"Pink Slime" Controversy and Rumors of Mad Cow Disease Cause a Stir in the Meat Products Industry
May 08 2012 - 8:20AM
Marketwired
The meat products industry has been improving but has not reached
the levels they were at before the economic downturn. Large scale
US meat producers have faced significant headwinds in their
homeland due to the US government's shift towards supporting small
scale farming and production. Cattle prices saw a significant drop
last month amid rumors of mad-cow disease. The Paragon Report
examines investing opportunities in the Meat Products Industry and
provides equity research on BRF Brasil Foods SA (NYSE: BRFS) and
Hormel Foods Corporation (NYSE: HRL).
Access to full reports can be found at:
www.ParagonReport.com/BRFS
www.ParagonReport.com/HRL
Cattle futures have rebounded after a run of bad news in the
industry. Rumors of mad-cow and the controversial "pink slime" have
provided some unwanted attention to the meat industry in recent
months. The discovery of mad-cow disease in a California dairy cow
ignited fear in investors who still have memories of 2003, when
mad-cow disease saw exports of American beef fall as much as 75
percent. "The market reacted to it more than the consumer," said
Troy Vetterkind, president of Vetterkind Cattle Brokerage in
Chicago. "Beef demand isn't stellar, but it's sure not hurt."
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BRF ended 2011 reporting strong earnings. The company exceeded
forecasted growth in net operating revenue and investments despite
the turbulent economic environment which permeated the
international market throughout the period. Net sales amounted to
R$ 25.7 billion, 13.3% higher than 2010, largely sustained by good
performance in the meat segment of the domestic market, food
services and export market. Net income reached R$ 1.6 billion,
equivalent to an increase of 97% compared with last year.
Hormel Foods Corporation, based in Austin, Minn., is a
multinational manufacturer and marketer of consumer-branded food
and meat products, many of which are among the best known and
trusted in the food industry. The company will issue its earnings
release before the markets open on Wednesday, May 23, 2012, and
will host a conference call at 8:30 a.m. CT (9:30 a.m. ET).
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