February 1, 2024
‘Everything Will Not Be Fixed’
This week we noticed that industry groups and other non-governmental organizations were unusually quiet on food and agriculture production. It may be the calm before the policy storm, or it could be that everyone is dogged by other problems:
- Overseas turmoil hounds overhead costs.
- Food brands buck up their operations.
- Worker issues still hog the spotlight.
Overseas, Not Overlooked
Protests, failed trade negotiations and wars are straining global supply chains. The combination of impediments led the United Nations to warn of “profound disruptions” and “potentially cascading … costs” of food.
- Beginning January 18, French farmers protested policies that combat climate change and lower prices through trade across European Union (EU) borders. Reuters detailed the motivations behind farmers blockading roads around Paris and covered similar protests popping up in Spain, Italy and Poland by January 31.
- The protests persisted even after French Prime Minister Gabriel Attal promised concessions on January 30 (The New York Times). Perhaps it’s because he mentioned the speed of politics: “Everything will not be fixed in several weeks.”
- Meanwhile, Britain has struggled with trade negotiations since leaving the EU. The Associated Press tracked a breakdown in talks between the U.K. and Canada over beef and dairy products. While this could provide an opportunity for America, U.S.-U.K. trade talks also have stagnated.
- Separately, Canadian Minister of Agriculture Lawrence MacAulay voiced concerns about U.S. proposals for voluntary country of origin labels and California Proposition 12, both of which could stifle trade from across the “maple curtain.”
- On the trend of keeping foreign companies out, a bipartisan coalition of Senators requested that the U.S. Securities and Exchange Commission bar Brazilian meatpacker JBS from publicly listing on the New York Stock Exchange.
- Food Ingredients First reported that grain prices are climbing as more ships have opted to steer clear of missile and drone attacks by Houthi rebels in the Red Sea. The retaliation for Israel’s invasion of Gaza is forcing many ships to re-route around Africa, adding roughly eight days versus the more direct Suez Canal seaway.
- Drought also limited the Panama Canal’s capacity, hampering trade in the Western Hemisphere (PBS).
Our Takeaway: Even when international events don’t have a direct impact on U.S. food prices, they often foreshadow issues that U.S. food producers will need to address. European countries are more likely to enact progressive policies than America, so it’s telling when and where resistance crops up. But it’s cheaper to hire a lobbyist than drive a tractor from the Midwest to D.C.
Land and Expand
It seems like food brands have put their new year’s budgets to use by building new facilities. From production and processing to distribution and retail, the wave of expansion spans the entire supply chain.
- Tyson opens Kentucky bacon plant | Food Manufacturing
- Gotham greens puts down roots in DFW | Progressive Grocer
- Mars to build $237M facility for its Nature’s Bakery brand in Utah | Food Dive
- Standard Meat Company building a sous vide plant | Food Processing
- JBS inaugurates Brazil’s largest and most modern chick hatchery | Feedstuffs
- Walmart plans to add more than 150 large-format stores across the U.S. | CNBC
Workers Wager on Unions
The food industry continues to look for workforce solutions from leadership to the rank-and-file. Meanwhile, strikes and unions had mixed success getting workers what they seek.
- On January 29, The Associated Press published the results of a two-year investigation that linked food production to prison labor. “Intricate, invisible webs … link some of the world’s largest food companies and most popular brands to jobs performed by U.S. prisoners nationwide.”
- Labor is tight even at the upper end of the market. In The Wall Street Journal, Sarah Nassauerprofiled Walmart’s strategy for maintaining quality managers, many of whom rise through the ranks without a college degree. After bonus and stock grants, store-level managers can earn up to $400,000.
- In comparison, Walmart employees at a Eureka, California, store were allegedly interrogated about plans to unionize. The National Labor Relations Board filed a complaint (Supermarket News).
- Teamsters President Sean O’Brien proclaimed victory after securing a tentative agreement with US Foods to resolve a driver strike at the distributor’s Bensenville, Illinois, hub: “Any company mistreating workers will face the full force of this union. Our momentum is unstoppable.”
Our Takeaway: Food industry work is hard, from every perspective. And it’s hard to find competent, steady workers at all stages of food production. The friction between employers and employees is nothing new, but lately it’s creating hotter disagreements.
Civil Eats shared observations from the 2023 USDA Plant Hardiness Zone Map, which indicates rising temperature averages, and examined the implications for plant health across the country. While the USDA is reluctant to pin fluctuations in the map on climate change, cultivators are certainly experiencing the effects of warmer seasons. Crops that once thrived in certain areas may be struggling, but the climatic impact may enable new plants to thrive where they haven’t before.
Diesel and Dinner
The New York Times published a photography book that celebrates the culinary splendor of gas stations in the rural South, some of which are run by immigrants. Celebrated for their ability to bridge cultural divides, many of these businesses have become unexpected cornerstones of their communities by welcoming anyone in need of a convenient home-cooked meal. Don’t you love it when people feed hunger with heritage?
Maladies, Media and Money
A study of foodborne illness outbreaks emphasized a need for training and policy development in the restaurant industry, which accounts for more than 60% of U.S. outbreaks. Food Safety News broke down the findings of a study led by Purdue University and the University of Illinois that assessed media and stock market responses to eight foodborne illness outbreaks weathered by Chipotle Mexican Grill between 2015 and 2018.
Food Companies’ Wants vs. Farmers Needs
In a guest post in Agriculture Dive, Israeli ag tech entrepreneur Ofir Ardon described the tension between food brand sustainability commitments and agriculturists’ abilities to follow through: “The dichotomy between traditional farming practices deeply ingrained in agricultural communities and the evolving demand of this transformative industry is the root of the problem.”
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