Major Poultry Producer Expands Operations in Arkansas

Wayne-Sanderson Farms, ranked third in U.S. poultry production, has announced plans to build a new feed mill as part of its Danville Fresh Processing Complex in Arkansas. The $43 million project, covering 21 acres, aims to bolster its weekly feed production capacity to over 8,500 tons.

New Feed Mill to Support Local Agriculture

Designed to cater to 125 family farms, the mill promises comprehensive nutritional solutions, enhancing regional poultry farming efficiency. By sourcing corn and grain locally, the initiative is expected to significantly benefit the local economy.

Community and Economic Impact

Facility manager Toby Tapp highlighted the pivotal role of poultry farming in Yell County’s economy, noting the community’s enthusiastic support for the new construction. Local leaders have been engaged early, underscoring the project’s importance to the area.

Construction and Capabilities

The construction phase involves substantial concrete work, expected to conclude swiftly using advanced techniques. The facility, projected to be operational by April 2025, will feature state-of-the-art grain silos and is designed to meet diverse feed requirements efficiently.

Advanced Features and Efficiency

With facilities for rapid mixing and batching of various feeds, the mill is set to streamline local feed supply significantly. Equipped with modern safety and operational features, it ensures resilience against environmental challenges and power disruptions.

Related: Wayne-Sanderson & Perdue’s Health Trend Focus

BRF SA’s Financial Resurgence: A Turn of Fortune in Late 2023

In a dramatic shift within the volatile global food industry, BRF SA, a major Brazilian player in poultry and pork processing, marked a significant departure from its prolonged financial slump. The company, which faced seven successive quarters of losses, made headlines by posting a net profit of 823 million reais ($165.26 million) in the last quarter of 2023. This profit exceeded market expectations and showcased BRF SA’s strategic finesse and adaptability amidst fluctuating market conditions and operational challenges.

Related: Marfrig Becomes Dominant Shareholder of BRF

Key Drivers Behind BRF’s Success

A combination of strategic initiatives and favorable market conditions underpinned BRF’s financial revival. A significant drop in corn prices, crucial for the company’s feedstock, substantially lowered production costs. Furthermore, under the guidance of CEO Miguel Gularte, BRF implemented operational improvements and optimized its predictive market strategies, enhancing its logistical and efficiency metrics. The recovery was also fueled by a boost in exports, driven by 66 new plant authorizations, which expanded BRF’s international reach, particularly in the Gulf region with an increased demand for halal products.

The Bigger Financial Picture

Although the final quarter showed impressive performance, BRF’s overall annual financial health remained challenged, with a second year of losses totaling 1.87 billion reais. Despite this, the year saw significant strides in profitability, particularly in the international segment where double-digit EBITDA margins were achieved. Domestically, a rise in processed food demand improved BRF’s margins significantly. The generation of 613 million reais in cash during the fourth quarter also highlighted the company’s successful operational and financial adjustments.

Future Prospects: Navigating a Complex Landscape

Looking forward, BRF SA faces a blend of challenges and opportunities. The global food market’s unpredictability, shaped by geopolitical tensions, climate change, and evolving consumer tastes, poses a continual challenge. However, BRF’s commitment to operational excellence and market expansion positions it well to navigate these uncertainties. The story of BRF’s turnaround extends beyond mere financial recovery, illustrating a journey of resilience, strategic planning, and continuous improvement in a dynamic industry context.

Police Raid on French Dairy Giant

French authorities conducted a search of Lactalis, a leading dairy company, on Tuesday, amidst allegations of tax fraud. The operation, led by the French National Fiscal Offenses Repression Brigade (BNRDF), targeted the company’s headquarters in Laval and other locations. This move is part of a broader investigation by the French National Prosecutor’s Office into claims that Lactalis has been evading taxes by shifting profits to subsidiaries in Belgium and Luxembourg.

The Allegations Unfold

Reports from Le Monde highlight that the investigation centers on accusations of Lactalis transferring profits to minimize its tax liabilities in France. The period under scrutiny spans from 2009 to 2020, with the alleged tax evasion amounting to several hundred million euros. The probe was initiated following a series of reports and complaints, including a significant report from the farm union Confederation Paysanne in 2019 and tax denunciations in 2022.

Lactalis Responds

Lactalis has acknowledged the searches, stating they pertain to “old events already reviewed by authorities”. The company emphasized that the operations were conducted smoothly and are part of an ongoing inquiry into allegations from years past. Despite the legal challenges, Lactalis, a privately-owned entity claiming the title of the world’s largest dairy business, reported revenues of €28.3 billion in 2022.

Investigation Background

The inquiry into Lactalis’s financial activities began in 2018 with suspicions of laundering charges related to aggravated tax fraud. It expanded to include aggravated tax fraud after receiving additional reports and tax denunciations. The investigation aims to determine the extent of the alleged fraud and the precise amount of duties evaded.

Broader Context

The searches at Lactalis’s premises come at a time of heightened social tensions in France, marked by protests from the farming community demanding fair prices and reduced bureaucracy. However, authorities have clarified that the timing of the raids is unrelated to these protests, being part of a long-planned operation. The case against Lactalis highlights ongoing concerns over corporate tax practices and their impact on national economies.

Read: Top Dairy Producers In The World

Navigating the Future of Protein: Insights from Cargill’s Latest Report

Introduction to the Protein Profile

In a recent unveiling, Cargill’s North American Protein business shared its annual Protein Profile report, shedding light on the evolving consumer preferences, purchasing habits in meat and poultry, and the impact of culinary technology on the protein sector. This comprehensive analysis digs into the psyche of shoppers, identifying their desires, behaviors, and the overarching trends that are setting the stage for the future of foodservice and retail protein segments.

The Evolution of Consumer Trends

Cargill’s report delineates four major trends that are poised to influence the protein industry significantly. Hans Kabat, the president of Cargill’s North American protein business, emphasized the indispensable role of protein in our diets and the report’s aim to harness Cargill’s extensive experience for a deeper understanding of consumer demands, technological breakthroughs, and proprietary market insights.

Trend 1: Embracing Minimalism

A notable shift towards smaller household sizes is changing the way consumers approach shopping, meal preparation, and consumption. With a significant rise in one or two-person households since 1970, preferences are splitting between those seeking smaller protein packages to minimize waste and control expenses, and those buying in bulk to freeze for future use. The report highlights a growing trend of forward-planning in purchasing, evidenced by the frequent freezing of chicken breasts, ground beef, pork chops, and other meats for later use.

Trend 2: Craving Convenience

As home dining continues to dominate, whether through cooking or takeout, there’s a clear trend towards simplifying mealtime. The rise of heat-and-eat meals and the increasing reliance on online grocery shopping are testaments to this trend. Technological advancements, including AI and automation, are streamlining the shopping experience, from order processing to providing personalized recipe suggestions.

Trend 3: Global Flavors Connect Cultures

The appetite for global cuisine is notably growing among Gen Z and millennial consumers, with a significant portion reporting consumption of globally-inspired foods within the last week. This inclination towards international flavors is enriching protein-centric meals and snacks, with culinary experts and foodservice professionals expanding their offerings in innovative and bold ways.

Trend 4: A New Definition of Value

Consumer food behaviors are increasingly influenced by the perceived value of food purchases, with a split between those opting for premium home-cooked meals and those seeking value through simpler dining choices. This trend underscores a personalized approach to defining value in protein, moving away from a universal standard.

Conclusion: Adapting to Change

Cargill’s Protein Profile report offers a valuable lens through which the food industry can anticipate and adapt to the dynamic consumer landscape. With insights into how households are evolving, the pursuit of convenience, the embrace of global cuisines, and the redefinition of value, stakeholders across the foodservice and retail protein sectors are equipped to navigate the complexities of today’s market.

Related: Cargill’s Ahold Delhaize Meat Acquisitions

The Protein Profile by Cargill is here.

Tyson Foods Surpasses Earnings Expectations Amid Operational Challenges

A Strong Start to the Year

On February 5, 2024, Tyson Foods, the company behind well-known brands like Jimmy Dean sausages and Ball Park hot dogs, reported a significant beat on its quarterly earnings, surpassing analysts’ expectations. The achievement was highlighted by a notable performance in its chicken business, which has seen benefits from the strategic closure of U.S. plants. This positive news briefly propelled Tyson shares to a nine-month high, with a 1.6% increase, although this was a slight pullback from earlier gains.

Operational Improvements and Challenges Ahead

Despite the optimistic earnings report, Tyson executives cautioned that the company faces ongoing operational challenges and uncertain consumer demand, exacerbated by high prices. The beef sector, Tyson’s largest unit, reported a loss due to escalating prices and a decrease in U.S. cattle supplies to the lowest level in seven decades. CEO Donnie King acknowledged the company’s efforts towards improvement but emphasized the necessity for further action.

Strategic Plant Closures to Boost Results

In a move to enhance its financial results, Tyson has closed five chicken processing plants and two beef packaging facilities over the past year and plans to close another chicken plant within the year. These closures are part of Tyson’s strategy to optimize its operational footprint, a plan that CFO John R. Tyson indicates could lead to more closures in the future.

Financial Performance Overview

For the quarter ending December 30, Tyson’s adjusted operating income fell by 9.2% to $411 million. However, the chicken unit saw a dramatic increase in adjusted income, jumping almost 150% to $192 million. Despite a slight decline in chicken prices and sales volume, the company remains cautiously optimistic about this segment.

Beef and Pork Business Dynamics

The beef business faced significant challenges, with an operating loss of $117 million, a stark contrast to the income reported in the previous year. This downturn was partly due to inventory losses linked to declining cattle futures. Conversely, Tyson’s pork business experienced a volume increase of 7.7%, although prices dropped by 8.5% due to an abundance of hog supplies.

Looking Forward

With overall adjusted earnings of 69 cents per share, beating the estimated 41 cents, and net sales rising by 0.4% to $13.32 billion, Tyson Foods has set a strong precedent for the year. However, the company navigates a complex landscape of operational adjustments, market volatility, and consumer price sensitivity. As Tyson continues to refine its operations and adapt to market demands, the industry watches closely to see how these strategies will unfold in the coming months.

Related: Why Tyson Foods is Cutting Back Production…

In a significant development within the meatpacking industry, JBS USA, a leading company based in Greeley, Colorado, has announced a settlement in a lawsuit that accused it and other major meatpacking firms of conspiring to suppress the wages of their employees. This lawsuit, which has drawn considerable attention to labor practices in the meatpacking sector, involves some of the biggest names in the industry.

The Lawsuit Unveiled

Filed in 2022 by workers from Georgia and Iowa, the lawsuit alleged that 15 of the largest beef and pork processors in the United States engaged in practices to keep the wages of meat plant workers artificially low. These practices, according to the plaintiffs, date back to the year 2000 and involve a significant portion of the industry. The complaint highlighted that the companies involved operate approximately 140 plants across the country, representing about 80% of the beef products sold in the U.S. market.

Key Defendants and Accusations

Among the defendants are some of the most prominent players in the meatpacking industry. These include JBS USA, the American branch of the Brazilian meat conglomerate JBS SA, Tyson Foods, Cargill Meat Solutions Corp., and several others. The lawsuit also named two industry consulting companies as defendants, accusing them of playing a role in the alleged wage suppression scheme.

Settlement Reached

JBS USA Food Co. has taken a step forward by reaching a settlement agreement, as indicated in a notice filed with the U.S. District Court judge in Denver earlier this week. While the specifics of the settlement are yet to be disclosed, this move signifies a willingness among the parties to resolve the dispute outside of a prolonged court battle. The details of the agreement are expected to be filed with the court in the future, providing further insight into the resolution of this case.

Implications for the Industry

This lawsuit and the ensuing settlement highlight ongoing concerns about labor practices in the meatpacking industry, an essential sector that affects millions of workers across the United States. The case sheds light on the challenges faced by employees in this industry and prompts a broader discussion about wage practices and workers’ rights. As the details of the settlement emerge, stakeholders will be watching closely to see how this case might influence labor standards and practices in the meatpacking industry and beyond.

Authored by Greg Avery for the Denver Business Journal, this report provides a comprehensive overview of a pivotal moment in the meatpacking industry, underscoring the importance of fair labor practices and the rights of workers in this critical sector of the American economy.

Related: Top 5 Meat Brands in the USA 2023

Cargill Acquires Meat Processing Facilities from Ahold Delhaize

In a strategic move to bolster its presence in the meat processing sector, US agri-food giant Cargill has acquired two meat processing facilities from retail powerhouse Ahold Delhaize. The transaction, which took place on February 7, 2024, sees Cargill expanding its production and distribution capabilities in the northeastern United States, though the financial terms of the deal remain undisclosed.

Expanding Distribution in the Northeast

The acquired facilities, located in North Kingstown, Rhode Island, and Camp Hill, Pennsylvania, are set to enhance Cargill’s distribution of supermarket case-ready beef and pork. This acquisition is part of Cargill’s strategy to widen its reach and supply to retailers beyond Ahold Delhaize stores in the region. Infinity Meat Solutions, a subsidiary of Ahold Delhaize USA, has had Cargill staff operating in both plants, reflecting a longstanding partnership between the two entities.

Strengthening Partnerships and Distribution Networks

Cargill has announced its intention to continue supplying own-label products to Ahold Delhaize stores in the northeast while also aiming to extend its case-ready meat products to new retail customers. This move is expected to leverage the existing infrastructure and workforce at the two facilities to meet the growing demand for high-quality meat products. Hans Kabat, president of Cargill’s North American protein business, expressed enthusiasm for the investment, emphasizing the anticipated benefits of continuing the partnership with Ahold Delhaize USA and reaching additional retail markets.

Industry Implications

This acquisition signifies Cargill’s commitment to expanding its footprint in the meat processing industry and its ability to adapt to changing market demands. By securing these two facilities, Cargill is poised to strengthen its supply chain efficiencies and enhance product offerings to retailers across the northeast, marking a significant step in its growth strategy within the agri-food sector.

Related: Cargill REVEAL Layers for Poultry Monitoring

Vion Announces Strategic Overhaul with Factory Closure and Sales

Netherlands Meat Producer Adjusts to Market Pressures

In a significant shift in its business strategy, Netherlands-based meat company Vion has announced plans to close one of its factories in Germany and divest itself of three others. This move comes as part of the company’s efforts to adapt to the competitive landscape and mitigate the impacts of the recent African swine fever (ASF) outbreak. Vion’s decision to streamline its operations through closures and divestments aims to bolster its position in its primary markets.

Tönnies Group Acquires Vion Facilities

In a strategic acquisition, German meat powerhouse Tönnies Group is set to take over two of Vion’s facilities. The deal includes a cattle slaughterhouse and a pre-packaged meat facility located in Altenburg, Thuringia, as well as Ahlener Fleischhandel, a ham processing plant in the Westphalia region. This expansion reflects Tönnies Group’s ambition to strengthen its footprint in the meat processing industry.

Vion to Shut Down Emstek Pig Plant

Despite efforts to secure a buyer for its pig processing plant in Emstek, Vion has been compelled to proceed with the closure of the facility. The inability to find a suitable purchaser for the plant underscores the challenges facing the meat processing sector, exacerbated by the ASF outbreak and heightened competition.

Perleberg Plant Finds a New Owner

In a separate development, Vion has successfully negotiated the sale of its pig processing plant in Perleberg to Uhlen GmbH, another player in the meat processing industry. This sale is part of Vion’s broader strategy to optimize its portfolio and focus on core areas of its business amidst evolving market dynamics.

Read: Top 10 Leading Pork Brands in the World

Consumer Focus on Health Trends

In response to the growing emphasis on health among consumers, Wayne-Sanderson Farms is adapting its product lineup and messaging strategies. David Gadd, the company’s vice president of retail sales, highlights the increasing importance of health and wellness discussions surrounding food choices. Gadd notes a shift towards a desire for a balanced approach to nutrition rather than extremes in dieting.

Wayne-Sanderson’s “It’s All Good” Campaign

Wayne-Sanderson Farms launches the “It’s All Good” campaign, aimed at assisting consumers in finding a healthy equilibrium in their eating habits. The campaign encourages consumers to move away from the extremes of strict diets and unhealthy indulgences towards making food choices that contribute to overall well-being. Sanderson Farms chicken is positioned as a pivotal component in achieving this balance, catering to both nutritional needs and comfort cravings.

Perdue’s Response to Health Trends

Perdue, recognizing the sustained focus on health among consumers, pledges to address this demand in 2024. The company unveils a range of products, including Perdue Perfect Portions All Natural, Perdue Fresh Cuts Diced, and Perdue Ground Chicken, designed to align with health-conscious consumer preferences. These products are not only promoted for their health benefits but also for their ease of preparation, catering to the increasing demand for convenient meal solutions.

Convenient and Healthy Options by Perdue

Perdue Perfect Portions offers individually wrapped, fresh cuts of chicken that cook quickly and evenly in under 10 minutes, ensuring a hassle-free cooking experience for consumers. Additionally, Perdue Fresh Cuts provides consumers with pre-cut, pan-ready chicken options, adding to the company’s commitment to convenience without compromising on freshness or nutritional value.

Read: Largest Poultry Producers in the USA

In a bid to enhance hen laying production, Cargill introduces REVEAL Layers, a cutting-edge solution poised to revolutionize poultry layer management, according to a recent press release from the company.

NIR Technology: A Non-Invasive Game-Changer

Cargill’s REVEAL Layers harnesses the power of Near InfraRed (NIR) technology, providing producers and nutritionists with instant insights into the body composition of their poultry. This innovative approach enables real-time adjustments to diets, crucial for optimizing long-term production and performance.

Addressing Fat Pad Challenges Head-On

Excessive fat pad development in laying hens has long been identified as a hurdle to sustained egg production and liver function. REVEAL Layers employs NIR light to precisely measure fat pad levels, furnishing producers with actionable data for refining diets. This not only promises to reduce feed costs but also holds the potential to elevate egg output and profitability, marking a significant advancement in supporting hen performance.

Empowering Producers with Data-Driven Decisions

Lieske van Eck, senior scientist at Cargill, emphasizes the role of REVEAL Layers in facilitating informed decisions about hen diets and egg production. By providing a comprehensive understanding of body fat dynamics, this technology contributes to a more sustainable and efficient poultry industry.

Unveiling at the 2024 International Production and Processing Expo

Cargill introduces REVEAL Layers at the prestigious International Production and Processing Expo (IPPE), underscoring its commitment to driving innovation in poultry management.

Read: Cargill 2025 Deforestation Elimination Plan