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13Dec

Search Warrants Served in Brazil Related to JBS Tax Probe

Federal police in Brazil served 14 search warrants on Dec. 11 associated with an ongoing bribery investigation involving the world's largest meatpacker JBS SA. Police shared with Reuters the warrants were served after JBS executives testified in a plea deal and suggested 160 million reais ($49 million) in bribes had been paid to speed up the release of tax credits to the meat packer. A statement from JBS claims the tax credits were "legitimately due to the company." The targets of the warrants are not affiliated with JBS or its parent company J&F. According to police a lawyer who died in 2016, along with an unnamed federal revenue service auditor, a businessman and an accountant are being investigated. Warrants were served in the following cities in the state of Sao Paulo: Caraguatatuba, Campos do Jordo, Cotia and Lins. It is alleged the tax credit scheme could actually be worth 2 billion reais ($600 million). The case is connected to brothers Wesley and Joesley Batista's admitting to authorities they bribed 1,900 politicians in Brazil which led a plea deal meeting in May. Following the plea deal the brothers were allegedly for arrested insider trading prior to the meeting. The bothers deny any insider trading occurred but they are accused of making currency trades that earned $44 million. Wesley was replaced by his father Jose Batista Sobrinho as the chief executive officer of JBS, the company Jose founded and bears his name with its initials. Both brothers resigned from the JBS board of directors and are currently in jail. Despite all of the recent bad news in Brazil, JBS want to list the U.S. subsidiary with an initial public offering for JBS Foods International BV. There are also plans to sell the company's Five Rivers Cattle Feeding LLC, the largest cattle feeder in the U.S. with a capacity near 1 million head.
By Grains, Livestock
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12Dec

Promising North Carolina Cotton Yields

According to the USDA, nearly all of the cotton crop has been picked, and now the gins are hard at work. In Red Springs, North Carolina, the Hoke Robeson gin reached its 50,000 bale mark for the season earlier in December. Workers are saying they anticipated ginning up to 7,000 more bales before 2017 is over. “It’s been a great harvest season, a great ginning season and everybody’s yields have been spectacular,” said Edgar Edens, a worker from Hoke Robeson. He said a lot of cotton farmers in that area, roughly 25 miles south east of Fayetteville, have quit due to financial reasons. When Hurricane Matthew made landfall in September 2016, the storm dumped several inches of rain that destroyed the crop, and many farmers feared they would go out of business. Thankfully, the 2017 yields are some of the best Edens can remember.
By Uncategorized
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11Dec

Goldman Warns of U.S. NAFTA Exit as Negotiators Seek Small Wins

Investors remain on alert over the threat of NAFTA talks failing even as negotiators meet this week in Washington and seek minor victories on less contentious issues. The latest meetings to revamp the North American Free Trade Agreement will run through Friday, largely out of the spotlight. Cabinet-level officials won’t attend for the second time since negotiations began in August, and the Trump administration is preoccupied with efforts to push through tax cuts by year-end and avoid a government shutdown. The distractions in Washington haven’t eased pressure on President Donald Trump to preserve the trade deal, which governs more than $1 trillion in annual commerce. Senators who support NAFTA warned the president last week of the economic risks of following through on his threat of withdrawal. Goldman Sachs Group Inc. said it expects Trump will ultimately announce his intention to exit from the accord and that fresh tensions will probably emerge at the next full negotiating round in January. “While we expect the rising odds of tax reform to put less pressure on the trade agenda, we do not expect passage of tax reform will raise the odds of a successful NAFTA renegotiation,” Goldman Sachs said in a note to clients. “And so a withdrawal announcement looks more likely than not, even if tax reform is enacted soon.” Currency Markets The move would cause a disruption in currency markets, driving down the peso against the dollar, even if it doesn’t immediately cut back trade, it said. Bouts of weakness in the peso this year have reflected uncertainty over NAFTA’s future. Trump is seeking all the support he can get in the Senate and House to reconcile tax bills and score his first major legislative victory, meaning he’s wooing lawmakers who’ve begun to speak out in favor of keeping NAFTA. The last round of NAFTA talks ended with U.S. Trade Representative Robert Lighthizer warning that Mexico and Canada need to make concessions, as the only acceptable deal will shift trade flows in the U.S.’s favor. Many of the U.S. proposals “are so clearly non-starters for our NAFTA partners that it doesn’t seem like they’re moving forward that much,” said Douglas Holtz-Eakin, president of the American Action Forum and a former chief economist of the Council of Economic Advisers under George W. Bush. Research published by the forum this month found a NAFTA withdrawal would jeopardize 14 million U.S. jobs and cost consumers at least $7 billion. Divisive Subjects Observers expect the Washington round to yield progress on issues such as telecommunications, while making no or slower advances on divisive subjects like U.S. proposals on increasing the local content requirements for vehicles, adding a five-year termination clause and dismantling Canada’s protected dairy sector. The negotiators will spend among the most time discussing rules of origin, which govern content requirements for goods to qualify for duty-free benefits. They’ll also hold sessions on digital trade and state-owned enterprises, among other topics, according to an agenda of the talks. Thorny issues like agriculture and dispute settlement don’t appear on the schedule. The clock is running down to secure a deal by March, to avoid running into the campaign for Mexico’s presidential election in July and the potential lapse of the U.S. administration’s fast-track negotiating authority. Any nation can announce its intent to withdraw from the accord with six months’ notice, although the U.S. Congress has authority over aspects of tariffs and trade. ‘Toxic Issues’ “We’re going to look at Nafta very seriously,” Trump told reporters on Dec. 5. “Not easy to have an election coming up. We’ll see how that plays.” Canadian Prime Minister Justin Trudeau struck a mostly upbeat tone last week when asked about the NAFTA talks during a trip to China, where Canada failed to reach a deal to launch bilateral negotiations. If NAFTA negotiations end without a deal, Canada would be receptive to considering one-on-one talks with the U.S. on trade, said Trudeau. Also last week, Canada’s chief negotiator Steve Verheul described two tracks, one with progress being made and another where Canada and Mexico are rejecting “extreme” U.S. proposals. “We will not accept U.S. proposals that would fundamentally weaken the benefits of NAFTA for Canada and undermine the competitiveness of the North American market,” Verheul said. The Mexican peso may drop to at least 20 pesos per U.S. dollar if negotiations deteriorate, while the Canadian dollar may slump to C$1.35, Goldman said. “The fact remains that the sides are far apart on issues where we struggle to see an obvious middle ground.”
By Grains, Livestock
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11Dec

Here Is What Farmers Say About Keeping NAFTA

Since his campaign days, President Donald Trump has voiced little support for keeping the United States involved in the North American Free Trade Agreement (NAFTA). Ag trade groups, companies and associations have varying perspectives and positions on the topic as well. Last week, U.S. farmers, dairymen and livestock producers weighed in to share their points of view, via a Farm Journal Pulse survey. The survey question asked was, “Do you think the U.S. should withdraw from NAFTA?” Of the 839 responses, 30% said yes, to eliminate it either because they believe the economy is better off without the trade agreement, or because they believe the U.S. can negotiate better deals with Canada and Mexico one-on-one. Forty-three percent of respondents said to keep NAFTA, because it is crucial for farmers and for maintaining a low-cost food supply. Slightly more than one-fourth of Pulse participants, 26%, said they aren’t sure whether keeping or eliminating NAFTA is in the United States’ best interest. The map below depicts the 839 responses, which are provided anonymously, to the question. The dots are color-coded based on the answer provided. Farm Journal partners with Commodity Update, the leading provider of agricultural information to mobile phones, to implement the Pulse survey, which is done twice per month.
By Dairy, Ethanol, Grains, Livestock
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11Dec

FDA: Antibiotic Sales Drop 10% for Livestock in 2016

Antibiotic sales for use in livestock has dropped according to a report from the U.S. Food and Drug Administration (FDA). On Dec. 7, FDA released a summary report for 2016 on "Antimicrobials Sold or Distributed for Use in Food Producing Animals." A key finding in the report was antibiotic sales and distribution in the U.S. dropped 10% from 2015 to 2016 for food producing animals. Since FDA began collecting sales data in 2009, this is the first time that year-over-year sales of antimicrobials have declined. In this past year's report it was also the first time antimicrobial sales were broken down by individual species. In 2016, estimated sales and distribution of medically important drugs were broken down as follows for the major livestock classifications: Cattle 43% Swine 37% Chickens 6% Other Species/Unknown 4% Medically important antimicrobials accounted for 60% of the domestic sales of all antimicrobials approved for use in food-producing animals, in 2016. The sales figures for medically important antibiotics in livestock were as follows: Tetracyclines 70% Penicillins 10% Macrolides 7% Sulfas 4% Aminoglycosides 4% Lincosamides 2% Cephalosporins and Fluoroquinolones each for less than 1% It is important to note that implementation of the Veterinary Feed Directive (VFD) did not go into full effect until the start of 2017, so these sales figures would not be impacted by that program. The use of antibiotics in livestock production has become a hot topic with the threat of antibiotic resistance form "superbugs." "Actions speak louder than words, and the most action we've seen on antibiotics has come from food companies. It's no coincidence that now we're seeing a slight downturn in sales, and we're cheering this good news," says Matthew Wellington, U.S. PIRG Antibiotics Program Director. "But we'll need much steeper reductions in the coming years if we're going to keep antibiotics working to heal sick people." Restaurants like Subway, McDonald's, Chipotle and Panera Bread, have all made pushes to go antibiotic-free with some or all of their menu items. Meat packers have gone that direction, too. Tyson Foods set the goal in 2015 of going antibiotic-free with all chickens raised for the company by September 2017. According to Tyson, in June 2017 all chicken were in the never-ever program. Perdue, Foster Farms, and JBS-owned Pilgrim's Pride have or are moving to go antibiotic-free with their chicken as well. No major beef or pork packer has made the move to go fully antibiotic-free, but the majority offer antibiotic-free or natural products that are in "never-ever programs."
By Livestock
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08Dec

Bayer Said to Face EU Objections to Monsanto Deal in Days

Bayer AG is set to get a so-called statement of objections cataloging potential reasons for the European Union’s antitrust regulator to block its proposed $66 billion takeover of Monsanto Co. as soon as next week, according to two people familiar with the probe. A precise list of objections may aid the companies by laying out regulators’ concerns that they can address with a package of concessions, said the people on condition of anonymity. Bayer and Monsanto officials met with the EU on Tuesday and are in regular contact to thrash out issues, one of the people said. Regulators are looking “very carefully” at the competition issues in the combination of Bayer and Monsanto to make sure farmers still have choice and “affordable prices, both when it comes to seeds and pesticides,” EU Competition Commissioner Margrethe Vestager said last week. DuPont Co. had to sell most of its global research and development operations to placate EU concerns over its merger with Dow Chemical Co. earlier this year. Monsanto fell as much as 3.2 percent in New York, the biggest intraday drop since July 2016. The St. Louis-based company’s shares were 0.4 percent lower at $118.05 at 1:48 p.m. local time. R&D Concessions? “What this may do is push the close back to the middle of the year,” Seth Goldstein, an analyst at Morningstar Inc. in Chicago said in a telephone interview Friday. Bayer said in October it’s aiming to complete the merger by early 2018. The European Commission and Bayer representatives declined to comment. A Monsanto spokeswoman declined to comment on the EU and the merger. Concessions on research and development may also be on the table for Bayer, Werner Baumann, the company’s chief executive officer, said last week. Bayer is already selling a seed-and-agrochemical business to BASF SE for $7 billion and is preparing a package of additional vegetable-seed product lines to win over regulators, people said last month. The potential asset sales highlight Baumann’s determination to overcome the last remaining obstacles to the transaction. The EU is under pressure to investigate the deal thoroughly, not least with calls from lawmakers and environmental groups for the deal to be blocked. Officials are going into “great detail” to analyze the companies’ operations, Vestager said. Leverkusen, Germany-based Bayer submitted more than four million pages of documents to the EU, Baumann said, describing the lengthy regulatory review as creating uncertainty and preventing the appointment of senior executives. The recent Dow-Dupont merger process acts as a road map of sorts for investors, Goldstein said. “Perhaps Bayer will need to divest” more of its crop chemicals and its smaller non-genetically modified seed businesses, he said.
By Grains
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08Dec

Synthetic Meat Unlikely to Impact Protein Market in Near Term

Many hurdles remain for cultured meat, the largest of which are related to commercial viability, consumer acceptance, and regulatory issues. The impact of protein products derived from plant sources, insects or cultured animal cells on livestock and poultry demand is not expected to be significant in the foreseeable future, according to a new report from CoBank' s Knowledge Exchange Division. However, these technologies bear watching. "Cultured meat developers are in a race to match price and quality to traditional meat offerings, CoBank says." Products currently in development are prohibitively expensive and years away from widespread commercial viability." "The future success of alternative meat lies squarely with rising global demand for protein rather than a battle for the existing market share of animal protein food products," Trevor Amen, an economist with CoBank, said in the article." The road to commercial viability and consumer acceptance of cultured meat is long and this type of product is unlikely to have a marked effect on traditional animal protein demand through at least the next decade." The alternative protein category is certain to grow in the coming years, allowing pathways for more diversified protein products. However, the alternative protein market will be overshadowed by the current retail market size of $49 billion in sales for the entire meat and poultry category. Commercial Viability and Consumer Acceptance Rising global incomes will continue to drive consumers to a higher protein diet, says Dennis DiPietre, and economist from Columbia, Mo. CoBank says global gross domestic product is projected to grow by $38 trillion from 2016 to 2030, generating a 46% increase in meat and poultry consumption. Technology companies and alternative protein providers are exploring new protein products. "The timeline for commercial viability of cultured meat products remains the greatest unknown," said Amen in the article. " The consensus projection points to an initial market introduction in the next 3 to 5 years, most likely in restaurants and specialty stores and offered at a premium price to traditional meat offerings." Supermarket adoption of these products is projected to take another 2 to 3 years as the technology becomes more affordable and acceptable to consumers. Technological and Regulatory Hurdles CoBank believes the timing and degree of market penetration for meat alternatives will largely depend on advancements in technology that reduce price and improve quality attributes. "In addition to start-up companies, we' re seeing agribusiness leaders investing in research and development projects surrounding meat alternatives," said Amen. "Similar projects are also underway in China, Israel, Japan and France." Newly created cultured meat products will also need a regulatory framework before entering the market. Both the FDA and the USDA are closely monitoring developments in the cultured meat industry. It is unlikely that the agencies will rule on terminology that can be used to describe and market cultured meat until the technology is more developed.
By Livestock
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07Dec

USDA Promises More Power to States on SNAP Rules

States can enjoy greater local control of how Supplemental Nutrition Assistance Program (food stamp) benefits are administered, the U.S. Department of Agriculture says. While the USDA did not spell out the implications of its new policy, Politico reported it could result in states putting in place new requirements for drug testing of participants and perhaps other oversight measures. In fact, Wisconsin Gov. Scott Walker recently said he would put in place drug testing for food stamp applicants. That was a move that the Obama administration had blocked before. The USDA said it would provide more details about the new state flexibilities in coming weeks. "SNAP was created to provide people with the help they need to feed themselves and their families, but it was not intended to be a permanent lifestyle," Agriculture Secretary Sonny Perdue said in a news release. "We want to provide the nutrition people need, but we also want to help them transition from government programs, back to work, and into lives of independence."
By Uncategorized
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07Dec

October Another Stellar Month for U.S. Pork Exports

U.S. pork exports remained ahead of last year's record volume pace, and beef exports are poised to break $7 billion this year for only the second time, according to October export results released by USDA and compiled by the U.S. Meat Export Federation (USMEF). October pork exports were the largest since May, totaling 211,592 metric tons (mt), up 5% from a year ago, valued at $565.4 million, up 8%. Through the first 10 months of the year, pork exports increased 8% in volume (2.005 million mt) and 10% in value ($5.28 billion) from the same period last year. Exports accounted for 25.4% of total pork production in October (steady with last year) and 21.6% for muscle cuts only (up slightly from a year ago). For January through October, these ratios increased about one percentage point from a year ago, to 26.4% of total production and 22% for muscle cuts. October export value averaged $51.41 per head slaughtered, up 9% from a year ago and the highest since July. Through the first 10 months of the year, per-head export value was $52.64, up 7%. Pork Exports Rebound to Mexico, Japan Following a modest slowdown in September, pork exports to leading volume market Mexico regained momentum at 69,529 mt, up 7% from a year ago, valued at $129.8 million (up 13%). Through October, exports to Mexico are well-positioned for a sixth consecutive annual volume record at 655,527 mt (up 14%) valued at $1.24 billion (up 17%). Mexico is an especially important destination for U.S. hams, and consumption growth in Mexico has been critically supportive of ham prices in this time of record U.S. pork production, explained USMEF President and CEO Dan Halstrom. "Although ham prices are currently below last year's level, they have been up an average of 2 percent in 2017 and predictions of ham prices plummeting have not come true," he said. "Strong demand in Mexico is absolutely a key reason for this. USMEF has focused on expanding per-capita pork consumption in Mexico, which is up by about one-third in the past 10 years. This has helped make Mexico an even more critical and more reliable trading partner for the U.S. pork industry.” Exports to leading value market Japan also trended upward in October, increasing 5% from a year ago in both volume (32,475 mt) and value ($134.5 million). January-October exports to Japan were 322,422 mt (up 1%) valued at $1.33 billion (up 3%). This included 176,609 mt of chilled pork valued at $834 million, down 2% in volume but 2% higher in value than a year ago. Record Month for South America Led by Colombia and Chile, October pork exports to South America reached a record 12,624 mt (up 31% from a year ago) valued at $32.3 million (up 29%). Through October, exports to South America were 78% ahead of last year's pace in both volume (85,175 mt) and value ($218.8 million), already surpassing the previous records set in 2014. Export volumes to Colombia and Chile have also exceeded previous highs reached in 2014 and 2013, respectively. Other January-October Results for U.S. Pork Exports Having gained further momentum in October, exports to South Korea have already exceeded their full-year 2016 totals in both volume (136,041 mt) and value ($372.7 million). Compared to the first 10 months of last year, exports were up 27% and 30%, respectively. Led by mainstay markets Honduras and Guatemala, exports to Central America are on a record pace, totaling 56,906 mt (up 7% year-over-year) valued at $138.4 million (up 9%). Exports also increased substantially to El Salvador and Nicaragua, and edged slightly higher to Costa Rica. Exports are also on a record pace to the Dominican Republic – up 26% year-over-year in volume (26,476 mt) and 32% in value ($60.6 million). Despite trending lower in October, pork exports to the ASEAN region were still 16% ahead of last year's pace in volume (39,910 mt) and 31% higher in value ($109.2 million), led by strong performances in the Philippines, Singapore and Vietnam. October exports to China/Hong Kong were below last year's volume but steady in value, reflecting the upward trajectory of China's domestic pork production. Through October, exports to the region dropped 8% from a year ago in volume (413,032 mt) but were just 1% lower in value ($872.8 million) as continued strong demand for variety meat largely offset the slowdown in muscle cut exports. Complete January-October export results for U.S. pork, beef, and lamb are available from USMEF's statistics web page. Monthly charts for U.S. pork and beef exports are also available online.
By Grains, Livestock
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06Dec

Wheat Technology Races to Catch Soybeans and Corn

While corn and soybean yields reach new heights, wheat continues to fall behind the curve with fewer investments and no biotechnology.  For wheat to be more competitive in the market, breeders might need to make a few changes. "Hybrid wheat development is the next step," says Carl Griffey, Virginia Tech professor of crop genetics and breeding. By combining two inbreds breeders can meld desirable traits of each parent to create stronger offspring. Griffey says there are additional reasons to consider hybrid wheat: Hybrids tend to have better performance stability. Less variability year to year and with weather. When you cross two inbreds it combines alleles from both parents advantage in resistance to disease, drought, stresses (abiotic and biotic). Corn has long used a hybridization system, which has helped advance yields several fold in the past several decades. As breeders search for ways to improve wheat yields this could be one way to make the crop more favorable for producers. However it’s a long road to perfection and breeders will need to overcome certain challenges associated with hybridization. Namely finding a way to stabilize the hybridization system, improve cross pollination, optimize breeding programs, create heterotic gene pools, find more information on alleles and find ways to reduce yield drag from wild phenotypes, Griffey adds. For wheat growers, unfavorable commodity prices means they need to find yield advantages soon to justify planting the crop. The future of wheat technology could be bright if hybridization is realized.
By Grains
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