8-10 news: Pork industry seeks $50 million federal bailout
Iowa Governor Chet Culver explained the need for assistance, stating, “The industry is facing some difficult challenges in this economic downturn. Unfounded concern over pork supply due to the H1N1 flu have led to greater difficulty.” Neil Dierks, CEO of the National Pork Producers Council, added that producers lost about $21 for every hog they have been selling since late 2007.
The governors sent a letter to President Obama noting that the pork production industry accounted for about $550,200 jobs across rural America. It stated that pork producers have lost about $330 million in profits since the flu outbreak, and the losses could reach more than $1 billion by October.
Smithfield announces below-expected Q1 results, $225 million senior secured notes offeringSmithfield Foods Inc. announced its fiscal first-quarter results were below expectations, with record results in the packaged foods business mixed with greater-than-expected losses in hog production.
According to Dow Jones Newswires, Smithfield noted that it met production and feed-cost cuts in the quarter, which ended Sunday, but the recession and H1N1 flu fears reduced demand and kept the company from meeting its expected seasonal improvements in hog prices. It was also the last quarter that will be “significantly” impacted by grain positions Smithfield entered last year, as the company locked down some prices as commodities peaked. No other information was immediately available.
Smithfield also announced that it is initiating an offering, subject to market and other conditions, of $225 million of 10% senior secured notes due 2014. The notes will have identical terms and conditions, other than issue date and issue price, as the $625 million of 10% senior secured notes due 2014 issued by the Company on July 2, 2009. The company intends to use the proceeds from the notes offering, together with other available cash, to repay other outstanding indebtedness.
Source: Dow Jones Newswire, Smithfield Foods Inc.
Perdue announced management changesPerdue Inc. has announced several changes within the senior management team of the nation’s third-largest poultry company.
Jim Leighton has been named president of the Foodservice Division of the Perdue Food Products Group, effective April 6, 2009. He also assumes additional responsibility for the International channel. Leighton, who brings more than 25 years of varied food industry experience to the role, joined Perdue in 2006 as senior vice president of operations and supply chain management. Clint Rivers has joined Perdue as senior vice president of operations and supply chain management, effective July 7, 2009. He brings more than 28 years of food industry experience to Perdue, the most recent 20 in increasingly more responsible capacities with Pilgrim’s Pride Corp, where he was most recently president and CEO. Luis Luna has been named vice president of corporate communications, effective August 3, 2009. Luna will be responsible for media and community relations, internal and external communications, corporate contributions and will be the primary spokesperson for the corporation. Additionally, he will provide strategic analysis and counsel to the executive management team on a wide range of communication issues to support the business goals of the company and its subsidiaries.
Source: Perdue Inc.
Australian beef experts expected to decline in '09Beef exports from Australia are expected to fall in 2009 because of gains in the local currency and the global recession, according to the trade group Meat & Livestock Australia. Shipments of beef and vesl may drop 1% to 950,000 metric tons, in 2009. Bloomberg reports that a January forecast called for a 3% gain to a record of 990,000 tons.
“Deep recessions in almost all advanced economies, especially Japan and the U.S., has impacted beef demand, as confidence plunged and consumers turned towards cheaper beef cuts and protein,” Meat & Livestock’s Tim McRae and Peter Weeks wrote in the report.
The country's currency has gained 19% against the U.S. dollar, making beef more expensive for overseas customers. The group is expecting a rebound in 2010, predicting a global recovery and exports of 1 million tons.