February 23, 2018

Today's News Summary:

The news today opens reporting that General Mills agreed to buy Blue Buffalo Pet Products Inc. for about $8 billion, adding the maker of natural dog and cat food to a portfolio that includes Haagen-Dazs ice cream and Cheerios cereal. The Minneapolis-based company plans to pay $40 a share for Blue Buffalo, which sells “antioxidant-rich” dog nutrition and walnut-based kitty litter, the companies said in a statement Friday. The deal comes as global food giants snap up makers of natural and organic products, which are outpacing mainstream brands in growth.

In other news, Perdue Farms has implemented a controlled atmospheric stunning (CAS) system at its Milford, Delaware, processing facility as part of a move toward more humane methods of slaughter. The Milton facility is the country’s largest organic poultry plant, processing 1.2 million chickens per week.

A number of trade agreements, such as the Trans-Pacific Partnership (TPP) and a proposed Mercosur/EU trade agreement, look set to start having an impact on global beef trade in 2018. At the same time, applications of blockchain technology are now being widely developed in the food industry, with opportunities to realise benefits further up the supply chain growing, according to the RaboResearch Beef Quarterly Q1 2018.

U.S. burger chain Wendy’s Co on Wednesday missed Wall Street estimates for same-restaurant sales in North America as fewer customers visited its outlets amid intense competition with bigger rivals such as McDonald’s Corp. The sales miss comes despite Wendy’s more diverse “4 for $4” value menu, which had helped the burger chain’s sales gain in the past few quarters.

Brookshire Grocery Co. (BGC) and Southeastern Grocers (SEG) on Thursday announced they have entered into an agreement under which BGC will acquire eight Winn-Dixie stores from SEG in New Roads, Breaux Bridge, Franklin, New Iberia, Abbeville, Crowley, Rayne and Eunice, all in South Louisiana. The stores will become part of BGC’s Super 1 Foods banner.

Tyson Foods announced a change in its water usage procedures for chickenhouses, tapping into an Eastern Shore aquifer that has a higher replenishment rate than the source that provides most of the Eastern Shore of Virginia’s drinking water. The announcement follows a growing debate over the impact of chickenhouses on the Shore’s drinking water supply.

Lastly today, our weekly retail column looks at how so far in 2018, Urner Barry’s Weekly Retail Feature Beef Index is closely following patterns established over the past few years. The weekly index has been modestly under the 3-year average 6 out of 8 weeks this year. The roast complex has also been following a similar track, and has spent equal amounts of time above and below the 3-year average so far. The weekly average for the retail roast feature complex is $4.98 per lb. The weekly average for retail steaks is currently $7.82 per lb., up 8% from the 3-year average. The steak complex has been featured lower than the 3-year average 5 out of 8 weeks so far in 2018.

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By Linda Lindner


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