The following report is by Agfunder News:
- Global investor network FAIRR warns that climate-related costs could “wipe out” profits for half of the world’s largest livestock companies “unless new strategies are urgently adopted.”
- FAIRR’s Climate Risk Tool estimates a $23.7 billion total decrease in earnings before tax in 2030 compared to 2020 levels for 40 of the world’s largest livestock producers.
- The decrease would push 20 of those producers — including JBS, Tyson, Cal-Maine and WH Group — into net operating losses.
- Climate-related cost increases for livestock companies will come from higher feed prices and expected carbon taxes, according to FAIRR’s analysis. While no country has imposed a carbon tax on agriculture emissions yet, carbon-pricing mechanisms for emissions in other industries have become more popular; New Zealand is one of the first countries to propose an ag emissions tax.
Why It Matters:
In partnership with scientists from the Intergovernmental Panel on Climate Change, FAIRR has modeled various climate impacts like agricultural productivity in line with a 2°C global temperature rise by 2100.
Climate change will impact crop production, which will contribute to higher feed prices, says FAIRR. These price hikes will account for 5% of the cost rise for livestock companies; expected carbon taxes on emissions from livestock production will make up 4% of the cost rise.
- North American-headquartered Tyson Foods could see profits fall by over $4.3 billion in 2030 compared to 2020. In this scenario, the company would operate at a net loss compared to 2020 levels with a profit margin of negative 0.9%.
- US-based egg producer Cal-Maine would take a $354 million hit to profits and see a profit margin of negative 13.1%.
- In Brazil, beef supplier JBS would see profits fall by $5 billion and be operating at a negative 0.3% profit margin.
- Chinese pork producer WH Group would see profits reduced by $2.5 billion, with a negative 2.7% profit margin.
FAIRR says this scenario is “realistic” given IPCC’s recent reporting that global temperatures “are likely to reach 1.5C above pre-industrial levels in the near-term, with carbon emissions continuing to rise.”
All of this translates to potential price hikes for millions of customers and consumers, since these companies supply the bulk of the world’s animal protein. For example, JBS says it can process more than 200,000 cattle, 500,000 hogs, 45 million chickens and 80,000 small stock (e.g., lambs, goats, etc.) per week.
FAIRR’s model highlights companies’ potential to offset these cost increases with climate mitigation strategies. As yet, just 11 of the 40 companies named in FAIRR’s analysis have publicly disclosed how they plan to mitigate risk. A mere six of those 40 companies have published a climate scenario analysis, which is “widely regarded as a useful tool for planning effective climate risk mitigation strategies.”
Future profitability, not to mention consumers’ grocery bills, relies on these companies’ ability to mitigate these risks — sooner rather than later.
AUTHOR COMMENTARY
I mention this because, while I do not buy all the bogus “science” claims, it is no secret to anyone that does a modicum amount of homework, will realize that these green policies are insanely expensive for everyone, including the companies. Therefore, these costs will be passed onto the consumer via built-in price rises and/or green and carbon taxes.
And at the end of the day, these green agendas are worse off for the environment and us.
In truth, if people wanted to actually make a difference and genuine change, they’d have to go backwards, but we all know that’s not going to happen.
Thus saith the LORD, Stand ye in the ways, and see, and ask for the old paths, where is the good way, and walk therein, and ye shall find rest for your souls. But they said, We will not walk therein.
Jeremiah 6:16
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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