Crypto News: Supply Lines: China's taste for meat

China's fast-growing appetite for beef, pork and chicken has been a bright spot for the meat industry for many years. Consumption in the world's top market has generally expanded faster than in most other regions as rising incomes fueled a taste for steaks or burgers.

That's in contrast with much of the developed world, where concerns about health, animal welfare and the planet — and recently rampant inflation — have proved a headache for cattle ranchers, hog farmers and meatpackers.

But now, China's slowing economy is denting its craving.

The reopening of the nation's economy after stringent Covid measures didn't quite deliver the celebratory feasting on pork — its favorite meat — that many had expected. Instead, households conserved cash as economic uncertainties mounted.

China's beef market has been weaker this year and prices are down, according to Rabobank. Plus, the country is sitting on a pile of uneaten beef after importing large amounts in anticipation of a recovery from the pandemic. That means imports are poised to drop in the second half of the year, analysts including Angus Gidley-Baird said in a report. Softer demand is making it harder to move volumes through the system.

The knock-on impact risks weaker sales for the world's meatpackers who in recent years relied on exports to Asia to cushion them from softer demand in their own markets.

Some are even curbing their Chinese operations as margins get squeezed. Cargill is selling its local poultry farming and processing business, while Tyson Foods is said to be exploring options including a potential sale of is business there.

More Food for Thought

In key meat news this week, Brazil's Minerva agreed to buy 16 plants in Brazil, Argentina, Uruguay and Chile from rival Marfrig for $1.5 billion — a deal set to create a South American beef giant. And US meat giant Tyson will centralize areas such as transportation and warehousing under a supply chain czar in the latest effort to restore profits.

—Agnieszka de Sousa in London

Corn crown | For more than half a century, US farmers dominated the international market for corn, shipping more of the critical crop than any other country to feed the world's livestock and manufacture its processed foods. But in the agricultural year ending Aug. 31, the US handed the corn-exporting crown to Brazil. And it might never get it back. In the 2023 harvest year, the US will account for about 23% of global corn exports, well below Brazil's nearly 32%, US Department of Agriculture data show. Brazil is seen holding onto its lead in the 2024 planting year that begins Sept. 1, too. Only once in data going back to the Kennedy administration did America drop out of first place before: for a single year in 2013 following a devastating drought. (Read full story here).

The cost to transport America's harvest from the Midwest to the rest of the world is soaring as shrinking water levels on the Mississippi River drive up barge freight rates.
An increasing share of low-income Americans are behind on rent and struggling to afford food, adding to signs of growing financial distress in the economy.
India has permitted some rice shipments to Mauritius, Bhutan and Singapore for food security purposes after the South Asian nation imposed sweeping export restrictions to control domestic prices.
Philippine President Ferdinand Marcos Jr. has imposed ceilings on rice prices across the country amid an "alarming" increase in retail costs of the staple grain and reports of hoarding by traders.
Pests and diseases are exacerbating crop shortages that have sent prices for goods like cocoa, olive oil and orange juice soaring. That's set to become even more prevalent as extreme weather events multiply.
The slowest increase in grocery bills in almost a year drove down inflation in British shops in August, relieving some of the pressure on the Bank of England to keep raising interest rates.
Avocados From Mexico is looking for new ways to bolster demand for the fruit even as exports boom.

Policymakers are anxiously eyeing the aging population of US farmers and part of the solution may be touting their potential role in fighting climate change, Bloomberg Government reports.
As consensus begins to level off on the rebuild of corn inventories, a Bloomberg Intelligence scenario is becoming relatively bullish for supply.
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