Swift Being Sold to Brazilian Meat Processor JBS

[joedales]

Swift & Co Being Sold to Brazilian Meat Processor JBS.

Swift & Co., the third largest processor of fresh beef and pork in the U.S., announced Tuesday that it is being sold to Brazilian-based JBS S.A., according to a Swift press release.

Under the agreement, J&F, the leading shareholder of JBS S.A., will acquire Swift in an all-cash transaction representing an enterprise value of approximately $1.4 billion. The transaction value includes $225 million in cash for all Swift stock held by HM Capital and Booth Creek Management Corporation, its investment partner in the September 2002 acquisition of Swift from ConAgra Foods, Inc., and the assumption by J&F of approximately $1.2 billion in Swift debt plus all transaction-related expenses.

With nearly $10 billion in annual sales, Swift & Company is the third-largest processor of fresh beef and pork in the U.S. and the largest beef processor in Australia.

JBS is the leading beef processing company in Latin America and 23 plants in Brazil and 6 in Argentina.

For J&F, the strategic combination of Swift and JBS-industry leaders with no market overlap-will create the world's leading beef processor.

Though industry critics claim consolidation is hurting the producer's ability to find a market to sell to, Swift officials see this as a win-win transaction.

"The transaction also will benefit Swift's customers, employees and business partners, by creating a combined SwiftJBS enterprise in which Swift will retain its organizational identity, customer and supplier relationships and substantially all of its employees and leadership team while becoming part of the world's largest beef processor," said Edward Herring, a partner at HM Capital.

The completion of the sale is subject to anti-trust reveiw, according to both companies. The transaction is expected to be finalized in July.

[Willowcreek]

USDA will be be loosening the FMD rules on Brazil, just as they did with Argentina for Tyson- and Brazillian beef will be coming into/thru the NAFTA countries within a year...

And since all beef is marked with a USDA inspected stamp and passed off as a US commodity- their will be no way for the consumers to differentiate the Brazilian from the US, Canadian, Mexican, Argentine, or wherever...

And the current average price for fat beef in Brazil is less than $60 cwt.....

[Pulseman]

Hello Joe,

Nothing against camelina, camelino, but think, why has nobody piccked this up for past 100 years? I grew a small amount several years ago. If you have problems, holding some of your canola in the combine, camelina will be 50 fold worth, it runs like water through every little crack. Cost of production is low, I give that, the people interested to buy it are looking to produce oil at lower cost then canola. The food market with a premium is small and not developed, with a few players trying to convince producers to stick out there neck.

It is a long way from something we new as ****seed to a giant we now know as canola. Maybe the world is ready for a new giant.

Let's wait and judge in ten years.

Pulseman

[grassfarmer]

Loosening the rules on FMD? what rules?
Here is an article from a UK farm paper last week:

BRAZIL’S BEEF industry has no traceability, no bio-security, non-existent movement controls and, at best, a farcical grasp of the rules it is meant to be abiding by to export to the European Union.

This is the damning verdict of a party of Irish beef farmers who returned to the British Isles last week after an 3000km road trip around three of Brazil’s beef-producing states, during which they visited 42 farms, carrying out interviews with owners, managers and former government officials.
Reporting in the Irish Farmers Journal, farmer and journalist Justin McCarthy declared that the investigation had utterly disproved official claims that Brazil’s beef industry was making progress towards parity with Europe’s meat safety regime.
Instead, what they found were farms where cattle were freely traded from areas under restriction for foot-and-mouth disease, and where eartags were only fitted in time to qualify for export premium.
“On the farms we visited, traceability was something that could be conjured up a few days before cattle were fit for slaughter and only if factories were prepared to pay a premium price,” reported Mr McCarthy.
“On the vast majority of farms, the only cattle that had tags were those within two to three weeks of slaughter. This allowed farmers to sell the cattle as being tracked and claim a price premium equivalent to €10 to 15 on each animal slaughtered.”
Mr McCarthy travelled round Brazil with John Bryan and Kevin Kinsella of the Irish Farmers Association, all of which had been to Brazil one year previously on a shorter study trip. A key focus of their investigation was, therefore, to verify official claims of improvements in traceability systems since their last visit.
“Last year our investigation highlighted that, on the vast majority of farms visited, there was no system of tagging and that branding or ear notching was the main form of identification. One year on, nothing has changed.”

What a sham eh? kind of like the US and their BSE/ non traceability.

[grassfarmer]

Hey Pulseman what's going on? I guess you didn't mean to post this reply here? I did post a reply here which has never appeared what's going on Joe?

I'll try again in response to Willowcreek and his comment that USDA will be be loosening the FMD rules on Brazil. This article from a UK farm paper last week:

"BRAZIL’S BEEF industry has no traceability, no bio-security, non-existent movement controls and, at best, a farcical grasp of the rules it is meant to be abiding by to export to the European Union.
This is the damning verdict of a party of Irish beef farmers who returned to the British Isles last week after an 3000km road trip around three of Brazil’s beef-producing states, during which they visited 42 farms, carrying out interviews with owners, managers and former government officials.
Reporting in the Irish Farmers Journal, farmer and journalist Justin McCarthy declared that the investigation had utterly disproved official claims that Brazil’s beef industry was making progress towards parity with Europe’s meat safety regime.
Instead, what they found were farms where cattle were freely traded from areas under restriction for foot-and-mouth disease, and where eartags were only fitted in time to qualify for export premium.
“On the farms we visited, traceability was something that could be conjured up a few days before cattle were fit for slaughter and only if factories were prepared to pay a premium price,” reported Mr McCarthy.
“On the vast majority of farms, the only cattle that had tags were those within two to three weeks of slaughter. This allowed farmers to sell the cattle as being tracked and claim a price premium equivalent to €10 to 15 on each animal slaughtered.”
Mr McCarthy travelled round Brazil with John Bryan and Kevin Kinsella of the Irish Farmers Association, all of which had been to Brazil one year previously on a shorter study trip. A key focus of their investigation was, therefore, to verify official claims of improvements in traceability systems since their last visit.
“Last year our investigation highlighted that, on the vast majority of farms visited, there was no system of tagging and that branding or ear notching was the main form of identification. One year on, nothing has changed.”

Willowcreek, It sounds a bit like the US BSE surveillance program and your non-existent ID system.

[Willowcreek]

That won't bother the USDA- The Chinamen put anything they want in rice and wheat and the US still allows anything from China imported-- the Chinese have Avian Influenza but the USDA is in the process of opening poultry imports from China...Argentina has FMD in half their country-- USDA poo poo's it away...Same with Canadian beef/cattle-- whats a few dozen Mad Cow positives, 1/2 of which are POST feedban, which proves Canada's prevention methods haven't worked...
Anything as long as the Corporate Multinationals are making money and stuffing the right politicians pockets...

Nope- by next year I bet Brazilian beef will be on the counters of the US and Canadian stores (except none of the poor consumers will know its Brazilian)...Might even beat the Canadian OTM's if they have enough money going the right places...

[Cedar]

Sooo...Willowcreek...what would you rather have coming into your country...Canadian OTM's (with extensive and honest bse testing and reporting procedures in place), or South American beef...??????

Please don't take this the wrong way, but let's try and remember that in the past (perhaps also in the present, maybe even the future, cattle feed has been going back and forth like there was no border...hmmm!!!) Let's just have an honest look at the "big picture": Am I going nuts (hmmm..maybe already there!), but does it appear that we (especially in Canada) are being "pushed out of the way" to allow more imports from South America? What does this suggest? Maybe the best we can all do is choose the "lesser of two evils", both for ourselves as producers, and for our consumers, and try to work together as a North American team......??!!??

[rkaiser]

The only "team" that is working now is the "team led by the quarter back Johny "machine gun" Tyson, Cargil "the controller" running up the middle, and GW "I can stop the whole defensive line myself" Bush.

You are far from crazy Cedar - you simply have it figured out. Control of the food industry is far more powerful than control of even the energy industry.

[grassfarmer]

Not surprising given that food is a much more powerful weapon than energy.

[Willowcreek]

Cedar- I've said it many times- Canada is just a pawn that the multinationals use to play with- and will cast aside when done...And its the reason, I've said many times I can't believe that Canadian producers are so against having a way to identify their beef (COOL)- and market it as such- rather than just market it as commodity beef- to be thrown in the pot with the Argentine, Brazilian, Uruguain, Mexican, Aussie, etc. etc to the consumer and all passed off as the same.....

[rkaiser]

The conventional cattle marketing industry may be a pawn and you are right about identity Oltimer. But the most precious pawn that Cargill and Tyson have when it comes to the border issue is the one called Rcalf - and all of the little puppets who beleive that Canada has a worse BSE situation than good old US of A.

[Willowcreek]

Like I've said before- Kaiser- label it ALL so the decision on BSE or anything else is left to the consumers- then open it up...

But instead Canadians and their associations back the multinationals and fight M-COOL and are afraid to stand on their own two feet...

[rkaiser]

Come on Willow creek - Canadians and their associations - Americans and their associations - Ukrainians and their associations - Koreans and their associations.

Just forget about the BSE cherry picking that you do and you know that you and I could have a few Coors or Molson's - wait a minute are they not the same company as well. Maybe we could make some of own beer - LABEL IT and sell it along side our steaks as soon as you get your butt in gear and buy a Galloway bull and help old Ben Roberts start his branded beef program - Country of origin included - just like mine.

[Cedar]

Rkaiser: Reply posted Jun 4, 2007 7:30 Control of the food industry is far more powerful than control of even the energy industry.

Well, RK, guess either I'm not crazy, or you and me both are, eh?! Sometimes I give my head a shake and I can see things from the "other side", like my city slicker relatives, and figure maybe I just been hangin' out in the back 40 toooooo long. They just have no clue, and probably don't want to, either. If they could see things the way I do from out here, they would be so totally freaked out, just like the other 99% of the population....if only there was a way to make them understand. Bizarre stuff...like...a few years ago my son was, well, very porky (I'll make this long story short), he'd been drinking a lot of pop and I saw a show that explained how the fructose (corn sugar) in the pop is not properly burned up by the body, etc. Eventually he cut it down from about 2 litres a day to 1 glass, then none, changed nothing else in his diet, still eats beef (even the "fatty' stuff) like a starving timber wolf, and you should see him now.....a fencepost! Also, just heard from my other son that he knows someone who went through the same thing...he now weighs about half as much as he used to....just from cutting out the pop!!! Hmmm....strange how that goes, eh? And the diet stuff is even worse, apparently very addictive and still makes you fat! Hmmm...maybe the "pop guys" have a deal with the "diet pill guys"!!???!??

How could this possibly be in a world where beef and the fat it contains are what makes you fat (ha!), and we've been cutting that down for 30 years and still the problems continue and also multiply! I really hate to be so damned cynical and negative, but...geeze....the evidence is out there....just not visibile enough, I guess.

(Sorry...guess that wasn't so short, after all!)

[Cedar]

Willowcreek Reply posted Jun 4, 2007 13:05 Cedar- I've said it many times- Canada is just a pawn that the multinationals use to play with- and will cast aside when done...

No kiddin': that's exactly why we...the producers of North America....need to work together! But how??!?!!...is the question!

And its the reason, I've said many times I can't believe that Canadian producers are so against having a way to identify their beef (COOL)- and market it as such- rather than just market it as commodity beef- to be thrown in the pot with the Argentine, Brazilian, Uruguain, Mexican, Aussie, etc. etc to the consumer and all passed off as the same.....

OK, WC: I have just one request: PROVE IT! (that this is happening) (Sorry for the skepticism, but since you're an rcalfer and we've all read the flatout, outright lies you guys like to spread about our product....) I mean, how the heck do we ever believe anything you say now? And, by the way, how can you guys possibly expect your consumers to ever believe anything you tell them now? ...at least any who have taken the time to investigate ....probably not too many actually do that, eh, dude... more power to ya, huh?!??!!!

By the way...who says all us Canadian producers are so against id'ing our beef anyhow? Just show us the way......huh?..... (Might help if you guys got your bloodsucking packers outta here!)

P.S.: OK, now you can "take it the wrong way, if you wish"!