House Sends PAYGO Measure To Senate

A bill to avert Medicare, farm program, other mandatory program spending cuts was approved by the House on Friday, passing on a vote of 246-175. The measure waives statutory requirements to offset the $1.86 trillion COVID aid law and extending the suspension of separate Medicare cuts another nine months, as well as any potential cuts to mandatory farm program spending.

Ultimately, 29 Republicans voted with all Democrats to pass the bill. The bill also would make several other changes to the aid/stimulus law, including a correction aimed at ensuring that hospitals serving a disproportionate share of uninsured patients are not penalized for receiving additional aid.

The bill preserves special rules for disproportionate share hospitals in California, allowing them to claim funding up to 175% of their costs.

It is not clear whether the Senate will approve the plan or if the action will be included in another must-pass bill later.

Tuesday Watch List

Markets

A report on February new home sales is due out at 9 a.m. CDT Tuesday. Traders will be checking the latest weather forecasts, watching for any export sales news that develops and will keep an eye on soybean oil after its limit-up close on Monday.

Weather

Rain is in store Tuesday from the central Plains through western, central and southern Midwest and Delta. Continued dryness easing and soil moisture recharge will occur with this rain. Northern Plains areas in drought continue to be bypassed by the precipitation. A system bringing snow to the Intermountain West looks to track southeast toward the southern Rockies later this week.

House Passes Ag Workforce Bill

The U.S. House of Representatives passed the Farm Workforce Modernization Act last week. The vote was 247-174, with 30 Republicans siding with 217 Democrats voting in favor of the bill. The Hagstrom Report says the act would give farmworkers in the United States without legal documents a way to gain legal status. The House also passed the American Dreamers and Promise Act, which would allow young people who entered the U.S. as children without legal status to stay in the country. “Farmworkers are vital to the wellbeing of our country and our economy,” says President Joe Biden. “For generations, farmworkers across America, many of whom aren’t in the country legally, have worked countless hours to feed our nation and ensure our communities are healthy and strong.” He says that’s even more clear because of COVID-19. Democrat Zoe (ZOH-ee) Lofgren of California is a primary sponsor of the Ag Workforce Bill. She says stabilizing the ag labor supply will protect farmers and our future supply of food. “The act accomplishes this by providing a path to legal status for farmworkers and updating and streamlining the H-2A temporary worker visa program.” She says it also ensures fair wages and working conditions for all workers.

Groups Respond to House Passage of Farm Workforce Act

Some of America’s prominent agricultural leaders and organizations responded to the House passage of the Farm Workforce Modernization Act. National Milk Producers Federation CEO Jim Mulhern says, “Nothing gets done if we can’t move forward. The broad industry and bipartisan support for House passage of the act shows that we can achieve consensus.” National Farmers Union President Rob Larew says the legislation will create a more functional and compassionate farm labor system. “It will allow more flexibility for agricultural employers, as well as strengthen protections for agricultural workers and provide them a path to citizenship.” Tom Stenzel, President and CEO of United Fresh, says, “This will stabilize our current workforce and make improvements to ensure that a future workforce can meet the growing needs of our industry.” House Ag Committee Chair David Scott of Georgia says, “A stable supply of labor is essential for our U.S. agriculture industry to help it thrive in the face of the ongoing competition. I will continue to work with stakeholders and our colleagues in the Senate to make improvements to this needed legislation.”

Aircraft Dispute Still Threatens U.S. Wheat Trade with EU

U.S. wheat farmers and customers on the other side of the Atlantic Ocean applauded a temporary truce in the tariff war between the U.S. and European Union. The cross-Atlantic dispute is centers around an unrelated case regarding aircraft subsidies. The 25 percent retaliatory tariff on U.S. hard red spring wheat imports into the U.K. and European Union are suspended for four months, temporarily reopening trade. The temporary break in the tariff comes as Katherine Tai got confirmed as the new U.S. Trade Representative. The dispute goes back to 2004 when the U.S. challenged E.U. subsidies for Airbus, and the E.U. followed suit with a challenge against certain states’ support for Boeing. After years of back and forth, the U.S. and E.U. received authorization to apply retaliatory tariffs in 2020. While the reprieve is welcomed by U.S. wheat producers, many are still cautious. Dalton Henry, Vice President of Policy for U.S. Wheat Associates, says both sides are dug in and the four-month window for the tariff suspension may not be long enough to solve the dispute. The U.K.’s recent departure from the E.U. further complicates the dispute’s outcome. The U.K. has made it clear they want the dispute resolved, offering in December to unilaterally drop its retaliatory tariffs on U.S. goods as an act of goodwill.

Soybean Sales Drop While Grain Sales Higher

The U.S. Department of Agriculture says export sales of soybeans plunged while grain sales rose higher week-to-week. An agency report says soybean sales in the seven days ending on March 11 totaled 202,400 metric tons, down 42 percent week-to-week and 31 percent from the prior four-week average. China bought the largest number of soybeans, only totaling 71,500 metric tons. Bangladesh was next at 57,100 tons, followed by Japan. Totals would have been higher, but an unknown country canceled cargoes totaling 123,200 metric tons. Exports came in at 534,100 tons, 24 percent lower than the prior week. Corn sales last week came in at 985,900 metric tons, with Mexico the largest buyer at 285,500 tons, followed by Colombia and South Korea. Exports reached a marketing-year high of 2.2 million metric tons. Wheat sales through March 11 reached 390,100 metric tons, 18 percent higher than the previous week and 40 percent from the average for this time of the year. China was the main buyer at 132,300 metric tons. Mexico and Taiwan rounded out the top three wheat buyers. Unknown destinations canceled shipments of 215,800 tons, while exports for the week came in at 662,300 tons.

Weather Challenges for Chinese Crops

China is the number one producer of rice, wheat, potatoes, and many other commodities. However, it trails U.S. corn production by 42 percent. Chinese corn production set a record in 2015, but since then, it’s been too wet or too hot in the country’s three major corn-producing regions. 2019 was one of the wettest years in the past two decades across China. It was followed by near-record-hot conditions in 2020. A Successful Farming article says 2021 is looking at a big change in weather conditions with things trending much drier for most of China’s corn-growing season. The weather will be out of sync as the early spring looks cold and wet, likely delaying the start of planting. The core summer months in China will be much drier, trending toward some of the driest weather in over a decade. There might be enough soil moisture to carry some crops through the season, but there will no doubt be a fair amount of risk that will likely have traders searching through weather maps. Chinese farmers are less likely to have the yield-producing hybrids that farmers in America can access.