Commodity Conversations Weekly Press Summary

Cargill is consolidating its position in the Colombian protein business by taking over Campollo, one of the largest producers of chicken and protein products in the country. This should help Cargill expand in Latin America. The company is investing an additional USD 4.44 million in the Philippines to increase its sales of chicken and pork, among other segments. The money will also be used to strengthen Cargill Joy Poultry Meats Production, a joint venture with Jollibee Foods. In India, Cargill is testing a digital data collection programme that calculates livestock as well as agricultural input to analyse performance.

ADM is preparing for the launch of its processing pea plant in North Dakota, US, due to start operating in the first quarter of 2019. In a recent interview, a company official explained they hoped to attract people who are opting out of consuming soy. ADM’s chief brand officer added that sales of soymilk have declined while demand for other plant-based dairy products is picking up.

Danone is struggling to find buyers for its Earthbound Farm, an organic salads company which it bought in 2016 when it acquired WhiteWave. There are also reports that Campbell is struggling to sell its smoothie company Bolthouse Farms. Both segments are reporting losses and analysts argue that managing fresh food businesses might not make sense for big publicly listed companies. The profitability of fresh food is closely linked to agriculture, something which these groups are less equipped to handle and lack the predictability which investors like.

The Organic Trade Association estimates that the sale of organic foods in the US has doubled in the last 10 years. However, US organic land has only increased by 20% since 2011, representing less than 1% of the country’s farms. As a result, a huge chunk of organic food is imported, especially organic corn for organic meat and dairy. Part of the reason that US farmers are slow to shift is the cost – farms have to go through a 3-year period without chemicals before they can be certified organic. However, companies that sell organic products are stepping in to help farmers during this transitional period. Initiatives include the “certified transitional” label by General Mills for which farmers can get a small premium.

The world’s agriculture system is “broken” and our “food systems are failing us,” according to a study carried out by 130 institutions around the world. The report argues that while agriculture is the world’s biggest source of greenhouse gases, it is also its greatest victim. They forecast that food shortages will become increasingly common as a result of weather disruptions from climate change. Not only that, but our agriculture, while resulting in 1 billion mt of food wasted every year, leaves 820 million people hungry and 2 billion people overweight, according to recent FAO data.

Scientists have noted that food allergies, especially among children, have increased considerably in the last few decades, with an estimated 9% of Australian and 7% of English children affected. While researchers aren’t sure what causes the allergies, these seemed to be linked to the environment as they tend to be more prevalent in cities and in rich countries. They also think that improved hygiene, which results in reduced infections, as well as the lack of vitamin D from insufficient sun exposure, are to blame.

The good news this week came from bee research, as the food industry and scientists join hands to protect our pollinator friends, who are directly responsible for 30% of our food supply. An important breakthrough was reported this week as researchers in Finland developed the first bee vaccine against microbial infections which can be consumed by the queen and passed on to her offsprings. Nonetheless, the most important challenge remains to identify the root cause of the mysterious but prevalent collapse of bee hives, through the development of new laboratory techniques or through the clever use of high tech solutions. Our favourite proposal comes from an entomologist in Tasmania who is equipping bees with tiny RFID backpacks.

RFID backpacks
Image Credit: CSIRO, Dr. Souza: RFID backpacks for bees

This summary was produced by ECRUU

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