Drought spreads in key U.S. crop states

By Karl Plume

(Reuters) – A harsh drought grew more severe across major parts of the U.S. farm belt this week, threatening recently planted corn, soybean and spring wheat crops in Iowa, Minnesota and the Dakotas, meteorologists and climatologists said on Thursday.

Rains forecast for the northern Midwest and Great Plains this weekend and next week will bring relief to some areas. But the severe moisture deficits suggest crop yields in key U.S. production areas remain at risk.

Drought has already scorched much of the U.S. West, prompting farmers in California to leave fields fallow and triggering water and energy rationing in several states.

Crop development in the central U.S. is highly watched this year as grain and oilseed prices hover around the highest in a nearly a decade and global supplies tighten.

“It’s certainly causing some stress there, especially to the spring wheat,” said Don Keeney, senior agricultural meteorologist with Maxar Technologies.

About 41% of Iowa, the nation’s top corn producer and No. 2 soybean state, was under severe drought as of Tuesday, up from less than 10% a week earlier, according to the weekly U.S. drought monitor published on Thursday.

Cooler weather this weekend and some rain through next week will bring some relief to crops in the western Corn Belt, although far northern areas may see less rain.

“Montana, Nebraska, Minnesota and even northern Iowa would still be a little shortchanged, especially the Dakotas,” Keeney said.

Conditions in North Dakota, the top producer of high-protein spring wheat that is used in bread and pizza dough, remained dire, with about two-thirds of the state under extreme or exceptional drought, the most severe categories.

October to April was the driest stretch in North Dakota history since record keeping began 127 years ago, Gov. Doug Burgum told a town hall meeting in Washburn, North Dakota, on Wednesday.

“We know that we’ve got a full-blown crisis in the state,” Burgum told the meeting.

More than 100,000 acres, or 156 square miles, of North Dakota have already burned in wildfires this year, up from about 12,000 for the entire fire season last year, Burgum said.

Farmer and North Dakota Grain Growers Association Director Cale Neshem called the heat and dryness a “double whammy” that will slash his wheat harvest.

“There’s not going to be much there,” he said.

Drought in the western Corn Belt has already likely trimmed the U.S. corn yield average by 2 to 4 bushels per acre, said Dan Basse, president of AgResource Co in Chicago.

However, conditions in July and August, critical months for corn and soybeans, respectively, will determine the extent of yield losses and the price response, he said.

Grain and soybean futures on the Chicago Board of Trade fell sharply on Thursday as rain in the near-term forecast triggered risk-off selling.

“If we don’t get the rain, it’s going to be something to behold on the upside (for prices) because the yields will fall off the table,” Basse said.

(Reporting by Karl Plume, Tom Polansek and Julie Ingwersen in Chicago; editing by Jonathan Oatis)

U.S. Supreme Court backs Catholic group that shunned gay foster parents

By Lawrence Hurley and Andrew Chung

WASHINGTON (Reuters) -The U.S. Supreme Court embraced religious rights over LGBT rights on Thursday by ruling in favor of a Catholic Church-affiliated agency that sued after Philadelphia refused to place children for foster care with the organization because it barred same-sex couples from applying to become foster parents.

The 9-0 ruling, written by conservative Chief Justice John Roberts, was a victory for Catholic Social Services (CSS), part of the Archdiocese of Philadelphia, and represented the latest instance of the Supreme Court taking an expansive view of religious rights under the U.S. Constitution.

The justices decided that Philadelphia’s refusal to use Catholic Social Services for foster care services unless it agreed to certify same-sex couples as foster parents violated the Constitution’s First Amendment guarantee of the free exercise of religion.

Catholic Social Services argued that Philadelphia had penalized it for its religious views and for following church teachings on marriage.

In the ruling, Roberts wrote, “CSS seeks only an accommodation that will allow it to continue serving the children of Philadelphia in a manner consistent with its religious beliefs; it does not seek to impose those beliefs on anyone else.”

Conservative and religious advocacy rights groups cheered the decision – and the fact that the court’s three liberal members joined the six conservative justices – saying it will have a major impact on future legal disputes involving religious beliefs.

“This is a strong ruling in favor of religious freedom, especially for social services providers,” said Lori Windham, a lawyer for the Becket Fund for Religious Liberty, which represented the agency and three foster parents in the case. “The court recognized that it is not the government’s place to exclude religious agencies because of their religious beliefs.”

“I am grateful that we can finally rest knowing that the agency that has brought my family together can continue to do the same for other families,” said Toni Lynn Simms-Bush, who has served as a foster parent through Catholic Social Services and was one of the plaintiffs.

‘SELECTIVE ASSESSMENT’

The justices decided that foster care certification provided by Catholic Social Services did not fall under the city’s anti-discrimination ordinance because it is a service not “readily available” to the public.

“It involves a customized and selective assessment that bears little resemblance to staying in a hotel, eating at a restaurant or riding a bus,” Roberts wrote.

The Supreme Court declined to take even-broader action in the form of overruling its 1990 precedent that upheld “generally applicable” laws even if they curb religious freedom. Conservative Justices Samuel Alito, Clarence Thomas and Neil Gorsuch said the court should have overruled that precedent.

LGBT and other liberal advocacy groups called the ruling troubling but said they were relieved it did not go further.

“Foster care is a government function, and all governments have a compelling interest in ensuring their contract agencies, including faith-based ones, treat all children and families equally. And today’s ruling does mean, at least for now, that different-sex married couples have access to all city agencies, while same-sex couples do not,” M. Currey Cook of the Lambda Legal pro-LGBT rights group said.

Catholic Social Services, which has helped provide foster care services for more than a century, had said it would be compelled to close its foster care operations if it was barred from Philadelphia’s program.

Philadelphia in 2018 suspended foster care referrals to Catholic Social Services after a newspaper report about the organization’s policy against same-sex couples as foster parents, leading the agency to file suit. Catholic Social Services said Philadelphia’s action meant that available foster homes were sitting empty amid a foster care crisis in the city of about 1.5 million people.

The Philadelphia-based 3rd U.S. Circuit Court of Appeals in 2019 ruled against Catholic Social Services, saying it had not shown that the city had treated it differently because of its religious affiliation. U.S. District Judge Petrese Tucker in 2018 also ruled against the organization.

Eleven of the 50 states currently allow private agencies to refuse to place children with same-sex couples, according to the Movement Advancement Project, a group backing gay rights.

The Supreme Court in recent years has sent mixed messages on the conflict between LGBT and religious rights.

It backed gay rights in a series of landmark rulings including a 2015 decision legalizing same-sex marriage nationwide and a 2020 ruling that a federal law barring workplace discrimination protects gay and transgender employees.

It also bolstered religious rights in several decisions including a 2014 ruling that let owners of businesses raise religious objections against the government.

No same-sex couple ever sought certification as a foster parent from Catholic Social Services. In addition to same-sex couples, it also will not certify unmarried couples as foster parents, but does not object to certifying individual gay people.

(Reporting by Lawrence Hurley; Editing by Will Dunham)

Together again: Elderly New Yorkers rejoice as senior centers reopen

By Maria Caspani

NEW YORK (Reuters) – After more than a year of pandemic-forced separation, 85-year old Justo Fleitas was back at the pool table at his neighborhood’s senior center, finally reunited with a small group of friends and his cue stick.

“It’s beautiful, no words to say how I feel,” said Fleitas, an avid pool player and a regular at the Star Senior Center in Manhattan.

On Monday this week, senior centers in New York City welcomed back the city’s elderly for indoor activities after being closed for more than a year.

Fleitas, who left Cuba for the United States in his 20’s, worked as a barber until he retired more than 20 years ago. After being confined at home with his wife during the coronavirus pandemic that ravaged New York, he said he has been eagerly waiting for the center to reopen.

He was far from alone in that pent up anticipation.

“Before we opened, seniors were already calling, asking for us to reopen,” said Maggie Hernandez, a program coordinator at Star Senior Center. “They were preparing themselves for weeks for this to happen.”

Centers such as the one in the Washington Heights neighborhood of Upper Manhattan are a lifeline for many senior citizens who rely on them for food, companionship and recreation.

When the pandemic shut them down last spring, along with most other activities, some older New Yorkers, at particularly high risk for severe COVID-19, were forced to hunker down at home, often alone.

Staff at Star Senior Center made some 35,000 wellness calls to its seniors who reported suffering from isolation, anxiety and depression, Hernandez said.

‘MISSED HERE SO MUCH’

On the first day of reopening, the center was bustling at lunch hour. Gaggles of seniors gathered around the large tables spread out around the room, filling the place with animated conversations for the first time in more than a year.

Helen Anderson started frequenting the Star Senior Center a few years ago, attracted by its diversity. When the pandemic hit, Anderson said she “tried to survive” by speaking on the phone with the center’s staff.

“Oh my goodness, I missed here so much,” said Anderson, 72, as she tucked a face covering under her glasses to keep it from sliding down.

Anderson, who lives alone, said she started seeing her daughter in person during the Christmas holidays late last year, although she did not allow her inside the apartment for fear of getting sick.

The retired nurse said she religiously watched New York City Mayor Bill de Blasio’s daily news conferences hoping for an announcement about the reopening of senior centers.

On June 1, de Blasio said senior centers could resume outdoor activities and indoor gatherings would resume on June 14.

“Seniors bore the brunt of the COVID crisis, they were the most vulnerable,” the mayor said at the time of the announcement.

New Yorkers 75 and older were hospitalized for COVID-19 at rates four times higher than the rest of the population and died at seven times the rate of the rest of the residents, city health data shows https://www1.nyc.gov/site/doh/covid/covid-19-data-totals.page#summary.

About 128 of the 250 senior centers in the Department for the Aging’s (DFTA) network were reopening as of late Tuesday, according to a spokesperson for the department.

Some centers were still wrestling with the logistics of how to safely resume operations as they are open to both vaccinated and unvaccinated seniors.

“Senior centers are notoriously small places,” said Abbie LeWarn, the assistant director of the Queens Center for Gay Seniors.

Prior to the pandemic, up to 70 seniors would frequent that center daily, said LeWarn. But having a tight space with few windows was one of the hurdles to a safe reopening, despite seniors’ excitement.

On Tuesday, New York Governor Andrew Cuomo lifted most remaining COVID-19 restrictions. But safety measures like face coverings and social distancing will remain in place at senior centers, at least for now, DFTA said, citing unchanged guidance from the New York City Department of Health and Mental Hygiene.

Despite the rain, more than 40 members showed up to Star on Monday. About 150 seniors would frequent the center on a typical day before the pandemic, Hernandez said.

A small but determined group of elderly women stretched with the aid of chairs and moved to the beat of blaring Latin music, taking their cue from an instructor who shouted words of encouragement into a microphone.

“We’re all so thrilled to be back,” Hernandez said.

(Reporting by Maria Caspani, Editing by Bill Berkrot)

Russian-annexed Crimea declares state of emergency over floods

MOSCOW (Reuters) – Authorities in Russian annexed Crimea declared a local state of emergency on Thursday after heavy rain caused flooding in parts of the peninsula’s east including the city of Kerch.

The flooding affected nearly 300 homes and a city hospital, the emergencies ministry said.

Whole streets were submerged in water in parts of the city. In one place a fire engine could be seen driving through deep water towards a submerged passenger bus in a video posted online. Some cars were almost completely under water.

“In terms of material damage, the situation is severe. But now commissions have been set up, a regional emergency has already been declared,” Sergei Aksyonov, head of the Russian authorities, was quoted by Interfax news agency as saying.

Russia annexed Crimea from Ukraine in 2014. Kyiv wants the peninsula back.

Aksyonov was shown on a boat in Kerch, surveying the flooding in video circulated by the RIA news agency.

(Reporting by Maxim Rodionov and Elena Ostrovskaya; writing by Tom Balmforth; editing by Barbara Lewis)

Chinese astronauts board space station module in historic mission

By Carlos Garcia and Shubing Wang

JIUQUAN, China (Reuters) -Three Chinese astronauts on Thursday flew to an unfinished space station in China’s first crewed mission since 2016, expanding the country’s already growing near-Earth presence and challenging U.S. leadership in orbital space.

The astronauts rode to Tianhe – the module that will be the living quarters of China’s completed space station – on Shenzhou-12, or “Divine Vessel.” The crew boarded the module, where they will live for three months, the longest stay in low-Earth orbit by any Chinese national.

China’s space station, due to be finished by end-2022, will be the only alternative to the two-decade-old, U.S.-led International Space Station (ISS), which may be retired in 2024.

If the ISS – backed mainly by the United States, Russia, Japan, Europe and Canada – is decommissioned, China would be the operator of the only active space station. That would potentially give it greater power in shaping future norms and regulations for near-Earth space, which is already teeming with Chinese satellites.

“At this current stage, we haven’t considered the participation of international astronauts, but their future participation will be guaranteed,” said Zhou Jianping, chief designer of China’s manned space program.

“I’m aware that many countries have expressed their wish in this regard,” Zhou told foreign reporters at the Shenzhou launch site in northwestern Gansu province.

Shenzhou-12 is the third of 11 missions – four of which will be crewed – needed to complete China’s first full-fledged space station. Construction began in April with the launch of Tianhe, a cylinder-like module slightly bigger than a city bus.

The Shenzhou-12 astronauts Nie Haisheng, 56, Liu Boming, 54, and Tang Hongbo, 45, will test out technologies on Tianhe including its life-support system. They will also be monitored for how they fare in space physically and psychologically. An upcoming mission to the space station will last six months.

Barred by U.S. law from working with NASA and by extension on the ISS, China has spent the past decade developing technologies to build its own space station, in addition to planning missions to the moon, Mars and other planets.

China plans to allow Hong Kong astronauts to join future missions, Zhou also said.

‘FIRST BATON’

“This will be the first crewed flight in the space station (construction) phase, and I’m lucky to be able to have the ‘first baton’,” Nie told reporters a day before the launch.

The veteran astronaut has been hailed by his team as a bastion of stability and a teacher figure who constantly challenges others with tough questions.

“As long as we have him in our hearts, we have nothing to fear,” fellow astronaut Wang Yaping, who is part of the Shenzhou-12 backup team, told state media previously.

“In our crew, elder brother Nie is like the needle that stills the sea,” she said.

Liu Boming, like Nie, was from the first batch of astronauts selected in the 1990s for China’s space program.

Known for his intellect, Liu is often addressed by his colleagues as “Little Zhuge”, the renowned military strategist who lived in China two millennia ago.

On the Shenzhou-7 mission in 2008, Liu famously used a crowbar to pry open the hatch after it refused to open.

Former air force pilot Tang Hongbo, 45, was from a later batch of astronauts, and trained for more than a decade before being selected for his first spaceflight on Shenzhou-12.

“I’ve waited for 11 years, and finally I’m ready, and I can contribute my strength,” Tang told reporters on Wednesday.

Since 2003, China has launched six crewed missions and sent 11 astronauts into space, including Zhai Zhigang, who carried out China’s first space walk ever on the 2008 Shenzhou mission.

(Reporting by Carlos Garcia and Shubing Wang; Writing by Ryan Woo; Editing by Tom Hogue and Giles Elgood)

Low probability of China trying to seize Taiwan in near term -top U.S. general

By Idrees Ali and Phil Stewart

WASHINGTON (Reuters) -The top U.S. general said on Thursday there was a low probability that China would try to take over Taiwan militarily in the near-term as Beijing has some way to go to develop the capabilities needed.

While there has been increasing concern in Taiwan and among some U.S. lawmakers about Chinese military activity near the island, like flying jets in Taiwan’s air defense identification zone (ADIZ), U.S. military officials have told Reuters that such moves are not overly concerning.

Chairman of the Joint Chiefs of Staff General Mark Milley told lawmakers that while Taiwan was still a core national interest of China, “There’s little intent right now, or motivation, to do it militarily.”

“There’s no reason to do it militarily, and they know that. So, I think the probability is probably low, in the immediate, near-term future,” Milley said during a Congressional hearing.

“My assessment in terms of capability, I think China has a ways to go to develop the actual, no-kidding capability to conduct military operations to seize through military means the entire island of Taiwan, if they wanted to do that,” he added.

The United States is Taiwan’s strongest international backer and main source of arms, which angers China.

Beijing says the democratically ruled island is part of “one China” and routinely denounces foreign involvement as an interference in its internal affairs.

Democratic and Republican members of the U.S. House of Representatives will introduce legislation this week seeking to boost U.S. support for Taiwan, part of an effort in Congress to take a hard line in dealings with China.

NATO leaders, encouraged by U.S. President Joe Biden, warned at a summit on Monday that China presents “systemic challenges,” taking a more forceful stance towards Beijing.

Earlier this week, twenty-eight Chinese air force aircraft, including fighters and nuclear-capable bombers, entered Taiwan’s ADIZ, the largest reported incursion to date.

Like most countries, the United States has no formal diplomatic ties with Taiwan.

(Reporting by Idrees Ali and Phil Stewart; Editing by Alistair Bell)

U.S. House backs repeal of 2002 war authorization in bid to end ‘forever wars’

By Patricia Zengerle

WASHINGTON (Reuters) -The U.S. House of Representatives on Thursday backed the repeal of the 2002 Authorization for the Use of Military Force that allowed the war in Iraq, as lawmakers pull back the authority to declare war from the White House.

The House voted 268 to 161 in favor of revoking the authorization it gave former President George W. Bush to invade Iraq 19 years ago. At least 49 Republicans joined Democrats in favor of repeal, a bipartisan vote that underscored prospects for reining in AUMFs that presidents from both parties have used to justify nearly 20 years of military actions around the globe.

The U.S. Constitution gives the power to declare war to Congress. However, that authority has shifted to the president due to the “forever war” AUMFs, which do not expire – including the 2002 Iraq AUMF and one allowing the fight against al Qaeda and affiliates after the Sept. 11, 2001, attacks on the United States.

To be enacted, the measure passed on Thursday must also be approved by the Senate – where its prospects are less certain – and signed into law by President Joe Biden, who has said he supports it.

“I look forward to Congress no longer taking a back seat on some of the most consequential decisions our nation can make,” said Representative Greg Meeks, chairman of the House Foreign Affairs Committee, urging support for the repeal.

“There comes a time when certain AUMFs simply become outdated and need to be repealed,” Meeks said.

‘DANGEROUS MESSAGE’

Opponents worry repeal of the 2002 AUMF would dangerously limit the powers of the president and send the message that the United States is pulling back from the Middle East.

Representative Michael McCaul, the top Republican on the House Foreign Affairs Committee, said he was committed to updating the “outdated” AUMF, but he did not want repeal until an alternative was in place.

“This rushed, standalone repeal… sends a dangerous message of disengagement that could dangerous message, which it will, and strengthen al Qaeda and ISIS in the region,” McCaul said.

Senate Majority Leader Chuck Schumer threw his weight behind the repeal effort on Wednesday. Schumer said the 2002 AUMF is outdated and repealing it would prevent future presidential “military adventurism” such as former President Donald Trump’s 2020 airstrike on a Baghdad airport, which raised fears of war days before the Republican was to leave office.

Trump cited the 2002 Iraq authorization as one of his justifications for the strike, which killed Iranian commander Qasem Soleimani.

Repeal will need 60 votes to get through the evenly divided 100-member Senate, meaning that it would need the support of at least 10 Republicans to go into effect.

Repeal advocates said they had high hopes of garnering the 60 votes, noting past bipartisan support for stalled efforts to rein in the AUMFs.

Senate Republican Leader Mitch McConnell blasted the repeal plan, saying existing authorizations should stay in place until new ones have been completed. “The grave threats posed by ISIS, al Qaeda and other terrorist groups are as real as they’ve ever been,” McConnell said in remarks opening the Senate.

Some members of Congress are also discussing a repeal and replacement of the 2001 AUMF passed for the Afghanistan war.

(Reporting by Patricia Zengerle; Editing by Sonya Hepinstall)

U.S. labor market healing despite unexpected rise in weekly jobless claims

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits increased last week for the first time in 1-1/2 months, but layoffs are easing amid a reopening economy and a shortage of people willing to work.

While other data on Thursday showed factory activity in the mid-Atlantic region continuing to grow at a steady pace in June, a measure of future production surged to its highest level in nearly 30 years. Factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware also reported stepping up hiring, which bodes well for job growth this month.

The scarcity of labor is a hurdle to faster employment growth. The Federal Reserve on Wednesday held its benchmark short-term interest rate near zero and said it would continue to inject money into the economy through monthly bond purchases. The U.S. central bank brought forward its projections for the first post-pandemic interest rate hikes into 2023 from 2024.

“We continue to see labor market progress, but as has been the case through the pandemic, the situation remains fluid,” said AnnElizabeth Konkel, an economist at Indeed Hiring Lab. “We are in a wildly different place than we were in June 2020, but we have not crossed the finish line just yet.”

Initial claims for state unemployment benefits rose 37,000 to a seasonally adjusted 412,000 for the week ended June 12, the Labor Department said. That was the first increase since late April. Economists polled by Reuters had forecast 359,000 applications for the latest week.

The increase in claims was led by California, Kentucky and Pennsylvania. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 8,000 to 395,000.

The economy, ironically, is facing a labor crunch despite employment remaining 7.6 million jobs below its peak in February 2020. A shortage of childcare facilities is keeping some parents, mostly women, at home.

Generous government-funded unemployment benefits, including a $300 weekly check, have also been blamed, as well as a reluctance by some to return to work out of fear of contracting COVID-19 even though vaccines are widely accessible.

Pandemic-related retirements and transitions into new careers are also factors.

Fed Chair Jerome Powell told reporters on Wednesday he was “confident that we are on a path to a very strong labor market, a labor market that shows low unemployment, high participation, rising wages for people across the spectrum.”

The White House also struck an optimistic note on the labor market, with senior economic adviser Jared Bernstein saying: “I saw a labor market that continues to improve, continues to grow as shots in arms and checks in pockets have helped pull this recovery forward.”

Iowa, Mississippi and Missouri terminated all federal government-funded emergency benefits last Saturday, while Alaska ended only the $300 supplement. Twenty-one other states also led by Republican governors, including Texas and Florida, will end these benefits for residents between June 19 and July 10.

Louisiana is ending the weekly supplementary check on July 31, the only state with a Democratic governor to terminate the federal benefits. For the rest of the country, they will lapse on Sept. 6.

Iowa reported an increase in claims for the regular state unemployment insurance program last week, while Alaska, Mississippi and Missouri saw declines. Only Alaska reported a decrease in claims for the government-funded Pandemic Unemployment Assistance.

Economists are watching the 26 states to see if their actions will boost employment or labor force participation over the summer, which could offer clues on labor market trends for the rest of the year when all government aid lapses.

There are a record 9.3 million job openings, while 9.3 million people are officially unemployed.

“We also could see added noise in the claims report if people end up trying to shuffle between programs or re-determine eligibility,” said Daniel Silver, an economist at JPMorgan in New York.

Stocks on Wall Street were mixed while the dollar rose against a basket of currencies. Longer-dated U.S. Treasury prices were trading higher.

STRONG FACTORY HIRING

In a separate report on Thursday, the Philadelphia Fed said its business conditions index dipped to a reading of 30.7 this month from 31.5 in May. But its measure of activity over the next six months surged to 69.2, the highest level since 1991, from 52.7 last month.

The survey’s gauge of factory employment in the mid-Atlantic region surged to 30.7 from a reading of 19.3 May. Factories also anticipated hiring more workers over the next six months, which offers further support to the labor market. Many, however, reported that labor shortages and supply chain bottlenecks were constraining their ability to fully use their resources.

Though layoffs are easing, initial claims remain well above the 200,000-250,000 range that is viewed as consistent with healthy labor market conditions. Claims have, however, dropped from a record 6.149 million in early April 2020.

Last week’s claims data included the period during which the government surveyed business establishments for the nonfarm payrolls component of June’s employment report. The economy created 559,000 jobs in May after adding 278,000 in April.

To get a better picture of how hiring fared in June, economists will await data next week on the number of people continuing to receive benefits after an initial week of aid.

The so-called continuing claims, which are reported with a one-week lag, edged up 1,000 to 3.518 million in the week ended June 5. There were 14.8 million people collecting unemployment checks under all programs at the end of May.

(Reporting by Lucia Mutikani; Additional reporting by Evan Sully and Trevor Hunnicutt; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao)

Stung by pandemic and JBS cyberattack, U.S. ranchers build new beef plants

By Tom Polansek

CHICAGO (Reuters) – U.S. cattle ranchers and investors are sinking hundreds of millions of dollars into new beef plants after temporary closures of massive slaughterhouses at the start of the COVID-19 pandemic left farmers with nowhere to send animals destined to be turned into meat.

A cyberattack against the U.S. unit of Brazilian meatpacking giant JBS SA that idled nearly a quarter of America’s beef production earlier this month again highlighted vulnerabilities in the country’s meat supply chain and caused more headaches for farmers.

Ranchers, as well as the U.S. Agriculture Department (USDA), say the sector is too consolidated and therefore reliant on a handful of large processors and their industrial meatpacking plants.

Four industry behemoths – JBS USA, Tyson Foods Inc, Cargill Inc and National Beef Packing Company – slaughter 85% of grain-fattened cattle carved into steaks, ribs and roasts for consumers.

Smaller startup meat plants are aiming to provide local ranchers with more places to slaughter cattle, particularly those raised to produce higher-quality beef. They say adding plants can ensure some meat production continues if large facilities close.

When large meat plants close, meat supplies tighten while ranchers get stuck with cattle that would otherwise have been slaughtered. That means the price of cattle generally falls, while the price of meat in supermarkets rises.

Extended shutdowns of some of the biggest U.S. slaughterhouses due to COVID-19 outbreaks hobbled meat production in spring 2020, leading to limits on consumers’ purchases at grocery stores and a decline in frozen inventories that processors have yet to replenish.

Rusty Kemp saw the need for more processing capacity after a 2019 fire at a Tyson Foods plant in Holcomb, Kansas, left meat buyers scrambling for supplies and cattle producers with nowhere to sell their cattle. Then, the pandemic and ransomware attack on JBS hit.

Kemp is now planning to break ground on a $300 million beef plant in Nebraska this fall.

“We thought the Holcomb fire was an absolute train wreck and then COVID came along and Holcomb didn’t seem that bad,” he said.

Kemp’s plant, named Sustainable Beef, will kill 1,500 cattle a day and use blockchain technology so consumers can track a piece of meat all the way back to the ranch, he said.

Sustainable Beef is co-owned by cattle producers who will provide animals for slaughter to the plant, instead of to major packers, Kemp said. He hired former executives of one of the biggest processors, Cargill, as consultants because of their expertise.

But Kemp said he is not trying to pick a fight with the four major processors and that bigger plants are still needed to produce large volumes of meat.

“We absolutely need more capacity and more players,” Kemp said.

MORE ROOM TO SLAUGHTER

Nationwide, at least five new processing facilities of varying sizes have opened or are planned following supply shocks early in the pandemic. Combined with expansions at existing plants, including one owned by JBS, daily U.S. slaughter capacity is set to increase by about 5%, according to a Reuters calculation and data from industry group the North American Meat Institute.

Market conditions are favorable for new entrants. Cattle supplies are ample, while beef prices and profit margins for packers have soared due to strong exports and demand from U.S. consumers.

In Butler, Missouri, Todd Hertzog and his family opened Hertzog Meat Company this month after considering the project for five years.

Though the $3.75 million plant is only slaughtering about 20 cattle a day, it serves nearby ranchers who want to produce higher-quality beef, said Hertzog, who manages the operation.

“The pandemic opened our eyes to the needs of local producers,” he said.

Production disruptions during the pandemic pushed Cliff Welch to begin construction on a meat processing plant near Central City, Kentucky, at a price tag of more than $1.2 million. The cyberattack on JBS then reinforced Welch’s decision to build the facility, slated to open in late 2021, he said.

Welch aims to slaughter 75 cattle a week to start, with the capability to eventually kill 300 head a week. He said he will produce custom cuts of meat using “old-style butchery” and plans to sell it locally.

“I’m starting from ground zero,” Welch said. “It’s a big undertaking.”

Welch said he received a $250,000 grant from Kentucky for the project.

The U.S. Agriculture Department has pledged to support increased processing as part of a $4 billion initiative to strengthen the country’s food system.

“The hope would be that by spreading out, by creating diversity in size and diversity of ownership and diversity of operations, we create greater resilience,” USDA Secretary Tom Vilsack told reporters after the JBS attack.

Missouri last year paid about $17 million in grants to meat processors with fewer than 200 employees that wanted to expand or build new facilities, state agriculture director Chris Chinn said. The payments doubled the amount of red meat inspected by the state in a program sparked by the pandemic, she said.

“It added stability to our local communities and our rural areas,” Chinn said. “They didn’t have to depend on one local source to get their food.”

SMALLER PLANTS, SAME PROBLEMS

Small facilities are finding they face some of the same challenges as larger outfits, notably a labor shortage, without the benefit of a big corporation behind them.

After opening in March, Missouri Prime Beef Packers struggled to find workers for a plant in Pleasant Hope, Missouri, that now kills about 200 cattle a day, despite putting ads in newspapers and on radio, said Dallen Davies, director of company culture.

The facility is slaughtering cattle raised under special guidelines, such as being grass-fed or certified for humane handling, as a way to add value for ranchers and provide a better product for consumers, Davies said.

Plants need to differentiate themselves because they cannot compete with industry titans on volume or on low prices achieved with mass production lines.

Former President Donald Trump last year said he urged the Justice Department to look into allegations the meatpacking industry broke antitrust law because the price that slaughterhouses pay farmers for animals dropped even as meat prices climbed. U.S. governors and lawmakers are pushing the department to keep probing.

Those involved in slaughterhouse expansion say they still need to do something to give ranchers more options in the meantime.

“We really don’t want to wait around and see if the government is going to solve this problem,” Kemp said. “We decided to take matters into our own hands and do this.”

(Reporting by Tom Polansek in Chicago; Editing by Caroline Stauffer and Matthew Lewis)

Hundreds of vaccinated Indonesian health workers get COVID-19, dozens in hospital

By Kate Lamb, Agustinus Beo Da Costa and Stanley Widianto

JAKARTA (Reuters) -More than 350 doctors and medical workers have caught COVID-19 in Indonesia despite being vaccinated with Sinovac and dozens have been hospitalized, officials said, as concerns grow about the efficacy of some vaccines against more infectious variants.

Most of the workers were asymptomatic and self-isolating at home, said Badai Ismoyo, head of the health office in the district of Kudus in central Java, but dozens were in hospital with high fevers and falling oxygen-saturation levels.

Kudus, which has about 5,000 healthcare workers, is battling an outbreak believed to be driven by the more transmissible Delta variant, which has raised its bed occupancy rates above 90%.

Designated as a priority group, healthcare workers were among the first to be vaccinated when inoculations began in January.

Almost all have received the COVID-19 vaccine developed by Chinese biopharmaceutical company Sinovac, the Indonesian Medical Association (IDI) says.

While the number of Indonesian healthcare workers dying from COVID-19 has dropped sharply from 158 in January to 13 in May, according to data initiative group LaporCOVID-19, public health experts say the Java hospitalizations are cause for concern.

“The data shows they have the Delta variant (in Kudus) so it is no surprise that the breakthrough infection is higher than before, because, as we know, the majority of healthcare workers in Indonesia got Sinovac, and we still don’t know yet how effective it is in the real world against the Delta variant,” said Dicky Budiman, an epidemiologist at Australia’s Griffith University.

A spokesperson from Sinovac was not immediately available for comment on the efficacy of the Chinese firm’s CoronaVac against newer variants of the virus.

The World Health Organization (WHO) approved emergency use of Sinovac’s vaccine this month, saying results showed it prevented symptomatic disease in 51% of recipients and prevented severe COVID-19 and hospital stays.

As Indonesia grappled with one of Asia’s worst outbreaks, with over 1.9 million infections and 53,000 deaths, its doctors and nurses have suffered a heavy toll of 946 deaths.

Many are now experiencing pandemic fatigue and taking a less vigilant approach to health protocols after being vaccinated, said Lenny Ekawati, from the independent health-linked data group LaporCOVID-19.

Across Indonesia, at least five doctors and one nurse have died from COVID-19 despite being vaccinated, according to LaporCOVID-19, although one had only received a first shot.

Siti Nadia Tarmizi, a senior health ministry official, did not immediately respond to a request for comment on how many doctors have died since the vaccination program began.

In Kudus, one senior doctor has died, said IDI.

Nadia said there had been no deaths in Kudus since a new outbreak began in the past several weeks among medical workers and that those who contracted COVID-19 have had mild symptoms.

In Jakarta, the capital, radiologist Dr. Prijo Sidipratomo told Reuters he knew of at least half a dozen doctors hospitalized with COVID-19 in the past month despite being vaccinated, with one now being treated in an ICU.

“It is alarming for us because we cannot rely on vaccinations only,” he said, urging people to take precautions.

Weeks after the Muslim Eid Al-Fitr holidays, Indonesia has experienced a surge in cases, with the positivity rate exceeding 23% on Wednesday and daily cases nearing 10,000, its highest since late February.

In its latest report, the WHO urged Indonesia to tighten its lockdown amid increased transmission and a surge in bed occupancy rates.

(Reporting by Kate Lamb in Sydney and Agustinus Beo Da Costa and Stanley Widianto in Jakarta; Editing by Michael Perry, Clarence Fernandez and Bernadette Baum)