White House Assessing Effects of Recent and Proposed Spending on Inflation

Posted on 04/14/2021 8:29 AM

USDA releases several program funding, other decisions ahead of Vilsack testimony

 


In Today’s Digital Newspaper


 

Market Focus:
• Earnings reports continue robust
• Investors await comments today from Fed chair Powell
• U.S. consumer prices rose sharply in March
NYT: White House assessing effects of recent and proposed spending on inflation

• Report: Ag machinery investment growth should remain robust
• Where did all the rental cars go?
• Sources: China will accelerate shipments of U.S. corn purchases during May-August  
• South America’s corn crop condition declined last week
• IEA raises oil demand forecast for 2021 on continued pandemic recovery
• OPEC expects a brightening outlook
• Egypt impounds Ever Given, says nearly $1 billion owed
• Texas again facing possible power-grid emergency
• Prices of cryptocurrencies led by bitcoin surged to record levels
• U.S. housing market is hot and lumber prices are even hotter
• Ag demand update

• Market on edge about Brazil’s safrinha corn crop
• 
Brazil’s corn-based ethanol production made big strides in 2020-21
• ANEC’s monthly soybean export outlook for Brazil climbs
• FranceAgriMer’s soft wheat export outlook for France edges higher
• With food prices climbing, Ukraine may restrict sunoil exports
• New Zealand to end livestock exports by sea
• Beef movement holds strong, as Choice beef slides and Select extends rally
• Pork and cash hog prices rise

Policy Focus:
• CFAP payments resume
• USDA details help for cotton
• USDA announces dairy donation effort to start soon
• Specialty crop, fruit and vegetable efforts announced by USDA
• Politico: USDA to end food box program
• FRA launches study of D&I in rail contracts
• New name, new funds for infrastructure grant  
• Showdown looming between states and Treasury Department

 

Biden Administration Personnel

• VP Harris will meet with migration experts today
• Trottenberg confirmed as Buttigieg’s deputy
• Biden to tap Beaudreau for Interior’s No. 2
• Senate votes today on confirmation of Gary Gensler to chair SEC

 

China Update:
• China warns of military action against Taiwan on eve of U.S. visit
• China informs USDA of more ASF infected pigs
• Chinese pork prices slide in latest reporting week

 

Energy & Climate Change:

• Kerry to meet with China re: climate change
• What questions should farmers ask about selling carbon credits?
• Companies call for bigger U.S. emissions reductions targets


Food & Beverage Industry Update:
• Poultry plant settlement
• New pollinator commitments


Coronavirus Update:
• U.S. has paused use of Johnson & Johnson’s Covid-19
• Can other vaccines fill the void?

 

Politics & Elections:
• Voting bill opposition
• Reparations vote
• Pelosi to swear in Rep.-elect Julia Letlow (R-La.) “
• Puerto Rico statehood


Other Items of Note:
• Labor Secretary Marty Walsh: Expect more labor-organizing efforts
• U.S. gov’t to spend $352 per night on hotel beds for 80,000 migrant families
• Water infrastructure bill coming in Senate
• Highway Trust Fund hearing today
• Worldwide threats focus of hearing
• EPA move to scrap Trump cost-benefit rule
• U.S. plans to withdraw all troops from Afghanistan by Sept. 11
• Biden proposed a U.S./Russia summit during call with Putin
• Up to $1 trillion a year in federal taxes may be going unpaid
• Court appeals case on California Proposition 12
• How do you hide a four-foot rabbit?

 


MARKET FOCUS


 

Equities today: U.S. equities opened slightly higher as traders focus on earnings reports (JPMorgan and Goldman Sachs profits soared last quarter) and comments today from Fed Chair Jerome Powell. In Asia, major stock indexes ended the day mostly higher. Hong Kong’s Hang Seng Index rose 1.4% and the Shanghai Composite Index rose 0.6%. Japan’s Nikkei 225 fell 0.4%. European equities are mostly higher with an eye on economic data and earnings updates. The Stoxx 600 was up 0.3% with most regional markets seeing gains of up to 0.7%.

 

     Nasdaq set the reference price for Coinbase's listing at $250, which would give the U.S.' largest bitcoin exchange a valuation of about $65 billion. The listing today is poised to make CEO Brian Armstrong one of the richest people in the world.

 

     U.S. equities yesterday: The Dow was unable to break into positive territory during the session, finishing down 68.13 points, 0.20%, at 33,677.27. The Nasdaq gained 146.10 points, 1.05%, at 13,996.10. The S&P 500 rose 13.60 points, 0.33%, at 4,141.59. The yield on the 10-year Treasury note edged higher to 1.639%, from 1.622% on Tuesday. Yields rise as prices fall.

 

On tap today:

 

     • U.S. import prices for March are expected to rise 0.9% from the prior month. (8:30 a.m. ET)
     • European Central Bank President Christine Lagarde speaks at a virtual Reuters event at 10 a.m. ET.
     • Federal Reserve Chairman Jerome Powell speaks to the Economic Club of Washington at 12 p.m. ET.
     • Fed releases its beige book at 2 p.m. ET.
     • Additional Fed speakers: Dallas’s Robert Kaplan at the Woodlands, Texas, Chamber economic outlook conference at 9:15 a.m. ET, New York’s John Williams to the Rutgers Finance Society at 2:30 p.m. ET, Vice Chairman Richard Clarida on the central bank’s new framework and outcome-based forward guidance at 3:45 p.m. ET, and Atlanta’s Raphael Bostic to the Georgia Tech School of Architecture at 5 p.m. ET.

 

U.S. consumer prices rose sharply in March as the economic recovery gained momentum, marking the start of an expected monthslong pickup in inflation pressures. Some of the price increases reflected temporary factors, but others showed how demand for many goods and services is reviving a year after the coronavirus pandemic shut down large swaths of the economy. The Consumer Price Index — which measures what consumers pay for everyday items including groceries, clothing, recreational activities and vehicles — jumped 2.6% in the year ended March, the biggest 12-month increase since August 2018. Nearly half the monthly increase was due to a 9.1% jump in gasoline prices, which have climbed partly due to production problems following severe winter storms.

 

     CPI

 

    The core CPI, which excludes the often-volatile categories of food and energy, climbed 1.6% over the prior year. Services prices, excluding energy, rose 0.4% in March from February, the fastest monthly pace since July 2020, as the country’s recovery from the initial Covid-19 impact took off. Prices for hotels, car rentals, airfare and admission to sporting events were all up in March.

 

     Coming out

 

Another sign of rising inflation. The National Federation of Independent Business’s monthly survey found the share of small businesses that raised selling prices and the share planning to raise selling prices in March were both the highest since 2008.

 

     Rising inflation

 

     Meanwhile, advisers at the White House have been assessing the effects of recent and proposed spending on inflation, the New York Times reports (link), projecting the behavior of shoppers and tracking financial market measures of inflation expectations, among other things. They believe that any price spike — which could be even bigger in April and May — is likely to be temporary (a position that Jay Powell, the Fed chair, seems to share).

 

2021 economic outlook Q2 update forecasts 11.2% growth in equipment & software investment, 5.7% GDP growth. Today the Equipment Leasing & Finance Foundation released the Q2 update (link) to its 2021 Equipment Leasing & Finance U.S. Economic Outlook forecasting 11.2% growth in equipment and software investment, and 5.7% growth in GDP this year. It indicates that over the next three to six months, agriculture machinery investment growth should remain robust.

 

     Summary: With U.S. vaccination rates rising quickly and the end of the pandemic in sight, equipment and software investment growth is expected to be robust this year as businesses invest to adapt to a post-pandemic normal. Annual equipment and software investment growth of 11.2% is forecast for 2021. Annual U.S. GDP growth for 2021 is forecast at 5.7%.

 

     Highlights from the Q2 update to the 2021 Outlook include:

  • The equipment and software investment growth forecast of 11.2 percent benefited from a 21 percent surge in Q4 2020, which provided a strong jumping-off point for 2021.
  • The U.S. economy expanded at 4.3 percent (revised) annualized rate in Q4 2020 as the nation struggled with surging COVID-19 cases and deaths. Although the labor market recovery is still far from complete and the K-shaped recovery has left millions of consumers in a precarious position, the overall balance of risks is on the upside. 
  • The U.S. manufacturing sector continued to improve in early 2021 due to strong demand for both consumer and business goods. Underlying demand remains strong, although supply chain backlogs should be monitored, and rising input prices could become an increasingly significant concern in the months ahead.
  • Main Street managed to weather the winter months and the third wave of the pandemic, although not without significant difficulty. Further federal relief and stimulus efforts have played an outsized role in the survival and longer-term viability of many businesses. Warmer weather, rising vaccination rates, and the relaxation of pandemic-era operating restrictions offer hope that there are better days ahead.
  • The Federal Reserve again confirmed its commitment to keeping interest rates at zero until at least 2023. The Fed also ended a pandemic-era capital requirement relief measure that could cause turmoil in bond markets.
  • Headwinds to keep an eye on include the potential for higher inflation, the ongoing labor market recovery, and the emergence of new virus strains that could reduce the effectiveness of existing vaccines.

     Nine verticals are showing signs of accelerating investment after the pandemic-fueled collapse, and three other verticals are showing signs of peaking, although investment growth should remain healthy in the near term. Over the next three to six months, year over year:

  • Agriculture machinery investment growth should remain robust.
  • Construction machinery investment growth could return to positive territory, though recent movement suggests that upside potential is limited.
  • Materials handling equipment investment growth should remain in positive territory.
  • All other industrial equipment investment growth should return to positive territory. 
  • Medical equipment investment growth should be strong.
  • Mining and oilfield machinery investment growth appears to have bottomed out and should improve despite this month’s decline.
  • Aircraft investment growth should continue to improve.
  • Ships and boats investment growth should be modest.
  • Railroad equipment investment growth should return to positive territory.
  • Trucks investment growth should return to positive territory.
  • Computers investment growth should remain strong.
  • Software investment growth should accelerate.

Where did all the rental cars go? Rental cars are in short supply and travelers can expect to pay a lot more than they used to — if they can even find a car to reserve. The week’s WSJ Middle Seat (link) looks at the reasons behind the rental-car squeeze. They range from high prices in the used-car market to auto-manufacturer problems with a semiconductor chip shortage to new preferences for rental cars over ride-sharing to limit exposure to strangers.

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is slightly lower. Nymex crude oil prices are firmer and trading around $61.15 a barrel. Meanwhile, the yield on the benchmark 10-year U.S. Treasury note is presently fetching around 1.632%. For perspective, the German 10-year bund yield is presently minus 0.295% and the 10-year U.K. gilt yield is trading at 0.774%. Gold and sliver futures are under light pressure ahead of the U.S. trading day, with gold trading around $1,744 per troy ounce and silver around $25.40 per troy ounce.


     • Crude oil prices have continued to advance on improved demand forecast by the International Energy Agency (IEA). U.S. crude is trading around $61.20 per barrel and Brent around $64.80 per barrel. Futures were higher in Asian action, with U.S. crude gaining 39 cents at $60.57 per barrel and Brent up 39 cents at $63.67 per barrel.

 

     • Commercial grain sources signal China will significantly accelerate shipments of U.S. corn purchases during the May-August timeframe. If so, that would make USDA’s World Board wrong, again, relative to China’s corn import situation.

 

     • South America’s corn crop condition declined last week.  The significant drop of the Parana crop brings the discussion of corn size into question, says trader and analyst Richard Crow.  He says: “History would suggest that for every 3 million tons drop in the crop size, 1 million tons of exports would be made up with U.S. old crop, the other slips to new crop.  The weather has some moisture in the 5-day forecast.” Meanwhile, Crow notes that wheat trade remains tied to corn. “The cold weather is of some concern, but most think the crops will not get hurt. The temps were as low as 28 last night in Southern Kansas. N.D. dry weather remains for the spring wheat crop.”

 

     • IEA raises oil demand forecast for 2021 on continued pandemic recovery. Global oil demand in 2021 is now seen at 5.7 million barrels per day (bpd) by the International Energy Agency (IEA), up 230,000 bpd from their prior outlook. However, the increased demand is still shy of 2019 levels by about 3%. While new economic growth forecasts from the International Monetary Fund (IMF) paint a stronger picture for the global economy, the IEA said the recovery remains fragile. “The massive overhang in global oil inventories that built up during last year’s Covid-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing,” the IEA said. However, they cautioned that “prices could yet come under renewed pressure in the coming months with world oil supply set to ramp up and shift the market from deficit towards balance.”

 

     • OPEC expects a brightening outlook and historic stimulus packages will boost global economic activity and oil demand this year. In its closely watched monthly market report, the Organization of the Petroleum Exporting Countries (OPEC) increased its 2021 global oil demand forecast by 100,000 barrels a day and raised its forecast for global economic growth by 0.3 percentage points to 5.4%.

 

        Crude oil futures

 

     • Egypt impounds Ever Given, says nearly $1 billion owed. Egypt has seized the container ship Ever Given that blocked the Suez Canal last month with a dispute arising on compensation the country is demanding from the ship’s Japanese owner. Reports indicate that Egyptian authorities are signaling the country should receive compensation for the situation that is around $1 billion. The court order issued allowing the seizure of the ship claims the ship’s owners failed to pay $900 million. Parties involved are still negotiating, reports indicated, and an undisclosed settlement offer has been made by 13 so-called Protection & Indemnity Clubs, according to the Wall Street Journal (link). The ship’s owner, Shoei Kisen Kaisha, is now said to be asking clients with containers stranded on the ship to pay part of the costs incurred with freeing the ship from the Suez Canal. The WSJ reported (link)that before the ship can move, those owning cargo on the boat will have to pay a security deposit that amounts to around 10% of the estimated value of the cargo as a “guarantee that they will abide by an insurance adjuster’s resolution when the final bill comes.”

 

     • Texas is again facing a possible power-grid emergency, less than 60 days after widespread blackouts left millions without light and heat for days during a deep winter freeze, Bloomberg reports. The grid operator is asking for conservation and warned it could declare an emergency to bring more power plants online after a mild cold front failed to reduce demand as much as expected, while 25% of generators are down for repairs. Wholesale electricity prices jumped as high as 10,000% in some parts of the state.

 

     • Prices of cryptocurrencies led by bitcoin surged to record levels ahead of the public listing of Coinbase Global. Bitcoin hit an all-time high of $64,754 apiece, ether climbed as high as $2,315 and dogecoin surged 77% to $0.13, according to CoinDesk.

 

     • The housing market is hot in the U.S. and lumber prices are even hotter, with the frenzy to buy so intense that half of the homes on the market are selling within a week, according to Redfin. There is plenty of lumber around, but there's a shortage of sawmill capacity to turn those trees into usable wood. Lumber prices hit a record high after soaring more than 250% in the past year. Rising lumber costs added more than $24,000 to the price of the average new single-family home.

 

       Lumber prices

 

     • Ag demand: South Korea’s Feed Leaders Committee bought around 65,000 MT of optional origin corn in a private deal. Jordan’s state grains buyer issued a new international tender to buy 120,000 MT of animal feed barley.

 

Items in Pro Farmer's First Thing Today include:

     • Market on edge about Brazil’s safrinha corn crop
     • 
Brazil’s corn-based ethanol production made big strides in 2020-21
     • ANEC’s monthly soybean export outlook for Brazil climbs
     • FranceAgriMer’s soft wheat export outlook for France edges higher
     • With food prices climbing, Ukraine may restrict sunoil exports
     • New Zealand to end livestock exports by sea
     • Beef movement holds strong, as Choice beef slides and Select extends rally
     • Pork and cash hog prices rise

 


POLICY FOCUS


 

— CFAP payments resume. USDA reported payments under the Coronavirus Food Assistance Program 2 (CFAP 2) are now at $13.33 billion as of April 11, reflecting an uptick since payments under the program were suspended back in late January. The total includes $6.18 billion in acreage-based payments, $3.41 billion for livestock, $2.48 billion for sales commodities, $1.20 billion for dairy, and $56.4 million for eggs/broilers.

     CFAP 1 payments are at $10.55 billion as of April 11, including $5.03 billion for livestock, $2.66 billion for non-specialty crops, $1.80 billion for dairy, $929.7 million for specialty crops and $120.0 million for aqua nursery flora.

 

     There has been no update on any payouts under CFAP — Additional Assistance (CFAP-AA) — as of yet.

 

—  USDA details help for cotton. USDA will provide approximately $80 million in additional payments to domestic users of upland and extra-long staple cotton to support textile mills impacted by the pandemic under a one-time payment program — the Pandemic Assistance for Cotton Users (PACU) program.

 

     The payment rate will be $0.06 per pound to domestic users based on a 3-year monthly average during 2017 through 2019, covering 10 months in 2020. The program and payment formula were established by the Consolidated Appropriations Act, 2021. USDA will use consumption information previously submitted to USDA’s Agricultural Marketing Service (AMS) by domestic cotton users as participants of the Economic Adjustment Assistance for Textile Mills (EAATM) and Special Competitive Provisions for Extra Long Staple Cotton (ELS) to determine payments. The payments could start to go to domestic cotton users in mid- to late-April.

 

     Comments: This program was prescribed by law, so not much if any wiggle room for USDA.

 

— USDA announces dairy donation effort to start soon. Implementation of the Dairy Donation Program (DDP) as established in the Consolidated Appropriations Act 2021 to “facilitate the timely donation of dairy products to nonprofit organizations that distribute food to persons in need and prevent and minimize food waste” will be coming soon, USDA said Tuesday.

 

     USDA provided an advance notice of minimum provisions to be included in the program to encourage the dairy industry to process and donate surplus milk supplies as it moves through the spring surplus milk production season. While noting the regulations for the effort have not been published in the Federal Register, USDA laid out minimum requirements for the program that was included in law. Those minimum requirements include:

     1) a donation and distribution plan must be submitted and approved by USDA;
     2) the reimbursement will be at least equivalent to the minimum classified value of milk used to make the donated product on the date of manufacturing;
     3) records related to donating and receiving products must be maintained and available for review and/or audit;
     4) eligibility is open to dairy farmer cooperatives and processors who “account to” a Federal milk marketing order (FMMO) and donate dairy products to any private or public nonprofit food distribution entity.

     The regulations for the dairy effort have also not been sent forward from USDA to the Office of Management and Budget (OMB) for the usual interagency review.

 

— Specialty crop, fruit and vegetable efforts announced by USDA. USDA’s Agricultural Marketing Service (AMS) announced additional actions under the Pandemic Assistance Program (PAP), including $169.9 million for the Specialty Crop Block Grant Program (SCBGP) and the availability of $75 million for Gus Schumacher Nutrition Incentive Program [GusNIP; formerly known as Food Insecurity Nutrition Incentive (FINI)] grantees. The efforts are to “expand the specialty crop food sector and incent the purchase of fruits and vegetables by low-income consumers,” USDA said. The effort under SCBGP includes $72.9 million available as part of the annual Farm Bill funding for the program; and an additional $97 million available as emergency funding provided in the Consolidated Appropriations Act of 2021.
 

— Politico: USDA to end food box program. USDA’s Trump-era food box program, begun at the start of the pandemic, will soon come to an end, Politico reports, noting that USDA “decided to only continue administering the Farmers to Families Food Box Program until May, extending a few of the current contracts by one month. Remaining funds will be placed toward more traditional food purchases and also to provide grants to shore up other needs in the food supply chain, according to a USDA official familiar with the decision.” While the program “had a number of challenges and didn’t reach everyone intended, it did help respond to severe market disruption caused by the collapse of food service in the early stages of the pandemic,” the official said.

 

— FRA launches study of D&I in rail contracts. The Federal Railroad Administration (FRA) is undertaking a nationwide study examining disparity in rail projects. The probe will see if there’s a level playing field for small, minority-owned and woman-owned business who bid to win subcontracts from those who receive grant funds from the agency. “We are firmly committed to increasing equity across the American economy and ensuring that women and minority-owned businesses have a fair shot at contracting opportunities funded by federal dollars,” said FRA Acting Administrator Amit Bose in a statement (link).

 

— New name, new funds for infrastructure grant. Projects that can show improvements to racial equity and decrease the impacts of climate change will be prioritized in another major grant program at the Department of Transportation. The department yesterday announced the availability of $1 billion in discretionary funding for fiscal year 2021 through the newly renamed Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grants. The program, which gives funds to road, rail, transit, and port projects, has formally been called Better Utilizing Investments to Leverage Development (BUILD) and Transportation Investment Generating Economic Recovery (TIGER).

 

— A showdown is looming between states and the Treasury Department over a provision that prevents states from using the latest round of Covid-19 relief money to cut taxes, the Wall Street Journal reports (link). Republican lawmakers and attorneys general argue the provision is vague and unconstitutional. The Treasury Department is being pressed for guidance on how it will interpret the legislation as some states look to complete their budgets before the next fiscal year begins on July 1.
 


BIDEN ADMINISTRATION PERSONNEL


 

VP Kamala Harris will meet with migration experts today. Vice President Kamala Harris will step into her new role addressing the causes of the swell of migrants arriving at the southern border, meeting today with outside experts on Central America's Northern Triangle countries. Harris's discussion with officials and outside advisers, was announced by the White House Tuesday. It follows announcements by the White House on migration issues, including a deal struck with Mexico, Honduras, and Guatemala to boost enforcement along their borders. The virtual meeting will take place in the vice president's ceremonial office in the Eisenhower Executive Office Building. Harris has been tapped by Biden to lead diplomatic efforts with the countries amid a migration surge at the Southern border.

 

— Trottenberg confirmed as Buttigieg’s deputy. The Senate on Tuesday confirmed New York policy veteran Polly Trottenberg to the No. 2 spot at the Transportation Department. She will bring more than 30 years of experience to helping President Biden sell his $2.25 trillion infrastructure package.

 

— Biden to tap Beaudreau for Interior’s No. 2. Tommy Beaudreau, a veteran of the Interior Department who charted new restrictions for Arctic oil drilling under former President Barack Obama, is being tapped to return to the agency as its No. 2 official, according to reports. Biden is slated to nominate Beaudreau to be the deputy Interior secretary. Beaudreau, a lawyer, rose to prominence for his role amid the disastrous Deepwater Horizon oil spill in the Gulf of Mexico in 2010, when he was responsible for helping to turn around the Interior Department’s oversight of offshore oil development. Perhaps key is that Beaudreau hails from Alaska and has the backing of Sen. Lisa Murkowski (R-Alaska).

 

— The Senate will vote at 11:45 a.m. ET on confirmation of Gary Gensler to be chair of the Securities and Exchange Commission, followed by a cloture vote advancing the nomination of Brenda Mallory to be chair of the Council on Environmental Quality. At 3 p.m. ET, the Senate will vote on Mallory’s confirmation.

 


CHINA UPDATE


 

China warns of military action against Taiwan on eve of U.S. visit. Beijing warned on Tuesday it was determined to stop Taiwan getting close to Washington with the use of military action, ahead of a visit by a former US politician and officials to the island at President Joe Biden’s request. Ma Xiaoguang, a spokesman for the Taiwan Affairs Office of the State Council, said the recent deployment of the largest fleet of warplanes to Taiwan’s air defence identification zone (ADIZ) was to tell Taiwan that moving closer to the U.S. to seek independence would fail. “The signal given by the military drills is that we are determined to stop Taiwan independence, and stop Taiwan from working with the US. We are doing it with action,” Ma told reporters on Tuesday. “We do not promise to abandon the use of force and retain the option of taking all necessary measures. We are aimed at the interference of external forces and the very small number of separatists and their separatist activities. We are definitely not aimed at compatriots in Taiwan.” Ma’s warning came as former U.S. Sen. Chris Dodd (D-Ct.) and former deputy secretaries of state Richard Armitage and James Steinberg headed to Taiwan on Tuesday at Biden’s request. The White House said the exchange was a “personal signal” of Biden’s commitment to Taiwan and its democracy. They are expected to meet Taiwanese President Tsai Ing-wen on Thursday.

 

— China informs USDA of more ASF infected pigs. China notified USDA that new African swine fever (ASF) cases were detected in live hogs, making it the fourth notification since the end of January, according to a report (link) from a U.S. ag attaché. “Authorities indicated the detection occurred when authorities found the illegal transportation of live hogs from outside of Hunan Province,” the attaché said. “There were 61 susceptible animals, of which three were sick and three died. The remaining animals were culled and disposed.”

 

— Chinese pork prices slide in latest reporting week. From April 6 to April 9 the average pork price index tracked by China’s ag ministry dropped 13.1% to 27.05 yuan ($4.10) per kilogram. The index is down 37.8% from year-ago levels. Given renewed reports of ASF and global inflation concerns, Chinese pork prices are again garnering more attention.

 


ENERGY & CLIMATE CHANGE


 

Kerry to meet with China re: climate change. Ahead of his trip to Shanghai for meetings with Chinese officials, U.S. special climate envoy John Kerry told the WSJ (link) that the U.S. will find ways to force China to be accountable for its climate pledges. House Foreign Affairs Ranking Member Michael McCaul (R-Texas) said Kerry's trip was sending "the absolute wrong signal" and that the U.S. "should be working with countries that want to solve international problems, not those that are creating or worsening them.” And Rep. Garret Graves (R-La.) told the WSJ that despite China's climate commitments on paper, there's "not a chance" it'll follow through. "China’s going to do what’s in China’s interest,” he said.

 

— What questions should farmers ask about selling carbon credits? That’s a timely topic from the FarmDoc group. Link for the item.

 

— Companies call for bigger U.S. emissions reductions targets. More than 300 businesses, including McDonald’s and Walmart, signed a public letter urging the Biden administration to nearly double its carbon-emissions goals before an April 22 summit on climate change. Link for details via the New York Times.

 


FOOD & BEVERAGE INDUSTRY


 

— Poultry plant settlement. Poultry processor Mountaire agreed to pay a total of $205 million to resolve state and federal lawsuits over contaminated groundwater near its plant in Millsboro, Delaware, where residents had high rates of disease and sickness. Link for details via the Washington Post.

 

— New pollinator commitments. To preserve bees and other pollinating insects, Walmart said (link) it will require, by 2025, all of its fresh produce and floral products to come from growers who follow integrated pest management practices, reducing the use of pesticides. The company will also encourage produce suppliers to create or maintain pollinator habitats on 3% of their land.

 


CORONAVIRUS UPDATE


 

 Summary: Global cases of Covid-19 are at 137,515,918 with 2,960,380 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 31,345,992 with 563,449 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 192,282,781 doses administered, 65,159,289 have been fully vaccinated, or 20.8% of the U.S. population.

 

— U.S. has paused use of Johnson & Johnson’s Covid-19 vaccine amid concerns about blood clots. Scientists are racing to understand the cause of blood clots that affected six recipients of the J&J vaccine in the country and led authorities to recommend a pause in its use. A CDC panel is meeting today to debate whether and how the J&J vaccine should be used going forward. Dr. Janet Woodcock of the FDA said the pause might last “a matter of days,” and Dr. Anthony Fauci said “more like days to weeks, rather than weeks to months.”

 

     Can other vaccines fill the void? President Biden said he had “made sure we have 600 million doses” of the Moderna and Pfizer-BioNTech vaccines, “so there is enough vaccine that is basically 100 percent unquestionable for every single solitary American.” The effect of the pause is likely to be greater outside the United States.

 


POLITICS & ELECTIONS


 

— Voting bill opposition. The U.S. Chamber of Commerce urged senators to oppose a Democratic-backed voting-overhaul bill, saying it would impose onerous restrictions on political advocacy by corporations.

 

— Reparations vote. The House Judiciary Committee will meet at 10 a.m. ET to consider several pieces of legislation, including HR 40, which would establish a commission to study reparations for African-Americans. It is the first time such a bill has received a vote by a House committee.

 

— House Speaker Nancy Pelosi (D-Calif.) will ceremonially swear in Rep.-elect Julia Letlow (R-La.) at 12 p.m.ET. Letlow won a special election last month to fill the seat vacated by her husband Luke, who died of Covid-19 last year before he could take office.

 

— Puerto Rico statehood. House Natural Resources Committee will hold a hearing at 1 p.m. on HR 1522, which would admit Puerto Rico as a state, and HR 2070, which would create a status convention to allow Puerto Ricans to consider their political status. Puerto Rico Gov. Pedro Pierluisi and other officials from the commonwealth will testify.
 


OTHER ITEMS OF NOTE     


 

— Labor Secretary Marty Walsh said Amazon.com and other large companies should expect to see future labor-organizing efforts despite the rejection of a union at the e-commerce firm’s Bessemer, Ala., warehouse. Walsh, who took office last month, said the vote doesn’t change President Biden’s goal of increasing union jobs in the United States.

 

— U.S. gov’t to spend $352 per night on hotel beds for 80,000 migrant families. The U.S. government is spending $352.64 per hotel bed per day to house the 80,000 migrant families that it anticipates will come across the border between now and September, according to a federal document. That tally will eventually reach $86,947,271.04, the amount of the contract that the Biden administration awarded to a nonprofit group last month on behalf of Immigration and Customs Enforcement. Some 1,239 beds at seven hotels located in Arizona and Texas have been rented out for 199 days, or six and a half months. The federal contract dubs the hotels as “emergency family reception sites” where families will be held up to three days before being released into the United States, with or without documents mandating they appear in court down the road.

 

— Water infrastructure bill coming. Senate Majority Leader Chuck Schumer (D-N.Y.) told his caucus at a meeting yesterday he aims to have bipartisan water infrastructure legislation (S 914) on the Senate floor this month. He also plans to have the measure open for amendments. The Senate also plans to start consideration as soon as next week on a Congressional Review Act resolution (S. J. Res. 14) to restore Obama-era methane emissions limits.

 

— Highway Trust Fund hearing today. The Senate Environment and Public Works Committee plans a hearing on Highway Trust Fund solvency, the Surface Transportation Funding Alternatives Program and other user-based revenue solutions. Douglas Shinkle, transportation program director of the National Conference of State Legislatures, will discuss how states have used their own alternative funding mechanisms, such as hiked gas taxes, tolling programs, new road user charging programs, and fees on electric and hybrid vehicles, according to a synopsis of his testimony seen by Bloomberg Government.

 

— Worldwide threats focus of hearing. The Senate Intelligence Committee scheduled a hearing today on worldwide threats. Ecological degradation and climate change “will continue to fuel disease outbreaks, threaten food and water security, and exacerbate political instability and humanitarian crises,” according to the unclassified assessment prepared by the Office of the Director of National Intelligence. The hearing will include testimony from Director of National Intelligence Avril Haines, CIA Director William Burns, and FBI Director Christopher Wray.

 

— EPA move to scrap Trump cost-benefit rule. EPA is moving to trash a Trump-era mandate that focused on cost-benefit analysis in Clean Air Act rulemaking. A final action titled “Rescinding the Rule on Increasing Consistency and Transparency in Considering Benefits and Costs in the Clean Air Act Rulemaking Process” is currently under review at the Office of Information and Regulatory Affairs (OIRA, at OMB) before it goes public. EPA sent the final rule forward for review April 8.

 

     Meanwhile, White House environmental officials are removing a Trump administration hurdle designed to limit the influence of their guidance on industry and to remind the public that it isn’t legally binding. The new approach, announced yesterday by the Council on Environmental Quality (CEQ), won’t by itself open the floodgates to new guidance documents, according to the announcement. Instead, it will give CEQ more “flexibility” when deciding when and how to publish guidance. It’s the latest in Biden administration efforts to roll back Trump’s environmental actions and weave climate considerations into how agencies across government regulate. Guidance documents are routine for agencies and often written to help industries comply with complex rules. They aren’t legally binding but often can serve as the basis for enforcement against companies.

 

— The U.S. plans to withdraw all troops from Afghanistan by Sept. 11. President Biden selected a symbolic target date — the 20th anniversary of the Sept. 11, 2001, al Qaeda terrorist attacks — to define the end of the longest war in U.S. history. Officials said the troop withdrawal is likely to be completed well before the Sept. 11 target date, possibly by this summer. The U.S. war in Afghanistan began on October 7, 2001, two decades and three presidents ago. The conflict has resulted in the deaths of more than 2,300 U.S. military personnel and around 40,000 civilians, and cost more than $800 billion, according to ABC News. It is the longest war in U.S. history. Biden at 2:15 p.m. ET will deliver remarks on his timeline for withdrawing troops in Afghanistan. At 3:05 p.m. ET, he will visit Section 60 of Arlington National Cemetery, where many veterans from the wars in Iraq and Afghanistan are buried.

 

— President Biden proposed a U.S./Russia summit during a call with Russian President Vladimir Putin that addressed deep differences, including Russia’s troop buildup near Ukraine.

 

— As much as $1 trillion a year in federal taxes may be going unpaid because of errors, fraud and lack of enforcement resources, IRS chief Charles Rettig told lawmakers. He added that the so-called tax gap was growing in part because of cryptocurrency trading and corporate abuse of pass-through provisions in the tax code.

 

— Court appeals case on California Proposition 12. The National Pork Producers Council and the American Farm Bureau Federation will go before the 9th Circuit Court of Appeals today to argue that the court should strike down California’s Proposition 12 as unconstitutional. Prop 12 was approved by California voters in 2018. The law requires that, beginning in 2022, farmers and ranchers provide a minimum amount of square feet in living space, or removed cagings, for hens and pigs, and would bar the sale of farm products from producers that do not meet these standards. The law also bans animal products from out of state that fail to meet the standards. The ag groups say these standards are arbitrary and will significantly lower the nation’s supply of pork, driving up prices. The groups also say compliance with Prop 12 will cost farmers millions, potentially putting them out of business.

 

— How do you hide a four-foot rabbit? Darius, which at four-feet was declared the world's longest rabbit in 2010, is missing from his owner's garden in a small English village and police are treating the disappearance as an abduction. Link for details via ABC News.  

 


 

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