Daily Headlines for January 12, 2022

by | Jan 12, 2022 | 0 comments

USDA announces increased funding to support school meals and to help continue serving healthy meals to kids

U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced Friday an adjustment in school meal reimbursements to help schools continue to serve children healthy and nutritious meals. This move will put an estimated $750 million more into school meal programs across the nation this year, making sure federal reimbursements keep pace with food and operational costs, while ensuring children continue to receive healthy meals at school.

School lunch reimbursement rates usually do not increase during the school year. However, this year, due to the pandemic, USDA allowed schools to benefit from the highest rates available, which are normally reserved for the USDA Summer Food Service Program (SFSP). By law, these summer rates adjust for inflation annually in January.

This adjustment is well-timed to ensure the purchasing power of schools keeps pace with the cost of living. Schools receiving these reimbursement rates can stretch their operating budgets further during these tough times, while giving families fewer meal expenses to worry about each school day.

At the start of the 2021-2022 school year, the SFSP lunch reimbursement rate for participating schools was already 15% higher than the standard reimbursement for a free lunch. Now, because of higher food costs and other circumstances, schools will receive an additional 25 cents per lunch. Taken together, schools are receiving 22% more for school lunches than they would under normal conditions.

This action is part of USDA and the Biden-Harris Administration’s joint effort to ensure school meal programs are strong and have the assistance they need to navigate current challenges.

According to USDA, the Biden-Harris Administration is working to place greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy, and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America.


Ranch group recognizes progress but skeptical of White House action plan

A week ago Monday, the Biden-Harris Administration announced an “Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain.”

According to R-CALF USA the plan includes massive amounts of government funding intended to slowly rebuild the now dismantled competitive marketing channels for cattle and beef, which has created what the administration calls a “bottleneck” in the nation’s food supply chain.

R-CALF CEO Bill Bullard said the funding announced in the plan should help increase both the number of marketing channels for America’s cattle farmers and ranchers as well as distribution channels for America’s consumers.

“We recognize that this level of government involvement is unprecedented, and that it’s critical for reversing the decades of inattention, neglect and denial that facilitated the elimination of competition in our U.S. cattle industry,” he said.

But Bullard said his group remains skeptical about the plan’s strategy for addressing decades of nonenforcement of U.S. antitrust laws and the 100-year-old Packers and Stockyards Act.

He said his organization waited for years and by 2019 it was clear the government was disinclined to protect the cattle industry from alleged packer buying practices that R-CALF alleged were harming America’s cattle producers in the group’s private antitrust lawsuit filed against the largest packers in April of that year.

“Our nation’s cattle industry is in a serious crisis and while we appreciate the administration’s plans to write rules with which to implement portions of the Packers and Stockyards Act, correct the exploitive “Product of USA” beef label, and increase market transparency by requiring more information, as well as its attempt to identify any new, potential violations of competition laws, the fact remains that the administration has not announced that it will take decisive enforcement action to protect America’s cattle producers from the harms they’ve been experiencing for the past seven years, and we remain disappointed with that omission,” Bullard concluded.


Meat Institute says Biden plan won’t help producers or consumers

Drovers reported the Biden Administration’s $1 billion Action Plan unveiled last Monday to aid farmers, ranchers and consumers would do none of the above according to the North American Meat Institute.

The Meat Institute’s president and CEO Julia Anna Potts said the Biden Administration “continues to ignore the number one challenge to meat and poultry production: labor shortages.”

According to Potts, for the third time in six months, President Joe Biden and his Administration announced the same plans to spend $1 billion to fund government intervention in the market in an attempt to increase prices livestock producers receive while blaming inflation on private industry.

She also said the Biden Administration has “refused to engage with the packing and processing sector they attack, going so far as to hold a roundtable on meat packing without a single beef or pork packer present, and that press conferences and using taxpayer dollars to establish government-sponsored packing and processing plants will not do anything to address the lack of labor at meat and poultry plants and spiking inflation across the economy.

“The Administration wants the American people to believe that the meat and poultry industry is unique and not experiencing the same problems causing inflation across the economy, like increased input costs, increased energy costs, labor shortages and transportation challenges” said Potts.

She also noted cattle producers are currently seeing higher prices because packers have processed the backlog of animals in the system.

The Meat Institute says Biden’s new Action Plan raises several questions, including:

  • How much extra packing plant capacity does the administration think is needed?
  • How high should cattle prices be right now?
  • How long will the government sponsored processors receive government money?
  • How much will the government sponsored processors be required to pay employees?
  • There are many small and medium sized packers in the market today that have never received government support – how will they be affected by the influx of government-sponsored competition?
  • When will these new plants come on-line? 2024-2025?  What impact will that have now?
  • Where are the target areas these plants are needed?
  • Will the new plants have sufficient labor?

The Meat Institute says the White House believes industry structure is keeping cattle prices low, conveniently ignoring the fact the beef industry has changed little for almost 30 years, and that prices reflect supply and demand in a healthy market.


JBS finalizes deal to buy pork processor Rivalea

According to ABC, JBS has finalized a deal to buy the leading Australian pork processing company known as Rivalea

The deal was opposed by farmers concerned about a loss of competition, but it was approved by the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB), giving JBS control of three of the four export pork abattoirs in southern Australia.

Smaller pork producers said the deal could make it harder for them to get their livestock processed at the Diamond Valley Pork plant which Rivaela is a majority shareholder of.

The ACCC, however, felt it was unlikely JBS would profit from that and ultimately raised no objections to the proposal.

JBS declined to comment about the sale but, in a statement, said it would continue to provide kill services at Diamond Valley Pork for current customers and also grow the customer base.


World food prices hit 10-year high in 2021

Reuters reported that world food prices jumped 28% in 2021 to their highest level in a decade and that hopes for a return to more stable market conditions this year are slim.

The Food and Agriculture Organization’s (FAO) food price index, which tracks the most globally traded food commodities, averaged 125.7 points in 2021, the highest since 131.9 in 2011.

The monthly index eased slightly in December but had climbed for the previous four months in a row, reflecting harvest setbacks and strong demand over the past year.

Higher food prices have contributed to a broader surge in inflation as economies recover from the coronavirus crisis and the FAO has warned that the higher costs are putting poorer populations at risk in countries reliant on imports.

In its latest update, the food agency was cautious about whether price pressures might abate this year.

A surge in the price of fertilizers, linked in turn to spiraling energy prices, has ramped up the cost of so-called inputs used by farmers to produce crops, raising doubts over yield prospects for next year’s harvests.


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How did we get here?

From the Holcomb Tyson fire to COVID-19;
Click to see a timeline of events that have brought to light the profit and pricing disparity in cattle markets.


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