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Canadian barley growers exploiting Australia’s troubles expose vulnerability in any alliance against Beijing

Australia is China’s favourite punching bag. Beijing has put up tariff walls to block imports of Australian barley and wine, and anecdotal evidence suggests that the world’s second-biggest economy is refusing shipments of beef, coal, lobster and timber…

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Australia is China’s favourite punching bag. Beijing has put up tariff walls to block imports of Australian barley and wine, and anecdotal evidence suggests that the world’s second-biggest economy is refusing shipments of beef, coal, lobster and timber from Down Under.

By most accounts, Australia’s government is being punished for speaking its mind. Among the offences: Prime Minister Scott Morrison’s call last April for an international investigation into China’s early handling of COVID-19, which was first detected in Wuhan in late 2019. Duties on barley went up the following month .

China’s willingness to throw its weight around has become a major concern for the biggest democracies. There is plenty of talk in Europe, North America and parts of Asia about strengthening alliances and showing solidarity with those that get knocked around by Beijing’s methods.

But if linking arms is the plan, someone forgot to send the memo to Canada’s barley farmers. Their entirely acceptable (and predictable) rush to exploit Australia’s predicament exposes a vulnerability in the West’s new containment strategy: to beat China, they will have to behave more like China. It’s unclear they have the stomach for it.

Canadian barley, which is used to make beer and livestock feed, had become something of an afterthought on the Prairies in recent years, usurped in the cash-crop hierarchy by lentils and peas, staples of vegan and vegetarian diets.

The farmers who stuck with barley were rewarded for their loyalty in 2020. They earned record cash receipts of about $1.1 billion, a 14 per cent increase from 2019 and only the second time the crop fetched more than $1 billion in a single calendar year, according to Statistics Canada.

A lot of hard work went into those returns. There was also some luck. In a year when entire industries were effectively ordered to close, agriculture was deemed essential, so farmers and their suppliers kept working throughout the pandemic. They had a good harvest and commodity prices surged as global lockdown measures eased. And, as Statistics Canada noted in its report on 2020 farm income , barley growers got an extra lift from “diplomatic and trade tensions with Australia.”

A tractor pulls a seeder over a field while sowing barley seed at a farm in Balliang, Victoria, Australia. China has imposed hefty tariffs on imports of Australian barley.

Canada’s barely exports to China rose by 18.5 per cent in 2020 from the previous year, according to data provided by Statistics Canada, and momentum only appears to be building. Shipments in the first quarter of 2021 were worth more than $290 million, an increase of 175 per cent from the same period last year.

The Canadians who are profiting at Australia’s expense don’t feel guilty about it. Commodity markets are global and doors are opening and closing all the time.

“We look at it as an opportunity to solidify those markets, so we do a lot of market development work with Chinese brewers and maltsters and the Chinese feeding industry,” said Tom Steve, general manager at Alberta Wheat and Barley Commissions, a farmer-led trade association. “China and Australia may resolve their trade issues, but we’re trying to take the opportunity to build trust and reliability as a supplier to the Chinese market.

Commodities could be leveraged in negotiations with Beijing, since China lacks much of what it needs to fuel its fast-growing economy. But restricting its access to food, energy and minerals would require heavy-handedness of the type that the big democratic countries say they want to combat. The legacy powers created a global market for goods after the Second World War. It would take nerve to undermine that creation by denying their citizens every opportunity to exploit it.

Former United States president Donald Trump attempted to confront China directly and left office with little to show for it. His departure opened the door for more cooperation and the leading democracies appear to want it in some fashion. U.S. President Joe Biden wants to stitch together an alliance of like-minded nations and Boris Johnson, Prime Minister of the United Kingdom and current chair of the G7 countries, invited Australia, India and South Korea to join this year’s talks, which will be dominated by China’s unapologetic belligerence. The U.S., European Union, U.K. and Canada all introduced sanctions earlier this year over China’s forced detention and “re-education” of the Uighur minority in Xinjiang.

Some lawmakers and activists in those places are even more restive. Canada’s Parliament voted earlier this year to call what China is doing in Xinjiang a genocide, even as Prime Minister Justin Trudeau’s government abstained. Last year, the Inter-Parliamentary Alliance on China, a group of democratically elected legislators from around the world that includes Canadian Garnett Genius, a member of Parliament from Alberta, called on their home countries to drink Australian wine to show solidarity with the beleaguered member of the family of democracies.

To be sure, it takes very little for the tables to turn, as pork exporters learned in the summer of 2019 . “We can be shut out of the market in an instant if there’s a political decision made in China,” Steve said.

Perhaps governments in places such as Canada and the U.K. could get their exporters on side by creating conditions that offer more certainty. For example, a decision by the U.S. to re-enter the Trans-Pacific Partnership will create a commercial zone to rival the allure of China.

In the meantime, exporters that were encouraged by their governments to embrace globalization will continue to follow the money. Alberta’s barley growers are intent on convincing their new Chinese clients to stick with them, even if the governments of Australia and China resolve their differences. “Our production, we would argue, is more reliable,” Steve said.

• Email: kcarmichael@postmedia.com | Twitter:

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Costco Tells Americans the Truth About Inflation and Price Increases

The warehouse club has seen some troubling trends but it’s also trumpeting something positive that most retailers wouldn’t share.

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May 28, 2023

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Costco has been a refuge for customers during both the pandemic and during the period when supply chain and inflation issues have driven prices higher. In the worst days of the covid pandemic, the membership-based warehouse club not only had the key household items people needed, it also kept selling them at fair prices.

With inflation -- no matter what the reason for it -- Costco  (COST) - Get Free Report worked aggressively to keep prices down. During that period (and really always) CFO Richard Galanti talked about how his company leaned on vendors to provide better prices while sometimes also eating some of the increase rather than passing it onto customers.

DON'T MISS: Why You May Not Want to Fly Southwest Airlines

That wasn't an altruistic move. Costco plays the long game, and it focuses on doing whatever is needed to keep its members happy in order to keep them renewing their memberships.

It's a model that has worked spectacularly well, according to Galanti.

"In terms of renewal rates, at third quarter end, our US and Canada renewal rate was 92.6%, and our worldwide rate came in at 90.5%. These figures are the same all-time high renewal rates that were achieved in the second quarter, just 12 weeks ago here," he said during the company's third-quarter earnings call.

Galanti, however, did report some news that suggests that significant problems remain in the economy.

Costco has done an incredibly good job at holding onto members.

Image source: Xinhua/Ting Shen via Getty Images

Costco Does See Some Economic Weakness

When people worry about the economy, they sometimes trade down when it comes to retailers. Walmart executives (WMT) - Get Free Report, for example, have talked about seeing more customers that earn six figures shopping in their stores.

Costco has always had a diverse customer base, but one weakness in its business may be a warning sign for its rivals like Target (TGT) - Get Free Report, Best Buy (BBY) - Get Free Report, and Amazon (AMZN) - Get Free Report. Galanti broke down some of the numbers during the call.

"Traffic or shopping frequency remains pretty good, increasing 4.8% worldwide and 3.5% in the U.S. during the quarter," he shared.

People shopped more, but they were also spending less, according to the CFO.

"Our average daily transaction or ticket was down 4.2% worldwide and down 3.5% in the U.S., impacted, in large part, from weakness in bigger-ticket nonfood discretionary items," he shared.

Now, not buying a new TV, jewelry, or other big-ticket items could just be a sign that consumers are being cautious. But, if they're not buying those items at Costco (generally the lowest-cost option) that does not bode well for other retailers.

Galanti laid out the numbers as well as how they broke down between digital and warehouse.

"You saw in the release that e-commerce was a minus 10% sales decline on a comp basis," he said. "As I discussed on our second quarter call and in our monthly sales recordings, in Q3, big-ticket discretionary departments, notably majors, home furnishings, small electrics, jewelry, and hardware, were down about 20% in e-com and made up 55% of e-com sales. These same departments were down about 17% in warehouse, but they only make up 8% in warehouse sales."

Costco's CFO Also Had Good News For Shoppers

Galanti has been very open about sharing information about the prices Costco has seen from vendors. He has shared in the past, for example, that the chain does not pass on gas price increases as fast as they happen nor does it lower prices as quick as they sometimes fall.

In the most recent call, he shared some very good news on inflation (that also puts pressure on Target, Walmart, and Amazon to lower prices).

"A few comments on inflation. Inflation continues to abate somewhat. If you go back a year ago to the fourth quarter of '22 last summer, we had estimated that year-over-year inflation at the time was up 8%. And by Q1 and Q2, it was down to 6% and 7% and then 5% and 6%," he shared. "In this quarter, we're estimating the year-over-year inflation in the 3% to 4% range."

The CFO also explained that he sees prices dropping on some very key consumer staples.

"We continue to see improvements in many items, notably food items like nuts, eggs and meat, as well as items that include, as part of their components, commodities like steel and resins on the nonfood side," he added.

  

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Under Pressure From Fat Activists, NYC Bans Weight Discrimination

Under Pressure From Fat Activists, NYC Bans Weight Discrimination

Discriminating against fat people is now illegal in New York City, after…

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May 28, 2023

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Under Pressure From Fat Activists, NYC Bans Weight Discrimination

Discriminating against fat people is now illegal in New York City, after Mayor Eric Adams on Friday signed off on a ban that will affect not only employment, but also housing and access to public accommodations -- a term that encompasses most businesses. 

We're in safe company using the word "fat," as champions of the cause refer to themselves as "fat activists." With the mayor's signature, two more categories -- both weight and height -- are added to New York City's list of protected personal attributes, which already included race, gender, age, religion and sexual orientation. 

As Mayor Adams signs the law, self-described (and everyone else-described) fat activist Tigress Osborn consumes more than her share of the backdrop (James Messerschmidt for NY Post)

Embracing one of 2023's innumerable strains of Orwellian brainwashing, Adams declared, "Science has shown that body type is not a connection to if you’re healthy or unhealthy. I think that’s a misnomer that we’re really dispelling.”

Even the Centers for Disease Control and Prevention say obesity is an invitation to a host of maladies, including to high blood pressure Type 2 diabetes, coronary heart disease, stroke, gall bladder disease, many types of cancer, mental illness and difficulty with physical functioning. 

“Size discrimination is a social justice issue and a public health threat," said Councilmember Shaun Abreu, who introduced the measure. "People with different body types are denied access to job opportunities and equal wages — and they have had no legal recourse to contest it," said Abreu. "Worse yet, millions are taught to hate their bodies." 

A full 69% of American adults are overweight or obese, but our woke overlords would have us believe the real "public health threat" is a nice restaurant that doesn't want Two-Ton Tessie working the reception desk, or a landlord who's leary of a 400-pound man breaking a toilet seat or collapsing a porch.  

The enticingly-named Tigress Osborn, who chairs the National Association to Advance Fat Acceptance, said New York's ban "will ripple across the globe" -- perhaps something like what would happen if the hefty Smith College Africana Studies graduate were dropped into a swimming pool.  

Councilmember Shaun Abreu said he gained 40 pounds during the pandemic lockdowns and noticed people treated him differently

The New York Times reports that witnesses who testified as the measure was under consideration included "a student at New York University said that desks in classrooms were too small for her [and] a soprano at the Metropolitan Opera [who] said she had faced body shaming and pressure to develop an eating disorder." 

Some have dared to speak out against the measure. “This is another mandate where enforcement will be primarily through litigation, which imposes a burden on employers, regulators and the courts,” said Kathryn S. Wylde, president of the Partnership for New York City, speaking in April. 

Implicitly putting the weight ordinance in the same category as Brown vs Board of Education, Abrue said, “Today is a monumental advancement for civil rights, size freedom and body positivity and while our laws are only now catching up to our culture, it is a victory that I hope will cause more cities, states and one day the federal government to follow suit.” 

Taking effect in six months, the law has an exemption for employers "needing to consider height or weight in employment decisions" -- but "only where required by federal, state, or local laws or regulations or where the Commission on Human Rights permits such considerations because height or weight may prevent a person from performing essential requirements of a job." 

We pray there's a federal exemption for employers of strippers and lap dancers. 

Think we're joking? We remind you that the chair of the National Association to Advance Fat Acceptance is named "Tigress" -- and this is her Twitter profile banner photo:

via Tigress @iofthetigress
Tyler Durden Sun, 05/28/2023 - 15:30

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‘Kevin Caved’: McCarthy Savaged Over Debt Ceiling Deal

‘Kevin Caved’: McCarthy Savaged Over Debt Ceiling Deal

Update (1345ET): The hits just keep coming for Speaker Kevin McCarthy, as angry Republicans…

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May 28, 2023

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'Kevin Caved': McCarthy Savaged Over Debt Ceiling Deal

Update (1345ET): The hits just keep coming for Speaker Kevin McCarthy, as angry Republicans have been outright rejecting the debt ceiling deal which raises it by roughly $4 trillion for two years, doesn't provide sticking points sought by the GOP.

In short, Kevin caved according to his detractors.

Some Democrats aren't exactly pleased either.

"None of the things in the bill are Democratic priorities," Rep. Jim Himes (D-CT) told Fox News Sunday. "That's not a surprise, given that we're now in the minority. But the obvious point here, and the speaker didn't say this, the reason it may have some traction with some Democrats is that it's a very small bill."

*  *  *

After President Biden and House Speaker Kevin McCarthy (R-CA) struck a Saturday night deal to raise the debt ceiling, several Republicans outright rejected it before it could even be codified into a bill.

Here's what's in it;

  • The deal raises the debt ceiling by roughly $4 trillion for two years, and is consistent with the structure of budget deals struck in 2015, 2018 and 2019 which simultaneously raised the debt limit.
  • According to a GOP one-pager on the deal, it includes a rollback of non-defense discretionary spending to FY2022 levels, while capping topline federal spending to 1% annual growth for six years.
  • After 2025 there are no budget caps, only "non-enforceable appropriations targets."
  • Defense spending would be in-line with what Biden requested in his 2024 budget proposal - roughly $900 billion.
  • The deal fully funds medical care for veterans, including the Toxic Exposure Fund through the bipartisan PACT Act.
  • The agreement increases the age for which food stamp recipients must seek work to be eligible, from 49 to 54, but also includes reforms to expand who is eligible.
  • Claws back "tens of billions" in unspent COVID-19 funds
  • Cuts IRS funding 'without nixing the full $80 billion' approved last year. According to the GOP, the deal will "nix the total FY23 staffing funding request for new IRS agents."
  • The deal includes energy permitting reform demanded by Republicans and Sen. Joe Manchin (D-WV)
  • No new taxes, according to McCarthy.

Here's McCarthy acting like it's not DOA:

Yet, Republicans who demanded deep cuts aren't having it.

"A $4 trillion debt ceiling increase?" tweeted Rep. Andrew Clyde (R-GA). "With virtually none of the key fiscally responsible policies passed in the Limit, Save, Grow Act kept intact?"

"Hard pass. Hold the line."

"Hold the line... No swamp deals," tweeted Rep. Chip Roy (R-TX)

"A $4 TRILLION debt ceiling increase?! That's what the Speaker's negotiators are going to bring back to us?" tweeted Rep. Dan Bishop (R-NC). "Moving the issue of unsustainable debt beyond the presidential election, even though 60% of Americans are with the GOP on it?"

Rep. Keith Self tweeted a letter from 34 fellow House GOP members who are committing to "#HoldTheLine for America" against the deal.

"Nothing like partying like it’s 1996. Good grief," tweeted Russ Vought, President of the Center for Renewing America and former Trump OMB director.

In short:

Tyler Durden Sun, 05/28/2023 - 11:30

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