Regulation on the menu: Finding opportunity in a changing food system

Tighter food and agricultural regulation will become a secular investment theme by rewarding producers with stronger biological performance, compliant supply chains and specialized technologies.

• Canada requires pre-market approval for food additives, whereas the US permits ingredients under the FDA’s Generally Recognized as Safe framework, illustrating how regulatory differences can affect competitiveness and profitability.
• Regulators are increasingly focusing on ultra-processed foods, additives, dyes, sugar, livestock antibiotics and nutritional labelling, potentially driving a “food as medicine” shift over the next 20 years.
• Norway’s salmon rules include strict sea-lice thresholds, a traffic-light system limiting growth when environmental impacts rise, and consideration of wild salmon health; SalMar raised its 2026 harvest guidance to 350,000 tonnes, up 16% year over year, and targets 378,000 tonnes by 2028.
• Mexico has banned more than 180 pesticides still authorized in the US, while California imposes strict application controls; 97% to 98% of California-grown produce is compliant or has non-detectable residues, whereas some imported citrus triggers enforcement actions.
• Limoneira expects avocado production to exceed 10 million pounds in fiscal 2027, a 30% increase, after 400 acres planted in 2023 and 2024 mature commercially, and plans to add 500 more avocado acres by the end of 2027.
• US investigations into Chinese choline imports allege dumping margins of 73% to over 300%; Balchem benefits from specialization across human nutrition and health, animal nutrition and health, and specialty products, representing 63%, 23% and 14% of revenue respectively.

Takeaway: Investors should favor locally focused producers and specialty ingredient companies with resilient supply chains, regulatory compliance and differentiated operating capabilities, while recognizing that tighter rules may also increase agricultural costs and inflationary pressure.