📈 Fertilizer Frenzy Escalates + Vytelle's Victory Lap, Supreme Court Showdown for Pork, and more...

Good morning.

While temperatures tick down as we strut into October, we thought we’d shed light on one crop heating up… hot peppers.

Texas A&M is on its research grind to develop novel solutions to reverse the downward trend in hot pepper production in the United States. One trial is looking at unique habanero cultivars that can, well, bring the heat like never before.

Talk about a spicy science project.

Today's headlines:

Phosphate's Fate
Vytelle's Victory Lap
Supreme Court Showdown for Prop 12

Farmers will soon face a harsh reality when it comes to fertilizer availability and cost. China, the top exporter of phosphate, is banning exports of the major fertilizer component through 2022. Fewer supplies spell higher prices for farmers.

Not Phunny: China’s government has started limiting production of phosphate due to climate emission concerns. They’re also banning exports so they can supply their own farmers the product. The thing about China and phosphate is they produce nearly 30% of the world’s trade.

Here comes the Black Swan: Several factors continue to wreak havoc on prices and availability for fertilizer, including Hurricane Ida, which impacted production in the Delta. Then there’s COVID-19 supply chain issues and increasing shipping costs and energy prices.

Fertilizer prices have increased from 2020 already—U.S. farmers spent around $119 per acre for corn in 2020, which is up from $115.86. And prices of urea, diammonium phosphate (DAP), monoammonium phosphate (MAP) and potash are up 59% or more from 2020. The news from China will not help that trajectory.

Phinding Phosphate: A field crop specialist for Michigan Farm Bureau says farmers should talk to their fertilizer retailers sooner rather than later to figure out what they’ll do in the 2022 growing season. The issues in supply could mean a possibility of inadequate fertilizer for the 91M acres of corn expected for 2022.

Quick Hits

→ BASF presses pause. The chemical giant curtailed fertilizer production at plants in Belgium and Germany citing that high natural gas prices are making ammonia output financially challenging.

→ The totals are in. The LSU AgCenter estimates Hurricane Ida caused at least $584M in agricultural damages to crops, livestock, and the timber industry.

→ RFS rumors continue… Congressional members spanning seven Corn Belt states and both political parties sent a letter to the Biden team to keep the Renewable Fuel Standard and avoid destroying 5B gallons of biofuel commitments.

→ India gets soaked. Heavy rains and flooding from Cyclone Gulab nailed key growing regions of soybeans, cotton, and vegetables, leaving officials with expectations of lower output and higher prices.

→ A new vax in town. The USDA reported that successful trials of a new vaccine candidate will prevent and protect both European and Asian bred swine against African swine fever.

→ A fundraising fiesta. No one said AgTech was hurting for cash these days…

Scaling platform Semios snagged a $100M funding round after a busy summer of acquisitions.
Aerial imagery leader Ceres Imaging raised $23M to boost AI applications for irrigation management.
Toyota deposited some funds into robotics startup Burro’s $10.9M raise to scale its ‘out of the box’ solution for specialty crops.

Better pull out those shades. The future of the livestock industry is upon us, and investors are banking on it being a bright one.

Cha-ching: Vytelle, the Kansas City-based precision livestock company is rolling in the dough thanks to a recent Series A funding round worth a cool $13.2M. Their plans with the cash? Speeding up genetic advancement in cattle.

Vytelle officially launched its integrated technology platform last year, and its forward-thinking team is “reshaping genetic progress” via a three-pronged approach:

A data capture system that records feed intake and weight gain.
An AI-powered genetic analytics tool that processes genomic, phenotypic, and performance data.
A souped-up in vitro fertilization technology.

The up-front herd efficiency and sustainability service provided to the producers is what brought ag investment firms including Open Prairie, Wheatsheaf Group, and Fulcrum Global Capital to the table with big checks in hand.

And with one recent study noting that livestock production is the source of around 57% of greenhouse gas emissions stemming from the global food industry (with beef alone contributing 25%), a more sustainable and efficient herd that requires fewer inputs with exceptional output could gain traction fast.

Soundbite: CEO Kerryann Kocher said it best when summing up Vytelle’s core mission: “We want to make meat and milk viable food choices for future generations. We want every producer to have the choices available to them to make a more sustainable cattle herd.”

When it comes to innovation in agriculture in Nebraska, well… let’s just say they really harvest their potential.

The Combine is a non-profit incubator program that provides resources and support to AgTech startups across the state of Nebraska. From utilizing the program's network of farmers to ensure the startup's technology is needed in the industry to preparation for a capital raise, the program is designed to assist entrepreneurs on an individual basis.

Here’s just a snapshot of some of the startups in the program:

A robot for grain bins
An app for ag-equipment tire appraisals
A robotic caretaker in chicken barns
A virtual fencing technology for livestock operations

Take it from one of their own participants:

"The Combine has been really great to work with, and an awesome resource for Dawson, Treadsure, for me, and actually, for Nebraska." - Eric MacPherson, CEO of Dawson Tire & Wheel.

Discover all that The Combine has to offer today.

Well, that escalated quickly.

The National Pork Producers Council and American Farm Bureau are running their case against California’s Proposition 12 up the flagpole—all the way up. They’re appealing the Ninth Circuit Court decision in July that upheld a lower court ruling against the groups and have petitioned the U.S. Supreme Court to take the case.

The argument: California’s Proposition 12 establishes “arbitrary” production standards. Pork from hogs not meeting the standards does not pass go and is banned from being sold in California. NPPC President Jen Sorensen says the groups are asking the Supreme Court to consider the constitutionality of California establishing regulations that affect operations outside the state.

A little background: In a few short months, on Jan. 1, 2022, Proposition 12 will require all pork sold in the state—no matter where it was raised—to comply with California’s specific housing standards. Unfortunately, almost none of the pork produced in the U.S. meets those standards. And the cost of converting to alternative sow housing systems is estimated in the billions of dollars.

If Proposition 12 stands, NPPC and AFB say it will be out of the frying pan and into the fire for pork producers across the country and California households wanting to bring home the bacon—literally.