Fertiliser has become political. The FT warns that governments are worried that rising fertiliser prices, because of the increase in the cost of natural gas, will boost food inflation, and food shortages may result in social unrest. As the newspaper argues, “freezing in the dark while hungry does not make happy voters.” The BBC believes that poorer countries are most at risk.
A lack of trucks and railcars may lead to localised ethanol shortages in the US. Unlike crude oil and other refined products, which can be transported by pipeline, ethanol is shipped primarily by train. Ethanol prices are up more than 50 per cent in the year to date and are contributing to the rise in gasoline prices. The WSJ wonders whether this will reignite the food versus fuel debate.
The EU Parliament has approved the EU Commission’s proposed reform of the Common Agricultural Policy (CAP), which at 387 billion euros ($436 billion) accounts for around a third of the EU’s 2021-2027 budget. The reform will require that farmers spend 20 per cent of their subsidy payments on “eco-schemes” from 2023-2024, rising to 25 per cent in 2025-2027. In addition, at least 10 per cent of CAP funds will go to smaller farms, and all farmers’ payments would be tied to complying with environmental rules.
The FT reports that Brazil’s foreign minister has attacked the EU for “trade protectionism” over a proposed ban on agricultural imports from deforested areas. Bloomberg argues that the way the Brazilian government is rebooting the Bolsa Familia may weaken the country’s currency and further boost commodity exports.
The Indian government’s decision to abandon farm reform will have a broader negative effect on the country’s economy. Bloomberg argues that with 43 per cent of the workforce stuck in agriculture – and the average farmer earning 27 rupees ($0.36) a day – the country lacks the labour and capital to industrialise.
NASA reports on how their research to growing food in space has led to vertical farming, a global market now worth $2.9 billion and predicted to reach $7.3 billion by 2025.
Wired writes on the future of food tech, arguing that it is better to phase out meat production than find technical solutions that reduce the sector’s greenhouse gas (GHG) emissions. However, the FT reports that US alt-meat sales are losing their sizzle, with sales down year on year. Alt-meat companies say it is because consumers are eating less at home than during the Covid lockdowns, but the bigger problem may be alt-meat’s 30-40 per cent price premium over meat.
Even so, Impossible Foods has raised nearly $500 million in a funding round, making it the most well-funded and richly valued plant-based meat startup in the United States, with more than $2 billion raised since its founding in 2011. Impossible Foods, valued at about $4 billion in its last fundraise in 2020, has said it hopes to eventually IPO at $10 billion.
In a fascinating video, Bloomberg takes us inside the world’s first vat-grown meat factory, belonging to Upside Foods—formerly Memphis Meats—backed by Bill Gates and Richard Branson. The company is betting that consumers will go for vat-grown meat and that factories such as theirs will eventually replace abattoirs.
Bloomberg also has an interesting piece on the Indonesian government’s attempts to persuade millenniums to take up farming and reverse the exodus from the countryside to towns. The project appears to be working. The news agency also looks at the way China’s agriculture ministry is laying the groundwork to allow the country’s farmers to grow genetically modified (GM) soybeans, rice, and corn for the first time.
In this piece, Bloomberg discusses the meaning of ‘regenerative’, the new buzzword in the sustainability space, and how people are now applying it to sectors other than agriculture. The term was first used in the 15th century to describe a spiritual rebirth.
Supply chain chaos has allowed shipping lines to charge their customers 20 times more per container than they did before the pandemic. But their underlying expenses haven’t changed much, allowing cargo carriers to keep almost all the price increase as profit. Quartz looks at how the shipping companies are spending those profits. Some invest in the supply chain while others expand their fleets, buy cruise ships, airlines, ports, or simply repurchase their shares.
Under recently introduced new data laws to enhance their national security, China’s shipowners are turning off their ships’ AIS tracking systems. The move is making it harder for analysts to monitor commodity trade flows and port congestion.
In company news, US antitrust officials have sued to block Louis Dreyfus Co.’s deal to sell its Imperial Sugar unit to US Sugar. They argue that it would leave just two producers supplying 75 per cent of refined sugar sales across the country’s southeast. The lawsuit is part of a push by the Biden administration to toughen antitrust enforcement.
The FT looks at two startups offering crop insurance to smallholder farmers. Pula bundles insurance into sales of other products such as seed, fertiliser, and loans to farmers in Africa. At the same time, Stable operates a platform that allows smallholders to insure their production.
After slipping to number two last year in the annual ranking by Forbes, Cargill is once again the largest private company in the US. The company’s revenue grew by 17 per cent through May to $134.4 billion. Koch Industries, which displaced Cargill last year, fell back to second with estimated revenue of $115 million.
Bunge is paying premium prices to growers who avoid deforestation even if they have a legal right to do so. Bunge aims to cut carbon emissions directly tied to its operations by 25 per cent by 2030 from 2020 levels.
Brazilian orange juice producer Cutrale has suspended exports of orange juice concentrate to the US, arguing that a new export tax has made them unprofitable. Cutrale will instead supply customers from Mexico.
Finally, there is some good news for us coffee addicts. A study of 200 Australians over one decade has found that drinking coffee may make you less likely to develop Alzheimer’s disease. “Flat white, anyone?”
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