In The News Week – March 4, 2021




In some ways it feels like the last year would never end, but at the same time it is hard to believe that it was only one year ago that the U.S. was facing the beginning of the global pandemic. A year ago, the Aeros Newsletter was mostly filled with a lot of despondency and pessimism. Cattle not going to slaughter, hogs backing up and being euthanized, empty shelves at the grocery stores, and state-wide lockdowns to name a few. While we are still fighting the effects of this pandemic, we can now see some positiveness in the world and really understand the resilience of all the protein industries. A common theme throughout the news lately is centered around change and adaptability.

Parts of the U.S. just saw some extreme weather conditions that forced many businesses to take severe measures, but as temperatures began to rise last week, thankfully some millers stated that “things could have been a lot worse”. Weather conditions aside, some feel things can get worse for the economy as the minimum wage discussion started to take center stage in the news. Would a federal $15 an hour minimum wage mean a reduction in the workforce for the poultry industry? If rising wages do reduce the number of employees, this could open the door for more automated positions in the plant, but is the chicken industry ready for this? There is a lot of talk about digitization and streamlining operations, however this might be too much change for the ag industry. They have been slow to leverage big data and the internet of things, but this type of change is what will give us the ability to make the supply chain more transparent for consumers. Transparency in the food supply chain is one big change from the pandemic that consumers will continue to demand.

Change can be viewed as a disruption, but as you read some thoughts below from a recent article featured in WATTPoultry, remember that disruptive times require a new way of planning. Embracing change and planning for it can be the key to remaining relevant. If you are not thinking about disrupting your business someone else probably is. We should take a lesson from our children because throughout this pandemic they have been resilient and truly adaptable to change. As schools began to open in California, I had a front row seat to their resiliency. Watching your child, after a year at home, walk to their classroom wearing a mask, wait in line to get their temperature taken, remain 6 feet apart from their friends and still come home exclaiming that it was a great day has given me a new perspective on adapting to change.


Monica Lizar

Account Manager

Aeros, a Cultura Company





Feed and Grains:

US grain traffic improves as temperatures climb

As thermometers began to elevate late last week across the US Upper Midwest, northern and southern Plains and most of the Central states, the grain transportation logistics picture improved.

While a mid-February extended cold snap spurred conversations about potential winterkill damage to dormant winter wheat crops, grain market participants focused more on nearby logistical concerns. 

Temperatures hit a record-low -9 degrees in Kansas City on Feb. 16 and thermometers in nearby Lawrence, Kansas, US, fell to -17. Cold weather slowed movements of grain trains, at times to a standstill, due to the effects on locomotive power and rail car air brakes. Snow and ice stymied truck traffic in the Central states and Northeast, but especially in the southern Plains of northern Texas where trucks aren’t typically tuned for ultra-cold weather.

By the weekend of Feb. 19-21, overnight low temperatures had risen steadily into the 20-30 degree range from the Canadian border down to central Texas. At mid-morning Feb. 22, storm activity was limited to snowfall from Washington along the eastern seaboard to western Maine, including most of Pennsylvania and upstate New York.  Moderate to heavy rainfall was lashing the Appalachian states and scattered parts of Florida, Georgia, and the Carolinas.

Grain trains were flowing more regularly again by Feb. 19, brokers and millers said, and supplies were arriving after 24- to 36-hour delays.  “It could have been a lot worse,” a miller said.

As a considerable number of rail cars had earlier been placed at country origins in eastern Colorado and western Kansas, loading for contract applications or spot market offerings were expected to break open early this week.

Meanwhile Class 1 railroads told market participants to expect extreme congestion and lengthy delay times through Kansas City, Missouri, US; St. Louis, Missouri, US; and Chicago, Illinois, US, gateways.

Millers did not see evidence of gateway congestion by Feb. 19. But if cars loaded and sitting on tracks last week were to hit gateways simultaneously, congestion could develop this week or beyond.

“Where there are a bunch of empties on one end and loads on another end sitting, waiting to be pulled, and they all try to catch up at once, that could be a problem,” a merchandiser said.

Read full article here


GPC completes distillery expansion in Iowa

Grain Processing Corp. (GPC), a member of the Kent Corp. family of companies, announced on Feb. 22 that it has completed the expansion of its distillery in Muscatine, Iowa, US, giving the company the ability to produce significantly more high-quality alcohol.

Since the start of the COVID-19 pandemic, GPC has supported the manufacture of millions of gallons of ethyl alcohol to support the production of essential products in the fight against COVID-19, including hand sanitizers, disinfectants, and cleaners and surfactants, and in the manufacture of active pharma ingredients, vaccine components and COVID-19 testing reagents.

Originally announced in May 2015, the multi-year, multi-million-dollar capital investment and expansion took thousands of engineering hours and leveraged the expertise of GPC’s workforce to increase the amount of value-added ingredients made from the kernel of corn, the company said.

“To produce alcohol to 1 ppm or less total impurities, there are no short cuts,” said Pat Homoelle, president of GPC. “Our world-class quality sets us apart and is recognized by our trusted partners who depend upon us to consistently craft gallon after gallon for a range of products from beverage alcohol to pharmaceutical-grade applications.”

Read full article here


USDA forecasts record US ag exports for 2021

The US Department of Agriculture on Feb. 18 forecast the value of US agricultural exports in fiscal year 2021 at a record $157 billion, up $5 billion from its November projection. The USDA said the hike was driven by higher oilseed and grain export forecasts.

Fiscal year 2021 soybean exports were forecast at a record $27.4 billion, $1.1 billion higher than in November, due to strong demand from China and higher prices. The value of soybean exports in fiscal year 2020 totaled $17.87 billion.

The value of corn exports in fiscal year 2021 was projected at $14 billion, up $800 million from the November forecast and compared with $8.21 billion in fiscal year 2020. In the case of corn exports for fiscal year 2021, the USDA said higher unit values more than offset slightly lower volumes when compared with the November outlook.

Read full article here



Cage-free legislation is a logistical nightmare for retailers

As states continue to pass bills and legislation requiring the sales of only cage-free eggs, supermarkets will be challenged logistically.

It should come as no surprise that New Mexico Senate Bill 347 has been introduced to force cage-free egg production and the sales of cage-free produced eggs. It is called the “Confinement of Egg-Laying Hens Act.” New Mexico is following in the path of other states, including neighboring Colorado, which is part of the Humane Society of the United States (HSUS) mission to create laws enforcing cage-free production in much of the western U.S.

The United Egg Producers has been aware of the HSUS agenda and has shared it with the industry on several different occasions. Utah is also in the process of negotiating cage-free egg legislation amongst government officials, animal welfare groups and the state’s egg producers.

New Mexico is unique in that there are no egg producers in the state, so this seems to be an independent effort from HSUS and a few key legislators within the state to make sure that supermarkets/retailers can only sell cage-free eggs.

HSUS is not looking at cage-free legislation from a producer perspective but rather how can they make sure that millions of people are forced to purchase cage-free eggs.

Read full article here


Egg Week

USDA Weekly Egg Price and Inventory Report, February 18, 2021.

  • Shell inventory was up by 0.3 percent after a 5.4 percent increase last week. This confirms transitory balance between demand and supply with implications for prices extending through the remainder of February, given the reality that the retail pipeline is full as buyers purchased ahead of the winter blizzard. It is noted that a large number of molted hens are returning to production. Prices stabilized this past week but will fall if oversupply contributes to excess inventory, or conversely will rise if egg supplies and distribution are seriously impacted by weather conditions in Texas and southeast states. There is little evidence of a return in the food service sector as liquid and dried-egg prices are stable and reopening of the economy is slow consistent with a decrease in COVID-19 incidence rates in many regions coupled with more rapid deployment of vaccine.
  • The U.S. flock in production was up 0.1 million from the week of February 10th to 316.7 million, with about 3 million molted hens resuming production within weeks.
  • The USDA average Midwest benchmark generic prices for Extra-large and Large sizes were down 10.2 percent from the previous week to 114.5 and 112.5 cents per dozen. Mediums were down 2.6 percent to an average of 92.0 cents per dozen. During the previous four weeks Midwest prices were higher, tracking the three-year average, following four previous weeks of lagging both the corresponding weeks in 2019 and the three-year average. The recent price increases reflect increased demand with a moderate decrease in the U.S. flock in production. Imbalance between weekly demand and the availability from shell egg production coupled with diversion from the liquid sector will depress prices during early Lent.
  • The Midwest price of breaking stock was unchanged at an average of 41.5 cents per dozen. Checks in the Midwest were 1.5 percent higher to 33.0 cents per dozen.

Read full article here 



Higher wages, less workers?

A $15 an hour minimum wage is in discussion in the U.S. What would it mean for the chicken industry?

The political push:  President Joe Biden’s administration is aiming to raise the federal minimum wage to $15 an hour, nearly twice the current $7.25 an hour set in 2009. His plan would raise the rate gradually until 2025 and make the U.S. minimum wage one of the highest in the world.

In February 2021, the Congressional Budget Office said this proposal would increase wages for about 27 million workers while reducing total employment by 1.4 million. Proponents of raising the wage say it would lift millions out of poverty. Opponents say it will reduce the number of jobs available for low-wage employees and raise the cost of goods.

It’s unclear whether the provision will pass through Congress. Nevertheless, opinion polling shows roughly two-thirds of Americans support raising the wage. Twenty-nine states already require workers be paid more than the federal minimum wage and some – most notably California – are already on a path toward $15 an hour.

Impact on the chicken industry:  Raising wages would likely reduce the number of total employees in poultry processing and will certainly provide greater financial incentive for processors to automate positions in the plant.

Due to the nature of the work, processors must pay a premium for low-skilled labor. The average hourly wage of the chicken processing industry, according to’s salary data, is about $13.71. If wages are raised nationally, processors need to significantly increase wages, too.

Read full article here 


Lack of digitization slows big data adoption in ag

Big data could transform and streamline poultry operations, but first the poultry industry will have to overcome significant challenges to digitization.

“There is a lot of talk about Supply Chain 4.0 as part of what has been characterized as Industry 4.0. This vision of the future includes leveraging big data, artificial intelligence and the Internet of Things (IoT) to connect the entire food supply chain,” Shari Rogge-Fidler, CEO of the Farm Foundation, explained during the U.S. Department of Agriculture’s Agricultural Outlook Forum.

The promise of big data:  One of the largest potential benefits of leveraging big data in food production is the ability to make the supply chain more transparent for consumers.

According to a recent food industry report, 80% of shoppers rank transparency as important or extremely important, especially regarding food safety and origin purposes.

“At the manufacturer or processor level, Supply Chain 4.0 enables traceability for food safety and validation of sustainability goals, as well as collaboration across the supply chain. For distributors and food retailers, the benefits include the ability to predict demand and supply better or increased efficiency and reduction in waste,” Rogge-Fidler said.

“The question remains though how much of this digitized information consumers actually will use, who will translate it for consumers and how it will be valued at an economic level.”

Read full article here



4 states hate turkey bacon? Say it ain’t so!

A report was recently released that stated turkey bacon was the most hated food in four U.S. states.  I know. I couldn’t quite figure that out, either. I love bacon of all sorts, especially turkey bacon.

Zippia, a website that analyzes public data sets, somehow deduced that turkey bacon is the most hated food in Rhode Island, Colorado, Wyoming, and Alaska. In explaining how that conclusion was reached, it took a list of 40 “controversial foods that make a good chunk of the population go ‘gross.’”

It didn’t say how turkey bacon even made that list of 40, but it did state that certain foods that are primarily regional, were not considered.

Once those 40 “gross” foods were identified, Zippia turned to Google Search Trends to find which of the “hateable” foods each state searched the least. Somehow, Zippia equated a lack of Google searches for recipes and opportunities to buy that food to hatred.

Read full article here



Record pork, beef, broiler production forecast for 2021

The December quarterly hogs and pigs report estimated all hogs and pigs at 77.5 million pounds, which was down 1% from the previous year. And the breeding curve was estimated at 6.3 million head, down 3% from 2019, Herron says. Producers indicated they were planning to farrow approximately 2.4% more in the February quarter, but they also indicated they were planning to farrow approximately 1% fewer in the March/May period.

“We have seen pigs per litter continue to increase going forward, and we anticipate that trend to continue in the quarters ahead. So, the expectations of larger pig crop and increases and growth in pigs per litter is anticipated to support higher pork production for 2021, USDA is forecasting pork production at 28.7 billion pounds. That’s up approximately 1.4% relative to 2020,” says Herron.

Pork exports are lower in 2021, says Herron after seeing a surge in 2019 and into 2020 from China due to African swine flu shortages. “As we moved into 2021, and China has been working to rebuild their herd, building their sow inventories, we anticipate their demand for U.S. pork will pull back somewhat, therefore, we’re anticipating exports to be approximately 1.5% lower in 2021 relative to the previous year,” she says.

However, export growth in other key markets such as Mexico, Canada, and Japan (and to a lesser degree several Latin American countries) are expected to partially offset declines from China. Pork imports for 2021 are forecast at 0.9 billion pounds, up 4.5% from 2020.

U.S. hog prices, on a national base, 51%-52% lean, live equivalent, are forecast to average $50.50 per cwt for 2021, higher than last year’s price by nearly 17%. Despite higher hog slaughter expectations, firm demand will support higher prices.

Read full article here


Tyson CEO: It’s too difficult to predict ASF recovery

China is rebuilding its herds, CEO Dean Banks says, but ASF situation in Vietnam, Germany and other countries is also a factor.  While China is rebuilding its swine herds after the African swine fever (ASF) virus decimated the pig population in the country, it is difficult to discern when global pork prices will normalize, Tyson Foods CEO Dean Banks said.

Tyson Foods, a diversified producer of pork and other proteins, reported its financial results for the first quarter of fiscal year 2021 on February 12. The company’s pork segment saw a year-over-year decline in its operating income for the quarter, sliding from US$191 million to US$116 million. It attributed those declines largely to a temporary idling of one of its pork plants due to a mechanical malfunction and production inefficiencies and direct incremental expenses related to the COVID-19 pandemic.

Read full article here


2021 Change Drivers: African Swine Fever, COVID-19 Top the List

African swine fever (ASF) and COVID-19 pressures continue to lead the pack as the major change drivers in the 2021 global pork market.  “While ASF continues to impact pork production in Asia and Europe, as well as global trade flows, COVID-19 continues to impact the whole supply chain, though demand is expected to rebound in most regions in 2021 due to economic recovery,” the RaboResearch team at Rabobank said in its Pork Quarterly report.

Here’s a look at the key issues RaboRank analysts are keeping a close watch on in the year ahead.

ASF Concerns Linger in Global Markets
Throughout 2020, China and Vietnam were constantly hit by ASF outbreaks and continue to face challenges with this deadly virus of pigs. Unfortunately, 2021 isn’t off to a better start. This winter, new strains of the ASF virus have been discovered in China, slowing the restocking pace and causing prices to stay high. However, Rabobank notes the herd loss is considerably smaller and culling of whole farm herds is rare. 

“Large-scale farms have gained experience in managing the disease, diagnosing ASF as early as possible and culling only a small number of hogs as a result,” Rabobank analysts said. “While ASF remains the top threat for the country’s farming sector, restocking will proceed rapidly in 2021 in our view, driven by large-scale players.”

Meanwhile in Vietnam, the total number of outbreaks reported is over 1,330 cases, highlighting the seriousness of the situation. Similar to China, the impact of the virus has declined in recent months due to large-sized farms implementing good biosecurity to manage disease risks better. 

“The Vietnamese government is speeding up the assessment of ASF vaccines and set the goal to move to commercial production, likely in Q2 2021,” Rabobank analysts said. “The experimental research has had successful results. If the commercial use can be successful too, this will become a game changer, increasing the restocking speed and shortening the herd recovery time.”

Germany’s ASF outbreaks are currently located in four distinct core zones in the states of Brandenburg and Saxony. Experts believe the risk of the virus spreading to commercial farms remains low due to tight biosecurity measures at pig farms and low commercial farm density in these parts of the country. Still, Rabobank reports that disease pressures from western Poland continues as the numbers rise in cases of ASF in wild boars. 

Germany has been able to redirect its export flows, with only a minor decline in total exports in November 2020, according to the report. ASF challenges in eastern European countries and higher pig carcass prices offer opportunities for Germany to increase its exports. However, Rabobank notes that margins are probably lower in these countries due to lower retail prices and a more fragmented market structure which makes marketing larger volumes more difficult.

“We expect continuing downward pressure on German and EU pig prices in Q1 2021, as trade remains restricted and backlogs at German pig farms are still significant, creating ample supply in the EU,” Rabobank said. “German pig farmers are reportedly waiting to restock their farms to reduce supply.”

Read full article here



Would idle poultry processing capacity be worth it?

Extra capacity would prevent future supply chain backups but finding a way to finance that capacity is an issue that needs to be addressed. While the meat and poultry industry’s operating model of just-in-time production has historically been very efficient, the COVID-19 pandemic exposed how disruptive events could disrupt the supply chain and force producers to make tough decisions regarding their animals that are ready for slaughter.

John Newton, chief economist for the American Farm Bureau Federation, explored the possibility of having idle processing capacity on hand in case future disruptive events should occur. Newton spoke at the U.S. Department of Agriculture’s Agricultural Outlook Forum on February 18.

In the early stages of the pandemic, outbreaks among processing workers led to high worker absenteeism and prompted some plants to idle operations, which ultimately backed up the supply chain.

“During the spring, we had major disruptions in our beef processing, our pork processing, and our poultry processing. At one point in time, beef production was down more than 30% compared to prior levels,” said Newton. It was a similar situation with the pork industry.

To prevent such a hardship from occurring again, Newton said the agrifood industry needs to look at ways to be “more flexible, more nimble in the future.”

Read full article here


Weather challenges beef markets

Before this week I did not think it was possible for it to get as cold as it did in my corner of Nebraska. My daughter is excited we had record lows because as she sees it, she lived through history. I have some difficulty adjusting my attitude to be as good as hers. Maybe our Canadian friends have rubbed off on her a bit. While we were all trying to get through this thing the Canadians played the world’s longest hockey game for charity, with the temp getting to -67 degrees F.

A group of people that I feel deserve some recognition are the sale barn cowboys. Most auctions were cancelled again this week. However, some places did open just for weigh cows and bulls since the packers were needing stock. Most of these guys have stock at home to take care of before and after the sale. It makes for a long day when the weather is decent. It’s a really tough day in weather like we had.

With so many sales being cancelled again this week, and the runs being light at most places that did have sales I don’t have much market information this week. This week the markets were more consistent than last week and that helps to identify relationships between weights.

This week flyweight cattle were under-valued. The value of gain stayed mostly positive, or higher than the cost of gain up to five weights. From there on the VOG tapers off. Seven weights had a small spike in VOG. For that weight of animal at different auctions it was either just over or just under the COG.

This week some non-hormone treated cattle caught a $5 premium, and replacement quality heifers caught a premium of $5 to $12.

Read full article here



Plan for disruption in a disruptive age

The recent Poultry Tech Summit again highlighted the impressive progress of the past 50 years, yet that progress may be dwarfed by upcoming disruptions.

As Paul Aho said, we have been sent through a vortex to the year 2030, that is the pandemic and its consequences forced changes in 10 weeks that otherwise would have taken 10 years. Zoom calls and the use of digital technologies in food production are the classic examples of this.

Coping with disruption

How should a poultry business, or a business planning to service the poultry industry in 2021, cope with such disruption?

Learning from other business is instructive. Airbnb disrupted the hotel business. Uber the taxis. Google the way we find answers to questions, directions. Movie houses were disrupted and now feel so threatened by Netflix they want to ban them from the Oscars.

So, will the same thing happen to our poultry industry? Is our industry going to be disrupted and by whom? ‘Fake’ meats produced on a petri dish or with texturized vegetable proteins? Robots in processing plants or houses? Blockchain? Cameras? Disruptive times require a new way of planning.

Read full article here


Crop Progress – State Stories

This report is released on or near the first Tuesday of the month in December, January, February, and March. The report includes weather and crop summaries for 44 states and New England area. This full-text file lists an assessment of winter weather on crops, livestock, fruit trees; consideration for moisture, snow cover, temperatures, and crop condition; and the effect of weather, insects, diseases, etc., on crops and livestock.

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.