Supplies of the dark meat chicken increased this year after Russia, a leading buyer of dark-meat leg quarters, banned imports of U.S. chicken beginning in January. Russia just recently lifted the ban on many U.S. chicken plants. In August, USDA reported there were 115.48 million pounds of leg quarters in storage, up 33 percent from a year ago.

Source: Reuters

Smithfield reports record Q1 results

"Fiscal 2011 is off to a great start with record first quarter earnings. The business environment was very favorable in the Pork segment and sharply improved in the Hog Production segment in the first quarter," said C. Larry Pope, president and CEO.

Pope said, "The hog production cycle has turned and our fresh pork and consumer packaged meats businesses are delivering solid and consistent earnings, owing to the success of the Pork Group restructuring last year and strong discipline in this segment. Although the first quarter is generally the most difficult quarter for fresh pork, the company generated very strong fresh pork earnings, bolstered by solid exports and low protein supplies, which created an environment of strong profitability. Overall favorable market dynamics benefited the company in all segments.

"Despite rapidly rising and historically high priced raw materials, we delivered solid results in our packaged meats business led by double digit gains in Curly's BBQ, Off the Bone Lunchmeats, Armour LunchMakers and Kretschmar Deli. These brands and product categories are strategically important as we continue to focus on delivering strong margins in this business," he added.

Fresh pork margins were strong as all-time high meat cutout values more than offset significant year over year increases in live hog prices. High meat values throughout the quarter were reflective of tightened pork supplies. Operating margins were 4%, or $7 per head, despite a 38% increase in live hog market prices and a 6% decrease in volume, as the company processed 11% fewer head than in the prior year. The majority of the volume decline was the result of the closure of the Sioux City, Iowa plant in April 2010.

Industry-wide, slaughter volumes were down 3.5% and frozen pork supplies were depleted to 72% of last year's levels. Lower industry slaughter levels are expected to persist well into the company's second quarter.

Export sales dollars increased nearly 19% and export volume was strong on a historical basis, and only 2% less than the prior year.

Packaged meats margins held strong despite considerable year over year increases in raw material costs. Pricing leadership and margin discipline across several important product categories grew overall sales dollars, even as retail sales volumes dipped below last year. Foodservice sales dollars and volumes were both up over last year. Total packaged meats sales grew 5% percent during the quarter to $1.26 billion and operating margins remained historically strong at 5%, or $.11 per pound.

Operating margins in the Hog Production segment dramatically improved in the first quarter to $17 per head, an improvement of more than $53 per head compared to the same period a year ago (excluding the effect of last year's $34.1 million impairment charge). Fewer hogs marketed increased live hog market prices 38% to $58 per hundredweight compared to $42 per hundredweight last year.  Pre-interest raising costs decreased 7% to $54 per hundredweight from $58 per hundredweight in the prior year.

"We will continue to focus on maximizing margins in our Pork segment, despite comparatively higher raw material costs,” Pope said. “The Pork segment will continue to benefit from tight protein supplies, as slaughter levels and freezer stocks continue to be lower year over year. The second quarter is generally a seasonally strong quarter for fresh pork and we expect to deliver solid margins in this segment going forward."

"The Hog Production segment should continue to be profitable, supported by lower hog supplies," he commented.

"In closing, we maintain our positive outlook for fiscal 2011. All parts of our business are profitable and we are focused on lowering our Hog Production segment cost model and capitalizing on our restructured Pork Group. All indications are that fiscal 2011 will be an excellent year for Smithfield," Pope concluded.

Source: Smithfield Foods Inc.

2011 Clean Water Competition announced

“Poultry companies are committed to environmental stewardship and do a great job in their water treatment operations,” said Steve Willardsen, Cargill Value Added Meats, Wichita, Kan., and chairman of U.S. Poultry & Egg Association. “They reclaim most of the water used to process poultry, and return it to the environment in excellent condition. We are pleased to sponsor this annual competition to spotlight poultry operations and their environmental management programs that protect our natural resources.”

There are two categories for the award: one for full treatment facilities - those that fully reclaim their wastewater prior to discharge into receiving water or final land application system, and one for pretreatment facilities - those that discharge pretreated effluent to publicly-owned full treatment facilities. Any USPOULTRY member company is eligible to submit one nominee in each category. Facilities which have previously won the award may not be re-nominated for five years. The deadline for submitting applications is December 31, 2010.

An evaluation committee will review the applications and select two semifinalist facilities in each category. The committee will then visit the semifinalist facilities to select the award recipients. The committee includes university personnel, industry engineers and managers, and state regulatory officials.
Award recipients will receive a trophy, be profiled on the USPOULTRY website and receive assistance from the Association in publicizing the award on a local, regional, and national level.
For the application form, go to www.poultryegg.org/environment/docs/11cWaterAwardApp.pdf.

The winners of the 2010 Clean Water Awards were American Proteins, Hanceville, Ala., for full treatment; and Wayne Farms, Decatur, Ala., for pretreatment. Perdue Farms, Perry, Ga., received honorable mention in the full treatment category. The Tyson Foods Fresh Retail Division, Wilkesboro, N.C., received honorable mention for pretreatment.

Source: USPOULTRY

Burger King greatly expands breakfast menu

Along with mini blueberry biscuits and an enhanced coffee selection, new menu items include the BK Breakfast Ciabatta Club Sandwich, which features eggs, fresh tomatoes, ham, bacon, American cheese and smoky tomato sauce on a toasted whole-grain Ciabatta bun. The BK Ultimate Breakfast Platter contains scrambled eggs, sausage, golden hash browns, a biscuit and pancakes. Its siblings are the Pancake and Sausage Platter and the Pancake Platter.

"We're ready to compete to be America's wake-up call with our new BK Breakfast Menu," said Mike Kappitt, chief marketing officer, North America, Burger King Corp. "We're recognized far and wide for our superior burgers, and we're confident guests will know and love us for breakfast as well. Given the quality, variety and value on our new menu, Burger King is sure to become the destination for breakfast."

Source: Burger King Corp.

American Lamb Board hosts events in Washington state

"We're thrilled to bring so many fun events to the table this fall," said Megan Wortman, executive director, American Lamb Board. "American Lamb is a flavorful, everyday protein that we're excited to showcase with the help of our local partners and Seattle's talented culinary community."

Local events include:
• BLEND: September 12, 2010: More than 40 wine producers from Washington, Sonoma and Portugal will pair blends with gourmet American lamb cuisine as attendees enjoy blending seminars and chances to win Portugal getaways. www.columbiablend.com
• Pike Place Market Artisan Food Festival: September 25 - 26, 2010: The American Lamb Board, in partnership with the Market Foundation and Slow Food Seattle, will host the first annual Pike Place Market Artisan Food Festival. Lamb lovers can visit the American Lamb pavilion for samples from Uli's Famous Sausages and Rainshadow Meats. www.artisanfoodfestival.org
•  Fall in Love with Lamb, Retail Promotions: October 1 - 31, 2010: Select Washington grocery stores will feature complimentary local celebrity chef demonstrations and samplings.  www.fansoflambSeattle.com
• Seattle Restaurant Week: October 17 - 28, 2010: More than 120 Seattle restaurants will offer special three-course dinners for $25 and three-course lunches for $15.  Diners can choose flavorful American Lamb dishes on menus throughout the city. www.seattlerestaurantweek.com
• American Lamb Jam: October 24, 2010: The American Lamb Board, in partnership with Washington Lamb Producers, will bring together 20 chefs to prepare luscious lamb dishes at the second annual American Lamb Jam Seattle. The dishes will be paired with award-winning Washington wines as fans of lamb vote for their favorite dishes. www.fansoflambseattle.com
• Dine Around Seattle: November 1 - 30, 2010: Now in its eighth year, Dine Around Seattle runs all month long, Sundays through Thursdays. Participating restaurants will offer prix-fixe dinners for $30 and lunches for $15 that feature American lamb. www.dinearoundseattle.com.

Source: American Lamb Board