Sanderson reports first-quarter loss of $6.7 million

Sanderson Farms Inc. reported a net loss of $6.7 million, or $0.33 per share, for the first quarter of fiscal 2009 compared with net income of $6.2 million, or $0.30 per share, for the first quarter of fiscal 2008. Net sales were $388.9 million compared with $362.6 million for the same period a year ago.
The first-quarter results reflect prevailing economic conditions and reduced consumer demand for protein consumed away from home, according to Joe F. Sanderson, Jr., chairman and chief executive officer. "Demand for chicken products held steady in the retail grocery market, but the slowdown in restaurant traffic continues to adversely affect sales to our foodservice customers,” Sanderson said. “While market prices improved during the quarter compared to where the markets stood at the end of fiscal 2008, it was not enough to offset our costs. Grain prices for the quarter were actually down sequentially compared to our fourth quarter of fiscal 2008, but were still higher than last year's first quarter."
The company said chicken prices were mixed during the first quarter citing boneless breastmeat prices down 9% and jumbo wing prices up 6.5%.
"We do not expect demand to improve until the economy gains some traction and consumers resume spending and dining out again," Sanderson said. "We will continue to manage our operations as efficiently as possible through this cycle and we do not plan to return to full production until we see an improvement in market conditions. However, we do expect that our feed costs will be lower this year as grain prices are also being affected by the economy and reduced demand.
"We continue to believe market forces will balance supply and demand for our industry over the long-term. Until consumer demand returns, any market price improvement will have to come from supply side reductions," said Sanderson.

Hearing set to determine growers' complaint with Pilgrim's

A bankruptcy judge set a hearing for next month to determine whether Pilgrim’s Pride discriminated against chicken growers when it canceled their contracts.
Nine growers are challenging Pilgrim’s over the termination of their contracts, according to an Associated Press report. The growers' attorney is arguing on their behalf that the “group was targeted because most are Hispanic, didn’t always agree with the company and some had formed a poultry club similar to a union.”
Pilgrim’s Pride attorney Stephen Youngman said the company did not violate the law and must be able to make cost-cutting measures while reorganizing. “Harm to the parties, while unfortunate, is something the court should not take into account,” Youngman told the judge. “A debtor’s primary duty is to maximize the estate.” Pilgrim's Pride terminated the contracts of about two dozen poultry producers after filing for Chapter 11 in December, and later that month announced that it planned to lay off approximately 500 workers at the Live Oak, Fla. plant where the growers’ chickens are processed.
A hearing on the matter is scheduled for March 10.

Extremist attacks on global food chain increase 42% in 2008, says Alliance

Attacks on the global food chain from animal rights and environmental extremists jumped 42%—from 155 in 2007 to 220 in 2008—according to Arlington, Virginia-based Animal Agriculture Alliance.
Worse yet, claimed attacks on food retailers in the U.S. from groups like the Animal Liberation Front exploded 377%, said the Alliance.The information compiled by the Alliance showed that Animal Liberation Front (ALF), Earth Liberation Front (ELF), DBF (a branch of ALF found in Sweden and the Netherlands) and related groups claimed a total of 640 acts of sabotage, vandalism and arson in 2008, up from 467 in 2007, an increase of over 35%. The overall level of animal rights extremist attacks in the U.S. on businesses that use animals—including medical research, consumer product safety, pets, circuses, rodeos, fur shops, hunting stores, farmers, ranchers, food retailers—surged nearly 40%.
An even more troubling development is the massive expansion of damages inflicted upon food retailers. Claimed attacks on food retailers in the U.S., especially the brand names of McDonald’s, Burger King, KFC and Hardee’s, increased from 9 in 2007 to 34 in 2008, an increase of 377%. Destruction or defacement of property—especially smashing windows, etching windows, and painting (or paint bombing) windows, buildings, vans and billboards—were the most frequently used techniques used by extremist groups in their attempts to intimidate food chain businesses to shut down.
In terms of terrorist activities, global animal rights extremist groups combined to claim over 600 separate terrorist acts, including arson, firebombing autos/trucks, theft, and much more. Attacks in Mexico on the rise, U.S.“hotbeds of extremism” not only targets Extremists claimed responsibility for the “liberation” of thousands of animals during the year, and millions of dollars in damage. Mexico appears to be an emerging center for animal rights terrorism.
In 2008, extremist groups in Mexico claimed more than double the amount of attacks than were claimed in the U.S. The geographic array of attacks in the U.S. is equally disturbing.
“We have seen a significant change in extremist activity directed against the food chain,” said Kay Johnson Smith, executive vice president of the Animal Agriculture Alliance. “The numbers of attacks against food retailers in hotbeds of extremism like California and New York were noticeably lower, while attacks in other areas not widely associated with animal rights extremism increased markedly."
The message is loud and clear that the agenda of these groups is focused solely on advancing a vegan agenda through destruction and intimidation,” said Johnson Smith. “The fact that extremists are willing to massively increase their attacks on the food chain during a serious economic downturn should cause major alarm for all companies and organizations responsible for feeding people. The exponential escalation of attacks is shocking and disturbing. All companies in the food chain need to be vigilant, enhance their security efforts and be sure to report all incidents to their local police and the Federal Bureau of Investigation (FBI).”
The Alliance said that Bite Back magazine was its main source for compiling data on terrorist acts claimed by the animal rights terrorist groups. Additionally, independent media reports and state agriculture groups also provided critical information, said Alliance.

Sanderson's `Pull From The Pantry' program encourages home-prepared meals

The slowing economy and packed schedules are forcing families to look for creative ways to save time and money. With that in mind, Sanderson Farms has developed its “Pull From The Pantry” program that encourages families to prepare meals at home with basic ingredients currently found in their kitchens.
By utilizing inexpensive ingredients found in most kitchens, the program is helping families stay on schedule and on budget, with recipes starting as low as $2 per person, said Sanderson.
Recipes include Asian-inspired chicken and basil stir fry or classic italian chicken parmesan. For a new take on sandwiches, Sanderson has created chicken lettuce wraps and updated the traditional American chicken pot pie. All of the recipes feature chicken as a lean and healthy, center-of-the-plate ingredient.

Fibrowatt selects site for renewable energy

A new biomass power plant is coming to North Carolina.
Fibrowatt has selected a site offered by Montgomery County near Biscoe, N.C., to build a new power plant that will be fueled with poultry litter and other biomass materials. Construction is expected to start in 2010 and the plant is scheduled to open in 2012.
“The substantial economic investment that Fibrowatt is making in Montgomery County is extraordinarily valuable, especially during these challenging economic times,” said Lance Metzler, county manager of Montgomery County. “This project will support 100 new jobs and have a significant, positive impact on our economy. At the same time, Fibrowatt is offering an important service to the local poultry industry that will deliver economic and environmental benefits.”
Fibrowatt has previously announced plans to build poultry litter-fueled power plants in Sampson and Surry counties. The next steps include signing long-term agreements for the purchase of the plants renewable energy and proceeding with permitting, financing, and construction.

U.S. poultry, egg exports set all-time record in 2008

The total export value of U.S. poultry meat, table eggs and processed egg products set an all-time record last year, reaching $4.7 billion, 25% above 2007.
This makes the second consecutive year of record exports for the U.S. In 2007, poultry and egg exports increased by 41% over 2006. Also, for the first time, exports of all poultry and egg products in 2008 passed the $5 billion milestone. The total, which reached $5.05 billion, up 24% over the previous year, includes non-food items such as live breeding stock, hatching eggs and feathers and down, according to trade data compiled by the USDA’s Foreign Agricultural Service.
Broiler meat exports (excluding chicken paws) for 2008 set a new record in both quantity and value. Export quantity reached 3.2 million metric tons, up 18% over 2007, while export value reached $3.5 billion, $777 million or 28% ahead of the previous year, said Dr. Renan Zhuang, director of economic analysis at the USA Poultry & Egg Export Council (USAPEEC).
U.S. turkey meat exports also established records in both volume and value in 2008. Total turkey meat exports last year reached 306,787 tons, up 24% from 2007, in large part because of increased import demand by Mexico and China.
Export value in 2008 soared to $481.9 million, an increase of 21% from previous year, said Zhuang, who analyzes U.S. industry data for USAPEEC.
Broiler exports less concentrated for U.S. broilers, exports have become increasingly less concentrated, said Zhuang. Volume to the top three markets last year – Russia, China, and Mexico – totaled 1,464,625 tons.
The combined share of broiler exports to the Big Three was 46% in 2008, compared to 52% a year earlier. While export volume to Russia for the year decreased by 4%, volume to China and Mexico increased by 12% and 27%, respectively. Zhuang said that monthly U.S. broiler meat shipments to all destinations in 2008 increased year-on-year over 2007 in every month but November.
Total broiler meat exports for the first half of 2008 were 1.5 million tons, up 20% year on year. Exports for the second half of 2008 were 1.7 million tons, a year-on-year increase of 16% and an increase of 11% from the first half of 2008.Also, broiler meat export prices in the second half of 2008 increased about 6% from the first half of 2008, even as the world economy entered into a severe economic downturn, Zhuang said.
For chicken paws, U.S. exports in 2008 reached 508,735 tons, an increase of 19% from 2007. Export value reached $339.5 million, an increase of $68.1 million or 25% over the previous year. Of the total, 83% of U.S. paws exported were shipped to China, while 15% were shipped to Hong Kong. That is, about 81% of the chicken paws produced in the U.S. were harvested for export to China in 2008, Zhuang said.
The increase in paw exports to China is partially because of the relatively lower export prices. While the average export price (unit value) for chicken paws in China increased by 6%, the export price for other broiler meat products exported to China increased by 11%.
Exports of turkey meat to Mexico, the top market for U.S. turkey, reached 162,545 tons, an increase of 19% from the previous year. Meanwhile, U.S. turkey exports to China, the second-leading destination, reached 38,838 tons, an increase of 78% from 2007. Exports to Russia, the third-leading market, were 11,819 tons, down 15% from a year earlier. Turkey exports to other markets such as Hong Kong, Taiwan, Singapore, Dominican Republic, and Haiti also increased significantly.
Value of table eggs, processed egg products up slightly although the combined export value of U.S. table eggs and processed egg products in 2008 set a new record of $142.2 million, up 3% from the previous year, export volume of table eggs, declined by 27%, to 57.5 million dozen.
Export value of table eggs dipped from $63.4 million in 2007 to $50.81 million in 2008, down 20%. Even though table egg exports to Canada increased by 42% from 2007, exports to many other important markets, such as Hong Kong, decreased significantly. For egg products, 2008 export value reached $91.4 million, an increase of $17.2 million or 23% from the previous year. Exports to Japan, the top export market for U.S. egg products, increased significantly from $25.27 million in 2007 to $38.07 million in 2008, an increase of 51%.

Egg proteins may help lower blood pressure, say scientists

Eggs may be beneficial in lowering blood pressure, according to research by Kaustav Majumder and Jianping Wu at the University of Alberta in Canada.
In a recent issue of the Journal of Agricultural and Food Chemistry, the researchers describe the identification of egg proteins that might have effects similar to ACE inhibitors, prescription drugs used to treat high blood pressure. Majumder and Wu identified several different peptides in boiled and fried eggs that act as potent ACE inhibitors. Their research showed that enzymes in the stomach and small intestine produce these peptides from eggs. Fried eggs had the highest ACE inhibitory activity.The scientists say, however, that it will take studies in humans to determine if the egg proteins do lower blood pressure in people.

Bachoco reports fourth-quarter results

Industrias Bachoco S.A.B. de C.V. (Bachoco), Mexico's leading poultry production and processor of poultry products, announced its results for the fourth quarter and year ended December 31, 2008:
*Total sales in 4Q 2008 increased 23.3% when compared with the same period of 2007; recording the highest sales level in a quarter in the company's history and increasing 10.4% for the full year.
*Chicken sales for the quarter increased 26.6% as chicken prices rose 18.1%, and volume increased 7.1% from the previous year.
*The table egg business line also remained strong; sales increased by 15.8% during the quarter as egg prices rose 20.9%, which was partially offset by a 4.2% decrease in volume.
*The company recorded a negative operating margin of 1.4% during 4Q 2008 but a positive EBITDA margin of 1.4%.* Net loss per share in 4Q 2008 was Ps. 1.46, or US$1.26 per ADR, compared to a net income per share of Ps. 0.30, or US$0.26, per ADR reported in the same 2007 period.
"During the quarter, the company had to tackle several adverse conditions that, again, affected our results,” said Cristobal Mondragon, Bachoco's CEO. “Inventory on hand at higher cost, currently being consumed, affected our cost of sales, and the Mexican economy slowed down following global trends, which led us to post negative results in terms of operating margin,” he said. “In addition, the abrupt depreciation of the Mexican peso against the U.S. dollar also affected our operating results, but mainly affected our net margins for the quarter."Despite this adverse environment, and oversupply conditions in the chicken market at the beginning of the quarter, which were later reversed in the end, we were able to record encouraging results. We recorded the highest sales level for a quarter in the company's history. Particularly robust was the volume of chicken sold, our main product line, while reporting strong results in table eggs, our second main business line."
In terms of EBITDA, we achieved positive results, and by the end of the quarter we also registered positive operating levels that have spilled over to the beginning of 2009,” Mondragon said.

Poultry meat production in China up 11%, despite bird flu

Despite outbreaks of highly pathogenic avian flu (H5N1), poultry meat production in China in 2008 is expected to have increased by 11% compared to 2007, boosted by strong domestic consumption, according to the European Market Survey.
In 2008, China reportedly imported 4% more fresh and frozen poultry meat, with import demand particularly high in the second and third quarters, driven by increased trade arising from the summer Olympics. The United States maintained its position as primary poultry producer, increasing its market share to 73%, up seven percentage points on 2007.
Supplies from Argentina were also higher as it capitalized on the absence of Brazilian product.Frozen chicken cuts accounted for 95% of all the fresh and frozen poultry meat imported in 2008, of which 57% was in the form of chicken feet, says the European Market Survey.

Boston Market introduces Crispy Country Chicken menu items

The chicken experts at Boston Market are bringing the flavors of country to their menu with the introduction of Crispy Country Chicken.
The breaded, all-white meat chicken breast is baked until crisp and can be enjoyed as an individual meal, a sandwich, or on a salad. The Crispy Country Chicken individual meal is topped with creamy county gravy and served with two gourmet sides and cornbread. The Crispy Country Chicken sandwich is topped with a creamy Dijon spread, lettuce and tomatoes, and served on Artisan whole grain bread or on a white baguette. And finally, the Crispy Country Chicken can be sliced and added to Boston Market's Caesar or Market Chopped Salad.
"We are extremely excited to introduce Crispy Country Chicken to our menu," said Judy Cantrell, Boston Market chief brand officer. "We believe this new menu item provides a taste alternative to our signature rotisserie chicken, but our guests will taste the quality of the 100% white meat chicken breast."
The new Crispy Country Chicken menu items will be supported by a national advertising campaign, launching the first week of March.
Boston Market pioneered the rotisserie chicken restaurant category in 1985 and throughout the past 24 years has continued to refine and expand their menu. The new Crispy Country Chicken menu items are available permanently in all stores for lunch and dinner.

Cantrell Machine purchased by poultry veterans

Poultry industry veterans Tony Rice and Dane Woods have acquired Cantrell Machine Company, a poultry processing equipment sales and service company based in Gainesville, Ga.
“It’s our goal to lead Cantrell Machine Company to the next level,” said Woods, company co-owner and director of sales, service and engineering. “As part of that commitment, we’re shortening the name to ‘Cantrell’ to unite the strength of the company’s past with a vision of constantly improving poultry processing safety, hygiene and profitability for our customers.”
Woods and Rice emphasize that they will remain focused on the principles that have always made Cantrell successful. “We’ll offer the same strong customer service and reliability that Cantrell has always been known for, and enhance the product line and build on that great reputation for service,” said Rice, co-owner and director of operations and finance.
Cantrell distributes and services poultry processing machinery and parts in the United States and abroad. “All the parts are manufactured 100% in the U.S.,” Woods said. While the majority of company’s sales are in the United States, Cantrell’s service to Mexico, roughly 10% of its business, is expected to grow in the next decade.Rice worked at Cantrell for 15 years and has been involved with all phases of the industry since 1983. Woods has worked in poultry production processing since 1975, focusing on processing equipment in 1984. Previously, as director of sales at Cantrell, he also worked in servicing and selling equipment.

FDA approves drug from genetically-altered animals

The Food and Drug Administration has approved the first drug made with materials from genetically-engineered animals.
According to the New York Times, the drug is produced by livestock that have been given a human gene. GTC Biotherapeutics said regulators cleared its drug, ATryn, which is manufactured using milk from goats that have been scientifically-altered to produce extra antithrombin, a protein that acts as a natural blood thinner.
The FDA said it cleared the drug to treat patients with a rare hereditary disorder that causes a deficiency of the protein, putting them at higher risk of deadly blood clots. Genetically engineered, or GE, animals are not clones but rather animals that have had their DNA changed.

Brazilian broiler exports increased 11% in 2008

Showing a slight recovery in relation to the previous month, December broiler exports were 266.598 tons, a 13.42% increase in relation to November, according to ABEF—the Brazilian Poultry Exporters Association.
With this result, 2008 exports reached a new record, reaching 3.645 million tons, which represents a nearly 11% increase in comparison to 2007.For January – December 2008, exports reached 3.6 million tons, with a value of US$6.9 billion, a 5% growth in revenue, ABEF said.

Tyson to maintain 'sense of urgency' on poultry profitability

Even though poultry market conditions are showing signs of improvement, the leadership of Tyson Foods Inc. said they will maintain a "sense of urgency" in returning the company's chicken business to profitability.
Interim President and CEO Leland Tollett today addressed shareholders at the company's 46th annual meeting. He told them market fundamentals in the chicken business have been improving, with product values going up and input costs down. However, he also emphasized the company must not solely rely on better market conditions.
"To be successful, we need to have efficient, high-performing operations, and we are making progress," Tollett said. He indicated Tyson's poultry yields, labor management and plant efficiencies are currently competitive and noted the company continues efforts to enhance product mix, as well as customer service and satisfaction. "Although we've improved our execution, we must maintain our sense of urgency to return our chicken business to acceptable levels of profitability and regain our position as best in class," he said.
While acknowledging the challenges the company has been facing, he told shareholders "we're doing a lot of things right. We've got the right core strategies for the company. We're getting the chicken business turned around. Beef, pork and prepared foods are solid, well-run businesses." Tollett also said that the company had made significant progress growing the company's international business and proceeding with the company's renewable products initiatives.
"And, most importantly, we've got the right people leading the business. They are energized and have my full confidence," he said. Tyson's current key strategies include developing new products customers need, improving operational efficiencies, continuing international expansion and remaining focused on ways to add value to by-products.
Tyson Chief Financial Officer Dennis Leatherby also spoke to shareholders and expressed confidence in the direction of the company. He noted Tyson's liquidity, which was $1.1 billion at the end of the first quarter of fiscal 2009, enabled the company to make international acquisitions and fund its renewable products efforts.

FSIS to set zero salmonella tolerance for high-risk poultry products

USDA’s Food Safety and Inspection Service (FSIS) said it will issue a new notice establishing a zero tolerance for salmonella on raw, frozen, stuffed poultry products that have the appearance of being ready to eat.
Chicken cordon bleu, chicken kiev, and chicken stuffed with broccoli are included in this class of products. FSIS indicated that the notice would also provide instructions to inspection personnel on obtaining finished product samples on a regularly scheduled basis.
Although labels clearly warn consumers that the product must be cooked and should not be prepared in a microwave, many of the consumers who became ill from these products ignored the labels. FSIS said it has decided to take this action because of the number of foodborne illnesses over the past few years associated with this class of products and that labeling alone will not reduce the risk of these products to consumers.
FSIS said it believes there are steps that processors can take in the manufacture of these products, such as the use of antimicrobials, to achieve a non-detectible level of salmonella in the finished product.

International Poultry Expo/Feed Expo attracts over 18,000

The 2009 International Poultry Expo/Feed Expo attracted more than 18,000 industry leaders from throughout the United States and around the world last week.
Sponsored by U.S. Poultry & Egg Association (USPOULTRY) and the American Feed Industry Association, it is the world’s largest poultry and feed event.The main attraction was the huge exhibit floor where 888 exhibiting companies displayed the latest equipment, supplies and services used in the production and processing of poultry, eggs and feed.
All segments of the industry were represented, from live production and processing to further processing and packaging.
“We are very pleased with this year’s Expo,” said newly elected USPOULTRY chairman Monty Henderson, George’s Inc., Springdale, Ark. “We are particularly gratified with the number of attendees and exhibitors, in light of the current economic conditions. And we saw enthusiastic participation in the education programs and other activities during the show,” he added.
In addition to the exhibits, the education programs keep industry management up to date on current issues and concerns. The Animal Agriculture Environmental Sustainability Summit focused on the challenges and solutions of environmental stewardship. One of the highlight of the summit was Bob Langert, McDonald’s Corporation, discussing his firm’s sustainability efforts in the restaurant industry.
The College Student Career Program drew almost 300 students from universities around the nation. Graduating students interview for jobs with industry and allied firms, in addition to complementing their studies by seeing the latest technology used in the modern poultry production.

Program set for 2009 Environmental Management Seminar

The 2009 Environmental Management Seminar, sponsored by U.S. Poultry & Egg Association’s Poultry & Egg Institute, will be held March 4-5, at the Doubletree Hotel in Nashville, Tenn.
“The poultry industry has a history of responsible environmental stewardship,” said program committee chairman Jamie Burr, Tyson Foods, Springdale, Ark. “But it is important that we continue our good record. The planning committee has developed an agenda that identifies the challenges of environmental management and sustainability, and it will examine the latest technologies and management techniques to meet those challenges,” he added.
The program will include a “Federal Policy and Regulatory Update from the New Administration,” “Poultry House Air Emissions,” the “Latest Technology for Turning Waste into Fuel,” and a mini-symposium on “Water Quality,” among other topics.

USDA, DOE announce $25 million funding for biomass research

The U.S. Department of Energy (DOE) and U.S. Department of Agriculture (USDA) announced up to $25 million in funding for research and development of technologies and processes to produce biofuels, bioenergy and high-value bio-based products, subject to annual appropriations.
"These grants will help support the development of a sustainable domestic biofuels industry by broadening the nation's energy sources as well as improving the efficiency of renewable fuels," said Agriculture Secretary Tom Vilsack.
The departments will fund projects in the following three areas: feedstocks development, biofuels and bio-based products development, and biofuels development analysis. Award amounts are planned to range from $1 million to up to $5 million with project periods up to four years, subject to annual appropriations. Eligible applicants include institutions of higher education, national laboratories, federal research agencies, state research agencies, private sector entities, non-profit organizations or a consortium of two or more of those entities.
The funding opportunity announcement and the closing date for pre-applications is March 6, 2009, which must be submitted electronically. A minimum recipient cost-share of at least 20% of total project cost for research and development projects and 50% of total project cost for demonstration projects is required.

Nine poultry farms added to quarantine in Fraser Valley

Thirty-six poultry production operations across the Fraser Valley in British Columbia, Canada, are now under quarantine after inspectors sealed off nine more operations to try to contain an avian flu outbreak in the region.
The disease has been confirmed on only one farm so far although testing and monitoring continue. On Sunday, the Canadian Food Inspection Agency quarantined the nine new farms because they received products or equipment from the affected facility. Seven of the newly quarantined farms are outside the three-kilometer restricted zone established as soon as avian flu was suspected at the first farm.
About 60,000 turkeys on the E & H Farms property in Abbotsford were destroyed last week after testing confirmed an H5 strain of the avian influenza virus had infected birds in one of two operations on the site.