Vancouver-based A+W Canada announced its “Better Beef” campaign Monday, in which it declares all burgers sold at its 790 restaurants across Canada “are now made with beef that has been raised without any added steroids or hormones and contains no added preservatives or additives.”

Billing the company as the first burger chain in Canada to adopt such a policy, Paul Hollands, CEO of A+W Food Services of Canada, said in a release Monday that the company has “sourced the beef from select ranches that are at the leading edge of sustainable practices.”

A+W on Monday cited studies it commissioned with research firm QRI International, to gauge consumer response to the “Better Beef” concept.

“The response has been overwhelmingly positive, with 89 per cent of burger eaters reporting they are impressed and interested that A+W is serving beef raised without added hormones or steroids,” QRI’s Andrew Spicer said in A+W’s release. “They see better beef as more natural and they feel good about how the beef has been raised.”

The income fund which operates the A+W Canadian chain had said in its second-quarter report in June it planned a strategic initiative to “enhance A+W’s reputation as having a clearly superior burger,” coupled with an “extensive re-imaging program to modernize and enhance the appeal of existing restaurants.”

The fund booked net income of $3.03 million for 2012 on $7.75 million in royalty income, based on $258.43 million in sales by the restaurants in its royalty pool.

On its Better Beef website, the company profiles three ranches — one each in Canada, the U.S. and Australia — including the Kotelko family’s Spring Creek Ranch, an Angus-based cattle and beef company at Vegreville, Alta.

The chain said its chosen suppliers all offer “rigorous verification systems to track the cattle, their feed and their care to ensure the beef meets A+W’s strict specifications.”

“All of our cattle are custom-raised without added hormones or steroids. They spend most of their days on the prairie and grass,” Spring Creek’s Kirstin Kotelko said in the company’s release. “We do everything with integrity, we’re proud to do what we do and we hope Canadians enjoy the results.”

The company also bills its beef as free of antibiotics and based on “quality Angus genetics.” Other customers for Spring Creek beef have included Calgary Co-op, Sobeys and, for its in-store Open Nature beef brand, Safeway.

“Progressive”

A+W, on its site, cited the Kotelkos’ provincial and national awards for “progressive innovation in environmental stewardship,” such as the company’s Growing Power biorefinery, processing grain for feed and ethanol and cattle manure and other wastes for electricity.

Its awards include the 2001 Feedlot Environmental Stewardship Award from the Canadian Cattlemen’s Association for its Highland Feeders operation; the 2005 Growing Alberta Leadership Award for Environmental Stewardship; and the environmental stewardship award in 1997 from the Alberta Cattle Commission, now Alberta Beef Producers.

Spring Creek also includes a network of Angus-based ranchers with similar policies on hormones and antibiotics and requires its partner ranchers’ cattle to be age-verified with the Canadian Cattle Identifcation Agency.

A+W’s featured U.S. supplier for the campaign is Montana-based Meyer Natural Foods, billed as “the only major beef company in North America to receive the ‘Certified Humane’ designation from the Humane Farm Animal Care program.”

The Australian supplier, Teys Australia, is noted for its Grasslands cattle, “free to roam and graze with access to fresh water and natural grass.” – AGCanada.com Network

The Teamsters Canada Rail Conference (TCRC) reported Monday that CN is already seeking conciliation in talks toward new contracts for about 3,300 affected staff.

The TCRC’s previous collective agreement with CN for those staff expired July 22, but CN “doesn’t seem to want to negotiate directly with the union,” the TCRC said in a release.

The union warned the situation “could therefore end up being a repeat of the 2010 negotiations when a strike was narrowly avoided.”

“CN is once again trying to get us to make concessions that would see our members work longer hours, be onboard the trains, have less rest time between each trip and perform more work when alone,” TCRC negotiator Roland Hackl said in a release.

The company’s stated aim is to “eliminate artificial restrictions,” the union said, but the Teamsters maintain “the concessions will reduce the number of workers and increase the workload and hours of those who remain.”

“The railway’s attitude will more than likely lead to a labour dispute,” Hackl said Monday.

The same bargaining unit ratified a three-year deal in November 2010 following a round of what were then described as “last-chance” meetings with a federal mediator.

The company and union by that point were in position to launch a lockout or strike respectively with 72 hours’ notice. — AGCanada.com Network

Related story:
CN conductors ratify three-year labour deal, Nov. 16, 2010

Breton announced Monday it will sell its Genetiporc arm’s Canadian, U.S. and Mexican assets to animal genetics firm Genus for $30.99 million, and Genetiporc’s Brazilian assets separately to a Genus joint venture with Brazil’s Agroceres for $8.67 million.

Genus said it will buy Genetiporc’s U.S. and Mexican companies and “certain assets” in Canada — mainly “intellectual property, genetic nucleus herds of approximately 3,200 pure line sows and customer contracts” — and merge them into Genus’ global hog business, PIC.

Under that deal, Breton would become a customer of PIC as part of a long-term agreement to buy exclusively PIC’s genetics. Genus would also take on about $5.77 million of Genetiporc debt.

That part of Genus’ deal with Breton is subject to “satisfactory completion of veterinary verification,” among other conditions, and is expected to close sometime next month.

Meanwhile, the Genus/Agroceres joint venture, Agroceres PIC, will buy the Brazilian business, Genetiporc do Brazil. Genus, which owns 49 per cent of Agroceres PIC, would pay 49 per cent of the bill.

“The acquisition of Genetiporc represents a further important step in the strategic growth and development of Genus as we focus on providing the very best genetics to meet the demands of a rapidly growing and urbanized global population,” Genus CEO Karim Bitar said Monday in a release.

Genetiporc, based at Saint-Bernard, about 45 km south of Quebec City, “is an excellent fit with Genus’ existing business in the Americas, further strengthening our market position in that geography, and also provides our customers around the world with a wider and deeper genetic pool,” Bitar said.

Genetiporc CEO Christian Breton, meanwhile, said the deal “provides our customers and supply chain partners with the long term opportunity to further grow and derive value from the partnership with the new Genus-Genetiporc business.”

Merging

Genus and Genetiporc’s genetic nucleus herds and product development programs will be “integrated,” Genus said, and Genetiporc’s operations will be merged into PIC’s North American and Latin American businesses by “integrating the supply chains and merging customer-facing teams.”

The broader resulting supply chain and multiplier base “supports future growth for PIC’s North American and Latin American business and improves the ability of PIC to serve our current and future customers,” Genus said, and Genetiporc customers will get access to PIC’s “market-leading technical and health services.”

Genetiporc’s businesses outside Brazil booked $61.81 million in revenues and broke even in the year ending June 30, while Genetiporc do Brazil took in $8.89 million in revenues and about $702,000 in profit during the same period.

At full run rate, Genus expects “synergies” of about $11.37 million per year — including its share of synergies in Brazil — as Genetiporc’s operations are merged into PIC’s. The deal is expected to be “modestly accretive” to Genus in fiscal 2014.

Genetiporc, in business since 1984, today has over 300 customers and estimated volumes of over 13 million market pig equivalents, compared with Genus’ 99 million market pig equivalents in the same period, Genus noted. – AGCanada.com Network

Related stories:
Que. hog genetics firm sets up Ont. base, July 2, 2009
Breton Foods’ Genetiporc enters western market, Jan. 27, 2009

PEDv, which is deadly to baby pigs, could reduce the number of hogs coming to market in the coming months.

“Some people are waking up to how severe this PEDv virus is, which may have been underreported,” said Linn Group analyst John Ginzel.

He said some traders bought futures based on initial forecasts for the U.S. Department of Agriculture’s quarterly hogs and pigs report due on Friday at 2 p.m. CT.

Some researchers have discovered that the virus, which is not harmful to humans, may be carried on the wind, possibly exposing swine farms to a greater threat.

Nearby hog futures made new highs for their contracts, driven by their discounts to CME’s hog index which was at 98.25 cents (all figures US$).

October closed 2.325 cents higher at 92.5 cents per pound and hit a new contract high of 93.15 cents in after-hours trading.

December finished 1.65 cents/lb. higher at 88.075 cents. It posted a new contract high of 88.9 cents.

Focus on the pig virus and undervalued futures overshadowed word of the approved sale of Smithfield Foods to Chinese firm Shuanghui International.

Smithfield shareholders on Tuesday approved the pork giant’s $4.7 billion sale to Shuanghui in what is shaping up as the biggest acquisition of a U.S. company by a Chinese firm.

The Smithfield buyout is expected to increase U.S. pork exports to China at some point, but it is too early to tell, said Citigroup futures specialist Art Liming.

“I think the futures’ discount to cash probably has more to do with today’s rally than the Smithfield news. It looks like cash hog prices are going to stay fairly supportive,” he said.

“The Smithfield news doesn’t hurt, but it was fairly cooked into the market that it would be approved,” Liming said.

USDA’s Tuesday morning data reported the average hog price in the most-watched Iowa/Minnesota market at $94.84 per hundredweight (cwt), $2.92 higher than on Monday.

Live cattle up on cash expectations

CME live cattle futures gained for a fifth straight session in anticipation of steady-to-higher cash prices as wholesale beef demand improves, traders said.

Live cattle October closed 0.725 cent/lb. higher at 127.325 cents. December settled at 131.225 cents, 0.725 cent higher, and peaked at a 6-1/2 month top.

“We’ve got some extremely constructive fundamentals,” said Oak Investment Group president Joe Ocrant. He cited rising wholesale beef values and firmer prices paid for cattle in the cash market last week.

USDA data Tuesday morning showed the wholesale choice beef price, or cutout, at $193.82/cwt, up 27 cents from Monday. Select cuts were 76 cents higher at $177.55.

Last week, cash cattle fetched $124 per cwt in Texas and Kansas and $125 in Nebraska, feedlot sources said.

Also, last Friday’s USDA cattle report was bullish for deferred-month futures because it confirmed tighter supplies ahead which would be supportive to cash, Ocrant said.

CME feeder cattle drew support from the higher live cattle market and weak corn prices. Cheaper corn can ease input costs for feedlot operators.

September, which will expire on Sept. 26, ended up 0.325 cent/lb., at 157.95 cents. October settled 1.675 cents higher at 163.775 cents.

– Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

Wheat futures also closed firm, turning higher late in the trading day on concerns that freezing temperatures may harm the crop in Argentina. Corn weakened, setting back from gains on Monday on seasonal harvest pressure.

Bargain buyers stepped in to boost soybean prices after front-month futures fell to $13.05-1/4 a bushel — their lowest since Aug. 21 — during the overnight session (all figures US$).

The soybean market was ripe for a rebound as prices have fallen more than a dollar in less than a month, but traders warned that Tuesday’s gains might not be sustainable.

“It is tough to tell whether today is just turnaround Tuesday and you are getting a (temporary) bounce after the correction, or if the market really does not want to press below $13,” said Garret Toay, risk management consultant with Toay Commodities Futures Group.

CBOT November soybeans settled up 4-3/4 cents at $13.12-1/2 a bushel. Through Monday, soy prices had fallen three days in a row and in five of the last six sessions.

Stagnant crop conditions, and reports of variable yields from the early harvest, helped the bullish case for soybeans.

“Some yields still seem to be pretty up and down,” said Mark Schultz, analyst with Northstar Commodity Investment Co.

The U.S. Department of Agriculture (USDA) on Monday rated 50 per cent of the soybean crop in good to excellent condition as of Sunday, unchanged from the previous week and one percentage point better than market expectations.

“This, coupled with the uncertainty over whether the soybean acreage figures stated so far are actually correct or whether the acreage may in fact be smaller after all, is lending support to soybean prices,” Commerzbank said in a note.

With the U.S. soybean harvest under way — three per cent of the crop had been cut by Sept. 22 — commodity analysts remain unsure about how many acres were planted with the oilseed last spring, making it difficult to determine the crop size of the world’s largest producer.

CBOT December corn ended off 4-1/2 cents at $4.48-3/4 a bushel. Grain dealers have said corn yields from the early harvest were better than expected across the Midwest, leading to a surprise bump in farmer selling during the past few weeks.

Farmers had been expected to put into storage much of the corn they had not already contracted to bring to elevators and processors, but the abundant yield caused a spike in fresh sales.

CBOT December wheat was up 4-3/4 cents at $6.58-1/4 a bushel, as the Argentine weather raised the prospects for U.S. exporters to win some new business amid burgeoning overseas demand.

“We’ve seen near-record levels of exports last week and the week before out of the U.S., and the U.S. balance sheets are certainly looking very tight,” said Chris Gadd, grains analyst at Macquarie Capital. “Wheat is far tighter than people had expected.”

But U.S. wheat, which is still more expensive than supplies from most other parts of the world, will have to compete with a hefty Canadian crop on international markets, analysts said.

– Mark Weinraub is a Reuters correspondent covering grain and oilseed futures markets in Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Agnieszka Flak in Milan.

Last month, University of Illinois entomology professor Dr. Mike Gray, sounded something of an alarm regarding the discovery of significant injury from western corn rootworm larval feeding in first-year corn fields.

In several fields, pruning of corn roots, as well as some lodging, was discovered. Many of those fields had been planted to certain Bt rootworm hybrids which express the Cry3Bb1 protein.

The reason for the concern is that up until recently, the pruning and lodging seen throughout counties in east-central and central Illinois was more of an issue in second- and even third-year corn fields. Now those same fields are displaying what could be rotation-resistant corn rootworms (and further research and identification have to be performed for that confirmation).

Asked if there similar concerns of the same trend developing in Ontario, provincial entomologist Tracey Baute expressed her doubt that it will become as prevalent as those incidents in the U.S. Midwest. At the same time, there is room for caution.

“We have a very low incidence of first-year rootworm or what we would call the rotation variant here in Ontario,” says Baute, who works out of the Ontario Ministry of Agriculture and Food office at Ridgetown.

“With a three-cropping system, it decreases our chances of seeing it here in Ontario, though there has been an increase in volunteer corn in soybean fields, especially this year, which doesn’t help.”

Volunteers

That’s something many crop advisors and provincial specialists have been warning against for several years, but it’s been more as a question of how to control volunteer corn, not as an indicator of corn rootworm.

“We are not technically rotating out of a corn crop in that situation and you can easily find rootworm on roots of those volunteer plants in fields that were infested with adults last year,” says Baute.

“Growers really need to do their best to control volunteer corn to help reduce the risk of seeing the rotation variant” and resistant rootworm, for that matter, since the volunteer corn, if it was a rootworm trait, has less Bt toxin in it and can help encourage resistance to happen, she says.

In the situations in the U.S., Gray notes that bioassays are needed to determine whether there is resistance to the single Cry3Bb1 protein. If resistance is confirmed, then farmers are better off planting “pyramided” hybrids (those expressing more than one rootworm Cry protein).

In the year ahead for Midwestern growers, it’s suggested they find hybrids with multiple Cry proteins and that if they’re relying on a single-protein hybrid, it’s best to use a seed treatment at planting to help lengthen the odds in the farmer’s favour.

– Ralph Pearce is a field editor for Country Guide at St. Marys, Ont.

“We’re still in a downtrend,” said Jim Beusekom, a grain broker at Market Place Commodities at Lethbridge, Alta. “Lethbridge barley is trading in the $170-$180 per metric tonne range today, so we’re losing a good $5 to $10 per metric tonne a week. We’re not going to zero, so it’s going to have to stop one of these days.”

According to Statistics Canada, barley production is expected to rise 12.4 per cent in 2013, to 8.8 million tonnes.

However, Beusekom said, prices should start to stabilize in the coming weeks as the western Canadian harvest wraps up, but a rally is not expected unless export demand picks up substantially.

“There’s too much feed around, that’s the problem,” he said. “In order for the market to rally, there has to be demand other than the domestic market. We need to see barley exported to take some of the supply away from livestock feeders, particularly here in southern Alberta.”

Another possible bearish factor that could further affect barley prices is the beginning of the U.S. corn harvest, Beusekom said.

“We actually have not had any effect from the U.S. corn harvest yet, so we’re not seeing barley compete against corn or corn DDGs (dried distillers grains) yet,” he said. “If we see corn distillers come back into Lethbridge and compete against barley, it could go down lower yet.”

However, he said it would be unlikely to see U.S. corn up in Alberta unless there is a short supply of feed — and there isn’t this season.

“Corn doesn’t normally come here unless there is a short situation on feed, so I wouldn’t expect U.S. corn to price competitively here,” he said.

“How are we going to fit in corn distillers in such a saturated market? We still have wheat competing for a home in the feed market too, so we’ve got barley, wheat and potentially corn distillers.”

Beusekom added the lowest to which he could see Lethbridge prices drop is the $150-$160 per tonne range.

– Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

The closely watched transaction, valued at $7.1 billion including debt, is expected to close by Thursday (all figures US$).

The deal, which aims to satisfy China’s increasing appetite for pork, marries two of the world’s largest pork producers and had faced scrutiny over China’s high-profile food safety failures, concerns over U.S. pork supplies and U.S. national security.

But earlier this month, the U.S. Committee on Foreign Investment cleared the way for the deal, removing an important hurdle.

More than 96 per cent of the votes cast at a special Smithfield shareholder meeting on Tuesday were in favour of the acquisition. The votes cast represented 76 per cent of Smithfield’s outstanding common shares, the company said in a statement.

Under the terms of the deal, Smithfield shareholders will receive $34 cash for each share of Smithfield common stock they own.

After the acquisition closes, Shuanghui must then decide the fate of Spanish packaged meats company Campofrio, of which Smithfield holds a 37 per cent stake.

Shuanghui can decide to buy the remaining stake in Campofrio which it does not own, or will have to reduce its position to less than 30 per cent.

Smithfield had previously held talks to acquire a controlling interest in Campofrio in 2011 but scrapped plans, citing a weak European economy.

“We will comply with the applicable Spanish decrees on this matter,” said a spokesperson for Shuanghui International. “After closing our merger, we will notify the Spanish stock exchange commission of our intended actions in this regard.” – Reuters

Related stories:
Investment firm can’t line up rival bid for Smithfield, Sept. 20, 2013
U.S. clears Smithfield’s acquisition by China’s Shuanghui, Sept. 7, 2013

The guideline will be implemented beginning with October deliveries on Oct. 7, CME’s managing director of commodity research and product development, David Lehman, told Reuters on Monday.

“We are letting the market know these Zilmax cattle no longer are merchantable in our view from a contract specification perspective because they will not be accepted by a majority of our approved slaughterhouses,” Lehman said.

The exchange based its decision after two major packers discontinued purchases of Zilmax-fed cattle, with the possibility that others may follow suit, the exchange said.

Tyson Foods, the country’s biggest meat processor, in August informed cattle feeders it would not buy Zilmax-fed cattle after Sept. 6 amid worries about cases of cattle with difficulty walking.

Cargill, the United States’ third-largest meat producer, on Sep. 30 halted purchases of cattle given the additive.

Although there was no direct link to use of Zilmax, focus on the additive prompted manufacturer Merck and Co. to suspend Zilmax sales in Canada and the U.S. to conduct further research.

Terms of CME’s live cattle futures require that cattle received during the delivery process be “merchantable” (or healthy and not crippled or sick) and readily salable into normal commercial marketing channels.

“This notice clarifies that cattle which have been fed additives which prohibit them from being purchased for slaughter under current commercial practices imposed by major cattle slaughter facilities are unmerchantable and are to be excluded from the delivery unit,” according to the exchange’s statement.

– Theopolis Waters reports on livestock futures markets for Reuters from Chicago.

Canada’s Public Health Agency (PHAC) said Monday its list of E. coli-related illnesses pointing back to cheeses from Gort’s Gouda Cheese Farm of Salmon Arm, B.C., now includes nine cases each in B.C. and Alberta and one each in Quebec, Manitoba and Saskatchewan.

The onset of illness in the affected people came between July 7 and Sept. 8, so far peaking around Aug. 25, the agency said. All the cases of illness investigated so far appeared before the cheese products in question were recalled last week.

Of those sickened by O157:H7 related to this investigation, one person in B.C. has died and four others were hospitalized. All 20 people who survived have either recovered or are recovering from their illness, PHAC said.

Of the affected people, who ranged in age from three to 82, only one person developed hemolytic uremic syndrome (HUS), an acute kidney failure seen in the most severe cases of O157:H7 poisoning, usually in elderly people or children, PHAC said.

In many cases of O157:H7 infection in which people get sick, symptoms may vary but often include severe stomach cramps, diarrhea, vomiting and fever. Symptoms usually last five to 10 days.

Gort’s has voluntarily pulled 15 different cheese products from sale and distribution in a recall monitored by the Canadian Food Inspection Agency. The B.C. Centre for Disease Control has also prohibited Gort’s from selling or distributing any cheese from its Salmon Arm plant.

The cheeses under recall were sold either at Gort’s retail store or by retailers in B.C. and Alberta, or were purchased on the internet, the CFIA said.

While unpasteurized (“raw”) milk by itself is prohibited from commercial sale in Canada, sales of cheese made from raw milk are allowed, CFIA said.

Such cheeses, the agency said, are “manufactured and produced in a way that helps eliminate harmful bacteria that may be present” in the milk.

Specifically, raw-milk cheeses sold in Canada are subject to Health Canada requirements that they first be stored for 60 days at temperatures of 2 C or above. Gort’s, on its website, says its raw-milk cheeses are stored for two to 24 months before sale.

It’s “generally considered safe” to eat raw-milk cheese, CFIA said, but noted it can cause “serious health effects” for children, older adults, pregnant women and people with weakened immune systems.

People in those risk groups should avoid eating raw-milk cheeses — especially soft and semi-soft varieties such as Brie, Camembert or blue-veined cheeses, CFIA said. They should eat pasteurized-milk cheeses instead, and make sure the cheese is a pasteurized product either by reading the label or asking the seller. — AGCanada.com Network

Related stories:
B.C. halts all cheese sales from Gort’s plant, Sept. 21, 2013
B.C. raw-milk cheeses linked to E. coli outbreak, Sept. 18, 2013