TOP STORIES

 

Sanderson Holders Again Reject Antibiotics Proposal -- Market Talk

1702 ET - Sanderson Farms' shareholders rejected again--albeit by a narrower margin--a shareholder proposal to phase out the use of antibiotics in chickens. The vote was 8.2M votes in favor and 10.1M against vs. 5.71M to 12.4M a year ago. Rival poultry processors like Tyson Foods, Pilgrim's Pride and Perdue Farms have increasingly moved to eliminate antibiotics from chicken flocks. Sanderson said in an annual proxy filing that it has a "detailed contingency plan" to eliminate those drugs if competitive pressures require and estimates that it would wean its entire chicken operation from antibiotics within 12 months. Shares close down 1.5% at $131.44, up 38% over the past 12 months. (maria.armetnal@wsj.com; @mjarmental)

 

Proposed Rules Would Allow Meat-Packers to Slaughter Hogs Faster

COLDWATER, Mich. -- Proposed rules allowing meat-packers to slaughter hogs faster and play a bigger role in policing food safety are intended to free up government inspectors while making plants more efficient. But the rules, which could take effect this year, have drawn criticism.

Consumer advocates question whether companies can guarantee the cleanliness of their pork while workers take on some tasks previously reserved for U.S. Department of Agriculture inspectors. Meanwhile, worker-rights groups say speeding up slaughter lines would strain workers whose jobs are already difficult and dangerous.

 

Texas Roadhouse Reports Revenue, Profit Growth

Texas Roadhouse Inc. (TXRH) reported its fourth-quarter revenue and profit rose as traffic gains helped the steak-restaurant chain achieve its 32nd consecutive quarter of same-restaurant sales growth.

The Louisville, Ky.-based company reported a profit of $28.6 million, or 40 cents a share, up from $20.7 million, or 29 cents a share, a year earlier. Revenue jumped 13% to $545.1 million.

 

STORIES OF INTEREST

 

Tyson Looking for Deals, but Not Pinnacle -- Market Talk

16:50 ET - Tyson Foods is touting the meatpacker's efforts to reinvent itself as a packaged food company, and could do more acquisitions to bulk up -- but probably not Pinnacle Foods. Tyson CEO Tom Hayes tells attendees at the annual Consumer Analyst Group of New York conference that the meat giant is looking for fast-growing protein brands, but "immediately added that Pinnacle Foods does not have much protein in its portfolio," according to JPMorgan analysts. Tyson vaulted ahead in packaged foods with its 2014 takeover of Hillshire Brands, which at the time had struck a deal to buy Vlasic pickle and Log Cabin syrup supplier Pinnacle. According to JPM, "many investors" have been wondering recently whether Tyson might take a look at Pinnacle. (jacob.bunge@wsj.com; @jacobbunge)

 

A2 Milk, Fonterra Deal A Win With Investors -- Market Talk

1639 ET - A2 Milk Company's newly-minted strategic partnership with the world's largest dairy exporter Fonterra Co-Operative Limited has seen A2's share price, which had already roughly quadrupled last year, rise 16% in early trade on Wednesday to an all-time high of NZ$10.80. A2 has experienced very strong growth in market share, and one of the few issues analysts have seen with the stock is whether it could continue to grow at such a strong level without boosting its supply of milk. Under the deal, Fonterra will manufacture A1 protein-free products for certain priority markets in Southeast Asia and the Middle East exclusively for the A2 Milk Company, as well as giving Fonterra an exclusive licence for the production, distribution, sale and marketing of a2 Milk-branded fresh milk in New Zealand. (ben.collins@wsj.com)

 

FUTURES MARKETS

 

Cattle, Hog Futures Start Week Higher

Livestock futures rose after the long weekend.

Cash prices for physical cattle bounced late last week, with meat-packers across the country's major feeding regions paying $130 per 100 pounds on a live basis for cattle to slaughter. That was $4 above the previous week, a sharp uptick prompted by tighter slaughter-ready supplies and a higher futures market. Sales on a dressed basis, another way of pricing physical cattle, rose to $205, $5 higher than a week earlier.

 

CASH MARKETS

 
Zumbrota, Minn Hog Steady At $41.00 - Feb 20 
 

Barrow and gilt prices at the Zumbrota, Minn., livestock market are steady compared to Monday at $41.00 per hundredweight. Sow prices are steady compared to Monday. Sows weighing 400-450 pounds are at $47.00-$49.00, 450-500 pounds are $47.00-$49.00 and those over 500 pounds are $51.00-$53.00.

The day's total run is estimated at 125 head.

Prices are provided by the Central Livestock Association.

 
Estimated U.S. Pork Packer Margin Index - Feb 20 
 
This report reflects U.S. pork packer processing margins. The margin indices 
are calculated using current cash hog or carcass values and wholesale pork 
cutout values and may not reflect actual margins at the plants. These 
estimates reflect the general health of the industry and are not meant to 
be indicative of any particular company or plant. 
Source: USDA, based on Wall Street Journal calculations 
All figures are on a per-head basis. 
 
Date     Standard Margin       Estimated margin 
         Operating Index         at vertically - 
                             integrated operations 
                                      * 
Feb 20       +$25.11             +$ 38.99 
Feb 19       +$21.84             +$ 36.26 
Feb 16       +$19.07             +$ 34.35 
 
* Based on Iowa State University's latest estimated cost of production. 
A positive number indicates a processing margin above the cost of 
production of the animals. 
 
Beef-O-Meter 
This report compares the USDA's latest beef carcass composite 
values as a percentage of their respective year-ago prices. 
 
                                 Beef 
          For Today             Choice  112.6 
      (Percent of Year-Ago)     Select  110.8 
 
USDA Boxed Beef, Pork Reports 

Wholesale choice-grade beef prices Tuesday rose $3.35 per hundred pounds, to $215.92, according to the USDA. Select-grade prices rose $2.97 per hundred pounds, to $210.40. The total load count was 113. Wholesale pork prices rose $1.27, to $78.54 a hundred pounds, based on Omaha, Neb., price quotes.

 

(END) Dow Jones Newswires

February 20, 2018 17:40 ET (22:40 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.