Extreme weather conditions have prompted a much-needed insurance revamp for French farmers.
The situation: French President Emmanuel Macron said the nation will set aside 600M euros ($709M USD) a year to finance the new system.
Why now? An agricultural disaster has been declared in France after an atypical early spring frost hurt crops and many vineyards. Agriculture minister Julien Denormandie said “significant losses” have been registered.
Let’s just say, it was ugly. Apricot and peach farmers have lost up to 90% of their harvest in the Drome and Ardèche regions of central southern France. And 80% of the nation’s vineyards have been impacted by the April frost.
A soundbite: “We’ve never experienced anything like this frost wave,” Denormandie said. “This is probably the greatest agricultural catastrophe of the beginning of the 21st century.”
The U.S. is out, and the Taliban is in (again).
Amid the humanitarian crises witnessed over the past several weeks, the Afghan people are now facing another looming problem: agricultural instability and food insecurity.
In a country where 70% of people live in rural areas, agriculture is a BIG deal —providing livelihoods for over 80% of the population. And the timing of the Taliban takeover couldn’t be worse for Afghan farmers.
Planting problems: It’s winter wheat planting season, and the unrest is causing major delays in getting seed into the ground. The UN Food and Agriculture Organization (FAO) is estimating a 25% shortfall in this year’s wheat crop. And with wheat providing over half of Afghans’ daily calories, that’s a major problem.
And it’s not just wheat.
Coming off a high: Roots of Peace, a California-based nonprofit, has spent the last two decades clearing Soviet-mined fields and helping farmers reintroduce grapes and other fruits to the region in an effort to quell the production of poppies: the crop supporting the Taliban’s heroin trade.
It’s grape harvest season, and with the Taliban now controlling border crossings and the international community freezing bank assets, farmers are having difficulties marketing their crops.
Where this goes: Next week, the UN’s humanitarian arm will host a conference in Geneva hoping to raise the $606M in aid it says is needed to assist 11 million Afghans for the remainder of 2021. And with one-third of all Afghans considered food insecure, the stakes couldn’t be higher.
Mad cow disease has spontaneously popped up in two separate locations in Brazil and the “atypical” cases have halted Brazilian beef exports to China.
China and Brazil have an animal health pact that allows Beijing to evaluate the problem, halt imports, and decide when they want to resume imports.
Beef export buster: China and Hong Kong buy more than half of Brazil’s beef. Brazilian beef producers will be hurting until exports resume.
The two cases are not related and appeared in two separate meat plants—one in Mato Grosso and another in Minas Gerais. These are only the fourth and fifth reported cases of “atypical” mad cow disease in Brazil in 23 years.
What makes them “atypical?” They cannot be linked to the bovine eating any contaminated foods and are 100% spontaneous in nature. Brazil reports they have never had a case of “classic” mad cow disease.
These cases were confirmed on September 3, after they were sent to the World Organization for Animal Health (OIE) lab in Alberta, Canada.
The good news: There is no risk to animal or human health, the agriculture ministry of Brazil said.
Iced coffee picked up a new meaning last week, and not in a good way.
Early in the morning on July 20, air temperatures across Brazil’s coffee belt settled at an icy 29 degrees Fahrenheit. That’s the coldest temperature the region has seen since 1994.
And just like chocolate milk does not come from brown cows, frozen coffee plants do not make iced coffee.
Farmers are still assessing the extent of the damage, but early indications are not good. One estimate pegs the damage at 4.5M bags off the 70M bag projection for 2022 exports. But the full impact won’t be known until farmers are able to determine if the plants can be saved or not.
Get in line: Like the Starbucks drive-through, the line of challenges stacked against Brazilian coffee farmers is long. Before the frost, drought conditions plagued this year’s growing season, and futures prices were already high. Following the frost, prices surged another 13%.
Dark roast coming? The coming months will be mega important to the cost of your caffeine habit. Forecasters are predicting a return of La Niña. AKA more drought.
If the forecasts come to fruition, count on prices to keep rising.
Stop us if you’ve heard this before.
African Swine Fever (ASF) is stirring up panic in the pork world.
Some viruses just won’t take a hint.
How it started: Germany has been doing everything it can to keep infections out of its hog herd. They went as far as building fences along their border in an attempt to keep infected wild boars in Poland. But last September, the game changed when the first cases of ASF were confirmed in wild animals.
Amidst its own recovery from the devastating impact of the virus, China took the news of wild German boars with ASF hard. They, among other Asian nations, immediately banned imports of German pork.
How it’s going: Germany is the newest addition to the list of countries that have now found ASF in farm-raised pigs. Two farms were confirmed to have the virus last Friday: one an organic farm of about 200 pigs, the second a small farm with only two pigs.
Most in the German pork industry do not see the news as all that concerning. They point to the fact that they have already been limited on export options, thanks to the ban on exports to Asian nations. And the EU is expected to maintain their regionalization approach to restricting trade within its borders.
The U.S. is the reigning bean queen no more: instead, Brazil is now leading the global pack in soybean production.
In the 2020-21 season, Brazil produced a record 4.99B bushels of soybeans, up 8.9% from last season’s record crop of 4.59B bushels. This year’s land harvested will break the country’s record yet again with 95.16M acres, up 4.2% from last season.
Clearing new frontiers: Brazil’s soybean crop has grown exponentially in the last two decades, with production expanding first from the Southeast up to the Midwest and now to the North/Northeast regions.
Some trees were harmed in the making of those soybeans. The soybean boom has come at the expense of millions of acres of Brazil’s forests and grasslands.
And mama’s always right: Mother Nature is seemingly warning against clearing forests and vegetation in Brazil for ag production, with signs of local and regional temperature increases.
But even with these regional weather changes costing Brazil’s soybean farmers an estimated $3B+ per year in lost productivity, profits grabbed by claiming more land for soybeans outweigh the economic harm.
Carbon credit conservator: One new initiative involving 55 growers in Maranhão and Mato Grosso states, in the heart of Brazil’s farm country, is trying to change that economic incentive by rewarding producers for their “environmental services.”
Russian sparkling winemakers are popping bottles, while the French champagne industry is fizzing in frustration.
Last Friday, Russian President Vladimir Putin signed a new law granting Russian sparkling winemakers the exclusive use of the term shampanskoe (Russian for “champagne”) on the label.
But not everybody is raising a toast: French Ag Minister Julien Denormandie said “champagne” could only be used on sparkling wines from the specific region in France.
Champagne exporters grab a sharpie: Exports of the bubbly to Russia have come to a flat stop while champagne makers decide how to add the now required “sparkling wine” in Cyrillic characters on the back of the bottle.
Russia isn’t the heaviest champagne drinker (that would be the E.U. and the U.S.). But it did account for nearly 1.4% of Champagne’s total exports in 2020 — making Russia the 13th biggest market by volume there (and the only one banning the region’s name from the bottles).
What’s ahead: It’s all hands on deck for France’s foreign affairs team as it works with Russian officials to reverse the new law. They are bringing out the big guns with escalation to the World Trade Organization if necessary.
Ever consider playing poker blindfolded?
That’s essentially how trading agricultural goods with China works.
The country of over 1.3 billion people has been doing its best to hold its ag industry cards close to its chest.
Consider the handling of its rebound from African Swine Fever.
Nine months ago China stated they were well down the road to recovery, and the country’s pork production was buzzing right along again. Then, 2020 saw China import more pork than ever before.
Sounds like someone was bluffing.
Some economists argue that’s exactly what was going on. Theories suggest China might have withheld the true state of their swine herd so they could purchase almost a billion bushels of corn at lower prices.
But signs do point to their swine herd actually growing again. That giant pile of corn they’ve been snapping up in recent weeks has to be going somewhere. The country’s been importing so much that ships have had to wait up to a month to dock and unload.
Worth noting: The USDA has estimated that China will import 26 million metric tons of corn this year, but some in the industry think that number will continue to grow.
Time will tell because China probably won’t.
Life is like a box of chocolates…and the Ivory Coast really didn’t know what it was going to get.
This year’s rainy season has been unusually dry for the past month, and it’s threatening the April-to-September cocoa mid-crop. The heavy downpours that normally characterize April to mid-November in this region are nowhere to be found, dampening farmers’ hopes for the crop. In fact, last week’s rainfall in the city of Soubre was 46.2 mm below the region’s five-year average, according to Reuters data.
In other regions, rainfall was equally MIA.
Why does the Ivory Coast cocoa matter so much? Well, the country produces about 40% of the world’s cocoa beans. And it’s not just this year’s crop in jeopardy: The dry spell could also spell a delayed crop next year.
Big picture: The world eats a lot of chocolate, to say the least (worldwide production averages about 4.7 million tons per year). But cocoa is also the Ivory Coast’s largest export, and the industry employs more than 6 million people.
The silver lining is the Ivory Coast has discovered an innovative way to utilize more of the cocoa plant. What would normally be waste is turned into renewable fuel — which not only helps produce electricity, but also sparks a new revenue stream for the 600,000 cocoa farmers in the country.
That news, at least, is pretty sweet.
The world’s number five beef exporter, Argentina, slammed the brakes on beef exports in mid-May.
Why? The country’s Agroindustrial Council suspended exports for one month with intentions to lower domestic inflation. Beef exports in Argentina have gone sky-high in recent years, and the government blames exports for the crazy inflation.
To the moon. So far, inflation is up nearly 50%. And the fear from the Argentinian government is that’s just the start…
But inflation is nothing new for the South American nation. This is their third consecutive year in a recession. During the first quarter of 2021, consumers watched their prices shoot up 17.6%. Many say they have no money left to purchase the expensive protein source.
And back on the farm… Farmers aren’t thrilled, to say the least. To argue the government’s temporary kibosh on exports, farmers held a livestock sale strike that lasted through June 2, forcing processing plant closures across the country. And they’re prepared for more: farmers have threatened a grain sale strike next.
Where this goes: Producers are upset their export market is temporarily MIA. Plus, countries worldwide will feel the pinch: China, for example, imports more than two-thirds of Argentina’s beef, and will have to find somewhere else to fulfill its demand.