The Friday Report Blog: December 1st, 2023

Empowering Small Businesses: U.S. Government’s New Supply Chain Tactic

Susan Helper, renowned for her expertise in supply chain economics, is contributing her extensive knowledge to enhance the U.S. supply chain as a Senior Advisor at the White House Office of Management and Budget. Her approach is centered on leveraging the United States’ significant purchasing power to support small manufacturers and strengthen the overall supply chain.  

Helper has identified key strategies for invigorating manufacturing, particularly in semiconductor and clean energy sectors. These include creating clear demand signals, fostering communication between stakeholders, and effectively utilizing the U.S. government’s role as a major purchaser. Notably, her efforts have led to a marked increase in U.S. manufacturers for essential items like EV charging infrastructure.  

Furthermore, initiatives like AM Forward are encouraging small manufacturers to adopt advanced technologies like 3D printing, addressing supply and demand challenges in innovative sectors.  

Helper’s approach also emphasizes modeling excellent procurement practices, such as ensuring prompt payment to suppliers, which has proven beneficial for small manufacturers. By adopting these strategies, the U.S. is poised to significantly improve its supply chain resilience and efficiency, reinforcing the economy and supporting small businesses. 

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Cargill’s Pioneering Move to End Deforestation in South America by 2025 

Cargill, a global leader in commodity trading, has announced an ambitious plan to end deforestation and land conversions in key South American regions by 2025. This initiative, focusing on Argentina, Brazil, and Uruguay, aims to enhance supply chain traceability for crops like soy, corn, wheat, and cotton using advanced geospatial technology from the World Resources Institute. This effort aligns with Cargill’s broader goal of eradicating deforestation from its supply chains by 2030, recognizing that a significant portion of its environmental impact stems from land use changes.  

To comply with the European Union’s stringent deforestation law, Cargill has intensified its traceability measures, including GPS polygon mapping, to monitor forest cover changes on supplier farms. This technology has already been successfully implemented in Brazil and recently in Argentina, Bolivia, Paraguay, and Uruguay.  

Cargill’s renewed commitment to sustainability aims to protect native vegetation and promote sustainable agriculture in regions that constitute a significant portion of the world’s row crop trade and production. According to Pilar Cruz, Cargill’s Chief Sustainability Officer, this accelerated commitment demonstrates the company’s dedication to making substantial progress in combating deforestation and land conversion, while also supporting the livelihoods of farmers and agricultural communities essential to global food supply. 

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Egg Price-Fixing Case: Nestlé and Kraft Score Major Legal Victory 

In a landmark decision, a jury unanimously found that several major egg producers engaged in price-fixing between 2004 and 2008. This ruling marks a significant win for food industry leaders like Kraft Heinz and Nestlé. The lawsuit, initiated in 2011 in the Northern District of Illinois, accused egg producers Cal-Maine Foods, Rose Acre Farms, and industry groups of conspiring to artificially reduce hen supply, leading to higher egg prices and impacting the financials of these food giants. The jury concluded that this scheme lasted for four years, ending in 2008. 

Attorney Brandon Fox, representing the food companies, hailed the verdict as a first-time accountability for these antitrust violations. Cal-Maine Foods, the largest egg producer in the U.S., emphasized its commitment to hen welfare and stated its intent to challenge the presented damages and consider appeal options. The final determination of damages payable to the victorious companies is set for November 29. This case resolution follows heightened scrutiny of egg industry concentration and pricing, particularly in light of Cal-Maine’s significant profit increase in 2022 due to rising egg prices amidst bird flu concerns. Rose Acre Farms has stated it will reserve comments until the trial’s conclusion. 

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