FinancialBuzz.com News Commentary
NEW YORK, Feb. 6, 2020 /PRNewswire/ -- Over the course of the last decade, advancements in technology have helped transform the livestock farming market. Precision livestock farming technology made traditional livestock farming activities more efficient and economical. Additionally, the increasing global demand for both meat and dairy products, extended profitability and high yield and its minimal impact on the environment and climate change are fueling the growth of the precision livestock farming market. As a result, it directly impacts the global meat industry. Meanwhile, the market value of processed meat is expected to cross the trillion-dollar mark by 2024, which is a phenomenal increase from its 2019 valuation of USD 587.15 Billion, according to data provided by Market Data Forecast. And as the demand for meat rises worldwide, so must the production of meat. In fact, most of the world's meat is produced in Asia, which generated 140 million metric tons of meat in 2016. Pork and poultry are the most widely produced types of meat. And, with the increasing demand for meat products, demand for livestock behavior and health monitoring applications has also spiked. Within the precision livestock farming market, it is expected to have the highest CAGR during the forecast period of 2019 to 2014. Furthermore, the high growth in this segment is to be driven predominantly by the increasing adoption of hardware devices such as sensors, RFID tags & readers and livestock collars for early detection of disease in livestock. The importance of early disease detection is especially prevalent now, as the Coronavirus outbreak in China becomes a major global concern. Overall, the precision livestock farming market is estimated to be worth USD 3.0 Billion in 2019 and is expected to reach USD 4.6 Billion by 2024 while registering a CAGR of 9.2% from 2019 to 2024. China Xiangtai Food Co., Ltd. (NASDAQ: PLIN), Tyson Foods, Inc. (NYSE: TSN), The Kraft Heinz Company (NASDAQ: KHC), Pilgrim's Pride Corporation (NASDAQ: PPC), Hormel Foods Corporation (NYSE: HRL)
Infectious diseases spreading to livestock is a major issue for the farming industry. Eric Toner, a Senior Scientist at the Johns Hopkins Center for Health Security, explained to Business Insider that "Infectious diseases will continue to emerge and re-emerge. I think it's part of the world we live in now… We're in an age of epidemics because of globalization, because of encroachment on wild environments." The new coronavirus (named "2019-nCoV"), which originated in Wuhan, China, is the most recent example of a devastating outbreak. Poorly regulated live-animal markets mixed with illegal wildlife trade provide viruses with opportunities to spill over from wildlife hosts into the human population. As a result, U.S. hog futures sank to contract lows earlier last week, because of worries about the coronavirus causing chaos in the market. "Most of the focus I think remains on an unknown impact of China's expanding coronavirus issues," INTL FCStone said in a note to clients according to Reuters. "We're all aware the hog markets have long been counting on massive export business to China as our outlet for record large pork production, but now they're seeing a sharp decline in consumerism, travel restrictions, and now even three port closings until mid-February, which heightens exporters' anxieties further." New modern regulations, monitoring, adoption of technologies and integrity of farmers as well as food processing companies should help manage the outbreak, reducing risk of spreading infectious diseases.
China Xiangtai Food Co., Ltd. (NASDAQ: PLIN) announced today, "its supermarket sales growth of 300% during Chinese New Year 2020 compared to the same period of last year despite of the ongoing 2019 Novel Coronavirus .
To meet the public demand for food and to stabilize the pork price in the market, the Company has increased its efforts to ease the negative impact of the 2019 Novel Coronavirus on food supplies by continuing operating its business with transparency and integrity, keeping its pork price fair and stable, and timely delivering quality fresh pork and other freshly processed meat products to supermarkets in Chongqing every day.
Zeshu Dai, Chairwoman of the Board and Chief Executive Officer of the Company, commented, 'The outbreak of the 2019 Novel Coronavirus has shadowed China and general population in many aspects. In order to ensure that consumers' basic living needs are met, supermarkets in various places still operate as usual. However, during the Chinese New Year and the coronavirus outbreak, many food suppliers have raised product prices due to temporary shortage in the supply chain, which has caused some distress to local residents.'
Ms. Dai continued, 'As a socially-responsible public company, we made our own efforts in maintaining sufficient meat supply, stabilizing market price, and striving to minimize the impact of this unfortunate event however we can. Consumption demand will likely rise once businesses resume their operations. We will continue to supply local supermarkets with sufficient fresh and quality meat at a reasonable price in order to meet consumers' demand.'
2019 Novel Coronavirus (2019-nCoV) is a virus (more specifically, a coronavirus) identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China. Early on, many of the patients in the outbreak in Wuhan, China reportedly had some link to a large seafood and animal market, suggesting animal-to-person spread. However, a growing number of patients reportedly have not had exposure to animal markets, indicating person-to-person spread is occurring. At this time, it's unclear how easily or sustainably this virus is spreading between people. The latest situation summary updates are available on The Centers for Disease Control and Prevention's web page 2019 Novel Coronavirus, Wuhan, China.
About China Xiangtai Food Co., Ltd.: Headquartered in Chongqing, China, China Xiangtai Food Co., Ltd, is a food company primarily engaged in pork processing. The Company's operations span key sections of the pork processing value chain, including slaughtering, packing, distribution, and wholesale of a variety of fresh pork meat and parts. Primarily focused on pork products, the Company also offers other fresh and processed products, including beef, lamb and poultries. Through its core values, the Company is committed to maintaining the highest standards of food safety, product quality, and sustainability to provide high-quality, nutritious, and tasty food in a responsible manner through its portfolio of trusted brands. For more information, please visit http://ir.plinfood.com."
Tyson Foods, Inc. (NYSE: TSN) announced earlier in August that it has reached an agreement to invest in the foods division of Grupo Vibra, a Brazilian producer and exporter of poultry products. Once completed, the deal will give Tyson Foods more flexibility in serving customers in key global markets. "This investment will enable us to access poultry supplies in Brazil to meet the growing needs of Brazilian customers and of priority demand markets in Asia, Europe and the Middle East," said Donnie King, group president, international & chief administration officer for Tyson Foods. "It's part of our strategy to develop a more flexible supply chain and mitigate the volatility of our previous model, which relied primarily on U.S. exports." Since last year, Tyson Foods has expanded its global presence through the acquisition of Keystone Foods, which includes operations in China, South Korea, Malaysia, Thailand and Australia, and BRF's poultry businesses in Thailand and Europe. Over the next five years, it is estimated that nearly 98 percent of protein consumption growth will happen outside the U.S. "That's why we're growing our business outside the U.S.," said King. "As the world population continues to grow, Tyson will grow with it."
The Kraft Heinz Company (NASDAQ: KHC) announced back in November that its subsidiary Oscar Mayer highlighted their new weighted Oscar Mayer BAEcon Blanket wraps. Designed with strips of sizzlin' Oscar Mayer Bacon, the Oscar MayerBAEcon Blanket is a 15-lb. weighted blanket that will wrap you in so much bacon love, you can actually feel it during cuffing season (and beyond). "Oscar Mayersets the golden standard of bacon, and we want to help our fans maintain a high standard this cuffing season with the ultimate bae(con)," says Matt Riezman, associate director of marketing for Oscar Mayer. "Just as our bacon is reliable and cooks up perfectly every time, we're confident the Oscar MayerBAEcon Blanket will be the reliable companion you need to get through the winter."
Pilgrim's Pride Corporation (NASDAQ: PPC) announced on October 15th, 2019, the completion of the previously announced acquisition of Tulip Ltd from Danish Crown. Tulip Ltd will operate as a business unit within Pilgrim's. The transaction was unanimously approved by the Pilgrim's Board of Directors and was funded with cash on hand, valuing Tulip Ltd at £290 million (or approximately $354 million based on a 1.22 exchange rate as of August 27, 2019). Tulip Ltd. is the UK's largest pig farmer and producer of pork and it is our fully integrated supply chain, affording complete accountability and traceability from field to fork, combined with customer focused approach to business.
Hormel Foods Corporation (NYSE: HRL) subsidiary, Applegate, announced this week the new "Go Applegatarian" Movement to Build A Conscious Community Around Consuming Cleaner Meat. The "Applegate Clean Meat Cleanse" is the first program of the mission-driven brand's new "Go Applegatarian" movement. Applegate wants to add a new type of "tarian" to the lexicon of eating ideologies and defines an Applegatarian as someone who consciously chooses clean, craveable meat for ethical, environmentally responsible and delicious reasons. "The 'Go Applegatarian' movement is an extension of our brand's mission- Changing The Meat We Eat®– and we couldn't be more excited to launch it," said Applegate President John Ghingo. "Applegate's beliefs in the way animals should be raised and how food should be produced can completely change the way consumers think about and understand meat, and the Applegatarian movement will create a community for consumers who want to enjoy meat in a socially responsible way."
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