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Animal Health News & Notes for September 19, 2008 9/19/2008

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Brakke Consulting's
Animal Health News & Notes for September 19, 2008

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
other news
Avicola Itaiopolis
Macedo Agroindustrial
Shandong Xinchang Group
Tyson Foods (Brazil)
Tyson Foods (China)
Throughout the year, Brakke Consulting, Inc., performs market research surveys and studies for client companies.  If your firm needs help assessing the feasibility of a new product or technology, identifying the opinions and trends of consumers, or determining the current market for products, Brakke Consulting, Inc. can build a market study to meet your needs.  We have a database in place of several thousand small animal veterinarians and the ability to custom-tailor surveys of other animal health products consumers.  We also produce syndicated studies in specific animal health market areas. Further information can be found at our website: www.BrakkeConsulting.com or by calling our Dallas office at 972.243.4033.
> Hartz Mountain Corp filed a lawsuit filed against its supplier UFAC (USA) Inc. alleging that the UFAC sold several shipments of dog and cat vitamins to Hartz in 2007 that were contaminated with Salmonella bacteria, leading Hartz to recall several thousand bottles of cat vitamins. Salmonella was also found in Hartz's inventory of dog vitamins, but those were quarantined by the company before they reached store shelves. Hartz is seeking $1 million in damages from UFAC. (AnimalNet – The Jersey Journal)  
> Hydromer, Inc. announced that its T-HEXX Animal Health Division launched two new product lines for mastitis control in dairy cows. The first is the "Green-S" product line with actives "from nature's own botanical gardens"; the second, T-HEXX Syrup, is a highly concentrated 1:9 dilutable post-milking barrier teat dip available with various actives. (Market Wire)  
> Tyson Foods, Inc. announced it has finalized a joint venture agreement with the Shandong Xinchang Group, one of China's leading poultry producers with estimated 2009 sales of $345 million. The deal will give Tyson 60% ownership in vertically-integrated poultry operations consisting of Xinchang's existing assets and include the acquisition of a new poultry processing complex on the east coast of the Shandong Province. The name of the venture will be Shandong Tyson Xinchang Foods Company, Ltd. Financial terms were not disclosed. (NIAA Weekly) 
> Tyson Foods Inc. announced that it has acquired three poultry companies in southern Brazil. The company has signed purchase agreements with Macedo Agroindustrial, a strong retail chicken brand, and new poultry company Avicola Itaiopolis (Avita), both located in the state of Santa Catarina. Tyson also has signed an agreement to have 70% ownership of Frangobras, a poultry company in the state of Parana. All three companies are vertically integrated and offer the potential for international and domestic sales growth. Financial terms were not disclosed. (Meating Place) 
> US - BSE RESEARCH   Research conducted by the National Veterinary Services Laboratories in Ames, Iowa  regarding the causes of BSE has shown that, in addition to being a foodborne disease, it may sometimes be genetic. The research suggests that BSE can also be caused by a genetic mutation within a gene called Prion Protein Gene. A 10-year-old cow from Alabama with an atypical form of BSE was shown to have had the same type of prion protein gene mutation as found in human patients with the genetic form of Creutzfeldt-Jakob disease.  (AnimalNet - EurekAlert)
> US - ANIMAL DRUG USER FEE   The FDA announced rates and payment procedures for fiscal year (FY) 2009 animal drug user fees. For FY 2009, the fee is $246,300 per application for an animal drug application and $123,150 for a supplemental animal drug application which requires safety or effectiveness data.  The generic drug user fee is $41,400 per application for an abbreviated generic new animal drug application for which safety or effectiveness data are required. For complete information, see the Federal Register at http://www.fda.gov/OHRMS/DOCKETS/98fr/E8-21450.htm and  http://www.fda.gov/OHRMS/DOCKETS/98fr/E8-21453.htm.  (CVM Updates)
> US - NEW ANIMAL WELFARE ORGANIZATION  The School of Veterinary Medicine at the University of California–Davis this month launched the International Animal Welfare Training Institute, an animal welfare advocacy organization. The group will examine and address animal welfare issues in many species. Its intent is to take into account the animal welfare concerns of both consumers and farmers, including science-based welfare practices. (Meating Place)
> US - GE ANIMAL DRAFT GUIDANCE   The FDA released for public comment draft guidance on the regulation of genetically engineered (GE) animals. The guidance document is intended to clarify the FDA's regulatory authority in this field, as well as the requirements and recommendations for producers of GE animals and products derived from GE animals. The comment period for the draft guidance, titled "The Regulation of Genetically Engineered Animals Containing Heritable rDNA Constructs," runs for 60 days and closes Nov. 18, 2008. The 25-page document is available online at http://www.fda.gov/cvm/GEAnimals.htm. (FDA)
> US - ANIMAL ID   The USDA announced that it is reserving the use of animal identification numbers with the 840 prefix to animals born in the US to facilitate quick animal origin identification. Under the interim rule, any imported animal that loses its country of origin identification device cannot be retagged using an 840 animal identification number. The rule also makes it unlawful to remove any official animal identification device, including those applied in other countries recognized by APHIS for animals entering the US. (Meating Place)
Wow!! It's been an interesting week in the financial markets, to say the least.  If you're like me you've been overwhelmed by the numerous stories and analyses of the problem and the alternative solutions.  In reality, the problem appears to be so large that there is not one or two magic bullets that will solve the current situation.  In summary, it's a big deal threatening the financial well-being of all of us!
Probably the most important question for our subscribers to consider is “how is this financial market crisis likely to impact the animal health and pet business?”  We'd love to have your analysis and thoughts on this question for our next newsletter issue. You can email them to us at info@brakkeconsulting.com
In the meantime, one has to conclude that our industry will be impacted negatively by the current financial markets.  Just exactly how this will unfold over time as the financial situation begins to resolve itself.  Some areas where there appears to be a consensus include:
  - A reduction in the purchasing of consumer products and services
  - Higher interest rates and a tightening of credit will reduce growth in capital equipment and inventories
  - No significant reduction in the price of feed grains until 2009 at the earliest
  - Continued inflationary pressure on food and energy that will impact discretionary spending
  - The September quarterly report for consumer’s 401K or other retirement account is going to be a shock
Animal health managers will need to continue to juggle the differences in the food-producing and companion animal markets.  The two are likely to be impacted in different ways by this financial crisis.  If you're one of those managers that just received approval for your 2009 budget with significant sales increases expected despite few new product introductions, we’d suggest that you start taking actions to cover the gap.
Have a good weekend and hopefully next week will be more positive!!
Ron Brakke
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