According to recent comments by Hormel CEO, James P. Snee, the Company will expand product scope to capture new distribution channels. Hormel will promote products including snacks comprising their Planter’s Nut brand and a range of pork and turkey products through convenience stores that offer potential for increased sales.  Hormel is also promoting Jennie-O ground turkey through retail channels despite indications of oversupply.  Hormel is also accessing the market for pizza toppings and sliced meats.

Initiatives to reduce costs have been implemented through streamlining the supply channel and application of technology. The implied benefits of improved planning and execution will be evident in subsequent quarterly reports according to Snee.

According to an FDA release, FGF Brands Inc. has recalled 12,000 cases of chocolate chip muffins supplied to Aldi.  The muffins were distributed nationwide and were packed in four-count containers. The recall was issued following disclosure that walnuts were incorporated in the product without appropriate label disclosure.

In reviewing the causes of recalls, more than half were attributed to mislabeling usually relating to designated allergens.  Collectively these recalls represent a considerable wastage of food and a substantial risk of adverse reaction among those sensitive to allergens including milk, nuts and soybean proteins.  Recalls due to mislabeling and are caused by failures in quality control procedures in food packing plants. Fortunately many recalls are initiated by manufacturers following in-plant recognition of errors. This expedites recall and avoided possible adverse health events.

Failure to regulate and document batch sizes may result in extensive recalls.  This especially the situation with ground meat products including turkey with a failure to identify and isolate production lots.  This is illustrated by the demise of Hudson Foods in 1997 following a ground beef recall of 25 million lbs. and the 2011 recall of 36 million lbs. of ground turkey processed by Cargill.

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.

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.

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

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.”

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

The poultry industry has developed a Task Force to Prevent Child Labor following revelations that contractors were employing minors to clean plants and to work on portioning and deboning lines.

Recently a roundtable with a decidedly partisan orientation considered child labor.  The event was entitled “The Exploitation Crisis: How the U.S. Government is Failing to Protect Migrant Children from Trafficking and Abuse”, justifiably criticized the Office of Refugee Resettlement, Unaccompanied Children’s Program.

The NCC maintains that the problem of child labor and employment of aliens is independent of whatever administration is in office and will persist, absent a radical reform of immigration legislation.

The Task Force to Prevent Child Labor developed by the poultry industry clearly states that there is a zero tolerance for unlawful hiring of minors.  The issue is noncompetitive and requires collaboration among all sectors of poultry production.  The Task Force has pointed out inadequacies in the E-Verify system where Social Security Numbers can be duplicated or be assumed from a deceased individual.  Despite following procedures, producers can be placed in the invidious position of employing an illegal worker presenting fraudulent documentation.

The Task Force has called for a stable, legal and permanent workforce to maintain productivity.  The industry considers that the immigration system “is broken” and it is time for Congress to resolve the issue.

A number of integrators have adopted the expedient of using employment contractors to provide workers as a “cut-out” strategy.  This approach is obviously inadequate but is a reflection of the need to recruit labor and invest in training to maintain a stable and productive workforce.  Current legislation fails to satisfy the needs of both industry and agriculture.  Unfortunately addressing deficiencies and upgrading immigration has become highly politicized.  The reality is that agriculture and industrial operations are dependent on immigrants.  With an aging population and a declining birth rate, the U.S. will need immigrants to become permanent residents contributing to social security and taxes.  The alternative to a regulated and progressive immigration policy is for the U.S. to become like Japan and other nations with declining populations and a disproportionate number pensioners with inadequate financial contributions from younger workers.

Regrettably available workers come from Latin America and Asia and not Scandinavia.  The U.S. population will change in ethnic composition with inevitable changes in culture, a reality that is opposed by those committed to the status quo.

If we are to prosper as a nation we must develop a rational immigration policy free of racist overtones and contributing to acculturation to the U.S. for immigrants and their succeeding generations.