In The News This Month – January 2022
Editorial
We’ve made it one month into the new year and topics that were hot in 2021 are still making headlines this month. Of course, you can’t have a month without a few news articles mentioning Covid-19 and its effect on food demand. Once again, we’re seeing empty grocery store shelves and according to OpenTable, dine-in restaurant meals were down 22% in January. It seems like Omicron has shifted us back to the beginning of the pandemic where we were all eating at home more. However, Dr. Swanson, an ag economist at Wells Fargo, predicts that as we put Omicron behind us, we might see a restaurant recovery in the summer. If that’s the case, it is something to look forward to as I’m sure a lot of families would enjoy a night off from cooking!
With a lot of us eating at home and working from home, there’s been a steady shift in consumers purchasing, cooking, and eating habits. According to a presentation at this months Feed Strategy Conference during IPPE, consumers are looking for healthier and more sustainable products. Natural, organic, and sustainable products will only continue to grow in popularity. We’re also starting to see more and more pressure to eat less meat. According to a chief strategy officer from the North American Meat Institute, there’s been a lot of pressure from universities for consumers to reduce or eliminate animal protein from their diets. We have all seen the popularity of alternative protein products, but I’m still skeptical if these alternative proteins are healthier or just a trend.
Speaking of trends, Watt Poultry featured an article that was almost unbelievable. There’s a new fad on TikTok that advises viewers to marinate their chicken with NyQuil to treat cold and flu symptoms. Doctors had to warn TikTokers about the dangers of eating “sleepy chicken”. Apparently if you eat one of these marinated cutlets completely cooked it would be like consuming a quarter to half a bottle of NyQuil. Maybe we should just go back to the trend from years ago of “feed a cold, starve a fever”.
Another fascinating topic featured this past month, Snoop Dogg has applied to trademark the term “Snoop Doggs.” This one seems more genius than trendy to me. According to the application, this trademark will cover the categories of food including hot dogs, hot dog sausages, turkey sausages, and vegetarian sausages. Perhaps he’s performing at this years Super Bowl Half time show to promote his new “Snoop Doggs”, they would surely fit in a Super Bowl themed menu.
While we saw some light and interesting articles this past month, there was still a lot of attention on California’s Prop 12 enforcement. The Superior Court in California will halt enforcement of the proposition because of the continued delays in finalizing expected regulations. Also, still topping the news were cage-free conversion challenges. The Humane League recently called out several major foodservice chains for not yet committing to transition to cage-free eggs. The layer industry has been gradually transitioning to cage-free housing due to consumer and legislative pressure, however the U.S. layer industry is unlikely to meet the cage-free commitments. Although if you’re shopping at the grocery store this month in California you will only see cage-free eggs, which was a bit surprising.
Be sure to browse through the rest of the articles we featured from this past month. We hope you stay healthy this winter but remember not to make any “sleepy chicken”.
Monica Lizar
Account Manager
Aeros, a Cultura Company
Feed and Grains:
Global feed output jumps 2.3% in 2021
Global feed production increased 2.3% in 2021, according to the 11th annual Alltech feed survey, released on Jan. 25.
The survey, which includes data from more than 140 countries and more than 28,000 feed mills, found that international feed production increased to 1.235 billion tonnes, up from 1.187 billion tonnes in 2020.
The top 10 feed-producing countries in 2021 were China (261.424 million tonnes), the United States (231.538 million), Brazil (80.094 million), India (44.059 million), Mexico (38.857 million), Spain (35.580 million), Russia (33.000 million), Turkey (25.300 million), Japan (24.797 million) and Germany (24.506 million).
Read full article here
Viterra to acquire Gavilon for $1.13 billion
Viterra Ltd. announced it has reached an agreement to acquire many of the assets of Omaha, Nebraska, US-based Gavilon from Marubeni Corp. for $1.125 billion, plus working capital.
Gavilon originates, stores and distributes grains, oilseeds, as well as feed and food ingredients, to food manufacturers, livestock producers, poultry processors, soybean processors and ethanol producers worldwide. The company has 105 grain storage facilities and total grain storage capacity of 345.447 million bushels, according to Sosland Publishing’s Grain & Milling Annual 2022.
Gavilon was established in 2008 with the sale by Conagra Foods Inc. of its Trading and Merchandising business to Ospraie Management LLC Special Opportunities Fund in a $2.1 billion transaction. With the sale, the business was renamed Gavilon LLC. The business was later acquired by Marubeni for $2.7 billion in 2013.
Read full article here
ADM anticipates strong 2022 on top of record 2021
“Outstanding,” “excellent” and “superior” were three of the adjectives used by Juan Luciano, president and chief executive officer of ADM, to describe the fiscal 2021 performance of the Chicago-based company.
Net income at ADM in the year ended Dec. 31, 2021, totaled $2.71 billion, equal to $4.79 per share on the common stock, up 53% from $1.77 billion, or $3.15 per share, in fiscal 2020. In the fourth quarter, earnings totaled $782 million, or $1.38 per share, up 14% from $687 million, or $1.22 per share, in the same period a year ago.
Revenues in fiscal 2021 surged 32% to $85.25 billion from $64.36 billion. The year-over-year increase was driven by a strong fourth quarter in which sales climbed 28% to $23.09 billion from $17.98 billion a year ago.
Read full article here
Eggs:
Humane League: Foodservice slow to pledge cage-free eggs
A new report from the Humane League called out several major foodservice chains, including McDonald’s, Subway, Denny’s and more, for not yet committing to transition to cage-free eggs.
More than 100 foodservice chains have agreed to source only cage-free egg and egg products, including KFC, Burger King, Dunkin’, Krispy Kreme, Unilever, Nestlé, Aldi, InterContinental Hotels, Sodexo, Kraft Heinz, Compass Group, Shake Shack, Famous Brands, Costa Coffee, and Barilla, according to the report.
However, not all foodservice restaurants have made the pledge. The Open Wing Alliance, a global coalition of 80 major animal protection organizations in 63 countries, singled out McDonald’s, Subway, Denny’s, Chili’s, Outback Steakhouse, Panda Express, Telepizza, Five Guys, Darden and The Cheesecake Factory as foodservice brands who haven’t committed to a cage-free transition..
Read full article here
Sonny Perdue: Don’t let people put agrifood industry down
Industry needs to be proud of how they handle the complex supply chain and bring safe and nutritious food to consumers, former agriculture secretary says
At a time when the U.S. agrifood industry is under fire, Sonny Perdue remains one of its biggest advocates and cheerleaders.
Perdue, who served as U.S. secretary of agriculture under the previous presidential administration, was a guest speaker at the annual convention of the National Protein and Food Distributors Association on January 26 in Atlanta, Georgia. The NPFDA event was held in conjunction with the International Production & Processing Expo (IPPE).
Read full article here
Egg Week
USDA Weekly Egg Price and Inventory Report, January 26th 2022.
Market Overview
Unit revenue for Midwest Extra-large and Large sizes in mid-January was unexpectedly higher by an average of 9.1 percent this past week following a 13.3 percent drop in price over the previous week. Mediums were up 12.8 percent. The increase in price for all sizes this past was consistent with the fall in industry inventory to below 1.8 million cases. This suggests the need for retailers to continue refilling the pipeline with stronger consumer demand than experienced in past years as the industry moves through January 2022. December 2021 and early January 2022 prices contrasted favorably with the corresponding weeks in both 2020 and 2021 respectively that were characterized by low ex-plant unit revenue. The price of shell-eggs will benefit from a net decrease of 2.1 million hens in the producing flock this past week but with a 10.4 million net increase in flock size over 24 weeks. Wholesale Midwest prices increased and still providing positive margins, taking into account the combined costs of nest-run, grading, packaging and delivery.
Read full article here
Poultry:
Doctors warn TikTokers about dangerous sleepy chicken trend
Don’t combine NyQuil and chicken breasts to treat cold and flu symptoms, doctors and other medical professionals advised TikTok users. This feels like it should be a ‘no, duh’ moment, but evidently ‘sleepy chicken’ is the latest fad.
The dangerous social media trend shows some users pouring up to a half a bottle of cold or flu medicine onto chicken breasts as a marinade, before boiling the concoction for thirty minutes.
“When you cook cough medicine like NyQuil, you boil off the water and alcohol in it, leaving the chicken saturated with a super-concentrated amount of drugs in the meat,” Dr. Aaron Hartman, a physician and assistant clinical professor of family medicine at Virginia Commonwealth University, told the New York Post.
“If you ate one of those cutlets completely cooked, it’d be as if you’re actually consuming a quarter to half a bottle of NyQuil.”
Read full article here
What lasting trends have emerged from all of the changes consumers have experienced the past 2 years?
While the work-from-home revolution has caused big changes in the way consumers purchase, cook and eat chicken, those same consumers are also looking for products they deem healthier and more sustainable.
Speaking at the Feed Strategy Conference during the International Production & Processing Expo in Atlanta on January 25, Chris DuBois, senior vice president, Americas protein practice leader at IRI, explained some of the trends driving growth in the chicken market.
Read full article here
Pressure to eat less meat even coming from universities
While animal rights and environmental groups are often pushing consumers to reduce or eliminate animal protein from their diets, there is also an increasing push from universities, said Eric Mittenthal, chief strategy officer, North American Meat Institute.
Mittenthal, while speaking at the Animal Agriculture Sustainability Summit, part of the International Production & Processing Expo (IPPE) in Atlanta on January 25, said that influence from universities is showing up in various ways.
Read full article here
Turkey:
Does Snoop Dogg hold turkey industry’s next opportunity?
If you are in the turkey industry, perhaps you should get on Snoop Dogg’s radar.
Yes, you read that right. The entertainer/entrepreneur, using his given name of Calvin Broadus, has applied with the United States Patent and Trademark Office (USPTO) to trademark the term “Snoop Doggs.”
At this point, not a lot is known about the potential product, but the application states that the “trademark registration is intended to cover the categories of food including hot dogs, hot dog sausages, sausages, turkey sausages, vegetarian sausages; food for consumption on or off the premises including hot dogs, hot dog sausages, sausages, turkey sausages, vegetarian sausages.”
Read full article here
Pork:
California court delays Prop 12 enforcement
The Superior Court for Sacramento County in California will halt enforcement of Proposition 12 because the California Department of Food and Agriculture is more than two years late finalizing regulations outlining what is expected of pork producers. The ruling delays enforcement until 180 days after the final rules go into effect.
In 2008, the voters approved Proposition 2, the Prevention of Farm Animal Cruelty Act, which took effect Jan. 1, 2015. With exceptions, Prop 2 banned three forms of animal confinement: “gestation crates for pregnant pigs, veal crates for calves, and battery cages for egg-laying hens.” Prop 2 did not prohibit sales of food derived from animals wrongly confined. In November 2018, the voters built upon Prop 2 by approving Proposition 12, the Prevention of Cruelty to Farm Animals Act. The Act’s stated purpose is to “prevent animal cruelty by phasing out extreme methods of farm animal confinement, which also threaten the health and safety of California consumers, and increase the risk of food borne illness and associated negative fiscal impacts on the State of California.”
Read full article here
U.S. meat trade forecast down 459 million pounds
Modest changes were made to the U.S. meat production outlook this month, however USDA’s January World Agricultural Supply and Demand Estimates has dropped the forecast for U.S. pork exports considerably.
“We reduced our pork export forecast by 405 million pounds, so right now overall forecast is 7 billion pounds, and that reduction this month reflects primarily the fact that China has been buying less pork,” says World Ag Outlook Board Chair Mark Jekanowski.
China is buying less pork, not only from the United States, but also from other suppliers, Jekanowski says.
“By China buying less pork, that both reduces our own exports directly to China, but it also means that other countries that were exporting to China are now looking for other markets to market that pork and that is also competing with U.S. exports,” he says.
Overall, the U.S. meat trade forecast is down 459 million pounds.
Read full article here
Beef:
Feedlots maintain cattle inventories
Unexpectedly large December placements once again pushed feedlot inventories higher year over year on January 1st. Feedlot placements in December were 106.5 percent of last year, higher than the average trade expectation and above the trade estimate range. December marketings were about as expected at 100.8 percent of one year ago.
However, with one less slaughter day in the month, daily average marketings were five percent higher year over year in December. The January 1 on feed total was 12.037 million head, 100.6 percent of last year. On January 1, the inventory of steers in feedlots was 0.5 percent below one year ago while the number of heifers on feed was up 2.4 percent year over year.
Read full article here
Can Biden solve the meat industry competition woes?
More than once in recent weeks President Joe Biden has shared his quote: “Capitalism without competition is not capitalism. It’s exploitation.” His discussions in recent weeks promise he will bring lower prices to the meat case and higher prices for farmers.
“In the coming weeks and months, Americans can expect to see more protections for farmers and ranchers selling products like beef, pork and poultry,” shared Biden at the second meeting of the White House Competition Council on Monday, Jan. 24. The Competition Council was set up by the President’s July competition executive order to coordinate and monitor progress across the entire federal government. It is comprised of 10 Cabinet members, including Secretary of Agriculture Tom Vilsack, and the heads of seven independent agencies.
Read full article here
Dairy:
U.S. wins USMCA dairy dispute with Canada
The United States has prevailed in the first dispute settlement panel proceeding ever brought under the United States-Mexico-Canada Agreement. A USMCA panel agreed with the United States that Canada is breaching its USMCA commitments by reserving most of the in-quota quantity in its dairy tariff-rate quotas for the exclusive use of Canadian processors.
“This historic win will help eliminate unjustified trade restrictions on American dairy products and will ensure that the U.S. dairy industry and its workers get the full benefit of the USMCA to market and sell U.S. products to Canadian consumers,” says U.S. Trade Representative Ambassador Katherine Tai.
The United States requested that a panel be established on May 25, 2021 under Chapter 31 of the USMCA. The panel issued its final report to the parties on December 20, 2021. Under USMCA rules, Canada has 45 days from the date of the final report to comply with the panel’s findings.
From January through October 2021, the United States exported $478 million of dairy products to Canada, which is the third largest export destination for U.S. dairy products.
Read full article here
Miscellaneous:
Omicron’s Effect on Food Demand and The Supply Chain
Social media posts are showing empty store shelves. OpenTable reports dine-in restaurant meals are down 22% in late January compared to pre-pandemic data.
Dr. Michael Swanson, ag economist at Wells Fargo, says the COVID-19 pandemic continues to reshape food economics. The omicron wave is bringing its own undulation to the trends of where and how food is consumed.
“At the beginning of the pandemic, we saw a major drop at dine-in eating—more at home consumption,” he says. “Then we got away home consumption with a very strong robust restaurant recovery, but it’s really kind of plateaued and softened just a little bit in the last couple of months with Omicron.”
Swanson says grocery stores are showing above average growth currently.
“Whereas, for many years we were seeing a shift away from spending for at-home eating, but now that is growing at two or three times,” he says. “I wouldn’t be surprised as we put Omicron behind us that we’re going to see a restaurant recovery in the summer. But right now the supermarket is still doing quite well on a historical basis.”
Swanson says shoppers are seeing higher at-store prices as food inflation is tallying in at 6%, compared to normal year-to-year rises of 1%.
Read full article here
Kentucky Farmers Endure Epic Ruin And Worst Storm Damage In State History As Agriculture Rushes To Rebuild
On Dec. 10, 2021, a tornado charged across the Midsouth demolishing towns and farms in its path.
“You could not have charted a path with more destruction throughout rural Kentucky than what happened in mid-December,” says Ryan Quarles, Kentucky Commissioner of Agriculture.
The EF4 tornado was the deadliest tornado in the state’s history, resulting in 58 fatalities.
“Our agriculture industry got hit more than any other industry in our state. Literally we have a path of destruction from the Bootheel of Missouri to just south of Louisville, Kentucky,” Quarles says. “We have deceased livestock just south of Louisville. If you work your way back toward western Kentucky, we have collapsed grain centers, grain silos and the poultry industry got pummeled with close to 30 poultry barns completely collapsed or damaged beyond repair.”
Read full article here
Walmart invests in indoor vertical grower Plenty
In what could be the first move of its kind for a massive retailer, Walmart is investing in an indoor vertical leafy greens grower: Plenty Unlimited Inc., based in South San Francisco.
Bentonville, Ark.-based Walmart’s equity investment is part of a $400 million Series E funding round that’s still subject to a regulatory approval and is part of a broader strategic partnership to use this technology to deliver fresh produce to Walmart retail stores, according to a news release.
Walmart will also join Plenty’s board of directors.
The long-term commercial agreement allows Walmart to source Plenty’s leafy greens for all its California stores from Plenty’s Compton farm starting later in 2022. Walmart is the first large U.S. retailer to significantly invest in vertical farming, according to the release.
Read full article here
How Today’s Fertilizer Prices Could Reshape The Industry
Fertilizer prices continue to dip and spike around 10-year highs. Many are recalling how the current market is echoing similarities and pulling on lessons learned in 2008/2009.
“For the most part, retailers have been though cycles like this in the past,” says Lon Swanson Senior vice president of food and ag industry advisors at Wells Fargo. “The stress levels related to this type of market have changed the way retailers have approached it today. With fertilizer prices at this level, it’s like a hot potato. No one wants to hold the high price assets at these levels.”
Swanson says he’s seeing a trend of retailers closely tracking their daily position in regard to fertilizer.
Read full article here
Ukraine-Russia Tensions: What it Could Mean for Agriculture
The political tensions between Ukraine and Russia continue to mount. Russia has placed 100,000 troops on Ukraine’s borders, and the Pentagon ordered 8,500 troops on higher alert Monday to potentially deploy to Europe as part of a NATO “response force” amid growing concern that Russia could soon make a military move on Ukraine.
Ukraine is a key player in global agriculture, and how these conflicts play out will have international impacts. Ukraine has more than 41.5 million hectares (or 102.5 million acres) of agricultural land that cover 70% of the country.
Read full article here
The information in this newsletter is intended to update our readers of current events. Any third-party publications are presented for informational purposes only and the views presented in such publications are those of the respective authors. The views therein are not necessarily representative of Aeros or any other CULTURA company’s views on any particular topic.