Supply Lines: More automation in food

Driverless forklifts, robotic arms and mechanical jaws help squeeze as many as 1.6 million pounds of lemons a day at a factory north of Los

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Driverless forklifts, robotic arms and mechanical jaws help squeeze as many as 1.6 million pounds of lemons a day at a factory north of Los Angeles. The army of robots are now doing what was a tedious task for staff at fast-food chain Chick-fil-A. The plant — larger than the average Costco store — then ships bags of juice to Chick-fil-A locations, where workers add water and sugar to make the chain's trademark lemonade. As Bloomberg News' Daniela Sirtori reports this week, squeezing lemons added up to 10,000 hours of work a day across all locations and caused many injured fingers. The automated site frees up staff to serve customers faster. It's another example of automation in food, which is increasingly taking over in supply chains from the farm to diners to fill labor shortages and cut costs. And as incoming US President Donald Trump's anti-immigration policies threaten fewer workers on farms, the need for robots looks even more pressing. Researcher PitchBook expects Trump policies to drive significant investment in farm automation and productivity tools this year.  "Should a mass deportation of workers living in the US illegally occur under the new presidential administration in 2025, it will catalyze a seismic shift in US agriculture," PitchBook senior analyst Alex Frederick said in a report last month.  As farmers faced with a severe labor crunch clamber to maintain productivity and profitability, that may spell unprecedented demand for advanced farm automation. Such tech includes AI-driven robots, Internet of Things (IoT) sensors and satellite-based imagery analytics. Deere, which makes the iconic green and yellow tractors, may be one company well positioned for the transition. It has already introduced driverless plows to farm Midwest fields and now wants to bring autonomous machines to orchards, quarries and grassy lawns to help ease a tight labor market. The company aims to make crop farming totally autonomous by 2030. More Food for Thought The Israeli military's jamming of GPS signals has disrupted operations for the country's farmers, because many of them rely on precision-farming technologies that are GPS-dependent. Massachusetts startup Inari raised $144 million of new equity at a $2.17 billion valuation. The company uses technology to develop soybean, corn and wheat in a way that requires less water, land and fertilizer.  —Agnieszka de Sousa in London

Charted Territory

Chocolate scoop | Hershey is asking the US's top derivatives regulator for permission to buy a huge amount of cocoa through the New York exchange after global shortages sent prices to a record, according to people familiar with the matter. The chocolate maker wants to take a position that will allow it to purchase more than 90,000 tons of cocoa on ICE Futures US, said the people. The request to the Commodity Futures Trading Commission equates to about 5,000 20-foot containers and is more than nine times the amount the exchange currently allows. (Read the full story here.)

This Week's Must Reads

Bloomberg's Odd Lots newsletter looks at signs that bird flu is affecting egg prices, potentially threatening more food inflation. Alico, one of the biggest US orange growers and a supplier to Tropicana, will wind down its citrus division after disease and hurricanes have driven a decades-long decline in production. UK grocery price inflation rose in December as household spending over Christmas reached a record. British retailers Tesco and M&S were hit by a selloff in UK retailer stocks amid mounting concerns about the economy. India is considering revoking a three-year ban on futures trading in seven farm commodities, including wheat and unprocessed rice, after studies found the steps were counterproductive. Smithfield Foods, the world's largest pork producer, filed for its initial public offering in the US, joining a growing number of firms pursuing market debuts this year. When it comes to wine, climate change, the high cost of living, new drinking habits, health concerns and international politics will all affect what you drink in 2025.

On the Bloomberg Terminal

As food retailers battle weak demand, flat or falling volume appears unlikely to reverse this year to soak up large 2024 crops, unless consumer finances improve, according to Bloomberg Intelligence. The US Food and Drug Administration has failed to meet its mandated targets for domestic and foreign food safety inspections since fiscal 2018, the US Government Accountability Office said. Read the Bloomberg Law piece here.  Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers. Use the AHOY function to track global commodities trade flows. See DSET CHOKE for a dataset to monitor shipping chokepoints.  For freight dashboards, see BI RAIL, BI TRCK and BI SHIP and BI 3PLS Click HERE for automated stories about supply chains. On the Bloomberg Terminal, type NH FWV for FreightWaves content. See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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