumers deserve transparency and clarity when it comes to how their food is raised.”  He added, “This new standard developed in partnership with nearly 1,000 small pasture poultry producers, shows that “pasture-raised” means what it says, raising chickens that spend the majority of their lives on pasture”.

In addressing the Summit, Dr. Bruce Stewart-Brown, Chief Science Officer at Perdue Farms, stated, “At Perdue we’re dedicated to advancing the health and welfare of our chickens through research-driven practices and technology.”  He added, “By prioritizing the well-being of animals, we create healthier environments that benefit livestock while also enhancing product quality.”

The Meat Institute is urging the U.S. Trade Representative (USTR) to be aggressive in supporting exports of red meat and poultry in 2025.

Julie Anna Potts, President and CEO of the Meat Institute, stated, “The resilience of the U.S. meat and poultry industry is inextricably linked to the trade policy and promotional initiatives that foster growth in meat and poultry export.” The Meat Institute also highlighted the importance of imports of beef from Canada and Mexico since trade within the USMCA is interlinked.

The Meat Institute urged the USTR to attempt to remove tariffs imposed by China. This prospect would appear to be even less attainable in the event that tariffs are imposed by an incoming Administration.

Other issues raised by the Meat Institute include removal of unjustified embargos based on disease and market diversification as a means of counteracting competition.

At the end of the day, there is little that the USTR can achieve if importing nations are self-sufficient. It is unlikely that diplomacy will support trade if the U.S. imposes punitive tariffs on imports from nations to whom we wish to export agricultural products including meat and poultry.

The Saudi Agriculture and Livestock Investment Company (SALIC) has acquired a 13 percent stake in MHP SE of Ukraine.  The holding company of MHP operates Perutnina Ptuj that process meat and poultry in Slovenia, Croatia, Serbia and Bosnia.  Perutnina Ptuj also distributes through subsidiaries in 15 EU nations. 

This investment by SALIC adds to their broiler-production portfolio which includes an investment in BRF S.A. with 11 percent of the equity allowing transfer of technology and expanding domestic production in addition to importation from Brazil.  The investment in MHP will generate synergy since the company will cooperate with Tanmiah Food Company in existing facilities and a proposed joint venture in Saudi Arabia.

Turkey producers in the U.S. will now be able to administer an imported Boehringer Ingelheim vaccine against turkey rhinotracheitis.

The inactivated TUR-3 product is licensed for use against avian metapneumovirus in the E.U.

Permission to import the vaccine was supported by the National Turkey Federation to protect flocks against an emerging and widespread erosive infection.

USPOULTRY in collaboration with the National Chicken Council funded an economic impact study conducted by John Dunham and Associates. Using data from 2024, it was calculated that the broiler industry is responsible for 1.4 million jobs, $90.9 million in wages, $450 million in economic activity and $36.7 billion in government revenue.

In commenting on the release of the study Gary Kushner Interim president of NCC stated, “We know that chicken is nutritious, affordable and versatile but chicken also means jobs – whether i on the farm in the processing plant, the transportation sector, manufacturing, or retail restaurants.”  He added, “This data will prove extremely helpful as we welcome a new Congress to Washington next year.”

For the month of July prior to the July 26th Boar’s Head recall that grew to 7 million lbs. of product, deli meat sales attained 69.1 million lbs. with a value of $732.7 million similar to the preceding month.  During August, deli meat sales were down 11 percent from July and 9.3 percent from August 2023.  The greatest loss was in deli-service lunchmeat, down 17 percent.  The situation continued through September with deli meat sales at a 13-week low attaining 60.8 million lb. down 12 percent from July with sales attaining $626.4 million down 15 percent.

In contrast, packaged sandwich meat was generally unaffected and in September sale of pre-sliced lunchmeat was up 4.9 percent on a volume basis.

Concern over the extent of the Listeria outbreak and revelations of improper production and handling has obviously diverted demand from deli-service meat to pre-sliced packaged product benefiting the turkey and chicken industries.

Members of the European Parliament have addressed a letter to Gary Gensler, Chairman of the U.S. Securities and Exchange Commission, urging rejection of the application by JBS S.A. to be listed on the New York Stock Exchange.

The action by the legislators reflected concern over environmental issues with JBS contributing to deforestation of the Amazon rainforest and noting the history of the company as led by the Batista brothers involving alleged unethical and illegal activities in Brazil.

Following the bankruptcy of Pure Prairie Poultry, concerned members of Congress are questioning loans and grants to the bankrupt company amounting to $45 million.

In a letter addressed to Secretary of Agriculture, Tom Vilsack, the legislators are questioning the basis for financial support and evaluation of the enterprise with respect to both collateral and capacity to repay the principle.  Failure of the company left 50 contractors in three states without income and 1.3 million broilers had to be euthanized since there were no funds available for feed or care.

The failure of Pure Prairie Poultry raises the question of numerous loans made to aspirant and small-scale livestock producers under various rural development programs. Since 2001, the Department of Agriculture under the current Secretary has attempted to restructure meat and poultry production by supporting and creating alternatives to existing packers and integrators.  The USDA refers to loans and grants as “investments”.  This presumes a return on the public funds assigned with eventual repayment and with interest on loans. Since public funds are involved, USDA administrators should exercise competent and diligent oversight as would be conducted by a financial institution.  The USDA in its futile efforts to encourage competition with established packers and processors has been effective in developing programs to disperse public funds but has been abysmally incompetent at quantifying the outcomes including repayment.

The intervention of the Inspector General of the USDA or relevant federal agency is clearly indicated given the magnitude and extent of loans and grants made during the past three years.