Weekly News Summary

The news this past week has primarily focused on what effect sky-rocketing agricultural prices will have on price inflation. But, unfortunately, the problem is a serious one: the FAO has warned that the cost of importing food will rise this year by 12 per cent to $1.72 trillion, led by increases in grains, vegetable oils and oilseeds.

Inflation fears were further stoked by another fall in US corn stocks to their lowest levels since 2013. The only bright spot, it seems, is that despite climate change, the world could be heading for a bumper wheat crop.

China’s National Development and Reform Committee (NDRC) said it will take further action to stabilise hog production and pork prices and will impose additional price controls on other essential agricultural commodities. It will also set up additional temporary reserves and adjust an early warning system. Meanwhile, the FT takes a look at how Chinese demand is boosting revenues for US farmers.

Rising beef and mayonnaise (from soy oil) costs are already impacting the price of a burger. But before vegetarians start feeling too smug, the price of tofu is also heading higher. (The good news for vegans, though, is that Nestlé has launched a vegan version of their popular Kit Kat chocolate bar.)

Container freight rates continue to stoke inflation fires due to a shortage of containers in the right places, along with port disruptions in China due to renewed Covid outbreaks. These rising shipping costs are pushing up prices from coffee to toys.

Some warn that stretched global supply chains may keep ocean-freight rates high into 2022. However, capsize rates have recently begun to ease in what may prove to be a warning sign to the freight bulls. In the meantime, vessel owners are making three times what they were making just six months ago.

Landowners are also gaining from higher agricultural prices. As a reminder, Bill and Melinda Gates are the largest farmland owners in the US, with almost 270,000 acres. Observers are curious as to how they will divide it up in their impending divorce.

The food versus fuel war continues to rage with the publication of a study by the University of Illinois that found that vehicles using E30 can have significantly lower GHG emissions than EVs in certain conditions, like in rural Illinois during the winter where most generators rely on fossil fuels.

There has been a lot in the press about the $11 million ransom that JBS, the world’s biggest meat producer, has paid after a cyber-attack shut down their US, Australia, and Canada operations. But, unfortunately, cyber-attacks are not the only thing we have to worry about. Fraud is driving banks out of commodity trade finance.

In what may have a long-term effect on animal farming in the EU, MEPs voted last week in favour of a resolution (not a law) calling for a ban on the use of cages across the EU for farmed animals by 2027. They also called on the EU Commission to ban the force-feeding of ducks and geese to produce foie gras.

New research claims that when you take the entire food system—including crops and livestock, the conversion of land to agriculture, transportation, retail sales, food consumption and food waste—food could be responsible for up to 40 per cent of the world’s GHG emissions. (Most people estimate that figure at around 25 per cent.)

Cargill has announced a project that will use corn to make spandex and biodegradable plastics. Cargill will add the $300 million plant – a joint venture with Germany-based HELM – to their existing corn-processing complex in Eddyville, Iowa. They expect to open in 2024.

The UK faces a shortage of fruit and vegetable pickers this season as tighter post-Brexit immigration rules kick in.  And in sad news, the International Labour Organization and the UN children’s agency report that child labour is increasing worldwide (but not just in farming).  It marks a reversal of a downward trend that had seen child labour numbers shrink between 2000 and 2016.

A private-public coalition of 34 diverse partners is pushing to create Canada’s first agri-food sustainability index in an interesting development. If they succeed, it could be the world’s first sustainability benchmark.

Finally, this week’s long read recommendation is on the future for the oilseed markets.

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