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Animal Health News & Notes for February 22, 2008 2/22/2008

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Brakke Consulting's
Animal Health News & Notes for February 22, 2008

Copyright © Brakke Consulting, Inc.
 
Editor: Lynn Fondon, DVM, MBA
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IN THE NEWS:
 
earnings news
Maple Leaf Foods
Menu Foods
Nestle
VCA Antech
Webster
 
other news
AFP Imaging
AgriLabs
Allflex USA
Butler
IDEXX
Pena Branca
PetSmart
RNL Bio
Smithfield
Tyson Foods
 
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COMPANY EARNINGS RELEASES
 
> Nestle reported financial results for 2007.  Sales for the PetCare division were CHF 12.1 billion ($10.7 billion), representing 4% real internal growth and 7% organic growth. This was driven by strategic brands, new product launches and continued product mix improvements across the world. Brands in the super-premium and high premium segments performed particularly well. (company press release)
 
> Patterson Companies, Inc. reported results for the third quarter of fiscal 2008 ended January 26. Sales of the Webster Veterinary unit increased 14% in the third quarter to $107.6 million. (Business Wire)
 
> Menu Foods Income Fund reported a net loss of ($62.1 million) on sales of $245 million for fiscal year 2007, down from $6.4 million in net income on $356 million in sales during 2006. The recalls of last year directly cost Menu Foods $55 million, but they also cost the company "significant sales" after it suspended shipments of all cuts-and-gravy products. Customers who accounted for approximately 37% of Menu's volume in 2006 have since stopped buying its products. (Petfood Industry) 
 
> Maple Leaf Foods Inc. reported results for the three months ended Dec. 31, 2007. The company posted a net loss of (C$22.1 million) (US$22.5 million) compared with a loss of (C$11.6 million) in the year-earlier period. Sales dropped 6% to C$1.27 billion (US$1.29 billion). (Meating Place)
 
> VCA Antech reported financial results for the year ended December 31, 2007. Revenue increased 17.6% to a twelve-month record of $1.16 billion; net income was $121.0 million. Laboratory revenues for the year increased 14%, while Animal Hospital revenues increased 19%. (company press release)
 
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COMPANY NEWS RELEASES
 
> IDEXX Laboratories announced that its Board of Directors has authorized the repurchase by the Company of an additional four million shares of its common stock under its ongoing share repurchase program. These shares are in addition to the 2,852,000 shares remaining as of December 31, 2007, under a previous Board authorization.  (company website)  
 
> Butler Animal Health Supply announced plans to open a new 22,000 sq. ft. warehouse branch in Denver, CO, this month. The facility will serve Colorado and southeastern Wyoming. (Feedstuffs) 
 
> AgriLabs announced a joint venture with Allflex USA to provide animal-identification products and support services to livestock producers. As a result, AgriLabs' AgriTag product line will be manufactured by Allflex. (company press release)
 
>  AFP Imaging Corporation announced the launch of the new high-performance 16-megapixel Digital-VetTek whole-body imaging system. The Digital-VetTek CCD Imaging System uses a patented optical design and three-mirror light path to capture more data, resulting in superior quality high-resolution images. (company press release)
 
> PetSmart introduced the new PetSmart PetPerks Visa card. The new credit card not only offers a  competitive rate and a great rewards program, it also allows consumers to put a favorite photo of their pet right on the card so they’ll never have to leave home without their pet again. (Business Wire) 
 
> Smithfield Foods announced that it will cut its US sow herd by 4 - 5% (40,000 to 50,000 sows) to improve efficiencies in its live production operations. The move will ultimately result in production of 800,000 to 1 million fewer market hogs annually. Smithfield currently raises 18 million market hogs per year. (Meating Place) 
 
> Tyson Foods Inc. announced plans to acquire Brazilian chicken processor Pena Branca for 130 million Reals (US$74.4 million). The acquisition would give Tyson Foods the company's first chicken processing facility in Brazil, the largest chicken exporter in the world. (Feedstuffs)
 
> RNL Bio of South Korea reported that it has taken its first order for a cloned dog. The firm says that a customer from California has paid $150,000 to clone her pit bull terrier from tissue preserved in 2006 when the dog died.  RNL Bio says it can clone up to 30 dogs a year at present, and expects this number to rise to around 200 by 2010. It produced the world's first cloned dog, an Afghan hound, in 2005. (Animal Pharm)
 
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ANIMAL HEALTH NEWS
 
> US - BOVINE TB  The Minnesota Board of Animal Health announced that a Beltrami County beef cattle herd has tested positive for bovine tuberculosis. This is the fourth positive herd detected since October 2007, and it will likely result in the downgrade of Minnesota's bovine TB status from Modified Accredited Advanced (MAA) to Modified Accredited (MA), as required by the USDA Code of Federal Regulations. (Cattle Network)
 
> US - BEEF RECALL  The USDA recalled 143 million pounds of ground beef produced by Westland Hallmark Meat Company, the nation’s largest beef recall. The recall was prompted by an undercover video taken at the company’s slaughter facility at Chino, CA, and released by the Humane Society of the United States.  The video shows workers shocking, kicking and shoving downer cattle with forklifts in an effort to get the cattle to stand, presumably so they could pass inspection prior to slaughter. Federal regulations prohibit non-ambulatory or downer cattle from entering the food supply, both in an effort to implement humane slaughter standards and because the animals may pose a higher risk of disease. (Drovers Alert)
 
> US - ANIMAL WELFARE POLICIES  Safeway officials announced that the grocery chain will set new policies to work with pork and poultry suppliers that prioritize animal welfare. The retailer will increase the amount of pork it purchases from North American suppliers that are phasing out gestation-sow crates. The plan is to purchase an additional 5% of Safeway's pork from such suppliers in the program’s first year, 10% in year two and 15% in year three. On the poultry side, Safeway officials will give buying preference to North American processors that use controlled-atmosphere slaughter systems. (Drovers Alert)
 
>  US - E COLI TEST   DuPont Qualicon and the USDA's Agricultural Research Service (ARS) announced a cooperative research and development agreement to develop a new test for E. coli O157:H7. (Feedstuffs)
 
>  US - ORAL CONTRACEPTIVE   Researchers at Texas A&M University are testing a new contraceptive pill for animals that could be administered through baited food to control wild animal populations, and could eventually be used in companion animals. The pill contains a phosphodiesterase 3 inhibitor, which works by inhibiting maturation of the egg to prevent fertilization, but does not inhibit the estrous cycle altogether. The drug can be mixed with animal feed and must be given daily during the critical period. However, it can also be encapsulated to reduce the frequency with which it must be administered. (Animal Pharm)
 
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Western Veterinary Conference
Feb 17-21, 2008
Las Vegas, Nevada
 
The 80th Western Veterinary Conference recorded over 13,400 attendees in Las Vegas this year, including over 6,300 veterinarians, 1,550 technicians, and 2,700 exhibitors.  The conference presented over 730 hours of continuing education, including multiple bioskills laboratories, while the Exhibit Hall showcased over 350 vendors.
 
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BRAKKE CONSULTING VIEWPOINT
 
Congratulations to Dr. Guy Pidgeon and the staff of the Western Veterinary Conference. It was another great meeting for all those participating. The environment was much more pleasant this year with the NBA playing in New Orleans. 
 
Thanks to all of you that participated in our Animal Health Industry Overview and networking reception. We had record attendance at both events. All of us can now relax a bit for a few weeks after the busy start to 2008, with several large meetings being packed into a short period of time. 
 
We continue to believe that the industry is off to a great start for the year with only the a few dark clouds on the horizon. Crude oil closed over $100 per barrel this week and appears to be moving higher, which will put more pressure on the economy. The record high prices for feed grains are a second cost issue for the producers of animal protein. Where is all likely to end? Will manufacturers and producers be able to pass on their costs in price increases in an economy that is struggling? We believe that the industry will be impacted negatively by the current conditions; however, we believe the impact will be minor and we’re not likely to see any negative growth. 
 
Have a great weekend.
 
Ron Brakke
 
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2735 Villa Creek, Suite 140
Dallas, TX  75234    USA