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Grenville Poultry Plant to Close Soaring Food Costs Seen Linked To Rapidly Expanding Ethanol Sector US Poultry Processors Cutting Production UK Chicken Campaign Results In Egg Shortage Aviagen Announces Aviagen Turkeys Conferences, Courses and Workshops
Registrations for the Convention have been coming in fast and furious. If you have not yet registered, we encourage you to do so right away. The pickup at the hotel for Friday and Saturday, June 6th and 7th, has been much stronger than anticipated and as a result our block of rooms for those nights at the Westin Bayshore has been filled. For those of you who have not yet made reservations, we have arranged for a block of over-flow rooms at the Renaissance Hotel, located on the waterfront a short distance from the Westin for the Friday and Saturday nights. You could then relocate to the Westin Bayshore on Sunday for the rest of the Convention. When booking at the Westin, we recommend that you ask to be put on their wait list for the night(s) that you had to book at the Renaissance Hotel. If rooms become available at the Westin, they will advise you directly. This has turned out to be an extremely busy period in Vancouver, so please make your reservations ASAP. Details and a link to both hotels is on our website. Registration for the golf tournament is lagging, so for all those golfers out there, we need you. The course is spectacular, so don't miss out. Speaking of golf, if any of you have any golf prizes to donate, please send them to the Ottawa office, CPEPC, 400-1545 Carling Ave., Ottawa K1Z 8P9 Attention: Susan Mallet, or bring them with you to Vancouver. All prizes would be appreciated. There are also opportunities to sponsor the golf tournament and the Convention, as well as advertise in the Convention booklet (5 spaces left). Check this out at our website, www.cpepc.ca. All in all it is shaping up to be a great convention. Plan to be there!!
Grenville Poultry Plant to Close Exceldor, a Quebec poultry processing co-operative and CPEPC member, has announced that on 1 August it will close its plant at Grenville. The management of Exceldor announced April 4 to some 170 employees of its Grenville plant that the facility will cease operations as of the 1st of August this year. Following the announcement of the acquisition of Volailles Grenville in March 2007 Exceldor had informed employees at its three plants that the cooperative's slaughter activities would eventually be consolidated to two plants. In the course of the streamlining of operations, employees of the Grenville plant were advised by Exceldor management from June 2007 that the plant would cease all slaughter operations in the summer of 2008. The company will take all measures necessary to reduce the impact of the decision on the employees affected. All employees will be invited to apply for available positions at the cooperative's other two plants, one in Saint-Anselme and the other in Saint-Damase. Exceldor is a cooperative which specializes in the processing and marketing of fresh chicken. Headquartered in Lévis, Québec, the company currently employs 900 and processes 1,400,000 chickens every week at its facilities in Saint-Anselme, Saint-Damase and Grenville. With sales of more than $350 million, Exceldor is a leader in the marketing of fresh chicken in Canada. Its products are sold under the brands Exceldor, Exceldor Express and Exceldor l'Authentique. Exceldor is also co-owner of two other poultry sector operations, Unidindon and Volailles Giannone.
Soaring Food Costs Seen Linked To Rapidly Expanding Ethanol Sector Soaring food prices in the United States are caused in part by $25 billion per year in unnecessary costs imposed on food producers by the federally subsidized ethanol industry, which is itself teetering on the brink of contraction due to rampant over-expansion and higher corn prices, an agricultural economist told food writers meeting here today. “We simply cannot subsidize our way into long term economic growth and job creation,” warned Thomas Elam, Ph.D., president of FarmEcon LLC. “The policy favoring ethanol and other biofuels over food uses of grains and other crops acts as a regressive tax on the poor.” The impact on food costs comes from the federal policy of subsidizing the conversion of corn into ethanol, which is then added to gasoline at a concentration of up to 10 percent for use in most vehicles and up to 85 percent for some vehicles. Until the last few years, corn was used mainly to make feed for livestock and poultry, but has increasingly been diverted into ethanol because of hefty federal subsidies. As a result, the price of corn has soared, along with soybeans and other grains and oilseeds also used in animal feed. “The biofuels policy that is driving higher prices of corn, other grains, and soybeans will cost the U.S. economy more than $100 billion from 2006 to 2009,” Elam said. “It is inevitable that these costs will be passed along to consumers.” Elam spoke at a conference of food writers sponsored by the National Chicken Council and the U.S. Poultry & Egg Association. Chicken, turkey and egg producers are all major buyers of corn for animal feed. Elam estimated that as a result of biofuels subsidies, the poultry industry alone is being forced to absorb about $8 billion in extra costs just this year. Elam released a new study of the ethanol situation produced by his firm. He said that the ethanol industry has grown rapidly in response to the federal subsidy program – too rapidly, he suggested. Ethanol distilleries already in operation, plus those slated to come on line in the next year, will need up to 5 billion to 5.5 billion bushels of corn per year by 2009, Elam said. “We will not have nearly that much corn available for ethanol use,” he warned. Crop rotation requirements and higher prices of soybeans will actually reduce the amount of corn available for all purposes in 2008/2009, compared to the current crop year, he said. Only about 4 billion bushels of corn will be available to the ethanol sector, meaning that it will be able to operate at only 75 percent to 80 percent of its capacity as early as next year, he said Elam said many ethanol distilleries will have to suspend operations and most will operate at a significant loss. “Spurred on by subsidies, the ethanol industry has expanded at an unsustainable rate,” he said. “It will be very difficult for the industry to make money even at its current size, even given federal subsidies. At the capacity the industry is building, it will not be able to operate its plants at that capacity in the foreseeable future.” With the current price of petroleum products, ethanol producers can afford to pay up to $5.25 per bushel for corn. Corn is already selling for $5.50 to $5.75 per bushel on the spot market. Several ethanol companies have recently reported financial difficulties, mostly as a result of higher corn prices. “The subsidies designed to promote ethanol production and use are largely turning out to be large windfall profits for corn and soybean producers,” Elam said. Society is paying a high price for the government’s policy of subsidizing the conversion of corn into ethanol, Elam added. While the ethanol industry itself estimates that it produced $12.3 billion in 2007 household income, Elam said, his firm’s study shows that the added cost to the economy in 2007 was about $24.4 billion. “In other words, every dollar in extra household income created by ethanol support costs someone else in the economy about $2. We should expect this outcome from any industry that depends heavily on subsidies for its existence,” he said. Elam’s study was commissioned by the National Chicken Council, National Turkey Federation, and the American Meat Institute. - National Chicken Council
US Poultry Processors Cutting Production Pilgrim's Pride To Cut Poultry Production - Pilgrim's Pride Corp. announced Monday that it will reduce weekly chicken production by about 5 percent in the second half of fiscal 2008. The 5 percent cut is company-wide, but will vary from plant to plant, according to Ray Atkinson, director of corporate communications. The reduction includes the 2 percent impact from closing the plant in Siler City, N.C., which should be completed by June. Atkinson could not predict the impact at the Broadway processing facility, which employs about 800 people. "We don't have any plans to eliminate jobs," Atkinson said. "The biggest impact on growers will be increased down time." The reduction comes as the nation's largest chicken company tries to balance supply and demand amid record high feed costs, according to a company statement. The process began earlier this month with a reduction in the number of eggs set to hatch, which should affect weekly processing beginning in June. The reduction will remain in effect until average industry margins return to more normal levels, the company said. "Soaring feed-ingredient costs fueled by the federal government's misguided ethanol policy has created a crisis in our industry," Pilgrim's Pride President and Chief Executive Officer Clint Rivers said in a statement. "The true effects of [this] are only just now beginning to be felt by American consumers in the form of higher food prices." The company will continue to review its production facilities for potential changes, closure or consolidation in an effort to return to profitability. A processing facility in El Dorado, Ark., is among those being reviewed for possible closure, the company said. Pilgrim's recorded losses of $32.3 million in the first quarter of fiscal 2008. That compares to an $8.7 million loss in the first quarter of 2007. Feed ingredient costs rose 24 percent in the first quarter of '08. Of nearly $2 billion spent creating its products in the first quarter, Pilgrim's spent 36.5 percent on feed ingredients. Pilgrim's Pride stock (NYSE: PPC) closed Monday at $19.91, up 81 cents from Friday. Full article of April 15, 2008 from www.poultex.com Simmons Foods Cuts Production - Due to rising feed costs and weak domestic market, Simmons Foods poultry processor will cut chicken production by 6% as of this month. The Ark.-based processor, which operates two slaughter plants, will reduce the number of birds running through each facility, as well as lower bird weight. "Recent US chicken market price levels have not allowed processors to recover from the spiralling costs of corn and soy meal," said Simmons Prepared Foods President David Jackson. "This increased cost burden has yet to be reflected in domestic poultry prices." The move will allow the company to focus on its value-added product customer base while minimising exposure to commodity markets, added Simons. Another poultry processor to announce a cut in production is Ga.-based Fieldale Farms, which announced a 5% company-wide production cut. Full article of April 10, 2008 from www.worldpoultry.net Cagle's Poultry Processor Cuts Production - Another US chicken processor, Cagle's Inc., has announced a cut in production. The company will cut chicken production, effective immediately, by 4%. Cagle's joins Simmons Foods, which this week cut chicken production by 6%, and Fieldale Farms, which announced a cut in production of 5%. High feed costs are a major factor in these companies cutting production. "Current chicken prices have failed to reflect the tremendous increase in the cost of feed," Doug Cagle, president and CEO. "The cutback in production will not affect our customers with existing commitments but will reduce product being sold through less profitable commodity outlets." Full article of April 15, 2008 from www.worldpoultry.net
After Ten Long Years, Animal Cruelty Bill Passes Overwhelmingly Industry supported amendments to the Criminal Code of Canada: Cruelty to Animals provisions, passed Parliament April 9th. Bill S-203 was first introduced by Liberal Senator John Bryden in 2004 following years of controversy and battling between activist groups and animal industry groups over legislative amendments to the law. Despite massive public lobbying and media criticism driven by animal activist opposition in the weeks leading up to the April 9th vote, the bill passed 189 to 71. A nation wide coalition of animal use groups has been dealing with these Criminal Code amendments since 1998. The coalition representing livestock farming, fur and bio-medical research interests, had seen the need and the opportunity to work together on legislation which had been crafted and guided by animal activist groups. Eight ensuing bills that died on the order paper would have put legal and responsible animal use at legal risk. The coalition, working consistently over the last decade, achieved many fundamentally important improvements in each new version of the bill, however legal concerns still remained. While S-203 is limited to increasing the penalties under the current law, it is considered a win-win by the bill’s cross-party supporters. On April 7 Justice Minister Rob Nicholson wrote: “The increase in penalties is the common denominator that all stakeholders agree on and the passage of Bill S-203 does not prevent the Government from making additional changes in the future. It is my view that Bill S-203 is a step in the right direction, as it improves upon existing legislation and delivers an added measure of protection for all animals.” While activists are expected to continue their fight by lobbying for the more substantive and contentious amendments contained in a Liberal private members bill, these are not expected to be considered under this government.
UK Chicken Campaign Results In Egg Shortage Britain is currently experiencing a free-range egg shortage, which may last until the end of the year. The Telegraph has reported that a recent campaign has led to a huge number of consumers converting to free-range eggs, creating a massive demand and consequently a shortage in supply. However, retailers have said that it could be December before there is a large enough supply of free-range chickens to satisfy the needs of customers. Since January, when a series of documentaries on chicken welfare was aired in Britain, sales have increased by 50-100% at different supermarkets, says the Telegraph. As a result, stocks are running out in some stores, and apparently company executives from Britain's biggest egg packers have been touring the country asking farmers to convert. Chicken buyer for Sainsbury's, David Kettle, said sales of higher welfare and free-range chicken were up 53% in January, February and March compared to 2007. "It's fair to say we have seen a significant shift since January. If you look at all the retailers, everyone across the piece has struggled to meet demand on free range," he said. "We were looking at moving more into that area. Unfortunately even that has not been enough and we are still not meeting demand." www.worldpoultry.net
Aviagen Announces Aviagen Turkeys The Aviagen Group Turkey Breeding companies, Nicholas Turkey Breeding Farms (Nicholas) and British United Turkeys (BUT) have been operating as separate companies since the acquisition of BUT in September 2005, however, the approach is now changing. From 16 April, both companies will operate as one company – Aviagen Turkeys. According to the company, this will eliminate duplication of efforts and allow more resources to be focused on supporting customers. "As Aviagen Turkeys we have full pedigree breeding programmes in both the USA and Europe, providing a more secure, global supply source, plus the opportunity to maximise product improvement and new product development," says the company in a press release. "Innovation is key for the continual development of the industry and we feel this move will allow us to increase both our investment in products and our customer service." The two operations will be Aviagen Turkeys, Inc., based in Lewisburg, West Virginia, and Aviagen Turkeys Ltd., based near Chester, UK. Additionally, Aviagen Turkeys will support the BUT and Nicholas brands for all customers in Europe. Aviagen Turkeys Inc. will support all customers outside Europe, including North America, South America, the Middle East, Africa, Australia and Asia. www.worldpoultry.net
Conferences, Courses and Workshops
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The National Seafood Sector Council (NSSC) invites the food
processing industry to an exclusive preview of its exciting 1-day
workshop "Safety and Security Elements for Food Processors"
at no cost to employers! They are looking for people who work
in the related areas to participate and review the workshop that
will be released in late 2008. Only 15 spaces are available;
register early! For more information contact Deanna Zenger,
Ontario Regional Representative, 47 River St., Bloomingdale, ON N0B
1K0 Tel: (519) 998-0818 or E-mail: