BEEF BITS

Cattle Market & Farm Reports, Editorials
Jun 20, 2007
by WLJ
20, 2005

ConAgra’s Q4 earnings to slump
ConAgra Foods, Omaha, NE, said earnings for its fiscal 2005 fourth quarter will be lower than expected primarily due to continued weak profitability in the company’s packaged meats operations. Those operations continue to be negatively impacted by high protein input costs coupled with inadequate pricing management, the company said. The company recently made several significant personnel changes in its packaged meats operations and expects those changes, along with better pricing management, aggressive cost-savings initiatives, and SKU rationalization, to improve the packaged meat operations over time. The company plans to cut about 1,000 jobs from its total work force of 37,000; the company forecasts that could save about $100 million annually. The company will also merge its packaged meats and deli operations.

Greater Omaha receives QSA from USDA
Greater Omaha Packing Co. received Quality System Assessment (QSA) approval from USDA, which qualifies the company to export to customers in Japan when that market is reopened to U.S. beef products. The QSA signifies that a processor has ties with ranchers and feeders who maintain careful feed, age and genetic records of its cattle, and gives such companies an advantage when the border reopens. Harris Ranch Beef Co., Brawley Beef Co. and Packerland Co. have received similar designations.

Pennsylvania firm recalls beef
Murry’s Inc., Lebanon, PA, recently voluntarily recalled approximately 63,850 pounds of frozen ground beef products, produced last year, because of potential contamination of E. coli O157:H7. All of the products subject to recall contain the production code “40104” and the establishment number “EST. 516A” inside the USDA seal of inspection. The frozen ground beef products subject to the recall include frozen packages of ground beef patties and meatballs with the item codes 06716, 63101, 01357, and 01340 within their labels. All suspect products were produced on April 1, 2004. The recall was made public last week, after FSIS officials indicated there was a food-borne illness in New Jersey apparently linked to the products now being recalled.

State beef brand close to reality
South Dakota's Agriculture Department has filed emergency rules for its South Dakota Certified Beef initiative, putting the program one step closer to becoming a reality. The emergency rules establish the legal authority for the state to administer the voluntary SDCB program in an effort to create a trademarked high-end niche market for South Dakota ranchers, feeders and processors. The program will use similar guidelines to those developed by the USDA for its national animal identification program. A public hearing needs to be held on the issue, and the program could become reality 20 days after.

Washington plant burns down
An accidental fire recently destroyed the Larry Jackson Meats processing plant, Kelso, WA. The meat processing area and coolers were either heavily damaged or destroyed, and all the meat in the plant at the time of the fire was lost. However, a nearby propane tank, car and house were spared. It took crews more than one hour to get the blaze under control, in part because the nearest fire hydrant was about four miles away. Fire crews had to truck water to the site, and about 25 people helped fight the fire. The owner of the plant had turned a propane burner off, but officials believe it was placed too close to the wall and may have already started to burn. The plant underwent a $100,000 renovation in 2000 to expand the 30-plus-year-old business to serve hunters as well as livestock producers.

New BSE case confirmed in Czech Republic
Final tests have confirmed a nineteenth case of bovine spongiform encephalopathy (BSE) in the Czech Republic, an official said. Jan Bazant of the state veterinary authority said that tests for BSE were positive of a four and a half-year-old cow slaughtered last week at a farm in Lodenice, 187 miles east of Prague. Another 250 cows from the farm will have to be slaughtered as a precaution. The Czech Republic’s first case of the brain disease was reported in June 2001. The last previous case was confirmed in April.

Nigerian bull arrested for murder
A bull that stomped a Nigerian bus driver to death in the capital city of Lagos was arrested by a group of Nigerian police and is being held in a city jail. “Do you know what it takes to arrest a mad cow?” one policeman told a local paper. The bull also injured several bystanders before it was taken into custody. The police were trying to find the bull’s owner, who could face criminal charges for failing to keep the bull under supervision.

Quaker Maid gets financing
iCapital Finance Inc., Irvine, CA, has arranged $8 million in financing for Quaker Maid Meats, Reading, PA. iCapital has been working with Quaker Maid to investigate the opportunities set forth by the Community Renewal Act of 2000 and more specifically the utilization of New Market Tax Credits since February. The New Market Tax Credit Program permits taxpayers to receive a credit against Federal Income Taxes for making qualified equity investments in designated CDE's. The credit provided to the investor totals 39 percent of the cost of the investment and is claimed over a seven-year credit allowance period. Quaker Maid has been in business since 1960. It is a family-owned S-corporation with two existing meat processing plants and plans for a third plant in the near future.

Evans acquires processing plant
Evans Foodservice Inc., Swartz Creek, Michigan, acquired specialty meat processor and distributor Otto W. Leibold and Co., Flint, Michigan. Leibold is a USDA-inspected processor of fresh beef, pork, veal, and game. S. Scott Solesby, senior vice president at Evans, said the acquisition “was an attractive opportunity for us because it enabled us to accelerate our growth in center-of-the-plate (products), with which we were struggling a little bit." The acquisition could add 15-20 percent to Evans' bottom line, he added. Solesby said the accounts acquired through the acquisition would enable the company to expand and penetrate the market deeper.

Quick monitor of Washington Farm and Trade Policy Issues
Washington, D.C., lobbyists and congressional staffers say Mike Sommers is expected to replace Chuck Conner as White House agriculture advisor to the president. Sommers, who currently is chief of staff for Rep. John Boehner, R-Ohio, is expected to start his new position around mid-July. Sommers first joined Boehner’s staff in 1999 as a legislative assistant. Boehner is chairman of the House Education Committee and also the senior Republican on the House Agriculture Committee. Conner left the White House to become deputy secretary of agriculture.

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