🐂 Beef on the Brink + Brazil's BSE Situation, Vilsack Soundbites, and more...

Desperately dry conditions across North America are driving ranchers to sell off their cattle—leaving their futures in question.

Cashing out cows is an effort to cut back on mouths to feed from land that’s too dry to graze or yielding disappointing hay crops. In some regions of hard-hit Oregon, where early irrigation shut-offs sent shockwaves, hay prices have increased nearly 100%. And it’s not just cattle feeling the heat: in the agriculturally diverse state, everything from grass seed to Christmas trees to pears is burning up.

By the numbers:

Canadian producers expect to cull 20-30% of their herds vs. a normal 10-12%
1/3 of U.S. cattle are in drought-stricken areas
Mexican ranchers expect recovery from the drought to take 2-4 years

Bad hangover: The selling off of cows and heifers today will lower total cattle inventory into 2023 and beyond. Cattle’s long gestation period and required time to reach market weight mean a longer impact.

And ranchers have already started selling cattle at lower weights, reflected in the USDA’s trimmed beef production estimates for this year and next.

Where this goes: Consumers can expect these issues to hit them right in the wallet. Beef prices are likely to increase as early as this fall.

And if history is any indicator, it could be rough; after 2014’s Canadian drought, beef prices in the country jumped 25% and stayed elevated for at least two years.

Quick Hits

→ More herbicide hot market gossip. The world’s second-largest GMO-tolerant herbicide, glufosinate, has found itself at a six-year price high as reduced production load and raw material price increases affect output.

→ Drones on a sugar kick. Brazil has found that sugarcane is the agricultural crop that most uses unmanned aerial vehicles to apply pesticides in the ag-rich country.

→ India’s still protesting… Hundreds of thousands of farmers gathered on Sunday for the biggest rally yet in a series of demonstrations to get the government to repeal new agricultural laws.

→ Robo-$caling. Startup Carbon Robotics raised a $27M Series B round to scale production, grow its engineering team, and hire a commercial support team.

→ No man’s land for labeling. The USDA’s Food Safety and Inspection Service published a notice to solicit comments and information on how to label meat and poultry products made using cultured cells derived from animals.

→ One man’s trash is another man’s treasure. Steer, cow, and hog by-products have reached six-year price highs, with year-to-date steer hide and offal values increasing 65.8%.

→ Sad status in Madagascar. After nearly four years without substantial rain, the island country is experiencing its worst drought in four decades, leaving tens of thousands of people in “catastrophic” levels of hunger and food insecurity.

Mad cow disease has spontaneously popped up in two separate locations in Brazil and the “atypical” cases have halted Brazilian beef exports to China.

China and Brazil have an animal health pact that allows Beijing to evaluate the problem, halt imports, and decide when they want to resume imports.

Beef export buster: China and Hong Kong buy more than half of Brazil’s beef. Brazilian beef producers will be hurting until exports resume.

The two cases are not related and appeared in two separate meat plants—one in Mato Grosso and another in Minas Gerais. These are only the fourth and fifth reported cases of “atypical” mad cow disease in Brazil in 23 years.

What makes them “atypical?” They cannot be linked to the bovine eating any contaminated foods and are 100% spontaneous in nature. Brazil reports they have never had a case of “classic” mad cow disease.

These cases were confirmed on September 3, after they were sent to the World Organization for Animal Health (OIE) lab in Alberta, Canada.

The good news: There is no risk to animal or human health, the agriculture ministry of Brazil said.

Plenty of ag industry dynamics are keeping Tom Vilsack busy in Washington D.C. these days. The U.S. Secretary of Agriculture has been making the media rounds to shed more light on policy, relief packages, trade, and more that’s influencing the farm and ag landscape. Here are some soundbites from recent interviews:

On China…

“I've had conversations with my counterpart in China, and I think at this point, the expectation is that we're going to continue to see purchases. Why? Because I think it's in both China and the United States’ best interest to continue to look for ways in which we can collaborate and cooperate in this trade sphere. Secondly, the fact is China needs us; they need the food that we can supply.”

On climate...

“We need to be serious about this [climate], but we need to do it in a way that creates new opportunities for farmers, as opposed to shutting doors or limiting opportunities. We’ve begun that process and have recently announced a small commitment on the part of NRCS to focus on funneling resources into climate-smart agricultural practices.”

On fires...

“The fact is that over the course of many, many years, we have attempted to do forest management on the cheap. We have invested some money, but not enough money in terms of hazardous fuel reduction—getting that wood out of the forest so that when there is a fire, it’s not as catastrophic as we are currently experiencing.”