Alabama business roundup: Headlines from across the state

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Here’s a roundup of some of the top business headlines from across the state this week: BP paying Pelham $106,760 to settle claims in Deepwater Horizon litigation

BP’s landmark $18.7 billion settlement agreement involving litigation surrounding the 2010 Deepwater Horizon oil spill in the Gulf of Mexico is resulting in a $106,760 payment to the City of Pelham to resolve any claims.

The Pelham City Council tonight held a special meeting to approve a resolution concerning the settlement terms and releasing BP and other parties in the case from any claims.

Under terms of the settlement for Pelham, the city will receive a payment from BP Exploration and Production Inc. for $106,760, minus 15 percent for attorney’s fees paid to Gulas Law Firm as well as up to $1,000 for the out-of-pocket expenses incurred by the firm.

After the 15 percent and other payment to the Birmingham-based Gulas Law Firm, the city’s share will be roughly $90,000. The settlement money will go into the city’s general fund.

Council President Rick Hayes said during tonight’s special meeting the city had until July 15 to approve the release agreement and settlement terms. Hayes would not discuss any further details of the action, citing a confidentiality order in the case.

Before the council’s vote, Hayes said the “judge’s order said we have to be very confidential about everything.” He declined to answer any questions about the matter after the meeting.

Gov. Robert Bentley and Attorney General Luther Strange on July 2 announced that Alabama will receive $2.3 billion in the settlement with BP for environmental and economic damages resulting from the Deepwater Horizon oil spill.

For Alabama, the settlement amount includes economic damages at $1 billion paid over 18 years and environmental damages of $1.3 billion.

Among the other financial aspects of the settlement that involves Alabama, Florida, Louisiana, Mississippi and Texas, up to $1 billion will be paid to resolve claims made by more than 400 local government entities.

The Birmingham City Council this week approved a resolution accepting a settlement totaling more than $1 million for economic losses associated with the oil spill.

Birmingham Business Journal: Blue Bell to conduct first trial production runs at Sylacauga plant

Blue Bell has announced it will begin trial runs at its Sylacauga location, which will be the first plant to begin work since a listeria contamination halted production across the company’s footprint in April.

The Brenham, Texas-based Blue Bell Creameries notified the U.S. Food and Drug Administration and Alabama state health officials that the company hopes to begin test production of ice cream products at its Sylacauga facilities in the next several weeks, according to a report from our sister publication the Houston Business Journal.

The first instance of listeria was confirmed at the Sylacauga production facility in June.

The plant then laid off a third of its workforce, with 48 Sylacauga workers being temporarily laid off.

While the company is optimistic about test productions, no firm dates have been set for when trial operations will begin or when products will return to markets.

“When production resumes at the Sylacauga plant, it will be on a limited basis as the company seeks to confirm that new procedures, facility enhancements and employee training have been effective,” said Blue Bell in a statement. “Ice cream produced will be closely monitored and tested. Upon completion of this trial period, Blue Bell will begin building inventory to return to the market.”

Birmingham Business Journal: Intermark Group lands $6M Alabama Tourism Department contract

Birmingham-based Intermark Group on Monday was announced as the new agency of record for the Alabama Tourism Department’s $6 million annual advertising contract by director Lee Sentell.

The agency will succeed Luckie & Co. on the account, according to a release from the Alabama Tourism Department.

“Luckie has created memorable and successful campaigns based on the themes our agency has suggested, including branding ‘Sweet Home Alabama.’ Most importantly, the amount of tourism expenditures in the state has increased by 80 percent to $11.8 billion during the 12 years that Luckie has handled the account,” said Sentell.
Additionally, he said the tourism department has won numerous regional and national tourism awards, including a silver award last month from the Advertising Federation of America for the Alabama Civil Rights Trail.

The two Birmingham-based agencies – who are also the largest agencies in the state – were the lowest bidders among 12 companies that submitted proposals

State contracts are limited to two years before rebidding, and are awarded based on a combination of agency capabilities and cost, the release said.

Intermark will be tasked with creating the 2016 “year of” marketing campaign, to be announced this fall.
The agency will also handle the state’s bicentennial celebration from 2017 through 2019, Sentell said that Intermark’s psychology driven marketing approach, along with their deep experience in digital marketing, makes them a great choice to carry on a long tradition in the growth of tourism in Alabama.

Intermark, with 117 full-time employees, has recent brand experience with Toyota, Mohawk, Krispy Kreme, BBVA Compass, Blue Cross Blue Shield of Alabama, the U.S. Space & Rocket Center and Talladega Superspeedway.

Dothan Eagle: Peanut acreage up, cotton down due to Farm Bill, diversification options

Local agriculture officials said good weather and potentially promising Farm Bill provisions have resulted in a productive peanut season so far.

But lower market prices and fewer financial options for commodities like cotton might cause some farmers to reconsider what they plant in future years.

The Alabama Peanut Producers Association reported an estimated 215,000 planted acres of peanuts statewide, with 212,000 of those acres expected to be harvested. That number is up from the 189,000 acres of peanuts harvested last year, which the Alabama Farmers Federation said resulted in 400 million pounds of peanuts valued at $118 million.

The U.S. Department of Agriculture showed the F arm B ill, formally known as the Agriculture Act of 2014, allowed producers of peanuts and some other commodities to choose between Price Loss Coverage (PLC) or Agricultural Risk Coverage (ARC) that would assist farmers financially “if market forces cause substantial drops in crop prices or revenues.”

Cotton was not a commodity that was covered under the two programs, and some believe less cotton was planted as a result. USDA data showed an estimated 300,000 acres of cotton were projected to be planted in Alabama this year, which is down about 48,000 acres from last year.

The farm bill did give upland cotton producers the temporary Cotton Transition Assistance Program to provide payments for their base acreage in 2013. Officials like William Birdsong, an extension specialist with the Alabama Cooperative Extension System, said they believe the F arm B ill still had some flaws.

Birdsong said the lowest cotton acreage since the 1980s was planted, and that both peanut and cotton harvests are experiencing cheaper prices.

“The F arm B ill has enticed farmers to plant more peanuts because of the lack of opportunity for profit in other crops, and therefore the possibility or profit of growing peanuts through a F arm B ill program leaves them with little choice other than to increase peanut planting,” Birdsong said.

“All farmers are somewhat stressed from the last couple crop years. Financially it’s been a trying time, so farmers especially need a good crop with the prices being depressed in peanuts and cotton.”

The USDA reported peanuts a t between $403 and $428 per ton this week based on the type of peanut, which was slightly lower than prices in August of last year.

USDA reported cotton was expected to bring in an estimated 65 cents per pound. That number was down from more than 80 cents per pound in May 2014, according to the Southeast Farm Press.

Houston County Commissioner Doug Sinquefield, who farms in Ashford, said he believe s the biggest percentage of the commodity crops this year are peanuts. He said farmers were given the option early on to see whether PLC or ARC worked best for them, and that the programs allowed farmers to evaluate their processes for the best production.

“Overall I believe they’ve been good for everybody,” Sinquefield said.

“Some farmers have been reorganizing to take advantage of the good safety nets, like crop insurance programs. Farmers who didn’t contract their peanuts could have some worries, but as of right now with the weather the way it is, this seems to be a good year compared to the past.”

As far as the condition of cotton and peanuts growing in the Wiregrass, Birdsong said both commodities are in the “mid-season management” period after having been planted earlier than in most years. Farmers are hopeful for appropriate weather while working to clean, spray, weed and apply fungicides and nitrogen to keep crops in good condition.

Birdsong said this year gives farmers the opportunity to seriously examine their operations.

“This is more of a survival year. Whether you’re leaning more on the F arm B ill program or cutting inputs or diversifying crop commodities, or even taking another job, the farmer this year is making the effort to survive financially so that they can experience those better prices in the future,” he said.

“If they’re not in business, they won’t experience the better years.”

Sinquefield said while the farm bill’s programs provide some protections, farmers can’t rely solely on what the government offers to determine what they’ll plant.

“Don’t plant peanuts trying to chase government payments – you just have to plant your peanuts and hope and pray for good moisture,” he said.

“The key to crops anyway is a good rotation for yield. I would say we have a really good growing season right now and with the timely rains we’ve had, it’s made a difference in keeping the crops growing compared to the past.”

Patrick Griffin of the Weights and Measures Division of the Alabama Department of Agriculture said buyers are already expecting an increase in peanut tonnage.

“Farmers , of course , always need a good year,” he said.

“We’re thinking this is going to be a real good year. We’ve been blessed. We hope and pray the trends continue.”


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