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Many people know that the Federal Reserve sets interest rates in order to loan money to other banks so they can keep cash flowing throughout the U.S. financial system. Mostly, this works great for everyone involved. But, sometimes, banks and thrifts need a little extra cash, mostly so they can meet the reserve requirement (the minimum amount of deposits banks need to be considered in good financial shape).
To meet the reserve, the Fed has what's known as the discount window, which allows banks to borrow money for a short period of time at a higher interest rate (called the discount rate) than the official Federal Funds rate.
It's called a window because it used to be an actual teller window, where banks would go to borrow from the federal government. Now, it's used more as a lender of last resort. In fact, banks prefer to borrow from one another than directly from the discount window, since the interest owed can be cheaper and going to the discount window tends to imply that the bank is in a spot of trouble.
The Fed, too, doesn't like banks borrowing this way, which is why the discount rate is always higher than the target rate. It also requires banks to collateralize the loans, meaning they have to turn over liquid assets, such as loans or CDs, to the Fed in order to get the money. As with any loan, the banks get the underlying collateral back when they pay off the balance.
Home / Markets / Industries / Retail
Wednesday, July 23, 2008
MARFRIG Announces New Alliance with ConAgra Foods on Beef Jerky
Comtex
SAO PAULO, Brazil, July 23, 2008 /PRNewswire-FirstCall via COMTEX/ ----Marfrig Group (Bovespa: MRFG3), one of the largest producers of beef and beef by-products in Latin America, announced today that it has acquired the Pemmican beef jerky brand and related production equipment from ConAgra Foods, Inc. through its subsidiary Mirab USA Inc. for USD 25 million in cash.
Marfrig and ConAgra Foods have also entered into a sales and distribution agreement for the 5 years up to 20th July 2013 under which ConAgra Foods will sell and distribute the Pemmican brand beef jerky for Marfrig within its existing Consumer Products Division. Marfrig will also co-pack "Slim Jim" beef jerky for ConAgra Foods pursuant to a co-pack agreement between ConAgra Foods and Mirab USA. This agreement does not include the "Slim Jim" beef stick business.
Marfrig has diversified sources to produce beef jerky from its units in Brazil, Argentina and Uruguay with a combined capacity of 27 tons/day and a packaging facility in Mirab USA.
History of the brand
Though the Pemmican brand has been around for only 35 years, its tradition goes back a few hundred. The word "pemmican" is Native American in origin and was used to describe a high-protein food source made from dried meat and berries.
Because it was highly nutritious, spoil-resistant, and good for traveling, it was ideal food for their way of life and it became one of the most important survival tools of the early American frontier. Pemmican continues to be a favorite among everyday explorers, whether the exploration takes you only as far as across the city or around the world.
"The acquisition of the Pemmican brand strengthens Marfrig's participation in the branded meat snacks market," says Ricardo Florence, Marfrig's IRO. In addition, the transaction will provide to the Group a wealthy partnership with ConAgra Foods in the United States, enhancing the Group's investment in food distribution, reaching its final clients with a well-known and traditional brand."
"As one of the world's largest producers of beef, Marfrig can leverage its capabilities to produce Pemmican more efficiently, while also investing more heavily in innovation and marketing," said Paul Lapadat, president, Consumer Foods Snacks, ConAgra Foods. "We remain committed to our snacks business, and will be focusing our energies moving forward on our core snacks portfolio, which includes Slim Jim and our popcorn and seeds products."
About Marfrig:
Marfrig Frigorificos e Comercio de Alimentos S.A. (Bovespa: MRFG3), is one of the leading beef and beef-product producers in Latin America. Marfrig works with an innovative service concept always tuned to the market needs in the development and application of new technologies and with a presence in several sectors including FOOD SERVICE and industrialized products. As of July 2008, the Marfrig Group has 18 cattle slaughtering units, 18 processing plants, 3 lamb slaughtering units, 5 hog slaughtering units, 5 poultry slaughtering units and 2 trading houses, with a slaughtering capacity of 21,100 heads of cattle/day, 6,400 hogs/day, 780,000 birds/day and 8,400 lambs/day and 1,030 tonnes/day of further processed and industrialized products, consolidating its positioning in the market as one of the world's leading meatpacking companies.
The Marfrig Group has over 24,000 employees, including the international companies. It also has a distribution center in Santo Andre (SP) and a tannery in Promissao (SP) with a processing capacity for 1,500 hides/day, besides termination feed lots located in the cities of Guapiacu, Pereira Barreto and Tangara da Serra. For more information, please visit www.marfrig.com.br/ri
About ConAgra:
ConAgra Foods, Inc., (NYSE: CAG) is one of North America's leading packaged food companies, serving consumer grocery retailers, as well as restaurants and other foodservice establishments. Popular ConAgra Foods consumer brands include: Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM and many others. For more information, please visit www.conagrafoods.com
Media Information MZ Media Relations Mariela de Castro Aguilar/Simone Luciano (55 11) 3529-3866/3883 imprensa@mz-ir.com
SOURCE Marfrig Group
http://www.marfrig.com.br/ri
Copyright (C) 2008 PR Newswire. All rights reserved ********************************************************************** As of Saturday, 07-19-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated a DOWNTREND on 06-16-2008 for CAG @ $22.62. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights reserved.
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