Smithfield share sale cancelled

The Chinese company that bought Smithfield Foods Inc. has cancelled its plans to sell shares on stock markets in Asia and the United States.

“In light of deteriorating market conditions and recent excessive market volatility, the company, having consulted the joint sponsors, has decided that the global offering will not proceed at this time,” WH Group said in a statement issued today.

I guess investors don't have a whole lot of confidence in the Chinese company.

The company initially planned to raise about $5.3 billion through an Initial Public Offering (IPO) of shares.

Earlier this month it scaled that back to $1.9 billion.

The company also took flack from investors when it was revealed that the executive who arranged the purchase of Smithfield was due to get $600 million worth of shares.

Smithfield is the world’s largest hog producer and pork packer.

At one time it owned Schneider Corp. of Kitchener and Saskatoon, but sold to Maple Leaf Foods Inc.

Feds give $100,000 to egg agency

The federal government is giving more than $100,000 to the Egg Farmers of Canada, the national agency that runs supply management for egg farmers.

That blasts another hole in the claim of the marketing board fraternity that it doesn't get any government subsidies.

Agriculture Minister Gerry Ritz said the money is to  “integrate its existing assurance systems into a single system that will be known as the National Quality Code for eggs.”

Why the national agency needs taxpayer subsidies to that kind of job is rather hard to fathom.

Ritz did not say how much more than $100,000 the government is giving the agency. I guess it could be anything.

“The streamlined National Quality Code program will provide egg producers and graders with an all-in-one certification program that addresses food safety, traceability and animal care,” the government said in its news release.

“Once implemented, the code could enhance the competitiveness of the poultry sector by strengthening its capacity to make credible and verifiable claims.”

Now wouldn't that be a remarkable and welcome change, especially here in Ontario where random-sample audits reveal that packaging claiming the eggs in the carton are Grade A is, well, simply not true.

                       

Council has pullet inquiry report

The two directors of Farm Products Council of Canada who conducted an inquiry into the application to impose supply management on the pullet industry have turned in their report.

It contains no recommendations. It's now up to the council to decide what it will recommend to Agriculture Minister Gerry Ritz.

Brent Montgomery and John Griffin were appointed to conduct the inquiry, including public hearings, after the Pullet Growers of Canada filed an application to set up national supply management in July, 2012.

Montgomery and Griffin report that they received 84 submissions and 23 applications to make appearances at public hearings that were held last spring in Ottawa and Winnipeg.

They report that Pullet Growers of Canada claims 554 members from Ontario, Quebec, New Brunswick, Nova Scotia and Manitoba.

Alberta, Saskatchewan and Prince Edward Island provided evidence that they support the application. British Columbia took no stand, noting that its pullet producers are satisfied with the prices they are paid and that t the public has reached the limit on what it’s willing to pay for eggs.

A national agency for pullet growers would increase pullet prices to the cost of production, as determined by a formula based on producer surveys. Any increase would automatically increase the price of eggs because egg producers have national supply management with prices reflecting the cost of production.

The data in the report indicates there are only 32 independent pullet growers in Ontario and 36 in Quebec – i.e. pullet growers who own no egg quota.

Those with egg quota account for 68 per cent of pullet production in Ontario and 56 per cent in Quebec.

The Quebec pullet industry is controlled by feed mills that contract for pullet production and handle the placement of those pullets into egg farms. The feed mills take a commission.

The proposal for a national agency calls for a levy of five cents per pullet and estimates it would apply to 15 million pullets per year and therefore raise $750,000 per year.

The business plan estimates annual expenses of $500,000, leaving $250,000 to build reserves.

The Pullet Growers of Canada told Montgomery and Griffin that they have consulted the federal agriculture and trade departments about gaining import controls, but they have no plans to present at this time.

There are not many imports of pullets, but there are considerably imports of chicks and hatching eggs. In British Columbia, for example, about half of the chicks and hatching eggs come from the U.S.

The proposal says that if Pullet Growers of Canada is approved as a national supply management agency, it will operate on the principle of no value for quota, based on the Quebec example.

It’s not clear how either Quebec or a national agency could operate a no-value-for-quota policy since it’s obvious that prices that cover the full cost of production, plus providing a “reasonable” return for growers, would have considerable value.

That’s a conclusion that every supply-management marketing board in Canada has reached, prompting them to give up any notion of a no-value-for-quota policy.

Iron in meat linked to heart disease

New research points to a type of iron found only in meat as a possible cause of heart disease.

What the research has found is that this type of iron increases the risk of heart disease by 57 per cent.

The study was done by Jacob Hunnicut, a graduate student in the School of Public Health at Indianna University.

It will probably prompt some people to avoid eating liver, often promoted as an excellent source of iron. I wish I had known about this when my mother was refusing to allow me to eat dessert unless and until I ate my liver.

Hunnicut and faculty members examined 21 previously-published studies and data involving 292,454 participants during an average 10.2 years of follow-up.

Hunnicutt said the link between iron intake, body iron stores and coronary heart disease has been debated for decades by researchers, with epidemiological studies providing inconsistent findings.

Their new research looked at total iron consumption as well as intake of heme and non-heme iron, which comes from plants and other meat sources.

Only heme iron was found to be linked with cornonary heart disease.

The study has been published online in the Journal of Nutrition.

PED shows up in Manitoba

More samples have tested positive for Porcine Epidemic Diarrhea virus in Manitoba, but it’s not yet clear whether more herds have been infected.

The tests are turning up at “high-traffic sites” which have not been publicly identified. They could be assembly yards, trucking firms, packing plants or auction barns.

In one recent case, pigs tested positive, but veterinarians think they may have picked up the virus at a high-traffic site.

Infection at a high-traffic site could be trucks or manure returning from infected places in the United States or Ontario, not from an infected farm in Manitoba.

So far Manitoba has had only one official confirmation of the disease on a farm. Quebec and Nova Scotia also have single cases confirmed, but Quebec has also had cases of PED identified at a packing plant.

Ontario is the Canadian hot spot with 57 infected farms. The initial outbreaks which began in late January are believed to be from infected feed ingredient imported from the U.S.

Then there has been spread to other farms via traffic, such as trucks and people carrying manure.

Three more Ontario cases have been reported by the Ontario Ministry of Agriculture and Food, bringing the total to 57.

The three latest cases are a finisher barn in Huron County, a nursery in TBC  and a farrow-to-finish barn in Elgin County.

Ontario is also finding PED at high-traffic sites which are not included in the totals reported by OMAF.

Japan and U.S. strike trade deal

There are reports by a Japanese newspaper that a trade deal has been struck with the United States.

No details are available, but the Japanese newspaper says beef import tariffs will be cut from 38 per cent to about nine per cent over a 20-year period.

Pork is also part of the deal.

Canada has been negotiating a free-trade deal with Japan, but the U.S. has beaten the Canadians to the punch.

The deal between Japan and the U.S. moves the Trans-Pacific Partnership negotiations closer to its goal of a trade deal for a broader group of countries, including Australia, New Zealand and many Pacific-rim countries.

Canada’s supply-managed poultry and dairy sectors are nervous about these negotiations because they are likely to force a reduction in Canadian tariffs that are crucial the marketing boards’ ability to keep charging relatively high prices.

Six U.S. senators push for PED vaccine

Six senators have signed a letter, asking for increased funding to develop a vaccine for Porcine Epidemic Diarrhea virus.

They say the virus has already claimed about six million piglets in the United States since it first showed up a year ago.

“If PEDv continues to spread at its current rate, many producers could struggle to remain in business,” the senators wrote.

They also drew attention to other new diseases, such as swine delta corona virus, that are hitting hog farms.

The letter is signed by six Democratic Party senators Kay Hagan from North Carolina, Sherrod Brown from Ohio, Al Franken from Minnesota, Debbie Stabenow from Michigan, Joe Donnelly from Indianna and Amy Klobuchar from Minnesota. The Democrats hold a majority in the Senate.

London Poultry Show sets records

The London Poultry Show set a couple of records this year, including 170 exhibitors and attendance of 3,951 people.

It’s Canada’s largest poultry-industry show and at 57 years, one of the longest-running trade shows.

“The first day had a great turnout  of 2,485 people,” said Keith Robbins, who recently moved over from the Ontario Pork marketing board to be executive directors of the Poultry Industry Council.

“Great weather, a late start to the season to get on the land and an excellent opportunity to see new equipment and talk with industry representatives all led to a very successful show,” Robbins said. 

The show is organized by the Poultry Industry Council in partnership with the Western District and Farm Credit Canada.

Weston gets $1 million for cookie plant

It feels like my pocket has been picked by one of the province's richest families.

The Ontario government has handed $1 million to the George Weston Ltd. to invest in Colonial Cookies of Cambridge.

I find this totally frustrating. It's the Weston Group that pushed Colonial into bankruptcy after it lost $6.8 million in 2010.

Loblaws supermarket chain squeezed Colonial so hard on cookies for its President's Choice line and other products that the company lost $6.8 million in 2010 and was forced into bankruptcy.

So the Weston Group bought Colonial out of bankruptcy in February, 2011.

It makes cookies for Loblaws, but employs only about 200 now, down from 370 when Colonial was healthy.

Now George Weston Ltd. is investing $12 million to open a new line that will triple production. It says employment will increase, but doesn't even hint at how many might be hired.

Meanwhile the Weston Group has found all kinds of money to buy the Shopper's Drug Mart chain, increasing its clout over suppliers in the food business.

And as a taxpayer, I am chipping in for the $1 million gifted to these billionaires. 

It's not right. It's not fair. And this kind of corporate welfare needs to stop.

Look what pig poop researchers have found

You can make asphalt and roof shingles from hog manure.

You can make biocrude oil that could be blended, just as ethanol now is, into gasoline.

You can use hog manure to generate electricity or heat or both.

But you can’t get rid of the offensive odours. Not yet, but researchers are working on it.

In fact, tens of millions of dollars have been invested in research looking for ways to curb hog manure odours and avert groundwater pollution, and that’s in only one state – North Carolina.

The issue was on the list for the Ontario Agricultural Research Institute about 20 years ago when the hog industry was in the midst of a barn-building boom and local residents were fighting to keep them as far from their homes as possible.

At the time, I was a director on ARIO and I suggested they let the U.S. take the lead and instead invest about $25,000 supporting a master's-degree at Wilfrid Laurier University in Waterloo to do a community-development project to determine what hog farmers could do to get along with their neighbours.

It wasn't a typical approach to agricultural research and it wasn't partnering with the University of Guelph, so good-old-boys network dismissed that idea and invested in copy-cat approaches being tried in the U.S.

Despite the millions spent so far, little has changed for odour-fighting neighbours of hog farms in North Carolina. Or Ontario. The farms still raise a stink - literal and political.

At the University of Illinois, Yuanghui Shang and Lance Schideman are producing synthetic oil from hog manure.

“We first convert swine manure into crude oil in a hydrothermal liquefaction reactor,” Schideman says.

“There is a very strong wastewater that comes off that process. It contains nutrients that can be used to grow algae that simultaneously clean the water.

“Lately, we’ve added low-cost, bioregenerable adsorbents into the system that allow us to grow additional bacterial biomass and further improve effluent water quality.

“Our recent research, a combination of experimental work and some computer modeling, has shown that we can reuse the nutrients multiple times and thus amplify biofuel production from waste feedstocks,” he said.

“If we start with a particular waste stream that has one ton of volatile solids in it, we might be able to produce three, five or even 10 tons of algal and bacterial biomass. This new biomass is then recycled back into the biofuel production process.

“It can also clean the water with the goal of making it suitable for environmental discharge or reuse in some other application. So we get more bioenergy and more clean water resources – both good things in the long run,” Schideman said.

“Right now, your gasoline has a certain amount of ethanol mixed in it. We are looking at other blending arrangements where light fractions of this oil could go directly into an existing fuel matrix.”

Hog manure has been used to produce a bio-binder that can be used to make everything from asphalt to roofing shingles.

Elham (Ellie) Fini, a civil engineer at North Carolina A&T State University, holds a patent on her invention and has started a company, Bio-Adhesive Alliance Inc.

There’s no indication yet that her invention is a money maker for either her company or hog farmers.

Her research was funded by the National Science Foundation.

None of this addresses the odour issue.

“For the people out there in the communities, nothing is really happening,” said Joe Rudek, a senior scientist with the Environmental Defense Fund in the U.S. “They haven’t really seen any changes in air or water quality.”

Nearly every one of about 2,100 hog farms in North Carolina still dumps hog manure into outdoor lagoons, then sprays the manure on fields.

The problems with odor, runoff from the spray fields and spills from lagoons still plague Eastern North Carolina, where most of the farms are located.

The number of lagoons, more than 4,000, is little changed since 1997.

Don Webb, a former hog farmer from Wilson County who became one of the earliest, and feistiest, community activists on the topic, said the years had simply worn down many of those who had been battling hog-waste issues.

“I’ve been fighting this myself for 25 years, and after all these years, we’re nowhere,” said Webb, 72.

“These companies, they’ve made millions of dollars while stalling for time, and they’re still able to pump feces and urine into those open holes just like they always have.”

Meanwhile, the conservative takeover of the legislature, he said, has resulted in cuts and reorganization among state regulators and reduced scrutiny of hog operations. In 2011, for example, the state stopped performing one of what had been two annual inspections at swine farms.

Deborah Johnson, executive director of the N.C. Pork Council, said pork producers would embrace a cleaner, cost-effective technology.

“If there is something out there, a (technology) that is affordable to growers and qualifies for permitting by the state, we would see growers that will adopt it,” she said.

The issue got so hot in 1997 that the state imposed a temporary moratorium on new or expanded hog farms that used the lagoon-and-spray method.

In 2000, Attorney General Mike Easley negotiated the Smithfield Agreement with the state’s main pork producers in which they agreed to several concessions, including paying $50 million over 25 years for environmental projects.

They also funded a $17.1 million research quest for a new method of treating hog waste.

This new method was to “substantially eliminate” pollutants and odor and completely stop waste from leaking into streams or groundwater.

The companies agreed that if one could be found that was affordable, they would install it on farms they own and also would help install it on farms they hired to raise hogs.

Researchers have found ways to answer the environmental issues, but they’re too expensive. There are specific cost targets set for the researchers to hit.

Julian Barham is using a methane digester to handle his hog manure, supplementing the mixture with food-company waste. He generates electricity and heat for the digester.

Another system removes ammonia. Some is used to grow greenhouse vegetables.

“When I got started in hogs, I had 200 sows and could make a pretty decent living,” he said. “Now I’ve got 4,000 and I struggle.”

The greenhouse cucumbers aren’t worth much, so the farm has to produce them in large quantity, too.

“There’s just no big, easy money in any one part of it, and you really need to wring every dime out of everything,” Barham said.

Several counties away, near Mount Olive, the other of the most promising technologies is set up on a sprawling farm owned by the Jernigan family that produces not just hogs, but also cattle, turkeys and row crops such as cotton.

It’s basically a series of lagoons similar to a municipal sewage treatment system.

It easily meets the environmental standards, and it also produces a sanitary dry solid that is composted by Terra Blue Inc. into high-quality soil additives for gardening and landscaping, but so far it’s costing more than four times the goal set for the researchers.

Terra Blue is working on ways to reduce the costs.

“After doing this for 20 years, I can tell you the issue is not so much the technology,” a Terra Blue researcher says. “The technologies are out there that can meet the environmental criteria. It always comes back to the cost.”

Getting paid for carbon offsets might work.

That’s why Google is investing in the project with Duke University and Duke Energy.

Tatjana Vujic, director of Duke University’s Carbon Offsets Initiative, said the university started the project not to make money, but to help reach its goal of offsetting all its carbon emissions by 2024.

Duke Energy got involved because the state is forcing utilities to generate some of their electricity from hog and poultry waste.

“I think the turning point will be when the economics look good, when the system pays for itself and brings something back to the farm, like carbon credits, electricity sales, lower mortality rates among the hogs,” Vujic said.

“It’s sort of like you need this perfect storm of things, all coming together.”

Meanwhile, there’s no word of any advances coming from the investments recommended by the Agricultural Research Institute of Ontario.

Elanco, Novartis now together

Eli Lilly, owner of Elanco, has bought the animal health division of Novartis for about $6 billion.

The deal vaults Elanco from fourth to second spot in the global market. Zoetis, spun off from Pfizer last year, is the biggest.

About 40 per cent of the sales are for pets, 60 per cent for livestock and poultry.

Elanco bought Lohmann Animal Health of Germany last year, giving it access to the poultry markets. The Novartis deal will add fish farming.

Elanco’s sales have doubled since 2007.

Elanco's profit margins also shot up last year, leaving us wondering how high they will go after this deal. Let's hope they do it only on the pet side of the business and leave farmers alone.

Novartis made another deal with GlaxoSmithKline of England, buying its cancer medications division and selling its vaccine business. 

And according to a column in today's Globe and Mail, the drug companies are now diverting money from research and development to mergers and acquisitions. 

Great for the public's health, eh?  Not to mention our pocketbooks.

I say get rid of patents on drugs and medicines, return to having research done via direct government funding and then all advances would be shared quickly and efficiently so progress would improve.

And do the same for agriculture, especially for plant, livestock and poultry breeding. No patents!

CFIA and union go public

The Canadian Food Inspection Agency is cutting 192 workers and $35 million from its budget for Vancouver which is being used as a test for what could happen nationally, says the union representing staff.

That, the union says, means the CFIA will be neglecting some things it’s required to do and will increase risks for consumers.

The CFIA has countered, saying the union’s claims are not true.

Bob Kingston, president of the agriculture division of the Public Service Alliance of Canada,  is quoted by the Canadian press saying the staff in Vancouver are "all overworked. There's not a manager in the agency right now who will tell you that they have enough resources to fully deliver what they're legally required to deliver.”

"These legal requirements for the agency to still be looking at these products and to be actually worried about consumer protection have not gone away. The laws are still in place, the regulations are still in place. They've just stopped doing them," he said.

Kingston said residents in the Vancouver region have become "guinea pigs" for the government. He said a union review of CFIA online postings indicates its plans for this year include:

— A 60 per cent reduction in ground meat inspections. The union says that increases the risk that cheaters will mix in other meats,  such as pork, or substitute other filler. Europe had a major scandal last year when horse meat was found in what was supposed to be pure beef.

— There will be no cooking oil inspections. The union says oil can also be adulterated.

—  Half of the inspectors checking independent food retailers will be cut.

— Routine menu checks, such as for product substitution and short measuring, won't occur.

— Inspectors will no longer check that grocers are storing food at the safe temperature.

The federal health ministry referred questions to the CFIA, which responded to the union's claims with a broad email.

"The statements by the union are false. There have been no cuts to food safety. 

"Canada has one of the safest and healthiest food systems in the world," it said.

Don't you get tired of that line?

The agency acknowledged there have been recent changes to how it handles the Vancouver area,  Canadian Press reports.