In The Headlines
Is Coffee on the Brink?
Coffee crops are under siege from deforestation, abnormally high temperatures, a lack of precipitation, and disease. The global market is heading for its fourth straight year of deficit, according to estimates from Rabobank International. At the same time, global demand for the beloved beverage is expected to reach an all-time high this year, led by demand from younger American consumers. Production will need to increase at least 50% by the middle of this century to keep pace with the demand, says Conservation International, an environmental organization. To cope, the industry is rushing to develop plants that can adapt with the changing environment.
Land suitable to grow the Arabica beans favored by Starbucks Corp. and other specialty roasters will be cut in half worldwide by 2050, according to the World Coffee Research (WCR) institute, a group sponsored by the industry. In Brazil’s Espirito Santo state, output has fallen precipitously, particularly for the Robusta variety of coffee bean. In the last three years, the region has received just 50% of its average rainfall, while temperatures soared far above normal. “It was the worst drought in 80 years,” Romario Gava Ferrao, a researcher at the state-run research institute, Incaper, told Bloomberg. Some farmers have moved to other regions or have invested in other crops such as pepper, he said.
Hugo Ramos, a meteorologist at Incaper, is not sure if the warmer, dryer weather is a permanent change for the region. “We have to study more to understand what will happen in the next years.” The situation has become so dire that the nation is considering importing lower-quality Robusta beans from Vietnam in order to meet demand, an option that has met strong opposition from local farmers.
Leaf rust, a fungal disease that affects both Arabica and Robusta plants, is also devastating the industry. About 18.2 million bags of coffee worth about $2.5 billion were lost to the disease from 2011 to 2016, according to WCR. The loss put 1.7 million people out of work. A warmer planet could mean producers will be forced to contend with more frequent threats to their beans.
To avert a disastrous future without coffee, Christophe Montagnon, a geneticist at the WCR, is leading a global team of researchers in an effort to find existing plants that can survive in a changed climate. “Global warming means that the only places that will remain arable are colder or at higher altitudes,” Montagnon said in an interview.
In a recent experiment, Montagnon’s team took 30 plant varieties from 20 countries and placed them in a controlled environment in Laos, where they were subjected to temperatures as low as 35 degrees Fahrenheit. The seven varieties that survived the cold snap will now be taken to other regions, from Brazil to Guatemala, to see if they can thrive in foreign soils and uncontrolled conditions. Eventually, the coffee plants deemed most resistant to both colder temperatures and leaf-rust will be selected for planting. “We now have these varieties that are resistant to frost,” Montagnon said. The next step is to challenge those varieties in different environments, he said.
Finding coffee plants able to withstand leaf rust may be a bigger challenge. Recent research has shown that resistance is breaking down in some rust-resistant varieties originally developed from the 1950s to the ‘90s. The fungal disease remains common in some areas, particularly the Americas, where it primarily threatens the arabica beans sold by high-end roasters.
Citations
1. https://bloom.bg/2oPy2HM – Bloomberg
2. http://nyti.ms/2qfhJIW – NY Times
Printing Could Be the Future of Home Construction
In recent years, 3D-printing may have been faded away from the spotlight of core disruptive technologies, but that may soon change after several companies demonstrated the ability to 3D-print an entire house in just 24 hours. Building a house completely by hand can be both time-consuming and expensive. A number of homebuilders have chosen to automate part of the construction process by printing the home’s parts instead. One of these companies is a new Ukrainian homebuilding startup called Passivdom. It uses a 3D-printing robot that can print parts for tiny houses. The machine can print the walls, roof, and floor of Passivdom’s 380-square-foot model in about eight hours. The windows, doors, plumbing, and electrical systems are then added by a human worker.
When complete, the homes are completely autonomous and mobile, meaning they do not need to connect to external electrical and plumbing systems. Solar energy is stored in a battery connected to the houses, and water is collected and filtered from humidity in the air (or you can pour water into the system yourself). The houses also feature an independent sewage system.
Passivdom’s homes, which start at $31,900, are now available for pre-order online in the Ukraine and the US, and the first ones will be delivered later this year. Passivdom is not the only company using 3D-printing to build homes. Three other firms—San Francisco-based housing startup Apis Cor, Dus Architects in Amsterdam, and Branch Technology in Chattanooga, Tennessee—say they can construct homes in mere days or weeks.
Apis Cor uses its technology to build a 400-square-foot home in just a day, at a cost of slightly over $10,000. What makes its process unique is that while 3D-printing a home usually involves creating the parts off-site and constructing the building later, Apis Cor uses a mobile printer to print their homes on-site and thus eliminates the need to transfer the printed blocks to the construction site. “Printing of the load-bearing walls, partitions and building envelope can be done in less than a day: pure machine time of printing amounts to 24 hours,” the company said.
The main components of the house, including the walls, partitions and building envelope are printed solely with a concrete mixture. Once the house has been completed, the printer is removed with a crane-manipulator and the roof is then added, followed by the interior fixtures and furnishings, as is a layer of paint to the exterior of the house.
Nikita Chen-Yun-tai, the inventor of the mobile printer and founder of Apis Cor, explained his desire is to automate everything. “When I first thought about creating my machine, the world already knew about construction 3D printing,” he explained. “But all the printers created before shared one thing in common—they were not compact or mobile. I was certain that such a design had no future due to its bulkiness. So I took care of this limitation and decided to upgrade to a construction crane design.” He adds, “We want to help people around the world to improve their living conditions. That’s why the construction process needs to become fast, efficient and high-quality as well. For this to happen we need to delegate all the hard work to smart machines.”
For now the technology is in its infancy, however in a few years, the deflationary pressures unleashed by Apis-Cor and its competitors could results in a huge deflationary wave across the construction industry, and would mean that a house that recently cost in the hundreds of thousands, or millions, could be built for a fraction of the cost, providing cheap, accessible housing to millions. In the process, this could disrupt the multi trillion-dollar mortgage business that is the bedrock of the US banking industry.
Citations
1. http://read.bi/2oeeuQG – Business Insider
2. http://bit.ly/2oU8JVS – ZeroHeadge.com
The Good News Is . . .
• The S&P/Case-Shiller U.S. National Home Price Index jumped 5.8% in February. This happened as homebuyer demand continues to outweigh supply in the housing market. David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said the low stock of existing homes for sale—currently about 3.8 months’ worth of supply at current sales rates—is bolstering the price increases across the board. He added, “Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates.”
• Owens-Illinois, Inc., the world’s largest glass container company, reported earnings of $0.58 per share, an increase of 21.0% over year-earlier earnings of $0.48 per share. The firm’s earnings topped the consensus estimate of analysts by $0.06. The company reported revenues of $1.6 billion, an increase of 1.7%. Management attributed the results to in its European and North American business segments and continuing improvement in operating margins.
• Tyson Foods announced its $3.2 billion purchase of AdvancePierre, a ready-to-eat sandwich maker. The acquisition takes the poultry company further up the food value chain. Tyson had already been reducing its dependence on the volatile commodity meat business. In 2014, for example, it paid $8.5 billion for Hillshire Brands, another prepared-foods producer. AdvancePierre, based in Cincinnati, gets two-thirds of its revenue from selling sandwiches through food-service companies and convenience stores and has profit margins well above those of Tyson.
Citations
1. http://reut.rs/2oI9mS9 – Reuters
2. http://cnb.cx/2lwnm3s – CNBC
3. http://bit.ly/2qg5b10 – Owens-Illinois, Inc.
4. http://nyti.ms/2pdBAqC – NY Times Dealbook
Planning Tips
Guide to Key Features of Indexed Universal Life Insurance Policies
In many ways, today’s indexed universal life insurance (IUL) policies can also be viewed as an all-in-one financial device. Whereas term insurance can protect you with a death benefit, indexed universal life insurance can do that and a whole lot more. Below are some of the key features of IUL policies. While indexed universal life can present numerous advantages over other forms of life insurance coverage—especially from a cash value perspective—not all IUL policies are created equally. With that in mind, it is important to consult your financial advisor to determine what will fit best with your specific goals, needs, and time horizon.
Death Benefit Protection – First, these policies provide a death benefit, just as with a term life insurance policy. While going with just a straight term life insurance policy may cost less in terms of premium, an indexed universal life insurance policy will last you for the remainder of your lifetime. It will also build up cash value.
Opportunity for Growth – Within the cash value component of an IUL policy, you have the opportunity to grow your funds based on a market-linked index, such as the S&P 500 or the Dow Jones Industrial Average (DJIA). This can provide you with the ability to earn a higher return than that of other types of permanent policies such as whole life, or even regular universal life insurance.
Protection of Principal – While there is the opportunity for additional growth of funds, there is also protection of your principal in the event of a market downturn with IUL. This is because should the underlying index lose value in any given period, your account is simply credited with a 0% gain. This not only protects your funds from loss, but also alleviates the need to make up lost ground from negative years.
Cash for Long-Term Care or Other Needs – Many of the IUL policies that are on the market today will also advance you a portion of the death benefit in order to pay for a long-term care need. In some cases, the amount could even be up to 100% of the death benefit proceeds. Also, the cash that is in the cash value component can either be withdrawn or borrowed for any reason. This money can be used for paying off high interest credit card debt, personal loans, or even your home mortgage.
Supplemental Retirement Income, Tax Free – Given its unique loan provisions, you can also use an indexed universal life insurance policy’s cash value to help in supplementing your retirement income. This can be especially beneficial if you are trying to fill an income gap and/or if you are under age 59½ and do not want to face the IRS early withdrawal penalty that can be levied on many other plans such as annuities and traditional IRAs.
Citations
1. http://bit.ly/2pHa861 – ThinkAdvisor.com
2. http://bit.ly/2oR2kcW – TheStreet.com
3. http://bit.ly/22yWKKZ – Investopedia
4. http://fxn.ws/1ZVbbvt – Fox Business News
5. http://bit.ly/2qnXxky – The Motley Fool
