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Weekly Overview: Poultry Companies in the News

25 July 2013

ANALYSIS - The poultry meat business is a tricky one and high feed prices combined with disease challenges have taken their toll on many a bottom line in recent months. Now, an early end to poultry meat export payment for EU companies is hitting French companies particularly hard. Bachoco of Mexico is reporting positive results despite bird flu outbreaks, while Canada's Maple Leaf has sold off its live turkey operations. Jamaica Broilers is reportedly acquiring an unnamed US egg company.

The unexpectedly premature withdrawal of export restitutions on third-country poultry sales this week has left French poultry groups, Doux and Tilly-Sabco, with substantial gaps to plug in their accounts.

"When our recovery plan was announced in October last year, we were working on the basis of a January 2015 deadline," a Doux spokesman told ThePoultrySite.

With restitutions worth €108 per tonne at the start of the year, the poultry group was already ahead of its target schedule for the subsidy phase-out. "At the moment, they are worth €20 million over a year, which leaves a big hole,” the spokesman added.

The companies warned in a joint statement: "The Euro exchange rate is at an historical high, while the Brazilian Real has been strongly devalued since the beginning of the year, against a backdrop of low poultry prices around the world."

The French minister has already been working in the corridors of Brussels, urging European partners and members of the Commission to retain export restitutions until 2015, without success.

Sales volumes by the poultry division of Russian integrated meat and feed processor, Cherkizovo Group, for the period January to June 2013 increased by four per cent year-on-year.

Prices increased by four per cent year-on-year in ruble terms and by three per cent in US dollar terms for the half-year but second-quarter prices were below the previous quarter.

From Brazil, the Tyson subsidiary reports that Saudi Arabia is currently the only export market for its 'green' chicken, raised without antibiotics or animal protein in the diet.

Tyson Brazil, a subsidiary of Tyson Foods, has been exporting green chicken from its Brazilian unit to Saudi Arabia since March this year through a partnership with Gallus Avícola, a hatchery in the state of Santa Catarina.

From Mexico, Chief Executive Officer of Industrias Bachoco, has stated in his company's quarterly report: "Seasonally, the second quarter is usually the strongest quarter of the year, and it seems this quarter will follow that trend." Net sales were up 12 per cent, while the cost of sales was down by a little more than one per cent.

Rodolfo Ramos Arvizu commented: "After a complicated start to the year, the company was able to surpass various difficulties and achieve positive results. All this was due to a strict control of expenses and productivity improvements, resulting from a close surveillance of procedures and constant implementation of processes and technologies that make us more productive day to day.

"The company's chicken sales volume decreased this quarter, as a consequence of the outbreak of avian flu that affected our breeding farms in the state of Guanajuato; at this time, this problem is under control but not totally eradicated, and our production is in the process of recovering normalised levels.

Maple Leaf Foods of Canada has announced definitive agreements to sell its commercial turkey farms to Ernald Enterprises Limited and its breeder farms and hatchery operation to Cuddy Farms Limited.

In the US, a group led by a California auction company cast the winning bid worth US$5.36 million in a bankruptcy auction for the North Carolina assets of chicken processor, Townsend.

Turning our attention to the egg industry, Cal-Maine Foods of the US has reached an agreement in principle to settle all direct purchaser class claims against it at a reported cost of $28 million.

Jamaica Broilers Group Limited is reported to be acquiring a US egg company but it has held back on disclosing the acquisition target until the deal closes around the end of August.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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