U.S. Inflation Eases More Than Expected in October on Falling Gasoline and Used Car Prices

Farm Journal
Farm Journal
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Johnson to consider two-step CR under suspension of the rules


Headers_111423


 

Today’s Digital Newspaper

 

MARKET FOCUS

  • Annual inflation rate in U.S. slowed to 3.2% in October 2023
  • Core inflation also slightly weaker than economists predicted
  • Analysts cut their projections for fourth-quarter earnings at companies in S&P 500
  • U.S. opens FY 2024 with slightly smaller monthly deficit
  • Retail supply chains experiencing shift in hiring trends, signaling lack of holiday cheer
  • Euro strengthened to $1.08, marking its highest level since early September
  • Glencore to acquire 77% stake in Teck Resources' coal business for $6.93 billion
  • California bridge fire could impact goods transit from ports
  • Australia's ports face 30,000 container backlog after cyberattack
  • Global Port Tracker estimates container imports into major U.S. ports fell 4.2%
  • Panama Canal facing significant challenge due to lack of rainfall
  • Ag markets today
  • USDA daily export sale: 101,745 MT corn to Mexico during 2023-2024 marketing year
  • Thailand's cabinet approves aid package for rice producers
  • Raw sugar futures trading close to 12-year high
  • Ag trade update
  • NWS weather outlook
  • Pro Farmer First Thing Today items

 

CONGRESS

  • Johnson to consider two-step CR under suspension of the rules
  • Schumer signals support for two-step CR; House Dems mulling
  • Two-step CR includes 2018 Farm Bill extension, funding for ‘orphan’ programs

 

ISRAEL/HAMAS CONFLICT 

  • Israeli troops reached at least one of the gates of Gaza’s largest hospital
     

RUSSIA & UKRAINE

  • Ukraine's grain exports through Black Sea corridor reach nearly 4 MMT since Aug.
  • Ukraine grain exports as of Nov. 6 in 2023-24 marketing year: 9.8 million metric tons
     

POLICY

  • ERP payments see slight increase
  • No payments issued under newly launched ERP 2022 program
     

CHINA

  • China to halt cotton reserve sales
  • Biden and Xi to announce agreement on fentanyl crackdown
     

TRADE POLICY

  • White House postpones details of Indo-Pacific Economic Framework for Prosperity
  • Biden, AMLO to meet
     

ENERGY & CLIMATE CHANGE

  • Boston pulls out of a pilot program to ban fossil fuels in buildings
  • Biden administration extends arctic oil plan review amid criticism
  • U.S. climate report warns of worsening crisis amid continued fossil fuel use
  • Exxon Mobil diversifying its business by venturing into lithium mining
     

LIVESTOCK, NUTRITION & FOOD INDUSTRY

  • Tyson foods reports sales decline in Q4 2023
  • USDA publishes final rule on imports of beef from Paraguay
  • FDA to intensify focus on food chemicals and additives amid reorganization
     

POLITICS & ELECTIONS

  • Nate Silver skeptical about Biden's ability to run for re-election in 2024
  • Trump considering a mass detention and deportation for undocumented immigrants
     

OTHER ITEMS OF NOTE

  • Supreme Court releases its first-ever code of conduct
  • Syngenta pays $280,000 fine in Ark. for failing to report ownership of research farm
     

MARKET FOCUS


— Equities today: Asian and European markets were mixed to firmer in overnight trading. U.S. Dow opened up around 355 points higher. In Asia, Japan +0.3%. Hong Kong -0.2%. China +0.3%. India closed. In Europe, at midday, London -0.4%. Paris +0.1%. Frankfurt +0.4%.

     U.S. equities yesterday: U.S. stock indices ended narrowly mixed after a session saw all three trade in positive territory but the Dow was the only one able to end higher. The Dow was up 54.77 points, 0.16%, at 34,337.87. The Nasdaq lost 30.36 points, 0.22%, at 13,767.74. The S&P 500 fell 3.69 points, 0.08%, at 4,411.55.

— Analysts cut their projections for fourth-quarter earnings at companies in the S&P 500 by 3.9% in October, according to FactSet, more than twice the 10-year average of 1.8%. That marks the deepest reduction during the first month of a quarter in more than three years.

— Agriculture markets yesterday:

  • Corn: December corn rallied 13 1/4 cents to $4.77 1/4, marking the highest close since Nov. 3.  
  • Soy complex: January soybeans soared 35 cents before closing at $13.82 1/2, ending on the session highs. December soybean meal rose $19.70 after trading limit up mid-morning, settling at $469.10. December soyoil rose 34 points to 51.54 cents, closing nearer session highs.  
  • Wheat: March SRW wheat rose 3 cents to $6.02 1/4. March HRW wheat gained 1 1/4 cents to $6.52. Prices closed nearer their session highs. December spring wheat fell 1 3/4 cents to $7.28 3/4.
  • Cotton: December cotton rose 16 points to 77.48 cents, a mid-range close following narrow trade.
  • Cattle: December live cattle rose 75 cents to $174.925 and near mid-range. January feeder cattle gained $1.875 at $228.30 and nearer the session high.  
  • Hogs: December lean hog futures rallied $1.45 before settling at $73.35.
     

— Ag markets today: Soybeans and soymeal led a pullback from Monday’s gains during the overnight session, while corn and wheat saw lighter price pressure. As of 7:30 a.m. ET, corn futures were trading mostly 3 cents lower, soybeans were 9 to 11 cents lower, winter wheat markets were 2 to 4 cents lower and spring wheat was fractionally to a penny lower in most contracts. Front-month crude oil futures and the U.S. dollar index were both modestly weaker this morning.

     Cattle futures firm but traders still cautious. Cattle futures posted corrective gains on Monday, though buyer interest was limited by the nearly $5.00 plunge in the average cash cattle price last week and trepidation ahead of Friday’s Cattle on Feed Report. The bearish placements figure in the October Cattle on Feed Report was the catalyst for the heavy liquidation pressure over the past month. Traders will likely wait on signs of a low in the cash market and until after Friday afternoon’s report before actively buying futures.

     Traders actively narrow hog futures discount. December hog futures firmed $1.45 on Monday. The CME lean hog index is down 23 cents today to $76.05 as of Nov. 10. That narrowed the discount in the lead month contract to $2.70. For December hogs to actively extend higher, the cash index is going to need to show signs of an early seasonal low

— Quotes of note:

  • National debt warning. Former New York Fed President Bill Dudley suggests that the U.S. is on an unsustainable financial path, with interest payments on the national debt increasing by 87% in October compared to the previous year.
     
  • "This is a long-overdue step by the justices." — Sen. Sheldon Whitehouse (D-R.I.), after the Supreme Court issued its first-ever code of conduct Monday.
     
  • “The peak season holiday hiring is nothing like it had been in previous years.” — Brian Devine, CEO of warehouse-staffing agency Ignite Industrial Professionals.
     

— Annual inflation rate in the U.S. slowed to 3.2% in October 2023 from 3.7% in both September and August, and below market forecasts of 3.3%.

     Core inflation — which strips out volatile food and energy prices — was also slightly weaker than economists had predicted, dipping from 4.1% to 4.0% on a year on year basis. Core inflation rose by 0.2% month on month.

     Energy costs dropped 4.5% (vs -0.5% in September), with gasoline declining 5.3%, utility (piped) gas service falling 15.8% and fuel oil sinking 21.4%.

     Additionally, prices increased at softer rates for food (3.3% vs. 3.7%), shelter (6.7% vs. 7.2%) and new vehicles (1.9% vs. 2.5%) and continued to decline for used cars and trucks (-7.1%).

     Prices rose faster for apparel (2.6% vs. 2.3%), medical care commodities (4.7% vs. 4.2%), and transportation services (9.2% vs. 9.1%)

     Compared to September, the CPI was unchanged, the least in fifteen months, and below forecasts of a 0.1% rise, mainly due to lower gasoline prices.

     CPI_1023
     CPI_Core

— U.S. opens FY 2024 with slightly smaller monthly deficit. In October, the U.S. gov’t recorded a monthly deficit of $66.6 billion, which was slightly larger than anticipated but represented an improvement compared to the $88 billion deficit in October 2022. This improvement was due in part to a boost in gov’t receipts, reaching a record high of $403 billion. These increased receipts were partly attributed to tax payments from Californians who had deferred their tax bills due to severe late-winter storms.

     On the expenditure side, government outlays also increased, reaching $470 billion, compared to $406 billion in the same month the previous year. Notably, interest payments on the national debt experienced a substantial surge, rising to $88.9 billion in October, up from $47.6 billion in the same month of the previous year.

     Of note: It was the smallest October deficit since 2017.

— Retail supply chains are experiencing a shift in hiring trends, signaling a potential lack of holiday cheer this year. Compared to recent years when businesses struggled to hire seasonal workers for tasks like stocking shelves and handling year-end deliveries, there is now a reduced need for extra staff. According to Challenger, Gray & Christmas, the number of advertised seasonal job positions has reached its lowest point in a decade.

     The National Retail Federation estimates that this year's seasonal workforce will range between 345,000 and 445,000 workers, marking a potential decrease of up to 40% compared to the recent high in 2021.

     In the logistics sector, companies such as United Parcel Service (UPS) and XPO are maintaining hiring at the same levels as last year, while others are bringing on fewer seasonal workers than in the previous year.

     Labor Department data also reveals a 14.6% decrease in job openings in the warehousing, transport, and utilities sector in September compared to the same period the previous year.

     Bottom line: These trends suggest a shift in hiring dynamics within retail supply chains during the holiday season.

Market perspectives:

— Outside markets: The U.S. dollar index was weaker, with the euro and British pound firmer against the greenback. The yield on the 10-year U.S. Treasury note was lower, trading around 4.62%, with a weaker tone in global government bond yields. Crude oil futures were little changed, with U.S. crude around $78.25 per barrel and Brent around $82.50 per barrel. Gold and silver futures were narrowly mixed ahead of CPI data, with gold weaker around $1,950 per troy ounce and silver firmer around $22.44 per troy ounce.

— The euro strengthened to $1.08, marking its highest level since early September. This surge was driven by investors selling off the U.S. dollar after data revealed that the U.S. inflation rate in October had slowed more than anticipated. Earlier, the euro had already gained ground due to better-than-expected German investor confidence in November, reaching positive territory for the first time since April. ECB President Christine Lagarde reaffirmed that interest rates would remain restrictive for several quarters. Additionally, a Bloomberg survey suggested the possibility of Eurozone inflation dipping below the ECB's 2% target by early 2025, which is earlier than previously predicted. This could lead to an initial rate cut in June 2024, a shift from the previously expected date of September.

— Glencore Plc reached an agreement to acquire a majority stake of 77% in Teck Resources Ltd.'s coal business for $6.93 billion. This deal brings an end to a prolonged process and also paves the way for Glencore to eventually exit the coal business. Link to details via Bloomberg.

— California bridge fire could impact goods transit from ports. A fire deliberately set under Interstate 10 in Los Angeles has raised concerns about the transit of goods from the ports of Los Angeles and Long Beach. The extent of damage to the roadway is still being assessed, and it remains unclear whether it can be repaired or if a complete reconstruction will be necessary. While the fire has caused significant disruptions for commuters, there is also worry about its potential impact on the movement of goods.

     Federal Highway Administrator Shailen Bhatt acknowledged that this situation won't be quickly resolved, and it's uncertain whether it will take weeks or months. Despite the challenges, the ports of Los Angeles and Long Beach are still operational, and goods are continuing to move. However, the removal of a section of the interstate, which typically handles 300,000 vehicles a day, is expected to have spillover effects. The priority is to expedite the reopening of the roadway to minimize impediments to the flow of goods.

— Australia's ports face 30,000 container backlog after cyberattack. Australia's ports, including those in Melbourne, Sydney, Brisbane, and Fremantle, are grappling with a backlog of 30,000 shipping containers following a cyberattack on DP World, which led to a temporary shutdown of operations.

— The Global Port Tracker estimates container imports into major U.S. ports fell 4.2% in October from the same month last year.

     Container imports

— Panama Canal is facing a significant challenge due to a lack of rainfall, resulting in the depletion of a crucial lake that supplies the canal. October marked the driest month since record-keeping began in 1950. This water shortage is leading to reduced traffic through the canal.

     By February, it is expected that only 18 ships per day will be able to traverse the canal, which is roughly half the number from the previous year. This situation affects virtually every type of commodity and manufactured product, but it is particularly critical for the energy sector. In the previous year, nearly half of the goods, measured by weight, passing through the canal's locks consisted of oil and gas-based products. These products include diesel, gasoline, and liquefied petroleum gas (LPG), and the global energy supply chain heavily relies on the canal for their transportation.

     This issue becomes even more relevant as the U.S. is exporting propane, a type of LPG commonly used in barbecues and outdoor heaters, at record levels. In October, propane shipments reached a record of 2.1 million barrels per day, up significantly from an average of approximately 1.3 million barrels per day in 2022, as per data from the U.S. Energy Information Administration.

     Panama Canal

— USDA daily export sale: 101,745 MT corn to Mexico during 2023-2024 marketing year.

— Thailand's cabinet approved a 56-billion-baht ($1.55 billion) aid package for rice producers, providing 1,000 baht for each rai of land (0.16 hectares) owned by farmers, up to a maximum of 20 rais. This financial assistance is designed to support approximately 4.68 million farmers and comes in addition to a previously approved loan program totaling 55 billion baht.

     Additionally, the government has given the green light for a 10% increase in the domestic sugar price. This decision aims to assist sugarcane producers who are facing higher production costs. Thailand is the world's second-largest sugar exporter and has experienced reduced sugar production this year due to drought conditions, resulting in an estimated production of 8 million metric tons (MMT). Out of this, 2.5 MMT will be used domestically, while 5.5 MMT is earmarked for export. In the previous year, Thai sugar exports amounted to 7.69 MMT.

— Raw sugar futures are currently trading at 27.6 cents per pound, remaining close to a 12-year high of 28 cents reached on Nov. 6. This surge in sugar prices is driven by concerns over supply from major producers.

     India, the world's second-largest sugar producer and exporter, has been facing droughts due to El Niño weather conditions, negatively impacting cane yields in key regions like Maharashtra and Karnataka. As a result, the Indian government has extended export restrictions indefinitely, raising the possibility of further reductions in export quotas, which had already reached 6 million tons in the previous marketing year.

     Brazil, the world's top sugar producer and exporter, is also facing bottlenecks in its ports, limiting the amount of sugar it can sell to foreign markets.

     Furthermore, rising fuel costs have prompted cane crushers to prioritize more profitable ethanol production over raw sugar, further constraining the supply of sugar.

     All these factors combined have contributed to the elevated sugar prices in the market.

— Ag trade update: Japan is seeking 104,677 MT of milling wheat in its weekly tender. The Philippines tendered to buy 30,000 MT of feed wheat from unspecified origins. Jordan made no purchases in its tender to buy up to 120,000 MT of milling wheat.
— NWS weather outlook: Cool temperatures and beneficial rains to continue to focus across portions of the Gulf Coast states through the middle of the week... ...Very heavy rainfall and a threat of urban flash flooding will be a concern for portions of southern Florida on Wednesday... ...Mild air will continue in place across much of the Intermountain West and stretching east across the Plains, Midwest, and Ohio Valley this week.

     NWS_111423

Items in Pro Farmer's First Thing Today include:

     • Grains pull back overnight
     • Cordonnier cuts Brazilian crop estimates
     • HRW CCI declines, SRW rating improves
     • Crop progress report highlights
     • France trims wheat crop estimate

 

CONGRESS

— Johnson to consider two-step CR under suspension of the rules. Support for House Speaker Mike Johnson's (R-La.) "two-step CR" (Continuing Resolution) was weak among House Republicans, leading to the decision to consider the bill under suspension of the rules. This process requires a two-thirds majority for passage, or 290 yes votes. Some 50 House Republicans are expected to vote against the CR, but the exact scale of opposition will become clearer after the GOP conference meeting today. House Minority Leader Hakeem Jeffries (D-N.Y.) and other senior Democrats are also cautious and want to consult with their party members before committing to this maneuver. While Democrats don't love the GOP plan, they want to avoid a government shutdown.

     Of note: One challenge for Johnson is the possibility that more Democrats may vote in favor of the bill than Republicans. This situation could have political repercussions for him.

     The two-step: Under the two-track temporary compromise, the House would extend funding for military construction, veterans’ benefits, transportation, housing, urban development, agriculture, the Food and Drug Administration and energy and water programs through Jan. 19. Funding for all other federal operations, including defense, would expire on Feb. 2.

     President Biden hasn’t said what he would do if the bill came to his desk. “I’m not going to make a judgment on what I’d veto or what I’d sign. Let’s wait and see what they come up with,” he said Monday.

     Don’t forget: The CR measure includes a 2018 Farm Bill extension through September 2024 and funding for 21 “orphan” programs paid for via biorefinery programs.

— Schumer welcomes House Speaker Mike Johnson's plan to avert government shutdown. Senate Majority Leader Chuck Schumer (D-N.Y.) on Monday said he is “pleased” with Speaker Mike Johnson’s (R-La.) plan to avoid a government shutdown. Schumer said Johnson’s “laddered” stopgap spending bill — which funds four bills through Jan. 19 and the remaining eight through Feb. 2 — is “far from perfect,” but indicated the “clean” measure provides a path to funding the government for the next two months. “For now, I am pleased that Speaker Johnson seems to be moving in our direction by advancing a CR that doesn’t include the highly partisan cuts that Democrats have warned against,” the Democratic leader said on the floor. “The Speaker’s proposal is far from perfect, but the most important thing is that it refrains from making steep cuts,” Schumer continued, adding that it is important that the deadline to fund defense items would come in February.

 

ISRAEL/HAMAS CONFLICT

— Israeli troops reached at least one of the gates of Gaza’s largest hospital where Israel says Hamas conceals a major operations center, while medical staff reported deteriorating conditions inside. A lack of fuel and electricity has halted the hospital’s operations, making it “nearly a cemetery”, according to a spokesperson for the World Health Organisation. Thousands of people are believed to be sheltering within the complex.

 

RUSSIA/UKRAINE

— Ukraine's grain exports through the Black Sea corridor have reached nearly 4 million metric tons since it began operating in August, as reported by Ukrainian President Volodymyr Zelenskyy. He noted that the grain corridor is functioning well, and they are making positive progress.

     Grain exports as of Nov. 6 in the 2023-24 marketing year have reached 9.8 million metric tons, according to data from the Ukrainian Agriculture Ministry, This represents a decrease from the 14.3 million metric tons exported at the same point in the previous 2022-23 marketing year.
 

POLICY UPDATE

— Payments made under the Emergency Relief Program (ERP) have seen a slight increase, reaching a total of $8.24 billion as of Nov. 12, up from the previous week's total of $8.23 billion. Specifically, payments under ERP Phase 2 have risen to $788.02 million, distributed to 10,046 recipients, compared to $783.89 million distributed to 10,024 recipients in the previous week. There are no reported payments issued under the newly launched ERP 2022 program at this time.

 

CHINA UPDATE

— China to halt cotton reserve sales. China will stop auctioning cotton from state reserves from Nov. 15, according to an announcement posted by the China Cotton Reserves Management Company. China started selling state-owned cotton reserves in late July, with strong demand into early fall, though buyer interest has faded recently.

— Biden and Xi to announce agreement on fentanyl crackdown. President Joe Biden and Chinese President Xi Jinping are expected to announce an agreement to crack down on the manufacture and export of fentanyl. Under this deal, according to Bloomberg, China would take action against chemical companies involved in the production of fentanyl and its source materials. In return, the Biden administration would lift restrictions on China's forensic police institute, which has faced allegations of human rights abuses.

     This agreement, set to be announced during their meeting on the sidelines of the Asia-Pacific Economic Cooperation summit, is seen as a significant victory for President Biden, as voters consider the issue of fentanyl trafficking a priority for the 2024 election. Republicans have criticized the administration's handling of fentanyl trafficking, making it a potential liability for Biden's reelection prospects.

     While the deal is viewed as a potential breakthrough, officials emphasize that stringent enforcement is crucial to producing results. The success of the agreement may also depend on the state of U.S./China relations, as any deterioration in ties could threaten its implementation.

     Fentanyl, a synthetic opioid, has been a major contributor to the opioid crisis in the United States, often linked to overdose deaths. Mexican cartels frequently use Chinese components in the production of this drug. Overdose deaths related to synthetic opioids have surged in recent years, making it a pressing public health issue.

 

TRADE POLICY

— White House postponed its announcement of the Indo-Pacific Economic Framework for Prosperity due to push back from Democratic lawmakers. Originally, the Biden administration intended to unveil the trade pact at an international gathering of Asia-Pacific leaders in San Francisco this week. However, concerns raised by Democratic lawmakers, particularly regarding worker protections, have led to the delay of the pact's announcement. Link to details via the New York Times.

— Biden, AMLO to meet. President Biden and Mexican President Andrés Manuel López Obrador will discuss ongoing efforts to strengthen bilateral relations and "address issues of shared concern" during a meeting on Friday in San Francisco, said the White House (link).

 

ENERGY & CLIMATE CHANGE

— Boston pulls out of a pilot program to ban fossil fuels in buildings. More than three years after filing her Green New Deal plan for Boston as a mayoral candidate, Mayor Michelle Wu now says that the city will not be participating in a state program that allows 10 communities to ban fossil fuels in new buildings. Link to details via the Boston Globe.

— Biden administration extends arctic oil plan review amid criticism. The Interior Department is extending the public comment period on a proposal to impose new restrictions on oil development in the National Petroleum Reserve-Alaska. The Bureau of Land Management will now accept comments until Dec. 7, providing a total of 90 days for feedback instead of the originally planned 60. Additionally, the department emphasized that nation-to-nation consultation is not bound by the public comment period and can continue at any time. Proposed federal rules that are not finalized by late spring next year could face a higher risk of repeal under the Congressional Review Act.

— U.S. climate report warns of worsening crisis amid continued fossil fuel use. The Fifth National Climate Assessment, a federally mandated report released recently, highlights that the impacts of the climate crisis are being felt across the entire United States and are projected to worsen in the next decade if fossil fuel usage continues. While the report acknowledges a slow decrease in planet-warming pollution in the U.S., it emphasizes that this reduction is insufficient to meet the nation's climate targets.

     In response to the report, President Biden today is expected to announce over $6 billion in funding aimed at enhancing climate resilience. This funding will focus on strengthening the country's electric grid, improving water infrastructure, reducing flood risks in communities, and advancing environmental justice initiatives.

— Exxon Mobil is diversifying its business by venturing into lithium mining, a sector that competes with traditional fossil fuel production. The energy giant has commenced lithium drilling operations in Arkansas, aiming to produce the mineral for use in electric vehicle (EV) batteries by 2027 and become a major supplier to EV manufacturers by 2030. This strategic move by Exxon is driven by its long-term vision for the rise of EVs and electrification in the transportation industry the Wall Street Journal reports (link).

     However, Exxon's entry into the lithium market comes at a challenging time. Lithium prices have dropped by more than 60% in the year through early October due to an influx of new supplies and a slowdown in the growth of EV sales. Despite this, Exxon anticipates that demand for internal combustion fuels in light-duty vehicles will peak around 2025. The company projects a nearly 25% increase in global EV sales and a fourfold increase in lithium demand by 2030, underscoring its commitment to positioning itself for the future of the automotive industry.

 

LIVESTOCK, NUTRITION & FOOD INDUSTRY

— Tyson foods reports sales decline in Q4 2023. Tyson Foods Inc. reported a decline in sales for the fourth quarter and fiscal year 2023, with lower chicken and pork prices and reduced demand for beef. The company's operating income loss in Q4 decreased by 160% to $463 million, while sales for the quarter dropped by 2.9% to $13.35 billion. Tyson's beef segment operating income also declined, with a $323 million loss in Q4, despite a 10.2% increase in average beef prices. The company anticipates an adjusted operating income loss between $400 million and breakeven for fiscal 2024 in the beef segment.

    JBS, the Brazilian meat packer, has also seen margins come down sharply for its U.S. beef business.

     Shares in Tyson and JBS have fallen about 29% and 24% over the past 12 months.

— USDA publishes final rule on imports of beef from Paraguay. USDA's Animal and Plant Health Inspection Service (APHIS) published its final rule (link) allowing the import of fresh (chilled or frozen) beef from Paraguay. This decision follows a risk analysis conducted by APHIS at the request of the Paraguayan government. The analysis determined that Paraguay has the capacity to respond effectively to an outbreak of foot-and-mouth disease (FMD), including vaccination of cattle.

     APHIS concluded that the overall risk associated with importing fresh beef from Paraguay is low. Additionally, Paraguay possesses the necessary infrastructure and emergency response capabilities to promptly report, contain, and eradicate FMD if an outbreak were to occur. The agency also affirmed that Paraguay can comply with US import restrictions on specific products from affected areas.

     This action is set to become final on Dec. 14, allowing for the importation of fresh beef from Paraguay to the United States.

     U.S. cattle groups lined up against the proposal. The groups argue that the decision is based on a dated risk analysis and will put US producers at risk. “USDA based their decision to allow beef imports from Paraguay on a deeply flawed risk assessment that uses old data from site visits that were conducted more than nine years ago,” said National Cattlemen’s Beef Association (NCBA) Executive Director of Government Affairs Kent Bacus. “Paraguay has a history of FMD outbreaks, and it is unclear if their inspection system can provide an equivalent level of safety for animal health to prevent a possible FMD outbreak on U.S. soil.” Baucus added, “Paraguay heavily relies on private sector funding for most of its FMD mitigation measures, and USDA did not consider the risk associated with Paraguay’s economic downturn over the last several years.” NCBA contends that the U.S. is using beef market access — long sought by Paraguay — as a bargaining chip in ongoing trade negotiations. “Unfortunately, this is not the first time that a foreign country’s beef access to the United States was a pre-determined outcome and used as a bargaining tool for other U.S. interests,” said Bacus. “While winning friends and allies in South America may be part of the long-term interests of U.S. diplomacy, it should not be done on the backs of U.S. cattle producers or by putting at risk the health and livelihood of the safest and most efficient cattle and beef production system in the world.”

— FDA to intensify focus on food chemicals and additives amid reorganization. FDA Deputy Commissioner Jim Jones announced the agency will adopt a more significant agenda on food chemicals and additives as it reorganizes its food safety division. This move comes in response to California's recent law banning four food additives, which some food manufacturers may treat as a de facto national ban due to compliance challenges.

     The California law, set to take effect in 2027, prohibits the use of four commonly used food additives: brominated vegetable oil (BVO), red dye No. 3, potassium bromate, and propylparaben. These additives are found in various food products such as candy, fruit juices, and cookies.

     Jones emphasized that the FDA's reorganization would enhance its focus on food safety and lead to a more ambitious post-chemical review agenda. By taking proactive steps, such as proposing a ban on BVO and considering the ban on red dye No. 3, the FDA aims to demonstrate its commitment to food chemical safety, potentially reducing the need for individual state actions on food additives.

     Jones highlighted that the FDA's priorities also include preventing foodborne illnesses and addressing diet-related chronic diseases through improved nutrition. As part of the FDA's reorganization efforts, Jones expressed a commitment to stakeholder engagement and transparency in FDA policies.

     Bottom line: The reorganization aims to streamline FDA operations and prioritize food safety. It addresses structural issues identified in a 2022 report by outside experts, which pointed to diffuse leadership and responsibilities across multiple offices, leading to risk aversion in decision-making related to food regulation.

 

POLITICS & ELECTIONS

— Nate Silver, a prominent political statistician, has expressed skepticism about President Joe Biden's ability to run for re-election in 2024. In a post on his Substack newsletter, Silver argued that if Biden cannot run a "normal" re-election campaign, he should consider stepping aside and allowing another Democratic candidate to take the lead. Silver's concern is that if Biden struggles to maintain a typical campaign schedule or makes errors during the process, it could become a significant issue for both voters and the media, potentially hindering his candidacy. However, Biden's campaign has dismissed Silver's analysis.

— Former President Donald Trump is reportedly considering a mass detention and deportation strategy for undocumented immigrants if he were to regain power in 2024. These plans include apprehending undocumented immigrants already in the United States and placing them in detention facilities until deportation. Trump has indicated his intention to sign an executive order on the first day of a potential second term to stop funding for shelter and transportation for undocumented immigrants. Additionally, he has expressed a desire to reinstate several immigration policies from his first term, such as the travel ban on predominantly Muslim countries and reviving the Covid-era policy known as Title 42. These plans would likely face significant political and legal challenges.
 

OTHER ITEMS OF NOTE

— Supreme Court released its first-ever code of conduct, addressing concerns about the ethical standards for the justices. The 15-page document formalizes existing practices and aims to clarify that the justices are not exempt from ethics rules. Reports earlier this year revealed potential ethical issues involving some justices, leading to calls for a code of conduct. The Senate Judiciary Committee, led by Democrats, advanced legislation to tighten Supreme Court standards, but Republicans on the committee temporarily blocked efforts to subpoena individuals mentioned in the ethics stories.

     Of note: This comes after months of news stories alleging that conservative Justices Clarence Thomas and Samuel Alito accepted lavish gifts and took part in other controversial off-bench activities. All nine judges signed the 14-page document, but it remains unclear who will enforce the self-imposed code.

— Syngenta has paid a $280,000 fine in Arkansas for failing to report ownership of a research farm within the state. Arkansas Attorney General Tim Griffin characterized this fine as a warning to other Chinese state-owned companies operating in Arkansas. Link for details.


 

KEY LINKS


WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | Student loan forgiveness | Russia/Ukraine war, lessons learned | Russia/Ukraine war timeline | Election predictions: Split-ticket | Congress to-do list | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | China outlook Omnibus spending package | Gov’t payments to farmers by program | Farmer working capital | USDA ag outlook forum | Debt-limit/budget package |


 

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PF Report Reaction: Bullish USDA data for corn
PF Report Reaction: Bullish USDA data for corn

Corn planting intentions and March 1 stocks came in lower than expected.

Report Snapshot: USDA shows lighter-than-expected corn acres and stocks
Report Snapshot: USDA shows lighter-than-expected corn acres and stocks

USDA reported corn acres of 90.036 million acres for 2024 and March 1 stocks of 8.347 billion bu., both well below trade estimates. Soybean acres were slightly lower than expectations, while stocks were higher.