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5-7 news: EU, US reach agreement on beef dispute

May 7, 2009
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The European Commission and the United States have come to a provisional agreement over the European Union’s ban on hormone-treated beef, ending a 13-year stalemate.

Officials have agreed that the U.S. will not impose sanctions on EU food products, which were to be enacted this week. In return, the EU has pledged to buy more high-quality U.S. beef.

The dispute has stemmed from the EU’s refusal to import hormone-treated U.S. beef. Europe claims that one of the hormones causes cancer and that others pose a health risk. The U.S. says that beef from hormone-fed cattle is safe. Under the new agreement, EU will import 20,000 additional metric tons of non-hormone-treated beef for three years, expanding to 45,000 metric tons of beef in the fourth year. Currently, it allows 11,500 metric tons imported per year. In return, the U.S. will maintain its existing sanctions on European-imported goods and will not expand them.

The Obama administration, Wall Street Journal reports, has decided to table the issue of hormone-treated beef in return for expanding the European market for non-hormone-treated beef. The administration said that beef producers will benefit more economically from this new agreement than they would from increased tariffs on European goods.

The meat industry praised the decision. “We appreciate the leadership and persistence of Ambassador Kirk and his USTR team in getting this process moving in the right direction after 20 years of unsuccessful efforts,” said Gregg Doud, chief economist for the National Cattleman’s Beef Association. “Once approved, this will be a positive step forward in our goal of expanding U.S. beef market access, but we still have a long way to go before this issue is resolved to our satisfaction.” He noted that the issue does not resolve the hormone dispute.

“The provisional agreement reached today between the United States and the European Union ─ while only an agreement in principle ─ is an encouraging positive step towards restoration of beef trade between the U.S. and EU,” said American Meat Institute President and CEO J. Patrick Boyle. “Given the support in the U.S. and the EU to find a workable solution, we hope that the member states will approve this agreement.  Restoration of beef trade between the U.S. and the EU is long overdue. While this is only a first step, we are hopeful that it is represents movement in ending the trade friction that has existed for so long. We hope that this initial opening will lead to a larger and fuller restoration of beef trade in the future.”

A statement from the National Meat Association stated: “National Meat Association wishes to applaud the hard work of the U.S. Trade Representative’s office in reaching a provisional agreement today with the European Union (EU) on the trade of beef from cattle not treated with growth promoting hormones. “This agreement is a step in the right direction.  Although it does not resolve the EU’s 20 year ban on beef from cattle treated with growth promoting hormones, it does provide an opportunity for an expansion of beef trade,” said NMA CEO Barry Carpenter.”


Sources: Wall Street Journal, National Cattleman’s Beef Association, American Meat Institute, National Meat Association



Sara Lee profit falls 22 percent

Sara Lee Corp. announced its third quarter results, with net income of $165 million, down from $211 million from the previous year. Sales dipped 7 percent from $3.24 billion to $3.03 billion. The company also announced that it would cut 700 jobs as it outsources part of its business, AP reports.

“The changes we have implemented to drive efficiencies and reduce costs, combined with our long-term commitment to innovation, marketing and talent management are beginning to benefit our bottom-line results, despite ongoing macro-economic challenges,” said Brenda Barnes, chairman and CEO.

Sales growth in the North American retail and fresh bakery business was more than offset by lower sales in the North American foodservice and international business segments, with the latter due to unfavorable foreign currency exchange rates and the struggling European economy.

Operating income was $262 million for the quarter, an increase of 8.3 percent from $242 last year. Operating income for the North American Retail segment was $66 million in the third quarter, compared to $46 million in the year-ago period, an increase of 42.6%. Strong unit volumes for Ball Park Angus Beef franks, Jimmy Dean Breakfast Entrées and Breakfast Bowls, State Fair corn dogs and Hillshire Farm sliced meats were more than offset by the phasing out of the commodity meats business and the exit of the kosher meats business, as well as the volume impact of SKU rationalization and pricing actions executed to improve margins, the company reported. Major new product launches in the third quarter included various Sara Lee lower sodium deli meats, Hillshire Farm Miller High Life Beer Brats and Ball Park bun-size Angus Beef franks.


Sources: Sara Lee Corp., Associated Press



Mixed results for Wendy's/Arby's Group in Q1 results

Wendy’s/Arby’s Group Inc. reported its first-quarter results, with Wendy’s same store sales increasing 1.0 percent from last year and Arby’s same-store sales decreasing 8.7 percent. However, that number improved to -2.5 percent for the month of March, thanks to the introduction of the Roastburger line of sandwiches.

Roland Smith, president and CEO of Wendy’s/Arby’s Group, said: “We are pleased with the progress we made at both brands during the quarter, including positive same-store sales and margin improvement at Wendy’s as well as improved same-store sales results in March at Arby’s. Our adjusted EBITDA of $80.3 million met our expectations for the quarter and we remain on track with our target of $100 million in restaurant margin improvement at the Wendy’s brand and $60 million in general and administrative (G&A) cost savings by the end of 2011. As the economy rebounds, our stockholders should benefit from the significant operating leverage our brands can generate as we grow sales and control costs.”


Source: Wendy’s/Arby’s Group Inc.



FMI elects new chairman, 2009 board members

Food Marketing Institute (FMI) announced the election of four new members of the FMI Board of Directors. FMI also announced the election of the board chairman and four board vice chairmen.

Elected to the FMI Board of Directors are Mark Batenic, chairman, president and CEO, IGA Inc., Chicago, Ill.; Rudy Dory, owner, Rudy’s Markets, Inc., Bend, Ore.; Jerry Garland, president and CEO, Associated Wholesale Grocers Inc., Kansas City, Kan.; David Hepfinger, president and CEO, Weis Markets, Inc., Sunbury, Pa.; and Dean Peterson, president and CEO, Harmon City, Inc., West Valley City, Utah.

Richard “Ric” N. Jurgens, chairman, CEO and president of Hy-Vee, Inc., West Des Moines, Iowa, was elected chairman of the FMI Board; and Steven C. Smith, president and CEO of K-VA-T Food Stores Inc., d/b/a Food City, Abingdon, Va., is the immediate past chairman of the FMI board.

Elected as FMI vice chairmen to the board are Gregory Calhoun, president and CEO of Calhoun Food Markets Inc., Montgomery, Ala., and will serve as chairman of the public affairs committee; William Coyne, president and CEO of Raley’s Family of Fine Stores, Sacramento, Calif., and will serve as chairman of the finance committee; Ed Crenshaw, chief executive officer of Publix Super Markets, Inc., Lakeland, Fla., and will serve as chairman of industry relations committee; and Dave Skogen, owner and chairman of the board of Festival Foods, Onalaska, Wis., and will serve as chairman of the member services committee.


Source: Food Marketing Institute



R-CALF elects new officers

The R-CALF USA Board of Directors has unanimously elected Missouri veterinarian Max Thornsberry to another 2-year term as president of the board, with Thornsberry himself abstaining. R-CALF USA Region IX Director George Chambers, of Carrollton, Ga., was unanimously elected as vice president of the board.

Also, members, via mail-in ballot, elected directors for each of R-CALF USA Regions I, II and III. Maxine Korman, a rancher from Montana, was elected to fill the position of R-CALF USA Region I Director, which includes the states of Alaska, Idaho, Montana, Oregon and Washington. Her term will run three years.

Dr. Taylor Haynes, a rancher from Wyoming, was elected to fill the position of R-CALF USA Region II Director, which includes the states of Colorado, New Mexico, Utah and Wyoming. His term also will run three years.

Johnny Smith, a rancher and auction yard owner from South Dakota, was re-elected to a second term as director of R-CALF USA Region III, which includes North Dakota, South Dakota and Nebraska. His term runs for three years, and due to term limits, Smith will have to step down for at least one term when his current service expires in 2012.


Source: R-CALF USA

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