Editorial
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Supreme Court Ruling on Tariffs will not Dampen White House Policy
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 The February 20th Supreme Court of the United States (SCOTUS) ruling on tariffs was clear in its 6-3 majority decision to restrain the Administration from imposing tariffs. The Court concluded that the President was not empowered to apply the International Emergency Economic Powers Act of 1997 to impose tariffs. It was the decision of the majority that tariffs were effectively taxes and therefore the purview of Congress. The erratic imposition of tariffs on trading partners without any clear indication of a comprehensive strategy has impacted farmers and the U.S. agricultural economy. Tariffs especially if capricious result in retaliation and specifically impede exports of agricultural commodities where the U.S. is vulnerable.
The National Farmers Union stated, “Over the past year, tariffs have raised input costs, disrupted export markets and incurred retaliation against U.S. agricultural goods. In an already fragile farm economy, uncertainty has hit family operations hardest.”
Rep. Angie Craig (D-MN) the Ranking Member of the House Agriculture Committee welcomed the SCOTUS ruling although emphasizing the damage to farmers from reduced exports of agricultural commodities in the current season. She observed “Losses will take years to recover since markets have been handed to competitors like Argentine and Brazil.”
Scott Metzger, president of the American Soybean Association pointed to the double jeopardy of increased costs to farmers for imported fertilizer, seeds and pesticides coupled with declining export volume that has depressed unit prices. He stated “Moving forward, certainty and dependable market access will be essential for U.S. soy to remain competitive globally.” He added “We urge the President to refrain from imposing tariffs on agricultural imports using other authorities”
 Despite the clear decision by SCOTUS, the Administration is pursuing alternative strategies to retain tariffs, the legality of which have yet to be tested. Congress has been remiss in imposing its constitutionally accorded authority over trade, encouraging the White House to adopt policies unhindered by restraint. Despite the SCOTUS ruling, it is anticipated that the issue with consequential and collateral damage will persist through prolonged litigation or until Congress exerts its authority.
Farmers have been placed at a competitive disadvantage with respect to their counterparts in Brazil, Argentina and other Latin American Nations with respect to supplying available markets. It appears that the Administration intends to reimburse farmers in tranches of public funding with an initial “bridging” amount of $12 billion to be followed by $25 billion. This will be at the expense of the national debt.
A fresh approach to tariffs is urgently required since White House policy has clashed with the law of unintended consequences. An “Eye-for-Eye” succession of tariffs will end up blinding all parties and generating hardship within the U.S. agricultural and industrial sectors.
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Poultry Industry News
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The Meat Institute Opposes Family Grocery and Farmer Relief Act
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 Following release of proposed legislation entitled the Family Grocery and Farmer Relief Act, The Meat Institute reacted characterizing the proposal “as absurd”. Julie Anna Potts, CEO of the organization, observes that the proposal championed by Chuck Schumer, Senate Minority Leader would have negligible impact on retail meat price but would disrupt the industry.
If the packers of beef are acting in collusion to the detriment of feeders why are they losing money on every head? Mack Graves cites The Beef Industry Profit Tracker that documented a progressive loss for packers over 2024 through 2026 (to date) ranging from $75 to $205 per head. These figures are consistent with quarterly financial reports posted by Tyson Foods Inc. In contrast cow/calf operators have benefitted from increased margins ($114 to $1,123 per head) and the Feeders, intermediates in the production chain, ranged from a positive margin of $114 to $157 per head)
It is obvious to politicians and consumers alike that the price of red meat is unacceptably high. This is due to a disparity between supply and demand. Cattle inventories are at their lowest level for seven decades, attributed to drought, cold winters and financial pressures on ranchers and feedlot operators. Importation has been curtailed by inappropriate and erratic imposition of tariffs. Availability has been impacted more recently by intermittent and now prolonged closures of the Southern border as a result of outbreaks of New World screwworm in Mexico.
 Forcing the major red meat packers to divest operations would disrupt the supply chain, inhibit investment and expansion and would be antithetical to efficiency and low cost. Mandating that the major producers fragment their businesses would deny packers the economies of scale and indirectly lead to even higher prices. When politicians and bureaucrats contrive to “fix” a problem, unintended consequences emerge, requiring reversals and a restoration to the status quo. The proposed break-up of red-meat processors would represent a slippery slope ultimately impacting broiler integrations.
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NFU Supports House Farm Bill
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In a recent statement, the National Farmers Union praised the House Committee on Agriculture in marking-up The Farm, Food and National Security Act of 2026.
NFU president Rob Larew noted, “We recognize the hard work that went into this mark-up. Bipartisan progress in today’s Congress is not insignificant, and we are grateful to the members who engaged seriously with the challenges facing family agriculture.” Notwithstanding the achievement, enactment of a Farm Bill will require considerable work in both chambers of Congress with the inevitable pressure exerted by lobbyists representing agricultural organizations.
The proposed Farm bill has been delayed for over a year by bipartisan differences, especially with respect to food benefits and the required magnitude of support for farmers who have been impacted by an erratic tariff policy reflecting a lack of a comprehensive and progressive economic program.
Corporate consolidation in the red meat sector will also be contentious as conflicting opinions on the reasons for escalation in the price of red meat swirl around both House and Senate.
Larew concluded the NFU statement by urging a concerted effort to resolve differences, stating, “The challenges facing family farmers and ranchers are urgent, and the final Farm Bill must reflect that reality.”
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Brands Withdrawing from “Better Chicken Commitment”
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Activist Watch Weekly, prepared by Will Coggin of the Berman Group has reported that major UK brands including KFC, Nando’s and Popeye’s have withdrawn from the “Better Chicken Commitment”.
The obligations implicit in the various levels of the “Better Chicken Commitment” are antithetical to sustainability and have increased the cost of product. There is a growing realization that consumers are opting for lower cost of raw and prepared chicken and now place less emphasis on welfare in the purchase decision.
Over the past decade, welfare organizations including Humane World, Mercy for Animals, the SPCA and the Humane League have individually or collectively coerced retailers, distributors of branded eggs, chicken, turkey and derived products to accept onerous and scientifically indefensible welfare standards. These organizations are less interested in flock welfare than they are in ultimately destroying all intensive livestock production in pursuit of a vegan agenda.
Although a number of producers have modified housing and production practices to conform to the lowest tier of the “Better Chicken Commitment”, the realities of successive escalation in standards are now apparent and the marketing benefit from certification is now in question.
The Center for the Environment and Welfare, supported by the food industry has created a new website www.environmentandwelfare.com that posts reports on the environmental impact and activities of welfare organizations and pending legislation.
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Ag Groups Urge Continued U.S. Participation in WTO
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 Despite the prevailing policy of the current Administration to reject participation in international organizations, the U.S. Agriculture Coalition for WTO Reform has urged continued membership. The Coalition includes the USA Poultry and Egg Export Council (USAPEEC), the National Pork Producers Council (NPPC) and other organizations representing agricultural commodities.
As with many international organizations, required changes require prolonged discussion, review and in some cases blatant obstruction as is the situation with the WTO comprising 164 member countries. Notwithstanding obstacles, the United States Trade Representative, Ambassador Jamieson Greer, has made some progress through bilateral workarounds “superseding WTO commitments including a lift of trade barriers that are in violation of WTO rules”. Areas of concern include unnecessary phytosanitary requirements and delayed registration of establishments.
The Coalition considers that an active U.S. involvement in the WTO can support bilateral trade agreements that are favored by the President. The NPPC noted that, “U.S. engagement with the leadership among the WTO membership is essential to U.S. agricultural interests.”
In the letter addressed to the USDA Under Secretary for Trade and Foreign Agricultural Affairs, the Coalition urges support for the WTO as “The agreement provides more predictable market access and results in reduced trade distortions in agricultural markets.”
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AgriStats Antitrust Trial to Proceed
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U.S. District Judge, John R. Tunheim, has ruled that the bench trial of the action brought by the Federal Trade Commission and six states will begin on May 4th. The Defendant, AgriStats had argued that proceeding with the trial before a scheduled civil antitrust lawsuit would be prejudicial and would violate the Seventh Amendment rights of the company. This contention was rejected by Judge Tunheim based on a Supreme Court precedent. The presiding judge also invoked the Sherman Antitrust Act requiring courts to proceed “as soon as possible in government enforcement actions” and that to delay “would not serve the interest of justice”.
In United States v. AgriStats, the FTC and the states of California, North Carolina, Tennessee, Minnesota, Texas and Utah allege that the company “engaged in an unlawful information-sharing conspiracy with major broiler, chicken, turkey and pork processors”.
To date, the Co-Defendants represented by broiler and turkey integrators and pork packers have settled with Plaintiffs leaving AgriStats as the only Defendant.
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Costco Wholesale Corporation Posts Q2 FY 2026 Results
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 On May 3rd Costco Wholesale Corporation (COST) posted results for Q2 FY 2026 ending February 15th 2026 exceeding consensus estimates on EPS.
For Q2 Costco reported earnings of $2,035 million on revenue (sales and membership fees) of $69,597 million with a diluted EPS of $0.84. For the corresponding Q2 of FY 2025, Costco earned $1,788 million on revenue of $63,723 million with a diluted EPS of $4.02. Comparing Q2 of 2026 with the corresponding quarter of FY 2025, sales were 9.2 percent higher; Gross margin increased from 10.8 percent for Q2 FY 2025 to 11.2 percent for the most recent quarter. Operating margin increased from 8.9 percent in Q2 2025 to 9.0 percent for Q2 FY 2026.
Revenue YTD for 2026 was $136,924 up 8.8 percent over the corresponding 24-week period in 2025. Adjusted comparable sales for the 26 weeks ending March 1st were 6.4 percent for the entire Company, with the U.S. at 6.1; Canada at 8.2 and Other International at 6.4 percent. Digital sales were up by 21.3 percent. Overall comparable same-store sales were up 6.7 percent attributed to increases of 3.1 percent in traffic and 3.5 percent in ticket value.
Issues reviewed at the Investors’ Call included the impact and legality of erratic and unpredictable tariffs. According to Ron Vachris CEO, one third of the 4,000 SKUs are imported. Costco management will do all possible to restrain price increases and to possibly reimburse customers should this be practical or achievable. The Company is upgrading checkout procedures to enhance customer satisfaction.
Worldwide Costco posted an 89.7 percent membership renewal rate and a 4.8 percent increase in total membership to 82.1 million.
On February 15th 2026 Costco posted total assets of $83,639 million. Long-term debt and lease obligations amounted to $10,789 million.
Costco had an intraday market capitalization of $442,520 million on March 11th 2026. The Company has traded over the past fifty-two weeks over a range of $844.06 to $1,067.08 with a 50-day moving average of $967.08. COST trades with a forward P/E of 49.0. On March 3rd 2026 COST closed at $1,006.71 pre-release but traded at a low of $958.03 at noon post-release recovering to $990.48 at the close on March 11th.
 Twelve-month trailing operating margin was 3.7 percent and profit margin 3.0 percent. The Company generated a return on assets of 8.7 percent and 29.7 percent on equity
Costco operates 924 warehouses with 624 in the U.S., 114 in Canada, 42 in Mexico and the remainder in 11 nations. Expansion plans are for 30 additional warehouses worldwide annually over the proximal five years.
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Conflict Over EID Tags for Livestock Continues
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 Groups representing ranchers including the New Civil Liberties Alliance and R-Calf USA are embroiled in litigation with the USDA over electronic identification (EID) ear tags for cattle to be transported over state lines. Resistance to adoption has persisted for a number of years since USDA required EID ear tags in place of less expensive visual tags. The argument that EID tags are a financial burden should be viewed against the 2026 estimated margin of $1,123 per head accruing to cow/calf ranchers as estimated by the Beef Industry Profit Tracker.
 The USDA maintains that the EID tags are necessary to reduce errors in livestock tracking, critical to control of disease. This is especially important given the emergence of New World screwworm infestation in Mexico. Without a durable ID and tracking system the export market might be placed in jeopardy in the event of an extensive disease outbreak.
Essentially EID tags reflect progress in the control of livestock disease and are superior in preventing fraud and illegality that could occur with the visual-only tags.
 The ear tag issue has become a question of “rights” representing opposition to state and federal mandates and regulations that are intended to improve livestock and human health. The growing “rights” movement is exemplified by passage of hastily enacted state laws and local ordinances allowing the distribution of raw milk, parental involvement in school curriculums and vaccination.
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Impact of Closure of Tyson Foods Beef Plant in Lexington, NE.
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In a move to reduce losses and facing the reality of a prolonged shortage of slaughter stock, Tyson Foods commenced layoffs in January 2026 at the Lexington, NE. beef plant that has been shuttered.
The University of Nebraska-Lincoln has calculated that closing the Lexington plant would have an annual state-wide impact of $3.3 billion. The plant had a nominal capacity of 5,000 head per day, representing close to five percent of total throughput. The plant closure will result in a loss of 3,000 jobs in a community of 11,000 suggesting a serious disruption in the affected town and surrounding Dawson County.
 Over the past three years, beef packers have experienced losses extending from $75 per head in 2024 to $205 per head predicted for 2026. It is a matter of record that Tyson Foods is attempting to rationalize their beef business by ‘right-sizing” a euphemism for terminating unprofitable plants and facilities. For Q1 FY 2026 their Beef Segment posted a GAAP loss of $319 million on sales of $5,771. In contrast the Chicken Segment generated an operating profit of $450 on sales of $4,212 million.
The U.S. Department of Labor announced in mid-March that $1.6 million would be awarded to the Nebraska Department of Labor for training services and expenses involved in reemployment for displaced workers. Funding was provided through the Workforce Innovation and Opportunity Act of 2014.
Tyson had every opportunity to predict the decrease in the number of animals available and could have initiated contingency plans dictated by the adverse operating environment. It is not unreasonable to expect that Tyson Foods should be responsible for relocation of employees, retraining and other direct expenses incurred by terminated employees and the State of Nebraska.
Given the beef cycle and the reduction in the cow-calf herd, it will be three years before there is any increase in availability of slaughter stock and the impact of the multi-year progressive decline in the breeding herd due to drought, competition from imports and inflation
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USDA to Erect Screwworm Fly Irradiation Facility
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According to Brooke Rollins, Secretary of the USDA, the irradiation plant to propagate sterile male New World screwworm Cochliomyia hominivorax (NWS) flies will be located once again on the Moore Airbase with a projected ultimate completion date in November 2027. Initially, the plant will produce 100 million sterile flies each week. The capacity will subsequently be expanded to achieve an output of 300 million sterile flies weekly. USDA produces 100 million sterile flies per week at a facility in Panama for dispersal in affected areas in Mexico. In the short term, USDA will provide $21 million to renovate and convert an existing irradiation facility designed to suppress fruit flies to NWS and to double production. This facility will be operated by the Commission for the Eradication and Prevention of Screwworm (COPEG) and will commence production during the summer of 2026.
The Moore Airbase plant will be designed and erected by the Army Corp of Engineers and will allow the U.S. to be independent of supplies of sterile male screw worm flies from Central America and Mexico.
 
Although screw worm infestation was suppressed to the point of eradication in the U.S. by 1966 through dispersal of sterile male flies and from North America extending from the Panama Canal to the Southern U.S. border by the late 1990s.
Nature is resilient and infestation emerged in Guatemala in 2024 and spread to Mexico. This represents a threat to U.S. livestock and wildlife. The USDA-ERS estimate that the emergence of NWS in Texas would have cost the beef industry $1.9 billion in 2024.
The reemergence of New World screwworm indicates the need for widescale deployment of sterile male NWS flies. This will require close cooperation with neighboring nations to detect and eradicate the pest. Reintroduction into “cleared” regions is inevitable requiring surveillance and control over movement of livestock. Collectively regulators in Guatemala and Mexico missed the infestation and allowed spread by both movement of cattle and migration of flies
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Conagra Brands to Extend Arkansas Plant
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Conagra brands will commit $200 million to expand their manufacturing facility in Fayetteville, AR. The Arkansas Economic Development Commission announced the project on March 6th with construction to begin in the fourth quarter. The plant produces ready-to-eat products under the Hungry-Man, Banquet, Healthy Choice brands. The expansion will take place over a number of years and will create over 100 new positions.
Craig Weiss, Senior Vice-President of Supply Chain at Conagra Brands stated, “This significant investment in our Fayetteville facility will allow us to continue to grow our leading frozen foods business.”
Clint O’ Neal, Executive Director of the Arkansas Economic Development Commission, stated, “Conagra has been a valued member of the Arkansas business community for years and the company is doubling down on our state with the expansion in Fayetteville.
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Concern Over Oklahoma Environmental Litigation
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 The two decades-long litigation over alleged pollution by major broiler integrators in the Illinois River watershed has led to preliminary settlements that have yet to be approved. To date, Peterson Farms, George’s, Inc., Tyson Foods, Inc. and Cargill, Inc. have agreed to settle with the State Attorney General, Gentner Drummond. Oklahoma has yet to negotiate a settlement with Cal-Maine Foods, an egg producer and Simmons Foods, a broiler integrator.
U.S. Federal District Judge Gregory. Frizzell has raised issues with the proposed settlement relating to Oklahoma v. Tyson Foods, Inc. over long-term implications for disposal of waste. Litter application by existing contractors would be subject to declining increments down to 20 percent of present volume over five succeeding years. The possibility of additional contractors and increased volumes of production in the watershed could negate the beneficial environmental effects of the settlement. If Judge Frizzell refuses to sanction the settlement agreements the co-defendants have signaled their intention to resort to the 10th Circuit Court of Appeals
Blayne Arthur the Secretary of the Oklahoma State Department of Agriculture and Jeff Starling Secretary of the Department of Energy and Environment have questioned the proposed settlement. Negotiations were initiated in 2005 by then Attorney General Drew Edmonds after a federal judge ruled that the eleven poultry companies were responsible for phosphorus pollution in the Illinois river watershed. The Secretaries have urged scrutiny of the proposed settlements they characterize as “imbalanced”. In their comments, the Secretaries consider that the settlement would result in a “fragmented regulatory landscape in which companies competing in the same market operate under dramatically different rules”. The proposed settlement also allows the Oklahoma Attorney General, to decide on payments without recourse to the Legislature.
Disposal of poultry waste previously applied to agricultural land will be subject to increased regulation given the potential for eutrophication from phosphorus runoff into waterways suggesting alternative methods of disposal or pre-treatment before application.
Expedient resolution of the impasse is important since Tyson Foods will not place chicks with contractors operating in the Illinois River watershed until a settlement is finalized.
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Shane Commentary
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