In The News This Month – October 2021

 

 

Editorial

October is often associated with Halloween activities and Fall Festivals. We usually think of pumpkins and much to many people’s annoyance… pumpkin spice everything! But did you know October is National Apple Month? We also celebrated National Farmers Day on October 12. Many observed this day by honoring farmers’ resilience and commitment to providing a high-quality product. Hopefully we all took a moment in October to thank our farmers for feeding the world.

Since we focus on all things scary this month, some of our featured headlines followed the theme. Corn losses could elicit quite the scare. Extreme weather slowed down harvest and the remaining crop is taking a beating. Average corn losses for 2021 are way above what farmers usually see. Global supply chain bottlenecks have many scared and frustrated. Nearly two years after the COVID-19 pandemic supply chain disruptions and labor shortages persist. Dan Kowalski, vice president of CoBank’s Knowledge Center, stated that global supply chain struggles are “arguably in the most dire condition since the start of the pandemic”.

Consumers saw terrifyingly high meat prices in October, and they are expected to continue to rise. Price projections point to a possible 20% increase in wholesale beef prices this year. Although the price hikes are scary, it can be an opportunity for the poultry industry. It seems like these days we are paying higher and higher prices for all our essential products. As we seek out cheaper options, is chicken the answer? While the price of poultry is rising, it is still one of the most affordable and widely available proteins.

Many of these frightening price hikes are being attributed to labor shortages. It’s scary to think we’re still talking about labor issues so close to the end of 2021. As employers seek to improve employee retention, some have turned to gamification. Collecting performance metrics through AI and turning them into personal scores could help incentivize workers in poultry processing. According to Dr. Jason Guss, CEO of Iterate Labs, “the goal of gamification is to engage with workers to inspire them to enjoy work and collaborate with their team”.

Robots taking over the world is a popular theme in some tacky horror flicks. However, robotics in egg production is becoming more and more popular. During the upcoming Poultry Tech Webinar Series, we can learn how a robot can actively sense and characterize bird status as it moves through the house. It will be interesting to see how robotics can streamline cage-free layer management. October brought us news of more egg producers investing in cage-free production. Aeros’ long-time customer, Cal-Maine recently approved a $23 million capital project to expand its cage-free production at a Florida facility. As they continue to invest in ways to address the growing demand of specialty and cage-free eggs, I wonder if the investment will include robotics for these locations.

As we leave the scary month of October behind us and enter November, plans for Thanksgiving dinners will take the forefront. Unfortunately, we are to expect higher prices and fewer options for whole turkeys this year. Perhaps some households will consider an entirely different menu for the holiday this year. Just remember to take some time to appreciate the joys of November, like pumpkin pies and stuffing. And, keep in mind, that soon all things pumpkin spice will be gone again.

 

Monica Lizar

Account Manager

Aeros, a Cultura Company

 

Feed and Grains:

 

 

It’s not Halloween but Corn Losses are Scary

Four inches of rain and 30 mph winds have pounded central Illinois corn, slowing harvest to a crawl. As of Monday, there was only about 25% of the crop left to bring out of the field, and it’s taking a beating.

“Harvest loss this season is definitely one for the record books,” says Ferrie, Farm Journal Field Agronomist and owner of Crop-Tech Consulting, Heyworth, Ill.

Ferrie likes to see farmers keep their corn harvest losses at or under 1.5 bu. per acre. Average losses for 2021 are way above that amount.

“This year the average is more like 7 bu. to 10 bu. on the ground, and we’ve measured as high as 30 bu. average yield loss in a field,” he says.

The combination of very dry corn, poor test weights, rubbery cobs and poor standability make it a challenge to control losses. As conditions deteriorate further, Ferrie says harvest teams will need to continue monitoring the crop and evaluating how to keep more of it – not an easy undertaking when it’s been flattened by rain and wind.

Ferrie says farmers can reduce their corn harvest losses by up to half by making some adjustments to their combines.

Read full article here

 

COMMODITY REPORT

 

WEEKLY COMMODITY REPORT: OCTOBER 22nd, 2021

• Commodity prices fluctuated over the past week but the Thursday October 21st CME quotations for corn and soybeans ended up 2.9 and 1.5 percent respectively compared to Thursday October 14 th.
• Factors influencing prices in either direction included:-
  • Restoration of operation of most terminals on the lower Mississippi following Hurricane Ida. Installations have been repaired and are unloading barges and loading bulk carriers. (moderate upward pressure)
  • Release of the October 8th WASDE that raised projected ending stocks of corn by 6.5 percent and by 73.0 percent for soybeans. (significant downward pressure);
  • Lower than anticipated export sales, especially to China (downward pressure);
  • Harvest advanced to almost half of the 2021 corn and soybean crops with higher yields consistent with forecasts by USDA and ProFarmer field evaluations. (moderate downward pressure);
  • Projections for new crop soybeans in Brazil indicate a potential record. (moderate downward pressure)
  • Restoration of shipments from Argentina albeit at lower than normal volume (moderate downward pressure)
  • Central Government of China authorizes buying cycle for soybeans as crush margins improve. (upward pressure)

Projected harvests and ending stocks in the U.S. will be finalized in the November WASDE since there will be almost complete clarity on quantities harvested the effect of trade on ending stocks.

U.S producers are now receiving and conversely livestock producers in the Midwest will pay above $5.30 per bushel for corn and crushers will pay $12.20 per bushel for soybeans plus transport and basis during the fourth week of October. Corn was up 2.9 percent this past week for December delivery. Soybeans were up 1.5 percent for November delivery. Soybean meal was up 3.2 percent for December delivery compared to last week reflecting the rise in the price of soybeans.

The FAS Export Report released on October 21st for the week ending October 14th reflecting market year 2021-2022, confirmed that outstanding export orders for corn for the new market year amounted to 24.4 million metric tons (961 million bushels) with 1.0 million metric tons (39 million bushels) actually shipped. During the past week orders for the 2021-2022 market year amounted to 1.27 million metric tons (50 million bushels). For market year 2022-2023 outstanding sales amounted to 0.34 million metric tons (13 million bushels) with negligible sales recorded this past week.

The FAS Export Report released on October 21st for the week ending October 14th reflecting market year 2021-2022 recorded outstanding export orders for soybeans amounting to 23.4 million metric tons (859 million bushels) with 2.2 million metric tons (81 million bushels) actually shipped. Weekly soybean orders attained 2.9 million metric tons (106 million bushels).

For the week ending October 14th 240,400 metric tons of soybean meal and cake were ordered for the market year 2021-2022, down 34.3 percent from the previous week. With restoration of operation of most lower Mississippi terminals after damage from Hurricane Ida, 216,500 metric tons of meal and cake was shipped this week representing the total for the marketing year to date.

The following quotations for delivery in the months as indicated were posted by the CME at 15H00 on October 24th 2021, compared with values posted at 14H00 on October 14th 2021:

COMMODITY
Corn (cents per bushel)	Dec. 532 (517)	March ‘22. 541 (526)
Soybeans (cents per bushel)	Nov. 1,223 (1,205)	March ’22. 1,242 (1,223)
Soybean meal ($ per ton)	Dec. 324 (314)	March ’22. 323 (317)

 

Year-to-date, escalation in the prices of major ingredients has added 2.1* cents per dozen eggs and 1.4* cents per live-weight lb. to broiler production cost

*(rounded to 0.1cent)

Read full article here

Robotics can streamline breeder, cage-free layer management

A ground-based autonomous robotic system is programmed to interact with chickens, allowing it to safely navigate the house environment without harming the chickens. 

During the second webinar in the Poultry Tech Webinar Series on November 4, 2021, Wayne Daley, Ph.D., Georgia Tech Research Institute will discuss how the robot can actively sense and characterize bird status as it moves through the house. 

Custom algorithms enable the robot to search the floor areas of breeder and aviary houses for floor eggs and dead birds. This robot is an intelligent system equipped with a suite of sensors including environmental sensors, 2D and 3D cameras and a small robotic arm.

Read full article here

 

Cal-Maine investing $23m on cage-free production in Florida

Cal-Maine Foods Inc. announced Oct. 25 that its board of directors has approved a $23 million capital project to expand the company’s cage-free egg production at its Okeechobee, Florida, production facility.

The project will include the construction of two cage-free layer houses and one cage-free pullet house with capacity for approximately 400,000 cage-free hens and 210,000 pullets, respectively. Construction will commence immediately with first pullet placements planned by mid-May 2022 and the first layer house finished by October 1, 2022, with the second layer house and project completion expected by February 1, 2023.

The company said it plans to fund the project through a combination of available cash on hand, investments and operating cash flow.

Read full article here

 

Egg Week

 

USDA Weekly Egg Price and Inventory Report, October 21st, 2021.

• Shell inventory was up by 2.1 percent, following four successive weekly rises reflecting continued oversupply relative to demand, consistent with the net addition of 0.4 million hens in the producing flock this week and a 6.2 million increase over ten weeks. Predictably prices are falling consistent with season and flock size. Midwest prices for generics are close to breakeven taking into account the combined costs of nest-run and for grading, packaging and delivery. Chains are spreading their purchases and are preempting anticipated price rises as a trend. It is possible that with a large National flock this strategy will suppress traditional pre-Christmas increases. Industry observers and participants expect buyers to adjust purchases only in response to retail demand and will hold down inventories in their DCs and stores. Since the beginning of 2021 generic eggs have been priced, with a few exceptions, at levels to maximize margins. This strategy has depressed the volume of sales to the disadvantage of the industry. Market data suggests that chains have priced generic white eggs in response to prevailing demand and are not featuring generic Large or Extra large.
• Currently inventory comprises close to five days of production. Price movement over the past nine months and specifically since Labor Day, defies conventional supply to demand relationships and indicates extraneous factors affecting price. Wholesale Midwest prices for Extra- large and Large were down this past week after sequential declines. This suggests that prices plateaued at the end of September and will continue to decline through October into early November. The commercial shell-egg price discovery system is obviously used by buyers to negotiate lower prices, serving as a self-fulfilling prophecy and a de facto instrument of potential indirect, but not necessarily intentional, collusion. The current relationship between producers and chain buyers based on a single price discovery system constitutes an impediment to a free market. The benchmark price amplifies both downward and upward swings and functions to the detriment of the industry. A CME quotation based on Midwest Large, responding to demand relative to supply would be more equitable.
• The U.S. flock in production was up 0.1 percent (0.4 million hens) from the week of October 13th to 316.4 million consistent with seasonal depletions but with about 2.0 million molted hens having resumed production during the past month. The Industry previously demonstrated beneficial restraint in flock placement with continued depletions and non-restocking of some complexes or houses. The trend going forward through October is for a build in numbers in November and December based on chick placement data for July and August. Margins will continue to decline for commodity eggs unless matched by increased demand as predicated by prevailing seasonal wholesale prices over the past five weeks.
• The USDA average Midwest benchmark prices for generic Extra Large and Large were down 6.1 and 6.2 percent respectively to averages of 92.5 and 90.5 cents per dozen. Mediums were unchanged at 77.5 cents per dozen. Second quarter prices reflected static demand, offset by decreases in the U.S. flock in production. The trajectory of prices through the first three weeks of October suggests a decline moving through the remainder of October as confirmed by the benchmark price discovery system. Margins going forward will be shaved despite stability in feed price but with higher chick, labor and fuel costs especially as unit revenue erodes.
• There is some prospect of a return of the food service sector with both frozen and dried-egg prices marginally higher over the past month. The economy is reopening with a recent decline in COVID incidence rates and hospitalizations in many regions. There is some optimism over the rate of deployment and acceptance of the three vaccines and boosters especially in rural areas and inner city zones. Reopening of the economy and schools in specific areas with low population immunity has resulted in persistence in the incidence rate of COVID. This is especially the case following the introduction and dissemination of the Delta variant of SARS-CoV-2 virus that is more infectious and possibly with higher pathogenicity than the alpha and beta strains especially among the non-immunized proportion of the population that represent an overwhelming majority of those hospitalized.
• The Midwest price for breaking stock was down 5.0 percent to an average of 60.5 cents per dozen. Checks in the Midwest were down 2.0 percent to an average of 49.5 cents per dozen. It is anticipated that these prices will fluctuate in response to market trends and gradual recovery of the breaking sector.

Read full article here

 

Poultry:

 

Poultry operations juggle sustainability, welfare and profit

The poultry industry is under increasing pressure to meet competing consumer priorities: sustainability, welfare and low-price.

“I think we’ve accepted that there is no absolute perfect solution in this. A great example of something that I’ve seen in the world of tradeoffs is around antibiotic-free,” Gavin Hodgson, Buying Manager, Meat, Fish & Poultry, Sainsbury’s, said.

In recent years, a growing number of poultry producers have pledged to go antibiotic-free in response to consumer concerns about the rise in antibiotic-resistant bacteria. In addition, the U.S. Department of Agriculture (USDA) requires that all poultry raised for food be hormone-free.

Regardless of the requirement, some brands choose to prominently label and market their products as antibiotic free.

“A big concern for me is that we could see a situation where a farmer got paid a premium for what is deemed an antibiotic free product and the bird could still be lame, which has a negative impact on animal welfare overall,” Hodgson noted. 

“You can see very quickly how something that sounds like a good marketing idea can have an adverse effect at the farm level.”

Read full article here 

 

Soaring meat prices are an opportunity for chicken

From the grocer to the gas pump, Americans are paying high prices. Continued inflationary pressure could push consumers toward poultry.

A combination of supply chain snarls, COVID-19 pandemic related shortages, natural disasters, a deficit of workers and plain bad luck are causing consumers to pay a higher price on staples.

The Consumer Price Index increased by 5.4 percent in September 2021, according to the Bureau of Labor Statistics. Overall, consumers are paying 5.4% more for essential products than they did at the same time last year. The price of meat, poultry, fish and eggs increased by 10.5% during that same time.

In a WATT Poultry Chat interview, Mark Jordan, executive director of LEAP Market Analytics, examined both the poultry and competing proteins markets and concluded supplies are tight across the board. There are no clear signs supplies will significantly increase any time soon, either.

Read full article here 

 

Gamification could reduce poultry processing labor turnover

Individual metrics are turned into personal scores to track an employee’s performance and goals.

Collecting performance metrics through artificial intelligence could help incentivize workers in poultry processing and better manage productivity in real-time, improving employee retention.

“By connecting work activities into scores, and tracking those to rewards, growth and competition, we are adding game mechanics into nongame environments to increase the participation of the workforce. The goal of gamification is to engage with workers to inspire them to enjoy work and collaborate with their team,” Dr. Jason Guss, CEO of Iterate Labs, explained.

Guss is one of the many experts scheduled to speak during the Poultry Tech Webinar Series, scheduled for November 2, 4, 10, 11, 17, 30 and December 2. This one-of-a-kind series explores innovation technologies from researchers and entrepreneurs that could transform the poultry industry.

This webinar series is proudly sponsored by: Arm & Hammer, Aviagen, Baader, Boehringer Ingelheim, Cargill, Ceva, Chore-Time, Cobb, Evonik, Marel, Phibro Animal Health, Staubli, and Zoetis.

Register for free today and join us for a glimpse at the future of the poultry industry.

Read full article here 

Expect higher prices, fewer options on Thanksgiving turkeys

Consumers can expect higher prices and fewer options for whole turkeys leading into this Thanksgiving, according to a Texas A&M AgriLife Extension Service expert.

David Anderson, Ph.D., AgriLife Extension livestock economist, said turkey production was down 5% compared to last year, but prices have risen significantly. Fewer turkeys combined with higher food supply chain and logistical costs like feed, fuel and labor have pushed prices upward.

The national wholesale average for whole hens is $1.35 per pound compared to $1.14 per pound this time last year, Anderson said. The five-year average per-pound price is $1.06 for those turkeys.

Read full article here

 

Turkey Week

 

Weekly Turkey Production and Prices October 25th 2021

Poult Production and Placement:

The October 15th 2021 edition of the USDA Turkey Hatchery Report, issued monthly, documented 27.1 million eggs in incubators on October 1st 2021 (25.6 million eggs on September1st 2021*) and down 0.9 percent (0.24 million eggs) from October 1st 2020.

A total of 21.2 million poults were hatched during September 2021 (21.8 million in August 2021*), representing a decrease of 1.0 percent (186,000 poults) from September 2020.

A total of 19.3 million poults were placed on farms in the U.S. in September 2021, (21.8 million in August 2021*), 11.1 percent (2.4 million poults) less than in September 2020. This suggests disposal of 1.9 million poults during the month (0.3 million in August 2021). Based on the proportion of 45 percent hens to 55 percent toms processed year-to-date it is calculated that 0.9 million tom poults representing 4.3 percent of September hatch and 1.0 million hen poults representing 4.7 percent of September hatch were not placed in the month.

Pork:

 

Supply and demand help maintain strong pork values.  Labor issues, plant disruptions leading to reduced pork production.

Limited labor availability and plant disruptions due to operational issues contributed to a 3.6% year-over-year (YOY) decline in September pork production, according to Rabobank’s recently released Agribusiness Review.

At the current pace and given projected holiday slaughter, Rabobank expects a slightly larger 2% YOY drop in 2021 pork production. For 2022, the bank expects hog supplies will remain constrained during the first quarter but will gradually improve.

Analysts for the bank reported that while pork carcass values have declined from the previous season, they still remain 17% ahead of year-ago levels, at $1.08/lb., on strong belly and ham values remain supportive. Belly prices are up 28% YOY due to strong foodservice demand for bacon and very low cold storage inventories. Ham values are also higher because of strong demand but also because of labor issues at deboning facilities, they said.

Read full article here

 

Risk assessment models US risk of ASF introduction in feed

Researchers develop model to estimate probability of importing ASF-contaminated feed ingredients

Evidence suggests African swine fever virus (ASFV) may survive under conditions similar to those observed in transoceanic transport models. In a Swine Health Information Center (SHIC)-funded study, researchers developed a quantitative risk assessment model to estimate the probability that one or more corn or soybean meal ocean vessels contaminated with ASFV would be imported into the U.S. annually.

Ultimately, this model can be used to evaluate risk mitigation strategies and critical control points for inactivating ASFV during feed ingredient processing, storage and transport, and contribute to the design and implementation of biosecurity measures to prevent the introduction of ASFV into the U.S. and other ASFV-free countries.

Read full article here

 

Beef:

 

Cattle market consensus still eludes Congress

Congress continues to look for ways to address the growing disparities between cattle prices paid to producers while consumers see continued increases in beef prices. Discussion has increased over the past year; however, no clear consensus can be found as warnings against one-size-fits all approaches offer the only thing different segments of the industry agree on.

And now the clock is ticking again. Last year Congress extended for one year the reauthorization of Livestock Mandatory Reporting, and just recently Congress again punted action until December 3. LMR offers a vehicle for changes going forward if desired. But finding middle ground remains difficult.

Read full article here

 

Dairy:

 

Modern-day dairy crisis facing industry

Between 2003 and 2020 there has been a 55% decrease in the number of dairy farms operating nationwide. Dairy farmers are facing rising costs of production and current dairy prices aren’t covering them. Congress is trying to determine the level of government invention needed to prevent a further exodus of dairy farmers.

“We are in the midst of a modern-day dairy crisis,” shares Sen. Kirsten Gillibrand, D-N.Y. in opening up a Senate Agriculture Committee hearing Sept. 15 on the volatile milk price and federal milk marketing system.

Read full article here

 

Here are the Factors that Could Support or Mute Milk Prices into 2022

As dairy producers across the country wade through higher costs, export demand continues to be the bright spot in the dairy industry this year.

“Dairy exports have, in fact, been a big reason for the rise in Class IV prices,” says Mike North of ever.ag, who will be featured on a live taping of U.S. Farm Report during World Dairy Expo next week. “The rising export of butter to Canada along with the ongoing demand for powders have worked in conjuction to add value to a space that was embattled by COVID issues.  If world economies stay in recovery mode, there is a lot of opportunity here.”

Read full article here

 

Miscellaneous:

 

Read full article here

 

Americans freezing food at record rates

Americans have been freezing food at record rates these past two years, with a majority of people across the country (55%) saying they bought a second or even third freezer to house all the extra frozen food.

A recent survey of 2,000 people across America revealed that some of the most common foods in freezers are vegetables, soups and sauces. And close to a third reported feeling “stressed,” “uneasy,” or “surprised” when they open their freezer and see all the unused food; one-half say they have to waste their frozen food because they forget about it.

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.