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Lamb on the rise 3 Dec 08
Rising lamb prices are driving a flood of new season lambs into Victorian saleyards and processors are getting edgy about winter supplies.
So edgy that major lamb processor Tatiara Meat Company, based at Bordertown in South Australia, is offering contracts of $4.50 a kilogram for lambs delivered July-August.
Lamb yardings are up 31 per cent on last week and 14 per cent above this time last year, according to Meat and Livestock Australia's National Livestock Reporting Service.
Despite this, saleyard prices reached record levels for this time of year, 23 per cent above the five-year average.
At NLRS recorded sales, heavy lambs averaged almost 400 cents per kilogram nationally and hit 406c/kg in NSW.
The sustained jump in prices - propelled by failed crops, the availability of stubble feeds and a diminishing national flock - have some processors worried about securing supply come next winter. (Weekly Times)
NZ beef 'punching above its weight' 2 Dec 08
New Zealand grass-fed beef has a strong flavour compared with grain-fed beef common in other parts of the world, a McDonald's purchasing manager says.
New Zealand beef is a premium product that is highly sought after in overseas markets, McDonald's Australia and New Zealand purchasing manager Arron Hoyle says.
Mr Hoyle said New Zealand grass-fed beef had a strong flavour compared with grain-fed beef and was an excellent source of lean protein.
"From a global perspective New Zealand punches above its weight," he told more than 100 farmers at a Meat and Wool New Zealand Sheep and Beef Council field-day at Millers Flat last week.
Mr Hoyle buys New Zealand beef for hamburger chain McDonald's, which operates in 118 countries and serves more than 56 billion people per day.
Its sales typically exceed US$55 billion per year while its food and paper spend amounts to about US$20 billion annually.
Mr Hoyle said New Zealand beef was sold in 70 per cent of McDonald's 33,000 restaurants in 20 countries worldwide.
"It is one of the most important countries in our global supply chain."
Mr Hoyle said the the outlook for beef was "pretty darn positive" because of strong demand.
However, the challenge for New Zealand farmers, who he described as the most innovative in the world, was to supply beef year round.
"It is extremely difficult to source product in the winter."
Mr Hoyle also believed a good traceability system was essential for the New Zealand beef industry.
"Our consumers are saying they want transparency, traceability and trust.
"They want to know the burger they are eating is safe." (Fairfax)
Pilgrim’s Pride seeks bankruptcy on high grain costs 2 Dec 08
Pilgrim’s Pride Corp., the largest U.S. chicken producer, sought bankruptcy protection along with five affiliates after rising grain costs and a poultry surplus led to four consecutive quarterly losses.
The company, a supplier to Wal-Mart Stores Inc. and Yum! Brands Inc.’s KFC restaurants, listed assets of $3.75 billion and debt of $2.72 billion today in U.S. Bankruptcy Court in Ft. Worth, Texas. It said it will seek $450 million in loans arranged by Bank of Montreal for operations during its reorganization.
The filing “was a necessary and prudent step and the best way to obtain the financing necessary to maintain regular operations and allow for a successful restructuring,” Pilgrim’s Pride Chief Executive Officer Clint Rivers said in a statement.
Surging feed costs and dropping chicken prices helped lead to the collapse of Pilgrim’s Pride, formed in 1946 when Aubrey Pilgrim and a partner, Pat Johns, bought a feed store for $3,500.
The company took on debt and surpassed Tyson Foods Inc. in production in 2007 when it bought Atlanta-based Gold Kist Inc. for $1.1 billion. Since Sept. 26, lenders agreed to waive certain conditions of its credit agreements until today.
Investment firms that own at least 5 percent of Pilgrim’s Pride include London-based Prudential Plc unit M&G Investment Management Ltd., Boston-based Wellington Management Co. and Stamford, Connecticut-based SAC Capital Advisors LLC, according to court papers.
Pilgrim’s Pride’s debt includes $400 million of unsecured claims and $250 million of subordinated unsecured claims, the company said in bankruptcy documents.
The company, with 47,900 workers in North America, had sales of $8.5 billion in the 12 months ending Sept. 27, according to the filing.
Its pork-breeding operations and two insurance companies are owned by non-bankrupt affiliates. Its operations in Mexico, where it’s the second-largest poultry producer, also aren’t affected by the bankruptcy.
Pilgrim’s Pride and other chicken producers have been reducing output to boost prices. Since March 5, when Rivers became CEO, he has cut processing capacity by 6.25 percent by either closing and idling plants, cutting 2,635 jobs.
Rivers, 49, also sold the company’s New Oxford, Pennsylvania, turkey-processing plant to Hain Celestial Group Inc., exiting the turkey business.
“The current operating environment is among the most difficult I’ve seen in my 27 years in this business,” Rivers said on a May 5 conference call with analysts. “The federal government has helped spark a growing worldwide food crisis by mandating corn-based ethanol production at the expense of affordable food.”
Rivers succeeded O.B. Goolsby Jr., who died in December 2007 after suffering a stroke.
“It’s an indication of the weak conditions in the chicken sector,” Egan said of the bankruptcy filing. “If you have operating losses, a reduction in the debt burden doesn’t address the underlying problem." (Bloomberg)
India Won’t Restore Palm Oil Import Tax on High Oilseed Prices 27 Nov 08
India, the world’s largest buyer of vegetable oils after China, won’t reinstate import taxes on palm oil as prices of domestic oilseeds stay above the assured price the government pays farmers.
The government may purchase oilseeds from farmers or impose a tax on palm oil imports if domestic prices decline, Agriculture Minister Sharad Pawar said in New Delhi. The duty was scrapped in April to bolster supplies and cool food prices.
The government on Nov. 19 levied a 20 percent duty on crude soybean oil, the main substitute to palm oil, to shield oilseed growers from duty-free imports.
Cheaper palm oil imports are pressuring local oilseed prices at a time when farmers are harvesting the monsoon-sown crops of soybean, peanut and sesame, analysts including Dorab Mistry, a director at Godrej International Ltd., one of India’s biggest palm oil buyers, have said.
The price of palm oil in Malaysia, the global benchmark, has slumped 66 percent from a record in March, lowering import costs for India. The commodity accounts for 90 percent of the nation’s total edible oil imports.
Separately, Pawar said India’s food subsidy will increase to 500 billion rupees ($10 billion) in the fiscal year ending March, compared with 326.7 billion rupees budgeted for the fiscal year.
The government won’t ease curbs on basmati exports now as it seeks to keep prices in check, Pawar said.
“For the next 4-5 months I don’t want to create a situation where price could rise,” he said.
The government in April banned overseas sales of non-basmati rice and raised the minimum export price for basmati to $1,200 a ton from $1,100 a ton to boost domestic supplies.
India’s farm growth is expected at 4 percent or higher for the year ending March, Pawar said. (Bloomberg)
Heavy rain damages grain harvest 26 Nov 08
Farmers in some parts of Western Australia say their chances of an improved harvest have been damaged by heavy rain.
Farmers were hoping for a bumper harvest after rainfall during the grain season, but say wheat quality has been affected by recent falls.
Derek Clauson from the WA Farmers Federation says farmers south of the Great Eastern Highway have been the worst affected.
"We haven't been able to get going in a consistent run at harvest, but hopefully we will be able to get into wheat from here on in, so north of the highway is probably better than south of the highway in terms of how the rain has impacted on quality," he said.
"The late rain is really taking away from potential in the Great Southern, and in the Esperance area, and I think we will see a significant downgrade in grain quality which is bad news for a lot of growers." (ABC News)
Painful road for AWI 26 Nov 08
Politically, nothing is easy in wool, as the new board of Australian Wool Innovation is about to discover.
There was a changing of guard last week because a large number of wool growers were dissatisfied with the commitment to end surgical mulesing from the end of 2010.
As WoolProducers president Don Hamblin noted, a number of the incoming directors had based their election on the promise that they would facilitate a continuation of mulesing beyond 2010.
But he said this was "clearly at odds with what a number of our international customers and domestic groups, such as the RSPCA and Australian Veterinary Association, would like us to do."
Reconciling these two positions in the interests of the industry will not be easy, although Mr Hamblin said he welcomed last week's AWI statement that it remained committed to the current board policy of continuing its research in mulesing alternatives.
The mulesing issue aside, the election result has raised concerns about whether wool can better be served by a popularly elected board of directors as against drafting independent directors with corporate skills.
Last week's result went for the former, particularly for those candidates who embraced the mulesing issue.
The outgoing chairman Brian van Rooyen, a seasoned board director, says corporate boards have three responsibilities; to set the strategic direction of the company, appoint a chief executive and ensure management stick to the strategic policy. Nothing more, nothing less.
Problems for companies, including AWI, arise when directors are elected to do things that go beyond their corporate duty.
Certainly, there are many wool growers who are doing it tough at the moment because of poor seasons and low prices and they wanted a forum to express those feelings.
Naturally, they will turn to those with vested interests in wool, which is what they did last week.
That raises the questions of whether or not the wool industry has the right election model.
Perhaps growers might consider electing a selection or industry group, which in turn appoints or drafts directors with appropriate skills to run their board. One of the downsides from chopping and changing a board is that it creates uncertainty among management and staff.
That's the last thing wool can afford at the moment. (Weekly Times) |
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