Egg, turkey meat prices begin to rise as bird flu spreads
DES MOINES, Iowa (AP) -- Prices for eggs and turkey meat are rising as an outbreak of bird flu in the Midwest claims an increasing number of chickens and turkeys. Market experts say grocery stores and wholesalers are trying to stock up on eggs, but there's no need to worry about having enough turkeys for Thanksgiving.
The cost of a carton of large eggs in the Midwest has jumped nearly 17 percent to $1.39 a dozen from $1.19 since mid-April when the virus began appearing in Iowa's chicken flocks and farmers culled their flocks to contain any spread.
A much bigger increase has emerged in the eggs used as ingredients in processed products like cake mix and mayonnaise, which account for the majority of what Iowa produces. Those eggs have jumped 63 percent to $1.03 a dozen from 63 cents in the last three weeks, said Rick Brown, senior vice president of Urner Barry, a commodity market analysis firm.
Turkey prices, which had been expected to fall this year, are up slightly as the bird flu claimed about 5.6 million turkeys nationwide so far. About 238 million turkeys were raised in the U.S. last year.
The price of fresh boneless and skinless tom breast meat primarily used for deli meat has risen 10 percent since mid-April to $3.37 a pound, a USDA report said Friday. Frozen hens in the 8- to 16-pound range, those often used for home roasting, were up about 3 percent to $1.06 a pound.
Egg supplies are falling short of demand, the U.S. Department of Agriculture has indicated, and Brown said egg buyers such as grocery stores and wholesalers are trying to stock up for fear that another large farm with millions of chickens will be stricken - causing prices to spike higher.
"We're starting to see a little bit of that demand increase, and the sellers are reluctant to give clients too much more than they normally have because they know what's going on and they don't want to be caught short either," he said.
The number of Iowa chickens lost exceeds 26 million, the vast majority of which lay eggs for food use. That's about 41 percent of the leading egg state's layers and about 8 percent of the nation's laying hens. That many chickens would lay more than 500 million table eggs a month. For comparison, Iowa chickens laid 1.4 billion table eggs in March, before the disease struck. U.S. egg production for March stood at 7.42 billion table eggs.
Some companies are beginning to notice the impact of fewer eggs. Cereal maker Post Holdings Inc., which bought egg products supplier Michael Foods last year, said in its May 7 quarterly earnings report that about 14 percent of its egg supply has been affected by the bird flu outbreak. Post estimated the impact at about $20 million through the end of September.
Michael Foods primarily supplies extended shelf-life liquid and precooked egg products and eggs used in food ingredients.
The poultry industry can replenish the supply of chickens more quickly than beef or pork industries can rebound, but it still takes time to rebuild a flock.
"They're going to have to phase in replacing those flocks so they can get them get back into a laying schedule that results in a more even flow of eggs, and that's going to take six to nine months," said Tom Elam, an agricultural economist and poultry industry consultant.
It takes about four months for a hatched chick to be old enough to begin laying eggs, and it will typically be productive for about two years, Elam said. Many of the hens dying from the disease are younger and no pullets had been planned to replace them yet, Elam said. More than 350,000 pullets have been lost to bird flu - a very small portion of the 50 million egg-type chicks hatched in March, but it compounds the replenishment problem.
While new bird flu outbreaks are occurring in the turkey market - Minnesota, the nation's leading turkey producer, has 4 million confirmed dead birds so far - Elam said cold storage stocks and the number of hens still on farms suggest turkeys will be available for Thanksgiving.
"Anybody who wants a Thanksgiving turkey is going to be able to get one," he said. "They may have to pay a little more for it but we're not going to have national stock-outs for Thanksgiving turkeys, yet."
The IRS Seized $107,000 From This North Carolina Man’s Bank Account. Now, He’s Fighting to Get It Back.
His parents owned a general store and grill, and McLellan began helping out there at the ripe old age of 9. Then, 14 years ago, McLellan decided to try his hand at the family business and purchased his own store in the heart of the Bible Belt, naming it L&M Convenience Mart.
Business has been good for McLellan, and though L&M, located in Fairmont, N.C., began as just a convenience store and gas station, he’s since expanded it to include a restaurant that serves hot dogs, hamburgers and catfish sandwiches.
While most of his employees and their families spend Sunday mornings making right with God, McLellan skips church to man the store. He’s there on Christmas Day and during Thanksgiving dinner—a sacrifice McLellan makes for his employees.
What McLellan didn’t know, though, was that the federal government could come in and take away what he’d worked so hard for.
On a summer day last July, McLellan, who hadn’t yet arrived at the store, received a phone call from one of his employees summoning him to L&M. More than a dozen federal agents had flooded into his business—officers from North Carolina’s Alcohol and Law Enforcement, the local police department and the Federal Bureau of Investigation—and they were asking for him.
“It’s my livelihood. This is all I know how to do. I’m 50 years old, and if I had to do something else, I’d probably be in trouble,” said Lyndon McLellan.When McLellan arrived at the store, he met two federal agents dressed in suits who asked to speak with him in private. McLellan led the agents to L&M’s stock room, where they asked him if he knew of the term “structuring.”
He had no idea.
The federal agents then showed McLellan paperwork that included deposits to the store’s account at Lumbee Guaranty Bank. The statements showed two deposits made within a 24-hour period totaling $11,400.
The statements, they said, indicated he had a history of consistent cash deposits of less than $10,000, which is illegal.
Then, the agents told the small business owner something that shook him to his core: The Internal Revenue Service had seized all of the money in L&M’s bank account: $107,702.66.
“‘Are you telling me you took my money?’” McLellan recalled asking the agents. “I didn’t understand what was going on. They dropped a bomb on me. I was lost for five to 10 minutes. I can’t believe that y’all guys can walk in here and tell me y’all took every bit of my money out of the bank.”
After law enforcement cleared McLellan’s store, he drove to Lumbee Guaranty Bank. The agents had been there hours earlier and emptied his account, McLellan recalled, walking out of the building with a cashier’s check.
McLellan walked out of the bank with nothing.
>>> After Having His Motel Seized by the Government, Victim of Civil Asset Forfeiture Reflects on His Fight
Unknowingly Breaking the Law
Though he didn’t know it at the time, McLellan committed structuring violations when making cash deposits of less than $10,000.
McLellan himself doesn’t handle the deposits—that’s his niece’s responsibility—and a bank teller had previously advised her to make deposits of less than that amount. If cash deposits totaled more than $10,000, the bank had to file additional paperwork, the teller said.
“[Agents] asked if I knew what it was,” McLellan said of structuring. “I didn’t know what it was then, but I’ve learned a lot about it now.”
Structuring laws were originally put in place to catch drug trafficking and money laundering, but more and more instances have arisen where innocent Americans have committed structuring violations without even knowing it.
For unknowingly committing a structuring violation, the government seized all of the money in McLellan’s bank account by using a section of civil asset forfeiture laws that regulates cash deposits.
Civil asset forfeiture is a procedure that allows law enforcement to seize property if it’s suspected of being related to a crime. The practice began decades ago with good intentions.
However, law enforcement agencies have been using civil asset forfeiture to seize property and money for profit.
Between 2005 and 2012, the IRS seized $242 million for structuring violations.In recent years, seizures executed because of structuring violations have increased dramatically. In 2005, the Internal Revenue Service made just 114 structuring seizures. By 2012, that number had risen to 639. During that same time period, the agency seized $242 million for structuring violations.
While banks must submit reports to the Department of the Treasury for cash deposits of more than $10,000, the government also receives “suspicious activity reports” on deposits below that threshold, Robert Johnson, a lawyer for the Institute for Justice and McLellan’s attorney, told The Daily Signal.
It’s likely the government received a suspicious activity report detailing McLellan’s deposits, which is how he “came onto the government’s radar.”
Johnson also noted that the IRS frequently teams up with local law enforcement to look through suspicious activity reports. By seizing property and money through the Department of Justice’s Equitable Sharing Program, law enforcement agencies share the proceeds of the forfeiture.
“The IRS deputizes these local law enforcement officers to go through suspicious activity reports and to identify cases where people are subject to forfeiture,” Johnson said. “So you have somebody who is not a federal official and yet is deputized to be enforcing federal law.”
In McLellan’s case, an affidavit was completed by a North Carolina law enforcement official, which indicated to Johnson that it was a state official likely combing through these suspicious activity reports who flagged the Fairmont convenience store, he said.
“The government has a financial incentive to broadly apply the forfeiture laws,” Johnson said. “When an agency like the IRS takes money under the forfeiture laws, that money goes back into the pockets of the agency and it’s available to the IRS to fund law enforcement activities without appropriation from Congress. It’s a powerful incentive for law enforcement to abuse civil forfeiture laws.”
>>> How California Cities Are Making Millions Seizing Property and Money From Law-Abiding Citizens
L&M Convenience Mart in Fairmont, N.C. (Photo: Institute for Justice)
Recognizing the increase in structuring violations from Americans who unknowingly violated the law, the Internal Revenue Service announced last year it would only pursue structuring cases if the money was tied to a crime.
Then, in March, the Justice Department announced it, too, would only pursue structuring cases if the defendant had been charged with a crime or if the money was used for criminal activity.
“Appropriate use of asset forfeiture law allows the Justice Department to safeguard the integrity, security and stability of our nation’s financial system while protecting the civil liberties of all Americans,” then-Attorney General Eric Holder said at the time.
During a February 2015 hearing on civil asset forfeiture, IRS Commissioner John Koskinen was asked broadly about McLellan’s case, in which there were no criminal charges pending or illegal activity conducted.
“I can tell you there hasn’t been a day that’s gone by that I don’t think $107,000 is a lot of money to me. To make it and have it taken—it’s not right.” said Lyndon McLellan.“If that case exists, then it’s not following the policy,” Koskinen told lawmakers on the House Ways and Means Oversight Subcommittee.
The policy change, though, didn’t stop the IRS from seizing McLellan’s money.
“I can tell you there hasn’t been a day that’s gone by that I don’t think $107,000 is a lot of money to me,” McLellan said. “To make it and have it taken—it’s not right.”
(Photo: Institute for Justice)
Months after seizing McLellan’s money, the federal government offered him 50 percent of his money back if he agreed to a settlement deal by March 30. Such settlement offers occur frequently in civil asset forfeiture cases, Johnson said, as victims often opt not to pursue years of litigation and lawyers fees.
McLellan declined the offer, because for him, the government’s seizure of his $107,000 is a matter of what’s right and wrong.
“I guess I’m old school. If you’re wrong, you’re wrong. If you’re right, you’re right. And in this case, I feel like they’re wrong,” he said. “And I was raised on—preached to about—what would be right and what would be wrong.”
“In criminal cases, defendants are innocent until proven guilty. Civil forfeiture cases flip this basic legal tenent on its head,” said Jason Snead of The Heritage Foundation.Now, as is often the norm in civil asset forfeiture cases, McLellan must appear in court to prove his innocence. And it’s that practice that has policy experts calling on Congress to reform civil asset forfeiture laws.
“In criminal cases, defendants are innocent until proven guilty. Civil forfeiture cases flip this basic legal tenent on its head,” Jason Snead, research associate at The Heritage Foundation’s Edwin Meese III Center for Legal and Judicial Studies, told The Daily Signal.
“Once the government shows that your property is subject to forfeiture, the burden is on you as the owner to disprove the government. In effect, you are asked to prove your own innocence in order to win back your property. That is a high hurdle to clear.”
For McLellan, the thought of the government seizing citizens’ hard-earned money and property without their knowledge still puzzles him.
“It’s not fair to the American people who work for a living that one day they can knock on the door, walk in their businesses, and say, ‘We just took your money,’” McLellan said. “ … I always thought your money was safe in the bank, but I wouldn’t say that now.”
http://dailysignal.com/2015/05/11/the-irs-seized-107000-from-this-north-carolina-mans-bank-account-now-hes-fighting-to-get-it-back/
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