Evening Report | March 28, 2023

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U.S. intelligence: Ukraine laden with land mines, especially ag areas... Ukraine has the most land mines throughout their country, and especially in key agriculture regions. That means the country will increasingly become dependent on some imports and humanitarian aid. And Ukraine will no longer be the “breadbasket of Europe.” Other countries will have to seek imports elsewhere.

Perspective: Russian President Vladimir Putin’s plan all along has been to reduce grain production and exports in Ukraine and boost them in his country.

Belarus replaces grain export ban with licensing... The Belarusian government as of March 29 will implement the licensing of grain exports for six months in order to replace the previous ban on exporting grain that has been in force, according to Interfax news agency. It reports the Ministry of Anti-monopoly Regulation and Trade (MART) will begin issuing one-time licenses for exporting grain in agreement with the local authorities. Export licensing applies to wheat, rye, barley, oats, corn, buckwheat, millet, triticale, other cereals, as well as ground grain, sunflower seeds, rapeseed, and a number of other items.

The Belarusian government in March of last year imposed a six-month ban on exporting grain, which it extended for another six months in September.

GAO: Departments need to improve job of measuring progress to spur SAF production... A new Government Accountability Office report says the Transportation, Energy and Agriculture Departments should do a better job of measuring the progress of their work to spur the production of 3 billion gallons of Sustainable Aviation Fuel (SAF) by 2030.

SAF is alternative jet fuel made from renewable and waste feedstocks that can reduce greenhouse gas emissions on a lifecycle basis. SAF production and use in the U.S. has increased in recent years; this fuel is now used by airlines at two major commercial airports in California. While U.S. production reached 15.8 million gallons in 2022, it accounted for less than 0.1% of the total jet fuel used by major U.S. airlines. This also falls well below the previous Federal Aviation Administration goal for U.S. airlines to use 1 billion gallons of SAF per year by 2018.

Transportation and Agriculture concurred. Energy indicated the recommendation is completed and that planned roadmap activities will enable progress to be measured. As discussed in the report, GAO disagrees that the recommendation is completed.

Good trade deficit widens... The U.S. trade deficit in goods widened slightly to $91.63 billion in February 2023 from a revised $91.09 billion the previous month, amid weakening global demand due to a rising cost of living and higher borrowing costs, an advance estimate showed. Exports fell 3.8% due to declines in sales of vehicles (-11.9%), consumer goods (-4.6%), industrial supplies (-4.2%) and capital goods
(-2.5%). Meanwhile, imports dropped at a slower 2.3% on lower purchases of vehicles (-7.1%), consumer goods (-5.6%) and foods, feeds & beverages (-3.4%).

Hog herd contraction expected to have ended... USDA’s Hogs & Pigs Report on Thursday afternoon is expected to show the hog herd was fractionally bigger than last year as of March 1, according to a Reuters survey of analysts. All hogs and pigs are expected to be up 0.2%, with the market hog inventory 0.2% bigger and the breeding herd 0.5% larger than last year. The winter pig crop is also expected to be 1.2% larger than last year, while producers are likely to indicate they intend to marginally increase spring and summer farrowings. 

Global economy’s prospects are getting dimmer... A new report from the World Bank says declining growth in productivity, investment and the labor force are combining to lower the potential pace at which the economy can expand without sparking excessive inflation. Potential gross domestic product growth is expected to slow to 2.2% by 2030, the slowest in three decades and well below the 3.5% pace at the start of the century and 2.6% in the decade preceding the Covid-19 pandemic. “The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world,” World Bank President David Malpass warned.

Renewables surpassed coal power generation... More electricity was generated in the U.S. last year from renewable sources than from burning coal for the first time, according to the Energy Information Administration. Renewable energy sources, including wind, solar, hydropower and biomass, accounted for some 22% of electricity generation last year, up from about 12% a decade ago.