Tag: Agribusiness

Smithfield Foods, the world’s largest pork processor and the U.S.’s largest hog producer, has been feeling ‘when it rains, it pours’ vibes.

First up: Food and Water Watch (FWW), a consumer advocacy group, claims Smithfield “exploited consumer panic” that the nation was in danger of running out of meat.

Anyone recall posts like Tyson’s food-supply-chain-is-breaking ad?

The group says there was plenty of meat in cold storage, and pork was still being shipped overseas. It filed suit in Superior Court in Washington D.C.

FWW also didn’t have nice things to say about workers’ health and safety conditions during the pandemic.

Secondly… sticks and stones can break my bones, but blocking shipments of pork to Mexico might also hurt me.

As of June 16, Mexico has halted exports of pork products from Smithfield’s Tar Heel, N.C., plant because of quality concerns of hog skins.

The real kick in the pork rib was it just had to happen at the largest pork processing plant in the world. Smithfield said the issue is with a third-party company and is rerouting pork products from other facilities to Mexico.

One disaster was avoided though: Smithfield workers in Sioux Falls, S.D. finally reached an agreement with the plant there on June 17. Their contract expired in May, and they were on the verge of a labor strike had a compromise not been met.

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 “mini 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.