Category: Eggs

WILLMAR, MINN. – Highly Pathogenic Avian Influenza (HPAI) has been confirmed in a commercial turkey flock in Meeker County, Minn., that supplies Jennie-O Turkey Store, a business unit of Hormel Foods Corp., Austin, Minn. Another case of HPAI also was found in a backyard flock in Mower County, Minn.

State officials have quarantined the affected premises and the flocks will be depopulated, according to the Animal and Plant Health Inspection Service of the US Department of Agriculture. The two confirmed cases of HPAI, which were disclosed on March 26, bring the total number of cases to 61 since Feb. 8, when a case was announced in a commercial turkey flock in Dubois, Ind.

“Jennie-O Turkey Store has been preparing for this situation and took extensive precautions to protect the health of the turkeys in its supply chain,” the company said. “Jennie-O Turkey Store will continue to work with the USDA Animal and Plant Health Inspection Service, Minnesota Board of Animal Health, Minnesota Department of Agriculture, as well as poultry industry associations on this issue. USDA and the National Turkey Federation are monitoring and responding to the situation and remind consumers that HPAI does not pose a food safety concern.”

In addition to Minnesota and Indiana, additional cases of HPAI have been confirmed in commercial poultry flocks in Delaware, Iowa, Kentucky, Maryland, Missouri, Nebraska, New York, South Dakota and Wisconsin. More than 14 million birds, from both commercial and backyard flocks, have been depopulated since the outbreak began.

The confirmation of HPAI in the United States has affected the egg commodity markets. Prices of some dried egg products jumped more than $1 per lb, or about 20%, last week and were up more than 30% since early March. Breaking egg prices in some cases surged as much as 50% for the week and were up 70% to 85% from earlier in the month.

The price advances constituted the largest week-over-week gains at least since another outbreak of HPAI in 2014-15. Prices then rose to levels far above current values, but some in the trade expected prices may challenge 2015 levels.

The bulk of the egg product price increases in 2015 occurred from mid-May to mid-August. This year’s advances are occurring earlier and coincide with increased demand ahead of the Easter holiday, although the bump in egg demand at Easter has not been that noticeable in recent years. The price increases also are occurring at a time of already-tight dried egg supplies, and some analysts surmised that panic buying was behind the sharp advances due to uncertainty about supplies in coming weeks.

RIDGELAND, MISS. – Cal-Maine Foods Inc. announced on March 31 that it approved new capital projects to expand its cage-free egg production capabilities. The company plans to invest an estimated $82 million in these projects with available cash on hand, investments and operating cash flow.

“We are pleased to announce these cage-free expansion projects that will further advance our growth strategy and better serve customers given growing customer and consumer demand and expanding state requirements for cage-free eggs,” said Dolph Baker, chairman and chief executive officer of Cal-Maine. “Cal-Maine Foods is well-positioned as an industry leader in meeting this demand.”

The proposed project includes the two projects at Cal-Maine Foods’ locations:

• Delta, Utah – four new cage-free layer houses and two pullet house conversions with capacity for approximately 810,000 cage-free layer hens. The work is expected to start immediately with project completion expected by fall 2023.
• Guthrie, Kentucky – nine cage-free layer house conversions and two pullet house conversions with capacity for approximately 953,000 cage-free layer hens. The work is expected to begin immediately with expected completion by spring 2025.

Baker added since 2008, including these projects, the company allocated approximately $625 million in facilities, equipment and related operations expanding cage-free production and distribution capabilities. Cal-Maine is expected to finish $123 million in projects in the next three years.

Cal-Maine Foods primarily is engaged in the production, grading, packing and sale of fresh shell eggs, including conventional, cage-free, organic and nutritionally enhanced eggs. The company sells the majority of its shell eggs in states across the southwestern, southeastern, mid-western and mid-Atlantic regions of the United States.

WASHINGTON – Nearly 7 million commercial chickens and turkeys were scheduled to be euthanized following outbreaks of highly pathogenic avian influenza (HPAI) the week of March 28, according to the Animal and Plant Health Inspection Service of the US Department of Agriculture. Outbreaks were verified in Iowa, Minnesota, North Dakota and South Dakota during the week, with the largest outbreak at an operation in Osceola, Iowa, with more than 5 million commercial layer chickens. A commercial pheasant flock in Erath County, Texas, tested positive for the virus on April 3.

Egg and dried egg product prices continued to surge during the week as cases of HPAI increased. Dried egg product prices have more than doubled since early March, according to Milling & Baking News, a sister publication to MEAT+POULTRY.

More than 17 million birds have been destroyed. An egg processor told Milling & Baking News animal health experts believe the current strain is five-times more virulent than previous variants. Even with improved and industry-standard control measures in place, the high rate of prevalence in this year’s strain was making it difficult to control.  The virus is spread by migrating wild birds.

A research brief published by CoBank, Denver, said the spread of HPAI is straining the egg supply chain.

“US egg producers have been hard-pressed to align supplies with market demand over the last two years,” said Brian Earnest, lead animal protein economist with CoBank. “The US layer flock typically expands ahead of the surge in demand for Easter and contracts during the summer months. But recent losses due to HPAI have combined with high feed costs and other challenges that are severely limiting flock size management.”   

The US table egg layer flock trended ahead of target growth in 2019, however, the annual supply has declined by more than 5% since then, according to CoBank. The decline in supply stems from extreme shifts in consumer behavior during 2020. Although grocery demand skyrocketed during the onset of the pandemic, egg producers were not initially set up to shift lost foodservice volumes into retail channels.

ST. LOUiS – Michael Foods, a business unit of Post Holdings Inc., is the latest poultry company to have a flock test positive for highly pathogenic avian influenza (HPAI). The facility is in Nebraska, and houses approximately 2 million birds, making up 4% of Michael Foods’ egg production, according to the company.

Post Holdings said it would not comment further on the issue unless subsequent incidents exceed 5% of Post’s controlled egg supply.

Post Holdings is the latest poultry company to be hit by an HPAI outbreak. Hormel Foods Corp., Austin, Minn., announced in late March that a flock supplying its Jennie-O Turkey Store business in Meeker County, Minn., had tested positive. In February, Tyson Foods Inc. confirmed a flock of 240,000 of its broiler chickens in Fulton County, Ky., tested positive.  

As of April 11, HPAI had been identified in 112 commercial flocks throughout the country, according to the US Department of Agriculture’s Animal and Plant Health Inspection Service.

WOONSOCKET RI. – In its recently published Environmental, Social and Governance (ESG) Report, CVS Health Corp. announced it has stepped up its goal to transition to selling 100% cage-free eggs. In 2015 the company announced it would make the transition by 2025, but as of April 1, it said the goal would be achieved by the end of 2022 at its 9,900 pharmacy-based stores.

“In the last couple of years, as the supply chain and offering of these eggs has increased and consumer choice has evolved, we made the decision to accelerate that goal,” the company said.

The decision to make the transition early was lauded by the animal rights organization, The Humane League, which CVS consulted with and helped the company establish standards for its corporate animal welfare policies. The organization lauded the company’s efforts and encouraged other retailers, including CVS competitor, Walgreens, to follow suit. Currently, Walgreens has committed to going to cage-free eggs by 2025.

“We applaud CVS for recognizing that they could switch to cage-free eggs much quicker than anticipated and taking that significant step to reduce the suffering of egg-laying hens as soon as possible,” said Vicky Bond, president of the Humane League. Socially responsible companies like CVS will no longer source egg hens kept in cruel battery cages, and we hope that Walgreens will follow their lead and do the same.”

KANSAS CITY, MO. — Egg and egg product prices should continue to decline as cases of highly pathogenic avian influenza (HPAI) decline, Amy Smith, vice president, Advanced Economic Solutions, said June 6 at the Sosland Publishing Co. 45^th annual Purchasing Seminar.  

“HPAI is the story,” Smith said, noting that the disease, carried by wild birds, was confirmed in all four North American flyways this year. Egg layers were the poultry segment most affected with about 30 million layers destroyed, 44% of which were in the top egg producing state of Iowa, with about 9% of the total US laying flock impacted. That compares with about 32.5 million layers affected by the 2015 HPAI outbreak. In contrast, only 2.36 million birds were culled from broiler flocks and about 5.5 million turkeys. To date, about 38 million total birds have been culled due to HPAI.

Smith noted that since June 2 (as of June 6) only one commercial flock and no laying flocks had been detected with HPAI.

“I think we’ve peaked,” she said.

The loss of laying hens sent egg and egg product prices skyrocketing from March to May. Prices for eggs have dropped sharply since mid-May, and prices for most egg products also have declined except for dried whole egg and yolk and liquid and frozen yolk. Smith noted that the industry entered the HPAI pandemic in 2022 with less dried egg product inventory than in the 2015 HPAI outbreak.

Smith forecast prices for large table eggs at $2.44 per dozen in the second quarter, at $1.93 per dozen in the third quarter and at $1.95 per dozen for the full year compared with $1.21 per dozen in 2021. She forecast dried whole egg prices at $13.70 a lb in the second quarter, $11.20 a lb in the third quarter and $9.10 a lb for the full year compared with $3.16 a lb in 2021. Dried yolk prices were forecast at $11.70 a lb in the second quarter, $8.58 a lb in the third quarter and $7.50 a lb for all of 2022 compared with $2.39 a lb in 2021.

It will take about 10 to 12 months for layer flocks to fully recover, Smith said, but the industry is facing more “headwinds” than in 2015, including more expensive pullets and feed and the move to cage-free eggs. Feed costs have risen sharply, gaining 28% from October 2021 to April 2022, Smith said. Some producers who had traditional commercial flocks may take the opportunity to convert to cage-free operations, she said.

NEW YORK, NY. – The US pharmacy chain, Rite Aid, announced its commitment to selling 100% cage-free eggs has accelerated progress toward that goal. The company initially pledged to source cage-free eggs across its 2,289 retail locations by 2025 but shortened that timeline by three years to the end of 2022.

“We commend Rite Aid for expediting its cage-free timeline to reduce the suffering of egg-laying
 hens in its supply chains,” said Vicky Bond, president of The Humane League. “We’ve seen a trend
 among socially responsible companies like Rite-Aid to stop sourcing eggs from hens kept in cruel
 battery cages and to speed up the implementation of their cage-free policies.”

Rite Aid’s accelerated commitment comes on the heels of Walgreens’ and CVS Health’s recent pledge to sell 100% cage-free eggs by year-end 2022.

Rite Aid consulted with The Humane League, a global animal protection nonprofit with a mission to end the abuse of animals raised for food, before making this commitment.

Consumer demand for cage-free eggs continues to grow and over 2,000 companies worldwide have committed to cage free including Nestlé, Aldi, InterContinental Hotels, Sodexo, Kraft Heinz, Compass Group, Shake Shack, Famous Brands, Costa Coffee, Burger King, Dunkin’, Krispy Kreme, Unilever and Barilla.

RIDGELAND, MISS. – Cal-Maine Foods Inc. announced that Sherman L. Miller would become the egg producer’s president and chief executive officer effective Sept. 30.

Miller will take over for Dolph Baker who remains on at Cal-Maine as chairman for the board of directors. The company said Baker will remain actively involved, focusing on strategy, capital allocation, and advising senior management.

“Sherman has dedicated his entire career to Cal-Maine Foods and is extremely well qualified for this leadership position, having the right complement of operational experience and strategic vision,” Baker said. “He has been a proven leader in managing our operations through the various market cycles that are characteristic of our industry. Under his leadership, the company has achieved tremendous growth, and he has the full confidence of the board that he is the right person to lead the company forward.”

Miller started with Cal-Maine in 1996 and served in various management positions at the company’s Chase, Kan., Delta, Utah and Edwards, Miss., processing plants. 

He previously served as vice president of operations in 2007. By 2018, Miller was named president and has served as chief operating officer since 2011. He has served as a board of directors member for a decade.

Miller will retain the role of COO until a successor is hired. 

“I am proud and honored to assume this role with Cal-Maine Foods,” Miller said. “Dolph has been a tremendous leader and mentor, and we will continue to benefit from his valuable insight and deep knowledge of the company. He has established Cal-Maine Foods as a leader in our industry, and we will continue to work together and build upon this proud legacy and history of success.”

Along with his work at Cal Maine, Miller serves as a director of the US Poultry and Egg Association and United Egg Producers, and past director of the American Feed Industry Association. 

He graduated from Mississippi State University with a bachelor’s degree in poultry science. 

CHICAGO — An Illinois federal jury on Dec. 1 awarded $17.8 million to plaintiffs Kraft Heinz Co., the former Kellogg Co., General Mills Inc. and Nestle USA Inc. in an egg price fixing lawsuit, according to Jenner & Block, the law firm that represented the plaintiffs. The companies are entitled to have the amount trebled, according to Jenner & Block.

Defendants in the case include Cal-Maine Foods Inc., Rose Acre Farms, the United Egg Producers Inc. and the United States Egg Marketers Inc. Cal-Maine Foods has petitioned the court to enter a judgment in its favor, known as a directed verdict, notwithstanding the jury’s decision.

“Cal-Maine Foods respects the jury’s decision and appreciates that the damages awarded by the jury are relatively modest compared to the damages sought but remains disappointed with the verdict as Cal-Maine Foods continues to believe that the company did nothing wrong,” the company said.

The lawsuit originally was filed on Dec. 12, 2011, which was before Kraft Foods and Heinz merged and before Kellogg Co. spun off into WK Kellogg Co and Kellanova. The plaintiffs alleged the defendants engaged in a conspiracy to control supply and artificially maintain and increase the price of eggs. A jury in the US District Court for the Northern District of Illinois ruled in favor of the food companies on Nov. 20 of this year.

Cal-Maine cited improving the treatment of egg laying hens, which started about 20 years ago when the industry began adopting the United Egg Producers certified program, which was not designed to restrict supply and affect prices.

“The plaintiffs alleged that the prices they paid for processed egg products were increased by the defendants’ conduct,” Cal-Maine said. “The plaintiffs, however, continue to demand egg products created from UEP-certified eggs and/or eggs from hens that otherwise are humanely raised.”