U.S. Beef Exports to East Asia on a Record Pace

The USDA’s Foreign Agricultural Service released a report titled “U.S. Beef Exports to East Asia on a Record Pace.” Despite economic uncertainties brought on by COVID, continued global supply chain challenges, and a competitive global beef market, American exports to East Asia were outstanding in the first half of 2022 in terms of value and volume. The report says, “During the first three quarters of 2022, U.S. beef exports to East Asia, including Korea, Japan, China/Hong Kong, and Taiwan, were a record $6.6 billion.” That’s a 22 percent increase on a value basis from last year’s exports worth $5.4 billion. “On a volume basis, the exports were up 6.4 percent,” the report says. “Despite surging food prices in recent months, higher-volume shipments indicate a continued demand for beef products.” It also shows that East Asia’s relatively stable middle class has high disposable income and is willing to absorb the rising costs.

What 2023 Will Mean for Ethanol Margins

America’s ethanol industry saw its production margins get weaker late in 2022. MarketWatch says the ethanol industry outlook will depend on multiple factors. Margins have recently dropped below the same time last year. Iowa State University’s Center for Agricultural and Rural Development says the average return over operating costs at a typical dry-mill ethanol plant was 34.64 cents per gallon. That’s over one dollar lower than the same time last year when the center put the average margin at $1.38 per gallon. The university says the average ethanol price in Iowa was at $2.44 a gallon, 85 cents lower year to year, while the average price of corn was $6.82 a bushel, about $1.10 higher than a year ago. Some of the key issues for the U.S. ethanol industry to watch include Renewable Volume Obligations (RVOs), Carbon Capture Projects, the future of Small Refinery Exemptions, and fewer limits on E15 sales.

Baby Formula Imports Face Tariffs Again in 2023

Baby formula imports into the U.S. will be subject to tariffs again in 2023 as the exemptions implemented during a nationwide shortage are scheduled to expire. Reuters says the shortage began during supply chain issues brought on by COVID, and those issues began to get worse in February of this year. During that month, the biggest U.S. supplier recalled some products and closed down a manufacturing plant after reporting bacterial infections. Responding to the crisis, American health regulators relaxed import policies, and President Biden invoked the Cold War-era Defense Production Act to rebuild lagging supplies. Congress made the tariff waivers temporary as part of a deal to pass the measure quickly. Last August, Walmart and Target Corporation, two of the nation’s biggest retailers, said supplies of baby formula were improving. The maker of the biggest brand in the market, Enfamil, says formula shortages will likely persist until the spring of 2023.

USDA Invests Over $9 Million in Bioproduct Development

USDA is investing $9.5 million to support the scale-up of sustainable bioproduct manufacturing in the U.S. Three projects are getting funded through the National Institute of Food and Agriculture’s Bioproduct Pilot Program. The program presents an opportunity to spur economic activity in the nation’s rural areas while lowering commercialization risks associated with bringing biobased products to market. “Adopting a more circular economy ensures that wealth and other economic benefits in the form of jobs and other opportunities are created, and stay, in rural communities,” says Ag Secretary Tom Vilsack. “We must support and incentivize practices like these because that’s what consumers want, and what farmers and our planet need.” The Pilot Program’s exploration into bioproducts accelerates USDA’s efforts to develop circular bio-economies, where agricultural resources are harvested, consumed, and regenerated in a sustainable manner. NIFA says each of the recommended projects can help bridge the gap between invention and the marketplace. 

The Second Annual Ag Transporters Conference is in March

Transportation Go! is a conference for soybean, grain, and other transportation issues in the Upper Midwest. It will take place March 15-16, 2023, in Omaha, Nebraska. It’s the second annual transportation conference after a successful debut event in Milwaukee earlier this year. “This is an active conference, not a passive one,” says Eric Wenberg, executive director of the Specialty Soya and Grains Alliance, which organizes and hosts the event. “We encourage discussion and expect real dialogue to take place during every segment of the agenda.” He also says there are many challenges in agricultural transportation, and this conference brings together smart and experienced people from different avenues of the supply chain into the same room to take on those challenges together. Omaha, a key ag transportation hub, will bring together the industry’s top stakeholders, from boots-on-the-ground commodity growers to traders and shippers of specialty field crops. For more information, go to transportationgo.com.

American Lamb Growers Looking Ahead to 2023 Trends

The “2023 Meat Trends to Watch Report” says understanding the overarching trends in American meat consumption can help keep meat in the mix. “There are challenges ahead for the lamb industry, but there are also opportunities ahead,” says Peter Camino, American Lamb Board Chair. “But the entire industry will need to make changes to improve our competitiveness and profitability.” The report covers trends like economic pressures at the meat case, noting that while many are seeking less expensive cuts at the meat case, others are more open to experimenting in the kitchen. Others may also trade up at the counter instead of dining out. The report also covers sustainability, noting that it’s critical for products and businesses to talk to customers about their sustainability efforts. Other important topics in the report include health and wellness, convenience, and technology. The ALB is closely watching these trends and how they influence consumers.

Friday Watch List

Markets

USDA's weekly export sales report will be out at 7:30 a.m. CST Friday, the only significant report of the day. Friday is a full day of trading, ahead of a three-day weekend for celebrating the New Year. Traders will keep up with the latest weather forecasts and watch for a possible export sales announcement at 8 a.m. CST.

Weather

A cold front will be moving slowly east from the Delta to the eastern Midwest on Friday. A band of showers and some thunderstorms has formed along the front, which will move into the Southeast and toward the Appalachians tonight. Some minor flooding may occur over the South as the rain moves through. Somewhat cooler temperatures are filling in behind the front back to the Rockies, but most areas are still above normal for this time of year.

USDA Economist Not Worried About Potential Ag Trade Deficit

USDA is forecasting an agricultural trade deficit in 2023. While deficits have happened in the past, the agency has never forecast one in advance until this year. The agency says ag exports are projected to reach $190 billion next year, but imports are projected to rise to $199 billion. Seth Meyer, chief economist with USDA, says an ag trade deficit isn’t a major cause for concern. “I’m of the opinion that having both rising exports and imports is a good thing,’ he says. “Farmers can sell their products at a good price while consumers can shop for what they want.” Ag exports are forecast to set another record during the fiscal year 2022 at $196.4 billion. If realized, that number would top the previous record of $177 billion in 2021. American exports currently face major pressure from the strong dollar value making U.S. products more expensive in the world’s markets.  

Egg Prices Double During the Past Year

Eggs are more expensive than they were last year. Marketplace says the Bureau of Labor Statistics reports the price of a dozen Grade A eggs jumped from $1.82 last year to almost $3.60 in 2022. While part of the increase is due to the rising price of chicken feed, the real culprit is highly pathogenic avian influenza. It’s infected more than 57 million hens this year, starting in the spring and continuing to flare up through the rest of 2022. “Spring was the first time we had egg prices spike,” says Daniel Sumer, an ag economics professor at the University of California-Davis. He says eggs are a staple for many people and can’t be cut back on when the price rises. When prices go up, people tend to buy them anyway. “That drives the price higher and higher,” he says. “And that has to happen because the supplies are more limited.”

Omnibus Bill Included Pesticide Registration Improvement Act

The recently-passed omnibus spending legislation contained the reauthorization of the Pesticide Registration Improvement Act, something important to CropLife America. The organization says it will strengthen and improve the Environmental Protection Agency’s pesticide registration process. The EPA’s scientists work diligently to comply with the multiple laws that govern pesticide registration, but, in recent years, the agency has fewer available scientists to do that work,” says Chris Novak, President of CLA. “The reauthorization of PRIA is a first step in improving the efficiency of the pesticide registration process and in providing more certainty for farmers, consumers, and CropLife’s member companies that EPA will meet its statutory obligations.” PRIA provides critically needed resources for the EPA’s Office of Pesticide Programs. The increased funding coupled with a variety of process and technology improvements, will allow EPA to increase staffing and better meet pesticide registration timeframes to give farmers the tools they need to manage pests.

Pork Leadership Institute Announces Class of 2023

The National Pork Producers Council and the National Pork Board are proud to announce that 19 pork producers from across the country have been selected for the Pork Leadership Institute’s class of 2023. Each year, the organizations select a leading group of producers to participate in the PLI program. Staff in both the NPPC and NPB work together with state pork association executives and field reps to identify key individuals from across America. The comprehensive, year-long process consists of five sessions that include learning about the federal legislative and regulatory processes, the importance of international trade, the roles of the national and state pork associations, and modern-day issues facing producers. “PLI is vital to the success of pork producers because it develops knowledgeable industry ambassadors and future leaders,” says NPPC CEO Bryan Humphreys. They also go through comprehensive media and communications training to become effective grassroots advocates for the pork industry.

CFTC Fines CHS Hedging $6.5 million in Fraud Case

The Commodity Futures Trading Commission fined CHS Hedging of Inver Grove Heights, Minnesota, $6.5 million for anti-money laundering, risk management, recordkeeping, and supervision violations. The company also has to undertake certain remedial measures relating to the violations. CHS reportedly accepted millions of dollars in margin payments from a rancher in Washington without adequately investigating the customer’s source of funds or reporting suspicious activity. The scheme ran from 2017 through 2020. The Washington rancher involved in the case pled guilty to criminal fraud charges and was sentenced to 11 years in prison. A CFTC report says the violations are primarily the result of failing to implement an adequate anti-money laundering program, particularly as it applied to the futures and options trading account controlled by the Washington rancher. “The Commodity Exchange Act requires companies like CHS Hedging to have and actually implement adequate money laundering and risk management procedures,” says Acting Enforcement Director Gretchen Lowe. 

USDA Says Seasonal Worker Numbers Jumped in 2021

It’s well known that American agricultural employers who anticipate a shortage of domestic workers can fill seasonal farm jobs with temporary foreign workers through the H-2A Visa Program. The Department of Labor officially certified approximately 317,000 temporary jobs in fiscal year 2021 under the H-2A program. That number was more than six times the number of jobs certified in 2005. Only about 80 percent of the certified jobs in 2021 resulted in the issuance of a visa. The program has grown partly in response to current U.S. domestic workers finding jobs outside of American agriculture and a drop in newly arrived immigrants looking for farm jobs in the U.S. Six states accounted for about half of the H-2A jobs that were filled in 2021, including Florida, Georgia, Washington, California, North Carolina, and Louisiana. Nationally, the average H-2A contract offered 24 weeks of employment and 39.3 hours per week at $13 per hour.   

UFW Assigns Blame for Lack of Immigration Action

United Farm Worker leadership laid the blame for a lack of action in Washington on immigration at the feet of the Republican Party and the American Farm Bureau Federation. The Senate decided not to include worker immigration legislation in the fiscal year 2023 omnibus appropriations bill. The omnibus passed the House last week and is on the way to President Biden’s desk for his signature. “It’s a bitter disappointment for farm workers across the country who have earned the right to legal status through the sweat of their brow,” says UFW President Teresa Romero. She also called it unsurprising, saying that leaders of both groups want to keep farm workers living in fear and uncertainty. “They know that an undocumented workforce is easier to intimidate and exploit,” she says. Farm Bureau says the legislation will lead to wild swings in wage rates beyond the reach of many farmers and ranchers.

NACD Applauds Conservation Investments in Omnibus

The National Association of Conservation Districts is grateful the fiscal year 2023 omnibus appropriations bill passed the House last week and was sent to the White House for signing. They say the agreement supports voluntary, locally-led conservation efforts across the country by providing strong funding for critical conservation programs and initiatives. The package includes no cuts to mandatory spending for USDA farm bill conservation programs like EQIP, CSP, RCPP, and CRP. It also has $941 million for Natural Resources Conservation Service Operations, including more than $800 million for Conservation Technical Assistance. That’s a $40 million increase compared to the 2022 funding level. The funding supports the work of conservation districts and other local partners to help producers assess resource needs, develop conservation plans, and implement effective conservation practices. There’s also $925 million for the NRCS Emergency Watershed Protection Program, of which $75 million goes to Watershed Protection and Flood Prevention Operations.

U.S. Hog Numbers are Two Percent Below Last Year

The U.S. inventory of all hogs and pigs on December 1 was 73.1 million head. The recent Hog and Pig Report says that’s down from December 1 of last year and one percent lower than September 1, 2022. The breeding inventory was 6.15 million head, up slightly from last year and slightly higher than the prior quarter. Market hog inventory was 67 million head on December 1, down two percent from 2021 and one percent lower than last quarter in 2022. The September-November 2022 pig crop, at 33.7 million head, was one percent lower than in 2021. Sows farrowing during this period totaled three million head, down one percent from 2021. The sows that farrowed during the quarter represented 49 percent of the breeding herd. Hog producers intend to have 2.95 million sows farrow during the December-February quarter, up one percent from the actual farrowings during the same period a year earlier.

Report Shows Price Increases for Different Food Types

A new USDA report shows retail food prices increased 8.9 percent in the first seven months of this year. That increase is higher than the rate over the same period last year and 2020. All 13 food categories in the USDA report experienced faster price increases so far in 2022, compared with the same period last year and historical average price increases through July. All food categories saw price increases of at least four percent during the first seven months of 2022. Three food category prices increased by more than 10 percent: eggs at 21 percent, fats and oils were up 13 percent, and poultry rose 12 percent. Inflationary pressures differ by category. For example, eggs and poultry prices are currently much higher than their historical average because of an outbreak of highly pathogenic avian influenza. Fresh vegetables increased the least of all categories in the first seven months of this year.

China Pushes for Ag Tech Progress

President Xi (Zhee) Jinping is pushing for China to accelerate efforts to achieve self-reliance in agriculture technology. Farm Doc Policy News says China’s president identified seed development and core equipment among the areas he’d like the country to focus on. The central leadership had said in 2020 that the country’s seed industry was a weak link in its food chain and need to make more and better use of science and technology to turn that sector around. China is also expected to end the year with historically-low soymeal carryover stocks, which should increase its dependence on imported soybeans next year. Unfortunately for U.S. producers, Brazil’s soybeans, which get processed in China to make livestock feed, are currently more attractive than U.S. soybeans for February shipments. The news is considered positive for Brazilian farmers as some of them could begin harvesting their 2023 soybeans in as little as a week.

Ag’s Share of Total Export Value Hits New High

The total value of U.S. exports has grown at an average annual rate of six percent since 2002, reaching a record high of $1.4 trillion in fiscal year 2021. Agriculture’s share of total U.S. exports has steadily increased between fiscal years 2002 and 2021. The value of America’s agricultural product exports rose by an average of 11 percent annually, exceeding the overall rate of increase for total U.S. exports. In 2021, ag exports accounted for 12 percent of the total value, up from nine percent in 2002. Growth in agricultural exports has largely been resilient to market shocks like COVID-19. Even as total U.S. exports fell by 12 percent during the onset of COVID in 2020, ag exports remained steady on the strength of surging shipments of soybeans, corn, and pork to China. Ag exports surged 23 percent to $172 billion in 2021. The export forecast is a record $196 billion in 2022.

Wednesday Watch List

Markets

On Wednesday, an index of U.S. pending home sales for November will be out at 9 a.m. CST, the only report of the day. The U.S. Energy Department's weekly inventory report is pushed to Thursday during this four-day week. Traders will keep close watch over the latest weather forecasts, check for a possible export sales announcement at 8 a.m. CST and keep an eye on outside markets.

Weather

Warmer, Pacific air continues to flood the country east of the Rockies and is supplanting the arctic blast from last week. That is opening the door for more storm systems to move through the country. One is moving through the Intermountain West on Wednesday and will emerge into the Plains tonight where showers will develop going into Thursday. Winds continue to increase ahead of this system Wednesday, with some wind advisories posted for the Southern Plains.

Senate Confirms McKalip, Esteban

The Senate approved the nominations of Doug McKalip as the chief agricultural negotiator with the U.S. Trade Representative’s Office and Jose Esteban as USDA Undersecretary for Food Safety. Senate Ag Chair Debbie Stabenow says the nominees waited three months for a long-overdue floor vote. “Doug McKalip has proven he’s ready for the essential task of growing new markets abroad and protecting our producers from unfair trade practices,” she says. During a confirmation hearing earlier this year, McKalip said, “It will be my duty to break down trade barriers to American food and ag exports.” He’ll also press trading partners to live up to existing agreements. As the undersecretary for food safety, Esteban will be the agency’s leader on issues ranging from preventing food-borne illnesses to the regulation of cell-cultured meat that’s now near commercialization. Ranking Senate Ag Committee Member John Boozman (BOZE-man) says Esteban brings years of experience to a crucial USDA position.

Ag Groups Applaud McKalip, Esteban Confirmations

America’s leading agriculture groups applauded the Senate confirming Doug McKalip as the new Chief Agricultural Negotiator. The U.S. Grains Council says McKalip, “combines extensive international experience and almost 30 years of government service at USDA to help advance trade priorities and open up global markets.” American Farm Bureau President Zippy Duvall says McKalip has proven to be more than qualified for the position because of his experience. U.S. Meat Export Federation President Dan Halstrom says filling McKalip’s position was essential as the U.S. is currently engaged in negotiations with several key trading partners. NCBA’s Vice President of Government Affairs Ethan Lane says Jose Esteban’s new role in food safety is essential for ensuring consumer confidence in the U.S. beef industry. The National Milk Producers Federation and the U.S. Dairy Export Council applaud the Senate’s confirmation. “This move ensures dairy farmers will be at the negotiating table,” says NMFP CEO Jim Mulhern.

Egg Prices Hit Record Levels

Egg prices are hitting record levels. Free Republic Dot Com says the surge in price is being driven by an avian-influenza outbreak that’s killed tens of millions of chickens and turkeys in the U.S. this year. Wholesale prices of Midwest large eggs hit a record of $5.36 a dozen this month. Retail egg prices are rising faster than any other items in American supermarkets in 2022. Egg prices are up 30 percent from January through early December compared to the same period last year and are outpacing overall food and beverage prices. Some suppliers are predicting potential price relief by February or Mach, but cold weather could slow production in the near term. Highly Pathogenic Avian Influenza has led to the death of 58 million birds, making it the deadliest outbreak in U.S. history. USDA says entire flocks have to be destroyed after an infection is confirmed to limit potential spread.

Democrats Don’t Make Changes in House Leadership

Democrats in the U.S. House of Representatives aren’t making any changes to their leaders on the Agriculture and Education and Labor Committees, even after losing a majority. Representatives David Scott of Georgia and Bobby Scott of Virginia won positions as ranking members of the Agriculture and Education and Labor Committees, respectively, after being chairs in the previous Congress. “I’m very pleased to get elected by my friends and Democratic colleagues to serve as a ranking member of the House Agriculture Committee for the next Congress,” Scott says. “I believe we have accomplished important groundwork leading up to the 2023 Farm Bill, and I’m looking forward to doing our best to meet the needs of producers and consumers in this important legislation.” The House Education and Labor Committee has jurisdiction over child nutrition programs, and Bobby Scott says governing should be about “improving the lives of people from all walks of life.”

AFBF: Risk Management Tools a Farm Bill Priority

During volatility in the markets, managing risk remains a priority for farmers and ranchers. New analysis from the American Farm Bureau Federation examines several farm bill risk management tools included in Title 1 and explains the impact and importance to farmers. The analysis provides a historical perspective, including changes made in the 2018 Farm Bill to reauthorize and strengthen the PLC and ARC price and revenue programs. These programs were created in the 2014 Farm Bill to provide shallow-loss risk management coverage. AFB Economist Shelby Myers says that one factor remains consistent as farmers and ranchers faced unprecedented circumstances in recent years, and that’s the need for a variety of risk management options. Programs like ARC and PLC have to fit farmers’ and ranchers’ unique situations. Risk management tools like these are vital to farmers and ranchers being able to mitigate the unpredictable nature of farming. To read the report, go to fb.org.

Smithfield Donates 30,000 Pounds of Food

Smithfield Foods donated 30,000 pounds of protein, enough for 120,000 servings, to the Foodbank of Southeastern Virginia and the Eastern Shore to help fight food insecurity during the holidays. The donation includes hams, bacon, lunch meat, and smoked sausage and is part of Smithfield’s Helping Hungry Homes Program. “Providing for the needs of our neighbors is a year-round job,” says Christopher Tan, President and CEO of the Foodbank of Southeastern Virginia and the Eastern Shore. “A large gift is especially meaningful at this time of year when families should be celebrating the holiday season, not worrying about finding food to put on their tables.” Smithfield has donated hundreds of millions of protein servings to food banks, disaster relief efforts, and community outreach programs in all 50 states. “The holiday season can be stressful, and no one should worry about their next meal,” says Jonathan Toms, senior community development manager for Smithfield.

Monday Watch List

Markets

Back from the Christmas holiday, traders will catch up on the latest weather forecasts and any news that broke over the three-day weekend. USDA's weekly grain export inspections will be released at 10 a.m. CST and don't be surprised if numbers are low, given last week's bitter cold temperatures and pre-holiday mood. Traders will also watch to see if USDA has an export sales announcement at 8 a.m. CST.

Weather

The visit from the polar vortex over the Christmas holiday is short-lived as warmer temperatures that built up over the West are spreading eastward this week. In spite of the surge in temperatures, precipitation will be limited to the West on Tuesday. Highs: 10s/20s northern Canadian Prairies; 20s/30s Midwest; 30s/40s Pacific Northwest, Northern Plains, Delta; 40s/60s Central and Southern Plains, Southeast.

Senate Confirms Alexis Taylor to USDA Post

The Senate voted to confirm Alexis Taylor as the new USDA Undersecretary for Trade and Foreign Affairs. Taylor, the former director of Oregon’s Department of Agriculture, is the new top agricultural trade official with the agency. Food Business News says she’ll be responsible for overseeing international negotiations related to agricultural trade, developing America’s trade policies, promoting U.S. agriculture overseas, and opening up new markets for American commodities. At a nomination hearing in September, Taylor said her top priorities would be working with the U.S. Trade Representative on a path toward country-of-origin labeling that would be compliant with World Trade Organization rules. She also intends to hold Canada and Mexico to their commitments under the USMCA and will expand export markets for dairy and other farm products within the Indo-Pacific Economic Framework. She’ll also be involved in food safety issues by working to contain highly pathogenic avian influenza cases without market disruption.

Group Says Congress Failed Farmers, Farmworkers, and American Consumers

Congress failed to include immigration solutions in the omnibus package and the American Business Immigration Coalition Action group isn’t happy with that. Coalition Executive Director Rebecca Shi (she) says they regret that this Congress failed to show the courage needed to advance immigration solutions for farmer workers and farmers, for Dreamers, the U.S. economy, and consumers. “There is a reason why Congress remains one of the most unpopular institutions in our nation,” Shi says. “At the end of the day, Republicans still prefer to complain about the border than to compromise on solutions, and Democrats have much higher priorities than standing up for hardworking immigrants.” The group says America’s farmers are struggling to find the amount of workers they need to stay in business, driving record-high food inflation. Bringing two million dreamers out of the shadows would create more than 1.4 million jobs for Americans and $46 billion in economic spending.

New Report Lays Out Priorities for U.S. Dairy Reform

A new report from the American Farm Bureau Federation lays out priorities, principles, and recommendations for reforming dairy policy. A Farm Bureau Working Group explored options for strengthening the dairy industry through the 2023 Farm Bill and modernizing the current Federal Milk Marketing Order. Some of the priorities for FMMO reform include returning the Class 1 mover to a “higher-of” formula, increasing the Class 1 differentials to reflect changes in the marketplace, and making cost surveys mandatory and have them audited by USDA, and several others. “America’s dairy farmers continue to meet the challenges of growing demand for milk products, even while the number of dairy farmers in the U.S. continues to shrink,” says AFB President Zippy Duvall. “These recommendations convey the needs of dairy farmers across the country.” Farm Bureau also says the report gives guidance to USDA as it prepares for future hearings on modernizing the FMMO system.

Groups Respond Positively to Taylor Confirmation

The Senate confirmed Alexis Taylor as USDA Undersecretary for Trade and Foreign Agricultural Affairs, and U.S. ag groups reacted positively. “Alexis has a strong background in agriculture from growing up on a farm in Iowa and has a deep knowledge of trade issues,” says the U.S. Grains Council. American Farm Bureau Federation President Zippy Duvall says, “Trade is critically important to U.S. agriculture, and she’ll be a strong advocate on the world stage and a capable leader for USDA staff.” U.S. Meat Export Federation President and CEO Dan Halstrom says Taylor will be a “tremendous asset to USDA and a champion for U.S. agriculture.” The American Soybean Association also reacted positively to the announcement. Stephen Censky, ASA CEO, says, “Alexis has a depth of knowledge about agricultural trade and public policy that will serve her well in this post.” Groups like NCBA and the National Milk Producers Federation welcomed the nomination.

U.S. Agencies Partner to Promote Global Food Safety

The USDA, U.S. Agency for International Development, and the Food and Drug Administration launched the Food Safety for Food Security Partnership, also known as FS4FS. The initiative includes a $15 million investment over the next few years to support the availability and trade of safe food products to reduce poverty, hunger, and malnutrition in low- and middle-income countries. Foreign Ag Service Administrator Daniel Whitley says the initiative developed after the U.S.-African leaders summit, where many African heads of state asked for help in developing science-based measures and standards for food safety. “Through the new partnership, we will work together to address those needs, which are vital to ensuring greater access to safe and nutritious foods across Africa,” Whitley says. The agencies will also work to build on the success of Feed the Future and work with countries around the world to increase access to safe and nutritious foods and unlock trade opportunities.  

China is World’s Number One in Ag Research and Development

Public agricultural research and development funding has trended lower in the United States during the last several decades. However, a USDA report shows several of America’s top trading partners have increased their funding. The EU’s expenditures have grown since 2000, as have the funding pools in India and Brazil. But no country has experienced as rapid an increase in funding as China, which became the largest funder of agricultural R & D after 2011, surpassing the European Union. As recently as 2015, China was spending more than $10 billion yearly on agricultural R & D. That level was roughly twice what the U.S. spent in 2015 and nearly quintupled China’s own R & D spending in 2000. With China a major importer of U.S. agricultural goods and Brazil a competitor to the U.S. in global corn and soybean markets, these developments could have a significant impact on America’s export competitiveness.

Friday Watch List

Markets

In spite of being the last day of trading before Christmas, Friday has several reports on the docket and will be a normal trading session. The U.S. Commerce Department reports on U.S. personal incomes and consumer spending for November at 7:30 a.m. CST, the same time as a report on U.S. durable goods is out. At 9 a.m., the University of Michigan's report on consumer sentiment in December is due along with a report on U.S. new home sales for November. At 2 p.m., USDA will release cattle on-feed and the quarterly inventory of hogs and pigs, both for December 1. After the Christmas holiday, trading for grain and livestock futures will start again Tuesday morning at 8:30 a.m. CST.

Weather

A strong arctic front has passed through most of the country, with only the Northeast yet to go. Temperatures have fallen to significantly low values Friday morning and will continue to be frigid through the weekend. Winds remain high across much of the country, creating blowing snow and blizzard conditions harsh for travel, and dangerous windchills for humans and livestock. Precipitation is moving off to the East Coast, though lake-effect snows will wind up during the day. Snow is falling in the Pacific Northwest as well, a sign of a more active pattern for the West to close out 2022.

Sustainable Ag Coalition Supports Omnibus, Looks Into Ag Provisions

The National Sustainable Agriculture Coalition says it supports the 2023 omnibus appropriations bill. It’s also looked into several agricultural provisions included in the bill. The coalition says the bill includes $242 billion for discretionary programs funded annually and mandatory programs like the Supplemental Nutrition Assistance Program. NSAC is pleased to see higher investments in a couple of key programs, including a $5 million increase for the Sustainable Agriculture Research and Education Program, and a more than $40 million increase for Conservation Technical Assistance. The coalition is also pleased to see expanded support for the Farm to School Grant Program, which will see a $2 million boost in its allocation, now at $14 million. NSAC Interim Policy Director Mike Lavender says, “The bill includes several key funding increases, though by and large maintains level funding for many programs.” They’re hopeful the bill gets to the president’s desk for signature as soon as possible.

U.S. Dairy Applauds USTR Actions Against Canada’s Dairy Practices

The National Milk Producers Federation and U.S. Dairy Export Council applaud U.S. Trade Representative Katherine Tai’s actions under USMCA regarding Canada’s dairy market. Tai is filing a new request for dispute settlement consultations with Canada in order to expand the scope of the second USMCA dairy dispute to include additional elements necessary to ensure Canada complies with its trade agreement obligations. “We thank USTR and USDA for their diligence in working to ensure that American dairy producers have the market access promised under USMCA,” says Jim Mulhern, president and CEO of NMPF. “Canada continues to flagrantly flout its obligations, so the U.S. government needs to be ready with retaliatory measures.” Krysta Harden, president and CEO of USDEC, says it’s deeply unfortunate that Canada refuses to honor the full terms of the agreement. “USMCA is a fair deal that was thoroughly negotiated and agreed to by the Canadian government,” she says.

Wheat Industry Rail Shippers Welcome STB Rulings on Rate Disputes

The U.S. Surface Transportation Board has put more streamlined processes in place for rail rate disputes that may benefit agricultural shippers. The STB established a voluntary arbitration program and a new procedure for rate challenges, known as the Final Offer Rate Review. Wheat farmers and the grain trade rely heavily on rail to transport wheat to export terminals, but rates for hauling wheat are often higher than for other crops. The U.S. Wheat Associates’ Working Transportation Group is pleased that the STB recognizes rail shippers need new and innovative ways to engage railroads on rate concerns. “These rulings are a welcome sign that rail customers like wheat farmers are being heard,” says Charlie Vogel, working group chair. “The voluntary arbitration program and the FORR process will help give smaller shippers a greater ability to challenge rail rates.” STB Chair Martin Oberman says they wanted to make smaller rail disputes reasonable and less time-consuming.

U.S. Egg Production Down Five Percent in November

American egg production totaled 8.87 billion in November, down five percent from the same time last year. Production included 7.62 billion table eggs and 1.25 billion hatching eggs, of which 1.16 billion were broiler-type and 92.1 million were egg-type. The average number of layers in November totaled 375 million, down four percent from last year. November egg production per 100 layers was 2,369 eggs, slightly lower than last November. Total layers in the U.S. on December 1 totaled 374 million, five percent lower than last year. The layers consisted of 308 million layers producing table or market-type eggs, 62 million layers were broiler-type hatching eggs, and 3.74 million layers producing egg-type hatching eggs. Egg-type chicks hatched during November reached 46.5 million, up two percent from the previous November. Broiler-type chicks hatched during November totaled 810 million, one percent higher than in November 2021. Leading breeders placed 7.68 million broiler-type pullet chicks in November.

National Ag Day Essay Contest Looking for Entries

Ahead of National Ag Day on March 21, 2023, the Agriculture Council of America is hosting an essay contest. The theme for the year is Growing a Climate for Tomorrow: How American Agriculture Does it Every Day. The essay contest is divided into two categories, either a written essay or a video essay. Both are national competitions and both winners get $1,000. The contest is open to students currently in grades 9 through 12. They must be a U.S. citizen and attend school in the U.S. The National Ag Day Program encourages every American to understand how food and fiber products are produced. It also teaches people to appreciate the role that agriculture plays in providing safe, abundant and affordable food products. The deadline for submitting entries in the essay contest is February 15, 2023. Go to agday.org for more information on contest rules, entry forms, or National Ag Day 2023.

USDA Says Dairy Exports Hit Record Levels

USDA’s Foreign Agricultural Service released its biannual report on America’s dairy exports. The report found that U.S. dairy exports are setting records this year in terms of value. The report covers January through October and says this increase was driven by strong prices for dairy products. Overall values are up 25 percent. Whey exports led the way with a 37 percent increase since last year. USDA says the increase in export value didn’t necessarily coincide with an increase in export volume. In fact, nonfat dry milk export volume dropped eight percent while the value went up by 27 percent. Ice cream and dry whole milk and cream saw a decrease in export volume by one and two percent, respectively. On average, volumes rose by five percent. Butter and milk fat were the only categories where volume growth outpaced growth in value. Volume increased 43 percent while the value rose 30 percent.

Thursday Watch List

Markets

USDA's weekly export sales report is due out at 7:30 a.m. CST Thursday, the same time as weekly U.S. jobless claims and updates of third-quarter U.S. GDP and the U.S. Drought Monitor. The Conference Board's U.S. index of leading indicators from November will be out at 9 a.m., but weather will get most of the day's attention with bone-chilling temperatures and snow fanning out across the central U.S. Traders will also keep an eye on South American forecasts.

Weather

An arm of the polar vortex is sweeping through the middle of the country on Thursday. Very cold temperatures are filling in behind a cold front, which is producing a band of snow as well. Winds behind the front are intense and areas that have snow cover will see blizzard conditions developing. The southwestern Plains may see cold damage on wheat over the next couple of mornings while livestock are at extreme risk.

Omnibus Includes Growing Climate Solutions Act, SUSTAINS Act

The National Milk Producers Federation commended Congress for including the Growing Climate Solutions Act and the SUSTAINS Act in its final fiscal year 2023 budget package. The measures will help dairy farmers seek additional sustainability opportunities as they work to fulfill the dairy sector’s voluntary, producer-led goal of becoming greenhouse gas neutral or better by 2050. NMPF president and CEO Jim Mulhern says, “Environmental markets and conservation programs have the potential to meaningfully assist dairy producers as they work to meet their 2050 environmental stewardship goals.” The Growing Climate Solutions Act would enable USDA to register technical service providers that help farmers implement stewardship practices that can generate credits on environmental markets. The SUSTAINS Act would allow private sector funds to supplement existing funding for farm bill conservation programs, which are continuously oversubscribed. The Senate will vote on the omnibus appropriations bill this week which also includes $40 billion in disaster funding.

US Requests New USMCA Dispute Consultations on Canadian Dairy TRQ Policies

United States Trade Representative Katherine Tai Tuesday announced that the United States is requesting new dispute settlement consultations with Canada under the United States – Mexico – Canada Agreement. The request is over Canada’s dairy tariff-rate quota, or TRQ, allocation measures. Since initiating consultations with Canada in May 2022, the United States has identified additional aspects of Canada's measures that appear to be inconsistent with Canada's obligations under the USMCA, and U.S. concerns have only increased. With this new request, the United States expands its challenge of Canada’s dairy TRQ allocation measures to include Canada’s use of a market-share approach for determining TRQ allocations. Agriculture Secretary Tom Vilsack says, “Canada remains in violation of its commitments under the USMCA by not removing its trade restrictions on American dairy producers.” In January 2022, a USMCA dispute settlement panel found Canada’s dairy TRQ allocation measures to be inconsistent with Canada’s USMCA obligations. 

USDA and USTR Seek New Trade Advisory Committee Members

The Department of Agriculture and the Office of the U.S. Trade Representative are accepting applications for new members to serve on agricultural trade advisory committees. Members of the Agricultural Policy Advisory Committee advise the administration on implementing and enforcing existing U.S. trade agreements, negotiation of new agreements, and other trade policy matters. Members of the six Agricultural Technical Advisory Committees, or ATACs, provide technical advice and guidance on international trade issues that affect specific agricultural commodity sectors. The ATACs focus on trade in animals and animal products, fruits and vegetables, grains, feed, oilseeds, and planting seeds, processed foods, sweeteners and sweetener products, tobacco, cotton, and peanuts. Applicants must have expertise in U.S. agriculture and experience in international trade to be considered for committee membership. Application instructions are available at fas.usda.gov. Applications must be received by 5 p.m. ET on January 31, 2023.

USDA Invests $9.5M to Develop New Bioproducts from Agricultural Commodities

The Department of Agriculture Tuesday announced an investment of $9.5 million to support the scale-up of sustainable bioproduct manufacturing in the United States. Three successful projects are funded through USDA’s National Institute of Food and Agriculture’s Bioproduct Pilot Program, which funds research and development of value-added products from agricultural commodities. Authorized and funded by the Infrastructure Investment and Jobs Act, the Bioproduct Pilot Program presents a unique opportunity to spur economic activity in the nation’s rural areas while lowering commercialization risks associated with bringing biobased products to market. The program’s exploration into bioproducts accelerates USDA’s efforts to develop circular bioeconomies, where agricultural resources are harvested, consumed, and regenerated sustainably. This pilot program also supports the objectives outlined in President Biden's recent Executive Order on Advancing Biotechnology and Biomanufacturing for a Sustainable, Safe, and Secure American Bioeconomy. The three awardees are Virginia Polytechnic Institute and State University, the University of Illinois Urbana-Champaign, and Soylei Innovations of Ames, Iowa.

USDA: Vegetable Prices Spike in 2022

Fresh-market vegetable crops in California, Florida, and Mexico were hit with a variety of inclement weather this summer and fall. The adverse weather reduced supplies and contributed to higher shipping-point prices, according to a USDA Economic Research Service report. Shipping-point prices for fresh vegetables are expected to remain above seasonal norms until new or replanted fields are harvested in late December or early January. While retail prices for all food rose at the quickest year-over-year pace since 1979, up about ten percent, retail fresh vegetable prices, as measured by the Consumer Price Index, rose six percent during the first three quarters of 2022. Driven primarily by rising transport costs and higher prices for key items such as potatoes, onions, and lettuce, when complete this year, the Consumer Price Index for fresh vegetables will likely present the largest year-to-year gain since an 11 percent surge in 1998.

Study Shows Soybean Oil for Biofuels Has Limited Impact on Overall Food Prices

A new study shows U.S.-grown soybeans are well suited for people looking to cook, fuel up or find other sustainable solutions. The United Soybean Board partnered with Purdue University to evaluate whether the increased use of soybean oil in biofuels has contributed to the rising retail prices of food products for consumers. One key element missing from this equation is that only one-fifth of the soybean is oil, most of the soybean is meal used as a high-quality protein in animal diets. This expanded crush for oil to meet biofuel demand creates increased availability for meal, driving down the price of animal protein products. Jayson Lusk of Purdue University says, “What we found, after assessing the impact of rising soybean oil demand on prices at the grocery store, was little change to the Consumer Price Index.” While the increased demand for biofuels pushed up retail prices for oil between 0.16 percent and 4.41 percent, retail animal product prices declined between -0.01 percent and -0.16 percent.

Wednesday Watch List

Markets

Wednesday is the first official day of winter and it will definitely feel like winter for anyone in the northern U.S. There are reports of U.S. consumer confidence in December and U.S. existing home sales in November at 9 a.m. CST, followed by the Energy Department's weekly inventory report at 9:30 a.m., including ethanol production. Traders continue to closely watch the latest weather forecasts, especially for Argentina.

Weather

A significant low pressure system is pushing into the central U.S. Wednesday, and it will continue to bring snow to much of the north central U.S. into Wednesday night. Accompanying the snow will be very cold temperatures extending from the Northern Plains into the central Plains and Upper Midwest. Wind gusts up to 40-50 mph will also accompany the snowfall, creating blizzard conditions and dangerously cold wind chills.

2022 Census of Agriculture Underway

The Department of Agriculture Last week mailed the 2022 Census of Agriculture paper questionnaires to all known agriculture producers across the nation and Puerto Rico. Producers in the states received their survey codes last month with an invitation to respond online. Any producer who has yet to respond online now has the option to complete the ag census at agcounts.usda.gov or by mail. Producers who have already responded online do not need to respond again. The deadline for response is February 6, 2023. USDA National Agricultural Statistics Service Administrator Hubert Hamer says, “We know producers are busy, which is why NASS worked to make responding to the ag census more convenient than ever before.” The Census of Agriculture remains the nation’s only comprehensive and impartial agriculture data for every state, county, and U.S. territory. Responding to the Census of Agriculture is required by law, and the same law requires NASS to keep all information confidential.

Mexico Offers Amendments to Biotech Decree

The U.S. Trade Representative’s Office and the Department of Agriculture are evaluating proposed amendments to Mexico’s decree to ban the use and purchase of biotech commodities. In a joint statement, USTR Katherine Tai and Agriculture Secretary Tom Vilsack say, “We agreed to review their proposal closely and follow up with questions or concerns in short order,” adding, “There is a joint recognition that time is of the essence and we must determine a path forward soon.” The two officials met with a delegation of senior Mexican Government officials in Washington, D.C. late last week. On the same day, a group of more than 20 farm-state Senators urged USTR and USDA to take action against Mexico’s proposal to ban U.S. genetically-engineered corn. The Senators write, “It would be detrimental to food security in Mexico, hurt U.S. agricultural sustainability, and stifle future agricultural technology innovations that would benefit both nations.”

Iowa State University Cover Crop Report

A new report from the Iowa State University Center for Agricultural and Rural Development summarizes five years of data on Iowa farmers' use of cover crops. The survey was administered to farmers who visited local conservation field offices and received technical assistance related to cover crops. The more than 3,000 responses shed light on Iowa farmers' rationale and motivations to use cover crops, the timing of planting and termination, the types and extent of varieties used, and farmers' preferred information sources. The most prevalent types of operations using cover crops were farms producing row crops and cattle, and farms producing row crops but no livestock. Most respondents seeded cover crops on erodible land, and only on a portion of their fields. The stated motivations to use cover crops reported by at least two-thirds of the respondents include preventing soil erosion, building soil organic matter, improving soil health, and improving/protecting water quality.

Applications Open for Women in Food & Agriculture Mentorship Program

Alltech recently announced Applications are now open for the Women in Food & Agriculture Mentorship Program. Now in its third year, the free-to-join program matches applicants based on their preferences, which can include gender of mentor, areas of expertise, language and industry sector, and offers opportunities for women in food and agriculture to develop meaningful industry connections. Alltech President and CEO Mark Lyons says, “We view our involvement in the Women in Food & Agriculture mentorship program as an investment not only in the lives of women but in the future of agriculture.” Women in Food & Agriculture is looking for mentors of any gender who have at least one year of experience in the food and ag sector. During matching, the organization will ensure all mentors have more work experience than mentees, so this should not be a barrier to mentors applying. For more information and to apply to be a mentor or mentee, visit wfa-initiative.com

Angus Foundation to host 150 Years of Angus Celebration

The Angus Foundation will host a 150 Years of Angus Celebration on January 6 at Cattlemen's Congress in Oklahoma City. In 1873, George Grant settled in Victoria, Kansas, with four Angus bulls from Scotland. The evening of Angus fellowship will feature door prizes and auction items to benefit the Foundation's mission, food and refreshments and the announcement of the 2023 Angus Herdsman of the Year. Jaclyn Boester, Angus Foundation executive director, says, "We're proud of the Angus legacy built over the past 150 years, and we know through the work of the Foundation and our supporters, the future looks just as promising." The evening's auction will feature several exciting lots, including a Two-Night Wine Country Getaway for Six and a Live Oak Plantation Experience and Quail Hunt. Funds raised through the auction will benefit the Angus Fund, which provides unrestricted support for the Foundation's mission of furthering Angus education, youth and research. For more information, visit www.AngusFoundation.org.

Fuel Price Decline Continues, But End in Sight

The nation's average gas price declined again last week, falling 11.9 cents to $3.09 per gallon. The national average is down 57.1 cents from a month ago and 20 cents per gallon from a year ago. The national average diesel price fell 14.1 cents last week, reaching $4.77 per gallon. Overall, the price for a gallon of gasoline is down nearly $2 compared to six months ago, but oil prices may put an end to the declines soon. GasBuddy’s Patrick De Haan says, “While the decline should take the national average under $3 per gallon in the next week or so, it is soon likely to fade as oil prices have held in the $70 per barrel range.” After reaching as low as $72 per barrel, West Texas Intermediate crude oil has seen a slight rally on China’s reopening plans. However, De Haan says diesel prices could fall another 50 cents or more in the weeks ahead.

Tuesday Watch List

Markets

A report on U.S. housing starts for November is set for 7:30 a.m. CST Tuesday, the only significant report on the day's docket. Traders will keep watch on the latest weather forecasts and any outside news that emerges. Traders will also pause at 8 a.m. to see if USDA has an export sale to announce.

Weather

While a very cold airmass still remains across the Canadian Prairies and the north central U.S. Tuesday, a significant low pressure system is developing in the northern Rockies and will push east throughout the day, eventually reaching the northwest plains later Tuesday night. Meanwhile, a disturbance bringing rain showers across the southern Mississippi Valley will continue pushing east into the Southeast throughout Tuesday.

Group Supports Modernizing H-2A Visa Program

The American Business Coalition Immigration Action group applauded the Senate introduction of the Affordable and Safe Food Act. The legislation would modernize the nation’s farm guest worker H-2A visa program by opening it up to more farmers. “ABIC Action fully endorses this bill and is so grateful for the leadership of Senator Michael Bennet in introducing the legislation,” says ABIC executive director Rebecca Shi (she). The bill would make visas available for year-round work in the dairy industry and other agricultural sectors, put a down payment on border security with mandatory e-verify, stabilize wages for farmers, and create legal protections and a pathway to citizenship for undocumented decade-plus farm workers. Senator Bennet says the cost of farm labor has gone up almost 50 percent over the past decade, much higher than wage costs in other sectors of the economy. The bill would save farmers $23 billion over the next 12 years.

EPA: New Biofuel Mandates Will Boost GHG in Short Term

The Environmental Protection Agency’s proposed changes to the nation’s biofuel blending mandates through 2025 will cause a short-term increase in greenhouse gas emissions. However, agency documents also say the changes will yield long-term reductions. The new proposal will add to greenhouse gas emissions over the next three years by between 81 million and 266 million tons. A Reuters review of the documents says the rise will come from new tiling for corn, soy, and other plantings that release carbon from the soil. EPA’s GHG calculator says that’s the climate equivalent of driving 17 million and 57 million vehicles for one year. However, EPA also projects those emissions will be more than offset in the long term due to reduced tailpipe emissions and other factors. Those figures are assuming biofuel volume mandates don’t change after 2025. EPA says the proposal would reduce GHGs by between 128 million and 1.6 billion metric tons.

Groups Argue in Court to Preserve Chlorpyrifos

A total of 20 agricultural groups argued before the Eighth Circuit Court of Appeals in Washington, D.C., about chlorpyrifos. Specifically, they asked the court to reinstate chlorpyrifos tolerances that the Environmental Protection Agency has found safe. EPA revoked those safe tolerances, which effectively ended agriculture’s chance to use an important pesticide. The decision has inflicted enormous costs on thousands of American farmers and undermined their ability to protect their crops from potentially devastating insect pests. The groups say EPA revoked the safety tolerances despite finding on multiple occasions that at least 11 high-benefit crop uses could be safely maintained. American Soybean Association President Daryl Cates says, “Farmers rely on regulators following the law. Congress wrote the pesticide laws that way to provide growers access to the tools they need to be successful and ensure those tools can be used safely.” The groups are hopeful for a ruling in the coming months.

NASDA Receives Large USDA Grant From FAS Emerging Markets Program

The National Association of State Departments of Agriculture was awarded a USDA grant worth $925,000 through the Foreign Agricultural Services’ Emerging Markets Program. The EMP helps organizations promote exports of agricultural products to developing countries with strong growth potential. “We are excited for NASDA members to engage in critical discussions to support global market development and strengthen bilateral trade relationships,” says NASDA CEO Ted McKinney. The group will use the funding to conduct market research in emerging markets in Southeast Asia and Africa. NASDA will also organize outbound trade missions for state department of agriculture leaders to learn about the markets and engage in discussions with relevant parties in each country. “Our members understand how important it is to spread the message about the value and quality of U.S. products and the benefits of innovation around the world,” McKinney says. “The first step in earning trading partners is establishing open communication.”

Iowa Farmland Prices Jump Again

Iowa State University’s annual Land Value Survey shows farmland values are averaging $11,411 an acre in 2022, a 17 percent rise from last year. ISU says farmers have a lot more cash on hand, and supply chain issues led to a shortage of equipment, so the money typically spent on equipment is now getting used to buy land. The survey included responses from land appraisers, farm managers, and lenders. Seventy percent of the people surveyed said land values were “too high” or “way too high.” However, 48 percent of the participants also expect prices to be higher a year from now. About 28 percent expect lower land values next year, and 24 percent expect prices to hold steady. The survey began in 1941, and the 2022 farmland value of $11,411 per acre is the highest in history. When adjusted for inflation, this year’s value comes in at $8,716 an acre.

Commodity Sales to Overseas Buyers Surge

USDA says sales of grains and soybeans climbed week-to-week during the week ending on December 8. Soybean sales took a healthy jump to 2.94 million metric tons, up from 1.72 million the week before. Sales surged as China bought 1.25 million metric tons, and another unnamed country purchased 1.03 million metric tons. However, exports for the week fell to 1.85 million metric tons, down from 2.25 million tons the week before. Corn sales totaled 958,900 metric tons, a sharp jump from 692,000 during the previous week. Guatemala was the top buyer at 196,400 metric tons, and Mexico bought almost 171,000 metric tons. Export sales for the week hit 591,000 metric tons, down from a little over 900,000 tons the previous week. Wheat sales rose to 469,000 metric tons, a sharp rise from 190,000 during the previous week. Exports were reported at 255,900 metric tons, down slightly from the previous week.

Monday Watch List

Markets

Back from the weekend and getting close to Christmas, USDA's weekly report of export inspections at 10 a.m. CST is the only item on Monday's docket. Trading may be slower than normal this week, but changing weather forecasts, outside market concerns and the constant threat of Russian mischief will keep us all paying attention.

Weather

A very cold airmass will remain across the Canadian Prairies into the north central U.S. Monday. Meanwhile, a two-part system will provide rain showers and a few thunderstorms across the south central U.S. with snow showers across the north.

USDA Invests in Infrastructure to Combat Climate Change in Rural America

Agriculture Secretary Tom Vilsack Thursday announced USDA is investing $285 million in critical infrastructure. The investment seeks to lower energy costs, expand access to clean energy for people across rural America, and combat climate change. USDA is also making an additional $300 million available under the Rural Energy for America Program, including $250 million through the Inflation Reduction Act, to spur further investment. Vilsack says, "People in rural America are on the front lines of climate change, and our communities deserve investments that will strengthen our Country's resilience." USDA is making 844 investments through the Rural Energy for America Program. The program helps farmers purchase and install renewable energy systems and make energy efficiency improvements. USDA also announced that it will make $300 million available under the Rural Energy for America Program to expand renewable energy and support energy-efficiency projects. The deadline to apply for grants is March 31, 2023. Applications for technical assistance grants are due January 31, 2023. Applications for loan guarantees are accepted year-round.

Bennet, Newhouse, Introduce Last Minute Farm Labor Bill

In a last-minute effort to get H-2A reform finished before Congress adjourns, lawmakers have introduced a new bill. Senator Michael Bennet, a Democrat from Colorado and Representative Dan Newhouse, a Washington state Republican, introduced the Affordable and Secure Food Act Thursday. The legislation will reform the H-2A Temporary Agricultural Worker program by expanding H-2A visas to year-round jobs for the first time, modernizing the application process, creating more wage certainty, and ensuring critical protections for farm workers. Senator Bennet says, “This plan is broadly supported by farmers, by labor, by immigration advocates, and business,” adding, “There is no reason that we shouldn’t get this done.” Representative Newhouse says, “let’s stop waiting, and start acting,” and “reform our broken immigration laws.” The legislation reflects years of close input from farmers and ranchers, agricultural workers, and labor organizations, and would establish a program for agriculture workers, along with their spouses and minor children, to earn legal status.

USDA Releases 2021 Organics Data

USDA’s National Agricultural Statistics Service Thursday released the results of the 2021 Organic Survey. The survey shows total sales of $11.2 billion in organic products, an increase of $1.28 billion, or 13 percent, from 2019. There were 17,445 certified organic farms, a five percent increase from 2019. California continued to lead the nation in certified organic sales with $3.55 billion, which is 32 percent of the U.S. total. It also led all states with more than 3,000 certified farms and 813,700 certified acres. Washington, Pennsylvania, Texas, and Oregon, round out the top five states for value of organic sales. Marketing practices in the certified organic farming sector showed that $2.02 billion in organic products were sold directly to retail markets, institutions, and local/regional food hubs. Another $310 million in organic products were sold directly to consumers. The value of processed or value-added products such as jam, wine, cheese, and meat, accounted for $707 million.

McKinsey & Company Release Global Farmer Survey Results

Despite economic disturbances, high crop prices are giving farmers around the world cause for cautious optimism, according to a new survey. Global consultancy McKinsey & Company this week released the results of its global survey of 5,500 farmers from nine countries. Seventy percent of farmers expect profits to remain stable or increase - the result of higher crop prices driving profitability in the next two years. Consequently, farmers are being inspired to invest in new products that are focused on yield increase and crop protection. Despite an uncertain future with supply chains impacted by geopolitical conflicts, farmers are facing the changes head on, innovating in new areas and adopting new strategies. Vasanth Ganesan, Partner at McKinsey, says, “Products and services should be tailored and personalized for growers, to stimulate uptake and provide farmers access to yield-driving technologies and greater cost-efficiencies. McKinsey & Company is a global management consulting firm in more than 130 cities and 65 countries.

CHS Releases 2022 Sustainability Report

CHS recently released the 2022 CHS Sustainability Report, describing the company's approach to sustainability and highlighting some of its sustainability initiatives. The actions taken by CHS will help the company reduce its impact on the planet, respond to opportunities related to enhanced sustainability and continue to build a better future for the farmers and ranchers who own the cooperative system. In 2022, CHS added Megan Rock as vice president, sustainability and innovation and chief sustainability officer. CHS will place an emphasis on helping owners, and other stakeholders understand the company's approach to environmental, social, and corporate governance reporting, including providing definitions and interpretations in the 2022 CHS Sustainability Report. The company is also exploring technologies that impact supply chain automation, real-time soil sensing and traceability in row crops as part of its sustainability efforts. For an in-depth look into the 2022 CHS Sustainability Report, visit chsinc.com/sustainability.

“Yellowstone” Creator to Speak at Annual Cattle Industry Convention

Taylor Sheridan will speak during the Opening General Session of the 2023 Cattle Industry Convention & NCBA Trade Show in New Orleans on February 1. Sheridan will join NCBA President Don Schiefelbein, a Minnesota cattle producer, for a conversation about ranch life. Sheridan says, “My passion for the ranching lifestyle has inspired me to write stories that are rich in history, led by complex characters, and focus on family dynamics.” Sheridan is an Academy Award®-nominated writer and actor as well as a member of the Texas Cowboy Hall of Fame. A Texas native himself, Sheridan excels in the Western horse performance industry as an avid supporter and competitor in reining and cutting. He also owns and operates two Texas ranches, including the legendary 6666 or Four Sixes Ranch, a 2015 Environmental Stewardship Award Program regional winner, and Bosque Ranch. Sheridan recently launched Four Sixes® Ranch Brand Beef which retails beef sourced from 6666 and a network of ranches.

Friday Watch List

Markets

There are no significant reports on Friday's docket, but traders will pay attention to the latest weather forecasts, pause at 8 a.m. CST to see if USDA has an export announcement and will keep an eye on outside markets and any news from Ukraine. Livestock traders have to wait for USDA's cattle on-feed and quarterly hogs and pigs inventory reports, due out next Friday after the market close, just in front of the Christmas weekend.

Weather

While our large winter storm continues to wind down slowly, snow will fall in bands across northern areas of the country throughout the day. Winds are still elevated behind the system, mostly across the Plains, where blizzard conditions continue.

Corn Growers Call on Biden to Set Quick, Firm Timeline with Mexico

Leaders of state corn groups and the National Corn Growers Association called on President Biden to take additional steps to address the pending decree by Mexico that would block imports of biotech corn. A letter sent to the President Wednesday encouraged Biden to raise the issue during upcoming trade talks and to file a dispute under the United States-Mexico-Canada Agreement if Mexico doesn't act expeditiously to withdraw the decree. The leaders say, "Corn farmers are right now in the process of making planting decisions for next spring, and any additional uncertainty in the market affects their ability to appropriately respond to multiple market signals." Mexico's Foreign Secretary Marcelo Ebrard plans to visit Washington this week to discuss the issue ahead of a planned meeting on trade between Biden, President Andrés Manuel López Obrador and Prime Minister Justin Trudeau in early January. The state corn grower leaders urged Biden to raise the issue at the meeting.

CoBank Releases 2023 Year Ahead Report

The U.S. economy still has considerable momentum and is not currently on the verge of recession., according to CoBank's 2023 Year Ahead report. However, economists have never been more pessimistic, and there are legitimate reasons for concern. Over the past half-century, inflation above five percent has never been tamed without incurring a recession. Dan Kowalski, vice president of CoBank's Knowledge Exchange, says, "As financial conditions continue to tighten, we expect the U.S. economy will steadily soften through the first half of 2023." After two years defined by a strong economic rebound from the pandemic, the global economy will sputter in 2023. Despite the global pandemic and a steady barrage of disruptive challenges, the U.S. agricultural economy has fared quite well for the last three years. However, in 2023 producers and related industries will begin to show financial strains. A relentless series of adversities, including skyrocketing production costs, steeply higher interest rates and weakening demand, will increasingly pressure farm income and margins.

Counties with Continuous High Poverty Since 1960 Largely Rural

Fresh data from USDA’s Economic Research Service shows counties with continuous high poverty since 1960 are largely rural. In 1960, 78 percent of U.S. counties had poverty rates of 20 percent or more. Among them, 28 percent continued to have high poverty through 1980. After enactment of the Economic Opportunity Act of 1964, commonly known as the War on Poverty initiatives, many counties reported reduced poverty rates. Between 1980 and 2019, poverty rates were relatively stable, mainly fluctuating with cyclical changes in the macroeconomy. As of 2019, there were 304 counties—13 percent of the counties with high poverty in 1960—that consistently had poverty rates of 20 percent or more over the last 60 years. The majority—264 counties—are rural counties and are clustered in the Appalachian States; the Black Belt in the South; the Mississippi Delta; the Ozarks region of Missouri, Arkansas, Oklahoma, and southeast Kansas; the Southwest; and in counties with large American Indian and Alaska Native populations.

New Project Allows Cotton Farmers to participate in Carbon Markets

A new collaboration offers southern cotton growers the chance to participate in carbon markets. The Ecosystem Services Market Consortium, US Cotton Trust Protocol, Manulife Investment Management, and Forum for the Future announced the effort Wednesday. The collaboration launched an Eco-Harvest pilot project in Alabama, Arkansas, Texas, and Tennessee. The project will work with cotton farmers to generate high-quality carbon and greenhouse gas credits on more than 2,300 acres. Cotton producers targeted for enrollment include those implementing conservation practices such as nutrient management, reduced tillage, and cover crops. Once producers are enrolled in ESMC’s Eco-Harvest program, ESMC quantifies credits and arranges third-party credit verification by a global certification body. Corporate buyers can purchase these verified credits to help meet their supply chain sustainability targets. Participating farmers, who may be new to private voluntary ecosystem markets linked to conservation practice adoption, will develop knowledge on and the ability to participate in markets. Learn more about the program at ecosystemservicesmarket.org.

USDA Invests Additional $10M to Support Community Food Projects

USDA’s National Institute of Food and Agriculture Wednesday announced an investment of nearly $10 million through the Community Food Projects Competitive Grants Program. The funding, made possible through the American Rescue Plan Act, bolsters USDA’s food and nutrition security efforts. Specifically, the funding promotes the self-reliance of communities in providing for the unique food needs of their community members. Community food projects support small to medium farmers, producers and processors in urban, rural, tribal and insular areas. The program provides communities a voice in food system decisions and supports local food markets to fully benefit the community, increase food and nutrition security and stimulate local economies. The program funds projects that meet the food needs of low-income individuals through food distribution, community outreach or improved food access. The funds will be invested in 29 Community Foods Projects from fiscal year 2022 Request for Applications submissions that were highly ranked but could not be funded at the time due to budget constraints.

NOAA Announces Funding for Fish Habitats Across U.S.

NOAA Fisheries Wednesday announced $105 million in funding for 36 new fish passage projects under the Bipartisan Infrastructure Law. The announcement includes significant funding to implement fish passage projects that meet tribal priorities and build tribal organizational capacity to support their role as stewards of tribal resources. Through the funding, NOAA prioritized projects that demonstrate a broad base of stakeholder and community support. Selected projects will span the full range of fish passage types, including dam removals, fish ladders, culvert improvements and in-stream fish passage improvements. NOAA says 15 of the projects, encompassing more than $26.3 million in funding, will be led by tribal applicants for fish passage. Fish passage is about improving access for fish to the habitats they need or reconnecting access to historic habitat blocked by humans. Migratory fish like salmon require access to high-quality rearing and spawning habitats, and unimpeded migratory corridors, to be successful and resilient.

Thursday Watch List

Markets

USDA's weekly report of export sales is due out at 7:30 a.m. CST Thursday, the same time as weekly U.S. jobless claims, a report of U.S. retail sales in November and an update of the U.S. Drought Monitor. At 9:15 a.m., the Federal Reserve's report on U.S. industrial production for November will be out, followed by the U.S. Energy Department's report of natural gas storage at 9:30 a.m. and the November soybean crush report from the National Oilseeds Processors later Thursday morning. Traders will keep watch over the latest weather forecasts and outside market behavior after Wednesday's half-percent rate hike from the Federal Reserve.

Weather

A slow-moving, strong storm system continues to produce widespread weather impacts to the country on Thursday. Heavy snow is falling in bursts across the Upper Midwest and Dakotas and a line of precipitation is moving through the Eastern Seaboard. Winds are still high on the backside of the system across the Northern Plains, producing blizzard conditions. Colder air is filling in behind the cold front through most of the country.

November Combine Harvesters, Four Wheel Drive Tractor Sales Grow

Combine harvester sales remained positive in November, as did four-wheel drive tractor sales in both the U.S. and Canada. However, the latest data from the Association of Equipment Manufacturers says total tractor sales fell in both countries. Total U.S. ag equipment unit sales fell overall though the largest units grew in sales. November’s total farm tractor sales fell 21 percent compared to 2021, with the under-40 horsepower segment seeing the biggest drop at 28 percent. U.S. self-propelled combine sales in November grew 8.3 percent to 314 units sold. Combine sales are one of two positive segments this year, up 15.7 percent year-to-date. The other growing segment in 2022 is the 100-plus horsepower segment, up 6.2 percent during November and 13.3 percent higher year-to-date. Combine harvesters and 4WD tractors were the only higher segments in Canada. “While total sales are down, the larger equipment continues to be strong,” says Curt Blades of AEM.

Lower Soybean Oil Demand Means Higher Ending Stocks

The current 2022-2023 U.S. soybean balance sheet remains unchanged for now as export and crush volumes are in line with current forecasts. Although soybean meal is off to the projected start, the same can’t be said for soybean oil. Abysmal export volumes and commitments have resulted in a lower soybean oil export forecast for the current marketing year, dropping by 200 million pounds to 1.1 million pounds. Total commitments were down 90 percent on December 1. The U.S. Environmental Protection Agency released its renewable fuel obligation targets for 2023-2025, which included a slight bump in the biomass-based diesel mandate during the first year. The EPA also approved and finalized a pathway for canola oil used in renewable diesel production. As a result, America’s soybean and canola oil balance sheets are changed to nearly offset the expected impacts on domestic use. Ultimately, the soybean oil ending stocks forecast got raised to 1.9 billion pounds.

Vegetable Prices Up 40 Percent

Americans are paying up to 40 percent more for their vegetables than in 2021, and drought is a big reason for the price hike. A new report from Daily Mail says the increase is due, in large part, to states that grow fresh produce getting hit with water cuts because of droughts and storms destroying some crops as well. For example, Arizona produces 90 percent of the leafy greens in the U.S. and experienced its worst drought in 1,200 years. Water levels in the Colorado River are dramatically low, cutting down on the amount of water available to farmers. No relief is coming for Arizona’s farmers as officials will cut Arizona’s water intake from the Colorado River by 21 percent starting on January 1, 2023. The nation’s top agricultural state, California, is also getting hurt by severe drought. The biggest increase was a 38 percent jump in the price of fresh and dry vegetables.

Officials Want Support for Organic Poultry and Dairy Producers

Senator Tammy Baldwin and Representatives Jared Huffman and Chellie Pingree led 25 colleagues in a bipartisan, bicameral letter asking Ag Secretary Tom Vilsack for immediate assistance for organic poultry and dairy producers. “We’re writing on behalf of the organic and poultry sectors to request emergency relief in response to skyrocketing feed costs that are impacting the future viability of this industry,” the letter says. “The situation is dire and requires your immediate response.” International trade challenges specific to the organic sector, persistent drought, and the lack of a stable domestic supply of certified organic feed combined to create a dire economic situation for organic livestock farmers for the past two years. They also point out that year-over-year price spikes in the cost of feedstuffs are now creating unsustainable circumstances that could lead to further farm closures, reduced competition, and ultimately limit consumer choice. If not addressed, the impact could be devastating.

CNH Industrial Opening Electrification R and D Center in Michigan

CNH Industrial recently announced it has opened a new technical center in Detroit, Michigan. The center is designed to support the company’s growing innovation in electrification. It will also enhance CNH Industrial’s technology capabilities. “This new center underlines our commitment to growing our electric vehicle and subsystem profile and marks another milestone for us,” CNH says in a statement. “This allows us to become more customer-focused and build mission-fit electrified drivetrains and high voltage systems.” The new site in Detroit will complement and partner with the company’s existing electrification site in Italy. The sites will work together to advance the company’s position in alternative types of propulsion built on more than 15 years of R and D experience. “As an employer, we are investing in talented and motivated people who augment our in-house electrification capabilities,” says Kevin Barr, Chief Human Resource Officer. “Our talent will change agriculture in the years ahead.”

Weekly Export Inspection Numbers Drop

USDA says inspections of soybeans and grain for overseas delivery all fell in the seven days ending on December 8. Soybean assessments came in at 1.84 million metric tons, down from over two million tons the prior week. That’s still better than the 1.75 million reported during the same week last year. Corn inspections also fell, dropping to 505,000 metric tons. That number was down from almost 825,000 the previous week. That corn number was also below the total from the same time last year of 930,000 metric tons. Wheat inspections totaled just 218,500 metric tons, down from more than 341,000 the week before and 269,000 during the same week last year. Since the start of the marketing year, USDA has inspected 7.15 million metric tons of corn for export, 23.4 million metric tons of soybeans, and 11.1 million metric tons of wheat. The wheat marketing year began on June 1.

Wednesday Watch List

Markets

At 9:30 a.m. CST Wednesday, the U.S. Energy Department will release its weekly report of energy inventories, including ethanol productions. At 1 p.m., the Federal Reserve will conclude its two-day meeting and is expected to increase the federal funds target by a half-percent. Traders will be watching for any comments from the Fed, the latest weather forecasts and for any sign of export sales.

Weather

In the midst of a strong storm system, continued heavy snow and blizzard conditions are occurring over the Northern Plains while a band of precipitation arcs through the Midwest and down into the Lower Mississippi Valley. Additional precipitation is forming over eastern Texas as another low pressure center develops on a strong cold front near the Mississippi River later today. That low will move northeast and through the Midwest with additional precipitation and risks for severe weather across the Gulf Coast.

FACA Congratulates Additional Recipients of Climate-Smart Pilot Project Funding

The Food and Agriculture Climate Alliance Monday congratulated the second group of organizations selected to receive funding through USDA’s Partnerships for Climate-Smart Commodities Program. Agriculture Secretary Tom Vilsack announced the additional funding of $325 million for 71 projects under the second funding pool of the effort. USDA received more than 1,000 proposals between two funding pools requesting more than $20 billion in funds. The announcement brings the total investment from both funding pools to more than $3.1 billion for 141 tentatively selected projects. The projects will provide meaningful opportunities for small and underserved producers to participate in innovative climate programs, according to FACA. One of FACA’s key tenets is ensuring federal climate programs offer equitable opportunities for all farmers, ranchers and forest owners. FACA supports a voluntary, incentive-based approach to advance the deployment of climate-smart practices on working lands. FACA consists of organizations representing farmers, agribusinesses, manufacturers, the food and innovation sector, state governments, sportsmen, and environmental advocates.

USDA Accepting Applications for Panama Agribusiness Trade Mission

USDA’s Foreign Agricultural Service is accepting applications from U.S. exporters for a regional trade mission to Panama from March 19-23, 2023. FAS Administrator Daniel Whitley says, "This is a perfect time to increase U.S. agricultural and food exports to Central America." USDA staff and regional experts will provide in-depth market briefings while in the country. The agency will also arrange targeted business meetings with potential customers from Panama, a bilateral Free Trade Agreement partner, and buyers from countries in the multilateral Central America and Dominican Republic Free Trade Agreement. The region offers strong capabilities in logistics, distribution, processing, cold chain, and more. Strong opportunities exist for exporters across many industries, including poultry, pork, dairy, beer and wine, snack foods and health foods. This will be the first USDA Agribusiness Trade Mission in 2023. The deadline to apply for the CAFTA-DR trade mission is Friday, December 30. Complete information is available at fas.usda.gov/.

FTC: Tractor Supply Company Must Sell Some Orscheln Stores

The Federal Trade Commission recently finalized a consent order settling Tractor Supply Company’s acquisition of rival chain Orscheln (ORR-shlin) Farm and Home LLC. Following a public comment period, the FTC determined the acquisition would have harmed competition among farm stores in the Midwest and South. The consent order imposes a number of requirements, including that Tractor Supply divest some Orscheln stores, as well as Orscheln’s corporate offices and Missouri distribution center, to Bomgaars )BOM-gars), an Iowa-based farm store chain, and other stores to Buchheit (buck-eyet), another chain with farm stores in Missouri and Illinois. Tractor Supply Company announced it closed the Orscheln Farm and Home acquisition in October in a deal valued at $320 million. The consent agreement also requires that for a period of three years, the companies buying the divested farm stores must obtain prior approval from the FTC before selling any of the Orscheln stores they acquired.

Alltech ONE Conference Embarks on a World Tour in 2023

Alltech is transforming its annual Alltech ONE Conference in 2023 into a series of international events. The events will invite collaboration on the greatest challenges facing the agri-food industry. Instead of welcoming the world to Alltech's home in Lexington, Kentucky, as it has for the past 38 years, the Alltech ONE World Tour will bring the ideas and inspiration of the ONE Conference to communities throughout the world. Stops are planned in Brazil, Canada, Hungary, Indonesia, Ireland, Italy, the Middle East, the Philippines, Singapore, Spain, the United States and Vietnam. Additional stops are expected to be announced in 2023. Alltech President and CEO Dr. Mark Lyons says, "As our customers and partners continue to face many challenges and uncertainties, we determined that 2023 would be dedicated to meeting them in their market." Alltech will welcome the international conference back to Kentucky in 2024, and the company will release more details about the 2023 tour in the coming weeks.

Portland to Replace Petroleum Diesel Sales with Biodiesel

Portland, Oregon’s city council recently voted to phase out petroleum diesel sales and replace the product with biofuels. The policy focuses on diesel fuel, phasing in requirements for cleaner, renewable fuels, with the goal of achieving 99 percent renewable blend of all diesel fuel sales in Portland by 2030. The rulemaking process and the interim rule allows flexibility to adjust the policy based on real market conditions. While renewable fuel producers are confident that supply will be available in Oregon by 2026, the rollout timeline was extended to 2030 in response to concerns from local industry about supply and cost. City leaders say the efforts reduce dependence on nonrenewable fossil fuels by increasing the required percentage of renewable fuels blended with petroleum diesel. The standard only applies to retailers of diesel fuel located within the city of Portland. Replacing petroleum diesel at the pump is one of the 43 priority actions listed in the Portland Climate Emergency Workplan.

Weekly Fuel Prices: Diesel Declines Outpace Gas

The nation's average gas price declined for the fifth consecutive week, down 14.4 cents from a week ago to $3.21 per gallon. The national average is down 56.5 cents from a month ago and 11.0 cents per gallon lower than a year ago. The national average price of diesel has fell 14.9 cents in the last week and stands at $4.91 per gallon. GasBuddy's Patrick De Haan says, “We remain on schedule to see the national average gas price fall below $3 by Christmas, with diesel set to fall 50 cents to $1 per gallon over the next six weeks or so.” The keystone XL Pipeline shutdown, De Haan adds, is not expected to impact fuel prices, for now. Under the weight of economic concerns, a possible surge in COVID cases as China works towards re-opening, and a changed psyche that OPEC+ is over-producing, oil prices fell last week to their lowest in nearly a year.

Tuesday Watch List

Markets

Just as the Federal Reserve begins its two-day meeting Tuesday, we will all get to see the U.S. Labor Department's report of November consumer prices at 7:30 a.m. CST. The report probably won't stop the Fed from raising rates by a half-percent on Wednesday, as is expected, but it could offer a clue for future decisions. Traders will continue to keep close watch on the latest weather forecasts, any export news and events in Ukraine.

Weather

A very strong storm system is moving through the Plains Tuesday morning. A line of showers and thunderstorms are creating some severe weather across Texas, which will likely get into Louisiana and adjacent areas this afternoon. Farther north, heavy snow is picking up from Colorado to South Dakota and will expand into Montana, North Dakota, and Minnesota later Tuesday and Tuesday night. Winds are also strong across much of the middle of the country, creating blowing dust in dry areas of the Plains and a blizzard in the heavy snow across the north.

USDA Releases December WASDE Report, Corn Exports Drop

The December World Ag Supply and Demand Estimates report says the 2022-2023 corn outlook is for lower exports and greater ending stocks. Exports dropped by 75 million bushels as export competition and high U.S. corn prices have slowed sales and shipments. Corn ending stocks grew by 75 million bushels. The season-average corn price dropped ten cents to $6.70 a bushel. Soybean supply and use projections are unchanged from November. Because of the recent EPA proposal on RVOs, soybean oil used for biofuels dropped by 200 million pounds. Oil exports are also at historic lows through November. The season-average soybean price is unchanged at $14.00 per bushel. The December wheat supply and use outlook is unchanged from last month. Global wheat consumption is lowered by 1.6 million tons, mainly on lower feed and residual use by the EU and Ukraine. The season-average farm price is down by ten cents to $9.10 a bushel.

Representatives Send Letter to USTR on Mexico’s Upcoming Corn Ban

Twenty-four members of the House of Representatives Ways and Means Committee sent a letter to U.S. Trade Representative Katherine Tai about Mexico. They want a resolution to a lingering trade dispute with Mexico over biotech corn imports. “We’ve been working closely with Congress on this issue, and it’s inspiring to see congressional champions faithfully taking up the mantle,” says National Corn Growers Association President Tom Haag. “These members are now looking to Ambassador Tai to uphold the integrity of USMCA.” The letter is the latest development and response from U.S. officials as the ag community braces for a fallout if Mexico follows through on its promise to ban biotech corn shipments in early 2024. Ninety percent of U.S. corn is biotech corn. Ag Secretary Tom Vilsack traveled to Mexico City and met with Mexican President Lopez Obrador, saying the U.S. would consider all options, including formal steps to enforce the terms of USMCA.

Beef Agreement Between U.S., Japan Officially Set for January 1, 2023

U.S. Trade Rep Katherine Tai and Japan’s Ambassador to the U.S. confirmed that amendments to the beef safeguard trigger level under the U.S.-Japan Trade Agreement will trigger on January 1, 2023. The letters confirmed both countries completed their procedures to put the protocol in place. “The new beef safeguard agreement will ensure that America’s farmers and ranchers can continue to meet Japan’s strong demand for high-quality U.S. beef,” says Tai. “I’m grateful to leaders and stakeholders in both countries for their dedication and ingenuity, which were important in reaching this outcome.” The new protocol amends the beef safeguard trigger level with a new three-trigger safeguard mechanism. The new amendment allows U.S. beef exporters to more reliably meet Japan’s growing demand for high-quality beef, provides more predictability, and reduces the probability that safeguard duties would get imposed on U.S. beef. All three criteria must be met to impose a tariff on U.S. beef.

FCA Issues Latest Report on the Ag Economy

The Farm Credit Administration received a quarterly report on economic issues affecting U.S. agriculture and an update on the performance of the Farm Credit System. Inflation and rising interest rates continue to be major economic issues despite a recent slowdown in inflation. Consumer reaction to inflation, higher interest rates, and the labor market will be key drivers for the economy in 2023. Input costs will be important for farmers next year. Volatility in the price of natural gas will continue to be passed on through fertilizer prices. Supply chain difficulties persist with agricultural equipment, leading to high prices and long waits for new equipment and replacement parts. Through the first nine months of 2022, the Farm Credit System reported favorable financial results, including continued loan growth, increased earnings, and robust capital levels despite some decline in the System’s capital-to-asset ratio. Portfolios remained strong despite challenging operating conditions in certain sectors and regions.

ASA, Cotton Growers Present Oral Arguments in Dicamba Case

The American Soybean Association and the Plains Cotton Growers, Incorporated, presented oral arguments before the D.C. Circuit Court of Appeals last Thursday. It’s a part of the case of the American Soybean Association versus the EPA. The two groups urged the court to clarify jurisdictional rules under FIFRA and to require the Environmental Protection Agency to use the best available science when evaluating dicamba pesticide registrations and potential impacts to species protected by the Endangered Species Act. The groups filed the lawsuit against EPA in November 2020 on the five-year registration for the use of dicamba on dicamba-tolerant soybeans and cotton. Growers argued EPA’s flawed approach led the agency to impose arbitrary and overly burdensome buffers and application cutoff dates. The groups are asking the court to remand portions of the registration back to the EPA for reconsideration with the direction to use the science and data available to the agency.

NSP Announces Winners in its Sorghum Yield Contest

National Sorghum Producers announced the winners of the 2022 Sorghum Yield Contest. This year’s Bin Buster Award winners are Brant and Amy Peterson of Winsome Farms in Kansas. They had the top yield in the contest at 245.8 bushels per acre. “National Sorghum Producers congratulates the winners of the 2022 Sorghum Yield Contest,” says NSP Board of Directors Chair Craig Meeker. “Despite a challenging growing season, there are impressive top-end yields scattered across the nation. We congratulate the winners and look forward to recognizing them during the 2023 Commodity Classic in Orlando, Florida.” Meeker says the results of this year’s contest show just how resilient sorghum can be. “The Bin Buster yield is six times the 2022 national average yield this year and one of the top ten yields on record in the contest.” While the drought had a significant impact on many sorghum growers, Meeker says they’re very proud of the results.

Monday Watch List

Markets

Back from the weekend, traders will be checking the latest weather forecasts, especially for South America, and still digesting the few changes from Friday's WASDE report. USDA's weekly report of export inspections will be out at 10 a.m. CST and will likely show more soybean movement. The U.S. Treasury reports on the federal budget for November at 1 p.m.

Weather

A major winter storm system will move out of the Rockies and into the Plains on Monday. Winds will increase ahead of the system, bringing a lot of moisture northward for the system to work with. Widespread precipitation is expected in the middle of the country by late afternoon or evening, including heavy snow and some ice to the north and potential for severe storms along a cold front in the Central and Southern Plains. Temperatures are well above normal for a lot of the country but will be falling below normal as the system moves eastward through the rest of the week.

Vilsack to Announce Second Round of Climate-Smart Commodities Investments

Agriculture Secretary Tom Vilsack travels to Alabama Monday to announce the second round of investments of the Partnerships for Climate-Smart Commodities funding. Projects from the second funding pool will emphasize the enrollment of small farming and ranching operations, including underserved producers, as well as measurement, monitoring, reporting and verification activities developed at minority-serving institutions. The investment in projects nationwide will expand markets for climate-smart commodities, leverage the greenhouse gas benefits of climate-smart commodity production and provide direct, meaningful benefits to production agriculture, according to USDA. In September, Vilsack announced USDA is investing up to $2.8 billion in 70 selected projects under the first pool of the Partnerships for Climate-Smart Commodities funding opportunity. USDA first announced details of the Partnerships for Climate-Smart Commodities opportunity in February 2022. The 70 projects announced in September are from the first funding pool, which included proposals seeking funds ranging from $5 million to $100 million.

AFBF: Labor Challenges Increase Farm Economy Pressures

Labor demands continue to tax the bottom lines of farmers and ranchers, with rising wage rates and record usage of the H-2A visa program. The American Farm Bureau Federation says meaningful reforms to the federal government's guest worker program must be a priority for Congress by the end of the year. AFBF and more than 350 other food and farm organizations that are part of the Ag Workforce Coalition sent a letter urging the Senate to pass legislation to address the nation's agricultural workforce challenges this year. The House of Representatives passed a farm labor reform bill, but the legislation needs improvements according to the coalition. The letter states, “The country cannot afford for the Senate to miss this opportunity to provide stability to both farmers and farmworkers.” Recent analysis from AFBF economists indicates that costs associated with farm labor will add to the ever-expanding list of factors straining the farm economy in 2023.