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Plus: Vilsack is Back & China Rebuilds Pork Power Status
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DECEMBER 11, 2020
Magnetic Ag News
Happy Friday.

And it’s an even happier Friday to our Magnetic t-shirt winners: Rachel, Courtney, Miriam, Afton, Kayla, and Teri!

That said, let’s talk headlines:
  • Protein Price Fixing Round Up
  • Ag Secretary Pick: Vilsack is Back
  • China Pork: Show Me the Mega Farm

P.S. Let’s do the math. It’s the 12 Days of Christmas for a reason and we only gifted 6 Magnetic t-shirts. 6 more up for grabs, starting now. Details below.

ANTITRUST IN AG

Broken Record Alert: Poultry Price Fixing
Poultry Processing
Roibu | Getty Images
Target and Chick-fil-A are the two newest faces to join the poultry price fixing saga in the past week.

Tyson, Pilgrim’s Pride, Perdue Farms, and over a dozen other poultry companies were named in the most recent filings. The alleged issues revolve around the companies conspiring by sharing confidential information around prices, demand, sales volume, and bids.

To put it lightly, Target is ticked:

“We filed a lawsuit against these suppliers to recoup the unfair costs that Target was charged for nearly a decade and protect guests and retailers against this harmful behavior in the future," noted a Target spokeswoman.

And if bid-rigging cases sound familiar, it’s because they are. Meat producers, packers, and processors have been routinely accused by their customers for antitrust issues since 2008.

▶️  In the pork industry, a 2018 lawsuit wrapped Hormel, Tyson, JBS, and Smithfield into a similar price fixing ring. The issue at stake: their collective claim of 70% of the market led to too much buddy-buddy time.

▶️  Cargill, Tyson, National Beef Packing, and JBS were sued for price fixing to boost their behemoth beef margins even as cattle prices plunged in 2015 while grocery store beef prices notched record levels.

And then there’s Agri Stats. The friend your parents always side-eyed in your social circle…

Named a co-defendant in a majority of the cases, Agri Stats is a price forecasting and benchmarking service for meat companies. The firm has been called out as the ringleader of sorts as litigators believe it facilitates antitrust activity, spreading information around prices, slaughter rates, and volumes.

Where this goes: Price fixing lawsuits typically include long litigation timetables with eventual settlements. We’ll see when and how these reach an end.

COMMODITY CORNER
Commodity Prices
  • December WASDE report was a snoozefest. Carryout [yearly oversupply] was not trimmed as some thought. Corn & soybeans took the sour news personally, wheat held its own.
  • Chinese corn imports projected higher as they rebuild hog herd [Story below]
AG POLICY

He's Baaack
Surprise Pick
                latenightseth | GIPHY
In a surprising yet recognizable turn of events, a familiar face will be taking back the reins of the USDA in January.

Reports confirm that President-elect Joe Biden has all but finalized his pick for Secretary of Agriculture to be former Secretary of Agriculture Tom Vilsack.

Amid heavy speculation that the USDA chief gig was between former Sen. Heidi Heitkamp and Rep. Marcia Fudge, Vilsack emerged as the apparent safe, comfortable alternative.

+ Worth noting: Ohio’s Fudge was tapped to be Secretary of Housing and Urban Development.

The former Iowa Governor served a full eight years under President Obama. He’s since been leading the U.S. Dairy Export Council.

Vilsack will re-enter the role with new dynamics at stake:
  • Pandemic-related relief programs will need to be addressed
  • Trade and market volatility have amped up
  • Technology advances are critical for rural broadband and sustainability efforts

And you can’t make everyone happy. Vilsack’s Iowa roots, current job, and support of corn ethanol have some believing his only allegiance is to big agribusiness. Friends of the Earth was one of several organizations noting they were "deeply disappointed" with the choice.

Zoom out: Vilsack was a safe pick that both Republicans and Democrats can get behind.
JUST FOR FUN

✈️  US Airlines is calling it quits on this farm animal being allowed as an emotional-support animal on flights…

Scroll to bottom for answer
INTERNATIONAL AG

The China Pork Playbook
China Hog Farm
Suljo | Getty Images
Go big or go home: the mantra of China’s top pig producer.

Muyuan Foods is building the largest single site hog farm in the world. After African Swine Fever [ASF] demolished China’s pig population and sent pork prices to double their previous record, Muyuan is banking on getting a slice of that profit pie.

And they’re in a position to win. While corporate pork companies felt the sting of ASF, they quickly recouped losses as prices spiked. Their counterparts - the small, family-owned herd - didn’t have that same outcome.

But innovation is the name of the game in order for Muyuan to make the moolah. The new farm is highly automated to increase efficiency. State-of-the-art thermal imaging cameras and air filtration systems are being installed to keep disease out.

The mega farm, by the numbers:
21 buildings across the campus
84,000 sows, 10x a typical U.S. breeding farm
2.1 million pigs produced a year

China’s goal: Reduce dependence on the global pork market. U.S. producers know this story all too well. Thanks in part to China plus others, U.S. pork exports account for 29.2% of production and were up 15% to $6.33 billion through the first ten months of the year.

How this ends: It will be no small feat for Muyuan and others to keep ASF out of these high-density production sites. With no vaccine or cure available for the deadly disease, China pork producers are truly betting the farm on this pork herd rebuild.


QUICK HITS

✅  Smithfield Foods is stepping up and offering freezer capacity to public health officials to aid in the distribution of the impending COVID-19 vaccine.
  
✅  Beta Hatch, the insect-derived protein startup, announced its $9.3 million Series A round as it scales up its production to supply animal feed manufacturers.

✅  Orion Samuelson, the famed farm broadcaster and ‘The Voice of Agriculture’, will retire at the end of the month after 60 years on the air with WGN Radio.
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ANSWER

Pigs. Also on the ‘no fly’ list: peacocks & alligators.
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Written by Travis Martin & MiK Fox

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