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Plus: Broadband #Goals & Cotton's Crummy 2020
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DECEMBER 1, 2020
Magnetic Ag News
Good morning. If you can believe it, it’s December.

Let’s get to it. On the agenda:
  • Anxious Much? US Pork Leery of Imported Ingredients
  • #Goals for Rural Broadband
  • US Cotton Crop Could Use a Breather

P.S. Attention, College of Ag Students: Looking for a resume-worthy marketing experience that includes growing a brand on campus, sweet Magnetic swag, and incentives for hitting growth goals? Scroll to see the details.

P.P.S. Shout out to Kaitlyn S. & Lawrence L. for reminding us that Heidi Heitkamp is from South North Dakota. Keep keeping us honest, folks!

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BIOSECURITY

US Pork Fears an ASF-Infected Feed Fallout
Pork Feed Ingredients
Baloncici | Getty Images
For two years, the US pork supply chain has pulled all the levers to halt African Swine Fever [ASF] from reaching the homeland.

Their next unlikely enemy in maintaining the ASF-free status: organic soybean meal.

As boatloads of the crushed protein supplement hit US ports, the industry is nervous as ASF can survive within the feed ingredient during oceanic trips.

How we got here: During the PED virus in 2014, many worried the disease was spreading via swine feed. But at that time, international ingredient traceability was practically non-existent.

Fast forward to today and all soy-based products from China, Russia, and Ukraine are getting the side-eye.

With a mean
holding time of 168 days in the feed, ASF could sneak itself into the feed supply chain and be disastrous. Mills could potentially mix and distribute the virus while trucks would criss-cross farms depositing feed. Super spreading at its finest.

It would get ugly, fast.

So one might ask: why not ban importing ingredients from ASF-positive countries?

Welp, that’s a no-go. Trade agreements won’t allow it even in the face of an industry-shattering risk.

The next best defense? Data.

Two swine gurus - Gilbert Patterson, chief medical officer of VetNOW, and Scott Dee, director of research at Pipestone Vet Services -  have partnered up to attack the feed sourcing issue.

Using government and trade data, they built a tool to trace how and where feed ingredients enter the US. And while analyzing 325 Ports of Entry could be chaotic, the tool shifts focus only to ports where potentially contaminated feed is hitting the dock.

Plus, the team is advocating to mimic Canada, where product received from ASF-positive countries is siphoned to a separate holding area to wait out the virus’ life cycle. Only then does the ingredient get released into the animal food chain.

What’s at stake: An ASF outbreak in the US could cost the pork industry up to $50 billion over a decade. Pork exports would evaporate overnight and the entire protein space would experience depressed prices. Furthermore, US grains would get smacked too. There’s no room for error. The focus on feed will continue long into 2021.

Commodity Prices
RURAL BROADBAND

The Billion Dollar Broadband Problem
Rural Broadband
                Madison Forbes
Rural broadband, or lack thereof, is getting airwaves again in Washington D.C.

Notable gaps of strong broadband signals in rural areas have been illuminated once more by COVID-19. From families lacking high-speed internet for virtual schools to precision agriculture tools being hampered by poor data transfer abilities, rural areas need the bandwidth help.

The backstory: The Federal Communications Commission [FCC] gauges that it will take $80 billion to connect underserved rural areas via fiber broadband.

That’s not pocket change.

To date, available funds sit at $29 billion between individual states, the FCC, and the USDA. But all that money has yet to be invested and policy leaders are searching for ways to shave off a fraction of the cost via electric cooperatives and alternative technologies like satellites.

And the FCC just launched phase one of its Rural Digital Opportunity Fund to kickstart more progress. The auction-style program will provide $20 billion to internet companies who build out rural networks over the next 10 years.

The goal will be to connect 10 million Americans without internet access or who are on dial-up-like speeds.

But it’s not perfect. As Verizon, US Cellular, and others duke it out for the funds, pundits point out the program’s shortcomings.

One big concern: The vastly overstated coverage maps many of these for-profit telecommunications companies tout. To avoid ‘overbuilding,’ they will bypass areas they claim to have service when in reality, the service may be poor at best.

Looking ahead: Many rural and farm groups are hoping that President-Elect Joe Biden can deliver on his campaign promise of good internet service for all Americans. His $20 billion allocation for rural broadband is a good first step to an ‘economic equalizer.’ But while a large sum, it's going to take more for all Americans to get a full signal.
JUST FOR FUN
Ever curious what 4,100 tons of onions piled 11 feet high might look like? Check this out from an Oregon onion farmer over the weekend:

Onion Tweet
FIBER PRODUCTION

Cotton Can’t Catch a Break
Cotton Crop
    Phillip Minnis | Getty Images Pro
Like most crops in the commodity family in 2020, cotton could use a breather.

Prices are just now bouncing back after the ‘pandemic plummet’ when futures sank more than twenty cents from February to April.

A trifecta of intercontinental and economic factors nailed the price outlook:
  1. China’s textile mills shut their doors
  2. Extra cash spending dissolved on clothing purchases
  3. Physical store closures decimated foot traffic

But things got better.

China ramped up their buying to replenish their stockpiles and cotton prices crept higher over the summer.

Then Mother Nature clobbered the crop.

In Texas, where +40% of US cotton is produced, the growing season saw major hurdles.

Drought in the south and west gave the early crop trouble
Severe tropical storms delivered wind and hail that caused many to replant
Freezing temperatures in late October smattered sleet across harvest-ready fields

And even after all that, the USDA kept November production estimates flat at 17 million bales.

The kicker: While there may still be quantity, quality will be the issue. As ice or wind knocked lint out of the boll, the crop’s average grade could be subpar.  

The never-ending cycle:  So with high production estimates despite all the 2020 challenges, a surplus carryover into 2021 is a pretty sure bet. And with it being the highest estimated surplus in 13 years, cotton prices are about to get knocked down again. Only this time, it may be awhile before they get back up.
QUICK HITS

✅  Hormel Foods shared lackluster quarterly results citing that a 7% bump in revenues at food retail couldn’t offset the 23% decline in food-service.
  
✅  Food retail fresh produce sales continue to shine during the pandemic with sales up 7.5% from 2019, via IRI.

✅  John Deere celebrated its agriculture segment's results with fiscal-year sales jumping 8% over 2019 while company-wide net income saw a 9% dip.

✅  New Zealand behemoth Silver Fern Farms launched an e-commerce website in the U.S. for their grass-fed lamb and venison products.

✅  The European Union approved a trade deal to eliminate a tariff on U.S. lobsters, primarily sourced off the coast of Maine. 🦞
MAGNETIC CAMPUS AMBASSADORS

In under a month, Magnetic has exploded onto the scene, racking up 1K+ readers by doing ag news differently.

While most of our readers are young ag professionals, a growing chunk of our audience is College of Ag students and we want to continue to grow that part of our community.

That’s where you come in.


→ Are you interested in creating a campus-specific marketing strategy (a great resume line-item) while nailing monthly sign-up goals (incentives included) and sporting Magnetic swag?

Let our team know, today!

P.S. We’re only launching this program on 8 campuses in the spring. Don’t wait to reach out.

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Written by Travis Martin & MiK Fox
Design Contributor: Madison Forbes

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