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Alaska Seafood Industry Crisis On The Horizon

Alaska’s seafood industry is currently facing a major upheaval following the announcement by Trident Seafoods that it plans to sell several of its processing plants in Alaska. This decision by the Seattle-based company, a significant player in the state’s seafood sector, includes the divestment of its assets in Kodiak, Ketchikan, Petersburg, and False Pass, as well as the South Naknek Diamond NN cannery facility and related support facilities in Chignik.

Alaskan Seafood Industry in Focus: The Vital Role of Processing Plants in the Local Economy

Kodiak’s Mayor, Pat Branson, expressed uncertainty about the future, noting that while Trident will process pollock and tanner crab in the Kodiak area for now, the long-term plans remain unclear. This development raises concerns about job losses and the impact on Kodiak’s economy, as Trident’s contributions form a substantial part of the city’s budget.

Local residents and businesses are anxious about the implications of this move. Commercial fishers like Gerry Cobban Knagin, who have relied on Trident for selling their catch, are facing uncertainty about their future market opportunities. In Petersburg, fisher Bob Martin expressed surprise at Trident’s decision to sell the local plant instead of the less frequently used Wrangell facility.

Gunnar Knapp, an economics professor emeritus, highlighted that it is too early to gauge the full impact of Trident’s decision on Alaska’s economy but predicted it would be significant. He noted the high volatility in the global seafood trade and the challenges this poses for the industry.

The Alaska Seafood Marketing Institute‘s Bruce Schactler described the situation as a crisis “years in the making,” pointing to market glut and other challenges. Mayor Branson echoed these sentiments, acknowledging the severity of the current situation and comparing it to previous economic fluctuations in the industry.

Trident, amidst these changes, has remained tight-lipped about its plans, with Vice President of Global Communications Alexis Telfer declining to comment further. This development has been a significant topic in the seafood industry, with experts and local authorities calling for awareness and preparedness in the face of this transformative event in Alaska’s seafood sector.

The Latest In The Pilgrim Pride Price Fixing Scandal

In a significant turn of events, Pilgrim’s Pride, a major player in the U.S. poultry industry, has seen its current CEO Fabio Sandri removed from a lawsuit filed by the company’s shareholders. This development is part of an ongoing legal saga that began in 2016, revolving around allegations of price-fixing in the chicken market.

Unraveling the Feathers of Controversy: Pilgrim’s Pride in the Throes of a Price-Fixing Legal Battle

The backstory of this case dates back to 2008 when Pilgrim’s Pride, along with Tyson and Sanderson Farms, was accused of coordinating broiler chicken prices. This collusion, instead of healthy market competition, led to artificially inflated prices. These three companies are major suppliers, collectively responsible for about half of the chicken consumed in the U.S.

Investor Patrick Hogan initiated a class-action lawsuit against Pilgrim’s Pride in 2016. Hogan accused the company of deceiving investors through public statements that boasted about their competitive prowess and record profits, while in reality, these achievements were allegedly the result of the price-fixing scheme.

The plot thickened when Pilgrim’s Pride faced criminal charges and, in 2021, pleaded guilty to the accusations, resulting in a $107 million fine to the Department of Justice. This guilty plea not only impacted the company’s financial standing but also shook investor confidence.

The legal journey saw its ups and downs, with Senior U.S. District Judge R. Brooke Jackson initially dismissing the case in 2018, only to allow an amended complaint later. The shareholders’ persistence paid off when they managed to keep the lawsuit alive despite Pilgrim’s Pride’s efforts to dismiss it.

The latest decision by Judge Jackson, detailed in a 15-page order, has led to the exclusion of Fabio Sandri, Pilgrim’s Pride’s former CFO and current CEO, from the lawsuit. However, the claims against the company and its former CEO, William Lovette, remain active. Interestingly, Lovette is now at the helm of C.F. Sauer, a Virginia-based spice company.

Although both Lovette and Sandri were not found guilty of criminal charges in July 2022, the legal proceedings highlighted the complexity of the case, including deadlocked juries and mistrials.

This ongoing legal battle not only highlights the intricacies of corporate governance and ethics in the food industry but also underscores the significant impact such practices can have on market prices, investor trust, and corporate reputation. As the case continues to unfold, it remains a pivotal example of the challenges and responsibilities faced by major players in the food industry.

Why are chicken farmers suing Tyson Foods?

A group of chicken farmers from Bloomfield, Missouri, are taking legal action against Tyson Foods. They allege that Tyson breached their contracts by shutting down their Dexter, Missouri processing plant. The lawsuit was filed on December 22nd at the Stoddard County Circuit Court.

The farmers are claiming damages of $25,000 and more, arguing that Tyson had known since November 2021 about the impending closure of the Dexter facility but still encouraged the farmers to invest more and take on debts. Tyson’s business model involved owning chickens at every stage – from hatching to slaughter – at the Dexter complex, with the farmers contracted to raise them.

These farmers, under Tyson’s directives, managed how the chickens were raised, including the use of specific equipment and supplies. They believed their partnership with Tyson would continue as long as they adhered to Tyson’s requirements. However, after over two decades in operation, Tyson announced in August 2023 that the Dexter plant would close by October of the same year.

Following the closure, Tyson reached a deal with Cal-Maine Foods, an egg producer. Cal-Maine intends to transform the former poultry processing facility into an egg grading operation and has plans to work with some of Tyson’s former contract farmers to shift their operations towards producing cage-free, free-range, or pasture-raised eggs for Cal-Maine.

Egg Exports From Brazil Double!

In 2023, Brazil’s egg exports dramatically increased, with a 99.9% rise in November alone, totaling 788 tons. From January to November, exports reached 24.5 thousand tons, a 170.5% increase from the previous year, and revenue soared to $60.7 million. Japan emerged as the leading importer, with significant growth in other Asian markets as well.

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Brazil’s Egg Exports Skyrocket with Japan Leading as Top Importer

In November, Brazil saw a remarkable 99.9% increase in egg exports compared to the same month in the previous year, reaching 788 tons. This significant growth is reported by the Brazilian Animal Protein Association (ABPA). The revenue from these exports also saw a substantial rise, reaching US$1,999 million, which is 36.4% higher than the US$1,465 million recorded in 2022.

From January to November, Brazil’s egg exports amounted to 24.5 thousand tons, surpassing the previous year’s total of 9,043 thousand tons by 170.5%. The revenue for this period reached US$60.7 million, a 187.4% increase over the US$21,122 million recorded in the first eleven months of 2022.

Japan is the top importer of Brazilian eggs this year, with 10,363 thousand tons, a staggering 947.9% increase over the previous year. Taiwan and Chile follow, with Taiwan importing 5,387 thousand tons (a new entry compared to the previous year) and Chile importing 2,584 thousand tons, which is 1,208% higher than in 2022.

The president of ABPA, Ricardo Santin, notes Chile’s significant rise in egg imports from Brazil, making it the third main destination and the top importer in recent monthly data. He anticipates that exports to Chile and other Asian destinations will continue to grow, maintaining volumes significantly higher than in the past decade.

What are the benefits and concerns around Smithfield’s Chinese Ownership?

The acquisition of Smithfield Foods, a major U.S. pork producer, by China’s WH Group (formerly known as Shuanghui Group) in 2013 for $4.72 billion, has had a significant impact. This deal, marking the largest Chinese acquisition of an American company at the time, brought various benefits and drawbacks, both economically and in terms of national security concerns. Here’s a detailed analysis:

WH Group’s Acquisition of Smithfield Foods: A Landmark Deal in Global Trade Balancing Economic Growth and National Concerns

History and Background

Smithfield Foods’ Origin: Founded in 1936 in Virginia, Smithfield Foods grew to become the world’s largest pork producer.
Acquisition: The WH Group purchased Smithfield Foods in 2013, which included 146,000 acres of land, making it one of the largest overseas owners of American farmland.
Economic Context: At the time of the sale, China was one of the largest pork importers, despite having a substantial pig population. The Chinese consumed significantly more pork per capita compared to Americans.

Read now: Smithfield Foods cuts farmers contracts

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Benefits

Economic Growth: The acquisition offered Smithfield an entry into the growing Chinese pork market. ShuangHui increased capital spending at Smithfield by 24%, which helped pay down its debt and improve its credit rating. This also led to more than 1,000 new jobs in Virginia.
Global Expansion: Smithfield began selling its pork directly to Chinese consumers online, opening new markets and revenue streams.
Operational Continuity: Post-merger, the company focused on maintaining continuity and trust with U.S. executives, union leaders, and local communities.

Drawbacks

National Security Concerns: The extensive U.S. farmland ownership by a Chinese corporation raised concerns about potential implications for U.S. national security. However, only a small percentage of U.S. farmland is foreign-owned, and Chinese ownership is a minor portion of that.
Image and Brand Risks: The acquisition posed a risk to Smithfield’s “all-American” image, and potential negative associations with environmental scandals in China’s food industry.
Employee Welfare: There were concerns about whether the new Chinese ownership would adhere to Smithfield’s labor standards, including minimum working hours and retirement benefits.
Economic Implications: U.S. politicians and unions were worried about the transfer of technology to China and the potential for a flooded U.S. market with cheaper pork products, which could harm the U.S. pork industry.
Environmental and Legal Issues: Smithfield has faced controversies, such as price-fixing allegations and pollution issues, further complicating its public image.

Conclusion

The acquisition of Smithfield Foods by the WH Group reflects the complexities of global trade and foreign investment. While it brought economic benefits and expansion opportunities for Smithfield, it also raised concerns about national security, employee welfare, and the potential impact on the U.S. pork industry. The success of such international mergers depends on carefully balancing these various aspects to ensure a positive outcome for all stakeholders.

Read now: Smithfield Exit Shakes Up Utah Farmers’ Future

Why Marfrig Became The Majority Shareholder of BRF

Marfrig Global Foods S.A., a prominent player in the food processing industry, has solidified its position by becoming the majority shareholder in BRF S.A. This strategic move, marked by a significant increase in equity interest, was detailed in a securities filing by BRF dated December 28. Marfrig now holds a commanding 50.06% share in BRF, through its possession of 842,165,702 common shares and American Depositary Receipts (ADRs), encapsulating more than half of BRF’s total issued and outstanding capital.

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Despite this substantial acquisition, Marfrig has publicly announced its intention to maintain the status quo regarding BRF’s shareholding and administrative structures. In a statement, Marfrig clarified that it does not intend to make changes to the current management or the overall corporate governance of BRF. Additionally, it assured stakeholders that it has not entered into any contracts aimed at controlling voting rights or managing the buying and selling of BRF’s securities. This approach suggests Marfrig’s confidence in BRF’s existing operational framework and its commitment to stability in the company’s leadership and strategic direction.

The journey to acquiring majority ownership was gradual and strategically executed by Marfrig. It began in May 2021, when Marfrig first made a significant investment in BRF by purchasing a 24.23% stake. Over the next couple of years, Marfrig progressively increased its share, signaling a strong commitment and belief in BRF’s potential. By September 2023, Marfrig had increased its stake to 40.05%, holding a total of 673,879,961 common shares, setting the stage for the eventual majority ownership.

Interestingly, this consolidation in the food processing industry comes after previous speculations about a potential merger between Marfrig and BRF. In 2019, talks of a merger were in the air, hinting at a significant realignment within the sector. However, the merger did not materialize, and the companies continued their separate paths until this recent development.

The acquisition of a majority stake in BRF by Marfrig marks a significant shift in the dynamics of the food processing industry, especially in Brazil, where both companies are based. This move could have various implications, ranging from increased market influence and financial strength for Marfrig to potential strategic re-alignments in the industry. Moreover, it reflects the ongoing trends of consolidation in global food markets, as companies strive to enhance their competitive edge and expand their market footprint.

Marfrig Global Foods S.A.’s decision to become the majority shareholder of BRF S.A. could be motivated by several strategic business objectives:

Market Expansion and Diversification: By increasing its stake in BRF, Marfrig can expand its market presence and diversify its product offerings. Both companies are major players in the food processing industry, and this move could allow Marfrig to access new markets or enhance its presence in existing ones.
Operational Synergies: The acquisition could create operational synergies between the two companies. These synergies might include cost savings, improved efficiency, shared resources, and knowledge transfer, leading to enhanced productivity and profitability.
Increased Influence and Control: As a majority shareholder, Marfrig gains significant influence over BRF’s strategic decisions. This control can be crucial in steering the company in a direction that aligns with Marfrig’s broader business goals.
Financial Performance and Value Creation: Marfrig might foresee a potential for improving the financial performance of BRF, leading to increased shareholder value. By leveraging its expertise and resources, Marfrig could aim to enhance BRF’s profitability and overall market value.
Risk Mitigation: Diversifying its investment portfolio can also be a way for Marfrig to spread its risks. In volatile markets, having a diverse range of investments can safeguard a company against sector-specific downturns.
Responding to Industry Trends: The move could be a response to consolidation trends in the global food industry. By acquiring a larger stake in BRF, Marfrig positions itself as a more formidable competitor in an increasingly competitive and globalized market.

Each of these reasons reflects a strategic perspective, aimed at strengthening Marfrig’s market position, financial stability, and future growth prospects.

In conclusion, Marfrig’s acquisition of a majority stake in BRF is a notable development in the food processing industry. It not only changes the ownership landscape of these companies but also sets a new direction for their future growth and strategic initiatives. This move is a testament to the dynamic nature of the industry and the continuous evolution of corporate strategies in response to market opportunities and challenges.

Read now: Brazil’s Top 10 Largest Meat Supplier Powerhouses

How Did JBS Become The World’s Largest Meat Producer?

JBS S.A.’s ascent to becoming the world leader in the meat industry is marked by strategic acquisitions, significant investments, and expansion across various segments and geographies.

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Here’s a more detailed expansion of JBS’s journey:

Founding and Early Expansion: Founded in 1953 by José Batista Sobrinho in Anápolis, Brazil, JBS began as a slaughtering business. Expansion accelerated with the establishment of Brazil’s new capital, Brasilia, which opened a new market for the company. By the late 1960s and 1980s, JBS expanded within Brazil, acquiring other meat processing companies.
Going Public and Major Investments: In 2007, JBS became a publicly held company and received significant investment from the Brazilian Development Bank (BNDES), propelling its expansion.
International Acquisitions: JBS’s international growth was marked by several key acquisitions:
- In 2007, JBS acquired U.S. firm Swift & Company, entering the pork market and becoming the third-largest producer and processor of pork in the U.S..
- The company further strengthened its position by acquiring Smithfield Foods’ beef business and 64% of Pilgrim’s Pride in 2010, establishing itself in the chicken production industry.
- In 2009, JBS acquired Grupo Bertin in Brazil, consolidating its status as the largest beef producer globally.
- In 2015, JBS expanded its U.S. pork business with the acquisition of Cargill Inc.’s pork operations.
Reorganization and IPO: In 2016, JBS announced a reorganization plan involving an IPO in the United States for its international operations, signaling its presence on five continents.
Controversies and Compliance Issues: Despite its success, JBS faced several controversies, including accusations of purchasing cattle from illegally deforested Amazon land and involvement in bribery scandals. These issues led to investigations and fines but did not significantly halt its growth.
Diversification and Future Endeavors: JBS continues to diversify its operations. Notably, in 2021, the company invested $100 million in cultured meat through BioTech Foods, with plans to enter the market by 2024.

Conclusion

JBS’s journey to becoming a global leader in the meat industry is characterized by aggressive expansion strategies, bolstered by significant financial support and acquisitions, alongside navigating through various environmental and legal challenges.

Read Now: Who is Wesley Batista Filho? JBS’s new CEO

Top 10 Global Leaders in Food Packaging for 2023: Innovating for a Sustainable Future

The top food packaging companies in the world as of 2023 are notable for their diverse range of operations, global presence, and recent advancements in sustainable packaging solutions. Here is a detailed report on the top 10 food packaging companies:

Top 10 Global Leaders in Food Packaging for 2023:

Amcor plc: Founded in 1896 and headquartered in Melbourne, Australia, Amcor is a global leader in responsible packaging solutions, offering flexible packaging, specialty cartons, rigid containers, and more. They have a significant presence in 40 countries with over 230 manufacturing units. In December 2022, Amcor opened a new manufacturing plant in China, focusing on automated food packaging solutions.
Berry Global: Established in 1967 and based in Indiana, U.S., Berry Global operates in health, hygiene, consumer packaging, and engineered materials. The company introduced thermoformed, injection stretch blow molded food packs manufactured in recycled PET in August 2022.
Sealed Air Corp: Founded in 1960 and headquartered in North Carolina, U.S., they are known for Bubble Wrap and Cryovac food packaging. They offer easy-open packaging solutions, films, trays, and food packaging equipment systems.
Coveris: Based in Vienna, Austria, and founded in 2013, Coveris manufactures paper and plastic-based flexible packaging. They have around 29 facilities across Europe and Egypt. In January 2022, they partnered with UPM Rafkatac for new label and recycling solutions.
DS Smith: Founded in 1940 and headquartered in England, U.K., DS Smith offers fiber-based food packaging and operates at 37 sites. They partnered with Veetee in July 2022 to create a fully recyclable rice box.
Smurfit Kappa Group Plc: Established in 1934 and based in Dublin, Ireland, they produce corrugated packaging, ‘bag in box,’ and containerboard. In January 2022, they introduced sustainable packaging solutions for fast food.
Tetra Pak International: Founded in 1951 in Switzerland, Tetra Pak delivers filling machines, processing systems for dairy, and beverages. In February 2023, they commenced research on fiber-based substantial food packaging.
Mondi Inc: Established in 1967 and headquartered in the U.K., Mondi is a leader in sustainable packaging and paper. In March 2023, they collaborated with ATS-Tanner to create a unique paper band for packaging, aiming to reduce plastic usage.
Sonoco: Founded in 1899 and based in Carolina, U.S., Sonoco is a major supplier of diversified consumer packaging and the world’s largest producer of composite cans. In May 2022, they reported successful results from a recycling trial with Sustana and Kellogg’s.
WestRock: Founded in 2015 and headquartered in Georgia, U.S., WestRock specializes in sustainable, fiber-based packaging solutions. They have a presence in about 300 production facilities globally.

It’s noteworthy that another source lists a slightly different ranking, which includes International Paper Company, Ball Corp, Oji Holdings Corp, Stora Enso Oyj, and UPM-Kymmene Corp, indicating the dynamic and competitive nature of the industry.

These companies are driving innovation and sustainability in the packaging sector, reflecting the industry’s ongoing evolution to meet environmental challenges and consumer demands.

Read: Top 10 Meat Processing Equipment Titans Revealed

Who is Gregg Uecker Perdue Farms New Chief Supply Chain and Operations Officer

Gregg Uecker has had a notable and successful career in the meat and poultry industry, particularly highlighted by his recent appointment as the Chief Supply Chain and Operations Officer at Perdue Farms. Before joining Perdue, Uecker amassed a wealth of experience during his time at CJ Schwan’s and Tyson Foods.

At CJ Schwan’s, Uecker held the position of Executive Vice President of the Global Supply Chain. However, it was his extensive tenure at Tyson Foods that particularly stands out. Over more than three decades with Tyson, Uecker held various senior leadership roles, such as Senior Vice President of Operations and Supply Chain for Prepared Foods, Senior Vice President of Supply Chain Strategy, and Vice President of Operations, among others. His responsibilities covered a wide range of areas including plant operations, live production, transportation and warehousing, customer service, food safety, quality assurance, procurement, and engineering.

Uecker’s career has been characterized by rapid promotions and a consistent rise through the ranks, demonstrating his proficiency and expertise in operational management and supply chain agility. His approach has always been proactive, focusing on continuous improvement, lean manufacturing techniques, and problem-solving. This was exemplified in his involvement with various projects, including groundbreaking work in automation, data collection, and maintenance management. His innovative mindset was particularly noted in his role at Tyson Foods, where he contributed to the design and development of a highly automated and technologically advanced bacon processing plant in Bowling Green, Kentucky.

Moreover, Uecker’s educational background in chemistry with an emphasis on business administration provided him with a unique perspective and approach to problem-solving and operational excellence. He was recognized for his achievements and leadership in the industry when he was named MEAT+POULTRY’s Operations Executive of the Year in 2022.

In summary, Gregg Uecker’s career trajectory is marked by significant contributions to operational excellence and innovation in the meat and poultry industry, making him a respected leader and a valuable asset to Perdue Farms.

Who is Julie Katigan The New Executive Vice President of Perdue Farms?

Julie Katigan has recently been promoted to a pivotal role at Perdue Farms, serving as the Executive Vice President and Chief Human Resources Officer. This promotion, announced in December 2023, marks a significant step in her career at Perdue Farms. Katigan joined the company in May 2022 as the Senior Vice President of Human Resources. Her promotion reflects the company’s commitment to talent acquisition, diversity, inclusion, and employee well-being, as she is responsible for overseeing all aspects of Perdue Farms’ people strategies.

Before joining Perdue, Katigan held the position of Chief Human Resources Officer at James Hardie Building Products. Additionally, she has a rich background in senior-level leadership roles at global business units and functional levels with various companies, including Colfax Corporation, Electrolux, Mead Johnson Nutrition, and Ford Motor Company. Her extensive experience and expertise are expected to significantly contribute to developing and implementing strategies that foster talent, shape organizational culture, and focus on the well-being of associates at Perdue Farms.

Perdue Farms is a fourth-generation, family-owned U.S. company in the food and agricultural sector. The company is known for its commitment to responsible food and agriculture practices, including a no-antibiotics-ever approach in poultry and livestock and leading in organic chicken and beef products. Katigan’s promotion to Executive Vice President and Chief Human Resources Officer is aligned with Perdue Farms’ long-standing values and strategic direction, focusing on quality, sustainability, and ethical practices within the company.