If energy, freight, grains & consumer demand has dropped… why is meat still so expensive?
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Meat, Dairy & Seafood News
Arla Foods
Arla Foods AB’s use of the statement “net-zero climate impact” on its milk cartons was deemed misleading by the Patent and Market Court in Sweden. The court ruled that the statement gave the impression that the dairy products did not produce any climate impact, which was not the case since carbon offsetting activities were used to achieve the effect. The court observed that it was not possible to conclude that the results would be achieved after 100 years, and Arla did not adequately demonstrate that its marketing was valid. The case highlights the challenges of correctly formulating the marketing of environmental benefits and presenting the climate impact of a product clearly.
Conagra Brands
Conagra Brands CEO, Sean Connolly, is confident in the company’s growth and innovation prospects as it moves through the inflationary cycle. The US food group’s adjusted gross margin increased by 409 basis points to 28.1% YoY in Q3 2023, with organic net sales up 6.1% to $3.1bn. The company has executed pricing actions in response to inflation, which it expects to continue, with Conagra maintaining its inflation outlook of 10% for the full fiscal year. Connolly emphasised the importance of margin recovery to fund innovation, which he described as “the centrepiece of our playbook”.
Cooke Seafood
Cooke Seafood is urging the Nova Scotia provincial legislature to proceed with its plans for aquaculture development, after a moratorium was imposed on further fish farm development until coastal areas are classified, which could take over three years. The company argues that there are only a few Nova Scotia locations suitable for finfish farming, and expansion will adhere to strict regulations. Cooke adds that salmon farming creates C$2bn ($1.57bn) in total economic output annually in Atlantic Canada and 8,000 jobs in the region, with the company purchasing C$51.5m of goods and services from 309 local suppliers in Nova Scotia each year.
Dairy Farmers of America
Dairy Farmers of America revenue jumps almost 27% in 2022. The cooperative — the Kansas City area’s largest private company — handled 29% of the nation’s total milk production.
Lactalis
Lactalis South Africa (LSA) has invested R140 million in a new evaporator dryer powder plant facility at its cheese-manufacturing plant in Bonnievale. The investment will significantly increase the production capacity of skimmed milk. The new plant will help efficiently remove water from milk to produce a dry powder that has a longer shelf life, is easily transportable, and can be used in a variety of applications. The facility was officially opened on Tuesday, and LSA’s general manager, Alban Damour, said the investment demonstrated Lactalis Group’s commitment to strengthening its business in South Africa.
Perdue Farms, Pilgrim’s Pride and Tyson Foods
Perdue Farms, Pilgrim’s Pride and Tyson Foods will pay a combined $28 million to settle charges that they conspired to fix chicken prices for at least 15 years in a lawsuit brought by the state of Washington. The settlement brings to 14 the number of companies that have settled in the lawsuit, with five companies, including Foster Farms and Sanderson Farms, still set to go to trial in October 2022. The lawsuit alleges a “wide-ranging illegal conspiracy” to inflate and manipulate prices, rig contract bids, and coordinate industry supply reductions to maximize profits since at least 2008.
Pilgrims Food Masters
Workers at Pilgrim’s Food Masters, which supplies own-brand curries to major UK retailers, have staged a protest outside the Houses of Parliament. Over 1,000 workers at its Southall site have been threatened with being sacked and rehired on worse terms, including no paid breaks, reduced sick pay, and the removal of Diwali holiday pay. The company, owned by Pilgrim’s Pride Corporation, has not provided any financial justification for the proposed changes.
Princes Seafood
Kazuo Ito has left the board of Princes, the UK seafood canning company owned by Mitsubishi, and has been replaced by Mitsuro Kawamata. The departure follows news earlier this year that Mitsubishi is selling Princes, with the company currently being put up for auction based on earnings before interest, taxes, depreciation, and amortization of ￡80m ($97m). Princes was established in 1880 as a fish importing business in Liverpool, and after moving under the Mitsubishi umbrella in 1989, it has made numerous mergers and acquisitions.
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Rusagro
Rusagro Primorye, part of the Rusagro Group, has received a permit to supply pork and offal products to the Asia Pacific region, including China. The company plans to increase exports of pork and milk to Asia-Pacific countries. Primorye Territory ranks fourth among Russian food exporting regions, and the export of agricultural products from Primorye in 2023 is expected to be over $1.9 billion. Meanwhile, Rosselkhoznadzor said that Russian companies do not currently have the right to export pork to China.
Tyson Foods
Workers and labor advocates are on strike for the second day at a Tyson Foods chicken processing plant, which is set to close in May. The strike has grown with more workers joining, and about 200 picketers were present on Monday. Meat-processing workers are often underpaid and face hazardous work conditions. Despite working through the pandemic, workers now face layoffs.
Feed, Nutrition & Ingredients News
Alltech
Animal nutrition company Alltech has received reaccreditation from the Pet Sustainability Coalition (PSC) for the third consecutive year. PSC is a non-profit organisation that promotes sustainability in the pet industry through education and collaboration, and accredited companies are required to meet high standards in sustainable business practices. Alltech’s partnership with PSC will help it to meet growing social and environmental expectations from its customers and strengthen its support for the United Nations’ Sustainable Development Goals.
CHS
CHS, a US-based agribusiness cooperative, reported a rise in net income for the second quarter of fiscal year 2023, with net income reaching $292.3 million compared to $219 million in the same period of fiscal year 2022. The increase was mainly attributed to its energy segment, while the earnings of its Ag segment declined from a historically high position from the same period a year ago. For the first six months of fiscal year 2023, CHS posted net income of $1.1 billion and revenues of $24.1 billion, compared to net income of $671 million and revenues of $21.2 billion recorded in the first half of fiscal year 2022.
Evonik
Evonik Industries AG is selling its Lülsdorf site and associated cyanuric chloride business in Wesseling to International Chemical Investors Group (ICIG), subject to antitrust clearance and approval by the relevant Evonik committees. ICIG plans to expand the existing businesses in Lülsdorf and Wesseling and has given contractual assurances that the sale will not alter the rights of the employees at the sites. Evonik will completely divest the production of potassium derivatives and cyanuric chloride with this sale, but retain the business with alkoxides for biodiesel. The businesses to be divested generated sales of around €260 million in 2022.
Nutreco
Nutreco, a Dutch company that specializes in animal nutrition and fish feed, is partnering with BiomEdit, a spinoff of Elanco Animal Health, to collaborate on strategic research and a commercial partnership focused on microbiome technology for next-generation feed additives.
Royal DSM
Royal DSM and ASR Dutch Science Park Fund have partnered to transform the Biotech Campus Delft (BCD) in the Netherlands into a global leader in bioscience. The collaboration will involve the expansion of the bioscience ecosystem in Delft, sustainable food innovations, and the bio-based economy. ASR Dutch Science Park Fund will provide several hundred million euros to support the campus’s growth, including the construction of new offices, shared facilities, and laboratories, as well as the acquisition of existing buildings. The partnership will also involve ASR Dutch Science Park Fund investing up to €500 million in real estate at the location over 20 years. DSM will remain the owner of the Rosalind Franklin Biotech Center and landlord of the Biotech Campus Delft, including the infrastructure and the utilities.
Distribution & Container Shipping News
CHEP
CHEP, a pallet and container pooling solutions provider, has issued a public notice in India cautioning against the unauthorised use and misappropriation of its equipment. CHEP equipment is marked with logos and statements to identify it as belonging to CHEP, and only CHEP, its hiring customers, and their agents can legitimately use it. CHEP’s pooling equipment model significantly reduces waste by embracing the three R’s: Reduce, Reuse, and Recycle.
CMA CGM
CMA CGM has confirmed orders for 16 large container ships from China State Shipbuilding Corp. The $3.1bn order is for 12 methanol dual-fuelled 15,000 TEU ships and four LNG dual-fuelled 23,000 TEU ships. The vessels will be delivered in 2025 and 2026 and are intended to replace the French carrier’s older ships. The order is the largest yet for the shipbuilding group, with Hudong-Zhonghua Shipbuilding constructing the 23,000 TEU vessels and Dalian Shipbuilding and Jiangnan Shipyard building the 15,000 TEU ships. CMA CGM has invested $10.2bn to build 77 LNG-powered container ships, with 32 delivered so far.
J. B. Hunt
J.B. Hunt Transport Services Inc. is expected to report earnings and revenue decreases for the first quarter of 2023 due to a softer freight market. Analysts expect the results to be slightly below Wall Street expectations, citing weakness in the freight market, intermodal mix headwinds, and a miss in the brokerage segment. However, the company’s intermodal and dedicated segments are expected to be relatively resilient due to enhanced partnerships and long-term contracts. The brokerage segment is projected to experience a decline in volumes and gross margins due to the recent weakness in the freight market. Despite these challenges, analysts maintain a positive long-term view on the company’s growth and return profile.
Maersk
Maersk Supply Service and GustoMSC are collaborating to design a next-generation wind installation vessel for Europe’s growing offshore wind market. The new vessel will be an extension of the current feeder concept, designed for operation in US waters, and will be more than 30% more efficient than conventional jackups, according to Maersk Supply Service. The design will also be less weather-dependent, enabling continuous year-round installations, the company said. The basic design is expected later this year. Maersk Supply Service ordered its first wind turbine installation vessel last year for delivery in 2025.
MSC
Mediterranean Shipping Company (MSC) and Costamare have agreed to pay $4.3m to the State of California to settle claims relating to the oil spill caused by the San Pedro Bay pipeline leak in October 2021. The settlement amount will be jointly funded by MSC and Costamare without admission of responsibility or liability for the environmental damage that took place. MSC insists that the damage occurred due to Amplify Energy’s “negligent management” of the pipeline. This is the third settlement announced by MSC this year.