Alltech founder asks ‘What If?’ for future of food and ag

Dr. Pearse Lyons, Alltech founder and president, addresses delegates and poses the question of “What If?” during the opening plenary session at the 30 ^th  Annual Alltech International Symposium in Lexington, Kentucky. 
More than 2,000 delegates from 60 countries have gathered for “What If?” the 30^th Annual Alltech International Symposium, which is taking place May 19-21 in downtown Lexington, Kentucky. The symposium opened with a welcome address from Alltech founder and president Dr. Pearse Lyons, who posed the question of “what would you do with $10,000” to the gathered audience who were eager to discover more about what lies ahead for the agri-business industry. Lyons founded Alltech in 1980 with $10,000 capital, and the company has grown to annual sales of $1 billion.
Lyons posed several “What If?” scenarios in the opening plenary session of the Alltech Symposium including asking delegates what type of legacy they will leave behind for future generations.
 “It is hard to believe that I hosted the Alltech’s inaugural symposium 30 years ago,” said Lyons. “Since then, my company has become a scientific leader in the field of agribusiness, and we are now in our fourth decade of improving the health and performance of people, animals and plants through our ground-breaking scientific innovations.”
Evoking curiosity with its theme, “What If,” the Alltech Symposium is focusing on the areas of crop science, life sciences, Africa, modern farming, the algae opportunity, and business and technology – all primary topics of focus, featuring notable, expert speakers from around the world.
During the opening plenary session, Dr. Karl Dawson, Alltech vice president and chief scientific officer of research, presented on the six big visions that promise to radically change the global supply chain:


• Theface of agriculture is changing towards urban and vertical production
• Bigdata will provide new opportunities – such as new analytical tools
• Newpredictive models will drive precision agricultural systems
• Newnutritional approaches will change the way we eat
• Newstandards will be used for nutritional management
• Traceabilitywill drive the food chain and control waste
The most significant challenge is to feed the world in 2050 when the global population is set to reach nine billion.
“Science and technology will continue to change the way we produce food,” said Dawson. “We can now understand our livestock with the aid of molecular tools, which provide us with billions of observations while big data presents us with new opportunities.”
Lyons shared Alltech’s passionate commitment to scientific innovation and told the audience it was about “TIP” – Transformation, Inspiration and Passion.
“With passion you can move mountains and bring people with you,” said Lyons.

Maple Leaf Foods restructures, expands prepared meats business

Maple Leaf Foods is investing $560 million in infrastructure and technologies over the next three years to restructure and expand its prepared meats network, reduce operating costs and increase productivity.
The changes, combined with other strategic value creation initiatives, are expected to significantly increase the company's competitiveness and profitability in the near and longer term. Included in this investment is the construction of a $395-million, 402,000-square-foot prepared meats facility. Maple Leaf will also invest in existing plants in Winnipeg, Saskatoon and Brampton. The company's plants in North Battleford, Kitchener, Hamilton, Toronto, Moncton and a small facility in Winnipeg will close by the end of 2014 as production is consolidated into new or expanded facilities.
Maple Leaf will also simplify its distribution network by consolidating four distribution centers into two; a new, purpose-built facility in Ontario servicing eastern Canada; and an existing facility in Saskatoon serving as the western Canadian hub. Distribution centers in Moncton, Burlington, Kitchener and Coquitlam will be closed by 2014.
The company's value creation plan is expected to result in EBITDA (earnings before interest, tax, depreciation and amortization) margins of 9.5% in 2012 and 12.5% in 2015. Maple Leaf expects to incur restructuring costs of approximately $170 million before taxes related to these strategic initiatives, of which approximately $120 million represents cash costs. "The final phase of this plan will establish Maple Leaf Foods as a more streamlined and profitable company, well positioned to deliver significant and sustainable value to its shareholders," said Michael H. McCain, president and CEO.
The investment will create approximately 1,150 new jobs. Facilities closures will result in a net reduction of approximately 1,550 positions, with the majority of the workforce reductions occurring in 2014. 

China to ban antibiotics as growth promoters

China's Ministry of Agriculture has announced a forthcoming ban on antibiotics as growth promoters in animal feed.
The ban is supported by the academic community, which believes that without antibiotics in animal feed, the health of animals will be better promoted, microbes' resistance to antibiotics will be lowered and food will become safer to eat.
Recent statistics show that in 2006 China produced 210,000 tons of antibiotics, and 97,000 tons were added to animal feed. Today it is estimated that 400,000 tons are produced annually.

Poultry market data available on WATTAgNet

WATTAgNet's Market Data section offers a quick collection of statistics for the U.S. poultry industry.

The new Market Data section of WATTAgNet offers a snapshot of statistics for the U.S. poultry industry.
The statistics can be viewed on a single page for easy reference, and the charts can be made larger by simply clicking on them. Figures shown include:

• grain prices
• grain futures
• broiler-type eggs set
• broiler-type chicks placed/hatched
• broiler prices (whole birds/parts) 
• table egg prices
• egg production

The data is updated as available on a daily, weekly or monthly basis.

Hear update on global macroeconomic outlook

Dr. Bruce A. Scherr, chairman of the board and CEO of Informa Economics, will present his Global Macroeconomic Outlook in a webinar on Dec. 9, 2010, at 8 a.m. CST.
Scherr will address critical economic questions for animal agribusiness executives, such as whether the global economic recovery is on track or stalling, the shape of the U.S. recovery, whether or not Asian expansion can lead the world recovery and others. See a full agenda and registration information. 

US farm, ranch survey shows income up

A new survey by Rabobank shows that income for U.S. farmers and ranchers improved over findings of two prior surveys. Beef, dairy and row crop farmers surveyed in the Rabobank U.S. Farm & Ranch Survey reported a 24% improvement in income since fall 2009, while about half of U.S. producers state that their income was worse when compared to last year.
Half of producers expect income to improve while half expect income to decline in the next year. The survey found that 43% reported a decline in profitability. About 20% more producers reported higher costs. View a full copy of the report online at the Rabobank website.

Cherkizovo posts record profits

In 2009, Russian meat processor Cherkizovo reported a 54% increase to its highest profits ever of $120.2M, compared with $78.1M in 2008, according to The Moscow Times. Sales totaled $1.09B, a 12% rise from 2008. Operational expenses fell by 20%.
Cherkizovo produced 53,800 metric tons of pork worth $139.9M, a 24% sales increase. Poultry output, on the other hand, was about the same as in 2008 at 184,300 metric tons, and sales dollars fell 7% to $470.1M.

ADM named most admired food production company

Archer Daniels Midland Company was ranked the most admired company in the food production industry for the second year in a row by Fortune magazine. Fortune also ranked ADM at the top spot in the food production industry in seven of the nine categories by which companies are evaluated: innovation, use of corporate assets, social responsibility, quality of management, financial soundness, long-term investment and quality of products and services.
To compile the Fortune World’s Most Admired Companies list, the magazine surveyed more than 4,000 executives, directors and analysts for their evaluations on nine criteria of 667 companies from 33 countries

Sharp decrease in Spanish rabbit production

Rabbit meat production in Spain has dropped by about one-quarter in the past seven years, according to data from the Spanish ministry responsible for rural affairs. Output in 2009 totaled 72,000 metric tons, compared with almost 95,000 tons in 2002. The largest annual decrease in recent years was between 2007 and 2008, when production fell by nearly 9%.
Spain’s rabbit industry group, Intercun, says it is looking to 2010 to bring some return of profitability after a period of increases in production costs. The economic recession is blamed for causing a significant downturn in the Spanish demand for rabbit meat. A campaign to promote consumption is planned for this year.
Rural ministry figures show 6 million rabbits kept nationally for meat and fur in 2009, mostly in the regions of Catalonia, Aragon, Galicia and Valencia.

Justice Department, USDA to hold first ag industry competition workshop

On March 12, the Department of Justice and the U.S. Department of Agriculture will hold their first-ever joint workshop to explore competition and regulatory issues in the agriculture industry. Speakers will include Christine Varney, the Department of Justice's assistant attorney general for the Antitrust Division; Agriculture Secretary Tom Vilsack; Iowa Agriculture Secretary Bill Northey and Iowa Attorney General Tom Miller.
This is the first workshop in an ongoing series. It will be held in Ankeny, Iowa, at the Des Moines Area Community College's FFA Enrichment Center. Registration is free and open to the public.
The workshop will include two panels focusing on competitive dynamics in the seed industry and trends in contracting, transparency and buyer power. It will end with an enforcer roundtable and public testimony. A full schedule is available on the Department of Justice Web site.

Cellulosic ethanol production falls far short of goal

Production of cellulosic ethanol—fuel made from nonedible plant material such as switchgrass— will reach only 6.5 million gallons in 2010, falling far short of the 100 million gallons mandated by Congress, The Wall Street Journal reported.
The mandate was part of a 2007 congressional bill that set progressive goals for biofuel production. It set the 2011 production goal for cellulosic ethanol at 250 million gallons and the 2022 goal at 16 billion gallons.
The news came as the Interagency Working Group, created by President Barack Obama to assist with biofuel policy, released a report that said the recession and a lack of cooperation among government agencies have hindered biofuel development. The working group suggested government research loans "could be targeted more effectively to support the emerging industry." It also recommended that the EPA test 15% and 20% ethanol fuel blends for light-duty vehicles, lifting the current limit of 10% if the tests are successful, the newspaper reported.
Production of cellulosic ethanol by private companies has recently met unanticipated hurdles, according to The Wall Street Journal. Cello Energy, which was expected by the EPA to produce the bulk of the 2010 goal at 70 million gallons, is now expected to produce only 2 million gallons after legal issues involving investor fraud limited its ability to invest in facilities. The EPA also revised its forecast for the wood-to-ethanol plant of Range Fuel Inc. from 10 million gallons to 2.5 million gallons.

Newsletter covers policy updates

WATT, in cooperation with Informa Economics, has launched a weekly newsletter delivering the latest in policy and regulatory updates from Washington, DC. Prepared by the staff of Informa Economics and WATT, the newsletter will be e-mailed to subscribers every Monday morning.
You can access the stories from this week's issue by clicking on the headlines to the left. A story with a key next to the headline is locked, and requires subscribing to the newsletter to read. To receive a trial subscription, you must register as a user of WATTAgNet, then select Animal Agribusiness Policy Report in the Manage Subscriptions area. For more detail, see the story, "How to subscribe."

Sustainability as a business practice

Before they ask about price, product quality or delivery schedules, customers ask poultry and meat companies about sustainability, according to C. Larry Pope, president and CEO of Smithfield Foods Inc. He told an audience at the 2010 International Poultry Expo and International Feed Expo that sustainability goes beyond environmental programs to include animal welfare, antibiotic and drug usage policies, product traceability, worker safety, food safety systems and even financial stability of the company.
Pope’s talk was part of the exposition’s Animal Agriculture Sustainability Summit. Pope said that the animal agriculture industry needs to listen to and engage with the groups attacking it. He challenged every industry member to make two visits to a community group or school to dispel misconceptions. “We need to educate all of the groups that challenge our practices,” he said.
Smithfield learned about engaging its critics about a decade ago after it was forced to pay a $12.5 million fine because of a Clean Water Act lawsuit, Pope said. Smithfield subsequently hired the suit’s plaintiff, Dennis Treacy, to head up the company’s environmental programs.
Suzy Freidman of the Environmental Defense Fund, who also spoke at the summit, echoed the sentiment of collaborating with groups that raise concerns. Collaboration can lead to solutions that are both economical and yield environmental improvements, she added.
But the U.S. Environmental Protection Agency seems to be moving away from the collaborative model, said summit speaker Christian Richter of The Policy Group Inc. He said the EPA is shifting personnel from cooperative voluntary programs to enforcement programs in a move he called “hyper command and control mode.”
The 2010 International Poultry Expo/International Feed Expo was sponsored by U.S. Poultry & Egg Association and the American Feed Industry Association.

Bangladesh parliament moves to ban harmful ingredients in feed

Bangladesh's parliament passed new feed regulations on January 19, according to The Financial Express, a national newspaper. The bill, which has not yet been signed into law, empowers the government to set standards for animal and fish feed, including restrictions on the use of antibiotics, growth hormones, pesticides and steroids that may have negative effects on human health.
It also requires government licensing for all parties involved in producing, importing, marketing or selling feed, the newspaper reported.
The bill comes a year after the antibiotic nitrofuran was discovered in a shrimp shipment to the European Union. In June 2009, Bangladesh suspended shellfish shipments to Europe so the nation's government could deal with sources of contamination, according to the Bangladeshi newspaper The New Nation.

Walmart to reduce supply chain costs

Walmart has announced that it will reduce costs by decreasing the proportion of items purchased from third-party procurement companies or suppliers and dealing directly with manufacturers.
Walmart’s annual sales are estimated at $400B, including $100B from private label products. Eduardo Castro-Wright, the head of Walmart USA, anticipates savings of $4B to $10B if the company meets its objective of purchasing 80% of its requirements directly.

WATT Dashboard offers industry data

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The WATT Agribusiness Dashboard can assist in making better business decisions about strategies and revenue generation by gaining an instant understanding of global poultry, egg, swine and animal feed data faster and more conveniently than previously possible. This powerful business tool is used to review price, production and consumption data and how changes to that data can have an impact on you or your organization. It also provides instant access to industry news gathered from over 400 sources on the Internet.
Take advantage of our free trial at www.wattdashboard.com.

Philippines launches poultry project

A 65-million-peso poultry farming project has launched in the southern Phillipines island of Mindanao, according to The Philippine Star.
An experimental aspect of the project, run by Maharlika Agro-Marine Venture Corp., is its method of accepting investments. Filipinos who work outside the country invest directly in the project and monitor their investments via the Internet.
In an opening ceremony for the project, President Gloria Macapagal Arroyo noted that Filipinos working overseas sent US$17B home to the Phillipines in 2009

Crop producers see bright future for their businesses

Agribusiness leaders are looking on the bright side of the recession. While little more than a third think the U.S. economy will rebound in 2010, a majority are optimistic or very optimistic about their own businesses, according to a recent poll of U.S. agricultural company executives by Agri Marketing magazine and AdFarm public relations agency. Only 9% had a pessimistic or very pessimistic outlook, Lynn Henderson, publisher of Agri Marketing, told the San Angelo Standard-Times.
Crop producers had a more positive outlook for their companies than did livestock executives, with the sectors’ share of optimists at 65% and 40%, respectively. A majority of respondents predicted a drop in swine production.
The average 2010 corn price predicted by respondents was $3.30 a bushel, but a significant share—almost a quarter—thought prices would hit more than $4 a bushel.