Brazilian merger on track
The largest merger in the history of Brazil’s meat industry appears to be nearing completion. The two companies, JBS S.A. and Bertin S.A., have reached an agreement on exchange ratio of shares. JBS said in a news release that the companies have agreed that the previously announced ownership structure of 60/40 for JBS and Bertin, respectively, falls within intervals recommended by their independent committees and would correspond to an exchange ratio of 32.5 shares issued by JBS for each share issued by Bertin. Meanwhile, the company continues to work on other components of the merger, including a $2.5 billion private equity investment in JBS USA that will help the parent company keep debt in check after its share swap with Bertin. The merger is still subject to regulatory approvals in Brazil.
McDonald’s has second monthly drop
McDonald’s Corp. reported last week that although sales rose 0.7 percent globally in the past month, same-store sales in the U.S. slipped 0.6 percent in November compared with last year. The Oak Brook, IL, company blamed the country’s economy for the second straight month of declining sales. McDonald’s said it is developing new marketing strategies for increasing pressure on its competitors which have been gaining market share with the introduction of lower priced menu items to match McDonald’s Dollar Menu campaign.
Hong Kong expands Canadian trade
Hong Kong has given full market access to Canadian beef, Canadian Prime Minister Stephen Harper announced last week. “Achieving full access to an important market such as Hong Kong sends a strong signal to the entire Asia-Pacific region that Canadian beef is safe and that Canada’s food safety systems are grounded in sound science,” Harper said in a statement. Canadian cattlemen are waiting to hear exact details of whether the action means that Hong Kong will accept all boneless and bone-in beef product from both cattle younger and older than 30 months of age, or all product from younger cattle and only boneless product from older cattle as expected. Hong Kong currently is Canada’s third-largest export market.
Congress targets Cargill plant
After the second recall of the year was announced by Cargill’s Beef Packers Inc. plant in Arizona, Congresswoman Rosa DeLauro, D-CT, said in a news release that USDA should close the plant and undertake a “comprehensive examination into the process at Cargill-BPI to identify and correct any major problems internally or with their suppliers.” The two recalls this year have been the result of outbreaks of salmonellosis traced to beef processed at the plant. The first recall involved more than 825,000 pounds of ground beef. The recall two weeks ago included 22,723 pounds of product. “This is another glaring example of the problems we face in our nation’s food safety system,” said DeLauro. She has been leading the charge in Congress to pass sweeping regulatory changes for the U.S. food production system. Last month, DeLauro asked USDA for a review of the efficacy of the N-60 testing protocol which is used to prevent the spread of E. coli O157:H7.
Beef Board names new CFO
The Cattlemen’s Beef Board (CBB) announced it has hired Katherine Ayers as its chief financial officer (CFO). As CFO, Ayers will oversee all of the board’s financial affairs, including accounting, financial reporting, budgeting, revenue projections, banking, collections and auditing. Ayers has been contracting with CBB for three years, working on contractor compliance audits and state beef council financial reviews. She also has worked as an auditor specializing in nonprofit organizations in the financial departments of EDS and IPS Card Services, and as an auditor for Ernst & Whinney in Fort Worth, TX.
Climate laws would reduce ag output
Regulating climate change will reduce agricultural production in the long run, USDA’s chief economist, Joseph Glauber, told the U.S. House of Representatives in testimony last week. He estimates that by 2015, corn production will fall 1.4 percent below baseline production expected without legislation, leading to an average price of $4.32 per bushel, 20 cents more than the nation would see without regulation. He predicted that fed cattle production would fall 0.4 percent below baseline by 2015 and 3.4 percent below baseline by 2030. Glauber predicted fed beef prices would rise 1.2 percent above baseline by 2015 and 3.9 percent above baseline in 2030.