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TheMeatSite Newsletter - 12th June 2013

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TheMeatSite
Wednesday 12th June 2013.
Chris Harris - TheMeatSite Editor in Chief

Chris Harris
Editor in Chief


Zoetis

All Change for Leading Global Processors

As the repercussions of the takeover of Smithfield Foods by the Chinese giant Shuanghui still resound across the US and across the China Sea, further consolidation of the meat processing industry was seen this week with the acquisition of Marfrig’s Brazilian interests in the pig and poultry processor Seara by JBS.

The buyout for a reported $3 billion will increase JBS’s dominance of the global meat processing sector.

Already the leading beef processor with interests not only in Brazil, but also in the US, Canada and Australia, the deal increases the company’s presence in the pig and perhaps more significantly in the poultry sector.

In recent years, JBS has stepped in to rescue or buy out at competitive prices major poultry processing concerns such as Pilgrims' Pride in the US and the Frangosul interest of the French poultry processor Doux.

For Marfrig, the sale, which also included the OSI Alimentos leather business in Uruguay, will help the company to reduce the burden of its growing debts – said to have reached $6.1 billion.

However, while JBS was making its move for Seara, the Smithfield-Shuanghui deal was coming under close scrutiny from several quarters.

The Securities Exchange Commission in the US took emergency court action to freeze the assets of a Bangkok trader, who was reported to have made more than $3 million on the deal.

The SEC believes that the trader used insider information to bump up the deal and make rapid profits.

The SEC alleges that Badin Rungruangnavarat purchased thousands of out-of-the-money Smithfield call options and single-stock futures contracts from 21 May to 28 May in an account at Interactive Brokers LLC.

Rungruangnavarat allegedly made these purchases based on material, non-public information about the potential acquisition, and among his possible sources is a Facebook friend who is an associate director at an investment bank to a different company that was exploring an acquisition of Smithfield.

After profiting from his timely and aggressive trading, Rungruangnavarat sought to withdraw more than $3 million from his account on 3 June.

While the SEC was taking this action, doubts were starting to creep in over whether the Shuanghui-Smithfield deal could go ahead.

Concerns have been raised that the deal could conflict with regulations over foreign ownership of farm land in the US.

And now some members of Congress are also raising questions over the takeover.

Congressman J Randy Forbes, who represents Virginia where Smithfield has its headquarters said: “As what would be the largest takeover of a U.S. company by a Chinese buyer, the potential purchase of Smithfield Foods by Chinese meat processor Shuanghui International Holdings warrants robust analysis and review to ensure the safety and security of America’s citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely.”

Meanwhile, in Europe, the shake-up at the giant European meat processor VION Foods continues with a whole-scale change of management at its German operations including the departure of Norbert Barfuβ.

 


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This Week's Articles and Analysis

Africa Offers Opportunities for Livestock and Meat Investment
Increases in the demand for animal-sourced food are estimated extraordinarily high in Africa over the coming decades, according to a new report from the Food and Agriculture Organisation of the United Nations, writes Chris Harris.

Risks and Benefits of Sodium Nitrite in Processed Meats
Curing with nitrite has been used, essentially, for thousands of years to produce safe and nutritious products and to effectively preserve meat, according to research by Jeffrey J. Sindelar and Andrew L. Milkowski from the University of Wisconsin.

Swine Nutrition and Management Systems that Alter Productivity and Carcass Traits
New technology has been implemented by pork producers over recent times to help them lower their cost of production.

Why Fish is So Good for You?
Scientists of Friedrich Schiller University Jena and Jena University Hospital have decoded the antihypertensive impact of omega-3 fatty acids on a systemic level and they have also described the underlying molecular mechanisms for the first time.

Chemical Composition of Goose Muscles from Native Polish Breeds
The Rypinska and Garbonosa genotypes were found in a Polish study to have different moisture and fat content of breast and thigh meat.

Market Reports

USDA International Egg and Poultry: Taiwan
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AHDB Pig Market Weekly - 6 June 2013
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USDA International Meat Review - 6 June 2013
China Wholesale Prices - 6 June 2013
Portland Fish Exchange Prices - 5 June 2013
Sri Lanka Fish Prices - 6 June 2013
National Dairy Products Sales Report Highlights - 5 June 2013
USDA GAIN: Russian Federation Dairy and Products Semi-annual 2013

Global Meat Industry News

   United States

Higher Food Safety Risk in Market Chickens
Smithfield Sale, PED Virus Jangles Producers' Nerves at Expo
NFU Congratulates Senate on Passage of Farm Bill
IPPE Introduces New Website
Cattle Outlook: Beef Exports Down in April
NFU Submits Comments on Japan's Inclusion in TPP
CME: Uncertainties See Futures Close Lower, Monday
Smithfield Investor Charged with Insider Trading
Poultry Plant Reopened Last Year Closes
Campaign Groups Petition President Obama over Misuse of Antibiotics
CME: Beef Cutout Trending Lower
New Labelling Rules for Mechanically Tenderised Beef Products
Hog Outlook: Canada Releases List of US Commodities for Potential Retaliation
WPX: US Pork Industry May be Approaching Processing Capacity
NFU Calls on Senate to Advance Farm Bill
WPX: PQA Plus Revisions Debut at World Pork Expo
CME: Decline in April Red Meat Exports
NFU Supports USDA Initiatives Helping Farmers to Adapt to Climate Change
Amended M-COOL Rules Could Harm US Producers, Processors Packers Retailers
CME: Demand for Bacon Saves Hog Prices this Spring
Farmed Salmon Raises Blood Levels of Omega-3s
WPX: US Pork Export Issues, World Markets Discussed
Trade Barriers, Soft Demand Keep April Beef, Pork Exports Sluggish
Pork Checkoff Marketing Impacts Retail Sales
Wholesale Beef Prices Set New Records

   Canada

Sustainability Change to Impact Pig, Egg Producers
CPC Welcomes Release of Potential COOL Retaliation Targets
Prospects of Retaliatory Tariffs Hoped to Encourage Resolution of M-COOL Issue
Canada Lists US Products for Retailiation of COOL Dispute
Canada: Hog Markets
Temporary Layoffs at Marine Harvest Port Hardy Processing Plant
Poor Safety Controls Led to E.coli Outbreak

   Ireland

Concerns Irish Beef Sector will be Sacrificed in EU Trade Talks with Canada
Convenience Still Important to Consumers

   Australia

New Livestock Transport Rules Promoted
Farmers Making it Possible to Stand Up for Real Animal Welfare

   Germany

Management Changes at VION Food Germany
German Agricultural Exports Rise

   United Kingdom

Study to Sequence Campylobacter Genome
British Red Meat Export get Royal Backing
LMC: Quotes Steady As Top Live Heifers Fetch 230p/kg
LMC: Cattle Slaughterings Up on Year on Year As Production Drops
Waste Food Campaign Poses Disease Threat
NFUS: Scottish Shoppers Duped by Misleading Labelling
Better Weather, Better Prices
Poultry Cooking Advice Issued Ahead of Bumper BBQ Weekend
Call for Closer Cooperation in Crisis Handling
Smarter Rules for Safer Food

   France

French Farmers Protest for Higher Prices

   European Union

Commission Acts to Block Further Food Fraud
EU Pig Prices: Quotations Increasing in the European Market

   South Africa

Chicken Jobs at Risk
Chicken Import Duty Court Battle on the Horizon
Importers Step Up Fight Over Poultry Tariffs Bid

   Gambia

Gambia Expels Grocer, Bans Chicken Legs

   Thailand

Thai Swine Raisers Against Possible US Pork Import

   Global

Smithfield-Shuanghui Deal Hits Snags
US Joins Call to End Food Waste
US Support for Canadian Opposition to M-COOL Strong
OECD-FAO Expect Slower Global Ag Production Growth
Who Benefits from Smithfield-Shuanghui Deal?

   China

China to Hold Nationwide Safety Overhaul

   Russian Federation

Russian Iturup Pink, Chum Salmon Fishery Starts MSC Re-assessment

   Brazil

JBS to Buy Seara from Marfrig
Demand Increase Underpins Fed Cattle Prices
Revenue from Chicken Meat Exports Up in May

   New Zealand

Lemon Sole - The Fashionable Food to Serve this June

   Mexico

COMECARNE to Hold Educational Sessions for Meat, Poultry Trade

   Spain

Ría de Arosa Galician Cooperative Clams, Cockles now MSC Certified

Events/Promotions

Global Poultry Trends 2011

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