Challenges facing the ag sector such as climate change, rural flight and shifting economics also bring new opportunities to find solutions that benefit those throughout the entire protein supply chain, Cargill Protein North America President Hans Kabat said at Agri-Pulse’s Ag Outlook Forum in Kansas City on Monday.
Beef production, in particular, has faced significant challenges from considerable price cycles of highs and lows throughout the supply chain, which Kabat said the industry has to learn to handle more smoothly.
“What we do know is the last cycle that we’ve been through in beef is not once-in-a-lifetime. It’s once-in-several-lifetimes. And that’s hard,” he said. “We need to continue to ask ourselves and demand more for making these cycles less severe than they are now.”
This can be accomplished with commercial agreements with producers, livestock risk protection programs with government support and new policy solutions such as low interest loans, he said.
He said farmers have been “forced to adapt to climate and market volatilities amidst the global crisis of food insecurity.”
Cargill is working with farmers through its BeefUp Sustainability Initiative to link producers to customers. Cargill’s partnership with the federal government, Nestlé and the National Fish and Wildlife Foundation will invest a total of $30 million over the next five years.
“We believe beef can be a force for good,” as the company works to cut greenhouse gas emissions 30% by 2030 through improved grazing management, feed production, innovation and reduction of food waste, Kabat said.
Cargill’s RegenConnect also compensates farmers for adopting regenerative agricultural practices such as no-till and cover crops. Since 2019, it has invested $7 million in cash payments, with 1,000 farmers participating on 625,000 acres in 15 states.
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Kabat is excited about the future of Cargill's beef protein business both domestically and around the world. “If you think about the 90 million people that we feed every day, that’s about 600 trucks of protein every day,” he said.
Although the company has invested in alternative meat options, it represents a very small part of world protein demand, and he has seen demand in that category starting to drop off. “We want to be non-judgmental about meeting that consumer need,” he said as the company works to better understand changing market dynamics.
“In the meantime, we’re going to focus on the 90 million that really are the core of our business,” he said.
Cargill is also trying to reimagine how it runs its operations by offering increased wages, additional benefits, bonuses, transportation and housing, and childcare and medical care offered on-site. They have partnered with community organizations to solve issues and bring new housing and childcare into communities that need it where their facilities operate.
“As we continue to navigate new and existing global economic headwinds, we can and must reimagine what's possible for our food system,” he said.
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