Alabama Department of Agriculture and Industries Commissioner Rick Pate (R) thanked President Donald J. Trump (R) for asking the Department of Justice to investigate the Big Four meatpackers for possible market manipulation of the price that farmers and ranchers get for their beef cattle.
“I want to thank President Trump for asking the U.S. Department of Justice (DOJ) to expand its investigation into allegations that large U.S. meat packing companies manipulated beef prices farmers received for their cattle at market. USDA has been investigating meatpacker pricing activity since last fall, after live cattle prices plummeted following the Holcomb, Kansas, meat plant fire,” Pate said. “On April 6th, I sent a letter to U.S. Senators Richard Shelby and Doug Jones requesting they join fellow U.S. senators calling on DOJ to investigate meat packing companies’ influence on the cattle market.”
U.S. Senator Doug Jones (D-Alabama) was part of a bipartisan group of 19 Senators who sent a letter to the DOJ urging the AG William Barr and the Department of Justice to investigate possible unfair manipulation of the live cattle markets to fix prices in favor of the packers and against farmers and ranchers.
“Cattlemen across America seriously question the ability for their children to take over what are frequently multi-generational, family-owned operations that have served as the engines for their communities and our country’s food supply,” Jones and the Senators wrote. “The precarious market situation for feeders and producers could lead to a widespread collapse of this entire industry, making it susceptible to the forces of vertical integration, which may beset the industry far more quickly than once anticipated. It is critical for the DOJ to act expediently to investigate these concerning circumstances and evaluate potential competitive harms.”
“Four meat packing companies in the U.S. control more than 80 percent of the beef supply and there continues to be a tremendous gap between the cash cattle price farmers receive and the price consumers pay at the store,” Commissioner Pate wrote. “Since the coronavirus outbreak, boxed beef prices have more than doubled, while live cattle prices have dropped about 20 percent.”
Pate is optimistic that cattle farmers will benefit from the DOJ investigation.
“I am encouraged that the investigation seems to be moving forward,” Pate said. “It’s important that cattle farmers who work hard to produce the beef we all enjoy receive a fair price for their cattle.”
The Senators were joined in urging for a DOJ investigation by 11 State Attorney Generals.
Missouri Governor Mike Parson (R) said, “As a third-generation cattleman myself, I understand the stress many in the cattle business have faced for years. Cattlemen and cattlewomen across the United States are simply asking for transparency and accountability from our meatpackers in the beef business. I applaud Attorney General Eric Schmitt for showing leadership on this issue. It is important our farmers and ranchers understand that Missouri supports them.”
The Big Four meatpackers are: Tyson Foods, Cargill/Excel, JBS Swift, and National Beef.
R-CALF USA (Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America), a ranchers’ group, filed suit against the Big Four last year alleging illegal market manipulation and monopolistic behavior. R-CALF is urging Congress to bust up the large food processing companies.
Mike Callicrate is one of the co-founders of R-CALF USA and is a farmer-rancher and entrepreneur who owns a boxed beef company in Colorado Springs.
“National security is impossible without food security,” Callicrate told the Alabama Political Reporter. “The security of the State is impossible without food security. Globalization and multinational corporate control of our food systems has left us unable to feed ourselves.”
R-CALF USA believes that the Southeast region should have its own locally owned packing industry rather than being dependent on giant meatpackers located hundreds or even thousands of miles away owned by multi-national corporations.
“Job one should be for Alabama to build local/regional food infrastructure that connects Alabama farmers directly to Alabama consumers,” Callicrate told APR. “This will eventually eliminate the industrial model that is exploiting Alabama citizens and mining the State’s valuable resources. We must make future efforts bomb-proof . . . with a new commitment to antitrust law enforcement, and through support of our food dollars.”
Bill Bullard is the CEO of R-CALF USA.
“Covid19 has magnified a problem that has plagued the industry for years,” Bullard told APR. “We can not go back to where we came from. Restructuring is a necessity! “
COVID-19 exposed the danger of reliance on increasing larger and larger meatpacking plants that slaughter thousands of cattle each day with thousands of workers, many of them immigrants, working literally shoulder to shoulder disassembling animals often at breakneck speeds.
Sunday afternoon, the Alabama Political Reporter interviewed Callahan Parrish, a 4th generation Cattle Farmer. Callahan also owns the Cullman Stockyard and is emerging as an Industry Advocate.
“The pandemic has unmasked many fundamental problems associated with the current beef production model. Industry infrastructure, competitive market access for our producers and food security issues top this list,” stated Parrish.
“The skeletonization of the downstream segments of our industry is the result of the packers’ efforts to vertically integrate the cattle industry as they have already accomplished in the hog and poultry industries,” Bullard said. “In a very short time, we’ve lost hundreds of thousands of cattle producers, tens of thousands of farmer-feeders (smaller feedlots), and hundreds of packers, not to mention the loss of local livestock auction yards.”
70 percent of the cattle processed by the big meatpackers is contracted in advance. Prices are determined in the cash or spot market. By hedging against the cash market in livestock auctions the packers are more easily able to manipulate that cash market R-CALF USA contends.
“Without robust competition, the hollowing out of our rural communities will continue,” Bullard said. “It is time we reversed the negative trajectory of our industry by rebuilding our industry’s competitive marketing channels. It is time for Alabama to take a lead in infrastructure overall.”
There are impediments to siting a new regional meatpacker in Alabama. Since John Morrell closed its packing plant in Montgomery in 1992 thousands of Alabama farms and ranches have gone out of business and the state has far fewer cattle than it did a generation ago. Most of the remaining farms and ranches in the state produce 450 to 650 pound feeder calves, not the 1100 to 1500 finished or “fat” cattle that the industry butchers. Order buyers purchase southern calves and ship them out west to Texas, Missouri, or the plains states for growing out and finishing.
That would need to change to support a meatpacker here. While an increasing segment prefers grass finished cattle, most American cattle since the 1950s are finished in feedlots on grain. In 1915 Alabama had 4.5 million crop acres in cotton alone. Today all the crops acres combined in the state are less than 1.5 million acres. Some industry experts say that it is easier to export Alabama calves to the grain than import western gran to Alabama cattle; however Alabama’s poultry farmers grow over a billion chickens a year. Most of the 150 million bushels of corn and 63 million bushels of soybean meal that the chickens eat is imported from out of state. There is also enormous potential for grass finishing in Alabama given the moderate winters and plenty of rainfall.
“In the midst of hardship, Alabama’s Cattle Producers and stakeholders are talking solutions . . . and that is real progress,“ Parrish stated.
(Original writing and research by Montgomery area writer Amy McGhee contributed to this report. McGhee’s parents own and operate an Angus beef cattle farm in Tennessee.)
New unemployment claims held steady in June, state says
The number of Alabamians filing for unemployment insurance held more or less steady over the course of June, with 18,340 new claims added during the last week of the month, according to the Alabama Department of Labor.
There were 19,950 new claims in the first week of June and 18,367 in the second week, then a slight jump to 18,671 in the third week.
The month’s total of 75,328 new claims comes after Gov. Kay Ivey relaxed some restrictions meant to slow the spread of COVID-19 and allowed more businesses to open. The numbers vary by industry and county, but generally represent some stabilization, according to department spokesperson Tara Hutchison.
“They remain significantly down from a high in excess of 100,000 in April, which is good news. I don’t know if we can really expect anything one way or another in this unprecedented situation, but the decline from early in the pandemic is of course welcome news,” Hutchison said.
About 60 percent of last week’s new claims were attributed to COVID-19.
The state’s unemployment rate dropped from 13.8 percent in April to 9.9 percent in May. That compares to a rate of 3 percent in May 2019.
Jefferson County had the highest share of new claims last week at 2,626, followed by Mobile and Montgomery counties at 1,900 and 1,400, respectively.
The worst-hit industries that are categorized were administrative and support services, food service and bars, transportation equipment manufacturing, general merchandise stores, nursing and residential care facilities and educational services.
As of May, counties with the lowest unemployment rates are Clay County at 5.6 percent, Geneva County at 6.3 percent and Shelby County at 6.5 percent.
Counties with the highest unemployment rates are Wilcox County at 19.3 percent, Lowndes County at 18.3 percent and Greene County at 16.4 percent.
Major cities with the lowest unemployment rates are Vestavia Hills at 5.2 percent, Homewood at 5.4 percent and Madison at 6.2 percent.
Major cities with the highest unemployment rates are Prichard at 18.6 percent, Selma at 17.1 percent and Gadsden at 15.7 percent.
Wage and salary employment increased in May by 42,500, according to the department.
Average weekly earnings increased to a record high in May, rising to $905.25 per week, representing an increase of $66.43 over the year.
Secretaries of State share joint statement on importance of USMCA launch
Following the completion of the necessary measures to comply with commitments under the United States-Mexico-Canada Agreement (USMCA), the Agreement officially enters into force today, July 1, 2020.
As Secretaries of State who oversee the business filings process in the respective states of Alabama, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, Ohio, Texas, and Wyoming, Secretaries John H. Merrill (Alabama), Paul D. Pate (Iowa), Michael G. Adams (Kentucky), Kyle Ardoin (Louisiana), Michael Watson (Mississippi), John R. Ashcroft (Missouri), Bob Evnen (Nebraska), Frank LaRose (Ohio), Ruth Hughs (Texas), and Edward A. Buchanan (Wyoming) recognize and appreciate firsthand the positive impact the USMCA will have on entrepreneurs across the country.
“Alabama’s international engagement fuels job growth and increases exports. The success of Alabama businesses depends on the participation and competitiveness of our global counterparts. Alabama totaled $6.6 billion in exports to Canada and Mexico in 2018, supporting families and businesses across the state” noted Alabama Secretary of State John H. Merrill. “I was delighted to join President Donald J. Trump in January of this year as he signed this mutually beneficial agreement, and I look forward to its future success.”
“The USMCA is a great opportunity for Iowa’s farmers, businesses and families. The launch of this agreement comes at a vital time for our country and will provide a much needed boost to our economy. Canada and Mexico bought $6.5 billion worth of goods from Iowa in 2018 and this deal ensures our partnerships with these neighbors will continue,” stated Iowa Secretary of State Paul Pate.
“The USMCA entering into force is a great deal and a win for American and Louisiana workers. The USMCA will help support and grow our economy, boost small businesses, help our farmers, manufacturers, and workers, and ensure more Louisiana-made products can be sent internationally. Trade is important to Louisiana’s economy and this deal will help boost both,” stated Louisiana Secretary of State Kyle Ardoin.
“During a time when the future of our economy seems nebulous, the USCMA creates a portal for modern opportunities and prosperous partnerships,” said Mississippi Secretary of State Michael Watson. “The enhanced agreement will undoubtedly revive businesses and help boost innovation in our state. I applaud President Trump’s leadership and dedication to ensuring a fair playing field for Mississippi farmers, ranchers, and entrepreneurs.”
“Missouri is grateful for this historic agreement, which will help Missouri agriculture and businesses grow with more jobs and increasing exports. As our economy recovers, getting businesses and people back to work, this will help ensure success for large and small businesses who compete and form partnerships with our neighbors. We stand ready to assist our entrepreneurs and businesses,” replied Missouri Secretary of State John R. Ashcroft.
Nebraska Secretary of State Bob Evnen noted, “The USMCA provides expanded opportunities for Nebraska’s livestock industry, and our ag commodity and specialty crop producers. The USMCA builds on the successes and corrects the problems of NAFTA, and gives us expanded opportunities for Nebraska’s ag trade with our friends in Mexico and Canada. This excellent agreement now serves as a template for other international free trade agreements, so we have cause for optimism on many fronts.”
“Today is a day Ohio’s farmers and entrepreneurs have been waiting for,” said Ohio Secretary of State Frank LaRose. “As our nation’s economy continues to recover, the USMCA is a much needed boost as they compete on the global stage. Thanks to the leadership of President Trump, Senator Portman and bipartisan leaders from across our nation, Ohio is poised for our next giant leap, and my office looks forward to helping make it happen.”
“Last year alone, trade between Texas and its two largest trade partners—Mexico and Canada—totaled more than $200 billion. This exchange supports the more than 950,000 Texas jobs that are tied directly to trade with Mexico and Canada,” said Texas Secretary of State Ruth Hughs. “The implementation of the USMCA provides tremendous benefit to all parties involved in the trade deal and will help to ensure years of mutual economic benefit and prosperity for all. We look forward to further strengthening our relationship with our trade partners as we enter a new era of innovation and success.”
“The USMCA trade deal has high standards and rebalances North American trade to provide a stronger market for Wyoming’s and our Nation’s goods. This is a great day for our country, as businesses will better be able to participate in cross-border trade. USMCA ensures fair business practices by our neighbors and now the advantage will be back in the hands of the American worker,” stated Wyoming Secretary of State Edward Buchanan.
This historic trade agreement will result in freer markets, fairer trade, and strong economic growth across North America, creating new opportunities for American workers, farmers, ranchers, and business owners.
Ivey announces SiO2’s $163 million expansion in Auburn
Alabama Gov. Kay Ivey announced Wednesday that SiO2 Materials Science plans to invest $163 million in an expansion at its Auburn facility.
The announcement came just after securing a major contract to supply the federal government with vials to support the COVID-19 vaccine effort if and when an effective vaccine is developed. The project will create 220 jobs.
“It is exciting to know that SiO2 will be directly involved in providing a product essential to addressing the COVID-19 crisis, which will impact not only Alabamians but the entire country,” Ivey said. “This is a testament to the ingenuity of this great company and its growing Alabama workforce.”
Economic developer Nicole Jones told the Alabama Political Reporter, “Vials produced by SiO2 Materials Science may be the critical component needed to ensure safety in the vaccine distribution process. The breakthrough technology developed by the Auburn-based company provides a glimmer of hope amidst challenging times and showcases how Alabamians are working diligently to craft solutions that will assist our nation and the world in the fight against COVID-19. In addition, the 220 new, high-skilled jobs housed in Auburn Technology Park West will bring economic benefits to Lee County as well as the entire state of Alabama.”
The expansion will allow SiO2 to increase its production capacity so that it can meet the expected demand for vials and syringes when a coronavirus vaccine is finally approved for mass use.
In June, SiO2 announced an $143 million contract with federal government agencies for a production scale-up of the company’s state-of-the-art packaging platform for storing novel coronavirus (SARS-CoV-2) vaccines and therapeutics.
Bobby Abrams is the CEO of SiO2.
“The pandemic presents an enormous challenge for all people,” Abrams said. “We are extremely grateful for Senator Shelby’s steadfast support and assistance, and we’re honored to collaborate with our government so a COVID-19 vaccine can be safely and quickly distributed. The State of Alabama and the City of Auburn for many years have been very supportive of SiO2 Materials Science during its research, development, commercialization, and now scale-up phases of the company.”
Over the last 10 years, SiO2 has developed its patented vial platform, which combines a plastic container with a microscopic, pure glass coating on the inside that is ideal for biological drugs and vaccines. The product, developed in Auburn with help from experts from four major U.S. research institutions, combines the benefits of both glass and plastic without drawbacks.
“There are problems with plastic, and there are problems with glass, and we resolve all of them,” Abrams said.
SiO2 will expand its existing facility at 2250 Riley Street and will invest in a new molding facility at 2425 Innovation Drive, both located in the Auburn Technology Park West.
Construction is already under way to expand the facility on Innovation Drive. The completed approximately 70,000-square-foot facility will increase the production capacity of SiO2’s injection molding operation.
“We’re proud to have some of the world’s leading scientists and product developers working in our community,” Auburn Mayor Ron Anders said. “With the presence of these companies and Auburn University’s outstanding medical and engineering programs, we believe we’ll see significant growth in the biotech industry right here in Auburn. On top of that, the well-paying jobs created through this project will result in significant economic opportunities for our local businesses.”
Greg Canfield, the secretary of the Alabama Department of Commerce, said that SiO2’s expansion project in Auburn will help ensure that the nation’s health authorities have an ample supply of vials and syringes to administer a vaccine for COVID-19 as soon as it is developed.
“Having a steady supply of SiO2’s innovative vials will represent a key strategic advantage for federal agencies wanting to act rapidly once a vaccine is available to counter the coronavirus,” Canfield said.
Robert S. Langer is a professor at the David H. Koch Institute at MIT and a company adviser.
A key element of SiO2’s product is enhanced safety for healthcare providers and for patients, who are at a lower risk of adverse side effects. A combination of plastic and a microscopic layer of glass also means vials and syringes won’t break, shatter or crack. SiO2 ships its products worldwide.
“Many drug development and drug formulation innovations can be limited due to variables associated with traditional glass vials and syringes,” Langer said. “The SiO2 vials and syringes eliminate these variables and allow drug development partners to bring their innovations to life.”
SiO2 is a privately-owned company based in Auburn, where it has around 200 employees. The Retirement Systems of Alabama provided early financial support for the company.
517,464 people have already died from the COVID-19 global pandemic, including 130,602 Americans.
ADOL announces extended benefits program to begin
The Alabama Department of Labor announced today that the state will begin offering Extended Benefits (EB) for those who qualify and have exhausted previous benefits.
This is a separate program from the Pandemic Emergency Unemployment Compensation (PEUC) program that was enacted under the CARES Act.
The EB program is a federal program that is triggered when a state’s insured unemployment rate exceeds 5.9 percent. Alabama’s weekly insured unemployment rate* of 6.11 percent triggered the state onto a 13-week EB period beginning the week of May 31. It is usually available during times of adverse economic conditions. The last time Alabama offered the EB program was during the Great Recession of 2008.
While EB is available for UP TO 13 weeks, not all claimants will be eligible to receive all weeks. Alabamians can begin claiming these benefits on July 5, 2020.
Claimants must first exhaust all regular UC and PEUC benefits before they will be eligible for EB benefits. Claimants must not be eligible for unemployment compensation benefits in another state or Canada, must have no disqualifications, have qualifying wages, and must have at least one week in the benefit year that begins in an EB eligibility period. Specific eligibility criteria can be found at: https://wdr.doleta.gov/directives/attach/UIPL/UIPL_24-20.pdf.
Individuals are only entitled to benefits if they are no longer working through no fault of their own and they MUST be able and available for work. The EB program has more stringent work search requirements and requires claimants to engage in a “systematic and sustained” effort to obtain work during each week and to provide evidence of efforts. Due to the pandemic, the submission of required work search contacts has been TEMPORARILY waived due to Covid-19 restrictions. However, claimants should continue to look for work where possible, and maintain a record of their efforts on a weekly basis. This waiver may end at any time. Once this waiver ends, claimants will be required to provide a minimum of three (3) work search contacts each week during the weekly certification process.
ADOL will notify those eligible for EB benefits via the UI Claims Tracker and by mail. Claimants will not have to apply for these benefits, but should continue to file weekly certifications.