» 2003

Animal Health News & Notes for June 27, 2003 6/27/2003

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Brakke Consulting’s
Animal Health News & Notes for June 27, 2003
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES

>  ConAgra Foods reported results for the fourth quarter and year ended May 25, 2003.  Sales for the fourth quarter declined to $3.9 billion from $5.9 billion last year. Fiscal year sales were $20 billion, a decline from $25 billion last year. As a result, operating profit for the year decreased 1% to $1.9 billion.  The company in fiscal 2003 divested fresh beef and pork, seafood, and several cheese operations, and reached an agreement to sell its chicken operations.  (Meating Place)

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BRAKKE CONSULTING, INC.
When The Time is Right

Are you interested in growing your business by purchasing another company, product line or technology?  Have you been thinking about selling your company, product line or technology?  Have you considered merging your company with another firm to improve shareholder value? Brakke Consulting, Inc. assisted many clients with mergers, acquisitions and divestitures over the last few years.  Contact information for all offices are available on our website at www.brakkeconsulting.com.

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COMPANY NEWS RELEASES

>  Elanco announced that the FDA has approved Optaflexx, a new cattle feed ingredient that increases live weight gain, improves feed efficiency, and increases red meat yield.    Optaflexx is mixed in the diet and given during the final stage of the finishing period, and is included in minute amounts. (company press release)

>  The Butler Company announced that senior management, along with Heritage Partners, Inc., has acquired all the outstanding stock of The Butler Company.  Heritage Partners specializes in equity recapitalization for privately held companies, and currently has over $1.4 billion of capital invested in various companies.  Financial terms were not disclosed. (company information)

>  PETCO Animal Supplies, Inc. announced the sale by selling stockholders of 1.88 million shares of common stock registered under its existing shelf registration statement in a privately negotiated transaction at a price of $22.335 per share. PETCO will not receive any proceeds from the sale of the shares by the selling stockholders. PETCO also announced that it will withdraw the shelf registration statement covering primary shares promptly following the closing of the sale. Upon the withdrawal of the registration statement, no shares will be registered for sale on behalf of either PETCO or any selling stockholders. (Business Wire)

>  Tyson Foods Inc. pled guilty to 20 felony violations of the federal Clean Water Act in Missouri and agreed to pay $7.5 million in criminal and civil fines. Under an agreement with the US attorney's office in Kansas City and the environmental crimes section of the US Justice Department, Tyson admitted that it illegally discharged untreated wastewater from its poultry processing plant near Sedalia, Mo., into a tributary of the Lamine River. (AnimalNet – Knight Ridder Tribune)

>  Seaboard Farms announced an agreement with Farm Animal Care Training and Auditing, LLC (FACTA), to conduct a process for unannounced third-party animal welfare audits. FACTA conducts independent, professional, science-based animal care training and auditing services based on individual farm benchmarking by credentialed auditors and educators. (PRNewswire)

>  Centurion Poultry Inc and Hubbard LLC (a subsidiary of Merial) announced that Centurion has acquired Hubbard’s layer chick hatchery in Pennsylvania.  The sale supports Hubbard’s decision to exit layer breeding to focus on chicken and turkey genetics.  Centurion already operates eight hatcheries. Financial terms were not disclosed. (Feedstuffs)

>  Focus Technologies announced that it has completed clinical trials on its West Nile Virus (WNV) IgG and IgM ELISA diagnostic kits and has filed a 510(k) application with FDA.  There are currently no West Nile Virus FDA-cleared kits on the US market. Focus' products are based on protein antibody technology licensed from the Centers for Disease Control and Prevention (CDC). Focus already performs testing for WNV in its reference laboratory in Cypress, California. (PRNewswire)

>  CANADA   Pet Valu Inc. filed a US$45 million suit against its former and current company directors, alleging that the directors personally profited by making a bad financing deal for the company.  Pet Valu operates 365 stores in Canada and the US. (Pet Product News)

>  CANADA   Maple Leaf Pork locked out hundreds of workers at a Winnipeg pork plant after they voted against a new labor contract proposed by the company. Maple Leaf said it was immediately suspending operations at its plant in Winnipeg after more than 460 hourly employees at the plant voted 55% against accepting a deal. The plant employs 600 people in total. The contract expired April 30, but negotiations continued until June 19, when the two sides came to a tentative agreement. Any new talks will start from scratch. (Meating Place)

>  NEW ZEALAND   PPL Therapeutics Ltd announced it is pulling the plug for at least three years on New Zealand's first transgenic livestock field trial, which involves more than 4000 sheep. No details have yet been announced on the fate of the New Zealand flock of genetically engineered sheep producing milk containing a human protein, now that PPL has canned its plans to develop a lung drug extracted from the GE milk. The milk was to be taken from the ewes, frozen and sent to Edinburgh for the removal of the protein recombinant alpha-1-antitrypsin (rAAT). (AnimalNet – New Zealand Herald)

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BRAKKE CONSULTING ANNOUNCES
UPCOMING MULTIUSER STUDY ON
VETERINARY DRUG COMPOUNDING

In the past year or two, the exhibit halls at veterinary conferences have seen a proliferation of veterinary compounding pharmacies.  In response to frequent questions about this topic, Brakke Consulting will be conducting a study of the phenomenon of veterinary compounding.  The study will answer questions such as

- what do veterinary compounders offer?
- what types of companies are offering compounding services?
- how many and how big are they?
- how frequently are veterinarians using compounding services?
- are there differences in veterinary usage between equine and small animal practitioners?
- are veterinary compounders taking business away from traditional pharmaceutical manufacturers?

The study will be completed in July 2003, and is available at a price of $3,250.  For more information, please call 972-243-4033 or email info@brakkeconsulting.com .

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ANIMAL HEALTH NEWS

>  GERMANY   The export of live poultry and hatching eggs from all of Germany to other EU Member States and third countries can restart. The restrictions on the Land of North-Rhine Westphalia were imposed after an outbreak of avian influenza on May 13. The rapid and effective action taken by the German authorities allowed them to control the disease and limit it to one single outbreak. (AnimalNet – EU)

>  The head of the World Trade Organization stated that he hasn't seen the “political will” among government ministers to resolve differences over opening international trade on farm products. Three months after they missed a self-imposed deadline to agree on a blueprint for agriculture, the ministers at an informal meeting of WTO members struggled to find any common ground over the future of trade in agricultural goods. Much of the blame for the agriculture problem fell on the European Union, which is in the midst of difficult internal negotiations to reform its $50 billion farm subsidy program. Many countries say those sums make it impossible for their producers to compete with EU exports. Brussels also wants to see some of its concerns taken into account, including animal welfare, consumer safety and protection of the environment and rural communities. It also is demanding rights to use place names to identify food traditionally made there - such as Roquefort cheese or Parma ham. The United States says it has made substantial offers to cut its own farm support and import tariffs, but the EU says Washington too pays out billions of dollars to its farmers. (AP)

>  US   Government officials and farm groups are developing a network that would tag livestock at birth, allowing them to be tracked from birth to consumption.  The developers have not decided what markings to use and are not certain whether they want to make them a universal requirement. The US does not have a system for tracking cattle or sheep, although pigs have been identified with tags or tattoos since 1988.  An official with the National Institute for Animal Agriculture predicted that microchips would replace tags within a few of years. (AP)

>  JAPAN   Japan will wait until September before requiring US beef exporters to label their product to say where it was raised and processed, according to UDSA. The new deadline will give US officials more time to evaluate reports on a case of BSE in Canada before deciding whether to resume beef and cattle trade with Canada. Japan had planned to impose the new restrictions on imports of U.S. beef by July 1 out of concern that it could contain meat from Canada. (AP)

>  NEW ZEALAND   New Zealand's livestock producers are criticizing a proposed tax on the flatulence emitted by their sheep and cattle. The move is part of the Wellington government's action to meet its commitments under the Kyoto Protocol on global warming. Some scientists estimate that methane emitted by farm animals is responsible for more than half of the New Zealand's greenhouse gases. New Zealand farmers argue that taxpayers should pay for the research, because reducing the emissions benefits everyone. (Meating Place)

>  US   If the Nuclear Regulatory Commission gives its approval, and indications are it will, the nation's first self-contained, gamma irradiator specifically designed to process meats, poultry and spices will be operational by Labor Day. Purchased by CFC Logistics from Gray Star Inc., the cobalt-60 irradiator is located in CFC's 4.4 million cubic feet cold storage warehouse and logistics operation in Penn. CFC Logistics Inc. is a subsidiary of the Clemens Family Corporation, which also owns Hatfield Quality Meats, Inc., Wild Bill Foods, and Country View Family Farms. (Meating Place)

>  EU   Guidelines to explain the EU's import requirements for animals and animal products have been produced by the European Commission's Food and Veterinary Office (FVO).
The guidelines are part of efforts to facilitate safe food trade with third countries. The guidelines are based on existing legislative requirements and specific needs identified by FVO inspectors in their contacts with third country partners.
The aim is to provide service-oriented explanations of the sometimes complex EU legislation.  (Wattnet Meatnews)

>  US   South Dakota Department of Wildlife has donated a number of samples of deer/elk blood to GeneThera, Inc. to be tested for Chronic Wasting Disease (CWD) using GeneThera's live animal blood test. These samples have been tested using Colorado State University's current standard test, and will be corroborated by a veterinary clinic in Minnesota.  The current standard test is not a live test; instead, the deer/elk's head is separated from the carcass, packaged in ice and sent to CSU. Once in the laboratory, a sample of the animal's brain stem is dissected and given to a scientist to identify whether the disease is present.  (Business Wire)

>  US   An international biotechnology conference began Monday with the US agriculture secretary hailing genetically modified food as a tool to reduce global hunger and demonstrators outside decrying it as a health threat.  The conference, sponsored by the USDA, is focusing on farming methods, irrigation and pest management to help developing countries cut world hunger by 2015, a goal set by agriculture secretaries at the World Food Summit last year. The debate over genetically modified foods is intensifying, with the US demanding that the World Trade Organization force the European Union to end its ban on genetically modified food. EU ministers did not attend the conference. The USDA has closed the conference to the public and certain events to the media, citing security reasons. (AP)

>  US    Lousiana State University announced that one of their researchers has developed a revolutionary process to produce proinsulin (which can be processed into human insulin as well as other proteins and peptides) in poultry eggs. In early work with quail, the birds not only produce proteins in their eggs but pass the traits on to subsequent generations. The process is based on patented and patent-pending procedures developed using a "vector" that introduces specific genes into poultry. The patents have been licensed to TransGenRes LLC, a biological manufacturing company. (AnimalNet – LSU AgCenter)

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BRAKKE CONSULTING VIEWPOINT

Several of the stories this week seem to focus mainly on food safety issues of one type or another.  The current Biotechnology Conference in Washington DC has been a magnet for various groups opposed to scientific advancement.  Educating the public about management practices related to the care and safety of production animals needs to be a priority.  The production of animal protein and food grains seems to be one of the most misunderstood issues in the consumers’ minds.

As we all approach the 4th of July week here in the US, we all need to make sure that our friends and contacts  understand the importance of current and new science in producing safe quality food at reasonable prices.  Each of us can make a difference by raising the merits of the industry whenever we have the opportunity. We need to help the public understand what a value they're getting today.

Have a great weekend.

Ron Brakke

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