An Iowa grain company that does business in Minnesota has gone bankrupt and the Minnesota Department of Agriculture is advising farmers that they may need to file a claim against the company, AgWeek.com reported. Global Processing Inc. is based in Kanawha, Iowa, and operating in Hope, Minn. The company filed for chapter 11 bankruptcy on Oct. 24. Anyone who has not received payment for grain or who had grain stored with Global Processing Inc. is encouraged to submit a bond claim with the Minnesota Department of Agriculture. The Hope facility, in accordance with state law, held a $50,000 bond with the state. Farmers should submit a claim as soon as possible. The deadline for claims is April 24, 2023. The ag department will review all claims to determine which claims are valid. In the case of multiple valid claims, a pro-rated share will be calculated and dispersed.
The Justice Department is investigating how poultry companies pay their chicken farmers, the latest move by the government to clamp down on an industry payment system that has been criticized by some farmers, the Wall Street Journal reported. Pilgrim’s Pride Corp., the second-largest U.S. poultry processor by sales volume, said in a regulatory filing on yesterday that it learned earlier this month that the Justice Department had opened a civil probe into chicken-grower contracts and payment practices. The Colorado-based company said it would cooperate with the Justice Department. The Justice Department has similarly notified other poultry companies. Chicken farmers generally work under contracts in which poultry companies own the birds and feed, and instruct farmers how to grow the chicks. About two dozen farmers in a given region are typically compared against one another to determine their payment rates, using a sliding scale analyzing their chicken production, according to farmers and industry officials. It is an arrangement known in the industry as the tournament system. (Subscription required.)
Fishing regulators and the seafood industry are grappling with the possibility that some once-profitable species that have declined with climate change might not come back, the Associated Press reported. Several marketable species harvested by U.S. fishermen are the subject of quota cuts, seasonal closures and other restrictions as populations have fallen and waters have warmed. In some instances, such as the groundfishing industry for species like flounder in the Northeast, the changing environment has made it harder for fish to recover from years of overfishing that already taxed the population. Officials in Alaska have canceled the fall Bristol Bay red king crab harvest and winter snow crab harvest, dealing a blow to the Bering Sea crab industry that is sometimes worth more than $200 million a year, as populations have declined in the face of warming waters. The Atlantic cod fishery, once the lifeblood industry of New England, is now essentially shuttered. But even with depleted populations imperiled by climate change, it’s rare for regulators to completely shut down a fishery, as they’re considering doing for New England shrimp.
The federal government announced on Tuesday a program that will provide $1.3 billion in debt relief for about 36,000 farmers who have fallen behind on loan payments or face foreclosure, the Associated Press reported. The U.S. Department of Agriculture announced that the farm loan relief program was funded from the $3.1 billion set aside in the Inflation Reduction Act allocated toward assisting distressed borrowers of direct or guaranteed loans administered by the USDA. The law was passed by Congress and signed by President Joe Biden in August. The USDA provides loans to about 115,000 farmers and livestock-producers who cannot obtain commercial credit. Those who have missed payments, are in foreclosure or are heading toward default will get help from the USDA. Financial difficulties for farmers may be caused by a variety of issues, including drought and transportation bottlenecks. “Through no fault of their own, our nation’s farmers and ranchers have faced incredibly tough circumstances over the last few years,” said Agriculture Secretary Tom Vilsack. “The funding included in today’s announcement helps keep our farmers farming and provides a fresh start for producers in challenging positions.” About 11,000 farm borrowers delinquent on direct or guaranteed loan payments for 60 days or longer are receiving automatic electronic payments to get them current on their loans. Each farmer with a direct loan received about $52,000, and those with guaranteed loans received about $172,000. The total cost for this group is nearly $600 million. Farmers who received this help will get a letter informing them that their payments have been made and they will remain current until their next annual payment is due in 2023, Vilsack said.
The Biden administration on Monday proposed new regulations to strengthen competition rules in poultry and livestock markets aimed at protecting farmers and ranchers in dealing with the companies that process their products, Bloomberg News reported. Long-simmering grievances over the domination of meat and poultry markets by a few giant companies have exploded into the broader political debate as rising meat prices played an out-sized role in surging inflation this past year. President Joe Biden and his top economic aides have accused meatpackers and poultry processors of abusing their market dominance while farmers complained they haven’t received a fair share of surging supermarket prices. The proposed regulation prohibits meat processors from using specific deceptive practices in purchasing livestock, including making false or misleading statements or omitting important information to secure contracts for livestock or negotiate purchases. It also prohibits retaliation against farmers who try to join together or report abuses, according to an Agriculture Department summary. “Highly concentrated local markets in livestock and poultry have increasingly left farmers, ranchers, growers and producers vulnerable to a range of practices that unjustly exclude them from economic opportunities and undermine a transparent, competitive, and open market,” Agriculture Secretary Tom Vilsack, who announced the proposed rule, said.
Andy Jenks, a sixth-generation Illinois farmer, owns shares in a small real-estate investment trust called Farmland Partners Inc. but rarely thought about them. That changed on July 11, 2018. That morning, a writer going by the name Rota Fortunae published an article on an investing website, Seeking Alpha, alleging Farmland was at risk of insolvency, the Wall Street Journal reported. Some investors had shorted the company, betting Farmland’s stock was poised to decline. It did, and by the end of the day, Farmland was down 39%. It took more than two years for the share price to recover. Denver-based Farmland sued Rota Fortunae in Colorado federal court. The company accused the writer, whose real name is Quinton Mathews, of posting a “false and misleading” article to drive down the company’s shares. Farmland also sued a Dallas hedge fund, Sabrepoint Capital Management, in Colorado federal court and Texas state court, accusing it of working with Mathews for the same purpose. Mathews later said key parts of his article were incorrect, a statement he issued to settle Farmland’s lawsuit. Sabrepoint disputed Farmland’s allegations, saying it didn’t instruct Mr. Mathews to write his report and didn’t pay him to do it. Judges in both states dismissed Farmland’s lawsuits against the hedge fund, though Farmland is appealing in Texas.
One of the U.S.’s top antitrust regulators is backing the Biden administration’s efforts to change the way chicken companies pay farmers, a move that could potentially reshape the industry, Bloomberg News reported. Federal Trade Commission Chair Lina Khan praised USDA regulations that would protect poultry growers paid via the controversial “tournament system,” which pits farmers against each other in a zero-sum game for a pool of money. Her statement issued Thursday adds momentum to the government’s efforts to limit companies from using the payment method. She also publicly urged the department to do more. The proposed regulations are “an important first step,” said Khan, who’s a prominent voice on competition issues even as the FTC doesn’t have jurisdiction over farm sales. More rules restricting “deceptive, unfair, and discriminatory contract terms and business practices is needed.” Antitrust in the meat industry has been in focus recently because prices for beef, chicken and pork have been soaring and are a major contributor to the worst U.S. inflation in four decades. Meatpackers have netted record profits while farmers have missed out on winnings. The Justice Department last month made abandonment of the the compensation system a condition for proceeding with the Wayne-Sanderson Farms merger, which combined the country’s third- and sixth-largest chicken producers. Most processors including Tyson Foods Inc. and Pilgrim’s Pride Corp. compensate farmers via the tournament system, which rewards farmers that end up with the biggest birds. That’s even though companies control and own everything from feed to the animals themselves, and farmers only provide housing and labor. Critics say that the tournament system rankings are often opaque, open to abuse, and subject to factors more in control of the processor. The system has come under fire especially over the last decade as more stories of poultry farmers forced into bankruptcy due to method have come into public view. Khan wrote a lengthy article a decade ago detailing abuses of farmers by large chicken processors. In her comments on the proposed USDA rule, she noted many chicken farmers have little choice in processors to work for in their areas, citing 2012 research finding half of U.S. chicken farmers can contract with only one or two poultry processors.
