Outbreaks deepen in packing plants
It’s Monday, the fifth week of the nation’s social distancing to fight the COVID-19 crisis, and one of the big concerns about the food supply chain is starting to develop.
On Sunday, Smithfield Fields announced that it was “indefinitely” closing its pork processing facility at Sioux Falls, S.D., because of a coronavirus outbreak among plant workers. In announcing the South Dakota closure, Smithfield President and CEO Kenneth Sullivan gave this ominous warning:
“The closure of this facility, combined with a growing list of other protein plants that have shuttered across our industry, is pushing our country perilously close to the edge in terms of our meat supply. It is impossible to keep our grocery stores stocked if our plants are not running. These facility closures will also have severe, perhaps disastrous, repercussions for many in the supply chain, first and foremost our nation’s livestock farmers. These farmers have nowhere to send their animals.”
The company says it is awaiting further direction from local, state and federal officials. USDA officials didn’t immediately respond to a request for comment Sunday.
Keep in mind: Economists warn that when slaughter plants go offline, the prices paid for livestock can fall and meat prices rise. That’s what happened last year after a fire shut down a Kansas beef packing plant.
By the way: Agri-Pulse’s Bill Tomson is reporting that the Food Safety and Inspection Service has told meat inspectors that they need to find or make their own masks. Read his story here.
Farm groups and their allies continue to appeal for COVID-19 relief, even as President Donald Trump promises that his administration will soon release a $16 billion aid package for farmers.
On Friday, senators from Arkansas and Mississippi asked Agriculture Secretary Sonny Perdue to include assistance to catfish producers. “All aspects of the domestic aquaculture industry have been severely affected by the COVID-19 pandemic,” the senators wrote.
The California strawberry and blueberry commissions also sent in an appeal on Friday. “About 15% of the fresh strawberry and 30% of blueberry markets and even larger percentage of the frozen market for strawberries have been lost” due to the foodservice disruptions, the commissions said in a joint letter.
Congress heads to another PPP showdown
Republican congressional leaders are vowing to try again to push through new funding for a highly popular forgivable loan program for small businesses, including farms. Last week, Democrats blocked a bill to provide another $250 billion for the Paycheck Protection Program, arguing that there were other needs that Congress needed to address as well.
In a joint statement over the weekend, Senate Majority Leader Mitch McConnell, R-Ky., and House Minority Leader Kevin McCarthy, R-Calif., said they would insist on a clean funding increase for PPP without other spending Democrats want. The PPP "burned through roughly half of its initial funding in just its first week” and “American workers are in crisis,” the statement said.
House Speaker Nancy Pelosi argues Congress also urgently needs to put money into the Small Business Administration’s disaster loan program as well as others.
Analysis: COVID-19 may hasten dairy farms’ demise
Analysts at Rabobank have sharply lowered their expectations for the dairy sector because of the impact of the COVID-19 crisis on the global impact. The damage to the dairy market “could have a significant negative impact on producers and accelerate dairy farm consolidation,” the analysts warn.
Prices for some dairy products will be as much as 30% lower than they were before the pandemic hit, the analysts say.
Following the initial spikes in consumer purchasing, the industry will face lower retail and foodservice sales along with a “significant slowdown in global trade that’s going to push stocks up. Longer term, “a global recession and widespread loss of income and savings, among other factors … could keep dairy product prices and farm-gate milk prices under pressure into 2021,” the analysis says.
China buys more U.S. wheat
Chinese importers are again buying U.S. wheat as the country attempts to meet its tariff rate quota, as promised under the “phase one” trade pact. The USDA on Friday announced an export sale of 165,000 metric tons of hard red winter wheat to China. The U.S. will ship 55,000 tons in the 2019-20 marketing year and 110,000 tons in 2020-21.
When China joined the WTO it agreed to a 9.64-million-metric-ton quota for wheat.
The new sale follows an announcement in late March that China purchase 340,000 tons of hard red winter wheat. Of that total, 55,000 tons are for delivery this marketing year and 285,000 tons are for 2020-21.
China only imported a total of 236,062 metric tons of wheat in all of last year.
Brazilian soy exports booming
Brazilian soybean farmers, propelled by a large harvest and weak domestic currency, exported nearly 12 million metric tons of soybeans in March, most of which is destined for China, according to the Foreign Agriculture Service.
The value of the Brazilian real dipped sharply in March as the country deals with the COVID-19 pandemic.
Weather and transportation problems in Brazil recently allowed the U.S. to supplant some exports to China, but Brazilian exports are now dominating and that’s going to continue in the near future, according to FAS.
Key Roundup case set to proceed
A hearing has been scheduled for San Francisco June 2 in an appeal of the first Roundup cancer case to go to trial.
A state court jury awarded school groundskeeper Dewayne Lee Johnson $289 million in August 2018 in his case against Monsanto, finding the company had failed to warn him of the dangers of exposure to the glyphosate-based herbicide. The judge reduced that amount to $78 million.
Monsanto, bought by Bayer in 2018, contends on appeal that the Federal Insecticide, Fungicide, and Rodenticide Act pre-empts California law, meaning that EPA “would have rejected Monsanto’s request” to a state-required warning label.
Keep in mind: Bayer and attorneys for thousands of plaintiffs have reportedly been negotiating a settlement, but talks have stalled recently.
Industry leader confident bird flu contained
Turkey industry leaders believe USDA has contained an outbreak of high pathogenic bird flu in a South Carolina commercial turkey flock.
“We’re confident USDA has done everything exactly as it should be done,” National Turkey Federation President Joel Brandenberger told Agri-Pulse, referring to biosecurity and response measures being taken.
Brandenberger said after initial testing of other flocks within a 10-kilometer radius, officials said they did not find low or high pathogenic avian influenza in any nearby flocks.
He said it. "I can tell you, he doesn’t lack for advice.” – Tom Vilsack, president and CEO of the U.S. Dairy Export Council and former agriculture secretary, talking about his successor, Sonny Perdue, and the COVID-19 aid package on which he’s working.
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