June 30, 2004

Land O'Lakes to restate profits for seven years...General Mills sales and earnings on the rise...USDA further tests two cows for BSE...Guida to co-pack organic milk...Dairy Food Safety...Class-action discrimination suit against Wal-Mart approved...Nash Finch exits Hispanic-focused retail market...Odds-and-Ends...Stock Market Ticker...More news at www.idfa.org.

DAIRY BUSINESS BRIEFS

Overstatement of $19 million in profits over a seven-year period by the Carlisle, Pa., Land O'Lakes butter/butter powder processing facility is behind LOL's need to restate earnings from 1997 thru the first quarter of 2004. The Arden Hills, Minn.-based cooperative reports accounting practices at its South Middleton Township Dairy Plant are being audited by KPMG, LOL's accounting firm. Discrepancies in recording of estimates for milk receivables and payables fees are the cause of the original inflation of profit statements. Net earnings were overstated by about $1.4 million in the first quarter of 2004, by $2 million in 2003 and between $2 million and $5 million annually in 1997 through 2002. (Company report; The Patriot-News, Harrisburg, Pa.; Saint Paul Pioneer Press)

General Mills reports overall net sales rose 5 percent to $11.07 billion for the 53-week fiscal year 2004 (ending May 30). Net earnings for the year grew 15 percent to $1.06 billion. The Minneapolis-based food company notes volume sales for its Yoplait yogurt products increased 10 percent as a result of ongoing growth of established lines and "good contributions" from Yoplait Nouriche yogurt beverages. (Company report)

The U.S. Department of Agriculture (USDA) announced today that it is testing a second cow for BSE (bovine spongiform encephalopathy or Mad Cow Disease), in follow-up to an inconclusive result on a rapid test done on the animal. As in the first test case announced last Friday night, USDA has not disclosed the location or type of cow, but confirmed that it did not enter the human food supply. Results from the first cow tested will be available later this week. Results from the second test are expected in another 4-7 days.
     USDA has said that its new rapid-screening process, which began on June 1, will likely result in more inconclusive tests for BSE. USDA plans to test 268,000 animals in the next 12-18 months and has already conducted about 8,600 tests. An animal health expert with Colorado State University said that one inconclusive result is expected for about every 10,000 rapid tests conducted by the USDA. The same expert said that as lab workers gain more experience with the rapid tests, inconclusive rates could fall to as low as one in 50,000. BSE is not transmitted through milk, and the safety of milk has not been questioned since BSE was found in a cow in Washington state last December. (USDA, Reuters)

Guida's Milk and Ice Cream has signed on as New England co-packing partner for LaFarge, Wis.-based Organic Valley Family of Farms. New Britain, Conn.-based Guida will process all four Organic Valley HTST white milks (whole, 1%, 2% and skim) starting July 7. Guida's newly expanded facility was certified organic earlier this year. (Company reports)

DAIRY FOOD SAFETY

The FBI has determined that a leaky container is apparently the culprit behind the mysterious poisoning of dairy cows in Enumclaw, Wash. Toxic material stored above the cattle feeding area by the dairy farmer apparently corroded its container and dripped onto the afflicted cattle. A total of 10 cows were splashed with the reddish substance and developed welts; three of the cows died. A three-week federal investigation included media frenzy and a FBI raid of the home of an acquaintance of the dairy farmer. The Food and Drug Administration's Forensic Chemical Center laboratory in Cincinnati has completed testing milk samples from the 10 cows, and reports no identifiable risk; no milk from the 10 animals entered the food supply. Concentrations of chromium in all samples of the affected cows were well below the level of 100 parts per billion allowed for drinking water by the Environmental Protection Agency. Chromium levels in all milk samples tested from the cows that came into contact with the toxic substance but did not become ill were below the minimum detection level of less than 1 part per billion. (Seattle Times, FDA report)

A Bangkok kindergarten class is the latest to be hospitalized as a result of milk powder quality issues in Asia. Pesticide-contaminated milk powder sent 32 children (ages 4 and 5) to two hospitals on Monday, with three listed as seriously ill. (The New Zealand Herald)

CUSTOMER CLIPS

What is expected to be the largest civil sex-discrimination lawsuit on record will proceed against Wal-Mart following class-action suit approval by a federal judge. The decision will allow about 1.6 million women to join the suit brought by six California women alleging systemic pay and promotion bias against female Wal-Mart employees. More than two-thirds of the Wal-Mart workforce is female, but less than one-third of its managers are female and women are paid less than men in every department of the store. U.S. District Judge Martin Jenkins in San Francisco took nine months to decide whether to expand the lawsuit to include virtually all women who work or have worked at Wal-Mart. Most large U.S. class-action lawsuits are settled before trial; in a 1997 case covering 25,000 women, Home Depot settled a sex discrimination case for $104 million. (The Christian Science Monitor)

Nash Finch Co.'s Hispanic-centered grocery chain plans have been derailed. The Minnesota-based retailer and distributor is closing its six Avanza stores, including three in Chicago open for less than a year. The format, with a name which translates to 'advance,' was introduced in May 2002 in Denver; Nash Finch originally planned expansion to include up to 20 Avanza stores in Chicago by 2008. The company reports that Chicago store results dragged down company-wide retail profits. (Chicago Tribune)

IDFA NEWS

Managing Allergens in Dairy Plants Manual Available
IDFA's "Best Practices for the Management of Allergens in Dairy Plants" manual includes background information on allergens and discusses the process for creating a food allergen awareness program in a plant. The guide also includes case studies on how companies have avoided pitfalls and reduced the possibility of cross-contact of products in plants. To order a copy, click here. http://store.idfa.org/

ODDS-AND-ENDS

Cheese made from moose milk sells for about $500 per lb. at upscale hotels and restaurants in Sweden. Varieties of the cheese can also be sampled or purchased at the Moose House, 59-acre home to the moose dairy farm and other attractions catering to about 25,000 visitors per year. The seven-year venture started as a take on fluid moose milk facilities in Russia. The farm's three milking moose cows each weighs about 1,100 lbs. and yields about one gallon of milk per day between May and September; the farm produces about 660 lbs. of cheese annually and plans to offer products for export. (Associated Press)...Meanwhile, buffalo milk mozzarella was recently defined as 'the most prized of the fresh mozzarellas,' in the food section of the The Times Union based in Albany, N.Y...A 27-year-old intruder at a Dairy Queen in Groton, Conn., was shot and killed by a DQ manager shortly after midnight on Monday. The intruder apparently entered the store as the manager was alone and closing down from Sunday night. The 51-year-old manager was treated at a local hospital for a head injury; the intruder was shot once in the back and his death has been ruled a homicide. (Associated Press)

STOCK MARKET TICKER

As of 6/29/04, market close.

Company/Symbol		Last Trade		Change over Previous Close		Change over Last Week's D-brief
ConAgra Foods/CAG Dean Foods/DF Dreyer's/DRYR General Mills/GIS Groupe Danone/DA* Hershey Foods/HSY Ingles Markets/IMKTA Kraft Foods/KFT Kroger/KR Ruddick Corp./RDK Safeway/SWY Saputo/SAP.TO SuperValu/SVU Unilever PLC/UL Weis Markets/WMK Wimm Bill Dann/WBD Winn-Dixie/WIN		27.05 37.06 78.97 46.12 17.60 45.93 11.25 31.20 18.05 21.99 25.18 31.89 30.76 39.54 36.05 13.94 07.07		-0.26 +0.39 -0.03 +0.22 -0.12 +0.70 +0.25 +0.20 +0.03 +0.24 +0.58 -0.23 +0.16 -0.09 +1.05 -0.54 +0.38		-0.65 +0.24 -0.08 +0.26 N/A +0.51 +0.04 +0.26 +0.21 +0.37 +0.19 -0.26 -0.64 -0.02 +2.34 -1.10 +0.43
* On June 15, 2004, Group Danone stock (DA) split 2:1. Source: Yahoo! Finance

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D-brief is written by Dairy Field magazine, a Stagnito Communications Inc. publication, www.dairyfield.com. It is provided for the benefit of the industry by the International Dairy Foods Association (IDFA), www.idfa.org.

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