Meat + Poultry - March 2004 - 4

Caviness Beef Packers building new facility Jury awards $1.28
HEREFORD, TEXAS - Caviness Beef Packers is building a new slaughter facility in Her- billion verdict against
eford. The plant is designed to process 1,500 head per day and will be operational in 2005. Tyson Foods
The new plant will replace an existing slaughter facility and be located three miles from
the original operation.

McKee out and Masters in as F.S.I.S.
administrator
WASHINGTON, D.C. - Dr. Garry McKee's stint as Administrator of the Food Safety and Inspection Service is over. Dr. Elsa Murano, under secretary of food safety at U.S.D.A., announced that McKee has been named Science Advisor for the Technical Service Center
in Omaha, Neb.
Murano also announced the appointment of Dr. Barbara Masters, formerly the deputy
administrator for field operations, as acting F.S.I.S. administrator until a permanent administrator is appointed. "Dr. Masters brings a wealth of expertise and experience to this position, having served with the agency in a number of important roles," Murano said. "Dr.
Masters was instrumental in helping the agency transition to the hazard analysis and critical control point food safety system and she has a fundamental understanding of agency
programs and policies."

MONTGOMERY, ALA. - A jury recommended a judgment of $1.28 billion against Tyson
Foods, Inc., Springdale, Ark, this past February for allegedly manipulating and controlling cattle prices. The complaint had originally
been brought in 1996 (against IBP, Inc.) by a
group of cattle producers.
The company plans to appeal. "The verdict
is a disappointment to our company and thousands of cattle producers who want to maintain
the right to market cattle the way they want," said
a statement issued by Tyson Foods shortly after
the verdict. "Fortunately, this is only a temporary
legal setback. We will ask the judge to set aside
the verdict. If he does not act, we intend to appeal and fully expect the jury's decision to be reversed by the 11th Circuit Court of Appeals."

Farmland acquisition impacts Smithfield
earnings
SMITHFIELD, VA. - Smithfield Foods, Inc., announced net income for the third quarter of fiscal 2004, ended Feb. 1, of $46 million versus net income of $5.3 million for the
same quarter this past year. Results in the quarter were adversely affected by $11 million in costs in the company's beef segment related to the impact of a reported case of
bovine spongiform encephalopathy in Washington state. The company's third quarter
sales were $2.7 billion compared to $1.8 billion this past year.
Smithfield's pork segment operating profit increased 32 percent, primarily the result
of the acquisition of Farmland Foods this past year. Excluding Farmland and the extra
week of sales, fresh pork volume grew 6 percent and processed meats and prepared
foods volume rose 3 percent.
Operating profit in the beef segment was well below a year ago and declined over 80
percent from the second quarter. Following the announcement in December of the discovery of B.S.E. in Washington state and the resulting drop in the cattle and beef markets, the company's beef operations recognized inventory losses of $7.7 million. Additionally, due to a lack of available market cattle in the weeks following the announcement, the company incurred operating inefficiencies in its beef plants totaling approximately $3.3 million as the result of sharply reduced operating levels.

Tyson consolidating poultry operations
SPRINGDALE, ARK. - Tyson Foods, Inc., will consolidate its poultry processing operations in Jackson, Miss., into the company's facility in Carthage. Tyson acquired the Carthage facility when it purchased Choctaw Maid Farms this past September.
The approximately 850,000 birds being processed weekly in Jackson will now be processed at Carthage, bringing the production at that facility to about 2.3 million per week. Production at the Jackson plant will be curtailed in phases, with slaughter operations ceasing in
early May and the remainder of production expected to cease by the end of July.
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Few industry observers believe the verdict
will be upheld. However, if it does it could have
a dramatic affect on the beef industry. The
methods beef packers use to buy fed cattle
could be changed forever. The plaintiffs in the
case want to stop the marketing arrangements
by which producers provide packers with cattle
that meet pre-determined specifications.
U.S.D.A. data indicates that as many as 40
percent of the fed cattle slaughtered in the U.S.
is purchased through contracts and alliances
between slaughterers and producers. Upholding the jury's decision would force the industry
to return to the open bidding process.

C.P.C. approved as
antimicrobial by F.D.A.
LITTLE ROCK, ARK. - The Food and Drug Administration has approved cetylpyridinium chloride as an antimicrobial effective against Salmonella. The biocide, commonly found in mouthwash and throat lozenges, is applied to poultry
carcasses in a spray form, and has also been
found to be effective against E. coli, Listeria and
Campylobacter.
MARCH 2004

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Meat + Poultry - March 2004

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