Page 4 - National Poultry Newspaper

While eggs and egg industries come in all different shapes and sizes in all sorts of different places, there are often common threads when it comes to the challenges of profitability and sustainability.
WHILE Australian egg producers are suffering due to escalating input (grain) costs and super- market pricing strate- gies, it seems egg pro- ducers way beyond our shores and way beyond our size are also endur- ing tough times, albeit from oversupply driving down price.
In early October, the largest egg producer in the US issued a dire fi- nancial report.
Cal-Maine Foods ap- parently suffered a net loss in the most recent quarter, blaming an “extreme drop” in egg prices.
And the numbers back that up, according to an article in Modern Farmer, a US-based e-publication I enjoy, which describes itself as the authoritative resource for today’s cut- ting-edge food produc- ers and consumers: the farmers, wannabe farm- ers, chefs and passionate home cooks who are in- fluencing the way we eat right now.
“In the past year, the average price of a dozen eggs dropped by a mass- ive 30 percent,” the arti- cle said.
“More eggs have been sold so far this year than last year; there’s been an increase in sales of 1.7 percent, up to 8.25 bil- lion eggs in August, but when the average price sits at less than $US0.92
“According to Bloomb- erg, this has led egg pro- ducers, including Cal- Maine, to expand their cage-free operations, but these companies have continued to pump out conventional eggs at the same time, drowning the country in eggs.
“Cage-free eggs, along with certified organic and vegetarian-fed, are classified as ‘specialty eggs’ within the industry.
“Owing to the greater demand for these eggs, prices have not dropped for them nearly as much.
“Cal-Maine says its specialty egg prices dropped only 1.4 percent, a vast difference from the conventional eggs.
“A shift to specialty eggs is a good thing for both animal welfare and, theoretically, for produc- ers, assuming they can continue to demand high- er prices for eggs from better-treated hens.
“But that shift appears to have come with some growing pains.”
Cal-Maine Foods is primarily engaged in the production, grading, packing and sale of fresh shell eggs, including con- ventional, cage-free, or- ganic and nutritionally enhanced eggs.
Headquartered in Jack- son, Mississippi, it is the largest producer and distributor of fresh shell eggs in the US and sells the majority of its shell
eggs in states across the southwestern, southeast- ern, midwestern and mid- Atlantic regions of the US.
In fiscal 2019, Cal- Maine Foods sold about 1038.9 million dozen shell eggs, representing roughly 19 percent of domestic shell egg con- sumption.
Its flock of about 36.2 million layers and 9.4 million pullets and breeders is the largest in the US.
Not one to rest on its laurels for too long, Cal-Maine Foods an- nounced on October 16 that it had reached a definitive agreement to acquire substantially all the assets of Mahard Egg Farm, relating to its com- mercial shell egg produc- tion, processing, distribu- tion and sale of shell eggs business.
The assets to be ac- quired, subject to the completion of the trans- action some time in No- vember, include commer- cial shell egg production and processing facilities with current capacity for about 3.9 million laying hens and permitted ca- pacity for up to eight million laying hens, a feed mill, pullets and re- lated production facili- ties in Chillicothe, Texas and Nebo, Oklahoma and a distribution warehouse in Gordonville, Texas.
Different drivers and sizes pushing down egg prices
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for a dozen eggs, it shows producers are in trouble.
“The cause isn’t com- plicated at its core: there are simply too many eggs.
“According to the US- DA’s statistics, there were 800,000 more egg-laying hens this September than there were in September of 2018.
“Egg production has been up every month in the year of 2019.
“There has been a sea change in the way eggs are produced over the past few years, as huge com- panies like McDonald’s, Walmart, and Kroger have pledged to shift entirely to cage-free eggs.
M
Biosecurity critical to infectious bursal disease protection
With a very hot summer just around the corner, now is the time to check your critical cooling, drinking and ventilation systems.
It is vital to check, service and run the following systems so you are not caught out by the heat.
BIOSECURITY incur- sions are one of agricul- ture’s greatest business risks, with exotic pests, diseases and weeds hav- ing a potentially crip- pling impact on plant and animal production systems.
Australia’s island status protects the country from exotic pests and diseases to a certain extent.
But as the movement of people and goods around the globe continues to increase and traditional agricultural production systems and regions con- tinue to change (thereby increasing historical risk profiles), this advantage is rapidly being lost and the threat of biosecurity incursions is intensifying.
Following years of dif- ficult conditions, Queens- land poultry producers are facing their next biosecurity challenge, infectious bursal disease virus, with the highly contagious viral disease of chickens recently de- tected at two egg farms in New Zealand.
While it does not pose a health risk to humans, three to six-week-old birds face high mortal-
While Australia’s poul- try producers are among the most biosecure in the world, IBDV-1 could cause devastating eco- nomic losses for our in- dustry if it got through our borders.
Should such a disease become endemic in Aus- tralia, the doors may open to cheaper poultry products from countries that are unlikely to oper- ate with the same high animal welfare standards or have the same clean and green credentials.
Queensland remains Australia’s frontline bio- security state, which means we will continue to receive more than our fair share of incursions.
Effective government, public and industry part- nerships are critical to maintaining our relative pest, disease and weed freedom.
And with the number of biosecurity intercep- tions showing no sign of reducing, we must main- tain vigilance and con- tinue to remind everyone they have a GBO and an important role to play.
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ity rates and increased susceptibility to other diseases, should they sur- vive.
Following the detec- tion, New Zealand offi- cials have stopped issu- ing export certificates for countries that require an IBDV-1-free guarantee, which includes Australia.
New Zealand was the only country that met our high biosecurity stand- ards, but we are no longer accepting New Zealand poultry exports worth nearly $60 million an- nually.
Australia’s poultry in- dustry cannot afford to have its biosecurity cre- dentials compromised in a similar way.
The most significant risk of entry of IBDV
into Australia is likely to be through illegally imported contaminated poultry products.
And with more than 350,000 items of bio- security concern inter- cepted across the country in 2018, it is imperative all Australians and visi- tors observe their general biosecurity obligation both on-farm and in gen- eral and report suspected breaches to Biosecurity Queensland immediately.
Frontline quarantine services must be ad- equately funded and re- sourced to prevent the entry of the exotic pests, diseases and weeds that threaten agriculture and would negatively impact the way of life for all Australians.
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Page 4 – National Poultry Newspaper, November 2019
www.poultrynews.com.au