Animal Health News & Notes for October 8, 1999

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Brakke Consulting’s
Animal Health News & Notes for October 8, 1999

 DuPont announced the completion of the stock and cash merger with Pioneer Hi-Bred International, in which DuPont acquired the 80 percent of Pioneer not currently owned by DuPont.  The value of the transaction is estimated to be approximately $7.7 billion.
 The H.J. Heinz Company announced that it is combining all of its U.S. grocery and foodservice businesses into a Pittsburgh campus to create a $5 billion North American powerhouse of brands and businesses.  As a result, Heinz will relocate Star-Kist Foods, Inc. and its StarKist Seafood and Heinz Pet Products headquarters operations to Pittsburgh.  In an important related development, Heinz announced that it will combine the sales forces of Heinz U.S.A., StarKist Seafood, Heinz Pet Products and Heinz Frozen Food into a single U.S. sales company.
 American Home Products Corporation announced a restructuring of its Cyanamid Agricultural Products business to improve the effectiveness and efficiency of this business unit in light of current conditions in the global farm economy. The actions being taken include approximately 700 position eliminations and certain facility closings worldwide.
 According to NextCard, Petopia.com is the fastest-growing electronic commerce business on the Web.  Petopia.com’s transaction volume increased by 170% in September, NextCard’s eCommerce Index reported. Petopia.com was the only online pet retailer in the top ten, ranking ahead of More.com and Walmart.com
 The Monsanto Company said Monday that it would make no effort to market seeds that produce crop plants that are themselves infertile. Although the possibility of any company’s selling such seeds is years away, and Monsanto has repeatedly said that it has not developed them, its prominence in biotechnology and its plans to purchase a company that has patented such seeds have made it a lightning rod for the furor over what critics have labeled “Terminator” technology.  Seed sterility could be an important tool for assuring that other genetically engineered traits like herbicide resistance do not escape into wild plants. Despite Monday’s announcement, Monsanto might use seed-sterility technology internally, a spokeswoman said.
 CNS, Inc., who manufactures and markets the Breathe Right nasal strip, is developing a nasal strip that eases the breathing of horses during racing and other high-performance events. The strip performed as expected in an initial clinical trial at Kansas State University, and CNS plans to begin selling it during the fourth quarter of 1999.  According to the KSU test, the FLAIR(TM) equine nasal strip makes breathing easier and can reduce exercise-induced pulmonary hemorrhage (EIPH), a common problem for horses.  Initial sales of the product would be through direct fulfillment and catalogs.
 Safe-way, the fourth-largest grocery chain, has reportedly formed an alliance with a group of beef producers to ensure a supply of more consistent quality beef. It has just signed a 10-year agreement with a group called Future Beef Management (FBM).  The link is bound to spur other major retailers to consider such alliances.
 According to new strategic research from Frost & Sullivan, World Agriculture Genomics and Biotechnology Markets, worldwide agriculture biotechnology revenues totaled nearly $843 million in 1998, and are expected to grow annually by almost 34 percent through 2002. Frost & Sullivan’s research includes analyses of the current World seed-crop markets (corn, soybeans, cotton, potato, and canola), along with opportunity forecasts for new products entering the market (transgenic sugar beets and rice).
 Archer Daniels Midland was cited as announcing recently that it would segregate all GMO commodities. GMOs are now a mainstay of agricultural production, accounting for 30% of corn and more than 40% of soybeans.  The logical home for the GMO crops that can’t be exported is the nation’s livestock industry. The question for cattle, pork and poultry producers is, now will there be a GMO market debacle in their future?
 A joint research effort has evaluated a product that can prevent bloat due to alfalfa grazing when added to cattle drinking water. Blocare 4511, a product developed by Ancare New Zealand Ltd., showed a 100 percent bloat prevention rate in three consecutive studies. Blocare is a pluronic detergent that is environmentally safe and widely used in New Zealand.
 The Office of the United States Trade Representative and the U.S. Department of Agriculture announced that, effective immediately, Canada has opened its market to U.S. hogs. “We expect that these regulatory changes and new processing facilities opening in Canada may result in U.S. producers exporting as many as 50,000 hogs in the year 2000, worth about $4 million at today’s market prices, with significant growth in future years,” said Agriculture Secretary Dan Glickman. “This is an important step that will significantly help U.S. hog producers.”
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The Brakke Consulting Viewpoint

It was a week of minimal activity on announcements specifically related to animal health.  It appears that everyone in the industry is analyzing their third quarter results and making year 2000 budget presentations.

There was a reasonable amount of activity in crop agriculture that has an impact on feed grains.  Most of the stories point to the continuing consolidation of crop agriculture, or the ongoing GMO debate.

Food safety and quality surfaced in the first report of a large retailer creating an alliance with producers to ensure consistent beef quality.  This is undoubtedly the first of many such alliances that will be announced in the near future.

In summary, as you formulate your budgets for the coming year, please be sure to allocate plenty of funds for outside consultants!

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