News and notes about the industry
December 13, 2013
Sysco to acquire US Food Services
According to Investor's Business Daily, "Sysco reported plans to purchase the privately held U.S. Food Services for $3.5 billion recently. Sysco (SYY) stock price jumped as much as 14 percent to an all-time high after the announcement. "The merger will create a behemoth in the food distribution industry with estimated annual sales north of $65 billion. Because the new company would dwarf peers, the deal could draw regulatory scrutiny," the story said. The pricetag will be a combination of stock and $500 million cash for the company. Sysco also plans to take on $4.7 billion of U.S. Foods' debt, making the deal worth $8.2 billion. The pairing was the largest since Albertsons was sold to a group of buyers in 2006, Bloomberg news service said.
USCA on Farm Bill and COOL
Jon Wooster, United States Cattlemen's Association (USCA) president, issued the following statement today regarding the ongoing farm bill conference negotiations. "As farm bill talks continue, USCA commends the four leaders of the House and Senate Agriculture Committees for their efforts to move new farm policy forward. USCA appreciates the efforts of Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI), Ranking Member Thad Cochran (R-MS), House Agriculture Committee Chairman Frank Lucas (R-OK) and Ranking Member Collin Peterson (D-MN) who are working hard to produce bipartisan legislation. USCA remains firm in its opposition to any amendment that would alter or repeal the U.S. county of origin labeling (COOL) program… USCA opposes any attempt to derail COOL during the farm bill conference and we urge passage of a final farm bill that provides U.S. agricultural producers with the long-term, comprehensive safety nets they need as we prepare for the new year."
Northern Beef Packers sells
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According to the Wall Street Journal, Northern Beef Packers LP will sell its assets to White Oak Global Advisors for $44.3 million. The offer was accepted by the bankruptcy court Dec. 5.
Judge Charles Nail Jr. of the U.S. Bankruptcy Court in Aberdeen, S.D., approved the San Francisco-based firm's offer of $4.8 million in cash and $39.5 million in debt forgiveness, according to court documents.
WSJ reports that American Foods Group LLC also submitted a bid, of $12.7 million in cash, but White Oak's bid was accepted instead.
FDA releases guidelines for ag antiobiotic use
On Dec., 11, FDA released their guidance recommending limiting the use of on-farm antibiotics. They say the guidelines should slow the spread of antimicrobial resistance in humans.
USA Today reported that FDA will give drug companies that sell antibiotics for animal feed 90 days to voluntarily rewrite the labels on those drugs. The new labels will say that the antibiotics and antimicrobials can only be used to treat actual illnesses in animals under the supervision of a veterinarian. Drugs that will be affected include tetracyclines, penicillin and macrolides such as azithromycin, said William Flynn, deputy director for science policy with the FDA's Center for Veterinary Medicine.
It appears that agriculture, for the most part, is happy with the result, according to an Agri-Pulse story.
Pharmaceuitical giant Zoetis, The Animal Health Institute, a group representing several drug companies, the National Pork Producers and the American Veterinary Medical Association seemed comfortable with the new regs, according to news stories.
According to Agri Pulse, Guidance #209 establishes two voluntary guidelines: that medically important antimicrobial drugs in food-producing animal should only be used when necessary to promote public health; and that the drugs in animals should only be used under the supervision of veterinarians.
Guidance #213 phases out the use antimicrobials for growth promotion – a practice that has received criticism from a number of food safety advocacy and watchdog groups. The guidance instructs drug companies to change "feed products containing medically important microbial drugs" from Over-the-Counter regulation status to prescription, or Veterinary Feed Directive (VFD), status.
According to reports, a proposed Veterinary Feed Directive released today would require veterinarians to make on-site visits and write more detailed reports on animal operations.
FDA said that there will likekly be some sort of consequence for companies that don't comply with the voluntary guidelines.
News reports state that Rep. Louise Slaughter, D-New York, the only microbiologist in Congress, called the regulation inadequate.
"Sadly, this guidance is the biggest step the FDA has taken in a generation to combat the overuse of antibiotics in corporate agriculture, and it falls woefully short of what is needed to address a public health crisis." The Consumers Union said, adding that while the regulations are a good "first step," more needs to be done. F