JBS Parent Company Pleads Guilty to U.S. FCPA Violations, to Pay $256 Million Fine

Brazil's J&F Investimentos, parent company of the world's largest meatpacker JBS pleaded guilty to violations of the U.S. Foreign Corruption Practices Act (FCPA) and agreed to pay $256 million in criminal fines, prosecutors said on Monday. The amount of the bribes paid by J&F officials to high-level government officials exceeded $150 million and the company made $178 million in profit, U.S. prosecutors said in open court. Lucio Martins, J&F’s director of compliance, pleaded guilty on behalf of the company in a video conference proceeding before U.S. District Judge Margo Brodie in Brooklyn. Between 2005 and 2017, the company conspired to bribe officials to get the Brazilian government and other entities to arrange financing and equity transactions benefiting J&F, according to a U.S. charging document.

U.S. Indicts Six More Chicken Executives Over Alleged Price Fixing

The U.S. government has indicted six more chicken-industry executives over alleged price-fixing, expanding antitrust prosecutions in its probe of the $65 billion poultry sector, according to court documents. In June, the Justice Department indicted Pilgrim's Pride Chief Executive Jayson Penn and three others in its first charges in the criminal probe involving broiler birds, which account for most U.S. chicken meat. Court documents filed on Tuesday show that former Pilgrim's Pride CEO William Lovette has also been indicted. Lovette could not immediately be reached for comment on Wednesday, and a company spokesman did not immediately respond to a request for comment.   Pilgrim's Pride, mostly owned by Brazil-based meatpacker JBS SA, last month said Penn was exiting the company and would be replaced by Chief Financial Officer Fabio Sandri. Penn succeeded Lovette as CEO in 2019. The documents allege that industry executives conspired to fix prices from 2012 through 2019. Also indicted was a sales executive named Timothy Mulrenin, court documents show. Mulrenin's LinkedIn page says he is Perdue Farms' director of national account sales and was formerly Tyson Foods' director of sales. He did not immediately respond to a message sent through LinkedIn. A Perdue spokeswoman had no immediate comment. A Tyson spokesman did not immediately respond to a request for comment. Tyson in June said it was cooperating with the Justice Department's investigation under a program that could protect the company from criminal prosecution. The indictments come after grocers, retailers and consumers filed a lawsuit accusing Pilgrim's Pride, Tyson and other poultry processors of conspiring to inflate prices for broiler chickens. The companies have denied the allegations.

Big Supplies Lower Prices

By mid-September, steady improvement in cattle harvest levels over the summer had nearly erased the backlog of cattle created at the onset of the COVID-19 pandemic. With beef packers finding steady profit margins north of $300 per head, cattle prices rallied for seven weeks in July and August. Increasing production, however, brought the eventual pressure on prices. In September, USDA revised its projections for beef production up 23 million pounds compared with August. That would leave total 2020 beef production at just 0.4% lower than 2019 — despite the disruption. Smaller 2020 slaughter numbers have been offset by heavier carcass weights, a lingering effect of the cattle stranded in feed yards. The final week of August saw steer carcass weights average 916 lb., up 32 lb. from the same week in 2019. USDA projects per-capita beef consumption to be 58.2 lb. in 2020, up slightly. But the supply pressure will tend to subside throughout the fall. Seasonally, beef demand improves approaching the holidays, which will support prices in the $110 to $117 per cwt range.

ASF Numbers in Germany Grow; U.S. Hog Futures Rise

U.S. hog futures rose on Tuesday after more cases of African swine fever (ASF) were discovered in wild boars in Germany. Government officials in Germany warn more cases of ASF in wild boars are to be expected because they move in groups and the virus is easily transmitted. Europe’s largest pork producer reported its first outbreak of ASF in a wild boar on Sept. 9. The total is up to 32 since the first case was discovered. To date, the cases have been located close to the first one in the east German state of Brandenburg. Nine cases were confirmed in Brandenburg on Sept. 23 and three more cases on Sept. 24, Reuters reports. “Prices for weaner piglets in Germany have fallen sharply in past weeks following the discovery of ASF in the country,” AgDay’s Clinton Griffiths reports. Christine McCracken, executive director – animal protein for Rabobank, said in the short run, the announcement gave a little life to the market. “For the U.S., for example, we might pick up some of that,” McCracken said on AgDay TV. “The challenge though, is that there are lot of other European countries, Denmark or Spain, that process a lot of the same product that Germany does.” Other European countries may be a better fit than imports from the Americas. “It doesn't mean we can't see a benefit. It’s still a global meat block. You have to think about when somebody loses, somebody else gains. But it's probably not the huge opportunity that the market initially thought," McCracken explains.

Despite Drought, Cow Slaughter Trends Lower

Despite an expanding drought, U.S. cow slaughter is down 0.5% from last year and draws attention to how cull cows impact America’s beef consumption. For the week ending July 20, USDA reports total beef and dairy cow slaughter at 114,500 head, down 3.4% from the same week a year ago. Over the past four weeks – including the holiday-shortened week – total slaughter was 455,700 head, down 0.5%. “The decline in cow slaughter may come as a surprise to those looking at some of the dry conditions that have developed in the Texas Panhandle and Western Kansas,” writes Len Steiner in the Daily Livestock Report. “But even as this region accounts for a large share of the US beef cow herd, and thus slaughter, it is important to remember that cows are widely distributed around the country.” USDA reported U.S. beef cow slaughter for the last four weeks increased by 20,300 head, or 9% compared to the same period last year. During the same four weeks, however, dairy cow slaughter was down 22,400 head or 10% from a year ago. California’s beef cow inventory was 665,000 head on January 1, but the number of dairy cows in the state is much larger at 1.725 million head. Dairy cow slaughter in region 9 is down 11% during the last four weeks compared to last year.

Tyson Fire, Pandemic Market Report Released By USDA

USDA released Wednesday the long-awaited report on its investigation into cattle market disruptions  following last year’s Tyson Foods packing plant fire and this spring’s impact from the coronavirus pandemic. The 20-page report confirmed massive volatility to both the cash and futures markets yet found no wrong-doing on the part of any industry participants. Prepared by USDA’s Agricultural Marketing Service in coordination with the Office of the Chief Economist, summarizes market conditions, fed cattle prices, boxed beef values and the spread before and after the two market-disrupting events. Appearing on Wednesday’s AgriTalk PM shortly after the report’s release, National Cattlemen’s Beef Association CEO Colin Woodall said the industry is glad to have the report in hand, though acknowledged it will not satisfy everyone. The report “very readily acknowledges that there are a lot of issues that we need to address – packing capacity, for example, further transparency.” While AMS did not cite any wrong-doing, the investigations are not over, and Agriculture Secretary Sonny Perdue indicated as much in a statement. “While we’re pleased to provide this update, we assure producers that our work continues in order to determine if there are any violations of the Packers and Stockyards Act,” Perdue said. “If any unfair practices are detected, we will take quick enforcement action.” Issuing his own statement after the report, Iowa Senator Chuck Grassley, who has called on the Justice Department to open an investigation into the cattle markets, said, “As USDA continues to investigate market manipulation and unfair practices, today’s report lays out steps we can take to fix this marketplace. Congress has a responsibility to heed the advice of this report and take action to restore cattle price transparency when we reauthorize Livestock Mandatory Price Reporting requirements.” Woodall said NCBA has focused on “having some minimum cash trade levels in order to have price discovery and some sort of trigger mechanism that could go along with that. I do believe that is going to be a big topic during our summer business meeting next week here in Denver.” The Justice Department’s investigation is ongoing and Woodall said DOJ employees have been in the country “interviewing people throughout the entire beef supply chain. There’s more to come on this in terms of whether or not there’s any sort of criminal action that may have taken place.” But the AMS report also supports the argument that while the two black swan events caused disruption and economic harm to producers, the markets reacted to those events and not to some outside intervention. “There was nothing (in the report) to indicate any sort of market manipulation,” Woodall said. “Once we look back at this, we understand that it has had a significant impact on our industry and a significant impact on prices and is still having an impact.” To producers who may be unhappy with the findings of AMS’ report, Woodall’s message to them is, “It’s not over. This is just one part of it. I think this is an important piece of the overall puzzle and we needed to see what USDA would find. There are a lot of individuals who believe that anything short of Packers going to jail is not going to be acceptable. But I hope that they will take the time to read what is here and understand that USDA spent a lot of time and effort to try to make sure that they get they get as much information that they can analyze, look at it from a true third party viewpoint, in order to provide  the industry some of the best information we could get.” The North American Meat Institute also released a statement about the USDA investigation into beef price margins. “In its analysis of the effects of the fire and the pandemic, USDA found no wrong-doing and confirms the disruption in the beef markets was due to devastating and unprecedented events,” said Meat Institute President and CEO, Julie Anna Potts. “It is difficult to see how the USDA’s recommended legislative proposals would have changed the outcome of the fire or the pandemic.” Related stories:

Production Disruptions Slow May Exports of Beef, Pork

Production slowdowns at American meatpacking facilities caused by the coronavirus pandemic this spring produced declines in exports for both beef and pork during May. Beef exports fell 33% during May compared to 2019, recording the lowest monthly volume in 10 years, according to data released by USDA and compiled by the U.S. Meat Export Federation. The value of beef exports fell 34% to $480.1 million as shipments were higher than a year ago to Hong Kong and China but lower to most other markets. For January through May, beef exports fell 3% below last year's pace in volume (512,596 mt) and 5% lower in value ($3.14 billion). May Pork exports remained higher than a year ago but were the lowest since October 2019. Pork exports in May were 12% above a year ago, but down 13% compared to the monthly average for the first quarter of 2020. May pork exports increased year-over-year to China/Hong Kong, Taiwan and Vietnam, but trended lower to Mexico, Japan, Canada and South Korea. For January through May, pork exports were 30% ahead of last year's pace in volume (1.35 million mt) and 37% higher in value ($3.53 billion). "As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports," said USMEF President and CEO Dan Halstrom. "Unfortunately the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies." Halstrom noted that the recent rebound in beef and pork production will help exports regain momentum in the second half of 2020. The global economic outlook is challenging, but he looks for export volumes to recover quickly in most markets as U.S. red meat remains an important staple, not only in the United States but for many international consumers as well. "In what has been a remarkably turbulent year, consumer demand for U.S. red meat has proven very resilient," he said. "Now that production has substantially recovered, the U.S. industry is better able to meet the needs of both domestic and international customers. While the foodservice and hospitality sectors face enormous challenges, they are on the path to recovery in some markets while retail demand remains strong. Retail sales have also been bolstered by a surge in e-commerce and innovations in home meal replacement, as convenience remains paramount."

USDA offers web seminar on proposed rule on organic enforcement

A U.S. Department of Agriculture web seminar will provide an overview of proposed changes to enforcement regulations of organic agriculture. The web seminar is set for 1 p.m. Eastern on July 8 and will review the USDA’s National Organic Program’s Strengthening Organic Enforcement proposed rule, according to a notice from the agency. The proposed rule will be published soon in the Federal Register, according to the agency. Registration is free for the web seminar. A 60-day comment period will begin when the proposed rule is published in the Federal Register, according to the USDA.

USDA adds online portal to apply for coronavirus funds

The U.S. Department of Agriculture had added an online portal for growers submitting applications for the Coronavirus Food Assistance Program. Currently, the digital application is available only to sole proprietors or single-member business entities. The USDA’s Farm Service Agency processes the documents for the program and the online portal will expand options for producers. The Farm Service Agency is “leveraging commercial document storage and e-signature solutions” through the process, according to a news release. “We are doing everything we can to serve our customers and make sure agricultural producers impacted by the pandemic can quickly and securely apply for this relief program,” FSA Administrator Richard Fordyce said in the release. “In addition to working with FSA staff through the phone, e-mail and scheduled in-person appointments, we can now also take applications through the portal, which saves producers and our staff time.” Growers who want to digitally sign applications should tell their local service centers when contacting them to sign up for the CFAP funds, which are direct payments to producers affected by the COVIID-19 pandemic. Other ways of to apply for CFAP are:
  • Downloading an application form from and submitting it a local USDA Service Center; and
  • Completing the application form using the CFAP Application Generator and Payment Calculator at, and submitting it to the local center.

Lighthizer: Trade Deal is Intact, Chinese Purchase Commitment to Stand

As large Chinese purchases of soybeans continue to roll in while rumors of a broken relationship abound, U.S. Trade Representative Robert Lighthizer assured farmers on Wednesday that the deal is still intact. Additionally, he told AgriTalk host Chip Flory that the Chinese would fulfill their Phase One purchase agreements in 2020. “I think Peter [Navarro] was misunderstood,” Lighthizer told Flory. “Trust me that the trade deal is on. It's the biggest trade deal anybody's ever done, and it is completely on.” Lighthizer says the Trump administration, including Agriculture Secretary Sonny Perdue, is working “full time” on the deal with the expectation that it will move forward “full speed ahead.” When asked about the possibility the U.S. could ever “decouple” from China when it comes to trade, Lighthizer said he wasn’t interested in speculating, but that China is a huge market for U.S. agriculture. “We have, through this agreement, for the first time ever opened up beef and poultry,” he said. “We are selling massive amounts of soybeans again. In the three or four months this has been intact, we have approved more than 2,000 new facilities to ship to China. We're up to 3,500 now, so I think it's going to be a massive impact on American farmers.”   A Tricky Relationship  The trading relationship the U.S. has with China is complicated, Lighthizer admitted, adding that President Trump is focused on getting the relationship right. “These are the two biggest countries, two biggest economies in the world, and we're really in many ways a bipolar world and that's the other polar,” he explained.
While a big portion of the deal is purchase agreements, the rest of it deals with structural changes that will allow the U.S. to sell more goods to China. “They took 57 commitments and they've already followed through on 50 of them, so it's a massive change. It's really, really going to have a positive effect for farmers and ranchers in this country, and we're excited about it,” he said. “But the relationship is still going to be complicated We have to get the balance right, and we have to make sure that the U.S. is safe and prosperous, and that our farmers are selling lots of products.” Keeping Their Commitment  Lighthizer is confident the Chinese will keep their purchase commitments as part of the Phase One Deal. “Picture it, we're negotiating through this thing where we negotiate into the new year. We finish on the 15th of January we sign it's got a 30 day entry into a fourth date so that means it's the 15th,” he says. “The question is, are the first-year commitments on a calendar year? The answer is they are on a calendar year and that puts an awful lot of pressure on the Chinese, particularly in the purchasing side to get that done in what is a relatively brief period of time. That was a specific point of negotiation. I think it's really important the president thought it was really important for our farmers and ranchers, that we get all that in during that calendar year so we expect them to do it.” Because soybeans are one of the biggest crops on the Chinese buying list, the seasons are playing into purchase timing, he says. “But we expect them to do it all during the course of this calendar year,” he added. Lighthizer would not provide any kind of timeline on Phase Two but said it will be dependent on the completion of Phase One.