China's AgTech Test // The Dairy Squeeze // The Oyster Biz

Good morning!

This isn’t just any average Friday, folks.

National Bacon Day is here! Our team is celebrating by locking in our spots for Camp Bacon this June in Michigan. It’s like summer camp as a kid, only 10,000% times better.

On today's agenda:

China's AgTech Era
An Oyster Issue
The Dairy Rundown

P.S. Shameless plug alert: Catch that ‘Your Logo’ schtick above? Check out below...

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Rural revitalization is the new name of the game for China.

In the first policy announcement following the Lunar New Year Holiday, China’s agriculture minister announced agtech self-sufficiency as a top state issue.

The goal? Get 200 million mostly small-scale farms up to agtech speed to bolster food security.

With a growing population and rising consumption rates, China can't afford a casual approach either. The country’s corn and soybean yields and pork and dairy efficiencies lag behind their global competitors.

Soundbite: “We cannot afford to be complacent for even a moment, but instead must do everything possible to heighten (food) security.” noted Tang Renjian, Minister of Agriculture.

The country’s top companies - Alibaba, Pinduoduo, and others - are rising to the challenge. Breeding and cultivation sciences, AI, quantum computing, and computer chips are all on the technology docket to ramp up farm to fork traceability and competencies.

One real-time example: Apple Watch-style chicken bracelets (we’re serious). They may not send texts or respond to ‘Hey Siri,’ but they digitally track the birds’ steps for early disease detection. This cuts back on labor needs in the country’s hinterlands.

+ Worth noting: China seems set to green light GMOs, noting a need for sophisticated seeds. The government has laid groundwork for the commercialization of new GMO corn and soybean hybrids.

Grains: A wet Brazil forecast wasn't enough to overcome sheepish export reports. Add in reported cancellations of Chinese soybean purchases and prices ended lower.

Livestock: Feeder cattle rallied on lower grain prices while others settled lower, also unable to live up to the hype in export sales.

Ethanol: Production down 253K barrels/day last week as plants slowed natural gas consumption. This is the second-largest production drop in history, only outdone by last March's pandemic onset.

*as of market close 2/25/21*

→ Vilsack gets the thumbs up. The returning Secretary of Agriculture snagged a 92-7 Senate confirmation vote to lead the USDA in the Biden administration.

→ Sliiight issue in Russia. The World Health Organization was notified that seven farmworkers contracted the H5N8 bird flu, a first-of-its-kind human transmission. Workers were asymptomatic.

→ Pilgrim’s Pride takes plea deal. The second-largest U.S. poultry integrator will write a settlement check for $107.9 million in the ongoing price fixing and collusion saga.

→ ZeaKal doing it differently. The startup’s NewType strategy includes building a closed-loop U.S. soybean value chain to capture and share premiums from better composition, processing advantages, and improved sustainability metrics with farmers.

→ BASF’s weather play: The leading crop input manufacturer has teamed up with Salient Predictions to integrate long-range, seasonal weather forecast data into its digital farming decision engine.

→ Dog gone...to Deveron. Ag data platform Farm Dog was acquired by Deveron Corp., a leading ag digital services and insights provider in North America.

→ Earnings palooza:
Land O’ Lakes revealed a 29% earnings increase in 2020.
Elanco reported rosy revenues with its Bayer Animal Health acquisition complete.
Bayer’s biz took a 3.4% earnings drag in part to U.S. weed killer competition.

Oystermen are tossing their shellfish overboard...and they're not just shucking around.

In a seven-state program coordinated by various stakeholders, the “Supporting Oyster Aquaculture and Restoration” (SOAR) initiative is purchasing oysters from 100 farms and chucking them back into the ocean.

SOAR hopes that these mollusks will flex their mussels and restore twenty coastal reefs -- cleaning water, mitigating flooding, and creating wild oyster habitats.

And the oystermen are all about it.

COVID's reckoning: With the pandemic shutting down many raw oyster bars and other eateries, oyster farmers were left with an empty half-shell.

In New Jersey, SOAR will pay the aquaculturists 80% of the wholesale market price if they harvest the oysters from their cages and dump them onto the reefs.

Where this goes: By year-end, SOAR will spend $2 million purchasing 5 million oysters, helping the oystermen, and ensuring a promising future for the industry.

U.S. dairymen and women dream of the good ole days where market volatility and supply chain snafus were as common as oat milk.

But recent economic reports have the industry reflecting on 2020, a rollercoaster of a year. From dumping milk in April to cheering on dairy retail demand in September, dairy folks had all the feels.

Tough stuff: Another 2,500 U.S. dairies closed up shop in 2020, an 8% drop-off from 2019. Wisconsin felt the biggest sting, losing 610 dairies, while Minnesota and Pennsylvania saw 300+ closures each.

But not all is bad... The industry added 97,000 cows and average milk per cow output jumped 1.4% per day. Way to be efficient, ladies.

Looking ahead: When the USDA notes your future as ‘unsettled at best,’ it can be a little unnerving. More supply issues and market volatility could be in the future as experts predict continued foodservice demand flux. Plus, lower government purchases for the Farmers to Families Food Box program won’t help.

Add in the industry’s attempts to combat workforce issues by advocating for H2A programs and immigration reform in D.C., and groups like the National Milk Producers Federation have a lot on their plates.

+ While we’re here: The pandemic boosted fluid and alternative milk product sales throughout 2020. One alt-milk brand, Oatly, is getting a lot of hype. The Sweden-based company with A-list celebrity backing [looking at you, Oprah] filed to go public this week.

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