September 21, 2018

Today's News Summary:

Opening the news today a focus on China which reported two new cases of African swine fever on Friday, as the deadly disease continued to spread to new areas in the world’s top pork producer. One case occurred on a farm of 484 pigs in the city of Gongzhuling in Jilin province in the northeast of China, killing 56 pigs, said the Ministry of Agriculture and Rural Affairs. A second case in the Horqin Right Banner area of the Inner Mongolia Autonomous Region killed 22 pigs on a farm of 138 animals.

In other news, the U.S. Department of Agriculture (USDA) is responding to South Carolina farmers and ranchers who suffered damage to working lands and livestock mortality because of Hurricane Florence. USDA is holding a special signup through the Natural Resources Conservation Service (NRCS) for agricultural livestock mortality and carcass disposal. Signup is now available in Chesterfield, Marlboro, Dillon, Marion, Horry, Kershaw and contiguous counties. The first signup period ends September 28, 2018. A second signup period will end on November 2, 2018.

Meanwhile, in response to historic flooding in the aftermath of Hurricane Florence, Perdue Farms is sending truckloads of food and the Perdue Chicken Food Truck to the Carolinas, along with donations to local American Red Cross chapters, to help residents and recovery efforts in the communities impacted by this disaster.

Elsewhere, ongoing volatility in trade, particularly with Brazil, will continue to challenge industry margins, according to the latest quarterly Rabobank report. Restrictions on several Brazilian export plants, the ongoing impact of the quarter two truckers strike and the meat safeguard on Brazilian chicken imports set by China are all issues that could affect margins. Another issue facing the global poultry sector is the rising volatility in global grain and oilseed prices as a result of the summer drought and trade issues.

In the UK, Tesco has unveiled its new discount chain called Jack's that aims to tackle the rising threat posed by German rivals Aldi and Lidl. The first store is in a mothballed former Tesco store in Chatteris, Cambridgeshire. Another outlet in Immingham, Lincolnshire also opens on Thursday. Between 10 and 15 stores are planned for new locations, next to existing Tesco stores, and a small number of converted Tesco stores. Chief executive Dave Lewis claimed that Jack's - named after Tesco founder Sir Jack Cohen - would be cheaper than Aldi or Lidl.

Back in the states, Walmart sent a letter to the Trump administration about two weeks ago asking it to reconsider new tariffs on $200 billion worth of Chinese goods, according to multiple reports. In a letter to US Trade Representative Robert Lighthizer, the retailer reportedly said the immediate impact of the fresh tariffs "will be to raise prices on consumers and tax American business and manufacturers." The letter did not succeed, with the tariffs announced this past Monday.

Lastly today, our weekly retail column reports that beef prices have ridden an often-unpredictable roller coaster over the years. Swings in the wholesale market due to drought and other market factors over time eventually make their way to retail, though often more subtle and slowly. However, as consumers are continuously forced to adjust their budgets for beef, we’ve seemingly become more sensitive to fluctuations. So, when feature prices reach the lowest levels seen in years—consumers take note.

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By Linda Lindner

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