Animal Health News & Notes for January 17, 2003

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Brakke Consulting’s
Animal Health News & Notes for January 17, 2003
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES

>  ConAgra reported that sales for the second quarter of the 2003 financial year fell by 19% to $6.0 billion.  Meat Processing sales were $1.1 billion, a fall of 58% compared to the same period in the 2002 financial year.  Meat Processing sales were substantially lower compared to the previous year because of the sale of the fresh beef and pork business. Sales for the first half of the 2003 financial year were down by 13% at $13.0 billion. Meat Processing sales were $3.6 billion, a decrease of $1.7 billion, or 32%. (Wattnet Meatnews)

>  Alcide Corporation reported strong growth in food safety sales as its animal health and surface disinfectants channel shows improvement in its fiscal 2003 second quarter, ended Nov. 30, 2002.  For the quarter, Alcide earned $435,000 on revenues of $5.8 million. In the second quarter a year ago, Alcide earned $439,000 on revenues of $5.7 million. In the first six months of the fiscal year, Alcide generated net income of $497,000 on revenues of $10.8 million compared to $760,000 on revenues of $11.1 million in the like period a year earlier. (Business Wire)

>  Cargill Inc. reported $319 million in earnings from its second quarter, up 25% from the $256 million reported a year ago. Earnings from continuing operations for the first six months of fiscal year 2003 were $664 million, also an increase of 25% over earnings posted one year ago. The company’s global grain, oilseeds, sugar and cotton network performed well, as did its animal nutrition and beef processing businesses. (Meating Place)

>  Farmland Industries reported that operating earnings before reorganization expenses for the first quarter of fiscal 2003 ended Nov. 30 increased from $3.2 million in fiscal 2002 to $16.5 million. Sales decreased slightly to $1.7 billion from $1.8 billion in the year-ago period. Since its reorganization filing under Chapter 11, Farmland has reduced its borrowings by $70 million. (Meating Place)

>  Pilgrim’s Pride Corp. saw fiscal first-quarter net income plunge 79% and sales dip 4.4% following the largest meat recall in U.S. history.  Rising feed costs and lower prices for dark-meat chicken also hurt the company’s bottom line.  Pilgrim’s Pride reported net income of $2.8 million for the quarter ended Dec. 28 compared with net income of $13 million a year earlier.  Sales fell to $627.4 million from $656 million a year earlier. (AP)

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Schedule Your Place at the Las Vegas Overview Now

The Industry Overview will be presented at the Western Veterinary Conference in Las Vegas on Wednesday, February 19, 2003 at 9:30 am. 

The following are some of the items that will be covered in the presentation:
 – What events have most affected the animal health industry in the last five years?
 – What changes will affect the industry in the next five years?
 – What have other companies done to increase their success?
 – Which markets are increasing and which are decreasing?
 – Where are new opportunities being developed?
 – What will the industry look like in 2012?
 – Who will the leading companies be 2012?

To register for the presentation, please call Jane Morgan at 972-243-4033 or email jmorgan@brakkeconsulting.com, or register online at www.brakkeconsulting.com.

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COMPANY NEWS RELEASES

>  Mars Inc. increased its interest in the international market for horse feeds, acquiring all of Spillers Specialty Feeds Ltd, an equine nutrition company based in the United Kingdom. Mars already markets equine products in the UK, Germany and Australia under the Winergy brand. Spillers Specialty Feeds was a part of multinational group Dalgety since 1979, but in 1998 became independent due to a management buy-out. (Watt Feed E-news)

>  The Hartz Mountain Corporation announced that it has begun shipping new packaging for Advanced Care Flea and Tick Drops Plus for Cats and Advanced Care Once-a-Month Flea and Tick Drops for Cats. The updated packaging includes revised labeling and a new application process.  There is no change in the actual product formulation.  An extensive consumer education campaign will accompany the rollout of new Advanced Care packaging and labeling.  The new application process incorporates a “spot-on” technique where the product is applied at the base of the cat’s head. Current label directions recommend applying Advanced Care in a stripe down the cat’s back. (PRNewswire)

>  PETCO Animal Supplies, Inc. announced that it has filed a registration statement with the Securities and Exchange Commission relating to a proposed public offering of 12,500,000 shares of its common stock. PETCO intends to use the net proceeds of the offering to redeem or repurchase $40 million in principal amount of its 10.75% senior subordinated notes. PETCO will not receive any proceeds from the sale of the shares by the selling stockholders. (Business Wire)

>  Oil-Dri Corporation of America announced that it intends to repurchase shares of its common stock under previous authorizations approved by its Board of Directors. Under these authorizations, there are 446,610 remaining shares. The company last repurchased shares under these authorizations in December 1999.  (Business Wire)
>  Central Garden & Pet Company announced that it is proposing to offer in a private placement $150,000,000 aggregate principal amount of Senior Subordinated Notes.  The net proceeds of the offering will be used to redeem its outstanding convertible notes, including the payment of premium and accrued interest, reduce a portion of the outstanding indebtedness under its senior credit facilities, and pay related fees and expenses. (Business Wire)

>   Land O’Lakes, Inc. termed the World Trade Organization’s (WTO) ruling that Canada’s current dairy export system is in violation of international trade rule limits a victory for U.S. dairy producers. The WTO decision came after five years of dispute and will require Canada to end its current practice of subsidizing dairy products exported to the U.S.   Land O’Lakes, a national farmer-owned food and agricultural cooperative, has been working alongside other national milk organizations and the Administration on behalf of U.S. dairy producers, providing technical support throughout this long-running dispute. (PRNewswire)

>  Poultry & Egg News Inc. is combining Poultry Times magazine with its sister publication, Poultry & Egg Marketing.  The move is intended to form a strengthened version of Poultry Times covering all aspects of the poultry industry.  The combined publication will retain the name Poultry Times, and will be launched beginning in February.  (Poultry Times)

>  PetCARE Television Network, Inc., a new place-based television network for veterinary reception areas, announced that production of its first 21 pet educational topics has been completed.   This premiere programming is scheduled for distribution in February 2003.  In the next two months, PetCARE TV will finalize distribution and shipping operations to deliver one DVD player and one Color TV unit to each of over 3,300 subscribing veterinary hospitals throughout the United States.   The programming is provided to our subscribers on a quarterly basis on DVD. (company press release)

>  When planning a vacation, no need to leave four-legged family members home because of travel and lodging restrictions.  Puppy Travel, the nation’s first full-service travel design and planning company will create a trip plan for both Fido and the family.  Puppy Travel will take the travelers’ itinerary and prepare a final trip itinerary, which also includes all travel reservations, including flights, hotels, rental cars and other reservation requirements.  An increasing number of hotels and lodging properties are joining the pet-friendly movement, with AAA reporting more than 20,000 pet-friendly accommodations, properties and resorts in the U.S. (PRNewswire)

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European Probiotics Association European Meeting confirmed for February 11, 2003 in Lelystad, The Netherlands

“The Role of Probiotics in Animal Nutrition in View of the Demand of European Consumers”

Key subjects to be explored are the European Union regulatory environment, principles of use and effects on ruminants, swine and poultry, the future of probiotics in animal production, trends in consumer perception of animal origin food, and a forum exchange to close the event.
The meeting is being co-sponsored by ID TNO Animal Nutrition and the European Probiotics Association.

Registration fee for this one-day seminar is 75 euros. Please send completed registration forms by mail (Mrs. B. Sedoeboen, ID-Lelystad, P.O. Box 65, 8200 AB Lelystad, The Netherlands), fax (+31 320 237320) or e-mail (b.sedoeboen@id.dlo.nl) before February 1, 2003.

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ANIMAL HEALTH NEWS

>  US   The USDA reported that an outbreak of Exotic Newcastle Disease has spread to a new commercial poultry flock in California. The new outbreak was located in San Bernardino County, making two commercial flocks in San Bernardino county and a total of five in the state infected with the disease. More than 400,000 chickens were ordered destroyed. Canada, Mexico and China have banned poultry and poultry products from California and the outbreak has halted shipments of all U.S. poultry to Colombia. (AnimalNet – Reuters)

>  EU   The European Union Farm Council reached a political agreement on a proposal for a regulation to ban the remaining four in-feed antibiotic growth promoters still legal in the EU. The ban would affect flavophospholipol, monensin sodium, salinomycin sodium and avilamycin. The ban would not take place until January 2006. Meat imports will still be allowed as long as they meet residue limits, which have yet to be fixed. Coccidiostats, even those of antibiotic origin, will still be permitted. However, there is a report on the need to prohibit coccidiostats and histomonostats by 2008. (Watt Feed Enews)

>  US   A federal appeals court ruled that residential breeders of dogs and cats are not subject to federal licensing and inspection.  The U.S. Court of Appeals said people who sell and breed animals out of their homes fall under the definition of “retail pet stores” that are exempt from regulation under federal law. The decision reversed a lower court ruling that found breeders in private homes should be subject to federal cleaning, sanitation and handling requirements under the Animal Welfare Act.  Hundreds of thousands of dog breeders in the United States raise and sell puppies from their homes, but only wholesale – and not retail – breeders who keep more than three dogs per year are required to obtain licenses from the USDA, which enforces federal animal laws.  (AP)

>  US   A new internet-based course will help teach future veterinarians nationwide about the major foreign animal diseases that threaten U.S. livestock and companion animal health. The course is designed to give veterinary students basic awareness of diseases like classical swine fever and highly pathogenic avian influenza so they can recognize the symptoms and respond appropriately. The USDA CSREES funded development of the course, “Emerging and Exotic Diseases of Animals.” Faculty from Iowa State University, the University of California-Davis and the University of Georgia collaborated on the project with veterinarians from the USDA Animal and Plant Health Inspection Service. (university press release)

>  US   The American Kennel Club (AKC) Canine Health Foundation launched its Canine Cancer Initiative, a 2-year, $820,000 program that will combine four cancer research projects and include educational efforts.  The initiative includes further research into comparative genetic maps for dogs and humans, vaccine development, and canine lymphoma and osteosarcoma.  It will also sponsor an annual canine cancer conference and develop a canine cancer handbook for breeders and dog owners.  Support for the initiative includes a grant from Nestle Purina PetCare, among others. (Veterinary Practice News)

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BRAKKE CONSULTING VIEWPOINT

A portion of the news this week relates to various reports from some large food and the OTC pet products companies.  A number of these companies represent significant brands that are recognized by the consumers.  We have felt for sometime that these and similar companies are an integral part of the animal health business. Those firms that either grow or process animal protein under their brands and large retailers brands help shape consumer attitudes towards food safety and meat consumption.  In our opinion, these companies need to become more integrated with the various segments of the animal health and nutrition industry.  All the firms participating in the production of animal protein for consumers need to work together to meet the challenges being presented by groups not interested in a safe, low-cost food supply.

The OTC pet companies also serve many pet owners with quality products in retail outlets where they shop.  While this creates some competition between trade outlets, we believe they are an important source of information and products for a segment of pet owners. The health of many pets are improved and maintained by these companies.

Finally, early reports from the field indicate that 2003 sales are off to a great start. There are a number of signs in the basic economy that would indicate 2003 could be a recovery year.  We hope the trends continue. Like many of you, we’re off to Orlando for the North American Veterinary Convention this weekend. Then mid-week we move to Atlanta for the International Poultry Show. We look forward to seeing many of you at these two great events.

Travel safe!!
 
Ron Brakke

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