Peterson Requests Delay in Nation-wide 5G Network Implementation

Outgoing House Agriculture Committee Chairman Collin Peterson and others on the committee seek a delay in deploying a terrestrial nationwide network to provide 5G services. In a letter last week to the House Appropriations Committee, Peterson says, “There is no room for error when discussing safety and reliability of service for GPS signals.” In July, a group of lawmakers led by Peterson expressed serious concerns surrounding the FCC's decision, questioning the reliability of GPS for millions of Americans, especially farmers and ranchers who rely on the technology for precision agriculture. Peterson was joined by Republicans Glenn GT Thompson of Pennsylvania and James Comer of Kentucky. Specifically, the lawmakers want the FCC to delay an order granting Ligado Networks 5G development. Representative Comer states, “critical tools like GPS technology must not be disrupted, as our farmers are essential workers who must have the tools they need to do their jobs.” The lawmakers hope appropriation bills will include the delay.

FCC Chair Pai to Step Down January 20

Federal Communications Commission Chair Ajit Pai (Uh-JEET Pie) will step down January 20, 2021, the day President-elect Joe Biden will be sworn in. In a statement released Monday, the rural Kansas native said, “It has been the honor of a lifetime to serve at the Federal Communications Commission.” Pai was appointed to the commission in 2012 by President Barack Obama, and made chairman by President Donald Trump in 2017. Pai used his time at the FCC focusing on rural broadband issues, among other things. Pai’s term was set to expire in June 2021. The now outgoing chairman mentioned successes in his time, such as closing the digital divide, promoting innovation and competition, from 5G on the ground to broadband from space, protecting consumers, and advancing public safety. Pai grew up in Parsons, Kansas and attended Harvard and the University of Chicago Law School. Pai was the first Asian-American to chair the FCC, which he calls a “particular privilege.”

Washington Insider: Budget Fight Begins in Earnest

Bloomberg is reporting this week that key Republicans have withheld support for an initial agreement on government funding totals, as lawmakers continue to work toward a deal on an omnibus appropriations measure by the end of next week.

House Minority Leader Kevin McCarthy, R-Calif., is opposed to an agreement by Rep. Nita Lowey, D-N.Y., and Sen. Richard Shelby, R-Ala., who lead the House and Senate Appropriations Committees. President Trump hasn't commented on the agreement and White House Office of Management and Budget staff didn't respond to Bloomberg's request for comment.

Broad Republican opposition to an agreement on allocations would make it difficult for lawmakers to agree to an omnibus by the Dec. 11 funding deadline, increasing the odds of either a stopgap measure or a shutdown, Bloomberg said.

Lowey and Shelby agreed last Tuesday to a set of top-line spending allocations for all 12 appropriations categories, allowing lawmakers to start negotiating the details of an omnibus. The agreement covered emergency funding expected to be proposed, Bloomberg said and was thought to overcome a major disagreement in current spending discussions. House Democrats had included $247.4 billion in emergency funds that would be exempt from statutory spending limits, while Senate Republicans only included $12.5 billion in emergency funds.

It's unclear how much emergency money is included now in the current draft agreement--lawmakers and aides haven't provided details and tend to be secretive with initial agreements on top-line spending allocations, Bloomberg said.

But McCarthy, a Trump ally, told the press he isn't happy with the agreement's emergency funds, which go beyond the bipartisan 2019 agreement on how much discretionary money to spend in fiscal 2020 and 2021, Bloomberg said.

The White House was initially silent on the idea of an omnibus appropriations package, rather than smaller bills or a stopgap measure, until Chief of Staff Mark Meadows made it clear Trump wanted a deal.

So, appropriators also are preparing another short-term, stopgap bill into next year, just in case, Bloomberg says.

It's possible the House will complete its legislative business early the week of Dec. 7, according to a schedule update by House Majority Leader Steny Hoyer, D-Md., a sign that House leaders haven't ruled out a quick deal ahead of the Dec. 11 deadline. Hoyer's update encouraged House members to stay in Washington after the last scheduled votes of the week on Friday.

“As conversations surrounding legislation related to government funding, coronavirus relief, and a few other items are ongoing, these bills will be considered by the House as soon as they are ready,” the most recent update said.

Also, President-elect Joe Biden is expected to take a significant step this week toward addressing the damage to the U.S. economy inflicted by the coronavirus pandemic, as he names an economic team led by his choice for Treasury secretary, former Federal Reserve Chair Janet Yellen. She is seen as a “battle-tested policy maker” who can draw on her nearly two decades at the Fed to help rebuild an economy in dire need of government cash and confidence.

The President-elect has called for trillions of dollars in new stimulus to aid the small and mid-size businesses that are the nation's primary jobs engine.

Yellen's expected to champion what she's called “extraordinary fiscal support” to support the pandemic-ridden economy--deficit spending that she says is affordable given extraordinarily low interest rates.

Others in Biden's economic policy team are also expected to be unveiled in the next few days including longtime Democratic policy staffer Neera Tanden who is expected to lead the Office of Management and Budget as well as Cecilia Rouse, formerly of the Obama administration and currently dean of Princeton University's School of Public and International Affairs, who would head the Council of Economic Advisers. Both roles require Senate confirmation and observers expect at least Tanden's nomination to be controversial.

So, we will see. Dealing with spending bills likely will continue to be controversial, as will the proposals for membership in the new economic policy team. And while there is little enthusiasm for a standoff on the spending proposals this fall, this is a “hardball era” in Washington and bitter fights among competing interests in both parties are intensifying along with the lingering hostilities over the legitimacy of the recent election. These are important fights in many cases and should be watched closely by ag producers as they emerge, Washington Insider believes.

USDA Forwards Plan To OMB On Regs For GE Animal Movement

USDA has forwarded to the Office of Management and Budget (OMB) what is being labeled a pre-rule on regulations covering the movement of animals that are modified or produced by genetic engineering.

The rule was sent to OMB November 25 and there is no statutory deadline for the item and it is not clear yet what direction USDA plans to head on the topic.

Plus, given that it is not even in the proposed rule stage, the issue could well be finalized by the incoming Biden administration.

Australia-China Trade Tensions Continue To Rise

China announced tariffs of up to 212% on Australian wine, contending the country uses subsidies to bolster its exports. The move is the latest instance of a decline in Sino-Australian relations, and Simon Birmingham, Australian Trade Minister, said they would amount to a “devastating blow” for Australian business as china accounts for 42% of Australian wine exports.

Australia is also preparing to take action against China at the World Trade Organization (WTO) over tariffs on barley imports.

China in May placed tariffs of 80.5% on Australian barley, saying it was being sold at unfairly low prices with the help of subsidies. Australia rejected that finding and directly appealed to Chinese authorities to reverse the duties but was rebuffed. “So now the WTO appeal for barley is the next step,” Birmingham said Sunday. The government is holding talks with the local grains industry and other sectors to gauge support for filing a complaint, he added.

The rising tensions have resulted in some benefits to the U.S., but surprisingly no U.S. barley exports have taken place thus far even though the Phase One agreement also resulted in a China-U.S. accord on barley.

Tuesday Watch List

 Markets

After broad losses in the grain sector Monday, traders will be checking the latest weather forecasts for South America and any trade news that develops. ISM's index of U.S. manufacturing is due out at 9 a.m. CST and will be compared to similar indices for other countries. USDA's Fats and Oils report will have an update of soybean crush at 2 p.m. CST.

Weather

Light to moderate snow is in store for portions of the eastern Midwest Tuesday, mainly in Ohio. This snow will disrupt the final stage of corn harvest. Dry conditions will be in place elsewhere. The pattern turns stormier in the Plains with snow during Wednesday.

Washington Insider: Dealing With China

Bloomberg is reporting this week that the U.S. will soon have a new climate czar, John Kerry, the former senator, secretary of state and presidential candidate. In explaining the role's placement within the National Security Council, President-elect Joe Biden said he wanted to put “climate change on the agenda in the situation room,” the report said.

The report also notes that “critically, this structure signals that the new White House is searching for common ground with China.”

Kerry is widely credited with putting together a US-China agreement in 2014 to reduce carbon emissions, a breakthrough that paved the way for the Paris Agreement the following year. That deal was a template for the kind of collaboration that many argue is now essential. Without cooperative action, former Secretary of State Henry Kissinger warned at last week's Bloomberg New Economy Forum, “The world will slide into a catastrophe comparable to World War I.”

Kerry is clearly expected to reprise his role as the Beijing bridge-builder, Bloomberg says.

“While some have decided that we are entering a new Cold War with China, we can still cooperate on critical mutual interests,” Kerry told the New York Times last month calling for joint action to protect the Southern Ocean. Geopolitics, he insisted, “must stop at the water's edge.”

Some critics, however, contend that Kerry, under President Barack Obama, gave up too much in return for Chinese acquiescence on climate — for instance, by soft-pedaling human rights—and they fear a Biden presidency may make the same mistake. “Sending Kerry to negotiate with Chinese President Xi Jinping on climate is a recipe for returning home dressed in a barrel,” said the Wall Street Journal editorial page recently -- typically not a fan of the Obama administration.

But U.S. public attitudes on China have hardened since the Obama days and few now expect a Biden White House will go any easier on China over contentious issues like Uyghur detention camps or the militarization of the South China Sea. Indeed, Biden's expected choice to head the Pentagon, Michele Flournoy is “very much the hawk” Bloomberg says.

So, it is increasingly clear that strategic rivalry is now hard-wired into the U.S.-China relationship, and there's a growing acknowledgment by figures in both Washington and Beijing that—while it can be mitigated—it's unlikely to be resolved readily by any effort to get along.

Certainly, Chinese leaders are digging in for protracted hostilities, so much so that President Xi Jinping is reorienting the entire economy toward “self-reliance,” fearing continued U.S. tariffs, technology embargoes and financial sanctions. In congratulating Biden on his win, President Xi Jinping alluded to these gathering tensions, but also the need to manage them.

The official Xinhua News Agency quoted Xi as saying he “hopes that the two sides will uphold the spirit of non-conflict, non-confrontation, mutual respect and win-win cooperation, focus on cooperation, manage differences [and] advance the healthy and stable development of China-US ties.”

Pandemic control is an obvious area of collaboration, Bloomberg says, along with mass migration and financial stability. On climate, says Fu Ying, a former Chinese ambassador and vice foreign minister, “the world expects China and the U.S. to play a leading role and the two countries have a lot to work on together.”

While Kerry won't save the U.S.-China relationship, at least not all by himself, but one could argue that a joint effort to save the planet would increase the odds that the two countries will avert disaster, Bloomberg concludes.

So, nobody thinks Kerry's task will be easy. While trade tensions and China's retaliatory tariffs slashed US agricultural exports to China in 2018 and 2019, China's agricultural purchases from the rest of the world continued apace and it has become the world's largest agricultural importer, USDA said last fall. It is surpassed both the European Union and the United States in 2019 with imports totaling $133.1 billion.

What's more, the composition of China's imports is also rapidly changing. Whereas bulk commodities once dominated, higher-valued consumer-oriented products are now surging ahead, eclipsing the former for the first time in 2019. And, while implementation of the U.S.-China Economic and Trade (Phase One) Agreement and the economic response to Covid-19 currently overshadows the trade landscape, the biggest challenges facing U.S. agricultural exports in China may be a combination of competition from other suppliers and US agriculture's ability to meet China's increasingly diverse import needs, USDA said.

It sees a combination of rising income and living standards, increasing urbanization, and food safety concerns fueling China's future agricultural imports, already a strong trend since the country's accession to the World Trade Organization in 2001. As incomes rose, the average Chinese diet changed to include more meat, dairy, and processed foods, while grain consumption declined. Between 2000 and 2019, per capita consumption of poultry meat increased 32%, soybean oil consumption more than quadrupled, and fluid milk intake more than tripled, USDA said.

So, Kerry's job will be challenging. U.S. producers can be expected to compete strongly for China's growing markets and China will clearly need access to U.S. production to satisfy its growing consumer demand. Whether this “two way street” of trade flows can overcome the enormous bitterness arising from all the other competitive areas -- and the long history of clumsy postures on both sides remain