Producing emulsified products without fat pockets

By Oscar Esquivel, Ph.D on 3/1/2008
MeatingPlace.com

The most abundant proteins in muscle fibers, actin and myosin, are insoluble in water, but can be solubilized through physical action in solutions containing 4 percent to 5 percent salt. A protein exudate is then obtained, which is capable of coating other components of the meat system, such as fat particles, muscle, connective tissue and other inclusions.

Typically, an emulsion consists of a discontinuous phase composed of fat and other, larger particles dispersed in a continuous aqueous phase of solubilized protein material. These coated components form a matrix that coagulates upon heating, forming the typical solid and elastic structure of sausages and meat emulsions. A meat emulsion is the result of the efficient formation of an emulsifying phase, which coats suspended fat particles and physically restrains them after the protein matrix gels due to heating. Fat particles are then prevented from coalescing and forming fat pockets.


Factors affecting emulsion stability
Emulsion stability is very important to the quality of sausages and emulsified products and to prevent defects such as fat pockets and mushy texture.

"Fatting out" in a meat emulsion can be associated with considerable moisture losses due to formation of channels during the cooking process. Moisture and liquefied fat can leak and migrate to the product surface through these channels. In stable products, moisture loss and/or fat coalescence will be minimal.

Fat stability is mainly affected by three factors: the biophysical properties of the emulsifying film coating the fat particle, the gelation properties of the protein matrix and the physical characteristics and cellular integrity of the fatty tissue. Salt concentration and type of salt also affect the amount of extracted protein, which has a direct impact on emulsion stability. There is evidence that decreasing sodium chloride levels from 2.5 percent to 1.5 percent might reduce emulsion stability and produce undesirable texture. By reducing the amount of salt, there's also a decrease in the amount of solubilized protein available to coat and physically restrain the fat particles.

The amount of added fat and its relative surface also are important factors to consider for emulsion stability, given that it is necessary to fully coat the total surface of fat particles with a film of solubilized protein. Assuming there's enough soluble protein in the aqueous phase of the emulsion, the meat batter is more stable when fat particles are smaller (greater relative surface) leading to more efficient distribution of the fat particles throughout the continuous protein phase. However, if the fat relative surface area is greater (from excessive chopping) than the mount of available soluble protein, then the film coating the particles becomes too thin and more susceptible to physical disruption when fat expands during the thermal process. The result is an unstable emulsion, fat pockets and a loose and less flexible texture.

Increased thickness of the protein film may also influence emulsion stability. High temperatures at the end of the chopping process may result in a protein film that's too thick and inflexible, which will tend to fracture during fat expansion upon cooking. Thinner protein films will form a series of pores that could act as "escape valves" to hot expanding fat.

Several factors related to fat's characteristics can influence emulsion stability. Some reports mention that it is easier to emulsify short-chain saturated fatty acids than their longer-chain counterparts. The degree of saturation is also important; in fatty acids with similar chain length, it is easier to emulsify those that are less saturated. Similarly, there seems to be a relationship between the melting point of the fat and its degree of dispersion and absorption by the inter-phase protein film.

Meat batter viscosity decreases at temperatures closer to that of the fat melting point, and since fat particles are less dense than the aqueous phase, they tend to float to the surface. These floating particles are less likely to be coated by the protein film and will be prone to coalesce during the thermal process. Research that has investigated various types of fat shows that regardless of the final chopping temperature, at lower levels of fat addition, all kinds of fat yield stable emulsions. However, at higher levels of fat addition, those with higher melting points are more stable. As a rule of thumb, aim for final chopping temperatures below 63 degrees F, 53 degrees F and 43 degrees F for fats of beef, pork and poultry origin, respectively.

During cooking, the protein matrix undergoes various changes. From 104 degrees F to 122 degrees F, myosin starts to denature, and the gelation process starts. Close to 140 degrees F, collagen solubilization initiates. Finally, the structure is consolidated between 158 degrees F and 176 degrees F, when actin denatures.

Fat within this system starts to liquefy before thermal denaturation of the proteins and is completely molten before the protein matrix gelation is completed. Therefore, it is essential to have a balanced interaction between the fat and the protein film at the emulsion inter-phase that could stabilize liquid fat before gelation of the protein matrix. Both the inter-phase protein film and the protein matrix must be stable and cohesive enough that the exudation of melted fat through the structure and the subsequent formation of coalescing spots in void spaces are prevented.


Estimating emulsion stability
Estimating emulsion stability involves measuring the amount of fat and/or moisture released after the cooking process. Measuring electrical conductivity of the raw batter also is a good index of stability, given that an aqueous phase in the presence of salt would conduct electricity better than a system where a fat separation process has started.

Making a graphic of electrical conductivity as a function of time during the chopping process allows you to visualize the point where structural changes in the emulsion start. Some people even report that devices with fiber optics technology could predict the moment when an emulsion becomes unstable.

However, even though these points could be estimated, it would be too late to correct the problem. These techniques are useful research tools to establish historical records that eventually could be related to specific conditions. Unfortunately, no visible, reliable signs are readily available that could tell a processor how stable a meat batter is. Establishing good records and being consistent with manufacturing practices are still the best alternative.

Filipino Livestock Farmers Acquire a Cutting Edge

PHILIPPINES - Good news is just around the corner for livestock and meat exporters of the Philippines, says Agricultural secretary Arthur Yap.

Having been hit badly by the strengthening peso the industry will take relief with the extension of the Agricultural Competitiveness and Enhancement Fund (ACEF) until 2015.

Yap said Congress' approval of the law will allow the Department of Agriculture (DA) to use the P7.4 billion funds to bankroll much needed projects meant to sharpen the competitiveness of Filipino farmers in the face of global free trade.

Yap said among the steps he has undertaken is to order the National Meat Inspection Service (NMIS)to waive the collection of inspection and laboratory fees on pork and pork products.

To support this, he said the DA will establish regional laboratory facilities in the cities of Cebu, Cagayan de Oro and other key export growth centers so that laboratory testing will be cheaper.

Yap said the DA's efforts to promote Philippine livestock and poultry products overseas is expected to bring Mindanao's frozen pork products to Singapore and Japan in the months to come.

On the other hand, Yap said the DA is pursuing measures to boost the incomes of livestock and poultry exporters is keeping with the mandate of President Arroyo for the DA to focus on food production and job generation.

DA reported that the gross value of livestock and poultry production shot up by 5.04 percent to P163.2 billion and by 6.77 percent to P117.7 billion in 2007, respectively.

Poultry and Pork Production Key to Prices

CANADA - The Saskatchewan Ministry of Agriculture expects levels of pork and poultry production and the volumes of meat in cold storage to be key factors influencing live hog prices during the remainder of 2008, writes Bruce Cochrane.

Live hog prices showed improvement in February but they appear to have peaked turning downward over the last few weeks.

Brad Marceniuk, a livestock economist with the Saskatchewan Ministry of Agriculture reports U.S. slaughter numbers continued to increase in early 2008 putting more pork into U.S. cold storage while the volumes of poultry in cold storage have also been significantly higher, pressuring meat prices overall.

Brad Marceniuk-Saskatchewan Ministry of Agriculture

U.S. pork demand continues to be good but the problem is, again, we've had increased pork production early in 2008 so production continues to increase while demand is still relatively strong but that still has caused U.S. pork in cold storage numbers to be up...up over about 100 million pounds from December 31, 2007 to January 31, 2008.

You combine that with poultry stocks, that have been up about 100 million pounds, we've got a really big increase in meat in U.S. cold storage stocks.

That's about a 200 million pound increase from December to January which is a significant increase, again, which has been very negative to meat prices in general.

Overall meat production early in 2008 will be very important in determining where overall meat prices will go.

We need to see a decline in pork production and poultry production and that should help prices improve if we do see that.

Marceniuk points out the February Statistics Canada report indicates Canadian hog production is declining and, while the December USDA report showed U.S. hog production was increasing, recent large losses will result in U.S. production starting to come down shortly as well.

He predicts North American consumption will continue to be important but he stresses we do need to see increased exports and countries like China, Japan and Russia will be very important in helping reduce those North American cold storage levels.

USDA Outlook Report Bleak for Pork

First-quarter U.S. pork production is expected to be 5.92 billion pounds, 9.6 percent above the same period last year, according to USDA's March Livestock, Dairy and Poultry Outlook Report. Total commercial pork production this year is expected to be 23.1 billion pounds, 5.4 percent above 2007.

     First-quarter live-hog prices are expected to be $40 to $41 per hundredweight, 12 percent below the same period a year ago. As a result, many pork producers are operating at losses near $30 per hog.

     Meanwhile, gains in cold storage may signal a slowdown in pork demand. February's beginning stocks of frozen pork grew significantly beyond recent levels. Frozen pork levels on Jan. 31, were 563.6 million pounds, 16 percent above year-earlier levels. Larger-than-expected increases suggest that pork products are entering the supply chain faster than they are flowing through to domestic and foreign consumers.

H5N1 source: China, gene study suggests

from WorldPoultry.net
March 24, 2008

Researchers have now suggested that southern China may have been the source for much of the spread of the H5N1 bird flu virus.

Reuters has reported that flu experst have found that a genetic analysis of the highly pathogenic H5N1 virus shows that strains that appeared in Vietnam, Thailand and Malaysia in 2002 and 2003 closely resemble a strain from poultry markets in China's Yunnan Province.

It was reported in the Journal of Virology that the two viruses found in poultry in China's Hunan province in 2002 and 2003 were most closely related to viruses from Indonesia.

"These results suggest a direct transmission link for H5N1 viruses between Yunnan and Vietnam and also between Hunan and Indonesia during 2002 and 2003," wrote the researchers*. "Poultry trade may be responsible for virus introduction to Vietnam, while the transmission route from Hunan to Indonesia remains unclear," they wrote.

The H5N1 bird flu virus was first seen in a goose in southern China's Guangdong province in 1996. The virus re-emerged in 2003. Since then, H5N1 bird flu has been found in more than 60 countries and territories. It has killed 236 people out of 373 infected in 14 countries -- Myanmar, Turkey, Djibouti, Azerbaijan, Egypt, Pakistan, Iraq, Indonesia, Thailand, Vietnam, China, Nigeria, Laos and Cambodia.

The team of researchers to find out if H5N1 viruses all descend from one type. "Due to the lack of influenza surveillance prior to these outbreaks, the genetic diversity and the transmission pathways of H5N1 viruses from this period remain undefined," they wrote.

In 2007, a team at the University of California Irvine reported that Guangdong appeared to be the source of renewed waves of the H5N1 strain, but Chinese officials denied the report at the time.

* Included Guan Yi of the University of Hong Kong and Robert Webster of St. Jude Children's Research Hospital in Memphis, Tennessee.

Poultry feed prices will increase more

from WorldPoultry.net
March 24, 2008

Consumers will see another major run-up in food prices this summer due to the competition for raw materials, the American Feed Industry Association (AFIA) board of directors was told at its recent meeting.

AFIA President & CEO Joel Newman, in his state of the industry report to the AFIA board, said Congress and the Bush Administration must recognise that US$5 a bushel corn - and similar price jumps for soybeans and other food grains - can no longer be viewed as anomalies or temporary. "Five dollar corn looks to be closer to the new ‘normal," Newman said, adding ethanol’s use of corn will hit 27% of the US corn crop during the 2007-2008 crop year.

The AFIA Board was told the average 5% increase in consumer food prices experienced last year is just the beginning, with food prices likely jumping another 10-12% this year.

"The industry’s cost of production escalation has only just started to work its way through the system. Feed price increases will be pushed through the food chain over the next six months," Newman said, "Consumers can expect to see even higher prices for meat, poultry and dairy products."

Newman laid out the "perfect storm" of factors forcing food prices higher, starting with crude oil prices topping $100 a barrel and increasing demand for alternative fuels. Couple that demand surge with the effect of global livestock liquidation, particularly in the swine industry, increasing export demand for US grains and oilseeds to meet stronger global demand for animal protein, an 11% increase in world feed production – which has led to record low US stocks-to-use ratios – combined with a weak US dollar and significant increase in ag commodity speculators, and you have the inevitable pressure on US food prices, Newman said.

Supporting the AFIA internal analysis is a report released this week by the Coalition for Balanced Food & Fuel, of which AFIA is a member. In his report, presented at the Annual Meat Conference this week in Nashville, TN, Dr Tom Elam, president of Farm Econ, an analysis firm, said he estimates the cumulative costs to the food industry of the federal renewable fuel programme will be about $100 billion for 2005-2010. Elam said broiler industry input costs this year are up $3.4 billion (53 cents per bird); turkey input costs are up $646 million ($3.40 per turkey); swine input costs are up $2.9 billion ($38 per hog); cattle input costs are up $2.24 billion ($117 per fed beef animal) and dairy input cost are up $2.7 billion.

Preventing lipid oxidation of precooked meat

The advantages of precooked meats are clear, just as it's clear that "warmed over flavor" (WOF) isn't one of them. The product may look like meat, but it may taste like cardboard once it is reheated.

WOF is the result of lipid oxidation, which can occur when cooked meat is refrigerated. In a nutshell, the oxidation of lipids — or unsaturated fatty acids — creates a stale taste owing to the release of ionic iron during cooking. The onset of WOF is rapid during storage, with oxidized flavors typically detectable within 48 hours.

One obvious solution is to flash-freeze the product, though this approach may present taste and texture issues all its own.

For red meat processors, the good news is that beef and pork tend to be less susceptible to WOF than turkey and chicken. Further, WOF isn't associated with cured product thanks to the presence of nitrites, which function as antioxidants. The bad news: Science is still struggling to lick WOF, primarily by preventing or slowing oxidation.

Current practices emphasize introducing antioxidants to product, though other methods — including reducing heat during cooking as well as maintaining proper product temperatures before and after — also may slow or prevent oxidation.

Meanwhile, many common antioxidants may do the trick.


Solution No. 1: Butylated hydroxyanisole and butylated hydroxytoluene
Both of these phenolic compounds get the job done, particularly when used in combination. Oxygen reacts preferentially with the two rather than oxidizing fats and oils, thereby preventing spoilage.

Because both are strong synthetic agents, USDA is very specific about their use, having approved them at 0.01 percent of fat content for select applications, including fresh pork, brown-and-serve sausage, fresh Italian sausage, pre-grilled beef patties and fresh sausage made from beef or beef and pork.


Solution No. 2: Natural ingredients
Rosemary extract, one of the better-known natural antioxidants, is among the most effective in retarding lipid oxidation. In comparison to most synthetic solutions, it also is more thermally stable. Some applications blend rosemary extract and citric acid to achieve the same end.

Solution No. 3: Mixed tocopherols
A synthetic form of vitamin E, mixed tocopherols compare favorably to other antioxidants, though various types aren't created equal. So-called high-alpha types promote higher vitamin E activity and, as a result, perform well as nutrients. They also are good antioxidants, but not as good as low-alpha tocopherols, since the latter contain greater amounts of gamma and delta tocopherols, which promote higher levels of antioxidant activity.

As with BHA and BHT, USDA rules apply. Usage may not exceed 0.03 percent of fat content. And mixed tocopherols can't be used in combination with other antioxidants.


Solution No. 4: Citric acid
Best as an antioxidant in a secondary role, this ingredient is a weak organic acid found in citrus foods. It typically works synergistically with primary antioxidants to slow or prevent lipid oxidation.

Inventories down for beef, up for pork

By Lisa M. Keefe on 3/24/2008 for Meatingplace.com

Stocks of frozen meat are up overall, according to the monthly cold storage reports produced by the U.S. Department of Agriculture, as falling inventories for beef were offset by rapidly growing stocks of pork.

Year-over-year, beef stocks were down 9 percent to 418 million pounds at the end of February. Total pork stocks, meanwhile, at 603 million pounds, were up almost 25 percent in February over the same month a year earlier. Frozen pork belly stocks ballooned 68 percent to 79 million pounds, compared with the same month a year earlier.

Total red meat stocks were up from February 2007 to February 2008, ending the 12-month period up about 9 percent, to just over 1 billion pounds.

Canada's Olymel merges with poultry production company

By Alicia Karapetian on 3/20/2008 for Meatingplace.com

Canadian poultry and pork processing company Olymel LP has merged with poultry production company Groupe Westco Inc. in an effort to strengthen the poultry industry in the Canadian Maritime provinces, the companies announced on Wednesday.

"In an open market and a very competitive environment, the poultry industry should gain strength from this partnership, which brings together producers and operators with complementary expertise that will make the poultry supply chain for New Brunswick and the entire Maritimes more efficient," Réjean Nadeau, president and CEO of Olymel and Thomas Soucy, president and CEO of Groupe Westco said in a prepared statement. "Producers, poultry industry workers, and consumers in New Brunswick and the entire Maritimes stand to benefit from the synergy created by the partnership between Westco and Olymel LP."

As part of agreement, the two companies will develop and consolidate their poultry production, slaughtering, cutting and deboning activities for the entire Maritimes from New Brunswick.

HPAI in Indonesia could mutate, create pandemic: FAO

By Alicia Karapetian on 3/19/2008 for Meatingplace.com

The prevalence of avian influenza in Indonesia remains serious despite containment efforts undertaken by national authorities and the international community, and the intense virus circulation could cause the virus to mutate and create a human pandemic, the Food and Agriculture Organization of the United Nations warned on Wednesday.

"I am deeply concerned that the high level of virus circulation in birds in the country could create conditions for the virus to mutate and to finally cause a human influenza pandemic," FAO Chief Veterinary Officer Joseph Domenech said in a statement.

Avian influenza has become deeply entrenched in Indonesia with 31 out of 33 provinces infected.

"We have also observed that new H5N1 avian influenza virus strains have recently emerged, creating the possibility that vaccines currently in use may not be fully protecting poultry against the disease," Domenech said.

Major donors, such as the United States, Australia, Japan and the Netherlands, together with FAO, have so far invested more than $25 million in supporting Indonesian control efforts.

Maple Leaf to close Winnipeg plant, expand other facilities

By Tom Johnston on 3/19/2008 for Meatingplace.com

Canadian pork processor Maple Leaf Foods said Tuesday it will close its Warman Road plant in Winnipeg and expand other nearby facilities.

The decision to end operations at Warman Road by the end of September comes as Maple Leaf invests almost $50 million to support the expansion of value-added cut operations and hog slaughter at its Brandon, Man., plant and $25 million to expand its Lagimodiere Road plant in Winnipeg.

The Warman Road plant employs some 650 people, "who will be encouraged to apply for new jobs at the Lagimodiere Road and Brandon plants" and be provided financial and outplacement services, the company said in a news release.

Expansion, consolidation

Expansion of the Brandon plant will begin in June and be completed in September. Hog slaughter will increase to 86,000 hogs per week from 75,000 hogs per week by the end of 2008 as the company consolidates all of its primary pork processing there.

The expansion of Lagimodiere Road represents the company's aim to consolidate its ham boning operations in western Canada into one dedicated facility.

By the end of 2008, Maple Leaf will have created more than 1,100 new jobs at these facilities with support from an investment of $120 million.

"We sincerely regret the impact on our employees at Warman Road, and will proactively support them to secure new employment at other Maple Leaf plants in the local economy," the company said.

Canada: Major pork plant construction

The plans to construct a new one million-head-per-year hog slaughtering plant in Saskatoon, Saskatchewan, Canada is progressing as planned. Construction is to start this summer.

The Saskatchewan government is supporting the project; however it is not interested in an equity position. The Saskatchewan Hog Slaughter Plant Initiative is a partnership between Fishing Lake First Nation, the Saskatchewan Pork Development Board and Big Sky Farms.

Construction
Jim Ramsay, project consultant for Fishing Lake First Nation and chairman of the project has said, "Originally we were talking about construction starting in June or July of 2008 and we have not moved off of that mark." He added, "We've passed our major milestone, which was the completion of the business development plan and we're currently getting the resources together for the next phase, which is the tendering stage."

Plans to construct follow Maple Leaf’s closure
The planning for the new plant started when Maple Leaf announced in October 2006 that it would shut down its slaughter facility in the city, leaving the province without a hog slaughtering plant. Because of the closing of Maple Leaf’s plant, farmers have had to battle with greater transportation costs as they move their hogs over greater distances.

"This will expand the market and reduce producers' transportation costs, which are significant," said Ramsay.

China to Increase 2008 Pork, Beef Imports

USDA is predicting that China’s pork and beef imports will increase through 2008. According to a USDA agricultural attaché in Beijing, growth in pork and beef consumption in China continue to outstrip the country’s production capacity. In a semi-annual report, the attaché said that increased import projections were due to the worst snowstorms in 50 years during January and February and a slow recovery from porcine blue ear disease, which has hampered production in China.

     The attaché forecast an 8 percent rise in China’s 2008 pork imports to 200,000 metric tons, as well as a 6 percent decline in the country's pork exports. The report put China's 2008 domestic pork production at 42 million metric tons, up 1 percent from 2007, but 16 percent below 2005.

Bird flu outbreak in southern China

Agence France-Presse
First Posted 08:48am (Mla time) 03/17/2008
Phil Daily Inquirer

BEIJING -- Bird flu has broken out in the south of China killing more than 100 poultry, state media reported Sunday, citing the agriculture ministry.

The outbreak occurred in a market in Guangzhou, in Guangdong province on Thursday, and was a "highly pathogenic" subtype of the H5N1 influenza virus, which can be deadly to humans, the report said.

A further 500 birds were culled and the disease was under control after emergency measures were taken, according to Xinhua.

The government in Hong Kong, which borders Guangdong, said in a statement it had been notified of the outbreak.

It was China's fifth bird flu outbreak in poultry this year, the report said.

Three people, including a 44-year-old woman from Guangdong, have died so far this year in China of the disease, previous reports have said.

The latest outbreak comes despite a huge campaign last year to try to contain the disease, during which authorities attempted to vaccinate tens of millions of poultry and stepped up public education efforts.

Bird flu has killed more than 230 people worldwide, according to the World Health Organization.

Scientists fear the virus could eventually mutate into a form that is easily transmissible between humans, triggering a global pandemic.

Pilgrim's Pride Corporation to Close Chicken Processing Complex and Six Distribution Centers

Company Announces Plan to Curtail Losses Amid Unprecedented Increases in Feed-Ingredient Costs and Oversupply of Chicken in United States Further Actions Likely as Company Studies Other Options

PITTSBURG, Texas, March 12 /PRNewswire-FirstCall/ -- Pilgrim's Pride Corporation (NYSE: PPC), today announced it will close a chicken processing complex and six of its 13 distribution centers in the United States in response to the crisis facing the U.S. chicken industry from soaring feed-ingredient costs resulting from corn-based ethanol production. These actions are part of a plan to curtail losses amid record-high costs for corn, soybean meal and other feed ingredients and an oversupply of chicken in the United States. The closings, which are expected to begin immediately and will be completed by June, will result in the elimination of approximately 1,100 jobs. Additionally, the Company announced that it is in the process of reviewing other production facilities for potential mix changes, closure and/or consolidation in response to current negative industry fundamentals.

Under the plan announced today, the Company will close its chicken processing complex in Siler City, N.C., which employs approximately 830 people. Pilgrim's Pride also plans to shut down distribution centers in Oskaloosa, Iowa; Plant City and Pompano Beach, Fla.; Jackson, Miss.; Nashville, Tenn.; and Cincinnati, Ohio. Pilgrim's Pride will provide transition programs to employees to assist them in securing new employment, filing for unemployment and other applicable benefits. No decision has been made about the future use of the Siler City facility, however, when industry fundamentals improve, portions of the live production capabilities associated with the Siler City operation may be redeployed to supply other Company facilities in that region of the country. The company expects to record asset impairment and other charges related to the facility closures of approximately $35 million, $21.7 million net of tax, or $0.33 per share.

"Our Company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government's ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders," said Clint Rivers, president and chief executive officer. "The cost burden is already enormous, and it's growing even larger. Based on current commodity futures markets, our company's total costs for corn and soybean meal to feed our flocks in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago. We simply must find ways to pass along these higher costs. Additionally, we believe that the recent impact of food-based inflation, coupled with the need for food producers to continue to increase prices for their products, will further stimulate inflation, weaken consumer confidence and negatively affect demand for products in certain market channels. This will require that the industry adjust its production output to levels commensurate with a reduced demand, at higher and necessary prices, sufficient to sustain the industry as a whole."

Mr. Rivers added: "While the decision to close a facility is always very difficult, we believe the actions we are announcing today are absolutely necessary to help bring supply and demand into better balance. That portion of the demand for our products that exists solely at pricing levels below the cost of production is no longer a demand that this industry can continue to supply."

Belgium reliable pork supplier in 2008

The international pork trade will experience high production and processing costs, a peak in the pork cycle coupled with a strong Euro in 2008. These are the predictions of the VLAM Belgian Meat Office.

These forecasts are based on a market study carried out by the Swiss research institute Gira.

Decrease in production
Profitability is a problem in the international pork sector – feed prices have increased causing higher production costs. In addition, supply is abundant while demand remains low. The strength of the Euro is also obstructing international trade.

In the coming months, production would not seem to decrease worldwide for the time being, so that prices cannot increase yet either. However, German producers have already been reacting to the low prices, so that an initial recovery is noticeable in Germany. Thus a great number of sows were slaughtered in the summer months, so that production fell to a clearly lower level at the beginning of 2008. In Belgium too a decrease in pig production has been forecast.

Slaughter situation
The Belgian Meat Office predicts that the total number of pig slaughters in Germany will increase in 2008. The flow of pigs for slaughter entering Germany from Denmark and the Netherlands is the driving factor for the increase.

In addition, new livestock trade streams are developing, e.g. from The Netherlands and Denmark to the East-European countries Poland, Hungary and Romania.

In Belgium pork production has stabilised for the time being. It thought to be only temporary and the downward trend will continue again.

Belgian slaughterhouses are importing more and more pigs for slaughtering to deal with this trend. In 2007 no less than 240,000 more live pigs were imported into Belgium than in 2006.

Exports outside EU
9% of EU production in 2007 represented pork exports. The market has remained stable. However, the Belgian Meat Office has noticed shifts between the various export regions.

Russia offers good perspectives for pork export as it is a major purchaser of cuts that are less in demand in Europe. Demand for high-quality pork cuts is also rising there.
South-Korea is also proving to be an interesting export market. Fierce competition reigns in the market.

Australia and China are among the remaining countries which are interesting for European pork exporters.

Trade within EU
Pork trade between the various European countries features various specialised flows based on the different eating cultures within Europe.

Germany, for example, is now a greater exporter than importer for the first time.
Danish and Dutch companies also benefit from the favourable industrial climate and invest in their own processing plants there.

A number of Danish companies are also venturing to the British market.

Italy and the United Kingdom are major pork importers, whilst Greece stands out as a growth market for pork import.

Era of Cheap Food Over

By Rupak D. Sharma
Asia News Network
First Posted 00:14am (Mla time) 03/09/2008
http://opinion.inquirer.net/inquireropinion/talkofthetown/view_article.php?article_id=123604

THE FOOD AND AGRICULTURE ORGANIZATION’S FOOD PRICE INDEX, WHICH is based on export prices for 60 internationally traded foodstuffs, rose 37 percent in 2007 after climbing 14 percent in 2006.

Over the past months, the increase in food prices has accelerated. Prices of wheat, rice, soybeans, corn, palm oil and cocoa have reached record levels, although some commodities have dropped on renewed concern that a slowing US economy will curb demand for raw materials.

Thai rice export prices rose to a 25-year high of $474 a ton last month, up $102 from January, while prices of spring wheat tripled from $8 to $24 a bushel in October last year.

For Juan de la Cruz, this translates into higher prices of his staple and of flour-based products such as pan de sal, noodles and siopao because the Philippines imports rice and wheat.

It doesn’t come as a surprise that higher prices of food and other commodities pushed up the country’s inflation to 5.4 percent in February, the highest in 17 months.

For the poor, the high prices will mean less food on the table.

What are driving food prices up across the globe? Besides the six reasons mentioned in the article below, funds flowing into commodities because of the weak dollar and stock markets are contributing to the surge.

Food prices are likely to further go up until at least 2010, according to an official of the United Nations’ World Food Program.

“Our assessment is that the current level will continue for the next few years … in fact rise in 2008, 2009 and probably at least until 2010,” Josette Sheeran, executive director of the World Food Program, said Thursday. -- Editor.

HERE’S A SET OF statistics that is difficult to swallow.

The price of rice has increased by around 15 percent in Indonesia. In Bangladesh, wheat flour now costs 40-41 taka (about 60 US cents) per kilogram—up around 50 percent. Pork prices in China have surged by around 100 percent to 24 yuan ($3.33) per kilo. And prices of edible oils went up by 50 percent in Nepal.

In general, the average food price rose by 37 percent in the world in 2007 compared with 9 percent in 2006. Asia also fell into its grip, alarming governments, upsetting consumers and increasing worries that food might be scarcer in the coming days.

Reasons

The are several reasons for the surge.

Growing affluence, which is increasing the demand for food;

Oil price hike, which is driving up freight rates and the cost of irrigation and petroleum-based fertilizers;

Supply disruptions like floods in Indonesia and Bangladesh, and protests which result in blockades in Nepal;
Stagnating output in the case of rice and wheat;

Higher prices of agricultural inputs like fertilizer; and

Changing energy policy of governments.

Changing diet

Due to rising income and changing lifestyle, the dietary patterns in developing countries of Asia are changing fast, increasing demand for all foodstuffs, particularly nutritious food like meat and dairy products.

In China, an average person now consumes 50 kg of meat per year compared with around 20 kg in 1980. A similar trend is seen in other rising Asian economies.

“These developments have intensified the demand for feed grains like corn, barley and oats, driving up their prices. And an increment in prices of livestock feed translates into a rise in the cost of meat,” Jean-Pierre A. Verbiest, country director of Asian Development Bank Thailand, told Asia News Network.

In Japan, farmers are gearing up to increase the price of beef after being unable to bear the burden of high corn prices, which went up by a third last year. According to estimates, 3.1 kg of soya or corn feed are required to produce a kilo of pork and 8.3 kg of similar feed are needed to produce a kilo of beef.

But it is not only higher demand for livestock and poultry products that is fueling food prices. In fact, Asians now have greater appetite for all sorts of food, which can be seen in their rising calorie intake.

In India, the average daily per capita energy intake has increased to 2,440 kilocalories from 2,080 in 1980. A Vietnamese now consumes 2,580 kcal of energy a day compared with 2,030 two decades ago, and Chinese intake has increased to 2,940 kcal a day from 2,330 in 1980.

“Over the years, the larger part of this calorie intake will come from consumption of animal products, fruits and vegetables at the expense of cereals,” said Dorjee Kinley, economist at the Food and Agriculture Organization (FAO), Asia-Pacific region.

“It is, thus, important that Asian countries diversify its agricultural practices and policies to cater to the changing diets and consumption patterns,” he said.

Stagnant grain yield

But at a time when demand for food is increasing, grain production, mainly rice and wheat, has remained stagnant, creating short supply and pushing up prices.

Global wheat production went up 1.1 percent last year to 602 million tons. In Asia, it increased 3 percent to 278.3 million tons. Whereas the world adds 70 million mouths to feed a year. Wheat is a key ingredient of bakery items and other foodstuffs.

Rice production in Asia, which contributes to 90 percent of the global rice output, crept up 0.4 percent to 389.9 million tons.

Although many cite this as an indication of declining importance of rice among middle-class Asian families—due to the shift to other nutritious meals—Kinley called it the result of falling investments in agricultural research.

Foreign aid for agriculture and rural development declined to less than $5 billion a year in the late 1990s as against $9 billion in the early 1980s. Only around 4 percent of the development assistance goes to agriculture—meaning less efforts are being put into technology innovation to increase the yields of cereal crops.

Rush for ethanol

Amid the global rush for biofuels, there are speculations that more farmers are allocating a greater portion of land to commercial crops, causing cereal crop yields to stagnate. But statistics show that is not the case in Asia, at least in terms of production.

Corn production in Asia increased 2.2 percent last year compared with 26 percent in the United States. Oil crop production also hovered at 122 million tons last year (similar to that of 2006), showing that Asian farmers still have not joined the ethanol bandwagon in developed countries.

And there are countries like the Philippines where concerns have been raised about biofuel crop cultivation jeopardizing food security and exacerbating carbon dioxide emissions.

However, Asia’s current negligible participation in ethanol production does not mean that prices of biofuel crops in the region have not gone up. Corn price increases in Japan, the largest corn importing Asian country, were the result of higher international prices—triggered by the allocation of more corn for biofuel production in the United States.

There is a growing demand for crops that generate biofuel and returns are high. It, thus, cannot be said that Asian farmers will continue to plow their fields to grown noncommercial crops.

Greater profit margins may encourage farmers to increase commercial crop acreage, causing grain production to decline and inflating cereal prices.

Victims

Shrinking grain production means food will be more expensive and scarcer in countries that meet their food demands through imports. People living in richer food-importing countries may swallow the guilt of rising prices, while those living in countries with moderate per capita income may express it openly, raising fears of social tension.

Recently, protests flared up in Indonesia due to food price increases. Indonesia is one of the largest food-importing countries in Asia. It imports 100 percent of its wheat consumption, more than 70 percent of its soybean needs, 30 percent of beef and meat, 15 percent of sugar and a large portion of rice. Protests were also reported in Pakistan and Malaysia.

But the depressing news for countries like Indonesia is that the situation is not likely to improve anytime soon.

This year, global rice production is expected to go up by 0.3 percent to 429.7 million tons and wheat production is expected to hover at 602.2 million tons. FAO has predicted that if countries like India and China are excluded, the aggregate cereal output would more likely decline in 2008.

While surveys say that world cereal production must go up by around 50 percent by 2030 to meet the global demand, production data indicate that demand will continue to outstrip supply in the coming years. Due to these factors, the International Food Policy Research Institute (IFPRI) has predicted food prices to go up by up to 20 percent by 2015.

Fearing short supply (caused by growing international demand), most food exporting countries in Asia have started tightening food security measures by curtailing exports. To discourage rice exports, India has raised the minimum export price to $500 a ton. Vietnam has decided to lower its export to 4.4 million tons and China is also expected to adopt a similar measure.

Bigger victims
What this translates into is: the days ahead for staple food-importing countries will be tougher. There will be less food in the international market and prices will go up.

Apart from countries that meet their domestic staple food demand through imports, the poor and fixed- or low-income people living across Asia will also be major sufferers.

They include around 300 million people in India who earn less than $1 a day, around 102 million Chinese who live below the poverty line and millions more in countries like Burma, Bangladesh, Nepal and Pakistan.

“Among these, the worst affected will be the urban poor, as they have to pay similar high prices the well-off people are paying, as against their poor counterparts living in rural areas where the food is grown,” Kinley said.

The poor usually respond by reducing the quality of food they take and later the number of meals, according to Kinley.

Young children
A study conducted in rural Central Java in Indonesia in 2004 found that when rice prices increased in the late 1990s, mothers in poor families responded by reducing their caloric intake in order to better feed their children, leading to significant weight loss.

Purchases of more nutritious foods were reduced to enable them to afford the more expensive rice. This led to a measurable decline in blood hemoglobin levels in young children and their mothers, increasing the possibility of developmental damage.

Similar incidents cannot be ruled out as IFPRI predicts a 2-5 percent reduction in calorie intake by 20 percent of the people in Asia by 2020 due to an increase in biofuel crop production.

Way out

Against the gloomy backdrop in which high prices are likely to trigger shortages and malnutrition, the only way to stabilize the situation is by increasing output. To raise production, more land needs to be allocated for agriculture, which again comes at the price of environmental degradation.

In Indonesia, researchers found that converting land for palm oil production could inflict the worst carbon debt, requiring 423 years to pay off. In South Asia, where the focus is on output, there are fears that production of rice, corn and millet could decline by 10 percent or more due to climate change.

Verbiest said these were complex issues. “But different bodies are responding to these calls and researches are being conducted to produce food in a way different from conventional methods,” he said.

It is important that every country keep investing in agricultural research, infrastructure, capacity building, human resource development and technology to increase yield and develop new seed varieties, so that people can grow more in available agricultural land, he said.

In the short term, governments should introduce targeted programs like extending grants to poor unemployed people or developing a mechanism to distribute food at nominal prices to the poor who qualify for it, according to Verbiest.

“But people need not panic as higher food prices are not a long-term phenomenon and you will see prices stabilizing and coming down within two growing seasons,” he said.

“Otherwise, it would be contrary to all the historical trends to see food prices going up for a prolonged period,” Verbiest said.

International prices of selected commodities (In US $ per ton)


Item 2004-2005 2005-2006 2006-2007
Wheat (US No.2 Hard) 154 175 212 Maize (US No.2 Yellow) 97 104 150 Soybeans 275 259 335
2004 2005 2006
Rice (Thai 100%B) 244 291 311 Beef (US) 3,788 4,173 4,126

Source: Food Outlook - Nov. 2007
Food and Agricultural Organization of the United Nations

Prices of selected food items in RP (In peso per kg)


Item 2005 2006 2007 2008
Rice, retail 22.88 23.56 24.72 - Corn (white) wholesale 9.57 11.42 11.88 - Dressed chicken - - 110 120 Beef, w/ bones* - - 160 180 Pork, liempo* - - 140 150

*All figures are annual averages, except for chicken, beef and pork prices, which are monthly retail averages for January 2007 and 2008 in Metro Manila

Source: Bureau of Agricultural Statistics
Compiled by Kate Pedroso, Inquirer Research

China to boost pork, beef imports in 2008: official

By Janie Gabbett on 3/12/2008 for Meatingplace.com


Increases in pork and beef consumption in China continue to outstrip production growth, resulting in increased import projections for 2008, USDA's agricultural attaché in Beijing said.

In a semi-annual report, the attaché said the worst snowstorms in 50 years during January and February, along with a slow recovery from porcine blue ear disease, have hampered livestock production in China.

Pork

The attaché forecast an 8 percent rise in pork imports in 2008 to 200,000 metric tons and a 6 percent decline in pork exports to 330,000 metric tons due to low production, higher domestic prices and an appreciating Renminbi.

The report put 2008 domestic pork production at 42 million metric tons, up 1 percent from 2007, but still 16 percent below 2005.

Chinese hog production continues to migrate from small backyard operations (less than 50 hogs) to huge commercial farms. It estimated 50 to 60 percent of backyard operations have left swine production while commercial farms have increased 20 percent in recent years.

The report said U.S.-based Whiteshire Hamroc Co. and China Tangrenshen Group in Hunan Province have signed a contract to import 2,000 breeding pigs for a large commercial hog development project.

Beef

The attaché forecast a four-fold increase in China's beef imports to 30,000 metric tons due to increased demand, particularly around the Olympics in August. Some of that beef is expected to come from South America, since China has lifted its ban on four Brazilian states.

China is expected to reduce its beef exports by 4 percent to 78,000 metric tons. Beef production is expected to rise by 3 percent to 7.7 million metric tons, the report said.

To view the entire report, click here.

Smithfield to close N.C. Ham plant

Pork News
Smithfield to close N.C. ham plant
By Ann Bagel Storck on 3/11/2008 for Meatingplace.com


Smithfield Packing Co. has announced it will close its smoked ham plant on West Vernon Avenue in Kinston, N.C., effective May 9.

Smithfield's other ham facility in Kinston, which opened in November 2006, will remain open.

Smithfield cited the age of the Vernon Avenue plant as the reason behind its closure. Parts of the building date back to 1948, making it difficult and costly to modernize, the company said.

"The industry is moving toward more modern, efficient facilities that enhance food quality and promote food safety," Joe Luter IV, president and chief operating officer of Smithfield Packing Co., said in a statement. "The boneless ham facility we opened in Kinston in 2006 is a perfect example of that. We remain committed to the Kinston community and will study future opportunities for the plant."

Currently 476 employees work at the Vernon Avenue plant. Smithfield said they will be given opportunities to work at other company facilities in eastern North Carolina.

Pilgrim's Pride Exits Turkey Business

Poultry News
Pilgrim's Pride exits turkey business
By Ann Bagel Storck on 3/11/2008 for Meatingplace.com

Pittsburg, Texas-based chicken company Pilgrim's Pride Corp. on Monday announced the sale of its turkey production facility and distribution center in New Oxford, Pa., to New Oxford Foods LLC, a subsidiary of Hain Pure Protein Corp., Melville, N.Y.

Financial terms were not disclosed, and there was no material gain or loss as a result of this transaction, Pilgrim's Pride said.

As a result of the sale, which is effective immediately, Pilgrim's Pride is no longer a producer of turkey, a business it entered in 2001 with the purchase of WLR Foods Inc.

Pilgrim's Pride reported total U.S. turkey sales of $122.3 million for fiscal 2007. The New Oxford facility processes 175,000 turkeys per week and employs approximately 530 workers, including the distribution center.

"Despite the positive improvements made in our turkey business over the past few years, we found that our small size and scale in this segment made it difficult to achieve acceptable levels of profitability on a consistent basis," said Clint Rivers, Pilgrim's Pride's president and CEO.

Rivers said the sale of the New Oxford complex is not expected to have any significant short-term impact on Pilgrim's Pride's current turkey customers. As part of the sale agreement, New Oxford Foods will continue to co-pack product for Pilgrim's Pride through the end of September, and Pilgrim's Pride will work closely with customers to avoid unexpected interruptions in delivery of frozen turkeys through Thanksgiving.

Shares of Pilgrim's Pride closed Monday at $22.42, down 79 cents, on the New York Stock Exchange.

Singapore's Exports Sanctioned

PHILIPPINES - Singapore's Agri-Food and Veterinary Authority has given the go ahead for pork processor Matutum Meat Packing Corporation to export cuts to the island state.

Jose Ariel B. Billones, regional meat inspection director, with The National Meat Inspection Service in Central Mindanao said the Singaporean authority had given clearance to the packing plant at Polomolok, South Cotabato for the shipment of fresh frozen cut pork meat products.
The factory had previously been prevented from exporting due to concerns about anti-biotic residues found in pork products.
According to the SunStar, the decision to allow exports to Singapore was made provisional by Jane C. Bacayo, NMIS national director, during a national consultation among government meat inspectors in Boracay two weeks ago.

"But there's no particular date as yet when the actual export would take off," said Mr Billones.

It is believed that the regional meat inspection agency is currently awaiting compliance documents from the company.

To read the full story click here.

Ham Production Basics

By Oscar Esquives, Ph.D on 3/1/2008

During ham processing, muscle pieces must be tightly bound to develop a protein matrix that could eventually be sliced and handled without breakage. It is a process in which many details have to be carefully observed to obtain a wholesome finished product.

Specifically, raw material selection, formulation and processing parameters all are critical.


Raw materials
Muscles from the leg are traditionally preferred, although in many places in the world other cuts are also used to produce ham. In the United States, by regulation, all ham meat must come from the ham or leg muscles.

For optimum texture, muscles for ham processing should be lean, free of excessive connective tissue and of normal pH (greater than 5.3-5.5).

Sub-optimal pH in ham muscles could result in a condition commonly known as PSE (pale, soft and exudative) meat with inadequate bind. Hams with a lot of PSE meat can have poor color stability and a very loose texture that will easily rupture upon slicing. It is better to prevent PSE than to correct it. Processors should assess the problem and work out preventive measures with their suppliers.

Meat with excessive membranes, tendons, ligaments or fat will not yield product of the same quality as hams made with lean and denuded pieces of meat. If not-so-lean materials, like pork trim, are used for cost efficiency, it's common to grind them finely and blend them with higher-quality materials as "binder" meat. Particle reduction will maximize the functionality of these binder meats.


Formulation
Adequate slicing ability and bite requires promoting protein-protein interactions. Achieving adequate ionic strength optimizes these interactions; salt concentrations of 4 percent-5 percent are best.

Salt and nitrite (156 ppm) are indispensable for ham processing. Salt solubilizes the myofibrilar proteins that will cement meat pieces together after heat coagulation.

Other important ingredients to consider when formulating a ham are:

Water: Water is the second most abundant ham ingredient after the meat. It needs to be free from microbial and physical contamination. Avoid hard water for optimum performance.

Phosphates: Phosphates may act as sequestrants of heavy metals that might be present in water. They can also moderate the pH to promote maximum water-holding capacity and facilitate the solubilization of myofibrilar proteins. The maximum level allowed is 500 ppm.

Moisture-retention ingredients: Examples include starches, hydrocolloids and non-meat proteins that would bind extra moisture and synergize with meat proteins to strengthen and form an elastic protein matrix.


Processing
Tumbling, massaging and blending are basic in ham processing. All these operations provide enough physical action and friction so protein is extracted and distributed. Vacuum pressure opens up the muscle structure, which facilitates moisture uptake, and removes oxygen from the system. Lower oxygen levels promote color stability and microbial shelf life.

Friction and physical action in a high-protein system may also lead to foam formation that results in product defects, unless an adequate vacuum level is provided (greater than 25 mm HG). Similarly, an increase in temperature due to friction must be controlled during processing to prevent protein denaturation and microbial growth.

Work times from two to eight hours — depending on equipment and extension level — are not uncommon. A resting period of eight to 12 hours for curing also strengthens the protein-protein interactions, promoting a cohesive and firm texture.

Stuffing is another step in ham processing in which vacuum pressure can help prevent air pockets and defects. Ham can be filled in a cook-in bag, in casings or in nets. Positive energy exerted by the stuffing material will be important for enhancing protein-protein interactions and bind.

Cooking completes the process. During the thermal treatment, extracted meat proteins, non-meat proteins and other gels synergize and coagulate to form a tri-dimensional elastic network. The minimum temperature to cook cured ham is 155 degrees F to achieve an adequate kill of pathogenic bacteria.

Finally, the ham is chilled to 27 degrees-30 degrees F for slicing, browning or final packaging, depending on the finished product being manufactured. These low temperatures during the last steps will result in better slicing ability and shelf life.

Texas runs interference on Canada-Mexico cattle trade

The Texas Department of Agriculture (TAD) said Friday that Mexico has offered a new trade protocol to USDA regarding the import of U.S. cattle following the state ag commissioner's announcement that certain Canadian cattle breeds would be prohibited from entering Mexico by way of Texas export facilities due to unfair trade practices.

"Although details of this offer have not yet been shared, the fact an offer has been made is proof of progress," Texas Agriculture Commissioner Todd Staples said in a statement.

Canada and Mexico have signed an agreement allowing the trade of certain dairy and beef cattle less than 30 months of age, including breeding stock. Mexico presently only allows the importation of U.S. dairy heifers younger than 24 months of age, despite international negotiations aimed at including breeding stock, TAD said.

"We must set aside political science and make decisions with our trading partners based upon sound science," Staples said.

Brazilian meatpacker edges out Tyson to acquire Pena Branca

Brazilian meatpacker Marfrig has announced that it acquired a controlling stake in Pena Branca, the largest poultry processor in Sao Paulo state.

Pena Branca gained notoriety in the United States following reports Springdale, Ark.-based Tyson Foods Inc. was trying to buy the Brazilian processor. Though Tyson would not then confirm Pena Branca was its Brazilian acquisition target, Tyson spokesman Gary Mickelson on Friday told Meatingplace.com, "Tyson did have interest in buying Pena Branca, [but] our concerns over some regulatory matters made it difficult to reach a mutually acceptable agreement."

Mickelson added, however, that the company remains, "committed to establishing a presence in Brazil and continues to explore several other opportunities there."

Marfrig acquired Pena Branca, its first poultry venture, for $53 million. Pena Branca processes 300,000 head per day at two slaughter facilities and has 2,140 employees.

The Brazilian meatpacker also acquired a controlling stake in DaGranja Agroindustrial Ltd., a poultry and pork processor, for $58 million.

Marfrig's purchases are still subject to due diligence activities and approval by shareholders.

U.S. pork exports skyrocket in last two decades

U.S. pork exports skyrocket in last two decades
(MEATPOULTRY.com, March 06, 2008)
by Bryan Salvage

DES MOINES, IOWA ― Impressive changes have taken place in U.S. pork exports in the past 22 years, according to research by the Pork Checkoff and University of Missouri, Columbia. U.S. Pork exports have grown from 86 million lbs carcass weight equivalent in 1986 to 3.1 billion lbs in 2007. And the United States has gone from a negative 1.036 billion lbs in net exports in 1986 to a positive 2 trillion lbs in 2007.

Glenn Grimes, an economist with the University of Missouri, Ron Plain, professor at the University of Missouri, and Steve R. Meyer, president of Paragon Economics, are the consultants who conducted the analysis. They discovered the value of pork and pork byproduct exports grew from $1.97 per hog slaughtered in 1986 to $28.91 per head harvested in 2007. The changes in trade have permitted the pork industry to grow at an additional rate of about 0.8% per year on average over the last 22 years.

"In other words, the U.S. pork industry was about 18 million head larger in 2007 than it would have been had pork imports and exports remained at 1986 levels," Mr. Grimes said. "Not only has the increase in the quantity of pork traded allowed the industry to grow without lowering prices, but it has also added to producer' incomes in the years when net exports grew.

"Based on our efforts to calculate the effect of imports and exports on the price of hogs between 1986 and 2007, we believe these estimates are conservative because they show that prices increased only in the year when net exports grew," he added. "We assumed producers reacted to higher prices by increasing the U.S. herd enough to offset any price benefits from net export growth in the following years."

Japan is the largest U.S. pork customer, purchasing nearly 34% of U.S. pork exports in 2007. Mexico is second and Canada is third in tonnage purchased from the United States.

"We believe the total income of all U.S. pork producers has been improved by $7.4 billion over the last 22 years by the increase in exports," Mr. Grimes said.

FAPRI: Commodity prices to remain 'historically high'

FAPRI: Commodity prices to remain 'historically high'
(MEATPOULTRY.com, March 06, 2008)
by Keith Nunes

AMES, IOWA — Continuing high crude-oil prices and new federal bioenergy mandates are expected to sustain prices at historic highs across all agricultural commodities over the next decade, according to the Food and Agricultural Policy Research Institute (FAPRI), whose analysts briefed Congress this week about their new 10-year projections for U.S. and international commodity markets.

Global net trade in ethanol is projected to increase by 2.53 billion gallons, reaching 3.61 billion gallons by 2017. New biodiesel mandates in the Americas and Europe will almost double the price of biodiesel, pushing it to $6 per gallon with the doubling of net trade over the next decade. In the projection for ethanol, FAPRI researchers expect the world ethanol price to fall over the first half of the decade because of strong supplies encouraged by previous price increases. Thereafter, growing demand strengthens the price again through 2017, and it ends at a projected $1.52 per gallon.

The world corn price increased dramatically in 2007/08, to $198.17 per metric ton, because of demand from ethanol, the livestock sectors and sustained exports. FAPRI analysts expect demand will sustain the high price level over the rest of the decade. Similarly, all vegetable oil prices soared in 2007/08 with new biodiesel mandates, and they will continue to increase by 1.28% to 3.60% annually for the rest of the period, according to the group.

All world grain markets were characterized by higher prices during the 2007/08 period because of supply shortages and an increase in demand from the emerging biofuels sector. In particular, the world wheat price increased to $313.55 per metric ton because of production losses due to adverse weather. Adjustments in supply and demand settle the wheat price at $264.05 per metric ton in the 2017/18 period, according to FAPRI.

Other notable forecasts in the FAPRI analysis include:

• The price of sugar will increase by 10.7% over the next decade because exportable surplus will be cut significantly in the European Union as a result of its sugar reforms and in Brazil as a result of increased production of ethanol there from sugarcane.

• Strong demand coupled with the doubling of biodiesel trade will drive up world trade within the soybean complex by 17% to 32%. World soybean production may reach 297 million metric tons by 2017/18. Argentina, Brazil, and the United States are forecast to remain the dominant soybean trio, accounting for 81% of world production. China, the world’s largest importer of soybeans, may expand its import share to 57% of total world imports by 2017/18.

• Palm oil remains the most widely used edible oil, and world consumption increases by 46% over the next 10 years.

• Sanitary and phytosanitary issues continued to affect the world meat market in 2007. FAPRI expects that recovery from the problems, sustained income and population growth will lead to higher per capita meat consumption. Consequently, the group’s projections show meat production reaching 248.5 million metric tons, and meat trade expanding to 20.9 million metric tons by the end of the decade. Recovery in demand, along with strong grain prices, will push all meat prices to high levels. The outlook shows the United States and Brazil gaining significant market shares compared to their average levels in 2003 to 2007.

• Because of strong global demand and limited growth in supplies from major exporters, the world prices of butter, cheese, nonfat dry milk, and whole milk powder increased to record-breaking levels in 2007. Strong prices have encouraged production growth in many countries. World dairy prices are forecast to taper in the mid-term, but strong economic growth and rising population favor higher dairy demand, which puts upward pressure on dairy prices in the long term. Australia, New Zealand and the European Union are forecast to remain the big players in export markets, and Argentina and Brazil may expand their dairy exports to substitute for exports that are declining in the European Union due to policy reforms.

JBS, the new U.S. beef giant, expects deals to pass

JBS, the new U.S. beef giant, expects deals to pass
Wednesday March 5, 1:47 pm ET
By Bob Burgdorfer

CHICAGO (Reuters) - A day after shocking the U.S. meat industry with two big beef company purchases, Brazilian meat company JBS SA (Sao Paolo:JBSS3.SA - News) said on Wednesday it expected U.S. authorities to approve the deals without it having to divest assets.

"We are confident we will be successful. We are not thinking about divesting," JBS President Joesley Batista said in a conference call with analysts and journalists.

On Tuesday, JBS announced a $1.27 billion deal to buy National Beef Packing Co and the beef unit of Smithfield Foods Inc, both in the United States, and the Australian beef company Tasman Group.

"That will certainly raise questions with the Department of Justice," Jim Robb, economist with the Livestock Marketing Information Council, said after learning of the deal.

Batista did not specify when the deals would be completed.

If the deals are approved, the Sao Paulo-based meat company will become the largest beef producer in the United States and in the world, holding about a 32 percent U.S. market share and 10 percent of the world beef market, industry sources said.

Tyson Foods Inc (NYSE:TSN - News) is currently the largest U.S. beef company. It had an estimated 25 percent market share, but that share likely slipped after the company recently ended cattle slaughter at its 4,000-head-a-day plant in Emporia, Kansas.

Once the acquisitions are completed, JBS expects company-wide annual revenue of $21.55 billion, up from its current $12.7 billion.

JBS TO KEEP BEEF PLANTS OPEN

The deal comes at a time when the U.S. beef industry is struggling with an excess of processing capacity, sluggish beef exports, and a slowing U.S. economy.

During the call, Batista said the company did not intend at this time to close any beef plants to bring production capacity down to match the cattle supply. However, that could change later.

"We will be studying what we can do to make this company as efficient as possible," he said. "We don't expect to shut down shifts, but we will be ready to do what is necessary to compete, to save costs, and to make money."

U.S. analysts expect that eventually there will be some closures.

"I assume they will close a plant or two to get capacity in line with supplies," said Rich Nelson, livestock analyst with Allendale Inc.

Nelson said such a closure could be a few years in the future.

DEAL LIFTS MEAT COMPANY SHARES

Shares of Tyson Foods and Smithfield Foods rose on Wednesday after analysts said the JBS deal would be good for both companies.

For Tyson, the deal means fewer beef companies buying U.S. cattle, which should strengthen its bargaining position with cattle producers, Kenneth Zaslow, food industry analyst with BMO Capital Markets, said in a research note.

For Smithfield, the $565 million it will receive for its beef operations will be used to pay down debt, Pablo Zuanic, JP Morgan food analyst, said in a note.

Zuanic also saw the deal as a way for the beef industry to better keep beef production in line with cattle supplies.

Near midday on Wednesday in New York Stock Exchange trading, Tyson's shares were up 7.31 percent, or $1.09, at $16.01 and Smithfield's were up 5.02 percent, or $1.40, at $29.28.

Rosemary derived preservatives can prevent sausage rancidity

According to the Slovenian natural extract company, merguez and chipolata sausages have a high fat content, which makes them particularly susceptible to oxidation. The oxidation process can bring about changes in taste and smell, particularly rancidity.

Typical ingredients used to prevent these changes in sausages are citric and ascorbic acid. But given the current sway against artificial preservatives from consumers - and, as a result, from food producers - there is a call for natural solutions to such problems.

Tests have indicated that the sausages' shelf life can be extended by 65 to 80 per cent compared to sausages with no preservative. A company spokesperson was not available before publication of this article to translate this into actual days.

But Vitiva claims this performance even exceeds that of citric and ascorbic acid.

"Our new formulation offers manufacturers an effective yet natural solution to fight oxidative changes in fresh, traditional merguez sausages, together with a great opportunity to employ a clean label," said Vitiva CEO Ohad Cohen.

The company first started talking about its Vivox range in October 2006, just after the publication of an article in the September 2006 Journal of Food Science which described the potential of the antioxidant and antimicrobial effects of oil-soluble rosemary extracts Vivox 20 and Vivox 4 against lipid oxidation and microbial growth in vacuum-packed chicken frankfurters, compared to a commercially available preservative and a control product made without additives.

Vitiva said that the results expressed as APC (CFU/g) clearly showed both Vivox 20 and Vivox 4 possess antioxidant and antimicrobial properties that may make them suitable for meat applications in the food industry.

Vivox formulations, which are made up mostly of carnosic acid combined with other polyphenols. Other formulations in the line has previously used as natural microbial agents for processed chicken and other poultry products.

In addition, Vitiva has a carnosic acid and antioxidant-based range called Inolens 4, with very low bitterness and rosemary flavour; a rosmarinic acid range called Aquarox used to extend shelf life of prawns and for nutraceuticals, and Ursole, primarily for cosmetic uses.

Last September Vitiva announced the addition of new production lines to its natural extracts facility, giving it 70 per cent more capacity to help meet demand.

It also said it is considering acquiring another company so it can support demand with a second facility.

Whilst Vivox, Aquarox, Inolens and Ursole are its main growth promoters, it is also eyeing opportunities in other extracts, such as high-purity lutein.

Vitiva entered the lutein market last year with the launch of encapsulated VitaLutS, which is said to allow for smaller, more manageable, forms than previous industry standards.