Food Exec Brief: USMCA Enters Annual Reviews, Big Egg Settles, and AI Governance Gets Urgent

Welcome to this week’s Food Exec Brief, your strategic intelligence roundup for food and beverage manufacturing leaders. This week, we’re covering:

• The U.S. will not renew USMCA in its current form, Cal-Maine and two other major egg producers settle a $3.3 million price-fixing probe with DOJ, and manufacturing PMI hits a 49-month high while factory hiring posts its sharpest single-month drop since 2020.
• FSIS launches a Salmonella biomapping pilot for poultry plants, the Supreme Court’s TPS decision adds new labor risk to meatpacking, and California’s “sell by” date ban takes effect.
• Only 41% of food and beverage companies have enterprise AI in place while employees are already using public tools without oversight, and 60% of U.S. manufacturing executives report a significant email-based security breach in the past year.

USMCA enters a decade of annual reviews

U.S. Trade Representative Jamieson Greer announced on July 1 that the U.S. will not renew USMCA in its current form, following the built-in joint review deadline that fell on the agreement’s six-year anniversary. USMCA remains in effect, but the parties will now conduct yearly reviews for the remaining 10 years rather than a full renewal. Greer said the U.S. will continue bilateral talks with Canada and Mexico to address trade deficits and shortcomings. Agriculture stakeholders were watching closely: more than 2,300 farmers, ranchers, and rural Americans signed a coalition letter urging renewal with targeted improvements, citing over $60 billion in U.S. agricultural exports to Canada and Mexico and more than half a million American food and agriculture jobs supported by the agreement. (Learn more)

Why it matters: Food and beverage manufacturers with cross-border supply chains are now in a longer-duration holding pattern. Annual reviews can produce change, but they don’t resolve uncertainty, and procurement and sourcing assumptions built around stable North American trade terms need to be stress-tested.

TPS ruling adds meatpacking labor risk as factory hiring falls

The Supreme Court ruled 6-3 on June 25 to uphold the current administration’s directive ending Temporary Protected Status for Haitian and Syrian immigrants, prompting UFCW, which represents 1.2 million workers including those in meatpacking and food processing, to warn of compounding labor shortages and food safety risks. The union noted that while the ruling directly affects Haitian and Syrian TPS holders, it creates uncertainty for nearly a million additional TPS holders across industries. “Labor shortages that have long plagued these industries will also be worsened, leading to higher prices for families trying to put food on the table,” said UFCW International President Milton Jones. (Learn more)

The S&P Global Flash U.S. Manufacturing PMI rose to 55.7 in June, a 49-month high and the 11th consecutive month of increase, with factory production at its fastest pace since July 2021 and new orders at their strongest since April 2022. Manufacturing employment saw its largest decline since May 2020, though, as rising input costs pressed companies to pull back on hiring. Inventories rose at the second-steepest rate in survey history as manufacturers continued stockpiling. (Learn more)

Why it matters: Demand is accelerating and order books are building, but the workforce numbers are moving the other way. For meatpacking and protein processing specifically, the TPS ruling adds a structural labor pressure on top of an already tight picture.

FSIS opens a Salmonella pilot, and three egg producers settle price-fixing claims

FSIS announced a new voluntary pilot program for chicken and turkey slaughter and processing establishments to measure Salmonella levels throughout operations, using either Salmonella biomapping integrated into the food safety system or a validated Critical Control Point in the HACCP plan. The pilot also tests a shortened performance standard moving window, from the current 52 weeks to a variable 13-to-52-week period, for participating plants. Establishments interested in joining must submit a biomapping sampling plan to FSIS. Approved participants will be listed on FSIS’s Salmonella Control Strategies page. (Learn more)

The DOJ and 17 state attorneys general reached a $3.3 million settlement with Cal-Maine Foods, Versova, and Hickman’s Egg Ranch, resolving allegations that the three companies coordinated bids on the Urner Barry egg price benchmark from June 2022 to March 2025. The companies will also donate 53 million eggs to food banks. Egg price quotations dropped significantly after the companies learned of the federal investigation in March 2025. All three companies denied wrongdoing. The settlement, still subject to court approval, requires each company to appoint an antitrust compliance officer and end communications with competitors intended to influence benchmark prices. (Learn more)

Why it matters: The FSIS pilot gives poultry facilities a structured on-ramp for biomapping-based food safety programs ahead of any future regulatory changes. The egg settlement confirms that DOJ scrutiny of pricing coordination in commodity food markets is active and backed by 17 states.

AI governance gap meets a 60% breach rate

A TraceGains survey of 423 food and beverage professionals found that only 41% of F&B organizations have enterprise AI tools in place, while individual employees are moving well ahead of corporate IT. Gartner data cited in the report shows 57% of employees use personal GenAI accounts for work and 33% admit to entering sensitive work information into unapproved tools. The biggest stated obstacles to formal adoption: 30% cited accuracy and trustworthiness concerns, 25% pointed to security and data protection requirements, and 24% named regulatory and compliance safeguards. Separately, 40% of respondents identified disconnected systems and data as the top operational barrier to moving faster, and only 9% described their organizations as fully connected across teams and functions. (Learn more)

A new Integris report based on surveys of 411 U.S. manufacturing executives found that 60% had experienced a significant email-based security breach in the past 12 months, and 49% reported a mobile device breach. Despite 84% having security awareness training in place, breaches are persisting at high rates. Consumer concern is rising alongside the exposure: 83% of consumers say they’re worried about cybersecurity risks at manufacturers, and 25% have already stopped buying from a manufacturer over those concerns. (Learn more)

Why it matters: Shadow AI and active cyber exposure are running in parallel at most manufacturers, and the governance infrastructure hasn’t caught up. In a regulated industry where traceability and data integrity are compliance requirements, that gap has significant consequences.

California bans “sell by” labels and clears carton recyclability

California’s Assembly Bill 660 took effect July 1, making California the first state to ban consumer-facing “sell by” dates on packaged food, requiring manufacturers to use “Best if Used By” for quality and “Use By” for safety on products manufactured on or after that date. The law applies to food sold in California regardless of where it was produced. Exempt categories include infant formula, eggs, beer, wine, distilled spirits, and shellfish under separate rules. New York approved a similar bill awaiting the governor’s signature, and legislation addressing food date labeling has been introduced in five additional states. Companies that fail to comply face enforcement under the California Food and Agricultural Code. (Learn more)

California’s CalRecycle published an updated SB 343 finding on June 24 confirming that food and beverage cartons meet the statewide sortation threshold required for recyclable labeling, after verifying that large-volume transfer and processing facilities serving 62% of California counties now sort cartons for recycling. The update followed verification of three additional material recovery facilities in Roseville, Ukiah, and San Luis Obispo and expands what recyclability claims carton brands can display on-package. (Learn more)

Why it matters: California’s packaging compliance changes regularly become the de facto national standard when manufacturers consolidate SKUs to avoid dual labeling. Companies that haven’t reviewed their date labeling for California compliance now have a hard deadline and a defined enforcement framework.

A screwworm suspension shows what risk structure actually costs

RSM’s consumer products practice published an analysis using the New World screwworm cattle import suspension to show how food supply chain disruptions expose structural risk vulnerabilities rather than just price volatility. In the Southern Plains feeder cattle market, basis flipped from a half-cent discount to a premium of more than 6 cents following the suspension and remained above 5 cents months later, approaching 25 cents in late spring, while national average prices moved only modestly. Middle market producers selling on fixed-price customer contracts while buying floating-cost inputs absorbed that spread directly, with no ability to pass it through. RSM frames the core problem as risk structure, not price direction, and urges food businesses to map exposure across basis, contracts, and cost concentration rather than treating disruptions as pricing events. (Learn more)

Why it matters: Food supply chains are one biosecurity ruling, weather event, or trade action away from basis and margin surprises. Manufacturers who have mapped their structural risk are better positioned to absorb those moves. 

The Food Exec Brief provides weekly insights for food and beverage manufacturing leaders and publishes every Friday.