Meat + Poultry - June 2006 - 4

Senators push Korea
and Japan to resume
beef imports
WASHINGTON - This past month, 31
U.S. senators sent letters to Junichiro
Koizumi, the prime minister of Japan,
and Han Sung Joo, the ambassador of
Korea, urging them to resume importing
U.S. beef. Both countries banned U.S.
beef imports over concerns stemming
from the discovery of bovine spongiform
encephalopathy in U.S. cattle in 2003.
Prior to the bans, Japan was the largest
importer of U.S. beef and Korea was the
third largest.
Koizumi is scheduled to meet with
President Bush in Washington June 29,
and during their discussions, negotiations
about easing the reinstated ban on U.S.
beef is reportedly on the agenda. The
senators pushed for the resumption of
trade before the prime minister's visit.
They also referenced suggestions in
the cattle industry for trade retaliation
against Japan. "Certainly, efforts such
as these are never fully positive and
should be used only when absolutely
necessary."
Incidentally, both countries' leaders
are in the final stages of their respective
terms, casting doubt on their ability to resolve the trade dilemma. "The President
can't be looking too far forward because
Mr. Koizumi's term expires in September. I guess birds of a feather - in this
case, lame ducks, do flock together," said
Bush's press secretary in a statement.
Likewise, the senators signed a letter
urging Korea to reopen its market prior
to negotiating a free trade agreement with
the United States this month. "We believe
that it would be essentially impossible to
garner the necessary support for a free
trade agreement with Korea if it does not
include access for all beef and beef products," said the letter to Han Sung Joo.

Sara Lee cross promotes deli meats and bread
NEW YORK - A concerted effort to
tap into synergies between the meat and
baking businesses of Sara Lee Corp. was
described recently by Brenda Barnes,
C.E.O. Speaking at the Sanford C. Bernstein & Co. Strategic Decisions Conference, Barnes offered
a tongue-in-cheek
observation about the realization that
baked foods and meat products are
complementary.
"We had an amazing discovery," she
said. "If you have bread and you have
meat, you can make a sandwich."

Sara Lee had never conducted a bread
and meat joint promotion, Barnes said.
Over Memorial Day weekend, standalone bread displays were placed near
refrigerated Sara Lee deli meats. "This
simple cross-promotion really was not possible before
we brought these companies
(meat and baking) together since they did not talk to each other," she said. "In fact, we had our bread
company doing peanut butter and jelly
tie-ins, not our own company meat tiein."Senators pressure Korea and Japan
to end beef ban

Declining pork prices impacts P.S.F.
KANSAS CITY - Premium Standard
Farms, Inc. reported net income for
fiscal 2006, ended March 25, of $53.1
million, equal to $1.71 per share on the
common stock, down from $67.7 million, or $2.19 per share, for the same
period during fiscal 2005. Net sales
for fiscal 2006 declined to $919.5 million from $927.6 million for the previous year.
Net income for the fourth quarter
of fiscal 2006 was $11.8 million, or
38c per share, compared with $23.4
million, or 76c per share, for fiscal
2005. Net sales for the quarter were
$218.1 million for fiscal 2006 versus
$249.8 million for the same period in
fiscal 2005.
"As we had previously discussed,
pork prices have recently been trending downwards to more historic levels," said John Meyer, C.E.O. "During the fourth quarter, we experienced
a sharp decline in pork price levels
compared to last year, primarily due to
higher overall protein production in the

U.S. However, this decline was partially offset by favorable hog hedging.
"Internationally, demand remained
strong during the fourth quarter of
fiscal 2006 as a result of our superior product offering. We continued to
show a level of growth that exceeds
the healthy industry growth in export sales."
As a result of the increased supply of
all meat proteins in the United States,
P.S.F. expects to see fiscal 2007 pork
prices lower than the levels experienced
in fiscal 2006. Internationally, demand
for P.S.F.'s products and increased utilization at the company's Clinton, N.C.,
plant both contributed to strong export
volumes to Japan, Canada and Mexico.
The company expects export demand
for its products to meet or exceed export growth for the industry and also
plans to expand its development efforts
in Latin America and China.
Domestically, pork demand has
moderated; a trend that is expected to
continue in fiscal 2007.

Smithfield spin-off to target corporate gift market
SMITHFIELD, Va. - Smithfield Foods,
Inc., has launched a new business unit offering specialty gourmet foods targeting
the corporate gifts and incentives market. Smithfieldincentives.com, a division
of the company's Specialty Foods Group,
will offer selections from more than 200
4

MEAT&POULTRY

June 2006

food products, including its signature
pork products, beef, fish, poultry, nuts,
and a line of desserts and sweets.
"A recent national study pointed out
that gourmet food is among the top five
products that corporations send their customers and employees when they want to

www.MEATPOULTRY.com

reward or motivate them," said Dan Vorland, director of corporate sales for the
new division.
Smithfieldincentives.com will market
to corporate buyers largely through its
Web site, trade shows, national business
publications and direct mail.

http://www.eldincentives.com http://www.eldincentives.com http://www.MEATPOULTRY.com

Meat + Poultry - June 2006

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