The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for March 23, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Bayer reported full year 2000 sales for its animal health group were 999 million euros ($941 million), an increase of 8.9% over 1999. (company website)

>  Tyson Foods, Inc. revised its earnings outlook for the second quarter, ending March 31,
2001, saying it now expected earnings to be at or near break even. This compares with the $0.06 to $0.10 that the Company had projected earlier. Second quarter earnings will include charges relating to the previously announced product recall and the divestiture of the North Carolina hog operation, amounting to approximately $0.02 to $.03 per share.  Additionally, the on-going effect of the severe winter weather has been worse than previously anticipated, and is expected to reduce earnings another $0.03 to $0.04 per share.  Higher grain costs, energy costs and weaker than expected pricing recovery are also contributing to the earnings shortfall. (PRNewswire)

Company News Releases

>  Heska Corporation announced that it has entered into a distribution agreement with Novartis Animal Health Canada, Inc., granting Novartis exclusive distribution rights for the sale of the HESKA’s Flu Avert I.N. vaccine in Canada.  Financial terms of the agreement were not disclosed. Novartis Animal Health is expected to sell Flu Avert I.N. vaccine through their direct sales force in the Canadian market.  Product introduction is anticipated to be in mid-2001, after receipt of final regulatory approval. Heska’s Diamond Animal Health subsidiary in Des Moines, Iowa will manufacture the product for Canadian distribution. (company press release)

             Brakke Consulting, Inc. Technology Review

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Brakke Consulting can review and audit your current processes in these and related areas to help you become more competitive in technology development.  Call John Short at 828-236-0585 or our Dallas office for more details.

Animal Health News

>  The Dutch agricultural ministry confirmed four cases of foot-and-mouth disease at a single farm in the eastern part of the country. The outbreak makes the Netherlands the second country in continental Europe after France to be infected with the highly contagious disease.  The European Commission said it would propose a ban on the export from the Netherlands of livestock susceptible to foot-and-mouth following confirmation of the disease at a farm in the country.  (AnimalNet – Reuters)

>  Ireland became the fourth country in Europe to be hit by foot and mouth disease after it confirmed that tissue samples from two sheep on a farm in north County Louth, near the border with British-ruled Northern Ireland, tested positive for the disease. (Reuters)

>  In a presentation at a scientific seminar organized by the UK Ministry of Agriculture, officials said that they anticipate at least 4,000 confirmed foot-and-mouth disease (FMD) cases to be reported by June 2001.  The outbreak will grow fast in the next few weeks and continue for many months. The number of cases will rise steeply with rapid expansion in the existing areas in spite of current controls. Estimates vary from 70 cases a day over the next two weeks to over 4000 cases by June 2001.  The officials also said that expediting slaughter of infected animals would help reduce transmission, but that this must be done in conjunction with the immediate slaughter of all susceptible species around infected farms. (AgWeb)

>  VIV Asia 2001 in Bangkok, Thailand, achieved a record total attendance of over 15,400 visitors. This compared with 12,428 at the previous show in 1999 and 10,192 in 1997. By far the biggest increase this time was in the number of people attending from outside Thailand. The event will return to Bangkok in March 2003. (Pig International)

>  Starbucks Coffee Company plans start offering rBST-free milk as an option upon request, as soon as the company has an alternative supply. Starbucks expects to have the recombinant-bovine-somatotropin (rBST) -free milk alternative in all its company-owned U.S. stores by the end of this summer. Company officials say they ultimately want all of Starbuck’s milk products to be rBST-free.  Starbucks noted that the FDA, World Health Organization, American Medical Association, National Institute of Health and regulatory agencies in 30 countries say milk from cows supplemented with rBST is no different from milk from untreated cows. The company stated that they recognize that some of their customers have concerns about the presence of rBST in milk products, and are taking measures to address those concerns. (AgWeb)

>  Experts from over 40 countries assembled on Monday to push towards an international code of practice for animal feed to go into effect by 2003.  The international Task Force on Animal Feeding was set up last year to work out new strategies and agree an international code of practice by 2003. (AnimalNet – Reuters)

>  Israel handed over 200,000 doses of vaccine against foot-and-mouth disease to the Palestinian Authority in an effort to prevent an outbreak of the highly contagious livestock illness in the region. The Israelis and the Palestinians have had only limited cooperation since fighting erupted six months ago, but the two sides said they would coordinate in order to protect livestock herds. Israel regularly vaccinates livestock against the disease, which is crippling herds in Britain. No cases have been reported in Israel. (AP)

>  The American Meat Institute has introduced a voluntary certification initiative by which cattle marketers would certify to beef packers that livestock met the FDA ban on the use of ruminant-derived by-products in feed.  AMI has distributed a model certificate to its members, describing it as a “best business practice.” The document also certifies that animal drugs were used legally.  Concurrently, the animal feed industry and the rendering industry are working to launch their own certification programs.  (AnimalNet – The Meating Place)

>  The USDA, under the authority of the U.S. District Court, removed a flock of 233 quarantined sheep from a private farm in Vermont. A second herd of 140 sheep also from Vermont is scheduled to be removed within the next few weeks. The sheep, which were imported from Belgium and the Netherlands in 1996, were placed under certain federal restrictions when they entered the country as part of the USDA’s scrapie control efforts. In 1998, the USDA learned that it was likely that sheep from Europe were exposed to feed contaminated with bovine spongiform encephalopathy (BSE). The first flock would be transported to the National Animal Disease Center in Ames, Iowa, tomorrow.  In Ames, the sheep will be humanely euthanized. Tissue samples will be collected from the sheep for diagnostic testing, and the carcasses will be disposed of.  (AgWeb)

>  A group of scientists from various research institutes in China announced that they have developed a vaccine that can prevent pigs from catching the deadly foot-and-mouth disease (FMD), which has plagued several European countries for many weeks now. After 18 years of research, the vaccine is made primarily of proteins extracted from bacteria that have a strong immunity to disease. Two vaccinations can keep a pig free from the disease for approximately four to five months. The scientists said they have a patent for the product as well as an official license for mass production. According to an overseas news agency, experts who evaluated the vaccine said it is highly safe and reliable. (AgWeb)

>  Scientists with the Veterinary Infectious Diseases Organization in Canada (VIDO) are working on new vaccine delivery methods that include using a patch and shooting vaccines under the skin with high pressure air.  The patch will require vaccines to be bonded with agents that carry the vaccine through the tough, outer layer of skin and into the tissue just below the skin’s surface. One negative to this method is that surface hair may need to be removed, but VIDO is addressing that issue. (AgWeb)

Agribusiness News

>  Dow Chemical and Rohm & Haas have reached an agreement for Dow Agrosciences to purchase Rohm & Haas’s Agricultural Chemicals business for approximately $1 billion.  The companies expect to close the transaction in the second quarter of this year, following regulatory approvals.  In 2000, Rohm & Haas’s agricultural chemical product sales were $531 million, which will boost Dow’s agchem sales to approximately $3 billion. (Feedstuffs)

>  Global pesticide sales were down 1.8% in real terms in 2000, according to a review by the Edinburgh-based consultants Allan Woodburn Associates. (This figure does not take into account the effects of inflation and currency factors.) The 2000 decline in sales followed a 5.2% drop in 1999. Despite the overall decline, sales in North America were up 2.8% to US$8.8 billion, due in part to increased U.S. soybean plantings. There was a downturn in Canadian and Mexican markets, however, which Woodburn Associates attributed to low crop prices and weather conditions. (PANUPS)

>  The milk in your coffee, the cotton shirts in your closet, the clean-burning ethanol in your fuel tank; for this and more, thank the people of agriculture on March 20, 2001 as the Agriculture Council of America celebrates National Agriculture Day and National Agriculture Week, March
18-24, 2001. Since their beginnings in 1973, the purpose of National Agriculture Day and National Agriculture Week have always been to help remind consumers that almost everything they eat, wear and use on a daily basis is provided by agriculture. (PRNewswire)

Brakke Consulting Viewpoint
I want to thank our new friends in Thailand, Malaysia, Korea, Indonesia and Taiwan for a most enjoyable time this past 10 days.  This is an interesting part of the world, with a great deal of potential in the animal health area.   The annual growth rates in animal protein production and products to the industry is surpassing other more developed markets.  While there are political issues in some countries, I have found that many of the countries are very interested in expanding internal production of animal protein.  It looks like a growth area to be watched in the future.

While traveling in Asia these past few days, I have been struck by the awareness of the various food safety and disease issues in Europe and North America. There is a general concern over how this could impact their markets.  There is also a desire to see how they could participate in a possible opportunity.  All of the local newspapers have daily articles on BSE, Foot & Mouth disease outbreaks, and other issues.  

[Ron Brakke]
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