Animal Health News & Notes for June 6, 2003

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Brakke Consulting’s
Animal Health News & Notes for June 6, 2003
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES
> Smithfield Foods Inc. posted an 80% drop in fiscal fourth- quarter profit because of lower meat prices and soft hog and pork markets. Smithfield earned $5.1 million compared with $24.9 million in the prior-year period. Results included a $2.2 million pretax charge. Revenue for the quarter fell slightly to $1.95 billion from $1.96 billion a year earlier. Strong profits from beef and processed meats somewhat offset the weak hog and fresh pork sectors. For the full year, earnings totaled $26.3 million, down 87% from $196.9 million in 2002. Revenue for the year rose to $7.90 billion from $7.36 billion a year earlier. (MeatingPlace, AP)
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BRAKKE CONSULTING, INC.
Additional Consultants Join Brakke Consulting, Inc.
We are pleased to welcome two consultants to the Brakke Consulting team.
Kevin Scott brings 30 years of extensive experience in the animal health industry to our firm. Kevin has held senior management positions in business development, marketing, and general management with many companies. His expertise in sales, marketing, merger and acquisition, combined with his business development knowledge will help many of our clients in achieving their goals. We hope you will welcome Kevin to our team. You may contact him directly by email at kscott@brakkeconsulting.com or at his office by telephone at 847.573.9706.
Tracy Dowdy, CVPM has joined the Practice Management Group of Brakke Consulting, Inc. Tracy is an experienced management consultant working with veterinary teams to develop practices that are service and client centered. Her strengths in staff development and training, internal and external communication, and responsible management are services veterinary practices use to achieve higher levels of success. She is charter member of the AVPMCA, frequent speaker at veterinary associations and author of practice management articles. Tracy can be contacted by email at tdowdy@brakkeconsulting.com or the Dallas office, 972.243.4033.

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COMPANY NEWS RELEASES
> Merial announced that the EPA recently approved new label claims for all Frontline brand products. The new labels on FRONTLINE brand products will include the following claims: (1) Frontline Plus approved for dogs and puppies up to 22 pounds; (2) Frontline Top Spot approved for puppies and kittens 8 weeks and older; (3) provides fast, effective treatment and control of chewing lice in dogs, puppies, kittens and cats; (4) aids in the control of sarcoptic mange infestations in dogs; (5) can be used on breeding, pregnant and lactating bitches and queens (Frontline Plus, Frontline Top Spot). (company press release)
> Merial introduced a new test to determine whether horn flies on an operation are resistant to insecticides. The Merial Resistance ID testing kit will lead to improved control strategies for producers by identifying resistant flies. (Feedstuffs)
> AgD Nutrition Inc., formed last year to deliver nutrition products to commercial feed manufacturers and producers, has acquired the Color Guard line of vitamin D products from Alpharma Inc. Financial terms were not released. Alpharma stated that it sold the vitamin line because it was not a core business for the company. (Feedstuffs)
> Felton International introduced a new Pulse 250 variable-dose needle-free injection system as well as a separate handpiece specifically designed to administer injections to baby pigs. The Pulse 250 can deliver pharmaceuticals or antibiotics. (Feedstuffs)
> Pyxis Genomics has developed a DNA-based technology (BeefTrac) that can be integrated into existing live-animal tracking systems to provide the highest degree of accuracy since it uses the animal’s innate bar code, which can be traced from beef products back to the animals farm of origin. The cost of the DNA-based technology will vary depending on the tracking system it complements but it is extremely low on a per animal basis. Pyxis Genomics is currently implementing its DNA-based traceability technology in the pork industry, through a collaboration with Maple Leaf Foods Inc. (company press release)
> MetaFarms, Inc., a provider of software-as-a-service to livestock producers, announced the signing of an i-Production service agreement with Cargill Pork. Cargill Pork will use the i-Production Suite that enables livestock production companies to integrate data from multiple sources. (PRNewswire)
> Strategic Diagnostics Inc., a provider of antibody products and analytical test kits for the food safety and water quality markets, announced the results of a comparison study performed by the Joint Research Centre (JRC) of the European Union, which included the Company’s screening test for the detection of meat and bone meal in animal feed. The study findings demonstrated that the SDI test had 100% sensitivity, specificity and accuracy when analyzing for total processed animal proteins, and was the only immunoassay method to provide this level of performance. FeedChek is the only test available which provides results for both mammalian meat and bone meal and poultry meal. (Business Wire)
> NETHERLANDS    Provimi announced that it has acquired Rocofa B.V., a Dutch specialized pet food producer. Rocofa produces private label wet pet foods for retail chains, such as supermarkets, drugstores and pet shops with distribution throughout Europe. Moreover, Rocofa is specialised in functional pet foods, organic pet foods and a number of other new nutritional developments. The company has an annual turnover of EUR 21 million. (Pets International)
> CANADA    Cargill Inc. set is to lay off about 400 workers at its beef processing plant in Alberta, Canada, because of ongoing bans on importing Canadian beef into the US and other countries. Of the 1,600 employees at the plant, 72 were laid off in late May and an additional 300 to 350 are to be laid off now. Cargill is slowing down slaughter from 4,000 cattle a day to 3,000. Dow Jones Commodities Service reported that the company is likely to assess the damage to its business once the borders reopen and will then decide whether to re-hire any of the workers. (Meating Place)
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BRAKKE CONSULTING ANNOUNCES UPCOMING MULTIUSER STUDY ON VETERINARY DRUG COMPOUNDING
In the past year or two, the exhibit halls at veterinary conferences have seen a proliferation of veterinary compounding pharmacies. In response to frequent questions about this topic, Brakke Consulting will be conducting a study of the phenomenon of veterinary compounding. The study will answer questions such as
– what do veterinary compounders offer?
– what types of companies are offering compounding services?
– how many and how big are they?
– how frequently are veterinarians using compounding services?
– are there differences in veterinary usage between equine and small animal practitioners?
– are veterinary compounders taking business away from traditional pharmaceutical manufacturers?
The study will be completed in July 2003. The pre-publication price, available until June 15, is $2,750, a $500 discount off the actual $3,250 cost. Orders placed by June 15 will also be permitted to submit questions for potential inclusion in the veterinary survey. For more information, please call 972-243-4033 or email info@brakkeconsulting.com.
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ANIMAL HEALTH NEWS
> US    In the first sign of a U.S. link to Canada’s investigation of its BSE case, officials said five bulls from the Canadian herd that had a cow with the disease ended up in Montana. State authorities said that the five bulls had since been slaughtered, but it was not known what happened to the carcasses. None of the animals ever showed signs of the disease, according to the Montana Department of Livestock. The slaughter would have occurred after the FDA had banned the use of animal parts in livestock feed. Given that fact, it is unlikely the meat would have been fed to other cattle. (AP)
> CANADA    BSE tests on cattle in Canada have shown no further signs of BSE in the herds. The Canadian Food Inspection Agency reported that the rapid diagnostics results from the remaining animals in the trace-forward investigation, as well as one Saskachewan farm in the first line of inquiry in the trace-back investigation, have all come back negative for BSE. (Wattnet Meatnews)
> CANADA    Canadian authorities ordered the destruction and testing of 650 more cattle for BSE because DNA testing to date has failed to confirm the origin of the lone cow known to be infected. The animals from five Alberta farms will be killed and have samples of their brains checked in laboratories. The additional testing increases the total number of cattle to be slaughtered for examination to more than 1,700 in the investigation of the lone BSE case confirmed May 20 from a farm in Alberta. (AP)
> KOREA    The Korean agriculture ministry has called for greater traceability details on US beef, following the outbreak of BSE in Canada. The USDA was notified by the South Korean Ministry of Agriculture and Forestry of a request for a change in Export Certificate 9035-3. The current certificate indicates that animals that were imported to the United States from Canada were inspected by United States quarantine officials and that the animals resided within the United States for at least three months. The Korean Ministry of Agriculture and Forestry has asked that the certificate be changed to a statement, which says that all meat products were derived from animals which originated within the United States. (Wattnet Meatnews)
> US    Months after a deadly outbreak of listeria, the USDA says it will require 2,500 companies that make hot dogs and deli meats to come up with plans for preventing the harmful bacteria from tainting their products. Companies also must test areas such as walls, equipment and countertops and share the results with inspectors. Under the regulations, companies will have flexibility in their prevention efforts. They are allowed to add germ-killing ingredients such as sodium lactate to the meat or to use a hot wash. Those that do both can tout it on their product label. Those that do only one procedure will face greater testing by government officials. (AP)
> US    A Meat and Poultry Pathogen Reduction Act was introduced in the US Senate last week, with a companion bill presented in the House. According to the authors, the bill clarifies the USDA secretary’s authority to “prescribe performance standards for pathogens in meat, meat products, poultry and poultry products processed by federally inspected plants and to enforce both sanitation requirements and performance standards.” The American Meat Association says it makes a food safety promise it cannot deliver. In addition, the bill would give the USDA secretary authority she already has to establish microbiological performance standards. (Pork Alert)
> US    A North Carolina House of Representatives bill would phase out all hog-manure lagoons and sprayfields in the state by September 2008. Bill supporters criticize the amount of time it’s taking scientists to find alternative manure-handling technologies (following a 2000 settlement between Smithfield Foods and the state). (Pork Alert)
> CANADA    A team of Toronto researchers has discovered how to selectively target the cause of BSE and other similar fatal brain-wasting diseases, opening the door to cures for infected people and vaccination for cows and other animals, according to an article in an Ontario, Canada, newspaper. The lead researcher says the discovery could break the barrier to developing ultrasensitive blood screening for the infectious agents called prions. That in turn could lead to the detection of the disease in live animals, avoiding the unnecessary large-scale slaughter of suspect animals. The discovery could also lead to a vaccine for animals and, later, humans. (Drovers Alert)
> US    Researchers at the Agricultural Research Service (ARS) are developing an oil emulsion vaccine to reduce the possibility of Salmonella enteritidis entering chicken eggs. The vaccine reduced S. enteritidis fecal shedding in vaccinated hens by 10 – 40%. A patent has been filed by the agency. (Feedstuffs)
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AGRIBUSINESS NEWS
> Monsanto Co.’s new president and chief executive Hugh Grant made clear that Monsanto’s future is with genetically modified crops. Monsanto will look to its genetically altered seeds – corn, cotton, canola and soybeans are on the market – that tolerate Roundup and resist insects to become the primary money maker. (AP)

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BRAKKE CONSULTING VIEWPOINT
Most of the news this week seems to address smaller incremental additions to product labels, a few new products and several diagnostics. We continue to believe that there will be fewer large product innovations in the next few years. The regulatory hurdles and reduced R&D investments make for a challenging environment.

We continue to believe that companies in the future will need to combine products and services needed by their customers if they want to be successful. We know it is hard to break old habits and opinions regarding the market place. However, the market you all serve is changing and those who meet the challenges of these changes will be the winners.

Ron Brakke

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