Smithfield Foods Inc. said this week that it expects to sell its 49 percent stake in Butterball, its joint venture with Maxwell Farms LLC. Smithfield had offered in June to buy Maxwell Farms’ 51 percent stake for $200 million in June so that it could invest and improve the business, Reuters reports, but that offer may be rejected.

"At this point, what we are getting from our sources is that we are going to be the seller, not the buyer," Smithfield CEO C. Larry Pope said on Wednesday during an earnings conference call. Maxwell Farms did not comment on the story, but a newspaper report in June indicated that the company wanted to buy Butterball rather than sell its stake in the business.

Source: Reuters

Tyson COO expects continued strong earnings performance

Jim Lochner, chief operating officer of Tyson Foods Inc., told the Barclays Capital 2010 Back to School Consumer Conference that Tyson's record earnings this year should not be considered a peak, but rather what investors may expect from the company in the foreseeable future, barring any catastrophic market conditions.

"In the first nine months of fiscal 2010, we've had the best performance in Tyson history and expect it to remain strong," Lochner said. "However, we don't view this as a peak year. The fine tuning we've done and will continue to do on our businesses better positions us to withstand difficult market conditions and capitalize on favorable ones to achieve steadier, more sustainable earnings."

While some have expressed concerns that increased chicken production could create an over-supply, Lochner told the conference that domestic availability of total protein should not change materially in 2011. Citing industry data, he said more chicken should be offset by less beef, while pork production is projected to be flat or down slightly.

Overall protein supply appears to track below the peak of 2007-2008 and should be roughly flat compared to 2010, he said.

Donnie King, Tyson's senior group vice president for poultry and prepared foods, reported the company has five poultry plants eligible to export to Russia and is working to have additional facilities approved. Tyson's first load of poultry to Russia was shipped last week.

In addition to improved operational performance, Tyson has reduced its debt load significantly. The company has generated cash flows sufficient to pay down its debt by more than $900 million through the fiscal third quarter of 2010 to its lowest level since 2001. Debt-to-capital was 34% at the end of the third quarter, while net debt-to-capital (i.e., debt less cash) stood at 26%.

Reduced debt should mean reduced interest expense from about $335 million in 2010 to around $245 million in 2011 following recent upgrades in ratings from Standard & Poor's and Moody's, which further reduced interest expense.

Source: Tyson Foods Inc.

Almost all eligible plants cleared to ship poultry to Russia

The USDA said this week that all but one of the 26 poultry plants that are eligible to ship poultry products to Russia have been cleared by Russian officials. The lone uncleared plant was not named, nor was a time-table on when it would be cleared.

"We continue to work with the Russians, continue to negotiate and discuss with them the next steps," Agriculture Secretary Tom Vilsack told reporters earlier at a USDA event, Reuters reports. "My understanding is poultry is on its way to Russia."

Sanderson Farms, Tyson Foods and Pilgrim’s Pride have all announced the resumption of shipments to Russia within the past month.

Source: Reuters

Lunchables line expanded

Oscar Mayer has expanded its line of Lunchables products, just in time for the start of a new school year. Hitting the shelves this summer are the newest additions to the Lunchables with water line which feature options like rotisserie seasoned and 100% white meat chicken as well as a full serving of fruit.

The line expansion includes the introduction of two new varieties: Chicken Strips made with 100% white meat chicken and Chicken + American Sub Sandwich which features rotisserie seasoned chicken and bread made with 8 grams of whole grain. Both products join the Lunchables with water roster introduced last year that offers quality meats, cheeses and spring water.

Additionally, while select varieties previously saw the addition of unsweetened applesauce, this season marks the first time Lunchables Lunch Combinations provides parents with the option of mandarin oranges. Two recipes - Chicken Strips and Deep Dish Cheese Pizza - include a full serving of fruit: DOLE Mandarin Oranges in 100% fruit juices. Four varieties now include fruit.

"We strive to give parents choices they can feel good about, while also providing kids with foods they'll eat," said Darin Dugan, senior director of marketing, Lunchables. "We're excited about the addition of mandarin oranges because parents requested it."

Over the last 10 years the Lunchables Lunch Combinations line has been extensively revamped. Along with the introduction of new, more wholesome offerings in 2009, the entire line of Maxed Out products were eliminated. This evolution has resulted in a 24% reduction in sodium, a 22% reduction in fat and a 21% decrease in calories across the portfolio.

"We're always looking for ways to make our products better," said Dugan. "As a result, we constantly evaluate the nutritional profile of our food and have worked hard to improve it by adding whole grains, spring water and fruit options. We've also removed ingredients like high fructose corn syrup from our crackers."

Source: Kraft Foods

Marfrig gets top share of Argentine export quota to EU

Brazilian processing giant Marfrig Alimentos SA won the largest share of Argentina’s quota to export beef to the European Union. Four of its Argentine units will be allowed to ship a total of 3,142 metric tons of beef for the year, ending June 30, under the Hilton Quota.

Argentina, the second largest per-capita consumer of beef after Uruguay, received about half of the EU’s 58,000-ton quota, which was divided between eight countries, reports Bloomberg. The other countries awarded permits are the U.S., Canada, Brazil, Paraguay, Uruguay, New Zealand and Australia.

The Hilton Quota system was designed to help exporters from other nations after European agricultural subsidies were introduced in 1979.

Source: Bloomberg

New study refutes old study: Meat doesn't cause colorectal cancer

Currently available epidemiologic evidence is not sufficient to support an independent positive association between red meat consumption and colorectal cancer, according to a new review published in Obesity Reviews by researchers D.D. Alexander and C.A. Cushing.

In this comprehensive review, the currently available epidemiologic prospective studies of red meat intake and colorectal cancer were summarized to provide a greater understanding of any potential relationships. Specifically, salient demographic, methodological and analytical information was examined across 35 prospective studies.

Collectively, researchers found that associations between red meat consumption and colorectal cancer are generally weak in magnitude, with most relative risks below 1.50 and not statistically significant, and there is a lack of a clear dose–response trend.

Results were variable by tumor site and by gender. Data were not indicative of a positive association among women. Findings in men were slighly stronger, although the potential reasons for this observed disparity between genders was unclear.

“Colinearity between red meat intake and other dietary factors (e.g. Western lifestyle, high intake of refined sugars and alcohol, low intake of fruits, vegetables and fiber) and behavioral factors (e.g. low physical activity, high smoking prevalence, high body mass index) limit the ability to analytically isolate the independent effects of red meat consumption,” researchers concluded.

The review was recently published in Obesity Reviews, the official journal of the International Association for the Study of Obesity, and can be accessed here:

Source: American Meat Institute