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Articles from 2016 In April


Checkoff groups seek exemption from FOIA

The fiscal 2017 funding bill for agricultural programs run by the U.S. Department of Agriculture includes language supported by many agricultural organizations that would exempt from the federal Freedom of Information Act (FOIA) any research and promotion boards funded by grower checkoff fees. The legislation, approved last week by the House Appropriations Committee, is pending full House approval.

The House language currently reads: “The funding used to operate and carry out the activities of the various research and promotion programs is provided by producers and industry stakeholders, and employees on the boards are not federal employees. Therefore, the committee urges USDA to recognize that such boards are not subject to the provisions of 5 U.S.C. Section 552 (the Freedom of Information Act).”

USDA now complies with FOIA requests, subject to certain exemptions, on behalf the 14 commodity organizations that administer checkoff programs and bills them for costs associated with such requests, including records searches.

In an April 11 letter to the House appropriations subcommittee on agriculture, rural development, food and drug administration and related agencies, the organizations pointed out that checkoff funds used for the operations and activities of the commodity organizations are paid by producers and industry stakeholders and that employees of the organizations are not federal employees; as such, they shouldn’t be subject to FOIA.

The need branches potentially from lawsuits, such as one filed by The Humane Society of United States (HSUS) against the National Pork Board regarding The Other White Meat trademark. When groups sue but have other intentions, such as in HSUS's case, then the producers' checkoffs serve.

“This is asking Congress to make it clear that checkoff programs do not fall under FOIA requests because they are fully paid for with producer dollars for their time. Responding to FOIA requests in burdening these programs and diverting producer dollars that are intended for research and promotion,” said Chase Adams, spokesman for the National Cattlemen’s Beef Assn.

Organizations that signed the letter included: National Potato Council, National Milk Producers Federation, National Cattlemen’s Beef Assn., National Christmas Tree Assn., American Beekeeping Federation, AmericanHort, American Mushroom Institute, American Soybean Assn., Michigan Christmas Tree Assn., National Cotton Council, National Pork Producers Council, National Watermelon Assn., United Dairymen of Arizona and United Egg Producers.

The fiscal 2017 House agricultural appropriations bill will now go forward for consideration by the whole House of Representatives. The Senate has not yet introduced its version. If approved, the provision would allow the exemption for only one year.

New ADM venture offers end-to-end supply chain services in Egypt

Archer Daniels Midland Co. (ADM) and Medsofts Group announced that they have completed their previously announced transaction and are launching ADM Medsofts, a 50/50 joint venture that will offer commodity merchandising, transportation and delivery services to customers in Egypt.

“By combining ADM’s global network with Medsofts’ Egypt merchandising and logistics expertise, ADM Medsofts offers customers unparalleled, end-to-end supply chain services at competitive prices,” said Joe Taets, president of ADM’s Agricultural Services business unit and its EMEA operations. “This new joint venture has the right assets, the right team and the right global resources to serve customers in Egypt. This is an excellent addition that helps meet several of ADM’s key strategic goals as it further diversifies and expands our merchandising footprint.”

Taets said the partnership also helps ADM grow its logistics services and represents another important enhancement of its destination marketing capabilities.

“We have a great opportunity to grow stronger together,” said Salah Tawfik, Medsofts chief executive officer. “We will build on each other’s capabilities, combining expertise and assets to enhance our ability to deliver reliable and efficient value-added service to our customers.”

ADM Medsofts owns and manages an international merchandising operation that handles more than 2 million metric tons of grains, oilseeds and soft commodities annually destined for the Middle East and North Africa, a local grain distribution operation serving customers in Egypt and an inland logistics network that links port operations to customers throughout Egypt.

The joint venture also owns a 50% share of Nile Stevedoring & Storage Co., which operates one of the largest grain port facilities in Egypt. Located at the Port of Alexandria, the facility has an annual discharge capacity of more than 2 million metric tons and includes additional land for future expansion.

Big deliveries limit gains in soybeans, wheat: Podcast

Soybeans held modest gains, and wheat markets were mixed on Friday, with both markets pressured by larger-than-expected deliveries on the first notice day for May contracts. Deferred corn futures were mostly unchanged, while the soon-to-expire May contract was up about 2 cents/bu.

There were no deliveries for corn, and that market also was supported by an export sale to Japan.

Bob Burgdorfer of Farm Futures reporting. Farm Futures is a sister publication of Feedstuffs.

Salmonella in retail poultry lowest since FDA began testing

The U.S. Food & Drug Administration released a new interim report April 28 that measures antimicrobial resistance in salmonella isolated from raw retail meat and poultry collected through the National Antimicrobial Resistance Monitoring System (NARMS). The "2014-2015 Retail Meat Interim Report" contains data from January 2014 to June 2015.

NARMS focuses on resistance to antibiotics that are considered important in human medicine, as well as multi-drug resistance (described by FDA as resistance to three or more classes of antibiotics). Under the NARMS program, samples are collected from humans, food-producing animals and retail meat sources and tested for bacteria to determine whether such bacteria are resistant to antibiotics used in human and veterinary medicine. This report focuses only on salmonella.

In many important categories, encouraging improvements found in 2011 continued to be evident in the latest data, such as:

  • The prevalence of salmonella in retail poultry is at its lowest level since testing began in 2002. In ground turkey, the prevalence of salmonella has declined from a high of 19% in 2008 to 6% in 2014, while in retail chicken over the same time period, it has dropped from 15% to 9%.
  • Salmonella resistance to ceftriaxone (an important antibiotic used to treat seriously ill patients) from chicken sources continued to decline steadily from a high of 38% in retail chicken meat in 2009 to 18% in 2014 and to 5% during the first half of 2015. In ground turkey isolates, ceftriaxone resistance was detected in 7% of 2014 isolates and 4% of 2015 isolates collected through June, which represents an 80% decline since 2011, when resistance peaked at 22%.
  • Fluoroquinolones like ciprofloxacin are classified as critically important for the treatment of salmonella  infections. Ciprofloxacin resistance was absent in salmonella from poultry and beef, although a single isolate was found in pork.
  • All salmonella from retail meats were susceptible to azithromycin, another important antibiotic recommended for the treatment of salmonella and other intestinal pathogens.
  • Multi-drug resistance in salmonella continued to show a downward drift in chicken and turkey — from 2011 levels of 45% and 50%, respectively, to 20% and 36% in June 2015.

Dr. Ashley Peterson, National Chicken Council senior vice president of scientific and regulatory affairs, said the council was pleased to see many positive trends in the data continue, including a decrease in resistance in several foodborne pathogens and the fact that salmonella presence was at the lowest levels since testing began and that first-line antibiotics remain effective in treating illnesses. “Analyzing resistance patterns, as these reports do, is much more meaningful to public health outcomes than examining antibiotic sales data,” Peterson said.

“Reports like this provide a strong case that the continued judicious use of antibiotics by poultry producers, coupled with ongoing strategies to reduce salmonella, are aiding in the reduction of the pathogen and the reduction in resistance,” she added.

According to Peterson, most chicken producers are well ahead of the December deadline to phase out medically important antibiotics for growth purposes.

“One thing consumers should remember is that all pathogens potentially found on raw chicken, regardless of strain or resistance profile, are fully destroyed by handling the product properly and cooking it to an internal temperature of 165°F,” she noted.

GSI publishes second salmon sustainability report

During the Seafood Expo Global 2016, the Global Salmon Initiative (GSI) published its annual "Sustainability Report," which now features three years' worth of data from all 12 GSI salmon farm member companies. The report covers 14 key environmental and social sustainability indicators, including three new indicators added this year.

The GSI members are committed to having 100% of their salmon farms certified by the Aquaculture Stewardship Council (ASC) Standard by 2020; as a measure of overall sustainability, the group is using the standard as a reference point for its progress.

The GSI report, published April 28, notes that more than 70 GSI salmon farms are now certified by ASC, and more than 35 farms currently are under assessment — a significant increase since the nine certified in 2015 and a strong signal of the group’s commitment to greater industry sustainability.

"The publication of the GSI’s annual 'Sustainability Report' means we are routinely benchmarking our performance both as individual companies and as an industry sector,” said Per Grieg, co-chair of GSI and chairman of the board for Grieg Seafood ASA. "The report both acts as a reference point for our success but also continuously encourages us to look for new approaches to enhance our sustainability performance. As we review our progress and continue to look for ways to develop, we, the GSI, see cooperation as the main driver behind making these improvements on a greater scale and at an accelerated pace."

The launch of the second report provides public access via the GSI website to review and track the progress of each company over the past three years.

"Significant change takes time, and while we are pleased to see movement in the right direction, as an industry, we know there are still challenges we must face and that a lot more work can be done," GSI co-chair Sady Delgado, chief executive officer of Los Fiordos, explained. "However, by sharing this information in such a transparent manner, we hope to reinforce our message to stakeholders and customers that we see improved transparency and sustainability as critical elements of our future and are committed to making these changes our highest priority."

GSI’s "Sustainability Report" is the first industry-wide report of its kind and sets transparency at an unprecedented level within the food sector. Consumers are considering a number of factors when making purchasing decisions, including sustainability. For this reason, the GSI report also includes key production information for the five main sources of animal protein — salmon, chicken, beef, lamb and pork — demonstrating that farmed salmon offers one of the most sustainable sources of protein available, according to the announcement.

The report provides data across the following areas: fish escapes, fish mortality, antibiotic use, sea lice counts, sea lice treatments, non-medicinal methods, wildlife interactions, use of marine ingredients in feed, certifications and environmental licenses, compliance, occupational health and safety, interactions with the local community, direct labor and investment in research and development.

The full report and more information on GSI can be found at globalsalmoninitiative.org/sustainability-report.

GSI is a leadership initiative established in 2013 by global farmed salmon producers focused on making significant progress on industry sustainability. Today, GSI comprises 12 companies that represent approximately 50% of the global salmon production industry.

The GSI member companies are: Bakkafrost, Blumar, Cermaq, Compañía Pesquera Camanchaca, Empresas AquaChile, Grieg Seafood ASA, Huon Aquaculture, Los Fiordos, Marine Harvest, Multiexport Foods SA, New Zealand King Salmon and Ventisqueros.

Purina partners with RxExpress platform for VFD compliance

Purina Animal Nutrition has selected the RxExpress software platform from New Planet Technologies as its tool to help meet feed documentation requirements of the Veterinary Feed Directive (VFD). This federal regulation mandates documentation of a veterinarian’s approval to feed or distribute medicated feed additive antibiotics that are deemed medically important to production livestock. It goes into effect on Jan. 1, 2017.

“After reviewing the available options designed to help meet VFD requirements, we chose RxExpress,” said Dan Moran, director of swine feed marketing for Purina Animal Nutrition and a member of Purina’s VFD compliance team. “Partnering with RxExpress and its developers at New Planet Technologies allows our team of nutritionists to focus on what they do best: providing our customers and their animals with unsurpassed animal nutrition.”

Livestock producers, feed manufacturers and feed distributors are required to retain documentation of VFD orders. As a turnkey software solution, RxExpress can be used to generate, distribute and store electronic VFD orders.

“We are pleased to be working with Purina Animal Nutrition,” New Planet Technologies president and chief executive officer Tyson Hartshorn said. “RxExpress is now available to feed manufacturers and distributors for use in preparation of VFD compliance.”

RxExpress runs on any computer or smart mobile device, online or offline. It can receive records from other electronic VFD systems and can convert paper VFD orders to electronic format. It streamlines order validation and tracks expiration dates. It also can generate and send non-VFD prescriptions.

Purina Animal Nutrition LLC is a national organization serving producers, animal owners and their families through more than 4,700 local cooperatives, independent dealers and other large retailers throughout the U.S. It offers a portfolio of complete feeds, supplements, premixes, ingredients and specialty technologies for the livestock and lifestyle animal markets. Headquartered in Shoreview, Minn., Purina Animal Nutrition is a wholly owned subsidiary of Land O’Lakes Inc.

USTR details how GI policies harm food markets

A report issued by the U.S. Trade Representative's Office outlined the Administration's broad scope of activities aimed at combating the abuse of geographical indications (GIs) threatening the use of common food names.

USTR's annual "Special 301" report touted the extensive efforts in numerous countries and forums that the Administration has undertaken to stem the European Union's use of GIs to erect barriers to U.S. exports.

The report identifies trade barriers faced by U.S. companies and products due to the intellectual property policies in other countries, such as copyright, patents, trademarks and GIs. Increasingly, those barriers are taking the form of GI restrictions that risk preventing food companies in many countries from using generic names that have been in commerce for generations.

Although parmesan, feta and asiago became household favorites in the U.S. decades ago, Europe now argues that these names and others can appear only on cheese produced in Italy and Greece, thus blocking U.S. sales of the products to the EU and increasingly affecting sales to various foreign markets. The U.S. government has been using a variety of tools to combat these types of barriers to U.S. exports, as well as to promote the importance of balanced and thorough due process procedures for the consideration of GIs.

"Protecting the right to use generic food names is increasingly important to U.S. food and beverage companies," said Jaime Castaneda, executive director of the Consortium for Common Food Names, an international alliance dedicated to preserving rights to use common food names. "Producers around the world continue to grapple with the harmful effects of the EU's overly broad approach to GIs and the impact this policy has already had in numerous markets."

"USTR's robust defense of common food name users — and the rights of buyers to maintain a variety of sources for common food categories — is particularly valuable at this point in time, when the EU is seeking to replicate here in the U.S. market its harmful pattern of using its (free trade agreements) to impose GI policies aimed at restricting trade and competition," Castaneda said, adding that the GI provisions in the Trans-Pacific Partnership (TPP) "are a strong step in the right direction toward bringing more transparency and balance to the process of GI evaluations in various countries."

Castaneda said the consortium will continue working with USTR on GIs and called on governments around the world to stop the illegal confiscation of generic names. "We look forward to partnering with USTR to use the tools in TPP, as well as direct engagement with key markets, to preserve access for common food name products," he said. "With the help of USTR and the cooperation of other governments, we can make real progress toward a more equitable system of considering and approving geographical indications across the globe."

Tom Suber, president of the U.S. Dairy Export Council, said, “U.S. dairy exporters believe it is critical for USTR to maintain a strong focus on the importance of firmly rejecting barriers to U.S. products driven by our competitors’ desires to use GIs to monopolize the use of common food names around the world. This year’s 'Special 301' report rightfully spotlights some of the progress being made in addressing this challenge. At the same time, much work remains, including ensuring that TPP partners fully abide by the intention of the TPP GI commitments and that the EU reforms the flaws in its own GI policies that negatively impact the rights of common name users.”

“Our dairy industry has been gearing up to compete globally and open markets to our products,” said Jim Mulhern, president and chief executive officer of the National Milk Producers Federation. "It’s vitally important that U.S. trade policy reject the EU’s attempts to slam doors shut in areas in which we are increasingly competing head to head against their producers. The barriers to our products are the result of deeply problematic EU GI policies that give short shrift to the rights of common name users. These deficiencies must be addressed as U.S. work on this important issue continues.”

Mississippi producers capitalizing on deficit left by avian flu

Mississippi producers capitalizing on deficit left by avian flu

Mississippi poultry and egg companies are poised for expansions to fill the national gaps caused by the 2015 bird flu outbreaks in other states.

Tom Tabler, poultry specialist with the Mississippi State University Extension Service, said companies are looking for more broiler growers or additional barns on existing farms.

“Poultry companies anticipate strength, at least in the short term, but anything can change that optimism,” he said. “Feed costs are reasonable right now, but a drought or other problems this summer could run up grain prices and, therefore, production costs.”

Mississippi placed 14.5 million broiler-type chicks for meat production during the week ending April 16. In about five weeks, those chicks will be the size of these broilers, which were growing on a Chickasaw County farm on April 15, 2016. (Photo by MSU Extension Service/Kevin Hudson)

Mississippi’s poultry industry benefited from higher egg prices in 2015. Bird flu primarily affected commercial turkey houses and egg layers, but not broiler houses. While most of the state’s poultry industry is broiler production, Mississippi is home to Cal-Maine, the nation’s largest egg production company. None of Cal-Maine’s facilities across the country were struck by the flu virus.

“Avian influenza caused a shortage of eggs and laying hens, so prices for both are strong,” Tabler said. “During the outbreak, export markets dried up for broilers and are still slow to recover.”

During the week ending April 16, Mississippi placed 14.5 million broiler-type chicks for meat production, according to a U.S. Department of Agriculture report. That was 6% fewer chicks than the number placed that same week in 2015 and 1% fewer than the number placed as of April 9. Mississippi hatcheries set 17.7 million broiler-type eggs during the same period, up 1% from last year but down 2% from the previous week.

During the seven-month-long outbreak of 2015, almost 50 million birds died, primarily in Minnesota and Iowa.

Tabler said the best news for Mississippi growers was the absence of a bird flu outbreak this winter.

“We are not completely out of the woods, but every day closer to warm temperatures is a day closer to conditions that will prevent the highly pathogenic avian influenza virus from surviving,” he said. “There was a nationwide effort to increase biosecurity on poultry farms, and that may have been a factor in limiting outbreaks in 2016.”

The only outbreak reported recently occurred in mid-January at a commercial turkey flock in Indiana.

“Our increased biosecurity practices will have long-term benefits for the industry,” Tabler said.

Brian Williams, an agricultural economist with the Mississippi State University Extension Service, said egg prices are the lowest they have been since June 2012.

“Egg prices are running just under a dollar — almost a third of what they were in August, when they reached $2.67/doz.,” Williams said. “Broiler prices have been steady for the last several months at about $1.11/lb.”

Williams said poultry remained Mississippi’s largest agricultural commodity in 2015 — for the 21st consecutive year. The total poultry industry value was $3.25 billion, which included $2.9 billion for broilers, $319 million for eggs and $6.8 million for chickens used as laying hens. Poultry ranked ahead of the estimated forestry industry value of $1.8 billion and the soybean industry value of $1 billion.

Pilgrim's vies for leading organic position

Pilgrim's vies for leading organic position

Pilgrim's Pride Corp. has announced plans to make a major push into organic chicken production with the aim of positioning itself as one of the largest producers of organic chicken in the U.S.

In an April 28 call with investors, the Greeley, Colo.-based food company said it seeks to secure a larger share of a growing market segment of consumers concerned about specific on-farm production practices.

The company also announced that work has begun on the conversion of one of its facilities to produce U.S. Department of Agriculture-certified organic chicken. It plans to have the facility on line sometime in 2017 and does not expect the conversion to have a negative impact on volumes or margins.

“Our key customers have told us their organic business continues to grow. So, in support of our key customers, we have decided that the time is right for us to get into this market,” Bill Lovette, chief executive officer of Pilgrim's, said during a call with investors announcing first-quarter results.

“We believe we can be the best producer of USDA-certified organic chicken,” Lovette added.

The company previously disclosed plans to grow its antibiotic-free (ABF) business to more than 25% of its overall production by the end of 2018. At present, Pilgrim's ABF production accounts for 10% of all ABF production in the U.S. By the time the company completes its planned transition, it is estimated that Pilgrim's will represent well more than 20% of total ABF production in the U.S.

“If you look at the two categories of chicken that are growing, it's organic and ABF. Traditional chicken has experienced fairly tempered growth over the last year, so this is about our participation in these categories that are growing more rapidly,” Lovette said.
 

Q1 results announced

Pilgrim's reported net sales of $1.96 billion for its first quarter in 2016, compared to $2.05 billion for the same period in 2015.

The company said its U.S. and Mexican businesses improved sequentially in the quarter following a challenging fourth quarter, putting it in a strong position for quarter two.

Lovette noted that while market conditions contributed to the improvement, Pilgrim's well-balanced portfolio played a key factor in delivering the improved quarterly performance and allowed it to leverage its strength in specific market segments while minimizing the adverse impact of the others.

“In Mexico, we continue to see improvements in market conditions year to date, and we are on target in integrating the new assets and realizing announced synergies. We will continue to seek new opportunities to position us to be a much stronger player in all geographies, meet future demand growth in the region and give us the best portfolio to serve the Mexican consumers,” Lovette said.

Within prepared foods, Pilgrim's vision of sustainable growth remains intact. “With the well-regarded Pierce brand playing a central role and the addition of a new fully cooked line at our Moorefield, W.Va., complex scheduled for completion late this year, we are on track to expand margins and increase our footprint to new accounts where we did not have prior presence,” he said.


Special dividend declared

Pilgrim's also has announced that, as part of its continuing strategy to improve its capital structure and generate shareholder value, a special cash dividend of $2.75 per share has been declared. The total amount of the special dividend payment will be approximately $700 million, based on the current number of shares outstanding. The special cash dividend is payable on May 18, 2016, to stockholders of record on May 10.

"The board's decision to pay a special dividend is a reflection of the success we have had over the past five years in executing our portfolio strategy while partnering with key customers, relentless pursuing operational excellence and growing value-added exports. We will continue to seek ways to produce superior operating performance, reduce volatility and maximize our cash flow generation potential within an optimized capital structure," Lovette said.

Summit takes on vet student debt

Veterinary student debt is an increasingly critical issue that can be alleviated by employing a number of different approaches, from a streamlined curricula to increasing scholarship opportunities, higher starting salaries, lobbying federal lawmakers for legislation to lower interest rates on student loans and creating a national plan for reducing the debt-to-income ratio (DIR).

These were among the recommendations offered by a group of committed participants in the "FIX THE DEBT ... Our Future, Our Responsibility" summit as the profession works to find ways to reduce the burden on students and veterinarians alike.

The summit — organized jointly by the American Veterinary Medical Assn. (AVMA), Association of American Veterinary Medical Colleges (AAVMC) and Michigan State University College of Veterinary Medicine — brought together approximately 180 individuals, including veterinary students and recent graduates, plus representatives from veterinary medical colleges, veterinary employers, government agencies and veterinary associations.

The participants tackled student debt and other financial issues that affect young veterinary professionals. The collective goal over the three-day summit was to agree on specific strategies to address the many facets of this complex challenge with the goal of reducing the DIR, which is an indicator of the financial health of the veterinarian entering the profession.

According to AVMA, the DIR currently stands at about 2:1, representing a level of educational debt approximately twice the level of starting income.

Dr. John Baker, dean of the Michigan State College of Veterinary Medicine, warned that the ratio of student debt to graduate starting salary is the biggest challenge facing veterinary medicine and is increasing to a level where it may affect the number and quality of students applying for a veterinary medical education.

He added that the single biggest factor behind the issue is the decrease in public funding for higher education.

The DIR problem "has been discussed many times over the past several decades and is certainly not new," Baker said. "However, what is new is the current size of the problem. Strategies to improve the DIR for veterinary graduates must come from every corner of the profession, from educational institutions to veterinary organizations."

AVMA president Dr. Joe Kinnarney emphasized the need to recognize educational debt as more than just a financial issue. It is creating not only a tremendous economic burden on students and recent graduates, but it is also having a negative effect on their professional well-being and mental health.

Kinnarney noted that AVMA’s first-ever wellness roundtable, which took place in March and was attended by a group of about 40 from across the profession, left an important take-away: Urgent action on educational debt is essential to alleviate serious wellness issues.

Dr. Andrew Maccabe, AAVMC executive director, acknowledged that fixing the existing economic situation in veterinary education will require a determined, sustained effort, possibly some risk taking and, without a doubt, ongoing collaboration.

“The student debt problem did not happen overnight, and we are not going to solve it overnight. However, I feel that ... holding each other accountable along the way are positive steps toward making debt less of a burden for our students and veterinarians in the years to come," Baker said.