Poultry Industry News

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.

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.

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.

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.

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.

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.

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. 

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.

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 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.

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.

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.”

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,”

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.

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.”

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.

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.

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.

Following the release of an October video by activist organization Animal Outlook, Foster Farms responded with immediate action since the video allegedly depicted improper handling that violated company policy.

Randy Boyce, General Counsel for Foster Farms, stated, “In terms of our zero-tolerance policy, we terminated employees involved and a referral has been made to the Fresno County law enforcement authorities.”  Boyce continued, “Put simply, conduct was counter to everything we stand for as a company and our actions ensured those responsible are held accountable.”

Additional responses by Foster Farms included company wide animal welfare retraining, appointment of a Chief Animal Welfare Officer and increased welfare auditing.

Irrespective of training and auditing, deviations from acceptable practice can be anticipated. An appropriate deterrent is to monitor harvesting operations on all farms using video as applied by Butterball in North Carolina. Knowing that they are under surveillance harvesters should conform to humane handling standards and procedures.

Butterball, LLC, will market a frozen whole turkey without neck or giblets.  This will allow for simple preparation since frozen birds can be unwrapped and placed in an oven without need for thawing, basting, brining or seasoning.

Instructions on cooking are available on the Butterball Turkey Talk-Line.  The cook-from-frozen turkeys will be available from major chains including Kroger banners and Publix stores.

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.”

During the Ninth Annual Animal Care Summit organized by Perdue Farms, a session was organized on increasing consumption of dark meat in the U.S.  Participants stressed the cost differential and nutritional quality of dark meat, preferred in many nations. Leg quarters represent 98 percent of chicken exports comprising 15 percent of annual U.S. RTC at an average price of $1,300 per metric ton.

CHICK-NEWS has long advocated for domestic consumption of dark meat. This will require product innovation and the development of menu items that incorporate dark meat.  U.S. integrators will encounter increased competition from exporters including Brazil and also the national production in traditional importing nations.  Producers will face the prospect of tariff barriers if the U.S. pursues a program of placing high tariffs on imports.

The balancing act will involve marketing more dark meat in the U.S. without detracting from consumption of higher-priced white meat.

The Congressional Chicken Caucus has requested the USDA to extend the comment period for six months beyond the current November 7th deadline.  There is considerable misunderstanding as to the scope of the proposed USDA Salmonella Standards including determination of serotype,  means of differentiating among the designated strains and the basic question of what action can be taken in the event of determining one or more strains may be present in products.

The proposed Salmonella standard released in July has the potential to seriously disrupt production, adversely impact cost and ultimately to be disadvantageous to integrators and consumers.

The advocacy groups including Stop Foodborne Illness, the Consumer Federation of America and potential responders affiliated to major universities and schools of public health are also requesting an extension. This will allow a review of the proposed standards and to provide appropriate comments based on scientific validity.

According to the new Inspection Guidance for Animal Slaughtering and Processing Establishments, the Occupational Safety and Health Administration (OSHA) will expand activities in accordance with NAICS3116 (Animal Slaughtering and Processing).  The action was taken based on data indicating that processing of meat and poultry has a statistically significantly higher level of injuries and illnesses compared to industry in general.  Hazards recognized by OSHA include: -

• Defective ergonomics leading to musculoskeletal injury.
• The misuse or failure to supply or wear personal protective equipment.
• Non-compliance with lockout-tag-out procedures.
• Slips and falls.
• Defective guarding of machinery to prevent accidental contact.
• Exposure to hazardous chemicals including ammonia, chlorine, peracetic acid, carbon dioxide and nitrogen in gas and liquid form.
• Occupational noise.
• Inaccessible exits.

Action by OSHA during 2025 will be strongly influenced by the future Administration as evidenced by events during the COVID period compared to intensified inspection and citations over the past three years.

The U.S. Department of Labor has initiated an investigation into the alleged hiring of minors for night-shift cleaning.  The situation arises following complaints lodged with the U.S. Department of Labor under the Fair Labor Standards Act.  After an initial review in which inspectors observed young people entering the Green Forest, AR plant in mid-summer, the Wage and Hour Division obtained a court order to review wage and employment documentation at the plant.

Given the revelations relating to illegal employment of minors in meat plants and the fines levied against Packer’s Sanitation Services, it would indeed be damaging to the image of Tyson Foods to have the allegations validated by the Department of Labor.

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

Aviagen America Latina announced severe damage to a breeder production hatchery located in Carambei, Parana State Brazil.  Although there was extensive damage to the structure and installations there were no injuries reported.

Aviagen America Latina will make use of its extensive resources to maintain the supply of breeding stock to the industry served by the hatchery.

At the recent annual meeting of the National Chicken Council new officers were invested.

• Bill Griffith, COO of Peco Foods will serve as Chairman

• David Jackson, COO of Simmons Foods will serve as the Vice-chairman.

• Kevin McDaniel, COO of Wayne-Sanderson Farms joined the board.  He is the CEO designate for his company.

• Gary Kushner will continue to serve as interim president of the BCC.

Kushner paid tribute to Randy Day, Immediate Past-Chairman for his service to the National Chicken Council and to the industry over his entire career.

Kushner noted challenges in the coming year including the proposed Salmonella Rule, avian influenza control including vaccination and proposed regulations relating to labor and environmental compliance.

Clint Rivers will retire as president and CEO from Wayne-Sanderson Farms on March 31, 2025.  He will continue to serve as Executive Chairman of the Board during the 2026 fiscal year. Kevin McDaniel, currently COO and newly elected Chair of the NCC, will succeed Rivers on April 1, 2025.

He assumed the chairmanship of Wayne-Sanderson Farms after completion of the acquisition of Sanderson Farms.  He joined Wayne Farms in 2012 as Vice president and General Manager of the Fresh Business Unit.  He was appointed president and CEO in 2017.

Rivers has a extensive list of accomplishments in the industry having served as president of Food Service and Supply Chain for Perdue Farms for six years, 21 years with Pilgrim’s Pride, rising to COO and president. Among many positions of responsibility in the industry, Clint served two terms as Chairman of the National Chicken Council.

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.

The Delaware Supreme Court has ruled that a Perdue Farms employee could not claim that COVID contracted by an employee was a “compensable occupational disease”.

The claimant was unable to demonstrate that the viral infection was acquired within the plant while working.  The claim was initially rejected by the state Industrial Accident Board and was then affirmed on appeal by the Delaware Superior Court. The most recent ruling by the Delaware Supreme Court ended the sequence of litigation to the advantage of Perdue Farms.

This ruling establishes case law applicable in the event of future claims relating to COVID or some other infectious disease acquired by contact or inhalation in a plant or community.

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 recall of close to 6,000 tons of further-processed chicken, frozen meals, prepared foods and salads is now assuming larger proportions.  BrucePac products implicated in a series of Listeria recalls were incorporated into other products.  Secondary recalls are now underway at Walmart, Target, Kroger, Raley’s and Trader Joe’s.  Brands affected by the recall include Boston Market, Taylor Farms among others and diet-food suppliers Atkins and Jenny Craig.

Fortunately, no illnesses associated with consumption of potentially contaminated food items produced by BrucePac have been reported.  It is noted that the incubation period of listeriosis may extend to 70 days so cases may emerge. Usually only the most severe clinical infections involving the immunosuppressed, pregnant women and the elderly are diagnosed following severe clinical symptoms requiring medical examination frequently with hospitalization and laboratory studies.

Representatives of Singapore food importers and processors in recently visited the U.S. to become acquainted with our broiler industry. The promotional event was arranged by USAPEEC. Greg Tyler president and CEO provided an overview of the U.S. industry followed by a trade reception to facilitate contact between members of the delegation and U.S. producers and exporters.

During the visit, the delegation visited the Pilgrim’s Pride processing plant in Athens, GA, the USDA Southeast Poultry Research Laboratory, Maple Leaf Farms in Indiana to review duck production and the Willmar. MN. plant of Jennie-O Turkey Store.

Since the trade delegation from Singapore was the first to visit the U.S. in over two decades, the event provided an opportunity to establish commercial contacts and to acquaint potential buyers with the strength of the U.S. poultry industry and the diversity and quality of products.

Singapore with a population of 5.6 million is dependent on imported chicken but appears to be expanding the range of suppliers from Malaysia to include Brazil, Thailand the E.U. and now hopefully, the U.S.

McDonald's Corporation has filed a lawsuit against nine packers that supplied beef for menu items.  The plaintiff alleges that the suppliers illegally colluded to maintain high prices by manipulating levels of slaughter.  The company stated in its complaint that collusion commenced in 2015.  Defendants will include Cargill Inc., JBS SA, National Beef, and Tyson Foods as the main suppliers.

McDonald’s Corporation alleges violation of Section 1 of the Sherman Antitrust Act by holding prices at a higher level through collusion through sharing production and cost data at industry events and trade shows.

In addition to substantial direct and punitive damages, McDonald’s is also requesting an injunction to enjoin the suppliers from continuing with anticompetitive activities.

In retrospect this lawsuit that may lack merit depending on evidence appears to be a case of the dog biting the hand that feeds it!

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. 

Previously, CHICK-NEWS reported on the Chapter 11 petition filed by the company in the U.S. Bankruptcy Court for the District of Minnesota.  Pure Prairie Poultry claims assets of between $50 and $100 million but has liabilities between $100 and $500 million with numerous creditors.

The Court rejected the Chapter 11 bankruptcy petition since it was dependent on Sandton Capital providing debtor financing amounting to $15 million but with the lender, receiving secured status placing them above other creditors. Objections to the restructuring plan led to the rejection by the Court. Pure Prairie Poultry failed to find a buyer and has caeased operation under Chapter 8.

The U.S. Department of Agriculture is a creditor based on $37.6 million provided through a guaranteed-loan program. Due to financial restraints, Pure Prairie Poultry was unable to pay for feed for flocks held for 14 growers in Iowa.  Accordingly, the Iowa Department of Agriculture and Land Stewardship exercised emergency authority to acquire 1.3 million broiler chickens that required feed.  This action was taken under Iowa Code Chapter 717 and was approved by a state court on October 2nd.  The Department of Agriculture is cooperating with farmers to maintain flocks to market weight at which time they will be sold, and taxpayer funds will be reimbursed with the state representing a debtors entitled to proceeds of any income from disposal of assets or sale of the enterprise with a plant in Charles City, IA. In actuality the last flocks were euthanized in late October.

In principle, Pure Prairie Poultry should not have found itself in a position to file for bankruptcy protection.  Other small-scale broiler producers supplying niche markets have survived and expanded.  It is evident that the Company was undercapitalized in relation to projected volume. Their product carried claims of “all natural,” raised under acceptable welfare standards without antibiotics and fed vegetable-based diets. This should have allowed the Company to establish an acceptable share of the high-value market. Other benefits included the initial support of the USDA and other lenders and the availability of contract growers.  Obviously, Management erred in execution, despite their collective ‘pedigree’ including Foster Farms, Tyson Foods, Petaluma Poultry, GNP Company and Zacky Farms.

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.

The United Food and Commercial Workers Union, Local 7, claims that JBS has contravened labor law when employing workers from Haiti and Benin.  They allege illegal practices including abusive treatment, human trafficking and excessive rent charges.

JBS counters the allegations that appear to revolve around a recruiter who is no longer used and was never an employee of the company.  JBS noted that the HR function of the plant has been strengthened and training programs for recruitment have been introduced, consistent with Company hiring policy.

JBS does not charge employees for transportation, pre-employment services or mandate residence.  The company noted, “We want all of our employees to have access to safe housing and the opportunity to create a better life for themselves and their families.”

A group of poultry growers is suing the founders of Cooks Venture that filed for Chapter 7 Bankruptcy in April.  Blake Evans and Matt Wadiak co-founded Cooks Venture after their involvement in Blue Apron a consistently unprofitable meal-kit company with a questionable future.

Cooks Venture, a somewhat hairbrained operation was chronically underfunded. The Company required a Regenerative Agriculture Poultry Production Agreement, the use of a slow-growing breed and an attempt to sell a non-competitively priced perishable product through the internet with direct shipment to customers. The plaintiffs maintain that the defendants misrepresented the viability of the company inducing them to invest in facilities and upgrades and initiate growing.  The plaintiffs alleged gross mismanagement including attempting unrealistic expansion beyond the availability of working capital.

Despite successive infusions of capital from venture investors including PIUS and Golden West Food Group amounting to close to $70 million, the company failed closing facilities in both Oklahoma and Arkansas in November 2023. Why do bright, newly-minted MBAs believe their own spread sheets and assumptions inspired by fast-talking entrepreneurs to funnel investors’ cash into questionable enterprises? Are they bamboozled by aspirations of sustainability and claims of flock welfare and Heritage breeds? Whatever happened to the traditional banking criteria of character, capacity and collateral?

The August 2024 guidelines for labeling are intended to ensure transparency and to eliminate false claims that may mislead consumers.

The guidelines require substantiation of claims in relation to the following areas: -

•  Animal welfare including statements relating to ethical and humane procedures.
• Environmental claims including ‘sustainability’ and ‘carbon neutral’.
• Management claims including ‘free-range’ and ‘pasture-raised’.
• Breed claims including for specific beef strains associated with perceived quality attributes including  ‘Angus’ and ‘Wagyu’
• Antibiotic use claims such as ‘raised without antibiotics’ should be subject to verification including assay.

The FSIS has been made aware of extensive use of green washing claims including unsubstantiated statements relating to sustainability and the application of regenerative grazing.

Producers making label claims must now present supporting evidence including third-party certification and appropriate documentation.

Senators Bernie Sanders (I-VT), Peter Welch (D-VT) and Cory Booker (D-NJ) have introduced the Livestock Owned by Communities to Advance Local Foods Act (LOCAL).  The proposed legislation would amend the Federal Meat Inspection Act of 1906 to support independent and small-scale meat processing under the “personal-use exemption”.  The Bill would allow consumers to purchase animals on the hoof for subsequent slaughtered and processing in other than a USDA-inspected abattoir.

The Federal Meat Inspection Act has stood the test of time and protects consumers. A continual process of eroding the supervision and inspection of meat products by the designated federal agency will not materially provide competition for major meat packers.  Unfortunately, it will expose consumers to potential foodborne disease.  Promotion of “food freedom” issues by extremists at both the left and right of the political spectrum is exemplified in the raw milk movement. Expanding availability of raw milk has considerable potential to disseminate a wide range of pathogens. This is confirmed by the incident rates of salmonellosis, campylobacteriosis, listeriosis and STEC infection, attributed to non-pasteurized milk.

Greg Tyler, President and CEO of USAPEEC, has announced promotion of two long-standing managers of the Council. 

Leah Mulcahy has been promoted to Vice-president of Global Marketing.  She joined USAPEEC in 2012 as a Deputy Director of Communications from the USDA Foreign Agricultural Service.  Leah earned a Bachelor's degree in international affairs from Kennesaw State University and an MBA in international business from American Intercontinental University.

Garrett Borkhuis was promoted to Vice-president of Trade Policy and Technical Services.  He joined USAPEEC in 2017 as Marketing Manager for Asia advancing to Director of Trade and Technical Services in 2020.  He has demonstrated skill in negotiating trade concerns.  Garrett earned a bachelor's degree in Agribusiness from the University of Georgia.

Aftermath of Hurricane Helene

According to the North Carolina Poultry Association (NCPA) the broiler industry in the severely impacted western counties emerged with limited structural damage or flooding of houses and facilities.  Disruption was intense with widespread failure of grid power and in some cases the availability of municipal water. Almost all farms and hatcheries are operating on emergency generators while repairs are in progress, with 500,000 customers without electric service. Roads and bridges have been damaged and 1,600 NCDOT workers are effecting temporary repairs. Many plant shifts were cancelled but according to Bob Ford of the NCPA, production should be restored by mid-week.

According to Bloomberg, the increase in cost of beef is driving the price of burger menus to unacceptable levels.  Technomic a market research organization recently tracked the escalation in cost of a Big Mac™ and other burgers.  The McDonald’s offering has increased 21 percent since 2019, compared to conventional fast-food burgers up 16 percent. The high cost of beef is attributed to drought that has reduced herds in addition to escalation in inputs including high interest rates, labor and feed.

As a response, chicken is now the centerpiece of sandwiches, offering taste, nutrition and the perception of healthfulness appreciated by consumers.  Margins for QSRs are improved by offering chicken and in some chains, based on chicken servings, consistent growth through customer satisfaction as a key to profitability and expansion.

With the reality of climate change, beef will become progressively more expensive and less competitive against chicken that offers versatility in presentation in addition to profitability.

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

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

The Environmental Working Group (EWG) an activist organization that advocates for climate issues and opposes intensive livestock production has filed suit against Tyson Foods Inc.,  alleging contravention of the District of Columbia Consumer Protection Procedures Act. The case, if it proceeds, will be heard before the D.C. Superior Court

The EWG claims that Tyson Foods has issued misleading statements relating to their intentions to reduce greenhouse gas emissions.  Tyson Foods accounts for twenty percent of beef, chicken and pork production in the U.S. Previously the Company announced plans to reduce emissions by thirty percent by 2030 and to achieve net-zero emissions by 2050.  Tyson Foods intends to achieve these goals by using renewable energy, by expanding grazing for beef cattle and eliminating deforestation in supply chains.

The EWG allege that Tyson Foods claims represent “greenwashing” and that the company spends less than 0.1 percent of annual revenue on reducing greenhouse gas production.

World trade has been affected by the ongoing restrictions placed on passage through the Panama Canal due to low water level.  Administrators of the waterway imposed a Long-Term Slot Allocation Program effective October 1st.   During 2023, LPG crude oil and automobiles were reduced by delays in passage and increased transit times. 

The action by Houthi terrorists affecting passage of vessels in the Red Sea has resulted in vessels avoiding the Suez Canal and traveling around the Cape of Good Hope, adding both time and cost to shipments.

Following the recent controversy over the Department of Defense funding research and development of cell-cultured meat, grants were rescinded as a result of vigorous opposition by legislators representing beef-producing states.  The Better Meat Company that manufactures an ersatz meat product using Rhiza mycoprotein received a grant of $1.4 million. The Better Meat Company protein recently received approval under the “Generally regarded as safe” category for their fungal-derived protein.

Paul Shapiro is a shareholder in the Better Meat Company. He was previously affiliated with HSUS and was a supporter of Josh Tetrick who established a series of businesses to produce food products without using livestock or poultry.

A number of research organizations and start-ups also received Department of Defense grants including the Battelle Institute in Columbus, OH., Molecular Genetics, MA., Genomatica in San Diego, CA. among others.

This round of grants to alt meat producers and research organizations will most certainly elicit a negative response from beef-state members of Congress and some grants will in all probability be rescinded.

USDA Food Safety and Inspection Service has indicated that it will routinely sample slaughtered dairy cows for the presence of H5N1 virus as a component of the National Residue Program.

Application of PCR will eliminate holding times. Carcasses that test positive will be diverted from the chain of meat supply. 

A preliminary survey conducted in May on ground beef derived from culled dairy cows failed to reveal the presence of virus.  It is apparent the FSIS program will concentrate on culled dairy cattle.  As yet there have been no reports of sampling programs on beef from feed lots representing the bulk of supply.

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.

In a release dated September 4th Hormel Foods (HRL) reported on Q3 FY 2024 ending July 28th, disappointing on the top line and lowering guidance substantially for FY 2024.  For the quarter the company earned a reported (GAAP) $176.7 million on revenue of $2,898 million with a diluted EPS of $0.32.  Comparable values for Q3 FY 2023 ending July 30th were net income of $162.6 million on revenue of $2,963 million with a diluted EPS of $0.30.

Compared to Q3 of FY 2023 sales declined by 2.2 percent, gross margin was unchanged at 16.8 percent; operating margin was up from 7.3 percent to 8.2 percent. Profit margin increased from 5.5 percent to 6.1 percent for the most recent quarter.

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 for Fiscal 2023 and thereafter 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 at retail and Jennie-O products in food service. There was no reference to the risk of HPAI that impacted turkey flocks in Minnesota but consistent with the negligible incidence over the 3rd quarter. In previous analysts’ calls CEO Jim Snee has expressed ongoing concern over losses during November and December 2023 and more recently for 2024.

Segment performance in both sales and operating profit for the most recent quarter was compared with Q3 FY 2023:-

• Retail Segment volume -9.0%:  sales -7.0%: segment profit -15.0% at $127.9 million.
• Food Service Segment volume  +2.0%: sales +7.0%: segment profit -3.0% at $142.5 million.
• International Segment volume -13.0%: sales -2.0%: segment profit +78.0% at 21.7 million.

For FY 2024 the company projected net sales of $11,800 to $12,100 million and a downgraded full year diluted net earnings per share in the range of of $1.45 (was $1.55) to $1.51 (was $1.65).  

Hormel Foods posted total assets of $13,114 million on July 28th 2024 of which $6,668 million comprised goodwill and intangibles. Long-term debt was $3,069 million against an intraday market capitalization of $17,420 million on September 23rd. HRL has traded over the past 52 weeks in a range of $28.51 (an 8-year low) to $39.25 with a 50-day moving average of $32.01.  HRL trades with a forward P/E of 18.7. HRL closed at $33.14 on September 3rd pre-release. The share price closed down 6.3 to $31.02 on September 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.

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

In a concerted program of damage control, Boar’s Head will appoint a new Chief Food Safety and Quality Assurance Officer reporting directly to the company president.  The company will also establish the Boar’s Head Food Safety Council.  Members will include Dr. David Acheson, previously an Associate Commissioner of the U.S. Food and Drug Administration responsible for Food Safety and Applied Nutrition; Dr. Mindy Brashears, formerly USDA Undersecretary for Food Safety and Dr. Martin Widman a professor of food safety at Cornell University.  Frank Yiannas formerly Deputy Commissioner for Food Policy at the FDA will round out the Council.

In a statement announcing the appointments the Company stated, “We remain steadfast in our commitment to our customers and to the safety and quality of our products.”  The company intends to introduce improved standards and to learn from the Listeria outbreak. The Jarratt, VA facility responsible for the outbreak will be closed indefinitely and may even be demolished.

The action taken by Boar’s Head is perhaps too little and too late to save the image of the brand and possibly ownership of the company.  Boar’s Head will face extensive litigation with the possibility of both direct and punitive damages as a result of the extensive outbreak with nine fatalities.

The company stated in response to severe criticism in mainstream and social media, “It’s a dark moment in our company’s history but we intend to use this as an opportunity to enhance food safety programs not just for our company but for the entire industry.”

In a strange and questionable statement, the company noted that it had “identified the root cause of the contamination as the specific production process that only existed at the Jarratt facility and was used only for liverwurst.”  This is fallacious. Listeria is widely distributed in plants that have been neglected and especially those with a history of deviations from accepted hygiene and production processes extending back for many years.  The Jarratt plant accumulated a record of insect infestation, structural defects, mold growth, rusty equipment and meat fragments on floors, walls and work surfaces. This represents more than a liverwurst problem. 

The appointment of the Boar’s Head Food Safety Council is commendable but an after-the-effect reaction.  It remains to be seen whether the guidance and suggestions of the eminent scientists and practitioners selected will make any impact on management. Despite recent contrition, where were the C-suite denizens they when they abrogated their responsibilities to incompetent managers who ignored the safety of consumers. It remains to be seen whether the Food Safety Council is an exercise in window dressing or is a last ditch effort to rehabilitate the brand and continuation of the company under current ownership. 

On reflection and in the light of more recent revellations including closure of the Jarratt plant it is doubtful whether any panel will achieve anything practical and there may be a downside to involvement,irrespective on how much Boar's Head pays, since it offers the prospect of erosion of reputation through association.

Gilberto Tomazoni recently pushed back on environmental regulations at an international business forum.  He expressed concern that pressure to conform to sustainability rules will increase costs of production that are passed down to consumers.

Tomazoni noted, “ We need to increase productivity to lower the cost of food and make it more accessible.”  He added, “We cannot assume that consumers will pay the bill for sustainable production practices.”

JBS is facing criminal lawsuits in Brazil alleging that the company knowingly processed cattle raised on deforested Amazon rainforest in Rondonia State.  The Company is the target of multinational criticism for contributing to deforestation and environmental contamination. In response JBS has mounted a sustained campaign to convince regulators and consumers of a corporate commitment to sustainability.

A lawsuit filed in 2022 resulted in the award of class-action status to Union employees of major meat packers. Workers alleged that their employers shared wage rates and manipulated compensation at 140 packing plants.

In the latest round of settlements, Cargill will pay $30 million, National Beef Packers, $14 million and Hormel Foods, $13 million.  Previously Tyson Foods settled for $72 million and JBS, $55 million.  Total settlements to date amount to $200 million.

In company statements, the defendants all denied wrongdoing and generally conceded that settlements were negotiated to avoid extended litigation costs and distractions.

Judge Gregory Frizzell for the U.S. District Court for Northern Oklahoma ruled for the State on January 23rd concerning pollution of the Illinois River watershed by poultry litter.  Defendants in the case included Tyson Foods, Cargill, Culp-Vantress, Aviagen, Cal-Maine Foods, Simmons Foods and George’s among others.  Mediation that concluded in November 2023 failed to produce a settlement.  Accordingly, Judge Frizzell is now intending to impose penalties.

Secretary of Agriculture, Blayne Arthur, petitioned the court for leniency noting, “Respectfully, judicial adjustment of standards and requirements applicable to the poultry industry may circumvent the law making process which is best left to elected legislators and officials in the Executive Branch.”  Secretary Arthur is concerned that an adverse ruling and penalties would result in “unintended consequences”. 

Based on the submission of the petition Judge Frizzell has provided an opportunity for the parties to submit any new evidence relating to the responsibility of poultry producers for damage to the ecosystem.

Since the case that was filed in 2003 is of importance to both poultry producers and farmers using litter as a fertilizer and soil amendment, new standards for disposal and use of litter are required. Recent court rulings have emphasized the deleterious impact on local communities from inappropriate disposal of waste. In contrast decades of stewardship by chicken producers on the Delmarva Peninsula have improved the quality of water in the Chesapeake Bay.

According to USDA-FAS GAIN Report KS2024-19 released on September 12th, domestic broiler production in Korea will increase by one percent to 945,000 metric tons in 2025. This projection  is based on the volume of breeding stock placed. Imports will rise by 2.5 percent over 2024 to 200,000 metric tons.  Exports of 65,000 metric tons are nominal representing 5.6 percent of total supply.  Given a population of 56 million per capita consumption will attain 19.3 kg (42.4 lbs.) in 2025. 

Highly pathogenic avian influenza is currently under control after 3.6 million chickens were depopulated on 32 farms during the 2023-2024 outbreak.  Of this quantity, 201,000 broiler parent flocks were lost on two farms. Depletion in the broiler segment of the poultry industry was limited to 80,000 commercial growing birds.  Egg- producing flocks on fifteen farms represented 88 percent of birds depopulated.

Consumption of broiler meat in South Korea is moving towards small packs of portions, meal kits and convenience items given the preponderance of single and two working-member households.

Imports by country of origin in 2023 confirmed the dominance of Brazil at 72 percent of volume, with Thailand the second largest supplier.  The U.S. held one percent of the market in 2023 mainly due to cost and product considerations but was limited by unresolved trade policy.

Dr. Owen Willems has been appointed as Global Director, Research and Development for Hendrix Genetics.  In his new role, he will be responsible for all species within the Hendrix Genetrics portfolio.  Willems is a 12-year veteran with Hendrix joining after completing his doctoral studies at the University of Guelph, Ontario.

Dr. Willems has gained considerable experience both in North America and Europe applying creative and innovative solutions for the benefit of the industry. In his new position, Dr. Willems will be located at Hendrix-Genetics Global Headquarters in the Netherlands.

Blair McCorriston has been promoted to Director, Sales and Commercial Excellence, replacing Dr. Owen Willems. In her new position, Ms. McCorriston will report to Trevor Aitchison, General Manager, Americas.  Blair will become a member of the National Turkey Federation Executive Committee replacing Dr. Willems. She has served in various positions at Hybrid Turkeys over 12 years and has gained experience with Internal Operations, R&D, Sales, Technical and Marketing teams.

Her appointment supports a strengthened connection among sales, product management, technical service and marketing.  In commenting on the promotion, Trevor Aitchison, General Manager, noted that Blair has “demonstrated her commitment to excellence in the turkey industry and her leadership will support the Company dedication to delivering high-quality products and services”.

Heralded as a “new start” and an opportunity for growers, Pure Prairie Poultry that acquired and refurbished a plant in Charles City, IA. filed for Chapter 11 bankruptcy on September 20th.

The plant has a checkered history.  Originally established as a hen-processing facility it operated as Cedar River but the enterprise failed. The plant was resuscitated as Simply Essentials in 2016 backed by venture capital funding although this iteration failed and the plant fell into disuse.  Pure Prairie purchased the facility in December 2021 but failed to achieve profitability having accumulated close to $40,000 in operating losses since production commenced in November 2022.

The company qualified for and received a $39 million federal loan in April 2022 that in retrospect was essentially pouring public money into the effluent stream. But then USDA is intent on restructuring the protein supply system in the U.S.  In their filing, Pure Prairie listed $100 million in assets and up to a nominal $500 million in liabilities.

It will be some time before court documents are available to indicate the causes of the demise of the company. From promotional press reports at the initiation of production, the Company should have been able to establish a market niche and prosper for the benefit of stakeholders, ultimately repaying the federal loan and other investors.

USPOULTRY in conjunction with the National Chicken Council, the Turkey Federation and United Egg Producers will present the 2024 Live Production, Welfare and Biosecurity seminar October 3-4 at the Embassy Suites by Hilton, Downtown in Nashville, TN.

This event is usually well attended based on the topicality of the program and the quality of speakers representing academia and industry.

The Professional Animal Auditors Certification Organization will assign CE credit hours for attendance.

For additional information and registration contact USPOULTRY at <info@uspoultry.org>

Representatives Steve Womack (R-AR) and Jim Costa (D-CA) have requested a 180-day extension to the contentious rule proposed by USDA entitled Salmonella Framework for Raw Poultry Products.

The request is based on “the complexity and length of the proposed rule and the fact that nearly all chicken marketed in the United States will be impacted”.  The letter noted that the rule raises questions of clarity requiring explanations to present a comprehensive response.

Gary Kushner, interim president of the NCC stated, “The industry attempt to engage with FSIS for the past two years during the formulation of this proposed rule and unfortunately our input was largely disregarded”. He added, “NCC and our member companies have invested hundreds of millions of dollars and have worked for decades to develop and refine best practices to reduce Salmonella and protect public health.”

Despite two webinars presented by USDA the industry was not provided with clarity concerning technical and practical issues relating to implementation.

The letter noted that if the Rule if implemented it would result in condemnation of a considerable proportion of chicken output with prepared product sent to landfills at a time when over 40 million Americans are food insecure.

The NCC position is that the proposed rule is unnecessary, will raise cost to producers and consumers alike and will lead to food waste without necessarily reducing the incidence of chicken-borne salmonellosis.

Long-running litigation between Impossible Foods and Motif FoodWorks over inclusion of heme protein in plant-based meat substitutes has been resolved.  Impossible Foods includes soy leghemoglobin produced by a genetically engineered strain of yeast to simulate the color of their product.  Motif uses a yeast-derived version of myoglobin in their product apparently representing an infringement of patents held by Impossible Foods.

Under the agreement, Impossible Foods will assume the heme-related activities conducted by Motif FoodWorks and the case will be dismissed with each party responsible for their respective legal fees and expenses.

The settlement agreement recognizes that the parties will continue advancing plant-based meat alternatives through innovation, collaboration and fair competition.

The U.S. Patent Appeal Board recently invalidated one patent awarded to Impossible Foods but sustained six other patents that were pivotal to litigation.

The annual Poultry Health Day will take place on November 15, 2024, as an in-person event at the Rollins Laboratory of the Department of Agriculture and Consumer Affairs.

Registration is free and the event is sponsored by Zoetis.  The program will include a review of HPAI in domestic animals, avian metapneumovirus, Enterococcus infection in broilers and Marek’s vaccination.  For additional details contact Rocio Crespo at rcrespo@ncsu.edu

The U.S. Food and Drug Administration has granted Generally Recognized as Safe (GRAS) status to Innodal Inc. to market Inneo® in the U.S.  The product has been available in Canada for five years and has proven successful in suppressing Listeria contamination.  The product incorporates bacterial peptides as the active ingredients.

Since the product is GRAS certified, no specific label changes are required for existing products manufactured with Inneo®.

Given the significant of listeriosis and the recent upsurge in incident cases from a variety of products including processed meat, cantaloupes and dairy products resulting in numerous and extensive recalls. Food manufacturers may benefit from using Inneo® as an adjunct to existing programs to decontaminate plant and equipment.

According to USDA FAS GAIN Report TC2024-07 released on September 4th, production in the United Arab Emirates will increase by 16.7 percent from 2024 to attain 70,000 metric tons.  The Nation is dependent on imports with 400,000 tons representing 85.1 percent of consumption. Domestic consumption will increase by 5.6 percent in 2025 attaining 50 kg per capita (110 lbs.) assuming a population of 9.4 million comprising Emiratis and expatriates and including foreign manual workers in construction. Domestic broiler production is supported by government feed subsidies and other concessions.

The UAE market is dominated by Brazil exporting set-weight whole frozen chicken from 900 g to 1,200 g in addition to portions and further-processed items.  Brazil operates plants capable of satisfying UAE Halal and labeling requirements for a wide range of products in demand.

During the first half of 2024 UAE was ranked 9th in volume among importers from the U.S. with 51,973 metric tons valued at $56.7 million.  Compared to the first half of 2023, volume and value were higher by 59 percent and 83 percent respectively.  Over the first half of 2024, UAE represented 3.2 percent of export volume and 2.5 percent of value.  Over the six-month period average unit value was $1,091 per metric ton, below the average for the period that attained $1,366 per metric ton.  U.S. leg quarters exported to the UAE are mainly consumed by foreign contract laborers.

According to USDA-FAS GAIN Report MX2024-40 released on September 4th, Mexico will post a 2.5 percent increase in domestic production to 4.09 million metric tons in 2025.  This volume will be supplemented by 970,000 metric tons of imported RTC chicken, a one percent increase over the previous year.  Total exports are inconsequential amounting to 5,000 metric tons.  Domestic consumption, assuming a population of 128 million will attain 39.5 kg per capita (86.8 lbs.).

The current disease situation in Mexico contributes to acceptable livability and growth rate. In recent years regional outbreaks of HPAI have occurred but these were suppressed by application of vaccination.  Biosecurity is constantly improved with a trend towards separation of breeders and grow-out operations.  Approximately 85 percent of poultry, predominately chickens are processed in federally inspected establishments with 121 in operation.  Expansion in 2025 is driven by lower feed prices, improvements in the economy resulting in increased demand and a higher level of integration.

For the first half of 2024, Mexico received 358,912 metric tons of chicken products from the U.S. valued a $455 million representing stability in volume but with a 14 percent increase in total value attributable to a unit price of $1,265 per metric ton compared to $1,110 for the corresponding first half of 2023. During the first six months of 2024, Mexico represented 21.8 percent of U.S. export volume and 20.3 percent of export value for chicken.

According to a USDA-FAS-GAIN Report dated September 6th, broiler production in Angola will remain fairly static at 52,000 metric tons in 2025, up four percent from the preceding year.  Most of the domestic production is derived from small rural units, and a limited number of commercial operations.  The major restraint to domestic production is the cost of ingredients with an unjustified restriction that all imports should be from non-GM cultivars. 

Imports of chicken will be unchanged for 2025 at 190,000 metric tons representing 78.5 percent of domestic consumption.  Assuming a population of 36 million, per capita consumption will be 6.7 kg (14.8 lbs.) in 2025.  It is recognized that due to the wide disparity in income between high and low earnings demographic, consumption in urban areas will be higher than the national average.

For the first half of 2024, Angola was ranked 10th among importers from the U.S. with 50,395 metric tons representing approximately half of the volume imported by Angola with the remainder supplied by Brazil.  For the first half of 2024 Angola represented 3.1 percent of volume and 2.4 percent of U.S. export value at an average unit price of $1,078 per metric ton.

A USDA-FAS-GAIN Report released on September 4th, predicts a 3.5 percent increase in broiler production to 1.645 million metric tons in 2025.  This quantity will be supplemented by importation of 300,000 metric tons, down 6.3 percent from 2024. Approximately half of imports will in the form of mechanically deboned meat, principally supplied by Brazil.  Exports are nominal at 70,000 metric tons mainly to neighboring nations. Assuming a population of 60 million, per capita consumption is 31.3 kg (69 lbs.) although due to the disparity in income consumption is substantially higher than the national average in urban areas and among higher income demographics.

During 2023 the broiler industry was impacted by HPAI with a number of breeder farms affected.  Hatching eggs were imported from Brazil and Turkey with production of day-old chicks now restored.

The broiler industry in South Africa is challenged by high feed prices, power brown-outs and high labor costs and inefficiency. The U.S. and Brazil are able to land chicken into South Africa at prices lower than the cost of domestic production. Accordingly the industry is protected by antidumping duties, tariffs and contrived restrictions based on HPAI.  During the first half of 2024 Brazil supplied 81 percent of imports of chicken meat mainly in the form of MDM, Argentine, eight percent and the European Union and the U.S. five percent each.  Over the first half of 2024 the U.S. contribution to imports declined by 63 percent compared to the corresponding half of 2023. In 2023 South Africa was ranked 18th among importing nations  from the U.S. with 44,324 metric tons shipped valued at $42.4 million with a low average unit price of $957 per metric ton.

Over the past decade, the state of Rondonia in Brazil has experienced extensive illegal deforestation in sections of the Amazon Rainforest to allow raising of cattle.

According to the Associated Press, a state judge in Rondonia has fined two packing plant and three ranchers $750,000 as a result of illegal deforestation to raise cattle. Funds from the collective penalty will be used in part to remediate degraded areas by replanting trees.

Cases against additional packing plants including one owned and operated by JBS SA have yet to be heard. Environmental issues faced by JBS are now being used to oppose the proposed listing of the Company on the NYSE.

Apart from ethical and business concerns, opponents of the JBS listing, including Senator Cory Booker (D-NJ), have cited failure to comply with international and Brazilian requirements regarding deforestation.

According to USDA-FAS-GAIN Report TH2024-54 released on September 4th, Thailand will  increase production of broiler meat by 2.6 percent to 3.58 million metric tons. Of this volume 33.2 percent will be exported, up 3.5 percent from 2024 and amounting to 1.19 million metric tons. Exports are mainly destined for Japan and the E.U.

Domestic consumption, assuming a population of 72 million plus a vibrant tourist industry that has recovered since the COVID years will attain 33.1 kg (72.8 lbs.) per capita.

Producers in Thailand have benefited from declining feed costs. Available labor at relatively low rates is especially beneficial for manual further-processing for specialty markets.

Production in Thailand is challenged by periodic resurgence of HPAI. The industry has now recovered from severe losses in 2023.  

The broiler industry in Turkiye continues to expand with an eight percent projected increase in domestic production to 2.6 million metric tons.  According to a USDA-FAS-GAIN Report TU2024-41 released on September 4th, exports will increase by 14.4 percent in 2025 over 2024 to 374,000 metric tons. This quantity was down from 445,000 metric tons in 2023.  Domestic consumption will increase to 2.23 million metric tons, an eight percent increase over 2024 representing a per capita consumption of 26.2 kg (56.7 lbs.) assuming a population of 85 million.

Turkiye has encountered competition from Ukraine and Russia in their traditional Eurasian markets.

During the week of September 30th, a delegation of importers from Singapore was hosted by USAPEEC in a program intended to demonstrate U.S. broiler production practices with an emphasis on biosecurity and prevention of disease.  Visits were made to production facilities and slaughter plants in Georgia, Indiana and Minnesota.

USAPEEC  also arranged a trade reception to link prospective importers with U.S. producers.

Hosting trade missions is an important activity conducted by USAPEEC and contributes to establishing confidence in U.S. production practices, certification, food safety and quality.

Singapore with a population of 5.6 million imported approximately 220,000 metric tons of chicken in 2022 representing 86 lbs. per capita. Singapore is not currently among the top 15 importers from the U.S. with product valued at $26 million consigned in 2022 representing eight percent of imports. Singapore sources chicken from Brazil (48%), neighboring Malaysia (34%) and the remainder fro various nations in Asia including Thailand. Although Singapore represents a potential market supplies must be certified Halal and predominantly small whole chicken and portions. Feet would be in demand by ethnic Chinese representing 75 percent of the population.

According to USDA-FAS GAIN Report JA2024-43 released on September 4th, broiler production in Japan will increase by 1.7 percent in 2025 from the previous year to 1.75 million metric tons. Domestic consumption should increase by 0.7 percent to 2.85 million metric tons in 2025. 

Concurrently, imports will decline by 0.5 percent to 1.1 million metric tons representing 37 percent of total availability.  Major suppliers to Japan in 2022 comprised Brazil ($950 million); Thailand ($440 million); U.S. ($25 million) and the E.U. ($12 million). Imports from joint-venture operations in mainland China comprise specialty products requiring a high level of manual handling and preparation.

Demand during the first half of 2024 was driven by increased tourism, and high prices for imported beef and pork as a result of the progressive depreciation of the yen.  Feed prices are disproportionately high compared to other major world producers due to a reliance on imported ingredients, despite feed stabilization subsidies.  Japan has enhanced biosecurity following successive annual losses to HPAI, mainly affecting the egg-production sector.

The Nebraska Department of Agriculture has been directed by Governor Jim Pillen to develop rules restricting cell-cultured meat.  It is intended that cell-cultured meat should be clearly labeled and separated at point of sale from natural meat derived from livestock.

In establishing the policy, Governor Jim Pillen, himself a Veterinarian and hog producer, stated at an event, “Nebraska farmers and ranchers like those here today are committed to producing the best food products anywhere.  We feed the world, and we save the planet more effectively and more efficiently than anybody else and I will defend those practices.”

A number of states with beef and pork production have introduced or are intending to pass legislation banning or restricting the manufacture or sale of cell-cultured meat including Florida and Alabama. The constitutionality of legislation directed against cell-cultured meat will be challenged in court following filings by Upside Foods and the Institute for Justice.

States with livestock production are pressing ahead with restrictions on sale and labeling despite the fact that none of the startups or established cell-cultured meat companies has been able to produce commercial quantities of product or will be likely to do so in the foreseeable future. This situation follows a decade of “almost there” optimism that has swallowed up almost $2 billion in venture capital worldwide. Restrictive legislation at this time is essentially political theatre to engender and solidify support from livestock producers. It may also be coupled with a twinge of Luddite opposition to innovative technology.

The USDA has published a projection of meat and chicken consumption for Mexico extending through 2033. It is estimated that broiler consumption will increase from 84 pounds to 96 pounds per capita over the coming ten years. Pork consumption will increase from 44 to 50 pounds per capita and beef consumption will increase from 35 pounds to 36 pounds. 

Domestic consumption increased in Mexico after implementation of the NAFTA agreement in January 1994.  Integrating the market among  Mexico, the U.S. and Canada allowed for quota-free trade in grains, oilseeds, livestock, animal products and other agricultural goods. Improvements in consumption and agricultural trade continued after NAFTA was replaced with the USMCA Agreement.  To support higher consumption, Mexico increased imports of corn and soybeans with a fourfold increased in soybeans and corn imports over the period 1993 through 2023.

It is estimated that Mexico will attain a 31 percent growth in chicken imports over the next ten years concurrent with a 22 percent increase in domestic production.

In 2023 1st-ranked Mexico imported 721,342 metric tons of broiler parts from the U.S. valued at $810 million and 150,510 metric tons of turkey valued at $425 million. For the first half of 2024 Mexico received from the U.S. 358,912 metric tons of broiler products valued at $454 million and 79,055 metric tons of turkey products valued at $225 million.

It is important that all parties to the USMCA adhere to the agreement that functions to the mutual benefit of the three nations.

Seventeen months ago, Perdue Farms submitted a petition to the USDA-FSIS requesting modified labeling regulations with respect to a “pasture-raised” chicken claim in accordance with the Poultry Products Inspection Act.

FSIS has updated guidelines to define “pasture-raised” as “Chickens spending the majority of their lives on pasture with rooted-in-soil vegetative cover”.  FSIS is encouraging producers to obtain third-party substantiation of any “pasture-raised” claim.

The Agency declined to codify specific definitions for “pasture-raised” and “free-range” in the form of a regulation based on the spurious concern of “stifling innovation”.

The definition of “pasture-raised” can now be applied but USDA stressed that the definition and claim are independent of regulations governing the National Organic Program.

In a continuation of services to the poultry industry, USPOULTRY is making available an applications guide to assist companies to develop statistical process control programs. This technology is a valuable aid in managing processing operations to optimize efficiency and quality.  The Guide will provide a framework to understand process control and to adapt general principles to implement a program for specific applications.

For additional information, contact Benjamin Starkey bstarkey@USPOULTRY.org.

George’s, Inc. has filed a civil lawsuit against Thomas Miller, previously employed as a Director of Corporate Engineering and two contractors.  The company alleges that Miller fraudulently processed documentation for work performed on his private property that was charged to the Company.  The lawsuit alleges civil conspiracy, fraud and breach of fiduciary duty.  The alleged fraud commenced in 2022 and was facilitated by assigning sole signing authorization to the Defendant.

Perdue Farms has filed a complaint against the Department of Labor and Craig Watts of Fairmont, NC.  Watts has engaged in a series of actions bordering on barratry in his private capacity, to deprecate the image of Perdue Farms and to question the integrity of marketing claims relating to “humanely raised”.

The Department of Labor previously rejected Watts’ claims relating to compensation since he was not an employee but was an independent contractor raising broilers for Perdue Farms Inc.

Perdue Farms, forced to defend a number of actions filed by Watts, is now seeking declaratory relief to restrain the Department of Labor from pursuing administrative proceedings.  Perdue claims actions by the Department of Labor are unconstitutional since it has deprived the company of the right to a jury trial.

Curt Calaway, serving as interim CFO, has been confirmed as the new Chief Financial Officer for Tyson Foods. In announcing the appointment, Donnie King, president and CEO stated, “Curt is a proven leader with deep industry knowledge and a wealth of experience in financial strategy and reporting.”  He has served as CFO for the Prepared Food Business segment and was involved in various mergers and acquisitions as Senior Vice President of Finance and Treasurer since 2021. 

Previous to joining Tyson Foods, Calaway occupied positions of responsibility with PriceWaterhouseCoopers LLP for over eleven years.

The interesting question is why Calaway was not appointed to the position of CFO and was passed over for John R. Tyson who is currently on health-related leave. Although John Tyson has attained technical and professional qualification, the questions of maturity, experience and management acumen should have predicated a less stellar advance in the Company.  Tyson Foods is a publicly quoted enterprise, and the initial appointment should have raised questions with a Board less subservient to a dynastic culture with overtones of nepotism. Given the circumstances shareholders deserved better.

State Rep. Chris Miller has filed House Bill 5872, designated the Illinois Cultivated Meat Act.  This intended legislation would ban production and sale of cultivated meat in Illinois. This initiative follows a similar law enacted in Florida and other under consideration in beef-producing states.

Rep. Miller stated, “We don’t need fake meat laboratories creating a highly expensive product that tries to replicate real meat.”  While these sentiments are well supported by his constituency and have technical and financial validity the question of outright bans appears to be an overreach.  At this time, no potential manufacturer has been able to produce cell-cultured meat in commercial quantities despite multi-millions of support from venture capital funds.

The most optimistic projections place the price of cultivated product far above animal-derived meat.  It is acknowledged that environmental claims for cultivated meat are overstated but there does not appear to be a problem of safety.  Notwithstanding the pros and cons of cultivated meat, the reality is that there is no immediate prospect of a product entering the market and that preemptive “feel good”, token bans are intended to placate constituents in farming communities rather than an attempt to serve producers, the food industry and consumers.

Chipotle is currently evaluating Honey Chicken in 80 restaurants in Nashville, TN. and Sacramento, CA.  Field trials followed successful taste tests using trained panels.  Chris Brandt, Chief Brand Officer for Chipotle stated, “Consumers have clearly shown their enthusiasm for sweet-heat combinations, and we believe Chipotle Honey Chicken will capture fans with a high level of excitement.”

As with many QSRs and casual dining restaurants chains, there is an evident transition to more chicken-based menu offerings.  Apart from the popularity of chicken, displacing beef enhances margins and allows greater flexibility in menu options compared to alternative proteins.

On May 8th, Central Valley Meat purchased the Cargill slaughter plant in Fresno that processes approximately 300,000 head of culled dairy cows annually. Central Valley operates their major facility in Hanford, CA.  As a component of the transaction, Cargill will continue to operate under lease a ground beef plant contiguous with their previous Fresno facility.

In accordance with the agreement between Central Valley Meat and Cargill, approximately 700 workers would remain employed with wages and benefits equal to or better than those provided by Cargill.

Amid concerns over possible cutbacks, California Attorney General Rob Bonta has intervened to ensure that the conditions of purchase are maintained for at least twelve months through the second quarter of 2025.

Bonta stated, “For dairy farmers the loss of the Fresno Cargill plant could have meant lower cattle prices and fewer options when selling their animals.”  He added, “The Central Valley has fed California and the U.S. for decades and today I am proud to have secured the continued operation of an important processing plant and protection of 700 jobs for at least a year.”

Intervention by the Office of the Attorney General was considered necessary to prevent losses by dairy farmers from depressed prices for their culled cows in the event of cutbacks or even closure of the plant.

USAPEEC in conjunction with the USDA-APHIS organized a hybrid in-person and video remote seminar in Mexico City dealing with control and prevention of HPAI. The program was in part sponsored by the Nebraska Soybean Board.

Speakers included representatives of SENASICA (counterpart of the U.S. APHIS), and USAPEEC Mexico, Dr. Fidelis Hegngi, USDA and Dr. John Clifford, USAPEEC Consultant.

USDA-APHIS promotes biosecurity as a preventive measure notwithstanding the fact that this modality however strictly enforced does not provide absolute protection against infection especially in the turkey and egg production segments of the U.S. industry.  APHIS stresses depopulation of flocks within 24 to 48 hours, a goal that has yet to be achieved in large egg production complexes.  Based on limited cases of mild H5N1v infection among workers depopulating farms in Weld County, CO. there is now greater emphasis on personal protection equipment (PPE) since recent poultry outbreaks have been attributed to the mammal-adapted B3-13 variant of avian H5N1.

It is hoped that Dr. Clifford through his extensive experience with avian influenza as the previous Chief Veterinary Officer for the USDA is actively promoting protective vaccination with monitoring and surveillance as an adjunct to biosecurity among existing and prospective importers of U.S. broiler, turkey and egg products.

According to USDA-FAS GAIN report UP2024-15 released on August 20th, Ukraine will produce 1.33 million metric tons of RTC broiler meat in 2025.  This is 0.8 percent above the volume in 2024.  Exports will attain 0.45 million metric tons representing 30 percent of production, emphasizing the disparity between output and domestic consumption.  Based on a population of 38 million, per capita, consumption is projected at 24kg (53.2 lb.).

Since most broiler production facilities are in central and western Ukraine, damage associated with the invasion of the nation by the Russian Federation has not been as severe as with the egg industry.  Support from the European Union in the form of reduced tariffs has maintained broiler production.

The industry is dominated by MHP with this integrator representing 70 percent of national output.  Four other producers Agrol, Agro Oven, Dniprovskiy and ULAR are responsible for the remainder. Despite ongoing hostilities and damage to warehouses and coldrooms, MHP has expanded and has achieved full utilization of facilities. 

Challenges facing the industry include population outflow with at least six million residents displaced westward to the E.U., disruption of the transport infrastructure, currency devaluation and conscription of employees.  Electricity supply is variable and may deteriorate in 2025 since Russia is intensifying missile and drone attacks on the power grid.  On the credit side feed ingredients are both available and inexpensive now representing 55 percent of live weight cost according to the GAIN report followed by day-old chicks at 20 percent.

Currently, broiler producers in the Ukraine function with an export limit of 133,283 metric tons per year for the E.U. representing 30 percent of shipments.  Other nations receiving broiler products from the Ukraine include the U.K., the Middle East and Eurasian regions in addition to  feet to Hong Kong and China.

On August 2nd and 9th, USAPEEC Mexico conducted online workshops to promote value-added products prepared with U.S. turkey meat. Approximately 150 hotel restaurant and institutional professionals participated in the workshops that featured turkey thigh fajitas. These are marketed under the Dos Familias brand, produced by Proboca a prominent further-processor of poultry, pork and beef for the market in Mexico. Programs were sponsored by the Indiana Soybean Alliance. 

During 2023, Mexico was the major importer of turkey product from the U.S. receiving 150,510 metric tons valued at $425 million representing 68 percent of volume and 66 percent of value, respectively, with a unit price of $2,740 per ton.

Over the first half of 2024, Mexico imported 79,055 metric tons of turkey meat valued at $225 million representing a 27 percent increase in volume and 12 percent in value compared to the corresponding first half of 2023.

California Proposition #12 banned the sale of pork derived from sows held in gestation crates effective 2024. This 2018 legislation and the CADFA regulations has had minimal effect on price and consumption in California.  Despite the dire predictions of unavailability and high prices as a result of implementation, prices of pork products including bacon are only slightly higher than in the rest of the U.S. 

The small but real increases in the prices of bacon, ribs and loin cuts were predicted to depress consumption.  Prior to introduction of Proposition #12, California accounted for 9 to 12 percent of pork consumption consistent with a population of 40 million in the state.  Current pork consumption has fallen to approximately 8 percent of national demand suggesting a 20 percent reduction in pork eaten, favoring chicken and possibly turkey.

Economists at the University of California at Davis calculated that at the time of implementing Proposition #12 that there was an adequate supply of product from sows held under group housing and that no incremental investment was necessary to comply with Proposition #12.

As experienced with eggs, ballot initiatives intended to improve flock and herd welfare have financial implications for consumers, a reality that is generally underplayed by proponents who emphasize the appeal to emotion and conveniently omit the quantifiable implications of passage of ballot initiatives dealing with welfare.

Hormel Foods, Rochelle Foods and Quality Pork Processors have agreed to a settlement of $13 million over wage claims.  This action follows the capitulation of Tyson Foods and JBS USA, respectively paying $72 million and $55 million as settlement to a class of workers claiming underpayment of wages.  The allegations arose from disclosures that the defendant companies apparently colluded in setting wage rates based on claimed in-person meetings and indirectly through participation in the AgriStats benchmark costing system.  All companies that have settled deny wrongdoing. Hormel Foods, in a statement, noted that the settlement was negotiated “to avoid the uncertainty, risk, expense and distraction of continued litigation”.

Lawsuits alleging collusion to establish wage rates for plant workers or in separate cases, compensation paid to contractors appear to have as a common basis subscription to AgriStats.  Irrespective of the benefits from comparing costs and efficiency factors, it would appear that the service has emerged as a very expensive component of management of livestock operations confirming the Law of Unintended Consequences.

According to USDA-FAS GAIN Report CH2024-108, released on August 19th, The People’s Republic of China (China) will increase 2025 chicken production by two percent to 15.3 million metric tons. During 2025 imports are projected to fall by 33 percent to 0.3 million metric tons.  Since China will export 0.67 million metric tons in 2005 the nation will be a net exporter with major destinations comprising Japan, from joint venture operations and to the Autonomous Region of Hong Kong, each to receive approximately 80,000 metric tons.  China exported quantities of processed chicken to 11 Asian and E.U. Nations ranging from 5,000 to 10,000 metric tons over the first half of 2024.  During the first half of 2023, Russia emerged as a recipient nation with 30,000 metric tons. 

For the first half of 2024 China received 72 percent of imports from Brazil with 10 percent from the U.S.  The other major supplier was Thailand with 11 percent of imports.  There was a temporary pause in exports of chicken products from Brazil in July due to an alleged outbreak of Newcastle disease although exports have since resumed.  In contrast the U.S. is subject to prolonged and extensive embargos as a result of HPAI in other than broiler operations.  China selectively ignores World Organization of Animal Health guidelines regarding zoning or resumption of imports after expiry of the statutory 28-day period following completion of decontamination.  China continues to impose unjust HPAI restrictions on exporters despite the reality that a variety of H5 and H7 strains of avian influenza are endemic, and the nation deploys vaccines of various types against avian influenza.  Currently restrictions are imposed on Argentina, Turkey and Chile that previously accounted for eight percent of the share of the import market despite completion of the statutory post-decontamination period.

Domestic consumption in China will amount to 14.93 million metric tons during 2025.  Accepting a population of 1.43 billion, per capita consumption will be 10.4 kg (23 lbs.). Demand is divided among conventional white-strain broilers and either traditional yellow birds or hybrids between yellow and white-feathered stock. Although yellow-feathered birds and hybrids are still popular among the older demographic and for restaurants, broiler meat from white feathered birds are consumed in QSRs based on price, value and convenience.

Currently the national average retail price for pork, the major animal protein is $1.86/lb. compared to chicken at $1.50/lb.  During the second quarter of 2024, the price of pork has increased reflecting lower availability, making chicken more affordable.

Following a Government policy decision approximately ten years ago, China has embarked on a program of producing domestic broiler breeding stock and is moving toward self-sufficiency, sacrificing a potential gain in production parameters including feed conversion and growth rate for advantages relating to security, conserving foreign exchange and national pride (or alternatively xenophobia).  Ultimately based on international consultants, domestic knowledge of genetics and associated breeding technology and existing volume of production, China will soon be in a competitive position to export broiler-breeding stock to “friendly” nations in Asia and Africa.

Under pressure over ethical and environmental issues, JBS SA released a comprehensive environmental and sustainability report. At issue is concerted opposition to a listing by the company on the New York Stock Exchange. Following the announcement of the intention to file for an IPO, bipartisan condemnation of past practices and actions by the Batista brothers emerged and is gaining in intensity.

The JBS report indicates investments of more than $150 million across all operations to reduce Scope 1 and 2 greenhouse gas emissions with a claimed reduction in intensity of emissions by 17 percent over the past five years. The major allegation relating to JBS is indirect or direct deforestation of the Amazon Rain Forest. This issue that is vigorously denied by JBS.

For Q2 FY 2024, JBS SA posted net earnings of $328 million on revenue of $19,284 million. Comparable figures for Q2 2023 were a net loss of $53 million on revenue of $18,052 million. 

Among the six operating segments, the proportion of total revenue and the adjusted EBITDA were:-

	Percent of revenue	EBITDA (US$ millions)
Seara	11.4	$387
JBS Brazil	15.2	$226
JBS Beef US	30.6	$16
JBS Australia	8.4	$202
JBS Pork US	11.0	$273
Pilgrim’s Pride	23.2	$656

Net export revenue amounted to $4,910 million from all operations.

Following settlements by Tyson Foods, Sanderson Farms, Koch Foods and Perdue Foods, for a collective amount of $70 million, Pilgrim’s Pride, the final holdout, agreed to pay $100 million to settle claims. As with other Defendants, Pilgrim’s Pride did not admit to wrongdoing.

The case filed in the U.S. District Court for the Eastern District of Oklahoma captioned Broiler Chicken Grower Antitrust Litigation alleged collusion among integrators to constrain grower payments through exchange of information and entering into “no poach” agreements.  It is striking that Pilgrim’s Pride agreed to a $100 million settlement compared to the quantum for four other Defendants ranging from $14 to $21 million.

The settlement will require the approval of U.S. District Judge, Robert Shelby.

Perdue Foods, LLC is recalling 83 tons of frozen, ready-to-eat chicken nuggets and tenders.  The recall was a result of potential contamination with metallic fragments.  Products were processed on March 23rd by the company plant in Perry, GA.

According to the Food Safety and Inspection Service, there have been no reports of injuries, but the extensive recall was issued as a precaution.

It is highly likely that a large proportion of the batch has been consumed given the date of processing but some product may be in storage in home freezers.

Susannah Frost has been promoted to the position of president of Chick-fil-A.  In her role, Ms. Frost will provide coordination with a focus on maintaining the growth of the company and sustaining market leadership as Chair the Executive Committee.  Andrew T. Cathy, CEO of Chick-fil-A, noted, “Having served as a CEO for three years, the timing is right to expand our leadership capabilities to include a president who will work closely with me and our Executive Committee to steward our domestic and global expansion.”

Ms. Frost joined Chick-fil-A in 2007 from Troutman Sanders, a real estate law firm. She earned a baccalaureate degree in mathematics from the University of Georgia and a law degree from Emory University.  She has completed executive programs at Columbia and Harvard Universities.

In accepting the position, Ms. Frost noted, “We have the opportunity to scale care with excellence across 3,000-plus restaurants and international markets.  I look forward to working alongside Andrew, our leaders, operators and staff to provide support for our customers in the communities we serve.”

Conagra Brands has announced acquisition of privately held Sweetwood Smoke, the manufacturer of FATTY™ brand of meat sticks.  Terms of the transaction were not disclosed but it is understood that Conagra will position the large meat sticks as a premium brand as they are almost seven times the size of market leader Slim Jim’s.

Swan Connolly CEO of Conagra Brands noted “The acquisition of FATTY Smoked Meat Sticks is another step in reshaping our portfolio for faster growth. Adding a premium brand to our growing, ‘better-for-you’ snack portfolio is consistent with our strategic focus on snacking and frozen categories.”

USDA-FSIS will initiate a structured sampling program following the demonstration of viable H5N1 strain B3.13 bovine-modified avian influenza virus in beef in May. At this time the virus was detected in one out of 109 samples from culled dairy cows, Currently, dairy farmers are submitting milk samples for assay in the event that lactating cows are to be moved interstate.  Colorado has introduced a mandatory, weekly testing of milk from all dairies within the state.

It is emphasized that monitoring and control of H5N1 virus in the dairy industry is fragmented with state departments of agriculture and health involved and cooperating in varying degrees with federal agencies including USDA-APHIS and the Centers for Disease Control and Prevention. 

Clearly, there is a need for a federal coordinator with authority to introduce programs of surveillance and to ensure that preventive programs are implemented for the benefit of producers, consumers and other stakeholders. The risk of infection of consumers remains exceptionally low especially with milk that is pasteurized and beef that should be thoroughly cooked. 

Following a decline in profitability, privately held Cargill Inc. is apparently to undergo structural changes.  Informed observers have noted that a high proportion of Cargill businesses failed to meet earnings goals during fiscal 2024.

The Company will consolidate operations into three units:

• Food to be led by Jon Nash

• Ag and Trading to be managed by Roger Watchorn

• The Specialized portfolio including Animal Nutrition and Health guided by David Webster

Concurrent with these changes in operations, a number of executives will retire including Julian Chase Head of Business Operations and Supply Chain.  The Company has also embarked on a program of reducing costs to increase return on capital.

Changes at Cargill parallel the consolidation of facilities and programs to reduce

Brian Niccol, previously CEO and Chairman of Chipotle Mexican Grill, (CMG) announced his resignation to become CEO of Starbucks.  Niccol, who joined Chipotle from the Taco Bell Division of YUM! brands was instrumental in expanding the company to over 3,500 restaurants, revamping menus, introducing drive-thru lanes and achieving exceptional financial results reflected in the share price of the company.  

Niccol will be succeeded at Chipotle by Scott Boatwright, Chief Operating Officer as the interim CEO. He is a seven-year veteran of the company and was a close collaborator with Niccol in implementing necessary changes to restore profitability and achieve expansion both in the U.S. and internationally.

In announcing his departure, Niccol stated, “I am incredibly proud of the work that has been accomplished since I joined Chipotle in 2018.”  He added, “The strategic priorities this team has put in place has positioned Chipotle to win today and enable future growth.  I depart knowing the business is in great shape and poised for growth with a strong, experienced leadership team.

Chris Schutte, who has served as the CEO of Astral Foods for 16 years has announced his retirement effective January 30th, 2025.  He will reach the mandatory retirement age and will accordingly step down although he will serve in a consulting position as the new CEO transitions to the role.

Schutte joined the predecessor of Astral Foods in 2002 as Retail Sales Manager for the Meadow Feeds Division, subsequently attaining the position of CEO of the holding company in 2009.

Astral Foods processes 5.5 million broilers each week and is the largest poultry producer in Africa.  The second largest broiler producer in South Africa is Rainbow Chicken, processing approximately 5 million broilers each week and recently the subject of an IPO.

USAPEEC recently conducted two seminars for importers in Columbia on technical issues relating to maintaining a cold chain.  Attendees included representatives of the National Institute of Medicine and Food Surveillance and the Columbian Agricultural Institute together with representatives of food operations. Events were held in  in Cartagena and  Buenaventura.

Dr. Amit Morey of Auburn University was the principal speaker, with the programs including meat quality and safety, maintaining a cold chain, freezing and refrigeration equipment and issues relating to shipment of refrigerated cargo.

The seminars attracted over 100 attendees, divided among importers, regulatory agencies and the hotel and food service sectors.  The program received sponsorship from the United Soybean Board.

Following an announcement in October 2023 that Tyson Foods would layoff 250 employees on the second shift at the Wilkesboro, NC. Complex, the Company has indicated that a further cutback affecting 500 employees will take place.  According to Tyson Foods, an adjustment in production was required in the fresh poultry operation.

It is a matter of record that Tyson Foods has closed four small chicken plants located in North Little Rock, AR., Dexter and Noel, MO. and Corydon, IN. involving termination of 3,000 employees.

The third quarter financial results for Tyson Foods are posted in this edition.  The program of consolidation and reducing production costs initiated in 2023 is obviously having a beneficial effect.  It is evident that Tyson Foods has operated with inherent inefficiency until it became obvious that rationalization of production and facilities is necessary for the Company to operate in a competitive environment.

OVERVIEW

The USDA provided updated projections for the production of corn and soybeans in the August 12thWorld Agriculture Supply and Demand Estimates (WASDE) #651, reflecting the anticipated 2024 crop. Production values for corn and soybeans were updated from the July edition since they were based on actual field data. Projections of crop size and ending stocks are based on acreage planted, yield, carry-forward levels from 2023, and with the latest assumptions of domestic use and exports.

The August 12th WASDE report predicted that corn would be harvested from 82.7 million acres, down 0.8 percent from the July projection. The soybean crop will be harvested from 86.3 million acres, up 1.2 percent from the July report.

The August WASDE increased the yield value for the 2024 corn crop by 1.2 percent to 183.1 bushels per acre. By comparison yield was 174.9 bushels per acre in 2023. The July soybean yield was increased by 2.3 percent to 53.2 bushels per acre compared to 49.9 bushels per acre in 2023.

The August USDA projection for the ending stocks of corn was down 1.1 percent to 2,073 million bushels. The August USDA projection for the ending stock of soybeans was raised 23.1 percent to 560 million bushels.

The August 2024 WASDE reduced the projection of corn price by 10 cents to 420 cents per bushel. The projected average season price for soybeans was lowered 30 cents to 1,080 cents per bushel. The price of soybean meal was reduced by $10 per ton to $320 per ton. Projected commodity prices suggest stable to lower feed costs for livestock and poultry producers. Row crop farmers will experience lower margins given higher production costs. This situation has contributed to an impasse in the decisions of the respective House and Senate Agriculture Committees regarding allocation of funding for the combination of nutrition support and conservation over farm commodity price supports in the delayed Farm Bill.

Projections for world output included in the August 2024 WASDE report reflect the most recent estimates for the production and export of commodities especially in the Southern Hemisphere with an emphasis on Argentine and Brazil. Economists also evaluated the likely impacts from ongoing hostilities in Ukraine following extensive destruction of agricultural infrastructure by the Russian Federation. It is evident that production and hence exports of wheat, corn and sunflower from Ukraine will be reduced compared to pre-war averages.

 

On August 8th, the USDA Agricultural Marketing Service announced purchase of chicken products for child nutrition and related food assistance programs to be delivered over the second quarter of 2024.

Purchases included:

• 36,800 cases of pouched boned chicken at an average of $49 per case
• 945 tons of canned boned chicken at an average of $2.35 per lb.

The total value of the purchase was $6,201,175

Agricon Buildings LLC has appointed Jeremy Houdek as Global Sales Director responsible for acquiring new business in the international market.

On his appointment Jeremy noted, “I am dedicated to driving product innovation through experience and team collaboration, with a customer centric focus.”  Jeremy joined the poultry industry in 2009 working for Big Dutchman in the Latin America Division supporting sales.  After 14 years with the company, Houdek joined Munters a multinational ventilation equipment supplier in 2022, focusing on the Americas region.

Information on Agricon and examples of completed projects can be obtained from the Company website accessed by clicking on to the Agricon logo on the right side of the Welcome page.

Jeremy can be contacted at JHoudek@Agricon-Buildings.com.

The 2025 IPPE will take place January 28th through January 30th, 2025, at the Georgia World Conference Center.  Organized jointly by USPOULTRY, the American Feed Industry Association and the American Meat Institute, the event is ranked highly among U.S. trade shows and is the leading venue for the poultry industry worldwide.

In 2025, exhibits will cover 557,000 square feet and will feature technology, equipment and services for livestock and poultry production.

• Green Hall A will feature animal feed ingredients, health and related exhibitors.
• Red Hall B will feature egg production and processing, incubation and live production.
• Blue C will cluster meat and poultry processing and packaging, rendering food and worker safety.

In addition to the major halls, the organizers have arranged for a food safety pavilion in Red Hall B, featuring exhibitors catering to this important aspect of production.

It is expected that there will be 1,300 interactive exhibits among the three halls and the BC connector, with an attendance exceeding 30,000.

Statistics from the 2024 IPPE included an 80 percent satisfaction rate and an equal number of attendees regarding the IPPE as “important for their business”.  Among the 1,432 exhibitors, 268 were first-time participants as were 40 percent of the attendees.

Educational sessions will include education programs for the feed and meat industries, the Market Intelligence Forum and the Animal Agriculture Sustainability Summit.  Programs incurring a charge include the Petfood Conference, the International Scientific Forum and the Latin American Poultry Summit.

College student and doctoral level career placement will take place during the 2025 IPPE with expanded opportunities for interviews.

Registration and housing will open on October 7th.

For information on the 2025 IPPE, access info@IPPEXPO.org or contact Gwen Venable, Vice-President, USPOULTRY, 1 (678) 514-1971.

Over the period May 20th through July 26th, Aviagen hosted 15 students from U.S. and E.U. universities for a summer internship program.  Following an orientation program rotating through various Aviagen facilities, the students embarked on a ten-week program gaining exposure to company operations including veterinary service, quality assurance, hatcheries and management functions including planning and business analysis. Students were mentored by Aviagen technicians and specialists under real world conditions.

Dr. Marc de Beer president of Aviagen North America commented, “We are committed to equipping the next generation with the skills and knowledge necessary for a successful career in poultry breeding and production.”  He added, “Aviagen is dedicated to fostering a drive for excellence and we are proud of this year’s interns who have shown remarkable initiative and passion for contributing to the global food supply.”

Ancera has adapted CRISPR-SeroSeq technology to conduct ‘deep serotyping’ to identify the prevalence of specific Salmonella serotypes in environmental and product samples. This is critical to mounting an effective program of suppression since efforts should be directed against high-virulence serotypes including S. Enteritidis, S. Infantis and S. Typhimurium1. Knowing which serotypes are present is an essential component of an investigation to determine the source of Salmonella contamination in the production cycle within a complex and to implement corrective action.  

Frequently complexes are faced with a high rate of recovery of a specific Salmonella serotype on carcass wash samples but have difficulty in identifying the source.  Sampling of replacement pullets, breeder hens, hatcheries and broilers during grow-out may yield different serotypes to those isolated on carcasses after processing.  This apparent inconsistency confounds an understanding of the dynamics of Salmonella infection through stages of production extending from the parent generation through to processing. 

Failure to identify the predominant serotypes arises from the inherent differences associated with conventional enrichment. Using in vitro culture and conventional bacteriologic procedures, Salmonella serotypes demonstrate variability in growth rate influenced by enrichment media.  The lag phase may vary widely extending from four to nine hours especially with a low quantum of organisms in a starting inoculum.  The potential for multiplication using conventional microbiology is measured by the doubling time that differs according to serotype and strain.  According to Dr. Margaret Kiss, director of R&D at Ancera, differences in lag times influence the rate of multiplication.  Examining field strains, Ancera has determined that after nine hours of incubation, an isolate of Salmonella Kentucky would have completed six doubling cycles compared to a field strain of Salmonella Infantis that would have remained in the lag phase over a similar period. Conventional Salmonella culture of a sample containing both serotypes would erroneously reflect Salmonella Kentucky as the only contaminant and would fail to reveal the presence of Salmonella Infantis, an important pathogen.  According to Dr. Kiss, “The culture media can influence the Salmonella-growth kinetics depending on the composition of the media and characteristics of the Salmonella strains present in the sample.”

Recognizing the inherent difficulty in determining the identity of Salmonella serotypes in samples when conducting an epidemiologic evaluation, Ancera has commercialized ‘deep serotyping’.  This technology, developed at the University of Georgia, applies CRISPR-SeroSeq analysis.  The technique refined by Ancera will identify Salmonella serotypes present in a sample based on the ability of PCR to identify conserved regions in the Salmonella genome.  The technology effectively eliminates confounding caused by the kinetics of bacterial growth during enrichment. The Ancera approach yields an accurate catalog of Salmonella serotypes present at each stage of the production cycle.

Ancera has developed expertise in designing and implementing epidemiologic evaluation of the Salmonella status of a complex, identifying specific serotypes. This is a necessary precursor to developing an effective and comprehensive program to suppress contamination.  Based on training and experience, Ancera can develop a sampling protocol specific for a complex, conduct deep serotyping and identify specific serotypes. Ancera can interpret laboratory findings based on the presence, level of contamination and biochemical characteristics of Salmonella that are present.  According to Dr. James Barton, awareness of the specific Salmonella serotypes present at stages in the production cycle through applying deep serotyping is critical to developing an appropriate program to suppress infection and ultimately to reduce contamination of product. 

Deep serotyping can be applied to confirm the effectiveness of control measures including chemical rinses such as peracetic acid. Laboratory assay has demonstrated wide differences in the ability of Salmonella serotypes to resume multiplication after exposure to peracetic acid.  In a specific study, Salmonella Kentucky was effectively suppressed for 12 hours compared to Salmonella Infantis that resumed growth after 4 hours and Salmonella Enteritidis that was intermediate in recovery after exposure to the antibacterial compound.

Precise knowledge of the identity and prevalence of specific Salmonella serotypes at locations within the production cycle and their susceptibility to antibacterials is essential to an effective program of pathogen suppression. Combining a field presence with a laboratory capability to apply deep serology and quantitative analysis, Ancera provides food safety professionals with comprehensive and accurate data to reduce contamination of carcasses, parts, and in ground chicken and turkey products.

1. Kim, M. et al. Risk assessment predicts most of the salmonellosis risk in raw chicken parts is concentrated in those few products with high levels of high-virulence serotypes of Salmonella. J. Food Protection. doi.org/10.1016/j.jfp.2024.100304. 

Press reports indicate that Tyson Foods will sell its stake in joint venture Godrej Tyson Foods to the holding company, Godrej Agrovet.  Neither party has commented on the transaction.  Godrej Tyson was a leading producer of processed chicken in India marketing under the Real Good and Yummiez brands.

Agricultural and QSR JVs have a decidedly rocky tenure in India. This must be attributed to differences in business culture, the appallingly inefficient and byzantine legal system and failure to recognize the intent and strictures of legal agreements. Indian JV partners seem to end up with the assets including technology and proprietary information and the foreign partner departs with experience and frequently a figurative or literal pain in the gut.

Seaboard Foods will settle Consumer Indirect Purchaser claims that it allegedly conspired with other producers to manipulate pork prices.  They will pay Plaintiffs (and their lawyers) close to $15 million.  This follows a $5 million settlement with the Commercial and Institutional Indirect Purchaser Plaintiffs.

To date the class of Consumer Indirect Purchaser plaintiffs have agreed to settle against payment of $100 million following settlement agreements with Hormel Foods, JBS USA Food Company and Smithfield Foods.

The plaintiffs claim that the price of pork was maintained at an artificially high level as a result of alleged collusion among producers to limit production based on data available through the AgriStats reporting system.

As a component of the settlement agreement, Seaboard Foods will make available documentation and will provide testimony of benefit to plaintiffs.

Following release of the proposed Fair and Competitive Livestock and Poultry Markets Rule, the Meat Institute issued a strong letter of disapproval stating, “Contrary to USDA assertions the required changes would introduce uncertainty into the market and decouple the demand signals producers receive from beef consumers and their willingness to pay for value-added attributes.”  The Meat Institute also observed that with a small cattleherd as at present, the proposed rule would undermine the benefits from growing beef in a market with increased demand.

The National Cattlemen's Beef Association is also opposed to the proposed rule noting, “cattle markets are complicated, and the rule will have a overarching impact on the cattle industry.  It is a direct attack on producer profitability.”

The USDA has extended the comment period from August 27th to September 11th but this concession over time of submission is regarded by producers, packers and processors as being inadequate.  The USDA is obviously expediting the legal procedures before the rule can be finalized. This is in anticipation of failure to complete the process before a possible change to an alternative administration in January 2025.

A recent publication* documents the beneficial effect of including supplemental alpha-linolenic acid (ALA) in the form of LinPRO™ in breeder diets. The treatment resulted in improved growth rate, feed conversion and breast yield in broiler progeny.  Supplemental ALA was provided to broiler breeders and progeny as a 3.0 percent inclusion of a co-extruded flaxseed and pulse mixture available commercially as LinPRO™. This patented omega-3 fatty acid  (α-Linolenic Acid; ALA) is a feed ingredient that is patented, dry-extruded and made from land-based ingredients.

Eggs were collected from breeders at 34, 44 and 54 weeks for incubation.  Broiler progeny were reared to 42 days in cages.  A comparison was made between a conventional corn soybean meal diet and the ALA supplemented experimental diet containing LinPRO™.  The control broiler progeny from breeders fed a conventional diet and provided with a non-supplemented starter and grower diet weighed 2,630g at 42 days. This compares to broilers derived from breeders receiving the supplemented ALA diet, but fed the control starter and grower diets, attaining 2,807g body weight. Broilers from breeders receiving the ALA-supplemented diet and in addition, ALA in starter and grower diets weighed 2,793g. The respective breast weights expressed as g. per kg body weight were 226g. and 209g. For the broilers derived from breeders supplemented with ALA and receiving ALA in their starter and grower diets, breasts weighed 239g/kg body weight.  Breast weight in the broilers receiving LinPRO™ in their starter and grower diets were significantly higher than controls, demonstrating the benefit of supplementation.

*Thanabalan, A., Dreger, R. and Kiarie, E.   Significance of successive feeding of sources of n-3 fatty acids to broiler breeders and their progeny on growth performance, intestinal lesions scores, lymphoid organ weights and plasma immunoglobulin-A in broiler chickens. Poultry Science 103 doi.org./10/1016/j. psj.2024.103796

In a press release dated August 7th Beyond Meat Inc. (BYND) announced results for Q2 ending June 29th 2024. The Company incurred a higher EPS loss than consensus ($0.46) but beat the Zack’s revenue projection by 4.4 percent. BYND rose fractionally on the August 8th post-release market open but finished up 24.6 percent on a decidedly up-day for the market.

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)

* ‘+’ denotes improvement (or ‘less bad’)

NOTES:

R&D expenditure declined 37 percent from Q2 2023 to $5.4 million or 5.9 percent of revenue

S&G expenditure declined 11 percent from Q2 2023 to $42.2 million or 45.2 percent of revenue

For Q2 FY 2024:-

52-Week Range in Share Price: $13.10 down to $5.13 50-day Moving average $6.66

Forward P/E: Neg.

Insiders hold 4.9 percent of equity (was 9.2, Q1 2024), Institutions 47.9 percent (was 37.3 percent, Q1 2024).

Comments for Q2 2024:-

U.S. sales represented 59.3 percent and International 40.7 percent

Of U.S sales 81.3 percent were through retail channels, compared to 70.2 percent in Q2 2023

Of International sales 46.3 percent were through retail channels, down from 48.9 percent in Q2 2023

Average unit revenue in Q2 2024 for all sales attained $4.73/lb. compared to $4.46/lb.

during the corresponding quarter of 2023.

Guidance for FY 2024 included:

Net revenue of between $320 and $340 million.

Gross margin in mid-‘teens’.

Operating expenses $180 to $190 million

Capital expenditure $15 to $20 million

Continued negative cash flow

In commenting on results Ethan Brown president and CEO stated:- “We are pleased to report a strong quarter of progress against our 2024 plan, a pivotal year on our path to sustainable operations and profitability. Key proof points include exceeding our Q2 revenue guidance; continued reduction in operating expenses and cash consumption; and our best quarterly gross margin since Q3 2021.

He added "Further, we firmly reiterated our center-of-the-plate position in the global health and wellness trend with the launch of our Beyond IV platform. Developed in collaboration with leading medical and nutrition experts, and recognized by the nation’s leading health organizations, we are thrilled to see consumer, media, and nutritionist enthusiasm for this latest, important, renovation.”

Brown concluded, “Finally, alongside the strengthening of our operations and product portfolio, we are working on bolstering our balance sheet.”

Despite this optimistic commentary the reality includes:-

• An accumulated deficit of $1,170,093 million.
• An 8.8 percent decline in revenue for Q2
• Trailing 12-month negative operating cash flow of $67.3 million
• Inventory of $119,532 represents 1.3 times Q2 FY 2024 sales
• Effective July 15th 38 percent of float was short
• Share price of $5.57 on May 8th open, 57 percent off 12-month high of $13.10

The USDA-FSIS proposed rule “Salmonella Framework for Raw Poultry Products” published on August 7th established a comment period ending on October 7th.  The proposed rule covers a complex issue and represents a radical departure from existing approaches to suppressing Salmonella. Accordingly poultry associations including the National Chicken Council and the National Turkey Federation requested an extension to frame a response.  Accordingly, USDA has granted an additional month to receive comments by November 7th.

In a press release dated July 31st Pilgrim’s Pride Corp. (PPC) announced results for the 2nd Quarter FY 2024 ending June 30th. The quarterly figures showed positive earnings for all three segments with higher revenue and operating profit across all three geographic areas. Earnings were appreciably above Q2 2023 and exceeded consensus estimates on non-GAAP by 29 percent but fell short of consensus revenue of $4,620 million by 1.3 percent.

The following table summarizes the results for Q2 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. June 30th 2024/ December 31st 2023.

• Q2 2024, $15.9 million investment loss (Q2 2023, $7.6 million gain)
• Q2 2024  $0.5 million miscellaneous income (Q2 2023, $1.3 million loss)
• Q2 2024  $2.2 million gain in foreign currency transactions (Q2 2023 $16.4 million loss)

Operating income and sales posted by the three business segments during Q2 2024 were:-

      U.S.      69.9 percent of company operating income on 58.3 percent of sales

      Europe   5.4 percent of company operating income on 28.6 percent of sales

      Mexico 24.7 percent of company operating income on 13.1 percent of sales

52-Week Range in Share Price of PPC:  $22.33 to $44.62.  50-day Moving average,  $37.64

Market Close: July 31st pre-release    $41.71.

             Open: August 1st post-release $43.35.

Current Forward P/E 13.3    Beta 0.8  

Equity held by insiders and holding Company: 82.6 percent, Institutions, 16.4 percent

In commenting on Q2 results Fabio Sandri, CEO stated, “Our global portfolio delivered significant year-over-year profitability growth. We remained disciplined in the execution of our strategies, focusing on what we can control and continuing to expand our relationships with Key Customers, elevating our performance as market fundamentals became increasingly attractive,”

Sandri continued “In the U.S., Big Bird realized benefits from enhanced commodity cutout values, further production efficiencies and lower input costs; Case Ready and Small Bird delivered above market growth with Key Customers through differentiated and customized offerings; and Prepared Foods increased its marketplace presence through innovation of branded, value-added items across retail and food service. Our diversified U.S. portfolio enabled our business to capture market upside as conditions evolved in the commodity market. At the same time, we also worked in partnership with our Key Customers to cultivate demand through promotional activity and innovation, further creating value for our customers and consumers alike. We also continued to strengthen our quality and service through operational excellence,” remarked Sandri.

Addressing Europe, Sandri stated, “Consumer sentiment improved as wage growth surpassed inflation. Given this environment, the team optimized mix with Key Customers and drove branded offerings. Additionally, the team identified and implemented our plan to optimize our manufacturing network and increase efficiencies. Europe’s performance demonstrates the robust nature of our strategies and agility of our team. Our diversified portfolio allowed us to rapidly adjust to consumer preferences and meet Key Customer needs. These efforts were further amplified by continued operational excellence to improve production efficiencies,”

In relation to Mexico Sandri observed, “ We improved given continued balance in supply and demand fundamentals in the commodity market, growth with Key Customers across retail and foodservice, and increased momentum of branded offerings in both Fresh and Prepared. Investments in operational excellence to enhance biosecurity in live operations and build capacity also remained on schedule. Mexico continues to drive growth above market for our Key Customers and branded offerings. Given our investments to expand production, we have an opportunity to further develop our marketplace presence and diversify our portfolio,”

Sandri concluded, “The ramp up of our recently completed protein conversion plant in South Georgia remains on schedule and continues to cultivate additional business from Key Customers. Our investment in protein conversion reinforces our strategies to drive profitable growth and mitigates our operational risk. We will continue to explore opportunities to strengthen our business and further diversify our portfolio,”

BioChek has introduced a Pneumovirus (aMPV) indirect ELISA test kit to detect antibodies against aMPV subtypes A, B and C.  The test kits can be used to assay both turkey and chicken sera.

With the advent of aMPV infection in broilers, commercial laying flocks, and growing turkeys in North America, there is a need to identify the presence of antibodies to differentiate among respiratory viral infections.

Applying the BioChek ART (aMPV) ELISA is a convenient and effective technique for monitoring flocks, although as yet no approved vaccine is currently available in the U.S. as in Europe.

To obtain registration for the test kit, BioChek demonstrated high specificity with negative results on 80 sera derived from SPF chickens. Negative titers were obtained when assaying sera with diagnostic levels of antibody against a range of avian pathogens, including adenovirus, IBV, IBD, AI, ILT, NDV, and EDS denoting high specificity. Assayed ELISA Titers ranged from non-detectable to 800 units, with a 1,600-unit cutoff denoting infection.

With respect to assays on field samples, sensitivity was confirmed by quantitative antibody detection with either field strains of aMPV, yielding ELISA values over 15,000 in chickens  vaccinated with Nemovac™ (Boehringer-Ingelheim) PL21 type B. Applying the BioChek system, ELISA values in the range of 6,600 were measured 48 days after vaccination.

The BioChek ART (aMPV) ELISA test kit is a highly effective addition to the range of antibody detection kits supplied by the Company for diagnostic laboratories. The availability of a sensitive but specific aMPV antibody assay will allow poultry health professionals to confirm exposure of chicken and turkey flocks to the pathogen. Structured programs of assay can define the epidemiology of infection and lead to appropriate preventive strategies before and after vaccines become available.

For technical specifications for the aMPV ELISA kit activate https://www.biochek.com/poultry-elisa/avian-rhinotracheitis-antibody-test-kit/

Additional information on the BioChek range of diagnostic kits click on to the Company logo on the right side of the welcome page

In a press release dated August 8th Maple Leaf Foods Inc. (MFI-TO) announced results for Q2 FY 2024 ended June 30th 2024.

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)

* Indicates positive value or “less bad”

52-Week Range in Share Price: $15.80 to $21.89 50-day Moving average $17.26

Forward P/E 32.6 Beta 0.5

Insider shareholding 40.0%. Institutional shareholding 26.5%

In commenting on Q4 results Curtis Frank president and CEO stated “In the second quarter of 2024, we made excellent progress in executing our strategic playbook, delivering Adjusted EBITDA of $141 million, 37% growth over the second quarter of last year, and 11.2% Adjusted EBITDA Margin, a 310 basis point improvement year over year. "Several key elements contributed to our performance, including 3.2% year-over-year sales growth in our prepared meats business, improved pork market conditions, growth in our sustainable meats portfolio, better overall sales mix, and contributions from our large capital projects."

He added "We remain laser-focused on executing our priorities for 2024, and we are not taking our eye off the longer-term goals we have set for ourselves" continued Mr. Frank. "We are harvesting the benefits from our London poultry plant and Bacon Centre of

Excellence, driving cost out of the business, deleveraging our balance sheet, and drawing on our team's proven ability to demonstrate agility in a challenging consumer demand environment."

Frank concluded "Looking ahead, we are on a clear path to unleashing the potential of our business by separating into two independent public companies, each primed for growth and positioned to be a leader in its field," stated Mr. Frank. "I am confident, that these two companies - Maple Leaf Foods and the new Pork Company - will unlock the value of their respective organizations for the benefit of all stakeholders, with dedicated management teams and the financial independence to pursue their own value-creation strategies. This will be the next exciting milestone step in executing the Maple Leaf playbook."

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 2024 Environmental Management Seminar organized by USPOULTRY will take place September 19-20th at the Hilton Sandestin Beach Golf Resort in Destin, FL.

The program will cover a variety of relevant topics that will include:

• Review of federal regulations
• Dissolved air flotation operation
• Chemical treatment and residual management
• Effluent limitation guidelines
• Storm water management

For additional information, including registration, access <uspoultry.org>.

In a press release dated August 5th Tyson Foods Inc. (TSN) announced results for the 3rd quarter of FY 2024 ending June 29th 2024. TSN posted higher adjusted earnings ($0.87) than consensus estimates ($0.67)

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 41.7 percent of total assets

52-Week Range in Share Price of TSN:  $44.94 to $63.87.  50-day Moving average,  $57.73

Market Close: Friday August 2nd $61.24. Monday August 5th Open post release, $62.29.

Forward P/E 16.7                  Beta 0.7

The Chicken Segment attained sales of $4,076 million ($4,212 million in Q3 FY 2023) representing 30.5 percent of Company revenue. GAAP operating income attained $244 million in Q3 representing 71.5 percent of net Company operating income. Operating loss in Q2 FY 2023 was $(314) million.  For the Chicken Segment the report stated:- “The USDA projects chicken production will be flat in FY 2024”. Anticipated adjusted operating income for the segment was forecast at $850 to $950 million for FY 2024. 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 Q3 2024 were respectively:- Pork, $(62) million; Beef, $(69) million; Prepared Foods $203 million and International & Other $25 million.

In commenting on results Donnie King, president and CEO stated, "Our disciplined actions and focus on the fundamentals have resulted in a positive turnaround of our business," He added "In Q3, we delivered the highest adjusted operating income in the last seven quarters while also generating strong free cash flow. Looking ahead, we will continue to strive to be best-in-class operators, drive efficiencies, value-up our portfolio, win with customers and consumers, and be disciplined in our capital deployment."

Improved Q3 earnings raised TSN on a sharply down market.The investors’ call stressed a ‘positive turnaround’ in Q3.

Guidance for FY 2024 included Revenue unchanged from FY 2023. Adjusted operating income for the Company was increased $100 million to a midpoint of $1.7 million with Prepared Foods contributing $850 to $950 million. Capital expenditure was projected at $1.2 to $1.3 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.

On July 12th, the USDA Agricultural Marketing Service announced purchase of chicken products for child nutrition and related food assistance programs to be delivered during August 2024.

Purchases included:

• 9,792 tons of chilled large chicken at an average price of $1.61/lb.
• 1,134 tons of chilled chicken legs at an average price of $0.74/lb.

The total value of the purchase was $31.7 million

Following an OSHA review, the Danville, IL plant operated by Viscofan USA, a subsidiary of a company based in Spain, was subjected to a penalty of $200,000.  At issue were both repeat and serious violations.  The initial justification for the OSHA investigation was a serious injury to a    maintenance worker resulting in fractures and lacerations incurred while servicing a machine that was not protected by lockout.  In the process of evaluation of records, a second incident involving chemical burns was disclosed.  As with many investigations of serious injuries, Viscofan failed to train employees in safety procedures and neglected lockout/tag out procedures.

Viscofan manufactures sausage casings at the Danville plant that together with operations in Montgomery, AL and Bridgewater, NJ. Collectively employ 700.  Viscofan also operates in Brazil, Germany, Mexico, Spain, the Czech Republic and Serbia.

Judge William G. Young of the U.S. District Court of Massachusetts ruled against Triumph Foods relating to Massachusetts Question #3 the Act to Prevent Cruelty to Farm Animals passed by ballot initiative in 2016.  Judge Young ruled that “the contention by Triumph that the Federal Meat Inspection Act preempted Question #3 was invalid since the state law had no provision requiring action by a processing plant.”

Triumph Foods intends to appeal the decision and will invoke the Dormant Commerce Clause relating to interstate commerce previously ruled invalid by SCOTUS with respect to California Proposition #12.

Pork producers did however gain some benefit from litigation since in terms of a settlement agreement with the Massachusetts Department of Agriculture ground pork will be excluded from the provisions Question #3.

It is high time that the pork-industry litigants and holdouts accept reality and make the necessary investment in group-housing of sows. Irrespective of state laws or ballots, public sentiment and customers are opposed to gestation crates.

Facing a storm of protest from legislators representing red meat-producing states, the Department of Defense has rescinded a previous decision to support a company developing cell cultured meat for U.S. armed forces.

It is the intent of Representatives and Senators from the involved states to amend the fiscal year 2025, Defense Appropriations Bill, the National Defense Authorization Act and fiscal 2025 Agriculture Appropriations to block funding for or purchase of cell cultured meat.

Circana has compiled sales of fresh meat for the 52 weeks ending June 30, 2024.  The following data was released:

Circana noted that value-added meat sales trailed conventional products suggesting consumer concern over prices.  Combining products within the USDA Certified Organic category, dollar sales were up 9.8% and volume by 8.3%.

Faced with declining liquidity and high debt, Beyond Meat (BYND) negotiated a convertible bond offering in 2021 to survive.  Since then, the company has failed to increase revenue, develop new markets or stem extensive and regular quarterly losses.  The Company is now in discussion with bondholders concerning a restructuring of the balance sheet. Despite tweaking products, packaging and promotion, the reality is that the company is heavily in debt, facing deadlines on $1.1 billion in convertible bonds. Management has lost the confidence of analysts, shareholders, customers, consumers and the financial community. 

Basically, the demand for non-competitively priced plant-based substitutes for meat evaporated after the 2019 IPO with a downhill progression in share price from a July 28 2020 high of $244.  Currently, Beyond Meat convertible notes trade at an 80 percent discount and market capitalization of $397 million on July 22nd is 110 percent lower than the equivalent month in 2023.Twelve month trailing operating and profit margins are respectively -70.7 and -102 percent. The 52-week range in share price is a decline from $17.24 to %5.58 with a 50-day moving average of $7.04. Effective March 30th at the end of Q1 2024 BYND had an accumulated deficit of $1,135 million. 

Basically, Beyond Meat is a company with a great future behind it.

The National Chicken Council (NCC) supported by poultry associations in fourteen states has requested a six-month extension of the period to respond to proposed rules relating to contracts.  The Fair and Competitive Livestock and Poultry Markets Rule and the Poultry Grower Payment Systems and Capital Improvement Systems Rule have profound implications on the relationship between integrators and growers.  Accordingly additional time is required for producers to evaluate the implications of the rules and to respond accordingly.

Tom Vilsack the Secretary of USDA  introduced similar far-reaching changes under the Packers and Stockyards Act during his previous term of office in the Obama Administration.  Through his current tenure, Secretary Vilsack has advanced changes to the structure of U.S. meat and poultry production to the detriment of large packers and integrators. He has expended vast sums of taxpayer money on promoting alternatives including small local processing facilities, favoring tribes and minorities in so-called underserved communities.  It is doubtful whether the request for an extension will be granted since the end of the requested response period will extend to February 2025 at which time it is highly likely that the Secretary will no longer be in office and rules that are implemented may well be rescinded by his successor as occurred in 2017. USDA announced on July 30th that the comment period would be extended to September 11th.