H5N6 avian influenza concerns high in Southeast Asia

A recently-emerged strain of avian influenza virus in poultry in Southeast Asia known as H5N6 represents a new threat to animal health and livelihoods and must be closely monitored, the United Nations Food and Agriculture Organization (FAO) said September 22.
Chinese authorities first reported the H5N6 virus in poultry in April 2014. Since then, the Lao People's Democratic Republic and Vietnam have also detected the H5N6 virus in poultry.
"Influenza viruses are constantly mixing and recombining to form new threats," said FAO Chief Veterinary Officer Juan Lubroth. "However, H5N6 is particularly worrisome, since it has been detected in several places so far from one another, and because it is so highly pathogenic, meaning infected poultry quickly become sick and, within 72 hours, death rates are very high."
The fact that the virus is highly virulent in chickens and geese and potentially spread across a large part of Southeast Asia translates into a real threat to poultry-related livelihoods. Poultry contributes to the incomes of hundreds of millions of people throughout the sub-region.
The World Organisation for Animal Health (OIE), which works together with FAO and the World Health Organization (WHO) to support countries' responses to animal and human disease threats, is also monitoring the situation closely.
"An effective surveillance and an early detection of animal disease at source are two main keys to reduce the risk of dissemination and to ensure safe trade. The OIE calls on its 180 member countries to respect their commitment and to immediately notify on WAHIS any outbreak detected on their territory," said OIE Director-General Bernard Vallat.
Limited threat to human health
Only one case of H5N6 has been reported in humans after contact with exposure to poultry shortly after its detection in China. The person later died. There have been no other human cases.  Though the scientific community is still in the process of understanding the dynamics of this new strain, it is unlikely that H5N6 represents an immediate and significant threat to human health.
"Current evidence suggests H5N6 poses a limited threat to human health at this stage," said WHO epidemiologist Elizabeth Mumford. "It's been detected in multiple places in poultry, yet we only have one human infection reported. This suggests that the virus does not easily jump from animals to humans. Of course, we still need to remain vigilant, because prevalence in poultry and therefore human exposure could increase during the winter."
Even if the public health risks posed by H5N6 currently appears to be low, other pathogens, including other subtypes of influenza viruses such as H5N1 and H7N9, still can present cause for concern. FAO and WHO recommend consumers follow appropriate hygiene, food preparation and food safety guidelines. These include: washing hands often, cleaning utensils and surfaces used during food preparation, and eating only well-cooked poultry meat products. People should also avoid handling sick birds or those that have died of illness.
FAO and WHO are stressing that at this time it is critical for countries in Southeast and East Asia -- especially those with links to poultry production and trade -- to ramp up efforts to detect and report influenza viruses in poultry and monitor for any human infections.
All human infections with non-seasonal influenza viruses are reportable under the 2005 WHO International Health Regulations. It is critical that influenza viruses from animals and people are fully characterized in appropriate animal or human health influenza reference laboratories.
FAO urges continued vigilance, preparedness
An H5N6 outbreak or outbreaks could potentially overwhelm animal health systems in Southeast Asia. An earlier strain of the virus, H5N1, has already impacted the livelihoods of millions of people and caused billions of dollars of damage.
FAO is urging countries to remain vigilant in the face of this new viral threat to animal health. In order to prevent its further spread, the Organization is recommending that governments support poultry producers in following essential biosecurity measures and standard hygiene precautions. In collaboration with OIE, priority actions need to be focused on prevention, early detection, immediate reporting and rapid response.
FAO influenza programs have been supporting preparedness in countries throughout Asia and the world since 2004. With resources for this work dwindling, the Organization continues to call for funds to ensure international and regional cooperation and strengthen the global response to avian influenza as a threat to animal health, public health and vulnerable livelihoods.

Feed additives have largest share of animal health care market

Persistence Market Research has released a new market report, “Global Market Study on Animal Healthcare: Feed Additives to Witness Highest Growth by 2019,” showing the global animal health care market was valued at $27,861.2 million in 2013 and is expected to grow at a CAGR of 7.1 percent from 2014 to 2019, to reach an estimated value of $41,929.1 million in 2019.
Increasing population of companion and production animals is driving the global animal health care market.
The new types of diseases in animals and their transfer to humans via their product consumption and companionship are escalating the animal health care market globally. However, some challenges in the form of regulations have emerged against the excess use of antibiotics in production animals, and legislations and protest of animal activists and institutions against animal research.
The animal health care market is very competitive, with the top 10 players accounting for about three-fourths of the market. The companies are focusing on their research and development activities to produce better pharmaceutical and vaccine products for the existing and newly diagnosed diseases.
Increasing per-capita income level, changing lifestyle, and growing population has increased global meat consumption.
The number of animal farms is also increasing globally due to increasing demand for protein rich food such as meat, eggs and milk. The health care expenditure in such farms has been increasing, due to the growth in animal numbers in the farms and increasing concern for their health.
Feed additives had the largest share among the product segments in the animal health care market. The other two segments included pharmaceuticals and vaccines. While the feed additives market is growing mainly due to the increasing production of animal population, the pharmaceuticals and vaccines segments are being driven by the increasing incidence of animal diseases and increasing concern for animal immunization against diseases.

How ethanol, DDGS may affect the 2014 US corn crop

Ethanol is no longer in a growth phase. Sure, exports offer strong potential for profitability going forward, but we don’t see new plants being built. We also believe there are too many politics involved for greater use of corn to become realistic, or at least that would matter for the 2014 crop. And, we can’t determine if the ethanol producers even want E15 as it might trigger new plants, increased production and reduced market share for existing plants.
Developments in the DDGS market
In the meantime, there is a development worth watching that is slightly more negative than positive for corn prices. As the ethanol industry starts to make ethanol from this corn crop, dried distillers grains with solubles (DDGS) supplies might weigh on the corn market because the trade dilemma with China was never resolved last summer.
In the U.S., in 2013 and 2014 there has been less DDGS consumed by all livestock after the drought of 2012 and $8 corn, because corn is trending lower and is cheaper. We anticipate this trend to continue in 2015 as the high-quality crop being harvested should make better feed than the inclusion of DDGS. Some livestock operations that are regionally close to an ethanol plant and therefore have transportation advantages will still use DDGS.
We expect domestic livestock to shift to a more traditional feed ration: More corn, soybean meal and less DDGS. If we are correct, then a greater need for DDGS to be exported opens up, and history shows us that China can account for 50 percent of DDGS exports.
DDGS exports are a delicate matter when applying the overall balance of fundamental factors applied to the price of corn. In other words, farmers and ethanol producers really need this issue to be resolved so we can ship/export DDGS to China. DDGS is not exactly a perishable commodity, but it is a commodity that requires constant movement of product. The worst case scenario would be a backup of DDGS with nowhere to go. Mexico will most likely have the opportunity to step up its use of this feed commodity, but for a price-neutral balance to occur, we need China to remain a stable and consistent DDGS buyer.
Backing up a supply of any product or commodity is never a good thing, and the readers of nearly all of the WATT publications have likely experienced that in their careers.

Slovenia’s Perutnina Ptuj considers sale

Slovenian poultry and meat producer Perutnina Ptuj is considering a sale that could value the company as high as EUR140 million (US$181.44 million), according to sources. The company comprises of 18 companies in countries across Europe, including Slovenia, Croatia, Serbia, and Bosnia.
Perutnina Ptuj’s key product categories include chicken, turkey, table eggs, feed sales, pork and beef, but 90 percent of its sales are in poultry and poultry products such as chicken sausages. Its annual revenue is estimated at EUR270.7 million (US$347.9 million), according to the WATT Global Media Top Companies Database.
Brands of Perutnina Ptuj include Naturally Fit, Poli and Jata.
Perutnina Ptuj has hired BNP Paribas as an advisor to help it explore strategic options, two sources told Reuters. However those sources, as well as spokesmen for  Perutnina Ptuj and BNP Paribas declined further comment regarding arrangements between the two companies.
Larger European meat companies, which include France's Societe LDC or Sweden's Scandi Standard, have been identified as possible bidders interested in the purchase of Perutnina Ptuj.
Perutnina Ptuj might expect an enterprise value of about 120 million to 140 million euros, one of the anonymous sources said, based on a multiple of six or seven times its operating earnings.

Perdue Farms chairman criticizes Maryland’s regulatory climate

Jim Perdue, chairman of Perdue Farms, criticized Maryland’s regulatory climate, saying the state’s government makes operating there much more difficult than governments of neighboring states where the poultry company has operations. Perdue made those critical comments at a recent Maryland Chamber of Commerce CEO Spotlight.
"The problem is, we have no seat at the table in Maryland," said Perdue. "Even if we have an onerous thing that happens in Virginia or Delaware, we can sit at the table and at least express our opinion.
"In Maryland, there is no seat. It's sort of dictated that this is the way it's going to be, and you really don't have any discourse."
Perdue said Maryland tends to regulate to solve problems, even in cases when the regulations aren't effective, Perdue said, according to a Baltimore Business Journal report.
The Maryland Department of the Environment did not directly address Perdue's comments, a spokesperson for the agency did provide a general statement about its operations: "The Maryland Department of the Environment works closely with a variety of stakeholders — including the agricultural community — in the department’s work to protect the environment and public health," the statement said. "The department is always willing to listen to, and to the extent possible address, the concerns of Maryland’s agricultural community."

AFIA welcomes re-proposed FSMA rules

The American Feed Industry Association (AFIA) said it welcomes the pre-publication of four re-proposed rules pertaining to the Food Safety Modernization Act (FSMA). At first glance, the U.S. Food and Drug Administration (FDA) has incorporated many of the changes AFIA recommended in its comments.
The reissued rules are: Produce Safety Regulation, Foreign Supplier Verification Program, Current Good Manufacturing and Hazard Analysis and Risk-Based Preventive Controls for Human Food, and Current Good Manufacturing Practices and Hazard Analysis and Risk-Based Preventive Controls for Food for Animals. AFIA previously submitted comments on five major sets of FSMA-related proposed rules during the last 10 months.
“The American Feed Industry Association is pleased the Food and Drug Administration has issued a revised proposal for these complex rules,” said AFIA President and CEO Joel G. Newman. “This re-proposal will allow stakeholders to review these rules one last time before the final rule is issued.” 
While AFIA believes it is reasonable for FDA to re-propose these rules based on complexity alone, the association is concerned with the re-proposal’s financial impact.
“The additional cost, with very limited added benefit, continues to be a major concern for AFIA. FDA seriously underestimated the cost of the proposed rule and the additions within this re-proposal have the potential to drive that cost up even further,” said Richard Sellers, AFIA senior vice president of legislative and regulatory affairs. “AFIA is committed to advocate for a final rule that is appropriate for the low risk that animal food presents. The cost-benefit ratio is nearly 20-to-1 and federal laws require the costs to reasonably approximate the benefit.”
With input from membership, AFIA will yet again review the rules, develop comments and submit to FDA. AFIA staff also intends to work alongside its animal food coalition partners in hopes of the development of consistent comments on the FDA proposals as needed. The comment period to review all four rules is 75 days after publication in the Federal Register, which will take place the week of September 22.
AFIA plans to request an extension to the comment period as all the rules were released simultaneously versus in succession.

Cargill to close Memphis corn milling facility

Cargill will close its Memphis corn milling facility, which employs approximately 440 people, including 120 contract employees, effective January 2015. The closure of the facility results primarily from the underutilization of the Memphis plant and its location away from the Corn Belt. The corn oil refinery will remain open and operate as a standalone facility to continue to serve customers.
For the employees impacted at the plant, Cargill will be offering opportunities to fill positions at other company locations in the region. Those who relocate to positions at other Cargill facilities will receive assistance. For displaced employees, Cargill will provide support including interview and resume writing training, severance packages and the opportunity to attend career fairs.
“The decision to close our Memphis corn milling facility was made only after a careful examination of the current business situation and we examined all other possible options,” said Julian Chase, president of Cargill Corn Milling based in Minneapolis. “This was a difficult decision to make because we have an excellent team of employees in Memphis. It is unfortunate that we must close any plant because of the impact to good people, their families and the community.”
Cargill remains committed to its U.S. corn milling business and will leverage the rest of its network to continue to serve customers. Cargill will also continue to honor its community commitments in Memphis through the end of calendar year 2014.

Golden Egg Award presented to the happy egg co.

Noble Foods’ the happy egg co. has been named the winner of the International Egg Committee’s (IEC) 2014 Golden Egg Award for marketing excellence. The Golden Egg Award is given each year for the best marketing and promotional campaign submitted by a country egg association, egg producer, egg packer or egg processing company.
The award was announced and presented to the brand at IEC's annual Gala Banquet, part of the 50th International Egg Commission Conference held in Edinburgh, Scotland from September 8-11.
“Noble Foods’ the happy egg co. was able to showcase their bold and courageous marketing efforts by entering a new market and generating significant growth for their happy eggs brand,” said the IEC in a statement. “We are proud to recognize their efforts with the Golden Egg Award for marketing eggsellence in 2014.”
Entries in the award competition were submitted from across the world, including Turkey, the UK, China, Canada, Scotland, Australia and Brazil.
With the mission of making free range eggs available to everyone at an affordable price, the happy egg co. set out to raise awareness and shake up the free-range egg category upon launching in the U.S. market in October 2012. Backed by research and focus groups to shape the brand’s strategy, simple messaging combined with unique packaging to allow happy eggs to stand out in the egg aisle. The company has achieved a brand value milestone of $10 million in 2014, with a target of $50 million by 2017. In the U.K., the happy egg co. is the No. 1 egg brand with sales exceeding $100 million.
“We really did our research before launching the happy egg brand in the U.S. nearly two years ago,” said David Wagstaff, CEO at the happy egg co. “At the time, 95 percent of production in the U.S. was caged, there was very low free range penetration, the market lacked brands and terminology, and in-store offerings were generally regarded as confusing and bland. We left no details to chance, researching everything all the way down to what areas of the country offered the best climate for our free to roam hens.”
Packaged in a sunshine-yellow carton made of 100 percent recycled and compostable material, and now available in six-, 10- and 12-packs, happy eggs stand out for their color and clarity in the egg aisle. Free Range eggs from the happy egg co. will be available at over 4,000 grocery stores across the country next month following recent increases in distribution.

World hunger falls, but 805 million still undernourished

The State of Food Insecurity in the World (SOFI 2014) report confirmed a positive trend which has seen the number of hungry people decline globally by more than 100 million over the last decade and by more than 200 million since 1990-92. The report is published annually by the Food and Agriculture Organization (FAO), the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP).
The overall trend in hunger reduction in developing countries means that the Millennium Development Goal (MDG) of halving the proportion of undernourished people by 2015 is within reach, "if appropriate and immediate efforts are stepped up," the report said. To date, 63 developing countries have reached the MDG target, and six more are on track to reach it by 2015.
"This is proof that we can win the war against hunger and should inspire countries to move forward, with the assistance of the international community as needed," the heads of FAO, IFAD and WFP, José Graziano da Silva, Kanayo F. Nwanze and Ertharin Cousin, wrote in their foreword to the report.
They stressed that "accelerated, substantial and sustainable hunger reduction is possible with the requisite political commitment," and that "this has to be well informed by sound understanding of national challenges, relevant policy options, broad participation and lessons from other experiences." 
SOFI 2014 noted how access to food has improved rapidly and significantly in countries that have experienced overall economic progress, notably in Eastern and South-Eastern Asia. Access to food has also improved in Southern Asia and Latin America, but mainly in countries with adequate safety nets and other forms of social protection including for the rural poor.
Hunger reduction has accelerated, but some lag behind
Despite significant progress overall, several regions and sub-regions continue to lag behind. In Sub-Saharan Africa, more than one in four people remain chronically undernourished, while Asia, the world's most populous region, is also home to the majority of the hungry - 526 million people.
Latin America and the Caribbean have made the greatest overall strides in increasing food security. Meanwhile Oceania has accomplished only a modest improvement (1.7 percent decline) in the prevalence of undernourishment, which stood at 14.0 percent in 2012-14, and has actually seen the number of its hungry increase since 1990-92.
The agency heads noted that of the 63 countries which have reached the MDG target, 25 have also achieved the more ambitious World Food Summit (WFS) target of halving the number of undernourished people by 2015. However, the report indicated that time has run out on reaching the WFS target at the global level.
Creating an enabling environment through coordinated actions
With the number of undernourished people remaining "unacceptably high", the agency heads stressed the need to renew the political commitment to tackle hunger and to transform it into concrete actions. In this context, the heads of FAO, IFAD and WFP welcomed the pledge at the 2014 African Union summit in June to end hunger on the continent by 2025.
"Food insecurity and malnutrition are complex problems that cannot be solved by one sector or stakeholder alone, but need to be tackled in a coordinated way," they added, calling on governments to work closely with the private sector and civil society.
The FAO, IFAD and WFP report specifies that hunger eradication requires establishing an enabling environment and an integrated approach. Such an approach includes public and private investments to increase agricultural productivity; access to land, services, technologies and markets; and measures to promote rural development and social protection for the most vulnerable, including strengthening their resilience to conflicts and natural disasters. The report also emphasizes the importance of specific nutrition programs, particularly to address micronutrient deficiencies of mothers and children under five.
Case studies
This year's report includes seven case studies - Bolivia, Brazil, Haiti, Indonesia, Madagascar, Malawi and Yemen - that highlight some of the ways that countries tackle hunger and how external events may influence their capacity to deliver on achieving food security and nutrition objectives. The countries were chosen because of their political, economic - particularly in the agricultural sector - diversities, and cultural differences.
Bolivia, for example, has created institutions to involve a range of stakeholders, particularly previously marginalized indigenous people.
Brazil's Zero Hunger program, which placed achievement of food security at the center of the government's agenda, is at the heart of progress that led the country to achieve both the MDG and WFS targets. Current programs to eradicate extreme poverty in the country build on the approach of linking policies for family farming with social protection in a highly inclusive manner.
Haiti, where more than half the population is chronically undernourished, is still struggling to recover from the effects of the devastating 2010 earthquake. The report notes how the country has adopted a national program to strengthen livelihoods and improve agricultural productivity by supporting small family farmers' access to inputs and services.
Indonesia has adopted legal frameworks and established institutions to improve food security and nutrition. Its policy coordination mechanism involves ministries, NGOs and community leaders. Measures address a wide range of challenges from agricultural productivity growth to nutritious and safe diets.
Madagascar is emerging from a political crisis and is resuming relationships with international development partners aimed at tackling poverty and malnutrition. It is also working in partnership to build resilience to shocks and climate hazards, including cyclones, droughts and locust invasions, which often afflict the island nation.
Malawi has reached the MDG hunger target, thanks to a strong and persistent commitment to boost maize production. However, malnutrition remains a challenge - 50 percent of children under five are stunted and 12.8 percent are underweight. To address the issue, the government is promoting community-based nutrition interventions to diversify production to include legumes, milk, fisheries and aquaculture, for healthier diets, and to improve incomes at the household level.
Conflict, economic downturn, low agricultural productivity and poverty have made Yemen one of the most food-insecure countries in the world. Besides restoring political security and economic stability, the government aims to reduce hunger by one-third by 2015 and to make 90 percent of the population food-secure by 2020. It also aims to reduce the current critical rates of child malnutrition by at least one percentage point per year.
The findings and recommendations of SOFI 2014 will be discussed by governments, civil society, and private sector representatives at the October 13-18 meeting of the Committee on World Food Security, at FAO headquarters in Rome.
The report will also be a focus of the Second International Conference on Nutrition (ICN2) in Rome from November 19-21, which FAO is jointly organizing with the World Health Organization. This high-level intergovernmental meeting seeks, at a global level, renewed political commitment to combat malnutrition with the overall goal of improving diets and raising nutrition levels.

Rise in large and mid-size markets supports Brazil chicken sales

The recovery of income due to exchange rates and increased levels of shipments favored forecasts of Brazilian chicken meat exports in 2014. According to the Brazilian Association of Animal Protein (ABPA), in the month of August a slight reduction in volume of 0.4 percent was recorded, with 332,000 metric tons, but with a considerable increase in revenue of US$674.6 million, a figure 5.4 percent higher relative to the eighth month of 2013.
In the cumulative figure of the year, the pace of shipments of chicken meat was positive at 1.7 percent, with a total of 2,605 million metric tons. Meanwhile, the revenue performance declined by 4.6 percent, with US$5.163 billion between January and August 2014.
Chicken meat cuts were maintained as the main product from the list of exports between January and August. According to the ABPA, 1.423 million metric tons were shipped in the period, a 3.9 percent improvement when compared to the previous year. In whole chicken, the second product from the list, a drop of 2.2 percent with 954,000 metric tons shipped was registered. Salted meats, with 123,100 metric tons (up 5.7 percent) and processed products, with 104,300 metric tons (up 4.2 percent) complete the list.
Among the importing regions, the Middle East continues to be the largest destination for Brazilian chicken meat, with 911,400 metric tons shipped between January and August in 2014, which is a result 8.1 percent lower when compared to the same period of 2013. Asia, in the second position, showed an increase of 7.5 percent, with 777,700 metric tons. For Africa, established as the third-largest destination in volume, 328,800 metric tons (down 6.1 percent) were shipped. Ranking fourth, the European Union (EU) accounted for 276,300 metric tons of Brazilian chicken meat, a slightly higher figure compared to the previous year (up 0.4 percent). For the Americas, 245,300 metric tons were shipped, a 49.5 percent increase when compared to the previous year. Finally, European countries that are not part of the EU, 64,400 metric tons were exported, a 13.5 percent higher volume compared to the first eight months of 2013.
According to the CEO of the ABPA, Francisco Turra, the cumulative performance of the year was influenced by strong growth in large and medium size markets. "It was remarkable the performance of China, with a 20 percent increase in shipments after enabling five new plants, and Venezuela, which almost doubled purchases of Brazilian chicken meat. The medium-sized markets such as Vietnam, Angola and Mexico, were also highlighted in this context," he stressed.
To Russia, 38 thousand metric tons were shipped from January to August, 36.4 percent higher compared to shipments in the same period of 2013. However, such growth is not a direct result of authorizations for new plants by Russia in early August. "Compared with July and August, there was a 15.6 percent increase in exported volumes. These shipments would be even greater if the MAPA [Ministry of Agriculture] would certify several plants authorized to export, which is not yet the case," Turra said.
According to the poultry vice president of the ABPA, Ricardo Santin, the increase in demand of these medium and large markets should ensure the pace of the rise in 2014, despite the reductions seen in Middle Eastern markets. "If these increased levels of shipments are maintained, it is likely that for the second half our growth rate would be around 3 percent, according to what we are expecting," said Santin.
Saudi Arabia was the largest importer of poultry meat from Brazil between January and August 2014, with 433,600 metric tons (down 6 percent when compared to the same period last year). Seen as a "single market," the EU remained the second largest destination (276,300 metric tons, up 0.4 percent). Japan, ranked third, importing 269,400 metric tons (up 4.9 percent). In the fourth place, Hong Kong accounted for 211,200 metric tons of the general balance of the year (down 2.7 percent). In the fifth position, the United Arab Emirates totaled 170,200 metric tons shipped (down 1.1 percent).

2014 US corn, soybean crop forecast to keep prices trending lower

In August, our forecast for this September was that a record soybean crop would be reported by USDA, which is now well known by anyone who follows commodity supply and demand worldwide, and the price of soybeans has moved lower. Specifically, soybeans have lost roughly $0.90 or about 8 percent, and corn is down roughly $0.28. The corn crop is also going to generate a record supply. While the supply-side news is becoming well known by traders, producers and users, we believe the market still has more downside before a low is achieved.
Let’s make sure everyone is on the same page: A market low will not be known until we can look backward and see where the market is at the time vs. wherever the low was.
The early harvest yield reports are outstanding or very high compared to normal trend history. However, within another few weeks, actual yields vs. yield history vs. expected yields will soon be old news and have diminishing importance.
Short-term outlook
Domestically, livestock producers will be in a position where the two primary feed commodities — corn and soybean meal — will have a large supply, and the price has adjusted to those increased supplies. Right now, however, the soybean harvest is starting out slow, and old crop soybeans will remain very tight for another 2-3 weeks. Some users of feed protein may need to seek an alternative protein to use since there is more corn being harvested and processed than soybeans being processed to make soy meal or oil. To be more specific, wet milled corn makes corn gluten feed and meal, both with protein content. Nutritionists will need to use their expertise to adjust and balance the ration for the short term to a supply of feed that is available vs. proteins that will be difficult to obtain.
Can the news get any more bearish?
The short answer is yes. Believe it or not, if you add all 2014 U.S. crop production and estimated carryovers, subtracting some reduction for use and compare that with available storage as reported by USDA in both on farm and off farm, those numbers closely match … at about 23 billion bushels. This means that for a few states, there is not enough storage, and, more specifically, Indiana, Missouri, North Dakota and South Dakota have a problem. Right now, several elevators in the Dakotas are full of wheat and cannot take more bushels because they can’t move out what they have in their space. Some farmers in North and South Dakota may consider leaving their corn crop in the field over the winter months, harvesting in spring 2015 and hoping storage space will improve, along with transportation. Insufficient grain storage at the farm should cause sell-side pressure by farm producers.
It bears repeating that it appears very little of the nearly 4 billion bushel soybean crop has been priced and will be delivered to elevators or soybean crushers. We also believe the soybean crop could still get bigger by one half to one whole bushel per acre.
Commitment of Traders Report
Over the past month, seen in the chart CFTC Commitment of Traders Report, the Commodity Futures Trading Commission reports the commercial position in soybeans has increased its long position. It should not be this way, given a record soybean crop that is still mostly in the field. To explain, as farmers sell soybeans, the buyer of those soybeans would sell/short futures, thus the report would show commercials are short, not long, soybeans.
Farmers need to accept the fact that soybeans are fundamentally priced to current supply and demand … not $15 per bushel. The strong crop here in the U.S. has catapulted world soybean stocks, and all soybeans producers and users are getting a lesson in global supply and demand.
The size of the 2014 corn and soybean crop will keep prices mostly defensive and trending lower for another two to six weeks. The high quality expected from this corn crop should eventually stimulate export demand. However, we first need to be able to get this crop to a port for shipment, and right now rail and barge traffic has a few challenges of its own and won’t make transporting record supplies of corn and soybeans easy.
Tim Brusnahan joined Brock Associates in 1985 and provides commodity price forecasting, research analysis, hedging and marketing strategies for crop producers, dairy and livestock producers and procurement/risk management strategies for feed manufactures, corn processors, and other end users. Contact Brusnahan at 414.540.2607 and tbrusnahan@brockreport.com.
The views and opinions expressed are not a solicitation of trading futures and options contracts. There is risk of losses as well as profits when trading futures and options, careful consideration to all risk aspects of commodity/derivative trading should be considered before trading, and past performance is no indication of future results. 

U.S. pork exports decline 2.5 percent in July

U.S. pork exports in July amounted to 396 million pounds, about 2.5 percent below the levels recorded during July 2013, according to the USDA Livestock, Dairy and Poultry Outlook report, released on September 17.  Higher prices of U.S. pork products in June are largely attributed to the overall reduction of U.S. pork exports in July.
Of the typical ten largest importers of U.S. pork, six of them received fewer shipments in July. Japan, Canada, Russia, China, Australia, the Philippines and Honduras all showed a drop in imports of U.S. pork. The most significant drop came from China, which went from receiving 53 million pounds to 25 million pounds, a 53.5 percent decrease.
The U.S. exported more pork to Mexico – its largest customer – with a 3.8 percent increase. July 2014 levels reached 113 million pounds, up from the July 2013 figure of 109 million pounds. Other countries increasing shipments of U.S. pork included South Korea, up 19.5 percent, and Colombia, up 23.8 percent. Russia went from receiving no U.S. pork in July 2013 to receiving 38 million pounds. That resumption of trade, however, ended after Russia on August 6 announced a ban on food products from the United States and other countries for political reasons.
U.S. increases pork imports
The USDA Livestock, Dairy and Poultry Outlook report also noted that pork imports to the U.S. were up 79 million pounds, a year-over-year increase of 2.4 percent. Almost 76 percent of those imports came from Canada, although the U.S. received slightly less Canadian pork in July 2014 than it did during the same month in 2013.
The balance of the U.S. pork imports came from Poland, Denmark, Mexico, Italy and the Netherlands.

EuroTier panel to address TTIP concerns

Experts from the European Union, the United States and Germany will address the Transatlantic Trade and Investment Partnership (TTIP) and its implications for poultry and livestock production at lecture and discussion event at EuroTier 2014. The EuroTier TTIP event will be held at 4 p.m. November 12 in Hanover, Germany.
The pending TTIP between the European Union and the United States is currently the subject of lively debates with many questions remaining to be answered. The panel of speakers will address concerns such as the current stage of the negotiations and what EU and U.S. livestock and poultry producers can expect from a TTIP agreement.
Slated to speak are Carl-Albrecht Bartmer, president of DLG (Deutsche Landwirtschafts-Gesellschaft – German Agricultural Society);Jean-Marc Trarieux, head of unit, The Americas, DG Agriculture and Rural Development, European Commission; Dr. Martin Banse, Thünen-Institute; Gina Tumbarello, director of international policy and trade, American Feed Industry Association; and Dietrich Holler, head of communications, DLG e.V, Frankfurt am Main.
The EuroTier presentations will be made in English. All EuroTier ticket holders can attend the TTIP event, but registration is required. DLG and the International Production & Processing Expo (IPPE) are sponsors for the event.
EuroTier 2014 will begin on November 11 and will run through November 14.

Improving broiler welfare can improve profitability

Animal welfare programs for the broiler industry and the audits that measure performance to these standards were adopted to address consumer and activist concerns regarding how the birds are raised and handled, according to Dr. Karen Christensen, associate professor and extension specialist, University of Arkansas. She told the audience of the webinar, Responding to consumer demand with nutrition solutions, sponsored by Novus, that as the National Chicken Council animal welfare program has had its measurable standards raised or tightened, the industry’s performance has improved.
Importance of audits
Christensen, who previously worked as director of technical services for OK Foods, said that audits play a crucial role in continuous improvement programs, because they provide producers with a “score card.” Audits identify areas that require additional effort or training and they also provide a “bridge” to customers and consumers that help build confidence in a producer’s welfare program.
There are three types of audits that can be performed, and Christensen said that they can each play a role in continuous improvement. First-party audits are internal audits that identify areas that need improvement. She said that first-party audits can provide teaching/training opportunities as well as allowing for a means for tracking improvements.
In a second-party audit, the auditor comes from outside the poultry company, but the auditor still has an “interest” in the audit’s outcome. An audit conducted by a customer’s quality assurance personnel is an example of a second-party audit.
An audit performed by an independent auditor is referred to as a third-party audit. The auditor is not a consultant; what third-party auditors provide is a “snapshot” view of the operation at that point in time. The National Chicken Council’s animal welfare program requires third-party auditing.
Welfare and bird performance
Dr. Pat Welch, technical service, Novus, discussed the control of foot pad dermatitis, which is one of the measurable bird welfare criteria found in broiler welfare programs. He said that controlling moisture levels in the house is critical for preventing high ammonia levels which will lead to foot pad problems. Welch shared in detail some litter management techniques for reducing ammonia production. He presented research data which shows how flocks with greater levels of foot pad dermatitis also had more breast blister issues, hock burns, poorer gait scores and had higher whole bird and parts condemnation rates.
Welch said that managing broiler houses to reduce rates of foot pad dermatitis does more than just improve bird welfare. It also yields better performance. He said that better growth rates, feed conversions and lower condemnation rates can be expected when foot pad issues are reduced. Foot pad dermatitis control is just one example of how improving performance on bird welfare indicators will also improve bird performance and yield greater financial returns.

Rembrandt Foods opens new corporate office

Rembrandt Foods, a company that focuses on producing egg products for the foodservice and ingredients industries, has opened a new corporate office at the Great Lakes Mall in Spirit Lake, Iowa. The company had been headquartered in nearby Okoboji for the past six years.
The company is hosting a ribbon-cutting ceremony for the new facility on September 19. The ceremony will include an egg breakfast. The public is invited.
“The opening of this office marks the next stage of growth for the company,” Rembrandt Foods Chief Financial Officer Jeff Peterson told the Dickinson County News. “We will be providing a larger quantity of egg volume over the next couple of years, both to the domestic and international markets.”
Peterson added that the company decided to retain its corporate office in the same geographical region in Iowa because of the strong work ethic its people possess.
Founded in 2000 by CEO Dave Rettig, Rembrandt Foods employs about 800 people, with about 65 of them working in the corporate office. In addition to having operations in Iowa, Rembrandt Foods has a presence in Minnesota, Missouri and Alabama.
Rembrandt Foods’ operation includes an estimated 13.56 million laying hens, according to the
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Venezuelan government giving credits to some poultry companies

To address the food shortage in Venezuela, representatives of its government have met with business and trade union leaders to find solutions to "ensure the food security of the population," according to the Caracas daily, El Periodiquito .
One of the measures resulting from these meetings has to do with the delivery of soft loans to some producers, such as poultry company H&H Agropecuaria SA. Its legal representative, Fabricio de La Pola, said it received from the Venezuelan President Nicolas Maduro a credit for VEF350 million (US$55.8 million) "to continue the process of expanding production farms and the construction of infrastructure."
The firm benefited with this loan produces 5.5 million chickens per year and 25 tons of manure that can be used as fertilizer of more than 20 thousand cultivated hectares. For his part, Vice President of Finance Rodolfo Marco Torres called together agribusiness associations, including the National Federation of Poultry Producers (Fenavi), National Association of Egg Producers (Asoprohuevos) and the Institute for Research and Promotion of Consumption of eggs (Inprohuevos).
The purpose of this meeting was to "promote the development of a diversified, advanced, harmonious, and autonomous economy, able to meet the needs of the country." These actions contrast with the complaint made by the president of the Association of Poultry Farmers of Tachira State, Rafael Moreno, who asked the central government to help them finance the debt of US$900 million that the 122 member companies have with poultry feed importers.
"We have a reserve of raw materials up to late September and our monthly expenses total US$300 million. Along with the accumulated debt, an unsustainable situation has been generated, by not allowing honor payment commitments with international suppliers," said Moreno.
Poultry farms of Táchira produce 6 million kilograms of chicken meat monthly and 1,200 cases of eggs daily. All chicken producers in Venezuela are asking the government to close imports from Brazil, Argentina, Uruguay and Paraguay, "because we are able to meet domestic demand and the imported product is subsidized, affecting our thin profit margins."

Rabobank: Poultry industry outlook won’t be hurt by Russian ban

Russia’s ban on poultry exports from the U.S., EU, Canada, Australia and Norway will not derail the bullish outlook for poultry meat prices, Rabobank stated in a report on the global poultry industry for the third quarter of 2014. Rabobank’s Food & Agribusiness Research and Advisory group published the report, stating that strong fundamentals will promote further margin improvements in nearly every region of the world.
“The global outlook for the poultry industry is bullish for the remainder of 2014,” said Nan-Dirk Mulder, a Rabobank analyst. “We expect strong fundamentals to keep white meat prices high, while dark meat prices may come under some pressure.”
Impact of restrictions on poultry trade by South Africa
Recently introduced restrictions on the global poultry trade by South Africa will have an impact. Brazil has been identified as the big winner from this action. Meanwhile, exporters in the U.S. and EU will have to compete to find alternative markets. While this will affect price levels, Rabobank believes it should not have a major impact on local poultry industries, as market fundamentals remain relatively strong.
United States outlook
In the United States, poultry prices continued their seasonal climb in the second quarter, driven by higher breast meat values. With well-balanced market conditions with measure supply growth, Rabobank expects hicken production in the U.S. to increase 3 percent in 2015.
European Union outlook
Rabobank says the outlook for the EU poultry market is bullish, with the chicken market continuing to be relatively strong because of high demand and a limited supply.
Asian outlook
Poultry marketers in China are showing signs of recovery as worries over avian influenza are fading and industry initiatives to reduce production capacity are taking effect. Since poultry and pork prices are correlated, a bullish outlook on pork prices will give poultry strong support in China in the coming months.
Japan’s poultry industry also has a bullish outlook for the second half of 2014, with ongoing low stock levels and limited expansion. A better Japanese demand is driving a recovery in Thailand. India’s poultry industry is experiencing a fragile recovery.
South American outlook
Exports currently drive a positive outlook in Brazil, though the domestic poultry market is currently being affected by a relatively weak domestic demand because of a reduction on consumer spending power.
In Argentina, the industry has been affected by a downturn because of weak domestic consumption and a slow economy.

Strike will paralyze Argentina soy exports

The Customs Staff Union of Argentina (SUPARA) announced a strike period for four days, following the poor results of the mandatory settlement ordered by the Ministry of Labor in this South American country. The website of the union, which brings together many of the workers in the Federal Administration of Public Revenue (AFIP), assures that it does not understand why a wage increase granted to all AFIP workers is refused — the only agency that collects the national income that allows operation of the state and supports the policies implemented by the government.
The protests will begin on September 18 and will run until September 21, preventing exports from one of the largest international suppliers of grains. Argentina is the third largest exporter of soybeans and recently harvested 55.5 million metric tons of this oilseed in the current 2013-2014 season, according to data released by the Grain Stock Exchange in Buenos Aires.
Of this amount, experts estimate that Argentinian soy farmers retained 23.5 million metric tons, as a sort of insurance pending the Argentinian peso devaluation, forecasted because of the payment to be made by the central government to international investment funds subscribed by receivables from the state in 2002. This reduction in the supply of Argentine soybeans, along with the announced strike in ports, pushes up international grain prices and its derivative, soybean meal, (which the southernmost country is the largest global exporter) at a time of growing demand, especially by China.

Adisseo France wins top honors at SPACE’s 2014 Innov’Space

Pierre-Andre Geraert, marketing innovation director, Adisseo, accepts one of three three-star Innov’Space awards that were presented at SPACE 2014. 
Adisseo France was one of three three-star Innov’Space award winners for its new product, Selisseo 2% Se. The Innov’Space competition recognizes new product innovation and is held among exhibitors at SPACE 2014, the second largest animal production show in the world held annually in Rennes, France.
Of the 166 companies who submit product entries, 49 were awarded the two-star label. Aside from Adisseo France, E-Cat’s mirage laser life, which detects air pockets in eggs, and Renolit Ondex’s Windbreak, a cladding system, also received the three-star ranking. An independent jury comprised of SPACE organizers and experts from technical institutions select the winners.
Selisseo, an original, pure and chemically defined molecule of HMSeBA, provides a reliable source if organic selenium. It is notable because it is a “stable, reliable source of pure organic selenium for animal nutrition.” According to the company, the product has been authorized in Europe since May 2013 as a source of organic selenium in premix and feeds for all species. It is developed either as a solid containing 5 percent HMSeBA and 95 percent carrier, thus supplying 2 percent selenium or as liquid, containing 5 percent HMSeBA in water.
Beyond Addiseo France, other animal nutrition companies also were recognized. Biomin France received two stars for anti-mycotoxin additive BBSH 797, “the first and only microorganism authorized in Europe meant to reduce deoxynivalenol in feed.”
Cargill’s nutrition additive Aloapur and milk replacer Energy@Milk by Denkavit France received one-star recognition.
The 28th edition of SPACE, held from Sept. 16-19, features more than 1,400 exhibitors, covering nearly 400,000 square feet.

SPACE: French government shows confidence in livestock sector

France's Agriculture Minister Stéphane Le Foll spoke about his confidence in French agriculture at SPACE 2014. 
At the opening of the French livestock trade show SPACE 2014, France’s Agriculture Minister Stéphane Le Foll expressed his confidence in the country’s livestock sector saying that his presence at the event demonstrated his faith in France’s animal production.
Referring to the Ukraine crisis, he stated that it is a problem that affects not only French agrifood industries but those across Europe, and that action needs to be coordinated across sectors and throughout the European Union.
He also touched on the need for the government to support poultry exports, and referred to the work that his government was doing to open new export markets for French meat and livestock products around the globe.
Marcel Deniuer, SPACE president, welcomed Le Foll and called on him to help livestock producers by cutting the costs they face and addressing the sector’s difficulties. He continued that livestock production should not be the casualty of geopolitical issues.
Across the country’s various livestock sectors, the goal of “Eating French” should be adhered to. This is particularly the case where poultry production is concerned, Deniuer continued.
Forty percent of poultry products in France are now imported, and in the catering sector this number rises to 87 percent. This meat is mainly coming from France’s European neighbors, who have “gradually nibbled at, and then invaded, our market.” 
“We have to reverse this trend,” Deniuer said, “reconquer the French market and defend our opportunities in the world market, which continues to grow." 
Despite strike action by airline Air France, the four-day event is hosting 1,410 exhibitors from 36 countries and is expected to attract more than 100,000 trade visitors.

Heinz to phase out layer cages, gestation crates

Heinz has adopted a new set of animal welfare guidelines which will have the global food processor moving toward use of cage-free eggs and pork from crate-free sources.
Heinz moves toward cage-free eggs
Heinz in its new animal welfare program has committed to sourcing its eggs from cage-free hens as suppliers meet the company’s growing request for such eggs. Already using cage-free eggs in Heinz Mayonnaise in the UK, the company is expanding its use of cage-free eggs. Heinz stated it will continue to work with its egg suppliers to review and further understand the options and capabilities in cage-free sourcing going forward.
The company is also urging its stakeholders to work with major egg suppliers and users to bring down the costs of cage-free eggs, which are more expensive than other eggs.
Heinz and crate-free pork
Heinz stated that it supports efforts within the pork industry to move away from using gestation crates for pregnant sows. The company is currently working with its pork suppliers to understand and document their plans to reduce or end the use of gestation crates.
Heinz comments about animal welfare standards
“Heinz recognizes that many consumers have concerns about animal welfare and we take these concerns seriously,” the company stated on its website. “At Heinz we have always been committed to providing safe, wholesome and nourishing foods that enhance the lives and well-being of people everywhere – a philosophy that extends throughout our supply chain, and in particular in our approach to animal welfare. As with all ingredients, the primary concerns for Heinz are safety and quality, and we set strict buying specifications in order to meet these requirements. At Heinz, the provenance of our ingredients is important to us. We have a long-standing history of ensuring traceability in our agricultural supply chain, and we share best practices across our global business. We keep our meat supply chain as short as we can in order to maintain the best possible levels of ingredient traceability.”
Heinz brands include TGI Friday's, Bagel Bites, Ore-Ida and Classico.

UK’s FSA issues alert on unapproved poultry, lamb, fish

The UK’s Food Standards Agency (FSA) has issued a Food Alert for Action, stating that a Scotland business has been operating as an unapproved cutting plant. According to the FSA, GSR Distributions Ltd, trading as Spiceway, Rutherglen, Glasgow, has processed and distributed a variety of chicken, lamb and fish products.
Authorities have been notified by the FSA that affected products include whole skin-on chickens, diced chicken, chicken filets, chicken wings, chicken mince, diced lamb, lab pieces, lamb mince and fish pieces. These products are sold loose in polythene bags and in various pack sizes. There is no information available on specific product names, brand name, batch codes, durability dates or country of origin.
Since a report on the full distribution of these products is not available, FSA believes the products could have been distributed nationally. However, it is known that at least some of the food items listed have been supplied to Eskview Ltd, T/A HDS (Halal Direct Scotland), an internet sales business that supplies primarily domestic customers.
FSA urges consumers who may have purchased these products to not eat them.
If any of these products are found during inspections, enforcement officers should ensure they are withdrawn from sale and destroyed.

Fire breaks out at Cargill Animal Nutrition plant in New York

A Cargill Animal Nutrition plant in Salem, New York, suffered a fire September 15. Officials say the fire was caused by combustion of dust in a grain bin.
The fire broke out in a silo just after midnight on September 15, according to reports. The fire was contained in the silo and did not spread anywhere else on the property.
The blaze broke out on the third floor of the silo, and firefighters had to drag hoses to the fifth floor to get to the fire. It took crews about two hours to get to the fire. In total, crews from seven fire departments fought the fire for more than four hours. Multiple fire departments were called to respond due to concern about a possible explosion.
"It was confined to the silo itself so we knew there was no structural damage. It took us a long time. We wanted to make sure we had our bases covered so we didn't have an explosion. We talked to the Cargill representatives and got their info on what to do and not to do and we proceeded forward,” said Salem Fire Chief Bob Graham.
Cargill makes animal feed and other products at that location. No injuries were reported.

AgFeed Industries to pay $18 million to settle fraud charges

AgFeed Industries, a bankrupt Tennessee-based animal feed company, has agreed to pay back $18 million in alleged illicit profits to settle civil accounting fraud charges, according to a Reuters report.
AgFeed was charged by the Securities and Exchange Commission (SEC) in March in connection with charges that it reported fake revenue from its China operations to help increase its stock price.
The SEC said AgFeed’s management in China kepts two sets of books – a real one and one it presented to investors.
According to the report, AgFeed inflated the company’s revenue by $239 million from 2008 through June 2011. The company used fake invoices for feed and hog sales and inflated hog weights in an attempt to sell them for higher prices. It later reported the made-up hogs had died.
In a rare move, the SEC also charged the company’s former U.S.-based independent audit committee chairman, K. Ivan Gothner. It alleges he and former U.S.-based Chief Financial Officer Edward Pazdro learned about the fraud in China after the company merged with the U.S.-based company but failed to conduct any meaningful investigation or properly disclose it. SEC also charged four Chinese company executives with fraud. This case is still ongoing. Attorneys for Gothner and Pazdro have denied the charges.
The settlement is subject to court approval. The company is settling without admitting or denying the charges. The SEC said the $18 million will be distributed to victims of the fraud.

Environmental conference for meat, poultry industry part of IPPE

The American Meat Institute Foundation (AMIF) will host the AMIF Environmental Conference for the Meat and Poultry Industry on January 26-27, 2015 at the Georgia World Congress Center in Atlanta, Georgia. The conference will be held in collaboration with the International Production & Processing Expo (IPPE).
The environmental conference, formerly held in conjunction with the AMIF's Conference on Worker Safety, Human Resources and the Environment, will address key environmental issues facing the industry, including resource conservation, greenhouse gas emissions and waste management. The conference will include the AMI Environmental Recognition and Achievement Awards, which will be presented at an evening reception on January 26.
Environmental Achievement Awards
The application for the 2015 Environmental Achievement Awards, which recognize companies that go beyond compliance in their sustainability and environmental efforts, is now open and will be accepted through COB on Wednesday, October 1. Applications for the awards can be downloaded.
Environmental Recognition Awards
Applications are also now being accepted for the 2015 Environmental Recognition Awards, which honors companies that have demonstrated a continuous dedication to environmental improvement. Submissions are due by COB on Wednesday. Applications can be downloaded.
Conference registration
Registration for the Environmental Conference for the Meat and Poultry Industry
 is $299 per person, and will include admission to IPPE. Registration can be done on the AMI website.

Case Farms safety record nets awards

Poultry processor Case Farms has earned the Award of Honor for worker safety and health performance from the Poultry Industry Safety and Health Council. This award distinguishes companies who demonstrate a strong commitment to implementing innovative and effective employee safety and health programs. The award was presented to the Goldsboro processing plant and hatchery during the 2014 National Safety Conference for the Poultry Industry.
In addition, Case Farms’ Winesburg, Ohio feed mill was presented the Award of Merit.
“We are proud of the quality safety programs that are implemented company-wide at Case Farms,” said Billy Holland, Case Farms’ safety director. “Throughout the year, our management team and staff come together regularly to find new ways to further strengthen our safety and health programs. With each innovation, we focus on our employees and what we can do to allow them to work more safely and more efficiently.”
The Poultry Industry Safety and Health Council consist of members from U.S. Poultry &Egg Association, National Chicken Council and National Turkey Federation. Collectively, the three organizations represent companies who produce 95 percent of the nation's poultry products and employ over 350,000 workers. Award consideration was based on injury statistics over a three-year period and an evaluation of written applications by three judges.
“This recognition, in addition to our recent American Meat Institute Safety Award and The National Provisioner 2014 Plant of the Year Award, confirms we are outrivaling the industry in our worker safety and health program initiatives. Now we are even more motivated to excel in these areas,” added Holland.
Adopting standards developed by the federal Occupational Safety and Health Administration’s Voluntary Protection Program (OSHA VPP), Case Farms has designed reputable safety programs throughout its four complexes.