Agriculture Secretary Sonny Perdue announced Tuesday that more than 100 million food boxes have been distributed through the Farmers to Families Food Box Program. Perdue stated, “It is incredible to think that in a little more than five months, this food box program has gone from an idea to a reality that has provided more than 100 million boxes of nutritious foods.” Earlier this month, the Department of Agriculture announced it had entered into contracts with 50 entities for the third round of food box deliveries, including contracts to purchase up to $1 billion authorized by President Donald Trump. USDA is purchasing combination boxes in the third round of purchases to ensure all recipient organizations have access to fresh produce, dairy products, fluid milk, and meat products. Coverage in this round of the program allocates food boxes to states based on the state's internal need to provide coverage to entities in every county in the country.
Welcome
Wednesday, September 30, 2020
Study: COVID-19 Caused $8 Billion Loss for Ethanol Producers
A new study by university economists finds ethanol producers will experience roughly $8 billion in losses this year due to the pandemic's impact on world fuel markets. The study, conducted by economists from the University of Florida and Arizona State University, was published recently in the Journal of Agricultural and Food Industrial Organization. The estimated economic loss grows to a range of $7.9 to $8.6 billion when unemployment effects are included. The study acknowledges that those estimates likely "understate the cost of COVID-19" to the ethanol industry because the impact of the pandemic on co-product output, demand and prices is not included. Renewable Fuels Association President and CEO Geoff Cooper says the new study confirms the findings of an RFA analysis published in July, which found pandemic-related losses could be $7 billion or more in 2020. According to RFA, the study also underscores the importance of ensuring ethanol producers are not again left out of any stimulus package that may move forward in the weeks ahead.
CME Group to Launch Pork Cutout Futures and Options
CME Group Tuesday announced plans to launch Pork Cutout futures and options. The new contracts are designed to give the U.S. pork industry and export markets tailored risk-management tools on the cutout. Tim Andriesen, CME Group managing director of agricultural products, says, “As the market has evolved, our customers continue to look for new tools to manage the price risk associated with hog and pork production.” Pending regulatory approvals, the Pork Cutout futures and options are slated to launch on November 9, and will be cash-settled to the CME Pork Cutout Index. The contracts will complement CME Lean Hog futures and options. CME Group says hogs are increasingly bought and sold in the physical market based on a formula which uses the cutout. The Pork Cutout reflects the approximate value of a hog calculated using the prices paid for wholesale cuts of pork. The new contracts will be quoted in U.S. cents per pound and will have a contract size of 40,000 pounds.
FMI Special Midyear report Outlines Increased Grocery Purchases
FMI, the Food Industry Association, recently released a special mid-year report on meat sales in grocery stores. The report takes a fresh look at what was happening in the meat industry from the shopper’s perspective amid the coronavirus pandemic. As the pandemic hit the U.S. in March, shoppers quickly started stocking up on all types of food products. Meat department sales almost doubled in the first week of the pandemic, compared to the same week in 2019. While many were focused on filling their refrigerators and freezers with their purchases, consumers were also cooking more meals as home-prepared meals with meat specifically increased to 4.6 per week from 3.9 last year. The surge in demand and the impact of COVID-19 on meat suppliers resulted in a significant tightening of supply and some resulting meat inflation, as 91 percent of shoppers experienced out-of-stocks. However, FMI reports the meat department has persevered. Most shoppers continue to see meat as a good source of protein and nutrients, and many continue to believe meat belongs in a balanced diet.
Virtual Format Set For 2021 Beltwide Cotton Conferences
The National Cotton Council will conduct the 2021 Beltwide Cotton Conferences virtually in January due to continued concerns regarding COVID-19’s spread. Planed for January 5 -7, the conferences bring together industry stakeholders. Those planning to participate in the 2021 live-stream event must register at the event website, cotton.org/beltwide/, which will be updated as program information becomes available. Registration will continue after the virtual 2021 event concludes to permit registered participants access to the event’s on-demand content. Registration costs for the 2021 conference have been reduced due to the virtual format, $180 for NCC members, university and USDA researchers, extension personnel, associations and consultants, $500 for non-U.S. research, extension, associations, and consultants, $350 for non-NCC members, and $75 for students. The 2021 event will begin on January 5 with the half-day Cotton Consultants Conference. The 11 cotton technical conferences, which now includes the Cotton Sustainability Conference, will provide updates on research and current and emerging technology.
USDA Awards $5 Million to Support Wetland Mitigation Banking
The Department of Agriculture will award $5 million for eight new wetland mitigation banking projects through the Wetland Mitigation Banking Program. The program helps conservation partners develop or establish mitigation banks to help agricultural producers maintain eligibility for USDA programs. USDA says the wetlands will provide producers “an affordable mitigation option to remain in compliance for USDA farm bill programs while establishing banks that support wetland functions.” Wetland mitigation banks create credits through the restoration, creation, or enhancement of wetlands to compensate for impacts on wetlands at other locations. Most wetland mitigation banks, however, serve the development community and are not affordable to agricultural producers. Producers seeking benefits through most USDA programs must comply with wetland conservation provisions by affirming they will not impact wetlands on their lands. In situations where avoidance or on-site mitigation is challenging, the farm bill allows producers to mitigate their conversion activities off-site by purchasing mitigation banking credits.
Washington Insider: New Stimulus Proposal Emerges
Democratic leadership released a $2.2 trillion coronavirus response bill on Monday — but their offer would require Republicans to make concessions before a bipartisan deal is possible.
The measure is $1 trillion below the Democrats' $3.4 trillion proposal from May. It would provide $436 billion for state and local governments rather than the original $915 billion and would provide another round of $1,200 payments and $600 per week extra unemployment insurance payments through January 2021, similar to the May proposal.
The bill also would include new aid for airlines, restaurants and small businesses that were not included in the original legislation, as well as $225 billion for education and $75 billion for coronavirus testing, tracing and isolation measures.
Bloomberg reports that Speaker Nancy Pelosi, D-Calif., spoke to Treasury Secretary Steven Mnuchin on Monday about a possible bipartisan deal — and that the two plan to speak again on Tuesday, Drew Hammill, Pelosi's deputy chief of staff, said.
Republicans still need to support more spending than their previous $1 trillion proposal to reach an agreement, Pelosi said late on Monday. “When he's ready to come back to the table, we're ready to have that conversation, but he has to come back with much more money to get the job done,” Pelosi said. “So, I'm hopeful. I'm optimistic.”
The Trump administration has yet to weigh in on the proposal.
Pelosi previously said Republicans need to agree to a top-line figure of $2.2 trillion for negotiations to result in an agreement. Republicans originally proposed a $1 trillion measure, but didn't vote on it. Senate Republicans then proposed a smaller measure, which Senate Democrats blocked.
Bloomberg focused on several details in the proposal. For example, it said the bill would provide $500 stimulus payments for dependents, which is equal to what families received starting this spring, but lower than the $1,200 Democrats proposed in May. And, it would provide $20 billion for the Department of Health and Human Services Biomedical Advanced Research and Development Authority for the development and procurement of vaccines and therapeutics.
That matches what Robert Kadlec, assistant secretary for preparedness and response, told Senate appropriators HHS needs earlier this month. It also would provide the Centers for Disease Control and Prevention $7 billion for a vaccination campaign and $1 billion for “an evidence-based public awareness campaign on the importance of vaccinations,” according to a summary by the House Appropriations Committee.
The measure also includes $15 billion to make up for U.S. Postal Service lost revenue. It also would require states to accept mail-in ballots if they were mailed before Election Day and received within 10 days of the election — and, it would increase the maximum benefits allowed under USDA's Supplemental Nutrition Assistance Program by 15%.
Bloomberg said that the draft bill would prevent U.S. Citizenship and Immigration Services from furloughing employees “if the agency has sufficient funds to pay them—and would ensure funding by restricting the Department of Homeland Security's ability to transfer funds collected from fees for immigration benefits to other federal agencies for other purposes. The agency had expected to furlough workers at the end of August, citing a decrease in immigration fees because of the coronavirus. The furlough was averted temporarily.
In spite of possible progress toward a further stimulus that was seen as positive news this week, Bloomberg also noted that China was making only slow progress on the purchases of U.S. products as required by phase one of the U.S.-China trade deal. Purchases have been sliding, the report said and noted that China reduced the pace of its purchases in August, making slow progress toward trade deal goals.
The value of U.S. goods bought by China declined from the previous month, led by a slowdown in energy products, according to Bloomberg calculations based on Custom's data. By the end of August, China had purchased about 32.8% of the full-year target of more than $170 billion — meaning it must buy about $115 billion of goods in the remaining four months of the year to comply with last January's deal.
Purchases of energy products fell by 24% in August from the previous month, hitting about 14% of the full-year target. While China's crude oil imports from the U.S. dropped substantially from a record high in July, they are likely to rise in coming months as purchases of American crude rose before the August review of the trade deal.
In addition, the U.S. and China reaffirmed their commitment to the “Phase-One deal” in August, demonstrating a willingness to cooperate even as tensions rise over a range of issues.
China also cut its pork imports from the U.S. by nearly 40% in August from a month earlier, while increasing its purchases of cereals, Bloomberg said. Imports of soybeans, one of the key products in the trade deal, rose almost 300% from a month earlier and are likely to trend higher as the U.S. harvest picks up.
The August data include the latest revisions, Bloomberg said.
So, we will see. The proposed stimulus bill still seems quite fragile, especially as the many headline fights spread to include an increasing number of issues. Thus, this “most toxic” political year appears to continue to become even more difficult as the elections near, situations producers should watch closely as they emerge, Washington Insider believes.
CFAP 1 Payments Top $10 Billion
Payments under the Coronavirus Food Assistance Program 1 (CFAP 1) program are at $10.2 billion as of September 27, including $5 billion for livestock, $2.6 billion for non-specialty crops, $1.8 billion for dairy and $102 million for specialty crops.
Funds paid for cattle total $4.3 billion, followed by $1.8 billion each for corn and milk, with $600 million for hogs and $509 million for soybeans.
Payouts by state still show Iowa topping the list at $968 million followed by Nebraska ($711 million), California ($653 million), Texas ($625 million), Minnesota ($608 million) and Wisconsin ($523 million).
Payment data for CFAP 2, where signup launched September 21, “will be available in the coming weeks,” according to USDA's Farm Service Agency.
Democratic COVID Aid Plan Again Contains Farm Policy Shifts
There are several provisions in the $2.2 trillion Democratic COVID aid plan that focus on nutrition and agriculture policy. It would provide additional Supplemental Nutrition Assistance Program (SNAP) aid, including increases in the SNAP benefit levels and funds to cover expected participation increases in the program.
For agriculture policy, the plan would amend the Commodity Credit Corporation (CCC) Charter Act to allow for the use of CCC funds to deal with the removal and disposal of livestock and poultry due to supply chain disruptions during a public health emergency and would require congressional notification by USDA before any disbursement of CCC funds.
Payments would be provided for livestock and poultry depopulated due to processing plant shutdowns from the health emergency with additional funds for animal health surveillance efforts.
While it is not clear if the ag-policy-related provisions will become law, the details are a clear signal of what will likely be components in the next debate on an omnibus farm bill that will start to unfold in 2021.
Wednesday Watch List
Markets
At 7:15 a.m. CDT, the ADP report of U.S. private employment in September will give a clue about Friday's non-farm payrolls report from the Labor Department. An index of pending home sales is due out at 9:00 a.m., followed by the Energy Department's weekly inventory report at 9:30 a.m., including ethanol. At 11 a.m. CDT, USDA will release its quarterly report of Sept. 1 Grain Stocks and Small Grains Summary.
Weather
Showers will be isolated and limited to the Great Lakes region, where delays in harvest of corn and soybeans will be possible. Other areas will remain dry with good weather for fieldwork.
Tuesday, September 29, 2020
US-UK Trade talks Progressing
The United States and the United Kingdom wrapped up the fourth round of trade talks this month, with another round planned for mid-October. The UK Department of International Trade says, "Significant progress has been achieved since launching negotiations in May 2020, and most chapter areas are now in the advanced stages of talks." Chief Ag Negotiator with the U.S. Trade Representative's Office, Gregg Doud, spoke Monday during an Agri-Pulse and Kansas City Agribusiness Council event. Doud told attendees, "I'm confident here that we are going to get an opportunity to engage with them and work on these issues," the issues being tariffs, biotech and market opportunity. Doud noted tariffs on U.S. products will be high when the UK leaves the European Union, upwards of 25 percent. However, for beef, pork and poultry, the UK imports $4.5 billion of meat from the European Union. Doud says, “if we can get things right, I think we will have a fair shot at that,” giving U.S. meat producers a new market.
Beijing Asks Frozen Food Importers to Shun Countries with Severe Coronavirus
Beijing has asked frozen food importers to not import products from counties with severe coronavirus. The Beijing Municipal Commerce Bureau said in a statement issued to import companies, “Customs and local governments have repeatedly detected the coronavirus in imported cold chain food, proving it risks contamination,” according to Reuters. The Bureau urged importers to “proactively avoid importing cold chain food from areas heavily hit by the coronavirus,” while also asking importers to improve warning and reporting mechanisms related to testing products for the virus. This month, China suspended seafood imports from producers in Brazil, Indonesia and Russia for a week or more, because of coronavirus contamination. Earlier this summer, China also halted imports from a U.S. Tyson Foods plant. The U.S Centers for Disease Control and other world health organizations say the risk of contracting coronavirus from food is low. However, China has reportedly stamped out much of the virus, and is on high alert for any possible re-contamination.
NPPC, AFBF Seek to Cancel California Prop 12
The National Pork Producers Council and the American Farm Bureau Federation seek to terminate California’s Proposition 12. The two groups recently jointly filed their opening brief to the U.S. Court of Appeals for the Ninth Circuit, asking the court to strike California's Proposition 12 as invalid. AFBF and NPPC say Proposition 12 imposes arbitrary animal housing standards that reach outside of California's borders to farms across the United States. By attempting to regulate businesses outside of its borders, California's Proposition 12 violates the commerce clause of the U.S. Constitution, according to the court brief. Beginning in 2022, Proposition 12 prohibits the sale of pork not produced according to California's production standards. The proposition applies to any uncooked pork sold in the state, whether raised there or outside its borders. Currently, less than one percent of U.S. pork production meets Proposition 12's requirements. To comply with Proposition 12, U.S. hog farmers need to start making investment decisions today to be ready by the implementation date.
USDA Releases Annual Report Showing GMO Planted Acres
The Department of Agriculture says more than 90 percent of U.S. corn, cotton and soybeans are produced using genetically engineered seeds. Through an annual report on GE planted crops, USDA’s Economic Research Service says most of these GE seeds are herbicide-tolerant, insect-resistant, or both, known as stacked traits. The share of U.S. soybean acres planted with herbicide-tolerant seeds rose from seven percent in 1996 to 68 percent in 2001, before plateauing at 94 percent in 2014. Insect-resistant soybeans are not yet commercially available. Adoption rates for herbicide-tolerant corn grew relatively slowly at first, but then plateaued at 89 percent in 2014. The share of insect-resistant corn acreage grew from approximately eight percent in 1997 to 82 percent in 2020. USDA says increases in adoption rates for insect-resistant corn may be due to the commercial introduction of new varieties resistant to the corn rootworm and the corn earworm. Meanwhile, herbicide-resistant cotton acres in 2019 reached 95 percent, and insect-resistant cotton was 88 percent of total planted acres.
Bayer XtendFlex Soybeans Gain Final Approval
Bayer announced Monday that the European Commission has authorized XtendFlex soybean technology for food, feed, import and processing in the European Union. The milestone represents the final key authorization for XtendFlex soybeans. With the approval, Bayer can now look forward to a full launch in the United States and Canada in 2021 and expects to be in a strong position to supply 20 million U.S. soy acres when the selling season arrives. XtendFlex soybeans, Bayer’s newest soybean technology, are built upon the high-yielding Roundup Ready 2 Xtend soybean technology with the additional tolerance to glufosinate herbicides. That means XtendFlex soybeans are resistant to three herbicides, glyphosate, dicamba and the newly added glufosinate. XtendFlex soybeans will be Bayer’s second major product launch in soybeans in the last five years. Lisa Safarian, President of Crop Science North America at Bayer, says, "XtendFlex soybeans are the latest example of Bayer developing innovative products to help farmers meet challenges on their farm.”
European Company Raises Funds for Large-scale Cultured Meat Production
Mosa Meat, the European food technology company which introduced the world's first cultured beef hamburger in 2013, announced the first closing of $55 million as part of a larger Series B funding round. The company will use the funds to extend its current pilot production facility, develop an industrial-sized production line, expand its team, and introduce cultivated beef to consumers. While no date has been announced for an introduction to consumers, the company will work with regulators to achieve approval to serve consumers in Europe. The Series B funding round is led Blue Horizon Ventures, a food technology fund that aims to support and promote a positive global impact on the environment, human health, and animal welfare. Company CEO Maarten Bosch says the funding supports efforts to “make progress towards a cleaner, kinder way of making real beef, and ultimately increase the resilience, sustainability, and safety of our global food system.”
Washington Insider: Almost Everything's An Issue Now
Centrist Democrats are pushing for another vote in the House on a coronavirus response stimulus bill, but the key question is whether high-level bipartisan negotiators can strike a deal.
Bloomberg reports that lawmakers will “return to Washington with little time left for stimulus talks and other urgent priorities” after their coming recess. House members are set to leave at the end of this week until after the election. Senators still have to pass the stopgap funding measure to avert a shutdown by Wednesday night's deadline — and Republicans are racing to confirm President Donald Trump's pick for the U.S. Supreme Court before the Nov. 3 election.
House members may vote on a second Democratic coronavirus bill in order to demonstrate they're willing to compromise, Bloomberg says. But a handshake deal between Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin would likely be more meaningful than a partisan vote. Pelosi and Mnuchin spoke Friday afternoon on coronavirus relief and “agreed to continue their conversation in the days ahead,” Pelosi's deputy chief of staff noted on Friday.
Pelosi said Sunday there's a chance she and Mnuchin can still reach a deal and that Democrats will unveil a new “proffer” shortly. “I trust Secretary Mnuchin to present something that can reach a solution and I believe we can come to an agreement,” she said.”
She added if a deal isn't struck soon, Democrats might vote on the House — only version that includes funds for airlines and restaurants and more Paycheck Protection Program funding. “The public is going to have to see why $2.2 trillion, or now $2.4 trillion, perhaps, is necessary,” she said, adding that the president's “denial of the virus, and resistance to do anything to crush it, has made matters worse.”
Swing-district Democrats are pushing for action regardless of whether there's a deal. Eight moderate Democrats sent a letter to Pelosi on Friday, asking her to “bring up a bill that “demonstrates our commitment to meeting Republicans in the middle, as we have expressed our willingness to do, and advance it through the House with the haste this crisis demands.”
The letter was signed by Democratic Reps. Cindy Axne, Abby Finkenauer and David Loebsack of Iowa, Susan Wild of Pennsylvania., Angie Craig of Minnesota, Susie Lee of Nevada, and Chris Pappas of New Hampshire, as well as Del. Michael San Nicolas of Guam.
In the meantime, House leadership has downplayed the importance of a messaging vote. “We want to get a deal with Secretary Mnuchin and the Senate because we want to get people help, not just messages,” House Majority Leader Steny Hoyer, D-Md., told reporters last week.
In addition, House Democrats' lawsuit over the administration's transfer of funds to pay for a border wall was revived last week by the DC Circuit Court of Appeals decision. A three-judge panel on Friday vacated a lower-court decision that found that the House didn't have legal standing to challenge the transfer of funds.
The opinion written by Judge David Sentelle “makes for interesting reading” for those who follow the budget and appropriations process, Bloomberg says.
It notes that the House sued over the Trump administration's move to supersede congressional appropriations and that the House alone, without the Senate, doesn't have standing to sue. The question was whether the House as an individual chamber was specifically injured by the administration's decision to spend money without congressional approval.
The court ruled in the House's favor on its standing to sue, saying that while an individual chamber can't appropriate funds on its own, it can effectively block appropriations, because both chambers need to pass a bill before it can become law. In other words, “each chamber has a distinct individual right” in the appropriations process, especially when it comes to limiting spending, the opinion says.
“To put it simply, the Appropriations Clause requires two keys to unlock the Treasury, and the House holds one of those keys,” the opinion says. “The Executive Branch has, in a word, snatched the House's key out of its hands. That is the injury over which the House is suing.”
While it may seem like the argument is splitting hairs over the legislative powers of the House versus Congress as a whole, Sentelle's opinion lays out why the powers of an individual chamber matter in the appropriations process.
Under the administration's “standing paradigm,” the Executive Branch can freely spend Treasury funds as it wishes unless and until a veto-proof majority of both houses of Congress forbids it. Even that might not be enough: Under the defendants' standing theory, if the Executive Branch ignored that congressional override, the House would remain just as disabled to sue to protect its own institutional interests. “That turns the constitutional order upside down.”
So, we will see. As the time before the elections dwindles, and the stakes rise, these battles can be expected to become increasingly intense — and, possibly, more frequent. They are often “high stakes” fights and should be watched closely by producers as they emerge, Washington Insider believes.
USDA Raises Forecast For Overall Food Price Inflation And Restaurant Prices For 2020
USDA Friday increased its forecast for overall food price inflation in 2020 to range of 2.5% to 3.5%, up from their prior outlook of an increase of 2% to 3%. Their outlook for food away from home (restaurant prices) also rose to 2% to 3% versus a prior outlook for an increase of 1.5% to 2.5%.
“Prices have been relatively slow to retreat from the highs reached as a result of the pandemic, so some forecasts have been revised upward this month,” USDA's Economic Research Service (ERS) said.
USDA still sees 2020 food at home (grocery store) prices rising 2.5% to 3.5% in 2020.
Their outlooks for 2021 food prices were left unchanged from their outlook issued in August.
Beijing Asks Food Importers to Avoid Frozen Foods From Countries With High COVID Infection Levels
The city of Beijing is calling on food importers to avoid frozen food from countries with high levels of COVID-19 outbreaks, according to a statement from the Beijing Municipal Commerce Bureau.
"Customs and local governments have repeatedly detected the coronavirus in imported cold chain food, proving it risks contamination," the agency said in a statement issued to import companies, according to Reuters.
The agency also told food importers to "proactively avoid importing cold chain food from areas heavily hit by the coronavirus" and make alternative plans for imports.
Chinese authorities said they had suspended some seafood imports from two Russian vessels and a Brazilian company after COVID-19 was found in samples.
Tuesday Watch List
Markets
An index of U.S. consumer confidence is due out at 9 a.m. CDT and is Tuesday's only official report. The latest weather forecasts will be watched for the U.S., the Black Sea Region and for South America. Traders will also be watching for any trade news that develops.
Weather
With a front pushing showers into the East Coast, mostly dry conditions are expected for the primary growing regions on Tuesday. Some breezy winds in the Plains may help with dry down as well.
Monday, September 28, 2020
House Passes a Clean Energy Bill
The House of Representatives passed a broad bill that intends to help the U.S. boost energy efficiency and renewable energy sources in an effort to combat climate change. The Hill says the chamber passed the 900-page Clean Energy and Jobs Innovation Act by a 220-185 vote. The legislation intends to create research and development programs for different forms of energy, including solar, wind, advanced geothermal energy, and hydroelectric power, as well as new ways to lower pollution from fossil fuel production. The bill also establishes more rigorous building codes and bolsters energy efficiency requirements and weatherization programs. A similar energy innovation bill was introduced in the Senate earlier this year but seemed to stall until recently. The Senate bill is moving again after lawmakers agreed on an amendment seeking to phase down the use of a type of greenhouse gas. A senior House Democratic aide tells The Hill that if the Senate can pass its own bill, the chambers can go to conference to settle any disagreements. While Democrats support the bill, Republicans point out that it will cost over $135 billion. Three House GOP members says the bill is “full of government mandates that will make Americans pay more money for everything from the vehicles they drive to heating and cooling their homes.”
Biofuel Groups Applaud House Passage of RFS Integrity Act
Growth Energy is happy about the inclusion of the Renewable Fuel Standard Integrity Act contained in the clean energy legislation that passed the House last Thursday. The act was authored by House Ag Committee Chair Collin Peterson, along with representatives from other ag states like South Dakota, Iowa, Illinois, and Kansas. It is designed to bring much-needed transparency to the Environmental Protection Agency’s secretive small refinery exemption process and ensure refiners meet biofuel blending requirements. “After years of EPA mismanagement, the legislation will finally give farmers and biofuel producers a long-overdue peek at EPA’s secretive and destructive process,” says Growth Energy CEO Emily Skor. The National Biodiesel Board is also pleased that the act is included in the House clean energy bill. The provision would set a June 1 deadline for annual small refinery exemption petitions, ensuring they’ll be accounted for in the RFS calculations. Also, the bill would require public disclosure of the volumes of biofuels potentially impacted by the petition, along with the name of the petitioner. Kurt Kovarik, NBB VP of Federal Affairs, says, “This is a commonsense step to ensure that RFS biomass-based diesel volumes are fully met and prevent a recurrence of the demand destruction for biodiesel that we’ve seen for the last seven years.”
AGs Against Eliminating Swine Slaughter Line Speeds
Seven attorneys general and two agriculture groups get to file briefs in a lawsuit challenging a USDA rule that eliminated line-speed limits at swine slaughter plants. A DTN report says on October 1 of last year, the Food Safety Inspection Service finalized the rule that cut the number of federal inspectors by 40 percent at swine plants while also eliminating limits on line speeds. The United Food and Commercial Workers International Union filed a lawsuit six days later, asking the U.S. District Court in Minnesota to set aside the rule. The union says USDA didn’t take into consideration how it would affect safety issues and risks for line workers. The seven AGs will file a brief in support of a motion for summary judgement filed by the workers union. Additionally, the National Pork Producers Council and the North American Meat Institute will file a brief in support of the USDA motion for summary judgement. The plaintiffs allege in the lawsuit that “USDA’s failure to consider overwhelming recorded evidence that indicates faster line speeds subject workers to substantially increased risk of injury was arbitrary and capricious.” The workers union also says USDA didn’t provide an adequate reason for the decision to reduce the number of federal inspectors by 40 percent at each site.
Ag Groups Want U.S. to Remain in WTO
A coalition of 62 leading U.S. agriculture stakeholders are asking for continued U.S. membership in the World Trade Organization. A Corn Refiners Association release says the groups sent a letter to U.S. Trade Representative Robert Lighthizer, as well as leaders of the Senate Finance, House Ways and Means, and the House and Senate Ag Committees calling for effective WTO reform. That reform would enhance the ability of American agriculture to access foreign markets and maintain transparency and accountability critical to future export growth that will help to support American jobs. The letter also identifies characteristics they’re looking for in the next WTO Director General. “The WTO is fundamental to a rules-based system of international trade,” says John Bode, President and CEO of the Corn Refiners Association. “As long as exports are important to U.S. agriculture, WTO membership will be essential. This is critical to the one-fifth of the U.S. economy that is related to agriculture.” The letter does note the need for the WTO to institute updated rules in order to keep pace with global economic changes and calls for increased accountability among members. A transition in leadership “presents a great opportunity to successfully implement reform and reinvigorate its negotiating function under a new Director General.”
China Officials Downplay Fears of Grain Shortages
Beijing wants the rest of the world to know that the most-populated country in the world is not looking at a grain shortage. China’s Ag Minister is blaming speculators for rapidly rising corn prices which are stoking fears about a possible shortage in the Asian nation. Corn prices in China recently hit an eight-year high following events like typhoons and flooding that damaged the nation’s Corn Belt. The South China Morning Post says it saw firsthand that large areas of cropland were flattened. As a result, local farmers are concerned about a steep drop in what they can produce. Chinese corn imports, used mainly in animal feed, hit the highest level in almost 30 years during the first eight months of 2020, increasing anxiety about a possible domestic supply gap. However, the nation’s Minister of Agriculture and Rural Affairs says the surging prices were caused by “market speculation and irrational hoarding.” He says the country has ample supplies of corn and is set to harvest another bumper crop in the autumn, despite the impact of natural disasters in two provinces that account for 25 percent of China’s corn production. “New corn will enter the market soon and the supply will further increase,” he says. “Corn prices are already starting to stabilize.”
Next Generation Fuels Act Introduced in House
Higher-octane fuels like mid-and-high-level ethanol blends are mutually beneficial for drivers, farmers, and the environment. Because of that, Representative Cheri Bustos (BOOS-tohs) introduced the Next Generation Fuels Act, which would increase gasoline octane to a minimum standard of 98 Research Octane Number (RON) through low-carbon renewable fuels. The National Farmers Union, a long-time supporter of higher blends of ethanol, is pleased with the bill’s introduction. “There are so many reasons to widely adopt low-carbon, high octane ethanol blends,” says President Rob Larew. “They significantly improve vehicle fuel efficiency, which reduce greenhouse gas emissions.” He also says the new standards would create new markets for family farmers, supporters of rural economic growth, and offer a cost-effective fuel for American drivers. Growth Energy is also pleased with the introduction, saying it will unleash higher-octane, lower-carbon fuels that offer drivers better mileage and fewer emissions. “There has never been a more urgent need to adopt higher-octane, low carbon ethanol blends into America’s fuel supply, as they are key to achieving clean, healthy air,” says Growth Energy CEO Emily Skor.
Washington Insider: Wall Street Volatility Warning
In response to President Donald Trump's promise to dispute the election outcome if he loses, “Wall Street's taking him at his word.”
Several market reports are noting that volatility markets from stocks to currencies and bonds show “investors bracing for turbulence not just on election day, but for the ensuing weeks as well.” The fear is that results from the Nov. 3 vote – already the most expensive event to hedge against ever – won't be clear enough that a winner emerges without a protracted legal battle.
For example, Bloomberg notes that, the election outcome itself, once you know it, that would have meaningful but not an oversize impact on the market. But the prospect of it becoming a “complete mess” is another element that people don't really know how to price.
There are a lot of factors pressuring the stock market right now and the potential for a hotly contested result is certainly one of them, especially as there is already “so much social tension,” said Mark Luschini, chief investment strategist at Janney.
Many argue now that an unknown election result is increasingly becoming conventional wisdom on Wall Street. “A contested election has become the baseline,” JPMorgan Chase strategist John Normand wrote in a recent note to clients.
The United States has seen bitterly disputed presidential election results in the past, and many remember that in 2000, it took weeks to decide the race between George W. Bush and Al Gore. Legal battles raged over the recount in Florida with the Supreme Court finally weighing in to stop the recount and award the election to Bush. Stocks slid throughout that period.
But 2020 is widely seen as a vastly different and more combustible environment, sparking growing unease among investors about the “impact of a muddled election result.”
The U.S. also continues to face a brutal pandemic that has killed more than 200,000 Americans and spurred a massive economic decline, Politico notes. While the backdrop in 2000 came amid a dot-com stock bubble in the process of deflating, the economy was still expanding.
“The fear is that if we get a disputed election, it could lead to disruption and possibly even violence. If so, we could well see markets take a significant hit,” Brad McMillan, chief investment officer at Commonwealth Financial Network, said. “In 2000, the hanging chad debacle in Florida hit markets, and this election could well be even more disputed than that one.”
Still, most Wall Street executives, traders and investment analysts widely expect the market environment to calm quickly after the election if the result is clear.
For example, markets could rally on a Trump win based on the expectation of continued low tax rates and a relaxed approach to corporate regulation. A Biden win, especially if Democrats also take the Senate, could spark a short-term sell-off on fears of increased taxes on corporations and the wealthy – though that possibility is increasingly baked into expectations. Certain sectors also could face new regulation, including banks.
However, a Biden win could also reduce some of the tension generated by Trump's trade wars and generally produce a less volatile daily political environment, tempering any initial sell-off. Total Democratic control would also likely lead to significant new fiscal stimulus, generally viewed as a positive on Wall Street.
But the fear that is growing more intense by the day is that markets will have no idea – perhaps for weeks or months—about who will get inaugurated next Jan. 20.
Numerous market reports see a “rush for volatility protection” well into December. Already, the “volatility futures curve remains elevated past the election.” Politico says.
Goldman Sachs cautioned Friday that a delayed outcome is only a “tail risk” and not the most likely outcome but markets have “even more to worry about right after the vote.” The Fed will meet the week of the election for the first time since 1984, while October's jobs report will be released that Friday.
Together, these uncertainties are forcing traders to protect against volatility weeks after the election passes, several reports say. November futures – which reflect the market's expectations for volatility through Nov. 18 – are more expensive than October, while December futures prices have been creeping higher as traders increasingly anticipate a delayed result.”
Even the Treasury market, where unprecedented Fed support has muted swings for months, is showing signs of anxiety, Politico says. Expectations for price volatility in three months versus four weeks are at a level only exceeded once in the past decade. Some traders have been buying options to hedge a potential rush of capital from investors fleeing stocks.
So, we will see. Wall Street's concerns are widely shared across the economy right now and the situation seems unlikely to calm itself in the near term. These are certainly fights producers should watch closely, and which are likely to be both contentious and bitter, Washington Insider believes.
USDA Chief Economist Addresses COVID, China Buys Of US Ag Goods
A blog post this week from USDA Chief Economist Rob Johansson outlines several factors that have been impacting U.S. agriculture, including global overproduction of several commodities.
He also notes the recent rise in Chinese purchase of several U.S. ag commodities, but does not delve into recent USDA WASDE outlooks that did not appear to acknowledge what he points out relative to China “signaling” they will go beyond their corn tariff-rate quota (TRQ), for example.
But a portion of the woes facing U.S. agriculture now were fostered in party global overproduction of several commodities over the 2014-2018 period.
Farm, Food Groups Tell Trump WTO is Important to US Agriculture
More than 50 agriculture groups and businesses say the U.S. should remain a World Trade Organization (WTO) member and work with other members to revamp rules to modernize the global institution. WTO supporters are concerned that President Trump might withdraw the U.S. from the institution.
Many in U.S. agriculture say that could be detrimental to farm and food sectors that rely on export markets. In a letter to U.S. Trade Representative Robert Lighthizer, the groups and businesses said U.S. agriculture has largely benefited under the WTO, but said the body's rules need updating. The letter was also sent to the chairmen and ranking members of the House and Senate Agriculture committees and to the Democratic and Republican leaders of the House Ways and Means and the Senate Finance committees.
“While the WTO has been beneficial for U.S. agriculture, its rules have not kept pace with changes in the global economy, and improvement is needed to hold members accountable and improve the organizations' governance,” the letter said. “Continued U.S. membership and active participation will help ensure that necessary reforms are undertaken, and that the WTO will continue to play an important and effective role in economic development of the United States and our trading partners.
As long as exports are important to U.S. agriculture, WTO membership will be essential as well.”
Monday Watch List
Markets
Traders will start the week looking at the latest weather forecasts for the U.S., Black Sea region and South America and pause at 8 a.m. CDT to see if USDA has any export sales announcements. USDA's weekly grain inspections report is out at 10 a.m. CDT, followed by Crop Progress at 3 p.m. CDT, including USDA's latest estimates of row crop harvest progress.
Weather
A frontal boundary will bring scattered light to moderate showers to the eastern Midwest and Delta region on Monday. Isolated showers will also occur later today across the western Midwest. Showers will boost soil moisture for winter wheat planting in the eastern Midwest, but cause some harvest delays.
Friday, September 25, 2020
New Report Examines Cattle Market Issues and Solutions
Coalition Seeks CCC Funds for Farm Workers
California Governor Signs Order to Ban Gas-powered Cars by 2035
TFI Releases Fertilizer Industry Economic Impact Study
Midwest lawmakers Seek Funding for Missouri River Navigation
State and County Fair Support Gaining Momentum in Congress
Washington Insider: Fed Inflation Approach Criticized
Thirty-year market veteran Matthew McLennan of First Eagle Investment Management is among those warning that price pressures are coming down the road. He's betting easy money and further hits to productivity will spark inflation, making bigger companies with pricing-power and competitive advantage a good wager. He's also piling into gold as a pure hedge against the erosion of value caused by inflation.
However, Bloomberg thinks McLennan is in the minority. The Federal Reserve's aim to let inflation run hot draws mostly derision across Wall Street after the central bank has failed to lift prices toward its 2% target for years. Even Fed officials themselves made clear Wednesday that they can't do it all, stressing that fiscal stimulus is critical to sustaining the economic recovery. Even so, some still see increased potential for inflation bubbling up.
“If you think about what the Fed's inflation averaging means, it means they might be happy to see inflation move over time from 1% to 2% to 3% to 4%, while interest rates remain close to zero,” said McLennan, head of the global value team at First Eagle, which manages about $101 billion in assets. “That also means that real interest rates go down more.”
What might make things different this time is that secondary impacts of the pandemic may add to growing productivity bottlenecks and America's deficit keeps surging, says McLennan. Add to that the fact that the U.S. dollar is losing its luster, he said.
The fresh wave of deglobalization underfoot and second phase pandemic impacts both bode poorly for productivity, said McLennan, who was co-portfolio manager of the global equity partners group at Goldman Sachs Asset Management in London prior to joining First Eagle in 2008. That means, for him, that inflation reignites amid a backdrop of slow economic growth. Continued weakness in the dollar, with the Bloomberg Spot Dollar Index down about 9% from this year's high in March, buoys inflation through rising import prices as well.
Among the array of products McLennan helps manage is the $43 billion Global Fund, which had gold as its biggest holding at about 13%, according to Bloomberg data as of Aug. 31. Another one he steers, the U.S. Value Fund, had Oracle Corp., Comcast Corp and Colgate-Palmolive Co. as it top three holdings.
The Fed targets inflation as measured by the personal consumption expenditure price index. It also pays close attention to a core reading of that gauge which strips out volatile food and energy prices. Both barometers have plummeted since the pandemic.
There are other notable investors and corporate heads warning on inflation, also, Bloomberg observes. Earlier this month Stan Druckenmiller said there's a chance that inflation could hit 5% to 10% in the next four to five years. Druckenmiller was the founder and manager of Duquesne Capital – and managed the Quanturn Fund with George Soros.
McLennan prefers gold over other favored fixed-income hedge vehicles like Treasury inflation-protected securities, given there's a limited supply of the shiny metal. The Fed's monetary stimulus already pushed key measures of the U.S. money supply up by double digits.
“The rate of supply growth of gold is less than 2% a year, bringing us back to the idea of scarcity value,” McLennan said.
Traders see consumer price inflation averaging about 1.6% over the next 10 years, based on so-called breakeven rates garnered by TIPS and nominal Treasuries. That's down from an 8-month high on Sept. 1. Gold prices have also ebbed, both likely driven lower in part on the inability of Congress to agree on a phase four fiscal stimulus package.
The global recovery also risks losing steam as virus cases rise and some nations roll back reopening measures, Bloomberg said. And, it sees the U.S. presidential election as another wild card.
“If we get a Democrat clean sweep it's more likely than not we are going to see more rapid growth in the federal register and regulation” which tend to reduce productivity, McLennan said. Slow grow and rising inflation are probable with “these productivity bottlenecks coming with a Fed that's willing to let inflation run hot.”
So, we will see. Clearly, inflation is a trend deeply feared by many who remember bouts in the recent past. However, the current priorities are economic growth and jobs recovery and the Fed is likely to push for its inflation targets to achieve those goals — trends producers should watch closely as these economic debates intensify, Washington Insider believes.
WTO Members Press U.S. On Farmer Aid
They are calling on the U.S. to explain the around $34 billion in what they consider trade-distorting payments in 2019. The WTO cap for those “amber box” subsidies is $19.1 billion. The countries also raised the latest up to $14 billion CFAP 2 program announced last Friday.
But countries also raised questions about aid the EU is providing to its farmers in response to the COVID-19 situation, indicating that all countries have taken actions to help their farmers in the wake of the pandemic.
USDA's Perdue Likes China Ag Buys, But Wants to See Shipments
Perdue said “it is going to be tough to meet those numbers ($36.5 billion first year). This is just purely a guess; we may reach it by the end of January before Brazil and South America come back into the marketplace.”
While there are hefty export sales on the books, Perdue said he wants to see shipments, saying China is known for booking and later cancelling sales. “It does appear they are trying, but it remains to be seen if we will make those numbers or not.”
Data for the week ended September 17 from USDA included the following export sales figure for China for 2020/21: Net sales of 566,427 metric tons of corn, 262,400 mt of sorghum, 1,879,091 mt of soybeans, 39,482 running bales of upland cotton, but net reductions of 600 metric tons of wheat. For 2020, USDA reported net sales of 3,396 metric tons of beef and 8,161 metric tons of pork.
Shipments of U.S. ag products to China also continues, with exports the week ending September 17 including 58,370 mt of wheat, 204,368 mt of corn, 71,552 mt of sorghum, 769,309 mt of soybeans, 117,690 running bales of upland cotton, 1,200 mt of beef and 10,943 mt of pork.
Friday Watch List
Friday's official reports include U.S. durable good orders for August at 7:30 a.m. CDT and USDA's monthly cattle on-feed report, due out at 2 p.m. CDT. Other market interests include the latest weather forecasts for the U.S., Black Sea region and South America, as well as any trade news that develops.
Weather
Friday will again be dry and open for row crop harvest and winter wheat planting in primary crop areas. Temperatures will be above to much above normal, adding to crop drying. Rain will be confined to the far southeastern U.S. with harvest disruption and possible crop quality impact.
Thursday, September 24, 2020
Farm Groups Applaud CCC Agreement
The decision by House lawmakers to include Commodity Credit Corporation funding in the continuing resolution demonstrates their support for America’s farmers, according to the American Farm Bureau Federation. The stopgap measure provides nearly $8 billion for nutrition assistance programs, replenish the Commodity Credit Corporation, and stipulate some Congressional oversight of spending through CCC. Farm Bureau Federation President Zippy Duvall says, “While we were disappointed it recently became a political flashpoint, we are pleased lawmakers on both sides of the aisle recognize that these funds help to sustain conservation programs and stock America’s pantry.” National Farmers Union President Rob Larew stated, “We are relieved that the House has come to an agreement.” The agreement, passed by the House 359-57, keeps the federal government funded through December 11. Republicans and some House Democrats representing rural areas were critical of the original House proposal that didn’t include CCC funding. Democrats were seeking accountability in the program, referring to a White House proposal that would have used CCC funds for oil companies.
Cattle Market Transparency Act Introduced
The Cattle Market Transparency Act introduced this week seeks to restore transparency and accountability in the cattle market. Senator Deb Fischer, a Nebraska Republican, introduced the bill. Fischer says, “The past few years have been very difficult for producers.” Fischer noted the Tyson Foods plant fire in Kansas, and supply chain challenges due to COVID-19. The bill would establish regional mandatory minimum thresholds of negotiated cash trades to enable price discovery in cattle marketing regions. It requires the Secretary of Agriculture to establish regionally sufficient levels of negotiated cash trade, seek public comment on those levels, then implement. The legislation also requires USDA to create and maintain a library of marketing contracts between packers and producers, and require packers to supply the information to USDA. The bill also would mandate that a packer report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. This requirement already exists for the swine industry.
Senate Hearing Focuses on Changes to the Endangered Species Act
A Senate Environment and Public Works Committee hearing Wednesday focused on efforts to modernize the Endangered Species Act. The Endangered Species Act Amendments Act of 2020 reauthorizes the ESA for the first time since 1992. Florida rancher Liesa Priddy says the legislation, “will be better for ranchers, better for states, better for the federal authorities, and better for the species.” Priddy testified on behalf of the National Cattlemen’s Beef Association and the Public Lands Council. The organizations support the legislation that they say empowers states to lead recovery efforts and gives stakeholders, like ranchers, who make significant investments in voluntary conservation a more meaningful seat at the table in recovery discussions. Senator John Barrasso, a Wyoming Republican, says state and local experts need to be leading efforts to protect local wildlife. His legislation will increase local input and improve transparency in the listing process. Barrasso says the bill also protects endangered species and helps communities invest in more conservation and recovery activities.
Ethanol and Farm Groups Call on EPA to Reject Remaining Waivers
A coalition of farm and ethanol groups want the Environmental Protection Agency to take the “next step” in denying waivers under the Renewable Fuel Standard. While the groups say EPA’s recent announcement that it has denied 54 petitions for “gap year” small refinery exemptions under the RFS was indeed a big step forward, “there is more work to be done to fully restore integrity to the RFS.” There are 50 exemption petitions still awaiting a decision, and EPA still has not released the 2021 RVO proposal. The Renewable Fuels Association, American Coalition for Ethanol, National Corn Growers Association and National Farmers Union worked together and won a unanimous federal court decision in January that they say should have put an end to EPA’s abuse of the refinery exemption program. There are 17 gap-year petitions remaining and 33 pending exemption requests for 2019 and 2020. In a press conference Wednesday, Renewable Fuels Association President and CEO Geoff Cooper stated, “EPA needs to reject those the second they come through the front door,” from the Department of Energy.
Cross-Industry Collaboration Launches Million-Acre Grazing Initiative
The Walmart Foundation, Cargill and McDonald's are investing more than $6 million in an initiative led by the World Wildlife Fund that aims to improve the grasslands of the Northern Great Plains. The new program, known as the Ranch Systems and Viability Planning, or RSVP network, will support ranchers across the ecoregion-focusing primarily on Montana, Nebraska and South Dakota. The Network will provide technical expertise, training and tools to help advance grazing practices that improve the health of the land. By improving management of one million acres over five years and avoiding conversion, the effort will increase carbon storage and sequestration, improved water infiltration, and better biodiversity outcomes. Kathleen McLaughlin of the Walmart Foundation says, "Collaborative efforts like this can accelerate innovative, sustainable solutions and support ranchers in the beef supply chain." The World Wildlife Fund will work with ranchers on private and tribal lands to provide extension services in one-on-one and group workshops, offer ongoing technical expertise and provide cost-share and monitoring to help ranchers design, document and implement ranch plans.
General Mills to Reduce Greenhouse Gas Emissions
General Mills announced a pledge to reduce absolute greenhouse gas emissions by 30 percent across its full value chain - from farm to fork to landfill - over the next ten years. The company also committed to a long-term goal to achieve net-zero emission levels by 2050. The absolute greenhouse gas commitment was calculated using methodologies approved by the Science Based Target Initiative that model a level of emission reductions that science suggests is necessary to sustain the planet's health. The framework focuses on advancing regenerative agriculture across the company's sourcing footprint on one million acres by 2030. General Mills says up to one-third of greenhouse gases stem from the food system, and an estimated 80 percent of which comes from agriculture. In 2019, General Mills committed to advancing regenerative agriculture on one million acres of farmland by 2030. The company defines regenerative agriculture as holistic, principles-based farming and ranching that seeks to strengthen ecosystems and community resilience.
Washington Insider: House Passes Stop Gap Funding Bill
The House passed a stopgap funding measure “through Dec. 11” on Wednesday night, overcoming a fight over farm and nutrition aid and preparing for a frantic lame duck session at the end of the year. The bill now heads to the Senate, where its “chances of passage are good” after Republicans got the farm aid they demanded.
The stopgap would provide $21 billion spending authority by accelerating the reimbursement of USDA's Commodity Credit Corporation (CCC). It also would provide almost $8 billion in funds to feed children who normally receive school lunches — an increase from the $2 billion Democrats had earlier considered.
Lawmakers from agriculture-heavy states, including some centrist Democrats, pushed for the farm aid measure after President Donald Trump last week announced $13 billion in “farm aid” through the Commodity Credit Corporation.
On Monday, Democrats had released a version of the measure that did not contain the farm bailout provision, enraging Republicans and putting passage of the bill in doubt — and thus raising the chances of a government shutdown. It also became apparent that House Speaker Nancy Pelosi, D-Calif., did not have the votes to pass it.
Democrats have complained that Trump administration farm relief has favored southern states such as Georgia — a key swing state and home of Agriculture Secretary Sonny Perdue — and larger producers.
“The Trump Administration has proven they cannot be trusted to distribute payments fairly,” said Sen. Debbie Stabenow, D-Mich., top Democrat on the Senate Agriculture Committee. She added that the Agriculture Department doesn't need the authority to meet farm bill obligations. But other Democrats, including endangered House incumbents in states like Iowa and Minnesota, pressed for the farm aid, the Washington Post reported.
The stopgap funding bill also comes as negotiations on a huge COVID-19 relief bill remain stalled and as the Capitol has been thrust into an unprecedented political drama with Supreme Court Justice Ruth Bader Ginsburg's death, which has launched an intense election-season Senate confirmation fight.
The spending proposal, called a continuing resolution, or CR, in Washington-speak, would keep every federal agency running at current funding levels through Dec. 11, which will keep the government afloat past the election and possibly reshuffle Washington's balance of power.
Appropriators have committed to trying to pass an omnibus spending measure by Dec. 11, Speaker Pelosi said on Wednesday. Bloomberg called that “an ambitious goal in less than three months, indicating lawmakers could assemble a few large packages, if not a single 12-bill omnibus measure.” The House passed 10 of its 12 bills, but Senate appropriators have not marked up or release any appropriation bills.
“We'll proceed with what we have accomplished on the floor of the House, they'll post what their bills might be, our appropriators will go to conference,” Pelosi said, adding that appropriators have a bipartisan, bicameral agreement to try to have an omnibus “finished by Dec. 11.”
The continuing resolution released and passed yesterday doesn't follow an earlier agreement to leave coronavirus measures out of the stopgap funding bill — but Democrats got a substantial amount of food aid funds in return, Pelosi said in the interview yesterday. “The definition of a clean CR on the Republican side is, 'What we want should go in there, what you want shouldn't,'” she argued.
In a side note, Bloomberg noted that Rep. Debbie Wasserman Schultz, D-Fla., is vowing to bring back earmarks, with new transparency requirements, if she's chosen as the next House Appropriations chairwoman, according to a plan she released for the 117th Congress.
She is up against Reps. Rosa DeLauro, D-Conn. and Marcy Kaptur, D-Ohio, among Democrats in the race to succeed retiring Chairwoman Nita Lowey, D-N.Y. DeLauro and Kaptur both have more seniority but Wasserman Schultz has sought to garner support through specific proposals to change how the panel operates — including a July plan to create an advisory panel on inequity in federal spending.
Under Wasserman Schultz's proposal, in addition to reviving earmarks, the full committee would “hold hearings outside of appropriations season,” in order to expand its overall level of work; start an advisory committee with members from key caucuses; hold freshman orientation and “Appropriations 101” workshops; reestablish the House Appropriations Select Intelligence Oversight Panel; and expand the chairwoman's member services team.
Wasserman Shultz proposed making the earmark process more transparent than it was before it was banned by House Republicans in 2011. Those changes include prohibiting earmarked funds from going to for-profit businesses, posting earmarks publicly, creating an online database of earmarks, and calling for an annual earmark audit by the Government Accountability Office.
So, we will see. Almost everything is toxic these days, and the fog of battle is unusually dense, observers say. However, the battles are increasingly important and should be watched closely by producers as the process intensifies, Washington Insider believes.
Reuters: USDA Making COVID Aid Payments To Tobacco Farmers From New Account
USDA will be making payments to tobacco farmers under the Coronavirus Food Assistance Program 2 (CFAP 2) effort via a new account established under the office of the secretary, according to a report from Reuters.
The payments of up to $100 million to tobacco farmers will not come from the Commodity Credit Corporation (CCC) funding but from this new account established in the wake of how Congress divvied up money to USDA in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
A change in law in 2004 prevented CCC funds from being used to make payments to tobacco farmers, and USDA told the news service it is tracking the money.
The CARES Act provided $9.5 billion in relief funding for agriculture, allocating those funds to the office of the agriculture secretary.
Senators Call for Removal of Trade Program's Rice Tariff Barriers
A group of U.S. senators are calling on the Trump administration to reform the Generalized System of Preferences (GSP), the largest and oldest trade preference program. The lawmakers want the reforms to level the playing field for American rice producers.
GSP provides duty-free treatment to goods from developing countries to promote economic growth in those nations. In recent years, highly subsidized rice growing competitors have taken advantage of this program to increase rice exports to the U.S. at the expense of American producers, rice proponents note.
In a letter to U.S. Trade Representative Bob Lighthizer — authored by Sen, John Boozman, R-Ark., and others — the members shared their support for the USA Rice Federation's petition to remove all rice tariff lines from the list of commodities eligible for duty-free import under GSP.
Thursday Watch List
Markets
Thursday morning's 7:30 a.m. CDT reports include USDA's weekly export sales, weekly U.S. jobless claims and an update of the U.S. Drought Monitor. Traders will watch for a possible export sale at 8 a.m., followed by a report on U.S. new home sales at 9 a.m. CDT and natural gas inventory at 9:30 a.m. The latest weather forecasts will also be checked and USDA's quarterly hogs and pigs report is out at 2 p.m. CDT.
Weather
Showers and thunderstorms are in store for the northern Midwest and the Mid-South Thursday, causing harvest disruption. A few scattered showers will also be noted in the southern Plains and western Midwest. Dry conditions will be in effect elsewhere to favor row crop harvest and winter wheat planting.
Wednesday, September 23, 2020
Biden Campaign Blames Trump for Ethanol Crisis
During a virtual press conference Tuesday, the Joe Biden campaign utilized farmers blaming President Donald Trump for the ongoing ethanol industry crisis. The farmers noted how the administration has given oil companies dozens of waivers, reducing demand for ethanol and forcing the closure of refineries across the country. Jim Nichols, owner of a 500-acre corn and soybean farm in Minnesota, stated, “Corn farmers are in terrible shape due to President Trump’s betrayal,” adding, “we need change now.” Chris Gibbs, a farmer from West-central Ohio and president of the Rural America 2020 board of directors, stated, “Rather than supporting corn farmers and making E15 ‘America’s Fuel,’ Trump has consistently undercut this industry and hurt our farmers. Rural America 2020 is a nonprofit that advocates for policies that benefit agriculture and rural America, supporting Joe Biden for president. Last week, Trump’s Environmental Protection Agency announced it would deny petitions for small refinery exemptions for past compliance years, the so-called “gap-filling” petitions for the 2011-18 compliance years.
Agreement Reached to Include CCC Funds in CR
After days of partisan politics, a continuing resolution passed the House of Representatives Tuesday night including funds for the Commodity Credit Corporation. The White House and Congressional Republicans reached an agreement with House Speaker Nancy Pelosi to include the funding, while prohibiting oil companies from accessing CCC funds. The Trump administration was exploring a plan to use up to $300 million of CCC funds for the oil industry, but dropped the proposal this week. In a statement, Pelosi says, “We have reached an agreement with Republicans on the CR to add nearly $8 billion in desperately needed nutrition assistance for hungry schoolchildren and families. We also increase accountability in the Commodity Credit Corporation, preventing funds for farmers from being misused for a Big Oil bailout.” Senate Agriculture Committee Chairman Pat Roberts, previously critical of Democrats withholding the funds, stated, “Democrats have heard our call, and the calls from farm country, to not ignore rural America when funding the government.” The CR funds the government through December 11.
NCGA Exploring Short Term Demand Growth
The National Corn Growers Association is actively working to rebuild demand by exploring new incremental opportunities for America’s corn farmers. In partnership with AimPoint Research and primary customer segments, NCGA is developing a short-term demand growth plan that sets the table for long-term success. NCGA President Kevin Ross says, “I don’t have to tell you, this year is unlike any other I’ve experienced in my career, which is why we have to think outside the box and deliver quick wins for corn farmers.” The process of evaluating potential market opportunities started with an intelligence briefing and level setting exercise. In the coming weeks, committees will do a deep dive to develop potential solution sets with analysis for each potential market for corn. By December, a full marketing plan by segment will be unveiled. The primary areas of growth potential are ethanol usage domestically and internationally, expanded export markets for corn and co-products, and industrial segments such as biobased plastics.
U.S. Cotton Trust Protocol Launches Nationwide Grower Recruitment Campaign
American cotton growers now can join the U.S. Cotton Trust Protocol, a new standard for verifying the sustainability progress of U.S. cotton. As consumers continue to demand eco-friendly products, enrolling in the Trust Protocol will help growers ensure markets for their cotton by verifiably demonstrating the sustainability record of American cotton in the global market. Protocol President Gary Adams says, “growers will now be able to better document their current sustainability programs using a quantifiable, digital platform and that data is assessed and verified by a third-party audit.” The Protocol helps U.S. growers document and showcase their land management and environmental stewardship practices while helping them achieve continuous improvement related to environmental sustainability measurements. Each participating grower commits to documenting and tracking their progress toward improving soil carbon health while seeking year over year reductions in soil erosion, overall land use, energy consumption and greenhouse gas emissions. By 2025, the Trust Protocol seeks to have more than 50 percent of all U.S. cotton registered as Trust Protocol Cotton.