USDA Extends Deadline for Revenue Loss Programs

USDA is extending deadlines for the Emergency Relief Program Phase Two and the Pandemic Assistance Revenue Program to July 14. The goal is to give producers more time to apply for the assistance. Also, USDA’s Farm Service Agency is partnering with nine organizations to provide educational and technical assistance to agricultural producers and provide assistance in completing an ERP Phase Two application. “Farm Service Agency recognizes that there is a learning curve for producers applying for the new revenue-based programs, and we want to make sure producers have the time they need to apply for assistance,” says FSA Administrator Zach Ducheneaux. “Partnering with these organizations through cooperative agreements provides additional assistance to producers who need help with ERP Phase Two.” The groups include Farmers Legal Action Group, Inc., the North South Institute, Rural Coalition, and others. For more information on the nine organizations and their contact information, go to fsa.usda.gov.

Next USDA Trade Mission Heading to Japan

USDA Undersecretary for Trade and Foreign Agricultural Affairs Alexis Taylor will lead an upcoming trade mission to Japan on June 5-8. The delegation will include a large representation of American agriculture, including businesses, state agriculture departments, and commodity groups. “As one of the world’s leading economies, Japan is an important market for U.S. food and agricultural exports,” Taylor says. “It’s an honor to lead this delegation as we work to expand our bilateral trade relationship even further.” Japan is the fourth-largest market for U.S. food and agricultural exports. In 2022, American exports matched the previous record of $14.6 billion. Exports of specific products like soybeans, dairy, and others reached new highs. The United States is vital to ensuring food security in Japan, with almost a quarter of Japan’s food and ag imports coming from American exporters. Trips like this are important for engaging directly with potential buyers and Japanese industry experts.

Talks Continue on Merging U.S. and Canadian Ag Giants

Glencore, a global commodities trader, is in talks to merge its agricultural division. The Globe and Mail says the company wants to merge Viterra, Ltd, a large Canadian company acquired in 2012, with Bunge Ltd. If the merger takes place, it will create a large North American-based company. Viterra operates a large number of grain elevators, specialty crop facilities, processing plants, and port terminals through most of Canada and parts of the U.S. Glencore wants to merge it with Bunge, based out of St. Louis, one of the world’s dominant ag companies with a market value of $14 billion. Glencore first proposed a merger idea with Bunge in 2017 but was turned down. A source close to the discussions says a deal seems much more likely this time than six years ago, but the sides haven’t agreed on a final price. Glencore originally bought Viterra for $6 billion in 2012.

Safety From too Much Sun

People working in production agriculture spend a lot of time out in the sun, and their risks are high for skin cancer. While the warm sun often feels good on the skin, it’s important to take steps to protect yourself from overexposure and reduce skin-related risks. The Upper Midwest Agricultural Safety and Health Center says appropriate sun protection includes covering the whole body with clothing, wearing a hat with a full brim, having adequate sunscreen coverage, and sunglasses. As a part of its safety checklist, they remind farmers to wear long-sleeved shirts and pants when out in the sun. Hats should be wide-brimmed and all the way around the head. An appropriate sunscreen should be anywhere between SPF 30-50 and should be reapplied every two hours or more frequently with heavy sweating. Wear sunglasses to protect the eyes. Check your skin regularly and talk to a doctor about any changes you see.

Congressional Leaders, White House Reach Debt Ceiling Agreement

Congressional leaders and the White House reached an agreement on extending the debt limit. The new agreement is expected to reach the House floor for debate by Wednesday. The two sides reached an agreement including compromises on work requirements in the SNAP program. Chris Gibbs, Board President of Rural Voices USA, says now that the agreement has been reached, it’s time for Congress to get it passed. “Rural America would be hammered by default and its cascading impacts on retirement savings, farm credit, access to capital, benefits, and more,” he says. “In addition to avoiding this politically-manufactured crisis, Congress needs to get back to the legislating business.” Gibbs also says it’s time to invest in rural America through healthcare and education, expanding new markets for American agricultural products, and protecting every American’s right to vote. With SNAP work requirements settled, it should provide a somewhat smoother path toward the next farm bill.

Drought Area Spreading in Parts of Rural America

USDA Meteorologist Brad Rippey is looking back at May and notes some farmers are still concerned about drought. “It’s been dry over much of the Midwest during the last one to three months, depending on where you’re at,” Rippey says. The American Meteorological Society says a 4-12 week period of dryness fits the definition of a flash drought. A flash drought is an “unusually rapid onset drought characterized by a multi-week timeframe of accelerated intensification that impacts one or more sectors of the U.S., including agriculture. Rippey also says the area around Chicago is going through a flash drought. Data shows the Chicago area is headed for its second-driest May in history. The likely rainfall total for the Chicago area is just .42 of an inch. Rippey says 26 percent of corn acres, 36 percent of cotton, 20 percent of soybeans, and 47 percent of wheat are in some level of drought.

Wednesday Watch List

Markets

The Federal Reserve's Beige Book will be released at 1 p.m. CDT. There are no other significant reports Wednesday. Traders will continue to monitor the latest weather forecasts and follow progress on the proposal in Congress to raise the debt ceiling.

Weather

As has been the pattern lately, showers and thunderstorms are expected to develop in the Plains for yet another day. However, we should see showers and thunderstorms developing in the western half of the Midwest as well. Models are all over the place with placement and intensity, but some heavier rain should be expected, which could lead to some flooding in spots. Severe weather cannot be ruled out either, especially over west Texas.

More Reaction to Supreme Court’s WOTUS Decision

U.S. agriculture groups continue reacting positively to the Supreme Court’s unanimous ruling in the Sackett vs. EPA case that rejected the Biden Administration’s WOTUS definition. “Cattle producers can breathe a sigh of relief,” says National Cattlemen’s Beef Association President Todd Wilkinson. “This decision refocuses the Clean Water Act on protecting our water through regulatory clarity.” The Fertilizer Institute also welcomed the decision. “The decision to strike down the ‘significant nexus’ test is a win for agriculture,” says TFI President and CEO Corey Rosenbusch. “This is a great first step to needed clarity for the fertilizer industry’s long-term planning and capital investments that will allow us to keep providing critical crop nutrients.” The National Pork Producers Council called the decision a “tremendous victory” for pork producers. “This ruling is a clear punctuation point after decades of attempts to expand the federal government’s control of private land,” says NPPC Vice President Duane Stateler.  

Report Released Showing Crop Insurance Impact by State

Crop insurance is the cornerstone of America’s farm safety net and supports the rural economy and America’s national food security. National Crop Insurance Services has assembled several fact sheets highlighting the importance of agriculture and demonstrating how crop insurance keeps America growing. For example, crop insurance protects more than 490 million acres of U.S. farmland. It covers 136 crops and 604 varieties with 36 different insurance plans. Crop insurance does require farmers to invest in their own protection and share the risk. Last year, farmers paid $6.8 billion to buy more than 1.2 million crop insurance policies. The public-private partnership between the federal government and private crop insurers ensures that aid is delivered quickly, usually within 30 days of a claim being finalized. As if that’s not enough, the number of Americans who benefit from a bountiful supply of domestically-produced food totals 336 million. The state-by-state breakdown is available at cropinsuranceinmystate.org. 

BLM Holds Information Session on New Rule

The Bureau of Land Management hosted the first in a series of three informational sessions on a new agency proposal to broaden its conservation efforts. The draft Conservation and Landscape Health Rule would overhaul a variety of existing land management procedures at BLM. The changes would give it clearer authority to prioritize the health and resilience of ecosystems across almost 250 million acres of federally-owned land. Agency officials and supporters of the rule say it would place conservation and outdoor recreation on level ground with industrial uses like ranching and oil and gas drilling that BLM has facilitated for many years. Opponents and their Republican allies say it will likely curb those uses as much of the rule revolves around “conservation leases.” It’s a new mechanism that would protect certain areas from development for up to ten years. And those leases would be proposed by environmental non-profits or other applicants.

H-2A Visa Use Increased Dramatically During the Last Decade

According to numbers from the U.S. Labor Department, more than 378,000 workers were authorized for H-2A visas for temporary agriculture positions. The number was less than a third of that as recently as 2012. Farmer Mac says that trend is going to continue for some time. “In the short run, I expect that growth to continue as long as pressure remains on labor markets,” says Jackson Takach, the chief economist with Farmer Mac. Back in 2012, the Labor Department said just 103,000 workers entered the U.S. through the H-2A program. H-2A workers are most heavily utilized in states like California and Florida because fruits and vegetables require more manual labor. However, those workers are also vital for agriculture in the Midwest and Great Plains. Iowa tops the list of states with the most H-2A workers in the Central U.S. Iowa was followed by Minnesota and North Dakota on the list.

Legislation on Easing Supply Chain Challenges Advances in the House

Several industry trade groups say a number of trucking bills passed by the House Transportation and Infrastructure Committee are a step in the right direction. Food Navigator says the bills should help to further repair and reinforce America’s fragile food supply chains threatened by a severe shortage of drivers. Almost three-fourths of all goods in America’s economy, including all foods sold in grocery stores, get moved by the trucking industry. The bipartisan legislation would reduce the “empty miles” that trucks have to travel by allowing them to increase the weight they carry with an additional axle. A bill from Dusty Johnson (R-SD) would establish a voluntary ten-year pilot program allowing states to increase the weight of six-axle vehicles on federal interstates up to 91,000 pounds. Supporters say increasing the amount of weight trucks can carry would lower greenhouse gas emissions, ease supply chain backlogs, and reduce the number of “empty miles.”  

Weekly Soybean Sales Rise, Corn and Wheat Drop

The USDA says soybean export sales rose during the week ending on May 19, while cancelations of corn and wheat orders from overseas customers resulted in net reductions. Soybean sales rose to 115,000 metric tons during the week, up from the prior week but down 26 percent from the previous five-year average. Germany was the top customer at almost 58,000 metric tons, while Japan bought 53,500 tons. Cancelations of corn orders resulted in a net drop of 75,200 metric tons during the week. However, that’s still better than the net reduction of 339,000 during the prior week. Mexico was the top corn buyer at 216,000 metric tons. But China canceled shipments of almost 332,000 metric tons. Wheat cancelations resulted in net reductions of 45,100 metric tons, the lowest level since the marketing year began. China bought 68,000 tons of wheat while Nigeria took in almost 16,000. Japan canceled shipments totaling 63,000 metric tons.

Tuesday Watch List

Markets

Back from the three-day weekend, trading in grains resumes at 7 p.m. CDT Monday evening. Traders will catch up with the latest weather forecasts and see the House is expected to vote on a debt ceiling compromise Wednesday. USDA's weekly report of export inspections is set for 10 a.m., followed by USDA's Crop Progress report at 3 p.m.

Weather

After a long holiday weekend of widespread showers and thunderstorms for much of the Plains, that general area will again be alight with more rain on Tuesday. Some areas of showers and thunderstorms are also forecast for the northwestern Midwest. Other showers and thunderstorms are forecast in parts of the Midwest, Delta, and Southeast, but at a very isolated coverage pattern.

AFBF: Supreme Court Reaffirms Clean Water Rule

The Supreme Court Thursday ruled against the Environmental Protection Agency in the case Sackett vs. EPA regarding the Biden administration's Waters of the U.S. rule. The court stated that wetlands under the jurisdiction of the Clean Water Act must have a continuous surface connection to bodies of water, making it difficult to determine where the water ends, and the wetland begins. American Farm Bureau Federation President Zippy Duvall responded, "The justices respect private property rights. It's now time for the Biden administration to do the same and rewrite the Waters of the United States Rule." Representative Dan Newhouse, a Washington state Republican and Congressional Western Caucus Chairman, says, “This landmark decision from the Supreme Court is a clear demonstration of our nation’s commitment to upholding the principles of individual property rights.” Agricultural Retailers Association President and CEO Daren Coppock added, “The decision finally restores common sense back into WOTUS regulation.”

Japan Trade Agreement Projected to Grow U.S. Pork Exports

Japan’s pork imports are estimated to increase to more than $6 billion over the next five years, according to USDA’s Economic Research Service. Growth is supported by trade agreements Japan ratified between 2018 and 2021 with its major pork suppliers, including the United States, the European Union, and the ten countries party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These agreements mandate reductions in Japan’s trade barriers on pork imports. A recent report from USDA estimates these trade agreements will boost 2028 exports to Japan from the United States, EU, and CPTPP countries to totals of $2.08 billion, $2.04 billion, and $2.03 billion, respectively. For the United States, this is a large gain compared with a scenario in which the U.S.-Japan Trade Agreement did not exist. Under that scenario, U.S. pork exports to Japan would have totaled $1.41 billion, and EU and CPTPP countries would have gained market share at the expense of the United States.

Drought Monitor: Southern Plains See Drought Relief

The Southern Plains saw drought relief over the last week, according to the latest Drought Monitor released Thursday. Still, much of the rain arrived too late to rescue winter wheat, though rangeland, pastures, and summer crops greatly benefited from the soil moisture improvements. In Texas, rangeland and pastures rated in very poor to poor condition by the Department of Agriculture improved from 51 to 36 percent during the week ending May 21. On the same date, topsoil moisture was rated less than one-third very short to short in Texas and Oklahoma. Still, despite abundant showers and thunderstorms, pockets of extreme to exceptional drought persisted in western and central Texas and across the northwestern half of Oklahoma. Farther east, most areas remained free of dryness and drought, aside from a few areas in the central Gulf Coast. Meanwhile, variable rainfall extended westward into the central and southern Rockies and eastward to the southern Atlantic Coast.

Lab-Grown Meat Carbon Footprint Potentially Greater than Retail Beef

A new report suggests lab-grown meat may have a larger carbon footprint than retail beef. Researchers at the University of California-Davis found that lab-grown or "cultivated" meat's environmental impact is likely to be "orders of magnitude" higher than retail beef based. Researchers conducted a life-cycle assessment of the energy needed and greenhouse gases emitted in all stages of production and compared that with beef. One of the current challenges with lab-grown meat is the use of highly refined or purified growth media, the ingredients needed to help animal cells multiply. The study found that the global warming potential of lab-based meat using these purified media is four to 25 times greater than the average for retail beef. Even the most efficient beef production systems reviewed in the study outperform cultured meat across all scenarios, suggesting investments to advance more climate-friendly beef production may yield greater reductions in emissions more quickly than investments in cultured meat.

Program Pays Illinois Farmers to Improve Soil Health

American Farmland Trust and ADM are launching the next season of a program that supports Illinois’s farmers and the environment. The Illinois re:generations program encourages farmers to incorporate environmentally friendly practices into their operations while offering financial incentives. The program is an expanded version of the 2022 Illinois Cover Crop Initiative and offers flexible contracts to farmers willing to adopt cover crops and/or provide data to calculate carbon intensity scores. The program provides payments to farmers who enroll in the program, and carbon assets generated from participation are being claimed by ADM. Farmers can enroll acres where practices have previously been used and choose from one to four year contracts. In 2023, farmers throughout the state can enroll for the cover crop incentive, and farmers delivering corn and beans to an ADM elevator can qualify for emissions-scoring payments. Enrollment for the 2023 program launches in June.

Legislation Addresses Housing Shortage in Rural Communities

Lawmakers this week introduced the Forest Service Flexible Housing Partnerships Act to help address the housing shortage in rural and mountain communities. The bipartisan legislation would strengthen the authority of the United States Forest Service to lease underutilized administrative sites to address local needs, including for building affordable housing. Senator Michael Bennet, a Colorado Democrat, introduced the legislation. Bennet says, “This bill will build on our efforts in the 2018 Farm Bill to help communities and the Forest Service work together to build more affordable housing.” The 2018 Farm Bill secured the authority for the Forest Service to lease underused administrative sites to localities in exchange for in-kind contributions, including housing construction and improvement or maintenance of federal facilities. As a result of the housing crisis in the West, the Forest Service currently experiences a severe staffing shortage. The legislation will also help the agency provide housing for its firefighters and other critical positions to better serve the communities they work for.

Friday Watch List

Markets

At 7:30 a.m. CDT Friday, the PCE index for April will be out, the Fed's favorite inflation indicator. We'll also see reports on April durable goods orders, personal incomes and consumer spending. The University of Michigan's index of U.S. consumer sentiment for May follows at 9 a.m. Traders will continue to monitor the latest weather forecasts and news of grain shipments out of the Black Sea.

Weather

Showers and thunderstorms that have been persistent in Montana and the southwestern Plains are forecast to spread through more of the Plains on Friday. Heavy rain and some severe weather are possible. Most of the Corn Belt stays dry today, with some growing concern over dryness through the Midwest.

Supreme Court Sides With Sacketts in Clean Water Act Case

The Supreme Court sided with two Idaho property owners in their ongoing wetlands dispute with EPA on Thursday, ruling EPA's use of the significant nexus test when making Clean Water Act determinations is too broad.

In writing the 5-4 majority opinion, Justice Samuel Alito said EPA has misinterpreted the Clean Water Act's reach when it comes to the property owned by Michael and Chantell Sackett and that the term significant nexus isn't found in the Clean Water Act.

"In sum, we hold that the CWA extends to only those 'wetlands with a continuous surface connection to bodies that are 'waters of the United States' in their own right,' so that they are 'indistinguishable' from those waters," Alito said in his opinion.

"This holding compels reversal here. The wetlands on the Sacketts' property are distinguishable from any possibly covered waters."

The ruling will naturally lead to lower courts examining how the decision applies to the Biden administration's definition of "waters of the U.S." that right now is under court injunctions in at least 26 states tied to two separate courts.

The American Farm Bureau Federation praised the Supreme Court decision, stating EPA "clearly overstepped its authority under the Clean Water Act by restricting private property owners from developing their land despite being far from the nearest navigable water."

Zippy Duvall, president of AFBF, then called on the Biden administration to rewrite its waters of the U.S. rule. "Farmers and ranchers share the goal of protecting the resources they're entrusted with, but they deserve a rule that provides clarity and doesn't require a team of attorneys to properly care for their land," Duvall said.

EPA Administrator Michael Regan expressed disappointment in the court ruling, stating the Supreme Court decision "erodes longstanding clean water protections." Regan added, "The Biden-Harris Administration has worked to establish a durable definition of 'waters of the United States' that safeguards our nation's waters, strengthens economic opportunity, and protects people's health while providing the clarity and certainty that farmers, ranchers, and landowners deserve. These goals will continue to guide the agency forward as we carefully review the Supreme Court decision and consider next steps."

The Sacketts have been battling EPA since 2007 for the right to build on land the agency has deemed to be a wetland. Their property sits on a lakefront and they've argued that there is no surface connection between the lake and their land.

Alito said in the majority opinion that the Clean Water Act's reach is far narrower than EPA has opined.

"The EPA, however, offers only a passing attempt to square its interpretation with the text and its 'significant nexus' theory is particularly implausible," Alito writes. He said the definition of waters of the U.S. is more limited. "And, in any event, the CWA never mentions the 'significant nexus' test, so the EPA has no statutory basis to impose it," Alito stated.

One environmental group characterized the court's decision as 'stripping out key protections' from the Clean Water Act.

Manish Bapna, president and CEO of the Natural Resources Defense Council, said in a statement to DTN that the court "ripped the heart" out of the law.

"The majority chose to protect polluters at the expense of healthy wetlands and waterways," Bapna said. "This decision will cause incalculable harm. Communities across the country will pay the price."

The agency's use of the significant-nexus standard has been at the heart of opposition from agriculture and other industries to recent iterations of the waters of the U.S. rule.

The standard essentially allows the EPA and the U.S. Army Corps of Engineers to determine waters are covered by the law if there is a chemical connection to larger navigable water bodies.

The Sacketts have filed many appeals on the EPA decision in the past 15 years.

The U.S. Court of Appeals for the Ninth Circuit had sided with EPA's wetland assessment on the Sacketts' property. The court's ruling sends the appeals court decision back to the court for reconsideration.

Alito said in the majority opinion that EPA's interpretation of the law "gives rise to serious vagueness concerns in light of the CWA's criminal penalties."

"Due process requires Congress to define penal statutes 'with sufficient definiteness that ordinary people can understand what conduct is prohibited'," Alito writes, "and 'in a manner that does not encourage arbitrary and discriminatory enforcement.' Yet the meaning of 'waters of the United States' under the EPA's interpretation remains hopelessly indeterminate.

"The EPA contends that the only thing preventing it from interpreting 'waters of the United States' to 'conceivably cover literally every body of water in the country' is the significant-nexus test."

Alito's ruling noted in defining "waters of the U.S.," the court revisits what has been "a contentious and difficult task." Alito said the phrase "waters of the U.S." has sparked decades of EPA action and litigation.

The boundary between "significant" and insignificant is far from clear, Alito wrote.

EPA argued that "waters" also includes wetlands. But Alito points to the presence of puddles and also noted in an earlier decision that ponds are not considered part of waters of the U.S.

Alito went into an extensive writing about where wetlands fall in the CWA.

Justice Brett Kavanaugh concurs in his opinion but said that the "wetlands with a continuous surface connection to bodies that are 'waters of the United States' in their own right so that they are "indistinguishable" from those waters."

Kavanaugh wrote that he agreed the Sacketts' property should not have been covered under the Clean Water Act, but he said the majority ruling goes too far in removing the significant nexus test. The court's new "continuous surface connection" goes against 45 years of consistent agency practice and court precedents, Kavanaugh wrote.

"By narrowing the act's coverage of wetlands to only adjoining wetlands, the court's new test will leave some long-regulated adjacent wetlands no longer covered by the Clean Water Act, with significant repercussions for water quality and flood control throughout the United States."

Iowa Cash Rents Hit Highest Average Value on Record

The recent yearly survey of Iowa’s cash rental rates for farmland shows rates jumped by nine percent so far in 2023. The average is now $279 per acre, the highest average value on record. This new peak rate is three percent higher than the previous high of $270 in 2013. By way of comparison, average nominal (not inflation-adjusted) corn and soybean prices paid to farmers in the first quarter of this year were 2.8 percent higher and 4.4 percent lower, respectively, than in the first quarter of 2013. Of the usable responses to the Iowa State University Extension survey, 42 percent came from farmers, 37 percent from landowners, nine percent from professional farm managers and realtors, and seven percent came from ag lenders. The survey showed considerable variability across counties in year-to-year changes, typical of these surveys. A total of 91 out of 99 counties showed higher rents for corn and soybeans.

Ribbon Cutting on National Bio and Agro-Defense Facility

USDA and the Department of Homeland Security celebrated the dedication and ribbon-cutting of the National Bio and Agro-Defense Facility in Manhattan, Kansas. This facility is the first of its kind in the U.S. It offers the highest level of bio-containment laboratories and safety protocols and will allow scientists to study and diagnose critical animal diseases. “America’s farmers, ranchers, and consumers count on our researchers to understand, monitor for, and develop solutions to combat a variety of high-consequence animal pathogens,” says Ag Secretary Tom Vilsack. A facility of this magnitude positions us to respond.” The valuable scientific information delivered by researchers at NBAF will also allow America to remain a leading contributor of countermeasures that will protect agriculture, economies, and citizens across the globe. A USDA news release also says it’s a historic investment for agriculture and our nation in ensuring the health, safety, and security of the U.S. food supply.

EPA to Recommend Delaying Electric Vehicles Biofuel Program

The Environmental Protection Agency will recommend delaying a program that would allow electric vehicle manufacturers to access tradeable credits under the Renewable Fuel Standard. Two sources told Reuters that the White House will review the EPA’s final rule. The plan would have given EV automakers credits for charging vehicles using power generated from natural gas or methane. The threat of potential lawsuits also could have played a part in the postponement. The initial proposal last November could have generated as much as 600 million tradeable credits in 2024 and 1.2 billion in 2025. Prices for equivalent biofuel credits have recently traded over $2 each. The two sources also say the Biden Administration is still hoping to pass a final rule on the EV program before the end of 2023, even if it gets uncoupled from the yearly blending mandates. Biden is boosting the EV industry in an effort to reduce carbon emissions.

China Opposes U.S. Trade Agreement with Taiwan

China had a lot to say about the recent trade agreement between the U.S. and Taiwan. Saltwire.com says China’s Ministry of Commerce urged the U.S. to “carefully handle economic and trade relations with Taiwan.” The U.S. Trade Representative’s Office recently announced that the U.S. and Taiwan reached an agreement on the first part of their 21st Century trade initiative. The agreement covers customs and trade facilitation, regulatory practices, and small businesses. The pact is not expected to alter goods tariffs, but supporters say it will tighten economic bonds between the two nations and open up the Chinese-claimed island to more U.S. exports. It will also improve the ability of the island nation to resist Chinese economic coercion. China reacted angrily to the Taiwan president’s recent meetings with high-level U.S. officials, including Speaker of the House Kevin McCarthy. The announcement came just ahead of trade meetings between the U.S. and China.

USDA Wants Input on Prevented Planting Crop Insurance Coverage

The USDA published a Request for Information announcing public listening sessions and soliciting public comments on possible changes to prevent planting crop insurance coverage. In addition to the written public comment period, the Risk Management Agency will hold in-person and virtual listening sessions from June through August. “We truly care about what our customers, the nation’s agricultural producers, have to say,” says RMA Administrator Marcia Bunger. “That’s why we’re hosting listening sessions in 11 states in addition to accepting written comments.” The request for information is looking for input on the harvest price option, the “1 in 4” Rule, the ten percent additional coverage option, the contract prices, as well as general information on farmers’ willingness to pay additional premiums for expanded prevented planting benefits. They also want recommendations on other potential prevent planting limitations. Additional details on the listening sessions, including the schedule, are available on the RMA website.

Soy Innovation Challenge Winner’s New Approach to Soy Meal Processing

The United Soybean Board announced Satavie is the winner of the 2023 Soy Innovation Challenge. The Challenge called on entrepreneurs, innovators, startups, and research teams to bring new ways to advance the use of soybean meal and demand in existing markets. Satavie was selected as the winner out of 80 applicants from around the world. The company has a unique approach to extracting concentrated soy protein from soybean meal. Their new method ensures high levels of digestibility, improved nutrient absorption, and increased feed conversion rates that are ideal for swine, poultry, and aquaculture feed. As the winner of the contest, the company gets $100,000 from the United Soybean Board and $5,000 of in-kind technical services and credits from Amazon Web Services. The company’s president says the impact on the soy industry will be enormous. Their water extraction patented technique leads to better health outcomes, overall growth, and improved meat quality.  

Thursday Watch List

Markets

USDA's weekly export sales report is set for 7:30 a.m. CDT Thursday, the same time as weekly U.S. jobless claims, a new estimate of first-quarter U.S. GDP and an update of the U.S. Drought Monitor. More reports follow with U.S. pending home sales in April at 9 a.m. and natural gas storage at 9:30 a.m. Traders remain attentive to changes in weather.

Weather

Yet another day of isolated to scattered showers are expected in the Plains, being heaviest in parts of the drought across the southwest. Additional strings of showers and thunderstorms are expected for the Northern Plains into the Canadian Prairies as well. Outside of some cool temperatures across the Midwest, it remains rather warm as well.

Last Chance to Complete the 2022 Census of Agriculture

USDA’s National Agricultural Statistics Service will end data collection for the 2022 Census of Agriculture on May 31. Producers who have not yet returned their completed questionnaires have just one week left to respond. Federal law requires everyone who received the ag census to complete and return it. Recipients can respond online at agcounts.usda.gov or by mail. NASS Administrator Hubert Hamer says, “Not being represented in these widely used data means risking being underserved.” USDA NASS is reminding ag census recipients that if they produced and sold $1,000 or more of agricultural product in 2022, or normally would have produced and sold that much, they meet USDA’s definition of a farm. However, landowners who lease land to producers, those solely involved in conservation programs, and even those who may not have farmed in 2022 are still required to respond. USDA will release the results in 2024. To learn more about the Census of Agriculture, visit nass.usda.gov/AgCensus.

NIFA Helps Veterinary Medical Students Repay Loans

USDA's National Institute of Food and Agriculture helped 89 food animal veterinary practitioners with loan repayments from the Veterinary Medicine Loan Repayment Program in 2022. NIFA reported this week that the 89 students from 28 American Veterinary Medical Association accredited Colleges received nearly $9 million in loan repayment benefits. The program up to $75,000 in loan repayment over a three-year period to help eligible veterinarians offset a significant portion of the debt incurred in pursuit of their veterinary medical degrees in return for their service in certain high-priority veterinary shortage situations. Funding is authorized by the National Veterinary Medical Services Act. NIFA National Program Leader Bob Smith says, "Award recipients regularly tell us that they wouldn't be able to serve these areas without this support."  The program helps address the critical shortage of food animal veterinarians in both private and public practice, particularly in rural communities in the United States.

Eating Patterns Differ from Federal Recommendations

U.S. consumers’ eating patterns differ from Federal recommendations for many food categories, and where food is obtained plays a role. Researchers from USDA’s Economic Research Service examined diet patterns based on density—amounts of food consumed per 1,000 calories—using the latest available national food consumption data. They compared the average consumption densities of 17 food categories with what would be needed to match the Dietary Guidelines for Americans recommendations, assuming a 2,000-calorie intake. Average total consumption densities for 11 food categories fell more than 20 percent outside of recommended levels, with whole grains more than 70 percent below the recommended amount. Refined grains, on the other hand, had a consumption density of more than 85 percent above the recommended level. Densities of six food categories were within 20 percent of the recommended range. Generally, food purchased at grocery stores, supermarkets, and similar retailers for home preparation had consumption densities more in line with dietary recommendations than food obtained from commercial away-from-home sources.

USDA, University of Kentucky Break Ground on New Forage Research Building

Agriculture Secretary Tom Vilsack Tuesday participated in a groundbreaking ceremony for a new research facility, known as the Forage-Animal Production Research Unit. The University of Kentucky's College of Agriculture, Food and the Environment will host the new facility. Vilsack says, “Today’s groundbreaking builds on more than two decades of partnership with the University of Kentucky, while demonstrating USDA’s latest commitment to pushing the boundaries of what is possible for agriculture.” Upon completion, targeted for 2026, the new facility will encompass approximately 52,600 total square feet of office, supporting a research laboratory space, as well as a collaborative area, headhouse and eight-bay greenhouses. It will be staffed by six Agricultural Research Service scientists, seven university researchers, laboratory technicians, and administrative personnel. Earlier this month, USDA released a three-year science and research strategy, which establishes a scientific framework to transform the U.S. food system and support our nation's farmers, ranchers, producers and foresters.

The Alltech ONE World Tour begins in Budapest

Central Europe's agriculture producers will play a major role in addressing climate and food supply challenges around the world. The region's agri-food leaders discussed collaborative solutions and strategies for success today in Budapest, Hungary, at the first stop of the Alltech ONE World Tour. The event launches a series of international stops that bring the ideas and inspiration of the annual Alltech ONE Conference to the world. Discussions explored collaborative solutions to the greatest challenges facing the agri-food industry as it confronts the "4 Cs" — the major forces of climate, conflict, consumer trends and rising costs. Alltech president and CEO Dr. Mark Lyons says, "In times of uncertainty, it is crucial for businesses like ours to adapt and innovate." The Alltech ONE World Tour will continue with stops in Dublin, Ireland, on June 19–20 and Calgary, Canada, on July 3–4, then on to the U.S., Asia, South America and the Middle East. For more information and to register for an Alltech ONE World Tour stop, visit one.alltech.com.

Ford to Keep AM Radio in New Vehicles

Ford CEO Jim Farley announced on Twitter Tuesday that the company would include AM radio as part of all newly manufactured vehicles in 2024. Farley says, “After speaking with policy leaders about the importance of AM broadcast radio as a part of the emergency alert system, we've decided to include it on all 2024 Ford and Lincoln vehicles.” Any owners of a Ford electric vehicle without AM broadcast capability will be offered the capability through a software update, according to the company. The reversal follows action by lawmakers who introduced the AM for Every Vehicle Act last week, and opposition by broadcast associations. The National Association of Broadcasters, in a statement responded, "In light of Ford's announcement, NAB urges other automakers who have removed AM radio from their vehicles to follow Ford's lead." The AM for Every Vehicle Act cited the importance of keeping communities informed during emergencies, particularly rural communities with a lack of other information resources.

Wednesday Watch List

Markets

The U.S. Energy Department's weekly report of energy inventories, including ethanol production, is due out at 9:30 a.m. CDT. Minutes from the latest FOMC meeting are out at 1 p.m., followed by USDA's monthly cold storage report at 2 p.m. Traders continue to pay attention to the latest weather developments, news regarding Black Sea grain movement and talks surrounding the debt ceiling.

Weather

The Plains continue to be a focus for showers, especially across the southern drought areas where moderate to heavy rain has developed this week and continues Wednesday. An additional zone from Montana through Saskatchewan is also producing more consistent showers and thunderstorms. Other isolated showers will dot the rest of the Plains and Southeast as well.

USDA to Bring Jobs and Improved Infrastructure to Rural Partners Network

The Department of Agriculture Monday announced an effort to help rural communities to address some of their immediate needs and foster long-term economic growth. USDA is providing loans and grants to help people living in rural and Tribal communities in the Rural Partners Network access good-paying jobs, improved infrastructure, affordable housing and quality health care. The funding will support 52 projects in Alaska, Arizona, Georgia, Kentucky, Mississippi, New Mexico, North Carolina, West Virginia and Puerto Rico. In the West, the funding will help Tribal communities improve water and wastewater services and bring solar power and other forms of renewable energy to Tribal lands and farms. For people in Southern communities, projects will increase access to fresh foods in high-poverty areas and allow electric cooperatives to connect thousands of people to power with smart-grid technologies. The announcement includes $394 million in awards from USDA that will benefit communities and support their long-term visions for strong, local economies.

New Right to Repair MOUs Bring Industry Coverage to 70%

The American Farm Bureau Federation signed two more memoranda of understanding with two agricultural equipment manufacturers. The new MOUs were signed by AGCO and Kubota, providing farmers and ranchers the right to repair their own farm equipment. The MOUs, negotiated independently with each manufacturer, follow similar agreements AFBF entered into with John Deere and CNH Industrial Brands earlier this year. The four MOUs cover roughly 70 percent of the agricultural machinery sold in the United States. AFBF President Zippy Duvall says, “These agreements represent ongoing efforts to ensure farmers have access to the tools necessary to keep their equipment running.” The MOUs set a framework for farmers and independent repair facilities in all 50 U.S. states and Puerto Rico to access AGCO and Kubota manuals, tools, product guides and information to self-diagnose and self-repair machines, as well as support from the manufacturers to directly purchase or lease diagnostic tools and order products and parts.

Atypical BSE Case Detected in South Carolina

USDA’s Animal and Plant Health Inspection Service last week announced the finding of an atypical case of Bovine Spongiform Encephalopathy (in-sef-o-lop-athy). The approximately five-year-old or older beef cow tested positive following routine surveillance protocols at a slaughterhouse in South Carolina. The animal possessed a radio frequency identification tag associated with a herd in Tennessee. USDA APHIS and state animal health officials will conduct a thorough investigation of the case. Atypical BSE cases occur rarely and spontaneously, often in older cattle. This is only the nation's 7th case of atypical BSE, following a previous incident in 2018. This is the nation’s 7th detection of BSE. Of the six previous U.S. cases, the first, in 2003, was a case of classical BSE in a cow imported from Canada; the rest have been atypical. U.S. Cattlemen's Association president Justin Tupper responded, “This animal never entered slaughter channels and at no time entered the food supply chain due to the effectiveness of the surveillance team.”

Data Shows Few Farm Estates Must File Estate Tax Return

New data from USDA's Economic Research Service shows that less than one percent of farm estates created in 2022 must file an estate tax return. Created in 1916, the federal estate tax is a tax on the transfer of property to a person's heirs upon death. In 2022, the Federal estate tax exemption amount was $12.06 million per person, and the federal estate tax rate was 40 percent. Under the present law, the estate of a person who owns assets above the exemption amount at death must file a federal estate tax return. However, only returns with an estate above the exemption after deductions for expenses, debts, and bequests will pay federal estate tax. Researchers estimate that in 2022, 39,500 estates were created from principal operator deaths. Of those estates, ERS forecasts that 305, or 0.77 percent, will be required to file an estate tax return, and a further 87, or 0.22 percent, will likely owe Federal estate tax.

USDA Offers Assistance to Help Organic Dairy Producers

The Department of Agriculture recently announced assistance for dairy producers with the new Organic Dairy Marketing Assistance Program/ The program helps dairy producers mitigate market volatility, higher input and transportation costs, and unstable feed supply and prices that have created unique hardships in the organic dairy industry. USDA’s Farm Service Agency is offering $104 million in grants to dairy operations to assist with projected marketing costs in 2023, calculated using their marketing costs in 2022. Organic dairy producers have faced significant and unique increases in their marketing costs, compounded by increases in feed and transportation costs and the limited availability of organic grain and forage commodities. FSA Administrator Zach Ducheneaux says, “Without assistance, many organic dairies, particularly small organic dairies, will cease production.” FSA will begin accepting applications for the program on May 24, 2023. Eligible producers include certified organic dairy operations that produce milk from cows, goats and sheep.

Gas Prices Steady Heading into Holiday Weekend

As Americans gear up for the start of the summer driving season with Memorial Day weekend, the nation's average price of gasoline is unchanged from a week ago at $3.51 per gallon. The national average diesel price fell 3.2 cents last week and stands at $3.94 per gallon. GasBuddy's Patrick De Haan says, “We’ve seen more states see prices climb than fall, which has been driven by oil’s volatility as debt ceiling discussions are ongoing.” De Haan expects prices to rise slightly this week, especially if there are positive developments in the debt ceiling discussions. With continued discussions about reaching a bipartisan agreement to raise the nation’s debt limit, the price of oil has remained somewhat volatile, given the economic repercussions that come with the situation. U.S. retail gasoline demand saw a rise of 1.1 percent last week, and the most common U.S. gas price was 3.39 per gallon, up ten cents from last week.

Tuesday Watch List

Markets

A report on U.S. new home sales for April is set for 9 a.m. Traders will keep watch on the latest weather forecasts and digest Monday afternoon's Crop Progress reports.

Weather

A weak system continues to bring showers to the Southeast Tuesday. Isolated to scattered showers will continue across the Plains and Canadian Prairies as well, being heaviest and most widespread across parts of Alberta. Showers across the southwestern Plains will continue to ease drought conditions.

Winter Wheat Harvest Finds Disappointing Yields

The 2023 Wheat Quality Council’s Winter Wheat Tour wrapped up last week with disappointing numbers. After scouting for three days, the tour calculated an average yield of 30 bushels per acre. While an estimated 8.1 million acres of wheat were planted last fall, the winter wheat crop has suffered from a multi-year drought that cut yields and resulted in abandoned fields in Kansas, Nebraska, and Oklahoma. The official tour projection for the total production of wheat to be harvested in Kansas is 178 million bushels. Kansas Wheat says that number shows tour participants thought abandonment might be quite a bit higher than normal at almost 27 percent. The production number is the average of estimated predictions from tour participants who scouted 652 fields across the area. Based on May 1 conditions, NASS predicted the crop to be 191 million bushels, a yield of 29 bushels per acre, and abandonment at 18.5 percent.

Updates Begin on Improving Mississippi River Infrastructure

The Army Corps of Engineers held a groundbreaking ceremony marking the beginning of repairs to a lock and dam on the Upper Mississippi River that’s crucial to shipping corn and other commodities. Lock and Dam 25, almost 50 miles north of St. Louis, hasn’t been extensively repaired since it was constructed in the early 20th century. Funding for the project was included in the Infrastructure Investment and Jobs Act. The Illinois Corn Growers Association, long at the forefront of advocating for updates to the Lock and Dam, applauded the development. “Our hope is this will be the beginning of a waterfall of infrastructure work on the Illinois and Mississippi Rivers,” says ICGA President Matt Rush. Lock and Dam 25 is crucially important to corn growers as 60 percent of corn and soybean exports are transported on the Mississippi River. The river is important in shipping products both domestically and abroad.

USDA Previews Emergency Relief for Agricultural Producers

Ag Secretary Tom Vilsack plans to roll out $3.7 billion in Emergency Relief Program and Emergency Livestock Relief Program assistance to crop and livestock producers. The funds will help producers who sustained losses due to a qualifying natural disaster event during calendar year 2022. USDA is sharing the information early to allow producers time to gather documents in advance of program delivery. “U.S. ag producers nationwide endured crippling natural disaster events in 2022, including a mega-drought, hurricane, flooding, and wildfires,” Vilsack says. “While we have streamlined our delivery of natural disaster assistance, funding is limited and significantly less than the estimated losses.” He also says they’re designing payment factors to help as many producers as possible to offset the significant financial impacts resulting from these ongoing and widespread natural disasters. Producers who have participated in FSA programs likely have the required forms on file. Contact your local USDA Service Center with questions.

Senators Ask BLM to Withdraw Draft Rule

South Dakota Senator Mike Rounds and 15 other senators sent a letter to the Bureau of Land Management asking them to withdraw the proposed Public Lands Rule. The bureau says this rule would let conservationists lease federal land. The senators say it’s intended to set conservation equal to other land uses. The proposal would negatively affect western states, including South Dakota because their economies rely on public land for cattle grazing, energy development, and tourism. “It’s clear that anti-grazing and anti-development organizations would abuse this tool to attempt to halt ranching and block access to our nation’s abundant energy reserves located on public lands,” the letter says. Supporters of this rule say land conservation is necessary to protect the environment. They argue that the rule will not impede current land uses. The BLM website says the bureau will host public meetings, virtually and in person, to discuss the proposed rule.  

Bill Incentivizes Use of Cover Crops

Senator Sherrod Brown (D-OH) and several state representatives introduced bipartisan legislation to incentivize farmers to plant cover crops to help boost environmental conservation. The Conservation Opportunity and Voluntary Environment Resilience Program (COVER) Act would provide farmers who plant cover crops a crop insurance discount of $5 per acre. It will also lower the long-term cost of crop insurance by making the Pandemic Cover Crop Program permanent, authorizing additional funding for technical assistance in accessing the Good Steward Cover Crop Program, and creating a Soil Health Pilot Program. “Farmers are the original conservationists.,” says Brown. “By utilizing cover crops, they can increase yield, decrease pesticide use, and reduce runoff into waterways, which is good for everyone.” Planting cover crops slows erosion, promotes soil health, improves water availability, suppresses weeds, attracts pollinators, helps control pests and diseases, and increases biodiversity. Cover crops increase yields and reduce crop insurance losses caused by prevented planting.

Beef Output Will Drop in 2024

U.S. beef production in 2024 will drop eight percent to 24.7 billion pounds amid tighter supplies of cattle. A USDA report says aggregate domestic beef disappearance will fall more than seven percent to 52.8 pounds per capita on a retail-equivalent basis. That’s the lowest level since record-keeping started in 1970. The declining output will push cattle prices to new highs in 2024. A “core portion” of the beef herd is still seeing drought conditions in the Southern Plains, despite improving conditions. That resulted in a shortage of hay. Inventories on May 1 dropped 13 percent year-over-year to the lowest point in a decade. Despite recent rains, for some producers, the very-low hay supplies may not offset poor pastures to sustain herds this summer and allow producers to retain breeding stock,” USDA says. “As a result, culling continues at a relatively high rate.” On a positive note, feed prices will likely decline.

Top 5 Things to Watch - DTN Summit Event Tuesday, Dicamba Deadlines Loom

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of May 21. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Ag Summit Series: Our second DTN Ag Summit Series virtual event is May 23 at 8:30 a.m. CDT. You'll hear crop updates from farmers across the country, as well as learn the latest crop, fertilizer, weather and markets updates from DTN's formidable staff of reporters and analysts. Registration allows you to both watch the event live as well as view rebroadcasts if you missed a session, and you can share those rebroadcasts with others in your operation. 

2. Will wheat stay bearish?: Wheat markets continue to take an anti-fundamentals drop. Tough to swallow following the 2023 Wheat Quality Council Hard Winter Wheat tour, which put expected wheat yields near lows not seen since President John F. Kennedy proclaimed, "Ich bin ein Berliner." That would be 1963, for those keeping score. Prices have many exclaiming "Was zur Holle," though our analysts note the current drop is due to speculator selloffs in the futures market. We'll be keeping tabs on all that through the week. 

3. Continued drought reduction: We continue to watch the colors lighten on the weekly U.S. Drought Monitor map, and now also turn lighter on the latest Climate Prediction Center's U.S. Seasonal Drought Outlook map, thanks to continued precipitation systems the past few weeks. DTN Ag Meteorologist John Baranick notes that just over 20% of the Lower 48 states are currently in drought, the lowest level of drought conditions since June 2020. This week a ridge in the West moves east, and the weak trough behind it should bring showers to the High Plains, perhaps bringing even further drought reduction. Showers could stymie planting a little in the Dakotas, but overall crop progress should keep progressing.

4. Soybean head scratcher: Beans also have a lot of us scratching "die Kopfe." We'll watch for signs of any changes in the bean complex this week. 

5. Herbicide deadlines loom: Early planted beans are running into a conflict with dicamba postemergence application rules in many states. The latest rules outlaw post application when beans reach V4 or June 12, whichever comes first. Many early planted fields will likely hit the size limit well ahead of the cutoff date. Watch for the details from DTN Crops Editor Jason Jenkins this week.

Monday Watch List

Markets

Back from the weekend, traders will catch up on the latest weather forecasts and keep tabs on the latest crop comments. USDA's weekly report of export inspections is due out at 10 a.m. CDT, but more attention will turn to the latest reports of planting progress in USDA's 3 p.m. Crop Progress report.

Weather

A leftover front in the Southeast will bring scattered showers and potential for heavy rain to the Southeast on Monday and into Tuesday as well. Meanwhile, daily showers and thunderstorms will pop up for the Plains this week. For Monday, that targets Montana and the southwestern Plains areas and may fall over areas in deep drought not just Monday but throughout the week as well.

Black Sea Grain Deal Extended Two Months

The Black Sea grain deal has been extended for another two months, something the United Nations calls “good news for the world.” The news came one day before Russia could have quit the deal because of obstacles to its grain and fertilizer exports. Reuters says Turkey’s president made the announcement, later confirmed by Russia, Ukraine, and the U.N. Moscow was unwilling to extend the deal unless some demands regarding its own ag exports were met. While Russia’s ag exports of food and fertilizer aren’t directly affected by Western sanctions, restrictions on payments, logistics, and insurance are a barrier to shipments. Russia’s ambassador to the U.N. says the deal was extended because they haven’t lost hope that the problems raised by Russia will be resolved. The U.N. also says it hopes that exports of food and fertilizers, including ammonia, from Russia and Ukraine will get to global supply chains safely and predictably.

Opposition to House Ag Appropriations Bill

The House Agriculture Committee’s Ag Appropriations Subcommittee passed its fiscal year 2024 agriculture funding bill. The National Farmers Union says the legislation includes harmful provisions that would prevent USDA from completing a long-awaited Packers and Stockyards Act rule to protect family farmers and ranchers from abuses of market power by the meat industry. “Our markets are heavily consolidated and ripe for manipulation,” says NFU President Rob Larew. Chris Gibbs, president of Rural Voices USA, a leading rural advocacy group, says it’s hard to watch lawmakers who largely represent rural communities gut funding that goes directly to those same rural communities. “By slashing USDA funding by one-third, the House GOP is showing how backward their priorities are,” Gibbs says. “Instead of allowing rural communities to play a meaningful role in industries of the future, this proposal will leave rural communities behind.” Both groups say rural communities cannot stay silent on proposals like this.

NPPC Outlines Industry Priorities During House Hearing

Scott Hays, president of the National Pork Producers Council, testified before the House Ag Committee’s Subcommittee on Livestock, Dairy, and Poultry and talked about pork priorities. Hays presented policy priorities ranging from funding that supports programs to safeguard the nation’s food supply against the threat of foreign animal diseases to initiatives that expand foreign market access for U.S. agricultural products. Hays outlined the economic challenges facing pig farmers as hog prices have moderated significantly since 2022. Production costs have risen drastically, the industry faced trade retaliation, supply chain issues, labor shortages, and the unfavorable Supreme Court decision on Prop 12. “This is putting a pinch on the pork industry and could drive consolidation at the farm level as producers may be forced to exit the industry,” Hays says. Other priorities include a one-year extension of Livestock Mandatory Price Reporting, opposition to proposed changes to the Packers and Stockyards Act, and others.

Biofuels Must Be a Part of Climate Solutions

Biofuels like ethanol must not be ignored as a climate solution. That was part of the testimony by Kansas Corn Growers CEO Josh Roe in front of a House Oversight Subcommittee hearing. The discussion centered on vehicle emissions rules and the electric vehicle transition. “Unfortunately, current and proposed EPA rules prevent us from being part of the solution,” says Roe. “While we believe electric vehicles will play a vital role in achieving climate goals, other complementary alternatives like biofuels have a key role to play but are being pushed aside.” Roe also questioned the EPA proposal that considers electric vehicles as zero emission. “They aren’t truly zero-emission vehicles,” he says. “While they don’t have a tailpipe, you still need to account for the emissions that come from the power grid.” The U.S. power grid is 60 percent powered by coal and natural gas, and EPA rules don’t account for upstream emissions.

NCBA Endorses Legislation Protecting Animal Health

The National Cattlemen’s Beef Association announced its support the Foreign Animal Disease Prevention, Surveillance, and Rapid Response Act of 2023. The bipartisan legislation would continue making critical investments in foreign animal disease response programs currently overseen by USDA. “The threat of a foreign animal disease outbreak in the U.S. represents an existential threat to every cattle producer,” says NCBA President Todd Wilkinson. “As a cattle producer, it is reassuring to see bipartisan support for legislation like this, which will help our industry prepare for, and ultimately prevent a national crisis.” The Act will provide additional funding for three important animal health programs established through the 2018 Farm Bill, including the National Animal Vaccine and Veterinary Countermeasures Bank, the National Animal Disease Preparedness and Response Program, and the National Animal Health Laboratory Network. “Together, these three form a three-legged stool that represents our strategy for protecting the cattle and beef industries,” Wilkinson adds.

First Quarter Solid for Some Animal Product Exports

A USDA report says a comparison between first-quarter 2023 exports of seven animal products with the exports from the same time last year shows some improvement. Four of the categories were year-over-year higher and three were lower so far during this year. In the first quarter of 2023, lamb and mutton exports were up 31 percent, pork was up eight percent, broilers 2.5 percent higher, and dairy product exports were six percent higher than in 2022. USDA says the increases were due mostly to favorable prices and the depreciating value of the dollar. Beef and veal exports were eight percent lower than last year because of lower U.S. production in cattle-producing areas hit by extended drought. Egg and egg-product shipments were 22 percent lower than last year, and turkey exports were 21 percent lower. Fewer egg and turkey shipments were caused by export restrictions related to high pathogenic avian influenza.

Friday Watch List

Markets

With the 2023 Hard Winter Wheat Quality Tour wrapped up and the Black Sea grain deal extended for another two months, will we see a quieter grain market Friday? Traders will keep tabs on the latest weather forecasts, but are developing low expectations for export business. USDA's cattle on-feed report for May 1 is due out at 2 p.m. CDT and many expect the on-feed total to be down almost 4% from a year ago.

Weather

A front is found from the Central Plains through the central Midwest Friday morning, producing some scattered showers in the Midwest, but heavy rain in the Southern Plains. Morning showers will die out across the Plains but redevelop over the south later in the day, which may become severe. Across the Midwest, showers will be lighter. A brief shot of colder air and smoke from Canadian wildfires are following behind the front.

House Ag Spending Bill Released, Markup Thursday

The House Agriculture Appropriations bill released this week provides $26.3 billion for total funding, $532 million below the 2023 funding level. The bill provides $17.1 billion to the Department of Agriculture, which is $8.6 billion below current fiscal year spending and $11.7 billion below the budget request. The bill also provides $8.1 billion in funding repurposed from unobligated balances from pandemic-era programs. Conservative leaders in the House say the bill reins in wasteful spending by redirecting billions in American Rescue Plan and Inflation Reduction Act funding to help America’s producers and rural communities. The changes include a $32 billion decrease in mandatory SNAP spending from FY23 levels due to the end of increased pandemic-era benefits and a decrease in participation rates. The proposal also eliminates funding for equity initiatives and climate change, and saves $1 billion by restricting the discretionary use of the Commodity Credit Corporation. The House Agriculture Appropriations Subcommittee was scheduled to markup the bill Thursday morning.

Legislation Introduced to Protect Farms from Feral Hogs

Lawmakers this week in the Senate introduced the Feral Swine Eradication Act. The legislation would extend and make permanent a pilot program to safeguard public health, agriculture, and local ecosystems against the threat of feral swine. Senators Tommy Tuberville, an Alabama Republican and John Cornyn, A Texas Republican, introduced the bill. Tuberville says, "Over the past five years, feral swine have impacted more than 173,000 acres in Alabama, yet the pigs are still running rampant throughout the South." There are approximately six million feral hogs across the United States, which cause more than $1.5 billion in damages each year. The Feral Swine Eradication and Control Pilot Program was established in the 2018 Farm Bill to respond to rampant feral swine outbreaks and was implemented by the Department of Agriculture. The program includes feral swine removal, restoration efforts, and assistance to producers for feral swine control through grants with non-federal partners.

Senate Ag Committee Advances Torres Small Nomination

The Senate Agriculture Committee Wednesday advanced the nomination of Xochitl Torres Small to be Deputy Secretary of Agriculture to the full Senate for consideration. Committee Chair Debbie Stabenow, a Michigan Democrat, says, " Ms. Torres Small has a proven track record and a wide-ranging background that make her an ideal candidate to help lead the nearly 100,000 public servants at USDA." Ranking Member John Boozman, an Arkansas Republican, added, "She has shown herself to be a thoughtful leader while overseeing the rural development mission, and I believe those qualities will be an asset in this new role." Torres Small was confirmed by the United States Senate to serve as the Under Secretary for Rural Development on October 7, 2021. She was nominated to serve as Deputy Secretary by President Joe Biden in February following the resignation announcement by Jewel Bronaugh, who stepped away from the role to spend more time with family.

Truterra Pays $9 Million to Carbon Sequestering Farmers

Truterra, LLC Thursday announced the results of its carbon program for 2022, which paid more than $5.1 million to farmers for approximately 262,000 metric tons of carbon stored. In the first two years of the program, Truterra has paid more than $9 million to farmers for over 462,000 metric tons of carbon. Truterra President Tom Ryan says, “By working with and through farmer's trusted advisor, the carbon program has continued to achieve great success in its second year.” The company reports that 273 farmers participating in the 2022 carbon program, receiving an average total payment per participating farmer of over $18,000. Truterra is a self-described leading sustainability solutions provider, advancing and connecting sustainability efforts throughout the food system at scale – from farmers to ag retailers to value chain collaborators, including food and fiber companies.  Truterra was launched in 2016 by Land O'Lakes, Inc., a member-owned cooperative that spans the spectrum from agricultural production to consumer foods.

Food Spending Decreased Unevenly Across States in 2020

The COVID-19 pandemic in the United States disrupted the food industry in 2020, according to fresh data from USDA’s Economic Research Service. Inflation-adjusted total U.S. food expenditures were 6.6 percent lower in 2020 than in 2019. However, individual states experienced varying degrees of food spending decline. The ERS developed State-level Food Expenditure Series helps to illustrate annual food spending changes across States since 1997, including Washington, DC. From 2019 to 2020, each state saw decreases in inflation-adjusted, per capita total food spending. The smallest decreases in food spending were in Iowa, South Carolina, and North Carolina. The states that saw the largest decreases in inflation-adjusted, per-capita food spending were Hawaii, Washington, DC, Florida, and Nevada. These states typically have large out-of-state population inflows from nonresident workers and tourists. The spending changes occurred as health concerns and mobility restrictions during the first year of the pandemic led consumers to spend less at restaurants and other eating-out establishments.

Dairy Checkoff Building Trust with Youth

The dairy checkoff is bringing a new approach to building trust with young Americans by helping high school curriculum writers across the country incorporate accurate science behind dairy farming. The “On The Farm STEM” experience is co-funded by National Dairy Council and Midwest Dairy. The effort brings leading science educators and curriculum directors to dairy farms to discover ideas that can fit into high school curriculum. Ultimately, the program, created in partnership with the American Farm Bureau Foundation for Agriculture, will offer a science-based counterbalance to misunderstanding about how dairy is responsibly produced by farmers and its contributions to health and wellness. National Dairy Council’s Lindsay Datlow says, “With education and action, today’s youth will be empowered to understand how dairy foods fit into an overall healthy and sustainable food system.” Some dairy-focused classroom materials already are being used in school pilot programs. The curriculum is expected to be implemented in several states by early 2024.

Thursday Watch List

Markets

USDA's export sales report will be 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. U.S. existing home sales and U.S. leading indicators for April are due at 9 a.m., followed by the Energy Department's weekly report of natural gas storage at 9:30 a.m. After Russia agreed to extend the Black Sea grain deal Wednesday, traders will be watching for shipments out of Ukraine and the latest weather forecasts.

Weather

A cold front is moving through the Upper Midwest down through the Central Plains on Thursday with scattered showers likely, especially during the afternoon. Moisture ahead of the front should be good enough to produce widespread precipitation across western Kansas and the Panhandles which could be heavy, helping to ease drought conditions in these areas.

Biden Administration Announces $11 Billion Clean Energy Investment

The Biden Administration Tuesday announced the availability of nearly $11 billion in grants and loan opportunities to help rural energy and utility providers. The funding will help bring affordable, reliable, clean energy to communities across the country. The announcement is the single largest investment in rural electrification since President Franklin D. Roosevelt signed the Rural Electrification Act into law in 1936. Agriculture Secretary Tom Vilsack says that through the effort, the administration is "supporting thousands of new jobs and helping lower energy costs in the future." Funding is available through two programs under the Inflation Reduction Act. Specifically, the Department of Agriculture will open a Letter of Interest process for the Empowering Rural America program, making $9.7 billion available to eligible rural electric. USDA will also open a Letter of Interest process for the Powering Affordable Clean Energy program, making $1 billion available in partially forgivable loans to renewable-energy developers and electric service providers.

USDA Releases Black Sea Trade Vulnerability Dashboard

The Department of Agriculture Tuesday released a dashboard demonstrating the scope of Black Sea grain and oilseed trade. USDA's Foreign Agricultural Service says millions of tons of grain are shipped through the region annually, making the Black Sea region a major supplier of agricultural commodities worldwide. The dashboard demonstrates the impacts Black Sea trade disruption can have on food access in various countries. The analysis focuses on key commodities, including barley, corn, soybean oil, sunflower seed oil, and wheat. For each country, the largest suppliers are shown, which allows the dashboard to illustrate the potential impact of Russia's war in Ukraine. USDA Undersecretary for Trade and Foreign Agricultural Affairs, Alexis M. Taylor, says, "By looking at the Vulnerabilities to Trade Disruption dashboard, it becomes very clear how big an impact Russia's war has on food security in countries." The dashboard and all other USDA FAS tools and reports are available at www.fas.usda.gov.

Socially Disadvantaged farms Concentrated in South and West

Data from USDA’s Economic Research Service shows socially disadvantaged farmers and ranchers tend to be more concentrated in southern and western regions of the country. USDA defines socially disadvantaged farmers as those belonging to groups subject to racial or ethnic prejudice. In some counties, the proportion of operations classified as racially or ethnically socially disadvantaged is more than 58 percent, such as in parts of Arizona, New Mexico, Texas, and Florida. Overall, socially disadvantaged farms accounted for 9.4 percent of the two million farms in the United States. In 2017, 1.3 percent of all producers identified themselves as Black or African American only, 1.7 percent identified as American Indian or Alaska Native only, 0.6 percent identified as Asian only, 0.1 percent as Native Hawaiian or Pacific Islander only, and 0.8 percent of all producers reported more than one race. In addition, 3.3 percent of all producers of any race indicated Hispanic, Latino, or Spanish origin.

2022 National Beef Quality Audit Shows Efficiency Improvements

The beef cattle industry is producing a high-quality product that consumers want more efficiently. NCBA this week announced the findings as part of the 2022 Beef Checkoff-funded National Beef Quality Audit results. Since 1991, the Beef Checkoff-funded National Beef Quality Audit has delivered a set of guideposts and measurements for cattle producers  to help determine quality conformance of the U.S. beef supply. NCBA's Josh White says, "The NBQA is an important tool for the industry to identify where improvements are being made and where there are opportunities to capture more value.” When comparing 2016 and 2022 NBQAs, the largest improvement was overall increased efficiency across the beef supply chain. Key findings include market segments no longer consider food safety as a purchasing criterion, but as an expectation, and market sectors indicated that their companies strive to increase their sustainability. The NBQA, conducted approximately every five years, provides an understanding of what quality means to the various industry sectors, and the value of those quality attributes.

Certified Angus Beef Expands Offering with Grass-Fed Beef

Consumer demand for high-quality beef has been a long-time sales driver for Certified Angus Beef, and ultimately, it has increased demand for superior Angus genetics. As consumer preferences evolve, the brand is growing to provide premium beef for every liking. And now, that will include a grass-fed option: Certified Angus Beef Grass-Fed by Niman Ranch. Certified Angus Beef President John Stika says, “This product will represent a small portion of total sales, but it's an important addition that helps us meet the needs of consumers who have different preferences.” The Certified Angus Beef  Grass-Fed by Niman Ranch product will make up less than one percent of the total CAB supply. A niche product, the grass-fed, natural beef will initially only be available through a few, exclusive restaurants and grocery stores. Consistent with all Certified Angus Beef brand products, the grass-fed beef must meet all ten specifications to qualify for the brand.

Lawmakers Ask Automakers to Keep AM Radio

A group of more than 100 lawmakers this week signed a letter to automakers expressing concerns about the removal and planned removal of AM radio receivers in vehicles. Representative Greg Pence, an Indiana Republican, led the effort, and says, “If automakers are seeking to remove access to AM radio, my constituents deserve an explanation as to how this could impact their lives and public safety.” The letter highlights the need of rural Americans to access AM radio, given limited internet and cell phone connectivity. The letter states, “We urge you to maintain AM radio receivers in all vehicles and prioritize consumers and public safety.” Federal data shows that more than 75 radio stations, mostly AM stations, cover at least 90 percent of the U.S. population and are equipped with backup communications equipment for broadcasting during public emergencies. There have been reports that automakers, including Ford, Volkswagen, BMW, Mazda, Volvo, Tesla, Polestar, Rivian, GM, and Mercedes Benz, removed, or are planning to remove, broadcast AM radio receivers from all-electric vehicles.

Wednesday Watch List

Markets

A report on U.S. housing starts in April is set for 7:30 a.m. CDT Wednesday, followed by the U.S. Energy Department's weekly inventory report at 9:30 a.m. Traders will continue to monitor the latest weather forecasts and watch for any news regarding the Black Sea grain deal.

Weather

An old front and humid weather will produce scattered showers in the Southeast on Wednesday. Isolated showers and thunderstorms will develop in the High Plains ahead of a cold front that is moving through the Northern Plains. The front is producing scattered light showers, not enough to impact planting for too many areas today

Lawmakers Introduce Legislation to Classify Corn as an Advanced Biofuel

New legislation introduced Monday in the House of Representatives would allow for ethanol from corn starch to qualify as an advanced biofuel. The Fuels Parity Act would also require the Environmental Protection Agency to use the Argonne GREET model to determine the greenhouse gas emission profile of biofuels under the RFS. Corn is currently prohibited from qualifying as an advanced biofuel, even if it can meet the required scientific thresholds, by a provision in the 2007 RFS expansion known as the “corn discrimination clause.” No other feedstock is limited – only corn starch used for ethanol. Allowing corn to qualify as an advanced biofuel would incentivize lower emissions from ethanol production and allow corn to access another bucket of the RFS. If ethanol can meet the scientific thresholds, then it should be allowed to qualify as an advanced biofuel and generate an advanced biofuel RIN, according to lawmakers introducing the legislation.

NCGA: Ethanol Bill Would Level the Playing Field

The National Corn Growers Association supports the Fuels Parity Act introduced in the House of Representative's Monday. NCGA President Tom Haag says the legislation "Recognizes the declining carbon intensity of today's low-carbon ethanol and helps level the playing field." Published analysis from the Department of Energy's Argonne National Laboratory concludes corn ethanol's carbon intensity decreased 23 percent from 2005 to 2019 due to increased corn yield, reduced fertilizer intensity and improved ethanol production efficiency, with corn ethanol now between 44 and 52 percent lower in carbon intensity than the gasoline it replaces. Argonne's analysis is consistent with recent research from Environmental Health and Engineering that corn ethanol today is 46 percent lower in carbon intensity than gasoline, with the potential for further reductions from additional corn feedstock and production process improvements. Under the law, advanced biofuels must deliver a 50 percent or more reduction in greenhouse gas emissions compared to gasoline, a requirement today's ethanol now meets.

New Survey Reveals Farmer Use of Automation

Growers now spend an average of $500,000 a year on automation in response to the persistent ag labor shortage. Western Growers discovered the data in its Specialty Crop Automation Report. The report, which tracks and measures industry progress in harvest automation across the fresh produce industry, is part of the Western Growers Global Harvest Automation Initiative, which aims to accelerate ag automation by 50 percent in ten years. Most progress was made in the weeding and harvest assist segments; market-ready solutions are able to meet grower economic targets and alleviate key challenges, such as lack of labor availability. Growers reported ROIs for weeding solutions of less than one to two years, depending on the type of crop and technology used. Growers want more trained agtech personnel, with 50 percent indicating that they had internal employees who dedicated the majority of their time to the integration of automation investments.

Groundwater Organizations see Nitrate Contamination As Top Concern

New data from USDA’s Economic Research Service finds that 30 percent of groundwater organizations cite nitrate contamination as a groundwater quality concern. Nitrates can come from animal manure and chemical fertilizers that leach into groundwater. When groundwater pumping exceeds the volume of groundwater recharge, the concentration of contaminants like nitrates can increase. Nitrate contamination is a concern on more than half of the groundwater-fed irrigated acreage within groundwater organization service areas. USDA’s Survey of Irrigation Organizations collected information on the estimated 735 local entities that manage on-farm groundwater use through statutory, regulatory, or other powers. While nitrate contamination was the most common groundwater quality concern reported, contamination by salinity, other nutrients, and heavy metals are a concern for 27, 19, and 18 percent of groundwater organizations, respectively. USDA’s Economic Research Service says contaminated groundwater can harm crops or make the water unusable for irrigation entirely.

Rodale Institute Applauds USDA Investments in Organic Farmers

The Department of Agriculture is expanding opportunities for organic farmers, a welcome investment, according to the Rodale Institute. USDA announced the expanded opportunities last week. Through the newly-established Organic Market Development Grant Program, USDA’s Agricultural Marketing Service will issue up to $75 million in competitive grants to fund projects designed to expand and improve markets for domestically produced organic products. In addition, the Farm Service agency increased the cost share amount under the Organic Certification Cost Share Program, which helps organic producers cover organic certification costs, to the maximum amount allowed by statute. Rodale Institute CEO Jeff Tkach says, “Consumer demand for organic products is growing rapidly and the USDA’s support will help American farmers meet the needs of the market.” Recent USDA data shows farms and ranches in the United States sold over $11 billion in certified organic commodities in 2021, a 13 percent increase from 2019.

Gas Prices Edge Higher, Diesel Lower

For the first time in several weeks, the nation's average gasoline price increased, rising four cents from a week ago to $3.51 per gallon. The national average is down 14.9 cents from a month ago and 95.6 cents per gallon lower than a year ago. The national average diesel price fell four cents in the last week and stands at $3.97 per gallon, $1.59 lower than one year ago. GasBuddy's Patrick De Haan says, "We're likely to soon see gasoline prices slip to their largest year-on-year deficit since COVID hit, when prices fell over $1 per gallon from 2019, so the relief at the pump has been significant." With continued discussion over the U.S. hitting its debt limit, oil prices have seen additional volatility. De Haan adds that it’s looking more likely that, barring a major hurricane or series of refinery outages, the national average may not end up hitting the $4 per gallon mark.

Tuesday Watch List

Markets

A report on U.S. retail sales for April is due out at 7:30 a.m. CDT, followed by U.S. industrial production at 8:15 a.m. Traders continue to keep an eye on the latest weather forecasts and watch for any update of the Black Sea grain deal.

Weather

A small system is moving east along the Ohio Valley, producing scattered showers and thunderstorms, some of which may be heavy and severe. Additional showers and thunderstorms are expected to pop up to the south of this system as well across the Gulf Coast and Southeast. Drier weather elsewhere will help to dry out areas that were flooded last week.

USDA Releases U.S. Crop Production Outlook

USDA projects a record U.S. corn crop of 15.3 billion bushels, up over 10 percent on increases to both area and yield. The yield projection is 181.5 bushels per acre. The 2023-2024 corn outlook calls for larger production, greater domestic use and exports, and higher ending stocks. Total corn supplies are forecast at 16.7 billion bushels. The season-average farm price is expected to be $4.80 a bushel, down $1.80 from the prior year. The U.S. soybean crop will be 4.51 billion bushels, up five percent from last year on higher yields. Soybean supplies are projected to be up four percent to 4.75 billion bushels. The season-average soybean price is forecast more than $2 lower at $12.10 per bushel. The USDA’s all-wheat production is forecast at 1.65 million bushels, up slightly from the previous year. The all-wheat yield is projected at 44.7 bushels, and the season-average price is down to $8 a bushel.

Credit Conditions Strong as Interest Rates Climb

Agricultural credit conditions in the Tenth District of the Kansas City Fed remained strong, and farm real estate values continued to increase. However, growth has softened. While improvements in farm finances and credit conditions steadied and some lenders expected a deterioration in the months ahead, multiple years of strong incomes continued to keep credit stress low. The outlook for the U.S. farm economy in 2023 remained favorable as prices of key commodities were at multi-year highs. Financial performance and liquidity at agricultural banks remained solid and farm lenders appeared well-positioned to meet higher credit demand through the early months of this year. Farm loan interest rates rose alongside further increases in benchmark rates. The average rate charged on agricultural loans was about 30 basis points higher than the previous quarter and almost 300 basis points higher than a year ago. The farm real estate market has softened as interest rates rose.

More Reaction to Supreme Court’s Prop 12 Decision

The Supreme Court decision upholding California’s Prop 12 continues to draw strong reactions from America’s agricultural stakeholders. Kansas Republican Senator Roger Marshall says he’s disappointed in the Court’s decision not to strike down Prop 12. “We can’t allow radical state laws to dictate the agricultural practices in every other state,” Marshall says. “This will only increase food costs for people already suffering from food insecurity and drive farmers and ranchers out of business.” Marshall plans to re-introduce his Exposing Agricultural Trade Suppression Act which will prohibit state and local governments from interfering with agricultural production in other states. Iowa’s Ag Secretary Mike Naig says this decision opens the door for the largest states to dictate laws and regulations to the rest of America. “While the ruling was focused on agriculture, it will certainly creep into other industries,” he says. “It will drive the cost of production and food prices higher.”

More Elected Officials Concerned About Lack of AM Radio in New Cars

Representatives Mike Gallagher of Wisconsin and Josh Gottheimer of New Jersey sent a bipartisan letter to the Federal Emergency Management Agency regarding the future of AM radio in new vehicles. They expressed concerns over auto makers’ decision to drop AM radio access in the new electric vehicles that will be coming to market. The members talked about the important role that AM radio plays in providing life-saving information to the public. They also asked FEMA to outline what impact this would have on the nation’s Emergency Alert System and what steps the agency is taking to prevent this from happening in future vehicle models. “AM radio has extensive geographic reach, including areas where there’s little cell service or broadband internet access,” they say in the letter. “Given the growth in electric vehicle sales, it’s vital that FEMA makes clear the impact that no AM radios will have on public safety.”

Industry Groups Want More Biomass-Based Diesel in RFS Volumes

Clean Fuels Alliance America joined four other trade associations in sending a letter to EPA administrator Michael Regan regarding biofuel volumes in the Renewable Fuels Standard. They want the EPA chief to substantially raise the biomass-based diesel and overall advanced biofuel volumes in the RFS for 2023-2025. The letter highlights the need for strong RFS volumes to support the goals of the National Blueprint for Transportation Decarbonization. “Our industries need these fuels to decarbonize air transport, long-haul shipping and trucking, home heating, and to meet the needs of our customers and supply chain partners,” the letter says. “The proposed RFS volumes are simply inconsistent with the investments our industries will make to continue expanding production and commercial availability of these fuels by 2025.” The groups also say in the letter that their industries continue to make significant investments in producing, distributing, and using low-carbon fuels, but more can be done. 

Groups Urge Congress to Reject Increases in Farm Subsidies

A group of taxpayer, agriculture, and environmental organizations held a press conference to urge Congressional leadership to reject attempts to increase reference prices for covered commodities. The National Sustainable Agriculture Coalition was one of the groups who opposed raising the Price Loss Coverage reference prices in the 2023 Farm Bill at a time when gross farm income is higher than ever. “Taxpayer commodity program subsidies were designed as a safety net tool, triggered when necessary, to help protect against unpredictable losses that are a part of farming,” says Billy Hackett, NSAC Policy Specialist. “It’s not an annual entitlement program for the country’s most successful farms. Ten percent of the farms get 70 percent of the subsidies and throwing money at an unsustainable system is no solution.” The other organizations taking part in the press conference included the Environmental Working Group, FreedomWorks, the National Taxpayers Union, Farm Action, and several others.

Top 5 Things to Watch - Wheat Tour Highlights Coverage

OMAHA (DTN) -- Here are the Top 5 things the DTN Newsroom is tracking for the week of May 14. Watch for coverage of these and other topics through the week on our subscription platforms as well as on DTNPF.com.

1. Kansas wheat tour: Crop tours are always highly anticipated, but for certain this year commodity markets are listening for how bad conditions are in hard red winter wheat country. We'll report from the annual Wheat Quality Council Hard Winter Wheat Tour starting Tuesday night, with mid-day updates and a full report from tour scouts each evening Tuesday and Wednesday. Final numbers will be available late-morning Thursday. 

2. Markets respond to bullish news: We'll continue to track the market's response to Friday's World Agricultural Supply and Demand Estimates (WASDE) report, which sent wheat futures skyward, and what the wheat tour adds to that. There is also continued news coming on Brazil's safrina (second-crop) corn. 

3. Change in the weather patterns: The trough of low pressure that has been situated over the West, supplying energy to fire off the past week's thunderstorms, is about to shift. DTN weather forecasters expect a ridge over the West, heating up western North America. At the same time, a new trough moves into Eastern Canada, chilling that area as well as the Midwest and Northeast. We'll watch for bursts of cold that carry a slight chance for frost in far northern U.S. and Canadian Prairies.

4. Ukraine grain deal: In an ongoing issue, we'll again watch for the latest in the Russia-Ukraine grain sales agreement, set to expire May 18. As the AP has reported, the deal has been extended twice so far, and Ukraine officials and allies are seeking another extension to continue the flow of grain to Africa, the Middle East and Asia. Russia continues to balk at those extensions, pushing to tie renewed ability to move its fertilizer supplies into the market stream.

5. Economic reports fill the week: Monday sees the ongoing USDA Crop Progress and grain export inspections reports, as well as soybean crush reports. On the broader economy, April retail sales and industrial production numbers hit Tuesday, with housing starts and Energy Department inventory numbers on Wednesday. Thursday sees weekly U.S. jobless claims, existing home sales and the April U.S. index of leading indicator numbers. May's Cattle on Feed report hits Friday, with DTN analysis coming in that afternoon.

Monday Watch List

Markets

Back from the weekend, traders will be checking for any movement of news on the Black Sea grain initiative and taking in the latest weather forecasts. USDA's weekly report of export inspections is due out at 10 a.m. CDT, followed by a soybean crush report from the National Oilseeds Processors Association later Monday morning. USDA's Crop Progress report will have new estimates of planting progress at 3 p.m.

Weather

A small system in the Ozarks is producing areas of showers for the Southern Plains into the southwestern Corn Belt Monday morning and will spread more showers through these areas and into the Ohio Valley Monday night. Some isolated showers may pop up in the West and through the Southeast as well. Drier conditions are forecast for northern zones into Canada.

Supreme Court Rejects Challenge to Prop 12

The U.S. Supreme Court rejected a challenge to California’s Prop 12. The law bans the sale of pork from pigs that are kept in tightly confined spaces. The justices voted 5-4 to uphold a lower court’s decision to dismiss a lawsuit filed by the National Pork Producers Council and the American Farm Bureau that sought to invalidate the law. The groups argued that the measure violated a U.S. constitutional provision called the Commerce Clause that courts say gives the federal government the power to regulate interstate commerce, not the states themselves. “While the Constitution addresses many weighty issues, the type of pork chops California merchants may sell is not on that list,” wrote conservative Justice Neil Gorsuch, who authored the Court’s main opinion. The Prop 12 measure was approved by California voters in 2018. It bans in-state sales of pork, veal, and eggs from animals whose confinements didn’t meet space requirements.  

Reaction to Supreme Court Decision on Prop 12

The National Pork Producers Council reacted negatively to the Supreme Court’s decision on California’s Prop 12. “We are very disappointed with the Supreme Court’s opinion,” says Scott Hays, NPPC president. “Allowing state overreach will increase prices for consumers and drive small farms out of business, leading to more consolidation.” NPPC is still evaluating the Court’s full opinion to fully understand all the implications. “We will continue fighting for our pork farmers and American families against misguided regulations,” Hays adds. Kitty Block, president and CEO of the Humane Society of the U.S., says she’s “delighted” that the Supreme Court upheld California’s Prop 12. “It’s the nation’s strongest farm animal welfare law, and the Court made clear that preventing animal cruelty and protecting public health are core functions of our state governments,” she says. Also, HS-USA “won’t stop fighting until the pork industry stops confining sows in cages so small they can’t turn around.”

Senators Slam Plant-Based Dairy Labeling

Senators Tammy Baldwin of Wisconsin and Jim Risch of Idaho led a bipartisan group in calling out the administration’s draft guidance on labeling non-dairy product imitators. The Biden administration’s guidance allows non-dairy products to use dairy names like milk when labeling their products.

The Food and Drug Administration contradicted its own regulations by releasing guidance that would allow plant-based products to continue using dairy terms despite not containing dairy or having the nutritional value of dairy products. “The inaction by FDA harms public health as a result of consumer misperception over dairy products’ inherent nutritional value,” the Senators wrote. “As a result, it’s imperative that FDA enforce existing standards of identity for dairy in both current and future guidance.” The two senators have led the charge to crack down on imitation products using dairy’s name. They authored bipartisan legislation called the Dairy Pride Act to combat the unfair labeling practice.

Combine Sales Continued Growing in April

Combine harvester sales in the U.S. and Canada continued growing while total tractor sales declined below the five-year average. The Association of Equipment Manufacturers says total U.S. ag tractor unit sales decreased in April, down 16 percent year-over-year. Unit sales of four-wheel-drive tractors climbed 54 percent higher, and the 100-plus horsepower segment sales climbed five percent. U.S. self-propelled combine sales grew 23 percent for the month, leading to a year-to-date gain of 72 percent. Sales dropped in both the sub-40 horsepower segment by 20 percent, and the 40-100 horsepower segment dropped 13 percent during April. In Canada, combine harvester sales continued growing, up 51 percent in April and 133 percent year-to-date. Total unit sales in tractors finished the month down 25 percent due to continued losses in all tractor segments. Curt Blades of AEM says, “Strong commodity prices are behind increases in the sales of the larger segments of tractors and harvesters.”

Ag Innovation Challenge Deadline Extended

The American Farm Bureau Federation has extended the deadline to May 26 for entrepreneurs to apply online for the 2024 Farm Bureau Ag Innovation Challenge. The tenth year of this national business competition showcases U.S. startup companies developing innovative solutions to the challenges faced by America’s farmers, ranchers, and rural communities. Farm Bureau is offering $165,000 in startup funds through the course of the competition, which will culminate in the top ten semi-finalists competing in a live pitch competition in front of Farm Bureau members, investors, and industry representatives at the 2024 Farm Bureau National Convention. “Start-up companies like those we recognize through the Ag Innovation Challenge play an important role in the future of American agriculture,” says AFBF President Zippy Duvall. Detailed eligibility guidelines and the competition timeline can be found at fb.org/challenge. “Farmers rely on continuous improvements powered by innovation to keep providing food, fuel, and fiber,” Duvall says.