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Plus: Dean Foods Haunts Suppliers & Ethanol Inventory Issues
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DECEMBER 8, 2020
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Magnetic Ag News
Good morning. Let’s get to the news.

The lineup:
  • A Plant-Based Labeling Fight
  • Dean Foods Stirs Up Dairy Drama
  • Ethanol Feels the Fuel Demand Dip

BTW: Magnetic wants to get in on this whole β€˜12 Days of Giveaways’ thing.

And no, we aren’t spreading Christmas cheer through MacBook Pros or Ariat boots...yet.

But we do have six snazzy Magnetic t-shirts to share. Want the goods? Scroll to see the details.
REGULATION

The Labeling Debate
Meat Labeling
ugurhan | Getty Images Signatures
Plant-based meat proponents are not feeling the meat case labeling love.

In Oklahoma, a judge declined to revoke a rule stating plant-based meat products must display a plant-based claim that is the same size as the brand name.

His reasoning: Hastey shoppers could be misled by a label with traditional meat terminology. And confused consumers are not good for commerce.

The Oklahoma case revolves around Upton’s Naturals, a plant-based food company. They argue, with the help of the Plant Based Food Association, that the rules are overly burdensome when they vary state-to-state and violate First Amendment rights.

Yet, the judge’s decision is evidence-backed.

Some context: The National Cattlemen's Beef Association led a study that found that 55% of shoppers thought β€˜plant-based’ products could still contain meat or animal byproducts. In one example, images of cows and verbiage such as β€˜beef’ and β€˜even meatier’ caused 59% of respondents to think Beyond Meat products contained animal protein.

Here we go again: The meat industry is getting a taste of what the dairy world has been battling for years.

In 2018, the National Milk Producers Federation pleaded for the FDA to strip non-dairy products of using terms such as milk, yogurt, and cheese.

Their take: Plant-based alternatives β€˜are nutritionally inferior to such reference standardized dairy foods.’

But 13,000 publicly filed comments later, and the FDA still hasn’t budged. β€˜Milk’ still graces the cartons of its almond, oat, and soy stepsiblings.

Worth noting: Plant-based foods are booming. 11.4% annual growth led to 2019 sales topping $5 billion across all the categories. Milk alternatives saw $2 billion and meat sat at $939 million.

Wrapping it up: Final rulings in the meat labeling cases are far from over. And the FDA continues to drag its feet on a dairy labeling decision. With a precedent yet to be set, animal groups and their plant-based foes will continue to fight this out in courtrooms.

COMMODITY CORNER
Commodity Prices
    • Grains kicked off the week lower in Sunday overnight trade, then defied bearish technicalities to end the day mixed.
    • Livestock was mixed with cattle feedlots and packers at a standoff. Boxed beef prices closed lower, pressuring packers to lower bids.
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    DAIRY

    No Thanks, Dean Foods
    Dairy Aisle
    ESdelval | Getty Images
    Nearly 500 dairy farmers are up in arms over a legal shakedown with the ghost of Christmas past, Dean Foods.

    The estate of the former dairy enterprise is seeking repayment from producers who shipped them milk in the 90-day preference period leading up to their bankruptcy last year. One Pennsylvania producer was sent a $50,000 bill.

    How we got here: Within six months of filing for bankruptcy, Dean Foods was snatched up by Dairy Farmers of America [DFA]. A $433 million price tag bought DFA 44 properties that spanned fluid and frozen dairy processing capabilities. But that didn’t stop bankruptcy proceedings and technical legalities now have the estate chasing after former suppliers.

    DFA’s not happy:

    β€œWe find it extremely disappointing that hardworking dairy farm families are now put in the position of having to incur costs, either in paying the amounts demanded, or obtaining legal counsel to defend themselves against these farfetched claims. We have no connection to the Dean Foods Estate and are disheartened by its actions.”

    Timing couldn’t be worse: Record-breaking price volatility is creating a stressful year-end for dairy producers. And this comes on the back of a year when pandemic-related supply chain issues had farmers dumping milk even when food retailers couldn’t meet demand for dairy products.

    And the dairy industry is not having it.

    A handful of farm and dairy groups are stepping up to bat to defend the dairy community.

    American Farm Bureau demanded the Dean Foods’ estate lawyers back off:

    β€œShame on these predatory lawyers for bullying dairy farmers at a time when many are struggling to keep their farms running. Someone needs to have the farmers’ backs and I’m proud to say AFBF is stepping-in to do just that,” noted Farm Bureau President, Zippy Duvall.

    Where this goes: Expect a legal showdown in the weeks to come.

    JUST FOR FUN

    Best Bacon Gifts of 2020. All that needs to be said.

    Our personal favorite: bacon soap.

    BIOFUELS

    A Rollercoaster Ride: Ethanol in 2020
    Ethanol Plant
    photosbyjim | Getty Images Pro
    2020 has been a bit of a yo-yo for the ethanol industry.

    Just last month, U.S. fuel ethanol production hit a 9-month high, averaging 975,750 barrels per day. Anticipation for holiday travel gave the industry positive vibes through November.

    But...there’s always a but: Thanksgiving travel was less than stellar and ethanol use for the holiday week was 13% below the three-year average. Blending activity, also a measure of demand, fell to its lowest level since mid-June.

    In the same week, inventory of domestic ethanol hit a 24-week high.

    Economics 101: We’re now in a stockpile situation.

    Where it’s headed: It’s common for ethanol production to increase throughout the last 3 months of the year. But with a global pandemic rearing its head and winter coming, overall fuel demand may dissolve further. Pressure may be mounting for a spring recovery for the corn-based fuel.

    QUICK HITS

    βœ…Β Β GROWMARK & Solinftec collaborated to launch a software solution aimed at creating efficiency for custom applications via sprayers and spreaders.
    Β Β 
    βœ…Β Β Kreider Farms launched Cage Free Hemp Eggs where birds are fed a diet composed of 20% hemp seed meal.

    βœ…Β  Corteva Agriscience launched a new app, IPM Pro, to help farmers measure any potential impact of crop protection products on beneficial insects and pollinators like honey bees.

    βœ…Β Β Chick-fil-A is suing Tyson, Pilgrim’s Pride, and fifteen other poultry companies for alleged price-fixing and bid-rigging.

    βœ…Β Β Rantizo, a drone and image tech software platform, raised a $7.5 million Series A round led by Bayer.
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    Written by Travis Martin & MiK Fox

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