Monthly Archives: April 2023

Little bit new, little bit Dé-jà vu – PA Senate Ag hearing digs into ABC’s of milk OOP

Posted on by
Reply

Data and reform needed, but is Secretary eyeing portion of estimated $30 million-plus for ‘dairy reinvestment’?

By Sherry Bunting, Farmshine, April 27, 2023

HARRISBURG, Pa. – Little bit new, little bit Dé·jà vu. (That’s French for ‘the feeling of having experienced this situation before.’) 

Those first thoughts came to mind listening to the Pennsylvania Senate Ag Committee’s hearing Tuesday (April 25) on reforming the state’s mandated over-order premium (OOP) that is part of the state’s minimum wholesale and retail milk prices, set by the Pennsylvania Milk Marketing Board (PMMB).

Ag Secretary Russell Redding laid out for state lawmakers the Department of Agriculture’s plan to seek reforms that: 1) uniformly and fairly distribute the OOP, 2) ensure the amounts charged to Pennsylvania consumers substantially equal amounts distributed back to farmers, and 3) uses a distribution system that does not have incentives to avoid paying Pennsylvania producers by selling milk from across state lines.

He said the Department is a “reluctant participant” but sees the need to make the “collective case” for the “composite of Pennsylvania Dairy.”

“We believe there are inequities, and we see division and growing farmer mistrust,” said Redding. “We knew there were data gaps in our petition last year… Think about the OOP as an equation: A + B = C.

“What we know today is that of the $23.6 million in OOP collected by processors in 2022, $14 million was required to go back to farmers. That’s A. 

“B is generated in the marketplace but not collected,” he explained. “Our belief is that this is another $5 to $10 million (annually). 

“C is the total that we believe is in the neighborhood of $28.6 to $33 million. The question is, what do we do about it?” he asked.

He answered to say the only way to fix this is to change the system and begin removing the OOP from the minimum price buildup and instead have the PMMB establish a retail-based premium, collected at that point of sale and remitted to the Department of Revenue into a designated fund.

This would require the legislation.

“The General Assembly could then appropriate direct payments to producers and to reinvestment in dairy processing,” said Redding.

The Secretary called it an “embarrassment that we don’t have this number (B)” to complete the A + B = C equation, but as he talked about the PDA’s plan, we heard articulated for the first time this idea that once numbers can be put to the equation and legislative authority for the Board to devise a formula, the OOP could become a “milk tax.” 

The difference being that many consumers don’t know they are already paying the OOP, but when pulled out of the minimum price buildup, it becomes a known quantity.

“We trust the state to do this with liquor, cigarettes and liquid fuel. The legislature could decide how these funds would be used, and a portion could be used to help processors invest or reinvest,” said Redding.

In fact, Zach Myers for the Center for Dairy Excellence said a study is underway to assess the obstacles that are preventing processing investment and reinvestment in Pennsylvania.

PMMB Chairman Rob Barley noted that, “It’s certainly time to evaluate how the OOP dollars get back to farmers and not pick winners and losers. The over $800 million that has gone back to dairy farmers since 1988, especially when the majority of it did, no doubt made a positive difference, but that is changing,” he said. “Fluid milk sales have dropped in half (since then), and it is difficult to account for the dollars with the current tools that we as a Board have.”

Barley noted that if the process moves forward to reform the structure, perhaps other products could be eventually added.

“Right now we don’t have the authority to do any of this. Going back to the 1988 testimony, the primary reason the over-order premium was added (to Class I) is that was the practical point, that was the mechanism already in place for fluid milk. There is no such system for other classes, and Class I is also more of a localized product, which I think is still true today,” Barley explained.

Going forward, he said, the choices for the Board are “to get rid of what we have, which is a choice many are not in favor of, or to have legislation to change the OOP without violating interstate commerce, or to develop a new system that strengthens the Pennsylvania dairy industry to benefit all sectors.”

Redding stressed the point that, “This is all about the dairy farmer, how do we incentivize what we need? Keeping our eye on the farmer and understanding we can do something extraordinary here, we have this opportunity to extract this premium from the marketplace and get (the OOP) back to farmers and for the purposes of reinvestment…”

That’s the New. Now for the Dé·jà vu…

The next thought to emerge in this reporter’s mind after hearing the new twist on OOP as ‘milk tax’ and a portion for ‘reinvestment’ was this: Everyone is at the table now, sitting up, alert, paying attention, and offering solutions after 15-plus years of meetings, hearings and discussions. But the same bottomline emerges: everyone still wants a dip of the farmer’s elusive cream.

Not 15 minutes later, after PMMB board member Jim Van Blarcom testified, his Senator Gene Yaw of the northern tier counties shared a similar thought about how this may be already happening within the minimum price buildup in a rapidly changing industry.

“We made this so complicated and there are too many fingers in this pie, frankly,” said Yaw, asking whether processors get any of this money, now.

PMMB auditor supervisor Gary Gojsovich answered that the OOP is currently collected by processors through their sales, and they pay it back to Pennsylvania producers only when the milk is produced, processed and sold in Pennsylvania, all three must apply.

“In the simplest terms, it sounds like we need to change how the premium is collected and the point of where it is collected,” Senator Yaw responded.

Senator Judy Schwank representing parts of Berks County said: “We need the data. We have to have the data.”

So, we are back to the data. 

The Secretary called it an “embarrassment that we don’t have this number.”

Chairman Elder Vogel and ranking member Schwank said they plan to reintroduce their bills that did not move forward in the last legislative session that would give PMMB authority to license distributors, a move that would account for all packaged milk sales coming into Pennsylvania from out-of-state and other cross-border transactions, which ‘strand premiums.’

A quick history

For decades, there have been meetings and hearings and discussions about the future of the Pennsylvania Milk Marketing Law and the PMMB that sets minimum wholesale and retail milk prices. The law dates back to the 1930s, but the mandated OOP was introduced to the existing structure during a year of drought and high feed prices in 1988.

At that time, the state’s OOP was set by the Board at $1.05 per hundredweight (9 cents per gallon). Today it is $1.00 plus a 50-cents per hundredweight fuel adjuster (combined is 13 cents per gallon). 

At intervals before 2018, the OOP was as high as $3.00 plus a fuel adjuster (over 26 cents per gallon). In 2017, it was nearly $2.00 (17 cents per gallon), but was abruptly cut in half in December of 2017 due to the pressure of out-of-state milk — a harbinger of things to come just four months before Dean Foods announced it was ending contracts with 130 dairy farms in 8 states, 42 of them in Pennsylvania and five months before the startup of the Walmart bottling plant in Indiana.

Also included in the minimum resale and retail milk price buildups are the Federal Order price benchmarks, which vary geographically because Pennsylvania is split between two different Federal Orders. To this minimum federal benchmark price, the OOP is added, translating now to about 13 cents per gallon. 

Also added are the average cost recovery amounts for bottlers and retailers as determined by annual hearings for each area of the state, along with adding the 2.5 to 3.5% profit margin the Milk Marketing Law guarantees milk bottlers and retailers on top of the average cost recovery.

What has come under fire, especially since 2009, is the producer OOP, how it is collected and passed back to farmers, how some of it is stranded and how the changing dairy industry has impacted the real and perceived equity of the distribution of these funds.

Lawmakers made it clear that they look at this as two distinctly separate things, the collection is one issue, and the distribution quite another.

Among those testifying, the amount of the current OOP at $1.50 including fuel adjuster that is received on their farms ranged from 6 cents to 50 cents.

The bottomline is for all of the PMMB’s efforts to expand communication and transparency with the tools available, even board member Van Blarcom conceded that it is becoming more difficult to justify the OOP to his peers.

For his part, Matt Espenshade, a Lancaster County dairy farmer representing the State Grange, told lawmakers that producers and cooperatives that are ‘in’ the Class I market take risks and have requirements other class markets do not experience. 

He cautioned against reforms that would dilute the premium for the 15 to 20% of state farmers currently receiving a meaningful amount because they have costs and risks associated with that reward.

Johnny Painter, a Tioga County dairy farmer testifying for the Pennsylvania Farm Bureau advocated for a uniform distribution of the OOP in reforms that would have the state collect it all. He said farmers in all classes of milk have the same quality standards to meet. 

When pressed by Senator Schwank on why PFB made policy to end the OOP, Painter said it was a tactic to get the dialog started.

Troye Cooper for the Pennsylvania Association of Dairy Cooperatives and a member services director for Maryland and Virginia Cooperative said those receiving very little OOP are part of the 3500 Pennsylvania dairy farms shipping milk through cooperatives that perform essential “balancing” services for the fluid milk market. As coop members, they share in the cost of that.

However, what remained unspoken in his testimony is that the current minimum wholesale and retail milk price buildups now include a roughly 25-cent ‘co-op procurement cost’ for these balancing services along with the requirement that cooperatives list on member milk checks how much of the producer OOP was included. 

Representing the Pennsylvania Association of Milk Dealers, Chuck Turner of Turner Dairy near Pittsburgh, pointed out that fluid milk sales are declining, and other class products are increasing. He asked how bottlers can continue cutting checks to the Federal Orders to bring up the payments for other class milk while reducing the payments to their own shippers when their own fluid milk market volumes are shrinking.

“The fluid milk business is in tough shape. Sales volume has trended downward for 13 years by more than 20%. That’s 1 gallon in 5 lost, 1 plant in 5 closed. It can’t bear the burden for the other classes. It seems particularly unfair with sales growing in the other categories,” said Turner, noting that plants outside of Pennsylvania have been closing “at an astonishing rate.” 

He said the number of independent milk processors in the U.S. fell from 69% to 44% in 2020, whereas in Pennsylvania, independent bottlers still represent 62% of the fluid milk, and he credited the PMMB system for that difference.

Myers noted that Pennsylvania is the state with the second most dairy farms and the fourth smallest average herd size, with production costs that are higher than in some neighboring states. 

He cited loss of market premiums, including quality premiums, the impacts of other price erosion such as Federal Order make allowances that a potential hearing could further degrade. 

Compared to the U.S. All-Milk price published monthly by USDA, Myers noted the Pennsylvania All-Milk price used to be higher than the U.S. average, but this gap has narrowed significantly in the past 15 years.

“It was $1.73 per hundredweight from 2008 to 2012, averaged $1.29 from 2013 to 2017, and in the last five years, it has narrowed to just 49 cents, on average,” said Myers.

In fact, during the pandemic in 2020-21, the Pennsylvania All-Milk price averaged 18 cents less than the U.S. All-Milk price, according to Myers.

“There are several factors for this narrowing, but it’s safe to say it can’t be fixed by increasing the premiums,” said Myers, noting that 80% of the milk produced in Pennsylvania is marketed through cooperatives, and there are cooperative base programs limiting expansion on Pennsylvania farms.

These coop base programs and penalties affect the dairy farms and are in part tied to the limits in processing capacity.

Meanwhile, there were several references by testifiers citing milk coming from New York into Central Pennsylvania for processing and sale and displacing milk produced in that area. The OOP, of course, stays with that retailer, processor and/or cooperative as part of their business model to expand their state’s markets into Pennsylvania so their producers can grow.

“When that premium goes back to New York, that’s exactly what is playing out, and it feels like an injustice to be asking our consumers to pay it without regard to that investment,” said Redding. “We want to capture that premium and put it back into our Pennsylvania dairy farmers.”

The problem, said Barley, is the PMMB can’t just “grab that money and give it to Pennsylvania farmers if the milk is not produced, processed and sold in-state without being challenged in court as in the past on the grounds of violating the interstate commerce clause.”

Senator Yaw interjected that, “If the milk is sold here, we should give the premium back to our farmers. If the milk came from New York, those farmers should not benefit from what we are doing to support Pennsylvania farmers.”

Redding said lawmakers “do not have to wait for the data. The bill on licensing distributors could go forward along with a bill to set up a structured system, assuming the amount to be around $30 million, and we believe it to be higher, to decide how to distribute that revenue.”

Redding said his fear is that as the frustration undertow grows, Pennsylvania will lose this premium without action.

He pointed out that his committee “kept its promise” to get everyone around the table to hear ideas, but that it will be “difficult to thread this needle and it will require collaboration.”

Ranking member Schwank said everything hinges on getting the data that is needed to know how to proceed.

Click to read Part Two.

-30-

Fire on Texas dairy killed 18,000 cows, ruled accidental

Posted on by
Reply
This still frame from drone footage of the 2,136,973 square-foot facility at South Fork Dairy shows the fire damage involved the entire roof of the cross-ventilated building. The Texas State Fire Marshal’s office is calling it accidental, indicating machinery malfunction as the cause and further investigation continuing. One employee remains hospitalized and 18,000 dairy cows are dead. Photo captured from drone video courtesy Blake Bednarz, West Texas Tech

By Sherry Bunting, Farmshine, April 19, 2023

DIMMITT, Texas — The Texas State Fire Marshal confirmed the April 10 catastrophic explosion and fire on a West Texas dairy was accidental, saying in its April 17 statement: “There was no evidence found that would indicate foul play.”

The explosion and fire occurred at South Fork Dairy near Dimmitt in Castro County, leaving one female employee still hospitalized for critical injuries and an estimated 18,000 dairy cows dead.

The recently constructed 40-acre cross-ventilated barn housed nearly 20,000 cows with estimates that one to two percent of the herd survived. It is one of several dairies owned by the Frank Brand family. At this site, 60 to 80 people were employed.

According to the Fire Marshal’s press statement, the investigation is ongoing, but has so far “revealed evidence… that the fire originated in the northern end, more specifically Pen 3, and was the result of a failure of a piece of equipment that is used within the dairy on a daily basis.”

In the first 24 hours after the fire, on April 11, Castro County Sheriff Sal Rivera reported to local news stations that the machinery involved was likely a ‘honey-vac’ used in pumping manure.

While the April 17 statement by state fire officials does not specifically cite manure pumping equipment, the Fire Marshal did state: “Because of the size of the fire, the insured loss amount, the number of cattle killed, and the fact that two other pieces of equipment, identical to the one that caught fire, have burned previously — one at this dairy and one at another dairy — there will be a more in-depth investigation of the reason for the failure by other origin-and-cause investigators and engineers that are experts in the field of equipment failures.”

Officials also reported that the explosion was the result of flammable liquids, including liquid fuel, hydraulic oil and other materials, “expanding rapidly,” causing a “smoke explosion.” The preliminary report made no mention of methane as a trigger or an accelerant, contrary to the widespread social media discussions blaming methane accumulation in the barn or blaming a methane digester.

In fact, anaerobic digestion was reportedly not yet operating at South Fork Dairy. According to a January 2023 Clean Energy announcement, the Renewable Natural Gas project there was set to begin construction in February or March 2023.

Concerns shared within the dairy industry revolve around how quickly the fire spread through the roof insulation of the 2 million square foot steel-construction dairy facility.

On April 17, the Texas Commission on Environmental Quality said Amarillo office investigators “continue to provide assistance to South Fork Dairy to ensure that dead livestock and any other debris is disposed of in accordance with TCEQ rules and regulations.”

This task must be done as quickly and efficiently as possible, but experts expect the cleanup of this many carcasses to take several weeks even with the aggressive support of teams of professionals, volunteers, officials and university extension.

The local and agricultural community is supporting the Brand family, and a ‘meal train’ was started by a neighboring dairy and is funded by companies giving donations to feed the minimum 100 to 150 people working at the site daily for the next three to four weeks.

Texas Agriculture Commissioner Sid Miller released a statement shortly after the fire, calling it “a tragic blow.”

He thanked law enforcement and fire and EMS personnel and urged prayers for the injured employee and the owners and workers as they deal with the impact and cleanup from this disaster.

“We don’t know all the facts yet surrounding this disaster… This was the deadliest barn fire for cattle in Texas history, and the investigation and cleanup may take some time. We all want to know what the facts are. There are lessons to be learned, and the impact of this fire may influence the immediate area and the industry itself. Once we know the cause and the facts surrounding this tragedy, we will make sure the public is fully informed — so tragedies like this can be avoided in the future,” noted Commissioner Miller in his statement.

South Fork Dairy is among many relatively new construction dairies housing large numbers of cows in cross-ventilated facilities that can be 24-rows wide, or wider, and are enclosed, automated systems that do not present the option of natural ventilation.

This is a horrific tragedy for the owners and employees that had worked with these cows.

The complete investigation is expected to take some time to learn as much as possible not just about how it started, but how it spread so rapidly and other aspects of the explosion and fire that could pertain to questions of safety for the future.

-30-

Did we just see the tip of the iceberg designed in Davos?

Posted on by
Reply
Wealth from the tech sector led Silicon Valley Bank (SVB) to be central to venture capital investments in food and energy tech startups, including plant-based and cell-based fake-meat and fake-dairy. Beyond Meat is one high-profile example in SVB’s ‘Clean Tech’ portfolio amid the rampant climate/ESG-focused investment that has occurred throughout the financial sector when interest rates were low and the economy was being pumped full of capital. Now, after eight interest rate hikes by the Federal Reserve in response to record inflation, the SVB collapse is the second largest bank failure in history. Did we see a ‘bubble’ or the tip of an iceberg designed in Davos.
  Istock photo collage by Sherry Bunting

Looking back and ahead, there’s more than meets the eye

By Sherry Bunting, Farmshine March 31, 2023

The Federal Reserve policy shift to raise interest rates and restrict the money supply after more than a decade of ultra-low rates and two years of pumping money into the economy opening a Pandora’s box of unrealized losses and liquidity problems in areas of the banking system as consumers and businesses rifle through savings in the face of record inflation, and now rising interest rates.

Ongoing global banking stress, central bank interest rate hikes, tightening credit conditions, and continued inflation are affecting both the U.S. and Europe against the backdrop of two important geopolitical developments in late March.

First, the UN Secretary General accelerated ‘net-zero’ climate commitments for the U.S. and EU to 2040 instead of 2050, while China and India have until 2060 and 2070. Second, leaders of authoritarian regimes in China and Russia made a pact to “shape the new world era by cooperating on a range of economic and business areas.”

At the same time, the second largest bank failure in U.S. history — then backstopped by the federal government and run by federal regulators — re-opened as Silicon Valley Bridge Bank. Within days, it had regained its status as the darling of the tech-elite. Venture capital startups came back to it “in droves,” according to several business news reports. 

Looking back two years in my reporter’s notebook, I found harbingers of these current events from the World Economic Forum’s 2021 meeting in Davos, and the global transformation — the Great Reset — that underlies it.

Let’s review, and look ahead:

At the leading edge of the ‘banking crisis’ that emerged in March 2023 was the Silicon Valley Bank (SVB) collapse and subsequent Biden backstop for all of its deposits over and above FDIC-insured levels.

Known as the venture capital bank for the tech sector, SVB doubled its deposits from $115 billion to $225 billion from 2021 to 2022, according to a lengthy Feb. 2023 report in Forbes that eerily discussed the ramp up in ESG-investing in 2021 facing off with 20 states moving to restrict it in 2022.

In 2021, there were huge venture capital investments, and high-profile public offerings for climate-focused startups such as those in SVB’s ‘Clean Tech’ division for alternative energy, food, and biotech.

As interest rates rose in 2022, venture capital investment slowed, and these startups started eating into their deposits backed by long-term securities, leaving insufficient upfront liquidity. Many of the food tech startups banked by SVB are pre-market, others are plant-based imitations with lackluster sales and bottom line losses.

Food Dive reporters described the scene at a food tech expo when a tweet about SVB broke the news. Startup owners went into a bit of a panic, transferring, or attempting to transfer, funds from their phone apps. 

They say the Biden backstop makes these depositors whole, but not the investors. That is misleading. The deposits consist mostly of investor funds now being used for payroll and cost of business.

Why was SVB deemed ‘systemic’ enough to elicit a rapid and complete federal backstop? It’s the epitome of ESG / climate investment funding models.

In fact, one of the executive orders signed by President Biden in Jan. 2021 repealed the Trump rule that had previously restricted retirement fund managers from using ESG (Environmental, Social Governance) factors. Then, just this week on Monday (March 20), Biden vetoed legislation passed by Congress to undo his Jan. 2021 executive order, seeking to restore those restrictions.

It’s worth noting that the climate agenda focus on ESG-investing-on-steroids over the past two years may have distracted the financial sector from minding the books.

Is it a ‘bubble’? Is it the tip of the iceberg? Will there be fallout for agriculture? 

The good news, wrote American Farm Bureau chief economist Roger Cryan on March 17 is that regional banks are in a strong position, and farmers – mostly – have strong balance sheets coming out of 2022.

An article about the SVB and Signature Bank failures was shared with farmers during a Lancaster County, Pa. meeting Thursday (March 16), noting that, “As of now, these issues don’t appear to be systemic.” 

The author, Matthew Brennan, senior investment strategist and portfolio advisor for Fulton Bank, wrote: “These aren’t questions of solvency, these are questions of liquidity. While we expect the measures put in place by the government should go a long way towards providing stability to a sector that was beleaguered last week, volatility is expected to remain high.”

Meanwhile, the entire financial sector braced for the Federal Reserve meeting March 22, anticipating a 0.25% rise in interest rates as the consumer price index announced March 14 for February showed inflation was 6% higher than a year ago with core inflation on a month-to-month basis the highest of the past four months.

So, how did we get here, and is there more than meets the eye?

As mentioned, venture capital investment for climate-tech startups in energy, food and cellular ag ramped up in 2021 amid low interest rates, expansion of the monetary supply, and government incentives. 

Inflation, which followed, actually helps these alternative sectors by making their higher-cost products align better with the cost of conventional fossil energy and traditional ‘real’ foods in the meat and dairy sectors that experienced the highest inflationary surges.

As the Biden Administration and the Federal Reserve were both late to react to rising inflation, all of this money pumped into the economy created an ESG investment runway. But as startups now eat into those deposited investments, while consumers go through prior government funds and are now borrowing to keep up with inflation, reality hits home.

Analysis by experts across the financial spectrum vary from blaming ‘woke’ ESG-investing, to calling the bank failures ‘unique’ and not likely to spread, to describing these failures as ‘tips of an iceberg’, to suggesting a designed consolidation to globalized central banking.

A Stanford University report on March 20, pegs the banking sector’s ‘unrealized losses’ as high as a collective $2.2 trillion. Therefore, as Fed monetary policy has tightened, the ‘paper’ losses become real losses if depositors use or move even 10 to 20% of their funds.

Parallel to these financial unravelings, a United Nations report March 20 from the Intergovernmental Panel on Climate Change (IPCC) shortened the climate ‘crisis’ timetable in dramatic style.

Calling the report “a guide for defusing the climate time-bomb,” the UN Secretary-General promptly announced for September’s Climate Summit an “acceleration agenda for first-movers”, specifically calling upon the U.S. and EU to shave 10 years off their commitments to reach net-zero by 2040 instead of 2050, while China and India meet their commitments by 2060 and 2070.

That’s a 20- to 30- year difference, and China is already positioned to be a prime supplier for digital transformation of energy and food for us all to become dependent upon. Recent agreements made by China and Iran and by China and Russia this week make these stark climate-commitment differences even more geopolitically important.

China already has significant investments in U.S. food and agriculture, including food and energy tech startups that were just bailed-out with U.S. funds in the collapsed SVB.

Beyond EV batteries, wind turbines and solar panels, largely made in China, China is investing heavily in lab-created protein alternatives and is already the world’s largest concentrator of soy, pea, oat, and other proteins that are the mainstay of plant-based imitation meat and dairy.

China and Russia have both invested in infrastructure, along with Singapore, to ramp up cellular protein via biotech, DNA-altered fermentation products as dairy analogs and gene-edited stem-cells with no growth endpoint as cell-cultured meat analogs.

To be clear, a recent Bloomberg business report confirmed alternative cellular protein to be based on ‘immortal cells’ in the same way as cancer cells have no growth endpoint, but somehow scientists reassure us — without proof — that this will not harm us when we are expected to dutifully consume climate-saving cancer-like blobs of immortal cells, made in China. (No, I’m not a conspiracy theorist, but I am a realist. It’s looking more and more like China is attempting to call the shots for the American consumer. I’m not the only one pointing out the need to return to ‘reality.’)

In a CNBC interview over the weekend, one business analyst said what is needed in the face of disruptor-tech-gone-wild is investment in real companies making real products for real people.” (Sound familiar?)

True to form, however, what sector of the stock market is rallying this week? The tech sector and artificial intelligence. Which sectors are seeing their values fall? The staples, the real essentials. This is counterintuitive unless we recall that it’s a page directly out of the World Economic Forum (WEF) playbook that has been written in Davos for decades.

Let’s go back to the WEF-Davos meeting two years ago and have a look…

It was January 2021 when the World Economic Forum (WEF) launched its annual meeting ‘virtually’ in Davos with a transformation agenda centered on the post-Covid ‘reset.’ During that week, two things caught my eye and ears. 

First, China’s president Xi Jinping was given the status of opening the Davos 2021 ‘reset,’ talking about four global governance ‘tasks’: digital, health, climate and economic. He spoke of China’s ‘superior’ role in global digital governance and global health governance. Then he stated: “China will get more engaged in global economic governance.”

Xi had the audacity to scold any nation or region that may try to reverse globalization or to decouple supply chains. He described such moves as “arrogant.”

Never mind the fact that Covid supply chain disruptions made the world keenly aware of the dangers in over-reliance on made-in-China medical essentials or centralized, globalized food systems.

Also in my notes are comments from business news analysts, admitting Environmental, Social, Governance benchmarks for investing (ESGs) and the UN Sustainable Development Goals (SDGs) are “not well-defined” and could be “a bubble”. Some even warned ESG venture-capital in tech startups (food and energy) “will fail.”

Nevertheless, more than 60 corporations covering tech, food, pharma, energy, finance, and accounting signed the ESG agreement in Jan. 2021 to outline what is measurable and pledging to “implement and enforce ESG and SDG at the supply chain and stakeholder level to drive consumers to a ‘net-zero’ consumption level.”

Think of this as the high-speed high-occupancy lane for pass-holders on the beltway — bypassing the methodical traffic of regular folk into and out of, well, Washington D.C., for example. Move all the climate-tech startups into that bypass lane, infuse them with trillions of dollars in capital — while the steady-eddy slow-going lanes are the shunned real asset essentials.

Also in my Jan. 2021 notes, are recorded comments by BlackRock and Bank of America CEOs who led the 60-plus global corporations in signing that ESG agreement in Davos. They talked about “following and auditing” the ESG and UN Net Zero SDG “decarbonization” investments.

A week later, President Biden took office and signed a stack of executive orders, followed by congressional spending packages that, together, created a cascade of ‘green new deals’ per the WEF ESG agreement signed in Davos.

Reading the next lines in my notes from the 2021 WEF-Davos, I had to catch my breath. In quotes are the words of Bank of America CEO Moynihan at the time. He said: “It will take $6 trillion per year investment for world consumption to be Net Zero by 2050. Governments and charities cannot do it without the corporate finance sector shepherding loans and investment funds in that direction with carbon performance measurement.”

Chilling to think that two years later, we could now be witnessing a cascade of government, corporate and monetary policies aimed at essentially achieving this investment infusion like a snowball rolling downhill. 

We could be seeing the first fallout, the first sign of the ESG ‘bubble’ bursting, but right on cue, these huge investments over the past two years are now being backstopped by policies to keep the infusion of capital flowing in that special bypass lane on the climate beltway.

The structure is being set for capital to flow to the now “accelerated climate agenda”, the carbon-control agenda, whether by hook or by crook, by corporation or by government — one way or the other the push to accelerate this agenda is already occurring.

Did we just see Act 1? Did we just witness a Trojan Horse carrying tech venture capital out of Silicon Valley Bank, et. al., while the government performs a backstop flow of capital to refill it? 

Will we see more federal spending packages, and additional tools unveiled to meet the combined global government-corporation-charity investments of $6 trillion that the BlackRock and Bank of America CEOs said will be necessary annually on a global scale to “bring consumption to ‘net zero’ by 2050?”

One of the now-infamous quotes to come out of that 2021 World Economic Forum (WEF) meeting held virtually in Davos in January 2021 was Klaus Schwab predicting: “You will own nothing, and you be happy.” In 2022, the same crew talked of tracking what we eat, where we go, and how we get there.

What the Davos crowd may not have factored-into the equation is the skepticism of freedom-loving American consumers who are not keen to be globally digitized via artificial intelligence that could control the very essence of life – carbon — by consolidating the flow of capital and information to an accelerated decarbonization of essential food, health and energy.

The Davos crowd and cohort China may not realize freedom-loving Americans will resist this bitter pill. 

They certainly did not foresee American legislators and Governors standing up against out-of-control ESG-investing. 

And, they didn’t foresee the victory for Dutch farmers and their pro-farmer political party that shocked the world in last week’s elections. 

(By the way, Dutch dairy farmer Ad Baltus, whom I interviewed in the 2022 Farmshine series about the farmers’ plight and protests in The Netherlands is now among the six people helping to form Holland’s new national administration and working on the coalition parliament there. Look for a follow up interview with him in the future.)

-30-