» 2001

Animal Health News & Notes for February 2, 2001 2/2/2001

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Brakke Consulting’s
Animal Health News & Notes for February 2, 2001

Copyright © Brakke Consulting, Inc.
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Company Earnings Releases

>  Tyson Foods, Inc. reported first quarter earnings were $27 million compared to $57 million for the same period last year. Total first quarter sales were $1.74 billion compared to $1.78 billion last year, a decrease of 2.0%. (PRNewswire)

>  The Procter & Gamble Company reported that Iams continued to exceed expectations in the second fiscal quarter ended December 31, 2000, as the expansion into new retail channels has delivered substantial growth, while the brand continues to be number one in pet specialty outlets. Specifics were not provided.  (PRNewswire)

>  Colgate Palmolive reported  that Hill's increased fourth quarter sales and unit volume each by 5% in an impressive showing against the very strong year-ago period.  Operating profit also rose in the quarter. Hill's-U.S. increased consumption of Science Diet in the specialty retail channel, where its growth is outpacing category growth, and also enjoyed increased sales of Prescription Diet in the veterinary channel.  New Science Diet products for Sensitive Skin and Sensitive Stomach in dogs and cats had a very successful sell-in, with national TV advertising beginning this month. The reformulation of the entire Science Diet line with a proprietary antioxidant formula drove growth as well. International growth was strong across Europe, Japan, the South Pacific and Latin America. New product launches including Science Diet feline Hairball Control helped drive growth in Europe and Japan, as did effective in-store/in clinic merchandising programs. (Business Wire)

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Company News Releases

>  New Management Consulting Services: Brakke Consulting announced that Ken Berkholtz has joined the company on February 1 as a consultant, with a focus on outside sales training and recruiting for sales positions and middle management positions.  Ken has spent 28 years in the animal health business, with companies including Pitman Moore and Mallinckrodt.  He spent the past nine years in distribution with Sunbelt Veterinary Supply and NLS.  "Ken's vast field sales management and training experience will be a valuable addition to Brakke Consulting's services", says Ronald S. Brakke, President. (company press release)

> Pilgrim's Pride Corporation and WLR Foods, Inc. jointly announced that, following the approval of the merger by WLR Foods stockholders on January 26, they have completed the acquisition of WLR Foods by Pilgrim's Pride Corporation in a cash merger. Pilgrim's Pride paid approximately $234.5 million in consideration for the WLR Foods shares, and also repaid approximately $45.5 million of WLR Foods debt.  Pilgrim's Pride Corporation financed the merger through a combination of cash on hand and borrowings under its credit facility. With the completion of the merger, Pilgrim's Pride Corporation becomes the second largest chicken and fourth largest turkey company in the United States and remains the second largest chicken company in Mexico. (PRNewswire)

>  Federal regulators have recently sued unknown defendants for allegedly using advance knowledge of Nestle's $10 billion purchase of Ralston Purina to make illegal profits trading in Ralston stock options. The SEC said it doesn’t yet know who is involved because they did the insider trading anonymously through Swiss bank accounts. The SEC is asking the judge to order the defendants to repay the profits they made, to pay civil fines and to refrain from securities-law violations. The agency also is seeking an order requiring the unknown defendants to identify themselves. According to the SEC, potential profits from selling the options could exceed $300,000. (Pet Food Industry)

>  AviGenics, inc. and Demegen, Inc. announced the companies have expanded their research and development collaboration for generating disease resistant poultry.  Under the agreement, Demegen has granted a worldwide, exclusive license to AviGenics for use of its proprietary antimicrobial peptide library in the avian field.  AviGenics will make use of the peptides to develop chickens with resistance to a wide range of diseases.  The partnership also includes a license to AviGenics for novel technologies useful for creating transgenic poultry. Under the expanded collaboration, Demegen will provide proprietary peptides that will impart resistance to Salmonella and Marek's disease, among others.  Salmonella resistant lines of poultry will reduce the risk of human health problems associated with the disease. (PRNewswire)

>  DirectAg.com announced that Boehringer Ingelheim Vetmedica Inc. has become a new e-business partner. Boehringer Ingelheim Vetmedica Inc. joins Farm Progress, Vance Publishing, and several other leading livestock industry companies as a Directag.com partner. With this new partnership, DirectAg.com continues to expand its offerings for cattle producers. Producers will now be able to purchase through DirectAg.com the full line of Boehringer Ingelheim Vetmedica Inc. cattle products. (company press release)

>  One2One Care announced a co-branded site agreement with iWon.com, one of the fastest growing and leading Internet portals, to provide unique pet-related content to iWon users.  The co-branded site will be an integral part of iWon’s new Pets channel, which the company anticipates will be launched at a later date. (company press release)

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  BRAKKE CONSULTING, INC.
       Communications Consulting Services

One of the largest yearly investments most companies make is in Advertising and Promotion.  When was the last time you seriously evaluated your program?  Are you using the right mix of sales promotion, public relations, database marketing and advertising?  Do you have a customer retention program?  Are you taking advantage of global synergies?  Do you have an Internet strategy, or merely a web site?  Are your communications agencies performing?

Brakke Consulting has helped several companies evaluate and improve their marketing communications programs.  Senior Consultant John Volk has more than 25 years of experience in animal health advertising and public relations, and pioneered direct-to-consumer advertising for companion animal products.

If you are interested in improving the return on your A&P investment, contact John Volk in the Chicago office of Brakke Consulting, (773) 327-4941, email: volkchi@aol.com

Brakke Consulting has the experience, insight, abilities, and contacts that provide our clients with the highest quality services in the animal health, pet, veterinary, and specialty chemicals markets.  Please contact any of our offices for a confidential consultation on our range of services.  Contact information for all offices are available on our website at www.brakkeconsulting.com and click on a starred location on the world map.

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Animal Health News

> The FDA announced that a very low level of meat and bone meal was found in the feed fed to cattle at a Gonzales, Texas, feed lot.  The FDA has determined that each animal, which weigh approximately 600 pounds, could have consumed, at most and in total, five and one-half grams (approximately a quarter ounce) of prohibited material. FDA said that it is important to note that the prohibited material was domestic in origin and therefore unlikely to contain infected material since there has never been a case of bovine spongiform encephalopathy (BSE, commonly referred to as mad cow disease) in the U.S. Despite the small risk, Purina Mills, Inc., which provided the feed, is voluntarily purchasing all 1,222 of the animals held in Texas that were mistakenly fed the animal feed containing the prohibited material. Therefore, meat from those animals will not enter the human food supply. (DirectAg)

>  The German Consumer Minister called for a general ban of antibiotics for pigs, saying she would push to outlaw the four specific ones currently allowed in the European Union. The EU food safety Commissioner allegedly backed her plan. The four antibiotics that the Minister wants outlawed are: salinomycin-natrium, monensin-natrium as well as avilamycin, and flavophospholipol. (AnimalNet - Reuters)

>  Germany agreed to European measures to slaughter up to 400,000 cattle suspected of having mad cow disease.  Until November, Germany had insisted it was free of bovine spongiform encephalopathy, or the mad cow disease.  Germany said it would take part in a voluntary European Union cull of almost 2 million cattle most at risk. Germany could pay as much as $350 million for the slaughter, including compensation to farmers.  (UPI)

> The USDA reported that the number of operations with cattle totaled 1.08 million during 2000, down 2% from 1999 and 4% below 1998. Beef cow operations in 2000 were down 2% from 1999 and 3% below 1998 and milk cow operations were 5% below last year and 10% below two years ago. (DirectAg)

>  European Union's 15 member states produced 206 million pigs in 2000, almost exactly the same number of slaughter pigs as in 1998.  European Union producer prices for pigs rose by 21.2% in 2000 after showing declines of 27.3% and 8.1% in the previous 2 years. (Pig International)

>  Research at Texas A&M University has shown that a combination of electrical stimulation and aging had a positive effect on tenderness in round, chuck, rib and loin cuts.  The checkoff-sponsored research helps the cuts achieve optimal tenderness in a shorter period of time.  (TCFA Newsletter)

>  Early tests at the Agricultural Research Service of a new vaccine against mastitis caused by Staphylococcus aureus bacteria appear to be effective against the 50 – 60% of staph-caused mastitis cases in the US that have eluded current vaccines. The ARS developed the vaccine with the biotechnology company Nabi, who identified a single serotype that appears to provide the component missing in earlier vaccines. Large-scale tests to confirm its ability to prevent infection have not yet been done. But it is proving effective at curing intractable mastitis cases when combined with antibiotics. (Healthy Animals Newsletter)

>   Common spices are being added to livestock feed in Europe to replace health-promoting antibiotics banned by the European Union, and some properly applied organic substances appear to be just as effective.  But until feed makers and pig producers can find out how to use these natural products correctly, they probably won't be too popular with North American producers. Feed formulators in Europe are basing their feed rations on poor information because they haven't had enough time to fully research herb and spice treatments. A wide variety of substances are used for various purposes. Cayenne, celery, cinnamon and bay leaves are being used to increase feed intake. (AnimalNet – Western Producer)

>  The first Dutch-made AMS Liberty robotic dairy operation in North America is now operational in Ontario.  Cows walk through the electronically controlled gate and heads to one of four milking stalls, called boxes.  She enters the nearest box, where a metal door shuts and a feed tray with a handful of tasty pellets pops out.  The cow stands very still, waiting for a robotic arm to swing underneath and for three sensors to search for her teats. When detected, the milking cups attach themselves one by one, and a warm swish of water washes off any dirt, along with the first few drops of raw milk, which can contain bacteria. When the cow is through milking, about seven minutes later, the gate opens and the cow rejoins the herd.  The new technology cost about one-third more than a traditional milking parlor, but the equipment means a herd no longer has to wait for a human to prepare them to be milked by machine.  Robotic milkers have been available in Europe for close to a decade. (AnimalNet – Toronto Star)

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Agribusiness News

>  Aventis CropScience has reached agreements for the  divestiture of three crop protection product businesses to several third parties.  These divestments are part of the company 's portfolio streamlining program and are another step in the process, which aims to simplify the Aventis CropScience product portfolio and to focus on the new, more profitable products. The sales contracts cover the global businesses including the manufacture, registration packages, formulations, trade marks and know how. Bifenox, Chlormephos, and Dodine (Doguadine), are the three active ingredients divested. (company press release)

>  BASF AG is reportedly interested in taking a stake in Aventis Crop Science, the joint pesticide unit in which Aventis has a 76% stake and Schering AG holds the remaining 24%. Aventis has already said it either wants to list the unit or sell its stake. The company intends to expand its traditional chemical operations, the special product business and its insecticide division. (e-markets – AFX)

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Brakke Consulting Viewpoint
 
The US cattle and animal industry hopefully dodged a big bullet this week. The reported feeding of animal protein to 1200 feedlot animals here in Texas made world news for the past few days.  Yet this morning in driving to work I listened to a portion of the Diane Rehms show on public radio that had a whole hour segment on BSE.  While this program was reasonably balanced it still is a full hour on a topic related to FOOD SAFETY.  The commentator continued to press the FDA and USDA officials over the quality of the compliance programs to monitor and protect the food supply.

I would hope it is obvious to everyone reading this newsletter that for the cattle and animal health industries own good we must have 100% compliance to these regulations.  Nobody has the right to "bend" or "wink" at these rules no matter whether science exists or not to support the claims.  This past few days has again put a focus on food safety that will impact beef sales.  I'll be attending the National Cattlemen's Beef Association meeting in San Antonio the next two days.  It will be interesting to see if anything has been learned from this latest event. Or will some still be charging forward ignoring the interests of the industry at large and the meat consuming public?  Let's take it seriously, our jobs depend on FOOD SAFETY NOT JUST INCREASED PRODUCTION AT A LOWER COST.

[Ron Brakke]
 
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