Surprise in hog inventory
USDA’s quarterly Hogs and Pigs survey, which was released last month, caught the industry off guard, showing a sharp decline in the breeding herd and the number of animals kept for feeding. The report helped to boost hog contracts on the CME last week, which also translated into sharply higher prices being paid for live cattle contracts. Hog producers who have been suffering from below-cost prices are expected to see some improvement in profitability this year. As pork prices rise, it will allow for increases in competing meats as well.
Groups criticize ethanol credit
The American Meat Institute (AMI), along with several allied industry organizations, is protesting a bill introduced by North Dakota Democratic Rep. Earl Pomeroy which will extend ethanol tax credits to 2015. The current tax credits are set to expire at the end of the year, and groups say that the extension unfairly benefits the industry at the expense of livestock and meat producers. The current tax credits, if extended, will provide the conventional ethanol industry with $30 billion over five years, said the coalition.
Organic spending set to increase again
The economic recession has kept a lid on the explosive growth of the organic and natural food industry over the past couple of years, however, as the economy begins to recover, consumers are once again set to resume spending on “green” products. A survey by research firm Mintel shows that, over the next three years, spending increases are likely to bounce back to pre-recession levels. The natural and organic food and beverage category saw rapid growth of more than 24 percent from 2006 to 2008 but stalled during the recession in 2009, with sales up just 1.8 percent. Sales are now forecast to grow nearly 20 percent from 2010 to 2012, indicating that going organic has become a way of life for some, Mintel said. While 21 percent of organic food buyers cut back or eliminated organic purchases during the recession and 20 percent switched to less expensive organic items, almost half of shoppers are buying as much as or more organic food than before.
Senate tackles meat safety
Montana Democratic Sen. Jon Tester introduced the Meat Safety and Accountability Act last week, citing a need for quicker and more stringent responses by USDA inspectors in the event of outbreaks of foodborne illness caused by pathogens like E. coli O157:H7.
The legislation will require USDA’s Food Safety Inspection Service to rapidly trace contaminated meat products and also force more stringent testing by processors. The bill states it is essential that federal meat inspection programs identify all sources, including the slaughterhouse source, of original adulteration and contamination of enteric food-borne pathogens in meat when either lab samples test positive for enteric pathogen adulteration or contamination or when meat that is adulterated or contaminated is found in commerce, including food-borne outbreaks.
Restaurants see positive signs
The National Restaurant Association reported last week that its membership is becoming more optimistic about business conditions. Its monthly survey of restaurant owners showed the best results in more than two years, with the comprehensive index of restaurant activity reported at 99.0, up 0.7 percent from January and at its strongest level since November 2007. Although a number below 100 still signals contraction, it is a sign that the sector could soon return to making positive contributions to the beef sector. The Current Situation Index, which measures current trends in four industry indicators, stood at 96.7 in February, up 0.1 percent from January. Restaurant operators reported negative same-store sales for the 21st consecutive month in February, with the overall results similar to the January performance. In contrast to the trends in the current situation indicators, restaurant operators are increasingly optimistic about improving conditions in the months ahead. The Expectations Index stood at 101.4 in February, up 1.2 percent from January, and its strongest level in 29 months.
FDA seeks input on feed additives
The U.S. Food and Drug Administration (FDA) is looking closely at reformulating regulations governing the use of livestock feed additives, known as veterinary feed directive (VFD) drugs, which are used under the direction of a veterinarian. The VFD regulation, which was put in place in 2001, established requirements for distributing and using VFD drugs and animal feeds containing such drugs. FDA reaffirmed that certain new animal drugs should be approved for use in animal feed only if these medicated feeds are administered under a veterinarian’s order and professional supervision. FDA said it has received a number of informal comments characterizing the current VFD process as overly burdensome. Through the process, FDA is hoping to streamline the regulations to make them more user-friendly.