* NEMA Directors weigh outlook at Philadelphia
PHILADELPHIA - At
their quarterly meeting held
here last Friday, directors of
Northeast Egg Marketing
Association handled a broad
agenda.
The program, ranged over
the troubled egg market
outlook, plans for new egg
promotion efforts m the
Northeast, moves for a quick
solution to the need for
another fowl processing
plant m the region, and a call
that UEP explore with tax
authorities how the egg
industry can effectively
make transition, if it
chooses, from cash to ac
crual accounting.
In the absense of NEMA
president, A 1 Wenger, John
Ricca, vice president of the
organization chaired the
session.
| Since the outlook com-
mittee of United Egg
Producers had met in
Chicago three days
previously, the meeting gave
particularly close attention
to a report on that session by
Harry Muller, UEP
president.
Muller said he sees the
outlook as laden with serious
problems unless producers
make decisions to trim flock
numbers. A recent canvass
of production costs coun
trywide indicates an
average target cost of 45
cents a dozen for ungraded
eggs. That would require a
65 cents to 68 cents Umer-
Barryprice to break even.
Correction could come
through rapid sell off of fowl
at a total monthly level of 20
million birds, coupled with a
crop of about 100,000 cases of
eggs a month for six months
by UEP.
Muller pointed out that
there is a great deal of
promotion money already
budgeted over the next 12
months. If that were
distributed to be effective
over six months it could
serve to stimulate demand.
As he sees it, we could be
well into October or
November 1980 before the
industry makes its way
back to a profit level.
Muller put the case quite
bluntly “extraneous events
may and can influence the
picture. The facts are that
the birds are out there,
replacements are out there
it is a time bomb ticking
away if nothing is done.”
In his report to the NEMA
Board, general manager Bill
Rent stated that the co-op
closed 1979 in a fiscally
strong position. Membership
stands at the best level m
history.
He reported that NEMA
members have a large share
in property protection now
being written under the UEP
insurance programs. Total
value of property insured
under the fire program
nationwide exceeds 580
million dollars, with a
likelihood that we will see an
equal amount of coverage
written in the new UNEPRO
liability and casualty
programs each year end.
Rent alerted the directors
to the need to rally support
for House Bill 6285, a
measure which will provide
a referendum on con
tinuance on the legislation
under which the American
Egg Board is structured.
Lancaster Farming, Saturday, February 23,1980—A19
He also drew attention to
UEP’s annual meeting
which will be held in
Washington, D.C. on
February 27 and 28.
Directors and members will
be specially briefed at that
time by UEP staffers for
visits and discussions with
their congressman.
Special emphasis will be
put on how government, diet
and health pronouncements
seriously effect the egg.
On the same score, Nor
man Hecht speaking for
NCEN, warned that the egg
is beginning to win the battle
of science but could lose the
battle to get out word ot
these victories.
A panel of scientists known
as the American Council of
Science and Health has
produced an educational
brochure called “Diet
Modification Can It
Reduce The Risk of Heart
Disease?” The facts it
presents show there is no
reason to think there is
linkage between eggs and
heart disease. NCEN has
underwritten the purchase of
35,000 copies of the brochure.
They will be made available
to the industry.
Mike Arcidy, chairman of
the special committee
seeking to activate an ad
ditional fowl processing
plant m New England,
reportedly had the benefit of
professional guidance on the
score with more to come.
Although the final solution
may be in another direction,
there is strong sentiment to
try to get service started
with least possible delay.
This might dictate the take
over of an established plant
in northern New England to
gam experience and track
time. Feeling of the com
mittee now is “let’s get our
feet wet and go forward.”
Arcidy outlined efforts to
use and increase the man
datory poultry meat content
of chicken soup. The meeting
unanimously took a position
that a three percent level is
the target to be pursued.
On the price discoveries
front, the meeting heard
with much interest that
within a fairly short time,
another UEP region plans to
broach a price discovery
plan that will be different
from any it has done before.
Considerable time was
taken to try to hammer out a
position on cash vs. accrual
accounting to be used as a
guide to industry thinking.
Sentiment appears to favor
accrual as the ultimate tool
to achieve egg industry
stability.
Discussion culminated in a
recommendation to UEP to
quickly set up further
studies on this issue and
explore with proper tax
authorities the possibility for
working out means of
achieving equitable con
version from cash to ac
crual.
On the score of promotion,
a quality activity report by
Valerie Heine, regional AEB
coordinator, stationed with
NEMA, proved a real
highlight.
She reported that time has
been put into building good
communication lines with
the individual states. This
will include a workshop in
the late sprmg to afford
guidance in shaping grant
requests for cooperative
AEB activities.
Heme reported grassroots
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