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Good morning!
Ellen McGirt standing in for Alan Murray, who is still enjoying a well-deserved staycation. I’m not sure if he’s baking, however.
If not, he’s in the minority. As the pandemic shut down the retail restaurant business, it fired up home kitchens across the country, which became one of many sudden problems for Land O’Lakes, the $15 billion farmer-owned cooperative.
“What we normally do, is we make what we call advanced state butter. We manufacture it, and we put it aside for key season,” says Land O’Lakes CEO Beth Ford. “Key season for dairy is Christmas and Thanksgiving when we’re all home baking. Well, now everybody’s home baking.”
Alan and I caught up with Ford on this week’s episode of the Leadership Next podcast (Apple/Spotify), and she shared the kind of rapid innovation that became necessary for the business, and their more than 1,700 dairy farmers, to survive during the quarantine. The consumer piece was easier to fix—sell, don’t store, the butter. But the milk that typically went to restaurant markets had to be repurposed, fast. One of many ideas a new, internal skunkworks team came up with: a co-manufactured new mozzarella cheese product, packaged on behalf of the farmers, and available in grocery stores near them. “The agility of the team has been pretty phenomenal,” she says.
Ford talked about how technology is transforming the dairy industry—that conversation alone will change the way you think about how a farm actually operates. But she sees her job as CEO as inextricably linked with the need to create vital businesses in healthy, rural communities. One thing she knows will help is robust internet. For one thing, the kinds of innovation happening on family farms—from crop yield and animal health data to climate insights—don’t matter much if they don’t have broadband.
“Oftentimes I’ll go [visit a farm], and somebody will have this wonderful invention, their own data and analytics and everything. I say, that’s interesting, but we can’t use it because nobody has broadband out here,” she says. “So it’s not like, ‘my kid can’t stream Netflix.’ This is, ‘I can’t auto-steer the tractor and I can’t pull in this data.’”
But nothing else good happens without broadband, either. The pandemic has made a challenging life even more fraught. Businesses are struggling, kids can’t access virtual school, communities are increasingly food insecure, and entire communities have lost access to health care as rural hospitals have closed. “This is simply unacceptable,” she says. “It leaves us so uncompetitive, it’s unbelievable.”
Ford’s work includes an innovative alliance with Microsoft, another with the Mayo Clinic and other health care providers, and she has shared her big vision for a wired-for-access heartland to every governor in the country, along with Congress, and the White House.
She says it’s part of her job. “We’re owned by farmers. I see their families all the time. We’re owned by local retailers. I see their families, and I’m in their communities all the time,” she says. “And while we put in time…I always say to my board, this isn’t about time. This is about being the conveners. It is awareness, advocacy, action—awareness, advocacy, action.”
More news below.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
This article has been amended to note that Land O’Lakes has an alliance with Microsoft rather than Google.
TOP NEWS
Oracle and TikTok
Oracle (of all companies) is reportedly interested in buying the U.S., Australian, Canadian and New Zealand operations of TikTok, the Chinese short-video app that's captured Generation X's heart and outraged the Trump administration. Microsoft has already been holding discussions with TikTok owner ByteDance; now ByteDance apparently has two credible offers to consider. Financial Times
Huawei restrictions
The Commerce Department has added yet more restrictions to companies wanting to service Huawei, the Chinese telecommunications giant. The U.S.'s latest move means all chip companies, anywhere in the world, need a license if they want to sell processors to Huawei—as long as they use U.S. design software and equipment to make their wares. Fortune
Good mutation?
A novel-er version of the novel coronavirus is doing the rounds in North America, Europe and parts of Asia. The bad news: the D614G mutation is more contagious. The good news: it seems to be less deadly. As prominent infectious-diseases expert (and politician) Paul Tambyah notes, it is in viruses' interest not to kill their hosts. Reuters
A-levels U-turn
The British government has performed a U-turn on the use of a controversial algorithm to adjust the final grades of this year's school-leavers, who were unable to write exams due to lockdown. The algorithm downgraded 280,000 pupils, by factoring in things like their school's overall past performance—bad news for high-achievers in poorly-performing schools. Now pupils will just be graded via teachers' assessment of their likely results. Of course, most university places have already been filled, based on the now-scrapped algorithmic results. Beleaguered Education Secretary Gavin Williamson is "incredibly sorry for all those students who have been through this." Sky News
AROUND THE WATER COOLER
Tesla value
Tesla's valuation yesterday surpassed that of Procter & Gamble, after finishing 11% up on the day—and 339% up so far this year. Wedbush analyst Daniel Ives has raised his Tesla target from $1,800 to $1,900, with a bull-case target of $2,500 (the current share price is $1,835.) Fortune
Amazon probe
Germany's antitrust authority is probing Amazon's punishment of alleged price-gougers during the early days of the lockdown. The watchdog previously forced Amazon to stop prohibiting third-party sellers from selling their products at cheaper prices on other online platforms; now it is checking to see whether Amazon's pandemic price-setting policy is kosher. Fortune
S&P high
The S&P 500 should hit a new high by the end of the month, analysts say. That would mark the start of a new bull market. But why are the markets doing so well, given poor unemployment numbers, congressional deadlock on stimulus, and the likelihood of an imminent wave of fresh economic damage in the fall? Fortune
Single-use plastics
The COVID-19 pandemic has severely set back efforts to phase out single-use plastics, not just because of people flocking to disposable masks and takeaway containers, but also because of bans and taxes being rolled back and recycling activity being reduced. Interestingly, as Fortune's Katherine Dunn writes, the increase in disposable plastic use "has been mostly (if not entirely) offset by the economic hits elsewhere from the pandemic: declines in plastic use for the industrial and commercial businesses that have seen business decline." Fortune
This edition of CEO Daily was edited by David Meyer.
