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Brazilian Poultry HPAI Outbreak, U.S. Soybean Industry and Sprite
6 Plays7 minutes ago
Leaders in agriculture were in action this week across the globe. Braeden and Savannah are back with trending headlines impacting your operation.
On the docket today:
- Brazil poultry faces highly pathogenic avian influenza, which could impact US corn and soybean exports.
- U.S. Soybean farmers can expect more supply chain challenges this year as input costs continue to rise and trade with China is turbulent.
- Secretary of Agriculture Brooke Rollins has been visiting the country and the UK, talking border biosecurity, global trade, and health policy.
Clemens Food Group has agreed to a $13.5 million settlement in a multidistrict antitrust lawsuit alleging price-fixing in the pork industry.
- Coca-Cola just announced Sprite + Tea, a new limited-time flavor inspired by a viral TikTok trend.
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Transcript
00:00:00
Speaker
This week in Ag, Secretary Rollins is back from the UK, beefed up on trade wins, cracking down on border biosecurity, and gearing up for a sweeping health report that could reshape how agriculture factors into America's wellness agenda.
00:00:14
Speaker
We're also talking Brazilian poultry taking the back seat, supply chain challenges for U.S. soybean producers, and another multi-million dollar settlement, and an antitrust lawsuit alleging pork price fixings.
00:00:27
Speaker
Oh, and we can't forget that Sprite is back in the spotlight. All this coming at you right now. I'm Brayden. And I'm Savannah. Welcome to Magnetic Ag Ears Edition. Every week we break down the top headlines and trends facing food and agriculture. Fast, fun, and actually useful.
00:00:44
Speaker
Let's get it Brazil, the world's top poultry exporter, is officially benched. The EU and China just hit pause on all Brazilian poultry imports after a confirmed outbreak of highly pathogenic avian influenza, or HPAI, in the southern state of Rio Grande de Sol.
00:01:02
Speaker
Brazil supplies more than 5 million tons of poultry meat in 2024, with over 30% of the EU's imports coming from them. That pipeline is now paused, and that creates some ripple effects for the rest of the world.
00:01:16
Speaker
One of the big questions now is how this could impact U.S. producers. Brazil typically accounts for about a third of all global poultry exports. With China out after importing over half a million tons from Brazil just last year, there's suddenly a gap in the supply chain.
00:01:31
Speaker
But here's the catch. China isn't exactly turning to the U.S. as a backup. Ongoing trade tensions and HPAI-related restrictions have led China to block poultry from more than 40 U.S. states.
00:01:44
Speaker
So even if demand increases, we may not benefit, or at least not immediately. There's also the feed angle. Brazil's poultry sector consumes a huge volume of corn and soybean meal, over 40 million tons of corn and nearly 18 million metric tons of meal annually.
00:02:01
Speaker
If they begin depopulating flocks, that demand could drop fast, which may lead Brazil to increase exports of those commodities instead of retaining them. That could put pressure on global feed markets, particularly for U.S. corn and soybean growers. So it's not just about poultry, it's also about grain and oil seeds.
00:02:19
Speaker
Some countries are accepting regionalization, which means they're allowing imports from unaffected areas of Brazil. But if the outbreak spreads nationwide, the global market disruption could get much worse.
00:02:30
Speaker
Bottom line, this is a critical situation to be watching. Whether you're a poultry, corn, or soybean grower, Brazil's HPAI response could have a global impact. Speaking of soybeans, American Soybean Association President Caleb Raglin testified before the Senate Finance Committee highlighting the mounting supply chain challenges impacting U.S. soybean producers.
00:02:52
Speaker
First big challenge on his docket, rising input costs. Fersilizer prices have continued to rise nearly 30% since 2022. Equipment expenses also continue to climb, adding financial strain to farmers.
00:03:06
Speaker
These are rising costs are squeezing profit margins, making it increasingly challenging for producers to be profitable. Trade turbulence is also top of mind, particularly with China.
00:03:18
Speaker
Despite a temporary 90-day truce reducing tariffs to 10%, U.S. soybeans remain less competitive in the Chinese market compared to Brazilian exports. Brazil now supplies approximately 70% of China's soybean imports while U.S. exports have declined.
00:03:34
Speaker
How is this going to affect U.S. farmers? In March, China purchased 22.12 million metric tons of U.S. soybeans for shipment throughout 2024 and 2025.
00:03:46
Speaker
China accounts for 48% of the total soybean sales so far, highlighting its importance in U.S. trade. But these trade dynamics are leading to potential 20% drops in U.S. soybean exports if trade disputes aren't resolved.
00:04:00
Speaker
Looking ahead, Senator Mike k Crapo of Idaho emphasizes the importance of trade policies that support U.S. agriculture by stating, quote, trade has the ability to increase productivity, incomes, and the availability of goods.
00:04:13
Speaker
A majority of what we import each year is reinvested into more manufacturing, processing, and farming activities. From tariffs to towering input costs, soybean producers are stuck at the crossroads of global trade and domestic strain.
00:04:28
Speaker
In other news from the nation's capital, Secretary of Agriculture Brooke Rollins has had a packed week balancing border biosecurity, global trade, and a major domestic health policy report on the horizons.
00:04:40
Speaker
That's right. Just back from the United Kingdom, Secretary Rollins says agriculture is front and center in a long-awaited trade agreement between the U.S. and U.K. Top concessions?
00:04:51
Speaker
Beef, ethanol, and pork. She called it a huge win for the American farmer. She emphasizes science-based advocacy, especially around UK concerns like hormones usage in beef and chlorinated chicken.
00:05:04
Speaker
Her message, US ag is safe, abundant, and reliable, and the UK desperately needs American ethanol to meet its climate goals. Meanwhile, back home, Rollins made another big call, suspending live cattle, horse, and bison imports from Mexico due to concerns over New World screw worm, a serious livestock threat.
00:05:25
Speaker
The pest has moved within 700 miles of the Texas border, and Rollins says that's, and I quote, inexcusable and unsustainable. The USDA is considering production of sterile flies to help contain the spread, but until there is more distance between NWS cases and the U.S. border, imports will stay paused.
00:05:43
Speaker
On top of all of that, Rollins is preparing for the May 22nd release of the Make America Healthy Again report, which is a sweeping look at chronic disease, prescription addiction, and the role nutrition plays in national health.
00:05:56
Speaker
And agriculture will be a part of the solution. Rollins says the report will highlight how America farmers fuel not just the economy, but public health. And she's confident it will reflect President Trump's America First vision.
00:06:09
Speaker
Savannah, I think we've heard this one before. We have indeed been here before. Clemens Food Group has agreed to a $13.5 million dollars settlement in multi-district anti-law suit, alleging pork price fixings.
00:06:24
Speaker
ooh That's a mouthful. This marks the fifth settlement in the case, bringing total recoveries from the Consumer Indirect Purchaser Plaintiff's, or IPP, case to approximately $123 million. dollars The lawsuit, initiated in 2019, accuses major pork producers, including Clemens, JBS, Smithfield, Hormel, Seaboard Foods, Triumph Foods, and Tyson Foods, of conspiring since at least 2009 to fix, raise, maintain, and stabilize pork prices.
00:06:54
Speaker
The plaintiffs allege that these companies utilize agrostats reports, herd culling, and export strategies to control supply and manipulate prices. U.S. District Judge John Tunhing oversees the case, commenting on the evidence presented, saying the evidence in the litigation supports a reasonable interference of a price-fixing conspiracy and tends to exclude the possibility of mere independent actions among co-defendants.
00:07:21
Speaker
Beyond Clemens, other settlements in the case include $20 from $75 million dollars from Smithfield Foods, $4.5 million dollars from Hormel Foods, and $10 million dollars from Seaboard Foods.
00:07:34
Speaker
Notably, Tyson Foods and Triumph Foods have also agreed to pay a combined $64 million dollars to settle related claims from direct purchasers. Despite these settlements, the litigation continues with Agstats remaining a defendant. The consulting firm is accused of facilitating the alleged conspiracy of providing benchmarking and data that enables coordination among processors.
00:07:57
Speaker
Agstats denies these allegations. Brayden, after all of the heat in the pork industry, how about a cold one? A crispy Sprite, I mean. If you've ever dropped a teabag into your Sprite and thought, this could be a real thing.
00:08:10
Speaker
Coca-Cola kind of agrees with you. The company just announced Sprite Plus Tea, a new limited flavor inspired directly by a viral TikTok trend. Yep, it's now an official product available through October.
00:08:24
Speaker
In both regular and zero-sugar varieties, the move is a part of Coke's broader strategy. Follow consumers' behaviors, test both flavors, and stay relevant with Gen Z.
00:08:35
Speaker
The product actually started as an intern research project inside Coke's R&D team. After rounds of testing flavor balance, color, and texture, it got the green light. And the viral TikTok moment only confirmed what the team suspected. Sprite plus T actually works.
00:08:52
Speaker
It's the latest example of Coca-Cola leaning into social media as a guide for product innovation. According to Senior Creative Director A.P. Cheney, when the trend hit millions of views online, they knew they were on the right track.
00:09:06
Speaker
This launch follows other experimental releases under the Sprite brand. Think Sprite Lemonade in 2019, its Strawberry Lemonade in 2023, and last year's Sprite Chill with a cherry lime flavor and a cooling sensation.
00:09:21
Speaker
And Mirzer Coca-Cola is done with its core brand too. Remember those wild creation flavors that claim they taste like outer space and dreams? Or maybe you remember Oreos collab last year.
00:09:33
Speaker
They're chasing novelty and social buzz and honestly, it seems to be working for them. But the competition is heating up. PepsiCo's Starry and Better For You brands like Olipop and Poppy are putting pressure on Sprite to stay fresh, literally and figuratively.
00:09:49
Speaker
And TikTok is providing to be a goldmine for food and beverage R&D. Think back to Kraft Heinz dip and crunch booger sauce combo in 2022. Also inspired by another viral post.
00:10:02
Speaker
For brands trying to win with Gen listening to TikTok might be the most valuable R&D lab out there. Maybe we should take our own advice, Brayden. Here is our shameless plug for everyone to go follow us on TikTok.
00:10:14
Speaker
And I promise not all of our news is about Sprite. Come back next week for more Sprite. Well, maybe just some news. Hungry for more? Subscribe to our twice weekly newsletter for more industry news right in your inbox.
00:10:28
Speaker
Or follow along on socials magnetic.ag for more trends and headlines. Thanks for listening to Magnetic Ag, Gears Edition.