Last month, Campbell Soup struck a $2.7 billion deal for Rao’s sauce maker Sovos Brands (all figures US$). Unilever bought premium frozen yogurt brand Yasso in North America, while Snickers maker Mars acquired healthy foods maker Kevin’s Natural Foods.

“There’s been a nice uptick in M+A (mergers and acquisitions) in the food industry in the first half of the year…,” said Michael Milani, executive managing director and principal at advisory firm Baker Tilly.

“It has been a big theme, and we expect that to continue in the back half of 2023 and into early 2024.”

This is despite higher borrowing costs straining companies looking for acquisitions.

The value of deals in the U.S. food and beverage industry slipped nearly three per cent to about $10.39 billion this year, according to LSEG data. But their volumes climbed 17.5 per cent to 248 as of Sept. 1, making the industry a bright spot in dealmaking.

The total number of deals across all industry sectors slid four per cent in the same period, data showed.

“Large food companies need to add more new concepts, new flavour profiles and new food items because their old brands — though still growing — are not growing at a meaningful rate,” Milani said.

The rise in deals comes as volume of sales at companies such as Kraft Heinz and Campbell fell for at least the past six quarters due to weak demand, while benefits from price hikes also fade.

“I would expect there to be a continued drumbeat of M+A,” said Sarah Henry, managing director and portfolio manager at Logan Capital Management, which holds shares in PepsiCo and Mondelez International.

Packaged food companies “are now faced with some difficult comparisons on organic (sales) and are seeking some strategic, category-specific M+A targets that will propel them through the next few years,” Henry said.

Cheerios cereal maker General Mills has pinned M+A as a key goal in the coming years, with executives saying it is a “good environment for M+A right now.”

For Mondelez, bolt-on acquisitions are the way to go, the Oreo maker’s finance chief Luca Zaramella had recently said at a Barclays conference.

Last month, Reuters reported that Twinkies snack cakes maker Hostess Brands was exploring a sale and that Mondelez and Hershey could be in the race to buy it.

J.P. Morgan analysts said they could be eyeing Hostess to expand outside of North America.

“Most of the large cap packaged food companies have … diligently reduced their debt and improved their balance sheet (through the pandemic)…so they have the risk capacity and risk appetite to pursue large-scale acquisitions,” CFRA Research analyst Arun Sundaram said.

“These packaged food companies need to continue finding ways to stay relevant … And so one of the easiest ways to do that is through M+A.”

— Reporting for Reuters by Deborah Sophia in Bangalore.

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Bird flu chiefly spreads among wild birds such as ducks and gulls and can also infect farmed birds and domestic poultry such as chickens, turkeys and quails.

Although the viruses largely affect birds, they can spill into bird predators, and in rare cases, humans typically in close contact with infected birds.

A team of scientists from the MRC-University of Glasgow Centre for Virus Research studied hundreds of genes normally expressed by human cells, comparing the genes’ behaviour during infection with either human seasonal viruses or avian flu viruses.

They zeroed in on a gene called BTN3A3, expressed both in the upper and the lower human respiratory tract. Nicknamed B-force by the researchers, the gene was found to block the replication of most strains of bird flu in human cells.

However, the gene’s antiviral activity failed to protect against seasonal human flu viruses.

This gene is part of a broader defensive apparatus in the human immune arsenal against bird viruses.

All the human influenza pandemics, including the 1918-19 global flu pandemic, were caused by influenza viruses that were resistant to BTN3A3, and therefore the gene appears to be a key factor in whether any bird flu strain has human pandemic potential, the researchers said.

To be sure, viruses mutate all the time, and this does not mean that bird flu viruses could not evolve to escape the activity of BTN3A3.

Earlier this year, a new H5N1 strain of bird flu that transmits easily among wild birds explosively spread into new corners of the globe, infecting and killing a variety of mammal species and raising fears of a human pandemic. So far, only a handful of human cases have been reported to the World Health Organization (WHO).

About 50 per cent of H5N1 strains circulating globally so far in 2023 are resistant to BTN3A3, said professor Massimo Palmarini, the corresponding author of the study published in the science journal Nature.

“This is the sort of thing which we should be paying particular attention to as an elevated level of risk,” added Sam Wilson, a co-senior author of the study.

— Natalie Grover is a Reuters health and pharma correspondent in London, England.

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He said Brazil and the U.S., where JBS has meat facilities, are well positioned to meet China’s growing demand for beef as the major food importer reopens after COVID-19 restrictions.

“It is structural the growth in demand for beef in Asia as a whole, especially in China,” the CEO said.

He added that China is competitive in chicken and pork production, since these have shorter cycles, while for beef there is a need for more land and the production cycle is longer.

“Urbanization, rising income, these increase consumption,” Tomazoni told reporters. “Changes in habits after the pandemic (also) leads to an increase in beef consumption.”

On Tuesday, the CEO of poultry and pork processor BRF, Miguel Gularte, said he was optimistic about China’s meat demand returning to normalcy after the Chinese New Year celebrations.

Tomazoni cited forecasts that by 2050 the world will have to produce 50 per cent more food to meet global demand, also pointing to population growth as a factor driving consumption.

— Reporting for Reuters by Roberto Samora; writing by Ana Mano.

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Before the coronavirus crisis, 135 million suffered from acute hunger worldwide, Corinne Fleischer, the WFP’s regional director, told Reuters. The numbers have climbed since and are expected to soar further because of climate change and conflict.

The impact of environmental challenges is another destabilizing factor that can drive food scarcity and lead to conflict and mass migration happening.

“The world just can’t afford this,” Fleischer said. “We see now 10 times more displacement worldwide because of climate change and conflict and of course they are inter-linked. So we are really worried about the compounding effect of COVID, climate change and the war in Ukraine,” she said.

In the Middle East and North Africa, the impact of the Ukraine crisis has had massive repercussions, she said, underlining both the import dependency of the region and its proximity to the Black Sea.

“Yemen imports 90 per cent of its food needs. And they took about 30 per cent from the Black Sea,” she said.

The WFP supports 13 million of the 16 million people who are in need of food assistance, but its assistance only covers half a person’s daily needs because of a lack of funds.

Costs had gone up 45 per cent on average since COVID and Western donors have faced massive economic challenges with the war in Ukraine.

For oil-exporting countries such as Iraq, which benefited from the surge in oil prices following the outbreak of the war in Ukraine, food security is at risk.

Iraq needs about 5.2 million tons of wheat but only produced 2.3 million tons of wheat, Fleischer said. The rest had to be imported, which cost more.

Despite state support, severe drought and recurring water crises are endangering the livelihood of smallholders all over Iraq, she said.

— Reporting for Reuters by Amina Ismail and Charlotte Bruneau.

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O’Connor said he wasn’t sure what to expect after momentum building during the show’s first five years was quashed when the COVID-19 pandemic response quashed in-person events.

However, combined attendance for the first two days of the 2022 event topped 22,000 — a figure on track for matching or exceeding previous years.

“It’s rejuvenating, actually, to be able to come back to an in-person event, having these big crowds and all of our staff together, all of the exhibitors and farmers that come to the show. Having everybody back, it feels really good after a two-year hiatus,” he said in an interview.

Ag in Motion, billed as Western Canada’s largest outdoor farm show, is an annual event mounted every summer at a permanent site near Langham, Sask., about 40 km northwest of Saskatoon. The event is owned and operated by Glacier FarmMedia, owner of this website.

This year’s three-day AiM show wraps up Thursday night.

O’Connor said the decision to go live again was complicated during the winter months as new waves of the COVID-19 virus emerged.

“There was a lot of hesitation at the time of planning that with the show be smaller. We didn’t know the effects of the pandemic,” he said. “But the team buckled down. We worked with our exhibiting companies and sponsors and we got it back to where it was.”

This year’s show featured a revamped and expanded livestock section which appears to have been well received, he added.

In addition to 543 exhibitors and thousands of farmers, AiM this year played host to the federal, provincial and territorial agriculture ministers, who took a break from their annual meeting in Saskatoon this week to spend half a day meeting with exhibitors as they toured the show site.

On the subject of ministerial talks toward a new agricultural policy funding framework, “we have seen a lot of progress, and I’m hopeful that we will be able to reach an agreement this week,” federal Agriculture Minister Marie-Claude Bibeau told reporters Tuesday before heading to Saskatoon.

Sustainable agriculture, she said, needs to be “in the heart of our discussion and in the heart of the next agreement” — and ministers will discuss how to improve ag sustainability at the farm level while also ensuring agrifood businesses and farmers are “competitive in the world market.”

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The requirements were first adopted in November as part of reopening the United States to land crossings by foreign tourists after the borders had been closed to most visitors since March 2020. The vaccination requirements had been set to expire on Thursday unless they were extended.

International air travelers over the age of two, regardless of citizenship, must provide a negative test for the virus before arriving and non-U.S. citizens must also show proof of vaccination. People traveling at land or ferry crossings do not need to provide a negative test.

There are some limited exceptions to the rules, including for those who have recently recovered from COVID-19.

The Homeland Security Department (DHS) said the decision was made after consultation with the Centers for Disease Control and Prevention (CDC). The CDC says vaccines are the most effective public health measure to protect people from severe COVID-19 related illness or death.

In January, DHS extended vaccination requirements to include previously exempt foreign essential workers such as truck drivers and nurses crossing U.S. land borders.

Michigan Agri-Business Association president Chuck Lippstreu criticized the DHS for “failure to provide common-sense exemptions to this policy for agricultural truck drivers,” and said it “flies in the face of reality on the ground here in Michigan, where our agriculture sector continues facing supply disruptions, increases in cross-border trucking costs and an ongoing driver shortage.”

Major airlines want the government to end COVID-19 pre-departure testing requirements for vaccinated international passengers traveling to the U.S.

They argue testing requirements are unnecessary and deter Americans from traveling abroad because of testing costs and risks they could be stranded abroad if they test positive.

Britain, France, Canada, Italy and many other countries have dropped pre-departure testing requirements for fully vaccinated visitors.

— David Shepardson reports on the U.S. transportation and aviation sectors for Reuters from Washington, D.C.

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The announcement of delay also comes a month after CF said it is increasing fertilizer shipments to both U.S. coasts from the world’s largest nitrogen complex in Louisiana to help offset a decline in exports from Russia, a major exporter of potash, after it invaded Ukraine.

CF Industries ships to customers through Union Pacific rail lines primarily from its Donaldsonville complex in Louisiana and its Port Neal complex in Iowa. The company was asked by the railroad operator to reduce its shipments by nearly 20 per cent.

The fertilizer producer said it may not have available shipping capacity to take new rail orders involving Union Pacific rail lines to meet late season demand for fertilizer.

In January, Union Pacific warned COVID-19 cases among its staff and paid time off for people getting inoculated would hurt its ability to move freight in the current quarter.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” CF CEO Tony Will said Thursday.

“Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all,” he added.

CF has five U.S. nitrogen manufacturing complexes in all, along with two plants in the United Kingdom and two in Canada, at Medicine Hat, Alta. and Courtright, Ont.

— Reporting for Reuters by Rithika Krishna in Bangalore.

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Employment and Workforce Development Minister Carla Qualtrough announced what’s called the Temporary Foreign Worker (TFW) Program Workforce Solutions Road Map, which the government said “marks the next step in an ongoing effort to adjust and improve the TFW Program to ensure it continues to meet the labour market needs of today.”

Starting “immediately,” the government said Monday, the length of a labour market impact assessment (LMIA) — the document an eligible employer has to obtain, to show that the use of TFWs in a given workplace won’t affect the Canadian job market, and that both the employer and the specified job are legitimate — will be doubled.

Where before the COVID-19 pandemic, LMIAs were valid for six months, and were later extended to nine months, they will from now on be valid for 18 months, the government said.

Also effective immediately, the maximum term of employment for workers in the “high-wage” and “global talent” streams will be extended to three years, up from two.

“This extension will help workers access pathways to qualify for permanent residency, enabling them to contribute to our workforce for the long-term,” the government said.

Also, to better handle seasonal peaks, the number of low-wage positions that employers in seasonal industries — that is, sectors such as fish and seafood processing — can fill with TFWs will no longer be limited, making permanent the seasonal cap exemption that’s already been in place since 2015. The maximum term for those positions will also be increased to 270 days a year, up from 180.

Later, starting April 30, eligible low-wage employers will be able to hire a maximum of 20 per cent of their full-time equivalent workers at a given worksite, up from the current 10 per cent, until further notice.

Also starting April 30, in seven sectors with “demonstrated labour shortages” — including food manufacturing, accommodation and food services, wood product manufacturing, furniture manufacturing, construction, hospitals, and nursing /residential care — the cap will be raised to 30 per cent, for one year.

Also, in regions with an unemployment rate of six per cent or higher, where the TFW program now won’t process applications in the accommodation/food services and retail trade sectors, that “refusal to process” policy will be eliminated starting April 30.

LMIAs in such regions “must still demonstrate the clear need for foreign workers,” the government said, but the policy change is expected to help employers in areas where “severe labour shortages have persisted” despite higher unemployment.

Overall, the government said Monday, the Canadian labour market is tighter than before the pandemic and the job vacancy rate reached an “historic peak” in the third quarter of 2021, with much of the unmet demand is in low-wage occupations.

Out of all foreign workers coming to Canada as TFWs, over 60 per cent — about 50,000 to 60,000 per year — are agricultural workers, the government said.

“Currently, thousands of jobs are vacant in food processing plants,” Agriculture Minister Marie-Claude Bibeau said in Monday’s release. “By facilitating the entry of foreign workers and extending their stay, our government aims to enable businesses to operate at full capacity and access new markets, increasing demand for our agricultural producers.”

The Canadian Meat Council, for one, hailed Monday’s announcement. “Our sector went from 1,700 to 10,000 empty butcher stations in the past few years,” the council’s senior vice-president for public affairs, Marie-France MacKinnon, said in a separate release Monday.

“The temporary foreign worker cap was a cap on our processing capacity and our sector’s growth potential. Today’s announcement allows our meat processors to hire temporary foreign workers, but there’s nothing temporary about our jobs; they are full-time and permanent.”

Canadian food and beverage manufacturing generally is facing an “escalating labour crisis,” the council said, with some companies reporting vacancy rates of 20 per cent or more, and some “forced to limit production and/or stop producing some products altogether.”

However, the Toronto-based Migrant Workers Alliance for Change on Monday panned the government’s planned changes. Alliance executive director Syed Hussan said the government “keeps making it easier for employers to hire migrant workers without ensuring migrants have basic rights and protections that can only be accessed by those with permanent resident status.”

Canada does not have a “crisis” of labour shortage, Hussan said Monday in a release, but rather a “wages and work conditions crisis” to be solved by “decent work and full immigration status for all.”

Low-waged essential workers, Hussan said, “should be able to come to Canada with permanent resident status instead of on employer-controlled permits with few rights.”

The government said Monday that its ministerial roundtable on TFWs, a consultative forum announced in December last year, will hold its first meeting this June, focusing on housing standards for TFWs.

Meetings of the roundtable, which will have up to 25 members and will be chaired by Qualtrough, are to be held twice each year for the next three years, each focusing on a different topic. Members are to include representatives from “stakeholders, employers, labour organizations and migrant support worker organizations.” — Glacier FarmMedia Network

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On March 15, the average price of regular gasoline in Canada reached a multi-year peak of 183.4 cents per litre before easing off at 174.1 cents one week later, according to Natural Resources Canada. Also on March 15, the average price of diesel reached 200.6 cents before declining to 188.4.

The nearby West Texas Intermediate (WTI) crude oil contract touched US$126.52 per barrel on March 7. However, COVID-19 lockdowns in China and an increase in U.S. inventories brought the price down to as low as US$92.20/barrel on March 15. Since then, it has risen to around US$110.

Shon Hiatt, associate professor of management and organization at the Marshall Business School of the University of Southern California, believes that as soon as the war ends, fuel prices may return to some sense of normalcy.

“China is going to get out of this COVID lockdown. This is just a temporary aspect and then they are going to ramp back up because there is just huge demand for products and goods,” Hiatt said.

“I think eventually this war will be over as soon as Russia takes over Ukraine, which is likely to happen. I don’t think (Russia) will stop until it’s done. When that happens, we will return to the markets we had before.

“The question is: will prices return to what they were in 2019 or even last year? They will not.”

For one reason, he said, Saudi Arabia needs oil to be priced at least US$85/barrel to fully fund government spending and the country’s outsized influence in OPEC+ would make sure the price stays high through supply controls.

The second reason is climate change policies, implemented by U.S. President Joe Biden, limiting growth in the country’s fossil fuel sector.

Hiatt also suggested Canada will be a factor.

“Canada has the potential to produce more oil. The problem is they are constrained on exports,” he explained, citing the failed Keystone XL pipeline which would have been in operation this June.

“(It) would have allowed another 800,000 barrels of oil to go on the global marketplace. Unfortunately, that’s not going to happen. Canada’s maxed out at 4.6 million barrels and it’s really infrastructure that preventing them from getting any more oil out of the ground.”

Hiatt expects gasoline prices to come down, but while he believes high commodity prices can help offset fuel costs for farmers, Hiatt maintains that diesel fuel will be priced highly throughout 2022.

“We’re not going to see prices like they were before. This entire year is going to be a high-priced fuel year,” he said, adding that fertilizer prices will also be high due to sanctions against producers in Russia and neighbouring Belarus.

Even without Russia’s invasion of Ukraine, however, Hiatt already expected WTI crude oil to exceed US$100/barrel this year.

“I still think that’s a possibility as the economy continues to expand and place constraints on (oil) supply on the market. (Prices will be) no less than the February prices prior to the invasion for this year,” he said.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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While the March report only saw minor revisions, the government agency cautioned that “the economic outlook, for the world and Canadian grain markets, is particularly uncertain due to the Russian invasion of Ukraine and to lesser extent the continued domestic and international uncertainty caused by COVID-19.”

Projected canola ending stocks for both the current marketing year and 2022-23 were lowered by 50,000 tonnes, to 400,000 and 600,000 tonnes respectively. Wheat ending stocks for both crop years were also lowered, to an estimated 3.8 million for 2021-22 and 4.7 million for the new crop year.

Wheat exports for 2021-22 were up by 200,000 from the February forecast, at 15.55 million tonnes. For 2022-23, wheat exports were revised higher by 250,000 tonnes, at 21.55 million tonnes.

Statistics Canada releases its first acreage estimates of the year at the end of April, with the latest stocks data out in early May.

Tables: March estimates for Canadian major crops’ supply and demand, in millions of metric tonnes. Source: Agriculture and Agri-Food Canada.

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