Burgers and US Prisons

All eyes were on McDonald’s as earnings calls for the big food companies continued this week. Elsewhere, climate change is no longer an eventuality. It’s here. Let’s dig in.

This week:

⛏️ Slavery takes a different form in US prisons.

🍚 Rice supplies are taking a beating in India and Spain.

🚜 Farmers in Europe get a HUGE win.

🍔 McDonald’s gets worried about its earnings report.

🧼 A woman makes soap out of cooking oil in Bolivia…

SUPPLY CHAIN
HORROR IN US PRISONS

After a two-year-long investigation, the Associated Press (“AP”) has found that incarcerated individuals in the US have produced hundreds of millions of dollars’ worth of agricultural products for the biggest food companies in the country.

According to the data, US prisons have sold $200 million worth of vegetables and livestock to businesses over the past six years. And this doesn’t include tens of millions more in sales to government entities.

For those of you wondering, the companies buying goods - farmed by American prisoners - include: McDonald’s, Cargill, Whole Foods, Costco, Domino’s, Aldi and PepsiCo. And the list goes on.

Worse still, prisoners rarely get paid and are rarely given a choice to work. In fact, many prisoners work on the same soil where slaves harvested cotton, tobacco, and sugarcane more than 150 years ago.

ZOOMING OUT: As a result, these huge companies regularly violate their own policies on using prison labour, while posting combined annual revenues of $400 BILLION+.

And while some government officials support this very LEGAL operation, an increasing number of critics argue that this is simply slavery…again.

CLIMATE
RICE IS STRUGGLING

Drought and excessive climate regulation have damaged rice stocks and made prices for the popular commodity soar this year.

In India, El Niño - a weather phenomenon marked by irregular rainfall patterns - has repeatedly threatened rice yields. The country is now exporting half the of rice it did a year ago and basmati rice now costs a record $950-1800 per tonne.

Spain has a different rice problem. Due to new EU regulation - which banned the use of certain pesticides - a deadly fungus that thrives in heat has cut the country’s paella rice harvest in half.

ZOOMING OUT: Add to all of this wars in Ukraine and the Middle East and you get a world in which trading rice is extremely difficult. One thing is for sure, though. Climate change has arrived and is making food shortages much more noticeable.

POLICY
FARMERS WIN AGAINST EU

Earlier this month, farmers across Europe took to the streets to protest the EU’s incredibly harsh environmental regulation. And last week, it looks like the farmers came away with a win.

The European Commission has now abandoned targets for the agricultural sector in its roadmap to cut greenhouse gas emissions by 90% by 2040 and will scrap plans to halve pesticide use.

On top of that, new proposals to improve the treatment of animals being transported to market, slaughter houses, or overseas are now likely to be delayed until June.

ZOOMING OUT: While the EU has yielded, admitting that there aren't enough sustainable farming tools in the agriculture industry, many critics still point out that these “short-term concessions” will only cause harm for “long-term food security”.

Achieving a balance between realism and necessity for the environment will be crucial in the coming months. 

BUSINESS
MCDONALD’S ON THE ROPES?

It’s been a massive week for McDonald’s, which released its latest quarterly earnings. The results? Not bad. Both revenue and net income increased, compared with the same time last year.

But worries remain. Earnings fell below expectations as sales in the Middle East took a beating after the company received backlash for its stance on the Israel-Palestine conflict. The falling share price is also a red flag.

Not to mention that increasing menu prices, by around 10% in the US in 2023, has been a big reason for the company’s relatively successful quarter. But how long can that last?

ZOOMING OUT: McDonald’s CEO, Chris Kempczinski, says the main focus will be on “that low-income consumer”. But with beef prices rising at the moment and sales suffering recently, this may be harder said than done.

THE BRIGHT SIDE
BOLIVIAN SOAP MASTERY

In one hell of a heart-warming story, Silveria Cutipa Pari - an indigenous woman from Bolivia - makes soap out of used cooking oil.

An industrial chemist by trade, Silveria realised that few people in her community understood how improper disposal of cooking oil can cause all kinds of damage, from clogging up dishwashers to destroying pipes.

Silveria frequently notes that “one litre of oil can contaminate thousands of litres of water”.

So, since 2014, she’s been collecting cooking oils from restaurants and recycling them to make rosemary-infused dishwasher tablets, coconut body wash soap, and much more! Food Jungle approved ✅

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BEFORE YOU GO…

• Food retailer – Kroger – announces that Chief Accounting Officer, Todd Foley, will step in as acting CEO.

• The Spanish government aims to spend around $2.6 BILLION to end their dependency on rain.

• The Spanish government is looking to invest $502 million in desalination plants in Catalonia.

• The cost of sugar has risen to its highest levels since 2011.

• 9,500 people waited for a New York food truck permit in January of this year.

TAKE A BREAK

If you’re interested in some quality ORIGINAL journalism on what’s been going on in the food industry, look no further than Green Queen.

Founded in 2011, by Sonalie Figueiras, the team looks to analyse and discuss the latest news in food, from cultivated meat to food waste. Thoroughly recommend! 🤩