Animal Ag Serious About Sustainability

Twelve American meat, poultry, dairy, and animal feed and ingredient companies solemnly swear they are up to no good good for the animal protein industry.

The companies formed the first joint initiative of its kind, the Protein PACT for the People, Animals, and Climate of Tomorrow. The goal? To “accelerate momentum and verify progress toward global sustainable development goals across all animal protein sectors.”

Submitted as a sustainability game changer, the Protein PACT will make center-of-the-plate sustainability a side dish at the UN Food Systems Summit event in Rome on Tuesday, July 27.

Oh, and this: The North American Meat Institute released its draft sustainability framework too. Public comments are open to help set transparent baselines and measure sustainability progress. The framework has an ambitious 100 metrics determined through collaboration with experts, supply chain partners, and members.

Funding for the Protein PACT came from U.S. farmers and ranchers, and the pork, dairy, and soybean checkoffs also financially supported the effort. The twelve organizations include groups like Animal Agriculture Alliance, Elanco, National Corn Growers Association, Pork Checkoff, and the U.S. Meat Export Federation, among others.

Argentine Beef: Off the (global) Market

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.

Memo: Meat Companies Be On Alert

In case you missed it, the U.S. cattle market is the latest victim of a cyberattack.

JBS USA and JBS Australia were affected over the weekend, making Sunday Funday a little less fun. The attack slashed slaughter numbers by 27,000 on Tuesday alone.

As the largest beef and pork processor in the U.S., JBS accounts for 23% of total cattle slaughter. Plants in Nebraska, Texas, Utah, and Wisconsin were halted, as well as all Australian operations and the largest beef plant in Canada.

The attack took out the company’s IT systems and servers, which ultimately stalled operations. News of the attack, combined with the long weekend and surging corn prices, sent both live and feeder cattle markets down early Tuesday.

Status update: JBS returned to running at ‘nearly full capacity’ on Thursday, just as reports revealed the cyber-criminals behind the hack. The FBI announced that Russian-speaking and ransom-demanding gang REvil was responsible for the attack.

Zoom out: JBS did not comment if they paid a ransom to lift the cyberattack, but with the Colonial Pipeline hack last month, many are curious if this will become a trend.

What’s more alarming? A REvil spokesman shared online last October that the cyber gang had new goals to target agriculture companies.

Meatpackers In the Hot Seat

Rewind ten months and you may remember (or maybe you’ve blocked those memories) when U.S. meatpackers were drowning in COVID-19 cases. Now, Congress wants a peek behind the curtain of what really went down.

Why now? Based on “public reports”, Rep. James Clyburn, chair of the House Select Subcommittee on the Coronavirus Crisis, argues that OSHA and the packers didn’t do enough to stop the outbreaks and protect their employees. He’s adamant to determine if everything was on the up and up.

The numbers: Nearly 54,000 workers across 569 facilities tested positive for the virus. At least 270 died.

In letters sent to OSHA, JBS, Smithfield Foods, and Tyson Foods, the committee noted that the outbreaks not only impacted employees but contributed to further spread in the surrounding communities.

The response: All three companies have issued statements welcoming the chance to set the record straight.  Collectively they have spent over $1.5 billion in response to the pandemic in the form of worker protections, pay increases, and donations to support their communities.

The Digital Meat Case

The e-commerce meat biz is busy.

Just last week, Canadian meat subscription service truLOCAL, the country’s 14th fastest growing startup, was acquired. And in 2020, U.S.-based peers like ButcherBox and Omaha Steaks saw year-over-year growth ranging from 138% to 300%. Even Beyond Meat, the alt-meat powerhouse, set up its direct-to-consumer shop during the pandemic.

And it’s only the beginning.

While direct-to-consumer companies often snag the headlines, most animal protein sales are still made at the grocery store. But even those transactions are trending online. Before COVID-19, 19% of Americans had purchased groceries online. That number more than doubled to 40% by May.

And beef wants its share of the action.

Sign of the times: The National Cattlemen’s Beef Association signed a partnership with digital shopper marketing platform Chicory to boost beef’s e-profile.

Chicory’s Digital Shopping Aisle serves up recipes and ads to shoppers on the web. From there, consumers are driven to the ‘digital meat case’, where they can plop steak, roast, or ground beef into their digital basket for checkout. A quick pickup at the nearest Kroger, Walmart, or Albertsons is all that’s left to do.

Where this goes: The global pandemic pressured the meat value chain in numerous ways. But by putting the pedal to the metal on e-commerce tools and subscription service systems, the industry is setting itself up for long-term success. Expect to see more in this space sooner rather than later.

The Labeling Debate

Plant-based meat proponents are not feeling the meat case labeling love.

In Oklahoma, a judge declined to revoke a rule stating plant-based meat products must display a plant-based claim that is the same size as the brand name.

His reasoning: Hastey shoppers could be misled by a label with traditional meat terminology. And confused consumers are not good for commerce.

The Oklahoma case revolves around Upton’s Naturals, a plant-based food company. They argue, with the help of the Plant Based Food Association, that the rules are overly burdensome when they vary state-to-state and violate First Amendment rights.

Yet, the judge’s decision is evidence-backed.

Some context: The National Cattlemen’s Beef Association led a study that found that 55% of shoppers thought ‘plant-based’ products could still contain meat or animal byproducts. In one example, images of cows and verbiage such as ‘beef’ and ‘even meatier’ caused 59% of respondents to think Beyond Meat products contained animal protein.

Here we go again: The meat industry is getting a taste of what the dairy world has been battling for years.

In 2018, the National Milk Producers Federation pleaded for the FDA to strip non-dairy products of using terms such as milk, yogurt, and cheese.

Their take: Plant-based alternatives ‘are nutritionally inferior to such reference standardized dairy foods.’

But 13,000 publicly filed comments later, and the FDA still hasn’t budged. ‘Milk’ still graces the cartons of its almond, oat, and soy stepsiblings.

Worth noting: Plant-based foods are booming. 11.4% annual growth led to 2019 sales topping $5 billion across all the categories. Milk alternatives saw $2 billion and meat sat at $939 million.

Wrapping it up: Final rulings in the meat labeling cases are far from over. And the FDA continues to drag its feet on a dairy labeling decision. With a precedent yet to be set, animal groups and their plant-based foes will continue to fight this out in courtrooms.