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This month marks the one-year anniversary of HighLine Consulting Group. I have been reflecting recently on the rollercoaster ride the last 12 months have been, and the emotion that keeps resonating is gratitude. I am immensely and sincerely grateful for all the support I have received from mentors, peers, and friends. It wasn’t easy, and honestly there were moments of despair. There have been projects I thought would be slam dunks which never got off the ground, and I have seen opportunities that fit like a glove materialize out of thin air. Some of it is luck, some of it is persistence, but the overwhelming common denominator has been the feedback and support through the journey. Thank you to all my supporters. To all those who aren’t convinced yet, just keep watching. Looking forward to the twists and turns of year two. World Cup Hangover? Since the World Cup final twelve days ago and all the international visitors went home, it feels like protein demand has fallen off a cliff. Boneless chicken cannot find a floor, fat beef trim is building up, and buyers everywhere appear to be on vacation. Has the economically strained consumer finally reached their breaking point? Has USA’s 250th birthday and hosting of the World Cup masked the underlying economic challenges? Will Brazilian beef trim flood the market once their Chinese import quota is fulfilled? I called these risks out earlier this year and now we will finally get our answers. Production Fundamentals Strong, Can Demand Keep Pace? Corn has been mostly below $5/bushel since late 2023 and has dipped under $4 more than once, most recently in late June. As long as the 2026/27 carryout holds near 1.8 billion bushels and yields stay over 180, do not expect that situation to change. Without strong soybean demand (which there isn’t), planting corn is engrained (pun intended) in farmers’ hearts and financials. Chicken production is strong and efficient. Egg sets are running 2 percent above last year and chick placements 1 percent, and the birds are heavier, 6.49 pounds live against 6.40 a year ago. The added supply is hurting the entire complex. At first the increased interest in dark meat was suppressing breast pricing. Now the floor has given out under boneless entirely: boneless skinless thigh meat has lost 17 percent in five weeks and tenderloins about the same. Bone-in dark meat has not moved. Leg quarters and drumsticks are actually up fractionally and the whole bird is flat. This is a deboning-yard problem before it is a demand problem. Producers can stomach short term blips, but the trend is no longer short term. Margin erosion will lead to production declines, and hopefully the industry takes a measured approach rather than overcorrecting and turning next year into a supply disaster. Luckily chicken producers hardly ever do that, and I say that with all the sincerity I can muster. Policy Gavage It seems these days that the Trump Administration 2.0 is obsessed with forcing tariffs down the international community’s throat in the same manner an animal activist imagines a duck is gavaged for foie gras. From Liberation Day, to the Section 122 duties that expired last week, to the Section 301 forced-labor tariffs that replaced them on July 24, the legal authority keeps changing and the tariffs never do. The Supreme Court already said no once, holding in February that IEEPA does not authorize tariffs at all. Officials have now declined to renew USMCA in its current form, a crowning achievement of Trump’s first administration and the replacement for a twenty-six-year-old NAFTA. Debated economic benefits aside, there is a structural challenge being overlooked. The policy goal of onshoring US manufacturing comes at a cost, and that cost is energy demand. Data center buildouts get the headlines, but the bigger drivers of what Americans actually pay are the ones nobody campaigns on: utility capital spending, weather and wildfire resilience, and natural gas volatility. Onshoring stacks new load on a grid already being rebuilt on the ratepayer’s dime. It will take time to learn if the long-term gains outweigh the short-term pains. Today’s instant gratification society is living through its generation’s version of the timeless classic quote; “History doesn’t repeat, but it rhymes”. It is easy to get caught up in the crisis of the moment these days, but as my clients know well, I believe a strong long-term strategy can overcome short-term disruptions.
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Packers and Stockyards comment docket. Three rescissions are out for comment: Inclusive Competition and Market Integrity, Transparency in Poultry Grower Contracting and Tournaments, and Poultry Grower Payment Systems and Capital Improvement Systems. The payment systems rule was already delayed eighteen months earlier this year. Watch whether the delay quietly becomes permanent. August 24, Douglas, Arizona. The border with Mexico reopens to live cattle, the first port to reopen in the past year. It reopens despite New World Screwworm having breached the border, not because the threat has passed: 42 animal cases have been confirmed in the United States since the first Texas detection on June 3, with roughly nine still active. Nearest active case to Douglas was 325 miles out as of July 22. Santa Teresa, New Mexico could follow within about sixty days if Douglas goes smoothly, with Columbus after that and no firm date. USDA also announced $25 million on July 29 for a sterile fly dispersal facility at Douglas with a 400 nautical mile flight radius. Even if everything goes perfectly, do not expect this to be a windfall of cattle imports and supply. Triumph Foods v. California. Defendants’ response was due July 27, fourteen days after Judge Snyder let the dormant commerce clause claim proceed. Watch for the answer or a further motion. This is the first Prop 12 challenge to clear a motion to dismiss since the Supreme Court’s 2023 ruling.
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