Administration Announces $401 Million for Rural Internet Access

USDA Secretary Tom Vilsack says the agency is investing $401 million to provide access to high-speed internet for 31,000 rural residents and businesses in 11 states. The funds come from the ReConnect Program and an award through the USDA’s Telecommunications Infrastructure Loan and Loan Guarantee Program. “Connectivity is critical to economic success in rural America,” Vilsack says. “The internet is vital to our growth and continues to act as a catalyst for our prosperity.” The secretary also said from the farm to the school, from households to international markets, connectivity drives “positive change.” USDA will support internet investments in Alaska, Arizona, Arkansas, California, Colorado, Idaho, Montana, New Mexico, Nevada, North Dakota, and Texas. The Department also says it will make more investments for rural high-speed internet later this summer, including ReConnect Program funding from the bipartisan infrastructure law, which provides $65 billion to expand affordable high-speed internet to all communities across the U.S.

Senators Introduce the Farmland Security Act

Wisconsin Senator Tammy Baldwin and Chuck Grassley of Iowa introduced the Farmland Security Act to increase scrutiny over foreign investments into America’s agricultural land. The legislation would make sure that Congress can address the impacts of foreign investments on family farms, rural communities, and the domestic food supply. “This bipartisan legislation will provide the tools we need to protect the longevity of American family farm operations for generations to come,” Baldwin says. Current reports show that foreign-owned agricultural acreage has nearly doubled in the past ten years. One of the provisions in the act would require the Ag Secretary to report to Congress on foreign investments in agricultural land, including the impact foreign ownership has on family farms, rural communities, and the domestic food supply. “Foreign buyers, especially those backed by governments like China, purchasing farmland in the U.S. raises serious national security concerns that the people need to know about,” Grassley says.

Bunge Loses $59 Million to Ukraine Conflict

Bunge profits rose 15 percent during the second quarter of 2022. However, the global farm commodities company didn’t reach Wall Street expectations and the share price dropped five percent as a result. The company raised its full-year profit forecast and talked about plans to spend $3.3 billion on future investments and expenditures during the next few years. Bunge attributed a $59 million net loss for the quarter in its agribusiness segment because of the war in Ukraine. CEO Gregory Heckman says it will be a slow process for shippers to move commodities out of Ukraine and into the global markets. The company’s results come amid backed-up supply chains and strong demand for food and fuel driving inflation to its highest level in decades. Bunge’s rising operating costs offset higher demand and tighter supplies of commodity grain crops. Transportation and ongoing COVID-19 issues continue to drag down the world’s grain sector.

NCBA’s Farm Bill Priorities

The National Cattlemen’s Beef Association released its priorities for the 2023 Farm Bill. Those priorities were based on producer input at the association’s Summer Business Meeting in Reno, Nevada. “Our annual meetings are the cornerstone of NCBA’s grassroots policy process,” says NCBA President Don Schiefelbein. NCBA Farm Bill priorities include protecting animal health through programs that guard against the spread of foreign animal diseases such as the National Animal Vaccine and Veterinary Countermeasures Clinic. They want the new farm bill to strengthen risk management programs that provide producers with added protection against weather events and price declines. The NCBA wants the bill to promote voluntary conservation programs that provide support to producers when they implement conservation practices free from government mandates. They say the new farm bill should also support disaster recovery programs that help producers return to normal operations following adverse weather, predator attacks, or extreme weather conditions like drought or wildfire.

U.S. Grains Council Elects New Chairman

The delegates of the U.S. Grains Council elected Josh Miller as Chairman of its Board of Directors during the Board of Delegates Meeting in California. “It’s important to me to learn as much as I possibly can,” Miller said during incoming remarks. Miller is a farmer from Indiana and came to the meeting representing the Indiana Corn Marketing Council. “I also want to learn as much as I can about how what I do affects the whole world and how my efforts create a global ripple that will sustain those who need what I grow the most,” he added. Miller is a fifth-generation farmer from Indiana and produces corn and soybeans, primarily as a 100 percent no-till row crop operation. He was elected to the Council’s officer rotation in 2019. Previously, Miller was a finance officer for Lockheed Martin, a contracting officer for the U.S. government, and a U.S. Marine Corps Staff Sergeant.

Protecting Horses Against West Nile Virus

Since 1999, more than 25,000 cases of West Nile Virus encephalitis have been reported in horses, according to the American Association of Equine Practitioners. “When you talk about West Nile Virus, you’re talking about the Culex (KOO-lex) mosquito,” says Dr. Justin Talley, Department Head for Entomology and Plant Pathology at Oklahoma State University. “The biggest challenge is that in addition to feeding on horses, they also feed on birds, which is why they’re good at transmitting the virus into horses.” The number of cases is difficult to predict every year and will vary based on bird populations. You will see more mosquitoes in late summer or the fall, so the chances can improve greatly from the summer. Moving air plays a big part in mosquito control. “Get the air moving around horses because mosquitoes are weak fliers,” Talley says. “Don’t forget vaccinations and good barn keeping. Remove standing water and clean a horse’s water trough.”

Friday Watch List

Markets

U.S. personal incomes and spending for June are due out at 7:30 a.m. CDT Friday, along with the employment cost index for the second quarter. At 9 a.m., the University of Michigan's final index of U.S. consumer sentiment for July will be released. Traders will keep close watch on the latest weather forecasts and any news regarding Ukraine.

Weather

A front is settling across southern areas of the country on Friday, bringing scattered showers from Colorado east to the Carolinas. Flooding may occur in some areas, but drought in the Southern Plains and Delta will find some relief. Temperatures dip a little bit less extreme south of the front for most areas, but heat continues to be very high in the West, especially in the Pacific Northwest.

Next Generation Fuels Act Introduced in House, Senate

Legislation called the Next Generation Fuels Act was introduced this week in both the Senate and House of Representatives. It aims to leverage higher-octane fuels to improve engine efficiency and performance. Allowing the sale of fuels with greater octane levels would increase the amount of ethanol that can get utilized in the fuel supply, which in turn would lower prices at the pump. Iowa Senators Chuck Grassley and Joni Ernst introduced it in the Senate, while Illinois Representative Cheri Bustos and the entire Iowa delegation introduced it to the House. “Unstable gas prices have left many families, and especially rural families, with a lot of budget uncertainty,” says Grassley. “This would ramp up the use of homegrown fuel at stations across the country, making Americans less reliant on foreign oil and less vulnerable to OPEC tactics.” Ernst echoed those sentiments, noting that America should be turning to its own abundant domestic fuel production.

Ag Groups React to the Next Generation Fuels Act

Some of the nation’s largest agricultural organizations applauded the introduction of the Next Generation Fuels Act in both chambers of Congress this week. National Corn Growers Association President Chris Edgington says it’s a step forward for the nation’s consumers. “In recent months, consumers have been reminded that we need choices at the pump, and the Next Generation Fuels Act would diversify our fuel supply.” National Farmers Union President Rob Larew says the legislation supports usage of higher-level blends of ethanol, something NFU has long championed. “Higher level blends of ethanol are good for farmers, good for the planet, and good for American pocketbooks,” Larew says. Geoff Cooper of the Renewable Fuels Association says, “This summer’s geopolitical instability and record-high gas prices underscore the need for an immediate energy solution for American families.” Growth Energy CEO Emily Skor says, “It’s a clear roadmap for delivering cleaner, more affordable options to American drivers.”

Survey says Consumers are Relying on Chicken Despite Inflation

Research presented at the 2022 Chicken Marketing Summit shows that U.S. consumers are still buying chicken. The survey showed that while consumers average rating for their current financial situation is midway between “poor” and “excellent,” 87 percent are buying the same amount or more of fresh chicken compared to six months ago. Chicken continues to be the healthy choice and best value for the money. During the past six months, 99 percent of those surveyed say they eat meals made with fresh chicken more than once a month while 88 percent do so more than once a week. U.S. consumers plan to buy more chicken than other types of protein in the year ahead. Chicken buyers cite nutrition, value, and versatility as the top reasons for consuming more chicken. Chicken is almost inflation-proof as USDA says Americans, on average, will eat a record 98.3 pounds of chicken per person this year.

AFT Releases Policy Priorities for 2023 Farm Bill

American Farmland Trust released its 2023 Farm Bill advocacy platform this week. It’s a series of policy recommendations focused on supporting farmers and ranchers in protecting their land from development, combating climate change, and enabling a diverse new generation of farmers to better access land and build businesses. “The farm bill, which is passed once every five years, is the single most influential piece of federal legislation in food and agriculture,” says AFT president and CEO John Piotti (Pee-AHT-tee). “Our policy recommendations, developed with input from producers and experts across the country, will help ensure that the 2023 Farm Bill sets agriculture on a path towards a more resilient, profitable, and equitable future.” AFT research has found that 11 million acres of agricultural land were paved over, fragmented, and converted to uses that jeopardize agriculture between 2011-2016. An additional loss of 18.4 million acres were expected by 2040 without additional policy actions.

NCBA Backs Food and Energy Security Act

The National Cattlemen’s Beef Association announced it supports the Food and Energy Security Act introduced by Senator John Thune of South Dakota. The bill would require federal regulators to disclose how proposed rules would impact food and energy prices. “The Biden administration proposed a massive climate disclosure rule that will create new reporting burdens for every farm, ranch, and small business in the country,” says NCBA Environmental Counsel Mary-Thomas Hart. “NCBA supports this legislation because rules like the emissions disclosure mandate from the Securities and Exchange Commission add a costly burden to cattle producers, rural communities, and consumers across the country.” The bill would also prohibit federal regulators from implementing any rule that would increase food or energy prices if inflation is higher than 4.5 percent. Since the beginning of 2022, inflation has consistently been over seven percent, with the inflation rate hitting a forty-year high of 9.1 percent in June.

Soybean Checkoff Leaders Approve Investments to Increase Demand

The farmer-leaders of the United Soybean Board recently finished their summer board meeting in Michigan and approved a budget of $123 million for program work beginning in October. They set investments in research, education, and promotion to add value to U.S. soybeans and build resilience, differentiation, and reputation. The eight investment portfolios align with USB’s new vision of delivering sustainable soy solutions to every life, every day. “Our thinking, planning, and work as a board has become a much more deliberate and idea-driven process, challenging our board members to think big,” says USB Chair and New York farmer Ralph Lott. “Each portfolio works together to create demand for U.S. soybeans across the entire global soy value chain.” He also says that USB has shifted from “project takers” to “portfolio makers,” and the result is more strategic thinking. USB says U.S. soybeans are preferred worldwide, and farmers are seeing strong ROI on their dollars.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CDT Thursday, the same time as weekly jobless claims, and updates of second-quarter U.S. GDP and the U.S. Drought Monitor. The Energy Department's weekly report of natural gas storage is due out at 9:30 a.m., given extra attention by this week's news Russia is cutting gas supplies to Europe. Traders will keep an eye on the latest weather forecasts and any news regarding Ukraine.

Weather

A pair of fronts are combining across the southern Corn Belt on Thursday and producing scattered showers and thunderstorms from Colorado to the Mid-Atlantic throughout the day. Moderate to heavy rain is expected and some areas of flooding will be possible. South of the fronts, temperatures again will be hot in Texas and Oklahoma east to the Mississippi River, though not as extreme as earlier in the week. The Pacific Northwest will be the hottest spot in the country today with temperatures well above normal.

Poultry Producers Settle Claims on Unfair Worker Treatment

Three of the biggest poultry processors in the U.S. will settle claims by the Justice Department over their alleged efforts to work together to drive down employee compensation. Reuters said Cargill, Sanderson Farms, and Wayne Farms agreed to pay a combined $84 million in restitution to workers harmed by their alleged information sharing in order to settle civil antitrust lawsuits. The Antitrust Division of the DOJ said in a statement that through a “brazen scheme” to exchange wage and benefit information, these producers stifled competition and harmed a generation of plant workers who face demanding and sometimes dangerous conditions to earn a living. The settlement was filed on Monday in a Maryland District Court shortly after the lawsuits got filed. Wayne Farms says the settlement shows the company’s commitment to its workers and farmers. Cargill admitted no wrongdoing but said it settled with the Justice Department to avoid further litigation.

USDA Says Rising Food Prices Could Ease in 2023

The all-items Consumer Price Index increased 1.4 percent from May to June and is 9.1 percent higher than in June of last year. USDA once again raised its consumer food price inflation forecast from 8.5 percent to 9.5 percent for 2022. In their first forecast for next year, USDA says inflation will slow to a range between 2.5 percent and 3.5 percent. That’s more in line with the 20-year historical average increase for consumer food prices, which is 2.4 percent per year. The 8.5-9.5 percent rise between 2021 and 2022 is the biggest increase in overall food price inflation since 1979 when prices rose 11 percent. The biggest increase was in the fats and oils category, now forecast to rise 16.5-17.5 percent this year compared to 2021. Poultry, dairy, and cereals-bakery goods are other categories with large price increases. Food at home price is now forecast at 11 percent higher in 2022.

Risk Management Programs Critical for Dairy Success

The National Milk Producers Federation commended farmers from its member cooperatives who are speaking up for dairy’s needs during farm bill listening sessions held by members of Congress. “From sustainability and trade to providing an adequate safety net to producers of all sizes, dairy farmer voices are critical to crafting federal farm programs that serve the entire nation,” says Jim Mulhern, president and CEO of NMPF. “We commend the farmers who own our member cooperatives for sharing their insights.” During a listening session in Minnesota, Steve Schlangen, chair of Associated Milk Producers, Inc., emphasized the value of the Dairy Margin Coverage Program that was created in the 2018 Farm Bill. Schlangen urged the committee to strengthen the program by carrying the Supplemental Dairy Margin Coverage update over into the next farm bill to compensate farmers for modest production increases that have taken place since the program formula was created in 2014.

USDA Starts Issuing Payments for Spot Market Hog Pandemic

The USDA is increasing the amount of funding available for the Spot Market Hog Pandemic Program and expects to issue approximately $62.8 million in assistance payments to producers this week. SMHPP assists eligible producers who sold hogs through a spot market sale between April 16 and September 1 in 2020. “In order to provide more targeted support to hog producers affected by COVID-19, FSA was able to increase funding for SMHPP to provide full payments instead of applying a payment factor,” says FSA Administrator Zach Ducheneaux. “We’re happy to be able to provide more equitable assistance for hog producers hit hard by the pandemic.” Terry Wolters, president of the National Pork Producers Council, says they appreciate FSA’s commitment assisting those pork producers hit by the economic disruptions. “Producers forced into spot market hog sales are still challenged by those market disruptions, so this will help in the recovery,” he says.

Farmfest Offering Livestreamed Forums on Farm Bill, Ag Outlook, and More

National farm and ranch leaders will be in Minnesota for Farmfest on August 2-4 at the Gilfillan Estates near Morgan, Minnesota. They’ll be discussing agricultural topics like the farm bill, the agricultural outlook for the year ahead, and many others. The feature forum will be Tuesday, August 2, at 1:15 pm Central Time, when the primary focus will be on the key topics getting considered as Congress develops the 2023 Farm Bill. Wednesday’s forum schedule starts at 8:30 am and will feature grain marketing, weather, ag policy, crop, and livestock experts sharing perspectives on the year ahead. A Women in Agriculture event will conclude with the presentation of the Farmfest Woman Farmer of the Year on Thursday. “In-person attendees and those tuning in on Livestream will benefit from the insights shared by our lineup of presenters,” says Melissa Sanders Carroll of IDEAg (Idea Ag). For a full schedule and to see the Livestream events, go to Farmfest.com.

Cattle Industry Business Meeting This Week in Reno, Nevada

More than 600 leaders in the cattle industry are at the Summer Business Meeting in Reno, Nevada, this week and providing direction for the industry’s important programs. The event includes meetings of cattlemen and women representing the National Cattlemen’s Beef Association, the Cattlemen’s Beef Promotion and Research Board, American National CattleWomen, and the National Cattlemen’s Foundation. “These meetings give us a great opportunity to engage with one another,” says NCBA President Don Schiefelbein (SHEEF-ell-byne). “I appreciate the time and effort producers commit to coming together to strengthen our industry.” Producers will discuss current developments, work on initiatives developed at Convention, and make plans for the upcoming fiscal year. Other highlights include Sam’s Club executives sharing their knowledge of working on the consumer-facing side of the beef industry. The next time cattle producers come together will be at the 2023 Cattle Industry Convention and NCBA Trade Show on February 1-3 in New Orleans, Louisiana.

Wednesday Watch List

Markets

At 7:30 a.m. CDT Wednesday, the U.S. Commerce Department will release its report on durable goods orders for June, expected to show a decline on the month. An index of pending U.S. home sales is due out at 9 a.m., followed by the Energy Department's weekly inventory report at 9:30 a.m., including ethanol production. At 1 p.m., the long-awaited announcement from the Federal Reserve will be out with many anticipating a 0.75% hike in the federal funds target rate.

Weather

A stalled front across the southern Midwest has been active over the last few days, bringing heavy rain and some flooding. This front stays active Wednesday and another front moving through the Midwest will start to combine with the western end of the front in the Central Plains later Wednesday. Widespread scattered showers and thunderstorms are expected near the southern front, with more isolated showers for the northern Midwest. Cooler temperatures are found north of the front but the heat continues across the Southern Plains and Delta. Heat is also present in the Pacific Northwest for the next several days, stressing spring wheat.

Growth Energy, EPA Reach Agreement on 2023 Biofuel RVOs

Growth Energy and the Environmental Protection Agency announced an agreement on the Renewable Volume Obligations for 2023. Last week, the two groups submitted a consent decree agreement to the U.S. District Court in Washington, D.C. The agreement requires EPA to propose the 2023 renewable volume fuel requirements no later than November 16, 2022, and then finalize the requirements no later than June 14, 2023. “The agreement is an important milestone in setting the pace for growth as we usher in a new era of the Renewable Fuel Standard,” says Growth Energy CEO Emily Skor. “The agreement avoids the uncertainty of continued litigation and ensures the certainty of the 2023 RFS requirements.” The EPA is required to coordinate with the Energy Department and the USDA to set renewable fuel volume requirements through rulemaking, taking into consideration six statutory factors, including environmental, economic, and energy security. The court is expected to approve the agreement.

U.S. Cattle Inventory Down Two Percent

The Cattle Report from the USDA’s National Agricultural Statistics Service says U.S. farms contained 98.8 million head of cattle and calves as of July 1. Of the 98.8 million head of inventory, all cows and heifers that have calved total 39.8 million. There were 30.4 million beef cows in the U.S. as of July 1, two percent lower than 2021. The number of U.S. milk cows dropped to 94.5 million. The U.S. calf crop was estimated at 34.6 million head, one percent lower than in 2021. The number of U.S. Cattle on Feed is slightly higher than last year. The cattle and calves on feed for the slaughter market in the U.S. for feedlots with a capacity of 1,000 or more head totaled 11.3 million on July 1. That inventory level was slightly higher than July 1, 2021. The inventory included 6.9 million steers and steer calves, down one percent from last year.

U.S. Gasoline Prices Continue to Fall

The average price of regular gasoline in the U.S. dropped 32 cents during the past two weeks to an average of $4.54 a gallon. Fuel industry analyst Trilby Lundberg of the Lundberg Survey says that the continued decline is coming at the same time crude oil costs continue to fall. Lundberg says, “Further drops at U.S. pumps are likely as the cuts in the wholesale gasoline price continues down to street level.” While the average price at the pump is down 55 cents during the past six weeks, it’s still $1.32 higher than the price a year ago at this time. The Associated Press says the highest average price in the nation for regular-grade gas was in Los Angeles at $5.65 a gallon. The lowest average price at the pump was in Baton Rouge, Louisiana, at $3.90 a gallon. Diesel prices dropped 22 cents in two weeks to $5.55 a gallon.

FFA Leaders Gathering at the New Century Farmer Conference

Forty-five FFA members from around the country are gathering in Iowa to talk about how agriculture will play a pivotal role in their future during the New Century Farmer conference. The conference is a chance for FFA members intending to remain in production agriculture to work on future plans for success. “This program is important because it helps us continue growing the next generation of leaders who will not only change the world but continue to provide food, fiber, and resources for future generations,” said Allie Ellis, associate director of the National FFA Alumni & Supporters. “We’re excited to offer this opportunity to learn and grow together while expanding their networking pool.” During the week, participants will visit with producers around the state, learn from industry leaders, see innovative agricultural technology, and network with others who also plan to stay in production agriculture. Students from 22 states will make the trip to Iowa.

USDA Investing in On-Farm Conservation Trials

The USDA says it will invest $25 million this year in the Conservation Innovation Grants On-Farm Innovation Trials Program. Through CIG, partners work to address the nation’s water quality, water quantity, air quality, soil health, and wildlife habitat challenges, all while improving agricultural operations. The on-farm component of the program supports widespread adoption and evaluation of innovative conservation approaches in partnership with agricultural producers. This year’s funding priorities are climate-smart agricultural solutions, irrigation water management, nutrient management, and soil health. “Through science and innovation, we can develop solutions to tackle the climate crisis, conserve water, protect soil, and create opportunities for our producers,” says Terry Cosby, Natural Resources Conservation Chief. Applications for On-Farm Trials are being accepted through September 20, 2022. Private entities whose primary business is related to agriculture, nongovernmental organizations with experience working with agricultural producers, and non-federal government agencies are eligible to apply. More information is available at grants.gov.

Dairy Checkoff Hires Sustainability Leader

Dairy Management, Inc. hired Lori Captain as the executive vice president of global sustainability strategy, science, and industry affairs. Captain comes to DMI after serving more than 20 years working at Corteva Agriscience and its predecessor DuPont, most recently as chief of staff, external affairs, and counsel to the CEO. She’s also worked at Syngenta and has significant experience in sustainability, corporate communications, media relations, policy, and engagement strategies. She’ll apply that experience with DMI to help advance U.S. dairy’s vision, guiding environmental science while building support for the 2050 Environmental Stewardship Goals. “Lori Captain will be a global industry ambassador representing our sustainability strategy and progress,” says Barbara O’Brien, president and CEO of DMI. “The dairy industry has been a sustainability leader for decades,” says Captain. “I’m honored and excited to join DMI and help farmers improve their sustainability footprint in a way that’s economically viable and helps builds their business.”

Tuesday Watch List

Markets

At 9 a.m. CDT Tuesday, there will be reports on U.S. new home sales in June and an index of U.S. consumer confidence for July. This is also another busy week of earnings reports and the Federal Reserve will begin its two-day meeting with a rate hike of 0.75% expected on Wednesday. Traders will keep a close watch on weather, Russia's latest moves and anything pertaining to outside markets.

Weather

A front stalled out from southern Kansas through the Ohio Valley remains active with scattered showers on Tuesday. Some of these showers have already been heavy early this morning from Missouri into southern Indiana. A second front moving through the Northern Plains will bring showers to the Dakotas, Nebraska, and Minnesota, offering some relief to a few drier areas in that region. South of the fronts, heat continues to be significant for the Southern Plains into the Delta and also in the Pacific Northwest.

Deal Signed to Export Grain from Ukraine

Officials from Russia and Ukraine signed a deal Friday to reopen grain exports from Ukraine’s Black Sea ports. Reuters says the deal should help ease the global food crisis. Officials from the United Nations expect the agreement will be fully operational in a few weeks and restore shipments to pre-war levels of five million tons per month. The deal will allow Ukraine to export the 22 million tons of grain and other agricultural products that have been stuck in the Black Sea ports due to Russia’s invasion. “A deal allowing grain to leave the Black Sea ports is nothing short of lifesaving for people across the world who are struggling to feed their families,” says Red Cross Director-General Robert Mardini. He also notes that prices for food staples have risen 187 percent in Sudan, 86 percent in Syria, 60 percent in Yemen, and 54 percent in Ethiopia over the past six months. 

NCGA Call-To-Action to Protect Atrazine

The National Corn Growers Association launched a call-to-action asking advocates to submit comments to the Environmental Protection Agency in response to the agency’s announcement that they are revising the registration for atrazine. The EPA says it’s amending the registration of this well-studied herbicide that allows farmers to do more with less. The new level of concern for atrazine will vastly reduce the herbicide’s effectiveness and hinder farmers’ ability to utilize a critical tool. “Corn growers know the value of atrazine, and it’s time again to tell the EPA how valuable this product is to our operations,” says NCGA President Chris Edgington. “In 2016, we came together to submit more than 10,000 comments to the agency, and we need that same momentum again.” NCGA points out that since it first came onto the market, atrazine has allowed farmers to increase their conservation tillage practices. Conservation tillage is a key to carbon-smart farming practices.

Advocates Claim Deere Right-to-Repair May Violate Clean Air Act

Consumer advocates claim that John Deere may be violating the Clean Air Act by limiting repairs on the emission control systems of its machines. Such repairs are only authorized to certified John Deere dealers. Politico says the Clean Air Act requires companies to provide the necessary information, including software, to repair emission control systems in vehicles. Companies are required to confirm they’re providing the information in certification filings with the Environmental Protection Agency every year. The advocates claim that by denying the necessary parts and information for independent repair, the tractor manufacturer is violating the law. However, the company has said they restrict access to the emissions control systems because farmers could delete the software, which Deere says would also be a violation of the Clean Air Act. Deere says when emissions systems break down, farmers might view deletion as an easier option. Deere is named in 17 class-action lawsuits over repairs.

USDA Helps Schools and Childcare Providers Deal with Rising Food Costs

The USDA announced an increase in funding to help schools continue to serve healthy meals this coming school year and provided financial relief for schools and childcare providers. The reimbursement schools will get for each meal served will increase by 68 cents per free or reduced-price lunch and 32 cents per free or reduced-price breakfast. The increase supports school and childcare providers dealing with rising food costs. “The boost in reimbursements will help provide financial relief for schools so they can continue serving high-quality meals to students amid higher food costs and continuing supply chain challenges,” says Stacy Dean, deputy undersecretary for food, nutrition, and consumer services. “USDA is fully committed to using every resource in its toolbelt to ensure kids get the healthy meals they need to grow, learn, and thrive.” The USDA will provide an additional $2 billion for schools to purchase domestic food for their meal programs.

Iowa Lifts HPAI Influenza Quarantine Restrictions

The Iowa Department of Agriculture released the last commercial Iowa poultry farm from highly pathogenic avian influenza quarantine restrictions. Those restrictions prohibited moving poultry or poultry products on or off the affected premises and were lifted after the farm cleared all of the testing protocols and quarantine requirements. “This important milestone allows impacted farmers to turn the page from responding to the outbreak to repopulating flocks and returning to turkey and poultry production,” says Iowa Ag Secretary Mike Naig. “Moving forward, we’ll work with our partners to assess this year’s response to ensure that we’re even more prepared for any potential disease challenges in the future.” Gretta Irwin, executive director of the Iowa Turkey Association, says lifting the last commercial site quarantined in Iowa is great news. “In 2022, we had nine HPAI turkey cases instead of the 71 in 2015, which shows how far we’ve come in battling the disease,” she says.

June Egg Production Drops Three Percent, Milk Up Slightly

The USDA says America’s egg production totaled 8.67 billion during June, a three percent drop from last year. Production included 7:39 billion table eggs and 1.28 billion hatching eggs. Of the hatching eggs, 1.19 billion were broilers and 89.4 million were egg-type. The average number of egg layers totaled 366 million in June, down four percent from last year. June egg production per 100 layers was 2,367 eggs, two percent higher than June 2021. Milk production in the 24 major dairy states during June totaled 18.1 billion pounds, up .3 percent from June 2021. Production per cow in the 24 states averaged 2,031 pounds in June, 20 pounds above the same time last year. The number of milk cows on farms was 8.93 million head, 65,000 less than June 2021, but 4,000 head more than in May 2022. Milk Production between April and June hit 57.9 billion pounds, down .5 percent from 2021.

Monday Watch List

Markets

Back from the weekend, traders are looking close at this week's rain chances and will keep close track of actual rainfall amounts before a drier forecast returns in August. USDA's weekly report of grain export inspections is set for 10 a.m. CDT Monday, followed by the Crop Progress report at 3 p.m. Traders will also be watching outside markets with another rate hike expected from the Fed on Wednesday.

Weather

Two cold fronts are working through the Corn Belt on Monday. Across the south, widespread moderate to heavy rain is forecast while more scattered showers are moving into the Northern Plains. Rain may be heavy for flooding, even in drought areas across the southern Corn Belt. Temperatures are also much cooler behind the fronts, reducing stress for row crops and wheat. Meanwhile, heat continues south of the fronts in the Southern Plains and Delta, and is building in the Pacific Northwest, where temperatures and dryness will increase stress on spring wheat.

Ethanol Production Rises After Six Consecutive Weekly Declines

The Energy Information Administration says U.S. ethanol output increased for the first time in six weeks while inventories dropped slightly. During the week ending on July 15, production rose to an average of 1.03 million barrels a day. The EIA report says that’s up from just over one million barrels a day during the previous week, the first gain since June 10. The Midwest produces more ethanol than any other part of the U.S. and saw its output jump to an average of 973,000 barrels a day from 944,000 barrels a week earlier. Gulf Coast output climbed to an average of 26,000 barrels a day, up from 23,000 the prior week. That’s where all of the gains took place as the Rocky Mountain region stayed steady at 15,000 barrels a day, and the West Coast output held at 9,000 barrels a day for the eighth-straight week. Inventories dropped slightly to 23.55 million barrels.

House Democrats Introduce Child Nutrition Reauthorization Bill

House Democrats introduced a bill that would reauthorize child nutrition programs. Those programs include school meals, the Special Supplemental Nutrition Assistance Program (WIC), and a number of smaller programs. The Hagstrom Report says child nutrition programs haven’t gotten reauthorized since 2010’s Healthy Hunger-Free Kids Act. The School Nutrition Association, which represents school foodservice directors and companies that make the food, says it’s expecting a markup on the legislation next week. Prospects for reauthorization are uncertain as Democrats and Republicans have had differences over the nutritional requirements in the 2010 bill. The USDA also made it easier for children to get free school meals and for mothers and infants to use the WIC program. The reauthorization bill would make some of those policies permanent. Republicans are expected to question or even oppose those policies. The Senate Ag Committee, which has jurisdiction over child nutrition in the Senate, hasn’t released its own bill.

Farm Service Agency Updates Livestock Indemnity Payments for Smaller Calves

The Farm Service Agency made changes to its payment rates under the Livestock Indemnity Program. The agency changed rates for calves under 250 pounds and will now value them at the same level as non-adult cattle weighing between 250 and 399 pounds. FSA also increased payment rates for calves under 400 pounds. The U.S. Cattlemen’s Association had written FSA Administrator Zach Ducheneaux and praised the changes. The Independent Beef Association of North Dakota says the April winter storms that hit North Dakota left cattle producers with extreme losses, most of which were in cattle under 250 pounds. LIP payment rate is set at 75 percent of the fair market value. The payments have gotten updated to use the same price as the 251-399 pound livestock. The rate is now set at $474.38 a head for cattle weighing less than 250 pounds. The previous payment rate for calves under 250 pounds was $175.

American Lamb Board Working on Strategic Planning

The American Lamb Board last released a strategic plan in 2018. The world has changed since then, so the Board is developing a new strategic plan, noting that it faces dynamics that the industry has previously never faced. “Instability in the economy, the economic viability of sheep production, consumer uncertainty, supply chain issues, and increasing pressure from imports are critical issues,” says ALB Chair Peter Camino (Ka-MEE-no). “We are determined to find ways for the U.S. Lamb Checkoff to help our industry through our role in promotion, research, and producer outreach.” The current plan expires in 2022 and prioritizes increasing the quality and consistency of American Lamb and regaining market share from imports. “We need to give consumers more reasons to desire and ask for U.S. lamb even though we are premium prices,” Camino says. “The past four years show that we’ve made progress in many areas, but we need to push harder and farther.”

Biden, Xi Will Talk Soon on Tariffs, Trade, and Taiwan

Plans are in place for President Joe Biden and Chinese President Xi Jinping to meet by the end of the month as tensions increase over trade commitments, tariffs, and Taiwan. The two leaders last spoke on a call four months ago, and the new call would come as the administration considers cutting import duties on Chinese goods to help reduce inflation pressures on American consumers. Reuters says rising inflation has prompted the look at possible tariff relief. That relief may include cutting or dropping the Section 301 tariffs imposed by former President Trump on approximately $370 billion in Chinese imports. Sources told Reuters that the administration is considering whether to pair a removal of at least some of the tariffs with a new investigation into China’s industrial subsidies and its efforts to dominate key economic sectors. The U.S. says high-level engagement is needed to stabilize what’s been a difficult relationship between the countries.

Prices for Cereal Products Rose 11 Percent During First Half of 2022

Consumer prices for cereal products as measured by the Consumer Price Index rose about 11 percent from January through June of 2022 compared to the same time last year. It’s the largest year-over-year increase during those six months since 1981. The USDA says the rise in consumer prices for cereal products tracks with a more substantial increase in the price of wheat. The Kansas City Wheat Market most closely reflects the prices that mills pay for wheat, and cash wheat prices were up 63 percent from the same period last year. The heightened volatility follows a historically typical pattern. Price changes in commodity markets tend to be relatively more extreme than the changes in consumer prices. Generally, commodity prices make up a small portion of the value of these cereal products because of the level of transformation and transportation that these products go through while moving through the value chain.

Friday Watch List

Markets

There are no significant reports out Friday morning, but traders will be watching the latest weather forecast and for any news regarding an agreement to allow grain shipments out of Ukraine. At 2 p.m. CDT, USDA will release its semi-annual cattle inventory report, the on-feed report for July and monthly cold storage report. Beef cow numbers in the inventory report will likely get the most attention.

Weather

A disturbance moving through the Corn Belt will produce some areas of showers and thunderstorms on Friday. Storms will be mostly isolated, but there could be a few patches where storms are stronger or severe. Showers will also occur in the Southeast. Between the two areas, temperatures will be increasing again, with heat and humidity making for some dangerous conditions for both humans and livestock for

NCGA: Federal Crop Insurance Still a Top Priority for Farmers

Congress is continuing its review of the implementation of the 2018 Farm Bill as it prepares to debate and reauthorize the farm bill next year. A National Corn Growers Association leader testified before the House Ag Committee that federal crop insurance is essential to farming and has to get protected from harmful budget cuts. Tom Haag of Minnesota is the First Vice President of the NCGA. “Federal crop insurance is a major pillar of risk management for the vast majority of corn growers,” he said during testimony. “Simply put, the public-private partnership of crop insurance works and plays a significant role for agriculture in the wake of natural disasters.” During the development, passage, and implementation of the last farm bill, both the House and Senate Ag Committees defeated attacks on the program and found ways to strengthen the federal crop insurance program. Haag says NCGA will provide farm bill recommendations in the months ahead.

NPPC Applauds U.S.-Philippine Swine Fever Project

The National Pork Producers Council is applauding a new joint effort to address the challenges of African Swine Fever. The USDA’s Foreign Agricultural Service joined with leaders from the Philippine Department of Agriculture and the Minnesota Department of Agriculture to announce the new project. It’s titled “Capacity building in risk assessment to support safe international trade of U.S. pork producers in the Philippines.” NPPC President Terry Wolters of Minnesota says, “Creating international partnerships provides further safeguards to keep American agriculture safe from foreign animal disease. That helps U.S. pork producers to continue providing customers in both countries with safe and affordable pork.” The Philippines has had ongoing ASF outbreaks and is seeking better ways to control the virus and the subsequent food price inflation. NPPC worked with the Philippine embassy in Washington, D.C., to ascertain the needs of the Philippine government and the country’s producers to help them better manage ASF outbreaks.

Bipartisan Letter to EPA Asks Agency to Support Advanced Biofuel Production

Senators Chuck Grassley of Iowa and Amy Klobuchar of Minnesota, both members of the Senate Ag Committee, wrote a letter with 22 colleagues to the Environmental Protection Agency about biofuels. The letter asks EPA Administrator Michael Regan to support higher amounts of biomass-based biodiesel and other advanced biofuels in the upcoming 2023 and 2024 Renewable Volume Obligations. “Advanced biofuels have a critical role in addressing some of the economic challenges we face today,” Grassley says in the letter. The senators also say that the production and use of advanced biofuels benefit the economy and the environment in many ways. For example, the production process involves utilizing resources that would otherwise be of no use, including surplus vegetable oils, recycled cooking oils, and animal fats. Production of clean-burning, homegrown biofuels supports 13 percent of the value of U.S. soybeans. Laboratory estimates say biodiesel reduces greenhouse gas emissions by 74 percent compared to regular diesel.

Gas Prices Down 10 Percent from June Peak

The national average price for a gallon of gas is below $4.50 for the first time in two months. The Washington Post says that may offer some relief for Americans struggling to make ends meet due to runaway inflation. Triple A says the national average was $4.495 on Tuesday, a ten percent drop from the June high point of more than $5 a gallon. A gallon of diesel dropped 31 cents over the last month, now at $5.51 on Tuesday. At least 35 states across the country have at least one retailer selling gas for under $4 a gallon. The fuel-tracking app GasBuddy says the lowest price this week was found in Virginia, where at least two stations are selling their gas at $3.25 a gallon. The turnaround in prices has taken industry analysts by surprise. Patrick DeHaan of GasBuddy says, “We see prices drop like this maybe twice a century. “

Sorghum Added to USDA Food Buying Guide

The USDA recently added sorghum to its Food Buying Guide for Child Nutrition Programs, the primary resource used by school foodservice directors to build menus that comply with nutrition requirements. The move represents a major step forward for Sorghum,  a nutrient-rich, high-protein, gluten-free grain. “The inclusion of sorghum in the Food Buying Guide is a monumental win for sorghum producers as we continue looking for new ways to market our crop,” says Norma Ritz Johnson, executive director for the United Sorghum Checkoff Program. “This move is pivotal in our efforts to increase its visibility and ease of use among foodservice professionals.” She also says the industry is excited to deliver its nutritious whole grain to the plates of American schoolchildren. As of July 1, a new USDA requirement stated that at least 80 percent of the weekly grains in school lunch menus must be whole-grain rich, something sorghum can provide.

Ag Groups Support the “Beagle Brigade”

The National Cattlemen’s Beef Association joined a coalition of agricultural organizations in calling for passage of the Beagle Brigade Act of 2022. The bill would authorize the National Detector Dog Training Center, which trains canines who are nicknamed the “Beagle Brigade.” Allison Rivera, NCBA Executive Director of Government Affairs, says the Beagle Brigade is crucial for preventing foreign animal diseases, invasive species, and pests from entering the country. “To continue the success of the Beagle Brigade’s program, we’re urging Congress to provide specific authorization for the National Detector Dog Training Center so canine teams can continue to provide robust inspections at U.S. ports of entry,” Rivera says. U.S. Customs and Border Protection officials say over 116 agricultural canine teams provide screenings at border crossings, airports, cruise terminals, cargo warehouses, and mail facilities.  Brigade members play a vital role in preventing the introduction of diseases like Foot and Mouth Disease, African Swine Fever, and many others.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CDT Thursday, the same time as weekly U.S. jobless claims and an update of the U.S. Drought Monitor, followed by the Conference Board's index of U.S. leading indicators at 9 a.m. and the Energy Department's weekly report of natural gas storage at 9:30 a.m. Traders will keep close watch on the latest weather forecasts and watch to see if Russia restores gas shipments to Germany. The European Central Bank is expected to raise its interest rate by a half-percent.

Weather

A frontal boundary continues to push south and east across the country, though it is hard to call it a cold front with temperatures so high in many areas even north of this front. The front will be the focus for thunderstorm development, however, and some severe storms will be possible across the Southeast and up the Eastern Seaboard. To the northwest, temperatures are above-normal for most of the country except up along and across the Canadian border. There could be some pop-up showers at times through the rest of the Plains and Corn Belt, but most areas should stay dry today, increasing stress for drier areas of the country.

Ag Land Market Will Be Active During the Fall

Early indications are suggesting that land auction activity will be good both before and after the harvest in 2022. Farmers National Company says land sales typically slow during the spring and early summer. However, the rate of late summer and fall auctions getting scheduled with Farmers National Company is picking up rapidly. The overall number of sales and amount of land sold from now through the end of the year likely won’t equal the very active land market at the end of 2021. But sales activity will more than likely exceed what was seen during the slower land market years from 2015 to 2020. FNC says people are moving ahead with sales because of the historically high land prices currently in the market.  Another factor is the level of uncertainty in a number of factors that influence land values, including inflation. Sellers worry about how far and how quickly interest rates will rise.

Family Farms Still Driving Dairy Industry

The U.S. dairy industry says the “decline of the family farm” and the “rise of the corporate farm” are not accurate descriptions of American agriculture. While the number of dairy farms declined, it has not at all diminished the dominance of family-run dairies. Smaller family farms often grow to accommodate additional family members coming into the operation. Of the estimated 39,442 farms of all sizes with dairy cows, USDA data says more than 38,200 were family-operated. That’s a total of 97 percent of dairies, a high number that’s not moving despite any consolidation. For example, the number of farms with dairy cattle was over 48,000 in 2016, but the family-farm percentage that year was 97.3, a remarkably consistent number. The average size of a U.S. dairy farm has grown from 50 cows in 1990 to about 300 today. Even though they’re larger, the family farm is still the bedrock of American dairy farming.

AFT Hires Soil and Climate Experts to Increase Impact Capacity

American Farmland Trust expanded its national “Farmers Combat Climate Change Initiative” team. New team members include Dr. Bonnie Michelle McGill as Senior Climate and Soil Health Scientist and Dr. Rachel Seman-Varner as Senior Soil Health and Biochar Scientist. Through the work of its climate initiative, AFT commits to making U.S. agriculture climate-neutral or better by promoting the widespread adoption of regenerative farming practices that rebuild soil health, sequester carbon, and reduce emissions. McGill will lead climate solutions related to program modeling, data analysis, and other research efforts advancing climate-smart practice adoption and support advocacy and communications. Seman-Varner will advance the science and implementation of high-level regenerative soil health management systems and provide technical support for policy advocacy. She will also advance AFT’s leadership on how to integrate and improve biochar and other innovative natural climate solutions into soil health management systems. The two new additions say complex problems need multi-faceted solutions.

American Fruit Grower’s Survey Shows Serious Labor Concerns

The American Fruit Growers held its annual State of the Industry survey. Labor was a big topic in the survey, and one-third of the respondents say it’s not an issue for them, at least not yet. Growing Produce says they typically have a stable team of employees, and in 20 percent of those cases, it includes family members. For the remaining two-thirds of the survey responders, available labor is a huge challenge. A California apple grower told Growing Produce, “In California, we’re limited to a 40-hour workweek. They’re also considering reducing it to four days a week and raising the minimum wage to $15.50 an hour.” A citrus grower from Florida says it’s “virtually impossible” to find excellent farm labor. Just two in 10 survey responders currently use the H-2A program that authorizes lawful admission into the U.S. for temporary, non-immigrant workers to do agricultural labor or provide seasonal services.

U.S. Soy Farmers to Help Battle Child Malnutrition Worldwide

The U.S. Agency for International Development announced $1.3 billion in additional critical assistance to Ethiopia, Kenya, and Somalia. Those funds include $200 million for purchasing a product called Ready-to-Use-Therapeutic-Food. RUTF is an energy-dense medical food paste made of soy, peanuts, powdered milk, vegetable oil, sugar, and multivitamins. It’s one of the world’s most effective tools to help severely malnourished children. America is one of the world’s largest and most cost-efficient producers of RUTFs, but U.S. farmers have the capacity to do more. “U.S. soybean growers are proud of the role they play in global food security,” says American Soybean Association President Brad Doyle. “We welcome the opportunity to provide more protein to feed those in need around the world, and we’re thankful for the much-needed investments in RUTFs.” Last spring, the ASA asked Congress for $200 million in appropriations to purchase RUTFs and double the global supply to reach more malnourished children.

“Rock the Crop” Sweepstakes Deadline Approaching

Firestone Ag is partnering with country music star Dillon Carmichael to celebrate U.S. agriculture with its second annual Rock the Crop Concert Sweepstakes. U.S. farmers and ranchers must enter by July 25 for a chance to win a private, on-farm concert with Dillon Carmichael or tickets to one of his upcoming concerts. Firestone Ag says it’s proud to champion hard-working family farmers, and eligible entrants must live and work in the contiguous U.S. and be at least 21 years old. “I’m thrilled to continue this partnership with Firestone and have such a unique opportunity to personally celebrate America’s farmers,” Carmichael says. “My latest album is all about small-town USA, which is common for country music and a testament to my upbringing and our many fans.” Matt Frank, Firestone’s marketing product manager, says the last few years have been very challenging for agriculture workers, so they’re excited to thank one lucky farmer or rancher.

Wednesday Watch List

Markets

A report on U.S. existing home sales is set for 9 a.m. CDT, followed by the Energy Department's weekly report of energy inventories at 9:30 a.m., a report which includes ethanol production. Traders will continue to keep a close watch on the latest weather forecast and any news regarding Ukraine.

Weather

A system moving through the Great Lakes is expected to fire off scattered thunderstorms along its cold front from Michigan to Kentucky Wednesday afternoon, some of which may be severe. More limited showers will be possible along the rest of the front from Tennessee back through Oklahoma. Some showers will also be found across the Southeast while most of the rest of the country is dry. Heat continues to be a major factor today, with high heat and humidity ahead of this from across the South into the Northeast.

International Trade Commission Rejects Fertilizer Duties in Win for Farmers

The U.S. International Trade Commission Monday ruled against imposing tariffs on nitrogen fertilizers imported from Russia and Trinidad and Tobago. The decision comes after CF Industries filed a petition with ITC in late 2021, requesting that the commission place tariffs on urea ammonium nitrate used in liquid fertilizers. Shortages and prices have since increased exponentially. National Corn Growers Association President Chris Edgington says, "This comes as a welcome relief," adding, "We have been sounding the alarms and telling the ITC commissioners that tariffs will drive up input prices to even more unaffordable levels for farmers." American Soybean Association President Brad Doyle says the ruling "will provide much-needed relief from tariffs for U.S. soybean growers and farmers across the country." Few inputs have exhibited more price inflation than UAN, which has experienced a high price increase due largely due to the Russia-Ukraine conflict. Last month, agriculture groups asked ITC to take into consideration that price pressure experienced by commodity farmers has cascading effects that reverberate through the farm economy.

Report: China Largest Global Funder of Agricultural R&D

While public agricultural research and development funding in the United States has trended downward in recent decades, several other major trading partners have increased their funding. USDA’s Economic Research Service reported Monday that China leads the world in agricultural research and development funding. The European Union's expenditures have grown since 2000, as have the expenditures in India and Brazil. However, none experienced as rapid an increase as China, which became the largest funder of agricultural R&D after 2011, surpassing the European Union. By 2015, the last year for which the Economic Research Service has full data, China was spending more than $10 billion annually on agricultural R&D. That level of spending was roughly twice the U.S. expenditures in 2015 and nearly quintuple that of China's own R&D spending in 2000. With China as a major importer of U.S. agricultural goods and Brazil a competitor to the U.S. in the global corn and soybean markets, these developments could impact U.S. export competitiveness.

FAS Administrator Whitley Kicks Off Philippines Trade Mission

Foreign Agricultural Service Administrator Daniel Whitley arrived in Manila Monday to launch a USDA trade mission. The trade mission seeks to foster stronger ties and build economic partnerships between the United States and the Philippines. Whitley is joined by representatives from 29 U.S. agribusinesses and farm organizations and ten state agriculture departments interested in exploring export opportunities in the Philippines. Whitley says, "I'm confident the next few days will produce mutually beneficial results to help expand trade, increase collaboration on key issues impacting agriculture in both our countries, and ultimately strengthen Philippine food security." This week, local staff from the FAS office in Manila will host business meetings between U.S. trade mission delegates and local companies seeking to import American food and farm products. The trade mission itinerary also includes three memoranda of understanding signing ceremonies, including one to launch a USDA-funded program to help combat African Swine Fever in the Philippines.

Vilsack to Address Western Governors’ Association Annual Conference

Agriculture Secretary Tom Vilsack will travel to Idaho for a series of events next week, including addressing the Western Governors' Association Annual Conference. The events are related to the Biden administration efforts to build climate resilience and recover from the impact of wildfires. USDA says Vilsack will visit a U.S. Forest Service tree nursery in Boise, Idaho, on July 25, and announce USDA efforts on climate mitigation and significant investments in reforestation and wildfire risk reduction funded in part by President Biden's Bipartisan Infrastructure Law. On July 26, Vilsack will deliver a keynote address at the Western Governors' Association Annual Conference. In his address, he will speak about challenges facing western communities and how state and federal governments can partner to address these challenges. Before his keynote, Secretary Vilsack will participate in a press conference with the governors in attendance, where he will discuss Bipartisan Infrastructure Law programs that will help communities reduce risk and build resilience against wildfire.

Agriculture, Business Organizations Oppose Tax Increases

The National Pork Producers Council last week joined 191 agriculture and business organizations voicing opposition to two key changes to the tax code that may become part of a budget reconciliation bill. Media reports suggest Senate lawmakers want for non-corporate taxpayers to expand the current 3.8 percent Net Investment Income Tax to all non-wage income and expand and extend the “excess business loss limitation.” Both provisions were included in the $1.6 trillion budget reconciliation package of mostly social welfare and environmental spending approved by the House last fall. For pass-through entities such as most pork operations, the increase would directly impact the bottom line, limiting deductions of excess business losses would reduce the ability of farm operations to recover from bad years, according to NPPC. In a letter last month, the groups wrote, “In the face of a possible recession, 40-year high inflation, unprecedented supply-chain challenges, and chronic labor shortages, raising taxes on small, individually, and family-owned businesses is the wrong approach and should be rejected.”

Overwhelming Interest in USDA Climate-Smart Commodities Opportunity

The Department of Agriculture says the second funding pool through the Partnerships for Climate-Smart Commodities opportunity received over 600 applications from over 400 groups. While USDA is in the process of calculating the total requested amount for the second funding pool, the overall interest in the opportunity already exceeds more than $18 billion. Undersecretary for Farm Production and Conservation, Robert Bonnie, says, “The results of the second funding pool clearly demonstrate the strong demand in the U.S. agriculture and forestry industry for solutions that expand markets for American producers." The second funding pool, which closed on Friday, June 10, included proposals from $250,000 to $5 million that emphasize the enrollment of small and/or underserved producers, and/or monitoring, reporting and verification activities developed at minority-serving institutions. First-round proposals requested more than $18 billion and offered to match more than $8 billion in nonfederal dollars. The submissions are currently being reviewed, and selections are anticipated later this summer.  

Tuesday Watch List

Markets

A report on June U.S. housing starts will be out at 7:30 a.m. CDT and is the only significant report of the day. Traders will continue to keep watch over the latest weather forecasts and be on the lookout for an update on last week's meeting in Turkey regarding the passage of grain shipments out of Ukraine.

Weather

A system is skirting along the Canadian border Tuesday, bringing scattered showers and thunderstorms near the border and potential for some severe storms in Minnesota and Wisconsin. Stronger winds are developing on the backside of the system in the Northern Plains as well. But heat continues to be the big story of the week with high heat south of the influence of that system across the South. Soil moisture continues to decline in these areas.

CoBank Report Details Current and Future Ag Economic Conditions

A number of factors are sending up red flags about slowing economic activity and a potential oncoming recession. A CoBank report says inflation is the largest red flag, and the Fed is ready to raise rates until it believes inflation has been controlled. “Warehouse and inventory costs are still rising at near-peak levels, and transportation costs are rising at a much higher rate than before COVID-19,” says Dan Kowalski, vice president of CoBank’s Knowledge Exchange. “Grain rail car availability and prices were at multi-year lows and highs respectively, in the second quarter.” Shifting economic sentiments have brought ag and energy commodity prices down from their peaks. Grain prices in the second quarter remained volatile, but grain and oilseed prices should push higher because of tight global commodity supplies, especially wheat and soybeans. There are challenges ahead because of dry July weather, and Asian-made crop protection chemicals will continue in short supply.

NMPF Supports the “Formula Act,” Wants Production Boost

The National Milk Producers Federation supports bipartisan House legislation that will encourage additional infant formula supply imports to temporarily ease short-term shortfalls in supplies. However, the organization says boosting longer-term domestic production to ensure safe and secure infant supplies in the future is necessary. The “Formula Act” in the House would waive U.S. tariffs on infant formula imports through the end of this year to ensure that the domestic market has the needed formula supplies. The tariff reduction would help the U.S. domestic market recover from an acute processing capacity crisis that created the national shortage of infant formula. “The U.S. has experienced a highly unusual shortage of infant formula for much of this year,” says Jim Mulhern, president and CEO of NMPF. “It’s a crisis that’s dragged on way too long but appears to be improving.” The legislation will address short-term challenges while not creating a permanent dependence on foreign supplies.

NCGA Corn Congress Meeting Addresses Crop Input Costs, Availability

U.S. farmers are working to help feed the world and fill a void in food production left by the war in Ukraine. Corn grower leaders unanimously passed a measure calling on the White House to maintain grower access to inputs. The measure says the “ability to address the crises facing our world today in a sustainable manner cannot be achieved without fair access to the inputs necessary to raise a crop each year, including pesticides, fertilizer, and biotech seeds.” The unanimous vote comes after the Environmental Protection Agency revised its atrazine registration, a move that could limit access to a critical crop protection tool which has been tested and proven safe for use. The move also comes after the Supreme Court recently refused to hear a case from California regarding glyphosate, which leaves a ruling in place that says glyphosate causes cancer. Farmers worry about a state-by-state patchwork of regulations in the future.

“Flash Drought” Emerging in Central, Eastern U.S.

While the western U.S. sees water getting scarcer every day, extremely dry conditions are getting worse in central and eastern states. The U.S. Drought Monitor says a “flash drought” has developed in parts of the South and Northeast, including Texas, Oklahoma, and Missouri. CNN says a flash drought is caused by the rapid intensification of a drought due to a combination of unusually high temperatures, sunshine, and wind. The National Oceanic and Atmospheric Administration says flash drought can cause extensive damage to agriculture, economies, and ecosystems. Extreme heat has covered the Southern Plains for a couple of weeks, and more is in the forecast. That’s made the ongoing drought much worse. Roughly 94 percent of Texas was in some form of drought last week, the largest area since 2013, and over 21 percent of the state is in exceptional drought. Oklahoma is also experiencing its hottest summer in several years.

Removing Barriers to Meet Growing Demand for Food

The American Farm Bureau is calling on USDA to take steps to make sure American farmers continue to have access to crucial fertilizer supplies. The organization submitted comments on USDA’s “Request for Information on Access to Fertilizer.” AFBF says many factors are combining to create shortages and drive up fertilizer costs. “America’s farmers are getting called on to feed both America’s families and families overseas as war and shortages take their toll on international neighbors,” says AFBF President Zippy Duvall. “We need long-term solutions.” The organization’s recommendations include assistance for farmers to expand on-site farm fertilizer storage capacity to help them manage costs year-round. They want the EPA to reform its review processes that create barriers to domestic fertilizer production. AFB also wants modernized weight restrictions for trucks to help reduce the number that’s needed to transport goods and to enact rail reforms to help promote competition, fairer rates, and reliable service.

Grain Exports Keeping Pace with Prior Marketing Year

U.S. grain exports in-all-forms totaled 96 million metric tons during the first nine months of the current marketing year. The exports to 145 countries are just under the total at the same point in the previous marketing year. Increased grain exports to Mexico, Canada, and Colombia helped to offset year-to-date losses in China and Japan. Those five markets account for almost 70 percent of the grains-in-all-forms commodity exports. “These five markets are very important to overall grain-in-all-forms exports,” says U.S. Grains Council Vice President Cary Sifferath. “Strong exports of corn, DDGS, and ethanol mean Canada is now the third-largest market after Mexico and China.” Mexico surpassed China month-over-month to become the top market for U.S. grains-in-all-forms exports totaling 21 million metric tons during the first nine months of the 2022-2023 marketing year. China is the second largest GIAF export market, with exports of 20 million metric tons during the same period.

Monday Watch List

Markets

Back from the weekend, traders will check the latest forecasts and news, including wanting to know if Ukraine and Russia can agree to allow exports out of Ukraine. USDA's weekly report of grain export inspections is due out at 10 a.m. CDT, followed by USDA's monthly Livestock, Dairy and Poultry outlook at 1 p.m. and Crop Progress report at 3 p.m.

Weather

A disturbance from the weekend continues to produce some showers from the Delta into the Northeast on Monday with some limited heavy rain potential in these areas. A strong disturbance is moving along the U.S.-Canada border as well and is already starting to spark severe thunderstorms in northern Montana. Areas on both sides of the border will see widespread precipitation but also severe weather today into tomorrow. Heavy rain in the Canadian Prairies will help to ease or eliminate drought for the remaining areas of southern Alberta and southwest Saskatchewan. Heat will take over where showers do not, especially in the Plains, sapping soil moisture and causing stress to crops and livestock.

U.S.-Kenya Strategic Trade and Investment Partnership Launches

U.S. trade Representative Katherine Tai Thursday announced the launch of the United States-Kenya Strategic Trade and Investment Partnership. Tai met virtually with representatives from Kenya, and they identified initial issues where the United States and Kenya will develop an ambitious roadmap for enhanced cooperation. The United States and Kenya will consider measures to facilitate agricultural trade and enhance transparency and understanding of the application of science- and risk-based Sanitary and Phytosanitary measures. The two sides share an interest in fostering sustainable agricultural practices, as well as creating an enabling environment for innovative agricultural technologies that would help achieve food security goals, increase farm productivity, and improve farmer livelihoods, while addressing climate change concerns. Meanwhile, USTR and the European Union held the fifth meeting of the Joint Committee established under the U.S.-EU Agreement on Prudential Measures Regarding Insurance and Reinsurance. Both sides acknowledged progress made toward full implementation of the Agreement.

House Ag Chair Announces Bill to Support Small Cattle Farmers

House Agriculture Chairman David Scott announced the intention to introduce a bill to help small family farmers and ranchers and address the national crisis in our nation’s beef supply chain. Scott says, “What has been missing from the conversation is help for the very beginning of our food supply chain, which is our nation’s small family farmers and ranchers.” The bill creates a new program that strengthens the federal safety net and makes insurance products work better for small cattle farmers and ranchers, both in terms of coverage and accessibility. The second pillar establishes a grant program at USDA to help small farmers and ranchers and producer-owned cooperatives to undertake innovative business initiatives. By developing more direct-to-consumer and direct-to-institution markets, the legislation will give small farmers and ranchers more control over where they sell their cattle or meat products and provide them with opportunities to add value to their products and increase their profitability, according to Scott.

Republican Lawmakers Demand Biden Relax Import Duties on Fertilizer

Republican lawmakers demand the Biden administration waive import duties on fertilizer from Morocco and Trinidad and Tobago. The Biden administration has placed duties on fertilizer imports of phosphate fertilizer products from Morocco and is working on new duties on urea ammonium nitrate fertilizer from Trinidad and Tobago. Led by Senator Roger Marshall and Representative Tracey Mann of Kansas, a group of Republicans made the demand in a letter to President Biden. The letter states, “The bottom line is that fertilizer is critical to national security and national defense.” In June, President Biden, using his emergency authority, issued a proclamation titled “Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Modules from Southeast Asia.” The decision waived countervailing duties and anti-dumping duties for solar panels. President Biden’s emergency justifications for this proclamation are also applicable to fertilizer, according to the letter, which directly impacts food prices more than any emergency concerning solar panels.

Ag Lawmakers Call on EPA to Cease Politicization of Crop Protection Tools

The top Republicans on the House and Senate Agriculture Committees call on the Environmental Protection Agency to "cease politicization of crop protection tools. Representative Glenn "GT" Thompson of Pennsylvania and Senator John Boozman of Arkansas penned a letter to the EPA this week “about the concerning trend of disregarding scientifically-sound, risk-based regulatory processes, and unilaterally denying access to a range of crop protection tools.” Russia’s war in Ukraine has sent shockwaves through the global food system resulting in increased energy prices, fertilizer cost spikes and shortages, and worsening food shortages in developing countries. As the world faces an emerging food crisis due to this conflict, the lawmakers say, “our policies should be focused on supporting American production instead of creating further burden and ambiguity for our farmers and ranchers.” The letter follows a previous effort last year calling on the EPA to rescind its decision to revoke all food tolerances for chlorpyrifos and ensure future actions related to crop protection tools are consistent with the science-based, regulatory process.

Grassley Receives President’s Award from National Corn Growers Association

The National Corn Growers Association awarded Senator Chuck Grassley the organization' President Award for his leadership and commitment to advocating for corn growers and agriculture. The President's Award is the most prestigious recognition by NCGA and was presented to Grassley during NCGA's Corn Congress events in Washington, D.C. The Iowa Republican says, “I am honored and humbled to receive this lifetime achievement award.” Grassley, one of only two farmers in the Senate, is a member of the Iowa Corn Growers Association. NCGA President Chris Edgington of Iowa adds, “we would not have secured the policy successes we have over the years were it not for the contributions of the senior senator from Iowa.”  Grassley serves on several committees, including the Senate Agricultural Committee. A lifelong Iowan, Grassley was first elected to the U.S. Senate in 1980. NCGA’s President’s Award is given annually to a leader who has worked to advance issues important to corn growers and agriculture.

AEF Announces Agriculture Interoperability Network Project Team

The Agricultural Industry Electronics Foundation Thursday announced the formation of a project team to develop the new Agriculture Interoperability Network. The team will be creating guidelines for data formats to simplify data sharing for end users, growers and operators. The project team is made up of approximately 60 participants from various AEF member companies from different corners of the globe. AEF members will be able to use the network to make sure their data flows through this whole network. AEF Vice Chairman Andrew Olliver says, “The ability to manage the farm more effectively revolves around the ease of getting all of the data into the best location for reporting and analysis, and to derive insights for future operations.” The network will be a concerted and non-discriminatory governed network that streamlines peer–to-peer interfaces between platforms. Agricultural Industry Electronics Foundation is scheduled to introduce the network in November 2023.

Friday Watch List

Markets

A report on U.S. retail sales in June is due out at 7:30 a.m. CDT, followed by the Federal Reserve's report on U.S. industrial production at 8:15 a.m. and the University of Michigan's index of U.S. consumer sentiment at 9 a.m. Traders will continue to split attention between the latest weather forecasts and the larger economic news with a view toward the next Fed meeting near the end of this month.

Weather

A weak disturbance moving through the Midwest is causing showers Friday. The scattered showers are bringing light to moderate amounts, but not everywhere is going to get hit and showers will die out as they move through the eastern sections of the Midwest tonight. Scattered showers will continue in the Southeast again today. Heat will continue where showers do not occur, causing stress for pollinating corn and worsening or expanding drought in the Plains.

Thursday Watch List

Markets

After reporting a 9.1% gain in annual consumer prices in June, the U.S. Labor Department will report on producer prices at 7:30 a.m. CDT, Thursday -- the same time USDA's weekly export sales report, weekly U.S. jobless claims and an update of the U.S. Drought Monitor are all released. The U.S. Energy Department reports on natural gas in storage at 9:30 a.m. Traders will continue to watch split screens, juggling attention between the latest weather forecasts and happenings in outside markets.

Weather

Heat is spreading from the West into more of the Plains Thursday as a ridge is starting to take over North America. The increased heat will lead to some showers and thunderstorms in the Northern Plains and Canadian Prairies today that could be severe. Old fronts across the Southeast will continue daily showers and thunderstorms in that region as well.

Consumer Price Index Increases

The Consumer Price Index for All Urban Consumers increased 1.3 percent in June on a seasonally adjusted basis after rising 1.0 percent in May. Over the last 12 months, the all-items index increased 9.1 percent before seasonal adjustment. The U.S. Bureau of Labor Statistics reports the increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors. The all-items index increased 9.1 percent for the 12 months ending June, the largest 12-month increase since the period ending November 1981. The food index increased 1.0 percent in June, following a 1.2-percent increase in May. The index for food at home also rose 1.0 percent in June, the sixth consecutive increase of at least 1.0 percent in that index. Five of the six major grocery store food group indexes rose in June. The index for other food at home rose 1.8 percent, with sharp increases in the indexes for butter and for sugar and sweets.

USDA Invests $14M to Support Agricultural Workforce Training for Underserved Communities

The Department of Agriculture Wednesday announced more than $14 billion in agricultural workforce training for underserved communities. USDA says the funding will increase the resilience of the U.S. meat and poultry processing sector. The investment is part of the American Rescue Plan to strengthen the nation’s food supply chain by promoting fair and competitive agricultural markets. Funding is available through the USDA National Institute of Food and Agriculture’s Request for Applications process to eligible universities. Eligible applicants include qualified Centers of Excellence at 1890 Land-grant Universities, 1994 Land-grant Tribal Colleges, Hispanic-serving institutions, Alaska Native and Native Hawaiian institutions, and participants in the Resident Instruction Grants Program for Institutions of Higher Education in Insular Areas. Dr. Chavonda Jacobs-Young, USDA undersecretary for research, education and economics, who also serves as USDA’s chief scientist, says, “These investments provide critical support to our higher education partners to increase rural prosperity and economic sustainability of food systems in underserved agricultural communities.”

FAS Administrator Whitley to Lead Philippines Trade Mission

Foreign Agricultural Service Administrator Daniel Whitley will lead a delegation of representatives from 29 U.S. agribusinesses and farm organizations to Manila, Philippines, July 18-21. The delegation is part of a Department of Agriculture-sponsored trade mission. The Philippines is the eighth-largest market for U.S. agricultural exports, averaging $3.1 billion annually during the last five years. Whitley says, “The Philippines is an excellent market for U.S. farm and food products, and we look forward to introducing a diverse group of companies and organizations to new export opportunities there.” Participants will engage directly with potential buyers, receive in-depth market briefs from FAS and industry trade experts, and participate in site visits. Whitley will be joined by Minnesota Department of Agriculture Commissioner Thom Petersen, Nebraska Department of Agriculture Director Steve Wellman, South Dakota Department of Agriculture and Natural Resources Secretary Hunter Roberts and Virginia Secretary of Agriculture and Forestry Matthew Lohr, among others.

DeLauro, Durbin Introduce Food Safety Administration Act

Two Democrats Wednesday Introduced the Food Safety Administration Act to establish the Food Safety Administration. The administration would be a single food safety agency responsible for keeping the food safe for market. Connecticut Representative Rosa DeLauro introduced the legislation with Senator Dick Durbin of Illinois. The Food Safety Administration Act would establish the Food Safety Administration under the Department of Health and Human Services by incorporating the existing food programs within the Food and Drug Administration into a separate agency: the Center for Food Safety and Applied Nutrition, Center for Veterinary Medicine, and the Office of Regulatory Affairs. Representative DeLauro says, "Look no further than the recent infant formula crisis to understand the need to create a single food safety agency, led by a food policy expert, to ensure the safety of products that go to market." The legislation is endorsed by the Center for Food Safety, Consumer Reports, Environmental Working Group, Friends of the Earth and others.

Clean Fuels Highlights Job Creation and Economic Benefits in Letter to President Biden

Clean Fuels Alliance America wrote to President Joe Biden Wednesday and other administration officials to highlight the biodiesel and renewable diesel industry’s contribution to job growth. The letter asks the administration to support tax policy that encourages continued investments, capacity expansion, and additional job creation. The letter states, “The clean fuels industry increased production during 2021, making an essential contribution to the nation’s fuel supply,” adding, “Our industry plans to continue increasing production this year.” The recent United States Energy and Employment Report 2022 shows that the clean fuels industry added jobs in 2021 at a rate of 6.7 percent and anticipates continued job growth of 5.8 percent in manufacturing during 2022. Additionally, a recent study from the World Agricultural Economic and Environmental Service showing that U.S. biodiesel and renewable diesel production generated a four percent decrease in the price of diesel fuel in 2021 – a saving of $0.22 a gallon at current fuel prices.

U.S. Fruit and Vegetable Import Value Outpaces Volume Growth

In fiscal year 2021, the value of U.S. fruit and vegetable imports rose to a record level. That record is projected to rise another nine percent in FY 2022, October–September, to $42.6 billion, according to USDA’s Economic Research Service. Import volumes are also expected to grow three percent in 2022 to 29.4 million metric tons. This would further extend the trend seen from 2000 to 2021, during which the volume of U.S. fruit and vegetable imports increased 124 percent while the inflation-adjusted value of those imports increased 208 percent. The shift indicates that, on a per volume basis, imported fruits and vegetable products are priced higher than they were 20 years ago as growth in the value of these imports has exceeded growth in volume. Steadily increasing unit prices for imported fresh fruits and vegetables, up from $753 per metric ton in 2000 to $1,192 in 2021, have contributed significantly to the observed trend.

USDA Expands Crop Insurance for Double Crop Systems

The Department of Agriculture Tuesday announced an expansion of crop insurance availability for double-crop practices. To reduce the risk of raising two crops on the same land in one year – a practice known as double cropping - USDA's Risk Management Agency is expanding double-crop insurance opportunities in over 1,500 counties where double cropping is viable. Agriculture Secretary Tom Vilsack joined President Joe Biden at an Illinois farm in May to announce a series of actions to help farmers. Vilsack says, “Today, USDA is making good on one of those commitments and making it easier to plant double crops and sharing some of the financial risk.” For soybeans, double-crop coverage will be expanded to or streamlined in at least 681 counties. For grain sorghum, double-crop coverage will be expanded to or streamlined in at least 870 counties. The coverage expansion was guided by extensive outreach to nearly 70 grower groups covering 28 states.

USDA Releases July WASDE Report

USDA released the July World Agriculture Supply and Demand report Tuesday. This month’s 2022/23 U.S. corn outlook calls for larger supplies and higher ending stocks. Corn beginning stocks were raised 25 million bushels, based on reduced feed and residual use for 2021/22 as indicated in the June 30 Grain Stocks report. The season-average farm price received by producers was lowered 10 cents to $6.65 per bushel. Oilseed production for 2022/23 is projected at 132.7 million tons, down 3.9 million from last month. Soybean production is projected at 4.5 billion bushels, down 135 million on lower harvested area. Harvested area, forecast at 87.5 million acres in the June 30 Acreage report, is down 2.6 million from last month. The season-average soybean price is forecasted at $14.40 per bushel, down $0.30 from last month. The outlook for 2022/23 U.S. wheat this month forecasts larger supplies, domestic use, exports, and ending stocks. The projected season-average price declined $0.25 per bushel to $10.50.

USDA Accepts More than 3.1 Million Acres in Grassland CRP Signup

The Department of Agriculture is accepting offers for more than 3.1 million through this year's Conservation Reserve Program Grassland Signup, the highest in history. The program allows producers and landowners to continue grazing and haying practices while protecting grasslands and promoting plant and animal biodiversity and conservation. Agriculture Secretary Tom Vilsack says, "This year's record-breaking Grassland CRP signup demonstrates the continued success and value of investments in voluntary, producer-led, working lands conservation programs." Nationwide, this year's Grassland CRP signup surpassed last year's 2.5 million acres by 22 percent. So far this year, producers have enrolled two million acres through the General Signup, and more than 464,000 acres have been submitted through the Continuous CRP Signup. This means about 5.6 million acres are entering CRP in 2023, surpassing the 3.9 million acres expiring this year. Producers can still make an offer to participate in CRP through the Continuous CRP Signup by contacting the FSA at their local USDA Service Center.

House Ag Committee Leaders Launch Online Farm Bill Feedback Form

Leadership of the House Agriculture Committee this week announced an online form to gather farmer feedback for consideration in the next farm bill. House Agriculture Committee Chairman David Scott and Ranking Member Glenn "GT" Thompson announced the form for farmers and ranchers to submit their feedback and ideas for the 2023 Farm Bill. Chairman Scott says, “This is a chance to hear directly from farmers, ranchers and foresters across the nation.” Ranking Member Thompson adds, “Hearing directly from farm country about what’s working and what’s not is the only way to ensure we craft a bill that meets the needs of rural America.” In addition to the feedback gathered online, the House Agriculture Committee will continue to conduct hearings in Washington, DC and hold listening sessions across the country to gather input as we prepare for the 2023 Farm Bill. The online form is available on the House Ag Committee website.

Meat Industry Leaders Strengthen Collaboration on Food Security

The North American Meat Institute's Executive Board voted unanimously late Friday to designate food security as a non-competitive issue. Announces Tuesday, the action, according to the organization, strengthens industry-wide efforts to end hunger and ensure families in need have access to nutrient-dense meat. NAMI President and CEO Julie Anna Potts says, "Declaring food security a non-competitive issue will allow the Meat Institute and its members to freely share best practices." Potts says the action is especially important as the industry prepares to support the September 2022 White House Conference on Hunger, Nutrition and Health. Through the Protein PACT for the People, Animals and Climate of tomorrow, the Meat Institute has committed to fill the protein gap by 2025. The Meat Institute has also established a Food Security Committee to bring members together to facilitate discussion, information-sharing, and problem-solving related to charitable giving, hunger relief and food security.

U.S. Residents Consumed Less Ice Cream in 2020 than in 2000

U.S. residents are scooping less of their favorite frozen treats than two decades ago. USDA’s Economic Research Service Tuesday reported that in 2020, the United States consumed about 21 pounds per person of frozen dairy products—about five pounds per capita less than in 2000. Consumption of regular ice cream in 2020 was estimated at 12.7 pounds per person, a decrease of about 3.4 pounds from 2000. At 6.9 pounds, per capita consumption of low-fat and nonfat ice cream was about the same in 2020 as in 2000. Consumption of other frozen dairy products, which include frozen yogurt, sherbet, and other frozen dairy products, decreased from 3.4 pounds to 1.6 pounds per person in the same period. This trend in frozen dairy products is in line with a decline in consumption of total caloric sweeteners per capita from 149.0 pounds in 2000 to 122.5 pounds per capita in 2020, reflecting shifting preferences among consumers.

Wednesday Watch List

Markets

The U.S. Labor Department will release its consumer price index for June at 7:30 a.m. CDT, a big concern for investors with ramifications for Fed policy. At 9:30 a.m., the Energy Department will have its weekly report of energy inventories, including ethanol production. At 1 p.m., the Fed's Beige Book be scoured for any clues about interest rates, the same time the U.S. Treasury reports on the federal budget for June.

Weather

A cold front moving into the Southeast will combine with an old one left over from the weekend to produce widespread showers and thunderstorms on Wednesday. Most of the rest of the country will be quiet, though a front will start to move through the Canadian Prairies and Montana later in the day which will be the focus for thunderstorm development as well. Heat in the West and around Texas will continue for another day.

May Beef Exports Set New Records, Pork Exports Rise

U.S. beef exports set new volume and value records in May, topping $1 billion for the fourth time in 2022. The exports reached just over 135,000 metric tons, up one percent from the previous high in May 2021. Export value climbed 20 percent to $1.09 billion, breaking the March 2022 record. For January through May, beef exports were four percent higher than last year at 613,200 metric tons, valued at $5.14 billion. “Keeping the $1 billion-a-month pace is remarkable, especially given the economic challenges like a stronger dollar and the logistical challenges of the supply chain,” says U.S. Meat Export Federation president and CEO Dan Halstrom. May pork exports were the strongest in volume and value so far during 2022. May pork exports were 224,600 metric tons, down 21 percent from the large total last year. However, that was the highest monthly volume since November. Export value was $665 million, also the highest since November.

Gas Prices See Biggest One-Day Drop Since 2008

Gas prices dropped last week by the largest one-day amount in over ten years. Auto club Triple-A says the average prices at U.S. pumps fell 3.1 cents per gallon on Friday, the largest one-time decrease since 2008. Despite the recent drop in gas prices, they’re still roughly $1.60 higher than last year. Ten states still have prices over $5 a gallon, and California is above $6 a gallon.  Late last week, Bloomberg said supplies remain tight for fuel. U.S. total gasoline stocks are at their lowest seasonal level in seven years, even though refiners on the Gulf Coast and East Coast have been running at almost maximum capacity. East Coast supplies are particularly vulnerable, and they’re at the lowest seasonal level on record since the government started collecting data in 1993. Gas prices are a major contributor to inflation and will be a significant issue in the upcoming U.S. elections.

Farm Family Living Expenses

A study by the Kansas Farm Management Association shows that farm family living expenses jumped 14 percent higher last year to an average of $82,000. It’s significantly higher than the previous high of $74,000 in 2014 and the largest yearly change since 2000. Agricultural Economic Insights says tight farm margins starting in 2014 made farmers tighten their belts, and overall, producers benefited from an economy that had extremely low inflation rates through the 2010s. The rising costs in 2021 could be attributed to broad inflation in the economy, as well as profitable conditions in farming. At least some of the 14 percent increase could be seen as a recovery after the three percent contraction in family living expenses in 2020.  AEI says the combination of inflationary price pressure and an improved farm economy resulted in significantly higher living expenses for farms, and many farmers will need to update their projections for 2022 and beyond.

Poultry Executives Not Guilty of Price-Fixing

Five executives in the poultry industry were found not guilty of a price-fixing conspiracy between 2012 and 2019. The Denver Post says the verdict is a defeat for prosecutors and happened after two mistrials. Jurors acquitted the current and former CEOs of Pilgrim’s Pride, a former Pilgrim’s Pride vice president, and the president and vice president of Claxton Poultry. Criminal trials of industry executives are unusual. The three trials happened as rising meat prices added fuel to soaring inflation. The Department of Justice hoped to succeed in the third trial by narrowing the defendants in previous cases from 10 to five in the third attempt. “Although we are disappointed in the verdict, we will continue to vigorously enforce the antitrust laws, especially when it comes to price-fixing schemes affecting food,” the DOJ says in a statement. A lawyer for one of the defendants says the case “should never have been brought.”

Safeguarding Midwest Lands That Grow Food

Smart growth and investment in Midwest downtowns and main streets have to occur now to secure the land that grows our food. That conclusion is from American Farmland Trust, which released a report called “Farms Under Threat 2040: Choosing an Abundant Future.” The report’s research shows that by 2040, more than three million acres, or nearly 5,000 square miles of farmland, may be lost to urban and low-density conversion across the Midwest. Six Midwestern states made the top ten list of the number of farmland acres getting converted to urban development by 2040. Those states include Illinois, Iowa, Ohio, Indiana, Wisconsin, and Minnesota. The report shows the loss will disproportionately affect smaller farms that often service local markets with fresh products. Many of those smaller farms also tend to bring new farmers into the profession and are instrumental in getting through the supply chain disruptions hitting grocery stores around the nation.