Vilsack Unveils Replacements for Popular Food Box Program

Posted on 04/15/2021 8:30 AM

Dems introduce bill to add to Supreme Court | Russia building up army on Ukraine border

 


In Today’s Digital Newspaper


 

Market Focus:
• Jobless claims last week at 576,000, a new low since onset of pandemic
• U.S. equities signal stronger opening on jobless claims, retail sales data
• USDA’s NASS to undertake major review of Quarterly Grain Stocks Report
• Import prices rise more than expected in March
• Powell again says interest rate hikes unlikely before 2024
• Price pressures noted in Fed recap

• Self-driving truck startup TuSimple reportedly raised $1.35 billion in IPO
• Fed notes some improvement on shipping empty containers
• Coinbase fetched a major valuation on its first day of public trading
• Ag demand update

Wide range of projections for March NOPA crush
• Consultancy’s soft wheat export forecast for the EU + Britain edges higher
• South African hit by bird flu
• Choice beef prices turn back up
• Light kills have market wondering about tightening market ready supplies

Policy Focus:
• Vilsack confronts several issues raised during House hearing
• Looks like CFAP 2-AA payments won’t be going out in April
• GOP senators working on infrastructure alternative

 

Biden Administration Personnel

• White House enlarges potential FDA commissioner list
• Senate cleared Gary Gensler to lead SEC
• Senate approves White House Environmental Council pick
• Senate Ag to finally hold hearing on Bronaugh to be USDA deputy secretary

 

China Update:
• Big U.S. sorghum sales to China reported; cancellation of some soybean purchases  
• U.S. climate envoy John Kerry in Shanghai today to meet with Chinese officials
• U.S. dominated Q1 soybean exports to China
• China GDP: 1Q growth tipped to jump above 20% following historic contraction last year

 

Trade Policy:
• Trade key focus for pork producers in conference this week

 

Energy & Climate Change:

• Biden names 12 nominees for key climate, transportation positions
• Regan to testify April 29 on EPA budget
• Axne pushes biofuel aid


Food & Beverage Industry Update:
• JBS plans to upgrade/expand several processing facilities


Coronavirus Update:
• Impacts from pausing J&J vaccine
• More than 832 million vaccine doses administered across 154 countries

 

Politics & Elections:
• GOP Rep. Kevin Brady won't seek re-election
• McConnell: Biden ‘gift-wrapping’ Afghanistan for Taliban; Schumer backs Biden
• Racial equality top priority at Justice Dept.
• Democrats ready legislation to add four seats to Supreme Court
• House commission to study reparations for descendants of enslaved people in U.S.
• Dem lawmakers today to offer long-shot bill adding four seats to the Supreme Court


Other Items of Note:
• Biden administration to announce sanctions on several Russian individuals and entities
• Reports: Russia building up its army on Ukraine border
• U.S. Sec. of State Antony Blinken made unannounced visit to Afghanistan today

 


MARKET FOCUS


 

Equities today: Global stock markets were mixed overnight. U.S. stock indexes opened strongly higher. The European Stoxx index hit a record high overnight. Asian equities were mixed after pullback on Wall Street Wednesday and a continued focus on earnings. Japan’s Nikkei rose 21.70 points, 0.07%, at 29,642.69. Hong Kong’s Hang Seng was down 107.69 points, 0.37%, at 28,793.14.

 

     U.S. equities yesterday: The Dow moved up 53.62 points,0.16%, at 33,730.89. The Nasdaq declined 138.26 points, 0.99%, at 29,620.99. The S&P 500 lost 16.93 points, 0.41%, at 4,124.66.

 

     Hedge funds reported their best first quarter in two decades, despite the meme-stock short squeeze, the collapse of Archegos and more.

 

On tap today:

 

     • U.S. jobless claims are expected to fall to 710,000 in the week ended April 10 from 744,000 a week earlier. (8:30 a.m. ET) Update: In another sign of economic recovery, jobless claims dropped sharply last week to 576,000, a new low since the onset of the pandemic.
     • U.S. retail sales for March are expected to rise 6.1% from the prior month. (8:30 a.m. ET) Update: U.S. retail sales jumped 9.8% in March from the prior month as stimulus money, vaccinations and re-openings spurred a burst of shopping.
     • New York Fed's Empire State Survey for April is expected to rise to 20 from 17.4 a month earlier. (8:30 a.m. ET)
     • Philadelphia Fed's manufacturing survey for April is expected to fall to 42 from 51.8 a month earlier. (8:30 a.m. ET)
     • USDA Weekly Export Sales report, 8:30 a.m. ET.
     • U.S. industrial production for March is expected to increase 2.7% from the prior month. (9:15 a.m. ET)
     • U.S. business inventories for February are expected to rise 0.5% from the prior month. (10 a.m. ET)
     • National Association of Home Builders housing market index for April is expected to tick up to 84 from 82 a month earlier. (10 a.m. ET)
     • Federal Reserve speakers: Atlanta’s Raphael Bostic on the economic state of Black America at 11:30 a.m. ET, San Francisco’s Mary Daly to Money Marketeers of New York University at 12 p.m. ET, and Cleveland’s Loretta Mester on economic inclusion at 5 p.m. ET.
     • China's gross domestic product for the first quarter is expected to jump 19.2% from a year earlier. (10 p.m. ET) See related item in China section.

 

USDA’s NASS to undertake major review of Quarterly Grain Stocks Report. The National Agricultural Statistics Service (NASS) will conduct a “deeper dive” review of how it conducts its quarterly U.S. Grain Stocks Reports, Lance Honig, chief of the agency’s crops branch, said at a virtual USDA data users meeting. A team will review the sampling methods and questionnaires USDA uses to collect the data as well as how the agency processes the information, Honig detailed. The team’s findings and recommendations are due by Sept. 30, and changes will go into effect after Oct. 1.

     Recent reports have sparked some major price moves as USDA’s numbers did not align with trade expectations and included some major revisions to previously released quarterly numbers. Honig said stocks revisions are often due to updated or late-reported data. The major misses and resulting price moves have contributed to farmer distrust of USDA and skepticism about any report numbers.

 

     Honig insisted that NASS has not altered its revision policy and said most of the adjustments on prior numbers were from late or updated reports from commercial grain storage firms. Honig told us that the late reports are a combination typically of ones that come in after the deadline for the prior quarter or are corrected reports from the prior quarter and those can come into the agency at any time. As noted, any changes recommended would not be put in place until after October 1, with any changes that are linked to manuals or training documents to be implemented immediately. He also pointed out during the data users meeting that that in the quarterly stocks data there is also an element of forecasting that takes place relative to imports, exports, food and industrial use, another factor that can produce revisions once final data in those areas for the quarter is available.

 

     One industry analyst suggested this: “There should be a system where they must report or pay a fine. I don't see what's so hard about that; other things are that way... like taxes filed by a certain date or pay a penalty. It wouldn't make the data perfect, but it would definitely improve it.”

 

Import prices rise more than expected in March.  The Labor Department reported Wednesday that import prices were up 1.2% in March and 6.9% year-on-year. Economists had expected increases of 1.0% and 6.3%, respectively. Fuel prices were up 6.3% for the month, while petroleum prices rose 6.7% and imported food prices were up 2.0%. Core import prices, which exclude volatile food an fuel prices, were up 0.8% for the month. Export prices rose 2.1% for the month, beating the 0.9% consensus forecast, and 9.1% on an annual basis.

 

Powell again says interest rate hikes unlikely before 2024.  Federal Reserve Chair Jerome Powell said policy makers will wait until inflation has reached 2% sustainably and the labor-market recovery is complete before considering lifting rates. The combination is unlikely to happen before the end of 2022, he said. Powell said, “Most members of the committee (Federal Open Market Committee) did not see raising interest rates until 2024, but that isn’t a committee forecast, it isn’t something we vote on or act on as a group — it really is just our assessment. Markets focus too much on what we call the economic predictions, and I would focus more on the outcomes that we’ve described.” Powell said the U.S. is “going into a period of faster growth and job creation, and that the main risk is another spike in Covid-19 cases due to virus strains that may be more difficult to treat.” Powell said the central bank will begin to slow its enormous bond-purchasing program “well before” it raises interest rates.

 

Price pressures noted in Fed recap. Price pressures were noted in nearly every Federal Reserve district in the Beige Book report Wednesday, with most banks citing greater increases in input costs. Most of those were linked to higher costs for metals, metal products and lumber. Auto industry prices were also higher due to constraints from a lack of microchips. While input prices were elevated compared with year ago, many businesses had not yet passed those increases on to consumers. Some of the increased costs were also tabbed to supply chain constraints, which some indicated they expected to see those ease in the months ahead. Even has higher prices were noted, there were no major fears about increased costs expressed across Fed districts. With employment rising in most districts and an ongoing difficulty for some in attracting workers for available jobs, some businesses were expecting to need to raise wages in a bid to get workers for open positions. Overall, the report painted a picture of modest to moderate economic activity, rising price pressures that were not yet a major concern, stronger jobs growth and consumer activity that was spurred in part by government stimulus payments that arrived during the period covered by the report. 

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is slightly lower. The greenback bulls have faded recently. Nymex crude oil prices are weaker on a corrective pullback from Wednesday’s sharp gains and trading around $62.75 a barrel. Meantime, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.618%. Gold and silver futures have posted advances, with gold above $1,747 per troy ounce and silver over $25.55 per troy ounce.


     • Crude oil futures are seeing light pressure ahead of the U.S. trading start. U.S. crude is trading around $63 per barrel while Brent is around $66.50 per barrel. Prices eased in overnight Asian action, with U.S. crude down 10 cents at $63.05 per barrel and Brent down four cents at $66.54 per barrel.

 

     • Self-driving truck startup TuSimple reportedly raised $1.35 billion in an IPO, pricing the shares at $40, above an earlier range. TuSimple and a selling shareholder sold 34 million shares at $40 each, above an estimated price of $35-$39, according to a Bloomberg report. The company is backed by strategic investors, including Volkswagen heavy-truck business The Traton Group, Navistar, Goodyear, U.S. Xpress, NVIDIA and United Parcel Service.

 

     • Fed notes some improvement on shipping empty containers. The Fed’s Beige Book report released Wednesday did not contain much new information on the U.S. transportation and freight industry, but contacts in the Richmond Fed district noted that there was a “decrease in the number of empty containers being exported.” This has been a major concern for ag shippers as they seek to continue moving their products into overseas markets. The Richmond Fed also noted that imports “far exceeded” the growth in exports during the period from mid-March to mid-April. On the trucking side, both the Cleveland and Richmond Fed recaps noted a shortage of drivers continued and was hampering the ability of the trucking industry to meet increased demands for freight. The Cleveland recap noted “more than two-thirds of transportation contacts expected demand to improve further in coming months even as driver shortages persist.”

     • Coinbase fetched a major valuation on its first day of public trading. The cryptocurrency exchange hit an $85 billion valuation in its debut Wednesday, opening at $381 on the Nasdaq Global Select Market before rising as high as $429.54 in the first few minutes of trading. While the company's financial picture, which includes an estimated $730 million to $800 million in first-quarter profit, has many bullish on the stock, some investors warn of a potential overvaluation.


     • Ag demand: The Philippines tendered to buy around 240,000 MT of milling wheat from Russia, Ukraine or Australia and 140,000 MT of feed wheat from Russia, Ukraine, Romania, Bulgaria, Brazil, Australia, the United States or Canada. Egypt’s state grains buyer is seeking at least 30,000 MT of soyoil and 10,000 MT of sunflower oil in an international purchasing tender. South Korea’s Korea Feed Association bought around 65,000 MT of corn to be sourced from the U.S. in a private deal. Japan purchased 63,170 MT of food-quality wheat from the U.S. and another 26,999 MT from Canada in a regular tender. Algeria is believed to have purchased around 200,000 MT of durum wheat in a tender.

 

Items in Pro Farmer's First Thing Today include:

     • Wide range of projections for March NOPA crush
     • Consultancy’s soft wheat export forecast for the EU + Britain edges higher
     • South African hit by bird flu
     • Choice beef prices turn back up
     • Light kills have market wondering about tightening market ready supplies

 


POLICY FOCUS


 

—  Vilsack confronts several issues raised during a House Ag Appropriations Subcommittee hearing. USDA Secretary Tom Vilsack laid out USDA’s goals to deal with food insecurity and nutrition programs in the president’s budget request, and the agency’s current focus on programs to address longtime racial discrimination. He heard several direct questions regarding efforts to halt stepped-up basis relative to Democratic tax reform proposals. “Normally I would talk to you all about numbers in the budget,” Vilsack said. “But these are not normal times, and this is certainly not a normal budget hearing.” Vilsack said President Joe Biden’s budget proposal aims to address climate change in agriculture and root out systemic barriers in the agency that have led to discrimination against Black farmers.

 

Key topics Vilsack addressed included:

  • Food box program: Vilsack said USDA will not continue the Food Box program as is but will incorporate portions into other programs. Bipartisan disappointment was heard when Vilsack said USDA would be ending the Farmers to Families Food Box Program (FFFBP) and that it would not continue in its current form. While citing issues the Biden administration found with the Trump-launched Food Box effort, Vilsack said several aspects of the program would be incorporated into other food and nutrition efforts. “There's going to be a continuation,” Vilsack assured lawmakers, with components of the program to be melded into existing efforts like The Emergency Food Assistance Program (TEFAP) and the coming Dairy Donation Program (DDP). “We're going to try to take what we've learned — the best of [FFFBP] — and incorporate it into our traditional, regular programs, which are very efficient in terms of food distribution,” he explained.

    The American Farm Bureau Federation reacted with dismay at the end of the FFFBP. This matches our expectation that while the FFFBP will not continue by name, the focus of providing a more-direct connection from farmers to consumers and more fresh foods will continue to be a tool used by USDA via other nutrition programs.  

    Vilsack was pressed by Rep. David Valadao (R-Calif.) over news that the program will wind down over the next month, saying it appeared to contradict Vilsack’s earlier comments about reworking the program. “The reality is [FFFBP] was set up to respond to Covid,” Vilsack said, adding that the effort encountered many problems. “There was a significant difference in administrative costs — in some cases, people were charged a tremendous amount just to fill the boxes. There was an inadequate accounting of where the boxes were actually delivered. There was a lot of food waste and loss that we uncovered as a result of listening sessions,” he added.

    Late last week, the department announced a new produce-specific food box effort under The Emergency Food Assistance Program (TEFAP) and is preparing a revised Dairy Donation Program (DDP), which Vilsack said will carry on some of the work done under FFFBP.

    Rep. Lauren Underwood (D-Ohio) followed, emphasizing the importance of FFFBP to food banks in her district. She asked Vilsack whether the new TEFAP produce box “will be able to fill the current need” and whether other flexibilities are being considered regarding the composition of new TEFAP produce boxes. Vilsack reiterated the primary difference between the new efforts and FFFBP will be the move to more established distribution systems, like TEFAP, adding the efficiency gains will leave more funds to be spent directly on food purchases.

     
  • Rural broadband: Members from both parties stressed the need for access to broadband service in their districts for high-tech agriculture, telehealth services and online education. Subcommittee Ranking Member Jeff Fortenberry (R-Neb.) asked Vilsack how the next round of USDA’s ReConnect rural broadband expansion program might better quantify the success of investments “beyond just physical infrastructure and money spent.” Vilsack said one focus will be “making sure that there is a minimum level of [upload and download] speeds that will make it significant and create those opportunities for telehealth, for distance learning, [and] for being able to operate your business out of your home.”

    In terms of costs for subscribers, Vilsack said USDA will coordinate with other agencies to effectively utilize the “substantial amount of money” set aside for rural broadband in the American Rescue Plan. He later added that USDA has “simplified and clarified the rules under which the [ReConnect program is] going to operate,” and told lawmakers to expect more progress from the program “over the course of the next several months.”

     
  • Ag climate efforts: Rep. Chellie Pingree (D-Maine) asked Vilsack to explain how more funding for USDA climate hubs, requested in the FY 2022 budget, will be used in practice. “It's a coordinated effort between the Forest Service, NRCS and in our research efforts of USDA,” Vilsack responded. “It's designed to provide a quality assessment of the risk associated with climate and most importantly creating opportunities to work with farmers, ranchers and producers on mitigation and adaptation strategies and embracing climate smart agricultural practices.” Some of the additional resources sought for the climate hubs will be used to ramp up activities, including hiring more staff, he added.

    Fortenberry said he was worried by comments Microsoft co-founder Bill Gates made in February that the world’s richest nations should turn to meat alternatives as a way to reduce greenhouse gas emissions from livestock. Fortenberry said such a move would upend the livestock industry in his state and other states. He asked Vilsack, who served as governor of Iowa before he joined the Obama administration, a top pork producing state, if he agreed. “What I do agree with is the fact that our farmers are in fact great stewards. I think there is an opportunity for farmers to embrace climate smart agriculture practices, to embrace animal welfare and stewardship and be able to allow us to message the ability and importance of animal protein production,” Vilsack said. Vilsack said he does not favor “a circumstance where we bar certain technologies.”

    “We need to compete. With the right policies and the right incentives,” Vilsack continued, saying he thinks there will be “wide adoption of climate smart agriculture, of methane capture and reuse, of biobased manufacturing. That is the transformative idea within climate. That is the opportunity to completely change the economy of rural America,” Vilsack said.

    Vilsack told Rep. Mark Pocan (D-Wis.) that he believes revenue streams for dairy farmers can be created by paying them to capture methane from cows that can be converted to energy and developing products from manure that keeps it from going to landfills or being washed in waterways. Vilsack added that a focus should be on helping farmers “embrace climate smart agricultural practices” and “to embrace animal welfare and stewardship,” including practices that reduce emissions of the GHG methane associated with beef and dairy production.

    Another key Vilsack said in a later exchange with Fortenberry is ensuring livestock growers have access to the latest methane-reducing technologies, including feed and feed additives. “What we have today is a situation where it's treated as if it was a pharmaceutical product, which creates a tremendous lag in getting that technology into the field,” he explained, saying competitors in other countries are already leveraging some of those technologies and that the U.S. must “be on top of that.”

     
  • Taxes: Vilsack faced questions from Rep Andy Harris (R-Md.) over potential estate tax changes being floated to help fund President Joe Biden’s multitrillion-dollar infrastructure package. Harris said his main concern was a proposal by the Biden administration that Congress amend the tax code, arguing that it would be harmful to multi-generational farmers who want to pass their land down if those farmers would be hit with an inheritance tax. “I don’t think at the end of the day (this tax code) is going to result in the destruction of the ability to pass on a farm,” Vilsack said. “I think there are tools in that tax code that will allow most farms to be transferred without difficulty.” He suggested special use valuation and other provisions of the estate tax help ensure most farms still remain below a lower estate tax exemption threshold, though he added that he did not know the “particulars that are being discussed” in terms of estate tax changes.

    Vilsack says he’ll make sure the Treasury Department understands the importance of stepped-up basis to farm groups. Panel Chairman Sanford Bishop (D-Ga.) noted that preserving stepped-up basis was a major concern of the American Farm Bureau Federation.

    Biden proposed during the presidential campaign to eliminate stepped-up basis. A Senate Democratic proposal that AFBF is fighting would tax all intergenerational transfers of property over $1 million, with no step-up in basis.

     
  • Trade policy: Rep. Dan Newhouse (R-Wash.) praised Vilsack for his previous comments urging Congress to move forward with reauthorization of “fast track” Trade Promotion Authority (TPA) (which allows Congress to vote on a new trade agreement without any amendments). He specifically asked Vilsack what is being done at USDA “to move the White House forward on trade on behalf of U.S. agricultural stakeholders.” Vilsack said he is in close contact with U.S. Trade Representative (USTR) Katherine Tai, and said conversations have touched on issues including enforcement of the U.S.-Mexico-Canada Agreement (USMCA), approaches to China, and addressing US beef export market access to Japan.

    “We've also had opportunities to reach out to the State Department to make sure that they're fully aware of agriculture's interests in a variety of areas around the world as issues unfold and can have an impact on trade relationships,” Vilsack noted, adding he has also reached out to his international counterparts. “I've had positive conversations recently with folks, particularly in our hemisphere,” he added, citing efforts to develop consensus on issues including climate change and science-based regulations.

     
  • Nutrition programs: Vilsack has made expanding the scope and access to the nutrition safety net a priority, including the Supplemental Nutrition Assistance Program (SNAP/food stamps) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Many lawmakers asked Vilsack to elaborate on his plans for achieving those goals.

    Outreach will be one key, Vilsack explained. “The reality is we need to do a better job of working to communicate with folks in a way that they understand, and they trust,” he observed. SNAP participation rates reached record levels during his previous tenure as USDA Secretary under President Obama, Vilsack pointed out. Another focus, he said, will be ensuring “states are doing their job because at the end of the day states administer this program.”

    Vilsack said benefit levels, particularly under SNAP, need a fresh look. “Folks can be hungry, even if they do get SNAP, because the benefit level I think needs to be examined,” he remarked, adding that he is “appreciative” of the temporary 15% SNAP benefit increase recently extended by Congress under the American Rescue Plan.

    Rep. Grace Ming (D-N.Y.) asked Vilsack whether he might support Congress moving to end SNAP policies that prohibit using the benefits to purchase hot foods. Vilsack said that besides looking at benefit levels and availability, the department is looking at ways to modernize the program “in terms of how benefits are accessible,” which could include things like “[incorporating] restaurants into the system more fully than they are today.”

    “This budget reflects the desire to do so for communities that have been dealing with persistent poverty for far too long,” Vilsack said, adding that he is looking forward to the agency relaunching the “Strike Force” program implemented in the Obama administration. The program provided $23.8 billion for 380 counties where poverty was persistent for more than 30 years.

     
  • Restaffing ERS and NIFA: The issue of staff vacancies at USDA’s Economic Research Service (ERS) National Institute of Food and Agriculture (NIFA) — following former USDA Secretary Sonny Perdue’s decision to move the agencies from Washington, DC, to the Kansas City region — was raised by Bishop. He asked Vilsack to detail his “plans to restore these agencies research capacity.”

    At NIFA, around 100 positions are currently unfilled, Vilsack reported, noting 221 previous vacancies have already been filled. “There's an aggressive effort to fill those positions, and to do so in a way that expands significantly the diversity within those folks who are working in NIFA,” he added. “I'm confident that we're going to get many of those positions filled. Some of them will be filled in Kansas City, and some of them will be filled in the Washington, DC, area.”

    Bishop also inquired as to when Undersecretary for Research, Education and Economics (REE) might be forthcoming. Vilsack indicated he is working closely with the White House to identify and vet potential nominees for that and other open positions.

— Looks like CFAP 2-AA payments won’t be going out in April.  Even though the prior Trump administration finalized the rule in January, the new Biden administration is sitting on it and making changes, sources advise.

 

— GOP senators working on infrastructure alternative. Sen. Mitt Romney (R-Utah) said a bipartisan group of senators is in “early stages” of discussing a pared-down infrastructure proposal. Romney said a call among 20 senators from both parties is planned for today. Romney said he would like to include priorities like roads, bridges, ports, airports and broadband, and said it should be paid for with user fees like a gas tax hike, vehicle miles traveled fee for electric cars, and airport fees.

 

     Separately, Sen. Shelley Moore Capito (R-W.Va.) the ranking Republican on the Environment and Public Works Committee, said she could see a bipartisan infrastructure plan of $600 billion to $800 billion, that forgoes the rolling back of corporate tax cuts and other parts of the 2017 tax law that the Biden administration has proposed.

 

     The Senate Appropriations Committee scheduled an April 20 hearing on Biden’s American Jobs Plan with Commerce Secretary Gina Raimondo, Transportation Secretary Pete Buttigieg, and EPA Administrator Michael Reagan.
 


BIDEN ADMINISTRATION PERSONNEL


 

— White House enlarges potential FDA commissioner list. The Wall Street Journal reports the Biden administration is considering a wider range of candidates for Food and Drug Administration (FDA) commissioner. Biden was expected to nominate Acting Commissioner Janet Woodcock, but a group of senators including Sen. Joe Manchin (D-W.Va.) have called for new leadership for the agency.

 

— Senate cleared Gary Gensler to lead the Securities and Exchange Commission, allowing President Joe Biden’s choice for Wall Street’s top sheriff to take over the regulator as it faces myriad market threats. Gensler, whose nomination was approved yesterday in a 53-to-45 vote, will lead the agency amid growing calls for more public company disclosures from both Democrats and corporate shareholders. Sens. Susan Collins (R-Maine), Chuck Grassley (R-Iowa), and Cynthia Lummis (R-Wyo.) voted in favor along with all Democrats. With Gensler’s arrival, Democrats will have a majority on the commission. Mandated corporate disclosure of political spending and climate risk merits a closer look given strong investor interest, Gensler said during his March 2 confirmation hearing.

 

— Senate approves White House Environmental Council pick. Brenda Mallory, President Biden’s nominee to head the White House Council on Environmental Quality (CEQ), won Senate confirmation yesterday. Sens. Susan Collins (R-Maine), Lindsey Graham (R-S.C.) and Rob Portman (R-Ohio) joined all Democrats in supporting her nomination, while Sens. Thom Tillis (R-N.C.) and Mike Rounds (R-S.D.) did not vote. In her new role, Mallory will oversee an office that has already started reviewing changes the Trump administration undertook to relax environmental permitting under the National Environmental Policy Act for large projects, such as highways and bridges. Mallory was approved by a 53-45 vote. She will be the CEQ’s first Black leader. One of her first priorities will be to e ither navigate a path through the Trump-era changes or lead a rewrite of them.

 

— Senate Ag to finally hold hearing on Bronaugh to be USDA deputy secretary. It took a while, but the Senate Agriculture Committee announced it will hold a hearing Thursday, April 22, on President Biden’s nomination of Jewel Bronaugh to be USDA deputy secretary.  


 


CHINA UPDATE


 

 Big sorghum sales to China reported; cancellation of some soybean purchases. USDA export sales data for the week ended April 8 showed sizable sales of China of U.S. sorghum for the week, but also cancellations of soybean purchases.

 

     For 2020-21, USDA reported activity to China of sales of 3,084 tonnes of wheat, net reductions of 23,678 tonnes of corn (only 9,000 tonnes were cancelled with 27,200 tonnes shifted to another destination), sales of 601,732 tonnes of sorghum (including 65,300 tonnes of sales cancelled but 659,100 tonnes were late reported), net reductions of 55,001 tonnes (reflecting new sales but cancellations of 132,000 tonnes), and 8,674 running bales of Upland Cotton.
 

     Activity for 2021-22 included reductions of 132,000 tonnes of wheat to China, but that was shifted to unknown destinations as opposed to being cancelled. Sales of 65,000 tonnes of sorghum and 264,000 tonnes of soybeans were also reported.
 

     Sales for 2021 of 3,325 tonnes of beef and 102 tonnes of pork were reported.

— U.S. climate envoy John Kerry is in Shanghai today to meet with Chinese officials as the world’s two largest carbon emitters seek rare common ground. The talks are aimed at convincing China to make a stronger commitment to global climate goals ahead of a summit of world leaders hosted by President Joe Biden on April 22, a confab to lay the groundwork ahead of a pivotal U.N. Climate Change Conference, COP 26, taking place in Scotland in September. Today’s session is the first visit of a Biden cabinet official to China, and is the first meeting of the two nations since talks between senior diplomatic and national security officials in March. Those Alaska talks began acrimoniously, with Chinese officials listing a litany of U.S. offenses in their opening remarks.

 

— U.S. dominated Q1 soybean exports to China. Refinitiv trade flow data shows China imported 19.1 MMT of soybeans during the first quarter of the year, which is a 2.9 MMT (17.9%) jump from year-ago, with the U.S. supplying 18.1 MMT of that oilseed. Brazil supplied around 1 MMT of soybeans, down sharply from 7.3 MMT in shipments in the first quarter of 2021. Slow crop development and rain delayed the start of Brazil’s soybean shipping season. But Refinitiv data signals U.S. soybean exports to China will likely slow to 700,000 MT in April and 200,000 MT in May, as near-record shipments to China pick up. Between 6.0 MMT and 10.1 MMT of Brazilian soybeans will likely arrive in China during April and May. Earlier this week, China’s customs office reported the country had imported nearly 21.2 MMT of soybeans during the first quarter.

 

— China GDP: first quarter growth tipped to jump above 20% following historic contraction last year. China’s first quarter economic growth rate is forecast to be above 20% from a year earlier, following a 6.8% contraction in the first three months of 2020. At a meeting last week attended by Chinese Premier Li Keqiang, Peng Wensheng, chief economist at prominent investment bank China International Capital Corporation, said the Chinese economy would grow by 19% in the first three months of the year, the same forecast made by analytics firm IHS Markit in a note on April 9. Whatever the figure, it is certain to be the highest quarterly growth rate since data first began being published in 1993. “China is one quarter ahead of the global economic recovery,” said Zhu Min, former deputy managing director of the International Monetary Fund.

 


TRADE POLICY


 

— Trade a key focus for pork producers in conference this week. Members of the National Pork Producers Council (NPPC) are taking part in a virtual Legislative Action Conference (LAC) this week, with trade a key focus. They are specifically pushing for additional access to the Vietnamese market for pork as that country struggles with African Swine Fever (ASF) losses to its hog herd. They are calling on lawmakers to join a letter urging U.S. Trade Representative Katherine Tai to procure more market access to Vietnam. Labor reforms, the full appropriation of funds for new Customs and Border Patrol (CBP) agriculture inspectors, the appropriation of funds for the National Animal Health Laboratory Network and other issues relative to foreign animal disease prevention and preparedness. A copy of the letter is available here. Domestic pork consumption in Vietnam is greater than 2.5 million metric tons (MT) per year, more than Mexico, where the United States exported 688,252 MT, valued at $1.1 billion in 2020. Last year, U.S. pork producers only exported 25,183 MT to Vietnam, valued at $54 million.

 

     Additionally, NPPC is advocating for meaningful labor reform. NPPC officials noed that pork producers offer jobs with good pay and benefits, but most Americans do not live near our hog farms or harvest facilities and rural populations continue to decline, causing the U.S. pork industry to be largely dependent on foreign-born workers. “Unfortunately, current visa programs fail to meet the workforce needs of pork producers and other year-round livestock farmers,” the group said. NPPC is urging Congress to address labor reform that both opens the H-2A visa program to year-round labor, without a cap, and provides legal status for agricultural workers already in the country.
 


ENERGY & CLIMATE CHANGE


 

— Biden names 12 nominees for key climate, transportation positions.  The White House on Wednesday released an announcement from President Biden of his selections for 12 administration posts “to lead on climate and transportation matters across key agencies.” According to the release, Biden is nominating:

  • Tommy Beaudreau for Deputy Secretary of the Interior, Department of the Interior;
  • Meera Joshi for Administrator, Federal Motor Carrier Safety Administration, Department of Transportation;
  • Faisal Amin for Chief Financial Officer, Environmental Protection Agency;
  • Christopher Coes for Assistant Secretary for Transportation Policy, Department of Transportation;
  • Shannon Estenoz for Assistant Secretary for Fish and Wildlife and Parks, Department of the Interior;
  • Radhika Fox for Assistant Administrator for Water, Environmental Protection Agency;
  • Michal Freedhoff for Assistant Administrator for Chemical Safety and Pollution Protection, Environmental Protection Agency;
  • Jill Hruby for Under Secretary for Nuclear Security and Administrator for of the National Nuclear Security Administration, Department of Energy;
  • Winnie Stachelberg for Assistant Secretary for Policy, Management, and Budget, Department of the Interior, Department of the Interior; and
  • Tanya Trujillo, Nominee for Assistant Secretary for Water and Science, Department of the Interior.

— Regan to testify on EPA budget. EPA Administrator Michael Regan on April 29 will testify on the Biden administration’s fiscal 2022 budget for the agency before a House Energy and Commerce subcommittee. Biden proposed $11.2 billion for the EPA in fiscal 2022, the largest ever for the agency.

 

— Axne pushes biofuel aid. A Democratic request to include biofuels aid in House infrastructure legislation emerged from Rep. Cindy Axne (D-Iowa). The House Agriculture Committee member in a letter (link) pressed her chamber’s leadership and several committee chairs to consider the biofuels sector as part of their proposed clean energy solutions. Axne said she’s previously brought her concerns to the attention of President Biden, USDA Secretary Tom Vilsack, and, most recently, Transportation Secretary Pete Buttigieg. She is “ready to support the robust infrastructure investments proposed by the White House, but our final proposals cannot forget this homegrown energy source that reduces our emissions and creates jobs across our nation,” Axne said in a statement.

 


FOOD & BEVERAGE INDUSTRY


 

— JBS plans to upgrade/expand several processing facilities. JBS SA plans to invest 1.7 billion reais ($301 million) through 2023 to expand and upgrade seven plants in Rio Grande do Sul. JBS indicated the upgrades are meant to meet both domestic and foreign demand. Brazil’s meat processors have benefitted from strong Chinese demand in the wake of African swine fever, though high feed costs and limited cattle availability have recently caused some facilities to idle production, as they have been unable to pass higher expenses on to its domestic market.

 


CORONAVIRUS UPDATE


 

 Summary: Global cases of Covid-19 are at 138,302,131 with 2,973,874 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 31,421,367 with 564,402 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 194,791,836 doses administered, 69,211,473 have been fully vaccinated, or 21.2% of the U.S. population.
 

— Impacts from pausing J&J vaccine. An advisory committee for FDA said it needed more time to assess the Covid-19 shot’s safety; it won’t vote on a recommendation for at least a week. The pause in the use of Johnson & Johnson’s Covid-19 vaccine over reports of rare but severe blood clots had some vaccination sites canceling thousands of appointments and others scrambling to switch to one of the two other authorized vaccines. A federal advisory panel declined to vote Wednesday on how to use the J&J vaccine, saying it needs to gather more information. Concerns the blood-clot issue could rekindle vaccine fears led the government to step up education efforts.

 

— More than 832 million vaccine doses have been administered across 154 countries. Enough doses have now been administered to fully vaccinate about 5% of the global population — but the distribution has been lopsided. Countries with the highest incomes are getting vaccinated 25 times faster than those with the lowest.

 


POLITICS & ELECTIONS


 

— GOP Rep. Kevin Brady won't seek re-election. Rep. Kevin Brady (R-Texas), the top Republican on the House Ways and Means Committee, announced Wednesday that he will not seek re-election next year after serving since 1997.Brady is term-limited in his role as the top Republican on the powerful panel with jurisdiction over the tax code, meaning he wouldn't be able to keep the position in the next session of Congress. He previously served as the committee's chairman from 2015 to 2019, including while Republicans enacted their 2017 tax overhaul under former President Trump. He acknowledged that the House GOP's internal rule limiting members to six consecutive years of committee leadership at a time played a role in his decision to retire. Brady's district outside Houston is a GOP stronghold and is not expected to become competitive for Democrats in next year's midterm elections. Brady's retirement will set off a race among House Republicans for the coveted top slot on the House Ways and Means Committee. Rep. Devin Nunes (Calif.) is the next most senior Republican on the panel, followed by Reps. Vern Buchanan (Fla.) and Adrian Smith (Neb.). Nunes is widely seen as the front-runner. Buchanan, a former businessman and one of the wealthiest members of Congress, is next in line in seniority after Nunes and is expected to compete for the spot.

 

— McConnell: Biden ‘gift-wrapping’ Afghanistan for Taliban. In remarks on the Senate floor Wednesday morning, Senate Minority Leader Mitch McConnell (R-Ky.) criticized President Biden for his plan to withdraw U.S. troops from Afghanistan by Sept. 11. In his remarks, McConnell said, “Quote: ‘Biden takes the easy way out of Afghanistan. The likely result is disaster.’ That is this morning’s lead editorial from one of the most liberal newspapers in the country. This administration has decided to abandon U.S. efforts in Afghanistan which have helped keep radical Islamic terrorism in check. And bizarrely, they have decided to do so by September 11th. Apparently, we’re to help our adversaries ring in the anniversary of the 9/11 attacks by gift-wrapping the country and handing it back to them.”

 

     Schumer backs Biden proposal. On CNN, Senate Majority Leader Charles Schumer (D-N.Y.) said, “I think President Biden has come up with a careful and thought-out plan. The president doesn’t want endless wars. I don’t want endless wars. And neither do the American people. And it’s refreshing to have a thought-out plan with a set timetable instead of the president waking up one morning, getting out of bed and saying what just pops into his head and then the generals having walked it back. So, I think this is a careful, thought-out plan. Now, there are questions that remain. I am happy to let you know that the administration has agreed to a classified briefing for all senators, which we’ll have shortly so questions can be answered. But I think the president’s plan is a very good one. You want to make sure the September 11th date is stuck, is a date that sticks. That it’s not kicking the can down the road. I’ve spoken to administration people and they believe just that as well.” Asked if he thought the U.S. withdrawal would embolden terrorist groups around the world, Schumer said, “Terrorists take all kinds of things into symbolism. The key issue is having the ability to stop them, to penetrate them. We’ve done a very good job of that thus far.”

 

— Racial equality top priority at Justice Dept. At her Senate confirmation hearing, Kristen Clarke, President Joe Biden’s pick to be the Justice Department’s civil rights chief, promised to make racial equality a top priority, drawing on her experiences as a longtime civil rights attorney and a single mother of a Black teenager. Clarke said in her opening statement, “As I look to my own son... I remain committed to the promise of working every day to build a world of equal opportunity for all.”

 

— Democrats ready legislation to add four seats to SCOTUS. A group of Democratic lawmakers plans to introduce legislation that would add four seats to the Supreme Court. Rep. Mondaire Jones (D-N.Y.), Rep. Jerry Nadler (D-N.Y.), Rep. Hank Johnson (D-Ga.), and Sen. Ed Markey (D-Mass.) are prepared to bring forth legislation on Thursday that would increase the number of justices on the high court from nine to 13. "Our democracy is under assault, and the Supreme Court has dealt the sharpest blows," Jones wrote in a Wednesday tweet. "To restore power to the people, we must #ExpandTheCourt."

 

     The effort is expected to face a big hurdle getting through the Senate unless Democrats are able to get rid of the filibuster, and even then, it's not guaranteed they would have 50 votes to support expanding the Supreme Court. The upper chamber is split 50-50 between the parties, with Vice President Kamala Harris as a potential tiebreaker. Democrats narrowly control the House. Last week, President Joe Biden ordered the creation of a commission on whether to expand the Supreme Court. Biden's executive order calls for naming a 36-person group that will review the court's history, precedent around changes to the nomination process, and will investigate the potential consequences of altering the court's size. A former chairman of the Senate Judiciary Committee, Biden has declined to say whether he supports efforts to reform the court, such as expanding the number of justices beyond its current nine members or instituting term limits. Justices currently serve lifetime appointments.

 

— House panel approved creating a commission to study the possibility of reparations for descendants of enslaved people in the U.S. Democrats on the House Judiciary Committee advanced the legislation Wednesday night over the objections of Republicans, voting 25-17 to bring it to the full chamber. The bill faces an uphill climb to becoming law. In the Senate, at least 10 GOP lawmakers would need to join with all 50 Democrats to advance it. Senate Minority Leader Mitch McConnell (R-Ky.) has previously said he is opposed to reparations. President Biden said he supported the legislation during his campaign.

 

     The legislation calls for the creation of a 13-member commission that would study the history of slavery and discrimination against Black Americans and make recommendations about possible remedies to address their lasting impact. It also tasks the commission with considering a national apology for the treatment of enslaved people and their descendants.

 

     Republicans have opposed the prospects of reparations for the descendants of slaves, arguing it would require taxing people who aren’t responsible for the evils of slavery. Rep. Burgess Owens (R-Utah), who is Black, said that the legislation wouldn’t substantially help Black Americans. “Reparation is divisive, it speaks to the fact that we are a hapless, helpless race and never did anything but wait for white people to show up and help us, and it’s a falsehood. It’s demeaning to my parents’ generation,” he said.
 


OTHER ITEMS OF NOTE     


 

— Russia sanctions. The Biden administration is expected to announce sanctions on several Russian individuals and entities tied to a widespread government cybersecurity breach that exploited the software of SolarWinds in December. The breach allowed intruders to access emails of a number of gov’t agencies, as well as steal encryption keys essential to safeguarding the correspondence of top U.S. officials. The move comes after President Joe Biden on Tuesday called for a summit with Russian President Vladimir Putin. The Russian ruble and Russian bonds sank on the news. Existing prohibitions on U.S. banks’ trading in Russian government debt will be expanded, 10 diplomats will be expelled — some over allegations that Moscow offered bounties for killing U.S. military-service members in Afghanistan — and Russia’s foreign-intelligence service will be formally accused of the so-called SolarWinds hack of U.S. government and corporate computer systems. Russia has denied interfering in U.S. elections and any involvement in the hack.

     Meanwhile, reports also say Russia is building up its army on the Ukraine border.

 

— U.S. Secretary of State Antony Blinken made an unannounced visit to Afghanistan today, following President Biden’s pledge to withdraw U.S. troops by Sept. 11.

 


 

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