Vilsack Comments on USDA Trade Forecast

The Department of Agriculture’s quarterly trade forecast released last week shows that U.S. agricultural exports not only continue at a record-setting pace for fiscal year 2021, but they will eclipse the 2021 total in fiscal year 2022. The August forecast is USDA’s first look at expected exports for 2022. Following the report, Agriculture Secretary Tom Vilsack says of farmers and ranchers, “global demand for their products is a testament to their quality, safety and commitment to sustainability and has led to a projected new record in U.S. agricultural exports.” The fiscal year 2021 forecast of $173.5 billion is $33.8 billion, or 24 percent, higher than the 2020 final total and nearly $17 billion above the previous record set in 2014. For fiscal year 2022, U.S. farm and food exports are projected at a record $177.5 billion, topping 2021’s forecasted level by $4 billion. The increase is primarily driven by expected record exports of soybeans, horticultural products, dairy products and sorghum.

USDA to Host AFS Webinars

The Department of Agriculture will host webinars on African swine fever as part of African Swine Fever Action Week, September 13-17. USDA will host daily webinars to learn more about African swine fever and its global spread, actions the Animal and Plant Health Inspection Service is taking to safeguard the U.S., and biosecurity measures you can implement now to protect the U.S. herd. The Action Week is part of the continuing efforts to respond to the detection of African Swine Fever in the Dominican Republic and prevent its introduction into the United States, Puerto Rico, and the U.S. Virgin Islands. ASF has not been detected in Puerto Rico or the U.S. Virgin Islands, and USDA is committed to keeping it out of both islands and the rest of the United States. APHIS is taking this additional action to further safeguard the U.S. swine herd out of an abundance of caution. You can learn more and find registration at ahpis.usda.gov.

Truck Used in B100 Pilot Showcased at Farm Progress Show

The 2021 Farm Progress Show is underway, and attendees can see one of the five trucks in last year’s B100 pilot program in Decatur, Illinois. The pilot, conducted by ADM, the Illinois Soybean Association, Optimus Technologies, American Lung Association, National Biodiesel Board and Missouri Soybean Merchandising Council, was designed to demonstrate the feasibility of commercial implementation of Optimus Technologies’ Vector System. The system enables conventional diesel vehicles to operate on 100 percent biodiesel, known as B100. Five of ADM’s Class 8 over-the-road trucks, equipped with The Vector System, were used in daily fleet operations. The vehicles successfully traveled hundreds of thousands of miles on B100, even in the coldest temperatures of a central Illinois and Missouri winter. The cab is on display outside ADM's exhibit at the corner of Seventh Progress Street and Central Progress Avenue. The 2021 Farm Progress Show runs from Tuesday (today) to Thursday in Decatur, Illinois.

Hurricane Ida Impacts Expected to Increase Fuel Prices

GasBuddy’s weekly price outlook shows lower prices than last week but expects an increase following Hurricane Ida. Over the next few weeks, the national average may rise 5-15 cents per gallon or so, subject to damage assessments happening now. The weekly average price fell 2.2. cents to 4.12 per gallon, with diesel down one cent at $3.26 per gallon. Meanwhile, the Renewable Fuels Association says the Environmental Protection Agency can take action to minimize the hurricane’s impact on fuel prices. In a letter to the EPA, RFA’s Geoff Cooper states, “we ask that EPA take steps to immediately allow fuel terminal operators, blenders, and marketers to increase their use of fuel ethanol to help fill the void in gasoline supplies created by refinery shutdowns in the Gulf Coast.” Most oil refineries in the Gulf Coast region are either shut down or operating at reduced rates. When operating normally, these facilities account for about 12 percent of the nation’s refining capacity.

Texas Farm Animal Liability Act Changes Means Changing on-farm Signage

Texas livestock owners need to update signage around their farm to keep protections under the Texas Farm Animal Liability Act. Texas AgriLife Extension agriculture law specialist Tiffany Dowell Lashmet tells AgriLife TODAY, “House Bill 365 made important changes to expand the scope of the Act in response to a Texas Supreme Court decision last year.” Previously, a sign was required only for farm animal professionals, but farm and ranch owners and lessees must also now hang a sign at or near their arena, corral or stable to get the statute’s protections. Passed in 1996, the Texas Supreme Court case in 2020 ruled the act did not apply to injuries on working farms and ranches. Texas lawmakers responded to ensure it applies to those entities, outlining all activities, species, and situations covered. Texas Farm Bureau and Texas and Southwestern Cattle Raisers Association will have signs available, or individuals can make their own.

Interior Department Expands Recreation on Fish and Wildlife Managed Areas

The Interior Department Monday announced the U.S. Fish and Wildlife Service has opened new or expanded hunting and sport fishing opportunities across 2.1 million acres. The increase is the largest expansion of outdoor recreation opportunities in recent history. The increased recreational access includes 88 National Wildlife Refuges and one National Fish Hatchery. Secretary Deb Haaland (Holland) states, "Increasing access to outdoor recreation opportunities is essential to advancing the administration's commitment to the conservation stewardship of our public lands. The announcement expands 910 opportunities for hunting or fishing, as an opportunity is defined as one species on one field station. The announcement brings the number of units in the National Wildlife Refuge System where the public may hunt to 434 and the number where fishing will be permitted to 378. The U.S. Fish and Wildlife Service says hunting, fishing and other outdoor activities contributed more than $156 billion in economic activity in communities across the United States.

Tuesday Watch List

Markets

Early reports out Tuesday include the Chicago PMI (purchasing managers index), which could give a hint as to how the economy is doing, and the Consumer Confidence Index. DTN will also be watching for any deliveries against the expiring September contracts, new Chinese buying and updated weather forecasts.

Weather

Tropical Depression Ida continues to produce tropical rainfall and flooding along its path across the Tennessee Valley and Southeast on Tuesday. A front across the southern portions of the Midwest and Central Plains will do the same with periods of showers.

Western House Members Ask for FEMA Disaster Declaration

Several members of Congress are asking President Biden to declare a drought disaster in the western United States as record temperatures and wildfires hit several states hard. Democrats Joe Neguse (Neh-GOOSE) of Colorado and Jared Huffman of California, whose districts have been hit hard by drought and wildfires, joined 31 other lawmakers in the House asking the president and the Federal Emergency Management Agency to release additional resources to help Western areas faced with water cuts as supplies dwindle. “There’s little to no livestock feed available in the West, farmers are considering selling their livestock or land, and many species of wildlife are suffering from wildfires and no water,” Huffman and Neguse wrote in a letter to the White House. “This drought could have long-term impacts on our food supply, wildlife, and the livelihoods of Americans across the Western U.S.” NBC News says the letter supports a similar request this month from governors of 10 drought-stricken states asking the Biden administration to declare a drought disaster that would allow “agricultural communities to get access to funds that aren’t available through existing disaster programs.” The governors pointed out in their letter that historic drought may wipe out entire crops, limit yields, and lead to extreme levels of pests and disease that could add to the disaster.

Ag Credit Conditions Continue Improving

Strength in the U.S. agricultural economy continues to drive improvement in farm income and credit conditions. As in recent quarters, farm loan repayments rates increased rapidly, and loan demand remained subdued. Bankers in the Kansas City Federal Reserve Districts also continued to report additional increases in farm income. With support from stronger farm finances and historically low interest rates, farmland values increased by at least 10 percent in almost all states in the district. The sharp bounce back in the American farm economy over the past year has bolstered farm income and credit conditions. However, profit opportunities in the cattle industry remained more limited than other major commodities, and ongoing drought has also created concerns for some producers. But strong support from government aid programs has provided ongoing support, and the outlook for farm finances in 2021 remained strong based on recent reports across the Federal Reserve Districts. Farm income increased substantially from last year throughout all participating districts. In the Kansas City, Minneapolis, and St. Louis Districts, the majority of bankers all said income was higher than the same time last year, and less than ten percent say incomes had dropped.

Groups Urge Congress to Pass the Next Generation Fuels Act

Growth Energy praised the introduction of the Next Generation Fuels Act, sponsored by Illinois Democrat Cheri Bustos (BOOS-tohs) and Republican James Comer of Kentucky. CEO Emily Skor says the legislation represents a clear roadmap for turbo-charging the country’s progress against climate change while offering drivers cleaner, more affordable options at the pump. “With a natural octane of 113, ethanol is the only high-performance, homegrown, renewable fuel that’s ready to immediately loosen the hold that OPEC and its allies in Russia have over U.S. fuel prices,” Skor says. “This also directly addresses a recent court decision that threatens to stall the growth of higher biofuel blends like E15.” She also points out that low carbon, higher biofuel blends hold enormous potential for rural America’s role in clean energy production. The National Farmers Union also hailed the legislation. “There are many benefits to adopting low-carbon, high octane ethanol blends,” says NFU President Rob Larew. “Higher blends increase engine and vehicle efficiency, providing greater GHG emission reductions, as well as reducing emissions of criteria pollutants and air toxics.”

Groups Disappointed in Neonicotinoid Evaluation

Grower organizations representing a variety of crops are disappointed with the Environmental Protection Agency’s draft biological evaluation (BE) for several neonicotinoid (NEO-ni-koh-tee-noid) products. The groups representing farmers across the country say that failure to consider real-world usage data in the analysis conducted as part of the Endangered Species Act could limit growers’ ability to protect their crops from pests, protect their livelihoods, and make sure endangered species are safe. The American Farm Bureau Federation, American Soybean Association, National Cotton Council, and Minor Crop Farmer Alliance say ESA analysis, by law, is required to use “the best scientific and commercial data available” to ensure endangered species and their habitats will not be adversely affected by the agency’s decision. The groups point out that the EPA didn’t use the “best available data” and say that several assumptions the EPA made don’t align with how growers actually use the products. “USDA survey and commercial use data are available and show how growers use these tools, but the draft BE instead includes application rates, numbers, types, and reapplication timing for these products that are very inconsistent with the actual available data,” says Kevin Scott, president of the American Soybean Association.

USDA Announces Expanded Crop Insurance Options for Specialty, Organic Crops

The number of agricultural producers who buy crop insurance for their specialty or organic crops continues to climb. USDA attributes that to its work with producers and agricultural groups in recent years to create new crop insurance options. USDA’s Risk Management Agency recently released reports on specialty crops, organic crops, local food production, and greenhouse production, which highlighted insurance option improvements for specialty crops like fruits, vegetables, tree nuts, horticulture crops, and organic crops. Some improvements were put in place by the 2018 Farm Bill, while others resulted from producer feedback and research. “We recognize the necessity to adapt insurance options to meet agricultural producers’ needs,” says RMA Acting Administrator Richard Flournoy. Between 1990 and 2020, liabilities for insured specialty crops rose from $1 billion to over $20 billion. From 2010 to 2020, liabilities for insured organic crops rose from $207 million to more than $1.7 billion, and the number of policies more than doubled. RMA and third-party groups also continue to refine existing policies and create new ones when there are gaps in coverage. Improvements include new options for California Citrus Trees, Florida Citrus, Hurricane Insurance Protection, and expanded crop insurance options for hemp.

Young Cattle Producers Needed for 2022 Convention Internships

The National Cattlemen’s Beef Association is offering college students a unique behind-the-scenes experience at its annual convention internship program. The 2022 Cattle Industry Convention and NCBA Trade Show, the largest annual meeting of the U.S. beef cattle industry, will be on February 1-3, in Houston. Up to 18 interns will get selected and be responsible for setting up the indoor arena, assisting at committee meetings and Cattlemen’s’ College, posting on social media, and contributing in the NCBA booth. NCBA will also make sure the interns have adequate time to maximize their industry networking opportunities. Interns have to be available to work January 29-February 5, 2022, provide their own transportation to Houston, and be at least a junior in college at an accredited university at the time of the event. Applicants need a 3.0 GPA, should be well-versed in all areas of social media, and preferably have a background in or working knowledge of the cattle and/or beef industry. Students need to complete an online Student Internship Application and submit college transcripts, two letters of recommendation, and a resume. The deadline is October 16.

Monday Watch List

Markets

Back from the weekend, traders will have checked rainfall amounts and the latest forecasts, especially the anticipated track of Tropical Storm Ida. A report on U.S. pending home sales is due out at 9 a.m. CDT, followed by USDA's weekly grain export inspections report at 10 a.m. USDA's Crop Progress report will be out at 3 p.m. CDT.

Weather

Heavy rainfall from now Tropical Storm Ida will continue to move north through the Deep South on Monday, causing a risk of flooding. Other scattered showers are expected along a front across the southern Midwest back through the Central and Northern Plains. Some severe storms could be possible in the Plains.

NPPC Applauds ASF Protection Zone Designation

The USDA announced its intention to designate Puerto Rico and the U.S. Virgin Islands as a “protection zone.” That’s a World Organization for Animal Health (OIE) designation that allows the U.S. to maintain its current animal health status should there be the detection of African Swine Fever or other foreign animal diseases on the island territories. The USDA will work to gain OIE acceptance of this designation to maintain U.S. pork export continuity should Puerto Rico or the U.S. Virgin Islands have an animal test positive for African Swine Fever in the future. The United States, including Puerto Rico and the U.S. Virgin Islands, remain free of ASF, a swine-only disease with no implications for human health. There is no commercial pork trade from Puerto Rico or the U.S. Virgin Islands to the U.S. mainland. “We thank Secretary Vilsack for taking this pre-emptive step to preserve the continuity of U.S. pork exports as we continue to work together to prevent the spread of African Swine Fever to the United States,” says Jen Sorenson, President of the National Pork Producers Council. The USDA, Customs and Border Protection, NPPC, and others are working together to contain the first outbreak of ASF in the Western Hemisphere in about 40 years to the Dominican Republic.

Grassley Wants Administration to Fill Ag Trade Positions

Iowa Republican Senator Chuck Grassley called on President Biden to fill a couple of key USDA positions that deal with agricultural trade. He wants qualified officials appointed to the positions of Chief Agricultural Negotiator at the Office of the U.S. Trade Representative and Under Secretary for Trade and Foreign Agricultural Affairs. “I write to you today to express my concern that your administration is not making agricultural trade a priority,” Grassley said in the letter to the White House. “Two positions that are essential to agricultural trade have been left vacant, and there is no indication on when they will be filled. Appointing individuals to these two positions will allow the U.S. to expand market access and strengthen our agriculture community.” He points out that agriculture is essential to the livelihood of the 86,000 family farmers in Iowa and Americans who rely on export markets to sell the country’s abundance of food. “Every day that passes without qualified leadership in these positions means the U.S. is playing without a full team against our competitors,” Grassley also says. “Agriculture trade issues will continue to matriculate, and these two positions will have a portfolio that impacts every farmer and rancher in the country.”

NFU’s Larew Testifies on Increasing Use of Biofuels

Rob Larew, president of the National Farmers Union, testified before the Environmental Protection Agency during a hearing on the planned revision of the Light-Duty Vehicle GHG Emission Standard. As automakers refine vehicle technology, the increased use and development of biofuels represents an opportunity to reduce Greenhouse Gas Emissions from internal combustion engines. Higher ethanol levels not only increase engine productivity but also reduce criteria air pollutants and air toxics once they are fully deployed. NFU has long supported biofuels, such as E30, that can be realized in new and existing internal combustion engines. Larew told the EPA that biofuels are a vital component of this nation’s energy policy. “NFU has long urged the EPA to support rural Americans by promoting higher-level blends of ethanol as a cost-effective means of achieving required and improved octane levels,” Larew says. “We again ask EPA to acknowledge the potential for high octane, low carbon fuels, such as E30, to reduce GHG emissions from light-duty vehicles.” Larew also reminded the EPA that the agency must also consider the economic benefits of the increased use of mid-level ethanol blends as a high octane, low carbon, cost-effective fuel will bring to struggling rural communities while also benefitting consumers.

Farmer Optimism, the Supply Chain, and How They Affect Tractor, Combine Sales

In the second quarter of 2021, money that had been diverted by COVID-19 from travel and other activities into the small tractor market began to return to normal use. Sustained gains in commodity prices, however, have resulted in farmers continuing their buying sprees for larger tractors and harvesters, as shown in AEM’s monthly Ag Tractor and Combine reports. The under-40 horsepower tractor market has softened a bit compared with the big numbers from last year,” says Curt Blades, Senior Vice President of Ag Service for the Association of Equipment Manufacturers. “However, row crop tractors sales have performed well in the second quarter.” He also says the numbers are positive for articulated four-wheel-drive tractors, and even combines are showing “signs of life.” The biggest drivers behind the big-ticket equipment sales are the higher than usual commodity prices and farmer confidence that those prices are going to stay there for a while. However, the supply chain, especially when it comes to the availability of semiconductors, is restricting the available inventory of equipment across all segments. Total tractor inventory at the end of the second quarter of this year is down more than 37 percent compared to the same time last year. Blades notes the association is doing everything possible to help the industry get machines to dealer lots as quickly as possible.

U.S. Soy Crop Quality Report Issued

U.S. Soy and Pro Farmer teamed up for the 2021 U.S. Soy Crop Quality Report. The crop looks good right now, but without moisture, that could fall in some areas. That report comes from Chip Flory, editorial director with Pro Farmer. He presented the results to hundreds of global customers during the U.S. Soy Global Trade Exchange and Specialty Grains Conference. Fields across much of the U.S. have good stands, but Flory says the pod counts weren’t there when they got out into the fields for the Pro Farmer Crop Tour. However, it’s not pod counts that lead to yield, but rather it’s how they fill out. Illinois took the top spot on the crop tour with an average of 1,279.8 pods in a 3X3 foot area. South Dakota set the low mark at an average of 996.9 pods. The report also says that many bean fields are at a critical stage and in need of rain. With rains in the next couple of weeks, those pods could easily fill out. However, if beans stay dry, they will lose pod fill. Meanwhile, the USDA says the average Illinois yield should be 64 bushels an acre, up from 59 bushels a year ago, and Iowa yields will be at 58 bushels an acre, up from 53 bushels last year.

U.S. Increasing Sugar Imports to Cover Domestic Shortfall

The U.S. government says it is increasing the lower-tariff sugar import quota for the fiscal year 2021 by 90,100 tons. Reuters says the goal is to increase the short-term supply on the domestic market. The U.S. Trade Representative’s Office says it would allow this additional volume to enter the country until October 31, a month later than the usual cutoff. The U.S. fiscal year finishes at the end of September. With the addition to the Tariff Rate Quota, or TRQ, the total volume of sugar entering the U.S. at a lower tariff will rise to 1.2 million tons. That’s more than the 1.1 million tons the U.S. committed to within the World Trade Organization rules. It’s the second move from the U.S. government on sugar import quotas in the last two months. In July, it reallocated part of the TRQ import quotas to other countries because some of the original license holders failed to deliver their products. The Dominican Republic will get the largest share of the additional low-tariff quota at 19,000 tons, followed by Brazil and Australia. The increase comes as sugar futures on the U.S. domestic market are at their highest level in nine years.

Friday Watch List

Markets

A report on U.S. personal incomes and spending in July is due out at 7:30 a.m. CDT. At 9 a.m. CDT, Federal Reserve Chairman Jerome Powell will address the Jackson Hole economic symposium and the University of Michigan's consumer sentiment index will be released at the same time. Traders will continue to keep an eye on the latest weather forecasts and watch for any news from the Environmental Protection Agency or news pertaining to export sales.

Weather

Batches of heavy rain were noted early Friday morning across the eastern Dakotas and Upper Midwest and are forecast to continue developing throughout the day, which may cause flooding in drought-afflicted areas. Additional showers are expected to develop from eastern Colorado into western Iowa and across Montana and the western Dakotas late this afternoon and evening and could be severe. Hot temperatures continue to stress the final fill stages south of this zone of showers.

USDA Establishes Dairy Donation Program

Department of Agriculture Deputy Secretary Jewel Bronaugh (Bruh-NAW) Wednesday announced the establishment of a $400 million Dairy Donation Program. The program aims to facilitate timely dairy product donations while reducing food waste. The establishment of DDP is part of the $6 billion pandemic assistance USDA announced in March and follows last week's announcement of the $350 million Pandemic Market Volatility Assistance Program for dairy farmers. Under the DDP, eligible dairy organizations will partner with non-profit feeding organizations that distribute food to individuals and families in need. Those partnerships may apply for and receive reimbursements to cover some expenses related to eligible dairy product donations. The program was inspired in part by the donations made by Michigan Milk Producers Association in conjunction with the Food Bank of Eastern Michigan in response to the Flint water crisis. Deputy Secretary Bronaugh says, “Together we can help someone in need, minimize food waste and support the U.S. dairy industry.”

USDA to Invest $50 Million in New Cooperative Agreements for Racial Justice and Equity

The Department of Agriculture is investing up to $50 million in cooperative agreements to support historically underserved farmers and ranchers with climate-smart agriculture and forestry. The Racial Justice and Equity Conservation Cooperative Agreements are available to entities for two-year projects that expand the delivery of conservation assistance to farmers who are beginning, limited resource, socially disadvantaged, and veteran farmers. USDA Natural Resources Conservation Service Chief Terry Cosby says, "USDA is committed to revising programs to be more equitable, and these producers deserve our support as they contribute to our vibrant and diverse agricultural communities." The projects should help historically underserved farmers and ranchers implement natural resources conservation practices that improve soil health and water quality, provide habitat for local wildlife species of concern, and improve working agricultural land's environmental and economic performance. Entities that provide outreach assistance to historically underserved groups are eligible to apply for the funding.

U.S. Wheat Associates Welcomes Suspension of Vietnam Wheat Import Tariff

U.S. Wheat Associates applauds USDA’s Foreign Agricultural Service for their work alongside Vietnam’s Ministry of Finance to reduce the cost of wheat for Vietnam’s millers and consumers. Vice President Kamala Harris announced Vietnam will reduce or eliminate import tariffs on several U.S. commodities, including wheat. The tariff suspensions are expected to be implemented soon. It will also help make U.S. wheat more competitive in Vietnam’s growing wheat market. Like many countries this year, Vietnam has seen significant food and feed price inflation due to the rise in global commodity prices and COVID impacts on supply chains. The newly announced reduction follows one from July 2020, when Vietnam reduced its tariff on imported U.S. wheat, excluding durum, from five percent to three percent. Despite the tariffs, Vietnam’s imports of U.S. hard red winter, soft white and hard red winter wheat exceeded 500,000 metric tons in marketing year 2020/21, second in volume only to Australia.

Lawmakers Ask U.S. Ambassador to Iraq to Support U.S. Wheat Sales to Iraq

Republican Senators call on U.S. Ambassador to Iraq Matthew Tueller ( too-lur) help Iraq purchase wheat. Four Senators joined Roger Marshall of Kansas in signing the letter, Senators John Boozman of Arkansas, Jerry Moran of Kansas, John Cornyn of Texas, and James Inhofe of Oklahoma. The lawmakers specifically ask Ambassador Tueller to engage in the wheat tendering process and for the U.S. State Department to offer additional assistance to the Iraqis to purchase U.S. wheat. From the time a tender is issued, it takes nearly three months for wheat to arrive in the country. The letter states, "Wheat purchases by Iraq require multiple ministries working in tandem, which is where we are hopeful your outreach to them can be helpful." The letter cites smaller than expected harvest and lower government procurement of local, which means Iraq will need to import a substantial volume of wheat to continue to operate their primary subsidized feeding program, the Public Distribution System.

NFU Welcomes New Guidance on Enforcement of Packers and Stockyards Act Provision

USDA this week issued a guidance document on how the department will enforce the final rule on "Undue and Unreasonable Preferences and Advantages" under the Packers and Stockyards Act. The guidance comes as USDA composes new rules to bring fairness to the marketplace for farmers and ranchers. National Farmers Union strongly supports strengthening the Packers and Stockyards Act to protect livestock producers from unfair treatment and practices by meatpackers and integrators. In response, NFU President Rob Larew states, “We welcome USDA’s newly released guidance, which demonstrates a further commitment to strong enforcement of the Packers and Stockyards Act.” USDA says the proposed rules will strengthen the department’s enforcement of unfair and deceptive practices and undue preferences, address the poultry grower tournament system, and make it easier for USDA to bring enforcement actions under the Act. And, USDA says the enforcement policy commits USDA to defend farmers to the maximum extent possible.

EPA Announces Resources to Better Address Nutrient Pollution Affecting Waters

The Environmental Protection Agency this week released new resources to address adverse effects of nutrient pollution in waters, including algae blooms. The three new resources will help EPA’s co-regulators and partners better protect waters from the effects of nutrient pollution. The three resources include the agency’s Final Recommended Nutrient Criteria for Lakes and Reservoirs, a web-based tool with information and tracking of harmful algal blooms. EPA has published revised recommended ambient water quality criteria under the Clean Water Act to help address nutrient pollution in lakes and reservoirs. EPA says the new criteria will help protect drinking water sources, recreational uses, and aquatic life in our nation’s lakes and reservoirs.  EPA has also published a new ArcGIS StoryMap that will allow the public to learn about and track reported cyanobacteria (sy-an-no) in freshwaters across the country. Finally, the EPA has published a Final Technical Support Document for co-regulators such as states, territories and tribes to protect swimmers from two cyanobacterial toxins produced by harmful algal blooms.

Thursday Watch List

Markets

USDA's weekly report of export sales is due out at 7:30 a.m. CDT, the same time as weekly U.S. jobless claims, an estimate of U.S. GDP for the second quarter and an update of the U.S. Drought Monitor. The U.S. Energy Department's weekly report of natural gas inventories is set for 9:30 a.m. Traders remain interested in the latest weather forecasts and any export news that arises.

Weather

Thursday is shaping up to be very active across the Dakotas and into the Upper Midwest. Heavy rainfall is forecast to increase throughout the day and there may be some severe weather as well. Rainfall may provide some late benefit to filling corn and soybeans but should help to ease the drought as well. To the south of this zone of rain, it will remain hot and humid, stressing the end of the fill period for crops.

USDA Updates CFAP 2.0 for Poultry and Specialty Crop Producers

The Department of Agriculture Tuesday announced Coronavirus Food Assistance Program 2, or CFAP 2, funds for contract livestock producers and specialty crop growers. CFAP 2 assists producers who faced market disruptions in 2020 due to COVID-19. USDA announced $1 billion is available through the program to contract producers of eligible livestock and poultry for revenue losses in 2020. USDA expanded coverage to include chickens, poultry eggs, turkeys, hogs and pigs, ducks, geese, pheasants and quail, including eligible breeding stock and eggs of all eligible poultry types produced under contract. USDA now also allows contract producers to use eligible revenue from 2018 or 2019 to prove losses compared with 2020 revenue. USDA also announced it is amending the CFAP 2 payment calculation for several commodities by allowing farmers to substitute 2018 sales for 2019 sales. Sign-up for CFAP 2 was re-opened in March and remains open. All new and modified CFAP 2 applications are due by October 12. 

USDA On Track to Provide Record Support for Rural Working Capital

USDA Rural Development undersecretary Justin Maxson says the department of Agriculture is on track to provide record support of rural working capital in the current fiscal year. USDA has invested $1.2 billion in loan guarantees to help rural businesses in 41 states, Guam and the Virgin Islands. The investments made through the Business and Industry Loan Guarantee Program and the Business and Industry CARES Act Program are expected to create or save more than 12,000 jobs for people in rural areas. USDA has invested $811 million through the Business and Industry Loan Guarantee Program since the start of the current fiscal year. The assistance has helped businesses create or save more than 6,000 jobs in rural areas. USDA also invested $380 million in rural businesses through the Business and Industry CARES Act Program. Maxson states, “USDA remains committed to helping rural businesses create job opportunities so rural Americans can build back better and stronger than ever before.”

USDA Announces Proposed Framework for Advancing Surveillance for SARS-CoV-2

The Department of Agriculture is dedicating $300 million in American Rescue Plan Act funding to conduct surveillance for SARS-CoV-2 and other emerging and zoonotic diseases. The effort aimed at susceptible animals includes building an early warning system to alert public health partners to potential threats so they can take steps sooner to prevent or limit the next global pandemic. USDA’s Animal and Plant Health Inspection Service is the lead agency responsible for implementing the early warning system. The framework outlines how the agency will focus its efforts to prevent, detect, investigate and respond to SARS-CoV-2, the virus that causes COVID-19, and other emerging and zoonotic diseases that could pose a threat to both people and animals. Establishing an early warning system will require a multi-year effort. USDA will build upon its existing infrastructure to implement a risk-based, comprehensive, integrated disease monitoring and surveillance system domestically, and enhance collaboration internationally.

Senators Urge EPA to Waive Biofuel Blending Requirements

A Group of 17 Republican Senators call on the Environmental Protection Agency to waive or significantly reduce volume requirements for 2020, and set the upcoming 2021 and 2022 renewable fuel obligations “at levels that reflect reality.” In a letter to the EPA, the lawmakers state, “Obligated parties subject to the onerous requirements of the RFS have been facing historically high compliance costs, which threaten the viability of these entities’ continued operations.”  The senators continued, “We urge EPA to take action to reduce RFS compliance costs in order to avert additional financial hardship for consumers and protect the continued viability of U.S. refineries.” Renewable Fuels Association President and CEO Geoff Cooper responds to the letter, stating it “just rehashes the same tired arguments that have been disproven time and time again.” Cooper says “anti-ethanol” Senators are “circling the wagons to protect the status quo for Big Oil and continuing their efforts to undermine cleaner, greener renewable fuels.”

Colorado Senator Launches Outdoor Restoration Partnership Act Promotion Tour

Colorado Senator Michael Bennet Tuesday launched a promotion tour in Colorado for his Outdoor Restoration Partnership Act. The two-day tour, according to the Democratic Senator, shows the need to include the legislation in the Build Back Better Budget. The bill would invest $60 billion in forests and watersheds. Bennet first introduced this proposal in December that he says will provide direct support to local, collaborative efforts to restore habitat, expand outdoor access, and mitigate wildfire. Reintroducing the bill earlier this year, Bennet stated, “For too long, Congress has failed to meaningfully invest in our western lands, undermining our economy and way of life.” Bennet says the bill will generate over $156 billion in economic output, with a return of up to $15 for every dollar spent on restoration, while upgrading natural infrastructure. The proposal has bipartisan support, and a companion bill was introduced in the House of Representatives by lawmakers from Colorado and Idaho.

Beck's Hybrids Acquires Bayer Facility in Iowa

Beck's Hybrids this week announced the purchase of a Bayer processing plant in Beaman, Iowa, for soybean production and processing. The fully operational site will provide Beck's with soybean seed processing capabilities and additional warehousing. Beck's CEO Sonny Beck says, "This new facility will allow Beck's to maximize efficiency, stay ahead of demand, and deliver products faster." Ten former Bayer employees were hired by Beck's to continue operations at the facility. The facility features approximately 30,000 square feet of warehousing and is configured with modern equipment necessary for Beck's to process and treat one million units of soybeans per year. In addition to the facility in Beaman, Beck's has three other locations in Iowa. As the largest family-owned retail seed company in the United States, Beck's has seen tremendous growth over several decades and has doubled in size in the past six years alone. Today, Beck's is the third-largest corn and soybean brand in the United States.

Wednesday Watch List

Markets

A report on U.S. durable goods orders in July is due out at 7:30 a.m. CDT Wednesday, followed by the Energy Department's weekly inventory report at 9:30 a.m. Traders will keep an eye on the latest weather forecasts and pause at 8 a.m. to see if USDA has another export sale announcement.

Weather

A frontal boundary across the Corn Belt will remain active on Wednesday and could contain more severe weather due to the high heat and humidity south of the front. The heat is likely to be stressful where showers do not occur, but most areas south of the front have adequate soil moisture for filling crops with some exceptions, mainly in the Plains.

USDA Accepts 2.8 Million Acres for the Conservation Reserve Program

The Department of Agriculture has accepted 2.8 million acres in offers for enrollment into the Conservation Reserve Program in 2021. This year, almost 1.9 million acres in offers have been accepted through the General CRP Signup, and USDA’s Farm Service Agency has accepted over 897,000 acres for enrollment through the Continuous Signup. The Continuous Signup remains open, and CRP Grasslands Signup closed last week, so USDA expects to enroll more acres into all of CRP than the three million acres that are expiring. Despite Congress raising the enrollment target in the 2018 farm bill, there have been decreases in enrollment for the past two years. USDA made changes this spring to reverse the trend. FSA Administrator Zach Ducheneaux (DOO-shu-know) says, “Even with the improved direction, USDA will still be about 4 million acres below the enrollment target.” The four million-acre shortfall in CRP would represent A loss of 1.5 million acres of quality wildlife and pollinator less habitat for wildlife.

EPA Proposing to Lower RFS Blending Requirements for 2021

The Environmental Protection Agency is expected to urge the White House to lower biofuel blending mandates below 2020 levels. However, the proposal will increase renewable volume obligations in 2022. EPA is sending the proposal to the White House Office of Management and Budget. Reuters first reported the proposed RVO levels Friday, as sources say the EPA is looking to align mandates with actual production levels, which have slumped during the coronavirus pandemic. Additionally, the 2021 mandates are more than a year and a half delayed and were supposed to be released in November 2020, by the Trump administration. The mandate outlines the required amount of biofuels refiners must blend in their fuels. Senator Chuck Grassley, an Iowa Republican, released a reaction statement last week. Grassley says, “If the reports are true, then once again, the EPA is giving a gift to Big Oil and is playing games with the Renewable Fuel Standard law.”

U.S. Keeping Canada Border Closed Through September 21

The U.S. Homeland Security Department recently announced the continued closure of the U.S.-Canada border through September 21, citing COVID-19 concerns. The closure includes restrictions on non-essential travel at land and ferry crossings with Canada and Mexico but ensures the flow of essential trade and travel. Meanwhile, Canada opened the border earlier this month to non-essential travelers from the United States, and Canada boasts higher vaccination rates than the United States. U.S. Representative Brian Higgins, a Democrat from New York, serves as co-chair of both the Northern Border Caucus and the Canada – U.S. Interparliamentary Group. Higgins states, “There has not been enough attention placed on the value and opportunity that comes with restoring connections between our two nations.” Travel restrictions at land ports of entry between the United States and Canada were first implemented in March 2020. Higgins adds the extension “is beyond disappointing; it is hurtful both at a human and economic level.”

Rep. Bustos Visits Illinois Hog Farm, Tax, Labor Reform Discussed

U.S. Representative Cheri Bustos visited with Illinois hog farmers and the Illinois Pork Producers Association last week. The Illinois Democrat discussed the upcoming budget reconciliation package and potential areas of concern to pork producers. During a farm visit, producers shared concerns with the possible elimination of the “step-up in basis,” as well as a new capital gains tax event at death. Additionally, producers discussed the need to reform the H-2A visa program, noting the severe shortfalls in available domestic labor. A recently updated Iowa State University study found that despite competitive wages and an expanding workforce, the U.S. pork industry continues to struggle with a labor shortage. The pork industry uses the H-2A visa program for specialized work, but cannot use the program for most labor needs because of its seasonal limitation. The National Pork Producers Council urges Congress to provide year-round access to the H-2A visa program without a cap.

First Giant Hornet Nest of 2021 Found in Washington State

Agriculture officials found the first giant hornet nest of 2021 last week in Washington state. The nest, located near Blaine, Washington, is about a quarter-mile away from the first reported giant hornet spotting this year on August 11. A Washington state tracking team, along with the Oregon Department of Agriculture and USDA's Animal and Plant Health Inspection Service, located the nest. WSDA netted, tagged with a tracker and released three hornets. One hornet slipped out of the tracking device, another hornet was never located, and one eventually led the team to the nest. Entomologists will now develop their plans to eradicate the nest, happening this week. Asian giant hornets, also known as murder hornets, are not native to the United States. They are the world’s largest hornet and prey on honeybees and other insects. This is the first known nest found this year, and agriculture officials in the Pacific Northwest believe more are undiscovered.

Fuel Prices Continue Slide

The nation's average gas price declined for the second straight week, down 3.3 cents per gallon from a week ago to $3.14 per gallon. The national average now stands unchanged from a month ago and $1.01 per gallon higher than a year ago. The national average price of diesel is down 0.9 cents in the last week and stands at $3.27 per gallon. Gas Buddy's Patrick De Haan states, “Gasoline prices have started to slide over the last few days as oil prices have plunged, largely fueled by a continued global surge in COVID-19.” De Haan also notes concerns that fuel demand may shrink as more companies table return to work plans and the summer driving season comes to a close, and he expects the national average gas price to fall below $3 per gallon within the next few weeks. While Covid cases may eventually slow, OPEC has continued its plan to ramp up oil production every month until 2022, leaving oil under heavy selling pressure.

Tuesday Watch List

Markets

Traders will be watching the latest forecasts and for any signs of export sales. Tuesday's only official report is for U.S. new home sales in July, due out at 9 a.m. CDT. The market is also interested in any news that might develop pertaining to a change in biofuels policy.

Weather

Clusters of storms over Minnesota will continue to move southeast this morning and more development is expected across the general vicinity later today as another system moves through the region. The active track across the north continues to produce rainfall. It may be too late for some to provide much help, but will help to ease the drought in the region for sure. South of the storms, heat and dryness will continue to stress filling crops.

USDA Announces Improvements to the Dairy Safety Net

The Department of Agriculture Announced details of the Pandemic Market Volatility Assistance Program Thursday. Through the program, USDA will provide $350 million in pandemic assistance payments to dairy farmers who received a lower value for their products due to market abnormalities caused by the pandemic. The assistance is part of a larger package, including permanent improvements to the Dairy Margin Coverage safety net program. USDA will contact eligible handlers and cooperatives to notify them of the opportunity to participate in the program. USDA will distribute payments to participating handlers within 60 days of entering into an agreement. The program is part of the $6 billion pandemic assistance USDA announced in March. Outside the pandemic assistance, USDA will also make improvements to the Dairy Margin Coverage safety net program updating the feed cost formula. The change will be retroactive to January 2020 and is expected to provide additional retroactive payments of about $100 million for 2020 and 2021.

USDA Invests $26 Million in Biofuel Infrastructure

The Department of Agriculture will invest $26 million to build infrastructure to expand the availability of higher-blend renewable biofuels by 822 million gallons annually in 23 states. Announced Thursday, USDA is making the awards under the Higher Blends Infrastructure Incentive Program. The funding will help increase the use of biofuels derived from U.S. agricultural products and prioritize climate-smart solutions, according to USDA. The announcement marks the one-year anniversary of the Higher Blends Infrastructure Incentive Program. National Biodiesel Board’s Kurt Kovarik says, “Updating America's infrastructure to expand consumer access to low-carbon biodiesel and Bioheat fuel is a low-cost, high-return investment in meeting the nation's goals for near-term carbon reductions.” NBB adds that Biodiesel reduces carbon emissions on average by 74 percent and considerably cuts particulate matter and other criteria pollutant emissions. The combined projects will reduce the nation's carbon emissions by more than 7.2 million metric tons each year at a cost of less than $2.25 per ton.

EPA Chlorpyrifos Rule Revokes Crop Tolerances on Food and Animal Feed

The Environmental Protection Agency announced this week it is revoking all “tolerances” for chlorpyrifos (Klohr-PEER-uh-fohs), which establish an amount of a pesticide that is allowed on food. The agency will issue a Notice of Intent to Cancel under the Federal Insecticide, Fungicide, and Rodenticide Act to cancel registered food uses of chlorpyrifos. EPA officials say the move “will help to ensure children, farmworkers, and all people are protected.” According to EPA's decision, growers must discontinue use of chlorpyrifos on registered food crops within six months. Farm Bureau President Zippy Duval responded, “This administration has repeatedly made commitments to abide by science, yet the EPA decision on chlorpyrifos strays from that commitment and takes away an important tool to manage pests and insects.” And Agricultural Retailers Association President and CEO Daren Coppock states, “By issuing this mandate, and EPA not fighting it, anti-pesticide activists have executed an end run around the statute that is supposed to govern these decisions.”

New Website Offers Regenerative Agriculture Resources

The University of Missouri Thursday announced a new website focused on regenerative agriculture topics. Regenerative agriculture has sparked considerable interest over the last few years, offering a toolbox of practices that aim to increase soil health, protect water quality, and enhance conservation approaches on farms. Major food and agriculture companies such as General Mills, Bayer, Walmart, Cargill, Corteva, Pepsico, Unilever, and even clothing companies like Wrangler have recently prioritized regenerative agricultural practices. The website aims to allow farmers, landowners, farm advisors, and even consumers to access a wide range of information on regenerative agriculture practices and concepts.  Kelly Wilson of the Center for Regenerative Agriculture states, “The new site offers resources for different levels of expertise, so that different people can learn about practices and target outcomes associated with regenerative agriculture.” Visit the website at cra.missouri.edu and sign up for the Center’s newsletter to receive monthly updates on what’s happening in regenerative agriculture.

AgriSafe Launches New Website to Support Safety for Farmers and Ranchers

The AgriSafe Network recently launched a new website focused on health topics for farmers and ranchers. The website, announced Thursday, integrates AgriSafe’s learning management system that includes fact sheets, webinars, and safety information for health professionals with health topics. The Health Topics page of the website is designed to help farmers and ranchers navigate occupational risks and servers as a trusted and reliable information on health and safety issues. Additionally, the website includes a “Learning Opportunities” section which features content produced by AgriSafe for health and safety professionals and rural healthcare providers. An AgriSafe spokesperson states, “This new space serves as a hub for the people working in agriculture to find specific information to their needs.” Agriculture ranks among the most hazardous industries, according to the National Institute for Occupational Safety and Health. AgriSafe represents health and safety professionals who strive to reduce health disparities found among the agricultural community. For more information, visit www.agrisafe.org.

Farm Journal Acquires United Pork Americas

Farm Journal this week acquired the international United Pork Americas conference and trade show. For the past two decades, more than 150,000 international swine producers, veterinarians and industry stakeholders have experienced the event, Pork Expo Brazil. An extension of Pork Expo Brazil, the United Pork Americas conference, is set for April 19-21, 2022, at the Hyatt Regency in Orlando, Florida. Farm Journal’s Cliff Becker states, “We're excited to invest in the tools that pork industry stakeholders need to prosper in an ever-increasing global environment.” The United Pork Americas conference will feature an educational component with more than 50 internationally renowned speakers and sessions to provide educational opportunities for swine producers, veterinarians and industry stakeholders. It also will feature more than 28,000 square feet of Expo space, where domestic and international swine companies will have booths in an expansive trade show format to bring applicable information and resources to every facet of the pork production system.

Friday Watch List

Markets

After Thursday's broad-based selling across the commodity board, traders may be a little jumpy and will be watching for any news of coronavirus infections and how it relates to numerous shipping problems currently occurring. The latest weather forecasts remain important with rain headed to the northwestern Midwest. USDA's August 1 cattle on-feed report at 2 p.m. CDT is the only significant report scheduled for Friday.

Weather

A system pulling out of the Rockies will continue to produce scattered showers and thunderstorms across the Western Corn Belt Friday, benefiting filling corn and soybeans. Some of these storms may be severe as well. Hot temperatures ahead of the system are falling rapidly behind it. More showers and thunderstorms will be possible across the South and Southeast as well.

USDA Reports on Farm Computer Usage and Ownership

The Department of Agriculture Wednesday released the 2021 Farm Computer Usage and Ownership report. The report is conducted every other year and presents data on farm computer usage, including computer access, ownership or leasing, farm business use, and internet access. The findings show that 82 percent of farms reported having access to the internet, with 98 percent paying for access. In 2021, 29 percent of farms used the internet to purchase agricultural inputs, which increased five percent from 2019. Additionally, 21 percent of farms used the internet to market agricultural activities, increasing two percent from 2019. In 2021, 50 percent of internet-connected farms utilized a broadband connection, while 70 percent of internet-connected farms had access through a cellular data plan. Additionally, 67 percent of farms had a desktop or laptop computer, while 77 percent of farms had a smartphone. USDA collected the data as part of the June Agricultural Survey.

Steakhouses Struggling to Recover from COVID-19

Steakhouses are struggling to recover from the COVID-19 pandemic as the Delta variant of the virus expands, and beef prices are moving higher. Top steakhouses that provide a dining experience and high-priced cuts of beef see the Delta variant as a possible threat to travelers and group events. Several chains say they are better prepared amid the pandemic this year since adding outdoor dining and home delivery, should the latest surge or new government restrictions scare diners away again, according to Reuters. However, sales at high-end chains peaked last month before falling slightly to start August. Meanwhile, government data shows wholesale beef prices are up 40 percent from this time last year. Industry consultant Martin Knapp told Reuters, "We won't get the lift we had expected before the magnitude of the Delta variant came through.” However, the potential of booster shots of the COVID-19 vaccine could help as soon as next month.

Groups Ask Lowe’s, Home Depot to Pull Roundup from Shelves

A coalition of consumer, health and environmental groups call on Lowe’s and Home Depot to remove Roundup from store shelves. The groups, including Friend of the Earth, claim consumers can’t wait, urging the stores to remove the products now. Bayer last month announced long-term risk mitigation actions to prevent further litigation regarding Roundup. The plan calls for replacing its glyphosate-based products in the U.S. residential lawn and garden market with new formulations that rely on alternative active ingredients beginning in 2023. Bayer’s decision only applies to consumer markets, as the company will continue selling glyphosate-based formulas for agricultural and professional use. Bayer also asked the Supreme Court to review the Ninth Circuit Hardeman decision this week. The Petition states that the Ninth Circuit’s lenient standard “has distorted [existing law] beyond recognition, and blurs the boundaries between science and speculation with a third category called ‘art,’ or unsupported intuitions purportedly rooted in clinical experience.”

Researchers Explore Climate, Human and Wildlife Interactions on Rangeland

Researchers in the West are exploring the combined effect of wolves and drought, humans, plants and animals on rangeland in Idaho and Oregon. The University of Idaho is leading the five-year effort. Funded by a $1.6 million National Science Foundation grant, researchers will monitor six sites to learn how drought could affect vegetation in the region and how resulting changes impact elk, deer and livestock, as well as their interactions with predators. Scientists will also explore on a broad scale what effect wolves and drought jointly have on ranching communities. Researcher Sophie Gilbert states, "We'll look at the interactions between wolves and drought and how those affect wild ungulate populations, as well as livestock and the people who live there." The research also seeks to determine how decision-makers respond to these multiple sources of stress, and how wildlife and plant forecasting tools resulting from the project, are received and used by ranchers and wildlife managers.

USDA Accepting Applications to Help Cover Costs for Organic Certification

Organic producers and handlers can now apply for Department of Agriculture funds to assist with the cost of receiving or maintaining organic certification. Applications for the Organic Certification Cost Share Program are due November 1, 2021. Announced this week, the funds provide cost-share assistance to producers and handlers of agricultural products for the costs of obtaining or maintaining organic certification under USDA’s National Organic Program. Eligible producers include any certified producers or handlers who have paid organic certification fees to a USDA-accredited certifying agent during 2021 and any subsequent program year. Producers can be reimbursed for expenses made between October 1, 2020, and September 30, 2021. For 2021, the program will reimburse 50 percent of a certified operation’s allowable certification costs, up to a maximum of $500 for each category of crops, wild crops, livestock, processing, and state program fees. Organic farmers and ranchers may apply through an FSA county office or a participating state agency.

Avoid Foodborne Illness During Temporary Power Outages

USDA’s Food Safety and Inspection Service is reminding consumers to avoid foodborne illnesses during temporary power outages. The agency Wednesday cited Department of Energy data that found weather-related power outages are up by 67 percent since 2000. With high temperatures this summer, energy consumption is high, which may cause some power grids to experience blackouts, an unexpected loss of power lasting minutes, hours or days. Electricity providers will either ask customers to voluntarily conserve energy at home, or they will schedule a reduced flow of electricity — a brownout — to certain areas of the grid to prevent a complete blackout. If your home experiences a temporary power outage, FSIS says monitor fridge and freezer temperatures. Make sure the refrigerator temperature is at 40 F or below and the freezer is at 0 F or below. Most fridges will keep food safe for up to four hours, while a freezer can keep food safe up to 48 hours.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CDT, the same time as weekly U.S. jobless claims and an update of the U.S. Drought Monitor. An index of U.S. leading indicators in July is set for 9 a.m., followed by the Energy Department's weekly report on natural gas inventory at 9:30. USDA's monthly report on Milk Production will be out at 2 p.m. CDT.

Weather

In addition to scattered showers continuing around the South, a system is starting to move out of the Rockies and into the Northern Plains. This system is expected to produce fairly widespread showers on Thursday and Friday across the Western Corn Belt. All rainfall would be helpful for filling corn and soybeans.

Biofuel and Farm Groups File Petition for Rehearing of D.C. Circuit RVP Decision

Biofuel and farm groups filed a petition for rehearing with the D.C. Circuit Court of Appeals regarding the recent American Fuel & Petrochemical Manufacturers vs. EPA decision. The court decision vacated a 2019 regulation allowing year-round sales of a fifteen percent ethanol fuel blends. The petition asks the full court to rehear the case because of significant legal errors in the three-judge panel's decision, handed down on July 2. Announced Tuesday, Growth Energy, the National Corn Growers Association and the Renewable Fuels Association filed the petition. Together, the three national organizations stated, “If allowed to stand, this court’s decision to vacate EPA’s rulemaking to allow E15 to be sold year-round will have devastating consequences for the market expansion of homegrown biofuels.” The D.C. Circuit Court of Appeals reversed a 2019 rule by the Environmental Protection Agency that lifted restrictions on the sale of E15. The case was a challenge by oil refiners to the rulemaking that allowed the year-round sale of E15.

Comment Period Closes on NCBA Product of USA Petition

The comment period just closed on a petition to change "Product of USA" labeling to "Processed in the USA" by the National Cattlemen's Beef Association. Comments closed Tuesday on the petition announced in June and submitted to USDA's Food Safety and Inspection Service. NCBA calls “Product of USA” labeling “a disservice to American consumers and cattle producers alike,” suggesting the claim implies that a beef product is entirely of U.S. origin. Senator Mike Rounds, a Republican from South Dakota, charged a flurry of comments before the deadline, after announcing his opposition to the proposal, with several following comments supporting his take. In comments submitted Friday, Rounds states, "If FSIS adopts NCBA’s proposal, consumers would have to sacrifice knowing where their beef comes from only to merely know where their beef is processed.” Rounds, agreeing with NCBA the “Product of USA” label is misleading, adds the “Processed in the USA” label “woefully undermines the purpose of the label in the first place.”

Scott, Bishop, Asks USTR to Tackle EU Trade Barriers for Peanuts

Top House Agriculture lawmakers want the U.S. Trade Representative's Office to resolve an issue regarding European Union aflatoxin testing in peanuts. House Agriculture Committee Chair David Scott and House Appropriations Agriculture Subcommittee Chair Sanford Bishop sent a letter on the matter to USTR this week. The Georgia lawmakers say the non-tariff trade barrier impacts"American peanut farmers and the entire U.S. peanut industry." Aflatoxin is a naturally occurring contaminant that affects a variety of crops, including peanuts. The U.S. Food and Drug Administration established a maximum threshold for aflatoxin of 15 parts per billion for raw peanuts and 20 parts per billion for peanut products. However, the EU enforces an extra level of testing at European ports and maintains thresholds for aflatoxin that range from as low as two parts per billion to 15 parts per billion. The U.S. peanut industry estimates approximately $170 million in lost sales in recent years because of the strict testing requirements.

USDA Expanding Importation of Fresh Citrus Fruit from Australia

The Department of Agriculture announced Tuesday the expansion of the production areas in Australia authorized to import fresh citrus fruit into the United States. USDA’s Animal and Plant Health Inspection Service also revised the conditions under which citrus from Australia may be imported. Currently, imports of fresh citrus fruit are allowed into the United States from three Australian regions, but the announcement adds three additional approved regions. APHIS scientists prepared a pest risk assessment and a commodity import evaluation document to identify phytosanitary measures to safely import citrus without introducing pests. The citrus fruit must either originate from an approved production area that is free of Queensland fruit fly, Mediterranean fruit fly, and/or Lesser Queensland fruit fly, or be treated with cold treatment or other approved treatment. Based on the findings of a pest risk analysis, APHIS determined that the application of one or more outlined phytosanitary measures will sufficiently mitigate the risks of plant pests and noxious weeds.

USDA Invests $69 Million to Support Critical Food and Nutrition Security Needs

The Department of Agriculture Tuesday announced a $69 million investment to address the food and nutrition needs of low-income communities. Twenty awards totaling $61.5 million are for Nutrition Incentive Grants, and 15 awards totaling $7.5 million are for Produce Prescription Grants. The grants are all part of the National Institute of Food and Agriculture's Gus Schumacher Nutrition Incentive Program COVID Relief and Response grants program. Agriculture Secretary Tom Vilsack states the funding "will help households in communities across the country, many hard-hit by the pandemic and the resulting economic challenges, be better equipped to purchase healthy fruits and vegetables.” USDA says the funding also enhances the resilience of food and healthcare systems impacted by the pandemic. As part of the funding, California’s Nutrition Incentive Program will receive $6.3 million to help Supplemental Nutrition Assistance Program participants purchase fresh and healthy food. And Mountain Comprehensive Health Corporation in Kentucky will receive $619,000 to provide SNAP participants extra incentives to purchase fresh produce.

Haaland, Vilsack, Announce New Pay Initiatives for Wildland Firefighters

Interior Secretary Deb Haaland and Agriculture Secretary Tom Vilsack Tuesday announced the implementation of President Biden’s pay initiatives to support federal wildland firefighters. The initiatives will increase the amount paid to approximately 3,500 firefighters with the Department of the Interior and more than 11,300 firefighters at the USDA Forest Service to ensure all firefighters are paid at least $15 an hour. Secretary Vilsack states, “Supporting our brave firefighters with pay, benefits and career opportunities that reflect the importance and danger of the work that they do is critical to facing the mounting wildfire threat.” Interior currently employs roughly 5,000 wildland firefighters across the Bureau of Indian Affairs, Bureau of Land Management, Fish and Wildlife Service, and National Park Service. Approximately 3,500 of those employees will receive $7.6 million under these initiatives. The USDA Forest Service employs 14,500 wildland firefighters and, under these initiatives, more than 11,300 will receive an additional $24.3 million.

Wednesday Watch List

Markets

We will have housing starts and the Federal Open Market Committee minutes out after the close. Trade will also be watching for updated Corn Belt weather forecasts and more soybean purchases by China.

Weather

Scattered showers will continue across the south Wednesday. Moderate to heavy rain is also moving through the eastern Midwest in association with the remnants of Fred. Hot and humid weather will continue to be the theme for the Western Corn Belt for another day while a storm that will bring relief builds in the Rockies. The heat will continue to negatively impact filling corn and soybeans where drought exists.

USDA Updates SNAP Benefits

The Department of Agriculture Monday released a re-evaluation of the Thrifty Food Plan, used to calculate Supplemental Nutrition Assistance Program, or SNAP benefits. As a result, the average SNAP benefit – excluding additional funds provided as part of pandemic relief – will increase more than 20 percent for Fiscal Year 2022. As directed by Congress in the 2018 Farm Bill, and with the expressed support of President Biden’s January 22 Executive Order – USDA conducted a review of the Thrifty Food Plan. The resulting cost adjustment is the first time the purchasing power of the plan has changed since it was first introduced in 1975, reflecting notable shifts in the food marketplace and consumers’ circumstances. The evaluation concluded that the cost of a nutritious, practical, cost-effective diet is 21 percent higher than the current Thrifty Food Plan. As a result, the average SNAP benefit, excluding additional funds provided as part of pandemic relief, will increase by $36.24 per person, per month.

Vilsack, Tai, Meet with Ag Policy Advisory Committee

Agriculture Secretary Tom Vilsack and U.S. Trade Representative Katherine Tai released a statement following a meeting with the Agricultural Policy Advisory Committee last week. Ambassador Tai detailed how the Biden-Harris Administration’s trade agenda aligns with the objectives of the agricultural sector. The Ambassador discussed how USTR is working to support the ability of U.S. agricultural producers to expand access to foreign markets and a new customer base, according to the statement. Secretary Vilsack emphasized the importance of promoting exports and finding new overseas markets, and that agricultural trade is tied to the health of rural economies. Vilsack provided an overview of priorities, including trade with China, the U.S.-Mexico-Canada Agreement implementation, and trade with the EU. The Agricultural Policy Advisory Committee is managed jointly by the Department of Agriculture and USTR. The committee includes various leaders of commodity and farm groups and agribusiness organizations, focused on ensuring U.S. trade policy and trade negotiating objectives reflect U.S. public- and private-sector interests.

Shipments of Plant-Based Proteins to Pizza Restaurants up 56 Percent

Pizza has repeatedly ranked in the top foods ordered at U.S. restaurants. According to The NPD Group, in the quarter ending June 2021, there were 1.2 billion servings of pizza ordered, up four percent from the same quarter last year. Units of plant-based protein and ingredients shipped from foodservice distributors to pizza operators increased by 56 percent in the second quarter compared to a year ago, reports NPD. Research shows that about 20 percent of consumers want to increase the amount of plant-based proteins they consume, and this sentiment has held steady throughout the pandemic. Pizzas enable chefs and operators to easily customize with plant-based ingredients beginning with cauliflower crusts. Shipments of cauliflower dough and crusts to pizza operators increased by 46 percent in the quarter ending June compared to the same quarter year ago. Unit shipments of plant-based proteins to pizza operators, like Italian sausage, chicken, and imitation beef, grew by double-digits in the quarter.

Fuel Prices Ease as Oil Falls

The nation’s average gas price declined 0.5 cents per gallon from a week ago to $3.17 per gallon, while the average price of diesel fell a penny in the last week and stands at $3.28 per gallon. The average gas price is unchanged from a month ago and $1.01 per gallon higher than a year ago. Gas Buddy’s Patrick De Haan states, “As the number of Covid cases continues to surge globally, oil prices continue to be under pressure due to some countries instituting travel and movement limitations,” as oil has continued to see heavy selling pressure. With the U.S. summer driving season ending and with additional high-profile companies delaying their return-to-office plans, there is some level of anxiety that fuel demand will trail off into the autumn as OPEC continues to raise oil production, leading prices to crumble. U.S. retail gasoline demand fell slightly after reaching its highest level of 2021 last week.

Farm Credit’s Commitment to Young, Beginning and Small Farmers Grew in 2020

Farm Credit institutions increased their support of young, beginning and small farmers and ranchers across the country in 2020. The Farm Credit Administration reported the increase last week. In 2020, Farm Credit made 65,800 loans to producers whose age was less than 36 years, compared to 49,100 in 2019 and 46,680 in 2018. Similarly, the dollar amount of loans outstanding to young farmers grew to $33.6 billion at yearend 2020 compared to $31 billion at yearend 2019. Over the past three years, Farm Credit made more than 160,000 loans to young agricultural producers for $33.7 billion. Meanwhile, over the past three years, Farm Credit made nearly a quarter of a million loans to ag producers with ten years or less of experience to help them get started in production agriculture. And, at the end of 2020, nearly half, 49.8 percent, of all loans outstanding in the Farm Credit System were to ag producers with less than $250,000 in farm sales. 

2022 Farmers' Almanac Released This Week

The 2022 Farmers' Almanac hits store shelves this week and contains 184 pages of helpful tips, calendars, and guides to help you plan your year ahead. It also features weather forecasts for the next 16 months, plus useful advice on ways to take cues from nature to live a more sustainable lifestyle. editor Pete Geiger states, “we encourage readers to take time to head outdoors and reconnect with the environment by growing their own food, shopping locally, and using natural remedies whenever possible." But even though "farmers" is in the title, the publication reaches far beyond them. The Almanac and its readers have evolved. No longer does the Farmers' Almanac contain husbandry tips for farm animals, but it does suggest the best days to cut your hair and lawn to increase growth, quit a bad habit, grow basil, and brew beer. Learn more online at FarmersAlmanac.com

Tuesday Watch List

Markets

A report on U.S. retail sales for July is due out at 7:30 a.m. CDT Tuesday, followed by July industrial production at 8:15 a.m. Traders will be watching the latest weather forecasts and considering Monday afternoon's Crop Progress numbers. Traders will also watch to see if there is a ninth consecutive soybean export sale announcement at 8 a.m. CDT.

Weather

Tropical Depression Fred and its eventual remnant low will bring heavy rainfall to the Southeast Tuesday. More scattered showers will be found along the southern tier of the country as well as the eastern tier. Hot and dry weather continues in the Northern Plains as a system builds into the Rockies. The region will have to wait until Thursday to see relief from the heat and dryness.

Farmland Values Soar in Chicago Fed District Despite COVID-19

Strong commodity prices and continued government assistance are pushing farmland values up by 14 percent in the Central Midwest and 10 percent in the Central Plains. An Illinois farm banker surveyed by the Chicago Fed says, “Government payments have given a boost to the ag sector.” In its quarterly ag newsletter, the Chicago Fed says farmland values in the Seventh District climbed 14 percent on a year-over-year basis in the second quarter of 2021, their largest gain in eight years. Values are expected to climb even higher during the third quarter of the year because seven of every ten bankers are forecasting higher District farmland values during the July through September period this year, while 30 percent forecast stable values. The values for “good” agricultural land moved three percent higher in the second quarter, according to a survey of 152 bankers in the district. All five district states in the Chicago survey showed double-digit year-over-year gains in their agricultural land values, even though too few Michigan bankers responded to the survey to report a numerical change in farmland value.

Court Partially Upholds Iowa’s “Ag-Gag” Law

A divided panel of judges partially upheld Iowa’s ‘ag-gag” law first put in place in 2012. The Des Moines Register says that decision came last week at the same time a coalition of animal rights groups filed another lawsuit challenging a follow-up law that passed in 2021. Iowa has now passed four state statutes that target animal rights activists who are working to publish videos and pictures from inside large livestock facilities, often after getting hired there as employees. The laws created criminal offenses for people who “obtain access to an agriculture production facility by false pretenses” or “makes a false statement or representation” in the course of an employment application if the person intends to commit any unauthorized actions like videotaping if they get hired. The 2012 law was the first to pass and was immediately challenged in court by several organizations, including Iowa Citizens for Community Improvement and the Animal Legal Defense Fund. Three more laws passed in Iowa after that, with the most recent one going into effect in April. The new lawsuit filed by many of the same organizations challenging the first three laws seeks to strike down the fourth law too.

Legislation Designed to Improve Livestock Assistance

North Dakota Republican John Hoeven and Montana Democrat Jon Tester introduced bipartisan legislation in the Senate to improve livestock disaster assistance. The Hagstrom Report says the bill is designed to accomplish several things, including aligning coverage between the Livestock Forage Program (LFP) and Emergency Livestock Assistance Program (ELAP). It will also increase producer assistance under LFP to compensate them more accurately for feed costs, specify transportation costs for feed and water as covered losses under ELAP, and make those program improvements permanent. “Our livestock producers are facing real challenges during this drought,” Hoeven says, “Our bipartisan legislation makes common-sense improvements to the Livestock Forage and Emergency Livestock Assistance Programs to better meet the needs of those with boots on the ground.” Hoeven is the ranking member on the Senate Agriculture Appropriations Subcommittee, and Tester also serves on the Appropriations Subcommittee. They both say that ranchers are “really up against it” and are doing all they can to help them through this severe weather. Tester says, “The devastating drought has touched every corner of Montana and put a real hurt on livestock producers in our state.”

Sorghum Industry Partners with the University of California to Advance Sorghum

The United Sorghum Checkoff Program is partnering with the University of California and its Division of Agriculture and Natural Resources to advance the sorghum industry. The five-year partnership will promote drought resilience in sorghum and increase demand for the cereal crop in the biofuel and bioproduct markets. While the research will be conducted in California, the results will benefit sorghum producers throughout the country. “We are excited to launch such a unique program aimed at helping address the world’s pressing water issues while at the same time increasing demand for a drought-tolerant crop like sorghum,” says Norma Ritz Johnson, USCP executive director. “The program is in perfect alignment with the Sorghum Checkoff’s goal of increasing producer profitability as drought and water scarcity is a challenge faced by most sorghum producers in the U.S.” In addition, Johnson says with the recent focus on renewable energy production, promoting a versatile crop like sorghum in biofuel and bioproduct markets is a timely endeavor. Key activities will include breeding, gene discovery, phenotyping, and research related to the impacts of roots, soil microbes, photosynthesis, and management on drought resilience.

Growth Energy Welcomes CHS as New Producer Plant Member

Growth Energy, the world’s biggest ethanol trade association, announced that CHS is its newest producer plant member. The addition brings Growth Energy’s membership to a total of 91 producer plant members and 8.8 billion gallons represented out of the total U.S. annual ethanol production. CHS has been a premier ethanol marketer, trader, and producer of renewable fuels for more than forty years. They produce 260 million gallons of fuel-grade ethanol and market one billion gallons of ethanol every year, making CHS one of the nation’s largest suppliers of ethanol-enhanced gasoline and the largest U.S. retailer of E85 ethanol. Growth Energy CEO Emily Skor says they’re thrilled to welcome CHS to their growing powerhouse list of Growth Energy producer plant members. “As a whole, CHS has already contributed so much to our industry as an associate member of Growth Energy, having just announced the sale of E15 at 19 more Midwest terminals through its refining business,” Skor says. A release from CHS says, “We value working together for shared success, and we look forward to active participation in Growth Energy and its efforts to advance pro-biofuels policies and expand consumer access to higher ethanol blends.”

Corn Export Sales Jump While Wheat Sales Decline

The USDA says corn sales for the 2020-2021 marketing year that ends on August 31 jumped while wheat sales declined. Sales of corn for offshore delivery totaled 377,600 metric tons in the seven days ending on August 5. That’s up noticeably from the previous week and the prior four-week average. Mexico was the big buyer at 144,500 metric tons, followed by Japan and Venezuela. The total would have been higher, but an unknown country canceled cargoes totaling 76,800 metric tons. Sales for delivery in the next marketing year totaled just shy of 602,000 metric tons. Exports for the week dropped 25 percent to 1.06 million metric tons. Wheat sales for delivery during the marketing year that began on June 1 fell to 293,000 metric tons, five percent lower week-to-week and 32 percent lower than the prior four-week average. An unknown country bought 98,600 metric tons, followed by Japan and Venezuela. Exports for the week hit a marketing-year high of 627,900 tons. Soybean sales in the current marketing year came in at 96,900 metric tons, up from the prior week and the previous four-week average. China was the top buyer at 84,500 metric tons. For the next marketing year, sales totaled 1.12 million metric tons.

Monday Watch List

Markets

Back from the weekend, traders will be checking the latest weather forecasts and rainfall totals. USDA's weekly grain export inspections report is set for 10 a.m. CDT, followed by the Crop Progress report at 3 p.m. Spring wheat harvest progress and crop ratings will be noticed, but crop ratings tend to lose their price impact after the August WASDE report.

Weather

Scattered showers will continue across the southern half of the country Monday while heat builds in the Northern Plains. Tropical Storm Fred is set to make landfall in the Florida Panhandle later today, bringing heavy rainfall to southeastern states into the middle of the week. Flooding of some cotton fields that are in really good shape is possible.

USDA Releases August WASDE Report

The much-anticipated August World Agriculture Supply and Demand report sent crop prices slightly higher Thursday. The monthly report from the Department of Agriculture expects lower corn supplies, reduced feed and residual use, increased food, seed, and industrial use, lower exports, and smaller ending stocks. The season’s first survey-based corn yield forecast, at 174.6 bushels per acre, is 4.9 bushels below last month’s trend-based projection. The season-average corn price received by producers increased 15 cents to $5.75 per bushel. U.S. soybean supply and use changes include higher beginning stocks and lower production, crush, and exports. Soybean production is forecasted at 4.34 billion bushels, down 66 million on lower yields. The survey-based soybean yield forecast of 50.0 bushels per acre is down 0.8 bushels from last month. The season-average soybean price is $13.70 per bushel, unchanged from last month. The U.S. wheat outlook projects reduced supplies, lower domestic use, unchanged exports, and decreased ending stocks. The projected season-average farm price increased $0.10 per bushel to $6.70.

Ag Credit Survey: Strong Farm Economy Supports Ag Credit Conditions

A sharp turnaround in agricultural economic conditions and lasting support from government programs is boosting farm income and loan repayment rates. Both increased from a year ago at the fastest pace on record. The Kansas City Federal Reserve Bank released its quarterly Ag Credit survey Thursday. The survey shows the improvement in farm finances eased credit issues and contributed to softer demand for farm loans. With support from a strong farm economy and historically low interest rates, farm real estate values rose ten percent from a year ago, the largest increase since 2013. The outlook for profit opportunities in 2021 remains strong for most farmers as commodity prices remained well above recent years. Conditions in the cattle industry remained somewhat weaker, however, and drought continued to hinder conditions for some farmers and ranchers. Nearly all banks in the KC Fed district reported that production expenses for crop and livestock producers increased, and cash rental rates also increased, which could pressure margins going forward.

Cattle Industry Commits to Climate Neutrality by 2040

The National Cattlemen’s Beef Association Thursday solidified U.S. cattle ranchers’ commitment to environmental, economic and social sustainability with the release of U.S. cattle industry sustainability goals. The goals call for demonstrating climate neutrality of U.S. cattle production by 2040. NCBA past president Marty Smith says, “By setting goals, we’re publicly committing to continuous improvement and setting targets that allow us to measure and document those efforts.” The goals also seek to create and enhance opportunities that result in a quantifiable increase in producer profitability and economic sustainability by 2025, and enhance trust in cattle producers as responsible stewards of their animals and resources by expanding educational opportunities in animal care and handling programs to further improve animal well-being.  The goals are the culmination of a grassroots, rancher-led process through the Sustainability Goals Task Force formed this year. The task force evaluated the current state of U.S. beef cattle sustainability, and determined which improvements are most critical.

R-CALF Issues Rebuke on Call for Regional Cash Market Minimums

A document sent to the Senate Agriculture Committee from R-CALF calls for mandating large packing plants to purchase at least 50 percent of their cattle needs from negotiated cash cattle markets. Announced Thursday, R-CALF USA says the white paper provides real-time evidence that varying minimum cash cattle purchase requirements region-to-region will allow major beef packers to continue denying timely market access to independent cattle feeders. The document is titled, “Why a 50 percent National Negotiated Cash Volume Is Needed and Why That Volume Should Not Vary Region by Region.” The group’s paper provides the example of at least one Iowa cash cattle seller who was informed that one major packer was out of the market for five weeks and another was reducing Iowa cash cattle purchases. By mandating that all large packing plants purchase at least 50 percent of their cattle needs from negotiated cash cattle markets, the group says Congress can ensure that independent cattle producers located everywhere have access to a competitive market.

European Commission Delays Certificate Regulation, Protecting U.S. Dairy Exports

The European Commission this week decided to extend the implementation deadline for its new health certificate requirements to January 15, 2022. The International Dairy Foods Association says the announcement backs off on threats to shut down U.S. dairy exports to EU member states as well as transshipments of U.S. dairy products through the European Union. IDFA and U.S. officials considered the certificate requirements—requiring animal health monitoring and veterinarian sign-off, among other requirements—to be burdensome and in conflict with international standards set by the World Organization for Animal Health. IDFA says the EC's extension provides U.S. and European officials with enough time to complete their discussions and determine appropriate implementation procedures for U.S. exports. IDFA President and CEO Michael Dykes states, “We are grateful for the support and intervention of the Biden Administration to resolve this matter and hope the U.S. government will continue working with IDFA to help U.S. dairy gain access to the EU market.”

Food Prices Increase Again in July

Food prices rose again in July, according to the latest Consumer Price Index. The food index increased 0.7 percent in July as five of the major grocery store food group indexes rose, and the food away from home index increased 0.8 percent. The index for food at home also rose 0.7 percent, as the index for meats, poultry, fish, and eggs continued to increase. The index for cereals and bakery products, which declined in June, rose 1.2 percent in July, its largest one-month increase since April 2020. The index for other food at home rose 0.8 percent in July, also the largest monthly increase since April 2020. The index for nonalcoholic beverages rose 0.7 percent in July, and the index for dairy and related products advanced 0.6 percent. The index for fruits and vegetables was the only major grocery store food group index to fall in July, declining 0.9 percent after rising 0.7 percent in June. The index for fresh fruits fell 1.8 percent over the month.

Friday Watch List

Markets

The University of Michigan consumer sentiment index is due out at 9 a.m. CDT and is the only significant report scheduled for Friday the 13th. Traders will continue to watch over the latest forecasts and digest Thursday's new estimates from USDA. Traders will also watch at 8 a.m. CDT to see if USDA announces a seventh consecutive export sale for new-crop soybeans.

Weather

An active frontal boundary from the Central Plains through the southern Midwest will remain active as it pushes south Friday. Moderate to heavy rainfall will be possible along the front in these areas while it continues to dry out farther north.

CattleFax Forecasts Record Beef Demand; Prospects for Tighter Supplies

The beef cattle industry is bouncing back from the pandemic, and continued progress is expected in 2022. Beef prices are near record high, and consumer and wholesale beef demand are both at 30-year highs as the U.S. and global economy recover. While drought remains a significant concern, strong demand, combined with higher cattle prices, signal an optimistic future for the beef industry, according to CattleFax. The popular CattleFax Outlook Seminar, held as part of the 2021 Cattle Industry Convention and NCBA Trade Show in Nashville, shared expert market and weather analysis Wednesday. According to CattleFax CEO Randy Blach, the cattle market is still dealing with a burdensome supply of market-ready fed cattle. The influence of that supply will diminish as three years of herd liquidation will reduce feedyard placements. As this occurs, the value of calves, feeder cattle and fed cattle will increase several hundred dollars per head over the next few years.

Senate Confirms Moffitt for USDA Post

The U.S. Senate Wednesday confirmed the nomination of Jenny Moffitt as Agriculture Department undersecretary for marketing and regulatory programs. Senate Agriculture Committee Chair Debbie Stabenow of Michigan says, “Moffitt brings a wealth of experience and a unique perspective as both a farmer and a policy maker.” The Senate Agriculture Committee held a hearing on Moffitt’s nomination on July 15, 2021, and voted to advance her out of the committee with bipartisan support. President Biden nominated Moffitt for the position in April. She most recently served as undersecretary at the California Department of Food and Agriculture and previously served as deputy secretary for the agency. Ranking Senate Ag member John Boozman of Arkansas adds he believes Moffitt “will work in good faith to carry out the regulatory authorities for which she will be responsible in a manner that is consistent with congressional intent.” Moffitt will oversee USDA’s Agricultural Marketing Service Agency and the Animal and Plant Health Inspection Service Agency.

USDA Invests $167 Million in High-Speed Broadband in 12 States

Agriculture Secretary Tom Vilsack Wednesday announced the Department of Agriculture is investing $167 million in 12 states to deploy broadband infrastructure. The investment focuses on rural areas without sufficient access to high-speed internet. Secretary Vilsack says broadband “is necessary for Americans to do their jobs, to participate equally in school learning and health care, and to stay connected.” The investments will benefit rural people in Alaska, Arizona, Colorado, Georgia, Missouri, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Utah and Virginia. As part of the investment, Central Virginia Services Inc. will use a $14.1 million grant to deploy a fiber network in rural Virginia, and the Altamaha Electric Membership Corporation in Lyons, Georgia, will use a $10.6 million loan and a $10.6 million grant to deploy a fiber network in rural Georgia. USDA’s ReConnect Program provides the loans and grants to construct, improve or acquire facilities and equipment needed to provide broadband service in eligible rural areas.

U.S. Ag Tractor Sales Hold Steady in July, Gain in Canada

Gains in larger and four-wheel-drive tractors offset smaller declines in the sub-40 horsepower range in the U.S., while Canadian farm tractor sales were positive in July. The Association of Equipment Manufacturers says U.S. total farm tractor sales fell 0.8 percent in July compared to 2020, while U.S. combine sales jumped 19.2 percent. The articulated four-wheel drive segment led the way for the third straight month by climbing 79.4 percent. Year-to-date farm tractor sales remain up 13.7 percent and combines up 12.6 percent. AEM’s Curt Blades states, “The story of these row-crop and articulated four-wheel-drive sales is a reflection of farmer optimism,” adding “farmers don’t make these sorts of investments without serious consideration of future market conditions.” For Canada, July monthly tractor and combine sales were positive across all segments, with the biggest growth in four-wheel-drive units nearly doubling, up 93.8 percent, while total farm tractor sales were up 14.8 percent and combines up 59.8 percent.

Lawmakers Introduce Ocean Shipping Reform Act

House lawmakers this week Introduced the Ocean Shipping Reform Act of 2021. The bipartisan legislation is the first major update of federal regulations for the global ocean shipping industry since 1998. The legislation would support American exports by establishing reciprocal trade opportunities to help reduce the United States’ longstanding trade imbalance with China and other countries. South Dakota Republican Dusty Johnson and California Democrat John Garamendi introduced the legislation. The Congressmen serve together on the House Committee on Transportation and Infrastructure and announced their intention to pursue the legislation during a Subcommittee hearing on June 15, 2021. The bill seeks to establish reciprocal trade to promote U.S. exports as part of the Federal Maritime Commission’s mission and require ocean carriers to adhere to minimum service standards that meet the public interest, reflecting best practices in the global shipping industry, among other measures. The bill has large agriculture and transportation industry support.

Canadian Pacific Submits New Bid for Kansas City Southern

Canadian Pacific Railway this week re-upped its offer to acquire Kansas City Southern in a stock and cash trade worth approximately $31 billion. The move comes as KCS shareholders are voting to approve a merger/transaction with Canadian National. Canadian Pacific claims their new offer is an alternate transaction recognizing the premium value of KCS while providing more regulatory certainty. The proposed transaction values KCS at $300 per share. Following the closing into a voting trust, common shareholders of KCS will receive 2.8 CP common shares and $90 in cash for each share of KCS common stock held. Canadian National, however, maintains its agreement is superior, under which KCS shareholders will receive $325 per common share, which implies a total enterprise value of $33.6 billion. However, there are many concerns regulators will not approve the KCS-CN agreement. Canadian Pacific says the two offers are substantially similar but claims their proposal offers significantly higher regulatory certainty.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CDT Thursday, along with U.S. jobless claims, the producer price index for July and an update of the U.S. Drought Monitor. The U.S. Energy Department's natural gas inventory report is due out at 9:30 a.m. At 11 a.m., USDA's WASDE and Crop Production reports for August will be released with new U.S. crop estimates featured.

Weather

A frontal boundary will remain active across the southern Midwest with continued showers and thunderstorms. Some storms could be severe, but not to the extent we have seen the last couple of days. Hot and humid weather is found south of this front, which is stressing crops in some of the locally drier areas in the Central and Southern Plains and Delta.

Ag Reacts to Senate Passage of Infrastructure Bill

The U.S. Senate passed the bipartisan infrastructure package that contains several important investments for agriculture. Several U.S. agricultural groups reacted positively to the news. “This is a once-in-a-lifetime investment in America’s infrastructure, and we are extremely pleased that it includes funding for priorities that are important to farmers and rural America,” says John Linder, President of the National Corn Growers Association. American Farm Bureau President Zippy Duvall says, “We appreciate the Senate for working together to pass the Infrastructure Investment and Jobs Act. The pressing infrastructure issues facing our nation are too important to ignore, particularly in rural communities where modernization is desperately needed.” Farm Credit Council President and CEO Todd Van Hoose says the investments in rural broadband will connect more communities. “The agriculture transport network will benefit from improved rural roadways and bridges, freight rail, inland waterways, and port facilities,” Van Hoose says. The National Cattlemen’s Beef Association says the package is “a step in the right direction.” Among the key items in the bill are $17.3 billion for the nation’s ports and inland waterways. The legislation earmarks $65 billion for broadband internet access, including $2 billion specifically set aside for rural broadband.

IA, MN Senators Push for Pandemic Relief for Swine Producers

Senators Chuck Grassley and Joni Ernst, both Iowa Republicans, and Minnesota Democrat Amy Klobuchar sent a letter to Ag Secretary Tom Vilsack regarding assistance for swine producers. They want the USDA to make sure that swine producers and contract swine growers are eligible for the assistance Congress secured for them. The bipartisan push comes after the Biden administration didn’t mention assistance for pork producers during the Pandemic Assistance for Producers June or July announcements regarding the Pandemic Livestock Indemnity Program. “We’re concerned that USDA’s announcement on June 15 that described its intent to finalize this program within 60 days only focused on poultry growers and made no mention of providing assistance to contract swine growers,” the senators said in their letter. “Additionally, many pork producers have been waiting for USDA to roll out the Coronavirus Food Assistance Program swine top-up payments that were announced in January of this year.” Late last year, Congress passed a bipartisan COVID relief package that included assistance to contract livestock and poultry producers, as well as to agricultural producers, growers, processors, specialty crops, non-specialty crops, dairy, livestock, and poultry. On January 15, USDA announced Coronavirus Food Assistance Program 1 top-up payments for swine producers with approved CFAP 1 applications.

Cattle Industry Convention Underway in Nashville This Week

The biggest annual beef industry gathering began on Tuesday in Nashville, Tennessee, where more than 6,000 people got together for the 2021 Cattle Industry Convention and NCBA Trade Show. Those in attendance include cattle producers, industry partners, and other industry stakeholders. “I’m pleased that cattlemen and women can come together in person once again,” says National Cattlemen’s Beef Association President Jerry Bohn. “Producers from across the country and their families look forward to the convention every year, but I think it means more following the disruptions brought on by COVID-19.” Convention participants will gain insights on market trends during the CattleFax Outlook Seminar, hear a “state of the industry” update from NCBA, learn about the cattle industry’s role in sustainability, and walk through the NCBA Trade Show that contains more than 350 exhibitors on seven acres. The NCBA, Cattlemen’s Beef Board, American National Cattlewomen, CattleFax, and the National Cattlemen’s Foundation will all hold annual meetings. Two general sessions will include a panel discussion on sustainability and a speech from former NFL player Jason Brown, who left football for a career in agriculture.