In The News This Month – December 2021

 

 

Editorial

Happy New Year! The year seemed to pass by rather quickly, leaving us hopeful for a better 2022. Stories wrapping up the year mainly focused on the outlook for 2022, which seems to be a positive one. WattPoultry did take some time last month to highlight the 10 most-read consumer trends articles of 2021. These stories centered around shortages (we had a pickle shortage?), post-pandemic worries, and cage-free conversion issues. As far as what we should expect in 2022, analysts seem optimistic. Corn prices were volatile in 2021 but some believe the price of corn cold remain strong through 2022.  We can also expect a brighter 2022 for the pork industry. Economists believe pig farmers can be more confident this year, so long as we can keep foreign animal diseases like ASF out of the country. The beef industry is also expecting a better year ahead. Cattle prices were higher toward the end of the year and are expected to continue improving in 2022.

Conversations around plant-based foods remained popular throughout the year. Last month, WattPoultry featured an interesting article about the maker of Budweiser beer creating plant-based eggs. Apparently, they plan to upcycle leftover barley to manufacture alternative egg whites. Now we can feel like we’re contributing to a healthier and more sustainable future when we purchase our next 6-pack!

Of course, 2021 saw an abundance of stories about cage-free legislation. A lot of challenges remain with meeting states deadlines and anticipating demand. According to Cal-Maine Foods, the largest egg producer in the world, there are more cage-free eggs available than demand today. With legislation in different states requiring cage-free eggs by a certain date, many producers went ahead and started converting ahead of schedule causing an over-supply that eventually had to be down packed into commodity conventional eggs. This topic will certainly remain a hot one through 2022, especially with California legislation requiring all eggs sold and produced in the state to be from cage-free production as of January 1st.  This last month brought us news of two destructive fires. An estimated 17,000 commercial turkeys were lost in a barn fire in Perry County Pennsylvania. Thankfully, the fire was contained to the one barn, but still a devastating loss for the farm operators. Another fire in Clearfield, Iowa devastated an egg production facility. Sadly, Hen Haven suffered major damage to their barns, processing facility, and office space. As a new Aeros customer, our thoughts and prayers are with everyone at Hen Haven.

2021 was a huge year for the poultry industry on the Mergers & Acquisitions front. Some of these activities will continue into the new year. For example, the Wayne Farms – Sanderson Farms merger is still pending. It will be interesting to follow this merger in 2022. Be sure to catch the article below highlighting some of the most compelling M&A stories of 2021.

Although we may still see stories of labor shortages, supply chain problems, and extreme climate changes in 2022, I hope that we will also experience growth and positive change throughout the year. There is a lot of optimism surrounding new technology in agriculture. News that I will be sure to follow throughout the year about future advancements that will only bring more efficiency and sustainability to the industry that feeds the world. May we all have a wonderful and prosperous 2022.

 

Monica Lizar

Account Manager

Aeros, a Cultura Company

 

Top 10 poultry consumer trends of 2021

Follow the link to the most popular consumer trends articles and blogs from WATTPoultry this year :  Top 10 poultry consumer trends of 2021 | WATTPoultry (wattagnet.com)

 

Feed and Grains:

 

 

As analysts turn their attention to next year, which is creating more of a bullish outlook: corn or soybeans? The answer is mixed, but even with a tapered expectation of corn exports in the New Year, analysts are more optimistic when it comes to the price picture for corn.

 

Mercaris sees boon year for US organic corn, soybeans

Mixed outlooks are in store for organic wheat, soybean and spring wheat, according to a recent report from Mercaris, a market data service and online trading platform for organic and non-GMO certified agricultural commodities.

The domestic organic corn market finished strong with prices recovering from last year’s dips. Production reached a 9% year-over-year increase with harvests estimated to reach 49.5 million bushels, according to Mercaris. The harvest is expected to slow the steady stream of organic corn imports in 2022. The increase in supply could also potentially lower prices for the upcoming summer, Mercaris noted.

It was a record-breaking year for the domestic organic soybean market, where production was expected to reach a new high of 9.4 million bushels. Unlike corn, imports of organic soybean are not projected to diminish nor is the large domestic output anticipated to have an impact on soybean’s premium price tag, according to Mercaris. Part of the import issue stems from US importers being unable to source organic soybean meal from India due to multiple actions that were taken against that country in 2021.

Read full article here

 

Corn growers point blame at Mosaic for high fertilizer costs

Leaders from the National Corn Growers Association and its state affiliates sent a letter to one of the nation’s largest fertilizer producers taking to task the tariffs that were imposed in March at the request of the fertilizer company. Fertilizer prices have since skyrocketed, and NCGA continues to make noise about the fertilizer market situation.

Since 2020, all nitrogen fertilizers are now more than double in price: anhydrous is up by 131% and urea by 110%. Potash is up by 120%. In October of 2021 alone, the price of anhydrous fertilizer jumped 26% from the previous month to levels not seen since 2008. Urea increased 21% from the previous months, and the price of potash is now 13% higher, according to a letter to the Department of Justice seeking an investigation into the fertilizer price hikes.

Read full article here

 

Egg Week

USDA Weekly Egg Price and Inventory Report, December 29th 2021

Market Overview

• Unit revenue for Midwest Extra-large and Large sizes was up 0.6 percent this past week following an eight percent rise in price over the previous week. Mediums were up 1.0 percent. The small increase the past week coupled with a 7.4 percent rise in industry inventory suggests a full pipeline and weakening demand after the Christmas surge. December 2021contrasts with the corresponding four weeks in 2020 characterized by low ex-plant prices. The price of shell-eggs will not be unduly affected by a net increase of 0.4 million hens in the producing flock this past week but with a 14.9 million net increase in flock size over twenty weeks. Wholesale Midwest prices advanced further into positive margin, taking into account the combined costs of nest-run, grading, packaging and delivery.
• Shell inventory was 7.4 percent higher after a 9.3 percent decrease over the previous week, indicating that the pipeline from packing plants to the retail shelf has been filled. It is now apparent that the inventory held by chains and other significant distributors may be more important in establishing wholesale price than the published USDA inventory for plants, especially over the short term. Chains spread their purchases in December and attempted to preempt anticipated pre-Christmas price rises. Industry observers and participants expected buyers to adjust purchases only in response to retail demand to hold down inventories in their DCs and stores while marking up shelf margins and pressuring suppliers for rapid replenishment of stocks to DCs and through DSD. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize store margins. This strategy noted during October and early November depressed the volume of sales of generics to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are infrequently featuring generic Large or Extra large.

 

Read full article here

 

Brewery waste could create plant-based eggs

The maker of Budweiser beer plans to upcycle leftover barley to manufacture alternative egg whites.

The Anheuser-Busch InBev-backed EverGrain will ferment the brewery byproduct, a process the company says requires limited water use, emissions and land use, while also ensuring better nutrition and taste.

“Our unique barley ingredients will transform plant-based products, delivering better tasting and more nutritious options to consumers who seek a healthier and more sustainable future,” EverGrain’s founder Greg Belt said in a statement.

Most plant-based eggs currently on the market use peas, tofu or soya, although I’m aware of a growing trend in upcycling or transforming discarded or low-value organic waste to produce poultry feed. 

Read full article here

 

Clearfield mayor: Hen Haven fire ‘a scary deal’

Clearfield residents are coping with a disastrous fire striking a major Taylor County employer over the weekend.

An investigation continues into the fire damaging the Hen Haven egg production facility in Clearfield. Clearfield Mayor Chris Knox tells KMA News he was about to begin his daily chores when he noticed smoke in the direction of the plant at around 7:30 Saturday morning.

“I’d actually just drove by there,” said Knox, “and didn’t notice the fire, but right at either 7:30 or 7:31, I noticed that there was quite a bit of smoke rolling out of one of the facilities there. I eventually drove over there, and saw that it was coming out of one of the hen barns where they have the live chickens. That’s where I first noticed the fire. Then, it kind of spread on the processing facility, and the office space after that.”

Read full article here

 

Cal-Maine reports imbalance of cage and cage-free eggs

Executives from Cal-Maine Foods presented at the Stephens 2021 Annual Investment Conference on December 2 and discussed the company’s financial results and the uncertain market situation facing all U.S. egg producers.

After the company’s first fiscal quarter, it holds approximately 19% of the U.S. retail market share and 40.8 million layers, 12% of the US layer market share. In fiscal 2021, it generated $1.3 billion in sales, 1.1 billion dozen eggs and 64 million pounds of egg products. However, the last few years have presented challenges that affect not only Cal-Maine, but the entire egg industry.

“Big business continues to be a challenge. It’s been a tough three years. Our company and the industry experienced exceptional retail demand in 2020,” stated Dolph Baker, chairman and chief executive officer.

He continued to explain that the IRI reported a retail demand increase of about 10% since 2019 due to a larger number of meals being prepared at home. The increase the industry has seen in food service and hospitality demand greatly offset the retail demand, causing a supply and demand imbalance.

However, a drop in retail demand occurred this year due to cooking fatigue and the ability to dine out again as well as higher feed, labor, packaging and delivery costs.

Read full article here

 

Poultry:

 

Severe avian flu season in prospect for European poultry

The first cases of highly pathogenic avian influenza (HPAI) in poultry of this winter have occurred in Denmark, Sweden, and new regions of Russia and Ukraine. Losses are mounting rapidly in parts of Italy, and the United Kingdom reports its worst ever outbreak. 

So far this winter, 13 European states have officially registered at least one HPAI outbreak in poultry, with H5N1 as the dominant serotype.

Since the beginning of December, 12 European states have registered new outbreaks in their respective poultry sectors. This is according to the latest update of the Animal Disease Information System of the European Commission (EC; as of December 19).

Read full article here 

 

2021 a huge year for poultry industry on M&A front

News of mergers and acquisitions (M&A) has always seemed to attract a lot of attention from readers, and there was plenty of that sort of news on the WATTPoultry.com website during 2021.

And many of those news developments have not come to a conclusion by the end of 2021, which leads me to wonder what 2022 will look like.

We do a roundup of the M&A activity each month, and if you click on those articles, which also include M&A activity in the feed industry, you will see there has typically been a lot of activity on those fronts. It would be difficult to do a recap of all of those stories at the end of the year, so I’ll highlight some of the most compelling M&A stories of 2021.

Read full article here 

 

Turkey:

Barn, 17,000 turkeys lost in Pennsylvania fire

An estimated 17,000 commercial turkeys were lost when a barn caught fire in Perry County, Pennsylvania.

According to a post on the Newport Fire Department (NFD) Facebook page, firefighters were paged at around 2 a.m. on December 23 to the scene in the 1300 block of Turkey Bird Road for a structure fire.

Upon arrival, the Newport Fire Department and other responding agencies discovered that a barn fire was “well off,” but the fire was contained to that one barn. The 17,000 turkeys lost were described as “young.”

A cause of the fire has not yet been determined.

While the identity of the farm operators or the company for which the turkeys were raised were not identified, Facebook users making comments on the NFD’s post expressed concerns and offered prayers to people named Mark and Stacey.

Read full article here

 

Jennie-O Turkey Store plant to close in Willmar, Minnesota

Jennie-O Turkey Store will close one of its plants in Willmar, Minnesota, in an effort to make the business more efficient.

Hormel Foods, the parent company of Jennie-O Turkey Store announced the decision to close the plant on Benson Avenue in Willmar as it released its fourth quarter financial results on December 9.  The quarter ended on October 31.

The Benson Avenue plant is one of two plants Jennie-O Turkey Store operates in Willmar. The other is a newer facility, located on Willmar Avenue. The company said workers at the Benson Avenue plant will be transferred to the Willmar Avenue plant, and the production done at the closing plant will be consolidated into multiple other facilities within the company.

The closure and transfer of work is expected to occur during the first half of fiscal year 2022.

Pork:

 

2022 Outlook: Pork Industry Rises from the Rubble

The pork industry is still evolving out of the rubble of the coronavirus pandemic, says Lee Schulz, an economist at Iowa State University. But certainly, more optimism abounds in the U.S. pork outlook heading into 2022 than the industry experienced a year ago. 

“With the world in the throes of the COVID-19 pandemic, no one knew how things were going to fall out a year ago,” says Joe Kerns, president of Partners for Production Agriculture. “Who could blame us?”

Although the U.S. is still feeling the impact of COVID-19, it is not surprising us any longer, Kerns adds. 

“We are trying to understand the ramifications rather than having all kinds of questions in the air, specifically as it relates to the animal supply relative to shackle space,” Kerns says.

Economists believe pig farmers have every reason to be more confident going into 2022 so long as the U.S. can keep foreign animal diseases such as African swine fever (ASF) out of the country. 

Read full article here

 

Canada invests in pork industry expansion, ASF prevention

The Canadian government will invest CA$4.6 million (US$3.6 million) to expand the country’s pork industry and protect it from African swine fever (ASF).

More than CA$3.2 million will go to Canada Pork International to develop export market initiatives to maintain and improve access to international markets, and develop promotional activities and tools to increase market share in priority markets. More than CA$550,000 will support the Canadian Pork Council’s national marketing activities to increase domestic consumption and support international relationships and coordination across the value chain. These projects are supported under the federal AgriMarketing Program.

Read full article here

 

Beef:

 

Pasture to Plate: A Culture-Driven Beef Business

Kelsey Ducheneaux-Scott sat on her front porch, stared out across rolling pastures and thought, “What the hell did I do?” She had just heaved box after box into freezers in the living room, kitchen and laundry room — carefully dispensing 1,700 lb. of ground beef.

Exhausted from the haul (and hoping the circuits wouldn’t blow due to strategically placed freezers) Ducheneaux-Scott couldn’t believe the sheer amount of work before her. How was she going to sell so much grass-fed burger in three months, before her next butcher appointment? Anxiety and stress seeped in during that cold March night in 2020. Little did she know how quickly that product would move.

“COVID hit and there was no beef in any of our stores,” Ducheneaux-Scott recalls. “We sold out of that 1,700 lb. in a matter of three weeks. People realized how easily local grocery stores can be disrupted here in rural South Dakota.”

Read full article here

 

Peel: Cattle on Feed Dynamics

The December Cattle on Feed report showed November placements 103.6% of last year and marketings 105.3% of one year ago.  November had one more business day than 2021.  The December 1 on-feed total was 11.985 million head, down fractionally year over year at 99.6% of last year. 

The December report was well anticipated and should not provoke a large market reaction after the long holiday weekend.  December is the sixth consecutive month of year-over-year decreases in feedlot inventories, though the November and December totals were only slightly down from one year ago. The twelve-month average feedlot inventory continues to decline from the June peak but is declining very slowly.

Feedlot inventories have persisted well past the cyclical peak in cattle inventories.  The total cow herd (and the beef cow herd) inventory peaked on January 1, 2019, with the 2018 calf crop the largest of the current cattle cycle. Estimated feeder supplies declined from the 2019 peak to 2020 but decreased only slightly going into 2021. 

Read full article here

 

Dairy:

 

Expanding Income Opportunities without Expanding the Dairy

With ever-fluctuating milk prices, dairy farmers are continually re-evaluating the future of the farm. Pandemic times have added to an endless list of hurdles when it comes to adding cows and expanding in order to grow the business. With that, many dairies are looking towards other options to increase cash flow and create room for more family members on the farm.

Matt Kilgus of Kilgus Farmstead and Alise Sjostrom of Redhead Creamery share the trials and triumphs they’ve worked through to grow their businesses and expand their income opportunities. Kilgus Farmstead, located in Fairbury, IL, sells bottled milk from their 150-head Jersey herd, as well as a variety of meats raised on the farm. Redhead Creamery produces farmstead artisan cheeses in Brooten, MN, using milk from Jer-Lindy Farms, the family dairy.

Read full article here

 

Gillibrand wants to turn the tide on failed dairy reforms

All the dairy reforms over the last 10 years have had good intentions, but haven’t worked, shares Sen. Kirsten Gillibrand, D-N.Y. Now Gillibrand has a new bill that would require a hearing on the Federal Milk Marketing Order to hear firsthand from farmers the issues that need addressed. 

Changes dairy farms need have not been taken seriously enough within the farm bill writing process, says Gillibrand as she hopes to gain some much-needed momentum in addressing systemic shortfalls in the current federal milk marketing system ahead of the 2023 expiration of the farm bill. A new FMMO formula established in the 2018 Farm Bill has already cost $750 million in lost income to dairy producers nationwide.

Gillibrand joined Sens. Patrick Leahy, D-Vt., and Susan Collins, R-Maine, in introducing their bipartisan Dairy Pricing Opportunity Act, which would require the USDA to initiate the process of holding FMMO hearings within six months. This will allow producers and industry members to consider and review proposals that could change Class I skim milk pricing. Gillibrand says if USDA acts on its own to call for the hearings, farmers will wait too long for relief.

Read full article here

 

Miscellaneous:

 

Read full article here

 

Foresight for 2022: Watch These 4 Megatrends

You have two choices. As trends change, you can adapt your farm and capitalize on the opportunities, or you can stay the course and watch your business decline. “Today is the slowest rate of change we will experience,” says Jack Uldrich, a futurist and former naval intelligence officer. “Our world is not slowing down; the pandemic unexpectedly accelerated the future by five to 10 years.” What trends will shape the next year or five? Watch these areas.  

Read full article here

 

 

 

 

 

The information in this newsletter is intended to update our readers of current events.  Any third-party publications are presented for informational purposes only and the views presented in such publications are those of the respective authors.  The views therein are not necessarily representative of Aeros or any other CULTURA company’s views on any particular topic.