🦟 Biotech Buggin' + Brazil's Soy Spy Game, Beef Market Teeter Totter, and more...

Rise and shine. It’s Friday.

We’re rolling into Mother’s Day weekend, and we’d be remiss if we didn’t give a shout-out to all our epic mama readers out there. You da real MVPs.

Today's headlines:

Biotech Buggin'
Brazil's Soy Surveillance Situation
The Beef and Cattle Teeter Totter

P.S. The Magnetic train hasn’t slowed, and as we roll into summer, we’re looking for some help! Would you or someone you know have an interest in a part-time Growth Marketing Internship? See the details here.

Oxitec, a British biotech company, is keeping an eye on potential agriculture applications as it helps mitigate mosquito-borne diseases through scientific advancements.

The backdrop: In test mode, the company released thousands of genetically-modified (GM) male mosquito eggs in the Florida Keys that carry a “self-limiting” gene that targets and kills future female mosquitos, the main disease spreaders.

The mosquito, Aedes aegypti, makes up only 4% of all mosquitos in the Keys but is the source of virtually all disease transmission. Small, but mighty … mighty terrible.

Promising: In Brazil, trials of the GM mosquito showed a 95% population suppression in under three months.

Neat, but what does this mean for agriculture?

A lot.

In New York, Oxitec successfully released GM diamondback moths (lovers of cabbage, cauliflower, and broccoli). The moths have become resistant to insecticides and cause $4-5 billion of crop damage a year worldwide.

And in Brazil, Bayer and Oxitec teamed up to battle the fall armyworm, which feasts on corn and 350 other plants.

They’re also looking to slow down soybean loopers, which wreak havoc on soybeans, cotton, and corn.

What’s ahead: While ag usage is still in early development and testing stages, once they work out the bugs, many are hopeful Oxitec can lead a new wave of environmentally-friendly solutions for crop protection.

→ Truckers need a lift. A driver shortage in California, where a 30% dip of truckers is hurting carrot and onion harvests, has many on alert for larger ag industry impacts.

→ A lot to chew on. Cargill and France’s Innovafeed have goals to feed 20 million piglets with protein-rich insect oil by 2026.

→ Exports explode. The first quarter of 2021 included all-time high numbers for U.S. exports for dairy products, as well as beef and pork, with many citing decreased shipping backlogs helping to meet international demand.

→ Let’s get vertical. AeroFarms broke ground in Danville, Virginia, on the world’s largest and most tech-savvy indoor vertical farm, which will serve up leafy greens to 1,000 nearby retailers.

→ $olid week in agribiz. Gains in revenue and profits across the board for many like Nutrien. Corteva, Zoetis, Bunge, and others sippin' champagne, too.

→ Swap in the shrimp. Rising ocean and salt levels have forced many Vietnamese rice farmers to pivot to shrimp production, an initiative supported by government training and loans.

→ Progress report. As of Sunday, the planting progress in the U.S. is as follows: 46% of corn, 24% of soybeans, 49% of spring wheat, and 16% of cotton.

As soybean prices skyrocket, global grain traders are looking for their very own spy kids to keep an eye on Brazilian farmers.

The situation: Casual contracts - communicated months ago via WhatsApp, phone calls, and emails - are tempting farmers to dump deals and double their profit by selling at current market prices.

Farmers claim that verbal agreements aren’t contractually binding or cite a washout clause allowing them to resolve their contracts without delivering on their commitments.

Undercover cops: In response, trading companies have set up satellites and spies to surveil farmers, making sure they don’t secretly sell their soybeans to another buyer. Lawsuits have been brought against farmers who have walked away from contracts.

Despite grower privacy and harassment concerns, tough tactics seem to be working. Courts are mostly siding with traders.

Zoom out: Soybeans have rallied to an 8-year high, and China has been a big buyer of Brazilian beans as their pig herd bounces back from African Swine Fever. But Brazilian soy exports are expected to fall in May as China dials back its demand following their large purchases.

But wait, there’s more: Brazilian soybean exports are actually set to take a back seat to iron ore exports for the first time in six years, driven by demand from iron ore producer Vale and - you guessed it - China.

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That moment when your body launches to the top of the seesaw at top speed? Beef packers, please remind us what that feels like.

Beef prices are going nuts. Choice boxed beef prices teetered over $300/cwt. And the wholesale Choice price is up 33%, second only to the record prices reached last year during the pandemic pan!c buying and supply chain meltdown.

Working overtime: To take advantage of markets, packers are gettin’ while the gettin’s good. In 2021, Saturday slaughters have been up 58% over 2020 and more than 92% over 2019.

The other end of the teeter-totter…

Cattle feeders can’t say the same. Fed cattle markets lost their early April rally and tottered down below $120/cwt.

Producers’ margins are tightening as feed grain prices rise sharply. Livestock Economist Scott Brown says for every 10-cent increase in feed costs, there’s an 80-cent decrease in feeder cattle prices just to break even.

And then there’s the d-word. The Drought Severity and Coverage Index is at 180 for the U.S. It’s never been this high in April or May in any year.

With diminishing pasture and hay production potential, there’s little incentive to grow the herd this year; signs point to accelerating beef cow liquidation.