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Message Boards Settings Food Technology Service (VIFL) - Quote Info
2011 Earnings Estimate input      4-Nov-09 01:59 pm    
Here is my thesis. Please find flaws.

Last spring, VIFL received certification as the only irradiation facility to irradiate oysters, to eliminate vibrio, a bacteria in many gulf oysters harvested during the warmest months.

Irradiation is 1 of 4 FDA approved post harvest process methods, and the only process able to pasteurize oyster.
Irradiated oysters have been taste tested, with over 70% saying there is no difference in taste comparing it with fresh. Other methods give less desirable taste results.

Effective 2011, the FDA announced a warm season ban on gulf oyster sale , unless treated by a post harvest process. .

Post harvest processing, is used on 15% of 100 million pounds of shell oysters for raw consumption.

News articles have reinterpreted the new rule as a requirement that all gulf oysters be irradiated during warm months, links below.

1. Irradiation is the only method to pasteurize oysters.
2. Unlike the other inferior methods, irradiation will not require additional capital outlay.
3. Superior taste.
4. Irradiation is no more expensive, 4 to 13 cents an oyster. There are 3-4 oyster to the pound, so costs are 14 to 39 cents a pound.
5. Irradiation is the only method able to handle the volume, processing up to 80,000 pounds in 2 hours.

No scientific objections are suggested in news articles to date. Only economic interests are claimed.

Irradiation results in a safer, better tasting, more desirable oyster at the lowest processing cost, used in government projections for the oyster industry, 14 cents a pound. It faster, less labor intensive, and does not require capital outlays.

Science in the Public Interest, which has called for post harvest oyster processing, reports the government has determined that the cost to industry is $ 14,000,000. The average warm season gulf oyster harvest, is 100 million pounds, estimating cost at 14 cents a pound.

The FDA cost estimate assumptions post harvest processes offer benefits offseting cost, such as longer shelf life. There is no reason to believe quick freezing offers benefits over irradiation. It costs more. Oysters can be frozen after irradiation.

Look for the financial impact of the initial oyster irradiation done this past quarter. Processing costs of 14 cents a pound fits government estimates.

As an illustration a single 80,000 pound truck load of oysters processed for $0.13 a pound yields $10,400 in revenue.

To process 100 million pounds requires 1250 truck loads at 80,000 pounds and 2500 hours or about 100 hours a week processing time, during the warm months.

To process 100% of the oysters requires 50 trucks a week, resulting in revenue of $520,000 a week for about 26 weeks.

Margins of 40% are conservative. Profits could be about $280,000 weekly or $3,980,000 for 2 quarters annually. On a per share basis, this could be $2.50 a share profit.

http://www.tri-parishtimes.com/articles/...
http://www.neworleanscitybusiness.com/vi...
http://www.physorg.com/news174760044.htm...

FDA projects cost of new policy is $14,000,000 annually.
http://www.goodnutrition.org/new/henney_...

Earnings are expected to be announced next week, hopefully with a comment on oysters.


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lsp91326

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2011 Earnings Estimate input
lsp91326 (1 Rating) 4-Nov-09 01:59 pm  
 
Great post for a long term investment!I`m in at 1....
eugenehollo... Rate it 7-Dec-09 07:20 am  
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Food Technology Service Inc. (VIFL)

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