🌾 Breweries Eye Barley Situation + Ag's Antitrust News, Smithfield Swap, and more...

Promoting competition is the name of the game for President Biden’s latest executive order signed last Friday. The order tackles competitive issues across 12 agencies with 72 initiatives.

Let’s just say there’s a lot to unpack here.

So what does this mean for agriculture?

One big change will be potential new rules under the Packers and Stockyards Act, which could help farmers bring and win claims, stop chicken processors from underpaying producers, and adopt anti-retaliation protections for farmers who speak out against bad practices.

Other hopeful outcomes include:

More accurate food labels that enable consumers to choose products made in the U.S. versus internationally.
Increased opportunities for farmers to access markets and receive a fair return.
Unraveling equipment-related restrictions on customers’ ability to use independent repair shops or DIY repairs.

And while we’re here… Ag Secretary Tom Vilsack also announced on Friday the USDA will invest $500M into new, small to medium-sized meat and poultry plants.

In other words, meat processor capacity is expanding, and so is the competition.

Soundbite: “It seems to me, in fairness, profit ought to go both ways," Vilsack said about meatpackers making profits while cattle producers sell at a loss.

Quick Hits

→ WASDE’s wheat story. Yesterday’s USDA report dropped the all-wheat acres yield by 4.9 bushels, putting total production numbers at 152 million fewer bushels than reported in June.

→ D.C. driving some dairy love. More than two dozen members of Congress are asking President Biden to reimburse dairy farmers $725M for lost milk revenue due to changes in milk pricing structure and COVID-related supply chain disruptions.

→ Let’s not be dramatic… China’s Vice President called the U.S. on the carpet Friday, noting that friction around trade (like ag goods) should be handled via dialogue and consultations.

→ Sunflower prices rebloom. After a June dip in prices, the oil-origin crop saw markets rebound after the latest USDA planting report showed planted acres down 20% from 2020.

→ Cuba is hungry. The island nation is facing its worst shortage of food since the 1990s, as 70% of its food and ingredients depend on imports.

→ South Korea’s AgTech darling. Seoul-based startup Tridge raised a $60M Series C round as it grows its “global sourcing hub of food and agriculture” via an online platform connecting buyers and sellers of produce and commodities in over 70 countries.

→ U.S. dairy gets flack from Colombia. The South American nation’s Ministry of Agriculture is investigating safeguards for its domestic dairy industry as producers say U.S. imports are devastating their livelihood.

Raise a glass and propose a toast to Western barley farmers… because the future of your affordable, refreshing pint may be a bit shaky.

The rundown: With record heat waves and extremely dry conditions hammering the Northern Plains and Western U.S., 80% of the country’s barley crop, the grain used in brewing most beers, is in drought.

Barley condition by the numbers:

1% of Washington’s crop rated good to excellent.
14% of North Dakota’s crop rated good to excellent.
39% of the total U.S. crop rated poor to very poor.

With 2021 now registering the worst barley conditions on record, the poor yield is expected to create supply issues with brewers and raise prices for consumers.

Just getting started: Experts say these problems won’t be short-lived, noting that climate change will have long-lasting effects on the brewing industry. And that scary notion has some brewers vowing to go green… even before St. Patrick’s Day.

Heineken says they will go carbon-neutral by 2030 and ask the same of their supply chain by 2040. Carlsberg (a behemoth Denmark beer company) is investing in seagrass meadow carbon sinks along the UK’s coastline.

Oh, and this: If you’re wondering what climate-change-in-a-can might taste like, the Colorado-based New Belgium Brewing Company’s “Torched Earth Ale” is a carbon-neutral beer made with ingredients like dandelions and smoke-tainted water (gag).

It’s designed to not taste great and, according to the company, uses “the kind of ingredients that would be available in a climate-ravaged future.”

We’ll take their word for it.

Magnetic's Must-See Stuff

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The meatpacking industry has apparently been listening to “Another One Bites the Dust” on repeat. After Tyson’s CEO changeup last month, Smithfield has announced their own shakeup, naming Shane Smith the company’s new top dog.

And luckily, he’s got some experience in the bacon-makin’ department.

Smith comes equipped with 20 years of Smithfield experience, most recently serving as the company’s chief strategy officer after nearly a decade as executive VP of the company’s operations in Europe. The North Carolina native found his way to Smithfield as a financial analyst after years of experience in accounting.

Rearview mirror: Smith’s predecessor, Dennis Organ, had a rough first - and only - year as CEO, as Smithfield battled COVID-19 on the factory front and in the court of public opinion. He’s stepped down for personal reasons.

Tough road ahead. The new CEO will take on a lawsuit alleging the company stoked fears of a meat shortage in 2020. He’s also facing a shrinking hog supply. Add in government scrutiny of packer profits and industry competition, and the guy’s going to have his hands full.