U.S. farmers sentiment weakened following the November 2020 elections. The Purdue University-CME Group Ag Economy Barometer fell 16 points from a month earlier to a reading of 167. Although this month’s reading was nearly equal to the pre-pandemic high set back in February, it was nine percent lower than the reading taken just two weeks before the 2020 elections. Organizers say the decline resulted from weakened expectations for the future, as the Index of Future Expectations declined to a reading of 156 in November, 30 points below the October reading. On the other hand, farmers perception of current conditions on their farms improved. The Index of Current Conditions, lifted by the ongoing rally in agricultural commodity prices, rose by nine points from October to November, setting a record high for the index of 187. However, farmers have concerns about future regulation impact on agriculture, potential higher estate taxes, and reduced support for the ethanol industry.
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Wednesday, December 2, 2020
Growth Energy Intends to Sue EPA Over 2021 Blending Targets
Growth Energy Tuesday submitted a notice of intent to sue the Environmental Protection Agency. The notice is in response to the EPA's failure to fulfill its statutory obligation to issue the 2021 Renewable Volume Obligation by November 30, 2020, an annual deadline set by the Renewable Fuel Standard. The notice gives EPA 60 days to issue the 2021 RVO before risking a lawsuit in federal court. Every year, EPA is required to set the RVO so that biofuel and fossil fuel companies understand their total renewable fuel blending obligations for the following year. Failure to set the RVO undermines the RFS and could lead to uncertainty in the market and lower than necessary biofuel blending levels. Growth Energy CEO Emily Skor says EPA’s failure to meet their statutory obligation to issue RVOs “piles on the uncertainty in the fuel marketplace.” However, EPA Administrator Andrew Wheeler has previously said the announcement would be delayed, pending the outcome of a challenge to the Supreme Court by the oil industry.
House Ag Chair Nomination Thursday
House lawmakers will nominate the next House Agriculture Committee Chair Thursday. A committee spokesperson confirmed leadership will decide who to back for the position, according to the Hagstrom Report. The two candidates being considered are David Scott, a Democrat from Georgia, and Jim Costa, a Democrat from California. Scott is next in line, seniority wise, and endorsed by outgoing chairman Collin Peterson. Peterson, a Democrat from Minnesota, lost his reelection bid. Once the 117th Congress is seated early next year, the full chamber will vote on leadership candidates. Representative Marcia Fudge was also considering the leadership position, but is in the running to be the next Secretary of Agriculture. Other reported Agriculture Secretary candidates include former North Dakota Senator Heidi Heitkamp, and Obama-era Agriculture Secretary Tom Vilsack. Robert Bonnie is leading the Agriculture Department transition team for the Biden administration. Bonnie served as undersecretary for Natural Resources and Environment at USDA during the Obama Administration.
USDA Reopens Comment Period for FMD Vaccine
The Department of Agriculture Tuesday reopened a comment period regarding a petition from a vaccine manufacturer seeking approval to produce a foot-and-mouth disease vaccine. The comment period was announced by USDA’s Animal and Plant Health Inspection Service for an additional 30 days. The vaccine consists of a modified non-infectious and non-transmissible strain of the virus on the U.S. mainland. Although introduction of live FMD virus into the United States is prohibited by law, the petition states that this strain should not be considered live FMD virus as it is non-infectious, non-transmissible, and incapable of causing FMD. Public comments will be accepted through January 21, 2021, via the federal register. FMD is a severe and highly contagious viral disease affecting cows, pigs, sheep, goats, deer, and other animals with divided hooves. It was eradicated from the United States in 1929, but if it were to infect the U.S. livestock industry, it would likely cause devastating economic effects.
Lawmakers Seek Reauthorization of WHIP for 2020 Wildfires
A Group of Representatives from Western states last week introduced a bill to reauthorize the Wildfire and Hurricane Indemnity Program Plus, known as WHIP+, for 2020 natural disasters. The WHIP+ program offers critical assistance to agricultural producers, including grapegrowers, whose crops were impacted by smoke taint. House Democrat Mike Thompson of California says, “This bipartisan bill activates the WHIP+ program for these 2020 fires and helps these growers hit hard by disasters.” Republican Representative Dan Newhouse of Washington state adds, "WHIP+ will help our winegrape growers recover from the damages of this year’s catastrophic wildfires.” WHIP+ can cover losses from flooding, hurricanes and wildfires, are any named natural disaster. Reactivating WHIP+ for 2020 is a priority for the American Farm Bureau Federation. AFBF is also calling on Congress to allow farmers and ranchers impacted by the Midwest derecho storm to be included in the program. The derecho, not being a named disaster, doesn’t qualify under the current program rules.
GROWMARK Holds First Virtual Annual Meeting
It’s a normal sign of the times, virtual events, but you can add GROWMARK to the list of companies holding their first. The company held a virtual annual meeting Tuesday for more than 1,000 attendees. Normally the GROWMARK Annual Meeting happens every August at the Hilton Chicago, but to comply with Illinois mitigation measures, the decision was made to hold it virtually after the fiscal year closed on August 31. Holding the meeting in December allowed for audited financial results to be presented in full, and also brings an update after the acquisition of certain Southern States Cooperative agronomy and energy assets. Despite the challenges from COVID-19, a devastating derecho storm in key Midwest markets, and energy volatility in the markets, financial performance was respectable with strong earnings from operations. GROWMARK was able to distribute nearly $66 million in patronage distributions to shareholders this year. GROWMARK is an agricultural cooperative serving almost 400,000 customers across North America, Headquartered in Bloomington, Illinois.
Washington Insider: Powell Helped Boost Labor Benefits
President-elect Joe Biden will work to reverse the decades-long trend that has seen workers claim an ever-decreasing share of the U.S. economic pie. A Bloomberg report asserts that no matter which political party ends up controlling the Senate, Biden likely will continue to work toward higher returns for labor and could look to a Republican for continued support: Federal Reserve Chairman Jerome Powell.
From a higher minimum wage and increased power for unions to bigger taxes on capital gains and the wealthy, Biden has outlined an ambitious agenda to lift labor's share of the income the economy generates.
“It's time to reward work, not just wealth, in America,” Biden told reporters after a Nov. 16 meeting with union and corporate leaders to discuss the coronavirus pandemic's effect on the economy.
The trouble for the president-elect is that much of his program hinges on whether Democrats take control of the Senate, something that won't be known until early January after run-off elections for Georgia's two seats. If the Democrats fall short – as many political analysts expect – Biden will have to largely fall back on executive and regulatory actions to try to tilt the playing field toward workers.
Current Fed chair Powell also has been committed to returning the labor market to better times when unemployment was at a 50-year low of 3.5% and a wide swath of workers were enjoying wage gains. And Powell overhauled the central bank's strategic framework to help bring that about.
That objective is also backed by Biden's reported pick for Treasury secretary, Janet Yellen, and it is likely to endure even if Powell isn't re-nominated for a second term when his current one ends in February 2022, Bloomberg says.
Bloomberg says that Biden's economic team likely will take a significant step this week toward addressing the damage to the U.S. economy inflicted by the coronavirus pandemic. In addition, Biden has called for trillions of dollars in new stimulus to aid the fundamentally important small and mid-size businesses.
As his future staff is filled out, he is expected to name longtime Democratic policy staffer Neera Tanden to lead his Office of Management and Budget and Cecilia Rouse to head the Council of Economic Advisers (CEA).
Tanden's nomination already appears to be in trouble with Senate Republican aides expressing opposition before it was formally announced. Drew Brandewie, an aide to Sen. John Cornyn, R-Texas, said on Twitter that she “stands zero chance of being confirmed.” Another aide said Republicans in the Senate would certainly block Tanden, who's viewed as too progressive even though she's also had squabbles with some on the left.
Biden's picks for his economic team suggest he will make it a “special priority” to lift the fortunes of Black and lower-income Americans whose gains in recent years have been endangered by the coronavirus pandemic.
As for Rouse, who is to be named the head of the CEA, Bloomberg says she would become the first Black American in the position. Jared Bernstein and Heather Boushey, two progressive economists who have argued for the Federal Reserve to target the Black unemployment rate and for increasing the minimum wage, are expected to join Rouse as members of the CEA.
However, not all the activity was from the president-elect. President Trump formally nominated Brian Brooks to take over a key banking regulatory position. In a brief Friday statement, the White House said it had sent the nomination to the Senate, where Senate Banking Committee Chairman Mike Crapo, R-Idaho, has already signaled that Brooks would get a confirmation hearing for a five-year term leading the Office of the Comptroller of the Currency. Brooks has been acting OCC chief since May.
Trump's highly unusual move to try to install an industry-friendly watchdog at the end of his administration has been blasted by Democratic lawmakers who argue the president is refusing to accept the results of this month's election.
If Crapo succeeds in fast-tracking Brook's confirmation, Biden would then have to decide whether to remove him after the Jan. 20 inauguration. While the law indicates Biden can oust Brooks, such authority has never been used before. Biden's acting Treasury Secretary could immediately remove Brooks if he fails to win Senate approval.
So, we will see. Clearly these are very high stakes decisions that will continue until the new administration is fully defined and can turn its attention to governing. These nominations will include a number of positions in USDA which have not yet been indicated, in spite of a good bit of interest and discussion — debates producers certainly will watch closely as they emerge, Washington Insider believes.