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Brakke Consulting’s
Animal Health News & Notes for June 9, 2006
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
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IN THE NEWS:
earnings news
Smithfield Foods
other news
Avid
Castor & Pollux Pet Works
COLT Technologies
Crystal Import
Datamars
Fort Dodge
Guildhay
Merial
MJ Biologics
PETCO
Phibro
Provimi
TekVet
Verdancia Farms
Vita Distribution
Walt Disney
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COMPANY EARNINGS RELEASES
> Smithfield Foods saw its fourth-quarter profits drop from $84.4 million a year ago to $1.1 million this year. The company blamed a protein glut for pushing down pork prices and prices of live hogs. Without the effect of the discontinuation of its Gorges/Quik-to-Fix Foods operations, the net profit would have been $4.7 million. Sales also fell by 8%, to $2.68 billion from $2.9 billion a year ago. Those results contributed to a sharp 42% decline in profits for the year, ended April 30, to $172.7 million from $296.2 million in 2005. (Meating Place)
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BRAKKE CONSULTING, INC.
The Success of Veterinarians Is Essential
The Practice Management Group of Brakke Consulting, Inc. have become some of the most frequent speakers at veterinary association meetings throughout the U.S. and abroad. They consistently fill the rooms when they present veterinary management seminars.
PMG can help your company increase its value to existing and potential veterinary customers through sponsored seminars that are educational, relevant, enjoyable and very beneficial to veterinarians and their staffs. Contact the Practice Management Group at vpmg@brakkeconsulting.com to learn how our practice management consultants can help maximize your company’s exposure to the veterinary profession.
www.brakkevpmg.com
www.BrakkeConsulting.com
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COMPANY NEWS RELEASES
> Fort Dodge Animal Health commented on the preliminary injunction against running a certain advertisement and fact sheet for its West Nile Innovator vaccine. When Fort Dodge learned of the concern involving the advertisement last year, the company immediately ceased using it. Unfortunately, two publications inadvertently ran the advertisement in question in the spring of 2006. The fact sheet in question was used as a “screen shot” from the West Nile-Innovator Web site in another publication’s article without Fort Dodge’s knowledge. The fact sheet unintentionally remained on the Web site, but has since been removed. According to Fort Dodge, the dispute with Merial is about comparison of data, not validity. The efficacy data for West Nile-Innovator (used in the advertising in question and taken from the clinical trials used to license this product) is accurate. (company press release)
> Phibro Animal Health announced the return of Bloat Guard (poloxalene) to the market. Used to prevent bloat in cattle grazing legume (alfalfa, clover) or legume mix pastures, Bloat Guard is a 53% premix that can be easily top dressed or blended by any qualified mixing facility and is 100% effective when administered at the proper dosage. (AnimalNet)
> Avid Identification Systems, Inc. announced that a jury found two competitors liable for infringing Avid’s technology and making false advertising claims that harmed consumers. The jury awarded Avid more than $6 million in the lawsuit against European-based Datamars SA and its wholly owned US subsidiary, Crystal Import Corporation. Two other defendants in the lawsuit, Philips Semiconductors Inc. and Philips Semiconductors Manufacturing Inc., settled with Avid during the second day of trial after agreeing to purchase a license to Avid’s patents-in-suit. Philips’ license does not extend to the pet market. (Business Wire)
> Provimi announced it is acquiring Vita Distribution, a premix producer based near Granby, Quebec. Vita Distribution, which has annual sales of around EUR 25 million (US$31 million), specializes in providing nutritional solutions and premix to on-farm mixers and regional feed producers in Quebec and Ontario. It has two production lines, with a total annual capacity of 25,000 tonnes. (Animal Pharm)
> PETCO Animal Supplies, Inc. announced the introduction of Ultramix Canine and Feline Formulas by Castor & Pollux Pet Works, a new line of all-natural formulas. Ultramix includes six new formulas for dogs and cats, as well as two flavors of wholesome dog cookies, all retailed exclusively through PETCO’s stores nationwide. (company website)
> COLT Technologies announced it has changed its name to TekVet LLC, and moved its headquarters from Puerto Rico to Utah. The company’s leading product is the TekVet System, a radio frequency system that monitors the core temperature of cattle. (Feedstuffs)
> MJ Biologics launched Selectigen MJPRRS Technology (patent pending), a new process to produce PRRS viral-antigen concentrate subunit vaccine. A professor at the University of Minnesota College of Veterinary Medicine invented the technology. (Pork Alert)
> Verdancia Farms, a US trademark of Canada’s Prairie Orchard Farms, has received permission from USDA to market its naturally enriched Omega-3 pork in the US. The product, which is the result of custom feeding with flaxseed, vitamins and minerals, has high levels of Omega-3 fatty acids, believed to reduce the risk of heart disease by preventing arterial blood clotting. The company received labeling approval in Canada a year ago. (Meating Place)
> Walt Disney Co. plans to expand its range of pet products globally, producing collars, clothing and bedding for pets by licensing its valuable portfolio of characters. Current lines include a Pirates of the Caribbean aquarium and an Old Yeller private label dog food. (Reuters)
> UK Guildhay launched Canine CardioSCREEN ProBNP, a new test to detect heart disease in dogs. Guildhay’s test works by detecting Nt-proBNP, one of a number of related hormones called natiruretic peptides. The release of these hormones is increased in diseases characterized by expanded fluid volume, such as heart failure. The test has an accuracy rate of 95% according to Guildhay, and can be used even when the dog does not have any clinical symptoms. As it requires only a blood sample, it is also more economical and less stressful for the animal than x-rays or echocardiograms. (Animal Pharm)
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CONSULTANT PROFILE
KAREN E. FELSTED, CPA, MS, DVM, CVPM
SENIOR CONSULTANT
Dr. Felsted heads up the Veterinary Practice Management Group of Brakke Consulting. The Brakke VPMG provides practical, high-quality, innovative practice management advice to veterinarians and those who work with them in order to help practices accomplish their goals in the areas of medical and surgi¬cal care, client service, financial success, and practice operations. The Veterinary Practice Management Group works with veterinarians in all areas of the profession including small animal, specialty medicine, equine, and food animal.
Karen has been with Brakke Consulting since 2001. Prior to attending veterinary school, she spent 12 years in accounting and business management, six of it with the “Big-8” accounting firm of Ernst & Young. After graduating from the Texas A&M University College of Veterinary Medicine, Dr. Felsted practiced small animal and emergency medicine before opening and becoming Manager-in-Charge of the Dallas office of Owen E. McCafferty, CPA, Inc., a leading firm specializing in tax, accounting, and practice management services for veterinarians.
Karen has an MS degree in Management and Administrative Science, is a Certified Veterinary Practice Manager, a member of Veterinary Economics’ Editorial Advisory Board, a past member of the Board of Directors of the Association of Veterinary Practice Management Consultants and Advisors, and a well known speaker and author on veterinary issues.
What does Karen see for the future of veterinary practices?
Veterinary practices struggle with the same issues facing corporate America today. The difference is they almost never have the expertise and resources that larger organizations do to deal with these problems. Finding and keeping good quality staff is a major issue for veterinary practices. Practices generally can’t count on hiring well- trained staff and, for many clinics, the most difficult part of this issue is finding the time and other resources to put together a good quality, ongoing training program.
To no one’s surprise, rising costs, particularly in the health care arena, are another major concern for practices.
And finally, profitability and return to shareholders is an ongoing issue. Of course, it’s a much more personal issue in small business because the shareholders are almost always the owner-operators of the businesses.
Over the last few years, veterinarians have done an excellent job of improving their pricing to reflect the training, expertise and quality of medical care they provide to their clients.
The next challenge is to focus on providing increased value to clients. Practices that continue to raise fees without improving care and service will not be able to sustain growth and profitability in the future. Increasing value, however, is much more difficult for practice owners and will involve investment in areas they don’t have an innate interest in or affinity for.
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ANIMAL HEALTH NEWS
> US – NEW DIAGNOSTIC TESTS Scientists at California’s Lawrence Livermore National Laboratory have developed a rapid diagnostic test that tests for foot-and-mouth disease and six other look-alike livestock diseases. The new test, still in the validation stage, reduces the diagnoses time for all seven diseases to a few hours. (Pork Alert)
> US – USDA PROPOSES CHANGE TO VETERINARY ACCREDITATION The USDA’s Animal and Plant Health Inspection Service is proposing to amend the regulations regarding the National Veterinary Accreditation Program to establish two accreditation categories in place of the current category, add requirements for supplemental training and renewal of accreditation and offer accreditation specializations. The National Veterinary Accreditation Program (NVAP) is a voluntary program certifies private veterinary practitioners to work cooperatively with Federal veterinarians and State animal health officials. Under the proposed rule, Category I would authorize veterinarians to perform accredited duties on companion animals only. Under Category II, veterinarians would be authorized to perform accredited duties on all species to include poultry, equines and livestock. The new two-tiered system would replace the current structure under which an accredited veterinarian is authorized to perform accredited duties on all species. (USDA – APHIS)
> US – NEW DAIRY INITIATIVE Academicians who focus on reproduction and allied industries that support the dairy industry have joined forces to create the Dairy Cattle Reproductive Council (DCRC) to raise the level of knowledge on issues critical to enhanced reproductive performance. The DCRC will establish a stakeholder network and education platform to raise awareness of management techniques that can enhance reproduction on dairy operations. This effort will target dairy producers and the consultants that influence reproductive management. The Dairy Cattle Reproductive Council will be sponsoring a national meeting on dairy cattle reproductive management in Denver, Colo., November 6 through 8. (association press release)
> US – LIVESTOCK VETERINARY SHORTAGE PROJECTED A study commissioned by a coalition of veterinary groups predicts ongoing shortages of food-animal veterinarians. Results of the research, recently published in the Journal of the American Veterinary Medical Association, suggest the number of veterinarians entering agricultural practice will fall 4 to 5% short of those needed each of the next 10 years. Participants in the study also developed a list of strategies for industry and educators to bring more veterinary students into food-animal practice. (Drovers Alert)
> US – AVIAN INFLUENZA PREPAREDNESS An Avian Influenza preparedness working session for the Kansas City regional animal health & nutrition industry will be held on Thursday, June 22 at the Stowers Institute for Medical Research in Kansas City. For more information call 816-512-2304. (press release)
> US – CANINE HEART MONITOR vc Students in Auburn University’s Industrial Design department have developed a canine heart monitor. It’s a custom harness that has an EKG monitor attached. Veterinarians say it takes readings at home and is brought into the lab to see if your dog has heart problems. (WTVM.com)
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BRAKKE CONSULTING VIEWPOINT
Veterinarians have long had the training and the legal right to practice on all species except humans, subject of course to their consciences and the legal and public expectations that they would not take on cases that didn’t have the expertise for.
The announcement by the USDA APHIS that it is seeking to replace the single accreditation category under its National Veterinary Accreditation Program with two categories established along species lines is a very interesting one. The rules of this accreditation program only impact veterinarians who do certain limited duties for the USDA, but the proposed changes to these regulations could actually prohibit veterinarians from doing these particular USDA tasks on certain species unless they were accredited within the appropriate category. This brings up some very interesting questions with long-term implications for veterinary medicine.
Is it time to consider veterinary licensure by some kind of species category? There are clearly some obvious benefits to this. As in many areas, the quantity of veterinary medical knowledge is expanding rapidly—some say it is doubling every three years. Does it benefit a veterinary student to spend at least half their education on species they will never treat? There is a huge expense (in both time and money) associated with this for the colleges of veterinary medicine and the students. Wouldn’t we turn out better trained veterinarians if we allowed them to focus on the species they planned to specialize in and then restricted their licensure to just those species? The transition period would, of course, have its difficulties and there would have to be provisions for those veterinarians who still wished to practice on multiple species—perhaps a four year program for students specializing in either companion animal, equine, or food animal medicine and a five year program for those specializing in more than one of those. None of these challenges are insurmountable, however, particularly if the benefits outweigh the initial costs.
I knew from the day I entered veterinary school that I would never practice on anything but dogs and cats. And after a day in clinics trying to treat a cow with Johnes disease that spent his whole day trying to kill me I thought the idea of species licensure was a great one. I still do. I didn’t think we’d see this change in my lifetime, but perhaps we will.
Karen Felsted
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