OMAHA (DTN) -- In March 2017, Australian real estate mogul Tim Gurner advised millennials to quit wasting money on expensive avocado toast and coffee if they struggle to buy their first homes.
The avocado market suddenly surged and continues to thrive.
In the food business, consumer preferences and demand can change at the speed of light in the internet age.
Responding to sudden changes in consumer demand is something farmers -- by the nature of the business -- find difficult to do.
For example, Arlington, Nebraska, farmer J.P. Rhea seized opportunity in organics, but completely remaking his 11,000-acre farm didn't happen overnight.
"Dad always said you have to adapt to survive," Rhea told an audience at the Food and Ag at the Intersection symposium in Omaha, Nebraska, on Thursday.
"The main lesson is, as farmers we have to adapt. Going to organics is completely changing everything I've ever done. We've got to dramatically rethink risks if we want farmers to dramatically change production systems."
The growing development of a cell- and plant-based meat industry is attempting to respond to market demands from millennials. Many millennials want food produced with certain attributes -- environmentally friendly, made with animal welfare in mind, and so on.
Jarrod Sutton, vice president of domestic marketing for the National Pork Board, said the milk industry's 14% loss of sales to alternatives such as almond milk, is a reason the pork industry should take notice of the alternative meat industry.
"The lesson for us is to be aware and understand how consumer trends are changing," Sutton said. "There's going to be jabbing back and forth. It is the new reality. Meatless Monday is a thing. We have to stay in the dialogue and make sure the facts are presented."
Sutton said the cell-based and plant-based protein markets are "about saving the earth."
"They're pouring a lot of money into this," he said. "It's Silicon Valley. It's about failing slow."
Jayson Lusk, distinguished professor and head of the ag economics department at Purdue University, said although news stories don't feature a lot of good news for the meat industry, there continues to be rising demand for animal proteins.
His research shows beef demand is highest among conservative Republicans, but as education levels grow the divergence increases.
"Beef demand is becoming increasingly polarized over time," Lusk said. "Conversation about meat consumption are going to become more difficult over time."
In addition, he said when consumers have the same price points for real beef and beef alternatives, demand for beef doesn't really change.
"Even if real beef is more expensive, demand for real meat stays over time," Lusk said.
Bruce Friedrich, executive director of theGood Food Institute, said plant-based and cell-based meats have a $3.7 billion market. Currently there are more than 25 companies operating in the space.
Friedrich told DTN in an interview the market provides some opportunity for traditional row-crop and livestock farmers.
"Obviously ... there are quite a few cattle ranchers who are making an excellent living, but there are not a lot of chicken farmers or pig farmers that are making an excellent living," he said.
"And slaughterhouse jobs are not exactly coveted. This is a net advantage for those sorts of folks. It should be a net advantage for people who are farming crops, because it will allow them to get higher prices for other legumes, primarily. Pea protein, chickpea protein and lupine are being turned into plant-based meat. So you end up with a situation where you can go to more crop rotation, less mono-cropping, basically turning back the clock. The plant-based stuff should end up with a lot of opportunities for farmers."
More traditional food companies are launching plant-based segments in their businesses in an attempt to respond to the market quickly.
For example, Tyson announced plans this year to launch vegan plant-based products. Archer Daniels Midland is entering the plant-based protein space with its pea-based proteins.
On Thursday, Beyond Meat launched its initial public offering, raising about $240 million in selling 9.6 million shares at $25 each. The company is valued at about $1.5 billion. The plant-based burgers and sausages company based in El Segundo, California, faces competition from the likes of Tyson and Burger King.
Earlier this week Burger King announced plans to launch the plant-based "Impossible Whopper." In addition, Tyson was an original investor in Beyond Meat, but sold its shares to launch its own business.
Friedrich said the question remains about how fast Beyond Meat can scale up production. It could take five to 10 years, he said.
FOOD COMPANY INVESTMENTS
When it comes to cell-based meat companies, the likes of Tyson and Cargill have invested in a company called Memphis Meats. Tyson also has invested in a company called Future Meat Technologies.
Cell-based meat companies are working feverishly to scale up the technology. That involves using a cell from a single animal and essentially immortalizing the animal through growing meat in a laboratory at a rate far faster than livestock producers who raise animals.
"So that one cell can lead to the production of millions and millions of pounds of meat," Friedrich told DTN.
"For farmers who are treating animals well, and for farmers who are focused on regenerative agriculture, our hunch is that you'll see more of a market for that. The market for that is pretty small at the moment. There are significant opportunities for farming. It's the nature of any changing economy. Families are changing how they feed their families, it is a market that is growing more and more and more. It will be extremely lucrative, and should be something farmers should be looking at."
Steve Lerch, founder of Story Arc Consulting, said the food system is moving toward a benefits-driven system, because consumers have more information at their fingertips.
Food companies and farmers face a challenge to keep up with changing consumer preferences.
For instance, Lerch said consumer are beginning to lose interest in the GMO debate, while companies began responding five years ago by moving toward offering GMO-free products.
"There are quick, simple things [you] can do to catch waves," he said.
"Companies don't have to create waves. There is value in telling consumers something. If Burger King today created a message that there is no rubber in our hamburgers, they get benefits from this. Some people may then begin to think, 'Does McDonalds put rubber in its hamburgers?'"
Todd Neeley can be reached at email@example.com
Follow him on Twitter @toddneeleyDTN
Copyright 2019 DTN/The Progressive Farmer. All rights reserved.
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OMAHA (DTN) -- Before EPA and the U.S. Army Corps of Engineers finalize the waters of the United States, or WOTUS, rule they will have a number of concerns to address, according to a number of public comments filed by agriculture interest groups.
The agencies received hundreds of thousands of public comments on regulations.gov prior to the April 15 deadline. Most of the members of ag and rural groups who commented said they support the rule but are calling for changes. The agencies are on track to finalize the rule later this year.
Generally, the rule has been lauded by ag interests because it narrows federal jurisdiction of waters and has clarified a number of concerns the industry had about the 2015 rule.
In Iowa, where farmers have installed a wide network of drainage tile systems to drain off otherwise flooded fields, the state's leading drainage association said the proposal creates a number of problems. There are 9 million acres of land in the state being subject to draining, according to estimates.
"With respect, the drainage ditches specifically, the proposed rule continues to lack necessary clarity and will lead to increased costs to drainage districts and thus landowners in those districts," the Iowa Drainage District Association said in comments. "Ditches are listed as a category of WOTUS and as an exclusion. This is unnecessarily confusing.
"The extensive network of artificial tiling that exists in Iowa is designed to drain excess precipitation and subsurface waters in order to maintain healthy soils and avoid extended periods when the groundwater table would otherwise be elevated. This results in ditches that flow both perennially or intermittently due to tile drainage. The proposed rule would force us into a regulatory never-never land where decisions on improving or maintaining a ditch are potentially going to have to be evaluated on a case-by-case basis."
The group said the rule would result in a "patchwork quilt of coverage decisions" that could vary from field to field depending on how Corps field staff interpret regulatory guidance.
The association called for the agencies to define drainage ditches and exempt them from the rule.
"We also suggest that the rule should reiterate that drainage tile is not considered a point source," the group said.
For many years, court challenges to the Clean Water Act focused on the definition of navigable waters. A number of ag groups urged the agency to clarify what are traditional navigable waters.
The Fertilizer Institute (TFI) said in public comments the agencies need to return to what Congress intended for navigable waters.
"To return to the concept of TNWs (traditional navigable waters) that was intended by Congress, the agencies should revise the proposed text of this section to include waters 'which are currently used, or were used in the past, or may be susceptible to use to transport interstate commerce' rather than 'use in interstate commerce,'" the group wrote.
In addition, TFI called on the agencies to clarify that the rule's definition of "ephemeral" is not considered a jurisdictional water. The group asked the agencies to revise the definition of the term "intermittent" when defining streams, as well as to clarify the rule's "typical year" concept when talking about precipitation.
"For example, the duration of tributary flow 'during certain times of the year' is not specified," TFI said in comments.
The group also asked for the removal of a "jurisdictional ditches" category from the rule.
The National Association of State Departments of Agriculture (NASDA) said the agencies need to clarify that navigable waters are those used in transport.
"This difference, although small, will ensure that TNWs are waters that are not flowing due to heavy rainfall or other weather events," the group wrote. "Instead, it will narrow jurisdictional focus to waters that support commerce and are indeed navigable."
The NASDA asked the agencies to consider physical indicators as well as surface water flows when identifying tributaries as jurisdictional waters.
"In the 2015 rulemaking, 'bed,' 'bank,' and 'ordinary high-water mark' were misused and did not address the amount of water flowing through these features when determining jurisdiction," the group writes. "In the 2015 rulemaking, NASDA did oppose the use of these physical indicators. However, rather than regulating flow regimes and physical barriers as separate entities, NASDA encouraged the agencies to consider both flow and physical indicators to determine the presence of a jurisdictional tributary."
The North Carolina Farm Bureau Federation said in comments the jurisdictional ditches category should be eliminated from the rule.
"We agree with the agencies' proposal to assert jurisdiction over certain types of ditches, such as those that are man-altered tributaries," the group said.
"But it would be better to do that by clarifying the 'tributary' category rather than by establishing a category of jurisdictional ditches, which may create the misimpression that the default status of ditches is that they are jurisdictional. Farmers have a significant interest in ensuring that this rule provides as much clarity as possible over the regulatory status of ditches."
The group asked the agencies to consider limiting traditional navigable waters to just waters subject to the Rivers and Harbors Act. That act defines waters as those "currently used, or which were used in the past, or may be susceptible to transport interstate or foreign commerce, including the territorial seas and waters, which are subject to the ebb and flow of the tide."
Wyoming Gov. Mark Gordon said his state remains concerned about how the rule defines intermittent streams and how it treats ditches.
"Wyoming supports the revocation of ephemeral waters that flow only in response to rain and other weather events," he wrote in comments.
"However, concern remains over the determination that would apply WOTUS jurisdiction to rivers and streams with yearly perennial or 'intermittent' flow to downstream navigable waters. Wyoming's snowmelt-driven hydrologic systems include many dry draws that exhibit continuous but short-duration flows during spring runoff. Additionally, one could argue that all agricultural ditches are 'intermittent' by nature, especially because they seasonally convey water during the irrigation season."
The proposed rule still has the potential to make it difficult for landowners to know which ditches are jurisdictional.
"The current proposed rule also applies jurisdiction to ditches when they 'satisfy conditions of the tributary definition' or when they 'relocate or alter' a tributary," Gordon wrote. "These two aspects still have potential to create confusion concerning which ditches are, and are not, considered WOTUS."
The Colorado Livestock Association said the beef industry has been battling the Clean Water Act for decades and the proposed rule begins to make life easier.
"Most American cattle producers are multi-generational, having dealt with every iteration of CWA jurisdiction since its passage in 1972," the association said.
"After nearly 50 years of jurisdictional tug-of-war between the Supreme Court and the agencies, regulated stakeholders want nothing more than consistency in the act's application. In the final rule, livestock producers need a practical, interpretable WOTUS definition."
Todd Neeley can be reached at firstname.lastname@example.org
Follow him on Twitter @toddneeleyDTN
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