BEEF bits

Oct 9, 2009
by WLJ


BEEF bits


JBS delays stock IPO

JBS S.A. said the company will wait until January to make an initial public offering (IPO) of its U.S. operation in order to complete the acquisition of Pilgrim’s Pride Corp. and complete its merger with Bertin S.A., a former Brazilian competitor. JBS S.A. announced Sept. 16 it was acquiring 64 percent of poultry giant Pilgrim’s Pride for $2.8 billion, a transaction expected to be complete in December. The company had filed a request for a $2 billion IPO with the U.S. Securities Exchange Commission in July and was expecting approval in September.

R-CALF seeks to block JBS purchase

R-CALF USA has contacted the 17 state attorneys general who, last year, helped to block JBS S.A.’s acquisition of National Beef Packing Co., to request they step in to prevent the merger of JBS and Pilgrim’s Pride Corp. The group will contact the remaining 33 state attorneys general later this week to request the same assistance. R-CALF USA President/Region IV Director Max Thornsberry claims that the merger would reduce competition in the U.S. meat and cattle markets, harming producers and consumers alike. “The foundation for our concern is that beef and poultry are competing, substitute protein products in the consumer market and that the merger would allow JBS to arbitrarily increase and decrease poultry production and/or raise and lower poultry prices within its fully integrated poultry division to manipulate both the demand for beef and the price for live cattle,” Thornsberry said.

Canada takes COOL dispute to WTO

The government of Canada has announced that they will request the World Trade Organization (WTO) to create a Dispute Settlement Panel to rule on the U.S. mandatory Country-of-Origin Labeling (mCOOL) law. According to the Canadian Cattlemen’s Association (CCA), mCOOL has cost Canadian cattle producers over $250 million in the past year as a result of lost sales of Canadian cattle to U.S. feedlots and packers. “At a time when economic conditions make it difficult for people to buy as much beef as they normally do, along came mCOOL to really make things worse,” said CCA President Brad Wildeman. According to CCA, U.S. consumers haven’t demonstrated an aversion to Canadian beef. Rather, the main impact has been large commercial meat purchasers and cattle buyers adopting strategies to avoid the extra costs that result from separately managing meat from Canadian-born cattle versus U.S.-born cattle. Those U.S. companies that have continued to purchase Canadian cattle have reduced their price to cover the extra cost of managing the different inventories.

HSUS gains concessions in Michigan

Egg and pork producers in Michigan have entered into an agreement in Michigan to avoid a ballot initiative which would ban the use of battery cages and gestation crates in hog and egg operations. In return, producers there have agreed with Humane Society of the United States (HSUS) to provide more room for hens and sows. The agreement gives pork producers 10 years to phase out gestation stalls and allows stalls to be used for seven days prior to farrowing, while the sow is nursing her litter and during breeding until sows are confirmed pregnant, allowing for many of the benefits of the gestation crate even if the sows are kept in group housing the remainder of the time. The agreement is similar to one reached in Colorado and will spare livestock groups there the expense of waging a costly public relations battle at a time when the pork industry is already struggling.

New York Times runs E. coli story

The New York Times recently ran a front page investigative story on incidences of E. coli O157:H7 in ground beef, one of several high-profile publications to tackle the issue in recent weeks. The story covered the Cargill recall in 2007 and also focused on the issue of testing of ingredients before they are ground, although no law requires such a procedure. The story was widely criticized by the beef industry as sensationalism.

Agriculture Secretary Tom Vilsack also responded to the article, saying the industry and USDA have taken significant steps toward reducing the incidence of E. coli through food safety protocols.

La Cense Beef receives grass-fed label

USDA issued its first grass-fed certification to La Cense Beef of Dillon, MT, the company said last week in a news release. USDA created the grass-fed standard in order to verify companies’ claims of raising cattle on a 100 percent grass-fed diet. The standard states, among other requirements, cattle only can consume grass and forage throughout their lifetimes, with the exception of milk before weaning. La Cense officials said the company underwent a “rigorous” thirdparty audit process, including a review of all ranching practices, its structure and management, employee training, feed inspection, records and labels, and the administration of all foods and drugs.