Senate Passes Resolution Overturning Biden Administration’s WOTUS Rule

The Senate passed the Congressional Review Act joint resolution of disapproval that overturns the Biden Administration’s Waters of the United States Rule by a 53-43 vote. Senator Shelley Moore Capito (CAP-ih-toe) (R-W.VA.), ranking member of the Environment and Public Works Committee, introduced the resolution in February. The administration introduced a new rule in December 2022 that repealed the Navigable Waters Protection Rule and changed the definition of WOTUS in a way that will significantly expand regulatory authority. “By voting to overturn the president’s waters rule, we are sending a clear, bipartisan message that Congress, even a divided one, will defend working Americans in the face of executive overreach,” Capito says. The National Cattlemen’s Beef Association commended the Senate for passing the resolution. “The president now has a choice: sign the resolution and pull back the rule or turn his back on rural America,” says NCBA President Todd Wilkinson of South Dakota.

Poll Shows Voters Want Year-Round E15

A new poll shows overwhelming support among voters for year-round access to E15 across the country. With retail gas prices still high, almost 70 percent of poll respondents support increasing the availability of E15 to help lower fuel prices and support energy independence. Only 13 percent of those surveyed said they didn’t support expanded E15 availability. Meanwhile, 62 percent support recently introduced bipartisan legislation that would allow the lower-carbon E15 blend to be sold year-round nationwide. “We’re pleased but not surprised,” says Geoff Cooper, President and CEO of the Renewable Fuels Association. “Drivers continue to embrace an American-made fuel that’s more affordable and lower in carbon emissions.” Last summer, E15 sold for 20 to 30 cents a gallon cheaper than regular gasoline. Those savings will disappear on June 1 unless Washington takes action. “They need to act quickly to make sure lower-cost E15 is available through the summer driving season,” Cooper adds.  

Groups Want Tighter Checkoff Rules

Over 130 agricultural and food groups are asking the House and Senate Ag Committees for stricter rules that govern checkoff programs. The organizations wrote committee leaders in both chambers to support the Opportunities for Fairness in Farming Act. The groups say the legislation would restore what they call a “minimum level” of oversight. “Several of the mandatory checkoff programs and associated boards have well-documented histories of waste, conflicts of interest, misuse of funding, anti-competitive behavior, and other issues,” the letter says. “For these reasons, many farmers and ranchers across the country have grown disillusioned with the effectiveness of many of these checkoff programs as they operate today.” The legislation would prohibit checkoff programs from contracting with any organization that lobbies on agricultural policy, prohibit employees and agents of the checkoff boards from engaging in activities that may involve a conflict of interest, require publishing of checkoff financial information, and make other changes.

Iowa State Releases the 2023 Custom Farming Rates Report

Many farmers in rural America hire some custom machine work in their farm business or perform custom work for others. Others may rent machinery or perform other services. To help producers and custom operators examine the current market, Iowa State University Extension and Outreach publishes the Iowa Farm Custom Rate Survey. Most custom farming rates saw an increase of 10-15 percent. Custom planting ranges from $12.50 to $45 per acre, depending on the type of planter and setup. Combining corn showed an average of $41.30 per acre, and combining soybeans averaged $39.90 an acre, an increase of 12.4 percent and 10.7 percent, respectively. ISU Extension says the information in the survey is meant to be a starting point for farmers and agribusinesses to engage in conversations and negotiations. It’s not meant to set the rate for a particular practice or operator. The survey assumed diesel prices would be around $3.39 a gallon.

Train Carrying Ethanol Derails in Minnesota

A freight train carrying ethanol and corn syrup derailed in a fiery crash near a small Minnesota town in the early hours of Thursday morning. The incident was reported to law enforcement and emergency responders at 1 a.m. and forced residents to evacuate the area. A BNSF Railway train had multiple tankers derail and catch fire on the western edge of Raymond, a small southwestern Minnesota town of fewer than 800 people. The local county sheriff’s office says the train was carrying a “form of ethanol” and a “corn syrup liquid.” BNSF, one of the largest freight railroad networks in North America, is investigating the cause of the incident, and so far, there are no reported casualties, according to ABC News. “The main track is blocked in that area, and an estimated time for reopening the line isn’t available yet,” says spokesperson Lena Kent. “We’re working closely with local first responders.”

Sorghum Checkoff Partners with Google to Grow Awareness, Demand

The United Sorghum Checkoff Program has announced a strategic partnership with Google to increase sorghum consumer awareness through innovative marketing strategies. USCP is a producer-funded national organization dedicated to improving the sorghum industry and representing sorghum farmers across the U.S. The program will leverage Google’s expertise in digital marketing to create consumer awareness campaigns that promote the sustainability and health benefits of sorghum and its versatility as a food ingredient. USCP recently developed and launched a new campaign for this partnership titled “Sorghum. Food’s Best Kept Secret” to showcase and offer a new whole-grain option for consumers. The campaign’s ads can be viewed on the Sorghum Checkoff’s YouTube channel, “Sorghum. Nature’s Super Grain,” and are powered by Google Ads, leveraging Google’s expertise in digital marketing. “Our partnership with Google will allow us to take our sorghum consumer awareness campaigns to the next level,” says USCP Director of Communications Clint White.

Friday Watch List

Markets

Reports on U.S. personal incomes and consumer spending are due out at 7:30 a.m. CDT Friday, followed by the University of Michigan's consumer sentiment index at 9 a.m. USDA's Prospective Plantings and Grain Stocks reports are set for 11 a.m., followed by DTN's webinar at 12:30 p.m. Traders will monitor the latest weather forecasts and watch for a possible export sale announcement at 8 a.m.

Weather

A strong storm system in the Plains will continue east through the Midwest on Friday. Widespread precipitation is developing with this storm, especially across the Midwest early Friday morning. The cold front racing between the Rockies and Appalachians will produce a line of very strong and severe thunderstorms by midday across the middle of the country. A widespread severe weather event is expected from this activity across the middle of the country. A band of heavy snow is also found in South Dakota and Nebraska that will be continuing eastward through the Upper Midwest for Friday and Friday night. Strong winds with the system will create some damage, and in the southwest it will be another day of blowing dust in the drought. Where it coincides with the heavy snow across the north, some blizzard conditions will be possible.

Agriculture Takes the Spotlight on Capitol

Discussions on agriculture ran rampant through the halls of Capitol Hill this week, with several high-profile Cabinet officials meetings with legislators. Agriculture Secretary Tom Vilsack fielded questions from Senate and House agriculture and appropriations committees on issues ranging from nutrition assistance to disaster aid, rural broadband funding, the Environmental Protection Agency's pesticide regulation and foreign ownership of U.S. farmland.

 

Just this morning, reauthorization of the Animal Drug User Fee Act (ADUFA) kicked off with a hearing in the House Energy and Commerce Subcommittee on Health, with the subcommittee chair calling for the Food and Drug Administration’s Center for Veterinary Medicine (CVM) to “modernize its review process, so sponsors can continue to bring safe and effective animal drugs to the market” and confirmed the committee’s commitment to reauthorizing these critical user fee programs before the Sept. 30 expiration date.

 

In other news, we finally received word on the administration’s trade agenda, or lack thereof, late last week when U.S. Trade Representative Katherine Tai testified before both the House Ways and Means and Senate Finance Committees. Tai told the committee that lawmakers who have urged her office to return to negotiating traditional free trade agreements, “Needed to wake up to the realities of the new economic order,” and that “we live in a very different world” where “we can't keep doing things the same way.” In addition, she noted the administration would continue pressing Mexico on its biotech corn ban and would not “let this go on indefinitely.” 

University of Missouri Releases 2023 Market Outlook

The University of Missouri’s Food and Agricultural Policy Research Institute Wednesday released its 2023 U.S. Agricultural Markets Outlook. The report summarizes baseline projections for agricultural and biofuel markets prepared using market information available in January 2023. The report finds that if weather conditions allow crop yields to return to trend-line levels in 2023, prices for corn, soybeans, wheat, cotton and many other crops will likely fall. Higher input costs contributed to a sharp increase in farm production expenses in 2022. A smaller increase is projected in 2023, and lower prices for some inputs will reduce production costs in 2024 and 2025. In 2023, most projected livestock sector prices will fall as supplies rebound and demand growth slows. The one major exception is cattle, where drought and other factors limit the number of animals available for slaughter. Finally, net farm income reached a record level in nominal terms in 2022. The report projects net incomes to decline in 2023 and 2024 as receipts and payments fall.

Survey Shows Strong Public Support for Farm Bill Passage

Almost three-quarters of Americans say that not reauthorizing the farm bill in 2023 would have a significant impact on the country. The response comes from a new American Farm Bureau Federation poll that explores the public's awareness of the farm bill. The poll, conducted by Morning Consult, showed more than half of respondents said they would be more likely to support their member of Congress if they voted to reauthorize the farm bill. Nearly 70 percent of respondents also identified two areas of the farm bill as top priorities for government funding: risk management programs that serve as a safety net for farmers and nutrition programs that serve as a safety net for families facing hunger. A majority of adults agree that nutrition programs, 68 percent, and risk management, 67 percent, should be top priorities for government funding in the farm bill. Further, the survey found 89 percent of adults trust farmers.

Lawmakers Welcome Vilsack Support of PASS Act

Agriculture Secretary Tom Vilsack this week expressed support for their Promoting Agriculture Safeguards and Security, or PASS Act. The legislation would ensure USDA is fully involved in reviewing foreign acquisition of American agricultural land and companies, specifically targeting China. Vilsack responded to Representative Rick Crawford's question during a House Agriculture Committee hearing regarding the role of a USDA Secretary on the Committee of Foreign Investment in the United States. Vilsack says, “Being a permanent member would allow us to educate the other members of CFIUS in the United States what to look for and what to be sensitive to when it comes to agriculture and agricultural production.” Crawford, an Arkansas Republican, responded, “It’s time to be proactive in addressing these threats to our food supply and to our producers.” Representative Elise Stefanik, a New Yor Republican, adds the legislation "takes critical steps to ensure we do not concede any ownership of our food supply to those actively working against our security interests."

FBN Releases Spring Planting Intentions Report

Farmers Business Network this week released its 2023 Planting Intentions Report. The survey, according to FBN, is one of the most accurate in recent years, released ahead of USDA’s Prospective Plantings report Friday. The report found U.S. corn acreage is projected to increase 3.9 million acres to 92.5 million acres in 2023, a 4.45 percent. Meanwhile, U.S. soybean acreage is expected to be at 84.5 million for 2023, 3.4 percent or three million acres lower than last year. U.S. farms are expected to plant 11 million acres of spring wheat in 2023, up only slightly from last year's total. FBN Chief Economist Kevin McNew says, “This report helps decipher how the complex global geopolitical factors, weather conditions, and market demand are shaping farmer decisions for the year ahead.” During March 2023, an electronic survey was distributed to U.S. FBN members. The FBN survey responses accounted for 4.7 million acres of principal crops across the United States.

CFTC Charges Chinese National with Fraudulent Scheme to Trade Against Employer

The Commodity Futures Trading Commission this week filed charges against a Chinese national, in the Northern District of Illinois Court. CFTC charged Dichao Xie (De-chow Sheah) with a fraudulent scheme in which he misused knowledge of his employer’s trading in feeder cattle futures and options to trade for his own benefit in breach of a duty to his employer. Xie’s trades also constituted illegal fictitious and noncompetitive trades under the Commodity Exchange and CFTC regulations, according to the complaint. The complaint seeks, among other relief, civil monetary penalties, return of any ill-gotten gains, restitution, and permanent trading and registration bans. The complaint alleges that from approximately December 2021 to April 2022, Xie engaged in a fraudulent scheme to misappropriate material, non-public information from his employer in breach of a duty to that employer. Xie misused that information to enter into trades of feeder cattle futures and options fraudulently and deceptively for his personal benefit.

Economic Research Service: Georgia Leads U.S. Production of Peanuts

New data from USDA’s Economic Research Service finds Georgia leads U.S. production of peanuts, outpacing all other states combined. Peanuts are grown mainly in the South, where the climate is warmer and growing seasons are longer than in northern zones. Most U.S. peanut production comes from six States: Georgia, Florida, Alabama, North Carolina, South Carolina, and Texas. USDA data finds the U.S. peanut crop in 2022 was estimated at 5.57 billion pounds. Accounting for more than 50 percent of all U.S. peanut production, Georgia produced the most peanuts of any state, with a 2022 peanut crop estimated at 2.9 billion pounds. Alabama’s peanut harvest, at 559 million pounds, was a distant second to Georgia, followed closely by Florida with 554 million pounds. The 2022 U.S. peanut crop was nearly 13 percent smaller than in 2021 because of lower acreage and yields. Smaller crops were estimated in all states except North Carolina, where production increased three percent from 2021.

Senators Roll Back EPA WOTUS Rule, Though Veto is Expected

OMAHA (DTN) -- Republicans in Congress succeeded in passing a bill through the Democratic-led Senate on a 53-43 vote Wednesday to overturn the controversial waters of the U.S. rule under the Clean Water Act, sending the bill to President Joe Biden, who is expected to veto the measure.

The resolution of disapproval matched a bill passed by the House on a 227-198 vote earlier this month.

Agricultural groups have been among some of the most ardent critics of the latest attempt to define waters of the U.S. in a federal rule. Groups maintain the new rule is overly broad and could lead to federal regulation of ditches, ephemeral streams and low spots on farmland.

Zippy Duvall, president of the American Farm Bureau Federation, called on Biden to follow Congress and rescind the rule.

"Farmers and ranchers are committed to protecting the land and water they rely on to grow food for America's families," Duvall said. "Unfortunately, the 2023 WOTUS threatens the progress made to responsibly manage natural resources. We urge President Biden to recognize the concerns from members of both parties and rescind this troubled rule."

The White House has said the president will veto the resolution, which would mark his second veto in the past month. Still, a veto on the waters of the U.S. (WOTUS) rule would come essentially while the U.S. Supreme Court has a pending case, Sackett v EPA, that also likely will go a long way in determining whether the latest EPA rule will need to be rewritten.

IMPACT ON FARMERS, RANCHERS

Senate Minority Leader Mitch McConnell, R-Ky., lashed out at the rule, which he said would affect farmers, ranchers and infrastructure projects. He also pointed to the bipartisan opposition to the rule.

"America's farmers and ranchers have tough enough jobs without Washington Democrats inventing new problems," McConnell said. "But yet again, unelected bureaucrats at the EPA are trying to dump massive new regulations onto the heads of the small businesses that feed and fuel our economy. The Biden administration's latest version of the Waters of the United States is not some commonsense conservation measure. It's a radical power grab that would give federal bureaucrats sweeping control over nearly every piece of land that touches a pothole, ditch, or puddle."

McConnell also pointed to the pending Supreme Court case. "If the president vetoes it, Americans will need to hope the Supreme Court makes it clear that these EPA bureaucrats are way outside the authority that Congress actually provided in the Clean Water Act."

LONG-STANDING BATTLE

The Sackett case involves a long-standing battle between an Idaho couple and EPA over whether the Ninth Circuit Court of Appeals followed the proper legal tests for determining whether wetlands qualify as waters of the U.S. The case was argued in October, and a ruling will come sometime this spring.

The outcome of the Sackett case will more than likely lead federal courts to either uphold or reject the new WOTUS rule based on the language in the ruling.

The bill passed the Senate with the support of every Republican senator along with four Democrats -- Sens. Joe Manchin of West Virginia, Catherine Cortez Mastro and Jacky Rosen of Nevada and Jon Tester of Montana, as well as Sen. Krysten Sinema, I-Ariz. As it is, the latest version of the WOTUS rule is on hold due to court injunctions in Texas and Idaho. Another 24 other states have asked a federal court for a similar injunction.

EPA ADMINISTRATOR CRITICIZED

EPA Administrator Michael Regan was criticized Tuesday in a House Appropriations Subcommittee hearing about the latest Clean Water Act rewrite. Regan told the subcommittee he doesn't believe EPA expanded federal authority over waters in the new rule. He said the agency believes the new rule "narrowed" the test put forward by the Supreme Court on making Clean Water Act determinations, emphasizing that USDA also supports the rule.

Regan, when asked why EPA drafted the new rule before the Supreme Court ruling on the Sackett case, said the agency moved forward because the last rule from the Trump administration also had been rejected by federal courts.

"There are also some aspects of this rule that the Sackett case won't touch," Regan said. He added, "And so, what we decided to do was move forward, try to codify a number of exemptions that were requested of us by the agricultural community. And I obviously respect the Supreme Court's position. I will respect the Supreme Court's ruling. What we have now is we can adjust it to what the Supreme Court rules this summer. We will adjust this rule, and we will move forward in a much more expeditious way than waiting to June and then start a two- to three-year rulemaking process. So, I think we are ahead of the curve in terms of having the framework for moving forward."

Thursday Watch List

Markets

USDA's weekly export sales report will be out at 7:30 a.m. CDT, the same time as weekly U.S. jobless claims and updates of second-quarter U.S. GDP and the U.S. Drought Monitor. The U.S. Energy Department's natural gas storage report is set for 9:30 a.m., followed by USDA's March 1 hog and inventory report at 2 p.m.

Weather

A strong storm system that has been building in the West the last couple of days is moving into the Plains on Thursday. Strong winds will be the first noticeable change to the region while scattered showers and thunderstorms will develop later in the day across the Plains and into the Midwest. A band of moderate to heavy snow will develop overnight across southeast Montana, northeast Wyoming and South Dakota and continue eastward for Friday. More impacts will be felt on Friday across the eastern half of the country.

USDA Seeks Nominees to Advisory Committee on Minority Farmers

The Department of Agriculture seeks nominations for individuals to serve on the Advisory Committee on Minority Farmers. The committee will recommend solutions to challenges faced by minority farmers and ranchers and is part of USDA's commitment to advance equity for all, especially for farmers and producers in underserved communities. The committee is administered by USDA's Office of Partnerships and Public Engagement. The committee was established in the Food Conservation and Energy Act of 2008. Advisory Committee members will represent underserved farmers and farming communities and should also reflect the diversity of agriculture in geography, size, scale and type of production. Members will include six or more farmers or ranchers; two or more individuals from minority-serving institutions of higher education; two or more individuals from community-based nonprofit organizations; and two or more individuals with civil rights and equity expertise. All nomination packages received by April 24, 2023, will be considered. Nominations may be submitted electronically to the Advisory Committee's dedicated email at acmf@usda.gov.

CoBank Outlines Three Risks for Ag Retailers

The outlook for agricultural retailers is generally favorable for 2023, following a year of record profits in 2022. However, the sector faces emerging risks that could depress profit margins and challenge traditional business models in the years ahead. Lower levels of industry working capital, higher property insurance costs, and changing grower needs are three of the key issues that ag retailers will need to navigate over the next five years. A new report from CoBank shows that a downturn in the crop cycle, after several years of consecutive high profits, is likely during 2024 or shortly thereafter. Lower levels of farmer working capital during the current upcycle suggests growers will cut back on input purchases more dramatically during the next downturn. Total farming working capital during the 2021/2022 crop cycle peak averaged $138 billion. That's down from $215 billion during the 2012 peak. Additionally, the rising cost of property insurance is an emerging risk factor that will pressure farm supply cooperatives profitability.

New Report Links National Security and Global Hunger

Global hunger and malnutrition pose significant threats to U.S. national security, according to a new report commissioned by Farm Journal Foundation. The report, authored by researchers from Texas A&M University, examines how global food insecurity is linked to numerous geopolitical risks. Increasing investments in agricultural development and innovation would help mitigate these risks by enabling developing countries to improve their crop yields and better feed themselves. Lead author Dr. Edwin price says, "Investments in improving farm productivity in developing countries would go a long way toward addressing the root causes of many national security risks." The report makes a series of recommendations for how the U.S. can invest in long-term global agricultural development. This includes increasing investments in global food and nutrition security programs and research and innovation within the government's Feed the Future initiative. The report also suggests supporting Foundation for Food and Agricultural Research funding in the Farm Bill.

State AGs Seek Right to Repair

A group of state attorneys generals recently asked Congress to pass expansive Right-to-Repair legislation targeted at cars, farm equipment, and digital electronics. In a letter to the House and Senate Commerce Committee, the group says, "The Right-to-Repair is a bipartisan issue that impacts every consumer, household, and farm in a time of increasing inflation.” Manufacturing of cars, digital devices, and agricultural equipment is increasingly becoming more technologically advanced and built with more embedded electronics. OEMs often control access to these electronic parts, creating unfair restraint of trade and a monopoly on repair. This can harm consumers directly by driving up prices and is antithetical to a free market, according to the letter. The letter asks the lawmakers to introduce legislation to address Right to Repair. The letter cites past bills, such as the 2021 SMART Act, the 2022 REPAIR Act, and the 2021 Fair Repair Act, as examples.

USDA-ARS Joins WCR Global Coffee Breeding Network

USDA's Agricultural Research Service announced it has joined the Global Coffee Breeding Network coordinated by World Coffee Research. The network will offer USDA broader opportunities to develop more climate-resilient coffee varieties with resistance to pests and diseases. Kona coffee, one of Hawaii's most legendary and valuable agricultural crops, has come under increasing threats from new diseases and pests. A U.S. Pacific Basin Agricultural Research Center spokesperson says, "we'll have a partnership with coffee growing countries around the world that will expand our ability to add pest and disease resistance and greater climate resilience to the coffee crop and supporting U.S. growers." The network's goal is to bring together collaborating countries to transform coffee breeding and accelerate the pace of genetic improvement to the crop's yield, quality, climate resilience, and resistance to pests and diseases. Nine countries have joined the network, including Costa Rica, India, Indonesia, Kenya, Mexico, Peru, Rwanda, Uganda and now ARS in the United States.

BASF Doubles Donation Goal to FFA

BASF Agricultural Solutions exceeded its initial goal of $5,000 and raised $10,000 during Give FFA Day on Thursday, February 23, 2023. Since 2022, BASF has donated more than $550,000. BASF Vice President Neil Bentley says, “This is a huge milestone and shows how passionate BASF employees are for the industry when so many are willing to support organizations committed to leading the next generation to careers in agriculture." Give FFA Day is part of an annual week-long celebration, National FFA Week, from February 18 - 25. The National FFA Board of Directors designated the weeklong tradition beginning in 1948, spanning the week of George Washington's birthday, to recognize Washington's legacy as an agriculturist and farmer. The 2023 national goal for Give FFA Day was $500,000. In total, the 24 hours of support far exceeded that goal, raising $721,506 on February 23 alone - nearly $1 for each member of FFA.

Wednesday Watch List

Markets

Traders will check the latest weather forecasts and wait to see if USDA has an export sale announcement at 8 a.m. CDT Wednesday. The U.S. Energy Department's weekly inventory report, including ethanol production is due out at 9:30 a.m.

Weather

A storm system in the West will continue to slowly move through the region on Wednesday with widespread precipitation and wind hazards. It will be a rather quiet day east of the Rockies, with just some isolated showers across the South and a little snow in the Midwest behind a cold front. Temperatures across the north in particular continue to be quite cold for this time of year, limiting snow melt on a large snowpack.

Biden Asked to Intervene in West Coast Port Labor Talks

A large coalition of agriculture and business groups asked President Joe Biden to intervene in the west coast port labor negotiations. In a letter signed by the groups, including the American Farm Bureau Federation, they say, “It is imperative that the administration work with the parties to quickly reach a new agreement and ensure there is no disruption to port operations." The coalition previously voiced concerns when the labor contract expired in July last year. Negotiations have been ongoing for over ten months, with little to no progress towards a new long-term agreement, according to the letter. The letter further states, “the only way to resolve these issues is for the parties to remain at the bargaining table and actually negotiate.” The effort is to encourage the administration to provide any and all support to the parties in their negotiations to reach a final agreement between the International Longshore and Warehouse Union and the Pacific Maritime Association.

NCBA Calls for Continued Ban on Paraguayan Beef Imports

The National Cattlemen’s Beef Association is calling on Agriculture Secretary Tom Vilsack to continue blocking Paraguay from importing beef to the United States. The effort is in response to the Department of Agriculture releasing a proposed rule that would grant access to Paraguayan beef imports. NCBA Executive Director of Government Affairs Kent Bacus says, “Paraguay has a history of outbreaks of foot-and-mouth disease, and we cannot jeopardize the safety of U.S. consumers and the health of our U.S. cattle herd.” NCBA says the data used to inform the proposal by USDA is nine years old from site visits that occurred in 2008 and 2014. Bacus says the United States has the highest animal health and food safety standards in the world “because we rely on the most up-to-date information and the highest science-based standards.” NCBA adds USDA should not proceed with the application until a thorough review can be conducted with current information that demonstrates Paraguay’s equivalence in animal health.

2022/23 U.S. Sorghum Crop: Highest Quality

The U.S. Grains Council’s 2022/23 Sorghum Quality Report for the fourth year in a row, found U.S. sorghum was, on average, graded above the necessary requirements for U.S. No. 1 certification. Released last week, the report provides international customers and other interested parties accurate, unbiased information about the 2022/23 U.S. sorghum crop. USGC Chairman Josh Miller says, “We hope this year’s report helps give our valued trade partners even more confidence in the continued reliability and quality of U.S. sorghum.” A total of 97 samples were collected from 15 participating elevators and one participating farmer in the central and southern regions of the United States. Total sorghum damage came in at 0.0 percent in the aggregate, and broken kernel and foreign material was only 1.4 percent, lower than last year’s results, highlighting the grain’s hardness and how well it survives handling and storage. Additionally, tannins were absent from the sorghum samples for the fourth year in a row and protein content averaged 11 percent.

Most Row Crop Acreage Now Managed Using Auto-steer and Guidance

Auto-steer and guidance system adoption on U.S. farms increased sharply in the past 20 years, according to USDA’s Economic Research Service. Farmers indicate they use the technology on more than 50 percent of the acreage planted to corn, soybeans, winter wheat, and cotton as of 2019. Adoption rates were 58.4 percent of acres planted to corn in 2016, 55.9 percent of winter wheat acres in 2017, 54.5 percent of soybean acres in 2018, and 64.5 percent of cotton acres in 2019. Economic Research Service researchers examined producer responses from various Agricultural Resource Management Surveys to better understand how auto-steer and guidance systems use has evolved. Using GPS, these technologies visualize and track the position of tractors, harvesters, and sprayers in the field in real time. Autonomous steering permits automatically guided fertilizing, harvesting, and other tasks in the field with minimal involvement from the farmer, increasing field efficiency, reducing operator fatigue, and freeing up operator time in the equipment’s cab.

USDA Research: Increasing Vegetable Consumption May Better Mental Health

New research finds that increasing vegetable consumption has a positive effect on how happy a person feels. USDA’s Agricultural Research Service says that holds true for adults who consume the daily amount of vegetable servings recommended by the Dietary Guidelines for Americans. Researchers at the Grand Forks Human Nutrition Research Center conducted the eight-week study. The study divided healthy men and women between 18 and 65 years old into two groups. The first group of participants received daily servings of the recommended number and variety of vegetables based on their energy needs during the course of the study. The second group of participants received the same number of interactions and attention from the researchers while maintaining a diet without adding vegetables. All participants completed a questionnaire called the Subjective Happiness Scale, or SHS. Researcher Shanon Casperson says, “Results suggest that increasing the amount of vegetables you eat every day may benefit your mental health.”

Fuel Prices Decline Again, GasBuddy Warns of Increase Soon

Gas and diesel prices fell again last week. The nation’s average gas price declined three cents to $3.40 per gallon, which is 7.8 cents high than a month ago, but 83 cents lower than a year ago. The national average diesel price dropped 5.9 cents to $4.19 per gallon, 92.7 cents lower than a year ago. However, GasBuddy’s Patrick De Haan warns prices should start moving higher again. De Haan says, “any downward trends are still likely to be temporary and not necessarily long lasting.” GasBuddy cites the start of the upcoming summer driving season as a potential to increase demand and prices, along with the ongoing switch to more expensive summer blends of gasoline. Meanwhile, concerns over the recent banking collapse are fading and oil prices are seeing some strength as Chinese consumption rebounds. However, U.S. retail gasoline demand saw a rise of 0.14 percent last week, which on the surface was much more tame than expected.

Tuesday Watch List

Markets

Traders will check the latest weather forecasts and pause at 8 a.m. CDT Tuesday to see if USDA has another export sale to announce. A report on U.S. consumer confidence for March will be out at 9 a.m., the only significant report on Tuesday's docket. Traders are already looking ahead to Thursday's Hog and Pigs report and Friday's Grain Stocks and Prospective Plantings reports.

Weather

A couple of small disturbances are working their way through the country east of the Rockies on Tuesday, but with limited shower potential. The Gulf Coast will have some heavier showers along a stalled front there. All eyes are focused on the West where another storm system is moving in with widespread heavy precipitation. That storm system will bring widespread impacts to the country throughout the week. Colder temperatures over the northern snowpack continue to limit melting.

USTR Hearing Before Senate Committee Gets Testy

U.S. Trade Representative Katherine Tai testified before the Senate Finance Committee last week, and the discussion turned contentious. The Hagstrom Report says both Democrats and Republicans had a lot to say about the administration’s agricultural trade policies. Committee Chair Ron Wyden (D-Ore.) said he has real concerns that USTR isn’t doing enough to break down the barriers our exporters face. “I’ll draw a line here – the U.S. cannot conclude agreements with Japan, Indonesia, or the EU that leave issues facing our exports unaddressed,” Wyden said. In other remarks, Tai said she’s open to trade talks with China. “While we keep the door open to conversations with China, including on its Phase 1 agreement commitments,” she said during prepared remarks, “we must also defend our values and economic interests from the negative impacts of China’s unfair economic practices.” Her remarks didn’t indicate specific plans for discussions with China’s new economic team.

Planting Survey Shows Smaller 2023 Corn Crop

Farm Futures conducted its March survey and found farmers opting for more drought-consistent crops this spring as depleted soil moisture levels present a big challenge for farmers. Steep input costs are also a factor in acreage decisions this spring. As a result, Farm Futures expects that 2023 planted corn acreage will drop one percent from last year to 87.7 million acres. If that corn number is realized, the projected 87.7 million acres would be the smallest-planted U.S. corn acreage since 86.4 million acres got planted in 2009. Survey results show farmers in the Plains have the highest chance of changing some corn acres in 2023. Farm Futures’ soybean estimate of 89.6 million acres is a 2.5 percent increase from last year and would be the second-largest soybean crop on record. Farm Futures’ total wheat estimates are noticeably similar to acreages from a year ago but include 3.4 percent more winter wheat acres.

ERS Releases Report on U.S. Export Crop Competitiveness

The USDA’s Economic Research Service released a report titled “U.S. Export Competitiveness in Select Crop Markets,” and it showed the U.S. is still the world’s top corn exporter. The report says that export shares and exports-to-production ratios indicate that the United States is still the top exporter of corn, tree nuts, and cotton. However, it also says other competitors have gained shares in the global wheat and soybean markets. “Over the last decade, the U.S. lost its position in the global wheat market as the EU, Russia, and Ukraine gained market shares,” the report says. “Similarly, Brazil and Argentina continue to pose a challenge to U.S. soybean exports.” Brazil has been the largest exporter of soybean oilseed since 2021. The ERS report also shows the United States’ involvement in trade agreements contributes to its export competitiveness. “From 2012 through 2020, the U.S. didn’t establish any new free trade agreements,” the report says.

Food Prices Drop Slightly From January and February

The Food Price Index averaged 129.8 points in February 2023, down 0.6 percent from January and continuing the downward trend for the eleventh-consecutive month. As of February, the index has dropped 30 points from the peak it reached in March 2022. The marginal decline in February reflected significant drops in the price indices of vegetable oils and dairy together with smaller drops in cereals and meat indices. The sugar price index was the only one to rise sharply, up 8.1 points to 124.9 in February. The Cereal Price Index averaged 147.3 points in February, down a fraction from January and two points above its level one year ago. The Vegetable Oil Price Index averaged 135.9 points, down 4.5 points from January and reaching the lowest level since early 2021. The Dairy Price Index was 131.3 points, 3.6 points lower than in January, and the Meat Price Index dropped fractionally to 112 points.

Plant Closure Raises Antitrust Concerns

Tyson Foods recently announced it will be closing a Virginia processing plant in May. The two-month notice given to its chicken suppliers has raised concerns among farmers and legal experts about Tyson’s compliance with antitrust regulations. Those regulations require a company like Tyson to give a 90-day notice before they end a contract. The planned closure means chicken producers are scrambling to find new buyers in a region with few or no options. Reuters says there may be forthcoming fines for Tyson under the Packers and Stockyards Act, the U.S. antitrust law requiring the minimum advance warning. However, Tyson says it’s not canceling any farmers’ contracts and will pay the growers for the full remainder of their contracts, keeping them in compliance with federal antitrust regulations. Antitrust issues in meatpacking have been a priority for the USDA because four companies control up to 85 percent of the beef, pork, and chicken markets. 

Kansas Winter Wheat Struggling with Drought

Spring is typically a good time for rain on winter wheat. However, intense drought conditions in western Kansas continue to hurt winter wheat. Less than 20 percent of Kansas winter wheat is in good to excellent condition. The U.S. Drought Monitor says only 15 percent of Kansas’ acres are not experiencing any level of drought stress. More than 36 percent of the state reported D4 exceptional drought compared to just a little over one percent last year. D3 extreme drought conditions are hurting 16 percent of the state, with D2 severe drought hitting 13 percent of Kansas. Dennis Todey of the Midwest Climate Hub says the best chance of precipitation this spring is in the areas currently experiencing extreme drought to exceptional drought. Still, he says it’s going to be very hard to eliminate the drought in those areas. Todey says the worst drought is outside of corn and soybean growing areas.

Top 5 Things to Watch - Reports, Reports and Weather Reports

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of March 26. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Beware of corn and bean bears: The DTN commodity analyst team is continuing to watch for bearish market news as interest rates, bank closures and renewed saber rattling on the Black Sea grains front take headlines. DTN subscribers will know that we've recently made several marketing recommendations via our Six Factors Strategies. 

2. Big grain reports: March 31 sees the release of the USDA Quarterly Grain Stocks report and the spring Prospective Plantings report. Watch for Hultman's preview of those reports midweek. Coverage of the actual reports will hit right after 11 a.m. CDT on Friday, with updates throughout the morning. 

3. The week will also include: Monday -- USDA's weekly grain export inspections; Tuesday -- U.S. consumer confidence index for March. Wednesday -- DOE weekly energy inventories; Thursday -- USDA weekly export sales, U.S. jobless claims, Q2 update of U.S. GDP numbers and the quarterly hogs and pigs inventory.

4. Spring storms roll in: As we write this, severe weather appears likely for Tennessee Valley March 25-27. This is on top of the flooding and other rain damage in Missouri, Texas and Oklahoma. The states of Tennessee, Kentucky, and down into Alabama have certainly had their share of rough early spring weather the past few years. We're also watching the Southern Plains area for March 30 weather. Weather models show another big ol' doozy of a storm churning up for that area. "Big ol' doozy" is an official meteorological term, by the way, according to DTN resident cloud whisperer John Baranick.

5. Vilsack talks to Congress: There were lots of conversations around expectations for the 2023 Farm Bill and ag spending in general last week during the Ag Day celebrations in Washington, D.C. Those talks continue with Agriculture Secretary Tom Vilsack testifying before the U.S. House Agriculture Committee on Tuesday. We'll watch for insights around those questions and, more importantly, the answers.

Monday Watch List

Markets

Back from the weekend, traders will be checking the latest weather forecasts, especially for rain prospects in Brazil and have grown accustomed to expecting a daily corn sale announcement from USDA at 8 a.m. CDT. USDA's weekly export inspections report is due out at 10 a.m. and is the only significant event on Monday's docket.

Weather

A cold front that stalled out in the Southeast over the weekend and brought heavy rain while severe weather remains active. A weak system is moving through the Central Plains with some areas of snow that may be moderate in spots. Other small areas of showers dot the U.S. on Monday. Cold morning temperatures in the southwestern Plains may be causing more damage to more-advanced wheat as this area yet again misses out on precipitation.

Midwest Farmers Planting More Corn and Wheat

Midwestern farmers are planning to plant more corn and wheat this spring. An Ag Access survey says farmers will add 27 percent more acres to corn and 32 percent more to wheat. A smaller percentage, at 17 percent, says they’ll increase their soybean acres. The survey results match up with USDA projections at its recent Ag Outlook Forum. The agency forecasts corn plantings at 91 million acres, up from 88.6 million in 2022. Wheat plantings will be 49.5 million acres, up from 45.7 million in 2022. Soybean acres will total 87.5 million acres, unchanged from last year. USDA Chief Economist Seth Meyers says the increase in wheat acres is in response to tight supplies and high global prices brought on in part by the war in Ukraine. The Ag Access survey also asked farmers about their top concerns for 2023. Ninety-three percent said their top answer was high input costs.

Farmers Face Extreme Variation in the Price of Inputs

Farmers Business Network released its 2023 Ag Chemical Price Transparency Report which highlights the extreme price variation facing farmers. The report collected information from 37 states and accounts for over 800 insecticides, fungicides, and herbicides. “The last two years have seen extreme fluctuations in chemical pricing for farmers,” says Kevin McNew, chief economist and VP of FBN Research. “Providing more transparency enables producers to make more informed buying decisions to drive ROI from every input dollar.” Across 236 different chemical products, there was a 15 percent variance, on average, between the average list price of a product and the price farmers actually paid for it. For example, the average list price for Roundup PowerMAX 3 in June 2022 was $60 per gallon, but farmers paid between $45-$73 during that time. FBN says extreme farmer-to-farmer variability suggests that chemical markets make it challenging for farmers to get uniform costs for ag chemicals.  

Next Generation Fuels Act Reintroduced in the Senate

The Next Generation Fuels Act was reintroduced in the Senate, a move that drew praise from the National Corn Growers Association. The legislation, one of NCGA’s top agricultural advocacy priorities, would lower fuel prices, reduce carbon emissions, and help keep America’s energy secure. The Act would clean up the nation’s fuel supply and transition new vehicles to use cleaner, more efficient fuels that also lower costs for drivers. It would establish a clean, high-octane standard for fuel and require that sources of additional octane result in at least 40 percent fewer greenhouse gas emissions. That would allow automakers to significantly improve vehicle fuel efficiency through advanced engines. The legislation builds on the nation’s clean energy progress by advancing higher ethanol blends and new vehicles that work together to deliver greater emissions reductions, cost savings, and consumer choice. The Act would also permanently remove barriers that prohibit access to year-round ethanol.

Bankers Report an 8.1 Percent increase in Farm Bank Lending

Despite numerous headwinds in 2022, agricultural lending by U.S. farm banks increased by 8.1 percent in 2022 to $103.1 billion. The American Bankers Association’s annual Farm Bank Performance Report says the change is due to a 9.7 percent increase in outstanding loans secured by farmland and a 5.9 percent increase in agricultural and production loans. The report also says farmland continues to provide a strong equity base for producers to tap as land values saw strong growth in 2022 after staying flat for several years. The bankers say the ag sector will face continued challenges in 2023 due to monetary policy actions targeting persistent inflation in the U.S. and continuing geopolitical uncertainty. The report also shows farm banks are a major source of credit to America’s small farmers. Banks held more than $43.8 billion in small farm loans, including $9.3 billion in micro farm loans at the end of 2022.

Ethanol Output Drops Below One Million Barrels a Day

The Energy Information Administration says ethanol production dropped below an average of a million barrels a day during the week ending on March 17. That’s the first time production dropped below that mark in over two months. Output totaled 997,000 barrels a day, on average. That’s down from 1.04 million barrels a day during the prior week and the lowest since the seven days ending on January 6. The country’s largest-producing region is the Midwest, which saw production drop to 954,000 barrels a day from 966,000 the previous week. That’s also the lowest since early January. Gulf Coast production dropped an average of 8,000 barrels to 24,000 barrels per day. East Coast and West Coast production totals were the only ones higher than the prior week, with each rising about 1,000 barrels to an average of 11,000 and 5,000 barrels a day, respectively. Stockpiles averaged about 26.188 million barrels a day.

Nomination Open for American Lamb Board Members

Nominations for new members of the American Lamb Board must be submitted by certified nominating organizations and are due to the USDA’s Ag Marketing Service by May 5. The Secretary of Agriculture appoints the board members from the nominations. USDA is looking for a producer with 100 or fewer lambs, a producer with more than 500 lambs, a feeder with 500 or fewer lambs, a first handler, and a seedstock producer. One of the producer representatives must be from Region One, east of the Mississippi River. The board positions for feeder, first handler, and seedstock representatives are not limited to geographic location. Board members who have completed two consecutive three-year terms are not eligible for reappointment to the ALB. Each vacant position needs a minimum of two nominations. The 13-member board maintains and expands markets for sheep and lamb products. Board members come from both east and west of the Mississippi River.

Friday Watch List

Markets

A report on February U.S. durable goods orders will be out at 7:30 a.m. CDT Friday, the only significant report of the day. Traders will continue to monitor the latest weather forecasts and keep an eye on financial markets. Traders will also pause at 8 a.m. CDT, having gotten accustomed to USDA announcing a corn export sale.

Weather

Widespread rain and thunderstorms are occurring along a stalled front in the Ohio Valley back to a system moving through the Southern Plains. Thunderstorms are strong Friday morning across Oklahoma and Texas and will move through the Lower Mississippi Valley later Friday with significant risks of severe weather. Meanwhile, heavy rain will continue in the Ohio Valley. As the system moves northeast along the front later Friday night, a band of snow will develop across the Midwest and could be heavy for a small stripe from eastern Iowa through Michigan.

Federal Court in North Dakota Weighs Granting WOTUS Injunction

LINCOLN, Neb. (DTN) -- Over the objection of EPA attorneys, a federal judge on Wednesday granted agriculture groups' motion to intervene in an ongoing lawsuit filed by 24 states challenging the Biden administration's waters of the U.S. rule.

Though the WOTUS rule took effect on March 20, the U.S. District Court for the District of North Dakota also is considering a motion filed by the states for a preliminary injunction.

Earlier this week the U.S. District Court for the Southern District of Texas granted a preliminary injunction to the states of Texas and Idaho, while denying a motion to intervene and a motion for a national injunction filed by ag groups including the American Farm Bureau Federation.

The federal judge in North Dakota was much more lenient in granting ag groups' motion to intervene.

"In the Southern District of Texas litigation, as in this case, the defendants asserted no preliminary injunction should issue but, alternatively, asserted any injunctive relief should be geographically limited to the plaintiff states," Judge Alice R. Senechal said in the court's decision.

"Because defendants oppose nationwide injunctive relief, movants contend the only avenue open to organizations such as theirs with nationwide interests is to file separate actions covering the entire nation. And they point to litigation over the 2015 WOTUS rule -- where several courts enjoyed enforcement in only states that were parties to the litigation -- as 'instructive.' In fact, the injunction recently issued in the Southern District of Texas applies only in the two states that are plaintiffs in that case."

The court granted the ag groups' motion in part because otherwise they would face the possibility of filing separate lawsuits in the each of the 24 states.

States filing the lawsuit include Alabama, Alaska, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia and Wyoming. Their lawsuit alleges EPA and the U.S. Army Corps of Engineers have "toppled the cooperative federalism regime" by implementing a rule that is "overbroad and hopelessly vague."

The interest groups allowed to intervene include the American Farm Bureau Federation, American Petroleum Institute, National Cattlemen's Beef Association, National Corn Growers Association, National Pork Producers Council, Public Lands Council, U.S. Poultry and Egg Association as well as state-level ag groups and construction interest groups.

"Keeping in mind the premise that any doubts should be resolved in favor of intervention, in this court's view, movants have established that their interests are not adequately protected by the existing parties," the court said.

The 24 states have asked the federal court in North Dakota to vacate the Biden administration's iteration of the WOTUS rule and to find it unlawful, and to prevent the agencies from enforcing the rule.

Coalition Calls for Farm and Food Business Technical Assistance in the Farm Bill

An agriculture-focused coalition Wednesday asked the House and Senate Agriculture Committees for dedicated funding for business technical assistance and farm viability in the upcoming Farm Bill.  American Farmland Trust, the Agricultural Viability Alliance, and a national coalition of agricultural organizations, service providers, nonprofits, businesses, lending institutions, and government entities made the request in a letter to lawmakers. The call for dedicated Farm Bill funding builds on work that AFT, in partnership with the Agricultural Viability Alliance, began in 2021 requesting USDA to set aside a portion of Coronavirus relief funding for one-to-one business technical assistance. Business technical assistance covers a wide range of one-to-one services offered to farm and food businesses by nonprofit organizations, state agencies, private consultants, and extension services. Customized to meet the unique needs of individual businesses, these services include coaching, skill development, and planning related to financial and labor management, marketing and business strategies, farm transfer and succession, and access to land and capital.

Grains Council Signs Ethanol MOU in Panama

The U.S. Grains Council this week signed an ethanol memorandum of understanding with the Industrial Association of Sugar Cane of Panama. The signing came as part of a USDA trade mission to South America. The Grains Council held a regional seminar in Panama City that brought together stakeholders and government officials from Central American countries and the Dominican Republic to learn about ethanol and gasoline blending in the region. The MOU recognizes the importance of assessing the role and benefits of biofuels and ethanol in promoting economic growth, diversification of the energy matrix and decarbonization of transportation in the global energy transition to address global greenhouse gas emissions. USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor says, "This MOU bolsters economic and energy security through both domestic production and strengthening trade ties between our two nations." Global ethanol consumption has grown from 16 billion gallons in 2010 to more than 27 billion in 2022.

NCGA to EPA: Ensure Consumer Access to Higher Ethanol Blends

The National Corn Growers Association urged EPA officials to implement a petition from Midwest governors that would remove barriers to higher blends of ethanol and avoid further delay. EPA’s public hearing reviewed the agency’s recent proposal to implement a plan from eight Midwest governors to require lower-volatility gasoline so drivers in those states continue to have year-round access to fuel with 15 percent ethanol, often marketed as Unleaded 88. EPA has proposed delaying implementation of the governors’ plan until 2024. NCGA President Tom Haag took issue with the delays to date and urged EPA to avoid further delays in implementation. He also highlighted the emissions reduction benefits of E15 and the current cost savings of up to 20 cents or more per gallon when drivers choose E15. Haag says, “we now strongly urge EPA to implement this rule with an effective date of April 28, 2024 -- as proposed --without further delay.”

USDA Announces Investments in School Meals

The Department of Agriculture Wednesday announced new investments to provide healthy school meals to students. USDA announced several actions to expand support and access to the school meal program including $50 million in grants to increase collaboration between schools, food producers and suppliers. Agriculture Secretary Tom Vilsack says, "Continuing to make school meals healthier and available to more students are some of the best ways we can help our children thrive early in life." Grants were awarded to Boise State University, the Chef Ann Foundation, Full Plates Full Potential and the Illinois Public Health Initiative. USDA says the grants will foster innovation in the school food marketplace to get a wider variety of healthy, appealing foods into the marketplace and onto kids' lunch trays. Schools and other eligible organizations can apply for the challenge sub-grants later this year and are encouraged to check the USDA’s Healthy Meals Incentives website for updates.

Commodity Classic 2023 Sets Record Attendance

Organizers of the 2023 Commodity Classic announced more than 10,400 attendees were at the event in Orlando earlier this month. The 2023 event broke the previous Commodity Classic record of 9,770 attendees from New Orleans in 2016. Commodity Classic co-chair George Goblish says, "We knew going into the event that registration was up 30 percent over last year, but to have a record-breaking show just blew us away." Co-chair Kenny Hartman of Illinois added, "There's nothing like connecting in person, and it just felt like everyone was so excited to come together again to see the best agriculture has to offer. This year's event featured more than 30 educational sessions, a sold-out trade show with more than 400 exhibitors, a keynote address by Agriculture Secretary Tom Vilsack, and policy meetings of the sponsoring commodity associations. The 2024 Commodity Classic will be held February 29 - March 2, 2024, in Houston, Texas. For information, visit CommodityClassic.com.

Lawmaker Seeks to Ensure AM Radio in All Vehicles

Representative Josh Gotthemier this week urged electric vehicle manufacturers to include AM radio in their cars and trucks. The New Jersey Democrat says, "I would think that if Elon Musk has enough money to buy Twitter and send rockets to space, he can afford to include AM radio in his Teslas." The lawmaker says that despite the public safety uses of AM radio, many EV manufacturers have stopped including AM radio in their vehicles. AM radio is the backbone behind America's National Public Warning System, which provides emergency-alert and warning information to the public during major natural disasters and domestic threats. Gottheimer is writing to major EV auto manufacturers urging them to reconsider their decision to discontinue AM radio in their cars. Gottheimer also called on the National Highway Traffic Safety Administration to add AM radio to the Federal Motor Vehicle Safety Standards to require that all automakers include AM radio as a stock feature in their vehicles.

Thursday Watch List

Markets

USDA's export sales report is out at 7:30 a.m. CDT Thursday, the same time as weekly U.S. jobless claims and an update of the U.S. Drought Monitor. February U.S. new home sales are set for 9 a.m., followed by weekly U.S. natural gas storage at 9:30 a.m. USDA's monthly cold storage report will be released at 2 p.m. Traders will continue to monitor the latest weather forecasts and are in the habit of expecting an export sale announcement at 8 a.m.

Weather

A cold front from Texas through the Midwest is going to be fairly active on Thursday as a system moves out of the Southern Rockies and attaches itself to the front. That will increase the risk of severe weather across Oklahoma and Texas later Thursday and Thursday night, mostly with a hail threat. Heavier rain and thunderstorms are going to develop along this front, which could lead to some areas of flooding going through Friday from Oklahoma through the Ohio Valley.

NASDA Releases Feeding the Economy Report

As part of the National Ag Day Celebration Tuesday, the National Association of State Departments of Agriculture released its annual Feeding the Economy Report. The data shows food and agriculture industries and their suppliers contribute over $8.6 trillion to the U.S. economy. NASDA CEO Ted McKinney says the report "proves our industry's continued strength across the states and around the globe." This year's report shows the U.S. food and agriculture sector directly supports nearly 23 million jobs, provides $927 billion in wages, and is particularly vital to rural communities across America. Notably, the 2023 report reveals that manufacturing agricultural products accounts for nearly one-fifth of total manufacturing jobs in the United States. Overall, more than 46 million jobs are supported across the food and agriculture supply chain, increasing nearly two percent since the 2019 report despite the economic challenges and disruptions associated with the global pandemic. Find the report at feedingtheeconomy.com.

Biden Creates new National Monuments to Conserve Land and Waters

President Biden Tuesday announced two new actions to conserve and restore lands and waters across the nation. The effort includes establishing the Avi Kwa Ame (Avak-yuh-ah-may) National Monument in Nevada and Castner Range National Monument in Texas. The Avi Kwa Ame National Monument in Nevada will honor Tribal Nations and Indigenous peoples while conserving public lands and growing America’s outdoor recreation economy, according to the White House. The Castner Range National Monument will expand access to the outdoors for the El Paso community while honoring veterans and servicemembers. Together, these new national monuments protect nearly 514,000 acres of public lands. The President also directed the Secretary of Commerce to consider initiating a new National Marine Sanctuary designation within 30 days to protect all U.S. waters around the Pacific Remote Islands. If completed, the new sanctuary would ensure the U.S. will reach the President's goal of conserving at least 30% of ocean waters under American jurisdiction by 2030.

New Coalition Calls for Robust Farm Bill Agriculture and Nutrition Funding

Feeding America this week announced the launch of Farmers Feed America. The organization says the broad coalition shows that farmers and food banks are united in calling for a strong 2023 Farm Bill that meets the needs of America's farmers and protects federal nutrition programs. The new nonpartisan coalition comprises farmers, food companies, food retailers, and hunger-relief organizations, including Feeding America and the American Farm Bureau Association. This year's farm bill reauthorization process is an opportunity to reflect on the innovations that worked during the pandemic and apply those learnings to future food and nutrition policy, according to the organization. The Farmers Feed America coalition has come together to establish shared principles for the next farm bill that help meet the continued needs of communities facing hunger, bolster the nation's food resilience, and enhance markets for farmers and ranchers. The coalition urges members of Congress to adopt these principles as they write the 2023 Farm Bill.

USDA Announces Wildfire Prevention Investments

The Department of Agriculture this week announced the first investment of a $1 billion effort to mitigate wildfire risks as the nation faces an ongoing wildfire crisis. USDA announced a $197 million investment for 100 projects that benefits 22 states as part of the Community Wildfire Defense Grant program. USDA's Forest Service worked with states and tribes through an interagency workgroup to develop the Community Wildfire Defense Grant program, originally announced in June 2022. Grant proposals underwent a competitive selection process, including review panels of state forestry agencies and tribal representatives. The agency used the three priorities outlined in the Bipartisan Infrastructure Law to narrow down the communities in greatest need. These priorities included communities impacted by severe disasters, those with high or very high wildfire hazard potential or classified as low income. The initial round of investments will assist communities in developing Community Wildfire Protection Plans, key roadmaps for addressing wildfire risks locally.

Food Retail Concentration Increases as Geographic Area Shrinks

New data from USDA’s Economic Research Service shows food retail concentration increases as geographic area shrinks. The food retail market comprises individual firms, such as grocery stores and supercenters, that sell food products to consumers. The concentration of these retailers’ shares of the market increased over the last three decades at the national, State, Metropolitan Statistical Area, and county levels in the United States. USDA uses the HHI index to calculate concentrations. HHI values range from 0 to 10,000, with higher values reflecting higher levels of market concentration, fewer firms, or increasing disparity between the size of the firms in the market. On average, food retail concentration is higher at the Metropolitan Statistical Area level than at the national level, and concentration is even higher once the market is defined at the county level. As the geographic market area shrinks, the market concentration in 2019 increased from 593 nationally to 1,300 at the state level, 1,800 at the Metropolitan Statistical Area, and 3,700 at the county level.

Sorghum Ups Investment Game with Venture Capital Platform Launch

The Collaborative Sorghum Marketing Transformation Program Tuesday announced the launch of a venture capital platform. The platform is dedicated exclusively to attracting capital for companies, projects and innovations that create opportunities for sorghum farmers. Board Director JB Stewart of Oklahoma says, “The number of opportunities to add value to sorghum farmers by attracting capital to our industry is truly unprecedented.” The program matches private capital with funding to support startups and established companies investing in sorghum and facilitates a network of private investors seeking opportunities for competitive returns in agriculture. Fueled by relationships across the sorghum industry and the supply chain, the program leverages knowledge and financial flexibility to support startups, existing companies and investors bringing innovation to the sorghum industry. Known as cSmart, the program is a 501(c)(3) nonprofit that comes alongside private investors by providing funding to startups and established businesses seeking to add new value to sorghum farmers.

Wednesday Watch List

Markets

The U.S. Energy Department's weekly inventory report will be out at 9:30 a.m. CDT Wednesday, the only significant report of the day before the Federal Reserve announces its decision on interest rates at 1 p.m. Traders will continue to monitor the latest weather forecasts, especially in Brazil and have gotten in the habit of expecting an export sale announcement at 8 a.m.

Weather

Several storm systems are passing through the country on Wednesday morning. Some are coming and some are going, producing widespread areas of precipitation for much of the country throughout the day. This may turn into a band of moderate snow across Nebraska and into Iowa Wednesday night, along with a small potential for severe thunderstorms from northern Missouri into northern Indiana Wednesday evening as well. A cold front separates cold air in the north from warm air in the south while winds whip through the Southern Plains for yet another day.

NCBA Concerned with District Court Decision to Let WOTUS Rule Stand

The Biden administration's version of the Waters of the U.S. rule went into effect Monday. The National Cattlemen's Beef Association expressed displeasure in a District Court decision to deny a preliminary injunction of the rule. NCBA President Todd Wilkinson says, "This latest WOTUS rule will place more burdens on family farms and ranches, drive up costs, and prevent cattle producers like me from making investments in our land." The Environmental Protection Agency finalized the latest WOTUS rule at the end of 2022. NCBA and its litigation partners filed a lawsuit seeking to overturn the rule on January 18, 2023. NCBA sought a nationwide preliminary injunction, which would have prevented the federal government from implementing the WOTUS rule until the entire case is decided. Instead, the court granted a limited injunction in only two states—Texas and Idaho. NCBA Chief Counsel Mary-Thomas Hart adds, “The court’s decision to keep the Biden administration’s WOTUS rule in place is concerning and irresponsible.”

UN Reaches Black Sea Grain Initiative Extension

The United Nations Secretary-General over the weekend announced an extension of the Black Sea Grain Initiative. The announcement came at the last minute as the agreement was set to expire. The Initiative facilitates the safe navigation for the exports of grain and related foodstuffs and fertilizers, including ammonia, from designated Ukrainian seaports. During the first two terms, some 25 million metric tons of grain and foodstuffs have been moved to 45 countries, helping to bring down global food prices and stabilizing the markets. The Black Sea Grain Initiative, alongside the Memorandum of Understanding on promoting Russian food products and fertilizers to the world markets, are critical for global food security, especially for developing countries. The original agreement was signed in July of 2022 to address the need for Ukraine to export agricultural products during the Russia-Ukraine war. Ukrainian officials indicate the agreement was extended for another 120 days.

AFBF Hails Bipartisan Effort to Freeze Flawed Wage Rate

The American Farm Bureau Federation urges Congress to pass legislation to freeze the flawed 2023 Adverse Effect Wage Rate, or AEWR (a-were). AFBF says the rate distorts labor costs for farmers across the country who hire nearly 400,000 employees through the H-2A program. The bipartisan Farm Operations Support Act temporarily resets the AEWR at 2022 levels, providing much need wage relief to farm families and giving Congress an opportunity to deliver a fair and reasonable solution. Farm Bureau says the 2023 AEWR rule missed the mark by such a wide margin that farmers in some states experienced required wage increases of more than ten percent after smaller increases last year. The AEWR has significantly outpaced increases in the national average wage for most workers in America for most of a decade. AFBF President Zippy Duvall adds, “Farmers are committed to paying their employees a fair wage, but the new AEWR rule used flawed data to reach a flawed conclusion.”

USDA Kicks Off Central America-Dominican Republic Trade Mission

Department of Agriculture Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor arrived in Panama City Monday to launch a regional agribusiness trade mission. Taylor and the trade delegation on the trip look to develop stronger ties and build economic partnerships between the United States and Panama and markets throughout the Dominican Republic-Central America Free Trade Agreement region. Taylor says, “I’m confident the next few days will produce mutually beneficial results to help expand trade and increase collaboration on key issues impacting agriculture in the United States and Central America.” Local staff from FAS Panama City will host business meetings between U.S. trade mission delegates and companies from Panama and six other countries seeking to import American food and farm products. The itinerary also includes bilateral meetings with the Panamanian government, retail promotions featuring U.S. products, and a memorandum of understanding signing between the U.S. Grains Council and the Panamanian Sugar Cane National Industry on ethanol blending.

USDA Announces No Actions Under Feedstock Flexibility Program

USDA's Commodity Credit Corporation announced Monday it does not expect to purchase and sell sugar under the Feedstock Flexibility Program for crop year 2022, which ends September 2023. The CCC is required by law to quarterly announce estimates of sugar to be purchased and sold under the Feedstock Flexibility Program based on crop and consumption forecasts. Federal law allows sugar processors to obtain loans from USDA with maturities of up to nine months when the sugarcane or sugar beet harvests begin. On loan maturity, the sugar processor may repay the loan in full or forfeit the collateral, sugar, to USDA to satisfy the loan. The program was initially authorized in the 2008 Farm Bill, as an option to avoid sugar forfeitures. Under the Feedstock Flexibility Program, if USDA is faced with the likelihood of loan forfeitures, it is required to purchase surplus sugar and sell it to bioenergy producers to reduce the surplus in the food use market and support sugar prices.

USDA: Education Gaps Exist Between Rural and Urban Communities

Formal educational attainment in rural America has grown, but rural areas still lag behind urban areas. USDA’s Economic Research Service data shows the share of adults ages 25 and older with a bachelor’s degree or higher increased in rural areas from 15 to 21 percent. In the same time span, the share of adults in urban areas with a bachelor’s degree or higher increased from 26 to 36 percent, widening the rural-urban gap from 11 to 15 percentage points in these two reference periods. The rural-urban gap in the share of people with at least a bachelor’s degree is even larger for younger age groups. In 2017–21, the share of working-age adults, ages 25–64, with at least a bachelor's degree, was 37 percent in urban areas and 21 percent in rural areas. The share of younger adults ages 25–44 with at least a bachelor’s degree was 40 percent in urban areas and 22 percent in rural areas.

Tuesday Watch List

Markets

On Tuesday, the second day of spring, February U.S. existing home sales are due out at 9 a.m. CDT. The Federal Reserve begins its two-day meeting with a lot to talk about, but no decision to announce until Wednesday. Traders will continue to monitor weather forecasts and will remain touchy about any new events in the financial sector.

Weather

The first in a string of storms is moving into the Plains Tuesday, bringing scattered showers to the southeastern Plains into the Midwest and Delta, and a batch of snow to the Northern Plains. Winds again will be breezy for the Southern Plains, which will continue to draw out what available soil moisture exists for areas that are going to stay dry in this active pattern. Speaking of which, the next storm system in the series is moving into California, which will make for two more storm systems for later in the week.

Court Puts WOTUS Hold in Texas, Idaho

Federal Judge Also Denies Request to Issue a National Injunction

LINCOLN, Neb. (DTN) -- A federal judge in Texas granted a preliminary injunction on Sunday, halting the Biden administration's waters of the U.S. rule in Texas and Idaho, pending the outcome of a lawsuit filed by the state of Texas and several industry groups including the American Farm Bureau Federation.

U.S. District Judge Jeffrey Brown in the Southern District of Texas in Galveston put the injunction in place as the rule took effect on Monday in the rest of the country. The injunction will remain in place pending consideration of motions to vacate the rule and send it back to the EPA.

Brown, a Trump appointee, denied a motion for a national injunction against the new rule by ag groups led by the American Farm Bureau Federation.

Texas and five agencies in the state filed a lawsuit against the EPA and the U.S. Army Corps of Engineers on Jan. 18 and a total of 18 interest groups including the agriculture, oil and housing industries filed suit a day later in the same court in Galveston.

There are two other lawsuits pending in federal court in North Dakota, where 24 states have sued the Biden administration, and in Kentucky where the state of Kentucky has sued the EPA.

In granting the preliminary injunction, Brown found Texas and Idaho have a "substantial likelihood" they would prevail on the merits of the case, would face a "substantial threat" that they would suffer "irreparable injury" without an injunction, that the threat of injury outweighs the "threatened harm" to the party they seek to enjoin and that the injunction was in the public's interest.

Brown, however, found the associations also party to the lawsuit, including the AFBF, have not shown "irreparable harm" if a national injunction is not issued.

The National Cattlemen's Beef Association said in a statement it was disappointed in the court's decision not to grant a national injunction.

"This latest WOTUS rule will place more burdens on family farms and ranches, drive up costs, and prevent cattle producers like me from making investments in our land," NCBA President Todd Wilkinson, a South Dakota cattle producer, said in a statement.

"While we appreciate the court's injunction of the rule in Texas and Idaho, we are strongly disappointed in the decision to keep this WOTUS rule in place in 48 states."

Brown's ruling was critical of the Biden administration's use of two tests -- significant nexus and relatively permanent -- when making jurisdictional determinations.

"Even if the court assumes that Justice Kennedy's significant-nexus test appropriately measures the agencies' jurisdiction under the act, the rule does not accurately reflect his test," Brown said in his ruling.

"Indeed, the rule's substantial variance from Justice Kennedy's test compels the court to question its legitimacy and persuades the court that the plaintiffs will likely succeed on the merits. Certainly, the court agrees with the defendants that federally regulating some interstate waters may be necessary to carry out Congress's intent to protect the nation's waters but the court is not convinced that the act's text supports unrestrained federal jurisdiction over all interstate waters.

"As explained above, the court finds a substantial likelihood that the 2023 rule exceeds the agencies' statutory authority under the act."

Brown's decision was seen as a setback by environmental groups that are defending the Biden administration's approach.

"This decision is a setback for the public, which has long depended on the Clean Water Act to safeguard downstream communities and the environment," said Stuart Gillespie, senior attorney with Earthjustice.

"We will work closely with our partners to ensure the law and science prevail, and that our communities receive the protections afforded by the Clean Water Act."

Texas and the ag groups said in motions the court should stop the agencies from implementing the rule, pointing out their concerns with the reach of the new rule.

"The rule abandons any limitation to waters that impact interstate commerce, relying on an arbitrary 'significant-nexus' test that strays far from any legal authority," Texas said in a motion.

"Texas asks the court for an injunction to support the public interest and prevent irreparable harm to Texas' sovereignty, its agencies' core objectives and incurrence of unrecoverable costs to comply with a rule unlikely to survive review."

Texas argued the WOTUS rule effectively asserts jurisdiction "over non-navigable, intrastate waters based solely on whether the use, degradation, or destruction of the water could affect interstate or foreign commerce."

Texas said the rule "unlawfully expands" federal jurisdiction and "arbitrarily casts federal authority over a remarkable array of water features (or dry land).

"The issue before the court is whether Texas must incur the burden and expense of complying with a federal 'clarification' while Texas challenges that rule as federal overreach," Texas said in its motion.

Organizations Want Congress to Pass TPA

America’s top food and ag organizations representing thousands of farmers, ranchers, producers, and workers sent a letter to Congress urging action to improve ag exports. More than 50 of the most influential food and ag groups urged Congress to pass Trade Promotion Authority. TPA is regularly passed by Congress to give the administration objectives and guidance in pursuing tariff-cutting trade agreements. The letter notes when it comes to trade agreements with tariff reduction, the U.S. is falling behind global economic competitors like China and the European Union. “Regrettably, America is falling badly behind,” the letter says. “Between 2010 and 2020, China and the E.U. enjoyed over twice as much advantage from trade agreement tariff reductions as the U.S.” They also say the situation has gotten much worse this decade. “The United States has not implemented a comprehensive trade agreement that opens new markets in more than a decade,” the groups add.

USDA Awards Funding to Protect U.S. Cattle From FMD

The USDA’s Animal and Plant Health Inspection Service awarded the National Cattlemen’s Beef Association with $445,400 in funding to advance the Secure Beef Supply Plan. The plan would go into effect in the event of a foot-and-mouth disease outbreak in the U.S. “NCBA is grateful for this critical funding to help continue defending the U.S. cattle herd from the threat of foot-and-mouth disease,” says Allison Rivera, NCBA executive director of government affairs. “The Secure Beef Supply Plan combined with USDA’s national vaccine bank provides a strong safety net for cattle producers and multiple tools to mitigate the risk of a potential outbreak.” This funding was made available through the 2018 Farm Bill and shows why continued support and further funding for animal disease preparation measures like the Secure Beef Supply Plan and the National Animal Vaccine and Veterinary Countermeasures Bank are so important as Congress works on the 2023 Farm Bill.

African Swine Fever Surging Again in China

African Swine Fever is making a resurgence in China and will potentially push prices higher for the most popular protein in the country. Bloomberg says multiple outbreaks have shown up in different parts of the country throughout the winter. Rabobank expects the most recent wave of ASF to significantly lower production capacity and push prices higher during the second quarter of 2023. The outbreak was most severe in the northern regions of the country, and multiple areas are still struggling with the disease. Rabobank estimates say the latest wave has hit 10 percent of the nation’s sow herd, which controls hog production. An outbreak in 2018-2019 decimated China’s pig herd, at the time, the largest herd in the world. The spike fueled inflation as pork is a key element in the Chinese consumer price index. Official estimates say 8-15 percent of total production could be lost in the current outbreak.  

TFI Happy with Biostimulant Legislation

The Fertilizer Institute President and CEO Corey Rosenbusch is pleased with the introduction of the Plant Biostimulant Act. The act, introduced in both the House and Senate, will support the adoption of biostimulants by farmers and provide clarity to the emerging marketplace. Biostimulants have the potential to enhance the existing environmental stewardship of growers and complement their 4R practices. “Biostimulants support environmental stewardship by improving the efficiencies of fertilizer application and soil health while also increasing crop yields,” Rosenbusch says. “With a growing population, demand for agricultural production continues to increase.” He also says biostimulants are a relatively new innovation in agriculture and that there’s great potential in these products. However, there are hurdles to overcome, including the lack of a uniform framework to regulate them as plant nutrition products. “We need the guardrails this act provides to help foster innovation, research, testing, and a path to market these products,” Rosenbusch says.

USDA Accepting Applications for 2024 Export Programs

The USDA’s Foreign Agricultural Service is accepting applications from eligible organizations for fiscal year 2024 funding for five export market development programs. FAS recently published the FY 2024 Notices of Funding Opportunity for the Market Access Program, Foreign Market Development Program, Technical Assistance for Specialty Crops Program, the Quality Samples Program, and the Emerging Markets Program. Under the Market Access Program, USDA provides cost-share assistance to U.S. exporters and agricultural, fish, and forest product trade organizations for international marketing and promotion of U.S. commodities and products. Under the Foreign Market Development Program, USDA partners with nonprofit agricultural and forest product trade associations to build longer-term international demand for U.S. commodities. The Emerging Markets Program supports technical assistance activities for developing emerging markets for U.S. agricultural, fish, and forest products. The application deadline for the five programs is May 19. For more information on the rest of the programs, go to fas.usda.gov.

Drought Relief in the Western U.S.

The National Oceanic and Atmospheric Administration says spring flooding is an ongoing problem in the western U.S., especially in California. The abnormally wet winter will further improve drought across much of the western U.S. as a historically-high snowpack melts in the months ahead. Winter precipitation combined with recent storms has eliminated exceptional and extreme drought in California for the first time since 2020 and is expected to further improve drought conditions this spring. Moisture in the spring is expected to improve drought conditions across parts of the Northern and Central Plains. Drought conditions are expected to improve or disappear over the next three months in Florida. Areas of extreme to exceptional drought across parts of the Southern High Plains are likely to persist through the spring season. Drought is also expected to develop in parts of New Mexico. In the Northwest U.S. and northern Rockies, drought conditions are expected to continue. 

Top 5 Things to Watch - Celebrations, Frosted Wheat and Bank Dramas

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of March 19. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Ag's big day Tuesday: March 21 is National Ag Day, as DTN and Progressive Farmer will help celebrate all that is agriculture. 

2. Ridin' the fallout: With apologies to those rockers from Champaign, Illinois, we will continue to track the gathering storm of Silicon Valley Bank and other bank failures, along with their ripple effects around the globe. Our focus, as always, is on what it all means to your farming operation.

3. Speaking of storms: Things may be a little quieter on the weather front this week, with less chance of heavy precipitation in the areas that have been dumped on lately. Low temperatures will slow soil drying, however, and there have already been some reports of frost in the southern parts of the hard red winter wheat world. We'll watch for how that's playing out in Texas and Oklahoma wheat fields already hurt by dry soils and high winds. 

4. Research falling behind? A House Agriculture subcommittee hearing Thursday will discuss the need to increase research dollars in the next farm bill. Many U.S. land-grant universities make the case we are falling critically behind in public ag research. It's not a new argument, but there are many new ears to hear it.

5. Key economic reports: Bank defaults and Fed intentions may get most of the attention, but there also are several rank-and-file economic reports coming this week that analysts will watch for clues to the state of the general economy. We'll look at existing home sales on Tuesday, Thursday sees new home sales, jobless claims and on the farm side of things we'll watch USDA weekly export sales numbers and the USDA monthly cold storage report. And many eyes will focus on the ongoing Black Sea grain deal, particularly now that there's an international arrest warrant for one Mr. V. Putin.

Monday Watch List

Markets

Back from the weekend, in addition to checking the latest weather forecasts, traders will review reports UBS is buying Credit Suisse for roughly $3.2 billion and will be looking for a better explanation of how long the Black Sea grain deal will be extended for. Traders will also pause at 8 a.m. CDT to see if USDA has another corn sale to report. USDA's weekly report of export inspections is due out at 10 a.m.

Weather

There is a storm system moving through the Southwest U.S. Monday, but most of the country is quiet and cool. Temperatures early Monday morning are below freezing yet again in the Southeast but will rise early this week. The Southwest system is the first of a string that will move through the country this week, pushing a cold front through the country and offering widespread precipitation to boot.

Allendale Predicts Corn and Soybean Planted Acres

A farmer survey by commodity brokerage firm Allendale says America’s farmers are expected to plant 90.41 million acres of corn and 87.76 million acres of soybeans this year. Those projected corn planting acres would be below the USDA’s Outlook Forum forecast of 91 million acres but above the 88.57 million acres planted in 2022. Projected soybean plantings would top the USDA forecast of 87.5 million acres and exceed the 87.45 million acres planted to soy in 2022. Allendale predicts the all-wheat plantings at 48.7 million acres, below the USDA prediction of 49.5 million but higher than the 2022 planted area of 45.73 million acres. Allendale projected U.S. farmers’ winter wheat seedings to be 36.52 million acres, below the USDA’s January estimate of 36.95 million acres but up from the 33.71 million acres seeded during 2022. The brokerage and analysis firm projects “other spring wheat” acreage for 2023 at 10.6 million acres.

National Wheat Organizations Disappointed in Railroad Merger

U.S. Wheat Associates and the National Association of Wheat Growers are disappointed that the Surface Transportation Board approved the merger of the Canadian Pacific Railway and Kansas City Southern Railroad. They believe the STB has given a green light to rail consolidation without regard for the consequences on agricultural shippers from a lack of competition in the U.S. rail sector. “U.S. rail consolidation has led to poorer, not improved, service for agricultural shippers,” says USW President Vince Peterson. “In addition, we see extreme disparity in rates for wheat shippers.” Higher shipping rates make U.S. wheat less competitive in the global market at a time when higher prices already hurt the competitiveness of American wheat. “With 50 percent of wheat getting exported, wheat is heavily reliant on rail transportation to move across the U.S.,” says NAWG CEO Chandler Goule. They say the STB must conduct more rigorous oversight of rail rates and service issues.

New SD Law Gives More Protection to Ag Operations

A new law in South Dakota makes it harder to file nuisance complaints or lawsuits against an agricultural operation. South Dakota Searchlight says it will also limit the amount of monetary awards. After legislators approved the bill earlier this winter, Governor Kristi Noem signed it at a Mitchell, South Dakota, implement dealership this week. She says agriculture is the state’s “number one industry,” and the law protects farmers from frivolous lawsuits. Provisions in the law say only the owner or lessee of an affected property can file a nuisance action and only if the affected property is within a mile of the operation. Groups like Dakota Rural Action and the Izaak Walton League say the law is unnecessary and goes too far. Additional provisions say the plaintiff must present “clear and convincing evidence” the operation violated local, state, or federal laws. The new law goes into effect on July 1.

New AI Platform Will Predict Ag Supply Chain Disruptions

Helios (HE-lee-ohs) Artificial Intelligence, Inc. launched the open beta of its platform that will identify agricultural supply chain disruptions ahead of time. The company’s founder and CEO says they’ve created a one-stop platform for agricultural importers to understand the risks to their supply chain and get ahead of their competitors. The AI platform will eventually predict supply availability ahead of a company’s competitors and find alternative suppliers before they do. It identifies climate and economic risks to yields and works with supply chain partners to mitigate them before it’s too late. The AI will also provide actionable input into the negotiation process with insights and access to billions of data points. Existing customers are seeing good results so far. William Hovis, who used to be with Coca-Cola, says when suppliers missed deliveries, the company was missing sales. “Helios provides companies with actionable insights to help them get ahead of competitors.”

Bill to Support Cutting-Edge Agricultural Research

Senators Michael Bennet (D-CO) and Roger Marshall (R-Kan.) introduced the Advancing Cutting Edge Agriculture Act to support high-risk, high-reward agricultural research and development at USDA. The sponsors say the act will help “secure America’s food supply” and give farmers and ranchers the tools to meet the challenges of the 21st century. “Now more than ever, Americans have seen how vulnerable the nation’s food system can be,” Marshall says. “Targeting the many risks our food system faces through research will ensure that the U.S. continues to provide a safe, secure food supply for a growing world population.” Bennet also notes that family farmers and ranchers face persistent drought, higher costs, extreme weather, and increased global competition, saying, “That makes it more important than ever to invest in cutting-edge research to spur agricultural breakthroughs, including practices to conserve water and cut greenhouse gas emissions.” Companion legislation will be introduced into the House.

2023 Power of Meat Research Released at Annual Meat Conference

Last week at the Annual Meat Conference, research from the latest Power of Meat Study showed consumers’ meat usage, attitudes, and trends. The report says 2022 meat sales rose 5.7 percent versus 2021, and almost 87 percent of all home-prepared dinners featured meat or poultry. Also, more than 98 percent of shoppers make meat purchases. Inflation is becoming an issue for the entire meat industry. Consumers spent at least 25 percent more on food in 2022 than in 2019. Economic conditions are prompting 76 percent of Americans to change what groceries they purchase. The POM report says 50 percent of meat eaters purchase meat and poultry for use over the next few days after the sale. Price plays a much more important role among younger meat eaters, while Boomers emphasize quality and appearance. The total package price rose in importance during prior years, but shoppers emphasize value as quality going hand-in-hand with the price.

Friday Watch List

Markets

The Federal Reserve's report on U.S. industrial production is set for 8:15 a.m. CDT Friday, followed by the Conference Board's U.S. index of leading indicators and the University of Michigan's U.S. index of consumer sentiment, both due out at 9 a.m. In addition to monitoring weather and the latest bank news, traders will also pause at 8 a.m. to see if USDA might have a fourth consecutive export sale announcement. USDA's cattle on-feed report for March 1 will be out at 2 p.m.

Weather

A storm system that brought widespread precipitation to the middle of the country Thursday continues across the East and South on Friday. Most of this will be rain but colder air filtering in behind the system will lead to some areas of snow and lake-effect in the Great Lakes. Colder temperatures down in the Plains may be damaging to more-advanced wheat. Some breezy conditions will continue across the Midwest as well.

Surface Transportation Board Approves CP, KCS Merger

The Surface Transportation Board Wednesday approved the Kansas City Southern Railway Company acquisition by Canadian Pacific Railway Limited, with conditions. The decision includes an unprecedented seven-year oversight period and contains many conditions designed to mitigate environmental impacts, preserve competition, protect railroad workers, and promote efficient passenger rail. The Board also anticipates the merger will result in improvements in safety and the reduction of carbon emissions. The companies filed a merger application in October of 2021 with the Surface Transportation Board. The combination of the two railroads, known as Canadian Pacific Kansas City, will create the first railroad providing single-line service spanning Canada, the United States, and Mexico. Yet, the merged company will continue to be the smallest Class I railroad, with a network that is a few thousand route miles shorter than the next smallest Class I and half the size of the Western railroads.