Canadian meat processor Maple Leaf reported last week that the company is 'preparing to sell' its primary pork processing plant in Burlington, Ontario.
This site processes more than 2 million pigs a year.
Maple Leaf lost $10,000 in the first quarter of this year, but officials say a new business plan is on track to improve earnings for the Canadian company. A five-year restructuring will shift the company's focus from primary protein operations to value-added meat and meals.
More closures
The company also envisages to start a second-shift cut operation at its plant in Brandon, Manitoba by September of this year and to close its fresh pork processing plant in Winnipeg.
A large expansion is underway at its Lagimodiere Road plant in Winnipeg, involving consolidation of its value-added ham-boning operations. Also, construction of a new distribution centre in Saskatoon is nearing completion.
Friday, May 9, 2008
Pork, chicken prices may rise in next wave of food inflation
By ELLEN SIMON
AP Business Writer
Americans may be getting another helping of food inflation, and it seems likely to come from higher prices for chicken and pork.
Overall food inflation could double this year, lifted by the rising costs of fuel, corn and soybeans, some analysts predict.
Food inflation hit 4 percent last year, up from 2.4 percent in 2006. While beef prices were already high, chicken and pork prices didn't reflect record costs for feed and fuel. That's poised to change as chicken and pig producers who have been losing money slaughter more animals to decrease the supply and raise the prices they can charge.
Higher food inflation would further challenge shoppers who are already limiting themselves to sale items and store brands as they contend with the worst food inflation since 1990.
Mary Lee Rydzewski, a retired Amtrak engine dispatcher who lives in Cheshire, Conn., says she has already switched to store brands and sale items because of higher food prices. If they increase more, she plans to cut back again. But Karen Leedahl, a pastor who lives in Latrobe, Penn., said she always bought store brands and shopped for sale goods. Two weeks ago, she started walking more than a mile round-trip to the grocery store instead of driving.
If prices increase more, "I'm kind of in trouble," she said. "I was already trying to save."
U.S. shoppers spent 5.8 percent of their income on food in 2006, according to the U.S. Department of Agriculture - a lower proportion than any other nation. In the United Kingdom, consumers spent 8.7 percent of their income on food, and in most of the world it's at least 10 percent.
But the U.S. portion seems certain to rise, as chicken and pig producers say prices have to go up as feed costs increase.
"American consumers are only just beginning to feel the impact of sharply higher food prices," said Pilgrim's Pride Corp. Chief Executive Clint Rivers. The nation's largest chicken producer posted a wider quarterly loss Monday as it paid more for feed and took a restructuring charge.
Tyson Foods Inc., the world's biggest meat producer, forecasts that its expenses will rise $1 billion this year, including $600 million for corn and soybean meal and $100 million on grain. The balance will come from higher prices for cooking oil, breading and fuel costs, the company said. Last week Tyson reported a $5 million second-quarter loss and withdrew its earnings outlook, saying feed prices were too volatile. "I think food inflation has got to go up," said C. Larry Pope, president and chief executive of Smithfield Foods Inc., the world's largest pork producer, in a recent speech. "Everything that uses wheat, everything that uses corn, everything that uses corn syrup has got to go up."
The exception may be beef, as already high beef prices may not see the increases that chicken and pork could, said Jim Hilker, an agricultural economist at Michigan State University. "I'm not sure beef prices will go up a lot, but they won't come back down."
Pork farm losses, though, may total $3.8 billion for 2008, one-quarter of total production, according to Chris Hurt, an agricultural economist at Purdue University. He calls the industry "a financial disaster in progress."
It will be easier for publicly traded meat producers to weather a money-losing quarter than for farmer Bill Tentinger in LeMars, Iowa. Tentinger said he expects to spend $85 per hundredweight feeding his hogs this year; at current levels, they will fetch prices in the mid $40s.
"Take that figure, times 10,000 hogs, and see if you can eat breakfast decent in the morning," said Tentinger, 59.
The biggest driver to prices is grain costs, which have been affected by the rise in ethanol production and strong export demand due to the weak dollar. Corn costs have more than doubled over the last two years from $2.50 a bushel to $6. That has added $6 billion to chicken farmers' annual feed bills, according to the National Chicken Council, a trade group. As a result, companies are slaughtering animals to tighten supply. The move will temporarily increase supply, lowering prices, but as farms herds and flocks get smaller, it will raise prices.
Fieldale Farms Corp., a privately held chicken producer, is cutting its production by 5 percent starting in the middle of the month. Tom Hinsley, senior vice president, said he expects higher chicken prices by midsummer.
"They will have to rise, big-time, otherwise, there will be no chicken," Hinsley said.
Pilgrim's Pride said it plans to reduce weekly chicken processing by 5 percent in the second half of the year, and keep production down until margins improve. Smithfield said in February that it would slaughter 4 percent to 5 percent of its breeding sows.
A smaller breeding population and a wave of expected hog farm failures will boost pork prices by 2009, Hurt predicted. He estimates 6 percent to 8 percent of breeding sows will need to be slaughtered to support prices.
The government is giving pork producers a hand by taking some pork off the market. Agriculture Secretary Ed Schafer last week announced a government plan to buy up to $50 million of pork for child nutrition and domestic food assistance programs - at the urging of the National Pork Producers Council. For Tim Bierman, a third-generation farmer in Larrabee, Iowa, pork price increases can't come soon enough.
Bierman spent a recent morning alternately calling and texting his commodities broker from the seat of his tractor, trying to cut the loss he'll take on his 9,000 pigs by hedging the cost of feed on the futures market.
"We're trying to cover ourselves on the futures, if not to turn a profit, then to lose less than we would if we did nothing," said Bierman, 47.
Meat and poultry executives have also come out against federal ethanol mandates, which they say are driving the cost of corn higher. On Monday, Senate Republicans asked environmental regulators to halt the ethanol expansion plans amid the rising food prices.
The U.S. Department of Agriculture predicts overall food prices could increase another 4 percent to 5 percent in 2008. But consultant Jim Hertel, of Willard Bishop food retail consultants in Barrington, Ill., thinks that high commodity and fuel prices, plus demand from India and China, could push food inflation anywhere from to 7 percent to 10 percent.
Hertel is counseling his grocery store clients on price-increase strategies. One piece of advice - don't make your store brands too cheap. Shoppers who buy them are looking for a 20 percent discount, so stores that price them 30 percent cheaper are losing money.
"We haven't seen hard-core food inflation for 30 years," he said. That's not only a challenge for shoppers, it's a challenge for retailers, he said. "A lot of people who knew what to do, who learned their lessons in the late 70s or early 80s, they're retired at this point, if they're lucky."
AP Business Writer
Americans may be getting another helping of food inflation, and it seems likely to come from higher prices for chicken and pork.
Overall food inflation could double this year, lifted by the rising costs of fuel, corn and soybeans, some analysts predict.
Food inflation hit 4 percent last year, up from 2.4 percent in 2006. While beef prices were already high, chicken and pork prices didn't reflect record costs for feed and fuel. That's poised to change as chicken and pig producers who have been losing money slaughter more animals to decrease the supply and raise the prices they can charge.
Higher food inflation would further challenge shoppers who are already limiting themselves to sale items and store brands as they contend with the worst food inflation since 1990.
Mary Lee Rydzewski, a retired Amtrak engine dispatcher who lives in Cheshire, Conn., says she has already switched to store brands and sale items because of higher food prices. If they increase more, she plans to cut back again. But Karen Leedahl, a pastor who lives in Latrobe, Penn., said she always bought store brands and shopped for sale goods. Two weeks ago, she started walking more than a mile round-trip to the grocery store instead of driving.
If prices increase more, "I'm kind of in trouble," she said. "I was already trying to save."
U.S. shoppers spent 5.8 percent of their income on food in 2006, according to the U.S. Department of Agriculture - a lower proportion than any other nation. In the United Kingdom, consumers spent 8.7 percent of their income on food, and in most of the world it's at least 10 percent.
But the U.S. portion seems certain to rise, as chicken and pig producers say prices have to go up as feed costs increase.
"American consumers are only just beginning to feel the impact of sharply higher food prices," said Pilgrim's Pride Corp. Chief Executive Clint Rivers. The nation's largest chicken producer posted a wider quarterly loss Monday as it paid more for feed and took a restructuring charge.
Tyson Foods Inc., the world's biggest meat producer, forecasts that its expenses will rise $1 billion this year, including $600 million for corn and soybean meal and $100 million on grain. The balance will come from higher prices for cooking oil, breading and fuel costs, the company said. Last week Tyson reported a $5 million second-quarter loss and withdrew its earnings outlook, saying feed prices were too volatile. "I think food inflation has got to go up," said C. Larry Pope, president and chief executive of Smithfield Foods Inc., the world's largest pork producer, in a recent speech. "Everything that uses wheat, everything that uses corn, everything that uses corn syrup has got to go up."
The exception may be beef, as already high beef prices may not see the increases that chicken and pork could, said Jim Hilker, an agricultural economist at Michigan State University. "I'm not sure beef prices will go up a lot, but they won't come back down."
Pork farm losses, though, may total $3.8 billion for 2008, one-quarter of total production, according to Chris Hurt, an agricultural economist at Purdue University. He calls the industry "a financial disaster in progress."
It will be easier for publicly traded meat producers to weather a money-losing quarter than for farmer Bill Tentinger in LeMars, Iowa. Tentinger said he expects to spend $85 per hundredweight feeding his hogs this year; at current levels, they will fetch prices in the mid $40s.
"Take that figure, times 10,000 hogs, and see if you can eat breakfast decent in the morning," said Tentinger, 59.
The biggest driver to prices is grain costs, which have been affected by the rise in ethanol production and strong export demand due to the weak dollar. Corn costs have more than doubled over the last two years from $2.50 a bushel to $6. That has added $6 billion to chicken farmers' annual feed bills, according to the National Chicken Council, a trade group. As a result, companies are slaughtering animals to tighten supply. The move will temporarily increase supply, lowering prices, but as farms herds and flocks get smaller, it will raise prices.
Fieldale Farms Corp., a privately held chicken producer, is cutting its production by 5 percent starting in the middle of the month. Tom Hinsley, senior vice president, said he expects higher chicken prices by midsummer.
"They will have to rise, big-time, otherwise, there will be no chicken," Hinsley said.
Pilgrim's Pride said it plans to reduce weekly chicken processing by 5 percent in the second half of the year, and keep production down until margins improve. Smithfield said in February that it would slaughter 4 percent to 5 percent of its breeding sows.
A smaller breeding population and a wave of expected hog farm failures will boost pork prices by 2009, Hurt predicted. He estimates 6 percent to 8 percent of breeding sows will need to be slaughtered to support prices.
The government is giving pork producers a hand by taking some pork off the market. Agriculture Secretary Ed Schafer last week announced a government plan to buy up to $50 million of pork for child nutrition and domestic food assistance programs - at the urging of the National Pork Producers Council. For Tim Bierman, a third-generation farmer in Larrabee, Iowa, pork price increases can't come soon enough.
Bierman spent a recent morning alternately calling and texting his commodities broker from the seat of his tractor, trying to cut the loss he'll take on his 9,000 pigs by hedging the cost of feed on the futures market.
"We're trying to cover ourselves on the futures, if not to turn a profit, then to lose less than we would if we did nothing," said Bierman, 47.
Meat and poultry executives have also come out against federal ethanol mandates, which they say are driving the cost of corn higher. On Monday, Senate Republicans asked environmental regulators to halt the ethanol expansion plans amid the rising food prices.
The U.S. Department of Agriculture predicts overall food prices could increase another 4 percent to 5 percent in 2008. But consultant Jim Hertel, of Willard Bishop food retail consultants in Barrington, Ill., thinks that high commodity and fuel prices, plus demand from India and China, could push food inflation anywhere from to 7 percent to 10 percent.
Hertel is counseling his grocery store clients on price-increase strategies. One piece of advice - don't make your store brands too cheap. Shoppers who buy them are looking for a 20 percent discount, so stores that price them 30 percent cheaper are losing money.
"We haven't seen hard-core food inflation for 30 years," he said. That's not only a challenge for shoppers, it's a challenge for retailers, he said. "A lot of people who knew what to do, who learned their lessons in the late 70s or early 80s, they're retired at this point, if they're lucky."
Wednesday, May 7, 2008
Philippine Pork and Chicken Price Changes Differ
THE PHILIPPINES - According to ABS-CBN, while the price of pork goes down, chicken prices take a leap.
Chicken prices are expected to go up as the summer heat intensifies.
According to the Philippine Association of Broilers and Integrators (PABI), hot weather affects the physical growth of chickens, while some are hit by heatstroke.
Chicken growers, however, said the prevailing price in the market should still be P120 per kilo. They said that there is still enough supply in the market even if May has the biggest demand during the year. Farmgate prices also have not changed.
Chicken prices are expected to go up as the summer heat intensifies.
According to the Philippine Association of Broilers and Integrators (PABI), hot weather affects the physical growth of chickens, while some are hit by heatstroke.
Chicken growers, however, said the prevailing price in the market should still be P120 per kilo. They said that there is still enough supply in the market even if May has the biggest demand during the year. Farmgate prices also have not changed.
Tests find MRSA bacteria in German piggeries
from PigProgress.net
MRSA was found in 28 out of 40 of the pig farms checked in North Rhine Westphalia state, the state farm services bureau in Bonn said.
The bacteria was found in about 70% of the animals; the infected pigs were healthy.
Revelations in the Netherlands
Tests were ordered after it was discovered that the germs are widespread in Dutch piggeries, as early as 2003. Ever since, similar tests to MRSA in piggeries have also been performed in Belgium, the UK and Canada.
German federal health officials advised that consumers should cook pork thoroughly to avoid possible infections.
Documentary
MRSA, a problem in hospitals around the globe, was first detected in animals in 1972. A PlusMinus documentary on MRSA, to be broadcasted this week in Germany, says 35,000 patients catch the bacteria every year in German hospitals. Approximately 1,500 die of it.
Ordinary staphylococcus bacteria are found on most people's skin. It usually only causes sores and other illnesses when immunity is low.
The documentary said 39 of 122 farm workers in one sample had caught the resistant form, possibly from the pigs. Methicillin resistance arises when some of the toughest bacteria survive courses of antibiotics administered to humans or animals.
Tuesday, May 6, 2008
Gov’t lifts import ban on Australian feed
By Amy R. Remo
Philippine Daily Inquirer
First Posted 03:17am (Mla time) 05/06/2008
MANILA, Philippines-- The Department of Agriculture has lifted the ban on importation of meat and bone meal (MBM) feed from Australia.
Agriculture Secretary Arthur Yap recently issued the directive after the Paris-based Office International des Epizooties (OIE) recognized Australia as free of the Bovine Spongiform Encephalopathy (BSE).
BSE, or mad cow disease, is a transmissible and fatal brain ailment afflicting cattle.
Yap said the steps taken by Australian food and health authorities in ensuring the safety of their MBM exports had proven to be satisfactory.
He said MBM feed and other products are regulated and verified by the Australian Quarantine and Inspection Service.
These products are also processed under the Australian Standard for Hygienic Rendering of Animal Products prior to their export.
“The Australian Standard used in Australian MBM, meat meal, bone meal, blood meal, feather meal, poultry meal, poultry by-product meal, tallow, poultry oil and fish meal production is designed to eliminate pathogens relevant to Australia and prevent recontamination of processed rendered products,” Yap said.
Australia exports MBM to Indonesia, Canada, the United States, European Union, Malaysia, South Africa, China, Mexico, Papua New Guinea, Sri Lanka, Thailand and Vietnam.
The Philippines had imposed the ban on fears that BSE could be the cause of a new variant of the Creutzfeldt-Jakob disease, a brain-wasting illness afflicting humans.
In his directive, Yap said cattle meat and MBM should still not be fed to ruminants, such as cattle, sheep, deer and goats.
This move was recommended during a joint meeting of the OIE, Food and Agriculture Organization (FAO) and the World Health Organization in 2001.
Philippine Daily Inquirer
First Posted 03:17am (Mla time) 05/06/2008
MANILA, Philippines-- The Department of Agriculture has lifted the ban on importation of meat and bone meal (MBM) feed from Australia.
Agriculture Secretary Arthur Yap recently issued the directive after the Paris-based Office International des Epizooties (OIE) recognized Australia as free of the Bovine Spongiform Encephalopathy (BSE).
BSE, or mad cow disease, is a transmissible and fatal brain ailment afflicting cattle.
Yap said the steps taken by Australian food and health authorities in ensuring the safety of their MBM exports had proven to be satisfactory.
He said MBM feed and other products are regulated and verified by the Australian Quarantine and Inspection Service.
These products are also processed under the Australian Standard for Hygienic Rendering of Animal Products prior to their export.
“The Australian Standard used in Australian MBM, meat meal, bone meal, blood meal, feather meal, poultry meal, poultry by-product meal, tallow, poultry oil and fish meal production is designed to eliminate pathogens relevant to Australia and prevent recontamination of processed rendered products,” Yap said.
Australia exports MBM to Indonesia, Canada, the United States, European Union, Malaysia, South Africa, China, Mexico, Papua New Guinea, Sri Lanka, Thailand and Vietnam.
The Philippines had imposed the ban on fears that BSE could be the cause of a new variant of the Creutzfeldt-Jakob disease, a brain-wasting illness afflicting humans.
In his directive, Yap said cattle meat and MBM should still not be fed to ruminants, such as cattle, sheep, deer and goats.
This move was recommended during a joint meeting of the OIE, Food and Agriculture Organization (FAO) and the World Health Organization in 2001.
Singapore okays RP pork exports
GENERAL SANTOS CITY — Singapore has finally approved the country’s bid to export pork by accrediting a local firm, National Meat Inspection Service (NMIS) officials yesterday said.
Jane C. Bacayo, NMIS executive director, said Matutum Meat Packing Corp. had been given the green light to ship frozen pork meat by the Agri-Food and Veterinary Authority of Singapore (AVA).
A check with AVA’s website showed that as of last April 28, the list of countries approved to export beef, mutton, pork and poultry to Singapore included the Philippines with one pork exporter.
Matutum Meat, based in Polomolok in South Cotabato province, was one of two Mindanao firms earlier identified by the Department of Agriculture to pioneer the country’s foray into the pork export market. The other one is the Davao City-based Nenita’s Quality Foods Corp., which ceased to operate last year.
Ma. Elizabeth D. Callanta, NMIS export coordinator, said the private sector would embark on a trade mission to Singapore to discuss arrangements with meat dealers there.
"We hope that we can start exporting pork meat parts to Singapore next month with Matutum Meat taking the lead," she said.
Ms. Callanta said Nenita’s application to export pork meat products to Singapore had not yet been approved as there were corrective actions that needed to be done.
"Also, there are changes in the management of Nenita’s. But we have not withdrawn its bid for accreditation," she said.
Recent reports have said that a cooperative of local pork producers were currently leasing Nenita’s’ meat processing facilities in Davao City’s Marapangi district.
Singaporean food and veterinary experts inspected the facilities of Matutum Meat last January but did not issue a clearance due to concerns over antibiotic residues in the meat. They also told the firm to comply with requirements such as tire disinfectant for vehicles and the chlorination of the water used to wash the meat.
Matutum Meat, a sister firm of Cebu-based Sunpride Foods, Inc. which produces Holiday and Sunpride canned goods, has invested around P200 million for its Polomolok facility.
Mindanao was chosen by the government to spearhead the country’s pork exports since it is certified as free from foot-and-mouth disease.
Agriculture Secretary Arthur C. Yap originally targeted foreign pork shipments to start in July 2007.
Jane C. Bacayo, NMIS executive director, said Matutum Meat Packing Corp. had been given the green light to ship frozen pork meat by the Agri-Food and Veterinary Authority of Singapore (AVA).
A check with AVA’s website showed that as of last April 28, the list of countries approved to export beef, mutton, pork and poultry to Singapore included the Philippines with one pork exporter.
Matutum Meat, based in Polomolok in South Cotabato province, was one of two Mindanao firms earlier identified by the Department of Agriculture to pioneer the country’s foray into the pork export market. The other one is the Davao City-based Nenita’s Quality Foods Corp., which ceased to operate last year.
Ma. Elizabeth D. Callanta, NMIS export coordinator, said the private sector would embark on a trade mission to Singapore to discuss arrangements with meat dealers there.
"We hope that we can start exporting pork meat parts to Singapore next month with Matutum Meat taking the lead," she said.
Ms. Callanta said Nenita’s application to export pork meat products to Singapore had not yet been approved as there were corrective actions that needed to be done.
"Also, there are changes in the management of Nenita’s. But we have not withdrawn its bid for accreditation," she said.
Recent reports have said that a cooperative of local pork producers were currently leasing Nenita’s’ meat processing facilities in Davao City’s Marapangi district.
Singaporean food and veterinary experts inspected the facilities of Matutum Meat last January but did not issue a clearance due to concerns over antibiotic residues in the meat. They also told the firm to comply with requirements such as tire disinfectant for vehicles and the chlorination of the water used to wash the meat.
Matutum Meat, a sister firm of Cebu-based Sunpride Foods, Inc. which produces Holiday and Sunpride canned goods, has invested around P200 million for its Polomolok facility.
Mindanao was chosen by the government to spearhead the country’s pork exports since it is certified as free from foot-and-mouth disease.
Agriculture Secretary Arthur C. Yap originally targeted foreign pork shipments to start in July 2007.
Bird flu spreads to South Korean capital
SEOUL - Bird flu has spread to South Korea's capital Seoul despite a massive nationwide cull that saw the slaughter of six million ducks and chickens, officials said Tuesday.
The agriculture ministry said a case was reported at a small aviary run by Gwangjin district officials in eastern Seoul.
"This was the first outbreak in Seoul. We believe it has been caused by infected pheasants that district officials purchased at an open market in the city of Seongnam south of Seoul," a ministry official told AFP.
All 53 chickens, turkeys and pheasants at the aviary were slaughtered Monday night, with quarantine officials decontaminating a nearby public park and open markets.
"Initial blood tests showed pheasants and chickens were infected with bird flu, although the type of the virus is not yet known," he said.
"Health officials are conducting blood tests to determine whether it was caused by the virulent H5N1 strain."
More than six million chickens and ducks have been slaughtered since the country's latest outbreak was reported on April 1, the ministry said.
South Korea's previous outbreak was between November 2006 and March last year, resulting in the temporary suspension of poultry exports to Japan, Hong Kong, Taiwan and elsewhere.
The H5N1 strain has killed more than 240 people worldwide since late 2003. No South Koreans are known to have contracted the disease.
The agriculture ministry said a case was reported at a small aviary run by Gwangjin district officials in eastern Seoul.
"This was the first outbreak in Seoul. We believe it has been caused by infected pheasants that district officials purchased at an open market in the city of Seongnam south of Seoul," a ministry official told AFP.
All 53 chickens, turkeys and pheasants at the aviary were slaughtered Monday night, with quarantine officials decontaminating a nearby public park and open markets.
"Initial blood tests showed pheasants and chickens were infected with bird flu, although the type of the virus is not yet known," he said.
"Health officials are conducting blood tests to determine whether it was caused by the virulent H5N1 strain."
More than six million chickens and ducks have been slaughtered since the country's latest outbreak was reported on April 1, the ministry said.
South Korea's previous outbreak was between November 2006 and March last year, resulting in the temporary suspension of poultry exports to Japan, Hong Kong, Taiwan and elsewhere.
The H5N1 strain has killed more than 240 people worldwide since late 2003. No South Koreans are known to have contracted the disease.
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