Hurdles Ahead for Proposed $1.9 Trillion in Covid Aid; Dems Have Two Options

Posted on 01/22/2021 8:17 AM

Farm Bureau urges changes, transparency for NASS estimates | Biden’s food aid directive

 


In Today’s Updates


 

Market Focus:
• Farm Bureau urges USDA’s NASS to modernize, improve transparency on estimates
• USDA daily export sales:
   — 136,000 metric tons (MT) soybeans to China 2020-2021 marketing year
   — 123,000 MT sorghum to China (60 TMT 2020-2021, 63 TMT 2021-2022)
• ECB Lagarde cautiously optimistic on Europe’s economic recovery
• Bitcoin set to notch sharpest weekly drop since September
• British pound on Thursday reached new 52-week high against U.S. dollar

• Covid concerns pressure point for crude oil
• Palm oil prices have soared since last May
Consultancy lowers Brazilian bean crop forecast, raises its corn crop projection
• SovEcon raises Russian wheat crop projection, citing improved weather
• South Korean poultry cull nears 20 million
• JBS USA and Pilgrim’s Pride will pay employees bonuses to get vaccine
• Profit margins soar for beef packers

Policy Focus:
• Biden plans to significantly increase federal food assistance
• Biden’s push for $1.9 trillion Covid aid faces GOP hurdles
• Higher taxes on corporations and wealthy will come later, not sooner
• Hurdles for big infrastructure package.

 

Biden Administration Personnel

• Updates on a slew of personnel

 

China Update:
• Big cut in cotton sales to China as purchases of wheat, soybeans, pork & beef continue
• China reports cluster of Covid-19 cases at poultry slaughter plant
• New strain of ASF circulating in China
• GOP lawmakers to Biden: Hit back at China, after U.S. officials hit with sanctions
• China fell well short of meeting Phase 1 trade deal commitments with U.S. in 2020
• China builds military drones to rival U.S. in war, leaked file shows

 

Energy & Climate Change:

• Biden to freeze oil, coal leasing on U.S. land
• Chamber of Commerce comments on potential carbon tax
• Kerry warns Glasgow summit is last chance for climate change action
• Elon Musk to award $100 million for best carbon-capture technology


Coronavirus Update:
• Biden warns U.S. Covid deaths will top 500,000 next month
• A ‘liberated’ Fauci clears the air
• Purell hand sanitizer firm bets America’s fixation on clean hands will continue

 

Politics & Elections:
• Biden ordered “pause” on all border wall construction
• Senate Republican leader McConnell wants to postpone Trump’s impeachment trial
• McConnell skewered some of Biden’s early executive actions


Other Items of Note:
• Cotton AWP rises again
• Google said it would withdraw search engine from Australia if required to pay
• CFTC unanimously elected Commissioner Rostin Behnam as acting chairman
• Access to mobile banking helps reduce rural poverty: report
•  Biden orders assessment of U.S. intelligence about Russia’s role computer hack
• Russia welcomes U.S. call to extend nuclear arms treaty but wants details

 

Remembering:
• Floyd Gaibler passed away following infection after a heart pacer operation

 


MARKET FOCUS


 

Equities today: Global stock markets were mostly lower overnight. U.S. stock indexes are pointed toward lower openings amid likely profit taking heading into the weekend. The Nikkei fell 125.41 points, 0.44%, at 28,631.45. The Hang Seng Index lost 479.91 points, 1.60%, at 29,447.85. President Biden plans to sign two executive orders today that would increase food aid, protect jobseekers on unemployment and clear a path for federal workers and contractors to get a $15 minimum wage.

 

     U.S. equities yesterday: The Dow finished lower while the Nasdaq and S&P 500 registered new records. The Dow lost 12.37 points, 0.04%, at 31,176.01. The Nasdaq rose 73.67 points, 0.55%, at 13,530.91. The S&P 500 rose 1.22 points, 0.03%, at 3,853.07.

 

On tap today:

 

     • USDA Weekly Export Sales report, 8:30 a.m. ET.
     • IHS Markit's preliminary U.S. manufacturing index for January is expected to tick down to 57.0 from 57.1 at the end of December, and the services index is expected to fall to 53.5 from 54.8. (9:45 a.m. ET)
     • U.S. existing-home sales for December are expected to fall to an annual pace of 6.55 million from 6.69 million a month earlier. (10 a.m. ET)
     • EIA Weekly Petroleum Status report, 10:30 a.m. ET.
     • Baker Hughes rig count is out at 1 p.m. ET.
     • CFTC Commitments of Traders report, 3:30 p.m. ET.

 

Farm Bureau urges NASS to modernize, improve transparency on estimates important for ag sector. USDA’s National Agricultural Statistics Service (NASS) should be more transparent about its estimates and adopt new and innovative technology to improve its operations, a new report from the American Farm Bureau Federation (AFBF) recommends. “NASS should help farmers understand how the agency arrives at the numbers reported and provide clarity on the relationship between aggregate, state, county and field-level reported numbers,” the report says. “If the numbers are not the most current due to a market event that occurred after the data collection period, NASS should note that or even delay the report release.” Link to report summary. Link to full report.

 

     NASS should echo the private industry’s adoption of “faster computers [and] “speedier algorithms,” the report says, adding NASS “should have the best resources, information, data, software, hardware, talent and networks so that it can accelerate the development of innovative survey techniques and analysis.”

 

     Improving NASS will “help rebuild farmers’ trust” in NASS’ estimates, the report says, noting the validity of the agency’s reports “hinges on farmers’ full participation in NASS’ data collection efforts. The more robust the data, the more reliable the reports.” Farm Bureau said, "most importantly,” farmers need to provide NASS with accurate information.

 

     Farm Bureau and NASS

 

European Central Bank President Christine Lagarde sounded a cautiously optimistic note on Europe’s economic recovery despite a wave of Covid-19 infections that has closed shops, schools and businesses across the region. At a news conference on Thursday, Lagarde said a resurgence of the pandemic in Europe was squeezing business investment and crimping consumer spending. But she highlighted recent developments such as the start of a Covid-19 vaccination campaign, a trade deal between the European Union and the U.K. and a new administration in the U.S.

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is slightly higher. Nymex crude oil futures prices are solidly lower and trading around $51.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note stands at 1.10%.

 

       Dollar vs euro


     • Bitcoin is set to notch its sharpest weekly drop since September, after slipping as much as 9% to under $30,000 in the Asia session. It was only two weeks ago that the crypto hit $42,000, but it's now down 30% from that record high. At a U.S. Senate hearing this week, Janet Yellen expressed concerns that cryptos could be used to finance illegal activities, while ECB President Christine Lagarde called for global regulation of Bitcoin. UBS announced cryptos "may never be able to work as actual currencies," given the "fundamental flaw" that supply can't be reduced in most cases when demand is slumping.

 

     British pound on Thursday reached a new 52-week high against the U.S. dollar, at $1.3731. However, this morning sterling slipped 0.5% after official U.K. data for December showed retail sales rose by less than expected and public sector borrowing reached a fresh record.

 

     • Covid concerns are a pressure point for crude oil, with U.S. crude trading around $51.75 per barrel and Brent around $53.75 per barrel ahead of U.S. government inventory data to be released this morning. Both were under pressure in Asian action, with U.S. crude down 76 cents at $52.37 per barrel and Brent down 78 cents at $55.32 per barrel.

 

• USDA daily export sales:

   — 136,000 metric tons (MT) of soybeans to China 2020-2021 marketing year

   — 123,000 metric tons of sorghum to China (60 TMT 2020-2021, 63 TMT 2021-2022)

 

     • Ag demand: Turkey’s state grain board started purchasing wheat in its tender to buy up to 400,000 MT of the grain.

 

     • Palm oil prices have soared since last May, as pandemic effects hurt production while demand stays strong, the Wall Street Journal notes in a market article (link). In Malaysia and Indonesia, sources of roughly 84% of the world’s palm oil, labor shortages caused by the coronavirus pandemic have reduced production, while major consumers China and India are buying more for cooking and manufacturing. Malaysian stockpiles are at their lowest levels in years. The benchmark futures price touched the equivalent of $961 a metric ton earlier this month, the highest since August 2011 and up more than 100% since May. The contract trades on the Bursa Malaysia exchange and is denominated in Malaysian ringgit.

 

     Palm oil

     Palm oil prices

 

Items in Pro Farmer's First Thing Today include (Link to subscribe to FTT):

     • Consultancy lowers Brazilian bean crop forecast, raises its corn crop projection
     • SovEcon raises Russian wheat crop projection, citing improved weather
     • South Korean poultry cull nears 20 million
     • JBS USA and Pilgrim’s Pride will pay employees bonuses to get vaccine
     • Profit margins soar for beef packers

 


POLICY FOCUS


 

— WaPo: Biden plans to significantly increase federal food assistance for millions of families. President Biden will ask USDA today to allow states to increase Supplemental Nutrition Assistance Program (SNAP) benefits (food stamps) and to increase by 15% benefits awarded through a school meals programs for low-income students started in the pandemic, the Washington Post reports, citing Biden officials. That could give a family of three children more than $100 in extra benefits every two months, Biden officials said. Under Biden’s order, an electronic debit card benefit for students will increase by approximately 15%. The program is called Pandemic EBT and goes to students who would have qualified for free or reduced-priced school meals were school in session.

 

     A major change in the executive order is a reassessment of the USDA’s Thrifty Food Plan, the basis for determining SNAP benefits. Lisa Davis, senior vice president of Share Our Strength’s No Kid Hungry campaign, told the Washington Post that the metrics are out of date with the economic realities most struggling households face. The president will ask USDA to consider beginning the process of revising the Thrifty Food Plan to better reflect the modern cost of a healthy basic diet.

 

     Another Biden directive will ask the Labor Department to make clear that workers who refuse to return to working conditions that could expose them to the coronavirus should be eligible for unemployment insurance.

 

     Biden will also restore collective bargaining power to federal workers and direct agencies to develop recommendations “directing his administration to start the work” of an executive order requiring federal contractors to pay a $15 per hour minimum wage and provide emergency paid leave. Biden endorsed similar commitments during the presidential campaign.

 

    Aid talks ahead. Brian Deese, director of the White House National Economic Council, told reporters on a call Thursday night that the measures are meant as only partial solutions, as the administration kicks off negotiations with Congress on its $1.9 trillion relief economic proposal.

 

— Biden’s push for $1.9 trillion Covid aid faces GOP hurdles. Sen. Susan Collins (R-Maine), a moderate who won re-election in November, sent a warning to the White House on Thursday, telling Bloomberg News, “It’s hard for me to see when we just passed $900 billion of assistance why we would have a package that big.” Collins said she is “happy to listen” to the president’s arguments, adding, “I’m not seeing it right now.”

 

     Sen. Roy Blunt (R-Mo.), a member of Senate Republican leadership, suggested that Biden’s mammoth relief bill may not get GOP support. “I suspect the whole package is a non-starter, but there are plenty of starters in it,” he said.

 

     Comments: House Speaker Nancy Pelosi (D-Calif.) said she wants the $1.9 trillion package to be taken up by the House the first week of February. Congressional sources say the aid proposal will likely have to be scaled back to garner the necessary votes, especially in the Senate, or Democratic leaders may punt the issue as part of a coming budget reconciliation package that would need only a Senate majority vote and not the usual 60 votes to avoid a filibuster. But that would mean a likely March timeframe. Hurdles notwithstanding, a round of talks will take place this weekend as National Economic Council Director Brian Deese is expected to speak with a bipartisan group of 16 senators about the president’s nearly $2 trillion blueprint. The list includes eight Republicans: Collins and Sens. Lisa Murkowski (Alaska), Mitt Romney (Utah), Rob Portman (Ohio), Bill Cassidy (La.), Shelley Moore Capito (W.Va.), Jerry Moran (Kan.) and Todd Young (Ind.).

 

— Higher taxes on corporations and the wealthy will come later, not sooner. President Biden has said that he would raise taxes for the top income bracket to nearly 40%, from 37%, and increase the corporate tax rate to 28%, from 21%. In a Senate confirmation hearing this week, Janet Yellen, Biden’s pick for Treasury secretary, signaled she would not push for tax increases until the U.S. economy is on a more robust growth path. She also suggested that the IRS may audit wealthy taxpayers more frequently. All told, the Biden administration’s potential tax tweaks could net $500 billion in additional taxes, set against $2 trillion in proposed new spending.

 

     A green hub is coming. Yellen said that she would appoint “someone at a very senior level” to create a hub in the Treasury focused on climate change and financial system risks. Meanwhile, the Commodity Futures Trading Commission and the Federal Reserve recently addressed climate risks in high-profile reports.

 

— Hurdles for big infrastructure package. President Biden’s nominee to run the Transportation Department faces an uphill climb in getting bipartisan approval for a big infrastructure measure. Former South Bend, Ind. Mayor Pete Buttigieg told a Senate confirmation hearing Thursday there is “a lot of work to do to improve the infrastructure in this country.” The Wall Street Journal reports (link) that Republicans have started expressing skepticism about federal spending under a Democratic president, and are raising questions about how to pay for Biden’s $2 trillion target. A spokesman for the nominee said after the hearing that an increase in the federal gas tax isn’t on the table. While Buttigieg awaits a confirmation vote, the administration named Lana Hurdle as acting secretary of Transportation.

 


BIDEN ADMINISTRATION PERSONNEL


 

—  Granholm hearing set. The Senate Energy and Natural Resources Committee will meet on Wednesday to consider the nomination of Jennifer Granholm to be Energy secretary.

 

— Utech to serve as EPA Chief of Staff. The Biden administration named Dan Utech, who worked on climate change and energy issues during the Obama years, as the EPA’s chief of staff. He’s the founder of Climate Strategies, a consulting firm that advises non-governmental organizations on climate change policy and advocacy. Utech was President Barack Obama’s deputy assistant for energy and climate change. At the Energy Department before that, he was a senior adviser to the secretary.

 

     The agency also named new political appointees at the EPA including lawyers, agency veterans and former congressional staff. They include: Associate Administrator for Policy Vicki Arroyo; Principal Deputy Associate Administrator for Policy Philip Fine; Joseph Goffman, the principal deputy assistant administrator in the Office of Air and Radiation; Principal Deputy Assistant Administrator in the Office of Water Radhika Fox; Tomás Carbonell, the deputy assistant administrator for stationary sources in the Office of Air and Radiation; Lindsay Hamilton, associate administrator for public affairs; and Principal Deputy General Counsel Melissa Hoffer.

 

     Veteran Justice Department lawyer Jean E. Williams will oversee the agency’s environment division until Biden selects a political appointee for the role. Williams is the Environment and Natural Resources Division’s top-ranking career attorney and is now its “designated supervisory official,” per the division’s website.

 

— Other developments: As expected, Biden asked FBI Director Christopher Wray to stay on.  The House and Senate approved a waiver for retired Gen. Lloyd Austin to serve as Defense secretary, a precursor to a Senate confirmation vote. The Biden administration also made several other agency appointments, including Meera Joshi as deputy administrator at the Federal Motor Carrier Safety Administration and Lucinda Lessley as deputy administrator at the Maritime Administration.

 

— Biden names three USDA deputy undersecretaries, other appointees. Details:

  • Stacy Dean, deputy undersecretary for food, nutrition, and consumer services. Dean has served as vice president for food assistance policy at the Center on Budget and Policy Priorities. Dean joined the center in 1997. Previously, as a budget analyst at the Office of Management and Budget, she worked on policy development, regulatory and legislative review, and budgetary process and execution for a variety of income support programs.
  • Justin Maxson, deputy undersecretary for rural development. Maxson served as the CEO of the Mary Reynolds Babcock Foundation, an organization that works toward poverty alleviation and economic justice in southern states. Before that, he spent 13 years as the president of the Mountain Association for Community Economic Development.
  • Mae Wu, deputy undersecretary of marketing and regulatory programs. Wu has served as a senior director at the Natural Resources Defense Council, helping to lead the organization’s health and food work. She served as serving on the Environmental Protection Agency’s Pesticide Program Dialogue Committee and its National Drinking Water Advisory Council.

— Other USDA appointees:

  • David Grahn, principal deputy general counsel in the Office of General Counsel. Most recently, Grahn served as the director of the Office of Regulatory Policy at the Farm Credit Administration. Before that, he served for almost 27 years in the Office of the General Counsel at USDA.
  • Farah Ahmad, chief of staff in the Office of the Undersecretary for Rural Development. Ahmad served as the senior program coordinator in the Office of Consumer Education and as a senior adviser to the chief operating officer at the Consumer Financial Protection Bureau. She previously served as the program manager on the Community and Economic Development team in the Rural Business Cooperative Service at USDA and as senior policy analyst at Center for American Progress.
  • Olugbenga Ajilore, senior adviser in the Office of the Undersecretary for Rural Development. Ajilore served as a senior economist at the Center for American Progress and as a president of the National Economic Association. He previously worked as an associate professor of economics at the University of Toledo.
  • Mike Schmidt, senior adviser in the Office of the Undersecretary for Farm Production and Conservation. Schmidt was senior professional staff for the Senate Agriculture Committee under Sen. Debbie Stabenow (D-Mich.). He held several positions at USDA in the Obama administration, including associate administrator for policy and programs in the Farm Service Agency. At USDA, Schmidt was responsible for implementation of 2014 farm bill programs related to commodities, dairy, conservation and risk protection.
  • Marcus Graham, deputy administrator for field operations in the Farm Service Agency. Graham served as the legislative director in the Office of External Affairs, among other positions at the Farm Service Agency. He served on the Senate Agriculture Committee under Stabenow from 2011 to 2012.
     

CHINA UPDATE


 

— Big cut in cotton sales to China as purchases of wheat, soybeans, pork and beef continue. Sales of U.S. ag products to China for 2020-21 the week ended Jan. 14 included 65,000 tonnes of wheat, 268,504 tonnes of sorghum and 864,059 tonnes of soybeans, but included net reductions of 539 tonnes of corn and net reductions of 22,329 running bales of cotton despite new sales of 9,212 running bales. There were also 319,000 tonnes of soybean sales for 2021-22 reported. For meat, sales of 4,290 tonnes of beef and 9,745 tonnes of pork were reported.

 

— China reports cluster of Covid-19 cases at poultry slaughter plant. Chinese officials have reported their first cluster of Covid-19 cases among workers at a plant that slaughters 50 million chickens annually in Harbin. Increased screening of residents in the region detected the cases, officials said. Reports also indicated that samples taken from inside the slaughter facility, its cold storage area and outside the product packaging area were positive for the virus. China has focused much attention on testing imports for the presence of Covid-19 in those products or on the packaging despite the World Health Organization (WHO) consistently saying food or food packaging are not known transmissions routes for the virus. 

 

— New strain of ASF circulating in China. A new strain of African swine fever (ASF) has infected more than 1,000 sows on several farms owned by China’s New Hope Liuhe, the country’s fourth largest producer, as well as pigs at the company’s contract farms, says Yan Zhichun, the company’s chief science officer. Industry insiders indicate the new strain is likely caused by illicit vaccines. Yan says the new strains don’t kill pigs like the disease that wiped out nearly half the country’s 400-million-head herd in 2018 and 2019. Rather, they cause a chronic condition that reduces the number of healthy piglets born. New Hope and other large producers are culling infected pigs to prevent the spread. Wayne Johnson, a Beijing-based veterinarian cited by Reuters, said he diagnosed a chronic, or less-lethal, form of the disease in pigs last year. The new strains are “very difficult to detect at the initial stage of infection and have a longer incubation period after infection,” according to GM Biotech, a company that says it has developed a test identifying which pathogen is at play. Johnson says a “vast amount” of pigs have been illegally vaccinated.

 

— GOP lawmakers to Biden: Hit back at China, after U.S. officials targeted with sanctions. Top Republicans urged President Joe Biden to take tougher action against China, after Beijing announced sanctions on outgoing American officials just minutes into Biden taking office. Sen. Jim Risch (R-Idaho), ranking on the Senate Foreign Relations Committee, tweeted that in sanctioning 28 national security officials, China’s Communist Party was already testing the Biden administration’s “resolve to continue a tougher, competitive approach towards China… Together, Republicans [and] Democrats must show Beijing we will not be deterred from defending U.S. interests,” he tweeted. Rep. Michael McCaul (R-Texas), the leading Republican on the House Foreign Affairs Committee, tweeted that Beijing had showed its true colors by sanctioning U.S. officials for telling the truth — that the Communist Party was “guilty of crimes against humanity and genocide. I strongly urge the Biden administration to quickly condemn these baseless, impotent sanctions and make good on its early commitments to prioritize strategic competition with the [Communist Party],” he said.

 

     Biden’s National Security Council weighed in, calling the sanctions “unproductive and cynical,” urging Americans from both parties to criticize the move.

 

     China responds. Ministry spokeswoman Hua Chunying accused the former Trump administration of having imposed thousands of sanctions on China. She said Beijing’s measures were “completely appropriate and necessary, fully demonstrating the Chinese government’s firm determination to safeguard national interests. We have long said that unilateral sanctions harm others and hurt oneself, and just like a boomerang, sooner or later it will fly back,” she said. “McCaul’s comments fully expose how some U.S. politicians only allow the U.S. to engage in arbitrary suppression and do not allow others to justly defend themselves against bullying, hegemony and hegemonic logic.”

 

— China fell well short of meeting Phase 1 trade deal commitments with U.S. in 2020. In the first year of the deal signed on Jan. 15, 2020, China fulfilled only 58% of those targets, according to an analysis of Chinese customs data by the Peterson Institute of International Economics (PIIE). Beijing committed to buy, over two years, at least $200 billion more worth of U.S. goods and services, compared with China’s purchasing total in 2017. Those purchases were to comprise agricultural and energy commodities, manufactured goods, and services.

  • China reached 60% its $77 billion purchasing target for manufactured goods.
  • Energy shipments ran at just 39% of what PIIE says was a $32 billion target.
  • Farm product purchases reached 64% of the $36.6 billion agricultural purchase target.

U.S./China Phase 1 tracker: China’s purchases of U.S. goods. Link

 

— China builds military drones to rival U.S. in war, leaked file shows. The Chinese regime has been actively growing its fleet of unmanned aircrafts to spy on and compete with adversaries such as the United States, a leaked document from China’s Ministry of National Defense reveals. The July 2017 document described Beijing’s ambition to dominate what it called “full dimensional warfare” — referring to control over sea, land, air, space, and the electromagnetic spectrum where military equipment communicates — by developing advanced military drones. To accomplish the above, the regime detailed a plan to design one to two types of small, long-range military drones and establish a factory to produce 1,000 drones per year.

 


ENERGY & CLIMATE CHANGE


 

— Biden to freeze oil, coal leasing on U.S. land. President Joe Biden is poised to suspend the sale of oil and gas leases on federal land, which accounts for about a tenth of U.S. supplies, according to reports. The moratorium, which would also freeze coal leasing, is set to be unveiled along with other climate policies next week. The moratorium is separate from a 60-day leasing and permitting pause ordered Wednesday. The move would block the sale of new mining and drilling rights across some 700 million acres of federal land. It could also block offshore oil and gas leasing, though details are still being developed.

 

     “The decision to try to halt these projects without process is not just ill-advised, it’s illegal,” Sen. John Barrasso (R-Wyo.) said in a statement. “The Department of the Interior has a legal obligation to act on drilling permit applications after ten days. Staff memos cannot override the law.”

 

— Chamber of Commerce comments on potential carbon tax. A top official with the U.S. Chamber of Commerce said yesterday that the group is not “specifically endorsing a carbon tax” but rather “market mechanisms” to reduce Co2 emissions. “To be fair, market mechanisms would include potentially a carbon tax,” said Neil Bradley, the chamber’s executive vice president and chief policy officer. “It would also include other mechanisms like cap and trade, or sector-specific limits with some forms of tradable allowance,” he added during a phone briefing with reporters.

 

     The comments regarding a potential carbon tax reflect a departure from the organization’s long-standing opposition to such a measure. The U.S. Chamber of Commerce announced earlier this week its updated climate change position based on feedback from its members, including support lower emissions, more robust energy efficiency, and the U.S. recommitment to the Paris Climate agreement.

 

     The best way to reduce emissions is via the legislative process, said Bradley. “That’s the only way to ensure that it has broad buy-in, and that it’s durable over not just the next two years or four years, but really durable over the next several decades.” He said the “regulatory pendulum” between different administrations has made it “incredibly difficult for businesses to plan, to make meaningful change when you have policies that flip back and forth every four to eight years.”

 

— Kerry warns Glasgow summit is last chance for climate change action. Biden’s international climate czar promised to make a success of the next round of global warming talks, warning it will be the last chance the world has to avoid climate disaster. In his first speech since becoming U.S. Special Presidential Envoy for Climate, John Kerry said failure is “simply not an option” at COP26, which is taking place in Glasgow, Scotland, in November. “We really have the world’s last, most important opportunity to come together to raise ambition and to take the next step from Paris,” he said yesterday at B20, a business leaders event advising G20 nations.

 

     Kerry praised Europe’s policies on tackling climate and blasted Trump’s stance as “reckless” and embarrassing. He said the U.S. will now try to repair its reputation and seek to close the gap by increasing action. Biden plans to set a goal for net-zero U.S. emissions by 2050.

 

— Elon Musk tweeted that he would award $100 million to whoever can create the best carbon-capture technology. Musk said he would share more details next week.

 


CORONAVIRUS UPDATE


 

 Summary: Global cases of Covid-19 are nearing 100 million at 97,592,137 with 2,093,387 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 24,632,468 with 410,378 deaths.

 

       Link to Covid Case Tracker
       Link to Our World in Data

 

— Biden warns U.S. Covid deaths will top 500,000 next month. Coronavirus will have killed half a million people in the U.S. by the end of next month, President Joe Biden forecast on Thursday as he warned that his administration would not be able to dramatically accelerate the pace of vaccinations. The president told reporters: “The death toll will probably top 500,000 next month, the cases will continue to mount… We didn’t get into this mess overnight. It’s going to take months for us to turn things around,” Biden said during a briefing at the White House on his first full day as president.

 

     Biden also lowered expectations for a step change in the speed of the US vaccination campaign, warning that “the brutal truth is it’s going to take months before we can get the majority of Americans vaccinated.” He reaffirmed his commitment to launch “an aggressive, safe and effective vaccination campaign,” with 100 million inoculations to be administered during his first 100 days in office. That would not represent a significant increase to the current pace of vaccinations: according to the U.S. Centers for Disease Control and Prevention, an average of 912,497 doses were administered per day over the past week.

 

     Biden also pledged to invoke the Defense Production Act to force companies to make items that are in short supply, including vaccine syringes, N95 masks and materials for testing kits.

 

     Facts and figures: Nearly 38 million vaccine doses were distributed to U.S. states as of Thursday, according to the CDC, but only about 17.5 million have actually been administered. That means over half of the shipped vaccines are sitting on shelves across the country. Of the jabs given, 15 million have been for a first dose, while only 2.5 million Americans have been given a second round of Pfizer-BioNTech or Moderna's inoculation. At least 12 states have reported vaccine shortages, and officials from San Francisco and New York warned that they could be completely out of doses this week. The CDC is looking at increasing the sites where people can get vaccinated, including community vaccination centers, stadiums, gyms, mobile units, federally qualified healthcare centers and pharmacies.

 

     Market impact: Wall Street is hedging against possible bumps in the U.S. vaccine rollout, according to Reuters, as the CBOE Volatility Index expiring in March and beyond trades well above the index's current levels. Uncertainty over the rollout has also seen the VIX hover above its long-term average near 20, even as the Dow Jones, S&P 500, Nasdaq and Russell 2000 rally to record highs.

 

— A ‘liberated’ Fauci clears the air. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, declared on Thursday that he feels liberated to speak about science and the coronavirus without repercussions as he starts work as the face of the Biden administration’s Covid-19 response. Fauci appeared in the White House briefing room to speak about the administration’s work on Covid-19 and was asked multiple times about how things have changed going from Trump’s administration to Biden’s. “One of the new things in this administration is, if you don’t know the answer, don’t guess,” Fauci said at one point. “Just say you don’t know the answer… I can tell you; I take no pleasure at all in being in a situation of contradicting the president. So, it was really something that you didn’t feel that you could actually say something and there wouldn’t be any repercussions about it,” Fauci said later during the briefing. “The idea that you can get up here and talk about what you know, what the evidence — what the science is, and know, ‘That’s it. Let the science speak,’ it is somewhat of a liberating feeling.”

 

— The company behind Purell hand sanitizer is making a big bet that America’s fixation on clean hands will outlast the global Covid-19 health crisis. Gojo Industries added both a factory and a warehouse — the family-owned company had just one of each before the pandemic — and restructured its supply chain, all with the expectation that demand for hand sanitizer will remain exponentially higher than before the pandemic. It's an unusual move in the consumer-products world, where the majority of players deluged by Covid-fueled demand have stopped short of major long-term investments, the Wall Street Journal reports (link).

 

     Clean machine

 


POLITICS & ELECTIONS


 

— Biden ordered a “pause” on all border wall construction, one of 17 executive orders issued his first day in office. The move leaves billions of dollars in unfinished work under contract after his predecessor worked feverishly to successfully to build 450 miles. A Senate aide told the Associated Press that the government has spent $6.1 billion of $10.8 billion under contract. The full amount under contract would have extended Trump’s wall to 664 miles. The Biden administration will negotiate cancellation fees and look into whether what's left can be spent elsewhere.

 

— Senate Republican leader Mitch McConnell (R-Ky.) wants to postpone Trump’s impeachment trial until February to give the former president time to prepare and review his case. The idea could appeal to some Senate Democrats wanting to spend time confirming Biden's Cabinet nominees. The House impeached Trump on a single charge of incitement of insurrection for the deadly attack on the Capitol. House Speaker Nancy Pelosi (D-Calif.) said the trial has to happen even though Trump has left office so that there is accountability.

 

— Sen. McConnell skewered some of Biden’s early executive actions, hopeful he will convey to Republican voters that there is a vigorous debate over substantive issues ahead of the 2022 midterms. “The failed Paris deal will hurt American families while China and Russia grow emissions,” McConnell tweeted. “The Keystone cancellation will kill union jobs and hurt U.S. energy security. And a proposal to gut immigration enforcement and give blanket amnesty? Rough ‘day one’ for American workers,” he added.
 


OTHER ITEMS OF NOTE     


 

— Cotton AWP rises again. The Adjusted World Price (AWP) for cotton is at 66.70 cents per pound, effective today (Jan. 22), up from 66.23 cents per pound the prior week and sixth week above 60 cents per pound. The AWP level means there is no LDP opportunity — the last LDP available for cotton was the week of Oct. 9 at 52 cents. Meanwhile, USDA said that Special Import Quota #14 will be established Jan, 28 for 43,469 bales of upland cotton, applying to supplies purchased not later than April 27 and entered into the U.S, not later than July 26.

 

— Google said it would withdraw its search engine from Australia if it were required to pay royalties to news outlets for posting links to their articles, as a new code there proposes. Scott Morrison, the prime minister, said his country would not be moved by threats. Separately, Google agreed to pay around 300 French publishers for listing their content in search results, as a court ordered last year.

 

— CFTC unanimously elected Commissioner Rostin Behnam as acting chairman, effective immediately. Behnam succeeds Heath Tarbert, who has served as chairman since July 15, 2019, and announced his departure from the role earlier in the day. Tarbert remains a commissioner, serving a term expiring on April 13, 2024.

 

— Access to mobile banking helps reduce rural poverty, via remittances from urban relatives, more effectively than microfinance programs. Link for details.

 

— Biden ordered a sweeping assessment of U.S. intelligence about Russia’s role in a huge computer hack. Link to details via the New York Times.

 

— Russia welcomes U.S. call to extend nuclear arms treaty but wants details. The Kremlin said on Friday it welcomed the stated intention of U.S. President Joe Biden to extend the New START arms control treaty with Russia but said that Moscow wanted to see concrete proposals from Washington. The White House said on Thursday that Biden would seek a five-year extension of the arms control treaty that is due to expire in early February, in one of the first major foreign policy decisions of the new administration. Kremlin spokesman Dmitry Peskov said it was important to see the detail of the U.S. proposal. The Trump administration had sought to attach conditions to any renewal, something Moscow rejected.

 


REMEMBERING


 

— Floyd Gaibler suddenly passed away following infection after a heart pacer operation. He was Director of Trade Policy and Biotechnology for the U.S. Grains Council, a non-profit organization that promotes the global use of U.S. barley, corn, sorghum and related products including ethanol and distiller’s dried grains with solubles (DDGS). Prior to joining the Council, Gaibler served as deputy undersecretary for farm and foreign agricultural services at USDA.

 


 

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