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Big farms in the U.S. are getting bigger than ever, and that's overhauling the economic landscape for agriculture. In a steady expansion through years of up and down cycles, operations counting many thousands of acres and millions of dollars in crop sales have become a dominant force in farming, the WSJ's Jacob Bunge reports, squeezing out small operators and pressing farm-supply retailers and grain companies with their buying power. Only 4% of U.S. farms produce $1 million or more in annual sales, and those sites now produce two-thirds of the country's agricultural output. The big operators are using their scale make farming more efficient and minimize risk, while managing vast acreage that can fill thousands of tractor-trailers a year. The growth of such farms is restructuring traditional supply chains built over decades around farmer-owned cooperatives. Instead, large farmers often seek to buy chemicals and materials from suppliers with direct links to manufacturers, and increasingly handle grain storage and sales themselves.
Hasbro Inc. is trying to redirecting its supply chain to find customers ahead of the holidays. The moves come as the financial woes at Toys "R" Us Inc. casts uncertainty over Hasbro's distribution of Nerf guns and Disney Princess dolls and other toys to the retailer, the WSJ's Paul Ziobro reports, with suppliers wary of committing inventory to a customer they fear will start closing stores once the holiday season ends. Toymakers are among many suppliers that are exerting increasingly tough delivery and payment terms on storeowners as the financial fallout from e-commerce hits traditional brick-and-mortar retailers. Hasbro says the impact of the Toys "R" Us bankruptcy could be softened by the broader availability of its toys at drugstores, dollar stores and online. That means getting the inventory to the right place, of course, which was an easier calculation when one retailer dominated sales.
Baby-food suppliers may have found the formula for growth in China, at least for a while. Following a succession of health scandals, the world's largest infant-formula market is booming again, the WSJ's Stephen Wilmot and Jacky Wong write in Heard on the Street, with global dairy giant Danone reporting big sales gains and other providers including Mead Johnson and Nestle also noting improvements. The suppliers are benefiting from a brief upturn in Chinese births that's unlikely to last and from the end of distributor moves to run down inventory, triggering the need for new imports. The big shifts distribution are the result of ongoing regulatory changes aimed at ensuring safety of formula supplies, including registration of approved brands and a clampdown on cross-border distribution that brought in cut-rate products. The end result could be more stability, and that could help big global suppliers flourish in a more concentrated and disciplined market.
SUPPLY CHAIN STRATEGIES
Drug makers are finding new profits by putting their expansive production and distribution operations to work on generics. It's an unlikely but growing business for pharmaceutical giants that often have seen sales wither in the face of low-cost competition once patents expire. The WSJ's Denise Roland writes that lines known as branded generics have become a relatively cheap fount of growth that follows in the slipstream of their established supply chains. In many cases, the drugs are aimed at fast-growing emerging markets. Companies including Abbott, Novartis AG and Valeant Pharmaceuticals Inc. have built up a business that requires much less of the expensive research and development that goes into prescription drugs and can breathe new life into the products with slight tweaks. Branded generics, while much cheaper than patented medicines, can command higher prices than their unbranded counterparts in the developing world, where consumers look for brands they can trust.
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IN OTHER NEWS
Imports streamed into U.S. seaports at a rapid pace last month as retailers restocked inventories with growing confidence. (WSJ)
Eurozone consumer confidence rose in October to a 16-year high. (WSJ)
Florida and Texas shed almost 135,000 jobs in the wake of storms that battered the Southern and Eastern U.S. (WSJ)
Amazon.com Inc. received 238 proposals from cities in 54 states, provinces and territories to host its second headquarters. (WSJ)
Shares in crafts marketplace Etsy.com Inc. sank after Amazon unveiled a new way for shoppers to find handcrafted wares. (WSJ)
Cisco Systems Inc. will acquire communications software provider BroadSoft Inc. as it steers further away from hardware into software and services. (WSJ)
The Environmental Protection Agency is seeking to repeal tighter emissions standards for truck components endorsed by trucking groups and manufacturers. (Washington Post)
Warehousing for online-order fulfillment is creating new jobs and growth in U.S. communities hit hard by the industrial downturn. (New York Times)
Boeing Co. is trying to lure hundreds of retirees back to work after apparently cutting too many jobs at aircraft assembly plants. (Seattle Times)
Whirlpool Corp. is using a factory in Tennessee to test new technologies it may roll out across its manufacturing operations. (Industry Week)
Iowa's relatively light inbound freight demand has agriculture exporters facing a shortage of shipping containers. (Cedar Rapids Gazette)
Freight forwarders are locking in more air cargo capacity this year during what they expect to be a robust peak shipping season. (Air Cargo News)
More internet companies in China are turning to supply-chain finance as a profit center. (South China Morning Post)
Volvo reported that orders for Mack Trucks soared 73% over last year's third quarter. (Allentown Morning Call)
Isuzu Motors will launch an electric light-duty truck in 2018 suitable for light shipping in cities. (Nikkei Asian Review)
Discount grocer Lidl began offering some online grocery delivery in South Carolina using Shipt. (Food Logistics)
Striking coal-train drivers in Australia plan a second 48-hour strike after walking off their jobs over the weekend. (Platts)
Scorpio Bulkers cut its third-quarter net loss in half to $10.7 million. (Lloyd's List)
The U.S. Postal Service has repeatedly rejected Norfolk, Va.'s attempts to buy a large lot near downtown that holds a postal processing center. (Virginian-Pilot)
China lifted its ban on imports of European soft cheeses. (Agence France-Presse)
Montana-based pet-toy manufacturer West Paw signed a deal to export goods to China. (KTVQ)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at email@example.com
(END) Dow Jones Newswires
October 24, 2017 07:08 ET (11:08 GMT)