“By increasing our production capacity, we have been able to supply many more distributors, who are fond of our high‑quality product,” said Dany Deshaies, CEO of Sherbrooke-based SoyXpert Inc in a federal news release today.

SoyXpert was founded in 2019 and uses traditional Japanese techniques to produce its certified organic, firm tofu, its website said. It received the $400,000 “repayable contribution” through Canada Economic Development for Quebec Regions (CED), the news release said.

It recently built a new production facility and installed digital equipment, including a highly automated production line, which has allowed it to increase production and develop its flagship product ‘Soykei,’ the release added.

Quebec is home to multiple producers of the soy-based curd product, including Soyarie, Horium Foods Inc., and Unisoya.

Even so, local manufacturers haven’t always been able to meet demand in the province.

In early 2019, La Presse reported that Unisoya, unable to fill all customer orders, had voluntarily stopped selling to Costco. It was in the midst of expanding its facility.

At the time, Soyarie reported a 25 per cent or more increase in sales over the past few years, the La Presse report said.

The report attributed the increase in tofu demand to factors like the rising cost of meat, interest in reducing meat consumption for health and environmental reasons, and rising interest in vegetarianism.

In 2019, Quebec residents were more likely than other Canadians to eat tofu.

“In fact, 26 per cent of Quebecers will eat tofu on a regular basis versus 16 per cent in the rest of Canada,” said Sylvain Charlebois, professor of food distribution and policy and Dalhousie University, in a Jan. 31, 2019 report from CTV.

At the time, the province was experiencing a shortage of tofu.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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The group on Wednesday reported a jump in annual net profit to $1 billion, joining other global crop merchants in benefitting from high prices and strong demand in a year marked by Russia’s invasion of fellow grain exporter Ukraine (all figures US$).

LDC wants to accelerate capital expenditure, including on “complementary” acquisitions, to between $800 million and $1 billion annually during the rest of this decade, CEO Michael Gelchie said in an interview.

That compares with 2022 investments of $549 million, which already marked a rise from $372 million the prior year.

“That can and should be in the form of greenfield or brownfield or M+A-type investments (…), whether that’s core merchandising or in innovative business that really diversifies our portfolio,” Gelchie said.

Last year’s investments included the acquisition of Australia’s Emerald Grain. The deal price was about $102 million, subject to closing adjustments, LDC said in its annual report.

Improved results and the sale of a stake in 2021 to Abu Dhabi holding firm ADQ have eased pressure on LDC and main shareholder Margarita Louis-Dreyfus after years of modest profits and mounting debt.

Like its peers, LDC has been developing food ingredients activities, including plant-based proteins, to tap into consumer trends and be less reliant on commodity markets.

The group announced in December the creation of a food and feed solutions division.

Gelchie declined to give an outlook for LDC this year but said turmoil in the banking sector and rising interest rates may increase market volatility further.

Higher interest rates could dampen commodity demand and prices in the near term, though the longer-term outlook for commodities appeared bullish given an energy transition that has already boosted oilseed crushing margins for renewable fuel in North America, he added.

Regarding upheaval in the banking sector, Gelchie said LDC had no exposure to Credit Suisse and had “secure relationships” with its banks.

He declined to comment on any exposure to Credit Suisse for chairperson Louis-Dreyfus, whose holding firm had a reduced loan arrangement with Credit Suisse worth around $240 million as of September 2021.

— Reporting for Reuters by Gus Trompiz in Paris.

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The new unit will focus on developing LDC’s presence in the lecithin, glycerine and specialty feed protein areas, it said in a statement, adding it was well placed to scale up in the nature-based ingredients market, including via targeted acquisitions.

Chief commercial officer James Zhou will lead the new business, LDC said.

“We expect the new Food and Feed Solutions Platform to become a solid base for the execution of LDC’s strategy to diversify revenue streams by transforming or upcycling agri-commodity by-products into value-added products and solutions,” Zhou said in the statement.

The group will draw on its existing portfolio in the processing of oilseeds, oils and fats, he added.

The push into specialized ingredients by international merchants was encouraged by shrinking margins in the past decade for selling and shipping crops, although profits have rebounded as the COVID-19 pandemic and the war in Ukraine have fuelled market volatility.

— Reporting for Reuters by Gus Trompiz and Sudip Kar-Gupta.

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But Cargill also faced various headwinds across the company — particularly in its protein and food ingredients units, both of which have been strategic growth areas.

“Solid” oilseed processing results in canola, soybeans and biodiesel in North America and Europe, and improved performance in its Asia-Pacific trading business helped bolster Cargill’s fiscal first-quarter results, the company said in a statement.

Processors including Cargill have benefited from increasing global demand for soymeal and from soybean prices being near 11-year lows.

The privately-held company said on Thursday net income rose to $1.02 billion in the first quarter ended Aug. 31, from $973 million a year earlier (all figures US$). Operating earnings fell to $883 million from $888 million a year earlier while revenue rose five per cent to $28.7 billion.

But gains in oilseed processing and Asian trading could not completely overcome turbulence in other parts of the company.

Weak North American ethanol prices and devaluations in emerging market currencies dented results for starches, sweeteners and texturizers.

Lower sales and higher input costs weighed on its animal nutrition unit, while a glut of turkey meat in the United States outweighed demand and pressured prices. Its global poultry business was hurt by weak results in Southeast Asia and Central America.

The Wayzata, Minn.-based company last week recalled 132,000 lbs. of beef over possible contamination and is being investigated by U.S. officials after 17 people fell ill and one died.

Higher interest costs and recessionary events in Argentina caused certain Cargill investments to decline in value, the company said.

There is also mounting uncertainty over the U.S.-China trade war’s possible impact on the global grain trade. China said it will switch up its animal feed rations to no longer rely so heavily on U.S. soy.

Cargill, which reported its highest-ever adjusted operating earnings in the most recent fiscal year, has weathered the trade war in recent quarters better than some of its rivals.

Bunge earnings last quarter stumbled to a surprise loss it blamed partly on wrong-sided bets that a prompt trade truce would lift soybean futures.

And Louis Dreyfus announced this week its CEO and finance chief quit in the French company’s latest shake-up.

— P.J. Huffstutter reports on agriculture for Reuters from Chicago; additional reporting by John Benny in Bangalore.

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The privately held company has been streamlining its operations to focus on higher-margin businesses such as food ingredients and fish feeding business, aiming to bolster earnings and capitalize on consumer trends. The efforts have lifted results in recent quarters, according to Cargill.

“We had strong results this quarter across our segments, evidence that we are on the right path forward,” CEO David MacLennan said in a release.

Cargill said adjusted operating earnings rose 50 per cent to $715 million in the third quarter ended Feb. 28, from $476 million in the same quarter a year earlier (all figures US$).

Excluding one-time items, net income climbed to $650 million from $459 million a year earlier, while revenue rose eight per cent to $27.3 billion.

Food ingredients and applications results outperformed the previous year on improvement in global sweeteners and plant-based industrial products in North America.

Cargill’s animal nutrition and protein unit also topped last year’s weak third quarter as strong North American demand for beef and improved poultry sales in Europe and Southeast Asia bolstered results.

However, lower feed ingredients sales in South Korea, where avian influenza has wiped out thousands of poultry flocks, as well as in Russia and China dampened earnings.

Profit declined in the company’s origination and processing segment, which makes money buying, selling, storing, shipping and processing crops.

Slow crop sales by farmers in Argentina and drought-reduced corn exports from Brazil weighed down profits, offsetting gains from robust grain exports from the U.S., where farmers harvested record corn and soybean crops last autumn.

Rebounding ocean freight rates and stronger year-on-year energy and metals markets helped reverse last year’s third-quarter loss for Cargill’s industrial and financial services unit.

— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago.

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Finance Canada is set to lead the talks promised in last month’s federal budget.

The budget proposed removing tariffs on ingredients, except dairy and poultry, to make food processing in Canada more competitive internationally, the government said in the budget, noting the move will support investment and jobs in the sector.

“There are more than 6,000 food-manufacturing facilities in the country and they have particular concerns,” Carla Ventin, Food & Consumer Products of Canada’s vice-president of federal government affairs, said in an interview. “They want to have time to be able to make a careful analysis of the department’s proposal.”

Chris Kyte, president of Food Processors of Canada, said his organization, which represents small- and medium-size processors, has heard nothing from the department since the March 22 budget release. It’s not clear whether this initiative will apply just to ingredients not produced in Canada.

So far, Finance is being mum on its plan. A department spokesperson said the consultations will be launched “in the near term” and a detailed list of products of proposed products will be published in the government publication Canada Gazette then. Proposed tariff elimination will apply to the Most-Favoured-Nation (MFN) rates of customs duty of identified goods, covering imports from all countries, she said.

Usually the government posts specific regulatory changes in Part 1 of the Canada Gazette with either 60 or 90 days allocated to consultation. Then it takes the information received during the consultation and creates a final policy, which is made public later in Part 2 of the Canada Gazette.

As part of its sweeping overhaul of food safety regulations, the Canadian Food Inspection Agency entered consultations in advance of posting proposed changes in the Gazette. The entire food chain has been involved in that exercise.

The budget said food processing is “Canada’s largest manufacturing employer and an important contributor to Canada’s economy.”

That recognition is likely the results of the industry explaining its activities and operations to federal officials during meetings of Agriculture Canada’s food-processing roundtable, Ventin added.

“The government has already cut tariffs for equipment and manufacturing equipment; now we need the same for ingredients,” Ventin said.

Processors have identified access to competitively priced inputs as a key barrier to growth, she noted. Currently 57 per cent of agricultural goods are still subject to tariffs at an average rate of approximately five per cent.

“Since very tight margins exist in food manufacturing, certain tariff reductions could allow Canadian food and beverage manufacturers to lower their non-recoverable production costs, increase the competitiveness of their operations and enhance their ability to compete in domestic and foreign markets,” Ventin said.

The food-processing sector employs 300,000 Canadians and generates nearly $29 billion annually to Canada’s GDP — more than the automotive and aerospace sectors combined, FCPC says.

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The privately-held company is exiting lower-margin operations, including its U.S. pork business, and expanding deeper into food ingredients and aquaculture to capture higher margins and capitalize on consumer trends. It is also in the midst of a corporate restructuring.

The refocus has begun to add to the bottom line, according to Cargill. The company did not give a detailed earnings outlook.

Several years of expanding global production have sent world grain stocks to historic highs and dragged prices to near five-year lows.

“Barring weather events, we don’t anticipate a near-term improvement in market conditions for agriculture. In these kinds of cycles, and we’ve been through them before, we focus on the levers under our control,” CEO David MacLennan said in a statement.

Although cheap grain allows Cargill and competitors including Archer Daniels Midland and Bunge to buy grain at lower prices for processing and export, low price volatility has hurt their grain trading units.

Cargill said net earnings rose eight per cent to $459 million for the fiscal quarter ended Feb. 29, from $425 million a year earlier (all figures US$). Revenue fell 11 per cent to $25.2 billion.

It said its food ingredients unit outperformed last year’s weak third quarter, noting stronger profits in edible oils, sweeteners and other ingredients.

Origination and processing earnings also increased on good oilseed processing margins. Higher corn exports from Cargill facilities in Argentina after the country enacted export reforms late last year partly offset a slowdown in U.S. shipments.

“Their origination and processing earnings have held up so far. We are expecting weak industry fundamentals there, particularly in oilseed processing and that might start to impact those earnings more meaningfully in the upcoming quarters,” said Chris Johnson, analyst with Standard + Poor’s.

“But at the same time, the company has made some recent acquisitions that will start flowing into their earnings, so that will be a bit of an offset.”

Struggles in the beef business dragged down earnings in its animal protein unit, as a strong dollar dented U.S. exports, while cheap pork and poultry weakened retail demand for beef.

Industrial and financial services followed a break-even second quarter with a loss as record-low ocean freight costs hurt transportation results and low oil prices dented energy trading.

— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago.

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The Minnesota-based company’s grain and oilseed supply chain and energy businesses were standouts in the quarter ended Aug. 31, in stark contrast with several rival agribusinesses that have struggled in the commodities market downturn.

Cargill, which holds major stakes in Canadian grain handling, beef packing and food processing, reported net earnings of $512 million for the fiscal first quarter, compared with a profit of $425 million a year earlier (all figures US$). Revenue declined 17 per cent to $27.5 billion, from $33.3 billion.

“Our team ably navigated the quarter’s weather-driven agricultural commodity markets, as well as the effects of more volatile emerging markets, currency fluctuations and other macroeconomic uncertainty,” CEO David MacLennan said in a release.

Cargill’s origination and processing unit, which buys, sells, stores and processes crops such as corn and soybeans, was its largest contributor in a quarter marked by falling prices and tepid global demand.

Soybean processing profit strengthened amid bumper crops in North and South America, Cargill said.

Rival agribusiness Louis Dreyfus Commodities last week said first-half profit fell by half due to falling commodity prices and faltering growth in major markets such as China and Brazil.

Archer Daniels Midland and Bunge, which along with Cargill and Dreyfus are known as the “ABCD companies” that dominate global grain trading, report results in the coming weeks.

Results were down in Cargill’s animal nutrition and protein segment as high cattle and beef prices steered consumers to cheaper pork and poultry. The company sold its pork business to meat packer JBS this summer.

Cargill’s food ingredients segment also posted lower quarterly results, pressured by weak profits in sweeteners and starches, which slumped amid historically low sugar prices, the company said.

Lower operating earnings after the closure of its hedge fund arm Black River Asset Management this summer weighed on results in Cargill’s industrial and financial services segment, only partly offsetting stronger returns in energy trading.

— Karl Plume reports on agricultural commodity markets for Reuters from Chicago.

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The company rolled out a month-long advertising campaign this week with commercials featuring empty containers for its most popular menu items with the slogan “not without Canadian farmers.” Television and online commercials link consumers to its Our Food Your Questions website.

The campaign emphasizes that it buys the ingredients for items such as the Big Mac, Egg McMuffin and McFlurry, from Canadian producers — and in whopping big quantities.

“We spend almost a billion dollars on food ingredients every year in Canada alone,” Sherry MacLauchlan, the company’s director of government relations said in an interview Sept. 11. “Over 85 per cent of those purchases come from Canadian suppliers… so a large majority of our expense for food is domestic.”

Every year, McDonald’s Canada buys 143 million pounds of potatoes, many of which come from Manitoba, 52 million pounds of chicken, and 24 million litres of real milk and cream.

“We are the largest purchaser of ground beef in the Canadian restaurant industry,” MacLauchlan said, noting its purchases amount to 67 million pounds of ground beef.

As for eggs, it buys 120 million fresh eggs, 76 million of which go into its Egg McMuffins.

Pork is notably absent from that list. MacLauchlan said for some ingredients, purchases are made on a North American scale to take advantage of economies. For other food ingredients, such as lettuce and tomatoes, the company sources outside of Canada to maintain a consistent supply through all seasons as well as to meet specifications, she said.

However, she said its purchasing practices are under constant review to see whether more can be done locally.

“We’re really proud of our long-standing commitment to sourcing our ingredients right here in Canada, where ever possible,” she said.

MacLauchlan said the company wants to raise awareness among its customers that most of what they are eating when they go to McDonald’s comes from Canadian farms. “We have this longstanding commitment and history around sourcing our food ingredients in Canada. It is something we feel very strongly about as a Canadian company, but we realized we haven’t been telling the story.”

But she noted the company also wants farmers to know it listens to its customers. “We have the benefit of having a direct relationship with Canadian consumers — three million a day visit our restaurants,” she said. “And we can bring that back to the food value chain and all of the players in the chain and tell them what customers think.”

While consumers generally think highly of Canadian farmers and have confidence in the quality and safety of Canadian foods, they are increasingly interested in where the food is coming from, and how it is raised and processed.

McDonald’s has been working with the Canadian beef sector to identify and benchmark sustainable production practices. It has also just announced that over the next 10 years, it will move towards sourcing all of its eggs from cage-free operations.

“The eggs is a very good example — the public generally is very supportive of those kinds of measures,” she said.

Calla Farn, vice president of government and public relations for McCain Foods Canada, said her company is also conscious of its reliance on farmers for its success.

“Some of our farmers have been growing for McCain for three generations,” she said. “We are proud to support McDonald’s Canada in their effort to thank Canadian farmers.”

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The Manitoba Agri-Health Research Network (MaHRN), in partnership with Minnesota-based Step One Foods, leads the study, funded by Manitoba Jobs and the Economy.

Research kicked off last week when clinical teams met for the first time to determine the criteria for participants, talk details and outline a timeline. Research will be conducted in Manitoba at MaHRN and in Rochester, Minnesota at the Mayo Clinic.

Researchers begin recruiting and screening participants late fall or January at the latest.

Twenty-four participants, at risk for diabetes, will add the products, including carrot powder, pinto bean flour, saskatoon berry powder and pulse puffs, to their diet for 12 weeks while researchers monitor the effect. Twenty-four participants will take placebos.

“If the products can keep the blood glucose lower for more parts of the day, we expect to see less sugar molecules attached to the hemoglobin,” said Dr. Carla Taylor, the lead investigator on the trial.

People with prediabetes have more sugar molecules attached to the hemoglobin, meaning their overall blood sugar level is not in the normal range. They do not have diabetes, but have an increased likelihood of developing the disease.

• More on health from Country Guide: Maintain your mineral levels

The Canadian Diabetes Association estimates around 5.7 million Canadians have prediabetes. Nearly 50 per cent of people with prediabetes go on to develop Type 2 diabetes. Heart disease and nerve damage may occur during prediabetes.

“The hypothesis is that after week 12 we will have lowered the amount of blood sugar in (a participant’s) system,” said Lee Anne Murphy, executive director of MaHRN. “If you can slow that progression of sugar buildup or delay it, they may never become a Type 2 diabetic or we may delay the time until they are.”

MaHRN is a non-profit organization that develops food and food ingredients from Manitoba-grown and -processed crops. Murphy hopes the study, if successful, will generate more interest, perhaps even internationally, in Manitoba products.

“The fact that we’re working with Minnesota and the Mayo Clinic and its breadth of both world-class infrastructure as well as exposure to different patients, we’re thinking we’re going to demonstrate that Manitoba-grown and -processed ingredients can be effective in the health-care system.

“You can see where the value back to our growers really should be quite impressive,” she said. Current partners include the Manitoba Pulse Growers Association, Interlake Saskatoons and the Vegetable Growers Association of Manitoba.

Murphy met Elizabeth Klodas, co-founder of Step One Foods, at a conference several years ago. Klodas introduced herself after hearing Murphy speak about the health properties of Manitoba products. Over the past several years the two kept in touch and eventually decided to work together.

Klodas, also a cardiologist, said the study aims to improve people’s overall health and how people think about health.

“If I put someone on enough medications I can make anyone’s cholesterol profile perfect,” said Klodas. “But if all they’re eating is Twinkies I haven’t really made them any healthier.

“This (study) is really about impacting health in a really practical way.”

The results will be released sometime in 2016. Products are already commercially available through Step One Foods.

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