Grain Worker Strike Ends in Argentina

Argentina’s port and grain union workers have ended a 20-day strike after reaching an agreement on Tuesday, with the settlement coming after the government intervened in the dispute. The move lifts a major work stoppage that had left more than 150 ships stranded at the country’s ports. Argentina is one of the world’s largest suppliers of soybeans, corn, and wheat. The strike has hampered the large flow of grain out of the country, which has weighed down grain markets for several weeks. Failure to unload those grain ships at Argentina’s ports had cost the government approximately 1.9 billion dollars in payments to the ships’ owners. Market traders were concerned that an ongoing strike would cause global end-users to look to the U.S. for soybeans, but the U.S. is already dealing with tight soybean supplies. The possibility of expanding dryness in soybean-growing areas of South America over the next two weeks was adding fuel to a recent rally in soybean prices, which hit a six-year high earlier this week. Analysts at Bower Trading say weather and demand news will likely be the biggest market drivers now that the strike is over.

China will Miss Phase One Buying Deadline

China is a long way from meeting the commitments in its trade deal with the U.S. Farm Progress Dot Com says the latest data shows the Southeast Asian nation has imported just over half the goods it promised to buy from America in the Phase One Trade Agreement. Over the first 11 months of the year, China bought about 50.5 percent of the total 2020 target of $172 billion. That’s according to Bloomberg calculations based on figures from the U.S. Custom’s Administration. The outlook for the trade deal is uncertain as a new administration prepares to take office in Washington, D.C. As of the end of November, data shows that China had bought 54 percent of targeted manufacturing products, 53 percent of agricultural goods, and 31 percent of the energy products. Aggregate soybean imports reached $8.1 billion from January-November, compared with $10.2 billion in 2017. The trade deal says China’s imports of manufactured, agricultural, and energy goods in 2020 were to be no less than $32.9 billion, $12.5 billion, and $18.5 billion on top of 2017’s levels, putting the year’s targets at $110.4 billion, $36.6 billion, and $25.1 billion.

China to Increase Corn Production and Imports

Chinese demand for corn will continue rising, with imports from the U.S. likely to improve in future years. University of Illinois economists say China was self-sufficient in corn production until 2015 and then relied on imports from Ukraine until 2019. The lower corn output over the last year in Ukraine forced China to turn to the U.S. for additional corn supplies. Economists Scott Irwin and Joe Janzen with the University of Illinois say China will likely increase domestic corn production, boost imports from overseas sellers, and dig into its stockpiles this year. “If Ukrainian production returns to normal and the Brazilian corn price is competitive with the U.S., both of which appear likely, U.S. exports of corn to China are likely to be lower in 2021-2022 than what’s projected for the current marketing year,” they say. “Even so, U.S. corn exports to China will likely be higher than in previous years.” The economists say they expect U.S. corn acreage to drop by 1.1 million acres to a total of 90.9 million next year, while soybean acres will rise 7.7 million acres to 90.8 million. Their report says ending stockpiles will have difficulty increasing much in the 2020-2021 marketing year.

European Union, United Kingdom Trade Deal Becomes Official

Boris Johnson, the Prime Minister of Britain, signed the post-Brexit trade deal with the European Union on Wednesday. Reuters says he added his signature to that of European Union leaders after the document was flown from Brussels to London. The trade deal was first announced on December 24, and it sets out the terms of Britain’s new relationship with the EU following its exit from the bloc earlier this year. The new deal will officially take effect on January 1, replacing a transitional arrangement in which EU trade rules applied to Britain. Johnson’s signature came hours after British lawmakers voted overwhelmingly in favor of the legislation implementing the deal. Lawmakers voted 521 to 73 to progress the bill to its final stages. The accord preserves Britain’s zero-tariff and zero-quota access to the European Union’s 450 million consumers, preventing a more chaotic split that had been feared by British businesses.

Food Prices Rise During COVID-19

The USDA says grocery store prices rose 5.6 percent higher in June of 2020 compared with June of last year. Retail prices rose for all food-at-home categories except for fresh fruits. Many of the increases were a result of the coronavirus. COVID-19 disrupted the supply chains of multiple commodities and affected consumers’ food spending patterns. That put upward pressure on wholesale and retail food prices. Closing schools and stay-at-home orders in the spring of 2020 resulted in the dairy industry switching from supplying products for schools and restaurants to supplying products to grocery stores and other food-at-home retailers. Adapting to the change placed upward pressure on retail prices for dairy products, which rose 5.1 percent from June of last year to June 2020. Beef also suffered from supply chain disruptions. Decreased slaughter volumes because of COVID-19 led to a bottleneck in supply, which boosted prices. Retail beef and veal prices in June of 2020 were 25 percent higher than in June 2019. Much of this increase occurred after February of this year. The retail prices of other commodities rose as well, including egg prices were up 12 percent in June of this year compared to June 2019, while pork and poultry prices increased 11.8 and 8.7 percent, respectively.

USDA Extends COVID-19 Flexibilities

USDA’s Risk Management Agency is extending crop insurance flexibilities for producers during COVID-19. Specifically, the relief provided for electronic notifications and signatures that are extended through July 15, 2021. Organic certification, replant certification, and assignment of indemnity is extended through June 30, 2021. “We recognize that American agriculture continues to face challenges due to COVID-19,” says RMA Administrator Martin Barbre. “RMA remains committed to providing the flexibility that supports the health and safety of all parties while also ensuring that the federal crop insurance program continues to serve as a vital risk management tool.” RMA is also allowing Approved Insurance Providers further flexibilities for production reporting, submitting written agreement requests, and obtaining producer signatures for written agreement offers. Producers’ signatures for written agreement offers issued by RMA on or before June 30, 2021, with an expiration date on or before July 30, 2021, will allow producer signatures to get accepted after the expiration date with proper self-certification or documentation. However, all documentation and signatures for these offers must be completed no later than August 2, 2021. For more information, go to the Risk Management Agency’s website or contact your crop insurance agent.

Washington Insider Fed Commits to More Dovish Lineup

Bloomberg is reporting this week that expected changes to the Federal Reserve Bank's interest-rate setting panel likely will make it even less likely to tighten monetary policy in the new year. The report expects this "more dovish view" no matter how much of a jolt the economy gets from the rollout of COVID-19 vaccines.

In the annual rotation of voters on the Federal Open Market Committee, the four regional Fed presidents who receive that privilege in 2021 will be marginally more dovish -- or inclined to favor easy policy -- than the four they replace. The most notable shift comes as Chicago's Charles Evans, one of the most predictably dovish officials, takes the vote held this year by Cleveland's Loretta Mester, a relatively hawkish figure on the panel.

In addition, a new permanent vote now belongs to Christopher Waller, the former research director of the St. Louis Fed who was sworn in as a member of the Fed's Board of Governors on Dec. 18. In one important respect Waller is decidedly dovish: He has long championed the view, more recently embraced by the Fed's leadership, that low unemployment doesn't automatically generate higher inflation.

"If vaccines take hold, the prospect of rate hikes might get a little closer than it feels like today," said Stephen Stanley, chief economist at Amherst Pierpont Securities. "But they're still not likely to be moving rates in 2021."

The Bloomberg report said that the Board, led by Chair Jerome Powell, this year adopted a new monetary policy framework that commits them to a more patient approach to raising rates than at any other time since the early 1970s.

The committee has backed that up in two ways. Its members have declared they won't hike before the labor market has reached their estimate of maximum employment and inflation is on its way to exceeding their 2% target. They also submitted economic projections in December showing 12 of 17 FOMC members didn't expect a single rate hike until at least 2024.

Still, the changes on the FOMC this year could influence the fine-tuning delivered by the Fed's asset-purchasing program, Bloomberg thinks. "The bank is currently buying $120 billion a month worth of Treasuries and mortgage-backed bonds in an effort to suppress longer-term borrowing costs for households and businesses. An unexpected negative turn for the economy could lead to calls to ramp up those purchases."

With vaccines being distributed and a new $900 billion stimulus package just passed by Congress and signed into law by President Donald Trump, the economy may be poised for a robust rebound in the second half of 2021. That could make it more likely the Fed comes under pressure to taper its bond purchases.

"Attitudes toward asset purchases might vary even among the group that is extremely dovish. If vaccines take hold, the prospect of rate hikes might get a little closer than it feels like today, said Stephen Stanley, chief economist at Amherst Pierpont Securities. But they're still not likely to be moving rates in 2021. So, I do think the change in composition matters in that sense, at least at the margin."

Two other factors that could play a role: inflation and financial stability. On the first, inflation is on track to show a sharp year-on-year increase come spring, based purely on price drops triggered by the pandemic last March and April. A burst in economic activity could push that higher, leading to a debate over whether price gains might persist.

Powell has already signaled he'd view sharp price increases in 2021 as "transient." With the new makeup of the committee, it's less likely that he'd provoke votes of dissent at Fed policy meetings by ignoring inflation.

But there could also be new concerns over financial stability if a brightening outlook and super-low rates cause corporations to go on another debt binge and financial markets to react giddily.

"As we shift gears from a delicate phase to one that's more likely to see an acceleration in the pace of the recovery, the Fed's attention will also have to shift and pay closer to attention to these financial stability concerns," said Gregory Daco, chief U.S. economist with Oxford Economics.

So far, the factors slowing access to vaccines seem to be keeping the lid on economic growth and investment but stronger efforts to control the virus are possible during the winter. Clearly, these developments are vitally important to producers and should be watched closely as they emerge, Washington Insider believes. 

Dietary Guidelines Flat on Consuming Sugars, Alcohol

New Dietary Guidelines for Americans, 2020-2025, was released by USDA and the Department of Health and Human Services (HHS) Tuesday. The guidelines now include recommended dietary patterns for infants and toddlers.

The agencies said the new guidelines were "informed by the scientific report developed by the Dietary Guidelines Advisory Committee" along with public input and that from other government agencies. The recommendations "look similar" to prior guidelines, the agencies noted, and despite a general recommendation that adults limit added sugar and alcoholic beverage intake, the guidelines sidestepped making any specifics on those two items.

The agencies said evidence presented to the dietary review committee lacked "a preponderance of evidence" that would support specific numbers on alcohol or added sugar, "as required by law."

As for red meat and processed foods, the guidelines also don't delve significantly into those areas. They do recommend replacing processed or high-fat meats with seafood or beans, peas and lentils to meet protein recommendations. The majority of meat and poultry a person consumes should be fresh, frozen or canned, and in lean forms, according to the guidelines. They suggest items like chicken breast or ground turkey, versus processed meats like ham or other deli meat.

The U.S. Cattlemen's Association tweeted that the guidelines gave scant mention of beef. "In the 164-page 2020 Dietary Guidelines for Americans, 'Beef' is mentioned only five times; 'Meat' is mentioned 87 times; 'Protein' can be found 166 times."

But the National Cattlemen's Beef Association (NCBA) declared the new guidelines recognize the role that lean beef can play in a healthy diet. "Beef is one of Americans' favorite foods, and science consistently shows lean beef can be the cornerstone in a variety of healthy diets," said NCBA President Marty Smith. The group pointed out beef is a source of the nutrient-rich foods recommended in the guidelines.

The mixed reactions to the guidelines are not surprising as some in the food industry are complaining they do not go far enough in recommending dietary changes, and that the agencies set the scientific agenda for the guidelines, not the Dietary Guidelines Advisory Committee.

US Blocks Palm Oil From a Second Malaysia Plantation Due to Human Rights Abuses

The U.S. Customs and Border Patrol (CBP) agency has issued another withhold release order relative to imports of Malaysian palm oil. The Dec. 28 order covers palm oil and palm oil products produced by the Sime Darby Plantation Berhad, due to findings of forced labor abuses.

Sime Darby claims to produce 15% of Malaysia's palm oil, CBP said.

"Palm oil is an ingredient in a lot of products that American consumers buy and use. And I think it's important for manufacturers and importers to be aware of where they're at higher risk of forced labor, and to demand that their suppliers are adhering to protecting human rights of their workers," said Ana Hinojosa, executive director of CBP's Trade Remedy Law Enforcement Directorate.

CBP in September issued a withhold release order for imports of palm oil and palm oil products from FGV Holdings Berhad and its subsidiaries.

Thursday Watch List

Markets

Even though Thursday is New Year's Eve, much of the day will be typical. USDA's weekly export sales report is due out at 7:30 a.m. CST, joined by weekly U.S. jobless claims and an update of the U.S. Drought Monitor. The U.S. Energy Department reports on natural gas storage at 9:30 a.m. U.S. grain and livestock futures close at their normal times Thursday and will resume trading Sunday evening at 7 p.m. CST.

Weather

The secondary system to this week's storm developing over Texas on Thursday will move northeast through the Midwest on Friday. Another round of freezing rain and snow will occur to the north and west of the storm track with significant impacts to transportation and livestock. A boost in soil moisture is also anticipated for the Southern Plains to Midwest and points south and east.

Grain Prices Should Improve in 2021

Global grain stocks will likely be about 1.5 percent higher than last year, reversing the downward trend over the prior few years. Despite the rise in global supplies, USDA forecasts higher corn, wheat, and barley prices than in the 2019-2020 marketing year. The average corn price is projected at four dollars a bushel, compared to $3.85 the prior year. The average wheat price is forecast at $4.80 a bushel, up from $4.60 in the previous marketing year. The average barley price is projected to be $4.75 a bushel, up five cents a bushel from last year. Feed, food, and export markets for corn are all promising for 2021. U.S. corn exports were up 49 percent in 2020 to 67.3 million metric tons, a huge boon to marketers and growers. On the corn import side, demand by the top seven importers was up nine percent this year, compared to a decline in 2019. Imports of corn jumped by 71 percent, which the Capital Press article says, “Definitely tells the story.” China also played a big role in wheat markets, with their imports up 48.7 percent. Demand for wheat by the five biggest importers was up five percent this year, compared to a two percent increase in 2019.

Court Rejects Prop 12 Challenge in California

The North American Meat Institute’s challenge to California’s Prop 12 is unsuccessful once again. The U.S. Court of Appeals in the Ninth Circuit rejected the institute’s challenge to the California 2018 ballot initiative that imposes new standards for animal housing. The court decision confirms an initial judgment in October. California voters approved the Prevention of Cruelty to Farm Animals Act with 63 percent of the vote. The law creates minimum requirements to provide more space for veal calves, breeding pigs, and egg-laying hens. By 2020, the law requires farmers to give hens at least one foot of floor space and says farmers have to eliminate cages by 2022. Farmers must now give veal calves at least 43 square feet, and sows get 24 feet of room. Court challenges by the Meat Institute and other groups have centered around the fact that the law applies to out-of-state producers of meat and eggs who want to sell products in California. Both the federal Department of Justice and 20 states joined the Meat Institute’s challenge, arguing that the law will contribute to higher food prices for consumers.

New Five-Year Dietary Guidelines Released

The USDA and the Health and Human Service Department released the 2020 edition of the Dietary Guidelines for Americans. The Hagstrom Report says the guidelines will be in place for five years. Ag Secretary Sonny Perdue says, “The theme of the guidelines is ‘Make Every Bite Count.’” In a news release, the two agencies say they didn’t deal with the most controversial recommendations from the Dietary Guidelines Advisory Committee, which was a specific limit on alcoholic beverages for men and added sugar intake. The release says, “Steeped in scientific evidence, the key recommendations look similar to those of the past and address two topics that garnered much attention throughout the development of the guidelines – added sugars and alcoholic beverages.” Tom Stenzel, CEO of United Fresh, says, “Today’s reality of facing the COVID-19 pandemic brings greater urgency than ever before. No longer are we just thinking about poor diets leading to long-term chronic disease; now, we see clearly that healthy eating is a critical defense against communicable diseases such as coronavirus.” He says the Dietary Guidelines mostly repeat what we already know about healthy eating.

Corn Export Inspections Rise While Soybeans and Wheat Drop

Inspections of corn for export improved week-to-week, while soybeans and wheat assessments declined. The USDA says the government inspected 993,710 metric tons of corn for overseas delivery in the week ending on December 24. That’s up from the 770,000 metric tons assessed during the previous week and the 408,947 tons examined during the same week in 2019. Soybean inspections dropped to 1.45 million metric tons compared to 2.81 million tons the prior week. That’s better than the 991,801 tons inspected during the same week in 2019. Wheat inspections for offshore delivery also dropped, falling to 303,809 metric tons compared to more than 392,000 tons the prior week. It’s also below the 312,316 metric tons inspected last year at the same time. Since the start of the marketing year on September 1, the government inspected 13.7 million metric tons of corn for export. That’s well above the 8.05 million tons assessed during the same time in 2019. Soybean inspections since the first of September totaled 36.5 million metric tons, up from the 20.8 million tons examined during the same week last year.

Cattle Documentary Series Begins in January

A five-part mini-documentary series on raising cattle in America begins on Sunday, January third, and a new episode will debut every Sunday night in January. The series is called “A Rare Breed: Legacies of Excellence,” and it will launch on the Certified Angus Beef Brand Cattlemen Connection YouTube channel. The new segments premiere at 6 p.m. central time on Sunday nights. Interested people can follow along as the short videos introduce registered cattle breeders, commercial cattlemen, and cattle feeders from Oregon to Texas. It’s a chance to glimpse a little of their family life and cattle philosophy, as well as get new ideas for your operations. “As we visit with some good cattlemen and women across the country, we often think ‘I wish everyone could see this or hear that,’” says Miranda Reiman, director of producer communications for the Brand. “We get to know their history, their cattle, and their drive, and we hope others will find them to be as entertaining and inspiring as we did.” To watch the series, people can follow the CAB Cattlemen Connection channels on Facebook, Instagram, or YouTube, or go to www.CABcattle.com. Families from Kansas, Idaho, Texas, Nebraska, and Oregon make up the January lineup.

Brazil Crop Regions Remaining Dry into Early January

Southern Brazil saw some moisture over the Christmas weekend, but drier weather is returning to the region as 2020 winds down. An Agriculture Dot Com article says the drier-than-normal conditions will stretch into Uruguay and eastern Argentina through January 3. Expected weather concerns will likely continue to put upward pressure on corn and soybean prices. A strong La Nina will remain in place and will continue in the Southern Hemisphere through next summer. During those La Nina events, the Brazilian monsoon season tends to be delayed, which can lead to suboptimal soil moisture for the country’s more important crop-growing regions. The wetter weather appears to be delayed so far. However, the influence of La Nina often decreases during the month of January as smaller-scale atmospheric processes increase their influence over the precipitation patterns in Brazil. That could lead to an increase in moisture heading into the late stages of January.

Washington Insider Cleaner Energy Growth

Politico is reporting this week that president-elect Joe Biden will enter the White House next month with a "shift already underway that's likely to generate momentum for his plan to start to wean the country off fossil fuels."

"The U.S. for four years attempted to go in the opposite direction," said Mark Jones, a political science fellow at Rice University in Houston. "Where we find ourselves in 2021, is a much more stringent and demanding request for addressing climate change. Everyone views the future as renewables, not oil and natural gas."

The renewable energy sector has been cheering this week about the clean energy incentives included in the omnibus Congress passed. And it's even more optimistic about the prospects under a Biden administration, given Biden's plans for a $2 trillion effort to put the country on a path toward eliminating greenhouse gases from the power grid by 2035 and for the overall economy by 2050.

"The realization -- the market's realization, the financial community's realization and the customer's realization -- that we are moving toward the clean energy economy has already happened," said Abigail Ross Hopper, CEO of the Solar Energy Industries Association, a solar trade group. "But the pace of that transition is still what's up for grabs."

Biden is expected to speed the adoption of electric vehicles and boost power line transmission networks that will open up new opportunities for renewable power generators, Politico said. He's pledged to invest $400 billion in clean energy development and research over 10 years and work with states to deploy more than 500,000 new public electric vehicle charging spots by the end of 2030.

Renewables are now on track to surpass coal as the largest source of electricity in the world by 2025, according to the International Energy Agency. And in the U.S., the latest outlook from the Energy Department is bullish on wind and solar, which along with hydropower and other renewables will surpass 20 percent of U.S. electricity generation next year -- about the same level as coal or nuclear power. EIA is projecting the U.S. electric power sector will add a record 23 gigawatts of new wind capacity this year -- almost double the previous record -- while utility-scale solar capacity to rise by 12.8 GW in 2020, enough to power millions of homes.

There also is bad news for fossil fuels. U.S. crude oil production, which climbed to a record at more than 13 million barrels a day before the pandemic sapped fuel demand has slipped to 11 million barrels a day. Natural gas production, which has doubled since the spread of fracking began in earnest in 2005, is expected to post a modest decline amid weak prices caused by a glut of supply. Those weak prices for natural gas and crude oil, which briefly turned negative as the pandemic took hold in April, have forced 45 oil and gas companies to file for bankruptcy through the first 11 months of 2020, Politico says.

The outlook for coal is even worse. The energy source that produced more than half the U.S. electricity little more than a decade ago has seen its share of the power market drop by almost a quarter recently despite administration promises to revive the industry. Valuations for coal producers have declined sharply and the leading company, Peabody Energy, is struggling to avoid its second bankruptcy filing in five years.

Still, renewable energy won't supplant fossil fuels anytime soon and renewables remain a small portion of the overall energy market even with the rapid growth, said Erik Olson, climate and energy analyst at the Breakthrough Institute. "You're really seeing right now the early wave of renewables starting to reshape the power sector," he said.

The dramatic fall in fuel demand amid the COVID-19 pandemic accelerated the debt-laden oil and gas industry's need to shrink and companies like Exxon Mobil, which saw its market value cut by as much as half earlier this year, have been forced to lay off tens of thousands of employees and ramp down their spending as a bulwark against a flood of red ink.

Now with a new White House promising to hand down stricter regulations on capturing the heat-trapping gas methane and a ban on new permits to drill on federal land, oil companies will either have to spend money to adapt or, in the case of smaller businesses that don't have the money or expertise to do so, to look for other options.

Politico expects that the fossil fuel industry is preparing to "negotiate the edges off of Biden's plans or to start looking for ways to adapt to the new normal."

Changes in systems as large as the energy sector tend to be slower than expected. These changes often include many trends, including those that are controversial and bitterly divisive with far-reaching implications. These are battles producers should watch closely as they emerge, Washington Insider believes. 

CFAP 2 Payments at $12.96 Billion

Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) effort now are at $12.96 billion as of Dec. 27.

Within that amount are acreage-based payments at $6.16 billion, livestock payments at $3.39 billion, sales commodities at $2.19 billion, dairy at $1.17 billion, and eggs/broilers at $52.1 million.

Iowa continues to lead all states at $1.15 billion, followed by California ($987.3 million), Nebraska ($838.5 million), Minnesota ($814.5 million), and Illinois ($789.0 million).

Already attention is shifting to what is expected to be CFAP 3 as part of the latest COVID aid package

Court Blocks H-2A Wage Changes, Freeze

Labor and farmworker groups won an injunction blocking the Department of Labor from freezing H-2A guestworkers' adverse effect wage rates (AEWRs) for 2021 and 2022.

U.S. District Judge Dale Drozd issued the injunction last week, saying the plaintiffs in the suit were likely to prevail on the merits of the underlying case. The United Farm Workers and the UFW Foundation contend DOL's rule runs afoul of multiple aspects of the Administrative Procedures Act, including notice and comment requirements.

The DOL ruling would freeze H-2A wages at 2020 levels and then adjust future adverse effect rates based on the generic employment cost index rather than USDA's Farm Labor Survey.

An earlier ruling by Drozd issued an injunction prohibiting USDA from cancelling the Farm Labor Survey, which it had moved to do after DOL gave notice of its H-2A wage rulemaking. The latest ruling blocked the wage freeze aspect of the DOL rule saying it is likely to depress farmworker wages and cause them irreparable harm.

DOL's own estimates expected the rule to reduce wages paid to H-2A guestworkers by just shy of $200 million over the next two years had it been allowed to take effect. DOL is now required to publish 2021 adverse wage rates, which are expected sometime after USDA publishes updated survey data on Feb. 11 -- a delay from its typical release date of Nov. 30 due of the logistics involved in resuming the report.

The judge gave DOL and plaintiffs 14 days to submit proposed orders laying out deadlines for setting the 2021 AEWRs.

Wednesday Watch List

 Markets

Wednesday has a light report schedule with November pending U.S. home sales due out at 9 a.m. CST, followed by the U.S. Energy Department's weekly report of energy inventories at 9:30 a.m. Traders remain interested in South America's weather and any export news that emerges.

Weather

A system will continue to move eastward across the northern Midwest Wednesday. The front to the system will continue to be active, producing showers from the Ohio Valley southwest to Texas as we await the formation of a new low-pressure center in Texas on Thursday. Moderate precipitation has and will continue to fill soils and provide protective snow cover in the winter wheat areas. Travel and transport hazards and impacts to feedlots are also noted.

Trump Signs Appropriations/COVID Relief Bill

After threatening to veto it earlier, President Trump signed the combined fiscal year 2021 omnibus appropriations and COVID-19 relief bill on Sunday. Pro Farmer says Trump’s signature means more aid is coming to farmers, and a 15 percent increase in Supplemental Nutrition Assistance benefits will take place over the next sixth months. The signing also eliminates a possible government shutdown. Trump is demanding changes in the bill, but Congress is not required to follow that direction. “I will sign the omnibus and COVID package with a strong message that makes clear to Congress that wasteful items need to get removed,” Trump says in a statement. “I will send back a redlined version, item by item, accompanied by the formal rescission request to Congress insisting that those funds get removed from the bill.” The bill includes extensions for tax incentives for biofuels and renewable biofuels, benefits for rural healthcare providers, and a two-year water resources authorization bill that may help speed up waterway construction projects. The bill also provides new help for contract livestock growers, hog producers who had to depopulate herds, cotton processors, biofuel producers, and the dairy industry.

Federal Judge Rejects USDA Changes to H-2A Program

A federal court in California issued a preliminary injunction against the Labor Department’s decision to freeze farm workers’ wages for those that use the H-2A Guestworker Program. Fruit and Nut Grower News says the freeze would effectively lower the wages of several hundred thousand guest farm workers employed by U.S. farmers. A preliminary injunction was issued in federal court in Fresno, California, in a lawsuit filed by the United Farm Workers and the UFW Foundation, with both groups represented by Farm worker Justice. The new regulation was to take effect on December 21 and regulate wages beginning in January. A Farmworker news release says the Labor Department estimated that H-2A guest workers would lose wages totaling $57 million in 2021, $139 million in 2022, and an average of $170 million annually over ten years. The DOL says that U.S. farm workers not under the H-2A program will also lose wages. The H-2A program has been expanding in recent years. The Labor Department approved more than 275,000 visas under the program in the fiscal year 2020. The State Department also issued more than 204,000 H-2A visas in 2019.

Meat and Poultry Worker COVID Infection Rates Lower than General Population

A new analysis of independent data for November shows that reported new COVID-19 infection rates among meat and poultry workers were more than eight times lower than the general population. Data from the Food and Environment Reporting Network says the meat and poultry sector reported an average of 5.57 new cases per 10,000 workers daily in November. Infection rates among meat and poultry workers have declined steeply in the last six months while surging across the U.S. The New York Times reports that during the same period, the average new case rate for the U.S. population was 45.36 cases per 100,000 people per day. The analysis follows a Centers for Disease Control decision this month to prioritize vaccinating frontline meat and poultry workers. Meat Institute President and CEO Julie Anna Potts says, “This new analysis is encouraging evidence that the more than $1.5 billion in comprehensive protections implemented since the spring have reversed the pandemic’s impact on the selfless men and women who keep America’s refrigerators full and the farm economy working throughout COVID-19.”

Ag Export Destinations Shift Over Previous 25 Years

The U.S. is the world’s second-largest agricultural trader after the European Union. U.S. agricultural exports grew significantly over the last 25 years, from $46.1 billion in 1994 to $126.7 billion in 2019. It’s no surprise that Canada and Mexico are two of the top destinations. The elimination of agricultural trade barriers through the 1994 North American Free Trade Agreement, which was then superseded by the U.S.-Mexico- Canada Agreement in July 2020, almost quadrupled exports by value to Canada and Mexico. Coinciding policy developments, rising household incomes, and changing trade policies in developing East and Southeast Asia are driving U.S. export growth, especially for China. The Chinese share of U.S. agricultural exports more than quadrupled from three percent during 1994-2000 to 14 percent between 2010 and 2019. Meanwhile, there’s been a sharp decline in the share of American exports going to Europe and higher-income countries in East Asia, such as Japan. Of the $136.7 billion in 2019 exports, 29 percent went to East Asia and 29 percent to Mexico and Canada.

Groups Praise WRDA Passage in COVID Relief Bill

The fiscal year appropriations bill that President Trump signed includes a reauthorization of the Water Resources Development Act. The Hagstrom Report says It funds the Army Corps of Engineers civil works program that builds and maintains the ports and inland waterways that are vital to the agriculture industry. Senator Chuck Grassley of Iowa says, “it’s important that Congress pass a Water Resources Development Act every two years. It helps communities move forward with projects critical for things like flood control, navigation, ports, locks and dams, and more.” Bobby Frederick of the National Grain and Feed Association says, “We view WRDA as an opportunity to enhance U.S. inland waterways and port infrastructure.” Waterways Council President and CEO Tracy Zea says, “In a difficult COVID-19 environment, passing WRDA is a significant achievement for modernizing the inland waterway systems, potentially providing more than $1 billion in additional construction funds over the next ten years.” Corn Refiners Association President John Bode says, “WRDA is a signature achievement in maintaining global competitiveness for American agricultural exports, and the millions of American jobs they support.”

EU Approves Post-Brexit Deal

European Union ambassadors approved a provisional application of the E.U.-United Kingdom future relations agreement, paving the way for implementing the deal on January 1. A spokesperson for the German Presidency of the Council of the E.U. tweeted that, “E.U. Ambassadors have unanimously approved the provisional application of the E.U.-U.K. Trade and Cooperation Agreement as of January 1, 2021.” Politico says while the go-ahead from the ambassadors is an important step, official approval will likely come on Tuesday (today). Some countries like Sweden still need to consult their national parliament. Final adoption of the trade text will be done via a written procedure, which means that countries send a note of consent to the E.U. Council. Brussels and London clinched the U.K.-E.U. trade deal on December 24. The European Commission presented the treaty as an E.U.-only agreement with a limited provisional application, which means the E.U. can provisionally implement the agreement with the approval of E.U. countries, but without the consent of the European Parliament. The British Parliament has been called back for December 30 to ratify the deal, which is highly likely to pass.

Tuesday Watch List

 Markets

Traders continue to monitor the latest weather forecasts for South America and pay attention to any export news that develops. There are no official reports due out Tuesday.

Weather

A storm system will continue to bring moderate to locally heavy precipitation to the Plains and Midwest on Tuesday. Moderate snow is expected in a widespread area from Nebraska to Wisconsin and points northward while a zone of freezing rain is expected over Kansas and southeast Nebraska to northern Illinois. Livestock stress and transport hazards are the main threats with this system.

Washington Insider: Food Safety News on Vilsack Nomination

In a substantially supportive commentary last week, Food Safety News -- which very closely follows safety concerns at USDA -- wrote that President-elect Biden's selection of Tom Vilsack brings focus on a candidate with a proven food safety record "filled with accomplishments in spite of a ding or two."

The report noted that Vilsack already is one of the longest serving cabinet members to work as Secretary of Agriculture, so the request that he serve again in that capacity opens the former USDA boss to considerable scrutiny, including his food safety record.

Food safety is one of USDA's critical missions, FSN notes with its Food Safety and Inspection Service charged with providing inspections for meat and poultry processing along with production oversight for some egg and some fish products. The agency has a budget of about $1 billion a year for food safety that covers about 10,000 employees, most assigned to inspect private establishments subject to federal regulation.

Before his first appointment as secretary of agriculture, Vilsack was the governor of Iowa, an office which included food safety responsibilities such as restaurant inspections. FSN is moderately critical of one Vilsack decision to allow Taylor's restaurant in Marshalltown, IA, to use a "cooking vessel" to produce Maid-Rite "loose meat" sandwiches which have been an Iowa favorite since the 1920s.

The original cooking process used a vessel with a design flaw that allowed some cross-contamination. When Vilsack left the governor's office, the state withdrew the waiver and Taylor's Maid-Rite received red violations on its post-Vilsack inspections. It took the state several years to resolve that food safety situation, FSN says.

However, FSN gave Vilsack mostly high marks on other decisions. For example, he helped select a USDA Under Secretary for Food Safety -- the highest-level food safety job in the federal government. Dr. Elisabeth Hagen was confirmed in that position by the U.S. Senate in August 2010 and accounted for significant accomplishments -- Vilsack certainly shares in that credit, FSN says. Most notable was Hagen's work to bring six additional strains of E. coli under USDA regulation and to require mechanically tenderized beef labeling. She also updated Salmonella performance standards for poultry and put forward the first-ever standard for Campylobacter.

FSN noted that when Hagen left USDA for the private sector in December 2013, the administration did not formalize a replacement. Brian Ronholm, deputy undersecretary under Hagan, continued in that role and FSIS Administrator Al Almanza was named as a deputy undersecretary.

At the time, some top FSIS managers criticized the decision not to provide a "confirmed Under Secretary for Food Safety, FSN says. But it also notes that "Vilsack was credited as being fully engaged in food safety and that he provided critical leadership for significant food safety updates." Updated included tighter regulatory requirements and enhanced consumer engagement about safe food handling practices. FSN says there also were operational changes that helped keep unsafe food out of commerce, including the implementation of advanced testing methods and a greater focus on mislabeling.

In 2016, USDA issued the first-ever pathogen reduction standards for poultry parts, including chicken breasts and wings. While performance standards for whole chickens had been in place since 1996, these standards did not address the higher Salmonella levels that can occur as poultry is processed into parts commonly sold separately -- which represents 80 percent of the chicken available for purchase. Establishing this new standard for chicken parts was credited with reducing exposure to Salmonella and Campylobacter and lowering the potential for foodborne illness in the United States.

In 2012, USDA required that meat and poultry companies hold all products undergoing laboratory analysis until microbial and chemical tests for harmful hazards are completed. Implementing this test and hold policy has prevented a number of recalls and reduced significantly consumer exposure to unsafe meat products.

Vilsack's food safety record also includes upgraded technology and internal tracking and reporting systems, strengthening collaborations between agencies, and introducing consumer-facing tools to help protect families from foodborne illness.

"People should not confuse his understated approach as having a lack of knowledge or compassion related to food safety issued," says one national food safety expert. "His previous experience at USDA will give him a significant head start and allow him to apply lessons learned from his previous tenure toward resolving critical pending issues, including the line speed."

Vilsack is well regarded across much of agriculture but is less popular among several groups with increasingly important social issues -- so, there likely will be at least some excitement at his confirmation hearings -- which producers should watch closely, Washington Insider believes. 

Northeast, Midwest Would Lose Seats in Latest Census Estimate

New York would lose two congressional seats, according to population estimates released recently by the Census Bureau, making the state the biggest loser in the next apportionment if the official count comes out the same.

Using the estimate to apportion the 435 seats in the House, seven states would gain congressional seats while nine states would lose them. California would lose a congressional seat for the first time in its history, according to the estimate. The other states losing seats: Rhode Island, New York, Pennsylvania, West Virginia, Ohio, Michigan, Illinois and Minnesota.

Texas would gain three seats and Florida two. North Carolina, Colorado, Montana, Arizona and Oregon would also gain seats.

Alabama would have the slimmest margin of any state, holding onto its 7th congressional seat by about 6,000 people. Apportionment under the same estimate produced last year had Alabama losing that seat.

Biden Team Reaches Out to Biofuels Interests

The transition team for the incoming Biden administration has held calls with biofuel groups, discussing issues such as a low-carbon climate vision, according to Reuters.

The conversations with biofuel trade groups, biofuels company POET, ag groups and Biden's choice to head EPA, Michael Regan, have centered mostly on boosting access to fuels with higher ethanol blends.

The discussions also included the testy issue of compliance with the Renewable Fuel Standard (RFS).

Biofuel interests have expressed optimism at the incoming Biden administration in the wake of the big increase in exemptions granted by the Trump administration for small refiners relative to their RFS obligations. However, court actions have limited those exemptions and are expected to further temper them in the future.

China Corn Imports Hit All-Time High

China imported a record amount of corn in November, giving rise to optimism that prices may be getting into their longest rally since 1988. Pro Farmer says China bought 12 times more corn last month than in 2019. Customs data shows that for the first 11 months of 2020, imports more than doubled to nine million tons, passing China’s World Trade Organization commitments of 7.2 million tons for the first time in history. The surge in corn imports pushed the overall Chinese grain prices higher. An official with the Chinese ag ministry says the Southeast Asian country has boosted imports of other feed grains like barley and DDGs to help narrow the supply gap. Higher prices are likely to give farmers the incentive to increase their corn planting next year, ensuring farmers have basic self-sufficiency. China imported 1.3 million tons of corn in November, up 1,130 percent from November of 2019, while imports for the year totaled 9.04 million tons through November, up 122.7 percent from the same time last year.

Taiwan Approves U.S. Pork Imports with Ractopamine

Taiwan’s parliament approved a measure that will allow U.S. pork imports containing ractopamine, a leanness-enhancing additive. Reuters says the approval came despite objections from KMT, the main opposition party, which says it creates a health risk for the Taiwanese people. The country’s president decided in August that Taiwan would allow imports of U.S. pork with the additive, which is banned in the European Union and China, and that decision stirred up Taiwan politics. The KMT party has staged loud protests against the move, even throwing pig entrails in parliament last month to protest the approval. The government says no one in the country will be forced to eat the pork, and the move means Taiwan will bring its import policy in line with international norms. Major Taiwan companies are already saying they won’t sell pork made with ractopamine. Taiwan officials are hopeful that easing barriers to U.S. pork imports will make it easier to establish a free trade deal with America. Pork is Taiwan’s protein of choice, with the average per capita consumption around 40 kilograms. 

Holiday Ham Supplies Stretching a Bit Thin

It’s the time of year when people buy a lot of holiday hams, and some pork products are getting stretched thinner. The Wall Street Journal says it’s due in part to COVID-19 precautions challenging meatpacker workforces to keep up with demand. Some meat suppliers are placing limits on how much pork supermarkets can order, leading to less variety and fewer pork promotions in the days ahead of Christmas. COVID has led to some of the larger processors like Smithfield Foods and JBS providing paid leave for workers who are considered higher risk because of pre-existing conditions or their older age demographic. Some meat companies have hired extra workers to help offset the absences. In another concession to COVID-19 worries, some of the meat plants are spacing workers farther apart, which has slowed the processing speeds in their operations. Grocery companies report that bacon, dinner sausages, and lunch meat have also been in tighter supply during the holidays.

U.S. Hog Inventory Drops One Percent

As of December 1, U.S. farms contained 77.5 million hogs and pigs, down one percent from December of 2019, and down one percent from September of 2020. Those numbers were published last week by the USDA’s National Agricultural Statistics Service. Of the 77.5 million hogs and pigs, 71.2 million were market hogs, while 6.28 million were kept for breeding. Between September and November of this year, 35 million pigs were weaned on U.S. Farms, down one percent from the same period last year, while U.S. hog producers weaned an average of 11.05 pigs per litter. Hog producers intend to have 3.12 million sows farrow between December of 2020 and February 2021, and 3.12 million sows farrow between March and May of next year. Iowa producers held the largest inventory among the states at 24.8 million head. Minnesota was next with 9.4 million head, and North Carolina finished third with nine million head. To get the most accurate measurement possible of the U.S. swine industry, NASS surveyed more than 6,000 producers across the nation through the first half of December.

NPPC: Anti-Meat Group Shows “True Colors”

Last week, the head of an anti-meat extremist group posed as the CEO of a major pork producer during a national television interview. The National Pork Producers Council says the conversation contained “outrageous and false claims” about the U.S. pork industry and the challenges it faced during COVID-19. NPPC President Howard “A.V.” Roth (Rowth) had a sharp response to the interview. “Taking advantage of this black-swan event to drive an anti-meat, anti-livestock agriculture agenda is reprehensible,” Roth says. “These radical extremist groups who typically work shrouded in secrecy and false identities, frequently by breaking the law, are only able to propagate their false narrative by fooling journalists and posing as credible sources.” Despite the enormous challenges of 2020, Roth says hundreds of thousands of committed farmers and others employed in pork production remain dedicated to keeping Americans and consumers around the world supplied with affordable, nutritious protein. “COVID-19 has caused record numbers of Americans to be food insecure,” he adds. “U.S. pork producers are proud to help feed those in need, and these extremist groups should be ashamed of their stunts. Apparently, there’s no low point for their actions.” 

Popular Organic Weed Killer Under Investigation

Regulators in Washington, Oregon, and California issued “stop-use” orders for a popular herbicide that’s been used on a lot of organic crops. Questions are arising about whether or not Agro Gold WS contains synthetic herbicides like Glyphosate or Diquat. As more questions come up about the product, the state of Idaho is also investigating, and an Environmental Protection Agency spokesperson says the agency is “looking at it more closely.” The product isn’t labeled as a conventional herbicide, which could have endangered farmworkers. They may not have worn enough protective gear or taken enough precautions when mixing or applying the chemicals because they didn’t know what might actually be in the product. Glyphosate is the key ingredient in Roundup. The Florida-based company Agro Research International says it doesn’t add chemicals to the organic product. Their CEO tells the Northwest News Network that he’s fighting back against the investigations. He says the co-pack of two products, Agro Gold and Weed Slayer, has been working well for many years, and they “don’t use chemicals.” He says he’s not too worried about the ongoing investigations, noting that, “If an intruder comes to your house and you have the ammunition to defend yourself, you shouldn’t worry.”

Washington Insider - Implications of Brexit

The New York Times is reporting this week that "it took 11 grueling months for negotiators from Britain and the European Union to hammer out the post-Brexit trade deal. But in many respects, the deal is already four and a half years out of date."

The world has changed radically since June 2016, when a narrow majority of people in Britain voted to leave the EU, the Times says.

The buccaneers of Brexit promised to create a "Global Britain."

They envisioned an agile, independent Britain, one free to develop profitable, next-generation industries such as artificial intelligence and cut its own trade deals with the United States, China and others. It was an alluring sales pitch.

That was before the anti-immigrant battles and the anti-globalist-fueled rise of President Trump and other populist leaders who erected barriers to trade. It also was before the coronavirus pandemic exposed the vulnerabilities of far-flung supply chains fueling calls to bring strategic industries back home and throwing globalism into retreat.

In the anxious dawn of 2021, the buccaneers seem out of fashion, the Times says. The world is now dominated by three gargantuan economic blocs—the United States, China and the European Union. Britain has finalized its divorce from one of them, leaving it isolated at a time when the path forward seems more perilous than it once did.

"The whole 'Global Britain' model doesn't reflect the more protectionist, nationalistic world we're living in," said Thomas Wright, the director of the Center on the United States and Europe at the Brookings Institution. "Becoming a global free trader in 2016 is a bit like turning into a communist in 1989. It's bad timing."

As Prime Minister Boris Johnson leads Britain into a post-Brexit future, he also risks being out of step politically.

The Brexit agreement with the EU comes at the very moment that President-elect Joseph Biden is replacing Trump's "America First" credo with a message of mending alliances and collaborating to tackle issues such as global health and climate change.

While the Brexit deal averts tariffs and quotas on goods crossing the English Channel, it is at heart about disentangling neighbors who had become deeply integrated over four decades. That estrangement, analysts say, is bound to weaken ties between the two sides in other areas, such as security and diplomacy.

"Biden wants to see alliances and multilateralism and cooperation and Brexit runs completely against that," said Mujtaba Rahman, an analyst at the Eurasia Group.

Trump cheered Britain's drive to sever itself from the European Union and promised to negotiate a trade agreement with Johnson, whom he cultivated personally. But Biden opposed Brexit and has ruled out negotiating new trade agreements until the United States improves its own competitive position. That nullifies one of the prime selling points of Brexit.

Johnson has pivoted by highlighting other ways that Britain can work with the United States such as reinforcing NATO and playing host at a UN climate summit next year.

Britain has also promoted itself as a champion of democratic values in places like Hong Kong, but in a less hospitable world, it may not find many allies for that kind of work.

"Who are the obvious partners for them?" Wright said. "Four years ago, they could have said Brazil, but Brazil is now run by a populist." There also are limits to how muscular a partner Britain can be in the confrontation with autocratic states like China and Russia.

Britain once hoped its free-agent status would allow a thriving commercial relationship with Beijing. But under pressure from Trump on the role of the Chinese telecommunications giant Huawei in 5G networks, Britain has largely abandoned its cultivation of China, falling in line with the United States' more antagonistic position.

The pandemic has forced Brussels to reconsider policies it once shunned, the Times says.

Liberating itself from the constraints of Brussels had been one of the biggest attractions of Brexit. Instead, Britain faces a much larger competitor that seems bent, like Britain itself, on transforming its economies with digital and "green" technology -- and more open to using state aid to do so.

Another irony of Brexit is that Europe, alienated by Trump's unilateral policies, has begun echoing some of the language used by Brexiteers in 2016. President Emmanuel Macron of France and others have spoken of the need for "European sovereignty" in the face of a less reliable United States. Mr. Johnson made reclaiming British sovereignty the leitmotif of his negotiations with Brussels.

Britain's independence also allows it the chance to be experimental in its relations with other countries. Mr. Wright, for example, said the Biden administration might be interested in negotiating a different kind of economic understanding with Britain than an old-fashioned free trade agreement.

Nevertheless, "the world of June 2016 is not the world of today," Wright said. "They know that as well, deep down."

Clearly, the evolving Biden policies for trade will be complex and important and should be watched closely by producers as they evolve, Washington Insider believes. 

Ham, Some Pork Product Supplies Being Stretched By COVID

Supplies of holiday hams and some pork products are being stretched as COVID-19 precautions challenge meatpackers' workforces, according to a Wall Street Journal report. Some meat suppliers are placing limits on how much pork supermarkets can order, grocers said, leading to less variety and fewer pork promotions ahead of Christmas.

The pandemic has prompted some major processors, including Smithfield Foods Inc. and JBS USA Holdings, to provide paid leave for workers considered higher risk due to their older age or pre-existing conditions, the companies have said. Some meat companies have made additional hires to offset higher-risk workers' absences.

To space workers farther apart, some meat plants have slowed processing speeds. Bacon, dinner sausages and lunch meat have also been in tight supply, grocery companies said.

Taiwan Clears US Pork Produced With Ractopamine

Taiwan's parliament approved the import of pork from hogs produced using the feed additive ractopamine, despite efforts to halt the action by the main opposition party, the Kuomintang (KMT).

KMT lawmakers denounced the action, declaring that U.S. pork produced with the feed additive was "poison."

The Taiwanese government has taken the position that no one will be forced to eat the pork and the action will bring Taiwan in line with international norms. There are a mix of countries that allow and those that ban imports of pork from hogs raised on ractopamine.

Premier Su Tseng-chang told reporters the government would protect the health of citizens. The action is also seen as an effort by Taiwan to secure a free trade deal with the U.S. which has complained about Taiwan's ban on pork produced with ractopamine.

Monday Watch List

 Markets

There are no official economic reports for Monday December 28. Traders will keep an eye on the latest weather forecasts, especially for South America and any export news that develops, especially with China. U.S. grain futures resume trading Sunday evening at 7 p.m. CST, Dec. 27.

Weather

A system developing in the Four Corners region will start to produce showers into the central and Southern Plains later in the day, including snow from Colorado to Nebraska which could be moderate as we head into Tuesday. Moderate rain showers will develop further south. All precipitation will boost soil moisture, which remains below normal for much of the region.

Trump May Not Sign the Stimulus Bill

Tuesday night, President Trump asked Congress to make some changes to the newly passed $900 billion stimulus bill passed by Congress on Monday. The Washington Post says he describes it as “a disgrace” and suggested he wouldn’t immediately sign off on it without some changes. In a Twitter video, the president calls on Congress to increase the “ridiculously-low” $600 stimulus checks to $2,000. He also outlines a list of provisions in the overall package that he calls “wasteful spending and much more.” He’s asking Congress to “send me a suitable bill, or else the next administration will have to deliver a COVID relief package, and maybe that administration will be me.” If he doesn’t sign the bill, the government shuts down on December 29, the aid money is frozen, and even the two Senate seats up for grabs in Georgia could be upended. House Speaker Nancy Pelosi says that Democrats will move quickly to advance the $2,000 stimulus checks. Senate Minority Leader Chuck Schumer says he supports the idea of larger stimulus checks and blamed Senate Republicans for preventing them from being included in the bill.

Poultry Industry Facing a Tough Year in 2021

Like many sectors of agriculture in 2020, COVID-19 caused a big disruption to the poultry industry. Unfortunately, RaboResearch says the global poultry industry will face even more challenges in 2021, especially in the first half of the year. That’s according to new data in the RaboResearch 2021 Poultry Quarterly. COVID-19 will place continuing pressure on foodservice and trade, and the consequent slow economic growth will lead to more price-driven market conditions. As those market fundamentals appear challenging for 2021, a RaboResearch report says the poultry industry should prepare for a tough year. “Looking forward, we see four main challenges for the global poultry industry,” says Nan-Dirk Mulder, senior animal protein analyst with Rabobank and the lead author of the report. “The challenges include ongoing impacts of COVID-19 on the markets, high and volatile feed prices, China’s African Swine Fever recovery, and the northern hemisphere avian influenza crisis.” Falling demand in China and Vietnam will push traders to find other markets and depress global markets during the first half of 2021. Better control of COVID-19 should lead to a gradual recovery of foodservice markets later next year.

Grassley Wants Tax Cuts and Jobs Act Permanent

December 22 was the third anniversary of President Trump signing the Tax Cuts and Job Act. Senate Finance Committee Chair Chuck Grassley is asking President-elect Joe Biden to commit to making permanent many of those tax provisions that helped create the strongest economy in generations and are helping to rebuild the economy while Americans get back to work after COVID-19. “President-elect Biden ran on rebuilding the nation’s economy that’s been devastated by COVID-19,” he says. “Families, small businesses, and the American economy can’t recover, rehire, or grow to their full potential with higher taxes on the horizon. It’s now Biden’s responsibility to make sure it doesn’t happen on his watch.” Grassley wants to see the lower, more affordable temporary tax rates become permanent in 2021. He says Congress just made permanent several temporary tax policies and provided certainty for businesses to grow and hire. “Many of the temporary provisions expire during the next administration,” Grassley adds. “Higher taxes would only make things worse. U.S. businesses of all sizes, including farms, should know they won’t face a historic tax hike, so they’ll have the certainty they need to rehire and reinvest in their workforce.”

Commodity Classic is Coming Straight to the Farm in March

Like a lot of other agricultural events, the Commodity Classic will be going virtual in 2021. Due to the restrictions brought on by COVID-19, America’s largest farmer-led, farmer-focused agricultural and educational experience will be coming right to farms across the country in a digital format March 2-5, 2021. Commodity Classic organizers say, “While we’re all disappointed that we won’t be together in San Antonio this year, the 2021 Special Edition will continue to provide the education and experiences you’ve come to expect from the Commodity Classic.” Those events include educational sessions, the top thought leaders in agriculture, new technology and innovations, online networking opportunities with fellow farmers, and much more. Interested people can keep up with updates regarding registration, the schedule, speakers, and educational sessions by signing up for email updates at www.commodityclassic.com. The Commodity Classic, established in 1996, is a joint presentation of the American Soybean Association, the National Corn Growers Association, National Sorghum Growers, and the Association of Equipment Manufacturers. The 2022 edition will move to New Orleans, Louisiana, March 10-12.

IBM to Help USDA Modernize Conservation Program

IBM says it’s one of the five businesses selected by the USDA’s Farm Production and Conservation Mission Area to provide support for USDA’s digital modernization efforts. Four other businesses were also selected to receive large business awards, with the combined worth of those five awards at $620 million paid out for work that’ll be completed over the next five years. More than 30 vendors competed for the five awards. IBM will help work with the Mission Area to help modernize legacy applications that support the conservation programs administered by the Natural Resources Conservation Service and the Farm Service Agency. “Technology has incredible potential to transform the way governments serve citizens and accomplish critical missions,” says Jay Bellissimo, General Manager of IBM’s U.S. Public Sector and Federal Market. “Our team is ready to modernize applications to help FPAC deliver modernized systems that assist the conservationists in helping farmers and ranchers reduce soil erosion, enhance water supplies, improve water quality, increase wildlife habitat, and reduce damage caused by natural disasters.” The award is a part of the more than 90-year working history between IBM and USDA. The two have worked on other projects with FPAC, as well as the forest service, the Food Safety and Inspection Service, and the Agricultural Marketing Service.

John Deere, FFA Partner to Build Next Generation of Leadership

For 77 years, John Deere and the National FFA Organization have worked to find the next generation of leaders and strengthen the agriculture industry. 2020 is a year that’s come with many challenges, but John Deere says its commitment to both FFA and agricultural education is stronger than ever. Building on a legacy of support, John Deere says it will donate one million dollars in 2021 to help support the National FFA Organization’s mission to make a positive difference in the lives of students by developing their potential for leadership, personal growth, and career success through agricultural education. “Throughout the years, John Deere has shown their continuing commitment to FFA and our goal of building the next generation of leaders,” says Molly Ball, President of the National FFA Foundation and the chief marketing officer for National FFA. “In today’s climate, every dollar is being stretched. The fact that they find value in our members and our commitment to students and educators speaks volumes.” Aaron Wetzel, John Deere’s Vice President of Production Systems, says, “We believe FFA is as important to the future of agriculture as any cutting-edge machine, technology, or service that we will deliver.”

Washington Insider: Sparks Over Ag

The New York Times is reporting this week that the politics of U.S. agriculture are as complicated as ever — and that despite President-elect Joe Biden's victory, Democrats were again defeated resoundingly in rural America.

This month, Biden nominated Tom Vilsack tapping him to reprise the role of agriculture secretary that he held for eight years in the Obama administration. But the pushback against Vilsack has been fierce, laying bare divisions within the Democratic Party and "resistance to corporate influence that is simmering among progressives," the Times said.

If confirmed, Vilsack, a former Iowa governor, will retake the helm of the Agriculture Department at a time when America's farmers have been battered by trade wars and the effects of the coronavirus pandemic. He also faces challenges from progressive and environmental groups who warn that he is too friendly with big industrial agriculture businesses.

Farm states have been a stronghold for Republicans over the past decade and — despite frustration by some over Trump trade policies — the president still dominated rural areas in 2020. (Editor's Note: Questions asked as part of the recent DTN Agriculture Confidence Index showed more than 60% of farmers voted for Trump, with another quarter of farmers surveyed choosing to not answer that question. Only 11.8% of those surveyed said they voted for Biden.)

Eager to make inroads in rural America, some Democrats fear that Vilsack is not the ideal ambassador, especially since he recently earned $1 million a year as a lobbyist for the dairy industry. Environmental and agricultural policy groups see him as too cozy with "Big Ag," pointing to the rapid consolidation in the farm sector that occurred under his watch when companies such as Monsanto and Bayer merged.

Food safety and labor advocates also criticize his decisions as secretary to allow significant increases in slaughter line speeds in poultry plants along with a revamp of the chicken inspection process to allow meatpacking employees to perform some duties previously carried out by government inspectors.

Food and Water Watch, a consumer and environmental watchdog group, said it opposes Vilsack's nomination. Ken Cook, president of the Environmental Working Group, said "I think he'll fold under pressure from the ag lobby, the subsidy lobby and big agriculture." EWG is a nonpartisan organization that is critical of industrial agriculture.

While many farm groups such as the National Farmers Union and Feeding America have expressed support for his nomination, some farmers are wary that the Biden administration could herald new and onerous regulations.

Vilsack has faced criticism for the fading fortunes of Black farmers who have long complained of discrimination when it comes to land and credit access. Vilsack was at the center of a racial firestorm when in 2010 he hastily fired Shirley Sherrod, a Black USDA official, after a conservative blogger released a misleading video clip that appeared to show her admitting antipathy toward a white farmer. He later apologized and tried to rehire her.

"Because of the experience of the pandemic, there are different expectations for the secretary of agriculture than there were during Vilsack's prior service," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which represents poultry workers at plants across the South. "There must be heightened priority given to the safety and needs of the workers who produce our food supply as well as all to those Americans who face food insecurity."

Early in the Obama administration, Vilsack vowed to address the struggles of smaller farms and to help lift the broader rural economy. At the time, Charles Grassley, a fellow Iowan and powerful Republican senator, praised Vilsack's efforts, which he thought were "badly needed." In the end, Vilsack and the Justice Department did not mount an antitrust effort.

Sen. Grassley has expressed support for Vilsack's nomination.

"The next couple of years the priority will be getting the economy on its feet," said Marc Perrone, president of the United Food and Commercial Workers union, which represents thousands of meatpacking workers and has expressed support for Vilsack's nomination.

Vilsack has frequently made clear his opposition to policies that would break up corporate agriculture conglomerates. "There are a substantial number of people hired and employed by those businesses here in Iowa," Vilsack said. "Telling those folks, 'you might be out of a job,' is not a winning message."

Vilsack is expected to be a sharp contrast with the current ag secretary who was criticized within the department for sidelining career staff and politicizing research by moving the agency's economic research unit from Washington to Kansas City, Mo., leading to a wave of departures and stalling its work.

To those who have worked with Vilsack, the notion that he is merely an ally of industrial farming is seen as unfair, said Anne McMillan, the former USDA deputy chief of staff. She argued that her onetime boss was always mindful of the plight of small farmers but that he needed to also look out for the broader industry.

"His job required him to advance rural America and the ag industry and feed people," she said. "You can't not engage with the entire spectrum."

So, we will see. Vilsack generally got high markets from the sector during his previous terms, and many expect that to happen again — although a number of key issues have sharpened significantly over the past few years and the job may actually be tougher these days — trends producers should watch closely if they appear, Washington Insider believes. 

RFS Exemption Requests Rise

Data released by the Environmental Protection Agency (EPA) showed another increase in small refinery exemptions (SREs) for blending requirements relative to the Renewable Fuel Standard (RFS).

After remaining static for several months, there are now a total of 20 SREs that have been requested for the 2011-2018 compliance years, an increase of three from the November data.

EPA also now shows that a total of 46 SREs have been requested for the 2019 and 2020 compliance years combined, 32 for the 2019 compliance year and 14 for the 2020 compliance year.

US To Lower Tariffs On Moroccan Fertilizer Maker OCP

The U.S. Department of Commerce reduced the subsidy rate that Moroccan fertilizer manufacturer OCP would face on phosphate exports to the U.S., lowering it to 16.88% from 23.46%, according to a memo from the agency.

"On November 30, 2020, we received timely ministerial error allegations that Commerce made significant ministerial errors in the Preliminary Determination with respect to OCP's subsidy rate," the document says. "As a result, we have amended the OCP's Group preliminarily ad valorem rate."

However, Commerce noted that it disagreed with other contentions made by OCP in the information they provided to Commerce.

New COVID-19 Package Helps Farmers

Food and agriculture groups welcome the new COVID-19 relief package. Congress this week agreed on a $900 billion stimulus package, which includes up to $13 billion that directly benefits agriculture. Nearly $1 billion will support a dairy donation program and supplemental Dairy Margin Coverage payments. More help is available to specialty and non-specialty crop growers, and the Paycheck Protection Program will be expanded. American Farm Bureau Federation President Zippy Duvall says, “We’re pleased that Congress understands the toll the pandemic continues to take on farmers.” National Farmers Union President Rob Larew states, “The fact that a stimulus package has, at long last, been passed is certainly a relief.” And, National Corn Growers Association President John Linder says the assistance “will go a long way in providing the certainty” farmers need to recover from the coronavirus. Finally, National Milk Producers Federation President and CEO Jim Mulhern says, “We thank Congress for its leadership, and we look forward to working with USDA in implementing this legislation.”

Roberts’ Priorities Included in Senate-Passed Omnibus Legislation

Retiring Senate Agriculture Committee Chairman Pat Roberts says the omnibus appropriations and COVID-19 bills reflect his priorities. Speaking of the two pieces of legislation, the Kansas Republican says, “I’m proud to cast one of my final votes in the Senate on behalf of America’s farmers, ranchers, and growers.” The legislation includes approximately $26 billion for pandemic-related agriculture and nutrition programs. Provisions in the legislation Roberts advocated for include the National Bio and Agro-Defense Facility Act of 2019, directing the facility to carry out parts of the National Biodefense Strategy. The legislation also includes the Securing All Livestock Equitably Act of 2020, which establishes a livestock dealer trust to benefit unpaid sellers of livestock. Additionally, the legislation includes funds for meat processors to upgrade plants for interstate shipment of products, the Paycheck Protection Program expenses deducibility, and simplifies the loan forgiveness process for PPP loans up to $150,000. The legislation also provides $11.19 billion for pandemic-related assistance to support agricultural producers.

Grassley Praises Approval of the Water Resources Development Act of 2020

Iowa Senator Chuck Grassley praised the passage of the Water Resources Development Act, included in the year-end funding bill. The legislation, known as WRDA, addresses the civil works program of the Army Corps of Engineers. The bill is critical for flood control, navigation, ports, locks, dams, and other water resources infrastructure. Grassley says the legislation "will help communities move forward with projects critical for flood control, navigation, ports, locks and dams and other water resources infrastructure." Grassley and others advocated for several provisions that were incorporated in the final bill, including the Inland Waterway Trust Fund Cost Share Program. This cost-share modification will help the modernization of the locks and dams on the Upper Mississippi River to move forward at a faster rate as they start the construction phase of the Navigation and Ecosystem Sustainability Program. The final bill also includes expanding work on a Lower Missouri River Basin Flood Risk Resiliency Plan.

China 2020 Soybean imports to Reach Record

China’s soybean imports are expected record-high, according to Reuters. The nation is expected to import more than 100 million metric tons of soybeans in 2020, as the nation looks to rebuild its hog herd, boosting demand for protein. An executive with China’s state-owned grains trader COFCO told Reuters the country is expected to crush 92.6 million metric tons of soybeans this year. The record follows declines in demand stemming from African swine fever, which decimated China’s hog population. Chinese officials claim the country’s hog herd has recovered to more than 90 percent of normal levels, though that data has some analysts skeptical. Still, China expects the demand for protein, specifically soybeans for animal feed, to remain strong into the first quarter of 2021. For 2020, demand for soybean oil is expected to increase by more than six percent, as well, thanks to increasing use of the oil in biodiesel and animal feed.

Growth Energy Applauds Canada’s Clean Fuel Standard

Last week, Canada published its nationwide Clean Fuel Standard draft regulation. The regulation is an initiative to reduce the lifecycle carbon intensity of fuels and energy used in Canada and achieve more than 20 million tons of annual reductions in greenhouse gas emissions by 2030. The Canadian Clean Fuel Standard regulatory scenario has modeled compliance to include an average 15 percent ethanol in gasoline by 2030. Growth Energy CEO Emily Skor says the standard continues to push the benefits of biofuels in North America, stating, “Canada continues to be a trailblazer in addressing climate change and cutting greenhouse gases through biofuels.” Earlier this month, Growth Energy and Advanced Biofuels Canada co-hosted two webinars for Canadian stakeholders outlining the benefits and potential of E15 as Canada looks to higher biofuel blends. Canada is currently the United States’ number one foreign customer for U.S. producers and a strong partner in promoting biofuels as a means to reduce greenhouse gases.

NASDA, NPPC, Applaud USDA Steps to Modernize Animal Biotech Regulations

Livestock and agriculture welcome the recent proposal to shift animal biotech regulations from the Food and Drug Administration to the Department of Agriculture. USDA announced this week a proposal to move the regulatory framework to the agency. In a statement, the National Association of State Departments of Agriculture says, “Using the law as intended by Congress to bring order and efficiency to our current process welcomes innovation and enables our regulatory system to keep pace with science.” The National Pork Producers Council calls the announcement a “big step forward for America's farmers.” NPPC claims that FDA regulation of gene editing would result in an impractical, lengthy and expensive approval process. However, the organization counters, USDA's Animal and Plant Health Inspection Service already has a review process in place for gene editing in plants, which can serve as a model for livestock. USDA's rulemaking has a 60-day comment period. NASDA and NPPC have pledged to submit comments to the proposal.

Washington Insider: US Leverage Over Beijing

Bloomberg is reporting this week that President-elect Joe Biden will take office after the Trump administration spent years ramping up pressure on China, including $370 billion in tariffs, getting Canada to place a Chinese executive for Huawei Technologies Co. under house arrest, threatening access to U.S. capital markets and blaming the Communist Party for the scale of the COVID-19 outbreak.

The President's pressure campaign continued last week, as the administration blacklisted more than 60 Chinese companies, limiting their ability to get U.S. technology, in order "to protect national security," the Commerce Department said.

In addition, Beijing's recent behavior turned some nations that might have otherwise tried to straddle U.S.-China tensions more firmly against Chinese President Xi's government by asserting territorial claims in the South China Sea and in strategic areas like its border with India, as well as using economic coercion against countries like South Korea and Australia.

"Trump's broad trade sanctions against China coupled with pushback from other countries against China's aggressive geopolitical diplomacy will give the Biden administration substantial leverage when it commences bilateral negotiations," said Eswar Prasad, who formerly worked on China issues at the International Monetary Fund.

While Biden and many Democrats say they oppose the tactics Trump used to pressure China, those tools will remain on the table as his successor seeks to negotiate with leaders of the world's second largest economy. "I'm not going to make any immediate moves and the same applies to the tariffs," Biden said in recent interviews.

Despite public misgivings about Trump's strategy toward Beijing, countries such as Britain and France have fallen into line behind the U.S. over the threat posed by Huawei to next-generation wireless networks. Western institutions such as the "Five Eyes" spy alliance and the North Atlantic Treaty Organization have turned their attention to combating threats from China.

As the European Union and China aim to complete negotiations over an investment agreement, western countries raised concerns over allegations of forced labor in China's far western region of Xinjiang. The European Parliament backed a proposal that the deal "must include adequate commitments to respect international conventions against forced labor," Reinhard Buetikofer, a German Green party member of the European Parliament who chairs the delegation for relations with China, said on Monday. "European Commission should take that seriously!"

"China's expectation for the Biden administration is to re-set China-U.S. relations aimed at re-engagement and mutual benefit," said Gao Zhikai, a former Chinese diplomat and translator for late Chinese leader Deng Xiaoping. "Poisoned China-U.S. relations need to be disinfected and both China and America need to be made winners, not losers."

America's global reputation has suffered under Trump, Bloomberg said, and U.S. allies are unsure it can be trusted in the longer term. And as much as Trump's tactics have exhausted officials in Beijing, they have done little to change their policies. Xi's government has accelerated its efforts to rein in independent voices in Hong Kong and to bolster its outposts in the South China Sea and along its frontier. It has seen America's failure to tame the pandemic as evidence that the U.S. is already past its prime.

Even if Biden succeeds in changing such perceptions, negotiations with China will probably be every bit as tortuous and drawn-out as those that took place under Trump, who never got the comprehensive trade deal with China that he promised to achieve when taking office in 2017.

"I don't get the sense that China's leaders are under such stress that they're willing to tolerate significant concessions to remove unilateral U.S. pressure," said Ryan Hass, who previously oversaw China affairs at the National Security Council.

The U.S.-China relationship has changed markedly since the president-elect was last in the White House in early 2017 and China's rapidly growing military prowess has given it more confidence to project power in the Asia Pacific, solidifying its hold on tiny South China Sea outposts despite protests from regional neighbors.

To China's benefit, the Biden administration may also be more cautious about using some of the tools at its disposal in the future. While current Treasury Secretary Steven Mnuchin eventually designated China a currency manipulator, Biden's nominee for that post -- former Federal Reserve Chair Janet Yellen -- as indicated reticence about using that lever to win concessions.

One of the biggest risks is that Biden finds himself distracted on the domestic front even as vaccine distribution expands. Unless Washington can get its house in order after a polarizing election and rebuild trust with allies abroad, any advantage Washington has over Beijing could remain largely theoretical, Bloomberg said.

"There's potential for the Biden administration to build leverage but doing so will depend upon whether they are able to build consensus at home on top priorities, consensus with allies and partners on China," said former National Security Council staffer Hass, now a fellow at the Brookings Institution.

The new administration's challenges in rebuilding the domestic economy remain very large. It also has strong challenges in proposed trade policies, all very important policy designs that producers should watch closely as these debates proceed, Washington Insider believes. 

Biofuel Producers Could Get COVID Payments from USDA

The COVID aid approved by Congress contains several wind and solar energy provisions but also potential aid for biofuel producers is tucked in the legislation.

Biofuel producers have been seeking aid as Congress worked on the CARES Act. However, unlike some of the other provisions in the COVID aid effort, USDA is not ordered to make payments to biofuel producers.

A summary of the legislation noted USDA "may make payments to producers of advanced biofuel, biomass-based diesel, cellulosic biofuel, conventional biofuel, or renewable fuels with market losses due to COVID-19."

USDA Moves To Bring GMO Animals Under Its Umbrella

USDA announced it will move forward with an Advanced Notice of Proposed Rulemaking (ANPR) to solicit public input on a proposal to bring the regulation of animal biotechnology under USDA.

USDA's plan would move some of FDA's current animal biotechnology oversight to USDA, with the ag agency consulting with FDA on that front.

USDA said the notice will propose "a flexible, forward-looking, risk-proportionate and science-based regulatory framework that provides a predictable pathway to commercialization and keeps pace with advances in science and technology for certain farm animals (cattle, sheep, goats, swine, horses, mules, or other equines, catfish, and poultry) developed using genetic engineering intended for agricultural purposes."

Office of Management and Budget finished the review of USDA's prerule on the matter December 18. This appears to put to rest what is said to have been a tug of war between USDA and FDA over animal biotech regulation

Wednesday Watch List

 Markets

A flood of reports are set for Wednesday, one day before Christmas Eve. Starting at 7:30 a.m. CST, we will see USDA's weekly export sales, weekly U.S. jobless claims, U.S. personal income and U.S. durable goods orders. A consumer sentiment index plus November new home sales will both be out a 9 a.m., followed by USDA's quarterly hog and pigs report at 2 p.m. CST.

Weather

Snow, low temperatures and strong winds will cover much of the western Midwest and portions of the Northern and central Plains Wednesday, including blizzard conditions. Travel and safety hazards are widespread along with livestock stress. Dry conditions are in store elsewhere, but strong winds in the remainder of the Plains and Midwest are unfavorable for winter wheat. Stressful cold will continue moving through the north-central U.S. through the Christmas holiday.

Peterson Welcomes Food and Ag Provisions of COVID Relief

House Agriculture Committee Chairman Collin Peterson Monday announced the food and agriculture provision in this week’s COVID-19 relief package. In addition to a 15 percent increase in benefits for recipients of the Supplemental Nutrition Assistance Program for six months, Peterson pointed specifically to the inclusion of support for those who were left out earlier assistance. Those include contract livestock and poultry growers, ethanol producers that saw a drop in demand, and livestock and poultry producers who had to depopulate herds and flocks because of supply chain disruptions. The bill also contains assistance for dairy farmers, funding for small and mid-sized livestock processors to attain federal inspection to accommodate increased demand, and animal health work and grants to state departments for ongoing farm stress programs. The outgoing Democrat, Peterson, says, "This bill isn't perfect, but it reflects a compromise and goes a long way toward getting us through this hard time and back to normal.”

Secretary Perdue Proposes Transfer of Animal Biotech Regulatory Framework to USDA

Agriculture Secretary Sonny Perdue Monday announced a proposal to modernize regulations of agricultural animals modified or produced by genetic engineering. The Department of Agriculture will move forward with the rulemaking plan to move the regulatory framework to USDA. Perdue says the initiative follows President Donald Trump’s Executive Order on agricultural biotechnology that called upon federal agencies to make regulatory improvements to rectify long-standing barriers to innovation for U.S. agriculture. In a statement, the Secretary says, "If we do not put these safe biotechnology advances to work here at home, our competitors in other nations will." Perdue adds USDA is outlining a pragmatic, science-based, and risk-based approach that focuses on potential risks to animal and livestock health, the environment, and food safety. USDA's proposal would cover molecular characterization, animal health efficacy, environmental considerations, food safety evaluation, and food storage and processing. USDA’s proposal would also provide end-to-end regulatory oversight from pre-market reviews through post-market food safety monitoring of animals.

Biden Announces White House Climate Team

President-elect Joe Biden recently announced his White House climate team. With climate change a top focus of the incoming administration, the team will play an influential role on policy. The team is led by Gina McCarthy, the Obama-era Environmental Protection Agency Administrator, who will serve as National Climate Advisor. Ali Zaidi (Zay-dee) was named deputy national climate advisory. Zaidi currently serves New York in a top energy and environment post. Also, on the climate team is Deb Haaland as the Biden Interior Secretary, and Jennifer Granholm, nominated as Biden's Energy Secretary. Biden EPA Administration pick Michael Regan joins the team and Brenda Mallory, chair of the Council on Environmental Quality. In a weekend speech, Biden stated, “We see farmers making American agriculture first in the world to achieve net-zero emissions and gaining new sources of income in the process.” Incoming Agriculture Secretary Tom Vilsack is not part of the climate team, but is seen as a key player for the administration's climate goals.

Meat, Poultry, Farm Workers High Priority for COVID-19 Vaccine

Federal guidance suggests essential workers should be next to receive a COVID-19 vaccine, including meat packers and farmworkers. A Centers for Disease Control advisory committee voted in favor of a blueprint for essential workers and people over 75 as recipients of the vaccine in the next phase. In a news release, North American Meat Institute President and CEO Julie Anna Potts says, “Priority access to vaccines is a critical step for the long-term safety of the selfless frontline meat and poultry workers who have kept America's refrigerators full and our farm economy working.” She says $1.5 billion in COVID-19 preventions and supports implemented since the earliest days of the pandemic have reversed COVID-19's impact on meat and poultry workers. Potts adds Meat Institute members stand ready to support vaccination for a diverse workforce, which will also deliver wide-ranging health benefits in rural and high-risk communities. Food and agriculture workers are considered essential workers, along with energy, trade, retail and others.

USDA Receives Delivery of First Significant FMD Vaccine Bank Purchase

Earlier this year, the Department of Agriculture announced the first significant purchase for its Foot-and-Mouth vaccine bank. This month, the purchase worth $27 million was delivered. The establishment of a robust FMD vaccine bank has been a top, long-term priority for the National Pork Producers Council, which was instrumental in advocating for its establishment as part of the 2018 Farm Bill. Currently, USDA, which has prescribed vaccination for dealing with an FMD outbreak, does not have access to enough vaccine should an outbreak occur. FMD is an infectious viral disease that affects cloven-hooved animals, including cattle, pigs and sheep, it is not a food safety or human health threat. The disease is endemic in many parts of the world and would have widespread, long-term fallout for livestock and crop agriculture, including the immediate loss of export markets. NPPC says the organization “looks forward” to continuing to work with the agency to ensure the FMD vaccine bank is adequately stocked.

Deere Partners FFA to Build the Next Generation of Leaders

John Deere announced a $1 million donation this week to the National FFA Organization. The donation, scheduled for 2021, will support FFA’s mission through developing leadership skills, personal growth, and career success. Since John Deere’s initial contribution of $1,000 in 1943, it has donated more than $16 million to the National FFA Foundation. John Deere was also one of the first corporate sponsors to form an FFA Alumni and Supporters Chapter. Today, employees from John Deere facilities across the U.S. volunteer to coach, mentor and train FFA chapters. National FFA Foundation President Molly Ball says, “We are more than pleased to continue partnering with John Deere as we continue to provide programming that will enable the future of agricultural education and FFA.” John Deere Vice President of Production Systems Aaron Wetzel stated, “At John Deere, we believe FFA is as important to the future of agriculture as any cutting-edge machine, technology or service that we will deliver.”

Washington Insider: Virus Surge Hammers UK, EU Trade

Bloomberg and others reported over the weekend that the United Kingdom “confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus.” The report said the development offered a “preview of the border chaos to come in the absence of a Brexit deal.”

Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the UK for 48 hours and wants a stricter testing regime before lifting the blockade. Germany and Italy halted arriving flights from Britain with Spain and Portugal following suit. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.

Late Sunday, the Port of Dover stopped freight moved by truck into France. Traffic into the UK was unaffected, though truckers often run supplies in both directions and the latest outbreak in the heart of England may discourage them from entering the island.

The disruptions are exposing Britain's trade vulnerabilities just as a 4-1/2-year odyssey to leave the EU moves from political rhetoric to economic reality. Business groups facing catastrophic losses urged Prime Minister Boris Johnson's government to act quickly, with the 18,000-member Logistics UK calling for rapid COVID-19 testing of truckers departing the country as the quickest way of protecting supply chains.

The group said there are more than 100 trucks carrying seafood due to cross the border into the EU, bound for Christmas wholesale markets in France and Spain. Fears are growing that live shellfish will spoil if they're held up at the border.

French Transport Minister Jean-Baptiste Djebbari said European nations are working on “a solid health protocol” to be implemented “in the coming hours.” Container ports and ferry terminals were already congested because of stockpiling ahead of the Dec. 31 deadline marking a final break from the European single market.

However, a meeting of the EU's crisis response experts in Brussels on Monday ended without reaching a decision on how to proceed regarding UK travel, Bloomberg said. Some members of the group called for an urgent discussion at political levels to resolve the issue.

In the UK, officials sought to downplay the urgency of the situation. Jamie Davies, the prime minister's spokesman, urged Britons not to panic-buy groceries and said “we have resilient supply chains and it is the case that the majority of our food doesn't come in through the short straits.” Asked about virus vaccines, Davies also said the UK already has “the majority of this year's supply” from Pfizer Inc.

The border chaos comes at the end of a year that's seen Johnson nearly die from the virus and come under heavy criticism over his policy responses, which left the UK with a death toll second only to Italy in Europe and the worst hit to output of any major economy.

British supermarket chain J Sainsbury Plc said it is considering using air freight for products sourced from Europe. The firm expects to begin to see “gaps” in the coming days sourcing some fruits and vegetables, said Victoria Durman, head of corporate communications.

Outside Dover, trucks began lining up on the M20 motorway as the “Operation Stack” emergency plan was triggered with drivers unable to board ferries. The Department for Transport was also preparing Manston airport in Kent, which is being overhauled to accommodate as many as 4,000 vehicles as part of Britain's no-deal planning, according to the local government's website.

UK travel, leisure and retail shares slumped on Monday as flights were canceled, while stay-at-home stocks, like Ocado Group Plc, got a boost. Airlines were among the worst hit, with British Airways parent IAG SA falling as much as 20% and Easyjet Plc down as much as 18%.

The economic drag of tougher restrictions and trade turmoil will only deepen the hole the country is in, unleashing more damage stretching from mom-and-pop retailers to already struggling European airlines, Bloomberg said.

Then there is the political fallout. Johnson abruptly scrapped plans to allow families to mix over the holidays as the government warned over the weekend that the new strain of the virus is “out of control.” There was chaos at train stations with people defying social-distancing rules to get out of the capital.

More than 16 million Britons are now required to stay at home, mainly in London and southeast England. The measures ban household mixing in the capital and the southeast, and allow households to see each other “just on Christmas Day” across the rest of England.

So, we will see. It seems now that the mutations of the virus have not reduced the effectiveness of the vaccines that are being mobilized, but certainly concerns regarding potential impacts have locked up travel and trade in several areas. These are trends and impacts producers should watch closely as they intensify and complicate anti-virus efforts worldwide, Washington Insider believes.