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MAY 4, 2021
Magnetic Ag News
TOGETHER WITH
Mary T Faber Solutions
Good morning. Cue the trumpets, pour the salsa - it's Cinco de Mayo week! Between that and all the fieldwork we've been seeing, you might say we're in the middle of a farming fiesta.
Tuesday's News:
  • Beefy Blockchains
  • Cows... All The Cows
  • Cargill's Not Not Busy
AGTECH

JBS Gettin' Digi(tal) With It
Blockchain
GIPHY
JBS is having its own Inception moment.

The global meat player has created a blockchain platform that allows suppliers of JBS to register, well, their own suppliers.

In April, beef cattle producers began registering animal sellers on the Transparent Livestock Farming Platform, an initiative sponsored by JBS.

The goal is for all suppliers to comply with socio-environmental criteria for breeding beef cattle in the Amazon Biome.

Translation: The Federal Prosecution Office will use data received from the tool to look for any occurrences of deforestation, hard labor, invasion of indigenous lands, or other non-sustainable practices.

Playing by the rules: The results are sent to the JBS supplier, who now has a crystal clear view of socio-environmental compliance in his full supply chain. If there are issues, the supplier can create plans to dissolve the risks and assist producers in doing the right thing.

Ecotrace created the tool for JBS, but it is an open platform, so anyone in the industry can use the system.

And while that might sound a little sketch, blockchain technology keeps third-party information confidential, and JBS can only see the consolidated analysis of suppliers... aka no sensitive information.

Future state: Right now, signing up is voluntary, but by 2025, any cattle supplier interested in selling to JBS must be registered on the platform.

COMMODITY CORNER
Commodity Prices
Grains: Volatile day with everything headed lower on the close. Dryness in Brazil is keeping the prices supported.


Livestock: Hogs were the bright spot as new African Swine Fever cases in China have many believing demand will stay strong. Cattle lower, but boxed beef prices helped curb the fall.

*as of market close 5/3/21*

QUICK HITS
β†’ Got chicken? Foodservice leaders like KFC, Popeyes, and Bojangles are just a few of the many poultry buyers who’ve publicly commented on supply chain strains for popular chicken sandwiches and fried chicken plates.

β†’ Earnings season. Global equipment maker AGCO notched a 23.4% jump in net sales in their Q1 earnings in part to β€˜healthy farm fundamentals,’ a similar sentiment from the Land O’ Lakes organization that saw a 4% bump in net sales.

β†’ Wildfires gotta go. Testimony was heard last week in the U.S. House Subcommittee on National Parks, Forests, and Public Lands that focused on reseeding and prescribed burns to save rangelands and cattle herds.

β†’ Break the ice. Over 120 agribusiness and commerce groups are advocating for the Great Lakes Winter Commerce Act that promotes more winter-time ice-breaking to enable commercial vessels and ferries to transport goods.

β†’ EPA on notice. A California federal appeals court set a 60-day deadline for the federal agency to either ban the use of chlorpyrifos or impose new exposure rules for the ag pesticide.

β†’ Who needs bitcoin when you've got lumber? Timber prices are up 359% from year-ago levels in part to wet weather, labor shortages, and a booming housing industry.

β†’ Pork lines to slooow down. The USDA has begun notifying plants of a reversal of 2019 rule that removed processing line speed limits.

DAIRY

Cows... All The Cows
Milk
Taizhan Sakimbayer | Getty Images
The dairy industry has been on a wild ride as of late.

Videos of farmers dumping milk spread across social media feeds early on in the pandemic. But as restaurants and schools continue the slow march back to normal something (can anything ever be normal again?), milk prices have recovered and even risen to levels not seen in years.

Why the surge? The return and rise of foodservice demand might be leading the milk price charge, but there are at least two other factors at play as well:

  • The inclusion of dairy products in the USDA’s Farmers to Families Food Box Program helped immensely.
  • Exports. Exports. Exports. As trade tensions with Mexico and China have cooled, their import of U.S. dairy products opened up key channels.


Worth noting: Demand and prices haven’t been the only thing going up in the dairy world.

What else? Cows numbers.

The U.S. dairy herd reached a low point last June but has been growing ever since. 113,000 cows have been added for a total herd of 9.468 million cows, a threshold not seen since 1995.

Milk per cow has also been on the rise, forecasted to grow by 1.5% this year.

Where this goes: More cows and more milk per cow means more milk for everyone. And that’s what has economists a little hesitant to predict much optimism for milk prices moving forward. Add in surging feed costs, and only time will tell where milk markets go.

MAGNETIC'S MUST-SEE STUFF

Must Read: McKinsey just released an updated report on their research into e-commerce and online engagement between farmers and suppliers.

Help us help you. The Magnetic reader survey is still open. We think it will take you approximately 43 seconds to answers the 7 questions. Oh, and did we mention the gift card giveaway…? Get surveyed here.

Driving dairy change? Then don’t miss the Feed the Future Challenge 2021. Share how you are shaping the future of dairy farming via sustainable and efficient solutions that ensure both high quality of life and profitability.

JUST FOR FUN
This whole chicken supply frenzy giving foodservice some trouble needs to get figured out for one popular brand.

Fill in the blank: Popeyes will start exporting its Louisiana fried chicken to the Kingdom of _______ with a new global franchise partner.

*Hint: Cast your eyes toward the Middle East.

Answer on the scroll.
SPONSORED BY MARY T. FABER SOLUTIONS

Bookkeeping Made Easy
Bookkeeping
GIPHY
Growing up on a dairy farm, Mary Faber learned a big lesson: that the day isn’t over until the job gets done.

And like any small business (ag-related or not), getting your finances in order is the key to success.

So let Mary be your bookkeeping secret weapon.

With 10+ years of experience as a former controller of a major ag cooperative, Mary can help you ditch the stress of juggling transactions and get your numbers aligned to manage the day-to-day operations of your business and make savvy financial decisions.

Today, she works virtually from her family’s farm in Illinois as she serves ag-related businesses all across the United States.

And just like she learned growing up on the farm, her job isn’t done until your numbers are balanced and you have a clear view of the opportunities in front of your business.

See what Mary can do for you and your business today.

AGRIBUSINESS

Cargill Is Not Not Busy

Cargill
Cargill
Cargill is on a roll…or should we say sail.

With commodity demand accelerating, especially in China, a lack of new shipping vessels is boosting the dry bulk freight market.

Zoom out: Part of the reduction in new shipping vessel orders is a result of pressure to gas greenhouse gas emissions and uncertainty in the industry about how to go about it.

So what does Cargill have to do with the shipping industry? Let's just say they don't have a tiny $hipping fleet.

One of the largest ship charterers, Cargill has 600-700 vessels in its fleet. Dry bulk accounts for 90% of the fleet use.

Oh, and this: Since 2017, Cargill has reduced its fleets’ gross carbon emissions by 1.5 million tonnes. The company achieved an overall reduction of 5% in CO2 emissions per cargo tonne-mile by 2020 against a 2016 baseline, Cargill said.

Meanwhile... It’s no bull that a bull market is sending Cargill profits sailing in Brazil. As in a five-fold increase last year and 38% increase in revenue.

But beyond Brazil, the company might just benefit from a global β€œmini supercycle.” China buying spree + dwindling stockpiles = soaring prices and volatility.

And when it comes to Cargill's giant grain trader status, mo’ volatility mo’ profits.

REFER & REWARD

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ANSWER

Saudi Arabia
Written by: Travis Martin, Amelia VanLandegen, Daniel Bechman, Rachel Robinson

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