The ag news stories you might have missed this past week
Conagra sells Wesson Oil
Conagra is selling it’s Wesson brand of oils to Smucker for about $285 million. Conagra has been going through a reorganization since 2015. Wesson is just the latest part of the business to go on the auction block. The company is trying to change it’s business from selling low profit staples and cheap processed food to producing higher end and higher profit items with fresh(er) ingredients including salsas, organic pot pies and speciality pork and chicken products.
Conagra has sold off it’s private label operations which made products like soups, cookies and other foods that supermarkets sold under their own brand name. The company bought that business in 2012 for $5 billion, never made a decent profit at it, and sold it off in 2015 for half the original purchase price. It even sold of Lamb Weston, the company that’s the french fry supplier to McDonalds and other restaurants. That didn’t make a lot of sense to be because Lamb Weston had had sales of $3 billion and was pretty profitable.
The Wesson brand has been around for more than 100 years. It was originally started by David Wesson in 1899, a chemist who invented a way to refine cottonseed oil to remove bad taste and smell from it so it could be used as a cooking oil.
The acquisition by Smucker is a bit troubling because it already owns Crisco shortening and oils so it’s certainly going to reduce competition in the market. I’ve heard that both products are going to be made at it’s processing facility in Ohio, so basically Wesson oil and Crisco oil are going to be exactly the same product with different labels. I wouldn’t be surprised if the Crisco oil brand (not the shortening) disappears entirely.
Syngenta Lawsuit Goes Forward
Back in 2012 Syngenta released a new GM variety of corn and promoted it heavily. farmers planted it, only to find that they couldn’t sell it to China. The Chinese government had not yet approved that variety of corn for import, and rejected all shipments that were contaminated with it, costing the farmers a lot of money. Grain exporter ADM is also suing Syngenta in a separate suit, as is Cargil.
The claim against Syngenta is that the company knew it’s new corn was not approved for import into China, and was deliberately misrepresenting the approval status of the corn when it was marketing it to farmers so they went ahead and used it. There are other lawsuits going on with more than 350,000 corn growers involved in individual or class action lawsuits against the company, with potential damages hitting $13 billion.
Making things even more interesting is that the China National Chemical Corp, owned by the Chinese government, is in the process of trying to buy Syngenta. So if Syngenta loses, China, which rejected Syngenta corn originally, will own the company.
This particular lawsuit involved 7,000 Kansas farmers, and as noted, others are in the pipeline. It will be interesting to see how this one plays out.
Home Bakery Ban Overturned
The church/school bake sale is something of a tradition around here. Parents bake up all kinds of goodies and sell them at events to raise money for churches, schools, kids groups, etc. It’s also probably illegal here in Wisconsin. Or at least it was until the ban was overturned recently.
Wisconsin law states that bakery for commercial sale must be produced in a licensed, fully inspected commercial kitchen by staff that are properly licensed. While the state generally has ignored things like school/church bake sales for fund raising, it’s a different story if you try to sell your goodies at farmers’ markets and other places.
Until now. A judge overturned that law, and I’m not really sure if that’s a good thing or not.
While I have some sympathy for the women who were cited for selling their baked goods, there are valid reasons why these rules are in place, and the biggest is food safety. I’m a stickler for food safety for a couple of reasons.
First because I’ve worked in the food service business, and Mrs. GF is still involved in it, and both of us know how incredibly easy it is for food to become contaminated and cause someone to become very, very sick indeed.
Second, because I’ve been one of those sick people. I was already nearly unconscious, suffering from explosive diarrhea, severe dehydration and I don’t know what all else when the paramedics carted me out of work on a stretcher and rushed me to the ER where I spent the night with multiple IVs hooked to me and wired up like a Christmas tree.
While I’m sure these women feel the state requirements are unnecessary, they are there for a reason. And I should point out that one of the reasons they are there is to protect them. If one of their products makes someone sick, don’t they realize that they are liable, especially if it can be proven that they were making products in a relatively uncontrolled environment like a home kitchen? They could end up being sued and losing everything they own.
If you look at some of the data being published in the press about the dairy industry, the markets now actually look pretty good. Sort of. In some parts of the world, at least, the dairy markets seem to be improving considerably, especially down in New Zealand. Prices are going up, in some cases significantly, improving the financial picture for farmers. Butter prices are strong and getting better, even the powdered milk market, which had been hit very hard by China’s cutbacks in dairy imports, is doing better. Milk production in the EU continues to drop, showing a decrease of about 2% or more.
But if you take a closer look at the entire picture, there are some troubling indications. Most of this positive data is coming from GlobalDairyTrade, a trade organization which pretends it is a free market in Australia and New Zealand, but really isn’t. It’s actually owned by Fonterra, the huge dairy co-op, and it sells only Fonterra milk products, so the data coming from it is skewed to begin with. And Fonterra has deliberately manipulated the market in the past by increasing or decreasing the amount of product flowing through GDT. So any time I see anyone taking GDT data seriously I wince a bit because not only are GDT prices easily manipulated, but it also deals with a fairly limited market, China and south east Asia, and a fairly limited supply source. A huge market, true, and a significant one. But dairy is a global business and is influenced by a lot more than just China.
The biggest problem right now seems to be US production which continues to go up despite a glut of milk on the market. Speculation that milk prices are going to improve significantly are pushing a lot of mega-farms to add more production, and new mega-farms are in the works. Here in Wisconsin Grassland, the company that infamously stopped taking milk from some 75 farmers here in the state because they claimed new Canadian trade rules cost them sales, is working to build it’s own, 5,000 cow dairy farm.
UW ag economist Cropps says milk prices could go over $17, maybe even hit $18 by the fall of this year, despite the fact US production could be going up by as much as 4%. But that’s based on the belief that China is going to significantly increase milk imports, that EU milk production is going to continue to decline, and production in New Zealand is going to remain flat or even go down a bit.
Changes Oh My
Well, this is going to take a while to get used to. For the first time in like forever, I’m unemployed. Deliberately unemployed. I submitted my resignation at work and I am retiring. Sort of. I won’t be filing for social security for another four years or so, but we planned for this and the finances are already worked out for this situation and active. But it still makes me nervous, anxious.
Granted, I wasn’t exactly working my tail off the last couple of years. I’d dropped back to part time and actually was only dealing with special events at the theater and filling in when one of the day crew was out or we had an emergency to deal with.
Still, it’s a strange feeling, not having a job to worry about.
Fat Saves Dairy Industry?
That’s what it is starting to look like. About the only bright spot in the dairy industry right now seems to be butter and, to a lesser extent, cheese. Butter sales are up dramatically, largely because the fact that eating dairy fats isn’t going to kill you (at least not any quicker than anything else) is finally starting to filter out into the mainstream.
One of these days I’m going to do an article about food and health, and all of the BS we’ve been told over the years. The amount of pure bullshit that we’ve been fed over the decades is mind boggling. From “healthy” hydrogenated plant fats in margarines and shortenings that were supposed to be “good” for us turning out to be responsible for tens of thousands of deaths, to coffee still being demonized despite the fact it seems to help reduce incidences of some cancers and may help prevent some kinds of dementia, to “juice cleanses” that don’t cleanse anything, to the multi-billion dollar “supplement” industry that is selling us little more than snake oil…
Infrastructure Plan? What Infrastructure Plan?
There’s been a lot of press about the administrations “$1 trillion” plan to rebuild the country’s infrastructure and everyone is going “Oh, goodie, isn’t that wonderful!”
But… Well, sorry, but there pretty much isn’t an infrastructure plan. Seriously. Oh, they’re talking a lot about it but no one is actually doing anything about it because talk is free and bridges cost money, so where’s the cash? There isn’t any. The administration can talk all it likes, but the administration doesn’t hand out the money, Congress does. Congress, not the administration, develops the plan, finds the money for it, etc, not the office of the president. And there is little or no work going on in Congress to do anything pertaining to the administration’s plans.
And some of the things the administration has been talking about are more than a little troubling, especially this “private partnership” thing. Why? Because in most cases these “private partnership” deals end up with things worse than they were before.
There is a reason why we don’t have a lot of toll roads and bridges in this country. It’s because we tried it before, going back 200 years or more, and it was a nightmare. Outrageous tolls, violence, unsafe bridges and roads, no investments in improving the system… One of the reasons we adopted a publicly funded, government owned highway and bridge system in this country in the first place was because the private operators so horribly abused the public, gouged them so badly on prices, that the government had to step in because the private model was destroying the transportation system in the country.
The problem with history is that no one seems to actually remember it.
As for this particular infrastructure plan, well, there isn’t one, as I said. Most of the things the administration is talking about like federal grants to local jurisdictions and all of that? That’s going on right now, for heaven’s sake. The federal government almost never directly funds highways and bridges, it does it through a system of low cost loans, grants, etc. Which is what the administration is claiming is its “new” plan. Oh, please…
And let’s face it, most of the problems we’re facing when it comes to the infrastructure system are our own fault because we don’t want to pay for it. Or, rather, the politicians we elect don’t want to because in order to actually pay for maintenance and new construction and all the rest they might have to raise taxes a few cents and that would make the corporations and lobbyists who
bribe them buy their souls [ahem, sorry about that, funny how those typos slip in there] make nice contributions to their campaigns so they can continue the democratic process, a wee bit upset.
But here’s the thing, you are going to pay for it. One way or another. If we don’t pay for it through taxes, we’re going to pay through the nose for it in tolls or user fees. Someone has to pay the bill. There’s no such thing as a free lunch.
4:30 AM? Really???
Not farm related but… This is the third day in a row all three of those stupid cats have been sitting outside the bedroom door yelling at us at 4:30 in the morning. And I come stumbling out of the bedroom in dim light of dawn and stumble over their food dish because they have now gotten into the habit of moving their food dish right in front of the freaking door during the night. How do they even do that? They don’t even have hands much less thumbs and fingers so how do they move a dish half full of kibble all the way across the floor and plant it right in front of the bedroom door???
Oh, very funny, cats. Ha freakin Ha… Good joke. Now stop it!
I don’t know what the world is coming to — cats pulling practical jokes on people…
Just wait, guys. I’m going to find where you’re hiding during the day to take your little 9 hour naps and see how you like being woken up out of a sound sleep…