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New Jersey’s small, networked dairy farms are a model for a more resilient food system

New Jersey’s small, networked dairy farms are a model for a more resilient food system

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Richard Byma from By-Acre farms in Sussex County, New Jersey, tends to his Holstein herd. Neville Elder/Corbis via Getty Images)

Cow’s milk is a major part of many Americans’ diets because it contains key vitamins and calcium. But milk consumption has suffered during the COVID-19 pandemic, along with other foods, including beef, eggs, fruit and vegetables. Economic shutdowns have severely disrupted supply chains that move food from farm to fork.

Milk provides a compelling case study. Before the pandemic, the U.S. dairy industry was already struggling with low milk prices, rising debt, the U.S.-China trade war, widespread depression and stress among farmers and limited rural access to mental health services. More farmers are calling it quits and, in uncommon but growing cases, committing suicide.

As scientists specializing in ecology and the environment, we’re studying how milk – an essential yet suffering industry – has been affected by COVID-19. We have documented one solution to the milk distribution crisis: innovative small farmers of New Jersey, who are surviving these hard times by working in cooperatives and selling directly to customers.

Dave Wolfskill of Mar-Anne Farms in Lower Heidelberg Township, Pennsylvania, watches 5,500 gallons of milk swirl down a drain, the first time his family has discarded milk since they started farming there in 1948. Bill Uhrich/Getty Images

Dealing with changes in milk demand

Changes in the milk distribution networks that connect farmers, processors, retailers and consumers can be hard to see during a socially distanced trip to the grocery store. But they exist and are getting worse.

Dairy producers are dumping thousands of gallons of milk every day. In Wisconsin, 50% of the state’s dairy products have nowhere to go while typical buyers such as schools and restaurants remain shut down and unable to purchase milk and cheese.

In Pennsylvania, where schools buy up to 40% of dairy sales by volume, the pandemic has beleaguered an already-stressed industry that lost 470 farms in 2019. Some large dairies have started donating milk directly to food banks rather than dumping it, but it has taken months for this to happen with the help of nonprofit intermediaries. Such arrangements are patches, not systemic fixes for gaps in a brittle supply chain.

Supermarkets can’t sell all the milk

Milk is still in high demand at grocery stores and supermarkets, but the share that would normally go to shut-down schools and restaurants has no buyers. Dairy farmers can’t reduce milk supply in response, though, because cows continue to produce milk during the pandemic.

Grocery stores and supermarkets aren’t equipped to manage the volume of available milk. Their packaging requirements are different enough from schools and restaurants that relabeling and repackaging aren’t feasible. Milk not originally destined for retail outlets has nowhere to go but down the drain.

Milk waste and donations are signs that supply chains lack resilience – the ability to bounce back from stresses, like a rubber band that returns to its normal shape after being stretched. Milk dumping is more a reflection of broken supply chains than of trends in supply or demand. The fact that the U.S. has too much milk for some places and too little for others highlights weaknesses of conventional food supply chains amid shocks like COVID-19.

One farm, one economy

Restoring demand for milk that is currently being dumped could take months, at significant losses to producers. Yet mainstream agriculture – where the largest 4% of U.S. farms produce 66% of milk, meat and vegetables by value – doesn’t typically operate with a large supply buffer or prioritize resilience. How can this system be rewired to make it more adaptable?

When a farm’s economy stays local, the operation can thrive even during jolts to society. Hornstra Farms of Norwell, Massachusetts sells its dairy products directly to customers through its store and home delivery, above. Melanie Stetson Freeman/The Christian Science Monitor/Getty Images)

Here in New Jersey, farms are the fourth-smallest in the United States, averaging 76 acres. The Garden State’s dairy sector is particularly small, comprising only 50 farms and ranking 44th of 50 states in total milk production. But despite their small operations, we see New Jersey’s local entrepreneurial farmers as models of a game-changing strategy.

Rather than selling their milk to large dairy processing companies, these vertically structured local farms raise cows, process milk and other foods and sell them directly to consumers at farm-operated markets and restaurants. Unsold items return to farms as feed or fertilizer.

This system is highly efficient, even during the current pandemic, because farmers and their customers represent the entire supply chain. Customer demand for locally produced food is surging throughout New Jersey and the United States.

These farmers don’t operate alone. They band together in cooperatives, sharing resources for the benefit of all. Farmers with dairies and slaughterhouses bottle milk and process animals from other local producers. Those that own markets, cafes and restaurants act as hubs stocking and selling milk, meat and produce from neighboring farms, generating profits for all parties.

A resilient food future

In our view, New Jersey’s local farms are able to bounce back from disturbances like a pandemic because they add a collaborative, “horizontal” element to vertically structured farms. As networks of farmers and consumers grow, they become more connected and are able to flexibly pivot and adapt to meet demand, thus creating increasingly resilient regional mosaics of farms and customers.

We see Garden State farms’ current success as evidence that resilient food systems make agriculture smaller, not larger. As food networks rewire in the wake of COVID-19, we believe one priority should be fostering food systems that are flexible and diverse, like New Jersey’s farmer-consumer networks.

For instance, agricultural policies could be designed to accentuate the efficiency of small farmers and their capacity to nimbly respond to disturbances when larger-scale agriculture cannot. Nurturing such flexibility is critical for creating resilient food systems in an uncertain future.

[You’re smart and curious about the world. So are The Conversation’s authors and editors. You can get our highlights each weekend.]

Andrew Carlson has received funding from Princeton University’s Dean For Research, Princeton Environmental Institute, Andlinger Center for Energy and the Environment, and the Office of the Provost. He has previously received funding from a variety of state and federal natural resource agencies, none of which stand to benefit from this article.

Daniel Rubenstein is affiliated with, and president of, Friends of Hopewell Valley Open Space, a local land trust. He is also a board member of environmental organizations such as Earthwatch and Hawk Mountain Sanctuary. He was an elected member of the Hopewell Valley Regional School Board and its president for two years.

Simon Levin is a member of the Democratic Party

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Four burning questions about the future of the $16.5B Novo-Catalent deal

To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.
Beyond spending billions of dollars to expand…

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To build or to buy? That’s a classic question for pharma boardrooms, and Novo Nordisk is going with both.

Beyond spending billions of dollars to expand its own production capacity for its weight loss drugs, the Danish drugmaker said Monday it will pay $11 billion to acquire three manufacturing plants from Catalent. It’s part of a broader $16.5 billion deal with Novo Holdings, the investment arm of the pharma’s parent group, which agreed to acquire the contract manufacturer and take it private.

It’s a big deal for all parties, with potential ripple effects across the biotech ecosystem. Here’s a look at some of the most pressing questions to watch after Monday’s announcement.

Why did Novo do this?

Novo Holdings isn’t the most obvious buyer for Catalent, particularly after last year’s on-and-off M&A interest from the serial acquirer Danaher. But the deal could benefit both Novo Holdings and Novo Nordisk.

Novo Nordisk’s biggest challenge has been simply making enough of the weight loss drug Wegovy and diabetes therapy Ozempic. On last week’s earnings call, Novo Nordisk CEO Lars Fruergaard Jørgensen said the company isn’t constrained by capital in its efforts to boost manufacturing. Rather, the main challenge is the limited amount of capabilities out there, he said.

“Most pharmaceutical companies in the world would be shopping among the same manufacturers,” he said. “There’s not an unlimited amount of machinery and people to build it.”

While Novo was already one of Catalent’s major customers, the manufacturer has been hamstrung by its own balance sheet. With roughly $5 billion in debt on its books, it’s had to juggle paying down debt with sufficiently investing in its facilities. That’s been particularly challenging in keeping pace with soaring demand for GLP-1 drugs.

Novo, on the other hand, has the balance sheet to funnel as much money as needed into the plants in Italy, Belgium, and Indiana. It’s also struggled to make enough of its popular GLP-1 drugs to meet their soaring demand, with documented shortages of both Ozempic and Wegovy.

The impact won’t be immediate. The parties expect the deal to close near the end of 2024. Novo Nordisk said it expects the three new sites to “gradually increase Novo Nordisk’s filling capacity from 2026 and onwards.”

As for the rest of Catalent — nearly 50 other sites employing thousands of workers — Novo Holdings will take control. The group previously acquired Altasciences in 2021 and Ritedose in 2022, so the Catalent deal builds on a core investing interest in biopharma services, Novo Holdings CEO Kasim Kutay told Endpoints News.

Kasim Kutay

When asked about possible site closures or layoffs, Kutay said the team hasn’t thought about that.

“That’s not our track record. Our track record is to invest in quality businesses and help them grow,” he said. “There’s always stuff to do with any asset you own, but we haven’t bought this company to do some of the stuff you’re talking about.”

What does it mean for Catalent’s customers? 

Until the deal closes, Catalent will operate as a standalone business. After it closes, Novo Nordisk said it will honor its customer obligations at the three sites, a spokesperson said. But they didn’t answer a question about what happens when those contracts expire.

The wrinkle is the long-term future of the three plants that Novo Nordisk is paying for. Those sites don’t exclusively pump out Wegovy, but that could be the logical long-term aim for the Danish drugmaker.

The ideal scenario is that pricing and timelines remain the same for customers, said Nicole Paulk, CEO of the gene therapy startup Siren Biotechnology.

Nicole Paulk

“The name of the group that you’re going to send your check to is now going to be Novo Holdings instead of Catalent, but otherwise everything remains the same,” Paulk told Endpoints. “That’s the best-case scenario.”

In a worst case, Paulk said she feared the new owners could wind up closing sites or laying off Catalent groups. That could create some uncertainty for customers looking for a long-term manufacturing partner.

Are shareholders and regulators happy? 

The pandemic was a wild ride for Catalent’s stock, with shares surging from about $40 to $140 and then crashing back to earth. The $63.50 share price for the takeover is a happy ending depending on the investor.

On that point, the investing giant Elliott Investment Management is satisfied. Marc Steinberg, a partner at Elliott, called the agreement “an outstanding outcome” that “clearly maximizes value for Catalent stockholders” in a statement.

Elliott helped kick off a strategic review last August that culminated in the sale agreement. Compared to Catalent’s stock price before that review started, the deal pays a nearly 40% premium.

Alessandro Maselli

But this is hardly a victory lap for CEO Alessandro Maselli, who took over in July 2022 when Catalent’s stock price was north of $100. Novo’s takeover is a tacit acknowledgment that Maselli could never fully right the ship, as operational problems plagued the company throughout 2023 while it was limited by its debt.

Additional regulatory filings in the next few weeks could give insight into just how competitive the sale process was. William Blair analysts said they don’t expect a competing bidder “given the organic investments already being pursued at other leading CDMOs and the breadth and scale of Catalent’s operations.”

The Blair analysts also noted the companies likely “expect to spend some time educating relevant government agencies” about the deal, given the lengthy closing timeline. Given Novo Nordisk’s ascent — it’s now one of Europe’s most valuable companies — paired with the limited number of large contract manufacturers, antitrust regulators could be interested in taking a close look.

Are Catalent’s problems finally a thing of the past?

Catalent ran into a mix of financial and operational problems over the past year that played no small part in attracting the interest of an activist like Elliott.

Now with a deal in place, how quickly can Novo rectify those problems? Some of the challenges were driven by the demands of being a publicly traded company, like failing to meet investors’ revenue expectations or even filing earnings reports on time.

But Catalent also struggled with its business at times, with a range of manufacturing delays, inspection reports and occasionally writing down acquisitions that didn’t pan out. Novo’s deep pockets will go a long way to a turnaround, but only the future will tell if all these issues are fixed.

Kutay said his team is excited by the opportunity and was satisfied with the due diligence it did on the company.

“We believe we’re buying a strong company with a good management team and good prospects,” Kutay said. “If that wasn’t the case, I don’t think we’d be here.”

Amber Tong and Reynald Castañeda contributed reporting.

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Petrina Kamya, Ph.D., Head of AI Platforms at Insilico Medicine, presents at BIO CEO & Investor Conference

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb….

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Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

Credit: Insilico Medicine

Petrina Kamya, PhD, Head of AI Platforms and President of Insilico Medicine Canada, will present at the BIO CEO & Investor Conference happening Feb. 26-27 at the New York Marriott Marquis in New York City. Dr. Kamya will speak as part of the panel “AI within Biopharma: Separating Value from Hype,” on Feb. 27, 1pm ET along with Michael Nally, CEO of Generate: Biomedicines and Liz Schwarzbach, PhD, CBO of BigHat Biosciences.

The session will look at how the latest artificial intelligence (AI) tools – including generative AI and large language models – are currently being used to advance the discovery and design of new drugs, and which technologies are still in development. 

The BIO CEO & Investor Conference brings together over 1,000 attendees and more than 700 companies across industry and institutional investment to discuss the future investment landscape of biotechnology. Sessions focus on topics such as therapeutic advancements, market outlook, and policy priorities.

Insilico Medicine is a leading, clinical stage AI-driven drug discovery company that has raised over $400m in investments since it was founded in 2014. Dr. Kamya leads the development of the Company’s end-to-end generative AI platform, Pharma.AI from Insilico’s AI R&D Center in Montreal. Using modern machine learning techniques in the context of chemistry and biology, the platform has driven the discovery and design of 30+ new therapies, with five in clinical stages – for cancer, fibrosis, inflammatory bowel disease (IBD), and COVID-19. The Company’s lead drug, for the chronic, rare lung condition idiopathic pulmonary fibrosis, is the first AI-designed drug for an AI-discovered target to reach Phase II clinical trials with patients. Nine of the top 20 pharmaceutical companies have used Insilico’s AI platform to advance their programs, and the Company has a number of major strategic licensing deals around its AI-designed therapeutic assets, including with Sanofi, Exelixis and Menarini. 

 

About Insilico Medicine

Insilico Medicine, a global clinical stage biotechnology company powered by generative AI, is connecting biology, chemistry, and clinical trials analysis using next-generation AI systems. The company has developed AI platforms that utilize deep generative models, reinforcement learning, transformers, and other modern machine learning techniques for novel target discovery and the generation of novel molecular structures with desired properties. Insilico Medicine is developing breakthrough solutions to discover and develop innovative drugs for cancer, fibrosis, immunity, central nervous system diseases, infectious diseases, autoimmune diseases, and aging-related diseases. www.insilico.com 


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Another country is getting ready to launch a visa for digital nomads

Early reports are saying Japan will soon have a digital nomad visa for high-earning foreigners.

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Over the last decade, the explosion of remote work that came as a result of improved technology and the pandemic has allowed an increasing number of people to become digital nomads. 

When looked at more broadly as anyone not required to come into a fixed office but instead moves between different locations such as the home and the coffee shop, the latest estimate shows that there were more than 35 million such workers in the world by the end of 2023 while over half of those come from the United States.

Related: There is a new list of cities that are best for digital nomads

While remote work has also allowed many to move to cheaper places and travel around the world while still bringing in income, working outside of one's home country requires either dual citizenship or work authorization — the global shift toward remote work has pushed many countries to launch specific digital nomad visas to boost their economies and bring in new residents.

Japan is a very popular destination for U.S. tourists. 

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This popular vacation destination will soon have a nomad visa

Spain, Portugal, Indonesia, Malaysia, Costa Rica, Brazil, Latvia and Malta are some of the countries currently offering specific visas for foreigners who want to live there while bringing in income from abroad.

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With the exception of a few, Asian countries generally have stricter immigration laws and were much slower to launch these types of visas that some of the countries with weaker economies had as far back as 2015. As first reported by the Japan Times, the country's Immigration Services Agency ended up making the leap toward a visa for those who can earn more than ¥10 million ($68,300 USD) with income from another country.

The Japanese government has not yet worked out the specifics of how long the visa will be valid for or how much it will cost — public comment on the proposal is being accepted throughout next week. 

That said, early reports say the visa will be shorter than the typical digital nomad option that allows foreigners to live in a country for several years. The visa will reportedly be valid for six months or slightly longer but still no more than a year — along with the ability to work, this allows some to stay beyond the 90-day tourist period typically afforded to those from countries with visa-free agreements.

'Not be given a residence card of residence certificate'

While one will be able to reapply for the visa after the time runs out, this can only be done by exiting the country and being away for six months before coming back again — becoming a permanent resident on the pathway to citizenship is an entirely different process with much more strict requirements.

"Those living in Japan with the digital nomad visa will not be given a residence card or a residence certificate, which provide access to certain government benefits," reports the news outlet. "The visa cannot be renewed and must be reapplied for, with this only possible six months after leaving the countr

The visa will reportedly start in March and also allow holders to bring their spouses and families with them. To start using the visa, holders will also need to purchase private health insurance from their home country while taxes on any money one earns will also need to be paid through one's home country.

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