Last week saw the resurgence of an old but familiar player in commodity trading as the chairman of Continental Grain Co and the descendant of Simon Fribourg, who funded the agricultural giant in 1813, was given a position on Bunge’s board. Continental Grain Co revealed in March that it held less than a 1% stake in Bunge but it has successfully lobbied for the change along with another stakeholder, the hedge fund DE Shaw & Co, who will also be added to the board.
Furthermore, the head of Continental Grain Co will chair a new strategic review that will seek to turn around Bunge’s declining returns, as the firm lowered its projected operating profit for the year to USD 1.2 billion. Commentators noted that this could signal a potential takeover, although others noted that the Fribourgs operate on a longer investment schedule and might seek to sell some assets while strengthening other operations.
Nonetheless, Bunge surprised analysts when it reported strong quarterly results, at USD 365 million, compared to USD 92 million last year. ADM, who was reportedly interested in purchasing Bunge, also reported better than expected quarterly results of USD 536 million, compared to USD 192 million last year. The firm said it had been able to find new markets to compensate for the Chinese tariffs, in part because the demand for US crops was bolstered by droughts in Brazil and Argentina.
While some were hopeful that the US midterm elections could lead to constructive changes, the former White House economic advisor said the success of the Democratic party was unlikely to change the administration’s efforts to curtail China’s trade policies through protectionist measures. Farmers are now bracing for a drawn-out trade dispute, while a recent study estimated that they could potentially lose USD 8 billion in exports because of tariffs, dwarfing the USD 450 million benefit expected from the new trade deal with Canada and Mexico.
The tariffs are also having an unexpected impact on the Canadian lobster industry. American lobster producers lost their access to China when it imposed a 25% duty, but some have been able to export their lobsters to Canada and then to China and Europe in order to avoid paying the tariffs. Unsurprisingly, the Lobster Council of Canada condemned the move, called transshipping, as it is displacing the demand for Canadian lobsters.
The New Food Economy also published this interesting piece which looks into the oversupply of cranberries. The USDA has agreed to destroy 108,800mt of cranberries this year to correct the surplus and avoid a collapse in prices, just as it did with dairy and blueberries.
Meanwhile, the debate surrounding the safety of glyphosate has moved from Californian courts to Germany, where the environment minister said the country hopes to end the use of the pesticide completely at some point in the future. Glyphosate has received EU approval until 2023 and Germany won’t be able to limit its use before then, however. In response, the head of Bayer CropScience said the firm would keep defending the science which suggests that glyphosate is safe. Back in the US, the Bayer AG CEO said the firm will consider settling some of its cases in the country. The number of lawsuits against glyphosate jumped to 8,700 after a San Francisco court ruled in favour of a plaintiff, but the CEO explained that the firm was well equipped to defend the cases thanks to its experience with lawsuits against some of its pharmaceutical products.
Nearly 200 lawmakers from 80 countries debated on how to control rising healthcare costs caused by unhealthy diets at the first global summit against hunger and malnutrition. The lawmakers were divided over whether taxes on sugary products and banning their advertisement were more effective than education campaigns. Regardless, food and beverage companies are going ahead and doing their thing. For one, Coca-Cola Australia is offering a new zero-sugar product called Coca-Cola Batch Blends containing artificial sweeteners. Through this, the company is committed to cutting sugar across its portfolio by 20% by 2025 in Australia.
While the science and technology behind agriculture keeps evolving, another potentially significant change is happening: women who work in agriculture are no longer considered a “farmer’s wife” but often run entire successful operations. In fact, women farmers, ranchers and agricultural managers were on average paid more than men in 2017, according to the USDA, making it one of the ten disciplines were females outearn males.
Finally this week, the debate around whether non-dairy products, such as almond or soya drinks, should be called milk has gained humourous contribution in this funny video showing a farmer explaining how to “milk” an almond, starting with how to find its tiny udders.
This summary was produced by ECRUU