Two weeks after the signature of a phase one trade with China and one week after the approval of the USMCA, the price of US crops has been mostly down reflecting the impact of the coronavirus. China was not expected to meet the US import targets before the virus outbreak but, as a futures broker put it, now “they have a good excuse at least.” Instead, the country has been importing grains from Brazil, Australia, Canada and France where prices are lower. The CEO of ADM remained optimistic, however, expecting imports to pick up in the second half of the year when prices drop with the start of the US harvest.
In response to the virus outbreak, North Korea reportedly closed its borders and stopped almost all cross-border travel. While the country’s focus on self-reliance means it produces a lot of items like snacks or clothes, the raw materials mostly come from China and the border closure would have a significant impact on the economy if they have to remain closed for a while.
Pork producers around the world are still watching out for the African Swine Fever (ASF) and hoping they can protect their livestock from the disease. The Philippines reported the first case in the Mindanao province and the disease is now spreading through Eastern Europe. In Germany, the state of Brandenburg built a 12km electric fence on its border with Poland to stop wild boars from infecting the local livestock. Germany has been able to benefit from the uptick in demand so far as exports to China surged 43% in Jan-Jul 2019. However, a German producer warned that the spread was inevitable, which could push China to stop German imports.
The CEO of Cargill noted that consumers are increasingly focused on the need to change animal agriculture. Cargill recently purchased Delacon, a producer of animal feed additives, and Diamond V, who makes animal supplements from fermented ingredients. Diamond V also launched a human supplement brand that focuses on gut health. A Cargill scientist said “probiotics, prebiotics, postbiotics and phytogenics” could all play a role, while the CEO argued that the “the future is micro ingredients”.
For its part, Nestle announced that it will add USD 200 million to its investment in the pharmaceutical company Aimmune Therapeutics, bringing its total investment to USD 473 million. Aimmune Therapeutics recently received approval for a therapy to lower allergic reactions to peanuts in children. Nestle also announced a partnership with Burcon and Merit Functional Foods, two Canadian vegan protein manufacturers. The head of Burcon noted that the recent craze surrounding plant-based products “has been a wild ride.”
The response from some meat producers has been less enthusiastic, however. The Maryland Farm Bureau expressed its support for a proposal to ban the use of the word “meat” for plant-based or lab-grown products. Missouri passed a similar law in 2018. In Florida, Burger King argued that it never advertised the “Impossible Whoppers” as vegan. The comment was in response to a lawsuit complaining that the plant-based burgers were cooked on the same grills as other burgers.
Food manufacturers like Nestle, Mondelez and Danone, have made impressive strides in reducing the environmental impact of their own operations but are struggling to address the impact of their supply chain. S&P Global Market Intelligence suggested that the cost of environmental damage as a proportion of revenue of these three firms has been increasing since 2015, after six years of decline. In essence, major corporations have “outsourced their environmental impact to their supply chains”, an expert commented.
The idea of using agricultural crops to help lower the emissions of aviation and marine transport has been gaining ground as other alternatives like electricity remain a distant prospect. Sustainable Aviation, a group representing the UK’s aviation industry, has set a target to become carbon neutral by 2050, thanks to carbon offset programs, the use of bio-jet fuel, also called sustainable aviation fuel, and carbon pricing. The group hopes to achieve the goal despite a 70% expected growth in air passengers and the opening of a third runway in Heathrow.
Similarly, Maersk said it was hoping to move to phase two of its project to develop a new fuel to lower the emissions of its shipping fleet. Researchers at Copenhagen University are studying a drop-in heavy biofuel blend made from lignin and ethanol called LEO. And the Abu Dhabi National Oil Company said it was testing the use of biofuels to help meet new emissions standards set by the International Maritime Organization (IMO).
The most creative way to transform food this week comes from an international team of researchers who announced the discovery of a modified sugar molecule with broad-spectrum antiviral properties. An expert said the result could mark a new way to fight viruses without harming humans, with potential applications to combat the coronavirus, or other viruses such as the Zika or HIV viruses.
This summary was produced by ECRUU
