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Modelo Especial beer arranged in the Brooklyn Borough of New York, U.S., on Tuesday, Nov. 23, 2021.
Gabby Jones | Bloomberg | Getty Images

Company: Constellation Brands (STZ)

Business: Constellation Brands is an international producer and marketer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand and Italy with powerful, consumer-connected, high-quality brands like Corona Extra, Modelo Especial, the Robert Mondavi brand family, Kim Crawford, Meiomi, The Prisoner Wine Company, High West, Casa Noble and Mi Campo.
Stock Market Value: $49.4B ($269.50 per share)

Activist: Elliott Investment Management

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2 days ago

Percentage Ownership:  n/a
Average Cost: n/a
Activist Commentary: Elliott is a very successful and astute activist investor, particularly in the technology sector. The firm’s team includes analysts from leading tech private equity firms, engineers, operating partners – former technology CEO and COOs. When evaluating an investment, the firm also hires specialty and general management consultants, expert cost analysts and industry specialists. Elliott often watches companies for many years before investing and has an extensive stable of impressive board candidates. The firm has not disclosed its stake in this investment, but based on its history, we would expect it to be in excess of $1 billion.

What’s happening?

On July 18, Elliott and Constellation entered into a cooperation agreement, pursuant to which the company agreed to increase the size of its board to 13 directors from 11 and appoint William T. Giles (former chief financial officer and executive vice president – finance, information technology and store development, customer satisfaction for AutoZone), and Luca Zaramella (CFO and EVP of Mondelez International), as members of the board with initial terms expiring at the company’s 2024 annual meeting. Elliott agreed to abide by certain customary voting and standstill provisions.

Behind the scenes

Constellation Brands produces and markets beer, wine and spirits, but it’s essentially a beer company with 85% of its revenue coming from beer sales. Historically, it has been a niche brand marketer in a family-controlled business. But that is all changing. In November 2022, the company undertook a reclassification, which led to the Sands family getting paid $1.5 billion for their Class B stock and took the company out of family control. Moreover, it is not just a niche beer business anymore. Modelo Especial has become the No. 1 selling beer in the U.S. and has high single-digit volume growth, something that is very rare in the oligopoly of the beer industry. This is an industry with stable cash flow and high margins. Similar businesses trade at 30 to 35 times earnings as opposed to 22.6 times for Constellation. So, what has gone wrong here?

First, the company has traded at a discount because of the dual-class share structure that allowed the Sands family to control Constellation. Second, as we often see with family-controlled companies, there has been a lack of discipline that has led to the erosion of shareholder value and the loss of shareholder confidence. In 2018, Constellation raised its stake in a cannabis company, Canopy Growth, by $4 billion. That’s in addition to its initial investment of about $190 million in 2017. The arrangement has not worked out, leading to a write down of more than $1 billion. The company had also commenced the construction of a $1.4 billion brewery in Mexicali, Mexico and ultimately was forced to close it in 2020. Constellation also bought craft brewer Ballast Point in 2015 for $1 billion, only to sell it about four years later.
However, since these missteps the company, has taken meaningful steps in the right direction. In March 2019, Bill Newlands became president and CEO, succeeding Rob Sands. Also, the restructuring took the company out of family control and led to the Sands family abdicating their executive and committee roles, including Rob Sands announcing his retirement as chairman earlier this month. Now, they have appointed two activist-induced directors to the board after Elliott has been working amicably with the CEO and management for several months. Now, the company is looking for a new independent chair and for the first time ever is in a position to be run like a public company for the benefit of shareholders.
That should not be that difficult for a company like this. The low hanging fruit here is for management to just stay out of its own way. A refreshed board with a CEO not beholden to the Sands family should lead to a more disciplined capex and strategic plan that should not only avoid the self-induced errors of the past but be accretive to shareholder value and earnings per share. This leaves a core beer business that can now be operated without unnecessary distractions. This business has had consistent revenue growth of high single digits. While some of this can be attributed to missteps made by Anheuser-Busch, Modelo has established itself as a top brand along Budweiser and Coors and has a much larger path for growth. Unlike Budweiser and Coors, Modelo does not currently enjoy mass U.S. penetration. It is very well represented in the West, but has a lot of distribution growth opportunity throughout the rest of the country, particularly in the middle of the country and the Eastern Seaboard. It should not take more than just basic “blocking and tackling” to continue this growth and the high margins that come along with it. Finally, there is an opportunity to grow and operate the wine and spirits business. A disciplined board and management team that regains the confidence of shareholders could do some strategic acquisitions to grow this business.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More

Early dating has a new challenge: the ubiquity of gratuity screens and changing expectations of when we should tip and how much. 
“It could be a deal breaker on a first date,” said Lizzie Post, co-host of the “Awesome Etiquette” podcast, about someone’s tipping practices.

Voronchuk Daria | Istock | Getty Images

Last summer, Sherry Gui brought a date to her local bar in Manhattan. Gui, a law school student, had been going to the establishment for three years, and was friends with the bartenders and staff. When the evening ended, the guy picked up the check, which she was grateful for — until he wrote in the tip amount.
“It was lower than what I normally would [tip] and actually lower than the expectation I had of him, like he has a respectable job,” said Gui, 29. “I just felt like it was a representation of me, as well.”

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Early dating can put a magnifying glass on the differences between two people. One of those areas may be tipping practices, made only more fraught of late with the ubiquity of gratuity screens and changing expectations of when we should tip and how much. 
“It could be a deal breaker on a first date,” said Lizzie Post, co-host of the “Awesome Etiquette” podcast, about someone’s tipping practices. You or your date may conclude, Post said, “‘I’m not even going to give them a second chance.'” 

Tipping may ‘correlate with other types of generosity’ 

The main question in most people’s minds during the first few dates is often: Do I want to keep seeing this person? And so it makes sense that single people are taking everything into consideration about the person across from them at the table.
Their tipping behavior might be especially revealing, said Irina Manta, a New York-based dating coach and consultant. 

“I do think that someone who does not tip properly is probably going to correlate with other types of generosity,” said Manta, who also co-hosts “Strangers on the Internet,” a podcast series about online dating.
Simply put, not leaving a good tip — or any tip — can be a huge turn off, Manta added. 
Blaine Anderson, a dating coach for men in Austin, Texas, agreed, Tipping “is important because it can be a proxy for how you treat everyone in your life.”

‘Make sure you’re doing the minimum’ 

But if you’re confused about how much to tip and when on a date, you’re not alone. 
During the fourth quarter of 2022, the frequency of tips provided at full-service restaurants grew 17% while tip frequency at quick-service restaurants — like coffee shops — swelled 16%, according to a study from payment processor company Square. 

It can get tense if waitstaff presents you with bigger tip percentages than they used to, or your barista flips the screen with tip options, when you’re with someone you’re trying to impress.
Keep in mind that some traditions remain in place, said Nick Leighton, co-host of the etiquette podcast “Were You Raised by Wolves?”
“While the number of iPads asking us to tip 25%, 35% or 45% for a cup of coffee may be growing, the etiquette rules around tipping haven’t actually changed,” Leighton said.
Leaving a 20% tip at restaurants is still the standard, experts say. “You want to at least make sure you’re doing the minimum when it comes to tipping,” Post said. 
For pick-up food and drink options, there is more discretion. These situations should make you think back to the tip jar days, Post said, “You often leave a dollar or two per drink, depending on how complex the drink is.”

[Tipping] is important because it can be a proxy for how you treat everyone in your life.

Blaine Anderson
Dating coach

Meanwhile, you always want to have a range of bills handy for moments where cash tips are appropriate, Anderson said, “Being prepared with cash for these situations makes you look smooth.”
Manta, the New York dating coach, said it was bad form to be too nosy about your date’s tipping practices. When she was dating, she wouldn’t lean over to the other side of the table to get a look at the check. 
“It’s not like I played Sherlock Holmes to find out how they tipped,” Manta said.

Don’t be flashy or false with your tip

While being a generous tipper can impress your date — and more importantly, fulfil your responsibility to the people serving you — you don’t want to be a show off, experts say.
“Definitely don’t call attention to your tip, no matter how generous it is,” Anderson said.
You want your tipping to be “a gracious moment,” Post said.
“If you flash your money to try to get better service, or if you’re really showy, it does just come off a little tasteless,” Post said. “People feel the show of that and it doesn’t always feel comfortable.”
You also don’t want to tip any differently on a date than you normally would, Leighton said: “If you never actually tip, that’s something your date should know about you and you shouldn’t pretend otherwise.”
In 2017, Manta matched with Carlos Farini on the dating app Bumble.
They had a few glasses of wine at a bar on their first date. As a former service worker himself, Farini always tipped well, which reflected the No. 1 quality she searched for in a partner — kindness.
They’ve now been happily married for five years. More

Accessible, affordable housing is currently out of reach for many disabled or elderly Americans.
At a Thursday Senate hearing, experts suggested possible solutions, including updating existing homes and construction of new homes that would be available to people with lower incomes.

Lucy Lambriex | DigitalVision | Getty Images

Despite a sizeable elderly and disabled population in the U.S., there is not enough affordable housing to accommodate those individuals.
“For millions of Americans, adequate housing is more of an aspiration than a reality,” said Sen. Bob Casey, D-Pa., who serves as chairman of the Senate Special Committee on Aging, at a Thursday hearing.

“In particular, too many older adults and people with disabilities cannot afford accessible housing,” Casey said.
About 26% of the U.S. population — or about 61 million people — have a disability, Casey said. At the same time, 1 in 5 Americans will be older than 65 by 2030.
Accessible homes — which offer specific features or technologies — can help older and disabled individuals continue to live in their own homes or in communities they choose. That may include wider doorways, lower counters and sinks and accessible bathrooms.
Yet less than 5% of the national housing supply is accessible, Casey said. Moreover, less than 1% of housing is available to wheelchairs.
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Leaders on both sides of the political aisle agree the shortage of adequate housing is a problem.
The U.S. is between 3 million and 6 million houses short of what the market needs, noted Sen. Mike Braun, R-Ind., ranking member of the Senate aging committee.
The problem has been complicated by state and federal regulatory burdens, higher infrastructure costs, supply chain constraints, work force shortages and increased materials costs due to inflation, Braun noted.
“Sometimes we’re at odds in terms of what we should do, but there’s always practical legislation in the middle, and I’d hope that we can have those conversations that get us there,” Braun said.
Suggestions for improvements emerged during Thursday’s hearing.

Develop affordable, accessible housing

For Dominique Howell, a disability housing advocate based in Philadelphia, finding an adequate place to call home that can accommodate her disability has been a struggle, she testified at Thursday’s hearing.
Five years ago, Howell said, she was “wrongfully evicted” from her home, along with her daughter, who was 3 years old at the time, and her grandmother.
Howell was initially prohibited from entering a shelter, due to the home- and community-based services she receives. After finding legal representation, she was able to enter the shelter, though she slept in her power wheelchair for a year.
Today, Howell and her daughter have found a home. However, it still has accessibility challenges, she said. When the elevator breaks, she and other residents are sometimes forced to spend weeks in their homes.

“Housing is a human right and unfortunately for too many Americans, especially people with disabilities, are not being equally granted the right of housing they can afford that is accessible,” Howell said.
To address the situation, Pennsylvania and other states should “develop affordable accessible housing to match the needs of residents,” she said.
Retrofitting older homes to update them and improve accessibility may be one solution, said Jenny Schuetz, a senior fellow at Brookings Metro. However, updating millions of homes is an “enormous task” that would require both private and public capital, she said.
Making homes more affordable for elderly and disabled populations is crucial, said Allie Cannington, senior manager of advocacy at The Kelsey, a disability-forward housing developer.
“For people with disabilities who rely on Supplemental Security Income and other forms of federal assistance, there is no U.S. housing market where rent is affordable,” Cannington said, an issue that affects more than 4.8 million people with disabilities.

Encourage new housing construction

The U.S. has not built enough housing since the Great Recession to keep up with job and population growth, noted Schuetz. To fill the gap, the U.S. needs about 3.8 million additional homes nationally, according to estimates, she said.
Local markets are also feeling the effects. In Indiana, for example, 18,000 to 22,000 new houses per year are needed in order to meet average demand, according to Rick Wajda, chief executive of the Indiana Builders Association. Yet the state only reached those levels of production in 2020 for the first time since 2007, he said.
To reverse the “underbuilding” trend that has been prevalent since the Great Recession, there should be financial incentives for local governments to revise zoning to allow for more kinds of structures, Schuetz said.

Regulations may be relaxed to shorten delays that often lead to increased building costs, according to Wajda. Permit, hookup or impact fees, as well as development and construction standards, may get in the way of development, he said.
Restrictive building codes may also add thousands of dollars to a house’s cost, thereby adding thousands of dollars to the cost of a house, Wajda said.
“All regulations should be examined for their impact on housing affordability,” he said.
To address the shortage of accessible and affordable housing for vulnerable populations, Casey has proposed a bill that would require a percentage of homes built through the Low-Income Housing Tax Credit Program to meet accessibility standards.
It remains to be seen whether the proposal will receive the support needed to become law. More

Wesleyan University is the latest college to end the policy of giving preferential treatment to legacy students.
Decades-old legacy preferences are increasingly in question after the Supreme Court’s ruling on affirmative action.
Today, more Americans disagree with the practice.

Students at Wesleyan University
Joanne Rathe | The Boston Globe | Getty Images

Decades-old legacy preferences face new challenges

A civil rights group is also contesting the practice of giving priority to the children of alumni at Harvard University, saying it discriminates against students of color by giving an unfair boost to the mostly white children of alumni.
“Your family’s last name and the size of your bank account are not a measure of merit, and should have no bearing on the college admissions process,” Ivan Espinoza-Madrigal, executive director of Lawyers for Civil Rights, said in a statement announcing the civil rights complaint.

More Americans disagree with legacy admissions

Today, fewer Americans agree with legacy admissions.
Three-quarters, or 75%, said whether a relative attended the school should not factor into admissions decisions, up from 68% in 2019, according to a survey by the Pew Research Center.
In its suit against Harvard, Lawyers for Civil Rights said it was challenging the “discriminatory practice of giving preferential treatment in the admissions process to applicants with familial ties to wealthy donors and alumni.”

Legacies are nearly six times more likely to be admitted, the complaint said.
“This preferential treatment overwhelmingly goes to white applicants and harms efforts to diversify color,” added Michael Kippins, litigation fellow at Lawyers for Civil Rights.
Officials at Harvard declined to comment on the complaint.

Challenges to legacy admissions mount

Several bills at the state and federal level have also taken aim at the practice, including a recent proposal in Massachusetts that would charge colleges a fee for considering legacy status or an applicant’s relationship to a past, current or prospective donor.
The NAACP called on more than 1,600 U.S. public and private colleges and universities to commit to increasing the representation of historically underrepresented students and end the practice of legacy admissions.
“That signifies a huge stride toward future insurance that every student, regardless of their race, ethnicity, gender identity, sexual orientation, disability, religion, or socioeconomic status, has an equal opportunity to learn, grow, and thrive at a higher education institution,” Ivory Toldson, director of education innovation and research at the NAACP, said in a statement.

The reality is we’ve reached a pretty good consensus on the use of identity in college admissions.

Alvin Tillery
director of Northwestern University’s Center for the Study of Diversity and Democracy

“There’s no doubt that the legacy advantage is mostly a white entitlement,” said Alvin Tillery, a political science professor and director of Northwestern University’s Center for the Study of Diversity and Democracy.
However, these preferences are not based explicitly on race, which distinguishes the practice from the overt race-conscious admissions programs that were recently rejected by the Supreme Court, noted Don Harris, associate dean and equity, diversity and inclusion liaison at Temple University School of Law.
Yet, “it’s clear that they have a disproportionate impact on race,” added Harris, referring to what Chief Justice John Roberts wrote in his opinion about preventing ways around affirmative action: “What cannot be done directly cannot be done indirectly.”

Legacy admissions ‘could be deemed unconstitutional’

Since the practice of legacy admissions has indirect racial implications, these challenges may have legal merit, according to Jeanine Conley Daves, an attorney at New York-based firm Littler.
If there is no compelling interest for such programs and they are having a negative effect on the college-application process, “then similar to race-conscious admissions programs, it could be deemed unconstitutional,” she said.

“The reality is we’ve reached a pretty good consensus on the use of identity in college admissions,” said Tillery, who is also a Harvard graduate.
“If you can’t use race for Black and Latino students, then you can’t use race for wealthy white students either,” Tillery added.
The advantages that stem from legacy admissions can be hard to quantify but at some of the most selective colleges, legacies comprise as much as 10% to 20% of the incoming class, according to data from The Associated Press.
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Banks and businesses are reaching a boiling point over swipe fees, which are charged every time a credit card is used to make a purchase.
This year, swipe fees will drive up the price of school and college supplies more than $3 billion, the Merchants Payments Coalition said.
Electronic transactions are also essential.

This year, consumers are spending more on back-to-school supplies and coughing up more to cover a particular kind of credit card fee at the same time.
Total back-to-school spending is expected to reach a record $41.5 billion with another $94 billion in college shopping, according to the National Retail Federation.

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The so-called swipe fees, which companies such as Visa or Mastercard charge businesses every time a credit card is used to make a purchase, could drive up the price of school and college supplies more than $3 billion this year, the Merchants Payments Coalition said Thursday.
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“Swipe fees are astronomically high and make everything more expensive,” said Doug Kantor, general counsel at the National Association of Convenience Stores and an executive committee member at the Merchants Payments Coalition.
Swipe fees, also known as interchange fees, have more than doubled over the past decade and jumped $22 billion to a record $160.7 billion last year. When the National Retail Federation first started tracking swipe fees collected by Visa and Mastercard in 2001, they amounted to about $20 billion. 
“That’s a lot of money,” Kantor said. “Bankers skimming off the top of every transaction.”

“They’ve made themselves an involuntary equity partner with every Main Street business,” he added.

Card payments have benefits, too

Banks and card companies charge the merchant about 2% of the transaction, on average, every time a credit card is used to make a purchase. Now, with margins strained, retailers are passing most, if not all, of that cost on to consumers.
But with each credit card transaction comes benefits for businesses, such as higher sales, a larger customer base, fraud protection and guaranteed payment, according to the Electronic Payments Coalition.
“Electronic payments are four times cheaper to process than cash,” said Aaron Stetter, the Electronic Payments Coalition’s executive director. “According to big-box retailers’ own consultants, credit and debit card payments will save them over $7.5 billion on back-to-school shopping this year.” 
However, most of the value is “happening behind the scenes,” he added. “You don’t necessarily see it at the front end.”

“Merchants love to hate them,” said Ted Rossman, a senior industry analyst at CreditCards.com. “But I would argue that credit cards lead to more spending and it’s shortsighted when companies make it harder to use a credit card.”
There are advantages for consumers, as well. Swipe fees largely fund credit card rewards, he added. There are some grocery rewards cards that can earn you as much as 6% back at supermarkets, while a generic cash-back card will earn you 2%.
“There’s a lot to be said about the value of rewards,” he said. “I would be wary of biting the hand that feeds you.”
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A new Alzheimer’s treatment will prompt higher Medicare costs.
Beneficiaries may pick up some of the tab through higher Medicare Part B premiums, experts predict.

bymuratdeniz | E+ | Getty Images

One of the costs retirees pay — Medicare Part B premiums — may be increasing in 2024, driven by a new Alzheimer’s treatment on the market.
The Medicare trustees projected in March that the standard monthly Part B premium may increase to $174.80 in 2024, an almost $10 monthly increase from the $164.90 standard monthly premium beneficiaries are currently paying.

Since that prediction, Leqembi, a treatment targeted at early stages Alzheimer’s disease, has come under Medicare coverage following traditional approval from the Food and Drug Administration.
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Annual spending on the drug may make it the third most costly covered by Medicare Part B, according to KFF, a nonprofit provider or health research. As a result, Medicare Part B premiums — which are expected to cover approximately 25% of the program’s costs — will likely go up.
Leqembi and services related to the treatment may add $5 per month to Part B premiums, bringing the total premium to $179.80 per month, according to a new estimate from The Senior Citizens League, a non-partisan senior group.
Most beneficiaries may see their Part B premium increase by almost $15 per month, while other costs may drive Medicare Part B premiums higher, The Senior Citizens League notes.

Medicare Part B generally covers medical services provided outside of hospitals. Beneficiaries typically pay a monthly fee in the form of a premium, in addition to annual deductible and coinsurance costs.

The estimate is subject to change.
“We’ll know in maybe two to three months what the Part B premium will be for 2024,” said Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF.
If Part B premiums go up next year prompted by the new Alzheimer’s drug, it will not be the first time. There was a 15% bump to Part B premiums between 2021 and 2022, which was “substantially above the norm,” when another Alzheimer’s treatment, Aduhelm, emerged, according to KFF.
However, Part B premiums dropped by 3% for 2023 in response to Medicare’s decision to limit Aduhelm coverage.

How Part B premiums affect Social Security checks

The Senior Citizens League is currently predicting a 3% Social Security cost-of-living adjustment for 2024, based on the latest government inflation data. That would be substantially lower than the record 8.7% increase beneficiaries saw this year.
But just how much more beneficiaries may see in their checks will depend on the size of the Part B premium for next year, according to Mary Johnson, Social Security and Medicare policy analyst at The Senior Citizens League.

Medicare Part B premium payments are typically deducted directly from monthly Social Security checks. The risk for individuals with lower benefits is that they will see no increase to their benefits after the Medicare Part B premiums are deducted, according to Johnson.
In the past, the combination of the fluctuation of Social Security cost-of-living adjustments and Medicare Part B premiums has led some beneficiaries to see no increase to their monthly checks for two or three years at a time, she noted.
“It can lead to several years of no increases in benefits, even though the real inflation they experience is still occurring,” Johnson said. “It leaves them relying more on savings or going into debt.”

What new treatment means for Medicare patients

Medicare will cover Leqembi for patients with mild cognitive impairment or mild dementia with confirmed amyloid plaques, according to KFF.
It is unknown how many Medicare patients will meet the prescribing requirements for the drug or how many will opt to take it, KFF points out. However, Leqembi and other treatments will likely lead to higher Medicare spending, since the vast majority of patients who would qualify for the drugs are covered by Medicare, Cubanski said.
Leqembi is priced at $26,500 before insurance coverage. Medicare patients may pay more than $5,000 annually for the treatment, according to KFF.

Jasmin Merdan | Moment | Getty Images

That out-of-pocket cost is “conservative,” Cubanski said, and does not include any additional medical services or scans patients who use the treatment would need in order to monitor its effects.
Patients who are prescribed the drug and are covered by original Medicare — Parts A and B managed by the federal government — will pay a 20% coinsurance after they have paid their Part B deductible, according to the Centers for Medicare and Medicaid Services. Other patients who have supplemental coverage or secondary insurance, such as Medigap or Medicare Advantage, may face different costs.
A second Alzheimer’s treatment may be approved for market before the end of the year.
The take up of emerging Alzheimer’s treatments may not be large in the near term due to the trade offs of the clinical benefits with some pretty serious side effects shown in clinical trials, according to Cubanski.
“I think we can expect there to be a lot of discussions between patients and their providers about whether these drugs are worth taking,” she said. More

Frozen vegetable prices are up 18%, on average, over the past year, according to the consumer price index for June 2023.
That increase is larger than all other groceries, and six times the 3% average for all consumer goods and services.
Heavy precipitation in California — the largest U.S. vegetable producer — flooded farmland and reduced crop supply, economists said.
Higher costs for cold storage and ripple effects on food prices from the war in Ukraine have also played a role. Immigration trends among Mexican farm laborers have also put upward pressure on labor costs, said economists.

A man operates the tractor in a vegetable field in Lompoc, California, on April 11, 2023.
Tayfun Coskun/Anadolu Agency via Getty Images

Even as U.S. inflation broadly cools, frozen vegetable prices are hot.
The average shelf price for frozen veggies rose by 18% in the past year — the largest increase among all grocery items, according to the consumer price index for June 2023.

Among all consumer goods and services, only a few — like motor vehicle repair, school meals and tax-return preparation — saw prices jump faster in the past 12 months, according to CPI data.
The price spike on frozen veggies is attributable to many factors, like immigration trends, high costs for labor and fertilizer, and ripple effects from the war in Ukraine, economists and food experts said.
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But perhaps the most consequential event has been unusual weather in California, which is “by far” the biggest supplier of fresh fruits and vegetables in the U.S., said Russell Tronstad, a professor and agricultural economist at the University of Arizona.

Record precipitation ‘provided many challenges’

The Golden State was hit by a deluge of precipitation over the winter. Some areas broke daily rainfall records, and the highest-ever snowpack has been recorded in the Sierra Nevada mountains.

The result: overflowing rivers, mudslides, flooding — and soaked farmland.
“Some areas were just inundated,” which had the effect of decreasing vegetable supply, Tronstad said.

Flooded farm and crops in California’s Central Valley.
Citizen of the Planet/UCG/Universal Images Group via Getty Images

California is the No. 1 national producer for dozens of crops, like broccoli, brussels sprouts, cabbage, carrots, cauliflower, eggplant, kale, lettuce, onions, bell peppers, spinach and tomatoes in processed foods, according to the California Department of Food and Agriculture. It’s the sole producer of crops like celery and garlic.
Overall, the state accounts for nearly half of U.S. vegetable production, according to California Polytechnic State University. It accounted for 42% of total U.S. vegetable sales in 2017, according to most recent data from the Census of Agriculture.
Heavy rain “provided many challenges” for agricultural producers, Pam Knox, an agricultural climatologist at the University of Georgia, wrote recently.
It destroyed crops, delayed planting schedules, and prevented farmers from doing field work for weeks, for example, she said.

War in Ukraine, pandemic effects influence pricing

Flooded farmland, located near the confluence of the Sacramento and San Joaquin Rivers, is viewed from the air on May 22, 2023, near Rio Vista, California.
George Rose/Getty Images

But weather — and its negative impact on crop supply — isn’t the only contributor to higher prices for frozen vegetables.
“The category is impacted by a variety of external factors,” said Alison Bodor, president and CEO of the American Frozen Food Institute.
For example, the war in Ukraine is limiting the supply of commodities like wheat, corn and soy, thereby raising prices for the commodities. The higher prices give farmers a “strong incentive” to plant these commodity products over others (like vegetables), a dynamic that could decrease vegetable supply, Bodor said.
“The costs for commodity crops are related and impacted, thus the cost of specialty crops like vegetables also increase,” Bodor said.

Growers and processors are also coping with other factors like the high costs of cold storage, fertilizer and labor, she said.
Prices for all groceries have been pressured in the pandemic era, due to additional factors like supply-chain issues and fuel costs (to transport crops to store shelves). Grocery prices peaked at an annual inflation rate of 14% in August 2022, the highest since 1979. (They’ve since cooled to below 5%).
“We’re still dealing with these ripple effects from Covid throughout the system,” said Trey Malone, a professor and agricultural economist at the University of Arkansas. “I don’t think we’ve established what the new normal is for consumer food purchases.”

Immigration trends pressure supply of farm laborers

Long-term immigration trends are also serving to put upward pressure on labor costs for farmers, economists said.
Fruits and vegetables are known as “specialty crops,” which are labor-intensive to produce since they are often hand-picked, said Zach Rutledge, an agricultural economist and assistant professor at Michigan State University who specializes in farm labor economics.
Labor can therefore account for a large share of a farmer’s production cost, perhaps up to 40%, Rutledge said.

Some areas were just inundated.

Russell Tronstad
professor and agricultural economist at the University of Arizona

U.S. labor costs have risen at their fastest pace in decades during the pandemic era, as record-high job openings led employers to raise wages to compete for talent.
But farmers face additional cost hurdles. Seventy percent of crop farm workers in the U.S. are foreign-born, according to the 2019-20 National Agricultural Workers Survey; of them, 91% lived in Mexico before arriving in the U.S.
That survey data excludes workers in the H-2A visa program, which the U.S. grants to seasonal farm workers. The number of H-2A workers has tripled over the past decade, and Mexicans received more than 90% of the visas, according to the University of California, Davis.
“The agriculture sector is heavily foreign-born, and heavily from Mexico,” Rutledge said.

Yet that labor supply is under pressure: Until recently, net migration from Mexico to the U.S. flipped negative, starting around the early 2000s. That meant more people left the U.S. for Mexico, reversing decades of positive migration.
Additionally, agricultural labor is “difficult, challenging physical work,” Rutledge said. Some farm workers may have opted for a more pleasant, higher-paying gig elsewhere in a hot U.S. job market — which would further dilute the pool of available workers, he said.
Climate change — and the extreme weather it produces, whether storms in California, drought, or temperate winters that increase populations of invasive pests — also represent a long-term threat to crop prices, Malone said.
“You can bank on having issues with prices and instability, particularly with climate change, for a long time,” he said. “These ecosystems we farm in are super-fragile.” More

Life Changes

The Powerball jackpot ballooned to an estimated $1 billion without a winner on Monday night.
Although it’s the third-largest prize in the game’s history, the winner will pay a sizeable tax bill.
Before collecting the proceeds, there’s a 24% federal tax withholding and the winner likely will owe millions more.
The next Powerball drawing is at 10:59 p.m. EST on Wednesday night.

The Powerball jackpot has reached $1 billion by July 19, 2023.
Scott Olson / Getty

The Powerball jackpot has ballooned to an estimated $1 billion, raising the stakes for the next drawing at 10:59 p.m. ET on Wednesday night.
It’s the third-biggest prize in the game’s history — falling behind the record $2.04 billion jackpot in November and $1.586 billion prize from 2016, according to the Multi-State Lottery Association.

However, the windfall shrinks dramatically after the IRS collects its share of the prize, and state taxes could further reduce winnings.

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Here’s a look at other stories offering a financial angle on important lifetime milestones.

If you win, there are two choices for the payout: a lump sum of $516.8 million or 30 years of annuitized payments worth $1 billion. Both options are pretax estimates.
“I’m typically a fan of taking the lump sum,” unless someone prefers the annuity for cash management purposes, said certified financial planner and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.
The reason: You can maximize the winnings by investing the lump sum proceeds sooner, according to Loyd.
Plus, the top federal tax bracket, which currently stands at 37%, could get higher over time, he said. Without changes from Congress, the 37% rate automatically reverts to 39.6% after 2025 when provisions from the Tax Cuts and Jobs Act sunset.

The chances of winning Powerball’s grand prize are 1 in about 292 million.

More than $124 million immediately goes to the IRS

Before seeing a penny of the jackpot, winners pay a sizable tax withholding. Winnings above $5,000 require a 24% mandatory upfront federal withholding that goes straight to the IRS.
If you pick the $516.8 million cash option, the 24% withholding automatically reduces your prize by about $124 million.
However, Loyd warns the 24% withholding won’t cover the entire tax bill because the prize pushes the winner into to the 37% tax bracket.

How federal tax brackets work

Millions in lottery proceeds easily put the winner in the top federal income tax bracket — but that doesn’t mean they’ll pay 37% on the entire prize.
For 2023, the 37% rate applies to taxable income of $578,126 or more for single filers and $693,751 or higher for married couples filing together. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.
Single filers will pay $174,238.25, plus 37% of the amount over $578,125. As for married couples filing together, the total owed is $186,601.50, plus 37% of the amount above $693,750.
After the 24% federal withholding, the jackpot winner’s tax bill depends on several factors but could easily represent millions more.

You may also owe state taxes, depending on where you live and where you purchased the ticket. Some states have no income tax or don’t tax lottery winnings, but others have top-income state tax brackets exceeding 10%. 
Powerball isn’t the only chance to strike it rich. The jackpot for Friday night’s Mega Millions drawing now stands at an estimated $720 million. The chance of hitting the jackpot in that game is roughly 1 in 302 million. More