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As the world is still cautiously analysing the impact of the new coronavirus outbreak, it has been almost two years since the first cases of the African swine fever were detected in China and some of the long-term consequences are now clearer. For one, up to 25% of the world’s pig population died, while a new report suggested that only large-scale industrial pig farms were able to overcome the disease and are now reaping the benefits of soaring prices. In contrast, China’s 40 million small-scale farmers, who did not have the funds to recover their losses or the organisation to apply for government help, might have to stop herding pigs as a result. 

Some exciting news was reported by researchers around the world who have successfully tested safe and effective vaccines against swine fever. Teams in China and the US reported some successful tests, although experts warn against being too optimistic too soon. An important step will be to find a vaccine that is broadly applicable to different strains, on top of finding a way to address contamination in the wild boar population. In the meantime, the USDA published its action plan to deal with an outbreak in the US. The country would ban all shipments of pigs for at least three days in the case an infection was detected. 

Commodity markets were affected by the sudden drop in oil prices this week following the dispute between Saudi Arabia and Russia. Many agricultural producers found out that the price of their products is now tied to energy prices because they are used to make biofuels, such as EU rapeseed, American corn, Brazilian sugarcane and Indonesian palm oil. As one journalist put it, farmers are now also energy traders. On the other hand, some suggested that oil prices no longer have an impact on renewable energy investments in the short and medium-term. Only an unlikely structural shift in oil prices would change the situation for clean energy producers, like Brazil’s ethanol sector.

Cargill announced a partnership with Rainmaking to find solutions to decarbonise the shipping sector in Singapore. Rainmaking launched a similar program in Europe which finds viable technological solutions and encourages industry leaders to support them. In Sweden, Sekab and Vertoro from the Netherlands announced the construction of a demo plant that will make a proprietary blend of ethanol from waste wood products. The fuel will initially be used by the shipping industry but could also serve for cars and planes.

The private equity arm of the Rabobank Group, Rabo Corporate Investments, announced an investment in Protix BV, a Dutch producer of insect protein. The company makes an alternative to animal and fish feed using the larvae of the black soldier fly. Meanwhile, the plant-based meat producer Impossible Foods said it was able to address scaling issues and reduced prices by 15% for food service distributors. Its products still cost around USD 7.90/lb, compared to USD 1.79/lb for 81% ground beef, but better than the competitor Beyond Meat which is still selling for around USD 11.98/lb. 

Investors are now looking at synthetic palm oil, including a Bill Gates fund which announced an investment in C16 Biosciences, a start-up that produces palm oil from food waste. However, experts note that the current technology is far from being scalable, although it could help address a shortage of certified sustainable palm oil. In the same vein, PepsiCo expanded its commitment to source only sustainable palm oil to cover third-party suppliers instead of only direct suppliers. 

PepsiCo is also working to shift away from depending too much on sugary soft-drinks and announced that it will buy Rockstar, an energy-drink brand, for USD 3.85 billion in an attempt to increase its presence in the fast-growing category. Interestingly, however, sales data from Arca Continental and Coca-Cola Femsa in Mexico show that the consumption of sweet beverages continued to increase in the 2014-19 period despite the introduction of a sugar tax in 2014. This includes beverages with high and low sugar content.

Finally, Bloomberg compiled a great table of recent dramatic weather events and their impact on prices, such as warm weather in the EU, drought in Thailand and Australia, or a salinity buildup in Vietnam.

This summary was produced by ECRUU

Michelin has been accused of “greenwashing” with its restaurant guide’s new sustainable gastronomy award. The chef of Michelin star restaurant Relae in Denmark complained it had been awarded the label without any independent audit being conducted. Environmentalists added that the label was vague and without any clear requirements. To top it off, some were quick to point out the irony of a tire company handing out sustainability awards. 

In any case, the traditional concept of restaurant dining could be on its way out. A deep-dive by The Counter looked at US data which, although confusing, pointed to the increasing number of restaurants closing down every year. While this is partly because more restaurants are opening up in the first place, with the chef and restaurateur culture becoming increasingly cool, it is mainly due to new eating habits. People either prefer to order in or eat on the go. As such, venture capital is being poured into so-called “cloud kitchens” that only cater to deliveries. 

The water bottle industry, too, could be facing significant changes going forward. In Washington, the Senate approved a bill banning new permits for water bottling operations and other states, such as Maine and Michigan, are looking to follow suit. Congress has set up an oversight committee to look into the operations of the bottled water industry, under which Nestle has been asked to submit data on sales, water extraction and the amount of plastic used, among other things. 

Nestle announced a USD 700 million investment to “meet the nutritional needs of Mexicans.” Under the plan, its 17 factories in Mexico will be upgraded to focus on products that either have lower sugar and fat content or are fortified with vitamins and probiotics, among other wellness food and beverage products. It will open a new coffee plant too but it hopes to offset the carbon emissions from that factory by planting 3 million trees in Mexico and Brazil within the next 18 months. 

In Australia, Nestle tied up with recycling company iQ Renew to collect and recycle soft plastics from homes. The trial will include around 2,000 homes with the aim of reaching 100,000 by the end of the year. Similarly, Unilever said it was working on creating a market for recycled plastics in Australia and New Zealand. It aims to use half as many new plastics and collect more than it uses by 2025. McDonald’s announced it was phasing out plastic cutlery by the end of the year and replacing it with fibre-based cutlery. The timing is probably good because 10 of the major food and beverage companies are being sued in the US by Earth Island Institute for their use of single-use plastics. The organisation hopes that the companies will be forced to clean up and recycle. Besides, supermarkets, in Australia and elsewhere, are worried they might eventually run out of food packaging because of the supply disruption out of China due to the coronavirus. 

Olam reported a net profit of SGD 313 million (USD 225 million) for Oct-Dec, four times as much as the previous year, thanks to divestments as well as better performance in several segments, such as coffee and grains. This brought the total 2019 net profit to SGD 564 million (USD 405 million), up 62% on year. The CEO said the group’s exposure to the new coronavirus and China was limited but added that it had affected consumption on a global scale, causing lower prices across commodities. In Nigeria, Olam is investing in tomato farming and finding better seeds. In Indonesia, it agreed to sell its 50% stake in Indonesian sugar refinery Far East Agri to Mitr Phol as part of its strategy to exit the sugar market. 

In Brazil, meat producers JBS and Marfrig have been accused of sourcing cattle from a farmer who murdered people trying to protect the Amazon forest in 2017. This is the emerging part of a much bigger issue known as “cattle laundering.” While the likes of JBS say they do everything they can to check that their direct suppliers are not involved in deforestation, the indirect suppliers are able to go around these checks by selling their cattle to companies that are vetted to supply directly. 

In the UK, meanwhile, a study found that the anti-meat lobby is contributing to growing mental health issues among livestock farmers. Part of the problem, however, is that meat farmers are stuck between shaming on platforms such as social media and pressure from big supermarkets to provide cheap meat. Greenpeace argued that livestock farmers should not be blamed. On the contrary, they should be helped to switch to farming something else. In the same vein, the European Commission is looking into its subsidy system designed to help promote agricultural products. It faced a backlash after data showed that EUR 60 million (USD 67 million) had been spent over three years to subsidise the marketing of meat products. 

Finally, Belgian researchers are taking the quest to replace dairy products to a new level. They are testing using larva fat to replace butter in bakery products. Apparently it tastes exactly the same. 

This summary was produced by ECRUU

As the spread of the new coronavirus is expected to impact global trade flows, the US President said the government might offer farmers more trade aid in 2020 to compensate for the lack of purchases from China. The USDA said the news, announced on Twitter in all-caps, was a surprise. Meanwhile, lawmakers are looking at how the trade aid money – over USD 23 billion since 2018 – is being distributed. Critics point to the fact that foreign firms like Brazil’s JBS are receiving hundreds of millions of dollars in government funds.

The giant meat processor JBS received some more good news this week as the USDA ended a ban on raw beef imports from Brazil. The agency blocked Brazilian imports in 2017 on health and safety concerns. Otherwise, US efforts to isolate Iran have allowed it to take the position of biggest pistachio grower in the world. This deep-dive by Bloomberg looks at how geopolitics, climate change and resource mismanagement created challenges for Iranian producers, along with how investors are looking at new potential pistachio-growing countries, like Georgia, Uzbekistan, and Azerbaijan. 

China’s virus outbreak is having indirect but impactful consequences for the food industry worldwide, such as the fall in Chinese fertiliser production. India usually imports 50% of its diammonium phosphate from China but the lockdown of Hubei province is forcing India to look for alternative suppliers. In North Korea, the price of many basic goods started to fall again after a spike caused by the closure of the border with China. Sources reported that the price of imported goods dropped as distributors were forced to release their stocks.

China is also one of the largest producers of alternative sweeteners and Coca-Cola warned that the ongoing virus will lead to a shortage. Although China is the group’s third-biggest market, it expects that the coronavirus will only affect revenues by 1-2% in the quarter. Likewise, Danone said sales will be down about USD 100 million in the first quarter because of the virus. Danone also pledged to spend USD 2.2 billion over the next three years in order to “build climate change resilience” into the business. The money will go to reduce plastic waste and to lower the carbon footprint of its supply chain. 

The environment was also on the minds of British people as the UK is looking to launch post-Brexit trade talks. A YouGov poll showed that 57% of respondents thought the UK should enforce stricter environmental laws once it leaves the EU, while 37% said food safety standards should be strengthened, compared to 6% who thought they should be loosened. Moreover, farmers are worried as the environment secretary said he could not guarantee that food standards will not be lowered. British farmers are afraid they will be unable to compete amid cheap imports, funding cuts and a restriction on hiring immigrant workers. 

The Netherlands only narrowly approved the free-trade agreement with Canada, in force since 2017, amid pressure from local farmers afraid of competition from imports. Farmers across the bloc have also opposed efforts to sign new deals with Mercosur, Australia and New Zealand. Otherwise, the EU’s efforts to punish Cambodia for human rights violations are being challenged as the Cambodian Prime Minister said the state will compensate for losses faced by local companies. The EU ended about 20% of the preferential duties under the Everything But Arms scheme but the PM said he will offer tax breaks to affected exporters. 

Pakistan declared a state of emergency due to a locust outbreak that has destroyed crops, including wheat and cotton. The Prime Minister approved a plan which includes buying planes to spray pesticides. India’s agriculture ministry blamed the country for not reacting fast enough and letting the invasion spread, adding that some 400,000ha of crops in northern India had been affected. In response to a video of locusts in Xinjiang, China, the agriculture department said this was a desert variety which was unlikely to survive in China. Besides, the Himalaya provides an efficient wall against the migration of locusts, while the country has among the world’s best locust monitoring and extermination systems, it said. 

The situation is more serious in Africa, however, as locusts are devastating crops in South Sudan, having crossed over from Uganda. Locusts have also been reported in Kenya, where farmers asked the government to intervene to avoid significant crop losses. The UN warned that the locust invasion could spread to more countries which could potentially create a food crisis. Somalia has declared a national emergency and the UN is appealing for funds to fight the locusts with aerial spraying. Climate change is likely behind the outbreak, which is the worst in 25 years, the UN said.

As farmers struggle with volatile weather patterns and unpredictable trade development, a new tool appeared to help them generate more income: YouTube. The website revealed that farming videos have seen their popularity grow twice as fast as cosmetic videos. While some channels focus on sustainable or organic practices, the most popular YouTubers are young, large-scale, conventional farmers. We particularly liked this video on how to farm Rice Krispies. 

This summary was produced by ECRUU

The US is looking at resetting its tariff commitments under the WTO’s Government Procurement Agreement (GPA), or even exiting it altogether, according to sources who spoke with Bloomberg. The administration is reportedly blaming the WTO’s most-favored-nation (MFN) system for its trade deficit with areas like the EU and China but some analysts warn that US businesses could be hurt if they lost access to GPA tenders.  

The USDA launched its “Science Blueprint” this month, a 5-year plan designed, among other things, to mitigate the effects of climate change on agriculture. Some advocacy groups welcomed the news, saying that the simple act of mentioning climate change was a step forward. However, critics have been quick to point out that it will not be easy to undo the efforts to undermine the USDA’s scientific research over the last few years which led to around two-thirds of agency researchers quitting. 

The situation at the USDA seems to reflect what is going with the general public in the country. A survey by Yale University found that only 30% of Americans talked about the environmental impact of what they eat, while the rest said they didn’t know they should eat more plant-based food. Over half, however, said they would be willing to adjust their diets if they got more information on the topic. 

An ongoing lawsuit in Texas might help with that. The National Press Photographers Association sued the Department of Public Safety over a ban on taking photographs of feedlots with drones. Separately, an investigation by the Food & Environment Reporting Network found that residents of Texas’ cattle feedlot belt say they are suffering from “fecal dust storms” when the wind blows on the millions of tons of manure produced by the cattle, sometimes thick enough to create smog-like conditions. The haze, as well as the amonia, could cause health problems such as asthma. However, Texas’ “right to farm” law, which was initially designed to protect farmers from growing cities, protects the feedlots from any legal action from local residents. 

Nestle reported a net profit of CHF 12.6 billion (USD 12.89 billion) in 2019, up 24% on year and beating forecasts. The organic growth was up 3.5%, driven in part by strong demand for their Starbucks and Nescafe products. The group said it was working hard to guarantee a stable supply of food in China where most of its 30 factories have started operating again. It is still too early to assess the impact of the coronavirus, however, as China represents 8% of its global sales.
Looking forward, the CEO warned that organic growth would likely slow in 2020, adding that the group was planning more acquisitions in high-margin and “trendy” segments. The plant-based meat segment represents a “once in a generation opportunity,” he added, saying that plant-based tuna would be released later this year. On the other hand, Nestle may look to dispose of its US frozen food and water businesses which have not been doing well. In Nigeria, the company is due to start domestic production of milk following pressure from the government to reduce imports. 

Unilever said it would stop advertising its food and beverage products to children below 12 years to help reduce child obesity. It will also launch a “Responsibly Made for Kids” logo for products with lower calories and sugar content. Similarly, the UN is calling on regulating ads to children, especially fast food ads on social media. 

A report by the International Maritime Organization (IMO) analysed by The Guardian suggests that the cleaning systems (known as “scrubbers”) installed in ships to meet 2020 IMO pollution regulations, could result in more pollutants being released in the sea instead, contaminating seafood in the process. Some environmentalists have urged the IMO to ban the use of scrubbers until data, which the IMO says is currently insufficient to really assess risk, is clearer. The WWF, meanwhile, found that the Philippines, Thailand, Indonesia, Malaysia, China and Vietnam were responsible for 60% of the world’s annual ocean pollution, noting that Malaysia was the biggest consumer of single-use plastics. 

In Ukraine, the government gave the green light to Bunge, ADM, Cargill, Louis Dreyfus and Glencore to get together and create TechCo, a company designed to digitise documents related to the sale of agricultural products. There are no concerns about competition as this will only affect post-sales, it said. Something similar is happening in the sugar industry where Dubai-based sugar refiner Al Khaleej Sugar, Universa Block Chain and DMCC Tradeflow signed an agreement to collaborate over the development of a platform designed to boost international sugar trade volumes in Dubai. 

This summary was produced by ECRUU