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Friday, July 31, 2020
NASDA: Senate Coronavirus Aid Falls Short for Agriculture
Negotiations to finalize the next coronavirus relief package in Congress are far from the finish line, and so is aid for agriculture, according to the National Association of State Departments of Agriculture. The Senate Republican proposal includes a second round of $1,200 stimulus payments for individuals, extends additional unemployment payments by $200 a week through September, and includes substantial funding for schools and COVID-19 testing, and $20 billion for agriculture. The discretionary funding would support agricultural producers, growers and processors. Not included in the Republican plan is additional funding for food and nutrition programs or dedicated funding for state departments of agriculture to respond to COVID-19 impacts. NASDA CEO Barb Glenn says, “This relief package falls short of meeting the needs of the food and agriculture community.” Further, Debbie Stabenow, a Michigan Democrat and ranking member of the Senate Agriculture Committee, says, “Struggling Americans deserve better.” Stabenow says the Republican plan is “a non-starter” without nutrition assistance included.
Lawsuit Challenges NEPA Rewrite
A coalition of environmental groups is challenging the Trump administration rewrite of the National Environmental Policy Act, or NEPA. The Environmental Defense Fund, along with other organizations, call the rewrite an “attack” on Americans. Leading the legal challenge, an attorney at the environmental group Earth Justice, says, “They want to make it easier to silence people’s voices and give polluters a free pass to bulldoze through our neighborhoods. That’s why we’re taking them to court.” NEPA requires federal agencies to assess the environmental effects of their proposed actions before making decisions. The Public Lands Council says, however, the changes make the process more efficient. The updates establish presumptive time limits of two years for environmental impact statements and one year for environmental assessments. Ranchers who hold federal grazing permits are subject to NEPA reviews for many reasons, including renewal of a term grazing permit, construction of range improvements, or to become eligible for participation in Department of Agriculture conservation programs.
Senator Booker: Current Food System Fundamentally Broke
A former 2020 presidential candidate says the nation’s food system is “fundamentally broken.” Addressing the National Food Policy Conference this week, Senator Cory Booker, a New Jersey Democrat, says, “After this crisis, we simply cannot go back to business as usual.” Booker claims the food system is broken for supply chain workers, farmers, rural communities and from a public health perspective. Booker places blame on multinational corporations and industry consolidation. The lawmaker cited numerous bills he supports to reform the beef supply chain, including the Farm System Reform Act that would allow more bargaining power for ranchers. Booker also cited the Agribusiness Merger Moratorium act that would halt consolidation within the food system, along with the Climate Stewardship Act and the Local FARM Act. Booker, a self-described vegan, says, "We must create a better future where we phase out big factory farms and instead put our faith and support behind independent family farmers and robust local food systems.”
House Ag Welcomes Two New Committee Members
The House Agriculture Committee Wednesday announced two new members, Chris Jacobs, a New York Republican, and Troy Balderson, an Ohio Republican. Jacobs won a special election in June and will serve the remainder of the term left by retired Congressman Chris Collins. Collins, a Republican, pled guilty to wire fraud and securities fraud last year, and resigned from his position. Jacobs previously served as a state Senator in New York and a county clerk. Balderson of Ohio was elected to the U.S. House in 2018, and takes the place James Comer, who will depart the Agriculture Committee. Balderson also serves on the House Science, Space and Technology Committee, and the Small Business Committee. In welcoming the pair to the committee, Texas Republican Representative and Ranking Member Mike Conaway stated, “Both understand the importance of supporting our farm families, and I look forward to working alongside Chris and Troy on behalf of rural America.”
Dicamba-Resistant Palmer Amaranth Discovered in Tennessee
Researchers from the University of Tennessee report finding dicamba-resistant Palmer amaranth in the state. Results from greenhouse trials and in-field assessment report the level of dicamba resistance is relatively low, about 2.5 times. The level of infestation in any given field ranges from a small pocket where a mother plant went to seed in 2019 to an area covering several acres in a field. This would be comparable to the first documented glyphosate-resistant Palmer amaranth found in Tennessee back in 2006, where most were still getting relatively good Palmer amaranth control with glyphosate, while others were noticing escapes in their fields. Researchers say it’s not time to panic, however, say “it is time to reassess weed management.” Looking forward to 2021, the university says a pre-applied residual that is effective on Palmer amaranth is now a necessity. Moreover, timely applications of Liberty must be used shortly after a dicamba application to remove escapes from coverage.
American Lamb Board Partners with H-E-B
The American Lamb Board has partnered with the nation's top consumer ranked grocery store, H-E-B, to promote the benefits of American Lamb through the H-E-B Health and Wellness program. The effort provides important visibility for American Lamb in Texas and sets the stage for potential future retail collaborations. With more than 350 locations throughout Texas, H-E-B is a major player in the grocery industry. The first step of the partnership was engaging and educating more than 70 H-E-B registered dietitians about the benefits of American Lamb to support their nutrition education efforts. In June, more than 1,000 H-E-B customers received an American Lamb recipe book sent directly to their homes. Then, in July, H-E-B stores began an in-store promotion of American Lamb! H-E-B dietitians are including American Lamb on their "Pick Lists," which feature selected products and a coupon offering $2 off assorted American Lamb cuts. This generated more than 7,600 coupon redemptions in just the first seven days of July. As of July 29, more than 14,300 coupons have been redeemed.
Washington Insider: Fed Sees Future Peril for Workers
The New York Times and others are reporting this week that the Federal Reserve left interest rates near zero on Wednesday as it predicted a long road ahead and that the recent spike in virus cases “saps momentum from the nascent economic recovery.” Chairman Powell noted that infections have surged since late June and the “pace of recovery looks like it has slowed.”
He also noted that policymakers need more data before drawing firm conclusions about the scope of the pullback. Debit and credit card spending were slowing and as labor market indicators suggest that recent job gains might be weakening.
More than 14 million people who held jobs in February are no longer employed. Powell warned that it will take time for workers in certain industries, like restaurants, hotels and travel, to find new jobs.
“He added that the Fed was “not even thinking about thinking about thinking about raising rates.”
The Times said that while the Fed took no major actions on Wednesday, Powell's comments underlined both the peril ahead for American workers and the reality that interest rates are likely to be very low for an extended period of time. Stock prices climbed following his remarks as investors took heart from the Fed's patient stance.
Ahead of the Chairman's comments, the central bank reiterated that the Fed would keep low rates in place “until it is confident that the economy has weathered recent events.”
The Fed's announcement came amid another round of tense negotiations in Congress over providing more support to workers and businesses. Debate revolves around whether to extend an extra $600 per week in unemployment benefits now set to expire this week.
Powell said the support lawmakers have already provided has been critical for the economy. While he did not weigh in on how high unemployment insurance benefits should be set, he said it would be important to help the large number of workers who were likely to be displaced even if the economy reopened successfully.
“Those people will need support,” he said, noting that government policy so far has “kept people in their homes, it's kept businesses in business.”
Powell said both Congress and the central bank would need to do more in the months ahead. Since March, the Fed has put in place a series of measures to help cushion the economic fallout as businesses close or reduce capacity and as shoppers stay home from malls and movie theaters to control the spread of the coronavirus. The central bank has rolled out nine emergency lending programs, which are meant to keep credit flowing to businesses and state and local governments, and is purchasing government-backed bonds to keep markets functioning normally. Also, it has slashed interest rates to rock bottom to entice borrowing and spending.
On Tuesday, officials announced that they would extend their emergency lending programs through the end of the year. Seven of the programs were initially set to expire around the end of September but could still be needed as coronavirus cases have continued to rise.
That could take time, Powell said. The unemployment rate, while falling, remains historically high at 11.1%. Initial jobless claims ticked up last week after months of gradual improvement, stoking concerns that the economy might be backsliding.
The job losses are hitting disadvantaged communities particularly hard. The Fed's own surveys have shown that poorer people were more likely to lose jobs and that those with less education often did not have the option to work from home. The jobless rate for Black workers has skyrocketed to more than 15% and the unemployment rate for Black men continued to tick up in June even as the rate for other racial and gender groups began to fall.
While Fed officials' June economic projections suggested that they expected unemployment to fall below 10% by the end of the year, policymakers made it clear then that conditions were extremely uncertain.
The central bank's policies do seem to be offering support, at least around the edges. House buying has ticked up, fueled by cheap mortgage rates and the U.S. homeownership rate is now at levels last seen before the 2008 financial crisis.
Key credit markets have calmed down after a disorderly March and April, as has the market for U.S. government debt.
Powell also said the Federal Open Market Committee's longer-run framework review, which could guide the central bank's strategies, would be completed in the near future. Some economists took that news to mean that more action is coming at the Fed's Sept. 15-16 meeting.
“The July FOMC meeting was expected to be a placeholder event until more important decisions are made at the next meeting in September,” Michael Feroli, the chief U.S. economist at JP Morgan, said in a note. “The committee met those expectations.”
So, we will see. Clearly, the economy continues to struggle and is likely to do so for some time. This will heavily Depend on the future intensity of virus outbreaks, as well as investment programs from the government which are now being debated fiercely. These are highly significant fights that producers should watch closely as they intensify, Washington Insider believes.
He also noted that policymakers need more data before drawing firm conclusions about the scope of the pullback. Debit and credit card spending were slowing and as labor market indicators suggest that recent job gains might be weakening.
More than 14 million people who held jobs in February are no longer employed. Powell warned that it will take time for workers in certain industries, like restaurants, hotels and travel, to find new jobs.
“He added that the Fed was “not even thinking about thinking about thinking about raising rates.”
The Times said that while the Fed took no major actions on Wednesday, Powell's comments underlined both the peril ahead for American workers and the reality that interest rates are likely to be very low for an extended period of time. Stock prices climbed following his remarks as investors took heart from the Fed's patient stance.
Ahead of the Chairman's comments, the central bank reiterated that the Fed would keep low rates in place “until it is confident that the economy has weathered recent events.”
The Fed's announcement came amid another round of tense negotiations in Congress over providing more support to workers and businesses. Debate revolves around whether to extend an extra $600 per week in unemployment benefits now set to expire this week.
Powell said the support lawmakers have already provided has been critical for the economy. While he did not weigh in on how high unemployment insurance benefits should be set, he said it would be important to help the large number of workers who were likely to be displaced even if the economy reopened successfully.
“Those people will need support,” he said, noting that government policy so far has “kept people in their homes, it's kept businesses in business.”
Powell said both Congress and the central bank would need to do more in the months ahead. Since March, the Fed has put in place a series of measures to help cushion the economic fallout as businesses close or reduce capacity and as shoppers stay home from malls and movie theaters to control the spread of the coronavirus. The central bank has rolled out nine emergency lending programs, which are meant to keep credit flowing to businesses and state and local governments, and is purchasing government-backed bonds to keep markets functioning normally. Also, it has slashed interest rates to rock bottom to entice borrowing and spending.
On Tuesday, officials announced that they would extend their emergency lending programs through the end of the year. Seven of the programs were initially set to expire around the end of September but could still be needed as coronavirus cases have continued to rise.
That could take time, Powell said. The unemployment rate, while falling, remains historically high at 11.1%. Initial jobless claims ticked up last week after months of gradual improvement, stoking concerns that the economy might be backsliding.
The job losses are hitting disadvantaged communities particularly hard. The Fed's own surveys have shown that poorer people were more likely to lose jobs and that those with less education often did not have the option to work from home. The jobless rate for Black workers has skyrocketed to more than 15% and the unemployment rate for Black men continued to tick up in June even as the rate for other racial and gender groups began to fall.
While Fed officials' June economic projections suggested that they expected unemployment to fall below 10% by the end of the year, policymakers made it clear then that conditions were extremely uncertain.
The central bank's policies do seem to be offering support, at least around the edges. House buying has ticked up, fueled by cheap mortgage rates and the U.S. homeownership rate is now at levels last seen before the 2008 financial crisis.
Key credit markets have calmed down after a disorderly March and April, as has the market for U.S. government debt.
Powell also said the Federal Open Market Committee's longer-run framework review, which could guide the central bank's strategies, would be completed in the near future. Some economists took that news to mean that more action is coming at the Fed's Sept. 15-16 meeting.
“The July FOMC meeting was expected to be a placeholder event until more important decisions are made at the next meeting in September,” Michael Feroli, the chief U.S. economist at JP Morgan, said in a note. “The committee met those expectations.”
So, we will see. Clearly, the economy continues to struggle and is likely to do so for some time. This will heavily Depend on the future intensity of virus outbreaks, as well as investment programs from the government which are now being debated fiercely. These are highly significant fights that producers should watch closely as they intensify, Washington Insider believes.
WTO To Appoint Arbitrator Over US Request For Duties On China Goods
The WTO will appoint an arbitrator to rule on a U.S. request to hit $1.3 billion in China goods with retaliatory duties in a dispute over China's subsidies for wheat, corn and rice producers, a WTO official said on Wednesday.
The U.S. maintains China has not complied with a 2019 WTO ruling against Chinese agricultural support programs in a case brought late in the Obama administration in 2016.
China did not appeal the decision, and the U.S. agreed to give Beijing until the end of June 2020 to comply.
China insists they have complied, but the U.S. said they do not think that is the case.
The U.S. maintains China has not complied with a 2019 WTO ruling against Chinese agricultural support programs in a case brought late in the Obama administration in 2016.
China did not appeal the decision, and the U.S. agreed to give Beijing until the end of June 2020 to comply.
China insists they have complied, but the U.S. said they do not think that is the case.
China Purchases Of US Ag Goods Remains In Focus
Both Reuters and Bloomberg are running items which focus on the pace needed for China to meet its purchase commitments of U.S. ag products under the Phase One agreement.
Reuters reports data through May put the country well behind the pace needed and says that their recent purchase pace of U.S. corn and soybeans would have to be maintained in coming months in order to meet their commitments. Bloomberg reports that China has amassed purchases of U.S. cotton despite a global downturn in textile/clothing demand due to COVID-19.
The Wall Street Journal today reports the rise in Chinese corn prices to five-year highs is expected to result in stepped-up imports of corn and other grains, with U.S. corn farmers standing to benefit. Trade data for June due August 5 will provide a clearer picture of the situation.
But USDA announced in its Weekly Export Sales report that foreign buyers picked up 3.344 million metric tons of U.S. soybeans the week ended July 23, including 1.989 mmt to China. And USDA also announced via its daily export sales reporting system that private exporters sold 1.937 mmt of U.S. corn to China for 2020/21, the largest daily corn sale to China on record.
Reuters reports data through May put the country well behind the pace needed and says that their recent purchase pace of U.S. corn and soybeans would have to be maintained in coming months in order to meet their commitments. Bloomberg reports that China has amassed purchases of U.S. cotton despite a global downturn in textile/clothing demand due to COVID-19.
The Wall Street Journal today reports the rise in Chinese corn prices to five-year highs is expected to result in stepped-up imports of corn and other grains, with U.S. corn farmers standing to benefit. Trade data for June due August 5 will provide a clearer picture of the situation.
But USDA announced in its Weekly Export Sales report that foreign buyers picked up 3.344 million metric tons of U.S. soybeans the week ended July 23, including 1.989 mmt to China. And USDA also announced via its daily export sales reporting system that private exporters sold 1.937 mmt of U.S. corn to China for 2020/21, the largest daily corn sale to China on record.
Friday Watch List
Markets
The final day of July has a report on U.S. personal incomes and consumer spending at 7:30 a.m. CDT, along with the U.S. employment cost index. With soybeans getting closer to filling pods, the latest weather forecasts maintain high interest among traders as does any trade news.
Weather
Friday will be dry across northern and central crop areas. Rain will focus on the southern Midwest and portions of the Delta and Southeast with locally heavy amounts and some flood threat. Temperatures will be seasonally warm north and central, very warm south, and stressfully hot in the Far West and Northwest.
The final day of July has a report on U.S. personal incomes and consumer spending at 7:30 a.m. CDT, along with the U.S. employment cost index. With soybeans getting closer to filling pods, the latest weather forecasts maintain high interest among traders as does any trade news.
Weather
Friday will be dry across northern and central crop areas. Rain will focus on the southern Midwest and portions of the Delta and Southeast with locally heavy amounts and some flood threat. Temperatures will be seasonally warm north and central, very warm south, and stressfully hot in the Far West and Northwest.
Thursday, July 30, 2020
Farmers to Families Food Box Program Reaches 50 Million Boxes Delivered
Agriculture Secretary Sonny Perdue announced Wednesday the Farmers to Families Food Box Program has distributed over 50 million food boxes. The Department of Agriculture program supports American farmers and families affected the COVID-19 pandemic by delivering food boxes to needy families. Perdue says the milestone is a “testament to everyone’s hard work” on the program. The program supplies food boxes of fresh fruits and vegetables, dairy products, meat products and a combination box of fresh produce, dairy or meat products. Distributors package the products into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other non-profits serving Americans in need. The first round of purchases totaled $1.2 billion. The second round and current round aims to purchase up to $1.47 billion through August 31. The recently announced third round will use the remaining funds available to the program, up to $3 billion, and purchases will begin by September 1 and conclude at the end of October.
Biden Releases Rural America Plan
Joe Biden’s Presidential Campaign released Biden’s plan for Rural America Wednesday. The plan says Biden will pursue a rural economic development strategy that “partners with rural communities to invest in their unique assets.” The plan’s goal is to give young people more options to “live, work, and raise the next generation in rural America.” The plan seeks to pursue a trade policy “that works for American farmers.” That includes standing up to China to “negotiate the strongest possible position.” Biden also plans to support beginning farmers by expanding the Obama Administration’s microloan program for new and beginning farmers. Biden also wants to partner with farmers to make American agriculture first in the world to achieve net-zero emissions, giving farmers new sources of income in the process. Biden’s plan also calls for promoting ethanol, including investing $400 billion in clean energy research. The plan also says Biden will “use every tool at his disposal,” including the federal fleet and the federal government’s purchasing power, to promote and advance renewable energy, ethanol, and other biofuels.
Purdue: Unsolicited Seeds Could Wreak Havoc on Agriculture
Growing concerns around unsolicited seeds prompt at least 28 states to issue warnings not to plant the seeds. Indiana joined the list of states this week, warning of the potential damage to agriculture. Don Robison, seed administrator for the Office of Indiana State Chemist, says, "The last thing we want is to spread a weed, invasive species or disease, and that's a real risk if people plant these or throw them in the garbage." Robison says there is potential for serious harm to everything from backyard gardens to commodity and specialty crops. Utah officials confirmed at least one noxious weed in seeds sent to a resident in the state. Weed seeds, invasive species and disease pathogens can spread rapidly, costing millions of dollars annually for just a single plant or disease, and cause billions of dollars of impact overall each year. The seeds may be part of a "brushing" campaign in which online retailers send out unsolicited packages and use the fake sales to improve the seller's ratings in the marketplace.
Beef Board Issues New Long-Range Plan
The Beef Industry Long Range Plan task force officially introduced its new five-year plan for 2021-2025 this week at the Cattle Industry Summer Business Meeting in Denver. Updated every five years, the Beef Industry Long Range Plan is designed to help the beef industry establish a common set of objectives and priorities. It communicates the industry's strategic direction and provides insight on how the industry can serve its stakeholders by growing beef demand. Task Force leader Kim Brackett says, “We feel we've established some important priorities and strategies, as well as benchmarks for success that will help keep our industry on track through 2025 and beyond." The plan seeks to grow global beef demand by promoting the benefits of beef, improve industry-wide profitability through expanding processing capacity, and increase research efforts on sustainability. The plan also seeks to make traceability a reality in the U.S. beef industry. The task force convened several times over the past year and considered all aspects of the industry when formulating the plan.
Ernst to EPA: Make E15 Available at Every Pump
Iowa Republican Senator Joni Ernst is calling on the Environmental Protection Agency to make E15 available at every U.S. gas pump. Specifically, Ernst calls on EPA Administrator Andrew Wheeler to certify biofuel infrastructure for E15 and remove unnecessary labeling which will increase consumer access to E15. In a letter to Wheeler, Ernst writes, “You must act now to initiate a rulemaking process and follow through on this agreement to provide certainty to farmers,” citing COVID-19 pandemic losses. In May, Ernst led a bipartisan effort urging the Trump Administration to uphold the Renewable Fuel Standard and reject requests for the RFS to be waived. Ernst is currently pressing the White House to support the biofuels industry through coronavirus relief. The oil industry, expectedly, disagrees. The American Fuel and Petrochemical Manufacturers claim EPA could mandate a full 15 billion gallons with zero small refinery exemptions, and the fuel supply would still only be able to accommodate about 14.3 billion gallons of ethanol.
Legislation Would Incentivize Public Schools to Work With Farmers
The Small Farm to School Act seeks to create a pilot program to incentivize public schools to work closely with local farmers. The bill was introduced this week by Representatives Antonio Delgado, a New York Democrat, and Jim Sensenbrenner, a Wisconsin Republican. The legislation would create an eight-state pilot program where local public schools would be reimbursed at a higher rate for sourcing school lunches from small farmers under the National School Lunch Program. Specifically, the bill would provide a five cent-per-lunch subsidy when a component of the meal is sourced from a small, local farm. The cost of the subsidy would be split evenly between the federal government and the participating state. The Small Farm to School Act authorizes $20 million annually for the pilot in eight states. Delgado, a member of the House Agriculture Committee, says the legislation "will help form new partnerships that both assist our small farmers and the health of our young people."
Washington Insider: Senate Sets up Battle Over Medicaid
The Hill is reporting this week that the Senate didn't include a funding increase for Medicaid in its new COVID-19 response bill, ignoring pleas from both Democratic and Republican governors. This “tees up a contentious fight with the House over spending on the health care program for the poor,” The Hill said.
Governors facing massive budget shortfalls caused by the economic downturn have warned they will have to cut Medicaid and other programs if they don't get more help from Congress--but those warnings did not sway Senate Republicans who have resisted what they say would be “bailouts” of state and local governments.
“At the end of the day, it's got to be in there,” said Matt Salo, executive director of the National Association of Medicaid Directors.
“We're in this perfect storm of hurt, he said. Since states have to balance their budgets, the only way out of this is aggressive, concerted, federal, congressional action.”
Medicaid -- which is jointly paid for by states and the federal government -- covers about 70 million people. However, “enrollment is expected to increase as people lose their jobs and become newly eligible for the program.”
States are also facing increased costs from paying for COVID-19 treatment and services for beneficiaries. At the same time, tax revenue is falling, leaving massive budget holes that states are required to fill.
During recessions, governors and state legislatures tend to cut costly programs like Medicaid, which consumes about 20 percent of state budgets.
To avoid cuts, groups like the National Association of Medical Directors and the National Governors Association want Congress to temporarily increase the share of Medicaid costs paid by the federal government, to help cover increased enrollment costs and to free up state money for other areas like education.
A COVID-19 response bill recently passed by the House would increase the share of Medicaid costs paid by the federal government but it has not been considered by the Senate. Now House and Senate negotiators will have to hammer out a compromise in a final package that Congress hopes to pass in the coming weeks.
“There is increasing recognition that something needs to get done,” Salo said. “I feel confident that we will get there,” he added.
A spokesperson for House Speaker Nancy Pelosi, D-Calif., said: “This is obviously a critical program, which is why it was in the HEROES Act.” However, Senate Republicans and the administration have a complicated history with the Medicaid program and have spent the last few years trying to reduce spending and decrease enrollment among childless adults.
One disagreement between Republicans and Democrats is over a requirement passed in a previous COVID-19 response bill that prohibits states receiving increased Medicaid funding from cutting benefits or restricting eligibility. Republicans think the requirement is too restrictive to states and want to change it in the next response bill.
Congress passed a COVID-19 response bill in March that increases the federal government's share of Medicaid costs but governors say more help is needed. “The COVID-19 pandemic is drastically shrinking state and local revenue with most states experiencing a budget shortfall ranging between 5 and 20 percent,” the NGA and other groups wrote in a letter to congressional leaders earlier this month.
“Even states with a lower shortfall will be challenged to provide adequate healthcare services to their residents. This leaves state and local leaders with tough choices to balance their budgets while responding to a pandemic.”
For example, Colorado has already cut funding to its Medicaid dental program and cut payments to some providers by 1 percent, The Hill notes. Medicaid rates are already typically lower than rates paid by Medicare and private insurance. Other states, such as Florida and Tennessee, have put off planned improvements to the Medicaid program, like increases in provider rates and extra services for pregnant women, the report said.
Federal law prohibits states receiving increased Medicaid funding from cutting required benefits, increasing premiums or restricting eligibility—restrictions Congress put in place to protect beneficiaries from losing coverage during the pandemic. That means in order to find savings, states turn to cutting provider rates, which some experts say could be disastrous, especially for those that primarily see Medicaid patients.
Those providers are already struggling to maintain social distancing as they see more patients and as more people are staying at home and avoiding nonemergency care.
“Medicaid provider payment cuts will compound financial damage from the pandemic, raising the risk that pediatricians, behavioral health providers and safety net clinics close their doors,” said Aviva Aron-Dine, vice president for health policy for the Center on Budget and Policy Priorities.
So, we will see. The politics of federal assistance for anti-virus programs appear to be growing tougher as additional programs are considered—and, as needs for assistance grow. These battles for federal assistance are increasingly large and extended and should be watched closely as the season proceeds, Washington Insider believes.
Governors facing massive budget shortfalls caused by the economic downturn have warned they will have to cut Medicaid and other programs if they don't get more help from Congress--but those warnings did not sway Senate Republicans who have resisted what they say would be “bailouts” of state and local governments.
“At the end of the day, it's got to be in there,” said Matt Salo, executive director of the National Association of Medicaid Directors.
“We're in this perfect storm of hurt, he said. Since states have to balance their budgets, the only way out of this is aggressive, concerted, federal, congressional action.”
Medicaid -- which is jointly paid for by states and the federal government -- covers about 70 million people. However, “enrollment is expected to increase as people lose their jobs and become newly eligible for the program.”
States are also facing increased costs from paying for COVID-19 treatment and services for beneficiaries. At the same time, tax revenue is falling, leaving massive budget holes that states are required to fill.
During recessions, governors and state legislatures tend to cut costly programs like Medicaid, which consumes about 20 percent of state budgets.
To avoid cuts, groups like the National Association of Medical Directors and the National Governors Association want Congress to temporarily increase the share of Medicaid costs paid by the federal government, to help cover increased enrollment costs and to free up state money for other areas like education.
A COVID-19 response bill recently passed by the House would increase the share of Medicaid costs paid by the federal government but it has not been considered by the Senate. Now House and Senate negotiators will have to hammer out a compromise in a final package that Congress hopes to pass in the coming weeks.
“There is increasing recognition that something needs to get done,” Salo said. “I feel confident that we will get there,” he added.
A spokesperson for House Speaker Nancy Pelosi, D-Calif., said: “This is obviously a critical program, which is why it was in the HEROES Act.” However, Senate Republicans and the administration have a complicated history with the Medicaid program and have spent the last few years trying to reduce spending and decrease enrollment among childless adults.
One disagreement between Republicans and Democrats is over a requirement passed in a previous COVID-19 response bill that prohibits states receiving increased Medicaid funding from cutting benefits or restricting eligibility. Republicans think the requirement is too restrictive to states and want to change it in the next response bill.
Congress passed a COVID-19 response bill in March that increases the federal government's share of Medicaid costs but governors say more help is needed. “The COVID-19 pandemic is drastically shrinking state and local revenue with most states experiencing a budget shortfall ranging between 5 and 20 percent,” the NGA and other groups wrote in a letter to congressional leaders earlier this month.
“Even states with a lower shortfall will be challenged to provide adequate healthcare services to their residents. This leaves state and local leaders with tough choices to balance their budgets while responding to a pandemic.”
For example, Colorado has already cut funding to its Medicaid dental program and cut payments to some providers by 1 percent, The Hill notes. Medicaid rates are already typically lower than rates paid by Medicare and private insurance. Other states, such as Florida and Tennessee, have put off planned improvements to the Medicaid program, like increases in provider rates and extra services for pregnant women, the report said.
Federal law prohibits states receiving increased Medicaid funding from cutting required benefits, increasing premiums or restricting eligibility—restrictions Congress put in place to protect beneficiaries from losing coverage during the pandemic. That means in order to find savings, states turn to cutting provider rates, which some experts say could be disastrous, especially for those that primarily see Medicaid patients.
Those providers are already struggling to maintain social distancing as they see more patients and as more people are staying at home and avoiding nonemergency care.
“Medicaid provider payment cuts will compound financial damage from the pandemic, raising the risk that pediatricians, behavioral health providers and safety net clinics close their doors,” said Aviva Aron-Dine, vice president for health policy for the Center on Budget and Policy Priorities.
So, we will see. The politics of federal assistance for anti-virus programs appear to be growing tougher as additional programs are considered—and, as needs for assistance grow. These battles for federal assistance are increasingly large and extended and should be watched closely as the season proceeds, Washington Insider believes.
Iowa Lawmakers' Ethanol Focus Continues
Sen. Joni Ernst, R-Iowa, is keeping up pressure on EPA over biofuels, this time shifting her attention to the issue of E15 and expanding the availability of the fuel after EPA changed its rules to allow for year-round sales of the higher ethanol blend.
In a letter to EPA Administrator Andrew Wheeler, Ernst pointed out that the infrastructure issues for E15 are not necessarily valid, noting that all steel fuel tanks and fiberglass tanks put in service since 1990 are approved for up to 100% ethanol.
“Given the lifespan of underground tanks, almost every underground fuel tank should be able to handle E15 and higher blends of ethanol,” Ernst stated.
Meanwhile, Sen. Chuck Grassley, R-Iowa, said aid for the U.S. biofuel sector may come down to decisions made by USDA Secretary Sonny Perdue.
"We're in a position of depending on the Secretary of Agriculture if this $20 billion goes to him, getting some of it for ethanol," Grassley said on Tuesday, following a question from DTN.
The package provides $20 billion to USDA Secretary Sonny Perdue to help agricultural producers, growers and processors. The latter is being cited by some as covering ethanol producers.
In a letter to EPA Administrator Andrew Wheeler, Ernst pointed out that the infrastructure issues for E15 are not necessarily valid, noting that all steel fuel tanks and fiberglass tanks put in service since 1990 are approved for up to 100% ethanol.
“Given the lifespan of underground tanks, almost every underground fuel tank should be able to handle E15 and higher blends of ethanol,” Ernst stated.
Meanwhile, Sen. Chuck Grassley, R-Iowa, said aid for the U.S. biofuel sector may come down to decisions made by USDA Secretary Sonny Perdue.
"We're in a position of depending on the Secretary of Agriculture if this $20 billion goes to him, getting some of it for ethanol," Grassley said on Tuesday, following a question from DTN.
The package provides $20 billion to USDA Secretary Sonny Perdue to help agricultural producers, growers and processors. The latter is being cited by some as covering ethanol producers.
Booker Offers Legislation to Slow Plant Line Speeds
Sen. Cory Booker, D-N.J., filed a bill on Tuesday that would suspend all current and future line-speed waivers for meatpacking plants during the COVID-19 pandemic, in line with a companion House bill from Rep. Marcia Fudge, D-Ohio, and others. The legislation would cover both meat and poultry processing.
“The situation has only worsened since the USDA has approved nearly 20 requests from meatpacking plants to exceed regulatory limits on line speeds despite the risks posed to workers, consumers, and animal welfare,” Booker said.
But the idea of slowing line speeds is being met with pushback from the U.S. meat industry. Smithfield Foods CEO Ken Sullivan said that slowing them by 50% “means euthanizing half of our nation's livestock, the collapse of farm prices (law of supply and demand), burying food in the ground, food insecurity and higher food prices for everyone including, most importantly, those that can least afford it.”
“The situation has only worsened since the USDA has approved nearly 20 requests from meatpacking plants to exceed regulatory limits on line speeds despite the risks posed to workers, consumers, and animal welfare,” Booker said.
But the idea of slowing line speeds is being met with pushback from the U.S. meat industry. Smithfield Foods CEO Ken Sullivan said that slowing them by 50% “means euthanizing half of our nation's livestock, the collapse of farm prices (law of supply and demand), burying food in the ground, food insecurity and higher food prices for everyone including, most importantly, those that can least afford it.”
Thursday Watch List
Markets
At 7:30 a.m. CDT Thursday, the lineup includes weekly export sales, U.S. jobless claims, a report on second-quarter U.S. GDP and an update of the U.S. Drought Monitor. Natural gas inventory is posted at 9:30 a.m. and weather and trade news will also get traders' attention.
Weather
Moderate to locally heavy rain is in store for the central Plains through southern Midwest, Delta and Southeast Thursday. Some flooding is possible in areas with heavier rains. Dry conditions will be in place elsewhere. Temperature will be seasonal in northern and central areas and hot south and northwest. Heat bulletins cover much of the western and northwestern U.S.
At 7:30 a.m. CDT Thursday, the lineup includes weekly export sales, U.S. jobless claims, a report on second-quarter U.S. GDP and an update of the U.S. Drought Monitor. Natural gas inventory is posted at 9:30 a.m. and weather and trade news will also get traders' attention.
Weather
Moderate to locally heavy rain is in store for the central Plains through southern Midwest, Delta and Southeast Thursday. Some flooding is possible in areas with heavier rains. Dry conditions will be in place elsewhere. Temperature will be seasonal in northern and central areas and hot south and northwest. Heat bulletins cover much of the western and northwestern U.S.
Wednesday, July 29, 2020
Coronavirus Relief Includes $20 Billion for Agriculture
The Senate coronavirus relief package includes an expected $20 billion for agriculture. The relief package worth $1 trillion released this week by Republican leadership in the Senate, however, falls short, according to Democrats. And, Congress will need to act quickly and reach an agreement to pass a bill before expanded unemployment benefits expire. The Senate HEALS Act specifically provides $20.45 billion in direct funding to the Office of Agriculture Secretary Sonny Perdue, but does not make changes to how the Commodity Credit Corporation can spend money, according to the Hagstrom Report. House Speaker Nancy Pelosi, a California Democrat, criticized the Senate bill, saying, “They don’t have money for food stamps, but they have money for an FBI building.” The bill asks for $1.75 billion to rebuild the existing FBI headquarters. The House passed HEROES Act, a $3 trillion bill, would raise the max Supplemental Nutrition Assistance Program benefit, and prohibit the Trump administration from implementing three proposed rules that would cut benefits and eligibility.
Lawsuit Challenges Bioengineered GMO Food Labeling
A lawsuit led by the Center for Food Safety challenges Department of Agriculture rules on labeling genetically engineered, or GMO foods, as bioengineered foods. The lawsuit claims the final regulations, issued in 2019, includes provisions “which will leave the majority of GMO-derived foods unlabeled,” as it prohibits the use of the widely known terms GMO and GE. The Center for Food Safety is representing a coalition of food labeling nonprofits and retailers, including the Natural Grocers, operating 157 stores in 20 states, and Puget Consumers Co-op, the nation's largest community-owned food market. CFS legal director George Kimbrell, counsel in the case, says, "The American public successfully won GE food labeling after more than a two-decade fight, but the Trump rules fall far short of what consumers reasonably expect and the law requires.” The Center for Food Safety also challenges USDA's allowance of electronic or digital disclosure on packaging, also known as "QR code" or "smartphone" labeling, without requiring additional on-package labeling, among other issues.
Farmers Deserve a Seat at the Table in Milk Pricing Policy
The American Farm Bureau Federation released its final report on priorities for milk pricing reform, calling for more democracy and a more equitable program for dairy farmers. A Farm Bureau Federal Milk Marketing Order Working Group worked for a year to examine the system and develop recommendations to modernize the current FMMO system. Among AFBF's priorities is amending the Agricultural Marketing Agreement Act to allow dairy farmers to directly vote on Federal Milk Marketing Order issues. Currently, only dairy farmers who are independent and not members of cooperatives may cast individual ballots. Cooperatives may allow their members to vote independently, but then lose their ability to bloc vote on behalf of their non-participating members. AFBF supports allowing modified bloc-voting, which would allow co-op members to vote independently, while allowing cooperatives to cast ballots for farmers who choose not to cast an individual ballot. Other recommendations in the final report include expanding price discovery and examining alternative ways to price fluid milk and improve risk-sharing between farmers and processors.
China Asks for Packages from U.S. to Investigate Unsolicited Seed Mailings
The China seed saga continues as Chinese officials ask for packages from the U.S. to investigate. In a daily briefing with media, a spokesperson with China’s Foreign Affairs Ministry Tuesday stated China Post, China’s state-owned postal service, has contacted the U.S. Postal Service, asking it to send fake packages to China for investigation. The spokesperson noted China is a member of the Universal Postal Union, which prohibits plant seeds as imports, or in transit, for member countries. China Post says, for some of the packages, the return address labels “turned out to be fake ones with erroneous layouts and entries,” suggesting the origin of the packages is unknown. Reports of unsolicited seeds showing up in U.S. mailboxes surfaced last week. The Department of Agriculture and several states urge residents to report the packages to state agriculture officials and dispose of the seeds properly. USDA considers the practice agricultural smuggling and is investigating.
NCBA Addresses Checkoff Referendum Petition
The National Cattlemen’s Beef Association this week released its response to a petition calling for a vote on the Beef Checkoff. A group of cattle organizations, including R-CALF USA, launched the petition earlier this month. NCBA President Marty Smith says, “NCBA fully supports the producers’ right to have their voices heard on the future of the checkoff. However, we also believe the petition and signature gathering processes should be transparent and conducted with integrity.” Smith says the Beef Checkoff has a long track record of solid returns for each dollar invested, adding, “we believe that a majority of cattlemen and women stand behind the program.” The Department of Agriculture also responded, stating a group of ten percent or more of the number of cattle producers must request the referendum. USDA also questioned the methods of gathering signatures, saying, “USDA will apply additional scrutiny to petition signatures obtained through an online platform and will consider whether any signatures have been obtained subject to improper influence or coercion.”
Potatoes USDA: Retail Potato Sales Reach Record highs
Retail potato sales reached a five-year record high July 2019 through June 2020. U.S. potato marketing organization Potatoes USA reports total potato sales increased by 11 percent in dollars and ten percent in volume. Every category, except deli-prepared sides, increased in both dollar and volume sales. Frozen, dehydrated, and canned potatoes saw double-digit increases in both dollar and volume sales. Potato chips and fresh potatoes make up the majority of volume sales, and both saw increases in dollars and volume. Fresh potato sales increased 15 percent and ten percent in volume sales compared to the previous year. All fresh potato types increased in volume sales, except for red and fingerling potatoes. Petite potatoes had the highest increase in dollar and volume sales. All pack sizes showed double-digit growth in dollar sales. Pack sizes greater than ten-pound bags saw an increase in excess of 20 percent in dollar and volume sales. Fresh potatoes had a larger dollar sales increase than any of the last five marketing years.
Washington Insider: Coronavirus Relief Fight Renewed
Bloomberg reports this week that Senate Majority Leader Mitch McConnell, R-Ky., is taking the $1 trillion GOP virus relief package into negotiations with Democrats weighed down by a divided party and friction with the White House.
The report notes a “fresh urgency for Republicans to act” months after McConnell pressed the “pause button” on new aid, as virus cases and deaths have soared and the president's poll ratings have slumped, threatening GOP control of both the White House and Senate.
It also notes that Senate Republicans are split sharply, with some conservatives such as Sen. Ted Cruz, R-Texas, wanting to spend far less, if anything, on another stimulus amid record deficits, while others want more aid to state and local governments.
Democrats, who've proposed a $3.5 trillion virus relief package, are eager to exploit those divisions. After meeting for almost two hours Monday night with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., criticized the GOP proposal and said McConnell wouldn't even be able to count on Republican backing if it was put before the Senate.
“It's pretty clear they don't have 51 votes in the Senate among the Republicans for a proposal,” Schumer said.
With supplemental unemployment insurance expiring and other elements of the last stimulus legislation beginning to dry up, Congress has little time for extended negotiations, Bloomberg thinks. Lawmakers are set to leave for an August break in two weeks and will be facing a timetable compressed by the looming November election when they return in September.
“The American people need more help, they need it to be comprehensive, and they need it to be carefully tailored to this crossroads,” McConnell said as he rolled out the GOP package. The bill would trim extra unemployment benefits, send $1,200 payments to a majority of Americans and shield schools, businesses, and other groups from lawsuits stemming from infections.
Bloomberg noted key items in the bill include, among other things, $105 billion in education funding, with $70 billion going toward elementary, middle and high schools; $29 billion for colleges, and $5 billion for a flexible fund. Two-thirds of the funds would go to schools that institute reopening plans and the rest to schools as a whole, under existing federal formulas.
In addition, it would include a second round of the Paycheck Protection Program aimed to target those worst affected and a new government-guaranteed, long-term loan initiative of almost $60 billion created for seasonal firms and those in low-income communities as well as $16 billion to help states ramp up tests and contact tracing. Republicans in the Senate had initially sought $25 billion in new funds. Also, the bill seeks to end dependence on foreign supply chains for personal protective equipment through tax credits to spur domestic manufacturing.
The bill also includes $10 billion for the nation's airports as the pandemic continues to strain the aviation industry, although that figure is less than the $13 billion requested by airport organizations. Facilities that receive aid would have to keep at least 90% of their workers employed through March 2021. More than 3,000 U.S. airports already received a combined $10 billion under the March coronavirus relief package.
The bill also includes $1.75 billion for a new FBI headquarters in Washington, a priority for the president who wants to prevent the facility from being moved to the suburbs. Plans to relocate the FBI from its current location about four blocks from the White House had been in the works since about 2012 — but were scuttled after the president took office.
Not included in the proposal is any new money for states and cities to cope with swelling budget shortfalls, leaving them to contend with a grave financial crisis that's already forcing them to slash spending, furlough workers and delay major projects as tax revenue disappears. That's a stark contrast to the approximately $1 trillion that Democrats included in the bill the House passed last May, Bloomberg said.
So, we will see. The politics surrounding coronavirus relief have hardened significantly in recent weeks, as the pre-election debate has intensified. While the need for additional support has increased as the virus attacks have continued with the approach of the new school year — but so has the “sticker shock” of the growing deficits. These are concerns and debates that producers should watch closely as the fights intensify, Washington Insider believes.
The report notes a “fresh urgency for Republicans to act” months after McConnell pressed the “pause button” on new aid, as virus cases and deaths have soared and the president's poll ratings have slumped, threatening GOP control of both the White House and Senate.
It also notes that Senate Republicans are split sharply, with some conservatives such as Sen. Ted Cruz, R-Texas, wanting to spend far less, if anything, on another stimulus amid record deficits, while others want more aid to state and local governments.
Democrats, who've proposed a $3.5 trillion virus relief package, are eager to exploit those divisions. After meeting for almost two hours Monday night with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows, Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., criticized the GOP proposal and said McConnell wouldn't even be able to count on Republican backing if it was put before the Senate.
“It's pretty clear they don't have 51 votes in the Senate among the Republicans for a proposal,” Schumer said.
With supplemental unemployment insurance expiring and other elements of the last stimulus legislation beginning to dry up, Congress has little time for extended negotiations, Bloomberg thinks. Lawmakers are set to leave for an August break in two weeks and will be facing a timetable compressed by the looming November election when they return in September.
“The American people need more help, they need it to be comprehensive, and they need it to be carefully tailored to this crossroads,” McConnell said as he rolled out the GOP package. The bill would trim extra unemployment benefits, send $1,200 payments to a majority of Americans and shield schools, businesses, and other groups from lawsuits stemming from infections.
Bloomberg noted key items in the bill include, among other things, $105 billion in education funding, with $70 billion going toward elementary, middle and high schools; $29 billion for colleges, and $5 billion for a flexible fund. Two-thirds of the funds would go to schools that institute reopening plans and the rest to schools as a whole, under existing federal formulas.
In addition, it would include a second round of the Paycheck Protection Program aimed to target those worst affected and a new government-guaranteed, long-term loan initiative of almost $60 billion created for seasonal firms and those in low-income communities as well as $16 billion to help states ramp up tests and contact tracing. Republicans in the Senate had initially sought $25 billion in new funds. Also, the bill seeks to end dependence on foreign supply chains for personal protective equipment through tax credits to spur domestic manufacturing.
The bill also includes $10 billion for the nation's airports as the pandemic continues to strain the aviation industry, although that figure is less than the $13 billion requested by airport organizations. Facilities that receive aid would have to keep at least 90% of their workers employed through March 2021. More than 3,000 U.S. airports already received a combined $10 billion under the March coronavirus relief package.
The bill also includes $1.75 billion for a new FBI headquarters in Washington, a priority for the president who wants to prevent the facility from being moved to the suburbs. Plans to relocate the FBI from its current location about four blocks from the White House had been in the works since about 2012 — but were scuttled after the president took office.
Not included in the proposal is any new money for states and cities to cope with swelling budget shortfalls, leaving them to contend with a grave financial crisis that's already forcing them to slash spending, furlough workers and delay major projects as tax revenue disappears. That's a stark contrast to the approximately $1 trillion that Democrats included in the bill the House passed last May, Bloomberg said.
So, we will see. The politics surrounding coronavirus relief have hardened significantly in recent weeks, as the pre-election debate has intensified. While the need for additional support has increased as the virus attacks have continued with the approach of the new school year — but so has the “sticker shock” of the growing deficits. These are concerns and debates that producers should watch closely as the fights intensify, Washington Insider believes.
USDA Addresses Unsolicited Seeds Received by Some Americans
Consumers in multiple states have received packages of seeds that are labeled as jewelry or have Chinese language on the packets. Agriculture commissioners in several states have warned against planting the seeds.
States reporting the deliveries include Arizona, Kansas, Louisiana, Ohio, Oklahoma, Utah, Virginia and Washington.
USDA's Animal and Plant Health Inspection Service (APHIS) tweeted Tuesday they are “working closely with @CBP and State Depts of Ag re: unrequested seeds.” They urge those receiving the seeds to contact their state ag department or the state Plant Health Office. “Keep packaging and do not plant seeds from an unknown origin!” APHIS urged.
Chinese foreign ministry spokesman Wang Wenbin said China strictly follows restrictions on sending seeds and said the records on the packages appear to have been falsified, according to checks by China's postal service.
States reporting the deliveries include Arizona, Kansas, Louisiana, Ohio, Oklahoma, Utah, Virginia and Washington.
USDA's Animal and Plant Health Inspection Service (APHIS) tweeted Tuesday they are “working closely with @CBP and State Depts of Ag re: unrequested seeds.” They urge those receiving the seeds to contact their state ag department or the state Plant Health Office. “Keep packaging and do not plant seeds from an unknown origin!” APHIS urged.
Chinese foreign ministry spokesman Wang Wenbin said China strictly follows restrictions on sending seeds and said the records on the packages appear to have been falsified, according to checks by China's postal service.
CFAP Payments Reach $6.55 Billion
USDA has now paid out $6.55 billion under the Coronavirus Food Assistance Program (CFAP) with 473,124 applications approved as of July 27.
Of the $6.55 billion, USDA has paid out $3.31 billion for livestock, $1.73 billion for non-specialty crops, $1.29 billion for dairy and $227.5 million for specialty crops. Payouts by commodities are led by $2.87 billion for cattle, $1.29 billion for milk, $1.18 billion for corn, $416.1 million for hogs, $330.8 million for soybeans and $164.6 million for upland cotton.
USDA initially projected that the initial round of payments to producers (80% of estimated gross payments) would be $3.01 billion for non-specialty crops, $2.30 billion for special crops, $2.78 billion for dairy, $4.35 billion for cattle, $2.14 billion for hogs and pigs and $80 million for other sectors for a total of $15.38 billion.
The top six states receiving the aid are Iowa ($678.8 million), Nebraska ($484.2 million), Minnesota ($420.4 million), Wisconsin ($384.2 million), Texas ($355.6 million) and California ($345.4 million).
Of the $6.55 billion, USDA has paid out $3.31 billion for livestock, $1.73 billion for non-specialty crops, $1.29 billion for dairy and $227.5 million for specialty crops. Payouts by commodities are led by $2.87 billion for cattle, $1.29 billion for milk, $1.18 billion for corn, $416.1 million for hogs, $330.8 million for soybeans and $164.6 million for upland cotton.
USDA initially projected that the initial round of payments to producers (80% of estimated gross payments) would be $3.01 billion for non-specialty crops, $2.30 billion for special crops, $2.78 billion for dairy, $4.35 billion for cattle, $2.14 billion for hogs and pigs and $80 million for other sectors for a total of $15.38 billion.
The top six states receiving the aid are Iowa ($678.8 million), Nebraska ($484.2 million), Minnesota ($420.4 million), Wisconsin ($384.2 million), Texas ($355.6 million) and California ($345.4 million).
Wednesday Watch List
Markets
In addition to weather forecasts and trade news, an index of U.S. pending home sales is set for 9 a.m. CDT, followed by the U.S. Energy Department's weekly inventory report at 9:30 a.m. The Federal Reserve will have an announcement at 1 p.m. CDT and is expected to keep interest rates near zero.
Weather
A front and a developing system will combine to provide periods of moderate to heavy rain from the Black Hills in South Dakota through the Southeast on Wednesday. There is a risk for flooding with these showers in the Black Hills and also for most of Oklahoma as well.
In addition to weather forecasts and trade news, an index of U.S. pending home sales is set for 9 a.m. CDT, followed by the U.S. Energy Department's weekly inventory report at 9:30 a.m. The Federal Reserve will have an announcement at 1 p.m. CDT and is expected to keep interest rates near zero.
Weather
A front and a developing system will combine to provide periods of moderate to heavy rain from the Black Hills in South Dakota through the Southeast on Wednesday. There is a risk for flooding with these showers in the Black Hills and also for most of Oklahoma as well.
Tuesday, July 28, 2020
USDA Announces More Farmers to Families Food Box Program Purchases
The Department of Agriculture will launch a third round of Farmers to Families Food Box Program purchases in September. The purchases will spend the balance of $3 billion authorized for the program. So far, over 46 million Farmers to Families Food Boxes have been invoiced and delivered. Agriculture Secretary Sonny Perdue says the program "is accomplishing what we intended – supporting U.S. farmers and distributors and getting food to those who need it most." In the third round of purchases, USDA plans to purchase combination boxes to ensure all recipient organizations have access to fresh produce, dairy products, fluid milk, and meat products. In the ongoing second round of purchasing and distribution, which began July 1, USDA aims to purchase up to $1.47 billion of food for the program. For the second round, USDA extended contracts of select vendors from the first round of the program worth up to $1.27 billion. The first round of purchases totaled more than $947 million from May 15 through June 30, 2020.
U.S. Residents Receiving Unsolicited Seeds from China
Numerous state agriculture departments, along with the U.S. Department of Agriculture, are urging consumers not to plant seeds sent to them from China. Americans across the country report receiving unsolicited seeds from China in packages labeled as jewelry. These unknown seeds are a concern for American farmers, as they could be invasive species, introduce diseases to local plants, or be harmful to livestock. USDA considers the practice agricultural smuggling, and all states reporting the practice are asking consumers to notify their state agriculture departments. Consumers are asked not to open any sealed package containing seeds, and not throw unsealed seeds in the trash, as they could grow in landfills. The packages may be part of what is called a brushing scheme, where criminals buy their own cheap products, send them to a real address, then write a positive review about their product online. Similar packages containing seeds are showing up in mailboxes in Britain, as well.
Rural America 2020 Campaign Says Trump Policies Hurting Farmers
A new political campaign, Rural America 2020, takes aim at the Trump administration. Founded by a self-described former Trump voter, Ohio farmer Chris Gibbs, the campaign advocates for policies that benefit agriculture and rural America. The group seeks to bring attention to President Donald Trump’s trade war, alleged rural community failures, and provide policy solutions for a stronger rural America. The campaign cites a rise in farm bankruptcies, farm debt and the decline in net farm income. Gibbs says, “Rural communities all across this nation are struggling under this administration.” He adds, “Too often rural America is portrayed with a broad brush as Trump country," saying Rural American 2020 is a way for rural residents to speak out against the Trump administration. In addition to building community-level coalitions in Michigan, Ohio, Pennsylvania, Wisconsin, Minnesota and Iowa, Rural America 2020 will be advertising in key states to highlight farmer's voices who are critical of the President and his policies.
Grains Council Hosting Virtual Annual Meeting
Amid the ongoing COVID-19 pandemic, the U.S. Grains Council kicked off its 60th Annual Board of Delegates Meeting virtually Monday. The meeting seeks to help U.S. grain sector leaders assess the challenges affecting their industry and offer reassurance grain exports continue despite disruptions. The meeting began on an encouraging note from USGC Chairman Darren Armstrong, a farmer from North Carolina, who reviewed the current marketing year’s top five markets for U.S. corn – Mexico, Japan, Colombia, South Korea and China, and the top three markets for U.S. sorghum. Armstrong says, “While the current domestic demand situation is challenging, the export outlook has bright spots to share.” USGC will hold its Board of Delegates meeting and conduct elections today (Tuesday.) The meeting will wrap up on Wednesday with virtual Advisory Team meetings in the morning and a closing general session in the afternoon. Armstrong adds, “Throughout this extraordinary time, U.S. farmers have never stopped working and neither has the U.S. Grains Council.”
BQA Program Earns Compliance with International Animal Welfare Standards
The Beef Quality Assurance Program, known as BQA, is now recognized as an industry-leading animal welfare program. Funded by the Beef Checkoff and managed by the National Cattlemen’s Beef Association, the program complies with the International Organization for Standardization Animal Welfare Management General Requirements and. The standard was developed in 2016 for programs to show they are aligned with the principles of the World Organization of Animal Health Terrestrial Animal Health Code. Julia Herman, Beef Cattle Specialist Veterinarian for NCBA, says affirmation that the program complies with the specifications is “an important recognition of U.S. cattle producers’ continued commitment to delivering a safe, high quality beef supply while maintaining the highest animal welfare standards.” Developed more than 30 years ago, the BQA program has become the industry standard for delivering education and resources to cattle producers. More than 85 percent of the U.S. beef supply today is managed by BQA-certified farmers and ranchers, according to the National BQA Database
USDA Launches New Farmers.gov Features to Help Farmers Hire Workers
New features on the farmers.gov website will help facilitate the employment of H-2A workers. The Department of Agriculture announced the new features Monday, which includes a real-time dashboard that enables farmers to track the status of their eligible employer application and visa applications for temporary nonimmigrant workers. Agriculture Secretary Sonny Perdue says USDA’s goal is to help farmers navigate the complex H-2A program administered by Department of Labor, Department of Homeland Security, and the State Department. The changes aim to make hiring a farmworker an easier process for farmers to navigate. The changes also include a streamlined login process and enables easy access to the Department of Labor's Foreign Labor Application Gateway. Additionally, the changes allow farmers to track time-sensitive actions and allows for farmers to access all application forms online. Secretary Perdue says, "We will continue working to streamline these and other processes to better serve our customers across the country.”
Washington Insider: National Debt Concerns Grow
The Hill is reporting this week that a group of Senate Republicans are raising red flags over the rapid expansion of the Federal Reserve's balance sheet. They are raising concerns that this could impact interest rates, the strength of the U.S. dollar and the overall U.S. economy “before colleagues realize it's a serious problem.”
The Hill says these worries are being led by Sens. Rick Scott, R-Fla., David Perdue, R-Ga., James Lankford, R-Okla. They show that opposition to passing a stimulus bill that exceeds $1 trillion is spreading in the GOP conference beyond Tea Party stalwarts such as Sens. Rand Paul, R-Ky., and Ted Cruz, R-Texas.
In addition, as deficit concerns go mainstream in the Senate GOP conference, pressure is rising on Senate Majority Leader Mitch McConnell, R-Ky., to take a hard line with the administration and Senate Democrats in the relief negotiations.
The stakes of the current talks are high, especially since McConnell is up for reelection against a well-funded Democratic opponent. He wants to deliver for his state but also to avoid a backlash from the conservative right, including Paul and Cruz, who have been highly critical of the projected cost of the next package.
Now more mainstream members of the GOP conference are joining in the alarm over the Federal Reserve's balance sheet, which has ballooned from $4.27 trillion on March 11 to $6.93 trillion on July 22. During that span, the Fed's ownership of U.S. Treasury securities has soared from $2.52 trillion to $4.27 trillion.
Some Republicans worry that with the U.S. debt climbing, they're seeing a drop off in demand in the world's financial markets for U.S. bonds, which could foreshadow climbing interest rates and a major problem for the economy down the road.
Sen. Scott said that he's also worried about the price of gold going up. He warned GOP colleagues during private discussions on the stimulus bill. Asked about the chances of dropping demand for U.S. debt, Scott says “it's already happened.”
Monthly statements from the Treasury Department show that debt held by the public jumped by $3.1 trillion from the beginning of March to the beginning of July. During that time, the Fed's outright ownership of U.S. Treasury securities climbed $1.74 trillion. The Hill estimated that the Fed has purchased about 56 percent of the Treasury debt issued in March, April, May and June.
“Sen. Scott is right that over this four-month period, more than half of the increase in debt held by the public was purchased by the Fed,” said David Wilcox, senior fellow at the Peterson Institute for International Economics. He noted that most of the Fed purchases occurred during the height of the financial panic in March and April.
“This was a period of extraordinary dysfunction for a six-week period from mid-March to the end of April and during that period—yes, absolutely — it was the design of the Fed to purchase Treasury debt at an historically unprecedented pace,” he said. Wilcox noted that Fed purchases of treasuries moderated in May and June to a pace of “about $25 billion per week” and interest rates have remained low.
Still, some GOP senators worry that interest rates could ratchet up and catch Washington by surprise — which would require Congress to appropriate tens of billions of dollars more on an annual basis to service the debt.
Perdue, the former CEO of Reebok and Dollar General, said he's raised his concerns with Treasury Secretary Steven Mnuchin and National Economic Director Larry Kudlow.
“We've gone from $23 [trillion] to $26 trillion in debt,” he said. “I'm really worried about the potential impact here of another $1 trillion or whatever we end up with. We need to be very circumspect. Anything we need to do now needs to be very targeted,” he said.
Perdue worries the Fed balance sheet could grow to more than $13 trillion and said that he's raised the issue with Federal Reserve Chairman Jerome Powell. And, he said he was worried about muted demand for U.S. debt at a recent auction.
Like Scott, Perdue thinks the Fed had to step in and buy up treasuries to make up for diminished demand for U.S. debt in the financial markets. “The Fed stepped in and what that did is it kept interest rates low, artificially,” he said. “Because if you were to go to the market, supply and demand, you'd have to increase interest rates to get people to buy it.”
Bank of America Merrill Lynch chief investment strategist Michael Hartnett warned on Friday that growing debt and maxed out fiscal policy will cause a “great debasement” of the dollar. Hartnett wrote that erosion of the dollar is “underway as the default narrative for U.S. economy with excess debt, insufficient growth, and maxed-out monetary & fiscal stimulus.”
So, we will see. It is not surprising that concerns about growing interventions in the economy are raising risks, observers say. However, the coronavirus is still the main threat and Congress seems certain to craft another big relief bill -- in spite of growing discomforts about impacts on the economy. These are debates producers should watch closely as they intensify, Washington Insider believes.
The Hill says these worries are being led by Sens. Rick Scott, R-Fla., David Perdue, R-Ga., James Lankford, R-Okla. They show that opposition to passing a stimulus bill that exceeds $1 trillion is spreading in the GOP conference beyond Tea Party stalwarts such as Sens. Rand Paul, R-Ky., and Ted Cruz, R-Texas.
In addition, as deficit concerns go mainstream in the Senate GOP conference, pressure is rising on Senate Majority Leader Mitch McConnell, R-Ky., to take a hard line with the administration and Senate Democrats in the relief negotiations.
The stakes of the current talks are high, especially since McConnell is up for reelection against a well-funded Democratic opponent. He wants to deliver for his state but also to avoid a backlash from the conservative right, including Paul and Cruz, who have been highly critical of the projected cost of the next package.
Now more mainstream members of the GOP conference are joining in the alarm over the Federal Reserve's balance sheet, which has ballooned from $4.27 trillion on March 11 to $6.93 trillion on July 22. During that span, the Fed's ownership of U.S. Treasury securities has soared from $2.52 trillion to $4.27 trillion.
Some Republicans worry that with the U.S. debt climbing, they're seeing a drop off in demand in the world's financial markets for U.S. bonds, which could foreshadow climbing interest rates and a major problem for the economy down the road.
Sen. Scott said that he's also worried about the price of gold going up. He warned GOP colleagues during private discussions on the stimulus bill. Asked about the chances of dropping demand for U.S. debt, Scott says “it's already happened.”
Monthly statements from the Treasury Department show that debt held by the public jumped by $3.1 trillion from the beginning of March to the beginning of July. During that time, the Fed's outright ownership of U.S. Treasury securities climbed $1.74 trillion. The Hill estimated that the Fed has purchased about 56 percent of the Treasury debt issued in March, April, May and June.
“Sen. Scott is right that over this four-month period, more than half of the increase in debt held by the public was purchased by the Fed,” said David Wilcox, senior fellow at the Peterson Institute for International Economics. He noted that most of the Fed purchases occurred during the height of the financial panic in March and April.
“This was a period of extraordinary dysfunction for a six-week period from mid-March to the end of April and during that period—yes, absolutely — it was the design of the Fed to purchase Treasury debt at an historically unprecedented pace,” he said. Wilcox noted that Fed purchases of treasuries moderated in May and June to a pace of “about $25 billion per week” and interest rates have remained low.
Still, some GOP senators worry that interest rates could ratchet up and catch Washington by surprise — which would require Congress to appropriate tens of billions of dollars more on an annual basis to service the debt.
Perdue, the former CEO of Reebok and Dollar General, said he's raised his concerns with Treasury Secretary Steven Mnuchin and National Economic Director Larry Kudlow.
“We've gone from $23 [trillion] to $26 trillion in debt,” he said. “I'm really worried about the potential impact here of another $1 trillion or whatever we end up with. We need to be very circumspect. Anything we need to do now needs to be very targeted,” he said.
Perdue worries the Fed balance sheet could grow to more than $13 trillion and said that he's raised the issue with Federal Reserve Chairman Jerome Powell. And, he said he was worried about muted demand for U.S. debt at a recent auction.
Like Scott, Perdue thinks the Fed had to step in and buy up treasuries to make up for diminished demand for U.S. debt in the financial markets. “The Fed stepped in and what that did is it kept interest rates low, artificially,” he said. “Because if you were to go to the market, supply and demand, you'd have to increase interest rates to get people to buy it.”
Bank of America Merrill Lynch chief investment strategist Michael Hartnett warned on Friday that growing debt and maxed out fiscal policy will cause a “great debasement” of the dollar. Hartnett wrote that erosion of the dollar is “underway as the default narrative for U.S. economy with excess debt, insufficient growth, and maxed-out monetary & fiscal stimulus.”
So, we will see. It is not surprising that concerns about growing interventions in the economy are raising risks, observers say. However, the coronavirus is still the main threat and Congress seems certain to craft another big relief bill -- in spite of growing discomforts about impacts on the economy. These are debates producers should watch closely as they intensify, Washington Insider believes.
US-China Talks On Progress of Phase One Agreement Up In Air
The head of China's trade negotiating team, Vice-Premier Liu He, and U.S. Trade Representative Bob Lighthizer, are expected to hold talks in August, the South China Morning Post (SCMP) reported, echoing prior reports from other media and including remarks by Lighthizer earlier this month.
The meeting will be “an important inflection point” to allow both sides to assess the progress of the deal, a source told the SCMP.
However, if because of the prevailing tensions between Washington and Beijing, “there was less of an appetite for engagement at the moment,” the two sides might agree that a telephone conversation between Lighthizer and Liu on May 8 had satisfied the “meeting” clause of the deal, the source said.
The meeting will be “an important inflection point” to allow both sides to assess the progress of the deal, a source told the SCMP.
However, if because of the prevailing tensions between Washington and Beijing, “there was less of an appetite for engagement at the moment,” the two sides might agree that a telephone conversation between Lighthizer and Liu on May 8 had satisfied the “meeting” clause of the deal, the source said.
FY 2021 Ag Spending Approved, But Package Faces Veto Threat
The House on Friday voted 224-to-189 to approve a $259.5 billion four-bill measure consisting of the Agriculture, Interior-Environment, Military Construction-VA and State-Foreign Operations bills.
The package includes $37.5 billion in emergency spending that Republicans and the White House contend busts the budget caps deal reached last summer and contains numerous policy riders they labeled "poison pills” which were factors behind a White House veto threat, including blocking food stamp restrictions for able-bodied adults without children.
The four House bills will now go to the Senate where they are likely to sit until after the November 3 election, at the earliest.
The package includes $37.5 billion in emergency spending that Republicans and the White House contend busts the budget caps deal reached last summer and contains numerous policy riders they labeled "poison pills” which were factors behind a White House veto threat, including blocking food stamp restrictions for able-bodied adults without children.
The four House bills will now go to the Senate where they are likely to sit until after the November 3 election, at the earliest.
Tuesday Watch List
Markets
Monday's higher crop ratings for corn, soybeans and spring wheat are apt to be bearish market factors for Tuesday's trading. The latest weather forecasts remains important to grain traders with soybeans approaching pod-filling. The Federal Reserve begins a two-day meeting and at 9 a.m. CDT, an index of U.S. consumer confidence is due out. Any trade news will also be noticed.
Weather
Tuesday will be warm and dry across northern and central crop areas. Rainfall will be confined to an arc of shower and thunderstorm activity in portions of the Southern Plains and southern Midwest. Conditions will generally favor corn moving into its filling stages and soybeans in pod-setting and pod-filling stages, along with developing spring wheat.
Monday's higher crop ratings for corn, soybeans and spring wheat are apt to be bearish market factors for Tuesday's trading. The latest weather forecasts remains important to grain traders with soybeans approaching pod-filling. The Federal Reserve begins a two-day meeting and at 9 a.m. CDT, an index of U.S. consumer confidence is due out. Any trade news will also be noticed.
Weather
Tuesday will be warm and dry across northern and central crop areas. Rainfall will be confined to an arc of shower and thunderstorm activity in portions of the Southern Plains and southern Midwest. Conditions will generally favor corn moving into its filling stages and soybeans in pod-setting and pod-filling stages, along with developing spring wheat.
Monday, July 27, 2020
House Passes Ag Appropriations Bill Despite White House Opposition
On Friday, the House of Representatives passed a minibus of fiscal year 2021 appropriations bills, which included the agriculture bill. However, the Hagstrom Report says the White House is opposed to the overall bill and cited some specific provisions as the reason for its opposition. The final vote was 224-189. Seven Democrats, including House Ag Chair Collin Peterson, voted with Republicans in voting against it. Another 17 Republicans didn’t vote. The Senate hasn’t yet acted on appropriations bills. It’s not clear if the House and Senate will finish the appropriations process or pass a continuing resolution that will fund the government either until after the election or next year. In a statement of administration policy, the Office of Management and Budget says the Trump administration is concerned about provisions like those that would “stop historic welfare reforms at USDA.” OMB also says that such provisions would degrade the ability of USDA to move more families forward, provide equitable treatment across state lines, and effectively target program resources to those most in need. “The OMB statement didn’t threaten a veto of H.R. 7608, instead saying, “The administration looks forward to working with Congress to address our concerns as the Fiscal Year 2021 appropriations process moves ahead.”
China Continues to Buy More U.S. Soybeans
China is continuing to ramp up its purchases of U.S. soybeans despite the uncertainties regarding the Asian nation’s ability to fulfill its Phase One Trade Agreement commitments with the U.S. Last Thursday made it eight consecutive days that the USDA announced additional export sales of soybeans to China and other locations. The USDA says private exporters filed reports of agricultural export sales totaling 132,000 metric tons of soybeans for delivery during the 2020-2021 marketing year, which will begin on September 1. John Baize is an analyst with the U.S. Soybean Export Council. He says as Chinese buyers rush to fill deliveries that crushers will need over the next few months, U.S. soybeans coming from the Pacific Northwest are $6 cheaper than Brazil’s, giving American soybeans a competitive edge. USDA also reported export sales of 211,300 metric tons of soybeans for delivery to unknown destinations during the 2020-2021 marketing year. Baize says these are likely headed to somewhere in the European Union.
USGC Tech Talk Series Expanding DDGS Sales Opportunities in Asia
The U.S. Grains Council recently held two technical webinars intended to help with expanding future export opportunities for Dried Distiller’s Grains with Solubles (DDGS) in Southeast Asia. Caleb Wurth, USGC’s Assistant Director of Southeast Asia, says, “Southeast Asia will be one of the strongest performing markets for U.S. DDGS this marketing year, despite COVID-19 challenges.” The Council calls Southeast Asia a “trader’s market” thanks to expansive geography and a mix of nationalities. The extensive technical education and trade servicing done by USGC staff members are expanding the footprint of DDGS in countries across the region. Vietnam, Indonesia, Thailand, and New Zealand all rank among the top ten buyers for the American ethanol co-product. Other markets like the Philippines and Malaysia are also showing increasing interest and purchases of U.S. DDGS, as well as other corn co-products. “Southeast Asia is now the destination for one-third of all U.S. DDGS exports,” Wurth adds. “The strong performance comes despite the challenges of movement restrictions, a lack of available containers, and new trade agreements signed between major markets and U.S. competitors.” Wurth also says the council is maintaining a high level of engagement in the region despite the constraints of COVID-19.
Florida Growers Urged to Comment on Unfair Produce Trade with Mexico
The Florida Ag Department and Commissioner Nikki Fried (Freed) are strongly encouraging producers to submit comments for the upcoming field hearings on unfair produce trade with Mexico. The Office of the U.S. Trade Representative recently announced virtual field hearings will take place on August 13 and 20. Growing Produce Dot Com says these hearings will allow the Commerce Department and the Trump Administration an opportunity to hear from Florida’s seasonal produce growers on the urgent need for federal action on unfair foreign trade. “The concerns of Florida’s farmers with the U.S.-Mexico-Canada Agreement remain the same as when NAFTA was renegotiated two years ago,” says Fried. “The deal lacks protections against unfair trade practices that devastated our state’s produce growers.” With the USTR hearings scheduled for August, Commissioner Fried says now is the time for Florida’s growers and others affected by unfair foreign trade to make their voices heard. “Our farmers are the best in the world and deserve a level playing field to compete on,” she adds. A Florida Department of Ag report shows that imported Mexican produce has caused more than $3.7 billion in losses for U.S. producers since 2000. Mexico has expanded its share of the U.S. domestic market by 217 percent in that time.
Ag Groups File Appeal on California’s Prop 12
Back in 2018, California voters passed Proposition 12, which is scheduled to go into effect on January 1 of 2022. A Protect the Harvest release says the bill increases regulations on the egg, pork, and veal producers both in the state of California as well as any out-of-state producers that want to sell products in the state. Proposition 12 was written, funded, and marketed by the Humane Society of the United States and their “Prevent Cruelty California” coalition. Right now, just one percent of pork producers comply with the housing requirements of Prop 12. When it goes into effect in 2022, a majority of the nation’s pork farmers won’t be allowed to sell their products in California. The American Farm Bureau and the National Pork Producers Council have jointly filed an appeal with the U.S. Court of Appeals for the Ninth Circuit to ask that Prop 12 be ruled invalid. The appeal says that Prop 12 is unconstitutional and seeks to allow California to regulate states outside its governance by requiring producers to abide by the state’s own regulations to do business there. Protect the Harvest says it is “extremely hopeful” that the NPPC and the Farm Bureau are successful in their appeal.
NCGA Hosted a “Virtual Fly-In” to Washington, D.C.
Even during COVID-19, the National Corn Growers Association is working to help improve the economic situation for U.S. corn farmers. Shortly after the group held its first Virtual Corn Congress, the organization also hosted a virtual fly-in to Capitol Hill on July 22-23. NCGA typically hosts a fly-in for corn growers to Washington, D.C., in conjunction with the Corn Congress that normally takes place in July. The NCGA fly-ins allow farmers to provide members of Congress and their staffs first-hand accounts of how policies from Washington impact their farms. While coronavirus restrictions prevented producers from traveling to Capitol Hill for face-to-face meetings, the virtual fly-in allowed members to still share their stories and weigh in on current policy discussions. Growers talked about a wide range of topics, such as assistance for producers impacted by COVID-19, the benefits of ethanol and a strong RFS, along with the push for a Low Carbon Octane Standard. 42 corn growers and NCGA state staff took part in 109 virtual meetings with Congressional members and their staffs.
Washington Insider: House Passes Spending Package
POLITICO is reporting this week that the House approved a $259.5 billion government spending package on Friday in the Democrats' opening bid to ward off a government shutdown -- a potentially devastating scenario while the nation is embroiled in a pandemic and the worst economic downturn since the Great Depression.
The four-bill minibus boosts budgets at the departments of State, Interior, Agriculture, Veterans Affairs and other agencies with billions of additional dollars, while imposing new restrictions on the administration “that guarantee it will never become law,” POLITICO says.
It's the first appropriations measure to move through any chamber of Congress this year but lawmakers are seen as almost certainly hurtling toward a stopgap spending bill to keep the government open beyond the end of the fiscal year on Sept. 30. Election year politics are expected to “sap political will to craft a bipartisan spending deal in the coming weeks, while Congress wrestles with another $1 trillion-plus coronavirus response package to combat creeping unemployment and spiking infections across the country.”
The four-bill minibus is the first of two Fiscal Year (FY) 2021 funding bundles that House Democrats plan to pass by the end of the month. The House will take up a seven-bill, $1.4 trillion package next week that would fund the Pentagon and the departments of Labor, Health and Human Services, Education, Homeland Security, Justice, Transportation, Energy and more.
Once both packages are passed, the House will have approved nearly all of their fiscal 2021 appropriations bills, except the measure that funds parts of the Legislative Branch. That bill didn't include a cost-of-living adjustment for lawmakers, which a number of members believe is crucial to living in DC after enduring more than a decade of pay freezes. House leaders could still decide to bring the Legislative Branch bill to the floor as a standalone measure.
The Congressional Progressive Caucus is also pushing to strip the Homeland Security spending bill from the $1.4 trillion minibus, with some members loath to fund the agencies charged with implementing the president's immigration agenda and carrying out paramilitary action in Oregon and Washington state.
But the Congressional Hispanic Caucus is backing the Homeland Security bill and top appropriators say they have no plans to yank it from the floor. CHC Chair Joaquin Castro, D-Texas, Reps. Earl Blumenauer, D-Ore., Suzanne Bonamici, D-Ore. and others have also submitted an amendment that would rein in the administration's efforts to quell protests in Oregon and Washington.
“We really can't afford not to pass this,” Rep. Lucille Roybal-Allard, D-Calif., chair of the House Homeland Security spending panel, told POLITICO on Friday. “We need to send a very clear message to DHS that this isn't business as usual. They have to be held accountable and there's going to be consequences.”
The four-bill measure passed by the House on Friday would provide $65.9 billion for the State Department, the U.S. Agency for International Development and other programs, marking an $8.5 billion increase over current funding or a nearly 15 percent hike. That includes more than $10 billion for global efforts to combat the coronavirus pandemic.
Democrats also included $12.5 billion in emergency funding to address rising veterans' health care costs. The Environmental Protection Agency and the Interior Department would receive more than $9 billion and nearly $14 billion, respectively. More than $4 billion would go to rural development programs and more than $3 billion would flow to the Food and Drug Administration.
The package also includes a number of “poison pills” aimed at the administration, including provisions that would criticize the president's “go it alone” approach to foreign aid, restore funding for the World Health Organization, block the administration's crackdown on food stamps and bar drilling in the Arctic National Wildlife Refuge.
The Senate, meanwhile, hasn't even begun its appropriations process this year. Democrats in the upper chamber want to add billions of dollars in emergency pandemic aid to annual spending bills, in addition to police reform provisions, just as House Democrats did. But Senate Appropriations Chair Richard Shelby, R-Ala., has said those issues should be dealt with separately.
The first House minibus comes after Congress secured a two-year budget deal last summer which boosted spending and allotted a total of $740.5 billion in defense funding and $634.5 billion in nondefense funding for fiscal 2021.
So, we will see. At this point in this year, nearly every decision is political and many are toxically so — and, none more than the spending bills. Certainly, these fights should be watched closely by producers as they proceed, Washington Insider believes.
The four-bill minibus boosts budgets at the departments of State, Interior, Agriculture, Veterans Affairs and other agencies with billions of additional dollars, while imposing new restrictions on the administration “that guarantee it will never become law,” POLITICO says.
It's the first appropriations measure to move through any chamber of Congress this year but lawmakers are seen as almost certainly hurtling toward a stopgap spending bill to keep the government open beyond the end of the fiscal year on Sept. 30. Election year politics are expected to “sap political will to craft a bipartisan spending deal in the coming weeks, while Congress wrestles with another $1 trillion-plus coronavirus response package to combat creeping unemployment and spiking infections across the country.”
The four-bill minibus is the first of two Fiscal Year (FY) 2021 funding bundles that House Democrats plan to pass by the end of the month. The House will take up a seven-bill, $1.4 trillion package next week that would fund the Pentagon and the departments of Labor, Health and Human Services, Education, Homeland Security, Justice, Transportation, Energy and more.
Once both packages are passed, the House will have approved nearly all of their fiscal 2021 appropriations bills, except the measure that funds parts of the Legislative Branch. That bill didn't include a cost-of-living adjustment for lawmakers, which a number of members believe is crucial to living in DC after enduring more than a decade of pay freezes. House leaders could still decide to bring the Legislative Branch bill to the floor as a standalone measure.
The Congressional Progressive Caucus is also pushing to strip the Homeland Security spending bill from the $1.4 trillion minibus, with some members loath to fund the agencies charged with implementing the president's immigration agenda and carrying out paramilitary action in Oregon and Washington state.
But the Congressional Hispanic Caucus is backing the Homeland Security bill and top appropriators say they have no plans to yank it from the floor. CHC Chair Joaquin Castro, D-Texas, Reps. Earl Blumenauer, D-Ore., Suzanne Bonamici, D-Ore. and others have also submitted an amendment that would rein in the administration's efforts to quell protests in Oregon and Washington.
“We really can't afford not to pass this,” Rep. Lucille Roybal-Allard, D-Calif., chair of the House Homeland Security spending panel, told POLITICO on Friday. “We need to send a very clear message to DHS that this isn't business as usual. They have to be held accountable and there's going to be consequences.”
The four-bill measure passed by the House on Friday would provide $65.9 billion for the State Department, the U.S. Agency for International Development and other programs, marking an $8.5 billion increase over current funding or a nearly 15 percent hike. That includes more than $10 billion for global efforts to combat the coronavirus pandemic.
Democrats also included $12.5 billion in emergency funding to address rising veterans' health care costs. The Environmental Protection Agency and the Interior Department would receive more than $9 billion and nearly $14 billion, respectively. More than $4 billion would go to rural development programs and more than $3 billion would flow to the Food and Drug Administration.
The package also includes a number of “poison pills” aimed at the administration, including provisions that would criticize the president's “go it alone” approach to foreign aid, restore funding for the World Health Organization, block the administration's crackdown on food stamps and bar drilling in the Arctic National Wildlife Refuge.
The Senate, meanwhile, hasn't even begun its appropriations process this year. Democrats in the upper chamber want to add billions of dollars in emergency pandemic aid to annual spending bills, in addition to police reform provisions, just as House Democrats did. But Senate Appropriations Chair Richard Shelby, R-Ala., has said those issues should be dealt with separately.
The first House minibus comes after Congress secured a two-year budget deal last summer which boosted spending and allotted a total of $740.5 billion in defense funding and $634.5 billion in nondefense funding for fiscal 2021.
So, we will see. At this point in this year, nearly every decision is political and many are toxically so — and, none more than the spending bills. Certainly, these fights should be watched closely by producers as they proceed, Washington Insider believes.
Trump Warns China Trade Deal Means Less to Him Now
President Donald Trump Thursday remarked during a briefing on the COVID-19 situation that the U.S.-China Phase One trade deal “means less to me now than it did when I made it. It just means much less to me, can you understand that?”
Earlier this week, Trump had touted the recent corn sales to China as a notable development. This does not necessarily mark a shift with Trump who has stepped up his negative comments on China in recent weeks.
And, China has continued to purchase U.S. ag goods with announcements of daily sales taking place and additional purchases confirmed in the Weekly Export Sales report.
The harsh rhetoric from both sides in their diplomatic disputes has not yet led to China halting its purchases or pulling out of the Phase One agreement.
Earlier this week, Trump had touted the recent corn sales to China as a notable development. This does not necessarily mark a shift with Trump who has stepped up his negative comments on China in recent weeks.
And, China has continued to purchase U.S. ag goods with announcements of daily sales taking place and additional purchases confirmed in the Weekly Export Sales report.
The harsh rhetoric from both sides in their diplomatic disputes has not yet led to China halting its purchases or pulling out of the Phase One agreement.
Airbus Removes Subsidies Found In Violation By WTO In Bid To End US Sanctions
Airbus announced it reached agreement with the French and Spanish governments to amend repayable launch aid arrangements deemed by the WTO to be an unfair subsidy relative to the Airbus A350 airplane.
The launch aid arrangement was a loan linked to exports that helped Airbus develop new models with low interest rates on the loan.
“After 16 years of litigation at the World Trade Organization, this is the final step to stop the longstanding dispute and removes any justification for U.S. tariffs,” Airbus said in a statement. “The tariffs imposed by the United States Trade Representative (USTR) are currently harming all targeted industry sectors, including U.S. airlines, and are adding to a very difficult environment as a consequence of the COVID-19 crisis.”
There are a number of ag products already hit by tariffs and more that the U.S. is considering hitting with heavier tariffs in the dispute, setting a deadline of August for comments on the plan.
“With this final move, Airbus considers itself in complete compliance with all WTO rulings,” Airbus said. A loan from the UK, also part of the dispute, has already been repaid, and the aid extended to Airbus by Germany has already been amended.
There has been no reaction yet from the U.S. side.
The launch aid arrangement was a loan linked to exports that helped Airbus develop new models with low interest rates on the loan.
“After 16 years of litigation at the World Trade Organization, this is the final step to stop the longstanding dispute and removes any justification for U.S. tariffs,” Airbus said in a statement. “The tariffs imposed by the United States Trade Representative (USTR) are currently harming all targeted industry sectors, including U.S. airlines, and are adding to a very difficult environment as a consequence of the COVID-19 crisis.”
There are a number of ag products already hit by tariffs and more that the U.S. is considering hitting with heavier tariffs in the dispute, setting a deadline of August for comments on the plan.
“With this final move, Airbus considers itself in complete compliance with all WTO rulings,” Airbus said. A loan from the UK, also part of the dispute, has already been repaid, and the aid extended to Airbus by Germany has already been amended.
There has been no reaction yet from the U.S. side.
Monday Ag Weather Brief
Markets
Heading into the final week of July, grain traders will keep an eye on the latest weather forecasts and any trade news that develops. A report on U.S. durable goods orders in June is due out at 7:30 a.m. CDT, followed by weekly grain export inspections at 10 a.m. Traders will compare weather notes with the latest crop ratings from USDA's Crop Progress report, set for 3 p.m. CDT.
Weather
Showers and thunderstorms are in store Monday for large portions of the Southern Plains through eastern Midwest. Amounts will be light to moderate; however, locally heavy activity brings on some flash flood threat as well. This rain adds to precipitation that occurred during the past weekend in the northern and western Midwest to bring on largely favorable crop moisture conditions for late July. Showers are also in store for the Delta and Gulf Coast. Temperatures will be seasonal north and central and very warm to hot south, beneficial for filling corn and pod-setting soybeans.
Heading into the final week of July, grain traders will keep an eye on the latest weather forecasts and any trade news that develops. A report on U.S. durable goods orders in June is due out at 7:30 a.m. CDT, followed by weekly grain export inspections at 10 a.m. Traders will compare weather notes with the latest crop ratings from USDA's Crop Progress report, set for 3 p.m. CDT.
Weather
Showers and thunderstorms are in store Monday for large portions of the Southern Plains through eastern Midwest. Amounts will be light to moderate; however, locally heavy activity brings on some flash flood threat as well. This rain adds to precipitation that occurred during the past weekend in the northern and western Midwest to bring on largely favorable crop moisture conditions for late July. Showers are also in store for the Delta and Gulf Coast. Temperatures will be seasonal north and central and very warm to hot south, beneficial for filling corn and pod-setting soybeans.
Friday, July 24, 2020
Senate and House Coronavirus Aid Packages Similar in Amounts
Senator John Hoeven of North Dakota told the Hagstrom Report this week that he thinks the Senate coronavirus aid package will be similar to the House HEROES Act. The two packages will contain similar amounts of money for agricultural assistance, but Hoeven says that the nutritional provisions will likely be up to Senate leadership. Hoeven is chair of the Senate Agriculture Appropriations Subcommittee. He says USDA will start with the $14 billion that was previously allocated to the Commodity Credit Corporation but notes that Congress will push that number higher so that USDA will have as much as $35 billion in additional assistance for farmers. Hoeven thinks the HEROES Act has roughly $68 billion set aside for agriculture and nutrition and that $33 billion of that is for aid to farmers and ranchers. USDA won’t be able to use the $14 billion in CCC money until July first. However, they can now use that money to pay out the rest of the $16.5 billion promised to farmers and ranchers under the Coronavirus Food Assistance Program. The Senate bill gives the USDA the ability to make payments to ethanol plants and aid to livestock producers who had to dispose of animals they couldn’t get slaughtered.
Ranchers Call House Legislation a “Reckless Land Grab”
The National Cattlemen’s Beef Association called Wednesday a “sad day for public lands and the American taxpayer.” Kaitlynn Glover, the Executive Director of Natural Resources for NCBA and the Public Lands Council Executive Director. She says House passage of the Great American Outdoors Act shows representatives “have chosen to willingly relinquish their responsibility to engage in important land conservation decisions far into the future.” The NCBA says the bill will allow for virtually unrestricted spending for lands and waters across the U.S. that will be added to a federal estate that is already in disrepair. “The 310 members of the House that supported the bill sentenced these lands to a bleak future, complete with the expectation that these lands will be added to the deferred maintenance backlog in a not-so-distant future,” says Glover. “The ranching community is asking President Trump to veto this reckless excuse for a land management bill.” The GAO Act gives government agencies free rein to spend a minimum of $360 million every year in Land and Water Conservation Fund money to acquire new private land without any oversight from Congress. The Senate passed the GAO Act in June of 2020.
More Reaction to USDA Beef Investigation Report
The USDA released a report on its investigation into price upheaval within the U.S. beef industry, specifically as it relates to a fire in Holcomb, Kansas, as well as disruptions caused by COVID-19. Brooke Miller, President of the U.S. Cattlemen’s Association, says, “The top-line considerations detailed in this report provide a roadmap for returning transparency and true price discovery in the cattle marketplace. USCA is advocating for making these changes through a reauthorization of Livestock Mandatory Reporting, which is set to expire on September 30.” Miller also says his group co-authored a letter to Senate Ag Chair Pat Roberts and asked for a hearing on the state of the U.S. cattle industry. The letter was “met with silence,” something he calls unacceptable. The National Farmers Union says price-fixing in the meat industry is nothing new. While they welcome the USDA report, the group says it must be accompanied by real reforms. “Radical and immediate action is needed to create a fair and balanced food system,” says NFU President Rob Larew. “We’re asking USDA and other federal agencies to strengthen protections for farmers, enforce existing regulations, and prevent undue market power in the future.” Larew says the agency must continue to conduct a thorough investigation, saying the NFU “intends to hold them to account.”
The Fertilizer Institute Applauds Extension of Chemical Facility Safety Measures
The Fertilizer Institute is happy that President Trump and Congress extended the Chemical Facility Anti-Terrorism Standards (CFATS) for three years. “A long-term extension of the CFATS program is what the fertilizer industry supported and wanted to see,” says TFI President Corey Rosenbusch. “This provides the industry with the ability to properly plan and invest in measures that promote security at our facilities.” The secure and safe handling of fertilizers is the highest priority for the Fertilizer Institute and its members. “The numbers speak for themselves,” Rosenbusch says. “The fertilizer industry is twice as safe as our chemical industry peers. We actively participate in and sponsor numerous safety initiatives.” He says voluntary, industry-driven programs like the ResponsibleAg Program help to enhance compliance by the agricultural retailers with a variety of federal regulations, including those administered by the Department of Homeland Security. “Fertilizers are necessary to grow the crops that feed the world,” Rosenbusch adds. “Half of all food grown in the world today is made possible through the use of fertilizer. We’re committed to ensuring the world has the food, fuel, and fiber it needs, and that fertilizer facilities are secure.”
U.S. Wheat Associates Select New Officer Team
The U.S. Wheat Associates Board of Directors chose new officers during their virtual annual meeting on July 17. The new officers for 2020-2021 are Chairman Darren Padget of Oregon, Vice-Chair Rhonda Larson of Minnesota, Secretary-Treasurer Michael Peters of Oklahoma, and Past Chairman Doug Goyings of Ohio. USW officers were elected to those one-year positions during the board of directors’ meeting last January. The USW is the export market development organization representing U.S. wheat farmers. “We are all very disappointed that we couldn’t hold our meeting in Ohio as originally planned,” says Chairman Padget. “We had wanted to publicly thank Chairman Goyings, his family, and the team from the Ohio Small Grains Marketing Board for their dedicated leadership over this past year.” Padget added that Goyings did a wonderful job as chair and that he “hopes to meet his example with his help.” The new USW Chair is a fourth-generation farmer from Oregon, with dryland wheat and a summer fallow rotation currently producing registered and certified seed on 3,400 acres every year. He previously held positions on the Oregon Wheat Growers League board of directors and the executive committee for seven years.
Lamb Board Launches a “Glamburger” Contest
The American Lamb Board launched its newest online promotion contest earlier this month, looking to keep up the momentum of getting more consumers to try lamb. They call it the “Glamburger.” The board says it’s a burger that features ground lamb that is “glamorous, fancy, extravagant, and whatever else makes it special for your meal with your friends and family.” This year, the Glamburger contest is expanding to include both at-home and restaurant components. The challenge is encouraging consumers to try out a delicious lamb burger during the summer months. The American Lamb Board is promoting burger recipes, sharing videos of how to craft a delicious lamb burger, and offering a free spice blend for consumers who want to spice up their Glamburger creation at home. South Dakota producer Gwen Kitzan, the ALB Chair, says, “Since kicking off the promotion, we’ve seen many entries and great engagement, with people commenting on their favorite lamb burgers from their local restaurants and their own home-cooked ideas.” The board also launched Project Glamburger, which connects restaurants in target markets with local producers who’ve accepted the challenge to craft a burger that could be featured on their menus. Target markets so far include Denver, Washington, D.C., and San Francisco.
Washington Insider: Bipartisan Conservation Legislation Passes
Amid tough legislative struggles over virus relief, trade and numerous other issues, the House on Wednesday overwhelmingly passed bipartisan conservation legislation, Bloomberg is reporting this week. The report says that many in Congress and the administration hope the new programs will boost the ailing economy through several shovel-ready outdoor and infrastructure projects.
The Great American Outdoors Act would provide full, mandatory funding at $900 million a year for the Land and Water Conservation Fund (LWCF) — making that program “no longer subject to the annual appropriations process.”
LWCF pays for federal land acquisition as well as parks, wildlife refuges, ball fields and other projects in local communities across the country. In addition, it would create a new five-year trust fund of up to $9.5 billion from unallocated onshore and offshore energy revenues to address a $20 billion deferred maintenance backlog in America's national parks and public lands.
The “deferred maintenance backlog” portion would be split among five land agencies with 70% going to the National Park Service, Bloomberg said.
“Combined, these two major programs amount to one of the biggest wins in conservation in decades,” House Natural Resources Committee Chairman Raul Grijalva, D-Ariz., said.
President Donald Trump said he will sign the bill, which the Senate passed in June.
Previous Trump administration budget proposals recommended gutting LWCF, but two of the program's Republican advocates in the Senate — Cory Gardner of Colorado, and Steve Daines of Montana, face tough re-election campaigns this year, Bloomberg noted,
The fund was permanently reauthorized in 2019, but only has received full funding twice since it was created in 1965.
Democratic and Republican lawmakers value the program because it supports projects in every congressional district and public lands and outdoor recreation have grown in popularity during the coronavirus pandemic. Many outside groups, from sportsmen to small businesses to environmental organizations, strongly support the bill.
Reps. Joe Cunningham, D-S.C., and Mike Simpson, R-Idaho, the lead sponsors of the House bill, said that the legislation would create approximately 100,000 jobs at a time when the country desperately needs them.
The bill “takes the next step in our pro-conservation agenda,” said House Speaker Nancy Pelosi, D-Calif., who singled out Cunningham, a freshman and former ocean engineer, for praise. Cunningham also faces a tough re-election campaign.
Rep. Nanette Barragan, D-Calif., noted that LWCF is critical to providing access to green spaces and nature in urban areas traditionally cut off from the benefits of outdoor recreation—a point that League of Conservation Voters President Gene Karpinski reiterated.
“This victory is a testament to the power of grassroots activists and the enduring popularity of conservation,” Karpinski said in a statement. “But as a recent report from the Center for American Progress and Hispanic Access Foundation shows, there is more work to be done to ensure every community — especially low income and communities of color — has access to public lands, local parks and other outdoor opportunities.”
In addition, Rep. Rob Bishop, R-Utah, objected to making LWCF funding mandatory, especially at a time when oil and gas revenues are falling sharply because of the pandemic, according to the Congressional Research Service.
LWCF relies on offshore energy revenue. That revenue also funds the Gulf of Mexico Energy Security Act, including the revenue-sharing arrangement between the federal government and the Gulf Coast states that produce most of that energy.
After dwindling offshore revenues are divvied up among programs that are mandatory, which would include LWCF under the legislation, there's not likely to be much if any left over for deferred maintenance, Bishop said.
Bishop, the top Republican on Natural Resources, is the lead sponsor of the “Restore Our Parks and Public Lands Act,” the deferred maintenance backlog bill in the House that was combined with the LWCF funding measure. While he opposes mandatory funding for LWCF, he supported the permanent authorization of the program that Congress approved in the 2019 public lands package.
Not all outside groups were happy with the legislation, Bloomberg emphasizes. “Our national parks are indeed a treasure, but they shouldn't be used as trade bait by Democrats and Republicans who seek to take even more land out of private ownership,” Tom Pyle, president of the American Energy Alliance, said.
The federal government manages about 640 million acres of land, most of it in Western states.
“As this bipartisan legislation moves forward, it's important for lawmakers on both sides of the aisle to remember that, even during these challenging times, our nation's conservation efforts are made possible by American oil and natural gas,” said Lem Smith, vice president of upstream policy at the American Petroleum Institute.
Members from Gulf Coast states like Louisiana—which produces the lion's share of offshore energy revenues — also criticized the legislation's mandatory funding component. They argued that it will siphon away funds that their states receive, which they use for coastal restoration.
So, we will see. The new bill appears strongly supported and likely to be signed into law — an unusual bipartisan effort that indicates that the possibility of greater cooperation still exists, at least in a few areas, Washington Insider believes.
The Great American Outdoors Act would provide full, mandatory funding at $900 million a year for the Land and Water Conservation Fund (LWCF) — making that program “no longer subject to the annual appropriations process.”
LWCF pays for federal land acquisition as well as parks, wildlife refuges, ball fields and other projects in local communities across the country. In addition, it would create a new five-year trust fund of up to $9.5 billion from unallocated onshore and offshore energy revenues to address a $20 billion deferred maintenance backlog in America's national parks and public lands.
The “deferred maintenance backlog” portion would be split among five land agencies with 70% going to the National Park Service, Bloomberg said.
“Combined, these two major programs amount to one of the biggest wins in conservation in decades,” House Natural Resources Committee Chairman Raul Grijalva, D-Ariz., said.
President Donald Trump said he will sign the bill, which the Senate passed in June.
Previous Trump administration budget proposals recommended gutting LWCF, but two of the program's Republican advocates in the Senate — Cory Gardner of Colorado, and Steve Daines of Montana, face tough re-election campaigns this year, Bloomberg noted,
The fund was permanently reauthorized in 2019, but only has received full funding twice since it was created in 1965.
Democratic and Republican lawmakers value the program because it supports projects in every congressional district and public lands and outdoor recreation have grown in popularity during the coronavirus pandemic. Many outside groups, from sportsmen to small businesses to environmental organizations, strongly support the bill.
Reps. Joe Cunningham, D-S.C., and Mike Simpson, R-Idaho, the lead sponsors of the House bill, said that the legislation would create approximately 100,000 jobs at a time when the country desperately needs them.
The bill “takes the next step in our pro-conservation agenda,” said House Speaker Nancy Pelosi, D-Calif., who singled out Cunningham, a freshman and former ocean engineer, for praise. Cunningham also faces a tough re-election campaign.
Rep. Nanette Barragan, D-Calif., noted that LWCF is critical to providing access to green spaces and nature in urban areas traditionally cut off from the benefits of outdoor recreation—a point that League of Conservation Voters President Gene Karpinski reiterated.
“This victory is a testament to the power of grassroots activists and the enduring popularity of conservation,” Karpinski said in a statement. “But as a recent report from the Center for American Progress and Hispanic Access Foundation shows, there is more work to be done to ensure every community — especially low income and communities of color — has access to public lands, local parks and other outdoor opportunities.”
In addition, Rep. Rob Bishop, R-Utah, objected to making LWCF funding mandatory, especially at a time when oil and gas revenues are falling sharply because of the pandemic, according to the Congressional Research Service.
LWCF relies on offshore energy revenue. That revenue also funds the Gulf of Mexico Energy Security Act, including the revenue-sharing arrangement between the federal government and the Gulf Coast states that produce most of that energy.
After dwindling offshore revenues are divvied up among programs that are mandatory, which would include LWCF under the legislation, there's not likely to be much if any left over for deferred maintenance, Bishop said.
Bishop, the top Republican on Natural Resources, is the lead sponsor of the “Restore Our Parks and Public Lands Act,” the deferred maintenance backlog bill in the House that was combined with the LWCF funding measure. While he opposes mandatory funding for LWCF, he supported the permanent authorization of the program that Congress approved in the 2019 public lands package.
Not all outside groups were happy with the legislation, Bloomberg emphasizes. “Our national parks are indeed a treasure, but they shouldn't be used as trade bait by Democrats and Republicans who seek to take even more land out of private ownership,” Tom Pyle, president of the American Energy Alliance, said.
The federal government manages about 640 million acres of land, most of it in Western states.
“As this bipartisan legislation moves forward, it's important for lawmakers on both sides of the aisle to remember that, even during these challenging times, our nation's conservation efforts are made possible by American oil and natural gas,” said Lem Smith, vice president of upstream policy at the American Petroleum Institute.
Members from Gulf Coast states like Louisiana—which produces the lion's share of offshore energy revenues — also criticized the legislation's mandatory funding component. They argued that it will siphon away funds that their states receive, which they use for coastal restoration.
So, we will see. The new bill appears strongly supported and likely to be signed into law — an unusual bipartisan effort that indicates that the possibility of greater cooperation still exists, at least in a few areas, Washington Insider believes.
China's Buys Of US Ag Products Continue To Stack Up
For the week ended July 16, USDA's Weekly Export Sales reported more sales of US ag commodities to China. They included for 2019/20, net sales of 7,079 metric tons of corn, 78,645 metric tons of sorghum, 209,872 metric tons of soybeans, but net reductions of 4,401 running bales of upland cotton.
For 2020, net sales of 479 metric tons of pork and 7,159 metric tons of beef were reported.
For 2020/21, net sales of 127,090 metric tons of wheat, 1.960 million metric tons of corn (mostly known via daily sales announcements last week), 175,000 mt of sorghum, 1.486 mmt of soybeans, and 2,640 running bales of upland cotton.
Much of the corn and soybean business for China for the 2020/21 marketing year were known after USDA made daily sales announcements for China last week, including the largest daily sale of corn to China which was the fourth largest daily sale ever made to any destination.
For 2020, net sales of 479 metric tons of pork and 7,159 metric tons of beef were reported.
For 2020/21, net sales of 127,090 metric tons of wheat, 1.960 million metric tons of corn (mostly known via daily sales announcements last week), 175,000 mt of sorghum, 1.486 mmt of soybeans, and 2,640 running bales of upland cotton.
Much of the corn and soybean business for China for the 2020/21 marketing year were known after USDA made daily sales announcements for China last week, including the largest daily sale of corn to China which was the fourth largest daily sale ever made to any destination.
USDA Issues Report On Cattle Market, But Signals Investigation Continues
USDA issued its report on the cattle and beef market fluctuations in the wake of the fire at the cattle processing plant in Holcomb, Kansas, in August 2019 and the disruptions from the COVID-19 situation.
The report lays out what contributed to the record spread between boxed beef and cash cattle prices, but stated the recap “does not examine potential violations of the Packers and Stockyards Act. The investigation into potential violations is ongoing, and therefore, AMS has limited ability to publicly report the full scope and status of the investigation.”
The report also stated the exam does “not preclude the possibility that individual entities or groups of entities violated the Packers and Stockyards Act during the aftermath of the Tyson Holcomb fire and the COVID-19 pandemic.” There is also the mention in the report that USDA has “engaged in discussions with the Department of Justice (DOJ) regarding allegations of anticompetitive practices in the meat packing industry. The investigation into potential violations under the Packers and Stockyards Act is continuing.”
The report does list several options USDA believes would help the price discovery process in the cattle market, including reducing the level of non-reporting under Livestock Mandatory Reporting, better access to risk management training/education for small and medium-sized cattle producers, and changes to the Packers and Stockyards Act.
But USDA did not explicitly back any specific efforts. It is clear that this report will not be the final word relative to the cattle market disruptions that have emerged.
The report lays out what contributed to the record spread between boxed beef and cash cattle prices, but stated the recap “does not examine potential violations of the Packers and Stockyards Act. The investigation into potential violations is ongoing, and therefore, AMS has limited ability to publicly report the full scope and status of the investigation.”
The report also stated the exam does “not preclude the possibility that individual entities or groups of entities violated the Packers and Stockyards Act during the aftermath of the Tyson Holcomb fire and the COVID-19 pandemic.” There is also the mention in the report that USDA has “engaged in discussions with the Department of Justice (DOJ) regarding allegations of anticompetitive practices in the meat packing industry. The investigation into potential violations under the Packers and Stockyards Act is continuing.”
The report does list several options USDA believes would help the price discovery process in the cattle market, including reducing the level of non-reporting under Livestock Mandatory Reporting, better access to risk management training/education for small and medium-sized cattle producers, and changes to the Packers and Stockyards Act.
But USDA did not explicitly back any specific efforts. It is clear that this report will not be the final word relative to the cattle market disruptions that have emerged.
Friday Watch List
Markets
The latest weather forecasts continue to be the first interest for grain traders. A report on June's new U.S. home sales is out at 9 a.m. CDT. USDA releases its July 1 estimate of cattle on-feed and semi-annual cattle inventory report, both at 2 p.m. CDT.
Weather
Friday will bring stressful heat to the Northern Plains and western Midwest. Some strong and possibly severe thunderstorms may form on the edge of the heat wave in the Northern Plain. Storms are also possible along the Gulf Coast due to influence from tropical storm Hanna.
The latest weather forecasts continue to be the first interest for grain traders. A report on June's new U.S. home sales is out at 9 a.m. CDT. USDA releases its July 1 estimate of cattle on-feed and semi-annual cattle inventory report, both at 2 p.m. CDT.
Weather
Friday will bring stressful heat to the Northern Plains and western Midwest. Some strong and possibly severe thunderstorms may form on the edge of the heat wave in the Northern Plain. Storms are also possible along the Gulf Coast due to influence from tropical storm Hanna.
Thursday, July 23, 2020
Senate Seeks $20 Billion for Commodity Credit Corporation
Senate negotiations continue on the next coronavirus relief package. While those close to the talks suggest there will not be a bill ready until sometime next month, there is promise for additional relief to agriculture. Senator Joni Ernst, an Iowa Republican who sits on the Senate Agriculture Committee, told Agri-Pulse this week the package will likely include an additional $20 billion in Commodity Credit Corporation funding. That $20 billion would be in addition to the $14 billion already authorized in a previous relief package not yet used by the Department of Agriculture. Meanwhile, in a video addressing the National Association of Farm Broadcasting this week, Agriculture Secretary Sonny Perdue hinted at further aid through the Coronavirus Food Assistance Program. Perdue says USDA is considering adding more commodities to the program and is evaluating what farmers need from future relief. Farm groups continue to plead for additional aid for farmers, including the National Pork Producers Council, which estimates hog farmers face a $5 billion loss from pandemic market implications.
USDA Provides Cattle Market Investigation Update
The Department of Agriculture Wednesday released a report on its ongoing boxed beef and fed cattle price spread investigation. Agriculture Secretary Sonny Perdue says the closure of the Tyson beef packing plant following a fire at the facility in Holcomb, Kansas, and the COVID-19 pandemic, “clearly disrupted the markets and processing systems responsible for the production and sale of U.S. beef.” The report also discusses several policy considerations in light of the desire by many market participants for improved price discovery, reinvigorated competition, and a more transparent relationship between the prices for live cattle and the resulting products. The report does not examine potential violations of the Packers and Stockyards Act. However, USDA staff have maintained a cooperative relationship with the Department of Justice Antitrust Division staff and have discussed allegations of anticompetitive practices in the meatpacking industry. Should USDA find a violation of the Packers and Stockyards Act, it is authorized to report the violation to DOJ for prosecution.
Agriculture Responds to Cattle Market Investigation Update
The National Cattlemen’s Beef Association welcomed the investigation update by the Department of Agriculture into cattle markets. NCBA Vice President of Government Affairs, Ethan Lane, says, “this issue has remained a central topic of conversation for NCBA.” The report comes days before NCBA will hold its annual summer meeting. Lane says the association still awaits the results of the Department of Justice’s ongoing investigation into the matter as well. Iowa Republican Senator Chuck Grassley applauded the report, saying, “The cattle market industry is broken.” Grassley says, “Congress has a responsibility to heed the advice of this report and take action to restore cattle price transparency.” The North American Meat Institute, however, notes the report identifies no wrong-doing, and affirms that two extreme and unforeseen events affected beef markets. NAMI President and CEO Julie Anna Potts stated, “It is difficult to see how the USDA’s recommended legislative proposals would have changed the outcome of the fire or the pandemic.”
Ernst Bill Provides Tax Break for Essential Workers
Legislation introduced the week by Republican Senator Joni Ernst of Iowa would provide tax relief to essential, front line workers. Under Ernst’s FRNT LINE Act, federal income taxes would be suspended for essential workers up to an annual income cap set at the highest level of pay for an enlisted person in the U.S. Armed Forces. Additionally, the bill would provide suspension of federal payroll taxes for essential workers who earn up to $50,000 annually. Under this proposal, tax suspensions will begin on April 1, 2020, and will end on the date the federal emergency declaration is lifted. Senator Ernst says, “These front line workers—our nurses, truck drivers, and grocery store workers, child care providers, and so many others—have kept life going and our supply chains intact.” Several industry groups representing the food supply chain penned a letter in support of the legislation. The Department of Homeland Security considers essential workers as healthcare providers, law enforcement, food and agriculture workers, public works, transportation and communication workers, among others.
Farm Progress Launches Virtual Show
Two major farm shows are off the calendar for 2020, and to fill the gap, Farm Progress is launching the first-ever Farm Progress Virtual Experience, or FPVX. The event will be powered by Farm Progress Show and Husker Harvest Days and run three days, September 15 to 17. The information available in the free event allows farmers to engage with a range of content. And, searching the exhibitors will be easy because they'll be sorted into the familiar categories farmers have come to know through more than 65 years of taking part in Farm Progress events. The event will kick off with what Farm Progress says may be the most extensive field demonstration the organization has ever created. Matt Jungmann (yung-man) of Farm Progress adds, “We're not asking farmers to just sit by their computers.” All the content will work on smartphones and tablets so that farmers can access the content while mobile. More information will be available as the show date nears.
Farm Bureau Foundation Makes Ag Education More Accessible
New resources and $17,000 in grants from the American Farm Bureau Foundation for Agriculture provide educators and parents with tools for all types of classrooms. Parents and teachers can use the online resources for in-person, virtual, or at-home learning. Also, announced Wednesday, the foundation is awarding 17,000 to educators and communities through the White-Reinhardt Fund for Education program this fall. Ten classroom and community ag literacy projects across the country will receive $1,000 each to build on their efforts. New this year, the foundation is also awarding resource grants to provide funds for educators to purchase ag literacy resources from the Ag Foundation store. Seventy educators from across the country will each receive a $100 gift card for use at the Ag Foundation’s online store. Foundation Executive Director Daniel Meloy says, “The Ag Foundation is committed to reaching students where they are to help them continue to learn where their food comes from, in the most engaging ways possible.” Find the resources at agfoundation.org.
Washington Insider: New School Nutrition Fight
There are political fights over almost everything these days as the Congress and the administration work to iron out another round of subsidies to offset impacts of the coronavirus -- amid the more or less normal budget battles.
In one such fight, POLITICO is reporting that “millions of kids could lose access to free meals” if recent practices are ended -- and that efforts are underway to counter that proposed USDA shift.
During the spring and summer, as the coronavirus health crisis exploded, the government allowed most families to pick up free meals from whichever school was closest or most convenient without proving they were low-income. But that effort is on the verge of expiring as children prepare to return to school – and many school systems are pushing the federal government to continue the free meals into the future.
So far, USDA isn't on board with an extension, POLITICO says, but school leaders are asking Congress “to force the government's hand as it buckles down to work on the next coronavirus aid package.”
“It's impossible. It's insane,” said Katie Wilson, executive director of the Urban School Food Alliance, which represents the largest school districts in the country, including those in New York, Chicago and Dallas. “Our districts have been screaming about it. They're panicked.”
If USDA doesn't extend the program's flexibility through the fall, families may be able to get food for their children only from the school where they are enrolled, after being deemed eligible for help -- a change that could create logistical barriers for many families, particularly those without cars or with parents working multiple jobs.
USDA says it is working with lawmakers as they develop the next coronavirus relief package. “This is [uncharted] territory, but we remain committed to ensure all children have food to eat throughout this pandemic,” the spokesperson said.
The department has already extended several waivers that make it easier to feed kids this school year, including loosening rules on nutrition and restrictions on who can pick up the meals -- but have “drawn a line” at requests to continue waiving eligibility rules.
Federal school nutrition programs often have been political targets, with disparate interests disagreeing about everything from fruit and vegetable servings to how much salt can be in pizza. But free meals have found broad backing, at least during the recent pandemic.
“This is still an emergency and we need to treat it that way,” said Diane Pratt-Heavner, a spokesperson for the School Nutrition Association, a group representing more than 50,000 local leaders who run school meal programs across the country.
The group has activated its vast network of local school officials to send nearly 20,000 emails to lawmakers asking them to pressure USDA to approve the remaining waivers for the rest of the school year. A spending bill on the House side includes language urging USDA to act. There's also a letter circulating in the Senate pressing the issue.
Most school cafeteria programs already face much higher food, labor, transportation and packaging costs, as they have been essentially operating emergency meals programs for months. Nutrition providers had to come up with creative ways to still feed their students with schools shut down. Most districts are now operating some form of meal pickups, and some are even dropping meals off at students' homes on a regular basis.
It's unclear how many students who have been getting help under the waived eligibility rules might get cut off if traditional rules go back into effect. “We're going to be going from a situation where we were just providing meals to all kids, no questions asked … to having to track by student name and status, so that you can charge families if they don't qualify by submitting a free and reduced meal application,” said Rosie Krueger, Vermont's director of child nutrition programs.
In 2018, the National School Lunch Program, which serves a mix of free, subsidized and paid meals to nearly 30 million children, cost just under $14 billion. An estimated 51 million children are projected to enroll in public elementary and high schools this fall.
Some high-poverty school districts already serve universal free meals under what's called the Community Eligibility Provision, something that's available to schools if a certain percentage of their students already qualify for help. About 30 percent of schoolchildren were in schools with universal free meals in the 2019 school year.
Jessica Shelly, director of student dining services for Cincinnati Public Schools, said she wants to see USDA aggressively press for free meals this year.
She recalled meeting USDA Secretary Sonny Perdue at a school nutrition conference years ago. “I remember him saying to all of us, to do right and feed everyone,” she said. “I am just really hoping that USDA recognizes that the motto needs to be embraced not just by us … but also by them. If they want us to do right and feed everyone, then they need to help us do that.”
So, we will see. These nutrition programs are important to many participants, and will be badly missed if they are not continued – but, they are expensive and highly visible to opponents. Efforts to continue them likely will be highly controversial and should be watched closely by producers as they intensify, Washington Insider believes.
In one such fight, POLITICO is reporting that “millions of kids could lose access to free meals” if recent practices are ended -- and that efforts are underway to counter that proposed USDA shift.
During the spring and summer, as the coronavirus health crisis exploded, the government allowed most families to pick up free meals from whichever school was closest or most convenient without proving they were low-income. But that effort is on the verge of expiring as children prepare to return to school – and many school systems are pushing the federal government to continue the free meals into the future.
So far, USDA isn't on board with an extension, POLITICO says, but school leaders are asking Congress “to force the government's hand as it buckles down to work on the next coronavirus aid package.”
“It's impossible. It's insane,” said Katie Wilson, executive director of the Urban School Food Alliance, which represents the largest school districts in the country, including those in New York, Chicago and Dallas. “Our districts have been screaming about it. They're panicked.”
If USDA doesn't extend the program's flexibility through the fall, families may be able to get food for their children only from the school where they are enrolled, after being deemed eligible for help -- a change that could create logistical barriers for many families, particularly those without cars or with parents working multiple jobs.
USDA says it is working with lawmakers as they develop the next coronavirus relief package. “This is [uncharted] territory, but we remain committed to ensure all children have food to eat throughout this pandemic,” the spokesperson said.
The department has already extended several waivers that make it easier to feed kids this school year, including loosening rules on nutrition and restrictions on who can pick up the meals -- but have “drawn a line” at requests to continue waiving eligibility rules.
Federal school nutrition programs often have been political targets, with disparate interests disagreeing about everything from fruit and vegetable servings to how much salt can be in pizza. But free meals have found broad backing, at least during the recent pandemic.
“This is still an emergency and we need to treat it that way,” said Diane Pratt-Heavner, a spokesperson for the School Nutrition Association, a group representing more than 50,000 local leaders who run school meal programs across the country.
The group has activated its vast network of local school officials to send nearly 20,000 emails to lawmakers asking them to pressure USDA to approve the remaining waivers for the rest of the school year. A spending bill on the House side includes language urging USDA to act. There's also a letter circulating in the Senate pressing the issue.
Most school cafeteria programs already face much higher food, labor, transportation and packaging costs, as they have been essentially operating emergency meals programs for months. Nutrition providers had to come up with creative ways to still feed their students with schools shut down. Most districts are now operating some form of meal pickups, and some are even dropping meals off at students' homes on a regular basis.
It's unclear how many students who have been getting help under the waived eligibility rules might get cut off if traditional rules go back into effect. “We're going to be going from a situation where we were just providing meals to all kids, no questions asked … to having to track by student name and status, so that you can charge families if they don't qualify by submitting a free and reduced meal application,” said Rosie Krueger, Vermont's director of child nutrition programs.
In 2018, the National School Lunch Program, which serves a mix of free, subsidized and paid meals to nearly 30 million children, cost just under $14 billion. An estimated 51 million children are projected to enroll in public elementary and high schools this fall.
Some high-poverty school districts already serve universal free meals under what's called the Community Eligibility Provision, something that's available to schools if a certain percentage of their students already qualify for help. About 30 percent of schoolchildren were in schools with universal free meals in the 2019 school year.
Jessica Shelly, director of student dining services for Cincinnati Public Schools, said she wants to see USDA aggressively press for free meals this year.
She recalled meeting USDA Secretary Sonny Perdue at a school nutrition conference years ago. “I remember him saying to all of us, to do right and feed everyone,” she said. “I am just really hoping that USDA recognizes that the motto needs to be embraced not just by us … but also by them. If they want us to do right and feed everyone, then they need to help us do that.”
So, we will see. These nutrition programs are important to many participants, and will be badly missed if they are not continued – but, they are expensive and highly visible to opponents. Efforts to continue them likely will be highly controversial and should be watched closely by producers as they intensify, Washington Insider believes.
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