The Experts in Animal Health

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 Brakke Consulting’s
 Animal Health News & Notes for July 2, 2004

 Copyright © Brakke Consulting, Inc.
earnings news:
ConAgra Foods
other news:
Trouw Nutrition
Murray’s Chickens
Dakota Beef Co. LLC
Patterson Dental Company
Mitec Inc.
Carfrae Meat Co.
>   ConAgra Foods reported earnings for the fourth quarter ended May 30, 2004.  Net income for the quarter rose 41% to $212 million, compared with earnings a year ago of $150 million.  For all of fiscal year 2004, net income rose to $880 million.  In fiscal 2003 the company earned $775 million. For the quarter sales were up 9%.  On a comparable basis, sales were 5% ahead of last year and operating profit increased 2% over last year.  Operating profit improved 223% to $60 million this year compared with $19 million last year. (Business Wire)
Brakke Consulting is pleased to announce that David B. Goodnight, DVM, MBA has rejoined the company as Senior Consultant in the corporate consulting group.
Goodnight first joined Brakke Consulting in 1997 after 19 years in veterinary practice.  In addition to corporate consulting, he established the Brakke Practice Management Group, which provides a wide range of business management services to veterinary clinics.  He also designed the 1998 Brakke Management and Behavior Study, a landmark survey on the financial and business practices of companion animal veterinarians.  The study was sponsored by Bayer Animal Health. 
In 1999, Goodnight joined Veterinary Pet Insurance (VPI), where he became Executive Vice President of Business Development.  At VPI, Goodnight’s management responsibilities included strategic business relationships, marketing, sales, e-business, group employee benefit sales, and the customer service call center.
Dr. Goodnight can be reached at the Dallas office at (972) 243 4003 or
>  Trouw Nutrition announced the launch of Survivor Tubes, a multispecies oral gel nutrition supplement intended for use during the first week of life.  The supplement is designed to boost the developing immune system of calves, pigs and lambs.  Survivor Tubes utilize Trouw’s exclusive Greenline technology, a synergistic blend of natural ingredients.  (company press release) 
>  Murray’s Chickens announced it will add the “Certified Humane Raised and Handled” label to its packages in July.  Murray’s was recently certified by Humane Farm Animal Care (HFAC) to use the “Certified Humane” label. Murray’s is the first American poultry company to become certified to use the label, which guarantees to consumers its chickens are raised under humane conditions. Murray’s Chickens are never fed antibiotics, growth stimulants, pesticides or hormones. (PRNewswire)
>  Dakota Beef Co. LLC, an organic beef processing plant in Howard, S.D., is expected to start limited production before August and full production within four months.   They plan to process 80 head of cattle a day at the new facility. The company had previously outsourced its meat processing. The new plant will also feature a traceability system that tells customers where an animal was raised, what it was fed, when it was processed and its breed history. (Meating Place)
>  Patterson Dental Company changed their name to Patterson Companies, Inc. effective July 1st.  Patterson will retain its existing Nasdaq stock symbol. The new corporate name was adopted to reflect Patterson’s expanding base of business, which now encompasses the veterinary and rehabilitation supply markets, as well as its traditional base of operations in the dental supply market.  Patterson’s operating units will continue to be Patterson Dental Supply, Inc., Webster Veterinary Supply, Inc. and AbilityOne Products Corp.  (Business Wire) 
>  Mitec Inc. announced a new ground beef brand that will be safe for consumption for up to six weeks.  Mitec and Carfrae Meat Co. have made plans to market the ground beef under the name “Corner Store” by the fourth quarter of this year.  The beef’s shelf life will increase from its usual 10-day period because of a special packaging process that will combine oxygen and carbon dioxide to kill pathogens and bacteria.  Shelf life for the new product is dependent on the temperature it is stored, although it requires no special handling.  (AP)
>  US – BSE TEST NEGATIVE  One inconclusive test result was determined to be negative, while the other remains inconclusive.  Tissue samples from animals discovered last Friday and Tuesday were being examined at the USDA’s National Veterinary Services Laboratories. Under an expanded BSE surveillance program the government has tested more than 7,000 animals. USDA officials say that both carcasses have been accounted for and are not in the food supply. (Drovers Alert)
>  CANADA – IMPORTATION OF US HORSES BANNED  The Canadian Food Inspection Agency has banned horses from Texas and New Mexico from entering the country to prevent an outbreak of vesicular stomatitis.  The disease closely resembles foot and mouth disease and is transmissible to humans.  (AnimalNet – Calgary Herald) 
>  US –  HOGS AND PIGS   The Hogs and Pigs Report confirmed numbers that were very near trade estimates. The breeding herd inventory, at 5.91 million head, was down 2 percent from June 2003 levels. The market hog inventory and total hog inventories were both 1 percent higher than a year ago.  Farrowing intentions for June/August were 1 percent below last year’s actual farrowings for that period. Farrowing intentions for September/November are down slightly from the same period in 2003.  (Pork Alert)
The Codex Alimentarious Commission is set to approve a Code of Practice on Good Animal Feeding that would establish a feed safety system for food producing animals.  These recommendations have been made by the Food and Agriculture Organization and the World Health Organization.  Codex is also expected to formally approve work to revise the 23 year old Recommended International Code of Practice for Foods for Infants and Children.  (FAO press release)
>  US – MEAT PRODUCTION DECLINE   Commercial red meat production for the United States totaled 3.60 billion pounds in May, down nine percent from the 3.94 billion pounds in May 2003, according to USDA’s National Agricultural Statistics Service. Beef production, at 2.07 billion pounds, was 12 percent below the previous year. Cattle slaughter totaled 2.84 million head, down 13 percent from May 2003.  Veal production totaled 13.8 million pounds, 13 percent below May 2003.  Calf slaughter totaled 64,900 head,  down 15 percent from May 2003.  Pork production totaled 1.50 billion pounds, down three percent from the previous year. Hog kill totaled 7.58 million head, three percent below May 2003.  Lamb and mutton production, at 13.0 million pounds, was down 14 percent from May 2003. Sheep slaughter totaled 188,500 head, 15 percent below last year. (Wattnet Meatnews)
>  FINLAND – SCRAPIE CONFIRMED IN SHEEP   Tuesday officials stated that Finland has detected scrapie in a sheep.  This is the first time the brain wasting illness has been found in the country’s sheep.  The final diagnosis was completed last week. (AnimalNet-Agence France)
>  US – BIRD FLU TRANSFER TO MAMMALS  China based researchers studying the H5N1 strain of the avian flue reported at the Proceedings of the National Academy of Sciences that it has been changing over the years to become more dangerous to mammals, based on tests in mice.  The new study confirms that the virus is evolving fairly rapidly. (AP)
>  VIETNAM – BIRD FLU KILLS 4,500 CHICKENS  At least 4,500 chickens in Vietnam have died after the outbreak of H5N1 virus that killed 16 people was declared over. Birds on three farms in the Mekong Delta province died or were destroyed after testing positive for the disease. (Reuters)
>   FRANCE – SIX COUNTRIES AGREE TO WORK TOGETHER   An international agreement between Ireland, Canada, the US, New Zealand, Australia and the UK was signed by the countries’ chief veterinary officers at the annual conference of the Office International des Èpizooties, the world organization for animal health in Paris. The agreement is designed to enable the six countries to share their expertise in the fight against disease outbreaks, and also call upon each other’s veterinarians, laboratory diagnosticians and animal health technicians. (Wattnet Meatnews)
>  UK – OVERSIGHT OF BSE TESTING  The British Food Standards Agency has appointed an independent steering group to oversee an inquiry into recent failures to test some cattle for bovine spongiform encephalopathy. Earlier in June, the FSA announced an investigation into an apparent failure by the Meat Hygiene Service to test some casualty cattle aged between 24 and 30 months for BSE before they entered the food chain. (Wattnet Meatnews)
What are your companies’ thoughts on the animal health, nutrition, and pet markets for 2005?  We realize that plans and strategies are based on various inputs and views.  We’d like to share some questions that come to our mind.  What will the market look like in 2005?  Will product sales be impacted by higher interest rates?  What new product introductions will dominate the market place?  How will leading companies change their distribution strategies in 2005? Answers to these and many other questions are covered in our 2004-2005 Brakke Animal Health Industry Overview.  We encourage senior management to take advantage of our insights and knowledge related to your 2005 business strategy.  Contact any of our offices for more information. 
Have a safe and enjoyable 4th of July weekend.
Ron Brakke
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