Saturday, November 22, 2008

VeraSun Energy Requests Permission to Void Corn Contracts with 10-day Notice

Farmers are up in arms over the request by VeraSun Energy for a Delaware judge to give them permission to void corn contracts with a notice of 10 days.

The arguments by farmers was the action would take away their ability to sell corn to other potential buyers, while at the same time essentially killing expected revenue.

Because farmers have a contract with VeraSun, they would have to legally hold the corn until the they find out if VeraSun was continuing the contract, hindering them from lining up another buyer until a notice is officially received.

I don't have much sympathy for the farmers in this situation, as the farmers didn't mind lining their pockets with taxpayer subsidies for corn-based ethanol. When all you do is continue to beg at the government trough, and not become good at business, this is the risk you'll always take.

With the filing of the bankruptcy in Delaware, any agricultural organization or farmer would probably have to travel to the state to get legal counsel recognized by the government there. As of early Friday there hadn't been any objections filed in the case. Claiments had until 4 p.m. Friday to file.

On the 2nd of December the request by VeraSun will be reviewed at a hearing.

The entire ethanol fiasco needs to be abandoned, as it is a grotesque failure that continues to be one of the most idiotic wastes of time, energy and money.

For the quarter ending September 30, VeraSun reported a net loss of $476.1 million.

Friday, November 14, 2008

Update: AgFeed Industries, Inc. Reports Record 3rd Quarter Financial Results, Revises 2008 Earnings Guidance

NEW YORK, Nov 13, 2008 /Xinhua-PRNewswire via COMTEX/ -- AgFeed Industries, Inc. (FEED) , the largest commercial hog producer and the largest premix feed company in China, today announced record financial results for the quarter ended September 30, 2008:

-- Revenue grew year over year by 316% to approximately $49.4 million from $11.9 million
-- Gross Profit increased 279% year over year to $12.3 million from $3.2 million
-- Comprehensive Income increased by 279% to $8.5 million for the third quarter of 2008 from $2.3 million for the third quarter of 2007
-- Income from Operations of $9.3 million, an increase of 353% from 2007 period
-- Net Income of $8.2 million, up 296% from 2007 Q3 Net Income of $2.1 million and 110% from 2008 Q2 Net Income of $3.9 million
-- Earnings per Share of $0.25, up 222% from 2007 Q3 Earnings per Share of $0.08
-- Revises 2008 earnings estimate downward
-- Strategic discussions with leading global genetic companies

Record 3rd Quarter Revenue

AgFeed recorded increased revenues in its hog production and premix feed production businesses Revenue from premix feed sales was $12.4 million, up from $11.9 million in the third quarter of 2007 and $12.2 million in the second quarter of 2008. Revenue from hog production was $37.0 million in the third quarter of 2008, up from $23.4 million in the prior quarter. The increase in premix feed sales was due to expanded independently owned, exclusive AgFeed retail distribution store sales (now more than 900 stores), broadened commercial hog farm direct sales channels, coupled with the effects of two previously implemented price increases in their premix feed products. Expanding customer recognition of the quality "AgFeed" brand name products continues to stimulate revenue growth. The increase in revenue from hog sales was, in part, due to the successful integration of recently acquired producing hog farms. AgFeed sold more than 150,000 hogs during the quarter, up significantly from production in the prior quarter.

Record 3rd Quarter Earnings

AgFeed reported premix feed related income from operations of $2.6 million, compared to $2.2 million in the corresponding quarter of 2007 and $1.7 million from the immediately preceding quarter. These results reflected 20% net income margins and were in line with the Company's expectations. Strong premix feed earnings performance was driven by efficient cost management, increased economies of scale on raw material purchases, and long term annual supply agreements entered in early 2008 for key raw materials. Reported hog sales related income from operations for AgFeed were $6.9 million, up slightly from the prior quarter. AgFeed's income from hog operations for the quarter is reflective, in part, of the successful integration of 28 hog farms acquired since late 2007. The anticipated synergistic benefits derived from acquired hog farms, including increased operating efficiencies, economies of scale, advanced disease control initiatives and centralized cash/accounting management have exceeded the Company's initial targets.

Earnings Guidance

AgFeed's business is being negatively impacted by, among other factors, a decrease in the price of hogs, a surge in the supply of swine, and the overall economic downturn in China and worldwide. We are conscientiously maintaining efficient cost of production. Additionally, the Company has made a strategic determination to scale back its planned expansion of the hog farm business during the current economic downturn.

As a result of these factors, the Company believes that its previous 2008 earnings guidance of adjusted net earnings per share guidance of between $1.10 and $1.20 per share is no longer accurate. Management believes that adjusted earnings per share should range from $0.55 to $0.65 for 2008. AgFeed believes that its premix feed production will remain steady and that it is on course to produce approximately 650,000 hogs on an annual basis. Due to the current volatility in the markets in China and worldwide, the Company has chosen not to provide earnings guidance beyond 2008, and retracts the guidance it had previously provided for 2009.

Management Comments

Our record results were driven primarily by volume increases, offset by the results of a surge in the market supply of swine, peak pricing of key raw ingredients and a consumption slowdown that compressed margins.

Our board and management remain totally committed to enhancing shareholder value through solid earnings growth and good corporate governance. We will continue to execute our business plan in a favorable business environment in which we see our strong operating efficiencies and increased economies of scale benefiting our financial performance. Our management's agreement to enter into share lock up agreements is a reflection of our total commitment to the interest of our public shareholders.

We operate in a generally favorable market environment. China produces approximately 600 million hogs annually, making it the largest market for pork in the world. More than 1.2 billion Chinese consume pork as their primary source of meat. 65% of all meat consumed in China is pork. Chinese consumers consume more pork each year than the rest of the world combined. We are geographically positioned to take advantage of the most favorable segment of this market. Our hogs are sold in some of the wealthiest regions in China -- Shanghai and Guangdong -- where some of the highest hog prices in China are captured due to the large local population and its high income levels as well as deep pork consuming cultures. Historically, hog prices in our target markets have been approximately 5.5% higher than China 's national average prices. Our hog farms are strategically located to effectively access this market. Our hog farms are in Shanghai, Guangdong, Guangxi, Jiangxi, Fujian and Hainan provinces, neighboring provinces to our consumer markets. These geographic locations represent more than 67% of China 's total annual hog production. AgFeed is a market leader in these regions.

Additionally, we have a feed cost efficiency advantage. Our feed manufacturing plants are located in the same regions as our hog farms, permitting significant cost savings on raw material purchases from which greater economies of scale are realized, thanks to our integrated feed to hog production model.

AgFeed management has a realistic understanding of our business through the last 13 years of our successful corporate history. We have highly skilled founders/managers who are industry experts. We believe the pork consuming Chinese population of approximately 1.2 billion people will continue to demand fresh pork on a daily basis. Additionally, it is our belief that China's rapid urbanization, and the reduction in backyard hog production, will present long- term opportunities for commercial production systems to develop and grow. AgFeed intends to continue to capitalize on this situation to position AgFeed as a quality, low cost producer of premix feed and hogs going forward.

AgFeed Completes Acquisition of Previously Announced Commercial Hog Farms

In late October 2008, AgFeed completed the acquisition of all of the equity interest in two commercial producing hog farms located in the Guangxi Province, PRC. These farms have an aggregate annual hog production capability of approximately 29,000 hogs, with existing facilities for additional expansion.

Commodity Prices Relevant to Our Premix Feed Business

The current quarter has seen corn and soybean meal prices begin to decline. Corn represents about 70% of our total feed component in swine diets. Corn costs in China have moved up slightly with world markets but have dropped recently, declining approximately 11% from the average price for the first six months of 2008. Our increased economies of scale on raw material purchases resulted in a price discount of approximately 4.8% on our overall raw materials costs, compared to market prices in general. With expected increases in seasonal consumption along with seasonal supply pressure AgFeed believes that it may see improving margins in our premix feed business in the coming months.

Efficient Hog Farm Management Process

AgFeed believes that a combination of local hog farm management and centralized operations is efficient to the overall success of its hog farm business. As a result, the Company has maintained on-site operational management and staff of each of its commercial hog farms following acquisition and has established a pre-determined set of corporate operating efficiency standards, which is applicable to all farms. The Company further has established centralized systems for all operations to further maximize operating efficiency, including: accounting and internal control; raw material purchasing; disease prevention and bio-security response teams; and sales and marketing operations. This management system has been successfully implemented in the past and will continue to be utilized going forward in our hog farm operations.

Hog Genetics Program

AgFeed intends to implement a hog genetics program. We believe a quality hog genetics program utilizing the right genotypes could reduce hog production cost from our current cost levels. AgFeed is currently in strategic discussions with several leading global hog genetics companies in an effort to further this goal.
About AgFeed Industries, Inc.

NASDAQ Global Market listed AgFeed Industries ( is a US company with its primary operations in China. AgFeed has two profitable business lines -- premix animal feed and hog production. AgFeed is China's largest commercial hog producer in terms of total annual hog production as well as the largest premix feed company in terms of revenues. China is the world's largest hog producing country that produces over 600 million hogs per year, compared to approximately 100 million hogs in the US. China also has the world's largest consumer base for pork consumption. Over 65% of total meat consumed in China is pork. Hog production in China enjoys income tax free status. The pre-mix feed market in which AgFeed operates is an approximately $1.6 billion segment of China's $40 billion per year animal feed market, according to the China Feed Industry Association.

SAFE HARBOR DISCLOSURE NOTICE: The information contained in this earnings release and the attachments is as of November 13, 2008. The Company assumes no obligation to update any forward-looking statements contained in this earnings release or the attachments as a result of new information or future events or developments.
This earnings release and the attachments contain forward-looking information about the Company's financial results and estimates, business plans and prospects that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or business plans and prospects. Among the factors that could cause actual results to differ materially are the following: the availability and prices of live hogs, raw materials, fuel and supplies; food safety; livestock disease; live hog production costs; product pricing; the competitive environment and related market conditions; operating efficiencies; interest rate and foreign currency exchange rate fluctuations; access to capital; the cost of compliance with environmental and health standards; actions of the PRC government; governmental laws and regulations affecting our operations, including tax obligations; the ability to make effective acquisitions at the prices we expect and successfully integrate newly acquired businesses into existing operations; the success of our research and development activities, changes in generally accepted accounting principles; uncertainties related to general economic, political, business, industry, regulatory and market conditions; any changes in business, political and economic conditions due to the threat of terrorist activity; and other risks and uncertainties described in the Company's Annual Report on Form 10-K for the year ended December 31, 2007 and in its subsequent Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements because actual results may differ materially from those expressed in, or implied by, the statements. Any forward-looking statement that the Company makes speaks only as of the date of such statement, and the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.


September 30, December 31,
2008 2007

Current assets:
Cash and cash equivalents $15,565,123 $7,696,209
Other current assets 34,800,935 10,381,719
Total current assets 50,366,058 18,077,928

Long term assets 74,285,990 4,992,336

Total Assets $124,652,048 $23,070,264


Total current liabilities $11,325,350 $3,569,738

Convertible note, net 3,152,734 -

Total Liabilities 14,478,084 3,569,738

Minority interest 1,957,197 -

Stockholders' Equity
Total stockholders' equity 108,216,767 19,500,526

Total Liabilities and
Stockholders' Equity $124,652,048 $23,070,264


Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited)

Net Revenue $49,426,274 $11,888,283 $97,208,685 $23,757,731

Cost of Revenue 37,124,058 8,645,218 70,438,683 16,961,534

Gross profit 12,302,216 3,243,065 26,770,002 6,796,197

Operating expenses 2,991,817 1,185,701 6,962,328 2,540,418

Income from
operations 9,310,399 2,057,364 19,807,674 4,255,779

income (expense) (828,031) 17,515 (5,910,313) 18,822

Income before
minority interest
and provision for
income taxes 8,482,368 2,074,879 13,897,361 4,274,601

Minority Interest
in Subsidiaries (64,309) - (425,403) -

Income before
provision for
income taxes 8,418,059 2,074,879 13,471,958 4,274,601

Provision (benefit)
for income taxes 201,904 (295) 414,993 (40,756)

Net income $8,216,155 $2,075,174 $13,056,965 $4,315,357

Weighted average
Basic 33,267,815 27,026,756 31,049,732 25,778,831
Diluted 33,557,457 27,194,479 31,377,267 25,799,624

Earnings per
Basic $0.25 $0.08 $0.42 $0.17
Diluted $0.24 $0.08 $0.42 $0.17


U.S. Contact:
Arnold Staloff
Independent Board Member
AgFeed Industries, Inc.
Tel: 212-631-3510

Corporate Contact:
Summer Xie
Corporate Communications
AgFeed Industries, Inc.
Tel: 011-86-13767051503

Gerry Daignault
Chief Operating Officer
AgFeed Industries, Inc.
Tel: 615-480-7847

SOURCE AgFeed Industries, Inc.

Copyright (C) 2008 PR Newswire. All rights reserved

Bunge Acquires Corn Dry Milling Assets From J.R. Short Milling

ST. LOUIS, Nov. 14 /PRNewswire-FirstCall/ -- Bunge North America, the North American operating arm of Bunge Limited (NYSE: BG), announced that it has purchased the assets that J.R. Short Milling Company used in its traditional corn dry mill operations as well as the assets to operate its specialty product line. The purchase does not include J.R. Short's pellet division. Financial terms of the acquisition have not been released.

"This purchase enables us to balance our operations in a core North American business, corn dry milling, so that we now have two locations in the western half of the U.S. and two in the eastern half," said Todd Bastean, vice president and general manager, Bunge Milling. "This additional plant enables Bunge to better serve our existing customers and reach out to new customers with an expanded line of products."

Bunge expects to keep a majority of the employees currently working at the plant.

The plant in Kankakee, Ill., becomes Bunge Milling's fourth U.S. location. Other Bunge Milling plants are located in Danville, Ill., Atchison, Kan., and Crete, Neb.

About Bunge North America

Bunge North America (, the North American operating arm of Bunge Limited (NYSE: BG), is a vertically integrated food and feed ingredient company, supplying raw and processed agricultural commodities and specialized food ingredients to a wide range of customers in the livestock, poultry, food processor, foodservice and bakery industries. With headquarters in St. Louis, Missouri, Bunge North America and its subsidiaries operate grain elevators, oilseed processing plants, edible oil refineries and packaging facilities, and corn dry mills in the U.S., Canada and Mexico.

About Bunge Limited

Bunge Limited (, NYSE: BG) is a leading global agribusiness and food company founded in 1818 and headquartered in White Plains, New York. Bunge's over 25,000 employees in over 30 countries enhance lives by improving the global agribusiness and food production chain. The company supplies fertilizer to farmers in South America, originates, transports and processes oilseeds, grains and other agricultural commodities worldwide, produces food products for commercial customers and consumers and supplies raw materials and services to the biofuels industry.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," "will," "expect," "anticipate," "believe," "intend," "estimate," "continue" and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve, to differ materially from those expressed in, or implied by, these forward-looking statements. The following important factors, among others, could affect our business and financial performance: our ability to complete, integrate and benefit from acquisitions, divestitures, joint ventures and strategic alliances; estimated demand for the commodities and other products that we sell and use in our business; industry conditions, including the cyclicality of the agribusiness industry and unpredictability of the weather; agricultural, economic and political conditions in the primary markets where we operate; and other economic, business, competitive and/or regulatory factors affecting our business generally. The forward-looking statements included in this release are made only as of the date of this release, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstance.

SOURCE Bunge North America

Monday, November 10, 2008

Bunge Ltd Ends Bid to Acquire Corn Products International

When the board of Corn Products International (CPO) recently announced it could no longer support the acquisition bid from Bunge Ltd (BG) for the company, the deal had little chance of going forward, and Bunge confirmed that today, announcing it had withdrawn its bid.

The primary reason wasn't the credit markets, because the deal was to be financed with stock. Rather, it was the fall in stock price of Bunge which made the deal undesirable to the Corn Products board.

Bunge was hoping to become a significant player in the finished corn products market, expanding from its core food processing business.

Now that the deal won't go forward, we'll probably see a new CEO announced soon to replace outgoing Corn Products CEO Sam Scott.

Wednesday, November 5, 2008

Corn Products International Board No Longer Supports Bunge Acquisition

While the announcement by the Corn Products International Inc (CPO) board that it was no longer supporting the proposed acquisition by fertilizer and oil seed giant Bunge Ltd (BG) is a surprise, it can't be called a shocking decision.

With both companies plunging in stock price, especially Bunge (BG), and Corn Products International recently revising their guidance upwards, the deal doesn't look near as profitable for Corn Products' shareholders than when the original offer was made.

Under the terms of the proposed deal, Bunge retains a "force the vote" clause wherein they can bring the deal directly to the shareholders to vote on, no matter what the board says or does. Bunge said it won't be changing any of the terms of the deal.

The original offer was for $4.4 billion, but since then shares in bunge have declined by 63 percent, while Corn Products has fallen by 44 percent.

Most analysts think the chances of a merger are pretty slim at this time, and the major event to watch is if Corn Products hires a new CEO to replace departing CEO Sam Scott. If they do, the assumption is they're going to go on and operate as an independent company rather than proceed with the merger.

Bunge is still weighing its options as whether to continue pursuing it through forcing a vote or not.

Tuesday, November 4, 2008

Corn Products International Raises Guidance for Year

Corn Products International (CPO) has raised its guidance for the year based on a good third quarter.

The original guidance from the company was for between $3.15 to $3.25 a share, which now has been revised upward to $3.40 to $3.60 a share. Analysts were looking for around $3.29 a share.

Profits for the quarter increased to $88.1 million, or $1.15 a share, from last year's $51.1 million, or 66 cents a share. That growth of 72 percent.

Revenue for the quarter came in at $1.16 billion, up from $938.7 million during the same period last year; a 23 percent increase.

Similar to Archer Daniels Midland (ADM), less international exposure helped them in relationship to currency exchange rates.

Later this year the company will be taken over by Bunge LTD (BG). The date has been moved back to December from November, as the economic crisis has driven the prices of the two companies down by half or more.