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US agriculture is set for its biggest price slump in 18 years

A sharp drop in crop prices coupled with rising production costs is set to slash U.S. net farm income this year, though inflation may be masking the significance of these price and income declines, especially in relation to past years. The U.S. Department of Agriculture last week forecast 2024 net farm income at $116 billion, down from $156 billion in 2023 and a record $186 billion in 2022, all in nominal dollars. That would be the fifth-highest on record after the past three years plus 2013.

But inflation-adjusted, the 2024 forecast is 4% below the 20-year average and down 41% from 2022. That would mark the biggest two-year decline in net farm income by percentage since 1983, when the U.S. rural economy was caught in a major agricultural crisis. Net farm income of $116 billion in 2024 would be down 27% from the inflation-adjusted 2023 total, and would represent the largest annual decline since 2006.

Some inflation-adjusted commodity prices are not far off 2020’s low levels, and 2020 would have been an extraordinarily difficult year for farmers if not for massive government payments for both trade war- and pandemic-related losses. Direct government payments were responsible for about 48% of U.S. net farm income in 2020, the highest share since 1983. Discounting government payments, total inflation-adjusted net farm income in 2020 was the lowest since 2002.

Trade war dollars could become relevant again in 2025 pending the outcome of the U.S. presidential election later this year, as candidate and former President Donald Trump earlier this month pledged to enforce steep tariffs on Chinese goods if elected. USDA’s forecast implies direct government payments will account for nearly 9% of net farm income in 2024, a three-year high but well below average, pre-trade-war levels.

Ukraine denies it is considering a compromise on agriculture in EU talks

Terms for the integration of Ukraine’s agricultural sector into the European Union will be determined during negotiations, two ministers said in mid-February, denying that Kiev was considering easing the EU’s green deal. However, a senior official earlier told Reuters news agency that Ukraine could consider giving up EU farm subsidies in exchange for a softening of the green deal during accession talks starting in March.

“The terms of Ukraine’s agricultural sector’s accession to the EU’s Common Agricultural Policy (CAP) will be determined during the negotiation process,” Deputy Prime Minister Olha Stefanishyna and Farm Minister Mykola Solsky said in separate statements. “There can be no talk of any abandonment of subsidies and grants, as the rules should be the same for everyone,” they said.

Ukraine, which has a huge agrarian complex capable of feeding hundreds of millions of people, was invited to join the EU last year and will start sectoral talks on its accession in March to harmonise its legislation with EU requirements. Integrating Ukraine’s vast agricultural sector, which before Russia’s full-scale invasion in 2022 was the world’s fourth-largest supplier of grain, into the EU is likely to be highly sensitive, both politically and economically. Kyiv could be eligible for 96.5 billion euros ($104 billion) in subsidies from the EU’s Common Agricultural Policy over seven years, if current rules are applied to an expanded union.

“It seems to me that the ideal negotiating strategy (is to achieve) fewer restrictions on trade, fewer restrictions on the environment (for Ukrainian farmers) and we are willing to trade this for subsidies,” the official said. The official requested anonymity to discuss sensitive matters. A European Commission spokesperson didn’t immediately return a request for comment.

The talks come at a sensitive time, with farmers across Europe taking to the streets in protest in recent weeks at the EU’s Green Deal regulations on animal welfare and pesticide use, as well as the need to leave 4% of farmland fallow. The subsidy payouts to Kyiv could also force cuts in farm subsidies to existing member states of about 20%, the Financial Times reported last autumn. The EU’s decision to waive import duties on all Ukrainian food in 2022 has already fuelled protests in neighbouring bloc members as farmers struggle to compete with cheaper Ukrainian farm products.

The European Commission last month said it would extend the suspension of its import duties on Ukrainian exports. But it also proposed measures to limit agricultural imports from Ukraine and offer greater flexibility on rules for fallow land in a bid to quell protests by angry farmers in France and other EU members.

European Commission breaks by the growing protests of farmers

As the farmers protests in the European Union intensify, the European Commission has cracked and made some concessions to try and ease the situation. Following protests in Germany earlier this year, thousands of farmers blocked the main roads in France with their tractors. And in the first days of February, thousands of Belgian farmers with around 1,300 tractors blocked the road in front of the European Parliament in Brussels. These most recent protests have seen dozens of farmers in France arrested as they tried to block off Rungis, a main food distribution hub that feeds 12 million people. The French government had previously warned the farmers that any disruption at Rungis would cross a red line and posted hundreds of riot police there. In Brussels, farmers threw eggs at the Parliament buildings and lit many fires across the region. Slurry and farmyard manure was also spread across many of the European Parliament buildings in France and Belgium. The farmers are angry the European Commission continues to cut financial support for agriculture from the CAP (Common Agricultural Policy), designed to protect farmers from falling prices and cheap imports. They are also seething that more environmental regulations are being introduced which they argue are impossible to meet, while trying to produce food for a fast-growing world population.

Isabel Proost, a farmer from Flanders in Belgium, said: “We are here to defend our agriculture. For 3 years, we have been unsuccessfully trying to draw the attention of the Belgian government to our issues. We must finally wake up and, together with all of Europe, fight for a common cause: the ability to pursue the profession of farming for us and our children.” A major bone of contention for the farmers is the European Green Deal, which aims to make Europe carbon-neutral by 2050, and the law on nature restoration, designed to “improve biodiversity in agricultural ecosystems”. Another farmer in Brussels, Bart van Rooyen, said: “The CAP is designed to support us financially to ensure we can continue producing food that is affordable by consumers. However, the European Commission continues to hit our pockets by reducing subsidies, making it impossible for us to compete with cheaper imports. These factors, together with endless environmental regulations, more red tape, and a continuance to hammer farmers, means we have to take decisive action. Enough is enough. The Commission must hear us.”

However, the European Commission insisted it was listening and allowed some concessions to farmers such as allowing them to bring land that was dedicated as fallow, for environmental purposes, back into production again. Under pressure, Ursula von der Leyen, president of the European Commission, said a proposal to work on reducing administrative burdens would be presented at an upcoming meeting of EU ministers. Janusz Wojciechowski, EU Commissioner for Agriculture, said: “In proposing this temporary derogation, the Commission demonstrates flexibility and solidarity with European farmers in the face of exceptional difficulties. By enabling the production of nitrogen fixing crops and catch crops, without the use of plant protection products, this derogation strikes a balance between the short-term necessity of supporting farmers and the long-term need to protect our climate, soil health, and biodiversity.”

At the beginning of February, the joint farm lobby groups Copa-Cogeca sent a letter to Von der Leyen, outlining the Commission’s shortcomings. It said: “We must listen to the echoes that are reverberating throughout our countryside from the west to the east of Europe. Farming communities are facing enormous challenges and pressures, which have only accumulated in recent years. Economic burdens and bureaucracy are strangling farmers across the EU. The effects of climatic and geopolitical crises are impacting our farms considerably. And all this with the feeling that more constraints and more European regulations are going to be imposed on farms with severe and irreversible consequences on productions, income and increase of imports with less environmental and social standards. “Over the last few years, we’ve spoken out vigorously, but we haven’t been heard! As a result, the situation is currently very tense in many member states, with farmers taking to the streets, as the survival of the European family farming as it is known today, is in danger.” All eyes will be on the politicians as European Parliament elections are set for June this year. MEPs are concerned far right parties, which are attracting more farmers, could possibly make gains in the voting.

Can generative AI make poultry farms more efficient?

Poultry producers collect a lot of data. New technology that combines the internet of things (IoT), causal analysis and generative AI could put that data to work to help optimize decisions affecting bird health, production and overall profitability.

At the 2023 Poultry Tech Summit, Evan Sadlon, data science manager, MTech Systems, discussed how this technology could provide more accurate answers to questions such as: What are the effects of different pre-heating regiments on average daily gain?; How does the amount of starter per bird change the inflection point of the growth curve?; and, When should I be running different ventilation programs to minimize feed conversion ration (FCR)?

To illustrate what causal analysis is, Sadlon shared a chart that links drownings to watching Nicholas Cage movies. “According to this chart, all we have to do to save lives is bar Nicholas Cage from starring in any more movies,” he said. “How do we separate Nicholas Cage drowning people into actual causation? That’s what casual analysis is. It seeks to find what actions actually lead to specific outcomes.” Poultry producers can make the same mistakes at their farm with data collection. Sensors in the poultry house use IOT to collect information on a variety of factors, from bird health to environmental conditions within the house. But, without causal analysis, producers may not be able to actually use this data to help improve outcomes, he said.

The addition of generative AI can improve the decision-making process even more. This technology is commonly described as the next generation of artificial intelligence because it can build on the data it collects. Generative AI can help poultry data scientists build on and improve the coding and analysis that they use to make decisions about how the birds are raised and fed.

World pork market remains challenging

Rabobank’s Global Pork Quarterly Q1 2024 report said early indications are that pork production will slow as key regions face contraction in the sow herd. According to Chenjun Pan, senior analyst of Animal Protein at Rabobank, forecasts point to a potential decrease in global pork trade during the first part of 2024 as high inventories in importing countries reduce demand. “We’re looking at a soft market for pork exports, especially with the ongoing crisis in the Red Sea and Suez Canal complicating European shipments to Asia,” Pan said. A trend in the report was the expected decline or flat production in China, the United States, and some European countries during 2024, with disease pressure adding to overall industry challenges.

Although production headwinds could be ahead, feed prices continue to come down, with corn and soybean prices falling 15% to 25% year over year. “Lower feed costs are a welcome relief for pig farmers, improving margins in a time of uncertainty, Pan said. However, Rabobank still cautions that weather-related volatility could impact supply and price movements.

Brazil’s pork production continues to be on the rise as some regions continue to look at declining herds. The group pointed to uneven growth worldwide with African swine fever (ASF) outbreaks and loss-making pressure, especially with breed herd reduction in Asia, particularly China. “We expect disease outbreaks to create ongoing uncertainty in 2024,” Pan said. “Meanwhile, productivity will continue to improve in 2024, driven by genetic gains, better farm management and cost reduction strategies.”

Even with all the market difficulties, pork consumption remains resilient to inflationary conditions around the world. Rabobank expects a mild improvement in global pork consumption during the year. “Pork continues to be a staple protein, holding its ground against more expensive meat like beef,” Pan said.

Urgent state aid is needed for the Ukrainian dairy sector

The Ukrainian Parliament discussed the current situation of the dairy industry on 8 February. According to Arsen Didur, executive director of the Ukrainian Union of dairy industry enterprises, the main topic on the agenda was the complaint from the milk processors about a sharp deficit of raw milk. In 2023, the cow population in Ukraine dropped by 4% to 1.29 million heads, the preliminary calculation of the Ukrainian Agricultural and Food Ministry showed. The shortage adds pressure along the entire value chain, driving prices higher. For example, the average price of butter on the Ukrainian market last year jumped by 40%. “The average capacity utilisation ratio [of Ukrainian dairy processors] is 50% to 60%. This impacts production costs and competitiveness,” Didur told the local newspaper, the Telegraph. Without state aid, milk companies will neither modernise their production capacities nor maintain operations at the level of last year.

The issue appears so tense that Ukrainian food security might be on the line. Didur indicated that the National Security and Defense Council of Ukraine, in order to not let the situation in the dairy industry deteriorate further, had issued a decree ordering the authorities to embark on the 10-year development plan. Without it, the industry will be doomed for gradual weakening. “If we do not stimulate milk production and increase the number of livestock due to state support,” Didur said, “then we will constantly have a deficit. Consequently, of course, there will be a high price for raw materials. Now we are already losing some foreign markets due to increased costs,” he said, adding that the domestic market would be lost. “If today we have already lost it significantly in cheeses, then tomorrow we will lose it in cottage cheese, as well as in the same dairy products.”

However, the Ukrainian 2024 national budget has already been put together with no extra funds to support the dairy business. Any aid the lawmakers approve for the sector will not come earlier than 2025. In the meantime, the big question is whether the already strained national budget can afford subsidies to milk manufacturers.

Adding yeast to poultry feed could reduce Salmonella

An active live yeast called Saccharomyces cerevisiae boulardii could improve food safety, reduce Salmonella colonization and boost intestinal health and maturity when added to poultry diets.

“I’ve been taking this kind of live active yeast and looking at the past, taking it all the way to the current and some recent new data on how this active yeast could potentially be a great tool for some forms of production,” Bill Potter, Ph.D., food safety technical advisor, Elanco, explained at the 2023 Poultry Tech Summit conference.

Saccharomyces cerevisiae boulardii was originally discovered in the quest to improve wine processing. In 1920, Henry Boulard traveled to IndoChina to search for new strains of yeast that can be used during the fermenting process. Unfortunately, this visit occurred at the same time as a cholera outbreak at the time. “He noticed that some of the natives in the area were going to certain plants, particularly the lychee fruit,” said Potter, noting that tea from this fruit provided relief from intestinal tract problems caused by the cholera. “As they say, the rest is history,” he added.

The active live yeast has three modes of action; impact on microbiome balance, improvement in natural defenses and improvement in gut integrity. One of the most unique characteristics of Saccharomyces cerevisiae boulardii is that it can sequester oxygen. In other words, it takes away oxygen that can otherwise by used by Salmonella, E. coli and other pathogens in the poultry gut, improving food safety.

In commercial trials, broilers supplemented with Saccharomyces cerevisiae boulardii showed significant reductions in pathogen colonization. Similar decreases in E. coli were seen in a layer operation during another study. Saccharomyces cerevisiae boulardii isn’t a silver bullet, Potter cautioned, but when the yeast is fed in combination with other management strategies, food safety can be improved.

Effects of meat consumption on human health

Meat has been and continues to be an important food source, delivering a wide range of valuable nutrients our bodies can easily absorb.

Along with other animal-source foods like fish, eggs and milk, it also plays an important role in several European cultural traditions and recipes. People are biologically adapted to a diet that includes meat, which is important in a healthy and balanced diet. Some nutrients in meat and other animal-source foods are not always easily obtained or obtainable from plant-based foods.

Meat is an excellent source of vitamins, minerals, and essential micronutrients the body can absorb easily. A 100g portion of red meat, for example, will provide around 25% of the recommended daily allowance for riboflavin, niacin, vitamins B5 and B6, and two-thirds for vitamin B12. Diets poor in animal-source foods can lead to various nutritional deficiencies. Studies have shown that low-meat diets may risk brain and reproductive system development. Indeed, it is recognised that animal-source foods are essential in an infant’s first 1,000 days of life and for the skeleton and brain development of pre-adolescents.

There are several important bioactive compounds in meat and processed meat products, such as vitamin B1, iron, zinc, choline, L-carnitine, conjugated linoleic acid (CLA), glutathione, taurine and creatine, which have been studied for their physiological properties. Conjugated linoleic acid, for example, has drawn significant attention in the last two decades for its biologically beneficial effects. CLA modulates immune and inflammatory responses and improves bone mass, while carnosine possesses strong antioxidant and anti-genotoxic activities, including the anti-ageing of cells.

From an evolutionary perspective, we have developed as omnivores, and meat has been a central component of our diet for millions of years. Claims about the health dangers of meat are not only improbable in the light of our evolutionary history, but they are also far from being supported by robust scientific evidence. The majority of evidence linking red and processed meat consumption with colorectal cancer and pathologies is observational and based on intakes of red and processed meat that exceed most European countries’ average intakes.

Interestingly, a study in the UK found similar rates of bowel/colorectal cancer in vegetarians and meat-eaters, suggesting that meat consumption in general isn’t a major cause of this disease. The correlation between food, meats and cancer is very difficult to study because there are many elements, real or perceived, that may favour the onset and the development of cancer. National authorities have based recommendations on the studies developed by the International Agency for Research Studies on Cancer (IARC) that highlight and classify the considered agents that are certainly or presumably responsible for cancer onset.

“Carcinogenic” is the term given to something that can cause cancer. The problem, in terms of communication to the public, is in the verb “to cause”. It is not possible to give a determined cause-effect interpretation in this instance. In other words, it is not possible to say, “If you eat processed meat, then you will surely get colorectal cancer”. In the same way, it is not possible to say that if someone is exposed to a carcinogenic agent, they will certainly get cancer. Scientists hold to the premise that “carcinogenic” is something that, taken in certain doses and for a certain period, can increase the risk of developing a certain type of cancer throughout life. However, when such information is shared with the general public, the interpretation is often that if a substance or a food is carcinogenic, it most certainly causes cancer.

A consequence of this miscommunication is that some people will believe that if we do not eat a specific food or something with a carcinogenic substance, then surely we are safe from cancer. Unfortunately, this is not true. We may get, and statistically it happens, lung cancer even if we do not smoke and colon cancer even if we are strictly vegan. No one can say with certainty whether, even eating processed meat every single day, we will get colorectal cancer or not. But this does not mean that eating a certain food or not eating it would expose someone to the same risk.

Going back to the IARC monography, the various agents are not classified based on how carcinogenic they are, nor does the report deal with estimating the risk, individual or collective, of an exposure to a given agent once established to be carcinogenic. This means it is incorrect to treat all carcinogenic agents in the same way. Stating that “processed meat is like smoking or asbestos” is deeply wrong, and certainly, it pays no service to public opinion or knowledge. Carcinogenic agents are different, but it is not the IARC’s task to classify this aspect. There is also an interesting point regarding the consumption amounts investigated by the IARC, which are 50 grammes of processed meat or 100 red meat per day. This level of consumption is much higher than that of European consumers and, in general, of the rest of the world. For all these reasons, meat and processed meat products can be safely consumed as a part of healthy and balanced diets, but the most important thing for authorities to keep in mind is to communicate these concepts clearly and properly.

WOAH warns global pig industry of sub-standard ASF vaccines

The World Organisation for Animal Health (WOAH) is warning veterinary authorities and the global pig industry against the use of non-compliant and poor-quality vaccines for African swine fever (ASF). In a statement issued October 18, WOAH stressed the importance of the use of only high-quality ASF vaccines with proven efficacy and safety, and which have been subject to regulatory evaluation and approval in accordance with WOAH international standards.

“The research community has been working to develop an effective vaccine and recent announcements of modified live vaccines being approved or tested in some countries have raised hopes for the availability of new effective tools to contain the ASF epidemic,” WOAH said. The use of non-compliant and poor-quality vaccines may not confer any protection against ASF and risks spreading vaccine viruses that could result in acute or chronic disease, WOAH said. Additionally, these vaccine viruses could also recombine with field strains to generate novel strains. The world’s first ASF vaccines were authorized by Vietnam in July, when two vaccines were cleared for domestic use in pigs in the country.

Approval came after widespread testing in the country’s swine herds. The government reported the vaccines to be 95% effective. The vaccines – NAVET-ASFVAC (from Navetco National Veterinary Joint Stock Co.), and the AVAC ASF LIVE vaccine (from AVAC) — were jointly developed by U.S. scientists with two different commercial partners in Vietnam. In some other Asian countries, registration of the AVAC vaccine is underway. A third vaccine, DACOVAC-ASF2 vaccine from the Dabaco Group, is reportedly under evaluation in Vietnam. In the Philippines, applications are under consideration for the importation of four ASF vaccines. A Phase 1 trial was completed in May, and three farms in different provinces have been selected as the locations of Phase 2 field trials, the source reports. Authorities are awaiting complete documentation from a second vaccine company. In order to bring to an end the country’s four-year battle to eliminate ASF, the government has allocated PHP1.5 billion ($26.4 million) for the vaccination of the nation’s hogs.

Iran to produce feedstuff from lignocellulosic waste

A group of Iranian scientists have developed a method for processing lignocellulosic waste into nitrogen-rich animal feed. They claimed that this is the first-of-its-kind technology in the global feed industry. Around 21.5 million tons of lignocellulosic residues from straw are produced per year in Iran, Dr Kian Mehr, one of the chief researchers, said. These are inexpensive and abundant sources of fibre, though their use in the feed industry traditionally has been limited by low digestibility. Solving this issue has tremendous practical importance for Iran, which currently heavily depends on the import of feedstuff.

The scientists said they used nitrogen enrichment and oxidation to improve the digestibility of lignocellulosic biomass, though no additional details have been provided. A series of preliminary trials have shown that the biomass processed using the developed technology, when added to the cattle feed, also lowers methane emissions by a solid 67%. The processing takes little time, requires ambient temperature and pressure, and can be used on a wide range of biomass in a solid state without a need to recover chemicals in advance, Dr Mehr stated, speaking about the upsides of the developed method. In addition, it is almost waste-free and is not associated with the generation of any toxic by-products. The lignocellulosic waste is also good for the production of feed pellets, thanks to the high content of lignin, which is used as a natural binder. In theory, the scientists, said using lignocellulosic waste as a feed component feed manufacturers could save money on energy costs, and require less binders. On the other hand, it looks like the technology is relatively far from commercialisation. So far, the lignocellulosic waste processing has taken place only in laboratory conditions. The researchers believe they still have to shape up their method before it could be offered for mass production.