Starbucks Corp. Fans Can Now Trace Their Coffee

Bloomberg writer Isis Almeida reported this week that, “Starbucks Corp. fans can now trace their coffee. And so can farmers, who will know for the first time where their beans end up.

“Starting Tuesday, customers buying coffee at Starbucks stores across the U.S. will be able to use a code on the bags to find out where their beans came from, where they were roasted and even get brewing tips from baristas, said Michelle Burns, the company’s senior vice president of global coffee, tea and cocoa. A reverse code will be given to farmers so that they can finally track their produce.

“The new tool, powered by Microsoft Corp., uses blockchain technology and will allow Starbucks to share with its customers the traceability data the world’s largest coffee- shop chain has been collecting for more than a decade. It will also help the company attract sustainably-minded young consumers, many of whom had been flocking to small craft shops where coffee is roasted at the back of the store.”

The Bloomberg article noted that, “Last year, some coffee roasters including J.M. Smucker Co. and Jacobs Douwe Egberts joined a blockchain initiative, developed in partnership with International Business Machines Corp. Farmer Connect, a startup backed by Swiss coffee trader Sucafina SA, is helping the firms trace the origin of the beans they buy and sell as well as pricing along the supply chain.”

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HSBC Pollination Climate Asset Management- An Asset Management Venture Focused on “Natural Capital”

Reuters writer Simon Jessop reported today that, “HSBC Global Asset Management has teamed up with climate change advisory firm Pollination Group to create an asset management venture focused on ‘natural capital,’ which seeks to put a value on resources such as water, soil and air to help to protect the environment.

“The new venture – HSBC Pollination Climate Asset Management – will look to raise up to $1 billion for its first fund next year, targeting investments that ‘preserve, protect and enhance nature over the long-term,’ it said in a statement on Wednesday.

“It aims to attract capital from institutional investors, including sovereign wealth funds, pension funds and insurers into natural capital investments.”

The Reuters article added that, “A growing number of asset owners such as pension funds are looking to invest in projects that help to protect the world’s biodiversity at the same time as turning a profit.”

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Colony Collapse Disorder Not the Only Threat to Bees

Bloomberg columnist Justin Fox noted this week that, “Since hitting a low point in 2008, beset by the apocalyptic-sounding colony collapse disorder, America’s honeybees have been on the comeback trail. The number of colonies the U.S. Department of Agriculture counts is back up to almost 3 million, a level last seen in the early 1990s.

“Beekeepers in the U.S. continue to lose about 40% of their colonies annually, though, according to the nonprofit Bee Informed Partnership. Its surveys, which date to 2006, don’t show a clear trend, but researchers have estimated that yearly losses before 2000 were much lower. Colony numbers can still rise in the face of such losses, because it takes only a couple of months to get one up and running, but all does not seem well with the bees.”

Mr. Fox stated that, “Most losses last winter were attributed not to colony collapse disorder but to more mundane causes such as starvation and pests. Honeybees seem to have become generally more vulnerable, with two oft-fingered culprits being the varroa mite, a parasite originally from Asia that first appeared in the U.S. in the late 1980s, and the widespread use of neonicotinoid pesticides by U.S. farmers starting in the late 1990s.”

The Bloomberg column stated that, “U.S. beekeepers reported revenue of $309.6m from pollination services in 2019, and $309.1 million from honey, a big change from past decades, when honey was the chief moneymaker.

“The USDA counted a record 5.9 million honeybee colonies in 1947, with that number falling to a little more than 3 million by the mid-1980s in the face of competition from imported honey and other sweeteners.”

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After Decades of Progress, “Farm-to-Table” Hit Hard by Pandemic

Bloomberg writer Adam Minter reported last week that, “Shepherd’s Way Farms are located on 44 acres an hour south of the Twin Cities. It’s a small plot in a region where corn and soybean farms can sprawl for thousands of acres. But Shepherd’s Way doesn’t require much space to raise the few dozen sheep that help produce the farm’s award-winning cheeses. What it needs, co-owner Steven Read told me beneath a shade tree recently, are consumers, farmers’ markets and — above all — restaurants that buy locally grown food.

“Read isn’t alone. Across the U.S., small farmers who built businesses marketing locally grown produce are struggling to stay afloat during Covid-19. They aren’t the largest source of America’s food supply. But they’re undeniably important, both to the economy and to the development of healthy and robust food systems. So far, though, the federal government has largely overlooked them in favor of larger farms and agribusinesses.”

The article noted that, “These days, farm-to-table, as the movement came to be known, is premised on the idea that bringing producers and consumers closer together ensures fresher, more flavorful food while supporting local economies and reducing environmental harm. As of 2014, locally and regionally produced food was the fastest-growing sector of American agriculture, with more than $11 billion in sales and annual growth rates exceeding 10%. Farm-to-table restaurants, farmers’ markets, co-ops, and direct-to-consumer farm-fresh food deliveries have become key components of the movement. Their growth not only supports communities across rural America but powerfully influences the diets of millions.”

Mr. Minter explained that, “Then Covid hit. In May, a nationwide survey of 500 small farmers selling direct to restaurants and markets found that on average they’d lost more than half their revenue during the first eight weeks of the pandemic compared to the same period last year. If sales remained similarly depressed into August, a third of those farms thought they could be out of business by the end of the year.”

So long as Covid shutters restaurants and keeps consumers away from markets, there aren’t any easy solutions to this problem,” the Bloomberg article said.

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U.S. Sales of Previously Owned Homes Surged by the Most on Record in July

Bloomberg writer Maeve Sheehey reported today that, “U.S. sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market that’s proving a key source of strength for the economic recovery.

“Closing transactions increased 24.7% from the prior month to a 5.86 million annualized rate, the strongest pace since the end of 2006 and reflecting broad gains across the U.S., according to National Association of Realtors data issued Friday. The median estimate in a Bloomberg survey of economists called for a 5.41 million rate. Prices jumped 8.5% from a year earlier, on an unadjusted basis, to the highest on record.

“‘Housing demand is absolutely on fire,’ Stephen Stanley, chief economist at Amherst Pierpont Securities LLC, said in a note. ‘There are plenty of areas of the economy to worry about, but housing is most assuredly not one of them.'”

Today’s article added that, “Properties remained on the market for an average of 22 days, the shortest timespan on record, the NAR said. The median home price increased to an all-time high of $304,100 last month and compared with $280,400 a year earlier.”

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USDA Works with Stakeholders to Improve Prevented Planting Coverage

A news release yesterday from USDA’s Risk Management Agency (RMA) stated that, “[RMA] today announced it will make several improvements to Federal crop insurance prevented planting coverage. RMA will implement these changes for most spring crops with prevented planting coverage, starting in the 2021 crop year, and for all crops with prevented planting coverage, starting in the 2022 crop year.

“‘After unprecedented prevented planting in 2019, I thought it was incredibly important to examine how prevented planting policy can be improved,’ said RMA Administrator Martin Barbre. ‘Over the past few months, RMA has engaged producer groups, insurance agents, and Approved Insurance Providers in discussion through a prevented planting taskforce with the goal to improve prevented planting for producers when they really need it, but not to incentivize it.’

“The changes include:

  • Expansion of the ‘1 in 4’ requirement nationwide. Currently, only producers in the Prairie Pothole National Priority Area are subject to the requirement, which requires producers to plant acreage in at least one of the four most recent crop years to be eligible for prevented planting coverage on those acres.
  • Several modifications to existing policy and procedure to ensure that producers’ prevented planting payments adequately reflect the crops the producer intended to plant. Specific information on the changes can be found here.
  • Allow acreage planted with an uninsured second crop following the failure of a first crop within the same crop year to, nonetheless, be included as prevented planting eligible acreage.
  • Provide an exception allowing prevented planting of a different crop than the producer attempted to plant when a producer does not have a history of producing two crops in the same field if the producer can prove intention.
  • Allow the use of an intended acreage report for the first two years, instead of only the first year, for producers in a new county, where they have never produced the crop.”

The RMA release added that, “Crop insurance is sold and delivered solely through private insurance agents. A list of insurance agents is available online using the RMA Agent Locator. Learn more about crop insurance and the modern farm safety net at rma.usda.gov.

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Indoor Farming Proponents See Opportunity in Pandemic

Financial Times writers Mure Dickie and Emiko Terazono reported recently that, “The coronavirus pandemic has been a major worry for many British farmers, threatening access to agricultural labour and complicating international supply chains. But for proponents of indoor farming, the crisis has offered an opportunity.

“David Farquhar, chief executive of technology developer Intelligent Growth Solutions, says the pandemic has prompted a spike in interest in ‘vertical farms’, where batches of crops can be individually watered, fed and lit using LED lights, allowing them to be grown year-round with minimal labour near their markets, regardless of local soil or weather conditions.

“At the company’s demonstration farm in Invergowrie near the Scottish city of Dundee, trays of produce stacked in 9 metre-tall towers are managed remotely from seeding to packaging. Humans only need to enter the towers for occasional maintenance. ‘You can run it entirely on robotics . . . You probably need to go in once every six months,’ Mr Farquhar said.”

The FT article noted that, “While agritech investors have been pouring millions of dollars into vertical farm start-ups in the US and Europe, Irving Fain, founder of US vertical farming firm Bowery Farming, said the pandemic had accelerated interest around the world. ‘The simplicity of the supply chain is extremely important,’ Mr Fain said.”

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Increased Focus on Community Development Financial Institutions

Wall Street Journal writer Amara Omeokwe reported today that, “The coronavirus pandemic and the heightened attention on race have thrown new light on a longstanding source of economic inequality: Black communities have less access to credit than white ones.

“To address that gap, Washington and Wall Street are turning to a small network of lenders set up precisely to address that disparity. Community development financial institutions, or CDFIs, are community-based banks, credit unions and investment funds that lend to home buyers, small businesses and others in rural, impoverished and minority communities.

“Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. and Bank of America Corp., and new corporate supporters such as Netflix Inc. and Google Inc.”

The Journal article noted that, “There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.

“Fourteen percent of Black adults didn’t have a bank account in 2019, according to the Federal Reserve, compared with 6% of adults overall. Just 23% of Black-owned small businesses with employees used bank funding in the last five years, compared with 46% of white-owned firms, a Fed report showed.”

Ms. Omeokwe added that, “CDFIs’ $222.3 billion in assets are a tiny slice of the financial system; each of the largest consumer banks alone have trillions of dollars in assets. ‘It’s still a small industry and it needs more technological capacity to grow. It needs more financial capital. It needs more public support,’ said Margaret Anadu, head of the Urban Investment Group at Goldman Sachs.

“Sens. Marco Rubio (R., Fla.) and Susan Collins (R., Maine) have introduced a measure that would restart PPP, including another batch of set-aside funding for CDFIs. The proposal—currently stalled amid disagreements about further federal coronavirus relief—has bipartisan support.”

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Organic Trade Association’s Fraud Fighting Program Endorsed by USDA

A recent news release from the Organic Trade Association (OTA) stated that, “The U.S. Department of Agriculture has recognized the [OTA’s] Organic Fraud Prevention Solutions as an example of an effective private initiative to prevent fraud in the organic supply chain.

“In the department’s Strengthening Organic Enforcement (SOE) Proposed Rule, which [was published earlier this month] in the Federal Register, USDA noted ‘private initiatives in the organic sector to develop best practices for organic operations to detect and prevent organic fraud’ and said, ‘a good example [of those initiatives] is the Organic Trade Association’s Organic Fraud Prevention Solutions project.’ USDA continued that ‘these best practices will provide organic operations with practical tools to assess, monitor, and mitigate organic fraud risks within their organic supply chains.’

“‘The [OTA] applauds USDA’s and the National Organic Program’s commitment to the integrity of organic, and we thank them for their important endorsement of our Organic Fraud Prevention Solutions,’ said Laura Batcha, CEO and Executive Director of the Organic Trade Association. ‘Protecting the integrity of organic requires the efforts of all organic stakeholders, both public and private. This historic rulemaking by USDA will do much to protect organic from fraud through tougher enforcement and oversight, as our program helps organic companies put into place on-the-ground systems to deter and prevent fraud.'”

The OTA update added that, “The USDA’s proposed rule also requires that an organic fraud prevention plan be included in a certified organic operation’s Organic System Plan. Certified operations will be required to develop an organic fraud prevention plan to describe how they are preventing fraud and verifying suppliers. The Organic Trade Association applauds this requirement and its alignment with the association’s initiative.”

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Venture Investments in Plant-Based Meat Soars

Bloomberg writer Emily Chasan reported late last month that, “Hoping to find the next Beyond Meat, venture investors have more than doubled their bets on alternative protein makers this year, raising more than $1 billion for startups that focus on everything from lab-grown meat to protein derived from volcanic microbes.

More than 20 faux meat startups raised about $1.4 billion from venture investors in the first seven months of 2020, according to a report on [July 27] from London-based investor network Farm Animal Investment Risk & Return, known as Fairr. Venture investments in plant-based meat and dairy alternatives soared to $1.1 billion this year, up from $457 million in all of 2019, while investments in companies that grow cell-based meat more than tripled to $290 million from $75 million last year.”

The Bloomberg article explained that, “The venture investors backing this space range from companies like Cargill Inc. and General Mills Inc. to pension funds, traditional venture capital firms and celebrities like Bill Gates and Oprah Winfrey. As a group, they are betting that faux meat and dairy can scale up production quickly to meet a new generation of climate-conscious eaters that want to reduce the impact of livestock on the planet, according to Marisa Drew, head of the impact advisory and finance group at Credit Suisse Group AG. Plant-based and cell-based meat require a fraction of the water and energy used to manage livestock, but companies also have to invest heavily in marketing and technology to help replicate the look of a hamburger or the texture of seafood.”

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