The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for December 29, 2000

Copyright © Brakke Consulting, Inc.
Company News Releases

>  Idexx subsidiary Blue Ridge Pharmaceuticals has gained FDA approval for a new treatment for earmites in cats and kittens.  ACAREXX is a 1% ivermectin suspension and is the company’s first prescription animal health product to be approved for sale.  The product, administered topically in the ear canal, is approved for treatment of adult earmites. (Animal Pharm)

>  Biocor, a subsidiary of the Australian CSL group, has acquired the Herd-Vac bovine modified live virus vaccine range from Bayer.  The Herd-Vac line of vaccines has been manufactured at the Biocor facility for several years.  Biocor will now also assume distribution and marketing responsibility for the vaccine line. (Animal Pharm)

>  Tyson Foods Inc. has increased its bid for pork and beef processor IBP Inc. to $27 a share in cash and stock, or $2.8 billion. Tyson also offered $70 million as a breakup fee in case the deal hits antitrust obstacles. The offer comprises a cash component of 50.1% and the rest in stock. Tyson, which had earlier made a $26 per share bid.  (E-markets – BridgeNews)
>  Tyson Foods Inc. is raising the stakes in the three-way battle with Smithfield Foods to take over IBP Inc. John Tyson, the company’s top executive, has offered a personal assurance to independent livestock growers that Tyson Foods won’t shift production of cattle and hogs to company-owned operations. For Tyson Foods, it would represent a different way of doing business. In becoming the world’s largest poultry packer, Tyson Foods started growing its own chickens rather than buying them from independent producers. Tyson helped introduce the philosophy to the chicken industry, where it now controls 28% of the U.S. market. Smithfield has pursued a similar philosophy with pork and now controls 18.4% of that market. IBP controls 27.7% of the U.S. beef market and 17.7% of pork. Unlike Tyson Foods and Smithfield, IBP buys all of the animals it slaughters, a practice that its independent suppliers want to preserve. (E-markets – Knight Ridder/Tribune)

>  Marabo, a UK development company, announced the development of an artificial boar scent, PorSine, which delivers the same effect on a sow as the presence of a “teaser” boar.  The product is delivered via a powder puffed onto the sow’s snout.  PorSine will help farmers determine which sows are approaching estrus, allowing control over breeding. (Animal Pharm)


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Animal Health News

>  The USDA recently granted Michigan a pseudorabies-free status for the state’s swine industry, thus easing marketing restrictions for swine to Canada and other states. To maintain State V status, Michigan officials will continue to test blood samples from five percent of the state’s breeding herd, which is approximately 110,000 animals, either by market surveillance or by collecting samples at slaughter. (AgWeb)

>  Pork production in the U.S. totaled 1.71 billion pounds last month, up slightly from the previous record high set last year, according to the livestock slaughter report released by the USDA.  Beef production, at 2.17 billion pounds, was 1% above the previous record high for November set last year. (AgWeb)

>  The USDA’s year-end 2000 USDA quarterly Hogs & Pigs Report reported that there were 77,260 hog “operations” in business in 2000. Of those, 66% had fewer than 100 head of hogs, and, as a group, they represented only 1.5% of the U.S. hog inventory. Similarly, on the top end, operations with at least 5,000 head of hogs or more accounted for less than 2% of all operations, but collectively, they represent 66.5% of the entire national inventory. In the past year, a sharp decline in the number of hog operations was noted in the ones with 100 head to 499 head, as well as those operations with 500 head to 999 head. Overall, nationally, USDA recorded 77,260 hog operations in 2000, compared to 90,390 operations in 1999. (Agweb)

>  The German beef market has practically collapsed, with consumer demand down by up to 80% following the recent discovery of BSE infected cows in the country, according to a survey conducted by Deutsche Presse-Agentur.   Five cases of BSE were confirmed for the first time this month among cattle homegrown in Germany, prompting the consumer scare.  (E-markets – Deutsche Press-Agentur)

>  The Bulgarian Vet Service will require a new format of export certificates from all importers of livestock, animal products and feedstuffs effective Jan. 1, 2001. The new regulation is likely to impact the meat market; however, a new U.S./Bulgarian language certificate is being developed and a phase-in period is being adopted to avoid stopping any ongoing trade. The veterinary service is aware that large export countries such as the United States, Canada, Australia and Argentina are very unlikely to change their standard format of export certificates. Since Australia and Argentina are the usual meat exporters to Bulgaria, the new regulation may lead to an eventual decline in meat imports. This will further complicate the local meat market situation, which currently faces meat shortages and price increases. (AgWeb)


Brakke Consulting Viewpoint
This is the 52nd edition of the Brakke newsletter for 2000.  So, I guess it must be getting close to the end of the year. It has been a reasonably good start in the new millennium, considering a year ago at this time we were all concerned with Y2K.

We assume that the lack of news items and phone calls to our office this week means that many of you are off recuperating from 2000 and getting recharged for the start of 2001.  

Here in Dallas this week we have been putting our finishing touches on the 2001 Animal Health Industry Overview, which will be given at the North American Veterinary conference in January.  Have you signed up yet?  It appears to us that WW Animal Health Sales increased about 2% in 2000 over 1999.  Some of this increase is due to the continuing trend by manufacturers to fill the channel with product so that the animal health division will look better than it really is to the corporate owner.  We question the logic in this sales-driven strategy. Does it benefit the industry, or does it just take needed gross margin out of the manufacturer’s bottom line? 

We see 2001 as a rerun of 2000. Yes, it looks like 2% sales growth with all the negatives facing the industry will be a good year.  We’ll see you all in Orlando in a couple of weeks.  We doubt that you’ll be bothered quite as much by dotcoms this year, now that they have taken all the costs out of the system and moved on to other market opportunities.


 [Ron Brakke]
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