Weekly livestock news for February 17, 2020
Canadian court orders major agriculture firms to provide documents
A Canadian federal court has ordered a group of major agriculture companies to hand over records and communications as part of an antitrust probe, Reuters reports. The businesses have been accused of trying to block online farm supply startup Farmers Business Network from expanding in Canada. Bayer, Corteva, BASF, Cargill, Univar and Federated Co-Operatives Limited have been ordered to give records to the court, part of a probe by Canada’s Competition Bureau into the companies. Bayer, Corteva, BASF and Cargill said they’d cooperate with the investigation.
Bayer CEO fights for shareholder confidence
Bayer’s acquisition of Monsanto, owner of the controversial Roundup weedkiller, was “one of the most disastrous acquisitions in German corporate history,” Ruth Bender writes in The Wall Street Journal. But as the company nears settlement of more than 42,000 lawsuits over Roundup, it looks possible Bayer CEO Werner Baumann will be able to fix the trouble. Bayer and plaintiff lawyers are working on a deal that could lead to a roughly $10 billion payout from the agriculture company—a total that many analysts say would be good for Bayer. Still, Baumann doesn’t have long to secure the deal: The company has its next shareholder meeting scheduled for April 28. If Baumann doesn’t present at least a partial solution to the legal battle then, he could face a no-confidence vote from investors, which would be his second after receiving one last April.
Elanco Animal Health announces new financing for Bayer deal
Elanco Animal Health announced it successfully priced its first lien senior secured credit facilities consisting of: 1) a term loan B facility in an aggregate principal amount of $4.275 billion with a maturity of seven years, and 2) a revolving loan facility providing up to $750 million with a maturity of five years. The amount of the term loan B facility was upsized from the initial amount of $2.425 billion due to market demand. Elanco intends to use the proceeds from the term loans under the new credit facilities, together with the proceeds from recently completed common stock and tangible equity unit offerings, to finance the cash portion of its planned acquisition of Bayer’s animal health business. This development means Elanco has obtained substantially all of the financing necessary for the acquisition, according to the company.
Plaintiffs push forward on RFID lawsuit
The U.S. Department of Agriculture filed a motion to dismiss a lawsuit challenging the agency’s plan to implement a livestock traceability program using radio frequency identification tags, but the plaintiff lawyers are pushing ahead, Meat + Poultry reports. USDA’s Animal and Plant Health Inspection Service originally planned to discontinue providing free metal ear tags at the end of 2019, in its effort to transition to RFID tags. But the agency withdrew that plan after industry stakeholders opposed the rule and filed a legal complaint arguing USDA lacks the authority to mandate RFID use, among other things. USDA argues that since the original plan has been withdrawn, the case shouldn’t be heard in court. But the New Civil Liberties Alliance, which filed the lawsuit on behalf of the plaintiffs, wants a judge to hear the case.
Research finds two more swine viruses spread in animal feed
Classical swine fever and pseudorabies virus are capable of surviving trans-oceanic shipping in multiple feed ingredients, according to a recent paper from Kansas State University. Like African swine fever, the two viruses appear to last longer in certain feed ingredients than in the laboratory media used to grow the viruses for experiments, Feed Strategy reports. The research indicates that at least three of the four viruses of greatest concern to swine producers remain stable in animal feed for long periods of time. Foot-and-mouth disease is the fourth, and while researchers haven’t studied the persistence of FMD in feed, a Kansas State researcher said studies of similar viruses suggest it could be transmitted in several ingredients. The specific ingredients the viruses survive in vary depending on the virus.
Arizona introduces cage-free egg legislation
A bill introduced this month in the Arizona House of Representatives would phase out the use of cages in egg production, as well as eggs sold from cage-raised hens, Feedstuffs reports. If passed, the law would go into effect at the end of 2020, beginning with larger space requirements for hens raised in the state, before implementing completely cage-free housing at the end of 2024. It would also prohibit selling and transporting eggs and egg products that don’t meet the requirements. While the bill has been called a compromise between Hickman’s Family Farms and The Humane Society of the United States, those organizations haven’t confirmed that information. The United Egg Producers said it’s neutral on the legislation.